Ok, LITS, so you think it's stupid to take on excessive debt to go to a fancy school. I agree, I think most people on this board actually and personally agree, and the vast majority of people everywhere agree in terms of undergraduate education. The statistics would bear this out. The vast majority of student loan debt in this country comes from public institutions: http://www.finaid.org/loans/
Look at the chart there for 4-year colleges. 61% of people going to public schools take on debt, and on average that debt is nearly $20,000 (remember that 5 times as many people go to public colleges vs. private colleges, so even the extra loan burden shown by private college graduates, which is real, in aggregate still only represents a tiny fraction of U.S. student loan debt, somewhere in the neighborhood of 4%). That means for every person who only takes out $5,000 in loans at State U, you've got someone (or several someones) taking on significantly more than $20,000 in debt. This is for a public, state-sponsored education.
It's a straw man argument to say that people raising this issue are just a bunch of whiners who opted for $80,000 in debt from Harvard over no debt from U Mass. That's a such a statistically insignificant portion of the population it's entirely irrelevant. And, I think, to Hornet's personal point, most people who made that decision aren't, in fact, out of jobs. They get the job over the kid who went to State U. Unfair, but true.
People are upset because lots of kids took out loans to get through state universities because this is what high schools forcefully encourage students to do (high schools are rated, both socially, and explicitly by districts, based on the percentage of graduates who go onto higher education) and suddenly they graduate (or graduated 2-3 years ago) and find themselves without jobs, without prospects for jobs, and with $25,000 in loans that they can't pay off and quickly capitalizing interest. That's what people are terrified about. And no matter the number of anecdotal stories we all tell about ourselves and/or our high-caliber friends who managed to get through school without debt, they don't erase the fact that we're looking at swarms of young people swimming under unmanageable debt that they were encouraged to take on to avail themselves of "low-cost" public education options.
I understand your perspective that you made better financial choices than other people, and I'll agree and congratulate you, but in terms of public policy, we need to figure out what to do about the generation of people who took on excessive debt to go to STATE schools and who now are out of work and getting financially encumbered in a way that will shape their futures and our country's future. How are people who are saddled with $25,000 or $30,000 in debt with capitalizing interest ever going to buy houses? If this generation has 15% fewer home buyers will our housing market ever get out of free fall?
Maybe all of this is a-okay. Maybe you can make an argument that discouraging people from going to college and shuttering a few hundred universities is good in the long run. Maybe the housing market should be in free fall, and we should stop construction. There are valid arguments to support these claims. But there will be severe consequences to any of these scenarios. Jobs associated with real estate and construction and higher education will all evaporate then too, leaving fewer jobs for this exact same generation of people. The fewer kids who go to college mean more kids applying for jobs that don't demand a degree, which, you might see in other news articles, is a job pool that's been shrinking for years.
This might be a period of creative destruction and everything will work out better in the end, but it will be painful along the way and I don't think it benefits any conversation to pretend that the issue is whiny, Harvard-grads who don't want to work and should have done whatever thing it is that we did when we had this decision to make. We can all get annoyed by that image of a person.
I'm also one of the lucky ones who made a smart college-debt related decision back when I had that decision to make (my options included service academies, Ivys, and public institutions, so my decision allowed for a variety of financial options), but a few years ago (at the start of the financial downturn) I happened to be teaching at the University of Wisconsin and I saw a lot of hardworking, earnest kids who made the financially prudent choice to go to their state school but still had to take on debt to do it and graduated last spring into a bleak situation. They were anything but lazy and entitled. They have worked part-time jobs, carried full course loads, lived frugally, and are stuck in a tough financial position now. Should they have known in April of 2007 when they were deciding where to go to school that they simply shouldn't have enrolled in college because the financial universe was about to melt down? Where would that have left them? In small towns without job opportunities and without a degree? No debt, but what else?
The kids I taught by and large aren't at the Occupy rallies, and they will by and large grit their teeth and figure things out, move back home, take part-time retail jobs, unpaid internships, and save money and gain experience. But there's no use pretending that the deal they got isn't a lot more raw than the deal most of us got. They have a right--and even a social obligation--to point this out to the generation that encouraged them to make this very series of choices and is now sticking them with the bill. I'm not saying they get to default on that bill, but I do think we can all stand to look a little more closely at what we, as a society, have been encouraging people to do.
Look at the chart there for 4-year colleges. 61% of people going to public schools take on debt, and on average that debt is nearly $20,000 (remember that 5 times as many people go to public colleges vs. private colleges, so even the extra loan burden shown by private college graduates, which is real, in aggregate still only represents a tiny fraction of U.S. student loan debt, somewhere in the neighborhood of 4%). That means for every person who only takes out $5,000 in loans at State U, you've got someone (or several someones) taking on significantly more than $20,000 in debt. This is for a public, state-sponsored education.
It's a straw man argument to say that people raising this issue are just a bunch of whiners who opted for $80,000 in debt from Harvard over no debt from U Mass. That's a such a statistically insignificant portion of the population it's entirely irrelevant. And, I think, to Hornet's personal point, most people who made that decision aren't, in fact, out of jobs. They get the job over the kid who went to State U. Unfair, but true.
People are upset because lots of kids took out loans to get through state universities because this is what high schools forcefully encourage students to do (high schools are rated, both socially, and explicitly by districts, based on the percentage of graduates who go onto higher education) and suddenly they graduate (or graduated 2-3 years ago) and find themselves without jobs, without prospects for jobs, and with $25,000 in loans that they can't pay off and quickly capitalizing interest. That's what people are terrified about. And no matter the number of anecdotal stories we all tell about ourselves and/or our high-caliber friends who managed to get through school without debt, they don't erase the fact that we're looking at swarms of young people swimming under unmanageable debt that they were encouraged to take on to avail themselves of "low-cost" public education options.
I understand your perspective that you made better financial choices than other people, and I'll agree and congratulate you, but in terms of public policy, we need to figure out what to do about the generation of people who took on excessive debt to go to STATE schools and who now are out of work and getting financially encumbered in a way that will shape their futures and our country's future. How are people who are saddled with $25,000 or $30,000 in debt with capitalizing interest ever going to buy houses? If this generation has 15% fewer home buyers will our housing market ever get out of free fall?
Maybe all of this is a-okay. Maybe you can make an argument that discouraging people from going to college and shuttering a few hundred universities is good in the long run. Maybe the housing market should be in free fall, and we should stop construction. There are valid arguments to support these claims. But there will be severe consequences to any of these scenarios. Jobs associated with real estate and construction and higher education will all evaporate then too, leaving fewer jobs for this exact same generation of people. The fewer kids who go to college mean more kids applying for jobs that don't demand a degree, which, you might see in other news articles, is a job pool that's been shrinking for years.
This might be a period of creative destruction and everything will work out better in the end, but it will be painful along the way and I don't think it benefits any conversation to pretend that the issue is whiny, Harvard-grads who don't want to work and should have done whatever thing it is that we did when we had this decision to make. We can all get annoyed by that image of a person.
I'm also one of the lucky ones who made a smart college-debt related decision back when I had that decision to make (my options included service academies, Ivys, and public institutions, so my decision allowed for a variety of financial options), but a few years ago (at the start of the financial downturn) I happened to be teaching at the University of Wisconsin and I saw a lot of hardworking, earnest kids who made the financially prudent choice to go to their state school but still had to take on debt to do it and graduated last spring into a bleak situation. They were anything but lazy and entitled. They have worked part-time jobs, carried full course loads, lived frugally, and are stuck in a tough financial position now. Should they have known in April of 2007 when they were deciding where to go to school that they simply shouldn't have enrolled in college because the financial universe was about to melt down? Where would that have left them? In small towns without job opportunities and without a degree? No debt, but what else?
The kids I taught by and large aren't at the Occupy rallies, and they will by and large grit their teeth and figure things out, move back home, take part-time retail jobs, unpaid internships, and save money and gain experience. But there's no use pretending that the deal they got isn't a lot more raw than the deal most of us got. They have a right--and even a social obligation--to point this out to the generation that encouraged them to make this very series of choices and is now sticking them with the bill. I'm not saying they get to default on that bill, but I do think we can all stand to look a little more closely at what we, as a society, have been encouraging people to do.