Degrees of deception: How America's universities became debt factories

1) Move most good careers that do not require a college degree out of the country for the benefit of shareholders

2) Tell everyone born between 1980 and 1995 that they'll be unable to compete in the global marketplace if they don't get at least some post-high school education, and imply that the mere presence of a degree will help instead of having a specific type of degree

3) Have next-to-zero standards for public funds used in grant and loan programs for college education, meaning people can take out loans for any sort of degree program at almost any sort of institution

4) Hold these debtors to standards that aren't applied to other types of debtors. You cannot discharge them through bankruptcy, it's very difficult to renegotiate, and SCOTUS has said that the chief executive of the note-holding institution (in this case, the President of the United States) cannot use discretion in deciding who he gets to forgive for loans.

We should be way more willing to straight up kill multi-billion dollar industries. Without that willingness, most modern problems are impossible for governments to solve, and such industries and even their potential competitors are incentivised mostly to exacerbate the problem. I love a good market as much as anyone but there really are problems markets will never solve

I don't know if this is some kind of heresy, but here we go.

I don't think universities provide much value at all to the common student who is not going to be a PhD.

I went to a very well-known institution known for putting the students in a room with the professors, maybe two or three students, to one professor. My economics professor taught me one on one.

I still think, in the end, the work is mostly done alone, in a pile of books, on your own time.

Not with other students, and not in lectures, and not in tutorials.

This is a bit different from school where you can actually learn the material in class because, let's face it, school doesn't have a very deep curriculum.

So at university my impression is that they mainly tell you what to go and read about, and then you read about it yourself. The tutor is there to course correct you a bit, but they aren't going to do much other than save you a bit of time learning the orthodoxy of your subject. The lectures are a table of contents. At most, it's really just a guy telling you that you should know what an eigenvalue is, or you should have read about the ISLM model, and so on. For you to actually understand something, well, you have to have spent a lot of time in the books rearranging your mind.

Given that this is what you actually do at university, why have it this way?

Make an examination authority. "Here is the national linear algebra test. Anyone who wants to try it, sign up, and come to this hall on this date." Everyone who passes, whether they studied at home or went to fancy U, gets a paper that says they passed it. Do it as a 12 year old prodigy or a 75 year old grandma, you get a diploma.

Now, maybe there is already an authority that does this, I don't know. But it isn't very well known or authoritative.

The current incumbents are gatekeepers. Everybody thinks that smart kids go to the most prestigious universities, and that includes employers. It's a Schelling point that doesn't need to be there, and it allows the universities to extract a great deal of value from the kids.

If you made this authority of examinations, many people could learn the material and show their competence without incurring huge costs.

People could start working earlier. You could separate the coming-of-age experience from academic learning. Poor people could participate more.

I’ve said it before on HN and I’ll say it again: I don’t support any reform with respect to student loans that doesn’t see the academic institutions participate in the pain. I’d like to see a large number of universities get bankrupted by assuming some portion of the student loan liabilities of their alums, then allow the alums to file bankruptcy if they can’t pay off any remaining balances.

Did you know that federal student loans cannot be discharged via bankruptcy AND if you carry federal student loans into retirement, your social security income can be garnished?

Seems like a good overview, but I do find this bit unclear: "But why don’t market forces correct these issues?

The answer lies in the unique shield that non-dischargeable student loans provide to educational institutions and lenders.

In a normal market, if a product consistently fails to deliver value, consumers stop buying it. Producers either improve or go out of business. But in the world of higher education, this feedback loop is broken.

Colleges and universities, shielded by the guarantee of student loan money, have no real incentive to improve their product or direct students to majors that have an ability to pay back their loans.

They can raise tuition year after year, even as the value of their degrees stagnates or declines. "

Sure, colleges can charge a lot due to loans, but they are still competing with each other and differences in tuition could make a big difference. I went to Georgia Tech over other universities because it was in-state and Georgia has generous scholarships for students with good grades. So why does competition among schools not lower costs?

I think it's really sad that we so reflexively consider universities vocational training that criticism of universities so often includes "offering degrees that won't get you a job"

Actually academia predates the push to gate jobs behind undergraduate degrees, and trying to repurpose these institutions that mainly exist to train and employ researchers to be fully general vocational schools has been a disaster in every respect for everyone but the parasitic class of administrators it's spawned

I agree with the article's diagnosis: the system is out of control, with no market forces are in place to keep costs in check. It's unsustainable for students to take on this level of debt.

I'm not sure I agree with the solutions though. Making student loan debt dischargeable doesn't make a lot of economic sense. We're talking about 17-year-olds with no income and no collateral. Why would any lender want to be in this business? Who will lend to students if the debt is dischargeable?

The article's solution is to essentially make the school the co-guarantor of the loan, such that the school absorbs part of the financial impact of student default. Ok, but now the school has a direct financial stake in the student's overall finances. Do you really want to have that kind of relationship with your school? Do you want an admissions process that is partially trying to decide if you're financially responsible? Do you want your school pressuring you to choose a more lucrative major? Do you want communications from your school reminding you that it's important to be making good financial decisions? If your school is co-guarantor of your loan, it's their business to make sure you're going to repay on time.

There has to be an element of responsibility that falls to the borrowers themselves. It's true that a 17-year-old does not have the experience to know for themselves how much debt is reasonable, especially when they cannot necessarily predict their future earnings. But there has to be some incentive to borrow less. I don't think it's healthy if student can borrow with abandon, safe in knowing that they can just discharge the debt in a few years if it doesn't work out.

Ideally students would be voting with their feet, and would make it clear to colleges that the cost of tuition is a significant factor in their decision. But I guess prestige and tradition are so powerful that people will want to go to name-brand colleges no matter the cost.

I wonder why there's no mention of a free education as an alternative solution to the broken system

Meanwhile, I know of German and Dutch peers of mine who upon completing their masters in Europe, enrolled in California to do a second Masters ( at the time I believe they paid in the range of $100k) for the VISA and internship opportunities. And IIRC, the bet paid off because they all found employment in California, with salaries 3x to 4x what they could get here.

I've been saying this to anyone who would listen for years. All the problems with higher education in the US are the direct result of student loans being unable to be discharged in bankruptcy. Usually complex problems have complex causes, usually if someone says "simple, just do this" it means they probably don't understand the problem. Not this one. This is one of those rare problems with a singular cause and a "simple" solution: allow student debt to be discharged in bankruptcy. I put quotes on simple because, while the solution is simple, it's easier said than done as the author points out, the regulation of the industry is captured and making it actually happen is very difficult due to incumbent institutions benefitting from the status quo. But we have to set the bone, it's going to hurt but there's no way around it. We are very fortunate that the solution is so simple.

- the government should not be guaranteeing these loans - they should be dischargeable in bankruptcy That’s it.

It depends on the type of university tbh.

Getting a BA in Underwater Basketweaving from your local commuter state university is much less financially damaging than at Duke or UChicago.

I'm not a fan of the idea of "useful" and "useless" degrees (ime, the best predictor for success is critical thinking skills, not major), but I do find private universities don't make as much financial sense, especially given that well paying industries like Engineering, Accounting, etc don't place much weight on your initial Alma mater beyond your first job.

Anecdotally, I had an alumni interview with a successful tech IB/PE/HF alum from CS@CMU years ago while I was applying to colleges, and he was very insistent about how he felt the RoI at SJSU or CalPoly is superior to CS@CMU. I didn't end up attended CMU (I was lured to a more "prestigious" LAC) but he was absolutely right.

I agree, and another way out is educating people who are about to enter university properly so they make an informed decision about the major they wanna choose more than their feelings and more on facts to see the outcome.

It is genuinely insane that US Colleges are basically holdings companies at this point. They priority is investments. It seems hostile to the goal of students

Human capital contracts are another partial solution that flips the incentives: instead of using loans to pay tuition up front, institutions are paid a % of your income for a fixed period of time, after which any remaining amount is forgiven. Typically this only applies to income over a base amount (such as 10% of income above a 40,000 base). Naturally this works great in fields with strong employment outcomes and terribly everywhere else.

> In 2003, total student loan debt was around $250 billion. Today? It’s over $1.7 trillion.

> That’s not growth; that’s an explosion.

That's about 9.5% CAGR. About the same as the return of S&P 500 over the long term.

https://www.investopedia.com/ask/answers/042415/what-average...

> So, what’s the solution? It’s simple, but not easy:

"Make student loans dischargeable in bankruptcy again.

Tie lending terms to the value of the degree.

Impose risk-sharing requirements on educational institutions – Schools would face financial penalties or need to contribute to a risk-sharing pool if their graduates default at high rates."

=================

Sounds reasonable. Making people who were either faithful repayers or non-borrowers in the first place, pay for the bad or unlucky choices of a few is obvious bad and unfair policy.

There are always situations where people who make mistakes have them forgiven but pay a price. I think the public would accept something like that, but not a program where the debts are forgiven outright.

Schools need to take a haircut and repay some of the bad debt themselves, just like a bond default does not result in the bondholders receiving 100% of what's owed them.

This is an important topic, but I wouldn't recommend reading this post to learn about it. There are numerous flaws and jumps in the logic.

However, without getting into all that (time is too valuable to comment on the 50,000th iteration of the same points) I will just point out that the solution is much simpler than the author's. Make the maximum repayment of student loans a percentage of income over a period of time. For example, you have to repay a maximum of 7% of your income per year for 15 years. No need to get into complicated issues of bankruptcy law. If you want universities to align their incentives more than they already are, make them cover some or all of the unpaid loan balances after the repayment period ends.

There's a certain point in time for any industry where it has a chance to capture both the user and the legislator. Once that happens, prices for consumers start to grow faster than wages because the industry has more money for lobbying, it's a positive feedback loop.

https://www.abi.org/newsroom/chart-of-the-day/price-changes-...

Political solution to this is very unlikely unless there's a major stress in the system that, at least temporarily, takes out the one piece of the price growth puzzle.

Many years ago I went to university in the uk. Entry required good grades but tuition was free and there was a reasonable grant to live on.

Twenty or so years ago the grant became a loan and, more recently, tuition fees were introduced.

Nowadays way more people go to uni but come out saddled with debt.

Presumably the incentives are the same as described in the article for the US: the uni wants as many students as possible because they get tuition fees and short term the administrators don’t care about graduation rate or job outcomes because it will be on some future administrators watch when the feedback loop stops new undergrads joining?

It's somewhat besides the point of the piece and might be unfair, but I can't help to feel an immediate sense of distrust for any piece of writing that uses AI images.

Anyways, tying lending terms to the value of the degree sounds like a horrible idea, because how do you even determine that?

Seems to me the big issue is A) that the loans are managed b private companies with ridiculous terms and that even public state universities can basically behave like private companies by increasing prices this much.

Why can't the government not just radioactive prices for their own universities

A big thing that he didn't mention: Income-based repayment programs (particularly the new SAVE plan) and Public Service Loan Forgiveness (PSLF), while certainly well-intended, make the cost of college essentially irrelevant for people who can reasonably expect to benefit from those programs. And so the colleges up the bill. His 3 proposed solutions don't really deal with this. Obviously people on IDR or PSLF don't need to declare bankruptcy just because of the loans. And if the colleges had to carry the risk, the risk would be far less than imagined if these programs still exist in the same way as today: the federal government guarantees it will write off the loan of anyone who works in non-profits (which are about 10% of all jobs) for 10 years, or anyone who makes a small minimum payment for 20-25 years with SAVE.

The SAVE income-driven repayment plan is a big deal that will make the cost of college far worse. What you have to pay is 5% of income above 225% of the poverty line. A family of 3 making $80k pays $104 a month - it doesn't matter if they had $10,000, $100,000 or $1,000,000 in loans. If you are not planning to be in a very high-earning field, why wouldn't you borrow the maximum? Why wouldn't the colleges charge the maximum? This amounts to a giant subsidy.

I agree entirely, made my college decision based on these factors at 18. However, these analyses miss the mark by stressing the map, instead of the territory.

Ex. The graph about graduates being underemployed goes back to 1990, and there's no meaningful difference in the difference in the rate between then, and now.

Ex. 41% graduating after 4 years doesn't mean it is necessary colleges need to Find A Better Way: that would affect ex. the complain around graduates being not prepared with no discernible skills

IMO, the US govt should stop all student loans and make the universities fund the loans. Then the universities would have an incentive to make sure students graduate with degrees & skills that will allow them to pay back the loan.

THey'd also have an incentive to make their own operation run efficiently, ie, fewer high-paid administrators who do nothing and higher pay (and tenure) for professors who do all the work.

> The solutions are surprisingly straightforward – make loans dischargeable, tie lending to degree value, hold institutions accountable

This really over complicates it in my opinion.

Student loans should be treated like any other debt. Yes, it should be able to be discharged as part of bankruptcy. From there we just need the government getting out of the way, save for a (hopefully) rare case of predatory lending or collusion.

Lenders will decide what value a degree is worth because lenders themselves should own the loans rather than governments. Banks and financial institutions have very skilled actuaries who would make pretty easy work of calculating the acceptable cost for a given degree from a given school, factoring in the lender's acceptable level of defaults.

Institutions can be very directly accountable when students can't get loans to go there. If a school charges too much, or the education they provide doesn't lead to careers that can pay back the loans, the schools lose.

While the US system is particularly messed up, it's not that great in Europe either.

In my country universities get paid by the government based on number of graduates. Things like quality of education and employability matter very little. So, the end result is a system where many young people spend 5 years of their life on a masters degree that doesn't give them any monetary benefit. The university gets their money, the government gets fancy stats about level of education, but many students end up just misled and wasting their time.

Obviously this is better than graduating with massive debt, but it's still a major financial loss compared to working full time, or studying something employable. In my opinion, what we need is a change in mentality. People shouldn't tell their kids that it's okay to study just whatever you enjoy, at least not until you have some other means of earning a living you're happy with.

I think Americans need to start very seriously considering working in another country after college. Student loans can't be discharged in bankruptcy, but it is extremely unlikely they will be legally enforced overseas.

For that matter, some serious thought should be given to going to college overseas. I don't care that "American universities are always more prestigious," there are some countries that are handing out full ride scholarships to internationals and some where the full sticker cost is as little or less than a US in-state public school. Most high school counselors know nothing about this and most students don't even consider it.

Ironically, many American study abroad programs probably cost more than just enrolling in the foreign institution directly for a semester (whereas the same is never true in reverse).

As an European this sounds lunatic. I pay +-600€ a year for my masters (bachelor coasts the same) and this 600€ also include a train ticket for all local trains in Germany.

Idk why there are so few US people coming here. Honestly our universities have their weaknesses as well but I think they can definitely compete with the average US university.

You have to account for something like 1k living cost per month if you are a bit lucky and don’t eat in restaurants every day. By working part time u can easily live of your salary.

I think the us is famous for its student loan system and it’s a way of separating poor people from people with better situated parents. We do this in Europe too but here we do it a bit more “hidden” and mostly in Highschool.

It's bizarre to me how accepting we are of the idea that higher education should cost anything let alone be mind-bogglingly expensive. This is wildly successful propaganda. Student loan debt was an explicit political goal [1]:

> "We are in danger of producing an educated proletariat," announced Reagan advisor Roger A. Freeman during a press conference on Oct. 29, 1970. Freeman, an economics professor at Stanford, was also an advisor to President Richard Nixon.

> "We have to be selective on who we allow to go through [higher education]," Freeman added.

Poverty is intentional and a necessary condition for capitalism. It creates a malleable and compliant labor force. Student debt, medical debt, housing debt. All of it only exists to make a handful of extremely wealthy people slightly more wealthy.

Modern universities aren't really about education at all. They're simply hedge funds in a trenchcoat.

Harvard, for example, makes what? Half a billion in tuition per year? But they have upwards of $50 billion in their endowment. The interest alone could fund the entire university.

[1]: https://www.bestcolleges.com/news/analysis/threat-of-educate...

I believe a decade from now we'll see the "unbundling" of the three types of value universities provide: /1/ employability signal, /2/ knowledge, /3/ social. I don't know what will replace /1/ and /3/, but I look forward the future where /2/ can be made more widely accessible (without the debt).

Imagine a future where everyone knows 101-level concepts in chemistry, biology, physics, etc. and able to function in society informed by all this knowledge, rather than defer to "experts."

Perhaps one compromise is to discharge any interest and prevent interest accrual on bankruptcy-claimed loans.

Removing any risk to debtors is what set-up this perverse incentive; and breaks the market.

I’d still prefer what the author proposed, but the status quo is broken.

Background: I graduated in the 1990s with virtually no debt attending a third tier public school as I had to pay my own way.

But only because I didn’t want to declare bankruptcy and don’t like being in debt; yet it was never clear that bankruptcy wasn’t a real option.

What kids have to go through today is outrageous.

I was lucky enough to get a grant, 100% of cost, with two caveats, you have to finish, and once you finish you HAVE to work in the country for 2 years. Overall an amazing compromise for government.

I'm not convinced American universities are unusually expensive. Its an costly business. Does anyone have good figures for what the cost/student is globally?

I can see: https://nces.ed.gov/programs/coe/indicator/cmd/education-exp... looks like the US is 20-30% more expensive than other developed countries but that isn't a huge difference.

What is missing from the debate....

The rise of Education Grants on Fed level and the decrease of state funds per student...classic economic game-ship gone wrong...

What might have worked better is higher Fed grants per student handed over to states as match grant where it matches state funds in the same student.

Anything else delves into false narratives around false facts....

And we do in fact have an example of said cure working...elementary education where no student has a debt...everyone forgets the 1-12th grade school system that works with no debt transferred to students....

Don't worry, if AI starts hitting the labor market like a wrecking ball, almost nobody's gonna be signing up for 4 years of busywork anymore. The only people joining will be the few people who actually WANT to learn subjects or join academia, and they'll get rock-bottom tuition prices.

What happens to all the existing student debt? Debt is just a number on a computer, I'm sure they'll figure something out...

Why has nobody mentioned for-profit entities allowed to run roughshod over our country's students?

textbook publishers, for one, are guilty of this. professors get kickbacks to assign a new edition of a textbook each year or few years, so archived or older versions don't work. don't get me started on those books that come with a 1-time code that you have to use to do online work. its a racket.

All other unsecured debt disappears after what seven years but this university debt is somehow guaranteed?? That’s why this happened.

Regulation should allow students to forgo their tuition payments if they can’t land a good job in their field of study.

That’d help align incentives.

Schools would compete on placement rates and quality. They’d need robust post-graduation placement services and would need strong partnerships with industry players to stay in alignment with required skills.

How hard is it to just go to the public university in most states? Where I live, you can get your tuition completely covered if you keep a B average. Young people can get whatever degree they want without having to worry about debt as long as they have decent academic ability.

Why merely target universities?

Think of high school, while most people do not pay fees directly while in high school your taxes pay for it. Most people for most occupations only require perhaps 5 years of staggered high school education. One can have an (extended) apprentice or higher degrees for others.

I like the system that some coding bootcamps employ where they take a percentage of the first years of working wages. This would be a way to discern the value of your degree quite accurately. It would align the universities' and students' interests.

Besides this, I also agree to the 200+ upvotes, system is broken y'all!

When will the Stanford and Ivy leaguers making $400K at FANGMAs lead by example and burn their diplomas?

Excellent article, I think it goes too easy on the actual corrupt people who are the real culprits: the huge bloated administrations collecting big paychecks at the expense of poor kids who don't know any better.

Agreed with the overall consensus that we should let this market be guided by true market forces, but I also think people often assume the wrong outcome of this.

Universities give students a ton of control over their education. Where do you live, what classes do you take, when can you unenroll, etc.

Want higher graduation rates without lowering the grading bar? Simple, do not permit part time enrollment, even for one term. Sounds harsh.

Want better job prospects on graduation? Simple, kill off 90% of majors (dance, sociology, etc.)

The reality is that people generally think of college was a guarantee of success (it isn't). Many people would do better going to trade schools.

Attending an elite university will always be expensive (in HCOL cities, high demand for students and professors, etc.)

We need to stop treating college like a basic right, or a place for people to chase their dreams. Dream chasing is great, but if someone else has to pay for it, incentives will never align.

<search page for “Reagan”>: 0 matches.

They didn’t go far enough back or broad enough.

“We” decided that cheap college was too socialist and his people cooked up a scheme to make it more expensive and push the underclass and PoC into the GI bill. “You people” only get an education once you survive the military. But it made things worse for the middle class as well, as almost every5ing from Reaganomics has, and things have only snowballed from there.

This is by far the most honest and accurate assessment of the current situation I have seen. And the solutions are spot on, and sadly his assessments for how likely they are to happen.

I’m not sure that the impact on the debtors is even the worse part. The removal of any apparent consequence for the cost of education also seemed to remove an incentive for the university to provide a quality product.

how do you get the system to change itself when it benefits so greatly from the status quo. massive protests? vote them out? those would require organisation and cooperation from people that can easily be turned against each other. no, the system stays as it is or gets worse. sorry to be a downer has there ever been a situation where massive self interest like this have been overcome?

If everywhere you see "free university" you could replace it with "taxpayer funded university" that would be great.

The author forgets to mention yet another dimension of the problem - a direct political one.

Loan forgiveness ... in essence, a form of vote-buying ... vote for me, and we'll forgive your loan (aka someone else will pay the loan).

If there is a chance that, at some point, we forgive loans - why would the cost of education ever decrease?

The premise that 17 year olds cannot make this kind of decision seems widely accepted here. Yet, I remember clearly understanding that since I was paying for college with debt, I must study engineering.

Perhaps college has expanded to select too many people? I wonder if this could be solve by simply restricting college admissions to 20% of graduating seniors.

As with other industries, there is a steady increase in demand but not enough supply. Make it easier for accredited universities to be setup and let the free market forces drive the cost of an undergraduate degree down.

I think we are going to have an era of entrepreneurial maximalism coming soon. For a lot of young people, the employment deal is rather broken. Also, AI will benefit smaller companies far more than larger ones.

The problem starts at the point where people think the purpose of universities is to qualify people for jobs. I wonder what happens to the Humboldtian ideal.

I think this is about intellectual power more then money. Academics, who benefit from this system, have an outsized influence on political discourse.

This was one of the worst articles on the topic I’ve ever read. Full of faulty assumptions, ill-defined terms, and just flat out misleading statistics. Numerators without denominator. The list goes on.

The problem here is the time value of money. If the world is based on a production function of compound interest then in a world of finite resources what becomes cheaper over time are cell phones and what becomes more expensive are people's time, because the per unit cost of clean water and housing goes up and technology makes virtualizable goods cheaper.

This also has the added benefit of screwing with the Gini coefficient as returns to capital are always compounded where worker productivity at best goes up linearly.

So people mortgage their future in a bad Nash equilibrium in a competition to increase their productivity at a slightly faster linear rate than other workers, by taking money from financiers. The same financiers that see an exponential return and are incentivized to shrink labor costs to keep maximizing compound returns. So students are stuck in a system in which they're borrowing from their ideological competition.

It's not that universities are inherently evil or administrators are bad. It's a natural extension of how returns to investment work.

Now I'm not a Marxist, but that's the way the math works. The only solution I can see is a social system in which the wealthy form investment vehicles that run as cooperatives owned by the workers and flatten the Gini coefficient as much as possible. If students bought shares in a university that they then owned for life similar to bonds, then the university system itself would self correct.

Say you go to graduate school or had tenure - then you would have a higher share of bonds. You would no longer be paid in a linear way, but a compound one. If the returns didn't align with expected earnings the university would fail. Linear payments are essentially just an admittance of failure to believe that inflation won't destroy someone's earning potential unless they're able to become a shareholder faster than someone else. Which causes intergenerational disequilibria as we've seen where the old are incredibly wealthy and the young are too poor to start families.

Unless economics is willing to confront the social problem of compound interest in a finite world accelerationist capitalism will end up destroying society.

No, the solution is not to burn down academia. Ask the Cambodians how killing everyone with glasses worked out for them.

Great article.

This is why am not too excited about elections. Both side promise a lot but execution is lax. While credit is due to Biden admin for infrastructure and Chips bill, his handling on forgiving student loan was a mess.

It was a one time shoddy fix. May as well make all loans the Same - based on risk, be discardable and the punishment is credit score ding if it’s not paid.

Non-dischargeable loans are a drain on the economy.

I mean you are given a blank check to change your future for ever and the debt will be paid by your future, better self.

Who would not take this lucrative deal, regardless of the number on that check?

The profit motive at work.

Aligators eat their own babies.

(I'll let myself out)

Edit: the fix could be to fill it under national security hazard(?)

The education-politician complex as we know it will face a dramatic reckoning in the next few years. Many mid-tier universities are likely to go under.

Perhaps, as a society, we will rethink how education is attained. In a world shaped by AI, maybe kids will take MOOCs just for fun.

One thing that really annoys me about universities is being forced to take random classes under the dubious banner of being well rounded. The incentives for the university are to make us spend more time and money on them. So of course, they want us to waste time in arbitrary forced requirements. My observation is that people are not actually well-rounded just because they went to a university. And I don’t think they’re even studying the fields that we need as a society. There are too many random fields that just seem like activism rather than something rigorous. Taxpayers should not be subsidizing those, and the government needs to be much smarter about managing the bad incentives for administration.

Even saying this a decade ago would have been labeled misinformation.

Simple facts of life about education and (OP) student loans:

(1) Liberal Arts and Sciences. If you have the money/smarts, can go for a Bachelor's degree at an Ivy League university, maybe also join a fraternity, and, thus, get some more understanding of history, civilization, and people and meet some people likely good to know for a good career/marriage.

The Ivy professors are expected to publish a lot of research and, hopefully, get that research funded. The university may take 60% of the research funding for overhead.

I'm shocked, shocked to find US National politics going on here. Here is your 60%, Sir.

The universities like getting the 60%, e.g., for the white table cloth restaurant or the the President's limo. US politicians like funding education.

Due to WWII with radar, sonar, the Bomb, the US government liked to fund research in the STEM fields and, soon, medicine, agriculture, etc. Due to the research, the profs stay bright, with brains active, but otherwise their research has not much to do with what is in the Bachelor's degree courses.

(2) State Colleges. Could get a Bachelor's degree and also a Teaching Certificate which would enable a career in K-12 teaching that could be good for wives and mothers. Low tuition.

(3) State Universities. Could continue and get a Ph.D. Could use that (A) as a union card for a career in college teaching that did not require research, (B) a career in research, maybe as an Assistant Professor trying to publish enough and build reputation enough to get promoted to tenure, (C) whatever else could use the work for. Can regard (C) as speculative with best results quite good for career, wealth, US national security.

One academic direction: Get a good background in math (probability, statistics), physics, and chemistry, and then do research in some other field, e.g., what is happening on the floor of the Gulf of Maine.

(4) Broadly, children need to grow up, and that can involve lots of inputs and experiences. Then they can go fourth into the great US society, lands, and economy and try to be successful. Some Bachelor's degrees might help.

Bachelor's, ..., Ph.D. as job training -- has not been very popular, respected, or successful in the US.

Broadly one effect for young people in the US economy is the economy might continue to grow and develop with new directions; so, ..., a young person can try to select a direction that is or promises growth, get a first job, and go ahead and grow.

E.g., my education concentrated on math and physics. Early career was in US national security which liked math and physics. Soon there was also a lot of interest in computing, so got into that -- right, quick sort, heap sort, AVL trees, numerical issues in matrix inversion and curve fitting, .... At one point, the US Navy was HIGHLY concerned about the US labor force in computing, especially for work in math and physics, and I got well paid to sit, learn about computing, and do some on some Navy sonar data, the FFT (fast Fourier transform), power spectral estimation, etc. As US computing grew rapidly, so did my career. Now, doing a startup in computing using some original math -- that is, combining what I'd gotten like the novel ingredients for a popular new pizza.

So, if job training, trade school, education with good "ROI" for good careers does not work well DIRECTLY, maybe (A) pick some of the best of what is in the libraries and (B) make what can with it -- yup, it's risky, speculative, etc.

My recommendations:

(A) If you can afford (1), fine. Otherwise, don't spend a lot of money on that Bachelor's ... Ph.D. education. I.e., for the OP here, don't take out student loans, and if go to state schools might not need the loans (might not apply to careers in law or medicine). By the way, for grad school, Master's and Ph.D., I never paid anything and did get paid for doing ugrad math teaching.

(B) For a Ph.D., at some schools, courses are optional, the main point is the dissertation, the definition is "an original contribution to knowledge worth of publication", the main criteria for publication is "new, correct, and significant", a cheap way to get the background for such research is independent study, and might do enough of that on evenings and weekends before going for a Ph.D. E.g., not a lot of need for "student loans".

(C) Get some basics, e.g., in the STEM fields, and then look for opportunities in the US economy.

(D) Meet people, especially the right people: It can be better who you know than what you know.

(E) If you are doing really good work as an employee, then maybe see if can do much the same work but for much more money as an owner.

but it makes a nice opportunity for Democrats to buy votes later with selective debt forgiveness

debt forgiveness was a hot topic exactly one month before the midterms and it is already becoming a hot topic as we head in to the general election

if these students were not in debt, there would be no debt to forgive and no votes to buy

John Oliver discusses how so many people have come to take on student loan debt, why it’s so hard to pay off, and what we can do about it [1].

[1] https://youtu.be/zN2_0WC7UfU

I think that a student debt could be replaced by dischargeable debt if you churned $100,000 of credit card cash advances in the same month, paid down your student debts, and then after the one year zero interest period expires, declare bankruptcy on your credit card debts that replaced your student loan debts. Can anyone confirm?

> Make student loans dischargeable in bankruptcy again.

I would like to see the author back this up with more considerations.

Bankruptcy disappears from all credit reports after seven years. The average age of first time home buyers is 35.

So if a new grad’s credit is trashed from the age of 23-30, it makes no difference to them - they are not planning on using credit for anything substantial anyways.

What is going to stop every single student from declaring bankruptcy immediately after graduation?