Ok, fair point. Most of the students I know have a data plan though and it comes to $100 a month or so. Add in the phone, some music, and so forth and you get a couple grand. But the phone lasts more than a year so it's an exaggeration on my part. Still it's a major expense that didn't exist a few years ago.

But many of them also pay top dollar to upgrade early every time a new version is released (at least once a year), or that has at least been my observation.

Yes - the high interest rates are what is so puzzling - and frustrating - to me. Rates gor three times higher right before I went to law school. Check out this chart and look what happened to loan rates right around 2006: http://www.myfedloan.org/billing-payment/about-interest/interest-rate-charts.shtml

My attorney friends who mostly graduated in 2006-2007 have extremely low interest rates - but my classmates are all in the same boat as me - about 7% to 7.5% depending on the mix of Stafford and PLUS loans. I have scoured the web, the regs, and bombared Fed Loan with questions - and there is no way to lower these rates (short of .25% with direct debit of course).

I was one of those who was not smart with my law school loans, but even so tuition alone was $150k. I'm reading frightening articles where the law school class of 2015 is expected to graduate with an average debt load over $200k - and the market for lawyers is not what it used to be. I'm lucky to have a job, but it's a scary world out there.

Part of this is the problem that college and universities charge with whatever they can get away with, so that costs have increased greater than inflation. Some of that has to do with simple costs, but also rolled into those increased costs are additional amenities not really necessary for an education but done to attract applicants. I'm not sure if the colleges started it first to increase attractiveness, or from demand from prospective students, but whatever the start it has become a feedback loop increasing costs without increasing value (but hey, every freshman gets an IPAD!)
Second, part of the problem has been people have been borrowing money for college, but not really using it for college but rather to increase their standard of living while getting an education. It has been drummed into people that it is OK to take debt on for college (as it is an investment to the future) but some people ran with that idea. I just see this an emblemic of the American culture in general, of taking on debt unnecessarily. I myself when I was in college and grad school was shocked at the casualness of fellow students taking on debt from everything from daily habits (should poor grad students really be going to Starbucks every day???) to buying cars or living in swank apartment complexes (they NEED an apartment with a pool/private parking spot, etc).
Not all students are like this. My nephew went to a community college for 2 years, then tranferred to the college of his choice. He will have debt but not like some I've seen. And he takes it seriously. If anything, I fear he may bite off more than he can chew (both in the types of classes he is taking, and extracurriculars related to his degree) but at least he is not squandering his time.

Your nephew is at least on the right path. No reason to spend all those extra $$ on courses you could take a community college. So many students seem to waste time with classes they will not use or $$ for things that really aren't necessary (a new car/iPad/big scrren TV/etc).

I second (or third?) the idea of going to cc first. For me not only was the cc cheaper, but they also had more online options for class - very important since I was working full time. I'd also considered getting my associates first then probing the job market, but I would've had to take classes that wouldn't apply to the 4 year degree and my research showed that I wouldn't have qualified for the jobs I wanted anyway.

I did graduate with $26k in student loan debt, but in the 8 months since I graduated my salary has increased by $40k+/year so I consider it money well borrowed!

I do think schools have a certain amount of responsibility for student loan debt. When I was looking to go back to school I visited an ITT Tech campus and felt like I was on a used car lot. They did disclose the full cost of school but immediately said that I could get loans to cover the full lot, even with spotty credit. They also swore that I could get a high paying job through their placement services and took me on a little tour so I could see all the expensive equipment my tuition would be paying for. As for loan repayment, it wouldn't be a problem with the job the school would get me. The really slimy part was the implied guarantee that I would be rolling in dough both before and after graduation, all because of their program. They also employed some very high pressure sales tactics - like I said it felt like I was talking to a used car salesman.

Needless to say I chose the economical route for school and am very happy that I did.

edit: When I was getting federal loans I had to go through a loan counseling program online that went through repayment details, how much it'd cost each month, encouraged me to consider what my future pay would be, etc. Do private loans do something similar?

My issue is everytime I hear retoric about student loans it is as if college is the end all be all of employment...its a great investment into the future...it increases your earning potential by X amount...

Readily available money and a lackluster job market make people want to consume more education to make themselves more "employable".

The very fact that there are lawyers going to school to incur a 200K debt load to graduate into a lack-luster job future shows the real problem... Add to that the very notion that there are going to be 1000s of lawyers with training and nothing to do but try and find work... seems like lawsuit world to me?

I have thought for years that the problem is...people dont pick the right majors. The government should only offer student loans to get degrees in things that society needs. If we have a glut of lawyers why offer a subsidy to train more. If we need engineers we should encourage people into these fields. Choosing a field of study should be based on future employment period.

The drag on the economy is not the governments fault....its ours (unless you view that as the same). When I was a student, I know that future jobs was a PRIMARY concern for me. I did not love college... I did not "want" to be an accountant but that was an employable activity.

This is exactly the kind of problem a free market is designed to solve. The existing system may have a lag (four, or more, years between when a student evaluates the market for demand for a certain skillset and when that student graduates and starts supplying it) and inefficiencies (students may misunderstand what skillsets are needed). However the government would only exacerbate that problem - and that's in the best case. Worst case it would end up being a(nother) subsidy to various special interest groups.

Stannis, I agree that it would become a haven of special interest BUT I couldn't disagree more with your statement that the current system is free market.

Money is being offered with no real cost to those borrowing, and no real collaterial. It is offered by the government AKA tax payers so that everyone can get a college education.

If the freemarket where to work efficiently occupations like Doctors or Nurses (high demand, low unemployment, high earning) would have very low interest rates and art appreciation majors (low demand, low earning, high unemployment) would have high rates on student loans.

The current system increases costs on the education because it creates unreal demand, everyone has the ability to get money to go to school for whatever they want. The university see this demand and expand their supply at whatever cost because the students have elastic demand they dont care the price they pay (basically). The price goes up because there is infinite supply of cash so we operate very inefficiently and there is a net cost to society.

If you are proposing a 100% free market no student loan system I am all for it!

However, if you accept my premise that we are in some format social engineering already in the broadest strokes then perhaps you can see my point that a reduction of this engineering would be beneficial.

While I generally agree with the points you are making, and what Stannius said too, there are a few problems with what you are saying.

First off, a free market requires information to function properly. It is not enough for supply and demand to exist. Consumers must have accurate information to ration demand and enforce price discipline. When you say tuition should be higher for in-demand professions, I agree. But students need information to know the true prospects for their degrees. Currently they only have the marketing messages of schools. (Have you ever noticed that art schools advertise like heck about the great job prospects while engineering and medical schools rarely do? It's almost a safe bet that the more promotion you see about a college or a major, the more likely you are to being deluded and ripped off.)

Second, universities (at least public ones) are not as complicit in this as you suggest. In most cases public universities are obligated to accept anyone who meets certain basic criteria. I work for a public university. We must accept all students from our state who graduate above x% in their high school class. With homeschooling and charter schools that means pretty much anyone can come. But facilities, instructors, and so forth are a scarce resource. The only way to allocate those resources is to raise prices.

Something else that is happening, clearly with public universities but increasingly with private ones as well, is that subsidies are being reduced. Twenty years ago, it was typical that states paid 75% of the cost of educating an in state student and the student paid 25%. For many reasons, some philosophical and some economic, the subsidy has been going down over the last 20 years so that students now pay a much larger share. In private universities a similar thing is happening where endowments used to pay a larger share.

I think you are right that the real issue is a mismatch in supply and demand for the knowledge and opportunity that a college education provides. But matching supply and demand is not an immediate process. It takes time. And the student loan pain and unemployability we are seeing now is an unfortunate symptom of the mismatch that will persist until the system adjusts itself and appropriate information channels open up to make the necessary communication possible.

I always value spirited debate so no worries from me.

One point of clarification though, i didn't say tuition should match future income. I said student loan rates should. Connecting future job prospects on the ability to repay seems a very easy to understand system that would create a more efficient work force.

If for example an engineer degree was seeing student loans at 2.5% and art was seeing student loans at 10.5% you might think twice about that major to borrow money. Obviously default is higher etc.

Your point on public university is well met. In South Carolina the trend has been for our "premier" public schools to become more exclusive while our secondary schools have gained the lion share of new applicants. Meaning Clemson and USC have increased by 10-15% while USC Florence has doubled in size. I saw the same thing happen in Georgia where Georgia Southern which was always a safety school when i was in high school became a "hard to get into" school. Someone had to take you...

No having said that... I disagree whole heartedly with tax payer dollars funding it...

Yes, debate is how we all learn and grow.


Fair enough, and I agree. Here's an idea - prohibit interest on student loans. Force lenders to accept return in the form of a percentage of future income. Allow then to consider the student's major, GPA, and progress in making lending decisions. Consideration of the quality of the security offered is a factor in all other kinds of lending, why not with student loans? Why shouldn't the engineering major with a 3.8 GPA completing 18 units a semester get a better rate that the philosophy major with a 2.0 who can only get through 9-12 units a semester?



I think this is a narrow view, though I respect it. The idea behind tax payer subsidies for higher education is that an educated workforce benefits the entire "community" whether that is the city, state, or the entire country. You will find few large businesses, though usually having a conservative political view on other topics, that take your position on this one. They need educated workers to make money.

In my days as an executive I went to several "pow wows" with senior government officials in a particular state (not my own) that was trying to attract high tech business. Their schools were horrible though from elementary right through college. There were several multibillion dollar firms considering opening new operations in this state. The message to the state officials was clear - we're not spending $5 billion to build a plant until we can be assured of an adequate supply of competent local employees. And if your elementary schools don't improve, we won't be able to transfer people there - they'll quit instead.

Now, almost 10 years later, none of the proposed operations in that state have moved forward, one large existing plant has closed, and one of the large companies has completely pulled out of the state. The schools there are still abyssmal. I don't know for certain if the education situation was the cause but I know for a fact that it mattered to these companies and they most definitely expected substantial state support.

You can also find strong relationships worldwide among education spending and economic prosperity.

I'm not saying we should through tax dollars at schools. In Arizona the schools are terrible and I think they already get too much money that they waste. But I think some level of taxpayer subsidy from kindergarten through graduate school is imperative and benefits all of us, as long as it is accompanied by competent administration and management.

up until the early 2000's.. University was the new high school as the requisite to get a good job.. now Grad school has took it's place.. it's a never ending race to acquire more education to "edge out" the competition.. unfortunately that will take its toll on the American economy as well.

I am ok with GPA etc being part of a metric for student loans.

I recognize the whole concept of an educated work force should equate to better companies and better jobs. I just believe there is a better way to skin the cat. Having never skinned a cat in my life and not even knowing the first way this metaphor is a bit lost on me but there you go....

Essentially...My belief is that we have increased spending hugely over the last 20-30 years with almost no net benefit.

Granted this might be biased but "http://www.heritage.org/research/reports/2008/09/does-spending-more-on-education-improve-academic-achievement"

Essentially as I read it the gist is that increased spending has been focused on equalizing disparity between ethnic groups and not on raising the bar. It also says that this spending has not been effective in even accomplishing that goal.

I would say that this mirrors the discussion here regarding graduate school. Additional spending does not equal a better product. By equalizing it costs relative to all majors additional money and does not result in better product an educated and EMPLOYABLE workforce!

The point is that college costs are going up out of line with the benefit being offered by a degree. Our primary schools are getting more money then they ever have and yet their only solution to lagging performance is more money...

One of my current favorite thoughts was regarding getting rid of federal oversight. And moving all education to the state level. By doing this states could spend and educate however they wanted to. If your state lagged, just to your point people and companies would leave...free market would dictate change. Under the current administration innovation is fairly costly and there are 2 levels of government administration at least.

i will inlcude this one as well as it is against voucher systems etc...

http://www.alternet.org/story/155802/5_ ... ion?page=4

However, when reading I was struck by how the author can only give the reasons for why this is bad as...1. rich people get choice too, 2. poor people have less choices then rich people do, 3. religious schools might get funding with public dollars, 4. union teacher will not be needed and lose their jobs.... So the poor who currently have no options get some options... as I see it this is better. Also public schools must get better or go away...this includes the union teachers... How is this bad in the least???

Anyway, thank you for the debate I enjoy it as a momentary distraction from powerpoint hell....

[quote="judy_lin"]up until the early 2000's.. University was the new high school as the requisite to get a good job.. now Grad school has took it's place.. it's a never ending race to acquire more education to "edge out" the competition.. unfortunately that will take its toll on the American economy as well.[/quote]

I agree, but I don't think this is the fault of the employers, the schools or the government. Ambitious students themselves want to stand out from the crowd. And they keep needing to go a little bit further as the other students try to do the same thing. And then it becomes the default and expected...

obanMBAusedtomeansomething

(Full disclosure - I don't have an MBA, and I haven't seen evidence that they make anyone a stronger team contributor or leader.)