Student loan payments restart today, forcing borrowers to take on more debt and put off saving for retirement. https://t.co/phJ9EfVAAi
— NBC News (@NBCNews) October 1, 2023
Jaybird
Jaybird is Birdmojo on Xbox Live and Jaybirdmojo on Playstation's network. He's been playing consoles since the Atari 2600 and it was Zork that taught him how to touch-type. If you've got a song for Wednesday, a commercial for Saturday, a recommendation for Tuesday, an essay for Monday, or, heck, just a handful a questions, fire off an email to AskJaybird-at-gmail.com
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It is remarkably easy for the young to make poor long term choices. My expectations is a lot of these debts fall into that category.
My eldest wanted to pass up a full ride at a lesser U to spend FAR more money at a better named U. We put huge social pressure on her until she changed her mind.Report
If you read through the story and look at the whole issue of “who has these debts”, we’re (once again) in “are these the most sympathetic people they could find?” territory.
Remember this story from 2011?
I think that it is *EASY* to conclude that Joe made a major mistake in going back to school. He never should have done that.
So then we can look at the people in this story.
They even included a guy who said “I could pay these debts off but that would use up the inheritance I got from my parents”.
Seriously, are these the most sympathetic people they could find?Report
I think that it is *EASY* to conclude that Joe made a major mistake in going back to school. He never should have done that.
Going back to school wasn’t the mistake. Or at least, it was a mistake because of a bunch of sub-decisions. If he had spent three years getting certified in welding and precision machining, then moved to Midlands-Odessa and worked in the oil and gas fields at double his previous salary, would going back to school have been a mistake?
That’s not to say that grad school should be thought of as a trade school. But I’d expect someone to have given some thought to what comes after.Report
Over and over again, though, there are these hard-luck stories about this guy who got a masters degree and now has thirty or fourty large in debt.
Immediately, I think something like “that poor guy” and then I learn more. “He quit his job as a teacher to follow his passion.”
“He was already employed as a teacher?”
“Yeah.”
“What did he get his degree in?”
“Puppetry.”
And I slide away from being sympathetic to thinking that the guy should not have been ripped off the way he was, even if he was a sucker. The solution isn’t “bailing this guy out”. It’s “going after the grifter”.
To your point, I don’t know that I’ve ever heard a single story of a guy getting a masters in precision machining and then complaining about how he got ripped off.Report
like, yeah sure, the user is the one who took the drugs, but don’t we also go after the pusher?Report
Let’s look at “who has these debts”.
RE: Domonique Byers
He has an MBA and he isn’t prioritizing his credit card debt? Seriously?
RE: Parvanae Abdi
She quit her teacher’s job to take up free lance writing?
“Teacher” might have meant “adjunct” but if that was the case it should have said so.
RE: Keith Kruchten
He’s an operations manager and board member, the later might be volunteer.
Also has credit card debt, no retirement savings.
Two children and we don’t know if his wife has a job.
RE: Rachel Gripp
No useful information. No idea what her degree is, her job is, or pretty much anything other than she has 4 kids.
RE: Patrick Donohue
Not his debt, it’s his kid’s debt. $50k.
Missing a lot of information, like what happened to the kid(s).
RE: Rhiannon Dodds Funke
$1m in student debt on law degrees, extremely low income.
For all of these we’re missing a lot of information. If you squint we see hints of bad choices but really we just don’t have enough information to make judgements on how reasonable debt forgiveness is.
“Reasonable” would mean “would a bankruptcy judge go with it”.
I mean seriously, if we don’t want to put colleges on the hook for bad investments on students, we already have people who professionally discharge unreasonable debts. They’re called “bankruptcy judges”. I don’t see why a blanket forgiveness is supposed to be the only solution.Report
Yeah, Donohue is the one who said this:
There are a lot of things that deplete my savings as well as any leftover money I have inherited.
So I sympathize.Report
“We put huge social pressure on her until she changed her mind” I hope that’s a euphemism for “we told our daughter she could go to “a better named U” if she wanted to but we were not footing the bill since she got a full ride at “lesser U”.Report
Educated Americans live longer, as others die younger
https://www.economist.com/graphic-detail/2021/03/17/educated-americans-live-longer-as-others-die-younger
A 25-YEAR-OLD American with a university degree can expect to live a decade longer than a contemporary who dropped out of high school. Although researchers have long known that the rich live longer than the poor, this education gap is less well documented—and is especially marked in rich countries. And whereas the average American’s expected span has been flat in recent years—and, strikingly, even fell between 2015 and 2017—that of the one-third with a bachelor’s degree has continued to lengthen.Report
My strong expectation is “more educated” is a stand in for other factors. “Makes good choices”, “healthy/smart enough to do this”, “money”, something.Report
Yeah, they’re mixing up inputs and outputs.
Lotta that happening with the whole “education” debate.Report
“My strong expectation” is a polite way of saying “My personal biases and priors”.Report
More like, “experience with the use and misuse of statistics”.
Unless you want to put a causal factor on the table. Is there some vaccine only given out at college? Some special smoking cessation program in college?
College selects strongly for people who are healthy enough to go to college, rich enough to go to college, smart enough to go to college, and so on. That sorting seems pretty huge on the face of it and will map well with other things.
For example: In 2018, 7.1% of adults with an undergraduate college degree were current smokers. This is compared to 21.8% of adults with less than a high school education. A 3x smoking rate would have some effects.Report
Its like we discussed before, the phenomenon where in every society throughout history, poor people have lived lives that are messy and filled with self destructive behavior.
They have always drunk more, smoked more, eaten more poorly and behaved with more violence than the rich.
But this doesn’t explain the facts.
What varies is the degree and severity of the behavioral difference on life expectancy.
Your explanation- Poor Choices- only prompts more questions, like why suddenly white people in the Midwest suddenly started making bad choices in the past decade. What caused this sudden change in behavior?
Why did they choose to become addicted to opioids and cigarettes and booze?
One or two people can be written off as and expected occurrence, but such a large percentage of people to warp the life expectancy charts demands some explanation.
And no, colleges don’t select for health or even intelligence, but access and money. There are only a limited number of slots available, and colleges must turn away plenty of students who are intelligent but lack the recourses to quit work and study full time.
And we also know that the sort of jobs obtained by those without a degree are more dangerous and more damaging to health than those without. A construction worker for instance is at more risk than a front line soldier.
We know from history that when people live in a more prosperous economy with more opportunities, fewer people engage in self destructive behavior.Report
We’re talking about “having a degree” which includes the community colleges. The “limited spots” idea is mostly moot.
I’m not sure we have the granularity to chase this. This is one of those issues where the outliers likely drive the numbers.
Are we talking about opioid abuse moving the needle or is it an uptick in the murder rate for young inner city men?
“Going to college” filters out both of those. However the solution isn’t to send addicts and dead gang members to college.
Bad behavior prevents you from getting a degree and also results in other problems. Getting a degree doesn’t prevent bad behavior.Report
Looking it up, the decrease in life expectancy is because…
Covid and Drug Overdoses.
https://www.health.harvard.edu/blog/why-life-expectancy-in-the-us-is-falling-202210202835#:~:text=COVID%2D19%2C%20drug%20overdoses%2C,and%20liver%20disease%20and%20suicides.Report
Maybe we’re having the wrong convesation:
For-profit schools have been a central focus of the debate over the causes of these student
debt and default trends. In 2016-2017, about 15% of Stafford loans went to for-profit students,
even though they only comprise 5.6% of enrollments (Digest of Education Statistics 2019).
Furthermore, 39% of those who defaulted on their federal loans in the 2012 repayment cohort
had attended for-profit colleges, while only 11.5% of students were enrolled at for-profit schools
in the 2010-11 academic year (Chakrabarti, Lovenheim and Morris 2016a). The argument
made by critics of for-profits is that these patterns are driven by a combination of higher
tuition charged by for-profits and worse post-enrollment labor market outcomes among for profit students relative to their public counterparts in similarly-selective institutions.
Higher
tuition induces students to take out more loans, while lower completion rates, longer timeto-degree, and lower earnings post-attendance reduce the ability of students to repay these
loans
https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr811.pdf?la=en#:~:text=Among%20four%2Dyear%20students%2C%20for,and%20have%20higher%20default%20rates.Report
Related:
Biden cancels $72 million in student loan debt for borrowers who went to for-profit Ashford University
The Department of Education said Wednesday that it is canceling $72 million in federal student loan debt for more than 2,300 borrowers who attended the for-profit Ashford University in California.
Altogether, the Biden administration has approved the cancellation of more than $116 billion of student loan debt for over 3.4 million people – about 1.1 million of whom are borrowers who were misled by a for-profit college and granted relief under a program known as borrower defense to repayment.
ETA:
California’s attorney general this week began presenting evidence in his office’s long-awaited fraud trial against for-profit Ashford University. In the case, filed in 2017, the state alleges that Ashford engaged in unfair and fraudulent business practices, with school recruiters fueled by a “boiler room” culture that demanded they meet enrollment quotas. The recruiters, in turn, allegedly told prospective students falsehoods, including that federal financial aid would cover all of their costs and that Ashford programs would prepare students for careers in fields requiring certification, such as teaching and nursing.Report
Should Ashford University (including people in charge of Ashford University) be sanctioned for doing this sort of thing?
Like, should they be told “YOU CAN’T DO THIS ANYMORE!” and then be prevented from doing this sort of thing anymore?Report
Convicted fraudster Donald Trump and the Republicans say YES YOU CAN, KEEP DOING THIS!
Betsy DeVos scraps Obama-era rule on for-profit colleges
“Again and again, Secretary DeVos proves she only cares about protecting for-profit colleges, no matter how many students they swindle,” said Aaron Ament, president of the National Student Legal Defense Network.
DeVos has been widely criticized by Democrats for hiring department officials with ties to the for-profit industry.
The secretary attempted to roll back another Obama-era rule on for-profit colleges, which allows students defrauded by their schools to seek loan forgiveness. But a federal judge – siding with Democratic attorneys general from 18 states and the District of Columbia – ruled that DeVos’ freeze was “arbitrary and capricious” and ordered immediate implementation of the rule in October.
https://www.cnn.com/2019/06/28/politics/betsy-devos-for-profit-college-rule/index.htmlReport
Do you agree with Donald Trump on this?
Or do you think that schools that rip off their students should be sanctioned?Report
I would much rather have them get refunded from the colleges.
Heads the student wins and tails the tax payer loses is a game that can go on a long time.Report
I think Rob Bonta and Joe Biden are on the right course. Don’t you?Report
Absolutely not.
The rot goes deeper than a handful of for-profit colleges.
The stories of the people in the NBC article, for example, will not be helped by Biden going after Ashford.
So again, I ask: do you think that schools that rip off their students should be sanctioned?Report
This is a line of logic which you yourself have ridiculed many times.Report
Well, don’t forget, the story that kicked everything off was an NBC News story that was talking about a bunch of people who have more debt than they feel they deserve for the degrees that they got.
And they’re not talking about Ashford.
You’d rather talk about Ashford college and I understand that.
But I’m looking at the NBC News story as well.
So I ask again: do you think that schools that rip off their students should be sanctioned?Report
Asked and answered with an emphatic yes.
I know you want to keep the focus on affluent puppeteers and people you dislike but that’s not as interesting to the rest of us as the ways in which we can make college more available to everyone.Report
That’s not *MY* focus, Chip. The NBC News story is about how student loan repayments kicked back in today.
Today. As in October 1st in the year of our Lord Two Thousand and Twenty Three.
The story is about various people who find themselves having to make payments again.
I understand why you want to talk about Ashford college instead.
But NBC News is, instead, talking about the payments kicking back in for the people that they interviewed in the story.
I seriously recommend getting on twitter yourself and leaving a reply to NBC News saying “why are you talking about this instead of” and then you can link to any story you want.
Imply motives.Report
You’re the one talking about how the rot goes deeper than just a few puppeteers having a hard time of it.
Do you want to talk about the rot, or just hur hur puppeteers?Report
The hur hur puppeteers are being taken advantage of and given tens of thousands of dollars of debt in exchange for a nigh-worthless sheepskin.
The hur hur puppeteers are themselves evidence (if not proof) of the rot.
The schools are predating on innocent people and they shouldn’t be allowed (let alone encouraged!) to do so.
I think that they should be on the hook for their predation.Report
Not all college majors pay for themselves. That’s why colleges and their supporters average the Engineers with the Women’s Study’s majors. Any talk about “the value of a degree” is avoiding that issue.
Worthless degrees exist so everyone can get something and the college can charge for that.
All too often, putting people who shouldn’t be in college into college results in debt and a worthless degree, or just debt and no degree.
Expanding access runs the risk of repeating our mistake with expanding home ownership. We’re mistaking the trappings of the middle class with the behaviors which create it.
There’s a lot to be said for reducing the cost and risk of college. Bankruptcy court would help for risk. Reducing the size of the administration and all the fluff that comes with it would help for cost.
However “reducing the fluff” implies “getting rid of worthless classes” which is going to reduce “access” to college.Report
DeVos was a lightning rod because she was cleaning up Obama’s various Educational messes.
She got a lot of hate from Team Blue when she got rid of Obama’s crew’s idea that accusation should mean guilt+punishments for (college) sex crimes, no due process needed.
For example, Devos resigned on Jan 7th 2021 because of the Jan 6th riot. Elizabeth Warren called her the “worst Secretary of Education” on Twitter, saying that she would rather quit than invoke the 25th Amendment to remove Trump from office.
There was nothing she could have done that wouldn’t have been spun into “worst ever”.Report
This is a devilishly tricky issue. American higher education is very different than that in other developed democracies, especially European ones. Japan, South Korea, and Taiwan are the closest equivalents because they include the American mix of public and private universities of various levels of esteem. Even then they lack the institution of the SLAC. Since higher education is prime fodder for the culture wars in the United States, we get these weird arguments on how to fund it and a belief most people should pay for their own as much as possible. it isn’t possible.Report
we get these weird arguments on how to fund it and a belief most people should pay for their own as much as possible. it isn’t possible.
It isn’t possible for most people to get these degrees and pay for them themselves?
Am I reading that correctly?Report
I think I replied to Chip here, something about smoking.Report
Thank you. I see it now.Report
Biden has played a dirty trick here. By dragging out the student loan payment pause for years past the point where there was any remotely plausible economic justification for it—illegally giving away well over hundred billion dollars, largely to doctors and lawyers—he’s induced many borrowers to budget around not having to make payments. As a result, many will no longer have slack in their budgets to resume payments, even though most would have been capable of making payments if there had never been a payment pause.
Trump deserves a much of the blame here. Really there should never have been a blanket amnesty, given that a) the unemployment rate for 25- to 34-year-olds peaked at only 14.5% in April 2020 and was back down under 7% by the end of the year and b) most people’s incomes stayed the same or increased due to the stimulus payments and bonus unemployment benefits.
But economic conditions in mid 2020 were very different from those in 2021, so Trump starting the payment pause is at least somewhat understandable, while Biden continuing it for another 2 3/4 years was characteristically scummy and irresponsible.
You might almost say that if restarting student loan repayments doesn’t work out, it’s because Democrats didn’t want it to work out.Report
God forbid that our MBA take advantage of the pause to pay down the principle of his loan. Or at least get rid of his credit card debt.
One hopes that lots of people did pay down their loans while they were on hold… although if we select for people who have serious student loan problems we’re probably also selecting for people who make poor economic decisions.Report
Actually making payments on student loan debt while it’s locked at 0% interest would have been good for taxpayers, but not a great move in terms of pure self-interest. Better to pay down other debts, or invest the money, and then (depending on interest rates) use it to pay down the student loan debt once it starts accruing interest again.Report
Fair point. Fully agreed.Report
We’re screwed anyway, a few hundred billion hardly matters.Report