Student Loans and the Second Recession: http://bit.ly/cT5Uh6. Soaring student debt is an underexplored, VERY important societal issue IMHO.
Student Loans and the Second Recession: http://bit.ly/cT5Uh6. Soaring student debt is an underexplored, VERY important societal issue IMHO.
This analysis is overwrought. Because student loan debt is much more difficult to discharge (filing for bankruptcy may change your payment plan to something that is longer term with lower interest rates and smaller payments), financial institutions will not run into any sort of liquidity crisis as a result. Thus the impact on the economy will be minimal. However, there is still a quality-of-life impact on those students who took out more than they could afford to repay. And more importantly, tuition inflation and college expansions should slow down or even halt as a result of the loan/credit bubble being popped.
The hard lesson in all of this is that we need to stop teaching our kids and their parents to divorce the economic worth of a degree from the social status obtained with gaining one. Instead, we need to re-institute common sense: If you want to get a degree in political science or gender studies, you better well look to double-major in engineering or something more marketable. And taking out $100,000 in loans to get a degree in ethnic studies from Harvard is pretty dumb unless you plan on getting a PhD or a professional degree after that.
It’s the “quality-of-life impact” that I’m primarily talking about, not the impact on banks (and yes, I realize that’s somewhat off-topic from the linked article). But I submit that “quality-of-life impact” HAS a major, and underexplored, societal and economic impact, including but not limited to the “adultolescent” phenomenon of kids moving back in with their parents in their 20s — something that is wrongly viewed by the media as first and foremost a sociological phenomenon, when I believe it is primarily an economic one — and, relatedly, the increasing degree to which people are waiting until their 30s to do things like buying houses, getting married and starting families. If you’re completely buried in student loan debt, it’s a lot harder to spend your 20s building your nest egg and starting the “adult” portion of your life. Arguably, the 30s are the new 20s, and arguably, student loan debt has a lot to do with that. And inarguably, if I’m correct, then with apologies to our vice president, that’s a big f***in deal.
As for tuition inflation slowing or halting, I’ll believe it when I see it, though certainly the current pace is absolutely unsustainable and always has been, recession or no. But there are competing pressures there. The popping of the credit bubble moves things in one direction; cutbacks in public funding of higher education, due to deficit crises, move things in the other direction, at least for public schools. And while such changes are usually temporary, if we’re headed for a double-dip recession and/or a long slog of tepid quasi-recovery, the impact could be more significant and long-lasting this time.
Here’s a crazy idea, but why not have free (government paid) tuition like every other civilized (and some uncivilized) nations in the world? A country that puts education ahead of military spending… I know it’s ridiculous, but the rest of the world doesn’t strap their youth to massive debt as they begin their lives, as we do here in America. Unless you’re a member of the priviledged elite, like myself, who doesn’t need student loans and has parents to pay the way through higher education, after graduation the students find themselves paying off their student loans until their mid to late-30s. It’s pretty sad to see so much money that could have gone towards stimulating and bolstering the economy by being put into homes, cars, and investments instead going towards their Fannie Mae student loans of 15 years ago.
This would be a better country… nay, we would have better citizens, and therefore would become a better country for doing things the right way. And now feel free to flame me because everyone knows the money is better spent on wars we would have been better off not fighting in the first place.
Korea– $30 billion
Vietnam– $584 billion and 70,000 lives
Gulf War I– $61 billion
Afghanistan and Iraq– $1 trillion dollars (and counting)
University Education– Worthless
“The hard lesson in all of this is that we need to stop teaching our kids and their parents to divorce the economic worth of a degree from the social status obtained with gaining one.”
Agreed. When I was in high school (a good private one), nobody ever questioned the real world value of a degree. It was just assumed that graduating from a prestigious school would, by itself, somehow justify the enormous cost of tuition. Thus, a generation of kids have been pushed by secondary schools seeking more prestige and by parents wanting their kids to have better opportunities than they had, into situations that aren’t always economically sustainable. Sure, a political science major at Brown will probably find a decent job somewhere, but what about a political science major at any lower tier school? This folds into that argument that too many people are attending four-year universities when it would make far more sense to attend a good technical school or gain actual job skills in other ways. Everyone should have an opportunity to prove themselves, but let’s face it – it’s a luxury to study sociology at Random Lower Tier State U while others of similar academic ability have to work because they can’t afford the tuition.
Colleges don’t help either, in my opinion. A lot of schools do very little to prepare students for life after graduation, and instead assume that every student wants to either a) stay in academia on a PhD-track in grad school or b) cares far more about something like gender studies than obtaining a practical job.
I think it’s ridiculous that I went through college being required to take theology, but nothing in the way of accounting, basic finance or how taxes work. It’s a huge tone-deaf misfire on the part of the country’s educational system, and now we’re left with a generation of graduates from good schools, in debt, having a lot of trouble making it in the real world.
I’m fortunate to have a decent job and be in a position to pay off my student loans, but far too many aren’t and this most certainly is a big f*cking deal, especially as we stare into this current economic abyss.
Well said, kcatnd. #PANIC
Oops, sorry, forgot I wasn’t on Twitter. 🙂
With all apologies for totally ruining this exceptional moment wherein kcatnd and I actually agree on something, I think that the purposeful, ideological miseducation of our youth isn’t an accidental byproduct of a dysfunctional educational system. Allow me to explain.
For a long time, I have thought a good way to summarize the differences between conservatives and liberals is, conservatives think liberals are stupid, and liberals believe conservatives are mean (I’d say “evil”, but the aftermath of 9/11 showed us that liberals oppose the idea that evil actually exists). This is still a good rule of thumb to go by, but I hasten to point out that although it’s debatable whether or not conservatives are mean and evil, we now have empirical evidence that liberals are stupid.
So the phenomenon that kcatnd and I have observed is the natural result of what happens when you have a government-dominated education system built by — and run by — liberal government workers for liberal government workers.
I am highly confident that Sean Vivier would back me up on this.
Except, Andrew, your “empirical evidence” is complete and utter bollocks.
Haha, shorter AML: “Now that we agree, let me tell you how this actually informs my consistent conservative confirmation bias!”
Seriously, though, you link to a WSJ article citing a Zogby poll and then tell me that this is all because liberals are so liberal and run the entire educational system?
Well, if that’s all it takes to make an argument, I’ll start sending you NYT articles citing liberal-leaning polls about how conservatives are just so mean. I think that kind of foolishness is beneath everyone’s intelligence and it’s a card you play far too often. When your analysis is so predictably coming down on one side, all the time, it’s highly improbable that you’re right or arguing in good faith. In other words, why can’t you be nice, balanced, and cool like me?
But to address the actual issue again, I think more of this is attributable to shifting generational values than the liberal excesses of our educational system. A lot of students today are separated from the labor involved in earning a chance to attend college. Their parents worked hard and earned most of the money required for college, but still need to rely on student loans to push their kids into the college of their (not necessarily their kids’) dreams. That, coupled with the institutional problems I mentioned earlier, makes it tough on everybody.
I know it would bolster your underlying belief that everything can be broken down to a liberal-conservative battle (and that conservatives are always right), but I think it’s a much smaller factor in this phenomenon than you think.
Let me, the computer science major, stick up for the humanities. These days, I don’t think our society appreciates things like a narrative of history, or how religion affects stuff, why societies do the things they do, and so forth. We’ve reduced it all to empirical data. And while I think empirical data is incredibly useful, and was ignored for years, neither do I think it explains everything. So we don’t theorize as to why democracies seem to decline and become authoritarian over time, we just endlessly try to quantify it with data.
For example, Kat, I’m glad you took theology. It is a different way of looking at things that can help you figure out why history happened the way it did. It still has a use today. I wish more schools required the study of philosophy, theology, myth, and so on, as a part of a rounded education.
Now, getting into debt for a bachelor’s in theology? Bad idea unless you are actually going into seminary. Even then, I discourage going into crazy debt myself. State schools with honors schools are your friend. My brother is currently studying philosophy and economics – a practical degree and one that keeps a door open if he does what I think he’ll eventually do and go into academia.
Plus, he will be a philosophical economist, and we need more of those!
Brendan #8 – an interest8ing cite – AMLTrojan points you to a study saying that in a self-identified-political-leanings group, one side significantly bought into liberal dogma more than the other side – you you attempt to refute it with someone from the liberal dogma side whining that the study wasn’t sufficiently scientific ? I realise that you light candles to St Nate on a regular basis, but, as is well-expressed by the phrasing I have learned since arriving in this country, “Puh-leaze !” …
Per St Nate
“The panel was not weighted and was not in balance.” “Waaaaah !”
“and only about 4 percent of the respondents were Hispanic and only 39 percent were female. “ “Aie aie aie aie aie”
“Others were poorly phrased, for instance: “A company that has the largest market share is a monopoly?”. This is confusing; having the largest market share is a necessary, though hardly sufficient, condition for being a monopoly, and no alternative definitions were presented.” Confusing ? A simple example – 5 companies in a market, with respective percentage shares 24, 22, 20, 18, and 16 … so St Nate intuitively believes that the company with the 24% share is a monopoly ? Even *I* don’t think Nate has a straight face while typing his response …
And then the classic (unfortunately Nate-ism …
“Klein is blaming the victims, as it were.” … “victims” of what(TF) ?
Cummon, Brendan – *you* can come up with a more cogent response to Andrew than to simply settle on Nate’s less-than-stellar “rebuttal” … even David K #18 in the Mickey Kaus thread is more coherent …
Brendan, I will freely grant 538’s criticisms of the validity of the poll: The questions could have been worded better; the cherry-picking of questions wasn’t very well rationalized; the methodology is unreliable; and the results weren’t weighted. However, none of those things change the simple fact that there was an astoundingly high degree of correlation between “unenlightened” answers and liberal political ideology, and it begs disbelief that correcting for all those deficiencies would summarily explain away or mitigate the clear message of the results. There is room in liberal philosophy to say that “Minimum wage laws raise unemployment, but this can be successfully mitigated and the benefits easily outweigh the drawbacks.” However, there is no room in any ideology to disagree with the straight-up economic reality that minimum wage laws raise unemployment. It’s empirically provable — and proven!
Bottom line: Whatever the weaknesses of the poll, you and kcatnd do yourselves a huge intellectual disservice trying to defend liberals’ propensity to suffer from a misunderstanding of basic economics.
As for as the main, light-hearted point I was driving to, you’re not going to persuade me that union domination of public schools isn’t part of the problem of kids graduating with too little common sense and misconceptions about the value of a college education (i.e. the benefits weighed against the costs). There may be far more direct reasons for the problem, I’ll agree with you on that, but that didn’t require any explanation — it had already been covered.
B Minich, I’m happy to stick up for liberal arts majors as well. But you know what I tell every kid I meet who’s majoring in poli sci or history? “That’s nice, but you should at least double major in engineering or business. Your poli sci / history degree by itself won’t pay your off your school loans.” In other words, study what you love, but be practical.