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1) Employment prospects for non-college grads decline every year. Prospects for college grads hold steady.
2) It's impossible to fund college using part time work because tuition has increased so much.
With this in mind, I don't blame everyone for wanting to go to college, and attempting to fund themselves with loans. However, and I'm not assigning blame here to anyone, a minority of people are capable of intellectual work, and for everyone else college is a waste of time.
The harsh reality is that we are in the process of culling the intellectually less able because there are fewer economic niches for them. Student debt is effective because the debtor *chose* to take on the loans, and thus absorbed some of the culpability when their life hits a dead end.
Denying people admission to college based on some Abitur type test as other countries do would be far more politically explosive in the US, especially along the racial dimension.
I see student loans, even those written off at the time of issuance, as a salve to a bad situation.
Years ago, held such a discussion with a professor from Germany. He said that Germany could simply not afford to have the percentage of people who were unemployable that the U.S. has.
They track students into service professions, vocational tracks, and college tracks. It's a raw deal for the late developers. But a good deal for the nation.
We have a growing population of people who are simply not employable. They take on college loans in a desperate attempt to get some sort of well-paying job. Works for some. Not for others.
Then we have all the unemployed factory workers, and coal miners who go to college to get retrained, only to have those jobs disappear as well.
Lot of people trained to repair computers. Who fixes computers any more?
Don't allow people to incur debt and take that chance?
A chance is one thing. Throwing money down a black hole is another. What other loan can you get with such little security, especially to those who have little to no credit history?
A few things:
Raise minimum GPA requirements for student loans. IIRC, it's a 2.0 currently. There's no reason why you can't raise it to a 2.5 or 2.75. If you're not going to be serious enough to study and get good enough grades, why should we pay for you?
Restrict majors who can apply for and have student loans. Sorry Music, Theater, and Art majors. Your jobs don't pay bills. There's enough data to provide hard evidence that certain majors do not produce high enough pay jobs to be able to pay back the loans. Double major (say Education and Art or Business and Music) would be OK, but single majors in these risky areas shouldn't be financed by the government.
Individualized assessment on loan amount. If you're a 2.5 student in high school, giving you a $35k/year blank check to go to some private school isn't in the government's best interest. It'd be one thing to finance a in-state school for a fraction of the cost. Another to finance private schools.
Many kids want to go to college because of the knowledge they want to receive. My son was a history major in college. He had to do tons of reading and writing. Many dropped out because they couldn't handle the course. He went on to get a masters in International Relations. Some just really want to learn. The problem is many kids go to college because they don't know what else to do. We need trade schools because many aren't cut out for college. We need plumbers, electricians, carpenters, mechanics....etc. I know unions will teach them the trade but why don't we have schools for them.
We DO have schools for plumbers, electricians, carpenters, etc. Barack Obama made it his life's mission to make sure those schools - generally for profit educational institutions - paid hell for existing and did everything he could to run them out of business. And he did it under the guise of poor graduation rates and broken promises, when it reality his thought process was chained directly to his ideology of hating those who make money in business.
They give it a go and can't keep up the pace, or a family emergency occurs, or a health issues come up...
They go back to back to what they were doing before, only this time saddled with thousands of dollars of debt that will follow them to their grave.
While everyone else is paying 3% to borrow money, they're paying 6%.
That higher interest rate is because it's an unsecured loan. There is no collateral such as a house/car/401K, etc., that can be foreclosed and taken if the borrower defaults. It's straight up risky unsecured debt, therefore the higher interest rate.
While it's very hard to do, you can get rid of student loans in bankruptcy. It all depends on the discretion of the judge handling the case.
I would be very suspicious of that, while they cannot take someones education away literally, they could take away someones ability to get a job based on that education though!
So someone could go bankrupt on school debt and not owe a dime, but they may find out they dont have a recognized degree from that school anymore as a result. An education can be taken away just like a car or material goods can.
The report in the OP's link shows that graduates with 4 year degrees have the fewest loan defaults. Those that went to college but dropped out have the highest default. Those with 1 year certificates or 2 year degrees are in between the drop-outs and those with 4 year degrees.
This shows that there are more jobs or better jobs for graduates.
It almost impossible to get rid of student loans through bankruptcy, they changed the law years ago. I have seen articles where they have put liens on social security.
Years ago, held such a discussion with a professor from Germany. He said that Germany could simply not afford to have the percentage of people who were unemployable that the U.S. has.
They track students into service professions, vocational tracks, and college tracks. It's a raw deal for the late developers. But a good deal for the nation.
We have a growing population of people who are simply not employable. They take on college loans in a desperate attempt to get some sort of well-paying job. Works for some. Not for others.
Then we have all the unemployed factory workers, and coal miners who go to college to get retrained, only to have those jobs disappear as well.
Lot of people trained to repair computers. Who fixes computers any more?
That may be true but Germany only has so much money to pay for free college so they have to be picky.
But college is not off limits to them; they just have to pay for it.
We DO have schools for plumbers, electricians, carpenters, etc. Barack Obama made it his life's mission to make sure those schools - generally for profit educational institutions - paid hell for existing and did everything he could to run them out of business. And he did it under the guise of poor graduation rates and broken promises, when it reality his thought process was chained directly to his ideology of hating those who make money in business.
To be fair though, it is a chicken and egg situation. If the schools do have poor graduation rates and graduates aren't finding jobs, then yes there is a systematic problem with the school.
On the other hand, if that's all that is available, then your choices are limited to these bad schools.
It's been a long time since I graduated college (grad school), but I get the sense that today's graduates aren't really willing to start in the trenches and work their way up? A masters degree still only got me $32,000 starting pay, which then went to $44,000 when I moved to a new job, and then to $58,000 at the next job. Each successive job prepared me for the next job on the ladder. I now make well into six figures, but I had to work to get here, which meant starting at the bottom. I also had $80,000 in student loans, which I paid off in 6 years mostly due to taking an assignment overseas that paid very well and was partly eligible for the Foreign Earned Income tax exclusion. It's all about planning every step - which should actually start BEFORE you select a major and graduate. Easier said than done in many cases, but I have to wonder if many are just flailing along hoping for a big break instead of aiming for something and going for it.
My advice to anyone from age 22-30 is to BE MOBILE. Don't settle down and get married. Go where the opportunity is. If your significant other wants to come along, fine. But don't let him/her hold you back. Just GO. Everything will work out on its own.
This is going to be an unpopular opinion, but my advice to my kids is to NOT get legally entangled (marriage, parenthood, property ownership, leases, etc.) with anyone who owes student loan debt. They don't owe. No use taking on an albatross who does, my apologies to Samuel Taylor Coleridge (The Rime of the Ancient Mariner).
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