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Higher ed, the next bubble to burst

I-am-a-panda
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8/9/2010 1:44:43 PM
Posted: 6 years ago
Same logic as a housing boom. People buy things they can't afford on credit when it's plentiful, credit lender lend beyond what they can actually afford, a few people can't pay back their loans, and then the dominos collapse.
Pizza. I have enormous respect for Pizza.
innomen
Posts: 10,052
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8/9/2010 2:05:27 PM
Posted: 6 years ago
At 8/9/2010 1:44:43 PM, I-am-a-panda wrote:
Same logic as a housing boom. People buy things they can't afford on credit when it's plentiful, credit lender lend beyond what they can actually afford, a few people can't pay back their loans, and then the dominos collapse.

Also like housing, the return on the investment is not there. 40K per year for 4 years! That is insanity. The debt is unthinkable, and the idea of parents having multiple kids in school is even more unthinkable. The net result is what has already been happening, the very rich will be well educated, and the rest will be in unspeakable debt.
I-am-a-panda
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8/9/2010 2:09:34 PM
Posted: 6 years ago
At 8/9/2010 2:05:27 PM, innomen wrote:
At 8/9/2010 1:44:43 PM, I-am-a-panda wrote:
Same logic as a housing boom. People buy things they can't afford on credit when it's plentiful, credit lender lend beyond what they can actually afford, a few people can't pay back their loans, and then the dominos collapse.

Also like housing, the return on the investment is not there. 40K per year for 4 years! That is insanity. The debt is unthinkable, and the idea of parents having multiple kids in school is even more unthinkable. The net result is what has already been happening, the very rich will be well educated, and the rest will be in unspeakable debt.

The main difference is that when the housing bubble collapses, the house can be taken as an asset. At least the credit institutions gets something back. With student loans they're investing in the hopes said students get a job which can adequately pay back the loans plus interest. There is absolutely nothing to reclaim from this, unless there is collateral from the parents.

However, as it stands I remember a thread saying as it stands a lot of degrees don't guarantee you a position in a post related to that degree, that Americans are over-educated.
Pizza. I have enormous respect for Pizza.
innomen
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8/9/2010 2:15:25 PM
Posted: 6 years ago
At 8/9/2010 2:09:34 PM, I-am-a-panda wrote:

However, as it stands I remember a thread saying as it stands a lot of degrees don't guarantee you a position in a post related to that degree, that Americans are over-educated.

Over educated? Over degreed maybe. An absurd notion that you have to have a degree to be someone. It makes the diploma less valuable, and those who don't go to college feel like crap. It's stupid.
I-am-a-panda
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8/9/2010 2:18:51 PM
Posted: 6 years ago
At 8/9/2010 2:15:25 PM, innomen wrote:
At 8/9/2010 2:09:34 PM, I-am-a-panda wrote:

However, as it stands I remember a thread saying as it stands a lot of degrees don't guarantee you a position in a post related to that degree, that Americans are over-educated.

Over educated? Over degreed maybe. An absurd notion that you have to have a degree to be someone. It makes the diploma less valuable, and those who don't go to college feel like crap. It's stupid.

And thus the over-inflation of degrees leads to a higher degree to qualified position ratio, forcing graduates into jobs which aren't enough to pay off student loans, these over-degreed workers default, credit institutions look to parents if they are guarantors, and slowly the bubble pops.

I think America has a really bad culture of credit spending.
Pizza. I have enormous respect for Pizza.
innomen
Posts: 10,052
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8/9/2010 2:28:23 PM
Posted: 6 years ago
At 8/9/2010 2:18:51 PM, I-am-a-panda wrote:
At 8/9/2010 2:15:25 PM, innomen wrote:
At 8/9/2010 2:09:34 PM, I-am-a-panda wrote:

I think America has a really bad culture of credit spending.

Ya think?
Danielle
Posts: 21,330
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8/26/2010 4:37:38 PM
Posted: 6 years ago
At 8/9/2010 2:15:25 PM, innomen wrote:
Over educated? Over degreed maybe. An absurd notion that you have to have a degree to be someone. It makes the diploma less valuable, and those who don't go to college feel like crap. It's stupid.

I 100% agree with this. I don't have a college degree, and can't see myself getting one any time soon. Long story short: I was young and irresponsible, and worse I racked up nearly $100,000 worth of debt in the 3 years I did attend university (with not much to show for it). I'm financially independent, so there's no way in hell a bank will give me another loan in the near future considering my credit history and student loan debt.

Meanwhile, I type this as I'm sitting in the library at my gf's school. I cannot tell you what IDIOCY surrounds me! Kids who don't know what the phrase "capitalism" even means are getting their degrees. Meanwhile, I won't have the opportunity to get a "real job" because I don't look good on paper... despite being more intelligent probably than nearly everyone of my friends with degrees. It's sad.

I'm essentially staying in IL one more year so Vi can finish school, and then head back to NJ (Rutgers) to inquire about financial aid from the state :/ It'll be the first time I've ever gotten state funds for a damn thing. I couldn't get any grants or even govt. student loans because my PARENTS make too much money... and I pay the price for that.
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Danielle
Posts: 21,330
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8/26/2010 4:38:50 PM
Posted: 6 years ago
At 8/9/2010 1:44:43 PM, I-am-a-panda wrote:
Same logic as a housing boom. People buy things they can't afford on credit when it's plentiful, credit lender lend beyond what they can actually afford, a few people can't pay back their loans, and then the dominos collapse.

Student loans are nearly 100% covered by the government via law. A bank essentially takes NO RISK in handing out student loans because the government guarantees it back to them.
President of DDO
lovelife
Posts: 14,629
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8/26/2010 5:13:56 PM
Posted: 6 years ago
At 8/9/2010 2:15:25 PM, innomen wrote:
At 8/9/2010 2:09:34 PM, I-am-a-panda wrote:

However, as it stands I remember a thread saying as it stands a lot of degrees don't guarantee you a position in a post related to that degree, that Americans are over-educated.

Over educated? Over degreed maybe. An absurd notion that you have to have a degree to be someone. It makes the diploma less valuable, and those who don't go to college feel like crap. It's stupid.

My stepdad can't get some jobs because of his degree. Too qualified. Pisses me off lol.
Without Royal there is a hole inside of me, I have no choice but to leave
RoyLatham
Posts: 4,488
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8/30/2010 11:29:38 AM
Posted: 6 years ago
The health care reform bill ended bank involvement with educational loans. All such loans will be directly with the government. Typically, the government keeps administrative costs low by not checking for fraud. Medicare does not systematically check for fraud, which may be 15% or more.

I think that incurring high debt for education may be worthwhile, but only if the education is aimed at a substantial high-paying career. Otherwise it isn't worth it. Going to college to mainly party and attend a few classes is a waste of everyone's time and money. That type of student, and there are a lot of them, ought not be subsidized.

The best deal in cheap education in the U.S. is the community college system. It is underrated. On the other end, top students will always be able to get scholarships to elite schools. Elite schools have lots of money, and they need top students to keep their prestige.

There are some professions, like engineering, science, medicine, ad law, that really require a formal education. But Bill Gates did just fine in business as a Harvard drop out. College can be generally enriching, however, so it helps appreciate more things. Makes ya a better debater.
I-am-a-panda
Posts: 15,380
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8/30/2010 11:38:30 AM
Posted: 6 years ago
At 8/26/2010 4:38:50 PM, theLwerd wrote:
At 8/9/2010 1:44:43 PM, I-am-a-panda wrote:
Same logic as a housing boom. People buy things they can't afford on credit when it's plentiful, credit lender lend beyond what they can actually afford, a few people can't pay back their loans, and then the dominos collapse.

Student loans are nearly 100% covered by the government via law. A bank essentially takes NO RISK in handing out student loans because the government guarantees it back to them.

Then why would they not loan to you? Regardless, debt is debt.
Pizza. I have enormous respect for Pizza.
innomen
Posts: 10,052
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8/30/2010 11:43:28 AM
Posted: 6 years ago
At 8/26/2010 4:37:38 PM, theLwerd wrote:
At 8/9/2010 2:15:25 PM, innomen wrote:
Over educated? Over degreed maybe. An absurd notion that you have to have a degree to be someone. It makes the diploma less valuable, and those who don't go to college feel like crap. It's stupid.

I 100% agree with this. I don't have a college degree, and can't see myself getting one any time soon. Long story short: I was young and irresponsible, and worse I racked up nearly $100,000 worth of debt in the 3 years I did attend university (with not much to show for it). I'm financially independent, so there's no way in hell a bank will give me another loan in the near future considering my credit history and student loan debt.

Meanwhile, I type this as I'm sitting in the library at my gf's school. I cannot tell you what IDIOCY surrounds me! Kids who don't know what the phrase "capitalism" even means are getting their degrees. Meanwhile, I won't have the opportunity to get a "real job" because I don't look good on paper... despite being more intelligent probably than nearly everyone of my friends with degrees. It's sad.

I'm essentially staying in IL one more year so Vi can finish school, and then head back to NJ (Rutgers) to inquire about financial aid from the state :/ It'll be the first time I've ever gotten state funds for a damn thing. I couldn't get any grants or even govt. student loans because my PARENTS make too much money... and I pay the price for that.

Had the same problem, even though my father gave nothing. I maxed out on the amount of student loans i could take out, and still didn't have enough. I had to take time off and work then save. It took me 11 years to get my undergraduate degree from BC, but i did it, and i did it myself. However, tuition then wasn't quite as much as it is now. If i went to a state school it would have been a breeze.
laughingman
Posts: 3
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8/31/2010 4:58:08 PM
Posted: 6 years ago
I love some of the stuff being said here so true. The problem now days is people believe that without a degree going to university (college in America) you can't get anywhere, or do anything. So more and more people are going into universities and coming out believing they will simply be given a job this may be true in certain ever growing industries but life doesn't work that way.

The more people go to universities the less the degrees start to really mean; anything you do shouldn't need a degree, you don't need one to do every single job as some employers believe. Degrees should only be for those jobs that are insanely difficult and hard to understand. People are simply going through higher education getting into monumental debt and still coming out without a job. The bubble might burst but perhaps before that happens we should take a serious look at how it works and change it already.
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innomen
Posts: 10,052
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9/2/2010 1:15:29 PM
Posted: 6 years ago
At 8/31/2010 4:58:08 PM, laughingman wrote:
I love some of the stuff being said here so true. The problem now days is people believe that without a degree going to university (college in America) you can't get anywhere, or do anything. So more and more people are going into universities and coming out believing they will simply be given a job this may be true in certain ever growing industries but life doesn't work that way.

The more people go to universities the less the degrees start to really mean; anything you do shouldn't need a degree, you don't need one to do every single job as some employers believe. Degrees should only be for those jobs that are insanely difficult and hard to understand. People are simply going through higher education getting into monumental debt and still coming out without a job. The bubble might burst but perhaps before that happens we should take a serious look at how it works and change it already.

Perhaps if high schools did a better job preparing kids for jobs and life instead of preparing them, almost exclusively, for more schooling colleges would be less relevant than they are.