Rolling Stone's "The Great College Loan Swindle"

[Fluffernutter]

http://www.rollingstone.com/politics/features/taibbi-the-great-college-loan-swindle-w510880

Crux of the article:

-You must go to college because you're screwed if you don't.

- Costs are outrageously high, but you pay them because you have to, and because the system makes it easy to borrow massive amounts of money.

- The third part of the con is the worst: You can't get out of the debt.


For those of you that graduated (or will soon graduate) from college, what do you expect your debt to be?

 

[Lead]

College is whatever investment you make out of it. Did you pick an expensive or cheap college? Did you get a low or high salary job as a result of your degree? It's definitely not a scam but can be a very poor investment if you go somewhere expensive for a useless or low paying degree.

 

[Anung Un Rama]

College is whatever investment you make out of it. Did you pick an expensive or cheap college. Did you get a low or high salary job as a result of your degree? It's definitely not a scam but can be a very poor investment if you go somewhere expensive for a useless or low paying degree.

It is a scam.

 

[Lead]

It is a scam.

Rising tuition prices should be a concern but that doesn't make it a scam either. I do think there are a lot of institutions more expensive than they need to be.

 

[luckyshot]

College is whatever investment you make out of it. Did you pick an expensive or cheap college. Did you get a low or high salary job as a result of your degree? It's definitely not a scam but can be a very poor investment if you go somewhere expensive for a useless or low paying degree.

For sure. I went to a fairly “prestigious” undergrad school. From there I got into a top 20 law school. So it was a good investment. But then I decided that law wasn’t for me, so my undergrad debt quickly became a terribad investment.

Then I found a local college where I interned and got my masters for free, which was the best investment of my life.

The one thing that’s unfair about it is that you are making these decisions when you are 18, and if you don’t have anyone around to give you decent advice (like I didn’t), then you don’t necessary know any better. I mean, at 18 your frontal cortex isn’t even fully developed.

But hey, some guys decide to go into the service at 18 and get their brains blown out, so live and learn.

 

[Amerikuracana]

It's a bubble. Do we get the bailout? It's not a scam, it's more of a pyramid scheme where the last drops are being sucked out while they can.

 

[Amerikuracana]

Then you add in that manufacturing has to exist to create and distribute the wealth to support all the office politicians that want to push papers and click buttons pretending to be busy.. THAT is the scam.

 

[HockeyBjj]

I graduated 70k in debt with an electrical engineering degree

Wife unfortunately had 80k but a school counselor masters degree, so she doesn't make near as much as I do to support it

We started off life together 150 grand in debt and it's rather inconvenient

In hindsight, there are many things both of us would have done differently like community college for two years and staying in state for school. Unfortunately, at the time, the seriousness of the loans was all swept under the rug to teenage me as "don't worry about it. You'll be able to pay it off easy once you have your nice high laying engineering degree" so I made mistakes that I should have been smarter about

We can make the payments, but won't be able to buy a house until we've been married 10 years which kinda puts us behind in life in ways

 

[Lead]

For sure. I went to a fairly “prestigious” undergrad school. From there I got into a top 20 law school. So it was a good investment. But then I decided that law wasn’t for me, so my undergrad debt quickly became a terribad investment.

Then I found a local college where I interned and got my masters for free, which was the best investment of my life.

The one thing that’s really fucking unfair about it is that you are making these decisions when you are 18, and if you don’t have anyone around to give you decent advice (like I didn’t), then you don’t know any better.

But hey, some guys decide to go into the service at 18 and get their brains blown out by some, so live and learn.

Yea, I think it is hard to expect an 18 year old to make the right decisions at the time and understand the consequences of that amount of debt and the amount of income they need to expect for it to be worth it. I do think most people should consider their first year going somewhere local to figure out what they want to do and then transfer thre credits once they decide

 

[Anung Un Rama]

Rising tuition prices should be a concern but that doesn't make it a scam either. I do think there are a lot of institutions more expensive than they need to be.

And the government is giving out loans to anybody and you can't erase them with bankruptcy.

 

[Lead]

It's a bubble. Do we get the bailout? It's not a scam, it's more of a pyramid scheme where the last drops are being sucked out while they can.

the problem with the bubble is it isn't one that just pops. The consequences will be delayed home purchases and money going to other services in general. I do wonder how many loans out there are in default.

What they should do is package a bunch of loans together and sell them to financial institutions whith different grades as to how few defaults are expect in each. Then they should just all lie and assume most of them are a good rating until everything goes to shit and people realize it.

 

[bobgeese]

It's something that prevents people from their late 20's to 40 from being able to impact the economy.

Think of how many houses would be owned if these degrees weren't a mountain of debt?

 

[Lead]

And the government is giving out loans to anybody and you can't erase them with bankruptcy.

This is a manageable problem that is just being ignored. They shouldn't raise the limit each year on what you can extend in loans. Institutions would turn around and be forced to make cuts for excessive spending not key to learning. It isn't that hard of a problem but congress doesn't have a backbone.

 

[Lead]

Then you add in that manufacturing has to exist to create and distribute the wealth to support all the office politicians that want to push papers and click buttons pretending to be busy.. THAT is the scam.

If you are implying office jobs aren't real work, I would ask you to get off your soapbox. Let's not demonize different professions and encourage class warfare here.

 

[AviatorShades]

My debt from my bachelor's degree was zero. I didn't get any special scholarships or anything. California paid my tuition. Other states may not cover all of it but the federal Pell alone covers most if you're low income. Like 5k out of 7k annually or something similar to that?

I worked part time to cover my rent and didn't spend money on anything else. Making enough for 600 bucks rent + 300 food doesn't require you to manage a hedge fund.

Other students failed to file for financial grants on time despite being legally guaranteed the funds. Refused to work because their 2 hrs/week clown major required their full attention (some majors do require fulltime study but those usually aren't the ones worried about loan debt). Lived off of Starbucks and organic fruit purchased for $50/lb at the school book-grocery-souvenir store. For that matter purchased $800 worth of books every semester instead of pirating or using the library. Spring break trips.

Graduate school is a different story and was very expensive but by that age you should know what you're in for.

I found employment via learning technical skills online in the evenings. My degrees probably helped but I doubt they were critical. Mostly I bring them up when arguing on forums.

 

[drstrangelov]

I went to a public school, even only paying 10-15k a year t0 attend, it took a while before the added salary offset the cost. But, id never be where I am professionally without my education. Aside from people who have inherited family businesses, and a couple marine corp vets who slid into public service jobs on the fire department, nobody I know who skipped college is making over 100k.

 

[Amerikuracana]

If you are implying office jobs isn't real work, I would ask you to get off you soapbox. Let's not demonize different professions and encourage class warfare here.

I work at a public defenders office representing indigent criminals. I'm good at it and I help some people that deserve it, and some that probably don't. I'm helping, but I'm not creating wealth. I was at a prosecutors office as a paid intern previously. Sucking wealth there, not creating it.

It's not class warfare, it's "look at what the Wests manufacturing did for China in a comically short time, and it's also funny how Germany maintained many of its factories and has the money to bankroll europe."

Comparative advantage is the game. Produce and sell. Dealing in information needs to not be put on such a pedastool, that's what the uber-rich tech companies want and advertise to create.. It's a trick.

 

[JohnnySagebrush]

And the government is giving out loans to anybody and you can't erase them with bankruptcy.

From what I remember in my college days, most students couldn’t get enough Federal loans unless their parents were low income. Has this changed?

I remember kids taking out private student loans with variable interest rates, and of course the kids didn’t have credit history so they needed a co-signer (parent). Nifty little scam those private loan companies had. Earn 7% or more on each dollar you lend with minimal fear of losses. Better than the stock market!

 

[Lead]

I work at a public defenders office representing indigent criminals. I'm good at it and I help some people that deserve it, and some that probably don't. I'm helping, but I'm not creating wealth. I was at a prosecutors office as a paid intern previously. Sucking wealth there, not creating it.

It's not class warfare, it's "look at what the Wests manufacturing did for China in a comically short time, and it's also funny how Germany maintained many of its factories and has the money to bankroll europe."

Comparative advantage is the game. Produce and sell. Dealing in information needs to not be put on such a pedastool, that's what the uber-rich tech companies want and advertise to create.. It's a trick.

Services are still important and I think what you are missing with the China example is often US companies are outsourcing one part of their business model for their product. China isn't somehow masterminding this, they just have cheaper labor at this point. R&D, Marketing, Sales, Ops, etc still occur elsewhere. It's a trick to believe China is in control there.

Germany is an interesting case because they were able to find niche products to manufacture and their union relationships didn't kill them globally. The US wasn't able to do this for a few reasons.

 

[lts5025]

Honestly, in my opinion, people simply overpay for college because they want the ultimate college experience rather than looking at college as an investment.

I have friends who went out of state to go to big football/party schools and paid 3-4 times as much as they would have paid in-state because they wanted that experience. Is that experience worth tens of thousands in additional debt? Not in my opinion.

I have another friend who wanted to go to UCLA but didn’t get in, so he went to Pepperdine instead. Fucking Pepperdine... a school for rich people to send their kids who can’t get into a better school but can’t bear the thought of them going to a UC. The guy got into Irvine and UCSB, but he blew $40,000 a year to go to a second-rate private school.

I got my A.A. from a JC in a year, transferred to a UC, got my BA a year and a half later and then got my MS at another UC 2 years after that. I worked constantly, took summer classes and graduated with less than $5000 in debt after grad school.

I work for a local government agency, so I’ll never be rich, but I’m comfortable. My job requires a graduate degree, but doesn’t require you go $100k in debt to get it.

If you go to a private or out of state school without a significant scholarship, if you waste semester after semester trying to “find yourself”, if you study abroad or take semesters off, you’re going to spend a lot more money on college than you have to.