the problem with education is not how many loans you can get, but how much it costs to attend. The cost of getting the education now is so high that it's not worth the price tag.

It's about effin' time.

Moreover, my understanding is that the banks weren't particularly happy about having to offer student loans either.

Another reason: the private sector student loan business model was built around cheap, liquid securitisation markets. Sallie Mae was one of the largest ABS issuers in the world. We're not going to be seeing those again for a while.

We have an expensive, but rather fantastic, system in Australia. The government pays our university fees upfront- and offer a large number of subsidized places.

When one graduates and starts earning about what the government deems to be appropriate (at the moment, I think it's about 44k a year), the loan is repaid through automatic deduction from our pay, along with out payroll tax. It's a scaled percentage that goes up to a maximum of 8% of your income if you earn over 80,000/year. It's expensive for the government, but it's a great system.

I don't know, I would be pretty happy to issue government guaranteed loans at 6%.

Back in the day, the rate on my Ford loan was much better than the ones from Sallie Mae even though the government was on the hook for both loans.

At one point the government gave me the loan and the college was required to accept it. The kickbacks started when the system was changed so the institution was empowered to choose whether to go with the public or private financing options. If the school chose the private option, students could not use a direct loan at that school.

average undergrad debt: 22,000 for 4 years

average grad debt: 60-70,000

The issue, once again is not what it was like your day, but the fact that the degrees cost too much money when compared to expected earnings.

The only degree for which this is no true- is the associates degree. It's the only one above high school where the degree significantly increases earnings compared to cost.

godplay makes an excellent point, particularly for liberal arts degrees. Universities need to tailor expenses to students rather than tack on needless "sports" fees to the tuition of students who do not participate in sporting events and cannot afford Big Ten tickets themselves.

Actually, it's an argument for re-thinking how we do education:

a) Push most kids to go to community colleges the first 2 years.

b) Push emphasis on this in the budget, and leave 4 year degree schools for final 2 years. really build up feeder system approach.

c) Creating stronger programs to steer kids away from degrees that are in overabundance toward sciences etc

d) Require honesty in education act. Really have sit down conversations before a kid enters grad school between the student and the grad school about costs, about job prospects using real world numbers, etc. Do all of this before they end, and not as an exit interview.

e) reign in professor's salaries. Also other costs of university so that its not exorbitant. take out the for profit element as much as possible. Re focus on university as a place of learning rather than a feeder for business. ie, things like real critical thinking pushed.

Those are jsome real suggestions to produce better results . Do i expect it to happen? No. Do I think everyone already knows a lot of this out there- Yes. Do I think education is about profit making now so no one cares? yes.

the degrees cost too much money when compared to expected salaries.

Typical graduate degrees that you will have to pay for out of your own pocket are things like law degrees, med school, and MBAs, all of which have a fairly good return on investment. Being on the hook for 70k in loans for an M.D. isn't the least bit unfair. In fact, it's a good deal.

Graduate degrees in the sciences and humanities should be paid for by RA or TA fellowships, various master's in public policy and the like should be ideally picked up by an employer's continuing-education benefits, and master's degrees in things like journalism should be avoided altogether.

sorry your Master's in Comp Lit doesn't come with a guaranteed six figure salary

no one is forcing all you ROI kiddies to go to college

I've always known this was stupid and innefficient, but I must say I'm rather gobsmacked by the volume of total savings here.

so the commenter who thinks the cost of education is not worth the return also wants to lower the earnings of arguably the most educated segment of the population

Do you really think associate professors making 65K and tenured faculty at 105K are overpaid and that such salaries are a significant factor in out control tuition?

The Delta Project would disagree with you although Dr. Vedder at AEI would be supportive. You might not like his solution however - more for profit colleges.

I have a law degree from a top 10 law school.

My arguments are based on actually reading data on the subject.

If you want to dispute my statements about ROI, you are not going to do it by a) attacking me or b) not presenting evidence.

That 70k is the average. For medical students, they are looking at a 200k debt load. Lawyers on average are looking at a 100 to 120 k debt load if they start today.

While the medical degree is more worth it, the law degree- when you look at time spent not earning money, median salary, etc, is not. ROI is a simple matter of math. MBAs also are not worth their cost. Even at the top exchelons, if say you are like one of m friends who is graduating this year in a down economy with a top notch MBA. It's not going to change the market in which she is entering in which her job offer is now gone because the company she was going to work at is now gone.

Ezra has actually talked about this before. We want to think of our society as merit base. But, it's not always the case that it is- even with top flight educational pedigree. Thus, the cost is a real concern.

It's a concern because of the ROI. It's a concern because of the wasted dollars that could have gone into investing in businesses, etc.

I am not saying we should not get degrees or even go to great schools. I am saying how we structure education in terms of how its presented is cost inefficient. A kid going to Harvard after 2 years of community college is not going to be worse off than a kid going straight to Harvard- he or she is going to be financially better off. For the poor kids heading into the college system, this is especially true. It gives them a leg up on the competition that may or may not have mommy and daddy footing the bill for internships for which they maybe expected to do them for free.

Actually, what I meant about the professors is the money spent on trying to attract the "superstars" etc who hike the costs. Associate professors, etc are fine. I actually think they should be making al ittle more. It's the dean who costs a million dollars (exaggerating a little) that i don't quite get.

It is not the deans either, the highest paid university employees are almost always coaches at the big sports schools and medical/business school faculty. Big time profs are expensive but almost always supported by endowed chairs so their impact on tuition growth is not that great.

Certainly, state universities are trying to raise salaries for faculty due to concerns of the privates poaching but if you believe the Delta Project 'the direct costs of instruction have not grown as a proportion of total spending in any sector.'
Unfortunately, this is partially attributable to the increasing use of lecturers and other non-tenure track professors.

The growth in salaries of medical faculty and the cost of staff benefits should decrease if universal healthcare is ever passed.

"e) reign in professor's salaries."

FYI: I work at a 4 year college and just now have topped the 60K mark after 8 years as faculty. My spouse works for a community college and makes 65K. We pay about 12k annually for our own health insurance (we have terrible benefits), and 7k in (undergraduate) student loans for another 2.5 years. Maybe by the time our own kid starts college (we can only afford one child) we'll be able to pay for it, but I have my doubts. Just a reality check for those who aren't aware of typical professor's salaries. And we're the lucky ones in this system.

Medical, science, and engineering faculty are well worth their salaries because they bring in scores of high dollar NIH grants.

Its the ridiculous english professors who bring in ZERO DOLLARS who are the problem here. They are a huge albatross hanging on to the university payroll and they are NOT cost effective use of university resources.

Sports is another big albatross. Out of 120 division I colleges, less than 20 have profitable athletic departments. The other 100 are all money losers, yet they insist on paying coaches millions of dollars per year and wasting 85 football scholarships at shitty athletic programs.

While the medical degree is more worth it, the law degree- when you look at time spent not earning money, median salary, etc, is not.

And yet, this country hardly suffers from a shortage of lawyers.

Spike:

I have no idea what you comment means. That the number of lawyers is its own justification? That there are too many lawyer? If the former, a few years back people were buying houses that they could not afford. I would not rely on people's behavior under the assumption that it's rational. But, that's me. You may still believe in markets as god.

I have a law degree from a top 10 law school.

The enormous gulf between cost and educational return personified.

Epic:

Is that suppose to be a dig? If so, it seems that I am damned if I did, and damned if I didn't. Of course, the reality is that your post says more about your lack of critical thinking. Ultimately my educational background is not linked to whether my arguments here are right or not. I indulged another poster by correcting the ad honinem attack from earlier. Now, by indulging that ad honinem, I am faced with another. Damned if I do. Damned if I don't play along to the games of manipulators of conversation.

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