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(Mother Jones)   Nine charts that explain the whole student loan debt crisis. Hope you've invested in a good school so you can understand them   ( motherjones.com) divider line
    More: Interesting, debt crisis, student loans, loan debt, federal student loans, students, loans  
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2504 clicks; posted to Politics » on 05 Jun 2013 at 11:56 AM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-06-05 11:16:40 AM  
When I graduated in 1999, the tuition and fees and health insurance for in-state students was just under 5k/semester.

It is now well over 9k.

I do not believe that salary prospects have doubled, in that time.
 
2013-06-05 11:24:38 AM  
Mass default is going to pop that entire bubble very soon.  Not because of any coordinated effort to protest via mass default, as some have suggested, but simply by the circumstances of the debt slaves.
 
ZAZ [TotalFark]
2013-06-05 11:29:16 AM  
Missing from the "Maxed Out" chart is mortgage debt, which at $10 trillion is about four times the sum of student loans, auto, and credit card debt.

The $10 trillion figure from the federal reserve includes 1-4 family units, so is an overestimate of primary residence mortgage debt.
 
2013-06-05 12:11:47 PM  
It always struck me as odd that the three largest expenses in a person's life (Buying a house, Buying a car, getting married) are all expected to occur when that person is at the lowest point on their 'earnings potential' graph...and they're all expected to be financed at 'some' interest rate...

Personally, I'm a HUGE fan of teaching kids to live debt free.  Don't teach them to 'manage debt'.  Teach them to ELIMINATE it.
 
2013-06-05 12:19:07 PM  
Paid mine off last year, very happy as a result.
 
2013-06-05 12:20:21 PM  

nekom: Mass default is going to pop that entire bubble very soon.  Not because of any coordinated effort to protest via mass default, as some have suggested, but simply by the circumstances of the debt slaves.


They've been saying this for a while but I still think it's going to happen. Maybe not this year, but it will. With massive monthly payments that nobody will work on to lower and rising interest combined with jobs that don't pay for shiat it's a bubble that's been a long time in the making.

Frankly, I want to see it pop. The system needs some serious reform.
 
2013-06-05 12:28:05 PM  

dragonfire77: Personally, I'm a HUGE fan of teaching kids to live debt free. Don't teach them to 'manage debt'. Teach them to ELIMINATE it.


Frankly, that's dumb as hell.  To prove it, ask yourself this question "what is the most money I would pay today in order to guarantee a $1000 payment in one year." Unless you answered $1000 or more, you believe that a benefit now is worth more than a benefit later, and in fact would be willing to pay for the privilege of benefiting sooner rather than later - i.e. to borrow money and pay it back at interest.  If you're discounting the future at, say 5%, and somebody offers to loan you money at 3%, you'd be an idiot not to borrow the money.
 
2013-06-05 12:34:39 PM  

ZAZ: Missing from the "Maxed Out" chart is mortgage debt, which at $10 trillion is about four times the sum of student loans, auto, and credit card debt.

The $10 trillion figure from the federal reserve includes 1-4 family units, so is an overestimate of primary residence mortgage debt.


I recently got a mortgage & a second degree. My tax guy said I can deduct all of my interest paid on mortgage, but only $5,000 of student loan interest.

Can any farkers confirm this? Can you explain it?

FWIW, I paid more in student loan interest than I did mortgage interest or taxes.
 
2013-06-05 12:43:28 PM  

korkoros: dragonfire77: Personally, I'm a HUGE fan of teaching kids to live debt free. Don't teach them to 'manage debt'. Teach them to ELIMINATE it.

Frankly, that's dumb as hell.  To prove it, ask yourself this question "what is the most money I would pay today in order to guarantee a $1000 payment in one year." Unless you answered $1000 or more, you believe that a benefit now is worth more than a benefit later, and in fact would be willing to pay for the privilege of benefiting sooner rather than later - i.e. to borrow money and pay it back at interest.  If you're discounting the future at, say 5%, and somebody offers to loan you money at 3%, you'd be an idiot not to borrow the money.


Depends.  If you finance a house at 5% for thirty years, you end up paying for the house about 2.5 times.  which means 30 years from now your cost base is now 2.5 times what you paid for the house just to turn a profit.  For a car, it's even dumber, because the car itself loses most of it's value in the first five years, which means that in addition to losing the interest, you're also losing equity on what you bought.
 
2013-06-05 12:45:17 PM  
Student loans are just the worst things for young adults.  At the very least, we need to heavily subsidize degrees in Math, Science, Medicine, and Tech (I don't know what STEM stands for) because those degree-holders will pay the money back in the form of taxes.  Additionally, anyone working in those fields but holding a degree not in those fields should have their student loans paid off for as long as that person continues working in that field.  Encouraging growth in the major fields of innovation will benefit the individual and the country alike.
 
2013-06-05 12:45:19 PM  
what it boils down to is that people are asking a lot for unsecured loans, which is a dangerous prospect for banks who have been burned in the very recent past by loans that had collateral (houses). TD Bank does not do student loans, how many other banks do student loans?
 
2013-06-05 12:45:43 PM  

HawaiiE: ZAZ: Missing from the "Maxed Out" chart is mortgage debt, which at $10 trillion is about four times the sum of student loans, auto, and credit card debt.

The $10 trillion figure from the federal reserve includes 1-4 family units, so is an overestimate of primary residence mortgage debt.

I recently got a mortgage & a second degree. My tax guy said I can deduct all of my interest paid on mortgage, but only $5,000 of student loan interest.

Can any farkers confirm this? Can you explain it?

FWIW, I paid more in student loan interest than I did mortgage interest or taxes.


It depends on your income level... YMMV
 
2013-06-05 12:46:09 PM  
We can  not just continue to try and use low interests rates to solve the student loan crisis.  We're just digging ourselves a deeper pit.

Suppose you run a lemonade stand.  On day one you charge 25 cents per cup.  Some kids buy your lemonade, and some kids don't.  The next day your mom tells you that because she wants you to succeed, she's going to tell every kid in the neighborhood that she'll give all of them money, up to $1, if they use it to pay for your lemonade.  If you're a smart kid, how much to charge for lemonade that day?

That's why college costs have gone up so far.  If we continue to make it cheaper for students to take on debt, without putting any cost controls on the colleges, those costs are just going to continue to soar. We need to attack the other end of the problem too.  We need to build some incentive for colleges to keep costs down.  Give favorable treatment to grant applications from institutions that offer affordable tuition or punish grant applicants from institutions with sky high costs.  Find a metric that ties the average income of a school's graduates to the graduates' debt burden on graduation, and then hold the school accountable if the metric's results are unacceptable.  Force colleges to cosign loans above a certain amount, so they have a reason not make those loans if their graduates can't pay them back.  If those won't work, we need to think up another solution that will, because otherwise schools are just going to free-market us into oblivion.
 
2013-06-05 12:47:57 PM  

HawaiiE: ZAZ: Missing from the "Maxed Out" chart is mortgage debt, which at $10 trillion is about four times the sum of student loans, auto, and credit card debt.

The $10 trillion figure from the federal reserve includes 1-4 family units, so is an overestimate of primary residence mortgage debt.

I recently got a mortgage & a second degree. My tax guy said I can deduct all of my interest paid on mortgage, but only $5,000 of student loan interest.

Can any farkers confirm this? Can you explain it?

FWIW, I paid more in student loan interest than I did mortgage interest or taxes.


This is correct, but its actually less than the $5k. I came close to hitting that number last year, will hit it this year.
 
2013-06-05 12:49:13 PM  

Nuuu: That's why college costs have gone up so far.


Your point would be compelling if it wasn't based on a blatant falsehood.
 
2013-06-05 12:49:15 PM  

hoodiowithtudio: what it boils down to is that people are asking a lot for unsecured loans, which is a dangerous prospect for banks who have been burned in the very recent past by loans that had collateral (houses). TD Bank does not do student loans, how many other banks do student loans?


Any bank that doesn't do a student loan which is federally backed at an outrageous interest rate is an idiot. Guaranteed money.
 
2013-06-05 12:49:58 PM  
I feel lucky that I graduated college in 2003.  shiat's been all farked up since then.
 
2013-06-05 12:51:30 PM  

dragonfire77: It always struck me as odd that the three largest expenses in a person's life (Buying a house, Buying a car, getting married) are all expected to occur when that person is at the lowest point on their 'earnings potential' graph...and they're all expected to be financed at 'some' interest rate...

Personally, I'm a HUGE fan of teaching kids to live debt free.  Don't teach them to 'manage debt'.  Teach them to ELIMINATE it.


The bride's family is supposed to pay for the wedding. And I don't think any of those things are "expected" at the lowest earnings potential point. Of course back when there were plenty of middle class jobs of people with only a HS education 25 was a point where you had already been in the workforce for a while and 15 year mortgages were the standard long term length.
 
2013-06-05 12:51:54 PM  
thats the thing, its not, look at what we are talking about, TD  is a very conservative bank, notice their lack of tarp funds and any other money when all the other banks were falling apart
 
2013-06-05 12:56:20 PM  

dragonfire77: korkoros: dragonfire77: Personally, I'm a HUGE fan of teaching kids to live debt free. Don't teach them to 'manage debt'. Teach them to ELIMINATE it.

Frankly, that's dumb as hell.  To prove it, ask yourself this question "what is the most money I would pay today in order to guarantee a $1000 payment in one year." Unless you answered $1000 or more, you believe that a benefit now is worth more than a benefit later, and in fact would be willing to pay for the privilege of benefiting sooner rather than later - i.e. to borrow money and pay it back at interest.  If you're discounting the future at, say 5%, and somebody offers to loan you money at 3%, you'd be an idiot not to borrow the money.

Depends.  If you finance a house at 5% for thirty years, you end up paying for the house about 2.5 times.  which means 30 years from now your cost base is now 2.5 times what you paid for the house just to turn a profit.  For a car, it's even dumber, because the car itself loses most of it's value in the first five years, which means that in addition to losing the interest, you're also losing equity on what you bought.


I don't know where you're getting that info from, but I'm pretty sure it's inaccurate.  When I do a 30-year mortgage at 5% for $200,000, I get  $386,511.57
 
2013-06-05 12:57:49 PM  

korkoros: dragonfire77: Personally, I'm a HUGE fan of teaching kids to live debt free. Don't teach them to 'manage debt'. Teach them to ELIMINATE it.

Frankly, that's dumb as hell.  To prove it, ask yourself this question "what is the most money I would pay today in order to guarantee a $1000 payment in one year." Unless you answered $1000 or more, you believe that a benefit now is worth more than a benefit later, and in fact would be willing to pay for the privilege of benefiting sooner rather than later - i.e. to borrow money and pay it back at interest.  If you're discounting the future at, say 5%, and somebody offers to loan you money at 3%, you'd be an idiot not to borrow the money.


Exactly.  A few years ago I had to replace a septic system so old neither I nor the town had plans for it.  Massachusetts has a loan program that enabled me to borrow money to do the work at around 2%.  I could have paid cash for the work, but at that rate it was effectively free money.  I've more than overcome the 2% burden by investing.
 
2013-06-05 12:57:54 PM  

unlikely: When I graduated in 1999, the tuition and fees and health insurance for in-state students was just under 5k/semester.

It is now well over 9k.

I do not believe that salary prospects have doubled, in that time.


Salary prospects haven't doubled; the price of admission to a decent paying job has increased.  With the gradual elimination of good paying jobs that don't require post-secondary education (manufacturing, farming, construction, mom-and-pop retail and hospitality), demand for post-secondary education has gone up, There aren't necessarily more jobs for college and tech school grads, but they are increasingly becoming the only people who get jobs, so the schools can keep ratcheting up the cost of education.
 
2013-06-05 01:00:53 PM  

trotsky: nekom: Mass default is going to pop that entire bubble very soon.  Not because of any coordinated effort to protest via mass default, as some have suggested, but simply by the circumstances of the debt slaves.

They've been saying this for a while but I still think it's going to happen. Maybe not this year, but it will. With massive monthly payments that nobody will work on to lower and rising interest combined with jobs that don't pay for shiat it's a bubble that's been a long time in the making.

Frankly, I want to see it pop. The system needs some serious reform.


The student loan bubble won't pop like other bubbles.  Student loans essentially cannot be discharged in bankruptcy.  There is no statute of limitations on suits to recover the balance of the loan, and a judgment against you for a student loan will never expire.  Except in relatively rare circumstances, you cannot escape this debt.  Period.  That's what makes it unique.

When the housing bubble popped, people could just up and walk away from their homes.  When the tech bubble popped, investors just closed up their pocketbooks.  That can't happen with student loans, though.   The people paying into the broken system can't stop paying.  As long as that's true, the system can't truly collapse like the housing market or the tech market.
 
2013-06-05 01:02:22 PM  
Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?
 
2013-06-05 01:05:12 PM  
because the colleges are like drug addicts and constantly need more, especially public ones
 
2013-06-05 01:06:11 PM  

bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?


If you listen to conservatives, it's because we're making money for education too available to young people.

However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

Hey, what a coincidence!
 
2013-06-05 01:07:31 PM  

Tomahawk513: dragonfire77: korkoros: dragonfire77: Personally, I'm a HUGE fan of teaching kids to live debt free. Don't teach them to 'manage debt'. Teach them to ELIMINATE it.

Frankly, that's dumb as hell.  To prove it, ask yourself this question "what is the most money I would pay today in order to guarantee a $1000 payment in one year." Unless you answered $1000 or more, you believe that a benefit now is worth more than a benefit later, and in fact would be willing to pay for the privilege of benefiting sooner rather than later - i.e. to borrow money and pay it back at interest.  If you're discounting the future at, say 5%, and somebody offers to loan you money at 3%, you'd be an idiot not to borrow the money.

Depends.  If you finance a house at 5% for thirty years, you end up paying for the house about 2.5 times.  which means 30 years from now your cost base is now 2.5 times what you paid for the house just to turn a profit.  For a car, it's even dumber, because the car itself loses most of it's value in the first five years, which means that in addition to losing the interest, you're also losing equity on what you bought.

I don't know where you're getting that info from, but I'm pretty sure it's inaccurate.  When I do a 30-year mortgage at 5% for $200,000, I get  $386,511.57


My HP 12c agrees with you.

dragonfire77 is also assuming that the money you have not sunk into your house or your car because you have a loan is in your mattress or in a cigar box burried under an oak tree.  Personally, I have no long-term debt that isn't more than compensated for by investments.

The nuance dragonfire77 is missing: The time you want to borrow money is when you don't need to.  As with the story of my septic system in my previous posting, the money I borrowed is making me larger returns than the interest is costing me.  The situation you want to avoid is borrowing money to get by.  Being "house poor" is a bad place to be in life.
 
2013-06-05 01:11:05 PM  

bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?


Because it can.  High demand plus easily available loans means that there is nothing to keep the costs from rising.
 
2013-06-05 01:14:00 PM  
Education and healthcare at all levels should be free. We're the richest and most prosperous nation on earth. Please, let's continue devouring ourselves with useless war and corporate rule instead of actually doing the slightest bit of progression.
 
2013-06-05 01:16:43 PM  

un4gvn666: However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.


If that was the case why is it that tuition at privately funded universities is rising at the same rate as public schools?  Why are schools, public and private, building larger and larger financial endowments?  The facts simply don't match what you are trying to say.
 
2013-06-05 01:18:24 PM  

Insertwitty Namehere: privately funded universities


There are no such things.
 
2013-06-05 01:20:05 PM  

Tomahawk513: Student loans are just the worst things for young adults.  At the very least, we need to heavily subsidize degrees in Math, Science, Medicine, and Tech (I don't know what STEM stands for) because those degree-holders will pay the money back in the form of taxes.  Additionally, anyone working in those fields but holding a degree not in those fields should have their student loans paid off for as long as that person continues working in that field.  Encouraging growth in the major fields of innovation will benefit the individual and the country alike.


You start with all the subsidies and guaranteeing loans then costs get out of control. I don't think most people have a problem with paying for college, but tuition has to be reasonable.
 
2013-06-05 01:23:22 PM  

un4gvn666: bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?

If you listen to conservatives, it's because we're making money for education too available to young people.

However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

Hey, what a coincidence!


Why has tuition at private universities gone up? Was it the drop in federal funding from zero to zero?
 
2013-06-05 01:25:29 PM  

Insertwitty Namehere: bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?

Because it can.  High demand plus easily available loans means that there is nothing to keep the costs from rising.


I just don't buy that it's an issue with Supply and Demand.  For example, let's take the University of Toledo.   UT's enrollment fell by 5% from 2011 to 2012.  However, their tuition increased 3.03% over the same time period, it seems.  Now, they did freeze tuition for the 2013-14 school year, so 1 point for you, but a freeze is not a drop, 1 point for me.  Demand probably has an effect, sure, but I think the primary factor for tuition increases is production costs increasing due to lack of funds from the state.
 
2013-06-05 01:27:11 PM  
dragonfire77:

Depends.  If you finance a house at 5% for thirty years, you end up paying for the house about 2.5 times.  which means 30 years from now your cost base is now 2.5 times what you paid for the house just to turn a profit.

If you have a 30 year mortgage at 5% you will pay 1.9 times the number of dollars you mortgaged. You have to go up to 7.5% to get to the 2.5 times.

You're talking about absolute numbers of dollars, not net present value. The net present value of each $1 in 20 to 30 years is likely to be somewhere in the region of 50 cents today.

You're also not taking into account rent for somewhere to live (assuming your choice is not "Sleep Rough" vs "Buy House"). Even if rent does, by some miracle, stay constant it is still a cost that needs to go on the other side of the equation when deciding if buying will give a good ROI. Over the next 30 years you'll almost certainly fork out an entire house worth of rent payments, if not more, except you will not have a house you own free and clear to show for it.
 
2013-06-05 01:27:29 PM  

Insertwitty Namehere: un4gvn666: However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

If that was the case why is it that tuition at privately funded universities is rising at the same rate as public schools?  Why are schools, public and private, building larger and larger financial endowments?  The facts simply don't match what you are trying to say.


Simple. It's because those two are completely different situations.

From the Washing Post:

"Over the past decade, tuition and fees at private, nonprofit four-year colleges and universities rose 2.4 percent beyond inflation, according to the College Board. Those prices don't include charges for room, board and books. But at the same time, schools are providing significantly more grant aid for those with financial need - and in some cases, for those who are not in need."

Or perhaps you'd like to hear it from CNN Money:


"Tuition and fees climbed 4.2% at four-year private schools to an average of $29,056 this year. Overall prices were 4% higher at $43,289. But with more than 80% of students receiving scholarships or grants, the average private college student will pay a net price of about $27,600 -- a 5.6% increase from last year, the College Board estimated.

Some of the fastest rising costs on private college campuses are employee health care, insurance premiums and technology, said David L. Warren, president of the National Association of Independent Colleges and Universities. Colleges have also been investing in student services, like mental health counseling, and programs aimed at boosting graduation rates, he said."


While both public and private university tuition have been increasing, they have been increasing for fundamentally different reasons. Public universities have to make up for dramatically decreased state government subsidies, but private universities have to cover rising healthcare costs, amenities for their students, and grants and scholarships so students can actually afford to attend these universities due to the terrible economic climate we've created thanks to austerity and perpetual wage stagnation, starting with Reagan and continuing in perpetuity to this day.
 
2013-06-05 01:28:05 PM  

un4gvn666: the Washing Post


goddamnit. The Washington Post.
 
2013-06-05 01:37:35 PM  

Target Builder: dragonfire77:

Depends.  If you finance a house at 5% for thirty years, you end up paying for the house about 2.5 times.  which means 30 years from now your cost base is now 2.5 times what you paid for the house just to turn a profit.

If you have a 30 year mortgage at 5% you will pay 1.9 times the number of dollars you mortgaged. You have to go up to 7.5% to get to the 2.5 times.

You're talking about absolute numbers of dollars, not net present value. The net present value of each $1 in 20 to 30 years is likely to be somewhere in the region of 50 cents today.

You're also not taking into account rent for somewhere to live (assuming your choice is not "Sleep Rough" vs "Buy House"). Even if rent does, by some miracle, stay constant it is still a cost that needs to go on the other side of the equation when deciding if buying will give a good ROI. Over the next 30 years you'll almost certainly fork out an entire house worth of rent payments, if not more, except you will not have a house you own free and clear to show for it.


I'll concede that a house is an anomaly among 'consumer' debt.  I guess I'm referring more to the 'unnecessary' consumer debt that people have.  Credit cards, car loans, store cards, lines of credit, etc.  If you're running a business, that's one thing, but if you can't afford to pay cash for that lampshade or painting that you think would go perfectly in your house....YOU DON'T NEED IT!!!!!
 
2013-06-05 01:38:22 PM  

Tomahawk513: If you finance a house at 5% for thirty years, you end up paying for the house about 2.5 times


I included WI-level property taxes.
 
2013-06-05 01:38:42 PM  

Debeo Summa Credo: un4gvn666: bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?

If you listen to conservatives, it's because we're making money for education too available to young people.

However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

Hey, what a coincidence!

Why has tuition at private universities gone up? Was it the drop in federal funding from zero to zero?


Honestly, I don't know why private tuition has gone up, but based on this article, it's from healthcare and other costs.

As far as public universities go, it's largely, if not entirely due to a decrease in state funding.
 
2013-06-05 01:39:15 PM  

sinanju: The nuance dragonfire77 is missing: The time you want to borrow money is when you don't need to. As with the story of my septic system in my previous posting, the money I borrowed is making me larger returns than the interest is costing me. The situation you want to avoid is borrowing money to get by. Being "house poor" is a bad place to be in life.


And imagine what returns you'd be getting if you weren't paying interest on that money.
 
2013-06-05 01:40:24 PM  

Tomahawk513: Debeo Summa Credo: un4gvn666: bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?

If you listen to conservatives, it's because we're making money for education too available to young people.

However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

Hey, what a coincidence!

Why has tuition at private universities gone up? Was it the drop in federal funding from zero to zero?

Honestly, I don't know why private tuition has gone up, but based on this article, it's from healthcare and other costs.

As far as public universities go, it's largely, if not entirely due to a decrease in state funding.


Thank you.  That's exactly what the hell I've been saying in this thread, conservative propaganda to the contrary be damned.
 
2013-06-05 01:42:49 PM  

dragonfire77: It always struck me as odd that the three largest expenses in a person's life (Buying a house, Buying a car, getting married) are all expected to occur when that person is at the lowest point on their 'earnings potential' graph...and they're all expected to be financed at 'some' interest rate...

Personally, I'm a HUGE fan of teaching kids to live debt free.  Don't teach them to 'manage debt'.  Teach them to ELIMINATE it.


That's great, except the whole annual rent increase thing. I've seen some rents go up more than 20% this year, with properties changing hands and new REITs aggressively pursuing higher returns. It's what kills me: as incomes get depressed at the benefit of shareholders, the cost of basic needs like shelter and food rises. Disposable income disappears and the economy tanks. The Aristocrats!
 
2013-06-05 01:44:03 PM  

djseanmac: That's great, except the whole annual rent increase thing. I've seen some rents go up more than 20% this year, with properties changing hands and new REITs aggressively pursuing higher returns. It's what kills me: as incomes get depressed at the benefit of shareholders, the cost of basic needs like shelter and food rises. Disposable income disappears and the economy tanks. The Aristocrats!


I never said "Never finance", nor "Rent in lieu of buying"...Simply made the point that elimination of debt is better than 'management' of it.
 
2013-06-05 01:44:59 PM  
dragonfire77:

I'll concede that a house is an anomaly among 'consumer' debt.  I guess I'm referring more to the 'unnecessary' consumer debt that people have.  Credit cards, car loans, store cards, lines of credit, etc.  If you're running a business, that's one thing, but if you can't afford to pay cash for that lampshade or painting that you think would go perfectly in your house....YOU DON'T NEED IT!!!!!

Almost completely agree here, and as someone who had a pain in the ass time finding a mortgage lender due to no history of debt I have a high level of contempt for the credit industry and how far it goes to make itself as pervasive as possible in daily life.

I would say car loans aren't necessarily that bad, partly because they are often at interest rates below inflation or the payout rate from dividend paying stocks in blue chip companies and partly because a car is often a form of investment (in that it is a necessary tool for work or to get to work).
 
2013-06-05 01:45:34 PM  

un4gvn666: Insertwitty Namehere: un4gvn666: However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

If that was the case why is it that tuition at privately funded universities is rising at the same rate as public schools?  Why are schools, public and private, building larger and larger financial endowments?  The facts simply don't match what you are trying to say.

Simple. It's because those two are completely different situations.

From the Washing Post:

"Over the past decade, tuition and fees at private, nonprofit four-year colleges and universities rose 2.4 percent beyond inflation, according to the College Board. Those prices don't include charges for room, board and books. But at the same time, schools are providing significantly more grant aid for those with financial need - and in some cases, for those who are not in need."

Or perhaps you'd like to hear it from CNN Money:


"Tuition and fees climbed 4.2% at four-year private schools to an average of $29,056 this year. Overall prices were 4% higher at $43,289. But with more than 80% of students receiving scholarships or grants, the average private college student will pay a net price of about $27,600 -- a 5.6% increase from last year, the College Board estimated.

Some of the fastest rising costs on private college campuses are employee health care, insurance premiums and technology, said David L. Warren, president of the National Association of Independent Colleges and Universities. Colleges have also been investing in student services, like mental health counseling, and programs aimed at boosting graduation rates, he said."

While both public and private university tuition have been increasing, they have been increasing for fundamentally different reasons. Public universities have to make up for dramatically decreased state government subsidies, but private universities have to cover rising healthcare costs, amenities for their students, and grants and scholarships so students can actually afford to attend these universities due to the terrible economic climate we've created thanks to austerity and perpetual wage stagnation, starting with Reagan and continuing in perpetuity to this day.


Public universities aren't faced with the same costs- technology, healthcare, etc.? Bullshiat.

Please post a citation showing a decrease in federal funding for universities since Reagan to try to prove your point. Because although funding may har decreased since the recession, tuition has been going up for a long long time.
 
2013-06-05 01:46:18 PM  

dragonfire77: sinanju: The nuance dragonfire77 is missing: The time you want to borrow money is when you don't need to. As with the story of my septic system in my previous posting, the money I borrowed is making me larger returns than the interest is costing me. The situation you want to avoid is borrowing money to get by. Being "house poor" is a bad place to be in life.

And imagine what returns you'd be getting if you weren't paying interest on that money.


Well, yeah, and imagine if a magical rainbow unicorn pranced along and farted an extremely aroused Christina Hendricks and/or Channing Tatum  (I don't judge) into your lap before changing your account balance to literally, "1 bajillion Ferraris."  Point is, the guy wouldn't have that money at all if it weren't for the loan.
 
2013-06-05 01:48:14 PM  

Target Builder: I would say car loans aren't necessarily that bad, partly because they are often at interest rates below inflation or the payout rate from dividend paying stocks in blue chip companies and partly because a car is often a form of investment (in that it is a necessary tool for work or to get to work).


Yes...but.......
You don't need a brand-new one.  Financing a brand-new car is just about the dumbest farking thing imaginable. (Aside from leasing one just for the 'lower payments', of course)
 
2013-06-05 01:52:28 PM  

Debeo Summa Credo: Please post a citation showing a decrease in federal funding for universities since Reagan to try to prove your point.


I'm not going to provide a citation for a point I never made. Read my post again.

Reagan is not responsible for drops in higher education funding, he is responsible for decimating the middle class and starting the downward spiral of American wages, which is why today private universities have to provide more and more scholarships and grants for students to attend their universities.
 
2013-06-05 01:58:00 PM  

Tomahawk513: Debeo Summa Credo: un4gvn666: bikerific: Article does not address my main question, which is what is driving education costs?

Why has average tuition nearly doubled in the last 10 years?

If you listen to conservatives, it's because we're making money for education too available to young people.

However, if you listen to the heads of multiple large universities, they'll tell you that actually, it's caused by state and federal governments dropping their financial contributions to higher education year after year, thanks mostly to conservatives.

Hey, what a coincidence!

Why has tuition at private universities gone up? Was it the drop in federal funding from zero to zero?

Honestly, I don't know why private tuition has gone up, but based on this article, it's from healthcare and other costs.

As far as public universities go, it's largely, if not entirely due to a decrease in state funding.


Interesting. I'll agree that state funding cuts has contributed to increases in public university tuitions, but that looks like a small portion of the overall growth that has caused the student loan "crisis".

Per the third page of your CBS link, real average net tuition (amounts paid after grants) at public universities went up from $3,415 in 2001 to $4,546 in 2011 (33%). A material increase no doubt, but $1,100 per year is not what is causing any student loan crisis.

Also, during the same time real net tuition at private universities went up by 21%, per that same link. That could imply that about 1/3rd of the increase at public universities is due to budget cuts, while the other 2/3rds are due to other factors that are also affecting private universities.
 
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