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The College-Loan Scandal

Soulskill posted about 7 months ago | from the all-about-the-benjamins dept.

Education 827

Matt Taibbi writes in Rolling Stone about the economics behind college tuition. Interest rates get the headlines and the attention of politicians, but Taibbi says the real culprit is "appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008." He writes, "For this story, I interviewed people who developed crippling mental and physical conditions, who considered suicide, who had to give up hope of having children, who were forced to leave the country, or who even entered a life of crime because of their student debts. ... Because the underlying cause of all that later-life distress and heartache – the reason they carry such crushing, life-alteringly huge college debt – is that our university-tuition system really is exploitative and unfair, designed primarily to benefit two major actors. First in line are the colleges and universities, and the contractors who build their extravagant athletic complexes, hotel-like dormitories and God knows what other campus embellishments. For these little regional economic empires, the federal student-loan system is essentially a massive and ongoing government subsidy, once funded mostly by emotionally vulnerable parents, but now increasingly paid for in the form of federally backed loans to a political constituency – low- and middle-income students – that has virtually no lobby in Washington. Next up is the government itself. While it's not commonly discussed on the Hill, the government actually stands to make an enormous profit on the president's new federal student-loan system, an estimated $184 billion over 10 years, a boondoggle paid for by hyperinflated tuition costs and fueled by a government-sponsored predatory-lending program that makes even the most ruthless private credit-card company seem like a "Save the Panda" charity. Why is this happening? The answer lies in a sociopathic marriage of private-sector greed and government force that will make you shake your head in wonder at the way modern America sucks blood out of its young."

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827 comments

at some point... (1)

kcmastrpc (2818817) | about 7 months ago | (#44586435)

the scales will tip... right? won't they?

I won't be alive when they do, but my kids will and God help them.

Re:at some point... (5, Funny)

Anonymous Coward | about 7 months ago | (#44586507)

They scales won't tip, but I sure will.

Her name is Candy.... please welcome her to the main stage and show her that you care guys. She really IS trying to pay her way through college!

Re:at some point... (4, Interesting)

mcgrew (92797) | about 7 months ago | (#44586553)

Meanwhile, unless I'm mistaken, kids in Europe go to college for free. Meanwhile, some are calling for that here as well. [illinoistimes.com]

[Our leaders] focus on the price of everything, without grasping the value of anything. And the value of a college education â" not only to Americaâ(TM)s youth, but most significantly to our whole societyâ(TM)s economic and democratic future â" is clearly established.

So the big question to be asking is this: Why isnâ(TM)t higher education free? Les Leopold, director of the Labor Institute, notes in a July 2 Alternet piece, âoeFor over 150 years, our nation has recognized that tuition-free primary and secondary schools were absolutely vital to the growth and functioning of our commonwealth.â

Providing free education, from kindergarten through high school, paid off big for us. Today, though, thatâ(TM)s not enough, for open access to a college degree or other advanced training is as vital to America as a high school diploma has been in our past.

Forget interest rates, young people should not be blocked by a massive debt-load from getting the education that they need to succeed â" but also that all of America needs them to have for our mutual prosperity and democratic strength.

Re:at some point... (3, Insightful)

Cius (918707) | about 7 months ago | (#44586641)

While I would have loved to receive an advanced education for free, I really don't understand what all the fuss is about. I worked my way through debt-free and received my "4 year" degree in 5.5 years by going to a state university and living a reduced lifestyle. Why can't others do the same? Why do they have to go into debt in the first place? This smells more like a problem with irresponsibility and poor life choices than some sort of systemic issue.

Re:at some point... (2)

Anonymous Coward | about 7 months ago | (#44586725)

What year was this? I went through college from 2000 to 2004, 18-21 credit hours per semester and 30 hours of network administration work per week. I still had to take out loans to make it. I do not regret it one bit, as it helped me get my degree and eventually the job I have and love now. For a white American male with no family money to speak of, there was no way to make it through without loans.

Re:at some point... (5, Insightful)

h4rr4r (612664) | about 7 months ago | (#44586839)

What year was this?

They have debt because tuition costs more than the jobs they can get pay. If you are paying $25k a year in tuition and are making 17k a year you will end up with debt.

Re:at some point... (5, Insightful)

CFBMoo1 (157453) | about 7 months ago | (#44586845)

State universities are being increasingly defunded by states who are facing budget difficulties. State universities are a nice to have for states but you can bet they'll try to defund them any chance they get. Worst of all states can dictate how much tuition state universities charge if they want state money and put a strangle hold on their staff and abilitiy to hire good professors and services for the university. The push has been towards privatization and eventual elimination of state schools thanks to state budget problems.

Re:at some point... (1)

bluefoxlucid (723572) | about 7 months ago | (#44586937)

Because they're 18 and stupid and easily fleeced when we've told them their whole lives that they need a college education.

Re:at some point... (5, Informative)

notanalien_justgreen (2596219) | about 7 months ago | (#44586963)

You're dating yourself with this comment. If you're paying full fair at most state universities, there's no way you can pay tuition and living expenses on a part-time job (even with full time in the summer). Perhaps this is possible at a community college if you work maximum hours (20/week), full-time in the summer, don't buy any new books/clothes/anything for 5.5 years.

For example - look at the University of California system, once considered the best public university system in the world, and one of the best bargains (not true anymore). They're estimating $30k / year for in-state students (including living expenses). Please tell me how you managed to make $30k/year working part time?

  http://admission.universityofcalifornia.edu/paying-for-uc/cost/ [university...fornia.edu]

Re:at some point... (3, Insightful)

Anonymous Coward | about 7 months ago | (#44586663)

Meanwhile, unless I'm mistaken, kids in Europe go to college for free.

Nothing is free. Ever.

Not education. Not healthcare.

"Free" means you're making someone else pay for it.

Whether one agrees with it or not, call it what it is.

Re:at some point... (2, Insightful)

lgw (121541) | about 7 months ago | (#44586939)

For Education, it's particularly unbalanced (depending on your tax structure), because taxing people who didn't go to college to pay for those who did it real economic unfairness.

I far prefer a system where your university gets some % of what you make in the first 10 years or so after you graduate, on some diminishing-over-time scale. Even better if it's a % of what you make beyond what the average person with no college degree makes. If a student doesn't earn more as a result of going to college, why should the college earn more?

Re:at some point... (2, Insightful)

cayenne8 (626475) | about 7 months ago | (#44586669)

I don't get the part of the article, where the author is complaining about the spending on the Athletics??

I mean, the football programs like where I went to school, MORE than pay for themselves, they prop up all the other non-revenue generating sports.

It isn't like student tuition is going to college athletics, in fact from the schools I know. the athletics are subsidizing the rest of the school...

I grew up in the south, I'm talking about schools like U of AL, LSU, the schools in MS...etc.

Is that not the way it is in other school conferences?

I'm not actually a huge sports fan myself, but c'mon if you're going to bitch, at least get the fact right on who is spending who's money where.

I agree it is atrocious what colleges are doing today...but let's be fair about the money accusations.

Re:at some point... (2)

Anonymous Coward | about 7 months ago | (#44586869)

Big sports schools that have huge fan bases and television contracts cover costs and make a profit. Otherwise, schools piss money into sports hoping to end up like them. It's a gamble for rising schools.

Re:at some point... (5, Informative)

h4rr4r (612664) | about 7 months ago | (#44586921)

Most football programs lose money. The schools you are talking about are extreme outliers.

Even in schools where the football programs make money the athletics programs normally lose money.

http://collegefootballtalk.nbcsports.com/2010/08/25/ncaa-report-shows-many-college-programs-in-the-red/ [nbcsports.com]
http://www.forbes.com/sites/stevensalzberg/2011/11/26/football-is-corrupting-americas-universities-it-needs-to-go/ [forbes.com]

C'mon if you're going to bitch at least the get facts right.

Re:at some point... (4, Informative)

afidel (530433) | about 7 months ago | (#44586679)

The reason it isn't free is that both parties pray at the alter of free market capitalism. There is a part of the Democratic party that realizes the problems but they aren't the 2-3% of the electorate that decides elections and so the party can safely ignore them (just like the true fiscal conservatives on the right). Free markets only work when there is meaningful competition and true substitute goods, in the education market neither of these things exists, cheaper schools are not seen as substitutes and price competition is minimal to non-existant.

Re:at some point... (0)

Anonymous Coward | about 7 months ago | (#44586961)

Free market? Where? Show me how "free" of a market you can have when the institutions in question are based on the standards of accreditation of public secondary schools and about half the students in the post-secondary system are in institutions that are state owned and run? Not to mention that the student loans in question are also mostly approved by government entities.

People are so fast to snap out the answer of "It's teh free marketz!!! herp!" but there aren't any free markets in the US anymore. NONE. At least not legal free markets.

Extend the low cost education to the AS / AA level (2)

Joe_Dragon (2206452) | about 7 months ago | (#44586699)

we can put more funding in to Community Colleges and make so that any other college MUST take the credits in full.

Re: Extend the low cost education to the AS / AA l (1)

ackthpt (218170) | about 7 months ago | (#44586819)

Even Community Colleges are boosting tuition and adding dubious fees.

Re:at some point... (1)

infidel_heathen (2652993) | about 7 months ago | (#44586723)

Good countries invest in the education and future of their youth, regardless of their class or background.

Bad countries send the youth of their poor to die in pointless wars in foreign countries.

Yeah, sometimes the reality is that simple.

Re:at some point... (2)

smooth wombat (796938) | about 7 months ago | (#44586917)

College is not free in Europe. The people's taxes pay for it.

There is no such thing as free except for the breaths you take. Someone, somewhere, pays for everything, whether they want to or not.

Nothing is free LOL. (0, Flamebait)

Anonymous Coward | about 7 months ago | (#44586943)

The poster writes: "The answer lies in a sociopathic marriage of private-sector greed and government force that will make you shake your head in wonder at the way modern America sucks blood out of its young."

EXCEPT THE GREED IS COMING FROM THE OBAMA ADMINISTRATION, NOT THE PRIVATE SECTOR. LOL

Re:at some point... (5, Interesting)

Anonymous Coward | about 7 months ago | (#44586945)

Yep. Here in Sweden there is no tuition. Paid for through taxes. Like the health care.

Exorbitant taxes? Nope. Most people pay something like 30%. While this is more than most pay in USA, when you add tuitions and health insurance it turns out we pay less.

Why? Because there is no billionaire middle man taking his arbitrary cut.

Yeah, socialism stinks, right?

Re:at some point... (0)

Anonymous Coward | about 7 months ago | (#44586587)

Looking at what we can now, it's expected that something very atrocious will come out of the ever increasing debt once the U.S runs out of people to borrow money from to pay back people it borrowed money from, coupled with the animosity of it's citizens one can only speculate.

Re:at some point... (4, Insightful)

hairyfeet (841228) | about 7 months ago | (#44586619)

Its already tipping as defaults are at an all time high but thanks to the changes Bush passed in 06 you can't even get out of debt with bankruptcy and that REALLY needs to change. Living in a small college town I hear of at least a couple a year committing suicide because of student loans, last year one in my own building hanged himself because they wouldn't stop hounding him over it.

That said after the student loan bubble bursts they'll be one major bubble left to pop and that's the stock bubble [youtube.com] and when that one pops colleges will be ghost towns as it'll make the depression look like a flash crash, VERY nasty and only a matter of time now, the bubble is too massive to slowly deflate.

Re:at some point... (0)

Anonymous Coward | about 7 months ago | (#44586743)

Its already tipping as defaults are at an all time high but thanks to the changes Bush passed in 06 you can't even get out of debt with bankruptcy and that REALLY needs to change. Living in a small college town I hear of at least a couple a year committing suicide because of student loans, last year one in my own building hanged himself because they wouldn't stop hounding him over it.

That said after the student loan bubble bursts they'll be one major bubble left to pop and that's the stock bubble [youtube.com] and when that one pops colleges will be ghost towns as it'll make the depression look like a flash crash, VERY nasty and only a matter of time now, the bubble is too massive to slowly deflate.

PROTIP: Run-on sentences do not make your point any clearer or more accurate. Breathe, damnit!

Re:at some point... (3, Insightful)

venom85 (1399525) | about 7 months ago | (#44586887)

Its already tipping as defaults are at an all time high but thanks to the changes Bush passed in 06 you can't even get out of debt with bankruptcy and that REALLY needs to change

This is always something that has really bugged me. Why exactly is it someone's right to borrow money and then not pay it back? If you borrowed it, you should have to pay it back. It doesn't make any sense to allow people out from under their debts that they made the conscious decision to borrow. If you don't understand the total costs, how the lending and repayment processes work, or if you don't have any solid plans for living with that debt, you shouldn't be borrowing it. Period. I don't care if it's a mortgage, a car loan, a school loan, or even your neighbor's tools. Your borrowing choices and the repayments from those choices should always be your own responsibility.

Re:at some point... (0)

Anonymous Coward | about 7 months ago | (#44586775)

Colleges and schools like most engineers are greedy bastards. We shouldn't' need loans for school if they would stop the greed and make things more affordable and a true education.

Could North Korea build a Hyperloop system? (-1)

Anonymous Coward | about 7 months ago | (#44586447)

Doing this could be well within their technological power, given the fact that some civilian losses would probably be acceptable to them in the rare event of an accident. Also, sabotage or terrorism pretty much is not a concern due to the subdued and controlled nature of their society.

Building something like this could send a huge message to the rest of the world, that DPRK is capable of large scale engineering at reasonable costs where the rest of the world (and USA in particular) stumbles over cost and logistical and legal problems, and could provide a boost to their business community and economy along with bringing them positive publicity.

I predict that within the next 3 years North Korea will start construction of a Hyperloop system, and have a working first connection within 7 years.

No incentive to lower costs (4, Insightful)

mveloso (325617) | about 7 months ago | (#44586483)

Universities have no real incentive to lower prices. Why should they? They can foist costs onto a third party.

Also, their costs keep going up - healthcare, salaries, maintenance. Their cost structure is basically fixed. The only way they can cover those is by raising tuition.

This isn't a new problem. This is a structural problem that's been pointed out many times. Why is this news?

Any union shop has the same issues.

Re:No incentive to lower costs (4, Insightful)

trandles (135223) | about 7 months ago | (#44586601)

And don't forget that government support of public universities has been cut dramatically over the years. Many large public research institutions ceased being "state supported" universities and instead became "state located" universities in the past two decades. It's only going to get worse as the tea baggers insist on deeper and deeper cuts to everything but the defense budget.

Re:No incentive to lower costs (2)

thaylin (555395) | about 7 months ago | (#44586707)

The NC university system, one of the best in the country (arguably) has been getting high year over year cuts.

wait .. wait wait...wit wait (1)

Anonymous Coward | about 7 months ago | (#44586631)

Also, their costs keep going up - healthcare, salaries, maintenance....

No one is saying different.

What they are saying is that the tuition has far outpaced those increases.

It's one thing if tuition and other "fees" increased the same rate as those costs, but at their current obscene rate?!? There's MUCH more going on than keeping up with increased costs!

That's what is outraging everyone.

Cuts have been a big problem too (2)

Sycraft-fu (314770) | about 7 months ago | (#44586893)

States want to give less money to state schools. Well, when there's less coming in from taxes they can either cut services, or raise prices. "Do more with less," is a line from uninformed PHBs and politicians, it just doesn't work that way. Many universities have done both, cut some services, and raised rates.

Sucks blood... (1)

Anonymous Coward | about 7 months ago | (#44586489)

... out of its young, out of its old, out of its middle-aged, out of foreigners. Business as usual.

LEFTIST MARXIST EXTERMIST JIHADIST S.T.O.R.Y. !! (0, Troll)

Anonymous Coward | about 7 months ago | (#44586497)

Do not believe a word of it !! Not one word !! If you do not want to become educated then go right ahead and spend your money on beer and smokes !! Higher education !! HIGHER education !! If you want cheap, lower education enroll at your community college !! I hear Taco Bell is hiring grads from those !!

Re:LEFTIST MARXIST EXTERMIST JIHADIST S.T.O.R.Y. ! (4, Insightful)

erroneus (253617) | about 7 months ago | (#44586899)

Get real. Just look at other nations and how they handle their education systems. It is precisely because there is so much profit motive involved that things are the worst anywhere in the [first] world. And the patterns are plain for all to see. It's not a "free market" compatible situation. What do I mean by that?

Simple. We talk about supply and demand as key factors in the free market. But in cases where there is unlimited demand there is massive exploitation by business unless regulation is present. Take power for example. Most states understand that power has unlimited demand and that utilities must be regulated. California and Texas went with deregulation ostensibly to increase competition and lower prices while increasing quality -- free market thought. What happened? The highest energy prices in the nation. And medical costs are another example. The system grew from a pay the provider system where multiple providers can compete for your business into one where consumers pay using "someone else's money." (The insurance system) Once medical insurance became a virtual requirement for having access to healthcare, competition all but disapepared and prices went crazy. And consumers didn't care because they paid seemingly reasonable monthy costs for something only a small percentage of people were using. (Paying for something they MIGHT need under terms which they don't understand instead of simply paying for something in exchange for something.)

The problem is that free market capitalism can never exist in its purest form because human corruption will always creep in with every form of bait and switch imaginable. They are actively redefining words, terms and expressions so people don't get what they think they are paying for. ("Unlimited"? Really?) And the same free-market people are lobbying and standing in line for their government subsidies all day long while complaining they want government out of their lives.

So you can go on trolling with your right-wing nonsense because it doesn't work any better than left-wing nonsense. Everything has practical limits in one direction or another and those limits should be defined at the point where peoples' worst natures are activated and massive exploitation begins to occur. And it's precisely the goal of preventing massive harm and exploitation which government should exist for. Obviously, this means business lobbies should be forbidden but that can't happen without a massive revolution so I wouldn't look for it to happen. But the next best thing is for people to wake up and start caring about what goes on in government at all levels. These days, most corruption is done in plain sight. People just have to look and care about it.

This is why I have an Associates' Degree (1)

intermodal (534361) | about 7 months ago | (#44586511)

I went back to school during the economic downturn, figuring a bad job market was a good time to get a degree. Wanted to finish out the bachelor's, but even with a mere year and a half at an extremely inexpensive private religious college with a full-tuition scholarship, I grew a quick distrust for the way financial system would impact my future after school. Ended up calling it at the end of a two-year.

It is very simple ... (5, Insightful)

pollarda (632730) | about 7 months ago | (#44586515)

The more they try to make college "affordable" via loans, scholarships, etc. the more the colleges and universities will raise their prices until it is just barely affordable by all participants. They want to maximize their income -- as any business does. On the other hand, if we were to cut off student loans and scholarships you can bet that the prices would plummet and they'd stop building fancy buildings named after themselves. (Some universities have exercise areas that are reminiscent of spas and exclusive health resorts than a university.) It is amazing that our parents and grandparents were able to do things like send men to the moon without plush padded seating and nicely carpeted hallways at their universities. Even so, they could still afford to get an education.

Re:It is very simple ... (5, Insightful)

steve79 (1368223) | about 7 months ago | (#44586729)

It is indeed very simple. If the government gave a subsidy of $100 to buy a car, guess now much the cost of a car would rise. There are always unintended consequences when Gov't starts meddeling. Home price bubble was from making loan interest tax deductible and keeping interest rates very low; similar thing going on in student loan arena -- stop throwing money at the colleges and the price will then stabilize and go down. *wherever* government meddles to stimulate the demand side, the prices rise. This is econ 101.

Re:It is very simple ... (2)

firex726 (1188453) | about 7 months ago | (#44586837)

I would say it's more an issue of the Government guaranteeing the loans.

No bank will give an unemployed adult, a $100k loan for a house; but for a College kid they will give them the same loan for some dead end degree with little to no earning power.

Also need to lower the demand for degrees in the private sector; they have become the new HS Diploma only you'll now be working a low wage job with tens of thousands of debt.

Re:It is very simple ... (1)

erroneus (253617) | about 7 months ago | (#44586957)

Prices ALWAYS go up when people are spending "OPM." (Other Peoples Money.) Insurance and loans are invariably considered by consumers to be other people's money and so they will spend it without a second thought. Meanwhile the people who sell things respond by maximizing their income exploiting the obvious mental weakness exhibited by the masses.

The best combination (3, Insightful)

stanlyb (1839382) | about 7 months ago | (#44586529)

Education in Japan, Work in USA, and wife from France. That's the formula for happy and well played life.

Re:The best combination (4, Insightful)

darkstar949 (697933) | about 7 months ago | (#44586571)

Education in Japan, Work in USA, and wife from France.

I'm not sure if that is sarcasm nor not. The education system in Japan is largely based upon rote memorization and is known be counter productive in terms of creativity. The United States are up there on the list of countries with the most working hours and least amount of vacation time taken.

Re:The best combination (5, Funny)

Mullen (14656) | about 7 months ago | (#44586645)

To be really happy, it should be" Educated in USA, Work in France and Wife from Japan".

Re:The best combination (0)

Anonymous Coward | about 7 months ago | (#44586745)

To be really really happy, although for only half the year, be Swedish.

Re:The best combination (0)

Anonymous Coward | about 7 months ago | (#44586929)

As a fellow Swede this is pretty much accurate. We have good education, the homogenity of Japan, a working economy, a hard-headed and pragmatic culture that any slashdotter would like, and if you fall you'll get caught and helped back up on your feet. Oh, and our tax laws are much simpler than the US.

Sure, less freedom, cold winters, a culture bording on totalitarian. But it works, it really does.

Re:The best combination (1)

firex726 (1188453) | about 7 months ago | (#44586863)

Also that rote memorization basically kills any semblance of a social life.

Eat, Sleep, Study everyday

Re:The best combination (0)

Anonymous Coward | about 7 months ago | (#44586659)

More like: Education from US Ivy Leauge, Cambridge, Tokyo University or similar large institution. Work in a large multinational. Wife from wherever you like.

Re:The best combination (0)

Anonymous Coward | about 7 months ago | (#44586779)

You think working in a country that has no minimum employment leave [wikipedia.org] is 'the best' combination?

I'm an expat currently living in a country (hint: America's hat) with universal health care, relatively cheap tuition, and a decent job market with at least two weeks of paid vacation a year. So, why the hell would I want move back to the US? Oh, right, no reason.

the real problem.. (5, Insightful)

skade88 (1750548) | about 7 months ago | (#44586543)

The states have been cutting funding to higher education for years. Costs for running a university are only getting higher. Either the university cuts programs and services or raise tuition.

That is the opposite of the real problem (1)

SuperKendall (25149) | about 7 months ago | (#44586815)

The real problem, as this article outlines, is lots of government money flowing into colleges to prop up these mad levels of tuition.

Governments are lowering funding for higher education because they are out of money. Having government pour more money into colleges that are spending to excess is called ENABLING, not solving.

Illegal collections (5, Informative)

Anonymous Coward | about 7 months ago | (#44586549)

"They called me at work, sometimes two to three times a day, doing all the stuff they aren't supposed to do: threats, et cetera," says 41-year-old Shawn FitzGerald, who owes $300 a month and says he expects to be paying off education loans into his sixties. "They told the receptionist at my job that I was in legal trouble...."

"I have been told I made the wrong decision going to college, as well as being told I was a failure, an idiot and a mooch," says Larissa, a young woman from a blue-collar town outside Chicago. "I've had ex-boyfriends that I never even lived with contacted by collection agents, my childhood friend's distant relatives contacted by them, as well as distant relatives of my own...."

See here:

Fair Debt Collections Practices Act. [ftc.gov]

When a collector breaks the law, seek legal representation. Yes, people have sued collectors and won for this kind of abusive behavior.

Re:Illegal collections (0)

Anonymous Coward | about 7 months ago | (#44586827)

If you don't even want to sue, in theory, you should be able to complain to the Dept. of Education over their practices, but in reality, Dept. of Education doesn't want to hear actual complaints, even if over illegal collection practices.

Stimulus This! (3, Insightful)

Anonymous Coward | about 7 months ago | (#44586557)

Hey OPAMA, you wanna get the country out of it's slump? Forgive student loan debt. That'll do more to boost the economy than your silly bail-outs.

I've watched tuition at my local state university go from $150/credit hour to $350/credit hour in 8 years. I have friends graduating with engineering degrees that have 30k in debt from a STATE SCHOOL. This isn't an Ivy League school, but a state university. How does that compute? And the whole time, the school itself is hiring more Administration people and getting rid of, or driving off, many of the professors.

Tuition continues to skyrocket, yet they close more sections for classes every semester. How are you going to sit there and tell me that "tuition needs another hike this semester", and "oh by the way, we're only teaching Kinematics in the Spring now, so you'll have to wait till next year. Sorry."

For lack of a better way to put it, it's horseshit.

Re:Stimulus This! (1)

Overzeetop (214511) | about 7 months ago | (#44586637)

Only if you charge it back to the universities. I'm sure as hell not going to foot the "forgiveness" bill that let all those colleges gorge on money over the past decade.

educational process should change (2)

Joe_Dragon (2206452) | about 7 months ago | (#44586559)

“I’ve been frustrated that those making hiring decisions can’t see a little further. In some formats, especially in IT, the 4 year process doesn’t work for some, especially those who have learning disabilities, “The older college system is not for all, and some people learn better on their own. It’s an antiquated system, especially in IT.”

“Schools that are based around 2 years of intensive, hands-on IT training are much better equipped than those spending on English or composition classes. That’s how you can be more flexible and keep up with the industry. Even awarding badges would make the system more relevant.”

Re:educational process should change (1)

kcmastrpc (2818817) | about 7 months ago | (#44586681)

i have 1 semester of college under my belt, I thought it was a joke - so I dropped out.

I currently make considerably more than the median average salary in the US - as a programmer.

My wife however, wants to be a school teacher - and in pursuing that dream will accumulate roughly 2 years worth of income in debt.

Re:educational process should change (1)

firex726 (1188453) | about 7 months ago | (#44586913)

Well it does differ from one industry to another, but for IT yea, 4 years of many redundant classes is not needed.

Even some car mechanics are being expected to have 4 years degrees. I could understand if you were working for the actual car manufacturer and you had to write out techinal documentation, but to follow the pictured instructions of how to replace a steering rack; 4 years is overkill.

Students have to take some of the responsibility (5, Informative)

poet (8021) | about 7 months ago | (#44586565)

I read about this all the time and wonder to myself, "Who is their right mind goes 100k in debt for school?".

Students need to take some responsibility here. You may:

* Have to go to community college for the first two years
* Have to live with mommy and daddy for a few years
* Have 6 roommates
* Have a job (yes I am aware that isn't as easy as it sounds)
* Wait a few years to attend college so you can save money
* Join the military so you can get the GI Bill
* GO TO A CHEAPER IN STATE SCHOOL!

Yes college is expensive but a lot of the time what I see is students wanting their cake and eat it too.

Re:Students have to take some of the responsibilit (1)

BigDaveyL (1548821) | about 7 months ago | (#44586617)

For all the belly aching, there is some truth to this.

I did most of this, and my parents even were able to chip in to help with my education

Re:Students have to take some of the responsibilit (-1)

Anonymous Coward | about 7 months ago | (#44586769)

Of course, most students do just fine. You only hear about the total failures who don't know how to manage their money and plan for the future, because that sells stories. Matt Taibbi likes to create controversy. Here he's taking a regular conservative attack on education and spiced it up for a youthful audience.

Re:Students have to take some of the responsibilit (0)

Anonymous Coward | about 7 months ago | (#44586871)

"Join the military so you can get the GI Bill" You just don't know how insane that sounds to most of the civilised world. Starship troopers really just is a plain description of your society.

There's more than enough resources to go around. Just sort out free education and decent accomodation for everyone. It just isn't difficult to do these days. Productivity has largely tripled since the 70's, think about it!

Re:Students have to take some of the responsibilit (0)

OverlordQ (264228) | about 7 months ago | (#44586903)

Or dont waste $40k on some Liberal Arts degree that will get you a job exactly nowhere.

College Expenses != Tuitition (4, Interesting)

0101000001001010 (466440) | about 7 months ago | (#44586573)

This article, like many others, misses an important point. Even if colleges hold their total expenditures to the rate of inflation, state support has been declining dramatically over the past decades. As a consequences students are picking up a greater share of the total expenditures through tuition. Clearly that will result in tuition rising at a rate faster than inflation.

If you want to attack wasteful college expenditures, which is a worthwhile topic, you must focus on total expenditures per unit of size (student, degree, credit hour, whatever). Looking at only the part of the expenditure financed by tuition is highly misleading. Unless we're talking about for-profit colleges. Those are sucking the lifeblood out of college-bound youth. Just look at the per degree debt levels of college loans that go to for-profits. "Among all bachelor's degree recipients, median debt was about $7,960 at public four-year institutions, $17,040 at private not-for-profit four-year institutions, and $31,190 at for-profit institutions." [http://www.asa.org/policy/resources/stats/]

Re:College Expenses != Tuitition (1)

steve79 (1368223) | about 7 months ago | (#44586843)

>> Even if colleges hold their total expenditures to the rate of inflation, state support has been declining dramatically over the past decades. As a consequences students are picking up a greater share of the total expenditures through tuition. Clearly that will result in tuition rising at a rate faster than inflation.

It isn't necessarily clear that this must result in tuition rising faster than inflation. The rise in tuition happens for the same fundamental reason the rise in any price does -- supply and demand. Too many subsidies on the demand side in the form of loans and whatnot result in schools being able to charge higher prices So the more dollars out there chasing diplomas, the more prices will rise. Cut back on loans (or otherwise curtail the flow of dollars to colleges) and the prices will go down.

Greed is good for the greedy (1)

Anonymous Coward | about 7 months ago | (#44586579)

America will continue to fall until the only way to earn a living is by being a corporate shark a la Gordon Gecko. Such people lead livestyles that are just as extreme as a basement-dwelling geek in terms of balance - the problem is, society needs harmony and a large middle class in order to prosper.

Don't restrict sharky people, you just need to make sure that the infrastructure of society is kept safe under the wing of *proper* and *positive* government. I understand if that sounds like an impossibility to North Americans but it really isn't. The path to get there might be gruelling though.

Predatory lending (1)

Jeff Peters (3013237) | about 7 months ago | (#44586581)

And we wonder why the social services sector is suffering? I interviewed students for an article a few years back and a few of them admitted they wouldn't be able to do what they wanted due to the high costs: couldn't be teachers, couldn't be social workers, wouldn't have the time to volunteer and give back and open up the centers they wanted. When I was 18 a private loan company told me I could take $50,000 a year if I needed. A year! Of course, why wouldn't they? Give away as much money as they possibly can while current laws make it impossible to ever have that debt forgiven. Going to make $25,000 a year after college? Here, take $100,000, then struggle the rest of your life with no recourse because you were an idiot at 18. Sad really.

No shit (4, Interesting)

Overzeetop (214511) | about 7 months ago | (#44586613)

I had a solid 6 years worth of state school tuition/costs in the bank by the time my daughter was 6. Now that I've still got 7 years to go, we're hovering between 4 and 5 years worth. I feel like there should be some way to invest in colleges, 'cause I'm certainly not getting that kind of ROI in the market!

*Yes - you can pre-pay for college in some states. As crazy as all get out - if you want to pre-buy 4 years of State school in Virginia for a 12 year old it will cost you MORE than if you buy it for a 16 year old. Even they know that the system is fucked.

Subsidies (5, Interesting)

Cereal Box (4286) | about 7 months ago | (#44586615)

Part of this has to do with the subsidies they add to tuition. I remember when I was in school, tuition was about $2000 per semester. One semester, they decided to jack up tuition by $400. Most of that $400 was earmarked for subsidies for lower-income students. I found out during a meeting where the chancellor announced the change that 40% of our overall tuition went to subsidies. 40%! At which point I asked:

"So you're increasing tuition to help students who can't afford tuition, because we keep raising tuition to help students who can't afford tuition?"

They just kind of shrugged that question off.

Re:Subsidies (2)

steve79 (1368223) | about 7 months ago | (#44586879)

The entire tuition bill is essentially doing what you point out. They set a sticker price they expect only a few % that can afford it to pay; to the rest they give it based on the color of your skin and other factors.

Gold Mine (4, Insightful)

bradgoodman (964302) | about 7 months ago | (#44586623)

What other industry relies on teenagers (who don't know any better) having the power to (borrow) and spend hundreds of thousands of dollars.

Cars don't cost that much. Teenagers don't buy houses. The decision-makers here are people who aren't even old (or mature) enough to drink - are completely impulsive - have no life-experience and less of a tangible "long-term" outlook - and they're actually *pressured* (by society, parents, high-school guidance counselors, etc) to go with the BEST school they can [at any cost].

What can possibly go wrong??

Tuition isn't the only thing that's inflated (1)

Anonymous Coward | about 7 months ago | (#44586627)

As a recent college graduate (liberal arts, natch) I graduated with a little under 18k in debt despite working my way through college. Why? Because the real estate investors have caught on that there's a gold rush bonanza going on where college students are. Rents within 5 miles of campus are nearly triple anywhere else in the state. After college it took nearly two years to find a steady job (what, IT without a STEM degree in the space industry? -- anything's possible). I remember getting a call from my school's alumni association asking for a donation: I laughed for a solid minute, told the stunned student my story and wished her a pleasant day. Both of my supposedly federally-subsidized student loans were sold by the federal government to private industry, one without even telling me (I only found out when a collector called me a year later to ask why I wasn't paying them back).

I'm not even a horror story. I may not be able to even afford a car with my monthly bills and buying a house is a joke I'll be telling when I'm 40, but there are people out there who are graduating with $30,000 or more in loans with absolutely no chance of getting a job in this economy (here's a hint, all the people who didn't graduate college that year are still looking for jobs) who are expected to be paying for massive government spending in the next 20 years (Medicare expansion, Social Security, the F-35, foreign military interventions) who simply will not be contributing to our economy. The "Millenials" are hopelessly fucked, and the country is just now waking up to the fact that they have utterly failed the generation that's supposed to pull their asses out of the fire. The US will change dramatically once my generation gets into power, and not in a good way. No money, no jobs, no patriotism, no country.

The Deomcratic plan (0)

MouseTheLuckyDog (2752443) | about 7 months ago | (#44586649)

There was a story about two years ago about how the federal government funded a instructional program in Illinois taught by Jesse Jackson.( Sr. )
The basic thrust of the program was to teach government workers how to convince students to maximize their student loans. The reason for this:
so that the student would find it hard to pay back loans and put pressure on them to vote Democratic to get an amnesty for student loans passed.

The easy college loans ARE the problem (1)

Anonymous Coward | about 7 months ago | (#44586653)

The problem is that the loans are government guaranteed, so there's little to no risk for the lender and makes for easily available college funding. Which means the tuition no longer has as much market forces to keep the prices reasonable, and thus go up.

You want to get tuition costs back down? Stop backing these loans, and put the risk back on those making them. Once there is a definite risk of falling enrollment, you will start to see some real downward direction of tuition costs. Since banks don't want to lose money, they may also be a whole lot less likely to lend money for some of the private universities that produce graduates with no job opportunities (and thus creating a public liability of a student with a worthless degree).

I think this is yet another case of the "Law of Unintended Consequences" where the government tries to do something to help, and ends up causing another problem.

Tell me about it. (1)

Virtucon (127420) | about 7 months ago | (#44586655)

I'm paying for college for two of my kids now and a third will be starting in a year. Trust me it makes no sense in terms of the increases and fees that colleges and universities charge. My latest annoyance with all of this are the techniques that the book publishers and the colleges are using to keep you going into the bookstore: One time use access cards for accessing online tests or other material, effectively negating the value of a used book.

Wrong Solutions to the Problem ... (0)

Anonymous Coward | about 7 months ago | (#44586675)

For some reason, we look at the problem from the perspective that we need to give enough money to these kids so that they can "afford" to go to school. Why not instead look at the root of the problem, the high cost of going to school, and see if that can be resolved?

Why, because of the other side of the coin ... we think a good education is an expensive education. You see it play out all across the country ... "We need to spend more money on education" and "class sizes are too large, we need to spend more money for more teachers". Most businesses would go OUT of business if they operated this way, and many have. But in the public sector, rather than grow more efficient and better at how we do things, we just take the easy road and try to throw more money at it. Because afterall, who will vote against money for the children? Only the evil people of course.

Until, as a country, we realize our education system is broken (and we can't just buy our way out of it), we'll never solve the problem.

Make a choice (0)

Anonymous Coward | about 7 months ago | (#44586677)

What colleges charge cannot be unfair because one can always chose not to go to that college. There are many institutions that have significant grants, making the college experience less financially crushing than the name schools. And no matter where you go, the professors will know more than you, so you'll learn things. For some professions, like law, where you go to college makes a difference, but once you get past your first job, it really doesn't matter. These days, you learn your craft on the job. When I was hiring people, I looked at college classes and grades if I had nothing else to review for a candidate, but if they had worked somewhere relevant, I would ask about their job experience. College teaches you some fundamentals and how to learn, but real expertise comes from jobs.
So go where you can afford to go and take a major that can earn you money. Paying $200K for a degree in sociology is an IQ test you failed. If a college is charging too much for what you are getting, go elsewhere. And, by the way, trade schools can teach you how to do things that can make you a lot of money; don't discount them. Not everyone belongs in college.

40 years ago (5, Informative)

Overzeetop (214511) | about 7 months ago | (#44586687)

Here's a reality check:

40 years ago you could reasonably go to school and pay for your tuition and fees by working a manual summer job. There are no jobs out there which pay a year's tuition in 3 months for untrained labor, or anything close to it today. Heck, the average starting ANNUAL salary is less than tuition/room/board for a year at practically any private university today.

Good intentions pave the road to hell (1, Interesting)

DarkOx (621550) | about 7 months ago | (#44586691)

More proof the government is always harmful. So the idea started out, hey lets make student loans so people without financial resources can go to college! The private sector does not make such loans because lets face people with no assets and mostly no credit history are no credit worthy. You need at least one of those things nominally. The private sector is right about this default rate on such loans would be so high as to make rates unfordable; there is no market.

So along comes government which can make it impossible to discharge the debt to offer loans. Sounds okay, but now you got all kinds of money running around being directed in terms of spending by people ( the young students ) who don't appreciate how hard $20K really is to come by for most us and is likely to be in their future. What they know is they don't have to think about it right now; so what does another few hundred dollars a semester matter they will likely decide.

So the schools start competing on well anything because more students is more dollars. If you are a for profit the motive is obvious, if you are non profit you reinvest get bigger and more prestigious. Ego wins every time. Rooms get bigger, mess halls get Michelin ratings, etc. The system evolves to suck up all the money.

Because college is "Accessible", though still not really "affordable" to everyone a degree becomes a requirement to sweep the floors or sell cars, so everyone must get one or be forever marginalized.

Leaving students to spend their entire young lives, and most productive periods in debt services rather than grown their personal wealth, and be forever marginalized. Why? because dear old Uncle Sam decided to muck around where he does not belong.

Its almost like someone *wants* everyone in debt...

Good point about Construction Contractros (0)

Anonymous Coward | about 7 months ago | (#44586703)

I hold degree in Architecture and CS, and worked as steel-frame(detailing) drafter.
Recently, I went to sports facility in one of the Maryland state colleges. It had Indoor track, gym, several basketball field,.......
You should have seen the Roof support at the basketball court - enormously heavy/bolted steel frame that was holding flimsy roof. I have rarely seen this heavy framing on the big projects. Why ??? Even if it was holding HVAC units, strength requirements were exceeded by multiples of 100........

Elizabeth Warren (0, Interesting)

Anonymous Coward | about 7 months ago | (#44586705)

This is why when I hear people like Elizabeth Warren talk about reducing interest rates it makes me want to puke. This woman was a professor at Harvard and got paid six figures for teaching one or two classes a semester. And these sorts of things are not restricted to private Ivy League. There are professors like this at every major university.

So the university increases tuition because it needs more professors to teach fewer courses. Parents (or the students themselves as borrowers) end up subsidizing the non-academic pursuits of these professors by paying them a full salary for part-time work. And we're supposed to cheer for one of these professors wanting drive down the interest rate so that the same premiums will cover higher principles?

Yes. It makes me want to vomit.

slow day on slashdot? (3, Interesting)

nimbius (983462) | about 7 months ago | (#44586717)

this has been well known for nearly 3 years but it doesnt really get much coverege because, well, yeah its the same on a number of levels but disasterously worse.
School loans cant be absolved through bankruptcy, they'll take them from any form of income you earn. this 'perpetuity' makes them attractive to investors because its "foolproof" and acceptable by the plutocracy because it ensures that even if you get a good education, your position results in nothing more than endentured servitude to the state in the hopes of one day living the american dream after those loans get paid off. politicians like the idea because it boosts school enrollment and kids think the whole thing is swell until they realize no ones hiring.

the most telling sign is the recent snafu about the student loan rate, which was tossed about without much bickering at all despite the fact that both sides of the house mortally detest the other. a deal was reached quickly for a number of reasons, not the least of which include another round of occupy protests but this time perhaps with violence and property damage that isnt fabricated by the news. We are by all indications keeping the ship afloat and trying not to draw too much attention to the flaming lido deck. Im not sure when its going to happen, but expect some serious shit to hit the fan when investors realize how dangerous it is to insist millions of people shuffle around with thousands in permanent debt. the fear isnt that some day the markets will crash, its that some day the kid with the biology masters working at dennys is going to pick up a molotov.

Same situation in Chile (0)

Anonymous Coward | about 7 months ago | (#44586787)

Same situation in Chile, students are fighting year by year againts.

It happened FAST too (0)

Anonymous Coward | about 7 months ago | (#44586795)

I went in-state and graduated in 1993. It was affordable for my father to pay tuition flat-out. I paid board and other expenses with occasional, extra cash gifts. I put out about $8k of my own money over the course of 3 years after returning from a drop-out.

When I hear the stories coming from some of the young people these days, I'm just *flabbergasted* at the debt they're in. INSANITY.

Student loans are not forgiven in bankrupcy. (4, Interesting)

140Mandak262Jamuna (970587) | about 7 months ago | (#44586797)

Exactly like the housing bubble. Then they gave out loans to people clearly unqualified, clearly unable to pay back the loan, low-documentation loans, no-documentation loans, interest only loans, negative amortization loans, etc etc. Now they colleges are egging on the students to assume enormous loans for useless degrees that will never get the student a job that could pay back the loan.

We should put the onus on the universities, to certify that if the student completes the degree he/she is seeking, there is at least some reasonable chance the loan will be paid back. They universities should disclose the mean and median starting salaries of the majors they are offering. Like the home loans used to have some basic rules like, "not more than 27% of gross for mortgage, not more than 34% for all loan payments, 20% down". Similar easy to grasp metrics should be made available.

But in a free market economy, if some people want to shoot themselves in their foot, there is nothing to stop them. But at least we someone should be telling them, they have a gun in their hand pointing to their feet and if they squeeze the trigger they will get hurt. Instead we are incentivising the bullet peddlers .

Mixed Feelings (0)

Anonymous Coward | about 7 months ago | (#44586821)

I have mixed feelings about the Student Loan Problem in this country. An education is a valuable thing, and the more truly educated people we have in this country, the better. However, i place most of the blame for this problem squarely on the shoulders of the students and parents who take out these loans. American's are addicted to credit and many of us want everything immediately rather than waiting for it. When you choose to take out a student loan, you should think long and hard about how you're actually going to pay it back. Especially if you go to an expensive private university and decide to major in a field with limited employment opportunities- do you really think you are going to pay back a $100k+ loan working a retail job or waiting tables (because these are the sorts of jobs many people with these degrees have)? I was lucky enough to get scholarships for my undergraduate degree (a benefit of working hard in high school and making good grades) and a fellowship for graduate school (another benefit of working hard and making good grades). I did borrow a couple of thousand dollars my last undergraduate semester, however I was able to pay it back quite quickly after graduation and once I got my first job.

I do feel sorry for people who have tens/hundreds of thousands of dollars in student loan debt- but they brought it upon themselves. I am totally against allowing student loan debt to be discharged in bankruptcy also. If you have these debts, figure out a way to pay them off. If you are considering going to college, figure out a way to pay for it as you go and don't take out a student loan.

Some context on "skyrocketing prices" (5, Interesting)

edremy (36408) | about 7 months ago | (#44586885)

Interesting since the president of the college I work at just had a letter about this in the Huffington Post [huffingtonpost.com]. One quote: "According to the College Board's 2012 study, Trends in College Pricing, the average tuition and fee rate has increased at an average of 2.44 percent at private, nonprofit four-year colleges in recent years; in fact, when one accounts for financial aid and scholarships, the average inflation-adjusted net tuition at private colleges has actually dropped by 3.5 percent over the past five years. "

Now, that's for private, non-profit schools. Public schools it has jumped substantially, but not for any nefarious reason: it's what happens when the state legislature looks for easy cuts in the budget and axes higher ed first. When I went to William and Mary back in the mid-80s, 34.7% of the budget was covered by the state. It's 12.8% now, but they're still expected to offer everything they did before (and more) as well as give discounts to in-state students. That money can come only from two places: tuition and endowment.

Endowment is an entire 'nother subject. You might have noticed a serious drop in the stock market a few years back? We (and many other schools) run a three year trailing average on endowment draw, so that's still hurting badly. Oh, and you can't get bonds or other securities with yields higher than a percent or two these days.. Couple the two and your endowment income has cratered as well.

Can we cut budgets? Sure: I started here six years ago in IT and my budget is 20% less than was when I joined. Software vendors don't care: my SPSS licensing costs have tripled in those 3 years for example, and everyone else wants their 5% a year bump. And I'm at a healthy school: I've been at ones that aren't and it's worse.

The real abuse IMHO is the loan industry. We've somehow gotten this idea that it's ok to put yourself into debt for the rest of your life for a degree. (And that debt, unlike every other kind can't ever be vacated by bankruptcy) Nobody should take out $100k of debt for any degree, and the feds shouldn't back it, much like they shouldn't back flood insurance for people who want to live on barrier islands. That may mean you don't get your dream school. Maybe it means 2 years of community college before residential. There are plenty of ways to get an education- shop for them just like you would for an phone

No pity (3, Interesting)

shuz (706678) | about 7 months ago | (#44586949)

The college I graduated with over 10 years ago posted annual 2014 tuition of $3333 x 4 years that is only 13,333. This doesn't include room and board. Yes, that is a reasonable amount of money(I lost more than this amount on paper with the 2008 housing value crash). But it isn't the life of being in the poor house that the media makes it out to be. I worked my way through school and didn't have much help from relatives. It isn't quite the party as having a free ride is, but it is still entirely doable in this day in age. I know there are a lot of universities out there that are charging 50k+ for a 4 year education. The school I went to was ranked in the top 50 of engineering schools in the US. I know I know not the top 10 but I'll live. Today's teens need to buck up, make wise decisions and be told that absolutely nothing is the end of the world until you die. If you are of sound mind and have the work ethic you have a solid chance to do whatever you want to do in life.

Australian Hecs (0)

Anonymous Coward | about 7 months ago | (#44586953)

The old Australian Hecs system although flawed was great. It was a loan for the tuition only, but it only had to be repaid if your income was raised above a certain base level of income. Essentially the repayments are an extra tax on top of your normal income tax. There is no interest apart from a rise in value of the loan with inflation so it couldn't get out of control. It made sure you only had to pay it back when you actually were earning a decent wage.

Realistic lending (1)

dala1 (1842368) | about 7 months ago | (#44586965)

There is a simple way to effectively limit student loan debt, and that is to ensure that loans are based on realistic estimates of how much a student can pay back. Kind of like every other type of loan. However, because this is so simple and obvious, it will never actually be implemented.

If you limit the amount loaned to, say 10% of average expected annual income over the 10 years after graduation (based on actual surveys of past students in similar programs, expected unemployment rates, etc), then you wind up in a situation where both schools and students are constrained by reality. Schools would be forced to bring fees back down to realistic levels, and you wouldn't have to worry about theatre majors paying down $100,000 in debt while working at Starbucks.

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