US Economy thread

[The Hippie Satan of Hyperbole]

Fluff

Interesting stuff. Have to be honest, I never would have thought a good economy would have younger people join the workforce over college. I'll take your word on that one.

Yep. College enrollment is countercyclical. Less so at the four-year level, but most definitely at technical and other 2-year schools.

It's also why many MBA programs are struggling right now.

[lawdog77]

Fluff

Interesting stuff. Have to be honest, I never would have thought a good economy would have younger people join the workforce over college. I'll take your word on that one.

Some stats via Google: enrollment at four-year public colleges increased slightly from 2011 on.
Enrollment at 2-year public colleges decreased by 38% between 2010-2021.
Enrollment at 2-year for-profit private colleges decreased by about 59% between 2010-2021.
Enrollment at 4-year private for-profit colleges decreased by about 54% between 2010-2021.
Enrollment at 4-year public colleges increased by 15.1% between 2010-2021.
Enrollment at 4-year non-profit colleges increased by about 2.7% between 2010-2021.

https://www.collegetransitions.com/blog/college-enrollment-decline/#:~:text=Undergraduate%20college%20enrollment%20increased%20from,during%20the%20COVID%2D19%20pandemic.

[The Hippie Satan of Hyperbole]

Some stats via Google: enrollment at four-year public colleges increased slightly from 2011 on.
Enrollment at 2-year public colleges decreased by 38% between 2010-2021.
Enrollment at 2-year for-profit private colleges decreased by about 59% between 2010-2021.
Enrollment at 4-year private for-profit colleges decreased by about 54% between 2010-2021.
Enrollment at 4-year public colleges increased by 15.1% between 2010-2021.
Enrollment at 4-year non-profit colleges increased by about 2.7% between 2010-2021.

https://www.collegetransitions.com/blog/college-enrollment-decline/#:~:text=Undergraduate%20college%20enrollment%20increased%20from,during%20the%20COVID%2D19%20pandemic.

This is probably a better way of looking at it, because it lessens the impact of overall demographics you can see over the course of a decade.

https://eab.com/resources/infographic/understand-higher-education-enrollments-economic-recessions/

[Jockey]

One thing nobody has mentioned is the GI Bill. Go in the military for three years and you'll come out with a good hunk of college paid for. Or, take a Gap year or two and work. Yeah, neither is the "optimal" way of college, but both are alternatives to massive debt.

It sounds like you are fine that there are more hoops to jump through for minority and poor students. Plus, those who don't attend college provide the necessary cannon fodder for our myriad wars. The rich and elite keep the current system going for a reason.

[dgies9156]

Guys:

Thanks for the reaction. I enjoyed your perspectives and would offer these considerations:

1) Legal Counsel for Loan Documents -- Here's the bigger question -- you're entering into an agreement to repay more than $100,000 (maybe a LOT MORE) and you can't spend $400.00 for a contract attorney to read a contract? We're not talking Legs! We're talking a community based attorney who can review the terms and explain the legal niceties. And to your point, Brother TAMU, if the child isn't smart enough to know this, the parents should be. I just don't get this. I'm not a huge fan of attorneys either, but there have been times in my life where I'm glad I had one.

2) Gap Years -- OK, you're not going escape debt with a gap year, or even two. But you will reduce reliance on debt and that's a big deal. At the margin, it may make post-college life that much easier.

[The Hippie Satan of Hyperbole]

You think its reasonable to suggest that a student, often from a disadvantaged background, should spend $400 to have an attorney review student loan documentation?

How out of touch are you?

Anyway, entrance counseling is required of any student that takes out a federal student loan.

[dgies9156]

You think its reasonable to suggest that a student, often from a disadvantaged background, should spend $400 to have an attorney review student loan documentation?

How out of touch are you?

You ever heard of legal aide?

Who is out of touch? Glass houses hippie. Glass houses.

[jesmu84]

As a society, we long ago decided it was in society's best interest to pay for public school up to 12th grade.

What if we moved our thinking into the 21st century and paid for public school through 16th grade (or reasonable alternative)?

Cancel all student loans now and make public education through 16th grade "free" for everyone.

Related...I can't stand the argument that because I paid off my loans, every single other generation/student after me should have to as well

[Plaque Lives Matter!]

But, is it "fair", whatever that means, to the people who sacrificed and paid off their college debt, delaying house purchases, having a family or other things, to get the debt paid off? Or to families that saved everything they could to get their children through college and then discover they could have done it for free by borrowing to their eyeballs and let the federal government forgive the loans?

“People in the past had to suffer and sacrifice their wealth and wellbeing so therefore it’s unfair to improve a broken system for the future”

[Goose]

PLM

Would you be supportive of the student loans being forgiven and every person that paid their own way getting a check that matches the average student loan?

[lawdog77]

PLM

Would you be supportive of the student loans being forgiven and every person that paid their own way getting a check that matches the average student loan?

Do you go to the grocery store  and buy a gallon of milk for $3, but go back in a month when it is on sale for $2.75 and demand a quarter?

[The Hippie Satan of Hyperbole]

PLM

Would you be supportive of the student loans being forgiven and every person that paid their own way getting a check that matches the average student loan?

Are we applying this to all forms of assistance that the government disburses? The fact is that the federal government has a long tradition of using grants, tax breaks, etc. to form policy for the common good. Why should loan forgiveness be treated any different?

[Hards Alumni]

It's a fair question.

My concern with forgiving college loans is that the borrower entered into a legally binding contract. The borrower did so of his/her free will and agreed to the terms and conditions under which the debt was issued.

If the debt was originated under duress or the terms and conditions of the debt mis-represented, then surely relief is appropriate. That may include forgiving of the debt or revising the terms and conditions. If there is a written guarantee, for example, of a post-collegiate compensation level, then yeah, that's an outright falsehood.

But, is it "fair", whatever that means, to the people who sacrificed and paid off their college debt, delaying house purchases, having a family or other things, to get the debt paid off? Or to families that saved everything they could to get their children through college and then discover they could have done it for free by borrowing to their eyeballs and let the federal government forgive the loans?

One of the things I advocate is tightening lending standards. I honestly believe loose debt is a big reason why college costs are through the roof. The way I would recommend would be to underwrite college loans the same way commercial debt is underwritten: debt service ratios and loan to cost. The DSR is a calculation that would consider future earnings of a graduate in a field as a multiple of debt service (P&I). You set a standard below which you won't go, taking into consideration regional or national average salaries for persons with an intended degree, normalized living costs and taxes (since college debt is an after-tax expense).

The downside to this equation would be it would favor STEM and business majors. I question whether journalism could even get credit for a college education! Liberal Arts would require more down because there would be severe limits on how much a lender could lend on a liberal arts degree.

I used to think the exact same way.  I thought about it more and decided that the cost/benefit analysis to forgiving those debts would be a financial boon for the entire economy rather than lining the lenders pockets. 

I paid all my student loans, but I am absolutely of the belief that college should be freely accessible to anyone in the US without being burdened with crippling debt.

Otherwise, I absolutely agree.  It's very en vogue to say kids all need STEM degrees, but without any of the non-STEM degrees, what kind of society are we headed for? 

[Hards Alumni]

Declining enrollment by far. There are just less 18-22 year-olds, especially of students from "traditional" college backgrounds. (Which is wonderful, but it can be more costly.) Also, a good economy means a lot of students feel that they are better off entering the work-force. (And they might be.)

Elite privates will be fine.  Public flagships will be fine.  Even smaller, traditionally "liberal arts" schools will be fine as long as they show value and keep their costs in line. (So adding to their program array is very important.) 

For instance, Marquette is having an excellent year from what I understand. Their focusing on programs like engineering and nursing is really paying off for them.

But a lot of schools are desperate, especially if you don't have established "high return" programs and/or are located in the middle of nowhere. (A lot of small privates in the midwest fall into that category.) And those schools are doing some things like dangling huge, one-year awards in front of people to get them to commit and hoping they can hang onto them.

For instance, I know of one midwestern college, whom most people would know, that is contacting people who told them "no" months ago and offering them an extra $5,000 for their freshman year because their overall enrollment situation is so poor right now.

COVID relief funds have kept a number of schools open longer than they should have been. And with the demographics only getting worse, we will see a lot more closures in the coming years.

Is this school Harrison Ford's alma mater?

[lawdog77]

I used to think the exact same way.  I thought about it more and decided that the cost/benefit analysis to forgiving those debts would be a financial boon for the entire economy rather than lining the lenders pockets.

I paid all my student loans, but I am absolutely of the belief that college should be freely accessible to anyone in the US without being burdened with crippling debt.

Otherwise, I absolutely agree.  It's very en vogue to say kids all need STEM degrees, but without any of the non-STEM degrees, what kind of society are we headed for?

The lenders get their money anyway. These loans are mostly federally insured.

[Hards Alumni]

The lenders get their money anyway. These loans are mostly federally insured.

Very true, my mistake.

[TAMU, Knower of Ball]

Guys:

Thanks for the reaction. I enjoyed your perspectives and would offer these considerations:

1) Legal Counsel for Loan Documents -- Here's the bigger question -- you're entering into an agreement to repay more than $100,000 (maybe a LOT MORE) and you can't spend $400.00 for a contract attorney to read a contract? We're not talking Legs! We're talking a community based attorney who can review the terms and explain the legal niceties. And to your point, Brother TAMU, if the child isn't smart enough to know this, the parents should be. I just don't get this. I'm not a huge fan of attorneys either, but there have been times in my life where I'm glad I had one.

2) Gap Years -- OK, you're not going escape debt with a gap year, or even two. But you will reduce reliance on debt and that's a big deal. At the margin, it may make post-college life that much easier.

I'm sorry Dgies, youre not being reasonable here. I will agree that parents SHOULD be having these conversations with their kids. My experience is that most parents are unwilling or unable to do this effectively.

I'm not sure that college should be free. I'm also not sure that all student loan debt should be forgiven.  I probably come down well short of those two points. But I do believe that there needs to be more focus on the fact that a college educated (including trade school educated) population is a benefit for our nation and that makes it worthy of subsidization. I'm confident th eyes not enough of that currently.

I also hate the "fairness" argument. It's a cousin of the sunk cost fallacy. I want things to be better for those that come after me.  What the hell kind of person would i be if I demanded future generations be burdened simply because I was burdened?

[The Hippie Satan of Hyperbole]

Is this school Harrison Ford's alma mater?

No. But they're down to 750 students, about 60% of which are athletes. I think they may be OK, but they are certainly not what they used to be. But who knows these days.

[Plaque Lives Matter!]

PLM

Would you be supportive of the student loans being forgiven and every person that paid their own way getting a check that matches the average student loan?

No, why would we do that?

There should probably some factors on forgiveness including tax bracket proportional calculations, which the prior Biden plan imperfectly addressed.

“People who attended college in the 1968-69 school year paid $1,545 a year, adjusted for inflation, for tuition, fees, room, and board at a public four-year college, Elise Hammond notes at CNN. "If education costs remained in line with inflation, that number would be around $12,000 per year”

and then these generations pushed youths into it with spiraling costs.

You don’t think that even partial loan forgiveness for something that you could argue the prior generation facilitated in vicious predatory cycle should be rectified?

It will never be perfect but again, “it doesn’t help literally everyone so we shouldn’t do anything at all” doesn’t work for me. people wanting to get theirs and mad that they wouldn’t be able to is my cynical reading.

But we didn’t hear this bellyaching on the PPP loan forgiveness when you should have known the risks of running a business!

[Plaque Lives Matter!]

I also hate the "fairness" argument. It's a cousin of the sunk cost fallacy. I want things to be better for those that come after me.  What the hell kind of person would i be if I demanded future generations be burdened simply because I was burdened?

You’d be a significant portion of Americans unfortunately.

[lawdog77]

No, why would we do that?

There should probably some factors on forgiveness including tax bracket proportional calculations, which the prior Biden plan imperfectly addressed.

“People who attended college in the 1968-69 school year paid $1,545 a year, adjusted for inflation, for tuition, fees, room, and board at a public four-year college, Elise Hammond notes at CNN. "If education costs remained in line with inflation, that number would be around $12,000 per year”

and then these generations pushed youths into it with spiraling costs.

You don’t think that even partial loan forgiveness for something that you could argue the prior generation facilitated in vicious predatory cycle should be rectified?

It will never be perfect but again, “it doesn’t help literally everyone so we shouldn’t do anything at all” doesn’t work for me. people wanting to get theirs and mad that they wouldn’t be able to is my cynical reading.

But we didn’t hear this bellyaching on the PPP loan forgiveness when you should have known the risks of running a business!

I.think anyone who has paid more than what the original loan.is for should have the rest forgiven. I know many who had around 50k originally that have paid well more than that  and are still paying. Deferments and or forbearance time are killers

[Goose]

PLM

I have not really voiced my opinion on student debt forgiveness and was just wondering if you thought the people that made sacrifices to avoid student loans was due anything.

My take on the situation is that I have almost stopped caring how the government spends money. If they forgave all the debt, it would not be a top ten misuse of government money over the past 20 years imo. Now, I would hope they would have more common sense and try to find ways without footing the whole bill, but that is probably wishful thinking.

[The Lens]

No. But they're down to 750 students, about 60% of which are athletes. I think they may be OK, but they are certainly not what they used to be. But who knows these days.

Their Fieldhouse is goregeous. Was there for a HS track meet and could not beleive how nice it was. Went to UW Whitewater's a few weeks later and it felt like I was in a 3rd World country comparatively. 

[The Hippie Satan of Hyperbole]

Their Fieldhouse is goregeous. Was there for a HS track meet and could not beleive how nice it was. Went to UW Whitewater's a few weeks later and it felt like I was in a 3rd World country comparatively. 

A lot of those athletic renovations were debt financed. Which might be fine, but who knows if it is cash flowing like they expected.

[dgies9156]

I'm sorry Dgies, youre not being reasonable here. I will agree that parents SHOULD be having these conversations with their kids. My experience is that most parents are unwilling or unable to do this effectively.

I'm not sure that college should be free. I'm also not sure that all student loan debt should be forgiven.  I probably come down well short of those two points. But I do believe that there needs to be more focus on the fact that a college educated (including trade school educated) population is a benefit for our nation and that makes it worthy of subsidization. I'm confident th eyes not enough of that currently.

I also hate the "fairness" argument. It's a cousin of the sunk cost fallacy. I want things to be better for those that come after me.  What the hell kind of person would i be if I demanded future generations be burdened simply because I was burdened?

Brother TAMU:

First of all, don't apologize. If you don't think I'm reasonable, there's nothing to apologize for. I don't feel bad about it because we have a respectful difference of opinion.

Second, the burden has to fall on someone. Yeah, when I was 17, I doubt I was mature enough to have an intelligent conversation about debt with a banker. I didn't know anything, other than "debt was bad." Comes from having parents who lived through the Depression. Perhaps the way to do it is to change the disclosure. Customize it to what the borrower is borrowing for. Write the loan's language in English, not legalize.

Second, as far as free college goes, there is ample example of what happens when college is totally free. My children went to Southern Illinois University and SIU, for years, had a program called MAPP, which provided free educations to very disadvantaged youth. While it was an incredible program and some people benefitted heavily from it, the drop-out rate after freshman year at SIU for years was way too high. There's a lot of reasons for that but one was somebody gave you something for free and because you didn't have skin in the game, you didn't care.

Lenders feel the same way, which is why downpayments on real estate ALWAYS are required! You have to have skin in the game.

Finally, to your question, What the hell kind of person would i be if I demanded future generations be burdened simply because I was burdened?, the answer is a Congressman from either party!!!!!!!