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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsMatt Taibbi: Ripping Off Young America: The College-Loan Scandal
Occupy Wall Street ?@OccupyWallSt
Read the amazing Matt Taibbi's new piece for Rolling Stone: "Ripping Off Young America: The College-Loan Scandal"... http://fb.me/1CzR3dbvP
http://www.rollingstone.com/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815
The topic? Student loans. Unless Congress took action soon, he warned, the relatively low 3.4 percent interest rates on key federal student loans would double. Obama knew the Republicans would make a scene over extending the subsidized loan program, and that he could corner them into looking like obstructionist meanies out to snatch the lollipop of higher education from America's youth. "We cannot price the middle class or folks who are willing to work hard to get into the middle class," he said sternly, "out of a college education."
Flash-forward through a few months of brinkmanship and name-calling, and not only is nobody talking about the IRS anymore, but the Republicans and Democrats are snuggled in bed together on the student-loan thing, having hatched a quick-fix plan on July 31st to peg interest rates to Treasury rates, ensuring the rate for undergrads would only rise to 3.86 percent for the coming year.
snip
The thing is, none of it – not last month's deal, not Obama's 2010 reforms – mattered that much. No doubt, seeing rates double permanently would genuinely have sucked for many students, so it was nice to avoid that. And yes, it was theoretically beneficial when Obama took banks and middlemen out of the federal student-loan game. But the dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It's not the cost of the loan that's the problem, it's the principal – the 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.
How is this happening? It's complicated. But throw off the mystery and what you'll uncover is a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults. 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.
(More at the link. Cross-posted from Occupy Underground.)
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joeybee12
(56,177 posts)cover a semester these days...AND I had a part-time job and essentially paid for it myself...can't do that now.
tabbycat31
(6,336 posts)That is the only way politicians will pay attention to them.
Fire Walk With Me
(38,893 posts)
Blue_Tires
(55,445 posts)SheilaT
(23,156 posts)would understand what a bad idea it is to borrow tens of thousands of dollars for college. While education and learning for itself can be a very good thing, too many young people happily major in anthropology or 17th Century French poetry or some other genuinely interesting field which has no realistic job prospects for someone with that major.
Meanwhile, there are lots of courses that can be taken a a local junior college that will lead directly to a decent job. Unfortunately, as a nation we've been totally sold on the idea that everyone should and must go to college.
I know that the colleges are themselves hugely to blame in all of this, because they say to a prospective student, "Don't worry about the cost. You can get financing." Most of that financing is in loans, not in grants or scholarships. But the students and their families are responsible for paying attention to exactly what they are doing along the way.
Myrina
(12,296 posts)
Really? 
JoeyT
(6,785 posts)Some days it's all many of us can do to tie our shoes, and we only manage that because someone that went to college showed us how. Once a guy without a degree tried to invent his own knot to tie with, but it ended badly. I still miss him.
You're either intellectually curious and/or creative or you aren't. If you are, college is a place to focus your learning. If you aren't, no amount of college is going to help.
Either way, belittling trades isn't going to build support for student loan reform.
SheilaT
(23,156 posts)Gosh, I missed that memo.
It's just that if you took the classes you thought you needed to be said creative thinker, but it turns out there's no jobs out there with that job title, maybe you'd have been better off doing the dental assistant thing, instead of being unemployed or working part time in retail with no way to pay off that huge college debt. Unless of course you can creatively think yourself out of that debt. Good luck there.
Response to SheilaT (Reply #20)
HangOnKids This message was self-deleted by its author.
Pretzel_Warrior
(8,361 posts)this bullshit that based on my socio economic situation I should just satisfy myself with becoming a licensed massage therapist or an auto mechanic after a brief trade school is so asanine.
ProdigalJunkMail
(12,017 posts)not just get through it. and community colleges offer degree programs that might be much more viable... so not so asinine.
sP
Pretzel_Warrior
(8,361 posts)I am going to pursue my MBA and partially fund it with loans. When a person has a passion and a mission, they can achieve it. Relegating people to JUCOs and trade schools when they have the desire and ability for something more is bullshit.
ProdigalJunkMail
(12,017 posts)and the job market doesn't support your desired work? how do you EVER dig out of that? you could be selecting a life of slavery. at least you are only partially paying for it yourself... i know plenty of people going just for their bachelor's degree and shelling out $40k a year just for the bachelor's! starting your life $160K+ in debt is no way to go...
sP
Pretzel_Warrior
(8,361 posts)$160K spread over the first half of a career could be acceptable. 20 years of paying = $8K per year. Not cheap but not crippling.
ProdigalJunkMail
(12,017 posts)and that kind of money is devastating if you can't get a job at at least $50K a year.
sP
OnEdit : at 4.5% (good luck on that) you get $1029 per month... at $50K a year that is over 1/3 of your take home pay.
JDPriestly
(57,936 posts)to scholarship and culture? What happens to anthropology and 17th Century French Poetry and similar fields that don't produce milk or corn or soap suds?
Did you know that Steve Jobs attended Reed College in Portland, Oregon, notorious for its liberal arts emphasis. He is an example of a person who obtained a well rounded education and studied not just how to integrate nuts and bolts with electric wires but how to integrate the personal creativity and aesthetics he had developed in his education to make really attractive products that appeal not just to the desire for products and efficiency but to the human spirit.
Undergrad students should train themselves to work and prepare themselves for the jobs available, but most jobs opening now are in the service industries, and to do them well, you need to understand people (psychology helps), sales (art and music help), communication (languages help), and how to think about the future, which is best learned, oddly enough, from history.
Liberal arts education should be COMBINED with vocational training. Students should not have to pick one or the other and indeed should not be allowed t get a degree without a good grounding in some liberal arts subjects.
Accounting degrees with no knowledge of history -- that's how we got the 2008 economic melt-down.
That course in 17th Century French poetry is where young minds learn history, how to understand different points of view (placing themselves in the mind of a different historical period) and where they develop a sense of their own values and historical and cultural position.
Anyone with a good background in liberal arts can learn technical stuff. I know so many who have done that. But once you are 30, you probably won't have the time to go back and learn about the Middle Ages or the life cycle of the bees. College is for learning more than a trade.
People can go to trade schools after college. In fact, the technical stuff you learn at a junior college may be out-of-date before you graduate.
I think that employers should do far more on-the-job training when it comes to technical skills.
Technology is changing fast. A fundamental liberal arts education is never outmoded or obsolete.
SheilaT
(23,156 posts)vast numbers of young people get degrees in fields that have absolutely no job or earning potential. They need to be thinking ahead in the first place and get the minor or the second major in something that does lead to employment. I'm not saying never take something not vocational, I'm saying never lose sight of the need to earn a living.
I'd be the first to point out that a deplorable lack of knowledge of history is in large part what's wrong with a lot of things in this country. And I've taken business courses as an undergraduate and know that a lot of what's wrong with business degrees is that the program teaches essentially that all jobs are fungible and that if you can run one business you can run any other business. In my experience that's so false it would be laughable except the scary part is that most people running this country, or running hedge funds, or running buy-out companies, actually believe that.
And unless you forget how to read at age thirty, you can always go back and read about the Middle Ages or the life cycle of bees. Really.
JDPriestly
(57,936 posts)And unless you forget how to read at age thirty, you can always go back and read about the Middle Ages or the life cycle of bees. Really.
If you have children, you won't have the time. That is especially true if you have a job that demands your attention 50 hours or more per week. Mom and dad work. Mom and dad cook. Mom and dad clean house. And the children don't want mom and dad to read or do anything but help take care of them.
Get educated first and then learn a trade or job.
Most people will have a number of different kinds of jobs over the course of their lives. What young people need to get in college is a broad base of knowledge so that they can easily move from one job, perhaps even one field to another. Learn to learn. Learn the basics of lots of things.
We need to have a lot more willingness on the parts of employers to train people in the specific jobs they will do.
It is really sad that employers require employees to make the initial investment in preparing for the employer's specific job or field. I say that because the employer usually takes no responsibility and does not share the risk of the cost of the training for a specific job or field and yet insists on having the right to fire the employee at will. The employee cannot even, in most instances, deduct the cost of his training, his investment in his future work, from his income. Only if you are taking further education of some sort is that traditionally possible.
So, employers are, in addition to paying low wages, taking advantage of the public by expecting future employees to make big investments of time and money in getting specialized training to do specialized tasks and fill specialized positions in companies but not giving anything in return.
A broad base of knowledge should precede that acquisition of specific skills. Investing a lot of money in technical training with no assurance that you will get a job that will pay the costs of your training is a foolish thing to do.
A lot of the people who can't get jobs were trained to do jobs that no longer exist. What they didn't acquire or learn are the basic skills like reading analytically, thinking critically, writing creatively and well and communicating with others about more than technical data that would enable them to learn new things easily and be flexible and creative in their employment.
I am older and can tell you that I have had numerous different kinds of jobs in different fields over the course of my lifetime. Most people now do. So it is good to have a broad, liberal arts background and then build your specialty(ies) on that. But beware of focusing too much, say, on art history or music performance. Be ready to go beyond those kinds of fields. Unless you are very lucky, stay single and can live in just the right place and/or have wealthy parents or a sponsor (or sugar daddy) ready to pay for you to live some years without any income much to speak of, you will not have a career in those fields. Be sure you get a good liberal arts background in addition to art or music or whatever. Doesn't hurt to take some business courses.
SheilaT
(23,156 posts)THEN go back and get the skills training for a job? Unfortunately, most people who incur the huge debt for a useless degree find they must work at something, anything, just to support themselves.
Yes, employers should be a lot more willing to help fund the ongoing education/training of their employees. Actually, I've known any number of places that do that, including the hospital where I currently work.
Too many kids in college tend to look on it as a four year opportunity to party. They graduate and are shocked to discover the party has ended, the financial hangover is terrible, and they're on their own.
People do manage to carve out the time to do the things they really want to do. At least that's been my observation.
Agony
(2,605 posts)is the core value of a liberal arts education. We are in a bit of a cluster fuck now because the importance of what you stated has been marginalized.
WillyT
(72,631 posts)
Myrina
(12,296 posts)... deferred them for a couple years after I graduated 'til I got a decent job & onto firmer ground and even making payments, I owe now just about as much as I did when I graduated. Thanks, exorbitant interest rates.
This, in my mind, is the "bill that I will never finish paying". Kinda like eletric/gas/water bills every month.
It's not just current college students who have been/are being financially raped by this industry.
Puzzledtraveller
(5,937 posts)Though I believe much of tuition costs go to non academic programs and expenses I do wonder. Why aren't teachers, professors at many of the universities that continue to raise tuitions on students not getting involved. I admit I do not know this issue as well as I should. I understand this pertains more to the loans but would the loans be a problem if tuition was not unbelievably expensive and constantly being raised?
JDPriestly
(57,936 posts)Last year, E. Gordon Gee, president of Ohio State University, was the highest-paid public university president, with more than $2 million in compensation. In this year's list, he was the public president with the highest base salary at $830,439 in 2011-12, up from $814,157 the previous year.
. . . .
The average public university president earned $441,392 in the last fiscal year, but there were four who earned more than $1 million despite state and local budget cuts and financially struggling public school systems.
Median total compensation increased 4.7 percent for the 2011-2012 year, according to the Chronicle of Higher Education, the weekly newspaper that collects this data annually.
The newspaper released 2010 data about private university president salaries in December. The highest-paid president on that list was Bob Kerrey of the New School in New York City, which he left in 2010. He received $3,047,703 in total compensation that year.
http://abcnews.go.com/Business/penn-states-spanier-leads-top-11-highest-paid/story?id=19151598
chimpymustgo
(12,774 posts)Professors can enjoy middle class status, making mid- to upper 5 figures, and well into 6 figures. But increasingly, the teaching burden is handled by adjuncts - who cobble together a living, making a few thousand dollars a semester.
But if you can get into the executive level - there are trips and sky boxes and all manner and sorts of compensation - not to mention salary.
Look at Janet Napolitano, Bob Kerrey, Donna Shalala, and so many more.
It's good work, if you can get it.
JDPriestly
(57,936 posts)
a la izquierda
(11,797 posts)There's fuck-all professors can do about it, especially the thousands of adjuncts who are essentially indentured servants.
Trust me when I say that professors are not the beneficiaries of increased tuition. And thousands of us mortgaged our futures for our degrees.
Skittles
(153,193 posts)our own country is against us
groundloop
(11,523 posts)Yes, the cost of college has increased tremendously. But when talking about the interest rate on student loans let's not forget that the direct government student loans (Stafford Loans etc.) will only be a small portion of a students' borrowing. Most middle class students will have to borrow a large portion from private lenders because they don't qualify for all that much in direct government loans. For the privilege of doing this they'll get to pay in the neighborhood of 8% and up, and thanks to the generosity of congress to these lenders students can never discharge that debt through bankruptcy should they ever find themselves in dire straits.
ProdigalJunkMail
(12,017 posts)BS Mathematics with Concentration on Applied Mathematics 8 semesters to graduate... $16800. the problem is that most kids want to go to the fancy university with the huge tuitions and fees so they can have club med instead of an education. The universities know this... look at the high rise fancy dorms and sports facilities they are building. it's insane... and it isn't about education; it's about lifestyle.
sP
JDPriestly
(57,936 posts)of the schools.
That leaves faculty salaries and all the other costs of the university to be paid.
Universities nowadays are run like businesses except that businesses have to deal with competition and keep prices low if they want to stay afloat.
KamaAina
(78,249 posts)that students often have to cross-enroll in two or even three different colleges, often miles apart, to get all the courses they need.
joeglow3
(6,228 posts)You shouldn't get a degree just because you enjoy it. If it pays shit wages and you will never be able to pay the costs of acquiring it, you should avoid it.
KamaAina
(78,249 posts)It was a degree in public relations. He was comparing PR to bullshit.
joeglow3
(6,228 posts)The article goes on to say:
"If the DOE had any skin in the game," says Collinge, "if they actually saw significant loss from defaulted loans, they would years ago have said, 'Whoa, we need to freeze lending,' or, 'We need to kick 100 schools out of the lending program.'"
Turning down the credit spigot would force schools to compete by bringing prices down. It would help to weed out crappy schools that hawked worthless "degrees in bullshit." It would also force prospective students to meet higher standards – not just anyone would get student loans, which is maybe the way it should be.
But that's not how it is. For one thing, the check on crappy schools and sleazy "diploma mill" institutions is essentially broken thanks to a corrupt dynamic similar to the way credit-rating agencies have failed in the finance world. Schools must be accredited institutions to receive tuition via federal student loans, but the accrediting agencies are nongovernmental captives of the education industry. "The government has outsourced its responsibilities for ensuring quality to weak, nonprofit organizations that are essentially owned and run by existing colleges," says Carey."
Wounded Bear
(58,713 posts)Nobody is really discussin why rates are so fucking high. Generally it is because profit taking is so lucrative. There are some fields that profit taking should be illegal in. Education and medicine are great candidates.
leftstreet
(36,113 posts)
Response to Fire Walk With Me (Original post)
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gulliver
(13,195 posts)As long as you can keep the grades up, college should be completely free. Also, if there are going to be for-profit colleges, they should be ineligible for federally backed student loans. For-profit colleges create huge loan default rates and are a rip-off.
