"Don't borrow money for college"

‘Don’t borrow for college,’ warns Harvard-trained economist—here’s why it’s a ‘waste of money’ and ‘far too risky’

https://www.cnbc.com/2022/01/25/dont-borrow-for-college-warns-harvard-trained-economist-why-he-says-its-a-waste-of-money.html

 

Today: An (ab)used Honda.
Tomorrow: An even worse-used Chinese-made bicycle?

Yep - the way things are going... Kind of ironic that this advice comes from a professor at one of the more expensive (and justifiably famous) schools in the nation - but he's right on the money, at least according to Johann, whatever that's worth.

 

That's one way to look at it.

Another is to try to remedy a one-sided, abusive situation where the information imbalance is incredible.

Because no real forgiveness program has been put forward, by either the President or Congress, we can't really criticize it fairly, or accurately.

 

My take: pursuing a degree is more than the ROI. It's very much about who you are and will become.

 

People make this claim about every social program, but the reality is that we'd never make any progress if we weren't willing to introduce new benefits that some people don't necessarily qualify for.

Dozens of countries already provide free education and we haven't seen an epidemic of Teslas.

 

True, but it's "apples-and-Teslas," an invalid comparison. Providing free education to all who qualify for it and selectively wiping out bad decisions are not the same. Under selective forgiveness - everybody pays - but only those who (at least to some extent) created their own disaster get a benefit.

 

Free education: Reward for accomplishment (getting that far).
Selective forgiveness: Reward for messing up (whatever the reason.)

Like I said above - not the same. Not even close, IMXO. *

* IMXO (In my exalted opinion. )

 

Serious question: what's the difference? If college/university had been free in the first place, they wouldn't have had to take out those loans. If they hadn't taken out those loans, they'd be in the same (or similar) position as those who haven't had to take out any loans. Not everyone who needs loan forgiveness got a "useless" or expensive degree. (I'd wager that most fall into this category.) Sometimes, life just throws you a curveball through no fault of your own.

Most students who are now struggling with student loans probably took the best advice they had available to them at the time. It is not their fault for believing authority figures who told them that taking out huge student loans was the best (nay, only) way to make it through university and get ahead in life.

 

While I do not oppose a loan forgiveness program, I would be content with no interest on my loans. Thanks to the current forbearance, I was able to pay off all my interest and started on my principal. But I know soon the forbearance will be over. Still, I'm taking advantage of it by still making payments every month.

 

So a question… why is interest charged on Federal student loans? The Fed, which actually disperses the funds, doesn’t charge interest to the loan processing companies…

 

Sorry. As usual, your post is pretty well-reasoned, Rachel, but I still can't go along. Likely, you're a more reasonable person than I am. Not my strong suit:

(1) Multiple "if" statements. They taught me not to write computer programs with those. IF those things had happened, conclusion would be different. Yes... but they didn't. Reacting subsequent to the event can be fraught with problems.

(2) I said - if you mess up, you usually get the rewards of failure. No matter how the mess was caused. It's not logical to hand out a big financial reward that the successful folks don't get. At least not to me -- but I'm notoriously stingy. It's just not practical to do it every "time life just throws you a curveball through no fault of your own."

And as a final note: Yes, it IS unfortunate that so many people listened to those who threw the curveballs. But I still say it's a kind of reverse discrimination to do a reset for all those who swung and missed - after they've struck out.

 

The advice here is weird. Who can afford $25,000 per year out-of-pocket to study at University of Iowa? Which Ivy Plus universities offer free or low-cost certificates with grades? What's the point of earning a non-credit certificate at Yale when you'll have a degree from University of Iowa? This implies you can't get a good education at a state university. People go to schools like Yale for the networking and name. If you think you can't get a good enough education at a state university, then why go at all?

The college debt problem doesn't lie with people attending schools like Yale. Ivy Plus schools have a small percentage of college students. People are racking up debt at HBCUs, for-profit colleges, no-name private colleges, and even some podunk state universities.

How does one complete three years of college at a community college when most don't offer upper level courses?

 

Agreed totally. But what do you expect a Harvard professor to say? My take:

State school IS good. If THAT is out of reach, or you want another choice for ANY reason - then there are many good - and far less expensive - alternatives. This forum is full of them. You, sanantone, have contributed to those - often. Thank you. I just don't think this professor at Harvard has much 'street cred.' I think he's 100% right in saying you don't have to pay the earth and go to schools like his to get a good education. He's just not seen to show much specific knowledge of some really good alternatives. That's where DI comes in.

 

Even if you don't need more than 30 upper division credits, major courses at community colleges are limited. AA and AS programs often only require about 15 credits in the major, so CCs don't have to offer a large selection of non-general education courses. CCs typically design their programs to be 2+2. If you go overboard with completing a bunch of 100 and 200-level courses just because they're in your major, they may not satisfy specific course requirements at a 4-year college resulting in waste.