Gifted Issues Discussion homepage Forums General Discussion go to college or no?

The "college debt bubble" and the "medical care bubble" are not true bubbles in the economic sense, which are generally driven by financial speculation in a specific product, tulips, dot-com stocks, houses, etc.

This is something different and I'm not sure what to call it.

The issue is general sovereign debt issuance and financial system stability.

The only financial instrument that I know of related to student loan debt is the "SLAB" product.

http://www.wsws.org/en/articles/2013/03/11/loan-m11.html

I could make money off of the housing bubble.

I have no idea what to do with the student loan fiasco or healthcare fiasco because I can't use standard-issue contrarian market timing, which is annoying because after the market crashed, I haven't been able to generate solid returns.

2008 was my last good year.

There are still publicly-traded companies that are going to be hurt when default rates rise. To make money off the student loan bubble, short Sallie Mae:

http://seekingalpha.com/article/277941-shorting-student-loans-the-next-major-credit-bubble

You could call it negative equity in human capital.

You can think of a B.A. as being the product. The speculators are the people who believe that they will make money if they invest in getting the product.

But now, tens of thousands (or more?) of people with the product are unemployed or discovering that their B.A. is, well, underwater. They watch their loans balloon because they can't even pay all the monthly interest on them. But this particular bubble can't burst the way that the housing and dot.com bubbles burst, because student investment debt follows people (and often, their parents) in perpetuity. They can't walk away from loans the way you can walk away from your drowned mortgage. They can't declare bankruptcy, plant the tulips, and call it a day.

This is where I am also not really sure about what's going to happen.

I think the safety net is too big, not too small. Casey Mulligan, an economics professor and columnist for the New York Times, has written a book "The Redistribution Recession" asserting that incentives not to work from expanded means-tested programs such as unemployment benefits and food stamps have hampered the recovery. His book is discussed at http://www.professorbainbridge.com/professorbainbridgecom/2012/11/the-redistribution-recession.html .

Discussing the proper role of government in areas other than education is not on-topic for this forum. Your view that people who disagree with you and do not favor a larger, more activist government are thoughtless (they "chug down this particular flavor of Kool-Aid without really considering the damage it does") is disrespectful of people who disagree with you.

The Bennett Hypothesis states the increased government financial aid causes college costs to rise http://centerforcollegeaffordability.org/research/studies/bennett-hypothesis-2 . Reducing government financial aid would cause college tuition to fall or rise more slowly, but it would also discourage middle and low income students who do not earn academic scholarships from going to college. A four-year residential college would become a place for very smart kids and kids whose parents could afford to pay the full cost. Some would describe this restriction of college attendance as elitist, but I think it is preferable to having the government subsidize through Pell grants and subsidized loans college attendance for people who do not have the scholastic aptitude for college.

So... to recap:

a) you kind of HAVE to go, at least in most fields, or you have ZERO chance of even getting through the door with any employer, (barring some other career paths like entrepreneurship or military service/training); but

b) having that bit of paper in and of itself doesn't mean that your odds are good, they are just "improved" over the alternative, and

c) the eye-watering cost has become a crushing factor in this decision.


Pretty much?

Better Colleges Failing to Lure Talented Poor-- NYT Mar 16

Related to this discussion.


Fascinating bias, there, in observations. MAYBE some of those low-income students are all too well aware of just what a gamble such an educational choice is to begin with-- and that, particularly if you come into those "career opportunities" without the network of family connections that high SES provide, you may STILL lack those opportunities that your equally capable (but better "prepared") peers will have.

I'm not sure that the calculus reflected by the graphic in this article is entirely WRONG, in other words.

The bias seems to be that OF COURSE high achieving students want to-- and should-- attend an elite college.

Well, for some families, kids are raised to believe that cost IS a factor. We're not even 'poor' by those standards and we've raised our daughter to look at this more critically.

The bottom line is that coming from her background, an Ivy diploma won't open the same doors as it will for someone from an East Coast boarding school upbringing. She doesn't have the network. She doesn't sail or golf (well, not really), she doesn't play tennis, etc. And this is with parents who have made a concerted EFFORT to get her some minimal exposure to those cultural facets because we know what it means to move in a circle that your early years never prepared you for. Well, I know, anyway. You feel gauche and awkward, and everyone around you knows it too.

I'm not sure why it is such a big deal if HG+ kids decide to go to {LocalPublicUni} rather than Harvard.

Even "not going to college" is a completely valid option for some subset of those high achieving students. Ever hear of multipotentiality? Why rack up 100K in educational debt when your first love is hands on cabinet-making anyway? Why can't a craftsperson be someone PG? I don't consider that a "waste" in the way that these authors clearly do.

I'm also not sure that I agree with their conclusion that elite colleges are "failing to reach out" to low SES students sufficiently well, or the numbers wouldn't say what they do.

Bottom line, elite schools are populated by majorities which are "elite" in the SES sense. There is a 'fit' issue here that I think is being ignored. I could have attended any one of five of those elite schools... (yes, really-- I had acceptances), but CHOSE not to do that for 'fit' reasons. I didn't want to be "that weird girl from the sticks," and a few campus visits taught me in very short order that there was a reason for high attrition among students like myself. Local Uni fit better, and was far less financially risky, to boot.

With respect to your first question, it may be because [Local Public Uni] has a greater chance of leading to complete irrelevance later in life, depending on your interests.

If you have an interests in being a craftsperson, then it's irrelevant.

So, I suppose it's good to know your area of interest.

I didn't have a meaningful choice, since, in hindsight, I wasn't going to fit either place, although I would have preferred some limited guidance with respect to dealing with people in college who were, for all intents and purposes, off their rockers.

I think that "multipotentialitiy" is generally not an issue. In life, you really only have enough time and energy to do one thing, so to speak.

HowlerKarma, have you computed the net price for your daughter at Harvard (say) vs. your state flagship using the net price calculators that each school is mandated to provde? Lots of parents and students do not take this first step.