bbauska wrote:Maybe I am just better; or are we the same? You make the call...

So did you pay the full costs, or did you have any help at all. Such as was your education sponsored by an employer? If so, who was that employer?

bbauska

Maybe I am just better; or are we the same?

Because 37,000,000 million Americans are carrying debt that they require to get their education doesn't make them worse people than you. Nor does your personal circumstance that allowed you to get your education without incurring debt make you better.

Maybe your educational institution was crappy. Maybe you have access to resources most others do not.

The point is that before one begins to create personal wealth, one has to eliminate personal debt. So educational debt's rapid increase is eliminating the wealth that used to exist in the middle classes. And which was originally due in large part to free secondary education for whites, resulting from the GI Bill.
And the point is that in order to have a better chance at a higher income, a higher education is considered an important if not crucial asset. But in order to get that education a crippling debt is now incurred. This is a major structural difference in the US now, versus the 1950s and 1960s and versus its competitive nations around the world.

RickyP,
You were the one who said I was exceptional. I thought I am like everyone else. If I am like everyone else, why does many (by your numbers almost all!) not do it with little college debt?

Danivon,
I took CLEP tests, worked my way to a degree and studied my butt off while working a job. I paid the price the college asked me to pay.

https://clep.collegeboard.org/exam

ex·cep·tion·al (ĭk-sĕp′shə-nəl)
adj.
1. Being an exception; uncommon: This town is exceptional for the region in having a high tax rate.

https://www.google.com/search?q=exceptional+definition&ie=utf-8&oe=utf-8

http://dictionary.reference.com/browse/exceptional

OK, I will play your semantic game... Where did you get your definition? Please post a link. I would love to see how you define words.

The point is that before one begins to create personal wealth, one has to eliminate personal debt. So educational debt's rapid increase is eliminating the wealth that used to exist in the middle classes.

This isn't necessarily true Ricky. It very much depends on the structure of the loans taken out to fund your education. Most student debt in this country at least is taken out over a very long term at low rates of interest. As such the repayments are comparatively small for graduates who end up in a well paid job. It's perfectly possible to start building personal wealth long before you finish paying off the student loans. I'm not sure what pertains in the US but I'm guessing it isn't all that different.

Sassenach wrote:This isn't necessarily true Ricky. It very much depends on the structure of the loans taken out to fund your education. Most student debt in this country at least is taken out over a very long term at low rates of interest. As such the repayments are comparatively small for graduates who end up in a well paid job. It's perfectly possible to start building personal wealth long before you finish paying off the student loans. I'm not sure what pertains in the US but I'm guessing it isn't all that different.

The reality is a bit different. Our loans are at inflation and until quite recently were quite small. When you and I were at uni it was student loans for living costs only (tuition was free to us) and at a maximum of about £1,000 a year. And it didn't have to be repaid until earning above a certain amount, and then at nice easy chunks. So my debts were pretty easy to clear and it would not have paid me to pay them early as the interest was effectively zero in real terms.

But of course now students in England are borrowing to pay tuition of £9,000 a year, plus living expenses, meaning even on a short course, it's well over £30K of debt. the interest rates are no longer tied to inflation, but to prevailing interest rates, but are currently capped at 1.5%, making it still manageable (and again payments can be postponed based on income level). Projections for current students suggest many will never pay of their loan completely.

In the US, total student loans have been for higher amounts than ours used to be - averaging about $30,000 a couple of years ago. But the interest rates are much higher (this link suggests it's around 4.5%, and higher for some types of loan - http://www.bloomberg.com/news/articles/ ... chool-year

It was easy for me clear the £2.5-3k I had borrowed by 1995, and I was lucky with the job market at the time that after a bad time for graduates in the early 90s placements were opening up on decent training programmes. Once it was cleared I was able to start saving money for a deposit on a house. I'm not so sure it will be easy for the current generation to come out with more than ten times that amount, who will either not be earning enough to make full repayments, or earning more but paying down, to also accrue savings. Especially as it seems housing costs are going to continue to outstrip inflation and earnings increases.

sass

This isn't necessarily true Ricky. It very much depends on the structure of the loans taken out to fund your education

May 7 (Bloomberg) -- Students will pay more to borrow from the U.S. government for college costs this coming school year, with the interest rate on undergraduate Stafford loans climbing to 4.66 percent.
Interest rates for most federal student loans are pegged to the yield on the U.S. 10-year note sold at the Treasury’s auction prior to June 1. This year’s sale was held today, with the yield on the note set at 2.61 percent

Having said this, the point is that in the 50's and 60's education was free for GIs. In much of Europe secondary education is free or relatively inexpensive.
This is one reason social mobility is higher in places like Sweden .... where a university grad starts their career debt free.
Debt free is better than indebtedness you'll agree?

Dan, the loans that we took out, while admittedly much lower (mine ended up being about £7k), were structured in a way that the repayments were either nothing at all or quite a hefty chunk once you hit a certain income threshold. With me it was either zero or £130 a month with no gradations in between. The latter, although not really a big deal when compared to a mortgage payment or whatever, is still quite a lot to be paying if you're not earning much. Since I've ended up in a career in the relatively low-paid public sector it took me a long time before my earnings ever got above the repayment threshold. In theory I could still have most of my student debt, but I sort of paid it off by accident because I kept forgetting to send in the deferral forms and in the end just figured I may as well pay it anyway to get rid. The current loans are on a sliding scale so the amount you pay increases in line with your earnings. As such, in many ways they're easier to handle on a month by month basis than my loans were, albeit they'll take a lot longer to pay off.

It's obviously not ideal to make students take out loans for higher education, but ultimately free education is only free to the recipient, it still has to be paid for by somebody. Free tuition is a huge middle class subsidy (I'm using the European definition of the term here) paid for in large part out of the taxes of the working classes who never got the benefit of a university education. Would we be willing to put up with Scandinavian tax rates to fund free university education ? I tend to doubt it.

sass

It's obviously not ideal to make students take out loans for higher education, but ultimately free education is only free to the recipient, it still has to be paid for by somebody. Free tuition is a huge middle class subsidy (I'm using the European definition of the term here) paid for in large part out of the taxes of the working classes who never got the benefit of a university education. Would we be willing to put up with Scandinavian tax rates to fund free university education ? I tend to doubt it.

Americans did at one time pay more than a "Swedish level" of taxation. In the 50s and 60s. And it was in that period that the GI Bill provided many with free education. It was also that period where the large prosperous America middle class was established.
The other thing to consider is that to compare places like Sweden's taxation level, you have to add in the things Swedes get for their taxation with what Americans need to pay for as well as taxes... Health insurance for instance. There are members on this board paying $1400 a month for insurance that still has deductibles and co-payments .... On top of their tax bills..
So it is a value proposition...

But, the point still needs to be emphasized is that wealth disparity is getting larger and larger in the US. And social mobility less and less. Not so much in countries with things like health care and education as part of the basket of services paid for by general taxation.
Its really just a question about what is more effective in producing and sustaining a prosperous middle class and a healthy happy lower class. The benefits of which are a generally lower crime rate, greater social cohesion, higher employment levels etc.

That is if we agree the creation of a prosperous middle class and a healthy happy working class is a worthy goal.

I will ask a question, RickyP, if I may.

Is English a second language to you? There are grammar/spelling issues that you have gotten much better of lately, the sympathy/empathy definition, and now the exceptional/exception definition. It would help me a great deal to understand more about you and your abilities.

If English is your second language it would make a lot more sense, and I will not keep asking about where you get your definitions.

I mean no ill toward you, but I would like to learn more about you.

http://www.thefreedictionary.com/exceptional

Bbauska I can't help it that you have a limited vocabulary and a limited understanding of common use English words.
I suppose your US education is to blame.

If I had said, "You are the exception" i suppose you would have understood it better.

rickyp wrote:http://www.thefreedictionary.com/exceptional

Bbauska I can't help it that you have a limited vocabulary and a limited understanding of common use English words.
I suppose your US education is to blame.

If I had said, "You are the exception" i suppose you would have understood it better.

Snideness... Unhelpful... Jackass... (Look those up.)

BTW, thanks for the link. At least I know more about you this way, also.

Sassenach wrote:Dan, the loans that we took out, while admittedly much lower (mine ended up being about £7k), were structured in a way that the repayments were either nothing at all or quite a hefty chunk once you hit a certain income threshold. With me it was either zero or £130 a month with no gradations in between. The latter, although not really a big deal when compared to a mortgage payment or whatever, is still quite a lot to be paying if you're not earning much. Since I've ended up in a career in the relatively low-paid public sector it took me a long time before my earnings ever got above the repayment threshold. In theory I could still have most of my student debt, but I sort of paid it off by accident because I kept forgetting to send in the deferral forms and in the end just figured I may as well pay it anyway to get rid. The current loans are on a sliding scale so the amount you pay increases in line with your earnings. As such, in many ways they're easier to handle on a month by month basis than my loans were, albeit they'll take a lot longer to pay off.

Indeed, so much longer and on such a sliding scale, that they are closer to the "graduate tax" proposals than we have been before, but with the added effect that there is an actual enumerated debt that the graduate carries round for most of their working life.

(the fact that the policy seems to be worse for the taxpayer overall than the previous tuition fees policy up to 2012 does not help, either, as we are underwriting the debts and many will never be fully repaid)

It's obviously not ideal to make students take out loans for higher education, but ultimately free education is only free to the recipient, it still has to be paid for by somebody. Free tuition is a huge middle class subsidy (I'm using the European definition of the term here) paid for in large part out of the taxes of the working classes who never got the benefit of a university education. Would we be willing to put up with Scandinavian tax rates to fund free university education ? I tend to doubt it.

Is it really a 'middle class subsidy' though? The average graduate has a higher income than the average non-graduate. This means that they are paying more in taxes (income tax, national insurance, and then on to consumption taxes etc etc).

Also, I was from a working class family and got this subsidy (more so than just free tuition, but also some grant assistance for living costs because my parents' income was lower than the limit). Back then, students from higher earning families did not get grants and living costs had to be funded by themselves or (more usually) their parents. Now I guess my job and my income makes me "middle class" and I am paying higher rate taxes - and my job was obtained on the basis that I had a degree, without it I would have started on a lower wage and grade in the same company.

So, I would like to see some figures to explain how this "subsidy" you claim operated when tuition was free to students. Based on class and graduate status, what levels of overall tax were people paying back then?

And then remember that there is a converse argument that wealthy people who sent their kids to private schools were paying twice for education, in fees and in taxes, and so subsidising the rest of us (and particularly the working classes) who relied on state education. Not that it was entirely fair that those who got an expensive private education were able to get into university places that us state kids could only dream of, even though in terms of capability we were equal. But still, I would be careful about using what some call the "politics of envy" to drive policy.

The other aspect is that wider society benefits from having graduates in it. The obvious cases are medical graduates, engineering and design graduates. If we did not have them, we'd have to import them (which would mean paying a premium). the working class may resent paying taxes that might subsidise the lazy student stereotypes, but they also want to have a local GP, drive over safe bridges, have jobs in successful companies etc etc. The reality is that the skills that some (a large minority nowadays) obtain at a degree level course do benefit wider society, both in terms of direct skills and in terms of economic activity and trade. Ultimately, even if the individuals who receive it benefit most, we all gain something from an educated society.

And perhaps another tack we could take is to say that a share of the costs of higher education should be borne by those who demand graduate employees. Private and public sector jobs are often advertised or determined based on degree qualifications. Perhaps those should be tagged with a premium directly on the employer to pay towards the costs of that degree course. After all, we want them to help subsidise apprenticeship schemes for non-graduates, don't we?

And no, maybe we don't want to pay Scandinavian levels of taxes. But we oddly want to get Scandinavian levels of education out of it, and that circle is something we as a nation need to square somehow.

One danger of the current system is that it could contribute to a brain-drain. One way to escape the loans is to emigrate (so long as you don't intend to come back), as they can't lien foreign earnings easily. Sure you have a debt, but it's back in the UK and will eventually be written off, so can be ignored in Australia or elsewhere.