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Debts that can’t be repaid won’t be

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The Consumer Financial Protection Bureau has done a breakdown of the repayment status of the one trillion dollars of outstanding federal student loan debt (this figure doesn’t include private student loans), held collectively by nearly 51 million Americans.

Here are the numbers:

Total federal student loan debt: $999.7 billion

In repayment: $493.7 billion

In school: $146 billion

In grace period (these are people who graduated recently): $47 billion

In deferment: $122.1 billion

In forbearance: $91.1 billion

In default: $89.3 billion

Other: $9.5 billion

So only 49% of federal student loans are currently getting paid back. Another 19% aren’t being paid back because the people who owe the money are either currently in school or graduated recently. That leaves nearly one-third of federal student loans either in deferment, forbearance, or default. (A commenter notes that some and perhaps most of the loans in deferment are held by people who are doubling down on more degrees).

Matt Leichter:

I’d love to see a comparison to credit cards, but aside from class concerns, I think it’d tell us that the federal loan program has been a spectacular, embarrassing failure.

Basically, contemporary America has moved from a model of higher education in which a lot of people could afford to go to college, to one in which most people can’t. And we’re putting off the social upheaval this shift might cause by loaning people money they can’t repay.

The difference between this and a Ponzi scheme is that a Ponzi scheme is illegal.

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  • What’s driving the cost of tuition? I can’t imagine most of that money is going to the faculty.

    • The ease with which students (or their parents) can get a loan.

      • Edmund

        Agreed.

        Think of the easy loans and how it inflated the real estate market. And now everyone is mystified that the cost of tuition, also, is inflating with easy loans! AMAZING!!

    • Administration, physical infrastructure, and the loss of state subsidies are the main culprits.

    • Denverite

      I think administration and facilities are the primary drivers.

      • BruceJ

        At the public school I work at (as one of those horrible horrible administrator types who do nothing whatsoever for teaching, except keep the faculty from having to struggle with IT issues, so they can, you know, teach) state appropriations per student have gone down by something like 75% since I started working here 20 years ago. In the meantime our student population has increased four-fold. In order to maintain accreditation (let alone our high peer ranking) we’ve had to hire a lot more faculty.

        (and this in a land grant institution where the legislature has the constitutional duty to keep tuition as low as practicable)

        Some state universities in our peer group are now only 9-15% funded by actual state appropriations; at least one has considered surrendering that money and turning into a private institution.

        Yeah some of it’s taken up by ‘Vice Presidents in charge of Frippery Studies’ but honestly, most of it’s because taxpayers and their conservative pals in the Lege have decided that ‘no moar libberul collige perfessers’ is the solution to everything.

    • Hogan

      “We can’t compete for the best students unless we have:

      comfortable to luxurious student housing;

      excellent health club facilities;

      extra programs like study abroad;

      big-name big-salary faculty who may never see an undergraduate;

      etc. etc. etc.;

      lots of administrators to oversee all those things;

      and we’ll use whatever’s left over to hire some adjuncts to teach the classes.”

      That’s leaving aside the enormous but mostly one-time investments in IT infrastructure over the last twenty-thirty years.

      • Lee Rudolph

        If you think those investments in IT infrastructure were only “enormous” that one time, I invite you to sashay over to my most recent place of employment. (Granted, we [which is to say, they, thank ghod] started—at a time when my peers at middle-ranked state flagship universities were making do with Sun workstations—from DEC Rainbows. But then again, wethey did not and never will catch up with those places.) After all, once that infrastructure was in place, it had to have Administrators; and once Administrators were in place, why, they had to keep making enormously expensive expenses! some of them, even in infrastructure.

        • Hogan

          Yeah, I had a braintickle when I wrote that. Never underestimate the ability of administrators to move line items from capital to operating.

          • MAJeff

            The university council I was on at my last school came close to recommending that the school create a vice president position, but ended up suggesting a staff position. Although it never came to it, my general position is that the LAST thing any campus needs is another vice president of anything. Although student services may account for a large portion of the rise in administration, administrators for the sake of administration should NEVER be a recommendation.

      • ChrisTS

        We seem to be constantly doing IT infrastructure upgrades. This is partly due to new buildings being added and older area houses being brought into the campus.

        We also spend a lot on updating software stuff.

      • Cody

        I relate it to the insignificance of your education also. No longer is there any kind of selling point about getting your a job someplace.

        Now it’s all connections or prestige of the University. No matter how brilliant you are, you start a tier down from a Harvard grad or something like that.

    • Paul Campos

      Major drivers include spiraling physical plant and services costs (the so-called “amenities race”), huge increases in both the total number and average compensation of administrators, and at state schools cuts in relative and sometimes absolute levels of subsidization. Salaries for “superstar” professors probably play a relatively minor role, and are largely balanced out by the increasing percentage of classes taught by the adjunct precariat.

    • MAJeff

      The exponential increase in student services and campus technology have a significant role.

      • mch

        What Paul said. Having started as a professor (assistant) in 1976, I watched the spiral start. At first, schools needed to get faculty salaries out of depression-era levels (that’s how bad it was) and address deferred maintenance on ailing facilities. As faculty and administrators (and the government) picked up on the goals and enthusiasms of student protestors of “the 60’s,” many new costs were created, from funding programs like African Studies and Women’s Studies (we’re talking 80’s here) and providing students psychological and gynecological services, and faculty services like maternity (later parental) leaves and daycare, to administrative oversight of a million things (there were some real and good reasons for administrative growth, though not their growth in salaries), like new, fairer hiring and promotion procedures and the Disabilities Act.
        Not to mention the new world of desktop computers and IT, which only really got going beyond major research universities in the ’90’s.
        In the 90’s, something else was also happening. I think of it as the victory of Reagan and the right, as the capitalists became thoroughgoing corporatists. Think Clinton and DLC. No longer the monastic cell as model for the student dorms.
        It was always going to cost a lot, the progressive agenda. The questions people, not least those who styled themselves progressive, lost sight of: how to distribute those costs?

  • Basically, contemporary America has moved from a model of higher education in which a lot of people could afford to go to college, to one in which most people can’t.

    The other part of this is that employers have made a college degree a requirement for practically any job that pays more than minimum wage.

    • Anonymous

      They wouldn’t have been able to do that if the number of people going to university hadn’t ballooned.

      These are the people who should go to university:

      People who need advanced technical training, which basically means future engineers, scientists, doctors, vets, dentists etc. Not future managers. Henry Ford didn’t need a degree, and neither does any generalist corporate functionary.

      People who want to be schoolteachers.

      People who want to pursue an academic career and have a realistic shot at that (there would be fewer such posts if the universities were right-sized)

      Anyone else who is in the most intelligent 2% AND is intellectually curious and motivated to study.

      Everyone else should get vocational training relevant to their interests and realistic aspirations.

      • shah8

        **snort**

        no.

        Everyone deserves to have a decent liberal arts education, and we are very much better off for all the people who’s gone off and gotten “useless” degrees like mathematics or philosophy and went on to do other things.

        The enemy here is credentialism, which is the source of “overqualification” just as much as “underqualification”. Trade schools are better than nothing, like in Germany or maybe France, but trade schools generally do make people much more susceptible to being made redundant when the next new thing comes along, or during boom/bust cycles in certain industries, like petro-stuff. We should not make people identify with their training, any more than we should not make people identify with their work.

        Again, everyone deserves the chance to have a real education, whether they are “fit to be elite”, or not. Anything else is just repugnant condescension.

        • medrawt

          I wouldn’t be as restrictive as the list above (and below), but, especially with the edit suggested by DocAmazing, I don’t think it’s super far off the mark either.

          I had a wonderful liberal arts education – or what passes for one these days, at any rate – and if I had the means and it weren’t for the fact that eventually it would be creepy I’d still be bumming around campus taking classes on all things that piqued my interest. But I am, I’ve gathered, a rather odd specimen of humanity in this respect. I knew plenty of people at my school (selective private research U) who were basically going along to come out the other side with a diploma (or who were highly focused on the quant side and couldn’t be convinced to care about the humanities/social sciences side; although that’s the opposite of who I am, I think those folks are a little more reasonable than their inverse number).

          Deserving the chance to have a “real education,” as you style it, IS an opportunity everyone should have if it’s right for them, but I think it’s clearly not right for a lot of people, and yet it remains a barrier for entry into vast swaths of the workforce. In an ideal world (which we don’t occupy!) by high school graduation all American students would have received the kind of grounding that wouldn’t only qualify them for entry into the workforce but also (1) prepare them for serious study (2) give them enough of a taste that they can make an educated decision about whether the pursuit of a liberal arts style college experience is something to which they’re amenable.

          One of the things I question is whether the kids getting degrees in subjects like business administration at (from the snobbish perspective of the school I went to) undistinguished local institutions are being well-served by spending four years going through the local facsimile. Do all those majors really require four years of material to prepare you for the job market? And while some students will enjoy the opportunity to explore other subjects while pursuing what they think is a practical degree, many others won’t care.

          I have two cousins, both very bright and close to the top of their high school class (both also poorly prepared by high school for college). The older got a degree in finance/accounting from her local state university; college was a thing she needed to go to so she could get a decent job (like working at a bank), and basically be endured on the road to getting there. The younger, more materially ambitious, went to a small selective private university and is (much to my dismay!) going to law school this fall. She got her undergrad degree in philosophy because she found it the least uninteresting thing she tried, but her attitude was basically that college was a place to get drunk and launch towards law school. Neither of these bright young women, dear to my heart, cared about or pursued the possibilities of the liberal arts education; it wasn’t the right fit for their interests and goals, and it was just something they had to muddle through. I don’t think it’s unreasonable that for people like that, and many other sorts of people besides, there should be other viable paths to reasonable careers.

          • shah8

            Newsflash: Young People are Young and Stupid Sometimes.

            Very few of them ever really appreciate a good education at the time (unless they desperately knew that they needed it), and nobody should confuse the ennui of well-off kids for general unsuitability of any sort of rigor.

            • Medrawt

              I don’t think that’s really responsive to what I’m saying; you seem to be arguing that since you can’t depend on kids to know what’s best for them, all students should not only have the opportunity to attend but actually should be made to attend a four-year liberal arts college; I just don’t think that’s a realistic assessment of what’s best* for many people. I wouldn’t dare guess at a percentage. But it doesn’t feel tendentious to me to suggest that lots of people aren’t intellectually curious or desirous of education as a good in itself. It’s a barrier that, in SOME cases, has been erected rather capriciously in front of a lot of possible careers.

              The kids I went to school with could possibly be accused of having the ennui of well off kids, though many of them seemed pretty serious about their real goals to me, but that’s not, e.g., my cousins, whose parents didn’t go to college, both of whom basically resented college as a series of arbitrary hoops they had to jump through.

              * “Best” in a world where you wouldn’t need a college degree to qualify you for work that in no way depends on skills which can only be attained in college. In that world high schools – the one my cousins went to was pretty shitty – would also be much better.

              • shah8

                Slicing through all that, do you really think your cousins would have any better of an attitude in welding school? Or just being able to choose any trade school, let alone feel fulfilled?

                Moreover, if we actually *had* trade schools and serious vocational tracks, what do you think the chances are, given how such programs work, that your cousin, were they intellectually able to, try to avoid being put in such tracks, and still go to college, and *still* be unfulfilled?

                • Medrawt

                  My point isn’t that my cousins (or most people) have better options as things actually are. I would be suspicious of anyone who tells a kid without a clear, viable, worthwhile alternative NOT to go to the best four-year college they can get into. But I think the environment that requires that is a bad one, because I think it creates an enormous (and costly!) mismatch between the kinds of educational opportunities and tracks available to kids and the actual needs of both students and employers. Employers being who I ultimately blame, for using a four-year college degree as a sorting mechanism rather than a meaningful credential. If I were the King of America and could do whatever I wanted I think you need to improve from the ground up, starting with kindergarten, but at the other end of the process … I’m 30. I’ve had two jobs since graduating from college, neither of which I could have qualified for without a college degree, neither of which in practice expected me to walk in the door with a skill I didn’t already have at 16; everything else was learned on the job*. That works out fine for me, but it’s a ludicrous situation.

                  *Although I have joked that colleges should offer an elective cluster of courses named Look, You’re Going to Have a Boring Office Job. You’d take remedial writing if necessary, some statistics, some accounting, intensive Excel training, maybe a crash course in SQL. Hell, maybe lots of colleges do. My dad kept trying to get me to take an accounting course and I kept trying to tell him that my school’s economics dept. didn’t offer the sort of thing he had in mind. The disconnect between the Ivory Tower and East Jesus State Tech runs along multiple tracks.

          • mch

            I think of two things in reading your comment. First, my husband and many people I know through him who teach at a state college where business majors (e.g.) have to take Gen Ed courses in a complex distribution scheme. Who knows what effect some of these courses have on some, maybe many of these students, if not at the time, over time? Some important effects, I am pretty sure.
            I think also of my well-educated mother, born 1918, when she would engage the young man or woman in the check-out line at the supermarket (she got friendly with everyone, knew about them and cared), and ask about the courses they were taking at local second and third tier colleges. Her interest in their literature or history or philosophy courses sent any of them a message, but for some, it was a lifeline. “Have you read Henry James?” I do remember one eager young working-class man asking my mother excitedly in a NJ supermarket checkout. When was that? the 1960’s, maybe?

            • Medrawt

              I hope the effects of being forced to go through a Gen Ed distribution scheme turn out to be salutary. I knew more kids in college who enjoyed the thing than ones who resented it. (And I’m still too close to college myself to be able to reflect back with any great wisdom.) I just think there are a lot of folks who are clearly not terribly well suited to the ideal of the liberal arts education, by temperament, and I think it’s silly that that’s the only hoop we let you jump through. (I also think that part of the problem here is kids coming out of high school who are utterly unprepared to really attend a good college, one effect of which is that they *haven’t* had some of the exposure to all those things already.)

              It’s impossible in the current world to extricate class from education, but my observations are the furthest thing from suggesting that supermarket cashiers shouldn’t be interested in Henry James – my mother was an immigrant who came, educationally and otherwise, from basically nothing as far as this country is concerned, who once told me “until I was 18 I wasn’t aware that literature existed,” and who wound up getting a Masters in Romance Language and Literature from Harvard. Not everyone in my family has that same spark, though.

        • I love that Hayek quote that Corey Robin alerted me to: “There are few greater dangers to political stability than the existence of an intellectual proletariat who find no outlet for their learning.” Since there are few things I want less than Hayek’s vision of political stability, I consider this among the best possible reasons to educate the masses.

          • MAJeff

            Yeah. I’m still trying to think of any reasons why we should take such misanthropic fucks seriously.

          • Ted

            The man who has gone through a college or university easily becomes psychically unemployable in manual occupations without necessarily acquiring employability in, say, professional work…. All those who are unemployed or unsatisfactorily employed or unemployable drift into the vocations in which standards are least definite or in which aptitudes and acquirements of a different order count. They swell the host of intellectuals in the strict sense of the term whose numbers hence increase disproportionately. They enter it in a thoroughly discontented frame of mind. Discontent breeds resentment. And it often rationalizes itself into that social criticism which as we have seen before is in any case the intellectual spectator’s typical attitude toward men, classes and institutions especially in a rationalist and utilitarian civilization. — Schumpeter, _Capitalism, Socialism, and Democracy_, pp. 152-153

            • Johnny Sack

              Huh? My college-educated father walked away from a white collar executive -track job to have more control over his life. Started out as a drywall guy and then carpenter, and then a general contractor. Never made as much money as he could have, but he was a happy, well-read and intellectually curious fellow. It is woefully inaccurate that he became psychically unemployable in a manual occupation by virtue of his college education. But essentializing manual labor and blue collar workers is easier than actually thinking I guess.

            • ChrisTS

              Heavy shades of Burke in there: the ‘monstrous lie’ of equality that makes the lowers discontented.

        • BoredJD

          Everyone deserves a chance, but not everyone is ready or willing to be shuttled off to semi-adult away camp at age 18. The best learning is self-motivated.

          We really need to separate the credentialing and socializing aspects of higher education from the actual education aspect. MOOCs can help do this.

          • Unemployed Northeastern

            I would be more hopeful about MOOCs if 2 of the 3 main providers (Coursera, Udacity) were for-profit corporations backed by extremely avaricious venture capital firms, who insert “we reserve the right to charge tuition at anytime” in their contracts with partnering universities. Believe me, most of the MOOCs are just a ploy by VC’s to offer low-cost, high-margin, mostly meaningless TV shows masquerading as tuition in a bid to eventually get a piece of that sweet, sweet student loan money. Naturally, the Department of Education is bending over backwards to get these MOOCs eligible for federal student loans.

            I have written about these trends often and at length over at the Chronicle of Higher Education and Inside Higher Ed.

          • The Wrath of Oliver Kahn

            MOOCs can help do this.

            As they (the MOOCs, I mean) exist now, this is only true for the most self-motivated of students. Someone who isn’t highly driven to actually tease some education out of a MOOC setting isn’t going to get much out of it, because the MOOCs don’t ask much from their students. So I guess I’m skeptical how they can help.

      • Shorter Anymouse: Every 17 year old must know his or her place and exactly what he or she wants to be when he or she grows up. Unless he or she has a couple of vaguely defined qualities in which case study for study’s sake is perfectly OK.

        Even in the threads about education, the dumbshittery is thick.

    • Philip Arlington

      They wouldn’t have been able to do that if the number of people going to university hadn’t ballooned beyond reason or the common good.

      These are the people who should go to university:

      *People who need advanced technical training, which basically means future engineers, scientists, doctors, vets, dentists etc. Henry Ford didn’t need a degree, and neither does any generalist corporate functionary.

      *People who want to be schoolteachers.

      *People who want to pursue an academic career and have a realistic shot at that (there would be fewer such posts if the universities were right-sized),

      *Anyone else who is in the most intelligent 2% AND is intellectually curious and motivated to study.

      Everyone else should get vocational training relevant to their interests and realistic aspirations.

      All of the reasons to increase university attendance beyond what I have outlined are bad. In the US, perhaps the fundamental motivation is to maintain the fantasy of the American Dream (while actually betraying it), while here in Europe disguising youth unemployment plays a greater role. In both cases the over-influation of university attendance suits politicians because it creates statistically measurable policy achievements, but they are spurious achievements.

      • DocAmazing

        Anyone else who is in the most intelligent 2% AND is intellectually curious and motivated to study.

        Corrected to eliminate egotism.

      • wjts

        Yes, things are very bad here in Europe. Where you live. And I also live. Here in Europe. Where we live.

      • Pip darling, you would look less of a tool if you had just said “That was me” for your Anonymous comment, rather than repeating it with asterixes.

        Not much less of a tool, because it’s you, but still.

  • Denverite

    This is mostly just a quibble, but aren’t the deferment people mostly those who borrowed money in undergrad and are now in a grad program? If so, I’d characterize them more like the “in school” crowd than the forebearance and default crowd.

    • You can get a deferment for a number of reasons. Having a child under the age of 2 (I think?) is one.

      • Denverite

        Hence “mostly.”

        Maybe I’m wrong. But I bet most of the deferment people are those in grad school.

        • Karate Bearfighter

          Unemployment — official unemployment, where you have applied for UC — and demonstrable economic hardship also get you a deferment.

          • blm

            Way back in the 90s, I was employed ft and still qualified for 2 six month deferments on my Staffords.
            Over the next ten years, I sent about $45K to a combo of Sally Mae, FDLP, and my alma mater. (The private loan from the university had the worst interest rate and
            offered no postponement options.)

      • Lee Rudolph

        Does “sole surviving son” still work?

  • c u n d gulag

    Time to break out that Trillion Dollar coin?

    The cost of college has risen so far above the rate of inflation, that it’s almost as if it was planned in order to bring back what this country used to have – an economic system where only the children of the rich could afford to go to college.

    The current system, in this economy, is ridiculous.

  • Steven

    What is IBR considered? For at least some people, the payments don’t cover the interest. So is that debt in forbearance or repayment?

    • Paul Campos

      I believe somebody who is in active repayment in IBR isn’t considered in forbearance even if the payments don’t include any principal. In any event less than two percent of people with federal student loans are currently enrolled in IBR, although the percentage is going to go way up, especially as debtors become eligible for PAYE.

    • Unemployed Northeastern

      It’s considered active repayment. Just watch out for missing paperwork as your student loan administrator (probably not the same group as your student lender) changes hands every 12 to 15 months; the negative amortization, and of course the nice tax bill when/if you make it to loan forgiveness in a few decades. But I rather imagine that the first time the Republicans get both houses of Congress and/or the presidency, IBR/PAYE is gone in a flash. Because it is super-expensive ($190 billion through 2020, according to Barclays), because it is ineffective (it lowers the average student loan payment by like $30/month), and because Ayn Rand, entitled Millennials, Horatio Alger, neo-Calvinism, bootstraps, etc.

  • UserGoogol

    I wouldn’t really think of that it that way. Debts that aren’t repaid aren’t repaid, so we’re just switching from one system of subsidizing tuition to another far less efficient one. So eventually we’ll all realize it’s unworkable and we’ll switch back to an efficient method. Income Based Repayment certainly seems like a good reform in the direction of forgiving debt beyond what people can afford, at least.

    • shah8

      Reforming bankruptcy laws away from creditor friendliness would do a better job.

      • Edmund

        Gee, now I feel silly.

        I’m the one that busted my ass to pay back my student loans.

        • Malaclypse

          Not even pretending to be British anymore, Jennie dear?

        • notanyuse

          All it took was busting your ass? “Silly” isn’t the word. “Lucky” is.

          • Malaclypse

            Peddling is a sort of busting, isn’t it?

            • Sex for pay on a tricycle is exceptionally difficult.

              • BigHank53

                I tried charging more, but you’d be surprised how small the client base really is.

              • Lee Rudolph

                When shah8 and Edmund are having such a nice playdate, it’s otiose to be a third wheel.

          • Edmund

            “Silly” isn’t the word. “Lucky” is.

            Luck is what happens when preparation meets opportunity…

        • The Wrath of Oliver Kahn

          Yeah, well, not everything is about you, Jennie Dearest.

  • Another Anonymous

    Is there any reason to imagine the stats are materially different for private student loans?

    • Unemployed Northeastern

      Default/delinquency rates are likely much higher, because most lenders don’t offer forbearance/deferment/economic hardship periods. On the *bright* side, though, the SLABS market (Student Loan Asset-Backed Securities) has survived the recession better than other ABS classes, BECAUSE of the nondischargeability of private student loans, and Sallie Mae had more than 15x the number of buyers as it did supply for its most recent batch of SLABS originations. Um, yay?

      Professor Campos, wouldn’t it make sense to assume that law school students in the pre-GradPLUS days were the largest borrowers of private student loans? For that matter, don’t the ~200 accredited law schools collectively own the non-profit law/grad/medical school lender Access Group? And didn’t Access Group itself originate more than $11 billion in SLABS during the glory days of 2000 through 2008? What happened to all that money?

  • RTR

    I sometimes put my federal law school loan into forbearance for 12 months because the interest rate is 2.5% and locked for 30 years, and I prefer to use my excess funds to pay down my 4% mortgage. That 4% is in theory deductible, but with the AMT and my high state taxes, really only part of it is. The process of getting a forbearance takes about 90 seconds online and was always approved instantly.

    These days I am paying it back because even 2.5% is a high rate compared to the safe returns I can get elsewhere. But I am not at all a default risk and will pay back my entire balance at some point, probably in the 2040’s.

    • Twopoint Five

      2.5%?!

      Wow. When did you get that rate?

      • rar

        Everyone borrowing from the Direct Loan program got under 3% in the early 2000’s and late 90’s. The trick was to consolidate and lock in the rate for 30 years, which people graduating 2001-2005 all could do.

      • ChrisS

        I’m at 3% fixed.

        Never thought of putting them into deferment to knock down the mortgage a bit more.

        Thanks for the idea.

  • This is tangential, but the building I work in is in Busia Quadrangle. Kofi A. Busia was like Wilson a good example of why academics make lousy presidents. Despite having been a sociology professor in Leiden and Oxford for a decade he seemed to have no understanding of students. As president from 1969 to 1972 one of the things he did that earned him opposition was to convert all of the student grants into loans. A situation that has remained permanent. Until Busia was elected university education was free in Ghana. As a result almost all the students here supported the 1972 coup that overthrew him. Busia also believed in “dialogue” rather than sanctions against the apartheid regime in South Africa, deported over 500,000 “Nigerians” many of them born in Ghana of parents born in Ghana, and devalued the Cedi by over 40%. Someday, I hope they change the plaque in the quadrangle to Nkrumah Square.

    • Hogan

      I would sign that petition.

    • PaulB

      If you think that Nkrumah represented what Ghana and Africa in general needed in order to prosper, the quality of education in Ghana should make us weep. When Ghana became independent in 1957, it had a higher GDP per capita than South Korea. Free education for the elite at colleges when primary and secondary education was sparse? Maintaining an overvalued currency for the benefit of the wealthy who consume imports while harming producers such as the cocoa farmers?

      • I think you need to look at the dates involved here. Nkrumah was overthrown in a military coup backed by LBJ on 24 February 1966. Busia was in power from 1969 to 1972. So any problems that Ghana had when Busia came to power would have been the result of five years of military rule not Nkrumah.

        • Oops I meant three years of military rule. Although I don’t know why free university education and a strong Cedi to pay for the huge amount of necessities that had to be imported at the time such as oil would be viewed as bad things. Also South Korea was one of the poorest countries in the world in 1957 so of course Ghana was richer then.

  • jim, some guy in iowa

    thirty years ago Springsteen sang about people with “debts no honest man could pay” and the only thing that’s changed is the color of the collar

  • Linnaeus

    Paying back my debt is going to be so. much. fun.

    • MAJeff

      I’m totally enjoying the fuck out of it. I’m sure the economy is enjoying my lost purchasing power.

      • Edmund

        Jeff,

        It’s also the right thing to do. You’re one of the few people here that have mentioned actually PAYING back the money you borrowed.
        Hey, it ain’t fun and it’s not convenient, but the money was there when you needed it, the interest is cheap and when you pay it back, someone else can get a loan.

        • Twopoint Five

          “the interest is cheap”

          Ha.

  • so?

    do these data call into question the projections that show loans as a moneymaker for the govt, or will the govt still make good money even with numbers like these?

  • BigHank53

    As soon as Wall Street figures out how to collateralize futures on organ transplants, all those unemployed (and unemployable) grads will have no problem refinancing those loans at very attractive rates. Jamie Dimon’s liver isn’t going to last forever, you know, and there are tens of thousands of underutilized livers sitting around….

    What could possibly go wrong?

    • sparks

      The newest homeless shelter – Lobes and Fishes! For those with healthy livers only.

    • I’m lukewarm at best on Larry Niven, but organ-legging now seems prophetic.

      • Amanda Legg

        That’ll cost ya.

      • Rhino

        If by prophetic you mean inevitable…

        Personally, I think that people actually should be allowed to sell their organs: it’s practically the only capital the lower classes still own, after all.

        Not even sure how much I’m joking :(

    • Unemployed Northeastern

      As I wrote above, even the law schools were getting in on the joys of originating billions of dollars of Student Loan Asset-Backed Securities over the last decade through their membership corporation Access Group. It’s enough to make one rethink why law schools were raising tuition so quickly, isn’t it? Now that I think about it, I’ve never heard of any law school making much of a fuss when private loans were made retroactively nondischargeable by Congress in 2005, even though law students were almost certainly the largest individual borrowers of private student loans (med student still had the federal HEAL loans, I think).

    • shah8

      Guys will be envious of the wombs of the girls. Much easier to be a surrogate mom than to give up a kidney!

      I think

      • jim, some guy in iowa

        um, probably *not* easier to be a surrogate mom…

        • Lee Rudolph

          Yeah, the real comparison would be with being a human dialysis unit. (Quick, call the VCs, I think I’m on to something here!)

        • daveNYC

          But at least it has the potential to be a repeating cash flow. You know how risky it is to base budgets on one off asset sales.

  • PaulB

    When Prof. Campos was writing ITLSS, he had a post that more than any other got to the heart of the matter when he said that law schools were producing far more graduates than there were job openings and that every other point was just a distraction from this.

    Those of you who think that expensive dorms, too many administrators, too many computers, right wing legislators, or left wing trendy majors and courses are the cause are looking at symptoms, not causes. The problem is that the federal government is providing unlimited loans, regardless of tuition costs and outcomes for their students. As long as this continues, there are no effective controls on how much tuition can be charged. Some of the marginal programs with especially high costs may be driven out of business but anyone who has dealt with young adults who blithely sign on the dotted line for student debt know how little the discussions that are the focus of sites like this have sunk into their collective consciousness. Without a radical revision to federally guaranteed loans (either their elimination or price controls on tuition) we’re just rearranging the deck chairs on the Titanic.

  • Ron

    Just out of curiosity, I’m wondering what percent of those in deferral are doing medical residencies. When my wife went to Georgetown Med School in the early 2000’s, the average debt at graduation, including public and private loans and loans from both undergraduate and post-bacc education, was over $200,000. That debt is deferred during the medical training. While I know that med students are a small percentage of the full student loan population, their loans are quite high, so I would think they would skew the sample a bunch.

    I know. We probably can’t dig that deeply into the data. But those loans are not “doubling down” on education. They are done with their educations. They’re just not making that much money yet. That money will all be repaid, though. If, in fact, that’s a lot of the money, we really are talking about 10-20% that won’t be repaid.

    And as investments go, that’s just not too bad. Because we are investing when we educate people. Some will default. Some will add enough to society to pay it back many times over. And some will just repay the loans, no harm, no foul. It’s a gambling strategy, but we’re betting on a lot of people. Some of those bets can go bad, and we still come out ahead in the end.

    Or am I missing something?

  • I am most likely part of the problem here but what am I supposed to do? No get an education?

  • I see what a lot of you are saying here. It is hard to teach a kid how to to be responsible with money after they’re out of college, but if they don’t have to work throughout college, this is the only time they learn. The problem is people are going into fields with little demand and wages are stagnant, which prevents people from being able to pay their loans back.

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