Cancel all student debt? No.

[pigou]

I'm not sure what you mean by social capital, but if you mean hobnobbing with other students, they can surely do that as easily in a cinderblock dorm as in a fancy dorm.  In fact having to share a bathroom and a dining hall would make it easier.

I do mean that and I'm not sure I share your intuition: when the school's facilities suck, students can go off campus. Either to live or just to spend time, which is going to reduce how often you just randomly bump into people.

Maybe even more importantly, dorms can be a sign about the extent to which the university cares about facilitating connections between students: are there large and inviting common rooms in the dorms that students use? Is there money to fund student-run events? Do students have to worry about heating breaking down in the winter? Lots of details that would be hard for visiting students to learn, but that probably correlate with the niceness of the dorms. A university with run-down dorms is probably not going to be throwing a lot of student events either.

Social capital is the economic value of relationships between people. Harvard can have shitty dorms in part because anyone who goes there can interact with the next generation of uber-elite, and both parents and potential students know this is economically valuable.

Harvard has pretty nice and modern dorms. More importantly, though, they invest massively in student life. Campus housing and events are specifically engineered to facilitate connections among the students. Just because you sit in the same class as, say, the daughter of a former president doesn't mean a whole lot if she'd be isolated somewhere with a security detail.

[larryc]

So much blaming the victims here. "Eighteen-year-olds should make better life-long decisions!"

[tuxthepenguin]

So much blaming the victims here. "Eighteen-year-olds should make better life-long decisions!"

And so much concern that they'll take advantage of multibillion dollar corporations. Maybe, just maybe, we should expect the companies that are in the business of making loans to actually do some work assessing and reducing risk. God forbid that they shouldn't be able to force someone into slavery because they couldn't get a good job after graduating from college. Contrast that to the startup culture, where the expectation is that most investments won't return anything.

[apl68]

I wonder if that thing about the pick-ups is really true, or whether that's an urban legend of the type of "That beggar really lives in a mansion." 

I can't cite details or names, but yes, it does appear to be true, and not an isolated instance.  Not the norm, but not a one-in-a-thousand outlier either.

[spork]

I'm not sure what you mean by social capital, but if you mean hobnobbing with other students, they can surely do that as easily in a cinderblock dorm as in a fancy dorm.  In fact having to share a bathroom and a dining hall would make it easier.

I do mean that and I'm not sure I share your intuition: when the school's facilities suck, students can go off campus. Either to live or just to spend time, which is going to reduce how often you just randomly bump into people.

Maybe even more importantly, dorms can be a sign about the extent to which the university cares about facilitating connections between students: are there large and inviting common rooms in the dorms that students use? Is there money to fund student-run events? Do students have to worry about heating breaking down in the winter? Lots of details that would be hard for visiting students to learn, but that probably correlate with the niceness of the dorms. A university with run-down dorms is probably not going to be throwing a lot of student events either.

Social capital is the economic value of relationships between people. Harvard can have shitty dorms in part because anyone who goes there can interact with the next generation of uber-elite, and both parents and potential students know this is economically valuable.

Harvard has pretty nice and modern dorms. More importantly, though, they invest massively in student life. Campus housing and events are specifically engineered to facilitate connections among the students. Just because you sit in the same class as, say, the daughter of a former president doesn't mean a whole lot if she'd be isolated somewhere with a security detail.

Harvard must have done some renovations since my campus tour twenty-odd years ago (was chaperoning a young in-law in her junior year of high school; I attended the trade school down the river several years previously). Dorm space was pretty basic. The sales pitch was focused on the institution's storied history, which I didn't care about. But maybe the wealthy white parents that were on the tour did, since it was probably code for children of elites hobnobbing with other children of elites.

So much blaming the victims here. "Eighteen-year-olds should make better life-long decisions!"

And so much concern that they'll take advantage of multibillion dollar corporations. Maybe, just maybe, we should expect the companies that are in the business of making loans to actually do some work assessing and reducing risk. God forbid that they shouldn't be able to force someone into slavery because they couldn't get a good job after graduating from college. Contrast that to the startup culture, where the expectation is that most investments won't return anything.

Maybe this is your point, but these financial companies don't have to bother with risk. A huge chunk of the loans extended to college students are backed by the government and can't be discharged by bankruptcy. At a set interest rate that could be lower, but isn't. Big win for the lenders.

[ciao_yall]

So, what is a student supposed to do?

Wear rags? Eat nothing but ramen? Never go out for a beer or pizza with friends? Not join a study group because it meets at a local Starbucks and they can't afford a Tall (tm)? Have to share a room, then put a tie or bra on the doorknob when "entertaining?"

Rely on the library copies for all their textbooks? Only do their homework in the lab because that's where they can borrow the fancy calculator? Scrounge the supply rooms for discarded pens and half-used notebooks?

Not take a job or internship because they would need a reliable car to get off campus?

[pigou]

So much blaming the victims here. "Eighteen-year-olds should make better life-long decisions!"

And so much concern that they'll take advantage of multibillion dollar corporations. Maybe, just maybe, we should expect the companies that are in the business of making loans to actually do some work assessing and reducing risk. God forbid that they shouldn't be able to force someone into slavery because they couldn't get a good job after graduating from college. Contrast that to the startup culture, where the expectation is that most investments won't return anything.

Maybe this is your point, but these financial companies don't have to bother with risk. A huge chunk of the loans extended to college students are backed by the government and can't be discharged by bankruptcy. At a set interest rate that could be lower, but isn't. Big win for the lenders.

That they don't bother with risk is the purpose behind making the loans non-dischargeable, though. The alternative is that only kids with (upper) middle-class parents as co-signers receive student loans and the poor, who need them most, do not.

There are some universities playing around with income-based repayment plans, where they get a cut off your income for 10 years. That just suffers from self-selection, though: the English lit major will be happy to sign up for the plan, but the machine learning major will not.

[apl68]

The old cinderblock dorms with the tiny rooms really ought to be adequate for today's students too, and in a perfect world, they would be. The problem now is that universities are fighting for students. And when East Directional State University has shiny new dorms, each room with its own bathroom and kitchen, it looks a lot more appealing than the University of West Directional cinderblock dorms, each with a bathroom down the hall shared with forty people and no one allowed to plug in a mini-fridge because it will overload the electrical system.  The rich students look at the fancy new gym with the climbing wall and sauna at East Directional, and the deluxe food court, and then they look at the tiny tired gym at West Directional, and the run-down student union with a Subway outlet and nothing else, and they go for the shiny.  And it's very important to attract the rich students, because they're the only ones paying full freight, especially the foreign rich students, who are probably contributing the lion's share of tuition dollars, state subsidies being as tiny as they are these days. So it becomes an arms race of resort-type offerings.

My alma mater, like many colleges, has long since replaced the old cinder-block dorms with much snazzier facilities.  Probably one reason why their credit rating, though not catastrophic, could be better.  They have vastly more common area space around campus now too.  They give the impression that they anticipated a student growth boom that never happened.  Enrollment is about what it was 30 years ago.  Did they foolishly anticipate too much?  Or has the upgrade in facilities enabled them to keep enrollment numbers in place where they might otherwise have fallen?  I don't know, but one thing's for sure--the place costs a lot more to run now, and has much higher tuition and other costs.

The state four-year school in our region has expensively built upgraded dorms in recent years.  Not sure whether that was a strategy to attract students--its main attractions are relatively low costs, a lack of alternatives for place-bound students in the region, and very open enrollment--or a realization that they could sell a pork-barrel construction project to the state legislature more easily than any other kind of investment in the school.

[Caracal]

My alma mater, like many colleges, has long since replaced the old cinder-block dorms with much snazzier facilities.  Probably one reason why their credit rating, though not catastrophic, could be better.  They have vastly more common area space around campus now too.  They give the impression that they anticipated a student growth boom that never happened.  Enrollment is about what it was 30 years ago.  Did they foolishly anticipate too much?  Or has the upgrade in facilities enabled them to keep enrollment numbers in place where they might otherwise have fallen?  I don't know, but one thing's for sure--the place costs a lot more to run now, and has much higher tuition and other costs.

The state four-year school in our region has expensively built upgraded dorms in recent years.  Not sure whether that was a strategy to attract students--its main attractions are relatively low costs, a lack of alternatives for place-bound students in the region, and very open enrollment--or a realization that they could sell a pork-barrel construction project to the state legislature more easily than any other kind of investment in the school.
[/quote]

Even "fancy" new dorms are rarely particularly fancy if you compare them to private rental options that usually cost less. Usually we are talking about a suite with a bathroom or two, two or four very small bedrooms, a modest sized common room and a very small kitchen. To the extent that giving students somewhat more pleasant accommodations keeps them on campus, which has all sorts of advantages for academics, it doesn't seem like a particularly absurd thing to invest in.

[tuxthepenguin]

That they don't bother with risk is the purpose behind making the loans non-dischargeable, though. The alternative is that only kids with (upper) middle-class parents as co-signers receive student loans and the poor, who need them most, do not.

These are talking points straight from the industry. See my previous comment about startups.

But of course, the law that is optimized for the profitability of large financial outfits, it's really the only possible way to protect the poor. Umm...no.

[pigou]

That they don't bother with risk is the purpose behind making the loans non-dischargeable, though. The alternative is that only kids with (upper) middle-class parents as co-signers receive student loans and the poor, who need them most, do not.

These are talking points straight from the industry. See my previous comment about startups.

But of course, the law that is optimized for the profitability of large financial outfits, it's really the only possible way to protect the poor. Umm...no.

You don't see college students getting credit cards with $20,000 limits at 6% interest; and certainly none without a parent cosigner (with income). Yes, investors in startups take huge risks and are willing to write off 19 out of 20 investments. But why are they willing to do that? Because they're going for the return on the 20th: 50-100x the investment. Where's the big payoff in a student loan at 6% interest?

[Kron3007]

That they don't bother with risk is the purpose behind making the loans non-dischargeable, though. The alternative is that only kids with (upper) middle-class parents as co-signers receive student loans and the poor, who need them most, do not.

These are talking points straight from the industry. See my previous comment about startups.

But of course, the law that is optimized for the profitability of large financial outfits, it's really the only possible way to protect the poor. Umm...no.

You don't see college students getting credit cards with $20,000 limits at 6% interest; and certainly none without a parent cosigner (with income). Yes, investors in startups take huge risks and are willing to write off 19 out of 20 investments. But why are they willing to do that? Because they're going for the return on the 20th: 50-100x the investment. Where's the big payoff in a student loan at 6% interest?

Yet Ironically the big banks had how many billion in bail outs?

Personally, I think student loans should be primarily public and given at no/low interest.  It is an investment in society.

[spork]

[. . .]

Yet Ironically the big banks had how many billion in bail outs?

Personally, I think student loans should be primarily public and given at no/low interest.  It is an investment in society.

No interest = Pell grant.

Low interest = kind of what we have now, except eliminating some of the middlemen. I.e., it would be something like FannieMae or FreddieMac, but for education.

The downside of subsidies is that it encourages the producers to jack up their prices.

Edited to add: to clarify, I am not advocating in favor of a purely free market system, because I do believe that an educated citizenry is a public good. But if voters elected politicians who were committed to generating that public good in an economically efficient manner, perhaps federal to state educational grants -- with strings attached -- might work better than a federal government-subsidized/guaranteed individual loan program.

[apl68]

That they don't bother with risk is the purpose behind making the loans non-dischargeable, though. The alternative is that only kids with (upper) middle-class parents as co-signers receive student loans and the poor, who need them most, do not.

These are talking points straight from the industry. See my previous comment about startups.

But of course, the law that is optimized for the profitability of large financial outfits, it's really the only possible way to protect the poor. Umm...no.

You don't see college students getting credit cards with $20,000 limits at 6% interest; and certainly none without a parent cosigner (with income). Yes, investors in startups take huge risks and are willing to write off 19 out of 20 investments. But why are they willing to do that? Because they're going for the return on the 20th: 50-100x the investment. Where's the big payoff in a student loan at 6% interest?

Yet Ironically the big banks had how many billion in bail outs?

Personally, I think student loans should be primarily public and given at no/low interest.  It is an investment in society.

Yes, it is.

[pigou]

Yet Ironically the big banks had how many billion in bail outs?

And the auto industry! But what does that have to do with student loans?

(Also, the government made a profit on the bank bailout, so... I don't think that's a great example.)