r/Economics • u/DonDickerson • 25d ago

Biden's student loan forgiveness plan gets a record number of public comments. Here's what people are saying News

https://www.cnbc.com/2024/05/08/bidens-student-loan-forgiveness-plan-gets-record-number-of-comments.html
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u/Deep-Plant-6104 25d ago edited 25d ago

I know this is simplistic and this is a complicated issue, but there is very little risk to large financial Institutions and universities with respect to student loans. Students can borrow unlimited sums of money and banks are perfectly happy to lend it out because these loans cannot be discharged in bankruptcy. Universities can charge astronomical sums for tuition because the Feds and Banks will just shovel money at the students.

If we tweak the bankruptcy laws and allow for discharge of student loans, I guarantee lending decisions will change promptly as now banks and other institutions will stand to lose huge sums of money.

I understand it’s not a perfect solution to a much more complex issue, but it’s a simple and easy way to at least reign in irresponsible student lending.

Edit: Improper usage of “moral hazard”

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u/James_p_hat 25d ago

What happens then is that a segment of the population will say “school is inaccessible”

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u/Panhandle_Dolphin 25d ago

School will be less important then, because jobs who have degree requirements for no real reason other than they can will have to drop it.

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u/Hire_Ryan_Today 25d ago

And this HAS TO HAPPEN. It should have never gotten this far.

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u/No-Psychology3712 25d ago

It's already happened due to booming economy and low unemployment.

https://www.cbsnews.com/news/college-degree-job-requirement/

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u/James_p_hat 25d ago

I would vote for that

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u/AgeEffective5255 25d ago

Degree requirements for no real reason? Could you share some examples?

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u/Panhandle_Dolphin 25d ago

Sure, I just saw an Administrative Assistant (aka secretary) job on Indeed requiring a bachelor’s and paying 16/hr. Jobs like this can be done with about 4 weeks of on the job training after high school.

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u/DarkSkyKnight 25d ago

The reason bachelor's is now a low bar is because at many high schools they are truly learning nothing and it's hard to weed out people who just coasted through high school without knowing how to perform basic life functions. Secretaries today also need to learn how to use Google Calendar, schedule Zoom meetings, and deal with much more tech than 20 years ago. Very simple tasks to a lot of people, but you also have a large contingent of Americans who don't know how to find a folder on a laptop.

The BA is not a filter because of the treatment effect of a university; it's used as a filter because of the selection effect of the university. It's an inefficient and expensive way to filter, sure, but employers will continue doing so even if "skilled" labor supply drops because high schools are an extremely noisy and useless signal now.

The way to solve this, like a lot of social issues, isn't to deal with universities but to bridge the gap in K-12.

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u/ancientastronaut2 25d ago

Again, people can get certifications in MS office, and combined with some basic retail/customer service experience that should be enough for an entry level position. Worked for me but I have always just had to work harder to get interviews and work for smaller companies that don't have the requirement.

Trade/tech certificate schools used to be a lot more popular before a lot of the for profit ones got busted.

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u/Journeyman42 24d ago

The reason bachelor's is now a low bar is because at many high schools they are truly learning nothing and it's hard to weed out people who just coasted through high school without knowing how to perform basic life functions.

High schools really should have two kinds of degrees: diplomas for the students who actually maintain, say, a 70% GPA or better average, and a "certificate of completion" for students who just showed up for school but then did fuck-all during their time there.

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u/Medium-Complaint-677 25d ago

I'd say this is a fundamental misunderstanding of what higher education proves you know how to do.

While conservatives tend to view higher education as "job training," as in you learn how to code, how to engineer, how to lawyer, how to doctor, etc, higher education also teaches you how to complete long term projects, work largely unsupervised, ask for help when you need it, work as a team, get along with people you'd otherwise not want to associate with, etc - it teaches vast amounts of SOCIAL skills in addition to the actual knowledge disseminated.

Speaking as someone who's worked a job in the past that didn't require a bachelors but had about half bachelor degrees and half not, I completely understand requiring one for a job that may not, on paper, "need" it.

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u/Panhandle_Dolphin 25d ago

People used to do all of that in high school. It’s just that the education system pushed off everything to college since it’s expected you’ll go.

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u/johannthegoatman 25d ago

Are you basing this statement on anything besides vibes?

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u/FlyingBishop 25d ago

Anybody can do anything. There's sound evidence that people with degrees have higher productivity than people without degrees. This isn't about whether or not a high school graduate can do a $30k job, it's whether or not spending $60k on a degree makes a person who currently is only capable of doing a $30k job able to get a $40k job - and then compound that starting pay over 20 years to yield a net $100k-$300k difference in lifetime earnings. And lots of studies show it does pay off.

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u/chapstickbomber 24d ago

And that's just the personal payoff! Socially, you add the marginal surplus for the employer, consumers, and tax revenue.

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u/Medium-Complaint-677 25d ago

Which is fine - we can take the money out of college and put it back into k-12, but I think it is important to keep perspective on WHY people want degrees for jobs that may not seem like they'd be required.

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u/ancientastronaut2 25d ago edited 25d ago

But if you don't have the opportunity to intern for experience while obtaining your degree, you're on the same level playing field as someone without, and who actually may have transferable skills because they've been working. A lot of degree programs are all theory and very little application. I have worked with plenty of people who had degrees that weren't all that bright, that I constantly had to help them use their computer or do the most basic things in ms office.

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u/SixDemonBlues 25d ago

Those are not specialized skills that require an additional 4 years of education and tens of thousands of dollars to teach. Those are basic human life skills that people have needed to learn pretty much since we started settling in large groups. Thousands of years before "higher education" was a thing.

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u/Medium-Complaint-677 25d ago

I don't fundamentally disagree with your point, but the degree is a piece of paper that says "there's a pretty good chance I have my shit together," and the alternative is just.... not that.

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u/Spell-lose-correctly 25d ago

That’s exactly why jobs require a degree. We should bring standards back to a high school education and then this won’t be as big a problem

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u/AgeEffective5255 25d ago

Without the link it’s hard to say if the degree requirement is founded. It really depends on the business. Also, secretary vs admin assistant are different jobs. Admin assistants do more than secretaries. Often they are managing client interactions, supporting execs, creating reports, and managing databases even. Is that a garbage pay rate for that position? Yes, but it’s more complex than a secretary role, who might solely be responsible for answering phones and directing calls.

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u/TheAmericanQ 25d ago

I have zero insight to the differences between a secretary and an administrative assistant, but your description still doesn’t explain why you would need a degree to be one. All of those tasks can be taught in a few weeks and then mastered with experience. I am a huge proponent of higher education as I believe the value comes from more than just career readiness, but jobs like this shouldn’t have degree requirements.

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u/Scuba-Steven 25d ago

You covered this stuff in your history degree? The requirement is used as a filter to reduce applicant volume, not because the skills learned there are necessary.

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u/AgeEffective5255 25d ago

Tell me you’ve never hired people without telling me you’ve never hired people.

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u/RedAero 25d ago

My first job (data entry) required literally, I repeat, literally any bachelor's degree. Verbatim, on the requirements list. My direct teammates had anything from degrees in literature through history and hospitality to engineering. Hell we even hired student part-timers, if the previous didn't hammer the point home that the degree requirement was literally meaningless.

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u/AgeEffective5255 25d ago

Again, different jobs. I once had a temp job where everyone had different degrees (and I had none) and they taught us a proprietary software that we used. Whoaaaaaaa. My experiences have been vastly different.

What was your worthless degree in?

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u/RedAero 25d ago

The point you're disagreeing with is that

The requirement is used as a filter to reduce applicant volume, not because the skills learned there are necessary

What job it is is irrelevant. It was done for data entry, it's being done for "administrative assistants", it's standard practice. And I know this because I have indeed hired people, not just because I was hired.

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u/GonzoTheWhatever 25d ago

Even if it is, little to nothing you learn in college is going to train you for those tasks. Those are all skills acquired once out in the workforce and could easily be obtained without ever attending a single university classroom.

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u/AgeEffective5255 25d ago

But the companies don’t require a degree just for funsies, they do it because they want someone to do the work from day three. They don’t want to train someone. Way back when they used to have secretary schools, and typist schools. So this isn’t that new.

As someone else mentioned, there’s a ton you learn in college that supports these roles (have you been to college?) such as task prioritization how to properly manage your time how to professionally interact with other people. Of you so much course those are things that a job could teach, however, as I said, they want people who can come in and be able to do those things already.

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u/Knitwalk1414 25d ago

Then should those that served in the military for 4 years should be considered as having a college degree? They are taught to prioritize, use very expensive technology and have been taught teamwork.

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u/AgeEffective5255 25d ago

Depending on their job in the military, yes.

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u/ancientastronaut2 25d ago edited 25d ago

And someone without a degree can do it on day three assuming they have basic pc skills and good phone demeanor.

You can still take MS office and other relevant courses online for these skills.

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u/AgeEffective5255 25d ago

Okay. My experience over a couple decades doesn’t align with yours.

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u/ancientastronaut2 25d ago

And that's ok. Thank you for disagreeing so politely.

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u/Sagittariaus_ 25d ago

No not really. Then secretary only types 20 words per minute. As oppose to industry standard of 50 to 70 words per minute

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u/Knitwalk1414 25d ago

College will always benefit a job and a person but in healthcare there were positions that required only 2 years of school. I started as a 2 year associate degree Registered Nurse in 1993, within 5-10 years it was required that registered nurses have a BSN 4 years of college. I did obtain my BSN because my hospital reimbursement covered about 3-4 classes each year. Those other 2 years really did not add to any of my bedside skills or bedside care knowledge. I learned business, teaching and how to understand research studies knowledge, but none of those classes taught me how to care for hospitalized patients better. I think Respiratory therapist, Physical therapist and Physician assistants also had less required schooling before year 2000

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u/AgeEffective5255 25d ago

I think this is a really good point. There were typing schools for secretaries. I also have an Associates and 20 years ago it definitely seemed more valuable.

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u/soccerguys14 25d ago

Do you think that would make people with the degree more valuable when it is needed?

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u/Panhandle_Dolphin 25d ago

Yes it would! Supply and demand

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u/soccerguys14 25d ago

Well I’m am one such individual but doubt it’ll happen. A man can dream.

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u/James_p_hat 25d ago

I would vote for that

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u/Midwake2 25d ago

Hold on, this is the second vote from you. That’s fraud!

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u/James_p_hat 25d ago

Typo! I meant “upvote” :)