What is as large as US investment in Iraq and Afghanistan?

[OneFootInTheGrave]

US student debt

The U.S. Treasury, which finances more than 90 percent of new student loans, is exploring ways to make repayment more affordable as defaults by almost 7 million Americans and other strapped borrowers restrain economic growth.

Leading the effort is Deputy Secretary Sarah Bloom Raskin, who became the department’s No. 2 official in March after more than three years as a Federal Reserve governor. As higher-education debt swells to a record $1.2 trillion, Raskin, 53, is alert to parallels to the mortgage crisis.
.
We all have an interest in making sure that today’s student loan borrowers will be able to fully participate in the economy as homeowners, entrepreneurs and productive members of the American workforce,” Rohit Chopra, the student-loan ombudsman for the federal government’s Consumer Financial Protection Bureau, said in an interview.

If today's students will not be able to fully participate in the economy tomorrow - who will? McDonald's and Wallmart employees?

1.2tn on 40M people.

[OneFootInTheGrave]

I guess no one like the socialist idea of paying all the student debt instead of (or in addition to) paying for two wars during last decade. Last I hear those two are even a little more expensive to date... ie 1.5tn.

[The Mad Monk]

They've already been done, and no, we couldn't afford them either.

[Sava]

Our country will remain a dystopian nightmare until students pay less interest on loans than banks do.

[C0ckney]

there are a few things going on here. the cost of higher education is increasing, and more and more people are enter. yet at the same time its value for the individual student, in terms of what the degree itself provides and the differentiation in the labour market that a degree gives, seems to be decreasing. of course there is a wider social benefit to having a more educated population, in terms of % going into higher education, but this must start to taper off after a while and at some point become counter-productive (i suspect we've passed that point already, but i offer no evidence).

there is also the question of entry requirement inflation for certain jobs and professions. jobs that 30 years ago would have required some good GCSEs or maybe A-levels (in a UK context - read high school for US), now require a degree. companies demand graduates, because, owing to government policies to increase the numbers attending universities, they can, and therefore people are forced to go to university to even obtain positions which put them in the lower middle class. when everyone and their mother has a degree, people who aim higher are then forced to gain more qualifications to differentiate themselves from the crowd; thus we see the proliferation of post graduate courses (MBAs, honours degrees etc.) outside the traditional masters/phd route. obviously these cost a lot of money and i often wonder whether these courses have much value besides the differentiation factor.

it appears to be, for the most part, merely an arms race, and part of a wider shift of costs from employers on to workers and society as a whole.

[Sava]

BTW, any expenditure that requires payment of a loan breeds economic inefficiency... and our economy is pretty much based upon this kind of indentured servitude (house, car, education). If you're lucky, maybe by 65 you'll actually own the things you've been paying for (many times over) your entire life.

[Dauphin]

there are a few things going on here. the cost of higher education is increasing, and more and more people are enter. yet at the same time its value for the individual student, in terms of what the degree itself provides and the differentiation in the labour market that a degree gives, seems to be decreasing. of course there is a wider social benefit to having a more educated population, in terms of % going into higher education, but this must start to taper off after a while and at some point become counter-productive (i suspect we've passed that point already, but i offer no evidence).

there is also the question of entry requirement inflation for certain jobs and professions. jobs that 30 years ago would have required some good GCSEs or maybe A-levels (in a UK context - read high school for US), now require a degree. companies demand graduates, because, owing to government policies to increase the numbers attending universities, they can, and therefore people are forced to go to university to even obtain positions which put them in the lower middle class. when everyone and their mother has a degree, people who aim higher are then forced to gain more qualifications to differentiate themselves from the crowd; thus we see the proliferation of post graduate courses (MBAs, honours degrees etc.) outside the traditional masters/phd route. obviously these cost a lot of money and i often wonder whether these courses have much value besides the differentiation factor.

it appears to be, for the most part, merely an arms race, and part of a wider shift of costs from employers on to workers and society as a whole.

My gut reaction to that is that an ever more educated workforce should create ever more value and that it's not a zero sum game - you may still be entry level as a graduate, but you get paid more because the pie is bigger. The relevant question I feel is over saturation points and return on investment - that is, is the growth in pie bigger than the cost of extra education. Unless your point is more about the distribution - the pie is bigger and all goes to those at the top end.

[C0ckney]

My gut reaction to that is that an ever more educated workforce should create ever more value and that it's not a zero sum game - you may still be entry level as a graduate, but you get paid more because the pie is bigger. The relevant question I feel is over saturation points and return on investment - that is, is the growth in pie bigger than the cost of extra education. Unless your point is more about the distribution - the pie is bigger and all goes to those at the top end.

at the moment we see a lot of graduates doing low paid, low skills, and probably not adding much/any value to them; a graduate barista/call centre worker/barman is unlikely to be much better than a non-graduate one. we also see many graduates entering jobs at 21/22 after 3 years of university where 20-30 years ago they would have entered at 16/18 and been trained by the company/organisation. again i question how much more value the graduates provide in this case; i suspect very little. i think these are evidence of saturation.

the distribution question is important too. the wealthy are best placed to win the educational arms race and its side effects, such as unpaid internships, further entrench their position. even if the pie grows, those at the top take almost all the gains.

[Fake Boris]

College education has become a rent for university elites.

[Sava]

university elites.

Who is a "university elite"?

Can you provide an example?

[pchang]

University elites:
Any college president, many tenured professors, other top college administrators....

I question why the cost of higher education is rising faster than inflation. Subsidized student loans allowed colleges to increase costs without facing a drop off in demand. However, crushing student debt is now starting to make this happen. We should have coupled subsidized student loans with cost audits for colleges on anything that was rising faster than inflation.

[Fake Boris]

Who is a "university elite"?

Can you provide an example?

Professors, deans, managerial employees, and private corporations who free ride on universities' resources.

[Sava]

Professors, deans, managerial employees, and private corporations who free ride on universities' resources.

And how do they "free ride"?

[Dauphin]

at the moment we see a lot of graduates doing low paid, low skills, and probably not adding much/any value to them; a graduate barista/call centre worker/barman is unlikely to be much better than a non-graduate one. we also see many graduates entering jobs at 21/22 after 3 years of university where 20-30 years ago they would have entered at 16/18 and been trained by the company/organisation. again i question how much more value the graduates provide in this case; i suspect very little. i think these are evidence of saturation.

the distribution question is important too. the wealthy are best placed to win the educational arms race and its side effects, such as unpaid internships, further entrench their position. even if the pie grows, those at the top take almost all the gains.

Is the graduate barista life true across all courses, or just certain courses. For example, I would think it more true for arts than sciences. People need to be smarter over their choice of course and make sure it is better suited to future demands in the workplace.

[Dauphin]

Using this definition of a non-graduate job and focusing on recent graduates who were employed, the percentage of them who were working in one of these roles has risen from 37% in April to June 2001 to 47% in April to June 2013. Although this time series is variable, an upward trend is evident, particularly since the 2008/09 recession. This may reflect lower demand for graduate skills as well as an increased supply of graduates.

http://www.ons.gov.uk/ons/dcp171776_337841.pdf

Interesting stat.