US Student Loans Exceed $1 Trillion 917
sycodon writes "Politico reports that student loan debt now exceeds one trillion dollars, an amount that should impress even Dr. Evil. Politico further reports that this is one of the more concrete issues driving the OWS protests and provides some enlightening examples of their particular gripes."
You think the housing collapse was bad (Score:5, Interesting)
Just wait until you see what happens if THIS group starts going en masse into default. At least with houses, there is some collateral there. What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job? You going to foreclose on and resell his worthless degree?
And, sadly, this is only going to get worse. Tuition has been going through the roof at universities in the U.S., even as wages for the jobs post-grads get afterwards have remained stagnant. The wages of parents and post-grads have stayed the same, but they're having to fork out more and more for tuition--driving them to even more debt. So it's hardly surprising to find out that student loan debt has increased over 63% in just ten years.
So what do you think the end result is if this trend continues? Either large segments of the population are going to have to give up on college or they're going to have to put themselves in a position where default is almost an inevitability. I guess that could actually have one positive effect. It could finally dispel the idea that everyone can or should go to college (or that a college degree should be considered a prerequisite for any white collar job).
And, BTW, you know who pays when someone defaults? The U.S. government foots the bill, since these loans are federally guaranteed. So Uncle Sam gets to fund the bailout on that one too, just like he did with the banks and domestic car industry.
Re:You think the housing collapse was bad (Score:5, Insightful)
Re:You think the housing collapse was bad (Score:4, Insightful)
There has been a 50% population increase in the US since 1970 and there aren't 50% more good universities, good jobs and houses. Supply and demand is doubly destructive. More cheap labour means wages don't have to rise as fast. Increase population means higher demands on available housing, pushing up prices and cost of living generally. Universities aren't immune to charging more for their product either. We now also have more women in work than in 1970, increasing competition in the job market.
This doesn't account for 900% but accounts for some of it maybe.
Re:You think the housing collapse was bad (Score:4, Insightful)
This doesn't account for 900% but accounts for some of it maybe.
You might be surprised. When you have a limited pool of something that can't expand, and more demand than supply, prices can go up almost exponentially.
If you drive on a congested highway to work you might notice on a school holiday or delay that the time to commute changes dramatically. And yet, the change might have only taken 10% of the cars off the road. Basically a road can handle so many cars per minute and once you start hitting that level the queuing becomes massive.
Look at home prices - when an area runs out of land for new homes the existing home values start going up dramatically. Gas prices are similar - when those hedge funds collapsed and stopped trading oil futures prices crashed - it isn't like people stopped driving their cars much or anything.
In the case of a university consumers have very little flexibility - if they want an accredited education then there are only so many places to go and new options open up infrequently. Demand exceeds supply, and so prices can rise almost freely. Really the only constraint are limits on student borrowing. If next year the US government announced that students could borrow up to $1M/year in student loans you'd see tuitions skyrocket.
Re:You think the housing collapse was bad (Score:4, Insightful)
Education needs to be subsidized with supply-side distortions. Take the money currently provided as unrestricted student loans (leave the low-income assistance), and dump it into public universities. That should help lower the tuition at public unis, making them affordable to people who otherwise couldn't attend without student loans, while also exerting downward competitive price pressure on private universities and colleges. Normally I (as a fiscal conservative) wouldn't be for this - you're subsidizing a public "corporation" which competes directly with private corporations (universities and colleges). But the decades of student loans has so distorted the market that the private schools are swimming in money (which forces public universities to offer higher salaries to compete, thus raising their costs as well), and there's a lot of fat which needs to be trimmed to revert the college/graduate education market back to normal.
Re:You think the housing collapse was bad (Score:4, Informative)
Working your way through school is now impossible with a minimum wage job, since, you're looking at 35 hours a week at minimum wage to be able to afford only tuition - that doesn't include books or board.
After my freshman year of college, which was stupidly at a private college, I took a year off, and worked 65 hours a week at 3 jobs (paper routes in the morning, lab rat stuff during the day, package handling 2nd shift). I paid down as much as I could in a year, and then went back to school.
It's hard, but not impossible to pay your way through school today. It's not as fun as the lives of most college students, but it can certainly be done.
How much did you rely on your parents (Score:3)
And I don't just mean straight money. Housing? Washing? Mom bringing food? Old washing machine?
Mind you, as a European your story is proof that it can't be done. Do I really want my doctor to do 12 years over his story (6 years study, 6 years working for each study year)? Seems a bit wasteful.
But Hey, I am from Holland, the country whose economy isn't down the drain. What do know.
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Personally, I would rather those who are out of work and can't find work go to school for retraining (even if that means debt) to improve their job prospects later rather than one of:
1) Sit around on the dole
2) Turn to crime
3) Commit suicide
Buying a porsche is entirely not comparable. It doesn't improve one's job prospects or provide trained labor for the market.
That said, going to an expensive degree program might be a move. There are less expensive educational options.
--PM
Re:You think the housing collapse was bad (Score:4, Interesting)
I worked through college. My parents paid for my transportation to and from school and for phone calls home, but other than that, I was on my own. I'm now 30, and have a very good paying job (I'm in the top 20% income-wise). It's possible, but you gotta 1) choose the right school, 2) choose a useful major, and 3) work your tail off, all which requirements are increasingly ignored. It's also worth pointing out that the perception of a college education has created (in my opinion) a bit of a bubble. Just like the housing bubble, people are investing ridiculous sums of money into something which doesn't have near that amount of value. You can point the blame in any number of directions--at parents for pushing kids into college when the kid isn't made out for it, at the kids for choosing majors which provide no marketable skills, at colleges for helping perpetuate the perception that a college education is necessary to lead a comfortable life (and who can blame them, from a marketing perspective?), or at the government for artificially inflating demand by guaranteeing loans a ridiculously low interest rates.
There are still LOTS of good-paying, non-college-degree-requiring jobs out there. The trades particularly are (and have been for some time) suffering from a shortage. Plumbers, electricians, welders, and the like. A good welder with his own equipment can make a very nice living.
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When it comes to greed, the Universities make the Wall Street banksters look like Buddhist monks in comparison.
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you cant just walk away from a student loan like you can a house.
You have to declare bankrupcy & be able to show 'undue hardship'.
This of course turns the students into indentured servants to the banks or government, but let's not worry about the young. After all, we all know it is the baby boomers who really matter
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you cant just walk away from a student loan like you can a house.
You have to declare bankrupcy & be able to show 'undue hardship'.
This of course turns the students into indentured servants to the banks or government, but let's not worry about the young. After all, we all know it is the baby boomers who really matter
Err... bankruptcy does not eliminates one's student loan debts. You can't bankrupt your way out of it, even if you prove 'undue hardship' (as it is typically understood). The only way to get out is if - God forbids - you get permanently disabled or some other horrific event of that magnitude.
Comment removed (Score:4, Interesting)
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you cant just walk away from a student loan like you can a house.
You have to declare bankrupcy & be able to show 'undue hardship'.
This of course turns the students into indentured servants to the banks or government, but let's not worry about the young. After all, we all know it is the baby boomers who really matter
Err... bankruptcy does not eliminates one's student loan debts. You can't bankrupt your way out of it, even if you prove 'undue hardship' (as it is typically understood). The only way to get out is if - God forbids - you get permanently disabled or some other horrific event of that magnitude.
Not according to CNN [cnn.com]
"There's a mythology that private student loans can't be discharged. But sometimes they can and should," says Kantrowitz.
To get your student loans discharged, you must file an undue hardship petition. To qualify, you have to satisfy three conditions: First, you must not be able to repay your student loan and also maintain a minimal standard of living based on your income and your expenses. Second, your situation must likely persist for a significant portion of the repayment period of the loan. Finally, you must have made good faith efforts to repay the loans.
Re:You think the housing collapse was bad (Score:5, Interesting)
>You have to declare bankrupcy & be able to show 'undue hardship'.
Nope, student loans aren't even dischargable in bankruptcy. You are stuck with them for life.
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They can be discharged on death. You are stuck with them for life.
What happens when it seems like suicide is the ONLY way out of the debt/joblessness situation? Wonder if the families where Jr. commits suicide because of his/her debt/joblessness would get the word out if this was the reason they took their own life? Will shame keep this buried? I would hope that with more and more suicides the government/corporations would be shamed to do something to prevent this for future generations.
Re:You think the housing collapse was bad (Score:5, Informative)
You can't default on student loans, they never go away. The fed will garnish your wages forever until they are paid off.
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You can't DISMISS student loans (through bankruptcy). You can MOST DEFINITELY default on them. And how are you going to garnish wages if someone is unemployed (or even severely underemployed)?
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Patience, grasshopper, patience. Eventually, even if it is 20 years down the road, the vast majority will get a job. At that time, the garnishments will apply. Remember, when you enter the mainstream workforce you pay income tax and there is social security withholding. The government knows when you have enough for them to tap you on your shoulder and put its hand deeper in your pocket.
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Which is even worse if the person is on minimum wage, as it could easily force them to stop working (since they may not be able to survive on the garnished minimum wage amount). The government may find it far more interesting with large numbers of young workers who default, can't pay, are garnished, and then stop working entirely.
as with real state, personal responsibility... (Score:3)
Just wait until you see what happens if THIS group starts going en masse into default. At least with houses, there is some collateral there. What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job? You going to foreclose on and resell his worthless degree?
With that said (and something that should be said more often), even with rising costs in education, one should only get over $60K in student loans if you get a degree in medicine or law or STEM degree (in particular from a private university.) If you have $40K or more in student loans with only a B.A. degree in History from a public university, there is something fundamentally fucked up with you - that Mac laptop wasn't something you really, really needed, for example. Or you really, really, really didn't n
Re:as with real state, personal responsibility... (Score:5, Interesting)
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Actually, it isn't all your fault. Most rests on your parents, for forcing you into the potentially (and eventually) untenable situation.
I know it isn't nice to speak ill of the dead, and that they meant well, but the fact remains they essentially forced you into that situation.
Part of the problem is our culture that places such a high value on brand-name education. It has been my experience that the majority of the "education" received depends on the student much more so than the school or teacher. Going t
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Once a pension benefit is vested it can't be lost. If Merck was playing around with that they were violating the law. Sorry to hear about your loan trouble, I am in slightly better shape (far more loans, but good job) but even while I can pay them they are a huge (though I can't benefit from IBR for most of them, like recent graduates can).
Re:as with real state, personal responsibility... (Score:4, Insightful)
Coming from your background, that's fine. Here's my story: my dad worked at Merck, and was earning well over 100k a year. I was told that my student loans wouldn't be a worry, and thanks to being a mediocre student in high school combined with his earnings, I didn't get much financial aide (not for want of talant, but because I was frequently sick and missed a lot of school). My parents wanted me to go to a highly ranked local private college for my CS degree. I didn't want to go, but they refused to sign my financial aide papers (FAFSA) if I didn't go where they wanted. I applied early admission, which barrs me from applying elsewhere. A quarter way through my junior year, my father has a series of heart attacks, is diagnosed with cancer and lyme disease. My mother is diagnosed with uterine cancer. Neither one lasted long. All of their money? Gone in an instant from medical bills. His pension? Merck decided to fire him after due to frequent illness thanks to the cancer, so it was lost. My situation? Newly graduated with over $100,000 in student debt thanks to interest rates peaking at 8%. Now, this is all my fault, I knew that money was racking up, but honestly it never clicked. Pair that with an utter lack of money management skills being taught in my school or by my parents, and it was a recipe for disaster. It was something I never knew I needed to know, or even thought to learn about it.
I'm sorry to hear about your parents' illness, but sorry to break it up to you. They were fucking stupid and they fucked you up. They projected their own ideals of life into you in a manner that only served to indulge their shallow, narrow-minded (and I dare say arrogant) world view (a particular trait in our culture which is what is putting us in the fucked up place we are right now). Their interests, their pushing their agenda on you, that never represented your best interests. I'm sure they loved you dearly, but love is not enough. I mean, what kind of parent would refuse to sign FAFSA papers for his children just because his children do not want to go to a private university?
I mean, think about it. In that aspect, they fucked up in their parental duties, they played God, and as a result, they have loaded your life with $100K in debt that cannot ever be defaulted by the normal venues of bankruptcy. Sorry pal, I am not the one risking being branded as shallow and ignorant.
And speaking of world views...
Not everyone has something "seriously wrong with them" and that sort of world view will get you branded as shallow and ignorant.
I'm sure that in your college education you were exposed to the concept of reading comprehension, and reading skills in general. This is what I wrote. Tell me how the "something fundamentally fucked up with you" passage applies to you (who went to a private university for a STEM degree):
one should only get over $60K in student loans if you get a degree in medicine or law or STEM degree (in particular from a private university.) If you have $40K or more in student loans with only a B.A. degree in History from a public university, there is something fundamentally fucked up with you.
So. Read.
Some people honestly get screwed by student loans.
No. People do not get screwed by students loans. People screw themselves with the decisions they make with them (or in your case, your parents screwed you up with them.) Your case does not represent a general case, and doesn't even represent the general case described in my description of things, so I don't what sort of mechanisms you are using when extracting meaning from written passages.
Having said that, I have to say I sympathize with you. I do not know your situation (I also went through a terrible period of disproportionate personal debt - private credit debt - due to a lack of sound money skills.) But, unless you are facing health issues, or you are already married
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Re:You think the housing collapse was bad (Score:4, Insightful)
You can't go into default in the normal sense. Most student loans can't be discharged in bankruptcy.
They can be discharged on death. Because unemployed angsty grads never have problems with suicide, Congress wanted to incentivize it. (Not really, that's just a side-effect. It really is to not burden the family of someone who dies.)
There are, however, really great loan forgiveness programs and loan repayment programs. It varies a little based on your exact loan, but generally, the current loans (which will change slightly next year, possibly) allow (1) income-adjusted repayment, where you repay the government based on your income and get the balance forgiven at the end of 30 years, regardless of how much you still owe, and (2) repayment for public service, where you get your student loans discharged after ten years of government service or not-for-profit work requiring the use of your degree.
Amazingly, I believe the Government accounts for these MASSIVE loan forgiveness expenditures in the budget by calling them budget-neutral and completely ignoring them.
They are great programs in several ways, which may be why they want to make them look good and not really account for them (they don't want to make programs which make public service work possible and which make college and graduate educations possible go away because of political pressures from the rich, who pay the most taxes and so would have the most interest in cutting those programs). Ultimately, of course, it is ridiculous to say they don't cost anything.
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So what do you think the end result is if this trend continues? Either large segments of the population are going to have to give up on college or they're going to have to put themselves in a position where default is almost an inevitability. I guess that could actually have one positive effect. It could finally dispel the idea that everyone can or should go to college (or that a college degree should be considered a prerequisite for any white collar job).
Or they could join the military. Do two years and your schooling is paid for. Even if you are not a fighter, every branch has openings for cooks and truck drivers. Yeah, the military sux, but it's no worse than trying to wash dishes to pay for college and the benefits are SOOOO much better.
Just wait until you see what happens if THIS group starts going en masse into default. At least with houses, there is some collateral there. What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job? You going to foreclose on and resell his worthless degree?
Well, they can still take your house if you don't pay your student loans, or at least put a lien on it. They can also garnish your wages, so no matter what crappy job you get, they will make sure it pays less. Your o
Re:You think the housing collapse was bad (Score:5, Insightful)
A resourceful person could do the equivalent of a college education for just the cost of an internet connection (or at the library for free).
That's true. But when's the last time you saw "4-year degree or equivalent do-it-yourself degree" listed as a job prerequisite for a white collar job?
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Why would you assume a DIY degree came with any more experience than a college degree. "I read a book on Java 4 years ago and did the example problems." doesn't equate to 4 years of Java experience.
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I've found many places these days require your college transcripts before interviewing you. Unless you can fake transcripts, this works pretty well for them to tell if you have that degree or not at no real cost to them.
Re:You think the housing collapse was bad (Score:5, Informative)
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When? tuition prices have been skyrocketing year over year. Being able to do this 10 or 5 years ago, while still impressive, doesn't have as much bearing as you might think? How many years did it take? Perhaps your state happens to still have a low cost school but many do not.
That 35 hour week is just to pay tuition, never mind room and board. I guess if your lucky you can live at your parents house if it happens to be close enough to a state university but then there are transportation costs.
Re:You think the housing collapse was bad (Score:5, Insightful)
Re:You think the housing collapse was bad (Score:5, Insightful)
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not in the perfect "free-market" that has no entry-level jobs for college graduates.
and you have been apparently similarly indoctrinated with social propaganda if you think we have a free market. Government intervention is what is responsible for BOTH the high cost of college and the fact there there is so much OVER supply of degree'ed job candidates that candidates without a degree need not apply.
This situation is not the young high school graduates fault, they are a victim, but not a victim of the market a victim of government distortions in the market.
Re:You think the housing collapse was bad (Score:5, Insightful)
Over the past few years, the conservative view has been getting more press, and that's changed slightly.
YOUR success is based on personal factors. YOUR failure is blamed on external factors.
OTHER people's success is based on external factors (dumb luck, handouts). OTHER people's failures is blamed on personal factors (lazy, greedy).
You're dead-on regarding the external factors changing dramatically. People have just been taught to take the blame. When the housing market blew up, there were no rally cries to lynch the underwriters who forged the paperwork. Instead, the public was taught that their own personal greed was the root of the problem.
Re:You think the housing collapse was bad (Score:4, Interesting)
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Re:You think the housing collapse was bad (Score:5, Insightful)
Maybe Little Johnny shouldn't borrow $100,000 if he doesn't have a reasonable plan for a career after graduation.
Maybe the banks shouldn't loan little Johnny $100,000 if he doesn't have a reasonable plan for paying it back.
Oh, what's that? The federal government guarantees all student loans? And the banks take advantage of that by loaning money to anyone and everyone who can claim to be studying, without performing any reasonable due diligence or oversight, because the banks know that one way or another, even if they bankrupt the student, they'll still get their money back?
Come on, who do you think is at fault here - the young teenager taking the easy money being offered? Or the multinational corporation with packages designed to temp said teenager, and profit massively out of the situation?
Re:You think the housing collapse was bad (Score:4, Informative)
Sounds like government is at fault here for guaranteeing the loans.
Re:You think the housing collapse was bad (Score:4, Insightful)
Maybe Little Johnny shouldn't be told by every single adult as he's growing up that it is critically important to go to college, even if he goes into debt for it?
Re:You think the housing collapse was bad (Score:4, Informative)
Re:You think the housing collapse was bad (Score:4, Insightful)
Nah supply and demand is broken. When you need a degree to get a job, and you need a job to live, then the demand side skyrockets.
"With that kind of thinking, someone else needs to stop these kinds of people. They wont stop themselves. She should never been able to get those loans in the first place"
Ah. So that she would most likely not have any chance to rise above the poverty line. Check. That'll fix the economy! When there is no discretionary pay left after food and shelter, it doesn't matter how cheap things get when imported from other economies after all - the market for anything is essentially zero.
Get rid of the social stigma attached to being non-degreed, get rid of the bogus requirement to have a degree, any degree, in order to 'succeed' (heh - and THAT's defining success as 'marginally above the poverty line and insured so that medical expenses are less likely to bankrupt you'), and we'll talk.
Until then this will continue.
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This.
Additionally, start looking at how colleges are funded. 15 years ago, a "State College" meant that the institution was more than 50% funded by the state (e.g. tax and tariff and fee revenues). The cost was spread out, and the tuition costs were much lower.
Tuition costs have "risen" basically on par with how state funding has fallen. Today, a "state college" gets between 15 and 20% "state funding" and the rest comes out of tuition. In other words, much more of the cost has been placed on the backs of th
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Ah. So that she would most likely not have any chance to rise above the poverty line.
But she wasn't. She was just saddled with huge amounts of debt that did absolutely nothing to help her income earning ability. And she didn't need to be moved above the poverty line - she just needed to get herself into a position to stay above it.
In a very real way I need a car to live. That fact doesn't mean I can go buy any car at any cost and expect things to work out and be angry with someone else when they do
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Many police agencies require a bachelor's degree now, don't they? I know the big one near me does.
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You are an idiot. Out of touch, too.
"You were told to go to college on debt?"
Not everybody can afford to pay out of pocket, and colleges that can be paid for by (non-existent, have you heard? Job seekers outnumber jobs) part-time work are as extinct as the dodo. Despite that, college is necessary to find jobs above the poverty line.
"And to live a life of luxury and parties while you were there? Wow. Dumb parents"
Uh huh. Not only an idiot, a mean-spirited idiot.
"In fact they pretty much insisted that eve
Re:You think the housing collapse was bad (Score:4)
Punishment does little to get the money back that was owed.
Re:You think the housing collapse was bad (Score:5, Insightful)
It most certainly should not be done. Maybe some of them are lazy but some of them are industrious and want a job but there's nothing suitable to be found. What incentive will companies have to create REAL jobs if they know they can get indentured servants assigned to them? If they have the choice between an employee that they have to pay a competitive wage, who can leave if he's unhappy or an indentured servant who they can pay practically nothing, who isn't legally permitted to leave, who do you think they're going to choose?
Re:You think the housing collapse was bad (Score:4, Interesting)
What incentive will companies have to create REAL jobs if they know they can get indentured servants assigned to them?
Georgia actually started a program [state.ga.us] to do pretty much something like that with the unemployed a few years ag. (I know, who would have thought a southern state would support slavery, right?). Basically, companies get free unemployed indentured servants for up to 8 weeks, with the only caveat being that they're supposed to receive "training" at the job. The program was scaled back drastically after it came out that most of the companies weren't providing any real training at all and were just using these people as free labor. Shocking, huh?
Sadly, a lot of states are looking to adopt programs modeled on Georgia's. Even Obama is praising it [cnn.com] as a model program.
Re:You think the housing collapse was bad (Score:4, Insightful)
The program was scaled back drastically after it came out that most of the companies weren't providing any real training at all and were just using these people as free labor. Shocking, huh?
Unfettered, unregulated capitalism at work.
This is not to say that total socialism is the solution. The solution is somewhere midway - a tightly regulated capitalism that prevents abuses and provides a safety net for those who are ruined or harmed by the uncaring, unthinking actions of others while still providing rewards for innovators and hard workers.
Re:You think the housing collapse was bad (Score:4, Insightful)
I see you lack experience in your domain: So you are going to fire them and replace them with you until you become the same within the system ? Where you have to deal with kids who "know better as you" and think "they understand the world", or whatever vision an experience educator will embody. And then lower your wage to pay for the early retirement of the other ?
So you'd switch the problem from a flexible and creative group to a group who is supporting by carrying mortages, paying studies, feeding and sheltering the younger group ?? So the younger group has a higher income potential with less responsabilities? What planet do you come from ?
The problem is economical, and the lack of taking risks; I always see in these kindof discussions "there isn't enough work" or "They don't want to give me a job" but in the current climate, that job always "sucks" or "isn't paid enough" or such and what not. But complain "the rich aren't giving you work" while those who are creating work are "giving it away to lazy idiots"...? *mouth falls open*
Why not get together with your friends who do not have a job and are highly qualified, are trained in business and creative professions. And while you are are sending out applications, you apply that which you have been taught and start your own business and create work. If it's worthwhile, people will give money for it. If people give a buck for it, you have a buck to spend.
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I think another part of the problem though is employers requiring degrees to get a job, or at least making the youth believe they need an expensive piece of paper to get a good job.
I've got what I cons
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well CS is theory and IT should be on it's own without all the theory and math.
I disagree. CS students should all learn a little about IT (so they don't try stupid crap that overtaxes a system), and also because IT people should come from the realm of CS. Sure, the math is partially irrelevant, but the theory makes a miserable IT button pusher into an IT wonder.
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So you want people to do a 4 year CS and then a 2 year tech school?
The hard part is setting how much theory that IT people need and much how a IT a CS students should get also IT people need a good hands on part that is way better then theory.
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I sympathize with the above. I've been hearing for years here in the US about "nursing shortages". There's been plenty of nursing programs in schools in our area which issue nursing degrees at various levels such as a 1 year LPN, 2 year associate and then the 4 year RN (I believe I got the names and years correct). The thing is, there's been a waiting list to get into these programs because people believed there was a shortage, and it's been this way for years even before the great recession. It smelled
non-profit? (Score:5, Insightful)
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And at most universities, both housing and sports are a COMPLETELY SEPARATE ENTITY!.. You look at how much the football team brings in.. Did you forget about how much it costs to send the womens Rowing team to their events? Or building and maintaining a stadium to hold 70,000 people?
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Anyone that still believes that America's colleges and universities are "non-profit" institutions, should think again at this. For two of the most obvious examples, I cite you the "Bowl Championship Series" and most college sports in general (namely football and basketball), as well as the fact that student dormitories and student unions have largely been turned into country clubs, with just about every one of them having a Starbucks (heck, that's in the library now, too), and having such amenities as rock climbing walls, gyms with workout equipment that rival Gold's Gym, and many schools are giving every student their own iPad these days. Plus, when most schools in Division I pay their football or basketball coach twenty times the salary of the average professor, and four times the salary of the university president, you know something's fouled up,. . .
When the school has TV ads, non-profit goes out the window as far as I'm concerned. At the school I attend as a grad student, things have changed remarkably in the past few years. Massive construction projects and renovations, loft-style dorms, the same gym with rock climbing wall you speak of, and countless new student clubs and services including concerts from popular bands every weekend. If it weren't for scholarships and fellowships, I wouldn't be here.
There are two legitimate sides to this argument (Score:4, Insightful)
However there are also people out there who went to college and majored in drama, or comparative literature, or film studies, or any of a number of other fields that have very marginal job prospects even in a good economy. They are carrying debt because they took a foolish risk with 4 years of their lives. Of course, some of them may have been poorly informed by their college with regards to what they could do with their degree. Others didn't give a damn and set off determined to "study what I want" or whatever. This latter group dug their own hole and I don't have a lot of sympathy for them.
In short, if you majored in engineering and then couldn't find a job after the economy went down the toilet while you were in school working your ass off, I feel for you. But if you spent four years in a field with ordinarily terrible job prospects and now you are shocked that you have no job prospects, I don't have much sympathy for you as you took a great opportunity and managed to squander it.
However, those who excel at taking great opportunities and squandering them may yet have a future in American politics.
Again, banks are committing fraud (Score:5, Insightful)
First, there is usury. Student loans are unsecured, but federally backed. There is very low risk to the bank. Yet interest rates charged tend to reflect that of high risk loans. Further, while payments are deferred, interest isn't. Not all of this is fully disclosed to the borrower. For instance, do all students know that they are payig interest rates comparable to normal loans, yet with normal loans a borrower can default on a loan. With student loans the must must be paid back, and garnishment of wages and other restrictions on one's livelihood are very easy. Unlike most loans, which are regularly renegotiated, the student loan, with exorbitant interest given the level of risk, is not.
Then there is collusion in the defrauding of the american public. Much of the loan money goes to private distance Universities. These Universities are well known for having very high default rates, and are well known for being victims of straw men loans. In any other financial process, the banks would conduct due diligence to minimize exposure. However, as this is a way to transfer taxpayer money to private banks, there is almost no due diligence. The money is handed out. Banks know or should know the forms are fraudulent. There was one reported case of many forms asking for money to the same address. However, as there is no real risk, and it free money for the bank, no such diligence is performed and banks happily take tax payer money. Unfortunately, all risk and blame is placed on the university and student. While this is appropriate, more blame must be placed on the people who are fundamentally profiting from the fraud. The bankers.
Re: (Score:3)
For instance, do all students know that they are payig interest rates comparable to normal loans, yet with normal loans a borrower can default on a loan.
You will never find a 14 year, collateral-less loan that banks will give to a jobless 18 year old student, at any interest rate, they simply don't exist, and for good reason. The government backing is the only thing that makes such remarkably low rates possible, and the default-less nature is the only thing that makes the government guarantee possible.
College Education Scam (Score:5, Informative)
NIA today officially released the most comprehensive documentary ever produced about higher education in the U.S. NIA's hour-long documentary called 'College Conspiracy' exposes the facts and truth about America's college education system. 'College Conspiracy [inflation.us]' was produced over a six-month period by NIA's team of expert Austrian economists with the help of thousands of NIA members who contributed their ideas and personal stories for the film. NIA believes the U.S. college education system is a scam that turns vulnerable young Americans into debt slaves for life.
It also remind us:
After the burst of the Real Estate bubble, student loans are now the easiest loan to receive in the U.S., and total student loan debts now exceed credit card debts.
It was written May 16, 2011 ...
Re:College Education Scam (Score:4, Informative)
I'd never heard of NIA. I went to their site and read the 'about' section.
I got a bit suspicious when I saw this: "Our food inflation report was featured on FOX News by Glenn Beck, who called NIA a "very credible" organization." I don't consider Glenn Beck very credible.
Googling NIA lead me to this: National Inflation Association co-founder admits NIA is a FRAUD! [youtube.com]
And a ton of other articles basically saying that NIA is a scare scam to pump and dump gold/silver. Now it could very well be true that total student loans exceed pricey credit card debts, but does that 'fact' actually mean anything? More students than ever are going to school, largely because unskilled labor jobs are drying up. So its no surprise that there are more loans.
I'd rather build a business that had an educated population to hire from and live in a community that voted intelligently than cut back on federal loans.
High cost meal plans and room and board is part of (Score:3)
the high costs as well.
Like forced meal plans that cost a LOT for meal times that do not always fit in with class times for any from sub par to good cafeteria food. Some places even forced cash cards that time out so you are in a use or lose it so some people buy a ton of candy just to drain the cash from the card before it times out and is lost.
Also room and board with (room mates) can cost more more then renting a apartment on your own. Can take the same room mate rent apartment and pay less.
Now a dorm may have stuff like high speed networking but that may be part of added tech fee on top of the room and board costs. Now most dorms have some kind of cable system but that can be a old analog only system like you see in hotels, a system with some channels but you have to buy the cable box, to like some apartment where a cable system like Comcast gives you basic / starter is part of rent and you can add on any pack that you want.
Now in a apartment you can get full digital cable or satellite tv and get the tv that you want and not be stuck with what the dorm has.
Debt is like a game of tag. (Score:3)
Debtors are "it" and have to tag the debt on non-debtors. Banks fail? Well, people who save money can pay more taxes have to bail them out. People with lot's of debt get tax breaks, and don't have any money anyway. So anyone with visible money ends up paying for those in debt.
So my advice is, dig yourself as deep into debt as the silly financial system helps you to. You will never have to pay for it. Someone with no debt will.
As the economist John Maynard Keynes said, "If I owe the bank 100 pounds, I have a problem. If I owe the bank 100,000 pounds, the bank has a problem."
Oh, and for US students with too much loan debt, that would be deducted from your paycheck? Flee the country, for the off-world colonies.
To many required class and filler make 4 y push 5 (Score:3)
To many required classes and fillers classes are pushing the 4 year degrees out to 5 years.
Due to classes filling up, classes only being offered only at some times and the high number of credits needed a 4 year degree used to be 120 credits and now Colleges want more for the 4 year degree. Also the X credits to be a full time student should also be cut down or have some kind of fill in that force people to take stuff like art history.
Now some filler is ok but other times it's a waste that can be better spent and there are ways to make it better like say cut back on some of the math classes or make some of them no logger required, let people take some side classes in other ares with not having to meet all the prerequisites for that class, on the job training, work study, and so on.
How Government Caused This (Score:3, Interesting)
The government helps students take on loans -> colleges increase tuition because students can afford more thanks to the loans -> there is societal and economic pressure to help people go to college -> the government helps students take on loans ...
The three sectors that increased much faster than inflation (housing, health care, higher ed) all have their cost subsidized by government. Is this a coincidence?
And this is the relative size of the higher education bubble: http://www.di.net/blog/wp-content/uploads/2011/06/tuition-housing-cpi1.jpg [di.net]
What next after masters become the new HS? (Score:3)
As the PHD system needs work
http://www.nature.com/news/2011/110420/full/472261a.html [nature.com]
MBA? that is a masters but do you realty want a work place there the basic jobs needs Business Administration skills?
$600 billion, but still a problem (Score:3)
First, Felix Salmon says USA Today's numbers are wrong, and student loans are around $600 billion: http://blogs.reuters.com/felix-salmon/2011/10/19/fact-and-fiction-about-student-loans/ [reuters.com]. But it still is a big number.
Here's the current system: if someone with a pulse wants to go to a for-profit school, he will get in. He will pay high tuition, almost all covered by student loans. He gets a worthless degree and cannot get a job. But federal student loans cannot be discharged in bankruptcy, so his life is now ruined.
There's some blame to go to the student, he should have known better. But chances are this is a young kid, and his first exposure to the adult world is a recruiter telling him he's smart, he's going places, he just needs to graduate college, preferably this really expensive for-profit school. He's been preyed upon as well. And this used to be considered fraud, preying on vulnerable people. If a guy went around to old ladies selling them useless junk, we used to toss him in jail. I'm not sure why our attitudes have changed.
I think federal student loans need a major overhaul--right now, it's a huge giveaway to the banks and for-profit schools with students as victims. Limit federal loans to for-profit institutions to 50% of non-profit tuition (it can go higher based on merit), and force for-profit schools to be accredited every year. Just somehow change the incentive system to reduce the number of non-qualified kids funneled into expensive and useless programs. Change the law so that student loan defaults impact the school they went to: say, reduce loans in the future, with no more student loans to that school if the default rate tops 15% (or whatever number makes sense).
This is another bubble, and the popping of it will be another huge blow to the economy.
Also, kids need to told loudly: getting a degree from a school not competitive in the field is not worth anything more than going to your closest state school. Expensive schools that aren't competitive to get in are just a place for rich kids to go get drunk. Don't take out loans to go to those schools!
It is not hard to figure out why. (Score:4, Insightful)
dent loan debt is nondischargeable in bankruptcy unless the debtor can meet a very high burden of proving hardship.
It's no wonder that lenders lend insane amounts, when they can hound their borrowers for years and years.
No way is this in the long term interest of business, but since when has business ever cared about the long term. They buy their congressmen and this is what they get.
Same thing for the goddamn mortgage industry. Banks get super-protection for their residential mortgages in bankruptcy, so they can write stupid mortgages without fear that the mortgage will be modified in a Chapter 13. This is a contributor to all the stupid loans.
Then business sells us on the idea that it's all the debtor's fault. That's the stupidest thing of all. Sure it's the debtor's fault. When the moron takes the stupid home loan or the stupid mortgage, he has only himself to blame. But business interests want us to think: Fuck him. He can sort his own sorry shit out. And we're morons if we agree with that. If our stupid ass neighbor goes down with a bad mortgage--our property values suffer, our banks suffer, and we all suffer. We're all interdependent. Looking out for other people is looking out for ourselves. The frontier ethic doesn't work anymore when we're jammed together in cities.
Enough of a rant. Now I'll get flamed by the small government people who would rather be governed by banks than by elected representatives.
Re: (Score:3)
In the case of the home loans, I would say the people who got trapped were more naive than stupid. Brokers and bankers who are supposed to have a deep understanding of finance kept assuring them that the debt load they were taking on was perfectly manageable, and that the needed refi was just a matter of filing the papers. With the zillions of documents in dense legalese and all the figures flying about, the buyers were "blinded with science".
What the buyers didn't know was that the mortgage business chang
Really simple solution tested in practice: (Score:5, Informative)
Make all education free for all. That's what Finland is doing, and it works brilliantly: the scientific output of this small (by population numbers) country is extremely high, as well as the effects of it on industry.
Now the UK has introduced tuition fees that are, in most cases, about GBP 9000/year. Many universities in The Netherlands (where education is free for all, as well) are now marketing all-English language master programmes to UK students that cannot afford the tuition fees. That will cause an influx of people who will, by studying in The Netherlands, contribute to the science in that country, and most likely stay as PhD students, contributing even more.
By the way, in addition to free education for all, the US should really introduce single payer, too. A system where children (as well as adults) are left without health insurance should alarm you.
Re:heh (Score:5, Insightful)
I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt
With almost any decent job these days requiring a 4-year college degree, what the hell do you expect? Unless your parents are upper-class or have had the foresight to save up the money (with no intervening crises to eat it up), your only hope to get anything better than slave wages at some manufacturing plant (that's probably going to China at any minute) is to get a highly-competitive scholarship or take out a student loan. And there are only so many scholarships to go around.
Re:heh (Score:5, Informative)
With almost any decent job these days requiring a 4-year college degree, what the hell do you expect?
That is why high school is worthless now days. You might as well drop out with a GED and go to community college. High school and GED gets you the same job now days, there's no need to waste those 4 years when you could go to college and at least get an associates and move on to bachelors at a real school.
Of course this only applies to the 99%, the 1% go to Ivy League high schools and Ivy League colleges so they don't need to worry about community college.
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I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt
With almost any decent job these days requiring a 4-year college degree, what the hell do you expect?
1. Not buy brand new Macs (really, you don't need them to do your studies.)
2. Not go to a distant university if there is one within commuting distance.
3. Not go to a 4-year university for your freshman and sophomore years if there is a community college near you.
4. Get a A.S. degree first (what I should have done.) Then go to a 4-year university, even if it takes you an additional year to get your B.S/B.A degree. That will better prepare you for eventualities.
5. Not go to a dorm if you can live with you
Re: (Score:3)
Oddly enough - my parents are not upper class, I received no scholarships, and no funds from my parents or other relatives. I completed a 4 year degree with no debt.
The idea that school loans are inevitable unless one wants to be a part of the poor downtrodden masses is false.
Re:heh (Score:5, Insightful)
I wont be the first or last to say it, but I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt and doesn't understand that they made a poor choice.
OK, let me get this straight:
1. Don't go to college, can't find a job. Poor choice.
2. Go to college, can't find a job. Poor choice.
What we have here are a bunch of people willing to work, but the market is unable to find work for them. You blame the people, when the market is what's causing the problem.
Re:heh (Score:5, Interesting)
My knee-jerk reaction is the same as yours. "Why did you take out loans you can't afford? Regardless of why, it's your fault for doing it."
However, looking at the times we live in, I have a lot of sympathy for the OWS movement. I recently got my PhD in Physics from a top university, and was a triple major as an undergrad. All of this happened without a single penny of student debt, and in fact I was actually supporting one of my parents on my grad student stipend. While I was in school, employers were often contacting me with offers of, "Please quit! Come work for us at Facebook!", and "Please quit! Come work for us at Hedge Fund!" I flew out to a few of the places to interview just because I wanted to see the city. Now that I'm done, the job market has since collapsed. It's hard to even get a call back, even with a decade of programming experience, several publications in an emerging field a PhD, and international recognition for my programming abilities. My university is balking at paying me a $2150/month stipend for me to continue doing research there as a postdoc.
I'm left thinking that leaving the good thing I had in high school and undergrad, a well-paying job in a contracting collective, was a big mistake. A huge mistake. Because even the opportunity cost of going to university for 10 years for free was greater than the value of the education. Now imagine you're one of the 99% who took out loans on the promise that they'd get a better paying job that would cover them in the future, and you're thrust into a workforce that doesn't want you. You can't bankrupt your way out of it. You can't take a job at McDonalds because the student loan payments are more than you'd be making. You feel like going to university in the first place as opposed to working a McJob was a mistake.
So, I do have a lot of sympathy for them. I can't imagine being in that position, and the promises they were given by their institutions are worth about as much as the paper the diploma was printed on. Their student debt has them saddled for life--they can't default or bankrupt their way out of it. They'll be paying until they die. I wish I could do something to help them, but until someone will call me back for something other than evil (damn you hedge funds), I'm out of luck too.
AC because this is embarrassing. I support you OWC. :(
Re: (Score:3)
Re: (Score:3)
My wife is currently looking for a job after a decade off to raise 3 kids. She doesn't have a degree and doesn't have much current, relevant experience for anything specialized or an in-demand position. She's using a variety of job posting boards including Craigslist for a receptionist, office admin, etc type of job. She's found jo
Re: (Score:3)
Current quote at the foot of the page:
Look at it this way: Your wife's spending $280 a month on meditation lessons to forget $26,000 of college education. And you're still drinking ordinary scotch?
Here in the UK, repayments on your student loan are only taken while you're making over a certain threshold value (something like £14,000 a year). Also, once you hit 45 years old the debt will be wiped regardless of how big it is. I rather stupidly paid £2000 of my savings into repaying the loan after I left University, when if I'd been thinking sensibly I should have just saved it towards a deposit on a mortgage. It started at about £14000 and current
Maybe it's not all about me (Score:5, Insightful)
Perhaps the issue is that the inflation rate for college tuition is well above the general inflation rate, that states are contributing a far lower percentage toward operating state unis and community colleges than they have in the past, and that more and more employers are requiring a 4 year degree for positions which don't really need one in the first place.
Perhaps they're not protesting their own debt. Perhaps they're protesting the current situation -- created by banks, governments, universities, and employers -- which has helped foster the enormous tuition rates being charged for students *today*, thereby necessitating massive student loans or a society in which upward social mobility is unnecessarily reduced.
Perhaps there's more to a strong and diverse society and culture than engineering. Perhaps your $USELESS_DEGREE has tremendous social value, and the real problem is that our current economic structure doesn't reward the people working in job($USELESS_DEGREE) well enough. Perhaps they think the problem is that we're simply not funding enough social workers and teachers and the arts -- not that there are too many young people with those degrees.
Look -- I earned a whole bunch of college degrees on full scholarship in tUSA, in fields which pay reasonably well. This isn't about me. Yet, I do agree with the OWS protesters. College debt is too high. Sure, it was all taken voluntarily, but that doesn't mean that we shouldn't change the circumstance for future high school graduates. I believe that the Federal Gov't should open more universities at free/low tuition, and not require military service to be admitted -- and focus on areas where we have a national interest. Health care, energy, infrastructure, etc. I believe that state governments should pour far more money into their state universities. I believe that both Fed and state gov'ts should hire more teachers and fund more arts. I support raising taxes on folks with more money [both income and wealth] to pay for it. I think that if we moved in that direction, we'd have a safer, healthier, *better* society.
Re:Maybe it's not all about me (Score:4, Insightful)
It was a goal of Reagan back when he was in California to specifically get rid of free/low-cost college. He saw college students protesting government activities and publicly complained that they were having it easy, and at government expense. With all that free-time they got to protest too much. So: he dramatically raised fees at the state unis. He couldn't raise tuitions, as they were protected. After a few years, there was even a court case that found that excessive fees were a de facto tuition, but by then it was too late.
Now: the pendulum has swung too far. Instead of a bunch of college students with plenty of free time and nothing (of value) to lose, we have a bunch of college students and grads with so much debt that they've thrown in the towel and realized that they have nothing to lose; when you're staring at $0 of college debt, you're essentially in the same situation as an unemployed grad with $100K of debt. "Aw, fuck it," you say.
We're fast entering a similar situation as the "Arab Spring": a bunch of unemployed young people with nothing to lose. Bloomberg stated as much and was taken to task for doing so.
Re: (Score:3)
>I spent my college years getting a useful degree and paying for it by working during the year and the summer
Yeah, you can't do that anymore. You'd have to have a full time minimum wage job to even come close to paying for college now.
Student loans are a replay of the health care (Score:4, Insightful)
It also is a replay of the mortgage market.
When consumption of goods becomes third party in nature the costs explode. This happened in medical care when employers and the government started to pick up the tab. People didn't realize the costs of services and they have become used to not caring. As a result the services got more expensive over time, usually outstripping inflation.
Student loans and student aid did the same thing. They separated the costs of education from the student. Oh sure the student knew they were going to pay but they didn't have to pay NOW and that was key. They had to make installment payments. That reduces the psychological sting all that money made.
Schools then abused that through incredible marketing both direct and indirect. By having all sorts of support industries to include the press and such espouse all the benefits a high dollar education conferred. The one fact they left out was, the majority would never succeed. Everyone is not equal and the same education does not mean all parties have the same out come.
As for the OWS, go read their site. If that doesn't frighten off people here then I would be shocked. It all centers around having GOVERNMENT become more oppressive. They want, want, want, want, and want. There is no talk about what they will do for others only what others should be compelled to do.
Re:Let experts, not salesmen, decide (Score:5, Insightful)
This is almost true. There are some problems with your post, though.
"Educators will tell you that perhaps college should be reserved for those with the ability and initiative to do the work. Not everyone is ready for a college education, or able to engage in the rigorous critical thinking required. That's not popular with the salespeople, who want to sell college to everyone."
The 'salespeople' here are our government, trying to sell hope that even though they encourage industry to move offshore, there is a way for everyone to live happy fruitful lives. Education was that way. And it's necessary now; after all, to get a decent white-collar job now you need 'a degree'. It doesn't have to be related to your job. Jobs available (if you don't have a degree) will ensure that you live in poverty and die early.
"High school is now four years of day care because those teachers figure the kids will really learn to spell in college."
No. High school is now daycare because both parents now have to work to survive and NEED DAY CARE. Teachers are now expected to raise kids, but aren't allowed to punish them. Parents freak when 'little johnny' fails, and rather than take responsibility, they blame the teachers for their kids lack of effort - even though teachers have little or no power to make the kids do ANYTHING.
"When they cheapen those, too, we're going to have to cut out the middleman and bribe our way into careers."
Yes. Only the upper classes will be able to do this too. Oligarchy becomes permanent and the American Dream dies. A permanent, desperate underclass that will work like slaves for almost nothing will be available, and America will finally become 'competitive' with the third world. By becoming a third-world nation.
Third-worldization of the US (Score:4, Interesting)
You nailed it. We are becoming a third world nation.
1) Huge wealth disparity between the rich elite and everyone else. (check)
2) Decreasing access to health care for the masses. (check)
3) Little social mobility. (check)
4) Decreasing access to education for the masses. (check)
--PM
Re: (Score:3)
Agreed, it does seem like college is becoming the new High School when it comes to the job market.
A drop out, GED and HS Diploma holder will have pretty similar prospects for jobs in the real world.
Re:OWS = same whining leftists as always (Score:4, Insightful)
Watching OWS protests, where we have largely a population of educated middle-class or higher kids (who are staggeringly wealthy by any world standard), who have spent their lives:
- getting everything they need, and pretty much everything they want
- have never known hunger
- have always been basically healthy
- have never seen war except as volunteers, which is pretty damn unlikely anyway (more importantly, have never faced the ravage of war across their homes)
I recently graduated with a degree in Electrical Engineering, easily one of the most "Useful and Marketable" undergraduate degrees you can have. I am also a veteran who spent 2 years serving his country, 6 of them getting shot at in Kandahar. I have relocated to the DC-Metro area, one of the areas of lowest unemployment in the country. I BARELY found a job, and at a significantly lower salary than what my peers were being offered in 2007. My tuition costs more than doubled while I was in school. All the while, we've been dumping trillions of dollars to cover the asses of bankers and insurers underwriting ridiculous risks in order to make a quick buck.
But sure, OWS is a bunch of whining leftist hippies. Seriously dude, get fucked.
Re:Forgive Student Loans!!!1!! (Score:5, Insightful)
Want to see a real uprising? Watch what the hard working middle class who already paid off their own student loans do when their earnings are taken away to forgive some occupy-wall-street-dirty-hippie's B.A. Art History debt.
I remember how you guys rose up over the Wall Street bailout. Boy are those guys reeling from how you gave 'em the scowling of a lifetime.