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Comment by KKKKkkkk1 | Hacker News Reader

> Close to 80 percent of borrowers who rehabilitate their debt make the minimum $5 monthly payment, according to a 2015 estimate by the National Council of Higher Education Resources, a lobbying group that represents student debt collectors and servicers. That means the Education Department is paying its debt collectors up to $1,710 per borrower to collect around $45, regardless of whether the borrower continues to make her payments.

In other words, the government is paying through the nose in order to artificially reduce actual default numbers.

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Here (Canada) you can get your loan forgiven if you can plead your case. This only applies to government loans and not private ones made directly through banks.

Tuition fees are still outrageous compared to what they used to be, the subsidies are slashed to nearly nothing, but at least you're not going to be bled dry if you can't get a job when you graduate.

Don't you see the connection? School fees are high partly because people can get free money to pay them. This of course screws the people who do not take the free money by defaulting on loans.

Pretty much, why is an "inexpensive" college over $12k a year, with community colleges charging upwards of $7k a year? Seems crazy that the minimum you can spend on college is $40k, how is that accessible to the average person?

Financial aid, scholarships, and Federal loans (to an extent) help a lot for sure.

Well, when you consider the average car price in the US was $33k in 2016, it doesn't seem that unreasonable.

Average car or average new car?

I doubt that students:

1. Have money to buy a new car

2. Can buy a new car every year

They could buy a new car every year if they give up avocados. But you know college kids, they're all high on guac.

While that comment is ridiculous, I live where the cost of avocado spread on toast is around $6 after tax and a cup of coffee is around $4-5 after tax.

The point is not entirely without merit.

This is a major city but not like SF or somewhere crazy.

That was a story that I found outrageous.

I recall my distant relative and another few of my friends got a house here in Toronto when they were 1/4 - 1/3 of what they are now. All while their salary being maybe 10% less.

And then the older generation starts lecturing us... Completely disconnected with the current reality.

Of course, the houses were cheap back then because it was a petty undesirable place to be.

Incremental change tends to be less noticeable if you see it every day, but as someone who visits Toronto just a handful of times per year it blows me away how much the city has changed in even just the last 10 years. Once old and run down neighbourhoods that I wouldn't ever want to live in are now highly desirable places to be. While I'm a bit too young to have much perspective on the situation 20-30 years ago, from what I've learned from those who lived in those neighbourhoods back then, it was even sadder and even scary to live there.

I am surprised they were only 1/4 of what they are now.

> Once old and run down neighbourhoods that I wouldn't ever want to live in are now highly desirable places to be.

There's never really been "scary" places to live in Toronto apart from a few neighbourhoods and housing projects. The places that people describe as scary just have a lot more "character" than other parts. You'll see mentally ill people on the street, those with physical disabilities, those who are dirt poor. In other parts of the city they're swept away or ignored.

What you're describing is gentrification. Gentrification has happened.

I'm going to have to disagree with you on your first point. A friend of mine purchased a house from in what is now a bustling tech community with all kinds of money around, but the past is still evident. There were bars on the windows. Visible damage to the home where someone tried to break in. Others who lived in the area in the past also echo similar sentiments of how it used to be.

Of course those are just anecdotes, but the data confirms it. Crime rates have declined meaningfully over the years. Gentrification made these nice places to live, but the decline in crime is why they are less scary. Unless you are trying to imply that crime isn't scary?

Most of the crime comes from crackhead types, and those people are allergic to conflict. They like to break into places when nobody's home, grab a few things and bolt. They love garages, they hate homes.

I've known people that have lived in Parkdale for thirty years, and while it's better now, less petty crime, it's never been an especially violent place. "Sketchy" in Toronto means places where you can't leave your bike unattended for six seconds or where your garage will be ransacked by people every couple of years if the door isn't locked properly.

Gentrification pushed the troublemakers further away, jacked up rents, and changed the demographics substantially. It's a whole different town in some places.

Looks like were there some downvotes. I think folks missed the sarcasm and Australian news: https://www.theguardian.com/lifeandstyle/2017/may/15/austral...

Yeah, unless my parents were in the top 2%, I doubt they'd be buying me a new car, let alone one near average cost. Instead, I get to use a value-free truck that I've welded back together! The joys of going to a commuter college.

They did try to make it bikeable, by increasing parking costs and getting the county to reduce bus service. Oh, and the shower areas that UW/UWB/Seattle Colleges put into their new buildings to get LEED certified? Those are all locked up, cause screw bikers!

Car prices have basically doubled from that era, while tuition has gone up five fold or more. That's the problem.

Don't talk average car prices, some people spend stupid amounts of money on luxury vehicles. Look at the easily accessible, low-cost options like Kia and Hyundai. Those are half that price.

Not partly, it's single handedly responsible for it.

No. Pretty much every aspect of higher education is subject to some degree of Baumol's cost disease, as well.

Not completely true. With the advent of ScanTron, Blackboard, online tests and quizzes, etc. much of the 'manual' work of teaching can be automated. Couple this with online classes, and one professor can run WAY more sections of a class than he could if he had to physically teach all of these classes. Even with in-person lectures and automated grading, labor productivity has increased dramatically in the last decade or two.

It is true that "running sections" has gotten more efficient, but that has nothing to do with education. Lectures have repeatedly been shown to be the worst method of teaching, and being able to speed up exam grading does nothing for that. It's also impossible for our lone professor to grade homework in a mega-section without an army of TAs (who cost money).

Baumol's cost disease concerns jobs whose labour productivity does not increase. It's obvious that teaching has increased in productivity. So where is the money going? Administration and capital expenditure.

Universities compete for the top students. They spend huge amounts of money on elaborate buildings and fancy landscaping. They hire more and more staff to run these facilities and cater to students' every little need. The pool of top students is limited, making this a zero-sum game. This is why tuition keeps going up.

The connection is that as subsidies have dropped, fees have skyrocketed.

When I was in school the tuition was $3500/yr. and I was in one of the most expensive programs in the whole university. I knew people in other programs paying as little as $2000/yr. Foreign students, who didn't receive any subsidies, paid about $19,000 for the same thing.

That was the kind of money you could easily make over the summer even at a mundane job if you were careful about saving.

Now for a basic arts degree get ready to fork out $10,000 or more. Some CS people are paying $16K a year. I'm not sure how you'd come up with that kind of scratch except with a student loan.

Education is not something that should be driven by demand pricing. Of course there's demand for education, society demands it, and as such, society should help offset the costs. Would you rather live in a place where half the people had a university education or where half the people had barely finished high school?

No, the government is paying private contractors to advise debtors, which is a market-based approach utilizing efficient private enterprise. Hence the 38 to 1 ratio is quite obviously the most efficient that can be done - this is just economics 101.

Just imagine if the government would simply employ people to advise debtors directly, how inefficient that would be, how unhelpful the advice would be, how much money would be wasted! They'd probably spend more money on that bureaucracy than what little revenue they'd bring in!

I too am thankful for the efficiency of the market. Contracting works a lot like this as well. Efficiency uber alles, as I like to say.

> In other words, the government is paying through the nose

With our money, one might add.

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