USC Pushed a $115,000 Online Degree. Graduates Got Low Salaries, Huge Debts.

[fatduck]

this issue goes a lot deeper than USC btw.  here's a great article on 2U (the company that contracts with USC for this MSW program) and other similar businesses:https://www.huffpost.com/highline/article/capitalist-takeover-college/

 

[Liar Loan]

I think social workers would typically qualify for PSLF though

So even if you take $200k debt, you are just making income based repayment for 10 years and then the balance is forgiven

Ok, so we as taxpayers foot the bill for this horrible decision to overpay for education.

 

[fatduck]

I think social workers would typically qualify for PSLF though

So even if you take $200k debt, you are just making income based repayment for 10 years and then the balance is forgiven

Ok, so we as taxpayers foot the bill for this horrible decision to overpay for education.

drop in the bucket.  pslf is good policy overall.  helps retain public employees at lower compensation who would otherwise seek higher paying private employment.

but even if you consider forgiveness programs to be a true writeoff and ignore other positive externalities, federal student loans are still profitable for the government overall.

trying to micromanage all this stuff is just not worth it.  welfare queen hysteria all over again.  just set up the best incentives you can and let the dice roll.  milton friedman knew this.  modern conservatives don't seem to get it.

 

[Liar Loan]

I think social workers would typically qualify for PSLF though

So even if you take $200k debt, you are just making income based repayment for 10 years and then the balance is forgiven

Ok, so we as taxpayers foot the bill for this horrible decision to overpay for education.

drop in the bucket.  pslf is good policy overall.  helps retain public employees at lower compensation who would otherwise seek higher paying private employment.

but even if you consider forgiveness programs to be a true writeoff and ignore other positive externalities, federal student loans are still profitable for the government overall.

trying to micromanage all this stuff is just not worth it.  welfare queen hysteria all over again.  just set up the best incentives you can and let the dice roll.  milton friedman knew this.  modern conservatives don't seem to get it.

Federal student loans are not profitable once you account for future defaults.  A private lender would be required to set aside loss reserves (in effect taking the loss now to account for future defaults), but the government doesn't have to do this.  They only look at current cashflows when declaring profitability, while ignoring all the bad debt on their books that won't be written off until a future date.

Not only that, but the government notoriously underestimates the rate of future defaults to begin with (meaning the losses are always worse than they project) and there's no incentive to tighten up underwriting to reduce it because taxpayers are ultimately the ones on the hook.

 

[fatduck]

I think social workers would typically qualify for PSLF though

So even if you take $200k debt, you are just making income based repayment for 10 years and then the balance is forgiven

Ok, so we as taxpayers foot the bill for this horrible decision to overpay for education.

drop in the bucket.  pslf is good policy overall.  helps retain public employees at lower compensation who would otherwise seek higher paying private employment.

but even if you consider forgiveness programs to be a true writeoff and ignore other positive externalities, federal student loans are still profitable for the government overall.

trying to micromanage all this stuff is just not worth it.  welfare queen hysteria all over again.  just set up the best incentives you can and let the dice roll.  milton friedman knew this.  modern conservatives don't seem to get it.

Federal student loans are not profitable once you account for future defaults.  A private lender would be required to set aside loss reserves (in effect taking the loss now to account for future defaults), but the government doesn't have to do this.  They only look at current cashflows when declaring profitability, while ignoring all the bad debt on their books that won't be written off until a future date.

Not only that, but the government notoriously underestimates the rate of future defaults to begin with (meaning the losses are always worse than they project) and there's no incentive to tighten up underwriting to reduce it because taxpayers are ultimately the ones on the hook.

they would not be profitable if they were being offered by a private lender, sure.  but they aren't.  the government doesn't have to set aside loss reserves because the government can print money.  they don't have to write off bad debt either.  they can garnish your income for 30 years through the IRS, and then when they "write off" the loan it's considered taxable income and they take a cut of that too.  no private lender could do that.

student loan defaults are not that costly to the government because the debt is very difficult to discharge in bankruptcy and you can't escape collections unless you just stop filing tax returns.

 

[eyephone]

I think the degree they are offering is questionable at that  $100k price.

 

[fatduck]

I think the degree they are offering is questionable at that  $100k price.

most degrees offer little substantive value beyond signaling.  you're buying USC brand name that's it.  i think it's a short sighted play by USC though.  though they aren't the only school doing this.  diluting their brand name for some easy cash.

that's true even of the lionized STEM degrees.  i have EECS and law degrees.  the main value of both was opening doors.  99% of education is on the job.