2022 Midterms

[Farfromgeneva]

what still ain’t understood is the price to go to college is the same for the rich kid and the poor kid.

depends on where you go to school. My experience (5 kids) - is the schools do a rectal exam of your finances and charge what they think the parent can eek out - including dumping debt on the parents. If I was smart, I would have had all my kids emancipate themselves - give up my dependent tax deduction and let them apply as wards of the state. I probably would have saved a solid 6 figures in higher ed costs

Inflating a sticker price is all that matters. No different than in auto or real estate, it causes unnecessary inflation regardless of the net. To your point it’s stuffed with debt into hair that don’t have liquid resources. And in this context of a $10k forgiveness while still allowing cost to go uncontrolled on induced to behave otherwise it doesn’t do anything but add to the tab. This will have the effect of inflating college costs further not reducing them.

[ggait]

College pricing is very opaque. Very similar to how the airlines do it.

The sticker price of a fancy private college ($75k) is kind of like buying a $$$ full price seat on United to fly tomorrow. Some people on the flight will pay that. But all the other people pay a wide variety of different prices depending -- advance purchase, cashing in miles, etc. etc. etc.

For colleges, the average actual net price is nowhere near the sticker price.

The highest price I paid for my three kids was full sticker for in-state at our home state flagship. $35k per year. Next was about $27k per year at a top 50 private (nice merit aid). Lowest was $18k per year at a top 15 private (full tuition merit schollie). No need based financial aid.

Fixing college pricing and forgiving student debt is a real hornets nest that would challenge any Nobel economist. There's the relatively small amount of debt that kids can borrow for undergrad; then the bigger amounts that parents can borrow for kids; and then the biggest amounts that kids can borrow for grad school. The stories about someone with $200k student debt is always med school debt (which can make economic sense) or law school debt (totally idiotic).

Personally, I support throwing money only at the very bottom of the system. Pell grants and free community college for all. It gets very moral hazard complicated when you get into the broader system. Starts to approach health care in how wacky it is.

[Farfromgeneva]

Check out that link CU88 had on CC offering a skill/trade oriented 4yr degree. Interesting to consider anyways.

[HooDat]

Personally, I support throwing money only at the very bottom of the system. Pell grants and free community college for all.

yep, yep, yep!

Check out that link CU88 had on CC offering a skill/trade oriented 4yr degree. Interesting to consider anyways.

I like these kinds of programs as well. High schools used to offer this kinds of stuff. I had buddies in high school that graduated as certified auto mechanics and what-ever the first level of "real" (higher than apprentice) printer was/is.

[Farfromgeneva]

Personally, I support throwing money only at the very bottom of the system. Pell grants and free community college for all.

yep, yep, yep!

Check out that link CU88 had on CC offering a skill/trade oriented 4yr degree. Interesting to consider anyways.

I like these kinds of programs as well. High schools used to offer this kinds of stuff. I had buddies in high school that graduated as certified auto mechanics and what-ever the first level of "real" (higher than apprentice) printer was/is.

I mean honestly even things like basic accounting degrees, certain types of STEM, operations Mgt, etc could be included. Didn’t mean simply trade BOCES type stuff.

[HooDat]

Personally, I support throwing money only at the very bottom of the system. Pell grants and free community college for all.

yep, yep, yep!

Check out that link CU88 had on CC offering a skill/trade oriented 4yr degree. Interesting to consider anyways.

I like these kinds of programs as well. High schools used to offer this kinds of stuff. I had buddies in high school that graduated as certified auto mechanics and what-ever the first level of "real" (higher than apprentice) printer was/is.

I mean honestly even things like basic accounting degrees, certain types of STEM, operations Mgt, etc could be included. Didn’t mean simply trade BOCES type stuff.

EXACTLY! It just shouldn't be that hard.

[CU88]

Personally, I support throwing money only at the very bottom of the system. Pell grants and free community college for all.

yep, yep, yep!

Check out that link CU88 had on CC offering a skill/trade oriented 4yr degree. Interesting to consider anyways.

I like these kinds of programs as well. High schools used to offer this kinds of stuff. I had buddies in high school that graduated as certified auto mechanics and what-ever the first level of "real" (higher than apprentice) printer was/is.

I mean honestly even things like basic accounting degrees, certain types of STEM, operations Mgt, etc could be included. Didn’t mean simply trade BOCES type stuff.

EXACTLY! It just shouldn't be that hard.

+1

[a fan]

Personally, I support throwing money only at the very bottom of the system. Pell grants and free community college for all.

yep, yep, yep!

Check out that link CU88 had on CC offering a skill/trade oriented 4yr degree. Interesting to consider anyways.

I like these kinds of programs as well. High schools used to offer this kinds of stuff. I had buddies in high school that graduated as certified auto mechanics and what-ever the first level of "real" (higher than apprentice) printer was/is.

I mean honestly even things like basic accounting degrees, certain types of STEM, operations Mgt, etc could be included. Didn’t mean simply trade BOCES type stuff.

EXACTLY! It just shouldn't be that hard.

Yes! +1000

My assistant distiller's son? Finishing a BOCES-like program out here, will graduate in the spring. Loves building things. Was a finalist a month ago for a Home Depot (Or Lowe's can't remember) National HS contest for building to plan.

He has a job waiting for him working for the same General Contractor that built our distillery, and is working on our expansion. He'll be making six figures before he's 25 so long as he wants a bit of overtime.

I'd LOVE for him to be able to waltz in to his local CC, and get more training to improve his marketability....and get it for nothing.

INVEST in our kids.

[HooDat]

I'd LOVE for him to be able to waltz in to his local CC, and get more training to improve his marketability....and get it for nothing.

INVEST in our kids.

maybe even take a few accounting classes so that he can start his own contractor business.....

[a fan]

I'd LOVE for him to be able to waltz in to his local CC, and get more training to improve his marketability....and get it for nothing

INVEST in our kids.

maybe even take a few accounting classes so that he can start his own contractor business.....

Absolutely!

You know it's funny....no one ever told me that starting my own business was an option. I never studied finance, so it wasn't until my brother suggested that we start a business that I had any idea that it was possible!

I thought only rich people could start businesses. My brother laughed at me (as older brothers will do), and asked me how I thought most businesses started. I was 23 at the time, and told him....I thought it was just the kids from rich families who did that. Then he explained how loans work. And what the SBA does.

So whenever I've been in front of students over the years, I've always made sure I told them to remember that if they don't like their job or the way people are treated, or the way businesses are run? Quit complaining, and start your own business!

[Farfromgeneva]

I'd LOVE for him to be able to waltz in to his local CC, and get more training to improve his marketability....and get it for nothing

INVEST in our kids.

maybe even take a few accounting classes so that he can start his own contractor business.....

Absolutely!

You know it's funny....no one ever told me that starting my own business was an option. I never studied finance, so it wasn't until my brother suggested that we start a business that I had any idea that it was possible!

I thought only rich people could start businesses. My brother laughed at me (as older brothers will do), and asked me how I thought most businesses started. I was 23 at the time, and told him....I thought it was just the kids from rich families who did that. Then he explained how loans work. And what the SBA does.

So whenever I've been in front of students over the years, I've always made sure I told them to remember that if they don't like their job or the way people are treated, or the way businesses are run? Quit complaining, and start your own business!

Agreed thought they don’t turn into “franchises” always (meaning intangible value created beyond book) as I’ve learned. Frankly the growth of the big economy made a lot of people businesses. I’m heading back personally, had my first large (only) delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

[HooDat]

I've always made sure I told them to remember that if they don't like their job or the way people are treated, or the way businesses are run? Quit complaining, and start your own business!

I say this to my kids and every young person I talk to. You think starting a business is risky? No, putting your ability to feed your family in someone else's hands - THAT is risky.

[HooDat]

delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

I also have to work real hard not to mock the money center I-bankers when they go on about what great business people they are. If you've never stayed awake at night desperately trying to figure out how you are going to make the next payroll .... you don't know squat about business.

[a fan]

I’m heading back personally, had my first large (only) delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

That was the hardest part of the pandemic for us......wholesalers who were stuck with millions of net30 from restaurants that could NEVER pay them back. So that meant that checks from every wholesaler except the big shops were behind. That's where 20 years of cultivating trust and relationships kicked in....we told our key States that they could pay us when they can pay us.

So although they were late? They were grateful for the extension of credit, as well as the upfront understanding of what we were facing as partners.

It's the biggest thing I've learned over the years----treat all your suppliers and customers as PARTNERS in business. Do that? Your mindset changes, and you'll wind up surprised by what you can accomplish together.

[a fan]

delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

I also have to work real hard not to mock the money center I-bankers when they go on about what great business people they are. If you've never stayed awake at night desperately trying to figure out how you are going to make the next payroll .... you don't know squat about business.

10+ years of that feeling for my brother and I. It's why we feel like we have won the lottery now that the 1st of the month doesn't make my blood pressure rise.... 12 times a year.

[Farfromgeneva]

delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

I also have to work real hard not to mock the money center I-bankers when they go on about what great business people they are. If you've never stayed awake at night desperately trying to figure out how you are going to make the next payroll .... you don't know squat about business.

Ibankers are producers. They are their own businesses inside a enterprise with small teams and their own P&L. Doesn’t mean they can’t be great advisors to business but they are often not very good managers of business. Big difference between pitch books and models and the real world. Exceptions maybe in CRE, Finance (outside banking) where mark to model reigns supreme.

But the ones I know rarely talked about their business acumen in my experience. Too bad but not surprised you had that experience. Doesn’t help whatever work you are doing to have crap advisors.

I’ve done that and I also spent a small stint as a CRO for a ABL banker on a liquor distribution business in FL where I had to make payroll and worry about guys running off with inventory. Also worked out bad loans to business. So seen every side at this stage. They all have value and they are all different.

[a fan]

delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

I also have to work real hard not to mock the money center I-bankers when they go on about what great business people they are. If you've never stayed awake at night desperately trying to figure out how you are going to make the next payroll .... you don't know squat about business.

Ibankers are producers. They are their own businesses inside a enterprise with small teams and their own P&L. Doesn’t mean they can’t be great advisors to business but they are often not very good managers of business. Big difference between pitch books and models and the real world. Exceptions maybe in CRE, Finance (outside banking) where mark to model reigns supreme.

But the ones I know rarely talked about their business acumen in my experience. Too bad but not surprised you had that experience. Doesn’t help whatever work you are doing to have crap advisors.

I’ve done that and I also spent a small stint as a CRO for a ABL banker on a liquor distribution business in FL where I had to make payroll and worry about guys running off with inventory. Also worked out bad loans to business. So seen every side at this stage. They all have value and they are all different.

Man....you sure have had a lot of business experience, from entirely different angles. Gotta be a lot of value in that head of yours.

[Farfromgeneva]

delinquent A/R and could use the liquidity so this sucks. There’s a lot of value in that semi monthly/monthly paycheck someone else has to provide as any business owner would know.

I also have to work real hard not to mock the money center I-bankers when they go on about what great business people they are. If you've never stayed awake at night desperately trying to figure out how you are going to make the next payroll .... you don't know squat about business.

Ibankers are producers. They are their own businesses inside a enterprise with small teams and their own P&L. Doesn’t mean they can’t be great advisors to business but they are often not very good managers of business. Big difference between pitch books and models and the real world. Exceptions maybe in CRE, Finance (outside banking) where mark to model reigns supreme.

But the ones I know rarely talked about their business acumen in my experience. Too bad but not surprised you had that experience. Doesn’t help whatever work you are doing to have crap advisors.

I’ve done that and I also spent a small stint as a CRO for a ABL banker on a liquor distribution business in FL where I had to make payroll and worry about guys running off with inventory. Also worked out bad loans to business. So seen every side at this stage. They all have value and they are all different.

Man....you sure have had a lot of business experience, from entirely different angles. Gotta be a lot of value in that head of yours.

Lot of noise too. I spread myself too thin for a long time and it caused me issues that ended with what Cradle likes to mock me about because I once shared privately with him. I told someone here recently though I need to go back to a paycheck even if I have to deal with TPO reports, stupid pointless meetings and FaceTime etc. Five odd years now of dabbling in different things including starting a business it’s time to go back to boring paycheck world.

[Farfromgeneva]

On the student loan topic from the economist. Echoes most of my thoughts.

Biden spends hundreds of billions on reducing student-loan debt
Good politics, maybe, but poor policy
IRVINE, CA - May 05: Vanguard University students prepare for the processional before graduation ceremonies at Mariners Church in Irvine, CA on Thursday, May 5, 2022. More than 500 students received diplomas in addition to over 100 graduates from 2020 who were unable to be recognized during COVID-19 restrictions. (Photo by Paul Bersebach/MediaNews Group/Orange County Register via Getty Images)
Aug 25th 2022 | WASHINGTON, DC

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Reforming the costly financing of higher education in America would require Congress to agree on a redesign, which would be an arduous and tiresome process. Joe Biden has instead decided to go it alone. On August 24th the president announced a sweeping debt-forgiveness plan through executive order. The federal government will remove up to $10,000 from the balances of individuals earning less than $125,000 a year (as 95% of Americans do), and $20,000 for those who received Pell grants, which are mostly awarded to university students from poor families. Yet despite Mr Biden’s effort to cut the Gordian knot of student debt, America will be tangled up in it again soon enough.

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Assuming the inevitable legal challenges fail, there will be many happy immediate beneficiaries. Progressives in the Democratic Party, who had been campaigning for years for either complete cancellation of $1.6trn held in student debt or wiping out as much as $50,000 per borrower, can cheer their victory after months of watching Senator Joe Manchin slowly asphyxiate their dreams. Even Mr Biden’s Solomonic compromise, which he had committed to as a presidential candidate, will completely wipe out existing debt for perhaps half of today’s borrowers.

But all that good will come at a dear price. Calculations are preliminary, but Marc Goldwein of the Committee for a Responsible Federal Budget (crfb), a think-tank, reckons Mr Biden’s pen stroke will cost between $400bn and $600bn. Having just dubbed its recently enacted climate-change and tax plan the Inflation Reduction Act—because it would reduce net federal expenditures by $300bn over the next decade—the White House might as well call this effort the Inflation Acceleration Action. Whereas most pandemic-relief programmes lapsed months ago, everyone holding student loans, rich or poor, has not had to make payments since March 2020. That has cost the federal government an estimated $60bn a year, making it twice as expensive as the mortgage-interest deduction afforded to homeowners (which now costs $30bn annually).


The analogy to the mortgage-interest deduction is apt in another way. It is hardly progressive. Owners of houses have higher incomes and wealth. Those with college and graduate degrees may start their working careers in greater debt, but command significantly higher wages later in life. According to the Bureau of Labour Statistics, the wage premium for a worker with some college education relative to one with just a high-school diploma is 11%; for a completed bachelor’s degree it is 65%; for a professional degree it is 138%.

When researchers at the Penn Wharton Budget Model, an academic costing outfit, evaluated the impact of a blanket forgiveness of $10,000 (even with a qualifying income cap of $125,000), they found that 69% of benefits accrued to those in the top 60% of the income distribution. The extra boost to Pell-grant recipients, which was a surprise, will make the move a bit less regressive. But the final verdict is unlikely to be a coup for the proletariat.

The deeper difficulty, however, is that partial debt cancellation is an expensive kludge atop a broken financing scheme that will not be repaired. Many European welfare states generously fund higher education for all. But in America, pairing universal financing with little cost discipline has created a moral hazard for colleges to increase prices. Despite the largesse displayed, the crfb estimates that aggregate debt loads will return to their present levels in five years.

“The problem is that the laws that have allowed this crisis to occur—this disaster to unfold—are still on the books,” says Adam Looney, a senior tax-policy adviser in Barack Obama’s administration and a professor at the University of Utah. “Every year, American students borrow $100bn in additional student loans. And they have the same terrible outcomes as borrowers who took out a loan ten years ago.”


Both parties think the political consequences are in their favour. Progressives hope that the policy will boost enthusiasm among disaffected youths. When Mr Biden, in remarks at the White House, said “this means people can start finally [to] climb out from under that mountain of debt,” he probably hoped that they would also make their way to the polls. (The pause on all student-debt payments was extended again until December, one month after the mid-term elections.) Mitch McConnell, the Republican leader in the Senate, prefers to term it “student-loan socialism”—a large redistribution from the working class to elites, and an inflationary one, to boot.

It will not be the last fight. One less-noticed change proposed by Mr Biden would reduce the amount directly paid by future borrowers—with the federal government picking up the rest of the tab. The problem’s ugly head will rear again shortly. ■

[jhu72]

I've always made sure I told them to remember that if they don't like their job or the way people are treated, or the way businesses are run? Quit complaining, and start your own business!

I say this to my kids and every young person I talk to. You think starting a business is risky? No, putting your ability to feed your family in someone else's hands - THAT is risky.

+1