NevDull’s Take On Things

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Add comment May 3rd, 2009

Sustaining the Unsustainable - Student Loan Debt

When you take some time to think about the mortgage crisis that’s helped turn our markets to mud, it seems to come down to overpaying for things without a well-reasoned calculation of risk.

Until about a month ago, I lived in Greenwich Village in New York, and walked by New York University’s buildings each day. According to the College Board, the costs for a student who lives on campus total $51,982 a year.

Assuming no increase in costs, that’s $207,928 for an undergraduate degree.

Somehow, they report that the average indebtedness at graduation is $33,637. I presume that they’re referring to the debt load that the student carries. What won’t show up in that figure is the amount of home equity borrowed against by parents to pay the expected family contribution.

In any event, someone’s coming up with $200k. There are many reasons why self-selection would dictate that the median household income of students at NYU would be higher than the $50,233 American average, but even if the average is twice that, after taxes and living expenses for the rest of the family, they’re not coming up with $52k out of pocket, unless they’ve been extraordinarily diligent in saving.

While undoubtedly there are a number of students who will work at high-paying jobs coming right out of school, most of their classmates won’t. Parents won’t always make rational decisions, putting something like the pride of having a child at Princeton above economic sense. If they’ve got the money, it’s none of my concern. If they don’t… who bears the consequences?

Imagine graduating college with $100,000 in debt, at 21 years of age. Assume that the graduate may have a child 10 years later. If a parent’s education isn’t paid off by the birth of his child, when will the cycle end? That’s $833 per month, every month, for 10 years, before considering interest. Twice that for a couple.

How do we get some sanity here?

Making more money available isn’t the answer. Maybe we shouldn’t be trying to send everyone to college. Maybe we should treat education loans more like standard unsecured credit, or make education loan decisions based upon likely ability to repay given not just credit history, but school transcripts and historical economic success of similar loan applicants.

Of course, that idea dies an early death at the hands of those who think it unfair to the economically disadvantaged. So… what do we do? And how do we not screw ourselves with subprime education lending?

Are the people losing their houses now paying their student loans? Are they going to be any time soon?

1 comment May 3rd, 2009

Just when you think you’re clever…

I thought I was clever coming up with the term paraffinalia for the stuff Amy bought to make candles, only to find that there’s already a company Paraffinalia Candles. *sigh*

1 comment April 1st, 2009

Spelling does count.

Spelling does count. If the sender, subject line, or your message is misspelled, I’m far more likely to think that it’s spam and bin it. I’m fine with the false positives which may make it into the bit bucket if you didn’t take the time to figure out how to spell what you wanted to tell me. *cough*joe*cough*

And I’m not buying from you if your math is horrible and it makes a difference to what I’m buying. A dimwitted marketer put this on thestreet.com below an article I was reading.

Hmm… while it’s true that if I’d bought and sold at the prices indicated, $18.37 and $37.82 respectively, I would indeed have made over 50% on the investment, as you advertised. But if you’re advertising what a financial genius you are, shouldn’t you be noting that buying something for $18.37 and selling it for $37.82 brings you a return of over 100%? I think on math alone, I’m far better with my bad guess strategies than with this genius guiding me.

Add comment December 15th, 2008

2008 Reading List, Part I

This has been a year of considerable introspection. I’ve been on a journey of learning, renewed by the availability of wonderful content online which I could carry with me. I haven’t read many books, but I’ve listened to a lot of them on my iPod or iPhone. I’ve listened to and watched podcasts. I’ve listened to lectures, to books about religion, philosophy, science, mathematics, politics, and biographical histories.

I’ve had a cherished few conversations which have opened my eyes quite a bit. I’ve been inspired. I’ve cried tears of hope and been overcome by generosity. I’ve been selfish and selfless, gotten my priorities and my budget screwed up, corrected for a while, and let them get back out of hand. But I haven’t stopped learning.

I’m going to dig up some of the names of books and authors and urls.

Last year I saw An Inconvenient Truth, and came to my own conclusion. A conclusion that I needed to look harder both in the mirror and into enough of the science for me to know that there’s an impact of our fossil-fuel burning behavior. And I think that the solutions need to be scalable beyond what people without a purpose can accomplish. This isn’t about the incandescent bulbs I still have in my bathrooms because we like the light better. I’m not exempt from responsibility by any means. But my purpose can’t be limited to my home. My home, in the whole scheme of things, even if it were an adobe hut with no electricity or combustion going on in it wouldn’t change the world.

It may have been the beginning of a search for purpose, something to become comfortable with a sense of purpose independent of a simple regression to nature, with enough political sophistication to consider the absolutes of my ideology negotiable if it’s for the common good. Ah, but there’s the rub… what’s the common good? Who’s defining it? What has his day been like? Can there be a worldwide common good?

We have to consider what we call rights… and reconsider which may be privileges. And make sure we don’t call the privileges rights. If government is going to play a guardian role, and its citizens have rights, then the government will eventually end up providing for those rights because it is cruel not to ensure every man his rights. If they are privileges, then even if the government does pilot a program which subsidizes that privilege because it may be a social experiment, then they can be withdrawn when the test is over. Taking away rights should be hard to do. Let’s take the time to reconsider what our personal goals are, and see if they can be separated from what we want for rights. They can still be goals.

Early in the year, I listened to the Richard Dawkins book The Ancestor’s Tale, which got me thinking about purpose. What’s lurking back in our evolutionary past which can tell me about society’s role which appears to be counter to the “natural way of things”.

Knowing that Dawkins was famously atheist, I then listened to The God Delusion, which I’d been refraining from because I didn’t want to look to be a militant atheist. Or did I? The fact that I could consider the evolutionary process that life has taken, and how I was deriving some sense of the world — and that sense was subject to revision with new evidence, but that new evidence will always be threatening to organized religion, I found my comfortable place.

A desire to seek alternate views from what could be considered similar brought me to the Christopher Hitchens book God Is Not Great: How Religion Poisons Everything. I chatted a bit with a friend who’d read both authors and found Hitchens tolerable, but Dawkins too in-your-face. My personal interpretation is that Hitchens looks down his nose at the religious, and thinks them ninnies, but Dawkins seems to want to change them.

And then I saw this TED Talk by Dr. Ramachandran which contained a section on his research into relieving phantom limb pain. Understanding my perception of the role the mind plays in pain in a limb that is no longer there — hint: it’s not the nerve damage — it made me understand that what really matters to people most is what impact it has on his mind. Just like the rational explanation that the limb isn’t there not making the phantom pain any less real, it’s not that trivial to convince a religious person that her deity isn’t real.

More to come in another post, soon…

1 comment December 11th, 2008