US Politics Mega-thread - Page 9537

On December 15 2017 11:51 zlefin wrote:

what about a thoroughly unconventional tax bill that violates some basic standards?

On December 15 2017 11:58 Danglars wrote:

Does it make you long for the fall of the government or buildings on fire too? I hardly know what kind of tax cut you’d consider conventional of all people.

On December 15 2017 12:01 mozoku wrote:

What is unconventional about this tax bill? I thought we we're talking about the bill, not process.

On December 15 2017 12:07 Plansix wrote:

But the bill is the process. Without public hearing, we know nothing and have no input. The bill is unconventional because no one knows what it will do.

Who Is More Likely to Default on Student Loans? Liberty Street Economics

This post seeks to understand how educational characteristics (school type and selectivity, graduation status, major) and family background relate to the incidence of student loan default. Student indebtedness has grown substantially, increasing by 170 percent between 2006 and 2016. In addition, the fraction of students who default on those loans has grown considerably. Of students who left college in 2010 and 2011, 28 percent defaulted on their student loans within five years, compared with 19 percent of those who left school in 2005 and 2006. Since defaulting on student loans can have serious consequences for credit scores and, by extension, the ability to purchase a home and take out other loans, it’s critical to understand how college and family characteristics correspond to default rates.

To better understand the determinants of student loan default, we ask the following questions in this blog post:

Do default rates differ by college type?
How do default rates of dropouts compare to those of graduates, and does this relationship vary by degree program?
Does default vary with college major?
Does college selectivity (defined below) matter for this relationship, and for student loan default more generally?
Are students from less advantaged backgrounds more likely to default than students from more advantaged backgrounds?

To answer these questions, we utilize a unique data set that matches the New York Fed Consumer Credit Panel (CCP), based on Equifax data, to National Student Clearinghouse (NSC) education data, allowing us to track student debt and educational attainment over time for a representative sample of young adults. Throughout this discussion, it is important to note that our analysis is descriptive and, while suggestive, does not necessarily imply causation. For example, our results could partially reflect differences in the backgrounds and financial means of students who choose to attend various colleges.

As in our previous work with this data set, we focus on individuals born between 1980 and 1986 and track their college attendance and student loan default status by age. In this post, since we focus on determinants of student loan default, we limit our sample to students who took out student debt to finance their education. We focus on the characteristics associated with the highest degree-granting institution a student attended before age twenty-seven. We study default rates by age: out of all student loan holders in the 1980–86 birth cohorts, what fraction of people of a given age has defaulted on at least one of their student loans?

To examine differences in default rates by college type, we classify student debt holders by the type of college attended: did they attend a public, private not-for-profit, or private for-profit college, and was it a two-year institution or a four-year institution?

As seen in the chart below, students who attended private for-profit institutions have the highest default rates after their mid-twenties (shown in the blue lines). In contrast, at every age, four-year private not-for-profit students—the solid gold line—have the lowest default rates. For every college type (public, not-for-profit and for-profit), two-year students (dashed lines) have higher default rates than four-year students (solid lines). While this largely reflects the higher earnings prospects enjoyed by four-year students, it also partly reflects the earlier start of the loan repayment period for two-year students and inherent differences between two- and four-year students.

Interestingly, though the difference in default rates between two- and four-year private college students is not large (less than 5 percentage points at age thirty-three), this is not the case for public college students. Default rates for community college (two-year public college) students are nearly 25 percentage points higher than those for their counterparts in four-year public colleges. The chart below also shows that while for-profit students have the highest default rates, the default rates of community college students are not too different from those of for-profit students (36 percent versus 42 percent for two-year and 39 percent for four-year for-profit students, respectively, at age thirty‑three).

The next chart categorizes student debt holders by graduation status as well as by degree program. (Throughout this discussion, “bachelor’s” and “bachelor’s or higher” refer interchangeably to those with bachelor’s or higher-level degrees.) Regardless of degree program, dropouts have higher default rates at every age than graduates—likely because graduates enjoy the labor market benefits of having earned a degree, making it easier for them to find better jobs and repay their loans. However, among dropouts, the default comparison between associate and bachelor’s degree students changes over time. Bachelor-seeking students who did not graduate default at nearly the same rate as dropouts in associate programs until age twenty-nine, when the associate default rate climbs substantially, surpassing that of bachelor’s students.

Among graduates, those with associate degrees default at higher rates than those with bachelor’s degrees since their early twenties; the difference by age thirty-three is much larger among graduates (13 percentage points) than among dropouts (4 percentage points). This chart strongly suggests that graduation markedly reduces defaults, and the bachelor’s degree premium (as far as defaults are concerned) is considerably greater among graduates than dropouts. To put these numbers in perspective, 53 percent of debt holders graduate and 90 percent of those people earn a bachelor’s degree. Among loan holders who drop out, 28 percent were enrolled in an associate program.

In the next chart, we categorize student loan holders by the selectivity of the college they attended and by the major they pursued. Using Barron’s Profile of American Colleges (2001) ranking of college competitiveness, we classify four-year colleges into two categories: “selective” (colleges ranked “competitive” or above by Barron’s) and “nonselective.” In addition, we classify students into one of four fields, based on their major: “Arts and Humanities” (majors such as languages, sociology, theater), “Business and Law” (economics, legal studies, management), “STEM” (science, technology, engineering, mathematics), and “Vocational” (aviation, cosmetology, welding).

In analysis not reported here, we find that Arts majors have the highest overall default rates, while STEM majors default at the lowest rates. Both Business and Vocational majors default at higher rates than STEM majors, but at rates closer in magnitude to STEM majors than to Arts majors. Next, we separate students not only by major, but also by school selectivity; the chart below presents patterns at age thirty-three. We find that students attending nonselective colleges have higher default rates no matter what they study. Arts majors have the highest default rates regardless of college selectivity, but major matters much more among students at nonselective colleges: the gap in default rates between the best performing major and worst performing major is much smaller (3 percentage points by age thirty-three) among students at selective colleges than among students at nonselective colleges (8 percentage points by age thirty‑three).

Next, to analyze differences with respect to family background, we categorize individuals according to the average 2010 income in the zip code in which they resided at the youngest age we observe them in our data. We divide the panel between individuals from areas with an average income above $55,000 and those from areas with an average income below $55,000 (as measured in 2010). In analysis not reported here, we found that students from less advantaged family backgrounds have higher default rates. To understand this relationship, we investigate whether this correlation differs by college type.

In the chart below, we group debt holders by our family background measure, as well as by college type. We find that within each college type, students from less-advantaged backgrounds have higher default rates than their peers from a more-advantaged background. There is a nearly 30 percentage point difference in default rates between the group with the highest default rates (private for-profit students from less advantaged backgrounds) and the group with the lowest default rates (private not-for-profit students from more advantaged backgrounds). However, public college students from more advantaged backgrounds default at nearly the same rate as private not-for-profit students from less advantaged backgrounds (about 20 percent by age thirty-three). As before, at every age, for-profit students have the highest default rates, and students from less advantaged backgrounds attending for-profit colleges default at an even higher rate.

These stark differences in default rates with respect to school type, graduation status, college selectivity, major, and family background continue to hold even when we look at conditional correlations in a simple regression framework, introducing all these variables simultaneously. Attending a four-year private for-profit college correlates most strongly with increasing default, while dropping out is the second strongest predictor of default. These patterns are consistent with our finding that students from different educational and family backgrounds experience different returns on their academic investments. Our data show that students who drop out before earning a degree, enroll in an associate degree program as opposed to a bachelor’s degree program, major in the arts, attend a for-profit institution, community college or non-selective college, or come from a less advantaged family background are more likely to default by their late twenties compared to their peers. This represents preliminary evidence that later life outcomes—for example, the ability to buy a home and maintain a strong credit score—may vary widely among student loan holders based on their educational choices and backgrounds.

On December 15 2017 12:05 zlefin wrote:

a non-answer, i'll take that as a your being intentionally disingenuous to cover for your blatant partisan hackery.

On December 15 2017 12:25 Danglars wrote:

You cut in with an angle on a little bit of back and forth with me and StealthBlue. Reread and give your opinion, or don’t, it matters very little to me. You’ve repeatedly said how you won’t be responding to me in the future, and it appears you’re actively doing it, albeit with many more posts than I thought it would take you.

On December 15 2017 04:21 IyMoon wrote:


The map is REALLY stacked against the dems. If we are going on both sides having non bat shit crazy people running I give it to the Rs for the senate

On December 15 2017 13:31 crms wrote:
He will get confirmed anyway.

The tour comes at a critical moment for America and the world. It began on the day that Republicans in the US Senate voted for sweeping tax cuts that will deliver a bonanza for the super wealthy while in time raising taxes on many lower-income families. The changes will exacerbate wealth inequality that is already the most extreme in any industrialized nation, with three men – Bill Gates, Jeff Bezos and Warren Buffet – owning as much as half of the entire American people.

A few days into the UN visit, Republican leaders took a giant leap further. They announced plans to slash key social programs in what amounts to an assault on the already threadbare welfare state.

“Look up! Look at those banks, the cranes, the luxury condos going up,” exclaimed General Dogon, who used to be homeless on Skid Row and now works as a local activist with Lacan. “Down here, there’s nothing. You see the tents back to back, there’s no place for folks to go.”

California made a suitable starting point for the UN visit. It epitomizes both the vast wealth generated in the tech boom for the 0.001%, and the resulting surge in housing costs that has sent homelessness soaring. Los Angeles, the city with by far the largest population of street dwellers in the country, is grappling with crisis numbers that increased 25% this past year to 55,000.

Ressy Finley, 41, was busy sterilizing the white bucket she uses to slop out in her tent in which she has lived on and off for more than a decade. She keeps her living area, a mass of worn mattresses and blankets and a few motley possessions, as clean as she can in a losing battle against rats and cockroaches. She also endures waves of bed bugs, and has large welts on her shoulder to prove it.

She receives no formal income, and what she makes on recycling bottles and cans is no way enough to afford the average rents of $1,400 a month for a tiny one-bedroom. A friend brings her food every couple of days, the rest of the time she relies on nearby missions.

She cried twice in the course of our short conversation, once when she recalled how her infant son was taken from her arms by social workers because of her drug habit (he is now 14; she has never seen him again). The second time was when she alluded to the sexual abuse that set her as a child on the path towards drugs and homelessness.

Given all that, it’s remarkable how positive Finley remains. What does she think of the American Dream, the idea that everyone can make it if they try hard enough? She replies instantly: “I know I’m going to make it.”

A 41-year-old woman living on the sidewalk in Skid Row going to make it?

“Sure I will, so long as I keep the faith.”

What does “making it” mean to her?

“I want to be a writer, a poet, an entrepreneur, a therapist.”

Robert Chambers occupies the next patch of sidewalk along from Finley’s. He’s created an area around his tent out of wooden pallets, what passes in Skid Row for a cottage garden.

Advertisement

He has a sign up saying “Homeless Writers Coalition”, the name of a group he runs to give homeless people dignity against what he calls the “animalistic” aspects of their lives. He’s referring not least to the lack of public bathrooms that forces people to relieve themselves on the streets.

LA authorities have promised to provide more access to toilets, a critical issue given the deadly outbreak of Hepatitis A that began in San Diego and is spreading on the west coast claiming 21 lives mainly through lack of sanitation in homeless encampments. At night local parks and amenities are closed specifically to keep homeless people out.

Skid Row has had the use of nine toilets at night for 1,800 street-faring people. That’s a ratio well below that mandated by the UN in its camps for Syrian refugees.

“It’s inhuman actually, and eventually in the end you will acquire animalistic psychology,” Chambers said.

He has been living on the streets for almost a year, having violated his parole terms for drug possession and in turn being turfed out of his low-cost apartment. There’s no help for him now, he said, no question of “making it”.

“The safety net? It has too many holes in it for me.”

Of all the people who crossed paths with the UN monitor, Chambers was the most dismissive of the American Dream. “People don’t realize – it’s never getting better, there’s no recovery for people like us. I’m 67, I have a heart condition, I shouldn’t be out here. I might not be too much longer.”

That was a lot of bad karma to absorb on day one, and it rattled even as seasoned a student of hardship as Alston. As UN special rapporteur, he’s reported on dire poverty and its impact on human rights in Saudi Arabia and China among other places. But Skid Row?

“I was feeling pretty depressed,” he told the Guardian later. “The endless drumbeat of horror stories. At a certain point you do wonder what can anyone do about this, let alone me.”

And then he took a flight up to San Francisco, to the Tenderloin district where homeless people congregate, and walked into St Boniface church.

What he saw there was an analgesic for his soul.

Black people are 13% of the US population, but 23% of those officially in poverty and 39% of the homeless.

The racial element of America’s poverty crisis is seen nowhere more clearly than in the Deep South, where the open wounds of slavery continue to bleed. The UN special rapporteur chose as his next stop the “Black Belt,” the term that originally referred to the rich dark soil that exists in a band across Alabama but over time came to describe its majority African American population.

The link between soil type and demographics was not coincidental. Cotton was found to thrive in this fertile land, and that in turn spawned a trade in slaves to pick the crop. Their descendants still live in the Black Belt, still mired in poverty among the worst in the union.

You can trace the history of America’s shame, from slave times to the present day, in a set of simple graphs. The first shows the cotton-friendly soil of the Black Belt, then the slave population, followed by modern black residence and today’s extreme poverty – they all occupy the exact same half-moon across Alabama.

There are numerous ways you could parse the present parlous state of Alabama’s black community. Perhaps the starkest is the fact that in the Black Belt so many families still have no access to sanitation. Thousands of people continue to live among open sewers of the sort normally associated with the developing world.

The crisis was revealed by the Guardian earlier this year to have led to an ongoing endemic of hookworm, an intestinal parasite that is transmitted through human waste. It is found in Africa and South Asia, but had been assumed eradicated in the US years ago.

Yet here the worm still is, sucking the blood of poor people, in the home state of Trump’s US attorney general Jeff Sessions.