By Carolyn Thompson, Associated Press, March 27, 2014
Every month that Gregory Zbylut pays $1,300 toward his law school loans is another month of not qualifying for a decent mortgage.
Every payment toward their student loans is $900 Dr. Nida Degesys and her husband aren’t putting in their retirement savings account.
They believe they’ll eventually climb from debt and begin using their earnings to build assets rather than fill holes. But, like the roughly 37 million others in the U.S. saddled with $1 trillion in student debt, they may never catch up with wealthy peers who began life after college free from the burden.
The disparity, experts say, is contributing to the widening of the gap between rich and everyone else in the country.
“If you graduate with a B.A. or doctorate and you get the same job at the same place, you make the same amount of money,” said William Elliott III, director of the Assets and Education Initiative at the University of Kansas. “But that money will actually mean less to you in the sense of accumulating assets in the long term.”
Graduates who can immediately begin building equity in housing or stocks and bonds get more time to see their investments grow, while indebted graduates spend years paying principal and interest on loans. The standard student loan repayment schedule is 10 years but can be much longer.
The median 2009 net worth for a household without outstanding student debt was $117,700, nearly three times the $42,800 worth in a household with outstanding student debt, according to a report co-written by Elliott last November.
About 40 percent of households led by someone 35 or younger have student loan debt, a 2012 Pew Research Center analysis of government data found.
Allen Aston is one of the lucky ones, having landed a full academic and financial-need scholarship at Ohio State University. The 22-year-old software engineer from Columbus estimates it let him avoid about $100,000 in debt.
Without loans to repay, Aston is already contributing 6 percent of his salary to a retirement fund that is matched in part by his employer and doesn’t have the same financial concerns his friends do.
“I’m making the same money as them, but they have student loans they’re paying back that I don’t. So, it definitely seems noticeable,” he said.
At the other end of the spectrum is Zbylut, an accountant-turned-attorney in Glendale, Calif. He’s been chipping away at nearly $160,000 in student debt since graduating in 2005 from law school at Loyola University in Chicago. Now 48, the tax attorney estimates he could have $150,000 to $200,000 in a 401(k) had the money he’s paid toward loans gone there.
“I’m sitting here in traffic. I’ve got a Mercedes behind me and an Audi in front of me and I’m thinking, ‘What did they do that I didn’t do?’” Zbylut said by cellphone from his Chevrolet. He’s been turned down twice for the type of mortgage he needs to buy a home big enough for himself, the fiancee he would have married already if not for his debts and her 10-year-old son.
“I have more education and more degrees than my father, as does she than her parents, and yet our parents are better off than we are. What’s wrong with this picture?” he said.
Student debt is the only kind of household debt that rose through the Great Recession and now totals more than either credit card or auto loan debt, according to the Federal Reserve Bank of New York. Both the number of borrowers and amount borrowed ballooned by 70 percent from 2004 to 2012.
Of the nearly 20 million Americans who attend college each year, about 12 million borrow, according to the Almanac of Higher Education. Estimates show that the average four-year graduate accumulates $26,000 to $29,000 in loans, and some leave college with six figures worth of debt.
The Guardian, Feb. 26, 2014
Like all the best hoaxes, there was a serious point to be made. Three MIT graduate students wanted to expose how dodgy scientific conferences pestered researchers for papers, and accepted any old rubbish sent in, knowing that academics would stump up the hefty, till-ringing registration fees.
It took only a handful of days. The students wrote a simple computer program that churned out gobbledegook and presented it as an academic paper. They put their names on one of the papers, sent it to a conference, and promptly had it accepted. The sting, in 2005, revealed a farce that lay at the heart of science.
But this is the hoax that keeps on giving. The creators of the automatic nonsense generator, Jeremy Stribling, Dan Aguayo and Maxwell Krohn, have made the SCIgen program free to download. And scientists have been using it in their droves. This week, Nature reported, French researcher Cyril Labbé revealed that 16 gobbledegook papers created by SCIgen had been used by German academic publisher Springer. More than 100 more fake SCIgen papers were published by the US Institute of Electrical and Electronic Engineers (IEEE). Both organisations have now taken steps to remove the papers.
Hoaxes in academia are nothing new. In 1996, mathematician Alan Sokal riled postmodernists by publishing a nonsense paper in the leading US journal, Social Text. It was laden with meaningless phrases but, as Sokal said, it sounded good to them. Other fields have not been immune. In 1964, critics of modern art were wowed by the work of Pierre Brassau, who turned out to be a four-year-old chimpanzee. In a more convoluted case, Bernard-Henri Lévy, one of France’s best-known philosophers, was left to ponder his own expertise after quoting the lectures of Jean-Baptiste Botul as evidence that Kant was a fake, only to find out that Botul was the fake, an invention of a French reporter.
Just as the students wrote a quick and dirty program to churn out nonsense papers, so Labbé has written one to spot the papers. He has made it freely available, so publishers and conference organisers have no excuse for accepting nonsense work in future.
Krohn, who has now founded a startup called Keybase.io in New York that provides encryption to programmers, said Labbé’s detective work revealed how deep the problem ran. Academics are under intense pressure to publish, conferences and journals want to turn their papers into profits, and universities want them published. “This ought to be a shock to people,” Krohn said. “There’s this whole academic underground where everyone seems to benefit, but they are wasting time and money and adding nothing to science. The institutions are being ripped off, because they pay publishers huge subscriptions for this stuff.”
Krohn sees an arms race brewing, in which computers churn out ever more convincing papers, while other programs are designed to sniff them out. Does he regret the beast he helped unleash, or is he proud that it is still exposing weaknesses in the world of science? “I’m psyched, it’s so great. These papers are so funny, you read them and can’t help but laugh. They are total bullshit. And I don’t see this going away.”