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The Delinquent Borrowers Leading a Student Loans Revolt

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Re: The Delinquent Borrowers Leading a Student Loans Revolt

#61

Post by mikeyouse »

Camillo wrote: post #9

The absurd student loan system is what fueled tuition inflation in America. It needs to be abolished.

This is a much more controversial statement than most HNers give it credit.. It's by no means settled 'science' that government loan subsidies are the largest (or even a large) determinant of tuition costs. Colleges used to be much more subsidized by taxes which have been pared back for decades, the loans are the result of this change -- not the cause. Total tuition costs increase much faster than inflation but look at total costs per student for the college and it's a very different story.

Re: The Delinquent Borrowers Leading a Student Loans Revolt

#62

Post by cheriot »

evanpw wrote: post #17
cheriot wrote: post #14

There's two problems when students choose an institution: 1. Poor and too often manipulated information about a school's job placements. 2. Students are short sighted about debts and schools don't care because the money is government guaranteed. Solvable problems! Have an independent party collect and report on job placement. Then tie a school's loan eligibility more closely to the ability of recent graduates to pay.

It seems like it would be even better to tie eligibility to the borrower's major. Return on education expenses are more closely related to what you study rather than where you study it: http://www.economist.com/blogs/graphicdetail/2015/03/daily-c...

If we do both then both the school and student are incentivized! (I was thinking of the for profit schools owned by hedge funds)

Re: The Delinquent Borrowers Leading a Student Loans Revolt

#63

Post by cheriot »

nemo44x wrote: post #23
cheriot wrote: post #13

Earlier quoted context omitted.

Do poor students not get to go to college anymore or do you have another system in mind?

Work and save money before you enter a University. If you work and save for 2 years after high school you gain many advantages: 1) You will save some money to pay for school. 2) Because you are a bit older a new world of grants are available to you since you are returning to education. 3) Because your income will probably be fairly low you will qualify for more grants due to this fact. 4) Gives you time to figure out…

I like your reasoning, but I worry that the math of minimum wage jobs can't put people through school any more.

Re: The Delinquent Borrowers Leading a Student Loans Revolt

#64

Post by Camillo »

WeAllDieByBan wrote: post #43
Camillo wrote: post #9

The absurd student loan system is what fueled tuition inflation in America. It needs to be abolished.

Monetary policies after 2008, causing price increases due to artifical housing shortaged and asset bubbles are to blame.

That is completely false, as you would know if you had bothered to search for five seconds:

https://nces.ed.gov/fastfacts/display.asp?id=76

http://www.usnews.com/news/articles/2013/10/23/charts-just-h...

Re: The Delinquent Borrowers Leading a Student Loans Revolt

#65

Post by ersii »

littletimmy wrote: post #34
tomohawk wrote: post #15

Borrowing money is risky, and includes risks beyond a straight up cost/benefit analysis. It also makes the borrow more vulnerable (not just to the lender, but to others as well). It should never be entered into lightly. I sympathize with these folks who have gotten themselves into this situation, but they did make the choice of their own free will. If they didn't do a proper analysis ahead of time, it doesn't seem fa…

No. Society forced them into that choice. What on earth makes you think the choice was not coerced? A student before the age of 18 is presented with an option. Here's one path - be in massive debt. Here's the other path - your hopes and dreams are shit. That's freedom? Hardly. It's funny how all the moral hazard trolls come out of the woodwork as soon as something benefits poor people. Bank bailouts? No hazard. Corpo…

I respectfully disagree. No one is forced to take out a loan and go to college or university. You said it yourself, they do have options.

There might however be a lot more traction on one of the paths as compared to the other.

You're presenting this proposition as that the only way someone can make it, is by pursuing a higher education (with severe debt). I, again respectfully disagree. It is not that binary.

First of all, the path of not going into higher education is not as ridiculous as you make it sound.

Secondly, there are many variations of how to finance your higher education. You do not have to take out a loan. Especially not for the full duration of your studies.

Re: The Delinquent Borrowers Leading a Student Loans Revolt

#66

Post by ersii »

littletimmy wrote: post #36

One way to deal with the student loans crisis is for a nationwide student loan bailout. You don't have to erase the loans, just refinance them at a much lower interest rate. Currently the rate is 7%, which is just insane. For a virtually no-risk loan, which cannot even be discharged in default, that is a terribly high rate. Refinancing will be a transfer of wealth from the rich to the poor. Good for the economy, shor…

In Sweden - the current interest rate is 1%. This is financed by the state and is low because of a multitude of factors. One being that it is practically impossible to default on the loan. It will stick around.

(The tuition is free for higher education in Sweden, but you can choose to take out a loan for your living expenses during your study period).

Re: The Delinquent Borrowers Leading a Student Loans Revolt

#67

Post by adebtlawyer »

m_fayer wrote: post #18
tomohawk wrote: post #15

Borrowing money is risky, and includes risks beyond a straight up cost/benefit analysis. It also makes the borrow more vulnerable (not just to the lender, but to others as well). It should never be entered into lightly. I sympathize with these folks who have gotten themselves into this situation, but they did make the choice of their own free will. If they didn't do a proper analysis ahead of time, it doesn't seem fa…

For those trying to escape poverty, disadvantaged teenagers must choose between debt and the permanent surrender of their hopes and dreams. Hardly a situation where the borrower can be expected to make a dispassionate calculation, nor is it a situation where there's a clearly correct course to be found.

No. Military service is still an option. The education benefits are excellent.
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