More Than 40% of Student Borrowers Aren’t Making Payments • Hacker News Board

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#51

Post by KZeillmann » Wed, Apr 06, 2016, 10:39 PM UTC

kdamken wrote: post #13

Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.

I think it's more complicated than that. It's a huge, broken system. 17-year-olds can't fully grasp the burden of their debt when they take it on, and they've been told all their lives that they need to go to college to be successful.

You've got a great potion for disaster here: 1) You can't be denied an education loan. 2) Education loans can't be wiped out in bankruptcy because 3) You can't repossess an education. 4) Because of the above factors, there's little incentive for colleges to keep cost of attendance low.

I have no idea what the solution should be, but this problem can't continue indefinitely. It's a more complicated issue than just, "Millennials are just looking for handouts and don't want to pay their debts."

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#52

Post by LeifCarrotson » Wed, Apr 06, 2016, 10:39 PM UTC

jonah wrote: post #18

Shivetya wrote: post #6

Sorry, but when there is no testing to determine if they borrowers can even complete the course of study they have chosen why should we expect any other result? If you wanted the best example of why college education should not be free this is it. I am all for community style colleges that could be free or heavily discounted but the idea that people can simply choose ask for their degree be paid for without first dem…

Isn't the idea of the college admissions process (ideally) to determine whether "they can even complete the course of study"? Also, couldn't we set the number of (free) admissions to certain areas of study based on the national need for those professions?

Ideally, yes; practically, no.

The point of admissions has become to determine that admitting a given student will do one of three things: Benefit the school through future press from stand-outs, alumni donations, and better GPA, SAT, and ACT stats in the various rankings (all leading to more enrollment in the future), benefit the school by paying to attend and not really affecting rankings, or whether they can pay and not really hurt ranks that badly.

And the number of free admissions to most areas of undergraduate study is 0. Full-ride scholarships are usually athletic, not scholastic, but most partial scholarships are based on test scores and apply regardless of the course of study.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#53

Post by jamesblonde » Wed, Apr 06, 2016, 10:39 PM UTC

For a really interesting take on student debt, read commentary by the financial historian, Russell Napier, such as this: http://moneyweek.com/russell-napier-give-everybody-in-china-... He believes that deflation is coming (along with a recession) and the solution to deflation will not be monetary stimulus (negative interest rates or bond-buying), but rather political. First on his expected list of measures is a write-off of student debt in the US, to help reflate the economy :)

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#54

Post by wehadfun » Wed, Apr 06, 2016, 10:39 PM UTC

igetspam wrote: post #27

My wife is one of these borrowers. She has a master's degree in teaching. It cost her over $100k to get and she can't find job that would pay her enough that she'd be required to pay anything back. I've seen her loan repayment docs and her minimum payment due is $0 every month. While I think her decision to get a masters in education was a bad one (before we were married) I laugh at an institution that would loan her…

Man same situation exactly. We don't get $0 invoices though. What pissed me off is that there is no way the university spend $100K educating her. That money probably went to build some palace with some guys name on it.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#55

Post by nness » Wed, Apr 06, 2016, 10:40 PM UTC

gozur88 wrote: post #20

codeulike wrote: post #7

Thats how its supposed to work, in the UK at least. Student Loans are like a distributed tax that only gets paid by the grads who earn enough to repay. edit: Also, in the UK, once you do earn enough, payment is automatic via deductions from payslips.

That's a terrible system, IMO. Why should we be rewarding B-Ark people while at the same time punishing people who get degrees in Engineering and Medicine? I can understand the logic for tax-supported universities (not necessarily agree, but understand), but this just seems... intellectually dysgenic.

Punishing,really? It's not an unfair burden for those people and hardly be unsurprisingly for them.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#56

Post by virmundi » Wed, Apr 06, 2016, 10:40 PM UTC

dandanisaur wrote: post #38

kdamken wrote: post #13

Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.

Sources?

Bernie Sanders' offer of State paid college education. One point is that I've never seen him offer an ex post facto payoff. It is a logical extension of his current platform of making education a right.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#57

Post by henshao » Wed, Apr 06, 2016, 10:40 PM UTC

igetspam wrote: post #27

My wife is one of these borrowers. She has a master's degree in teaching. It cost her over $100k to get and she can't find job that would pay her enough that she'd be required to pay anything back. I've seen her loan repayment docs and her minimum payment due is $0 every month. While I think her decision to get a masters in education was a bad one (before we were married) I laugh at an institution that would loan her…

Don't teachers usually have loan forgiveness programs after X-years? I think a lot of government associated jobs offer a perk like this.

I'm not sure if this is state specific or not though.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#58

Post by phdp » Wed, Apr 06, 2016, 10:40 PM UTC

gtrubetskoy wrote: post #29

"About 1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt" I thought "default" is technically impossible with respect to student loans, your solvency matters not, you're obligated to pay it off even if takes your entire life (and/or life's earnings)? This problem would get fixed very quickly if students were allowed to actually default on the loan and stop paying it, at which point it be…

Default just means to not pay back what you promised when you promised. You are confusing this with the fact that, except in relatively rare circumstances, one cannot shed the debt in bankruptcy.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#59

Post by tyre » Wed, Apr 06, 2016, 10:40 PM UTC

We have set students up to fail.

On the one hand, we tell them that everyone has to go to college and that more education is better. Regardless of whether more education has any financial return. Is that the only metric? Absolutely not, but there is a point at which education is a luxury.[1] My entire high school education was focused on how to get into the "best" college.

On the other hand, in order to get that education, they have to take out significant loans. At 17 or 18, they have little to no understanding of—let alone, ironically, education—about personal finance.

So financially uninformed take on large amounts of debt with no gauge of whether that is a positive investment. Sound familiar? We did the same thing to uninformed mortgage buyers until they started to default in 2007.

[1]: I say this having majored in Philosophy. It was a luxury that, coincidentally, is immensely valuable. At the time, however, I didn't know that, I was just interested.

Re: More Than 40% of Student Borrowers Aren’t Making Payments

#60

Post by Symbiote » Wed, Apr 06, 2016, 10:40 PM UTC

kdamken wrote: post #13

Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.

It needn't be magic. As one example, the Welsh Government cancelled many student loans for students in (or from?) Wales.

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93...