Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

wsj.com

Post reply on HN
Print view View original

101–110 of 441 posts

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

#101

Post by caseysoftware »

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…

> I laugh at an institution that would loan her money for a field that doesn't pay

That doesn't speak well to her judgement either.

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

#103

Post by manav »

It would be interesting to explore what kind of short positions are possible. The majority of student debt is federal, so you would probably be looking at the big private issuers like Nelnet and Sallie Mae/Navient (https://www.navient.com/about/investors/debtasset/).

I don't know if there is much of a CDO/CDS market anymore for student-loan debt because subsidies ended some years ago. Lending standards have probably tightened as a result, but it's possible that there are some student-loan backed securities out there with a high probability of default.

I've thought about shorting Navient/Sallie Mae directly, but their ties to the federal government make me think that they could possibly benefit from a government bail-out or takeover if it came to it.

There's also the possibility of taking a short position on the for-profit education industry. Institutions (or rather Companies) like DeVry and University of Phoenix probably have some of the highest debt and default rates. If they lose federal funding, their future is grim.

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

#105

Post by roymurdock »

brbsix wrote: post #90
roymurdock wrote: post #73

Earlier quoted context omitted.

I'm a recent graduate. People don't go to college because they think they'll have their debt absolved. They go to college because an undergrad degree is now the equivalent of a HS degree 30 years ago. It's simply a prerequisite, and every parent/counselor is pushing children towards it. Besides, the students described in the article graduated long before Bernie sanders arrived on the scene. He was clearly not a facto…

He's suggesting that people are refraining from paying off existing debts, not that they're accruing new ones with the hope or expectation that they'll be absolved.

Ah I see...I read "kids" and assumed he was talking about high school students, as I don't consider myself a kid anymore.

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

#106

Post by flatline »

mattnewton wrote: post #67
guelo wrote: post #21

There's a simple solution, the Feds should cutoff loans for schools that don't get their students jobs. The government are the only ones that are able to accurately calculate which schools are completely worthless. In fact they should take it one step further and advertise to the whole world what percentage of students get jobs in their studied field and the average starting salary. That would finally put some market…

I think this is well intentioned but would be absolutely disastrous if implemented; it would give large employers de-facto control over what we are allowed to teach in higher education and encourage short sighted investment in current careers at the expense of cutting edge fields. Nevermind the substantial arguments that an education should be more than vocational training, and that job placement in many majors is mo…

Agreed. Part of the problem is that vocational training is largely a rip-off, and the vocational institutes often demand prices to rival academic institutions. It seems like there is a market for accredited vocational institutes with a more rigorous curriculum (and standards) at a more affordable price. Community colleges are the closest thing to this right now that I'm aware of. Online education is still struggling for validity, and I believe simply does not provide enough structure to push a large number of people through even if these problems are somehow resolved. Is there some middle ground that employers would actually value?

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

#108

Post by sushid »

pmiller2 wrote: post #78
AJ007 wrote: post #42

Earlier quoted context omitted.

A big problem is that at age 17, all of the adults are saying go to college & take out these loans. Guidance councilors, teachers, parents. The most compliant high schoolers will just do what they are told without thinking about it further. I imagine this will start changing. When I was a kid, that group of adults had the benefit of cheap degrees. Today, now that group of adults is us and we did not go to school chea…

> A big problem is that at age 17, all of the adults are saying go to college & take out these loans. Guidance councilors, teachers, parents. The most compliant high schoolers will just do what they are told without thinking about it further. > I imagine this will start changing. When I was a kid, that group of adults had the benefit of cheap degrees. Today, now that group of adults is us and we did not go to school…

Just curious, what are you doing now? What did you intent to major in/did you end up majoring in?

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

#109

Post by thearn4 »

nly wrote: post #82
thearn4 wrote: post #65

If graduates had the option to discharge their student loan debt in bankruptcy in exchange for revoking their degree, I wonder how many would end up taking that option.

How do you 'revoke' a degree?

The scenario that I proposed was entirely hypothetical, but I image that they are revoked in the same way that any credential is revoked: if asked to verify that an individual holds it, indicate instead that they don't.

I mean, this has happened a number of times to doctorate degree holders when it was later discovered that they falsified research for their dissertation.

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

#110

Post by beatpanda »

sh1ps wrote: post #22

A big takeaway from this article (for me) is that people are surprised that 17 year old kids don't understand what they're doing when they take out that college loan. Shock and astonishment despite there being little to no preparation for this kind of financial understanding previously in their education. That surprise and shock shocks and surprises me. Honestly it kind of reminds me of the whole Yelp minimum wage th…

This is insulting. What choice do you think these kids have? A university degree is the only gateway to social mobility available to most young people in the United States, and at current prices, most of them can't actually afford it. What do you expect the kids to do? "Gee, I guess I'll just have to spend the rest of my life in the service industry, making other people rich." Give me a break.

Of course they're going to take on the loans, and of course they're not going to pay them back. This is even more predictable when you realize that plenty of good careers requiring college degrees also don't pay enough to cover basic expenses and make loan payments at the same time.

Blaming the victim for a system that is too big for them to do anything about is the wrong way to look at this. The education system is broken, and I don't blame anybody who simply blows off their creditors in the meantime.

Post reply on HN