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

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

#121

Post by ryandrake » Wed, Apr 06, 2016, 11:13 PM UTC

Symbiote wrote: post #44

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…

> schools to do their damn job and teach useful skills That may be the purpose of the loans, but it is not necessarily the purpose of universities.

Depends on your definition of "purpose". The purpose of the DMV is not necessarily to enable people to drive, but they are the ones who do the test and hand out the piece of plastic, so we're kind of splitting hairs.

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

#122

Post by whoopdedo » Wed, Apr 06, 2016, 11:14 PM UTC

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…

Is it necessary for the 17-year old to fully grasp what he's getting into and how to deal with it? The point of an education loan is that it will pay to mature the young person and provide him with the capital necessary to become educated about how to handle debt. And more specifically to obtain skills and experience that can be converted to a prosperous career which allows him to repay what he owes.

If a college graduate is not able to keep up with his student debt is it his fault for not being fiscally responsible? Or is it the school's fault for not doing the job it was paid to do?

It is as if we are building bridges that collapse easily then blaming it on the trucks being too heavy when the problem is the engineers are making crappy bridges.

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

#123

Post by dredmorbius » Wed, Apr 06, 2016, 11:14 PM UTC

caseysoftware wrote: post #101

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.

Information asymmetries put the burden of guilt on institutional actors. The educational and lending institutions which have a strong awareness of true costs and actual employment prospects. Over individual young students who don't, and are often relying on those institutions for information and guidance.

Related: principle agent problem.

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

#124

Post by carsongross » Wed, Apr 06, 2016, 11:15 PM UTC

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…

Education isn't the problem. Indoctrination is.

Responsible, reasonably intelligent adults are encouraging children to take on this debt. If there is anyone to educate, it is the adults, not the children.

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

#125

Post by dredmorbius » Wed, Apr 06, 2016, 11:16 PM UTC

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.

Note that matriculation without graduation confers debt without degree. You pay for nothing.

Higher-education attrition rates are considerable, often above 50%.

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

#126

Post by dragontamer » Wed, Apr 06, 2016, 11:17 PM UTC

drumdance wrote: post #88

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…

I would think their parents would help in making that decision.

A lot of parents grew up in the era of "get a degree, get a job". Their experience doesn't actually help as much as they'd like in today's world.

Nothing malicious or anything, but times have changed.

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

#127

Post by narrator » Wed, Apr 06, 2016, 11:17 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's effectively waving a wand to make their bad loans go away when the federal reserve buys toxic mortgage backed securities from the banks with quantitative easing.

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

#128

Post by [deleted] » Wed, Apr 06, 2016, 11:17 PM UTC

drumdance wrote: post #88

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…

I would think their parents would help in making that decision.

[deleted]

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

#129

Post by dragontamer » Wed, Apr 06, 2016, 11:18 PM UTC

rdtsc wrote: post #47

> The Education Department has assembled a “behavioral sciences unit” to study the psychology of borrowers and why they don’t repay. Ha! There is a bit of a hypocrisy there -- if big banks / companies piss away money and choose to strategically default then (and some even get bail-outs), it is just business. If people do it for whatever reason, well clearly the are immoral, deficient somehow, their psychology needs t…

> Ha! There is a bit of a hypocrisy there -- if big banks / companies piss away money and choose to strategically default then (and some even get bail-outs), it is just business. If people do it for whatever reason, well clearly the are immoral, deficient somehow, their psychology needs to be studied by a special committee.

A lot of misunderstanding here. Education department doesn't have any enforcement arm as far as I'm aware. Understanding why students are defaulting on loans is 100% in the realm of what the education department SHOULD be doing.

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

#130

Post by maaku » Wed, Apr 06, 2016, 11:19 PM UTC

dv_dt wrote: post #116

letitgo12345 wrote: post #66

Earlier quoted context omitted.

The TARP bailout was not money just handed out to banks. It was loans to banking and other industries which was repaid in full overall. And in fact it was the auto industry which failed to repay the loan, not the banking industry. I'm not a fan of the financial sector but let's keep the facts straight here

And what of quantative easing where trillions of assets of banks (including junk mortgage backed securities) were purchased by the Fed, relieving banks of the full impact of their actions?

I was going to call you out on conflating TARP with QE, which bought Treasury bonds, but I now see that was just QE1. QE2 and 3 bought mortgage backed securities and bad bank debt. Disgusting.