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

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

#131

Post by NDizzle »

shogun21 wrote: post #89
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…

I saw taking out student loans as just another hurdle I had I cross. Same with taking the ACT and writing admissions essays. I'm doing fine now and paying back my loans. But I wish I better understood APRs and monthly payments and what those numbers actually meant in context.

Did your parents never talk to you about this kind of thing? I have already had this discussion with my 10 year old. For what it's worth, I never went to college but I understand the importance of compound interest and understanding financial contracts which involve you.

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

#132

Post by coredog64 »

carsongross wrote: post #124
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.

Discriminating against people with college degrees is the last bastion of acceptable racism.

We would look askance at companies that put out ads that advised that people of color should not apply. But there's not nearly the same level of outrage when a college degree is required to be an administrative assistant.

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

#133

Post by dragontamer »

kaonashi wrote: post #75
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

It was backstopping shitty loans with the full faith & credit of the gov't. Note that the person who received the shitty loan still got foreclosed on and lost their equity. The persons responsible, who made the loan, don't have to take a loss.

Without help from the government, those loans would have never happened at those rates.

If you don't like FAFSA loans, you are perfectly willing to go to any bank (or maybe a rich uncle) and get another loan (or convince your rich uncle to bankroll you). But for the vast majority of people, FAFSA is the only way to pay for college.

And taking out 8% or 9%+ loans from NON-FAFSA institutions is a lot worse than taking a 6% to 7% FAFSA loan. I think funding the loans and keeping interest rates lower is a good thing.

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

#134

Post by dv_dt »

kaonashi wrote: post #75
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

It was backstopping shitty loans with the full faith & credit of the gov't. Note that the person who received the shitty loan still got foreclosed on and lost their equity. The persons responsible, who made the loan, don't have to take a loss.

I think the economic phrase that you are referring to is "moral hazard".

https://en.wikipedia.org/wiki/Moral_hazard

It's one way that an economy can break down...

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

#135

Post by sdegutis »

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…

Honestly, screw the modern "higher education" system. It's a business, pure and simple, designed to milk out every penny from kids and their parents, as much as humanly possible while still being "legal". It wasn't always so unbalanced, but that's the way it is today, and that's a crying shame.

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

#136

Post by maaku »

dragontamer wrote: post #129
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 a…

> Education department doesn't have any enforcement arm as far as I'm aware.

The IRS will garnish wages for student loans.

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

#137

Post by daniel-cussen »

joe_the_user wrote: post #118
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 interject that the problem is that problem isn't a lack financial literacy but a lack of good choices for those 17 year olds. No amount of financial understanding can squeeze a good deal from "barrow $100K and maybe get great success or start on a minimum wage job now". And sure, there are half-way points like entering a trade but the future of those positions is pretty uncertain as well.

> And sure, there are half-way points like entering a trade but the future of those positions is pretty uncertain as well.

I would totally go with welder or carpenter. Or better yet, robot repairman. Things will have to be pretty far gone before robots are able to repair each other.

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

#138

Post by awinder »

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 don't know about all teachers but in Maryland it's definitely a decent paying profession (50K starting out for 10 months). To me this is almost a state school thing. You can spend like 10k a year on tuition at a great in state school and at least halve some of these outrageous amounts

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

#139

Post by ausjke »

We have 47 million on food stamps, that's about 15% of the whole population. 47% does not pay a penny for tax, now even for those who are luck to have college educations that 40% of the borrowers are not paying back, I'm just wondering, where will the money come from to fill up the holes?

Adding on the military expense etc, the country is so totally financially broken. How sad.

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

#140

Post by randyrand »

empath75 wrote: post #113
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…

Just make the colleges partially responsible for defaults. Not enough that they won't take chances, but enough that the steer students away from $100000 teaching degrees.

Or perhaps let the free market do what it does best, allocate efficiently.
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