Cue this recent hit from Baton Rouge: https://www.youtube.com/watch?v=JqbXQa05Z6c
More Than 40% of Student Borrowers Aren’t Making Payments
181–190 of 441 posts
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#182Earlier 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.
Yea Plus Loans are the worst at 8% interest a year. Do I invest in index funds that average 7-8% or pay down student loans that guarantee you're relieving 8% interest a year. It's very disheartening to see one losing $1k/mo purely to interest. But also a big motivation to just make more money yearly.
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#183Earlier quoted context omitted.
Must the value of an education be purely the salary you can get afterwards? The true roots of liberal arts (which used to include everything from astronomy to mathematics to botany) lie in creating a well-rounded, educated, sophisticated person. We can't all study STEM, and we as a society shouldn't demand that.
Not everyone wants or needs to get a well-rounded liberal arts education. The problem is that undergraduate degrees are more and more a prerequisite for getting any job, so there's pressure to make it easy for poorer people to earn a degree. Towards that end we have loans, grants, scholarships, subsidized city colleges and state universities...
I am afraid you are wrong there. It’s a myth that the reason we have public funding of higher education is to help people get nice jobs.
We have public funding of higher education because a better educated populace is a better democracy and a better public.
It's an intrinsic value.
See also: http://www.salon.com/2014/06/08/colleges_are_full_of_it_behi...
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#184Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.
Or, you know, lots of kids can't find work that pays for shelter, food, clothes, transport, and interest on six figures. Despite being young and dumb, and told by most everyone that the only way they'd get such a job would be to, you know, take out those six figure loans.
The post-2008 recovery has been a very poor recovery as far as jobs are concerned. Add in that wages for the less than six figure jobs have been stagnant since most of these people have been alive, and, well, there you are.
Perhaps coming up with an educational system that doesn't indenture students to banks (who have zero risk on their loans - talk about lack of skin in the game!), and doesn't increase in price at a multiple of the inflation rate might be a good idea?
I've noticed that nearly everyone whose reaction to 'the kids these days' on things like this went to school when going to school was actually affordable by the non-wealthy.
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#185Earlier quoted context omitted.
Worked fine incognito for me.
I tried incognito - still did not work. They don't like my IP :( Even stories linked from Google News homepage don't work for me - I wanted to complain to google about why they even include them. But I guess it's just me.
It's not just you.
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#186Here is an interesting comment on reddit in response to someone asking how they could profit from a mass student loan default scenario:
You bring up a really interesting point, my buddies and I have been mulling this over.
Three important distinctions between student loans and mortgages:
Mortgages are backed by an underlying asset (the house) for which there is a liquid market and transparent price discovery, so it's easy to determine when the borrower's position is insolvent (i.e.; loan balance > home value; negative equity)
For many student loans, the Federal government assumes the risk of default; also, Sallie Mae dominates the secondary market, and shorting them entails political risk (you're betting against a bailout)
While painful, defaulting on a mortgage is a realistic option for borrowers: declare bankruptcy, give up the house keys to the bank, have shitty credit for 7 years, and you're out from under it; by contrast, student loans survive bankruptcy (and the principal keeps growing)
Student loans are far more insidious precisely because it is difficult for the market to take a natural short position and put downward pressure on prices. What would a bubble 'pop' look like? For housing, the slow-down/decline in home prices simultaneously bankrupted hundreds of thousands of over-leveraged owners.
It's hard to imagine a scenario where a significant portion of student loan borrowers simultaneously stop paying, and even if they did the loan owner can chase them through bankruptcy and garnish their wages. That looks like a recipe for a long, slow, toxic drag on the economy.
https://www.reddit.com/r/finance/comments/3y39x2/just_saw_th...
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#187If 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?
You steal the knowledge back of course.
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#188Earlier 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
You mean, they paid it back by having the USG buy all their shitty home loans to get them off the books? I'm not a fan of the financial sector but let's keep the facts straight here
If banks can 'pay back' their TARP loans with bad debts, students ought to be able to 'pay back' their student loans with promise of future earnings excess of minimum wage, that was supposed to be enabled by taking on a degree.
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#189Wondering if it would help at all if the parents saved up enough for each kid to fully fund their private college, and then when the kid hits high school tell them - when you graduate, you'll get $50k/yr towards your college. If you go to a private school it will cover it, but not leave much. If you go to a good public school, the extra $20k/yr is yours. If you get a full ride scholarship, the $50k/yr is all yours. Would that work? I'm assuming for some it would.
Re: More Than 40% of Student Borrowers Aren’t Making Payments
#190That is a sad state of affairs, though I must say I have seen worse numbers back in India. Last time I talked with them, I was told that I was one of the 3 active accounts out of 20 granted ones that was repaying the loan. That's 17 out of 20 in default - a massive 85%. Some of them were actually not in a situation where they could pay back the loan. Others didn't want to. This was the situation at that single bank b…
I'm curious, how does the cost of higher education in India compare to the U.S.?
Depends upon the university, if it is publicly funded or not. Tuition for private universities ranges from $1000-$10000 per year. Public universities - Less than $1000 per year, in many cases no tuition.