211–220 of 441 posts
- Lend them money with false advertising and without making sure they understand what a loan means
And now they want them to repay? Humans are not rational actors, certainly most aren't. No 18 year old knows the repercussions of a six-figure debt.
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…
They tried that with for-profit schools, who were quick to report very high levels of employment (omitting under-employment, with gigs such as barista or part-time retail) and setting up temp agencies that hired people to do busywork for six months or so.
If their graduates are able to drive, they already pretty much have a job with Uber, for instance.
Earlier quoted context omitted.
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…
Social mobility means that people who have talent and work hard can get to a higher class even if they were born in a lower class. It cannot possibly mean that the entire population is going to become college professors, while nobody does service jobs any more.
Earlier quoted context omitted.
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.
''you dropped 150 grand on a fuckin' education you could have got for a dollar fifty in late charges at the public library!''
That 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.?
Of course, graduating from a good university here meant a lot more fees.
Unfortunately, and it is something that I really hate is that, the education loan system in India can really use an update - at least in terms of the loan amount that is offered to prospective students. As the bankers told me, there is a limit of roughly 25K USD that can be allowed for education within India. For those who want to get the loan for international programs, the limit is roughly 33K USD.
Now, for local education, that is a decent amount, though might not be sufficient in many cases. For international education, it is NOT sufficient. This restriction applies to government banks and they usually follow it.
Private banks have made a lucrative business out of this, and offer much larger loans to students at nasty, and often floating, interest rates (17% or so would be average.)
That becomes a hell of a loan to pay back even if you are earning in USD and returning in INR.
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…
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.
I think you have to live at a certain income level for awhile to really understand how much money you're making and what things cost relative to that. You can make a mock budget as a high-schooler (I was required to do that for one of my classes), but it's hard to know if the numbers you're plugging into your budget are even remotely realistic.
Can somebody compare this (let's call it a Student Loan Bubble) to the Subprime Mortgage Bubble? I'm trying to get a sense of how big the problem is by comparing it to the last bubble we just experienced.
That graph shows you the size of the actual loans, but there was also a sizeable amount of money tied up in derivatives of those loans, which multiplied the effect.
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…
One can opt in for an unsecured personal loan, which are wiped out in bankruptcy, but those come at higher rates to compensate for the risk. The reason for low(er) rates on student loans is their legislatively mandated low rates of default.
Earlier quoted context omitted.
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?
How about gov do quantitative easing for these student loans. Basically provide contracts and various incentives for companies that are employing these students who have loans. Also to various vendors like house owners etc who provide service to these students. This would create a negative impact on students who did not took loans or got good jobs and paid up in time etc. But that's how largely it was done for QE als…
