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

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

#221

Post by dipnuggetron » Thu, Apr 07, 2016, 12:14 AM UTC

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…

Need the magic letters "CS"? Just add it like Scott Thompson did http://money.cnn.com/2012/05/13/technology/yahoo-ceo-out/

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

#222

Post by huherto » Thu, Apr 07, 2016, 12:14 AM UTC

gozur88 wrote: post #20

codeulike wrote: post #7

Thats how its supposed to work, in the UK at least. Student Loans are like a distributed tax that only gets paid by the grads who earn enough to repay. edit: Also, in the UK, once you do earn enough, payment is automatic via deductions from payslips.

That's a terrible system, IMO. Why should we be rewarding B-Ark people while at the same time punishing people who get degrees in Engineering and Medicine? I can understand the logic for tax-supported universities (not necessarily agree, but understand), but this just seems... intellectually dysgenic.

At least the lender can make extra considerations. Career choice, academic history, etc. Better than lending any amount to anyone and still have a guaranteed payment.

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

#223

Post by mratzloff » Thu, Apr 07, 2016, 12:14 AM UTC

randyrand wrote: post #140

empath75 wrote: post #113

Earlier quoted context omitted.

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.

Yes, because if there's one thing America needs, it's more class stratification.

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

#224

Post by joshdickson » Thu, Apr 07, 2016, 12:16 AM UTC

dragontamer wrote: post #158

maaku wrote: post #136

Earlier quoted context omitted.

> Education department doesn't have any enforcement arm as far as I'm aware. The IRS will garnish wages for student loans.

Yes. IRS. Not Department of Education. IRS is in Department of Treasury, run by Treasury Secretary Timothy Geithner. On the other hand, a study conducted by the Department of Education, run by Education Secretary John King Jr, makes a lot of sense. and is hardly malicious at all. Department of Education wanting to know the effectiveness of their FAFSA loan program (and why or why not people are able to pay those loan…

Tim Geithner has not been Treasury Sec in years. Jack Lew is the current head.

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

#225

Post by prostoalex » Thu, Apr 07, 2016, 12:16 AM UTC

Rangi42 wrote: post #97

twinkletwinkle wrote: post #70

Earlier 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...

> The problem is that undergraduate degrees are more and more a prerequisite for getting any job

That is dependent on the economic cycle. In boom times employers hire anybody with a pulse, in bust times the glut of resumes for a job opening makes employers choosy. If out of all resumes for a retail associate job one candidate stands out due to his MBA and experience, he will likely get the job. That does not imply, however, that all retail associate positions now require MBAs.

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

#226

Post by massysett » Thu, Apr 07, 2016, 12:16 AM UTC

reality_czech wrote: post #207

erichocean wrote: post #146

Earlier quoted context omitted.

> 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. Student loans are the only legal way to sell yourself into "debt slavery"[0] in the United States. It's not the 17 year olds that are screwing up, it's society as a whole by even allowing this situation to exist. [0] https://en.wikipedia.org/wiki/Debt…

I agree with this 100%. Student loan debt should not be treated specially. It should just be normal debt that you can discharge through bankruptcy. At that point, the incentives of schools and the incentives of students would be aligned. Schools would not lend huge sums to students unless they had confidence that the education those students got was adequate to prepare them to repay. And the situation would fix itsel…

Mostly it is the federal government doing the lending, not the schools. Eligibility is fixed by law and has nothing to do with ability to repay.

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

#227

Post by [deleted] » Thu, Apr 07, 2016, 12:16 AM UTC

reality_czech wrote: post #207

erichocean wrote: post #146

Earlier quoted context omitted.

> 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. Student loans are the only legal way to sell yourself into "debt slavery"[0] in the United States. It's not the 17 year olds that are screwing up, it's society as a whole by even allowing this situation to exist. [0] https://en.wikipedia.org/wiki/Debt…

I agree with this 100%. Student loan debt should not be treated specially. It should just be normal debt that you can discharge through bankruptcy. At that point, the incentives of schools and the incentives of students would be aligned. Schools would not lend huge sums to students unless they had confidence that the education those students got was adequate to prepare them to repay. And the situation would fix itsel…

[deleted]

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

#228

Post by srj » Thu, Apr 07, 2016, 12:17 AM UTC

Overtonwindow wrote: post #199

josephjrobison wrote: post #182

Earlier quoted context omitted.

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.

Woah what loan are you speaking of??? My federal loan was about 3% in 2005.

Federal loan rate history: http://www.finaid.org/loans/historicalrates.phtml

I consolidated but I know that some of mine were at 6.8% fixed thanks to this lovely change:

2006-07: Replacement of separate variable in-school/grace and repayment rates on the Stafford Loan with a single fixed rate of 6.8%. Replacement of variable interest rates on the PLUS Loan with a fixed rate of 8.5% (FFELP) and 7.9% (DL).

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

#229

Post by grahamburger » Thu, Apr 07, 2016, 12:18 AM UTC

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 also think there's a simple solution, but entirely different from the one you propose. I wish that k-12 would focus on job prep. Most jobs really don't need specialized degrees - If our public schools were worth a damn there's no reason kids couldn't graduate ready to work. Leave university for highly specialized fields and intellectual pursuits. I think it's a shame that our public school system is failing kids so badly that they can't even get jobs without taking on tremendous personal debt.

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

#230

Post by bbarn » Thu, Apr 07, 2016, 12:18 AM UTC

pink_dinner wrote: post #94

We really need to educate students potentially starting college that they shouldn't major in something that pretty much has no chance of ever paying it back. This applies to most liberal arts programs. A college education is a major investment. It's sad that culturally, our financial education is this poor. I majored in a science and had all of my debts paid off within 5 years. I have friends that majored in things l…

No, we need to change the structure of education. There's zero reason to spend 4 years taking general ed courses at the same cost to pursue a history degree as you would spent pursuing a science degree. Stop focusing on the lettered degrees which are supposed to prove "overall knowledge" and then a specialty, and let people take courses a la carte when it comes to professional preparation.

We need people to be knowledgeable in things like history, the arts, languages, even archaeology - things that pay almost nothing as careers. It's very easy to sit on a high horse with a well paying job in a STEM field and say things like you're saying. Actively discouraging people from pursuing study is not the answer. Changing the program and the institutionalization of education is. We need to stop worrying about how to pay for a program and start worrying about why the program is what it is.