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

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

#261

Post by industriousthou » Thu, Apr 07, 2016, 12:59 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…

Non-college grad here (well, AA from a community college, but that doesn't really count). I get the impression that that some kids did really challenging programs or went to prestigious schools and that paid off really well, but a lot of kids bought into the "college = success" mantra. Every authority figure they knew was telling them that this was the only way to be successful and the schools were jacking up tuition to pay for more and more amenities. Indoor kayaking! Rock climbing walls! Extend your adolescence for four years and you'll magically be successful and pay it all off!

This is really a shocking dereliction of duty on the part of teachers and guidance counselors. It was just easy to go along with conventional wisdom and not apply any critical thinking and they ended up really screwing a lot of kids over.

All that said, I wish someone would have shown me the value of a really high-end education and helped me attain one.

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

#262

Post by mountaineer22 » Thu, Apr 07, 2016, 1:02 AM UTC

dragontamer wrote: post #133

kaonashi wrote: post #75

Earlier quoted context omitted.

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…

It is an artificial government subsidy, used to fund "non-profit" real estate development.

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

#263

Post by praxulus » Thu, Apr 07, 2016, 1:03 AM UTC

alanh wrote: post #176

ryandrake wrote: post #121

Earlier quoted context omitted.

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.

> splitting hairs No we’re not! The framing of higher education as a career enabler with positive ROI is the #1 bit of propaganda that has justified and reframed how tuition is evaluated and is directly responsible for the steady and insane yearly tuition hike since the 1980s. Fighting for the essence and purpose of higher education is therefore not trivial but in fact paramount. The fact that we are having this conv…

How is that propaganda? People with degrees make more money. The fact that universities had other goals doesn't mean their effects on graduates' earnings are any less real.

Are you saying we should lie to high school students about what does and does not lead to a high-paying job?

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

#264

Post by dannylandau » Thu, Apr 07, 2016, 1:04 AM 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…

Not sure this has anything to do with young age (e.g 17 year olds). Plenty go to graduate school, to get MBA, Law degree and end up with insane amount of debt. Even from top tier schools, most are struggling to pay it off.

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

#265

Post by poorleno111 » Thu, Apr 07, 2016, 1:04 AM UTC

bbarn wrote: post #241

This is a problem that only this generation, and maybe part of the one after it will need to face. The answer is simple, and we're on the cusp of getting there. Like any other industry, education needs to be unbundled. The idea that you need to live in a dorm, in a psuedo-society, for four years, taking a broad set of courses is dated and helps nobody but those offering that experience. I predict in a generation we'l…

Micro-degree are already a student... they're called an associates..

Nurses used to really only need an associates, however some hospitals are now requiring RNs to obtain a bachelor of science in nursing.. Getting a tad ridiculous.

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

#266

Post by marklyon » Thu, Apr 07, 2016, 1:05 AM UTC

cylinder wrote: post #246

Overtonwindow wrote: post #199

Earlier quoted context omitted.

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

My loans average 7%. Federal.

I had a similar problem - I was around 7.8%. I refinanced (with Earnest, though SoFi and others provide similar service) and got it down to 4.71. Increased my payment a bit, and cut my term down by more than a decade. Now, just 117 more payments to go.

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

#267

Post by danielsju6 » Thu, Apr 07, 2016, 1:06 AM UTC

whoopdedo wrote: post #122

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 gra…

The kicker to me is that you can't drink till you're 21; look at porn, buy cigarettes, or consent to sex with an adult until you're 18... but you can sign a federal promissory note for "super debt" that will fuck up your life and the lives of your next of kin.

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

#268

Post by joe_the_user » Thu, Apr 07, 2016, 1:06 AM UTC

elihu wrote: post #217

joe_the_user wrote: post #118

Earlier quoted context omitted.

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.

There's also a lack of experience dealing with (comparatively) large amounts of money. When I was in high school, a hundred dollars seemed like a lot of money. It's hard to compare the costs of rent, food, transportation, insurance, interest payments against potential income, when all those numbers sound like unfathomably-huge sums of money. I think you have to live at a certain income level for awhile to really unde…

But a lack of knowledge and understanding is a solvable problem by education and advice.

A lack of reasonable choices is a problem that can only be solved by social change of one sort or another.

You could almost say that "you have known better than to get yourself into this" aspect of the situation is a cover for the "you were screwed no matter what by the way things were set up" problem.

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

#269

Post by aosmith » Thu, Apr 07, 2016, 1:07 AM UTC

This is a bad situation that's going to get worth. Student aid is great and all but I see a lot of people with useless degrees. If someone can expect to make $35k/year after graduation they shouldn't be able to borrow $200k to get there, it just doesn't make sense.

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

#270

Post by Zigurd » Thu, Apr 07, 2016, 1:08 AM UTC

It will be interesting to see if this creates economic migrants. When I was traveling to China regularly, I met a few Americans fleeing debt. They didn't have much to lose if it turned out to be a bad idea. The plan was typically to teach English in a 2nd tier city where visa enforcement might be lax.