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

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

#281

Post by IkmoIkmo » Thu, Apr 07, 2016, 1:22 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…

Well both are right. Yes, 17 year olds need to fully grasp these decisions, and yes colleges and gov should do more, much more, too.

For example my gf's now doing her 2nd master's to become a teacher, in a field which, surprise, there are no jobs in. Now frankly she mostly knew this, wanted to do it anyway because she's got the resume to get that 1 job that opens up every 5 billion years and she's really passionate about teaching this field. But what struck me was that a few days ago as she was complaining about her job prospects, I said 'your uni has a responsibility here, too', and I went to the website to see if they offered any support. Got to the 'employability' page, and it essentially said the prospects were 'good'. In reality, the employability of this particular degree is probably in the bottom 5%. I mean this is the Netherlands, tuition is $2k a year, it's a 1y programme and student loan rates are currently 0.01% (fixed until 2020, and averaged < 1% in the past 20 years), so it's fine. But for other institutions in other countries, that's blatant false advertising bordering on the criminal as we're talking about multi-year time investments in addition to tens of thousands of dollars. And I see this all the time, but institutions and governments aren't currently willing to be dead honest about job prospects.

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

#282

Post by hkmurakami » Thu, Apr 07, 2016, 1:24 AM UTC

e40 wrote: post #178

pmiller2 wrote: post #159

Earlier quoted context omitted.

I'm a software engineer now. I majored in math. I've literally had recruiters tell me they couldn't offer me an interview because I didn't study "computers," including once at a college career fair. I wanted to tell that woman about the people who invented computers, but I held my tongue as she threw my résumé back at me.

Many of the people I have worked with had degrees in math. I'm not sure if more had CS degrees or math degrees, to be honest.

This is the problem when the gatekeepers (recruiters) are not your peers.

It's a shame that we've somehow structured our systems so that we clearly do candidates a disservice, even though we keep saying that attracting talent is of the utmost priority.

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

#283

Post by pink_dinner » Thu, Apr 07, 2016, 1:27 AM UTC

whitegrape wrote: post #206

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…

Education on the individual level just doesn't work. People are too dumb. (I had the pleasure of rereading this recently: http://www.overcomingbias.com/2009/07/stupider-than-you-real... ) Those that aren't too dumb lack personal responsibility, which is a separate problem I fully agree is pretty big, so more education might fix that, but that's sort of something you can't learn from a book, and arguably the game of c…

"Education on the individual level just doesn't work. People are too dumb."

Honestly, If this is the case, drugs should never be fully legalized. People just can't handle the responsibility. Will addiction be the fault of the company that sold it to you?

"and arguably the game of chicken at teaching responsibility by making it illegal to discharge student loans in bankruptcy has just made things worse."

It hasn't really made things worse. If it wasn't illegal to discharge loans, students would know full well that they most likely would never have to pay it back and just declare bankruptcy when they graduated. That would be a much worse situation for our economy. On top of this, banks would never even take on these loans knowing full well that they would probably never get their money back.

The student debt problem has been bad for at least a decade. Students continue to knowingly put themselves in this position and then cry afoul when they can't pay the debt back. Lack of knowledge is no longer an excuse. Anybody with half a brain and an Internet connection can clearly see the risks (and nearly everyone now is connected to the Internet 24/7 through their phone).

I see it more as a millennial problem: the culture is to no longer take responsibilities for your own actions and blame others for all of your failures.

"full nationalized colleges"

I can't see this working out with the current climate, unless it completely ruins the intent of a university.

Fully national colleges aren't based on money any longer, they are based on making the grade. IE: if you can't pass the entrance exams, you won't get into school (as seen in pretty much any country with nationalized universities).

The system we have setup now was a response to people complaining that not everyone has a chance to go to school (back in the 50s, college was a luxury only the wealthy could afford). Now that pretty much everyone does have a chance, there are further complaints that some people made an irresponsible decision. You can't force someone to major in something that will make the ma decent living.

When I was in college, I met many people that really had no business being there (didn't care, didn't put the effort in, or just couldn't handle any of the subjects). With the dumbing down of the SATs and many other measures to make it easier to get into school not based on academics, it seems we are well on our way to ruining our institutions. The ultimate form of anti-intellectualism.

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

#284

Post by rdtsc » Thu, Apr 07, 2016, 1:30 AM UTC

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…

As someone pointed out already, they will garnish your wages. Regular banks, car dealerships and so on don't get to do that. The government absolutely can enforce things like that.

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

#285

Post by chadzawistowski » Thu, Apr 07, 2016, 1:31 AM UTC

prostoalex wrote: post #219

KZeillmann wrote: post #51

Earlier quoted context omitted.

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…

> 2) Education loans can't be wiped out in bankruptcy because 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.

6.8% that can't be defaulted on is low?

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

#286

Post by tyre » Thu, Apr 07, 2016, 1:31 AM UTC

serge2k wrote: post #258

tyre wrote: post #59

We have set students up to fail. On the one hand, we tell them that everyone has to go to college and that more education is better. Regardless of whether more education has any financial return. Is that the only metric? Absolutely not, but there is a point at which education is a luxury.[1] My entire high school education was focused on how to get into the "best" college. On the other hand, in order to get that educ…

> My entire high school education was focused on how to get into the "best" college. and? The alternative is closing doors.

> The alternative is closing doors.

No, it isn't. That assumes college exclusively opens doors, which is not always the case. Many Americans are leaving college with more debt than they are able to pay off. Crippling debt is not a door everyone knows they are opening, nor what that actually means or feels like.

Furthermore, the "best" college by rankings does not translate to the best college for that individual. The "data" around college rankings and binary maxims like "go to college" hide the nebulous benefits and individual circumstances.

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

#287

Post by swiley » Thu, Apr 07, 2016, 1:32 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…

I actually was taught a lot about personal finance in highschool and was absolutely horrified at the way higher education was financed to the point of avoiding it for years.

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

#288

Post by relaytheurgency » Thu, Apr 07, 2016, 1:33 AM UTC

kin wrote: post #173

I also noticed while doing taxes that if I borrow money, I'm going to pay interest on that money I borrow. One of the incentives to this self investment is that I can deduct the interest that I pay. However, apparently, if your salary is above a certain threshold, you don't qualify for education deductions and credits. It's a first world problem, I know, but I just found out and it kind of sucked.

You can only deduct 2,500 dollars of student loan interest (Hilariously, even if you're married this doesn't go up. My spouse has no student loans, but I still can only deduct 2,500 filing jointly). When I went back to school to finish my degree I put my loans into deferment, so now I am paying a bunch of interest back.

Seems like a shitty situation. Before I got my degree I was making less than a third of what I make now, even though I worked more and got paid overtime. That was at a job I had worked at for five years and was likely maxed out of earning potential in that industry. I made little enough to have almost no federal tax burden. By providing loans the government has essentially turned a tax burden into a revenue generator. In just two years I am making this much more money, paying a bunch more in taxes, and my lifetime earning potential has increased significantly. But they still try to screw you from both ends, of course.

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

#289

Post by relaytheurgency » Thu, Apr 07, 2016, 1:38 AM UTC

Unklejoe wrote: post #277

kin wrote: post #173

I also noticed while doing taxes that if I borrow money, I'm going to pay interest on that money I borrow. One of the incentives to this self investment is that I can deduct the interest that I pay. However, apparently, if your salary is above a certain threshold, you don't qualify for education deductions and credits. It's a first world problem, I know, but I just found out and it kind of sucked.

The same thing happened to me. I think they phase you out of the student loan interest deduction after you pass $65,000 taxable income. I'm actually going to increase my 401k contribution to try to retain more of that deduction.

I did not know this. I guess I will be doing the same or starting an IRA.

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

#290

Post by swiley » Thu, Apr 07, 2016, 1:39 AM UTC

brokentone wrote: post #92

wehadfun wrote: post #54

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.

Certainly agreed that the dollars going in and out of education don't make a lot of sense to me, but there are cheaper schools. If you don't feel the school is worth the money, go to a school that you do feel is worth the money.

Community colleges are WAY underrated. Although most of the worth of a degree is the networking you do earning it.