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

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

#331

Post by prostoalex » Thu, Apr 07, 2016, 3:37 AM UTC

chadzawistowski wrote: post #285

prostoalex wrote: post #219

Earlier quoted context omitted.

> 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?

Compared to double-digit credit card rates they are. The counter-party risk is still present (as the title suggests, the balance cannot be wiped out, but the payments can still be missed, constituting technical default).

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

#332

Post by marincounty » Thu, Apr 07, 2016, 3:42 AM UTC

Spooky23 wrote: post #243

Overtonwindow wrote: post #199

Earlier quoted context omitted.

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

In the 90s, some unsubsidized loans where north of 9%. I was the oldest of the brood, and my parents didn't have any money, so I chose to go to SUNY whatever for something like $8k/year. Graduated with $1,200 in debt, for my apartment deposit and repairs to my ancient car. MANY of my friends who went to prestigious private schools got bait and switched on aid in their sophomore year and got stuck with loans that they…

My parents didn't have college money set aside for me either, but even if they did, I don't think I would have taken it.

I would take it if I had a rich father, but mine wasen't.

He liked to brag he was a well paid union electrician, but we seemed to barely get by. After taxes, and my mom's depression shopping. (She didn't spent much, but she needed to buy something everyday. She was clinically depressed before people knew about depression. Later in life when she got a job, the depression went away completely. She is now literally afraid to retire.) My father always said she was the reason he didn't have any saved money. It wasen't the tiny amount she was spending, it was taxes, bills, life, etc. We did have money for emergencies though. I remember the family dog, a dachshund, slipped a disc. My father walked in, and said no to the operation. We all started to cry, and he asked how much. He gulped, and he finally said yes. She lived another 7-8 years?

Oh yea, why wouldn't I take money from him to go to college?

I just didn't want any more stress to succeed back then. I was taking hard courses, but my father was working harder at his job. When he died, he told me thanks for not asking for money growing up. Yea, we had our differences, but I never felt indebted to him for any big decisions in my life. It was a liberating feeling at the time. Looking back, I could have used some help, but glad I didn't take it. I did take the student loans though.

Plus, going to college was easier in the 90's. The courses weren't easier, but the price was reasonable, or at least I thought. My biggest gripe was the cost of used books, and transportation to school. I still think if I had a reliable vechicle back then, my college life would have been easier. Later in life, I went to automotive school. One of the reasons was I just want to know how to work on vechicles the right way. It was still pretty cheap to go to a community college in the late 90's.

I got by cheaply by going to a state school, and working security jobs. Actually, my best college jobs were mini-storage assistant manager jobs. These mini-storages are 99% full. You just basically sit in an office, and walk the grounds every once in a while. I would get all my studying done on the job.

Cost of going to school back then was cheaper than today though. I repeated that because I see how you young graduates have been extorted.

And it definetly wasn't a party school. I don't remember one party, but then again it was a state school that was out in the boonies, and most of the students just wanted to graduate.

I still knew the worst day at school was better than working construction.

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

#333

Post by moistgorilla » Thu, Apr 07, 2016, 3:43 AM UTC

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.

So the UK is basically subsidizing worthless degrees.

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

#334

Post by prostoalex » Thu, Apr 07, 2016, 3:46 AM UTC

Pinckney wrote: post #232

prostoalex wrote: post #219

Earlier quoted context omitted.

> 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.

And 5-6 figure unsecured personal loans are available to 18 year olds with no assets or credit history?

Good point. Most creditors would be aghast at 100% LTVs that student loans seek, so it would have to be a combo of a significant down payment, parents' HELOC (or other secured credit facility) and finally unsecured credit card debt.

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

#335

Post by ryandrake » Thu, Apr 07, 2016, 4:06 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…

You're confusing an organization's stated purpose with its actual purpose.

Whether you or I like it or not, higher education IS a career enabler. No matter how this came to be, it's currently reality. People are willing to go into six figures of debt BECAUSE they believe it is a career enabler. Companies filter out non-college-grads because they believe it is a career enabler. Therefore, it is a career enabler.

It doesn't really matter what higher education's stated purpose is...Its actual purpose (in the real world, the one we live in) is to enable careers.

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

#336

Post by cmurf » Thu, Apr 07, 2016, 4:06 AM UTC

AJ007 wrote: post #42

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…

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…

Well it's a bit more nuanced isn't it?

- Oh of course you're going to college, only losers don't go to college. + But I have to take out loans. - Yep, par for the course.

So you're getting peer and parental pressure to get higher education, and in effect make a pretty questionable business decision: it's effectively a modern version of indentured servitude.

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

#337

Post by refurb » Thu, Apr 07, 2016, 4:08 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…

It should just be normal debt that you can discharge through bankruptcy.

I think doing that would likely result in no loans for many students or at least higher interest rates. Hell, if I were 22 with $100K in student loan debt to be discharged, I'd be silly not to declare bankruptcy.

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

#338

Post by refurb » Thu, Apr 07, 2016, 4:10 AM UTC

coredog64 wrote: post #132

carsongross wrote: post #124

Earlier quoted context omitted.

Education isn't the problem. Indoctrination is. Responsible, reasonably intelligent adults are encouraging children to take on this debt. If there is anyone to educate, it is the adults, not the children.

Discriminating against people with college degrees is the last bastion of acceptable racism. We would look askance at companies that put out ads that advised that people of color should not apply. But there's not nearly the same level of outrage when a college degree is required to be an administrative assistant.

Having or not having a degree doesn't make you a certain "race". College degrees are proxy for skill set and ability. Sure, maybe not a good once, but one that's used. And companies are allowed to discriminate based on skill set/ability.

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

#339

Post by taurath » Thu, Apr 07, 2016, 4:12 AM UTC

Everyone in my generation is split, those who went to college and now are paying off ridiculous debt, those who have rich parents, and those who are trying to make it on their own. College does give you a step up, but its really screwed a lot of people. Those of us who just want to learn but don't want to be saddled with debt have to make due outside of our 'institutions' of learning, which is too expensive to consider when you already have an OK job.

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

#340

Post by tluyben2 » Thu, Apr 07, 2016, 4:12 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…

Depending on type of degree, skill and country etc it can be even earlier: I had to decide this at 16 and really besides girls, guitars and computers I had no clue what I would be doing later on. I did dev for clients freelance already and thought I might just as well get a degree. Turns out that I would never have needed it as I never had a 'job' (41 y/o now), always had my own companies and that allowed me to pay back my loan (which was not that big) when I sold my first company in my 20s. Besides that I like theoretical CS it never helped me as far as the title is concerned; I have always been the gatekeeper in my companies meaning I help out or pick up slack both hardware and software when needed in whatever tech needed but never had to use my diploma's, grades, minors/majors or title.

If I had done what my parents wanted though, aka work at a big corp, diplomas, grades and titles work imho. Most (maybe all) people I work with at partners or clients (usually banks or big financials) have degrees and would not be at the company they are without I believe.

I find the age or 16/17 way too young though to decide anything like that as you won't probably understand the impact until much later. Better is just fixing the rediculous fees etc.