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Soaring Student Debt Prompts Calls for Relief

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Re: Soaring Student Debt Prompts Calls for Relief

#301

Post by kbutler »

feklar wrote: post #225
morgante wrote: post #211

Earlier quoted context omitted.

Like toomuchtodo mentions, we could treat it like other unsecured debt (like credit card debt). Just because it's unsecured doesn't mean we shouldn't be able to discharge it with bankruptcy. Get the government out of the loan business and the market will correct itself. You won't be able to get a loan for a useless degree and if you end up being unable to pay off your loan you can go through normal bankruptcy proceed…

Would tuition also follow by being more affordable? The government guarantees loans for everybody so institutions jack up their fees accordingly it seems.

Yes, government-backed loans reduce the apparent cost of higher education, increasing the amount people are willing to pay, driving up the costs, and reducing access to people who are unwilling to take the loans.

http://www.economist.com/node/21559618 quoting a research paper:

"With all factors present, net tuition increases from $6,100 to $12,559. As column 4 demonstrates, the demand shocks — which consist mostly of changes in financial aid — account for the lion’s share of the higher tuition."

And then:

"so much of the subsidy is translated into higher tuition that enrollment doesn’t increase! What does happen is that students take on more debt, which many of them can’t pay."

Re: Soaring Student Debt Prompts Calls for Relief

#302

Post by WalterBright »

zanny wrote: post #294
nstj wrote: post #277

Earlier quoted context omitted.

What does this have to do with the velocity of money? If the students continue to pay off their debt then the money flows to their creditors, who will use put it to work in the economy. If the debt is forgiven then it won't go to their creditors and will instead go to those who had student loans who will similarly spend it. Is there another reason that forgiving student loans improves the health of an economy?

The class that lends is also the class whose marginal increases in wealth do not produce goods demand or consumption, it just goes back into lending and / or investment / and or bonds. The best way to grow an economy is to give a dollar to its poorest participant, not its richest, because the poor class will immediately spend it on goods, creating demand, where the richer you are the less of your income goes to consu…

This is another variation on the "rich people hoard money" theory. The reality is that rich people's lending, investment, and bonds all spend that money, too. Nobody borrows money unless they plan to spend it (otherwise it would make no sense). Nobody hoards cash.

Re: Soaring Student Debt Prompts Calls for Relief

#303

Post by zanny »

jonahrd wrote: post #184
morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

You may be right that it's a poor financial decision, but I still hope to one day live in a country where people can pursue education in any subject matter (not just STEM/other money makers) for the pure purpose of educational fulfillment. That can only be done with a system that helps pay for education instead of letting the market decide which degrees are most valuable in terms of pure capitalistic measures

You can do this right now. There are various social media groups, even local ones, about specific subjects and areas of study. You can get all the same textbooks any given college professor writes in the syllabus, you can watch recorded lectures on every chapter, and you can discuss the material with like minded knowledge seekers.

The Internet era effectively invalidates structured schooling education for the vast majority of people who do not require the rigored environment such institutions impart. For most people, reading books, watching lectures, and discussing with fellow students of the discipline (or even experts) in social media is more than sufficient to acquire a knowledge of desirable fields of study.

The only difference is, you don't get a piece of paper after doing it for four years many industries mandate you have to try to use that knowledge professionally. But if you are only in it for fulfillment, you can get that right now, without any state institution subsidizing your living and accommodations to acquire it.

Re: Soaring Student Debt Prompts Calls for Relief

#304

Post by gerbilly »

morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

>Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

You are undoubtedly not the only one who feels this way. It's very natural.

However, in the west sometimes I think we forget how lucky we are, and that the rest of the world often pays for our bad decisions and with much more than money.

I would rather pay their student loans and be grateful for what I have as a white western person, which puts me on a privilege level well above a large proportion of humanity.[1]

I am _not_ trying to preach, just giving you some food for thought.

[1] And this is why here in Canada, I am pleased to pay for other people's healthcare too.

Re: Soaring Student Debt Prompts Calls for Relief

#305

Post by st3v3r »

morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

"Should I now be punished for that decision?"

You're not being punished, in any sense of the word.

Re: Soaring Student Debt Prompts Calls for Relief

#306

Post by gm-conspiracy »

toomuchtodo wrote: post #208
morgante wrote: post #199

Earlier quoted context omitted.

> Same reason we let people walk away from homes (or not walk away, simply not be able to afford them) Like I said in my comment, I recognize that there needs to be some option for people who can't possibly repay their student loans. Defaulting on your mortgage is not consequence-free: you lose your home and hurt your credit. We don't let people just forgive their mortgages and keep their homes without hurting their…

> We should treat student loan debt like any other debt. We should! There's no asset to secure the debt, so just mark the trade line as unpaid/collections and have it be a black mark for 7 years. If Congress isn't going to fix this, Millenials can max out unsecured credit, pay off their student loans, and then go bankrupt on the unsecured debt; 7-10 years of bad credit is better than the federal government pursuing y…

It is much easier to obtain unsecured credit without prior student loan debt.

Re: Soaring Student Debt Prompts Calls for Relief

#307

Post by morgante »

gerbilly wrote: post #304
morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

>Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? You are undoubtedly not the only one who feels this way. It's very natural. However, in the west sometimes I think we forget how lucky we are, and that the rest of the world often pays for our bad decisions and with much more than money. I would rather pay their student loans and be grateful for what I have as a…

> I would rather pay their student loans and be grateful for what I have as a white western person, which puts me on a privilege level well above a large proportion of humanity.

I am very aware of my privilege. In fact, that's why I donate at least 10% of my income to charities operating in the developing world.

That's actually part of why loan forgiveness galls me so much. It's offering a subsidy to people who are actually some of the most privileged people in the world. College-educated Americans are hardly an underprivileged group.

There's also a choice aspect of this. Going into huge debt for college is a decision, as opposed to being born into an underdeveloped nation or falling victim to illness. [0]

Re: Soaring Student Debt Prompts Calls for Relief

#308

Post by dragonwriter »

toomuchtodo wrote: post #185
bsbechtel wrote: post #182

Earlier quoted context omitted.

>>When the Fed could just poof more money into existence? I hope you realize it doesn't quite work like that.

I removed that part because it wasn't relevant, but it does work exactly that way. The Federal Reserve simply credits the bank's reserve account from thin air. Fiat currency is a shared delusion of value with invisible hands exerting forces to enforce certain behaviors (the Federal Reserve attempts to stoke inflation in order for the economy to reach full employment, arguably unsuccessfully, while technology and chea…

> Federal Reserve attempts to stoke inflation in order for the economy to reach full employment

No, the Federal Reserve attempts to provide easy money to spur employment, balancing that goal against the competing goal of controlling inflation. The Fed does not try to stoke inflation to drive employment (especially since inflation doesn't drive employment, though employment can help drive inflation.)

Re: Soaring Student Debt Prompts Calls for Relief

#309

Post by gm-conspiracy »

trentmb wrote: post #256
deegles wrote: post #200

Earlier quoted context omitted.

How would one repossess an education? Isn't that the reason student loans are not dischargeable?

It's possible for colleges to rescind degrees, so if you wanted to be particularly evil you could go down that route.

If the debtor completed their degree.

Re: Soaring Student Debt Prompts Calls for Relief

#310

Post by st3v3r »

gregatragenet3 wrote: post #228
jonahrd wrote: post #184

Earlier quoted context omitted.

You may be right that it's a poor financial decision, but I still hope to one day live in a country where people can pursue education in any subject matter (not just STEM/other money makers) for the pure purpose of educational fulfillment. That can only be done with a system that helps pay for education instead of letting the market decide which degrees are most valuable in terms of pure capitalistic measures

What if I want to pursue an education in driving luxury cars and sailing yachts? Is that a valid subject matter? And if not, what makes it a less valid subject matter than any other degree that costs money but does not have a clear path to recouping the investment? Who decides?

If you're not going to take the discussion seriously, then don't bother to comment at all.
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