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Soaring Student Debt Prompts Calls for Relief

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Re: Soaring Student Debt Prompts Calls for Relief

#361

Post by mjevans »

tunesmith wrote: post #353
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…

While there are certainly people that go into extreme amounts of student loan debt due to picking prestigious colleges, I don't think that is the real crisis here. Isn't debt also increasing for the vast majority of college students who are in whatever the middle-quintile of average students are? I think a student from a middle class family (meaning loans and not grants) should be able to attend four years of an in-s…

You must have gone to college before 1990.

The price of tuition practically /skyrocketed/ after it become impossible to discharge student loan debts.

Worse we've had two recent 'recession' periods and had insufficient recovery since then. It is extremely difficult for those entering the workforce to find entry-level jobs, and the competition for those seeking part time jobs means anyone going to college is automatically 'overqualified' (source, my own personal experience; over a decade ago, and I DOUBT it's gotten any better since!)

This chart shows part of the story:

https://en.wikipedia.org/wiki/College_tuition_in_the_United_...

https://en.wikipedia.org/wiki/File:InflationTuitionMedicalGe...

"... All rates are computed relative to 1978. [51]

Cost of living increased roughly 3.25-fold during this time; medical costs inflated roughly 6-fold; but college tuition and fees inflation approached 10-fold. Another way to say this is that whereas medical costs inflated at twice the rate of cost-of-living, college tuition and fees inflated at four times the rate of cost-of-living inflation. Thus, even after controlling for the effects of general inflation, 2008 college tuition and fees posed three times the burden as in 1978."

Re: Soaring Student Debt Prompts Calls for Relief

#362

Post by rayiner »

morgante wrote: post #211
deegles wrote: post #200

Earlier quoted context omitted.

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

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…

Poor minorities also won't be able to get student loans. That makes your proposal a total non-starter in a society that emphasizes education as the path to economic advancement for minorities.

Re: Soaring Student Debt Prompts Calls for Relief

#363

Post by vkou »

jazzyk wrote: post #257
vkou wrote: post #131

Earlier quoted context omitted.

It's a shame that a well rounded education doesn't solely consist of studying entirely apolitical, classic European thinkers. It's almost as if there is more to the world than Central and Mediterranean Europe. And heaven forbid, students get exposed to radical ideas in their philosophy classes. We can't have any of that, here.

You seem to have a chip on your shoulder - I said ancient philosophers, the list of names was not meant to be exhaustive, just a few, to give the reader an idea. Of course one would include Confucius, Buddha, etc in that list. A short post cannot be as precise as a dissertation. Students are already exposed to too many radical ideas (supported by current political interests), which REPLACED the basics/foundations - t…

Many current political interests support the views of classic liberal philosophers. Just because the view is mainstream doesn't make it apolitical.

Re: Soaring Student Debt Prompts Calls for Relief

#364

Post by nstj »

ArkyBeagle wrote: post #349
nstj wrote: post #333

Earlier quoted context omitted.

But if the investor receives the cash from the student as payment of their loan, they have to do something with that cash too (buy dinner at Per Se, grab a new Vertu phone, lend the money to a startup so that the startup can spend the money on consuming goods and services, etc)

Presumably, the Fed will send new money to Treasury for this, which will actually inflate the currency just a wee smidgen ( and in an economy in which the Fed's growth targets go chronically unmet this is no sin - quite the opposite). Otherwise... While there is an element of truth to that, see "the marginal value of a dollar". You "spend" your ten millionth dollar quite differently than you spend your ten thousandth…

My bad, that makes a difference (ie: if you're increasing the monetary base, there will indeed be a change in spending - and theoretically it could even result in a lower velocity of money, as the money base might increase proportionally more than the increase in GDP). I didn't realise that Treasury actually held this paper.

Still, I'm hesitant to draw the conclusion that giving cash to someone with a high MPC results in a markedly higher amount of consumption/expenditure in the economy, as if alternatively that cash was invested by someone with a high MPS it would be eventually spent anyway. Of course there would be some frictional element to this (money needs to be transferred when invested, etc) but I posit that more is made of this than should be.

Re: Soaring Student Debt Prompts Calls for Relief

#365

Post by imgabe »

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?

Yes, this is called living in a society.

Re: Soaring Student Debt Prompts Calls for Relief

#366

Post by phs318u »

GunboatDiplomat wrote: post #350
deegles wrote: post #200

Earlier quoted context omitted.

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

Make them hand back their diploma, strip their name from all documentation of ever having gone to the school, bar them from referencing their degree in any way.

If one of the broader benefits to society of an education is your contribution to the economy, then this would negate that benefit. Eg no one wins from having qualified doctors being unable to practice. It's punitive rather than correctional.

Re: Soaring Student Debt Prompts Calls for Relief

#367

Post by bcheung »

Society has an over emphasis on going to college. So much education is available for free in the Internet age.

s/college/youtube/g

Also, bring back the apprenticeships. Why not let someone learn for free or even get paid a small amount? It's so much better than them going into debt.

College is such a racket.

Re: Soaring Student Debt Prompts Calls for Relief

#368

Post by oldmanjay »

duaneb wrote: post #279
zeveb wrote: post #263

Earlier quoted context omitted.

> Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? Not just that: this is, ultimately, a giveaway to the academic classes, who have lucked into the business of selling things to unwise consumers spending someone else's money. When these loans are forgiven (let's not fool ourselves: they will be), the federal government will have moved $1.3 trillion into the cof…

> to the academic classes The academic dream is that everyone deserves the same education. This is obviously not a reality, but you should at least acknowledge the middle ground is disliked by the "academic class" and the "non-academic class" alike: it's expensive as hell and we still have idiots running the world.

Sure, those few thousand Machiavellian geniuses who run everything are idiots. That is a very reasonable opinion.

Re: Soaring Student Debt Prompts Calls for Relief

#369

Post by alexqgb »

zeveb wrote: post #263
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? Not just that: this is, ultimately, a giveaway to the academic classes, who have lucked into the business of selling things to unwise consumers spending someone else's money. When these loans are forgiven (let's not fool ourselves: they will be), the federal government will have moved $1.3 trillion into the cof…

For better or worse, the giveaway has already happened. The colleges have already been paid and they now have massively over-staffed administrations housed in remarkably nice offices to show for it.

The point of a move this move is twofold. The first is to unburden people who were, in essence forced into massive debt at gunpoint as the result of fairly recent and arguably corrupt policy changes (note the lifetime health / income / well-being stats. for those without college degrees, and the role played by banking lobbies if you doubt any of this).

The second is to signal to the predatory class of administrators who have benefited the most that the party is over. It may be unfeasible to claw back what they got from massively inflating the cost of higher education, but it's more than feasible to cap the damages and force a reckoning that will almost certainly lead to vastly more efficient administrations and more economically healthy graduates.

Re: Soaring Student Debt Prompts Calls for Relief

#370

Post by btilly »

x0x0 wrote: post #335
btilly wrote: post #329

Earlier quoted context omitted.

I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education. In economic models, one of the biggest reasons for soar…

There have also been massive cuts in state aid. Frankly, having the federal government instead of state governments pay for college seems better -- the fed always captures benefits (increased tax money) while if you leave the state you grew up in, the state takes a bath on you.

I disbelieve.

The cuts in state aid were mostly due to the 2008 financial crisis. However over decades, tuition has been rising significantly faster than inflation, while state aid has mostly kept up with inflation.

Furthermore rising tuition is not just a phenomena of state schools. Private universities have seen tuition skyrocket over the decades by similar percentages as public schools, and they never received state aid.

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