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Soaring Student Debt Prompts Calls for Relief

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Re: Soaring Student Debt Prompts Calls for Relief

#431

Post by morgante »

WheelsAtLarge wrote: post #400
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…

Bad financial decisions are nothing new. People are constantly getting loans for things they can't afford like homes, cars, credit card debt and so on. I used to feel the same way as you. But we need to stop loading young adults with debt that can never be dismissed. Young adults are easy prey. Student's are for the most part clueless on what it means to be in debt without being able to pay for it. Mostly student's a…

> Student's are for the most part clueless on what it means to be in debt without being able to pay for it.

I give students more credit than you do. If you're capable of going to college, you should be capable of understanding compound interest.

> The supply and demand curve has gotten out of wack.

I agree completely. Get the government out of this business and we'd see realistic supply and demand.

It'd be much easier to get a loan for a CS degree and a degree in CS would cost a lot more than one in English literature. Instead, we have the ridiculous status quo where the latter costs almost exactly the same as the former despite vast differences in value.

Re: Soaring Student Debt Prompts Calls for Relief

#432

Post by morgante »

thowawy91316 wrote: post #412
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're not alone. I graduated college a few years ago. My parents made too much to qualify for need-based aid, but too little to be able to actually afford it (living in the NYC sphere, you can earn decent money and still struggle). I too picked a lesser-tier school because it was more affordable. My parents paid for my food, and the occasional rent payment, but the rest was on me. So, I took out loans. I started col…

> My ideal solution would allow citizens to dispel student loans through public service.

We actually already have public service loan forgiveness programs. I think they're great and would support expanding them to additional fields.

Re: Soaring Student Debt Prompts Calls for Relief

#433

Post by tostitos1979 »

dragonwriter wrote: post #324
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…

> When these loans are forgiven (let's not fool ourselves: they will be), the federal government will have moved $1.3 trillion into the coffers of colleges, universities, professors, junior assistant vice-provosts of diversity affairs, athletic coaches and the whole panoply of 21st-century academia. The principal on those loans already went there, and forgiving the debt won't move any additional money there except in…

You know what is worse? This subsidy isn't going to your top-tier or even mid-tier CS/engineering prof. For those students, education totally pays off. The subsidy is really going to the lowest-tiers of the academic enterprise.

Re: Soaring Student Debt Prompts Calls for Relief

#434

Post by rayiner »

morgante wrote: post #425
rayiner wrote: post #362

Earlier quoted context omitted.

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.

That's an unproven assumption. If existing lenders aren't willing to loan to minorities, then there would be a fantastic opening to make a profit in loaning money to poor minorities with high test scores to study STEM.

20% of African Americans have credit scores below 620 compared to 5% of non-Hispanic whites. On average, disadvantaged minorities don't do as well on standardized tests, and have worse graduation rates even when they attend the same colleges: http://mobile.nytimes.com/2014/05/18/magazine/who-gets-to-gr....

The US is very deeply invested in the idea that the way to overcome the disadvantages faced by members of certain minorities is education. But those same disadvantages make those students worse credit risks. A credit-based system looking to optimize return wouldn't give these students access to the same educational opportunities.

Re: Soaring Student Debt Prompts Calls for Relief

#435

Post by shanacarp »

I'm reminded of the U of C's Aims of Education Address when this discussion comes up.

EG: https://aims.uchicago.edu/node/83

I tend to think that many things that are now in college degree programs are actually things that should be in trade programs - we've turned everything into a degree, and in the process, stopped realizing what the value of a degree is and/or what the purpose of a theory driven/liberal arts education is.

(TL:DR if you don't end up reading the link - to think, to create the ability to teach yourself, to encounter new ideas and figure out which ones are hot air and which ones are not. To learn how to create good new ideas for yourself! To become a better human being and citizen in order to better participate in this world)

If we separated out the trade school aspect, well, it becomes very hard to value an education in the traditional degree/liberal arts sense - and it becomes easier to tell what's the value of that immediate trade school diploma by market forces. In that, then the government could apply a limit on loans to what is very knowable (market forces) and apply some other metric because of the public good gained by aiming towards education in general

Re: Soaring Student Debt Prompts Calls for Relief

#436

Post by Neeek »

h4nkoslo wrote: post #374
st3v3r wrote: post #319

Earlier quoted context omitted.

You completely missed the point. Further, this "holding a gun to your head" thing is completely asinine.

No, I didn't. OP is trying to make this a lovely cost-free dynamic, where all we have to do is let our brother crabs get out of the bucket without dragging them down, man. That's bullshit. In reality OP proposes to transfer money from me to people who made investments in human capital that didn't pan out. Maybe that's their fault, because they invested foolishly. Maybe it's nobody's fault, because they invested in a…

But it does have to do with you? All of this affects the world you live in, the world that you interact with directly every single day. The house you live in, the wage you're paid, the food you eat, the medicine you receive, everything in your life depends on other people. Whether you agree with the way your government is handling this or not, it all still has everything to do with you.

Re: Soaring Student Debt Prompts Calls for Relief

#437

Post by morgante »

rayiner wrote: post #434
morgante wrote: post #425

Earlier quoted context omitted.

That's an unproven assumption. If existing lenders aren't willing to loan to minorities, then there would be a fantastic opening to make a profit in loaning money to poor minorities with high test scores to study STEM.

20% of African Americans have credit scores below 620 compared to 5% of non-Hispanic whites. On average, disadvantaged minorities don't do as well on standardized tests, and have worse graduation rates even when they attend the same colleges: http://mobile.nytimes.com/2014/05/18/magazine/who-gets-to-gr... . The US is very deeply invested in the idea that the way to overcome the disadvantages faced by members of certa…

A credit-based system looking to optimize return would reflect the likelihood of such students actually graduating and getting good jobs.

If the problem is that minority students have difficulty achieving at the level of white students, let's focus on that. I don't think it's very helpful that we saddle these students up with loans but then they don't even end up graduating. Instead of forcing lenders to lend to bad credit risks, let's come up with ways to support minority students so they aren't credit risks. I personally would be happy to invest in minority students studying CS, for example.

And yes, it will be somewhat painful in the short term. We'll have to confront the reality that lending to students with low SAT scores to study esoteric subjects is maybe not a good idea. Perhaps it would even encourage such students to not waste their time and money on bad degrees.

Re: Soaring Student Debt Prompts Calls for Relief

#438

Post by QuarterReptile »

Jimmy wrote: post #346
dragonwriter wrote: post #259

Earlier quoted context omitted.

> How would one repossess an education? You can't. > Isn't that the reason student loans are not dischargeable? No. First, student loans are, in fact, dischargeable, though there is a higher bar to discharging them. So expalanations of why they are not dischargeable are unnecessary (and necessarily incorrect.) But, more to the point, unsecured loans in general are dischargeable without the heightened requirements tha…

>>How would one repossess an education? >You can't. Yet. ;)

Isn't that one of the options for the people who paid for ITT? Full refund only if they repossess your credits.

Re: Soaring Student Debt Prompts Calls for Relief

#439

Post by HoyaSaxa »

mgkimsal wrote: post #405
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…

"for other people's bad financial decisions" Why is making loans to people that have, statistically, a very low chance of paying off somehow not also a "bad financial decision"? We pay for "bad financial decisions" regardless of who makes them - debt forgiveness for individuals or bank bailouts when they get in over their heads. Banks only lend for education because it's not dischargeable - there's no penalty for the…

> Banks only lend for education because it's not dischargeable - there's no penalty for the bank making a 'bad decision' because they'll get their money one way or another.

I was under the impression that only federal student loans were protected from bankruptcy. However, it looks like that changed in 2005 when Congress largely extended this protection to private student loans as well. I still don't quite fully agree with your statement since financial institutions often have a hard time collecting on debt regardless of their legal rights, but you are certainly correct that this encourages financial institutions to take on more risk. Private student loans are performing much better than federal student loans though (11%+ vs 4%+ delinquency rates) so the data implies that they are still practicing somewhat strong underwriting practices. Further, nearly 95% of all private student loans have a cosigner.

Regardless, the private student loan market is very small in comparison to the federally subsidized student loan market. I know it is easy to blame the 'banks,' but in reality this situation has developed largely from societal pressures (college=success), federal and state policies ('cheap' and 'accessible' loans), and unchecked spending at colleges.

Link of an interesting paper on the subject for those curious: http://law.emory.edu/ebdj/content/volume-32/issue-1/comments...

Re: Soaring Student Debt Prompts Calls for Relief

#440

Post by granfalloon »

morgante wrote: post #316
st3v3r wrote: post #305

Earlier quoted context omitted.

"Should I now be punished for that decision?" You're not being punished, in any sense of the word.

Of course I am. I had to pay an initial cost (avoiding loans) and then am further being forced to pay for other people's decisions through taxes.

Come on, that's so disingenuous. "Punishment," as the word is most commonly used (and defined), implies a harm is being inflicted due to some fault or bad act by the punished.

You can say it's "unfair," or "undeserved," or like you say below, that it "discourages people from making a financially prudent decision". But no one wants to "punish" you -- that would be absurd.

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