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White House rolls back protections for people in default on student loans

washingtonpost.com

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Re: White House rolls back protections for people in default on student loans

#71

Post by someguydave »

imsofuture wrote: post #6
yummyfajitas wrote: post #3

This is probably a good idea. It's ridiculous that we coddle people who wastefully took out loans with the goal of improving human capital, and then failed to take advantage of them. Previously student loans were a socialized losses, privatized gains situation. This gives borrowers some skin in the game and will hopefully give them more reason to carefully evaluate whether college is really a good idea for them.

What? Borrowers already have skin in the game. Lenders have none . Make student loans dischargeable and suddenly a lot more people are thinking about the actual utility of college and it's costs.

>Borrowers already have skin in the game. Lenders have none

That's absolutely false. Lenders have skin in the game - they run the risk that the borrower fails to pay back the principal. That's why they charge risky borrowers more interest.

If lenders truly had no skin in the game then loans would be nearly interest free.

Re: White House rolls back protections for people in default on student loans

#72

Post by aianus »

cromwellian wrote: post #53

Costs of increased military spending in Trump's budget: $54 billion Estimated costs to make college tuition free for every citizen: $62 billion

> Estimated costs to make college tuition free for every citizen: $62 billion

How? There are ~20 million Americans enrolled in college so $62 billion is only $3,000 per person. In comparison, the US spends about $12,000 per year per high school student.

Re: White House rolls back protections for people in default on student loans

#73

Post by xor1 »

madenine wrote: post #56
artursapek wrote: post #19

I keep seeing people say that the student loan crisis will be the next "bubble pop". It seems like colleges and lenders both got greedy and created a mass of debt to them that will never be paid off. That, and I imagine the current generation will send their own kids to college at a much lower rate than their parents did. The "college bubble" is going to pop.

Its going to be a really rough bubble. There's no one source to point the finger at, but we've got ourselves in a spiral where: -More people are going to school -University costs have skyrocketed (mostly due to expanded administration services), which has increased the need for students to secure loans -Wage growth has been low/flat for a long time -A college degree has replaced a high school diploma/GED as a minimum…

>How do you fix that without blowing everything up and probably destroying the lives for a huge group of people who's only crime was being born in a certain set of years?

A huge number of millennial college students who weren't fortunate enough to graduate into a tech career between 2007-2011 already went through this. It wouldn't be anything new.

>Not to mention the economic implications of an entire generation going into middle age already carrying massive debt - how are they going to generate asset wealth?

I mean...this is already happening. I'm not sure what you're getting at here. "Blowing everything up" is the only way to stop this cycle.

Re: White House rolls back protections for people in default on student loans

#74

Post by HarryHirsch »

someguydave wrote: post #71
imsofuture wrote: post #6

Earlier quoted context omitted.

What? Borrowers already have skin in the game. Lenders have none . Make student loans dischargeable and suddenly a lot more people are thinking about the actual utility of college and it's costs.

>Borrowers already have skin in the game. Lenders have none That's absolutely false. Lenders have skin in the game - they run the risk that the borrower fails to pay back the principal. That's why they charge risky borrowers more interest. If lenders truly had no skin in the game then loans would be nearly interest free.

If lenders truly had no skin in the game then loans would be nearly interest free.

There's a testable hypothesis there: did rates for student loans go up much when they were made non-dischargeable? I'm too lazy to check.

Re: White House rolls back protections for people in default on student loans

#75

Post by dupedbutpayup88 »

nhangen wrote: post #10

I'm surprised by the comments here. I am a fiscal conservative, but having taken and struggled to pay for student loans, and having hired people in the same situation, find that the lending programs are predatory by nature in that they know students will be unable to service the high monthly payments, and eventually default as a result. Do I think people should pay their debt? Yes, but these lenders are the same lend…

> ...the lending programs are predatory by nature in that they know students will be unable to service the high monthly payments, and eventually default as a result.

> Do I think people should pay their debt? Yes...

You were duped, but pay up anyway.

Doesn't that smack you as immoral in anyway?

If anything is screwed up in education, it's that it isn't free for anyone that wants it. How hard is it to see the value in having a citizenry that is well educated? How many other cons can the public see, but also feel they can make informed decisions in the face of it instead of "Duped, but pay up" herd mentality?

Re: White House rolls back protections for people in default on student loans

#76

Post by oddlyaromatic »

PKop wrote: post #38
nhangen wrote: post #10

I'm surprised by the comments here. I am a fiscal conservative, but having taken and struggled to pay for student loans, and having hired people in the same situation, find that the lending programs are predatory by nature in that they know students will be unable to service the high monthly payments, and eventually default as a result. Do I think people should pay their debt? Yes, but these lenders are the same lend…

Removing loan guarantees, and forcing students to scrutinize the value of the degree they are pursuing will improve the problem of students blindly doing what they've been told to do. If they don't suffer the consequences of buying a useless degree, why wouldn't they keep doing it? Any possible improvement of the status quo is going to involve pain. Certainly universities themselves could start feeling some of it, as…

I come from a country where my education was paid for by other people's tax money. I studied the subjects where my curiosity was greatest, and though I don't work in that field now, I do rely on things I learned through my college experience almost every day, and they make me better at my current job. Overall they make me a better contributor to the world around me, and I also have this feeling of gratitude that my world class education was not entangled with crushing debt, plus, you know, the playing field is at least somewhat more level at home than here in the US. You get the grades, you go to college. You don't have to evaluate the pros and cons of large amounts of unsecured loans. It's astonishing to me how things have turned out in the US. Ireland is far from perfect but we do pretty ok at affordable, accessible higher education.

Re: White House rolls back protections for people in default on student loans

#77

Post by neves »

someguydave wrote: post #58
andr wrote: post #13

Earlier quoted context omitted.

A professional VC will be wrong about some 80% of the startups they fund. Yet you want to punish a teenager for not correctly evaluating the chances of receiving a well-paying job 4+ years into the future?

The VC is "punished" by his own (and his investor's) voluntary investment losses. Who covers the teenager's losses?

Civilized societies.

Re: White House rolls back protections for people in default on student loans

#78

Post by shostack »

artursapek wrote: post #19

I keep seeing people say that the student loan crisis will be the next "bubble pop". It seems like colleges and lenders both got greedy and created a mass of debt to them that will never be paid off. That, and I imagine the current generation will send their own kids to college at a much lower rate than their parents did. The "college bubble" is going to pop.

Is this debt that will blow up the economy somehow? Is it being bought and sold on the public markets and being packaged as derivatives?

The bubble of it may pop, but I'm not clear how it hurts anyone but the banks and colleges. Students who can't pay will continue not having any money to pay anything with, and that needs to be addressed, but it doesn't seem like the same scale as the mortgage crisis.

Re: White House rolls back protections for people in default on student loans

#79

Post by WaxProlix »

brianwawok wrote: post #43
WaxProlix wrote: post #37

Earlier quoted context omitted.

Sports teams are generally a net positive. You and I see the $3.5M salary for a football coach at a public university and think it's absurd, but the football program itself pulls in tons of cash directly and indirectly and is probably more than 'worth it' to the school overall. edit: Looks like this is generally wrong. I'll leave it up but see below comment.

I hear that sound byte (bite?) here a lot. It does not seem to be true based on the news I read. Perhaps you have better sources than I. From what I see, 20 out of 1,083 NCAA schools made money on sports. The other 1,063 lost money. http://www.ncaa.org/about/resources/media-center/news/athlet... Only 24 FBS schools generated more revenue than they spent in 2014, according to the NCAA Revenues and Expenses of Division…

Hey, that's news to me. I heard this in terms of specifically the UC schools' major sports endeavors, so maybe it's still true there, but thanks for the sources.

Re: White House rolls back protections for people in default on student loans

#80

Post by grogenaut »

cromwellian wrote: post #53

Costs of increased military spending in Trump's budget: $54 billion Estimated costs to make college tuition free for every citizen: $62 billion

Not a correction but I'd point out that if uni was free, it would cost more than $62 Billion as more people would go.
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