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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

#121

Post by eli_gottlieb »

sokoloff wrote: post #98
mindslight wrote: post #66

Earlier quoted context omitted.

Talking about "taxpayers" is disingenuous at best - the private loan holders are the ones that made the unwise loans and should be directly losing out. To the extent that these private parties have agreements with USG guaranteeing they'll be bailed out, then the proper time to object to that corrupt arrangement was when it was being made! Debt, in general, must be dischargeable in bankruptcy. Otherwise the practice i…

Student loans are not dischargable because there is nothing that can be repossessed and you don't want to allow graduates declaring bankruptcy at 21 to wipe out the debt. (Most people with large debt would be better served to immediately declare bankruptcy than to even attempt paying them off.) Under such a system, once lenders stopped lending, college would again become available primarily to the wealthy.

Student loans never brought university education to the masses. Cheap-as-free state universities did that.

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

#122

Post by eli_gottlieb »

brogrammer2 wrote: post #26

Sometimes I do wonder why American Universities charge exorbitant tuition fee? Education being the bedrock of an advanced society, isn't but natural the developed economies like US should be able to subsidize education to such an extant that youth of country don't have to worry about paying their tuition fee and focus more on learning and innovation that will take everyone forward. It is but a reflection on the sad s…

> Sometimes I do wonder why American Universities charge exorbitant tuition fee?

Because American universities are viewed as institutions under the control of a "hippie class", and academics are viewed as "prissy" and "elite". It's a class hatred of the educated, combined with a desire for power over the working class in the form of loan repayments.

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

#124

Post by mindslight »

sokoloff wrote: post #98
mindslight wrote: post #66

Earlier quoted context omitted.

Talking about "taxpayers" is disingenuous at best - the private loan holders are the ones that made the unwise loans and should be directly losing out. To the extent that these private parties have agreements with USG guaranteeing they'll be bailed out, then the proper time to object to that corrupt arrangement was when it was being made! Debt, in general, must be dischargeable in bankruptcy. Otherwise the practice i…

Student loans are not dischargable because there is nothing that can be repossessed and you don't want to allow graduates declaring bankruptcy at 21 to wipe out the debt. (Most people with large debt would be better served to immediately declare bankruptcy than to even attempt paying them off.) Under such a system, once lenders stopped lending, college would again become available primarily to the wealthy.

Yes, that is the justification that the private lenders bought the law with. But it doesn't refute my point.

From a policy standpoint, if the realities make it impractical for lenders to lend then papering over those incentives is effectively doubling down on a bad idea. Compromising in order to encourage more of something generally results in system feedback consuming the desired change, with the downsides of the compromise remaining.

Fewer college loans would mean that society would have to adapt elsewhere - the K-12 schools couldn't punt any substantive learning until "college", employers couldn't insist on pedigree degrees for every job, the value in funding state universities would be respected, etc.

As we're fast finding out, our societal addiction to credit does not help people actually afford things, but creates a de-facto-mandatory system of wealth extraction from the powerless.

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

#125

Post by vilmosi »

UpDownLeftRight wrote: post #39
BucketSort wrote: post #5

After a few years of unemployment and being treated for bipolar depression my loans were in default. Due to the grace of the system at the time, I was able to bring my loans out of default and I now pay them like everyone else. This type of thing punishes the downtrodden even more. There must be a set of checks and balances that at least attempts to differentiate between deadbeats and broke people that don't need a h…

I don't pay student loans. Do you know why? I don't have them. I went to an inexpensive local school, worked while going to school, and took the public bus to and from it. (I was fortunate enough to be able to live with my parents.) While I don't know your situation, it's hard for me to feel sorry for someone who went to an expensive private school, lived on campus in a "country club" atmosphere, and then expects the…

You lived with your parents. You didn't pay for rent or food or bills.

Good for you, really, but it's hard for me to take that as genuine advice.

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

#126

Post by x0x0 »

dragonwriter wrote: post #116
x0x0 wrote: post #115

Earlier quoted context omitted.

Just make the loans dischargeable in bankruptcy and the problem will sort itself. ps -- none of your supposed similar items are widely endorsed by teachers/society/parents.

They are dischargeable in bankruptcy, but the requirements for discharging them are more difficult to meet than those for other unsecured debt.

No, they're functionally impossible to discharge in bankruptcy.

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

#127

Post by gibbitz »

thecpphorse wrote: post #90
PKop wrote: post #38

Earlier quoted context omitted.

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…

Why should lenders not be punished for financing the useless degree? After all the availability of easy financing drives up the price of the useless education. Remember, the "moral hazard" spoken of in financial bailouts is that the lenders aren't being punished for taking bad risks.

I wish I would have been turned down for the loans that paid for my MFA. I'll be paying $450/month until I'm in my 10th year of retirement on that loan. But then again, the school that I went to would probably not exist if it weren't for these loans (Graduate Art School). Considering the caliber and notoriety of the graduates of this university, national culture would suffer as a result of these regulations.

I have to agree that somehow the risk and the student's motivation and achievement are inversely related though there was never any inquiry into my records in the process outside of verifying that my university was on the up-and-up.

But beneath this is a more fundamental question. Why can't we as a country afford the things that are important (our health, our education and our homes) when we make so much more than the developing world where they have the same basic needs? What have we actually gained (aside from creature comforts) from our high incomes as it relates to living our lives. We're borrowing money to pay for almost everything and then paying the interest the rest of our lives.

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

#128

Post by AlexCoventry »

ryanmaynard wrote: post #120
AlexCoventry wrote: post #109

Earlier quoted context omitted.

"...a cynic might argue that we haven't really abolished slavery; we've just relabeled it. The cynic would have a point: an ancient Greek would certainly have seen the distinction between a slave and an indebted wage laborer as, at best, a legal nicety." https://books.google.com/books?id=lliTBQAAQBAJ&pg=PT275

Thank you for the citation; I've ordered the book. Would you happen to have any other book recommendations on the topic, or adjacent topics?

Bailout by Neil Barofsky is very good. https://www.amazon.com/dp/B00818J57W

For critical responses to Graeber's book, the Crooked Timber seminar on it is well worth reading. http://crookedtimber.org/category/david-graeber-debt-seminar...

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

#129

Post by [deleted] »

oniMaker wrote: post #118
dang wrote: post #12

Earlier quoted context omitted.

You've posted like this repeatedly but all it does is make the site even worse, so please don't. We detached this comment from https://news.ycombinator.com/item?id=13903065 and marked it off-topic.

You're just another censoring gatekeeper.

[deleted]

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

#130

Post by AlexCoventry »

ryanmaynard wrote: post #120
AlexCoventry wrote: post #109

Earlier quoted context omitted.

"...a cynic might argue that we haven't really abolished slavery; we've just relabeled it. The cynic would have a point: an ancient Greek would certainly have seen the distinction between a slave and an indebted wage laborer as, at best, a legal nicety." https://books.google.com/books?id=lliTBQAAQBAJ&pg=PT275

Thank you for the citation; I've ordered the book. Would you happen to have any other book recommendations on the topic, or adjacent topics?

Also, Soros's The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, though Graeber's book is what really brought Soros's claims into focus for me. https://www.amazon.com/dp/B004HKIFR4
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