White House rolls back protections for people in default on student loans • Hacker News Board

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

#151

Post by kkhire » Sun, Mar 19, 2017, 2:53 AM UTC

scarface74 wrote: post #144

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…

I have a hard time feeling any sympathy for students racking up tens of thousands of dollars worth of debt to go to a "good school" to get a degree in a field that doesn't pay enough to make it a worthwhile investment. I went to an unknown state college and paid less for my four year CS degree than many of my coworkers paid for 1 year and within 3 years of graduating, I had no debt, and was making just as much as peo…

It's super easy to look back and think, "it really doesn't matter where you went to school." and it's true, I've met people who went to no-name schools and get employed at great companies.

But put yourself into the shoes of an impressionable 16-17 year old. Private and flagship public universities have mastered selling their product with tours, special programs, the "college experience" etc. In addition, they sell getting a job with countless networking opportunities (especially prestigious schools).

It'd be really efficient for anyone who would need loans to get a degree to knock out all gen eds at a comm college and then transfer to an in-state university (it makes zero sense to pay 30-55K a year to take an entire schedule of calc 1 and chem 101). But it's hard to blame a 17 year old for taking the more fun and cooler option than the practical one.

I suppose if government and states invested heavily into community colleges and made them "cool" with great facilities and opportunities, more kids can be incentivized to go that route and avoid the heavy loans.

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

#152

Post by kartan » Sun, Mar 19, 2017, 5:55 AM UTC

scarface74 wrote: post #145

kartan wrote: post #101

Earlier quoted context omitted.

> Vocational and apprenticeship programs are excellent ways for people to learn useful skills while remaining gainfully employed. And the other way around is also true. There is value in people educated on arts or science even if they don't get a job directly related to it. You are right that the link education-employment is in fact is wrong, I will say it is quite elitist. It presumes that people in jobs that don't…

There might be a "value" in it but why shouldn't they pay for it?

> There might be a "value" in it but why shouldn't they pay for it?

It is called an investment. Society invests in an individual education because in the long run that individual is going to be able to contribute more positively to society, returning a greater value than the initial investment. A better educated society takes better decisions, is more creative, adapts faster to change... Why shouldn't countries invest in its own future?

If citizens have to pay for that education maybe they are not going to be able to afford it, or just are not going to do that investment because they lack the education to understand the benefits. The situation becomes a loss for the individuals, but also for the country.

To treat education as an expense is a mistake. That same happens with, for example, infrastructure. If you treat it just as an expense, why do the government build roads? The reality is that a country without infrastructure is as badly prepared as one without educated citizens.

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

#153

Post by dkrich » Sun, Mar 19, 2017, 7:43 AM UTC

DrScump wrote: post #141

dkrich wrote: post #62

Earlier quoted context omitted.

And if guarantees for the loan companies are removed and the inability to free yourself from it in bankruptcy. Essentially move the 100% of the risk that borrowers currently have and move a nice portion of it to the lenders so they both bear the burden of the loans can't be repaid. Imagine if banks had zero risk when providing home loans. I don't think it would be too difficult to buy a house you couldn't afford and…

And if guarantees for the loan companies are removed and the inability to free yourself from it in bankruptcy. Then why would the loan companies do student loans at all except at exorbitant rates (thereby making the responsible students pay more for those who aren't excluded altogether)?

They wouldn't. That's the point. You shouldn't be able to borrow $150k+ without some collateral or a 20% down payment.

I believe that if this happened, you'd see tuition rates plummet. But it won't until some catastrophic economic event occurs because the student loan industry is predatory and corrupt. Essentially ruining people's lives by selling them a lie in the name of "investing in your future."

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

#154

Post by mal808 » Sun, Mar 19, 2017, 8:55 AM UTC

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'm sorry, this is bullshit. What's the role of government? To provide services for the benefit of it's citizens. How does it do that? by collecting taxes. That's how infrastructure gets built, that's how we have schools, hospitals and other public services. At least that's how it should be. Student loans should be subsidised by government, no matter what subjects the students pick, and citizens should pay taxes to support that. This makes for a better, more integrated society over all. Here in Sweden education is free, child care and medical expenses are minimal, and student loans have an interest rate of around 1%. Also, you pay back your loan as a percentage of earnings, so the more you earn the more you pay. This is the contract of society, or at least it should be. Everyone benefits.

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

#155

Post by sokoloff » Sun, Mar 19, 2017, 12:19 PM UTC

mindslight wrote: post #124

sokoloff wrote: post #98

Earlier quoted context omitted.

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 co…

What if the realities make it practical and profitable to lend if that debt is not dischargeable, but make it impractical to lend if that debt is dischargeable?

In such a case, it seems worth exploring whether society overall and different segments are better or worse off with each policy.

I think that's the case we're in, and even though it would likely help me personally and help my kids, I don't want to return to a world where a pedigree degree is even more restricted to those with, well, pedigrees.

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

#156

Post by eli_gottlieb » Sun, Mar 19, 2017, 12:48 PM UTC

scarface74 wrote: post #148

eli_gottlieb wrote: post #119

Earlier quoted context omitted.

They're universities. They don't have a business model. They're not businesses. Their job is to teach and to research, not to make a profit.

That's not true. There are a lot of private universities and so called "non profit" universities where a lot of people are making money. Even public universities will do what it takes to stay open - including denying state residents admissions in favor of foreigners who pay full price.

Yes, state funding cuts have severely messed-up universities' ability to act according to their chartered purpose. That doesn't mean the charter isn't there.

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

#157

Post by brianwawok » Sun, Mar 19, 2017, 3:21 PM UTC

dikdik wrote: post #139

brianwawok wrote: post #36

Earlier quoted context omitted.

> The only reason I was able to pay my loans was because the Army paid them for me after I completed my term of service. I tried for years to find employment that could help me escape a life of poverty but could not. Okay, so then I must ask: What did you major in, what was your total debt, and did you research the career prospects of your major BEFORE going to college? Sometimes I think a basic mandatory form that c…

And what happens when you switch majors? All of your scholarship money gets revoked? Most schools do not require you to declare a major when applying or during the freshman year. Most people that have a major in mind when entering college end up changing it as well. I think this is telling that MOST people do not go to college because they are super passionate about whatever subject. Most people go to college because…

    And what happens when you switch majors? All of your scholarship money gets revoked?

Honestly, switching majors if a bit of a failure of the system. Ideally we would expose students to more parts of a major in High School, so they can make better decisions. Most high schools do not do a great job of this in the US.

    Most schools do not require you to declare a major when applying or during the freshman year. 
    Most people that have a major in mind when entering college end up changing it as well.

(Citation required for both of these). I have found it a mix on what schools require. Back when I applied to colleges (2000?), most colleges DID have me pick a major. A few pushed off till Sophomore year, but not most by any means. And MOST people did not switch majors when I was in school. Some did, and some dropped out, but hardly most.

    I think this is telling that MOST people do not go to college because they are super 
    passionate about whatever subject. Most people go to college because they would like to find 
    a job that will ensure them middle class wages.

Great. So why do people major in History and "Business" and "Women's Studies"? None of these majors lead to a middle class job. If you want a middle class job, there are many majors almost guaranteed to get you there (i.e. education, nursing, programming.. all a big demand for people, all pay some form of middle class white collar wage).

    If we fixed the job market (ie prevent jobs from requiring a bachelors or masters when many 
    high school graduates could be trained to do it AND increase wages not just at the top of the 
    spectrum), I have a strong suspicion there wouldn't be so many people going to college for 
    "bullshit" degrees and even if there were they would actually be able to pay their loans back 
    in a timely manner.

What? As an owner of a business, you would tell me I cannot require college degrees from my new hires? Fine, I will remove it from my job posting. During interviews I will ask what college the person went to. If I don't like the answer, I will send them home. You are NEVER going to legislate anything like this away. Businesses hiring want the best candidates. If they feel college students are better, then they will pick them. This would be perhaps the worst regulation you could possibly put on small businesses.

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

#158

Post by scarface74 » Sun, Mar 19, 2017, 4:12 PM UTC

kartan wrote: post #152

scarface74 wrote: post #145

Earlier quoted context omitted.

There might be a "value" in it but why shouldn't they pay for it?

> There might be a "value" in it but why shouldn't they pay for it? It is called an investment. Society invests in an individual education because in the long run that individual is going to be able to contribute more positively to society, returning a greater value than the initial investment. A better educated society takes better decisions, is more creative, adapts faster to change... Why shouldn't countries inves…

It is called an investment. Society invests in an individual education because in the long run that individual is going to be able to contribute more positively to society

My CS education at an unknown state college costed 10-25% of what a liberal arts degree costs from a "prestigious" private college. So why should I pay for people who want a liberal arts degree that is not as valued by society? If we made large student loans harder to get, colleges would have to adjust. Maybe even to the point of making a liberal arts degree cost less than a computer science degree.

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

#159

Post by [deleted] » Sun, Mar 19, 2017, 4:12 PM UTC

kartan wrote: post #152

scarface74 wrote: post #145

Earlier quoted context omitted.

There might be a "value" in it but why shouldn't they pay for it?

> There might be a "value" in it but why shouldn't they pay for it? It is called an investment. Society invests in an individual education because in the long run that individual is going to be able to contribute more positively to society, returning a greater value than the initial investment. A better educated society takes better decisions, is more creative, adapts faster to change... Why shouldn't countries inves…

[deleted]

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

#160

Post by scarface74 » Sun, Mar 19, 2017, 4:19 PM UTC

kkhire wrote: post #151

scarface74 wrote: post #144

Earlier quoted context omitted.

I have a hard time feeling any sympathy for students racking up tens of thousands of dollars worth of debt to go to a "good school" to get a degree in a field that doesn't pay enough to make it a worthwhile investment. I went to an unknown state college and paid less for my four year CS degree than many of my coworkers paid for 1 year and within 3 years of graduating, I had no debt, and was making just as much as peo…

It's super easy to look back and think, "it really doesn't matter where you went to school." and it's true, I've met people who went to no-name schools and get employed at great companies. But put yourself into the shoes of an impressionable 16-17 year old. Private and flagship public universities have mastered selling their product with tours, special programs, the "college experience" etc. In addition, they sell ge…

How many 16-17 year olds don't have parents or guardians to talk some sense into them?

Government loans have a limit, especially for non independent students. Parents usually end up cosigning.

I told my children they "choose" what college they go to based on how hard they work in high school. If they don't get scholarships, they have to get loans in their own name - meaning one ended up in a 2 year school, lived at home, and could transfer later if he did well.