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US Household Debt Surpasses 2008 High

nytimes.com

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Re: US Household Debt Surpasses 2008 High

#241

Post by tedivm »

ryandrake wrote: post #233
diogenescynic wrote: post #193

Earlier quoted context omitted.

>went to school in the mid 90s >but it was well understood that majoring in Underwater Basket Weaving The way you make such a condescending argument and blame the victim takes away any credibility in your comment. The issue is that tuition has ballooned since the 90s. Tuition is outpacing income/inflation and most else, so regardless of what school or major, the ROI is going down for most. Also, even if you went to a…

Sorry, bud. I also went back to school for another go after 2005, still focusing primarily on ROI. So I think I can say I'm well aware of and lived through both current and past student loan / tuition regimes. But please feel free to continue to attack the tone of my argument rather than the content.

Your "argument" was nothing but tone, unless you're literally trying to say that people are majoring in underwater basket weaving, in which case my counter argument is "no they aren't".

Re: US Household Debt Surpasses 2008 High

#242

Post by ams6110 »

Teknoman117 wrote: post #173
lz400 wrote: post #139

Earlier quoted context omitted.

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

I don't understand why the cost of higher education has gone up so much. My grandparents paid for college via a job they only held in the summer and my parents paid for college working part time during the school year and full time in the summer - both of those jobs paying a little better than minimum wage. Yet I'm looking at 5 years of debt with a tech industry salary. Having to paying for higher education wouldn't…

Basically, the easy availability of student loans put inflationary pressure on tuition prices.

This fueled significant administrative bloat (compare the administrative org chart of your school to the one your parents or grandparents attended) and massive spending on new facilities, which locked in the need for the higher tuition rates.

Re: US Household Debt Surpasses 2008 High

#243

Post by jellicle »

ProfessorLayton wrote: post #124
manacit wrote: post #10

I don't know if it's a "bubble" (I am not qualified to say that), but I can't imagine that the current trend with student loans will continue. Looking at the numbers for someone entering college in 2017, it feels nearly predatory what a good portion of private and out of state colleges are charging. Even with financial aid, $30-40k a year for 4-5 years is insane. I was fortunate enough to have parents who made saving…

I definitely agree that rapidly rising education costs are a huge issue and need to be addressed. However, most (67%) undergraduate student loan amounts are for less than 20K[1] At 6.8% interest and 10 year repayment that comes to about $2,761 per year, with interest that can be paid with pre-tax money. Yes, thats a hefty amount to many, but earnings with a college degree are still much more than enough to offset tha…

That's a snapshot in time. Yes, some people who have been out of college for twenty years have paid their debt down to less than $10K. Also, a sizeable percentage of homeowners have mortgages of less than $10K, at this instant. But both student borrowers and homeowners started off with more debt. You're assuming they're graduating with $10K debt. Actual average debt at graduation is $37K.

Re: US Household Debt Surpasses 2008 High

#244

Post by ams6110 »

mcguire wrote: post #199
lz400 wrote: post #139

Earlier quoted context omitted.

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

Out of curiosity, what are the requirements for getting into a university there? http://www.businessinsider.com/how-do-european-countries-aff... " For all countries, with the exception of Finland, the US has a much higher percentage of students who have enrolled in post-high school education. "

Thanks to easily available student loans -- you can be sure that "educational" institutions will spring up ready and willing to accept any "student"

Re: US Household Debt Surpasses 2008 High

#245

Post by Daishiman »

muninn_ wrote: post #160
lz400 wrote: post #139

Earlier quoted context omitted.

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

What is really mind-boggling is your comment. First, education is not, in any way, shape or form, free. You pay for it in taxes. Period. This isn't a pro/anti tax argument, but it's necessary to say. Second, you can also study CS for free in the United States or at a heavy scholarship. Large state schools subsidize a lot of engineers in their educational pursuit so long as you achieve good grades, or score well on en…

> Furthermore, by any measure that matters, the universities in the United States are the best in the world, bar none. So the competition to attend, places further pressure on those seeking degrees that do not immediately translate into a high paying job. We've made a mistake, as a society, by emphasizing "go to college" over "go to trade school".

Maybe a very tiny minority of the top schools, but in my experience as a CS graduate from another country, I have not really found the skills taught to graduates outside of the small circle of Ivy Leagues and top-tier unis to be anything particuarly extraordinary.

Grade inflation and the American bias of universities as research institutions where quality is measured by the number of papers and impact factor does not favor other educational systems where most of the research is done in specialized institutions where undergrads are not being taught.

When you get to make up the rankings, it's generally no surprise that the rankings favor you.

Re: US Household Debt Surpasses 2008 High

#246

Post by jellicle »

Teknoman117 wrote: post #173
lz400 wrote: post #139

Earlier quoted context omitted.

I truly don't understand the USA sometimes. Don't you guys know that in Europe higher education is free? Well where I'm from there was a very low nominal cost but my father was a public servant so cost was waived, I literally studied CS for 0 cost. And these countries are able to afford it all! Magic! I don't understand how people in USA are not aware of this and literally rioting in the streets. At the very least sw…

I don't understand why the cost of higher education has gone up so much. My grandparents paid for college via a job they only held in the summer and my parents paid for college working part time during the school year and full time in the summer - both of those jobs paying a little better than minimum wage. Yet I'm looking at 5 years of debt with a tech industry salary. Having to paying for higher education wouldn't…

Universities are doing price discrimination. They want to charge rich kids a lot, middle class kids something, and poor kids nothing. That requires a high sticker price for the tuition, plus discounts.

It's hardly a perfect system but the basic idea is not unreasonable. And remember, if one pumps money into the system from the government side (which, IMHO, should happen) the counterintuitive result is that rich kids are likely to be the first ones to benefit.

Re: US Household Debt Surpasses 2008 High

#247

Post by pmiller2 »

lr4444lr wrote: post #188
pmiller2 wrote: post #183

Earlier quoted context omitted.

Except the taxpayers don't really lose out on student loans unless the borrower gets the loans discharged. They have immense power to levy bank accounts, garnish wages, seize tax refunds, and even garnish Social Security payments. Practically speaking, unless the borrower dies or becomes totally and permanently disabled, the government will get theirs. Bankruptcy discharges are very rare, and with all those ways of c…

I'm not sure about that. Isn't the whole point of outfits like Navient that the govt. loses money by selling off billions of the obligations to servicers?

No, not at all.

There are three players in the student loan game: lender, servicer, and guarantor. The lender is pretty much what it sounds like. The servicer is the agency that handles the repayment process (and any deferment or forbearance) as long as the loan is not in default. The guarantor is where the loan is transferred if it goes into default.

The guarantor will add collection fees of up to 20% of the defaulted balance, and can pursue those collection methods I mentioned earlier. They can also hire an outside agency to do collections. Their main job is to get loans out of default, either by rehabilitating the loan (a process whereby a borrower makes 12 on time, consecutive payments, and the loan is kicked out of default status), or directing the borrower to consolidate.

Navient falls under the category of lender or servicer (or both), depending on the specific loan. Their interest is in stringing out the payments as long as possible, and wring out as much money from the borrower as they can, which is why they got into trouble recently for directing borrowers to deferment and forbearance options rather than lower payment plans.

If that sounds like a lot of people interested in putting 18 year olds in debt, it is. I worked in this industry for a couple years on the consolidation front, and heard a lot of sad tales.

Re: US Household Debt Surpasses 2008 High

#248

Post by rrggrr »

godtoldmetodoit wrote: post #76
rrggrr wrote: post #21

Keep in-mind this household debt is above and beyond each household's share of their municipal, county, state and federal debt. If you live in LA County, CA: - about $4,200 in State Debt. - roughly another $4,000 or in LA County debt. - $161,000 in federal debt. - $16,000 in credit card debt on average. - Car loan, home payment, etc. And on average your savings are minimal. Most importantly, if this isn't you, its st…

What economic growth policies could we enact that would result in 5-6% GDP growth? From my admittedly limited understanding, that seems to be quite the stretch.

Tax holiday for repatriation of overseas dollars held by big companies would account for 2pct.

Re: US Household Debt Surpasses 2008 High

#249

Post by aianus »

vkou wrote: post #142
koolba wrote: post #126

Earlier quoted context omitted.

The rationale is that you can't take away an education the way you can repo a house or car. That and something about doctors borrowing a couple hundred K, then declaring bankruptcy to discharge it after graduation.

And yet, nothing prevents me from maxing out my credit cards, and spending it all on whiskey and limousine rides... Or totaling my car (While only having liability insurance). Lenders charge a premium over the prime interest rate because of the risk that they will never get their money back. Student loans are backed by the federal government - there is zero risk for these lenders. They seem to be under the impression…

> Or totaling my car (While only having liability insurance).

I don't know where you live but in Canada the car dealer won't give you the keys without getting confirmation of comprehensive insurance coverage with lienholder protection. Personally just did it a couple of months ago.

Re: US Household Debt Surpasses 2008 High

#250

Post by [deleted] »

crdb wrote: post #182
ryandrake wrote: post #104

Earlier quoted context omitted.

I don't know, maybe it's different now, but my generation (went to school in the mid 90s) was not told to "just go to the best college no matter what": We were also advised to consider the cost and carefully choose a major so as to produce a positive expected ROI. Obviously nobody has a crystal ball and you can never tell when huge, industry-wrecking changes are coming, but it was well understood that majoring in Und…

> not told to "just go to the best college no matter what" > majoring in Underwater Basket Weaving was not a great idea from a financial point of view I've met many people in places like McKinsey or Goldman Sachs (i.e. "elite" high paying jobs) with degrees from Oxford or Cambridge in Philosophy, English, Arch & Ant or Theology (in "decreasing usefulness"). Many more than, say, graduates in accounting or business adm…

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