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Student Debt Lawsuits Are a Lucrative Business

nytimes.com

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Re: Student Debt Lawsuits Are a Lucrative Business

#31

Post by Joe-Z »

avs733 wrote: post #24
ChrisBland wrote: post #5

Earlier quoted context omitted.

If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…

>At the end of the day, maybe giving an 18 year old 120k to study underwater basket weaving for 4 years is not the best investment of money? This seems to be some undying myth that is really effective because it allows individuals to gloss over personal value judgements about individual's educational choices under the guise of economics. It massively oversummarizes college education AND market economics. It is a bad…

As mentioned in a similar thread yesterday the role of universities has shifted to providers of vocation rather than education.

That's why so many people make that point. I totally agree with you, everybody should study what they find interesting and the role of universities should be to provide education rather than vocation.

But if someone knows they are gonna rack up $100k+ in debts, they should seriously weigh their interest in a subject against the expected (monetary) outcome of getting that degree.

Re: Student Debt Lawsuits Are a Lucrative Business

#32

Post by Y_Y »

AdamJacobMuller wrote: post #23
ChrisBland wrote: post #5

Earlier quoted context omitted.

If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…

> put the school on the hook While I agree with that (a lot), you can repossess a degree. The school can choose to disavow knowledge of a student. Employer tries to verify your degree, nope, don't know you. You cannot repossess an education, but you can repossess a degree. How important that is, I'm not sure. Your other solution (clawing back money from the schools for useless/overpriced degrees) is far more elegant…

Apart from being libelous to deny that a student had received an education, they should still be able to demonstrate knowledge, provide a graduation photo etc.

Re: Student Debt Lawsuits Are a Lucrative Business

#33

Post by aplummer »

I think this is another situation where you can look at the models in the UK, Europe, other similar countries to find solutions.

If I grew up in the US and could have managed it, you can study in Germany as a foreigner for free. Other countries like Aus have a system where your loan is interest free and indexed with inflation, and you start paying it off after you make about $35k per year as a percent of income.

Re: Student Debt Lawsuits Are a Lucrative Business

#34

Post by whatshisface »

briandear wrote: post #27
maxerickson wrote: post #10

Earlier quoted context omitted.

The percentage of the population that enrolls in college has increased dramatically, so a given level of individual support has become more expensive in total. (I don't mean the above to really try to address whether it is feasible, just to point out that the situation has changed)

However, university cost inflation is even greater than health care costs. One of the only logical reasons is that as more “free” or “cheap” government money enters the system, the more inflation. Ready availability of student loans has made universities much more insulated from market pressures than “normal” industries. If you were to eliminate student loans, costs would drop like a rock. You wouldn’t have universit…

>Considering university tuition at a private university for a single student per year is literally more expensive than the salary of a single low level professor,

Woah. Maybe a few freshmen should band together and hire some PhDs to assemble a fire-and-forget university. If you can pay for one professor per student, a class of 20 students who want to major in the same thing could easily fund 4-6 classes/year and have a factor of five left over to rent a nice room in the community center. Obviously this isn't about education anymore.

Re: Student Debt Lawsuits Are a Lucrative Business

#35

Post by Posibyte »

ChrisBland wrote: post #5
arcanus wrote: post #3

It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.

If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…

The bank should be entirely at fault here. If they looked at a student's request for a loan that said I'm taking a basket-weaving class at Cornell and I need $120k to attend then it's the bank's prerogative to look into the student's past performance, the rate of return for basket weavers, and the bias to which Cornell would prompt higher or lower returns in this area.

Just like any area of lending, it's on the bank to assess the risk of lending.

(And as an aside and I say down below: This is why I feel banks shouldn't be in this position.)

Re: Student Debt Lawsuits Are a Lucrative Business

#36

Post by politician »

dsfyu404ed wrote: post #9

I'm rarely one to advocate for legislating solutions to problems but forcing schools be responsible for more of the communication with student/customer/debtor when it comes to loaning money, collecting payments and handling defaults would really cut down on the number of student loans that aren't paid back on schedule. If the school is responsible for the overhead cost of that communication they will have a strong in…

Given the benefits schools receive from being able to raise prices year after year with such limited downside, your idea makes a lot of sense.

It might be some way to impose some kind of responsibility onto the schools.

Re: Student Debt Lawsuits Are a Lucrative Business

#37

Post by emodendroket »

ChrisBland wrote: post #5
arcanus wrote: post #3

It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.

If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…

Being unable to easily get credit or rent an apartment in your 20s doesn't exactly sound like a walk in the park.

Re: Student Debt Lawsuits Are a Lucrative Business

#38

Post by ChrisBland »

turc1656 wrote: post #22
ChrisBland wrote: post #5

Earlier quoted context omitted.

If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…

"If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job" Yeah, but that's exactly why no one would ever lend that amount in the first place. That, I believe, was the OP's point. College should not cost what it does. And part of that reason is federal guarantees upon the debt. So colleges can raise the price and since the debt…

Education costs have risen faster than health care costs, you have to try to find some way to contain it or every generation becomes more indebted. As long as the feds are going to throw free money at this, we need to find some way of controlling costs. IMO asking the university staff to tighten their belts and be fiscally prudent is going to get you about as far as trying to build 1000 new mid rise apt buildings in SF. So, what ideas do you have? I don't want to limit federal funds or limit access to education, but we can't have skyrocketing tuition like we have seen for the past 20 years.

Re: Student Debt Lawsuits Are a Lucrative Business

#39

Post by mattnewton »

Posibyte wrote: post #35
ChrisBland wrote: post #5

Earlier quoted context omitted.

If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). You'd be 29 by the time the bankruptcy fell off your credit report, meaning credit might be tight in those years to buy a car or house, but you'd be debt free - something many people in their 20s and 30s would gladly do if they were gi…

The bank should be entirely at fault here. If they looked at a student's request for a loan that said I'm taking a basket-weaving class at Cornell and I need $120k to attend then it's the bank's prerogative to look into the student's past performance, the rate of return for basket weavers, and the bias to which Cornell would prompt higher or lower returns in this area. Just like any area of lending, it's on the bank…

That’s a great way to cut people from disadvantaged backgrounds out of college degrees, and therefore social mobility.
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