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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

#51

Post by reverend_gonzo »

exabrial wrote: post #44

Good Lord. There are two issues with college tuition: The first problem is people are not shopping around for a college education. There are thousands of incredible colleges around the USA that will give you the same or better education as a pricey school on the coasts. I did my easiest credits at Bulter County Community, then Wichita State University, before finishing up at Kansas State University. I only took on ab…

The problem is a little bit more than people are paying too much for a worthless degree. It's that they are being given a loan that is backed by the US Government to get that worthless degree.

If the government removes the backing and allows the free market to give loans and set interest rates, suddenly you'll see that the lowest rates will be for STEM degrees, and those who want to study music theory, art therapy, English literature, are going to get loans for school.

However, that defeats the entire narrative of "everybody should go to school and everybody should learn whatever they want."

Re: Student Debt Lawsuits Are a Lucrative Business

#52

Post by jononor »

xeromal wrote: post #43
Posibyte wrote: post #35

Earlier quoted context omitted.

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…

I agree that our student loans are junk and need a revamp, but if banks only loaned for the rate of return of a job, we'd have engineers and no one else. There is something to said for having artists and philosophers are "useless" as their degrees are perceived to be.

No need to go to expensive university to be an artist or philosopher, especially if one acknowledges that probably noone would hire you for that. And considering the major/minor setup in US education, you could always major in something that is in demand, and minor in philosophy. Unless one believes that one needs to be pained to make art or thoughtful critique, I think we might get more of it if people were less burdened by student debt.

Re: Student Debt Lawsuits Are a Lucrative Business

#53

Post by exabrial »

reverend_gonzo wrote: post #51
exabrial wrote: post #44

Good Lord. There are two issues with college tuition: The first problem is people are not shopping around for a college education. There are thousands of incredible colleges around the USA that will give you the same or better education as a pricey school on the coasts. I did my easiest credits at Bulter County Community, then Wichita State University, before finishing up at Kansas State University. I only took on ab…

The problem is a little bit more than people are paying too much for a worthless degree. It's that they are being given a loan that is backed by the US Government to get that worthless degree. If the government removes the backing and allows the free market to give loans and set interest rates, suddenly you'll see that the lowest rates will be for STEM degrees, and those who want to study music theory, art therapy, E…

Completely agree

(except maybe on music theory, bit more technical of a degree that most people realize)

Re: Student Debt Lawsuits Are a Lucrative Business

#54

Post by ProblemFactory »

xeromal wrote: post #43
Posibyte wrote: post #35

Earlier quoted context omitted.

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…

I agree that our student loans are junk and need a revamp, but if banks only loaned for the rate of return of a job, we'd have engineers and no one else. There is something to said for having artists and philosophers are "useless" as their degrees are perceived to be.

> if banks only loaned for the rate of return of a job, we'd have engineers and no one else.

But is it really worse than the current situation - where people borrow to study something enlightening but economically questionable, and then struggle for decades as they can't pay the debts nor declare bankruptcy?

I agree that studying arts is worthwhile, both for the individual and society as a whole. But there has to be someone to tell the 18-year-olds that they can't borrow $100k for it, or they are making things worse for themselves.

Perhaps if banks adjusted loan amounts to potential future income, then arts faculties will be forced to lower tuition fees. And some students will correctly see that they just can't afford it - better to discover that before starting instead of after graduation.

Re: Student Debt Lawsuits Are a Lucrative Business

#55

Post by iterati »

exabrial wrote: post #53
reverend_gonzo wrote: post #51

Earlier quoted context omitted.

The problem is a little bit more than people are paying too much for a worthless degree. It's that they are being given a loan that is backed by the US Government to get that worthless degree. If the government removes the backing and allows the free market to give loans and set interest rates, suddenly you'll see that the lowest rates will be for STEM degrees, and those who want to study music theory, art therapy, E…

Completely agree (except maybe on music theory, bit more technical of a degree that most people realize)

Doesn't matter how technical it is, it's still pretty worthless.

Re: Student Debt Lawsuits Are a Lucrative Business

#56

Post by Verdex_3 »

alexanderstears wrote: post #42
Sir_Cmpwn wrote: post #30

>In Miami, a law firm working for Transworld brought a lawsuit last year against Antonio Fuentes, seeking payment on a $13,356 student loan. With interest and fees, Mr. Fuentes now owed $25,322.31, according to the complaint. >“Many judges take the attitude: ‘I paid my student loans. You ought to pay yours. Don’t give me this nonsense about technicalities.’” That judges are even allowed to do this is awful. Why shoul…

Because there isn't enough skin in the game. Judges don't get punished for bad decisions and Transworld was allowed to mislead the courts for too long.

I don't think judges should necessarily be punished for bad decisions. The judiciary is a mechanism for allowing society to get along peacefully with one another (ie you can take your grievance to a judge instead of to the mob). I don't really want judges having to worry about punishment when doing their job.

On the other hand. Incompetent and corrupt judges have no place in the judiciary because it's basically an attack on the citizenry's ability to live peacefully. Now you need money, power, or violence to live security and that doesn't go well. Incompetent results in dismissal forever (sorry I don't have a good test for this). Corruption results in loss of past, present, and future benefits and significant jail time.

Third parties abusing the judiciary to abuse the citizenry is just as bad as a corrupt judge. Their end should be in a jail cell.

Re: Student Debt Lawsuits Are a Lucrative Business

#57

Post by geggam »

Thorncorona wrote: post #48
geggam wrote: post #6

Slavery is illegal. Letting people enslave themselves however is not. An indentured servant or indentured laborer is an employee (indenturee) within a system of unfree labor who is bound by a signed or forced contract (indenture) to work for a particular employer for a fixed time. The contract often lets the employer sell the labor of an indenturee to a third party. Indenturees usually enter into an indenture for a s…

That's a terrible argument. Even in the 1600s where indentured servitude was commonplace, the system was essentially slavery, with comparable death rates. Hell America had a rebellion because of white slavery - Bacon's rebellion. We got rid of slavery because of the social impact and also because of the moral implications. There's no reason to bring it back in another form.

Its not an argument. Its an observation of the existing monetary system.

When you borrow on your future earnings you are essentially putting yourself in indentured servitude to the banks.... and this is your choice.

No one forces you to do this.

Re: Student Debt Lawsuits Are a Lucrative Business

#58

Post by turc1656 »

ChrisBland wrote: post #38
turc1656 wrote: post #22

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" 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…

I agree that universities are not going to tighten the purse strings unless they have no choice. The cause, as you mention, is the feds throwing money at the education system. Therefore, the only logical solution is to remove that. You say you don't want to limit access to education, but the world isn't perfect. If you want everyone to have access (meaning having access to funding via loans) then you must accept the consequences of that. I, personally, don't have an issue with limiting access. Education that involves universities with buildings, faculty, land to maintain, etc. are not infinite resources. The natural check on the usage of resources is cost. Presumably, you don't sit around letting your sink run all day because you would wind up with a massive water bill. If people want to go to college and get an education, there is a cost involved. There are always going to be those who are unable to pay due to extreme financial situations. But that's why there are scholarship programs, grants, etc. that exist.

The education system used to work fairly well in this country several decades ago. You used to be able to go to college and pay for it in a very reasonable amount of time even through minimum wage jobs. Loans weren't even necessary. And when the end user pays the bills, the connection to cost is there so people pay attention to what it really costs because they bare the brunt of it right away and it's not hidden (so to speak) from them through loans that are paid off over 10-20 years.

It was only when the government decided that something was "wrong" and needed to be improved that the system started going to shit and getting ever more expensive and the product (education) getting worse and worse - the quality of the education people are paying for nowadays is abysmal half the time.

I discussed this recently in another thread with some specific numbers attached to my explanation: https://news.ycombinator.com/item?id=15647956

Re: Student Debt Lawsuits Are a Lucrative Business

#59

Post by f00_ »

iterati wrote: post #55
exabrial wrote: post #53

Earlier quoted context omitted.

Completely agree (except maybe on music theory, bit more technical of a degree that most people realize)

Doesn't matter how technical it is, it's still pretty worthless.

I would rather employ someone who has a music degree and learned web dev in their free time than the majority of shitty comp sci programs or an mba

As far as postmodern literature departments, sure they are worthless, and maybe counter productive

Re: Student Debt Lawsuits Are a Lucrative Business

#60

Post by castlecrasher2 »

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…

If we didn't prevent it then prospective students would be directed to make better decisions with their future than to get tens of thousands in debt and a useless degree because it's so easy.

"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?"

I think this burden should be on the lender first then the student. Banks don't just hand out money to an 18 year old for a business venture but they do for school because the government guarantees they can get it back.

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