It is remarkable that you cannot declare bankruptcy from student debt. We have essentially decoupled the price of college from the expected return.
Because there is no collateral.
Student Debt Lawsuits Are a Lucrative Business
81–90 of 120 posts
Re: Student Debt Lawsuits Are a Lucrative Business
#82Good 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…
Shopping around for college education only makes sense if your career path doesn't take the name of the institution into account. Careers are so path dependent that landing in a worse first job can make a huge difference in lifetime earnings. See, a good engineer I know, who studied in University of Missouri Rolla. Their CS degree is not all that different from a big name, as far as curriculum is concerned, but many…
Heh, I went to that school and I had the same problem: literally everyone would ignore me because I went to a Midwest state school.
I went and did my own thing so my story is fine. But I wonder about how much good talent is ignored just on the basis of where one went to college.
Re: Student Debt Lawsuits Are a Lucrative Business
#83Earlier quoted context omitted.
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…
> The education system used to work fairly well in this country several decades ago. That is...a pretty remarkable claim. I think there are a fair number of people - lots of women, lots of people who grew up smart and poor, lots of non-white folks - who would contest that pretty stridently.
What you're referring to were societal/cultural issues and artificial limitations to education.
I'm referring purely to the quality of higher education for the price that was paid. Accounting for inflation, in real terms the price that was paid for college was a small fraction of what is being paid today. And anyone (who was not subject to artificial limitations on access) could pay for it in a very reasonable amount of time and not go into debt by working, as I showed in that link, ~250 hours a year at minimum wage to pay tuition - tuition assumed to be for one semester, not two - so double that to ~500 hours a year at minimum wage to pay for the whole cost of that year's tuition. That's extremely affordable and no one had to go into debt to do it. In fact my father did exactly this in the early 80's. He worked part time and went to school and had no debt upon graduating.
Re: Student Debt Lawsuits Are a Lucrative Business
#84Earlier quoted context omitted.
Shopping around for college education only makes sense if your career path doesn't take the name of the institution into account. Careers are so path dependent that landing in a worse first job can make a huge difference in lifetime earnings. See, a good engineer I know, who studied in University of Missouri Rolla. Their CS degree is not all that different from a big name, as far as curriculum is concerned, but many…
Heh, I went to that school and I had the same problem: literally everyone would ignore me because I went to a Midwest state school. I went and did my own thing so my story is fine. But I wonder about how much good talent is ignored just on the basis of where one went to college.
I went to KU. Living in KS and making just as much as those in the coastal rat race, without the crazy housing prices. If you know your shit, you'll do fine.
Re: Student Debt Lawsuits Are a Lucrative Business
#85Earlier quoted context omitted.
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 at…
"The judiciary is a mechanism for allowing society to get along peacefully with one another"
The Judiciary is much more than that. But even if that were the case, judges who make bad decisions impair the peace that they're charged with keeping. It would increase peace to get rid of bad judges and prevent them from issuing bad judgements.
I think our primary issue is "what constitutes a bad decision". You separate out bad decisions from incompetent and corrupt decisions. I think that any 'bad decision' is one that reveals a Judge to be incompetent or corrupt. In this case, I think the judge made a bad decision because their decision didn't reflect the evidence available to them. They should be put on probation at the least.
Re: Student Debt Lawsuits Are a Lucrative Business
#86Earlier quoted context omitted.
It's hardly remarkable. Student loans are originated without regard to credit risk, at the same interest rate for all borrowers. Moreover, pretty much every student is eligible to declare bankruptcy soon (and often, long) after they graduate. Requiring loans to be freely originated on one hand, and permitting people to discharge them in bankruptcy on the other, would be completely unworkable. As to why we require loa…
Is this same logic supposed to apply to professional school debt, which likewise can’t be discharged despite the extremely low credit risk?
Yes. If your credit risk is so low that non-dischargeability is a bad deal, presumably you can just get a private, fully dischargeable loan.
The basic structure of this argument is really straightforward: if student loans were dischargeable in bankruptcy, it would be irrational for a lot of student borrowers not to go into chapter 7 after school, when their earnings are so low that they qualify and their time horizon for major financial decisions is so far into the future that their current credit rating doesn't matter.
Re: Student Debt Lawsuits Are a Lucrative Business
#87Earlier quoted context omitted.
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 at…
> I don't think judges should necessarily be punished for bad decisions.
There are poor subjective decisions and then there are bad decisions.
"The technicality of the law" is a core component of the job of a judge. _Wilfully disregarding_ that is incompetence.
Example: in my state I work as a paramedic or EMT. In many states, including mine, there are Good Samaritan laws that protect bystanders, should they do harm in attempting to do well. There's a standard of reasonability.
For me? Not so much/at all. If this is my job, I am held, by my employer, by the state, by the Medical Director (whose medical license I practise under), and my patients to a core competency that means I am expected to know, and act as a professional care provider, and that I can be sued, sanctioned, or otherwise for failure to meet those standards.
And it should be the case.
Re: Student Debt Lawsuits Are a Lucrative Business
#88Earlier 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…
If you remove the government backing you'll see more of a divide on the socioeconomics of who gets to go to college and who is too risky to lend to.
Probably some, but really how much? A doctor is a doctor and makes a lot of money. A social worker, no matter the skin color, does not.
Re: Student Debt Lawsuits Are a Lucrative Business
#89Earlier 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 (you'd have no income and no assets). If you'd be stupid not to do it, how many people have actually done it? If it was actually done at a certain rate, why wasn't that rate priced in? >IMO the only way to solve it is to put the school on the hook for part of the $$ if th…
You can't discharge student debt in bankruptcy so no one has done it
Re: Student Debt Lawsuits Are a Lucrative Business
#90Earlier quoted context omitted.
>If we didn't prevent it, then you'd be stupid to not go to college take out $120k in loans and then declare bankruptcy at 22 prior to taking a job (you'd have no income and no assets). If you'd be stupid not to do it, how many people have actually done it? If it was actually done at a certain rate, why wasn't that rate priced in? >IMO the only way to solve it is to put the school on the hook for part of the $$ if th…
You can't discharge student debt in bankruptcy so no one has done it
> You can't discharge student debt in bankruptcy
Yes, you can, it's just more difficult than other unsecured debt. This is a distressing popular myth which leads people to fail to explore their options.
https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancell...