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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

#101

Post by [deleted] »

logfromblammo wrote: post #80
ChrisBland wrote: post #41

Earlier quoted context omitted.

You and I are the bank, these loans are federal, no private bank is giving these loans out, you and I are and we are footing the bill when the natural default occurs

Private banks are giving the loans out. When they do, they keep the interest, but shovel the default risk onto the treasury without paying them to do it. The Dep't of Education also gives out direct federal loans and grants, and sometimes those private banks service those loans, but federal financing is now not quite enough to pay for a whole degree, so private loans are filling the gap, at greater expense to the stu…

[deleted]

Re: Student Debt Lawsuits Are a Lucrative Business

#102

Post by EADGBE »

tudelo wrote: post #73
godelski wrote: post #70

Earlier quoted context omitted.

Here in America we gain interest while we are in school and have to start paying it off 6mo after we graduate. For context, that is the average time it takes a student to get a job (right when they are also paying moving costs and such). Payment used to initiate after 9mo after graduation.

Not all loans accumulate interest while attending school. Look at unsubsidized vs subsidized federal loans.

Not all students qualify for such subsidations.

Re: Student Debt Lawsuits Are a Lucrative Business

#103

Post by AdamJacobMuller »

Y_Y wrote: post #32
AdamJacobMuller wrote: post #23

Earlier quoted context omitted.

> 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.

Ok, so, don't libel.

"We refuse to confirm or deny"

Or

"We see that person in our records, but, we aren't allowed to disclose if they did/did not complete a degree (and what that degree might be) because their account is blocked."

There are lots of ways that it can be tweaked to be legal. I still think it's not as good of an idea as clawing money back from the schools. They created the mess, they can fix it.

Re: Student Debt Lawsuits Are a Lucrative Business

#104

Post by mattnewton »

bluGill wrote: post #94
mattnewton wrote: post #39

Earlier quoted context omitted.

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

Which disadvantaged? The smart person who is born poor or a minority will do just fine as their grades will carry them. Thus a bank should give them a loan - based on their high school report card. The "stupid" person regardless of background is unlikely to do well and should not get a loan.

I don’t think that banks should solely be in charge of who gets a chance in this country. Furthermore the myth of the good grades regardless of home life is just not realistic in my experience- many people need to grow into adulthood later because of instability, malnutrition, or the ability of the school they went to to prepare them for standardized testing.

Re: Student Debt Lawsuits Are a Lucrative Business

#105

Post by [deleted] »

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…

[deleted]

Re: Student Debt Lawsuits Are a Lucrative Business

#106

Post by smaddox »

I just had an idea this morning for how to fund universities that I think could solve many of the issues associated with student loans. The idea is that instead of students paying tuition, they would sign contracts to pay a fraction of their income for several years after graduation, e.g. 1% of income for 15 years (perhaps with a cap). Enforcement could be difficult, but this would much better align incentives with the desired result, i.e. to educate! It would also incentivise universities to help alumni get and hold high paying jobs.

Starting such a university would require a lot of startup capital, but it would become self sustaining in less than a decade.

Re: Student Debt Lawsuits Are a Lucrative Business

#107

Post by dkonofalski »

tomjen3 wrote: post #88
heifer2822 wrote: post #75

Earlier quoted context omitted.

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.

Right... but what about a potential doctor vs. a potential social worker? A poor student that tries to become a doctor is far riskier than a rich student trying to be a doctor. I believe that's the issue here...

Re: Student Debt Lawsuits Are a Lucrative Business

#108

Post by exabrial »

hibikir wrote: post #67
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…

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…

"your career path doesn't take the name of the institution into account"

So basically, only applicable with Law Degrees

Re: Student Debt Lawsuits Are a Lucrative Business

#109

Post by eli_gottlieb »

ChrisBland wrote: post #89
eli_gottlieb wrote: post #62

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). 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

Once upon a time it was legal, so if it was smart, people would have done it back then.

Re: Student Debt Lawsuits Are a Lucrative Business

#110

Post by nunez »

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…

You’re looking at this too narrowly. If you want to work for McKinsey or an investment bank out of college, you go to an Ivy. That job alone can set you up for life if you play your cards correctly.

Some lucrative career tracks are very hard to get into without that name brand on your diploma.

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