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Nearly 5M Americans in Default on Student Loans

wsj.com

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Re: Nearly 5M Americans in Default on Student Loans

#101

Post by kodablah »

CaptSpify wrote: post #85
mfukar wrote: post #82

Earlier quoted context omitted.

> Follow the money Paint, for those of us with no familiarity with the US system, a picture.

Insane administrative salaries, ridiculous sports budgets, new buildings and amenities that no student needs ( https://www.washingtonpost.com/sports/colleges/one-schools-f... )

Alternative reason they charge such high rates: because they can. The demand (and the system/society that encourages it) is there. All of those items you listed I believe are the effect of having more money, not the cause of collecting more.

Re: Nearly 5M Americans in Default on Student Loans

#102

Post by JBlue42 »

japhyr wrote: post #60

I'm a high school math teacher. As part of their high school math education, I encourage all of my students to do one of their projects on analyzing loans. I ask them to pick an item they might take a loan out for, such as a car, a boat (we live in a small fishing town in Alaska), a house, or a student loan. They pick a realistic loan amount, APR, and term length. Then they run the numbers on the loan. I demonstrate…

Very cool that you are doing this.

I had an AP English teacher that took us 'off book' after we finished our tests to teach us real-life stuff (how taxes work, credit cards, etc.) for a few days. More students should be getting such a primer before college.

Re: Nearly 5M Americans in Default on Student Loans

#103

Post by PeachPlum »

oliwarner wrote: post #90
japhyr wrote: post #60

I'm a high school math teacher. As part of their high school math education, I encourage all of my students to do one of their projects on analyzing loans. I ask them to pick an item they might take a loan out for, such as a car, a boat (we live in a small fishing town in Alaska), a house, or a student loan. They pick a realistic loan amount, APR, and term length. Then they run the numbers on the loan. I demonstrate…

I think it's hard to absolutely assess the value of a student loan —however predatory— without considering the prospects of having a higher education. Some degrees are worth a dodgy loan. Some really aren't. You could also say that many students wouldn't be in higher education without the loan. That is especially true here in the UK. That might not be a bad thing except that we've gone through an arms race so that ev…

I think the UK loan system is pretty much optimum. It's a "can't pay don't pay" system. Even on £40k gross my payments are £1710 a year, leaving £28k after deductions (not including pension).

I'm unlikely to default on that.

Re: Nearly 5M Americans in Default on Student Loans

#104

Post by PeachPlum »

ggm wrote: post #21
bradleyjg wrote: post #12

Earlier quoted context omitted.

The overwhelming majority of student loan debt is government backed and eligible for some kind of income based repayment plan. There are four different kinds, but the most common two use a formula of 10% of income after 150% of the poverty level for the relevant household size. It is entirely possible to have a required payment of $0, before even getting into forbearance or deferral. Car loans and mortgage loans are…

Assuming you don't deliberately hide income I guess. Some people have said that for those who get on the low interest, or non-accumulating interest loan schedules, its the best kind of debt you can have. The lein on income is a royal pain and for student debt, it often hits just at the point you want to use increased disposible income to do things like have kids, restart the cycle. I was lucky enough to go to univers…

A UK student now who earns £40k will pay £142 per month student loans yet £800 tax/ni and still take home £2400.

There's nothing to apologise for.

Re: Nearly 5M Americans in Default on Student Loans

#105

Post by School-Cotton »

dmh2000 wrote: post #65
ikeyany wrote: post #62

This did not happen by chance. The answer isn't hard to arrive at--simply ask why college is so expensive compared to the 1990s, and why states cannot afford to offset these costs anymore. America is selling out its future by convincing young people that they should go into debt to pay for "the college experience". But why does "the college experience" need to include superfluous staff and wasteful resources? Follow…

and the constant drumbeat that you must attend a $60k/year private school or your life is ruined. instead of a state college or better yet a 2 year community college + 2 year state. very cheap

I imagine you grew up either in an at least upper-middle-class family, or in an area with unusually driven and competitive teenagers compared to the national average.

There was absolutely no pressure, in my experience from a random boring part of white suburbia, for anyone to do anything but go to one of the states’s relatively cheap public universities.

People who went to places like MIT, Harvard, or expensive liberal arts colleges were a rare exception by far.

Re: Nearly 5M Americans in Default on Student Loans

#106

Post by chii »

basicplus2 wrote: post #77
defen wrote: post #71

Earlier quoted context omitted.

The idea is to make your debt exceed your assets. Can't collect a million from an estate that has zero.

The ideal finish is.. On death all your debts should be paid in full with the exception that the cheque for the funeral should bounce..

but it's your family member who pays that cheque, not you post humously.

Re: Nearly 5M Americans in Default on Student Loans

#107

Post by [deleted] »

mfukar wrote: post #82
ikeyany wrote: post #62

This did not happen by chance. The answer isn't hard to arrive at--simply ask why college is so expensive compared to the 1990s, and why states cannot afford to offset these costs anymore. America is selling out its future by convincing young people that they should go into debt to pay for "the college experience". But why does "the college experience" need to include superfluous staff and wasteful resources? Follow…

> Follow the money Paint, for those of us with no familiarity with the US system, a picture.

[deleted]

Re: Nearly 5M Americans in Default on Student Loans

#108

Post by jsymolon »

Sacho wrote: post #100
slg wrote: post #88

Earlier quoted context omitted.

Those things are easy scapegoats but they aren't the biggest cause of tuition increases. States simply aren't spending the money on colleges like they did in the past. [1] This is likely because of all the guaranteed loan money available so the states don't feel the same pressure to fund universities. For the specific case you linked above, $25m for athletic upgrades is really not that expensive for a school the size…

Link n1 presents some interesting information: "The picture is a bit different at private schools, which do not receive state funding but have nonetheless seen substantial tuition increases. At private nonprofit colleges, the spending categories described above — student services and faculty and administrative salaries — together explain most of the tuition increase over the past two decades." So perhaps this is a ca…

For one state in the Northeast, crushing debt load of state pensions. For a couple of decades, state leadership promised generous pensions and kept kicking the can down the road.

Something has to give and (higher) education funding is an easy item to cut.

"The current speaker of the house, Joe Aresimowicz, works for the American Federation of State, County and Municipal Employees, an amazing conflict of interest even by blue-state standards."

"The erosion of Connecticut’s suburban tax base is a more dire prospect than the continued weakness of its cities."

Re: Nearly 5M Americans in Default on Student Loans

#109

Post by sintaxi »

aaomidi wrote: post #81
gicadin wrote: post #76

Earlier quoted context omitted.

This would be a slap in the face of some people who went to school and worked odd jobs to pay for tuition.

Not doing it would be devastating for the economy in the long run. It's a hard choice but macro is more important than micro in these decisions.

Its a mistake in the long run to socialize risk. These former students are defaulting because the courses they took have no value in the marketplace.

Re: Nearly 5M Americans in Default on Student Loans

#110

Post by smadge »

japhyr wrote: post #60

I'm a high school math teacher. As part of their high school math education, I encourage all of my students to do one of their projects on analyzing loans. I ask them to pick an item they might take a loan out for, such as a car, a boat (we live in a small fishing town in Alaska), a house, or a student loan. They pick a realistic loan amount, APR, and term length. Then they run the numbers on the loan. I demonstrate…

The problem is not the lack of personal responsibility of students in their decision to take out loans. The problem is the systemic failure to provide high quality education to those qualified to pursue it. Those who are qualified to pursue higher education should not be prevented from doing so by questions of personal finances, inherited wealth, etc
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