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Nearly 5M Americans in Default on Student Loans

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Re: Nearly 5M Americans in Default on Student Loans

#121

Post by toomuchtodo »

gbacon wrote: post #115
oliwarner wrote: post #90

Earlier quoted context omitted.

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…

It’s similar in the U.S. people going six figures in debt for degrees that qualify them for $30k jobs is a problem, but that is a dirt-simple ROI analysis. Forcing nearly everyone into the college-bound track is a huge problem. Politically, vocational training is deemed classist or racist, and such utopianism creates a sad disservice to lots of young people who could be learning skilled trades and setting themselves…

It sounds like a partial solution to this is an infographic that must be provided by each college before allowing loans to be taken out showing:

* The degrees you're interested in

* The total cost of ownership of each of those degrees, based on the dollar cost + interest

* The years you'll have to work to pay off the degree based on the median salary of whatever career requires that degree

* Placement rate in the career you're obtaining you're degree for after obtaining your education (colleges usually fudge the numbers here by considering a student getting any job as "placement" after going through their pipeline)

Very similar to truth in lending requirements for credit cards and mortgages.

https://www.occ.treas.gov/topics/consumer-protection/truth-i...

https://en.wikipedia.org/wiki/Truth_in_Lending_Act

Re: Nearly 5M Americans in Default on Student Loans

#123

Post by sharemywin »

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…

But, you can't predict whether your going to finish college or not. or whether your going to get a "college grad" level job. or whether your going to get pregnant and not finish.

Analysis is great for aggregate decision making. But for the lotto of life. sometimes you can make the best decisions and still get screwed.

Re: Nearly 5M Americans in Default on Student Loans

#124

Post by mechhrt »

toomuchtodo wrote: post #121
gbacon wrote: post #115

Earlier quoted context omitted.

It’s similar in the U.S. people going six figures in debt for degrees that qualify them for $30k jobs is a problem, but that is a dirt-simple ROI analysis. Forcing nearly everyone into the college-bound track is a huge problem. Politically, vocational training is deemed classist or racist, and such utopianism creates a sad disservice to lots of young people who could be learning skilled trades and setting themselves…

It sounds like a partial solution to this is an infographic that must be provided by each college before allowing loans to be taken out showing: * The degrees you're interested in * The total cost of ownership of each of those degrees, based on the dollar cost + interest * The years you'll have to work to pay off the degree based on the median salary of whatever career requires that degree * Placement rate in the car…

You can't expect the college to give you a realistic prospect when they are the ones who stand to (non-) profit from your matriculation.

At the very least, they will give you a best-case scenario instead of a worst-case or median-case.

Re: Nearly 5M Americans in Default on Student Loans

#125

Post by SeoxyS »

amorphid wrote: post #39
ianai wrote: post #2

In the US people can’t clear student loans in bankruptcy. It’s a shame, I think, given the constant upward tick in tuition and lack of resulting careers. They can even go after the students parents.

USA checking in. I declared chapter 7 bankruptcy in 2010. Chapter 7 bankruptcy eliminates 100% of your dischargable debt. When the bankruptcy process had completed, I still owed ~200,000 USD, which was 140,000 USD in student loans and 60,000 USD in back taxes that were less than 3 years old, neither of which were dischargable.

At this point, couldn't you just arbitrage it, and take out loans / mortgages / cash advances / credit cards just to pay off student loans and back taxes, after after which you'd actually declare bankruptcy.

Re: Nearly 5M Americans in Default on Student Loans

#126

Post by toomuchtodo »

mechhrt wrote: post #124
toomuchtodo wrote: post #121

Earlier quoted context omitted.

It sounds like a partial solution to this is an infographic that must be provided by each college before allowing loans to be taken out showing: * The degrees you're interested in * The total cost of ownership of each of those degrees, based on the dollar cost + interest * The years you'll have to work to pay off the degree based on the median salary of whatever career requires that degree * Placement rate in the car…

You can't expect the college to give you a realistic prospect when they are the ones who stand to (non-) profit from your matriculation. At the very least, they will give you a best-case scenario instead of a worst-case or median-case.

That's why you use the law to do it, like we do with credit card and mortgage products.

Re: Nearly 5M Americans in Default on Student Loans

#127

Post by edpazu »

lightbyte wrote: post #119
rectang wrote: post #26

The relief of bankruptcy: only for entrepreneurs, not for students. Another instance of utterly corrupt selective application of theoretically sound conservative principles. Just like "deregulation" and Net Neutrality.

There is a reason for that. If your business goes bankrupt it can be liquidated to settle debts. Once that is done you are left with nothing. The same cannot be done with an education. You can't "give back" knowledge to your school, or sell it to someone else.

assuming any knowledge was actually gained.

Re: Nearly 5M Americans in Default on Student Loans

#128

Post by oliwarner »

gbacon wrote: post #115
oliwarner wrote: post #90

Earlier quoted context omitted.

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…

It’s similar in the U.S. people going six figures in debt for degrees that qualify them for $30k jobs is a problem, but that is a dirt-simple ROI analysis. Forcing nearly everyone into the college-bound track is a huge problem. Politically, vocational training is deemed classist or racist, and such utopianism creates a sad disservice to lots of young people who could be learning skilled trades and setting themselves…

Six figures?! I'm sure some people manage to clock that up, but the 2015 average[1] was $30,100 at graduation.

Edit: Don't get me wrong, that's still a huge pile of money for a worthless degree, or something you should have learned "on the job"... But it's a long way off $100k+

[1] https://ticas.org/posd/map-state-data

Re: Nearly 5M Americans in Default on Student Loans

#129

Post by MR4D »

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…

Pretty easy to assess if you google for some basic employment information (at least for the US). [1]

Doing so results in seeing that a sociology degree from an expensive school means you'll basically never be able to pay off the loan.

Get an engineering degree from a state school, and the interest rate almost doesn't matter. (yes, of course the interest rate matters - I'm just being a bit cheeky in the comparison.)

[1] This is literally the first link under google when searching for "starting salaries by major": https://www.forbes.com/sites/susanadams/2015/07/02/the-colle...

Re: Nearly 5M Americans in Default on Student Loans

#130

Post by tenpoundhammer »

Student loans are the stupidest form of loans. Do people need a college education? Absolutely. What's the best way to provide it? I have no idea.

Here's why student loans are dumb.

1. They are practically guaranteed to anyone who signs regardless of their future ability to pay it back.

2. The majority of people getting them are children and have are terrible at perceiving future outcomes. Ask any 18-year-old starting college if they will make more money than average after graduating, most will say yes.

3.College drop out rates are high. This site says 56% https://www.collegeatlas.org/college-dropout.html . Taking out a loan to help you make more money and then not making more money puts you at higher risk not to pay back.

4. Relatively speaking all majors are valued at the same cost within an institution. If I get a bachelors degree in computer science I pay the same tuition and costs as someone who gets a bachelors degree in ancient history, even though our potential earnings are vastly different.

The entire student loan and college education market is a mess. I suspect this is a sign that college should be a public good or has been messed with by folks that think it should be.

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