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Half of the US government's financial assets are student loans

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Re: Half of the US government's financial assets are student loans

#41

Post by snuxoll »

mylons wrote: post #29
chatmasta wrote: post #26

Earlier quoted context omitted.

Just because someone can’t default on their loan doesn’t mean they can pay it. It’s also not hard for me to imagine, in the near future, a social media movement like “don’t pay back your loans.”

ya, I had this thought as well, but then the IRS garnishes your wages until you die. So how does it pop? Seems like a lot of people would have to go to jail or something along those lines for it to actually happen?

You can die without enough assets to pay off your creditors, debt doesn't pass to kin so anything remaining is written off.

Re: Half of the US government's financial assets are student loans

#42

Post by 1986 »

rgbrenner wrote: post #12

So here's the US financial accounts report from the Fed (the source listed): https://www.federalreserve.gov/releases/z1/current/html/defa... I don't see anything in that report that confirms this.. did I just miss it? where did the data come from?

I was able to get similar numbers from: https://fred.stlouisfed.org/series/FGCCSAQ027S and https://fred.stlouisfed.org/series/FGTFASA027N

Re: Half of the US government's financial assets are student loans

#43

Post by empath75 »

tw04 wrote: post #9
jjoonathan wrote: post #3

Oof. What happens when a huge chunk of these default because educating everyone doesn't magically create jobs for everyone?

Well, given the only way to escape student loans is death... good luck defaulting?

You can't get blood from a stone. If they don't have the money, they don't have it.

Re: Half of the US government's financial assets are student loans

#44

Post by thinkloop »

One thing to keep in mind is that "assets" are far from "spending". Governments generally do not accumulate assets, everything they collect is reserved for spending (besides some operational accounts and things like foreign reserves). The student loan program is an exception and so figures heavily in this stat.

Re: Half of the US government's financial assets are student loans

#45

Post by CodeSheikh »

Thanks to baby boomers for depleting resources of this nation and now younger generations are stuck in this financial mess. Had they been more visionary with better overlook then today there would have been better opportunities for younger generation to earn and pay back those loans.

https://www.vox.com/2017/12/20/16772670/baby-boomers-millenn...

Re: Half of the US government's financial assets are student loans

#46

Post by [deleted] »

hidenotslide wrote: post #17
mxpxrocks10 wrote: post #2

is this for real? does anyone have any info that proves this right/wrong?

Almost assuredly false. The Federal Reserve balance sheet is US treasuries and mortgages, and Fannie Mae/Freddie Mac are mortgages as well. Probably not a complete data set.

[deleted]

Re: Half of the US government's financial assets are student loans

#47

Post by spectrum1234 »

trsohmers wrote: post #19
fixermark wrote: post #5

Earlier quoted context omitted.

They're protected from defaulting by law, because they can't be divested by bankruptcy. ... which merely means you need to calculate where the knee in the curve of issuing them was, extrapolate to life expectancy, and know when to cash out. Convenient!

Most of the student loan debt is owed to private creditors and it is the federal government that insures these loans. If a student doesn't make payments, the lender gets a guaranteed bailout by the government (no need for congress to step in like they did for the banks and auto companies). Basically, all the lenders are incentivized to give out as much money as possible, which incentivizes universities to raise tuiti…

Exactly!

Re: Half of the US government's financial assets are student loans

#50

Post by irrational »

matte_black wrote: post #13
jjoonathan wrote: post #3

Oof. What happens when a huge chunk of these default because educating everyone doesn't magically create jobs for everyone?

The banks that loaned out all that money will need massive bailouts or else shut down. Let’s be clear, students will NEVER be allowed to default these loans, nor should they. They must either pay it or take their debt to the grave and pass it down to their heirs.

Wait, what? Since when is debt passed on to heirs? If I die with credit card debt, that debt dies with me. My kids don't have to pay my debt. Any assets I own will be sold to help pay off my debts, but if the sale of my assets isn't equal to or greater than my debts, the debt holders have to write off that debt.
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