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The Absurdity of Student Loan Debt

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Re: The Absurdity of Student Loan Debt

#41

Post by Intermernet »

andrew_ wrote: post #32

Outrageous student loan debt, and the lack of means to pay for them after spending, has been an issue for at least 10 years now and has been thoroughly documented. It shouldn't be a mystery to anyone at this point, and it's baffling why people are still taking on these large debt loads for degrees and programs which don't have a snowball's chance in hell of paying off the debt in a reasonable amount of time. My own p…

As much as it's tempting to blame the author for the predicament she finds herself in, the reality is that those who offer these finance arrangements know that they're offering them to people who will be beholden to them for most of their lives. This is legal, but morally abhorrent. I don't know how to stop this trend, other than to tell a whole bunch of young people that they can't afford to learn further in the US educational system.

Re: The Absurdity of Student Loan Debt

#42

Post by darkerside »

justherefortart wrote: post #35
dokein wrote: post #26

Student loans should be dischargeable in bankruptcy after 10 years post-graduation (and not fully guaranteed past a certain amount, say $10K or $20K) -- hear me out. The common reason student loans are NOT allowed to be dischargeable is because, in the minute after graduating and without collateral, the student can declare bankruptcy with no effect (the vast majority are not buying a house within the time it would ta…

Maybe since college is the new High School we should fund colleges completely. I'm pretty sure my local high schools cost of administration haven't gone up 237% like colleges the last 20 or so years. https://www.usnews.com/education/best-colleges/paying-for-co...

Devil's advocate, but maybe that's why college has become the new high school?

Re: The Absurdity of Student Loan Debt

#43

Post by skrebbel »

kryogen1c wrote: post #5

It troubles me that topics like this usually turn into FUD about the 1% instead of recognizing government interference and subsidation as the problem. The parable of the scorpion and frog [1] is exactly relevant. I wish Americans would stop shouting for more government to fix problems the government created in the first place. [1] https://en.m.wikipedia.org/wiki/The_Scorpion_and_the_Frog?wp...

This must be the perfect HN content free libertarian retort.

The text is 100% generic. You could post it below any article that is somehow about a problem that is at least somehow, somewhat, just maybe, slightly caused by the government.

Your comment adds precisely as much to the discussion as a blank "Hi! I'm a libertarian!" would.

Re: The Absurdity of Student Loan Debt

#44

Post by bradleyjg »

ourmandave wrote: post #24

The first bill I received for my MFA loans was for $416. I panicked and applied for an income-based repayment plan, which, paired with my habitual underearning, lowered my payments to $96 a month. After five years of payments, I now owe more than what I originally borrowed because my payments haven’t even scratched the principal. Income based repayments forgives the loans and interest after 25 years. Original princip…

Keep in mind that under current law that forgiveness is taxable income to the borrower. So he'll still be left with one quarter to one half the forgiven principal, which by that time may well be greater than the original principal even in real terms.

Re: The Absurdity of Student Loan Debt

#45

Post by darkerside »

dpark wrote: post #29
tlot90 wrote: post #17

When people like Gillette take on debt, why is there never minimal cost-benefit analysis? Or do they ignore it? It's refreshing to read a reflection like hers.

> is there never minimal cost-benefit analysis? Of course not. A huge portion of the population has essentially no understanding of finances, which is why they need to do things like call to ask why their loan balance is going up. Worse, there is a feeling of helplessness when finances seem like a mystery, hence in this case actually needing someone else to tell them to call and ask. This is why the cries of “free ma…

That's what bankruptcy is for. It's actually an elegant solution for uncontrolled personal debt. The problem is that we haven't figured out how to properly apply that tool (or an alternative) to higher education.

Re: The Absurdity of Student Loan Debt

#46

Post by bradleyjg »

belorn wrote: post #38
kryogen1c wrote: post #5

It troubles me that topics like this usually turn into FUD about the 1% instead of recognizing government interference and subsidation as the problem. The parable of the scorpion and frog [1] is exactly relevant. I wish Americans would stop shouting for more government to fix problems the government created in the first place. [1] https://en.m.wikipedia.org/wiki/The_Scorpion_and_the_Frog?wp...

.

I think you have an outdated model of student loans. There's no longer a government guaranteed bank issued student loan model (FFEL ended in 2010). Instead the overwhelming majority of student loans are made directly by the Department of Education. For better or worse the student loan issue is almost wholly about government action, not banks.

Incidentally the same is true of mortgages post-2008. Again for better or worse, the US at the present time has a highly socialized credit sector when in comes to individual debt.

Re: The Absurdity of Student Loan Debt

#47

Post by bradleyjg »

dokein wrote: post #26

Student loans should be dischargeable in bankruptcy after 10 years post-graduation (and not fully guaranteed past a certain amount, say $10K or $20K) -- hear me out. The common reason student loans are NOT allowed to be dischargeable is because, in the minute after graduating and without collateral, the student can declare bankruptcy with no effect (the vast majority are not buying a house within the time it would ta…

There isn't much of a market for market forces to act upon. The overwhelming majority of student loans are made directly by the government with terms and underwriting (or lack thereof) set by Congress, not competition.

Re: The Absurdity of Student Loan Debt

#48

Post by mijamo »

darkerside wrote: post #42
justherefortart wrote: post #35

Earlier quoted context omitted.

Maybe since college is the new High School we should fund colleges completely. I'm pretty sure my local high schools cost of administration haven't gone up 237% like colleges the last 20 or so years. https://www.usnews.com/education/best-colleges/paying-for-co...

Devil's advocate, but maybe that's why college has become the new high school?

Not really, that phenomenon is hlobal, as observed everywhere in the developed world. It has mote yo do with competition to get jobs for young people.

Re: The Absurdity of Student Loan Debt

#49

Post by djrogers »

Intermernet wrote: post #41
andrew_ wrote: post #32

Outrageous student loan debt, and the lack of means to pay for them after spending, has been an issue for at least 10 years now and has been thoroughly documented. It shouldn't be a mystery to anyone at this point, and it's baffling why people are still taking on these large debt loads for degrees and programs which don't have a snowball's chance in hell of paying off the debt in a reasonable amount of time. My own p…

As much as it's tempting to blame the author for the predicament she finds herself in, the reality is that those who offer these finance arrangements know that they're offering them to people who will be beholden to them for most of their lives. This is legal, but morally abhorrent. I don't know how to stop this trend, other than to tell a whole bunch of young people that they can't afford to learn further in the US…

> other than to tell a whole bunch of young people that they can't afford to learn further in the US educational system.

There are tons of alternatives to funding a very expensive university through debt. Work part time, pick a cheaper school, get a bunch of credits at community college, or do all 3. And that is all without a single scholarship - of which there are many you may qualify for.

It’s irresponsible to just throw your hands up and claim that there’s no other way around it...

Re: The Absurdity of Student Loan Debt

#50

Post by pliftkl »

internetman55 wrote: post #14

Middle class should be able to afford college tuition. Stop being fancy when you're not and live within your means

A college tuition in what sense?

College degrees have different values - an engineering degree has a very different value than a history degree. Since the tuition at four year schools for both degrees is (largely) the same but the financial value after graduation is different, I would argue that one of those degrees is a luxury degree while the other is not.

If you're arguing "the middle class should be able to afford college tuition without debt", that's a slightly different argument, but I'm not sure it has any merit (given the above that students make _choices_ about what degree to seek and that some degrees are luxury degrees).

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