Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Student Debt Problem Is Worse Than We Imagined

nytimes.com

Post reply on HN
Print view View original

221–230 of 374 posts

Re: The Student Debt Problem Is Worse Than We Imagined

#221

Post by whatshisface »

RandomInteger4 wrote: post #188
whatshisface wrote: post #176

Earlier quoted context omitted.

The money to pay off the student loans will come from somewhere. Somewhere includes me . Should I ask you to buy me a new car if I spend everthing I have on what turns out to be a lemon? Can one investment firm ask another to cover the losses of its bad positions? Surely, if good and bad decisions are smoothed out to nothing then there's no reason left to make good, sometimes hard choices.

Do you get angry at people who have to file for bankruptcy?

The person who takes out a loan has already paid for their chance of bankruptcy, in the form of interest (because the risk of bankruptcy is priced in based on your creditworthiness.) However most student loans would never have been offered if the deal was the same as for regular loans. What's being proposed is that the deal be changed retroactively, and for innocent bystanders to foot the bill.

Think of it like this: party A defrauds party B (by misrepresenting the value of what they're offering), putting party B into irrecoverable debt in the process. Party A isn't going to give the money back (we can't get humanities professors to return their salaries, not to mention the less visible involved), so party B turns to their side and sees party C standing next to them...

The fraud is between the victim, the perpetraor, and the state. However I don't expect much to happen along those lines because even though what happened was clearly fraud, it's not clear exactly who was responsible or even how a law could be written so that they would have broken any laws. It's like that one scene in the grapes of wrath: when a hundred people each commit a fraction of a crime, you're just about stuck when it comes to holding any of them accountable.

Re: The Student Debt Problem Is Worse Than We Imagined

#223

Post by int_19h »

hellogoodbyeeee wrote: post #158
batteryhorse wrote: post #95

Earlier quoted context omitted.

I can't express how wrong this response is. Term limits are necessary, there should be no such thing as a "career politician". A politician should be required to have actual skills, and not just a nice smile. Experience with politics is meaningless, there should be NO establishment. It is always the new guy who reveals the truth to the people, which is a good thing. Experience only results in being able to lie to the…

This is such a strange sentiment to me. You would never hire an amateur Carpenter to work on your house. You would never hire an amateur DBA to build your company's key data architecture. But you want the people who run the country to be amateurs?

Carpenters and DBAs don't have a monopoly on legal violence. Politicians in charge of a polity do.

Re: The Student Debt Problem Is Worse Than We Imagined

#224

Post by krnsll »

Student loan terms and agreements should start accounting for a person's performance before taking on the loan (so high school, undergrad, whatever previous degrees) along with projected capacity to repay based on : -family record on debt repayment; -the projected choice of area of study and standard earnings projections of these degrees.

The system as currently constituted does not incentivize rational and pragmatic decision making on part of the students. Part of it will have to come from a change in the undergrad model: make people choose/apply a major or a broad area of study and allow for a certain amount of wiggle room. This way, for many undergrad will possibly be shortened and focussed or more vocational for others. We also need to find some way to force educational institutions to put skin in the game-- they currently get all their money without offering any guarantees on employability.

Presently, as a recent college grad, I saw far too many people on debt pursuing degrees unlikely to result in immediate or high paying employment -- eg., Any humanities field ending in "-studies". These people likely will not be in a position to pay the full value of their debt back anytime soon, nor will their degree hold any value (beyond sentimental) if they don't choose to go to grad school. Moreover, by giving them the same interest rates, we are implicitly penalizing/shifting burden on STEM students who essentially subsidize their credit/risk calculus.

Re: The Student Debt Problem Is Worse Than We Imagined

#225

Post by goolulusaurs »

It is obvious the college education system is flawed just from it's incentive structure. Colleges don't get paid based on the amount that you learn, they get paid based on the amount of your time they take up. Up to a point they even have a disincentive to aid learning, since they make more money when their students have to repeat classes.

Each additional semester gives the colleges many more opportunities to get money from students, so it should be no surprise that an environment of wastefulness flourishes, where students are encouraged to change majors midway through their degree programs and classes are taught by grad students who have never been trained as educators.

If we really want to fix education we have to find some way of ensuring that universities interest are actually aligned with educating their students.

Maybe a way to do this would be to separate teaching from testing. Have testing be established by some external body, and make it so both the university and the student receive a payout when the student succeeds on the test. Something like that would clearly require big changes in the way that people pay for college, but it seems likely that major changes will be needed anyway.

Re: The Student Debt Problem Is Worse Than We Imagined

#227

Post by erikpukinskis »

Latty wrote: post #60
drcode wrote: post #34

Earlier quoted context omitted.

I must say, as someone who made quite a few sacrifices to pay off my school debt, I'll be pretty miffed if less responsible people from my same generation get a break on their loans.

The attitude of 'I suffered so others should have to' is really damaging. I get why that's the instinctive response, but it's also going to lead to a worse society. By all means argue for a solution that also helps people who made sacrifice in the past, but people who didn't or couldn't being left to suffer is not a solution. To be clear - I get you are not saying you don't want to solve this because of that, but unf…

It's not about spite.

It's about whether rules matter. If people think the rules will be enforced, then we can all make plans based on the rules. If they don't, then all courses of action are on the table. Whatever gets the job done. That's back to rule of the strong.

See: how we treat big banks.

(Not to say we shouldn't have a debt jubilee, but that's what we risk)

Re: The Student Debt Problem Is Worse Than We Imagined

#228

Post by dstaley »

goolulusaurs wrote: post #225

It is obvious the college education system is flawed just from it's incentive structure. Colleges don't get paid based on the amount that you learn, they get paid based on the amount of your time they take up. Up to a point they even have a disincentive to aid learning, since they make more money when their students have to repeat classes. Each additional semester gives the colleges many more opportunities to get mon…

> Maybe a way to do this would be to separate teaching from testing. Have testing be established by some external body, and make it so both the university and the student receive a payout when the student succeeds on the test.

This is basically what standardized testing is all about, and it's a significant contributor to the inadequacy of education in the United States. We haven't figured out a scalable way to measure classroom outcomes.

Re: The Student Debt Problem Is Worse Than We Imagined

#229

Post by mmt »

harryh wrote: post #142
gamechangr wrote: post #113

I co-signed a loan for a friend who worked in as a Chemical Engineer for GE. Long story short, he had his Visa revoked, so I ended up on the hook for $16k of his student loans. I took a look at some of the financing terms and they are completely ridiculous. He paid $130 a month and at the end of the year he had only paid down $70 in principal. These terms should be criminal.

(130 * 12 - 70) / 16,000 = 9.375% That's a bit high but doesn't seem totally out of line for an unsecured loan.

Moreover, that payment would translate to a 35-year loan term, and lengthier terms tend to mean higher interest rates, as well (even on secured loans like mortgages or car loans).

Re: The Student Debt Problem Is Worse Than We Imagined

#230

Post by pakitan »

forapurpose wrote: post #149

I know it's oversimplified, but it results from American business' assertion that the 'free market' is the best solution to all problems, and American acquiescence to it. In other words, it comes from try to squeeze profit from every damn thing, from people's health, to education, to privacy, to government services (i.e., 'privatization') to everything else. I think the free market is a great tool, but like every too…

Except that, the way education works in USA, has little to do with the "free market". The free market is vastly distorted by the government guaranteeing student loans. I can assure you the picture would be very different if lenders had to actually assess every single loan candidate and applicants had to put up some collateral for the loan. The endless stream of free money to the universities would then stop and the students will get more careful with choosing a college and a degree. I'm not saying free market is the best way to go about education but it's certainly better than what USA has now.
Post reply on HN