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

271–280 of 374 posts

Re: The Student Debt Problem Is Worse Than We Imagined

#271

Post by [deleted] »

vilmosi wrote: post #269
ransom1538 wrote: post #252

Earlier quoted context omitted.

Good question. EG Why doesn’t everyone default on a loan? This is asking “how do loans work”. Typically, a loan with interest is a gamble. You want to get your money back with a return. If you loan money you want to ensure you will get your money back by qualifying the applicant. There is a risk though because they might not pay it back, thus you increase the interest rate according to how qualified the loan is. Good…

I think you're slightly missing the point. If student loans can be defaulted, it doesn't matter what the investor thinks or what interest you get or if you're backed up by the government or not. Even if you study [insert profitable degree], the rational action to do after graduating is to default, since students typically don't have much to lose.

[deleted]

Re: The Student Debt Problem Is Worse Than We Imagined

#272

Post by ransom1538 »

vilmosi wrote: post #269
ransom1538 wrote: post #252

Earlier quoted context omitted.

Good question. EG Why doesn’t everyone default on a loan? This is asking “how do loans work”. Typically, a loan with interest is a gamble. You want to get your money back with a return. If you loan money you want to ensure you will get your money back by qualifying the applicant. There is a risk though because they might not pay it back, thus you increase the interest rate according to how qualified the loan is. Good…

I think you're slightly missing the point. If student loans can be defaulted, it doesn't matter what the investor thinks or what interest you get or if you're backed up by the government or not. Even if you study [insert profitable degree], the rational action to do after graduating is to default, since students typically don't have much to lose.

Exactly. It is a poor investment option. So less investments are made, so less students attend, tuition plummets, community colleges spring back to life, people focus on degrees that offer pay, kids exit with no unforgivable debt, on and on.

That is bad?

Re: The Student Debt Problem Is Worse Than We Imagined

#273

Post by ddebernardy »

ransom1538 wrote: post #245
acjohnson55 wrote: post #18

It's a damn shame we've let this crisis reach this scale. Along with healthcare, climate change, the debt, our inauguration, and so on, we've been essentially frozen for most of my life as politicians concern themselves more so with existential power struggle. The right wants to bring us back to the gilded age, the left makes headlines but is barely relevant, and the center is trying to squeeze bandaid solutions whil…

Just let students default. The problem would be solved in a week. Poor investments should get poor returns. You should be able to default on any loan out of human dignity.

Aren't US student loans ultimately owned by the federal government and thus impossible to default on?

Re: The Student Debt Problem Is Worse Than We Imagined

#274

Post by barry-cotter »

s3m4j wrote: post #118
rayiner wrote: post #114

Earlier quoted context omitted.

Making unsupported assertions can’t make them come true. College should controversial. College, as it exists today, entails large expense and opportunity cost. We became a very advanced society sending only a small percentage of people to college. There is little reason to think tripling the proportion of people who go to college will improve the fundamentals of the economy.

Every piece of historic evidence tends to prove that higher education for an ever growing part of the population seem to correlate with better living standards.

Every piece of historic evidence tends to prove that mobile phone usage for an ever growing part of the population seems to correlate with better living standards.

Re: The Student Debt Problem Is Worse Than We Imagined

#275

Post by barry-cotter »

manquer wrote: post #190
hellogoodbyeeee wrote: post #158

Earlier quoted context omitted.

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?

Usually it is the bureaucrats that actually run the country and they are career professionals

Why not do away with the farce of elections then if the civil service is actually in charge?

Re: The Student Debt Problem Is Worse Than We Imagined

#276

Post by phkahler »

vilmosi wrote: post #269
ransom1538 wrote: post #252

Earlier quoted context omitted.

Good question. EG Why doesn’t everyone default on a loan? This is asking “how do loans work”. Typically, a loan with interest is a gamble. You want to get your money back with a return. If you loan money you want to ensure you will get your money back by qualifying the applicant. There is a risk though because they might not pay it back, thus you increase the interest rate according to how qualified the loan is. Good…

I think you're slightly missing the point. If student loans can be defaulted, it doesn't matter what the investor thinks or what interest you get or if you're backed up by the government or not. Even if you study [insert profitable degree], the rational action to do after graduating is to default, since students typically don't have much to lose.

And then lenders won't make the loans. That's exactly the point. Student loans were a bad idea in the first place. The ready availability of tuition money has lead to schools raising tuition FAR faster than inflation for the last 20-30 years. Most of that money isn't even going to education.

Re: The Student Debt Problem Is Worse Than We Imagined

#277

Post by vilmosi »

ransom1538 wrote: post #272
vilmosi wrote: post #269

Earlier quoted context omitted.

I think you're slightly missing the point. If student loans can be defaulted, it doesn't matter what the investor thinks or what interest you get or if you're backed up by the government or not. Even if you study [insert profitable degree], the rational action to do after graduating is to default, since students typically don't have much to lose.

Exactly. It is a poor investment option. So less investments are made, so less students attend, tuition plummets, community colleges spring back to life, people focus on degrees that offer pay, kids exit with no unforgivable debt, on and on. That is bad?

It's not bad. But it doesn't matter how much tuition costs or what degrees offer pay or not. Everyone will study whatever they want, borrow at 1000% interest if necessary or 1% interest for "profitable" degrees, and then dump the dept as soon as they graduate.

Or am I missing something? Original question, what's stopping everyone from defaulting right after graduation?

Re: The Student Debt Problem Is Worse Than We Imagined

#278

Post by CamTin »

throwawayjava wrote: post #186
OkGoDoIt wrote: post #121

Earlier quoted context omitted.

So they have an actual class dedicated to teaching you about this, and that class fails to enumerate all of your options? That seems like a sub-optimal situation. Sounds like my sex-ed class in Georgia which never even discussed birth control.

> So they have an actual class dedicated to teaching you about this, and that class fails to enumerate all of your options? Two thoughts: (1) such courses are often opt-in and don't necessarily have tons of free time for off-topic discussions; and (2) many schools with such courses do in fact have robust CC-tracked options that all-honors students are not exposed to. 1. A class like this was offered by my high school…

IME the idea of "tracks" is totally foreign to most urban school districts. We know about "honors classes" and the "vocational students" from movies, but the whole school system only exists to get students to pass state minimum requirements in whatever sketchy, technical way they can, or else house them until they turn 16 and can drop out. The "advisors" presumably exist to check a box on some state form: they certainly don't offer any actual assistance or advice in applying for school beyond being the office where you sign up for ACT or SAT test dates and handing out FAFSA forms.

The idea that a high school would have anything to do with preparing you for post-secondary education, or advising you on what type of institution to get it from, is totally foreign in districts like this.

Re: The Student Debt Problem Is Worse Than We Imagined

#279

Post by barry-cotter »

sethammons wrote: post #263
lotsofpulp wrote: post #233

Earlier quoted context omitted.

How does standardized testing contribute to the inadequacy of education? If anything, it shows which students need help, as opposed to grade inflation and throwing out A grades to everyone that hands in a homework assignment on time. Local parents can influence grades, but they can’t get past standardized testing (which is why colleges use SAT/ACT/AP grades to filter rather than GPA). Perhaps funding as a result of s…

Standardized testing leads to teaching to the test, and the tests need to be easily gradable, so we teach kids how to take tests that represents content in a mannor that is a mile wide but an inch deep. Multiple choice is a crap way to measure most understanding. This doesn't take away your other point: unsupportive environments. Socio-economically disadvantaged kids are truly disadvantaged.

Your argument proves that PhD qualifying exams are crap because it’s a generalised argument against testing, not a specific one against multiple choice tests.

It’s perfectly possible to write good tests, ones with good reliability and validity. If the test is good teaching to the test is not a problem.

Re: The Student Debt Problem Is Worse Than We Imagined

#280

Post by nafey »

user5994461 wrote: post #155
lowpro wrote: post #17

Still being in college, so many people I know just assume debt is no issue. It's not a concept that hits close to home, and most people seem to be fine with repaying them forever, like buying a new phone every 2 years or a new car every 3. I've never known anyone who couldn't get a loan, no matter how bad their grades or weak their employment after college looks. I don't really understand how that works and who would…

>>> I've never known anyone who couldn't get a loan, no matter how bad their grades or weak their employment after college looks. Student loans are risk free for the lender and very profitable. They will always be granted.

What are the consequences of non payment? Debtor's prison?
Post reply on HN