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Student-Loan Debt Is Crushing Millennials

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Re: Student-Loan Debt Is Crushing Millennials

#31

Post by codyb »

maverick2007 wrote: post #14

Student loans always did feel kind of predatory to me. We're asking 17 or 18 year olds whose brains haven't fully developed the ability to prioritize long term consequences to take on 10s or 100s of thousands of dollars in debt when in many cases, they don't even know their path through college (major etc). Now don't get me wrong, I don't have some sort of magic plan to fix this (maybe allow them to declare bankruptc…

Not only that but they're being pushed into college by a generation for whom college tuition was something like 400% less (I believe that's after inflation is calculated in but would have to look it up).

The fact is, while college administrators and presidents are doing just wonderfully, the actual discernible education has not become much greater for the student to warrant this increase.

So you're pushed in by a generation for whom the benefits were great, and the costs affordable to a college education where the costs are exorbitant and the benefits less so.

Re: Student-Loan Debt Is Crushing Millennials

#32

Post by graeme »

ant6n wrote: post #24
skh wrote: post #3

Often times when student loans come up people blame exclusively the borrower. We should keep in mind that in a properly functioning lending market both the borrower and lender take on risk. The lender should not left out of the equation on who to blame. Both parties are at fault. But we don’t have a properly function student loan industry. Lenders assume very little risk in this market but they should not be absolved…

The actual problem is high tuition.

Easy access to unlimited loans is a major comtributor to high tuition.

Re: Student-Loan Debt Is Crushing Millennials

#33

Post by Jagat »

johnm1019 wrote: post #21
maverick2007 wrote: post #14

Student loans always did feel kind of predatory to me. We're asking 17 or 18 year olds whose brains haven't fully developed the ability to prioritize long term consequences to take on 10s or 100s of thousands of dollars in debt when in many cases, they don't even know their path through college (major etc). Now don't get me wrong, I don't have some sort of magic plan to fix this (maybe allow them to declare bankruptc…

Then I guess I have a "fully developed adult brain" (whatever that is) and certainly couldn't fully understand all the effects of taking out a $120k loan to take a risk on a degree in a subject I don't know (by definition, otherwise why am I going to school for it?) - let alone long term risks and opportunity cost assessments. I think it puts anyone looking to go to college and 'move up the ladder' in a very difficul…

Honest question. Why doesn't the lender require the borrower to explain how they plan to repay?

Or why do they continue to lend large amounts for degrees where there's a low probability of getting a good salary after graduation.

Or does the govt assume the risk of student loan defaults?

Re: Student-Loan Debt Is Crushing Millennials

#34

Post by squirrelicus »

ant6n wrote: post #27
maverick2007 wrote: post #14

Student loans always did feel kind of predatory to me. We're asking 17 or 18 year olds whose brains haven't fully developed the ability to prioritize long term consequences to take on 10s or 100s of thousands of dollars in debt when in many cases, they don't even know their path through college (major etc). Now don't get me wrong, I don't have some sort of magic plan to fix this (maybe allow them to declare bankruptc…

Solution: lower tuition.

Which was the status quo before federal student loans.

Re: Student-Loan Debt Is Crushing Millennials

#35

Post by JumpCrisscross »

Judgmentality wrote: post #4
skh wrote: post #3

Often times when student loans come up people blame exclusively the borrower. We should keep in mind that in a properly functioning lending market both the borrower and lender take on risk. The lender should not left out of the equation on who to blame. Both parties are at fault. But we don’t have a properly function student loan industry. Lenders assume very little risk in this market but they should not be absolved…

I agree. I feel like most of the problem would be solved by allowing student debt to be erased by declaring bankruptcy. It's absurd that isn't the case.

> most of the problem would be solved by allowing student debt to be erased by declaring bankruptcy

Going forward. It's tough to stomach retroactively applying this to existing loans.

Re: Student-Loan Debt Is Crushing Millennials

#37

Post by thrower123 »

Judgmentality wrote: post #4
skh wrote: post #3

Often times when student loans come up people blame exclusively the borrower. We should keep in mind that in a properly functioning lending market both the borrower and lender take on risk. The lender should not left out of the equation on who to blame. Both parties are at fault. But we don’t have a properly function student loan industry. Lenders assume very little risk in this market but they should not be absolved…

I agree. I feel like most of the problem would be solved by allowing student debt to be erased by declaring bankruptcy. It's absurd that isn't the case.

If that was allowed, then the interest rates would have to float according to the likelihood that the loan was repaid. Good for CS and econ and engineering, not so good for lierature and gender studies.

Re: Student-Loan Debt Is Crushing Millennials

#39

Post by matis140 »

skh wrote: post #3

Often times when student loans come up people blame exclusively the borrower. We should keep in mind that in a properly functioning lending market both the borrower and lender take on risk. The lender should not left out of the equation on who to blame. Both parties are at fault. But we don’t have a properly function student loan industry. Lenders assume very little risk in this market but they should not be absolved…

I think our public education system is also to blame. We push kids down academic paths too often and many of those paths do not lead to professions that can sustain 45-80k debt after graduation. Too much easy credit is available driving up the price. Degrees are not properly valued. Degrees in social work should not cost the same as a degree in STEM because they are not worth the same. More kids should be going into trades like electricians, plumbers, and millwrites. Good careers that also pay through their apprenticeship programs and currently are looking for kids to train.

Re: Student-Loan Debt Is Crushing Millennials

#40

Post by dd36 »

Judgmentality wrote: post #4
skh wrote: post #3

Often times when student loans come up people blame exclusively the borrower. We should keep in mind that in a properly functioning lending market both the borrower and lender take on risk. The lender should not left out of the equation on who to blame. Both parties are at fault. But we don’t have a properly function student loan industry. Lenders assume very little risk in this market but they should not be absolved…

I agree. I feel like most of the problem would be solved by allowing student debt to be erased by declaring bankruptcy. It's absurd that isn't the case.

Powerful interests have corrupted the legal mechanisms that make markets work efficiently. Here it is bankruptcy. In other markets it is forced arbitration and preventing groups of people from joining together to share legal expenses. Leaving all accountability mechanisms to the government is bad for free markets.

Ideally, if you truly want to help low income people get an education through loans, it should be structured more like SBA loans. The lenders should take on a big enough % of the risk that they want to avoid defaults but not so little that they act recklessly and fund loans or schools that are unlikely to perform. I'm sure that if SBA loans were non-dischargeable, there would be an explosion in bad SBA loans that drag on the economy.

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