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Student-Loan Debt Is Crushing Millennials

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Re: Student-Loan Debt Is Crushing Millennials

#81

Post by dragonwriter »

jniedrauer wrote: post #77
Jagat wrote: post #33

Earlier quoted context omitted.

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?

Student loan debt can't be discharged by bankruptcy. Lending in this situation is decently low risk. You're basically rent seeking with humans instead of land. Once you've got one, you can siphon off their excess productivity for decades. You'll get your money back in the long run.

> Student loan debt can't be discharged by bankruptcy.

Yes it can, though it is more difficult to do so than it is for other unsecured debt.

Re: Student-Loan Debt Is Crushing Millennials

#82

Post by sjg007 »

esotericn wrote: post #18

The normalisation of lending is a huge issue in general. There's a pervasive idea that being able to actually afford things is abnormal. That everyone should just take a loan out for education. For a car. For a house. For a cellphone. Yes, there are benefits to being able to get things 'earlier' than otherwise would be possible. And if everything goes right, the situation a borrower is in at the end of a loan may be…

The economy does feel like a game of musical chairs at times.

Re: Student-Loan Debt Is Crushing Millennials

#83

Post by skh »

moduspol wrote: post #80
skh wrote: post #73

Earlier quoted context omitted.

Lenders, through lobbying and regulatory capture, created the system. At least as I see things.

I don't doubt they contributed, but this isn't like a coal company getting emissions restrictions relaxed. There's a pretty common world view that financial viability should not even be a concern in young people's choices of what field to pursue, and subscribers to that are what created this policy. Lenders benefit, but this is driven by what a large group of people want society to look like. Even if the government s…

I can’t think of a reason why the number of gender studies students would increase under a universal higher education system for qualified students. Europe does not appear to be overwhelmed by gender studies graduates. Given the sexual harassment problem at Google, Uber, etc perhaps it would be good for there to be an increase in gender studies.

California has free higher education until Reagan became governor. It worked well then and provided it is only available to qualified students I don’t see why it can’t work now.

Re: Student-Loan Debt Is Crushing Millennials

#84

Post by sjg007 »

yhavr wrote: post #68

Why don't people move to countries with cheaper/free education then? Two major possibilities come to my mind: - US employers don't accept non-US diplomas. - Studying in the US gives you networking opportunities. If you come back after Europe, you don't have enough connections to compete with local graduates.

I did.. went to college in the UK. Germany has free University too.. US employers accept the non-US diplomas.

However, the networking issue may be a thing.. The real networking though is in sororities and fraternities I think. Or those secret societies... Then again you can always do an MBA.. ;)

Re: Student-Loan Debt Is Crushing Millennials

#85

Post by linuxftw »

dontJudge wrote: post #58
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…

> bankruptcy would be a start? Yes. This is the start and the end. Bankruptcy will stop lenders from making predatory loans. It puts risk on both sides. Tuition costs will naturally (and quickly) drop. Because there will be fewer people able to pay a crazy loan fueled price without a crazy loan given to them.

Precisely. Same applies to mortgage market as well.

Re: Student-Loan Debt Is Crushing Millennials

#86

Post by sjg007 »

abathur wrote: post #61

There are too many perverse incentives in the system; the incentives need to be realigned. The amount of money coming from students incentivizes a university to provide worse education to more students. Easy loan money discourages discernment all along the pipeline--at universities, lenders, students, parents...

The expansion of loans came because state governments cut funding to their universities and colleges.

Re: Student-Loan Debt Is Crushing Millennials

#87

Post by LyndsySimon »

JumpCrisscross wrote: post #35
Judgmentality wrote: post #4

Earlier quoted context omitted.

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.

The prohibition was retroactively applied to private loans already existing.

My wife and I chose private loans specifically to retain bankruptcy protection in case of serious life issues. A couple years after we took them, the law changed and we were stuck with the higher interest rates of the private loans without those protections.

For a time, we considered a Constiitutional challenge to that, as we believed it to be an ex post facto law. We didn’t want to incur the negatives of a bankrupty to gain standing, though, and couldn’t afford the astronomical legal fees that would certainly accompany that sort of case. As far as I know, no one has pursued it.

Re: Student-Loan Debt Is Crushing Millennials

#88

Post by gerbal »

thrill wrote: post #44
gerbal wrote: post #16

Earlier quoted context omitted.

Fortunately most of the debt is held by the US department of Education, and could easily be written off. (Minor inflationary effects asside).

So, your solution is to stick the taxpayers with the debt?

The actual costs of student loan forgiveness is fairly marginal compared to the economic benefits [1]. Further the federal government can write off debt without anyone ever having to pay for it. Student loans are created by the Treasury for the Department of Ed, repayment just gets dumped onto a balance sheet in the treasury that has no relationship to reality.

[1] http://www.levyinstitute.org/publications/the-macroeconomic-...

Re: Student-Loan Debt Is Crushing Millennials

#89

Post by jimktrains2 »

thrower123 wrote: post #72
thrower123 wrote: post #6

There are just so many poor bastards that spent lots of money on useless degrees. It is kind of a problem in the marriage market, because more women go to college and end up with massive college debt, which makes them financially unattractive.

I am curious why this is a hugely unpopular fact.

It's more the not-even-veiled misogyny than the statement about the relative worth of degrees that caused my down vote.

Also, most/all of this generation are told that it doesn't matter what your degree is in, just that you get a degree. That idea combined with some generic distain for trades is what drives kids to college regardless of cost. Men are also taking out loans.

We need to respect trades and respect that not everyone wants or needs to spend 4 more years in school.

We also need to stop being misogynistic, but that should go without saying.

Re: Student-Loan Debt Is Crushing Millennials

#90

Post by LyndsySimon »

thrower123 wrote: post #72
thrower123 wrote: post #6

There are just so many poor bastards that spent lots of money on useless degrees. It is kind of a problem in the marriage market, because more women go to college and end up with massive college debt, which makes them financially unattractive.

I am curious why this is a hugely unpopular fact.

I think people are inferring that you believe women’s hould stay home and not use their degree to earn.

Whatever your personal beliefs, a much larger proportion of women do exit the job market at or before the height of their earning potential to raise children. It’s not a moral judgement to say that this is could pose a problem.

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