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

U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

bloombergquint.com

Post reply on HN
Print view View original

41–50 of 287 posts

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#41

Post by temp1928384 »

wtvanhest wrote: post #4

If you add up the total cost of all education institutions in the US, multiply by 4 years, then build a payment structure based on that number, there is simply not enough income left over in the corhort of new grads (first 10 years out of school) to pay the debt service. The problem has nothing to do with liberal art majors, or irresponsible borrowing. The problem is entirely driven by an excessive cost structure of…

Lambda School isn't exactly cheap. 17% of 2 years salary (edit) is capped at $30k. I paid less than that in tuition for 4 years of in-state tuition at a top 10 public school.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#42

Post by orev »

erentz wrote: post #35
anilshanbhag wrote: post #10

There is so much waste in universities: bloated admin/it staff , libraries filled with journals/magazines that no one reads, tenure system that doesn't allow you to downsize departments that have no students. Tuition can be reduced, however there is no incentive to do it since students can easily get loans.

Right. It’s become a government backed bubble. Somehow we need to pop it softly. I’m sympathetic to all the current student debt holders and providing relief to them but if we do that without putting and end to these guaranteed loans we’re just perpetuating (and making worse) the problem. Doing something like making community college and trade school level degrees free and leaving everything else to private loans sor…

People may not have jobs that match their degrees, but in many cases you need a degree to get a job. It’s an HR hurdle you need to clear to prove you can manage your time and eventually reach a goal you set for yourself.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#43

Post by maxkwallace »

exabrial wrote: post #22

No creditor would give a loan to someone who doesn't have a chance of paying it back. There are kids going to school for music therapy that are taking $100K in debt. It's time to end government subsidized loans, at least in the current form. The private market does a great job of evaluating risk, the only thing that needs to be done is ensure there is ample competition so it self-regulates.

In principle I agree, but in practice, it seems like private lenders are empirically doing a bad job evaluating risk. Rates for private loans are so high they can only be explained by a high default rate, even among "low-risk" demographics. These rates are very high even for students that we'd view as a low credit risk (e.g. studying CS and not music therapy). I think this shows the private market is doing a poor job evaluating risk.

That said, it's probably still a good thing long-term to end government subsidized loans. But that doesn't mean the private market is healthy. I'm not an expert on this area, and I don't know why there aren't "smart" lenders that do a better job arbitraging this. It could be possible that it's inherently difficult to predict whether someone will default or not.

As other people have pointed out, the real problem is the incentive structure for colleges and the increase in administrative staff (and thus tuition) who are enriching themselves at the expense of everyone else.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#45

Post by preommr »

brightball wrote: post #18

Stuff like this is one of the reasons I like the idea of a basic income...because you could easily just divert the BI to pay for long term services in a situation like this. Can’t pay student loans, your BI gets automatically directed to paying it off with no interest until the balance is clear. Need to pay for school in the first place? Direct the monthly BI to the university to cover tuition/housing/meal plan (or a…

This makes 0 sense because that's not how UBI works. You can't just give free money to everyone and expect things to magically fix themselves. Where are you even getting all this money under modern constraints to just give to every single person? But that's beside the point because even with UBI, you'd still have to sacrifice QoL to pay back the loans for your education because of the inefficiencies that exist in our current system. The end result would you be slaving away at work with high taxes that go off to pay off your loans and whatever percentage goes to UBI.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#46

Post by jumelles »

anilshanbhag wrote: post #10

There is so much waste in universities: bloated admin/it staff , libraries filled with journals/magazines that no one reads, tenure system that doesn't allow you to downsize departments that have no students. Tuition can be reduced, however there is no incentive to do it since students can easily get loans.

Universities waste money in a lot of ways - library funding is not one of them.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#48

Post by briandear »

toomuchtodo wrote: post #14
alkibiades wrote: post #8

Earlier quoted context omitted.

the only way i’d support that is if the government gets out of the loan game and if we get rid of the provisions that prevent people from filing bankruptcy on the loans.

Yes, I would agree with this, along with government providing for free community college as well as subsidizing trade schools. Fresh slate and we start over as a country on the right foot for education delivery.

I am a fiscal conservative, but I absolutely can get behind the free community college idea. It would be a net gain for the economy in my opinion as we could significantly reduce student loans to strictly means-tested criteria.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#49

Post by maxkwallace »

chrisseaton wrote: post #40
erentz wrote: post #35

Earlier quoted context omitted.

Right. It’s become a government backed bubble. Somehow we need to pop it softly. I’m sympathetic to all the current student debt holders and providing relief to them but if we do that without putting and end to these guaranteed loans we’re just perpetuating (and making worse) the problem. Doing something like making community college and trade school level degrees free and leaving everything else to private loans sor…

Why do you think community college and trade school level degrees should be free? It sounds like you think they're less wasteful somehow?

On average, they must be less wasteful simply because their tuition is so much lower. There's lower margins so less room for waste. They are also not a luxury good (college is) so they are more subject to market pressures.

Re: U.S. Student Debt in ‘Serious Delinquency’ Tops $166B

#50

Post by spinach »

anilshanbhag wrote: post #10

There is so much waste in universities: bloated admin/it staff , libraries filled with journals/magazines that no one reads, tenure system that doesn't allow you to downsize departments that have no students. Tuition can be reduced, however there is no incentive to do it since students can easily get loans.

Yet, at the same time, they also provide all those jobs. Is bloating and inefficiency all that bad if it provides good jobs and the jobs have a good work/life balance?
Post reply on HN