U.S. Student Debt in ‘Serious Delinquency’ Tops $166B • Hacker News Board

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

#61

Post by tfolbrecht » Sat, Feb 16, 2019, 6:29 PM UTC

temp1928384 wrote: post #41

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.

Read there ISA, there is a cap, it's at 30k. You only pay if you make a salary greater than 50k a year. It's also six months full time, intensive, and targeted. They feel it's their duty to help you find a job, and have found a job (>50k) for 100% of their first cohort. Find me a college with similar numbers.

[ISA FAQ](https://lambdaschool.com/faq/)

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

#62

Post by kaycebasques » Sat, Feb 16, 2019, 6:29 PM UTC

Auto loans are looking interesting, too.

* $1.27T of outstanding debt.

* Subprime share of that fell to 22% but because so many loans are being created, total number of subprime borrowers (SBPs) is now at all-time highs.

* 8% of SBPs are seriously delinquent. Cycle low was 6% in 2012. Peaked at 10% in 2010.

* Increasing share of prime loans is offsetting the deteriorating SBP picture.

* “Although rising overall delinquency rates remain below 2010 peak levels, there were over 7 million Americans with auto loans that were 90 or more days delinquent at the end of 2018. That is more than a million more troubled borrowers than there had been at the end of 2010 when the overall delinquency rates were at their worst since auto loans are now more prevalent. The substantial and growing number of distressed borrowers suggests that not all Americans have benefitted from the strong labor market and warrants continued monitoring and analysis of this sector.”

https://libertystreeteconomics.newyorkfed.org/2019/02/just-r...

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

#63

Post by lsd5you » Sat, Feb 16, 2019, 6:29 PM UTC

orev wrote: post #42

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…

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.

But this is a completely zero sum consideration, and as such from a policy point of view it makes no sense to make any allowances for this.

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

#64

Post by jackpirate » Sat, Feb 16, 2019, 6:29 PM UTC

hskaw wrote: post #34

reader5000 wrote: post #5

But I thought the more a degree costs the more it magically increases lifetime earnings?

It does: if degrees cost more, fewer people can access them, so the market has fewer people with that expertise, so they can make more money.

You missed the key step that the people who access these programs are already wealthy, and wealth breads wealth like rabbits.

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

#65

Post by Coding_Cat » Sat, Feb 16, 2019, 6:29 PM UTC

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…

There is a rather simple way of stopping the ever growing tuition bubble, one that is employed in the Netherland, but I feel like it won't be popular in the US: Cap the tuition a college is allowed to charge and restrict them from charging additional fees.

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

#66

Post by brohoolio » Sat, Feb 16, 2019, 6:29 PM UTC

There's going to be a bunch of comments about waste in universities, how people are irresponsible, trade schools, government alone guarantees that make it a crisis, no ability to discharge debt, etc.

The two big things that typically don't get brought up in these discussions is that government funding for college is way down and medical costs. All these state schools, which are pretty much the backbone of higher education in america are chronically underfunded. The last 40 years in america we have been borrowing against our future and higher education funding is just one aspect.

The second aspect is that higher education is fairly labor intensive, a large part of the labor cost is health care. When a pharmaceutical company acquires the rights to a rare drug and jacks up the cost 1000% that cost ultimately is passed on to students.

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

#67

Post by strictnein » Sat, Feb 16, 2019, 6:30 PM UTC

temp1928384 wrote: post #41

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.

What year did you pay $8k a year for a "top 10" public school?

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

#68

Post by blattimwind » Sat, Feb 16, 2019, 6:33 PM UTC

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.

> There is so much waste in universities

I agree, but you can hardly force low-performing students to quit and pursue apprenticeship instead?

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

#69

Post by brightball » Sat, Feb 16, 2019, 6:33 PM UTC

preommr wrote: post #45

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…

The core idea is that every citizen is getting a monthly stipend of some basic amount. If that were to happen, it stands to reason that policy oriented side effects would kick in over time to work alongside such a stipend.

First among those, actually securing student loans against the BI.

I’ve never seen BI as being anything that would be desirable to live on though. Closer to survival level income in the area of $700 / month. You’d partially pay for it by reducing all other types of government service payouts (welfare, social security, disability, unemployment) by that amount. You’d likely see homeless shelters, rehab clinics, etc open that were designed to operate on a per person budget equaling the BI.

At the same time, you can potentially eliminate minimum wage discussions since it would immediately supplement those workers.

I think it’s doable at a low level as long as you partially address the costs with dents in the budgets of many of the other existing services.

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

#70

Post by temp1928384 » Sat, Feb 16, 2019, 6:34 PM UTC

strictnein wrote: post #67

temp1928384 wrote: post #41

Earlier quoted context omitted.

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.

What year did you pay $8k a year for a "top 10" public school?

I went to University of Washington and graduated in 2010. It's now $11,207/year. I think in my first year it was actually $6500 and rose to around $8k in 2010.