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

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

#251

Post by greedo »

randomacct3847 wrote: post #141
malvosenior wrote: post #126

Earlier quoted context omitted.

I think this is the strongest argument against student debt relief. I would certainly not pay for someone else to do this: "You make some of your strongest friendships, connections, potentially future partner in school. You learn a lot about yourself."

I agree that taking out $200k+ for an undergrad degree is crazy. But what I paid at a public edu was completely reasonable and worth it in my opinion.

My daughter will be going to a small private school in a year; the total cost of tuition is around $7K. She'll be living at home since the school is within driving distance, and working summers to help pay for tuition and expenses. $30K for a BA is fine. Paying outrageous amounts to party on a student loan is what's nuts.

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

#252

Post by jogjayr »

Kephael wrote: post #181
jogjayr wrote: post #99

Earlier quoted context omitted.

I rather like the idea of making student debt dischargeable in bankruptcy (not retroactively obviously). Why should borrowers alone face the consequences of their bad decisions? Aren't lenders equally complicit? I understand that educational loans are essentially unsecured loans. So fine, let them be treated like personal loans and let lenders evaluate their risk accordingly. It'll quickly put an end to letting an 18…

The government backs the loans and this ends up being a massive subsidy for academia. If loans were priced accordingly, far fewer loans would be issued and there would be fewer students in college, and fewer colleges and universities.

Colleges and universities might start charging something more reasonable once they see that their students can't take out such large loans. Why exactly does it cost tens of thousands of dollars to deliver a liberal arts education anyway?

Otherwise, community colleges prepare students to transfer into year 3 of a 4-year college, at a fraction of the cost. This is a viable option for students who can't afford the full 4-year experience.

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

#253

Post by greedo »

bad_good_guy wrote: post #108
ourmandave wrote: post #32

This is why keep pushing my daughter towards a trade school. (Once you become immune to eye-rolling life gets easier.) There's a lot of companies with unfilled skilled blue collar jobs. And despite self-driving trucks, semi drivers can make some serious money. And HVAC projected job growth is 14% over the next 10 years. Thank you Global Warming!

Should you really be actively pushing your child in any direction? Would the best course of action not just be to make sure that trade schools are a completely viable choice, should she not be interested in an academic subject?

Expecting a 17 year old to make life long decisions is nuts, knowing what we do about brain development in young adults. If my daughter wants to study dolphin therapy, you bet I'm going to push her in a direction...

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

#254

Post by juliebooth »

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

#255

Post by kokokokoko »

ddebernardy wrote: post #178
kokokokoko wrote: post #165

Earlier quoted context omitted.

It's just a clever way for the government to spend less than it would. The idea is that it is cheaper to cover all the defaulted loans than it would be to pay for everyone's education upfront. And all the private insurance that will get defaulted on is actually free money the wealthy essentially donated to education. And dont forget that a chunk will be covered by inheritance when the younger generations parents pass…

> The idea is that it is cheaper to cover all the defaulted loans than it would be to pay for everyone's education upfront. European here as well, but best I'm aware what you're saying is not how it works. The US government is the student loan lender at the end of the day when you work through the insurance chain. And in contrast with mortgages, car loans, credit cards, etc. where you can declare bankruptcy to make t…

> wage garnishment

Exactly, it just becomes a deferred tax. There are also laws that cap how much a person's wages can get taken specifically with student loans. It maxes out at around 10%.

Again, I do not agree with it. But to pretend the sky is falling is false. That's also why, as you've noticed, laws have been adjusted in the wake of the abuses of the for profit university industry. As well as accreditation crack down on the organizations that accredited these for profit universities.

I'm not saying it's right or just. I'm only saying it's intentional and not some giant debt bomb surprise that the government is not expecting.

It's just kind of how the US tries to do things. By having loans they are trying to apply market forces. The idea is that students will do a better job as a whole deciding what schools and programs continue. And again again, I'm not saying I agree. Just relaying that there is an actual design behind it.

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

#256

Post by exabrial »

maxkwallace wrote: post #43
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…

That's because they're not allowed legally to take those things as risk factors... Which is also hilarious. No creditor world finance a 19 year old male for a $120,000 high horsepower sports car at 6% interest. Yet government regularly does equivalent amount of money.

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

#257

Post by will4274 »

pyrophane wrote: post #227
booleandilemma wrote: post #218

Earlier quoted context omitted.

Or, you know, you could just pay your debt, like any self-respecting person would.

When companies can't pay back a loan they declare bankruptcy without a second thought and face little societal judgment for doing so, but when individuals do the same thing is labeled not just as a financial shortcoming but as a moral weakness as well. I think that attitude causes a lot of harm. People subject themselves to a great deal of suffering to avoid having to say "I can't pay this back," when sometimes that…

> When companies can't pay back a loan they [...] face little societal judgment for doing so

Citation needed. At least where I'm from, the stereotype of the corner grocery store that declares bankruptcy every 7 years is still shared as a negative

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

#258

Post by will4274 »

arbitrary_name wrote: post #163
SlowRobotAhead wrote: post #153

Earlier quoted context omitted.

>No one should pay back their student loan debt. Seriously, just stop. Sorry. But you took a debt, you pay it back. Integrity isn’t outdated. I agree that the idea and industry behind “13th grade” is dumb. Obviously not every kid should be encouraged to take on debt to go to college. But “stop paying your debts” is a bad message imo.

Let's take the morality out of it. It's been injected in there for the benefit of the lenders. They charge an interest rate to cover their risk. Right now, with the fact that debt holders cannot default, they are getting an unfair deal. Defaulting on the debt and refusing to pay effectively triggers the risk that they were charging interest on. Like strikers refusing to work until better working conditions are provid…

Just because loans cannot be discharged in bankruptcy doesn't mean they are risk free. Some people die before repaying their debts, some people leave the country or otherwise become impossible to track down. In these cases, the bank eats the cost of the loan and has to make it up on other loans. risk is limited not eliminated.

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

#259

Post by exabrial »

zanny wrote: post #130
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.

> The private market does a great job of evaluating risk Like it did in 2007? One in a million voices might have even thought to bring up how spoiled the housing loan market was, but the markets kept singing the tune of growth until hundred year old banks were out of business from loan defaults. That was the government pushing bad loan policy on private banks who lopped them up like candy from a free money fountain u…

What part of the private market remained to compete after government-sponsored-entity lenders enter the mortgage market during the housing crisis?

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

#260

Post by indentured »

will4274 wrote: post #257
pyrophane wrote: post #227

Earlier quoted context omitted.

When companies can't pay back a loan they declare bankruptcy without a second thought and face little societal judgment for doing so, but when individuals do the same thing is labeled not just as a financial shortcoming but as a moral weakness as well. I think that attitude causes a lot of harm. People subject themselves to a great deal of suffering to avoid having to say "I can't pay this back," when sometimes that…

> When companies can't pay back a loan they [...] face little societal judgment for doing so Citation needed. At least where I'm from, the stereotype of the corner grocery store that declares bankruptcy every 7 years is still shared as a negative

If the worst I could do is get a bad reputation I would gladly discharge the $100,000 I owe... Because at the end of the day, maybe that store is viewed negatively, but guess what? They’re still not in debt anymore.
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