Biggest problem it's almost impossible to discharge student loans in bankruptcy.
The reason for this is simple, a lender cannot repossess someones education to mitigate the damage.
Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
81–90 of 372 posts
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#82We need to get rid of student loans. The problem is that Universities don't ever need to worry about a student defaulting and can keep increasing the prices of tuition with impunity. If they default, they don't care, because the money is already in the bank. If universities had to worry about students defaulting, they would get rid of bullshit degrees that don't result in an actual job and the prices would come done…
The brighter side is when the shit hits the fan both the universities and bullshit degree holders will be the losers. Economy will recover in a few years and we will have a better economy.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#83It seems like the majority of the commenters here are missing the point. The increasing rate of student loan default is not a result of kids who go to a four year college, graduate with an unmarketable degree in philosophy, fall on hard times and then can’t pay their bills. It's kids who go to barber or cosmetology school, take on $30k of debt, then realize they don't make enough money cutting hair to support themselves, much less pay back a loan. There's a huge population of people like that.
Source: https://www.ed.gov/news/press-releases/us-department-educati...
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#84Earlier quoted context omitted.
Why? If I take out a loan in order to go on a cruise, the cruise company is not responsible if I default. In fact, with almost every purchase that involves a loan, the company offering the loan is different than the company offering the product / service. If responsibility fell on the university, then they could just refuse to accept people who take out loans. The result being that only rich people could go to colleg…
This is part of the issue. Loan providers pretty much have to give everyone loans. But the only way this can happen is by guaranteeing these loans, federally and legally. So our solution to a problem backfired and we found out that federally guaranteed loans aren't the solution to "college should be available to everyone." Maybe it is time to look for a different solution. And maybe time to clean up the mess that the…
Maybe partially state/federal funded education programs or free college education is the solution. We have that in Europe with some limits (only the first degree can be free) and it's working just fine. If you want private education and you can pay for it, that's fine.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#85Biggest problem it's almost impossible to discharge student loans in bankruptcy.
If you could discharge student loans via bankruptcy nobody would get a loan. No financial institution is going to hand out 5 figure loans to a teenager with no credit history, no job, and no marketable skills.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#86It seems like the majority of the commenters here are missing the point. The increasing rate of student loan default is not a result of kids who go to a four year college, graduate with an unmarketable degree in philosophy, fall on hard times and then can’t pay their bills. It's kids who go to barber or cosmetology school, take on $30k of debt, then realize they don't make enough money cutting hair to support themsel…
At which point do US student loans start to resemble indentured servitude?
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#87We need to get rid of student loans. The problem is that Universities don't ever need to worry about a student defaulting and can keep increasing the prices of tuition with impunity. If they default, they don't care, because the money is already in the bank. If universities had to worry about students defaulting, they would get rid of bullshit degrees that don't result in an actual job and the prices would come done…
Why? If I take out a loan in order to go on a cruise, the cruise company is not responsible if I default. In fact, with almost every purchase that involves a loan, the company offering the loan is different than the company offering the product / service. If responsibility fell on the university, then they could just refuse to accept people who take out loans. The result being that only rich people could go to colleg…
> Why?
Because education is not a luxury service that can be postponed or outright skipped, like lifestyle-tailored tourism, and education costs in the US have become a major societal and economical problem.
> In fact, with almost every purchase that involves a loan, the company offering the loan is different than the company offering the product / service.
That's a tautology, and entirely misses the point. The point is that student loans are a colossal problem for the US, not only economical but also societal, and the problem is caused by the disconnection between the vicious cycle that leads to hikes in cost and the consequences of complying with the requirements to have an education.
Complaining that universities should not feel any consequence for the need to take massive loans they force onto their student body is like complaining that petrochemical companies should not feel any consequence for the need to decontaminate the environment.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#88We need to get rid of student loans. The problem is that Universities don't ever need to worry about a student defaulting and can keep increasing the prices of tuition with impunity. If they default, they don't care, because the money is already in the bank. If universities had to worry about students defaulting, they would get rid of bullshit degrees that don't result in an actual job and the prices would come done…
Capping the amount colleges raise tuition by each year might help.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#89Most student loan is given to Women.
So only way to solve this issue today is to forgive it.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#90Biggest problem it's almost impossible to discharge student loans in bankruptcy.
If you could discharge student loans via bankruptcy nobody would get a loan. No financial institution is going to hand out 5 figure loans to a teenager with no credit history, no job, and no marketable skills.
And college might start costing something reasonable.