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Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

nytimes.com

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Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#101

Post by Jensson »

Teever wrote: post #92
binarynate wrote: post #69

Earlier quoted context omitted.

In my opinion, if you agree to a deal and then decide not to fulfill your end of the deal, that is immoral. Like if you agree to pay me to make you a sandwich and then you take the sandwich but leave without paying, that is immoral.

“To steal from a brother or sister is evil. To not steal from the institutions that are the pillars of the Pig Empire is equally immoral.” ― Abbie Hoffman

That is how bad countries are made. Good countries are made by people thinking that its also wrong to steal from the government.

For example you should never ever vote on politicians that waste tax money. Some countries do that, but USA is not one of them since Americans thinks its moral to steal from the government so they don't blink an eye over every president using millions on his own or his wifes personal projects. "I'd also do that if I was the president" is how that gets perpetuated, you have to stop voting for any such candidate and only vote for those that promises to put an end to it. That would mean voting third party, but...

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#102

Post by Jensson »

scarecrowbob wrote: post #91
ceejayoz wrote: post #79

Earlier quoted context omitted.

> What are the barriers? Lots of startup capital?

The inability to issue fiat currency based on a fraction of my actual holdings?

That is what taking a loan is, you are able to do it, its how you afford your homes etc. The bank is the essential guarantor in that transaction, without the bank the person you buy the home from doesn't trust you enough but the bank has that trust.

So essentially governments build trust with banks so those banks can issue fiat currency. Then those banks build trust with people like you so you can use the bank to issue fiat currency. Its the same system, bank pay interest to central bank for doing that and you pay interest to the bank.

If you mean why you can't get money from the central bank? Its just that you haven't built trust with them. But you can do so indirectly by taking a loan from your local bank, and that trusted middleman takes a fee for it.

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#103

Post by morgoo »

mysterydip wrote: post #97
retired wrote: post #87

Earlier quoted context omitted.

Wow. For The Netherlands it is 4% of your income, but only the part of your income above minimum wage. If you earn €40k, minimum wage is €26k then you pay 4% over €13k = €520 per year = €43 per month. The average medical student is around €50,000 to €60,000 in debt.

€50,000 / €43 / 12 is more than 96 years. Is anyone expected to pay their loans off, or in other words how much debt is forgiven each year?

I'd assume that medical graduates are earning a lot more than €40k

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#104

Post by Jensson »

JumpCrisscross wrote: post #95
phil21 wrote: post #86

Earlier quoted context omitted.

Finding investors willing to take less than 5% return (after paying for overhead and uncollectable loans being written off due to death/injury/ability to pay/etc) would probably be the primary one. You would likely be offering more or less the same or worse rate as I could get on a 10 or 30 year federal bond with more risk associated with it. I know I’d be completely uninterested in such an investment pitch. It would…

> Finding investors willing to take less than 5% return If it’s safe I can leverage it. > get on a 10 or 30 year federal bond with more risk associated with it 5% is 10 bps over the 20 year. Not a lot. But I picked a round number. Point is why couldn’t it be undercut? If it can’t, easily, it’s correctly priced.

> If it’s safe I can leverage it.

Loans to private persons are very unsafe, for example they can move abroad and just stop paying as the article is talking about. Every person doing that raises interest for everyone else.

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#105

Post by Jensson »

JohnTHaller wrote: post #59
retired wrote: post #15

People in The Netherlands have done this. They go to S/E Asian countries to skip out on a €30,000 debt. After a while your passport becomes invalid which makes travel very difficult. And with the outstanding debt you are not able to get a new passport. Which is dumb, because you only have to pay off the debt if you are able to, interest rate is very low, you can pause it for a few years and after 35 years the loan is…

In the US, student loan interest rates and average amount of debt are generally much higher than other countries. And you your student debt is designed to be permanent so that even declaring bankruptcy doesn't discharge it.

Its essentially just a tax you pay for using higher education. You pay that in other countries as well via your taxes. Your tax debt is also permanent so you can't get out of paying taxes just by declaring bankruptcy.

It is a bit weird that they let universities levy indirect taxes but its not really bad. Imagine if instead of property tax you have government property loans and the interest of those loans was instead of property tax, I think that wouldn't be a bad system.

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#106

Post by dttze »

Jensson wrote: post #100
hamdingers wrote: post #73

Earlier quoted context omitted.

In my opinion, if you make a $50,000+ bet on an 18 year old's future career, whether or not that bet works out for you is entirely your problem. Investments don't always work out, tough luck. That's obviously not the same as buying a sandwich.

Its not immoral to not be able to pay your debts, but its immoral to not pay them when you are able to.

[dead]

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#107

Post by Teever »

Jensson wrote: post #101
Teever wrote: post #92

Earlier quoted context omitted.

“To steal from a brother or sister is evil. To not steal from the institutions that are the pillars of the Pig Empire is equally immoral.” ― Abbie Hoffman

That is how bad countries are made. Good countries are made by people thinking that its also wrong to steal from the government. For example you should never ever vote on politicians that waste tax money. Some countries do that, but USA is not one of them since Americans thinks its moral to steal from the government so they don't blink an eye over every president using millions on his own or his wifes personal projec…

Disagree.

Bad countries are made when people let other people break the rules with impunity.

If the legal system fails to stop bad people from breaking rules it's up to us to stop them.

And we can't outright use force like the state can, so that means using subtle means of degrading their ability to break the rules.

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#108

Post by dyauspitr »

kadoban wrote: post #27
dyauspitr wrote: post #22

Earlier quoted context omitted.

When companies declare bankruptcy they have to liquidate their assets and pay back as much as they can. How is it different from student loans?

The difference is you _can't_ do that for student loans. There is no option to get rid of them via bankruptcy. So, this happens instead.

Yeah because then most students would graduate and declaring bankruptcy would be the first thing they do out of school. People have almost no assets at that point that they can lose, no real income. They would ride out the 7 years of bad credit while building out their early career and essentially would get a free education. The financial system wouldn’t be able to manage that at the pure scale of the number of people that use student loans.

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#109

Post by nickpinkston »

gunapologist99 wrote: post #42
nickpinkston wrote: post #12

Earlier quoted context omitted.

Exactly! I like the analogy of: When the bank is giving you a sub-prime loan, who is more sophisticated in that transaction? If the bank (with their fancy risk models, etc.), why shouldn't they be the party to take the bulk of that risk?

In the United States at least, a bank who is offering a subprime loan is taking the bulk of that risk. Student loans are guaranteed by the federal government. That is not the same thing at all.

During the 2008 Crisis, it was mortgage holders who got fucked and banks made whole, so risk asymmetries go far beyond just student loans.

Re: Student Debt Burdened Them, So They Moved Abroad and Stopped Paying

#110

Post by nickpinkston »

tpmoney wrote: post #26
nickpinkston wrote: post #11

Earlier quoted context omitted.

Totally agree - there's a lot of double standards here: Bankruptcy is good for entrepreneurial risk, but not for human thriving apparently...

Bankruptcy is great for human thriving, and the extensive US bankruptcy system is one of the best tools our legal system has for people who wind up in bad situations. It's a complete shame that we decided that student loan debt was ineligible for most forms of bankruptcy once it became clear that federal guaranteeing of loans would generate a lot of high risk loans. But fleeing to another country and/or simply refusi…

I see them as morally equivalent in our current system - ie an illegitimate democracy without recourse for common people.

If companies can do strategic bankruptcies, transfer pricing, etc., then regular people can do the consumer equivalents.

I don't think any of us should shill for corporate interests.

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