31–40 of 68 posts
It really irritates me when someone says they have to get $200,000 in loans for a worthless degree from a 'big' school. Both the people who advised them that this was a good plan in the first place, and the people who loaned them the money.
Stupid question, if everyone does this do we expect that these loans will still be available? Maybe it was the "best Decision of (YOUR) Life" but every time this happens it hurts these programs even more. Congratulations on a perfectly self-centered Millennial decision that was the best decision of your life that most likely made these programs one step closer to being discontinued. I guess I'm old fashioned, I've ne…
The student loan system in the United States has all kinds of negative effects, including being partly responsible for two decades of out of control cost growth in higher education. If a high default rates pushes the government to go back to the drawing board, that's a good thing.
Stories like this make me very glad of the system we have in Australia. You can choose to have your Univertity fees just automatically paid by an interest free loan from the government (it's like a five minute online form to sign up for), and then you just pay back 4% of the loan on each tax return if your salary is over $51,000 (you can choose to make voluntary payments over the compulsory rate, or if you make less…
There's a plan here in Oregon to try and work up a viable system to do this. The idea is called "Pay it Forward" and you would essentially pay a 3% tax for 20 years after you graduate. I'm not entirely sure it will ever come to pass, but it's not a terrible idea IMO. It may not save money, but it does mean you get an automatic income based repayment plan, you can never be in default and you get an automatic deferral…
... however it's actually even worse than this meager sum:
- Salary increases over your lifetime, and the highest earning decades are 40s and 50s, so I the average salary over the first two decades is probably lower than $48k. Maybe this is mitigated by restricting to only people who at least attempt college?
- Oregon has a slightly lower-than-average income.
- People are more likely to sign up for this program the less they think they'll earn.
- Once someone has graduated, they are not incentivized quite as strongly to pursue high salary positions.
- Some loss due to deaths, defaults, emigration, black market off-the-books income, etc.
- Depending on how it's set up, this may cut into the tax revenue to the state.
- It doesn't take into account inflation or the time value of money.
I understand the point of the program is a social benefit to the state, but I think it's useful to examine the reasonableness of the proposition in a market context. If someone offered you a bond to take the other side of this deal, how much would you pay for 3% of the first 2 decades of income of a hypothetical freshman entering college this year? What about a 1/1000 share of a portfolio of a thousand freshman?
Earlier quoted context omitted.
7 years when you're ~22, who cares? The point, which was a bit buried, was that by defaulting and having her wages garnished, resulted in much better progress in paying the debt off ... because there is no interest, and probably because of inflation as well. I'm not sure that's accurate, but it's what the piece implies.
Yeah, I grokked the point, and I strongly disagree with the conclusion. For anyone with a graduate degree that's competent in their field the chances of going 4+years jobless is pretty low. And I would assert that if you get a (well-paying)job earlier than 4 years out of college its worth it to not default on your loans. Why? By the end of the second year of a salaried job I would be highly surprised if that shitty c…
> Why? By the end of the second year of a salaried job I would be highly surprised if that shitty credit score hasn't fucked up your life in at least one major way.
She was having trouble getting a job as a waitress, I think she did not see the scenario of the salaried job you speak of as being relevant to her.
> People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist.
I know it's not popular these days, but one can actually limit oneself to things you can afford. If you do that, you don't need a loan, and hence, bad credit is irrelevant. And if you have a habit of buying things you can't afford, bad credit is in your future...
Earlier quoted context omitted.
7 years when you're ~22, who cares? The point, which was a bit buried, was that by defaulting and having her wages garnished, resulted in much better progress in paying the debt off ... because there is no interest, and probably because of inflation as well. I'm not sure that's accurate, but it's what the piece implies.
Yeah, I grokked the point, and I strongly disagree with the conclusion. For anyone with a graduate degree that's competent in their field the chances of going 4+years jobless is pretty low. And I would assert that if you get a (well-paying)job earlier than 4 years out of college its worth it to not default on your loans. Why? By the end of the second year of a salaried job I would be highly surprised if that shitty c…
Cell phone plane? Yeah, you're on pre-paid. Have fun paying double (although this has been getting better!).
Electric/gas/internet hookup? Well, in most (all?) places in the US, the gas/electric/phone company are required to serve you but probably will require a deposit of a few hundred bucks each. Cable might be a crapshoot - probably the same deposit deal though.
The real issues are finding a place to rent and getting a decent job. Almost all decent jobs require credit checks now, and that's a travesty.
So yeah, if you have money it's not too bad. I lived with horrible credit (defaulted on some small credit cards and a lease after I lost a job) for quite some time, but I also happened to be in a career that after a couple tough years I was making enough that the lack of credit wasn't really something that I worried about.
Now I have good credit, and really the only major difference so far is I qualify for credit cards with perks. I have yet to buy a house, and I buy my cars cash.
Stupid question, if everyone does this do we expect that these loans will still be available? Maybe it was the "best Decision of (YOUR) Life" but every time this happens it hurts these programs even more. Congratulations on a perfectly self-centered Millennial decision that was the best decision of your life that most likely made these programs one step closer to being discontinued. I guess I'm old fashioned, I've ne…
Earlier quoted context omitted.
"Deadbeat" American student loan debtor here. During the economic meltdown, I defaulted on my private student loans in 2009. The defaulted loans were picked up by two different debt collectors. One of them, Sunrise Credit Services, is charging me interest as I pay down the loans. The other debt collector, Williams and Fudge, charges me no interest.
I guess with the no interest company that they make enough given the discount they purchase them for and the no additional interest helps get more of them paid back.
These collection agencies purchased the loan for a fraction of their value (if paid according to the terms).
I'm guessing each collection agency has their own strategy for collecting on the loans. One of them says "we'll end up with more in the end if we don't charge interest" and the other said "we're owed interest, let's collect it".
I would imagine the first strategy (no interest) has the benefit that the person making payments can actually watch the debt decrease over time. It might make them more interested in actually paying the whole thing back.
If a collection agency says "you owe us $100K and next year it'll be $110K" you might just not bother paying anything since you'll never be able to get ahead of the interest.
I agree completely with her grandmother: > Grandmother: “Why did you borrow money you could not repay?” > Her: “I thought I could repay it until the bailouts happened.” > Grandmother: “That is no excuse. You need to repay them.” For some reason, a lot of people my age lack any sense of personal responsibility. It's not the author's fault she couldn't repay her loans. It's everyone else's. Lately I hear more and more…
But on the other hand college costs are becoming more and more unsustainable even as college is becoming more and more a requirement for well paying jobs. It's easier for her grandmother to say that one shouldn't borrow money that can't be paid back with utter certainty, she lived in a different era in every way. An era where it was not only possible but easy to find well paying work if one was reasonably smart, capable of being educated on the job, and a hard worker. Even two decades ago it was reasonable for a middle class family to pay college tuition for their children out of pocket without going into debt.
Earlier quoted context omitted.
The student loan system in the United States has all kinds of negative effects, including being partly responsible for two decades of out of control cost growth in higher education. If a high default rates pushes the government to go back to the drawing board, that's a good thing.
Don't vote by defaulting, vote by voting. To default on a loan after you signed it because you have some sort of agenda is not voting, it's just defaulting on a commitment.
In any event, I don't share your simplistic views about the morality of doing so. Anglo-American law actually favors breaching contracts when it is efficient to do so. Also these particular contracts are made in a predatory fashion, they are contracts of adhesion between the most powerful entity on the planet (the US government) and naive 18 year olds.
Try to worry a little less about your sacred honor and a little more about your fellow human beings. That's what's morality should be about.
Earlier quoted context omitted.
You missed her point completely. She IS paying the debt. By defaulting she is stopping the interest from accruing, but she still pays the principal.
But having interest accrue was part of the original agreement she made. The fact that she has exploited a loophole in the system to avoid paying that interest does not make it right. If nobody paid interest on loans, there would be no loans, and she would not have been able to get one to pay for her education.
I'm not entirely convinced on the ethics, but there is something to the argument.