Students refuse to pay back loans to failed for-profit college • Hacker News Board

Re: Students refuse to pay back loans to failed for-profit college

#51

Post by vinceguidry » Tue, Feb 24, 2015, 4:03 PM UTC

Zigurd wrote: post #28

vinceguidry wrote: post #7

It's a bit disingenuous to claim that you shouldn't pay back any of the debt incurred in earning your degree because the educational program was worthless when you're still seeking a career in the field requiring that degree. I agree she shouldn't have to pay all of the debt, but surely the degree isn't totally worthless.

> "...because the educational program was worthless when you're still seeking a career in the field requiring that degree" That doesn't follow at all. The program could have been deficient. The placement program could have been fraudulent. And yet the student could make up the deficiency with other training and compete, as hopeless as that might be, against others in the same boat. It isn't unusual for schools to def…

So what is the solution here? Make taxpayers foot the bill for the social costs incurred by awful colleges? Once you make that decision, then the line drawn in the sand about what an 'awful college' is and which costs the colleges and students alike can expect taxpayers to be liable for is going to shift over time. You're trading one enormous problem for another one.

She should have known that for-profit colleges are bullshit before signing her life away to one. Now she wants to have her cake and eat it too by refusing to pay her loans, while still deriving benefit from the supposedly worthless degree she got.

We need a better solution to higher education. But this isn't it. I'm glad she's raising awareness of this issue, but she and everyone else involved needs to pay back at least some of her loan. You can't just expect the government to absolve you of your bad decisions.

Re: Students refuse to pay back loans to failed for-profit college

#52

Post by maratd » Tue, Feb 24, 2015, 4:03 PM UTC

littletimmy wrote: post #40

Good. This bubble has to burst. The college education system in this country has gone completely insane. The cost of a year's worth of education is now $60000, when the cost for comparable universities in the UK is $10000 and in Germany is $0. Just make community college + state universities free for everyone to attend, and we should have no more problem with this debt nonsense anymore.

> Just make community college + state universities free for everyone to attend, and we should have no more problem with this debt nonsense anymore.

Public colleges are already substantially less than private institutions. I doubt subsidizing them further will have a substantial impact on private tuition.

If we stop lending money to pay for education, the colleges will see substantially reduced demand at their inflated price levels and will quickly cut prices to adjust.

Then again, they might not.

They currently segregate their customers into groups by way of "scholarships" and essentially extract the maximum amount of money they can possibly get. I can't think of another industry where such disgusting behavior is tolerated or even celebrated as generosity.

Re: Students refuse to pay back loans to failed for-profit college

#53

Post by cpursley » Tue, Feb 24, 2015, 4:03 PM UTC

sheepdestroyer wrote: post #21

A lot of countries have a free post secondary education system : https://en.wikipedia.org/wiki/Free_education#Partial_list_of... It always astonish me to think it can be seen as normal, even more equitable, to require people to get so huge debts before even being trained to work.

Agreed, where does our tax money go? It seems that other nations despite their level or method of taxation are able to provide for free to subsidized secondary education to their citizens.

Re: Students refuse to pay back loans to failed for-profit college

#54

Post by rcarrigan87 » Tue, Feb 24, 2015, 4:05 PM UTC

Mark Cuban wrote a great post about when colleges start going out of business.

As a college grad with a lot of debt I advise everyone to avoid student loans at all costs. It's not worth it and there are always alternatives.

http://blogmaverick.com/2013/01/26/will-your-college-go-out-...

Re: Students refuse to pay back loans to failed for-profit college

#55

Post by ChainsawSurgery » Tue, Feb 24, 2015, 4:07 PM UTC

ssharp wrote: post #48

ChainsawSurgery wrote: post #26

Earlier quoted context omitted.

> doesn't threaten the rest of the economy in the same way that housing loans did I dunno about that - it's probably just a lot more insidious and less panic-y. Adults repaying student loans aren't spending that money on other things. If you're paying $300 a month to Sallie Mae, that's $300 you're not spending on: 1) Savings/retirement/etc 2) Goods and services 3) Capital investment 4) Etc. Given the compounding natu…

We financed almost all of my wife's law school and decided once she graduated and had a job, that we'd pay off her loans as quickly as possible. We're almost done, but it's been two long years of getting by on one paycheck. That, along with having twins, means that we're not spending money like we did in our DINK days. However, the extra financial discipline has been very beneficial. We've learned to coupon a lot of…

That's awesome! Congratulations. Financial discipline is definitely a nice side effect of this mess - sink or swim, as it were.

That being said, frugality is also not necessarily great for the economy =). It's obviously a fantastic idea for individuals, and you're much better off the way you are - on the whole though, we want people to be spending money on goods and services.

Sorta like how college is a great idea for the individual, but if everyone goes to college then value of those degrees goes down as a whole.

Re: Students refuse to pay back loans to failed for-profit college

#56

Post by smtddr » Tue, Feb 24, 2015, 4:08 PM UTC

vinceguidry wrote: post #35

whafro wrote: post #17

Earlier quoted context omitted.

Only if the degree is the sole factor in getting the career she desired. If that's the case, I can send you a degree from WhafroU via PDF for a tidy sum within an hour. Get in touch, folks!

You absolutely should start selling paper degrees if your 'students' can actually get jobs with them, as the person in the article was able to. I don't think people really understand what they're saying when they say that people shouldn't have to pay back these loans. The loans are going to get repayed, it's just a question of who. You can't take it out of the defunct college, those people, and that money, are gone.…

If paying money out of my own pocket means I've helped people who were _scammed_ into crushing debt while holding a near worthless degree that they've spent prime years of their life working for; time that they cannot get back.... then yes, I don't mind paying for that. I wish more people cared about society as a whole instead of jumping straight to the argument "If they don't pay, then the taxpayers will and that's you!!!" that supposedly shuts down all discussion.

And anyways, we shouldn't even be debating this. University should be free, period. And yes, I know "free" = "we" = "our pockets". That's perfectly fine. Or we should start funding plane tickets and visas to send low income people to these countries[1] for study; requiring them to maintain a quality GPA or something. The world would be a better place for all of us if the "haves" weren't so adverse to paying for the "have-nots".

1. http://www.washingtonpost.com/blogs/worldviews/wp/2014/10/29...

Re: Students refuse to pay back loans to failed for-profit college

#57

Post by crazy1van » Tue, Feb 24, 2015, 4:09 PM UTC

jessaustin wrote: post #34

jobu wrote: post #25

It's odd that they don't mention the reason Corinthian is shutting down so many colleges - http://www.npr.org/blogs/ed/2014/07/08/329550897/the-collaps... A relative of mine works there and said they were about to be sued by the Department of Education over fraud in their student loan department. The settlement forced the company to sell or close all of it's colleges and no senior management or administrative staff i…

...pretty unlikely... Eh, it's not "real" money. Students will have debts forgiven when it's politically expedient to do so.

> Eh, it's not "real" money

Why not? It was real to the tax payers who paid it to the government and real to the Corinthian employees who were paid by the school and it will be real to the students as they struggle to pay it back over many years.

Re: Students refuse to pay back loans to failed for-profit college

#58

Post by ChainsawSurgery » Tue, Feb 24, 2015, 4:10 PM UTC

AndrewKemendo wrote: post #50

ChainsawSurgery wrote: post #26

Earlier quoted context omitted.

> doesn't threaten the rest of the economy in the same way that housing loans did I dunno about that - it's probably just a lot more insidious and less panic-y. Adults repaying student loans aren't spending that money on other things. If you're paying $300 a month to Sallie Mae, that's $300 you're not spending on: 1) Savings/retirement/etc 2) Goods and services 3) Capital investment 4) Etc. Given the compounding natu…

My question was, what is the macro impact of them defaulting on student loans. Seems like based on your point, everyone would be better off because PPP would go up slightly. I'm not sure I agree, but only because I am not sure of the impact massive student loan default would have on capital markets for debt holders. Basically would mean that Sallie Mae could tank significantly.

> My question was, what is the macro impact of them defaulting on student loans.

My mistake, I thought your question was more about the impact of student loan debt as a whole on the economy going forward.

My point was that there's probably no bubble (unless at some future point the govt decides student loan debt is dischargeable in bankruptcy), but that doesn't mean it won't be detrimental nonetheless.

> Seems like based on your point, everyone would be better off because PPP would go up slightly.

How do you figure? I haven't seen the data myself but it would be shocking if total accrued student loan debt (adjusting for inflation of course) doesn't skew heavily towards the 18-30 age range.

That leaves the older generation with significantly more purchasing power, and if the younger generations avoid student loan debt it benefits them as well.

> Basically would mean that Sallie Mae could tank significantly.

I think that's a very real scenario that will play out in another decade or two. I very much doubt today's toddlers will accrue as much student loan debt as millenials have.

Re: Students refuse to pay back loans to failed for-profit college

#59

Post by GabrielF00 » Tue, Feb 24, 2015, 4:11 PM UTC

cjslep wrote: post #30

ChainsawSurgery wrote: post #26

Earlier quoted context omitted.

> doesn't threaten the rest of the economy in the same way that housing loans did I dunno about that - it's probably just a lot more insidious and less panic-y. Adults repaying student loans aren't spending that money on other things. If you're paying $300 a month to Sallie Mae, that's $300 you're not spending on: 1) Savings/retirement/etc 2) Goods and services 3) Capital investment 4) Etc. Given the compounding natu…

$300 a month seems low. I went to North Carolina State University, generally regarded as a cheaper school (compared to neighboring UNC Chapel Hill or Duke) for a solid quality engineering education as an in-state student. I graduated after four years in 2013 and my monthly payment to Navient (formerly Sallie Mae) is easily triple that.

Average student loan debt is about $30,000. A 10-year loan at 5% interest works out to about $318 or $345 at 6.8%.

The 5% choice is a bit debatable. I figured most people have some combination of loans at 6.8%, 5% and 3.4%.

Of course there's so much variation between schools that the average might not be too useful, but it seems like $300-$350 is a pretty reasonable figure.

Re: Students refuse to pay back loans to failed for-profit college

#60

Post by jgrowl » Tue, Feb 24, 2015, 4:11 PM UTC

sheepdestroyer wrote: post #21

A lot of countries have a free post secondary education system : https://en.wikipedia.org/wiki/Free_education#Partial_list_of... It always astonish me to think it can be seen as normal, even more equitable, to require people to get so huge debts before even being trained to work.

I live in the US and was able to go to college almost for free. There were a few caveats though:

1. I waited until I was 24. This meant that my parents income did not affect my federal assistance so that I could get the maximum amount.

2. I went to a dirt cheap community college my first two years. It was so cheap that the federal grants covered my tuition, books, plus a little extra for living expenses.

3. I did really well at community college and was able to get a few scholarships at a bigger university.

4. In my state there is a block transfer program so that all of my credits at community college counted at the larger university.

5. I was able to live at home for the entire duration so I did not have to pay a huge sum for campus housing.

I was able to get a computer science degree from a state university with somewhere around $1000 in debt which I paid off entirely with my first paycheck.

I was only in $1000 in debt because I foolishly bought a $2400 gaming laptop.