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

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

#71

Post by smtddr »

vinceguidry wrote: post #63
smtddr wrote: post #56

Earlier quoted context omitted.

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…

What about the people who were just scammed a little? The people who just don't want to have to look hard to find a job after they graduate and so just want to call their degree worthless and get their loan canceled? Because as soon as you draw the line, people are going to challenge where it lies. It's really dangerous to allow someone to externalize all of the consequences of a particular bad decision. Altruism's g…

I'm very confident that the laziness-factor accounts for less than 25% of the people out there when it comes to student-debt. Afterall, they had the discipline to go to school and get that degree. But like I said, this debate shouldn't even be happening. College & University should just be free to everyone. No line needs to be drawn in that situation.

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

#72

Post by freehunter »

kcole16 wrote: post #13
eat wrote: post #3

I always hear people say things like "we don't have debtors prisons in the U.S.". If enough people start doing this, I have a very strong feeling that that will change. As student loans become more of a crisis, we're sure to see more people simply deciding not to pay. What recourse to lenders have if this happens on a large scale?

We don't have debtors prison because it doesn't make any sense as a means of recourse. If debtors stop paying, lendors will stop lending.

Exactly. If you're free, they can garnish your wages, no matter how small. If you're in prison, you can't make any money. Creditors would rather have even a 1% return than nothing at all, so why would they put you in prison?

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

#73

Post by nedwin »

cpursley wrote: post #53
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.

You spend the highest percentage of your budget on the military. That's where it goes.

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

#74

Post by 33W »

jgrowl wrote: post #60
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 rea…

Isn't there a conflict between points 1 and 5? Claiming to be an independent student while living at home?

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

#75

Post by ChainsawSurgery »

iopq wrote: post #66
ChainsawSurgery wrote: post #46

Earlier quoted context omitted.

> Current students paying money to the college is stimulating the economy Ehh, it's stimulating the higher education economy. And even that's debatable depending on how that influx of money gets spent: Paying 100 extra student workers $10/hr isn't really stimulating the economy since most of that money's going right back to the college. Plus, it's not smart to put all of your stimulus eggs in one market basket, ya kn…

The salaries of professors, lecturers, college employees, construction workers, etc. go to rents, food, other necessities. That money doesn't go back to the college, but rather to the general area these people live in and spend their money in.

> The salaries of professors, lecturers

Most professors don't earn that much money[1], unfortunately.

> college employees, construction workers,

Why do you think it's going to them? For reference, the average salary of a construction worker hasn't changed that much in the past decade [2].

I posit that the majority of that money is going to higher education administrative costs, and so the "stimulus" is occurring entirely in higher education. Stimulus entirely in one class and market of employment worries me for the inevitable market correction (for what seems like an unsustainable path, i.e. the current state of higher education costs). It also comes at the expense of a diverse service economy: It would be extremely shortsighted to support living in a world where higher ed and student loan companies are the thriving sources of the economy.

[EDIT] I removed an argument about "trickle-down" because it felt forced.

1: http://www.salon.com/2014/09/21/professors_on_food_stamps_th... 2: http://money.usnews.com/careers/best-jobs/construction-worke...

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

#76

Post by yodsanklai »

cpursley wrote: post #53
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.

Good question. My random guess would be that it goes into wars. Defense represents about 17% of the federal tax money. I don't know how it compares with other countries though, and whether or not it's a money leak or profitable in the long run.

http://en.wikipedia.org/wiki/Military_budget_of_the_United_S...

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

#77

Post by jeffdavis »

crazy1van wrote: post #57
jessaustin wrote: post #34

Earlier quoted context omitted.

...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.

If something is "real", you can't have less than zero.

(For some definitions of " real".)

Right now, the consequences of forgiving a billion dollars of student debt are immeasurable. It's a small amount to spread over so many people, and ultra easy/cheap borrowing by the federal government can delay the consequences for a long time.

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

#78

Post by vinceguidry »

smtddr wrote: post #71
vinceguidry wrote: post #63

Earlier quoted context omitted.

What about the people who were just scammed a little? The people who just don't want to have to look hard to find a job after they graduate and so just want to call their degree worthless and get their loan canceled? Because as soon as you draw the line, people are going to challenge where it lies. It's really dangerous to allow someone to externalize all of the consequences of a particular bad decision. Altruism's g…

I'm very confident that the laziness-factor accounts for less than 25% of the people out there when it comes to student-debt. Afterall, they had the discipline to go to school and get that degree. But like I said, this debate shouldn't even be happening. College & University should just be free to everyone. No line needs to be drawn in that situation.

Confident, eh? You're going to still be that confident once it becomes known that all you have to do to get the government to give you $X0,000 is to say your education was worthless?

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

#79

Post by whafro »

cafard wrote: post #64
whafro wrote: post #23

Earlier quoted context omitted.

Yeah, there's no risk of someone repossessing the education you received, like there is of the house you've defaulted on. And a reduction in the value of a bachelor's degree doesn't affect your family's net worth like that same reduction in the value of your home. Mass defaults (which you could argue we're already seeing at ~20%) would be terrible for lenders (private and public), and probably the schools involved, s…

If your bachelor's degree is from a for-profit college that has just gone out of business, what is its value?

Probably not far off from its value if it hadn't gone out of business.

For-profit colleges aren't typically known for their deep alumni networks or stellar name recognition, so either way, the degree is basically valued by the education you managed to obtain while you were there.

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

#80

Post by existencebox »

ChainsawSurgery wrote: post #55
ssharp wrote: post #48

Earlier quoted context omitted.

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 fo…

An honest question about that; since I've heard the "we need people to spend money" a lot, and for the most part think I understand and agree.

However, even if someone saves, (especially if they save via wealth growers like investments to counter inflation) that money doesn't just go into the ground with them when they die. I'd assume the majority of it does go to pay out goods and services in the future, probably nearer to the end of life. As such I'd assume that rather than having everyone buying all the things all the time, you could provide an equivalent effect to the market with only those in the end of life spending at a much higher rate than they would have if they stayed uniform across their lives.

Is there any reason this wouldn't be sufficient to provide the same effect, as well as providing individual benefit? (In blunter words, someone tear a hole in my argument please :) )

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