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U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

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Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#101

Post by TuringNYC »

75j wrote: post #40
paulddraper wrote: post #5

The Wall Street bailout was only...what, a trillion? If we bailed out real estate speculators, I wouldn't be surprised if something happened with college grads. Unfortunately. I hate assuming responsibly for monetary decisions other than mine, but judging the trend, that's where we're headed.

So, I am not at all an expert in finance, but there are claims (from Jill Stein for example) that the real cost of the bailout was much, much higher. Here's a Mother Jones article that takes this position: http://www.motherjones.com/politics/2009/12/behind-real-size... Can someone with more knowledge break down whether or not this is accurate?

@maxerickson has a valid response, but there is a larger story here. Consider hidden bailouts and also consider the unfairness of such hidden bailout. I would argue that the bailout was indeed much larger. For example, the Fed started buying distressed mortgage bonds via Quantitative Easing, QE2, and POMO. Should the Fed purchase an asset that is trading at 27 cents on the dollar for 60 cents? That seems unfair...it was a hidden bailout.

Imagine you buy a house for $500,000, the value goes down to $150,000. The government, instead of paying $155,000 pays you $450,000. That sounds like an "open market transaction" but it is a gift, a bailout just by another name. Unfortunately they didn't do that with homes, they did it with mortgage bonds and CDOs, which meant that most of the gifts went to a small sector of society in lower Manhattan and around Greenwich Connecticut.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#102

Post by rebootthesystem »

parennoob wrote: post #46
toomanybeersies wrote: post #6

Every time I read articles about student loans in the USA, the options are always presented as either the current state, or free tuition. Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand. It means that people who don't do tertiary education, or who do a trade, don't subsidise…

As a non-American living here, I think it boils down to social attitudes. Remember, this is a nation of "temporarily embarrassed millionaires". The general attitude in the US is more like "Everything is a choice" rather than "The Government should do things that are broadly good for everyone". So anything that gives relief to students as whole will be deeply unpopular, but universities charging exorbitant rates and e…

I'm sorry, you generalizations about the US are a grotesque misrepresentation of reality.

Just like anywhere in the world, there's a wide spectrum of hopes and wishes and dreams here and an equally wide spectrum of how to achieve them.

You are painting the US as a drone-like nonsensical mono-culture. This is very, very far from reality.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#103

Post by leakybit »

School-Cotton wrote: post #73
75j wrote: post #53

Earlier quoted context omitted.

> Apparently back in the old days you could work a part time job Even if that was true, it's not the old days anymore. The college I went to is now at 50,000$+ a year with compulsory room and board. Try paying that off with a part-time job and still competing well with your rich peers. No matter what, it's an enormous advantage to not have to work while in college. I know I wouldn't have done as well if I was working…

Tuition at the college I went to was about $8000 a year. I graduated in 2013. What did the extra several of tens of thousands buy you?

Where I live, State owned universities subsidize in-state students tuition so it ends up being $12,000 without room & board. If it's not State owned, it's usually in the 30,000's not including room & board.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#104

Post by 0xB31B1B »

munin wrote: post #70
charlieflowers wrote: post #65

This is so obviously a scam that I don't see how it can hold up. Tuition has gone to sky high levels, and who is getting that money? Not the professors, let's get real. They have probably gotten sweet raises, but nowhere near the growth rate of tuition. The armies of "administrators" are getting huge salaries, but the main point of the whole bubble is that it is a great way to proactively enslave a whole new generati…

equal parts administrator and the state, since as I understand it the tuition hikes track funding cuts at the government level for higher ed. that is the real killer. so, do the taxpayers see the money as reduced sales and property tax?

Wishful thinking. Unfortunately, cost savings like this at a state level rarely translate into reduced taxes or greater services, nowadays they get allocated into payouts for the states underfunded pensions.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#105

Post by winter_blue »

toomanybeersies wrote: post #6

Every time I read articles about student loans in the USA, the options are always presented as either the current state, or free tuition. Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand. It means that people who don't do tertiary education, or who do a trade, don't subsidise…

I think the problem is that there is no downward marker pressure on college costs (for some puzzling reason there).

It seems like American students are willing to pay higher and higher tuitions. This is the root of the problem.

If we had 0% interest loans, we might have students paying even more for college than now.

Why can't these kids just think about the debt they're getting into?

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#106

Post by cnnsucks »

munin wrote: post #70
charlieflowers wrote: post #65

This is so obviously a scam that I don't see how it can hold up. Tuition has gone to sky high levels, and who is getting that money? Not the professors, let's get real. They have probably gotten sweet raises, but nowhere near the growth rate of tuition. The armies of "administrators" are getting huge salaries, but the main point of the whole bubble is that it is a great way to proactively enslave a whole new generati…

equal parts administrator and the state, since as I understand it the tuition hikes track funding cuts at the government level for higher ed. that is the real killer. so, do the taxpayers see the money as reduced sales and property tax?

>> since as I understand it the tuition hikes track funding cuts at the government level for higher ed. that is the real killer.

No, that isn't the real killer. That's the educrat line you've been trained to regurgitate. The truth is that higher-ed is getting about the same percent GDP it's been getting since the 70's [1]. The "real killer" is the annual 3.5% above inflation tuition increases [2] that are inflicted to fund an ever growing amount of staff and their gold plated benefits.

>> do the taxpayers see the money as reduced sales and property tax?

Are you kidding? Where is the place where taxpayers are liv'n la Vida Loca in their property tax free la-la land? We're paying out the ass. Some RINO manages to cut a half a percent or maybe just not increase taxes as fast and they shout it from the roof tops; HUGE TAX CUT. OMGWTFBBQ I SAVED YOU 1.003% VOTE FOR MEEE!

Please kid; stop drinking the educrat kool-aid. The only redeeming feature of this crazy ass education bubble is that it isn't growing as fast as the crazy ass health care bubble.

[1] http://www.usgovernmentspending.com/education_spending [2] https://trends.collegeboard.org/college-pricing/figures-tabl...

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#107

Post by rayiner »

winter_blue wrote: post #105
toomanybeersies wrote: post #6

Every time I read articles about student loans in the USA, the options are always presented as either the current state, or free tuition. Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand. It means that people who don't do tertiary education, or who do a trade, don't subsidise…

I think the problem is that there is no downward marker pressure on college costs (for some puzzling reason there). It seems like American students are willing to pay higher and higher tuitions. This is the root of the problem. If we had 0% interest loans, we might have students paying even more for college than now. Why can't these kids just think about the debt they're getting into?

Kids can't think rationally about debt because their parents and teachers have overinflated the importance of everyone going to college and have actively discouraged critical thinking on these issues.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#108

Post by skuhn »

caseysoftware wrote: post #87
jerf wrote: post #68

Earlier quoted context omitted.

We could also make college a lot cheaper. Maybe split things back out into "college" and "university" more clearly, and let more people do something other than ship out to a four (or more) year boarding school to have someone more or less through classes that are more or less someone holding your hand through reading a text book that you may neither want nor need to read. (Yes, the exceptions immediately leap to your…

I have a 7 week old and a 22 month old and am convinced that - outside of certain fields - college will be entirely optional to them. Even now, there are many things that can/should be learned through apprenticeship or online or via other means and that is only going to increase in the next 15+ years. Please note: I said "college" not education. I believe education will always be vital, no matter what. A piece of pap…

Education (or teaching people how to think) will always be important.

Curriculums which attempt to teach and certify specific things will always be of varying degrees of usefulness, but in order for them to become optional their importance to your career will need to be greatly reduced.

That means that entire industries need to learn how to hire people based on what they know and what they can do rather than what someone says they can do.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#109

Post by rayiner »

Daishiman wrote: post #90
nickjarboe wrote: post #80

Earlier quoted context omitted.

The US has a very complicated system of multiple, income-based, student loan repayment schemes[1]. 20 to 25 years of repayment based on many factors. It is so complicated the government has created a "Repayment Estimator"[2] to help people choose the best plan. At a glance it looks similar to the New Zealand 8%. Seems like most systems evolve to where they are impossible for a human understand. See tax code, social s…

> Seems like most systems evolve to where they are impossible for a human understand. See tax code, social security, Obamacare, etc. That's because the US is characterized by a Republican party with wholly obstructionist goals which make the worst possible consessions for those who do wish for an effective social safety net to be in place, effectively being able to say "I told you so" when the watered-down systems in…

The German system would never mix with American optimism. Germany has a fewer percentage of its students going to university. Kids are aggressively tracked from an early age into seperate tracks, most of which don't lead to college. And German universities aren't luxurious four year vacations like American universities are.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#110

Post by learc83 »

javagram wrote: post #54
wernercd wrote: post #37

Earlier quoted context omitted.

> Why we treat student loan debt debt as being different Where is the collateral? You buy a house, don't pay... you lose the house. You buy an education, don't pay... you... lose the education? No bank is going to give money for degrees without a realistic change of getting paid back. They have no fear of getting paid back because you CANT remove the debt via bankruptcy. I think there needs to be a different approach…

Give some sort of limit - 10/20/30 years? - and some sort of max% of income - 10%?. If the loan isn't paid off by the end of the limit at a max % of income, then the loan can then be discharged by bankruptcy. This already exists in the USA. It's called Income Based Repayment and the outstanding balance of loans and interest is forgiven after 30 years of making payments capped to a certain percentage of income. There…

Under the new plan (retroactively available to old borrowers), it's only 20 years not 30.

And Even if they don't fix the tax penalty, there's an insolvency exception. You're only taxed on the amount forgiven above insolvency.

If you manage to go 20 years without paying it's likely you have far more liabilities than assets so you probably won't pay any tax penalty.

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