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White House rolls back protections for people in default on student loans

washingtonpost.com

131–140 of 164 posts

Re: White House rolls back protections for people in default on student loans

#131
post #110

Earlier quoted context omitted.

> Why would you expect your university to provide dorms for you Traditionally, you go to school hundreds or thousands of miles away from your family. You need someplace to stay, no? Growing up in a city and you will have much more options to "live at home" > That's what universal health care is for The US does not have universal health care. So not sure what you are saying, how could a university not charge for somet…

>Traditionally, you go to school hundreds or thousands of miles away from your family. You need someplace to stay, no? I still don't see why it's the university that has to provide this. >The US does not have universal health care. Well, there's your problem

The university gives students access to cheaper housing than they could find on their own. Not sure how that is any different from say, providing electricity for the classrooms. You need both electricity and a place to sleep to attend school no?

> Well, there's your problem

Sure, but that isn't going to change anytime soon. Just giving up on any problem because "whelp, no universal healthcare" is not a productive way to live life.

Re: White House rolls back protections for people in default on student loans

#132
Good. I paid the $120K for my education and co-signed a loan for a friend (big mistake) for $10k for her education that I ended up paying off because she was a dead beat.

There has been a huge disturbing trend in the US in the last 30 years or so: you're not responsible for your actions; it's always some one else's fault.

You choose to go to a high priced school and study something that offers no marketable skills or is hyper competitive and only a few positions exist, why should I, as a taxpayer, fund that? - that is your choice.

I wanted to study physics, because I love the subject, but when I entered college, I evaluated that my job prospects were low, especially with merely an undergrad degree. Instead, I studying electrical & computer engineering, and I paid off my student loan debt 4 or 5 years after leaving college.

Re: White House rolls back protections for people in default on student loans

#133

Sometimes I do wonder why American Universities charge exorbitant tuition fee? Education being the bedrock of an advanced society, isn't but natural the developed economies like US should be able to subsidize education to such an extant that youth of country don't have to worry about paying their tuition fee and focus more on learning and innovation that will take everyone forward. It is but a reflection on the sad s…

There are three gigantic sources of waste in the US: healthcare, military spending and education. All of them are 1) run by large organizations with growing bureaucracies, 2) considered so important that any expense is justified, 3) heavily subsidized or financed with loans or insurance, so growing costs are always met 4) in a position where the bureaucracy decides how much should be spent, not the end consumer. In o…

Although I can appreciate the comparison in terms of amount of money in each, I don't know there is tremendous waste in all three, or that the source of expense is the same in all three.

What they do have in common is being seen as indispensible or essential services. I agree they also all have tremendous bureaucracies.

For example, I think one primary source of costs in healthcare (strangely almost completely unaddressed in the current healthcare law debates) is lack of competition. Licensing laws and government regulation over procedures and whatnot stifles effective choices in healthcare.

There are many other problems too, like lack of transparency over pricing, and an inversion of the normal economic decision-making process (for example, instead of the buyer having fixed costs and benefits to choose between, they are often at best only given the option of accepting or refusing the service).

Education is a bit different, IMHO. There, you have businesses using degrees as checklist criteria and pushing off real training onto schools; schools have become administratively topheavy. Rather than being faculty-driven, they're increasingly administratively-driven (it's not uncommon to have several deans of a given college, for example). States, which have historically funded universities in the public interest, are cutting that funding and pushing costs onto students.

I guess my point is that I don't really see the solutions being the same, nor do I see simply cutting funding and "starving the beast" as the right solution. Education is already underfunded, and what tends to happen is that administrators cut other positions over their own, or over relinquishing decision-making authority to democratic processes.

Too much discussion has focused on who pays for healthcare, and in what way, or how much. It's important but not really helpful in the long-term, because the real problems are in transparency and overregulation. It's ridiculous, for example, to assume that citizens can take responsibility for their own healthcare if the government explicitly prevents people doing just that: by preventing them from making their own healthcare decisions, preventing competition, and raising regulatory hurdles to new services (e.g., in the form of drug regulation, overly strict laws about who can provide what service, and what hospitals and manufacturers must do). So we end up with a system where you can't refill a harmless medication you've used for years without getting approval of an overpaid provider, but can get a harmful opiate from that same provider when another service (from a different type of provider) would be more helpful.

The amount of money being spent in these areas is not really the problem; it's a symptom. Just cutting spending on them will not really address the problems, and may make them worse.

Re: White House rolls back protections for people in default on student loans

#134
post #113
post #38

Earlier quoted context omitted.

Removing loan guarantees, and forcing students to scrutinize the value of the degree they are pursuing will improve the problem of students blindly doing what they've been told to do. If they don't suffer the consequences of buying a useless degree, why wouldn't they keep doing it? Any possible improvement of the status quo is going to involve pain. Certainly universities themselves could start feeling some of it, as…

If they don't suffer the consequences of buying a useless degree, why wouldn't they keep doing it? Why shouldn't the lender also assume part of this risk? Why is their recoupment guaranteed (student loans can't be dissolved in bankruptcy)? Why are they always likely to be bailed out (prove me wrong by showing a student loan lender that went into bankruptcy)? Lenders need to do more due diligence and stop lending to s…

The lender actually assumes most of the risk. In the case of a default, there's not generally much or any assets for them to go after to liquidate.

Re: White House rolls back protections for people in default on student loans

#135
post #38

Earlier quoted context omitted.

Removing loan guarantees, and forcing students to scrutinize the value of the degree they are pursuing will improve the problem of students blindly doing what they've been told to do. If they don't suffer the consequences of buying a useless degree, why wouldn't they keep doing it? Any possible improvement of the status quo is going to involve pain. Certainly universities themselves could start feeling some of it, as…

Why should lenders not be punished for financing the useless degree? After all the availability of easy financing drives up the price of the useless education. Remember, the "moral hazard" spoken of in financial bailouts is that the lenders aren't being punished for taking bad risks.

Much like the housing collapse, banks have been mandated to finance to people that can't afford it for student loans. The blame doesn't solely lay with the banks. The government is at least equally to blame.

Re: White House rolls back protections for people in default on student loans

#137
post #126

Earlier quoted context omitted.

They are dischargeable in bankruptcy, but the requirements for discharging them are more difficult to meet than those for other unsecured debt.

No, they're functionally impossible to discharge in bankruptcy.

http://abovethelaw.com/2016/01/the-tetzlaff-aftermath-discha...

Re: White House rolls back protections for people in default on student loans

#138
post #10

I'm surprised by the comments here. I am a fiscal conservative, but having taken and struggled to pay for student loans, and having hired people in the same situation, find that the lending programs are predatory by nature in that they know students will be unable to service the high monthly payments, and eventually default as a result. Do I think people should pay their debt? Yes, but these lenders are the same lend…

My reading of the explanations on studentloans.gov was that the standard payment was a minimum of $50/month, and that it could be even lower on an income based plan, is that wrong? Was your minimum higher?

I think I had two loans that had payments totally 200-300/month. I know one was around $150/month for sure. The other maybe $75.

Re: White House rolls back protections for people in default on student loans

#139
post #10

I'm surprised by the comments here. I am a fiscal conservative, but having taken and struggled to pay for student loans, and having hired people in the same situation, find that the lending programs are predatory by nature in that they know students will be unable to service the high monthly payments, and eventually default as a result. Do I think people should pay their debt? Yes, but these lenders are the same lend…

> The only reason I was able to pay my loans was because the Army paid them for me after I completed my term of service. I tried for years to find employment that could help me escape a life of poverty but could not. Okay, so then I must ask: What did you major in, what was your total debt, and did you research the career prospects of your major BEFORE going to college? Sometimes I think a basic mandatory form that c…

And what happens when you switch majors? All of your scholarship money gets revoked?

Most schools do not require you to declare a major when applying or during the freshman year. Most people that have a major in mind when entering college end up changing it as well.

I think this is telling that MOST people do not go to college because they are super passionate about whatever subject. Most people go to college because they would like to find a job that will ensure them middle class wages.

If we fixed the job market (ie prevent jobs from requiring a bachelors or masters when many high school graduates could be trained to do it AND increase wages not just at the top of the spectrum), I have a strong suspicion there wouldn't be so many people going to college for "bullshit" degrees and even if there were they would actually be able to pay their loans back in a timely manner.

Re: White House rolls back protections for people in default on student loans

#140

Good. I paid the $120K for my education and co-signed a loan for a friend (big mistake) for $10k for her education that I ended up paying off because she was a dead beat. There has been a huge disturbing trend in the US in the last 30 years or so: you're not responsible for your actions; it's always some one else's fault. You choose to go to a high priced school and study something that offers no marketable skills or…

So you are against the ability for people to declare bankruptcy then?

Many boomers that spent beyond their means and lost their homes in 2008 were able to walk away from their loans. While they had a house to "give back", that asset probably lost 50-300K depending.

Many people every year get expensive medical care and are unable to pay it off. They cannot "give back" a medical procedure, so the cost is written off and/or they declare bankruptcy. This negatively affects everyone else that pays for healthcare.

But when it comes to education, it's a different story? I have a feeling the different story is: educational debt primarily effects the young, housing/medical debt primarily effects the older generations.

Educational debt used to be like other debt, but then the boomers went to college and got into positions of power...

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