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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

#141

Post by hueving »

skwosh wrote: post #117

There seems to be a strong sentiment in this thread that the only value provided by education is the contribution to career (e.g. that loans should only be provided for financially viable courses, that studying arts is as useful to one's career as studying finger painting, etc). This just seems so wrong. Optimising for vocational training means you're effectively tuning out the abstract arts and sciences and... oh, t…

When it comes to student loans though, they should be given on someone's potential ability to actually pay them back, which is dependent on future career prospects.

I'm not against Arts or offering scholarships/grants for them. What I'm against is allowing a person to take out $160,000 of debt at 6% interest for an education that will land them a job as an administrative assistant. They will most likely carry that debt for the majority of their adult life.

It's bad for society to allow 18 year old kids that have a poor grasp of long term consequences to shackle themselves with such a financial burden. None have had long term full time jobs to appreciate how difficult it will be to pay back that much money.

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

#142

Post by paulmd »

TuringNYC wrote: post #99
maxerickson wrote: post #60

Earlier quoted context omitted.

The cost was very low, treasury rates dipped below 1%. https://www.treasury.gov/resource-center/data-chart-center/i...

The cost was not low -- rates dipped below 1% because the Fed printed money. But printing money is not free. The common person pays for it by earning less on savings and in the form of inflation, especially retirees who diligently saved through their lives hoping to earn and live off interest in their old age. Every person purchasing a house pays more for low rates because housing prices go up, so do all the associat…

It all depends on whether you're a net debtor or a creditor, and at what rates.

Printing money tends to increase interest rates, which benefits debtors (anyone who owes money on a credit card, student loan, or a mortgage - which is pretty much everyone). If inflation is happening, you get to pay back your today-money-debts in weaker-future-money which means you pay less in real terms.

Regardless, not all that much of the quantitative easing money actually entered the economy because it was largely hoarded by banks to shore up their balance sheets post-collapse.

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

#143

Post by danmaz74 »

skwosh wrote: post #117

There seems to be a strong sentiment in this thread that the only value provided by education is the contribution to career (e.g. that loans should only be provided for financially viable courses, that studying arts is as useful to one's career as studying finger painting, etc). This just seems so wrong. Optimising for vocational training means you're effectively tuning out the abstract arts and sciences and... oh, t…

I totally get you, but then the question is: do you need to get into a "top" and super-expensive college to get a good education in humanities and abstract art and similar?

Because, unless you're rich or get a very good scholarship, I guess that going to that kind of college makes sense only if you plan to pursue a high-paying career.

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

#144

Post by hueving »

IslaDeEncanta wrote: post #138
nightski wrote: post #130

Earlier quoted context omitted.

I feel like the value of adversity is lost sometimes on HN. We should be especially familiar with it. Earning a high level of income makes life extraordinarily comfortable, to the point where it is easy to become complacent and stop trying to really contribute to society in a meaningful way. Some times a struggle is not a bad thing. Not to the point where one should be homeless or starving of course, but having every…

Your comment is the typical lack of perspective I expect from HN. Going to college is extremely stressful. Going to college poor (actually poor) is nearly impossible.

>Going to college poor (actually poor) is nearly impossible.

This is not true. If you are poor (actually poor), there are so many government grants and scholarships for low income students that it's much easier financially than if you are middle class.

If you are middle class, your parents frequently have to give up half a year's salary to help pay. Good luck going to college if you're not a top tier student and your parents refuse to help pay tuition.

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

#145

Post by paulmd »

meddlepal wrote: post #4

Anyone have any idea what the 20 to 50 year implications are for this? I imagine this will crush the economy eventually if millennials cannot pay it off.

Eventually education reform will be passed and costs will be decreased close to zero effectively. Any remaining student debt will likely be forgiven.

The generation or two who paid off their student loans instead of making a down-payment on a house will be screwed.

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

#146

Post by refurb »

rahimnathwani wrote: post #136
refurb wrote: post #120

Earlier quoted context omitted.

There is no stock of assets that are suddenly going to fall in market value. Sure there is, the loans themselves. Right now a bunch of lenders have $1.3T worth of loans. If those loans don't get paid off, they are $1.3T poorer.

What would cause those assets to suddenly fall in value?

A huge uptick in default rates. The only reason why student loan paper has value is because there is an expectation that it will be paid off.

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

#147

Post by hueving »

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?

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

When you're 17/18, it's really hard to grasp how hard it will be to pay off the loans. Especially when society tells you that you will be a loser if you don't go. This comes directly from teachers, which have been an authority figure in the child's life up to that point.

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

#148

Post by hueving »

visarga wrote: post #121
aggie wrote: post #88

Earlier quoted context omitted.

Many students pay way more than they have to. I graduated from a top-10 public school (in-state) after transferring from community college and my total bill was about $35k. That's not nothing, but also not a ball-and-chain six-figure mark that some people accrue. There are better options than a lot of people have taken. To me the solution has to involve better financial and career counseling for high school graduates…

Natural selection at work. Some make the wrong choice to take too much debt.

>Natural selection at work. Some make the wrong choice to take too much debt.

That will backfire when enough people have made the wrong choice that the decide to vote someone in office who promises to wipe out the debt.

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

#149

Post by switch007 »

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…

Are they "interest free" in the Government's use of the phrase, or the real meaning? The UK government calls (or called) them "interest free" because the interest rate is linked to inflation (as long as it's positive!) and of course (/s) your salary always rises with the same measure of inflation, therefore it's "interest free"

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

#150

Post by nightski »

IslaDeEncanta wrote: post #138
nightski wrote: post #130

Earlier quoted context omitted.

I feel like the value of adversity is lost sometimes on HN. We should be especially familiar with it. Earning a high level of income makes life extraordinarily comfortable, to the point where it is easy to become complacent and stop trying to really contribute to society in a meaningful way. Some times a struggle is not a bad thing. Not to the point where one should be homeless or starving of course, but having every…

Your comment is the typical lack of perspective I expect from HN. Going to college is extremely stressful. Going to college poor (actually poor) is nearly impossible.

You assume way too much.
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