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Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

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Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#151

Post by ponsin »

CathedralBorrow wrote: post #141
ponsin wrote: post #94

Earlier quoted context omitted.

"Education" is necessary up to a certain point. In America, up to highschool education is free and for the most part required. Why draw the line at a bachelors degree? Should Masters and PhDs be free and partially required? Based on how I framed the question I assume that you can tell that I draw the line at highschool education. I can however see the argument for raising it to bachelor's. However I would expect the…

> Based on how I framed the question I assume that you can tell that I draw the line at highschool education. I'm asking out of curiosity and not trying to make a point or win any argument: Why do you draw your line there? I wouldn't combine "free" and "partially required" though, as I don't see the need to conflate them. Where I live Masters and PhDs are free, but your required education is completed at age 15. Ever…

I draw my line there because I know of many people who would have a very fulfilling career doing things that only require a high school education (such as cashiers, customer service representatives, and construction workers). I assume that those people also would not gain much from college since having knowing them in highschool, they do not gain that much from formal education (lack of motivation to study, lack of intelligence to understand basic topics, lack of interest is those subjects).

I guess I shouldn't have assumed that government would necessarily regulate college like they do high school. Some European countries are examples of that. However in those countries there are a lack of people who are qualified to work in highly educated fields and a surplus of blue collar workers. In the US the situation is reversed. There is not enough work for many liberal arts majors, but a lack of workers for blue collar jobs. Spending tax dollars educating people from jobs that lack workers to jobs that have a surplus is not good usage of the money. Furthermore, a person who is not fit for even free college (probably has a lower income) now has to pay taxes for college students (who probably will have a higher income [unless they can't find a job]) while not benefiting from it.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#152

Post by grecy »

iso947 wrote: post #145

In the US, school is free from Kindergarten to grade 12. Why isn’t college free?

Because the US is a for-profit society, not one focused on improving the lives of citizens. Companies are making billions on health insurance, education, etc.

It won't change because they want to hold onto their profits.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#153

Post by iso947 »

grecy wrote: post #152
iso947 wrote: post #145

In the US, school is free from Kindergarten to grade 12. Why isn’t college free?

Because the US is a for-profit society, not one focused on improving the lives of citizens. Companies are making billions on health insurance, education, etc. It won't change because they want to hold onto their profits.

In that case why is school free?

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#154

Post by selimthegrim »

vonmoltke wrote: post #29
jrs235 wrote: post #16

Earlier quoted context omitted.

>Not sure exactly why they switched to a medical debt project My assumption is that the government and lenders of government guaranteed loans aren't selling the delinquent accounts for pennies on the dollar.

There are no "lenders of government guaranteed loans" anymore, and there haven't been for at least nine years. Either the government is the lender, or it is a completely private (and dischargeable) loan.

How is a private loan dischargeable given the 2005 law?

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#155

Post by brianmcc »

iso947 wrote: post #146
psaux wrote: post #23

My wife and I lived a very simple lifestyle for years (7ish) after college so we could pay off student loan debt. Awesome Ford Tempo car, local honeymoon, Studio apt for first 5 years, limited eating out. She has a masters (more loans), and is a teacher. So that made it even tighter. Is there any data on if folks with student loans are living above their means? I.e new TV’s, new car lease, vacations, ordering out. I…

In the UK you’re describing a very high cost lifestyle. Your own place? A car?

London maybe - not wildly unrealistic for most other bits of the UK though.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#156

Post by dillonmckay »

thaumasiotes wrote: post #139
ponsin wrote: post #63

Earlier quoted context omitted.

Why? If I take out a loan in order to go on a cruise, the cruise company is not responsible if I default. In fact, with almost every purchase that involves a loan, the company offering the loan is different than the company offering the product / service. If responsibility fell on the university, then they could just refuse to accept people who take out loans. The result being that only rich people could go to colleg…

> In fact, with almost every purchase that involves a loan, the company offering the loan is different than the company offering the product / service. I suspect this isn't true. Amazon puts up some pretty intrusive financing offers on all kinds of products. Jewelry is commonly purchased with vendor financing. Electronics are commonly purchased with vendor financing. Cars are usually purchased with vendor financing.…

It is an entirely separate legal entity, that shares no legal risk with the vendor.

Ally came from GMAC, which GM created to finance automobiles.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#157

Post by dillonmckay »

reallydontask wrote: post #136
treden wrote: post #95

Earlier quoted context omitted.

European cities have much higher population density, and the lower personal income (often via higher taxes and, ironically, worker protection laws) changes the tradeoff between driving and taking pub trans, so more people take the bus. The tradeoff is that a lot of people live in small boxes. And european governments have plenty of bs job creation engines like roadwork, too. Would be nice to have some data. One relat…

> And european governments have plenty of bs job creation engines like roadwork, too. Do you really think that there isn't economic value in roadworks?

US BS job creation is in healthcare, particularly insurance processing and billing, not roads.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#158

Post by dillonmckay »

gwright wrote: post #54
diogenescynic wrote: post #38

Earlier quoted context omitted.

Why was it necessary to change student loans to being non-dischargeable in bankruptcy? That is a recent change and it shifts the burden from banks having to evaluate the loans they are making which would likely mean fewer loans and thus less money earned from interest. It seems like student loans should be treated like any other unsecured loan. And really student loans shouldn’t even be necessary for public universit…

Because it is an unsecured loan. It would be too easy for a newly minted graduate to declare bankruptcy, discharge the loan, and move on with their life. The only entity stupid enough to loan money to students in that world would be the government.

There has got to be a happy medium between 7 years and life.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#159

Post by afarrell »

adventskalender wrote: post #137
afarrell wrote: post #121

Earlier quoted context omitted.

From data collected over 2014-2018, the US spent $10,586 USD/capita on healthcare and Sweden spent $5,447 USD/capita on healthcare. Source: https://data.oecd.org/healthres/health-spending.htm

That may be so, but doesn't necessarily imply that health care is more expensive in the US. It's possible that in the US they simply spend more money on useless things, or do more screenings with better technology, for example. Many things can go wrong with interpreting such statistics, see also my comment here: https://news.ycombinator.com/item?id=21760725 Afaik, some of the best (and also most expensive) medical pr…

> It's possible that in the US they simply spend more money on useless things, or do more screenings with better technology

These are both components to saying that the health care system is more expensive in the US.

> a rich country could spend more money on health care and still have worse average health than poorer countries

Yes. I think that multiple people on this thread would argue that this is the case with the US.

> many health outcomes may also depend on wealth - for example over-consumption leading to obesity, which might affect health more than spending on health care can compensate.

This implies that differences in social services and urban design have an impact on healthcare spending. This is relevant to /u/sykick's statements "the cost of healthcare, housing, food, and transportation should be taken into account." and "I'd rather be poor in Sweden than in the U.S."

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#160

Post by kortilla »

adventskalender wrote: post #112
planetzero wrote: post #15

We need to get rid of student loans. The problem is that Universities don't ever need to worry about a student defaulting and can keep increasing the prices of tuition with impunity. If they default, they don't care, because the money is already in the bank. If universities had to worry about students defaulting, they would get rid of bullshit degrees that don't result in an actual job and the prices would come done…

Why wouldn't it be the responsibility of the students to not take out loans for stupid degrees? And also the responsibility of the banks for giving out the loans only for useful studies? I don't see any party here that needs rescuing by the government.

It’s not the bank’s responsibility because they aren’t at risk of a default on the loan for the student picking a useful degree. Remove that government backstop and banks are going to get awfully good at rejecting $200k loans for an out of state B.A. degree in Renaissance Era French Literature.
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