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More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

bloomberg.com

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Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#171
post #24

From the article: "Department of Education ticked up to 18.8 percent as of June 30, up from 18.6 percent the same time last year, new federal data show." There's your answer - 0.2pp is totally insubstantial, which makes the title borderline clickbait. The economy doesn't uniformly grow or distribute wealth, so a change so small could just be from the distribution of college leavers in a particular year being overinde…

Here are more depressing statistics:

https://www.cbpp.org/research/state-budget-and-tax/funding-d...

tl;dr: States have been cutting back on funding public education even as it's gotten much more expensive every year.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#172
post #59

Earlier quoted context omitted.

Or we could make public college free, just like we did with high school.

Maybe the real problem is that we've developed this caste system over the last 50 years where people who don't get college degrees are excluded from careers that can sustain a middle class lifestyle. What if free college just moves the goal post and in a couple more decades nearly everyone has a Master's degree and you need a PhD to earn a decent living? What happens if the most talented segment of our work force end…

That's exactly what's happened and what will happen - setting goalposts and then moving them. In Europe, specifically Germany and France, it's common for people to go for a Bachelor's and Master's back-to-back since there aren't any student loans to worry about.

While the lack of student debt from studying so much sounds all nice, the reality is you get a bunch of 26-28 year olds graduating with Master's degrees and ZERO working experience, bar some internships which may or may not be useful.

There are two sub-problems here: "Free" education (not actually free when you see how much taxes are) allows Europeans to take their sweet time in graduating, so it's common for people to be done with their Bachelor's at 24 or 25, while their American counterparts graduate at 22/23 because of the (financial) pressure to finish on time. A combination of high taxes, encouragement from peers/uni to "study abroad" instead of work and from companies to keep their student status to stay interns, means there's also not much motivation to transition to full-time work.

Make no mistake about education quality here, it's not better than America, in fact it might be worse. The population here complains a lot on their local education quality (though you'll rarely ever hear it on the Internet - see last paragraph on why). A lot of memorization from books for things you'll rarely, if ever, use after graduating, lots of partying and bumming around. "Study abroad semester" is nothing more than a proxy term for "4 month vacation for sex, drinking, parties and roadtrips while the taxpayer takes care of the host country's evil out-of-state tuition (usually US, Canada or Australia)" - see for yourself with those "Erasmus" (exchange) students from Europe doing their exchange program in America.

There's a misconception commonly spread in Germany that staying as a student to work means you pay less taxes - kinda true, but technically it's because you get paid so little, you stay in the non-taxable Student/internship wage exploitation is turning into an epidemic because of the large student population that remain students for such a long time paired with legal loopholes that allow many companies to get away with hiring a bunch of cheap students instead of one full-time employee.

I've been living in Europe for a few years and they are not immune to the problems that Americans complain about. They do a good job complaining about America on the Internet while downplaying their own problems and spreading positive vibes (cough propaganda cough) on how Europe is superior/more human/ethical than America though.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#173
post #112

Earlier quoted context omitted.

They should use the metric of purchasing power, not just an abstract "growth". If anything purchasing power seems to be dropping for a lot of people.

That still has a very consumerist bent to it. What about some real outcome-based measurements? Why aren't we measuring how well the economy performs by measuring how healthy people are? Or levels of malnutrition? Or happiness? Or stress? Or education? We should measure our economic progress by how well we're doing as people, not by how much extra shit rich people can buy.

Let's rephrase it. When people can't buy necessities, they aren't doing well.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#174

This one is easy. People are buying things that they can't afford. Throwing it into a loan and then partying their way through school. Since that worked out so well, then they do that with their car, house, furniture, cell phones, and car rims. You aren't entitled to 100,000 dollar education. You aren't entitled to go down to Mexico every spring break. you aren't entitled to eat pizza and hit the bar every weekend. Y…

Yes, entitlement is the problem:

You aren't entitled to having a loan repaid if the interest rate is too high.

...or if you loan too much money to someone who won't be able to afford it.

...or if you expect someone in a lower income bracket to pay more than X% of their income.

Common-sense laws that loosened bankruptcy and regulations on repayment amounts would fix student loans, credit cards, bad mortgages, and payday lending. Why do we always blame the person taking out the loan? The lender should have the expertise to know if a person is capable of repayment and should bear the burden of making predatory loans.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#175

Earlier quoted context omitted.

Because instead of people being debt-slaves their whole lives they'd have that money to pay rent.

wouldnt people be paying higher taxes in order to pay for others to go to college?

That won't be as high as their debts.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#176
Purely anecdotal but I have several friends who have told me they don't worry about paying their student loans on time due to the fact that they feel like they'll never go away. They feel like they'll never pay them off, and they can never get them discharged. So there's no motivation for them to pay them off.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#177

This one is easy. People are buying things that they can't afford. Throwing it into a loan and then partying their way through school. Since that worked out so well, then they do that with their car, house, furniture, cell phones, and car rims. You aren't entitled to 100,000 dollar education. You aren't entitled to go down to Mexico every spring break. you aren't entitled to eat pizza and hit the bar every weekend. Y…

Yes, entitlement is the problem: You aren't entitled to having a loan repaid if the interest rate is too high. ...or if you loan too much money to someone who won't be able to afford it. ...or if you expect someone in a lower income bracket to pay more than X% of their income. Common-sense laws that loosened bankruptcy and regulations on repayment amounts would fix student loans, credit cards, bad mortgages, and payd…

Two things you miss:

1/ Student loans are not dischargeable in bankrupty.

2/ Today, the government IS the lender.

The government has created a system of incentives (even before the student loan industry was nationalized) that encourages lending large amounts of money to anybody by eliminating the risk on the part of student loan lenders.

People can basically never get out of the debt, so you can lend arbitrary sums of money to Feminist Dance Theory majors and other sorts of poor-ROI nonsense.

"Predatory loans" is a misnomer. Predatory government is far more accurate.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#178

This one is easy. People are buying things that they can't afford. Throwing it into a loan and then partying their way through school. Since that worked out so well, then they do that with their car, house, furniture, cell phones, and car rims. You aren't entitled to 100,000 dollar education. You aren't entitled to go down to Mexico every spring break. you aren't entitled to eat pizza and hit the bar every weekend. Y…

You make it sound so easy to get into VT..

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#179
post #150

Earlier quoted context omitted.

I've never thought of it that way. I don't know if there wouldn't be some second or third order issues from something like this, but at first glance this seems like a good idea. Why shouldn't the school take on some of the risk?

The schools would undoubtedly respond that in doing so, they would necessarily have to stop educating people from anything less than the most privileged (and thus low-risk) backgrounds. You'd need to cook up some sort of risk-pooling scheme if you wanted schools to extend that credit to anyone coming from a background that made payment statistically less-likely. And once you started doing that you'd have to be carefu…

Find some way of blinding schools from the individual financial background of applicants.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#180
post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

Alternatively, student loans are rediculously high. Every adult I know always pushes college, but had I been given a $100k loan to buy a rental unit at 18, I'd have turned that into $250k by the time I finished 5 years of school.

Not to mention, I could have worked a 9 - 5, $25 / hr job, and bought a second or third...

Perhaps school isn't the best in many cases.

Now I pay $1k a month in student loan payments, on top of everything else. I'm in tech too, so it's not bad - but I can imagine the 95 / 100 who don't get a tech job are struggling

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