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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

#231

Post by adventskalender »

adventskalender wrote: post #138
the-dude wrote: post #132

Earlier quoted context omitted.

Could you define 'much'? I have seen figures once, and it wasn't all that much.

I have to google for that later. Might also be difficult to compare because of different forms of taxes (income, wealth, VAT, energy...).

Difficult to find reliable numbers. This one claims about 43% taxes in Sweden vs about 26% in the US https://www.taxpolicycenter.org/briefing-book/how-do-us-taxe...

Another question perhaps is who pays taxes - another source I found said 2/3rds of voters in Sweden get their money from the state, either because they are government employees or recipients of welfare.

So an average tax rate might also be misleading, if many don't pay taxes at all.

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

#232

Post by dwnvoted2hell »

aiphex wrote: post #228
AsyncAwait wrote: post #224

Earlier quoted context omitted.

This is the reactionary right-wing Twitter take, but for every coach, there's computer science, engineering & biology students suffering under massive, unforgivable debt. Yes, student loans need to go, but not so that people don't go to college. That should be free for undergraduates in today's economy, where you need high level ed. for what used to be done by people who barely finished high-school 30 years back.

I think university education also makes more intelligent, socially and self aware members of society. Even if it doesn't directly lead to a career in a chosen field, it produces better people who hopefully make better employees.

I don't think spending 150k on a degree makes you more intelligent. What makes you intelligent is the desire to further yourself in the first place. The ability to minimize the investment to get to maximum profitability is a sign of intelligence.

“You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.”

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

#233

Post by corporate_shi11 »

scarface74 wrote: post #230
corporate_shi11 wrote: post #215

Time to eliminate government funded student loans. Most of the kids going to college now shouldn't even be there in the first place. I was doing volunteer work a few years back, speaking to some kids from the local community. One said he was going to a 4 year college, probably paid for by the government given the circumstances. Said he wanted to study "coaching". And our tax dollars are paying for this...

Right. Only people with money should get an education.

Someone without means but with demonstrated ability would be able to get a private loan.

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

#234

Post by vonmoltke »

kortilla wrote: post #160
adventskalender wrote: post #112

Earlier quoted context omitted.

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.

Banks already reject that, because they aren't getting a guarantee. The issue is the loans issued by the Department of Education, which are the non-dischargeable ones.

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

#235

Post by pnutjam »

corporate_shi11 wrote: post #233
scarface74 wrote: post #230

Earlier quoted context omitted.

Right. Only people with money should get an education.

Someone without means but with demonstrated ability would be able to get a private loan.

username checks out

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

#236

Post by vonmoltke »

dna_polymerase wrote: post #182
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…

What I read and heard in the past few weeks about this hints at another solution. Instead of getting rid of student loans and college tuition fees, we need to improve the situation for students and open the market for other players. Apparently the Department of Education chooses the loan service for borrowers, thus enabling a de-facto monopoly for Navient [0]. Now, if we had a functioning market people could choose b…

How does the servicer affect this? They're just the intermediary for the DoE to get their money back.

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

#237

Post by astura »

Graham24 wrote: post #148
magnusss wrote: post #83

It seems like the majority of the commenters here are missing the point. The increasing rate of student loan default is not a result of kids who go to a four year college, graduate with an unmarketable degree in philosophy, fall on hard times and then can’t pay their bills. It's kids who go to barber or cosmetology school, take on $30k of debt, then realize they don't make enough money cutting hair to support themsel…

It costs $30K to go to Barber School in the US?

No, in my area the public school system offers cosmetology school for free.

I'm sure there's some fancy for profit private schools that cost $30k though.

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

#238

Post by Nasrudith »

bumby wrote: post #183
roenxi wrote: post #173

Earlier quoted context omitted.

A free market? Nobody but nobody would be stupid enough to lend money to students in a free market. The student would be an infeasible credit risk. They have no money or assets. There is no free market here.

I heard an interesting proposal recently that sounded like venture capital for education. Students would receive tuition money and the lender would receive a percentage of their post graduation salary for a specified number of years. Even without novel approaches students already get non-subsidized lines of credit so I don’t think it’s unheard of

That reminds me of the Paradox of the Court. Obviously not quite as straightforward but such a payment model does encourage at least some degree of sandbagging.

https://en.m.wikipedia.org/wiki/Paradox_of_the_Court

On another note the idea rubs me as immoral in ways that loans don't for reasons I am not quite able to articulate. Like viscerally seeming too far too similar to indenteture.

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

#239

Post by vxxzy »

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…

This is simply untrue. They do care. For institutions with high default rates (greater than 30%), they risk missing out on the federal student loans (imo gravy train). [0]. It appears that this time around, a good number of technical/trade related institutions lost out. [0]

[0]: https://www.ed.gov/news/press-releases/national-federal-stud...

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

#240

Post by Frondo »

moduspol wrote: post #189
eggie wrote: post #172

Earlier quoted context omitted.

> 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 due to free market forces. This is a hypothetical but classic example of how regulation is required to support a free market.

It's federally guaranteed student loans that got us here! It wasn't like this for our parents. This comment is an example of how any amount of problems caused by government intervention can be framed as a need for more government intervention.

It sure wasn't like this for our parents. The UC system was close to free in the 60s. Portland State University's very first summer session was $50 for tuition and fees. Universities supported simply by taxes, not a byzantine system of public and private loans (still backed by the government, of course), like is common in other Western nations.

I'm 100% in on getting the government out of the lending business and back into the "higher ed is a public good" business. I'd rather they just return the actual sticker price to what it was a generation ago, and make it realistic for people to work student jobs to earn the cost of their tuition.

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