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

Post by the-dude » Wed, Dec 11, 2019, 2:07 PM UTC

ssivark wrote: post #170

the-dude wrote: post #126

Earlier quoted context omitted.

If the value disappears overnight, wouldn't it be fair to compare it to the yearly figures?

If it disappears "overnight", then would the right comparison be to daily GDP? which would increase the computed percentages by a factor of 365. Clearly it is not sensible to compare two quantities with different dimensions of $ and $/time. It is like comparing distance (miles) to speed (miles/hr). Changing units to (meters/sec) doesn't change the absurdity in any way.

Post by bumby » Wed, Dec 11, 2019, 2:08 PM UTC

Nasrudith wrote: post #238

bumby wrote: post #183

Earlier quoted context omitted.

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.

Post by Nasrudith » Wed, Dec 11, 2019, 2:10 PM UTC

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…

Post by malvosenior » Wed, Dec 11, 2019, 2:11 PM UTC

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.

Post by bumby » Wed, Dec 11, 2019, 2:14 PM UTC

ipsi wrote: post #250

bumby wrote: post #183

Earlier quoted context omitted.

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

Student Loans in the UK can work like this - you repay, I think, 9% above £25,000, and it's wiped after 30 years, regardless of how much is left. Some details may be different depending on exactly when the loan was issued. So if you have a huge loan but a small income, it's more like a 30-year graduate tax than a loan you expect to fully repay.