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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

#31

Post by jrs235 »

tehjoker wrote: post #25
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.

I only mentioned them because I was googling for student debt strike projects and I'd heard of them before. The jubilee project is a form of mutual aid and less a strike. The point of a strike is to build power for the striking class so that the creditor class is forced to make significant concessions up to and including relieving all of it. To be clear, this would mean huge numbers of people simply stop paying in a…

If they stop paying government student loans en masse and then hid thier income (get paid and work cash only) all that would happen is our current trillion dollar deficit might increase a little bit. The government budget takes into account payments and interest from these loans. The total amount of all the loans is likely spread across repayments over 20 years.

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

#32

Post by luxuryballs »

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…

Yeah this is a problem that caused itself. Price fixing always breaks a market, and this loan backing by fiat is like a cancerous version of price fixing.

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

#33

Post by vonmoltke »

undefined3840 wrote: post #28

The problem is compounded by the fact that students do not get to choose who their loan servicer is and thus a few servicers like Navient have a government approved monopoly on that business. Can look up many reports on their incompetence and misleading information that funnels students into repayment plans that maximize their own revenue.

As far as I know Navient is the servicer for Federal loans. Who else is there since the change to DOE-only government loans?

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

#35

Post by jrs235 »

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.

Thank you for the correction/clarification.

However I still have a government guaranteed loan that was issued by a bank. If I default on it that bank isn't selling my account. They'll garnish my wages. Also I never plan on paying off my loan early! It's only 2.25% apr! I got lucky. Rates were really really low when I graduated and consolidated my loans.

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

#36

Post by psaux »

jrs235 wrote: post #26
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…

A lot of people got loans for degrees that don't pay. Or went a few years then dropped out. I went to a college known for its recreation management program. Cool industry. Not a lot of good paying jobs. I know a few universities with amazing turf programs... Only so many golf courses and turf fields that need someone with that kind of knowledge and that pay well. Most jobs in turf are mowing and applying chemicals th…

I have read that, thank you for posting. Schools are good at selling the vision for sure. Sister did photography, and is amazing at it. Just doesn’t pay the bills. In that context, we do need future poets and artists, and I am sure their jobs will not cover their loans, major loss.

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

#37

Post by tehjoker »

jrs235 wrote: post #31
tehjoker wrote: post #25

Earlier quoted context omitted.

I only mentioned them because I was googling for student debt strike projects and I'd heard of them before. The jubilee project is a form of mutual aid and less a strike. The point of a strike is to build power for the striking class so that the creditor class is forced to make significant concessions up to and including relieving all of it. To be clear, this would mean huge numbers of people simply stop paying in a…

If they stop paying government student loans en masse and then hid thier income (get paid and work cash only) all that would happen is our current trillion dollar deficit might increase a little bit. The government budget takes into account payments and interest from these loans. The total amount of all the loans is likely spread across repayments over 20 years.

That's a really great argument for free education, which is an argument the strikers would make. I do think though that you are underestimating the power ordinary people have. If the various funding mechanisms suddenly go into crisis, this will cause a very large ruckus with the potential for positive change.

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

#38

Post by diogenescynic »

rayiner wrote: post #30

All this talk about student loan forgiveness is an unnecessary solution to a problem that’s not really that bad: https://www.nytimes.com/2018/04/02/upshot/an-international-f... Average BA holders in the US graduate with $28,000 in debt, versus $21,000 in Sweden. The Swedish system is basically like our income-based-repayment, which we have had since the 1980s. Except, as you’d expect with Sweden, there is less paperw…

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 universities but that’s another point.

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

#39

Post by m463 »

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…

> Is there any data on if folks with student loans are living above their means?

Literally every single friend of mine bought a new car when they graduated from college and got a job. Anecdotal, but I suspect it is more common than people realize.

It doesn't mean they were living above their means, but I think buying a new car at the start might be a financial misstep.

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

#40

Post by toomuchtodo »

jrs235 wrote: post #18
chiefalchemist wrote: post #8

Earlier quoted context omitted.

Silly question: is there any legal way to default on a student loan? Can that be exploited? En mass? Perhaps?

Yes. To default just don't pay. What I think you meant to ask was is there a way to escape repayment (get the debts wiped out in bankruptcy). Yes. It is possible to ask and get a judge to wipe out the student debt loan but the bar is usually fairly high and unlikely. Can it be done en masses or exploited. Not likely. You'd likely need Congress' involvement. Good luck with that and good luck with Devos.

I have wondered if the right person in the right place could go Mr Robot on the Dept of Education’s loan data, nuking all borrower data (prod, backups, everything). “Non Congressional Sanctioned Forgiveness” thought experiment.
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