Earlier quoted context omitted.
Black Americans are poorer than most other groups, and I suspect that they're less likely to get parental support paying for college.
Let’s be very clear: Black Americans are poorer because of racist policies that kept them out of the huge post-WWII governmental benefit programs. Things like the GI bill and veteran home loans, and homeownership in general were white-only for many years, allowing that group to build generational wealth that continues to this day.
Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
301–310 of 372 posts
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#302Earlier quoted context omitted.
Currently, average BA graduates have $28k in debt. $400 a month will pay that off in roughly 7 years, depending on the interest rate on the loan. Frugal living (aka sharing a studio apartment with a spouse, not eating out or making luxury purchases) makes that entirely doable, probably faster. OTOH, living above your means or lots of unexpected expenses (pet health care, personal health care, car maintenance, etc) ca…
Well the problem is that while $400/month may seem to you like a reasonable amount of cash to set aside, for many people it's not possible. It's quite funny you chose $400 actually - since there was a story recently about how a substantial amount of americans couldn't get their hands on $400 in a one-off emergency ( https://www.bloomberg.com/news/articles/2019-05-23/almost-40... ) let alone once a month for seven yea…
It is reasonably small for a debt load for someone who has a degree, has been frugal, and is on an income based repayment plan. Most americans are not those things, and too few are frugal.
I recall my grandfather being proud of only having a $25 electricity bill... granted, it was about 20 years ago, so prices were a bit lower, but it was for a two story house.
Edit- also, that $400 was chosen for the payoff period, not a minimum payment. I believe the minimum on that would be closer to perhaps $200 a month.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#303Earlier quoted context omitted.
Right, so the difference here is that you can be foreclosed on, and the bank takes your house. You can even go bankrupt when you lose your house. But you can't get out of student loan debt via bankruptcy, nor lose the education. I figure the banks figure they're going to be fine, because rather than the SLABS market collapsing, it'll just suffer a correction: the enforced debt peonage of making payments all one's lif…
Except that all of those angry debtors can vote, and elect representatives who change the applicable laws. So one way things are different this time around is that government action could precipitate events in unpredictable ways. Remember Bernie is talking about straight up forgiveness: the debt just disappears. He probably won't be the next President but student loan reform (including existing loans) is a hot topic…
> Remember Bernie is talking about straight up forgiveness: the debt just disappears.
I don't think this would harm the financial system. Debt held by the govt disappears, privately held debt is purchased by the federal government and then disappears.
I don't know the structure of student loan backed debt but this sounds the opposite of the cataclysmic: the government is guaranteeing they will "print" all the money needed to cover debt owed to 3rd parties, which should mean banks will do better than ever.
I'd be more concerned of cataclysmic outcomes if we changed laws in a way that fundamentally shift the risk profile of student debt as held by 3rd parties
> He probably won't be the next President
He IS a top polling primary candidate, but more to the point I don't think even a democratic Congress would pass a lot of his policy
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#304Earlier quoted context omitted.
Any forgiveness is likely to be executed by the forgiving entity paying off the loans. The federal government is not going to use a pen to steal trillions of dollars from lenders holding contracts for repayment. That’s a banana republic action.
The federal government is the one holding all that debt, so that is exactly what is going to happen.
If we're being cynical, I think they would forgive the debt and bail out any large financial institutions who are damaged by the act of doing so. It would be very in character.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#305We 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...
30%!
If a bank had a 30% default rate on mortgages they’d immediately cease to be a bank.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#306Earlier quoted context omitted.
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.
> we do need future poets and artists, and I am sure their jobs will not cover their loans, major loss Do poets and artists need four+ year degrees, or degrees at all? Everything I've heard from friends who have gone to various programs have said that they actually really make it harder to be a good artist- whether from undermining your individual muse to cramping your style, or simply putting your mind in the box of…
>There are jobs related to art (say, visual design or writing copy) that can be done on full or even limited part time basis.
This is the part I don't get. You're totally right. The skills taught in liberal arts programs are actually useful. I think university liberal arts departments could do a much better job of pointing students toward areas where they could use their skills. I flinch when someone says their poli sci or history degree is useless. Those are extremely useful for journalism and all subfields/areas where your vocabulary pays your rent. If done right, those degrees make you a better writer and generalist /specialist researcher than like, I don't know, at least 60% of the general population. I got an English degree just because I like reading books and writing. I wanted to be a journalist, which where I'm from is generally another year of specialised training after a three-year undergraduate degree. Then I went and lived overseas a couple of times and didn't want to be a journalist anymore. Used my skills for other things. It worked out fine. The liberal arts are more useful in the workforce than many people think.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#307Earlier quoted context omitted.
When making comparisons with Sweden or other countries the cost of healthcare, housing, food, and transportation should be taken into account. Healthcare and transportation costs are much higher in the U.S. I think too we also have a higher per capita income and I don't know how things balance out. One thing for sure though. I'd rather be poor in Sweden than in the U.S. There is also the fact that many students who s…
Why is the cost of living relevant when you’re talking about debt levels? The point is simply that our debt levels aren’t that unmanageable, and we could achieve something very close to the Swedish student loan system by simply automatically enrolling people in repayment plans we already have. Moreover, American cost of living is the same in Sweden as in the US (the GDP per capita in nominal dollars is identical to t…
You wrote: The point is simply that our debt levels aren’t that unmanageable,...
The cost of living is important as this and income level determines the affordability of debt. Just comparing income level and debt level between the two countries is not a deep enough analysis in order to determine if your proposed fix would work.
You are also ignoring the fact that a large number of people who go to college never graduate. These people are completely absent from your analysis of the problem. You are focusing only on the set of college graduates of both countries. I suspect that the rate of college completion for those who enroll at least one semester is much higher in Sweden than in the U.S.
According to your post 1/3 of U.S. college graduates don't have employer subsidized healthcare. This is a huge percentage and you are ignoring them in your analysis of relative debt burden.
Taxes are higher as a percent in Sweden than in the U.S. but in the U.S. at a moment's notice you can get screwed financially really bad in ways that you can't in Sweden. An ambulance ride in the U.S. costs much more than in Sweden and yearly out of pocket expenses for healthcare is much higher. The necessity of a car causes most people in the U.S. to have auto loans and unplanned maintenance costs can send people over the financial precipice.
I suggest that merely looking at the numbers you have does not give a clear picture of the relative situation in both countries.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#308Earlier quoted context omitted.
Well the problem is that while $400/month may seem to you like a reasonable amount of cash to set aside, for many people it's not possible. It's quite funny you chose $400 actually - since there was a story recently about how a substantial amount of americans couldn't get their hands on $400 in a one-off emergency ( https://www.bloomberg.com/news/articles/2019-05-23/almost-40... ) let alone once a month for seven yea…
It is reasonably small for a debt load for someone who has a degree, has been frugal, and is on an income based repayment plan. Most americans are not those things, and too few are frugal. I recall my grandfather being proud of only having a $25 electricity bill... granted, it was about 20 years ago, so prices were a bit lower, but it was for a two story house. Edit- also, that $400 was chosen for the payoff period,…
Well, I just showed that apparently it is not a reasonably small debt load for many! Even if you halved the amount - as I said, if people struggle to get $400 for one-off emergency expense would they be able to afford $200 each month? Also we have more than doubled the time to pay off the principle, I hope everyone's got a nice low interest rate!
I get what you're trying to say - you see that people have the latest iPhones, buying expensive sneakers and sharing pics of their exotic holidays. It's easy to then look at the student loan crisis, connect the dots and think "Ah, it's all these people with their iPhones, sneakers and holidays! I however have lived frugally, more people should live like me". Everyone's circumstances are different, but I think I can guarantee that student loan debt is a problem not because graduates go on to eat avocado toast every day (or whatever people are upset about this week) but simply because to attend higher education the costs in the USA are astronomically high and generally require either incurring huge quantities of debt or the enormous good fortune of coming from wealth.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#309We 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…
It's insane to me how quick some folks are to dismiss what they deem "bullshit degrees". It's our culture that has turned education into some kind of "investment" in future job prospects. To put it simply, education was never intended to be that way, nor should it. It's as if studying the arts is some kind of luxury for those who are already financially well-off. Education is supposed to be about learning just for th…
I agree that the previous role of education was not intended to be strictly vocational, but that role changed with the industrial revolution following policies like the Morrill Land-Grant Act calling for institutions that focus on more vocationally-minded tracks, like agriculture and engineering, to support the economy. We can debate if this was in the better interest of society, but I think the role of education is allowed to change.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#310We 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…
Didn't student loans appear exactly because of american populism of "making college affordable"?