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Soaring Student Debt Prompts Calls for Relief

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Re: Soaring Student Debt Prompts Calls for Relief

#331

Post by morgante »

btilly wrote: post #329
morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education. In economic models, one of the biggest reasons for soar…

Exactly. It would in the end be better for everyone except for overpaid administrators.

Re: Soaring Student Debt Prompts Calls for Relief

#332

Post by btilly »

morgante wrote: post #199
toomuchtodo wrote: post #180

Earlier quoted context omitted.

TL;DR The health of the economy is more important than your moral high ground. Same reason we let people walk away from homes (or not walk away, simply not be able to afford them), but we'll still give them a mortgage 3 years after their foreclosure; the economy needs the monetary velocity to survive.

> Same reason we let people walk away from homes (or not walk away, simply not be able to afford them) Like I said in my comment, I recognize that there needs to be some option for people who can't possibly repay their student loans. Defaulting on your mortgage is not consequence-free: you lose your home and hurt your credit. We don't let people just forgive their mortgages and keep their homes without hurting their…

We should treat student loan debt like any other debt.

Until Bush changed the rules at the request of the financial industry, we did.

Re: Soaring Student Debt Prompts Calls for Relief

#333

Post by nstj »

ArkyBeagle wrote: post #292
nstj wrote: post #277

Earlier quoted context omitted.

What does this have to do with the velocity of money? If the students continue to pay off their debt then the money flows to their creditors, who will use put it to work in the economy. If the debt is forgiven then it won't go to their creditors and will instead go to those who had student loans who will similarly spend it. Is there another reason that forgiving student loans improves the health of an economy?

For a student, they can either spend money on educational debt service or they can buy other things. "Buy other things" presumably increases monetary velocity.

But if the investor receives the cash from the student as payment of their loan, they have to do something with that cash too (buy dinner at Per Se, grab a new Vertu phone, lend the money to a startup so that the startup can spend the money on consuming goods and services, etc)

Re: Soaring Student Debt Prompts Calls for Relief

#334

Post by analog31 »

morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

I can't think of a scenario for resolving the problem of college funding, that won't seem unfair to somebody. There will be winners and losers, guaranteed. And as others have pointed out, a continued demand recession punishes all of us.

Should each of us support the status quo, because we don't to give up our little piece? Are we in a Nash equilibrium?

You might be the one who made a bad financial decision. A loan might have made you richer in the long run. ;-)

Re: Soaring Student Debt Prompts Calls for Relief

#335

Post by x0x0 »

btilly wrote: post #329
morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

I think the government should get out of the student loan industry entirely: stop subsidizing them and making interest rates a political issue. Let the market signal which degrees are valuable and which aren't. But also make them dischargeable in bankruptcy. At least then there would be a consequence for people deciding to take out expensive loans for education. In economic models, one of the biggest reasons for soar…

There have also been massive cuts in state aid. Frankly, having the federal government instead of state governments pay for college seems better -- the fed always captures benefits (increased tax money) while if you leave the state you grew up in, the state takes a bath on you.

Re: Soaring Student Debt Prompts Calls for Relief

#336

Post by wang_li »

jonahrd wrote: post #184
morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

You may be right that it's a poor financial decision, but I still hope to one day live in a country where people can pursue education in any subject matter (not just STEM/other money makers) for the pure purpose of educational fulfillment. That can only be done with a system that helps pay for education instead of letting the market decide which degrees are most valuable in terms of pure capitalistic measures

One day I hope to live in a world where every single person in the world can live in Malibu year round...

Unfortunately, the world isn't making new land. It's a reality of life that we live in a world of scarcity.

Re: Soaring Student Debt Prompts Calls for Relief

#337

Post by dbcurtis »

st3v3r wrote: post #319
h4nkoslo wrote: post #203

Earlier quoted context omitted.

No one's stopping you from cutting them a check. Ideally you would not hold a gun to my head and demand I do the same.

You completely missed the point. Further, this "holding a gun to your head" thing is completely asinine.

Is it really? What happens if you don't pay your taxes? Eventually you will be arrested. What if you resist arrest? Do the police ask you to come along nicely with an Especially Firm Voice the second time? Eventually, someone will deploy state-sanctioned violence in this situation.

Stop whistling past the grave yard. That is how government works. They have guns, and prefer that you don't, just in case you get all argumentative and pouty.

Re: Soaring Student Debt Prompts Calls for Relief

#338

Post by Jimmy »

morgante wrote: post #176

Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? I made the choice to go to a slightly less prestigious school so I wouldn't have to go into debt for college. I also worked all through college to pay for my expenses. Should I now be punished for that decision? Why should we make people's financial mistakes consequence-free? I think the government should get out…

>Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions?

Not at all! These people are called "conservatives".

Re: Soaring Student Debt Prompts Calls for Relief

#339

Post by matt_wulfeck »

I'm not sure why it has to be forgiveness. They should be be able to file for bankruptcy just the same as if it was some other bad investment. All investments should come with risks and rewards and be "priced" appropriately.

This will have a drastic affect on the interest rate of student loans, but perhaps a turn towards normal will be good for us. As of right now the government gaurantees it 100% -- which is to say YOU guarantee it!

Re: Soaring Student Debt Prompts Calls for Relief

#340

Post by baddox »

whyenot wrote: post #281
zeveb wrote: post #263

Earlier quoted context omitted.

> Am I the only one who hates the notion of being forced to pay for other people's bad financial decisions? Not just that: this is, ultimately, a giveaway to the academic classes, who have lucked into the business of selling things to unwise consumers spending someone else's money. When these loans are forgiven (let's not fool ourselves: they will be), the federal government will have moved $1.3 trillion into the cof…

I don't see it. Academia already has this money. It was paid to them as tuition. If loans are forgiven, the money will be "moved" (so to speak) to the bank accounts of the indebted, not academia. In the case of state schools, student loans also benefitted the tax payers. Student loans means such schools can charge a higher tuition, which means they need fewer subsidies from the the state.

Being able to charge higher tuition due to government-subsidized loans IS a subsidy from the government, by definition. The government paying the resulting debt would be a further subsidy.
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