361–370 of 374 posts
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Usually it is the bureaucrats that actually run the country and they are career professionals
Why not do away with the farce of elections then if the civil service is actually in charge?
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This so much. The only reason I'm going for a Master's degree is so I have an easier time getting my foot in a great company. And where I live we don't have any student debt (no, none at all). Life as a student is pretty bliss so why wouldn't I study? It's the best time of your life and you also get a degree out of it without getting in debt. Sign me... oh wait I'm already signed up.
How do you pay rent and food?
I co-signed a loan for a friend who worked in as a Chemical Engineer for GE. Long story short, he had his Visa revoked, so I ended up on the hook for $16k of his student loans. I took a look at some of the financing terms and they are completely ridiculous. He paid $130 a month and at the end of the year he had only paid down $70 in principal. These terms should be criminal.
(130 * 12 - 70) / 16,000 = 9.375% That's a bit high but doesn't seem totally out of line for an unsecured loan.
It was a 2.5% loan that balloons up to 6% loan after two missed payments, but that's not the confusing part.
Interesting loophole, when he was sent back to Mexico - his payment lapsed for 6 months before I was made aware that payments were being missed. They claim they are not allowed to disclose when payments are missed (but I'm allowed to be held responsible as the co-signer of course).
Student loan laws have a maximum amount of interest that can be charged and are not allowed to change the payment. They are allowed to redirect all payments to interest until all penalties are paid.
Long story short - 12 & $130 = $1560 in payments made little to no difference...$70 to be exact. Even more annoying, all of the payments post showing principal being paid (and then it's "retracted" to pay for interest the following month). Each month it would show the principal being repaid at $33 and then the following month would be the same exact balance as the month before.
I had to call the help line to figure out why $33 principal reduction never lead to a lower balance....and that's with me paying attention to the details.
I paid it off for my friend and wish nothing but the best for him, but no one should have to deal with the joke of an industry like Student loans.
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Maybe lending should be risk based like other types of lending. 250k for med school, sure. 100k for undergrad in women's studies - no government guarantees for you I'm sure there's enough data already on the RoI of various programs. Seems like there should be a floor / bar based on the RoI for programs to qualify for government backed loans to students.
When did Women's Studies become the Underwater Basket Weaving of the 21st century? Can we go back to a useless major that isn't derogatory?
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(130 * 12 - 70) / 16,000 = 9.375% That's a bit high but doesn't seem totally out of line for an unsecured loan.
I can see your math, but actually it was nothing like that (but I didn't realize the extra info would be interesting to anyone - my fault). I should have given more information, now it sounds a bit misleading, but it's incredibly frustrating that corporations get away with this. It was a 2.5% loan that balloons up to 6% loan after two missed payments, but that's not the confusing part. Interesting loophole, when he w…
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Exactly. It is a poor investment option. So less investments are made, so less students attend, tuition plummets, community colleges spring back to life, people focus on degrees that offer pay, kids exit with no unforgivable debt, on and on. That is bad?
It seems to lead to the sort of situation where the only kind of success a poor kid can hope for in life is the kind where they get into the kinds of degrees that offer pay, whereas privileged rich kids have the luxury of getting to go into "useless" humanities degrees and curate our culture and history and whatnot. Only enabling the leisurely well-to-do to enter the latter kind of career path is generally considered…
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It's not bad. But it doesn't matter how much tuition costs or what degrees offer pay or not. Everyone will study whatever they want, borrow at 1000% interest if necessary or 1% interest for "profitable" degrees, and then dump the dept as soon as they graduate. Or am I missing something? Original question, what's stopping everyone from defaulting right after graduation?
What's to stop people defaulting on other unsecured loans, like credit cards? Some people do, but most people don't. Why? Because defaulting on a loan means a bad credit score and suddenly modern society becomes hard - no mortgage, no car loan, no more credit cards etc.
What happens when a lender decides you're unqualified for a student loan?
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Good question. EG Why doesn’t everyone default on a loan? This is asking “how do loans work”. Typically, a loan with interest is a gamble. You want to get your money back with a return. If you loan money you want to ensure you will get your money back by qualifying the applicant. There is a risk though because they might not pay it back, thus you increase the interest rate according to how qualified the loan is. Good…
How do you propose funding poor people's education then? Keep in mind education is not like a house where you generally pay 20% down and the bank gets to keep your house if you default which they can then resell to recoup some/most of their loan. Poor people have very little money to pay for education and all of the value goes towards their brain which a bank cannot just reposses which is why the government takes own…
Bad news for art history departments and copious law schools, but good news for nursing, aircraft maintenance, computer science, chemical engineering areas.
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And then lenders won't make the loans. That's exactly the point. Student loans were a bad idea in the first place. The ready availability of tuition money has lead to schools raising tuition FAR faster than inflation for the last 20-30 years. Most of that money isn't even going to education.
Except without those loans, poor people will have to grind out low paying jobs trying to save up enough money to go to college and get a higher paying job that requires a degree because they have no money to pay for it. Then, when they finally get through college, they will be years behind the kids of wealthy people and to make matters worse, every year you delay putting off a degree decreases the future value of sai…
When those same poor people are crushed with insurmountable amounts of undefaultable debt that follows them for life, they don't fondly think "well, at least I didn't have to grind out a low paying job back in the day".
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>"Along with healthcare, climate change, the debt," There's an interesting parallel with the cost of healthcare. Increases in costs for both seem to outstrip inflation year over year. And there's lots of of people making lots of money in both sectors. And yet nobody in either sector seems to be able to say exactly why the costs are increasing at the untenable rates they are. The only thing Washington ever seems to do…
There’s a lot wrong with pricing of healthcare versus its costs, but that spending on it increases faster than inflation isn’t abnormal. If you ask people what’s most important for them, health ranks very high, often is #1. So, once you’re rich enough to pay for food, clothing, and living, almost all extra money should go to health, rather than, say, dining at three star restaurants, wearing tailor-made clothing, or…
So is food, water and plumbing, but those costs decreased.