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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

#361

Post by planetzero »

mAEStro-paNDa wrote: post #299
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…

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…

"It's our culture that has turned education into some kind of "investment" in future job prospects"

A liberal arts degree should not cost that much compared to the current tuition in the hundreds of thousands of dollars for many of these degrees.

It's an 'investment' because otherwise, it is a luxury for people that have money and don't need to work to pay back their loans.

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

#362

Post by int_19h »

ponsin wrote: post #94
rumanator wrote: post #87

Earlier quoted context omitted.

> Why? Because education is not a luxury service that can be postponed or outright skipped, like lifestyle-tailored tourism, and education costs in the US have become a major societal and economical problem. > In fact, with almost every purchase that involves a loan, the company offering the loan is different than the company offering the product / service. That's a tautology, and entirely misses the point. The point…

"Education" is necessary up to a certain point. In America, up to highschool education is free and for the most part required. Why draw the line at a bachelors degree? Should Masters and PhDs be free and partially required? Based on how I framed the question I assume that you can tell that I draw the line at highschool education. I can however see the argument for raising it to bachelor's. However I would expect the…

A better approach would be to draw the line at the actual skills and knowledge that we believe everybody in the society must possess, and then figure out how to structure the educational system around that - i.e. what does it even mean to "have a degree", what kinds there are, what's the difference between college and trade school etc. It's quite likely that the existing structure is not at all optimal.

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

#363

Post by int_19h »

tehjoker wrote: post #11
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?

Here's the thing... when you do it en mass, it doesn't matter if it's illegal because nobody can do anything to stop you. It's called a strike. Apparently the people that started http://rollingjubilee.org/ were originally working on a student debt strike project. Not sure exactly why they switched to a medical debt project, but it's certainly a worthy one.

From their FAQ:

"Student debt has surpassed $1 trillion partly because it is one of the most protected forms of debt by federal law. Student debtors can rarely discharge their loans in bankruptcy and lenders have rights to garnish wages and social security payments. The vast majority of student loans have these federal guarantees. We cannot buy these loans because there is no secondary market."

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

#364

Post by eli_gottlieb »

sokoloff wrote: post #198
eli_gottlieb wrote: post #127

Earlier quoted context omitted.

So what? If making a loan would be stupid, that loan shouldn't be made.

We could return to a world where only the upper and upper middle class could go to elite colleges. Despite the fact that be more likely to help than hurt my family, I think it’s undesirable societal policy.

> We could return to a world where only the upper and upper middle class could go to elite colleges.

Or we could just socialize college and abolish the distinction between "elite" and "not elite".

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

#365

Post by dillonmckay »

int_19h wrote: post #354
mAEStro-paNDa wrote: post #299

Earlier quoted context omitted.

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…

It's meaningless to talk about what education was "intended" to be, because it varies from society to society, and changes over time. In general, we as a society decide what it is intended to be about. But if you are going to look at history, then why not go all the way to the root of the modern Western academia - where the word itself originates? https://en.wikipedia.org/wiki/Platonic_Academy On one hand, it was ind…

I enjoy learning about new things and I also work full-time, so a system that could accommodate that style of learning would be my choice.

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

#366

Post by BlueTemplar »

rsj_hn wrote: post #356
BlueTemplar wrote: post #352

Earlier quoted context omitted.

IMHO jobs and economy are secondary. University is first and foremost about having educated citizens. And you can't do that in school because you need the freedom of not being forced to go to class and freedom from your parents too. And in a lot of jobs, you don't need much more than some core knowledge, and being independent enough that you can learn on your own - you can't teach a specific job at the university, th…

> IMHO jobs and economy are secondary. University is first and foremost about having educated citizens. And you can't do that in school because you need the freedom of not being forced to go to class and freedom from your parents too. I sympathize with this view. When I was young (and foolish), I was really upset at how university education was being commoditized to teach job skills when really it should (in my opini…

> Why would we make them take out huge loans

You wouldn't, like you weren't paying to do your military service.

> engaging directly with the world via travel or talking to people outside our bubble

A mandatory year mixing all social classes is, by definition, "bubble-popping". In fact this still happens today, when young people are forced to leave their home town they lived all their life in in order to go to the university.

Also, nothing is preventing a university from having some practical workshops... (I know a lot of people that got their truck-driving license during their military service) and a big university should be able to have some much more expensive training machinery than a small school.

P.S.: Oliv(i)er Faron is far from being young and foolish...

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

#367

Post by frockington1 »

godelski wrote: post #331
frockington1 wrote: post #213

Earlier quoted context omitted.

I don't think its unrealistic for an 18 year old to understand debt. Also, how are they being tricked into hundreds of thousands of dollars of ? State schools start around 15k/year and provide bachelors degrees. I've never understood these stories of people graduating (non-PhD/Lawyer)with so much debt

> how are they being tricked into hundreds of thousands of dollars of [debt] > state schools start around 15k/year and provide bachelors degrees. Problem 1: School is expensive 15k*4 = 60k (assuming you do 4 years and not the average time of 6 years). So we're pretty close to $100k of debt. That is just in-state tuition! But that's not the total cost of school. Berkeley[0] estimates about $30k/yr for a student. So th…

Wow, I didn't realize how messed up the West Coast is. In the midwest we can go to state school for ~15k/year total cost and get a job pretty much anywhere as long as the gpa is ~3.2. CS students I graduated wit are in everything from Big Tech to startups, some even branched out into biotech. I always assumed a West Coast school mad it even easier to land a job

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

#368

Post by prostoalex »

mAEStro-paNDa wrote: post #299
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…

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…

Learning for the sake of learning can happen at home with access to public library, YouTube, GreatCourses, Coursera, etc.

The argument needs to address why learning for the sake of learning at a specific physical location with the price ticket of $40k'ish a year is drastically better.

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

#369

Post by lxm »

adventskalender wrote: post #112
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…

Why wouldn't it be the responsibility of the students to not take out loans for stupid degrees? And also the responsibility of the banks for giving out the loans only for useful studies? I don't see any party here that needs rescuing by the government.

> I don't see any party here that needs rescuing by the government.

Contrary to public perception, there's no robust investment market for student debt. US government ends up purchasing most of it through Treasury. In theory it's a great deal, as it gets to borrow at low Treasury rates and originate at higher rates.

I don't have a link to the original source, but "In September 2018, the U.S. Treasury Department revealed in its annual report that student loans account for 36.8% of all U.S. government assets." https://www.investopedia.com/articles/personal-finance/08121...

Edit: here's a more updated analysis of the Treasury disclosures, which puts the figure at 51.2% as of September 2019 https://www.advisorperspectives.com/dshort/commentaries/2019...

Devaluing those assets (which Treasury marks to market) would significantly dampen (if not destroy) US government's borrowing ability as well as make some government entitlement programs [at least temporarily] insolvent.

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

#370

Post by rsj_hn »

BlueTemplar wrote: post #366
rsj_hn wrote: post #356

Earlier quoted context omitted.

> IMHO jobs and economy are secondary. University is first and foremost about having educated citizens. And you can't do that in school because you need the freedom of not being forced to go to class and freedom from your parents too. I sympathize with this view. When I was young (and foolish), I was really upset at how university education was being commoditized to teach job skills when really it should (in my opini…

> Why would we make them take out huge loans You wouldn't, like you weren't paying to do your military service. > engaging directly with the world via travel or talking to people outside our bubble A mandatory year mixing all social classes is, by definition, "bubble-popping". In fact this still happens today, when young people are forced to leave their home town they lived all their life in in order to go to the uni…

> You wouldn't, like you weren't paying to do your military service.

Who do you think pays for military service if not the people? Martians? What is the difference between generation X paying for generation X+1's education, spending g% more than what was paid for their own education, and generation X taking out a loan to pay for their education at a rate of r? The only thing that matters is whether r > g, the growth rate of the price of education. If r > g, then a direct transfer is slightly more efficient. If r > engaging directly with the world via travel or talking to people outside our bubble A mandatory year mixing all social classes is, by definition, "bubble-popping".

Ahh, yes, those isolated campuses with safe spaces and psychological violence counselors -- a true bubble popping experience.

P.S.

You can also be old and foolish.

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