441–450 of 771 posts
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> Now I read that Wall Street is creating CDO's based on these loans The official term is SLABS: Student Loan Asset Backed Securities. Here's a recent paper on the subject. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3631953
Have we learned...nothing?
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In other words, the government has become a predatory lender with some intermediaries.
Which I find really weird, they take this stance against education but businesses don’t have to deal with such predatory loans - in fact govt loans for businesses tend to have low interest rates, or forgiven like the PPP loans. Why do we take anti-individual stances, but pro-business stances? Is that a byproduct of capitalism, or am I misreading the world?
I claim that the blame here really rests on big government for creating this fucked up system, not the businesses that work within it. By the way, I blame the government for the PPP fiasco too.
None of this is particularly pro-business, but a lot of people are apologists for big government and need to be disabused of that notion.
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I hope to see the day where interest bearing loans are recognized by the rest of the world as the evil they are. Muslims and Jews know this fact quite well.
Serious question: what would incentive anyone to lend to people who have any risk at all (i.e. everyone)?
Almost impossible to imagine given the current state of the economy where every possible thing you can imagine has been commodified.
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Now I read that Wall Street is creating CDO's based on these loans, like they (continue to) do on mortgages. Some people die "early" without paying back these loans, and sometimes, they will owe more than they took out. Given the mounting problems with the numbers here, it seems a whole generation of people in the middle of this bubble are going to go to the grave while still owing on these loans. What happens to the…
Seems wrong to influence your son's decision based on your financial situation rather than his desires/passions. Of course if he's naturally interested in the trades then sure.
If you don't do a modicum of Research before you take on tens or hundreds of thousands in debt to invest in something, that's on you and you alone.
If people were not bailed out and subsidized we would not have these issues of this magnitude.
I am beginning to believe that the root cause of tuition costs in the US exceeding inflation is based much more on FOMO on the benefits of college education rather than federal government guarantees on student loans. My claim is that buyers (parents+children) of college degrees are maybe not behaving rationally with respect to cost. High-cost schools position themselves as offering a "better" outcome or opportunity t…
The advantage of the larger school in my experience, is that its like going to a dozen small schools at once. Plenty of people I know where able to transfer from one good program to another in a completely opposite field once they learned what they actually liked (usually quite different than what you imagined as a highscooler especially if your parents have no concept of the field), because the school was large enou…
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I mean, you can't get blood out of a turnip. If the borrower has no money to pay, they aren't going to pay, bankruptcy or not.
Since there is pretty much no social safety net, people are probably going to find some sort of work even if they have a lot of student loan debt. And, the debt servicer can garnish those wages. You are essentially selling yourself into slavery if you take a student loan! (And the reasoning is so weird to me; I went to a state school and tuition was $750/semester. Why are people paying more unless they are extremely…
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Right but see the problem is how does a really smart poor person get an education so they can become a really smart rich person?
They study in a field which has a high likelihood of loan repayment, or study at a less expensive school. If a really smart poor person wants to become a really smart rich person by pursuing a degree in film studies, it's reasonable (in my opinion) for a bank to say "borrowers whose only education is a bachelors in film studies tend to have trouble paying back loans, so we won't lend you very much". If that very smar…
And also if they did do that, we get back to other problem which is that schools will only offer programs that lead to high paychecks making them just job training and not places of overall learning.
Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…
Worse than just "backed by the federal government," the loans are basically protected by the government. Being one of the small list of things you can't bankrupt out of, the risk in giving out the loans has been fully pulled from the lenders. It is frustrating to hear the discourse over the inappropriate students that are taking on too much debt, all the while ignoring the lenders that are taking on too much risk. At…
AFAIK virtually every financial institution has been pulled from student loans.
The U.S. government is now the only major lender.
Makes sense when you have student loans backed by the federal government. If an 18 year old with no money and no credit history gets accepted into a qualifying university, she will be able to receive a loan since the bank knows that the government will protect their investment if she fails to pay them back. So now young people have this easy access to credit, and universities can greatly increase tuition and fees wit…
Purely out of interest: what do they do with all that money? Does it increase the quality of education and/or research?
There’s a growth in admin [0] that I think is the proliferation of the most bullshit of bullshit jobs. It’s weird that I think the issue is much worse by basically funding all these admin positions that pay more than actual instructors and researchers yet I’m not sure what they really do.
I’d like to see universities advertise low admin:student and admin:instructor as measured of quality.
[0] https://yaledailynews.com/blog/2021/11/10/reluctance-on-the-...