Live data from Hacker News

U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

financeography.com

71–80 of 457 posts

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#71
post #40

The Wall Street bailout was only...what, a trillion? If we bailed out real estate speculators, I wouldn't be surprised if something happened with college grads. Unfortunately. I hate assuming responsibly for monetary decisions other than mine, but judging the trend, that's where we're headed.

So, I am not at all an expert in finance, but there are claims (from Jill Stein for example) that the real cost of the bailout was much, much higher. Here's a Mother Jones article that takes this position: http://www.motherjones.com/politics/2009/12/behind-real-size... Can someone with more knowledge break down whether or not this is accurate?

The numbers used there are the size of the bailout, not the cost.

If I loan you $1000 today and you pay me back $1001 tomorrow, my cost is not $1000. A whole lot of those programs look like that, short term loans or purchases of actual assets or whatnot.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#72
post #25

We don't need student debt reform (and I say that as someone who has a lot of student debt). Student loan debt is a middle/upper middle class problem. 2/3 of millennials don't have a college degree, disproportionately in the lower and lower middle class. The majority have no student debt. Public money spent on college or debt reform would be a regressive benefit to those who are already better off than the median per…

I very much doubted this assertion (Regarding 2/3rds of millennial not having a college degree) given that I'm a millennial who grew up in a relatively rural area where nearly everyone from my high school still either went on to either a technical or 4-year school. The census [1] (Table 1) clearly contradicts my intuition.

I would like to note that while 2/3 of millennials don't have a bachelor's degree, 2/3 of millennials did go to college. The argument, then, that the median person would not benefit, then, is not substantiated given that some college does still afford some cost. I do wonder why 19% of millennials did not complete college to any degree and if less debt would have aided them.

I would like to question a central premise of your comment, which appears to indicate that regressive benefits are less useful than progressive benefits (Please, correct my assertion if you think otherwise, I'm referring to the sentiment of your last two sentences). Given that measures such as these, which would likely allow more students to graduate (I assume a subset of the people who did not finish were for financial reasons) and to better focus on their studies (Working one to two jobs during the school year, like I did, can definitely be a distraction). The investment may be worthwhile in the long run, given that education is linked with earnings (And, by the transitive property, taxes paid). Additionally, it may make careers that are more focused on a "collective good", such as social work and teaching, more tractable (Even though debt forgiveness plans do exist in some situations in these fields).

[1] http://www.census.gov/content/dam/Census/library/publication...

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#73
post #53
post #38

Earlier quoted context omitted.

What does parent wealth have to do with it? I watched this documentary years ago. https://www.youtube.com/watch?v=kC_RYgkkmcM I totally agree with this film. Apparently back in the old days you could work a part time job, and pay for college at night debt free. If the gov keeps handing out loans, then what incentive do schools have to keep their prices low and compete with each other? Oh and then the presidents of so…

> Apparently back in the old days you could work a part time job Even if that was true, it's not the old days anymore. The college I went to is now at 50,000$+ a year with compulsory room and board. Try paying that off with a part-time job and still competing well with your rich peers. No matter what, it's an enormous advantage to not have to work while in college. I know I wouldn't have done as well if I was working…

Tuition at the college I went to was about $8000 a year. I graduated in 2013. What did the extra several of tens of thousands buy you?

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#74
post #7

Earlier quoted context omitted.

Education can switch to a system that won't require any loans.

Can it? What's your plan for implementing this?

Same as other countries which do it. Example: https://en.wikipedia.org/wiki/Education_in_Finland

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#75

I can't begin to express the disgust I have over ever-increasing tuition. From what I can tell, a lot of it goes towards pointless fancy buildings, costs for other activities other than learning and the ever present college textbook scam. There was an interesting episode on Planet Money why college textbooks cost a ton but not high or middle school.

Administrators suck up a huge amount of money these days as well. That's the real scam, considering they only seem to make my life harder.

My institution has the added administerial tax of those offices inhabiting all the nicest buildings on the quad. Really drives home the totem pole of who's most important on campus.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#76

I'm curious why we treat student loan debt as being special. We don't make a huge deal out of people taking on other debt and then being unable to pay for it. I think probably if anything, what we should have are better controls for what types of degrees you are allowed to take a loan out for. If your degree of choice is unlikely to yield the kind of return that will pay for it, then you should be required to save up…

> Why we treat student loan debt debt as being different Where is the collateral? You buy a house, don't pay... you lose the house. You buy an education, don't pay... you... lose the education? No bank is going to give money for degrees without a realistic change of getting paid back. They have no fear of getting paid back because you CANT remove the debt via bankruptcy. I think there needs to be a different approach…

>No bank is going to give money for degrees without a realistic change of getting paid back.

Then they shouldn't. A big part of the problem is that the negative externalities of loans are all but eliminated from the issuer and completely placed on the borrower, only that these borrowers almost always unaware or don't fully appreciate the risk. If we allowed student loans to be shed through bankruptcy then companies would stop giving out $100k loans for art degrees and history degrees. This is the sort of risk/reward calculation that most incoming students aren't equipped to make, but actuaries are great at. Why don't we let them?

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#77

This is so obviously a scam that I don't see how it can hold up. Tuition has gone to sky high levels, and who is getting that money? Not the professors, let's get real. They have probably gotten sweet raises, but nowhere near the growth rate of tuition. The armies of "administrators" are getting huge salaries, but the main point of the whole bubble is that it is a great way to proactively enslave a whole new generati…

They see through it. They just know they have no other option. Educators raise rates because they can, students pay the rates because they have to. It's the same problem we have in healthcare. Until employers start scrutinizing education in terms other than "No degree? No thanks.", then we will continue to have this problem, in my opinion.

> They see through it. They just know they have no other option.

To add to this, administrators know if they don't hire extensively they are likely to be replaced by someone who will. There is no control mechanism. Giving students a small periodic vote in respect of their top administration would go a long way towards ameliorating such corruption.

The "Dictator's Handbook" covers such topics https://www.amazon.com/Dictators-Handbook-Behavior-Almost-Po...

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#78
The thing that worries me most is the delinquency rate. It is at 11%[1]. For comparison the housing market delinquency rate went from 1.6% in 2006 and went to 11.26% in 2010 (height, 2008 went from 3% to 8%[2]). That's where I see the real bubble indicator. I really wonder how much more it can expand. And I don't hear serious talk about what to do WHEN it bursts. Because it is really a matter of when and not if.

[1] https://studentloanhero.com/student-loan-debt-statistics/ [2] https://fred.stlouisfed.org/series/DRSFRMACBS

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#79

Every time I read articles about student loans in the USA, the options are always presented as either the current state, or free tuition. Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand. It means that people who don't do tertiary education, or who do a trade, don't subsidise…

>Why are interest free student loans never floated as an option? I suspect because then no one could make money. In the current system, they certainly make money. In a "free tuition" state, they'd still make money; it'd just come direct from the government rather than being filtered through the population and economy first.

In the United States the vast majority of student loans are from the government.

Re: U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt

#80

Every time I read articles about student loans in the USA, the options are always presented as either the current state, or free tuition. Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand. It means that people who don't do tertiary education, or who do a trade, don't subsidise…

The US has a very complicated system of multiple, income-based, student loan repayment schemes[1]. 20 to 25 years of repayment based on many factors. It is so complicated the government has created a "Repayment Estimator"[2] to help people choose the best plan. At a glance it looks similar to the New Zealand 8%. Seems like most systems evolve to where they are impossible for a human understand. See tax code, social security, Obamacare, etc.

[1] https://studentaid.ed.gov/sa/repay-loans/understand/plans [2] https://studentloans.gov/myDirectLoan/mobile/repayment/repay...

Post reply on HN