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Giving Up Paying Off $186,000 Student Loan Debt

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Re: Giving Up Paying Off $186,000 Student Loan Debt

#71

Post by harryh »

rayiner wrote: post #59
mc-lovin wrote: post #37

Earlier quoted context omitted.

As a consumer your only duty is to obey they law. However, moral duty is relevant when it comes to how society should think about debt. Everyone has things they would like to do if they had more money. Society should not be arranged to give people a free pass just because they want to do something that requires money.

> However, moral duty is relevant when it comes to how society should think about debt. A debt is a contractual obligation and should be treated as such. One should not moralize contractual obligations. E.g. During the housing crisis, there was a lot of moralizing about homeowners walking away from their underwater mortgages. Moralizing about debt in that way is bullshit. When lenders make a loan secured by collatera…

If people thought this way on a large scale interest rates would probably be moderately higher than they are today. It's not clear to me if that would be an improvement on the status quo.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#72

Post by csense »

dlf wrote: post #19
obviouslygreen wrote: post #5

To me, this is the flip side of the "predatory lending" coin: People who did it to themselves. I'm not even sure what the point of the article is supposed to be, if not a warning against financial irresponsibility. This person made mistakes. Yeah, we all do that, and some people's have worse consequences than others, but we're all pretty much stuck with them. In this case, someone went to law school, made some very c…

Public loans are discharged upon death, so there's that. Private loans are not though, and there can still be tax consequences for public loans. I think the most important theme to this article, aside from the individual story of debt and irresponsibility, is that this looks an awful lot like the way the housing bubble came about. Cheap debt that the borrowers are unable to afford long term. The difference here is th…

> Private loans are not though

Really? Who takes responsibility for the deceased person's loan?

Re: Giving Up Paying Off $186,000 Student Loan Debt

#73

Post by dlf »

csense wrote: post #72
dlf wrote: post #19

Earlier quoted context omitted.

Public loans are discharged upon death, so there's that. Private loans are not though, and there can still be tax consequences for public loans. I think the most important theme to this article, aside from the individual story of debt and irresponsibility, is that this looks an awful lot like the way the housing bubble came about. Cheap debt that the borrowers are unable to afford long term. The difference here is th…

> Private loans are not though Really? Who takes responsibility for the deceased person's loan?

The estate, just like with other private debt.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#74

Post by sensibletouches »

gangst wrote: post #64
sensibletouches wrote: post #26

Earlier quoted context omitted.

For realistic people, it's not that big of a deal and speaks more to how people value money and things. However, I'll admit that I wish, as a 22 year-old kid, I was more knowledgeable about all those loan papers I was signing at the time. I'm a doctor who had about $160,000 in student loan debt by the time I finished residency (during which I paid $1,000/month on a $45,000/year salary and lived like a student). After…

Out of curiosity, what brought you to HN? While not riding the tech train professionally, have you considered investing in or starting any products?

When I was in medical school, I taught myself some Python and C++ to help automate some of the data collection and analysis for a cancer research project I was doing. That project was attached to a drug that I now have a minority financial interest in. Been interested in technology since I was a kid. This weekend I was toying with the Keccak hash function code just for fun, even though it has absolutely no relationship to anything useful I could do programatically. The simple pleasures...

I have a financial relationship with Epic Systems, but that's more of a nepotistic thing than it is something I earned. As far as investing in new products, I don't really have an interest at this point. Things are stable and I like it that way.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#75

Post by wonderzombie »

Irregardless wrote: post #9

> She graduated in 1994 with more than $100,000 of debt. Within three years, she had one daughter, a surprise set of twins, and was earning less than $50,000 per year. 3 kids while earning $100k in debt? If that's not the embodiment of America's dire lack of financial and family planning skills, then I don't know what is. > "I’ve stressed to my daughter the importance of not borrowing any money." Maybe she should jus…

I read this as: as much as possible, poor, unfortunate, or unlucky decisions you made in your early 20s should follow you around for the rest of your life (60+ yrs).

By extension, having children is a privilege only for either those who were lucky enough to be born into wealth (i.e. no or minimal debt) or those who were lucky enough to make the correct decisions early in life.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#76

Post by fargolime »

Irregardless wrote: post #9

> She graduated in 1994 with more than $100,000 of debt. Within three years, she had one daughter, a surprise set of twins, and was earning less than $50,000 per year. 3 kids while earning $100k in debt? If that's not the embodiment of America's dire lack of financial and family planning skills, then I don't know what is. > "I’ve stressed to my daughter the importance of not borrowing any money." Maybe she should jus…

I call her 50% responsible. The other half is the lender (gov't-backed entity) squeezing her at relatively high interest. They shouldn't have got so greedy. Now they'll get no more out of her, and of course taxpayers eat the loss.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#77

Post by grecy »

sliverstorm wrote: post #14
steven2012 wrote: post #4

I'm not sure what sort of choice she has, besides not working again. You can't clear student loan debt through bankruptcy, so unless she decides to not work again, I'm not sure what her options are to never pay off the debt. Maybe this is a negotiation tactic with the debtors to pay a fraction of the loan instead?

You can't clear student loan debt through bankruptcy Not entirely true. I'm not sure what her options are to never pay off the debt. She can always just stop paying, and try to call the lender's bluff and force them to go through court to garnish her wages.

> Not entirely true.

Genuine request: Can you please elaborate.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#78

Post by grecy »

rayiner wrote: post #59
mc-lovin wrote: post #37

Earlier quoted context omitted.

As a consumer your only duty is to obey they law. However, moral duty is relevant when it comes to how society should think about debt. Everyone has things they would like to do if they had more money. Society should not be arranged to give people a free pass just because they want to do something that requires money.

> However, moral duty is relevant when it comes to how society should think about debt. A debt is a contractual obligation and should be treated as such. One should not moralize contractual obligations. E.g. During the housing crisis, there was a lot of moralizing about homeowners walking away from their underwater mortgages. Moralizing about debt in that way is bullshit. When lenders make a loan secured by collatera…

>a corporation would not hesitate for a second, on moral grounds, to restructure its debts through bankruptcy, and neither should individuals.

I see what you're saying, but I really dislike that way of thinking, because it's justifying something bad by saying "That's what others are doing"

That's like saying that because BP are spilling oil into the oceans and getting away with it, you shouldn't stop doing it yourself.

The world would be a better place if morals were used in more decisions, not less.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#79

Post by jack-r-abbit »

fargolime wrote: post #76
Irregardless wrote: post #9

> She graduated in 1994 with more than $100,000 of debt. Within three years, she had one daughter, a surprise set of twins, and was earning less than $50,000 per year. 3 kids while earning $100k in debt? If that's not the embodiment of America's dire lack of financial and family planning skills, then I don't know what is. > "I’ve stressed to my daughter the importance of not borrowing any money." Maybe she should jus…

I call her 50% responsible. The other half is the lender (gov't-backed entity) squeezing her at relatively high interest. They shouldn't have got so greedy. Now they'll get no more out of her, and of course taxpayers eat the loss.

Interest rates were high back then. 8% is right on par with average student loan and mortgage loan interest rates of the late 90's. So she was not really getting squeezed. She was agreeing to what most people taking a loan were agreeing to at that time.

Re: Giving Up Paying Off $186,000 Student Loan Debt

#80

Post by rayiner »

grecy wrote: post #78
rayiner wrote: post #59

Earlier quoted context omitted.

> However, moral duty is relevant when it comes to how society should think about debt. A debt is a contractual obligation and should be treated as such. One should not moralize contractual obligations. E.g. During the housing crisis, there was a lot of moralizing about homeowners walking away from their underwater mortgages. Moralizing about debt in that way is bullshit. When lenders make a loan secured by collatera…

> a corporation would not hesitate for a second, on moral grounds, to restructure its debts through bankruptcy, and neither should individuals. I see what you're saying, but I really dislike that way of thinking, because it's justifying something bad by saying "That's what others are doing" That's like saying that because BP are spilling oil into the oceans and getting away with it, you shouldn't stop doing it yourse…

You're begging the question. Spilling oil into the oceans inherently hurts people and the environment in an uncompensated way. Bankruptcy, meanwhile, is just part of the rules of the game, just as much as enforceable debt obligations are part of the rules of the game. Everyone knows, a priori that repayment obligations can be enforced by recourse to the courts, and everyone also knows, a priori, that those obligations can be discharged by those same courts (what the federal court giveth it can taketh away). Because bankruptcy is part of the rules of the game, it's priced into interest rates. When a bank loans you money, it expects you to default with some probability and charges you a premium for that risk. There is nothing immoral about forcing them to eat the consequence if the risk you compensated them for.

It's not a matter of ignoring morality. It's a matter of not ascribing a moral dimension to something that doesn't inherently have one.

In that vein, Google "efficient breach."

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