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More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

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Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#81

Post by wfo »

Overtonwindow wrote: post #8

Is it possible that some graduates are realizing that for all that money, their education was not what they were promised, and a bit of resentment has led them to make the decision not to pay?

It's possible Betsy Devoss has something to do with it; students always knew they were giving an incomprehensible amount of money to monstrous vultures by paying back their loans, but this time it's impossible to ignore that fact with her at the head of dept -- millennials loathe her.

Perhaps more and more students are simply refusing to pay, taking the free college they should have been given by economic force.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#82

Post by ghaff »

bpicolo wrote: post #67
gbacon wrote: post #28

Earlier quoted context omitted.

The key is a marketable college degree. In fields such as aerospace and defense where the credential is the key to open the door, get the credential as cheaply as possible. Do a couple of years at a community college and then finish at a state school. Name-brand degrees bring no extra value. Oh yeah, and get your master’s while you’re still in the zone. The idea that trade school somehow is lower tier or oppressive i…

There are plenty of fields where name-brand degrees mean a crap ton starting out, e.g. finance, law.

In fact, the conventional wisdom these days seems increasingly to be that you should go to a top-tier law school or just not bother. And that seems to be becoming fairly common advice for MBAs as well, although that's not as cut and tried because MBAs cover a wider range of programs than law degrees do.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#83

Post by brewdad »

valj wrote: post #24

From the article: "Department of Education ticked up to 18.8 percent as of June 30, up from 18.6 percent the same time last year, new federal data show." There's your answer - 0.2pp is totally insubstantial, which makes the title borderline clickbait. The economy doesn't uniformly grow or distribute wealth, so a change so small could just be from the distribution of college leavers in a particular year being overinde…

I wouldn't say it's totally insubstantial. The economy is growing at some of the fastest rates we've seen since the beginning of the 21st Century. At the same time, delinquency rates are continuing to rise. If young people are still falling behind when times are "good" what happens to them during the next recession?

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#84

Post by Bjartr »

AutomationTool wrote: post #56

This one is easy. People are buying things that they can't afford. Throwing it into a loan and then partying their way through school. Since that worked out so well, then they do that with their car, house, furniture, cell phones, and car rims. You aren't entitled to 100,000 dollar education. You aren't entitled to go down to Mexico every spring break. you aren't entitled to eat pizza and hit the bar every weekend. Y…

What fraction of the 18.8% delinquent loans are held by people like those your describe? If you can't answer that you're only saying these things to disparage others to make yourself feel superior. You might as well have been complaining about avocado toast.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#85

Post by KekDemaga »

wfo wrote: post #79
KekDemaga wrote: post #71

Earlier quoted context omitted.

Not at all, I'm just pointing out that many jobs that only required a high school degree now require a college degree without the job fundamentally changing all that much. More people attending college would likely worsen that trend to the point where "College 2" (whatever it would be called) would then be required to stand out.

And we would have educated our citizenry and let millions of people learn about the world and the expanses of human knowledge instead of just the rich for nothing, since those citizens wouldn't be able to generate extra wealth for their bosses. What a nightmare.

Your view comes from a very simplistic model of the world without an understanding of the limited resources we are working with. The internet empowered individuals to engage in self directed learning that was impossible a generation ago, virtually anything you wish to know or understand is a google search away. If you personally require someone in a sweater vest to stand in front of you and speak in order to learn it is not my job to subsidise that activity or his salary.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#86

Post by cableshaft »

bpicolo wrote: post #67
gbacon wrote: post #28

Earlier quoted context omitted.

The key is a marketable college degree. In fields such as aerospace and defense where the credential is the key to open the door, get the credential as cheaply as possible. Do a couple of years at a community college and then finish at a state school. Name-brand degrees bring no extra value. Oh yeah, and get your master’s while you’re still in the zone. The idea that trade school somehow is lower tier or oppressive i…

There are plenty of fields where name-brand degrees mean a crap ton starting out, e.g. finance, law.

Law is not a guaranteed payout. The competition is incredible, and if you don't get into those firms, there's a big drop off in what you're likely getting paid. $30k a year jobs for those that didn't make it into the prestigious firms (or start their own practice) is fairly common.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#87

Post by brewdad »

alistairSH wrote: post #62
H1Supreme wrote: post #14

Earlier quoted context omitted.

The amount of people I know with degrees who work in retail, or something completely unrelated is staggering. From my observations, I'd guess "underemployment" is the biggest contributor to the late payments. This is just another example of why I urge any young people I know (high school age) to think long and hard before choosing to go to a 4 year college. When I graduated high school in 99', we were primed to think…

think long and hard before choosing to go to a 4 year college A college degree is still worth a considerable bump in lifetime earnings.[1] Perhaps you should revise your advice to "think long and hard before choosing to go to an expensive 4 year college" or "consider spending the first two years of college at a local community college." 1 - https://trends.collegeboard.org/education-pays/figures-table...

One question I have regarding spending the first 2 years in a CC is how does this impact your ability to get admitted to a 4-year school later on, particularly a top-tier (say top 50) university? Are these schools less likely to admit students who will only spend a couple of years there vs students entering straight out of high school, all other things being equal? I don't know the answer, but given my son is on a track to gain admission to a top university, I would hate to give advice that could hurt him in the long run.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#88

Post by colorint »

godelski wrote: post #65
tbirrell wrote: post #36

Serious question: Who loses out if all the student debt got canceled? Not the colleges, I assume, because they already got the tuition. And not the students. So would it be loan companies and the US government? Would such an action be catastrophic?

Someone still has to pay the debt. Though many times the (defaulted) debt can be bought for pretty cheap. It's complicated, but in the end somebody pays it.

Debt is an asset to the lender, and in case of default (and no hope of renegotiation) the asset is written off. Whether this is "someone paying it" is like asking whether the owner "pays for" a truck that's struck by a meteorite and totally destroyed. Your total claims on stuff (i.e., capital) have gone down, and you might even journal the destruction of the truck as an "expense" (which is, itself, nothing more than a change in capital), but I'd still be wary of saying it's "paid for." Obviously this does mean that having enough assets get struck by enough meteorites can throw you into insolvency.

(In this thought experiment we're ignoring insurance. Or you could imagine an uninsured asset being destroyed.)

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#89

Post by ghostbrainalpha »

AutomationTool wrote: post #56

This one is easy. People are buying things that they can't afford. Throwing it into a loan and then partying their way through school. Since that worked out so well, then they do that with their car, house, furniture, cell phones, and car rims. You aren't entitled to 100,000 dollar education. You aren't entitled to go down to Mexico every spring break. you aren't entitled to eat pizza and hit the bar every weekend. Y…

Everyone knows deep down you are right.

Just like we know diamonds have no real value, and you shouldn't go into debt to buy an engagement ring or have a big wedding.

But try offering your fiance a $5,000 bond instead of a fancy ring. It doesn't go well.

Social pressure is a real thing, and colleges are taking advantage of all of us by setting up expectations for normal that we just can't afford.

This is why I never really got behind Bernie's free college plan. We don't need the government to help make college free. We need to change why these costs are getting so out of control in the first place.

How are people spending over 50k in the first two years of undergrad? Basically wherever you go the core requirements that first year or two are the same before you pick your major. We need to be leveraging the best teachers and online classes to bring these costs down, especially for your basic "Philosophy 101" class that you are just taking to test the waters.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#90

Post by user68858788 »

AutomationTool wrote: post #56

This one is easy. People are buying things that they can't afford. Throwing it into a loan and then partying their way through school. Since that worked out so well, then they do that with their car, house, furniture, cell phones, and car rims. You aren't entitled to 100,000 dollar education. You aren't entitled to go down to Mexico every spring break. you aren't entitled to eat pizza and hit the bar every weekend. Y…

This line of thinking doesn't make sense. The zero-sympathy-no-exceptions attitude comes from lacking context of the problem, so hopefully I can help.

> You aren't entitled...

While the person you describe probably exists, it's not all 18% of students struggling with payments. I'd just like to say that being aggressive helps nobody.

> Instate tuition at VA Tech is 13k for the year, if you live in Texas, UT is 4-5k a semester. While not cheap, this is far from unaffordable.

Are the people born away from the coasts out of luck then? There are dozens states in the Midwest with cheap tuition, but after graduation there aren't any jobs waiting.

The quality of education is usually poor when professors teach subjects for fields that they've never been a part of.

Students know these things, and feel it's worth taking on debt to get a better education and live somewhere with opportunities.

> Go learn a trade, get scholarships, join the military, work for a company that will pay for your education, start your own business.

I'm assuming you work in tech. Would your employer hire someone in their 30's with no relevant work history? I've worked at two of the large tech companies and two smaller companies, and I know they wouldn't consider it.

Apprenticeships are disappearing - low skill work gets automated now. Medium skill jobs are being outsourced or given to contractors. What you're suggesting isn't realistic.

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