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

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

#91

Post by godelski »

krisroadruck wrote: post #13

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…

The problem here is that because student loans are so protected this means they don't have to ask what degree the loan is for. To the banks there is little risk here. This is one of the many factors going into it, but that's why banks will hand out so much money and for whatever degree a young person that definitely knows what they want to do and has their whole future planned out.

No risk to lenders.

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

#92

Post by batbomb »

toomanybeersies wrote: post #6

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…

They were effectively "Free" in 2003, about 3%, IIRC. In fact, my (subsidized) loans from 2003-2005 currently have interest rates below 2% due to on time payments and auto withdraw.

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

#93

Post by koga-ninja »

Tuition is very expensive in the U.S.. People take loans because they are banking on the future. They think that Even with debt they will come out ahead.

I'm new on this site, but I assume that most people on this site are computer programmers or are tech savvy enough to get a job that pays a decent wage.

I'm Canadian, but you should also look at the bright side Of US education. There is no Canadian Caltech. If you step out and start a business in America, it is Considered entrepreneurial and a good thing.

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

#94

Post by toomuchtodo »

maxerickson wrote: post #60
aikah wrote: post #50

Earlier quoted context omitted.

> Wasn't most of that money repaid with interest? But how much did it cost to borrow the bailout money at first place ? I'm pretty sure the US government didn't have trillions in cash at that time.

The cost was very low, treasury rates dipped below 1%. https://www.treasury.gov/resource-center/data-chart-center/i...

Because the Federal Reseve printed trillions of dollars out of thin air.

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

#95

Post by ant6n »

School-Cotton wrote: post #51
chime wrote: post #33

Earlier quoted context omitted.

> I'm curious why we treat student loan debt as being special. Because you can no longer declare bankruptcy to erase student debt. > 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 for it, rather than getting a loan, just like there are qualifications for other loans, like auto or mortgages which look at both the value of the asset vs its s…

It's true only the rich could send their kids to art school, but there are lots of things only the rich can do. What makes you define art school in particular as something we should pay for everyone to do, rather than a luxury? Keep in mind that resources are limited -- for a given level of taxation, everything the State spends money on means either cutting something else or increasing the debt (thereby making debt s…

It's better for society if the few university spots in art school are allocated based on aptitude rather than wealth of one's parent.

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

#96

Post by ccostes »

dikdik wrote: post #84
wernercd wrote: post #37

Earlier quoted context omitted.

> 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…

> Where is the collateral? You buy a house, don't pay... you lose the house. And what happens when the bubble bursts and the house is now worth 200k less than what it was originally purchased for? The bank writes it off. So I propose we give everyone a paperclip with their degree and then if they file for bankruptcy they can give the paperclip, which depreciated 50-100k, back to the bank. It works for boomers so I th…

How about giving back the diploma itself?

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

#98

Post by andrewclunn »

caf wrote: post #35
andrewclunn wrote: post #3

Queue the political debate over whether this is a failure to provide secondary education to our citizens, or an artificial inflation in its cost by attempting to do so.

"Cue", like in the theatre.

Yep. Whoops.

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

#99

Post by TuringNYC »

maxerickson wrote: post #60
aikah wrote: post #50

Earlier quoted context omitted.

> Wasn't most of that money repaid with interest? But how much did it cost to borrow the bailout money at first place ? I'm pretty sure the US government didn't have trillions in cash at that time.

The cost was very low, treasury rates dipped below 1%. https://www.treasury.gov/resource-center/data-chart-center/i...

The cost was not low -- rates dipped below 1% because the Fed printed money. But printing money is not free. The common person pays for it by earning less on savings and in the form of inflation, especially retirees who diligently saved through their lives hoping to earn and live off interest in their old age. Every person purchasing a house pays more for low rates because housing prices go up, so do all the associated fees which are on the Notional value (e.g., title insurance.) Pension funds "pay" for it because they cannot easily make money via bonds any longer.

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

#100

Post by TuringNYC »

melling wrote: post #22
paulddraper wrote: post #5

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.

Wasn't most of that money repaid with interest? https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Progra...

TARP is just one of many bailout facilities. There are others by the Fed, for example Quantitative Easing. Another is allowing banks to essentially print money by allowing them to borrow from the discount window and immediately then park the cash into higher-yielding assets.
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