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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

#91

Post by wfo »

KekDemaga wrote: post #85
wfo wrote: post #79

Earlier quoted context omitted.

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…

Resources are not limited at all, we have more resources today in the US than any group has ever had in all of human history. We just choose to allocate them on things that are bad, like bombing hospitals or buying tanks for police departments or jailing millions for nothing or corporate welfare, and not things that are good, like learning or healthcare. In the golden age of prosperity for the US, the highest tax bracket was 94%. We tax nothing and demand nothing because we have been trained to think we deserve nothing; through no fault of your own, you have been tricked into accepting this status quo as 'necessary' when it is anything but, it is explicitly contrived and enforced by wealth to keep wealth in the hands of the wealthy at the expensive of the lives and livelihood of everyone else.

Self-directed learning is great, but if you've ever been a teacher or a student in a genuinely difficult subject you know autodidactism is VERY limited and works for a tiny few on a tiny number of subjects. Autodidacts generally have an oversimplified understanding of a subject they think they know because they lack the social engagement in the topic and deep understanding that comes from engaging with true expertise. They think they know far more than they do, nearly every single time in my experience interacting with them. Which is not bad, as a teacher this is an excellent place to have your students start because you can quickly disabuse them of this notion and they become eager to learn more.

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

#93

Post by gbacon »

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.

Granted. My comment was in the context of aerospace and defense.

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

#94

Post by autotune »

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…

You are entitled to go on Github, contribute to an open source project widely in use, and start gaining experience for free. Nobody is going to say "oh this guy doesn't have a degree so we won't accept their contribution," although if it sucks you might get some good critique, and can add to the resume that way without a degree and looks impressive to prospective employers.

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

#95

Post by ep103 »

cableshaft wrote: post #72
ep103 wrote: post #58

Earlier quoted context omitted.

I meant as in, student loans (whether private or public) have a maximum mandatory monthly repayment rate of, say, 10% of the individual's monthly income. So let's say I took in $1000 before taxes this month. The highest my minimum monthly payment can be on my student loans (total) is $100. That puts pressure back on the university to keep their tuition rates in line with what can actually be repaid, ie, the actual fi…

This puts zero pressure on the actual university to do anything with tuition. The universities aren't the ones loaning the money or counting on your repayments. That's handled by private or government subsidized lenders. It's not a solution at all.

Perhaps we misunderstand each other. The vast majority of people who take out federal financial aid, also take out private loans, because it is very difficult (if even possible anymore) to cover tuition costs with federal loans.

If private loan repayment rates were capped, then private institutions would have a very, very strong incentive not to loan student loan rates larger than a certain amount to students, depending on the major and university. Quite frankly, a student asking for 200k for an english degree at Drexel would be denied. Why? Because Drexel isn't known for its english program. Average salary of a Drexel graduating English major is, let's guestimate, 50k a year for the majority of their lifetime. At 50k a year, at a 10% rate, the bank isn't going to get its funds back for 40 years, before interest. If the average age of death/retirement in this country is in the early 70s, the student will literally die of old age or retire before finishing repaying the loan.

Now students will be unable to attend financial unviable options. The university will understand that if it raises its tuition beyond a certain level, it will be unable to support its english department, because no sane bank would back the loans required to graduate.

Again, the above is a very contrived example with BS numbers. And I'm not suggesting that the above is the way we would want to fix the issue. But it could work, and it certainly puts pressure on the universities.

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

#96

Post by dragonwriter »

mdorazio wrote: post #15
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?

I feel like it might actually be somewhat socially related as well. If people see that their friends/coworkers with large student loans are simply deciding not to pay and nothing horrible is happening to them while at the same time they are living more extravagant lifestyles with the student loan money they're not paying, that's an encouragement to not pay yourself as well. Pair this with the last administration taki…

> Pair this with the last administration taking steps to limit student loan repayment responsibilities

Are you referring to the efforts to correct down on Navient actively and often deceptively steering people into higher-cost paths when better existing legal options were availablel, or it's crackdown on predatory loans by fraudulent institutions? Or something else?

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

#97

Post by mejin »

fhood wrote: post #37
jaclaz wrote: post #17

In a nutshell, as a generic reasoning, say that a few years ago the student loan was about US$ 100,000 and once you got the degree you had - on average - a higher pay of around US$ 10,000 per year (net). You could repay it in 10 years time while living at the same level of your non-graduated friends. Now say that the student loan averages US$ 150,000 and - still on average - the increase in annual wages is US$ 7,500…

Speaking of lessened "value" of degrees, University's need to be held accountable for some of the debt that they are encouraging students to take on. For example, at my public university, STEM students were charges several thousand dollars a year more than humanities students. STEM programs also did their best to discourage enrollment. Meanwhile the anthropology department is literally begging students to stay and ge…

Some vacation companies advertise that people should take loans to go on vacation. Should they be held accountable when it turns out that adding that you went on a cruise to your resume is just as useful as adding that you got a useless degree? In fact some colleges advertise their college as you would advertise a vacation. They use terms like "college experience".

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

#98

Post by [deleted] »

wfo wrote: post #91
KekDemaga wrote: post #85

Earlier quoted context omitted.

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…

Resources are not limited at all, we have more resources today in the US than any group has ever had in all of human history. We just choose to allocate them on things that are bad, like bombing hospitals or buying tanks for police departments or jailing millions for nothing or corporate welfare, and not things that are good, like learning or healthcare. In the golden age of prosperity for the US, the highest tax bra…

[deleted]

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

#99

Post by godelski »

colorint wrote: post #88
godelski wrote: post #65

Earlier quoted context omitted.

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…

Let's take a simple example. I loan you $10k to buy a truck. Not too long after you get it, a meteorite hits you and your truck. Disintegrating both completely. You have no money in the bank, insurance, or anything for me to get my $10k back.

The truck (or student loans) was still paid for. I thought I'd get my money back, but I didn't and that is a risk in loaning money. I can write that off as a loss in my taxes, and recuperate some of the losses, but definitely not all.

So in our student loan case somebody still has to pay off that debt. Either it is by a massive loss to the companies that loaned the money (let's ignore the possibility of them being in the green) or the federal government purchases the loans and writes them off. And if the loan companies are forced to write them off then that is written off as an expense and can greatly change how their taxes are calculated (see Trump). Which the "pays for" is that purchase or tax deduction/rebate. And now the entire tax paying population pays for (which tbh I'm personally okay with). But it still gets paid by somebody. Somebody "loses" (maybe not in the long run, but in our short game).

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

#100

Post by tssva »

brewdad wrote: post #87
alistairSH wrote: post #62

Earlier quoted context omitted.

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 tr…

My state has multiple public universities which regularly appear on top 50 lists and for many in demand fields in the top 5 or 10. The CC systems have agreements with the state public universities guaranteeing admission after 2 years attending CC. There are of course requirements that must be met during the 2 years. They vary from school to school, so you do need to target a specific school while attending CC. These requirements generally involve minimum GPA, credit hours earned and required courses. Since the requirements can vary so greatly between schools many of the CCs have counselors dedicated to working with students to make sure they meet the requirements of the specific 4 year school they would like to attend.

The universities were required to enter these agreements by state law. In an attempt to bring in more out of state tuition dollars some have started to voluntarily enter similar agreements with CC systems in other states.

Do some research and see if there are similar arrangements between CCs and public universities in your state or with out of state universities.

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