Student Loan Blues

[Stargrunt6]

I'm not sure how this crisis should be handled. On the one hand, caveat emptor, the market doesn't lie when you can't find a job with your sociology degree. And now, the taxpayers shouldn't foot the bill.

 

 

On the other, schools and parents were really putting the onus on kids to go to college for some reasons that were not well thought out. Not sure young adults should have to pay for other people pressuring them at an impressionable age. On top of that, the education industry really squeezed the udders of Sallie Mae et al with everything they got.

 

Here's some latest news regarding the shenanigans:

 

https://www.forbes.com/sites/zackfriedman/2020/01/16/house-overturns-student-loan-forgiveness-rule/amp/

[Ivanhoe]

Unfortunately, since the taxpayers voted into DC a bunch of folks who are beholden to Big Education, they are stuck with the bill.

 

OTOH, we have limits on how much money a taxpayer can shelter from federal income tax when contributing to an IRA account, so why not federal limits on how much the federal government will guarantee per annum per student on education loans? Lets say $10k/year.

 

I would like to see a federal law which requires all educational institutions to present a cost/benefit analysis. For Studies majors, it would go like this;

 

"Here is your projected debt load after 5 years at Commie U. Here is your projected income as a Studies graduate, up to here."

 

"What's that big X?"

 

"Your first bankruptcy. Your income drops after that because your credit score dropped below 400. Employers don't like that. "

 

"The balance doesn't go to zero by the bottom of the page. When will I have it paid off?"

 

"You won't. Your grandchildren will."

[Jeff]

No such thing as free education and no such thing as "forgiving" loans, it's just a transfer of debt from those who willingly accepted it to those who didn't and will not benefit from it. I do think higher ed places should be held liable for the debts their students incurred and for which they have zero chance of earning enough to ever pay it back.

[Burncycle360]

I firmly believe if you take out a loan you should pay it back, and generally disagree with bailouts (including the corporate bailouts) that serve only as short term band aids to something that amounts to an inevitable consequence of failed policy.

So it's weird that I'm about to say this, and I know it will be vehemently opposed, but just once, and only as part of a comprehensive reform, I'd be in favor of forgiving current outstanding federal student loans, and think it would be a net positive for the country and economy.

1. The primary reason is because the US Government never should have subsidized student loans to begin with. The very situation we find ourselves was of our own creation and it was incentivized to happen, and they should have had the foresight to see it. It was a failed experiment and should serve as a warning to future generations of legislatures and presidents that good intentions can yield serious downstream consequences.

2. Because the Federal Govt holds the loan, it's one of the very few that can be forgiven and written off without affecting the overall S&P credit rating of the United States unlike almost any other debt. This only applies to Federal student loans, not private loans.

3. While people just out of high school are adults and should know better, they are unquestionably financially inexperienced and the bulk of the bell curve clearly does not. This has highlighted some glaring flaws in our attempts to prepare them as best we can, and we need to better educate them on fiscal responsibility, and warn them that they can be straddled with debt their entire lives and that it may simply not be their best option, so they can make a fully informed decision. I graduated high school in 2001 -- in the United States, throughout high school, it was drilled into everyone that if you want to be successful, you must go to college. They then threw up statistics that said university graduates with 4 year degrees earned on average over a million dollars more over their lifetime than non graduates. Trade jobs were implied to be a safety or something you do if you couldn't hack it. Then they turned around and said they will help pay for it. So who wouldn't go? They weren't being disingenuous technically, and I'm sure the educators were coming from a caring place and wanted everyone to succeed, but I don't think anyone involved knew where things were headed at the time. We were all down in the weeds and unable to see that far ahead, that being said, the US Government was at the helm of the ship and with that big picture perspective sure as hell should have seen it coming. Chalk it up to irresponsible fiscal policy, we know better now and should never let that happen again.

4. Student loans are the only type of loan that cannot be written down during personal bankruptcy. Why was this done? Because the loans were tantamount to subprime mortgages, these young adults would never otherwise qualify so the Federal Government had to back them and guarantee the loans. This is what led to the near predatory student loan extravaganza along with university cash grabs. It's capitalism baby, and frankly they'd be stupid not to take advantage of stupid Government policy, and the Government was stupid not to see that coming. Let's put it in perspective: This policy meant that lenders would give an 18 year old adult fresh out of high school $200,000 to go to college, but not $20,000 to start a business or even a lower risk franchise.

5. Finally, while non repayment will affect credit scores, there is no debtors prison and since there's no road to redemption even through bankruptcy, most of those students upon discovering they can't find a job in underwater poetry recitation will simply be resigned to the fact that they will never pay it off, and since they're paycheck to paycheck in their safety job at McDonald many simply perpetually defer the loan, default, or pay back the very minimum so they can afford toilet paper. The US Government (and therefore taxpayers) will likely never see that principle again, much less any interest on it and we're talking on the order of magnitude of a trillion dollars.

Now that the students have failed to find a job have a taste of the real world, are older and know a little better, they probably wouldn't have chosen the same path had they do it all over again. It's part of growth. However, now they're a bad credit risk, so they'll find it difficult to go back to school with this new perspective and change their course. They mumble about boomers creating the system they perceive to be screwing over their future and vote Democrat, because despite having ulterior motives, the Democrat Party at least uses rhetoric to pander to this mentality and pretend as if they're outraged too and weren't the cause of all this. There's a saying that goes something like "If you're not liberal at 25 you have no heart, if you're not conservative at 35 you have no brain" the point being, thriving will often breed conservative thinking while failure to thrive often breeds victim mentality and contempt for the "system" as being the cause of you being trapped, even if it was a result of your own poor decisions. Even if they're right, the conservatives are doing themselves no favors by smugly saying this is what you deserve and you should have known better, because they're unwittingly helping the Democrats get people on, and keep them dependent on, social programs because the likelihood of them getting a job sufficient to live on AND get out of perpetual debt is now near zero. You may take comfort in being right, but that's worth exactly zero dollars if you're cutting off your nose to spite your face and helping your opponent achieve their aims.

Forgiving these loans could be a reset button for many people, who will go on to be successful when they otherwise wouldn't have and even those who are beyond return will still be spending whatever they would have spent on student loans back into the economy either way. The hole in the ozone layer will eventually heal.

____

That being said, forgiving student loans while doing nothing else to reform what caused this situation in the first place would among the worst possible routes that could be taken. It needs to be approached on multiple fronts, starting with systemic education to high school students that a forgiveness plan like this (and the corporate bailout) will never happen again. They need to be given the whole picture in high school, that you can be very successful in trades (versus going into debt), and crucially this must also be augmented by partnering with local businesses and giving students the opportunity to shadow / intern / apprentice at trades they may be interested in over the summer or even as an elective during the school year. They will find that some things they thought they like they really don't, and they may discover a passion unexpectedly and go that route. Finance classes need to be less theoretical and more hands on and practical so that they're better armed to think longer term and less about instant gratification. It should be harder to get into universities, so they'll stop offering stupid degrees that don't offer real prospects, they'll have to become less expensive and cut the fat so tuition drops -- but along with that, it's important to make it clear that there IS a path for anyone who wants to work hard and make it happen can do so, no matter if you're middle class or a poor kid from the inner cities.

Education is evolving, and thanks to the internet things like Khan Academy and MIT Open Courseware are making it possible for just about anyone with internet access to get a university level of education -- INCLUDING the benefit of virtually attending lectures from the most prestigious of universities, even if they're a poor kid in inner city Chicago. The resources are available and expanding. The net effect is that while the cost of getting an ivy league degree is higher than ever (even adjusted for inflation), the cost of getting an ivy league education has never been lower or more accessible than it is today. The degree itself is becoming more and more irrelevant now that they've been passed out like candy, what you can DO is what's important. This is starting to show in companies like SpaceX and Tesla that are results driven, and the team is small so your degree doesn't matter, what you can do does. What this amounts to is that if you work hard, you can get the knowledge even if you can't get the paper. Over time, Open Courseware like programs will inevitably expand to liberal arts courses, which means that people interested in them can explore it in their own time without having to bet $30,000+ in student loans that they can get a job in the field.

While it's contrary to fiscal conservatism, if the Republicans were smart, they'd jump on it before the Dems do in order to snatch up a significant portion of the slightly left of center and fence sitter votes that would otherwise go to Dems. They would have to carefully, carefully caveat the action as a one time thing to ameliorate the anger that will come from conservatives, but that just takes a charismatic figure in the right place at the right time and a lot of spinning the rhetoric, but the benefit would be palpable relief of almost two entire generations of grateful people, and a surge in short and mid term economic growth and spending. If the Republicans also federally legalized Marijuana at the last minute, they'd snag enough votes to secure their future, along with a new revenue stream through taxation as well as a big part of the prison population back in the potential workforce. Longer term effects would be fewer single parent households (due to minor drug infractions) which also sets the stage for better outcomes for a significant portion of the population, especially if welfare was reformed not to incentivize single parent households.

A pressure valve tripped, and a country polarized will suddenly become much less divisive, and it would set back the efforts of the radical left and their social democratic utopia decades.

Edited January 18, 2020 by Burncycle360

[MiloMorai]

 

 

I graduated high school in 2001 -- in the United States, throughout high school, it was drilled into everyone that if you want to be successful, you must go to college. They then threw up statistics that said university graduates with 4 year degrees earned on average over a million dollars more over their lifetime than non graduates.

​

That is the same amount, $1M, I saw on posters 30-40 years before.

[EchoFiveMike]

I fail to see why the taxpayers should be holding the bag. This debt isn't special, let the students declare bankruptcy, and the "schools" can get left holding the bag. I know one of President Obama's scams was transferring educational debt to the taxpayers, so just adopt the shitlibs tactics and seize the money back from the schools.

 

The education system is the core of the shitlib powerbase, don't be scared to crush it. They don't follow any rules, stop giving the enemy a free pass. Every time you see some antifa activist or some filthy lawyer wrecking America, they are invariably tied to the education system in some way, shape or form. S/F...Ken M

[Stargrunt6]

pop pop*

Edited January 18, 2020 by Stargrunt6

[Stargrunt6]

 

While it's contrary to fiscal conservatism, if the Republicans were smart, they'd jump on it before the Dems do in order to snatch up a significant portion of the slightly left of center and fence sitter votes that would otherwise go to Dems. They would have to carefully, carefully caveat the action as a one time thing to ameliorate the anger that will come from conservatives, but that just takes a charismatic figure in the right place at the right time and a lot of spinning the rhetoric, but the benefit would be palpable relief of almost two entire generations of grateful people, and a surge in short and mid term economic growth and spending. If the Republicans also federally legalized Marijuana at the last minute, they'd snag enough votes to secure their future, along with a new revenue stream through taxation as well as a big part of the prison population back in the potential workforce. Longer term effects would be fewer single parent households (due to minor drug infractions) which also sets the stage for better outcomes for a significant portion of the population, especially if welfare was reformed not to incentivize single parent households.

 

A pressure valve tripped, and a country polarized will suddenly become much less divisive, and it would set back the efforts of the radical left and their social democratic utopia decades.

 

 

"We must get our young adults working again. Big Ed must pay for their irresponsibility and the fiscal damage they have done to their graduates as well as the public. We also cannot afford to provide loans for undocumented students since this would be less money to assist with the debt burden of current graduates."

 

So the reforms would be like you say, loans only given to most cost effective of majors, graduates can re-enroll at the school's expense to get a degree in something that pays, or roll-over at another uni or community college to do the same. The school, if it's smart, will work itself out as far as personnel is concerned, ie, profs who teach majors that don't bring in the cash are out or their pay is reduced. Make loan repayments tax deductible, not just interest.

[LT Ducky]

OK - so we forgive college loan debt ..... what about my niece? Graduated last spring from Rensselaer Polytechnic Institute with an honors degree in Computer Engineering, had a job waiting for her that was offered her when she interned there the summer before. Salary just shy of 6 figures with a 15K sign-on bonus ( job would have been 150K + on the West Coast). If you think Im bragging about her, I am.

 

Due to good planning by her parents and scholarships she has no debt; zero, zip, nada!!

 

So, should she maybe get a refund on the money already paid if those with debt have it forgiven???

 

One more thing - she has 3 younger sisters still in college, they too will have no debt when they graduate unless they choose advanced degrees over their Bachelors.

 

These folks arent rich, they planned ahead and worked hard.

[Ivanhoe]

No such thing as free education and no such thing as "forgiving" loans, it's just a transfer of debt from those who willingly accepted it to those who didn't and will not benefit from it. I do think higher ed places should be held liable for the debts their students incurred and for which they have zero chance of earning enough to ever pay it back.

 

Lets not let public secondary education off the hook. They are the first ones telling 14 year olds that a degree in Grievance Studies is the perfect reason to go $200k in debt.

[DKTanker]

How old is old enough that we can demand somebody should be held liable for the debt they voluntarily accrued? Whatever that age, that must be the minimum age for enlistment or draft into the military services. I submit that age should be 26 years, the age children can remain on mommy and daddy's insurance plans. It is statutory, 26 years is the age the federal government says that people are finally old enough to make choices and take care of themselves. I submit that all activities we reserve to adults: driving, alcohol consumption, military service, debt accrual, and higher education, should not be allowed until one achieves the age of 26 years.

[DKTanker]

 

No such thing as free education and no such thing as "forgiving" loans, it's just a transfer of debt from those who willingly accepted it to those who didn't and will not benefit from it. I do think higher ed places should be held liable for the debts their students incurred and for which they have zero chance of earning enough to ever pay it back.

 

Lets not let public secondary education off the hook. They are the first ones telling 14 year olds that a degree in Grievance Studies is the perfect reason to go $200k in debt.

 

What came first, the chicken or the egg? In this case what came first was Leftists demanding that cheap money be distributed, without question, to those desiring a secondary education. Centers of higher learning, seeing a windfall, rationally did everything they could to reap as much mullah as possible.

 

Extending LT Ducky's question. Why shouldn't everybody receive equal compensation regardless of their education level? In other words, if we're going to forgive loans of X amount of money for those that did go to school and for whatever reason can't repay those debts, why aren't we discussing a comparable windfall for those that accrued no debt, whether or not they attended a secondary school?

[Nobu]

We should be, as well as the question of a comparable windfall for those who took second jobs or otherwise worked harder than others to pay off their student loan debt.

 

That windfall, for those less in need of it, does not have to be monetary.

[Ssnake]

OK - so we forgive college loan debt ..... what about my niece? Graduated last spring from Rensselaer Polytechnic Institute with an honors degree in Computer Engineering, ...

So, should she maybe get a refund on the money already paid if those with debt have it forgiven???

 

Look at it this way: She'll still be a Computer Engineer with no debt, and the indebted Arts Majors will still be Arts Majors.

 

 

One way or the other, the student loan crisis can't continue much longer. Unsustainable trends will break, that much is a given. The question is how they will break. Any kind of revolution has winners, and losers. Usually the taxpayer loses.

[rmgill]

I'm not sure how this crisis should be handled. On the one hand, caveat emptor, the market doesn't lie when you can't find a job with your sociology degree. And now, the taxpayers shouldn't foot the bill.

 

 

On the other, schools and parents were really putting the onus on kids to go to college for some reasons that were not well thought out. Not sure young adults should have to pay for other people pressuring them at an impressionable age. On top of that, the education industry really squeezed the udders of Sallie Mae et al with everything they got.

 

After freshman year, they were adults. They got the loans, they pay what they owe. What needs to happen is the federal guarantees need to stop. And the schools need to be yanked up by the chain and brought to heel.

[Colin]

OK - so we forgive college loan debt ..... what about my niece? Graduated last spring from Rensselaer Polytechnic Institute with an honors degree in Computer Engineering, had a job waiting for her that was offered her when she interned there the summer before. Salary just shy of 6 figures with a 15K sign-on bonus ( job would have been 150K + on the West Coast). If you think Im bragging about her, I am.

 

Due to good planning by her parents and scholarships she has no debt; zero, zip, nada!!

 

So, should she maybe get a refund on the money already paid if those with debt have it forgiven???

 

One more thing - she has 3 younger sisters still in college, they too will have no debt when they graduate unless they choose advanced degrees over their Bachelors.

 

These folks arent rich, they planned ahead and worked hard.

You be racist and showing off your "privilege" Planning your future is Whitey/Asian privilege oppression of the masses

[Adam_S]

 

OK - so we forgive college loan debt ..... what about my niece? Graduated last spring from Rensselaer Polytechnic Institute with an honors degree in Computer Engineering, ...

So, should she maybe get a refund on the money already paid if those with debt have it forgiven???

 

Look at it this way: She'll still be a Computer Engineer with no debt, and the indebted Arts Majors will still be Arts Majors.

 

 

One way or the other, the student loan crisis can't continue much longer. Unsustainable trends will break, that much is a given. The question is how they will break. Any kind of revolution has winners, and losers. Usually the taxpayer loses.

 

The likely outcome in the end will be that fewer people will want to go to university, which is probably not a bad thing. Of course it's also likely that the massive ponzi scheme that higher education has become will also seek a bailout from the government.

 

When the UK government tried selling student loan debt on the money markets they got about 50p in the pound, which should say something about how much of this is likely to ever get repaid.

 

You could also make a case for stopping short out outright debt forgiveness but restructuring student loan debt so that repayments are capped at a certain % of income and the loan companies and debt collectors are limited in the amount of fees and interest they're allowed to pile up onto the original debt.

Edited January 19, 2020 by Adam_S

[Rick]

Why treat student loans different than other types of loans? Rhetorical I know, because other debtors are not big-time Democratic Party groupies.

[Ssnake]

Nobody would give someone without a job a considerable loan, unless there were some guarantees in the first place. So either you only get loans for very specific high-pay careers, or you make studying a privilege of the rich (or you do away with charging students a lot for attending university, but then someone else needs to pay for universities - in which case you're externalizing the costs of university education to the taxpayer).

[Adam_S]

WRT tuition fees though, there is very little incentive for universities to lower costs or provide cheaper tuition under the current system.

 

This kind of growth is probably not sustainable.

 

Edited January 19, 2020 by Adam_S

[Stargrunt6]

We should be, as well as the question of a comparable windfall for those who took second jobs or otherwise worked harder than others to pay off their student loan debt.

 

That windfall, for those less in need of it, does not have to be monetary.

That's my proposal. The ones who should compensate are the ones who benefited from the scheme, who are the schools.

[LT Ducky]

 

OK - so we forgive college loan debt ..... what about my niece? Graduated last spring from Rensselaer Polytechnic Institute with an honors degree in Computer Engineering, had a job waiting for her that was offered her when she interned there the summer before. Salary just shy of 6 figures with a 15K sign-on bonus ( job would have been 150K + on the West Coast). If you think Im bragging about her, I am.

 

Due to good planning by her parents and scholarships she has no debt; zero, zip, nada!!

 

So, should she maybe get a refund on the money already paid if those with debt have it forgiven???

 

One more thing - she has 3 younger sisters still in college, they too will have no debt when they graduate unless they choose advanced degrees over their Bachelors.

 

These folks arent rich, they planned ahead and worked hard.

You be racist and showing off your "privilege" Planning your future is Whitey/Asian privilege oppression of the masses

 

 

There is more truth to your statement than you could have known - My niece, along with her 3 'sisters' are Chinese, adopted by my Caucasian sister!

 

AS for Ssnake's comment about art majors, the 2 youngest are incredibly talented artists, I have pictures of 2 of my dogs done by them proudly hanging on my walls and the youngest has been paid commissions for some of the work she's done. Having said that, my sister strongly suggested (demanded? ) that they go for a degree that actually results in an employable skill, they both chose Education.

[Ivanhoe]

You could also make a case for stopping short out outright debt forgiveness but restructuring student loan debt so that repayments are capped at a certain % of income and the loan companies and debt collectors are limited in the amount of fees and interest they're allowed to pile up onto the original debt.

Payment based on income is already in place. The problem for many is that the debt load is insurmountable at the income levels they are going to have.

 

And keep in mind, as well, that the folks who are really murdered by student debt are those who went one or two years and flunked out or gave up. Its been pointed out numerous times that the University of California system quite happily enrolls thousands of black and Hispanic students that simply can't make the cut, so the unis get one or two years of inflated tuition, the student acquires a ton of debt but no marketable skills.

[Jeff]

How old is old enough that we can demand somebody should be held liable for the debt they voluntarily accrued? Whatever that age, that must be the minimum age for enlistment or draft into the military services. I submit that age should be 26 years, the age children can remain on mommy and daddy's insurance plans. It is statutory, 26 years is the age the federal government says that people are finally old enough to make choices and take care of themselves. I submit that all activities we reserve to adults: driving, alcohol consumption, military service, debt accrual, and higher education, should not be allowed until one achieves the age of 26 years.

 

Voting?

[MiloMorai]

From 2011, Why is College Tuition Increasing Consistently in the U.S.?

https://topforeignstocks.com/2011/04/02/why-is-college-tuition-increasing-consistently-in-the-us/