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If the bank did not have to worry about a default, since Student Loans are exempt from bankruptcy, then they would be forcing the student loans down people's throats. Which is what is happening, and, IMO, is one of the forcing agents in the vicious cycle of increasing tuition/increasing loans.
The problem is that there is no good collateral for a student loan. If someone defaults on it, then you can't really take back their education.
Either you take the risk away from the lenders (what we have now), and face an escalating bubble of tuition/debt, or you choose a system in which only those who can truly afford it can get educated (secured loans/paying in cash).
This is such BS. Like someone said earlier, there are plenty of options. I know lots of people that went to a CC and had a full time job to pay for it. After 2 years went to MD, again with a full/part time job. It took the 6 or 7 years to graduate like that but they still did it and had a whopping $0 to pay back when they were finished.
The problem now is the loans. My nephew bought a motorcycle with his because he was getting financial aid and academic scholarships. Should we really be forced to pay for that? No.
What? The reason it cost 100k is because the schools know how easy it is for people to get loans so they jack up the tuition prices.
Or you have a system where not every single person with a pulse has to go to college to get a BA for a menial job, or people find alternative means of getting education funding (joining the military, drug dealing, etc.)
Just part of the problem....
Universities are also getting themselves into a bit of trouble due to other forms of government support. Late in the 90s when the Federally sponsored research budgets were going through the roof (namely at NIH), Universities were using this as a subsidy on extensive capital projects....basically going on the assumption that they could maintain the high levels of external funding in order to keep paying for those projects. Build the nicest labs money can buy, attract the best faculty in the country and keep the grants flowing in. Well, that cash cow is drying up, and schools are left looking for other ways to keep paying for the loans on these buildings....tuition and fees go up.
Im ready for aa 5th of vodica to end my feels.
See that is the problem the banks who gave the loan should have known about these things and refused the loan. They lend without consequence and that is just wrong.
even if you could declare BK with student loans not everyone would some people like having good credit and paying their bills. I would even suggest limited windows where Bk's can be done for student loans. IF the banks take one big hit and then know that in 5-10 years it could happen again they will change their lending practices quickly. schools will follow when they have empty dorms.
Pic Sigs are for losers.
If you want an advanced and growing economy, then you need an educated populace. And while there are alternative means of getting funding, they can not meet the demand of the populace.
I know that the common adage around here is, "The world needs ditch-diggers, too," but that is a fucking lie. The world needs people to design, build, and maintain ditch-digging machines, which are thousands of times more productive than their human counterparts(hello, GDP). And if you really want to get technical, you need people to design, build, and maintain the machines that build the ditch digging machines.
How do you create a system that can maintain education for steady economic growth? I agree that the system we have now is unsustainable, and loan forgiveness is not the way.
Rep Clarke was just on with Stuart Varney. Based on his own appearance, he would be better off sponsoring a FREE DENTAL FOR ALL bill.
So how are all of the people going to fourth tier schools at 20k per year for a BA in Communications so that they can go work the phones at a menial office job helping to design, build, and maintain ditch-digging machines? And do you really need a four year degree to maintain a ditch digging machine? Wouldn't a two year vocational program that teaches you how to weld without inhaling asbestos be enough?
There are waaaaay to many jobs that required a college degree now. Where I work you need to have a degree just to get a job in the call center. You basically have to pay for a 4 year degree to just get your foot in the door and work one of the most soul crushing jobs for the lowest amount of money.
That's a product this problem, though. If there weren't so many useless degrees floating out there, that standard woudln't exist.
Ask the people hiring.
Seriously, though, I am all for vocational schoools. Been a huge proponent for years. Everyone has different strengths and weaknesses, and there should be viable educational paths that cater to different skillsets (and get people into careers that they can excel at).
However, does amount of money available define those personal strengths and weaknesses? Right now we have a system that bases the type of education you get on how much you are willing to pay (whether now or in the future). This does not seem efficient or equitable to me.
HUGE HYPOTHETICAL COMING UP
IF I had to redesign the post-secondary educational system, I would give everyone a battery of aptitude tests upon leaving high school. The results would determine a grant/loan system individualized for each person. Basically, you get a few majors or vocational activities that you excel in and if you choose for further education in one of those fields, you get government grants. If you choose a closely related field, you get subsidized loans. If you decide that you want something else, you pay for it yourself. Military service allows you free choice.
This would maintain the veneer of personal liberty and choice, but give more equitable opportunity.
Yeah, these loan issues ARE the cause of runaway tuition.
This is correct. Why hire a non-college grad when there are college grad applicants? Do they "require" a degree? No. Will you get hired without one? Doubtful.
I got an idea. Did you waste money getting a worthless degree, amass tons of debt, and are now jobless and unable to make payments? Join the military. They are always hiring and will help you with those loans. If the trend continues without government intervention, this could ultimately be the answer. It wouldn't take long before those Russian Studies students studied in a library.
As economically conservative as I am, I've seen pretty impressive results with non-guaranteed public university education. Highly selective, free public universities eliminate the surplus of undesirable majors. When I was studying in Prague, the quality of the average student was far beyond that at Maryland. However, a system like that is probably impossible in the US.
I know I already responded to this, but here are some more thoughts: we're sending more kids than ever to college, but our populace isn't getting more educated. For so many kids now college is just a four year socialization program. They leave college a little more mature than they were at the end of high school and possibly with a few more/better honed skills, but nothing worth the cost and the time they put in. And I don't think that the socialization is something that wouldn't occur outside the college environment anyway. I'm generalizing of course because there are plenty of people across the spectrum of majors for whom college is a great benefit. But just because more and more people are getting pieces of paper with "B.A." or "B.S." on it doesn't mean our populace is more educated.
This post was edited by neal990 2 years ago
This whole thing is obviously stupid, for the reasons previously outlined, but student loan debt should absolutely be dischargeable in bankruptcy. If I was to go on an irresponsible spending orgy buying NOD-level electronics on credit cards and then couldn't make the payments, that debt is can be discharged, but if I go to law school and can't find a job, no dice.
This post was edited by JemoTerp 2 years ago
NYCTerp05: i guarantee you my child won't turn out gay
LOOOOOOOOOOOOOOOOOL if this gets passed. i pay $400/month in undergrad student loan and this is still ridiculous. continue to bail people out and they'll never learn.
im sorry i was confusing...your "Superbowl" was the Redskins losing since you know that the Ravens cant win it all.
I would have instantly declared bankruptcy upon graduation, and I'm sure there are a ton of others that would have too. It takes most people more than 7 years to pay off both undergrad and law.
Not everyone would do that. Government loans are actually very good about working with people. You'd get say maybe 10% of people Declare BK to get from under their student loans. probably anywhere from 500 mil to 1 billion dollars of discharged debt. this is spread out over all the various student loan carriers. They take a loss but nothing that puts their business in jeopardy and they clean up their lending practices afterwards.
Make a window where current borrowers can choose BK say 2 years. Then you make laws forcing lenders to get more documentation on costs from the school and you don't allow off campus housing to be included as something you can borrow for.Have no interest accrue while the student is actively in school. This ensures people are not borrowing more than needed, while still providing the flow of money necessary to go to college. The problem now isn't the loans themselves it is the size of the loans and how the are distributed and how little if any underwriting is done to qualify for whatever amount you want.
I'll take the 7 year credit hit or whatever, easy.
I think I'll graduate w/ $150k or so...
debating whether to live like a student on a biglaw salary next year and pay it off in 3 years, or pay the minimum and bet on forgiveness/dischargeability later on. sweet options
i'm not sure you understand how much money people have to borrow for education in the current environment. LOl at anyone with 200k in unsecured student loans deciding against discharding immediately, considering the have no assets whatsoever.
free money! not like you can afford to buy a house for another 7 years, anyway.
I think you are severely underestimating the number of people who would declare bankruptcy if they could discharge their student loans. And it would also encourage more people to take out loans to pay for their education, since they know that they can just discharge them. It would be madness. MADNESS.
I said a window for current borrowers. And no not everyone would declare BK. Not everyone wants bad credit for 7 years. Not everyone has 200k in debt.
You don't want to discourage education just make sure that the system is not abused by the banks and schools which it is. they have no reason to not give anyone who applies right now. It is bad business to lend money that way but with no consequences they can't be held accountable for their actions.
Would you lend 100k to 100 bums if you knew you would get the money back with 7 to 10% interest? I would for sure.
I love the poo pooing of the idea by the way just because it wouldnt work yet not offering any other reasonable suggestions to fix a broken system that IS 100000% a drag on the US economy and society as a whole.
I think you overestimate how many people would declare BK to get out of their student loans.
This post was edited by jgdomino 2 years ago
Yeah, sites like above the law have stories all the time about people with 200k+ in loans who can only get jobs that pay like 30k per year. With bankruptcy there's even less incentive to be realistic about job/salary prospects. I would like to see it tweaked though to allow a little more flexibility for student loans in the bankruptcy process though. But if you let it be fully discharged I think you'd open the floodgates for widespread abuse
Yeah, the quality of our education system, and how well it suits varying people is a topic that I'm pretty sure you and I would mostly agree on.
I'm not sure I would agree with your socialization statement, though, just based on anectdotal facebook evidence. On my facebook, the people who didn't go to college tend to have fairly limited social circles (focused mainly around Greensboro), while the ones that attended college have a wide social circle with people literally everywhere.
On the topic, though, I think the thing that frustrates me the most is that we do not have a standardized way to teach even basic finance in high school. I mean, we are taking kids who have never had to so much as balance a checkbook, and asking them to make complex financial decisions that will govern the rest of their lives. With lending institutions taking quite literally 0 risk to guarantee them a 7% APR for the life (minus the first 4 years) of a loan, they would force a student loan on every kid in America, if they could.
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