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Asithappens

NPR story on student loans

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May be better placed in Daily Texan, but there are some political aspects to the student loan "debacle".

It's a problem, to be sure, but, and this chaps my hide a bit, the story on NPR (so far) has not said anything about whether the choice of taking out these loans was a wise one, or even a good one. Owing $100k when you're a theater/radiotvfilm/undergrad psych major is stupid. The student may not be stupid, but they have made a stupid decision. (if you want to argue that people who make stupid decisions are stupid you won't get much argument from me).

They said that students don't know the difference b/t taking out a $3,000/yr loan vs a $30,000/year loan. It's all just a number and you sign your name. Give me a fucking break. 

If there's anything we should have learned by now, it's that you can't prevent stupid people from being stupid. 

I would like to see the data on some of these loans: amount, major, school, did they graduate, etc. 

Again, if you took out $100k in loans and you're a theater major then you get no sympathy from me. Sorry. 

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Actually, RTF, the degree (as opposed to some in the RTF department in communications), is quite rigorous and also quite marketable.

But I agree that there seems to be insufficient focus on Todd Margaret-level decision-making on student loans.  I grant first-time college students a lot of slack on that, but a lot of the poorest decisions are made by those whose parents, at least, should know better.  They're just happy to stay in their 80K SUVs (on 10 year notes) while the kids are in college.

And really, it doesn't take a genius to figure out that taking out $100k in loans to go to some college with expensive tuition, in an expensive city far from home is probably a bad idea and you need to go the juco and live at home route.

All that said, the done buns can't be undone and we need to figure a way to go forward.  We certainly can't count on the financial wisdom of Americans to curb the problem.

Edited by TwiceHorn

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It didn't cost $100K to get a degree at Texas when Pete Buttigieg studied English at his college of choice.

What economic forces caused the steep inflation in higher education?

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1 minute ago, TwiceHorn said:

And really, it doesn't take a genius to figure out that taking out $100k in loans to go to some college with expensive tuition, in an expensive city far from home is probably a bad idea and you need to go the juco and live at home route.

The parent who does not counsel their child that they are shitting the bed by taking out a quarter million dollars in student loan debt is a failure. 

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Just now, washparkhorn said:

It didn't cost $100K to get a degree at Texas when Pete Buttigieg studied English at his college of choice.

What economic forces caused the steep inflation in higher education?

spacer.png

Right, and absolutely none of that requires a theater major to go into massive debt.

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Just now, Asithappens said:

Right, and absolutely none of that requires a theater major to go into massive debt.

Of course not. But where did the money go?

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1 minute ago, washparkhorn said:

Of course not. But where did the money go?

Extra buildings, bureaucracy , and unlimited money from the govt just means more of that.

 

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Just now, washparkhorn said:

It didn't cost $100K to get a degree at Texas when Pete Buttigieg studied English at his college of choice.

What economic forces caused the steep inflation in higher education?

spacer.png

Administrative bloat. 

Deans at second rate schools such as UH making 300-350k. 

 

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9 minutes ago, Asithappens said:

Right, and absolutely none of that requires a theater major to go into massive debt.

What about the lawyer? The teacher? The social worker? The accountant? 

Why is every conversation about this crises reduced to "hurr durr, idiot children taking out millions to learn medieval poetry"

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5 minutes ago, Foosters said:

What about the lawyer? The teacher? The social worker? The accountant? 

Why is every conversation about this crises reduced to "hurr durr, idiot children taking out millions to learn medieval poetry"

Well, my focus was on majors that, imo, had a less-than-average market wage. 

Lawyers? Seriously? Unless you're going to a top, top tier school it's not worth it if you have to take out loans. Probably not worth it even if you don't have to take out loans. 

Social worker? Really? I think my point stands. Don't go into $100k debt to be a social worker. 

Accountant? The pay for accountants is better than average, so.... 

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28 minutes ago, Asithappens said:

 

It's a problem, to be sure, but, and this chaps my hide a bit, the story on NPR (so far) has not said anything about whether the choice of taking out these loans was a wise one, or even a good one. Owing $100k when you're a theater/radiotvfilm/undergrad psych major is stupid. The student may not be stupid, but they have made a stupid decision. (if you want to argue that people who make stupid decisions are stupid you won't get much argument from me).

Again, if you took out $100k in loans and you're a theater major then you get no sympathy from me. Sorry. 

Ahh, so picking a major based on their passion is stupid.  Gotcha.  

Can you provide the research that those majors you're demeaning are the only majors who are having issues paying back student loans?  Because I have tons of lawyer friends who are in the same boat, but yet you aren't demeaning their choice. 

It's not the major--it's the job they want.  I know plenty of folks (co-workers) who have degrees in those majors who are doing perfectly fine in paying back their loans. 

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20 minutes ago, workswithseed said:

Why can't people with student loans do bankruptcy? 

Good question. 

I think GWB had something to do with that. Maybe not. 

And they can be discharged via bankruptcy but it's not easy.

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5 minutes ago, Pancho said:

Ahh, so picking a major based on their passion is stupid.  Gotcha.  

 

This is the kind of, ahem, thinking  that leads to poor loan choices, imo. Not to pick on your lack of critical thinking skills, but that's not what I said. 

You can pick whatever major you want. That doesn't mean you go into massive debt for it. 

I mean, there must be a lot of people who don't understand that.

Edited by Asithappens

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The reason student loan debt was made extremely difficult to discharge was to induce lending for a thing that has zero collateral value.

Edited by Incredulity

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3 minutes ago, Incredulity said:

The reason student loan debt was made extremely difficult to discharge was to induce lending for a thing that has zero collateral value.

Not true, imo. It does have collateral value in the right circumstances. The resulting job that one acquires. And there are co-signers. 

It's much more of a sop to loan companies. Again, imo. 

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Just now, David Dennison said:

Because it is prohibited by law.

Because of Biden. 

"In 1990, it was easier to discharge student loan debt in bankruptcy. But Biden was the chief sponsor of the Crime Control Act, which lengthened the waiting period before a student loan borrower could file for bankruptcy.

In 1998, Biden supported a change in the bankruptcy code that created an “undue hardship” standard for federal student loans, making it significantly more difficult for borrowers to discharge their federal student loans in bankruptcy. Biden continued to oppose efforts to loosen bankruptcy restrictions on student loans through 2001.

In 2005, Biden supported a change in the bankruptcy code that made it much more difficult to discharge private student loan debt in bankruptcy by also applying the “undue hardship” standard. Prior to then, private student loans were not treated much differently than other forms of consumer debt in bankruptcy. Following this change, private student loans started rapidly expanding across college campuses."

https://www.forbes.com/sites/adamminsky/2019/06/03/where-does-joe-biden-stand-on-student-loan-debt/#755a06c86a6c

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10 minutes ago, Asithappens said:

Well, my focus was on majors that, imo, had a less-than-average market wage. 

Lawyers? Seriously? Unless you're going to a top, top tier school it's not worth it if you have to take out loans. Probably not worth it even if you don't have to take out loans. 

Social worker? Really? I think my point stands. Don't go into $100k debt to be a social worker. 

Accountant? The pay for accountants is better than average, so.... 

This is generally true, but no one tells you that in college. 

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37 minutes ago, workswithseed said:

Why can't people with student loans do bankruptcy? 

first off, loans aren't generally dischargeable in bankruptcy. 

second, if the majority (>50%) of your debts are incurred for consumer/familial purposes (which includes student loans, car notes, mortgage, etc), you're subjected to something called means testing before you can opt for a chapter 7.  basically, they took the test to see how much income you'd have to pay against back taxes and applied it to your debts.  if that figure is above a certain threshold (in either pennies on the dollar or total dollars paid), you have to try a chapter 13 first. 

chapter 13 treats a student loan as if it were any other unsecured debt - there's no special treatment of it in either the means test or the chapter 13 plan (unlike, say, your car note or mortgage note, both of which get paid 100%) (and i've tried, maybe a better lawdog than me has gotten this to work out).  so, under the chapter 13 payment it gets the same dividend as all the other unsecured debt - pennies on the dollar.  but, because of how your student loan works, the interest keep accruing (and compounding, which sets student loans apart to begin with - damn near everything else is simple interest afaik, at least on the consumer side) during the bankruptcy.  so it's conceivable that after 5 years in bankruptcy you're caught up on your house but so far behind on your student loans that you're worse off. 

i'm not sure how far down the chapter 13 path you could attempt to go, trying to make the chapter 13 payment, and your student loan payment, before trying to convert to 7, and make it stick. 

Edited by elfenix

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4 minutes ago, washparkhorn said:

 

Because of Biden. 

 

Bullshit. 

Was Biden one of those who supported it? Yeah. Was it "because of him". No. 

It was a Republican bill that was supported by some Dems. 

Or is that too nuanced for you?

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2 minutes ago, Asithappens said:

Not true, imo. It does have collateral value in the right circumstances. The resulting job that one acquires. And there are co-signers. 

It's much more of a sop to loan companies. Again, imo. 

A co-signer isn’t collateral and neither is the “resulting job”.

Student loans are easier to get because they can’t be discharged. 

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3 minutes ago, David Dennison said:

This is generally true, but no one tells you that in college. 

Imo, it's way, way, way more than "generally true". 100% true? No. But way beyond generally. 

Don't go into $200k debt to get a law degree from St. Marys. Just don't. 

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38 minutes ago, workswithseed said:

Why can't people with student loans do bankruptcy? 

They can do bankruptcy, but student loans are not "wiped out" or discharged by bankruptcy, at least not without a lot of extra effort to prove an "undue hardship."  That usually entails proof that you are mentally or physically unable to be employed at such a wage as to ever realistically pay off the loans.  And then, they aren't discharged to zero, but the loan balance is cut down to something more payable. Say from $100k to 20k.

The theory is that by not permitting discharge in bankruptcy, loan collection rates will be higher, which will induce lenders to make the loans.

It is extremely unusual for a lender to make a six-figure loan without collateral that they can foreclose upon in the event of default, ie a car or a house.

Edited by TwiceHorn

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Just now, Asithappens said:

Imo, it's way, way, way more than "generally true". 100% true? No. But way beyond generally. 

Don't go into $200k debt to get a law degree from St. Marys. Just don't. 

My point is, no one tells you that. In fact, people encourage you to do just that. 

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Just now, Incredulity said:

A co-signer isn’t collateral and neither is the “resulting job”.

Student loans are easier to get because they can’t be discharged. 

A co-signer and the resulting job, if a good one,  help ensure future payment. 

 

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1 minute ago, TwiceHorn said:

They can do bankruptcy, but student loans are not "wiped out" or discharged by bankruptcy, at least not without a lot of extra effort to prove an "undue hardship."

The theory is that by not permitting discharge in bankruptcy, loan collection rates will be higher, which will induce lenders to make the loans.

It is extremely unusual for a lender to make a six-figure loan without collateral that they can foreclose upon in the event of default.

Further, make a loan against something that may never happen.(a college degree)

 

 

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1 minute ago, Asithappens said:

A co-signer and the resulting job, if a good one,  help ensure future payment. 

 

That's a big if with regard to lawyers. Another thing no one really tells you.

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Just now, David Dennison said:

My point is, no one tells you that. In fact, people encourage you to do just that. 

No one tells you that? I don't know about that. I bet at least one, maybe two, will tell you that. Whether you listen is another matter. 

I think anyone who is thinking about that line of education has heard the news, scamblog and all. If they haven't, then it's malfeasance and incredible head-in-the-sand ignorance. 

 

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1 minute ago, Asithappens said:

A co-signer and the resulting job, if a good one,  help ensure future payment. 

 

Which, by definition isn’t collateral.

A lender loans Johnny 50k over 3 years for student loans. Johnny drops out.  What does the lender repossess? 

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also, the loan documentation never comes right out and says that it's a compound interest loan.  which you were taught about in high school.  there's two types of interest: simple, and compound.  but you won't find that word, "compound," in the loan contract. 

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29 minutes ago, Asithappens said:

Well, my focus was on majors that, imo, had a less-than-average market wage. 

Lawyers? Seriously? Unless you're going to a top, top tier school it's not worth it if you have to take out loans. Probably not worth it even if you don't have to take out loans. 

Social worker? Really? I think my point stands. Don't go into $100k debt to be a social worker. 

Accountant? The pay for accountants is better than average, so.... 

I mean, i just picked a few professions at random. The point is, almost every professional job requires at least one degree. Colleges and universities now charge exorbitant rates for that. Unless you are independently wealthy, you are going to have to take out hefty loans.  Not sure the advice of "well, the world needs plumbers too" is feasible for America's youth. 

Regardless of how you feel about these idiot students (and you've made it clear how you feel) there is an entire generation (with another on the horizon about to join their fate) that has no savings and is essentially locked out of the housing market due to student loans. What does that portend long term? What are the economic ramifications of a generation of Americans sitting on the sideline?

edit: full disclosure: I am currently in year 6 of the PSLF plan. We'll see if that is still around in 4 years. I have paid roughly $50k in loan payments in the last 6 years. 

Edited by Foosters

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1 minute ago, Incredulity said:

Which, by definition isn’t collateral.

A lender loans Johnny 50k over 3 years for student loans. Johnny drops out.  What does the lender repossess? 

Sue, get a judgment, garnish accounts.

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46 minutes ago, washparkhorn said:

It didn't cost $100K to get a degree at Texas when Pete Buttigieg studied English at his college of choice.

What economic forces caused the steep inflation in higher education?

spacer.png

The answer appears to be a toxic brew of three things:  reduced state support of colleges and universities; tuition deregulation; and free availability of student loans.

All the while, curiously enough, the value of a bachelors degree has deteriorated.

So you have three culprits:  state legislatures, the schools themselves, and business or banking interests.

Edited by TwiceHorn

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2 minutes ago, Foosters said:

I mean, i just picked a few professions at random. The point is, almost every professional job requires at least one degree. Colleges and universities now charge exorbitant rates for that. Unless you are independently wealthy, you are going to have to take out hefty loans.  Not sure the advice of "well, the world needs plumbers too" is feasible for America's youth. 

Regardless of how you feel about these idiot students (and you've made it clear how you feel) there is an entire generation (with another on the horizon about to join their fate) that has no savings and is essentially locked out of the housing market due to student loans. What does that portend long term? What are the economic ramifications of a generation of Americans sitting on the sideline?

There's a lot wrong here, imo. 

With my example of theater (since that is a poorly paid job) - it's not a profession. If you want to talk professions then by definition we're no longer in the dog-shit paying job sector. Business, law, nursing, medicine, dentistry, etc. Are there problems here? Yes. But it's not theater.

And no, one need not take out hefty loans for all majors. Go to a juco for the first two years. Get a work/work-study job. Go to a less expensive school. 
 

Again, you just can't stop stupid people from doing stupid things. This does not apply to all student with loans. It does apply to theater/tv/radio/film majors who racked up massive debt. And that was my peeve with the NPR piece. They didn't address the majors/jobs aspect at all. Poor journalism, imo. 

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1 minute ago, David Dennison said:

Sue, get a judgment, garnish accounts.

Which is also what would happen on a loan backed by collateral.

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1 minute ago, Asithappens said:

There's a lot wrong here, imo. 

With my example of theater (since that is a poorly paid job) - it's not a profession. If you want to talk professions then by definition we're no longer in the dog-shit paying job sector. Business, law, nursing, medicine, dentistry, etc. Are there problems here? Yes. But it's not theater.

And no, one need not take out hefty loans for all majors. Go to a juco for the first two years. Get a work/work-study job. Go to a less expensive school. 
 

Again, you just can't stop stupid people from doing stupid things. This does not apply to all student with loans. It does apply to theater/tv/radio/film majors who racked up massive debt. And that was my peeve with the NPR piece. They didn't address the majors/jobs aspect at all. Poor journalism, imo. 

I thought you wanted to have a discussion about the current state of student loans, not limited to the theater arts. But yes, if that is all we are discussing, then I would agree that it's irresponsible to take out major loans for a theater major. 

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Now imagine the world without these people and degree programs because the experts on here believe anything outside of engineering, law, and nursing/doctoring has little value.   

 

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University tuition is on the pharma cost train. So much of the money spent is "free" (loans/insurance) that there's no market penalty for raising prices.

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“those people” would still exist. However the ivory tower wouldn’t be able to fleece them without easy loan money all about. 

Edited by Anastasis

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1 hour ago, Anastasis said:

The parent who does not counsel their child that they are shitting the bed by taking out a quarter million dollars in student loan debt is a failure. 

Yes its obviously the student and their parents fault. Certainly nobody else is to blame, such as the people profiting off of this and the government encouraging.

Parent should have told them to be a pig farmer instead.

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1 minute ago, JimmyJames said:

Yes its obviously the student and their parents fault. Certainly nobody else is to blame, such as the people profiting off of this and the government encouraging.

Parent should have told them to be a pig farmer instead.

false dilemma, and a straw man. good job JDS. 

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52 minutes ago, workswithseed said:

I got that, but I was wondering why it was so.

So the uber rich can more easily fuck over the middle class.

Also that’s the answer to just about every significant law passed over the last 40 years. 

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19 minutes ago, Asithappens said:

Again, you just can't stop stupid people from doing stupid things. This does not apply to all student with loans. It does apply to theater/tv/radio/film majors who racked up massive debt. And that was my peeve with the NPR piece. They didn't address the majors/jobs aspect at all. Poor journalism, imo. 

When you look at populations you are looking at the result of policy or some outside manipulations, whether the subject be SL debt, obesity, addiction, or teen pregnancy.   Suddenly people cannot go to school to gain an education but now it must be vocational?  So in this scenario will a geophysicist need to streamline their education to become super seismic processors and remove about 80% of the other material because they need to be handling attribute analysis instead of reading a PE curve or knowing about diagnentic environments.  

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6 minutes ago, JimmyJames said:

Yes its obviously the student and their parents fault. Certainly nobody else is to blame, such as the people profiting off of this and the government encouraging.

Parent should have told them to be a pig farmer instead.

You should’ve saved better for your kids’ college Jimbo

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