Author Topic: Student Loans Getting Close to Implosion!  (Read 7900 times)

Jurgis

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wondering

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Re: Student Loans Getting Close to Implosion!
« Reply #21 on: August 14, 2019, 07:41:04 AM »
From another point of view, I seem to be remember that Russell Napier mentioning at one of the FFH pre-AGM dinners that the forgiveness of student debt would be very stimulative to the economy, i.e. by removing the debt burden to young people, they would resume spending again.

cherzeca

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Re: Student Loans Getting Close to Implosion!
« Reply #22 on: August 14, 2019, 07:44:47 AM »
From another point of view, I seem to be remember that Russell Napier mentioning at one of the FFH pre-AGM dinners that the forgiveness of student debt would be very stimulative to the economy, i.e. by removing the debt burden to young people, they would resume spending again.

maxing their credit cards and then looking for more relief

SharperDingaan

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Re: Student Loans Getting Close to Implosion!
« Reply #23 on: August 14, 2019, 09:14:21 AM »
Just back from vacation .....

Whatever we may think as to whether student debt should be forgiven or not, the major problem with it that it cannot be done without distorting inter-generational parity. The practical reality is that you cant give 'X' dollars to just one generation - and NOT DO THE SAME for every other living generation that has passed through the same institution. Shouldn't the current student in the institution not get the same benefit? Shouldn't the 'older than millenial' generations that graduated earlier - not get the same benefit? Families with kids typically share the family resources equally amongst their kids, they don't systematically just give one kid more at the expense of the others. But ... I'm a millenial, I'm the 'chosen one!'
Sorry, but we're just not that into you!

Millenials are those born between 1981-1991; at the end of 2019, those aged 28-38. They're young, middle-aged geezers today!
That 19 year going through University/College today has a very different attitude and is a lot more pragmatic; much as the children of those born in the depression years of the 1920s never forgot the lessons of the depression. And quite a few are now graduating debt free, and with 2 years+ of paid co-op experience (business, engineering, computer science, trades, etc.), through sheer hard work. Point is, moral hazard works; and its effect is very evident in the generation currently going through university/college. All desirable.

Student debt either gets paid off, or written off; but nothing prevents anyone from 'earning' a write-off for societal services performed; looking after aging grand parents, performing admin/legal work in hospices, foodbanks, etc. But at the end of the day, you 'wear' your mistakes, and moral hazard ALWAYS gets paid!

Sure it's not what people want to hear, but neither is getting old!
You want to change the world? CHANGE IT, don't whine :)

SD




« Last Edit: August 14, 2019, 09:18:57 AM by SharperDingaan »

DTEJD1997

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Re: Student Loans Getting Close to Implosion!
« Reply #24 on: August 14, 2019, 09:17:06 AM »
Hey all:

Here is another thing to ponder.

If the education being peddled by "educators" is valuable & worthwhile (certainly some is), why are there so many people so far in debt?  Why is the amount owed easily $1.5T?

If graduates get good jobs, jobs that pay $$$$ commensurate with the time & money invested in them, then why so much debt? 

People with valuable educations would be making more $, and easily paying down/off their student loans.

The simple fact of the matter is that a shockingly high percentage of education is simply no where near as valuable as what it is made out to be.  Thus, you get the shocking amount of debt.

The way edukation is set up in America is now a wealth transfer from the tax payers to the edukators, with students/graduates trapped in the middle.

Meanwhile, the "educators" laugh all the way to the bank.
« Last Edit: August 14, 2019, 09:56:31 AM by DTEJD1997 »

stahleyp

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Re: Student Loans Getting Close to Implosion!
« Reply #25 on: August 14, 2019, 09:48:16 AM »
I find it funny that that colleges, by and large, tend to be very liberal and about "social justice" but have no issue loading kids with tons of debt. I agree that something needs to be done about education but I don't like the idea of loan forgiveness/bailout. It doesn't fix the actual issue (schools overcharging for the services provided). And rewards those that have a degree and debt but doesn't reward those with a degree and no debt or those without a degree.

I'd much prefer something like a tax deduction on the full amount paid back per year and limiting schools to allow them to only increase total cost by the rate of inflation. Perhaps we could do something like if you pay your loans off within 10 years, you can deduct all of it and no interest. If you pay it after that you get a deduction but will owe interest.

Paul

Castanza

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Re: Student Loans Getting Close to Implosion!
« Reply #26 on: August 14, 2019, 09:59:34 AM »
Hey all:

Here is another thing to ponder.

If the education being peddled by "educators" is valuable & worthwhile (certainly some is), why are there so many people so far in debt?  Why is the amount owed easily $1.5T?

If graduates get good jobs, jobs that pay $$$$ commensurate with the time & money invested in them, then why so much debt? 

People with valuable educations would be making more $, and easily paying down/off their student loans.

The simple fact of the matter is that a shockingly high percentage of education is simply no where near as valuable as what it is made out to be.  Thus, you get the shocking amount of debt.

Meanwhile, the "educators" laugh all the way to the bank.

I distinctly remember sitting in my dorm room wondering why the hell I was paying 20k a year for power points. That's exactly what the majority of courses are. Yeah you get some valuable lab work and get to talk with the professors but the majority of "learning" is done on your own. Youtube can teach you Calc, Chem (minus the lab), Biology, Physics and everything else just as well. The only thing different is it's free and there is no accountability or way to prove you "learned" it. It's easy to see the value of education looking back in history. But looking forward not as much. Seems to be more about making connections and having a piece of paper to market yourself and check off a box.

KJP

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Re: Student Loans Getting Close to Implosion!
« Reply #27 on: August 14, 2019, 10:12:30 AM »
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

SHDL

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Re: Student Loans Getting Close to Implosion!
« Reply #28 on: August 14, 2019, 10:14:26 AM »
Iím personally a fan of the income sharing arrangements that some institutions are starting/testing.  IMO a young personís professional career is the type of thing that ought to be financed mostly by equity, not debt.  A lot of the horror stories I read are about households that are like startups that got themselves started with 7x EBITDA worth of debt and no equity.  That is financially reckless, even if the expected returns are good. 

That said, I do agree that higher ed is ripe for massive disruption.

Castanza

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Re: Student Loans Getting Close to Implosion!
« Reply #29 on: August 14, 2019, 11:26:35 AM »
A bailout is completely ridiculous and would have a negative effect on the future of education and generations. It's a band-aid solution at best.

A bailout is also a huge slap in the face to people who were responsible like myself. I went to college for Petroleum Engineering (2yrs). End of my sophomore year I realized the industry was starting to show signs of slowing. I figured hey, I don't want to be 60k in debt and not have a potential job lined up. So I dropped out and took a year off. To the scoff of my college friends and others I took a job as a lowly UPS driver and busted my butt on 12 hours days. I made pretty good money (I was lucky). I decided to finish school in another program at an online university. I don't believe that the university you go to really matters unless it's an IVY. Well I continued to bust my butt getting up at 4:30 in the morning to study, head to work, get home around 8 and then study a few more hours in the evening. Practically had no weekend etc. But when all was said an done I graduated basically debt free, had a good savings account and a job to hold me over until I found a job. Ended up only taking 2 months to find one that paid the same with way better hours. I'm in better shape than all my friend who WILLINGLY chose to take out enormous loans. I would say financially I'm 4-7 years ahead of most people I graduated with.

So a bailout? No, screw that. I payed my way and I'm not paying for anyone elses poor decisions. I'm paying out of pocket for masters right now. I agree with some others on here that one of the most harmful things this education system has done to young American students is tell them "you must go to college." This bailout will do nothing but devalue higher and lower education further. In my opinion this generation needs to learn from their mistakes (whether it was their fault of not). If a bailout is given do you think these parents are more or less likely to push their kids into college at any cost? S many of these "white collar" jobs could be done by smart high school graduates with some basic training. But as it stands now the Bachelors degree seems to be the new GED and the Masters is quickly becoming the new Bachelors. That trend needs to be reversed.

__________________________________

Solution?

First and foremost I don't believe the govt should be in the business of loans. But being that it exists the system clearly needs reformed.

Put stipulations on loans.

1.) Loans should only be given out to HS graduates who have good GPA's.

2.) Bureau of Labor should do studies every so often to see the supply and demand of jobs. Loans should only be given out to students majoring in say top 10 needed careers (RN).

3.) This dependency on govt loans needs to be reduced. I say ween the total number of loans given over a 10 year period until you hit 0. (maybe a it extreme)

4.) State schools shouldn't offer "worthless degrees." If you want a basket weaving degree then you can pay your own way with a private loan at a liberal arts university.

5.) Reform High School and add apprenticeships. Say Katie is good at math and has in interest in engineering. Well maybe starting junior year let her work at a local engineering firm for a few hours. This gives experience and lets employers find possible future employment. Perhaps if this is done some companies would come up with contracts saying "we will pay for your college education if you commit 5 years of post grad employment to us." 

Not only that it would help create better trained HS students. It could potential reduce this ridiculous barrier (Bachelors Degree) for many of these jobs and bring back merit to a GED.

(I understand this might not factor in employment laws etc.)

You don't needs a college degree to make a good livings. As it stands now poverty is less than 1% across any ethnicity if you follow these simple rules.
1.) Graduate HS
2.) Don't have a child before graduating HS
3.) Upon graduating HS take any full-time job you can get (can be minimum wage).

Any solution that requires regulators to determine worthwhile degrees, etc., is probably far more complicated than it needs to be.  Instead, why not make the university enrolling the debtor-student guarantee any federal issued or insured student loans?  That way the institution in the best position to create a good education at the lowest possible cost is directly incentivized to do so. They also would be incentivized to help their students get good jobs after they graduate.  A guarantee from that university seems to make much more sense than guarantee or loan from taxpayers at large.

Wouldn't this create a massive discrepancy between private and public institutions? I mean public schools receive state legislator and federal funding. So having them guarantee the loans would still technically come back on tax payers right? I know the majority of their funding is probably derived from tuition but there is certainly a tax element. Whereas private universities receive no state/federal funding. Then you have the issue of capping tuition costs. How would you do this with the inevitable demand of either tuition increases to pay these guaranteed loans? Either that or they ask for more money from state and federal funding. I'm not saying your wrong but it seems like the money is coming from the same pool so to speak.

I agree with the regulators part. I wasn't thinking of having them determine what degrees are worthless. More along the lines of recognizing supply and demand in the general workforce.