Author Topic: Student Loans Getting Close to Implosion!  (Read 8760 times)

Parsad

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Student Loans Getting Close to Implosion!
« on: August 13, 2019, 01:52:28 PM »
Millennials are struggling with their debt load...in particular student loans, auto loans and credit cards.  In fact, delinquencies on student loans are getting dire:

https://finance.yahoo.com/news/student-loans-debt-grow-193708816.html

I would expect a bailout of some sort in the next Presidential term.  Cheers!
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Gregmal

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Re: Student Loans Getting Close to Implosion!
« Reply #1 on: August 13, 2019, 02:03:51 PM »
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.

wabuffo

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Re: Student Loans Getting Close to Implosion!
« Reply #2 on: August 13, 2019, 03:05:55 PM »
I would expect a bailout of some sort in the next Presidential term.  Cheers!

Did you know that $1T of these student loan balances are 100% owned by the US Federal Govt as assets.  There already was a bail-out.

Around 2010, the Obama administration pushed private student lenders completely out of the market and basically took over the issuance of new student loans.   The "business case" made by the Administration at the time was that the Federal govt could borrow at a lower interest rate than private lenders could.  Thus, the govt could, in turn, lower student loan interest rates and help students while still making a small spread.  The claim was that the US taxpayer was going to 'make money' on this deal.  (LOL!)

The Federal spending wasn't even counted in the official Federal Budget deficit statistics since the disbursements under the Federal Direct Student Loans Program and Temporary Student Loan Purchase Authority were considered the purchase of an "asset" and not an expenditure. So the over $1T disbursed for new loans and purchased loans was never counted in the deficit numbers from 2009 onwards.   Nevertheless - to the student loan recipients the cash deposited to their bank accounts was real enough!  You can see the numbers in Schedule E of the US Treasury's monthly budget reports.

wabuffo
« Last Edit: August 13, 2019, 03:25:06 PM by wabuffo »

Spekulatius

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Re: Student Loans Getting Close to Implosion!
« Reply #3 on: August 13, 2019, 04:47:32 PM »
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.

Using about every cliche about the Millennial generation there is. My sample size is small, but from the handful of millennials I als I know from work, no fits this description. As for the student loan bailout, itís inevitable, imo. Once the millennial generation puts their mark on the political landscape, itís only a matter of time.
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Parsad

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Re: Student Loans Getting Close to Implosion!
« Reply #4 on: August 13, 2019, 04:54:16 PM »
Hopefully not. They are already entitled enough as it is. Nothing will ever teach them responsibility. Working how/when you feel like it(only to complain about wages), daily trips to Starbucks, paying $9 for avocado toast... they're idiots.

Using about every cliche about the Millennial generation there is. My sample size is small, but from the handful of millennials I als I know from work, no fits this description. As for the student loan bailout, itís inevitable, imo. Once the millennial generation puts their mark on the political landscape, itís only a matter of time.

Ah, Greg was a grumpy, 65-year old senior when he came out of his mother's womb, so I would take that all with a grain of salt...especially on the $9 avocado toast...it's more like $15 everywhere! 

That being said, the stats don't lie, and they do show that Millennials are struggling on a broad basis.  So maybe not your immediate peer group, but certainly the age category.  And truth is that is natural since they come out of school with debt, carry mortgage debt, credit card debt and auto loans as they build their young careers.  But the sheer weight is enormous for this age category compared to Boomers, Gen X & Y, etc at the same age.  Cheers!
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DooDiligence

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Re: Student Loans Getting Close to Implosion!
« Reply #5 on: August 13, 2019, 05:15:19 PM »
I need to max out a student loan quick.
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longinvestor

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Re: Student Loans Getting Close to Implosion!
« Reply #6 on: August 13, 2019, 05:18:58 PM »
At least one large part of the problem is the total waste of the money spent on these college degrees. I donít know the percentage but for a good number of college grads the net benefit is below zero. The irony is that the internet has disrupted most other facets of life but is slow to disrupt college education. I canít wait! Thereís a big difference between getting a degree and getting education. Personally speaking, my own net learning during college pales in comparison to the post-c learning.

DTEJD1997

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Re: Student Loans Getting Close to Implosion!
« Reply #7 on: August 13, 2019, 05:24:27 PM »
Hey all:

I've been talking about this for years.

Sure, you've got entitled "goofs" who squandered their time & money, who got useless degrees in underwater basket weaving or grievance studies.

You've also got swarms of people who "did everything right" and they either can't find gainful employment in their field of study OR they find employment in their field at pay rates FAR below what the skool & USNWR represented it to be.

So what do you do?  You are trapped.  You've got $100K+ in debt.   How do you pay that off with a $35k to $45k salary?  Especially when you've got to pay for room & board & transportation & everything else?

Do you chuck all your education and start big rig truck driving to make decent money to pay off your loans?

I am going to suggest that almost everybody on this board is relatively successful and has not had to deal with dismal job prospects and huge student loans.  So it is easy to condemn the idiots for borrowing too much.  It is easy to believe that all "educators" do a good job & are underpaid.

What about the so called educators? They are laughing all the way to the bank!  They got their money.

Cancelling student loan debt or "free" education is not going to deal with the grifters in the education system.
« Last Edit: August 13, 2019, 05:26:47 PM by DTEJD1997 »

Parsad

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Re: Student Loans Getting Close to Implosion!
« Reply #8 on: August 13, 2019, 05:42:33 PM »
Hey all:

I've been talking about this for years.

Sure, you've got entitled "goofs" who squandered their time & money, who got useless degrees in underwater basket weaving or grievance studies.

You've also got swarms of people who "did everything right" and they either can't find gainful employment in their field of study OR they find employment in their field at pay rates FAR below what the skool & USNWR represented it to be.

So what do you do?  You are trapped.  You've got $100K+ in debt.   How do you pay that off with a $35k to $45k salary?  Especially when you've got to pay for room & board & transportation & everything else?

Do you chuck all your education and start big rig truck driving to make decent money to pay off your loans?

I am going to suggest that almost everybody on this board is relatively successful and has not had to deal with dismal job prospects and huge student loans.  So it is easy to condemn the idiots for borrowing too much.  It is easy to believe that all "educators" do a good job & are underpaid.

What about the so called educators? They are laughing all the way to the bank!  They got their money.

Cancelling student loan debt or "free" education is not going to deal with the grifters in the education system.

The problem is that this all comes down to the whole notion that everyone deserves an education (meaning college/university), a home, a job, etc...entitlement! 

There used to be a time when people would save up for all of these things...or at least a significant portion of it.  Hardly anyone puts down 20% now on their first home, but they all believe they should own one.  So many students borrow for college...instead of working part/full-time and paying for it as they study.  I see parents buying their teenagers cars, putting away money for college, but they don't even plan and save for their own retirement.

If you want something, go work, save for it and then buy it or get it.  Don't borrow unless you have a growing asset behind it.  A communications degree isn't going to guarantee a growing job!  Alot of this is bloody common sense is it not?  Cheers!
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DTEJD1997

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Re: Student Loans Getting Close to Implosion!
« Reply #9 on: August 13, 2019, 05:50:31 PM »
Hey all:

Here is another factor to the student loan crisis.

A lot of borrowers are stopping payments on their loans. 

They are doing this as there is a lot of uncertainty of what is going on with student loans.  Why make payments if there is a possibility of them being discharged/significantly altered?

So get them deferred, or get on IBR.  Try to postpone making payments as long as possible.  If you have to make payments, make the smallest payment possible to see if the situation changes.

Kind of stupid on the part of government.