Author Topic: Free college  (Read 4056 times)

LC

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Re: Free college
« Reply #20 on: May 04, 2019, 12:05:35 PM »
“If college is free, then what about the problems of all the fools who saved & worked to pay for their education?  All those whose worked extra hours and scrimped and saved to pay on their student loans?
“What about the people who took out hundreds of thousands in student loans and can't get a job that pays ANYTHING near enough to pay back their loans?  They are jammed up for DECADES.”

This is a bad argument.

“If we cure cancer, what about all the people who had cancer and died!!!”

People made choices to go to certain colleges (or to party or to work). Those choices should have consequences. Virtually no one chooses to get cancer.

I agree, dtejd. Educators should also be held responsible.

And tons of people smoke tobacco products, knowing it greatly increases their cancer risk.
If we cure cancer, should we only make the cure available to non-smokers?

The underlying logic of acknowledging we have a problem but rationalizing a reason to leave it unaddressed is pure sillyness.

Quote
Student loan debt is fundamentally different. You don't lose what you learned. You don't lose the degree. If you file bankruptcy you can lose your car, items, etc.
If you paid $250,000 for an education only worth $25,000, where is the debt relief?
At least writing down assets generates taxable losses.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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SharperDingaan

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Re: Free college
« Reply #21 on: May 06, 2019, 06:04:24 AM »
The whole argument for educational loan forgiveness is that this was predatory lending, the same as the predatory mortgage lending that gave rise to the GFC. If it was OK to bail those people out of predatory lending, then how come it is not OK to bail me out for the same thing? What gives?

The reality of course is that the borrowers weren't bailed out.
Hundreds of thousands of home owners paid the penalty for 'moral hazard', and were foreclosed on. Lenders also paid the penalty for 'moral hazard', as per Lehman Bros. Then we discovered too big to fail ....  and now argue that educational predatory lending is a systemic problem that is too big to ignore. Most would agree.

As in any divorce or separation, blame is shared; as the breakdown didn't happen by itself.
There's hard conversation, and ultimately an agreement that is worked out.

We would suggest that the solution may be as simple as NOT making student loans available to anyone under 21 ('traditional' age of maturity); and leaving loan terms essentially the same as they are today. If you are going to rely on the public purse, you do so as a more mature individual, better able to make the right decisions for you. Still free to screw up, and mommy/daddy still free to send you to school early - but it's on their dime. A first year 17yr old is now in a class of first year 21yr olds, EVERYBODY'S game is raised, and more of school is on-line, versus in-class. Culture change.

You're still free to pay 250K for 25K of value, and stupid is still stupid.
The same as its always been.

SD








 


« Last Edit: May 06, 2019, 07:44:37 AM by SharperDingaan »

50centdollars

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Re: Free college
« Reply #22 on: May 06, 2019, 06:15:17 AM »
People are free to make stupid decisions in life. Why should we bail them out? Should I feel sorry for them?

Take this lady for example.
https://www.cbsnews.com/news/student-loan-debt-seniors-owe-billions-in-student-loan-debt-this-will-follow-me-to-the-grave/

CBS News met Stupida on the campus of San Luis Obisbo State University, where she got her master's degree 19 years ago.   She was 57 years old then, at a time when most people would be planning the last few years of their working life and counting down the days to retirement.   Instead, she stupidly decided to borrow money to get a Master's degree at age 57.  Surely, the remaining five or ten years left in her working life would justify the tens of thousands of dollars in tuition and other educational costs, right? She is foolish. Why should people bail her out?
50centdollars

stahleyp

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Re: Free college
« Reply #23 on: May 06, 2019, 06:25:01 AM »
“If college is free, then what about the problems of all the fools who saved & worked to pay for their education?  All those whose worked extra hours and scrimped and saved to pay on their student loans?
“What about the people who took out hundreds of thousands in student loans and can't get a job that pays ANYTHING near enough to pay back their loans?  They are jammed up for DECADES.”

This is a bad argument.

“If we cure cancer, what about all the people who had cancer and died!!!”

People made choices to go to certain colleges (or to party or to work). Those choices should have consequences. Virtually no one chooses to get cancer.

I agree, dtejd. Educators should also be held responsible.

And tons of people smoke tobacco products, knowing it greatly increases their cancer risk.
If we cure cancer, should we only make the cure available to non-smokers?

The underlying logic of acknowledging we have a problem but rationalizing a reason to leave it unaddressed is pure sillyness.

Quote
Student loan debt is fundamentally different. You don't lose what you learned. You don't lose the degree. If you file bankruptcy you can lose your car, items, etc.
If you paid $250,000 for an education only worth $25,000, where is the debt relief?
At least writing down assets generates taxable losses.


We'll I suppose a big reason I'm not very liberal anymore is the abjection of personal responsibility. Bailouts lead to a lot of moral hazards which we see more and more of. I think colleges and student should take responsibility - not others.

I think we can agree that life and death are a little more serious than student loans.

Let's say someone goes to community college for two years (then transfers to a low cost university), works and lives at home the full time. They end up with no student loans (but less of the college "fun"). While the other person didn't worry about that and graduates with $50,000 in loans. Why is it fair to pay cover the costs of the 2nd person?

Now, if the purpose is to stimulate the economy, we could forgive X amount of dollars for students but then also give every other citizen the same amount of X dollars. After all, it's just pushing a button! Giving everyone X will certainly stimulate the economy more than just paying off some debt.

As far as the write off is concerned...I don't think tax payers get any benefits if their fellow citizens don't pay.  Now, I could get more behind lenders who are not taxpayers taking a hit especially with the normally higher interest rates.
« Last Edit: May 06, 2019, 06:28:12 AM by stahleyp »
Paul

LC

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Re: Free college
« Reply #24 on: May 06, 2019, 07:14:43 AM »
Quote
We'll I suppose a big reason I'm not very liberal anymore is the abjection of personal responsibility. Bailouts lead to a lot of moral hazards which we see more and more of. I think colleges and student should take responsibility - not others.
I think it's a bit of a stretch in characterization to label liberals in such a way. If you look at the situation now, who has "abjected personal responsibility"?

Two facts:
1-From the data I have seen, an entire generation of students are definitely suffering from the current student loan status quo (lower home ownership rates, lower savings rates, etc.)

2-For lenders, prior to making a loan they must assess two major risks: credit risk and default risk. Yet for student loans, lenders can gleefully ignore any default risk, and there is a natural mitigation to credit risk.

So we have a situation that, when students are irresponsible and take out "bad loans", they are punished.
Yet when lenders make these "bad loans", their risk is strongly mitigated.
To me it is clear which group is "abjecting personal responsibility"

Quote
Let's say someone goes to community college for two years (then transfers to a low cost university), works and lives at home the full time. They end up with no student loans (but less of the college "fun"). While the other person didn't worry about that and graduates with $50,000 in loans. Why is it fair to pay cover the costs of the 2nd person?
Just because someone is too poor, or too ignorant, or too short-sighted to decline predatory loans, this does not make it OK to offer them in the first place.

And when predatory loans were made in the past, there is a responsibility to make that right. Government enables such a poor structure to exist and should share responsibility in making it right.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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Cardboard

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Re: Free college
« Reply #25 on: May 06, 2019, 07:41:24 AM »
Why should people such as electricians and plumbers who are really needed by society but, who do not require expensive degrees pay for people who need expensive degrees but, do not always contribute to society?

Really can't see the justification for government nor any of taxpayer paying for someone going to do an English literature degree for example.

For that matter, I really can't see either why taxpayers should pay for doctors, engineers and other well paid graduates. The rate of return on the investment is well worth the sacrifice by the individual.

Cardboard

stahleyp

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Re: Free college
« Reply #26 on: May 06, 2019, 09:17:54 AM »
Quote
We'll I suppose a big reason I'm not very liberal anymore is the abjection of personal responsibility. Bailouts lead to a lot of moral hazards which we see more and more of. I think colleges and student should take responsibility - not others.
I think it's a bit of a stretch in characterization to label liberals in such a way. If you look at the situation now, who has "abjected personal responsibility"?

Two facts:
1-From the data I have seen, an entire generation of students are definitely suffering from the current student loan status quo (lower home ownership rates, lower savings rates, etc.)

2-For lenders, prior to making a loan they must assess two major risks: credit risk and default risk. Yet for student loans, lenders can gleefully ignore any default risk, and there is a natural mitigation to credit risk.

So we have a situation that, when students are irresponsible and take out "bad loans", they are punished.
Yet when lenders make these "bad loans", their risk is strongly mitigated.
To me it is clear which group is "abjecting personal responsibility"

Quote
Let's say someone goes to community college for two years (then transfers to a low cost university), works and lives at home the full time. They end up with no student loans (but less of the college "fun"). While the other person didn't worry about that and graduates with $50,000 in loans. Why is it fair to pay cover the costs of the 2nd person?
Just because someone is too poor, or too ignorant, or too short-sighted to decline predatory loans, this does not make it OK to offer them in the first place.

And when predatory loans were made in the past, there is a responsibility to make that right. Government enables such a poor structure to exist and should share responsibility in making it right.

I agree that for private loans (as I listed) could be challenged. I never said students aren't getting screwed. I also would be in favor of the government getting out of the student loan market completely.

Don't you believe in evolution? The short-sighted should punished. That's how societies advance! ;)

I'm still trying to figure out how bailing short-sighted people out is "fair." You don't believe you should be rewarded for your talent?

How about we also give money to people who were too short-sighted to invest properly or save enough? The stock market is pretty predatory too.
« Last Edit: May 06, 2019, 01:23:42 PM by stahleyp »
Paul

LC

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Re: Free college
« Reply #27 on: May 06, 2019, 03:10:48 PM »
Quote
I never said students aren't getting screwed
Then we are in agreement. The current situation is incredibly unfair to student borrowers. We have a lending system for these loans which is inefficient and skewed, and it creates a tremendous burden on students, for the risk-less benefit of lenders and schools. This is the problem that we should be trying to address.

Your argument about "short-sighted" borrowers is trivial. All borrowers of student loans have been subject to an absurdly inefficient market (with the scales tipped decidedly against them).

Quote
Don't you believe in evolution? The short-sighted should punished. That's how societies advance! ;)
Evolution states that most well-adapted survive in nature, nothing more or less.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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brk.b | irm | mo | nlsn | pm | tap | v | vz | wm

stahleyp

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Re: Free college
« Reply #28 on: May 07, 2019, 06:01:33 AM »
Quote
I never said students aren't getting screwed
Then we are in agreement. The current situation is incredibly unfair to student borrowers. We have a lending system for these loans which is inefficient and skewed, and it creates a tremendous burden on students, for the risk-less benefit of lenders and schools. This is the problem that we should be trying to address.

Your argument about "short-sighted" borrowers is trivial. All borrowers of student loans have been subject to an absurdly inefficient market (with the scales tipped decidedly against them).

Quote
Don't you believe in evolution? The short-sighted should punished. That's how societies advance! ;)
Evolution states that most well-adapted survive in nature, nothing more or less.

How have all borrows been subject to an inefficient market? If you can take a loan at 3% for 30 years, that sounds good to me. Now, if you're saying it's inefficient because they can't lose the loan in bankruptcy, I'm not so sure if if it's inefficient if they know the rules when they sign up.


So your values are determined by evolution, right? Why work against the system that brought us so much success. It's almost like fighting capitalism!
Paul

SharperDingaan

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Re: Free college
« Reply #29 on: May 07, 2019, 07:23:27 AM »
The student can't escape the loan ... but doesn't really have to pay it back either.
Sure non payment will wreck the students credit rating - but the student can't borrow (on his/her name) anyway, because there's no FCF to service any new debt. HOWEVER the student CAN (at any time) simply stop paying, save their current debt service, use the cash to buy T-Bills, and then obtain credit by margining against those T-Bills. Simple substitution of the T-Bill's credit rating, for your own, through the magic of 'beneficial ownership'  ;)

Well beyond the capabilities of an arts student, but well within the capabilities of the best and brightest finance people of the affected generations.
And if you can debase the use of a FICO score (credit rating) through P2P block-chain smart contract solutions ....  :D

Neccessity is the mother of all inventions, and she's very good at it!

SD