Cancel student loan debt?

[TurkeysGhost]

It seems to me that the loans should be capped at the cost of attendance of the closest state school. This helps to keep the private school affordable, since the kids can only get so much federally subsidized money.

Even then, more conditions ought to be placed on these loans on where they can be spent.

There were plenty of diploma mills that weren't outrageously expensive. Probably less than a big state school. Of course, the diploma they offered was worthless, so every dollar they received was a waste.

If we're going to continue with a loan scheme rather than just funding these state schools directly, we probably have to abandon the idea that 18 year old incoming freshman are the best arbiters of a good value. They don't know and really aren't in a position to know. The people with the most data on what is a good "investment" are the lenders and the schools. Put the due diligence requirements on them to ensure loan money isn't being frittered away on non-useful education.

Government loans should come with strict standards for what kind of schools and programs it can be used for. Private schools that can offer a good value can still receive this money, but the overpriced diploma mills would likely shrivel up and die once the government piggy bank is out of reach.

One criteria that could be used would be how many students from that school/program default. That would put pressure on schools to not overspend on non-essential things or overadmit to programs that can't realistically lead to real careers. Right now the schools really have no skin in the game. They get paid today and they don't really care if the students default, so it's a arms race to attract the most students and tuition.

This would likely have many deleterious side effects and general funding of these institutions seems preferable compared to relying so heavily on tuition fees.

 

[rdwight]

The problem is saddling kids who don't get into state schools with massive amounts of debt because they made the poor decision to try to better themselves at an expensive sub-par private school. Everyone involved in that transaction, but the kid, knows it will end in tears and sorrow.

I don't really disagree with a lot of your thoughts but this idea that 17/18 year old "kids" are incapable of thinking these ideas through are infantilizing them. They are fully capable of understanding debt, cost of paying back and that there are cheaper alternatives. That they choose the wrong one is not some societal breakdown. You bring up community colleges which are a great acceptable. If you are not getting some level of academic scholarship to help alleviate the costs, there is no reason not to start your college education at a community college.

This whole idea of the 'experience' of college being more valuable than the education is the problem. And students coming out of high school are aware of it. They just want to indulge in it too. A BA from Rutgers is indistinguishable whether you took initial courses at the community college before transferring over after your associates degree to finish there. In my experience, you will actually encounter teachers that also teach classes at the those same schools, so really, you are just missing out on the experience. And all that cost that goes with it.

 

[TurkeysGhost]

I don't really disagree with a lot of your thoughts but this idea that 17/18 year old "kids" are incapable of thinking these ideas through are infantilizing them. They are fully capable of understanding debt, cost of paying back and that there are cheaper alternatives. That they choose the wrong one is not some societal breakdown. You bring up community colleges which are a great acceptable. If you are not getting some level of academic scholarship to help alleviate the costs, there is no reason not to start your college education at a community college.

This whole idea of the 'experience' of college being more valuable than the education is the problem. And students coming out of high school are aware of it. They just want to indulge in it too. A BA from Rutgers is indistinguishable whether you took initial courses at the community college before transferring over after your associates degree to finish there. In my experience, you will actually encounter teachers that also teach classes at the those same schools, so really, you are just missing out on the experience. And all that cost that goes with it.

Outside every military base there small fortunes being made by car lots selling Dodge Chargers to new privates with 6 year, 23%APR loans. The financial illiteracy and poor judgement of young adults should not be underestimated.

Seems that the data is out already. If these students were savvy enough to avoid an obvious bad deal, why are so many in this situation now? Again, we're not talking about individuals making bad decisions, we're talking about broad swaths of the population in so much debt that it's impacting the broader economy.

 

[rdwight]

Outside every military base there small fortunes being made by car lots selling Dodge Chargers to new privates with 6 year, 23%APR loans. The financial illiteracy and poor judgement of young adults should not be underestimated.

Seems that the data is out already. If these students were savvy enough to avoid an obvious bad deal, why are so many in this situation now? Again, we're not talking about individuals making bad decisions, we're talking about broad swaths of the population in so much debt that it's impacting the broader economy.

It is not underestimated. It is encouraged and now apparently rewarded? This is fundamentally problematic. Bad decisions aren't some innate feature of being young, since a majority will repay their loans in full regardless of any help.

There are less than 1.5 million borrowers utilizing the income-based repayment plans out of nearly 45 million borrowers. Forgetting the total amount owed, either close to 3% of loans meet the criteria for this or have those who are putting in the effort to alleviate their financial situation. Why is that?

 

[theprestige]

Yeah, that clears it up. : rolleyes :: rolleyes :: rolleyes :

Circular pablum.

What is unclear to you? What about this seems circular to you?

We're loaning money to people who can't pay it back and can't even afford to get a bankruptcy ruling.

I think this raises questions about why we're loaning this money, and whether it's a good reason, and whether there might be better ways to go about doing whatever it is we're trying to do with these loans.

That's what I'm saying.

What about this is unclear to you?

 

[acbytesla]

What is unclear to you? What about this seems circular to you?

We're loaning money to people who can't pay it back and can't even afford to get a bankruptcy ruling.

I think this raises questions about why we're loaning this money, and whether it's a good reason, and whether there might be better ways to go about doing whatever it is we're trying to do with these loans.

That's what I'm saying.

What about this is unclear to you?

This was more clear. A little, but still incomplete.

We require an educated workforce now more than ever. People need to be educated to get ahead. Their education must be paid for somehow. Many do not have the credit or resources to pay for that education. Who pays and how?

 

[Dr. Keith]

I don't really disagree with a lot of your thoughts but this idea that 17/18 year old "kids" are incapable of thinking these ideas through are infantilizing them. They are fully capable of understanding debt, cost of paying back and that there are cheaper alternatives. That they choose the wrong one is not some societal breakdown.

That they are under enormous societal pressure to go to college and are making this decision with limited information and a well designed sales team from the colleges and universities sort of puts them at a severe disadvantage.

For the most part we are talking about young adults who couldn't buy a $20k Civic at the local Honda dealership and yet we are encouraging them to sign up for hundreds of thousands of dollars in education debt that is much harder to get out from under and what they get may be less useful for any job they may be looking for.

We are setting them up for failure in the guise of "helping" them. Well meaning though it may be, the debt burden can crush any future they may have.

 

[Dr. Keith]

Even then, more conditions ought to be placed on these loans on where they can be spent.

Accreditation is not an easy nut to crack, but I agree that loans for unaccredited institutions should not be made.

 

[pgwenthold]

I get it. Art is too subjective for me to have a good answer for that.

Keep in mind that Van Gogh never sold a painting while he was alive. I find Pollock's work absurd. Most of my life I didn't appreciate art at all. As I have gotten older, my perspective has changed in so many ways. I use to think art was an absurd field of study and a waste of time and money. But I now see the benefits of art education. We need creative people as opposed to someone like me without a creative bone in my body.

There are web sites to design, business logos to be made, photographs and movies to be made, etc, etc.

How do you know if someone is no good at art if you don't actually give them the chance to study it?

We have to know based on their art projects in high school whether they will be great artists or not?

 

[theprestige]

Maybe Students Loans should be tied in with some kind of public service? Earn your loan?

Being an educated, and therefore a more productive and profitable contributor to society - is the public service.

But this raises questions about whether student loans actually make the borrower educated, and whether being educated actually makes the borrower more productive and profitable, and whether these loans really get the intended return on investment.

The country is full of small businesses, but we don't hear very much about the intolerable burden of small business loans. I think this is mainly because successful business owners don't complain about being profitable and paying off their business loans. And also because we properly recognize such borrowing as a voluntary risk. If the business fails, that's on the borrower, not on society to bail them out (beyond bankruptcy protection).

The problem with student loans is that on the one hand, they're presented as an economic benefit to society, but on the other hand, getting a college degree isn't really a business endeavor, and in fact many such students come out the other side of this process as an economic drain on society.

 

[theprestige]

This was more clear. A little, but still incomplete.

We require an educated workforce now more than ever. People need to be educated to get ahead. Their education must be paid for somehow. Many do not have the credit or resources to pay for that education. Who pays and how?

I'm saying, before who and how, we should ask why.

Do we need an educated workforce? Or do we need a skilled workforce?

If we need an educated workforce, is all education equal? Are there specific industries where we have a shortage of skilled workers?

If we're loaning money, on what basis? How much education, at what quality, are we actually buying? Is it even the education needed to meet our workforce requirements?

QUESTION THE ENTIRE PREMISE OF THESE LOANS.

Why should they be loans? Why not scholarships? Why not scholarships specifically for students who make a commitment to enter the workforce in one of the key industries? Why not scholarships for students who show an aptitude and a desire to enter a key industry?

 

[acbytesla]

How do you know if someone is no good at art if you don't actually give them the chance to study it?

We have to know based on their art projects in high school whether they will be great artists or not?

I don't know. Which is my point. I'm not an art critic. I just know what I like and what I don't. But I'd never suggest I should be the arbiter to say what is good and what isn't. I also question having someone in an Ivory tower making that kind of decision either. That said, I wouldn't question my high school art teacher's assessment of my art as they really were bad.

 

[rdwight]

That they are under enormous societal pressure to go to college and are making this decision with limited information and a well designed sales team from the colleges and universities sort of puts them at a severe disadvantage.

For the most part we are talking about young adults who couldn't buy a $20k Civic at the local Honda dealership and yet we are encouraging them to sign up for hundreds of thousands of dollars in education debt that is much harder to get out from under and what they get may be less useful for any job they may be looking for.

We are setting them up for failure in the guise of "helping" them. Well meaning though it may be, the debt burden can crush any future they may have.

Again, what makes you believe them incapable of finding this information out? How many hours are spent preparing for PSAT/SAT, community service to pad their applications, filling out applications, writing essays, visiting schools.. And during this whole process, you mean to tell me they are too ignorant or incapable of figuring out the cost?

This also conflates going to college, which I have yet to see anyone here refute as not actually worthwhile to do for the vast majority except those that don't graduate, with going with the most expensive route. Or in a way they wouldn't feasibly be able to afford. Do you or your family decide on which college to go to without considering the cost at all? If not, why? If you did, what makes you think the vast majority don't as well?

 

[Emily's Cat]

If the notion of COLLEGE IS FOR EVERYONE cannot be overcome, then how about a hybrid approach? Encourage everyone to go through two years of learning a trade first, then move on to college if they want to? That way a) some people would decide to skip college and just start working and b) even the people who do go to college have something to fall back on if their history degree proves not to sufficient to keep them employed. There are simply too many people in college who shouldn't really be there, and too many people emerging from college with no tangible benefits. Teach them something that they can use to feed themselves with first, then do the extras if and when it's feasible for them.

I like this idea. I'd really like to see more focus on skilled trades overall. They pay well, and they're in fields that really don't go under.

 

[Emily's Cat]

Can we cancel mortgage debt, too? It sure would help a lot of people.



Anyway, the whole scheme is a mess. Who decided that it was a good idea to let 18 year olds pile up as much debt as they wanted? That seems like a recipe for disaster, and it turns out to be right.

Instead of just forgiving the debt, how about letting it be voidable by bankruptcy? That alone would get rid of a lot of the abuse of the program.

I dunno. I mean, sure, that's an option. I struggle a bit with the whole cancelling student loan thing, in part because it's pretty easy to get a forbearance or to change your payment structure. Heck, there are even several ways to get large portions of your debt cancelled altogether.

Things like being employed by a government agency or a non-profit entity.

 

[acbytesla]

I'm saying, before who and how, we should ask why.

Do we need an educated workforce? Or do we need a skilled workforce?

False dichotomy. What's wrong with having a workforce that is educated and skilled?

If we need an educated workforce, is all education equal?

They clearly are not.

Are there specific industries where we have a shortage of skilled workers?

yes

If we're loaning money, on what basis? How much education, at what quality, are we actually buying? Is it even the education needed to meet our workforce requirements?

Up until now the market has decided.

Why should they be loans? Why not scholarships? Why not scholarships specifically for students who make a commitment to enter the workforce in one of the key industries? Why not scholarships for students who show an aptitude and a desire to enter a key industry?

These are all good questions. But at some point, one must act. Loans are the present solution. If you think we should stop making college loans, it is incumbent on you to say what we should do instead.

 

[dirtywick]

There’s plenty of education involved in the skilled trades. Work hours is also a huge part of it, but skilled trades workers would absolutely benefit from education benefits.

 

[TragicMonkey]

Why should they be loans? Why not scholarships? Why not scholarships specifically for students who make a commitment to enter the workforce in one of the key industries? Why not scholarships for students who show an aptitude and a desire to enter a key industry?

Because scholarships just mean the educational institution doesn't charge the student: nobody else is going to make a profit off of it. That's why loans: somebody wants profit. Capitalism fetishized: we're Ferengi'ing ourselves to the point where nothing is worth doing unless somebody's getting money out of it.

 

[theprestige]

Free lunch is about opportunity costs. This is covered in Econ 101, but you might have to borrow some money to pay for it.

Funnily enough, having college educated people doing pointless manual labor to show "gratitude" is probably a great example of opportunity cost.

If college educated people are reduced to performing unskilled manual labor to pay back their education loans, then why in the ever-loving **** are we loaning them money for education in the first place?

 

[dirtywick]

Would be a good question for a bank, had they not insulated themselves from any responsibility on whether or not the investment is likely to bear a return on investment.