Student Loan Debt?

[jyoutz]

Loans have gotten out of hand, for a while back. Heck, accreditation for a lot of colleges is suspect. Again, for quite sometime. Those issues should have been fixed a while ago, now the current administration kicks in and wants to fix them using the taxpayer. The issues themselves, remain, unaddressed.

Very true. We fixed them in my state after my sons finished college. All tuition for in star high school graduates is free at state colleges and universities. Funded by lottery money.

 

[paulsharvey]

They could come up with some improvements/repairs/ect to the student loan system without going to the extremes. I know I'm going to get some (a lot probably) hate for this; but allow them to be bankrupted. Yes, I know, the US gov and tax payers would be stuck holding the bag; but we can probably just accept that atleast 40% of those loans will never be paid off. It shouldn't be any different than any other consumer debt. Yes, that could in turn lead to different rates, ability to qualify for student loans for low-value majors, But thats where it needs to go in the long run.

We need to change the whole way student loans are looked at. They are voluntary consumer debt, period. They are somewhere between credit card debit, unsecured, and a car loan that as an asset to back the loan. There is a potential asset, the degree if the student earns it, but it can't really be seized, and is of unknown value.

Maybe there could be some form of earned monthly debt forgiveness, such as the feds will forgive $250/month for a period of time for working in certain fields/professions/locations.

As a whole, I dont want the feds to do across the board forgiveness; and I also don't want the program to completely go away; but at the same time, I do recognize a legitimate argument that much of the debt is bad debt, and will never be collected.

 

[dstig1]

To have student loans be dischargeable in bankruptcy would change the game. It would also require the front-end of the process - loan application and approvals - to change. You go for a car loan and they want to make sure you have a decent chance of paying it back. Student loans have no such measure so they are mostly handed out based on "need": College will cost $X and I don't have that = need. Without the ability to accept or reject applicants based on potential to pay them back, you cannot realistically allow them to discharge the loans in bankruptcy.

And then you open the can of how do you decide? Odds are if you have an engineering or science degree you will be able to afford some level of loan repayment. But those "XXXX studies" degrees that are mostly for the protestor class? Does that automatically disqualify you? Who makes the call and how?

I do like the idea of laying some level of responsibility on the colleges to guarantee the loans. That would put the incentives much more in alignment with the goals. Maybe a 50% payback guarantee if they default? The colleges are the ones that 100% benefit from these loans, so they should have skin in the game.

 

[MossRoad]

Why aren't people using this program??

One of my kids did, but then got a job where their employer helped pay off the loan, so no need to pay for 25 years.

https://studentaid.gov/manage-loans/repayment/plans/income-driven

 

[paulsharvey]

Why aren't people using this program??

One of my kids did, but then got a job where their employer helped pay off the loan, so no need to pay for 25 years.

https://studentaid.gov/manage-loans/repayment/plans/income-driven

I did scan over that link, but didn't see the income guidelines. My assuming is either A: people have no idea its out there; or more likely B: as much as people complain, they aren't sitting there below the property line with a bachelors

 

[MossRoad]

I did scan over that link, but didn't see the income guidelines. My assuming is either A: people have no idea its out there; or more likely B: as much as people complain, they aren't sitting there below the property line with a bachelors

https://studentaid.gov/manage-loans/repayment/plans/income-driven#eligibility

 

[kenmbz]

Don;t see any income ranges for this, I will look more later.

 

[drssg]

I find it strange how some people just don't seem to care about going into debt. I know a young woman that was taking online classes for free as a benefit of working at Walmart. She decided that she wasn't getting the "college experience," so she took out loans and is attending classes in person.

She is majoring in English, and she has visions of being a proofreader at a publishing company. I don't know whether that's very likely, but it sounds a bit flaky to me.

IMO, student loans should only be available for degrees that are likely to show a good return.

 

[MossRoad]

I find it strange how some people just don't seem to care about going into debt. I know a young woman that was taking online classes for free as a benefit of working at Walmart. She decided that she wasn't getting the "college experience," so she took out loans and is attending classes in person.

She is majoring in English, and she has visions of being a proofreader at a publishing company. I don't know whether that's very likely, but it sounds a bit flaky to me.

IMO, student loans should only be available for degrees that are likely to show a good return.

Our son in law had to take out loans to go to vet school. But he's taken classes and consulted attorneys that specialize in veterinarian debt repayment. He and our daughter have a very good outlook on the repayment plan. So much so, that she's starting vet school in the fall. YIKES! However, they've showed us the plan and numbers and they'll be able to afford a normal life and repay the loans. We're very excited for them.

 

[Hay Dude]

Buying votes is easier when you don't fix issues, but throw money borrowed from China at the issue. Fixing issues actually takes responsibility, and who wants to be responsible? It's more palatable to tell people they "deserve" things.
The "solution" we have now, will in effect only exacerbate the problem over time... But people don't care about that, they care about today and only today.

ehhh, what’s another trillion in debt when you’re already 35 trillion in debt???