1. The KillerFrogs

wsj - student loan debt costing us more than $400B

Discussion in 'The Pit' started by Eight, Nov 23, 2020.

  1. anyone read the wsj article about the impending student loan debt bomb that is fast approaching the amount of money lost supposedly by the banks during the subprime=mortgage crisis?

    curious what changes are going to take place over the next few years as this current model where loans are given with little to no way for them to repaid is headed towards a collapse
     
    Sweat Equity likes this.
  2. A few days ago, I was told "too bad so sad, you chose to take on the debt so deal with it" was a solution. Wonder how that'll work out.
     
  3. think there are multiple issues here and if i recall correctly your position centered around the impact on the economy being impacted by students taking on extreme levels of debt with no real signs they can pay off their debt in the near future.

    the problem extends beyond the individuals owing the debt much akin to health care in america. simply providing coverage to everyone doesn't fix the problems and truly fixing the problems are going to disrupt some big parts of the economy
     
  4. The biggest problem is the cost of a college education. How does forgiving a bunch of debt fix that? And what has been one of the main contributors to the rising costs over the past few decades?
     
  5. There should be zero bailouts for student debt, but Biden will give the left what it wants. Government needs to get out of the education game, but it won't. Colleges and Universities should be subject to market forces without Government assistance, but that won't happen. Individuals who signed for these loans need to learn the hard way to be responsible, but they won't.

    In other words, we're screwed.

    Those of us who were responsible will get bent over, again. At some point I have to stop and wonder why I scarified, worked so hard, spent 60+ hour work weeks, missed out on family time, and piled on the stress to be responsible for my own well being and financial obligations. If the government is going to tax me into oblivion because I dared to do things the right way while giving my hard earned property, my LIFE, to others then maybe it is time for us to revisit a point our founders knew all too well. That point being: "... when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."
     
  6. Interesting anecdote (and do not read too much into this as there are multiple variables): The average student loan payment (for all accounts, if there are multiple lines) for a graduate is $393.00.
     
    Eight likes this.
  7. Take the average person with the $393.00 debt payment and I bet I could redo their budget and EASILY find that much money available to pay down their debt. Might not get to drive quite as nice a car, live in the trendiest part of town, get all the movie channels or souped up cellular plan, or be able to party at all the cool places on the weekends, but I could find a way they could make that $393.00 payment. Hell, for extreme cases they might even have to take on a part-time weekend job. How awful would that be?
     
  8. Anecdotal for sure, but my ex's younger sister went to SMU and accumulated a big chunk of student debt while she took 5 years to get her Art History degree, and this is a family that absolutely could not afford a school like SMU, hence the debt. Idiotic to ever go there in the first place, much less pay that to study art Well, she's 36 now and on her third brand new car, the first one being a Hummer and the third one a Cadillac SUV (can't recall what the second one was). Takes a couple cool vacations every year. And she still has several years to pay off her debt. Net worth is probably less than $10k.

    I have no patience or sympathy for stuff like that. Just completely clueless when it comes to finances. You could give her $500,000 tomorrow and she'd blow it all within 3 years.
     
  9. That's was me and I stand by the comment COMPLETELY. It's an AWFUL idea.
     
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  10. #10 Todd D., Nov 23, 2020
    Last edited: Nov 23, 2020
    Imagine being so out of touch that you think you can take the average 20-something in 2020 and "easily" find them an extra $400. Cripes.

    But you're right, theoretically you can make it work. Because, well, you have to, it's not like you can ever discharge the debt through bankruptcy. So you make your payments. You just have to do easy things like "not have disposable income", "don't buy a house" and "avoid having kids". You know, the things that keep the economic engine of the United States going. That's kinda the point. The weight of debt that we are incurring is harming the US economy for everyone.
     
  11. "Colleges and Universities should be subject to market forces without Government assistance, but that won't happen."

    this is the elephant herd in the room that continually gets missed in all the discussion about student loan debt.

    the outright greed and arrogance compares with any industry and it is stunning what schools and programs try to pull for individuals who already have a viable degree and won't to basically extend from there.

    a therapist at the hospital my wife works at has decided they want to get out of the hospital setting, just a new specialization in their field, researched and applied to programs, and was accepted only to be told they would need to retake all of their core science classes because they are more than 5 years old.

    this is a person who has been working in a hospital setting for 8 years since graduating and is now being told they need to retake biology, chemistry, a&p because they took those classes more than 5 years ago. why?

    the extra classes/books/lab fees will run them an added $4K and when that was mentioned does anyone want to guess what option was mentioned to them?
     
  12. you mean like my three kids who are thankfully employed, pay their bills, and seem to still do a few things

    should we not stop the very process that is getting these kids so far in debt by turning off or at the least slowing the tap to student loans?
     
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  13. Happy for them. We know that's not the case for many / most.

    1) As a general rule, "crippling deflation" isn't a great solution for many problems, but yes we need to make sure that future generations are not crippled with debt the way the current generation is.

    2) That prevents future issues, but doesn't address the mess we're in today.
     
  14. I could easily find the extra $400/month. These are college graduates, not people making $30k/year.

    Your solution doesn't seem to be much more than "we gotta double down on stupid stuff because if we don't it'll hurt the economy."
     
    GoFrog Yourself likes this.
  15. You basically just described me. Well except for the part about not being able to buy a house (bought two of them) , have disposable income, and avoiding kids (got two of them also). And I paid off my $32k in student debt in 3 years. After graduating from TCU I worked full time and went to night class 45 minutes away to get my Masters degree paying my own way. 2-3 nights a week I left the house at 7am and got home at 10:30 pm. GTFO

    I'm on board with forgiving some/all student debt, but it has to go hand in hand with collapsing the system. For absolute starters - student loans need to be fully underwritten.
     
  16. bigger question is not the amount of the loans, but where are the jobs that were promised to them when they went to college?

    maybe we should also do something about real estate costs?

    as i said, this situation is very much like the health care discussion in that we latch onto what appears to be the simplest solution when it only scratches the surface of the issues
     
    Todd D. likes this.
  17. 150 years ago, people would pack everything they owned up in wagons and make weeks-long treks (often through very dangerous territories) to other parts of the country in hopes of bettering their lives. Nowadays, a lot of the people bitching about their student loans would be unwilling to move from Fort Worth to Granbury or Amarillo, even if doing so promised a higher paying job (combined with lower cost of living) allowing them to pay off their debts. Sure there are some that would do it, but that percentage is very small.
     
  18. Well done, and I mean that sincerely. Must have had a pretty killer job to to afford $900+ monthly student loan payments and have two mortgages within three years of college. Surely you recognize that experience is not the norm for most bachelor degrees, even revenue-focused STEM degrees.

    There aren't too many people that disagree with this, as far as I know. I think everyone agrees the current system of "take on a boatload of debt to finance your post-secondary education" needs to end, even if there are very different solutions on how best to "collapse" that system. Regardless, my point is "address current debt load" and "make sure future generations don't have a ton of debt" are not mutually exclusive. I am just responding to "fix it going forward, but it's too bad for the folks already dealing with the debt, they made their bed". I don't think that's solid public policy that benefits the economy, nor do I think it's particularly just when we all recognize the role the government had in creating the debt crisis in the first place.
     
  19. this, one very bad trait that has gotten exposed in the covid world is those who don't want to go back to the office, go back on the road etc... but don't want a change in their compensation

    our son is one of the very few project managers for his firm that has been willing to travel even though the track record for overseeing projects remotely has been a disaster and will require a number of projects be revisited in 2021.

    our oldest has a good friend in chicago who had continually switched jobs every 6-8 months because she was struggling with the demands on her work / life balance and this is a person that as far as i have known isn't in a relationship, has no kids, and i think a cat.

    compare that to what my wife has seen from a number of filipino nurses she has worked with over the years who will work their 3 12's at their primary hospital and then work 1-2 other shifts and basically are banking everything from that second job
     
    Bob Sugar likes this.
  20. To be clear - never had two mortgages at same time (well I did for like three months). Sold and bought another house and my repayment "clock" started after Masters was finished, so it was like 5 years after I left TCU. Made one lump payment and cleared it. My job was good, but nothing insane like IB or big law; it took work and sacrifice.

    I'm worried if we forgive a giant chunk of student debt, it's going to make buying my next home increase by $100K as I'm now competing with a chunk of people who would be priced out otherwise. That doesn't make me feel great.

    I'm in total agreement that the government royally screwed up, but just like all debt, you have to sign the dotted line
     

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