Millions of US Seniors Still Owe Student Loan Debt (msn.com) 172
Valerie Warner is 71 years old — and owes $268,000 in student loans.
Roughly 40 years ago she went to law school, but was only able to find work as a legal aid and later work in the public school system, which the Washington Post calls "a rewarding job but one that didn't pay enough to wipe out her loans." Later she earned a masters of education degree: All told, Warner borrowed a total of about $60,000 for her two advanced degrees. The amount seemed reasonable given the career trajectory that both credentials promised, but that path never materialized. Working a series of low-wage jobs, she went in and out of forbearance before ultimately defaulting. The balance ballooned to the current $268,000 total over the years due to collection fees and interest capitalization.
And she's not the only one in debt. "On a dreary December afternoon, a group of senior citizens stood in the rain outside the Education Department pleading for relief from a debt that many fear will burden them for the rest of their lives..." Some sat in rocking chairs, cross-stitching their debt number in a pattern. Others held signs that read, "Time is running out, sunset our debt." Or wore T-shirts saying, "Debt relief before we die...."
[A]ctivists are urging the U.S. Education Department to discharge the student debt of older borrowers who they say are in no position to repay. They say the department could use a little-known federal statute that considers a person's ability to pay within a reasonable time and the inability of the government to collect the debt in full. There are 2.8 million federal student loan borrowers aged 62 and older with a total of $121.5 billion in debt, more than 726,300 of them over the age of 71, according to the Education Department. Older borrowers are one of the fastest-growing segments of the government's student loan portfolio, and their Social Security benefits are subject to garnishment...
The Education Department would only acknowledge receiving a memo from the Debt Collective, the group organizing the campaign, outlining the agency's authority to cancel the debt of older borrowers. The activist organization said it has been meeting with members of Congress, White House committees and Education Department officials about the matter since September. "Many of these folks have been borrowers for 20 or 30 years, with punishingly high interest rates. Their balances and the way they have dragged on for decades is just an indictment of the broken system and the failure of past relief efforts," said Eleni Schirmer, an organizer with the Debt Collective... According to the think tank New America, the number of Americans approaching retirement age with student loan debt has skyrocketed over 500 percent in the last two decades. Some have loans they took out to finance their college educations, while others took out federal Parent Plus loans or co-signed private loans for their children.
The article points out that the U.S. government will garnish up to 15 percent of the Social Security income to recoup student loan debt, even if it means leaving recipients below the poverty line.
But it also includes this quote from Adam Minsky, an attorney who specializes in student debt, about the prospects for federal action that survives challenges in the U.S. court system. "[A]s a practical matter, I don't think that judges and courts that have been hostile to mass debt relief would treat this differently from other programs that have been blocked or struck down."
Roughly 40 years ago she went to law school, but was only able to find work as a legal aid and later work in the public school system, which the Washington Post calls "a rewarding job but one that didn't pay enough to wipe out her loans." Later she earned a masters of education degree: All told, Warner borrowed a total of about $60,000 for her two advanced degrees. The amount seemed reasonable given the career trajectory that both credentials promised, but that path never materialized. Working a series of low-wage jobs, she went in and out of forbearance before ultimately defaulting. The balance ballooned to the current $268,000 total over the years due to collection fees and interest capitalization.
And she's not the only one in debt. "On a dreary December afternoon, a group of senior citizens stood in the rain outside the Education Department pleading for relief from a debt that many fear will burden them for the rest of their lives..." Some sat in rocking chairs, cross-stitching their debt number in a pattern. Others held signs that read, "Time is running out, sunset our debt." Or wore T-shirts saying, "Debt relief before we die...."
[A]ctivists are urging the U.S. Education Department to discharge the student debt of older borrowers who they say are in no position to repay. They say the department could use a little-known federal statute that considers a person's ability to pay within a reasonable time and the inability of the government to collect the debt in full. There are 2.8 million federal student loan borrowers aged 62 and older with a total of $121.5 billion in debt, more than 726,300 of them over the age of 71, according to the Education Department. Older borrowers are one of the fastest-growing segments of the government's student loan portfolio, and their Social Security benefits are subject to garnishment...
The Education Department would only acknowledge receiving a memo from the Debt Collective, the group organizing the campaign, outlining the agency's authority to cancel the debt of older borrowers. The activist organization said it has been meeting with members of Congress, White House committees and Education Department officials about the matter since September. "Many of these folks have been borrowers for 20 or 30 years, with punishingly high interest rates. Their balances and the way they have dragged on for decades is just an indictment of the broken system and the failure of past relief efforts," said Eleni Schirmer, an organizer with the Debt Collective... According to the think tank New America, the number of Americans approaching retirement age with student loan debt has skyrocketed over 500 percent in the last two decades. Some have loans they took out to finance their college educations, while others took out federal Parent Plus loans or co-signed private loans for their children.
The article points out that the U.S. government will garnish up to 15 percent of the Social Security income to recoup student loan debt, even if it means leaving recipients below the poverty line.
But it also includes this quote from Adam Minsky, an attorney who specializes in student debt, about the prospects for federal action that survives challenges in the U.S. court system. "[A]s a practical matter, I don't think that judges and courts that have been hostile to mass debt relief would treat this differently from other programs that have been blocked or struck down."
Seems obviously wrong (Score:4, Informative)
If you haven't recouped your loan in decades, garnishing social security and pushing someone below the poverty line at the end of their lives is just plain evil.
Re:Seems obviously wrong (Score:5, Insightful)
What's also wrong, is that educational institutions don't take a hit when borrowers default. If their money was at risk, they would be a little more careful about which students, and what kind of degrees, they agreed to accept through financing. Instead, taxpayers are on the hook when borrowers fail to pay.
In home mortgages, part of the mortgage application process is proving one's ability to repay. This should be part of the student loan process too.
Re:Seems obviously wrong (Score:4, Insightful)
"This should be part of the student loan process too."
Sure, as if this were possible or it would do anything. For all we know Valerie Warner had an ability to repay.
We should educate our children, a lifetime of debt should not be part of that process. If that were the case, stupid solutions like yours would not be needed.
Re:Seems obviously wrong (Score:4, Interesting)
We should educate our children, a lifetime of debt should not be part of that process
I think you are advocating for fully government-funded education, right?
What about religious studies? Should government fund that too? Should ALL education at every level be government funded? What about students who never apply themselves, just going for the free ride and the party school atmosphere? Should government fund these students too? What about career students, who keep signing up for degree after degree? Should we fund those too? Where do we draw the line?
Re:Seems obviously wrong (Score:5, Insightful)
> I think you are advocating for fully government-
> funded education, right?
For certain degrees, why not? An educated populace is a productive and innovative populace. A productive and innovative populace is good for the country in pretty much every way. Productive and innovative people typically don't fall into welfare, SNAP, and other aspects of poverty and they bounce back quicker from unemployment. The higher incomes lead to a higher tax base which pays for necessary infrastructure and supports better social services for those who do fall into bad times and need them. Productive and innovative people invent the cool things like the computer I'm typing this on and they found the companies that build them and hire more productive and innovative people. Paying off educations... USEFUL educations that lead people to productivity and innovation... is a win/win for all. We used to actually understand this in the US. During the Cold War, and especially during the space race, the patriotism of encouraging children to stay in school and become scientists and engineers to help fight the communists by out-innovating and out-producing them was very much a thing. And it's a thing that we goddamned well need to bring back the way things are going with China.
But yeah, it doesn't have to be all or nothing. And there has to be a line. It shouldn't be all or nothing; but a variable payoff based on someone working to get a real education, not slacking off at a party school. If I were to implement it, it would go something like:
Work a full-time (15+ credits) course load towards a fully-accredited STEM degree and maintain a 3.5 or better GPA; and you get your free ride. Hell... go ahead and also pay for the dorm room and meal plan in this case. If someone decides to slack or goof off and drop to a part-time schedule or let their grades fall below that 3.5, then start scaling the financial aid down accordingly, with a clearly documented GPA/credits -> tuition payment matrix. And if some wastrel wants to major in water polo or underwater basket weaving just so they'll be allowed on campus to goto the frat parties; they can go ahead and pay the full tuition, room, and board themselves. (Or they can have Aunt Becky pay. IDGAF, just so long as they don't get one red cent of public money and they stay away from, and don't interfere with, the people who are actually there to get an education.)
Re: (Score:3)
USEFUL..STEM...water polo or underwater basket weaving
Who decides what is "useful"? And why is it limited to STEM? I, as a STEM major, would tend to agree that my degree is more "valuable" than something in the arts/theater/communications/history/whatever fields. But I'm biased. There are definitely arguments to be made that all of those fields are necessary, and incredibly valuable, in a productive society. The world would be a boring place if you let the engineers do everything.
The rest of the proposal, carrot-and-stick to get people to contribute to a pro
Re: (Score:3)
An educated populace is a productive and innovative populace.
Unfortunately, this is not as true as it sounds. An over-educated population is one stricken with unemployment and widespread depression. This is because there is only so much work available for educated labor. When the labor supply is too high, salaries crash or jobs just vanish, and the students consider themselves to be too educated for blue-collar labor. We have seen this happen in many countries.
There is also a problem of too much emphasi
Re: (Score:2)
Here is one thought: nix the current student loan model and go back to a traditional loan model. The taxpayers are no longer on the hook. The money lenders are the ones who eat it if the student defaults. This will of course have many side-effects, including a severe drop in the number of student loans awarded.
Or much higher interest rates to create the same return after defaults.
The other consequence is that some smart people take out lots of loans, then declare bankruptcy when they graduate. Loans gone and get on with their lives. The result is you can only get a loan if you don't need it.
So we go back to a time when only the upper classes could go to college. Which means a lot of talented people never get the training to make full use of their abilities.
Its Ok though. We can bring in H1b workers from the parts
Re: (Score:2)
" An educated populace is a productive and innovative populace. "
Definitely untrue.
You can be the most educated American in history but you still may find yourself unable
to work because of how expensive a domestic employee is compared to an import.
Thus is the reasoning of nearly all Corporations in this Country who will settle for far less
in the education / experience department as long as the applicant is willing to do it cheaper.
Re: Seems obviously wrong (Score:2)
Government could fund educations for needed services like health care and tech.
Religion isn't necessary and is often slowing down progress.
Re: (Score:2)
We should educate our children, a lifetime of debt should not be part of that process. If that were the case, stupid solutions like yours would not be needed.
Exactly. A country that does not fund its people's education can expect an uneducated people. That is bad for everyone.
Re: (Score:2)
It's not bad for shitty amoral hack politicians who would exploit an uneducated populace. And look who's always eager to defund public education...
Re: Seems obviously wrong (Score:3)
They often see prayers as the solution to a problem.
- Can't get a job. - Pray more.
Re: Seems obviously wrong (Score:2)
We should educate our children, a lifetime of debt should not be part of that process. If that were the case, stupid solutions like yours would not be needed.
There's already a better solution that is already available and always has been available: Don't go to expensive schools. That's it, that's all there is to it. There's been a ton of research to support this: Expensive schools don't provide better outcomes. The highest indicator of success is the quality of the student, not the quality of the school.
I don't know what the fuck possesses you progressives to believe that the right answer to excessively high tuition rates is to spend more of other people's money
Re: (Score:2)
With kids, it's too speculative; you're not investing in the individual, you're investing in the entire cohort and looking for a statistical victory.
While funding for vocational tracks has a somewhat predictable ROI, paying for the extended education of the big brains... even if they change the damn world they often don't make a lot personally. And you need those people or progress grinds to a halt, and often when that happens it then begins to revert. We don't have a decent model to calculate how investi
Re: (Score:2)
It doesn't make sense to justify funding for all, based on edge cases. Those people who "might" change the world...they're going to find a way to do it regardless of their education status. Steve Jobs and Michael Dell are two great examples.
On the other side of the spectrum, if a high school student barely skates to a diploma, that student is not a good bet for funding for a college education, for *any* kind of return on investment. There are a lot more of those, than brilliant world-changers.
Re: (Score:2)
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There are criteria other than job experience, that can help determine the credit-worthiness of a student. For example, a student who is just barely passing their classes, is not likely to graduate, much less be able to repay their student loans. Also, a student in a Humanities major is much less likely to be able to repay loans, than a student with a CS major. I'm sure the number crunchers can come up with other criteria as well. The issue is, when a student has a loan that they can walk away from, why shou
Re: (Score:2)
Re:Seems obviously wrong (Score:4, Interesting)
In home mortgages, part of the mortgage application process is proving one's ability to repay. This should be part of the student loan process too.
Except that with student loans the borrower is getting an education specifically so they can potentially achieve a higher income level, thus improving the likelihood that the loan will be repaid. As with any investment, there's an element of risk because market job conditions can change by the time the student is done with school.
While in principle it might seem like a good idea not to give a loan to a student seeking to major in something like "gender studies", the end result of limiting the approved loan criteria to only marketable majors would be an over-saturation of the labor market in those fields, thus actually decreasing the likelihood that those graduates would be able to repay their loans due to depressed wages. Economics is hard.
Re: (Score:3)
If there is no market for graduates with gender studies majors, and therefore they won't be able to repay their loans, then let's be honest up front and call it a grant, instead of a loan. Let's not pretend it's a loan, knowing full well that that money is never coming back.
Re: (Score:2)
A gender studies degree is typically a journalism degree or a sociology, so there definitely is a market for those skills.
Re: (Score:2)
The problem is people like you who hate actual journalism.
Re: Seems obviously wrong (Score:2)
Dude you've literally created disinformation right here on slashdot, and you're trying to argue that I'm the one who hates actual journalism?
It's actually kind of funny because I'm the one who usually calls out bullshit like what you produce. Unlike you, I don't deal in conspiracy theories or just making shit up on a whim. Like that time I pointed out that 70% of Palestinians believe that hamas's October 7th attack was the correct thing to do, several others immediately shat on it, and I'm pretty sure you w
Re: (Score:2)
Journalism tends to make conservatives look bad, and socialism seem like a good idea... So what you actually want is glorified bloggers and YouTubers repeating conservative rhetoric.
Actual investigations, detailed analysis, all the stuff real journalists do... Is toxic to rightists.
Re: (Score:2)
Journalism tends to make conservatives look bad, and socialism seem like a good idea...
I don't know about conservatives, nor do I really care, but I've never heard of any actual journalists talking about how great North Korea, Cuba, and Venezuela are doing right now. Given you yourself are literally a purveyor of disinformation, it would make sense that you tell everybody the exact opposite.
So what you actually want is glorified bloggers and YouTubers repeating conservative rhetoric.
So reuters is "glorified bloggers and youtubers"? Not only does that not make any sense, but come to think of it, your buddy rsilvergun always talks about how much time he spends on youtube.
Actual investigations, detailed analysis, all the stuff real journalists do... Is toxic to rightists.
Given it is obv
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The fact that when I say socialism you think North Korea speaks volumes.
One example of how US journalism has died is the failure to explain what life is like in Europe.
Re: Seems obviously wrong (Score:3)
For sure what I can agree with here is: why is this always viewed as a predatory lender problem, and never a predatory supplier of the product problem? Why are not these schools held accountable for the massive fees they charge?
Re: (Score:2)
That would lead to many degrees that are valuable to society but not very lucrative going away. Would probably see some discrimination against women of child baring age too.
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That would lead to many degrees that are valuable to society but not very lucrative going away
Jobs that pay well in society, are jobs that companies struggle to find qualified people. If a particular degree doesn't lead to well-paying jobs, this is an indication that there is an oversupply of people with that set of knowledge. That makes it a good thing to discourage people from pursuing such degrees. They are *not* in fact very valuable to society, because there is an oversupply already.
If you're worried about discrimination against groups who might not have the ability to repay (like childbearing
Re: (Score:2)
Librarians are a good example - they provide education, improve opportunities for people, preserve our culture, and much more. Little commercial value though.
Or teachers. Education is someone else's problem. Business want educated employees, but won't pay for them to learn.
The invisible hand of the market is too busy wanking over this quarter's figures to provide the things we need.
Re: (Score:2)
Guess what, there is an oversupply of people qualified to be librarians. That's why the job doesn't pay well.
And there\'s an oversupply of people who are qualified to teach. That's why the job doesn't pay well.
Of course, librarians and teachers are critically important! But there is also an abundance of people qualified for these jobs.
If we think the jobs are important enough that we should fund their education, fine. Call it a grant, not a loan. A loan is expected to be paid back. If we don't really expect
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Yes, given the amount of wasted student loan money, I do think universities should have motivation to be pickier.
I'm not suggesting that universities should be on the hook for the entire amount, but at least on the hook for _some_ significant portion of the loan.
Re: Seems obviously wrong (Score:2)
Financial institutions (banks) loan the money, collect payments & interest guaranteed by the feds, and lose nothing if the borrower canâ(TM)t pay.
America doesnâ(TM)t guarantee profits: these institutions benefitting from guaranteed market-rate loans must participate in defaults and losses too.
Re: (Score:3)
Meanwhile the co-president just came out in favor of importing more cheap labor... so the Job market is going to hell too.
I'll jump on this off-topic bandwagon and point out how on-brand it is that the administration (-elect) that ran on how immigrants -- all immigrants; not just the undocumented ones -- are the cause of every problem in the country announces as one of its first major policies a drive to increase immigration.
They actually already said (Score:2)
For all his bluster Donald Trump has never been opposed to incr
Re: And? (Score:2)
I remember from over a decade ago on here when I visited slashdot more often as a left wing guy I identified with.
There is nothing evil for the first 1 million. Except maybe real estate investors who caused a 200% spike hoping to get rich on desperate folks looking for a simple home.
Dave Ramsey and others provided the vast majority of wealth is simply saving and investing. Teachers are the 3rd or 4th most category of millionaires! Engineers first.
People need to stop buying new cars and homes that are more t
Student loan that is 110% political (Score:3, Interesting)
Re: (Score:2)
Don't worry America you are not alone. We have hungry school children here too!
Leading by example (Score:4, Interesting)
Just following the example of our current president elect. https://www.nbcnews.com/politi... [nbcnews.com]
https://www.the-independent.co... [the-independent.com]
Re:Leading by example (Score:5, Informative)
There's better examples out there of Trump not paying his bills:
The Trump Files: Trump’s Long History of Getting Sued by His Own Lawyers [motherjones.com]
Dozens of lawsuits accuse Trump of not paying his bills, reports claim [foxnews.com]
Trump has a history of not paying his own lawyers, maybe explaining some of his legal defeats, because he can't get the good ones anymore.
(posting links from both sides)
Solution (Score:5, Insightful)
Allow education debt to be discharged via bankruptcy, and charge back to the institutions which received the money.
Doesn't help the current batch of folks, but then they agreed to the current terms and failed to fulfill their end of the bargain so I don't feel bad for them.
Re: (Score:2, Interesting)
> they agreed to the current terms and failed to fulfill their end of the bargain so I don't feel bad for them
Why would we put *all* the responsibility for a contract on the little guy?
There's a clear merchantability claim warranty tort here if the school offered a degree without a clear warning label that the degree is unlikely to lead to a career that can repay the loan.
Especially if the contract was sold to a 17 yr old but we all know that you have to be 25 to rent a car for good reasons.
And that's on
Re: (Score:3)
There's a clear merchantability claim warranty tort here if the school offered a degree without a clear warning label ..
No; this is nonsense. I believe the issue is going to be that she didn't commit adequately and stick with the field her degree
was in, and instead she chose to pivot into general teaching which has no real career path, and as a country in the US we
pay our grade school teachers abysmally.
The law school would likely have not suggested she go into a general teaching career. You do NOT pursue a
Re: (Score:2)
She worked in Washington DC schools which are some of the highest paid teachers in America. The dumbest thing she did was to borrow $60,000 for a second Master's degree which she finished at age 59. Both she and the school had to have known that $60,000 would never be repaid.
Re: (Score:3)
There's a clear merchantability claim warranty tort here if the school offered a degree without a clear warning label that the degree is unlikely to lead to a career that can repay the loan.
Gonna disagree completely on a couple of grounds.
First, no lawyer could make the point you just made and not get laughed out of court. There is no expectation of a guarantee of any kind of "result" when purchasing a degree from a college or university, and no disclaimer of the sort to which you allude is required of the school. You may be basing your argument on the recent dust-up where some diploma mill trade schools tried to mislead students into believing they offered a guarantee of post-graduation emplo
Re: (Score:2)
>Why would we put *all* the responsibility for a contract on the little guy?
I don't disagree that it CAN be a lopsided contract, but the terms are clear up front; it's not yours or my job to second guess adults making adult decisions.
I certainly made the same decision when I was 18...and I knew what I was getting into, so I knew I'd have to make sacrifices when it came to my job choices; I'd have to seek jobs with adequate compensation, which meant ( necessarily ) I couldn't work the smaller jobs that I
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Student loans are a way for low income students to attend college. If they end up costing the universities more, then the universities won't accept them and we will be back to the old days when only the wealthy went to college.
OTOH, if colleges are guaranteed payment, then they have no reason not to keep increasing tuition while building every fancier campuses.
Maybe the best solution is free, but highly competitive public universities as the way the govt supports education. That would at least allow low in
Re:Solution (Score:5, Interesting)
There is no such thing as "free", the burden is just shifted to everyone else. And no, that wouldn't solve the problem. There would be zero incentive to control costs, screen admissions, or fit the student to an appropriate and potentially productive degree (if they should even attend at all, instead of a trade school).
We need to hold universities, banks, and students accountable for the debt. Right now, we only hold students and that isn't working, obviously.
Discharging debt with taxpayer money is gross, and a huge insult to the many millions of responsible attendees who paid their loans back. I would be in favor of a program to offer very low or no interest/no penalty refinancing coupled with small garnishments to those who are struggling. That is still a tax cost, but nowhere near as bad.
Re: (Score:2)
They failed to fulfill their end of the bargain by not being lucky enough to land a high-paying job, you mean? If the university churns out 500 graduates and there are only 100 jobs available in that field, then some 400 of them are going to be screwed over likely through no fault of their own other than pure bad luck.
Re: Solution (Score:2)
Re: (Score:2)
The university should not be taking on 500 students if there are only 100 jobs available, as they know 400 of those students would never be earning enough to repay the loans.
Student loans are a scam (Score:5, Insightful)
Re: (Score:3)
Its tricky. Most normal loans are backed by some tangible good, a car or a house. There is no way to reposes an education if someone decides to simply default on their loan. I agree with reform, but its not clear how to do it.
Re: (Score:2)
Its tricky. Most normal loans are backed by a car or a house.
I found that more than 50% of bank loans are for cars, residential housing or credit cards. Most house and car loans they aren't putting up a car or house to get that loan. Most credit card are unsecured.
What exactly is a normal loan?
Re: (Score:2)
Most normal loans are backed by a car or a house.
The bank takes the house or car if the payments aren't made.
That's not backed by or in financial terms a secured loan.
Re:Student loans are a scam (Score:4, Insightful)
They are the ONLY loans in the US that cannot be discharged in bankruptcy. This creates all sorts of predatory lending practices and immoral incentives. We need to reform the whole system.
If we stopped providing loans for degrees that have traditionally (read: consistently) been found to be basically worthless from a financial return perspective, I wonder how many colleges would have to cull a considerable portion of their for-profit catalog due to lack of demand? Not sure if getting rid of bankruptcy exemptions is the ultimate answer, but it might help with the problem of a lot of people walking around with a certified hobby certificate that cost them $80K.
I agree with total reform. Perhaps starting with the culling of political activists that call themselves educators. To remind new educators of what their primary job function is, was, and should have been all along.
Fake degrees (Score:2)
I've read a number of studies that say that "fake degrees", whether from colleges of questionable merit (IE they lose their accreditation, never had it, or are just low quality), or "worthless" diplomas where the only jobs you can get with that degree is teaching students in that degree field, are actually quite rare.
IE there's not actually a problem with "a lot" of people walking around with a "certified hobby certificate", much less at $80k.
We do have a problem where the majority of people end up not work
Re: (Score:2)
I've read a number of studies that say that "fake degrees", whether from colleges of questionable merit (IE they lose their accreditation, never had it, or are just low quality), or "worthless" diplomas where the only jobs you can get with that degree is teaching students in that degree field, are actually quite rare.
Here’s something that isn’t just rare, but was unheard of after centuries of educational lending; a Government forced to discharge educational debt when it exceeded a trillion dollars.
Trillion, used to be the world to describe the debt problems of entire countries. Now it describes but one corrupt facet of American Greed.
IE there's not actually a problem with "a lot" of people walking around with a "certified hobby certificate", much less at $80k.
If that were true, we probably wouldn’t be measuring outstanding educational debt with the world “trillion”.
Re: (Score:2)
If that were true, we probably wouldn’t be measuring outstanding educational debt with the world “trillion”.
False dichotomy. You can get that situation just through inflation and population increase. Also, you can have diplomas that are useful but overpriced. Diplomas that would be useful, but due to oversaturation the pay is less, and diplomas demanded just because so many people have them that they can be used as a filter.
Basically, I see a lot of education inflation. Careers that used to take a 2 year degree now requires a master's. Jobs that shouldn't require a degree beyond high school now needs a bachelo
Re: (Score:2)
They are the ONLY loans in the US that cannot be discharged in bankruptcy. This creates all sorts of predatory lending practices and immoral incentives. We need to reform the whole system.
Student loans have allowed those who are not the children of the rich to obtain an education that would otherwise be out of their reach. If one allows student loans to be discharged in bankruptcy without other changes and protections, fewer loans will be issued, as the obvious thing that would happen is that many would, immediately after the graduation ceremony, declare bankruptcy (as they would have few other assets to lose). And while that might end up generating a new cottage industry of lawyers conve
The answer is simple (Score:3)
Eliminate interest in student loans and credit all interest paid toward principal
Just create a govt. (zero profit) loan (Score:5, Interesting)
If you think education is a societal benefit then lobby to have a govt issued loan for students where the interest is the real time insurance over all outstanding defaults. If nobody defaults there is no interest accrued on anyone's loan. if 5% of students default then the interest is exactly the right amount to cover the 5% loss from the program.
Doesn't cost the govt. a dime and doesn't enable lender grift on a social benefit. Won't fix the institutional (Universities, etc.) price gouging, but it at least stops predatory lending.
um, delusional thinking detected (Score:2)
First, Obama took over student loans, and that's part of the problem. He took off the caps on how much kids could borrow and the colleges [predictably] raised their fees because they knew they could (they knew the incoming freshmen would agree to sign-up for any amount of debt they were told they needed to agree to for that magical degree in underwater basketweaving). With loans easy to get and not capped as they used to be, we have far too many kids now majoring in stuff that will not get them jobs good en
Re: (Score:2)
Uhm, loans aren't a subsidy.
Loans are just a means to spread costs over time. And before we get into subsidized interest, that is exactly what I am proposing against.
Student Loan Program (Score:2)
I remember when they opened up student loans to nearly all applicants in the late 1990s. Before then you would only be eligible for a loan if you were getting an advanced degree, like a MD or JD, or if you were below the poverty line. The government opened up the program to nearly everyone.
Check out the average tuition rates starting, oh, say late 1990s, progressing into the 2000s.
https://educationdata.org/aver... [educationdata.org]
The line graph goes nearly vertical in the early 2000s.
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The definition of subsidy is 'a grant'. A loan is not a grant.
Further, under my proposal, it is not the government that would guarantee the loan, it is the other students who have loans, more specifically it is their loan interest that guaranties the loans. Not to mention that if a student knows that defaulting would be hurting other students and not some nebulous 'sticking it to the government', I would expect that defaults would be far fewer.
You might want to review common definitions before jumping on t
The government should not back student loans (Score:2)
The US government should not be in the loan business without a viable collateral. Otherwise the taxpayer gets screwed.
Some degrees/certs ie electrical engineering, medicine, trade school have proven future earnings. Outside a proven earnings collateral the loan should be from the school.
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Taxes at the federal level are not linked to spending. Taxpayers aren't screwed by people defaulting student loans. Before you say "but inflation", keep in mind that most of the current "inflation" we are experiencing at the grocery store is actually just price fixing via agri stats.
UK Student Loans Automatically Cancelled (Score:5, Interesting)
Calculations by people who look into these things suggest that most students won't repay the loan in time (repayment rates are fixed and depend on income) so most loans will eventually be written off.
The need to ration degrees (Score:2)
In reality too many kids go to university without it really adding to their earning power; they just get to keep their professors and the bureaucrats at their university in the life style to which they have become accustomed. Part of the problem is the 'arms race' element: too many employers use the absence of a degree as a reason to ignore your application - because they get too many. A possible solution to this is to tax employers a flat sum - perhaps $10,000 or 5% of earnings - for each graduate they emp
UK government does write off loans (Score:2)
When we introduced loans for our students, replacing grants(!), we introduced a repayment system connected to the income tax system; you pay 10% of your income over a certain amount - which is now merely full time minimum wage - until you've paid it off. If you haven't done so after forty years - originally twenty five - or on death, they are written off.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Cap the repayment amount (Score:2)
1. The repaid amount should never go over a certain reasonable threshold. Letting loans drag on for multiple times the original value is gross.
2. Governments should probably be paying for post secondary education anyway. Profits and education are a weird mix.
3. Not only should these people be forgiven their loans, they should be given back some money based on my first point.
I feel like these kinds of loans fundamentally misunderstand what is going on: these are people trying to get educated to make themselv
Re: (Score:2)
The initial payment on this loan was the $200/mth range. It only ballooned to $270,000 because she CHOSE not to make the payments. You should not be rewarded for falling to make your payments and having the balance balloon due to compounding interest and late fees. If you provide an out for when the loan gets too large the only thing you will achieve is no one making loan payments.
There is a great solution to this. The government should entirely stop making educational loans period. They aren't help anyone
bankers bailout (Score:2)
Too Bad. Pay Up (Score:2)
We have a pro-corporate government; one that will think like a business and operate like a business.
Which as we all know means it's completely in-human. You're no longer a citizen; you're a line-item on a spreadsheet. You will generate profit for the shareholders you will be "let go".
Don't forget they want to garnish social security while simultaneously getting rid of it.
Then when they're on the street the republicans will just refer to them as animals. Ever notice how they constantly want to lower people t
Accountability and affordability (Score:2)
I graduated with my parents paying for my first half semester of university, then the remaining were on me. Studying during the day, working by afternoon, night and weekends. I was not partying as my classmates were. I was not on a sports team. I was the exception. A nerd, if you will, and I care less about such labeling.
Today I am debt free, I make good 6 digit figures, and yet, just as our inflated government, I am sure educational places can trim down unnecessary services and people to bring costs down.
The US eats its own (Score:2)
From crippling healthcare costs to insane tuition prices designed to keep people in debt forever, the US seems to eat its own.
How do other countries manage to provide affordable healthcare and education? Hint: Maybe they remove the profit motive.
Taxes (Score:2)
They don't do what you think they do (Score:2)
Some of those countries you probably admire have "free college" but actually they only allow SOME kids to go to the best schools. In some countries some kids never have the opportunity to go to the "free" colleges, and in some the kids not selected for the good schools go to lower-quality schools more like trade schools. It's sometimes brutal too, in that the governments effectively choose which kids go to the good schools in ways that you might not like. It's never "free" top-tier colleges for everybody. T
Mr. Plow (Score:2)
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anyone to go to school forever, for anything, for free
Free post-secondary education (not forever, but for a degree and as long as the student is passing) is a good thing for society. Many countries have much cheaper post-secondary education than the USA and some of them have free post-secondary education and they're doing fine and don't have armies of indebted ex-students.
Re: (Score:2)
I'd argue, more so than other countries, Americans have "eyes bigger than their stomachs" (look at our waistlines!), especially when it comes to borrowing/spending money. Look at our credit card debt. Look at our savings. Look at our finances. We clearly don't know how to handle our debt. This will be
Re: (Score:2)
Student Loans used to be dischargeable thru bankruptcy, but congress put a stop to it, because it had the effect of having people that couldn't afford to go to college paying off the student loans of lawyers, doctors, engineers, etc that figured out it was cheaper to go bankrupt than actuall pay off their student loans.
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And that name again is "Mr. Plow"...
Let me get this right. (Score:3)
The US government ends up compensating the bank for the loans that aren't paid off, which is essentially all of them. The bank ends up collecting from the US government pretty much what the US government would gave paid originally if they'd given a grant, if not more, due to the high interest rates. The bank, meanwhile, has already collected a fair bit from the former students.
And this makes more economic sense than just giving everyone a grant in the first place?
Well, it does to the bank, who is now wildly wealthy having had to do nothing.
It also does to the university, who can now charge excessive uncompetitive fees because gouging a market in coordination with a loan shark is trivial.
But to the student? To the taxpayers? To the government, who gave to keep track of all this because there's restrictions on hiring people not paying loans?
The system, by its very nature, suffers from a reversal of the usual market rules - the price isn't capped by what the market can bear, and we can see that by the fact that loans aren't paid off. Rather, prices are unbounded because high price means high prestige. The market will bear anything to get that prestige.
Re: (Score:2)
THats the old system - once upon a time the government guaranteed the loans, and the banks servi ced the loans and kept a fee.
Then we invented "affordable health insurance" and in the process the federal government under Obama clawed back management of the federal student loans to allow Obama to direct the profits to help off-set the cost of "Affordable Healthcare" slightly more affordable.
Don't feel bad, the economics major and member of Congress AOC didn't understand that either..
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Don't feel bad, the economics major and member of Congress AOC didn't understand that either..
I've been trying to understand the US system of funding education. Are you locked into a particular institution until you pay the loan off. Are fees so much that it is not possible to pay the education fees off as you go?
Who's Fault is this? (Score:2)
Roughly 40 years ago she went to law school, but was only able to find work as a legal aid and later work in the public school system, which the Washington Post calls "a rewarding job but one that didn't pay enough to wipe out her loans." Later she earned a masters of education degree:
All told, Warner borrowed a total of about $60,000 for her two advanced degrees. The amount seemed reasonable given the career trajectory that both credentials promised, but that path never materialized. Working a series of low-wage jobs, she went in and out of forbearance before ultimately defaulting. The balance ballooned to the current $268,000 total over the years due to collection fees and interest capitalization.
She borrowed $60K in the 1980s, failed to turn her expensive education into a job that could cover the expense, and now, 40 years later, through the miracle of compound interest and punitive fines, she owes over a quarter-million dollars...
Who loaned her the money on the off-chance she could get a job that pays well-enough to cover the loan payments?
UK (Score:2)
Sorry, but this is absurd (Score:2)
40 YEARS AGO she CHOSE to take out $60K in loans to get TWO "advanced degrees" (more than most people ever get) and she was unable to convert this into an income that would let her pay off that debt? I'm calling "garbage" on this one. Either the claims are false, or she had some extreme medical issue, or she was extremely irresponsible and foolish financially (and with "two advanced degrees" she has no excuse for being even half that foolish).
About 40 years ago I too took on student debt to go to an expens
Re:What college did they graduate from? (Score:4, Interesting)
Re:What college did they graduate from? (Score:5, Insightful)
The magic word is collection fees
Yeah.. It should be made illegal to add "Collection fees" on top of a debt, except if the fees are the actual costs of a court proceeding and the Judge orders that the costs be added. Collection fees are invented numbers likely fabricated, and there's no explicit agreement by the borrower to them.
Lenders already have compensation for their costs and risks: It's called the interest rate.
For education loans it should be made Illegal for the bank to capitalize or add interest on top of any amount greater than the sum originally borrowed and actually paid to the borrower or to the school on the borrower's behalf.
Ballooning debt (Score:3)
Indeed. It actually reminds me of how many religions have regulations against usury [wikipedia.org]. To the point that many cultures had various ways to get out from under debt other than paying it.
On the other end, you had where the practice flourished and made debtors into slaves - both metaphorically and literally. Because in some cultures? The kids could inherit their parent's debts.
Compound interest is great for investments. It's not so great for debts.
It doesn't take long when the interest rate shoots up because
Re: (Score:2)
The way that works is that interest is capitalized. Frequently, when you get a forbearance, that means you don't have to make payments, but it doesn't stop interest from being accrued.
In addition, Democrats pushed through legislation and rules that limit the amount of payments based on income, but again do not stop interest from accruing, similar to what happened around 2008 to interest-only mortgages when the interest rates went up. For the student loan holders on these programs, their principal balance
Re: (Score:2)
That analysis doesn't fit the narrative. Don't expect any sort of introspection.
Re:such victims (Score:5, Insightful)
$60,000 / 40 years is $1,500/yr plus some interest. During those forty years did this person buy a car and make payments? Did they buy a house and make payments? Is she married with a spouse's income and chose not to work? Or did she go straight from a two Master's degrees to living on welfare?
This person purposely CHOSE not to pay off her college debt.
Re: (Score:3)
This person worked at as a teacher in the DC schools. DC schools are some of the HIGHEST paid teachers in America. And why, why did she borrow $60,000 for a Master's degree in 2012 when she was 59 years old? Any moron could see that you'd never be able to pay that off before retiring. What a STUPID thing to do.
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Re: And voted (Score:2)
Pretty sure that's not what that shows. Democrats overwhelmingly think that student loans should be forgiven, but there's no data on who actually has student loans.
I'd guess that Republicans have less student loans because not many of them finished high school.