4 ms·

I am so glad she does not blame others for her excessive borrowing. I still think the government taking over the student loan program was the worst decision eve

I am so glad she does not blame others for her excessive borrowing. I still think the government taking over the student loan program was the worst decision ever. This article emphasizes why, government agencies tend to not operate with any sense a business would and therefor make terrible decisions for themselves and those they serve. the way out would be a government program similar to HARP, let them finance to a new low rate, remove penalty amounts, and start paying it back. Perhaps teaching at low income high need systems to earn credits as well. I have little issue with funding a college education provided it is needed by society and there is a defined service payback. However hers is just lots of bad mistakes compounded by a undisciplined government agency. Amazing that the loan agencies cannot cut deals like they can do with people with huge tax loads.

nickthemagicman 11y ago
The government takeover has been great from a loan holder point of view. With Sallie Mae I would speak with foreign customer service rep who was barely fluent in English, I would be put on hold for literally hours, would be lied to about my eligibility for certain programs, the website was horrible, and trying to get paperwork processed was took months. Direct Loans, I speak with an American, am on hold for under 10 minutes, and have all my questions answered truthfully. Their website is great and all of my stuff gets processed under a week. Despite all of the Republicans chest beating about privatized industry doing a better job than Government can, I've found it to be an extreme degree of exactly the opposite in this case.
mapt 11y ago
The government taking over the student loan program replaced businesses that were lending money to students and collecting from the government if they failed to pay. In order to mitigate this while continuing to pretend that the private sector was at work, we then passed laws to aggressively collect on student loans, making default impossible, and substantially weakened bankruptcy besides. Which is stupid. If the government is going to subsidize something like this by "issuing loans" or "guaranteeing loans", doing the paperwork themselves rather than pushing it off to for-profit private entities makes all the sense in the world. There is no substantial problem here for the market to solve; Entities that participate are simple rent-taking parasites on the process of government subsidies reaching students, doing no work themselves other than advertising. Tuition growth is a separate and very real issue. Bankruptcy is a closely related issue, which has quite a bit more bearing on the article. We have a word for cultures that do not practice bankruptcy and pass on unpayable debts: slave states. Bankruptcy - the positive ability to escape from debt and in doing so to be blacklisted from further debtors - is essential both to keeping people free from indenture and also to keeping lenders honest in their assessment and labelling of debts. College debts are particularly difficult to assess risk on: A free market does not seem like it would fund as many educations as the government would prefer people to get educated, which is where this started. That's why I think the government should favor grants over extreme long-term debts. Factor in the cost today instead of pretending we'll have the money tomorrow, and you head off a lot of pain for both lenders and debtors. The government can already redress its losses through taxation. A credit rating that shows default to the government is a deterrent just as much as a credit rating that shows default to a bank. Some fraction of people will always be irresponsible, unrealistic, or just unlucky in acquiring debts they can't handle. Heaping blame on them and examining their individual faults is a distraction from attempts to actually deal with the fact that some fraction of people will always fall into that category. Our language on topics like this has some of the most baggage of anything we talk about. It's important to examine all the words you're using, and try to remember to ask "Is this a useful paradigm to apply". Because the National Debt is not Household Debt or Municipal Debt. Household Debt is not loaning your neighbor 50 bucks for beer. Loaning your neighbor 50 bucks is not a bail bond. Every situation is unique and trying to imbue them all with the same morality and judge your way out of the problems they develop is worse than useless.
evanpw 11y ago
I don't know why this article made such a small deal out of it, but there is an income-based repayment program thats caps your payments as a percentage of your income, and forgives the balance after 10 years (20 years for private-sector workers). It's a ridiculously good deal for people with a lot of student-loan debt.

nickthemagicman 11y ago

The government takeover has been great from a loan holder point of view. With Sallie Mae I would speak with foreign customer service rep who was barely fluent in English, I would be put on hold for literally hours, would be lied to about my eligibility for certain programs, the website was horrible, and trying to get paperwork processed was took months. Direct Loans, I speak with an American, am on hold for under 10 minutes, and have all my questions answered truthfully. Their website is great and all of my stuff gets processed under a week. Despite all of the Republicans chest beating about privatized industry doing a better job than Government can, I've found it to be an extreme degree of exactly the opposite in this case.

mapt 11y ago

The government taking over the student loan program replaced businesses that were lending money to students and collecting from the government if they failed to pay. In order to mitigate this while continuing to pretend that the private sector was at work, we then passed laws to aggressively collect on student loans, making default impossible, and substantially weakened bankruptcy besides. Which is stupid. If the government is going to subsidize something like this by "issuing loans" or "guaranteeing loans", doing the paperwork themselves rather than pushing it off to for-profit private entities makes all the sense in the world. There is no substantial problem here for the market to solve; Entities that participate are simple rent-taking parasites on the process of government subsidies reaching students, doing no work themselves other than advertising. Tuition growth is a separate and very real issue. Bankruptcy is a closely related issue, which has quite a bit more bearing on the article. We have a word for cultures that do not practice bankruptcy and pass on unpayable debts: slave states. Bankruptcy - the positive ability to escape from debt and in doing so to be blacklisted from further debtors - is essential both to keeping people free from indenture and also to keeping lenders honest in their assessment and labelling of debts. College debts are particularly difficult to assess risk on: A free market does not seem like it would fund as many educations as the government would prefer people to get educated, which is where this started. That's why I think the government should favor grants over extreme long-term debts. Factor in the cost today instead of pretending we'll have the money tomorrow, and you head off a lot of pain for both lenders and debtors. The government can already redress its losses through taxation. A credit rating that shows default to the government is a deterrent just as much as a credit rating that shows default to a bank. Some fraction of people will always be irresponsible, unrealistic, or just unlucky in acquiring debts they can't handle. Heaping blame on them and examining their individual faults is a distraction from attempts to actually deal with the fact that some fraction of people will always fall into that category. Our language on topics like this has some of the most baggage of anything we talk about. It's important to examine all the words you're using, and try to remember to ask "Is this a useful paradigm to apply". Because the National Debt is not Household Debt or Municipal Debt. Household Debt is not loaning your neighbor 50 bucks for beer. Loaning your neighbor 50 bucks is not a bail bond. Every situation is unique and trying to imbue them all with the same morality and judge your way out of the problems they develop is worse than useless.

evanpw 11y ago

I don't know why this article made such a small deal out of it, but there is an income-based repayment program thats caps your payments as a percentage of your income, and forgives the balance after 10 years (20 years for private-sector workers). It's a ridiculously good deal for people with a lot of student-loan debt.