5 ms·

Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.

by kdamken 11y ago

dandanisaur 11y ago
Sources?
- virmundi 11y ago
  Bernie Sanders' offer of State paid college education. One point is that I've never seen him offer an ex post facto payoff. It is a logical extension of his current platform of making education a right.
KZeillmann 11y ago
I think it's more complicated than that. It's a huge, broken system. 17-year-olds can't fully grasp the burden of their debt when they take it on, and they've been told all their lives that they need to go to college to be successful. You've got a great potion for disaster here: 1) You can't be denied an education loan. 2) Education loans can't be wiped out in bankruptcy because 3) You can't repossess an education. 4) Because of the above factors, there's little incentive for colleges to keep cost of attendance low. I have no idea what the solution should be, but this problem can't continue indefinitely. It's a more complicated issue than just, "Millennials are just looking for handouts and don't want to pay their debts."
- prostoalex 11y ago
  > 2) Education loans can't be wiped out in bankruptcy because One can opt in for an unsecured personal loan, which are wiped out in bankruptcy, but those come at higher rates to compensate for the risk. The reason for low(er) rates on student loans is their legislatively mandated low rates of default.
  - Pinckney 11y ago
    And 5-6 figure unsecured personal loans are available to 18 year olds with no assets or credit history?
    - prostoalex 11y ago
      Good point. Most creditors would be aghast at 100% LTVs that student loans seek, so it would have to be a combo of a significant down payment, parents' HELOC (or other secured credit facility) and finally unsecured credit card debt.
  - chadzawistowski 11y ago
    6.8% that can't be defaulted on is low?
    - prostoalex 11y ago
      Compared to double-digit credit card rates they are. The counter-party risk is still present (as the title suggests, the balance cannot be wiped out, but the payments can still be missed, constituting technical default).
Symbiote 11y ago
It needn't be magic. As one example, the Welsh Government cancelled many student loans for students in (or from?) Wales. http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678622&_dad=portal&_schema=PORTAL http://www.studentloanrepayment.co.uk/portal/page?_pageid=93...
roymurdock 11y ago
I'm a recent graduate. People don't go to college because they think they'll have their debt absolved. They go to college because an undergrad degree is now the equivalent of a HS degree 30 years ago. It's simply a prerequisite, and every parent/counselor is pushing children towards it. Besides, the students described in the article graduated long before Bernie sanders arrived on the scene. He was clearly not a factor in their decision to attend in the first place.
- brbsix 11y ago
  He's suggesting that people are refraining from paying off existing debts, not that they're accruing new ones with the hope or expectation that they'll be absolved.
  - roymurdock 11y ago
    Ah I see...I read "kids" and assumed he was talking about high school students, as I don't consider myself a kid anymore.
colemickens 11y ago
"Lots of kids are..." More like... lots of people are making up absurd statements based on their perception of a political candidate. I don't know of a single, single person who is supporting Bernie because they think he's going to post-defacto erase their college debt. Especially since that's not even something he's ever suggested. But yeah, I'm sure "lots of kids" are holding out for that. You should've thrown in the swear word "millennials" for true effect.
- jawilson2 11y ago
  I'm still waiting on my free Obama-phone.
narrator 11y ago
It's effectively waving a wand to make their bad loans go away when the federal reserve buys toxic mortgage backed securities from the banks with quantitative easing.
__jal 11y ago
Or, you know, lots of kids can't find work that pays for shelter, food, clothes, transport, and interest on six figures. Despite being young and dumb, and told by most everyone that the only way they'd get such a job would be to, you know, take out those six figure loans. The post-2008 recovery has been a very poor recovery as far as jobs are concerned. Add in that wages for the less than six figure jobs have been stagnant since most of these people have been alive, and, well, there you are. Perhaps coming up with an educational system that doesn't indenture students to banks (who have zero risk on their loans - talk about lack of skin in the game!), and doesn't increase in price at a multiple of the inflation rate might be a good idea? I've noticed that nearly everyone whose reaction to 'the kids these days' on things like this went to school when going to school was actually affordable by the non-wealthy.
- iofj 11y ago
  Really, according to government & the fed unemployment is pretty close to it's lowest in 10 years : https://research.stlouisfed.org/fred2/series/UNRATE https://research.stlouisfed.org/fred2/series/UNRATE Likewise, what are these people who can't find jobs doing ? They're not asking for unemployment benefits ... https://research.stlouisfed.org/fred2/series/IC4WSA https://research.stlouisfed.org/fred2/series/IC4WSA
  - douche 11y ago
    They've been out of work too long to qualify for unemployment...
    - iofj 11y ago
      Sorry I'm not actually an American. You lose unemployment after being unemployed for too long ? How long ?
      - __jal 11y ago
        Depends on which state we're talking about. Don't know where you are, but by European standards the policy in any U.S. state looks punitive in comparison. In California, the limit is 26 weeks.
branchless 11y ago
Well it was magic'd into existence so magic it back out. Most degrees are not worth the cost because the cost is set by loose credit, and credit is ex nihilo.

Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.

by kdamken 11y ago

Not surprising. Lots of kids are holding out hoping that someone will get elected and wave a wand to magically erase the money they borrowed.

dandanisaur 11y ago

Sources?

virmundi 11y ago
Bernie Sanders' offer of State paid college education. One point is that I've never seen him offer an ex post facto payoff. It is a logical extension of his current platform of making education a right.

KZeillmann 11y ago

I think it's more complicated than that. It's a huge, broken system. 17-year-olds can't fully grasp the burden of their debt when they take it on, and they've been told all their lives that they need to go to college to be successful. You've got a great potion for disaster here: 1) You can't be denied an education loan. 2) Education loans can't be wiped out in bankruptcy because 3) You can't repossess an education. 4) Because of the above factors, there's little incentive for colleges to keep cost of attendance low. I have no idea what the solution should be, but this problem can't continue indefinitely. It's a more complicated issue than just, "Millennials are just looking for handouts and don't want to pay their debts."

prostoalex 11y ago
> 2) Education loans can't be wiped out in bankruptcy because One can opt in for an unsecured personal loan, which are wiped out in bankruptcy, but those come at higher rates to compensate for the risk. The reason for low(er) rates on student loans is their legislatively mandated low rates of default.
- Pinckney 11y ago
  And 5-6 figure unsecured personal loans are available to 18 year olds with no assets or credit history?
  - prostoalex 11y ago
    Good point. Most creditors would be aghast at 100% LTVs that student loans seek, so it would have to be a combo of a significant down payment, parents' HELOC (or other secured credit facility) and finally unsecured credit card debt.
- chadzawistowski 11y ago
  6.8% that can't be defaulted on is low?
  - prostoalex 11y ago
    Compared to double-digit credit card rates they are. The counter-party risk is still present (as the title suggests, the balance cannot be wiped out, but the payments can still be missed, constituting technical default).

Symbiote 11y ago

It needn't be magic. As one example, the Welsh Government cancelled many student loans for students in (or from?) Wales. http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678622&_dad=portal&_schema=PORTAL http://www.studentloanrepayment.co.uk/portal/page?_pageid=93...

roymurdock 11y ago

I'm a recent graduate. People don't go to college because they think they'll have their debt absolved. They go to college because an undergrad degree is now the equivalent of a HS degree 30 years ago. It's simply a prerequisite, and every parent/counselor is pushing children towards it. Besides, the students described in the article graduated long before Bernie sanders arrived on the scene. He was clearly not a factor in their decision to attend in the first place.

brbsix 11y ago
He's suggesting that people are refraining from paying off existing debts, not that they're accruing new ones with the hope or expectation that they'll be absolved.
- roymurdock 11y ago
  Ah I see...I read "kids" and assumed he was talking about high school students, as I don't consider myself a kid anymore.

colemickens 11y ago

"Lots of kids are..." More like... lots of people are making up absurd statements based on their perception of a political candidate. I don't know of a single, single person who is supporting Bernie because they think he's going to post-defacto erase their college debt. Especially since that's not even something he's ever suggested. But yeah, I'm sure "lots of kids" are holding out for that. You should've thrown in the swear word "millennials" for true effect.

jawilson2 11y ago
I'm still waiting on my free Obama-phone.

narrator 11y ago

It's effectively waving a wand to make their bad loans go away when the federal reserve buys toxic mortgage backed securities from the banks with quantitative easing.

__jal 11y ago

Or, you know, lots of kids can't find work that pays for shelter, food, clothes, transport, and interest on six figures. Despite being young and dumb, and told by most everyone that the only way they'd get such a job would be to, you know, take out those six figure loans. The post-2008 recovery has been a very poor recovery as far as jobs are concerned. Add in that wages for the less than six figure jobs have been stagnant since most of these people have been alive, and, well, there you are. Perhaps coming up with an educational system that doesn't indenture students to banks (who have zero risk on their loans - talk about lack of skin in the game!), and doesn't increase in price at a multiple of the inflation rate might be a good idea? I've noticed that nearly everyone whose reaction to 'the kids these days' on things like this went to school when going to school was actually affordable by the non-wealthy.

iofj 11y ago
Really, according to government & the fed unemployment is pretty close to it's lowest in 10 years : https://research.stlouisfed.org/fred2/series/UNRATE https://research.stlouisfed.org/fred2/series/UNRATE Likewise, what are these people who can't find jobs doing ? They're not asking for unemployment benefits ... https://research.stlouisfed.org/fred2/series/IC4WSA https://research.stlouisfed.org/fred2/series/IC4WSA
- douche 11y ago
  They've been out of work too long to qualify for unemployment...
  - iofj 11y ago
    Sorry I'm not actually an American. You lose unemployment after being unemployed for too long ? How long ?
    - __jal 11y ago
      Depends on which state we're talking about. Don't know where you are, but by European standards the policy in any U.S. state looks punitive in comparison. In California, the limit is 26 weeks.

branchless 11y ago

Well it was magic'd into existence so magic it back out. Most degrees are not worth the cost because the cost is set by loose credit, and credit is ex nihilo.