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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 b
by 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 agoAnd 5-6 figure unsecured personal loans are available to 18 year olds with no assets or credit history?
- prostoalex 11y agoGood 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 ago6.8% that can't be defaulted on is low?
- prostoalex 11y agoCompared 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).