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It is really sad that the wealthiest country in the world shackles it's young people with crippling debt if they attempt to get an education. My load from Aust

by grecy 9y ago

It is really sad that the wealthiest country in the world shackles it's young people with crippling debt if they attempt to get an education. My load from Australia is interest free, I only have to pay it back at a very low rate when I earn over $45k per year, and it was $20k (TOTAL!) for a 5 year Bachelor of Software Engineering.

owengriffiths 9y ago
College students will have to pay the cost of their college educations one way or another. Either with loan repayments or higher taxes. The problem is how much people in the US spend on getting a college education, not the funding mechanism. (ie living away from home, rather than living at home like most of us do in Aus).
- surfmike 9y ago
  Having it tied to income definitely makes it less crippling for those who have trouble in the job market after college. Like most grads after 2008 in the US for example, who got unlucky.
- boomboomsubban 9y ago
  >College students will have to pay the cost of their college educations one way or another. Either with loan repayments or higher taxes. If I'm buying a hundred thousand tuitions, presumably I can negotiate a lower price far easier than if I'm buying one. Additionally, even if their total monthly income was the same, not being in a large amount of debt could be a positive. Many would feel more comfortable taking a loan to start a business or build a house, and it would be easier to justify spending without needing to worry about debt interest.
- nandemo 9y ago
  Perhaps you meant "e.g." ("for example") and not "i.e." ("that is")? Because I'm pretty sure boarding costs aren't the only issue. I don't know about Australia, but tuition in Japan is much more reasonable than in the US.
Y7ZCQtNo39 9y ago
I think this statement is a little sensational. If $30k in student debt is 'shakling', then did we ever expect the same person to take on a $300k mortgage, or other larger financial milestones typically associated with middle class life? I agree that this debt isn't helping achieve other goals, but it's magnitude seems small compared to large financial goals like home purchases. If you weren't going to qualify for the $300k mortgage (less down payment), it wasn't because you had student debt; it was become you didn't have the income. My point being, this debt isn't crushing. It delays other financial milestones, but it shouldn't end them. However, if the discussion was about borrowers that are taking 6-figure student loans and then becoming baristas, well I would agree that person is definitely shackled for life -- but that situation isn't representative of the typical college graduate. The typical graduate has about $25k in student loans.
- abalashov 9y ago
  Yeah, but it's not entirely fair to compare a $300k obligation secured by the house with a non-dischargeable student loan. I've gone through foreclosure on an underwater property, I can speak to that. When I was 21 and had far more money (relative to my age) than sense, I bought a $160K 1 BR condo in downtown Atlanta on underwriting terms that could only be described as housing bubblicious, and which certainly could not be found after the Great Recession. I got an 80/20 loan with 6.625% APR on the primary loan and 8.25% on the secondary. For May 2007, that wasn't terribly bad, considering it was a non-conforming property and I had barely six months of income history at the level necessary to qualify, and hardly any credit history. A mere three months later, those rates looked absolutely hilarious. Nevertheless, I kept paying for 6-7 more years. These were more or less default payments on 30-year notes, so obviously front-loaded with interest, so in 2015 I still owed $140k. Well, even in 2015, the property was worth $85k. I walked away for various reasons I don't need to get into here, and the primary lender went so far as to sue me for a $29k deficiency, to the great surprise of most people in the know. The other lender forgave the $26k principal outstanding. But the point is, that's something like a worst-case outcome (-48% underwater) of a real estate transaction. It's not at all like being made to pay back the entire $160k + interest! :)
  - 9y ago

by grecy 9y ago

owengriffiths 9y ago

College students will have to pay the cost of their college educations one way or another. Either with loan repayments or higher taxes. The problem is how much people in the US spend on getting a college education, not the funding mechanism. (ie living away from home, rather than living at home like most of us do in Aus).

surfmike 9y ago
Having it tied to income definitely makes it less crippling for those who have trouble in the job market after college. Like most grads after 2008 in the US for example, who got unlucky.
boomboomsubban 9y ago
>College students will have to pay the cost of their college educations one way or another. Either with loan repayments or higher taxes. If I'm buying a hundred thousand tuitions, presumably I can negotiate a lower price far easier than if I'm buying one. Additionally, even if their total monthly income was the same, not being in a large amount of debt could be a positive. Many would feel more comfortable taking a loan to start a business or build a house, and it would be easier to justify spending without needing to worry about debt interest.
nandemo 9y ago
Perhaps you meant "e.g." ("for example") and not "i.e." ("that is")? Because I'm pretty sure boarding costs aren't the only issue. I don't know about Australia, but tuition in Japan is much more reasonable than in the US.

Y7ZCQtNo39 9y ago

I think this statement is a little sensational. If $30k in student debt is 'shakling', then did we ever expect the same person to take on a $300k mortgage, or other larger financial milestones typically associated with middle class life? I agree that this debt isn't helping achieve other goals, but it's magnitude seems small compared to large financial goals like home purchases. If you weren't going to qualify for the $300k mortgage (less down payment), it wasn't because you had student debt; it was become you didn't have the income. My point being, this debt isn't crushing. It delays other financial milestones, but it shouldn't end them. However, if the discussion was about borrowers that are taking 6-figure student loans and then becoming baristas, well I would agree that person is definitely shackled for life -- but that situation isn't representative of the typical college graduate. The typical graduate has about $25k in student loans.

abalashov 9y ago
Yeah, but it's not entirely fair to compare a $300k obligation secured by the house with a non-dischargeable student loan. I've gone through foreclosure on an underwater property, I can speak to that. When I was 21 and had far more money (relative to my age) than sense, I bought a $160K 1 BR condo in downtown Atlanta on underwriting terms that could only be described as housing bubblicious, and which certainly could not be found after the Great Recession. I got an 80/20 loan with 6.625% APR on the primary loan and 8.25% on the secondary. For May 2007, that wasn't terribly bad, considering it was a non-conforming property and I had barely six months of income history at the level necessary to qualify, and hardly any credit history. A mere three months later, those rates looked absolutely hilarious. Nevertheless, I kept paying for 6-7 more years. These were more or less default payments on 30-year notes, so obviously front-loaded with interest, so in 2015 I still owed $140k. Well, even in 2015, the property was worth $85k. I walked away for various reasons I don't need to get into here, and the primary lender went so far as to sue me for a $29k deficiency, to the great surprise of most people in the know. The other lender forgave the $26k principal outstanding. But the point is, that's something like a worst-case outcome (-48% underwater) of a real estate transaction. It's not at all like being made to pay back the entire $160k + interest! :)
- 9y ago