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> Kids are taking loans out at 17 or 18 that they won’t be able to pay back until they’re 40 or 50. This is the big problem. Calling 18 year olds, kids, is bas

by firic 8y ago

> Kids are taking loans out at 17 or 18 that they won’t be able to pay back until they’re 40 or 50. This is the big problem. Calling 18 year olds, kids, is basically saying that 18 year olds aren't old enough to be considered adults. Either you get the freedom of being an adult along with the responsibility or your leader decides what is best for you and you no longer have freedom. Even more so in her case. Her parents are ok the hook for repaying the debt. That means that they (ages 40 I guess) looked at the contact and thought it was a good deal. Is the author suggesting that 40 year olds shouldn't be allowed to get loans? If that isn't enough she describes defaulting on a loan as something okay. She decides to fly abroad and just assumes that the loan holders won't require her to start repayment. But even before that, she realizes in the middle of her undergrad that the tuition is to much. But she decides to get a loan on bad terms because she doesn't want to loose her friends. Come on. She decides to get a terrible loan because she is to shy to make new friends. For poor people, who know how to handle the freedom of being an adult, student loans could be exactly what they need to succeed in life. But for irresponsible people like the author, I don't think any laws can protect her from herself.

viraptor 8y ago
Is it really relevant if they're called kids? You're given a choice of not getting education and having limited job options, or taking a loan with unknown (variable) rate, for unknown amount (uni can raise fees), getting an unknown benefit (who knows what the job market will be like in a few years, maybe there's another global market failure). The lender is happy if you repay, and happy if you don't (the loan is gov guaranteed anyway, this is pre-2010 Sallie Mae) You say "But for irresponsible people like the author, I don't think any laws can protect her from herself." which is crazy considering one side of this problem wouldn't exist if the laws didn't explicitly enable this. Banks giving student loans risk next to nothing. If you think this person was so irresponsible because obviously she can't repay, what is your comment on the bank. Surely they know the market even better and reviewed her family finances - why would they give her a loan in the first place? Are they irresponsible adults as well?
- user5994461 8y ago
  To quote the article. The bank sold student loans with expected default rates at 92 percent. The bank knows exactly what they are doing. The partial repayments are enough to cover the initial principal and a good margin. The bank basically makes money on defaulting. The abusive interest accrues too fast to ever be repaid. The loan will last for as long as the person live. This is only possible because loans cannot be discharged.
  - deleted 8y ago
    [deleted]
  - UncleEntity 8y ago
    The flip side is that without government guarantees people would be complaining that college is only for upper-middle class kids who's parents can afford to pay. TFA's author goes on about how her father tried (unsuccessfully) to talk her out of taking a loan with "abusive interest" but that didn't stop her. My mom was pretty unhappy I tricked her into letting me sign up for the army at 17 but that doesn't mean there's anyone to blame but myself.
ivanhoe 8y ago
Well, they can't legally buy a drink, so I guess they're not "considered adults" by government either, at least not fully. If you don't think that a person is responsible enough to be allowed to have a bottle of beer, can you really trust them on making a sound financial choices, especially the ones with huge and long term effects? Or blame them if they don't?
- sizzle 8y ago
  Well at 18 they can legally purchase an AR-15 and vote so not sure your argument holds up in that respect.
mattm 8y ago
Most 18 year olds have never had anything more than a minimum wage jobs and now they are supposed to be responsible for making decisions worth more than they've made in their entire life and lasting longer than they've been alive? Where is someone this age supposed to get the experience to make these responsible decisions? I graduated about $40,000 in debt and it was only then that I realised how difficult it is to pay that back. Up until that point, it's just a number on a piece of paper. I managed to pay it back in about 2 years but I was lucky in that I graduated with Comp Sci which is in demand and got a pretty well paying job in my city for someone with no experience. And I say lucky because choosing my degree was just based on an interest of mine in high school that I thought would be interesting. It's no different than other people choosing to study what's interesting but in my case, comp sci and programming pays well in the economy while history doesn't. Student loans are a vicious supply and demand cycle. Students can take out loans to cover school so universities realise they can charge more which in turns leads to students taking out more to cover education.
- humanrebar 8y ago
  > Most 18 year olds have never had anything more than a minimum wage jobs and now they are supposed to be responsible for making decisions worth more than they've made in their entire life and lasting longer than they've been alive? They're old enough to know that $10,000 is real money and that they should be asking for advice and help if they feel over their heads.
learnstats2 8y ago
18 year olds have no experience of financial decision making and are asked to make one of the most major financial decisions of their life immediately upon being eligible to do so, with limited opportunity to delay this decision.
camgunz 8y ago
> Either you get the freedom of being an adult along with the responsibility or your leader decides what is best for you and you no longer have freedom. Maturity, experience, and knowledge are all complicated. Nothing magical happens to you when society deems you an adult; you still need to learn things. That's why there should be laws and regulations to protect people from situations like this, because you shouldn't be able to get into this kind of debt, and especially not at the beginning of your adult life. > She decides to fly abroad and just assumes that the loan holders won't require her to start repayment. I think you shouldn't be so dismissive. She went to grad school overseas. A lot of people come overseas to US grad schools and that's great for us, and a lot of our students go overseas to foreign grad schools and that's good for us too. Diversity of background, experience, and culture are important, and we all benefit from it. It should be a fundamental part of education. Furthermore this isn't her point. She couldn't get a deferment because Navient's software systems didn't have a key for overseas grad schools. That's so mind boggling to me I don't even know where to begin: Navient couldn't add a row to their DB, and it cost her over $7k (more, after it keeps getting compounded). > But even before that, she realizes in the middle of her undergrad that the tuition is to much. It's more likely she hit the cap on her government loans. Pretty much everyone does, which is why we have loan corporations like Navient and Great Lakes. If you look at her balance sheet, there are a lot of gov't loans for small amounts, then a couple big Sallie Mae loans. > But she decides to get a loan on bad terms because she doesn't want to loose her friends. Unless you're in a pretty lucrative program (like CS or engineering) or you're pre-professional (pre-med, pre-law), often one of the most valuable things you get from your college experience is a social network of professors, administrators, and fellow students. I pretty much owe my entire career to a few of my professors in college and if I'd had to leave that behind it would have cost me dearly financially. > But for irresponsible people like the author, I don't think any laws can protect her from herself. I do think she was irresponsible. I think private universities are generally a terrible deal unless you get a scholarship or you're in a top-10 school, I think going overseas for grad school and defaulting on her loans because she couldn't get a deferment was a bad move, and I think she probably should have taken a gap year and worked. I also think she should live somewhere cheaper with a better commute -- although it's really hard to get a job when you need to relocate, and again with that network thing. But I also think everyone is irresponsible, and that the penalty for being irresponsible in this way shouldn't be essentially a lifetime of debt. If Sallie Mae weren't legally allowed to lend her that $24k, she'd be remarkably better off. We have all kinds of laws that prevent people from entering into extremely bad deals (can't sell organs, can't agree to work in super hazardous conditions) because we recognize the power of institutions and society to coerce people into making these choices. We need to realize that the loan industry is one of these things that needs similar regulation.
pdpi 8y ago
Adulthood isn’t binary, it’s a process. This is pretty much captured by how the law sets age limits: In the US you can drive at 16, vote at 18, buy booze at 21, and become president at 35. Loans that will take decades to repay are arguably things that we shouldn’t expect younger adults to fully grasp.
justherefortart 8y ago
We don't let 18 year old kids drink. But we'll let a 17 year old join the military. It's all about priorities.

by firic 8y ago

viraptor 8y ago

Is it really relevant if they're called kids? You're given a choice of not getting education and having limited job options, or taking a loan with unknown (variable) rate, for unknown amount (uni can raise fees), getting an unknown benefit (who knows what the job market will be like in a few years, maybe there's another global market failure). The lender is happy if you repay, and happy if you don't (the loan is gov guaranteed anyway, this is pre-2010 Sallie Mae) You say "But for irresponsible people like the author, I don't think any laws can protect her from herself." which is crazy considering one side of this problem wouldn't exist if the laws didn't explicitly enable this. Banks giving student loans risk next to nothing. If you think this person was so irresponsible because obviously she can't repay, what is your comment on the bank. Surely they know the market even better and reviewed her family finances - why would they give her a loan in the first place? Are they irresponsible adults as well?

user5994461 8y ago
To quote the article. The bank sold student loans with expected default rates at 92 percent. The bank knows exactly what they are doing. The partial repayments are enough to cover the initial principal and a good margin. The bank basically makes money on defaulting. The abusive interest accrues too fast to ever be repaid. The loan will last for as long as the person live. This is only possible because loans cannot be discharged.
- deleted 8y ago
  [deleted]
- UncleEntity 8y ago
  The flip side is that without government guarantees people would be complaining that college is only for upper-middle class kids who's parents can afford to pay. TFA's author goes on about how her father tried (unsuccessfully) to talk her out of taking a loan with "abusive interest" but that didn't stop her. My mom was pretty unhappy I tricked her into letting me sign up for the army at 17 but that doesn't mean there's anyone to blame but myself.

ivanhoe 8y ago

Well, they can't legally buy a drink, so I guess they're not "considered adults" by government either, at least not fully. If you don't think that a person is responsible enough to be allowed to have a bottle of beer, can you really trust them on making a sound financial choices, especially the ones with huge and long term effects? Or blame them if they don't?

sizzle 8y ago
Well at 18 they can legally purchase an AR-15 and vote so not sure your argument holds up in that respect.

mattm 8y ago

Most 18 year olds have never had anything more than a minimum wage jobs and now they are supposed to be responsible for making decisions worth more than they've made in their entire life and lasting longer than they've been alive? Where is someone this age supposed to get the experience to make these responsible decisions? I graduated about $40,000 in debt and it was only then that I realised how difficult it is to pay that back. Up until that point, it's just a number on a piece of paper. I managed to pay it back in about 2 years but I was lucky in that I graduated with Comp Sci which is in demand and got a pretty well paying job in my city for someone with no experience. And I say lucky because choosing my degree was just based on an interest of mine in high school that I thought would be interesting. It's no different than other people choosing to study what's interesting but in my case, comp sci and programming pays well in the economy while history doesn't. Student loans are a vicious supply and demand cycle. Students can take out loans to cover school so universities realise they can charge more which in turns leads to students taking out more to cover education.

humanrebar 8y ago
> Most 18 year olds have never had anything more than a minimum wage jobs and now they are supposed to be responsible for making decisions worth more than they've made in their entire life and lasting longer than they've been alive? They're old enough to know that $10,000 is real money and that they should be asking for advice and help if they feel over their heads.

learnstats2 8y ago

18 year olds have no experience of financial decision making and are asked to make one of the most major financial decisions of their life immediately upon being eligible to do so, with limited opportunity to delay this decision.

camgunz 8y ago

> Either you get the freedom of being an adult along with the responsibility or your leader decides what is best for you and you no longer have freedom. Maturity, experience, and knowledge are all complicated. Nothing magical happens to you when society deems you an adult; you still need to learn things. That's why there should be laws and regulations to protect people from situations like this, because you shouldn't be able to get into this kind of debt, and especially not at the beginning of your adult life. > She decides to fly abroad and just assumes that the loan holders won't require her to start repayment. I think you shouldn't be so dismissive. She went to grad school overseas. A lot of people come overseas to US grad schools and that's great for us, and a lot of our students go overseas to foreign grad schools and that's good for us too. Diversity of background, experience, and culture are important, and we all benefit from it. It should be a fundamental part of education. Furthermore this isn't her point. She couldn't get a deferment because Navient's software systems didn't have a key for overseas grad schools. That's so mind boggling to me I don't even know where to begin: Navient couldn't add a row to their DB, and it cost her over $7k (more, after it keeps getting compounded). > But even before that, she realizes in the middle of her undergrad that the tuition is to much. It's more likely she hit the cap on her government loans. Pretty much everyone does, which is why we have loan corporations like Navient and Great Lakes. If you look at her balance sheet, there are a lot of gov't loans for small amounts, then a couple big Sallie Mae loans. > But she decides to get a loan on bad terms because she doesn't want to loose her friends. Unless you're in a pretty lucrative program (like CS or engineering) or you're pre-professional (pre-med, pre-law), often one of the most valuable things you get from your college experience is a social network of professors, administrators, and fellow students. I pretty much owe my entire career to a few of my professors in college and if I'd had to leave that behind it would have cost me dearly financially. > But for irresponsible people like the author, I don't think any laws can protect her from herself. I do think she was irresponsible. I think private universities are generally a terrible deal unless you get a scholarship or you're in a top-10 school, I think going overseas for grad school and defaulting on her loans because she couldn't get a deferment was a bad move, and I think she probably should have taken a gap year and worked. I also think she should live somewhere cheaper with a better commute -- although it's really hard to get a job when you need to relocate, and again with that network thing. But I also think everyone is irresponsible, and that the penalty for being irresponsible in this way shouldn't be essentially a lifetime of debt. If Sallie Mae weren't legally allowed to lend her that $24k, she'd be remarkably better off. We have all kinds of laws that prevent people from entering into extremely bad deals (can't sell organs, can't agree to work in super hazardous conditions) because we recognize the power of institutions and society to coerce people into making these choices. We need to realize that the loan industry is one of these things that needs similar regulation.

pdpi 8y ago

Adulthood isn’t binary, it’s a process. This is pretty much captured by how the law sets age limits: In the US you can drive at 16, vote at 18, buy booze at 21, and become president at 35. Loans that will take decades to repay are arguably things that we shouldn’t expect younger adults to fully grasp.

justherefortart 8y ago

We don't let 18 year old kids drink. But we'll let a 17 year old join the military. It's all about priorities.