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> I also think the author should be willing to accept 100% blame for the debt, which it seems like they aren't. This isn't a productive way of treating bad deb

> I also think the author should be willing to accept 100% blame for the debt, which it seems like they aren't. This isn't a productive way of treating bad debt - and it is particularly questionable in light of the treatment the major banks received in the 2008 crisis. The system, and it is a pretty good one, is that the lender is responsible for judging the risk of who they are lending to. If they judge correctly and the venture succeeds, the money comes back with interest. If the venture fails, then the money is lost in bankruptcy and the slate is wiped mostly clear. Debtors prisons are stupid, holding people to the past is foolish. Once someone can't pay money back, then they can't pay it back and that should be the end of the matter. This idea that student loans can't be discharged through bankruptcy is one of the grossest unfairnesses that the US foists on its young people. Pretending that a lenders hands are clean when they have given $100,000 to somebody studying an English major is crazy.

pasbesoin 8y ago
One more thing, debtors' prisons take a private debt, and then compound it with public spending. Prisons aren't cheap. They get outsourced. And then private debt becomes a vehicle for private profit (at taxpayer expense). Follow the money. P.S. I didn't actually RTFA, yet. The contemporary resurgence of support for "debtors' prisons" and the like, pushes my buttons. As well, letting Wall Street and kin off the hook while foreclosing on (and, per the previous, maybe locking up) some of their suckers.
newman8r 8y ago
I personally went through defaulting on student loans and being hassled by bill collectors, so I can relate to that situation - it totally sucks. I also agree that the laws pertaining to bankruptcy and student loans should be revisited. I also think predatory lending practices are a big problem. But despite all of that, I really feel like the author should own responsibility. It can simultaneously be a bad system and still be his fault.
- foobiekr 8y ago
  The quote, "My debt was the result, in equal measure, of a chain of rotten luck and a system that is an abject failure by design" really kind of made it hard to be empathetic for the rest of the article. In equal major, someone decided to go deep into debt obtaining not one but two degrees in English literature in the late 2000s when this was already well known to be a terrible idea. I think student debt should be reformed and it should be possible to discharge student debt through bankruptcy (with modifications to the previous status quo, I think), but this is just kind of grating.
eftychis 8y ago
I agree. That is why you pay them interest and the interest is also directly related to how risky the loan is considered. If you put a 10x asset on the line and have a history of paying your debts you pay much less interest on an x value loan, than if you are starting out. The whole framework of student loans is simply crazy and is a factor of inflation of tuition. (Greater supply of capital available to universities.) I am sorry, but politicians' here played the Pontius Pilate card on U.S. citizens and claimed they provide you with the option of education any wealthy democratic country needs. Alas if you are poor and head into this path, you have to consider that you have to make an unattainable monthly payment 6 months after graduating. (The payments I see assume you enter a really good market and attain a good salary with your entry Bachelor's degree. Alas the market is tough.) If you are in debtor's market (high inflation) good for you. Otherwise you are doomed, as the author points out. It is not the legal fault of the bank. (Morality aside.) The bank is going to earn as much of its assets (you that is) as the law allows. And the lawmakers gave the bank the high ground and killed the sentinel. You should NOT get a loan, if you can not invoke bankruptcy or do not have the renegotiate your debt. The bank provides you with a service. You are paying the bank the capital, the opportunity cost (expected gains from investment (comprises inflation)), and a risk buffer. In the case of student debts the bank is allowed to impose you with a risk buffer but practically has little to no risk. If the borrower and the lender are not in an equal footing prepare for disaster. I find the author has slipped into a mental trap due to their predicament. Education is priceless for the democratic society, not always for the individual. (I am not going into authoritarian regimes and why they keep people uneducated here -- read any serious political science intro text). Democracy requires educated involved individuals exercising their power responsibly. As an individual you are better off with the best education you can get that does not kill you (financially). In a lot of countries, this is determined by your abilities as a student and you don't have to worry that much about dying financially. Not so here in the U.S. You can spend 200k to get educated, but you are putting a bullet through your head practically, because you have no way to default to the unsustainable payment options. It is the same as the gambler's fallacy. Say you have a probability of winning 90%. One could say you are going to win, go all in. With 10% you have gone bust and have nothing. Student loans are the same. If 60% [1] of people have to take loans to study, I claim the system is broken and shall call you out as a hypocrite if you say people have equivalent opportunities to start their lives depending on their abilities and work. I say the canary in the coalmine is dead if people question if their kids should go to the university. That is not normal or a positive market indicator. I hope this question remains intrinsically foreign for me and people outside the U.S. How do you expect to compete and act as an individual, if you do/can not invest in yourself? Are you going to compete in unskilled manual labor with automation or "third world" countries (or slave countries like North Korea)? [1]https://www.studentdebtrelief.us/news/rising-tuition-costs-and-the-history-of-student-loans/ https://www.studentdebtrelief.us/news/rising-tuition-costs-a...

pasbesoin 8y ago

One more thing, debtors' prisons take a private debt, and then compound it with public spending. Prisons aren't cheap. They get outsourced. And then private debt becomes a vehicle for private profit (at taxpayer expense). Follow the money. P.S. I didn't actually RTFA, yet. The contemporary resurgence of support for "debtors' prisons" and the like, pushes my buttons. As well, letting Wall Street and kin off the hook while foreclosing on (and, per the previous, maybe locking up) some of their suckers.

newman8r 8y ago

I personally went through defaulting on student loans and being hassled by bill collectors, so I can relate to that situation - it totally sucks. I also agree that the laws pertaining to bankruptcy and student loans should be revisited. I also think predatory lending practices are a big problem. But despite all of that, I really feel like the author should own responsibility. It can simultaneously be a bad system and still be his fault.

foobiekr 8y ago
The quote, "My debt was the result, in equal measure, of a chain of rotten luck and a system that is an abject failure by design" really kind of made it hard to be empathetic for the rest of the article. In equal major, someone decided to go deep into debt obtaining not one but two degrees in English literature in the late 2000s when this was already well known to be a terrible idea. I think student debt should be reformed and it should be possible to discharge student debt through bankruptcy (with modifications to the previous status quo, I think), but this is just kind of grating.

eftychis 8y ago

I agree. That is why you pay them interest and the interest is also directly related to how risky the loan is considered. If you put a 10x asset on the line and have a history of paying your debts you pay much less interest on an x value loan, than if you are starting out. The whole framework of student loans is simply crazy and is a factor of inflation of tuition. (Greater supply of capital available to universities.) I am sorry, but politicians' here played the Pontius Pilate card on U.S. citizens and claimed they provide you with the option of education any wealthy democratic country needs. Alas if you are poor and head into this path, you have to consider that you have to make an unattainable monthly payment 6 months after graduating. (The payments I see assume you enter a really good market and attain a good salary with your entry Bachelor's degree. Alas the market is tough.) If you are in debtor's market (high inflation) good for you. Otherwise you are doomed, as the author points out. It is not the legal fault of the bank. (Morality aside.) The bank is going to earn as much of its assets (you that is) as the law allows. And the lawmakers gave the bank the high ground and killed the sentinel. You should NOT get a loan, if you can not invoke bankruptcy or do not have the renegotiate your debt. The bank provides you with a service. You are paying the bank the capital, the opportunity cost (expected gains from investment (comprises inflation)), and a risk buffer. In the case of student debts the bank is allowed to impose you with a risk buffer but practically has little to no risk. If the borrower and the lender are not in an equal footing prepare for disaster. I find the author has slipped into a mental trap due to their predicament. Education is priceless for the democratic society, not always for the individual. (I am not going into authoritarian regimes and why they keep people uneducated here -- read any serious political science intro text). Democracy requires educated involved individuals exercising their power responsibly. As an individual you are better off with the best education you can get that does not kill you (financially). In a lot of countries, this is determined by your abilities as a student and you don't have to worry that much about dying financially. Not so here in the U.S. You can spend 200k to get educated, but you are putting a bullet through your head practically, because you have no way to default to the unsustainable payment options. It is the same as the gambler's fallacy. Say you have a probability of winning 90%. One could say you are going to win, go all in. With 10% you have gone bust and have nothing. Student loans are the same. If 60% [1] of people have to take loans to study, I claim the system is broken and shall call you out as a hypocrite if you say people have equivalent opportunities to start their lives depending on their abilities and work. I say the canary in the coalmine is dead if people question if their kids should go to the university. That is not normal or a positive market indicator. I hope this question remains intrinsically foreign for me and people outside the U.S. How do you expect to compete and act as an individual, if you do/can not invest in yourself? Are you going to compete in unskilled manual labor with automation or "third world" countries (or slave countries like North Korea)? [1]https://www.studentdebtrelief.us/news/rising-tuition-costs-and-the-history-of-student-loans/ https://www.studentdebtrelief.us/news/rising-tuition-costs-a...