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It's a damn shame we've let this crisis reach this scale. Along with healthcare, climate change, the debt, our inauguration, and so on, we've been essentially f

• ransom1538 8y ago
  Just let students default. The problem would be solved in a week. Poor investments should get poor returns. You should be able to default on any loan out of human dignity.
  • vilmosi 8y ago
    > Just let students default. It's not that easy. What's to stop everyone from defaulting?
    • ransom1538 8y ago
      Good question. EG Why doesn’t everyone default on a loan? This is asking “how do loans work”. Typically, a loan with interest is a gamble. You want to get your money back with a return. If you loan money you want to ensure you will get your money back by qualifying the applicant. There is a risk though because they might not pay it back, thus you increase the interest rate according to how qualified the loan is. Good investors really focus on getting a qualified applicant (one that can pay it back). Sometimes they don't get their money back and they are forced to write it off - it is apart of the loan business. Basically, I am not trying to be insulting but I will end up explaining how a loan works - so I will stop there. With college loans ALL basic loan concepts are wrong. You cannot default on a college loan by law. It follows you through marriage, bankruptcy, or even service in Afghanistan. The people which made these poor loans know they made poor loans backed by the US government. Thus, they have lobbyists pushing congress to ensure student loans are 'unforgivable'. SO! Investing in a student loan is a damn good deal. You have 0 chance of someone defaulting because it is illegal to default. The loan has zero risk. This is why tuition has exploded and why we have a crisis. So, if you want to major in 18th century French Dance at Yale for 190k - there isn't an investor willing to stop you.
      • vilmosi 8y ago
        I think you're slightly missing the point. If student loans can be defaulted, it doesn't matter what the investor thinks or what interest you get or if you're backed up by the government or not. Even if you study [insert profitable degree], the rational action to do after graduating is to default, since students typically don't have much to lose.
        • deleted 8y ago
          [deleted]
        • ransom1538 8y ago
          Exactly. It is a poor investment option. So less investments are made, so less students attend, tuition plummets, community colleges spring back to life, people focus on degrees that offer pay, kids exit with no unforgivable debt, on and on. That is bad?
          • vilmosi 8y ago
            It's not bad. But it doesn't matter how much tuition costs or what degrees offer pay or not. Everyone will study whatever they want, borrow at 1000% interest if necessary or 1% interest for "profitable" degrees, and then dump the dept as soon as they graduate. Or am I missing something? Original question, what's stopping everyone from defaulting right after graduation?
            • leoedin 8y ago
              What's to stop people defaulting on other unsecured loans, like credit cards? Some people do, but most people don't. Why? Because defaulting on a loan means a bad credit score and suddenly modern society becomes hard - no mortgage, no car loan, no more credit cards etc.
              • prostoalex 8y ago
                To default on a credit card you have to qualify for a credit card. Which generally requires some history with a bank that for youngsters involves a secured credit card to build credit - e.g. a credit card with $500 monthly limit paired with a $500 savings account that allows no withdrawals. What happens when a lender decides you're unqualified for a student loan?
    • specialist 8y ago
      Their individual credit ratings.
    • anoncoward111 8y ago
      Additionally can I get a refund for the $30,000 I paid in student loans? That was like 2 or 3 years worth of savings for me at the time.
  • usaar333 8y ago
    > The problem would be solved in a week. Solved in what way though? The end solution state might be one where loans are less available, further entrenching generational income inequality.
    • ransom1538 8y ago
      Yes. Loans should be harder to get. This will reduce school costs, reduce applicant numbers, and force students to really think if college is necessary. Community colleges will take more of a lead, tuition will plummet, kids will enter the work force without a “unforgivable” loan.
      • mschuster91 8y ago
        > This will reduce school costs, reduce applicant numbers, and force students to really think if college is necessary. In a society where academic qualification is more and more required, making loans harder to get will only drive the poorest people to even more desperate actions to ensure their kids get a chance in life. Don't get me wrong, the debt situation should be resolved (e.g. by making ALL education free, like in Europe), but the core problem of society that "undereducated" people are left to compete for menial tasks must also be fixed.
        • bluesnowmonkey 8y ago
          > In a society where academic qualification is more and more required Which is only the case because we handed out so many diplomas that it became a stigma not to have one... Which happened because we handed out student loans too easily. It's causing the problem more than it's solving it.
    • brazzledazzle 8y ago
      We’re so obsessed with stopping cheaters or lazy good-for-nothing’s that we’ll privatize at all costs. That’s including, oddly enough, publicly distributing the risk those private institutions take on. Why not just cut out the middle man and have the government pay for the higher education of the low and middle class directly?
  • ddebernardy 8y ago
    Aren't US student loans ultimately owned by the federal government and thus impossible to default on?
  • supercanuck 8y ago
    and Puerto Rico. A lot this nonsense would be solved if moral hazard was eliminated.
  • rayiner 8y ago
    That doesn’t “solve the problem.” 92% of student debt is owed to the federal government. And the federal government originates almost all new student debt. The poor returns thus will accrue to the taxpayer. But unlike other investors, however, the government won’t stop making these “poor investments.” Big College has convinced everyone that access to student loans without consideration for credit risk is the solution to every ill from technological change to racial inequality.
    • syshum 8y ago
      Big College has also convinced everyone that access to education with out consideration of the marketability of that education is the solution to ever ill.
  • cmurf 8y ago
    The Iceland solution, yes. Different scale of course, but also not nearly as bad for the world or Iceland as the bankers and investors who lost their shirts would have had everyone believe. My big beef is that Bush 2 and Congressional Republicans saw this coming, and in 2005 changed bankruptcy law severely curtailing, specifically students, from declaring bankruptcy. "2005 bankruptcy reform bill making private student loans nondischargeable" "Many debtors will have to work out repayment plans instead of having their obligations erased in bankruptcy court under the law" It's a much higher bar for a student to successfully claim hardship than other debtors as a result. http://www.nbcnews.com/id/7575010/ns/business-personal_finance/t/bush-signs-tougher-bankruptcy-bill-law/ http://www.nbcnews.com/id/7575010/ns/business-personal_finan... http://www.slate.com/blogs/moneybox/2015/04/16/student_loans_in_bankruptcy_how_the_bush_administration_pointlessly_screwed.html http://www.slate.com/blogs/moneybox/2015/04/16/student_loans...
• lend000 8y ago
  I often wonder how many problems would be fixed by adding a 2 term limit to the House and Senate.
  • virtuabhi 8y ago
    None.
  • et2o 8y ago
    Would just shift even more power to the parties, since you'd need to toe the line even more than present to get re-elected.
  • thatjsguy 8y ago
    We did this in Michigan. It doesn’t work. It’s an attractive platform item, but what ends up happening is lots of turnover means it’s easier for lobbyists to sway candidates. You also just lose institutional knowledge. And guess what? We have term limits and an entirely new governor still poisoned an entire town full of kids. Term limits don’t work.
    • pwned1 8y ago
      I'm from Michigan. I think they've worked well.
      • thatjsguy 8y ago
        The electorate will do what it wants. If people keep electing terrible reps, term limits don’t stop that, it just stops that one particular bad rep and replaces them with another. Similarly, we have some awesome Michigan House members who would be fantastic again, but they’re term-limited and have to run for something else to continue to serve. It’s sad.
        • TangoTrotFox 8y ago
          I think there's a strong argument that many representatives don't necessarily start awful, but are driven to awfulness in the pursuit of keeping themselves in office. Like you allude to, most voters are grossly misinformed or vote irrationally. And this irrationality and misinformation is very effectively exploited by special interests and monied groups. Consequently the desires of these special interests and monied groups start to become more important than the interests of society when a politician is primarily concerned about staying in office.
• drcode 8y ago
  I must say, as someone who made quite a few sacrifices to pay off my school debt, I'll be pretty miffed if less responsible people from my same generation get a break on their loans.
  • deleted 8y ago
    [deleted]
  • barrkel 8y ago
    The best is the enemy of the good. You'll find that in most peace deals, bad people get excused of crimes, but it's necessary for the greater good. There's certainly a moral hazard, but that's part of the deal - if we do things right, the bad situation won't be repeated.
  • cagenut 8y ago
    that's called being a spiteful jerk
  • thatjsguy 8y ago
    Somebody getting a break doesn’t bring you down, it just brings them up. I’m sorry you had to pay off your loans. I’m paying about $100,000 myself. But even if I didn’t get amnesty, I’d rather not have one more graduate who, like me, has sincerely considered whether simply being dead would be easier to deal with. And there are a lot of people like that. I’d rather be in debt forever if it means that subsequent multitudes can be free of the burden I carry. At least someone gets some relief.
    • TomMarius 8y ago
      It definitely does bring him down, as he could've pursued more opportunities/experiences/etc, but didn't. Something like "lost profits".
    • drcode 8y ago
      > Somebody getting a break doesn’t bring you down, it just brings them up. Well, the assumption here is that the money to "bring them up" can just be materialized out of thin air and doesn't have to be taken from other people, in turn.
• Waterluvian 8y ago
  > "as politicians concern themselves more so with existential power struggle" I've been watching The Vietnam War documentary. Nothing angers me more than hearing Presidentsspeak about "re-election" in the same sentences as they speak about mass casualty campaigns as if it's one of the primary strategic considerations of a war that kills hundreds of thousands. Politicians who have insulated themselves from the effects of the economy, the same way they insulate themselves from the effects of war, will be forever out of touch and therefore incapable of properly representing their people. Was it the Abrams Doctrine, I think, that described the purpose of Total War being that decision makers think twice because its their children, their constituencies, their local, State, and Federal economies that pay the price of war? Maybe the same concept needs to exist for education, healthcare, and climate change. Not that Total War exists anymore...
  • njarboe 8y ago
    Large numbers of nuclear weapons means total war between nuclear powers will escalate very quickly to nuclear armageddon. This (MAD) has prevented total war for generations, but has very costly tail risks that people growing up in the post-Cold War era are not likely to appreciate.
    • v_lisivka 8y ago
      Why nuclear? Why not chemical or biological WMD?
      • mmirate 8y ago
        Because nuclear - with exception of neutron bombs - destroys buildings, resources and materiel as well as people; chemical and biological attacks mostly don't.
      • njarboe 8y ago
        Chemical and biological really should not be grouped into the WMD label. They are not nearly as effective in the M and the D. See the saran attack on Tokyo. One small nuke would have been thousands of times more deadly. For a chemical attack to be as effective as a nuke one would need hundreds or thousands of bombs dropped on a single city. If you are going to do that then a firebombing raid can be much more effective for destruction. 300 B-29 caused more damage in a single night over Tokyo than either of the nuclear attacks later in the war (modern nukes are much bigger though).
• nwpsoel 8y ago
  And what if one political party loses by 4 points when voters have a college degree and loses by 21 points when voters have a postgraduate degree? [0] The controversy is that one political party wants education to be difficult to obtain. [0] https://en.wikipedia.org/wiki/United_States_presidential_election,_2016#Voter_demographics https://en.wikipedia.org/wiki/United_States_presidential_ele...
• pwned1 8y ago
  With PAYE and IBR, why does anyone default?
• bogomipz 8y ago
  >"Along with healthcare, climate change, the debt," There's an interesting parallel with the cost of healthcare. Increases in costs for both seem to outstrip inflation year over year. And there's lots of of people making lots of money in both sectors. And yet nobody in either sector seems to be able to say exactly why the costs are increasing at the untenable rates they are. The only thing Washington ever seems to do is kick the can down the road.
  • tryptophan 8y ago
    Hm...housing, healthcare, college, pharma are all heavily regulated and are subsidized by the government in one way or another. All are outpacing inflation by a very significant margin, for dubious gains in utility. Anyone else seeing a trend here?
    • bogomipz 8y ago
      I'm not understanding your comment. This is the exact same point I was making.
      • Bombthecat 8y ago
        He blames the government for increasing cost.
    • deleted 8y ago
      [deleted]
  • Someone 8y ago
    There’s a lot wrong with pricing of healthcare versus its costs, but that spending on it increases faster than inflation isn’t abnormal. If you ask people what’s most important for them, health ranks very high, often is #1. So, once you’re rich enough to pay for food, clothing, and living, almost all extra money should go to health, rather than, say, dining at three star restaurants, wearing tailor-made clothing, or four day working weeks. Also, automation makes things that can be automated cheaper, and, hence, things that can’t (or aren’t yet) relatively more expensive. Education, day care centers and healthcare fall in the latter category.
• blindwatchmaker 8y ago
  It's time for a debt jubilee.
  • paulmd 8y ago
    So people who do everything right and delayed purchasing a house/etc to pay student loans just get screwed? If I can make my loan payments, they can too. Student loan forgiveness is a solution that only helps a narrow slice of those affected by the student loan problem. It's not something that just affects those making payments, it affects literally everyone who ever had a loan. Jubilees are only going to decrease repayment rates (why would I pay if it's going to be forgiven next year) and drive up costs further (the government is paying, so why not renovate the athletic center?). The first step needs to be getting college costs under control, I'm not sure there needs to be another step. If you took out $100k in loans to pursue a degree in the arts, well, that's your problem.
    • alistairSH 8y ago
      Funny that you recognize the externalities of loan forgiveness but not defaults. It isn’t just the defaulter’s problem when they default. That loan was securitized and exists in our retirement accounts. That default increase the cost of credit in that market, so loans cost more for the rest of us. Anyway, not arguing we should erase all student debt. It, we have to acknowledge the problem is bigger than a few people’s bad financial choices.
    • AvocadoPanic 8y ago
      Maybe lending should be risk based like other types of lending. 250k for med school, sure. 100k for undergrad in women's studies - no government guarantees for you I'm sure there's enough data already on the RoI of various programs. Seems like there should be a floor / bar based on the RoI for programs to qualify for government backed loans to students.
      • taysic 8y ago
        When the gov is in charge of things, there are too many vested personal interests that would argue certain unprofitable programs need more funding anyway etc... The only way these things can be assessed with certainty is when a private company is giving out the loans and they have real skin in the game.
• rayiner 8y ago
  Making unsupported assertions can’t make them come true. College should controversial. College, as it exists today, entails large expense and opportunity cost. We became a very advanced society sending only a small percentage of people to college. There is little reason to think tripling the proportion of people who go to college will improve the fundamentals of the economy.
  • s3m4j 8y ago
    Every piece of historic evidence tends to prove that higher education for an ever growing part of the population seem to correlate with better living standards.
    • rayiner 8y ago
      In societies with large surpluses, young people can afford to waste years of their life on unproductive endeavours. That’s correlation not causation. It’s like lifestyle diseases. Nobody would encourage you to be sedentary, even though that’s correlated with higher living standards too.
    • darkerside 8y ago
      That doesn't necessarily have any bearing on cause and effect. It seems trivially obvious that, as living standards improve and people have higher levels of disposable income, we would invest it in educating our children, possibly at extremely poor rates of return.
    • barry-cotter 8y ago
      Every piece of historic evidence tends to prove that mobile phone usage for an ever growing part of the population seems to correlate with better living standards.
    • toast_coder 8y ago
      Except for the last 30 years...
• toast_coder 8y ago
  If you dont wont to be in debt, dont take the loan. Saying that you not getting your secondary education paid for by somebody else dooms you to a life of serfdom just sounds like you whining
  • jacobolus 8y ago
    This might be good advice to give to an individual, but it’s a terrible conclusion to draw society-wide. Similar to advice about the dangers of drug use, casual sex, driving without a seat belt, or the like. At a system level, we need to consider people’s demonstrated behavior and look at the practical outcomes of various policy interventions, not decide policy based on moral judgments about whether people deserve their misery. People are strongly pressured into taking these loans, told that they face much worse life prospects without the education than without the debt, and many of them do not have a full understanding of the risks and opportunities involved. Under the circumstances, many are going to take the loans, whether or not they hear your warning. When they subsequently can’t pay the debt back, it doesn’t really matter for society whether they are “whining” or not. What matters is that the debts hang around their necks like anchors, preventing them from getting on with their lives, depressing their lifetime earnings, keeping them from buying houses or starting families or taking higher paying jobs, etc., and ultimately making them less capable of paying their own medical bills, supporting their own retirements, and so on. These are large systemic problems which need to be addressed by large systemic changes, not by punishing people for supposed moral failings by forcing them into poverty.
• syshum 8y ago
  >>>It shouldn't be controversial that we need an educated population Its not, what should be controversial is the manner in which we are educating children. University based schooling is not the only way to obtain education, nor IMO is it is the best Personal we should be bringing back more vocational studies, more apprenticeships, and utilizing the ever increasing technology with things likes MOOC to bring the costs of education way down. I also not believe it should take 16+ years of a persons life to educate them. There are massive amounts of waste, inefficiencies, tradition in education that need to be eliminated. All of these are made worse not better by the modern belief that every single student should get a degree, and that is the right of every student to have someone else pay for that degree. We need to fix the fundamental issues in education first, most people however just want to throw more tax payer money at the problem and hope that by making the people in the work force poorer everything will get better.