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It is never too late for education. It is always too early for crippling debt that exceeds your proven earning potential. None of this advice touches on the los

It is never too late for education. It is always too early for crippling debt that exceeds your proven earning potential. None of this advice touches on the lost principle of not putting one's future on layaway. Student load debt forgiveness is a death sentence for American politicians yet there are millions of us waiting for a miracle.

ZhuanXia 8y ago
Even the ability to declare bankruptcy would be nice. Millions are in a state of what amounts to indenture.
- qubex 8y ago
  I don’t mean to be contentious here, but the reason for which student debt cannot be discharged by bankruptcy is pretty sound: it’s because education (theoretically) adds warning power to an individual and cannot be liquidated. (I’m not a lawyer and am not an American either.)
  - jgamman 8y ago
    IIRC this was a policy decision change only 20 odd years ago. (also, not a lawyer or USAan)
    - zackmorris 8y ago
      You're correct, the George W. Bush administration banned student loans from bankruptcy in 2005: https://bostonstudentloanlawyer.com/discharging-student-loans-in-bankruptcy-almost-but-not-quite-impossible/ https://bostonstudentloanlawyer.com/discharging-student-loan... But you'll notice that it wasn't really talked about at the time in mainstream news (however, I knew about it as a progressive): https://www.google.com/search?q=george+w+bush+student+loan+bankruptcy+2005 https://www.google.com/search?q=george+w+bush+student+loan+b... For example, "student" is not mentioned on this page: 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... So many young people today think that this is how it always was, and don't realize that it's nonsense. Originally meant to decrease the deficit or whatnot, but having the opposite effect of raising the deficit as the US has become more uneducated and susceptible to ignorance. Unfortunately a lot of other draconian legislation was passed at that time - see the DMCA, etc. Now that the truth is coming out though, there's hope that some of this can get reversed after 2020 if enough people learn about the true history of controversial issues like these.
  - leetcrew 8y ago
    more to the point: it's an unsecured (ie, there's no collateral to take in the event of default) loan with a very low interest rate issued to a group of people who have little to no credit history.
    - telchar 8y ago
      The debt I've seen my peers saddled with has typically been 6-10%, issued mostly in the recession/post-recession years of low interest rates. It seems like exceedingly high interest to me when mortgages and car loans are half as much.
      - leetcrew 8y ago
        mortgages and auto loans are secured with assets. the lender can take back the car or house if you default, greatly limiting the risk of lending. a better comparison for an unsecured loan would be a credit card. please let me know if you find a credit card with anything near a 10% interest rate. afaik, the best rates are around 14% and only go to people with very good credit.
        telchar 8y ago
        I think student debt is the safest of all. It can't be discharged in bankruptcy anymore. Further, it's typically guaranteed by the government on top of that. Credit cards are a poor comparison I think.
        leetcrew 8y ago
        it's important not to conflate federal loans with private loans. neither can be discharged during bankruptcy, but only federal loans are guaranteed by the government. also, the government sets the interest rates on federal loans. a private student loan is not a particularly safe debt to issue. even though the loan cannot be discharged, there is still a substantial risk that the borrower will never be able to pay it back. credit cards and personal loans are a pretty good comparison IMO, as the main difference is the fact that student loans cannot be discharged. this is in fact priced in already; even private student loans have much lower interest rates than any other kind of unsecured loan.
  - Fomite 8y ago
    On the other hand, you can discharge medical debt, and not dying adds earning power to an individual and cannot be liquidated.
sjg007 8y ago
It will happen if you vote blue. The first wave of it was 10 year of payments and then debt forgiveness.
- xyzzyz 8y ago
  That will push college prices even higher.
  - kamarg 8y ago
    Can you explain why that is to me? I would think that if the expected return on college loans drops significantly, fewer large loans would be given out that can be passed on to universities which would see less demand for their product and would need to lower their prices accordingly.
    - Mountain_Skies 8y ago
      The universities aren't on the hook for student loan defaults so they don't care about the expected return for the borrower or the lender. If students borrowed from the schools directly, then the admissions process along with university spending patterns would be vastly different. The only thing we have that is remotely close to this is schools giving out scholarships to students who have great potential to be high earners who later donate back to the school.
      - l9k 8y ago
        A startup called Lambda started teaching (online) for free in exchange for a percentage of the new graduate's salary. This is called Income Sharing Agreements (ISA). https://www.nytimes.com/2019/01/08/business/dealbook/education-student-loans-lambda-schools.html https://www.nytimes.com/2019/01/08/business/dealbook/educati...
  - sjg007 8y ago
    There are plenty of mechanisms to counter this. One is direct funding of colleges as we did before via state and Federal funding. Another is to establish a feedback loop where loan guarantees and funding for the institution are a function of their students default rate: that way if the education doesn't lead to jobs then the school gets less money.
uberman 8y ago
This is an important comment and having worked extensively in this space, I would like to expound on it. The "best" college educations typically take 4 to 10 years to reach a break even point. Some degrees can result in a net loss of lifetime income. The older you get, typically the less monetary sense a degree makes. Couple this with an open admissions degree from a for profit college and you are likely on thin ice. If you (as a returning adult) want to continue your education, that is great. Just make sure you are doing it for the right reasons.
- malmsteen 8y ago
  laughing in french
matte_black 8y ago
The "miracle" is waiting for inflation to make your debt cheaper to pay.

ZhuanXia 8y ago

Even the ability to declare bankruptcy would be nice. Millions are in a state of what amounts to indenture.

qubex 8y ago
I don’t mean to be contentious here, but the reason for which student debt cannot be discharged by bankruptcy is pretty sound: it’s because education (theoretically) adds warning power to an individual and cannot be liquidated. (I’m not a lawyer and am not an American either.)
- jgamman 8y ago
  IIRC this was a policy decision change only 20 odd years ago. (also, not a lawyer or USAan)
  - zackmorris 8y ago
    You're correct, the George W. Bush administration banned student loans from bankruptcy in 2005: https://bostonstudentloanlawyer.com/discharging-student-loans-in-bankruptcy-almost-but-not-quite-impossible/ https://bostonstudentloanlawyer.com/discharging-student-loan... But you'll notice that it wasn't really talked about at the time in mainstream news (however, I knew about it as a progressive): https://www.google.com/search?q=george+w+bush+student+loan+bankruptcy+2005 https://www.google.com/search?q=george+w+bush+student+loan+b... For example, "student" is not mentioned on this page: 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... So many young people today think that this is how it always was, and don't realize that it's nonsense. Originally meant to decrease the deficit or whatnot, but having the opposite effect of raising the deficit as the US has become more uneducated and susceptible to ignorance. Unfortunately a lot of other draconian legislation was passed at that time - see the DMCA, etc. Now that the truth is coming out though, there's hope that some of this can get reversed after 2020 if enough people learn about the true history of controversial issues like these.
- leetcrew 8y ago
  more to the point: it's an unsecured (ie, there's no collateral to take in the event of default) loan with a very low interest rate issued to a group of people who have little to no credit history.
  - telchar 8y ago
    The debt I've seen my peers saddled with has typically been 6-10%, issued mostly in the recession/post-recession years of low interest rates. It seems like exceedingly high interest to me when mortgages and car loans are half as much.
    - leetcrew 8y ago
      mortgages and auto loans are secured with assets. the lender can take back the car or house if you default, greatly limiting the risk of lending. a better comparison for an unsecured loan would be a credit card. please let me know if you find a credit card with anything near a 10% interest rate. afaik, the best rates are around 14% and only go to people with very good credit.
      - telchar 8y ago
        I think student debt is the safest of all. It can't be discharged in bankruptcy anymore. Further, it's typically guaranteed by the government on top of that. Credit cards are a poor comparison I think.
        leetcrew 8y ago
        it's important not to conflate federal loans with private loans. neither can be discharged during bankruptcy, but only federal loans are guaranteed by the government. also, the government sets the interest rates on federal loans. a private student loan is not a particularly safe debt to issue. even though the loan cannot be discharged, there is still a substantial risk that the borrower will never be able to pay it back. credit cards and personal loans are a pretty good comparison IMO, as the main difference is the fact that student loans cannot be discharged. this is in fact priced in already; even private student loans have much lower interest rates than any other kind of unsecured loan.
- Fomite 8y ago
  On the other hand, you can discharge medical debt, and not dying adds earning power to an individual and cannot be liquidated.

sjg007 8y ago

It will happen if you vote blue. The first wave of it was 10 year of payments and then debt forgiveness.

xyzzyz 8y ago
That will push college prices even higher.
- kamarg 8y ago
  Can you explain why that is to me? I would think that if the expected return on college loans drops significantly, fewer large loans would be given out that can be passed on to universities which would see less demand for their product and would need to lower their prices accordingly.
  - Mountain_Skies 8y ago
    The universities aren't on the hook for student loan defaults so they don't care about the expected return for the borrower or the lender. If students borrowed from the schools directly, then the admissions process along with university spending patterns would be vastly different. The only thing we have that is remotely close to this is schools giving out scholarships to students who have great potential to be high earners who later donate back to the school.
    - l9k 8y ago
      A startup called Lambda started teaching (online) for free in exchange for a percentage of the new graduate's salary. This is called Income Sharing Agreements (ISA). https://www.nytimes.com/2019/01/08/business/dealbook/education-student-loans-lambda-schools.html https://www.nytimes.com/2019/01/08/business/dealbook/educati...
- sjg007 8y ago
  There are plenty of mechanisms to counter this. One is direct funding of colleges as we did before via state and Federal funding. Another is to establish a feedback loop where loan guarantees and funding for the institution are a function of their students default rate: that way if the education doesn't lead to jobs then the school gets less money.

uberman 8y ago

This is an important comment and having worked extensively in this space, I would like to expound on it. The "best" college educations typically take 4 to 10 years to reach a break even point. Some degrees can result in a net loss of lifetime income. The older you get, typically the less monetary sense a degree makes. Couple this with an open admissions degree from a for profit college and you are likely on thin ice. If you (as a returning adult) want to continue your education, that is great. Just make sure you are doing it for the right reasons.

malmsteen 8y ago
laughing in french

matte_black 8y ago

The "miracle" is waiting for inflation to make your debt cheaper to pay.