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> If you don't currently have a cash flow that would allow you to make a $500/month student loan payment, don't take out that loan. But that describes the majo

> If you don't currently have a cash flow that would allow you to make a $500/month student loan payment, don't take out that loan. But that describes the majority of students who take out loans to go to school full time. The entire point of the arrangement is that the thing you are taking out a loan for should improve your ability to actually pay off the loan. Our society and culture has encouraged students to go into debt with the promise that it will improve their future. But that is not panning out for many people. When so many people have the same kind of problem, we need to look at systemic causes.

onlyrealcuzzo 8y ago
Right. It's pretty convenient for the creditor that we do not teach finance in American high school. It's pretty convenient for the creditor that student loans are unique in that you CANNOT default on them. It's pretty convenient to the creditor that these loans are being offered to children, optimistic at the whole life they have ahead of them, eager to sign whatever terms to make their dreams a reality. It's pretty convenient to the creditor that although he has ZERO risk of the debtor defaulting, we don't enforce any regulation on the amount of money that can be loaned out for certain fields of study or to certain schools (for-profit private colleges). But, sure, blame it on the stupid millennials, 'cause they dreamed of being a success and listened to what society told them to do and went to college. Don't blame it on the debtor for lending money to people that shouldn't have ever been loaned money. If only they didn't go to that Art school and eat avocado toast for breakfast... Look: if a bank gave me a loan to build a six-thousand foot marble statue of my asshole, and I defaulted and couldn't pay it back, pretty sure no one would feel sorry for the bank. They'd say, what a dumb fucking bank! But oh how the tables turn when it comes to millenials. Give them some money for school, even when we know it's a bad investment, and we blame it on the kid for taking it! Next up, we'll be giving loans to drug addicts and blame them for spending the money on drugs...
- pnw_hazor 8y ago
  Schools that offer financial aid have professional financial aid counselors, academic advisors, and career advisors. I am pretty sure where the blame should go. edit: why is this comment down voted? Every time I took an aid package I has a meeting with a financial aid officer. Surely, their role and responsibility should be more than just pointing out where the student should sign on the promissory note for multi-thousand dollar loans.
freeopinion 8y ago
We need to quit ignoring systemic causes. One primary systemic cause is that people are taking out loans they cannot pay back with their current income. Another systemic cause is that institutions are loaning money to people who could not pay the money back at their current income. If a four year degree will cost $50K, and you agree to pay that back at 5% over 20 years, you need to be able to afford a $350/month payment. It can't depend on whether you win the lottery or whether you get a better job. It needs to depend on your current history, just like any other loan. If you can't afford to make a $350/month payment, you can't afford a $50K degree. It's that simple. Ohio State undergrad tuition is < $11000/year. You could replay that at 5% in 10 years for ~$120/month. Working 20 hours/week for $8/hour should cover net around $120/week. That leaves you ~$360/month to pay for food/rent/laundry/bus/whatever. If you can't afford this, you can't afford it. You are not entitled to this. It is not a basic human right. If you can't find an apartment near enough to campus within this price range, this won't work. Don't take out the loan. No matter how much you want the product. For your second year, if you can't make $240/month payments, don't take out another $11000 loan. Or negotiate a 20 year term for $75/month if you can afford last year's $120/month obligation plus this year's $75/month commitment. If you're still working 20 hours/week at $8/hour, maybe you can't afford a second year. I know it stinks, but if you can't afford to pay for college, you can't afford college. That's crummy. That's lousy. That's a lot of things. But it is also reality. Ignoring reality is a big systemic cause.
- tschwimmer 8y ago
  I think there’s a point where we have to ask ourselves if the systems we as a society designed in the name of efficiency are truly worth it. Do we essentially want to condemn a group of people (people for whom college will be financially untenable) to be a perpetual underclass? To have virtually no chance of improving their standard of living, perhaps for generations? Going to college is one of the largest drivers of social mobility after all. I think this argument can be potentially very paternalistic: you can’t afford to move out of your parent’s house, you can’t afford to have a child, you can’t afford to have any control over your existence. Calling it ‘lousy’ and ‘crummy’ trivialize it in my view. I think better adjectives are ‘existentially depressing’ and horrifying.’ Are we as humans so empatheticly deficient that we cannot say “I don’t really want to give up this money which will be spent on another person’s well being, but I’m not going to fight it”? I pay a lot of money in taxes that I’d prefer to spend on rent or food or healthcare or my family but ultimately I’m satisfied that at least some of it will go to making someone whose life is not very good just a bit better.

onlyrealcuzzo 8y ago

Right. It's pretty convenient for the creditor that we do not teach finance in American high school. It's pretty convenient for the creditor that student loans are unique in that you CANNOT default on them. It's pretty convenient to the creditor that these loans are being offered to children, optimistic at the whole life they have ahead of them, eager to sign whatever terms to make their dreams a reality. It's pretty convenient to the creditor that although he has ZERO risk of the debtor defaulting, we don't enforce any regulation on the amount of money that can be loaned out for certain fields of study or to certain schools (for-profit private colleges). But, sure, blame it on the stupid millennials, 'cause they dreamed of being a success and listened to what society told them to do and went to college. Don't blame it on the debtor for lending money to people that shouldn't have ever been loaned money. If only they didn't go to that Art school and eat avocado toast for breakfast... Look: if a bank gave me a loan to build a six-thousand foot marble statue of my asshole, and I defaulted and couldn't pay it back, pretty sure no one would feel sorry for the bank. They'd say, what a dumb fucking bank! But oh how the tables turn when it comes to millenials. Give them some money for school, even when we know it's a bad investment, and we blame it on the kid for taking it! Next up, we'll be giving loans to drug addicts and blame them for spending the money on drugs...

pnw_hazor 8y ago
Schools that offer financial aid have professional financial aid counselors, academic advisors, and career advisors. I am pretty sure where the blame should go. edit: why is this comment down voted? Every time I took an aid package I has a meeting with a financial aid officer. Surely, their role and responsibility should be more than just pointing out where the student should sign on the promissory note for multi-thousand dollar loans.

freeopinion 8y ago

We need to quit ignoring systemic causes. One primary systemic cause is that people are taking out loans they cannot pay back with their current income. Another systemic cause is that institutions are loaning money to people who could not pay the money back at their current income. If a four year degree will cost $50K, and you agree to pay that back at 5% over 20 years, you need to be able to afford a $350/month payment. It can't depend on whether you win the lottery or whether you get a better job. It needs to depend on your current history, just like any other loan. If you can't afford to make a $350/month payment, you can't afford a $50K degree. It's that simple. Ohio State undergrad tuition is < $11000/year. You could replay that at 5% in 10 years for ~$120/month. Working 20 hours/week for $8/hour should cover net around $120/week. That leaves you ~$360/month to pay for food/rent/laundry/bus/whatever. If you can't afford this, you can't afford it. You are not entitled to this. It is not a basic human right. If you can't find an apartment near enough to campus within this price range, this won't work. Don't take out the loan. No matter how much you want the product. For your second year, if you can't make $240/month payments, don't take out another $11000 loan. Or negotiate a 20 year term for $75/month if you can afford last year's $120/month obligation plus this year's $75/month commitment. If you're still working 20 hours/week at $8/hour, maybe you can't afford a second year. I know it stinks, but if you can't afford to pay for college, you can't afford college. That's crummy. That's lousy. That's a lot of things. But it is also reality. Ignoring reality is a big systemic cause.

tschwimmer 8y ago
I think there’s a point where we have to ask ourselves if the systems we as a society designed in the name of efficiency are truly worth it. Do we essentially want to condemn a group of people (people for whom college will be financially untenable) to be a perpetual underclass? To have virtually no chance of improving their standard of living, perhaps for generations? Going to college is one of the largest drivers of social mobility after all. I think this argument can be potentially very paternalistic: you can’t afford to move out of your parent’s house, you can’t afford to have a child, you can’t afford to have any control over your existence. Calling it ‘lousy’ and ‘crummy’ trivialize it in my view. I think better adjectives are ‘existentially depressing’ and horrifying.’ Are we as humans so empatheticly deficient that we cannot say “I don’t really want to give up this money which will be spent on another person’s well being, but I’m not going to fight it”? I pay a lot of money in taxes that I’d prefer to spend on rent or food or healthcare or my family but ultimately I’m satisfied that at least some of it will go to making someone whose life is not very good just a bit better.