11 ms·

U.S. Stepping Up Enforcement on Delinquent Student Loans

84 points by etaioinshrdlu 7y ago

lgleason 7y ago
I don't envy people on the receiving end of this. That said, it sounds like it's part of the trend to begin to put pressure on the universities by making student loans less attractive. If there are consequences for racking up large student loans that you can't pay people may think twice about taking them on. For years Universities have been increasing tuition on well beyond the rate of inflation, often for degrees that have no real market value, with the money going mostly to administrators not the ones actually creating and teaching the material. Unless you start to put pressure on the funding source etc. there is no way to begin to reign this in.
- crooked-v 7y ago
  Pressure on student loan repayments isn't going to change anything if the loans still have the same availability in the first place.
  - lgleason 7y ago
    If the executive order signed in March does what it says it will I would not be surprised if that changes as well...IE: shifting some of the liability for non-payment back on the university and requiring them to state what the default rate is for graduate. IE: IF you take on this loan, how likely will you be able to pay it back later on. https://www.foxbusiness.com/economy/trump-pursuing-ways-to-hold-colleges-accountable-for-student-loan-debt-free-speech https://www.foxbusiness.com/economy/trump-pursuing-ways-to-h...
    - debacle 7y ago
      Mortgage documents have to tell you what your monthly payment and total repayment amount will be. That would be a good thing to have for student loans as well.
    - throwawayjava 7y ago
      The executive order doesn't actually do anything about debt. It just requests reports from various agencies, which will then be used to help shape policy in 2020 when the Higher Education Act is reauthorized. Similar reports have been requested by previous administrations, to little effect. The EO was largely about free speech at research universities, which is extremely narrow and ignores the really problematic institutions both in terms of free speech and in terms of student loan debt. The free speech rules apply to places like UC Berkeley and UIUC (who are already obligated to follow 1A, and who the courts are adequately dealing with when the don't) but not places like Wheaton College and Cedarville University (both of whom will fire tenured faculty for not being Christian or Republican enough, and expel students for being unapologetically homosexual). Because the oversight is targeted at research institutions, it also completely ignores for-profit institutions where 50% of students fall into default as well as non-research private institutions which are often far more expensive than their public counter-parts. Both are by design -- requiring free speech and financial accountability from any recipient of federal student loan money would put lots of conservative christian colleges in very hot water...
      - jtbayly 7y ago
        And wouldn’t make an ounce of difference in the student debt problem, given the small numbers of students at private Christian schools. It’s also worth pointing out that other private schools, such as Vanderbilt, would also be in a lot of hot water for similar reasons.
- larrywright 7y ago
  Correlation isn't causation, but the cost of college tuition rose dramatically once student loans becamse easier to get. We have decades of studies that show that people will spend less money at a store when they have to pay cash vs when they use a credit or debit card. I see no reason why college wouldn't be the same. Who cares how much it costs? I've got plenty of loans and I'm sure I'll make plenty of money so that I can pay them off someday.
crooked-v 7y ago
I wonder how long until there's a "millenials are killing the student loan deferment industry" article.
- _asummers 7y ago
  Maybe if they didn't eat so much avocado toast, they'd be able to pay back their student loans! /s
godzillabrennus 7y ago
You can wring a dry towel and all you want but never get a drop of water. These people are by and large broke. It’s likely to cost more in enforcement than they’ll get back. At least the IRS will continue to lack funding so the rich don’t have to pay .
- lgleason 7y ago
  There are things in the works to shift some of the liability for defaulted student loans back on to the Universities along with some forgiveness programs attached to these. People who can afford to pay them back should, but the universities need to be held accountable for spiraling out of control costs for programs that students often can't pay back because of lack of market demand for skills and over-priced degrees.
tamaharbor 7y ago
Become a plumber or carpenter without going to college. Work for a large city and work a lot of overtime. Retire at 50 with 1.5x pay and full benefits.
conanbatt 7y ago
What's incredible is how politicians like Bernie Sandres and Elizabeth warren are sending messages to all these debtors that their debt is illegitimate and they shouldn't pay for it. I bet a beer you can trace delinquency to the politicians speeches
- WrtCdEvrydy 7y ago
  Deliquency can be traced to lies about placement rates and non-dischargeable loans.
  - conanbatt 7y ago
    Same culprits to both those counts.
- dang 7y ago
  Please don't take HN threads further into partisan flamewar. The more that happens, the more predictable comments become, and the idea here is to avoid the predictable.
shmerl 7y ago
Instead of collecting debts, they should figure out how to make education free.
- jtbayly 7y ago
  Is this meant to be sarcastic? I suppose it would be possible if you enslaved those with PHDs and unpaid debt, forcing them to teach at universities administrated by those enslaved for their debt, built by those enslaved for their debt. Pharaoh had a lot of things for “free,” as did the plantation owners in the US, but the cost of free is pretty much the opposite of free for those who end up doing the paying. And the cost to society is something I’m pretty sure most wouldn’t advocate today.
  - mschuster91 7y ago
    Not GP but he is serious. Look at Germany, we have essentially free university education as well as government assistance with cost of living (Bafög). Only thing you may need loans for is for cost of living not covered by Bafög (e.g. in high rent areas and you do not want to work aside of university), but that's on the low-end range - think 10k, 20k but no 100-200k like in the US. Same for single payer healthcare - we have for most people a single payer system and still we're not a socialist country as US republicans regularly whine and cry every time someone dares to propose a fix to your clusterfucks.
  - shmerl 7y ago
    I'm serious. Society can figure out how to make education free, and not put students in crazy debt for years. If you don't advocate it, you basically advocate debt profiteering.
    - techntoke 7y ago
      Lots of people advocate for abusing others because they benefit from it and never see any consequences.
    - karlakush 7y ago
      What makes you think we can find enough professors willing to work for free that this would even be in the realm of possibility?
nimbius 7y ago
Disclosure: I work as a blue-collar engine mechanic. Ive never been to college. That having been said, im familiar with debt after the 2008 housing collapse. I lost my truck and my trailer home, partly because of a shady home loan and partly because well, my employer went out of business. That having been said it was relatively easy to discharge these debts. the bank wasnt too upset about the home and offered to help me restructure payments, which I agreed to until I found someone else to buy it from me. The truck I sold back to the dealership...which incidentally also went bankrupt, but they were easy to work with. I know people in this town with student loans that show up at the local watering hole every week and count their beers in dollars and their tips in change. One of them got her license revoked because she wasnt able to make student loan payments, and had to move back in with her folks. Because she has outstanding student loan debt, she cant qualify for section 8 housing or food stamps. Even her family gets harassing calls about the money she cant pay back fast enough. She is a biologist, but all of her money goes straight to the loans. it has for 9 years now. Why is it I can ditch close to 90 grand in loans lickety-split but students cant? how is education any different?
- WrtCdEvrydy 7y ago
  Because a few people got fancy degrees and discharged their loans. I'd totally support discharging your loans and having your degree placed into some sort of ADMINISTRATIVE HOLD so it has no value until the loans are being paid back. You can easily pick up the payments once you're fully employed.
  - Thorrez 7y ago
    I don't understand how that would work. I can see 2 values in a degree: 1 the ability to put the degree on your resume, 2 the knowledge and enjoyment you got from the degree. I don't see how it's possible to remove 2. I guess you could remove 1 by making it illegal to put on your resume, but then how would you become "fully employed" when you can't put the degree on your resume?
    - WrtCdEvrydy 7y ago
maxheadroom 7y ago
>Collection costs such as processing fees and costs associated with potential civil litigation can also be added. What's to stop this from being abused, as the threshold for "potential civil litigation" is probably a low and subjective bar, which the poor couldn't afford to challenge/fight, if they were delinquent anyway...? Also, delinquent is simply late on payments and not defaulted, yeah? One is far more egregious than the other, is it not?
rayiner 7y ago
I’m convinced you can’t fix the education problem in the US until you can fix the demand side as well. Where I live in Maryland, you can do two years at the local community college (which is excellent) for $8,000 in tuition and fees (total), before finishing up at a four year-college. Very few people take advantage of the opportunity. Why are people clamoring for free college when they’re not using the cheaper options that are already available? Say we had free tuition at public colleges. Would we be able to get rid of federal student loans in that case? Or would people just turn their nose up at public colleges, and demand the government pay tuition for private schools? There is something psychologically messed up on the demand side.
- nicoburns 7y ago
  Because most people who study are looking to use their qualification to further their careers, and hiring tends to be very reputation based. It's that demand that would need to change.
  - alexhutcheson 7y ago
    If you do 2 years at a community college, then 2 years at University of Maryland, your degree just says “University of Maryland”. There’s no reason to break it out on your resume either. Anecdotally, it seems like the people I know who went the community college route ended up finishing their degrees at more prestigious universities than they would have if they went straight to a 4 year school.
    - anigbrowl 7y ago
      People are reasonably worried about the difficulty of changing schools mid-stream and whether they'll be able to pick up smoothly at the more prestigious school or be at an academic or social disadvantage relative to those who did their whole degree there. Also, these choices are faced primarily by young people who have no college experience and often little life experience in things like fiscal management. Meanwhile students are bombarded endorsements for the idea of being accepted to a prestigious university, whereas announcing that 'you're going to start community college!' is equivalent to signaling that you will be spending two years on an uncompetitive track. I think it's disingenuous to ignore these differences, or to assume that employers will necessarily take the broader view. I am not asserting that the approach you describe cannot work out very well for some individuals.
leereeves 7y ago
This article leaves important questions unanswered: It says the amount of money collected on delinquent student loans increased, but is that due to a policy change or due to tax cuts and improving economic conditions? The chart shows an increase in collections every year since 2014, with the largest increases in collections between 2014 and 2016, so it seems likely it's just an improving economy. But if there was a policy change, what changed?
exabrial 7y ago
Student loans need a TILA box: you're taking $100,000 loan for a $30k/year job. It'll take you 20 years to repay, do you wish to sign?
- harryh 7y ago
  To pay back a 100k loan at 4.5% interest (reasonable guess) in 20 years, you've got to pay about 7.5k a year or about 25% of that theoretical person's income. That's a heavy lift. Just doing the math.
- mindslight 7y ago
  All the check boxes in the world still can't obtain consent from a child. And make no mistake - someone about to graduate high school, herded by their parents and other authorities their entire life, is a child. It's time to admit the failure of this particular financial engineering scheme, and close it down. Rather than complaining about the money that has already been lost, be diligent in preventing whatever government-handout the industry scammers are cooking up next.
  - emmelaich 7y ago
    That's why an actual example with numbers is important, like the other replier. Also should add the typical earnings for person with the desired degree, with history. There's probably a case to be made that students were conned into unrealistic loans.
wpdev_63 7y ago
For people struggling with paying their student loans, their federal loans offer the option of being able to go on an income based repayment plan[0]. I haven't done it personally. The biggest problem with the US higher education system is that the universities have very little skin in the game. The government more or less prints money and 'loans' it out to students and props up the universities. If the government wasn't propping up the universities there wouldn't be a 1.3 trillion dollar student loan bubble[1] and the degrees that aren't worth the paper they're printed on would disappear. [0]:https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven https://studentaid.ed.gov/sa/repay-loans/understand/plans/in... [1]:https://www.bloomberg.com/news/articles/2018-12-17/u-s-student-loan-debt-sets-record-doubling-since-recession https://www.bloomberg.com/news/articles/2018-12-17/u-s-stude...
- snarf21 7y ago
  Exactly this. Prices started doubling when everyone starting getting loans. At the same time we need more craftsmen and tradespeople. The lesson is that if you give out free money, people will fight to be the first to get it.
viraptor 7y ago
> including the cost of placing a loan with a private collection agency I was under the impression that private collection agencies work on commission from the amount they recover. Is that not the case?
nickles 7y ago
> Hypothetically, a member of the Class of 2019 with $50,000 in loans would owe about $550 per month over the next decade -- or $20 daily. (Assuming 6% annual interest and a 10-year term.) This article misrepresents the nature of student debt in the United States. The average student graduates with 60% of the debt in Bloomberg's hypothetical scenario ($29,800) [0] with a fixed rate of 5.05% [1]. This leads to a monthly payment of ~$320 with a 10y term, 58% of Bloomberg's calculation. Student loan debt is absolutely a major problem, but it's important to rely on facts, not hypothetical scenarios. [0] https://studentloanhero.com/student-loan-debt-statistics/ https://studentloanhero.com/student-loan-debt-statistics/ [1] https://studentaid.ed.gov/sa/types/loans/interest-rates https://studentaid.ed.gov/sa/types/loans/interest-rates
thrower123 7y ago
I feel badly for the people that got sold college as an aspiration that they weren't qualified for, and dropped out after a couple of semesters. I don't feel badly for the 30-somethings I know who racked up expensive private school loans, bumbled around through "finding themselves", failed startups, went back to school for more debt, traveled the world, and now are finding the bill for that irresponsibility coming due.
musicale 7y ago
There doesn't seem to be much of a counterbalance to the drastic increases in tuition and fees, which have outpaced inflation for some 40 years or more.
bayareanative 7y ago
I'm homeless with $9k owed to Betsy DeVos' Navient, not the Federal Govt, went through bankruptcy and can't get a job with a degree that isn't usable for reasons other than itself. Seems like another case of the vampires squeezing the blood of poor to pay for the tax cuts and welfare for the rich. Isn't it the usual case the weakest members of society are routinely scapegoated when there's a nationalist, bifurcating upheaval?

84 points by etaioinshrdlu 7y ago

I don't envy people on the receiving end of this. That said, it sounds like it's part of the trend to begin to put pressure on the universities by making student loans less attractive. If there are consequences for racking up large student loans that you can't pay people may think twice about taking them on. For years Universities have been increasing tuition on well beyond the rate of inflation, often for degrees that have no real market value, with the money going mostly to administrators not the ones actually creating and teaching the material. Unless you start to put pressure on the funding source etc. there is no way to begin to reign this in.

crooked-v 7y ago
Pressure on student loan repayments isn't going to change anything if the loans still have the same availability in the first place.
- lgleason 7y ago
  If the executive order signed in March does what it says it will I would not be surprised if that changes as well...IE: shifting some of the liability for non-payment back on the university and requiring them to state what the default rate is for graduate. IE: IF you take on this loan, how likely will you be able to pay it back later on. https://www.foxbusiness.com/economy/trump-pursuing-ways-to-hold-colleges-accountable-for-student-loan-debt-free-speech https://www.foxbusiness.com/economy/trump-pursuing-ways-to-h...
  - debacle 7y ago
    Mortgage documents have to tell you what your monthly payment and total repayment amount will be. That would be a good thing to have for student loans as well.
  - throwawayjava 7y ago
    The executive order doesn't actually do anything about debt. It just requests reports from various agencies, which will then be used to help shape policy in 2020 when the Higher Education Act is reauthorized. Similar reports have been requested by previous administrations, to little effect. The EO was largely about free speech at research universities, which is extremely narrow and ignores the really problematic institutions both in terms of free speech and in terms of student loan debt. The free speech rules apply to places like UC Berkeley and UIUC (who are already obligated to follow 1A, and who the courts are adequately dealing with when the don't) but not places like Wheaton College and Cedarville University (both of whom will fire tenured faculty for not being Christian or Republican enough, and expel students for being unapologetically homosexual). Because the oversight is targeted at research institutions, it also completely ignores for-profit institutions where 50% of students fall into default as well as non-research private institutions which are often far more expensive than their public counter-parts. Both are by design -- requiring free speech and financial accountability from any recipient of federal student loan money would put lots of conservative christian colleges in very hot water...
    - jtbayly 7y ago
      And wouldn’t make an ounce of difference in the student debt problem, given the small numbers of students at private Christian schools. It’s also worth pointing out that other private schools, such as Vanderbilt, would also be in a lot of hot water for similar reasons.
larrywright 7y ago
Correlation isn't causation, but the cost of college tuition rose dramatically once student loans becamse easier to get. We have decades of studies that show that people will spend less money at a store when they have to pay cash vs when they use a credit or debit card. I see no reason why college wouldn't be the same. Who cares how much it costs? I've got plenty of loans and I'm sure I'll make plenty of money so that I can pay them off someday.

crooked-v 7y ago

I wonder how long until there's a "millenials are killing the student loan deferment industry" article.

_asummers 7y ago
Maybe if they didn't eat so much avocado toast, they'd be able to pay back their student loans! /s

godzillabrennus 7y ago

You can wring a dry towel and all you want but never get a drop of water. These people are by and large broke. It’s likely to cost more in enforcement than they’ll get back. At least the IRS will continue to lack funding so the rich don’t have to pay .

lgleason 7y ago
There are things in the works to shift some of the liability for defaulted student loans back on to the Universities along with some forgiveness programs attached to these. People who can afford to pay them back should, but the universities need to be held accountable for spiraling out of control costs for programs that students often can't pay back because of lack of market demand for skills and over-priced degrees.

tamaharbor 7y ago

Become a plumber or carpenter without going to college. Work for a large city and work a lot of overtime. Retire at 50 with 1.5x pay and full benefits.

conanbatt 7y ago

What's incredible is how politicians like Bernie Sandres and Elizabeth warren are sending messages to all these debtors that their debt is illegitimate and they shouldn't pay for it. I bet a beer you can trace delinquency to the politicians speeches

WrtCdEvrydy 7y ago
Deliquency can be traced to lies about placement rates and non-dischargeable loans.
- conanbatt 7y ago
  Same culprits to both those counts.
dang 7y ago
Please don't take HN threads further into partisan flamewar. The more that happens, the more predictable comments become, and the idea here is to avoid the predictable.

shmerl 7y ago

Instead of collecting debts, they should figure out how to make education free.

jtbayly 7y ago
Is this meant to be sarcastic? I suppose it would be possible if you enslaved those with PHDs and unpaid debt, forcing them to teach at universities administrated by those enslaved for their debt, built by those enslaved for their debt. Pharaoh had a lot of things for “free,” as did the plantation owners in the US, but the cost of free is pretty much the opposite of free for those who end up doing the paying. And the cost to society is something I’m pretty sure most wouldn’t advocate today.
- mschuster91 7y ago
  Not GP but he is serious. Look at Germany, we have essentially free university education as well as government assistance with cost of living (Bafög). Only thing you may need loans for is for cost of living not covered by Bafög (e.g. in high rent areas and you do not want to work aside of university), but that's on the low-end range - think 10k, 20k but no 100-200k like in the US. Same for single payer healthcare - we have for most people a single payer system and still we're not a socialist country as US republicans regularly whine and cry every time someone dares to propose a fix to your clusterfucks.
- shmerl 7y ago
  I'm serious. Society can figure out how to make education free, and not put students in crazy debt for years. If you don't advocate it, you basically advocate debt profiteering.
  - techntoke 7y ago
    Lots of people advocate for abusing others because they benefit from it and never see any consequences.
  - karlakush 7y ago
    What makes you think we can find enough professors willing to work for free that this would even be in the realm of possibility?

nimbius 7y ago

Disclosure: I work as a blue-collar engine mechanic. Ive never been to college. That having been said, im familiar with debt after the 2008 housing collapse. I lost my truck and my trailer home, partly because of a shady home loan and partly because well, my employer went out of business. That having been said it was relatively easy to discharge these debts. the bank wasnt too upset about the home and offered to help me restructure payments, which I agreed to until I found someone else to buy it from me. The truck I sold back to the dealership...which incidentally also went bankrupt, but they were easy to work with. I know people in this town with student loans that show up at the local watering hole every week and count their beers in dollars and their tips in change. One of them got her license revoked because she wasnt able to make student loan payments, and had to move back in with her folks. Because she has outstanding student loan debt, she cant qualify for section 8 housing or food stamps. Even her family gets harassing calls about the money she cant pay back fast enough. She is a biologist, but all of her money goes straight to the loans. it has for 9 years now. Why is it I can ditch close to 90 grand in loans lickety-split but students cant? how is education any different?

WrtCdEvrydy 7y ago
Because a few people got fancy degrees and discharged their loans. I'd totally support discharging your loans and having your degree placed into some sort of ADMINISTRATIVE HOLD so it has no value until the loans are being paid back. You can easily pick up the payments once you're fully employed.
- Thorrez 7y ago
  I don't understand how that would work. I can see 2 values in a degree: 1 the ability to put the degree on your resume, 2 the knowledge and enjoyment you got from the degree. I don't see how it's possible to remove 2. I guess you could remove 1 by making it illegal to put on your resume, but then how would you become "fully employed" when you can't put the degree on your resume?
  - WrtCdEvrydy 7y ago

maxheadroom 7y ago

>Collection costs such as processing fees and costs associated with potential civil litigation can also be added. What's to stop this from being abused, as the threshold for "potential civil litigation" is probably a low and subjective bar, which the poor couldn't afford to challenge/fight, if they were delinquent anyway...? Also, delinquent is simply late on payments and not defaulted, yeah? One is far more egregious than the other, is it not?

rayiner 7y ago

I’m convinced you can’t fix the education problem in the US until you can fix the demand side as well. Where I live in Maryland, you can do two years at the local community college (which is excellent) for $8,000 in tuition and fees (total), before finishing up at a four year-college. Very few people take advantage of the opportunity. Why are people clamoring for free college when they’re not using the cheaper options that are already available? Say we had free tuition at public colleges. Would we be able to get rid of federal student loans in that case? Or would people just turn their nose up at public colleges, and demand the government pay tuition for private schools? There is something psychologically messed up on the demand side.

nicoburns 7y ago
Because most people who study are looking to use their qualification to further their careers, and hiring tends to be very reputation based. It's that demand that would need to change.
- alexhutcheson 7y ago
  If you do 2 years at a community college, then 2 years at University of Maryland, your degree just says “University of Maryland”. There’s no reason to break it out on your resume either. Anecdotally, it seems like the people I know who went the community college route ended up finishing their degrees at more prestigious universities than they would have if they went straight to a 4 year school.
  - anigbrowl 7y ago
    People are reasonably worried about the difficulty of changing schools mid-stream and whether they'll be able to pick up smoothly at the more prestigious school or be at an academic or social disadvantage relative to those who did their whole degree there. Also, these choices are faced primarily by young people who have no college experience and often little life experience in things like fiscal management. Meanwhile students are bombarded endorsements for the idea of being accepted to a prestigious university, whereas announcing that 'you're going to start community college!' is equivalent to signaling that you will be spending two years on an uncompetitive track. I think it's disingenuous to ignore these differences, or to assume that employers will necessarily take the broader view. I am not asserting that the approach you describe cannot work out very well for some individuals.

leereeves 7y ago

This article leaves important questions unanswered: It says the amount of money collected on delinquent student loans increased, but is that due to a policy change or due to tax cuts and improving economic conditions? The chart shows an increase in collections every year since 2014, with the largest increases in collections between 2014 and 2016, so it seems likely it's just an improving economy. But if there was a policy change, what changed?

exabrial 7y ago

Student loans need a TILA box: you're taking $100,000 loan for a $30k/year job. It'll take you 20 years to repay, do you wish to sign?

harryh 7y ago
To pay back a 100k loan at 4.5% interest (reasonable guess) in 20 years, you've got to pay about 7.5k a year or about 25% of that theoretical person's income. That's a heavy lift. Just doing the math.
mindslight 7y ago
All the check boxes in the world still can't obtain consent from a child. And make no mistake - someone about to graduate high school, herded by their parents and other authorities their entire life, is a child. It's time to admit the failure of this particular financial engineering scheme, and close it down. Rather than complaining about the money that has already been lost, be diligent in preventing whatever government-handout the industry scammers are cooking up next.
- emmelaich 7y ago
  That's why an actual example with numbers is important, like the other replier. Also should add the typical earnings for person with the desired degree, with history. There's probably a case to be made that students were conned into unrealistic loans.

wpdev_63 7y ago

For people struggling with paying their student loans, their federal loans offer the option of being able to go on an income based repayment plan[0]. I haven't done it personally. The biggest problem with the US higher education system is that the universities have very little skin in the game. The government more or less prints money and 'loans' it out to students and props up the universities. If the government wasn't propping up the universities there wouldn't be a 1.3 trillion dollar student loan bubble[1] and the degrees that aren't worth the paper they're printed on would disappear. [0]:https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven https://studentaid.ed.gov/sa/repay-loans/understand/plans/in... [1]:https://www.bloomberg.com/news/articles/2018-12-17/u-s-student-loan-debt-sets-record-doubling-since-recession https://www.bloomberg.com/news/articles/2018-12-17/u-s-stude...

snarf21 7y ago
Exactly this. Prices started doubling when everyone starting getting loans. At the same time we need more craftsmen and tradespeople. The lesson is that if you give out free money, people will fight to be the first to get it.

viraptor 7y ago

> including the cost of placing a loan with a private collection agency I was under the impression that private collection agencies work on commission from the amount they recover. Is that not the case?

nickles 7y ago

> Hypothetically, a member of the Class of 2019 with $50,000 in loans would owe about $550 per month over the next decade -- or $20 daily. (Assuming 6% annual interest and a 10-year term.) This article misrepresents the nature of student debt in the United States. The average student graduates with 60% of the debt in Bloomberg's hypothetical scenario ($29,800) [0] with a fixed rate of 5.05% [1]. This leads to a monthly payment of ~$320 with a 10y term, 58% of Bloomberg's calculation. Student loan debt is absolutely a major problem, but it's important to rely on facts, not hypothetical scenarios. [0] https://studentloanhero.com/student-loan-debt-statistics/ https://studentloanhero.com/student-loan-debt-statistics/ [1] https://studentaid.ed.gov/sa/types/loans/interest-rates https://studentaid.ed.gov/sa/types/loans/interest-rates

thrower123 7y ago

I feel badly for the people that got sold college as an aspiration that they weren't qualified for, and dropped out after a couple of semesters. I don't feel badly for the 30-somethings I know who racked up expensive private school loans, bumbled around through "finding themselves", failed startups, went back to school for more debt, traveled the world, and now are finding the bill for that irresponsibility coming due.

musicale 7y ago

There doesn't seem to be much of a counterbalance to the drastic increases in tuition and fees, which have outpaced inflation for some 40 years or more.

bayareanative 7y ago

I'm homeless with $9k owed to Betsy DeVos' Navient, not the Federal Govt, went through bankruptcy and can't get a job with a degree that isn't usable for reasons other than itself. Seems like another case of the vampires squeezing the blood of poor to pay for the tax cuts and welfare for the rich. Isn't it the usual case the weakest members of society are routinely scapegoated when there's a nationalist, bifurcating upheaval?