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>the average college graduate has $30,000 in debt, which doesn't actually seem that bad. Until you come to find out one of the college grads couldn’t get any e

>the average college graduate has $30,000 in debt, which doesn't actually seem that bad. Until you come to find out one of the college grads couldn’t get any employment and the one that did (with $100,000k+ in loans) got 3 part time jobs including Starbucks barista and mail delivery. That’s the reality for millions of America grads, not 6 figure SV jobs with stock options and health insurance. The numbers and realities are devistating, 1 million grads are defaulting on their loans every year. And your take on the income based repayment programs sounds like marketing and PR. These income based programs have been in play for over 10 years so the first groups of students (in government/non profit work) were in theory eligible to discharge their loans, yet something like 90% of the first batch were denied the discharge because the banks played games along the way (put students into deferment for a month while the banks reviewed student financials on annual renewals breaking the consecutive payment rule and restarting their 10 year clock every time). For the rest of the loan holders (the first batch who isn’t eligible for discharge until after 25 years) will be in a similar boat/rude awakening when their time comes - of the programs aren’t gutted first which has basically been threatened since the program began. Sure these programs exist but so does discharge of student loans in bankruptcy (but there is a reason why almost everyone thinks student loans aren’t dischargable in bankruptcy).

bluedevil2k 7y ago
> Until you come to find out one of the college grads couldn’t get any employment and the one that did (with $100,000k+ in loans) So they should get their college loans paid off by taxpayers that had nothing to do with their really really bad decision?
- onion2k 7y ago
  If the decision was based on government-backed advice like schools teaching "Everyone should have a degree!", and the government subsidising cheap loans for all then yes, obviously. It's a problem taxpayers created so it's a problem taxpayers should fix.
  - bluedevil2k 7y ago
    It's still a really really bad decision to go to a $100,000 school over a $20,000 school
    - lotsofpulp 7y ago
      It's a really bad decision to lend a kid $30k+ to obtain skills no one wants to pay for.
      - bluedevil2k 7y ago
        No, the person was lent $30k for the OPPORTUNITY to study anything they wanted, to become anything they wanted. The person CHOSE to obtain skills no one wants to pay for.
        lotsofpulp 7y ago
        My point is that the lender also made a bad decision.
        ChrisLomont 7y ago
        What lenders require you to list the classes you plan to take?
        lotsofpulp 7y ago
        I didn’t claim any lender did, just that it’s a bad idea to lend tens and hundreds of thousands of dollars to young people with no collateral and only a loose requirement to use it on “education”. No lender is actually stupid enough to do this, other than the US taxpayer.
        malandrew 7y ago
        Many US taxpayers aren't this stupid. The problem is that they need to contend with the votes of people who may or may not file taxes but still vote.
- will_brown 7y ago
  Well if you are going to frame it as taxpayers paying off the loans (I don’t necessarily agree with you framing it that way), then the taxpayers are also the ones that extended these guaranteed loans in the first place. So by your logic, yes taxpayers are responsible to the extent they are guaranteeing loans in the first place which is what allows the schools to charge artificial prices which the data shows can’t be repaid in millions of cases because the jobs and wages aren’t there. The article maybe just a few anecdotes but when the data amounts to 1M defaults a year, at what point are you going to stop complaing about the taxpayers having to make up for the bad decisions of 18 year old kids trying to better their future and question taxpayer funded loans allowing the runaway school costs in the first place?
  - kazinator 7y ago
    > taxpayers are responsible Taxpayers have no choice: pay taxes or face fines / jail.
    - tarmon 7y ago
      Arguably taxpayers also get to choose who they vote for. You can argue about the effectiveness of the democratic process in the US but it feels a tad disingenuous to suggest we have no responsibilities in this system we are all apart of.
      - kazinator 7y ago
        A political ballot doesn't carry enough bits of information for you to express how you would like to see student loans administered, and every other thing you'd like to influence. In the first place, a government like that of the US is a massive bureaucracy, only a tiny fraction of which is actually elected. No matter who is elected, pretty much the same people will be administering student loans.
      - malandrew 7y ago
        Of all tax units filing income taxes, 76.4 million tax units pay no federal income taxes. That's 44.4% of all tax units. That's approximately 44.4% of potential votes by people who likely choose politicians that are spending the money of those who do pay taxes. And of those that pay income taxes, a few pay the disproportionate share of those taxes. So basically, many people who are tax filers but not tax payers are getting to choose who they vote for, but others are left shouldering all the tax responsibility for the bad policies of those politicians. These tax filers might be paying other taxes like state and local sales tax, but those taxes are pretty much all state and local and irrelevant when we are talking about federal loan programs. https://www.taxpolicycenter.org/model-estimates/tax-units-zero-or-negative-income-tax-liability-september-2018/t18-0128-tax-units https://www.taxpolicycenter.org/model-estimates/tax-units-ze... * "A tax unit is an individual, or a married couple, that files a tax return or would file a tax return if their income were high enough, along with all dependents of that individual or married couple."
- moate 7y ago
  Yes.
- yardie 7y ago
  I'd just like to point out that when I was a student the university upgraded from a cafeteria to a foodhall (rated one of the best in the country), tore down old student dorms and replaced them with suites. And went into massive debt to pay for new buildings and renovate old ones. The students had no say in the matter and I'm sure if given the option would have preferred the old, paid for buildings. This was a state school of 30,000. The school and the state decided what tuition was going to be, not the students.
  - JudgeWapner 7y ago
    My college did the same. Tore down the old library and built a new one that put all the books behind robo shelves. Built a new gym, several new dorms, a "student center", basically anything other than contributions to education. It's like they had a surplus of cash and had to find a way to spend it.
    - bluedevil2k 7y ago
      They have to spend a certain % of endowment funds every year (4% maybe) in order to maintain tax-free status.
      - yardie 7y ago
        Uh, why not simply give it to the students?
- Frondo 7y ago
  Yes, because letting them funnel their debt-servicing money back into useful parts of the economy (houses, cars, businesses, whatever!) would be a much better thing for the country as a whole than what they're doing now. This debt is a huge bottleneck on the economy; it's slowing things up for a huge part of the population, and for what? We're not better off as a people. We're not building a better country or future this way. The arguments I've seen in favor are all "they made a bad decision, they should live with it" or "I paid mine off, why should they get a free ride" or any number of variations on that sort of thing. I haven't seen a single argument that the student debt status quo is good or healthy for the country, or is getting us where we want to be as a people. Personally, I don't give a shit what stupid degree people got or how much student debt there or how hurt those who paid theirs off will feel; hurt feelings or resentment are no good basis for policy. This is a bad scene for the country and forgiving the student debt would improve things in so, so, so many ways; the trade-offs are absolutely 100% worth it.
  - malandrew 7y ago
    > improve things Improve things for whom? Who is going to shoulder the disproportionate burden of forgiving all those loans?
    - amanaplanacanal 7y ago
      Uncle Sam.
      - malandrew 7y ago
        Uncle Sam is the US taxpayer, or more precisely, the minority of Americans paying most of the taxes.
  - bluedevil2k 7y ago
    Using your argument, why not pay off everyone’s car notes too?
rayiner 7y ago
There is no reason anyone should ever default on an IBR loan. That’s the whole point of the income-based repayment. The reason people still do it is because they don’t follow the proper procedures for requesting IBR or requesting forbearance. That’s a damning indictment of our educational system, that a million students a year who have at least been accepted into college can’t figure out a simple administrative procedure. But it’s not the fault of the program itself, nor does it call for radical change. Likewise, almost everyone who got rejected for the IBR forgiveness did so because they screwed up the administrative procedure: https://www.forbes.com/sites/zackfriedman/2019/05/01/99-of-borrowers-rejected-again-for-student-loan-forgiveness https://www.forbes.com/sites/zackfriedman/2019/05/01/99-of-b.... 73% didn’t meet the program requirements, and another 25% screwed up the application, not providing sufficient information. That’s not a sign of anything wrong with the program, it’s a sign of the total failure of our educational system. I’m quite put out that these issues are being used to justify tuition-free college. In my view, the existing system is actually pretty good. If your college education ends up in you earning a lot, you pay back more to the federal government. If it doesn’t, then the federal government takes a hair cut on your loans. The people who earn more subsidize those who earn less. The total cost to the government ends up being pretty low (IBR will cost the government about $18 billion per year over the next decade, a tiny fraction of the cost free college would cost.) If what’s preventing that system from working well is that people attending college can’t figure out the administrative requirements, then I’m sorry I don’t think that’s an acceptable excuse.
- will_brown 7y ago
  >There is no reason anyone should ever default on an IBR loan. That’s the whole point of the income-based repayment. Again that’s right in theory and what the banks report, however, individual law suits uncovered intentional efforts by the banks internally to force deferments and resetting the clock on IBR loan payers. Literally bank communications turned over in discovery on a number of lawsuits show instruction not to process annual financials, place the students in forebearance for a month, then process the documents so the clock reset. Case in point the banks at no point inform loan holders when the IBR discharge clocks reset (sure student knew they were in forbearance for a month every year, but in these cases the students timely submitted the documents and students have no control over the bank processing times), it’s only when the students went for the discharge and were the students informed there clocks reset annually. Further bank communications showed this was also intentionally done so over the years the banks counted on the student losing their records and proof they timely submitted their annual financials. And I’d argue that 98% (it’s actually 99.5%) of loan holders being denied discharge in IBR programs is proof the program is broken, but again the individual lawsuits against the banks/loan services broke this wide open. Then again we don’t need to look at the individual lawsuits either multiple state attorney generals have brought charges against the largest loan servicer for these acts and worse (continuing to collect on loans that were actually discharged), still it doesn’t seem that will help these students (like billion dollar fines against the banks didn’t help homeowners post 2008).
Balgair 7y ago
> 1 million grads are defaulting on their loans every year Source? That is astonishing! About 20 million people are expected to attend a college this fall [0]. With the expected graduation time of six years for undergrad [1], that means that each year's 'class' is only 3.33 million people. So, that means that about 1/3 people with an undergrad degree will default on their loans (yes, fast and dirty stats here). Couple that with the fact that only about 70% of people take out loans [2], and you have a default rate per class of ~43%. Yeah, ~2/5ths of people that take out loans will default on them?! Is that anywhere near the defualt rates of other types of loans (auto, home, etc)? This seems crazy. [0] https://nces.ed.gov/fastfacts/display.asp?id=372 https://nces.ed.gov/fastfacts/display.asp?id=372 [1] https://nces.ed.gov/fastfacts/display.asp?id=569 https://nces.ed.gov/fastfacts/display.asp?id=569 (this is pretty complex data, well worth the dive) [2] https://www.cnbc.com/2018/02/15/heres-how-much-the-average-student-loan-borrower-owes-when-they-graduate.html https://www.cnbc.com/2018/02/15/heres-how-much-the-average-s... EDIT: Yep, it seems to be true [3]. Home and auto loans are a bit harder to google, but they seem to be at about 4% and 6% respectively. Honestly, the default rates on student loans are really high compared to other loans of a similar timeline and monetary value. [3] https://www.cnbc.com/2018/08/13/twenty-two-percent-of-student-loan-borrowers-fall-into-default.html https://www.cnbc.com/2018/08/13/twenty-two-percent-of-studen...
- will_brown 7y ago
  Typically a debtor is going pay their home/car loans first (that’s not a huge surprise). I agree it’s an astonishing number, and once you begin looking past the data and at the individual stories/anecdotes it’s heartbreaking. After all look at this article people are literally leaving the country. I have 4 brothers all of us have a bachelors and advanced degree (1 MD, 2JDs and 2 Masters). I had a brother move to Korea to teach English, because he couldnt get a job. He had an undergraduate degree in information science and an MBA, graduated in 08’. People in this thread want to blame student choices and say it’s an issue of majors/skills...that’s not the problem.
  - Konnstann 7y ago
    Problems with the college system aside, why get an MBA without any work experience? Every successful MBA I know became a domain expert before pursuing theirs.

bluedevil2k 7y ago

> Until you come to find out one of the college grads couldn’t get any employment and the one that did (with $100,000k+ in loans) So they should get their college loans paid off by taxpayers that had nothing to do with their really really bad decision?

onion2k 7y ago
If the decision was based on government-backed advice like schools teaching "Everyone should have a degree!", and the government subsidising cheap loans for all then yes, obviously. It's a problem taxpayers created so it's a problem taxpayers should fix.
- bluedevil2k 7y ago
  It's still a really really bad decision to go to a $100,000 school over a $20,000 school
  - lotsofpulp 7y ago
    It's a really bad decision to lend a kid $30k+ to obtain skills no one wants to pay for.
    - bluedevil2k 7y ago
      No, the person was lent $30k for the OPPORTUNITY to study anything they wanted, to become anything they wanted. The person CHOSE to obtain skills no one wants to pay for.
      - lotsofpulp 7y ago
        My point is that the lender also made a bad decision.
        ChrisLomont 7y ago
        What lenders require you to list the classes you plan to take?
        lotsofpulp 7y ago
        I didn’t claim any lender did, just that it’s a bad idea to lend tens and hundreds of thousands of dollars to young people with no collateral and only a loose requirement to use it on “education”. No lender is actually stupid enough to do this, other than the US taxpayer.
        malandrew 7y ago
        Many US taxpayers aren't this stupid. The problem is that they need to contend with the votes of people who may or may not file taxes but still vote.
will_brown 7y ago
Well if you are going to frame it as taxpayers paying off the loans (I don’t necessarily agree with you framing it that way), then the taxpayers are also the ones that extended these guaranteed loans in the first place. So by your logic, yes taxpayers are responsible to the extent they are guaranteeing loans in the first place which is what allows the schools to charge artificial prices which the data shows can’t be repaid in millions of cases because the jobs and wages aren’t there. The article maybe just a few anecdotes but when the data amounts to 1M defaults a year, at what point are you going to stop complaing about the taxpayers having to make up for the bad decisions of 18 year old kids trying to better their future and question taxpayer funded loans allowing the runaway school costs in the first place?
- kazinator 7y ago
  > taxpayers are responsible Taxpayers have no choice: pay taxes or face fines / jail.
  - tarmon 7y ago
    Arguably taxpayers also get to choose who they vote for. You can argue about the effectiveness of the democratic process in the US but it feels a tad disingenuous to suggest we have no responsibilities in this system we are all apart of.
    - kazinator 7y ago
      A political ballot doesn't carry enough bits of information for you to express how you would like to see student loans administered, and every other thing you'd like to influence. In the first place, a government like that of the US is a massive bureaucracy, only a tiny fraction of which is actually elected. No matter who is elected, pretty much the same people will be administering student loans.
    - malandrew 7y ago
      Of all tax units filing income taxes, 76.4 million tax units pay no federal income taxes. That's 44.4% of all tax units. That's approximately 44.4% of potential votes by people who likely choose politicians that are spending the money of those who do pay taxes. And of those that pay income taxes, a few pay the disproportionate share of those taxes. So basically, many people who are tax filers but not tax payers are getting to choose who they vote for, but others are left shouldering all the tax responsibility for the bad policies of those politicians. These tax filers might be paying other taxes like state and local sales tax, but those taxes are pretty much all state and local and irrelevant when we are talking about federal loan programs. https://www.taxpolicycenter.org/model-estimates/tax-units-zero-or-negative-income-tax-liability-september-2018/t18-0128-tax-units https://www.taxpolicycenter.org/model-estimates/tax-units-ze... * "A tax unit is an individual, or a married couple, that files a tax return or would file a tax return if their income were high enough, along with all dependents of that individual or married couple."
moate 7y ago
Yes.
yardie 7y ago
I'd just like to point out that when I was a student the university upgraded from a cafeteria to a foodhall (rated one of the best in the country), tore down old student dorms and replaced them with suites. And went into massive debt to pay for new buildings and renovate old ones. The students had no say in the matter and I'm sure if given the option would have preferred the old, paid for buildings. This was a state school of 30,000. The school and the state decided what tuition was going to be, not the students.
- JudgeWapner 7y ago
  My college did the same. Tore down the old library and built a new one that put all the books behind robo shelves. Built a new gym, several new dorms, a "student center", basically anything other than contributions to education. It's like they had a surplus of cash and had to find a way to spend it.
  - bluedevil2k 7y ago
    They have to spend a certain % of endowment funds every year (4% maybe) in order to maintain tax-free status.
    - yardie 7y ago
      Uh, why not simply give it to the students?
Frondo 7y ago
Yes, because letting them funnel their debt-servicing money back into useful parts of the economy (houses, cars, businesses, whatever!) would be a much better thing for the country as a whole than what they're doing now. This debt is a huge bottleneck on the economy; it's slowing things up for a huge part of the population, and for what? We're not better off as a people. We're not building a better country or future this way. The arguments I've seen in favor are all "they made a bad decision, they should live with it" or "I paid mine off, why should they get a free ride" or any number of variations on that sort of thing. I haven't seen a single argument that the student debt status quo is good or healthy for the country, or is getting us where we want to be as a people. Personally, I don't give a shit what stupid degree people got or how much student debt there or how hurt those who paid theirs off will feel; hurt feelings or resentment are no good basis for policy. This is a bad scene for the country and forgiving the student debt would improve things in so, so, so many ways; the trade-offs are absolutely 100% worth it.
- malandrew 7y ago
  > improve things Improve things for whom? Who is going to shoulder the disproportionate burden of forgiving all those loans?
  - amanaplanacanal 7y ago
    Uncle Sam.
    - malandrew 7y ago
      Uncle Sam is the US taxpayer, or more precisely, the minority of Americans paying most of the taxes.
- bluedevil2k 7y ago
  Using your argument, why not pay off everyone’s car notes too?

rayiner 7y ago

There is no reason anyone should ever default on an IBR loan. That’s the whole point of the income-based repayment. The reason people still do it is because they don’t follow the proper procedures for requesting IBR or requesting forbearance. That’s a damning indictment of our educational system, that a million students a year who have at least been accepted into college can’t figure out a simple administrative procedure. But it’s not the fault of the program itself, nor does it call for radical change. Likewise, almost everyone who got rejected for the IBR forgiveness did so because they screwed up the administrative procedure: https://www.forbes.com/sites/zackfriedman/2019/05/01/99-of-borrowers-rejected-again-for-student-loan-forgiveness https://www.forbes.com/sites/zackfriedman/2019/05/01/99-of-b.... 73% didn’t meet the program requirements, and another 25% screwed up the application, not providing sufficient information. That’s not a sign of anything wrong with the program, it’s a sign of the total failure of our educational system. I’m quite put out that these issues are being used to justify tuition-free college. In my view, the existing system is actually pretty good. If your college education ends up in you earning a lot, you pay back more to the federal government. If it doesn’t, then the federal government takes a hair cut on your loans. The people who earn more subsidize those who earn less. The total cost to the government ends up being pretty low (IBR will cost the government about $18 billion per year over the next decade, a tiny fraction of the cost free college would cost.) If what’s preventing that system from working well is that people attending college can’t figure out the administrative requirements, then I’m sorry I don’t think that’s an acceptable excuse.

will_brown 7y ago
>There is no reason anyone should ever default on an IBR loan. That’s the whole point of the income-based repayment. Again that’s right in theory and what the banks report, however, individual law suits uncovered intentional efforts by the banks internally to force deferments and resetting the clock on IBR loan payers. Literally bank communications turned over in discovery on a number of lawsuits show instruction not to process annual financials, place the students in forebearance for a month, then process the documents so the clock reset. Case in point the banks at no point inform loan holders when the IBR discharge clocks reset (sure student knew they were in forbearance for a month every year, but in these cases the students timely submitted the documents and students have no control over the bank processing times), it’s only when the students went for the discharge and were the students informed there clocks reset annually. Further bank communications showed this was also intentionally done so over the years the banks counted on the student losing their records and proof they timely submitted their annual financials. And I’d argue that 98% (it’s actually 99.5%) of loan holders being denied discharge in IBR programs is proof the program is broken, but again the individual lawsuits against the banks/loan services broke this wide open. Then again we don’t need to look at the individual lawsuits either multiple state attorney generals have brought charges against the largest loan servicer for these acts and worse (continuing to collect on loans that were actually discharged), still it doesn’t seem that will help these students (like billion dollar fines against the banks didn’t help homeowners post 2008).

Balgair 7y ago

> 1 million grads are defaulting on their loans every year Source? That is astonishing! About 20 million people are expected to attend a college this fall [0]. With the expected graduation time of six years for undergrad [1], that means that each year's 'class' is only 3.33 million people. So, that means that about 1/3 people with an undergrad degree will default on their loans (yes, fast and dirty stats here). Couple that with the fact that only about 70% of people take out loans [2], and you have a default rate per class of ~43%. Yeah, ~2/5ths of people that take out loans will default on them?! Is that anywhere near the defualt rates of other types of loans (auto, home, etc)? This seems crazy. [0] https://nces.ed.gov/fastfacts/display.asp?id=372 https://nces.ed.gov/fastfacts/display.asp?id=372 [1] https://nces.ed.gov/fastfacts/display.asp?id=569 https://nces.ed.gov/fastfacts/display.asp?id=569 (this is pretty complex data, well worth the dive) [2] https://www.cnbc.com/2018/02/15/heres-how-much-the-average-student-loan-borrower-owes-when-they-graduate.html https://www.cnbc.com/2018/02/15/heres-how-much-the-average-s... EDIT: Yep, it seems to be true [3]. Home and auto loans are a bit harder to google, but they seem to be at about 4% and 6% respectively. Honestly, the default rates on student loans are really high compared to other loans of a similar timeline and monetary value. [3] https://www.cnbc.com/2018/08/13/twenty-two-percent-of-student-loan-borrowers-fall-into-default.html https://www.cnbc.com/2018/08/13/twenty-two-percent-of-studen...

will_brown 7y ago
Typically a debtor is going pay their home/car loans first (that’s not a huge surprise). I agree it’s an astonishing number, and once you begin looking past the data and at the individual stories/anecdotes it’s heartbreaking. After all look at this article people are literally leaving the country. I have 4 brothers all of us have a bachelors and advanced degree (1 MD, 2JDs and 2 Masters). I had a brother move to Korea to teach English, because he couldnt get a job. He had an undergraduate degree in information science and an MBA, graduated in 08’. People in this thread want to blame student choices and say it’s an issue of majors/skills...that’s not the problem.
- Konnstann 7y ago
  Problems with the college system aside, why get an MBA without any work experience? Every successful MBA I know became a domain expert before pursuing theirs.