4 ms·

Expecting 18 year olds coming from relatively poor families to understand debt is a tall order in the US.

by ntsplnkv2 6y ago

Google234 6y ago
If you aren’t capable of understanding debt you should t go to college.
- rendall 6y ago
  Your moral judgment notwithstanding, here we are, discussing the problem of people unable to pay their expensive guaranteed loans. Perhaps your proposal is that, before someone takes out a loan, they take and pass a course that covers interest rates, credit scores, expected income, alternatives, and other such issues? Is that what you meant?
- rychco 6y ago
  I won't speculate whether it has anything to do with politics or financial literacy, but for many people in the US, debt is a widely accepted cost of participating in society. I am fortunate enough not to have any debt, but many of my peers will regularly go into debt in excess of $100K in order to afford the cost of higher education and a home. Debt is just an ordinary part of life in the US.
  - belval 6y ago
    There is a difference between using debt as a tool to live and taking on debt to earn a degree that will not eventually allow you to pay back that debt. There is nothing wrong (at least compared to student debt) with people having $400k+ mortgage or car payments, the issue arise when that money is used to earn a degree that has no monetary value.
    - ntsplnkv2 6y ago
      This argument only works if there is good opportunity outside of college, which is a huge stretch to claim these days.
- i_haz_rabies 6y ago
  And thus the cycle continues.
- ntsplnkv2 6y ago
  This is a somewhat insidious form of gatekeeping. Especially considering people make much more money if they have a college degree. Even if you don't understand debt, you understand that. The problem isn't incapability of understanding debt - it's never actually being taught it.
belval 6y ago
That's fair. Are there financial literacy courses in the US? I know in Canada they reintroduced them a few years ago because banks would push credits card on anyone older than 18 years old and that caused financial problems down the line. I guess what I struggle with when shaping my opinion on this issue is to balance accountability and empathy. I absolutely understand that an 18 years old might not do the math at all and I find it difficult to support having them struggle for multiple decades because of it. On the other hand, they are adults and by definition they did borrow that money, the lender is "right" to expect to see that money back.
- ntsplnkv2 6y ago
  > On the other hand, they are adults and by definition they did borrow that money, the lender is "right" to expect to see that money back. I don't necessarily agree with that. Who's fault is it really, when banks give out loans to young adults with no credit history to get an unknown degree at an unknown total cost? We punish young adults for making a poor decision, but we don't punish banks for giving out loans that don't have collateral. Seems unfair, no? And that's the problem. It's a risk free proposition for lenders - students can't default, the interest rates are high. But by allowing bankruptcy, then all the risk falls on the banks. Student loans essentially shouldn't exist, and only do because of the demand for college, which leads into the second problem: There aren't good alternatives to college in the west.

Expecting 18 year olds coming from relatively poor families to understand debt is a tall order in the US.

Google234 6y ago

If you aren’t capable of understanding debt you should t go to college.

rendall 6y ago
Your moral judgment notwithstanding, here we are, discussing the problem of people unable to pay their expensive guaranteed loans. Perhaps your proposal is that, before someone takes out a loan, they take and pass a course that covers interest rates, credit scores, expected income, alternatives, and other such issues? Is that what you meant?
rychco 6y ago
I won't speculate whether it has anything to do with politics or financial literacy, but for many people in the US, debt is a widely accepted cost of participating in society. I am fortunate enough not to have any debt, but many of my peers will regularly go into debt in excess of $100K in order to afford the cost of higher education and a home. Debt is just an ordinary part of life in the US.
- belval 6y ago
  There is a difference between using debt as a tool to live and taking on debt to earn a degree that will not eventually allow you to pay back that debt. There is nothing wrong (at least compared to student debt) with people having $400k+ mortgage or car payments, the issue arise when that money is used to earn a degree that has no monetary value.
  - ntsplnkv2 6y ago
    This argument only works if there is good opportunity outside of college, which is a huge stretch to claim these days.
i_haz_rabies 6y ago
And thus the cycle continues.
ntsplnkv2 6y ago
This is a somewhat insidious form of gatekeeping. Especially considering people make much more money if they have a college degree. Even if you don't understand debt, you understand that. The problem isn't incapability of understanding debt - it's never actually being taught it.

belval 6y ago

That's fair. Are there financial literacy courses in the US? I know in Canada they reintroduced them a few years ago because banks would push credits card on anyone older than 18 years old and that caused financial problems down the line. I guess what I struggle with when shaping my opinion on this issue is to balance accountability and empathy. I absolutely understand that an 18 years old might not do the math at all and I find it difficult to support having them struggle for multiple decades because of it. On the other hand, they are adults and by definition they did borrow that money, the lender is "right" to expect to see that money back.

ntsplnkv2 6y ago
> On the other hand, they are adults and by definition they did borrow that money, the lender is "right" to expect to see that money back. I don't necessarily agree with that. Who's fault is it really, when banks give out loans to young adults with no credit history to get an unknown degree at an unknown total cost? We punish young adults for making a poor decision, but we don't punish banks for giving out loans that don't have collateral. Seems unfair, no? And that's the problem. It's a risk free proposition for lenders - students can't default, the interest rates are high. But by allowing bankruptcy, then all the risk falls on the banks. Student loans essentially shouldn't exist, and only do because of the demand for college, which leads into the second problem: There aren't good alternatives to college in the west.