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>horrendously predatory loans backed by the government What's predatory about public loans. They all qualify for income based repayment, which means you'll nev

>horrendously predatory loans backed by the government What's predatory about public loans. They all qualify for income based repayment, which means you'll never pay more than 10% of your disposable income (any income over 1.5x the federal poverty level). If you make below that amount, you'll never be required to pay back anything. And they are cancelled after 20 years. Theoretically you'd owe tax on cancelled debt, but only up to the point of solvency. And a borrower who hasn't made enough income to pay back a student loan after 20 years probably isn't solvent, so won't pay anything. This also assumes that as more and more people reach this point, there isn't demand for congress to change the tax code. Public loans make up about 92% of all student loan debt as well, so the vast majority of loans are going to qualify.

HWR_14 5y ago
You also get credit for going into public service as well.
ejb999 5y ago
>>What's predatory about public loans. To some folks, having to pay off their loan, is considered predatory.
- Shared404 5y ago
  The predatory part is the pushing kids who don't understand finances into taking massive loans with high interest rates. I've passed on a traditional uni for this because I want to avoid debt, and still get "why don't you go to uni?"'d every so often by family and acquaintance's. And if the argument is "well, if you don't make enough to pay it, just don't!", as GP appears to be, I don't like spending other people's tax dollars dishonestly - especially not on textbook companies [0] and an expanding administrative staff. [0] Which bribe and cut-throat their way into forcing $100+ payments per student per class per semester. Pirating or buying second hand doesn't even work half the time now - you need the "online access", aka DRM.
  - learc83 5y ago
    >The predatory part is the pushing kids who don't understand finances into taking massive loans with high interest rates. There's literally lectures and a quiz you have to pass before you can take the loans that explains how repayment and interest rates work. For public loans the actual amount doesn't really matter because payment is income based. And the cap on lending is around $60k for 4 years, so I'd hardly use the word massive. >"why don't you go to uni?"' Of course all this only applies assuming you're American, which I'd guess your not since your friends call it uni.
    - Shared404 5y ago
      > There's literally lectures and a quiz you have to pass before you can take the loans that explains how repayment and interest rates work. Yes, but they are told their whole life "after college, you'll make enough to pay it off easy, no problem!" > For public loans the actual amount doesn't really matter because payment is income based. And the cap on lending is around $60k for 4 years, so I'd hardly say it's predatory. 60k, with an extremely high interest is most definitely a problem. > Of course all this only applies assuming your American, which I'd guess your not since your friends call it uni. Nope, I live in Texas. Anecdotally, my group of friends all flip between "school name"/School/Uni in conversation. In this case, I picked uni because I'm on mobile and typing is hard.
      - learc83 5y ago
        >Yes, but they are told their whole life "after college, you'll make enough to pay it off easy, no problem!" If anything, the predominant messaging today is the exact opposite of that. It also doesn't matter because public loans qualify for income based repayment, so it doesn't matter. If you end up stuck working at McDonalds for the rest of your life, you'll never pay back a dime. >60k, with an extremely high interest is most definitely a problem. Current undergrad rates are fixed at 3.73%. >Anecdotally, my group of friends all flip between "school name"/School/Uni in conversation. Interesting, (as an American myself) I've never heard an American use uni outside of conversation with Europeans.
lotsofpulp 5y ago
> What's predatory about public loans. It distorts prices and results in a suboptimal allocation of society’s resources, and results in people complaining about having a “degree” and having to sling coffee cups as their career.
- sarchertech 5y ago
  That's not what the word predatory generally means in the context of loans.
  - lotsofpulp 5y ago
    The predation is from voters today to taxpayers tomorrow. Politician A says they want to help students by paying for their education, or at least some of it. This requires cash flow, which results in more taxes, or at the least, entries into the government’s debt figures. Either way it shows up on the balance sheet and can affect tax liabilities today. Politician B says they want to help students, but they will instead have the government lend money to them, with zero under writing other than the “school” needing to be credentialed by some entity. The cash is spent, but an even bigger asset in the form of the debt is recorded, actually improving the balance sheet. Then you can whittle down whatever taxpayer subsidy is being given to the schools as is, and they can make up for it with tuition increases. Either way, government finances look good, and taxes can even be reduced.
    - sarchertech 5y ago
      Again "predatory lending" is a standard term, that has a commonly accepted meaning. What you're describing doesn't fit.
      - lotsofpulp 5y ago
        Yes, it is not the traditional use of the term. But for me, lending an 18 to 21 year old $200k +/- $50k to get a degree in literature from a non top school would qualify as predatory lending. The probability of that person digging themself out of that hole and being able to achieve the common expectations of a family, house, vacations, retirement, weekends, etc is pretty low.

HWR_14 5y ago

You also get credit for going into public service as well.

ejb999 5y ago

>>What's predatory about public loans. To some folks, having to pay off their loan, is considered predatory.

Shared404 5y ago
The predatory part is the pushing kids who don't understand finances into taking massive loans with high interest rates. I've passed on a traditional uni for this because I want to avoid debt, and still get "why don't you go to uni?"'d every so often by family and acquaintance's. And if the argument is "well, if you don't make enough to pay it, just don't!", as GP appears to be, I don't like spending other people's tax dollars dishonestly - especially not on textbook companies [0] and an expanding administrative staff. [0] Which bribe and cut-throat their way into forcing $100+ payments per student per class per semester. Pirating or buying second hand doesn't even work half the time now - you need the "online access", aka DRM.
- learc83 5y ago
  >The predatory part is the pushing kids who don't understand finances into taking massive loans with high interest rates. There's literally lectures and a quiz you have to pass before you can take the loans that explains how repayment and interest rates work. For public loans the actual amount doesn't really matter because payment is income based. And the cap on lending is around $60k for 4 years, so I'd hardly use the word massive. >"why don't you go to uni?"' Of course all this only applies assuming you're American, which I'd guess your not since your friends call it uni.
  - Shared404 5y ago
    > There's literally lectures and a quiz you have to pass before you can take the loans that explains how repayment and interest rates work. Yes, but they are told their whole life "after college, you'll make enough to pay it off easy, no problem!" > For public loans the actual amount doesn't really matter because payment is income based. And the cap on lending is around $60k for 4 years, so I'd hardly say it's predatory. 60k, with an extremely high interest is most definitely a problem. > Of course all this only applies assuming your American, which I'd guess your not since your friends call it uni. Nope, I live in Texas. Anecdotally, my group of friends all flip between "school name"/School/Uni in conversation. In this case, I picked uni because I'm on mobile and typing is hard.
    - learc83 5y ago
      >Yes, but they are told their whole life "after college, you'll make enough to pay it off easy, no problem!" If anything, the predominant messaging today is the exact opposite of that. It also doesn't matter because public loans qualify for income based repayment, so it doesn't matter. If you end up stuck working at McDonalds for the rest of your life, you'll never pay back a dime. >60k, with an extremely high interest is most definitely a problem. Current undergrad rates are fixed at 3.73%. >Anecdotally, my group of friends all flip between "school name"/School/Uni in conversation. Interesting, (as an American myself) I've never heard an American use uni outside of conversation with Europeans.

lotsofpulp 5y ago

> What's predatory about public loans. It distorts prices and results in a suboptimal allocation of society’s resources, and results in people complaining about having a “degree” and having to sling coffee cups as their career.

sarchertech 5y ago
That's not what the word predatory generally means in the context of loans.
- lotsofpulp 5y ago
  The predation is from voters today to taxpayers tomorrow. Politician A says they want to help students by paying for their education, or at least some of it. This requires cash flow, which results in more taxes, or at the least, entries into the government’s debt figures. Either way it shows up on the balance sheet and can affect tax liabilities today. Politician B says they want to help students, but they will instead have the government lend money to them, with zero under writing other than the “school” needing to be credentialed by some entity. The cash is spent, but an even bigger asset in the form of the debt is recorded, actually improving the balance sheet. Then you can whittle down whatever taxpayer subsidy is being given to the schools as is, and they can make up for it with tuition increases. Either way, government finances look good, and taxes can even be reduced.
  - sarchertech 5y ago
    Again "predatory lending" is a standard term, that has a commonly accepted meaning. What you're describing doesn't fit.
    - lotsofpulp 5y ago
      Yes, it is not the traditional use of the term. But for me, lending an 18 to 21 year old $200k +/- $50k to get a degree in literature from a non top school would qualify as predatory lending. The probability of that person digging themself out of that hole and being able to achieve the common expectations of a family, house, vacations, retirement, weekends, etc is pretty low.