7 ms·

>Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medi

by tsotha 14y ago

>Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills. That's why we have bankruptcy laws. From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.

sc68cal 14y ago
That's why we have bankruptcy laws. Yes - bankruptcy laws that were passed in 2005 which made it significantly harder to get debt forgiven in bankruptcy, and also removed some forms of debt from being able to be discharged in bankruptcy: https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an... It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared. http://ssrn.com/abstract=1157158 http://ssrn.com/abstract=1157158 And that kind of debt is entirely optional. Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree.
- tsotha 14y ago
  >Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree. That's a self-refuting argument. If your degree was really the ticket to a "vibrant middle class" job you'd be able to pay off your student debt. The reality is not all degrees are created equal, and people should think a little bit before they go $200k into debt for a degree that's going lead to a $40k job. Granted, 18 year olds aren't very good at this kind of reasoning, but that's what parents are for. On top of that, for a lot of fields a degree from a public university is just as good as one from an Ivy. Nobody is entitled to a pricy private college education. Either you go on family money or you think very carefully about how those loans are going to get repaid.
  - sc68cal 14y ago
    I believe that the vast majority of student debt is not people going to an Ivy institution. The major concentration of serious debt issues has been in the private-education-as-big-business sector from companies like University of Phoneix and DeVry, whose business models depend on government backed student loans, or loans from private companies that are subsidized/guaranteed by the government (before President Obama signed a law that allowed the government to manage student loans without requiring a private company to act as an intermediary). http://www.motherjones.com/politics/2011/09/gi-bill-for-profit-colleges http://www.motherjones.com/politics/2011/09/gi-bill-for-prof... "Last winter, the Department of Veterans Affairs tasked its newly hired blogger, a cantankerous Iraq vet named Alex Horton, with investigating the website GIBill.com, one of many official-looking links that come up when you Google terms like "GI Bill schools." With names like ArmedForcesEDU.com and UseYourGIBill.us, these sites purport to inform military veterans how to best use their education benefits. In reality, Horton found, they're run by marketing firms hired by for-profit colleges to extol the virtues of high-priced online or evening courses. He concluded that GIBill.com "serves little purpose other than to funnel student veterans and convince them their options for education are limited to their advertisers." http://www.motherjones.com/media/2012/08/explosive-growth-profit-higher-education-numbers http://www.motherjones.com/media/2012/08/explosive-growth-pr... "The for-profit higher education industry was the target of a bruising report issued last week. Based on a two-year effort, the report detailed high rates of loan default, aggressive recruiting, higher than average tuition, low retention rates, and little job placement assistance. It was spearheaded by Sen. Tom Harkin, D-Iowa, a longtime critic of the industry. (ProPublica has written a number of pieces looking more closely at the explosive growth sector, including questionable recruiting and marketing.)" And finally - http://www.motherjones.com/politics/2009/11/university-phoenix-allegations-enrollment-abuses-persist http://www.motherjones.com/politics/2009/11/university-phoen... "After federal regulators accused the University of Phoenix of systematic enrollment abuses in 2004, the school's parent company paid out nearly $10 million to resolve the allegations. Phoenix allegedly had broken the law by tying recruiters' pay to enrollment numbers, U.S. Department of Education investigators found, creating pressure to sign up unqualified students. In the years since, Phoenix cemented its stature as the nation's largest for-profit school and the single biggest recipient of federal student aid. But some of the school's recruiters have continued to use high-pressure, deceptive tactics, according to a dozen current and former students and two former recruiters who spoke to ProPublica and Marketplace as part of a joint investigation."
- smsm42 14y ago
  Many jobs require a degree, but not every degree leads to a job. Unfortunately, easy access to huge loans and widespread confusion about the relationship between the degree and the paying jobs has lead to ever increasing number of people in huge debts with no way to repay it ever. It reminds me some recent history when people got into huge debt in order to get something that is sure to provide them huge value and make them rich - and then it turned out not to be so. We're heading into it again, full steam.
  - eli_gottlieb 14y ago
    The problem is that not getting a university degree still makes you far more likely to end up poor. So people are still making the "rational" investment, which is to take a 40% chance of a good job over a 10% chance (numbers pulled from my ass, but you get the point).
    - smsm42 14y ago
      Correlation != casuation. Degree in feminist basket weaving is not going to make you rich (unless you land a sinecure job in some Diversity Office, but these are severely limited in number) or even richer. It is almost guaranteed to make you significantly poorer unless you get some deal to get it for free. That's the part of the confusion - the fact that average college graduate now in his 40ies makes more than average non-graduate in his 40ies, does not mean getting into 100K debt would actually work out for you as a current college student. It's like saying "stock market returns 8% annually long term, so I'll put all my life saving into Shady Gadgets Inc. that was touted to me by some guy I don't know on the phone". That's not how rational investment is made.
      - tsotha 14y ago
        >Correlation != casuation. This. It's not at all clear people make more money as a result of college or if people who are generally more likely to make more money are also more likely to go to college. There are certainly some very famously high earning college dropouts.
bobwaycott 14y ago
While I'm not entirely disagreeing with your point, there is an element of dubious optionality wrt student debt when one systemically cannot find gainful employment without a college degree. College degrees are increasingly becoming the new high school diplomas—wherein they are, for all intents and purposes, of equal compulsory nature, without the defense of laws requiring all 18-21-year-olds to be there. Thus, for vast majorities of the population who wish to lead productive economic lives, the "option" isn't quite optional anymore.
- tsotha 14y ago
  I disagree. There are all kinds of things you can do that don't require a college degree, including any kind of owner-operated business, a military career, or a skilled trade. Even today only 40% of the population gets a college degree. That other 60% is doing something to make ends meet.
  - bobwaycott 14y ago
    I think you miss the point. Systemically, exiting high school and entering college is the narrative. It is the path students are being presented as the way forward, not an option forward. Culturally, there is a very strong set of expectations placed on people wrt university education, and this narrative determines people's recognized option paths. There are strong social determinants in place, both positive and negative, to which people react and from which they draw their conclusions--even unknowingly. Student debt has risen in tandem with the codification of the narrative. An entire industry of loan operations has exploited the inexperienced eighteen-year-olds of the last few decades, saddling them with lifelong debt in the pursuit of the supposed "dream" the American narrative has been selling them their whole lives. Suffice to say, when one talks about options available to people, one should talk deeply of the real viability and potentiality of those options on a person and his/her life, and refrain from rattling off platitudes of the things someone could do other than follow the narrative. Those things typically aren't qualitatively better, and usually wind up being part of the greater narrative as how we ease our consciences and wash our hands of people we allow to systemically fail.

by tsotha 14y ago

sc68cal 14y ago

That's why we have bankruptcy laws. Yes - bankruptcy laws that were passed in 2005 which made it significantly harder to get debt forgiven in bankruptcy, and also removed some forms of debt from being able to be discharged in bankruptcy: https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an... It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared. http://ssrn.com/abstract=1157158 http://ssrn.com/abstract=1157158 And that kind of debt is entirely optional. Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree.

tsotha 14y ago
>Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree. That's a self-refuting argument. If your degree was really the ticket to a "vibrant middle class" job you'd be able to pay off your student debt. The reality is not all degrees are created equal, and people should think a little bit before they go $200k into debt for a degree that's going lead to a $40k job. Granted, 18 year olds aren't very good at this kind of reasoning, but that's what parents are for. On top of that, for a lot of fields a degree from a public university is just as good as one from an Ivy. Nobody is entitled to a pricy private college education. Either you go on family money or you think very carefully about how those loans are going to get repaid.
- sc68cal 14y ago
  I believe that the vast majority of student debt is not people going to an Ivy institution. The major concentration of serious debt issues has been in the private-education-as-big-business sector from companies like University of Phoneix and DeVry, whose business models depend on government backed student loans, or loans from private companies that are subsidized/guaranteed by the government (before President Obama signed a law that allowed the government to manage student loans without requiring a private company to act as an intermediary). http://www.motherjones.com/politics/2011/09/gi-bill-for-profit-colleges http://www.motherjones.com/politics/2011/09/gi-bill-for-prof... "Last winter, the Department of Veterans Affairs tasked its newly hired blogger, a cantankerous Iraq vet named Alex Horton, with investigating the website GIBill.com, one of many official-looking links that come up when you Google terms like "GI Bill schools." With names like ArmedForcesEDU.com and UseYourGIBill.us, these sites purport to inform military veterans how to best use their education benefits. In reality, Horton found, they're run by marketing firms hired by for-profit colleges to extol the virtues of high-priced online or evening courses. He concluded that GIBill.com "serves little purpose other than to funnel student veterans and convince them their options for education are limited to their advertisers." http://www.motherjones.com/media/2012/08/explosive-growth-profit-higher-education-numbers http://www.motherjones.com/media/2012/08/explosive-growth-pr... "The for-profit higher education industry was the target of a bruising report issued last week. Based on a two-year effort, the report detailed high rates of loan default, aggressive recruiting, higher than average tuition, low retention rates, and little job placement assistance. It was spearheaded by Sen. Tom Harkin, D-Iowa, a longtime critic of the industry. (ProPublica has written a number of pieces looking more closely at the explosive growth sector, including questionable recruiting and marketing.)" And finally - http://www.motherjones.com/politics/2009/11/university-phoenix-allegations-enrollment-abuses-persist http://www.motherjones.com/politics/2009/11/university-phoen... "After federal regulators accused the University of Phoenix of systematic enrollment abuses in 2004, the school's parent company paid out nearly $10 million to resolve the allegations. Phoenix allegedly had broken the law by tying recruiters' pay to enrollment numbers, U.S. Department of Education investigators found, creating pressure to sign up unqualified students. In the years since, Phoenix cemented its stature as the nation's largest for-profit school and the single biggest recipient of federal student aid. But some of the school's recruiters have continued to use high-pressure, deceptive tactics, according to a dozen current and former students and two former recruiters who spoke to ProPublica and Marketplace as part of a joint investigation."
smsm42 14y ago
Many jobs require a degree, but not every degree leads to a job. Unfortunately, easy access to huge loans and widespread confusion about the relationship between the degree and the paying jobs has lead to ever increasing number of people in huge debts with no way to repay it ever. It reminds me some recent history when people got into huge debt in order to get something that is sure to provide them huge value and make them rich - and then it turned out not to be so. We're heading into it again, full steam.
- eli_gottlieb 14y ago
  The problem is that not getting a university degree still makes you far more likely to end up poor. So people are still making the "rational" investment, which is to take a 40% chance of a good job over a 10% chance (numbers pulled from my ass, but you get the point).
  - smsm42 14y ago
    Correlation != casuation. Degree in feminist basket weaving is not going to make you rich (unless you land a sinecure job in some Diversity Office, but these are severely limited in number) or even richer. It is almost guaranteed to make you significantly poorer unless you get some deal to get it for free. That's the part of the confusion - the fact that average college graduate now in his 40ies makes more than average non-graduate in his 40ies, does not mean getting into 100K debt would actually work out for you as a current college student. It's like saying "stock market returns 8% annually long term, so I'll put all my life saving into Shady Gadgets Inc. that was touted to me by some guy I don't know on the phone". That's not how rational investment is made.
    - tsotha 14y ago
      >Correlation != casuation. This. It's not at all clear people make more money as a result of college or if people who are generally more likely to make more money are also more likely to go to college. There are certainly some very famously high earning college dropouts.

bobwaycott 14y ago

While I'm not entirely disagreeing with your point, there is an element of dubious optionality wrt student debt when one systemically cannot find gainful employment without a college degree. College degrees are increasingly becoming the new high school diplomas—wherein they are, for all intents and purposes, of equal compulsory nature, without the defense of laws requiring all 18-21-year-olds to be there. Thus, for vast majorities of the population who wish to lead productive economic lives, the "option" isn't quite optional anymore.

tsotha 14y ago
I disagree. There are all kinds of things you can do that don't require a college degree, including any kind of owner-operated business, a military career, or a skilled trade. Even today only 40% of the population gets a college degree. That other 60% is doing something to make ends meet.
- bobwaycott 14y ago
  I think you miss the point. Systemically, exiting high school and entering college is the narrative. It is the path students are being presented as the way forward, not an option forward. Culturally, there is a very strong set of expectations placed on people wrt university education, and this narrative determines people's recognized option paths. There are strong social determinants in place, both positive and negative, to which people react and from which they draw their conclusions--even unknowingly. Student debt has risen in tandem with the codification of the narrative. An entire industry of loan operations has exploited the inexperienced eighteen-year-olds of the last few decades, saddling them with lifelong debt in the pursuit of the supposed "dream" the American narrative has been selling them their whole lives. Suffice to say, when one talks about options available to people, one should talk deeply of the real viability and potentiality of those options on a person and his/her life, and refrain from rattling off platitudes of the things someone could do other than follow the narrative. Those things typically aren't qualitatively better, and usually wind up being part of the greater narrative as how we ease our consciences and wash our hands of people we allow to systemically fail.