4 ms·

As a recent CS grad who had around $20k of debt (and 16k of that is now paid off 9 months later) the terms are not generous. I had to take subsidized stafford l

by zanny 14y ago

As a recent CS grad who had around $20k of debt (and 16k of that is now paid off 9 months later) the terms are not generous. I had to take subsidized stafford loans each year just to qualify for my state grant, since it was supposed to be "needs based". My last loan is only 3.5% interest though, so I'm taking my time on it. The other poster covers it in greater detail, but after 6 months they expect payments, and deferring them only lasts so long (and I don't know how long). And you can't ever get rid of them. The answer still isn't to bail everyone out. It just perpetuates the problem. If higher education is to be a for profit business (at least in many cases) you can't create artificial lending markets like student loans, it just causes the absurd bubble that has popped up in the US. It should be flat "heres the cost, go try to get a loan for it" like you would a car or house. When the government starts handing out free money no questions asked with a repayment plan, schools just pile that on top of their tuition fees as profit. It doesn't hurt that we really should be looking to having online certifications for either free (MIT courses, etc) or extremely low cost. While the K-12 years also have a function as day care, hopefully adults don't require that cost, and stuffing them into giant brick buildings often thousands of miles away for months on end is really inefficient.

jelveh 14y ago
I agree that bailouts are not the answer. The answer is to let these loans default. That's how the lending system should work. No bailouts, but simple defaults. You as a lender are responsible for factoring in the probability of a default. If you haven't - sucks to be you. Same goes for government loans, e.g. you create an institutionalized Banking system (like the Federal Direct Student loans). And if you survive the coming mass default (http://www.zerohedge.com/news/2013-02-28/delinquencies-student-loans-surpass-those-credit-card-debt http://www.zerohedge.com/news/2013-02-28/delinquencies-stude...) - without gov. bailouts - you'll have learned a valuable lesson on lending: Don't give out ridiculous loans on ridiculous terms to people who can't afford them. And rest assured that the education system will find a way to adapt - probably by making education a lot cheaper again.
- B0Z 14y ago
  The problem with your solution is that the majority of student loans are government insured Stafford loans and a "defaulted" loan is still paid back to the lender for full principle by the American taxpayer. Support for this solution would be miniscule. In an aside, loans made to college kids to get a quality education is not a ridiculous loan on ridiculous terms to people who can't afford them.
  - sokoloff 14y ago
    I basically agree with you, but these ARE loans made to people without a specific, current means to afford them. That seems perfectly appropriate to me (and I assume to you), but this lack of being able to predict the future income stream of an individual is a large driver in making them not dischargeable, because that allows the product to exist. Because I agree with you(r presumed position) that these are not ridiculous loans and that their availability should be encouraged, I'm strongly in support of the terms necessary to make them available.
  - jelveh 14y ago
    I believe the American Taxpayer will have to pay for this either way, the choice is between effectively destroying the lives of those that default or giving them a fighting chance. > "In an aside, loans made to college kids to get a quality education is not a ridiculous loan on ridiculous terms to people who can't afford them." I'd like to disagree with you and I believe that a default rate of > 13% (and rising sharply - http://www.ed.gov/news/press-releases/first-official-three-year-student-loan-default-rates-published http://www.ed.gov/news/press-releases/first-official-three-y...) supports my statement.
    - zanny 14y ago
      It doesn't hurt that (at least for me) the ONLY reason I went to college was for the degree saying CS. I had been programming for years, wrote some WoW addons, and was bored out of my mind for 3 years straight taking lectures on things I could have easily read in textbooks or even off wikipedia. But the number of job opportunities when you have BS of CS on your resume are just orders of magnitude larger. That is colossally stupid. We need a better way to certify people for things than wasting years and tens of thousands of their dollars on this nonsense.

by zanny 14y ago

jelveh 14y ago

I agree that bailouts are not the answer. The answer is to let these loans default. That's how the lending system should work. No bailouts, but simple defaults. You as a lender are responsible for factoring in the probability of a default. If you haven't - sucks to be you. Same goes for government loans, e.g. you create an institutionalized Banking system (like the Federal Direct Student loans). And if you survive the coming mass default (http://www.zerohedge.com/news/2013-02-28/delinquencies-student-loans-surpass-those-credit-card-debt http://www.zerohedge.com/news/2013-02-28/delinquencies-stude...) - without gov. bailouts - you'll have learned a valuable lesson on lending: Don't give out ridiculous loans on ridiculous terms to people who can't afford them. And rest assured that the education system will find a way to adapt - probably by making education a lot cheaper again.

B0Z 14y ago
The problem with your solution is that the majority of student loans are government insured Stafford loans and a "defaulted" loan is still paid back to the lender for full principle by the American taxpayer. Support for this solution would be miniscule. In an aside, loans made to college kids to get a quality education is not a ridiculous loan on ridiculous terms to people who can't afford them.
- sokoloff 14y ago
  I basically agree with you, but these ARE loans made to people without a specific, current means to afford them. That seems perfectly appropriate to me (and I assume to you), but this lack of being able to predict the future income stream of an individual is a large driver in making them not dischargeable, because that allows the product to exist. Because I agree with you(r presumed position) that these are not ridiculous loans and that their availability should be encouraged, I'm strongly in support of the terms necessary to make them available.
- jelveh 14y ago
  I believe the American Taxpayer will have to pay for this either way, the choice is between effectively destroying the lives of those that default or giving them a fighting chance. > "In an aside, loans made to college kids to get a quality education is not a ridiculous loan on ridiculous terms to people who can't afford them." I'd like to disagree with you and I believe that a default rate of > 13% (and rising sharply - http://www.ed.gov/news/press-releases/first-official-three-year-student-loan-default-rates-published http://www.ed.gov/news/press-releases/first-official-three-y...) supports my statement.
  - zanny 14y ago
    It doesn't hurt that (at least for me) the ONLY reason I went to college was for the degree saying CS. I had been programming for years, wrote some WoW addons, and was bored out of my mind for 3 years straight taking lectures on things I could have easily read in textbooks or even off wikipedia. But the number of job opportunities when you have BS of CS on your resume are just orders of magnitude larger. That is colossally stupid. We need a better way to certify people for things than wasting years and tens of thousands of their dollars on this nonsense.