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The issue is even worse than this article suggests. The article focuses on graduates. But students who fail to graduate, for whatever reason, are even worse off

The issue is even worse than this article suggests. The article focuses on graduates. But students who fail to graduate, for whatever reason, are even worse off. They usually can't payoff their debt, so they go into default and have their credit destroyed for the rest of their lives. They can't try to go back to school later because they can't get new loans, and, with the latest laws, can't even transfer the credits they had. It becomes a catch-22 and downward spiral.

fredgrott 13y ago
its even worse than that.. Currently, if you have no income you are harassed to get into the payment by income program but that program requires you to make payments on previous loan payment program to become fully qualified for that lower payment plan. So guess what happens? Congress in their wisdom limited said plan to one try. That is right most of the people on that default list could have been avoided if the limit income plan was implemented properly.
- chiurox 13y ago
  Soon we will start seeing news of young graduates committing crime to pay off their student loans. Heck, it would be interesting to see a movie with this plot line.
  - sjg007 13y ago
    That explains the bitcoin thefts.
  - maxerickson 13y ago
    If you squint, "Falling Down" is sort of this movie, where ordinary guy loses his shit because of forces beyond his control. http://www.imdb.com/title/tt0106856/ http://www.imdb.com/title/tt0106856/
qwerta 13y ago
I think one can not go into personal bankruptcy for student loans...
- scarecrowbob 13y ago
  You are correct, but you can default, which carries worse penalties and still does not discharge the debt: http://www.asa.org/in-default/consequences/ http://www.asa.org/in-default/consequences/
dredmorbius 13y ago
The (usually Libertarian AFAIU) Library of Economics and Liberty isn't my usual stomping grounds, but Bryan Caplan writes well there on just that aspect in "What Bad Students Know that Good Economists Don't" The college premium skyrocketed over the last three decades. B.A.s now out-earn high school grads by 70-80%. College graduation, in contrast, barely rose. In econospeak, the supply of college graduates looks bizarrely price-inelastic. Over the last two months, I've read virtually everything ever written on this puzzle. All of the compelling stories converge on a single factor I've emphasized for years: The return to trying to get a degree is far lower than the return to successfully getting a degree. Why? Because marginal students routinely fail to graduate. The single best paper on this theme: "The Education Risk Premium" by Janice Eberly and Kartik Athreya. http://econlog.econlib.org/archives/2014/02/why_the_college.html http://econlog.econlib.org/archives/2014/02/why_the_college.... For various reasons, I've been saying for a year or so now that "we're not going to educate our way out of this mess". Education helps, yes, but it's also pretty distinctly limited, and I'm seeing increasing evidence that there's only so much potential among most students. Though there are notable exceptions: see "Stand and Deliver". More of my own take: http://www.reddit.com/r/dredmorbius/comments/1y5aq0/the_college_premium_graduation_rates_and/ http://www.reddit.com/r/dredmorbius/comments/1y5aq0/the_coll...

fredgrott 13y ago

its even worse than that.. Currently, if you have no income you are harassed to get into the payment by income program but that program requires you to make payments on previous loan payment program to become fully qualified for that lower payment plan. So guess what happens? Congress in their wisdom limited said plan to one try. That is right most of the people on that default list could have been avoided if the limit income plan was implemented properly.

chiurox 13y ago
Soon we will start seeing news of young graduates committing crime to pay off their student loans. Heck, it would be interesting to see a movie with this plot line.
- sjg007 13y ago
  That explains the bitcoin thefts.
- maxerickson 13y ago
  If you squint, "Falling Down" is sort of this movie, where ordinary guy loses his shit because of forces beyond his control. http://www.imdb.com/title/tt0106856/ http://www.imdb.com/title/tt0106856/

qwerta 13y ago

I think one can not go into personal bankruptcy for student loans...

scarecrowbob 13y ago
You are correct, but you can default, which carries worse penalties and still does not discharge the debt: http://www.asa.org/in-default/consequences/ http://www.asa.org/in-default/consequences/

dredmorbius 13y ago

The (usually Libertarian AFAIU) Library of Economics and Liberty isn't my usual stomping grounds, but Bryan Caplan writes well there on just that aspect in "What Bad Students Know that Good Economists Don't" The college premium skyrocketed over the last three decades. B.A.s now out-earn high school grads by 70-80%. College graduation, in contrast, barely rose. In econospeak, the supply of college graduates looks bizarrely price-inelastic. Over the last two months, I've read virtually everything ever written on this puzzle. All of the compelling stories converge on a single factor I've emphasized for years: The return to trying to get a degree is far lower than the return to successfully getting a degree. Why? Because marginal students routinely fail to graduate. The single best paper on this theme: "The Education Risk Premium" by Janice Eberly and Kartik Athreya. http://econlog.econlib.org/archives/2014/02/why_the_college.html http://econlog.econlib.org/archives/2014/02/why_the_college.... For various reasons, I've been saying for a year or so now that "we're not going to educate our way out of this mess". Education helps, yes, but it's also pretty distinctly limited, and I'm seeing increasing evidence that there's only so much potential among most students. Though there are notable exceptions: see "Stand and Deliver". More of my own take: http://www.reddit.com/r/dredmorbius/comments/1y5aq0/the_college_premium_graduation_rates_and/ http://www.reddit.com/r/dredmorbius/comments/1y5aq0/the_coll...