Author Topic: Will student loan reform come for Gen Y?  (Read 15011 times)

EconDiva

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Will student loan reform come for Gen Y?
« on: January 30, 2016, 11:33:51 AM »
I know too many people drowning in student loan debt...Just 2 examples are below:


-A 37 year old friend of mine whose married with a 10 year old and a 3 month old, about to go through a divorce, with $160K in private student loans (has a BA and a MBA, both from top tier schools making about $65k but just got laid off)


-A single childless 36 year old relative of mine with $85k in private loan debt from an MBA with an online university currently working in property management (same industry as prior to receiving their MBA 5 years ago) making about $50K


I guess I'm a bit of a worrier, but I'm in the same age range and my loans aren't paid off yet (but will be soon God willing).  However, I know a good deal of people going into their 40s with tens and tens of thousands of dollars in student loan debt alone (some of which who are about to take on more student loan debt to get another degree in the HOPES of increasing their market value to earn more income to pay off the debt!).  What this means is they can't save anything for retirement before their 40s because they're just starting to pay on student loans in their 30s and 40s. 

I know I'm a bit of a worrier.  But I fear increases in social security payout age, severely underfunded retirement accounts and increased healthcare costs for my generation could be such a drastically different quality of life for me and my friends/peers/relatives around my age than what I witnessed my grandparents live growing up in their house that dare I say the future for Gen Y specifically just seems a little bleak??
« Last Edit: January 30, 2016, 11:38:57 AM by EconDiva »

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #1 on: January 30, 2016, 12:19:11 PM »
They borrowed the money I'm not paying their debt bc they don't understand math.

Will the govt stop allowing private universities to take advantage of the system and regulate them. Maybe. But as for those people who can't understand what they are doing I don't feel sorry for them. 

You control your future, what you do, how you spend money. If you can't sustain yourself with out govt subsidies you're doing everything wrong.

This is about the most complainy pants post I've seen on here in a long time.

I'm a millenial I graduated with no debt.  Thanks to working on the summers and scholarships. I got a degree with great pay in a STEM field.

This post doesn't even deserve a response.

But get off your ass and set your own path and stop worrying about crap the govt does.

lbmustache

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Re: Will student loan reform come for Gen Y?
« Reply #2 on: January 30, 2016, 12:23:50 PM »
I know too many people drowning in student loan debt...Just 2 examples are below:


-A 37 year old friend of mine whose married with a 10 year old and a 3 month old, about to go through a divorce, with $160K in private student loans (has a BA and a MBA, both from top tier schools making about $65k but just got laid off)


-A single childless 36 year old relative of mine with $85k in private loan debt from an MBA with an online university currently working in property management (same industry as prior to receiving their MBA 5 years ago) making about $50K


I guess I'm a bit of a worrier, but I'm in the same age range and my loans aren't paid off yet (but will be soon God willing).  However, I know a good deal of people going into their 40s with tens and tens of thousands of dollars in student loan debt alone (some of which who are about to take on more student loan debt to get another degree in the HOPES of increasing their market value to earn more income to pay off the debt!). What this means is they can't save anything for retirement before their 40s because they're just starting to pay on student loans in their 30s and 40s. 

I know I'm a bit of a worrier.  But I fear increases in social security payout age, severely underfunded retirement accounts and increased healthcare costs for my generation could be such a drastically different quality of life for me and my friends/peers/relatives around my age than what I witnessed my grandparents live growing up in their house that dare I say the future for Gen Y specifically just seems a little bleak??

The part I bolded is just people being stupid.

I'm conflicted on student loans because I believe education should be free/cheap as possible and the system is designed to prey on young people with no financial clue. But how do people take out over $100k of loans and they're majoring in Art or something equally low paying... come on now.

The part I italicized is poor money management for most people. Aren't most people doing IBR? But, most people would rather get a car, go out, buy clothes, eat dinner out every day, etc. than put 10% of their income towards retirement. Of course there are exceptions to this and you have people who are legitimately struggling. Not trying to discount the experiences or reality for them.

Also, aren't loans forgiven after 20/25 years? Then comes the issue of paying taxes on the remaining amount, but you would not have $200k of loans hanging over your head. Just $200k worth of income to pay taxes on... ha.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #3 on: January 30, 2016, 12:30:23 PM »
They borrowed the money I'm not paying their debt bc they don't understand math.

Will the govt stop allowing private universities to take advantage of the system and regulate them. Maybe. But as for those people who can't understand what they are doing I don't feel sorry for them. 

You control your future, what you do, how you spend money. If you can't sustain yourself with out govt subsidies you're doing everything wrong.

This is about the most complainy pants post I've seen on here in a long time.

I'm a millenial I graduated with no debt.  Thanks to working on the summers and scholarships. I got a degree with great pay in a STEM field.

This post doesn't even deserve a response.

But get off your ass and set your own path and stop worrying about crap the govt does.

Wow...that was really mean but I get your disgust since you assumed I meant that you need to be paying for my friends' student loan debt.   

For the record as I mentioned above my debt is going to be paid off.  But the story I posted above is the reality of a huge majority of the people around me in my age group.  Yes there are others who had fully funded or partially funded educations and are doing/will do fine.  But for those who clearly aren't/will not be I wonder what can be done and what is the answer.

But you are right that many people do not understand what they are doing by taking out huge student loans or else they wouldn't be doing it.  However, for many people who thought that taking on the debt would lead to better jobs and higher salaries, it has not.  The rationale in taking on the debt was based on the logic that it would lead to an improvement in their quality of life and more independence down the road...not the opposite. 

So you're not in the situation yourself and/or perhaps cannot relate to people who are, does not negate the fact that this reality will impact more than the people who are actually in this specific situation. 
« Last Edit: January 30, 2016, 04:09:15 PM by EconDiva »

Capsu78

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Re: Will student loan reform come for Gen Y?
« Reply #4 on: January 30, 2016, 12:49:51 PM »
It won't get reformed because its a racket with way too many snouts, both in the public sector and private sector at the feeding trough. 
It will collapse under it's own weight with few winners and many losers. That which can't be sustained indefinitely, won't be.

use2betrix

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Re: Will student loan reform come for Gen Y?
« Reply #5 on: January 30, 2016, 01:00:19 PM »
They borrowed the money I'm not paying their debt bc they don't understand math.

Will the govt stop allowing private universities to take advantage of the system and regulate them. Maybe. But as for those people who can't understand what they are doing I don't feel sorry for them. 

You control your future, what you do, how you spend money. If you can't sustain yourself with out govt subsidies you're doing everything wrong.

This is about the most complainy pants post I've seen on here in a long time.

I'm a millenial I graduated with no debt.  Thanks to working on the summers and scholarships. I got a degree with great pay in a STEM field.

This post doesn't even deserve a response.

But get off your ass and set your own path and stop worrying about crap the govt does.

Wow...that was really mean but I get your disgust since you assumed I meant that you need to be paying for my friends' student loan debt.   

For the record as I mentioned above my debt is going to be paid off.  But the story I posted above is the reality of a huge majority of the people around me in my age group.  Yes there are others who had fully funded or partially funded educations and are doing/will do fine.  But for those who clearly aren't/will not be I wonder what can be done and what is the answer.

But you are right that many people do not understand what they are doing by taking out huge student loans or else they wouldn't be doing it.  However, for many people who thought that taking on the debt would lead to better jobs and higher salaries, it has not.  The rationale in taking on the debt was based on the logic that it would lead to an improvement in their quality of life and more independence down the road...not the opposite. 

So you're not in the situation yourself and/or perhaps cannot relate to people who are, does not negate the fact that this reality will impact more than the people who aren't in this specific situation.

The examples you mentioned aren't in that bad of shape if they lived well below their means. A person can live off 25k a year. Many on this forum do.

The post you quoted isn't "mean" it's true. "Reform" usually comes in the way of raising taxes for others, or like you said, raising the social security age. Why should others suffer due to the poor decisions of some?

FYI I finished a tech school at 21 with 40k in student loan debt. I didn't even have a degree, just a certificate. I paid off my student loan debt by the time I was 26, and could have done better.

For people with good advanced degrees, like an MBA, getting more education won't help. If they're unemployed or underemployed the problem is more likely them, not their education.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #6 on: January 30, 2016, 01:04:49 PM »
I know too many people drowning in student loan debt...Just 2 examples are below:


-A 37 year old friend of mine whose married with a 10 year old and a 3 month old, about to go through a divorce, with $160K in private student loans (has a BA and a MBA, both from top tier schools making about $65k but just got laid off)


-A single childless 36 year old relative of mine with $85k in private loan debt from an MBA with an online university currently working in property management (same industry as prior to receiving their MBA 5 years ago) making about $50K


I guess I'm a bit of a worrier, but I'm in the same age range and my loans aren't paid off yet (but will be soon God willing).  However, I know a good deal of people going into their 40s with tens and tens of thousands of dollars in student loan debt alone (some of which who are about to take on more student loan debt to get another degree in the HOPES of increasing their market value to earn more income to pay off the debt!). What this means is they can't save anything for retirement before their 40s because they're just starting to pay on student loans in their 30s and 40s. 

I know I'm a bit of a worrier.  But I fear increases in social security payout age, severely underfunded retirement accounts and increased healthcare costs for my generation could be such a drastically different quality of life for me and my friends/peers/relatives around my age than what I witnessed my grandparents live growing up in their house that dare I say the future for Gen Y specifically just seems a little bleak??

The part I bolded is just people being stupid.

I'm conflicted on student loans because I believe education should be free/cheap as possible and the system is designed to prey on young people with no financial clue. But how do people take out over $100k of loans and they're majoring in Art or something equally low paying... come on now.

The part I italicized is poor money management for most people. Aren't most people doing IBR? But, most people would rather get a car, go out, buy clothes, eat dinner out every day, etc. than put 10% of their income towards retirement. Of course there are exceptions to this and you have people who are legitimately struggling. Not trying to discount the experiences or reality for them.

Also, aren't loans forgiven after 20/25 years? Then comes the issue of paying taxes on the remaining amount, but you would not have $200k of loans hanging over your head. Just $200k worth of income to pay taxes on... ha.

Well I will admit the bolded part is definitely not "usually" the answer. But I did see it work for one person who decided to do the MD route later in life and actually was able to start paying down the huge amounts of debt quickly despite the high volume of debt and working in a mustachian-unfriendly career. 

I didn't know they were forgiven after 20 years...public and private student loans?  Are you sure about that? 

lbmustache

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Re: Will student loan reform come for Gen Y?
« Reply #7 on: January 30, 2016, 01:07:33 PM »
I didn't know they were forgiven after 20 years...public and private student loans?  Are you sure about that?

Public loans, and yes. http://www.studentdebtrelief.us/forgiveness/obama-student-loan-forgiveness/

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #8 on: January 30, 2016, 01:20:11 PM »
I didn't know they were forgiven after 20 years...public and private student loans?  Are you sure about that?

Public loans, and yes. http://www.studentdebtrelief.us/forgiveness/obama-student-loan-forgiveness/

Ah, ok that makes sense.  I think I heard that before but was curious if that was for private loans as I would have been shocked to hear Sallie Mae was now forgiving debt.  I've been out of college for a long time now and don't know the current rates for public versus private student loans at the moment but I know the private ones are more expensive.  Not just from an interest rate point of view but for many people I know that have advanced degrees they had to use private loans to fund them thus a higher amount of money taken out from the private lenders.

Fuzz

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Re: Will student loan reform come for Gen Y?
« Reply #9 on: January 30, 2016, 03:06:09 PM »
As a question of US electoral politics, no I don't see student loan reform happening. Students, young people, and the young people who are most likely to be in debt, don't tend to vote. Without votes, there isn't much of a constituency for this.

Yes, we get some Democratic throwaway lines about reforming student education and public sector employee debt forgiveness, but I'd put that at like 7th or 10th on the Democratic party priority list. Things that are that low on the list don't get done. Look at Obama. In 2010 with a historic majority in Congress and a solid majority in the Senate, he could pass whatever legislation he wanted. He got one big legislative thing done: Obamacare. That's it.

D's have been working on healthcare since the 1930s. So maybe in 80 years, they'll get around to student loan debt. I don't see how you get it done with an executive order, but I could see the next Democratic president trying to push the boundaries there.

Also, homeboy in the STEM field: I know it's fun to be blunt on this forum, but you need another English class to learn the difference between being blunt and being mean.

alsoknownasDean

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Re: Will student loan reform come for Gen Y?
« Reply #10 on: January 30, 2016, 03:25:10 PM »
Chances are it'll just end up that fewer people end up getting a degree, or they leave the country after graduating.

Either outcome is poor for the US longer-term.

Murse

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Re: Will student loan reform come for Gen Y?
« Reply #11 on: January 30, 2016, 04:23:48 PM »
My personal opinion is it will change for future generations (free tuition) within the next 20 years, but those who have student loans at best will get their interest rate reduced.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #12 on: January 30, 2016, 06:39:34 PM »
They borrowed the money I'm not paying their debt bc they don't understand math.

Will the govt stop allowing private universities to take advantage of the system and regulate them. Maybe. But as for those people who can't understand what they are doing I don't feel sorry for them. 

You control your future, what you do, how you spend money. If you can't sustain yourself with out govt subsidies you're doing everything wrong.

This is about the most complainy pants post I've seen on here in a long time.

I'm a millenial I graduated with no debt.  Thanks to working on the summers and scholarships. I got a degree with great pay in a STEM field.

This post doesn't even deserve a response.

But get off your ass and set your own path and stop worrying about crap the govt does.

Wow...that was really mean but I get your disgust since you assumed I meant that you need to be paying for my friends' student loan debt.   

For the record as I mentioned above my debt is going to be paid off.  But the story I posted above is the reality of a huge majority of the people around me in my age group.  Yes there are others who had fully funded or partially funded educations and are doing/will do fine.  But for those who clearly aren't/will not be I wonder what can be done and what is the answer.

But you are right that many people do not understand what they are doing by taking out huge student loans or else they wouldn't be doing it.  However, for many people who thought that taking on the debt would lead to better jobs and higher salaries, it has not.  The rationale in taking on the debt was based on the logic that it would lead to an improvement in their quality of life and more independence down the road...not the opposite. 

So you're not in the situation yourself and/or perhaps cannot relate to people who are, does not negate the fact that this reality will impact more than the people who aren't in this specific situation.

The examples you mentioned aren't in that bad of shape if they lived well below their means. A person can live off 25k a year. Many on this forum do.

The post you quoted isn't "mean" it's true. "Reform" usually comes in the way of raising taxes for others, or like you said, raising the social security age. Why should others suffer due to the poor decisions of some?

FYI I finished a tech school at 21 with 40k in student loan debt. I didn't even have a degree, just a certificate. I paid off my student loan debt by the time I was 26, and could have done better.

For people with good advanced degrees, like an MBA, getting more education won't help. If they're unemployed or underemployed the problem is more likely them, not their education.

The way it was written part of it was matter of fact and clearly much of it was emotional and angry.  There is a way to express yourself without being overly emotional (and this is coming from a woman).  Coming from that person's perspective I shouldn't be worried about what the government does but for me I'm totally concerned and engaged in what decisions they do or do not make that might have an impact on my future quality of living...including this issue of insurmountable student loan debt.

Anyways I digress....what were you making between the ages of 21-26?  Did you live solo?  Have roommates? 

Maybe it's not as bad as it seems but in speaking to the friend with 160k in debt for instance...she says she's paying ~800 a month and only ~100 a month goes towards principal.  Now being laid off (which isn't too uncommon) she is considering taking the first job she can get even if it means a paycut lower than the $65K.  I guess in situations like that I feel like it 'is' the student loan debt that's the biggest problem because in this scenario even if she doubled up on payments her budget wouldn't allow her to start contributing hardly anything towards retirement for several years and she's already 37.  So to me the problem is not just the student loan debt amount alone but also the many years of lost retirement contributions.
« Last Edit: January 30, 2016, 06:53:51 PM by EconDiva »

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #13 on: January 30, 2016, 06:46:34 PM »
Chances are it'll just end up that fewer people end up getting a degree, or they leave the country after graduating.

Either outcome is poor for the US longer-term.

Well, actually, that is kinda what one of my friends was mentioning to me the other day.  He told me that when he travels internationally to certain places he's scoping out places to retire.  Which may not seem too out of the blue but I asked him why and his explanation was basically that he's spent so many years paying down student loans that his retirement will likely be too underfunded to be able to live decently here so to make it easier he'd rather just move out of the US (not too far away, but somewhere his retirement funds will go further).

Yeah I know people have been retiring abroad to cheaper countries forever...but my point is I feel like his whole decision to do this was basically because of the student loans.

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #14 on: January 30, 2016, 06:49:24 PM »
Why free school. You don't need to go to college to be a tradesmen. We're runinng out of these.  The whole "college dream" and the fact that you HAVE to go to college to be successful. No you don't and your dumb ass liberal arts degree that pays Jack shit should pay Jack shit.

I'm a millenial I'm personally disgusted by the entire premise of this post.

Money can be made in many ways. You have to have a will to do what it takes to get ahead and not rely on others for support

You have to be competent enough to understand money.

You want reform instead of art class in public school or drama. Teach personal finance. That's reform with a difference. Just giving the entitled kids of my generation, who all got a trophy even if they finished dead last, reform on idiotic student loans bc the people of America don't understand money is assinign.

mm1970

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Re: Will student loan reform come for Gen Y?
« Reply #15 on: January 30, 2016, 06:49:46 PM »
Honestly, if I ever FIRE, I swear I'm going to go into business (in other words, donate my time) teaching kids and parents how to avoid this mess.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #16 on: January 30, 2016, 06:59:04 PM »
Why free school. You don't need to go to college to be a tradesmen. We're runinng out of these.  The whole "college dream" and the fact that you HAVE to go to college to be successful. No you don't and your dumb ass liberal arts degree that pays Jack shit should pay Jack shit.

I'm a millenial I'm personally disgusted by the entire premise of this post.

Money can be made in many ways. You have to have a will to do what it takes to get ahead and not rely on others for support

You have to be competent enough to understand money.

You want reform instead of art class in public school or drama. Teach personal finance. That's reform with a difference. Just giving the entitled kids of my generation, who all got a trophy even if they finished dead last, reform on idiotic student loans bc the people of America don't understand money is assinign.

Well yeah, teaching personal finance would be a GREAT idea and a GREAT start to solving part of the situation.  Then there wouldn't be as many people "falling for the hype" to begin with.  Thank you for answering part of what I was asking.  All that other anger in your post I simply do not/will not understand and am quite frankly confused by what it's so hard for you to make a point without it.  Maybe you've experienced a lot of people trying to take advantage of you in your past or something.  But the people I'm talking about are good people who took out debt to get good paying jobs but the jobs aren't paying enough to pay off the debt AND pay into retirement.  I don't know anyone sitting on $100K of debt sitting at home waiting on people to bail them out so to speak.
« Last Edit: January 30, 2016, 07:01:15 PM by EconDiva »

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #17 on: January 30, 2016, 07:04:40 PM »
Bc you're complaining about something that's as simple as money management. You act like these people are screwed by their loans when they aren't they are screwed by their life choices. And fuck it if I'm gonna pay for those who wasted their money and "lived for the moment" only to turn around and ask those who saved to help them.  It's the grass hopper and the ant. If the millenials you see in your life wanna be grass hoppers that's fine. Best you can do is try to get thru to them.

If you can't who the hell cares. They will work til they're 100 bc they can't afford not to.

alsoknownasDean

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Re: Will student loan reform come for Gen Y?
« Reply #18 on: January 30, 2016, 07:11:51 PM »
Why free school. You don't need to go to college to be a tradesmen. We're runinng out of these.

I don't know what it's like in the US, but skilled tradies often earn pretty good money here in Australia. Considering they'd start earning earlier and have no student loan debt, a trade might be a better move for someone who wants to retire early.

The other option (for some fields) is doing a diploma course, working for a couple of years and then going back to finish the degree later. At least then you have a bit of exposure to the field and if you don't like it, less is lost.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #19 on: January 30, 2016, 07:14:32 PM »
Honestly, if I ever FIRE, I swear I'm going to go into business (in other words, donate my time) teaching kids and parents how to avoid this mess.

Why not do this?  I think it's a great idea.

And it reminds me of something.  When I was in high school, my grandparents (who I was raised by) hired this local older woman who sold herself as a "student advisor" of sorts in our small town.  For a small fee, she would assist high school students in choosing a career, going to school, etc.  Well anyways, my grandparents had me pair up with her (many families in my area were hiring her); the woman advised me to attend the school I ended up graduating from.  Now, in looking back, I should have chosen a smaller, local school from the expenses perspective.  The school she chose for me was private, out of state, and EXPENSIVE requiring way more in student loans than I would have acquired if I had gone to a public state school for instance.  But after talking my 17 year old self into it, and going with me to tour the school I fell in love with it and never looked back.

Now, in my grandparents' eyes I needed that person to tell me how to handle choosing a school as they were not sure how to direct me and were probably just happy I chose to go.  All my teenage years I was told by them I'd be a waste if I didn't go to college based on my success in junior/high school, etc. and based on all of the back breaking work they had to do to make ends meet without college degrees.  But at the end of the day although *I*, at 17 (because at 17 we all made perfect financial decisions in life) chose to take on way more debt by going to the school the advisor chose for me, I know I was HEAVILY influenced by her.  Had I had someone working alongside me like you, I probably would have came out with my degree and ZERO DEBT.  Thank God I had enough sense at least to never live on campus and paid rent by working in school, as room and board would have DOUBLED my student loan debt. 

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #20 on: January 30, 2016, 07:17:09 PM »
The whole going to school bc you "think" it will get you higher pay doesn't even hold water

You can go online and research what careers are in need and what those careers pay then you can pick one that you think is of you aptitude or push yourself to one outside your aptitude. If there isn't one there that involves something you can do then look to the trades. If you can't do that. Then survival of the fitest.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #21 on: January 30, 2016, 07:21:30 PM »
Bc you're complaining about something that's as simple as money management. You act like these people are screwed by their loans when they aren't they are screwed by their life choices. And fuck it if I'm gonna pay for those who wasted their money and "lived for the moment" only to turn around and ask those who saved to help them.  It's the grass hopper and the ant. If the millenials you see in your life wanna be grass hoppers that's fine. Best you can do is try to get thru to them.

If you can't who the hell cares. They will work til they're 100 bc they can't afford not to.

That's fine; it's your opinion and you're entitled to it of course.

Obviously what you see as me complaining I see as me being concerned.  And I justify my concern based on the thought that what's going on right now will probably impact me in some way shape or form in the future.  Hence the concern (or in your words, "complaints").

And also maybe what you see as simple I see as not that simple; if it were there wouldn't be a problem.  And I care.  If I live in a country where on average people work til 100 (because of student loan debt, not because of medical advances) when in the same country on average people used to work til 60 then that's probably not going to be a good thing for everyone regardless of if I'm one of those 100-year-old workers or not.

randymarsh

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Re: Will student loan reform come for Gen Y?
« Reply #22 on: January 30, 2016, 07:21:42 PM »
I think we'll continue to see various types of "forgiveness" programs. Instead of fixing the situation, the government will just figure out ways to make payments low enough so they don't default. That's what these programs are. Default avoidance schemes.

I think we'll see a further widening of inequality. Those who graduate with little or no debt will be able to build wealth much quicker.

I think I'll be OK overall with my debt load, even though it's 65K, but there are consequences. It's very frustrating not being able to put 20 or 30% in my 401k or save a large downpayment. This is my personal issue, but I find it harder to make larger student loan payments compared to saving or investing.

mozar

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Re: Will student loan reform come for Gen Y?
« Reply #23 on: January 30, 2016, 07:26:49 PM »
To answer your question: no. It used to be that you couldn't get into that much debt, but now loan sharks have taken it to a whole new level.
The real problem is degree inflation https://www.washingtonpost.com/opinions/catherine-rampell-the-college-degree-has-become-the-new-high-school-degree/2014/09/08/e935b68c-378a-11e4-8601-97ba88884ffd_story.html

Sometimes as a society we just get things wrong. Like states de-funding their universities.

Hey boarder42: did you know that during the Great Depression people blamed it on other people's poor money management? Yeah, in hindsight we realized it wasn't. But the blame the victim mentality rears its ugly head during every crises. Fortunately your opinions don't matter, and won't change anything.

It's like polio. It's sad that there was so much needless suffering until we figured out how to eradicate it. But it is what it is.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #24 on: January 30, 2016, 07:28:00 PM »
I think we'll continue to see various types of "forgiveness" programs. Instead of fixing the situation, the government will just figure out ways to make payments low enough so they don't default. That's what these programs are. Default avoidance schemes.

I think we'll see a further widening of inequality. Those who graduate with little or no debt will be able to build wealth much quicker.

I think I'll be OK overall with my debt load, even though it's 65K, but there are consequences. It's very frustrating not being able to put 20 or 30% in my 401k or save a large downpayment. This is my personal issue, but I find it harder to make larger student loan payments compared to saving or investing.

And this is exactly my concern.  I hope the best for you but just the fact you're on MMM means I'm sure you'll be fine ;)

However, my 18-year-old self just didn't imagine I'd be having this conversation with half of my friends at the age of 36...where many people I know are approaching 40 but have either (a) not starting funding retirement, or (b) their retirement funds are severely underfunded.  Because of student loan debt.  I mean, there are people on this forum retiring at 40 I'm sure.  It's not like most of these people have pensions to fall back on like my grandparents who raised me had.

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #25 on: January 30, 2016, 07:33:10 PM »
Hey boarder42: did you know that during the Great Depression people blamed it on other people's poor money management? Yeah, in hindsight we realized it wasn't. But the blame the victim mentality rears its ugly head during every crises.

This is the EXACT thought I had reading this person's posts. 

By their logic I am guessing we should also do away with bankruptcy for individuals and businesses?

Anyways I digress.

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #26 on: January 30, 2016, 07:41:21 PM »
Bc you're complaining about something that's as simple as money management. You act like these people are screwed by their loans when they aren't they are screwed by their life choices. And fuck it if I'm gonna pay for those who wasted their money and "lived for the moment" only to turn around and ask those who saved to help them.  It's the grass hopper and the ant. If the millenials you see in your life wanna be grass hoppers that's fine. Best you can do is try to get thru to them.

If you can't who the hell cares. They will work til they're 100 bc they can't afford not to.

That's fine; it's your opinion and you're entitled to it of course.

Obviously what you see as me complaining I see as me being concerned.  And I justify my concern based on the thought that what's going on right now will probably impact me in some way shape or form in the future.  Hence the concern (or in your words, "complaints").

And also maybe what you see as simple I see as not that simple; if it were there wouldn't be a problem.  And I care.  If I live in a country where on average people work til 100 (because of student loan debt, not because of medical advances) when in the same country on average people used to work til 60 then that's probably not going to be a good thing for everyone regardless of if I'm one of those 100-year-old workers or not.

Everyone used to work til they died retirement is a newer thing as far as life goes over time. Its not a right its a privilege.

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #27 on: January 30, 2016, 07:45:12 PM »
The premise of the post ie title is entirely written incorrectly.

Will student loan reform come would be an acceptable question.

But to isolate it to a generation that is almost complete thru their college careers makes no sense. Your post is basically saying some one bail out gen y.

And that I take offense to.

mozar

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Re: Will student loan reform come for Gen Y?
« Reply #28 on: January 30, 2016, 09:07:01 PM »
It used to be that, if you lived past working age, you went to live with your kids. Baby Boomers are the ones who are screwed because they have less time to adjust to the new reality. And by screwed I mean they will have to adjust to a lower quality of life than they were expecting.

But I do think that Gen Y should get a bail out. I think everyone should get a basic minimum income from the government with free college. But that's because I'm a bleeding heart liberal who thinks that the purpose of civilization is to make everyone's live easier, not harder.

LeRainDrop

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Re: Will student loan reform come for Gen Y?
« Reply #29 on: January 30, 2016, 09:08:05 PM »
If I live in a country where on average people work til 100 (because of student loan debt, not because of medical advances) when in the same country on average people used to work til 60 then that's probably not going to be a good thing for everyone regardless of if I'm one of those 100-year-old workers or not.

Wait, what country do you live in where the average person works till 100 years old?  Or are you thinking that in a single generation, the life expectancy of Americans will jump from 78 years to beyond 100 years, and the average person will still be working at 100?  I don't think that's even possible.  Anyway...

I do feel bad for the people who are generally making good choices, sacrificing the non-necessities, and working hard to raise their families, yet continue to suffer oppressive loans on which they can barely make a dent in the principal, let alone save for retirement.  That must be a very emotionally draining experience to live.  That said, I tend to think most people get to the place of being smothered by the loans as a result of their own choices compounded.  Some of the worst are the ones who go back to school for more debt just to delay beginning repayment.

I am younger than both of the people EconDiva cited in her original post, and I entered the workforce with around $120k in student loans.  I did my best to be frugal and make hard choices not to spend my money on wants.  As a result, I fully repaid 100% of my loans all on my own and I am well-poised for early retirement down the line.  So, for those of us who really buckled down and fulfilled our financial responsibilities vis-a-vis student loans, why is it fair to us to then have to bail out the other people who did not save/spend as prudently?  Why should they get a special deal on their obligations, when we did not?
« Last Edit: January 30, 2016, 09:13:40 PM by LeRainDrop »

EconDiva

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Re: Will student loan reform come for Gen Y?
« Reply #30 on: January 30, 2016, 09:12:45 PM »
If I live in a country where on average people work til 100 (because of student loan debt, not because of medical advances) when in the same country on average people used to work til 60 then that's probably not going to be a good thing for everyone regardless of if I'm one of those 100-year-old workers or not.

Wait, what country do you live in where the average person works till 100 years old?  Or are you thinking that in a single generation, the life expectancy of Americans will jump from 78 years to beyond 100 years, and the average person will still be working at 100?  I don't think that's even possible.  Anyway...

You have to read the post that I quoted/was responding to for reference.
« Last Edit: January 30, 2016, 09:15:44 PM by EconDiva »

LeRainDrop

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Re: Will student loan reform come for Gen Y?
« Reply #31 on: January 30, 2016, 09:17:20 PM »
If I live in a country where on average people work til 100 (because of student loan debt, not because of medical advances) when in the same country on average people used to work til 60 then that's probably not going to be a good thing for everyone regardless of if I'm one of those 100-year-old workers or not.

Wait, what country do you live in where the average person works till 100 years old?  Or are you thinking that in a single generation, the life expectancy of Americans will jump from 78 years to beyond 100 years, and the average person will still be working at 100?  I don't think that's even possible.  Anyway...

You have to read the post that I quoted/was responding to for reference.

Ohhhh, I missed that line.  Thanks.

mozar

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Re: Will student loan reform come for Gen Y?
« Reply #32 on: January 30, 2016, 09:22:22 PM »
Quote
I am younger than both of the people EconDiva cited in her original post, and I entered the workforce with around $120k in student loans.  I did my best to be frugal and make hard choices not to spend my money on wants.  As a result, I fully repaid 100% of my loans all on my own and I am well-poised for early retirement down the line.  So, for those of us who really buckled down and fulfilled our financial responsibilities vis-a-vis student loans, why is it fair to us to then have to bail out the other people who did not save/spend as prudently?  Why should they get a special deal on their obligations, when we did not?

« Last Edit: May 10, 2018, 01:31:40 PM by mozar »

LeRainDrop

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Re: Will student loan reform come for Gen Y?
« Reply #33 on: January 30, 2016, 09:44:48 PM »
LeRainDrop: you take for granted all the information you had and your ability to think through things. When you are poor you have something called the "poverty mindset" where it's hard to think about the big picture. Even though I paid off my loans, I think everyone else's should be forgiven. I think there is about a 2% chance of people figuring out everything I figured out. It took a shitload of therapy, reading, and a ton of privilege to get where I am today. It's hard for you to relate to people who make "poor" choices. These people are making the best choices they know to make, based on the information they have.

Oh, no, I don't take that for granted at all.  I know that I grew up with a lot of privilege and that has worked to my benefit in many, many ways.  That's part of why I said that I strongly empathize with the many people who are making the best choices they know how to, yet continue to be smothered by the weight of their loans, let alone save for retirement.  I fully acknowledge that a lot of people entered into agreements for student loans coming from a very disadvantaged place, even poverty, where college was pushed as the key to success and somehow the money would magically work itself out.  That is an unfair burden to expect many of them to carry.

But many of the people who find themselves in the "student loan crisis" do not come from poverty and are not living in poverty.  I have plenty of peers who came from the same privilege -- e.g., better pre-college education, better access to technology/internet, family not stretched so thin -- who still made choices that led to over-sized loans that they are not making much progress on, and yet they continue to find all sorts of room for expensive frivolities in their budgets.  So, how do you find a fair middle ground?  It'd be easier for me to agree that we should help those in poverty, as we already do, but why should we help the people who were given all sorts of privileges, and the smarts to make good choices, but they simply decide to make the more fun choices, to spend on wants rather than save?  As a policy matter, how do you find a fair middle ground?  This is a struggle, and I certainly don't pretend to have any answers.

P.S. Props for linking to the "degree inflation" article by my friend's little sis.  I agree it's a real problem.
« Last Edit: January 30, 2016, 10:08:12 PM by LeRainDrop »

ender

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Re: Will student loan reform come for Gen Y?
« Reply #34 on: January 31, 2016, 06:49:44 AM »
I hope so.

Right now, many lenders profit at the expense of 17/18 year olds who often have no clue what they are doing.

The people who I would say are to "blame" for problems with student loans:

  • Parents - seriously, #1 problem for most people with loans is their parents are absent/ignorant/etc
  • Colleges - school is marketed in a way which basically suggests "if you don't do a college degree you will be a life failure"
[li]17/18 year olds - it's possible for them to make wise decisions, but for most the deck is stacked against them[/li][/list]

Frankly speaking, I don't like how many people with significant student loan debt that because of their circumstances basically had minimal or no choice in their decision at an early age that affects them for the rest of their lives.

To not expect some reform when institutions are profiting at the expense of kids who do not have enough education/experience to make informed decisions seems quite short sighted.

justajane

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Re: Will student loan reform come for Gen Y?
« Reply #35 on: January 31, 2016, 07:00:58 AM »
No you don't and your dumb ass liberal arts degree that pays Jack shit should pay Jack shit.

It's hard to take much of what you are saying seriously when you make statements like this. In fact, I would argue that much of what you write, which lacks clarity and displays a tunnel-visioned view of what is causing high student loan debt (To paraphrase: "It's them dumb underwater basket weavers who didn't major in a STEM field!"), underscores the ongoing importance of the liberal arts and the humanities.   

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #36 on: January 31, 2016, 07:27:06 AM »
Correct.

Avg cost of in state 4 yr degree is 40k currently. Then you add on room and board of call it 8k a year and your around 70k. And that's being generous.

This amount of debt isn't outrageous for any competent person if they chose a field in which people are paying you money to do a job. Avg salary for 4 year degree 45k.

So you have hair on fire debt and a great starting salary at 45k. You should be living off ramen and oats and paying it down. But let's just assume  you're putting 50% of your income towards them and living off 23k a year. Very doable. Your loans would be gone in 4 years max.

Now the flip side you decided to get a masters or go to a private school and obtain a degree that pays 45k still. Well that's your choice and society shouldn't support your bad decision.  Or say you racked up that debt exploring and finding yourself and found out you're a lazy bum who isn't cut out for higher learning.

I mean someone show me a point where society should be accountable for someone's decisions of this nature. You made the choice you racked up the debt.

Everyone doesn't need to go to college. Everyone isn't cut out for it. The reason prices keep rising is bc demand is going up. It's simple supply and demand.  We currently have more people obtaining higher education in either a field that doesn't have a demand for more educated people in and we have people who should becoming tradesmen going to college and then realizing that. 

College education is a privilege not a right.

Guess what avg salary for an apprentice is 30k per year and that doesn't count overtime. Those guys usually pull in 50-60k. Avg time to become a journeyman 2-6 years. Guess what let's take the avg of that 4 years. That's the same as a 4 year degree. Avg journeyman makes 50k per year after it most pull in 70-80k. So they get paid to learn their trade and come out of their "degree" program making more than the 4 year college grad.

You signed a contract to rack up your debt society didn't.

The only reform that should happen would be to teach personal finance and get rid of what online schools can do to take advantage of the system.

Any reform of debt already acrued that impacts other govt programs already in place is unacceptable.

Paul der Krake

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Re: Will student loan reform come for Gen Y?
« Reply #37 on: January 31, 2016, 07:46:39 AM »
Chances are it'll just end up that fewer people end up getting a degree, or they leave the country after graduating.

Either outcome is poor for the US longer-term.
In my experience, people who complain the most about their student debt are not the kind of people with the chops to pack up and move to a different country, even one where they speak the same language. Immigrating anywhere worth immigrating to takes a little more resourcefulness than most are willing to dedicate to the matter. It is a lot easier to bitch about being stuck into a shitty system and doing nothing about it.

The first world countries in Western Europe are always a crowd favorite (free tuition! free healthcare! neither of which is exactly true, btw), but they don't take too kindly on broke Americans showing up uninvited, and they certainly won't hold their hand doing so.

mozar

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Re: Will student loan reform come for Gen Y?
« Reply #38 on: January 31, 2016, 10:04:05 AM »
Quote
So, how do you find a fair middle ground?  It'd be easier for me to agree that we should help those in poverty, as we already do, but why should we help the people who were given all sorts of privileges, and the smarts to make good choices, but they simply decide to make the more fun choices, to spend on wants rather than save?

Those people still have the poverty mindset. You don't have to live in poverty to have it. And you can't know if someone else is smart/privileged. We can only guess at what their life was like. Take the marshmallow test. Kids who pass the test (wait for the second marshmallow) are shown to have better outcomes in life, because they understand delayed gratification. So you might assume that the kids who ate the marshmallow are stupid somehow. But the reason they eat the marshmallow is because they don't trust adults. So they made a rational choice by eating the marshmallow.

There is no such thing as "fairness." That's something that adults tell children to make them shut up. We as a society can decide to take care of each other or not.

Quote
This amount of debt isn't outrageous for any competent person if they chose a field in which people are paying you money to do a job. Avg salary for 4 year degree 45k.
What is a competent person? Someone who has the exact information about how society works than you do? I love my fellow humans, but you are making a lot of assumptions about their abilities.

GrOW

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Re: Will student loan reform come for Gen Y?
« Reply #39 on: January 31, 2016, 10:36:39 AM »
Reform? Boy that term can mean alot of different things to alot of different people.

Unsecured loans guaranteed by people without a job but the hopes of getting one. And our government says the rates should be lower. Really?

Loans are not based on degree and future earning potential. Borrowers line up to get them without considering their future income.

Starting your career with a negative net worth and likely little financial education on what that really means. A bad recipe for sure.

Too little focus on the responsibility of the borrowers and their parents/advisers.

Yep. Lots of opportunities for reform.

*Please note that these are broad brushstroke thoughts and I am certain that many people, visitors of this forum or not, have made hay while getting large student loans.

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #40 on: January 31, 2016, 11:52:39 AM »
Quote
So, how do you find a fair middle ground?  It'd be easier for me to agree that we should help those in poverty, as we already do, but why should we help the people who were given all sorts of privileges, and the smarts to make good choices, but they simply decide to make the more fun choices, to spend on wants rather than save?

Those people still have the poverty mindset. You don't have to live in poverty to have it. And you can't know if someone else is smart/privileged. We can only guess at what their life was like. Take the marshmallow test. Kids who pass the test (wait for the second marshmallow) are shown to have better outcomes in life, because they understand delayed gratification. So you might assume that the kids who ate the marshmallow are stupid somehow. But the reason they eat the marshmallow is because they don't trust adults. So they made a rational choice by eating the marshmallow.

There is no such thing as "fairness." That's something that adults tell children to make them shut up. We as a society can decide to take care of each other or not.

Quote
This amount of debt isn't outrageous for any competent person if they chose a field in which people are paying you money to do a job. Avg salary for 4 year degree 45k.
What is a competent person? Someone who has the exact information about how society works than you do? I love my fellow humans, but you are making a lot of assumptions about their abilities.

If we follow your path we will surely devolve. Survival of the fittest.  You work to you ability or have friends or family that choose to support your lack of ability. You spend to your ability. And save to your ability. If I decided I wanted to quit my six figure job to pursue my internal passionnof sitting on my ass I would have to live with that choice not expect the coworkers I left to fund my choice.

That's what you're saying at the heart. We should take care of everyone regardless of the choice they made. Sweet. I'll let you act on your bleeding heart liberal self. I'll draw up a contract and I'll quit my job and you can support me for the rest of your life to the standard of living that I'm entitled to as another human. I'll define what that standard is for you. Since I as a human am entitled to it.

LeRainDrop

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Re: Will student loan reform come for Gen Y?
« Reply #41 on: January 31, 2016, 11:57:29 AM »
Quote
So, how do you find a fair middle ground?  It'd be easier for me to agree that we should help those in poverty, as we already do, but why should we help the people who were given all sorts of privileges, and the smarts to make good choices, but they simply decide to make the more fun choices, to spend on wants rather than save?

Those people still have the poverty mindset. You don't have to live in poverty to have it. And you can't know if someone else is smart/privileged. We can only guess at what their life was like. . . . There is no such thing as "fairness." That's something that adults tell children to make them shut up. We as a society can decide to take care of each other or not.

For some people, it is true that they have the poverty mindset, despite having never lived in poverty.  But for many others, I disagree.  Many live in the "affluenza" or entitled mindset -- they come from well/better-off family, and naturally feel their parents' achievements should be the same starting point for them coming out of college.  There is also a middle ground where the people are smart enough, but they've allowed themselves to follow the herd insofar as vacations, consumerism, etc.

You see it all the time among siblings from the same family where the children all have similar privileges, intellectual abilities, and guidance from parents, yet the way they treat college and come out of it can be very different.  Take my family as an example -- three kids with great privileges.  My first brother had all the same as my second brother and I did -- parents who were supportive of him in every way, high intelligence scores, great schooling, etc. -- yet he decided to skip many classes, get involved in partying/drugs, spend all of the money he ever earned, quit whatever jobs he managed to get, switch colleges multiple times, and not finish his very last college paper, thus not actually earning the damn degree.  Do you want to pay back his student loans for him?

mozar

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Re: Will student loan reform come for Gen Y?
« Reply #42 on: January 31, 2016, 12:49:25 PM »
The problem is that you both (LeRainDrop and boarder42) think that making college free, or forgiving loans hurts individuals. I didn't say that I personally should be paying anybody's loans back. If the government chooses to forgive loans that doesn't affect me. Neither of you can see the forest for the trees. As a society if we choose to make grade school free, we can do the same for college.

Quote
Do you want to pay back his student loans for him?

I wouldn't want to personally, but I do think they should be forgiven. Maybe he has un-diagnosed depression? We can decide as a society that people shouldn't be allowed to get into so much trouble if they don't make the "correct" choice. It's a slippery slope to say who deserves what on a case by case basis.

Alright you guys can have the last word. Say something crazy about humans devolving or some such.

GrOW

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Re: Will student loan reform come for Gen Y?
« Reply #43 on: January 31, 2016, 12:55:37 PM »
Grade school free? For the lowest income families, maybe. To everyone else, hardly. Property taxes, local taxes, fundraisers, helping to stock the teacher's supplies, school functions, and on and on. Some would add fees for after school activities, tutoring to help a child stuck in a below average school, and parking fees.

Cheaper than private school, you bet. But far from free.

seattlecyclone

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Re: Will student loan reform come for Gen Y?
« Reply #44 on: January 31, 2016, 01:09:51 PM »
I would like to see these loans become dischargeable in bankruptcy. If someone has so much debt and so little income after their education that they're willing to go to court and ruin their credit for seven years to clear it away, let them. Maybe the banks would then have a real incentive to take a look at a student's earning potential and existing debt load before giving them more loans.

I don't think it's right to just "forgive" the debt though. These are legal adults who should have known what they were getting into. Sometimes the best lessons are the ones you learn outside of the classroom.

Paul der Krake

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Re: Will student loan reform come for Gen Y?
« Reply #45 on: January 31, 2016, 01:39:04 PM »
The problem is that you both (LeRainDrop and boarder42) think that making college free, or forgiving loans hurts individuals.
Forgiving loans too liberally undermines the societal expectation that entering into contracts is a binding agreement. It's about the signals you send.

Capsu78

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Re: Will student loan reform come for Gen Y?
« Reply #46 on: January 31, 2016, 02:12:52 PM »
No you don't and your dumb ass liberal arts degree that pays Jack shit should pay Jack shit.

It's hard to take much of what you are saying seriously when you make statements like this. In fact, I would argue that much of what you write, which lacks clarity and displays a tunnel-visioned view of what is causing high student loan debt (To paraphrase: "It's them dumb underwater basket weavers who didn't major in a STEM field!"), underscores the ongoing importance of the liberal arts and the humanities.

As someone with a BA from an LA program, I used to agree you Jane...but looking at the syllabus for most LA classes today doesn't resemble what I was taught in the least... Dare I say it's been hijacked by grey pony tailed activist cry bullies not preparing undergrads for real world skills that I wouldn't pay an employee "jack shit" for.   

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #47 on: January 31, 2016, 02:33:49 PM »
The problem is that you both (LeRainDrop and boarder42) think that making college free, or forgiving loans hurts individuals. I didn't say that I personally should be paying anybody's loans back. If the government chooses to forgive loans that doesn't affect me. Neither of you can see the forest for the trees. As a society if we choose to make grade school free, we can do the same for college.

Quote
Do you want to pay back his student loans for him?

I wouldn't want to personally, but I do think they should be forgiven. Maybe he has un-diagnosed depression? We can decide as a society that people shouldn't be allowed to get into so much trouble if they don't make the "correct" choice. It's a slippery slope to say who deserves what on a case by case basis.

Alright you guys can have the last word. Say something crazy about humans devolving or some such.

someone has to PAY for it ... its not FREE if the govt is funding it YOU are funding it thru your taxes.... how do you not understand this.  If "society" as you call it should pay for these things YOU are paying for them the govt just doesnt(shouldnt) pull money from trees and invent more of it ... come on man...

show me a situation where the GOVT funds what you speak and SOCIETY pays nothing for it ... its not possible move to france it will benefit your attitude towards your beliefs

Cathy

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Re: Will student loan reform come for Gen Y?
« Reply #48 on: January 31, 2016, 02:36:54 PM »
I would like to see these loans become dischargeable in bankruptcy.

In the United States, student loans are already dischargeable in bankruptcy, as I discussed in a past post.

boarder42

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Re: Will student loan reform come for Gen Y?
« Reply #49 on: January 31, 2016, 02:40:12 PM »
I would like to see these loans become dischargeable in bankruptcy. If someone has so much debt and so little income after their education that they're willing to go to court and ruin their credit for seven years to clear it away, let them. Maybe the banks would then have a real incentive to take a look at a student's earning potential and existing debt load before giving them more loans.

I don't think it's right to just "forgive" the debt though. These are legal adults who should have known what they were getting into. Sometimes the best lessons are the ones you learn outside of the classroom.

hell no ... law, medical,all higher education students would do this.  who they hell cares about the dumb credit hit ... the reason student loans are not forgivable is for the very reason of filing bankruptcy immediately following college.  do you not understand how easy this would be to manipulate.  yes your post was with good intentions but there is a fundamental reason they are not forgivable b/c most graduate college with debt and how easy would it be to file bankruptcy and wipe those out. 

apparently a court gave discharge to one dude for these but making it common place is beyond dumb.  thats basically making it a social system where you just can buy a house for a few years but graduate debt free.