Author Topic: Studen Loan Recipients Go On Repayment Strike  (Read 22139 times)

dude

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Studen Loan Recipients Go On Repayment Strike
« on: March 31, 2015, 06:38:55 AM »
http://finance.yahoo.com/news/student-loan-recipients-repayment-strike-face-default-040203777--finance.html

Egads.  I mean, hell, I get that a lot about our for-profit education system is f'ed up, but where's the personal responsibility?  Such an entitlement mentality at work here.

CaveDweller

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #1 on: March 31, 2015, 07:31:45 AM »
Yeah, I hear you about personal responsibility. But realistically a lot of 18-year olds aren't going to be able to tell the difference between the glossy brochure of a decent college and the equally glossy one for a totally bullshit worthless one. Sucks to only find out your education is worthless after you're $80K in debt and can't find a job. I'd be pissed too.

vivophoenix

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #2 on: March 31, 2015, 07:39:52 AM »
i think there was a thread for this already.

but i think also one of the provisions is that this money can not be used for fraud.

personal responsibility is part of the argument, but what about the responsibility a society has to make sure that while providing an opportunity for higher education, it also make certain that people aren't taken advantage of.

people are quick to say "hey you said you would pay this money back". but these schools offered people a dream and, for many, what they thought was an avenue out of their current circumstances.

so what about the personal responsibility of the school? we give businesses the advantages of people-hood, why not the moral responsibility?

taekvideo

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #3 on: April 01, 2015, 09:50:06 PM »
i think there was a thread for this already.

but i think also one of the provisions is that this money can not be used for fraud.

personal responsibility is part of the argument, but what about the responsibility a society has to make sure that while providing an opportunity for higher education, it also make certain that people aren't taken advantage of.

people are quick to say "hey you said you would pay this money back". but these schools offered people a dream and, for many, what they thought was an avenue out of their current circumstances.

so what about the personal responsibility of the school? we give businesses the advantages of people-hood, why not the moral responsibility?

Yeah they apparently used false advertising / fabricated data / altered records in order to recruit people to their worthless overpriced colleges.
So those students were scammed out of ~$100k... it's no surprise they're pissed and don't want to pay.

EricL

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #4 on: April 02, 2015, 09:06:20 AM »
If you get into a good college and get a crap degree, the onus is on you and you should pay.   But if you go to a fraudulent college for a crap degree, it may be your personal responsibility NOT to pay.

jmusic

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #5 on: April 02, 2015, 12:29:56 PM »
If you get into a good college and get a crap degree, the onus is on you and you should pay.   But if you go to a fraudulent college for a crap degree, it may be your personal responsibility NOT to pay.

Ah, but once you reach this point (getting the crap degree) you've ALREADY paid the college, and are now having to repay the BANK. 

GetItRight

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #6 on: April 02, 2015, 12:38:00 PM »
If you get into a good college and get a crap degree, the onus is on you and you should pay.   But if you go to a fraudulent college for a crap degree, it may be your personal responsibility NOT to pay.

Ah, but once you reach this point (getting the crap degree) you've ALREADY paid the college, and are now having to repay the BANK.

Thanks for pointing this out. The bank is an innocent party in this. The only reason they make those huge loans is the absurd special rules of the game the government sets up. It it wasn't for government policy regarding college and student loans the schools wouldn't charge nearly as much and the banks wouldn't lend nearly as much so there would never be massive mortgage sized debt backed by nothing and handed out like candy.

RFAAOATB

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #7 on: April 02, 2015, 12:43:27 PM »
Thanks for pointing this out. The bank is an innocent party in this. The only reason they make those huge loans is the absurd special rules of the game the government sets up. It it wasn't for government policy regarding college and student loans the schools wouldn't charge nearly as much and the banks wouldn't lend nearly as much so there would never be massive mortgage sized debt backed by nothing and handed out like candy.

The only way the banks would be innocent is if they were legally required to accept the loan terms.  If they had the ability to refuse the loan then they took on as much risk as the students seeking the loans.  While people should not take out loans to go to scam schools, banks should have enough foresight to not give out loans to scam schools without accepting a higher risk of nonpayment.

MayDay

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #8 on: April 02, 2015, 12:47:20 PM »
Thanks for pointing this out. The bank is an innocent party in this. The only reason they make those huge loans is the absurd special rules of the game the government sets up. It it wasn't for government policy regarding college and student loans the schools wouldn't charge nearly as much and the banks wouldn't lend nearly as much so there would never be massive mortgage sized debt backed by nothing and handed out like candy.

The only way the banks would be innocent is if they were legally required to accept the loan terms.  If they had the ability to refuse the loan then they took on as much risk as the students seeking the loans.  While people should not take out loans to go to scam schools, banks should have enough foresight to not give out loans to scam schools without accepting a higher risk of nonpayment.

Like times a million! 


GetItRight

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #9 on: April 02, 2015, 01:03:27 PM »
The only way the banks would be innocent is if they were legally required to accept the loan terms.  If they had the ability to refuse the loan then they took on as much risk as the students seeking the loans.  While people should not take out loans to go to scam schools, banks should have enough foresight to not give out loans to scam schools without accepting a higher risk of nonpayment.

I think you missed the point. The whole system is perverted by government policy. The banks are playing by the perverse rules of the system government has set up. They either go along as make the loans or get left behind and maybe go out of business or at the least lose out of a tremendous amount of money, two crappy choices. The banks making these loans and the schools charging exorbitant prices is a result of government guaranteeing the debt and ensuring it will never be discharged in bankruptcy. The government created this problem, schools and banks just did what they have always done, maximize compensation to their higher level employees and maximize profits. Can't fault them too much for that, they don't make the rules.

dude

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #10 on: April 03, 2015, 07:00:34 AM »
The only way the banks would be innocent is if they were legally required to accept the loan terms.  If they had the ability to refuse the loan then they took on as much risk as the students seeking the loans.  While people should not take out loans to go to scam schools, banks should have enough foresight to not give out loans to scam schools without accepting a higher risk of nonpayment.

I think you missed the point. The whole system is perverted by government policy. The banks are playing by the perverse rules of the system government has set up. They either go along as make the loans or get left behind and maybe go out of business or at the least lose out of a tremendous amount of money, two crappy choices. The banks making these loans and the schools charging exorbitant prices is a result of government guaranteeing the debt and ensuring it will never be discharged in bankruptcy. The government created this problem, schools and banks just did what they have always done, maximize compensation to their higher level employees and maximize profits. Can't fault them too much for that, they don't make the rules.

Well, that's sorta true -- but those laws are in place because their lobbyists push hard for them.  Whenever anyone suggests making student loans dischargeable in bankruptcy, the Big Banks roll out the Lobbying Machine big-time.

But I still put the onus on the borrower.  If you can't figure out that the fly-by-night college you're paying Ivy League tuition to attend isn't worth the money, then you probably shouldn't be in college.  But your stupidity should not be my (the taxpayer's) liability.

MandalayVA

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #11 on: April 03, 2015, 07:21:05 AM »
But I still put the onus on the borrower.  If you can't figure out that the fly-by-night college you're paying Ivy League tuition to attend isn't worth the money, then you probably shouldn't be in college.  But your stupidity should not be my (the taxpayer's) liability.

Particularly since the article focused on a woman in her thirties who should have known better.

EricL

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #12 on: April 03, 2015, 08:39:21 AM »
"Innocent banks"?  I'm not sure I've ever seen one in my lifetime.  Okay, so the woman is an idiot.  But she fell for society's current lie a college education automatically equals a higher income and bought the shiny brochure promise this particular college offered. Caveat emptor, life isn't fair, and all that.  But that highway goes both ways.  If she really wants to put on her badass pants she'll sell or give away everything she owns, live on the streets and declare bankruptcy.  Caveat emptor (in the case of a bank selecting loan applicants), life isn't fair, too bad/so sad. 

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #13 on: April 03, 2015, 09:04:36 AM »
Zero sympathy for these crybabies.  Ignorance is no excuse.  These idiots agreed to the terms and signed on the dotted line. Pay up or they will eventually be taking it out of your Social Security and any tax refunds you may have gotten. Go to a college you can afford. They get what they have coming 100% each and every one of them.

Kaspian

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #14 on: April 03, 2015, 10:24:42 AM »
Zero sympathy for these crybabies.  Ignorance is no excuse.  These idiots agreed to the terms and signed on the dotted line. Pay up or they will eventually be taking it out of your Social Security and any tax refunds you may have gotten. Go to a college you can afford. They get what they have coming 100% each and every one of them.

Harshly put, but I agree 100%.  For a bunch of educated people how hard is the concept of an agreement?  Borrowing is easy.  Paying it back?  Nobody "likes" to pay back a loan.  That's the hard suckass part.  Not majoring in math is no excuse.  Borrowing and then not wanting to pay back (or finding valid-in-one's-own-mind reasons not to) has been happening since humans could talk to each other.  Probably even earlier--back when caveman Grog "borrowed" caveman Tull's flint to make a fire.

RFAAOATB

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #15 on: April 03, 2015, 10:27:14 AM »
Zero sympathy for these crybabies.  Ignorance is no excuse.  These idiots agreed to the terms and signed on the dotted line. Pay up or they will eventually be taking it out of your Social Security and any tax refunds you may have gotten. Go to a college you can afford. They get what they have coming 100% each and every one of them.

The fact that they are idiots is why they should have sympathy.  I would have higher expectations on the collaborative intelligence of banks and businesses then the collective intelligence of those who are led to believe for profit colleges are a good idea.

handsnhearts

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #16 on: April 03, 2015, 10:45:20 AM »
"Innocent banks"?  I'm not sure I've ever seen one in my lifetime.  Okay, so the woman is an idiot.  But she fell for society's current lie a college education automatically equals a higher income and bought the shiny brochure promise this particular college offered. Caveat emptor, life isn't fair, and all that.  But that highway goes both ways.  If she really wants to put on her badass pants she'll sell or give away everything she owns, live on the streets and declare bankruptcy.  Caveat emptor (in the case of a bank selecting loan applicants), life isn't fair, too bad/so sad.

student loans don't go away in bankruptcy...

Jack

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #17 on: April 03, 2015, 11:29:41 AM »
If you can't figure out that the fly-by-night college you're paying Ivy League tuition to attend isn't worth the money, then you probably shouldn't be in college.

If you've grown up in the US within the last generation or so, you've almost certainly been indoctrinated from birth to believe "YOU MUST GO TO COLLEGE OR YOU WILL FAIL AT LIFE." Your parents tell you that (even if they themselves aren't college-educated). Your teachers tell you that. Your high-school guidance counselor tells you that. The government tells you that. Banks tell you that. Slick ads for bullshit scam schools tell you that. And nobody's telling you otherwise (because even companies looking for non-college-educated skilled workers still probably want you to go to trade school, at least).

We've already established these people to be idiots (since they can't tell a shitty school from a good one). How the fuck can you expect an idiot to be smart enough to realize that every authority figure in his entire live has been lying to him?! You're damn right that idiots shouldn't go to college, but they're being actively prevented from knowing that.

student loans don't go away in bankruptcy...

This is the crux of the issue, and it has several effects:
  • The bank takes on approximately zero risk, and therefore gives zero fucks whatsoever about whether the school is legitimate.
  • Short of being homeless and destitute for the entire rest of her life, there is no way out for someone who screwed up this badly. The government will garnish her wages and taxes forever to force her to pay it back.
We also have to consider the macroeconomic effects of the situation. The fact is, Americans are now expected to compete globally. Just about everywhere else in the world college is either drastically cheaper or completely free for the student, which means that once they graduate their earnings can buy real goods rather than lining the pockets of middlemen. (And if you think paying middlemen for unnecessary BS is somehow a good thing, go read up on the "broken window fallacy.") Also, just about everywhere else in the world doesn't make college available to idiots, which means they don't waste their time and money on it. (Yes: at this point, making college less available is also an advantage.)

US government policy to encourage and back all these student loans is having the direct effect of sabotaging America's economic competitiveness, and all we're getting out of the deal is the unjust enrichment of fraudsters and middlemen (bankers, college administrators, and lobbyists).

Kaspian

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #18 on: April 03, 2015, 11:43:11 AM »
So WTF is the solution?  As we speak, as we write this, as articles such as the above are printed, at this exact second some numbnuts is excitedly signing up for a massive student loan for a degree in liberal arts.  They may even be socially aware of the problems people with student loans are currently facing but is that going to stand in the way of him/her and an instant $50K?  Hell, no!  We need a Mustachian to stand right in front of the line for loan applications saying, "Hey waitaminute, dumbass--come here a sec..."   Even then they'd probably submit it anyway.  I'm not saying it's a lost cause, but have you ever seen a student about to get their loan?!  They look like a 5-year old at Christmas.  :(

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #19 on: April 03, 2015, 11:55:16 AM »
So WTF is the solution? 

Go to a college you can afford and get a marketable degree. Not something in Political Science or 18th Century French Literature.  My niece graduates in 2 months at a college that costs $57,000 per year and her major is Political Science. Her mother said she wants her daughter to get the "college experience" well now she will also be getting the "being broke forever" experience.   LOL!!!!  It will be interesting to watch from the sidelines as she tries to pay this loan back FOREVER.  At Thanksgiving each year I will enjoy asking "innocently" how's the job hunt and paying back your school loan going?  I don't know if my sister co-signed any of the school loans but if she did that will make things even more interesting for Thanksgiving dinners each year!! Her loan payment will be about $2GRAND a month!!!   

RexualChocolate

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #20 on: April 03, 2015, 11:56:20 AM »

Well, that's sorta true -- but those laws are in place because their lobbyists push hard for them.  Whenever anyone suggests making student loans dischargeable in bankruptcy, the Big Banks roll out the Lobbying Machine big-time.

But I still put the onus on the borrower.  If you can't figure out that the fly-by-night college you're paying Ivy League tuition to attend isn't worth the money, then you probably shouldn't be in college.  But your stupidity should not be my (the taxpayer's) liability.

Who do you think owns almost every single student loan now?

Hint: Its not big banks. Its not any company.

Lot of misinformation here. Corporations are like water, they just follow the path of least resistance to profit. Its the governments job to align incentives correctly.

If you want to talk about equitability, the loans are not priced fairly. They should be 15+% interest. The default rate is in the double digits. Anyone with a student loan is already getting subsidized.

Blonde Lawyer

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #21 on: April 03, 2015, 12:11:37 PM »
Have they tried suing the school for fraud/misrepresentation and demanding refunds? That seems to make a lot more sense than refusing to pay back your loans.  However, once we start talking consumer fraud, the AG usually gets involved.  Maybe to get his/her attention they had to hurt the gov't loan holder first.  I don't think it's a smart path but if gets the attention of people that can make a difference than maybe it wasn't the dumbest idea.

Also, student loans can be discharged in bankruptcy in some very rare circumstances that show extreme hardship beyond just what every student faces.  You need more than insolvency.  Their stories could rise to that level.  Here is an article on it.  http://www.usnews.com/education/blogs/student-loan-ranger/2014/08/13/debunking-the-student-loan-bankruptcy-myth

Jack

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #22 on: April 03, 2015, 12:31:11 PM »
So WTF is the solution?

At the very least, the government should stop guaranteeing loans for colleges that lack regional accreditation.

A better plan would be for the government to stop guaranteeing loans at all and allow them to be discharged through bankruptcy. This will very quickly destroy the entire student loan industry, which would force colleges to price themselves reasonably and force states to restore funding to their public university system.

The macroeconomically-optimal plan would be for the government to do the things in the previous paragraph and offer free [i.e., taxpayer-paid] tuition to anyone who is competent, attends a regionally-accredited school, and majors in something useful.

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #23 on: April 03, 2015, 12:49:36 PM »
So WTF is the solution?


A better plan would be for the government to stop guaranteeing loans at all and allow them to be discharged through bankruptcy.



Then many would go to the best school they can get into with the intention of just filing for bankruptcy when they get out. There is nothing to repossess with a college degree like there would be with a house or car loan. 

Jack

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #24 on: April 03, 2015, 12:56:35 PM »
So WTF is the solution?


A better plan would be for the government to stop guaranteeing loans at all and allow them to be discharged through bankruptcy.



Then many would go to the best school they can get into with the intention of just filing for bankruptcy when they get out. There is nothing to repossess with a college degree like there would be with a house or car loan.

Exactly, and lenders will realize that and either quit lending or go bankrupt (a win-win either way).

CheapskateWife

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #25 on: April 03, 2015, 01:26:28 PM »
I have empathy for their plight, and understand that it must be difficult to deal with their situation, but sometimes we have to just deal with our "lemons". 

These are two separate contracts:

a)  Student pays College for education - this contract was violated by the College

b) Student borrows money from Bank for promise of greater returns - the student refuses to pay and violates contract b) because contract a) was violated by 3rd party

They are really unrelated contracts, and the banks should legally have a field day enforcing payment. 

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #26 on: April 03, 2015, 01:33:10 PM »
So WTF is the solution?


A better plan would be for the government to stop guaranteeing loans at all and allow them to be discharged through bankruptcy.



Then many would go to the best school they can get into with the intention of just filing for bankruptcy when they get out. There is nothing to repossess with a college degree like there would be with a house or car loan.

Exactly, and lenders will realize that and either quit lending or go bankrupt (a win-win either way).
  Because they realize it this is why it would never happen.   If all of the sudden now college loans can be forgiven in bankruptcy what about all the people who worked 3 jobs for years and payed their loans back? "oh well sorry fella you were a sucker and actually were responsible" yea that would be fair!!!  How about people start learning personal accountability and be aware of the loan terms  they are agreeing to?   

RFAAOATB

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #27 on: April 03, 2015, 01:42:41 PM »
Because they realize it this is why it would never happen.   If all of the sudden now college loans can be forgiven in bankruptcy what about all the people who worked 3 jobs for years and payed their loans back? "oh well sorry fella you were a sucker and actually were responsible" yea that would be fair!!!  How about people start learning personal accountability and be aware of the loan terms  they are agreeing to?   

Isn't the seven years of bad credit sufficient punishment for bankruptcy as well as a warning to other creditors not to do business with them?  Seven years before you can get a decent rate on a car loan or a mortgage is an acceptable risk outcome.

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #28 on: April 03, 2015, 01:47:15 PM »

Because they realize it this is why it would never happen.   If all of the sudden now college loans can be forgiven in bankruptcy what about all the people who worked 3 jobs for years and payed their loans back? "oh well sorry fella you were a sucker and actually were responsible" yea that would be fair!!!  How about people start learning personal accountability and be aware of the loan terms  they are agreeing to?   

Isn't the seven years of bad credit sufficient punishment for bankruptcy as well as a warning to other creditors not to do business with them?  Seven years before you can get a decent rate on a car loan or a mortgage is an acceptable risk outcome.
[/quote]

What about the guy who honored the terms he agreed to and just finished  paying off $100,000 of college debt by working 3 jobs for 10 years. Would that be fair to him?

RFAAOATB

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #29 on: April 03, 2015, 02:09:29 PM »
What about the guy who honored the terms he agreed to and just finished  paying off $100,000 of college debt by working 3 jobs for 10 years. Would that be fair to him?

He has proved his trustworthiness and shall have no problem obtaining the near historic low interest rate for mortgages and vehicles.  Meanwhile the guy who lost a bet on college loans and declared bankruptcy will spend the better part of a decade in ghetto apartments and high interest rust-buckets for his transgression.  Virtue will be rewarded with a clearer path to home ownership.

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #30 on: April 03, 2015, 02:32:39 PM »
What about the guy who honored the terms he agreed to and just finished  paying off $100,000 of college debt by working 3 jobs for 10 years. Would that be fair to him?

He has proved his trustworthiness and shall have no problem obtaining the near historic low interest rate for mortgages and vehicles.  Meanwhile the guy who lost a bet on college loans and declared bankruptcy will spend the better part of a decade in ghetto apartments and high interest rust-buckets for his transgression.  Virtue will be rewarded with a clearer path to home ownership.

Why can't these losers do what the guy who worked 3 jobs did to pay his college loan back?  Why would they get special treatment while other choose to work hard to honor their loan agreement?   

RFAAOATB

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #31 on: April 03, 2015, 03:19:20 PM »
Why can't these losers do what the guy who worked 3 jobs did to pay his college loan back?  Why would they get special treatment while other choose to work hard to honor their loan agreement?

Working 3 jobs is an unreasonable and unhealthy expectation to put on a population at large.  Bankruptcy isn't free.  The credit hit imposes barriers to get ahead.  This isn't special treatment, it is a choice to take the credit hit to get away from the loan or to pay off the loan through extraordinary effort and keep the credit clean.  Allowing student loans to be discharged via bankruptcy would be a net good for society.  It puts the risk evaluation on the lenders, who should be better at risk analysis than the borrowers.  It could pop the education bubble and dash the college dreams of disadvantaged groups, which is a reason beyond the loans which is why it wont be popular.

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #32 on: April 03, 2015, 03:50:05 PM »
FUCK THEM. They agreed to the terms so now time to pay up.  The personal accountability they will have to have will be a good life lesson for them and then just maybe they will tell their kids (that they can't afford to have but will) not to do what they did.

netskyblue

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #33 on: April 03, 2015, 04:58:20 PM »
Have they tried suing the school for fraud/misrepresentation and demanding refunds? That seems to make a lot more sense than refusing to pay back your loans.

This exactly.  You borrowed the money and made a promise to pay it back - you pay it back.  I mean, if I took out a loan to go buy a boat (ha ha) and after I got it, found out it was riddled with dry rot & falling apart, it's not like I could just refuse to pay the bank back.  Go after the lousy school that sold them the lemon education.  It's already been paid, so refusing to pay the loans isn't going to do anything to harm the school.

nazar

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #34 on: April 03, 2015, 06:11:26 PM »
This really needs to be addressed in high schools.  Guidance counselors should be explaining different educational opportunities and the general costs and benefits of these options, as well as other opportunities.  If the can cite job placement rates of ivy leagues, research universities and community colleges why aren't they doing the same with the for profit schools?

bludreamin

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #35 on: April 03, 2015, 06:49:57 PM »
First thought - Holy Shit!!! $100K plus in loans with a monthly payment of $1500 a month - how is that possible? I don't remember how much I took out in loans but I know that my payments were much less than that - I was paying about half that a month but only because I wanted to pay off the BS/MS loans within 5 years of getting my first "real" job.

Second - I agree with some of the sentiment here in that I have next to no sympathy for people that refuse to honor their obligations. You signed for the loan - you pay for the loan.  think you got a bad deal? Well, sucks to be you. Put on your big boy/girl pants and figure a way to work it out (and by that I mean honoring your obligations and paying back your loan).   The amount of money that these people seemed to have taken out is idiotic and should be considered shame-worthy consumer debt. Note that I mention their debt is idiotic, not the people themselves. I think these people are pitiable because their parents, society, and (HS) educational system has failed to educate them on what should be basic personal finance and  responsible consumer knowledge (e.g., managing inflow/outflow, cost of debt, researching purchases, managing/avoiding liabilities, gaining/improving assets).

Since loans were the only reason I was able to pay for my post-secondary schooling, I see the benefit to student loans. If I had a magic wand to wave, my solution to the cluster that is the current student loan system would be to have student loans that:
  • can only be used for an accredited education/training program
  • is a set dollar amount of $X per year (thinking "X" would be comparable to tuition at a state school)
  • will only be given for a certain number of years that is equal to the length of the program plus 1 year (Y+1 years), or a maximum of 5 years (total) of loans given per person (the plus 1 year is because I'm feeling generous and recognize someone might change focus/majors or should allow for an associate degree holder to go back and earn a bachelors)
  • has 0% interest while enrolled in the program
  • after leaving/ending the program, the interest would be 0% if you graduate with the certification/degree awarded by the accredited program or the prime interest rate if you drop out/don't earn your degree
  • loan payback is a minimum $/month and/or a NTE  % of income
  • loan principal cannot be discharged through bankruptcy

If a student needs more than $X/year or more than (Y+1) years to afford/complete their post-secondary education/training, they either need to (1) find/earn scholarships, (2) get a job(s)/save for it, and/or (3) get a PUNCH IN THE FACE (and maybe a personal loan if they can provide a reasonable justification).   Obviously, my considerations for student loans above wouldn't cover post-graduate study so those would have to be funded through scholarships, TA/RA positions, etc to avoid face punches. 
 


If you've grown up in the US within the last generation or so, you've almost certainly been indoctrinated from birth to believe "YOU MUST GO TO COLLEGE OR YOU WILL FAIL AT LIFE." Your parents tell you that (even if they themselves aren't college-educated). Your teachers tell you that. Your high-school guidance counselor tells you that. The government tells you that. Banks tell you that. Slick ads for bullshit scam schools tell you that. And nobody's telling you otherwise (because even companies looking for non-college-educated skilled workers still probably want you to go to trade school, at least).



RE: the bold statement (emphasis mine) in the quote above - My HS guidance counselor actually recommended I take a teen parenting class when I was a freshman in HS(when planning for sophomore year classes) since "it would help prepare me to find a job after HS". I still remember the look he gave me when I told him I was going to college, it's the same look I got junior year when I told him the only university I was applying for was a well-respected engineering school in the region and no I didn't have a back up school. At least I got the last laugh - because, in spite of his negativity, I graduated with high honors from said engineering school (in 3.5 years no less) and went on to get my masters, which and my father was against that one because I needed to "find a husband and start a family" *sigh*. I thank the stars for my mother - she always supports me (with a dose of reality when needed) and encouraged me to work hard for what I want.

And while the (standard) university (plus) path worked for me, I think there definitely needs to be more education in HS about post-secondary options.  I firmly believe that everyone should undertake some form of post-secondary education/training but  4+ year in college/university is not the only option.  Community college, apprenticeship/trade school, military, etc. are just as valid and worthwhile for a "successful" life.
« Last Edit: April 03, 2015, 06:53:32 PM by bludreamin »

Wings5

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #36 on: April 03, 2015, 09:00:06 PM »
And while the (standard) university (plus) path worked for me, I think there definitely needs to be more education in HS about post-secondary options.  I firmly believe that everyone should undertake some form of post-secondary education/training but  4+ year in college/university is not the only option.  Community college, apprenticeship/trade school, military, etc. are just as valid and worthwhile for a "successful" life.

I agree wholeheartedly that there are plenty of other succesful paths in life that do not inckude college. But consider for a minute how unproductive an average day spent at Anytown High can be. I get text messages from relatives in high school all day, as if they aren't even in school, and I don't think I am alone. If school is just some big hangout that's funded by, well, who cares, with no real point, it will be hard to grab kids' attention about the seriousness of transitioning to adulthood and some type of productive life. 

shedinator

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #37 on: April 03, 2015, 09:26:56 PM »
Student Loans were once a touchy subject for me, because I was one of the people who got suckered on the whole promise of a college education. I, along with just about every other high school student graduating in the early and mid-2000s, was told "get a degree - ANY degree - and you'll make $1,000,000 more in your life time." We had people come and talk to us who went to school and majored in early Renaissance trombone and graduated to get 6 figure office jobs with full benefits. We were further told that going to a private school instead of a public one would boost our earnings even further. So a bunch of us ran off and applied to expensive schools, "knowing" we would graduate and pay off our loans years ahead of schedule.

Then we graduated either just before or during the financial collapse, and that pool of six figure jobs we were all set to dive into turned out to be empty. The dominant cultural narrative could not have changed any faster. The very same people who insisted that student loans were "good debt," right up there with mortgages, were suddenly asking why we all went and got student loans and acting as though that wasn't something absolutely everybody told us we MUST do. It was, and is, a very frustrating time to be a recent college graduate. And as I see other people being put through the same bait and switch, I still get angry, because these are teenage children who not only have not been taught any better, but who have been actively indoctrinated into believing a false narrative. The "personal accountability" argument has some bearing, but in this case, I would contend ignorance absolutely is an excuse - not an excuse not to pay, but certainly a valid basis for anger and frustration.

That said, my outlook on this system is twofold.
First, I think the entire college industrial complex needs to be dismantled. College costs are a bubble that needs to burst. We need to stop handing out these ridiculous student loans which go to fund administrative salaries, extracurricular activities, and a bunch of other things which are in no way related to improved education. If schools cannot remain solvent without regular cash infusions from the government via new crops of fiscally naive freshpersons, they should restructure, be allowed to go under, or surrender themselves to be run entirely by the government. Plenty of other countries have no difficulty providing a free public university education to their populations at a lower cost than student loans are running these days. Take a lesson from them and stop subsidizing useless frills with risky loans. Further, private education loans simply shouldn't be allowed. If the gov't wants students to have subsidized education, they should do it themselves, not push banks to do it by proxy.

Second, and perhaps more importantly for this particular article, people need to be aware of the relief programs in place for folks who can't pay their loans. They did indeed agree to the terms, as did the lender, and those terms allow for a whole host of alternative payment structures, including income based repayment for federal loans. Depending on income and family size, your SL payment can be as low as $0/month (mine would be $55 if I went that route), and any remaining balance after 25 years of repayment is forgiven. The terms of IBR are incredibly generous - most folks here would have no difficulty coming up with the room in their budgets to make the corresponding payment. If you could find a job at a qualifying nonprofit or gov't agency, you could even combine it with the Public Service forgiveness program and have your full balance discharged after just 10 years. Only drawback here is that it doesn't apply to private loans, which... see above.

Sofa King

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #38 on: April 04, 2015, 05:04:24 PM »
This is an interesting page with many loan horror stories  http://studentdebtcrisis.org/read-student-debt-stories/


It is common knowledge now(and has been for last 5+ years) that many (most) colleges are just a flat out rip off yet High School students are still taking on these crazy loans in 2015 like they don't know any better.

shedinator

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #39 on: April 04, 2015, 05:47:33 PM »
This is an interesting page with many loan horror stories  http://studentdebtcrisis.org/read-student-debt-stories/


It is common knowledge now(and has been for last 5+ years) that many (most) colleges are just a flat out rip off yet High School students are still taking on these crazy loans in 2015 like they don't know any better.

I'm not sure it's all that common of knowledge, quite frankly. I've got a bunch of kids in my youth group whose parents all intend for them to go to "the best college" (read: most expensive) they can get into. Only one of those parents has indicated any intention to pay for said schooling. The rest are being encouraged to pay for their educations with scholarships, and make up any remaining difference in loans. I know this is a bad idea for the majority of the kids who are looking at low ROI degrees, but I am one voice saying so, and their parents, guidance counselors, and the other adults in their lives are a loud chorus mostly saying the opposite. They're all vaguely aware that the "degree = lucrative job" axiom ceased to be true, but the narrative is so ingrained that they continue to perpetuate it.

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shedinator

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #41 on: April 04, 2015, 10:54:24 PM »

I'm not sure it's all that common of knowledge, quite frankly.

http://www.columbiachronicle.com/campus/article_273cf286-45f7-11e4-86fa-0017a43b2370.html

Not sure how that relates to what I said. I know most colleges are a ripoff, and student debt is reaching national crisis levels - we have no disagreement there. But my experience with teenagers and their parents suggests to me that either a) that knowledge is not yet "common knowledge," or b) this generation of teenagers and their parents are employing some heavy duty collective cognitive dissonance. When the mentality of the population is still predisposed to believing college attendance is inherently superior to all other paths, it's hard to conclude that it's common knowledge that most colleges are a ripoff.

Jack

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #42 on: April 06, 2015, 07:54:58 AM »
This exactly.  You borrowed the money and made a promise to pay it back - you pay it back.  I mean, if I took out a loan to go buy a boat (ha ha) and after I got it, found out it was riddled with dry rot & falling apart, it's not like I could just refuse to pay the bank back. 

Except with a boat, you can do that! Then the bank repossesses the leaky boat and it has to deal with trying to make its money back. For this reason, banks charge higher interest rates on older boats in order to compensate for that risk (and for really old boats, they refuse to lend). When the person trying to buy the boat can only find a 30% interest rate (or is unable to obtain financing at all), that provides a pretty big clue that somebody thinks buying the boat isn't a good idea in the first place.

With student loans, banks have been actively prevented (by the government) from charging higher interest rates for leaky, dry-rotted educations at shitty schools. The student (whom we've already agreed is naive and idiotic to begin with, remember) loses that important market signal.

Since loans were the only reason I was able to pay for my post-secondary schooling, I see the benefit to student loans.

Loans were the only reason you were able to pay for your schooling precisely because the availability of loans CAUSED your schooling to become too expensive to pay for by any other means!

Student Loans were once a touchy subject for me, because I was one of the people who got suckered on the whole promise of a college education. I, along with just about every other high school student graduating in the early and mid-2000s, was told "get a degree - ANY degree - and you'll make $1,000,000 more in your life time." We had people come and talk to us who went to school and majored in early Renaissance trombone and graduated to get 6 figure office jobs with full benefits. We were further told that going to a private school instead of a public one would boost our earnings even further. So a bunch of us ran off and applied to expensive schools, "knowing" we would graduate and pay off our loans years ahead of schedule.

Then we graduated either just before or during the financial collapse, and that pool of six figure jobs we were all set to dive into turned out to be empty. The dominant cultural narrative could not have changed any faster. The very same people who insisted that student loans were "good debt," right up there with mortgages, were suddenly asking why we all went and got student loans and acting as though that wasn't something absolutely everybody told us we MUST do. It was, and is, a very frustrating time to be a recent college graduate. And as I see other people being put through the same bait and switch, I still get angry, because these are teenage children who not only have not been taught any better, but who have been actively indoctrinated into believing a false narrative. The "personal accountability" argument has some bearing, but in this case, I would contend ignorance absolutely is an excuse - not an excuse not to pay, but certainly a valid basis for anger and frustration.

This x1000!

These two charts say it all:





I started college right about when the slope of that College Education Inflation Rate curve increased, and graduated right when that Real Median Household Income curve took a nose-dive. Despite having two good (i.e., engineering) degrees, I've managed to end up spending years unemployed. My wife, with a less-good (i.e., art) degree, has now resorted to a seasonal job working as a retail cashier. And we're the lucky ones! Most of the people refusing to pay their loans back and whatnot are much, much worse off than we are.

And then, to add insult to injury, we get a bunch of Gen-Xers (who not only went to college back when it was easily affordable on the proceeds from their summer McJob, but who also benefited from the rise in salaries in the '90s) telling us that we fucked up by actually listening to the shitty advice that they themselves gave us in the first place!

beltim

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #43 on: April 06, 2015, 08:05:15 AM »
These two charts say it all:

I think these are two more important charts:


State funding of education has decreased significantly and rapidly in almost every state and that's only over a 5 year period!


And, shockingly, that leads to higher tuition increases in states where higher education funding has been cut.

beltim

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #44 on: April 06, 2015, 08:11:14 AM »
Or, for a longer-term view:


shedinator

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #45 on: April 06, 2015, 08:30:49 AM »

Student Loans were once a touchy subject for me, because I was one of the people who got suckered on the whole promise of a college education. I, along with just about every other high school student graduating in the early and mid-2000s, was told "get a degree - ANY degree - and you'll make $1,000,000 more in your life time." We had people come and talk to us who went to school and majored in early Renaissance trombone and graduated to get 6 figure office jobs with full benefits. We were further told that going to a private school instead of a public one would boost our earnings even further. So a bunch of us ran off and applied to expensive schools, "knowing" we would graduate and pay off our loans years ahead of schedule.

Then we graduated either just before or during the financial collapse, and that pool of six figure jobs we were all set to dive into turned out to be empty. The dominant cultural narrative could not have changed any faster. The very same people who insisted that student loans were "good debt," right up there with mortgages, were suddenly asking why we all went and got student loans and acting as though that wasn't something absolutely everybody told us we MUST do. It was, and is, a very frustrating time to be a recent college graduate. And as I see other people being put through the same bait and switch, I still get angry, because these are teenage children who not only have not been taught any better, but who have been actively indoctrinated into believing a false narrative. The "personal accountability" argument has some bearing, but in this case, I would contend ignorance absolutely is an excuse - not an excuse not to pay, but certainly a valid basis for anger and frustration.

This x1000!

These two charts say it all:





I started college right about when the slope of that College Education Inflation Rate curve increased, and graduated right when that Real Median Household Income curve took a nose-dive. Despite having two good (i.e., engineering) degrees, I've managed to end up spending years unemployed. My wife, with a less-good (i.e., art) degree, has now resorted to a seasonal job working as a retail cashier. And we're the lucky ones! Most of the people refusing to pay their loans back and whatnot are much, much worse off than we are.

And then, to add insult to injury, we get a bunch of Gen-Xers (who not only went to college back when it was easily affordable on the proceeds from their summer McJob, but who also benefited from the rise in salaries in the '90s) telling us that we fucked up by actually listening to the shitty advice that they themselves gave us in the first place!

Yes. These things right here.

dude

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #46 on: April 06, 2015, 01:12:49 PM »
Saw the documentary "Ivory Tower" on a recent plane ride home from Japan.  Very interesting -- explains the factors behind the exploding cost of college education (not the least of which is the competition to provide luxury dorms, gigantic recreation centers with rock walls, outdoor pools, and more). It's pretty insane.

http://www.pbs.org/newshour/bb/ivory-tower-explores-american-higher-education-pricey/

Elderwood17

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Re: Studen Loan Recipients Go On Repayment Strike
« Reply #47 on: April 06, 2015, 02:09:23 PM »
Had dinner recently with friends who do financial counseling at our church.  They have had several young couples recently who didn't understand they HAD TO PAY STUDENT LOANS BACK!!   They honestly thought student loans were grants.  They said it is common that they meet with folks who have no idea how much they had taken out in loans, and it is not unusual for their "guess" to be off by a factor of 50%.  These are college graduates.

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Re: Student Loan Recipients Go On Repayment Strike
« Reply #48 on: April 06, 2015, 05:26:50 PM »
Some counter points to several of the charts posted above:
http://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?smid=fb-share&_r=1

This one I strongly agree with-
"Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 a 221 percent increase."

shedinator

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Re: Student Loan Recipients Go On Repayment Strike
« Reply #49 on: April 06, 2015, 07:45:19 PM »
Some counter points to several of the charts posted above:
http://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?smid=fb-share&_r=1

This one I strongly agree with-
"Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 a 221 percent increase."

The over-administration of college is ridiculous, and IMO actually decreases the quality of academics as professors are subjected to greater and greater amounts of scrutiny and restriction, which runs contrary to the very spirit of liberal arts education. I don't think that's necessarily a counter point to the charts above, though, so much as it's yet further evidence that the rising costs of college do not reflect rising values of college. Whether the ultimate culprit is fancier dorms, more student activities, more administration, or all of these things and more, all of the information indicates that prices are being driven up while product quality is more suspect than it's ever been.