Student Loan Forgiveness? (bankruptcy, expenses, creditors, debt)

[mattywo85]

Lets just say the gov't forgave all student loans, private and federal. Do you think this would have a positive or negative effect on the economy? Or would it have minimal or no effect at all?

[CaptainNJ]

considering there is over $1 trillion in student loan debt outstanding, id have to think it would be pretty devastating to lose so much money and it would hurt us tremendously. its also pure evil, people took the money and they should pay it back. instead of foriging student loan debt, get the government out of the student loan business completely.

[gwynedd1]

Originally Posted by mattywo85

Lets just say the gov't forgave all student loans, private and federal. Do you think this would have a positive or negative effect on the economy? Or would it have minimal or no effect at all?

Since all the loans did was drive up tuition, especially giving loans to those who really had no business going to college, I don't think the present situation is anything other than exploitative for people trying to start their lives. I don't think it was just about loaning to cover costs anymore. We made an educational ponzi scheme. Without a rationing system by academic merit to prevent an education bubble, you get a mess like this. Students are paying for their education 30 years into the future. If that is not going to create something tantamount to labor subsistence I don't know what is.

Then of course something needs to be done with tenure. How many monopolists do we expect these children to overcome without being pauperized?

[julian17033]

Just as I borrowed for my college education and signed on the bottom line these people today have done the same thing.
I was never promised a healthy job outlook nor a vibrant economy upon graduation.

I took the risk by signing my promissory notes and forged ahead with my education.
Over the years I paid back close to 55,000.00 dollars by scraping by at times and being unemployed at other times.

Note to those that wish loan forgiveness based upon economic conditions;
YOU BORROWED IT, PAY IT BACK HOWEVER LONG IT TAKES!!

[gwynedd1]

Originally Posted by CaptainNJ

considering there is over $1 trillion in student loan debt outstanding, id have to think it would be pretty devastating to lose so much money and it would hurt us tremendously. its also pure evil, people took the money and they should pay it back. instead of foriging student loan debt, get the government out of the student loan business completely.

If you place a bid for a house at 200K and a speculator and a bank places a bid at 250k, with nothing but the speculative value of the asset rather than the credit worthiness of the other bidder, you think that 50k extra you have to pay isn't robbery by the finance industry? What do you think happened with liar loans? It artificially created demand for housing which made all buyers take out higher mortgages which was a finance industry bonanza. Same thing happened by loaning money for every idiot with a warm temperature to get drunk at college.

Certainly they should pay something but what they owe was artificially bloated. When ever a cost accelerates faster than the rest of the economy, its pretty obvious an interest like this is at work.

[gwynedd1]

Originally Posted by julian17033

Just as I borrowed for my college education and signed on the bottom line these people today have done the same thing.
I was never promised a healthy job outlook nor a vibrant economy upon graduation.

I took the risk by signing my promissory notes and forged ahead with my education.
Over the years I paid back close to 55,000.00 dollars by scraping by at times and being unemployed at other times.

Note to those that wish loan forgiveness based upon economic conditions;
YOU BORROWED IT, PAY IT BACK HOWEVER LONG IT TAKES!!

Too bad you did not take econ in University of Missouri-Kansas City. Then you would smell out the ponzi scheme. Heck even the Chicago school would spot the tenure cartel.

Education does not use resources. Its labor intensive. Thus there is no natural resource rent that can explain the rise in costs. There is a cartel at work....always...

[mattywo85]

Originally Posted by julian17033

Just as I borrowed for my college education and signed on the bottom line these people today have done the same thing.
I was never promised a healthy job outlook nor a vibrant economy upon graduation.

I took the risk by signing my promissory notes and forged ahead with my education.
Over the years I paid back close to 55,000.00 dollars by scraping by at times and being unemployed at other times.

Note to those that wish loan forgiveness based upon economic conditions;
YOU BORROWED IT, PAY IT BACK HOWEVER LONG IT TAKES!!

Why are student loans treated so differently? Shouldn't the loans(private) have bankruptcy protections like other unsecured types of debts?

[gwynedd1]

Originally Posted by mattywo85

Why are student loans treated so differently? Shouldn't the loans(private) have bankruptcy protections like other unsecured types of debts?

Do colleges have to use rhodium these days or something?

If the students could declare bankruptcy, guess who would have not just made rubber stamp loans? The creditors had no risk so they didn't care and everyone's tuition went to the moon.

Fast Facts

How else to you explain it exceeding the inflation rate?

http://readingeagle.com/article.aspx?id=3369

Loan guarantees have been signed.

According to figures obtained from the U.S. Department of Education, the Census Bureau and the College Board, tuition increased from the 2005-06 school year to the 2010-11 school year by 24 percent for a four-year public college, 17 percent for four-year private college and 11 percent for a two-year public college.

Its a credit bubble. It shifts money from students to colleges(which has some potential economic benefits) and to finance(which has no economic benefits).

[gwynedd1]

With a normal asset bloating loan like a plot of earth at least you can walk away. Student loans don't go away even after bankruptcy. You cannot walk away from your own skin. Its a financial facade on slavery. If you want a privately financed educational system this is what you do.

* Academic merit needs to be adjusted based upon available seats and not turned into a credit fueled bidding war. The costs needs to cover expenses, not be an opportunity to extract money by scarcity. If standards are being pushed to high then more educational resources should be brought to the table.
* tenure driving up costs needs to be terminated.
* Bankruptcy protection. If that happened then banks would not loan money for a PHD in art appreciation. They would not make a loan to anyone who could not pay it back. If they saw tuition getting too high, they would stop making the loans knowing the degree would not support the loan.


I am sure there is more. But you people who think creditors just give you a square deal when you sign you obviously are not a person of faith because even god hated usury. So does a rational atheist.

[cdelena]

Student loans programs have been (mis)managed for a long time resulting in gross distortions in tuition, attendance, and certainly financial decisions that have not generally been beneficial to society.

Reductions in the loan principal will cause an exponential increase in unintended consequences that will last decades. How many more government moves do we need to hurry the destruction of our society?