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You guys are making a political matter out of an economic one. Not even the president and all of Congress have the power to manipulate the economy or unemployment rate at will.
The current economic climate is the culmination of many many years worth of policies and our economic system.
I doubt that anyone could point to a single reason (foreign wars, offshoring and the economic rise of Asian powerhouses, regulatory capture, disparity of wealth & income, etc).... and I doubt that any single individual policy will pull us out of our current slump.
In high school we should teach kids to start their own business so they can survive without a job. As jobs become obsolete we do a huge disservice to our kids by pretending they just need to prepare for jobs and spend their time after graduation trying to get one. Our blindness makes them blind, and leaves them sitting ducks to misfortune. Only the brightest can see reality through all the illusion and misunderstanding. You have to see reality to take advantage of it. It gives them a bright future if they see it clearly.
What do you mean? Not everyone can just up and start a business.
Maybe it should have read that student debt and personal debt have equal economic drag on those that intend to pay. For the scofflaws, who think paying back a loan is optional, a debt that is subject to being taken through wage garnishment, would be a drag.
Clearly student debt is a greater drag for those who are paying involuntarily because the indebtedness necessarily skyrockets. (My goal is to use "necessarily skyrocket" at least once in every post.)
Today it makes zero sense to be a student loan scofflaw because the financial cost is astronomical. I would be thrilled to have and to exercise the opportunity to make voluntary payments of an equal amount than to have the outrageous fees tacked on indefinitely. Would I pay voluntarily? Absolutely; now I have the capacity to do so.
I have not seen any recent data on this but I would imagine that today's typical student loan defaulter really is financially distressed or else mentally ill - it's just not rational to not pay if you can pay.
Clearly student debt is a greater drag for those who are paying involuntarily because the indebtedness necessarily skyrockets. (My goal is to use "necessarily skyrocket" at least once in every post.)
Today it makes zero sense to be a student loan scofflaw because the financial cost is astronomical. I would be thrilled to have and to exercise the opportunity to make voluntary payments of an equal amount than to have the outrageous fees tacked on indefinitely. Would I pay voluntarily? Absolutely; now I have the capacity to do so.
I have not seen any recent data on this but I would imagine that today's typical student loan defaulter really is financially distressed or else mentally ill - it's just not rational to not pay if you can pay.
I used to be in the student loan business.
I can absolutely confirm that the vast majority of those that have defaulted on the loan cannot afford to pay it back. I would guess that more than 50% cannot even afford the interest.
01-07-2015, 06:38 PM
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n/a posts
Quote:
Originally Posted by freemkt
1) Student loan debt is easier to collect than non-student consumer debt, e.g. studennt loan debtors can have wages garnished without going through court
2) Student loan debt is generally not dischargeable through bankruptcy while non-student consumer debt is easy to discharge through bankruptcy.
But those are balanced by the ease with which can restructure student debt or even suspend payment in times of economic hardship.
Very few loans offer that kind of flexibility. Try changing the repayment terms of a car loan or a mortgage. Try telling them you can't afford to pay for the next couple of months because you lost your job. Those things will not be easy and may not work at all.
Now do the same thing with a federal student loans. You want to pay over 25 years instead of 10? Call them up and it's done in under ten minutes.
I used to be in the student loan business.
I can absolutely confirm that the vast majority of those that have defaulted on the loan cannot afford to pay it back. I would guess that more than 50% cannot even afford the interest.
Why were loans made to individuals without some kind of collateral or ability to pay back the loan? Shouldn't there have been at least a co-signer to insure the loan would be repayed? Don't lenders have a fuduciary responsibility to those whose money is being lent? Aren't these usual and customary lending practices?
As someone who was in the business of making student loans, what are the answers to these questions?
But those are balanced by the ease with which can restructure student debt or even suspend payment in times of economic hardship.
Very few loans offer that kind of flexibility. Try changing the repayment terms of a car loan or a mortgage. Try telling them you can't afford to pay for the next couple of months because you lost your job. Those things will not be easy and may not work at all.
Now do the same thing with a federal student loans. You want to pay over 25 years instead of 10? Call them up and it's done in under ten minutes.
??? I'm not seeing the restructuring flexibility of which you speak. I live on a poverty level income and have been unable to restructure my student loan debt. My rent is astronomical and I cannot afford to move into ANYWHERE else because I cannot come up with the upfront costs.
Why were loans made to individuals without some kind of collateral or ability to pay back the loan? Shouldn't there have been at least a co-signer to insure the loan would be repayed? Don't lenders have a fuduciary responsibility to those whose money is being lent? Aren't these usual and customary lending practices?
As someone who was in the business of making student loans, what are the answers to these questions?
There was a time of irrational exuberance in which it was casually assumed that going to college would allow borrowers to earn enough additional income to repay the loans.
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