Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The pending student loan default debacle and the implications of it.
"So while the student debt crisis is nothing to sneeze at, it's not putting the country in danger of a systemic crisis, he says. "It's far from comparable," Aliaga-Diaz says. "That's basically the biggest misconception with this, whether it's a drain on the economy or not."
My Thoughts.
1. less money to purchase a home
2. Less money to purchase a car
3. less money to buy luxury items
4. increased crime rate and drug use
LINK
The pending student loan default debacle and the implications of it.
"So while the student debt crisis is nothing to sneeze at, it's not putting the country in danger of a systemic crisis, he says. "It's far from comparable," Aliaga-Diaz says. "That's basically the biggest misconception with this, whether it's a drain on the economy or not."
My Thoughts.
1. less money to purchase a home
2. Less money to purchase a car
3. less money to buy luxury items
4. increased crime rate and drug use
There is a wide variation in the debt load that students carry. The students who have jobs that reasonably match their debt load are fine. But if you borrowed $125,000 to get a BA in music, you're probably going to face some tough choices.
There is a wide variation in the debt load that students carry. The students who have jobs that reasonably match their debt load are fine. But if you borrowed $125,000 to get a BA in music, you're probably going to face some tough choices.
True....Dr's. frequently emerge from college with 6 figure debts. Many of them enter into state hospitals which i believe pay their debt down as part of their salary package.
True....Dr's. frequently emerge from college with 6 figure debts. Many of them enter into state hospitals which i believe pay their debt down as part of their salary package.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,585 posts, read 81,243,006 times
Reputation: 57825
Quote:
Originally Posted by ncole1
There is a wide variation in the debt load that students carry. The students who have jobs that reasonably match their debt load are fine. But if you borrowed $125,000 to get a BA in music, you're probably going to face some tough choices.
There are plenty of people that went to a decent but affordable college, got a sensible degree and paid off their debt in a reasonable time after starting a good job. Those that sought a degree without a career plan, or went to a school above their means are going to struggle.
more telling, credit cards are going delinquent the delinquency rates have gone up two qt. in a row. The last time was in 1st and 2nd qt in 2009.
The last time they stopped dropping and started going up was 2nd & 3rd qt 2007.
We are heading into debt default.
The difference is that almost anyone can get a credit card, including the college student with student loans. Since the recession crisis, he banks have tightened up the lending requirements, and there are no longer the huge numbers of people trying to pay a mortgage that they cannot afford and should never have been given. Still, according to that chart, despite 2 months with minor increases, the rate of credit card delinquency is still only a very low 2.17%, and better than 2013 & 2014.
Student loans are not like houses. The value of the education is not quantifiable - there is no "value" of the degree that can suddenly drop and put the graduate "underwater" which is what happened with mortgages. Student loans cannot be discharged in bankruptcy which is bad. However, there are legal caps on how high a percentage of one's income can be garnished to pay for them. Also, there are numerous income based plans that stretch the payment over 25 years that makes even a relatively large amount of student loans at least doable for most people.
College costs are completely out of control, but we are too divided as a society to do much about it.
I expect what will come down the pike are 25 year payback plans that ultimately work out to the student paying back the principal over a very long, low payment, the rest gets forgiven. That kind of plan already exists.
Average student loan debt is today, $35,000. Let's say it rises another 7% per year, that would make it 44,000 by 2020. Paying back 44,000 over 25 years would with a 1% interest rate would be about $165 a month. Most kids can handle that, even with the crap service jobs they're likely to get. The interest will pile up but we'll just have to forgive it or have a very low interest rate - as I mentioned 2% or less. With the attention Bernie's been getting, the youth are clearly upset about it and low or practically no-interest loans are effectively the only way we will deal with it. I guarantee a Democratic administration, whether it's Clinton's or whoever comes after Trump will propose that student loan interest be capped at 1.8% or something. With college continuing to get more expensive, that will be the only way to finance it.
The way to deal with it would be to make college itself more affordable but we don't have the wherewithal as a country to fix that.
Last edited by redguard57; 03-02-2016 at 12:37 PM..
Student loans cannot be discharged in bankruptcy which is bad. However, there are legal caps on how high a percentage of one's income can be garnished to pay for them. Also, there are numerous income based plans that stretch the payment over 25 years that makes even a relatively large amount of student loans at least doable for most people.
College costs are completely out of control, but we are too divided as a society to do much about it.
I expect what will come down the pike are continued 25 year payback plans that ultimately work out to the student paying back the principal, the rest gets forgiven. That kind of plan already exists.
You need to remember that private student loans do not provide these flexible repayment options. Those borrowers, if they earn too little relative to their debt, are royally scr**ed.
You need to remember that private student loans do not provide these flexible repayment options. Those borrowers, if they earn too little relative to their debt, are royally scr**ed.
I expect that in the future those private student loans will be either eliminated or highly regulated.
Some sort of bailout - reduced repayment and then forgiveness, for that smaller number of extremely distressed borrowers will go through.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
