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The for profit schools average around a 22-23% default rate. Public university average around 11-12% last time I checked and non profit private schools are low at around a 8% default rate.
If you want student loans to be discharged easily like USA mortgages.
Than let's ask our foreign counterparts. How easy is it to discharge mortgage debt in Europe?
Discharging debt is handled a lot differently from country to country. And there are trade offs. Lots of trade offs.
When interest rates were in the high teens and up to 21 percent in the 1980's default rates at
professional schools was over 25 percent and above. We happen to be fortunate with low interest
rates now, but who knows where they will be 10 years from now....
YOU keep bringing up Europe. I could really care less what goes on there. If I wanted to transplant
myself I'd either be going to Slovania or New Zealand
Let's address what ails this country. Can't we ever just mind our own business
As a recent college graduate who is well on their way to repaying his debt, I was curious if we forgive all student loans, (1) what do you do for those who were responsible and paid their debt and (2) how does this stop the problem of crippling debt from happening again.
Is there maybe a compromise? ie could we maybe allow student loan debt to be discharged bankruptcy?
Bankruptcy sounds fair as does simply offering more cash student aid/grants so that students don't have to take out so many loans. I'd pay for it by removing a whole hell of a lot of schools from the list of schools where you can get student aid. No more for profit schools, if the tuition per year is over $X then no student aid goes to anyone attending that school, if it is religiously based and ignores science by not teaching modern biology/evolution or doesn't have strict accreditation based upon actual scientific standards than no student aid. If you want to send you kid to one of those schools then you can pay for it 100% out of your own pocket.
All the money saved from this could be redirected to students who go to schools which actually meet the standards and which aren't over charging. This would also provide a direct financial incentive for schools to keep their tuition costs down for fear of none of their students being qualified for student aid.
One thing I haven't seen pointed out.....a reason why they can not be forgiven in bankruptcy is that it is impossible to take away the benefit that the loans paid for, and it is an ongoing benefit. It's not a home loan where they can take your home. Not a car loan where they tow away the car, or get the tv's, etc.
If you do not pay back a guaranteed student loan - in most states and at the federal level
your professional license can be taken away or not renewed.
So if you have a profession that requires a license of any kind, and you default on a student
loan, without a license you can not work in that given field.
Most federal and state jobs will not hire you if you are in default of a student loan.
And if already employed, it is grounds for being fired.
So short of a fresh start in a bankruptcy court, a student who defaults wears that
scarlet letter through their entire employment at a financial detriment.
If banks do not want to take that risk, they don't have to. No one is pulling their arm.
They do it because they make money. Plain and simple.
I never said that students should not have to pay back their loans. As another poster pointed out
most students do pay back their debt.
However, if they can not, for what ever unfortunate circumstance,
they should be allowed a bankruptcy court just like anyone
that borrows money.
You can't just walk into a bankruptcy court and say I can't pay this. You have to show bank records,
pay stubs, expenses, etc. Why any different with a student loan?
You are not advocating the dissolving of our bankruptcy courts, are you?
What do you consider an "unfortunate circumstance?"
When interest rates were in the high teens and up to 21 percent in the 1980's default rates at
professional schools was over 25 percent and above. We happen to be fortunate with low interest
rates now, but who knows where they will be 10 years from now....
YOU keep bringing up Europe. I could really care less what goes on there. If I wanted to transplant
myself I'd either be going to Slovania or New Zealand
Let's address what ails this country. Can't we ever just mind our own business
Most of the students who defaulted even in the 1980s were from "proprietary schools"
Look at page 21. 80% plus of defaults are from for profit schools.
Guess what the schools were? Bingo. Beauty and vocational schools. Don't get lost in the message those in professionals schools defaulted with those high rates. You see those politicians want to cite those very few "rich" doctors and lawyers who defaulted to get their laws passed on student loans. It sounds a lot better to the public when you pick on professionals defaulting and group them altogether with the vocational and beauty school student default.
A politician can't just pick on a beauty school and tell the pubic we need to fix and tighten up school loan defaults because these beauty schools students are defaulting. It doesn't have the same type of buzz as singling out that rich doctor or lawyer who gamed the system and defaulted.
Moral of the student loan story. Think twice before you enter for profit schools. Go to a traditional university. Enter community college as a feeder if you can't afford it traditional university than transfer in. Be willing to move to find jobs.
That's not a bust by any means. Are you just reinventing definitions of economic terms? Or do you not understand economics at all?
Perhaps if you are one of those 47% not paying taxes, you should start paying your own share.
And the liberal attack begins. I don't care how much you attack... if you signed the dotted line for the loan you are the "responsible" to pay it off.
If you want to use the lack of jobs as an excuse, maybe next time you'll make a "responsible" decision in who you vote for. Now pay the consequences of "being cool"
And the liberal attack begins. I don't care how much you attack... if you signed the dotted line for the loan you are the "responsible" to pay it off.
I am not attacking you liberals. I'm asking you to defend your statement of the student loan bubble busting. It appears that you cannot defend it and that is why you keep deflecting.
Guess what the schools were? Bingo. Beauty and vocational schools. Don't get lost in the message those in professionals schools defaulted with those high rates. You see those politicians want to cite those very few "rich" doctors and lawyers who defaulted to get their laws passed on student loans. It sounds a lot better to the public when you pick on professionals defaulting and group them altogether with the vocational and beauty school student default.
A politician can't just pick on a beauty school and tell the pubic we need to fix and tighten up school loan defaults because these beauty schools students are defaulting. It doesn't have the same type of buzz as singling out that rich doctor or lawyer who gamed the system and defaulted.
Moral of the student loan story. Think twice before you enter for profit schools. Go to a traditional university. Enter community college as a feeder if you can't afford it traditional university than transfer in. Be willing to move to find jobs.
I encountered an American guy in Iraq who was proudly displaying his $52,000 Associates Degree from a "for profit" school (ECPI). He was immensly proud to be a college graduate, but also acknowledged that he was forced, financially, to seek work as an overseas contractor because of the stupid amount of student loans he owed for that degree.
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