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Let the student loans be dischargeable. Let the lenders take the hit.
Most of these loans are federally guaranteed. If anybody is going to "take the hit," it will be taxpayers, not the lenders. Because of the federal loan guarantee, the one party who emerges whole from a student loan default is the lender.
That's why these loans are no longer dischargeable in bankruptcy, by the way. Too many delinquent student loan payers were throwing these obligations onto their bankruptcy dockets, all the while thinking that they were sticking it to the bank and nobody else would be financially harmed.
But that wasn't true, of course. The federal guarantee means the lender collects, and the taxpayer pays the tab. In defaulting, Little Denise the Deadbeat was actually sticking her parents and fellow citizens with the bill for her cherished advanced degree in Lower Sumatran Earwax Sculptures.
I have been predicting this for some time now. There are so many students buried in debt out there they will vote for whomever is promising the student loan freebies. It is an easy bargaining chip to force them to the polls. Notice Great Warrior Warren and 3-homes Sanders said nothing about the bloat in academia with all of the worthless majors out there and administrators working 3 hours per week making $200K+.
it's just another polarizing point that folks aren't willing to discuss and debate the actual merits/problems of what is going on.
When you sign on for debt, you do so with the expectation that you'll pay it back.
I think 90%+ of Americans would agree that folks with limited economic means should be able to go to college, better themselves, and pay loans back with the marginal increase in earnings.
if we did de-regulate or whatever to change the "student loan industry" to where the banks were allowed to issue loans to anyone and everyone, for significantly higher rates than federally-guaranteed mortgages, and then when a recipient defaults the banks turns to the government (us) and says "Pay up" ... that's a big problem that I also think 95%+ of us would agree on.
If we need to effectively take all the student debt in the free market, make them go to low subsidized rates in exchange for a guarantee, but not let it get discharged, maybe that's the way to go.
The point is no one made the individual's borrow for their education, banks shouldn't be "profiting" from college-worthy students from low socio-economic backgrounds, but kids have to learn they don't get to blow 4x a state-supported university rate and walk away.
No, I understand that banks can foreclose on a house, and that auto lenders can repossess a car. But as I understand it, people can discharge credit card and other unsecured debt in a bankruptcy. So if that's the case, students should be allowed to discharge their student loans, too. But the law says they can't. Why is that? I don't think it has to do with a piece of paper.
Seriously, the students aren't the only ones who need a good lesson here. The lenders desperately need one, too. Making those loans dischargeable would teach that lesson to both sides.
They are dischargeable if the filer can show the judge that paying is an undue hardship to the courts. It's rare to meet the standard, but it still happens for some people.
Wrong. That is still the student's fault. Picked an industry which is going to be automated? Your fault and your responsibility. Go get a job as a barista or telemarketer and pay back the entire loan.
Not disputing what you are saying. However....the banks have to take some of the risk here and that is the entire problem. The banks have NO RISK ! The taxpayer does. If someone took out $50K of loans and can't get a job in their field after a legitimate effort -- and is pouring coffee at Starbucks, I say that the $50K amount should be cut down. Maybe they should owe $30K instead. They certainly shouldn't owe nothing, but why should the bank get away scot free and still make all of their profit? If we tried something like this, you would finally see college costs start to decline!
Last edited by BeerGeek40; 04-01-2019 at 03:25 AM..
Well, it is a national emergency, that is something everyone has to acknowledge. There is a bubble that's going to burst, and it's going to get ugly. You can be upset all you want about the principle of the matter, and think that everyone who took on too much student debt should suffer the consequences. However, the simple fact as a practical matter is something will have to be done eventually, because this is going to have far more negative repercussions on the economy than people realize. There will probably have to be a partial cancellation, and we'll have to revamp the federal student loan system. We shouldn't be propping up these institutions, thereby allowing them to raise prices far beyond their market value, by allowing people to take out endless money to attend them.
Well, it is a national emergency, that is something everyone has to acknowledge. There is a bubble that's going to burst, and it's going to get ugly. You can be upset all you want about the principle of the matter, and think that everyone who took on too much student debt should suffer the consequences. However, the simple fact as a practical matter is something will have to be done eventually, because this is going to have far more negative repercussions on the economy than people realize. There will probably have to be a partial cancellation, and we'll have to revamp the federal student loan system. We shouldn't be propping up these institutions, thereby allowing them to raise prices far beyond their market value, by allowing people to take out endless money to attend them.
Exactly.
In spite of what AOC and Bernie want to do....."free college for all".....we are actually going to be moving in the opposite direction, with economic reality finally setting in, when these universities realize that the free lunch has ended.
Let's turn our backs on our European roots by discarding things like poetry, philosophy, and the arts.
That's what happens when the US K-12 public education system turns its back on actual academic education and chooses ideological indoctrination and SJW goals, instead. That choice, by the way, was made in the 1960s. I can provide more info, if you wish.
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