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I'm really disgusted by some of the attitudes here. I agree that greed from banks and other big corporations is a huge problem, BUT the sense of entitlement most people seem to feel is also to blame. It really doesn't matter what someone ELSE does. YOU took out a loan. YOU signed your name on the dotted line with a promise to repay that loan. Ultimately it really doesn't matter what the banks do or don't do or how corrupt you think they are - what someone else does isn't a free pass for you to not honor your promise to pay back that money. I'm not trying to be the morality police but if you borrow money, if you charge money on a credit card, however you get and spend money you do not yet have you are doing so with the knowledge that one day you will have to pay it back. Spending attitudes are ridiculous. People go out and get thousands of dollars into debt with student loans, buy houses that they can barely afford, charge up their credit cards, and then whine about how unfair things are when they have to pay that money back. What ever happened to personal responsiblity? No one is forcing anyone to take out loans for college. If you don't like the thought of having to repay that money then don't go to college. Simple.
The banks? Taking a loss on student loans will consume their capital and provide them with less resources to lend to businesses, homeowners and consumers buying on credit which all amounts to less jobs created at a time when the economy remians weak. Ultimately it hurts the ordinary people so not a good idea.
People go out and get thousands of dollars into debt with student loans, buy houses that they can barely afford, charge up their credit cards, and then whine about how unfair things are when they have to pay that money back. What ever happened to personal responsiblity? No one is forcing anyone to take out loans for college. If you don't like the thought of having to repay that money then don't go to college. Simple.
Also note that student debt seems to be rising even after the mortgage crisis of 2007-2009 - meaning that people are still getting into debt despite knowing the perils that hit homebuyers during the past decade. Looks like simple lessons are hard to learn.
You fail to understand that there exists two sets of rules in society. Why should I pay for their debts and my own as well? I am not going to do it. If they had to repay theirs, then I would pay for mine, but I am not going to pay for both of ours. I am not going to be someone's tap dancing fool.
Has it occured to you, that if you don't pay your loans, others will have to make up your slack in the form of higher taxes and interest rates? It won't be the banks or companies that pay, but your fellow citizens. I fail to see how that gives you a claim to the moral high ground.
The banks? Taking a loss on student loans will consume their capital and provide them with less resources to lend to businesses, homeowners and consumers buying on credit which all amounts to less jobs created at a time when the economy remians weak. Ultimately it hurts the ordinary people so not a good idea.
The same banks that stole money from everyone in the bailouts, colluded to jack up interest rates which screwed everyone, the same banks that preyed upon people in the sub-prime market?
The banks do not care about your welfare. The banks do not create jobs. The banks manipulate wealth and do not create it. They only incur a net cost to the productive economy.
Works for me! They are the profiteers in this economy.
You realize, of course, that banks have traditionally not made any real money on student loans. In fact, student loans have typically been money losers for banks, what with the low interest rates and high percentages of default associated with them. That's why they're so heavily subsidized by the Federal government. Because, otherwise, a bank wouldn't take them on a bet.
Personally, if you borrow money and then skip out on the loan, you are scum. And for you to skip out on your debt using the banks as a rationale makes you a hypocrite. Because you're not sticking it to the bank. You are sticking it to the people who pay taxes. And that makes you just as bad as any bank seeking a bailout.
The same banks that stole money from everyone in the bailouts, colluded to jack up interest rates which screwed everyone, the same banks that preyed upon people in the sub-prime market?
The banks do not care about your welfare. The banks do not create jobs. The banks manipulate wealth and do not create it. They only incur a net cost to the productive economy.
This is totally beside the point though. You can accuse these banks of many things, but we still need them to lend money and to extend reasonable credit to consumers. There is no other alternative. Capital markets are too volatile and unreliable. Anything that impacts their capital structure hurts your fellow ordinary citizens in the end.
Why are student loans treated so differently? Shouldn't the loans(private) have bankruptcy protections like other unsecured types of debts?
If this was allowed, you and the rest of the public would be paying for it no matter what in higher interest rate. And besides the financial burden it puts on the rest of the public, the borrower still has his/her education and degree (assuming they graduate) if they file for bankrcrupcy. It's not like a bank can take away his/her education or degree away even if they were allowed to file for bankcrupcy.
If one signs the promissory note in good faith, one should be responsible enough to pay it back.
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.
A couple of points to make.
For one, student loan debt reaching $1 trillion in may, 2012, is not as big of an issue as people like to make it out to be. It amounts to 1/10 of the amount of mortgage debt that exists. Total annual student loan debt payments account for 0.4% of our nation's GDP.
The real problem is this: how much of that debt is larger amounts for 1 individual? We have to remember, the average debt for a 4-year graduate is around $24,000. That's manageable for most people, though it will impact their economic activity for the first couple of years out of college. But as that amount increases depending on which individual we're looking at, now you have people putting off marriage, starting families, buying houses, etc.
The amount of Federal Student Loans held by the Federal government accounts for about $455B as of February, 2012. This excludes both Federal loans held by private lenders (such as Sallie Mae, Citibank, etc.) as well as private loans held by private lenders.
The Federal government could, in theory, forgive the $455B in loans held by the federal government. I don't see why this would be any different than when the Federal government performs a special kind of "stimulus" like when George W. Bush sent an $800 check to any family making under a certain income, or when Barack Obama instituted the "payroll tax holiday" giving us all a 2% tax break on our social security income tax rate.
For me, my federal student loans account for $91.48 of my monthly payment amount. Forgiving them would be great, and I would absolutely spend that $91.48 and inject it back into the economy. Someone who is making less than money would be able to spend it for certain. I could see the argument for forgiving the loans as a "stimulus" program.
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