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shrug. I'm in a catch-22 where a student loan garnishment is leaving me at poverty level and literally unable to escape my dysfunctional living situation by moving into some other place. I don't have and can't get a written rental agreement here so I cannot prove my living expenses to reduce my payments.
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.
LOL. But until you were forced to, you weren't willing to pay back that student loan.
NO student loan is involuntary. You took out a loan, agreeing to pay it back. No one forced you to take out that loan.
It doesn't matter if you are too financially distressed to pay the loan back. You agreed to do that, and you must. The theory of that loan was that the education gave you an education that enabled you to get a decent paying job, and therefore you had enough money to pay the loan back. If that didn't happen, it's not the lender's fault.
All loans are a drag if you don't pay them back. All come with interest and penalties. You can include property tax in that. You go on and on about homeowners having such a great leg up thanks to the government. So I guess if that homeowner can't pay their taxes because they are financially distressed, and their tax bill necessarily skyrockets, they can just not pay?
??? 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.
I don't think you're the typical case. Your loan is 30 years old. You've moved beyond "unable to pay" and into the realm of "unwilling to pay" in their eyes.
LOL. But until you were forced to, you weren't willing to pay back that student loan.
NO student loan is involuntary. You took out a loan, agreeing to pay it back. No one forced you to take out that loan.
It doesn't matter if you are too financially distressed to pay the loan back. You agreed to do that, and you must. The theory of that loan was that the education gave you an education that enabled you to get a decent paying job, and therefore you had enough money to pay the loan back. If that didn't happen, it's not the lender's fault.
All loans are a drag if you don't pay them back. All come with interest and penalties. You can include property tax in that. You go on and on about homeowners having such a great leg up thanks to the government. So I guess if that homeowner can't pay their taxes because they are financially distressed, and their tax bill necessarily skyrockets, they can just not pay?
As you read in a different post, I had been making student loan payments for years until I maxed out the credit cards I was using to make the payments. so clearly I was willing to make those payments for some time.
Sadly there is a vast surplus of college graduates competing for a limited number of good jobs; Money magazine noted in 1991 that one-fifth of college graduates were working in jobs for which no post-secondary education was required. In 1992 the magazine projected that by 2000, one-quarter of college graduates would be similarly underemployed.
Student loans were falsely premised on the idea that going to college was a ticket to a good income; today we have the experience oof millions of underemployed graduates to demonstrate the fallacy of that premise.
I don't think you're the typical case. Your loan is 30 years old. You've moved beyond "unable to pay" and into the realm of "unwilling to pay" in their eyes.
Show me where I have the capacity to pay. I paid when I was able - before rents necessarily skyrocketed and I went down the credit card road - but only the government thinks I have the capacity. And we know the government is often out of touch with reality.
I find it ironic that I would have capacity to repay in a better living environment (where i could earn more money) but government has no flexibility to allow that.
On the subject of textbooks, there are also fewer options than there used to be. Even just 2 years ago, I was able to rent most of books or buy them used. Now, I'm averaging $300-500 per book, with no used or rental options. I can't even buy them from a cheaper source because they don't supply the access code needed to do the online assignments. Meanwhile, I sell back my $300-500 book at the end of the semester and get only $80 for it, no matter how good the condition.
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Originally Posted by GraduatewithDebt
This is not to offend anyone, but from my personal experience, a lot of people are completely detached to the reality of what higher education costs these days. Especially since the federal government has been backing these loans, increasing loan amounts, and Universities have used it as a free pass to jack tuition up to astronomical levels.
Just to give you an idea, just this past year my parking increased by $100 per semester, "fees" increased by about $300 per semester, tuition increased by 12%, textbooks for each class averaged $235. And those are just the basics, and these increased are occurring annually. Older people are shocked when they hear about these price increases. Unless you are actively involved in the scene, it is difficult to grasp how expensive higher education has gotten.
Are you a graduate student in math? If so, do you know whether most of the standard books are now this expensive (the standard texts on analysis, algebra, topology, etc)? I see that Real Analysis by Bartle is now $250! Even Linear Algebra by Hoffman and Kunze is now over $150. Aargh and good grief . . . Thanks!
Such a metric is useless and doesn't tell us anything that wasn't already available in the data it was calculated from.
Now if we actually tried to measure misery, it would mean something. But this index is calculated by effectively pre-supposing how much student debt, unemployment, etc. contribute to misery.
In this sense the index just begs the question against the position that these economic factors don't, in fact, lead to that much misery.
You think it doesn't? If I had graduated from college now, instead of 18 years ago, I would be a lot more miserable, as would my classmates. I got a good job coming right out of college. How exactly does one measure misery? There are many ways, but economically is a very useful way to go about it. Misery is a qualitative, instead of quantitative, characteristic to measure.
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Originally Posted by eccotecc
Why is this metric useless if it is used as a barometer for future economic growth? A prudent person might look at this metric as an important economic indicator.
I guess you're correct that misery means different things to different people. Some may want to take the data one step further and try to evaluate what the quality of life issue is and will be in the future for 18-24 year olds. How long should a young adult live at home after high school? How long will it take for a young adult to be debt free after graduating from college? Do current college graduates come out of school with the skill sets necessary to find meaningful employment that pays a self supporting wage? If a young adult were to stop and think about their short and long term future, they could be discouraged and miserable.
Great post. There are many ways to measure misery, and a huge factor for young adults is their ability to live independently from their parents. The main way to live independently from one's parents is to be able to support oneself financially. If the student graduates from college saddled with a lot of debt and no decent job to pay off that debt, or even daily bills, their ability to live independent lives will be severely hampered.
And what of the student's ability to get married or have kids later? If he/she isn't able to support him/herself, the student sure won't be able to support a household. Thus, discouragement and maybe feelings of depression will follow. All of these normal stages of psychosocial development are delayed or even dismissed because the person feels he/she cannot take care of him/herself, and a lot of the problem is not the student's fault. Outsiders can blame college graduates all they want, but I believe a lot of their financial problems are caused by increased automation, job outsourcing, the lack of pay increases comparable to the rise in cost of living, and the very high cost of education here. It is ultimately an educational/business model that will fail, and is failing now.
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