Student Bailout? (fast food, dollar, high school, economy)
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First - Congratulations to those of you that understand that it is NOT the Fat Cat Bankers that is "getting rich" on College Loans. The US Government is getting "rich" off of these college loans and they passed that Law to Fund ObamaCare. Lizzie doesn't mention that little fact and it's almost never mentioned in the Media at all.
I have seen her address it. She complains that the government is make money off students but then turning around and handing it to Wall Street.
I understand that complaint. We should do neither but it shows why we shouldn't.
Yep, people with student loans will become political cannon fodder because every year there will be a student loan fix to keep their rates at 3.4%. On the bright side our leaders will make sure they are locked in and the interest rate will never rise. Just like my house. Just like clock work every year there will be a doc fix and the student loan fix.
I love people that treat the government as a cornucopia of money. Let's state a student loan bailout for what it is; taking money from people that have earned it and giving it to a specific subset of the population. Doesn't sound so likable when you don't hide it behind smoke and mirrors. As for stating the one group should get money because some other group did - sorry bad idea. That is like saying that since one mugger stole money from you that the other muggers should also get a chance to mug you.
Instead, let's do something to fix the system and not just make things worse. The current system encourages universities and colleges to get as many graduates as possible. Since the government is backing the loans, there is very little risk to school. The school gets paid whether that degree is worth anything or not. The government backing of the loan breaks the feedback from the economy on what degrees should be produced.
Instead, how about having the Universities hold the loans and remove the bankruptcy protection. So what would happen: first the schools would cut back on administration to degree programs costing tens of thousands of dollars that are only used in jobs making $30,000 a year. Second, those $30,000 a year jobs would have a shortage of applicants. This would cause upward pressure on the salary. In time the cost of the degrees would balance with the amount of the job potentials. University would find ways to produces quality degree at less cost. The end result is a better yet cheaper education system.
Yep, people with student loans will become political cannon fodder because every year there will be a student loan fix to keep their rates at 3.4%. On the bright side our leaders will make sure they are locked in and the interest rate will never rise. Just like my house. Just like clock work every year there will be a doc fix and the student loan fix.
I realize this isn't your point, I'm just taking over your point to ask my question.
Why should students be charged 3.4% (with the government arguing for far higher rates) while Wall Street is charged less than 1%?
How did people run up all these huge student loans?
In my day you went to the state U or your local community college or something else that you could afford. If you were lucky and smart, maybe you got some scholarship help.
Those options are still available.
So why go out and borrow $200K to attend some fancy schmancy place that is clearly beyond your means? If you do, that's your choice and you can't expect to dump that cost back on the rest of us.
Because a single class and the needed supplies today can run the gamut of 700 dollars, even at a community college. I shudder to think of what they cost at the university, or what a more intensive class costs. Also, even though the administration does practically nothing all day long, they'll be the next to get new offices after the university gets done shuffling out millions for a new football stadium.
Quote:
Originally Posted by shiftymh
Not unless I'm getting a refund for the student loans that I paid off.
You really can't judge the choices people make unless you understand the alternatives they had (or believed they had).
The cost of higher education has increased much faster than the overall rate of inflation. It has, in fact, risen to astronomical levels. This happened even though wages for the vast majority of Americans have been flat for more than a generation.
At the same time, financial help for students trying to finance higher education has been severely curtailed. Add to this the fact that having a degree is now required to get even many low-level jobs.
The result: a massive private student loan industry arose. But unlike government loan programs, whose main purpose is to keep money in the pool for other students, private loans are made for profit. The purpose of private student loans to is NOT to allow students pay to back the loans. The terms of the loans make this nearly impossible. The purpose of private students loans is to keep college graduates paying. And paying. And paying. All their lives.
Student loan debt is not like other debt. Student debt is not dischargeable through bankruptcy. Most of the collection practices that are banned in most debt collection cases are permitted in the case of student loans. Wages can be garnished. Employers can be harassed. Property can be seized. It is almost impossible to escape students debt unless you are dead or permanently disabled. In some cases, lenders have even gone to court to try to make the parents of students who died keep having to pay!
In short, the private student loan industry is nothing but a giant criminal enterprise. It is no better than the mafia. And if nothing is done bail out the victims of this legal mafia, if they are permitted to default on that debt, the resulting economic devastation could make the crash of 2008-2009 look like a hiccup by comparison.
I love people that treat the government as a cornucopia of money.
You know that tends to happen when trillions are created out of thin air , so we can invade Iraq and bail out Wall Street. People start asking questions about where the money actually comes from.
Why should students or Wall Street be charged less than 1% and EVERYONE else has to pay higher rates?
students pay artifically low rates because education is a public good
wall street pays artificially low rates because some idiots think it boosts the economy. (it does, if you think nominal GDP is "the economy.")
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