Taking the contrarian view, how much of that is just bad spending habits vs using it to live/augment income?
Another contrarian view, how come people can’t get a second job or better job with more money?
I just would like to see more personal accountability. I don’t understand why the taxpayer needs to absorb these loans when the individual took it out on their own assuming it wasn’t predatory or illegal.
The government should simply stop protecting student loan debt from being discharged in bankruptcy. Then lenders will have to take responsibility for their lending actions, universities will have to lower tuition due to less "free" money, and students will have to be more careful with what field they choose.
Obviously students shouldn't be pursuing degrees that won't result in a well-paying job, but the lenders are still partially responsible. After all, if you ask a bank for a business loan with a stupid idea, the bank won't give you money, because they know they'll probably lose it. I don't know why it's different with education.
You realize that in the overwhelming majority of cases, "lenders" means the federal government? In other words it's going to be the taxpayers who will be suffering the losses, not some wall st bank.
Mind you a lot of people still aren't paying, and we've already had deferrals. It doesn't matter if "XYZ owes $100k" is on the books if it's never going to get paid. We may as well formally eat the losses now, because we're already doing so unofficially. It's the only way to actually move forward.
The government really has no business playing a role in financing consumer debt, whether we're talking about students loans or mortgages. The fact that the government does finance loans artificially decreases the perceived risk of the loans because its reasonable to assume the government just won't let the loans fail.
Every so often, politicians re-invent the facile idea that Art degree bad, BioTech degree good but it’s the long tail of junk Universities that are the real problem.
I know someone from Goldman Sachs with a degree in Anthropology, a barrister with a degree in Norse History, and a COO with a degree in Sociology*. They have all had extraordinarily high flying careers that are seemingly unrelated to what they read at University until you know they went to Harvard, Oxford, and Cambridge.
Maybe those are too exceptional though? Should we shut down the worst schools, accept that you can study anything at the best schools, and then insist that everyone in the middle study only Economically Important, vocational subjects decreed to be Of Use by the technocrats? Seems a bit bleak.
*Gender Studies, no less, a favourite punching bag of the ignorant.
Yes while were at it, we should somehow address the nepotism network effect of universities
There's something very sick in pretending the value of the degree or the institution is related to success when it's really just how much those things let you access people connected to capital
Especially since you have to have access to capital to even attend such schools, with few exceptions
This would mostly mean the end of student loans entirely. I don't disagree with the approach, but we should be aware of the tradeoff.
Hell most job posting for our field requires a bachelors even though you can completely learn it online
Students don't need fancy rock climbing walls and tuition funded orientation parties, and they certainly don't need armies of administrators and deans. They can learn a semester's worth of knowledge for $100 in supplies (if that!), a living wage for professors and TAs, and room and board.
Citation needed. I’d be shocked if the large majority of people taking out student loans aren’t over 18. And even if they are 18 when they take out their first one, they’re well over that as they continue to take them out for years.
That isn’t to say they aren’t predatory. But you don’t need to fudge the numbers to make your point seem stronger.
On another note, if anyone should be answering for these predatory practices it’s universities, not tax payers. They abuse the fact that student loans are government assured by upping tuition to absurd rates. Fuck them and their greed. Punish them for it, not everyone. I made it through college by going to a cheap university and working. My degree doesn’t carry the weight of someone who went to an absurdly expensive school, even if we got the same degree. Now I’m expected to pay for their degree after already paying for mine? Fuck that.
This is basic market economics and something that everyone predicted would happen. If you think that somehow colleges are going to be the moral exception then I'm sorry it's just not happening.
This is squarely on the government for making student loan debt impossible to get out of. Its caused a gross cycle of stupid practices and serves absolutely no good.
Forcing full repayment is absurd, and known to be by just about every reasonable person who's looked into the economics of loans. We figured out debtors prisons were also stupid a long time ago. There's plenty of alternative measures, and the whole reason things like bankruptcy exists is because we recognize it's better than financially nuking someone.
Or do you think we should also make medical debt unforgivable since you can't rip the kidney back out?
There was a period of time, from 1945-1974, when the population did not largely rely on student loans (which were introduced in 1965 via Title IV if the HEA act) because they were both harder to get and had stricter rules on how they were marketed, they simply were not prevalent.
Yet, in this era of tax funds actually funding most university educations, many of those same “bullshit” majors existed and people graduated with them, and yet the entire world didn’t spin out of control and people didn’t suddenly have an inability to pay their debts or otherwise struggle simply based on their major choice.
I posit then, that the issue at heart isn’t the chosen major so much as the system in which university students largely exist in, which has become financially predatory to both students and their parents
Millennials were encouraged to take on these loans on the principle that their high-paying jobs would make the debt service affordable, and that if they didn't take on these loans they'd end up as homeless drug addicts. When those jobs didn't pan out, there was no plan B. The world changed between when the decision to take on the loan was made and when the loan started to become a drag.
It has little to do with bad spending habits or adult's mismanaging their finances. An entire generation is paying for mistakes they made as teenagers, which legitimately seemed like a great idea at the time. It's not because millennials are bad with money. The world changed and millennials were left holding the bag in this case.
The ones who make HN wages paid off their loans a long time ago.
This was, intentional or not, a systematic selling of this generation to a 21st century version of indentured servitude, kneecapping a cohort of young adults who got to join the workforce during one of the worst economic downturns in US history and, during what would have been their prime earning years, a global pandemic which flipped industries on their head and displaced workers in a way we have never seen before.
The people who say “I didn’t get loan forgiveness why would you?” are just horrifically out of touch with the rapid rise in cost of education. While they could support a full time credit load with a part time job, the only way to support a college course load after 2004 is literally having cash to pay for the course load up front.
The entire system that led to this is farcical and belongs in a comic book along with the “fuck you I got mine” crowd because of how hilariously evil it is.
I would expect a socialist to be onboard with cancelling student debt though. They'd just want it to be part of the government taking over education more completely. Schooling wouldn't be something one pays for at all because the government would be responsible for providing it (and deciding who has access to it).
https://en.wikipedia.org/wiki/Marquette_National_Bank_of_Min....
Nowadays “it’s bad for the economy” seems to be a reason not to do something, so reigning in the credit-based nature of everything probably isn’t going to happen.
"Nowadays"? When was the economy ever not a consideration when it comes to public policy?
Introducing credit card interest caps, or really doing anything to curb credit card use, would almost certainly have a negative effect on consumer spending and is thus a political death sentence for anyone trying to make that happen.
Because too many of your fellow citizens are spinning in what are basically poorly-written click-jack javascript infinite loops, and those loops are eating too much of our collective cpu time.
If you click "stop," their time/money is freed up to do something else. And compared to paying eternal interest on a degree that didn't lead to a decent job, literally anything else they do with that money is more useful. And since Americans suck at saving, it's incredibly likely that money will immediately get spent directly back into the economy.
If you click "continue" and hope something useful comes out of these loops' cycles, it's difficult to see that as anything but a sunken cost fallacy. Adding the phrase "personal accountability" doesn't really change that.
How much of it is trying to maintain a standard of living they've had their whole life in the face of rampant inflation and insane housing costs?
Anyway the largest employer in many states is the university system. It’s taxes that flow through loans back to taxpayers.