Student Debt Burdened Them, So They Moved Abroad and Stopped Paying
nytimes.com
nytimes.com
Which is dumb, because you only have to pay off the debt if you are able to, interest rate is very low, you can pause it for a few years and after 35 years the loan is automatically forgiven. It's not a big deal. Completely uprooting your life to skip out on a €50/month payment is insanity but people see that €30,000 number in their portal and freak out about it.
Approximately 25,000 emigrated debtors are currently untraceable by the student debt collector.
It is a bit weird that they let universities levy indirect taxes but its not really bad. Imagine if instead of property tax you have government property loans and the interest of those loans was instead of property tax, I think that wouldn't be a bad system.
I would say that is pretty serious violation of human rights, for relatively small infraction. Soviet countries used similar system to prevent people from leaving their communist paradise.
How are you supposed to pay your debt, if you are not allowed to find new job abroad?!
in which direction? headed south or back north?
Going North into america I'd say the majority don't have passports and they are let through anyway. I actually have a legal US passport and I watched myself detained, jailed, and interrogated while everyone without a passport was let through with a birth certificate and state driver's license (this is modern times, not the days when that was all you needed). So maybe it is worse to have a passport as it's suspicious as most people at the lesser land crossings do not.
I don’t think it’s that hyperbolic. But I agree that the existence of debts shouldn’t invalidate one’s right to a passport.
(The counter argument is that passports are a privilege and citizenship a bundle of privileges and duties. Why should the country have the burden of passporting someone abroad who as abandoned it.)
"Everyone has the right to leave any country, including his own, and to return to his country."
Passports shouldn't be a privilege, and violation of the universal declaration of human rights is pretty serious.
No, it isn’t. It isn’t even legally binding. (And obviously couldn’t be. It would invalidate incarceration and conscription, for example.)
They don’t.
Wouldn’t one applying for a passport involve the government and person connecting on some level?
The average medical student is around €50,000 to €60,000 in debt.
Risk premium is on top of the other bits.
Based on the other comment, they absolutely reflect that.
edit: Yeah, that other comment is talking about European rates, not American rates.
https://studentaid.gov/understand-aid/types/loans/interest-r...
6.39% to 8.94%, and that's for Federal. Private ones tend to be even higher.
7/1/21–6/30/22 3.73%
7/1/20–6/30/21 2.75%
7/1/19–6/30/20 4.53%
7/1/18–6/30/19 5.05%
7/1/17–6/30/18 4.45%
7/1/16–6/30/17 3.76%Private student loans are similarly protected from bankrupcty, and don't have things like income-based repayment; they are, if anything, safer for the lender. https://studentaid.gov/understand-aid/types/loans/federal-vs...
[1] https://home.treasury.gov/resource-center/data-chart-center/...
Doesn't mean their pricing is that reasonable, or that funding education should be run this way in the first place. It just means there are big barriers to entry, often established by the existing players to protect their margins. The Fed rate for student loans should be lower.
What are the barriers? Can I make non-dischargeable student loans at 5%?
I know I’d be completely uninterested in such an investment pitch. It would work better as a charity ask for me.
If it’s safe I can leverage it.
> get on a 10 or 30 year federal bond with more risk associated with it
5% is 10 bps over the 20 year. Not a lot. But I picked a round number. Point is why couldn’t it be undercut? If it can’t, easily, it’s correctly priced.
Loans to private persons are very unsafe, for example they can move abroad and just stop paying as the article is talking about. Every person doing that raises interest for everyone else.
Lots of startup capital?
So essentially governments build trust with banks so those banks can issue fiat currency. Then those banks build trust with people like you so you can use the bank to issue fiat currency. Its the same system, bank pay interest to central bank for doing that and you pay interest to the bank.
If you mean why you can't get money from the central bank? Its just that you haven't built trust with them. But you can do so indirectly by taking a loan from your local bank, and that trusted middleman takes a fee for it.
Loan forgiveness happens after 35 years so for most academics that is about 10 years before retirement. Forgiveness also happens upon death.
Bankruptcy is a bit different here. We have a program where someone manages your finances for about three years, and after that most remaining debt is forgiven. However, student debt is an exception, that one stays
Comforting I'm sure. But it wasn't always that way:
"Six years after the death of Christopher Bryski, a 23-year-old student at Rutgers University, Key Bank has agreed to forgive his student loan. But Bryski's family is not stopping there: It's now fighting to change the laws in the hope of sparing others the trauma it endured as lenders continued to hound it for payment on its dead son's debts."
And it might not be mandatory:
"But it is guidance, not law, and it does not cover creditors collecting their own debts, as they are not covered by the FDCPA (Fair Debt Collection Practices Act)," she said.
https://abcnews.com/Business/bank-forgives-dead-students-loa...
Businesses do this ALL THE TIME. Businesses can do this, and will walk away from debt the second when the math makes sense. If it's okay for businesses, then the exact same behavior should be okay for us humans to do. I walked away from my house at the height of the financial crisis. It was a business decision, because the mortgage was far larger than the value of my house.
Student loans are the only reason why tuition has gone up 10x in 30 years. Every financial entity from banks to schools feel like it's okay to hang students out to dry with large debts because they will have to pay for it for the rest of their lives. I hope a large portion of the debt disappears because the students simply walk away from the US.
Investments don't always work out, tough luck. That's obviously not the same as buying a sandwich.
If you are in a casual agreement with a friend and don't keep up your end then it's immoral.
If you have a contract that specifies expectations and consequences, then it's just a business deal.
The (predatory) school loan business works from contracts and they are obligated to keep up their side only as much as you are yours.
The real immorality is not accepting the consequences embedded in the contract to which you both agree to, it is that the United States has such a business in the first place.
Well actually second place I guess. When the student loan business started it was not predatory. But it got horribly abused, by the borrowers who would declare bankruptcy gaming that system, schools who raised rates because they knew loans were available, and the lenders who astroTurfed children into believing that it was a good bargain to exchange $200,000 at high interest for a Art History degree
― Abbie Hoffman
For example you should never ever vote on politicians that waste tax money. Some countries do that, but USA is not one of them since Americans thinks its moral to steal from the government so they don't blink an eye over every president using millions on his own or his wifes personal projects. "I'd also do that if I was the president" is how that gets perpetuated, you have to stop voting for any such candidate and only vote for those that promises to put an end to it. That would mean voting third party, but...
Bad countries are made when people let other people break the rules with impunity.
If the legal system fails to stop bad people from breaking rules it's up to us to stop them.
And we can't outright use force like the state can, so that means using subtle means of degrading their ability to break the rules.
$60 a month for 20 years, and then the debt is forgiven doesn’t sound burdensome at all. Perhaps if she doesn’t return to the US it won’t matter, but it seems a small price to pay monthly to make returning to your home one day a whole lot less stressful.
Plus the threat that a hostile administration might come in and change who qualifies for IDR at any point, which just happened and is causing a massive spike in defaults.
https://www.dailymail.co.uk/news/article-15705545/New-York-T...
The system is working exactly as intended. Debt and healthcare are just ways we are bound to it.
Perplexing.
Why not pay your debts then? I totally understand debt forgiveness for extenuating circumstances (and imo, it's a crime that student loan debt can't be forgiven, and the interest rates are often predatory—especially in the case of med school and law school), but this just sounds like stealing with extra steps.
As I said, I'm a bit perplexed.
No mention of undergrad so hopefully she did go in-state for much lower or free tuition.
I have 2 kids in college and a recent graduate. I am routinely horrified by the choices that some students make in going out of their home state or to a private school instead of a public one.
But jokes aside, I'm curious too. Nothing there seems too extravagant, people move abroad all the time. Maybe it then takes them 30 years to realize they didn't have it so bad after all and move back. I'm not speaking for the US here specifically, but more generally. Those longer term stories I think are more interesting.
Say what? $60 per month is not that much!
Yeah no shit you just signed up for a lifetime of debt.
Reminds me of another story of some lady that got saddled with a couple hundred thousand in debt because she really wanted to go to Duke for a theater management degree. And then fled with her Russian fiance to Moscow so she wouldn't have to pay it.
We all agree that higher education is too expensive in the US. But these are not good examples of that.
Bankruptcy is good for entrepreneurial risk, but not for human thriving apparently...
But fleeing to another country and/or simply refusing to pay your debts, regardless of whether or not you are able to are is not bankruptcy. It's simply refusing to pay your debts.
If companies can do strategic bankruptcies, transfer pricing, etc., then regular people can do the consumer equivalents.
I don't think any of us should shill for corporate interests.
But if a company borrowed the money and never had the intention to make enough to pay it back or return on investment, we have a different word for that. That word is fraud. Just ask Elizabeth Holmes.
This incentive structure doesn't exist with student loans: student loans are unconditional, and with terms that don't take into account likelihood of payback.
So, this happens instead.
> [...] essentially would get a free education.
How horrible, imagine the world.
When the bank is giving you a sub-prime loan, who is more sophisticated in that transaction?
If the bank (with their fancy risk models, etc.), why shouldn't they be the party to take the bulk of that risk?
Student loans are guaranteed by the federal government. That is not the same thing at all.
People become absolutely psychopathic about these sorts of discussions, and become heartless, soulless goblins. Even people at the bottom of the socioeconomic ladder will desperately line up to show how good of little corporate bootlicking subjugates they are.
It's ageism and exploitation of youth.
The ledger is never getting paid off because it doesn't exist as anything more than allegory.
We can pay it off with allegory too if we must walk through such incantations for the semantics police.
What a joke of a culture to validate the ramblings of Abe Simpson.
Good in these students. Live anywhere else until America becomes less of a shit hole country. Even if that means dying never stepping foot in the US again.
I'm eligible for dual citizenship and am in the process of acquiring my second citizenship.
My reasons are two-fold:
1.) I've fallen through the cracks and ended up in a situation the system did not account for. I had a medical incident during my last semester of graduate school that turned out to be a presenting relapse of Multiple Sclerosis. Obviously I couldn't have anticipated this when I went to undergraduate and graduate school. The problem comes in in that the system treats disability as completely binary: Either you can't work at all/can work so little you can't earn more than 1600/mo, or they assume you're fine and can pay everything off. I can work, but I can't work in the field or to the level that I planned for before I got ill. In addition, I have expenses working full time that an able bodied person doesn't just to allow me to do that full time work and that aren't considered in the income based payment calculations. So I fall in the hole of 'make too much to be considered disabled, but not enough to actually pay' due to a condition that is incurable. Also, I have a special Medicaid exemption that allows me to earn more without losing healthcare, but not enough to actually pay back my loans. So even if I could get and maintain a job that would pay a salary that would let me pay, I'd then lose my healthcare and I'd hit the out of pocket maximum every year on any private plan, resulting in a substantial decrease in actual salary.
There's functionally no way for me to pay my loans: If I give up the supports I pay for to pay my loans, I can't work full time anymore and can't pay my loans. the jobs that would pay over 100k in this state (what I would need at minimum to cover supports, healthcare I'd lose, and loan payments) won't hire someone who needs frequent time off, a bunch of employment flexibility, who can't work overtime, and can't be subjected to too much stress. I can barely work one full time job, so additional jobs or hustling isn't an option. I'm just stuck.
2.) I don't consider the US government to be a trustworthy contract partner at this point. I was one of the people who consolidated my loans to take advantage of the SAVE program under Biden's administration. They've struck down SAVE, but haven't done a thing for those of us who consolidated our loans and added to the principal because we trusted what we were told by the government. If I can be told by the government that doing something will help me, and then 2 years later they reverse that with no recourse offered, that tells me none of the terms can be depended on. If our own government's answer to this is 'you shouldn't have listened to the government, sucker', then well... I don't trust them to fulfill their end of the contract, and I don't particularly like the idea of owing money to an institution with both an extreme amount of power over my life and no intent on sticking to agreements or dealing fairly with me. It makes me nervous, especially for 10-20 years down the road.