Student Loan Bubble

[sidecarParticipant 35862]

Jan Sobieski wrote:

As long as I don’t have to bail them out.

You will.

Didn’t you hear Hitlery talking about “getting people out of debt” at the democrat convention? That means forcing you, at gunpoint, to pay off other people’s debts. And boy is that ever going to f~~~ the economy but good. But then that’s just par for the course: democrats promising to “fix” the things they f~~~ed up in the first place. All on the taxpayer’s dollar, of course.

[BeerParticipant 11832]

Prefer Peace to Piece wrote:

If I were younger, I probably would try to find a daytime job and take classes at night as I could afford to take them. I would attend community or state schools (whichever were cheaper) and I would live at home as long as possible to minimize debt.

I finished up with two degrees about 3 years ago and this is exactly what I did and got through completely debt free. I also managed to save enough to put a 25,000 dollar down payment on a condo at 22 and have been on my own since. The last year I was taking classes, a full time semester at the local community college cost me about 3500 dollars, and the last course I took at a state school was 1400…so probably 6k for a full time semester. The job I had paid 16 an hour when I started and when I graduated I was making 19 an hour…better than a lot of college kids make but I was busting my ass doing manual labor for it…something a lot of college kids refuse to do.

It sucked working all day and taking classes part time for 10 years of my life, but when I finished school it was like getting a raise instead of the “Oh f~~~…I have to pay back how much?” feeling people with student loans get. Additionally…another huge advantage most people don’t even consider is when I graduated I had a decent job already and was just looking to upgrade…it wasn’t like I graduated and wasted a year or two working a minimum wage job while I looked for something in my field. In the end I had a lot of people in college think I was nuts for doing what I did because I was “missing out on the college experience.” Yeah…I did miss out on “the college experience,” I missed out on being broke until I’m 40 lol.

Prefer Peace to Piece wrote:

I met a young dentist who just graduated. He has 350,000 school debt. He lives in a one bedroom apartment and lives very frugally. He tells me it will take him many years to pay off his debts.

Oh yeah…I know a person who is a dentist as well and graduated with 250k in debt. They also bought a house and a fancy car soon as they got into a steady position. Even if they make 200k a year, that really isn’t much money after they get crushed in taxes because they make a lot, pay their student loan each month, mortgage, and car payment. I’m pretty sure that even though they’ll be grossing more than me every year, they’ll never catch up to me in net worth because I already have compounding working heavily in my favor while they still have interest payments working against them. At least the guy you know is living frugal while he gets caught up instead of saying I’m 250k in the hole…why not add another 400k to that for good measure! I’m far too cheap to dig myself in so far I’d be paying 30k a year just in interest lol.

[BeerParticipant 11832]

sidecar wrote:

Didn’t you hear Hitlery talking about “getting people out of debt” at the democrat convention? That means forcing you, at gunpoint, to pay off other people’s debts. And boy is that ever going to f~~~ the economy but good. But then that’s just par for the course: democrats promising to “fix” the things they f~~~ed up in the first place. All on the taxpayer’s dollar, of course.

Hillary is my inspiration to continue to be a cheap bastard so I can retire and live abroad sooner. I just hope if she wins, democrats push hard for universal healthcare before they push hard to force me to pay more for college after I’ve just finished paying for mine fairly recently. At least universal healthcare would make early retirement more achievable as I wouldn’t have to worry about health insurance anymore. Funny enough that is also the very reason the democrats policies sicken me…just how much do you want to reward able bodied people for not working and for making s~~~ty choices? Sooner or later even the hard working ones are going to start to realize working hard and good choices really don’t pay off…and then we have a serious problem.

[FunInTheSunParticipant 8289]

1. If I had a son or daughter, I’d encourage him/her to work for a few years, save up some money, and THEN go to college/trade school.

2. Unless you’re rich, you ought to be damn sure what your major will be before you enroll (so you’re not wasting money on classes you don’t need)!

3. If you can’t afford a private university, why not go to your state university? It’s much cheaper!

4. The library is going to be my “university” because life is too damn expensive in the USA.

"I saw that there comes a point, in the defeat of any man of virtue, when his own consent is needed for evil to win-and that no manner of injury done to him by others can succeed if he chooses to withhold his consent. I saw that I could put an end to your outrages by pronouncing a single word in my mind. I pronounced it. The word was ‘No.’" (Atlas Shrugged)

[FrankOneParticipant 1443]

Beer writes: The student loan “problem” could be fixed over night, and the price of tuition put in check if federal loans were outlawed and private lenders were allowed to take the earning power of ones degree into account when deciding how much to lend them, and they were allowed to take ones grades into account when deciding what rate to give them.

Absolutely. And their RISK of failing to graduate correlates to their GRADES, so that should most certainly enter into it. That would create a much more efficient system with fewer wasted resources on students destined not to graduate. And it would make it difficult to get loans for degrees in fields with poor job prospects. The private sector does a better job of managing risk than the public sector because everything is based on RISK not POLITICS.

Of course, it won’t happen. The Public did not even demand the government get out of the Mortgage business after the Great Recession!

Also, I should have clarified, in my scheme to pay a percent of income to pay back a loan, the lenders would be private sector. I’d also like to see the SCHOOLS get directly involved in lending, then they truly have skin in the game & even more incentive to produce a product that sells — students that graduate and have marketable skills — instead of a s~~~ty product somebody else pays for (the government).

The story about the -$70K manipulative psychologist lieing about being on BC was enlightening.

[MgtowWaveParticipant 4352]

I dont think this is indefinetly sustainable.

Sooner or later someone is going to have to pay for all this debt and it is not going to be pretty.

Crisis is the father of change and usage of common sence.

frankly my dear i don't give a damn

[RealityBitesParticipant 2203]

I studied why tuition rates at public universities shot up in California. I delved into past State Budgets and found out that the State government cut back on money subsidizing the public Universities and shift those funds into other areas. Adjusted for inflation tuition at my old school if I were paying the same amounts when I went to school would be about $1000 per quarter in today’s money. Today my school charges over $5000 per quarter.

Most kids go off to school thinking they will eventually become extremely wealthy; either they will graduate and get a job as a CEO at a fortune 500 company with their degree. Or they will find themselves a guy who is going to make a lot of money and marry him.

They have spent their entire lives being pampered by their parents, being told they were special, and being given everything. So naturally when it comes to signing a loan document, they don’t think about what they are getting into…they think that paying it off with interest is just a momentary nuisance in their way of them and a billion dollars.

Since many of them have never worked at a job or supported themselves, and aren’t aware just how many jobs that paid a livable wage went overseas or that sooner or later the tax payer is going to have to pay for the government’s debt on borrowed money with interest….they think the Government is just one big money tree.

Print more money or Tax OTHER people (but not them).

So they take out the loans…they get a useless degree, they graduate and then they can’t find a job and are living in the basement. Thinking that they were cheated and it was the older generation’s fault; and to a large degree they are correct. And the government policies that young people so enthusiastically support were the same policies that created this situation.

And it is easier to blame other people for your own mistakes than to take a hard look at your own life and own up to your own stupidity.

The problem with FEDERAL loans is that there is no way a person can get out of them by declaring bankruptcy or simply defaulting on them. The IRS will garnish the person’s paycheck or social security check; it will take out money from the person’s tax return. Short of living off the grid and going Galt and getting paid in cash under the table; there’s just no way to escape this.

And there is a sticky point..in addition to interest, there are fines with interest for people who default.
So the younger generation is screwed unless they do something like high tail to another country…

But here is the feedback loop…the way Social Security, Medicare, and SSDI is structured; these programs are PONZI schemes that rely on an expanding tax base of workers. There needs to be both a growing population of workers as well as growth in jobs that pay a livable wage. But there aren’t.

Instead most of the jobs “created” are part time jobs that pay minimum wage and offer no benefits other than what is mandated by law.

So the TAX base is and will continue to shrink, and the economy will continue to just plod along at a snails pace and be in a long term recession like Japan, because such a large portion of people’s income is going to pay student loans as well as paying higher taxes for the social programs they clamored for. The Federal Deficit continues to increase and is so high now; that eventually the US is going to have to default on its debt obligations when things get really bad, and people will pay for the debt through inflation or possibly even hyperinflation.

A person can’t buy a house, a new car, spend money on all kinds of crap if they are paying too much of a portion in taxes and their student debt.

And forgiving students of their debt; is rewarding them for their bad behavior and encouraging more such economically destructive behavior.

We can forgive the student’s their debt and jump start the economy, but we will also have either inflation (which will erode people’s retirement savings) or higher taxes (to pay for all of the “free” crap) or some combination.

[BeerParticipant 11832]

FunInTheSun wrote:

3. If you can’t afford a private university, why not go to your state university? It’s much cheaper!

Even if you can afford a private university…why? I know a lot of people in the engineering field that work for big companies in my area, and not a single one of them ever got an extra high starting salary because they went to an expensive college. Quite a few actually regret it when talking to their similarly paid coworkers who paid a hell of a lot less to get the same degree and the same job.

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