Student loans - the obvious

[Anonymous]

-Newly-issued private student loans should be dischargeable in bankruptcy.. otherwise banks will keep on lending to ANYONE, without analyzing ability to pay. Didn't turn out well for housing market.

-Young, starry-eyed students shouldn't be put in a position of getting themselves $100,000 - 200,000-300,000 in debt for degrees that can't possibly land them a job that will pay those bills.. especially when NO bank would grant them that credit to buy a house or for any other reason. They inevitably regret it, would spend decades unable to buy a home or have children, and then become Occupy protestors. This seems like predatory lending, worse than a payday loan.

-The taxpayer should not be on the hook for federal loans that are unlikely to be repaid.

[Anonymous]

Don't lend to worthless low paying degrees like english , political science, etc... Unless they sign a contract to go to law school or some other post stupid undergrad degree.

[Anonymous]

I think there should be no loans for grad school. Including law school.

[Anonymous]

True
Colleges are for the ruling class
Others can become cooks, laborers, tomato pickers, loggers, truck drivers

[Anonymous]

Anonymous wrote:-Newly-issued private student loans should be dischargeable in bankruptcy.. otherwise banks will keep on lending to ANYONE, without analyzing ability to pay. Didn't turn out well for housing market.

-Young, starry-eyed students shouldn't be put in a position of getting themselves $100,000 - 200,000-300,000 in debt for degrees that can't possibly land them a job that will pay those bills.. especially when NO bank would grant them that credit to buy a house or for any other reason. They inevitably regret it, would spend decades unable to buy a home or have children, and then become Occupy protestors. This seems like predatory lending, worse than a payday loan.

-The taxpayer should not be on the hook for federal loans that are unlikely to be repaid.

Tell me how a bank is supposed to analyze a college freshman's ability to pay? Typically this person has had, at most, two or three years of work experience, typically in low-paying jobs. During school the person likely is unemployed or employed in a low-paying, low-hours job. The person likely has no credit history except to the extent he or she has been supported by his or her parents. Under those circumstances, only those with family money are likely to get loans.

But even assuming that they give some loans based on the prospect that the person will have gainful future employment, what's to stop any grad from declaring bankruptcy the day after graduation? At the time, the person is quite likely unemployed, has few or no real assets, and has far more debt than he or she can repay. Even if the honest and ethical student wouldn't do this, there are a lot of people who would.

The current policy works pretty well: We want people to go to college; most people can't afford it without loans, so we spend some money encouraging banks to lend to what would otherwise be very risky prospects. To make up for the risk, we make sure the student will pay by making the loan non-dischargeable, and guarantee the loans.

[Anonymous]

Anonymous wrote:-Newly-issued private student loans should be dischargeable in bankruptcy.. otherwise banks will keep on lending to ANYONE, without analyzing ability to pay. Didn't turn out well for housing market.

-Young, starry-eyed students shouldn't be put in a position of getting themselves $100,000 - 200,000-300,000 in debt for degrees that can't possibly land them a job that will pay those bills.. especially when NO bank would grant them that credit to buy a house or for any other reason. They inevitably regret it, would spend decades unable to buy a home or have children, and then become Occupy protestors. This seems like predatory lending, worse than a payday loan.

-The taxpayer should not be on the hook for federal loans that are unlikely to be repaid.

You know, it's funny, I came to the opposite conclusion a while ago on this board while starting from the same premises (that you don't want kids to get huge loans for degrees that won't pay off and you don't want taxpayers to be on the hook either) and a bunch of people accused me of being a bank lobbyist, which is about as far from reality as possible.

The real question is: who has what incentives? If the students think that they need that degree and that if everything falls apart, they can always walk away from the loans in bankruptcy, while the lenders are ultimately passing the buck to the government (my understanding is that almost all the debt is backed by taxpayers at this point and lenders are just intermediaries), then you don't want to make them dischargeable in banktrupcy.

If the lenders actually bore final responsibility for the loans they make, then I'd agree with you. But I don't think that's the case.

[Anonymous]

Colleges are criminal in increasing prices in collusion. They need to be investigated. End student loans. Then we will find out the true "cost" of education.

[Anonymous]

Anonymous wrote:-Newly-issued private student loans should be dischargeable in bankruptcy.. otherwise banks will keep on lending to ANYONE, without analyzing ability to pay. Didn't turn out well for housing market.

-Young, starry-eyed students shouldn't be put in a position of getting themselves $100,000 - 200,000-300,000 in debt for degrees that can't possibly land them a job that will pay those bills.. especially when NO bank would grant them that credit to buy a house or for any other reason. They inevitably regret it, would spend decades unable to buy a home or have children, and then become Occupy protestors. This seems like predatory lending, worse than a payday loan.

-The taxpayer should not be on the hook for federal loans that are unlikely to be repaid.

That's ridiculous. Most student loans are repaid. So you are going to deny loans to the majority in order to protect the minority from what - paying the debts they voluntairly incurred???

[Anonymous]

Anonymous wrote:Don't lend to worthless low paying degrees like english , political science, etc... Unless they sign a contract to go to law school or some other post stupid undergrad degree.

I went to a liberal arts college and got a degree in political science. I had student loans which I paid off early. Now I make c. $500k/year (with graduate school and 20+ years of experience).

Going to law school these days is a guarantee of nothing - some schools are contracting and many law school graduates are not finding work in their field. So from my standpoint my "worthless low paying degree" has served me well. A law degree may not have.

Where are the defaults on student loans coming from? I know at one point the highest rate of default by far was from trade schools, some barely accredited, not from liberal arts colleges. What are the current stats on the defaults for liberal arts colleges/majors?

[Anonymous]

Anonymous wrote:Don't lend to worthless low paying degrees like english , political science, etc... Unless they sign a contract to go to law school or some other post stupid undergrad degree

Oh please no... that is the last thing society needs...

[Anonymous]

If you allow student loans to be discharged in bankruptcy, it will lower the cost of college, making it affordable to more people. Increase college loans = increase college tution.

[Anonymous]

Anonymous



Don't lend to worthless low paying degrees like english , political science, etc... Unless they sign a contract to go to law school or some other post stupid undergrad degree.

I know, let's have a five year plan to increase the numbers of lawyers or what every fashionable degree you think we need more of comrade. How's your agriculture production schedule working out?

[Anonymous]

Anonymous wrote:If you allow student loans to be discharged in bankruptcy, it will lower the cost of college, making it affordable to more people. Increase college loans = increase college tution.

Evidence, please?

[Anonymous]

Anonymous wrote:If you allow student loans to be discharged in bankruptcy, it will lower the cost of college, making it affordable to more people. Increase college loans = increase college tution.

but then what's to prevent every single college graduate from declaring bankruptcy they day after they get their diploma? They'd be fools not to.

[Anonymous]

Anonymous wrote:True
Colleges are for the ruling class
Others can become cooks, laborers, tomato pickers, loggers, truck drivers

It used to be this way. Now college is for everyone! But only some colleges are for the ruling class. And others are for the cooks, laborers, tomato pickers, loggers and truck drivers. Now that everyone is "equal", the ruling class has to be able to maintain their status and the caste system that keeps them there and everyone out.