Posted on 11/29/2012 6:46:35 AM PST by jmaroneps37
“I have no sympathy for people who get themselves into a hole that they expect me (and the Taxpayers) to dig them out of.”
Neither do I, but maintaining debt that can’t be repaid benefits nobody. The Taxpayers are already paying for debt that isn’t repaid. It’s no difference, except the debtor gets to try to make a life for themselves.
It’s the best way to make something less bad out of a bad situation.
“The universities get paid and have been paid up front. Discharging loans will have little to no affect on higher education.”
*face palm* Friend, I’m not saying we go back and reclaim money already spent. How many loans do you think will be made in the future if past loans are discharged in bankruptcy?
.......I’ll wait. keep thinking........It’ll come to you.......
VERY FEW is the answer
Now do you think that future spending on education will affect universities? (psssst. The answer is ‘yes’)
What if spending goes DOWN because people won’t loan money unless they are SURE it will be repaid - won’t that mean fewer people go to university? (yes)
So do you still think that discharging loans will have little to no effect on higher education? (if your answer is not “no” then you must have majored in economics)
What will be the affect of adding another trillion or two to the national debt? Talking about hand hitting head.
“T.A.R.P has and will cripple the U.S. economy. Forgiving student loans will do even more damage. I do not favor the present system of higher education funding. Adding another trillion to the U.S. debt is insanity.”
Too late. TARP is done. Yes, it was and is very damaging.
The trillion in student loans is already there. We’re already hosed!!! Don’t you see? Which is better? maintaining a bad debt or discharging it in bankruptcy.
“I am an electrical engineer that dabbles a little in RF at work.”
I didn’t say you were a bad engineer, just a bad economist.
1. The loans will still be made if they’re federally insured. The ones that aren’t insured WON’T be made (at least not much, or not without collateral). This will stablize or even force down somewhat college costs (you can’t charge what your customer base can’t afford). And ...
2. Loans would be discouraged for non-marketable majors, as those would be the least likely to be paid off. Say goodbye to [fill-in-the-blank] studies and other bulls—t majors.
“What will be the affect of adding another trillion or two to the national debt? Talking about hand hitting head.”
Only in government can they pretend that an “asset” - i.e. a non-performing student loan, actually has value.
It’s the same thing with Mortgaged Backed Securities that the Fed has loaded up on. They, under any normal (and legal) sense of accounting, have only a fraction of their face value.
At least with MBS there is an underlying piece of property that has some value
WIth a student loan - there is no asset. Only ability to pay.
So the government has ALREADY taken the hit on these loans - to the extent they are non-performing. So it’s a wash.
Put them through the bankruptcy process. Liquidate or restructure the debts as each individual can handle, and move on.
Believe me, I’m bitter as hell. I paid student loans, and I pay full boat tuition for two kids in college right now. It hurts.
but it does no good to expect an unemployed English Major with $100k in debt accruing at 9% annually to ever pay that back. They won’t do it. They won’t ever participate in the legitimate economy. Nobody wins.
I know what you are saying - I really do. But one of the primary principles of Capitalism is that in order for there to be profit, there has to be risk. Sometimes you win, and sometimes you lose. Remove the risk, remove the profit.
I do think that debt owed to the government of any kind should be subject to bankruptcy law, in the same way as any other entity is subject to bankruptcy law. I agree with you in that, as otherwise there is an inequity.
But what happens when the rubber hits the road (wrt student loans) is that the risk is removed. There is no penalty accrued. And since there is no penalty, the market (college) goes oblong and sustains what is otherwise unsustainable...
Because the end user has no risk, there is no real research into making a very good decision... A touchy-feeley approach can be applied instead of hard numbers... Easy-bake degrees are chosen rather than the hard way that actually will pay with a desirable employee for an industry that is actually capable of hiring him and sustaining him life-long...
It is already bad enough because of grants. Allowing bankruptcy will only make it worse. There is a reason why colleges continue to offer education options that lead to nowhere... In fact MOST lead to nowhere... And it is directly attributable to the fact that the college gets paid for a product that is not viable.
If the way is made hard, the risk is great, and the reward fantastic.
When my business went sideways, I contemplated bankruptcy - But I tended to pay vendors before government, so most of my debt load was to the government, and guess what? That debt was likewise not able to be discharged through bankruptcy. It took me four years of very hard work and starvation rations to climb over that hump. But I am glad I did it, and I am a better man because of it.
Why should educational loan applicants have it better than me, when I am the one actually making the jobs and taking risk?
The trillion in student loans is already there. We’re already hosed!!! Don’t you see? Which is better? maintaining a bad debt or discharging it in bankruptcy.
Don’t know. I guess if were headed to Greece territory we might as well go full in and get it over with. This will only hurt everybody and not help the students. There won’t be any T.A.R.P for this bubble. Don’t forget interest rates are set to cover costs and delequincies. Student loans being garanteed and not elligible for bankruptcy allowed for low interest rates. Also banks might carry high volume of these loans to offset other losses. Retro-actively changing the eligibility of student loans for bankruptcy will have dire consequences on the lending institutions. I would be more inclined to changing future student loans for eligibility to dishcharge into bankruptcy. This would allow lending institions to charge higher interest rates and to take a more active roll in the granting of the loans.
The trillion in student loans is already there. We’re already hosed!!! Don’t you see? Which is better? maintaining a bad debt or discharging it in bankruptcy.
Don’t know. I guess if were headed to Greece territory we might as well go full in and get it over with. This will only hurt everybody and not help the students. There won’t be any T.A.R.P for this bubble. Don’t forget interest rates are set to cover costs and delequincies. Student loans being garanteed and not elligible for bankruptcy allowed for low interest rates. Also banks might carry high volume of these loans to offset other losses. Retro-actively changing the eligibility of student loans for bankruptcy will have dire consequences on the lending institutions. I would be more inclined to changing future student loans for eligibility to dishcharge into bankruptcy. This would allow lending institions to charge higher interest rates and to take a more active roll in the granting of the loans.
” English Major with $100k in debt accruing at 9% annually to ever pay that back”
No one is talking about changing that and forgiving loans won’t change this situation in the future. College costs will still increase.
If we discharge that loan, no one learns the evil of big government. The message is that big government is good. Selling your soul to the government has no consequences.
See how compassionate they are?
They could not borrow or tax any more and simply went out of business. NOBODY wanted to put the USSR back together again and nobody will want to put the USA back together either. Power will revert back to the states just like the satellite countries. And then we begin the process of centralizing power and wealth again....................
Most of them voted straight Dim tickets...Not all bad deeds go unpunished....
We dont have a capitalistic system any more and have massive manipulation of the price structure due to govt intervention in areas it has no business in.
College loans is one of the main areas to where the academic complex never faces any downwards pressures on its own cost structure due to the endless prniting of money.
Its a massive ponzi scam of the worst order.
My daughter who is now 27 went to a 2 year dental hygiene program rather than a 4 year university. Her loans were minimal and she paid them off the first year.
She works for 6 figures in Chicago and has her own place and money in the bank. It makes her crazy these kids think their loans should be forgiven. She worked to get out of debt.
I believe these kids simply need to be smart when they decide on a major. Her 2 year degree makes a lot more money than a 4 year women’s studies degree.
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