Dept. of Ed. Wonders Why 40% of Student Borrowers Don’t Make Payments; Blame Bush (Seriously)!

Mish Talk ^ | 04/07/2016 | Mike Shedlock

[dhs12345]

They are waiting for the Democrats to make education free. A fool would pay off their student loans. /sarc

[Lockbox]

Imagine a world were 40% of taxes were not paid and no one had their bank accounts seized.

[PGR88]

another highly political, nanny-state progressive social-engineering scheme - funded once again by our fiat, unbacked currency and massive government debt created by the Federal Reserve.

Conservatives will continue to watch the country melt around them as long as the Federal Reserve remains.

[fungoking]

Only allow student loans for degrees for careers that offer a good opportunity to make enough money to make the payments.

You want a race or gender studies degree fine, just don’t ask the taxpayer to underwrite your loan.

[originalbuckeye]

Obamabots ALWAYS BLAME BUSH FOR EVERY DISASTER THEIR WON HAS CAUSED. And they feel justified because the OSM (Obama Sycophant Media) agrees with them. One reason that 40% are not paying their student loans is because the Bush Admin tightened the rules on bankruptcy?? Well, if they go bankrupt, I guess they won’t be paying those loans anyway. Circular thinking brought to you by the Marxists in charge......they depend on the stupidity of the American citizens to be able to inflict their disasters on the public.

[Trillian]

What did they expect from the entitlement crowd they helped create?

[originalbuckeye]

I believe I read, a while back, that the Obama Admin wanted to ‘forgive’ student loans for those who went into Government jobs. If that comes to pass, our Government will swell to the point that the Chiefs will truly overwhelm the Indians and there will be no money to pay all those new Chiefs. (With a nod to Elizabeth Warren, who likely agrees with the premise of forgiving the debts of those who ‘serve’ in the Government)

[Gaffer]

My understanding about student loans is that the students are pissed because they are the one debt that can’t be cleared by a bankruptcy and the debt stays with you for a very, very long time.

They will push for them to be bankrupt-eligible at first, and then for forgiveness all together.

[Zathras]

This is the REAL reason.
It is common knowledge in the non-profit world to tell graduates that if they join a non-profit, their student loan will be paid for.

My two nieces were told this by multiple people.

[Mouton]

I know one who has a BA in fine arts. He is working at the city waste water facility...very fitting.

[DannyTN]

Jobs. We sold them an education as we were offshoring the jobs to China.

[lafroste]

I have never heard that. Were your nieces loans actually paid off?

[Vigilanteman]

That seems logical, as would getting the government out of the loan business completely and letting the private finance companies charge interest rates based on the marketability of fields of study.

Political reality is that some bailout is inevitable. A partial bailout in return for getting the government out of the loan business completely would be a bargain.

Logical Six Point solution to the student loan crisis:

1. Write off 25%. This is a necessary concession to the debtors who, in many cases, were duped into taking out loans they couldn't afford.
   
2. Return 75% to the institutions of origin for collection.
   
3. Institutes get to keep 5% of the 75% for their trouble but must remit the 70% back to the government.
   
4. They are free to hold up transcripts, cancel degrees and employ all the other measures they did to collect against the debtors as when they were students.
   
5. If the institutions still cannot pay back the government within the normal loan times, the government is free to attach their endowments, real estate and other assets.
   
6. Government gets completely out of the loan business and encourages the institutions to line up their own lenders. If a tiny college like Hillsdale (Michigan) can do it, then there is no reason anyone else can't do the same.

   Yes, the taxpayer takes a 30% hit up front to liquidate this crisis, but that is far better than continuing to grow this monster.

[fungoking]

The “too many dollars” floating around for college has led to the increased cost.

Allowing student loans to be discharged by bankruptcy would drive down the inflated cost of college because banks would no longer offer the loans, or loan the $ to the college putting them on the hook.

[Harpotoo]

Didn’t obummer take over college student loans????

[Lorianne]

This all grew out of the EVERYONE-MUST-GO-TO-COLLEGE craze which is no different than any other fad like the tulip craze in Holland, various housing bubbles, and currently the auto-loan bubble.

People who benefit are those who get bailed out by the taxpayers (in one form or another they always get bailed out). People who get hosed are, as usual, those who pay taxes.

[Mr Rogers]

If the IRS started deducting student loan payments from tax refunds, the loan would often get repaid. Heck, in many cases, the “Earned Income Tax Credit” - welfare money given to taxpayers making up to 45K - would “pay” the loan, so the government would simply pay the loan out of the receiver’s welfare money.

But the best way to do it would be to have private banks make student loans, based on likelihood of repayment. Want a loan to study chemical engineering? Can do! Want one to do “womyn studies”? What is your collateral!

[RainMan]

My thought has been to tie tuition to Y3 post graduate earnings and employment % in the field of study. The formula would be simple. Avg Y3 earnings (in the field of study) * % employed in field of study = max tuition that could be charged for the degree.

In other words, a school could have a degree in gender studies, but if only 5% of the graduates get jobs in gender studies, and those jobs only pay $32K/year, then the school would not be able to charge more than $1,600 for the degree TOTAL ($32K * 5%). I dont know of many schools that would charge you $1,600 for 4 years of education.

Finally, I would completely eliminate student loans, and instead implement a employment "seeding" program. Employers could pledge money to schools to cover a percentage of the costs of a program (it would have to be a full term commitment of funds). The more a company pledges to a school, the more graduates they will be ALLOWED to hire. Students being given the grants would receive paid internships with the employers each summer, to give the student experience and the employer the opportunity to determine if they want to continue to fund this student, or move their funding to a different student.

The benefits of a program like this would be multiple:
1. It would dramatically lower tuition costs across the board. 2. Employers would become very specific as to what degrees they valued and why 3. Students would be motivated to perform each and every year while in school, for fear of loosing their funding 4. Employment straight out of school would be pretty much guaranteed. 5. The taxpayer would be off the hook for the cost of higher education completely. We would not be underwriting bad loans, nor would we be paying the cost for a department of women studies. 6. The entire concept of tenure would vaporize, because colleges would require accountability from their professors when their precious little snowflakes crashed and burned in the real world and it caused the school to have to issue refunds to students.

[Rapscallion]

Resident Obama encourages non-payment under his program to bankrupt America. Hillary will do the same. They hate America no matter how much the world has benefited from our help.