Posted on 06/08/2019 3:29:53 AM PDT by reaganaut1
The U.S. student loan system is broken.
How broken? The numbers tell the story. Borrowers currently owe more than $1.5 trillion in student loans, an average of $34,000 per person. Over two million of them have defaulted on their loans in just the past six years, and the number grows by 1,400 a day. After years of projecting big profits from student lending, the federal government now acknowledges that taxpayers stand to lose $31.5 billion on the program over the next decade, and the losses are growing rapidly.
Meanwhile, four in 10 recent college graduates are in jobs that don’t require a degree, according to the New York Federal Reserve. And many American colleges are dropout factories: At more than a third of them, less than half of the students who enroll earn a credential within eight years, according to the think tank Third Way.
The U.S. is shoveling more and more money into a highly inefficient system that, polls find, Americans are increasingly dissatisfied with. College tuition has soared 1,375% since 1978, more than four times the rate of overall inflation, Labor Department data show. The U.S. now spends more on higher education than any other developed country (except Luxembourg)—about $30,000 a student, according to the OECD. Meanwhile, college presidents are being handsomely rewarded for the success of their enterprises: Seventy of them, including a dozen at public colleges, earned over $1 million in 2016-17, according to the Chronicle of Higher Education.
How did we get here?
The student loan system was built in the 1960s on the overarching belief that higher education is a safe and worthy investment for both society and the individual. At the time, the first children born after World War II—the baby boomer generation—were beginning to graduate from high school and enter college.
(Excerpt) Read more at wsj.com ...
Should it really take a personal finance class? The vast majority of people on the planet have never had a personal finance class. And what can that class do, tell them don’t sign up for college debt unless you’re smart enough to make the money to pay it back? How about the kid who blows his money on hotrods, drugs and girls at 18, do we need to bail him out too?
And how about for their second, third, fourth and fifth years of debt—are they still somehow too idiotic to be responsible for that too?
Huh?
People actually attended college and grad school in the 1970s, 1980s, and 1990s. Were you not born yet?
And, yes, they had invented student loans waaaaayyyyyy back then.
In the days of yore, the checks were issued by private banks; Citibank was a big player, and subsidized by the federal government.
The loans that are crushing seniors are the ones they took out to pay for their education decades ago.
What are your sources for your data?
First of all, the cost of college since the since the 70s has gone up 600%+ in real cost in that time. it’s up 150% in cost since I went in 2000 alone. Second, any debts from back then would be paid off at this point even in the worst case scenario. Third, total student loan debt outstanding from 2001 to 2016 in constant dollars increased from $340 billion to to $1.3 trillion. Student loans now are 1.6 trillion. Even if you assume 0% of the $340 billion outstanding in 2001 was paid off (which is a bad assumption), it means 80% of student loans outstanding were originated in the last 16 years. The amount of student loans issued in 1990 was less than 20 billion a year and in 1970 would have been a mere fraction of that.
And how about for their second, third, fourth and fifth years of debt—are they still somehow too idiotic to be responsible for that too?
You are acting like student loan debt is similar to other forms of debt with immediate cost/benefit. That is not how student loan works. Kids are brainwashed to believe it will all work out! Take on all this debt. You don't need to pay a penny while in college! You'll get an amazing job and the cost of this debt will be nothing! For a lot of people it does work just fine. What about the 50% who don't complete their degree because they realize they aren't truly cut out for college? What about those who were sold a bill of goods on a crappy major? What about those who enter the economy in a recession? What about those who just aren't that bright and even if a local college says they have a degree simply aren't smart enough to cut it in the real world for a high paying job? By the time the person realizes 2 or 5 years post college it was a mistake the debt has long since been incurred.
They want and get a massive six-year vacation on the taxpayers’ dime.
Enough of this “brainwashed so we don’t have to pay for our six-year vacation” crap!
Go over to Democrat Underground if that is your approach to things.
This wasn't a big deal back in the 70s and 80s because the cost of college was ~1/10th as cheap as it is today in real terms. It was an issue but less so 20 years ago when I went off to college and borrowed $20k (and my wife did similar amount), which I paid back, plus interest, in full. I'm not in favor of eliminating the debt these kids have but some pity absolutely. I also want to change it so that future kids have a fighting chance. I'd require personal finance classes in HS (and freshman year in college for anyone taking Stafford loans). I'd tie stafford loan limit amounts to graduation rates and job placement rates by university. I'd let student loans be dis-chargeable in bankruptcy again with 50% off the loss shared by the college. Among other things.
You are wrong and patronizing and not conservative.
And the feds just need to get out of funding higher ed completely.
Everyone would be better off with these students working their way through community college to start, not incurring debt, and having productive routes off the merry-go-round.
“You are wrong because I say so!” Thanks for the laugh - seriously - my co-workers just looked at me funny. I’d 100% love to get the federal government out of college, out of K-12, out of healthcare, out of retirement and a number of other things it has no business being involved in. But given the extremely unlikelyhood of that happening, I would suggest changes that actually have a prayers chance of passing that would drastically improve the situation.
You are offensive and insulting and wrong. Look back at what you have written to me.
Idiot yourself.
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Great summary on that last. We are turning our young into indentured servants. I do see quite a bit of awareness on this by younger folks over at r/The_Donald, FWIW.
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Um, we’ve ALREADY allowed our *taxpayers* to be turned into indentured servants via the illegal, unconst. 1) size/scope of Fedzilla 2) the welfare state (aka Socialism).
Hell, many on FR *applaud* the same, just visit any SS/MediXYZ Ponzi scheme thread. You’d think they actually PAID into something instead of simply taxed w/ false premises\promises.
again - “You are wrong!” I can’t tell you how but you are!!
Putting debtors’ debt or blame on others is wrong and not conservative. I don’t know what your link to what debt you want to stick the taxpayers with but your logic and argument are pathetic. A free country is dependent on people being free to make good and bad choices and living with the consequences.
But again, you’ve already been foul and insulting to me and I am not responding to you again.
Not holding parents, schools, counselors and government etc accountable for miss-representing and outright LYING to kids about how valuable college is and how easy it is to pay back your loan and that everyone gets a good job isn't conservative. It'd be like the bank telling you you could borrow at 4% on your mortgage and then in year 6 changing it to 15% and going "hah! Jokes on you! Buried in the fine print on page 187 in the footnotes we have the right do it! Suck it up, sucker!." - except worse, these are people you trust and society tells you to trust - no one trusts banks.
You threw out the first insult and continually make up straw-man arguments and ignore very easy common sense things. I'd love to get the government out of the student loan game but until that happens, common sense changes such as person finance classes (which are very helpful beyond student loans) and tying federal government loan limits and the like by school based on results would DRASTICALLY improve the situation.
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