Posted on 05/04/2022 5:38:15 AM PDT by Kaslin
Lending money is not, as they say, rocket science.
According to the Federal Reserve Bank of St. Louis, in the last quarter of 2021, of the total of all outstanding business loans from all commercial banks, 1.08% were delinquent.
Per the Federal Reserve Bank of New York, as of second quarter 2021, a little over 2% of the $1.4 trillion outstanding in auto loans were delinquent.
Yet in the student loan market, totaling around $1.6 trillion, not that different from the total size of the auto loan market, an average of 15% are in default at any given time, per the Education Data Initiative.
It should be clear what the problem is.
Auto lenders make sure that those to whom they lend can and will pay back the loan. They are careful because if the borrower defaults, the lender loses.
But if, tomorrow, President Joe Biden or Sens. Elizabeth Warren or Bernie Sanders decide that it is not fair that there are Americans without new cars and managed to get government guarantees for auto loans, is there any doubt that there would be a dramatic rise in defaults on car loans?
Those lending wouldn't care who they lend to because they wouldn't take the loss on a default. You and I, we taxpayers, would, as we will if Biden and his party have their way to wipe out student loans.
Of course, "wipe out" is not the right terminology. Debts don't get wiped out. They just get transferred to someone else. In the case of government guarantees, that someone else is taxpayers.
he concept of student loans backed by the government is another child of the allegedly compassionate 1960s.
Doesn't it make sense to help the less fortunate obtain funds to pay for college?
But as many theologians and philosophers have noted, the greatest charitable act is to help another individual take control of their own life. Teaching personal responsibility is the most valuable gift that one can provide another.
Our American compassion, our moral compass, has gone awry.
A child growing up in America today looks around and finds himself or herself in a nation where debt is larger than the entire economy, and still growing.
But just as inflation shows that the costs of fiscal irresponsibility cannot be hidden, so the costs of teaching our youth that personal responsibility is irrelevant cannot be hidden. It manifests in the destructive behavior we see now.
The Wall Street Journal reported that one student loan adviser told them, "I'm seeing them say, 'I'm going to take out more loans now and go buy GameStop stock with it because it's going to get forgiven anyway.'"
A new Gallup survey reports "32% of currently enrolled students pursuing a bachelor's degree report they have considered withdrawing from their program for a semester or more in the past six months."
Thirty-six percent attribute this to financial reasons. But 76% attribute to "emotional stress."
Of course, the universities love this. What business wouldn't think the government subsidizing purchase of its product is a great idea?
Per the American Enterprise Institute, from January 2000 to December 2021, college tuition costs increased 175% and college textbook costs increased 150%. Over the same period, the consumer price index for all items increased 65.5%; prices of cars, household furnishings and clothing remained relatively unchanged; and cellphone services were down 40%, computer software down 71% and television sets down 97%.
Per Education Data Initiative, highest default rate -- 26.33% -- is among arts and humanities majors attending nonselective schools. Can anyone really think such loans make sense?
We need to help our youth who want education to get it. But it must be done prudently.
Teaching our youth that they don't need to pay back debts is not a good start.
Misguided efforts by Biden and his party to cancel obligations on student loans should be vigorously opposed.
Students want me to pay off their debt obligation. Well ok. How bout they pay off my car loan. Seems fair
Time to make the checks out to the schools....Too many kids using it for other things.
Yes, students must pay their debt. Maybe they can discuss rebates from their schools? But from taxpayer, no. The number of taxpayers getting student loans is very small and these folks can pay their debt instead of getting a taxpayer handout. Myself, I worked myself through school, got a total of less than $5,000 in student loans, which were paid off in full.
Note to the companies hiring people who refuse to accept responsibility for personal debt:
They are gonna make lousy employees...
There are plenty of jobs around for them, so they shouldn’t have any problems.
Paid mine in 2 years after graduation. Never asked my parents for money the entire time at Stanford. Had a half scholarship and it was still not enough so I had cash jobs as bartender etc. The best was being the DJ at a strip club. Best job ever. One of my frat mates was an escort for old hags and my dorm mate ran the underground poker ring like in Rounders. I laugh at these idiots who still pay theirs 10 years after..
That sounds like a good movie....you ever thought of writing a book or screen play about it?
Right... and THEY ‘RE the ones walking around with a cup of $4 coffee while playing games on their newest Iphone.
I worked at a university and from what I saw, lots of them had better cars, phones, more expensive eye glasses, watches, etc. than I did! They all got lunch daily at the student union and were buying those $7 hamburgers or they regularly went to Chipotle for lunch. None of them would brown bag it. They know nothing about priorities
Way back in the stone age, I found my first choice, biology, way too hard and switched over to a BA degree that I could slip through college and graduate. The profs were helpful, the focus was on graduation, not knowledge acquired.
I didn’t need student loans, I worked part-time. But I wasn’t spending much time learning from books, either. In our society, we have granted folks between 18-24 the ability to avoid the real work world, as long as they are ‘in college’. The career clock stops while the government subsidizes your lifestyle - and hopefully you learn how to make a living.
Student loans without a solid career path aren’t much different than having a generous mom and dad say, “Here, take this money and go find yourself.’
90% of these brain dead morons don’t have a clue as to what responsibility is and their $250k PhD in gender studies only gets them a desk job at an HR department for $40k per year.
Bad choices are a personal responsibility.
I think the better message is this: Colleges and universities knowing full well that the money they charge for the courses offer no job prospects or possibility of a loan system that could be paid back. They did fraudulently and with full knowledge, create an education racket. They sought to deceive students, parents and government officials into providing a way to funnel money into their education racket. These colleges and universities are hereby on notice that all defaulted loans will be compensated by the benefiting institution.
Nah. I’m already in the biz and just to push one screenplay requires a lot of ass kissing which I avoid.
A huge amount of the delinquent debt was piled up during the Obama Admin. Obama loosened the guidelines for schools that qualified for FISL loans. Obama’s ACORN allies and the politically Democrat grifter class went into high gear. A significant portion of that debt was outright fraud - factious schools that existed only on paper enrolling phantom students who id not exist in classic graft. Another component was back door reparations where totally unqualified students took out student loan debt with no intention of ever paying it back. The scam schools and the grifter students simply split the loan checks and took the money and ran. Next were actual students who took out loans for fly by night “trade schools” teaching subjects like hair weaves and nail extensions. These gullible students got garbage training and have no income potential and no way to pay back the loans. Canceling the student debt is a way of destroying the evidence of the Obama era fraud so the American public never learns who those loans were made out to and how much the American taxpayer was robbed during the helicopter money days of the Obama Admin. Regardless, much of the outstanding student loan debt is fraud and will never be paid back.
“I worked at a university and from what I saw, lots of them had better cars, phones, more expensive eye glasses, watches, etc. than I did!”
same here, dude. A couple of them were trust fund babies who never lifted a box in their life. My college frat for an example, we weed out the idiots and my batch were just like me, ordinary Joe working for an education with sh*tty cars but still got laid. 12 years later, I think all of everyone in my batch are successful.
Yes. If the government lets students off repaying their loans, the government should claw back the lost money from the schools, not take it from taxpayers. Harvard’s endowment is currently over $50 billion.
If that makes a lot of colleges go out of business, too bad.
NO ONE but me paid off any of MY mortgages.
For the most part, student loans are non dischargeable in Bankruptcy. They were not always that way. In fact many loans were taken out before that change in the BK laws was made thereby making a material change in the terms of the loan by congressional fiat.
The difference between not paying a mortgage/car loan and not paying a student loan, is that the non student loans can be discharged in bankruptcy and one can thereby avoid being an indentured servant for the rest of one’s life.
The issue therefore is not necessarily “only” about debt and the obligation to pay it but also about, to some, life long indenture.
Solution: Don’t forgive the loans. Provide for their dischargeability under regular bankruptcy law with a commiserate hit to credit rating.
Query:
Does the interest rate associated with Student Loans (federally backed) properly reflect that Bankruptcy is basically not an option to the borrower? In many cases, no. The interest rates set by the government are not credit or market sensitive.
It might be optimistic to think that someone who chose a gender studies path will take responsibility for ANYTHING. They went that way on a lark, or because they are just smart enough to know how to breathe.
Responsibility? That sounds racist.
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