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Message
1
Posted on 7/29/14 at 12:15 pm to Wtodd
they are making interest off the payments.
Posted on 7/29/14 at 12:16 pm to cjared036
quote:
the problem with the system now is it favors the banks.
Well ... why shouldn't "the system" favor the party that has the money and approves to loan to the people who ask for it and SIGN, agreeing to pay it back with interest over a given period of time?
Posted on 7/29/14 at 12:17 pm to Tigerlaff
quote:
There's the rub. Who should bear the burden of that debt?
Not the party that has tugged on his heart with the emotional story.
Posted on 7/29/14 at 12:18 pm to navy
quote:
Well ... why shouldn't "the system" favor the party that has the money and approves to loan to the people who ask for it and SIGN, agreeing to pay it back with interest over a given period of time?
Making a $200K loan to someone who would have trouble paying it off even if they were alive doesn't sound like banking that should be favored.
Posted on 7/29/14 at 12:18 pm to Mo Jeaux
Well, the mechanisms in place are having a cascading affect all around, and I can't say I have any sympathy for the banks either. Here's what we got going on.
1) Federal involvement in handing out student loans increasing tuition
2) Schools charging basically wtf they feel like because they get their money regardless(and no consequences).
3) Someone who is 18 or a little orlder optimistic(or stupid) enough to believe they will get that high paying job.
4) A bank that isn't worried about it going tits up because in the end they'll get bailed out. It's happened before. Not to mention, with federal loans the government holds the debt.
5) And now, on the federal loan side, you have loan forgiveness.
No one in this circle jerk has any incentive to be an economically rational actor.
1) Federal involvement in handing out student loans increasing tuition
2) Schools charging basically wtf they feel like because they get their money regardless(and no consequences).
3) Someone who is 18 or a little orlder optimistic(or stupid) enough to believe they will get that high paying job.
4) A bank that isn't worried about it going tits up because in the end they'll get bailed out. It's happened before. Not to mention, with federal loans the government holds the debt.
5) And now, on the federal loan side, you have loan forgiveness.
No one in this circle jerk has any incentive to be an economically rational actor.
This post was edited on 7/29/14 at 12:22 pm
Posted on 7/29/14 at 12:24 pm to Teddy Ruxpin
quote:
Well, the mechanisms in place are having a cascading affect all around, and I can't say I have any sympathy for the banks either.
I do not have sympathy but do not see where the bank is the "bad guy" in all this.
What rules did they break?
System being fricked up is one thing ... but, it is what it is.
No one forced those people to co-sign and take the responsibility.
Posted on 7/29/14 at 12:26 pm to cjared036
quote:
in this scenario there should be some protection for the borrower.
Who cares about protection of the lender? If its Bank the shareholders pay. If its the government, the taxpayers pay.
My parents had no money to send me to college. I applied for a loan, back in the middle ages, and was offered two hundred dollars if I could come up with two hundred. I eventually joined the Navy and spent seven years. I went to college on the GI Bill along with my wife working.
Both my sons lived at home and went to a community college for two years then on to a four year university. When they graduated, they owed nothing.
Now folks like BHP and myself are expected to help pay off bad loans due to bad parenting and irresponsible brats.
Posted on 7/29/14 at 12:32 pm to roygu
quote:
My parents had no money to send me to college. I applied for a loan, back in the middle ages, and was offered two hundred dollars if I could come up with two hundred. I eventually joined the Navy and spent seven years. I went to college on the GI Bill along with my wife working. Both my sons lived at home and went to a community college for two years then on to a four year university. When they graduated, they owed nothing. Now folks like BHP and myself are expected to help pay off bad loans due to bad parenting and irresponsible brats.
I went on the GI Bill too. Times have changed and with the reduction of forces that option is only available to a limited few.
Also, in our day, you could still get a decent job with only a high school diploma. Those jobs aren't out there much anymore. We force our young people to have to go to college if they want a decent living.
The cost of tuition is many times higher than it was back then. Unless you come from well off parents or can get a free ride somehow, kids nowadays have no choice but to borrow even to go to a relatively cheap "state" school.
This post was edited on 7/29/14 at 12:34 pm
Posted on 7/29/14 at 12:37 pm to Rickety Cricket
I didn't read the whole string, but the BIG problem here is the preferential treatment these private loans receive in bankruptcy. Why should the government give these private lenders preferential treatment - especially against a co-signer.
And, yes, I know the answer... Lobbying $$$$$$.
And, yes, I know the answer... Lobbying $$$$$$.
Posted on 7/29/14 at 12:38 pm to roygu
quote:
I went to college on the GI Bill
quote:
Now folks like BHP and myself are expected to help pay off bad loans due
Have you reimbursed the taxpayers that subsidized your education??
Posted on 7/29/14 at 12:41 pm to cjared036
quote:
their rate probably got jacked up after the missed payments. in this scenario there should be some protection for the borrower.
Don't miss payments, rates won't get jacked up. If you cosign a loan, you better make dang sure that the person you cosigned for is making timely payments. That's just fiscally responsible, isn't it?
Posted on 7/29/14 at 12:50 pm to navy
quote:
I do not have sympathy but do not see where the bank is the "bad guy" in all this.
I'm not, but they shouldn't bitch if they don't get paid either since the last time they didn't pay their debts the masses had to bail them out.
It doesn't make them a "bad guy" but it sure looks like throwing stones from glass houses.
I figured I'd bring a little balance to the blame game here.
But in any event, my post was really about the fact there is no incentive to be rational now that basically every one in the circle is getting paid or forgiven.
This post was edited on 7/29/14 at 12:57 pm
Posted on 7/29/14 at 12:57 pm to Broke
quote:
And then they won't be able to attend school
PRIVATE (and very expensive) school
Posted on 7/29/14 at 12:58 pm to Rickety Cricket
quote:
If you would like to read more about how charging interest and fees is criminal extortion, please feel free to have a look at the thread
LINK
look at this shite
i like how they leave out that college is not free for everyone, as only certain students are even allowed to attend college
why do they leave this out / not promote the same tiered secondary schooling?
Posted on 7/29/14 at 1:02 pm to navy
quote:
That is pretty cut and dry ... and is fair.
Sorry ... but if the parents co-signed ... then they are on the hook.
Sadly this is true. His only option now is personal bankruptcy and see if the courts will discharge the debt.
Dave Ramsey (among others) warns people NEVER to co-sign for someone else's loan no matter what.
Posted on 7/29/14 at 1:07 pm to SlowFlowPro
quote:
i like how they leave out that college is not free for everyone, as only certain students are even allowed to attend college
You have to score/achieve high enough to go to University. They aren't going to waste money teaching molecular biology to future pastors.
I would be curious to know what the percentage is that gets into University?
They have trade schools and other training for those that don't go to college.
People in the Scandinavian countries routinely come up as the happiest people in the world.
Posted on 7/29/14 at 1:14 pm to Rickety Cricket
Cosigning on a loan for your kids is the dumbest financial mistake people make. You need to be fully capable of paying it back if you do.
Posted on 7/29/14 at 1:15 pm to Flame Salamander
quote:
People in the Scandinavian countries routinely come up as the happiest people in the world.
Probably has something to do with the above ie reasonable expectations. They aren't running around telling everyone they can earn 200k a year with no effort while being a complete dumbass.
Posted on 7/29/14 at 1:19 pm to Rickety Cricket
Wrote a paper on this last semester. Just make these schools compete and the prices will go down. The federal reserve is essentially cartelizing schools (public or private) by ensuring them that all applicants will have a certain amount of money. Then, when students fail out before getting a degree, they can't get a job and they are piled under debt. This is what happens when lending standards are lowered. Eventually, there will be so much of these cases of debt that the Federal Reserve will fricking print off money, buy back the debt, further cripple the economy with a deadly combination of inflation and direct taxation, and claim it as a victory for the debt-ridden populace. Same thing happened with housing in '06-'08, (thanks, Clinton and Reno) same thing happened following Woodrow Wilson's lend-and-subsidize climate which primarily gave us the Great Depression, and don't be foolish enough to believe it won't happen again.
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