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Student loan debt: Could we be headed toward another economic crisis similar to 08?
Posted on 7/9/18 at 2:05 pm
Posted on 7/9/18 at 2:05 pm
If enough people, who can’t get jobs or are underemployed with some of these useless degrees, just said “Screw it” and stopped paying student loans, would that lead to another economic crisis similar to the housing market crash in 08?
IMO these government backed loans are the problem. These guaranteed, government backed loans are allowing institutions to charge ridiculous prices for tuition + other ‘fees’ and I’m not sure there’s any regulation on it whatsoever. Allowing 18 year olds to take out 100+k in student loans is just asking for shite to happen...
Forget whether or not the useless degrees are the students’ fault (which admittedly in most cases they are absolutely at fault) but that’s not the question here. Try to stay on topic and don’t get off in the weeds with “muh millennials”
IMO these government backed loans are the problem. These guaranteed, government backed loans are allowing institutions to charge ridiculous prices for tuition + other ‘fees’ and I’m not sure there’s any regulation on it whatsoever. Allowing 18 year olds to take out 100+k in student loans is just asking for shite to happen...
Forget whether or not the useless degrees are the students’ fault (which admittedly in most cases they are absolutely at fault) but that’s not the question here. Try to stay on topic and don’t get off in the weeds with “muh millennials”
This post was edited on 7/9/18 at 2:07 pm
26
Posted on 7/9/18 at 2:06 pm to TDcline
quote:
If enough people, who can’t get jobs
Lots of jobs out there...
Posted on 7/9/18 at 2:06 pm to TDcline
quote:
Could we be headed toward another economic crisis similar to 08?
No
Posted on 7/9/18 at 2:08 pm to TDcline
To be specific, federal loans that don't discriminate based on career viability (major, school choice, etc.) are the problem.
Posted on 7/9/18 at 2:08 pm to TDcline
quote:
If enough people, who can’t get jobs with these useless degrees, just said “Screw it” and stopped paying student loans, would that lead to another economic crisis similar to the housing market crash in 08
Isn't most of the student loan debt either backed or held by the Dept. of Ed?
Posted on 7/9/18 at 2:09 pm to TDcline
This “student loan bubble” has been talked about ad nauseam. The bubble is going to burst soon has been talked about since the early 2000’s. It’s just getting old hearing about something for so many years.
Posted on 7/9/18 at 2:11 pm to Pettifogger
quote:
To be specific, federal loans that don't discriminate based on career viability (major, school choice, etc.) are the problem.
That and there is no collateral involved at all. Any chucklefrick gets guranteed credit. If that happened in any other industry, you'd see an exorbitant rise in prices, too.
An interesting idea I've read is for the university (or a third-party lender) to pay for education in exchange of X% of a person's income over Y amount of years. That would definitely incentivize schools or lenders to subsidize areas that are likely to return a profit, and those who wish to pursue something unprofitable would probably have to foot the bill themselves or find some kind of sponsor.
Posted on 7/9/18 at 2:21 pm to TDcline
I think it will take a generation to disappear.. People screwed up took out too much in loans for degrees that don't provide enough value.
We just have to deal with it.. work hard and pay them off.
Direct our children into other career paths that don't require massive debt.
We just have to deal with it.. work hard and pay them off.
Direct our children into other career paths that don't require massive debt.
Posted on 7/9/18 at 2:23 pm to TDcline
quote:
If enough people, who can’t get jobs or are underemployed with some of these useless degrees, just said “Screw it” and stopped paying student loans, would that lead to another economic crisis similar to the housing market crash in 08?
IMO these government backed loans are the problem. These guaranteed, government backed loans are allowing institutions to charge ridiculous prices for tuition + other ‘fees’ and I’m not sure there’s any regulation on it whatsoever. Allowing 18 year olds to take out 100+k in student loans is just asking for shite to happen...
Forget whether or not the useless degrees are the students’ fault (which admittedly in most cases they are absolutely at fault) but that’s not the question here. Try to stay on topic and don’t get off in the weeds with “muh millennials”
I took out $50k...will be re-paid in under 2 years
Posted on 7/9/18 at 2:23 pm to TDcline
How would it be an economic crisis? The debt can't be discharged and is guaranteed. Unless all the millennials with useless degrees go off the grid or suddenly drop dead? I guess that would be a problem.
The effect on tuition inflation is a problem, but this narrative that somehow the market will collapse due to the amount of student loan debt...somehow...just because, I think is wishful thinking on the part of the indebted people who just really really want there to be something to necessitate the government taking away their financial obligation.
The effect on tuition inflation is a problem, but this narrative that somehow the market will collapse due to the amount of student loan debt...somehow...just because, I think is wishful thinking on the part of the indebted people who just really really want there to be something to necessitate the government taking away their financial obligation.
Posted on 7/9/18 at 2:26 pm to TDcline
The bill will come due at some point. There will be no bailout however, as the people with these loans either don't donate or donate nearly enough to have the ear of their "representative."
We'll all end up paying for it one way or another.
We'll all end up paying for it one way or another.
Posted on 7/9/18 at 2:33 pm to Huey Lewis
quote:
How would it be an economic crisis? The debt can't be discharged and is guaranteed
Exactly. Even if the whole thing collapsed, it would only take a few SL servicing companies down. It's not a systemic kind of deal like the derivatives market in 08. The numbers are big but at the end of the day the SL bubble is not really that big of a deal because it's sealed off from the greater financial system.
Posted on 7/9/18 at 2:38 pm to Huey Lewis
quote:
How would it be an economic crisis? The debt can't be discharged and is guaranteed. Unless all the millennials with useless degrees go off the grid or suddenly drop dead? I guess that would be a problem.
The effect on tuition inflation is a problem, but this narrative that somehow the market will collapse due to the amount of student loan debt...somehow...just because, I think is wishful thinking on the part of the indebted people who just really really want there to be something to necessitate the government taking away their financial obligation.
All of this. It's in the fine print of the loan, they're gonna get their money back one way or the other.
Posted on 7/9/18 at 2:56 pm to TDcline
Student loan debt outlives you. If you due your heirs are still responsible for it. The government can also take any wages you may make so while I still think it's a bad lending practice, no it will not cause a crisis like mortgage backed securities did.
Posted on 7/9/18 at 3:06 pm to HempHead
quote:
An interesting idea I've read is for the university (or a third-party lender) to pay for education in exchange of X% of a person's income over Y amount of years.
In the UK
I pay 9% of any taxable income after tax
The rule is enforced immediately as soon as you start earning $30,000, used to be $20,000 before the increase in fees.
Admittedly there is a small portion of people who won’t pay anything back but think it’s a good way to do it, you don’t miss it because it’s never in your bank
Posted on 7/9/18 at 3:11 pm to TDcline
quote:
Student loan debt:
We just paid off my wife's loans last year and mine have been paid off for a while now!
Best feeling ever
Posted on 7/9/18 at 3:11 pm to TDcline
I believe that, at some point, the fed will simply print the money to make up for the losses.
Posted on 7/9/18 at 3:13 pm to Mingo Was His NameO
quote:
Student loan debt outlives you. If you due your heirs are still responsible for it.
Nah, brah. Your estate is.
Posted on 7/9/18 at 3:14 pm to MillerLiteTiger
quote:
Best feeling ever
Never having it in the first place feels better.
Posted on 7/9/18 at 3:14 pm to Paul Allen
I hope it does bust but just a couple years before my kids go to college and hopefully college prices will come way down after.
This post was edited on 7/9/18 at 3:15 pm
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