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Message
re: Student loan debt
Posted on 4/27/25 at 9:19 pm to novabill
Posted on 4/27/25 at 9:19 pm to novabill
quote:Ya know. Given the fact that this shite is VERY MUCH of the government's making, I'd even be willing to listen to forgiveness plans IF AND ONLY IF they were simultaneously attached to STOPPING a repeat. Planning to forgive loans while giving out MORE is asinine.
Clearly loans should be repaid.
quote:Well, there's really no similar product. How many other "loans" exist in the world that you don't have to pay back as long as you're in school? NORMALLY, a rate is attached to some idea of expected rate of return and WHEN that return will occur. If you think students went ape shite with current rates, imagine if they'd been LOWER!!
Banks charge interest to make a profit, is that the goal of the federal government with student loans as well? If so, should it be?
quote:Nope.
Should the federal government be in the student loan business?
But, IF they're gonna be in it how about
1. NO MORE LOANS above the cost of ACTUAL SCHOOL. You'd be amazed how much NON-school these "student loans" are covering.
2. Require at least interest only payments withing 2 years of the origination of the loan or you can't get any new loans.
0
Posted on 4/27/25 at 9:21 pm to novabill
Is the government actually loaning money and pocketing the interest? I thought they guaranteed the loans that banks give out - which is still too much
Posted on 4/27/25 at 9:34 pm to Tigergreg
quote:
Your point is taken, but just because no one notices that a debt is no longer discharged, still means it gets added to the country's debt when not repaid. That's sweeping it under the rug like it never happened.
This problem will never be fixed for as long as student loans aren't dischargeable in bankruptcy. If we ever want this bubble to be corrected, that change MUST happen.
This post was edited on 4/27/25 at 9:35 pm
Posted on 4/27/25 at 9:45 pm to The Baker
quote:
Your tax debt to the IRS is dischargeable through bankruptcy
These debts are dischargeable, but there is a time limit on them. The debt must be 3 or 5 years old (cannot remember) and you must have filed taxes on time. This keeps people from discharging tax debts and then making a lot of money/accruing significant wealth, sort of similar to the idea behind not discharging student loan debt.
quote:
FHA loans dischargeable through bankruptcy
These loans are secured loans - so, presumably, the lender is going to get most of the money back.
I think the taxpayer guaranteeing the student loans should prohibit them from being dischargeable. You could have lawyers and doctors racking up several hundreds of thousands of dollars in debt while in school, only to declare bankruptcy after graduation and making good money right after.
Now I agree with you when it comes to private student loans not backed by the government. I am not sure why these are not dischargeable in bankruptcy..
Posted on 4/28/25 at 6:31 am to Bayou Warrior 64
quote:
Let the banks provide the service and assume the risk.
Because banks are too big to fail. The government would never need $700 billion to $1 trillion to bail them out and not be paid back
This post was edited on 4/28/25 at 6:32 am
Posted on 4/28/25 at 1:27 pm to novabill
quote:
Clearly loans should be repaid.
My question is what should the interest rate be?
It's unsecured debt, so the rate should reflect that. 7-10%.
quote:
Banks charge interest to make a profit, is that the goal of the federal government with student loans as well? If so, should it be?
All loans are built to make money off interest. How much depends on risk. The government's goal, if they are going to lend, should be how much risk should they take.
quote:
Should the federal government be in the student loan business?
No, but if they are going to continue to be, they, and the entire student lending industry, needs to seriously change how they go about it. Lend based on risk. Intended Major, high school GPA, quality of high school, and standardized test scores should all factor into the underwriting process. Continued lending should be contingent on sustained success in school (i.e. maintain a 3.0 GPA).
This is same problem that led to the housing crisis. Just like getting everyone into houses regardless of qualifications, we've been doing the same thing with higher education. We all know how 2008 turned out.
Posted on 4/28/25 at 1:36 pm to novabill
quote:
My question is what should the interest rate be?
Whatever the loan stipulates.
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