• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

50% of student loan debt is going into default. Uh oh.

Zalatix

DP Veteran
Joined
Nov 16, 2012
Messages
3,228
Reaction score
662
Gender
Undisclosed
Political Leaning
Socialist
You can't squeeze blood out of a turnip.

Half of Outstanding Student Loan Debt Isn't Being Repaid - US News and World Report

Outstanding student loan debt is now the second largest form of consumer debt, but about half of the $1 trillion in student loan debt isn't being repaid because the borrowers are struggling to make payments, according to an analysis released Monday by the Consumer Financial Protection Bureau.

Using data from the Department of Education and the National Student Loan Data System, the CFPB found that as of June 2013, more than 7 million borrowers were in default on federal or private student loans, meaning they are more than 90 days late on a payment.

"Defaulting on a federal student loan has serious consequences," Rohit Chopra, the bureau's student loan ombudsman, said in the report. "Unlike other consumer credit, borrowers in default on a federal student loan might see their tax refund taken and their wages garnished without a court order."
 

Torrent

Member
Joined
Jul 9, 2013
Messages
61
Reaction score
33
Location
Just outside of the Middle of Nowhere
Gender
Male
Political Leaning
Libertarian - Right
So???

People are going into debt that they didn't need. Is anything new there?
The education they got didn't help them. Shown by the fact they can't pay the cost of it back. They got tricked by the Education Department, Teachers, Parents, etc. to go into debt that they didn't need and couldn't pay back. It's a business risk. On both sides. You take money you can never pay back there are consequences. If you loan money to people who are never going to pay it back there are consequences also.
 

JoeTheEconomist

DP Veteran
Joined
Apr 5, 2012
Messages
2,802
Reaction score
515
Location
Atlanta, GA
Gender
Male
Political Leaning
Centrist
You can't squeeze blood out of a turnip.

Half of Outstanding Student Loan Debt Isn't Being Repaid - US News and World Report

Outstanding student loan debt is now the second largest form of consumer debt, but about half of the $1 trillion in student loan debt isn't being repaid because the borrowers are struggling to make payments, according to an analysis released Monday by the Consumer Financial Protection Bureau.

Using data from the Department of Education and the National Student Loan Data System, the CFPB found that as of June 2013, more than 7 million borrowers were in default on federal or private student loans, meaning they are more than 90 days late on a payment.

"Defaulting on a federal student loan has serious consequences," Rohit Chopra, the bureau's student loan ombudsman, said in the report. "Unlike other consumer credit, borrowers in default on a federal student loan might see their tax refund taken and their wages garnished without a court order."
Interesting information.

The cost to create human capital in this country is absurd. The government should end loans of all forms to any college that charges more than $10,000 a year. Student loans don't help the students. They insulate colleges from the economic reality of pricing.
 

Org

Member
Joined
Aug 12, 2013
Messages
135
Reaction score
58
Gender
Undisclosed
Political Leaning
Very Conservative
So???

People are going into debt that they didn't need. Is anything new there?
The education they got didn't help them. Shown by the fact they can't pay the cost of it back. They got tricked by the Education Department, Teachers, Parents, etc. to go into debt that they didn't need and couldn't pay back. It's a business risk. On both sides. You take money you can never pay back there are consequences. If you loan money to people who are never going to pay it back there are consequences also.
And what else do you expect them to do? Take a low paying job out of high school and hope they'll be able to work their way up the ranks? Students are forced to choose between near inescapable (the large scale trends in American economics are mostly to blame for that) hyper-exploitation and poverty wages, and crippling debt. That's not a choice people should have to make.
 

Torrent

Member
Joined
Jul 9, 2013
Messages
61
Reaction score
33
Location
Just outside of the Middle of Nowhere
Gender
Male
Political Leaning
Libertarian - Right
And what else do you expect them to do? Take a low paying job out of high school and hope they'll be able to work their way up the ranks? Students are forced to choose between near inescapable (the large scale trends in American economics are mostly to blame for that) hyper-exploitation and poverty wages, and crippling debt. That's not a choice people should have to make.
I don't expect them to do anything. It's a choice up to them. If they want to take the collage route and try and make money that way, go for it. If they want to work "some lowpaying job" and work up the ranks. Go for that. People have been known to "make it" both ways. If they want to try the next to impossable and start a business great. But its not a sure thing. Nothing is.

Unless your lucky enough to have excellent network of connections with wealthy family/friends you will have to work hard. Collage is a helping step not a golden ladder.
If you want to join the Military and get them to pay for collage excellent. If you have a grant from the goverment or other Charity that help with collage great. If you can pay your way excellent. But if you borrow money you owe money.
I agree that collage is way to expensive and is ripping some people off.
And the Banks on the other side want to get people into a case were they can charge intrerest, BUT they also don't want a default. (can't get blood from a turnip)
So they have the Goverement back the loans. And the goverement is unforgiving and will take money from taxes and such to get the loan money back becuse they don't want a loss of the money either.
 

CriticalThought

DP Veteran
Joined
Jun 11, 2009
Messages
19,568
Reaction score
8,354
Gender
Male
Political Leaning
Libertarian
I don't expect them to do anything. It's a choice up to them. If they want to take the collage route and try and make money that way, go for it. If they want to work "some lowpaying job" and work up the ranks. Go for that. People have been known to "make it" both ways. If they want to try the next to impossable and start a business great. But its not a sure thing. Nothing is.

Unless your lucky enough to have excellent network of connections with wealthy family/friends you will have to work hard. Collage is a helping step not a golden ladder.
If you want to join the Military and get them to pay for collage excellent. If you have a grant from the goverment or other Charity that help with collage great. If you can pay your way excellent. But if you borrow money you owe money.
I agree that collage is way to expensive and is ripping some people off.
And the Banks on the other side want to get people into a case were they can charge intrerest, BUT they also don't want a default. (can't get blood from a turnip)
So they have the Goverement back the loans. And the goverement is unforgiving and will take money from taxes and such to get the loan money back becuse they don't want a loss of the money either.
It is getting to the point where you cannot even "work up the ranks" at a low paying job without a degree. Busboys are required to have degrees in some places.
 

longview

DP Veteran
Joined
Jan 25, 2012
Messages
28,147
Reaction score
9,772
Location
Texas
Gender
Male
Political Leaning
Conservative
Almost anyone can afford to go to college.
The costs of community college in Texas now is about $1600 a semester,
or about $400 per month.
If a student lived at home, that kind of number is within reach.
This takes care of the first two years, and an Associates Degree.
(the 2 year degree is important, as it locks the credits in.)
So 2 or 3 years after high school, and used to saving $400 a month you
prepare to move to the State University.
You make more now because you have 2 years experience and a AA degree.
You last tuition payment was in January, so by August You should have about $3200.
That's just about what the first semester of state University costs.
(I know some states are more.) and you have demonstrated some fiscal responsibility.
So before you second semester of your Junior year, You apply for a loan for your
last 3 semesters or about $10,000.

If Parents wanted to pay for college around here, it could be less than $500 a month,
over 4 years. About like a car payment.
I still think a 4 year College degree has value, and it's value would likely last longer than a car.
 

Org

Member
Joined
Aug 12, 2013
Messages
135
Reaction score
58
Gender
Undisclosed
Political Leaning
Very Conservative
I don't expect them to do anything. It's a choice up to them. If they want to take the collage route and try and make money that way, go for it. If they want to work "some lowpaying job" and work up the ranks. Go for that. People have been known to "make it" both ways. If they want to try the next to impossable and start a business great. But its not a sure thing. Nothing is.

Unless your lucky enough to have excellent network of connections with wealthy family/friends you will have to work hard. Collage is a helping step not a golden ladder.
If you want to join the Military and get them to pay for collage excellent. If you have a grant from the goverment or other Charity that help with collage great. If you can pay your way excellent. But if you borrow money you owe money.
I agree that collage is way to expensive and is ripping some people off.
And the Banks on the other side want to get people into a case were they can charge intrerest, BUT they also don't want a default. (can't get blood from a turnip)
So they have the Goverement back the loans. And the goverement is unforgiving and will take money from taxes and such to get the loan money back becuse they don't want a loss of the money either.
I'd have to agree with CriticalThought. Job prospects are far lower for non-college grads. So many folk just take a gamble - a shot at the career you want, with debt funding it. It is a choice, but it's like choosing between a week in the desert, and a week at sea. There's a way out, and you get to choose, but it's insane to be put in that situation.

But we do, as you know, have the resources to address the problem. We could simply nationalize/universalize education, or even just provide government relief of debt. It may take Big Gobblement LLC ( ;) ) to do it, but let's face it, the market has failed to deal with this problem.
 

Fisher

DP Veteran
Joined
Sep 18, 2012
Messages
17,002
Reaction score
6,913
Gender
Male
Political Leaning
Very Liberal
Sounds to me like people's college education did not give them the ability to fill out a 1 page deferment/forbearance form, or a 1 page income-contingent form, or they just feel entitled to not pay.

My parents defaulted on one of my sister's student loans but it was because the bank was idiotic not because they were not being paid. They had two loans from the same bank and made separate monthly payments. The bank randomly decided when it cam time for new coupon books that in order to save paperwork they would send a single bill for both the loans. The bank, however, was not allocating the payments to both loans and were putting the combined payment toward only one of the loans. They tried to act like it was my parents fault that the bank was improperly applying the payments and then tried to demand that they pay the payments on the student loan that was not being paid to catch it up or they would sue and garnish my parents. My dad told them awesome, because he would counter sue them for violating federal consumer protection laws and make enough money to pay his lawyer, the loans off, and take a really nice vacation, and have some left over. Suddenly, the defaulted loan was no longer in default and the payments started being allocated the way they were supposed to have been all along.
 

Mason66

DP Veteran
Joined
Aug 1, 2009
Messages
26,376
Reaction score
6,227
Gender
Male
Political Leaning
Undisclosed
You can't squeeze blood out of a turnip.

Half of Outstanding Student Loan Debt Isn't Being Repaid - US News and World Report

Outstanding student loan debt is now the second largest form of consumer debt, but about half of the $1 trillion in student loan debt isn't being repaid because the borrowers are struggling to make payments, according to an analysis released Monday by the Consumer Financial Protection Bureau.

Using data from the Department of Education and the National Student Loan Data System, the CFPB found that as of June 2013, more than 7 million borrowers were in default on federal or private student loans, meaning they are more than 90 days late on a payment.

"Defaulting on a federal student loan has serious consequences," Rohit Chopra, the bureau's student loan ombudsman, said in the report. "Unlike other consumer credit, borrowers in default on a federal student loan might see their tax refund taken and their wages garnished without a court order."
Is that a serious consequence?

They owe the money and the lender has every right to collect.

A court case would be to verify that the money is owed, which is not in dispute in these cases.

Do you suggest free higher education for everybody?
 

Mason66

DP Veteran
Joined
Aug 1, 2009
Messages
26,376
Reaction score
6,227
Gender
Male
Political Leaning
Undisclosed
I'd have to agree with CriticalThought. Job prospects are far lower for non-college grads. So many folk just take a gamble - a shot at the career you want, with debt funding it. It is a choice, but it's like choosing between a week in the desert, and a week at sea. There's a way out, and you get to choose, but it's insane to be put in that situation.

But we do, as you know, have the resources to address the problem. We could simply nationalize/universalize education, or even just provide government relief of debt. It may take Big Gobblement LLC ( ;) ) to do it, but let's face it, the market has failed to deal with this problem.
What do you think people will learn at government run universities?

Just check out the illiteracy rate among high school graduates in most big cities.

The degree wouldn't be worth the paper it was printed on.
 

Org

Member
Joined
Aug 12, 2013
Messages
135
Reaction score
58
Gender
Undisclosed
Political Leaning
Very Conservative
What do you think people will learn at government run universities?

Just check out the illiteracy rate among high school graduates in most big cities.

The degree wouldn't be worth the paper it was printed on.
Can you provide anything to back up the claim that government run institutions are incapable of providing a quality education?

I'd personally cite Cuba which has a higher education system standing far above that of the United States.
 

Mason66

DP Veteran
Joined
Aug 1, 2009
Messages
26,376
Reaction score
6,227
Gender
Male
Political Leaning
Undisclosed
Can you provide anything to back up the claim that government run institutions are incapable of providing a quality education?

I'd personally cite Cuba which has a higher education system standing far above that of the United States.
Anybody that went to a public school, including myself, can attest to it.

I don't need somebody elses opinions on the subject.

Were you public school educated?
 

Velvet Elvis

DP Veteran
Joined
Jul 11, 2012
Messages
4,954
Reaction score
2,195
Location
Midwest
Gender
Male
Political Leaning
Libertarian - Right
Secondary education is not mandatory in our society.

Secondary education is not mandatory for employment. It might not be the employment you want. But you can avoid unemployment.


That being said, student loans are a contract between you and the lender. The lender gives you the money....you pay it back. If you fail to live up to your end of the contract, the lender can abide by the rules of the binding contract to make your life as miserable as possible until you pay the debt off.

Show some freakin' responsibility. If you take out $100,000 to get a degree in something retarded like "Ancient Latin," then your stupid ass will never make enough money to pay that loan off. You are a failure at life. If you take out money that you do not intend on paying back, you are a failure at life.
 

Hypersonic

Well-known member
Joined
May 28, 2013
Messages
1,379
Reaction score
212
Gender
Male
Political Leaning
Progressive
So???

People are going into debt that they didn't need. Is anything new there?
The education they got didn't help them. Shown by the fact they can't pay the cost of it back. They got tricked by the Education Department, Teachers, Parents, etc. to go into debt that they didn't need and couldn't pay back. It's a business risk. On both sides. You take money you can never pay back there are consequences. If you loan money to people who are never going to pay it back there are consequences also.
I am in the hole for over $100k my job field is not looking so hot right now and since I specialize in Behavioral Neuropsychology, my chances of finding a good job are as good as anyone else. If I don't find a job as soon as I graduate I will be among these stats. I agree with you I was sold on the promises since grade school.
 

Hypersonic

Well-known member
Joined
May 28, 2013
Messages
1,379
Reaction score
212
Gender
Male
Political Leaning
Progressive
And what else do you expect them to do? Take a low paying job out of high school and hope they'll be able to work their way up the ranks? Students are forced to choose between near inescapable (the large scale trends in American economics are mostly to blame for that) hyper-exploitation and poverty wages, and crippling debt. That's not a choice people should have to make.
Good point
 

Hypersonic

Well-known member
Joined
May 28, 2013
Messages
1,379
Reaction score
212
Gender
Male
Political Leaning
Progressive
I don't expect them to do anything. It's a choice up to them. If they want to take the collage route and try and make money that way, go for it. If they want to work "some lowpaying job" and work up the ranks. Go for that. People have been known to "make it" both ways. If they want to try the next to impossable and start a business great. But its not a sure thing. Nothing is.

Unless your lucky enough to have excellent network of connections with wealthy family/friends you will have to work hard. Collage is a helping step not a golden ladder.
If you want to join the Military and get them to pay for collage excellent. If you have a grant from the goverment or other Charity that help with collage great. If you can pay your way excellent. But if you borrow money you owe money.
I agree that collage is way to expensive and is ripping some people off.
And the Banks on the other side want to get people into a case were they can charge intrerest, BUT they also don't want a default. (can't get blood from a turnip)
So they have the Goverement back the loans. And the goverement is unforgiving and will take money from taxes and such to get the loan money back becuse they don't want a loss of the money either.


The problem with this is, having a degree in liberal arts doesn't mean squat and most jobs won't recognize a student with such a degree. Society doesn't tell you in the beginning that fields such as philosophy, art, liberal studies, kineseology doesn't get you jobs out of the gate therefore students rack up this tremendous amount of ridiculous debt in a failing economy.


What pisses me off is Wall Street can get bailouts but not students.
 

Velvet Elvis

DP Veteran
Joined
Jul 11, 2012
Messages
4,954
Reaction score
2,195
Location
Midwest
Gender
Male
Political Leaning
Libertarian - Right
What pisses me off is Wall Street can get bailouts but not students.
Students don't need bailouts. They need direction. They need advisors to be honest with them about their B.S. "dreams."

The problem is the colleges themselves. Colleges aren't interested in the students, as much as they are interested in the money. Think of it this way...look at what's on television. It's nothing but crap that the broadcasters know the dumb masses will watch. Colleges are starting to go down that same route. Classes designed for nothing more than to draw students into desks. Classes on "Harry Potter." Classes on "sex in cinema." Classes on "Star Wars culture." These classes aren't going to get kids a job at Starbucks....but they'll get dumb kids to enroll in those classes, because of low attention span interest.
 

Hypersonic

Well-known member
Joined
May 28, 2013
Messages
1,379
Reaction score
212
Gender
Male
Political Leaning
Progressive
Students don't need bailouts. They need direction. They need advisors to be honest with them about their B.S. "dreams."

The problem is the colleges themselves. Colleges aren't interested in the students, as much as they are interested in the money. Think of it this way...look at what's on television. It's nothing but crap that the broadcasters know the dumb masses will watch. Colleges are starting to go down that same route. Classes designed for nothing more than to draw students into desks. Classes on "Harry Potter." Classes on "sex in cinema." Classes on "Star Wars culture." These classes aren't going to get kids a job at Starbucks....but they'll get dumb kids to enroll in those classes, because of low attention span interest.
Your right.

I say cut classes that has no relevancy in job placement. Create degree programs that will give students not only life education but also a chance to attain a job after college.
 

274ina

DP Veteran
Joined
Jun 14, 2012
Messages
4,415
Reaction score
641
Gender
Male
Political Leaning
Other
Why hire the US citizen indentured slave when you can have a Chinaman with a free education(or $100 YEAR) for 10% of the cost to do the same thing.............


Race to the bottom continues...............


(he is a endentured slave because student debt is for life)
 

chromium

DP Veteran
Joined
Mar 6, 2013
Messages
16,968
Reaction score
3,770
Location
A2
Gender
Male
Political Leaning
Undisclosed
I don't expect them to do anything. It's a choice up to them. If they want to take the collage route and try and make money that way, go for it. If they want to work "some lowpaying job" and work up the ranks. Go for that. People have been known to "make it" both ways. If they want to try the next to impossable and start a business great. But its not a sure thing. Nothing is.

Unless your lucky enough to have excellent network of connections with wealthy family/friends you will have to work hard. Collage is a helping step not a golden ladder.
If you want to join the Military and get them to pay for collage excellent. If you have a grant from the goverment or other Charity that help with collage great. If you can pay your way excellent. But if you borrow money you owe money.
I agree that collage is way to expensive and is ripping some people off.
And the Banks on the other side want to get people into a case were they can charge intrerest, BUT they also don't want a default. (can't get blood from a turnip)
So they have the Goverement back the loans. And the goverement is unforgiving and will take money from taxes and such to get the loan money back becuse they don't want a loss of the money either.
I think something you're overlooking is this has the real potential to harm the overall economy, if this trend continues. It's not even that the government doesn't want a loss, but is in fact profiting billions off student loans. I didn't realize that government exists to impoverish its citizens in this way. These loans are given out to 17-18 year olds who clearly don't know what they're getting into or even that, unlike other loans, they can't declare bankruptcy.
 

chromium

DP Veteran
Joined
Mar 6, 2013
Messages
16,968
Reaction score
3,770
Location
A2
Gender
Male
Political Leaning
Undisclosed
Your right.

I say cut classes that has no relevancy in job placement. Create degree programs that will give students not only life education but also a chance to attain a job after college.
If they do this, there goes 1/4 of their students, who thanks to the anemic K-12, can't pass intro math and science classes.
 

CanadaJohn

Canadian Conservative
DP Veteran
Joined
Jan 27, 2013
Messages
28,627
Reaction score
20,383
Location
Toronto, Ontario, Canada
Gender
Male
Political Leaning
Conservative
Paying off a student loan is, unfortunately, about the last thing a lot of self-absorbed young people have on their list of things to do once they leave college/univeristy. New wardrobe, new car, vacations, new place to live, new furniture, yada, yada, yada, all come before paying off a student loan. Self-gratification is the primary goal of many people in this world today and responsibilities remain an afterthought until such time as the government steps in and takes back tax refunds and starts garnishing wages - then the crying begins.
 

Torrent

Member
Joined
Jul 9, 2013
Messages
61
Reaction score
33
Location
Just outside of the Middle of Nowhere
Gender
Male
Political Leaning
Libertarian - Right
Paying off a student loan is, unfortunately, about the last thing a lot of self-absorbed young people have on their list of things to do once they leave college/univeristy. New wardrobe, new car, vacations, new place to live, new furniture, yada, yada, yada, all come before paying off a student loan. Self-gratification is the primary goal of many people in this world today and responsibilities remain an afterthought until such time as the government steps in and takes back tax refunds and starts garnishing wages - then the crying begins.
I agree. I have a friend back home who is a doctor. He paid off his Medical School Bills first and was thought to be backward. His peers where buying sports cars and large houses with there large paychecks but only paying min on debts. 6 years later they still have loans they are paying off. Had anything happened to there jobs they would have been in real trouble.

Debt only matters to people when it comes due. But sure I'll pay for item X, Y, and Z on credit not a problem. A year or two down the road and its WHAT how dare that company demand all this money from me I can't possably pay it back.
 

sookster

DP Veteran
Joined
Jun 12, 2011
Messages
1,838
Reaction score
452
Location
In my own world.
Gender
Male
Political Leaning
Undisclosed
Education inflation. As more and more people acquire degrees, the worth of these degrees falls especially degrees from for-profit schools. Part of the problem is schools are increasing tuition because they can. The government pays for tuition without even thinking about it. But I don't have sympathy. First, the banks have the money. Whenever a loan is issued money is created out of thin air. Debt is just a tool to force people to work, nothing else. This way the economy moves and it is possible to obtain more wealth and power. Second, debt slows the flow of climbing the social ladder. If this is too hindered, a reform will be forced and if action is too late, a failure will take root in the economy which will have lasting consequences to other components of the economy because everything is interconnected. I am not exactly sure what but it is given. The only reason why banks don't supply the debt is because it would undermine the whole system. People would be outraged. It seems that the only way out would to group these loans into a TARF like scenario where they would be removed from the economy, essentially a forgiving scenario.
 
Top Bottom