Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by talltimtom on Sunday May 20, 2018 @05:27AM
(#17111977)
As the article clearly shows, the risk in student loans is that the student will accrue more debt that they can handle and not get a high enough income to pay down the principle, in which case the lender will end up getting their money back far far slower than planned. Just because there isn’t a risk of default doesn’t mean there isn’t any risk. If American Student loans were risk free profit at 8% the entire financial market would rush to invest, bringing about competition and driving down the rates.
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by mhuffman on Sunday May 20, 2018 @10:24PM
(#17115806)
> end up getting their money back far far slower than planned
"Their money" is where we have a disagreement.
They get to create that money (nearly) out of thin air.[1]
[1] https://www.investopedia.com/articles/investing/022416/why-b...
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by hathathat on Sunday May 20, 2018 @12:40PM
(#17113571)
> Banks get to create the principal that they loan out of thin air[1]
I’m not sure how you get this from your reference - people deposit money at a bank, and the bank lends (gives!) some of that money out to (e.g.) students. The “creation” comes from both the depositor and the borrower thinking they have the money.
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by mhuffman on Sunday May 20, 2018 @10:21PM
(#17115795)
> people deposit money at a bank, and the bank lends (gives!) some of that money out to (e.g.) students
People deposit money at a bank and the bank lends out 10 times as much!
Granted the "new money" is destroyed as the principle is paid back, but its new money out of thin air -- and the interest is real money!
Here is a more easy-to-read version[1]
[1] https://www.investopedia.com/articles/investing/022416/why-b...
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by jstanley on Sunday May 20, 2018 @04:29AM
(#17111821)
> I am fine with hounding them for life the principal and even not letting them discharge it with bankruptcy
Why?
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by SOLAR_FIELDS on Sunday May 20, 2018 @04:41AM
(#17111853)
The idea is that you can’t “give back” the education so if you could discharge student loan debt the whole system would probably collapse as students would just finish their education and declare bankruptcy.
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by user5994461 on Sunday May 20, 2018 @05:05AM
(#17111911)
The idea is that students have nothing to lose and a mountain of debt when they graduate, so they should systematically declare bankruptcy to erase the debt.
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by Turing_Machine on Sunday May 20, 2018 @06:32AM
(#17112138)
The bankruptcy would remain on their credit report for seven years (affecting their ability to buy a house, rent an apartment, or perhaps even get a job), so it's not at all correct that they have "nothing to lose".
Re:I've Paid $18,000 to a $24,000 Student Loan, and I Still ...
by user5994461 on Sunday May 20, 2018 @07:37AM
(#17112309)
It's not like they could repay hundreds of thousands of debt and buy a house within 7 years anyway.
Banks get to create the principal that they loan out of thin air[1], lend it at ridiculous interest rates to students and have it guaranteed by tax money...they do not have my sympathy!
Risk usually dictates interest rates. Meaning that there must be a chance for you to lose the money, but that is not the case with most student loans. Yet they still charge high interest rates.
It is criminal that zero-interest (or near zero) loans are not available for students from the government. I am fine with hounding them for life the principal and even not letting them discharge it with bankruptcy, but the interest is practically evil considering the banks take no risk at all.
There is literally nothing we can invest our tax money in that will return bigger gains than education and healthcare.
[1] https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...