I think we have to consider what's best for society. Having so many people living the first half of their working lives buried under tens of thousands of dollars in debt is going to hurt all of us, even those who were "responsible" with their loans. Too many important jobs in society require lots of education but don't pay well enough to actually cover living expenses and loans. Think counselors, educators, even nursing is moving in this direction.
We need to bite the bullet and help these people, otherwise, we will all suffer the consequences. These jobs will go unfilled, people will be homeless or living in poor conditions, and it will be future generations that bear the costs from this.
Are these professions immune from supply and demand?
Which is exactly my point: most of these jobs will go unfilled and the workloads will be passed onto those who've stuck around -- and they won't earn more money because of it.
I have several members of my family which are different degrees of fucked though. Teaching and counseling were never paths to riches, but in our current situation, they are paths to poverty.
This is maddening nonsense.
I started college in 1999. Jokes about English majors asking if you want fries with that were mainstream when I was in grade school. There isn't a single person who has attended college in the last 40 years who didn't have enough information available to make better decisions (in market terms) about what to study. Kids will be kids and they'll make bad decisions. Fine. But there's nothing new here (except that, obviously, the consequences of those bad decisions get larger as costs rise).
Right now, under US law, you can't declare bankruptcy from student loans. A bailout would imply changing that rule so that we can let people with student debt off of their obligations.
You'd also, natch, be bailing out the people who hold this debt.
I'm really not sure what the path forward is, here. Theoretically, the most important line of defense against a bad loan being made is that the lender doesn't want to lose money, and therefore won't make a bad loan in the first place. This isn't always awesome on its face, because it means that people don't get to buy things they don't have the money for right now. But it's really kind of nice. It also protects people from taking on debts they can't afford, because that translates into default risk. And it protects people from taking on debt to buy things that are overpriced, because that translates into collateral risk.
But at some point we decided that being able to get certain kinds of loans (mortgages and student loans) is very nearly a natural right, because they give access to things that we associate with prosperity (land ownership and a postsecondary education). So then the government sets up programs to greatly reduce the barriers to access to these kinds of loans, by essentially setting up a whole bunch of special rules and programs that make it easy for lenders to ignore default risk. And if you don't care about default risk, you'll make much bigger loans than you would otherwise, which fuels prices getting out of control.
We saw how that went down with housing. Now we're going to see how that goes down with student loans. I'm not sure there are any good answers there. Personally, I like the idea of leaving lenders to sink or swim. They've had a nice long ride on a gravy train fueled by government largesse, and, if they failed to contingency plan for the possibility that someone might turn off the gravy spout, I don't feel particularly bad about that. But the lenders are financial institutions, and, as we've seen, the financial industry is such a horrible tangle that it's hard to anticipate the ultimate repercussions of letting them fail.
But it's also hard to anticipate the repercussions of a bailout - money doesn't grown on trees, so the funds used to make the bailout need to come from somewhere. When it comes to government intervention on this sort of thing, though, I'm kind of inclined to take my mother's advice: "It'll never heal if you don't stop picking at it."
So sure we could discharge loans while also bailing out the people who made these loans, but again they are different questions. As you say their are long term issues with the availability and cost of student loans.
I don't have any great answers, but framing things as only two options is greatly simplifying what we can do.
In reality, changing the bankruptcy rules around student loans will have to be paired with a bailout of the people holding the loans. Lobbyists will make sure of that.
Currently, if someone dies broke after graduation the outstanding loans are paid back by the government. So, basically people are making risk free loans right now, changing that so they take some risk is an option.
IMO, loans should be dischargeable in bankruptcy 20 years after graduation. That would slightly increase the loan interest rate, but not cost taxpayers a dime. We might also see things like higher interest rates for getting an art degree which IMO is a useful feature.
That may be the case. Which points of how student loans or taxes work in the US are relevant?
Student loans represent a bet that your degree will improve your job prospects and that your future earnings will more than pay for your degree. The loan is you paying for your own further education. Society could have paid for it through taxes, like it did for K - 12 education. I would like to point out that I will pay for future generations throughout my working life.
Taxes is a way of providing goods and services for society (read: people in a community) by having society pay for it. Taxes is a pool of resource that people in government are able to spend.
> 2. Your misplaced anger should be pointed at the rotten system that forced you to live on ramen noodles for 3 years even after getting a degree and presumably a good job.
Hmm. It's hard for me to redirect my anger to the system. Let me show my thinking and maybe someone can clear up where my thoughts are going astray.
All levels of Education has a price. I was not producing while I was going through college; I instead was taking. Society could have paid for my education, like it did for my K - 12 education. But instead I paid for my own education, by taking out loans and working while earning my degree. This puts an onus on me to choose a degree that could pay for my loans after college.
I like the idea of bearing the responsibility for later success by my choice in degree. I don't know if I would have the same sense of responsibility if I knew society was paying for my degree.
When I think about paying for other's degrees I think of the students who didn't consider the situation appropriately, and instead chose a degree that has little job prospects and aren't entrepreneurial enough to use their education to further their income. This is a very transactional way of framing the issue but I think this is the right way to frame it.
I suspect that the price of education is so high because of how much easy money there is out there. Everyone can get a loan, no matter what degree they're investing in. Since the supply of money is so readily available, schools are able to demand more for their product. I am slightly mad at that because the market of education was meddled with by the U.S. government.
What is rotten about this system, beyond the U.S. government messing with Education's market forces?
I spent three years cutting everything out of my life that wasn't necessary so that I could pay off my $50,000 in loans because I didn't want to have the debt. It was a Spartan existence indeed.
Now that I've made that sacrifice and come out the other side, it makes me mad to think that I may have to pay for others to pay off their debts as well. Why can't they pay it off themselves? No one forced them to take on the loans. Why is my paycheck being considered for looting?
I would feel taken advantage of too. If I knew I could get someone else to pay off my student loans, I would have used my resources much differently. I would have lived more in the moment instead of hunkering down and paying it off.
Like I said; selfish thoughts. But I can't help but feel a sense of injustice when considering a situation where I have to pay for other debtors student loans.