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LAX772LR
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US student loan debt hits record, surpasses oustanding auto debt

Sat Feb 18, 2017 8:10 pm

Image

US student loan debt hits $1.3Trillion (with a "T")... doubled since just 2009.

It has now exceeded outstanding US auto debt ($1.1T) and is expected to grow by more than $100Billion just this year alone.

Going to be horrible watching this bubble eventually burst. Something will have to give. :(

http://www.nola.com/education/index.ssf ... her_r.html
I myself, suspect a more prosaic motive... ~Thranduil
 
airtran737
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sat Feb 18, 2017 9:26 pm

I took out $35,000 in 2012 at a 9.2% APR from Sallie Mae and managed to pay it all off by December of 2016. I fail to see how people cannot handle their debt properly. Student loans suck, but it's a part of the process. Going to college is not a right, it is a choice, and if you choose to go, and you do not have the means to pay up front, then you accept the burden which you are undertaking in order to get the coveted diploma which so many people still believe is needed in order to be successful.
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NIKV69
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sat Feb 18, 2017 9:42 pm

In before "We have to forgive all these loans"
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LAX772LR
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sat Feb 18, 2017 10:00 pm

NIKV69 wrote:
In before "We have to forgive all these loans"

I know, right?!

I mean, we're the U-S-freakin'-A... we only learn through tragedy and devastation; not by something so ration as observing other developed nations who've relaxed or forgiven student loans, then reaped the economic benefits of those young adults immediately purchasing houses/cars/etc.

Besides, if we did that, then how would we afford the quarter $Trillion to spend on year 16 of the Afghanistan war?
...which BTW, is our longest ever, and at an approval rating (17%) lower than Vietnam ever was.
I myself, suspect a more prosaic motive... ~Thranduil
 
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LAX772LR
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sat Feb 18, 2017 10:13 pm

airtran737 wrote:
I took out $35,000 in 2012 at a 9.2% APR from Sallie Mae and managed to pay it all off by December of 2016. I fail to see how people cannot handle their debt properly.

Well, if you drop the condescending self-righteousness for about five seconds and THINK; you might realize that factors in your situation may not (and likely don't) apply to others.

Here, let's frame it a bit. Tell us:
  • Where'd you live after doing it: Major city, or Smalltown USA?
  • Career require a professional degree? (You obviously didn't go to a decent law or medical school, else you'd pay THAT per semester)
  • How many kids did you have at the time? Bet $35K didn't put much a dent in daycare if so.
  • Need/have a car? That's $$$$ right there.
  • Who was paying your insurance at the time?
  • Or better yet, who was paying for lodging and food at the time?
  • You or a child get sick/hurt at any point? After all, that's the primary reason for major debt default in the USA. A week in ICU could easily charge up more money than you claim to have budgeted. Where would your payoff priorities be then?

Of course, could go on and on. Hopefully you get the idea.


airtran737 wrote:
to get the coveted diploma which so many people still believe is needed in order to be successful.

Pretty sure it's more governing institutions and associations who believe that, not just "so many people."

I mean, if you can share with us how one might legally become a doctor, lawyer, dentist, clinical psychologist, realtor, engineer, etc without a degree and licensing; then I'm all ears.

This isn't like flying: where a bunch of whiny bitches are complaining because they don't get a 20in wide 180recliner on their $199 transcon. We're talking about the core of our future economic composition.

Or is your contention that only those (with the sheer dumb luck to be) born to wealthier familes, should have the opportunity for a high-level career? Let the rest eat cake and dig ditches, is that it?

Image
I myself, suspect a more prosaic motive... ~Thranduil
 
dtw2hyd
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sat Feb 18, 2017 11:21 pm

Don't worry, this system is not sustainable and will collapse under its own weight. At some point all schools will be forced to start online programs putting an end this mockery of education system.
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TheFlyingDisk
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 12:40 am

Not being American, I don't understand why is the loan interest so exorbitantly high.

Surely for education loans the goal is not to make huge profits, is it not?
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stratosphere
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 1:44 am

Look you took out the loan you own it plain and simple. No forgiveness for no one. I paid mine took forever but I did. If you were too stupid to pick a major that had no return on investment thats not our problem, You need to pay it garnish your wages if need be. I have no sympathy
 
airtran737
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 2:59 am

LAX772LR wrote:
airtran737 wrote:
I took out $35,000 in 2012 at a 9.2% APR from Sallie Mae and managed to pay it all off by December of 2016. I fail to see how people cannot handle their debt properly.

Well, if you drop the condescending self-righteousness for about five seconds and THINK; you might realize that factors in your situation may not (and likely don't) apply to others.

Here, let's frame it a bit. Tell us:
  • Where'd you live after doing it: Major city, or Smalltown USA?
  • Career require a professional degree? (You obviously didn't go to a decent law or medical school, else you'd pay THAT per semester)
  • How many kids did you have at the time? Bet $35K didn't put much a dent in daycare if so.
  • Need/have a car? That's $$$$ right there.
  • Who was paying your insurance at the time?
  • Or better yet, who was paying for lodging and food at the time?
  • You or a child get sick/hurt at any point? After all, that's the primary reason for major debt default in the USA. A week in ICU could easily charge up more money than you claim to have budgeted. Where would your payoff priorities be then?

Of course, could go on and on. Hopefully you get the idea.


airtran737 wrote:
to get the coveted diploma which so many people still believe is needed in order to be successful.

Pretty sure it's more governing institutions and associations who believe that, not just "so many people."

I mean, if you can share with us how one might legally become a doctor, lawyer, dentist, clinical psychologist, realtor, engineer, etc without a degree and licensing; then I'm all ears.

This isn't like flying: where a bunch of whiny bitches are complaining because they don't get a 20in wide 180recliner on their $199 transcon. We're talking about the core of our future economic composition.

Or is your contention that only those (with the sheer dumb luck to be) born to wealthier familes, should have the opportunity for a high-level career? Let the rest eat cake and dig ditches, is that it?

Image


To answer your questions;
I lived in Atlanta, then moved downtown Detroit. Average rent was around $1200/month plus utilities, and I lived by myself.

I am a pilot, so you can figure out what level of education that I needed. Prior to becoming a pilot, I held various management roles in the airline industry.

I don't have kids.

I have a car payment on a Ford Edge, and will for two more years. Luckily with excellent credit, my payment and insurance are only $370/month.

I was self-insured for a period of time (roughly $250/month, but then had employer provided health care.

Again, I paid for my own home, and bills.

No injuries, and because I was insured and also purchased long and short term disability insurance, it was not my concern.

I stand by the point that if you choose to go to college, and you choose to assume the burden of student loans, then you choose the anchor that comes with them and the responsibility of paying them off. I will not listen to people whine and cry about how much they have to pay. It'snot my fault that you chose to go to a school like UND, get a degree in aviation science (which does you dick for good if you want to be anything other than a pilot) and come out with $160,000 in student loan debt because you became a pilot and graduated with 300 hours and no job prospects. The same goes to those who amass huge student loan debts and get degrees in fields that won't allow them to pay those loans off and are a burden on them for two decades.
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Aesma
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 3:46 am

So you already had a career and an income before getting back to school. Nothing wrong with that, but not typical, wouldn't you agree ?
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Derico
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 4:16 am

No mercy for human people but lets just have those same people (all taxpayers), write a white check for 1 trillion every time the big CEOs make the choice to bring the world financial system to the brink of collapse.

And people then wonder why inequality has soared everywhere in the world.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 4:34 am

dtw2hyd wrote:
At some point all schools will be forced to start online programs putting an end this mockery of education system.

I think I'm getting a facetious tone here because even online programs are expensive AF. I go to Penn State World Campus (online) and fork over $2790 per course. Granted, this is a masters level course, but for $2790 I could easily do 3 semesters of undergrad back home and maybe 1/2 of a 4th one ($47/credit hour).

The other issue I have with online schools are with how reliable they are. We hear talk of MIT and Cornell and Harvard putting these courses online for people to take and claim credit (apparently for free)...but how does one even do that? I prefer going to a brick and mortar school, but distance learning allows me flexibility so I put up with it. But we're kidding ourselves if we think online programs will be cheaper and more efficient than standard course delivery.

airtran737 wrote:
The same goes to those who amass huge student loan debts and get degrees in fields that won't allow them to pay those loans off and are a burden on them for two decades.
This is the only place I'll agree with you. If you chose to study flower basket weaving, spent $30,000, and don't have a decent paying job, that's your own making. But from the looks of it, it sounds like you already had career prospects and financial stability BEFORE you went to college (not necessarily a bad thing, but you don't fit in with the stereotypical person who's burdened by student loans). I only took $7,000 and paid them back nearly two years after I graduated. Then again, I had a good paid job that enabled me to pay them off and I didn't have a big balance. It's a far cry from wanting to go to law school or med school where loans would be even higher and rules governing interest are different.

I do agree though that people need to know what they're getting themselves into. If you got so many loans it's because you're studying something that you know will allow you to pay it back and let you live a comfortable life. But if you got loans to study Women's Role in 16th Century English Poetry, don't expect any sympathy from me when you graduate and can't land a cushy job.
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MSPNWA
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 4:44 am

Another government/socialism-created bubble. College education is largely a scam. Billions and billions are spent on worthless classes and degrees, and meanwhile the prime years of a person's life are largely wasted and many get sunk in debt and ruin the rest of their financial life. Thank you, government-funded education.
 
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LAX772LR
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 5:52 am

airtran737 wrote:
To answer your questions

So in other words: you lived in a shitty place, with barely mid-level rent, no kids, cheap insurance, and were lucky enough to never have major medical incident...

...gee, as if all THAT wasn't already apparent, from your outlook. :roll:

***************************************
But getting back to the actually important issue, I noticed all of the replies seem to have ducked my deeper question, in favor of the retarded "art history major" talking point.

So I'll ask again:
Please tell me how one might legally become a doctor, lawyer, broker, dentist, accountant, clinical psychologist, realtor, engineer, etc without a degree and licensing?

Because for most of those, you're going to need 6-8yrs or schooling, or more.
And it won't be cheap: you'll be 6figures in the hole, even in public or 3rd-tier schools. It's especially cute when some won't let you (really) work.

So what are we to do, leave our essential professional services to the Eric Trumps of the world? As the purview of only privileged kiddies? That seems to be what several of you are implying.

And since we're getting all guilded-age in this discussion, I think now might also be a good time to remind some of you that Gen-Xers aren't saving at anywhere near the rate of the generation before them (they can't), and Millennials are FUBAR in that regard as well. As costs rise and the populace ages, they're not going to be able to rely on their children (who'll be swamped in debt) in the way that previous generations did.

Anyone who thinks that this is, and will remain, "just a college student problem" is in for a rude awakening over the next few decades..........
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Olddog
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 10:26 am

The system is not really sustainable.

Some are trying other ways : https://www.42.us.org/
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 12:23 pm

LAX772LR wrote:
It has now exceeded outstanding US auto debt ($1.1T) and is expected to grow by more than $100Billion just this year alone.

Going to be horrible watching this bubble eventually burst. Something will have to give. :(

As the old joke goes, if you own the bank $10,000 you have a problem, if you owe the bank $1.1T the bank has a problem!

stratosphere wrote:
Look you took out the loan you own it plain and simple. No forgiveness for no one. I paid mine took forever but I did. If you were too stupid to pick a major that had no return on investment thats not our problem, You need to pay it garnish your wages if need be. I have no sympathy

What is "our" problem is "we" decided to give 18 year olds a way to borrow 5-6 figures of money without in most cases any realistic expectation of paying it off.

Add to that the current privitized "for profit" university system all this has enabled, and we have a train wreck on the way.

The end result is students borrowing large sums of money to get poorly educated whilst small numbers of people get extremely rich off of it, and the students are the ones who get blamed by stratosphere and most others.

Welcome to the USA in 2017.

Don't worry, Trump is in charge so it'll get fixed, he's Superman after all. Maybe he'll work out a scheme where people can burn down some debt by helping to build his wall in Mexico.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 12:45 pm

MSPNWA wrote:
Another government/socialism-created bubble. College education is largely a scam. Billions and billions are spent on worthless classes and degrees, and meanwhile the prime years of a person's life are largely wasted and many get sunk in debt and ruin the rest of their financial life. Thank you, government-funded education.


Government-funded education is most definitely not the shit show that's going down at US colleges... Practically nothing about the US education, health care, social security system is anywhere near "socialism".

Government-funded education is allowing me to do a dual major's program at the University of Heidelberg, one of the nations and the worlds very best, at the cost of 142,30€ administrative fee per semester.
Government-funded education allows kids from socially disadvantaged families to study Medicine or Law without looking down a 6-figure debt hole after working their a**es off for 5 or 6 years to even get a degree.
Government-funded education allows people to progress on the social ladder (ya know, the American Dream, rags to riches and stuff?).
Government-funded education means that access to knowledge is not a commodity to be bought and not a privilege of and to the rich.
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ltbewr
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 1:12 pm

American college/university student loan debt has become a serious problem for individuals, families, lenders and our society. There are a number of factors that have led to the developing default crises and no realistic way of dealing with the bulk of it without compounding issues. I also don't see any real hope in the Trump Presidential Administration and in the states for any real relief but at some point governments and banks will have to deal with it. A discussion of what can be done by individuals, the colleges/universities, lenders and government to deal with this crises and reduce others getting caught in the trap in detail would fill books or entire web comment boards, but let me throw out some highlights:
    Improve the quality K-12 education. Too many enter college poorly prepared academically and drop out short of a degree.
    Start at and do the 1st 2 years at a public/government community college, if possible living with your parent(s). It is cheaper, you can see if college is right for you at all, maybe explore what major you want to consider.
    Consider going to State colleges/Universities, including branch campuses close to home so could continue to live with parent(s) if possible and limit the need to borrow to pay for R&B. State colleges are still about half as cheap as many private colleges. Go part-time/year round or in evening programs so can work for money to pay for school.
    Don't go to a private/for profit 'trade' school as many are expensive and don't lead to jobs or expensive on-line schools like 'University of Phoenix'.
    At school, don't be a party animal with excessive drinking and other behaviors that hurt your grades and ability to graduate or put you at risk for assault or injury.
    Colleges/Uni's must reduce tuition and fees, offer more need based scholarships and reduce excessive costs in administration, facilities, majors with limited job opportunities and ditch costly 'athletic' programs.
    Employers must offer more paid 'summer' or intern programs so students can have more cash to use on school.
    Laws must be changed to allow more to discharge via Bankruptcy or other less drastic methods SL debt due to physical or mental disability, victims of crimes (especially sexual assault) or went to private for profit junk schools.
    Limit personal expenses during or after college.
While there are some issues out of your control including fewer decent paying jobs when get done with school, various parties can make decisions that can help.
 
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Revelation
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 1:40 pm

lugie wrote:
Government-funded education allows kids from socially disadvantaged families to study Medicine or Law without looking down a 6-figure debt hole after working their a**es off for 5 or 6 years to even get a degree.
Government-funded education allows people to progress on the social ladder (ya know, the American Dream, rags to riches and stuff?).
Government-funded education means that access to knowledge is not a commodity to be bought and not a privilege of and to the rich.

That's the way it's supposed to work. Pretty much that is the way it worked for me, too. Fortunately for me my talents took me to a career choice that paid well. At the time I thought it strange that the government would fund every major area of study without any discernment. I knew many of the students around me were taking loans that they'd never be able to pay off once they left school. I always thought adults would come along and fix that, but clearly they didn't.

ltbewr wrote:
Don't go to a private/for profit 'trade' school as many are expensive and don't lead to jobs or expensive on-line schools like 'University of Phoenix'.

I have relatives who are in university administration and they say the expensive schools provide a lot better accommodations/amenities than state schools and since loans and/or parents are paying for it all the kids end up selecting the expensive choices. That puts a lot of pressure for second level schools to either up their game or be pushed out of the industry.

Excellent list, BTW.

It really is time for some adult intervention. It's easy to say that since I was never a parent, though. Parents get guilted into doing pretty much what little Johnny/Janey wants do to because the parents don't what to be told for the rest of their lives that they denied them their chosen path. And since (now) there is so much money at play, the universities have very sophisticated marketing that aims right at the parent's guilt.
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Aesma
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 2:04 pm

Olddog wrote:
The system is not really sustainable.

Some are trying other ways : https://www.42.us.org/


I didn't know they opened a school in the US. Paid for by a French billionaire. In a Silicon Valley full of US tech billionaires. I like it.

Had I been a few years younger I would have tried for it for sure. Studying computer science in France is free, however schools that concentrate on more practical stuff are private and for profit. Still nowhere near as expensive as US schools, but very expensive compared to studying medicine or law (free and free) : about 7500€/year for 5 years.

Now that I'm thinking about it, I'm paying for that school in the US, since I'm a lifelong customer of free, the company behind 42.
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Aesma
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 2:09 pm

Revelation wrote:
I have relatives who are in university administration and they say the expensive schools provide a lot better accommodations/amenities than state schools and since loans and/or parents are paying for it all the kids end up selecting the expensive choices.


There is no doubt that some US universities have incredible infrastructure that must be great to live and study at. Especially if your rich parents are paying for it. Now if you need 20 years to pay back the tuition, I don't know how enjoyable it is.
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Pyrex
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 6:45 pm

The main problem with this is that colleges in the U.S. have gone from a place where you go to learn something into adult daycare. Even if you are majoring in something useful, like engineering, you still have to take a ton of bullshit, completely unrelated courses. I did a (essentially free) 5-year engineering program in Portugal and I had exactly one non-engineering course (and it was a basic management course, where you learned the fundamentals of accounting, budgeting, etc. - arguably something the students should know already if they hadn't instead spent time in high school having to study philosophy instead). In the U.S., if you want to become a doctor or a lawyer you have to spend 4 years playing beer pong at $50k / year before you actually start learning anything related to your intended job.

Make the college experience a lot more focused, fire all the worthless administrators (anyone with "Diversity" in their job title, for a start) and then we can start discussing ways of making it free.
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Kiwirob
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 8:07 pm

LAX772LR wrote:

So I'll ask again:
Please tell me how one might legally become a doctor, lawyer, broker, dentist, accountant, clinical psychologist, realtor, engineer, etc without a degree and licensing?

Because for most of those, you're going to need 6-8yrs or schooling, or more.


You're shitting me, you need 6-8 years education to sell real estate in the US?
 
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LAX772LR
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 8:46 pm

Kiwirob wrote:
LAX772LR wrote:
So I'll ask again:
Please tell me how one might legally become a doctor, lawyer, broker, dentist, accountant, clinical psychologist, realtor, engineer, etc without a degree and licensing?

Because for most of those, you're going to need 6-8yrs or schooling, or more.

You're shitting me, you need 6-8 years education to sell real estate in the US?

It depends on the state.

Here in California, you need a minimum 135 mandatory education credit hours to sit for the realtor's licensing exam.
Considering that most institutions consider 12hrs/semester to be full time, at 24hrs/year it'll take you 5.7yrs to complete--- or more realistically: 6yrs.

It's of course possible to do it faster (if you can devote all your time to it), and plenty do.
I myself, suspect a more prosaic motive... ~Thranduil
 
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Revelation
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 9:00 pm

Aesma wrote:
There is no doubt that some US universities have incredible infrastructure that must be great to live and study at. Especially if your rich parents are paying for it. Now if you need 20 years to pay back the tuition, I don't know how enjoyable it is.


I am no expert on this so I did a quick google which suggests:

Each year, 12 million students use educational loans to help pay for college. Out of these 12 million, 1.4 million students use private college financing to help cover the costs. According to The Washington Post, 90% of all private educational loans are co-signed.


Meaning 10.6 million students get federal loans which largely do not require co-signers. This means the co-signer is the US federal taxpayer. So if the student defaults, the US Treasury gets stiffed. The debtor's credit gets trashed, and things like tax refunds may be seized and wages may be garnished, but as we know those measures don't keep up with the core problem, which is that cheap loans have driven costs up.

Wiki ( https://en.wikipedia.org/wiki/Student_l ... n_programs ) says:

    In 1987, then-Secretary of Education William Bennett argued that “... increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.”[51] This statement came to be known as the “Bennett Hypothesis.” In July 2015 (revised in March 2016), a Staff Report was published by the Federal Reserve Bank of New York, the conclusions of which indicate that institutions more exposed to increases in student loan program maximums tend to respond with disproportionate raises in tuition prices:
      In this paper, we use a Bartik-like approach to identify the effect of increased loan supply on tuition following large policy changes in federal aid program maximums available to undergraduate students that occurred between 2008 and 2010. We construct institution-specific changes in program maximums as the interaction of an institution exposure to the maximums in each aid program (the fraction of qualifying students) and the legislated program maximums. We find that institutions that were most exposed to these maximums ahead of the policy changes experienced disproportionate tuition increases around these changes, with effects of changes in institution-specific program maximums of Pell Grant, subsidized loan, and unsubsidized loan of about 40, 60, and 15 cents on the dollar, respectively.[1]

    The federal student loan program has been criticized for not adjusting interest rates according to the riskiness of factors that are under students' control, such as choice of academic major. Critics have contended that this lack of risk-based pricing contributes to inefficiency and misallocation of resources in higher education, and lower productivity in the labor market.[3] However, recent research indicates that while high levels of student loan debt, coupled with high default rates, present a number of challenges for individual student loan borrowers and for the federal government (which must cover the defaults through taxes), they do not necessarily place a substantial burden on society at large.[52]

It seems absurd that we can let 18 year olds make decisions that put them 5-6 figures in debt with no realistic possibility of repaying it. As above it has caused the cost of education to escalate to absurd levels. Unfortunately the genie is out of the bottle and there's no putting it back in. The "industry" has survived by importing wealth foreign students. According to my educator relatives, one of which worked at a for-profit institute, it led them to admit students that were very borderline. The risk to the system is that accreditation gets yanked, but in practice that is rarely if ever done.

As the thread starter says, student loan debt has just passed car loan debt and a while ago passed credit card debt too. The only form of debt it hasn't passed is home mortgages.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 9:13 pm

Extraordinary student loan debt does not equate to having a pointless major. I don't consider my degree from a part 141 university pointless. My return on investment is extremely delayed, but that's another story. Interest rates on private loans is what's making otherwise sustainable debt, unsustainable long term. And the lack of refinancing options certainly doesn't help. Private predatory lenders, like Sallie Mae, are also hurting themselves in the process: http://money.cnn.com/2017/01/18/pf/coll ... sued-cfpb/
 
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Re: US student loan debt hits record, surpasses oustanding auto debt

Sun Feb 19, 2017 11:45 pm

What ever happen to the golden era where a student tuition at a California State University would be about $130 a semester. (1970's)
 
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 12:35 am

910A wrote:
What ever happen to the golden era where a student tuition at a California State University would be about $130 a semester. (1970's)


Unchecked greed, mostly.

The US education system is as messed up as its medical system... Mostly for the same reasons.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 12:43 am

910A wrote:
student tuition at a California State University would be about $130 a semester.

Which is probably we later Gen-Xers, as well as probably all the Millennials, want to punch older people in the lips when they start talking all that noise about "...back in my day, I had a job and worked my way through college!"
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 2:37 am

MSPNWA wrote:
Another government/socialism-created bubble. College education is largely a scam. Billions and billions are spent on worthless classes and degrees, and meanwhile the prime years of a person's life are largely wasted and many get sunk in debt and ruin the rest of their financial life. Thank you, government-funded education.


Totally agree with this.

And I would add that health care is too. And military contracting. Once you introduce the possibility of 100% US Federal funding, even "honest, reputable institutions" become scam artists pretty much overnight.

The problem is the funding mechanism. If we could go back to the all-cash system, tuition and medical care is paid for in cash, that would be great for people like me, who were taught to actually pay bills. The government involvement has created immense squalor and scamming. People like me have to pay these cartoon sums, $24,000 for some stitches, or I guess $70,000 per year for a kid's college. That's $280,000 to get a basic degree. It sounds like an absurd exaggeration.

Student loans allow higher education to be paid immense sum in cold, hard government cash. It is great for higher ed. They have become addicted to this scam. A lot of these loans will not be paid.

School and medicine prices have gone insane because of market interventions. It's like Venezuela and its bread lines, only it's more money, and we have even less excuse for our ignorance than the Venezuelans do.
 
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 2:49 am

Revelation wrote:
Aesma wrote:
There is no doubt that some US universities have incredible infrastructure that must be great to live and study at. Especially if your rich parents are paying for it. Now if you need 20 years to pay back the tuition, I don't know how enjoyable it is.


I am no expert on this so I did a quick google which suggests:

Each year, 12 million students use educational loans to help pay for college. Out of these 12 million, 1.4 million students use private college financing to help cover the costs. According to The Washington Post, 90% of all private educational loans are co-signed.


Meaning 10.6 million students get federal loans which largely do not require co-signers. This means the co-signer is the US federal taxpayer. So if the student defaults, the US Treasury gets stiffed. The debtor's credit gets trashed, and things like tax refunds may be seized and wages may be garnished, but as we know those measures don't keep up with the core problem, which is that cheap loans have driven costs up.

Wiki ( https://en.wikipedia.org/wiki/Student_l ... n_programs ) says:

    In 1987, then-Secretary of Education William Bennett argued that “... increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.”[51] This statement came to be known as the “Bennett Hypothesis.” In July 2015 (revised in March 2016), a Staff Report was published by the Federal Reserve Bank of New York, the conclusions of which indicate that institutions more exposed to increases in student loan program maximums tend to respond with disproportionate raises in tuition prices:
      In this paper, we use a Bartik-like approach to identify the effect of increased loan supply on tuition following large policy changes in federal aid program maximums available to undergraduate students that occurred between 2008 and 2010. We construct institution-specific changes in program maximums as the interaction of an institution exposure to the maximums in each aid program (the fraction of qualifying students) and the legislated program maximums. We find that institutions that were most exposed to these maximums ahead of the policy changes experienced disproportionate tuition increases around these changes, with effects of changes in institution-specific program maximums of Pell Grant, subsidized loan, and unsubsidized loan of about 40, 60, and 15 cents on the dollar, respectively.[1]

    The federal student loan program has been criticized for not adjusting interest rates according to the riskiness of factors that are under students' control, such as choice of academic major. Critics have contended that this lack of risk-based pricing contributes to inefficiency and misallocation of resources in higher education, and lower productivity in the labor market.[3] However, recent research indicates that while high levels of student loan debt, coupled with high default rates, present a number of challenges for individual student loan borrowers and for the federal government (which must cover the defaults through taxes), they do not necessarily place a substantial burden on society at large.[52]

It seems absurd that we can let 18 year olds make decisions that put them 5-6 figures in debt with no realistic possibility of repaying it. As above it has caused the cost of education to escalate to absurd levels. Unfortunately the genie is out of the bottle and there's no putting it back in. The "industry" has survived by importing wealth foreign students. According to my educator relatives, one of which worked at a for-profit institute, it led them to admit students that were very borderline. The risk to the system is that accreditation gets yanked, but in practice that is rarely if ever done.

As the thread starter says, student loan debt has just passed car loan debt and a while ago passed credit card debt too. The only form of debt it hasn't passed is home mortgages.


You're right, it is absurd. If you try to get a _private_ student loan, generally you need a cosigner (somebody with money) to effectively take out the loan. It is their personal loan. There is a lot of confusion about this. The 18 year old is really incidental.

But for government loans, my understanding is that they are making six-figure loans to 18 year olds. Any banker will tell you that that is a scam, a time bomb. But, similar to the housing crisis, bankers are actually not the operative force here. Bankers are very careful with their own money. This is an issue of insane government policy causing some very damaging effects, and fairly likely, a massive crisis in the future.
 
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 5:04 am

If anyone cares to, since this is an anonymous forum, I'd be interesting in hearing what has happened to those who have defaulted on government issued student loans. From what I can tell, it will wreck your credit history, just like a bankruptcy would, and it leaves you liable to loss of wages and/or confiscation of tax returns. I can imagine those things suck, but if the cold hard reality is you don't have a way to pay back the money, you are stuck with a lot of bad choices.

I did have a friend who declared bankruptcy. It basically cut him off from the banking system. Any sum of money large enough to be of interest to a creditor that showed up in a bank account with his social security number was quickly embargoed. To get around this he was able to use a relative's bank account as if it was his own for things like electronic payroll deposits, but that left him in a bind since that relative wasn't always trustworthy.

Flighty wrote:
You're right, it is absurd. If you try to get a _private_ student loan, generally you need a cosigner (somebody with money) to effectively take out the loan. It is their personal loan. There is a lot of confusion about this. The 18 year old is really incidental.

But for government loans, my understanding is that they are making six-figure loans to 18 year olds. Any banker will tell you that that is a scam, a time bomb. But, similar to the housing crisis, bankers are actually not the operative force here. Bankers are very careful with their own money. This is an issue of insane government policy causing some very damaging effects, and fairly likely, a massive crisis in the future.


Personally I may be naive but I think it's the law of unintended consequences at play here. The goal is laudable. As a nation we need to develop the best and the brightest, not just the richest. Without some form of aid, that clearly is what will happen. The system worked reasonably well for decades due to sensible (and largely self) regulation but now pure greed has distorted the system. As above debt has doubled since 2009. That's what's absurd.

Personally, I don't think fixing this will be high on The Donald's list of things to do, but you never know.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 6:04 am

LAX772LR wrote:
US student loan debt hits $1.3Trillion (with a "T")... doubled since just 2009.

It has now exceeded outstanding US auto debt ($1.1T) and is expected to grow by more than $100Billion just this year alone.


So, where's Bernie and his minions, chanting about auto loan forgiveness? That'd help the economy - and "the little guy" - far better than forgiving student loan debt... ;)
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 6:27 am

Auto loans are another matter entirely, since there is a car to repossess.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 7:14 am

EA CO AS wrote:
So, where's Bernie and his minions, chanting about auto loan forgiveness?

Off somewhere understanding the difference in impact between 5yrs and 25yrs? Between secured and unsecured? ...dual feats apparently beyond your type.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 7:37 am

LAX772LR wrote:
EA CO AS wrote:
So, where's Bernie and his minions, chanting about auto loan forgiveness?

Off somewhere understanding the difference in impact between 5yrs and 25yrs? Between secured and unsecured? ...dual feats apparently beyond your type.


Spare me the insults. Yes, there's no way to "repossess" a degree, and the life of the loan is far different, but once again, if the argument has truly been about unshackling those of limited means from financial bondage, why wasn't there a cry to forgive auto loans, something that arguably burdens the poor far worse than student debt does? Both higher education and automobile purchases are optional, and while you could live out of your car if you needed to, a degree in gender studies won't, by itself, provide you shelter from the elements.

I've long maintained that there's a huge problem with a system that may prevent, say, a young mother trying to buy a used Civic so she can get to work, yet allows a teenager with no credit or collateral to take out a loan for tens or sometimes hundreds of thousands of dollars with nothing to back it up.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 7:49 am

TheFlyingDisk wrote:
Not being American, I don't understand why is the loan interest so exorbitantly high.

Surely for education loans the goal is not to make huge profits, is it not?


Being German i have to ask: Loan for what? Tuition? What is that? Pay for education? Pay for helping the countries economy? Pay to help companies to turn higher profits?

Paying a student for his time i could understand, but paying for university is like bringing money to work.......

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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 8:18 am

EA CO AS wrote:
So, where's Bernie and his minions, chanting about auto loan forgiveness?


You're aware that a lot of Bernie's 'minions' ended up voting for Trump, right?

It turns out that what they wanted, just like the Trump supporters, was radical change, not necessarily a particular political platform.

Well, in Trump they did find radical change... in the sense that politicians and corporations are now freer than ever to push their own agendas as far as they wish.
I'm not sure that's the kind of change they wanted, but then that's what you get when you vote with your emotions rather than with reason.

Now, if you think that Trump will somehow manage to prevent schools and universities from using cheap loans as a way to justify ever increasing tuition, I believe you will find that his drive to deregulate the finance industry, including the loan industry, will make that very difficult...
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 2:05 pm

EA CO AS wrote:
LAX772LR wrote:
EA CO AS wrote:
So, where's Bernie and his minions, chanting about auto loan forgiveness?

Off somewhere understanding the difference in impact between 5yrs and 25yrs? Between secured and unsecured? ...dual feats apparently beyond your type.


Spare me the insults. Yes, there's no way to "repossess" a degree, and the life of the loan is far different, but once again, if the argument has truly been about unshackling those of limited means from financial bondage, why wasn't there a cry to forgive auto loans, something that arguably burdens the poor far worse than student debt does? Both higher education and automobile purchases are optional, and while you could live out of your car if you needed to, a degree in gender studies won't, by itself, provide you shelter from the elements.

I've long maintained that there's a huge problem with a system that may prevent, say, a young mother trying to buy a used Civic so she can get to work, yet allows a teenager with no credit or collateral to take out a loan for tens or sometimes hundreds of thousands of dollars with nothing to back it up.


The theory was that the social benefit of a college degree would last a lifetime whereas buying cars for people would not. Of course the theory and reality are quite different. I agree that a lot of the publicly financed degrees are in the wrong majors, yet there's never been any attempt to incentivize the demonstrably needed degrees. It's been a huge flaw in the system all along. Also back when it started a college degree was pretty much a guarantee of employability. Nowadays industry has gotten a lot more selective, but the system has not been changed to fit that new reality.

In the old days we were told it was OK to let working class jobs go off shore because programs like student loans would create a high talent work pool that would allow us to move up the food chain and get the more challenging and rewarding jobs. These days we see the program has been running on auto pilot and has funded a lot of low value degrees whereas programs in other nations have created a lot of high value degrees so the work flows to them.

It's sad to see so many programs with such good intents go so far off the rails. Now we see the main reaction is to tear them down with no replacement. The outcome of that is that only the truly wealthy are going to be able to afford things like college educations and health care, and countries that have a far more pragmatic approach to things are going to continue to improve themselves at a higher rate than us in the USA.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 2:14 pm

Revelation wrote:
The theory was that the social benefit of a college degree would last a lifetime whereas buying cars for people would not.


What happend if people in the US stopped buying cars? Not much...
What happend if people in the US stopped getting degrees? Back to stone age for everyone.
What would happen if no one made a degree: companies would pay you for making one, because in the end, they need you to have one much more than you do..

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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 2:29 pm

EA CO AS wrote:
So, where's Bernie and his minions, chanting about auto loan forgiveness? That'd help the economy - and "the little guy" - far better than forgiving student loan debt... ;)

Just like a mortgage, an auto loan has collateral: the car itself. Fail to pay up, car is repoed.

Here's a difference though: whereas you need college degrees to even get ahead in life, you don't need a car. It makes life WAY easier, but you can still get through life without one.

As for forgiving loans: it's the same thing as college loans. If you picked a huge vehicle that guzzles gas like crazy and has payments above $400/month (not counting insurance and routine maintenance), don't expect sympathy from me to "help you pay off your loan". Maybe next time, try to go with something more practical and economical until you're financially secured to afford something bigger.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 3:08 pm

Francoflier wrote:
910A wrote:
What ever happen to the golden era where a student tuition at a California State University would be about $130 a semester. (1970's)


Unchecked greed, mostly.


No, it can't be - everyone knows only those dastardly Republicans are greedy, and 90+% of the people who work for universities are Democrats or further left, they could not have possibly been inflating the cost of a college degree with useless crap to ensure a steady stream of income for themselves... must be that one dastardly janitor at a community college who once met a guy who had a neighbor that voted for Trump.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 3:14 pm

Another big issue, especially at State colleges has been massive cuts in the State contributions from general taxation to support them. Other demands for State taxes for other needs and growth to accommodate more students have caused those cuts or tax support declining in percentage of total ops costs.That means more has to come from tuition and fees, so more borrowed.
 
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 3:17 pm

einsteinboricua wrote:
As for forgiving loans: it's the same thing as college loans. If you picked a huge vehicle that guzzles gas like crazy and has payments above $400/month (not counting insurance and routine maintenance), don't expect sympathy from me to "help you pay off your loan". Maybe next time, try to go with something more practical and economical until you're financially secured to afford something bigger.

True, but the problem with the analogy to student loans is (again) we're expecting 18 year olds to make life decisions involving six figures of money correctly, and when they don't, we US taxpayers end up paying for the mistakes they make. We don't even try to steer them in any way towards choices that fill society's needs. Note I chose my words carefully. Society does need some experts in gender studies, it just doesn't need as many as it currently produces. We don't even try to model society's needs and try to make supply match demand, we just let 18 year olds decide for themselves what they should pick.

In many cases it'd be cheaper to just give them a Honda Civic (rr, Ford Focus, sorry Mr. Trump) and send them on their way.

In the past it wasn't as much of a problem because college education had more value, jobs were more plentiful, and college was cheaper. Now all that has changed to a fair degree, and also the for-profit universities have done what for-profit entities always do, maximize profit by minimize services delivered whilst maximizing revenue. They have gamed the system and are the ones reaping windfall profits at taxpayer expense. The fact that student loan debt has doubled since 2009 is a clear indicator of that.

Worth watching: http://www.pbs.org/wgbh/frontline/film/ ... education/
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 3:30 pm

Pyrex wrote:
Francoflier wrote:
910A wrote:
What ever happen to the golden era where a student tuition at a California State University would be about $130 a semester. (1970's)


Unchecked greed, mostly.


No, it can't be - everyone knows only those dastardly Republicans are greedy, and 90+% of the people who work for universities are Democrats or further left, they could not have possibly been inflating the cost of a college degree with useless crap to ensure a steady stream of income for themselves... must be that one dastardly janitor at a community college who once met a guy who had a neighbor that voted for Trump.


It's true that Ronald Reagan's administration viewed colleges/universities as places where liberals were produced and actively worked to defund them. They also viewed college students as another form of 'welfare queens' along with other groups such as people on unemployment or Medicare, and farmers receiving subsidies.

Some factual statements from a fairly opinionated piece:

Today’s student aid crisis has its roots in the 1980s. In 1981, the Reagan administration, with a coalition of congressional Republicans and conservative Democrats, pushed through Congress a combination of tax- and budget-cutting measures.

No federal program suffered deeper cuts than student aid. Spending on higher education was slashed by some 25 percent between 1980 and 1985. In raw dollar figures, cuts totaled $594 million in student assistance and $338 million in Pell grants. Students eligible for grant assistance freshmen year had to take out student loans to cover their second year. For middle-class families, eligibility was changed as well. Low-cost, low-interest, subsidized federal loans were limited to families with household incomes of less than $32,000, regardless of family size.


Ref: https://www.washingtonpost.com/postever ... me-reagan/

Of course Reagan too also fought to reduce taxes on the rich, so in the end all we did was help people like Trump get richer.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 5:59 pm

EA CO AS wrote:
Yes, there's no way to "repossess" a degree, and the life of the loan is far different

If you understand that, then why would you make such an ridiculous comment, or get pissy when you're told you're being ridiculous? :roll:




EA CO AS wrote:
something that arguably burdens the poor far worse than student debt does?

Based on what?

"The poor" often cannot qualify for typical auto-loans, and tend to either buy very old cars outright, or go without, or use to rent-to-own. Yet impoverished youth can qualify for just about any subsidized student funding programs as easily as a millionaire's kid can, if they meet the grade/institutional requirements-- so what is the data that you're using to reach that conclusion? I'd love to see it, because it seems incredibly flawed on its face.





EA CO AS wrote:
Both higher education and automobile purchases are optional, and while you could live out of your car if you needed to, a degree in gender studies won't, by itself, provide you shelter from the elements.

K, since you and everyone else making this "gender studies" distraction STILL keep ducking my question, I'll just keep throwing it at you, until one of you actually steps up to the plate with a direct answer:
LAX772LR wrote:
Please tell me how one might legally become a doctor, lawyer, broker, dentist, accountant, clinical psychologist, realtor, engineer, etc without a degree and licensing?

Because for most of those, you're going to need 6-8yrs or schooling, or more.
And it won't be cheap: you'll be 6figures in the hole, even in public or 3rd-tier schools. It's especially cute when some won't let you (really) work.

So what are we to do, leave our essential professional services . . . as the purview of only privileged kiddies? That seems to be what several of you are implying.
I mean, let's cut to the chase: if your argument is that it's unwise to incur the expense of a higher level degree, unless you were fortunate enough to have parents that could pay your way, then that (i.e. leaving our essential professions to the Hilton sisters of the world) is where we're headed.

And I get that this is the era of Kellyanne Conway-ism, but if you actually believe the incredibly plutocratic crap that you're spewing, then now would be a good time to step up and defend it.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 6:56 pm

LAX772LR wrote:
I mean, let's cut to the chase: if your argument is that it's unwise to incur the expense of a higher level degree, unless you were fortunate enough to have parents that could pay your way, then that (i.e. leaving our essential professions to the Hilton sisters of the world) is where we're headed.

:checkmark: :checkmark: :checkmark:

That's why this problem is important to address. Truthfully it should have been addressed at least a decade ago (the Wiki quote I gave was from 1987 so the problem was seen well in advance) but now a lot of different players have a lot invested in the status quo, so it's not going to be an easy problem to address.
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Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 6:57 pm

airtran737 wrote:
]Going to college is not a right, it is a choice, and if you choose to go, and you do not have the means to pay up front, then you accept the burden which you are undertaking in order to get the coveted diploma which so many people still believe is needed in order to be successful.


An insignificantly small number of 18-year-olds have the means to pay up front. Either their parents do or they do not. My parents did and I became acutely aware of how fortunate I was for that during my studies.

Basing someone's future on whether they have rich parents is not the way a democratic society of opportunity for all works.
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tommy1808
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Joined: Thu Nov 21, 2013 3:24 pm

Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 7:03 pm

DocLightning wrote:
Basing someone's future on whether they have rich parents is not the way a democratic society of opportunity for all works.


Kin selection; )
Many parents don't want their kids to face competition in the job market. Affordable education also brings down wages for academia fast, which doesn't matter for avarage Joe, since he also doesnt have a student loan to pay for in that case, but for the rich kids, that would be rather painful.
Better make educated people a rare commodity, if you have the means to manufacture one.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
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LAX772LR
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Posts: 13278
Joined: Sun Nov 09, 2014 11:06 pm

Re: US student loan debt hits record, surpasses oustanding auto debt

Mon Feb 20, 2017 7:44 pm

DocLightning wrote:
An insignificantly small number of 18-year-olds have the means to pay up front. Either their parents do or they do not. My parents did and I became acutely aware of how fortunate I was for that during my studies.

And even among those kiddies who do have parents that can afford higher education, they often don't get the whole enchilada:

I know plenty of high professionals whose parents helped them through undergrad, but then they were on their own for law/medical school, and thus STILL ended up with 6-figure balances as a result.


DocLightning wrote:
Basing someone's future on whether they have rich parents is not the way a democratic society of opportunity for all works.

And yet, a lot of the (middle class and below) populace doesn't seem to have a problem with it.

In fact, as we can see here in even this thread, some seem to be actively rooting for it! :(
I myself, suspect a more prosaic motive... ~Thranduil

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