[sygazelle]

Originally Posted by Lady Jane

Student debts should not be cancelled. It's a valuable lesson in life that they will have to remember. Maybe the hard way.

I graduated from University with zero debts and money in the bank. Why? Because I studied instead of partying and earning grants and bursaries. And I also worked tending bar after classes, week-ends and Summer holidays while some of my classmates were drinking their loans and begging for money come March or April.

I don't know where they are today, if they even graduated. I have no sympathy for their poor choices in life.

Just my two cents on the matter.

Like you, I graduated debt free. It took me 10 years to get through college because I worked the whole time. For my Masters, my employers had tuition reimbursement so that helped a lot, but it took me 10 years instead of 6 (4 undergrad and 2 grad school) because I worked full time.

I feel a bit for these students who pile up student loan debt because they are climbing such a huge financial hill after they graduate. But it didn't stop them from partying, going for $7 Starbucks, and eating out all the time. Actions have consequences. If their debt is forgiven, what life lesson message does that send?

At the macro level, the education system is broken and needs to be revamped. When I worked in the Netherlands, my colleagues explained the student were put on a university track or a vocational track in something like 7th grade. So, if you weren't deemed university material, you learned a trade instead. This notion that you should go to a university because of social pressure or parent pressure when you don't want to go or you are not cut out for it is a huge waste of time and social expense. Getting loans to get degrees that that have little or no hope of getting a student a job where they can pay back the loan just adds to the social issue.

I'm glad I got a great education and was able to do it without debt. I made a great living and in my case, my education helped me in my career. I feel for those who loaded up on debt and chose degree paths that didn't yield jobs with incomes to pay off the debts. But, these adults signed contracts. Letting them off the hook completely sets a ridiculous precedent.

[2000cs]

Originally Posted by LogicalApex

lol you are comical. After a whole diatribe about profits. Now “many things can be called most anything by anyone”.

Just for the amusement at this point.

What is #1?

#1 is interest on the student loan. This is not a tax, it is the cost of borrowing. While the rate may appear high, it is not as high as credit card interest, for example. The rate reflects the cost of money, its time-value, and the risk of non-payment including late payment (including associated collection costs), and the deferred start to payments for a variety of reasons (one would be loans to a freshman can’t expect to begin payments until after graduation, so at least 4 years). It also likely includes some actuarial cost since not all borrowers will live long enough to repay in full, but I suspect that is small. These loans would not exist without the federal guarantee, which protects the lenders from loss. Taxpayers pick that up, along with program administration costs. None of this is a tax to the borrowers, in fact it is a taxpayer funded subsidy.

[RickFLM4]

Originally Posted by LogicalApex

Higher default rates eat into profit margins. Higher shrinkage and spoilage rates eat into profit margins. Insurance is intentionally about pooled risk so obviously the pool is shared.

Charge high prices because your store is losing a lot to theft. You’ll lose out to the cheaper competitor who has gotten it under control. Charge higher interest rates due to high default rates and you’ll similarly lose out to competition.

But go on. You’ll tell me there is no such thing as competition and companies are not subject to market forces when setting prices.

Then you’ll next tell me they are and you believe in capitalism.

You people speak with both sides of your mouth like your brains are full of holes or something.

You’re almost amusing. But not quite.

[Watching The World Burn]

Originally Posted by LogicalApex

lol you are comical. After a whole diatribe about profits. Now “many things can be called most anything by anyone”.

My word, you are dense. Why even quote me at all if you are going to take it so far out of context and only quote half of what I said? Imma go ahead and bold the part below for your further perusal that I said, and that you seemingly ignored.

Originally Posted by Watching The World Burn

Admittedly many things can be called most anything by anyone, though it does not stand to reason that said thing has therefore been correctly identified and named by that person.

Perhaps now that you've read it again, you'll see that I am in no way suggesting that one can call something anything they want and be correct...simply that they can call it whatever they want, as long as they don't care about being correct.

Originally Posted by LogicalApex

Just for the amusement at this point.

What is #1?

#1 is interest on a loan that was entered into by presumably arm's length parties.

[LogicalApex]

Originally Posted by 2000cs

#1 is interest on the student loan. This is not a tax, it is the cost of borrowing. While the rate may appear high, it is not as high as credit card interest, for example. The rate reflects the cost of money, its time-value, and the risk of non-payment including late payment (including associated collection costs), and the deferred start to payments for a variety of reasons (one would be loans to a freshman can’t expect to begin payments until after graduation, so at least 4 years). It also likely includes some actuarial cost since not all borrowers will live long enough to repay in full, but I suspect that is small. These loans would not exist without the federal guarantee, which protects the lenders from loss. Taxpayers pick that up, along with program administration costs. None of this is a tax to the borrowers, in fact it is a taxpayer funded subsidy.

There is no other lender. We’re talking about loans issued purely by the federal government.

This whole tangent is due to Watching The World Burn being so bent out of shape at the use of the word profit when referring to revenues that exceed expenses on a government program. But also not wanting to call it a tax. But it is “interest”.

Interest is revenue generated on loans which drives profits on loans. Just like rent is revenue generated on real estate that drives profit on real estate.

The double speak is insane.

[Watching The World Burn]

Originally Posted by LogicalApex

There is no other lender. We’re talking about loans issued purely by the federal government.

This whole tangent is due to Watching The World Burn being so bent out of shape at the use of the word profit when referring to revenues that exceed expenses on a government program. But also not wanting to call it a tax. But it is “interest”.

Interest is revenue generated on loans which drives profits on loans. Just like rent is revenue generated on real estate that drives profit on real estate.

The double speak is insane.

Wait - where did I say that the government does not tax people or that I don't want you to say that the government imposes a tax? I don't believe I said that all - only that #1 and #2 are different. One is interest, the other is truly an income tax.

Of course they tax people, that's how they derive a supply of money to redistribute into the form of services. But they didn't earn it in the truest sense of the word.

Even interest charged on loans - from where did that money come from? Did they earn the capital that was loaned? If it was not their capital to begin with, then hard for me to suggest they have earned anything or contributed anything.

Again, this goes back to the previous point wherein I believe you could reasonably view the government as a parasite and be reasonably accurate in doing so.

[2000cs]

This might help on some of the points in this thread: https://thecollegeinvestor.com/39673...student-loans/

I think the discount rate in these analyses is too low (meaning the cost of the program is higher and it is a net loss - or net subsidy) because of the credit risk. But taking the article as it is, I would note that no federal loan programs that I’m familiar with use the term “profit”. I’ve only ever seen “negative subsidy” which implies that the administering department (education in this case) could reduce its share of the federal budget or push some funds to another department.

Also worth noting is the Treasury is the lender, not the dept of Education. This is typical with most (all?) federal lending programs. Grants come from the departments issuing them, and are in their federal budget allocation. Student loan forgiveness administratively is an increase in Ed’s budget being used to pay the Treasury back for the loan.

[dreamingat30fps]

Originally Posted by LogicalApex

As I said many times, I'm actually not in favor of a totally free higher education system. I have no idea where you and others keep getting this from. The student should have some skin in the game and loans can provide that skin. The loans should be capped at how much debt a student is capable of assuming to prevent the debt from becoming crushing as it is today and to provide pressure on the government to do its function of holding schools accountable.

The students aren't the problem here the government allowing states and schools to extract as much as possible from students with questionable results is. The government also planning these systems with the goal of turning a profit is also a problem. The students end up victims in this which is a real tragedy.

There is no societal win for letting students graduate with debt loads too large and so heavy that it weighs down every other area of society.

Did I say anything about you saying you're in favor of a "a totally free higher education system". No.

In fact you simply ignored my point entirely and just ranted about the same old.

Student loan redistribution (which is the topic of this thread) fixes none of the issues you keep going on about.

[murderspice]

Frankly, society lied to a whole generation of children when they said “work hard and you'll get ahead.” The constant display (adulation) of white-collar culture means unless you end up in slacks at an office, you don’t really belong. And how do you end up in slacks at an office? By going to college. No matter the cost apparently.

[ezaircon4jc]

Originally Posted by murderspice

Frankly, society lied to a whole generation of children when they said “work hard and you'll get ahead.” The constant display (adulation) of white-collar culture means unless you end up in slacks at an office, you don’t really belong. And how do you end up in slacks at an office? By going to college. No matter the cost apparently.

Too bad we need many more people wearing jeans & steel-toed shoes vs suits and or slacks. College isn't for everyone, even though society (really, the education industrial complex) brainwashes everyone that everyone needs a degree. That's why stupid, useless degrees like XXX-studies, philosophy and many others that provide no useful service to society.

Flame suit on!

[vreihen16]

Originally Posted by ezaircon4jc

That's why stupid, useless degrees like XXX-studies, philosophy and many others that provide no useful service to society.

No useful service to society? Those french fries don't make themselves!!!!!

[ezaircon4jc]

Originally Posted by vreihen16

No useful service to society? Those french fries don't make themselves!!!!!

And who else is going to ask me paper or plastic?