What's the endgame here?
lol, u bashin student loans? srzly? they are probably the best loans you can take, I seriously believe that inflation will increase to the point of making these loans a pure profit, even without taking into account the fact that you could invest it and make solid return, as well as getting a top-tier education
>>956638
how do you invest a student loan? in Canada the government gives you loans but they go towards your tuition right away most of the time
do you mean like, if you're wealthy enough to pay for your education (like me) i should take out student loans anyways, and use them to invest for the 5 years that they are 'interest free'?
>Americans
>>956643
I think most people are dependent on the loans, but usually you wouldn't need the full amount, personally I spend way to much on beer and travelling but I still get money over. And yes, if you live in a country where you have to pay for tuition, I guess it's not viable...
>>956638
>I seriously believe that inflation will increase to the point of making these loans a pure profit
Does this sentence make any sense to anyone?
>>956643
Its the same in the US, but usually student loans cover up to several thousand more to account for cost of living. So you can qualify for 10k in loans where 5k gets automatically taken out for tuition and the rest is for housing, transportation, books, etc.
The cost of living is usually greatly overestimated and if you work part time you'd need even less.
Student loans are non-dischargable. Instead of a bubble popping there's going to be a lot of ruined lives and other miscellaneous effects that won't be directly attributable to a student loan crisis.
So you can bet your ass that it will never get fixed.
>>956638
>using private loans to invrst
B8
>>956737
This. There is no collateral to secure them either. With the housing bubble banks forecloses on houses which dumped a lot of stock onto the market which lowered prices.
Default on a private loan long enough and the loan gets sold off to a collection agency for pennies on the dollar. They still make money from the majority of people paying the higher interest rates. Federal loans garnish your wages.
>>956737
Not true. They are dischargable in bankruptcy. However the government almost always agrees to bare bones terms, reduced payment, and interest freezes. It makes it very difficult to prove to the court that their burden will ruin you.
>>956756
If you can make the interest rates work you'd be a fool not to.
I think all the hippies trying to get out of paying back their loans are going to get fucked, while I coast by debt free.
>>956632
>OP doesn't know what a bubble is
Tuition rate isn't high because of inflationary speculation, anon. No, student loans will just keep people with them down, slowing the economy as a whole. THe hope is that the better jobs they receive with their college degrees will be enough to counter that effect.
>>957062
I honest'y don't even see what the problem is. I'm graduating with an econ degree and 35k of debt. Even if I only land a job making 15/hr I can pay off my student debt, rent a modest apartment, feed myself, and put away an extra 500 a month for retirement.
I realize that some people end up making minimum wage, but that should only last a few months at most. Even if you have a degree in womens' studies, you should be able to work your way up to managerial positions in retail or some shit easily and make 30.
I guess maybe the people who are struggling to pay off their loans are the ones who went to private and for-profit colleges? I know that the University of Phoenix accounts for a gigantic share of student loan debt by itself, actually. I guess I'd be hosed too if I had 100k in debt and a worthless degree from a shitty school, but for most people it just seems a matter of budgeting.
>>956664
Yes, real interest rate is the nominal interest rate (the one they post) - inflation. So if your student loan was 4% and there is 6% inflation, the effective interest rate (in terms of purchasing power) is negative.
This and 20% inflation rates in the 80's is a big reason that all the Savings and Loan banks went under at the time.
>>958005
>20% inflation rates in the 80's
70s, you mean. Volcker curbed inflation in the 80s.
>>958005
You need to account for opportunity costs, though.You might have an accounting profit, but probably not an economic one. You're still paying off a monthly payment which you could be investing in something else.
>>958005
>the 80's is a big reason that all the Savings and Loan banks went under at the time.
no it's not. you need to start a new thread to talk about this bullshit
I think the markets largely work themselves out via trade schools and specialty programs. There will of course be a minor dip once some students start defaulting en-masse, but that will be a while from now.
>>958344
>defaulting en-masse
>a while
Within 3 years the majority will default.
>>956632
the student loan market is actually tiny and 80% of it is government loans
In the long run it's fucking stupid
>economy needs to grow
>need people to buy houses and cars and have kids and buy more shit
>all the young people are broke as fuck
>I know lets just import poor Mexicans that'll kickstart everything
>>958407
Let's assume that's right.
So what? Defaulting on your student loans isn't like defaulting on a mortgage. The student still has to pay the loan even if htey default on it. Sallie Mae doesn't have to just chalk it up to a moral hazard and call it a day.
>>958431
Why do people tend to latch on one thing as if it's the most important? Do you honestly think illegal immigration is anything but one of thousands of small contributing factors to the economy and economic policy?
>>958431
It's a good idea...if there are plenty of decent paying jobs out there. Unfortunately those kinds of jobs are becoming scarcer.
The student loans don't really exist, they are gov't backed and therefore going into Bonds. we are poised to pop one of the largest bond cycles ever. the longer it takes, the more the interest rates are going to have to rise to compensate in the future. There is going to be a reckoning eventually. but the student loans are so flexible in their repayment terms that it doesn't matter so long as you're on the phone letting them know.
>>958464
You realize a the people who are most likely to default on their student loans are the ones with huge amounts taken out through private banks like Sallie Mae, right?
>>958466
Who underwrites the loan?
>>956664
$10,000 of my student loans have a low enough interest rate that they would roughly retain their real value if inflation was at the moderate levels we saw in the mid 2000's.
>>958471
Not the US government, if that's what you're implying. Sallie Mae charges a much higher interest rate to compensate for it, and they require a co-signer.
>>956632
Millions of debt slaves.
A weakened people who rely on the government and will bitch less when they do retarded shit.
Never go to college unless 1) you have a full scholarship, 2) you major in something with a solid job market that strictly requires a degree in that field (medicine, accounting, some other STEM usually)
>>958526
>The STEM meme
https://www.salliemae.com/about/investors/asset-backed-securities/smb/2015-b/
>>958471
It says here Chase, Barclays and Royal Bank of Canada.
Total Debt $714M, Basically a tick on a dogs ass
>>958453
People are retarded
As a society we've decided that college is practically a right guaranteed to everyone, but we also don't want to pay for it
And we aren't willing to compromise on either
So our policy makers, in an attempt to satisfy these completely conflicting demands, make student loans available to everyone but don't let people default on the loans ever
It's not a debt market it's a fucked up welfare program that enslaves retards
>>956632
>Liberals realize that college educated people earn more
Wow! College must be a magic earning potion! Nevermind the fact that the type of people who go to college are more intelligent and ambitious than those who don't, that would go against our world view! Everyone needs to go to college!
>Liberals give free money to people who would never qualify for regular loans, offer worthless degrees at massive prices to retards.
Huh, all our youth are drowning in debt while being unemployed and contributing nothing to the economy! This must be because of the republicans! The only answer is to double down on the policies that got us here in the first place! Send MORE people to college and devalue the experience further, while paying for it with other people's money!!!
Bernie Sanders 2016
>Feel the Bern
>>956965
Federal student loans are not dischargeable.....
>>958855
>increasing a person's productive ability through education
>a bad thing
The problem is the lack of meaningful investment by business at the moment. It's easier to make money by inflating your stock price than it is to make money by improving and growing your business, so companies aren't expanding and hiring workers. It's a problem of misplaced incentives.
>>958875
They are dischargable. Bankruptcy Courts are some of the most powerful in the country. However the burden of proof for bankruptcy, is very difficult if the federal gov't is willing to accept 25$ a month to satisfy 40k in loans due in 5 years. and other income based repayment deferment programs, and grace periods.
Its a government only loses situation and as a lender they are extremely gracious.
Read it Straight from the gov site
https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation#discharge-in
And there are alternatives. You can get it payed off through stuff like the peace corps, the military, teaching in shitty schools, Refinancing, and then filing bankruptcy.
>>956632
>What's the endgame here?
Banks whine about it and get bailed out because they're "too big to fail"
Some kind of market correction
Life goes on
>>958891
are you chinese li?
>>958891
>25$ a month to satisfy 40k in loans due in 5 years.
$25/mo for 5 years is only 1500 dollars..
>>959366
That's what bankruptcy does. If you can prove that even that was onerous they get satisfied or dismissed. or they extend the terms, or settle in some other way.
The gov't can't say we dumped a bunch of money on retards. they can say "we've had a successful default reclamation rate of 25% way above industry standards."
but I agree that's probably hyperbole.
>>958891
99.99999% of federal student loans cannot be discharged in bankruptcy. Same thing as non-dischargable with the exception of living in a cardboard box.
>>959415
There aren't even that many student loans in the country that you can be precise to 7 figs.
Who cares if its deferred payment forever. after 10 years they've reached the statute of limitations for collecting a debt anyway, and after 7 don't affect your credit score at all.
Live in a cardboard box for a month for $40k discharged. Most people should consider that. Its a pretty sweet deal.
>>958844
We're not talking about government loans though. Those are forgiven after a period of time anyway. It's the private loans that are the problem. That's what people are defaulting on.
>>959434
Federally subsidized student loans have no statute of limitations on collection of past due debt, and cannot be discharged in bankruptcy.
>>959434
>There aren't even that many student loans in the country that you can be precise to 7 figs.
Today I realized that Li Sheng is actually autistic.
>>959442
I've always wondered why all these people bitching about their worthless degrees and 20 billion dollars of student loan debt don't just run off to Canada.
>>959434
>There aren't even that many student loans in the country that you can be precise to 7 figs.
There are 7 million student loan debtors in default alone. There's easily 7 figures of people with student loans.
>After 10 years they've reached the statute of limitations
Federal loans (as in most student loans) have no statue of limitations.
I know you're just going to pass this off because it's some comment on a japanese anime board but I hope it gives you some incentive to investigate the horrible problem on the horizon that a student loan economy presents and account for it in your future plans.
>>959434
One of the criteria for discharging a student loan is that a good faith effort has been made to make regular payments. Legal precedent has established this as making 5 years +/- of regular payments.
Assuming you can clear that hurdle, the amount discharged is considered taxable income. This tax liability cannot be cleared by the bankruptcy court, as it does not exist prior to the debt reorganization becoming final. They can't discharge future debts.
So if I owe 50k, I have to pay at least the interest on it for 5 years, which is about 12k total, then move into a box and file for bankruptcy. If I'm lucky enough to get the loan discharged, I now owe 5k in income tax.
So I'm 6 years out of college, I'm out 17k, my credit is ruined, and I live in a box.
Pretty sweet deal.
>>959472
>spend 50k
>waah I only have to pay back 17k ;______;
>>956632
wishful scenario
>all students default
>their credit goes to shit
>universities fold
realistic
>debt forgiveness
>universities increase tuitions
>debt just moved to someone elses balance sheet
but really, students are not too big to fail.
>>959477
>Do unpaid labor
>Owe money for the right to do that labor
>>959491
>volunteer to do free work that noone wants
>'sure I'll pay to do the work'
>what do you mean I have to pay for something I said I was going to pay for?
>>959495
Noone will ever say we should not have an educated populace, it's just that people are stupid to be paying for a formal 'education'
>>959498
That's naive idealism, though. Education isn't important because of its human capital. It's important because it signals to an employer that you're qualified. The most important part of college is that little piece of signed paper you get at the end--not what you learn.
You try applying for a job at a financial firm with "I read a bunch of books on finance" on your resume and see where that gets you.
>>959488
>universities fold
Why would universities suffer? You owe the bank and/or government, not the college.
>>959498
It's stupid that employers demand a formal education to do even the most basic work. You could learn to do most jobs in less than 2 years.
>>959531
Yes, but when there are 10 times as many people willing to do a job, many of them dumb, it's better to have a quick little indicator of whether or not they have a baseline competence and ability to commit to something.
>>958885
>increasing a person's productive ability through education
Please explain how studying Shakespeare, Psychology 101, or Mass Media Communications increases a person's productive ability. Outside of a few narrow fields (hur dur STEM), the vast majority that you do in university is just plain intellectual masturbation.
If we wanted productive citizens, we would have a system like the Asians or the Germans do. No bullshit, not frills, learn a skill, trade or field. But no, what Americans want is a 4 year college-lifestyle vacation, complete with football games, giant gyms, safe spaces, Philosophy of Star Wars courses, AND they want their 75k a year job when they walk out.
>>959627
And if you choose the right major, you can get everything you just described no problem.
>>959627
This this this this this this holy shit this
>>959434
I'm speaking in general obviously. Although it wouldn't surprise me if that percentage is close to accurate.
Who cares if you live with deferred payment forever? I would say anyone with assets or an estate they plan to pass on at some point. You can dodge and hide from it but that debt isn't going away. There is no statute of limitations on federal student loans to my knowledge. They're not the same as private loans or your average consumer debt. Garnishing tax returns, social security, liens on property etc. They have a lot of tools at their disposal to collect above and beyond your average creditor.
I get you're pointing out a technicality but for all intents and purposes (real world scenarios), federal student loans cannot be discharged in bankruptcy.
Even the homeless route is unlikely to hold up honestly. In a bankruptcy they dig into your finances going back two full years. Pay stubs, tax returns, bank accounts, investments, inheritances, lottery winnings, assets - including how many and what type you bought/sold, the dollar amount you paid or got paid for them, what form you received the payment in, the dates of those transactions, you name it. It's not a walk in the park.
You would have had to be living that way (in a cardboard box) for quite some time to have a chance. Even if you were, it's unlikely you would be able to meet the five years good faith/on time repayment history living in such a way. So you would not be eligible for discharge of those debts anyway. Try doing it a month or two before filing? Best case the trustee is going to see right thru that and dismiss your petition all together. Worst case you'll be charged with bankruptcy fraud.
The alternatives you list are good advice for getting out of or help with student loans but you're way off on the bankruptcy thing.
They will be getting their money (or as much as you're able to afford), whether you're dead or alive, literally.
>>959525
But when the students stop getting loans they don't attend colleges
>>959859
Fair, but if banks like Sallie Mae struggle, you're only talking about the upper-end of debt that'll stop being handed out. Government loans will still be handed out and banks won't just stop giving low-risk loans.
I think colleges would take a hit, and maybe some of the bloodsucking for-profit ones that currently account for more debt than anyone else might collapse, but I don't see any feasible scenario where the US college system breaks. And that's a good thing. As imperfect as our system may be, it's still better than a nation full of high school diplomas.
Ask a guy who hasn't paid anything on his SL's in 5 years anything.
I'm considering just making a deal with the debt collectors and paying X amount once and for all to be done with it.
>>958526
>Never go to college unless you have a full scholarship
>>959522
>That's naive idealism, though. Education isn't important because of its human capital. It's important because it signals to an employer that you're qualified. The most important part of college is that little piece of signed paper you get at the end--not what you learn.
You guys should really overturn that court ruling which barred employers from using IQ tests so the college racket dies.
>>960304
He's right, though. It's piss easy these days unless you're an unambitious retard.
>>958891
I'm actually in the process of refinancing all of my student loans under a heloc. Not because I intend to default, but because now that they are no longer deferred, the interest rate on the heloc is lower than my loans.
At least 2009 was good for something.
>>960312
IQ only accounts for one part of the signalling. Not the commitment part.
