I’m curious that it makes me an ass to believe that no matter who your are, you should pay your debts. That goes for banks, industries, farmers, and students.
As I mentioned in another comment. I do believe the law needs to be changed to make student loans dischargeable in a bankruptcy.
The rest of your comment will take a lengthy reply, so I hope you stick around.
You are correct that education has far outpaced the rest of the economy when it comes to inflation. I believe there are two factors at work there.
First, we have glorified education at the expense of the trades. I grew up in the 70s and the roots of that were already beginning to take hold. The adults around me praised and respected (though that’s not quite the right word) the “educated”. They would say things like “if you want to amount to anything you need a college education!” While at the same time complaining about what the plumber, or electrician, or mechanic charged them.
When I went to high school I went to a school that had been “boys only” (a bad thing) until shortly before I started in 1977. They taught the trades. In fact I had to take eight introductory courses in various trades my Freshman and Sophomore years (a very good thing).
But educators bit on the whole “if you don’t go to college, you will suck as a human being” thinking. Parents of course want what’s best for their children, so they pushed their kids into colleges. Many of those kids would have been far happier elsewhere.
As an aside, my high school still exists, but I don’t think you’ll learn the trades there anymore (I may be won’t about that as I haven’t paid attention in many years, but I think I’m on pretty solid ground with my claim.)
More customers competing for limited resources raises prices. That said, it’s not the main culprit.
The main culprit is the fact that there is no means-testing for student loans. Need a loan to go to school? Here’s a check.
There was no financial pressure for universities to constrain costs. They knew that lenders would pay for someone’s schooling regardless of cost, because those lenders had absolutely no risk!
This created a horrible downward spiral. Too many highly educated individuals competing for too few jobs has created a morass that will take generations at least to resolve.
We have too many highly educated folk, and too few folk willing to do manual labor in the trades. I can’t count the number of trades people who have told me that they just can’t find good help!
Of course too few people working in the trades has created another sort of inflation. That in turn impacts all of society.
Of course some are. Hell I’m married to a Soldier and I see predators preying on young Soldiers all the time. “Use your enlistment bonus to buy this cool Challenger! You’ll only be paying 20%!” (I didn’t believe those who take these loans should have them forgiven either).
I’m unsure that student loans can be placed in that category. Perhaps if you got a student loan for Trump University (or any other for-profit University) I’d consider it predatory. But most people know full well what they’re doing when they choose to go to university, and choose to borrow to do so.
As I said in the post that you responded to, I think making the debt dischargeable in a bankruptcy would make lenders far more cautious about who they make a student loan to, and that would start solving the problem as university’s would actually have some pressure on the price of the education they would like to sell you.
But as you pointed out above, children were (and are) being pushed into colleges whether it’s right for them or not. Hugh schools are measured by college admissions rates of their students, and so are pushing kids into this debt without any real voice on the other side telling the students they have other options.
Colleges are pushing new students towards financial aid without spelling out the true costs of those loans. All of this to people who often have almost no financial literacy or experience to understand the impacts. They are exactly like the soldiers you just mentioned. So by all means student debt is predatory.
Its clear you are not open to considering some debts as beneficial to discharge, so I won’t waste the time explaining the vast net benefits of infusing our younger and middle aged generation with cash flow that they would by every measure largely reinvest in their communities, making everyone better off. But can we at least agree that student debt is at least as predatory as shitty car loans to young enlisted recruits near bases?
I dont quite get how you can write all that out, and even admit that student loans are predatory and then turn around and say, whelp, you signed up for these loans when you were a kid, so you should just buck up and pay them…
So I personally think that a huge part of there not being anyone available for the trades was the 2008 recession.
I started college in 2002, while working full time in the trades. By 2004, I’d dropped out of school. In 2007 I had a construction company, and 15 full time employees, and another 15ish part timers working for me. By May of 2008, I had to lay everyone off, and I couldn’t find any work. Of those 30ish people I had working for me, 1 is still in construction.
We did historic remodeling. These were guys that did everything from custom plaster and woodwork, to electrical and plumbing. There was no work, and we all moved to other shit. By the time work came back, it wasn’t worth going back to it.
Holy shit, that’s tragic. The loss of so much skilled labor is a huge loss in so many ways. I congratulate you on building something awesome, and I’m sorry you lost it.
Windows DevOps Engineering. It’s way easier on my body, and I never have to stalk a builder to get them to pay.
I was just one tiny company in a tiny city. I’d be willing to bet that there’s a 5-10 year gap in the ages of people in the trades. There are a lot of stories like mine. People that were early to mid skill when 2008 happened and had to reskill.
Frequently, student loans were the only way to survive. We went back to school because there was no work. In my area you had to work or volunteer to stay on food stamps. The places that were approved to volunteer at were only allowing people with kids to volunteer.
I took $38,000 in student loans. I’ve paid $52,000 back on those loans. I still owe $54,000 on those loans. Both in 2002 and 2008 the mantra from the financial aid offices was “take the loans, deffer, consolidate, then deffer again, by then you’ll be making enough money to pay them.” They didn’t explain how compounding all of that interest would mean that every $1 you signed for would actually be $3 in money you have to pay back.
That’s another part I don’t think people are talking about. Frequently, all that’s being forgiven is fees and interest. No actual money is being lost, just potential money. If they retroactively set a 10% cap of profit from student loans, a huge number of people’s balances would disappear.
Starting at the bottom…
I’m curious that it makes me an ass to believe that no matter who your are, you should pay your debts. That goes for banks, industries, farmers, and students.
As I mentioned in another comment. I do believe the law needs to be changed to make student loans dischargeable in a bankruptcy.
The rest of your comment will take a lengthy reply, so I hope you stick around.
You are correct that education has far outpaced the rest of the economy when it comes to inflation. I believe there are two factors at work there.
First, we have glorified education at the expense of the trades. I grew up in the 70s and the roots of that were already beginning to take hold. The adults around me praised and respected (though that’s not quite the right word) the “educated”. They would say things like “if you want to amount to anything you need a college education!” While at the same time complaining about what the plumber, or electrician, or mechanic charged them.
When I went to high school I went to a school that had been “boys only” (a bad thing) until shortly before I started in 1977. They taught the trades. In fact I had to take eight introductory courses in various trades my Freshman and Sophomore years (a very good thing).
But educators bit on the whole “if you don’t go to college, you will suck as a human being” thinking. Parents of course want what’s best for their children, so they pushed their kids into colleges. Many of those kids would have been far happier elsewhere.
As an aside, my high school still exists, but I don’t think you’ll learn the trades there anymore (I may be won’t about that as I haven’t paid attention in many years, but I think I’m on pretty solid ground with my claim.)
More customers competing for limited resources raises prices. That said, it’s not the main culprit.
The main culprit is the fact that there is no means-testing for student loans. Need a loan to go to school? Here’s a check.
There was no financial pressure for universities to constrain costs. They knew that lenders would pay for someone’s schooling regardless of cost, because those lenders had absolutely no risk!
This created a horrible downward spiral. Too many highly educated individuals competing for too few jobs has created a morass that will take generations at least to resolve.
We have too many highly educated folk, and too few folk willing to do manual labor in the trades. I can’t count the number of trades people who have told me that they just can’t find good help!
Of course too few people working in the trades has created another sort of inflation. That in turn impacts all of society.
Do you honestly believe no debts are predatory?
Of course some are. Hell I’m married to a Soldier and I see predators preying on young Soldiers all the time. “Use your enlistment bonus to buy this cool Challenger! You’ll only be paying 20%!” (I didn’t believe those who take these loans should have them forgiven either).
I’m unsure that student loans can be placed in that category. Perhaps if you got a student loan for Trump University (or any other for-profit University) I’d consider it predatory. But most people know full well what they’re doing when they choose to go to university, and choose to borrow to do so.
As I said in the post that you responded to, I think making the debt dischargeable in a bankruptcy would make lenders far more cautious about who they make a student loan to, and that would start solving the problem as university’s would actually have some pressure on the price of the education they would like to sell you.
But as you pointed out above, children were (and are) being pushed into colleges whether it’s right for them or not. Hugh schools are measured by college admissions rates of their students, and so are pushing kids into this debt without any real voice on the other side telling the students they have other options.
Colleges are pushing new students towards financial aid without spelling out the true costs of those loans. All of this to people who often have almost no financial literacy or experience to understand the impacts. They are exactly like the soldiers you just mentioned. So by all means student debt is predatory.
Its clear you are not open to considering some debts as beneficial to discharge, so I won’t waste the time explaining the vast net benefits of infusing our younger and middle aged generation with cash flow that they would by every measure largely reinvest in their communities, making everyone better off. But can we at least agree that student debt is at least as predatory as shitty car loans to young enlisted recruits near bases?
I dont quite get how you can write all that out, and even admit that student loans are predatory and then turn around and say, whelp, you signed up for these loans when you were a kid, so you should just buck up and pay them…
Because “i grew up in the 70’s” that’s why. They didn’t witness it first hand, so they don’t fully realize the extent of how bullshit it was.
So I personally think that a huge part of there not being anyone available for the trades was the 2008 recession.
I started college in 2002, while working full time in the trades. By 2004, I’d dropped out of school. In 2007 I had a construction company, and 15 full time employees, and another 15ish part timers working for me. By May of 2008, I had to lay everyone off, and I couldn’t find any work. Of those 30ish people I had working for me, 1 is still in construction.
We did historic remodeling. These were guys that did everything from custom plaster and woodwork, to electrical and plumbing. There was no work, and we all moved to other shit. By the time work came back, it wasn’t worth going back to it.
Holy shit, that’s tragic. The loss of so much skilled labor is a huge loss in so many ways. I congratulate you on building something awesome, and I’m sorry you lost it.
What do you do now?
Windows DevOps Engineering. It’s way easier on my body, and I never have to stalk a builder to get them to pay.
I was just one tiny company in a tiny city. I’d be willing to bet that there’s a 5-10 year gap in the ages of people in the trades. There are a lot of stories like mine. People that were early to mid skill when 2008 happened and had to reskill.
Frequently, student loans were the only way to survive. We went back to school because there was no work. In my area you had to work or volunteer to stay on food stamps. The places that were approved to volunteer at were only allowing people with kids to volunteer.
I took $38,000 in student loans. I’ve paid $52,000 back on those loans. I still owe $54,000 on those loans. Both in 2002 and 2008 the mantra from the financial aid offices was “take the loans, deffer, consolidate, then deffer again, by then you’ll be making enough money to pay them.” They didn’t explain how compounding all of that interest would mean that every $1 you signed for would actually be $3 in money you have to pay back.
That’s another part I don’t think people are talking about. Frequently, all that’s being forgiven is fees and interest. No actual money is being lost, just potential money. If they retroactively set a 10% cap of profit from student loans, a huge number of people’s balances would disappear.
Thanks for taking the time to write all that. It was good to read. I’m sorry you had to deal with all that. Glad you have your feet under you.
I’m a bit appalled by the lean repayments and you’ve given me something to think about.
Thank you.