I wish I were the one letting them, because they woulda been let go a loooooong time ago… What a sick and cruel place!!!
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How much tax money goes out to bail the lenders out? Like during the great recession? Or as “corporate welfare” depending on definition? Or FDIC?
Even Ford originally wanted a bailout, and supported it for GM and Chrysler last decade. But Ford isn’t a bank.
I say we “let them” as a society. We don’t genuinely ask how it could be very different. And of course, I’m speaking in generalities. But I don’t see a lot of people pushing for socialism, which is what I think we’d need to do, for things to fundamentally change. And yes, presumably this would require a big fight.
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A person doesn’t need to avoid those things, just look for cheaper options. Start small and work your way up. Instead of going off to a big university, a person can check out community colleges or trade schools. My first house was 725 sq ft, but it was a roof over my head. First car was a p.o.s. old Ford but it was reliable enough to get me to work. Yes, I had loans to pay off but they weren’t crippling compared to what my friends were paying. My education isn’t Ivy League but I’m happy with where I am.
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Where this gets really gross is when you start to package the loans as investments. Student Loan Asset Backed Securities (SLABs, for short) are how banks can diversify risk in the loans. Also the selling of these securities helps to fund more lending to students under these higher risk conditions. With the lack of ability to declare bankruptcy to avoid them and government ability to garnish wages to cover them, they are safer than an auto loan or mortgage backed security. But they still have all the makings of another debt funded bubble.
I would have said the same for a mortgage loan. But one of the lending practices when the mortgage bubble was coming to a head before the financial crisis was the NINJA loan (No Income, No Job or Assets.) If you can pack it and sell it, it doesn’t matter how responsible it is.
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Part of the solution can be better financial responsibility education younger. But the American dream really hates being told to settle. People spend so much less.
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A headline of “student skips loan payments to get a master’s in comparative literature then gets slammed by accrued interest” is not boingy enough.
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They don’t build houses like that anymore in most of the country, because they aren’t profitable enough to the builders. And a lot of the old ones that still exist get torn down and replaced.
That’s a fine balancing act. You were lucky. Keeping an old car in working order can be very expensive these days, and the consequences of even a brief loss of transportation can be severe.
Mine is, and I had no loans, I have been incredibly lucky on many fronts. But I have a great deal of sympathy for those like the OP, because I do recognize how hard the choices are for almost everyone today.
High school students receive years of advice that very often makes no actual financial sense, from every trusted adult in their life simultaneously. Yes, there is a sense in which they are making a choice for which they can be held responsible. However, some of what all those scholars who already went to universities and got advanced degrees have done is study how humans work, and they’ve amassed enough data to show quite conclusively that such an approach is not useful if the goal is to have a society in which actual human children can consistently and reliably actually live and make good choices, or where the actual resulting adults can consistently and reliably live independently as adults.
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The people who sell you things sometimes misrepresent their intent, or your likely outcome.
Also, the responsibilities under the subset of loans for students is more onerous than that for say, real estate magnates.
But sure, barely scraping by person who invested in herself is irresponsible for not being able to escape predatory terms. Sure thing. Victims are always the most responsible parties, surely, and hold all the power. Sure thing.
Is it because she’s white?
I don’t know, it never occurred to me to wonder that. But maybe it’s actually about racism, sure, lets change the subject… Right?
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Yeah, grab the Lead ring. The Brass Ring is for elites. Welcome to your America.
Humility isn’t a matter of luck.
So after grad school she is unable to grasp how interest is works? Also how many deferments did she use?
Everyone complains about student loans but it is pretty much cheapest unsecured loan out there.
If you take out $98k in student loans you better be ready to pay about $2k a month to pay it off in a timely manner.
Im going to venture to guess she barrowed all the money for a degree in sociology (or something equally worthless).
I hope he got that exchange framed. 
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Did the banks not know the bankruptcy laws when they made the loan? One of the reasons for bankruptcy laws is to encourage the banks to do their due-diligence to make sure that the borrower will be capable of paying the loan back.
Now in particular the justification for making student loans nonchargeable was the fact that many students would have good long term prospects of paying off the loan, but potentially graduate with enough debt to file for bankruptcy shortly after graduation. This would make student loans a very bad bet, and therefor almost unavailable. But now we have the other extreme, where loans are too easy to get and difficult to get out from under. So the cost of a four year college has gone up significantly as more money is available, and an entire class of for-profit trade schools to saddle the young with debt and economically useless vocational training has sprung up.
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Forgetting other and more direct reasons why people are told that relevant and recent college degrees are needed, don’t forget that government loans are capped at a certain amount. Many people have loans 6 times higher, or more, than the federal cap, especially for medical industry jobs. Or even management. They get those from private banks. Let’s not scapegoat government when so many other factors exist.
When you’re young and poor like I was you grab what’s in reach and climb from there.
I noticed nowhere in the article does it mention what subject she got her degrees in. It’s important and relevant. Our economy highly rewards certain degrees (especially in STEM fields) but we have a great over-abundance of degrees in other fields and there is no reward for those degrees, other than the tiny number of people who go on to get tenured positions in those fields.
There are laws against usury and various forms of exploitative lending. There should be laws against getting someone 100k+ into debt for advanced degrees in fields which don’t lead to immediate high-paying jobs. 100k+ in debt to become a doctor or an engineer, that makes sense because those people will get hired very quickly in those professions and will make plenty of money. 100k+ to get degrees in comparative literature, which is what she got, is insane, because there isn’t a raging demand for highly-paid literature comparers. This is common sense and her dad, instead of co-signing, should have told her that she should study that field part-time or get into it some other way that doesn’t involve 100k+ in borrowing. But like I said, this situation is exploitative lending and should be illegal like other forms of exploitative lending, but unfortunately instead of being illegal, it’s actually being supported by the government in multiple ways.
For the amount of money she’s paying on these loans, she could have bought and paid for a house that she would own. Not in a nice area in NYC, but somewhere in NYC perhaps, or certainly somewhere in other states. She would then have ownership of her home instead of being owned by a debt company. Her parents should have advised her on this. The government should have regulated this.
This degree madness and student loan madness certainly is delaying adulthood and families, and the resulting degrees are not helping anyone.
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You make the mistake of assuming that college = job training.
Nowhere does it say that one goes to college solely for the purpose of landing a high paying job. There are other non-financial reasons for pursuing higher education that are equally important - both to the individual and society.
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Small homes exist. Maybe not in the posh suburbs, but they’re out there if a person looks for them. There is a tiny home craze happening now plus the option of mobile homes if need be. It wasn’t until ten years after I graduated that I finally moved into a place with more than 2k sq ft. People are looking for immediate rewards rather than working toward them. That causes problems.
If your plan for society requires everyone to be a financial wizard far better at evaluating long term financial deals than the median human or face dire consequence your plan is for most people to be miserable and therefore your plan is bad.
Division of labor. Specialization. That’s where it is at. That’s how we became so much wealthier. It’s a huge waste to try to make everyone deal with all this financial baloney, and most of us are terrible at it. People should be sheltered from the financial predators so they can do whatever it is that they are good at.
See 401ks. See student loans. See deregulated mortgages. See payday loans.
This is literally one of the first things Humans noticed after inventing finance, which is why regulations on it are in the Bible, etc.
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