Re: Cancellation of
Posted by YES! on 4/4/2020, 11:23 am, in reply to "Re: Cancellation of"
People must start to take personal responsibility for their personal finances and stop thinking it’s someone else responsibility (including government) to “help” when things don’t go as they planned. There isn’t such a thing as “free” when the government is involved, “free” comes from increasing taxes. |
In the words of Ronald Reagan, "The most frightening phrase in the English language is, 'I'm from the government and I'm here to help.'"
The government jumped into the student loan process because some people were screaming that it wasn't fair. Colleges saw that all of a sudden students had access to a much bigger pile of money - they could raise their prices! Wait, the cost just went up, the government needs to make more money available. Whoa! Even more money! We can hire even more of the people that leave our college with an unmarketable degree to teach a new crop of students wanting unmarketable degrees if we raise our prices more! And so on to the point that kids leave college with $100,000 in debt with a degree where they will earn $45,000 a year.
Proof? There is a successful builder here in Houston that sold his business and was hired by the local community college system to set up vocational programs. HVAC, welding, plumbing, etc. Wildly successful and turning out hundreds of people ready to make a whole lot more than most college grads in a couple of months. Problem: he set it up where they spent as much time a was needed to train, get certified, and get out to go to work - usually about seven weeks. Community college board said, "You need to make these full semester programs. Then students are eligible for tons more loan money, so we can charge more." He wouldn't do it, left, and those programs have pretty much faded away.
This is almost exactly like the mortgage crisis. Banks were forced by the government to make loans to people that they knew couldn't pay. So they made a greater volume hoping to balance things a little. The mortgage you 'qualified for' was way beyond what most people could actually afford. My first house - I was told I qualified for up to $175,000. No, my mortgage payment would have been more than half my monthly salary. I bought a $58,000 house. Unfortunately most people didn't look at it that way. Fast forward and there are tons of people in mortgages they can't possibly afford, housing prices have shot up because the government is telling banks they have to write mortgages to pretty much everyone, and it collapses. Difference between this and the student loan mess is that with the mortgage collapse you just stopped paying, lost the house, and your credit crashed. Housing prices plummeted because all of a sudden the market was flooded with foreclosures at pennies on the dollar. With student loans, there is no tangible asset to lose or walk away from. What are they going to do? Take back your degree?
I do not have a solution, but I know that what won't work is forgiving the loans. That gives the colleges no reason to lower costs, so you just set up a never ending cycle. The government spigot needs to be turned off. Colleges will be challenged to make it more affordable. Prices will come down. Can there be some process where the debt is made more manageable? Sure. But just saying, "Aw. Are you sad? Tell you what - you don't have to pay for that," will not fix the problem.
1. Cost of college tuition alone has skyrocketed about 350% in the past twenty years,
2. The cost of renting an apartment is about 200% of what it was about twenty years ago,
3. Extra fees for college are about 400% higher than twenty years ago, and
4. Textbooks are now single-use items that cost over $125 per book per course, plus
5. The student loan industry is lightly regulated in terms of borrowing/payback potential,
it's no wonder that many students are suffering under crippling student loan debt. In short, if you haven't gone to college as a full time student in the past ten years, you are not in any way qualified to talk about why student loans need to be forgiven.
I attended a state university in the late '90s. At no point was a semester's tuition more than $1800 - and that was the semester in which I was performing in four performing ensembles. Nowadays, that doesn't even get you to qualify as full time.
Students are graduating now with tens of thousands of dollars of debt to earn a degree which pays them in much of the state the same real wage as it did ten or fifteen years ago - yet cost of living and cost of inflation have made it nearly impossible to live off that money.
This doesn't even include the DOZENS of predatory schemes set up by for-profit "universities" and "certificate programs" that basically steal thousands of dollars from students and then never deliver a legitimate degree. Or the fact that student loan debt is bundled, packaged and re-sold six or seven times to predatory lenders.
There needs to be a procedure in place for student debt forgiveness. With the current administration, there isn't much of one. There are millions of young Americans who simply can't make ends meet. Life isn't like what it was when Gen X and Boomers were fresh college graduates.
Millennials and soon Zennials also are confronted with job markets that (discounting the current shutdown-influenced situation) lock out people from entry-level jobs unless they are overqualified or over-certified (for which they need more schooling) or have experience that they cannot obtain without gaining entry level work. Add to that the fact that boomers are working "later than ever" and there's little to no room for vertical advancement for the Gen X crowd, add in the increase in outsourcing and overseas visas for much of the entry level, and you're in a perfect storm of "lazy millennials moving home after college" because they CANNOT find work and there IS NO OPPORTUNITY for them aside from waiting tables or flipping burgers - and the second they take a suboptimal job, they have to start paying half their terrible paychecks to pay for their usurious student loans.
Our entire economy relies upon it constantly expanding. When it contracts, the entry-level folks are hit the hardest. Those folks are most likely to be dealing with huge amounts of student loan debt. It's a much bigger issue than young adults who "don't want to keep their end of the bargain" - they literally can't.
And don't forget the most important part - if those young adults declare bankruptcy, the student loans STILL aren't forgiven. People are saddled with that debt, collecting interest, in some cases until they day they die .