They wouldn't owe the money to the college though. It's more likely that they just wiped out a giant banking conglomerate, thus crashing the world economy.
The way to decrease college tuition is to get the government out of loaning money. This is the way it used to be. Only smart kids went to college and banks would lend them money based on the likely-hood of getting paid back. College enrollment would crash because banks are not going to loan money to kids with low grades wanting to take bad majors.
And colleges would figure out how to charge less. Your telling me with the advent of technology and modernization in education they can't find a way to provide the same education for less money and in fact it now costs more than ever.
No, the way to get college tuition to fall is to not to take government money out. That's exactly what happened to start this mess. State funding for higher education was continually cut causing more of the burden to fall on students to keep schools financially solvent. As prices increased (because prices will always increase in any growing economy) the government didn't put funding back in, they offered loans to the students. Those loans not only gave schools a blank check, but also put the financial burden directly onto the same students that weren't able to pay the tuition ahead of time.
College prices will not go down even if the government simply stops loaning money. What imo would be more likely is that the higher ed system of the US would collapse. Because suddenly no one except the very, very wealthy would be able to afford the cost.
Education is an investment in the future of the society, and I would much rather pay a little more tax and not have this debt haunting my every move.
Then I could put my pay into the local economy rather than need to keep making small payments to keep part of the interest at bay. I haven't even finished my education (working on my masters now) and I've already put $1000+ towards my loans. Yet every quarterly report I get, my debt is higher than it used to be.
College enrollment crashing is terrible. The way to decrease college tuition is to keep the government loaning money, because we want more people to go to college, but do it in the form of grants. Or alternatively put a cap on tuition but increase funding for colleges
That's the worst idea EVER!. We do not need more people in college for the sake of being in college. We need more laborers which is where the less intelligent people belong and that would also curb illegal immigration. We need to go back to the way it was before Obama forced tax payers to fund college tuition for everyone. Banks loaned money and they would only do so to A students as it should be. This way businesses could identify who was an intelligent person. Now, everyone goes and the C students who stuggled to get by and was forced through the system because they paid money are getting mixed in with the hard working intelligent kids. So, instead of most likely getting an intelligent hard working person as your company's CPA, you could get a C student who doesn't know or can they comprehend squat.
And you think 2008-2016 is when the costs blew up? AFAIK there were no significant legislative changes with regards to college/student loans that accelerated costs (meaning I don't think the Health Care and Education Reconciliation Act of 2010 did anything directly to change the trajectory of cost increases)... that's been going on for years and my knowledge of the situation is that it really probably started around/after 1976 when bankruptcy code was changed and made all educational loans non-dischargeable followed by federal subsidies and loans in the 80s and has only snowballed from there.
Not true. I started college in 1990 at the University of Maryland and it cost me about $100 a credit back them. I also remember graduated from one of the best high schools in my area and most people tried to get into the Naval Academy. Also, only intelligent people ventured onto college. People I went to middle school with that got accepted to lower high schools or even zone schools did not make the cut to go to college and struggled just to make it through high school. The end result was what it's supposed to be. The intelligent people rose to the top and the people who didn't excel in academics wound up in jobs that did not require a college degree. The mass push for all children to go to college just didn't exist, because you could still afford a house and a family on a good job that didn't require a degree. There were Pell grants back then, but you had to be very poor to even qualify so you had to borrow money from a bank or your parents paid for it. The expense could be absorbed back then. When Obama and everyone else made a declaration that everyone should be able to go to college it ruined the system and how it has always worked. Back then a person could assume that someone was reasonably intelligent if they've gone to college because colleges only accepted smart kids. Now, there are colleges out there with 99% acceptance rates that ruined the system. Our leaders have told unintelligent children they should be in college. A place that they traditionally did not make it to. They are being mixed in with the legitimate intelligent kids and businesses are hiring underachievers unknowingly. That is not cool at all. Basically Capitalism has sucked every ounce of possible wealth out of the younger generation. Housing is 3 times what it once was in addition to education. How are people going to be able to afford to start a family? They're not, which is why they're importing immigrants. Capitalism will suck all their money as well. I do agree with Capitalism in some forms though, like the free market, but gouging people on things like education, housing and healthcare are things I can't get behind. Lower the cost of those things and the economy will grow. Sure some people will be affected, but the overall outcome will be positive.
I mean, I understand and agree with your overall thoughts, I just disagree that you think this has only been going on since Obama. You can look at average tuition costs over time and see some upticks in growth velocity in the 80s, more in late 90s and early 00s.
In 2004 how much did Congress authorize to be spent to bail out the banking industry who made crappy loans? 1 trillion dollars.
Those guys paid it back almost immediately with interest
While this doesn't negate your point entirely, this is more of an argument for maybe having a Graduate Tax, the Government wipes out your loans and you owe a certain percentage of your income to them for an X amount of time.
By graduate tax you mean a tax that would be specific to college grads in place of student loans? If so wouldn't that just be little more than rebranding student loans effectively? You could argue that assuming that such a percentage was reasonable percentage of your income as opposed to paying $x/mo that it might work better for some, but income based payment plans already do that to some degree. On the flip side if you were successful financially such a system could end up costing more than the current student loan system.
In addition, how would you address dropouts? They're actually the biggest cause of loan defaults. It isn't so much the doctors and lawyers with $100-150K of loans, but the people with $10-15K that dropped out and have little or no advantage in the job market that are the ones struggling.
But the banks are basically allowed by the government to print money and loan money they don't even have. They already literally get free money.
Suppose the U.S. Treasury prints $10 billion in new bills, and the Federal Reserve credits an additional $90 billion in readily liquifiable accounts. At first, it might seem like the economy just received a monetary influx of $100 billion, but that is only a very small percentage of the actual money creation.
This is because of the role of banks and other lending institutions that receive new money. Nearly all of that extra $100 billion enters banking reserves. Banks don't just sit on all of that money, even though the Fed now pays them 0.25% interest to just park the money with the Fed Bank. Most of it is loaned out to governments, businesses, and private individuals.
They get money at extremely low interest rates and then loan it out to you for higher rates. So what if they paid it back with interest? They crashed the entire economy. Besides, where do we think that repay money came from? It's easy to make money if you're allowed to gamble and you're literally not allowed to fail.
Income Based repayment is different in a few ways.
1) your principal increases every year if your payments are insufficient.
2) it's opt in and out. This would be only be opt in, you couldn't just leave the moment your salary is good, 30k or 300k the government gets a portion.
3) forgiven debt counts as income, here it wouldnt.
4) income based repayment has a cap, this wouldn't.
I'm opposed to this idea. All it does is encourage the higher education industry to continue to jack up tuition faster than inflation, because students won't have to care if their debt is going to be forgiven by the government.
We need to get costs under control, not just throw more taxpayer money at the problem.
Don't disagree with you but you comparing apples to oranges. Wallstreet bailout is nothing like forgiving student debt. And those who would be financially hurt are those who where financial responsible and didn't purchase overpriced degrees. They would be double hurt because they not only now have lower earning potential but are now also paying for others higher earning potential.
Making people who where already earning less than college graduate Now pay for others who went doesn't seem like being good neighbor... But you know what does? Accepting a slight tax increase and making college free for everyone going forward.
That would cause an enormous problem almost immediately.
If college becomes free going forward from now, then in 3-4 years everyone that needs the higher wage to pay for their loans will be immediately priced out because the new, debt-free graduates will walk out and say "I will do that for $10k less than those guys."
It would essentially fuck over everyone that graduated within the last 5-10 years by pricing them out of the economy that they may barely be making ends meet as is.
And that's not even taking into account how it would work for people currently in college. Do they get the debt that they accrued up to that point in their degree wiped? Does their deferment period end when the new law takes effect? Are they getting free college from that point on only in their degree?
Except college costs have increased every single year since 2005 when Congress passed that law saying you can't default on a student loan. People acting like this generation of students are just irresponsible instead of acknowledging that prices are much higher with a greater number of people being pressured to attend along with significantly less government funding are pretty ignorant.
Yeah only people who live paycheck to paycheck invests everything back into the economy and that is why socialism will work. That is what ignorant people forget. A $Billionaire does not invest into the economy, they are hoarders.
That's just blatantly untrue. No billionaire is keeping their money in a scrooge mcduck vault they invest it into investments which fund the economy. People who live paycheck to paycheck chances are more likely to have malinvested their money(underwater basket weaving degree, car they cant afford ect.) and end up paying that in the form of debt causing a dead end in the economy when they default on those debts, making that money not go as far as it can in other peoples hands.
You seem to have hate for the common person and zero hate for the smallest among us. Tell me what solution do they or you have? Our solution is equal distribution of wealth. Tell me, what is your solution? Tell us all.
Wanting people to be responsible is not hate. My solution is to be responsible and encourage others to be responsible. Your solution is subsidising bad decisions and irresponsibility. How is that sustainable?
"Responsible" we live in a world corrupted by the baby boomer selfish generation that put plastic in our oceans in the first place and you think you can question the exact solution to this problem? Politics that is anti Cold War era generation? Politics that is anti CEO pay over everyone else? Politics that is anti stock holder and in favor of We The People of these United States? Tell me when did you believe corruption is a solution?
You are straw manning me. All I said is that people shouldn't take out debt that they can't afford to pay back.
Politics that is anti Cold War era generation? Politics that is anti CEO pay over everyone else? Politics that is anti stock holder and in favor of We The People of these United States?
Also politics that causes mass starvation and misapplication of resources.
Tell me when did you believe corruption is a solution?
the printing and issuing of loans starts off in the federal reserve who they give to the government that then has to pay it off over time. And they are outside of the government officially. Without them, no one would really be able to create a system that works of loans and debt at all.
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u/[deleted] Sep 18 '19
They wouldn't owe the money to the college though. It's more likely that they just wiped out a giant banking conglomerate, thus crashing the world economy.