Student Loan Debt Delinquency Closes in on Housing Debt - Politics Forum.org | PoFo

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Everything from personal credit card debt to government borrowing debt.

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#14125845
http://www.realclearpolitics.com/?state=nwa
Last week, the Federal Reserve Bank of New York reported that student loan debt increased to $956 billion, more than auto loan debt or credit card debt. More worrisome, the student loan 90-day delinquency rate increased to 11% this past quarter and for the first time exceeds the "serious delinquency" rate for credit card debt.

Student loan debt is reaching bubble-bursting levels. By comparison, in October 2007, the start of the subprime mortgage crisis, 16% of subprime mortgages were 90 days delinquent, according to Federal Reserve Chairman Ben Bernanke. By January 2008 it accelerated to 21%. If the economy heads off the fast-approaching fiscal cliff and tax rates spike for lower- and middle-class Americans, it may accelerate student loan defaults to crisis levels. The big banks got their taxpayer bailout; taxpayers may soon be on the hook for another.

I don't think trying to get everyone into college was a great idea.

China has terrible working conditions and pay for factory workers, we have terrible working conditions and pay for so-called white collar jobs.
#14125992
Loan companies are using the same tactics on students that they used on home loan borrowers before the bubble burst: they are identifying those interested in loans and flooding them with offers of govt guaranteed loans...and as with the home loans, they know that the students are getting in over their heads but don't care because the loans are backed by the govt...

Awhile ago I saw an article stating that the loan companies are using the same software previously used to identify potential home loan customers to find potential student loan customers...

The loan companies are aware they are loaning too much but still they offer the loans....

Here's the type of advertising that was used at the height of the housing bubble, a bubble which is being replayed using students as the mark instead of potential homeowners...

[youtube]r0HX4a5P8eE[/youtube]
#14126974
The main problem of student loans in the states is that you can not get rid of them unless you pay it off or die. Bankruptcy is not even an option. This is why there is a bubble and will burst.

Also the problems with Student Loans:
- You can get your wages garnished without an court order.
- You can lose your state licence. (Lawyer, Doctor, Beautician and etc. )
- Your social security and disability can be garnished
- The IRS can withhold your refunds. (This has happen to me)
- Student loans don't have to obey the Truth in Lending Act and Fair Debt Collection Practices Act.

The US government made the system so students will be debt slaves.
#14127084
The American Lion wrote:The main problem of student loans in the states is that you can not get rid of them unless you pay it off or die. Bankruptcy is not even an option. This is why there is a bubble and will burst.

Also the problems with Student Loans:
- You can get your wages garnished without an court order.
- You can lose your state licence. (Lawyer, Doctor, Beautician and etc. )
- Your social security and disability can be garnished
- The IRS can withhold your refunds. (This has happen to me)
- Student loans don't have to obey the Truth in Lending Act and Fair Debt Collection Practices Act.

The US government made the system so students will be debt slaves.


Cute conspiracy theory, but actually their are several problems with student loans, one of which is that they're originated and serviced by the federal government.

There's a reason that student loans are treated differently than any other loan: because you take them out before you can demonstrate the ability to pay it back, and because there's no collateral. That's why the government started guaranteeing them, to incentivize banks to make what would otherwise be shaky loans. As a result more kids can go to college, but along with that (the inevitable Unintended Consequence) there are too many middlemen and that allows schools to jack prices up beyond what the market would otherwise bear, because the market has been skewed with easy money. There's a disconnect between supply and demand.

The alleged bubble isn't quite as bad as the media's making it sound, but it is a situation that is untenable. Unfortunately the only proposed "fixes" involve even more government intervention, that's exactly the wrong path.

Edited for clarity.
Last edited by Joe Liberty on 11 Dec 2012 14:02, edited 2 times in total.
#14127134
I don't know if it's been mentioned but another key difference is you cannot get rid of student debt. You either pay if off or you die. It never clears by declaring bankruptcy. Also now there are programs if you do x amount of public service, the government pays your debt. Obviously I benefit because I can do 4-5 years as a public defender, gain job experiance and have my debt forgiven when I go to some private firm. God bless student loans lol. Of course once I get through school it is a a program that can be cut! ;)
#14127262
Joe Liberty wrote:Cute conspiracy theory, but actually their are several problems with student loans, one of which is that they're originated and serviced by the federal government.

There's a reason that student loans are treated differently than any other loan: because you take them out before you can demonstrate the ability to pay it back, and because there's no collateral. That's why the government started guaranteeing them, to incentivize banks to make what would otherwise be shaky loans. As a result more kids can go to college, but along with that (the inevitable Unintended Consequence) there are too many middlemen and that allows schools to jack prices up beyond what the market would otherwise bear, because the market has been skewed with easy money. There's a disconnect between supply and demand.

The alleged bubble isn't quite as bad as the media's making it sound, but it is a situation that is untenable. Unfortunately the only proposed "fixes" involve even more government intervention, that's exactly the wrong path.

Edited for clarity.


You have never had to deal with Student Loan debt collectors have you? I used to work for Rent-A-Center (Rent to Own). The US government make repo like child's play compared to us.

The best way to fix this IS to remove any market influence from the loans and make high education free paid through taxes. Instead putting the burden on the student, but as part as an collective investment of future generations.
#14127277
I was earning 60 pounds week with a wife and two kids

I packed my job in and got a government GRANT which was 75 pounds a week

....a 25 % increase when I moved to government grant

5 years later I was paying 15,000 pounds tax per year and 5 years after that I was paying 25,000 pounds tax per year ($50k) (20 years ago)

Seems the UK government are better capitalists than the US government who are socially blind ( again )

If you are in the US, over 25 with a college degree, unemployment is statistically zero (4%)

College grads are paying LOTS of tax while the others are musing on pofo or working for peanuts

College grads are SNOBS to the rightos but in reality they are making it

The subject of the degree is no big deal - employers are looking for people who can comprehend and assemble their knowledge and demonstrate it - so history is just fine




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Last edited by Someneck on 11 Dec 2012 17:09, edited 1 time in total.
#14127278
No, I want my polisci education please.


You can have it, but you just have to pay for it out of pocket 100% at time of service.

As a tax payer, I don't see the value in my funding loans to people that won't be able to pay them back because they decided to study something that will not get them a job. I'm not saying you cna't study polisci, I'm saying that I'm not going to finance it for you.
#14127291
Rancid wrote:
You can have it, but you just have to pay for it out of pocket 100% at time of service.

As a tax payer, I don't see the value in my funding loans to people that won't be able to pay them back because they decided to study something that will not get them a job. I'm not saying you cna't study polisci, I'm saying that I'm not going to finance it for you.



But the statistic is that college grads have FULL employment in the US and are all paying tax - they will pay more than the value of the loans - very much more.

That is why the UK used to hand out grants like confetti

Since Thatcher/Reagan they became reactionary and stopped doing it...

If as a taxpayer, I hand out 50k to a student and they pay 1 mill in tax over their lifetime, I would see that as a good investment




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#14127293
But the statistic is that college grads have FULL employment in the US and are all paying tax


lol whut?

What are you smoking?

http://articles.nydailynews.com/2012-05-10/news/31659198_1_graduates-job-outlook-heldrich-center

50% of new college grads over the last 5 years can't find work.
Nearly 50% of grads over the last five years are unemployed or underemployed, according to a Rutgers University stud
#14127297
Rancid wrote:
lol whut?

What are you smoking?

http://articles.nydailynews.com/2012-05-10/news/31659198_1_graduates-job-outlook-heldrich-center

50% of new college grads over the last 5 years can't find work.

Nearly 50% of grads over the last five years are unemployed or underemployed, according to a Rutgers University stud



I did say "over 25" and not new grads

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