Reforming Student Loans

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dancingalone

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She pursued a worthless degree with a steep price tag and racked up enormous amounts of debt to do it. I assume that with each loan the terms were discussed so I don't see why this is a cause that requires "reform", unless we are now viewing college-bound students as the intellectual peers of payday cash loan recipients. Maybe the real reform should be to encourage colleges to reduce the markup on the quilted two-ply they are selling.

Well, the US high school system which is funded by state and federal money is geared to encourage students to attend college. I think there is some room in there for better disclosures of financial costs of attending college as well as the near-future impact of students considering the system pushes students to college that may be better served by another path.

When you have people who say they would happily return their college education if they could, to me that indicates the experience is overly saturated and a return to basics is in order. Since the US federal financial aid system is a major contributor to this problem, it's not unreasonable to think that some reform should start in that quarter.
 

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Even if it was in a liberal art or a social science, you knew the graduate could read, write, and have a certain knowledge of the world and of society. Not so true today. Too many people who are not college material are attending the system, watering down schools and curricula.

First: how do you know that's true? Second: everyone attends because they have no choice. Industry has gone credential mad. Do you know that almost every listing for receptionists, assistants (executive or otherwise), and administrative assistants (secretaries) requires a degree? These are not very well paying jobs, either. You need a college degree now to do jobs that used to require a high school diploma, if that. And they pay less to boot.

I don't think you can claim it's because educational standards have lowered, either. High school graduation rates and certainly college attendance rates are higher than they were 30 years ago, and much higher than 50 years ago. Curricula have become more diverse and more demanding. It is a myth that the 50's were an educational golden age.
 

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This is the exact aspect of the student loan industry I am concerned with. I would like to see reform made so that they will consider risks appropriately.

I guess the point I'm trying to make is that the entire financial industry has gone down this path. The entire financial industry is not federally subsidized. Therefore any move to combat this culture of risk has to go beyond ending or tightening federal subsidies.

Part of it has to be making the financial companies pay when their risks blow up in their faces. They can't expect to privatize the profits and socialize the risk - although they have bought that for themselves. Thus campaign finance reform has to be part of the solution, or the companies just buy themselves more favorable rules.

A fine line has to be walked though. Federal bank bailouts prevented our recent recession from becoming a depression. I'm not sure where the balance lies, or what would be most effective.
 
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dancingalone

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First: how do you know that's true?

By participating in interviews and secondary resume screening (after HR sifts through the first wave). Perhaps I am becoming jaded, but I am less and less impressed by college graduates with each year, even if some of them came from respected schools. I have worked in the banking and legal fields to give you a frame of reference.

Second: everyone attends because they have no choice. Industry has gone credential mad. Do you know that almost every listing for receptionists, assistants (executive or otherwise), and administrative assistants (secretaries) requires a degree? These are not very well paying jobs, either. You need a college degree now to do jobs that used to require a high school diploma, if that. And they pay less to boot.

I agree. How do you turn back the clock?

I don't think you can claim it's because educational standards have lowered, either. High school graduation rates and certainly college attendance rates are higher than they were 30 years ago, and much higher than 50 years ago. Curricula have become more diverse and more demanding. It is a myth that the 50's were an educational golden age.

Perhaps I misspoke. It's the quality of the masses of college students that has declined. To be somewhat harsh, there's a saying about 'garbage in, garbage out' that applies here. I think the Europeans actually do this better where they have viable vocational school tracks, and I thought there was a movement to emulate them, but perhaps not.
 

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As long as you come from an accredited place, the school prestige doesn't make that much of a difference.

Generally I agree, but there are still many jobs and industries where it matters a lot. Finance and law, for instance.
 

Empty Hands

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I agree. How do you turn back the clock?

I don't know. Generally, companies demand the credential because they can, and it acts as an easy, thought-free screening mechanism. Maybe if the system was tightened and fewer people had degrees, it wouldn't be such an issue. A lot of people would suffer in that transition though.

Perhaps rebuilding our industrial and manufacturing base could provide lucrative jobs for those not inclined to college. To do that though, we have to get protectionist and reduce free trade to a minimum. With our current political situation and the vested interests of so many companies with so much money in the current situation, I don't see that happening. Campaign finance reform again, I suppose. Keep the whores (politicians) and the Johns apart.
 

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Well, the US high school system which is funded by state and federal money is geared to encourage students to attend college. I think there is some room in there for better disclosures of financial costs of attending college as well as the near-future impact of students considering the system pushes students to college that may be better served by another path.

When you have people who say they would happily return their college education if they could, to me that indicates the experience is overly saturated and a return to basics is in order. Since the US federal financial aid system is a major contributor to this problem, it's not unreasonable to think that some reform should start in that quarter.

The financial aid system is responding to demand. I agree with you that the colleges are saturated with students who really don't belong there, but I don't think that targeting the aid will help until you get people to start thinking realistically about higher ed. Otherwise we'll just see articles about people like this one who, rather than whining about how nobody told her that poor financial decisions and a joke degree would affect her future, would instead be whining about how they didn't get the opportunity to go to college because the big bad financial aid system denied them a loan.
 
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dancingalone

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I don't know. Generally, companies demand the credential because they can, and it acts as an easy, thought-free screening mechanism. Maybe if the system was tightened and fewer people had degrees, it wouldn't be such an issue. A lot of people would suffer in that transition though.

Perhaps rebuilding our industrial and manufacturing base could provide lucrative jobs for those not inclined to college. To do that though, we have to get protectionist and reduce free trade to a minimum. With our current political situation and the vested interests of so many companies with so much money in the current situation, I don't see that happening. Campaign finance reform again, I suppose. Keep the whores (politicians) and the Johns apart.

I'm all for education but it needs to be meaningful, particularly if it is funded by public money. The type of training needed by society should be encouraged by a slotting system. In other words, tie public grants and loans into degree and majors. The number of slots for needed fields like medical training or engineering would be higher. Fields in which we currently have a glut of people such as the law should have little to no availability through the financial aid program. If you want to do it, but all means, but do it entirely without government money.

I won't get into free trade or campaign finance reform since those are big topics worthy of their threads. I'm not at the polar extreme on either topic and would happily read any such discussion.
 

Bruno@MT

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@dancingalone:
Aye. We do pay a fair amount of tax. Sadly, competency in one area does not guarantee competency in other areas. Take an area the size of New York City. Split that in 3 states. Give each state a full blown government. Give the entire area also a full blown federal government. Then divide each state in provinces and give each of them a government. Then divide each province into many counties. Give each of those a local government...

Besides, there is 1 thing you have to understand to make sense of Belgian taxes: refunds. And before I continue, I know this is not the American way. It is just how our system works ok?

Everyone pays taxes based on the assumption that they have no property, and no responsibilities. When I lived at home and had no wife / kids / mortgage, I got no refund.

Then, as I got a mortgage, we got an annual tax refund. With each kid you get, your refund increases again. There are a multitude of other refunds that you get or don't get, based on your situation. For example, someone with 4 kids pays zero taxes.

As you can see, this changes the picture quite a bit. People here pay a significant amount of taxes, but also get a reasonable sum back in refund. As a result, not everyone pays the same amount. I agree that we can discuss this back and forth, but the main answer to your question is that when all is evened out, we pay less taxes than would appear at first glance (which is indeed among the highest in Europe).
 

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Besides, there is 1 thing you have to understand to make sense of Belgian taxes: refunds. And before I continue, I know this is not the American way. It is just how our system works ok?

Everyone pays taxes based on the assumption that they have no property, and no responsibilities. When I lived at home and had no wife / kids / mortgage, I got no refund.

Then, as I got a mortgage, we got an annual tax refund. With each kid you get, your refund increases again. There are a multitude of other refunds that you get or don't get, based on your situation. For example, someone with 4 kids pays zero taxes.

As you can see, this changes the picture quite a bit. People here pay a significant amount of taxes, but also get a reasonable sum back in refund. As a result, not everyone pays the same amount. I agree that we can discuss this back and forth, but the main answer to your question is that when all is evened out, we pay less taxes than would appear at first glance (which is indeed among the highest in Europe).

Actually, that is quite similar to the American income tax system. You get deductions for the above reasons as well, in addition for other reasons.
 

jks9199

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@dancingalone:
Aye. We do pay a fair amount of tax. Sadly, competency in one area does not guarantee competency in other areas. Take an area the size of New York City. Split that in 3 states. Give each state a full blown government. Give the entire area also a full blown federal government. Then divide each state in provinces and give each of them a government. Then divide each province into many counties. Give each of those a local government...

Besides, there is 1 thing you have to understand to make sense of Belgian taxes: refunds. And before I continue, I know this is not the American way. It is just how our system works ok?

Everyone pays taxes based on the assumption that they have no property, and no responsibilities. When I lived at home and had no wife / kids / mortgage, I got no refund.

Then, as I got a mortgage, we got an annual tax refund. With each kid you get, your refund increases again. There are a multitude of other refunds that you get or don't get, based on your situation. For example, someone with 4 kids pays zero taxes.

As you can see, this changes the picture quite a bit. People here pay a significant amount of taxes, but also get a reasonable sum back in refund. As a result, not everyone pays the same amount. I agree that we can discuss this back and forth, but the main answer to your question is that when all is evened out, we pay less taxes than would appear at first glance (which is indeed among the highest in Europe).
You miss an important difference: you're discussing an area the size of the state of Maryland, with a population of about 10.5 million (about twice Maryland's, or about half of NYC's). And it's a rather more homogeneous population than any part of the US...

There are a lot of things that are much harder to carry out and apply in the US than in other parts of the world due to the very different structure, even as questionably-overstrong the federal government has become.

Our current college pricing system is broken, and the student loan issues are simply a symptom and reflection of that. Schools have been known to raise prices not to be able to provide better services, but because if they're too inexpensive, they're perceived as being less good. Schools are supporting large farm programs for professional sports, sometimes at the expense of the education programs. And there is an over-emphasis on the need to go to college...
 

RandomPhantom700

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How about something really simple, automatic payments deducted each pay period from the graduate's bank account?

You're assuming that most of the graduates in this position have the money in their accounts to pay back the loans. We're not talking about creditor evasion here, Don; most of the graduates, myself included, would love to have available money to repay.

The fact of the matter is that graduates such as myself agreed to the loans in an era when a degree meant you'd get the job you needed after graduation. Now enter 2008, when the market takes a crap and graduates such as myself are just entering the job market.
 

Makalakumu

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The Greeks have their own setup with lots of goodies. That's not going so well for them right now and I'm already reading about similar strains in the PIGS countries.

That's propaganda. In the US (and now worldwide), we are being fed a line that states that the PIGS are in trouble because of their social services. The only thing that can help are austerity measures that feed more and more money into the banks.

The reality of what is happening in those countries and our own, has little to do with the services. It was caused by the rating of derivative junk as AAA and it's trading on the open market as real assets that supposed to back up the money being used on these services. Then, the agencies that rated them and sold them, conspired with the central banks, and naked short sold them in order to reap a profit on the way down by cashing in on insurance policies and bailout money.

It's a total scam in which paper with a supposed value is being used to transfer items of real value into the hands of the few. The cost of this is being monetized as debt and THAT is what the government's are REALLY struggling with. So, when the financiers and their corporate media mouth pieces are saying that all of these problems are the result of runaway socialism, it's total ******** propaganda.

We dealing with unprecedented financial shenanigans that are being wrapped up in lies in order to further game the system.
 
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dancingalone

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That's propaganda. In the US (and now worldwide), we are being fed a line that states that the PIGS are in trouble because of their social services. The only thing that can help are austerity measures that feed more and more money into the banks.

The reality of what is happening in those countries and our own, has little to do with the services. It was caused by the rating of derivative junk as AAA and it's trading on the open market as real assets that supposed to back up the money being used on these services. Then, the agencies that rated them and sold them, conspired with the central banks, and naked short sold them in order to reap a profit on the way down by cashing in on insurance policies and bailout money.

It's a total scam in which paper with a supposed value is being used to transfer items of real value into the hands of the few. The cost of this is being monetized as debt and THAT is what the government's are REALLY struggling with. So, when the financiers and their corporate media mouth pieces are saying that all of these problems are the result of runaway socialism, it's total ******** propaganda.

We dealing with unprecedented financial shenanigans that are being wrapped up in lies in order to further game the system.

Well, I actually work in the financial sector, so what you are arguing isn't new to me. There's even a certain level of truth to it.

But you're going overboard with this type of world view. Like all sovereign entities (including the US), the PIGS countries don't have enough cash flow on hand to service their outgoing obligations, so they are subject to vagaries of bond offerings and any pressures applied through market actions, 'sinister' or not.

It's a fundamental truth that the PIGS are in trouble financially because they SPEND more than they have on hand, and in fact they spend more than their revenues suggest they can afford. That is not propaganda at all.
 

Makalakumu

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Cut the military budget by 90%. Invest half the money into Universal Health Care and as much Education as people want and give the other half back to the people. Watch as our country flourishes again. Simplistic, yes, but that is only because we need to reform our financial system and deal harshly with the financial terrorists who control everything.

Anyway, student loans are the closest thing we have to debt slavery. They cannot be discharged by any means and they ensure that a person has to do what they are told in order to hold a job. Don't step out of line, don't protest anything, don't make waves, don't try to change anything. They are a measure of how much the Elite fear an educated public.

Sometimes, I think US graduates should take their degrees and move to countries where the jobs are, sticking the criminal, predatory, and elite controlled government with the bill. Take what you want and screw the rigged system that delivered it.
 

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Cut the military budget by 90%. Invest half the money into Universal Health Care and as much Education as people want and give the other half back to the people. Watch as our country flourishes again. Simplistic, yes, but that is only because we need to reform our financial system and deal harshly with the financial terrorists who control everything.

Anyway, student loans are the closest thing we have to debt slavery. They cannot be discharged by any means and they ensure that a person has to do what they are told in order to hold a job. Don't step out of line, don't protest anything, don't make waves, don't try to change anything. They are a measure of how much the Elite fear an educated public.

Sometimes, I think US graduates should take their degrees and move to countries where the jobs are, sticking the criminal, predatory, and elite controlled government with the bill. Take what you want and screw the rigged system that delivered it.

Wow, that's a whole lot of crazy in a few short paragraphs.
 
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dancingalone

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Cut the military budget by 90%. Invest half the money into Universal Health Care and as much Education as people want and give the other half back to the people. Watch as our country flourishes again. Simplistic, yes, but that is only because we need to reform our financial system and deal harshly with the financial terrorists who control everything.

I rather see the DOD award contracts to US companies based on a semi-competitive basis so long as the bulk of the manufacturing is done in the United States. We need to regain our manufacturing base again with the accompanying jobs.

Anyway, student loans are the closest thing we have to debt slavery. They cannot be discharged by any means and they ensure that a person has to do what they are told in order to hold a job. Don't step out of line, don't protest anything, don't make waves, don't try to change anything. They are a measure of how much the Elite fear an educated public.

Why should they be dischargeable if they were made with US backed monies? I don't want my tax dollars to disappear in bankruptcy court.

Sometimes, I think US graduates should take their degrees and move to countries where the jobs are, sticking the criminal, predatory, and elite controlled government with the bill. Take what you want and screw the rigged system that delivered it.

Easier said than done. Many European countries have laws that make it difficult for someone to just pack up and move there and start working if you're not 1) a citizen of an EU nation or 2) related or married to an EU nation citizen. Australia is about the only 'western' type democracy that has relatively easy immigration.

Of course, if you want to move to Panama, I understand there's somewhat of a 'gold' rush going on right now, so that might be a good choice. The jobs seem to be flowing to India & China, but I am not sure the average American would want to move there and work for the wages paid locally there. People who think creatively might be able to channel their American educations and backgrounds into a good situation though.
 

Makalakumu

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It's a fundamental truth that the PIGS are in trouble financially because they SPEND more than they have on hand, and in fact they spend more than their revenues suggest they can afford. That is not propaganda at all.

The fact that they are now spending more then they have on hand is not questioned. It's how they got there.

Let me give you a real life example. Here in Hawaii, we have a gigantic state run department that controls every school in the state. This is similar to how many of the countries in question run things, so it's a good analogue. When it comes to the benefits offered it's workers, there are pools of money that go into insurance, retirement, and operating expenses.

The operating expenses are payed out, but the insurance and retirement expenses can be invested and grown in order to protect against losses from inflation. What happened here and in all of these countries is that these pools of money were siphoned off when their managers were sold AAA derivatives that were in reality junk. When the hedge funds naked short sold their own products, they crashed the value, cashed in on the insurance policies, terrorized the government to bailout the insurance wings of the banks, and left gaping holes in the accounts that were supposed to take care of workers benefits.

In terms of real money, what this looks like for the HI DOE budget is that out of 2.4 billion, one billion now goes to service the debt that was created by this financial fraud. All of these government agencies are in the same boat because they did the same things, the money was there to pay for these benefits and then it was gone.

We aren't being told what really happened to the money. We ARE being told that the government is spending more then it has. This is true. In addition, we ARE being told that the workers are to blame because they and everyone in the society were living beyond their means. That is a lie. It is propaganda that hides what really happened to the money.
 

Makalakumu

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Wow, that's a whole lot of crazy in a few short paragraphs.

Crazy is true and it's also what we need. The system we have is FAR crazier and will destroy our country.
 

Makalakumu

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I rather see the DOD award contracts to US companies based on a semi-competitive basis so long as the bulk of the manufacturing is done in the United States. We need to regain our manufacturing base again with the accompanying jobs.



Why should they be dischargeable if they were made with US backed monies? I don't want my tax dollars to disappear in bankruptcy court.



Easier said than done. Many European countries have laws that make it difficult for someone to just pack up and move there and start working if you're not 1) a citizen of an EU nation or 2) related or married to an EU nation citizen. Australia is about the only 'western' type democracy that has relatively easy immigration.

Of course, if you want to move to Panama, I understand there's somewhat of a 'gold' rush going on right now, so that might be a good choice. The jobs seem to be flowing to India & China, but I am not sure the average American would want to move there and work for the wages paid locally there. People who think creatively might be able to channel their American educations and backgrounds into a good situation though.

All good points and it's why I think we should just socialize the cost of education. Trying to game a system that is trying to game you ultimately is a lose lose situation. I think that if our society supported people to educate themselves to whatever level they wished without having to worry about loans, we'd create a new American Renaissance. Think about the productive/creative capacity that is lost by denying education to those who can't pay? Society supporting education is one of the few collective economic policies that I support.
 
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