Student loan borrowers refusing to pay. You signed the contract now pay what you owe!!!!!

[Sig]

A couple of things to consider.
Needs-based - most public colleges have scholarship programs making them free or cheap and even Harvard has a needs-based subsidy.
You borrowed from a government agency and they most certainly can cancel your contract.
You borrowed from a private entity - even with a government guarantee, it's still unclear how the conversation would impact this.
Here in Illinois - which is a notoriously screwed up state fiscally - the public colleges and their scholarships make it fairly easy for the needs-based student to attend. Certain specialties like nursing and teaching also have numerous subsidy programs and many are not even needs-based.
The government loans are currently in a payment hiatus through September so they have already been modified by the lender.

Somewhat counterintuitively, the more expensive and prestigious the college the cheaper it is to attend if you can't afford it. For example Stanford is tuition free for all students whose parents make less than $125,000 and also adds free room and board if your parents make less than $65,000/year.

 

[Tony Optionaro]

Realistically, not an option for most U.S. student citizens.

How come?

 

[KINGOFSHORTS]

This is just completely wrong....you signed the damn contract so pay your dues...pay up for your education you sooo desperately wanted. No one forced you to take an $87,000 student loan, you received an education now pay your loans.... Now these borrowers want to walk away....With the government talking student loan bailouts more and more people are refusing to pay. What are we setting up here...this could just snowball to other areas which if you notice it is with renters getting free housing since the pandemic touched down....



https://www.cnbc.com/2021/02/12/mee...owers-who-are-refusing-to-pay-their-debt.html

Trump walked aways on his debts plenty of times and he was hailed as a smart business man. But when its Joe Six pack's broke ass kid trying to get a degree that ends up not providing a ROI they are the bad people.

Hey its a business decision like any other, people walk away from debts all the time and then start all over on a new business and you don't see the same hostile media coverage.

what's good for the goose is good for the gander

 

[KINGOFSHORTS]

As soon as government forgiveness of student debt was first mentioned, you just knew that the cat was out of the bag, and people would stop repaying their student loans en masse.

Remember the most important part about all of this - government "forgiving" student loan debts is much more about bailing out the lenders (banks) than it is about bailing out the borrowers (students).

I would assume that at the time this bill was first proposed, banks were already deeply in the red on these loans due to students defaulting.

Maybe they can get a bailout like the banks, wall street firms and other miscellaneous white shoe firms got in 2008.

 

[Spaghetti Code]

Not directly related, but there was an article a few year ago talking about why College tuition is so high to begin with. (Student loans would be a non issue if the amount was 1/10th of what they are now). The claim of the article is that tuition has to remain artificially high in order for colleges to remain tax free organizations. This in turn allows them to grow their endowments tax free as well. By making tuition ridiculously expensive, and then give away huge scholarships (for some) to lower the price, they can make it appear as though they are loosing a lot of money. Pretty interesting (but long) article:

https://www.conradbastable.com/essays/the-uncharity-of-college-the-big-business-nobody-understands

 

[Sig]

Not directly related, but there was an article a few year ago talking about why College tuition is so high to begin with. (Student loans would be a non issue if the amount was 1/10th of what they are now). The claim of the article is that tuition has to remain artificially high in order for colleges to remain tax free organizations. This in turn allows them to grow their endowments tax free as well. By making tuition ridiculously expensive, and then give away huge scholarships (for some) to lower the price, they can make it appear as though they are loosing a lot of money. Pretty interesting (but long) article:

https://www.conradbastable.com/essays/the-uncharity-of-college-the-big-business-nobody-understands

I've always believed the world would be a far better place if tax exempt status for universities and religious organizations were both revoked.

 

[NoahA]

I've always believed the world would be a far better place if tax exempt status for universities and religious organizations were both revoked.

It would be even better if you just let the market decide every price without any incentives for anything.

 

[mfaulk57158]

As soon as government forgiveness of student debt was first mentioned, you just knew that the cat was out of the bag, and people would stop repaying their student loans en masse.

Remember the most important part about all of this - government "forgiving" student loan debts is much more about bailing out the lenders (banks) than it is about bailing out the borrowers (students).

I would assume that at the time this bill was first proposed, banks were already deeply in the red on these loans due to students defaulting.

Agreed, that's why no one lost their house when the government bailed out banks during the GFC.

 

[mfaulk57158]

Has anyone here thought about the moral hazard of banks and colleges convincing TEENAGERS of agreeing to billions in loans without providing any type of financial education. No one fights as hard for their master as a slave.....many in here should check their back for a scar.

 

[Sig]

Has anyone here thought about the moral hazard of banks and colleges convincing TEENAGERS of agreeing to billions in loans without providing any type of financial education. No one fights as hard for their master as a slave.....many in here should check their back for a scar.

As an FYI, the term "moral hazard" has a very specific meaning in finance, it's worth a google.