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Message
Probably been said but there is a fix to the student debt "crisis"
Posted on 5/16/24 at 9:04 am
Posted on 5/16/24 at 9:04 am
Remove federal backing and allow chapter 11 bankruptcy to apply to student loan debts. This way clearing or reducing the debt doesn't come without consequences and the creditors who are approving bad loans are punished too.
11
Posted on 5/16/24 at 9:08 am to Sailin Tiger
I'm still on board with having universities pay out of their own endowments.
Posted on 5/16/24 at 9:11 am to PaperTiger
quote:
I'm still on board with having universities pay out of their own endowments.
I believe the "endowment value" should be taxed heavily.
Posted on 5/16/24 at 9:31 am to Sailin Tiger
quote:
essage
Probably been said but there is a fix to the student debt "crisis"
This is one.
No more of an open check book for unlimited student loans.
Loans should be tied to value of the degree received and potential future earnings.
So for example, a liberal arts major that is only expected to earn 50K a year is only eligible for 75K in student loans.
Meanwhile a medical doctor that is expected to make 200-500K a year can get a million dollars in loans.
Also, grades matter. Anyone who has a GPA that drops below a 2.5 is no longer eligible for student loans.
One loophole may be if a student wants to game the system by saying they are going to be a medical doctor, but take nothing but liberal arts classes, but you can close that by requiring loans only be used for courses involved in the degree of study.
Posted on 5/16/24 at 9:33 am to PaperTiger
quote:
I'm still on board with having universities pay out of their own endowments.
Id be fine with taking 100%. Universities are the greediest orgs on the planet
Posted on 5/16/24 at 10:04 am to Sailin Tiger
Why not start with making interest tax deductible maybe tax credits for principal payment?
Posted on 5/16/24 at 10:06 am to Timeoday
quote:
I believe the "endowment value" should be taxed heavily.
No.
Posted on 5/16/24 at 10:09 am to Sailin Tiger
You can't solve it as long as nothing changes. They could forgive all the debt, and we would be right back here in 10-20 years at the current lending rate.
1. Maximum federally backed student loans should be the cost of the in-state tuition for the most expensive PUBLIC school in that state.
This would solve much of the problems going forward.
You want to go to Tulane? Fine. But the most you can borrow is how much it costs to go to LSU. You want to go to Harvard? Fine, but the most you can borrow is how much it costs to go to UMass.
You want to go to the University of Michigan, but you live in Texas? Fine, but you can only borrow up to the in-state tuition amount.
There is no reason for the government to be on the hook for the dalliances of teenagers.
1. Maximum federally backed student loans should be the cost of the in-state tuition for the most expensive PUBLIC school in that state.
This would solve much of the problems going forward.
You want to go to Tulane? Fine. But the most you can borrow is how much it costs to go to LSU. You want to go to Harvard? Fine, but the most you can borrow is how much it costs to go to UMass.
You want to go to the University of Michigan, but you live in Texas? Fine, but you can only borrow up to the in-state tuition amount.
There is no reason for the government to be on the hook for the dalliances of teenagers.
Posted on 5/16/24 at 10:09 am to tiger7166
quote:
Why not start with making interest tax deductible maybe tax credits for principal payment?
It already is (up to $2500) as an adjustment to income, thus not subject to standard deduction limitations. Student loan interest is reported on Form 1098-E.
This post was edited on 5/16/24 at 10:13 am
Posted on 5/16/24 at 10:15 am to Tarps99
quote:
Loans should be tied to value of the degree received and potential future earnings.
Totally against this. Too subjective.
A biology degree by itself is not very valuable, but many of those students go to med school.
A poli sci degree is not very valuable, but many of those students go to law school.
Many such cases.
Posted on 5/16/24 at 10:52 am to Bjorn Cyborg
Then why don't they just go to med school? Or law school?
Posted on 5/16/24 at 10:54 am to Bjorn Cyborg
quote:
Totally against this. Too subjective. A biology degree by itself is not very valuable, but many of those students go to med school. A poli sci degree is not very valuable, but many of those students go to law school.
It doesn’t need to be that subjective.
Once you get to the Med school and law school levels obviously your loan amounts can be increased.
The goal with this is stepping. It is like having a credit card. Capital One just doesn’t give you a 100k limit credit card with no credit. You start with lower limit amounts and work up to your earning potential.
Posted on 5/16/24 at 1:25 pm to WhiskeyThrottle
quote:
Then why don't they just go to med school? Or law school?
Without an undergraduate degree?
Posted on 5/16/24 at 1:30 pm to Sailin Tiger
Both the creditors and the universities need to be more careful who gets a loan. They need to share the risk, not just offload it to government and taxpayers.
In Korea, a student can't be admitted to a fine art program unless their parents can assure them an adequate income long after graduation.
Posted on 5/16/24 at 1:49 pm to Sailin Tiger
Schools have little incentive. Their main goal is mainly to indoctrinate. They have skated long enough.
1. Endowments pay a high percentage of the loan if in default.
2. Students can "work off" via military only if military wants their service. Military does not have to take them.
3. Loan limits on liberal art degrees.
Off topic: Medical professions should be receiving some sort of incentive(s) if career is US based only. Leave the US and incur a heavy penalty.
1. Endowments pay a high percentage of the loan if in default.
2. Students can "work off" via military only if military wants their service. Military does not have to take them.
3. Loan limits on liberal art degrees.
Off topic: Medical professions should be receiving some sort of incentive(s) if career is US based only. Leave the US and incur a heavy penalty.
This post was edited on 5/16/24 at 1:55 pm
Posted on 5/16/24 at 1:53 pm to Sailin Tiger
quote:
Remove federal
You do realize that you can be arrested for using those two words, don't you?
Posted on 5/16/24 at 2:19 pm to Mizzou Mule
I’ve said this, I’m ok with loan forgiveness for
Teaching, law, medical field, etc any profession that’s critical and in need, and you give 5 years of “service” to
School districts in need of teachers, public defenders office, hospitals under staffed, etc. I’ll help you if you help me. If you want a general studies degree or arts sorry…. Not my problem you spent 100k or more and have to work at Starbucks because you can’t find a job in your field. I joined the military because my parents couldn’t afford to send me to LSU after my sister just finished 6 years of school. Later got a trade and although she has her doctorate degree and works with abused children, I make more.
Teaching, law, medical field, etc any profession that’s critical and in need, and you give 5 years of “service” to
School districts in need of teachers, public defenders office, hospitals under staffed, etc. I’ll help you if you help me. If you want a general studies degree or arts sorry…. Not my problem you spent 100k or more and have to work at Starbucks because you can’t find a job in your field. I joined the military because my parents couldn’t afford to send me to LSU after my sister just finished 6 years of school. Later got a trade and although she has her doctorate degree and works with abused children, I make more.
Posted on 5/16/24 at 2:22 pm to Tarps99
quote:
Loans should be tied to value of the degree received and potential future earnings.
Potential future earnings are tied to decisions and work ethic. Gov should not be determining the "value" of a degree.
Posted on 5/16/24 at 2:50 pm to PaperTiger
quote:
I'm still on board with having universities pay out of their own endowments.
Been my position from day one - they are the ones delivering the product - if they think a person can earn enough to pay back the cost for their tuition, then loan the money - they know what they are teaching - and if they are producing a bad product, they should never expect the taxpayer to fund their grift.
Posted on 5/16/24 at 2:59 pm to Sailin Tiger
The people who make the loan and finance the loan need to be tied to the risk of the loan. We all saw what happened in 2008 when mortgage brokers would make any loan to anyone and mortgage buyers bought any loan regardless of credit quality. The student loan situation today is very similar.
The school making the loan and the people financing the loan need to risk their own money in case the borrower defaults. Then, they will be more careful about who they loan to.
When I was in college, you could only borrow about half of the total costs in your freshman and sophomore years, you could borrow a little more in your junior and senior years. This probably kept people out of trouble.
Those loans though were intended for people going to a four year public college. That program back then (GSL) wouldn't loan you enough money to go to a private college. I think Clinton changed that.
The school making the loan and the people financing the loan need to risk their own money in case the borrower defaults. Then, they will be more careful about who they loan to.
When I was in college, you could only borrow about half of the total costs in your freshman and sophomore years, you could borrow a little more in your junior and senior years. This probably kept people out of trouble.
Those loans though were intended for people going to a four year public college. That program back then (GSL) wouldn't loan you enough money to go to a private college. I think Clinton changed that.
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