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03-23-2024, 04:12 PM | #155 | |
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I feel a bit for these students who pile up student loan debt because they are climbing such a huge financial hill after they graduate. But it didn't stop them from partying, going for $7 Starbucks, and eating out all the time. Actions have consequences. If their debt is forgiven, what life lesson message does that send? At the macro level, the education system is broken and needs to be revamped. When I worked in the Netherlands, my colleagues explained the student were put on a university track or a vocational track in something like 7th grade. So, if you weren't deemed university material, you learned a trade instead. This notion that you should go to a university because of social pressure or parent pressure when you don't want to go or you are not cut out for it is a huge waste of time and social expense. Getting loans to get degrees that that have little or no hope of getting a student a job where they can pay back the loan just adds to the social issue. I'm glad I got a great education and was able to do it without debt. I made a great living and in my case, my education helped me in my career. I feel for those who loaded up on debt and chose degree paths that didn't yield jobs with incomes to pay off the debts. But, these adults signed contracts. Letting them off the hook completely sets a ridiculous precedent. |
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03-23-2024, 04:14 PM | #156 |
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#1 is interest on the student loan. This is not a tax, it is the cost of borrowing. While the rate may appear high, it is not as high as credit card interest, for example. The rate reflects the cost of money, its time-value, and the risk of non-payment including late payment (including associated collection costs), and the deferred start to payments for a variety of reasons (one would be loans to a freshman can’t expect to begin payments until after graduation, so at least 4 years). It also likely includes some actuarial cost since not all borrowers will live long enough to repay in full, but I suspect that is small. These loans would not exist without the federal guarantee, which protects the lenders from loss. Taxpayers pick that up, along with program administration costs. None of this is a tax to the borrowers, in fact it is a taxpayer funded subsidy.
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03-23-2024, 04:16 PM | #157 | |
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03-23-2024, 04:20 PM | #158 | ||
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#1 is interest on a loan that was entered into by presumably arm's length parties. |
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03-23-2024, 04:37 PM | #159 | |
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This whole tangent is due to Watching The World Burn being so bent out of shape at the use of the word profit when referring to revenues that exceed expenses on a government program. But also not wanting to call it a tax. But it is “interest”. Interest is revenue generated on loans which drives profits on loans. Just like rent is revenue generated on real estate that drives profit on real estate. The double speak is insane. |
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03-23-2024, 05:05 PM | #160 | |
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Of course they tax people, that's how they derive a supply of money to redistribute into the form of services. But they didn't earn it in the truest sense of the word. Even interest charged on loans - from where did that money come from? Did they earn the capital that was loaned? If it was not their capital to begin with, then hard for me to suggest they have earned anything or contributed anything. Again, this goes back to the previous point wherein I believe you could reasonably view the government as a parasite and be reasonably accurate in doing so. |
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03-23-2024, 05:09 PM | #161 |
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This might help on some of the points in this thread: https://thecollegeinvestor.com/39673...student-loans/
I think the discount rate in these analyses is too low (meaning the cost of the program is higher and it is a net loss - or net subsidy) because of the credit risk. But taking the article as it is, I would note that no federal loan programs that I’m familiar with use the term “profit”. I’ve only ever seen “negative subsidy” which implies that the administering department (education in this case) could reduce its share of the federal budget or push some funds to another department. Also worth noting is the Treasury is the lender, not the dept of Education. This is typical with most (all?) federal lending programs. Grants come from the departments issuing them, and are in their federal budget allocation. Student loan forgiveness administratively is an increase in Ed’s budget being used to pay the Treasury back for the loan. |
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03-23-2024, 09:52 PM | #162 | |
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In fact you simply ignored my point entirely and just ranted about the same old. Student loan redistribution (which is the topic of this thread) fixes none of the issues you keep going on about. |
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03-24-2024, 11:37 AM | #163 |
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Frankly, society lied to a whole generation of children when they said “work hard and you'll get ahead.” The constant display (adulation) of white-collar culture means unless you end up in slacks at an office, you don’t really belong. And how do you end up in slacks at an office? By going to college. No matter the cost apparently.
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03-24-2024, 04:56 PM | #164 | |
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Flame suit on! |
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03-24-2024, 06:14 PM | #165 |
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