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(Bloomberg)   Wall St: "If you stop us from using illegal, harassing collection practices against students who never should have borrowed money in the first place, we might not lend money to future students who never should borrow money in the first place"   ( bloomberg.com) divider line
    More: Sad, debt collectors, Debt, trusts, National Collegiate trusts, Student Loan Trusts, future student borrowers, court papers, loans  
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942 clicks; posted to Business » on 08 Nov 2017 at 10:50 AM (2 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



24 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2017-11-08 09:34:09 AM  
Now they're catching on.
 
2017-11-08 10:15:09 AM  
What's that I hear?  *holds hand to ear*  Did I just hear someone volunteer to accept the tax burden of free higher education for all citizens?  Huh?  Want to go for that AND upgraded local 911 Whaambulance service?  Didn't think so.  Sit down and shut the fark up before I think of other people who should never have been loaned money in the first place.

/Reason #5612 I am not allowed to rule over all.
 
2017-11-08 10:22:40 AM  
Just look what you made me do now!
 
2017-11-08 10:30:26 AM  
Won't someone think of the Joe Therriens out there?!
 
2017-11-08 11:46:31 AM  
Well, duh.

I'm sure we'll be seeing tons of comments by people that don't understand that regulatory enforcement impacts more than just investors.

Loans are priced to make them attractive investments, which means the companies that make the loans can sell them off, restore their liquidity and then make more loans.

Do something to impact that execution, or that retroactively impacts those investments, and investors will look elsewhere.  The only way to bring them back is to compensate them for the increased risk. Who will be compensating them? Future borrowers.

Want to solve the problem?

- require people on financial aid to attend community college before finishing up at a a four year university. Much more cost efficient, with no proven quality differential.

- require school districts to share in the cost of remedial education for people that they graduate who cannot perform at a baseline academic level.

- stop throwing tons of money at universities in the form of federal financial aid. They just use it to justify marking up their product.

- stop encouring people who are academically mediocre at best to go to college. Send them to a trade school where they can learn something useful, rather than attempting to teach them philosophy.

- stop building luxury dorms. From 2000 onwards, there has been a boom in building fancy new living facilities. Students should have spartan accommodations to help prepare them for living on their own.
 
2017-11-08 12:19:04 PM  
Yeah, and you know what will happen if people can borrow less money for college?  College prices will come down.

Letting people borrow more money doesn't make it easier to afford a house, or to afford college.  It lets them pay more for those things, but it doesn't make them easier to afford.  Letting people pay more for things increases their price, which makes them harder to afford.

Do you know what makes things easier to afford?  Getting people to earn more money, not getting them to borrow more money.
 
2017-11-08 12:39:47 PM  

TheAlgebraist: Yeah, and you know what will happen if people can borrow less money for college?  College prices will come down.

Letting people borrow more money doesn't make it easier to afford a house, or to afford college.  It lets them pay more for those things, but it doesn't make them easier to afford.  Letting people pay more for things increases their price, which makes them harder to afford.

Do you know what makes things easier to afford?  Getting people to earn more money, not getting them to borrow more money.


Republican-like typing detected.
 
2017-11-08 12:49:20 PM  

gar1013: Want to solve the problem?


These suggestions are impractical. They also ignores the fact that a disproportionate amount of the debt is held by for profit college. Cut them off from federal loans and a lot of the problem is solved.  

- require people on financial aid to attend community college before finishing up at a a four year university. Much more cost efficient, with no proven quality differential.

Two-thirds of full time college students take some kind of financial aid. Forcing them all to go to community college would completely reshape high education in the United States. 

- stop throwing tons of money at universities in the form of federal financial aid. They just use it to justify marking up their product.

- stop encouring people who are academically mediocre at best to go to college. Send them to a trade school where they can learn something useful, rather than attempting to teach them philosophy.


Let's stop with the "world needs more ditch diggers argument." People with college degrees earn more and have higher employment rates.

The issue is that not all college degrees are equal, but they often cost the same. If you only have the grades to go a third tier college you shouldn't be taking out the same level of loans as if you're attending Harvard. 

The easiest solution to this to peg how much you're allowed to take out in loans to the default rate of students who attended the school. If schools are taking federal loans and just producing debtors, they should be cut off.

And as I noted above, the problem is that these students are going to for profit colleges instead of traditional four year colleges.
 
2017-11-08 12:53:25 PM  

Zeb Hesselgresser: TheAlgebraist: Yeah, and you know what will happen if people can borrow less money for college?  College prices will come down.

Letting people borrow more money doesn't make it easier to afford a house, or to afford college.  It lets them pay more for those things, but it doesn't make them easier to afford.  Letting people pay more for things increases their price, which makes them harder to afford.

Do you know what makes things easier to afford?  Getting people to earn more money, not getting them to borrow more money.

Republican-like typing detected.


I am honestly surprised that it comes across like this.

To me, it seems that saddling people with more debt in the name of 'increasing affordability' is something that crosses party lines.  Certainly here in Canada it has continued almost unabated from Conservative to Liberal governments, but the Conservatives did more than the Liberals to encourage it.
 
2017-11-08 01:26:09 PM  

thornhill: gar1013: Want to solve the problem?

These suggestions are impractical. They also ignores the fact that a disproportionate amount of the debt is held by for profit college. Cut them off from federal loans and a lot of the problem is solved.  

- require people on financial aid to attend community college before finishing up at a a four year university. Much more cost efficient, with no proven quality differential.

Two-thirds of full time college students take some kind of financial aid. Forcing them all to go to community college would completely reshape high education in the United States. 

- stop throwing tons of money at universities in the form of federal financial aid. They just use it to justify marking up their product.

- stop encouring people who are academically mediocre at best to go to college. Send them to a trade school where they can learn something useful, rather than attempting to teach them philosophy.

Let's stop with the "world needs more ditch diggers argument." People with college degrees earn more and have higher employment rates.

The issue is that not all college degrees are equal, but they often cost the same. If you only have the grades to go a third tier college you shouldn't be taking out the same level of loans as if you're attending Harvard. 

The easiest solution to this to peg how much you're allowed to take out in loans to the default rate of students who attended the school. If schools are taking federal loans and just producing debtors, they should be cut off.

And as I noted above, the problem is that these students are going to for profit colleges instead of traditional four year colleges.


But the world does need dicth diggers. Historically people with college degrees earned more than those without because high paying jobs required them. We have now passed the point where college graduates exceeds the number of high paying jobs. Now companies are requiring a four year degree for low level positions (with a salary that couldn't support paying off student loans.)

Stop with "everyone needs to go to college" bullshiat.
 
2017-11-08 01:38:51 PM  
Stop with "everyone needs to go to college" bullshiat.

 How in the world are they going to get funds to pay for the new building they want to name after the old university president?

/did not go to college
//surrounded by phd's
///not working at starbucks
 
2017-11-08 01:43:06 PM  
TheAlgebraist:   To me, it seems that saddling people with more debt in the name of 'increasing affordability' is . . .

You, like many of these kids, are missing an important part of the equation.  Saddling some kids with more debt IS increasing affordability, for other kids.

http://hechingerreport.org/student-su​b​sidies-of-classmates-tuition-add-to-an​ger-over-rising-college-costs/

They're getting a first class lesson in Socialism.
 
2017-11-08 01:52:35 PM  

gar1013: Want to solve the problem?


VERY well put.
 
2017-11-08 01:52:50 PM  

Zeb Hesselgresser: TheAlgebraist:   To me, it seems that saddling people with more debt in the name of 'increasing affordability' is . . .

You, like many of these kids, are missing an important part of the equation.  Saddling some kids with more debt IS increasing affordability, for other kids.

http://hechingerreport.org/student-sub​sidies-of-classmates-tuition-add-to-an​ger-over-rising-college-costs/

They're getting a first class lesson in Socialism.


No, it's still making things worse.  If people were unable to assume that much unsecured debt, then college prices would come down for everyone.

"Less debt" would, across the board, improve the economy in the long run. Now, the damage that "less debt" would do in the short-term is going to be high, perhaps catastrophic.  And it's that that makes it nearly a political non-starter for anyone who wants to get reelected ever.
 
2017-11-08 01:53:14 PM  

max_pooper: But the world does need dicth diggers. Historically people with college degrees earned more than those without because high paying jobs required them. We have now passed the point where college graduates exceeds the number of high paying jobs. Now companies are requiring a four year degree for low level positions (with a salary that couldn't support paying off student loans.)

Stop with "everyone needs to go to college" bullshiat.


Ditch digger jobs are shrinking because of automation. And that's why the unemployment rate for people without a college degree is so high. In fact, in manufacturing, many of the remaining jobs actually require a college degree because the work involves operating complex computerized machinery.

All of the data shows that Americans are much better off with a college degree. And a college degree doesn't require paying so much in tuition that you have to take out massive loans. The problem is that there are third tier colleges and for profit schools that give out garbage degrees and the availability of federal loans allows them to charge insane amounts for tuition - the price doesn't reflect the value of the education.
 
2017-11-08 02:04:21 PM  
TheAlgebraist:

No, it's still making things worse.  If people were unable to assume that much unsecured debt, then college prices would come down for everyone.

So you're saying easy credit leads to rising prices?  Like what you might call, I don't,  . . . a bubble?

I know, the participants in that dynamic are to few to be reflected in the whole.  You are correct.
 
2017-11-08 02:40:33 PM  
thornhill:
The issue is that not all college degrees are equal, but they often cost the same. If you only have the grades to go a third tier college you shouldn't be taking out the same level of loans as if you're attending Harvard.

On a similar note, not all college majors are equal.  The risk for some degrees being unable to translate into gainful employment capable of paying back loans is higher than others, and we should consider that when we hand out loans.
 
2017-11-08 03:01:13 PM  

max_pooper: But the world does need dicth diggers.


Fewer and fewer as time goes on.  In fact, we need almost none compared to where we were in the 1960s.  Our economy isn't built on unskilled manual labor anymore.  We certainly need more trade skills, I'll grant that one.

There aren't more "highly skilled" people than "highly skilled" jobs.  Most technical companies are at a loss to fill technical, skilled positions today.  The issue is that current graduates can't find their asses with both hands, a map, a flashlight, and three blinking signs that say "your ass here" pointing directly at their rear end.  The piece of paper signals an academic understanding of a subject, not a working one.

Kids don't spend time doing internships anymore.  They focus on the paper and grades, but never application or use.  Even if they sacrifice some time for unpaid internships, they need to be exposed to a fair amount of an industry before graduation if they want to get a job.  You can't pull hardware engineers or software developers or MIS degree holders right out of school and pay them to do a job.  They're clueless.  Dangerously clueless, from a business perspective.

In short - college students need to be spending some of their time in college with their hands in their industry.  Regardless whether it's paid or not. If they don't, they're barely more useful than a high school graduate.
 
2017-11-08 03:13:02 PM  

houginator: thornhill:
The issue is that not all college degrees are equal, but they often cost the same. If you only have the grades to go a third tier college you shouldn't be taking out the same level of loans as if you're attending Harvard.

On a similar note, not all college majors are equal.  The risk for some degrees being unable to translate into gainful employment capable of paying back loans is higher than others, and we should consider that when we hand out loans.


You're conflating two separate issues: The cost/benefit of having a college degree and paying too much for a college degree.

There's no shortage of data showing the lifetime earnings of certain types of degrees and the colleges that award them.

The solution is not to tell people not to go to college, but stop letting crappy colleges benefit from federal loans.
 
2017-11-08 06:03:35 PM  
I'd like to think that Education As Scam was a recent thing, but I think it began with the influx of GIs after WW2. But whenever it began, it is absolutely a scam now. The local U has just finished transforming itself from a school to a landlord with an athletics organization attached. It would be too melodramatic to say I wept over the transformation -- I've been cynical for over 50 years -- but the collapse is just another entry in the ledger of Crap Parts of America.
 
2017-11-08 06:48:12 PM  

gar1013: Well, duh.

I'm sure we'll be seeing tons of comments by people that don't understand that regulatory enforcement impacts more than just investors.

Loans are priced to make them attractive investments, which means the companies that make the loans can sell them off, restore their liquidity and then make more loans.

Do something to impact that execution, or that retroactively impacts those investments, and investors will look elsewhere.  The only way to bring them back is to compensate them for the increased risk. Who will be compensating them? Future borrowers.

Want to solve the problem?

- require people on financial aid to attend community college before finishing up at a a four year university. Much more cost efficient, with no proven quality differential.

- require school districts to share in the cost of remedial education for people that they graduate who cannot perform at a baseline academic level.

- stop throwing tons of money at universities in the form of federal financial aid. They just use it to justify marking up their product.

- stop encouring people who are academically mediocre at best to go to college. Send them to a trade school where they can learn something useful, rather than attempting to teach them philosophy.

- stop building luxury dorms. From 2000 onwards, there has been a boom in building fancy new living facilities. Students should have spartan accommodations to help prepare them for living on their own.


Huh?
The article is on how debt collectors illegally coerced people with student loans.  One classic example is to convince the debtor to default in order to "start the renegotiation process".  Nope.  Defaulting in most cases results in a massive 50% penalty, and the debtor still can't pay.  The debt collectors then get to garnish the debtors social security once the debtor retires.
The debt collection industry operates on horrible margins, paying pennies on the dollar for student and medical debt, then hiring minimum wage or commission employees who need to close out debt or be fired.  This lends itself to scum bags who have no long term commitment or consequences to their actions.
Want to ensure college loans are paid? Subsidize higher education and make the loans manageable with a part time job while you attend college.
 
2017-11-08 07:09:04 PM  

Northern: The article is on how debt collectors illegally coerced people with student loans.  One classic example is to convince the debtor to default in order to "start the renegotiation process".  Nope.  Defaulting in most cases results in a massive 50% penalty, and the debtor still can't pay.  The debt collectors then get to garnish the debtors social security once the debtor retires.
The debt collection industry operates on horrible margins, paying pennies on the dollar for student and medical debt, then hiring minimum wage or commission employees who need to close out debt or be fired.  This lends itself to scum bags who have no long term commitment or consequences to their actions.
Want to ensure college loans are paid? Subsidize higher education and make the loans manageable with a part time job while you attend college.


It's stultifying that what should be a process for educating future leaders and scientists has become a money squeeze.

I earned a worthless BS in Psychology (if any friends or loved ones are pursuing a BS in Psychology without going on to PsyD or MD or any other higher education, don't let them do it). After about six months of unemployment and considering a job at Home Depot doing manual labor, I managed to land a decent job nowhere near my field of study and have worked my way up my organization. I have thankfully been able to pay off my loan. I went to in-state public university so it wasn't even that big of a loan compared to what some of these sad sacks are getting socked with. If I hadn't gotten that foot in the door I'd be just like these other folks who make poor decisions as youths and then wind up paying for it for the rest of their lives.

/puzzling now whether MLIS or equivalent is worth the time, effort, and money
//probably not
///but that's basically where I am now
 
2017-11-08 08:07:49 PM  
Gee if only we had some other ideas of how to pay for college.

Maybe a method that has been used before to cover state colleges.

Bernie?

Nayh, we might need another F-35.
 
2017-11-09 04:34:59 PM  
But where will we get our journalists and women's studies experts?!
 
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