Post: #26

(10-02-2014 06:05 PM)kaotic Wrote:  So what exactly happens if I right now, decide to stop making payments on my student loans ?

You get penalties for each month you don't pay, plus it keeps on growing. It's better to get it out of the way as soon as you can. I think it can also fuck your credit rating if you want to purchase something.

Post: #27

(10-02-2014 06:38 PM)clever alias Wrote:  

(10-02-2014 06:13 PM)samsamsam Wrote:  

(10-02-2014 05:20 PM)DarkTriad Wrote:  " Debt is killer for guys like the ones on this forum. Moving abroad with $80,000+ in debt isn't really an option, unless you never plan on coming back. "

There was a major IAMA on Reddit from someone who did exactly this. Living happy as a clam overseas.

Link if possible please? Thanks.

its definitely possible to do as long as you arent too behind on payments, but never coming back would be really tough.

heres the AMA
http://www.reddit.com/r/IAmA/comments/ko..._loans_by/

OK, some pretty angry people on both sides in that reddit AMA lol.

Post: #28

(10-02-2014 06:38 PM)clever alias Wrote:  

(10-02-2014 06:13 PM)samsamsam Wrote:  

(10-02-2014 05:20 PM)DarkTriad Wrote:  " Debt is killer for guys like the ones on this forum. Moving abroad with $80,000+ in debt isn't really an option, unless you never plan on coming back. "

There was a major IAMA on Reddit from someone who did exactly this. Living happy as a clam overseas.

Link if possible please? Thanks.

its definitely possible to do as long as you arent too behind on payments, but never coming back would be really tough.

heres the AMA
http://www.reddit.com/r/IAmA/comments/ko..._loans_by/

The IAMA I read became an English teacher in China. Seemed pretty pleased with himself. There may be a few different IAMAs on the topic by now.

Post: #29

I know some people in the education industry, and there is definite awareness of this "bubble". Student loan debt is now larger than credit card debt, but in some ways the debt isn't as bad (from the lender's perspective) since you can't really discharge it. With the housing bubble, since mortgages are no-recourse loans, you can basically just drop your keys off at the bank and move out and you're free of that debt (albeit with a bad credit rating).

Anyway, universities are now focusing more on showing "value" and also making students aware of their potential earnings. I guess from the university perspective, they get basically the same $$ from you whether you major in Women's Studies or Accounting, so might as well steer you to one that makes you more likely to do well later and then make alumni donations back to the school.

Tuition and textbook prices have both been outpacing inflation for years now. Universities have been dumping money into non-academic facilities, like luxury dorms, student centers, and sports complexes. I realize some of these are funded with alumni donations or are self-sufficient (football stadiums), but they're not all like that, especially when factoring in operating expenses.

My prediction is we'll see more of the 2nd-tier and 3rd-tier schools focusing heavily on value in their marketing materials. The 1st-tier universities don't care -- they have 10% acceptance rates so there are people beating down their door (many international students, who are ineligible for financial aid and pay full fees anyway) regardless of price.

Post: #30

Here's the thing about all of this tuition, books, rent, etc. talks.....people are still fucking going, and the government is still paying.

Two problems:

1. The people are paying for a few years to party expecting the degree to pave the way. WRONG.

2. The government expects kids to go to school so we can continue to have a great education system and so that the government will now get paid back for all of the money they shelled out for eduction. WRONG.

Here is an article about debt that outlines how much you should be paying for college.

I could rant about this topic for years. But at the end of the day, the problem is that parents are narcissistic dumb enough to send all of their snowflakes to college, and the government wants to overwhelm the system keep paying for it.

Post: #31

I feel so good when I see this



after reading student loan horror stories.

What the fuck do they think is going to happen when they take out nearly 100 grand in loans? Do you expect you'll be making $100 an hour? You're graduating with a mortgage before you even own a house.

Saying "I was too young and naive to understand what I was doing" like most of these kids do is a bull shit excuse.

I was WELL aware of the cost of tuition when I went to university. I took the necessary steps to avoid as much debt as possible. Afterwards, I managed to chisel it down to what it is now in a years time.

In my opinion, the carelessness of these kids to take out such massive debt is a big indicator that they aren't responsible enough yet to receive a university education.

Post: #32

The whole "I was too young to understand what debt was" argument is funny to me.

At age 17, thinking about Universities, I only applied to state universities because I didn't want crippling debt forever.

Was I just some kind of child prodigy genius? Had my brain really developed so much further beyond my peers that I could understand the concept of "down the road"?

Perhaps I am smarter than I ever imagined...

Post: #33

Very interesting stories all around.

I went to college in the 90s. My folks were upper middle class, certainly not wealthy. But even back then, they could easily pay my tuition and housing. I worked so that I had money to spend, but otherwise things were covered, as it was for most people I knew. Even the guys who had to pay their own way paid off their debt fairly quickly. Only a few I talked to have a remaining balance, and it's not insurmountable.

But now, only twenty years later, it is become such a massive burden on all but the super wealthy.

I tried to read every post, so pardon me if this was already suggested, but I think two things need to be done:

1) No more guaranteed/government loans to for-profit schools. They are causing a disproportionate amount of the debt, and furthermore they are for profit. Let them live and die on the free market for their shareholders.

2) Make student debt dischargeable in bankruptcy. This will force banks/gov't to be more cautious about lending money, and it will no longer just be free money for colleges who have no incentive to deny anyone. Gone will be the $150,000 loan for the women's studies major.

To ensure people from poor families have an opportunity, some sort of financial aid system should be adopted.

No matter what, our current system cannot continue.

Post: #34

I'm curious what they plan on doing with this debt. So many debtors unable to make their payments. I'm pretty sure there's going to be some sort of "compulsory" punishment for those behind on their debt.

There will be many dark days ahead.

Post: #35

Is there an ETF or a way to short on Student Loan Debt?

I can already see a way to turn around a bad situation.

Post: #36

(10-03-2014 12:10 PM)Cattle Rustler Wrote:  Is there an ETF or a way to short on Student Loan Debt?

I can already see a way to turn around a bad situation.

Man, what an ETF that would be to symbolize the times. Bet money on how much debt suckers can take. I would put 20% of my savings in such an ETF.

Post: #37

(10-02-2014 06:30 PM)Soothesayer Wrote:  The thing that bothers me is the gift/forgiveness tax. Lets say 20 years down the line, they forgive the loan but take 10-20% or so as a tax. Then it is no longer a student loan but a set of taxes on "income". So that's 30k-40k worth of money you owe the IRS. And they can issue arrest warrants. Extradition. Asset forfeiture. The whole enchilada. Remember what happened *after* the Weimer Republic fell. If you were even related to someone they didn't like, you came under the heavy boot. Then there is the FATCA deal (Pelosi/Reid's baby) which complicates things further.

I've owed the IRS in the five figures and never got threatened with arrest. I was a contractor, didn't pay taxes at the time I was supposed to and just filed a return, said "I owe you X. Don't have it."
They assess penalties and interest, and put you on a payment plan. Unless you lie or hide money it's not a crime as far as I know.

My impression is it's only a crime if you lie, not if you're just a disorganized fuckup unless you lie about your income or defy a court order ( which they don't bother to go after if you negotiate with them and make payments)

I was even able to tell them when I was going to be out of work when I moved to California and they let me stop payments while I got a new job. Essentially they know that if they reduce you to a wreck you can't work and pay them back, although of course there are always horror stories.

Post: #38

(10-03-2014 12:14 PM)Samseau Wrote:  

(10-03-2014 12:10 PM)Cattle Rustler Wrote:  Is there an ETF or a way to short on Student Loan Debt?

I can already see a way to turn around a bad situation.

Man, what an ETF that would be to symbolize the times. Bet money on how much debt suckers can take. I would put 20% of my savings in such an ETF.

They already have a short ETF for retiree benefits. It goes up when retiree's don't collect their benefits. I saw it on Zerohedge, but i can't seem to find it.

With ebola coming stateside....

Post: #39

(10-03-2014 12:21 PM)iknowexactly Wrote:  

(10-02-2014 06:30 PM)Soothesayer Wrote:  The thing that bothers me is the gift/forgiveness tax. Lets say 20 years down the line, they forgive the loan but take 10-20% or so as a tax. Then it is no longer a student loan but a set of taxes on "income". So that's 30k-40k worth of money you owe the IRS. And they can issue arrest warrants. Extradition. Asset forfeiture. The whole enchilada. Remember what happened *after* the Weimer Republic fell. If you were even related to someone they didn't like, you came under the heavy boot. Then there is the FATCA deal (Pelosi/Reid's baby) which complicates things further.

I've owed the IRS in the five figures and never got threatened with arrest. I was a contractor, didn't pay taxes at the time I was supposed to and just filed a return, said "I owe you X. Don't have it."
They assess penalties and interest, and put you on a payment plan. Unless you lie or hide money it's not a crime as far as I know.

My impression is it's only a crime if you lie, not if you're just a disorganized fuckup unless you lie about your income or defy a court order ( which they don't bother to go after if you negotiate with them and make payments)

I was even able to tell them when I was going to be out of work when I moved to California and they let me stop payments while I got a new job. Essentially they know that if they reduce you to a wreck you can't work and pay them back, although of course there are always horror stories.

In my experience working in finance, this is correct.

It's a crime if you lie. If you make a mistake but make a good faith effort to rectify, then at worst it's penalties and interest. And I believe even that can be negotiated.

Point being, in my experience, the gov't isn't always a tyrannical monster. Occasionally you'll get someone who's trying to make a name for themselves, but often they will work with you.

Post: #40

...

Post: #41

https://www.bloomberg.com/news/articles/...rotections

DeVos Undoes Obama Student Loan Protections

Education Secretary Betsy DeVos on Tuesday rolled back an Obama administration attempt to reform how student loan servicers collect debt.

DeVos’s move comes a week after one of the student loan industry’s main lobbies asked for Congress’s help in delaying or substantially changing the Education Department’s loan servicing plans. In a pair of April 4 letters to leaders of the House and Senate appropriations committees, the National Council of Higher Education Resources said there were too many unanswered questions, including whether the Obama administration’s approach would be unnecessarily expensive.

DeVos’s move “will certainly increase the likelihood of default,” said David Bergeron, a senior fellow at the Center for American Progress, a Washington think tank with close ties to Democrats. Bergeron worked under Democratic and Republican administrations over more than 30 years at the Education Department. He retired as the head of postsecondary education.

During Obama’s eight years in office, some 8.7 million Americans defaulted on their student loans, for a rate of one default roughly every 29 seconds.

Former Deputy Treasury Secretary Sarah Bloom Raskin worked on student loan policy during the latter years of the Obama administration, in part over concern that borrowers’ struggles were affecting the management of U.S. debt. DeVos’s decision to reverse some of her work “with no coherent explanation or substitute” effectively means that the Trump administration is placing the welfare of loan contractors above those of student debtors, she said.

In a statement Tuesday, Illinois Attorney General Lisa Madigan agreed: “The Department of Education has decided it does not need to protect student loan borrowers.”

Post: #42

This was a really shitty article. I did not even scrape what specific issues were being changed and the actual impact for borrowers. Clearly they just wanted clicks for advertising, and didn't actually bother to research content.

Post: #43

Is it your guys opinion that you should go Dave Ramsey and pay off your debt (any debt) ASAP, regardless of interest (that is if it's low) if you can? I'm talking school loans first of all ...

Post: #44

That's what I intend to do. As soon as my income stabilizes and I actually have a decent surplus, I'll make minimum payments until I satisfy some basic requirements for stability and health--emergency fund, dentist, new glasses, some basic hardware for work, some nice socks, maybe a new pair of shoes--then dump all of my surplus income into servicing my debt.

Is that technically the wisest course possible? Maybe not, I don't know. But it's the one I'm taking because I'm not going to assume life will just be ducky while I carry a pile of debt. I've been shit on too many times. Right now my life is seriously limited by my debt and nothing else. And the whole reason I'm here--not to say I didn't do these things willingly--is because I listened to the advice of successful people who failed to see how the world was changing, even when I saw bad signs, and then got absolutely fucked because of it.

That's one of the really maddening things of trying to talk to people in my parents' generation. It's like they're wholly incapable of recognizing that the paradigm they lived under--and which only existed for about 1.5 generations--is gone and not coming back. But they keep handing out shitty advice to young people as if it was 1980 or even 1995 again.

Post: #45

I loved watching The Big Short and I've always known the student loan bubble was going to burst. The government has put a stop to the bursting recently with things like earning bases payment schemes that reduce default rates considerably. I've known since 2005 this was going to burst but it's a lot harder to pin point when.

Like other posters have mentioned, how can I profit from this? In The Big Short, the head of a investment firm goes to a bank to create a way to short to housing market called the Credit Default Swap. I'm wondering whether something analogous to student loans already exists.

Post: #46

(04-12-2017 11:04 AM)Repo Wrote:  This was a really shitty article. I did not even scrape what specific issues were being changed and the actual impact for borrowers. Clearly they just wanted clicks for advertising, and didn't actually bother to research content.

Did you read the article? The ACTUAL memorandums are linked in the article

Post: #47

Ok Ill reread, I saw a ton of adds and few details, maybe missed something

Post: #48

If students don't pay their student loans back, the government will happily use their social security payouts in the future as the means to pay it back.

Student loans were designed to rob my generation of its government handouts.

Post: #49

As usual with things in the US, this is a financial scam perpetrated by the powerful (lenders) against the weak. It is a story as old as the country itself, and it doesn't matter who is in power.

For example, look at this article from USA Today ( https://www.usatoday.com/story/money/per.../18417721/ ):

Quote:Since 1978, college tuition and fees have increased by a whopping 1,120%. During that same period, the price of food has increased 244% and medical expenses 601%. In fact, tuition prices have gone up four times faster than the consumer price index, according to a report by Bloomberg.

Over the years, the rapidly increasing costs of an education have been blamed on a number of different factors like professors' inflated salaries, construction booms on campus, students demanding luxury amenities, increased administrative costs, availability of student loans, state funding cuts and technological changes.

Whatever is causing these increases, one thing is certain – they've created big problems for both individual students and the economy at large.

(emphasis added)

Now, look at this article from TIME ( http://business.time.com/2012/02/09/why-...ankruptcy/ ):

Quote:Before 1976, all education loans were dischargeable in bankruptcy. That year, the bankruptcy code was altered so loans made by the government or a non-profit college or university could not be discharged during the first five years of repayment. They could, however, be discharged if they had been in repayment for five years or if the borrower experienced “undue hardship.” Then, the Bankruptcy Amendments and Federal Judgeship Act of 1984 made it so all private student loans were excepted from discharge too.

Two decades of further tweaks to the bankruptcy code ensued until 2005, when Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which made it so that no student loan — federal or private — could be discharged in bankruptcy unless the borrower can prove repaying the loan would cause “undue hardship,” a condition that is incredibly difficult to demonstrate unless the person has a severe disability. That essentially lumps student loan debt in with child support and criminal fines — other types of debt that can’t be discharged.

(emphasis added)

So student loan debt became non-dischargeable in 1976, and since 1978 student loan debt has ballooned like nothing else in the economy. Do you think there may be some connection between these two facts? Gee, I wonder.

The incredible rise in tuition costs is a feature, not a bug in the system. It is the intended effect. I'm sure it can be determined how much money the various lenders have made during this time, and what portion of the lenders' bottom line these profits comprise. Now, take that all, or substantially all away by reforming the Bankruptcy Code. Do you think maybe some people would object to this?

Couple this with the "go to college" mantra, and you have a recipe for disaster. It is important to understand that this is not a partisan issue; neither party is really willing to return to the pre-1976 Bankruptcy Code. A better route is to ask politicians why student loan debt carries the same social responsibility as child support.

I'm not terribly encouraged that Trump will do much to fix this, although undoubtedly he understands the issues.

Post: #50

Peter Schiff mentioned that you will see more Americans simply leave their loans behind by going overseas and it was America that would end up losing.

I'm not so sure. New Zealand actually arrests loan defaulter at airports it seems.

http://m.nzherald.co.nz/nz/news/article....d=11649649
http://m.nzherald.co.nz/business/news/ar...d=11649957


I'm pretty sure America is not above doing this