Student Debt Nationalization: Just Add it to the National Debt

Posted by rbroberg 3 years, 2 months ago to Government
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"President Obama had a great idea back in 2010: nationalize the student loan program, and its problems would soon go away. It didn't happen. Instead, more people are refusing to pay their student loans than ever before."
SOURCE URL: http://www.investors.com/politics/editorials/the-federal-governments-student-loan-fraud/


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  • Posted by term2 3 years, 2 months ago
    The government created the problem by backing the student debts. Now the tuitions have gone through the roof since it was so easy to just sign on the line. Too many people went to college for the wrong reasons with no idea of what that education would get them and how they would pay for it. The chickens have come home to roost.
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    • Posted by TheRealBill 3 years, 2 months ago
      The college bubble shares a lot of underpinnings with the housing bubble. Both were the result of a failure to analyze data.

      Much of the housing bubble can be traced through the notion that it was in the "national interest" that people own homes. This was due to the data which showed that children who live in or grew up in homes owned by their parents did better in nearly every measurement. Rather than look into root causes, it was determined by the powers and pundits that be that it was the home ownership that mattered. So that became the golden ticket to national prosperity and happiness. We see how that turned out.

      The same was done with a college degree. Those with one tended to make a lot more money than those without. So clearly everyone should have one and the path to national prosperity and the end of poverty was for everyone to have one.

      But in both cases it was not the owning of a home or a degree that made the difference. It was the mindset and grit it took to get those things that mattered. Children growing up in a home their parents owned were exposed to the work ethic it took to earn the money needed to buy the house. People with degrees were if more workplace value because a) degrees tended to be in the sciences more than not and b) they were not commonplace.

      We've seen the housing bubble burst and the pain it caused. We are going to have to endure similar pain for the college bubble bursting. It is only a matter of when and how painful it will be. But it is coming.
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      • Posted by term2 3 years, 2 months ago
        I think it might come from NEW students just not choosing to go to college because its expensive and wont get them anywhere. The humanities jobs just dont exist in today's economy-resulting in a general BA degree pretty much worthless in most situations.
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        • Posted by TheRealBill 3 years, 1 month ago
          yeah it has been two weeks, but a man has to work and all. ;)

          Yes, the choosing to not go in the first place is coming. The college boom, largely in the "humanities" and "social/political sciences", is tied directly to the growth of government in my estimation. The government has been soaking up all these graduates with degrees in nothing productive. I see a move to stop demonizing non-college jobs and return vocational training to a first-class citizenship as one way to, longer term, cut the government. A minor one, and definitely a long term one, but that is how my mind works. Camille Paglia also has some interesting things to say about the humanities in universities.

          Fortunately I saw the writing on the wall with regards to diffusion of classes (my original field was aerospace engineering) which to my young but skeptical eyes looked much like colleges trying to pad out your time there. Nothing has surface to even begin to dissuade me from that position in the last few decades.
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  • Posted by $ CBJ 3 years, 2 months ago
    Unfortunately, this issue is not high on most taxpayers' radar. One way of calling attention to this and other ways the feds waste taxpayers' money, would be to issue an itemized receipt for each federal income tax payment, highlighting the amount that particular taxpayer paid for bad loans, various subsidies for special interests, foreign aid, "climate change" initiatives, interest on the national debt, and other government "services" that have nothing to do with its primary purpose of protecting lives and property. Taxpayers might be encouraged to think differently when confronted with actual dollar-and-cents amounts being extorted from their pocket to fund these worthless programs.
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  • Posted by $ WilliamShipley 3 years, 2 months ago
    How about we require universities who participate in federal student loans to pay at least part of the cost of their former student's defaults?

    Schools cheerfully help students sign up for tens or hundreds of thousands of dollars in loans that they benefit from, advise them to follow coursework without regard for the ability to get a job afterward and then haughtily proclaim "we are not a trade school" when asked what work they are preparing the student for. Our schools have a philosophy left over from the days when they educated the upper class for drawing room conversations. Today's students need to be able to get work.
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    • Posted by $ jbrenner 3 years, 2 months ago
      This argument presumes that universities are private entities. While my university is private, requiring state government universities to repay part of the cost of their former students' defaults would only transfer the burden to a slightly smaller group of taxpayers. The answer is to privatize all universities and student loans, with those universities making the decisions regarding whether students will repay upon graduation.
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      • Posted by $ CBJ 3 years, 2 months ago
        I still think it's a good idea for future student loans, not retroactive. The taxpayers in each state elect the state legislators and governors who support these bloated and wasteful citadels of "higher education." Let's see how those taxpayers vote if their legislators put them on the hook as co-signers for any future loans made to their state universities' students.
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        • Posted by $ jbrenner 3 years, 2 months ago
          Whether taxpayers know it or not, they are already on the hook as co-signers for student loans at state universities. Personally I resent subsidizing my competition.
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    • Posted by LibertyBelle 3 years, 2 months ago
      And yet people tried to tell me( before I finished high school) that I would need a college education to get a good job .
      . A good thing I didn't believe them and didn't fall for it.
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    • Posted by freedomforall 3 years, 2 months ago
      And let the banksters eat the rest since they created the money they loaned from nothing. Looting scum.
      2 to 1 it was a bankster that got the federal government to guarantee the loans so the banksters never lose a dime.
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  • Posted by LibertyBelle 3 years, 2 months ago
    I wish government would learn not to meddle in
    matters which are none of its function, and which
    it does not understand.

    As to tuition going through the roof, I think maybe the answer would be a nationwide boy-
    cott. Maybe if those professors, etc., got it
    through their skulls that nobody was willing to
    buy their product, they's come down off their
    high horse.
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  • Posted by DeanStriker 3 years, 2 months ago
    The only money Gov has with which to fund student loans is stolen from the taxpayer "citizens", and funding by increasing the Debt is also considered the charged to we "citizens" who never agreed to any of all that.
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  • Posted by freedomforall 3 years, 2 months ago
    So what is the financial interest of the author that he wants the taxpayer to eat the loans all now ? Is he a student with a big loan? Or maybe a graduate of law school making $300/hour who wants the taxpayers to pay off his loan so he can buy the $100k Porsche on credit that he can't get if he has the big student loan debt. He probably voted for Obama and Hitlery.
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    • Posted by 3 years, 2 months ago
      The author of the piece, if that is the author referred to, clearly states: "It's time to remove government from higher education, before it wrecks another once-great institution." If the author to whom you refer is the present one, then on what basis does freedomforall formulate his stereotype when all he knows is the name of the present author?
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  • Posted by CircuitGuy 3 years, 2 months ago
    I used to believe in federal student loans. My thought was it's in our interests to help poor people get an education because the economy benefits and educated people are less likely to do things that end up costing me money. So, my old thinking went, we can multiply the power of federal funding of education by making them loans instead of grants.

    I think this is wrong now because regardless of how you're paying for it, I don't think mostly stopping working and focusing on education for many years is right. You get experience from working, and you find out what you like. Not working and going to school for many years has the risk that after spending all that money, regardless of where you got it, and finding you don't like the jobs you trained for.

    I never had student loans, but if I had them now and politicians were even musing about partial forgiveness, that would make me pay the minimums on the loans and invest wealth I would have put toward retiring debt into other investments. I'd be hoping to get my debt forgiven, either for nothing, or for doing some small project involving rural broadband or something.
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