Student debt is over $1.6T and hardly anyone is paying down their loans(cnbc.com)
cnbc.com
Student debt is over $1.6T and hardly anyone is paying down their loans
https://www.cnbc.com/2020/01/16/student-loan-debt-is-over-1point6-trillion-and-balances-arent-going-down.html
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The biggest moral hazard is on the front end - most loans are government guaranteed, so banks are making a risk free profit from which borrowers are legally prevented from defaulting on (i.e. you can’t escape the loans through bankruptcy).
Until this is fixed, everything else almost doesn’t matter.
Until this is fixed, everything else almost doesn’t matter.
Pumping young and dumb people full of debt is bad design. This phenomenon will die as we upgrade the economy.
Change is not going to come easy considering us government is profiting off student loans while running a massive deficit.
When the govt makes a profit off student loans, there is a problem.
Look at the interest rates.. I know people like myself are paying every month, but does not feel like I'm making a dent.
Look at the interest rates.. I know people like myself are paying every month, but does not feel like I'm making a dent.
Education should be free before healthcare is made free. Both should be free if the country can afford it. If people are educated, free healthcare will not be required to be "explained" or fought for.
Universities already use student loans as a means of converting taxpayer money into institutional and personal wealth. Convince employers that people without a degree are worthless, then charge tens/hundreds of thousands of dollars for a degree, then get the government to give out credit to people who would never ever get that kind of credit otherwise, so they can pay for the degree they don't really need (and end up working at starbucks anyway). Note the part of the article explaining how nobody is paying their student loans.
Free education only works when the entire education system isn't rent seeking. Otherwise, you're just setting up a taxpayer funded money fountain for unscrupulous administrators.
At least with healthcare, people generally don't use it unless they actually need it.
Free education only works when the entire education system isn't rent seeking. Otherwise, you're just setting up a taxpayer funded money fountain for unscrupulous administrators.
At least with healthcare, people generally don't use it unless they actually need it.
Cancelling debt in some ways sounds appealing, but it has the unfortunate effect of punishing those who are the most financially responsible. This is both in the payments they've made that they didn't have to, and the future societal taxes that will be required to retire that cancellation debt.
Lots of moral hazard at work.