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U.S. Student Loan Debt and Taxpayer Receivable: $1.5 Trilli

Posted: Sat Mar 17, 2018 8:53 pm
by _Bach
This amount now dwarfs US credit card debt and is about equal to the junk bond market. Virtually all of this debt is backed by the Treasury.

So how did US taxpayers get here?

It’s the same progressive policies that continue to take this country down: “Let’s spend other people’s money on an education system that can’t produce”! And, as I’ve said before, this liberal path in education started 30+ years ago.

Now, I suspect few (if any) on this board will want to acknowledge the reality of this issue. I suspect many here are products of these policies given the amount of time they dedicate to message board postings. I also suspect even fewer (not any) have any actual real world financing/investing experience in debt markets or job creating to even begin discussing long term returns of education. But I suspect there are many (the predictable regulars) with their PHDs from the University Of I Phone who will be quick in sharing their 2 minute google search of expertise to challenge the facts of the issue. If you do, I ask only one favor in advance: Don’t bitch about the facts - instead: provide me your solution to this particular growing problem.

And I have no doubt and even recognize, up front, it may be too taxing a cerebral exercise for the frequent posters here. So I’ll offer my solution up front:

Place the investment/loan underwriting decision between the student and educational institution. Let the actual investor(Educational Institution) evaluate the risk/return of providing their education services to a borrower and what they believe their payback will be. Bring the risk/investment evaluation down to a level that takes no money from parties not involved the underwriting. Particularly when there is absolutely no collateral involved. Let those who claim their services have such great long term benefit to their purchasers put their money, juevos, reputation and, more importantly, “FACULTY” on the line!

Truly a novice idea eh?! Never heard of this type of arms length transaction before in my life!!!

Right now most liberal university professors don’t like to work hard or even earn their keep. Most hate the fact that they could never find a job anywhere else teaching a class on the Philosophy of the Caribbean Butterfly.

So let the Universities make the student loan. If it’s a public/state university - let them determine the risk reward of state funds in their annual budget process. If it’s a private university - let the trustees of the endowments determine the same. Each, respectively, will determine their own benevolence to social causes and can be accountable for such. If the educational product is that good, provides a bankable opportunity to those they lend to and creates a track record - what’s the downside? Undoubtedly those institutions who are actually providing students a meaningful education, providing them a viable career when they graduate, will be willing to stand behind their product and keep only the best educators contributing to these degrees and programs providing a quality (and bankable) annuity to their graduates.

And yes it puts pressure on universities and professors who have only existed to live an unaccountable life of education and entitlement that probably leads to being homeless.

Or let’s just let the Treasury issue credit cards to the homeless! Solve the current symptom and ignore the origins of the real issue. Best way to get votes in the short term.

And please CFR me if you are that out of the loop on this issue.

Re: U.S. Student Loan Debt and Taxpayer Receivable: $1.5 Tr

Posted: Thu Mar 22, 2018 12:34 am
by _Bach
Predictable liberal silence!

Re: U.S. Student Loan Debt and Taxpayer Receivable: $1.5 Tr

Posted: Thu Mar 22, 2018 2:08 am
by _Gadianton
Bach,

why do you think it takes job-creation and real-world experience to make the econ 101 point that we should allow the market to guide higher education?

Anyway, what I find odd about your market solution is, why turn a University into Toyota? Having a "third party" in a transaction isn't exactly a mark of socialism, the problem is if the third party is the government. Or am I wrong about that?

How about we alter your program such that banks can grant loans to students -- does the bank want to take the risk?

I mean, I'm not sure what real world experience you'd be appealing to suggesting a University with 20k students should be the only lending institution available for its student body. Hey -- if I sell my house, should I be restricted to taking monthly payments directly from the buyer? Would that be a way of really putting my ass on the line to make sure I believe that the buyer is good for the money?

Re: U.S. Student Loan Debt and Taxpayer Receivable: $1.5 Tr

Posted: Thu Mar 22, 2018 11:18 pm
by _cinepro
Whatever the solution is, I agree there is an almost comical disconnect between the costs and benefits of college loans.

And if there's one thing I've learned living in Los Angeles (and California), it's that once they can figure out how to tie the costs to the taxpayers, people stop caring and costs will go through the roof.

Ultimately, the only solutions will involve cheaper (or no) higher education, less access to loans, and more honesty about what the true value of the time at college is likely to be. There is vast resistance to all those points from different participants in the system, so it will be very, very difficult.