Unpayable Debts (the cost of student loans)

[mountaineer]

Unpayable Debts
by: Roberto Rivera
December 14, 2018
Debts that can’t be paid, won’t be. — Michael Hudson

John Grisham’s 2017 novel, “The Rooster Bar,” tells the story of four friends who attend a for-profit law school in Washington, D.C.

Between them, they have borrowed nearly one million dollars for an “education” that will leave them unlikely to pass the bar exam, even less likely to land a job in the legal profession, and totally unlikely to land a job that will enable them to pay back what they owe.

While Grisham’s “solution” to their dilemma is literally the stuff of fiction, their dilemma is not. The novel was inspired by a 2014 Atlantic Monthly article, “The Law School Scam” by Paul Campos.  ...

It isn’t only law school. Total student loan debt in the United States is an estimated $1.48 trillion. That’s at least a half-billion dollars more than total credit card debt. “The average student loan debt for Class of 2017 graduates was $39,400.”

While the face of improvident student loan debt is a person who borrowed in the six figures to study puppetry at a small eastern liberal arts college, that $1.48 trillion is spread among 44 million borrowers virtually none of whom studied puppetry or some arcane ideologically-driven subject.

Instead, they are participants in what Matt Taibbi of Rolling Stone has dubbed “The Great College Loan Swindle.” In it, “everyone feels obligated to go to college, most everyone who can go, does, creating a glut of graduates. And as that glut of degree recipients grows, the squeeze on the un-degreed grows tighter increasing further that original negative incentive: Don’t go to college, and you’ll be standing on soup lines by age 25.”  ...

Rest of article

Full disclosure: I went to college with Roberto Rivera. I doubt either of us accumulated any debt. 

[Sanguine]

I'll tell you what an unpayable debt is - the one that our government has and continues to accumulate.  All that "free stuff".

[mountaineer]

The gubmint has gotten itself into debt by spending on things it never had any business getting involved with - including helping people attend college.

[Sanguine]

The gubmint has gotten itself into debt by spending on things it never had any business getting involved with - including helping people attend college.

Yes, and the tuition and related costs have skyrocketed.  Predictably.

[Fishrrman]

"Student loans" seem to have done for higher education what third-party health insurance did to the healthcare industry.

That is, push prices outta sight...

[DB]

Government is the direct cause of college tuition costs skyrocketing.

They created government backed loans for students so in turn students could "afford more" so the costs went up to match what the students could "afford". The colleges were happy to spend this new found money.

Just like easy money secured by government in around 2004 caused the massive real estate bubble. Same cause and it will have the same result.

I'm going to be irate if the people who borrowed this money are bailed out. I'm paying for my kids to go to college at great expense due to all this government mismanagement.

[jmyrlefuller]

Even in an economy with extremely-low unemployment rates, people are struggling to pay back these loans and often can only do so by postponing marriage and childbirth. These loans are anchors for many debtors and a drag for the rest of us.

Or by marrying for money.

[Smokin Joe]

You wonder how 'educated' someone is when they go into hock for debts that will be very difficult to pay off with their anticipated wages on their new job.

I have been encouraging the grandkids to go to trade school instead. More common sense, develop a skill and make real money. Sure, they'll get dirty when they work, sweat, and wear carhardts or FRs instead of suits and dresses, but they'll never go hungry.

[mountaineer]

I have been encouraging the grandkids to go to trade school instead. More common sense, develop a skill and make real money. Sure, they'll get dirty when they work, sweat, and wear carhardts or FRs instead of suits and dresses, but they'll never go hungry.

I agree, but with a caveat. After working for a decade in a profession I hated, I went to culinary school, paying cash at the for-profit school. Just about every other student in the school (most of them right out of high school) had taken out big student loans, thinking it was free money. Some of them were no more suited to that field of work than they would have been for college, and it was sad to see them flounder around, unwittingly getting into debt.

My suggestion is that kids take advantage of whatever trades are offered in their own high schools and then look into local community college system for more training, rather than the for-profit trade schools one sees advertised on late-night TV.

[jmyrlefuller]

You wonder how 'educated' someone is when they go into hock for debts that will be very difficult to pay off with their anticipated wages on their new job.

A personal story:

Many of you know my botched career path and my failed pursuit of a career as a meteorologist. One of the smartest things I ever did was to keep a close eye on my expenses—I always kept track of everything I borrowed and kept it manageable (I did go to a state college). I knew that, even if I had found work in my field as I had expected at the time, I wasn't going to make a whole lot of money to start.

So, thankfully, even though I ended up graduating just as the recession hit (thus destroying my career path and rendering my degree worthless—which is another point, that sometimes things that seem like solid plans at the time end up collapsing of no fault of your own) and wound up working minimum wage, I was still able to pay off my debts well ahead of schedule. (I did so in large part by devoting as much money as I could to paying down the loans at the beginning to tamp down on interest.)

Knowing then what I know now, I would not do it again. I'm not sure what I would do, to be honest.

[DB]

That skill managing debt will serve you well in the rest of your life.

[GtHawk]

I agree, but with a caveat. After working for a decade in a profession I hated, I went to culinary school, paying cash at the for-profit school. Just about every other student in the school (most of them right out of high school) had taken out big student loans, thinking it was free money. Some of them were no more suited to that field of work than they would have been for college, and it was sad to see them flounder around, unwittingly getting into debt.

My suggestion is that kids take advantage of whatever trades are offered in their own high schools and then look into local community college system for more training, rather than the for-profit trade schools one sees advertised on late-night TV.

I would advise anyone to take a course at a ROP or similar to gauge their aptitude or true fitness for a trade before assuming a tremendous debt that is possibly insurmountable. 

Both my son and daughter in law have masters and well paying jobs, but they can't afford to move into a house because their student loan debt creates such a burden. I do give them both credit for never expressing a desire for the government to erase their debt, even though they are both

LIBERALS! (big surprise after all those years at University)