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Career Resources
In before the shitshow...
+1
I'm seeing people try to push this around on Facebook. Such nonsense.
A buddy of mine just took out a student loan to buy a motorcycle.
I hate everyone.
BWAHAHAHAHAHA
ok, I'm sorry
http://assets.diylol.com/hfs/d02/70f/57b/resized/jesus-says-meme-genera…
wait......
BWAAAAAHAHAHAHAHA
In real life, I had friends take their federally gauranteed 1% loan, stick it in mutual funds for 5% or whatever, and then pay it back at the end of college. They bought a car with it. I'm only pissed because I didn't think of it at the time.
I'm pissed because I thought about it, didn't do it, thought I'd get in trouble somehow and instead paid for school and books with it.
(sorry to revive an old post)
Do you think this would this work during your MBA? :)
double post
Another thing they did: put it in a bank account and set up automatic payments. Kids were graduating college with awesome credit. Seriously, had I understood any of this, I'd have done it. This time will be different.
Hey, if the gov't is ok handing out cheap loans to oblivious kids and having them become debt slaves because colleges aren't preparing kids for the real world, I'd like to think they'll be happy if I increase their tax base by being able to buy a better house and paying on capital gains.
Come to thing of it, being in bschool is just going to further any understanding of the markets, so investing will pay off even more than just parking cash in some safe fund and checking in on it twice a year.
Or so I hope.
Most of what that bill says is already in effect. If you work in a non profit or teach, etc for 10 years you pay an adjusted rate and the rest is forgiven.
College education isn't a right, regardless of what most people think. Sure it would be nice for everyone to magically go to any college they please, but that my friends is yet another liberal pipe dream paid for with other peoples money.
I know plenty of people from VERY modest means who went to an excellent state institution and managed their finances/debt wisely and others who spent 4.5 years as an Officer to make sure they were debt free. Student loan forgiveness encourages the wrong behavior. Just because you were born in the US of A doesn't give you the right to attend NYU Film School.
This may be worse than welfare. So when we forgive these loans what happens for the companies that have these loans on their books? They suddenly just have to write it off? Here comes bubble burst #2....
Wait let me get this straight...you guys are actually angry that student loans might become forgivable? Just like every other loan on the planet?
Except for most other loans on the planet you have to prove your credit worthiness and/or put up collateral. It's virtually impossible to call in the analysts and profitably underwrite a student loan. So call in the taxpayers; is that the answer?
There's very little skin in the game for a debtor.
I'm opening a college and charging 500k a semester in tuition for a portal to u of phenoix.
Student loans? What are those? Full merit ftw!
I'm pretty sure this is the federal programs...not private lenders. WD Ford, Stafford etc. I'm pretty sure Citibank isn't going to have write off after 10 years. I do like the effort to push for-profit low quality education out of the market. Its actually decent for the middle class too. A two income family of civil servants say is not going to qualify for the heavily means tested programs. So its good that we are expanding the current forgiveness programs to decrease incentives for social work and teaching. There's a lot of people that get into social work and teaching for loan forgiveness. Those are jobs where you really have to WANT to be there or everyone loses.
It also opens doors for people to pursue their talents. There's nothing wrong with NYU film school. The city of New York pays 30% of the total post production tab to shoot here. Those jobs are booming (trust me, I move my car enough to make room for them.) My best friend and college roommate has a BA and MA in Art History and makes more money than I do at an auction house. I think this has the potential to make labor markets much more efficient.
"The bill would increase millions of Americans’ purchasing power by forgiving debt..."
damn give me a credit card with unlimited credit and no monthly statements.
I'd be so pissed off is any student loan debt is forgiven. If there are any signs of student loan forgiveness, I am going to sign up at the most expensive school and become a leech at NYU.
well, once i was considering joining military partly because of student loan forgiveness...
To be at the point where you need to use a program like this is a very low experience both mentally and financially. If anyone here actually thinks they would have pursued work or college differently if the feds were offering debt forgiveness is either a retard or just very, very unaware of what it feels like to drown in debt. It is the same as people saying they are going to stop working so they can collect welfare and sit at home all day. You might have gained the ability to eat doritos on the couch while watching Maury all morning (my apologies to those in a service area where it airs in the afternoon) but you aren't going to be going to Africa on vacation anytime soon, or live outside of a crime-ridden neighborhood, etc.
A college education is essentially an item that is entirely funded by the state. When this happens and there are no price caps, you end up with epic costs, much like healthcare, which is also almost entirely publically controlled. When this situation exists without a price cap, costs are destined to rise exponentially because these schools are receiving blank checks. The options are either to stop handing out so much (or all) free money or institute price controls, and if you think the real solution is price controls, you should find a very tall building and jump.
I disagree with the idea that you can't take advantage of this program. If you are ALREADY getting ready to attend college, and you are financially intelligent, and have any somewhat wealthy relatives, you are perfectly positioned to replace any costs that YOU personally would have paid in cash, with 3.4% debt.
Then, make sure the cash you are saving from this is invested (track the numbers with detail in excel). We're looking at a many year time horizon, so something equities related would be a smart investment.
Every month, compare your investment levels to your debt levels. Is your personal balance sheet positive equity or negative equity. Do you need to save more?
Then, if at any point you get into serious financial trouble with your debt, ask your relative if you can borrow money at a 3.4% interest rate.
You just have to be disciplined and you'll pull it off fine
Oh and only pay down your debt levels at 10% of your income each year
Find where I said someone can't take advantage of the program. All I said was that if someone is in a position where they really need their debts restructured, it is a horrible state of being.
Also, according to your idea, I should just buy AAPL on margin and then pay back the loans with the positive carry. If it fails, just ask a rich uncle for a loan that is only a few bps from the prime rate, as if some college student with a debit balance from failed speculation deserves the prime rate.
The price of stocks does not care if I am disciplined. This is horrible advice and I hope no one on this website follows it.
This should not surprise anyone. This was a long time coming.
This bill is OK so far, but I think more needs to be done in order to address the cost of college tuition, which is the real problem.
Jesus, forget the forgiveness. I'll take the 3.4% interest.
Not even sure the bill will penalize me for moving overseas. Maybe I can leave the country after taking out the loan, but before taxes are raised on everyone else to pay for it
Expect college tuitions to shoot up even more.
Kudos to all the kids who took scholarships to go to lesser schools in order to be responsible and lessen their debt burdens.
I'll take the Kudos, although I'd rather go back in time and be swimming in campus recruitment events and summer offers instead of cold calling.
You're all jelly that I have $14k in student loans that disappear when I graduate in May.
The 10/10 idea will never work. How insane are these fucking people? You pay the 10% of your income for ten years, and you are forgiven? Here's a theoretical: Let's say that the average college grad will pull in an average of $60,000/yr over 10 years (I'm sure that's pretty generous too). Also, neglecting the COST of that money, that person will repay $60,000 and have their slate wiped clean. What is that? Like a year and half all-in at a private school...just put the balance on my tax bill...why the fuck not? The baby boomers dumped everything on our generation, we might as well pay for the less competent of our generation too.
That being said our government is doing exactly what it always does: offers a shitty solution to the problem that it created. Write-downs are inevitable.
It's not even based on a person's gross income, the 10/10 applies to discretionary income. So in your example after taxes, food, shelter, clothing, etc.. that person making $60k might have $20k of discretionary income. So in reality they're only pay like $2k on their student loans per year.
Wow...I am speechless.
I got in a huge fight with my buddies GF who is a nurse on this exact topic.
Lets just say I am the asshole for thinking that someone who takes out student loans should pay there own loans back, that nurses should not be paid $400K a year, and that on a whole nurses are not as educated as doctors.
Yes... she believes nurses should have all loans forgiven because she 'betters society', that nurses in California should be paid $400K a year because cost of living is so high and its not fair, and that nurses are just as educated as doctors.
And this is a woman who's parents are both doctors, she doesnt have ANY student loans from undergrad (she is thinking about going to grad school with student loans), she works full time while still living off of her parents, oh and let me throw this in SHE WILL NOT MARRY HER BF UNLESS HE GETS HER A 20K RING, but thats off topic.
Basically, everyone wants shit for free and thinks that they should be fucking paid the same as everyone else because they do X Y FUCKING Z. FUCK OUR GENERATION.
Where did she go to undergrad this girl is stupid. Tell her she has no pedigree. Nurses are definitely not as educated as doctors, just look at admissions requirements to UPenn nursing bachelors program. 3.0 gpa to transfer into an Ivy? Try getting into Wharton with a 3.0 as a transfer.
Our generation is full of so many freeloaders it's sickening. I was accepted into Ivy league schools but went to a state school for a full scholarship so I could graduate debt free. Now the kids who made the decision to pay $100K+ to go to a private school want their loans forgiven? Am I still on planet Earth?
Add this to a long list of the government bailing out people (and institutions) who have made bad financial mistakes. If this passes, we've officially become a socialist nation. I'm disgusted that this bill even has support in Congress.
WHAT HAPPENED TO ACCOUNTABILITY?
What should render you speechless is that banks actually approved $100K+ debt in exchange for the income of 22 year old with a degree in liberal arts from a private college nobody has ever heard of. The best part is that banks are still approving debt for private college tuition.
I reiterate, how was a government funded solution not expected? How is it that you could be so quick to blame students and the federal government when it was the banks who underwrote and handed out these loans to like candy on Halloween?
Also, the quickest and easiest solution to mitigating the student loan debt bubble (and tuition bubble) is to allow these loans to be discharged in bankruptcy. That's a solution that doesn't need tax payer funding. This bill is an over-complicated soltution that doesnt address the actual problem.
That doesn't make a difference. Most student loans are direct government loans or backstopped by the government. Bankruptcy or forgiveness still means the loss is charged to the taxpayer.
Underwrote? There is no underwriting needed for student loans, the government underwrote them when they told the banks there is ZERO risk because the govt will 1) wont allow them to discharge in bankruptcy and 2) when they cant pay them back, the govt will just use taxpayer money.
Not the banks fault for getting a free lunch. Stop guaranteeing the loans, and I will guarantee you banks wont be lending $100K to an art major.
Yes, you are both correct. I am referring to private lending only (which has no set borrower limits), not federal programs (which do have limits, ~$30K for Stafford loans last time I checked).
Total outstanding student loan debt, both federal and private, are estimated at $900 B to $1 T. As of 4Q11, total outstanding all federal loans amounted to about $610 B. Those numbers are estimates, take it with a grain of salt. Neither the Fed nor the Dept of Education knows exactly how much is outstanding.
For residents at UT Austin, cost of attendance is $12-13K per Yr, about $50K for 4 Yrs. Even if you took out the max amt for federal Stafford loans, it still leaves a pretty big shortfall that only private lenders can fill.
Again, allowing student loans to be discharged in BK is a better solution. It disincentivizes the borrower from taking out too much, disincentivizes lenders from lending too much inprivate loans, and hurts the borrower (rather than just forgiving the outstanding debt with no consequences).
This is the thing, private lenders dont have to underwrite. There is zero incentive to not make the loan. The government backs this shit.
Am I totally misinformed? Are private loans also government guarunteed?
Yes.
Private student loans CANNOT be discharged in bankruptcy, just like federal. They are the same thing, except one comes from the taxpayer and the other from the private institution. These 'private' loans are risk free to the lenders with a 6-8% return, that is why there is no underwriting.
If the govt stopped guaranteeing loans, some in the immediate future, would not be able to afford school... now the govt can't have little johnny not afford his liberal arts degree now can we?
Sound familiar to the housing crisis? Because it is. And our governments response is to double the fuck down.
ACTUALLY they can be discharged via bankruptcy, just not a la carte like 'common' debts. Also now that everyone is running out of unemployment, disability diagnosis is at an all-time high. http://www.studentloanborrowerassistance.org/bankruptcy/ http://www.nypost.com/p/news/business/pain_brings_gain_taZkGOAUhXALmhEE…
Also, wtf are the dcf models on this:
Provisions of the bill itself would be financed by projected savings from Iraq and Afghanistan Overseas Contingency Operations; the bill would not affect funding for existing student aid programs.
No, I am afraid you're misinformed.
"Private student loans are not guaranteed by the government and their interest rates are not capped."
http://www.usatoday.com/money/economy/2007-09-30-studentloans_N.htm
Interesting, that article was written in 2007.
"As the U.S. bankruptcy law stands now, private student loans — credit-based student loans issued by private banks without the backing of the federal government — are grouped together with government-backed federal college loans under the category of “education loans,” which are exempt from discharge in bankruptcy in all but extreme cases".
http://studentloansblog.nextstudent.com/2010/05/04/proposed-legislation…
Maybe I dont understand, but what is the difference between govt guaranteed and exempt from discharge in bankruptcy?
Someone is going to be paying that private loan back regardless of financial trouble, right?... there is zero risk for private lenders. Regardless of what it is called, I consider that a govt backed loan.
Huge difference, actually.
A government guaranteed loan is just that - guaranteed. If the borrower defaults (i.e. stops paying) the government steps in and pays the loan off.
Exempt from discharge in bankruptcy is a whole different animal. There is no guarantee that loan will ever be paid off. The borrower can just stop paying. Sure, they can't discharge the debt in BK, but who cares? It's not like someone is going to force them to pay.
In the first scenario the lender is made whole with no questions asked. In the second scenario it's hit or miss and is ultimately up to the borrower. Trust me - most people with wrecked credit don't give a shit.
Still fairly certain the bulk of the loans outstanding in the market today are direct government or government backed loans. The private market for student loans has pretty much dried up since the credit crunch. Meaning the cost of bankruptcy will still be born by the government.
Nobama never responded to me
Just out of curiosity, say you go to an ivy league as an international student... get a job in the states that sponsors you, say it takes ~5 years for you to become a full american citizen- If you paid the 10% for those 5 years would it count towards this "free-ride" or do the 10 years start only when your an american citizen?
Overpricing college then saying they are forgiven for debt..It is like a bank overcharging for interest. oh wait this is the same.
What are the chances this passes and when would that happen?
Isn't this how the financial crisis started? This loan garbage is exactly why the cost of schools outpace inflation because the government is essentially handing out money...
Any way we look at it, we are fucked....
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