"The number of student loans held by subprime borrowers is growing, and more of those loans are souring, the latest signs that a weak job market and rising debt loads are squeezing recent graduates.
In all, 33% of all subprime student loans in repayment were 90 days or more past due in March 2012, up from 24% in 2007, according to a Wednesday report by TransUnion LLC."*
Risky student debt is beginning to soar- with over half in deferment. This is more than the students' problem...this is a taxpayer problem, and its only getting larger. David Sirota (Salon.com) and John Iadaola (TYT University) discuss.
*Read more from Wall Street Journal:
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The mere concept of "enjoy now and pay later" is so alien to me which fascinates me. At the same time it is both comedic and frustrating. The problem is so simple and yet people try to make it sound complicated. I commend you sir for spotting the problem in its true nature of "living beyond one's means" People then suddenly blame the bank, the bank, the government or some institution but really they should blame themselves.
I MADE MY LIFE EASY.
LIVE IN A CITY,
2 MILES AWAY FROM WORK,
NEAR THE SUBWAY,
MAKING A $30,000 SALARY
WORK AT A LOW STRESS CORPORATE JOB.
I PLAY VIDEO GAMES, GO OUT, AND TRAVEL. AND I'M HAPPY AND CONTENT. WHILE PPL WITH MASTER DEGREES ARE OVERWORKED WITH A COLLEGE LOAN AND MORTGAGE, PLUS A FAMILY TO SUPPORT.
I MAY SOUND SELFISH BUT THIS SOCIETY MADE ME THIS WAY. AMERICAN DREAM IS DEAD. I'M NOW MAN GOING HIS OWN WAY. ;)
since the average graduate makes more than the average taxpayer, a bailout would shift the burden from those with more money to those with less. we need to make student loans dischargeable in bankruptcy and stop backing them, then the banks will ask a philosophy or women's studies major how many burgers they will have to flip to pay back the loan before just handing out debt.
the government have always been there, but i agree that that innovation and growth have to come from the private sector.
Bankers are not the problem, people are! i see people without a job having 2 cars and a big house, something's very wrong, when that is possible! We need to regulate banks, so that financial crisis does not occur again.
I personally have no debt, and anybody with a brain, would never take debt, that he knows he cant pay back! just take some extra work(is possible in europe)
One from me is enough to counter an insult that work is all it takes.
I dont have to prove anything except that life isnt as simple as you make it out to be.
I am not even arguing with your second point where the gov is involved, I dont think I disagree.
But from my view the discussion was about the idea that working through college is always possible or will solve all your problems, at least without gov help.
you make the claim of data set of one while you did the same thing. Whatever my circumstances it is irrelevant because the government should only take into account the cost of living and tuition as it already does(not to say it should pay for it all) and it controls for poverty with need grants. Whatever woes the individual faces are irrelevant to the overall equation.
yes, it does suck for many of us, we cant ride a bus and bike for our job. Its literally impossible
The moving is rellevent as the point is that life is unpredictable and not set for everybody. Your anecdote is not relevent to the reality of others by itself. Its only one piece of a data set
As for government help, yeah, its behind on alot of things. Minimum wage has also stagnated while inflation has kept moving up steadily, prices rise
Business sure doesnt care about citizens living standards
Wait you drove I rode the bus and my bike. AS for moving that isn't an expense to be brought up for schooling. Schooling expenses by the government should be brought up as the Cost of living+average cost of tution nation wide not school - 10k a year assuming a job. The remanding amount should be subides in half loans and half grants maybe i will meet halfway and say half your your debt becomes grants when you graduate but when I did the math for 10 areas that amount came out to be around 24k
So my point is its insult to say you got a job like other people didnt, etc.... You dont know other peoples lives.
I was one that lived cheap in every way making 16-18k pre-tax and was able to put money in the bank because of it, kept having life suck it dry once in awhile, pissed me off alot. $1300 transmission repair one year, I had to drive alot, tired get expensive every 2-3 years. Hurricane hit, I moved but lost alot of money in that, company bought out, lost job for 2 months, etc...
But again, the real issue is getting a job that pays 24k that also gives the right hours, and getting a job and keeping it in general, which is hard to do with how many companies lay off before benefits kick in. I have seen it enough. My job is full of people that come from companies that downsized, replaced with cheaper labor, bought out their company, etc... It was a garbage part time job but you never lose it unless your really bad at it, and no benefits.
Your lucky to make 24k a year, period
I guess in your area, but I am from the south and lived in 2 college towns and that definitely was not the case with any of the college people I knew. One guy bought a new computer with his grant that was very powerful, but it wasnt a loan and thats all he bought even though I think it was something he should have bought less powerful, but then at least a computer is a good investment, unlike phones and expensive vacations. He didnt take vacations, and he studied hard. We all drove used too lol
The living index is 24k from the school which is what he was probably using but I found ways to cut my cost like low quailty food, living with friends, and being cheap in general. A lot of these guys I saw going into debt had bought the latest macbook pro with rential display and the latest iphone. I am not saying that all people in debt in college are like this but the majority i met were going into debt because they took loans and bought expense cars and took vacations with it.
tell me where do you have these numbers from? and you know you have a problem, when you drive a big SUV and have a house, but not job..(unless your last name is gates)
and is it hard finding a job? the government need to stimulate growth in innovation and job creation.
If there is one thing Obama will not do is help these indebted students. I'll probabaly have a little over 40k in loans by the time I graduate this spring. He won't help us out because he said out loud that he finished paying off his loans when he was still a Federal Senator.
Right now I'm expected to pay over $1,000 a month just in student loans. I received a parent plus loan through Sallie Mae. Meaning a parent co-signed with me and took on half the loan costs. So they are making payments to sallie mae as well as I am. Then sallie sold some of the loans to the department of education. So now I'm expected to pay 2 sallie mae loans and 2 department of education loans every month. I originally borrowed 59K but with interest rates I now owe almost 100k.
You were lucky if without a degree you had job that paid 24k+ per year after-tax
You were lucky to have a job paying that much which also gave you the hours necessary to study and complete college in 4 years.
Maybe you are a genius, prodigy, whatever, but not everybody can even learn as quickly as you might be able to, genetics does play a role
This is assuming your even being honest, because statistically your in a very rare situation
Plenty of people work through college and still have debt
no problem :) if you ever decide to take the leap of faith, give me a shout. i will give you the contact of the guys in charge of orientating new people such as yourself. your rent is free, your utilities are about 300-600 RMB ($50-$100) and you make about 8500 RMB per month. if you go through the training option like i did, they take off 1500 RMB for 6 months, then the sky is the limit. if you enjoy what you do, you can make a lot more money tutoring kids on the side (a lot of us do)
but in the end you dont need college to learn art or to get better, with the internet there are tutorials all over the place to improve your skills, hell everyone i learned about photoshop was from looking up tutorials on deviantart or youtube, same for flash animation, learning art in school now is a big waist of money when you have the internet
i cant understand programming to save my life, im more on the artistic side hence why i studied all the art medias from 2D to 3D animation.
it does help to have a degree, but its not fully neccissary game companies will hire you as long as you can do the work really well, for artists its a really good portfolio with great art skills, another is if you made your own games that helps a lot cause it shows you know the process and can do the work, which is what im currently doing.
You'll most likely get an IT related job which is different in the fact that you probably won't be coding or designing applications, but helping people with technical issues or solving technical issues at a company.
Right we do need people like person B and person B can make their own decision with say a government low interest loan which they eventually repay from their earnings. You can cap this at say 5-10% of earning so as to allow the person to lead a comfy life.
But that doesn't mean giving person B free uni. Not when so many people are doing bullshit degrees that lead to no job. If people want to do that they should risk their own money. Not everyone else's,
You know, you have a point with the public school system. It's incredibly sad that only the wealthy can have access to a proper education, or else suffer the consequences of not being able to pay off an enormous debt.
I still don't see why a B.A. is an, all around, requirement. Coming from an "soft" autodidact, I'm of the view that if someone truly wants the intellectual benefits of a B.A., they can access it on their own. Degrees, in my case, have just been a costly necessity for employment
I don't know much about US economics, but to me it seems that the problem is massive student loans being racked up and an issue with job availability and pay. I guess we're lucky here in Australia where university education is heavily subsidised by the government and job availability and wages are good.
I'm teaching English as a second language (ESL) in Guangzhou. There's always room for more if you're interested. All you need is at least a high school graduation, and $200 to start up a training course if you have no experience. (like me) It's a large company with tons of foreigners here from USA, Canada, Australia, etc. It's called CIEO. (Canadian International Education Organization) Check it out if you're looking for something to do :)
Nah (dont know what ACTs are, but) HECs system is essentially where the government pays for your university education and when you finish your degree and get a job (that pays around $40,000 AUD for us) your employer pays some of your income to the government through a bit of extra tax. it means that we pay off our degree much faster and more efficiently that Americans do, even with interest.
If you think about it, it's basically the system described in the video except better for the economy.
That's laughable. One year at my school with living expenses included is about 22 grand...now add three more years to that IF you bust your butt. Most people graduate in at least 5 years. On top of that my school is considered cheap for a major state university.
The banks are also defrauding the Fed. I paid off my student loan and yet a few years later recieved a call from my dad (the co-signer) telling me he had received a letter from the Fed that I had not paid off the loan and was now in default. The next day, I took my paperwork down to the local B of A and made them correct it. How many other time have banks defrauded the student loan system?
I see... I was too poor to do any of that traveling stuff in college. Seems like the main focus is on the yuppies that live off the parents cash, but in Europe the payment system for college sounds a lot more lenient.
No, I'm saying that in capitalism, it's only free markets for those that can afford to be above the law. karl marx invented the term. Sorry, I don't think the Adam Smith model is anything but a secondary theory to Marx's definition of capitalistic systems. More so, Adam Smith did not have half the genius of Marx..after all, Smith was a philosopher that analyzed mercantilism. While everyone was doped up on mercantilism, Marx called a spade a spade. There are no "free markets" in capitalism.
If that is the case, wouldn't it be better to have elective extended highschool grades for pre-university? At least than it would be free. Which is sort of my point; I don't understand the concept of paying for extended highschool
Right so it a grant. Who takes more then 10 years to do their studies? When you say under "certain conditions" you actually mean almost all the time.
The poor guy doesn't get the same grant because the poor guy had to get a job, cos he needed money, and his parents were pushing for him to get a job.
Yet when the poor guy gets a job, he has to indirectly pay via taxes for rich kids who all go to university.
As for it being a "right", you can guarantee loans without giving anything for free.
You are listening through your ass. It is a loan in all cases, and under a certain condition, the initial four years become a grant. This is the case for all forms of education after high school, not just university. The poor guy and the lower educated guy gets the same grant as the med school guy. The magical thing is, you can even be poor and send your children to university, and it won't kill you financially. Education is not an elite privilege for us, it's a right.
It's not as if the current government fucked it up, it's a result of successive government with poor decision making and policies.
But the results speak for themselves, you have one of the most expensive public school systems, your cost per student is higher then some socialist countries (eg. Germany, Canada) yet the results are worse and these countries kick your ass in rankings.
I think you missed my point I was being sarcastic (hence the violin playing), eventually his student loan will be paid of, slowly but steadily his salary will increase as he becomes more senior and eventually when his loan is paid he will be free and clear with a high salary. Meanwhile the guy who went to work for Walmart earns enough to cover food and board. I would still take the student loan (in fact I have a student loan).
You're only half right on this issue. We can't discourage people from pursuing these technical fields. The progress of our society and economy depends on highly skilled professionals that can create new markets and explore different fields, but I agree that the cost of such education is way out of control and it's actually counterproductive to our progress.
I am a student and i say if you have a lot of debt over 25k it is your fault. Some of my classmates don't give two shits about the loan money they take i mean they take vacations with it. They fail their classes and don't give two shits about it and then not show up for any of their classes next semster.
The government needs to impose two mandates on student loans which is
1. enough to cover tution+books+living expense
2. 3.0 gpa requirement not 2.0
Did you read what you wrote before you posted it? There is no economic system in the world where person A would be responsible for paying off person B's loans. It's the wealthiest Americans who pay the majority of the taxes (as it should be) because they can afford it! People like Romney who say "Just borrow $20,000 from your parents and start a business" live in an alternate reality. Most Americans don't have this kind of money, so person A and person B are in the same boat in your scenario.
"The government that completely fucked up the public school system." You sound like a god-damn "libertarian". You've built a strawman here: I suspect we agree on the economic duties of the state. If you like, we could argue technicalities of the reform process, but for now, stop wasting my time.
I know accountants that can't find jobs.
This is why I wanna do something that I'm passionate about in my life, rather than going to school for something that "Everyone says will give you a secure job" and then not finding a job, and hating it.
Name of video should state: Student Debt Soaring - Get Ready Middle Class.
Student debt rising because
1. Banks took advantage of the poor.
2. Students don't finish schooling on time. More time in school = more money to borrow.
3. Failing job market.
4. Students getting degrees in useless majors.(poetry?)
5. Students with "good" degrees don't take full advantage of their potential and are complacent with working at Starbucks.
Fantastic insights on this video, John! That car payment closing comment was awesome - a great real-world issue that easily connects the abstract economic consequences of debt with the concrete buying or not buying a car :)
Welcome to the education bubble. Are we really surprised that the federal government that allowed the banks to give mortgage loans to people that they knew couldn't afford to pay are giving student loans to kids, knowing that they can't pay them back either. It's either give the banks the freedom to handle student loans again (with actual monitoring this time) or start requiring students that are receiving a loan to have "real" degrees.
Student subsidies are not indiscriminate and indefinite handouts here in Europe like you make them out to be. Speaking for the Netherlands:
Under the condition that a student completes their studies within ten years, their first four years of loans will be converted to a grant, anything after that period remains a loan. The amount of money a student may receive is also dependent on family income and need. We're not being shafted like American students, but that doesn't make us spoiled.
Oh wow... You are pretty clueless man.
In a free market the normal trend is for quality to go up and prices go down. You only get the opposite when you get government involved.
The quality of healthcare is going down, but the price is going up.
The quality of public education is going down, and the price is going up.
The quality of the iphone is going UP, and the price is going down.
You need to read about basic economics because you clearly have no fucking idea what you are saying.
I am not a tea partier, first of all, and I am not in favor of bailing out the banks or giving more money to the military to grow it even more.
I am against those things too. The problem is that I am more consistent than you are and you dont like that.
I am against ALL GOVERNMENT HANDOUTS. Whether its the military industrial complex, college students, businesses big or small etc.
You are biased towards *some* government handouts. Republicans are too. You are no better than they are.
You clearly do not understand my rhethoric then because I am not in favor of government taking money from anyone to give it to anyone else.
I am in favor of people keeping the money they earn. That includes NOT giving money to businesses.... So yea, we should stop giving money to people who want to go to college and cant afford it and businesses that ask for handouts too.
Well i agree yet it's probably better to start with the real constitutional breach that really hurts the country such as the obliteration on the 4th amendment than saying that the government has no say in education.
No idea what you're talking about, but I'm in Canada and the minimum is 10.25. Second of all all of the fields that I mentioned are booming.
For the trades getting an entry level position is a little harder but if you put in the work and show up for the experience the first 3-4 years (which is what you'd be spending studying in college/uni), you'll have many companies wanting your skills with good salaries.
As far as software design/eng. technologies, with a masters you're set from the start.
If you knew how much a bricklayer actually made, you'd never say that. You fail at life because you think everyone should go to college, regardless of their calling in life. There are plenty of smart people in trades, many of them smarter than you.
UK got pretty ridiculous priced tuition fees and was raised by the tories, Europe seems more responsible. What is even more annoying is that a lot of the tories got to go to university when it was still free and they whine about it being too cheap LOL
There is a shitload of thing the US Constitution does not says. The US constitutions does not talk about the NASA neither, nor public fundamental research. The air force is not as well (only army and navy). Also there is no paper money in the constitution nor political parties. You dont even have the right to travel. It's not in the Constitution.
Your argument is somewhat ridiculous.
I think the most legitimate system is you get what you pay for. The governments job is to provide low cost, interest free (or just indexed to inflation etc.) loans, it make sense for me that if the US government will dish out interest free trillion dollar loans to save foreign banks they should do so for their own students.
Once you work you pay off the loan progressively at say 5-10% of total income depending on salary.
You learn. You pay. You pay what you can afford. Everyone wins.
My example wasn't really based on Financial Aid/Credit Hours system. It was based on the European laissez faire system of going to college for a few years, take a gap year and going to south america, then go back to uni and finish your masters on the back of the tax payer while saying, it's free I don't have to worry about anything.
Well yeah it's fair cos your parents are middle class and throw you a couple shekels every now and then.
If your poor, 18 and have to work it doesnt seem that fair
True, in most countries there is, usually because children follow their parents' example - a bricklayers child is less likely to take a higher education. In Germany, every student has the right to a certain amount of funding, payed by the parents, or the state, if the parents can't afford it. In Denmark, every student gets the same funding from the state regardless of the parents income. You will never erase the advantages that having rich parents bring, but chances are at least nominally equal.
The US have the widest variety of colleges in the world from cheap to expensive, small, big, grand, many of the colleges are non-profit so you whole "greed is harmless" bit is a bit perplexing.
You have one of the worst public school systems in any 1st world country. One that has terrible results yet cost massive amount of money.
Yet you want the government that completely fucked up the public school system to take over the college system.
Wow. Just Wow.
Well, I don't disagree with that. If you are lingering too much in uni, you should get your aid and scholarships cut off because you are becoming a burden on school resources. Financial aid already sets a limit on credit hours, but I'm sure scholarships have their own rules set by who is giving them.
I'm graduating with a degree in philosophy, which I plan to corroborate with one of the following: a PhD; a master's degree in technical writing; a master's degree in library science; law school. Philosophy majors have also gone on to do social work for nonprofit organizations, and are often hired as counselors and mediators.
So, while you might think it's useless, don't tell someone with a passion for it to eschew it for that number-crunching, capital-obsessed business world.
Sure. If person A gets a job that pays $35K a year and person B gets a job that pays $35K after $60K of college debt then person A has some reason to smile. But I never argued what was better A or B. I simply argued that if person B decided they should go to college, there is no valid reason to take half of person A's earnings to subsidise person B.
You punish the poor who are forced to work younger, while spoiling the rich who might just stay in uni a few more years than they need to.
I can't defend liberal arts, but as someone with a BFA, I can tell you why most fine arts degrees are considered useless.
Most of the success of artists in recent (post 17th century history) has been in the connections with the right people, and the pitch of their products. So the core of many fine artists is business. As essentially they are self-employed, they have to find their own clients and commissions. Many Fine Arts programs overlook the business aspect and it's really needed to prosper.
Except the bricklayer started working when he was 18 and didn't go to college, but he has to subside every professional in his country that earns more then him, from 18 until he retired.
Every country I have worked in (doesn't include Finland), in Europe has college inequality based on social background, which tells me one thing, guaranteed loans are good, student allowance is good, paying for free education for the elite just so they can fuck around in college for 10 years is stupid.
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