Comments on: Should The Government Forgive Student Loans?

By: Marty

Marty — Wed, 30 Sep 2009 22:44:20 +0000

I hope if they do decide to help people who owe student loans they pick the ones that really need help.
I recently asked for a forbearance on my loan and it appears they want me to go month by month. I thought they would give me an unlimited type forbearance but the way it looks I have to request it ever single month if I forget they will also add on a late charge.

To the guy who had his parents pay for his education. I hope that if they decide to help those of who had to scrape beg and borrow to pay for our education, that they will pay our student loans off before they pay off the rich kids who went to school on Dads dime.

By: gojets

gojets — Sat, 26 Sep 2009 06:51:47 +0000

I graduated in 1991 from a small college school. I was young and my parents did not have any money to contribute towrds my education. YES. It must be nice NOT to have any student loans because your parents put away a hundred dollars a week since you were born, but that kind of money helped my parents put food on our table and pay the morgage. I know what you are thinking. "They didn't have an education or were brought up with parents who thought that they should go to college" My father was in the Navy for several years and my mom came over from Scotland. :Not every parent can put away a hundred dollars for their children to go to college. SO, please do not thinkj that everyone can do the same as your mother and father. My mom and dad did the best they could.
I borrowed 25,000 dollars in 1986.. Now I owe over 70,000 dollars. Since I got married I have paid every monthly payment of 599,00 every month for the past 9 years. Now the govt. is saying that my husband and I made too much money and we now owe them another 6,000 dollars. We live in AZ and make about 80,000 between the both of us. We have not missed a payment. What do they want from us.

By: nothirdsolution

nothirdsolution — Fri, 25 Sep 2009 12:33:12 +0000

Hi Marty – I agree in spirit that they probably should be forgiven, I just don't believe it's going to happen, especially not going to happen by working within the system. They're total BS, they've got us working our arses off, paying for an education we were all promised would be the key to happiness and wealth, only to find out years later that it's neither. Extra icing on the cake: I've read recently that the cost of a 4-year degree is no longer (on average) offset by higher lifetime earnings…

By: Marty

Marty — Fri, 25 Sep 2009 04:57:05 +0000

How about people white men especially (me) who went to college only to find out later the education was worthless due to Companies who had to hire minorities to fill positions?
I was unable to find work in my field due to the above reason, I also had child support being take out of my pay, during this time I was not able to pay my loans 4 in all, 4 loans that before I was able to have them consolidated doubled due to thousands of dollars paid to collection agency's that charged for there failed attempts to get me to pay. It wasn't till I refused to pay any more money to collection agency's and I contacted Florida education and complained that I finally had all my loans consolidated. I have been paying them off for years now and when I look at the balance its not much less than what my original loans were. I have already paid back the loan its the interest and collection agency charges I haven't paid. That's my opinion but you get what I am saying.
Now here I am 15 years later unemployed again and and my education is useless in Florida.
I did not invent reverse discrimination my government did so if they would be so kind and finish off my student loans I would be grateful. I don't expect that I deserve it but I sure would appreciate it because its the only loan I have that has me by the balls.

By: nothirdsolution

nothirdsolution — Thu, 26 Mar 2009 04:00:43 +0000

sounds like a good summarization, I'll have to check that podcast out if I get a few minutes, thanks for the link.

By: John

John — Thu, 26 Mar 2009 03:54:03 +0000

I just wanted to let you know I came back and saw your reply, and I guess I do basically get it. But I also wanted to inform you that in the most recent interview of Peter Schiff by Lew Rockwell, he says, at about the 11:30 mark, that college is so expensive because the federal government guarantees the student loans and colleges can keep raising tuition because they know that whatever they charge, the students will be able to get the loan from the federal government. The student-university relationship exists entirely outside of the free market, so colleges have few incentives to keep prices low and students have few incentives to be stingy. That's basically the understanding I had arrived at. http://www.lewrockwell.com/podcast/?p=episode&...

By: nothirdsolution

nothirdsolution — Mon, 23 Mar 2009 19:00:55 +0000

Good questions, John! I'm afraid I don't have satisfactory answers for you, at least for the time-being…

A few quick thoughts, though: we could look at the costs of other long-term financing (e.g., home mortgages) which experienced a huge run-up in the last few years/decades, until just recently. Like mortgages, during the 1990s, many student loans could be had and/or consolidated for less than 3% interest. Also worth considering: something like 90%+ of students are eligible for Federal student aid, and, the debts incurred thereby are non-dischargeable, which unlike mortgages, would possible prevent any correction in prices (downwards).

But, these are admittedly shots "from the hip". YMMV.

By: John

John — Mon, 23 Mar 2009 03:09:49 +0000

David, I am looking for something a little more specific. I understand that the State's monopoly on coinage is the "all-pervasive system" that we talk about, to borrow a term from Simone de Beauvoir. But the way I think about things is extremely left-brained, which means I think in series and not in parallel, so I like seeing how A caused B caused C, etc. I am often unsatisfied by the explanation: All-Pervasive System X caused A, B, and C all together.

I will say it's pretty obvious how the artificially increased availability of college funds makes the prices go up. One, because demand goes up so the price does too; and, two, if the government is directly providing the money, it can just print/steal more of it if need be, so there's no check on how much money gets spent on college. Is the government directly providing the money, though? I thought students went to (nominally) private loan agencies. Are those debts guaranteed by the federal government, just as Fannie and Freddie's risky loans were guaranteed by the government?

How about this for a lead-in to a more detailed answer: We know inflation of a currency causes the price of everything to increase in terms of that currency. Why has the cost of college increased so much more than the general rate of inflation? Everything else in our economy is priced in dollars that come through the banking system in one manner or the other. What is specific about the college-loan industry that has inflated its prices so much more than, say, automobiles?

By: nothirdsolution

nothirdsolution — Fri, 20 Mar 2009 00:41:27 +0000

John – they're all backed by the Federal Government unless you've literally taken out a private loan (e.g., your grandpa loaned you money, &c.) because they come through the banking system in one manner or the other…

Back in the 1960s, the government endeavored to make education "affordable" by offering public loans, grants, etc. This of course just gave universities a greater degree of freedom in price discriminating, etc.

I could find more information if you're looking for something specific?

By: John

John — Thu, 19 Mar 2009 22:48:58 +0000

David,

I don't have any student loans, so I'm not entirely familiar with how they work. You and Brad mentioned "federal" loans vs., I guess, private loans. Are they all "backed" by the federal government in some way? The same way Fannie Mae's mortgages were guaranteed by the government?

So, is the reason that college costs more today the increased demand and accessibility that was permitted by the availability of all these federal (and/or private) loans? Kind of how the reason that housing prices went up so much was the increased demand for housing due to low interest rates and sub-prime lending standards?

I guess what I want to know is: what exactly is the federal government's role in the increased demand for, cost of, and matriculation in American colleges?