Money was already invested. In a college education. If that isn’t leading to increased earnings sufficient to repay the debt that is the problem not the debt itself.
You keep mentioning predators, wolves, etc. Doesn’t make any of that true. Though certainly makes it more dramatic. I also notice that the talk is about $1.5 trillion in student loan debt. No doubt a big number. But why not look at the individual debt that is owed? Presumably because $33k per capita just isn’t as dramatic.
Make student loan debt dischargeable and the result will be higher interest rates and fewer students being able to obtain loans. Then there will be cries of lack of affordable/access to college. Then what?
Talk of forgiving student loan debt seems to be to be a solution in search of a problem.
@tpike12 Sorry - no I wasn’t addressing you at all! I apologize! Just venting to the world in general 
Just tired of people not being responsible. Just tired of people want, want, wanting, but not wiling give or sacrifice. I know this is not everybody - I am just having Debbie Downer kinda day!
And I totally agree with you @tpike12 about the ticking time bomb. So frustrating. I am feeling kinda down about our world. I just need to go read some good news!
Schools will be forced to lower the cost of attendance?
Right now they can charge whatever the hell they want and we’re all on here all day trying to figure out how to get our kids in. 
IMO the 1st step to addressing the student loan issue is getting rid of for profit colleges. The defaults on student loans largely come from for profit colleges. Their degrees are treated as a joke. For the most part employers don’t respect them and you can’t get a job. The credits won’t transfer to an public or non profit college private college. They target and take advantage of low income 1st generation college students. I don’t see any upside to having them other than lining the pockets of the owner’s with federal and state financial aid and loans. The tax money wasted on that can be a good invested in community colleges to bring down the cost even more. That will reduce or eliminate the need for student loans for CC students. I think student loan debt is a big problem as well but forgiving the debt will just keep the door open for these fake colleges to continue to take advantage of people.
However, most are financially dependent on their parents for college and (for better or worse) have spent most of their lives under parental influence, guidance, and example. So the parents’ financial carefulness or lack thereof tends to be a major factor in the student’s financial choices with respect to college and otherwise.
One common example on these forums is that of parents who tell their students not to worry about costs until after getting admission offers. It is not hard to see where that can lead.
Predatory lending is not new. Banking lobbyists essentially bribed Congress to change the laws so educational loans could not be discharged through bankruptcy so they could make no risk loans. Quite the business model with a ripe clientele desperate to pay for college.
$33,000 seems like a lot to me. I’ve never even spent that much on a car. But the average monthly payment is almost $400, so over ten years you’re actually looking at nearly $48,000.
Extrapolate that total to 44 million borrowers and you’re over $2 trillion. The Wisconsin data has average payback time closer to 20 years so in all likelihood much more interest will accrue for these borrowers.
@cshell2 - if banks have to price risk into their loans, they will loan less and fewer students will be able to afford the $70,000 per year price tag that even some mid-level schools seem to charge. They will need to lower prices or provide more aid to attract students.
The bigger picture is that we can’t afford student loan forgiveness, Medicare for all, or any of the other “free” proposals being promoted recently. The CBO released a report yesterday showing the entitlements we have currently have will drive the U.S. into “historic and unsustainable levels [of debt] within 30 years.” By the end of the next decade federal debt is projected to be 92% of GDP. This is not a partisan issue, tax cuts are driving this as well as entitlements. It would be irresponsible of us to dig this hole deeper and faster by adding more debt to the pile. The way out of this will entail cutting entitlements and paying more tax (everyone not just the “millionaires and billionaires”) but it will take a brave politician to say this and we don’t seem to have one.
Democrats and Republicans, old and young blaming each other serves no purpose. We’ll just end up going down on the Titanic when reality hits.
Which is why there should be mandatory financial education running k-12. Would do a world of good for people to have a better understanding on their financial health. Would have added benefit of making it harder to spew much of the B.S. that is routinely spewed by two specific groups of people.
@tpike12 If I offered to give you $180,000 today but to get it you would have to pay $400/month for 10 years, would you take it?
Yes, if people have to qualify then many won’t qualify and the rates will be higher. Lower income students will have fewer (or no) options for college. They will not be able to go to the state flagship or even the directional colleges. Taking away their options to pay for college may eliminate college all together.
Ask yourself why do for-profit colleges exist? Because they serve a population that otherwise would have no other options for an education. They admit students who can’t get into a state nursing program or need to go to night school because they have to work all day. For profit schools serve older students who need to work. I know several happy U of Phoenix grads whose employers paid for their MBAs or business degrees while they were full time employees.
It is fine to remove the government’s guarantees for loans, but just realize that in doing that, there are consequences for a lot of lower income people. Even higher income people who will still qualify for student loans will pay a much higher rate. The banks won’t lose money. Colleges won’t lower tuition.
The last thing low income people need is unlimited loans. I’m low income. Yes, my son’s college choices are limited because I refuse to borrow a dime, but he still has plenty of options. Maybe not OOS options, but whatever. Most states have perfectly acceptable schools to choose from.
@tpike12 Should those who receive loan forgiveness be allowed to take out car loans, home loans, or use credit cards? If they can’t afford the loan payment on $33,000 over 10 yrs, should they be allowed to take on consumer debt?
“You keep mentioning predators, wolves, etc. Doesn’t make any of that true.”
Excellent point. Most of the money that was lent probably came from money market funds (and similar) that everyday folks hold in their retirement accounts or college savings accounts for younger students.
Anyone who chose to go to a school that cost a fortune knew they were going to incur a lot of student loan debt. Don’t go to school if you can’t afford to go there. Wiping out student loan is only going to hurt everyone else because the money has to come from somewhere I for one don’t want to give one dollar of my money to a student who owes $200,000 I don’
my children decided to go to schools where they didn’t have that debt. why should I have to pay for someone else’s kids debt.
I’m also skeptical that reducing loans will impact what schools charge because that entails cutting costs. Will professors take a pay cut or salary freeze? Will students accept reduced services etc…or will reduced loans mean that colleges are populated by more full pay students and fewer FA dependent candidates?
Fewer loan dependent candidates. Fewer people going OOS when there are schools for half the price in their home state. More people living at home and commuting to school.
I am not for forgiving loans. You took them out, you deal with that. But, I am baffled by the way lending standards are completely thrown out the window with student loans. I could never in a million years go into a bank and get a 40K unsecured loan…UNLESS I was getting a Parent plus loan. Then all of a sudden it’s just fine. The taxpayers will guarantee it I guess.
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@tpike12 Should those who receive loan forgiveness be allowed to take out car loans, home loans, or use credit cards? If they can’t afford the loan payment on $33,000 over 10 yrs, should they be allowed to take on consumer debt?
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I assume they would be treated like anyone else that went through bankruptcy.
Harvard Law School is concerned about predatory lending.
https://predatorystudentlending.org
I’m still trying to process how someone could decide that spending $150,000 to “learn” photography is a good idea. But how should lenders handle requests for loans for “questionable” majors or ones that may not result in lucrative salaries upon graduation? Maybe set caps for borrowing depending on the major? What happens if the major changes?
And if you borrow it you repay it. No bankruptcy relief unless there are serious reforms to lending qualifications, credit history thresholds, no federal guarantees, income verification etc… It is an unsecured loan…limits should be similar to credit card limits and default rates as well if bankruptcy relief is on the table.