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 Post subject: Re: You're about to own $100 billion a year in student loans.
PostPosted: Tue Sep 15, 2009 3:30 am 
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NefariousKoel wrote:
nero wrote:
This is just BS. The WSJ expects that no one will pay their student loans back. Just loony right demagogy. :evil:


Not many pay them back. Where you been? :roll:

Why call them loans then?

In my country one is supposed to pay back loans.

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 Post subject: Re: You're about to own $100 billion a year in student loans.
PostPosted: Tue Sep 15, 2009 8:37 am 
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In all fairness, most people (currently 90%+) do pay their student loans back.

That said, the student loan programs were originally set up to be self sustaining. As former students were paying off their loans, with interest, the proceeds would be used to fund loans to new students. The problem is though is that not enough people are paying their loans back. Therefore, what you have is a never ending sinkhole; money must be added to the program every year to continue making these new loans.

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 Post subject: Re: You're about to own $100 billion a year in student loans.
PostPosted: Tue Sep 15, 2009 6:26 pm 
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Student loans are more likely to get repaid than other types of consumer debt. The thing is they charge low interest. My student loans are at 2.75% I could write a check and pay them off today, but I'm paying back at the normal rate because I expect inflation to exceed 3% over the long term average.


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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 2:58 pm 
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2009:
nero wrote:
This is just BS. The WSJ expects that no one will pay their student loans back. Just loony right demagogy. :evil:


2018:
https://www.investors.com/politics/edit ... nks-obama/

Quote:
Student Loans Will Cost Taxpayers $36 Billion: Thanks, Obama

Debt: The federal student loan program was supposed to make money. Instead it will cost tens of billions of dollars, forcing hardworking Americans to subsidize college-educated deadbeats. Who do we have to thank for that?

A report from the Department of Education notes that the net cost of the federal government's direct loan program is quickly heading into the red. This program, mind you, was supposed to be a moneymaker for the government, as students paid back federal loans with interest.

But as it turns out, borrowers have been flocking toward various loan forgiveness programs, by which the government will lose money, erasing gains from other loans. The report shows that the direct loan program went from a $25 billion surplus in 2012 to less than $5 billion by 2015.

A separate report says that this program ran a $36 billion deficit last year, up from $8.4 billion in 2016.

This is not how this federal loan program was supposed to work when President Obama launched it eight years ago.

In 2010, President Obama effectively nationalized student lending by cutting banks — which had been offering government-backed loans to students — out of the equation and having the government make the loans itself.

"By cutting out the middleman, we'll save the American taxpayers $68 billion in the coming years," Obama said when he signed this change into law. "That's real money."

As a result, federal student loan debt shot up from $154.9 billion in 2009 to $1.1 trillion by the end of 2017.

The problem is that at the same time Obama was getting the government into the lending business in a big way, he was making it easier for students to avoid paying back their loans.

One program, called "income-driven repayment," lets borrowers avoid payments if their income falls below a certain threshold, and then caps payments as a percentage of total family income. Any debt left over at the end of 25 years is forgiven.

Not surprisingly, students flocked to these and other programs that let them avoid paying back all their loans, even though the interest rates they had to pay were already subsidized.

Between 2011 and 2015, the portion of loans being repaid through these IDR plans shot up 625%, according to the report.

The direct lending program even earned the nickname "Obama Student Loan Forgiveness," and surveys of student borrowers by LendEDU found that half of them don't expect to have to pay back all their debts because the federal government would forgive them.

The rising expectation that loans wouldn't have to be paid back in full also had the perverse effect of making students increasingly indifferent to college costs, thereby fueling tuition inflation.

As the Education report says, "Decision makers and others may not be aware of the growth in the participation in these IDR plans and loan forgiveness programs and the resulting additional costs."

Given the $1 trillion in loan debt on the federal books, one hopes that awareness comes soon. Otherwise, the student loan program will quickly turn into one of the most regressive taxes on the books.

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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 3:17 pm 
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Meh. $65Bn is less than the projected cost overrun error on your average Federal military deployment. We subsidize most of the economies and militaries of the world to a much greater extent at taxpayer expense, so we may as well pay off Americans' debts with taxpayer money.

And yeah, I am perfectly aware that Federal debt ultimately comes back to the taxpayer. Plain fact is however that the USA has been on a path to default for 20 years. Nationalize all the private US debts, then default on them nationally, and reset the accounting button to zero. Shrug.

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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 4:31 pm 
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chijohnaok wrote:
2009:
nero wrote:
This is just BS. The WSJ expects that no one will pay their student loans back. Just loony right demagogy. :evil:


2018:
https://www.investors.com/politics/edit ... nks-obama/

Quote:
Student Loans Will Cost Taxpayers $36 Billion: Thanks, Obama




I mean.. did any of us expect any other outcome? Besides Nero and the Maobama supporters, apparently. :roll:

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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 8:40 pm 
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Am I the only one who considers it creepy when these ancient threads get resurrected?

A lot of ppl change their opinion over time-you know.

After a decade, it's ok to go ahead and start a new thread... imo

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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 8:48 pm 
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C_S wrote:
Am I the only one who considers it creepy when these ancient threads get resurrected?

A lot of ppl change their opinion over time-you know.

After a decade, it's ok to go ahead and start a new thread... imo



I respectfully disagree.

I normally “resurrect” an old thread when there is a point in the old thread that touches upon the new article/information that I am adding to the thread.

If someone had changed their opinion from what they may have previously stated in an “old” thread, then they can state so. I know that I have changed my mind on some issues over time.

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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 10:09 pm 
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I offer my humble apology. When you bring back these old threads it's a little bit creepy though I'm just sayin ;)



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 Post subject: Re: You're about to own $100 billion a year in student loans
PostPosted: Mon Feb 12, 2018 11:47 pm 
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C_S wrote:
Am I the only one who considers it creepy when these ancient threads get resurrected?

A lot of ppl change their opinion over time-you know.

After a decade, it's ok to go ahead and start a new thread... imo


No, not creepy at all.

I appreciate the continuity, and being able to reference the previously linked articles as they were originally reported. Gives a good perspective on cause & effect on the large scale, and helps sharpen future predictions of similar events for those who keep such tendencies in mind.

"Those who cannot remember the past are doomed to repeat it", after all. :P

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