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The New Bubble

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Paingod
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Re: The New Bubble

Post by Paingod » Tue Jun 05, 2018 12:32 pm

ImLawBoy wrote:
Tue Jun 05, 2018 12:01 pm
It may be an outlier, but school definitely matters in the legal industry.
Medical and legal industries, and I imagine maybe to a lesser degree Engineering, are probably the only big-brand job titles where school matters.

If a job pays less than $100k/year I don't think anyone's going to scoff at a local school. I can't imagine throwing $120k+ into something like "Liberal Arts" or "English" or "Computer Science" or any other 'practical' education. That's just asking for an ass-whooping.

My wife has a Bachelor's from Colorado State, which I think if you're not a local can be $$$ - and she's gotten zero mileage from being an English Major with a focus on Gothic Literature. Accounting, insurance loss control, and training are the places she's landed since college.

I went for an Associates in Computer Science at a community college and landed in IT, IT, and IT for over a decade now. Now I'm going back to a local school to get a Bachelor's in Business Admin so I can try and leverage that up to IT Director somewhere. The Associates cost me a staggering $9,000 or so, which I was able to pay as I went part-time over 3.5 years.
Last edited by Paingod on Tue Jun 05, 2018 12:36 pm, edited 1 time in total.
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Re: The New Bubble

Post by Remus West » Tue Jun 05, 2018 12:33 pm

noxiousdog wrote:
Tue Jun 05, 2018 12:16 pm
Remus West wrote:
Tue Jun 05, 2018 12:09 pm
noxiousdog wrote:
Tue Jun 05, 2018 10:42 am
These are adults of above average intelligence.
What makes you think such a silly thought? We are pushing college for everyone not just those of average intelligence. Which specifically means that those of below average intelligence are looking for ways to pay for college and getting taken advantage of. Even if we limited it to above average there are still people who make mistakes and being laden with debt that you literally have no way to pay off during the span of your life due to a single bad decision shouldn't be a possibility let alone a reality for such a large portion of the population.
So dramatic.

The average loan we are talking about is 34k, which is a nice car loan. Even at the extreme, we're talking 100k, which is a small house payment with none of the maintenance or taxes associated.

Roughly 2/3rds of folks that graduate high school attend college of any kind, with roughly 1/3 of those going to 2 year schools.
The average loan may begin at 34K but when you add interest it gets a lot higher than that. When you compound the interest during the years you are not actively paying (you know, while you're in college)......

I think part of the issue is that you seem to think ALL college loan people want or need some sort of assistance while I'm talking about only a portion of them.

Look at it this way. We as a society loaned these people money. Does it make more financial sense for us to bind them in a manner that nearly requires them to drop off the books to survive or does it make more sense to release enough of the loan to allow them to repay a portion and remain as part of the active tax base?
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Re: The New Bubble

Post by Remus West » Tue Jun 05, 2018 12:35 pm

noxiousdog wrote:
Tue Jun 05, 2018 12:24 pm
Remus West wrote:
Tue Jun 05, 2018 12:11 pm
Smoove_B wrote:
Tue Jun 05, 2018 11:14 am
I don't want to use the word predatory to describe what's happening, but they're definitely being taken advantage of at the expense of their future.
I'm happy to use it for you. The loan practices and collection tatics are absolutely predatory.
The universities are waaaayyy more predatory than the loans.
To me they are part of the loan industry so Ifully agree they are predatory but I don't think they are more so that the lenders. Neither exists without the efforts of the other.
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Re: The New Bubble

Post by Combustible Lemur » Tue Jun 05, 2018 12:54 pm

Fwiw room and board is definitely a factor as college's trey them like stadium concessions. A one bedroom dorm with communal baths and kitchen will often cost the same as a two or three bedroom duplex. Meal plans are often $11 plus per meal. And both are often mandatory for underclassmen. Plus if you opt out and commute the university generally reduces any financial aid a commensurate amount. When making the calculation it's whether you can save off campus for both loss of aid and room and board. Depends on your city I would think.

As to which university, the growing thought I've seen is that basics don't matter, but upper level definitely does. Is about emphasis and philosophy. But there are lots of specialist schools that are smaller state schools or private schools that help with costs. A&M Galveston, and UTMB are the first two that pop into my head. They're relatively cheap, and provide small top tier research campus perks with a national name.

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Re: The New Bubble

Post by Blackhawk » Tue Jun 05, 2018 2:12 pm

I don't doubt that beginning college students should be able to understand interest.

I do question whether a 17 or 18 year old can fully comprehend what that amount of debt means beyond the level of the numbers on paper and have probably never manged more than a few hundred dollars, either assets or debt, at once. I question whether an 18 year old can fully comprehend the idea of a decades long commitment when they haven't even existed for decades. I also question whether a 17 year old can grasp the impact that these decisions will have on home ownership and children when they've yet to seriously look at those concepts as part of their lives.

They're absolutely responsible, but we can't kid ourselves that teaching them the math behind the loan is the same as giving them the tools to make the decision the way a bunch of middle aged guys on a forum would.
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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 2:34 pm

Blackhawk wrote:
Tue Jun 05, 2018 2:12 pm
I don't doubt that beginning college students should be able to understand interest.

I do question whether a 17 or 18 year old can fully comprehend what that amount of debt means beyond the level of the numbers on paper and have probably never manged more than a few hundred dollars, either assets or debt, at once. I question whether an 18 year old can fully comprehend the idea of a decades long commitment when they haven't even existed for decades. I also question whether a 17 year old can grasp the impact that these decisions will have on home ownership and children when they've yet to seriously look at those concepts as part of their lives.

They're absolutely responsible, but we can't kid ourselves that teaching them the math behind the loan is the same as giving them the tools to make the decision the way a bunch of middle aged guys on a forum would.
Really?

Did you go buy a Mercedes when you turned 18? Why or why not?

I'm flabbergasted you guys want to loan thousands of dollars to people who can't understand loans.
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Re: The New Bubble

Post by LawBeefaroni » Tue Jun 05, 2018 2:44 pm

If they can't understand debt and loans, or the long term implications thereof, why the hell are they allowed to vote?

No loans, no vote, no military service, no booze, no guns, cars. Probably no smoking. No dope for sure. We need to protect these babes-in-the-woods!



Honestly, online education from the parents' basement is probably the best route.
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Re: The New Bubble

Post by Remus West » Tue Jun 05, 2018 2:48 pm

noxiousdog wrote:
Tue Jun 05, 2018 2:34 pm
Blackhawk wrote:
Tue Jun 05, 2018 2:12 pm
I don't doubt that beginning college students should be able to understand interest.

I do question whether a 17 or 18 year old can fully comprehend what that amount of debt means beyond the level of the numbers on paper and have probably never manged more than a few hundred dollars, either assets or debt, at once. I question whether an 18 year old can fully comprehend the idea of a decades long commitment when they haven't even existed for decades. I also question whether a 17 year old can grasp the impact that these decisions will have on home ownership and children when they've yet to seriously look at those concepts as part of their lives.

They're absolutely responsible, but we can't kid ourselves that teaching them the math behind the loan is the same as giving them the tools to make the decision the way a bunch of middle aged guys on a forum would.
Really?

Did you go buy a Mercedes when you turned 18? Why or why not?

I'm flabbergasted you guys want to loan thousands of dollars to people who can't understand loans.
Find a dealership that would finance a Mercedes to an 18 year old and I'm certain you would find a LOT of 18 year olds buying them. Of course the cars would get reposessed and the buyer would only have a short term blemish on their credit rating rather than a lifetime of what essentially amounts to endentured servitude.
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Re: The New Bubble

Post by LawBeefaroni » Tue Jun 05, 2018 2:55 pm

If I'm being less facetious, why not just cap based in school and major? Re-assess every year for any changes.

Instead of loaner risk, since it's non-defaultable you rate based on recipient risk.
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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 2:56 pm

Remus West wrote:
Tue Jun 05, 2018 2:48 pm
noxiousdog wrote:
Tue Jun 05, 2018 2:34 pm
Blackhawk wrote:
Tue Jun 05, 2018 2:12 pm
I don't doubt that beginning college students should be able to understand interest.

I do question whether a 17 or 18 year old can fully comprehend what that amount of debt means beyond the level of the numbers on paper and have probably never manged more than a few hundred dollars, either assets or debt, at once. I question whether an 18 year old can fully comprehend the idea of a decades long commitment when they haven't even existed for decades. I also question whether a 17 year old can grasp the impact that these decisions will have on home ownership and children when they've yet to seriously look at those concepts as part of their lives.

They're absolutely responsible, but we can't kid ourselves that teaching them the math behind the loan is the same as giving them the tools to make the decision the way a bunch of middle aged guys on a forum would.
Really?

Did you go buy a Mercedes when you turned 18? Why or why not?

I'm flabbergasted you guys want to loan thousands of dollars to people who can't understand loans.
Find a dealership that would finance a Mercedes to an 18 year old and I'm certain you would find a LOT of 18 year olds buying them. Of course the cars would get reposessed and the buyer would only have a short term blemish on their credit rating rather than a lifetime of what essentially amounts to endentured servitude.
Dealerships don't finance. Banks do.

"Indentured servitude." Comical.
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Re: The New Bubble

Post by stessier » Tue Jun 05, 2018 3:10 pm

noxiousdog wrote:
Tue Jun 05, 2018 2:34 pm
Blackhawk wrote:
Tue Jun 05, 2018 2:12 pm
I don't doubt that beginning college students should be able to understand interest.

I do question whether a 17 or 18 year old can fully comprehend what that amount of debt means beyond the level of the numbers on paper and have probably never manged more than a few hundred dollars, either assets or debt, at once. I question whether an 18 year old can fully comprehend the idea of a decades long commitment when they haven't even existed for decades. I also question whether a 17 year old can grasp the impact that these decisions will have on home ownership and children when they've yet to seriously look at those concepts as part of their lives.

They're absolutely responsible, but we can't kid ourselves that teaching them the math behind the loan is the same as giving them the tools to make the decision the way a bunch of middle aged guys on a forum would.
Really?

Did you go buy a Mercedes when you turned 18? Why or why not?

I'm flabbergasted you guys want to loan thousands of dollars to people who can't understand loans.
I don't think we want or don't want to. We just don't think kids are equipped to understand what they are getting into whereas you think they are. I can't understand why you think this, but there it is.
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Re: The New Bubble

Post by RunningMn9 » Tue Jun 05, 2018 3:11 pm

ImLawBoy wrote:
Tue Jun 05, 2018 12:01 pm
RunningMn9 wrote:This of course may not be true of all industries or even all locales within an industry.
It may be an outlier, but school definitely matters in the legal industry. Your undergrad can have an impact on where you get accepted to law school, and your law school has a huge impact on where you get your first (and often subsequent) jobs.
When I issued my disclaimer, I was specifically thinking of the lawyer industry. I don't know if it's because so much of these industries is direct customer facing, and the people selecting them don't have the expertise required?

In other words, if I'm hiring a lawyer, I don't have the skill set required to really determine a good lawyer from bad during an interview/consult. What am I left with to choose from when it comes to legal competence?

I didn't think too much about how that might impact lawyers hiring lawyers, or law school itself.
Last edited by RunningMn9 on Tue Jun 05, 2018 3:29 pm, edited 1 time in total.
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Re: The New Bubble

Post by Isgrimnur » Tue Jun 05, 2018 3:14 pm

noxiousdog wrote:
Tue Jun 05, 2018 2:56 pm
Dealerships don't finance. Banks do.

"Indentured servitude." Comical.
Dealerships don't. Manufacturers do.

Forbes, 2012
Ford does. So do Toyota, Honda, Nissan, Hyundai, Volkswagen, BMW and Mercedes-Benz. Chrysler doesn’t. GM is building one out of GM Financial, a subprime auto lender GM acquired in 2010.

True, Chrysler and GM also share a “preferred lender” setup with Ally Financial Services, the former GMAC.
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Re: The New Bubble

Post by RunningMn9 » Tue Jun 05, 2018 3:23 pm

noxiousdog wrote:
Tue Jun 05, 2018 10:42 am
However, I call bullshit on the naive 18 year old issue. These are adults of above average intelligence. If they can't be responsible for understanding simple interest, they shouldn't be going to college anyway.
The problem isn't understanding simple interest, and I suspect that you know it. These are not adults of above average intelligence. They are barely adults of varying intelligence, with absolutely no goddamn wisdom or predilection towards long-term thinking.

My son is 17, and I am constantly seeing large groups of 16-19 year olds. They're goddamn idiots. It's not that they aren't smart. It's that their sphere of awareness covers about 12 minutes into the future, and only seems capable of processing sunny day scenarios where nothing goes wrong.

It's taken years of work to get him to think about college like a business decision. He did not grow up in a home where college was the only one right way to live. It's A way. And there are lots of ways to go about it. We've routinely talked about the fact that this is likely the most important, or second most important financial decision he will ever make. And if he is dumb enough to make it based on getting "the college experience", I'm not footing the bill for that.

He's only at this point because we didn't apply any "you must go to college and obtain the college experience" bullshit to him, and constantly reiterated the choices and mathematical consequences of each. I know very few parents that have done that.

So I guess I only half disagree with you. Some of them are capable of making the correct decision - but almost never in a vacuum without incredible amounts of guidance.
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
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Well he's slowly drifting out of range

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Re: The New Bubble

Post by Remus West » Tue Jun 05, 2018 3:30 pm

noxiousdog wrote:
Tue Jun 05, 2018 2:56 pm
Remus West wrote:
Tue Jun 05, 2018 2:48 pm
noxiousdog wrote:
Tue Jun 05, 2018 2:34 pm
Blackhawk wrote:
Tue Jun 05, 2018 2:12 pm
I don't doubt that beginning college students should be able to understand interest.

I do question whether a 17 or 18 year old can fully comprehend what that amount of debt means beyond the level of the numbers on paper and have probably never manged more than a few hundred dollars, either assets or debt, at once. I question whether an 18 year old can fully comprehend the idea of a decades long commitment when they haven't even existed for decades. I also question whether a 17 year old can grasp the impact that these decisions will have on home ownership and children when they've yet to seriously look at those concepts as part of their lives.

They're absolutely responsible, but we can't kid ourselves that teaching them the math behind the loan is the same as giving them the tools to make the decision the way a bunch of middle aged guys on a forum would.
Really?

Did you go buy a Mercedes when you turned 18? Why or why not?

I'm flabbergasted you guys want to loan thousands of dollars to people who can't understand loans.
Find a dealership that would finance a Mercedes to an 18 year old and I'm certain you would find a LOT of 18 year olds buying them. Of course the cars would get reposessed and the buyer would only have a short term blemish on their credit rating rather than a lifetime of what essentially amounts to endentured servitude.
Dealerships don't finance. Banks do.

"Indentured servitude." Comical.
Fine. Find a bank that will finance it. As for indentured servitude being comical maybe your sense of humor differs from mine but I don't find it funny that people are literally crippled financially by a single stupid decision.

Hows this for an exercise. Name me a single other bad financial decision that carries the same long term impact?
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Re: The New Bubble

Post by LordMortis » Tue Jun 05, 2018 3:31 pm

Remus West wrote:
Tue Jun 05, 2018 2:48 pm
Find a dealership that would finance a Mercedes to an 18 year old and I'm certain you would find a LOT of 18 year olds buying them. Of course the cars would get reposessed and the buyer would only have a short term blemish on their credit rating rather than a lifetime of what essentially amounts to endentured servitude.
I was coming here to post something similar. Something happened in the 90s that made it mortgages and student loans got made available to everyone and at very low rates. I can''t comprehend how student loans work that way, when there is no collateral. I know I couldn't get a loan because my dad made too much money. Not enough to put me (or his four other kids) through college but too much just the same. Those rules all changed somewhere.

Who are the guarantors for all of these loans? Gub'ment? Why? What happened? What made them go from no loans to anyone but the poorest and yet brightest of the population to house sized loans for everyone? Why does not get reigned in? I want to follow the money but I'm not smart enough.

Something is way off and insane amounts of free money for everyone not only doesn't seem to be the answer but it doesn't even seem to be paying full time tenured professors anymore. They have it as bad, if not worse, than public school teachers.

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Re: The New Bubble

Post by LordMortis » Tue Jun 05, 2018 3:33 pm

Name me a single other bad financial decision that carries the same long term impact?
Being a loyal contract worker for Donald J Trump?
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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 3:40 pm

Remus West wrote:
Tue Jun 05, 2018 3:30 pm
this for an exercise. Name me a single other bad financial decision that carries the same long term impact?
You're implying it's a bad financial decision. The evidence is to the contrary.

Regardless, a bad home purchase is at least a magnitude worse.
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"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog

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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 3:50 pm

Just so we're talking about the same thing here...

Student Loan Debt Statistics

40% of the overall student loan debt total is accounted for by graduate borrowers. ($563 billion) - I think we can all agree these are higher than average intelligence with commiserate higher salaries.

Average Debt Per Student Borrower - $27,975 - If that were a car on a 5 year note, that's $466/month + interest. I'm pretty sure student loans are way more generous.
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"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog

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Re: The New Bubble

Post by ImLawBoy » Tue Jun 05, 2018 3:51 pm

RunningMn9 wrote:
Tue Jun 05, 2018 3:11 pm
ImLawBoy wrote:
Tue Jun 05, 2018 12:01 pm
RunningMn9 wrote:This of course may not be true of all industries or even all locales within an industry.
It may be an outlier, but school definitely matters in the legal industry. Your undergrad can have an impact on where you get accepted to law school, and your law school has a huge impact on where you get your first (and often subsequent) jobs.
When I issued my disclaimer, I was specifically thinking of the lawyer industry. I don't know if it's because so much of these industries is direct customer facing, and the people selecting them don't have the expertise required?

In other words, if I'm hiring a lawyer, I don't have the skill set required to really determine a good lawyer from bad during an interview/consult. What am I left with to choose from when it comes to legal competence?

I didn't think too much about how that might impact lawyers hiring lawyers, or law school itself.
It's not so much individuals deciding which lawyer to hire as the big law firms deciding which law students to hire. With many big firms starting first year lawyers at as much as $180K/year, that's a big investment for someone with minimal relevant work experience. If you're on the hiring committee at a law firm and you see two facially equivalent candidates, but one has a degree from Harvard and one has a degree from the University of Illinois, you're likely to break the tie with the bigger name school. If it doesn't work out, you're protected because you made the "safe" hire. Once you're in at a big firm, assuming you don't burn out, you'll have a better pick of corporate jobs down the line.

That's not to say you can't do well coming out of a "lesser" school, but if you're paying nearly $50K/year tuition and you wind up at a small firm or working public interest or something, that law school debt (on top of your undergrad debt, of course) is a killer.
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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 3:54 pm

I'm pretty sure that's exactly what we need. More bailouts for lawyers and doctors. ;)
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"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog

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Re: The New Bubble

Post by ImLawBoy » Tue Jun 05, 2018 3:59 pm

noxiousdog wrote:
Tue Jun 05, 2018 3:54 pm
I'm pretty sure that's exactly what we need. More bailouts for lawyers and doctors. ;)
Preach!
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Re: The New Bubble

Post by LordMortis » Tue Jun 05, 2018 3:59 pm

noxiousdog wrote:
Tue Jun 05, 2018 3:50 pm
Just so we're talking about the same thing here...

Student Loan Debt Statistics

40% of the overall student loan debt total is accounted for by graduate borrowers. ($563 billion) - I think we can all agree these are higher than average intelligence with commiserate higher salaries.

Average Debt Per Student Borrower - $27,975 - If that were a car on a 5 year note, that's $466/month + interest. I'm pretty sure student loans are way more generous.
That site makes no sense or perhaps Equifax makes no sense. I wat trying to see if that the average current student debt the average debt a student graduates with
· National Student Loan Debt - $1,410,000,000,000 ($1.41 trillion)
· Overall Number of Student Loan Borrowers – 45,000,000 (~70%of college students)
· Student Loan Default Rate – 11.5%
· Student Loan Delinquency Rate – 5.41%
· Average Debt Per Student Borrower - $27,975

(Resource: Federal Reserve Bank of New York Consumer Credit Panel/Equifax, Federal Student Loan Portfolio)
1410000000000/45000000 = $31,333 which is to say by that math the current average student should be 31,300, which is also to assume the average student is graduating with considerably more debt that $31,333

something isn't right. I don't if it's me or the presentation but something isn't' right.

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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 4:02 pm

LordMortis wrote:
Tue Jun 05, 2018 3:59 pm
noxiousdog wrote:
Tue Jun 05, 2018 3:50 pm
Just so we're talking about the same thing here...

Student Loan Debt Statistics

40% of the overall student loan debt total is accounted for by graduate borrowers. ($563 billion) - I think we can all agree these are higher than average intelligence with commiserate higher salaries.

Average Debt Per Student Borrower - $27,975 - If that were a car on a 5 year note, that's $466/month + interest. I'm pretty sure student loans are way more generous.
That site makes no sense or perhaps Equifax makes no sense. I wat trying to see if that the average current student debt the average debt a student graduates with
· National Student Loan Debt - $1,410,000,000,000 ($1.41 trillion)
· Overall Number of Student Loan Borrowers – 45,000,000 (~70%of college students)
· Student Loan Default Rate – 11.5%
· Student Loan Delinquency Rate – 5.41%
· Average Debt Per Student Borrower - $27,975

(Resource: Federal Reserve Bank of New York Consumer Credit Panel/Equifax, Federal Student Loan Portfolio)
1410000000000/45000000 = $31,333 which is to say by that math the current average student should be 31,300, which is also to assume the average student is graduating with considerably more debt that $31,333

something isn't right. I don't if it's me or the presentation but something isn't' right.
I assumed it was doing median, but are you quibbling over 3k?
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Re: The New Bubble

Post by Isgrimnur » Tue Jun 05, 2018 4:04 pm

I certainly do when I go to the car dealership.
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Re: The New Bubble

Post by noxiousdog » Tue Jun 05, 2018 4:07 pm

Isgrimnur wrote:
Tue Jun 05, 2018 4:04 pm
I certainly do when I go to the car dealership.
I'm sure it will cause you "a lifetime of what essentially amounts to indentured servitude."
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Amazon Kindle Book Loaning Thread

"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog

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Re: The New Bubble

Post by LordMortis » Tue Jun 05, 2018 4:13 pm

noxiousdog wrote:
Tue Jun 05, 2018 4:02 pm
LordMortis wrote:
Tue Jun 05, 2018 3:59 pm
noxiousdog wrote:
Tue Jun 05, 2018 3:50 pm
Just so we're talking about the same thing here...

Student Loan Debt Statistics

40% of the overall student loan debt total is accounted for by graduate borrowers. ($563 billion) - I think we can all agree these are higher than average intelligence with commiserate higher salaries.

Average Debt Per Student Borrower - $27,975 - If that were a car on a 5 year note, that's $466/month + interest. I'm pretty sure student loans are way more generous.
That site makes no sense or perhaps Equifax makes no sense. I wat trying to see if that the average current student debt the average debt a student graduates with
· National Student Loan Debt - $1,410,000,000,000 ($1.41 trillion)
· Overall Number of Student Loan Borrowers – 45,000,000 (~70%of college students)
· Student Loan Default Rate – 11.5%
· Student Loan Delinquency Rate – 5.41%
· Average Debt Per Student Borrower - $27,975

(Resource: Federal Reserve Bank of New York Consumer Credit Panel/Equifax, Federal Student Loan Portfolio)
1410000000000/45000000 = $31,333 which is to say by that math the current average student should be 31,300, which is also to assume the average student is graduating with considerably more debt that $31,333

something isn't right. I don't if it's me or the presentation but something isn't' right.
I assumed it was doing median, but are you quibbling over 3k?
I'm trying to understand. I'm quibbling over my ignorance. I look at those numbers and I feel someone is trying to trick me and I become distrustful of either my ability to interpret what I'm told or the discriminators of information.

If you tell me the average student debtor has $27,975 in student debt and there are 45 million student debtors and then ask me how much student debt is there and I answer $1,258,875,000,000 and you say wrong, the answer is $1,410,000,000,000 then I want to understand.

This goes doubly because I was trying to figure out if the average student debtor graduates with $27,975 debt or if the average this was a pool of all debtors at all states of repayment and how much they currently owe. I assume it's the later but even then the number doesn't account for 150 billion in debt.

My judgement was to come later. I'm just trying to understand the numbers right now.

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Re: The New Bubble

Post by gilraen » Tue Jun 05, 2018 4:38 pm

I seriously doubt there are *exactly* 45 million student loan borrowers, this article must be rounding down from 45 million and change, which would explain the arithmetic discrepancy.

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Re: The New Bubble

Post by RunningMn9 » Tue Jun 05, 2018 4:41 pm

LordMortis wrote:
Tue Jun 05, 2018 4:13 pm
This goes doubly because I was trying to figure out if the average student debtor graduates with $27,975 debt or if the average this was a pool of all debtors at all states of repayment and how much they currently owe. I assume it's the later but even then the number doesn't account for 150 billion in debt.
I'm with LM on this, the statistic that is most relevant to the discussion is average student debt *at graduation*. Which may or may not be what those numbers are talking about.
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Christians, Moslems, Hindus, Jews
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Make up bags of change
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Re: The New Bubble

Post by LordMortis » Tue Jun 05, 2018 4:56 pm

gilraen wrote:
Tue Jun 05, 2018 4:38 pm
I seriously doubt there are *exactly* 45 million student loan borrowers, this article must be rounding down from 45 million and change, which would explain the arithmetic discrepancy.
Again that just me trying to understand. If I go the other way, I get 504472271 or 50,000,0000 debtors. It's about a 10% misunderstanding for the normal way I throw around "average" pretty much anyway I break it down and this is breaking it down with the idea that this is an aggregate of students in debt.

I'm not saying this is wrong. I am saying I don't understand and it looks wrong and I don't trust it due to my ignorance.

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Re: The New Bubble

Post by Isgrimnur » Tue Jun 05, 2018 5:04 pm

Debt can certainly crush those who fail to graduate, too.
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Re: The New Bubble

Post by LordMortis » Tue Jun 05, 2018 5:51 pm

Isgrimnur wrote:
Tue Jun 05, 2018 5:04 pm
Debt can certainly crush those who fail to graduate, too.

Sorry, my bad I did once say graduating when I should have have said leaving college. Let me walk that back. That average would also include post graduate school debt and I can only assume it also include vocational education debt as well.

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Re: The New Bubble

Post by Chaz » Tue Jun 05, 2018 6:37 pm

The Mercedes analogy works better if society is set up to spend your whole life telling you that if you don't get a decked out Mercedes, you'll spend your life making minimum wage at McDonald's, and then have the actual reality be that most better paying jobs use Mercedes ownership as a requirement, regardless of your level of experience, or if the job has anything to do with Mercedes ownership at all.
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Re: The New Bubble

Post by Exodor » Tue Jun 05, 2018 6:49 pm

noxiousdog wrote:
Tue Jun 05, 2018 4:07 pm
Isgrimnur wrote:
Tue Jun 05, 2018 4:04 pm
I certainly do when I go to the car dealership.
I'm sure it will cause you "a lifetime of what essentially amounts to indentured servitude."
The difference is you can walk away from a bad car loan or a bad home loan or go through bankruptcy. Your credit will get hurt but you can escape the debt.

Bankruptcy is usually not sufficient to escape student loans
Until 1990, student loans could be discharged in bankruptcy court after the fifth year of repayment. Since then, Congress has repeatedly made erasing education debt more difficult. Debtors must prove that paying the loans poses an “undue hardship” — a term Congress has never defined and which many courts interpret in the narrowest possible terms.
(that's from an opinion piece but it matches what I've read elsewhere regarding the difficulty of escaping student loan debt)


Indentured servitude is a bit much but student loan debt is significantly different from mortgaes or auto loans.

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Re: The New Bubble

Post by Blackhawk » Tue Jun 05, 2018 7:01 pm

Wow. I suggest that people should consider that kids don't have the same understanding of their decisions as adults do, and people unload on me.

My point was that maybe, just maybe, we should put some emphasis on what the loans mean in the long run and not just what the cold math is when giving kids their options. It's better than assuming that people whose brains won't be fully formed for another 7-8 years have the same understanding as people who've spent decades making financial decisions. Teach the kids an understanding of what they get into vs bitching when they are surprised by what they didn't understand.

Apparently people think I was suggesting putting kids into protective bubbles with that.
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Re: The New Bubble

Post by RunningMn9 » Tue Jun 05, 2018 9:58 pm

I’m with you Blackhawk! :)

I’ve seen how hard it is to get a mid-to-late teenager to think long-term and to really evaluate consequences. It ain’t easy.

Because they’re idiots.
And in banks across the world
Christians, Moslems, Hindus, Jews
And every other race, creed, colour, tint or hue
Get down on their knees and pray
The raccoon and the groundhog neatly
Make up bags of change
But the monkey in the corner
Well he's slowly drifting out of range

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Re: The New Bubble

Post by Smoove_B » Tue Jun 05, 2018 10:02 pm

But you don't have to take our word for it. Let's ask scientists (From 2010), via NPR:
Jensen says scientists used to think human brain development was pretty complete by age 10. Or as she puts it, that "a teenage brain is just an adult brain with fewer miles on it."

But it's not. To begin with, she says, a crucial part of the brain — the frontal lobes — are not fully connected. Really.

"It's the part of the brain that says: 'Is this a good idea? What is the consequence of this action?' " Jensen says. "It's not that they don't have a frontal lobe. And they can use it. But they're going to access it more slowly."

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Re: The New Bubble

Post by Kraken » Wed Jun 06, 2018 2:08 am


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Re: The New Bubble

Post by Remus West » Wed Jun 06, 2018 9:45 am

noxiousdog wrote:
Tue Jun 05, 2018 3:40 pm
Remus West wrote:
Tue Jun 05, 2018 3:30 pm
this for an exercise. Name me a single other bad financial decision that carries the same long term impact?
You're implying it's a bad financial decision. The evidence is to the contrary.

Regardless, a bad home purchase is at least a magnitude worse.
Wrong. As noted you can walk away from a bad home purchase. It takes a hit to your credit but you can walk away.

As to your average borrower stats, it isn't the average person I'm talking about. With 40 million + borrowers there are millions well above that level. I'm also not talking about lawyers and doctors.

I'm more concerned about the people who borrowed to go places like Trump University that are being held to the fire to repay (Trump U being only one example of a load of bad educational "opportunities" out there). The Federal government requires you to tell them where you're going to spend the loan and on what (at least I had to when I did Grad school in teaching) yet they do nothing with that information to protect the borrower. Then we act amazed when the BS in basket-weaving techniques of ancient alien civilizations doesn't allow the borrower to repay 40K in loans while feeding and sheltering themselves.

Every single other loan system requires the lender to take on risk of repayment except the student loan system. Why? From what I can see it is because that way we can continue to shove the narrative of "college for everyone" down their throats and turn around and make a lot of free interest off their labor.
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Re: The New Bubble

Post by GreenGoo » Wed Jun 06, 2018 9:50 am

Ytf would it cost 40k to learn about ancient basket weaving is another part of the equation that needs to be addressed.

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