The only "news article" [1] I can find that references this mentions 0.3% of student loans were discharged through bankruptcy in 1977 [2].
[1] https://www.linkedin.com/pulse/history-student-loans-bankrup...
[2] http://harvardlawreview.org/wp-content/uploads/pdfs/vol126_s...
Seems be to be some serious revisionist history going on...
Just because it’s not a link on the internet doesn’t mean it isn’t true.
It was pretty much common knowledge when I was in school. I only knew a few pre-meds, but it certainly came up as a discussion topic more than once.
You don't have to link to a source on the internet either, citing a book or newspaper article would be sufficient.
It's not quite as abusive as what could have happened when student loans were dischargeable in bankruptcy- it takes 20 years and you're taxed on the forgiveness- but I thought it was quite perverse that the institution charging towering sums of money is teaching the students in blanket fashion how to avoid paying it off.
It actually says something much stronger - it says that 0.3% of the value of all federal student loans given before 1977 had been discharged through bankruptcy, not in 1977. In 1977 wouldn't make sense because the amendments making it impossible to discharge student loan debt through bankruptcy were made in 1976.
It has only made the cost of education go up rather than make college affordable.
But on the flip side, what can be expected from people with no ability to afford college at the new price?
Ive been told over and over that my personal situation working full time on the midnight shift and going to college is 'unrealistic' for everyone to do.
So whats the solution? Get rid of the loans until college cut the cost? What happens to the first few years of lower and middle class kids who cant afford to go to college?
Kids living at home and taking (mostly) pre-programmed online courses should be the norm. It is vastly cheaper, and can deliver more consistently better results.
Me and my brother are building a dishwasher but he seems to jump into solutions rather than determining the necessary inputs and equations to prove them outputs will meet our design specifications.
And my brother is an engineer.
In a few weeks/months I feel like I can learn any subject with enough googling and hard work. However, without this ultra critical mindset, I can imagine a child would get lost among too much information.
I picked up that mentality while being involved with the family farm as a young child.
The elementary and secondary systems came of age when the vast majority of the population also had significant involvement in agriculture. One would imagine that kind of thinking would be pushed at those early school levels, long before one reaches the typical post-secondary age, but you are suggesting that is not the case. It may have been assumed that one would already pick that up at home given the circumstances of the time and we haven't looked back since?
Has college become the replacement for agrarian exposure in our modern urbanized society?
Of course, a college degree doesn't really tell me that, either. If you can solve this problem, you could make online education superior to college education (at least in terms of value to an employer).
There are more libraries in the USA than McDonalds. Turn them into testing centers.
And libraries probably want to continue to be libraries, rather than becoming testing centers.
There is already an approach that addresses this: competency-based degree programs.
Obviously, there aren't any with the prestige of top traditional schools.
Western Governors University
Brandman University MyPath
Southern New Hampshire University College for America
(The best part is when the politicians who voted for the cut in funding turn around a year later and say why are you raising tuition?!)
This is a vicious cycle, and it only serves one class of people: students who are born into well-off families who can afford tuition at these rates out of pocket. Those who aren't have to take out larger and larger loans just to attempt to complete a degree. It's really sad, because it doesn't need to be this way.
Also the meme that all blue collar jobs require a higher ed degree, such as bartender, waitress, secretary, day care worker, receptionist, all of that will go back to "high school grad" as a job req.
Of course with prevailing long term trends, "having a full time job" or "having medical care" will soon be a luxury few will experience.
Admission to a to school seemed like the only path to wealth when I was growing up. I don't think I can make that same claim for my kids.
For whatever I have saved for them I'll offer to put it towards college or give it to them when they turn 20 to start a business.
The problem comes when the actual value of graduating from a top college does not equal the expected value. That's where you get people making poor economic decisions (or when they don't read the interest rate on the loan). The people who have to pay $5k/month in student loans, but make $20k/month at their job are getting the deal they expected. But the people who knew they'd have to pay $5k/month but can only find a $8k/month job are having buyers remorse.
If I make a poor economic decisions, and choose to buy a ferrari, I'd also have to a find a bank willing to support my poor economic decisions. Naturally any bank will not take me seriously how much I plead with them on my ability to pay them back. That changes if I the bank is guaranteed by the government to get their money bank.
How much would a Toyota Corolla cost if the government was willing to fully back any car loan? Why wouldn't Toyota charge $500,000 for a Corolla if banks didn't care if their borrowers couldn't pay that amount back?
The short of it is people who would normally be completely priced out of a college education are now enabled by banks who give them fiscally irresponsible loans because they know the government is guaranteed to pay them back, whether or not the borrower can pay or not. If these loans didn't exist, there would be fewer people willing to pay $50k and schools would be forced to lower prices or go defunct.
So, just to be clear 18 year olds getting tens of thousands in dischargeable loans is ridiculous, but 18 year olds getting tens of thousands in non-dischargeable loans makes total sense?
I mean, I understand why if you are a person making money off student loans, the latter is a great situation to have. But for anyone else, I'm not sure I agree that it's something we should fight for.
I believe they intend to mean that we should fix this problem without irreparably screwing over an entire generation of potential college students
But when a student needs a loan to pay for their education, the person lending money is more important than everyone else. If you are not going to incentivize lending money for college debt and instead going to add risks (of not getting paid back because discharging loans is now easy), then you will have less loans in the first place.
When a student needs money to pay for their education, why are we extending loans rather than need-based grants?
Alternatively cap un-bankruptable dept to a reasonable amount, say 15k/yr or something. It's pretty much how it works here in Quebec Canada and very few students end up with more than 40k CAN in un-bankruptable dept.
I feel like your question is supposed to be making a rhetorical point but it has an extremely literal answer as of a few years ago.
The concept of everyone should go to college is extremely Boomer; they're dying off and their beliefs are dying off with them. Likewise just wait until "Real estate only goes up!" dies out. Or watching TV pro sports being taken seriously as a hobby. Then you factor in demographic replacement; if most young kids are not native, they will not have legacy native beliefs. It doesn't matter what white hippies held dear in 1970, if a significant fraction of the kids are not legacy demographic. Demographic elimination means cultural elimination and nothing says "white boomer" quite like "Everybody gotta go to college"
Since the elimination of the Federal Family Education Loan program in 2010, there has been only one legally-possible lender for Federally-guaranteed student loans.
And they aren't a for-profit corporation, or an entity that evidences much concern for babalncing spending and revenue.
I can agree that college is becoming a band-aid to make up for the serious problems found in earlier years. To the point that, in recognition of this, many now call people who have not graduated from college 'uneducated', which is pretty sad when you think that 12 years of completed schooling hasn't provided an education. But the solution for healing a wound isn't to provide a more affordable band-aid. It is to address what is causing the wound in the first place.
It need not be a difficult fix politically. Nobody, who isn't emotionally or financially invested in college being a band-aid, is going to argue against educating our youth in the K-12 system. The only roadblock is getting someone to think about the issue, as the advertising done by the colleges has left us believing that education simply isn't provided any other way other than through colleges.
Robots and software actually make the world simpler. When we were an agrarian society, farmers had to know how to do basically everything imaginable to be able to be productive. It took a lifetime of training, starting as soon as you were old enough to walk, in order to learn the ropes and take in the deep knowledge passed from generation to generation. Industrialization simplified contributions so that one only had to specialize, negating the need to be there from birth. The information revolution simplified things further still. Now we have teenagers who are starting highly successful software businesses after spending a few months in front of a computer. The next revolution, whatever it may be, will only make contributions even more accessible, just as each time before.
Student loan debt is dischargeable in bankruptcy, it's just more difficult than other unsecured debt.
But the US would do better to just stop having federal student loans at all, in favor of need-based and service-based grants, rather than tweaking the terms under which loans are dischargeable.
This seems to come up fairly often. I don’t think many people are aware of the enormous size of the state banking sector in the US between educational loans and continued dominance of the residential mortgage market.
However on the margin it would make a huge difference. The most expensive programs require a mix of federal loans and federally subsidized loans. There are a few changes the federal government could make to not back loans data clearly show are going to be bad, and if those loans aren’t federally subsized they’re not happening. Or, perhaps, worst case scenario the interest rate becomes extreme.
There are a lot of moving pieces.
Bill Clinton presided over the changes that led to this mess. I know many of you are too young to know that, but Bill Clinton was not a great leader of the USA, he was a manipulator, interested in maximizing gains for his politically connected allies.