U.S. household debt tops $14 TRILLION and reaches new record

No, sorry, you're just wrong. Everyone knows loans must be repaid - no one lacks this information, beyond childhood.

It's definitely cultural, but it's not due to lack of information. It's due to lack of WILL.

 

in other words, if the kid doesn't understand how they will repay tens of thousands of dollars in education loans, they should not go to a 4 year university to gain an education.

Let's remember that 40% of those who attend a 4 year school in STEM subjects do not graduate within 6 years.

Kids have to accept that they have a significant possibility of ending up with large debt and no degree - making those without parental backup less likely to accept that risk.

 

You want the government to pay for higher education. It can be a fair deal if both commit.
The best way for most is through a military service commitment. Certain universities already have plans in place for doctors and lawyers. If there is no contractual incentive to pay back a loan many won't.

 

Wholly wrong thinking, again.

When the child chooses a course with very high returns, in a high demand field, his parents' poverty is a moot point. ANY poor family can work towards this end.

 

That's not even close to how these decisions get made. Parents are ALWAYS involved, because they are REQUIRED to be. And, those with wealthy parents aren't going to cold shoulder their kids. Those with wealthy parents have one major criterion - will a college accept them. Those with parents of low means have another major criterion - how the hell to pay the bill.
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2) What 'tens of thousands'? I have two in university, and another to follow shortly. Hasn't cost us a cent more than high school did. We (the parents) could literally be on welfare and it wouldn't make any difference.
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I don't kow when you got those degrees. Today, 4 year universities have tuiltion in excess of $30K.

Yes, they are free to choose.

The catch is that Ameica is better off when the decision isn't financial. This is one way we drive a wider wealth divide. It's how we end up with fewer college graduates. It's a way of causing generational poverty. It's what causes more to be paying little tax, as on average graduates earn $1M more during their careers. It's how we protect against having people end up jobless, because of their job being eliminated - as those with degrees are more desirable to employers in various industries. And, the new and growing segments of our economy require college education in order to fullly participate.

 

I might understand a deal such as public funding of education, with those who fail being required to enter the military for a fixed period.

However, I'm not so sure our modern military is interested in collecting all those who fail to graduate.

 

It is informational. Kids are being told that they will not have to repay them. The information they are being provided is wrong.

 

LOL!

Parental means testing is a requirement for education funding - loans, grants, etc.. And, it has NOTHING to do with what classes the kid takes.

 

This is counter to everything I've heard, and it's clearly a significant point in this discussion.

Could you please cite sources for this?

My understanding is that normal bankruptcy does NOT discharge education loan debt.

However, there is a legal direction that can cause inclusion of education loans if one can meet measures of hardship.

 

I have 1 close family friend in college and his friends whom I have met a few believe that it doesnt matter how much money they take out or what degree they get because they all are Bernie supporters except 1 was a biden and one was a warren supporter. They all supported democrat politicians. They believe whatever loan they take out will be repaid by the government for them. 2 of them didnt know what a promissory note was. 1 said I dont care how much student loans I have my parents cosigned. She understood the law however just kinda cruel.

I was taught nothing in school about finance. I believe they should make a life course with finance made available if not a core class to graduate.

 

Wow - in my estimation those kids just aren't thinking.

People need to remember that any major spending issue such as that would surely require congressional support - regardless of what the president might want.

One might point out that Trump ran on a policy including a border wall. He got a Republican House and a Republican Senate and still couldn't get the funding he wanted for the wall.

Those kids signed a contract - as did their parents (if any). Guessing that congress will spend money to free them of their contract hits me as pretty darn questionable.

 

1) Once again .. I'm not talking about the paperwork. I'm talking about the child's decision to borrow money, predicated upon their own ability to repay it via the degree they borrowed the money on. Do you understand? I'm talking about return on investment - something all investors must consider. All prospective students but those from rich families, should be basing their decision to take out student loans entirely upon their own ability to repay. But since you keep mentioning the paperwork, in my country parental means aren't factored in to the funding arrangements. The financing is available to all, irregardless.

2) My kids are doing much more expensive degrees than that. But it doesn't make any difference, since they'll be earning big bucks in high demand fields soon after graduation. That's the POINT. We're not rich, so they could only risk taking out student loans if the return on investment is guaranteed by the course itself.

3) Exactly. People are FREE to CHOOSE - the choices which lead to generational poverty. They could play the game better and escape that cycle, but they clearly prefer not to. Again, do you want to outlaw those choices?

 

1) blame their parents for sitting idly by while their kids develop these appalling attitudes to personal responsibility - including letting their kids take out loans on useless degrees.

2) that stuff cannot be learned in school, because it's a function of character - not education. it MUST come from the home.

 

Not in my country it isn't. Kids themselves are funded, as independent adults (what with being over the age of 18 ), irregardless of their family situation. There is no 'co-signing'. No one else but the graduate in question can be made liable for repaying that debt.

 

1) How can they "not understand how they will repay loans" if they've used that loan to access a HIGH PAYING, HIGH DEMAND field?

2) So what? Are you now going to outlaw 'failure to complete'? Why do you have such a problem with people exercising their free will?

3) Nonsense. Only kids who make very poor choices (eg: borrowing money on useless degrees, failure to complete, etc) have to accept that.

 

That's just not the way student loans work. A student loan is not based on some high school kid's idea of what they want to study. It IS base on the parent's financial situation. That's the avenue to student loans.

And, NO high school kid knows how they will pay back tens of thousands of dollars in loans.

A high school kid does not know if they will graduate. Stats indicate that 40% are WRONG in guessing they will graduate - even if given 6 years instead of 4.

It is important to make the choice to get an education easier and more equal to the decision made by those who have parents who can pay - because of the benefits to America.

 

We're talking about America here.

I don't know the rules of most other countries.

Germany is substantially different, in that they believe education is important.

 

Unfortunately, high school kids are imperfect at predicting the future. They do not know if they will graduate.

You're suggesting they make a decision based on what will happen in the future when they DO NOT KNOW what the future will be.

Nothing I've said has ANYTHING to do with restricting free will in ANY way.

 

1) I'll say it for the THIRD TIME. In my country, kids 18 or over are funded by universities independently .. their parents are not involved.

2) They CAN know, if they want to. All they have to do is choose a course with a clear path to well paid work in a high demand field. Saying they "can't" know is absurd, and patently untrue.

3) I'll say it again for the umpteenth time: So what? Dropping out before graduating is a freely made choice. Why do you have so much trouble with people exercising their free will? Please answer this important question. You seem to really hate the fact that people are free to choose (success OR failure).

 

I'm not talking about America specifically, I'm talking about all First World democracies. Because these things are happening everywhere, including my country.

 

The 2008 recession was delayed by Obama by taking $700 billion in American taxpayers money and giving it to corrupt financiers and bankers. This corrupt act and delay only ensured the next recession will be so much worse. Everyone knows what Obama did, no matter how hard you try to blame Trump

 

1) It's not a 'prediction'! It's very simple math. If you don't see out the 'term' of your investment, you forfeit the costs associated with it, and have no way to repay the loan taken out to fund it in the first place. It takes no special genius to understand that.

2) Yes, you DO know what your future will be .. if you use that borrowed money sensibly (which you must, if your folks are poor). If you study DENTISTRY, you're going to be a very well paid person who fixes teeth. If you study NURSING, you're going to have your pick of jobs, all over the world. If you study ENGINEERING, you're prolly going to be a quite well paid engineer. Etc etc.

3) You are literally complaining about people choosing to drop out. You clearly have a problem with it.

 

I blame three things primarily, in this order:
1. The Federal Reserve System 'central bank'. If we had no 'central bank' we would NOT have these problems with household, personal debt!
2. The reckless, seemingly endless stupidity of Americans who are so willing to take on vast amounts of debt they cannot afford.
3. Donald Trump, for constantly railing and raising hell that interest rates should be crushed back down to zero! All this does is encourage the Fed to "print" huge amounts of new, imaginary money and flood the world with it (as they are doing right now as a result of the 'repo crisis' that got cooking last September), plus, gulling all the suckers who live paycheck-to-paycheck to plunge even deeper into debt. Oh, and it also kicks everybody who SAVES money right in savings accounts right in the balls, while severely threatening the true value of the American dollar once this big debt joyride finally comes to a screeching stop....

I always defend Donald Trump when he is attacked unfairly by radical Democrats -- and that is OFTEN, but he really should not (NOT) be encouraging people to absolutely bathe in debt!

 

And the blame gaming begins. How predictable.

When, and if, a recession hits during Trump's reign it will, of course, be Obama's fault.

That's already the excuse you all are fomenting.

Unbelievable.

 

I agree I'd you borrow money pay it back or do the very best you can at least. These kids hopefully arent the majority. The fact of the matter is that this exists. I hope it exists at a small level but with the support of Bernie sanders I'm afraid there is more than I would like already that want bailed out of the system even though they signed contracts on there loans.