@SarcasticFringehead I agree with you, but the problem is that there are no guarantees in higher education. For every 10 folks that go through a certain course at NYU, 6 of 'em could walk straight into a job that pays off that student loan in 6 months. The other 4 could be screwed. Does that make it a good course, or a bad one? All ten might get spit out into a terrible jobs market which means they can't get hired. Does that make the course bad? They still taught the same stuff as last year where 8 of the 10 got great jobs! The fact is that going to university is a gamble, no matter what. One of the problems (as I see it) is that people are being promised jobs based on completion of degrees, when they are in no position to be able to fulfill those promises. There are way too many contributing factors that are outwith anyone's control to be able to guarantee anyone anything.
@dotcommie "That relies on many big assumptions: 1) that there is a parent 2) that the parent is good with money 3) that the parent has made major financial decisions 4) that the parent went to college and is familiar with the process and the options." Well, yes, but, you're ignoring the first part of my sentence: "if it was teenagers acting without guidance then that's one thing". I've already said that I'm not down with teenagers making this decision alone, and I'm all for them being fully educated as to the extent of the financial decisions that they're making. Also, when you're saying that teenagers shouldn't be held responsible to make these kind of financial decisions, you're making the exact same assumptions, but reversed (that there is no parent, or that the parent is not good with money etc). That doesn't make my point any less valid, and I would suggest that there are more college applicants that fit my assumptions than yours. You're also leaving out the part where I mentioned the author's experience, where her parents were actively involved in her decision making process. FWIW, I didn't know that NYU is a publicly subsidized not-for-profit. So, yeah, my analogy with Apple doesn't really hold up. I still think that no-one is being forced to go to NYU, and I still think more people should simply decide not to go. Even though NYU is a not-for-profit, money talks, and if their admission rates dropped, they would take action to correct it, I'm sure.
@aetataureate I was looking forward to the jiving, so that kinda makes me sad. I wouldn't call myself a free market capitalist either, but I don't see how my point is changed by teenagers being involved. If it was teenagers acting without any outside guidance then that's one thing, but most of the time there's some kind of parent or guardian involved in the process to try and give them some assistance. (As @Bettytron said: "I know my parents tried to talk with me about what this would mean in terms of debt") To repeat the analogy I used previously, Apple make very expensive computers. They use great marketing and status cues to make their products very appealing. As much as I'd like to own one, I can't afford it, so I buy a PC instead. If I really, REALLY wanted one, banks are lining up to offer me credit cards to pay for it. If I take that credit card and then can't afford to pay the repayments, then I believe that's a responsibility that lies with me. It's not the credit card company's fault for offering credit to me (they made me sign a whole bunch of paper that made it quite clear that they'll charge me interest). Actually, you could argue that they shouldn't give me a financial product that I clearly can't afford, so let's say that they deserve SOME responsibility. It's certainly not Apple's fault for making an appealing, expensive product. Therefore, I don't think that NYU should be criticized, even though the monetary values in this situation are much higher. The mortgage bubble is an entirely different situation, and I'm in no way defending the actions of the banking industry in signing people up for loans they couldn't afford through deliberate misinformation. I think what I'm basically trying to say is that (a)I'm in favour of companies charging whatever they like for products or services, as people are under no obligation to actually buy those products or services and (b)I believe that folks should be held accountable for the decisions that they make. It's not always someone else's fault. Also, I don't want @Bettytron to think that I'm unsympathetic to her situation - it really sucks, and I'm sorry that the system hasn't supported you more. Thanks for writing this article.
@aetataureate I have a bit of trouble with this. I don't necessarily agree with the criticism of NYU for how much their program costs (putting aside the argument of how much value is promised vs how much is actually provided). People don't criticize Apple for their computers being too expensive - if people can't afford one, they just don't buy it (or go into debt to buy one). My opinion is that NYU should be able to price their courses however they like. People don't have to pay it. If enough people make the conscious choice to not go there, then the price will be adjusted to something the market will bear. The author (Hi, @Bettytron!) clearly said that she knew how much it was going to cost ahead of time (and had more financially affordable options available to her), so I don't see how NYU can be held responsible for this.
@stuffisthings That makes a whole load of sense, thank you!
@stuffisthings Okay! I don't really understand what balance sheet recession has to do with consumer debt, and I don't really understand sheet recession in general, but I'll try and read that wiki page a few times. However, I'm not sure of the relevance. I'm not talking about macroeconomic policy, I'm talking about feelings. Could you elaborate further?
@lrodrigue Hi Lauren. Thanks for the clarification. I have student loan debt too, and yes, it's the worst. I'm lucky that my debt was accumulated in the UK (I'm scottish) so paying it back isn't as brutal as it is for the folks in the US and Canada. So basically ignore everything I just said! And I'm sorry if I came across judgey and whatnot, it certainly wasn't intentional.
The section about debt forgiveness makes me have FEELINGS and I'm not sure if other people are in the same boat or if I'm all on my own here but I'm going to talk about it anyway because this is an internet comments section and apparently that's what these things are for? I'm uncomfortable when (lovely, great) people talk about debt forgiveness when they're talking about credit card debt that was created by the accumulation of STUFF and THINGS. (I don't know Logan or Lauren, but it seems to me that their debt is consumer debt? No? If not, I'm sorry, just ignore me.) Don't get me wrong, I'm in favour of debt forgiveness in certain circumstances, but when it's talked about in terms of consumer debt I can't help but feel like it's incredibly unfair to the folks who haven't run up thousands in credit card debt? Like, I COULD buy an expensive car and buy all of the video games or whatever, but I don't. But if I knew that I could run up 10k of debt (or whatever) and then a certain percentage of that would just be forgiven, why the hell wouldn't I run up that debt? Where is the incentive not to accumulate all of this stuff that we're trained to want and measure our self-worth by? I'm sympathetic to the folks that have a ton of consumer debt, but the fact that it's so hard to get out of is exactly the reason that I've done everything I could to avoid getting into it in the first place. I'm probably not articulating myself or my point particularly well and this is definitely something I need to think about more, but I just wanted to see if I'm on my own on this one. I'm not meaning to be mean or trolling, just wanted to share an alternative point of view.
@josiahg That's fascinating, I never realized such a thing was possible. I wonder if that was a profitable side business or more trouble that it was worth... @deepomega You make a very good point. The very existence of such an organization changes the way that people would perceive debt and credit. It just seems illogical to me that the bank could be selling someone's debt without them having the option of "buying" it themselves. The way I see it, the problem isn't with the banks, it's with the debt recovery agencies that buy this debt from the banks and make people's lives unbearable so that they can turn a profit. Although this is as a result of a market that has been created entirely by the banks - if they weren't selling the debt cheaply in the first place, then the debt collection agencies wouldn't have a business model.
@deepomega Thanks for your reply. I have more questions, that I'm sure that people won't be able to answer, but I'm gonna type them into the void, anyhow. I understand that given a choice between getting $750 or $15k, the bank is probably going to choose $15k, but the reality that, whether they like it or not, the bank is taking that deal - they are selling $15k of debt for $750. I understand that the 5% is an aggregate figure, but the RJ is getting that number from somewhere, right? Debt is being sold cheaply, *right now*. How does someone find out if their student loan is up for sale? If debt is available this cheaply, are these terms being offered to the debtors themselves? Surely getting 6% of the loan direct from the debtor is better than getting 5% from a private debt collection agency? Also, what's to stop the following scenario: A collective of folks, much like the RJ, buys $15k of debt for $900 (6%). They then contact each individual debtor and asks them if they can afford to pay 8% of the loan (or anything at all). If so, then any money recovered rolls back into the fund. If not, then the debt is forgiven. Now, at this point you might ask why anyone would choose to pay 8% when they could just pay zero, but it could be set up in such a way that (a)it's not immediately apparent that zero is an option and (b) some folks will pay more than 8% (because that sometimes happens with pwyc models). Anyway. Because the fund is (ideally) getting 2% more than they're paying, then that should work toward covering the shortfall that occurs from forgiving the debts of those who can't afford to pay. This means that the pot of money that they started with won't go down that much, and it'll help a lot more people. It'd also make the banks more money (1% more) than the way things work right now. Win win win? (For the record, I'm not in the US and this imaginary scenario doesn't apply to me, as I'm pretty much debt free)