Paywall removed archive.is/cHSpA
Could you explain to non-Americans what is the appeal of student loans if they can do this? Why shouldn’t people go to cheaper schools to get their degrees instead?
Millennials are watching monthly student loan payments skyrocket from $500 to $5000 under Trump: This will ‘crash the economy’
Submitted 2 weeks ago by return2ozma@lemmy.world to aboringdystopia@lemmy.world
Comments
selokichtli@lemmy.ml 2 weeks ago
stoly@lemmy.world 2 weeks ago
There are no cheaper schools. There are expensive ones and more expensive ones. There is literally no option for the non-rich except to go into debt or learn to be a plumber.
cheers_queers@lemm.ee 2 weeks ago
learning a trade should be more encouraged, you can make a shit ton of money (relatively) without the debt
Leeks@lemmy.world 2 weeks ago
Children are told that they MUST go to college to get a stable and high paying job. This is so prevalent that college degrees are just seen as “the next step after high school” and nobody questions it. These colleges have figured out they can charge almost anything because they are seen as the gate keepers to high paying and stable jobs. So banking on future earnings, bearly emancipated teenagers, with the absolute minimum of a financial education, make life decisions that will put them in debt for the next 20-30 years.
The problem with the whole system is there doesn’t appear to be enough high paying and stable jobs.
As far as going to a cheaper college, I think you identified the issue in your very own comment. Schools have different prestige levels. Yale, for example, is a high prestige school and not only are you paying for an education, you are also paying to connect to rich people. These connections can be worth a lot of money if they are used correctly. So going to a cheaper college also means less valuable connections.
qarbone@lemmy.world 2 weeks ago
Even beyond connections, just the sticker on a resumé that says “<prestige school name>” means you’re less likely to get shunted into the shitter with 95% of other applicants, if you don’t already have an “in” that cuts past the resumé stage.
humanspiral@lemmy.ca 2 weeks ago
UBI is a much better policy that “subsidizing loans just for college”. It helps all young people more than old, letting them choose a future that is best for them, while stiill making college an affordable choice. It makes college pricing more competitive, instead of trapping people too young and foolish into a path they can’t know enough to be a trap.
fluffykittycat@slrpnk.net 2 weeks ago
The problem is that employers are allowed to demand a college degree without having to shoulder any of the costs associated, so they are the real consumers of the degrees and the students are just the middle men who bear the cost. They get entitled especially during the sessions too demand degrees for jobs that don’t require them really and then that shifts education priorities for the whole country. If we regulated educational and certification requirements for jobs we can make this problem go away
13igTyme@lemmy.world 2 weeks ago
That’s one of only good things about Florida. The colleges on average are significantly cheaper than anywhere else, and Florida is still ranked number 1 on US News for college education when looking at every single college combined.
So basically get a good affordable education and then move the fuck out of Florida.
selokichtli@lemmy.ml 2 weeks ago
So, basically, as a regular (not rich) young person, you are aiming for a higher chance to connect with rich people in order to get a job/business that will probably get you enough money to cash on the “investment” made by getting an otherwise potentially for-life debt? Huh, rings a bell here. Thank you.
ickplant@lemmy.world 2 weeks ago
I went to a really cheap school. My master’s was 40k.
DarkSurferZA@lemmy.world 2 weeks ago
40k? In USD or in Warhammer? Cause that’s a shite ton of money for college.
What did you study btw?
Also, I am great full to live in a shit hole country right now given that bill
boneyards@lemmy.world 2 weeks ago
My bachelor was around 12k and if I did it faster it could have been cheaper. Wgu does it based on term not credit hour. The more courses you pass in a term the cheaper it is overall.
fluffykittycat@slrpnk.net 2 weeks ago
There are no such thing as cheaper schools. They got rid of that because they were angry college students protested the Vietnam War. So now getting an education means doing business with the worst loan shark you’ve ever heard of, legally protected from bankruptcy. The thing you have to understand about America is that everything is a scam. Like healthcare or housing or a child care and a bunch of other things I’m not even thinking about
vext01@lemmy.sdf.org 2 weeks ago
Same as in the UK I imagine. No university is affordable. Unless you are rich, you can’t go without a loan.
IMALlama@lemmy.world 2 weeks ago
Three things going on:
- Schools are expensive because the amount of public funding to universities has been slowly shrinking over the past 60 years. College in the US back in th 1960s was very cheap.
- Student loan amounts due did not change, but income based repayment options did which means people’s minimum payments went up
- Students in the US were told college is the only career path for the past 40-50 years. This obviously isn’t true and is why we have trades shortages. In many cases, that’s also all the advice people received. There was no coaching for what kind of degree to pursue or what field to angle for, so a number of people got expensive degrees that didn’t have good career prospects. To be completely honest, I lucked into choosing engineering because of my interests and the interests of my friends
TimewornTraveler@lemm.ee 2 weeks ago
there are no cheaper schools.
boneyards@lemmy.world 2 weeks ago
See my response to another comment about wgu
deathbird@mander.xyz 2 weeks ago
The appeal is that you get to go to college. “Why not go to a cheaper school?” “Why don’t you just get a job?” “Just buy a starter home.” "Why don’t they eat cake instead?’
El_Azulito@lemmy.world 2 weeks ago
$5000? …A month? A sudden rate increase 10 times the agreed amount? This smells like rage bait. We are not in post-World War I, Germany, yet.
MetaCubed@lemmy.world 2 weeks ago
I mean… There’s a full article explaining the cause for the increases, it’s not like there’s no reasoning provided.
Knock_Knock_Lemmy_In@lemmy.world 2 weeks ago
The article says the loan costs have increased and gives lots of examples.
It doesn’t explain why the increases have happened.
LordPassionFruit@lemm.ee 2 weeks ago
My partner was eligible for ~$750 per month repayments under a Biden era plan that Trump scrapped. They now have to pay ~$4300 per month. The headline isn’t far off.
shaggyb@lemmy.world 2 weeks ago
The fact that it’s bad doesn’t make it impossible.
PresidentCamacho@lemm.ee 2 weeks ago
No, but it sets off “potential bs” alarms. It doesn’t matter whether you agree or disagree with it, headlines tend to misrepresent for clicks, this is just the truth.
otarU1921@lemmy.world 2 weeks ago
My university costs increased over the years to almost double of what I paid on the first years.
LovableSidekick@lemmy.world 2 weeks ago
It says “Trump’s changes to income-driven repayment plans.”
I don’t get it - aren’t student loans fixed amounts, with monthly payments calculated to pay off the loan after a certain amount of time? How can they just raise the payments? How does that work?
Dettweiler42@lemmy.dbzer0.com 2 weeks ago
Most people are relying on income-driven repayment due to high interest rates and inflated tuition costs. IDR reduces your monthly payment to a fixed percentage of your income, but it does not scale the interest generated on the principle. The new SAVE plan was intended to scale the interest along with the monthly payment so your debt wouldn’t keep piling up due to being on IDR.
Trump is removing all forms of IDR and blocking applications to renew existing plans, which means everyone will be forced to pay their full monthly amount (which is based on a 10 yr payoff plan). A lot of newer student loans are close to ~$100K or more, so imagine trying to pay that off in 10 yrs in the current job market.
Prepare for mass defaults on loans. This is absolutely going to crash the economy, and will very likely be worse than the housing market crash in ~2009.
Rivalarrival@lemmy.today 2 weeks ago
This is absolutely going to crash the economy
That’s going to be offset by the coming war in Central America, ostensibly against the cartels that he is claiming are running the region.
LovableSidekick@lemmy.world 2 weeks ago
Thanks for the details - it sounds like you’re saying reduced payments under IDR are basically partial payments, which I assume would be applied only to the interest, thus making the debt last forever. Sounds like a plan bankers would come up with to create perpetual interest revenue. SAVE makes a lot more sense in terms of actually helping people - so no wonder Bonespurs & Company would block it. Can’t have Big Gubmint interfering with the freedom to indenture people.
IMALlama@lemmy.world 2 weeks ago
My mom qualified for, and received, federal student loan forgiveness. Yes, she had to make payments and work in a qualifying job for 10 years but due to her low income the payment amount was adjusted down.
Unless you’re in a position that qualifies for loan forgiveness, and you trust that forgiveness will be there when you qualify, income based payment rates are not a good idea. The total amount owed by my mom actually grew over the years because the amount she was paying was less than the amount of interest charged. For a bit when she was 8 years in she had a scare that she wouldn’t qualify and was shocked to find this out, despite saying “I’ve paid thousands!!!”.
Your average American isn’t very financially literat, or lives in the land of denial, which makes them easy to take advantage of.
Bytemeister@lemmy.world 2 weeks ago
This right here.
My partner graduated with a Master’s degree and about 40k in loans. After paying on an income driven plan for 10 years, they now only owe 45k!
Good time to point out that only about 30% of PSLF applications are accepted (so working for public sector for shit pay for 10 years has about a 30% chance of working) and (last I checked) only 37 (not %, but total) IDR plans have been forgiven.
You have been sold a lie about college. A degree will not get you a job. It will not get you 60k starting and double it in 4 years. Your field will not be hiring, and if it is, they’ll want a doctorate and 10 years experience for barely a livable wage. Cancel student debt. Raise minimum wage, cap maximum compensation, implement a progressive tax rate, and establish social services so people can retire and turn over their jobs and roles to the next generation.
deathbird@mander.xyz 2 weeks ago
They’ve basically removed all forgiveness options. Were you on year 9 of 10 working towards PSLF? Did you plan your life around it? Whelp. Enjoy the rug pull.
LovableSidekick@lemmy.world 2 weeks ago
Your average American isn’t very financially literat, or lives in the land of denial, which makes them easy to take advantage of.
I think everything that’s happened over the last century to desensitize and decondition the public’s survival instincts and common sense, has created a fertile, open field for con artists and hucksters to harvest. And now they’ve convinced America to put them in charge. What could go wrong?
yunxiaoli@sh.itjust.works 2 weeks ago
The US has income based repayment plans for all federally guaranteed loans. By removing or changing the limits in the formula, which is likely what Trump did, people that were paying $50/mo might have to pay market rates for their repayment which is unaffordable to pretty much everyone.
With ibr your interest tends to not increase despite having a much longer repayment time, allowing you to, you know, live and pay your student loans instead of having to choose in most cases.
SabinStargem@lemmy.today 2 weeks ago
fishy@lemmy.today 2 weeks ago
My only hope is that America slingshots back to Roosevelt era policies. Wild that this exact shit happened and what saved us? Oh social programs and high tax rates on the wealthy.
jjjalljs@ttrpg.network 2 weeks ago
I am reminded again of how we need to organized. A few people here or there defaulting on loans or refusing to pay won’t make a difference. A lot of people not paying, but not talking to each other, is kind of a wild card. But if you and fifty thousand of your closest friends went to DC together to tell your reps this is unacceptable, and if they want to sleep at night it will change, maybe we’d see change.
But organizing is really hard and I don’t know how to go about it effectively.
omnichronos@lemm.ee 2 weeks ago
I’m so glad that I got a surprise letter in January of 2024 stating that the Biden SAVE program had forgiven my entire $320,000 worth of student loans. I had originally borrowed $150k.
madcaesar@lemmy.world 2 weeks ago
Wait, was that all fucking interest???
Also for 150k you better be a fucking doctor, mate.
Bubbaonthebeach@lemmy.ca 2 weeks ago
Crashing the economy is the point, isn’t it. Every crash the richest few scoop up the assets and the peasants (most of Americans) settle for working for whatever scraps they can manage.
turnip@sh.itjust.works 2 weeks ago
What is the economy and the stock market except a perpetual bubble built on debt, as we lower rates and do QE to encourage people to borrow, in order to derive consumption via the wealth effect created by the cantillon effect?
The last crisis the housing bubble was created because housing was useful as a liquidity sponge, as we can gatekeep an inelastic good behind a wall of debt to create a wealth effect so people consumed more. This all seems to me by design, as we move from crisis to crisis.
Pilferjinx@lemmy.world 2 weeks ago
I’d replace collecting food stamps for collecting heads.
AfricanExpansionist@lemmy.ml 2 weeks ago
SLABs will tank, someone’s collateral gonna get busted
ramble81@lemm.ee 2 weeks ago
SLAB?
AfricanExpansionist@lemmy.ml 2 weeks ago
Student Loan Asset-Backed Securities
Basically, people can buy the rights to your loan payments. Maybe they get packaged together with many others’ debts.
SLABSs are quite profitable, obviously. During COVID years there was a freeze on debt payments and holders of SLABS started to feel the squeeze. SLABSs are such a guaranteed return that people/banks/hedge funds can use them as collateral for loans and stuff. So during COVID, SLABSs became a liability. Or so it’s been speculated
If people start defaulting on their debts, SLABSs could be centrally involved in a financial collapse, the first domino to start chain reaction of margin calls
DarkSpectrum@lemmy.world 2 weeks ago
Of course America has turned an education policy into a financial derivative.
LordCrom@lemmy.world 2 weeks ago
Crashing the stock market may be the plan here. Follow me on this …
Crashing the market and removing 20 to 30 percent of value.
Then at the low point invest heavily into the DOW.
Now support the market and get it back to previous levels.
Fucking rich fucks just made 30% in 1 to 2 years on that investment.
vfsh@lemmy.blahaj.zone 2 weeks ago
Hey now you’re forgetting that they’re also going short on everything and making money on the fucking way down too!
Philharmonic3@lemmy.world 2 weeks ago
Don’t pay. Debt strike.
Sgt_choke_n_stroke@lemmy.world 2 weeks ago
Can’t recall an education
tischbier@feddit.org 2 weeks ago
Quick and dirty numbers for those reading:
-
Overall debt grew by $93 billion in the last three months of 2024 – and about half of that increase was new credit card debt, according to the report.
-
Americans’ total credit card balances now stand at a record-high $1.21 trillion.
-
Americans hold nearly $1.7 trillion in auto loan debt.
-
Americans’ household debt – including credit cards, mortgages, auto loans and student loans - American household debt of $18.04 trillion (including credit cards, mortgages, auto loans and student loans)
-
Americans hold $1.62 trillion in student debt.
-
Missed federal student loan payments were not reported to credit bureaus between 2020Q2 and 2024Q3. Consequently, less than % of aggregate student debt was reported 90+ days delinquent or in default in 2024Q4. Missed federal student loan payments will likely begin appearing on reports beginning in 2025Q1.
Here’s the report: House Hold Debt and Credit: Q4 2024 (published 2025 by Federal Reserve Bank of New York)
-
SolidShake@lemmy.world 2 weeks ago
this story is actually insane.
shaggyb@lemmy.world 2 weeks ago
With no DOE employees to process defaults?
Nobody should be paying a red cent.
If your choice is draining your entire bank account to the point you can’t afford to live or suffering a credit score penalty, then the credit score should be sacrificed.
“but they can…”
Stop. Nothing they can do is worse than starving. Don’t pay them. Use your money for your own needs.
the_riviera_kid@lemmy.world 2 weeks ago
I wish more people understood no one can stop you if there is no one to stop you.
grue@lemmy.world 2 weeks ago
I wish Trump didn’t understand that.
fluffykittycat@slrpnk.net 2 weeks ago
The problem is they’re always has been. But that might not be true in 6 months time so stay alert
sp3tr4l@lemmy.zip 2 weeks ago
Try getting an apartment or renewing a lease with a truly shit credit score.
Oops, you don’t qualify anymore, anywhere, your options are now homelessness, much more expensive hopping between motels every 3 weeks, or live in your car, hope you’re still making those payments.
fluffykittycat@slrpnk.net 2 weeks ago
If this happens to too many people the economy will suffer. Eventually they’ll have to start ignoring credit scores. We’re rapidly reaching a point where the system can no longer compensate for the incompetencies and inequality and stuff will start breaking mechanically in ways that can’t be easily fixed or routed around
shaggyb@lemmy.world 2 weeks ago
Oh hey it’s the same corporate troll line again cool
infinitesunrise@slrpnk.net 2 weeks ago
I used to have apparently atrocious credit due to delaying payments on my student loans for years. But with proof of income it didn’t stop me from getting apartments in NYC. In the last place I asked athe broker what my credit score was and while he wasn’t at liberty to tell me he did say “Not good. But it’s all student debt related which we don’t consider relevant”. Still seems weird to me today but I guess landlords often don’t consider student debt to be a reflection of a tenant’s ability to pay rent. Probably because most people prioritize paying for shelter over paying for the classes in their past.
SolidShake@lemmy.world 2 weeks ago
well that isnt true. my last apartment was 0 credit checks. just pay and live.
fluffykittycat@slrpnk.net 2 weeks ago
I’ve been neglecting my payments for a long time since I literally just can’t afford it. I’ve been meaning to get around to doing an income-based plan or whatever but the more I see the less it seems worth my time to bother since not only will nothing happen good but they might not even be governed employees too make the bad things happen either. I’ve basically given up on having anything in my name financially but if the United States federal government disappears then I’m home free to start fresh and whatever new system comes after, hopefully we choose something good like anarchist communism