Armed Polite Society
Main Forums => Politics => Topic started by: brimic on May 25, 2018, 04:18:01 PM
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You might as well take a look, you are all paying for it...
https://www.wsj.com/articles/mike-meru-has-1-million-in-student-loans-how-did-that-happen-1527252975
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... Orthodontist has $1M+ in debt that grows by $130 per day.
(since it's behind the paywall, I'm not paying for more than that.)
That was obviously a number of monumentally bad choices by Mr. sorry, DR. Meru (you paid enough for the title, I guess you deserve it.)
And, not dischargeable in bankruptcy court, either. He's now enslaved for the rest of his life.
Now, personally, I think the colleges themselves ought to be held at least partially accountable for this situation.
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Related non-pay article: https://www.marketwatch.com/story/he-ran-up-a-million-dollars-in-student-loan-debt-en-route-to-becoming-an-orthodontist-2018-05-25
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The guy doesn't really look like *expletive deleted*ing moron, I guess looks can be deceiving.
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Getting him to pay that off is going to be like pulling teeth!
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You would think they would put a cap on the loan amount for an individual. But they still put up the veneer that college will pay for itself. No current politician seems to want to get to the root of the problem. I doubt he'll ever extract himself from this situation.
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Now, personally, I think the colleges themselves ought to be held at least partially accountable for this situation.
Colleges and lenders; no one in their right mind would expect an individual in any normal job (by which I mean pretty much anything people go to school to learn to do) to be able to pay off debt that's pulling >$100/day interest from the first day on the job. Even wildly successful doctors and lawyers extremely rarely get that successful to start making that kind of cash before they have a decade or more of experience.
Setting realistic expectations and schedules would be helpful; I do know a dentist who managed to graduate with only 4 figures of student loan debt by working her ass off all the way through, but her biggest problem was finding anything better than minimum wage that would work with the class schedules. (Of course, she immediately picked up another 6-7 figures of loans starting an office, but she did the research, found an underserved area with a dentist just nearing retirement, and found that the other local dentist was eyeing the soon-to-retire one's office in lieu of a complete rework of his own, so she was back in the black, employing two other full dentists and several dental assistants and hygienists inside 10 years...all in a town that most people wouldn't think needs two dentists, and owing largely to picking up more patients than she could handle from the retiring one and all the people who needed stuff done while the other was moving.)
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The student loan bubble is going to be disastrous when it bursts...
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I don't think so. 25% of loans now are in default and many more in forbearance. That's enough people to form a constituency for politicians to appeal to and promise to void the debts but they've got to be in office to do that!
So Big G will pick up the tab an just pile it into the debt we already have. And as long as G can pay the interest and pay off the maturing Treasuries it won't cause much of a problem.
Of course many of the people that faithfully paid off their school loans will be righteously angry that they didn't get such a break. We will have to wait to see whether this turns into something politically potent.
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Now, personally, I think the colleges themselves ought to be held at least partially accountable for this situation.
Nonsense. There is no way he racked up $1m in just school debt. I bet he put all of his expenses into student loans. They guy is an idiot.
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“Mr. Meru then entered into a government-sponsored repayment plan based on income. He agreed to monthly payments at 10% of his discretionary income, defined as adjusted gross income minus 150% of the poverty level. Any balance remaining after 25 years is forgiven, effectively covered by taxpayers. The forgiven amount is then taxed as ordinary income.
Without the government help, Mr. Meru’s monthly payment would be $10,541.91, according to an email from his loan servicer. His current monthly income, after taxes, is roughly $13,333.”
Also:
“The government repayment plan affords the Meru family a comfortable life. Their home is on a mountain with panoramic views of the snow-capped peaks surrounding Salt Lake City. They take vacations, including a recent trip to Havana. He drives a used Tesla.”
Good for him that he’s allowed a ‘comfortable lifestyle” while people like me have busted their asses all their lives to get ahead and aren’t subsidized by welfare into ‘comfortable lifestyle’ that allows for Teslas and vacations in Cuba.
“The couple bought a home in Draper in 2012, using a $400,000 mortgage that Mrs. Meru took out in her name. She used an inheritance from her grandmother for the down payment. Her mother cosigned the loan.“
Holy *expletive deleted*ck.
“Since refinancing his debt with the federal government in 2015, lowering the rate to 7.25%, Mr. Meru’s balance has grown by $148,948. It will keep growing through the 25-year life of the repayment plan until it reaches $2 million. That sum will be forgiven and, at current tax rates, could cost Mr. Meru more than $700,000 in income tax payments.“
Sounds good, right?
Well if he puts away around $2000/month of that at a modest interest rate, he’ll easily be able to pay that off in 25 years, with money to spare.
I have zero sympathy for this *expletive deleted*bag.
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IMHO, the student loan program is possibly the worst thing that has ever happened to higher education. First, it has led to a proliferation of for-profit, low grade "degree factory" institutions that may or may not even maintain accreditation, provide a marginal education at best, and accept just about any applicant who can qualify for the loan program.
Not-for-profit (supposedly) colleges are just as bad. With the student loan program out there, they have zero incentive to control costs ... so they don't. They pay tenured professors and administrators ridiculously high salaries because they know they can just jack up the tuition to pay for it. For example:
Yale University: Tuition and standard fees are $69,430 per year. Tack on "optional" fees such as student health coverage, and add another $2,457, for a total of $71,887. The U.S. median income per household for 2016 was $57,617. That's not per person, that's median household income, and a LOT of households today are two-income families. University should not cost more than a normal family's entire annual income.
University of Michigan is more affordable -- if you live in Michigan. In-state total cost per year is $29,526, which doesn't seem unreasonable. But the cost for out-of-state students jumps to $62,176.
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Do those costs include room and board with meal plans? ...or just the tuition and fees?
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Colleges and lenders; no one in their right mind would expect an individual in any normal job (by which I mean pretty much anything people go to school to learn to do) to be able to pay off debt that's pulling >$100/day interest from the first day on the job. Even wildly successful doctors and lawyers extremely rarely get that successful to start making that kind of cash before they have a decade or more of experience.
Makes you think the people selling these loans have no expectation of them being paid off. However, I am sure they got their commission and their boss didn't fire them.
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The guy doesn't really look like *expletive deleted*ing moron, I guess looks can be deceiving.
I say this exact thing to myself while in traffic, every day . . . .
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I say this exact thing to myself while in traffic, every day . . . .
Don't be so hard on yourself.
;) =D
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Zero sympathy from me. This smacks of the crap my ex-wife would pull, like coming home in a shiny new Toyota Solara even though she was unemployed at the time. They agreed to loan her the money so she must be able to afford it! :facepalm:
My Google Fu shows dentists typically spend $200,000 - $300,000 on their education. $400k for some of the more advanced specializations. A million bucks? Not in this universe, or at least not unless you're a complete moron. I'd put a fair wager on more than half that amount being wasted on non-essentials (a nice way of saying he pissed it away on partying, trips, bloated "living expenses" and other stupid crap). He willingly signed on the dotted line. His choice, his problem.
[rant on]
I also don't lean towards the "student loans are too easy to get" mindset. Yes, they have very loose qualification guidelines but it still comes down to borrowing against a potential return. Adult enough to borrow the money equals adult enough to consider the risk and properly service the debt. Borrowing $60k against an engineering degree, likely a sound investment. Borrowing $100k against a Women's and Gender Studies degree, probably an idiot. Unable to exercise some personal restraint or use a calculator? That's not the lender being "easy", that's you being stupid.
[/rant off]
Brad
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Makes you think the people selling these loans have no expectation of them being paid off. However, I am sure they got their commission and their boss didn't fire them.
Some school loans are generally guaranteed by Uncle Sam (which is part of why they're not dischargeable in a bankruptcy), so they get paid one way or the other. It's just a matter of who picks up the tab...
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[rant on]
I also don't lean towards the "student loans are too easy to get" mindset. Yes, they have very loose qualification guidelines but it still comes down to borrowing against a potential return. Adult enough to borrow the money equals adult enough to consider the risk and properly service the debt. Borrowing $60k against an engineering degree, likely a sound investment. Borrowing $100k against a Women's and Gender Studies degree, probably an idiot. Unable to exercise some personal restraint or use a calculator? That's not the lender being "easy", that's you being stupid.
[/rant off]
I need to borrow however much you've got in savings and any other reasonably liquid assets. Don't worry; you'll have the moral high ground of knowing it's in no way your fault for loaning me more than I have the means to repay.
(Actually, the problem there is that if it turned out to be enough, I'd use it to go back and finish a marketable degree, then I might well be able to repay it.)
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I think if Uncle Sam wasn't picking up the tab, the lenders might be a little more careful who they are loaning to and for what.
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I think if Uncle Sam wasn't picking up the tab, the lenders might be a little more careful who they are loaning to and for what.
Yes. Plus college tuition levels would be kept in check if we did away with the nonsense of 'everyone deserves a college degree.'
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I need to borrow however much you've got in savings and any other reasonably liquid assets. Don't worry; you'll have the moral high ground of knowing it's in no way your fault for loaning me more than I have the means to repay.
In which case you would still be an idiot for taking on more debt than you can reasonably service.
That's the crux of my argument. Everyone wants to pile on the lenders for "making it too easy". I don't tip to that mindset because it has an inherent disregard for the economic responsibility and accountability of borrowers. This general shifting of responsibility from the direct to the indirect which is at the root of many societal issues. Don't blame the person who drank so much they passed out and ran over a kid. Instead, blame the brewery. Don't blame the person who robbed a store and killed the clerk. Instead, blame the gun manufacturer and NRA. It's become a much larger issue of eliminating personal responsibility and trying to lay primary blame on a third-party simply because of association. I don't play that game.
Brad
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I don't mean to let the borrower off the hook. I think both of them should reap what they sow. I just assume some people are going to be idiots and think they are getting away with something. The lenders should be more responsible, but they realize they will get paid eventually (by the govt if not the borrower) so why worry about how much it is.
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I'm going easy on the lenders because they are lending to the letter of the law they are federally mandated to follow. It's the same thing that happened during the mortgage mess of 2006-2009. Sure, some lenders are taking advantage of loose regulations but the majority are simply following the Student Loan Lending Guidelines set forth by the fed.gov. If things are going to change they will need to change at the guarantor (government) level, not the lender level.
Brad
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13k per MONTH?
F*ck me...this is the kind of *expletive deleted*it that turns nice little taxpayers into sociopaths
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I'm going easy on the lenders because they are lending to the letter of the law they are federally mandated to follow. It's the same thing that happened during the mortgage mess of 2006-2009. Sure, some lenders are taking advantage of loose regulations but the majority are simply following the Student Loan Lending Guidelines set forth by the fed.gov. If things are going to change they will need to change at the guarantor (government) level, not the lender level.
Brad
If the fed.gov stopped guaranteeing student loans, I suspect that the lending practices vis-Ã -vis "being able to pay it back" would tighten up by the end of that business day.
The lenders are being perfectly reasonable with their lend/risk calculations. There is effectively no risk to them. Why wouldn't they lend?
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If the fed.gov stopped guaranteeing student loans, I suspect that the lending practices vis-Ã -vis "being able to pay it back" would tighten up by the end of that business day.
The lenders are being perfectly reasonable with their lend/risk calculations. There is effectively no risk to them. Why wouldn't they lend?
Exactly.
Brad
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I think if Uncle Sam wasn't picking up the tab, the lenders might be a little more careful who they are loaning to and for what.
I'm not against all Federal backing, but they should set hard limits both on how much they will guarantee for a given degree type and what grades must be maintained to continue eligibility. If someone's acing their way through engineering while working full time, I have no problem with them being eligible for a lot more loan (and grant) money to let them cut back to part time work as the classes get harder than the one who's constantly barely above academic suspension level but wants to borrow their way through a PhD in pop culture studies without having worked a day in their life.
Of course, guarantee level becomes less and less important with both higher grades and more marketable degrees; the lender should be willing to risk some beyond the guaranteed amount on the hypothetical engineering prodigy with a decent work ethic, who, barring an untimely death or TBI, will almost certainly be able to pay it back easily, and nothing beyond it for the professional welfare queen.
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I think it would be best to just get rid of the government grant and loan money completely for a while. Schools are using it as an excuse to raise tuition and other costs because demand is artificially inflated and students are incentivised to go to the more expensive schools instead of starting with junior college or going to a less expensive school to begin with.
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I'm not against all Federal backing, but they should set hard limits both on how much they will guarantee for a given degree type and what grades must be maintained to continue eligibility. If someone's acing their way through engineering while working full time, I have no problem with them being eligible for a lot more loan (and grant) money to let them cut back to part time work as the classes get harder than the one who's constantly barely above academic suspension level but wants to borrow their way through a PhD in pop culture studies without having worked a day in their life.
Of course, guarantee level becomes less and less important with both higher grades and more marketable degrees; the lender should be willing to risk some beyond the guaranteed amount on the hypothetical engineering prodigy with a decent work ethic, who, barring an untimely death or TBI, will almost certainly be able to pay it back easily, and nothing beyond it for the professional welfare queen.
^
[ahem]
That disproportionately impacts students of color and the poor, while favoring white, male, STEM students.
Why so racist?
[/Dr. Pop Culture Studies voice]
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Having just finished paying off my law school loans in 2016, I'll throw this in the mix. I took out the least I could. Covered tuition, books, and $400 a month for rent. The school financial aid advisor encouraged me to take more for living expenses, clothing for intern ships and interviews, etc. Actually discouraged non-law related work as it would interfere with studies and student life. I knew students who did that, and also took loans for a new car, Bar exam review courses, nice watches, etc. Once upon a time, a majority of law students could walk into a job making high five to six figures. The prevailing advice was to get out buy a house, use an equity loan to pay off the debts and take the tax break. If the theories haven't changed (and young lawyers are saying frightening things), its no wonder debt is so crazy.
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I think it would be best to just get rid of the government grant and loan money completely for a while. Schools are using it as an excuse to raise tuition and other costs because demand is artificially inflated and students are incentivised to go to the more expensive schools instead of starting with junior college or going to a less expensive school to begin with.
Agreed.
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Well, at least he has a relatively useful degree to show for his $1 million debt.
I was fully expecting to see a weepy story about some idiot who ran up that debt while studying the ethnography of ancient lesbionic basket weaving.
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One of the best things that could happen to higher education would be for the federal gov to stop being involved in anyway with grants and loans for higher education (GI bill potentially excepted).
Tuition would drop like a rock and stupid, lazy students everywhere would abandon the campuses.
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One of the best things that could happen to higher education would be for the federal gov to stop being involved in anyway with grants and loans for higher education (GI bill potentially excepted).
Tuition would drop like a rock and stupid, lazy students everywhere would abandon the campuses.
But then what would become of the stupid, lazy professors and faculty? The Horror!
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One of the best things that could happen to higher education would be for the federal gov to stop being involved in anyway with grants and loans for higher education (GI bill potentially excepted).
Tuition would drop like a rock and stupid, lazy students everywhere would abandon the campuses.
Keep the GI Bill. I've seen a whole lot of vets put that education to good use. It's a hell of an option for someone who wants to go to college but can't afford it at age 18-20 years old.
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Well, at least he has a relatively useful degree to show for his $1 million debt.
I was fully expecting to see a weepy story about some idiot who ran up that debt while studying the ethnography of ancient lesbionic basket weaving.
That organic ancient lesbionic basket weaving you pastey cis *expletive deleted*it lord.
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That's MR. pastey cis *expletive deleted*it lord to you, pal!
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Keep the GI Bill. I've seen a whole lot of vets put that education to good use. It's a hell of an option for someone who wants to go to college but can't afford it at age 18-20 years old.
I had not imagined that GI benefits would be rolled in with govt backed student loans and grants. The various GI benefits are separate and part of the benefit of signing your life over to the military for a period of time.
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But then what would become of the stupid, lazy professors and faculty? The Horror!
Well, that IS a problem! =D