US CC and Household Debt At Record Levels

[mountainjogger]

Originally Posted by ts3

Y'all can consider yourselves lucky living across the pond.

Just days after the ECB announced initial interest rate hikes for later in the year as well as the end of their government bond purchases the spreads between German and Italian bonds had widened enough to require an emergency meeting this week.

This will end badly. Question is just how bad.

Dominos.

[shaunylw]

Originally Posted by Sephiroth

I’m just wondering when the student loan holiday will end.

Sounds like September. It’s frozen through august as of right now. But who knows, i imagine they postpone it again.


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[espanol]

Not all debt is created equal. CC debt is the absolute worst. It becomes a vicious cycle and prompts poor financial habits. Use the card, reap the rewards, pay it off in full each month and you’re good-to-go.

Student loans, if done correctly, aren’t terrible, as they represent an investment in one’s self and can amplify future earnings.

Mortgage debt is the best form. Tax deductible, can be cash-flowing. Debt aversion is always a sound financial move, but banks were willing to give me sub-3% loans on assets which I now rent for positive cash-flow. It’ll be the banks’ problem long term, not mine

[daveathall]

Originally Posted by TheVTCGuy

The good news: I have no CC debt and no bills other then standard living expenses.

The bad news: I don’t have any money either.

We could be brothers, my friend.

[enjoythemusic]

Originally Posted by espanol

Student loans, if done correctly, aren’t terrible, as they represent an investment in one’s self and can amplify future earnings.

It can, if done correctly.

Alas, the programmed education system and 'value' of a degree isn't really that much nowadays for most people, and so i'd say many are better off going to trade school. jmho


Within the USA, the government need to change the law so student loans can be wiped away in bankruptcy just like mortgages, credit cards, and other unsecured debt. This would make pricing far more competitive, with schools needing to educate for true performance / value.

[espanol]

Originally Posted by enjoythemusic

It can, if done correctly.

Alas, the programmed education system and 'value' of a degree isn't really that much nowadays for most people, and so i'd say many are better off going to trade school. jmho .

Agree with trade school, but that wasn’t my point. My point was to emphasize the importance of investing in one’s self. As someone that jumped socioeconomic classes due to a series of degrees, my quality of life likely wouldn’t be the same without them. The cost of my degrees have paid off in spades, so again, taking on student debt, if done correctly, can pay off big time

[enjoythemusic]

^^^ excellent point.

Also solidifies my feeling towards the ability to write off student loan debt, because the financial institution loaning the funds needs to do so responsibly, with normal risk attached as with any other unsecured loan. Passing a new student loan law, and making it retroactive while also eliminating any gov guarantee, is best for the system and public alike.

[Chester01]

I mean this logically follows as where are people supposed to get the money. Raises are up like 4-5 percent and inflation 10. People have been making less than inflation since the 1980’s and this will continue that trend and credit is really the only answer for most folks. The reality is when inflation comes back down, the prices will stay 1-2 percent higher but there never coming down, that never happens. Every economic shock we have only serves to create the new guilded age. There is only so long that they can appease the masses or distract them with media before they decide enough is enough. As always the top 10 percent come out ahead and the rest fall further back. Piketty’s ideas continue to ring quite true.

[austinp]

Originally Posted by enjoythemusic

It can, if done correctly.

Alas, the programmed education system and 'value' of a degree isn't really that much nowadays for most people, and so i'd say many are better off going to trade school. jmho


Within the USA, the government need to change the law so student loans can be wiped away in bankruptcy just like mortgages, credit cards, and other unsecured debt. This would make pricing far more competitive, with schools needing to educate for true performance / value.

I’ve always found it odd that people rarely understand how expensive it can be for people starting out in the trades. Buying tools needed can be as expensive as college in some respects.


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[DLRIDES]

We’ve been here before, most people never learn. I have no sympathy.

[pickettt]

Originally Posted by DLRIDES

We’ve been here before, most people never learn. I have no sympathy.

I disagree, agree, and disagree, respectively. We’ve seen this climate before, but the way out won’t be the same this time, I guarantee it. But yeah, I don’t know what to say about people’s inability to plan. Lastly, no matter the reason, I always sympathize with hungry people (and it’s gonna get bad).

[espanol]

Originally Posted by pickettt

But yeah, I don’t know what to say about people’s inability to plan. Lastly, no matter the reason, I always sympathize with hungry people (and it’s gonna get bad).

Totally agree. It’s already getting pretty ugly in Eastern Africa. Hard to see it as capital cities are somewhat insulated.

[SDGT3]

Originally Posted by enjoythemusic

It can, if done correctly.

Alas, the programmed education system and 'value' of a degree isn't really that much nowadays for most people, and so i'd say many are better off going to trade school. jmho


Within the USA, the government need to change the law so student loans can be wiped away in bankruptcy just like mortgages, credit cards, and other unsecured debt. This would make pricing far more competitive, with schools needing to educate for true performance / value.

Agree on the value of a degree and the need for people to go to trade schools. Not everyone is meant to go to university and the fact high schools try to put a round peg in a square hole funneling everyone toward a 4 year university is a disservice.

Disagree on being able to wipe out loans in BK. The fact $10K is being "forgiven" by Biden basically means everyone who is working and paying taxes including the guy/gal making minimum wage at a fast food restaurant, subsidizes the person who got a useless degree and is unwilling or unable to pay it back. Too many stories of 18 year olds getting tens of thousands of dollars and going to Spring Break in Mexico or using the funds for anything other than schooling to say nothing about the people who borrowed tens of thousands and didn't finish university.

[enjoythemusic]

Student loan.... My reasoning is that without gov guaranteed backing and the ability to write it off during backruptsy means banks will be more careful who gets these loans. There's a mindset that the insane rise in cost of college is partly due to the ease of getting student loans.

[SDGT3]

Originally Posted by enjoythemusic

Student loan.... My reasoning is that without gov guaranteed backing and the ability to write it off during backruptsy means banks will be more careful who gets these loans. There's a mindset that the insane rise in cost of college is partly due to the ease of getting student loans.

Perhaps someone with personal knowledge can correct both of us, but my understanding is that student loans were primarily given by private banks and that there were programs in place for government backed loans dating back to 1965. Sometime during the Obama Administration the loans became mostly Federal govt loans and that private banks were shut out which effectively eliminated the more stringent underwriting process and essencially anyone and everyone could now get a loan. To your point, university tuition costs started to skyrocket after this change as there was effectively unlimited easy money coming in (sounds familiar doesn't it).

[Star Ferry]

Originally Posted by SDGT3

Perhaps someone with personal knowledge can correct both of us, but my understanding is that student loans were primarily given by private banks and that there were programs in place for government backed loans dating back to 1965. Sometime during the Obama Administration the loans became mostly Federal govt loans and that private banks were shut out which effectively eliminated the more stringent underwriting process and essencially anyone and everyone could now get a loan. To your point, university tuition costs started to skyrocket after this change as there was effectively unlimited easy money coming in (sounds familiar doesn't it).

Correct, the government makes these loans. Borrowers used to be capped at $220,000 total, but now the cap is "Cost of Attendance" -- which is whatever the educational institution says it is. At many medical/business/law/dental schools, this figure exceeds $100,000 per year. This can be an issue at schools like NYU and Columbia, since the listed cost of attendance may not cover all living costs, in which case the borrower can try the private market for additional funds.

The first roughly $20K per year from the feds is no questions asked, and for medical/dental I believe this amount doubles to $40K. Any additional funds, up to cost of attendance, are subject to a credit check, although I've heard the standards for approval are extremely low.

It's after graduation that many of these loans are refinanced via private lenders. At that point, market dynamics are back in play, and some borrowers will get better rates than others. Of course, the near-impossibility of of discharge in bankruptcy helps keep those rates lower than they'd otherwise be.

[mountainjogger]

Originally Posted by enjoythemusic

It can, if done correctly.

Alas, the programmed education system and 'value' of a degree isn't really that much nowadays for most people, and so i'd say many are better off going to trade school. jmho


Within the USA, the government need to change the law so student loans can be wiped away in bankruptcy just like mortgages, credit cards, and other unsecured debt. This would make pricing far more competitive, with schools needing to educate for true performance / value.

Agree with this Steven.

Were I king for a day, I would also require educational institutions to guaranty a portion of the debt so they have some skin in the game. I think that might lead to a lot of changes.

[Vince M.]

Lots has been covered here but a large majority are going to get crushed this go around. This is something entirely different than anything in the past.

[Vince M.]

.......

Drinks flow
People forget
That big wheel spins, the hair thins
People forget
Forget they're hiding
The news slows
People forget
Their shares crash, hopes are dashed
People forget
Forget they're hiding
Its an eminence front

[pickettt]

Originally Posted by Vince M.

Lots has been covered here but a large majority are going to get crushed this go around. This is something entirely different than anything in the past.

Can I get a witness?!

[enjoythemusic]

Originally Posted by pickettt

can i get a witness?!

download.jpeg
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Decided to invest in MB&F futures. You can't just 'print' timepieces.

[Stud Screw]

I think...I've read...I've heard.

[Star Ferry]

Originally Posted by Stud Screw

I think...I've read...I've heard.

What exactly does this mean? That everyone else was blathering, and you’re above it all? I don’t think cryptic posts like this are especially constructive.

[favre12rodgers]

Originally Posted by Sephiroth

I’m just wondering when the student loan holiday will end.

I mean the higher interest rates now almost guarantees it won't anytime soon. Can you imagine people having to start loan payments again with inflation where it is?

The whole educational loan thing is a joke. I probably have $85k in school debt right now (I went to law school) but I also graduated 13 years ago.

The best thing they could do for borrowers is forgive the entire 24-30 months of payments they have paused due to COVID (in other words, reduce 24-30 months of payments from the loan amount still owed) or take all interest off these loans for good and let borrowers pay back the principal only. I feel these are both fair resolutions. Then again, Biden won't even forgive $10k in student loans let alone the $50k he promised everyone. Then again (take two), he won't be in office anymore in a couple of years.

[SDGT3]

Originally Posted by favre12rodgers

I mean the higher interest rates now almost guarantees it won't anytime soon. Can you imagine people having to start loan payments again with inflation where it is?

The whole educational loan thing is a joke. I probably have $85k in school debt right now (I went to law school) but I also graduated 13 years ago.

The best thing they could do for borrowers is forgive the entire 24-30 months of payments they have paused due to COVID (in other words, reduce 24-30 months of payments from the loan amount still owed) or take all interest off these loans for good and let borrowers pay back the principal only. I feel these are both fair resolutions. Then again, Biden won't even forgive $10k in student loans let alone the $50k he promised everyone. Then again (take two), he won't be in office anymore in a couple of years.

Why should a loan you took out voluntarily to advance your career be forgiven?

[Dan Pierce]

I have no problem forgiving a certain amount of college debt in return for community service. Could be a win/ win for everyone.
dP

[brandrea]

Originally Posted by Dan Pierce

I have no problem forgiving a certain amount of college debt in return for community service. Could be a win/ win for everyone.
dP

Agreed Dan, I can’t think of a negative in this line of approach.

[JWillard]

What do you say for all those who took student loans and paid them off like a responsible person. College tuition only became crazy when the government gave student loans out like candy. Tax payers will have to pick the tab up.

[JWillard]

Originally Posted by brandrea

Agreed Dan, I can’t think of a negative in this line of approach.

Depending on the career and field some student loans are already forgiven if you work x amount of time in the field

[brandrea]

Originally Posted by JWillard

What do you say for all those who took student loans and paid them off like a responsible person. College tuition only became crazy when the government gave student loans out like candy. Tax payers will have to pick the tab up.

I’d take a stab at answering that, but then I’d be accused of being a socialist-lefto-pinky from Canada

Sorry to the mods or anyone who didn’t get the joke.