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Bill McBride — Goldman Sachs: "An Update on Student Loans: A Bigger Headwind but Still Not a Deal Breaker"
Translation: If student loan debt becomes too much of a drag, it's no biggie since almost all of it is held by the feds who can just eat it without imploding the economy.
Banks can get it off their books, but the students legally cannot without a change to current legislation - since federally secured loans CANNOT be discharged by declaring any kind of bankruptcy!
Right, but as GS observes, government can either forgive the debt or loosen the terms and would presumably do so if an implosion of student debt was seriously threatening the economy.
Not without a change in legislation. I don't think that the president can declare a unilateral blanket amnesty on this issue. See Student Loan Bankruptcy Exception
Matt, I don't think that it is the interest that is at stake, but the magnitude of the principal. The original law was pased when higher education was still heavily subsidized both federally as well as from state taxes.
It's a virtual debtor's prison for those individuals who signed on the dotted line.
As Uknown stated there is no relief through bankruptcy and in some cases even death is co-signers et al were involved.
At the macro level it's one result, but, at the micro level, if there is a lousy economy it really isn't going to help with the lives of those tagged to student loans.
The current Congress cut expenditures for the most basic of human needs, food-stamps and were proud to do it.
Right Tom... imo there is no way GOP Congress does very much this year to help the US economy...
Also as you posted, their base is more concerned with National Security than the economy.... so they will work to solidify the base and get some of the swing voters in the socio-economic justice cohort to come over in 2016 as the best the Dems can muster is a Liz Warren who is trying to get overpriced govt "loans" down to a market level of interest rates... LOL!
The Dems should probably just run Hillary in an effort to get out the female vote... but I dont know how much the left base is enamored with Hillary... so could be a high risk-reward strategy with her...
9 comments:
Banks can get it off their books, but the students legally cannot without a change to current legislation - since federally secured loans CANNOT be discharged by declaring any kind of bankruptcy!
Right, but as GS observes, government can either forgive the debt or loosen the terms and would presumably do so if an implosion of student debt was seriously threatening the economy.
Dont worry Liz Warren is on it and trying to get the rates down to prime plus 2%...
Not without a change in legislation. I don't think that the president can declare a unilateral blanket amnesty on this issue. See Student Loan Bankruptcy Exception
Matt,
I don't think that it is the interest that is at stake, but the magnitude of the principal. The original law was pased when higher education was still heavily subsidized both federally as well as from state taxes.
It's a virtual debtor's prison for those individuals who signed on the dotted line.
As Uknown stated there is no relief through bankruptcy and in some cases even death is co-signers et al were involved.
At the macro level it's one result, but, at the micro level, if there is a lousy economy it really isn't going to help with the lives of those tagged to student loans.
The current Congress cut expenditures for the most basic of human needs, food-stamps and were proud to do it.
The Numbers Are Staggering: U.S. Is 'World Leader' in Child Poverty
The chances that they would let a bunch of slacker students off the hook ....... is remote at best.
The chances that they would let a bunch of slacker students off the hook ....... is remote at best.
If it will cost Goldman, they will just tell the US government to do it.
"Nice economy you got there. It would be too bad if anything happened to it."
Politicians know that a bad economy is a death sentence in the next election.
Right Tom... imo there is no way GOP Congress does very much this year to help the US economy...
Also as you posted, their base is more concerned with National Security than the economy.... so they will work to solidify the base and get some of the swing voters in the socio-economic justice cohort to come over in 2016 as the best the Dems can muster is a Liz Warren who is trying to get overpriced govt "loans" down to a market level of interest rates... LOL!
The Dems should probably just run Hillary in an effort to get out the female vote... but I dont know how much the left base is enamored with Hillary... so could be a high risk-reward strategy with her...
rsp,
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