2016 Postmortem
Related: About this forumIt's pretty scary that Bernie can't distinguish between secured and unsecured loans
Last edited Mon Dec 28, 2015, 05:27 PM - Edit history (2)
Bernie's recent tweet:
This is a profoundly uninformed statement and it's pretty scary when you realize it's coming from a presidential candidate.
The reason why homeowners can refinance at lower interest rates is because the loans are secured by collateral (the home). This means less risk to the lender and they will therefore charge lower interest rates.
Student loans, on the other hand, are unsecured loans which means they aren't backed by collateral. Lenders cannot recover assets in case of default. This means more risk to the lender and they will therefore charge higher interest rates for unsecured loans.
Bernie really needs to educate himself.
---------
Edit:
I see DUers in this thread seem to think all student loans are secured. They are as uninformed as Bernie.
Secured loans are are backed by tangible assets such as a home or a car. The vast majority of student loans aren't backed by assets and they are therefore unsecured. A simple Google search of "secured loan" will reveal this.
SMH.
SoLeftIAmRight
(4,883 posts)???
enid602
(8,652 posts)Well, to be honest Jane is the expert on loans in the Sanders family.
Ed Suspicious
(8,879 posts)Gregorian
(23,867 posts)Am I doing this right? It was kilts wasn't it? Am I in the wrong thread?
JackInGreen
(2,975 posts)It's washed, I promise.
Gregorian
(23,867 posts)ebayfool
(3,411 posts)Nitram
(22,877 posts)Dude, your spin is making me dizzy.
passiveporcupine
(8,175 posts)Way to show you don't even GET IT! Jeeze Louise!
It will be a run ride from now on...that is for sure.
randys1
(16,286 posts)Like payday loan companies, education debt is outrageous and we simply should no longer tolerate it being done to us.
How have we become so fractured that good Democrats and liberals like yourself are taking these kind of shots at Bernie, someone we all desperately NEED if we want to win this election ESPECIALLY if he is NOT the nominee.
1StrongBlackMan
(31,849 posts)he's just using facially simplistic language to make that point.
DisgustipatedinCA
(12,530 posts)If you meant to trot out facilely as the three-dollar word you wanted to use, it might pay next time to have some idea of what you're talking about. Clueless pedantry. What a combination.
1StrongBlackMan
(31,849 posts)on a tablet.
Perhaps, I should follow you around a word Nazi you ... that could be fun!
SusanCalvin
(6,592 posts)appalachiablue
(41,171 posts)for God's sake. Bean counting and blind to the big picture, a major miss-
randys1
(16,286 posts)vicious attack of HILLARY here on DU for months now, and some folks here are so pissed about it that they are going to take cheap shots at Bernie as retaliation.
Understandable, but disappointing, and at the same time I really cant blame them.
At the end of the day when Hillary is attacked here ALL day long, then Bernie gets attacked, the RIGHT wins.
appalachiablue
(41,171 posts)to try to portray Bernie as a financial naif, not. All part of the continual and devouring partisanship circus that comes with the turf, no matter how self destructive. Sheesh..
treestar
(82,383 posts)Lower cost colleges should spring up according to the laws of capitalism.
ucrdem
(15,512 posts)When you get down to it the refi deals were never really that good, at least in my experience.
NCTraveler
(30,481 posts)Huge benefit to some, damaging to others, and a wash with some. Really individual.
1StrongBlackMan
(31,849 posts)zero in fees (waived when we asked and said we were going to walk away), $350/month in longer payments (that we continue to pay at the higher rate) ... so, while the clock re-started, we will have it paid off 8 years before (and $1,000s less than) the original note was scheduled to be paid off.
Adrahil
(13,340 posts)Cut the rate from 6% to 2 7/8. Cut 7 years off the payment (transition to a 15 from a 30) and my
Payment stayed almost the same. I'm gonna save over $100,000 dollars.
NCTraveler
(30,481 posts)Loudestlib
(980 posts)aikoaiko
(34,183 posts)Did you ever wonder why Student Loans are sometimes called Guaranteed Student Loans? Talk about secured loans.
It's pretty scary the HRC supporters don't even understand student loans.
You might want to do some reading: http://www.collegescholarships.org/loans/guaranteed.htm
Cali_Democrat
(30,439 posts)He simply mentioned refinancing existing student debt vs refinancing a home.
A good example of why presidential candidates shouldn't be tweeting economic policy.
eggplant
(3,913 posts)Nobody who has student loan debt would misunderstand this.
Do you honestly think that refinanced student loans convey a higher risk to the lender? If the person intended to default, they wouldn't bother with the refi.
And since student loans survive bankruptcy, you are stuck with this debt essentially until you pay it off. Or die.
Human101948
(3,457 posts)banks don't even want to foreclose because they accepted garbage for security.
You are shameful in supporting a shameful system designed to make students into lifelong debt slaves.
Plucketeer
(12,882 posts)where they sit a hundred simians down at typewriters (OK, keyboards) - and let them tap away just to see what coherent thing they might - by chance - produce. If there's hope for their efforts, there's a chance for higher life forms to come up with a contention that makes sense here. Good luck!
anigbrowl
(13,889 posts)Sorry, but it just isn't. I think the fact that student loans are non-dischargeable in bankruptcy is a disgrace, as is the fact taht tuition costs so much and a variety of other education-funding issues - but that still doesn't make them secured. That word has a specific legal meaning that's not subject to reinterpretation by you or me.
Eric J in MN
(35,619 posts)She introduced an amendment in March for people to re-finance their student loans at 3.9%. The Republicans blocked it.
She said, "Millions of borrowers are still stuck paying interest rates at 6 percent, 8 percent, 10 percent and even higher."
http://thehill.com/blogs/floor-action/senate/236918-republicans-block-warrens-student-loan-amendment
Thinkingabout
(30,058 posts)Republications out of office.
Enrique
(27,461 posts)they think that everything is 100% pure free market, the government should play no role in education, or anything else.
(By the way, this post is just a parody of the over-the-top disingenuous straw man style shown in the OP.)
MohRokTah
(15,429 posts)Gore1FL
(21,151 posts)Gore1FL
(21,151 posts)Gore1FL
(21,151 posts)Gore1FL
(21,151 posts)DisgustipatedinCA
(12,530 posts)Next question.
MohRokTah
(15,429 posts)DisgustipatedinCA
(12,530 posts)It really doesn't qualify as much of an argument.
Gore1FL
(21,151 posts)MohRokTah
(15,429 posts)Cha
(297,655 posts)MohRokTah
(15,429 posts)Gore1FL
(21,151 posts)Cha
(297,655 posts)didn't get their way then yes I don't want that.
I mean because you celebrate the banning of a DUer.
You can debate all you whether or not the ban was justified. Celebrating it is what assholes do.
Cha
(297,655 posts)follow the DU rules.
Gore1FL
(21,151 posts)This isn't about Skinner. This is about you being a grave dancer.
Grave dancing makes DU suck. You should be ashamed.
Cha
(297,655 posts)Gore1FL
(21,151 posts)but if it makes you feel good about yourself, then you should. Self-esteem is important, and I can see you don't earn a lot of it.
Cha
(297,655 posts)Gore1FL
(21,151 posts)Cha
(297,655 posts)If you would like a long record of you making DU suck with more an more posts, I am happy to help you expose yourself as a net negative to DU.
Kicking thread to expose Cha for what it really is.
Gore1FL
(21,151 posts)I will admit at least it makes your posts more interesting when you only use other people's work.
Gore1FL
(21,151 posts)MohRokTah
(15,429 posts)Gore1FL
(21,151 posts)Major Nikon
(36,827 posts)On Tue Dec 29, 2015, 09:30 PM an alert was sent on the following post:
Like flies to shit, I suspect. n/t
http://www.democraticunderground.com/?com=view_post&forum=1251&pid=958201
REASON FOR ALERT
This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate.
ALERTER'S COMMENTS
Calling a fellow DUer "shit" is disruptive, hurtful, rude, insensitive, over-the-top, and inappropriate.
You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Tue Dec 29, 2015, 09:38 PM, and the Jury voted 2-5 to LEAVE IT.
Juror #1 voted to LEAVE IT ALONE
Explanation: Quit your arguing, or grow a thicker skin, but quit wasting our time!
Juror #2 voted to HIDE IT
Explanation: No explanation given
Juror #3 voted to HIDE IT
Explanation: multiple personal attacks
Juror #4 voted to LEAVE IT ALONE
Explanation: No explanation given
Juror #5 voted to LEAVE IT ALONE
Explanation: No explanation given
Juror #6 voted to LEAVE IT ALONE
Explanation: When you call someone a "cyber stalker" you should expect a negative response. Most people learned at a young age to not dish it out if you can't take it.
Juror #7 voted to LEAVE IT ALONE
Explanation: No explanation given
Gore1FL
(21,151 posts)I hope Juror 3 takes the time to link the "multiple personal attacks."
Cha
(297,655 posts)Sheepshank
(12,504 posts)Gore1FL
(21,151 posts)It's really a shame. I have been on here since early in 2001. I've seen short-term celebrations. Meta was filled with them when there was a Meta. But the most I ever saw previously was the Iverglas thread that was multi-hundreds of posts long.
But Loonix? Thousands upon thousands of posts demonstrate that dark celebration daily. It's tragic that it's allowed. Many who practice the dance claim it shows support of Skinner. This is, at best, misguided because it hurts the environment of a board he runs (and makes income from).
If you think its awesome that people have been celebrating a long-time DUer getting banned for about 2 months now. Then you are part of the problem.
Cha
(297,655 posts)Gore1FL
(21,151 posts)Cha
(297,655 posts)Gore1FL
(21,151 posts)If you truly believe "Skinner Rocks~", why do you repay him by making his site suck?
Cha
(297,655 posts)Gore1FL
(21,151 posts)I am merely pointing out your sig line. If you consider this an insult, you should also consider some personal reflection on your poor choices.
Matariki
(18,775 posts)It enabled young people to afford college without a lifetime of debt. How is that difficult to understand? Or is your post just snark?
Proserpina
(2,352 posts)so that they can pass for idiots. Some ARE idiots, but that's a whole other problem...
Matariki
(18,775 posts)and arguing for the same policies designed to screw regular folks.
Duval
(4,280 posts)Graduate School, it was 5% (1981) and not government insured.
You are quite correct, Matariki!
bhikkhu
(10,724 posts)4.8% on 10k is manageable (my own debt), and was the norm as recently as the early 90's. Now average student debt is 3 to 4 times that, and plenty of degrees will run over 100k to get through. At some point, it doesn't really matter what the interest rate is; if you're starting out in life with a $100k debt hanging over your head, there's going to be some hard choices.
Matariki
(18,775 posts)and/or to stock a 'volunteer' army.
KingCharlemagne
(7,908 posts)MohRokTah
(15,429 posts)Based upon his understanding of global finance, I wouldn't give the world 9 months of his proposals being enacted before complete global economic collapse
Fortunately, Democrats in Congress aren't stupid enough to attempt to enact his pie in the sky proposals.
ljm2002
(10,751 posts)...Democrats in the Senate are "stupid enough" to make him their Ranking Member on the Budget Committee.
Gee I wonder why? Because if he's as ignorant of economic facts as some of you seem to think, that does not reflect well on them either.
MohRokTah
(15,429 posts)ljm2002
(10,751 posts)Never mind. In the question lies the answer -- a resounding "NO".
Karma13612
(4,554 posts)MohRokTah
(15,429 posts)Apparently, Sanders supporters are not.
KingCharlemagne
(7,908 posts)Vinca
(50,303 posts)It's got to do with basic common sense. If you want an educated population you don't screw citizens over by doing things such as not letting them renegotiate student loan debt.
Enrique
(27,461 posts)from the Weekly Standard:
http://www.weeklystandard.com/bernie-sanders-economic-illiterate/article/1046082
Has anyone explained to you the difference between secured & unsecured loans? Try repossessing a college degree.
ljm2002
(10,751 posts)Really??
notadmblnd
(23,720 posts)Student loans is one of the few types of debt that one can not file bankruptcy against. If a student defaults on a student loan, the financial institution will get their money back one way or the other. Either the debtor will pay it back or income tax refunds will be taken. Social Security will also denied or withheld if one becomes disabled or retires before the debt is paid back.
So you see, there's no reason for you to be afraid of what you perceive to be Sander's ignorance. But feel free to dig for something else that scares you about Sanders.
Wasn't it yesterday that you were afraid of him reaching out to people other than democrats?
Scuba
(53,475 posts)notadmblnd
(23,720 posts)I was always told that it is etter to keep your mouth shut and have people wonder if you're an idiot than to open it and remove all doubt.
Fuddnik
(8,846 posts)They're getting desperate.
Duval
(4,280 posts)yeoman6987
(14,449 posts)Those are facts.
missingthebigdog
(1,233 posts)It is true that the financial institution will get their money back- the government will pay them, and pursue the borrower. Student Loans CAN be discharged in bankruptcy, but a much higher bar is set to discharge them.
To discharge a student loan, you have to show that payment would create an undue hardship. There is a three prong test:
-You would not be able to maintain a minimal standard of living if forced to repay;
-The hardship is likely to continue for a significant portion of the loan period;
-You made a good faith effort to repay the loans prior to seeking bankruptcy relief.
It is also not true that Social Security will be denied or withheld. The government can garnish Social Security, and SSDI*, (but not SSI), but cannot take more than 15% of the benefit, nor leave you with less than $750.00 per month. (If your benefit is $1000.00, they can take $150, leaving you $850. If your benefit is $800.00, they can only take $50.)
The student loan system is a bad system, and desperately needs reform. Spreading misinformation about it, however, only provides ammunition to its defenders.
*Student loans can be forgiven if you can show permanent and total disability- so a full disability rating from SSDI should suffice.
Enrique
(27,461 posts)http://twitchy.com/2015/10/15/just-shut-up-already-bernie-sanders-cements-his-imbecile-status-with-this-tweet/
1monster
(11,012 posts)Mortgage rate was 9.75%.
As I recall, there was serious outrage at the mortgage rates (which dogged both the Ford and Carter administrations). So why is it okay to charge college students who haven't yet had the chance to build assets or credit (and with such massive student debts will not be able to) the high rate?
Perhaps the ones who don't understand economics are the ones throwing around terms like "imbecile" with such abandon.
merrily
(45,251 posts)The bs never ends.
ladjf
(17,320 posts)Enrique
(27,461 posts)according to your friends at Townhall.com
http://townhall.com/tipsheet/christinerousselle/2015/12/28/bernie-sanders-tries-and-fails-to-explain-economics-on-twitter-n2097564
mmonk
(52,589 posts)secured by the property in question since the era of CDOs and swaps. The banks no longer worry about the homes and the homeowners ability to pay. Guess that explains why so many Thrid Way voters and Republicans don't understand how we all got screwed.
1StrongBlackMan
(31,849 posts)the purchasers of the CDO care very much about the homes and the homeowners' ability to repay the loan.
mmonk
(52,589 posts)They aren't how housing loans were done in the past where the lender was on the hook for the original real property. Many lenders no longer had title but foreclosed on homeowners anyway. The traded securities were fraudulently passed to investors with AAA ratings.
1StrongBlackMan
(31,849 posts)and, I'll say again, the purchasers of the instruments, care very much about the home values and the home owners' ability to pay.
mmonk
(52,589 posts)securitizations of money for real property whereby the lender still holds title. The traditional securitization chain was scrapped for creating tradable securities with higher interest returns than government bonds.
1StrongBlackMan
(31,849 posts)mmonk
(52,589 posts)in question.
1StrongBlackMan
(31,849 posts)the break in, and clouding of, the title trail does not change that.
mmonk
(52,589 posts)The only thing that remained the same was the initial loan qualification in terms of underwriting and the pledging of real property. Then the securitization chain was changed. I initially invested in real property when I was 18. I'm now 59. Later I became a real estate broker. The only loans still secured by property in a real sense are government loans. I'm not trying to be argumentative. It's just I've witnessed the changes in securitization and later was burned by the fraud by the rating agencies under pressure by the investment banks.
1StrongBlackMan
(31,849 posts)mmonk
(52,589 posts)ljm2002
(10,751 posts)...when a bank made a home loan, the bank kept the loan on their books. It belonged to them for the life of the loan. Therefore they cared a lot about the soundness of the loan, before they ever made it.
Fast forward to the 2000s. Loans were made, then immediately divvied up into CDOs and sold to other institutions. Now the incentive for the originating bank was quite simple: make more loans. It really did not matter if the original loan was good, since it would be sold quickly anyway -- at which time the originating bank cashed out and no longer had to worry about it.
Sure the purchasers of the CDOs cared. But you had the ratings firms in on the scam, claiming that all sorts of bad paper was really "AAA". The corruption hit a lot of areas of our financial system.
It's all about the incentives. The incentives were just to make more loans. It was a giant and sophisticated game of musical chairs, really. A lot of the financial people knew what was going on, but what did they care, as long as they were able to skim off profits on their part of the cycle.
And we all know how well that turned out. Actually it turned out pretty well for the financial institutions, just not the rest of us.
1StrongBlackMan
(31,849 posts)I know about the bundling and sell offs and fraudulent rating system ... and still, the purchasers of the instruments care very much about the performance of the instruments ... today.
ljm2002
(10,751 posts)...changed for the banks who originated the loans. Used to be they HAD TO care about the soundness of the loans they made. When CDOs came along, those incentives changed dramatically, with predictable results.
If you have a mortgage and go into default and then foreclosure, the property will be sold at auction and the proceeds will go to whoever is holding the note. That someone may never have seen your home and the note may well be just one item in an investment portfolio, but the loan is still secured on the property. Who owns the loan is ultimately no concern of the homeowner, only the fact that the home can be seized if the loan goes into default.
mmonk
(52,589 posts)been a real estate investor since I was 18 years old and I'm 59 now. I've also been a real estate broker. Nonetheless, the securitization process has changed quite a bit over the years because I have witnessed it. It's no longer a straight securitization process except for government loans. We created tradable securities out of the debt subject to the markets.
Bluenorthwest
(45,319 posts)charge for education? That's obviously what you mean. Why don't you just say it? 'Since we can't repossess their brains we have to gouge them on the interest'.
Bernie is saying he thinks it is wrong to do this. You seem to be saying you do not know the difference between right and wrong.
Enrique
(27,461 posts)and indeed, the RW propaganda machine is all over this.
Discussing student loan rates as if we live in their Ayn Rand fantasy world where everything is 100% market-driven.
Luminous Animal
(27,310 posts)Romulox
(25,960 posts)Hassin Bin Sober
(26,337 posts)I wish I could find an article that was posted here a couple years ago about what a scam student loan collections has turned in to.
The gist of the article was how the student loan lenders were buying the collection agencies so they could squeeze more blood out of the turnip and make a butt load of more money on the bad loans (that were insured anyway).
1) The student loan lender lends the money and makes spread on the interest and servicing.
2) The loan goes bad so the lender collects on the federally insured loan.
That would be the end of the lender's involvement in the loan once it's paid off by Uncle Sam but, as Billy Mays said, Wait!! There's more!!
3) The lender now owns a collection agency that tacks on exorbitance late fees, attorney fees, garnishment fees, court costs and other numerous collection charges.
4) There is no bankruptcy protection so they can hound you till the day you die.
At the time, the general consensus, iirc, was this is a bad scenario (disclaimer: du always has some pro bank d-bag who comes to the defense of banks and sides with punishing poor people).
But that was before silly season.
Unsecured indeed.
1monster
(11,012 posts)default changed.
I didn't hear from the loan company until five years later when I received a letter stating that I had an account balance of $2.37 in arrears. And since I had defaulted on this $2.37 (which turned out to be interest added after I sent my final payment, but before it was posted), I was being charged a punitive late fee of $115. For an unintended default of $2.37 of which I'd never been informed...
Dawson Leery
(19,348 posts)ladjf
(17,320 posts)Scuba
(53,475 posts)I'm sure that learning the facts won't cause you any stress though, or you would have already deleted this post.
ljm2002
(10,751 posts)...of the Senate Budget Committee doesn't know the difference between secured and unsecured loans. Get real.
Back when I went to college I got grants, work study and loans. The loans were at 3% -- and interest rates were much higher overall than they are now. Back then, though, the government recognized the value of higher education. It's an investment. They got a hell of a lot more tax $$$ from me than if I had not got a degree.
tularetom
(23,664 posts)You can do better than that.
Cassiopeia
(2,603 posts)Student loans are secured loans by the government and one of the few debts that can not be discharged through bankruptcy.
In many respects, student loans are much more secure than a property loan, especially in this volatile housing market.
Fuddnik
(8,846 posts)I have a Visa card through them at PRIME. Not prime+. Not a teaser. $20k limit. I've had it for 20 years.
Totally unsecured. I think my current rate is 3.25%. It's been as low as 1.5% High as maybe 8.5%. $60 annual fee. It originally started out as a Huntington Union Plus card, before Chase took over the program.
If anybody needs to educate themselves, it's you. Just spewing more bullshit.
ViseGrip
(3,133 posts)shawn703
(2,702 posts)You should really refrain from attempting to slam someone who does.
But you're a Clinton supporter and you take after her, I guess.
Warren DeMontague
(80,708 posts)Namely, she doesn't know what it is, exactly, but she knows it's BAD, bad enough to require a "Manhattan Project" to ensure cops can de-encrypt the iphones of suspected small time non-violent drug users
super-dangerous known terrorists
And also we can stop terrorism by censoring twitter.
MisterP
(23,730 posts)medical, employment, transit, educational, and even carcereal lives? really want to point out that the 2% that make more than $250K are getting their new McMansion on everyone else's backs--and that even this gentry class isn't at all secure? and that these securities and bundles have repeatedly crashed the economy to the enormous double profit of Clinton's closest allies?
do you even KNOW what you're doing?
Kalidurga
(14,177 posts)That is what a conservative mind runs on it's a fear based system.
wolfie001
(2,265 posts)Ya know?
Pharaoh
(8,209 posts)you can declare bankruptcy but the student loan will still be there.
Bernardo de La Paz
(49,036 posts)Fuddnik
(8,846 posts)fasttense
(17,301 posts)things that merely bash Bernie.
The only purpose of this uninteresting post is so a bunch of Hillary Lovers can get together and bash Bernie. It's NOT about educating people on the issues or identifying policy changes. It's all about humiliating Bernie supporters and starting flame wars.
chervilant
(8,267 posts)(Please, don't waste your time responding, as I've added you to my IL so that I won't have to see such insupportable drivel in future.)
truedelphi
(32,324 posts)And many of them work for a while, at least the first time around:
** Weapons of Mass Destruction
** Be sure and vote for the Lesser of two evils
And on and on.
Matariki
(18,775 posts)Because those pretty much sound like Republican talking points.
MisterP
(23,730 posts)they write like they're too busy admiring their new ring or are distracted by their plans for a second wine cellar; to them a beer could cost $30 or $3, it doesn't matter
Matariki
(18,775 posts)In this thread! Wondering where all these people came from and why they're on DEMOCRATIC Underground.
MisterP
(23,730 posts)what they owe"
their campaign's degenerated to "you CAN'T do better" quite quickly
Agnosticsherbet
(11,619 posts)to state and federally funded Universities and colleges. (Not to private Universities.) Those who choose to teach, or serve in a similar capacity of public service (including the military), should have a year of their loan forgiven for every year they work.
It is in the national interest of this nation to have an educated electorate.
I don't think college should be free.
darkangel218
(13,985 posts)Bernie can distinguish just fine.
Stanford student loans are backed by the State, and they CANNOT BE DISCHARGED IN A BANKRUPTCY, UNLIKE MORTGAGE LOANS!
THEY ARE , IN ESSSENCE, COLLATERAL LOANS, JUST LIKE THE MORTGAGE ONES! EVEN SAFER, CONSIDERING EVEN BANKRUPTCY WONT DISCHARGE THEM.
SO THAT.
BlueStateLib
(937 posts)The national default rate on student loans made by the government fell to 11.8 percent from 13.7 percent last year, the department said.Oct 1, 2015
http://www.usnews.com/education/blogs/student-loan-ranger/2015/10/07/falling-student-loan-default-rates-still-challenge-borrowers
The Velveteen Ocelot
(115,836 posts)It's true that mortgages are secured by the property while student loans are not secured by any tangible asset; however student loans, unlike virtually every other debt, are not dischargeable in bankruptcy. If a homeowner defaults on their mortgage the bank can get the house back; this is true even if the homeowner files bankruptcy, which typically discharges all of their unsecured debts, like credit card debt. All of their unsecured debts except for student loans . Those will follow you forever. Even your Social Security can be garnished if you have unpaid loans when you retire. http://www.marketwatch.com/story/when-your-social-security-check-disappears-because-of-an-old-student-loan-2015-06-25 So to say that lower interest rates for mortgages than for student loans can be justified because mortgages are secured debts and student loans are not is absurd. If a debt can never go away and can be paid by your Social Security check 30 years later it's as effectively "secured" as a mortgage.
House of Roberts
(5,182 posts)Also, what good is a loan 'secured' by real estate when property values crash as we have seen only too recently?
Bernie knows of what he speaks, and he stands behind what he says.
morningfog
(18,115 posts)Historic NY
(37,453 posts)blackspade
(10,056 posts)RandySF
(59,221 posts)bhikkhu
(10,724 posts)..."secured" vs "unsecured" has little to do with the rates on student loans. In practice its easier to get underwater on a secured home loan, declare bankruptcy and walk away, than it is to stiff the banks on a student loan (except by dying).
One of the reasons they made student loans undischargeable was to be able to charge low interest rates, in comparison to the 20% you might pay on an unsecured credit line. In practice, its not a bad idea. Interest rate derives from risk, and the harder it is to default, the less risk to the lender. I have about 10k in student loans left myself, from a stint in college a few years back. Mine are consolidated at 4.8%, versus 3% on my home loan.
Not that this has anything to do with political candidates that I can see...they are all on the right side of the problem, (surprisingly, even Trump.
earthside
(6,960 posts)This is a profoundly uninformed statement and it's pretty scary when you realize it's coming from a presidential candidate.
How could we elect as President of the United States someone this naive?
Hillary really needs to get some ethics.
truedelphi
(32,324 posts)would have been out in the streets within days of Obama's 2008 announcement that arch criminal Tim Geithner would head up the US Treasury.
But the educational system in this country does not undertake to educate people about two needed things:
1) Contract law
2) Mortgages, loans and how Big Business has the upper hand.
Ever notice that economic realities are not taught in US grammar or HS's or even in colleges?
Well, in any event, although I think Mr Sanders actual wording was not the best, at least he is pointing out that there is a discrepancy. Why is it that Wells Fargo obtained the economic powerhouse Wachovia for almost nothing - due to the tax penalties the US government waived in WF's favor, and due to all the Bailout monies that were given to Wells.
Yet meanwhile, our nation is one of very few industrialized nations where college aged people (and their parents) must mortgage their futures. In other countries college and university enrollees are given stipends to help them with living expenses and also: ZERO DEBT!
So Big Financial people can create a system that crashes the economy, rewards themselves, puts twelve million people out of their homes, and then base the entire economy on trading some failed big banks back and forth - with the government offering up help to do this!
Bernie remains our only hope to reform the corrupt party that has been headed by one friend to Big Banking after another.
KingCharlemagne
(7,908 posts)the same category as credit card debt. Student loans are NOT dischargeable through bankruptcy, but credit card debt is.
But please proceed with your libel on Sanders.
libdem4life
(13,877 posts)2 years of community college...tuition free. Then went to University for two years on NDEA loans. (National Defense Education Act) I did pay for my 5th year Credential units, but was able to substitute teach during that time. As a teacher (they were short on teachers) each year I taught would automatically reduce my debt by 20%. Five years later, I was debt free.
My niece became an MD on student loans about 3-4 years ago. She owes 6 figures and her entire check as a Pediatrician goes to pay her loans. They live on her husband's salary.
Perogie
(687 posts)It doesn't make sense that people are burdened with high interest rates weather they are secured or unsecured. Makes sense to me.
Have you tried night classes at your local Jr College?
Motown_Johnny
(22,308 posts)The idea that someone who has been in politics as long as he has, including being a Mayor, does not understand basic economics is simply insane.
He is saying that it doesn't make any sense to charge higher interest rates on something that improves your earning potential. Higher earning potential repays itself, to a large degree, in higher taxes being paid.
This benefits the country as a whole.
What sense does it make to have education less affordable when it benefits the nation to educate people ?
Honestly, your OP makes you sound like some kind of bean counting banker or accountant who can't see past the numbers. You seem to know the price of things but not their value.
WillyT
(72,631 posts)DisgustipatedinCA
(12,530 posts)That said, student loans may as well be secured. You can't run from them; you can't hide. Come back and post again if you feel you have something a little more defensible to complain about.
bowens43
(16,064 posts)Bernie is going to put hillary's political ambitions to rest. Stick a fork in her, she's done.
Cha
(297,655 posts)Sheepshank
(12,504 posts)But attempting to draw a parallel between secured and unsecured loans isn't the route to get there. bernie needs to recognize that student loans are not like home loans and that comparison is assinine. The Feds could guarantee student loans I suppose, remembering that the Feds don't as a rule guarantee home loans since they do have the home as collateral.
Hiraeth
(4,805 posts)You, however ... is where I question.
d_r
(6,907 posts)is that when you take a student loan, your future student loans are all locked to that initial interest rate.
I went to school in the 80s in the Reagan years. I remember the financial aid people telling me that 12% was a great rate for a loan, that I would never see a rate lower than that. That's what they said. I had poor parents and I was a first generation college student, it was a dream to go to college and I signed up. I was locked at that 12% rate forever.
Through graduate school that was the rate I would have.
Now I've seen interest rates a lot lower of course. But I can not refinance the loan that has more than tripled in the amount due and grows faster than I can pay the interest.
He was talking about being able to refinance a student loan at a lower rate. Those people with high 80s interest rates on their houses could refinance them. You can't with a student loan.
ETA it was because of the way it was written in the 80s the loan program locks into the original rate.
ReallyIAmAnOptimist
(357 posts)...you actually think Bernie doesn't know the difference between secured and unsecured debt. I am certain that you are smarter than that... and your premise is a classic 'straw man' (misrepresenting someone's argument to make it easier to attack).
Here's the way I look at, and it's closer to where Bernie is coming from. Why should the government loan money to banks (@ 0.50%) to reloan to students (@5-10%)?
As always, what possible value-ad comes from the for-profit middleman (greedy bankers)? ZERO!!!
That's the difference between government working for the people (Democratic Socialism) rather than working for corporate interests OVER people (FACISM).
Students should not be made into 'hosts' for parasitic greedy bankers, nor should they be targets of for-profit education-mills that are more interested in income from student loans than actually educating students.
Cha
(297,655 posts)Lucky us.
My Good Babushka
(2,710 posts)that you're confusing education as an investment in the public good with education as a for-profit commodity. You are actually saying you support the continuation of education as a commodity that should be available on the basis of wealth and not on merit or intellectual ability.
randr
(12,414 posts)to have government guaranteed support which is basically a "secured" loan.
To imply that Sen. Sanders does not know the basics of our lending industry is utter nonsense.
INdemo
(6,994 posts)just grasp at anything they think will be a negative towards Bernie Sanders..and this is BS.
Im sure Bernie Sanders knows the difference.
Obviously you have never had to worry about a college tuition payment or making up the difference between a pell grant and the tuition balance left.