Student Loan Corporation Navient Being Sued by Feds

Discussion in 'The Mainboard' started by miles, Jan 19, 2017.

  1. leroi

    leroi Rival Shark Boat Captain
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    .. assuming nothing else changes. Which is not a good assumption.

    Banking systems have the ability to adjust to changes in conditions , like legislation. If Fair Isaac or whomever wants to give you a 300 credit score for defaulting on your student loans, that's very much possible. Bankruptcy law can be changed in coordination with student loan law.

    We as a society are capable of creating reasonably dischargable loans, combined with reasonable consequences for defaulting on student loans. Lenders should have to bear some risk -- right now they bear almost none.

    Also I think it's hilarious that loan middlemen are called "Officers"
     
  2. Nelson

    Nelson Can somebody please get Ja Rule on the phone
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    Precisely. The system currently insulates people from the stupidity of their decisions in the short-term, which is kind of a big problem when it comes to compounding interest. If you get free access to capital without having to convince the lender how you'll pay it off, that's not economic reality.
     
  3. Seavie

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    I couldn't care less about the job title. Some call themselves loan originators...
    Why are you calling them middlemen? They literally are the beginning part of the mortgage process.
     
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  4. leroi

    leroi Rival Shark Boat Captain
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    Oh really, the beginning of the mortgage process? Do they lend out their own capital?
     
  5. leroi

    leroi Rival Shark Boat Captain
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    See, the way I remember it, all currency originates at the central bank. The central bank then lends to primary dealers at a higher interest rate. The primary dealers then lend out to large commercial banks at higher interest rates. The large commercial banks then lend to other instututions at higher rates. (SLABS are complicated and may involve some federal component, im not sure.)

    By the time it actually gets to the consumer, it's gone from 2% to 6%+ and now there are numerous competing claims on the interest that passes through a chain, all the way back to the central bank. The "Loan Officer" is just the person who does the paperwork for the borrower for a fee.

    Now -- if you ask me, I think we should just skip all that, and have the central bank make student loans directly at like 2%, and tell the private banking system to go eat a dick since they aren't assuming any risk or vetting borrowers or doing anything useful. But I'm not dictator yet.
     
  6. Seavie

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    I'm talking about a realtor referring a borrower to a lender. Said borrower then applies for a mortgage and the loan originator takes the application, chooses the best product, etc...that is the beginning of the mortgage process for a borrower.
     
  7. leroi

    leroi Rival Shark Boat Captain
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    Right, that's called a middle man. They connect the borrower to the loan product.

    Now if they worked for a Savings and Loan Corp, and they made a loan from there, you wouldn't consider that a middleman since they're lending out their own capital (or, at least, their depositors capital). But S&L's are not common anymore.
     
    #257 leroi, Jan 19, 2017
    Last edited: Jan 19, 2017
  8. Seavie

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    Guess we've got a fundamental difference of opinion. There's no loan without the originator. It has to start somewhere. The money is there, sure, ready to be loaned but not without the mortgage process. Which in my mind starts at the application.
     
  9. Baseballman86

    Baseballman86 Well-Known Member

    I'm of the thought that this should be addressed on both sides. Colleges have gotten too expensive and I think the loans app process should be more demanding. You shouldn't be able to get 6 figures in loans with no concrete and realistic repayment plan.
     
  10. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    So if you're poor you don't get the chance to go to college if you can't come up with a plan at the age of 18? Seems like a ridiculous constraint on economic mobility

    Next

    This is the worst mentality regarding education by far. You're hampering poor kids for being poor
     
    #260 OopsPowSurprise, Jan 19, 2017
    Last edited: Jan 19, 2017
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  11. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    There was an article about how certain top colleges mostly take from the 1%

    I'm not into that, leads to the problem with a lack of advancement. You want to fix the loan problem? Stop allowing private schools to operate as non profits while having a tuition bill damn near 100K (it's coming btw, some school is going to break that barrier). Give benefits and credits to schools for allowing low income kids to attend for little to no money
     
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  12. Baseballman86

    Baseballman86 Well-Known Member

    That's what you got from what I said? That's not at all what I meant. Ability to repay the loan should not be tied to your CURRENT financial situation at all. Most 18 yr olds don't even have a personal financial situation, just their parents situation.

    What I'm taking about is making it more like a real loan with an actual business aspect. You want a college loan, ok great, show me where you're going, what you may study and that school/major's job placement rates and avg salaries. If the plan is ancient Latin and you need loans for it all, that's just fine, but I'm not lending you $200K to go out of state for that. There would be no restrictions on anything, just reasonable limits tied to loans, reevaluated annually based on changes. Just common sense limitations to prevent people from getting in life altering debt without ever even having to think about it.
     
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  13. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    Still seems like a stretch for an 18 year old to make. Plus consider who's taking these loans, affluent people don't need them

    Plus I would like to see the decision making process that goes into what's a "valuable major"... I bet it'd be challenged in some way. That's the classic "pfft classics are for nerds" mentality. The profit margin isn't everything for a degree.
    And still, that's a contractual obligation that seems to put a ton on a child. Hell I changed my major as did most people

    Instead of putting all this decision making and pressure on a kid who likely will change their major, focus on the schools who demand ungodly amounts of money to get an education

    Seems like impressive mental gymnastics to see tuition rates increasing and saying that kids need to be held accountable
     
  14. Baseballman86

    Baseballman86 Well-Known Member

    You're reeeally stretching what I'm saying here. Priority 1 is still tuition costs in general, that's where the real issues are. On the flip side, as student loans are basically a limitless free for all, some people will always fall victim to that.

    I'm not talking about writing a business plan, just saying common sense stuff. Don't give the kid a loan for the $50K out of state school over the $15K in state school without some reasoning. If they have reasoning and understand everything and still want to do that, fine.

    Part of the issue with student loans is that they're almost abstract to most people. You don't buy a car or home without knowing the exact number and terms, but nearly everybody I know had no idea how much student debt they had or what the terms were or the payments would be until after they graduated, got the first bill, and it was too late to change anything. It's like an unlimited credit card where the statement doesn't come in for 4-5 years. People just take out as much as they can get, blindly assume they'll make a ton of money later and it'll be fine, then it just never happens.
     
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  15. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    They don't owe you reasoning for the school they're attending. Declining it because one is more is kind of a restraint on that kids ability to gain an education. There's countless reasons to attend a school out of state. For it to pass a threshold is bullshit

    You're suggesting kids who can't afford college or don't get full rides have to give a reason why they're going to college in order to attend. You don't see the considerably questionable problem with that?

    It creates an extra hurdle for admissions for a group of people solely bc they don't have the money to go to college
     
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  16. OopsPowSurprise

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  17. Baseballman86

    Baseballman86 Well-Known Member

    You're taking it way further than I am.

    So you think giving one person 6 figures in loans is no problem but asking them some questions is crossing the line? If I get in to two lib arts schools and one is $15K per year and one is $60K, you think it's questionable and wrong to make me jump through some hoops to get the $60K loan? That extra $200K in debt you're giving me without me understanding what I'm doing is probably going to limit my economic mobility substantially more than you steering me towards the more affordable school would. That's not a poor people thing, it's an everybody thing and a math thing.

    Saying that declining a school because of cost is hampering their ability to get an education is like saying declining me a loan for a Maserati is hampering my ability to get to and from work.

    Again, it's unique to every individual situation, much like every other type of loan in the world is. At the very least, just make sure people know what they're getting in to.
     
  18. Taques

    Taques let's mosey
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    going to NYU or USC will cost you a cool $500k+ now

    NYU can still get 375 students to go there though. But there are a lot of people applying that could cut the school a check for all 4 years i guess. wish I were one of em
     
  19. Baseballman86

    Baseballman86 Well-Known Member

    The biggest devil in all of this is for profit schools. They can all fuck themselves. I saw a statistic awhile back that showed that, while still a problem, student loans from traditional brick and mortar, non-profit universities and state schools are not as bad as they seem. The real crisis is the predatory for-profits where people rack up $20-30K or more but never actually graduate, putting them badly into debt while providing no benefit at all and years of lost wages. Even if you major in something with no job prospects at a traditional school, you at least have the degree that gets you in the door places. 3 years and drop out at Univeristy of Phoenix is a financial death sentence for most.
     
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  20. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    I'm taking it as far as you're presenting it tbh.

    You're right about the financial risks, but unless every kid faces that scrutiny for attending any college they want by the federal government, I'm not ok with letting some kids face that threshold. Especially considering the amount of kids who need financial aid reflects the group of people with less financial mobility. That's my main point. I'm not ok with having any group of people face an extra impediment to an education of their choosing bc of their financial status. If you get into Harvard, Duke, Tufts, or wherever, you shouldn't need to show why you deserve the opportunity to go after being admitted.

    Amazing false equivalency with the Maserati though, a luxury car is a luxury car. An education is not a car. If a kid can get into Harvard its not the same as wanting a Maserati. That's what you're missing bc colleges require admission. I don't have to provide my driving record for the opportunity to buy a Maserati.

    What we should do is have the loan process be more than a few clicks on a computer screen. Have your high school and local colleges let you know about the statistics of paying back a 200K loan. Have your parents, a guidance counselor, and some financial advisor break down the costs of attending each school.

    The federal government should have no say in where a kid is able to go to school. That's a power I am not comfortable giving to them. That's such a large government action I'm shocked that a Left poster didn't come up with it
     
  21. PCH

    PCH 2017 & 2019 National Champions - Clemson Tigers
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    Decades? How long have credit scores been around? I'll wait.
     
  22. PCH

    PCH 2017 & 2019 National Champions - Clemson Tigers
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    You're on the right track. Point blank- student loans need to look at income (potential income in this case) just like every other debt.
     
  23. Joe_Pesci

    Joe_Pesci How can less be more? It's impossible
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    i'm only a couple of pages in

    "not everyone should go to college. learning a trade can be just as good." -people who went to college and would never consider the other path for themselves or their children
     
  24. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    its always the worst take

    "in response to predatory loan agencies and greedy colleges taking advantage of a program designed to funnel people of all economic groups into a system that is the best predictor of economic mobility

    lets tell kids to stop going to college"
     
  25. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    So if a kid wants to be say a teacher what then? Or a curator of classical texts? Musician?

    We can't just force kids to choose a study path or else they can't go to college
     
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  26. duc15

    duc15 Hey Nong Man
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    Always a fan of people telling other people what they can and can't study while at college
     
  27. Taques

    Taques let's mosey
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    education for the rich, skills for the poor
     
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  28. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    The other flaw with "pick a major we will pay for" is the glut of people at those professions that would result
     
  29. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    S&P 500 CEOs

    35% have liberal arts degrees
     
  30. duc15

    duc15 Hey Nong Man
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    Definitely need more business degrees out there
     
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  31. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    Nerrrrddddssss
     
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  32. Baseballman86

    Baseballman86 Well-Known Member

    Everybody should have to face the same requirements if they're asking for the same thing. If you write a check for school, you can spend a million on clown college and nobody can say a word. If you ask for a dollar to attend school, everybody should be subject to the same common sense programs, regardless of if mom and dad make $1MM per year or are both unemployed.


    Of course the luxury car is extreme, but you don't think there are "luxury" colleges? If I live in GA and UGA is ranked #10 and LSU is #9 in what I want to study, but LSU is $40K for OOS and UGA IS $10K and comes with $5K in hope scholarships, LSU is a luxury for me. I certainly don't need it to get an education.

    Most of your 3rd paragraph is exactly what I'm talking about doing. If somebody is making an obvious, economically detrimental decision, they need to be made 100% sure of what they're doing before they're just given an unlimited credit card with a bill that doesn't come for 5 years.

    I have no desire for the govt to tell people where to go to school. I just think it's common sense for people to be made to take a deeper understanding of potentially life changing decisions. I made my college decision without cost ever even being tallied. I went to school, filled out small sections of FAFSAs, took additional loans for books and living expenses, graduated and got my first job before I ever knew what my total debt was, the interest on it or the monthly payments. I'm fortunate that my major paid well and scholarships kept the debt lower, but none of that factored in at the time and I just as easily could've had triple the debt for a lateral or worse looking degree. I would've greatly appreciated somebody somewhere asking me those questions at the time.
     
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  33. Bo Pelinis

    Bo Pelinis WE GO HARD ON EARTH
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    They can go to college but they don't need to attend a college where they'll be 100k in debt afterwards. Want to be a teacher? Great. Go to a school with x tuition (state school prices) and if you want to go elsewhere get scholarships or foot the bill in cash. I don't think that's ridiculous.
     
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  34. Baseballman86

    Baseballman86 Well-Known Member

    how many of those 35% have MBAs on top of that?
     
  35. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    make public colleges tuition free

    dont allow federal loans for private colleges

    thanks
     
  36. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    True but I don't want the Federal government making the decision

    Such a weird threshold for them
     
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  37. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    Then we do it that way instead of restricting access to colleges because of their major
     
  38. Baseballman86

    Baseballman86 Well-Known Member

    I don't know if we could afford the first part, but I'm in favor of the second right now.
     
  39. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    a fraction of a percent tax on stock speculation would pay for it

    we bailed out Wall Street, its time for them to help out Main Street
     
  40. Baseballman86

    Baseballman86 Well-Known Member

    That's not what I was advocating, at least not on purpose. Like someone else just chimed in, I'm saying let's strongly suggest against the $100K loan for degree X, if the same degree can be had at a comparable school for $30K. If they truly want it, don't stop them, but make damn well sure they know what they're getting into.
     
  41. Baseballman86

    Baseballman86 Well-Known Member

    Serious question, because I don't know the answer and am genuinely curious, what's the approximate price tag to make public universities free?
     
  42. Nelson

    Nelson Can somebody please get Ja Rule on the phone
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    Credit histories have been around since lending has. Scores are just the latest iteration.

    Further, the young life of scores leads you to believe they won't be utilized for decades to come? Seems unlikely.
     
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  43. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    ~75b was the estimate
     
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  44. TYdeFan05

    TYdeFan05 gOATS™
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    Glut of people with no passion or real interest in a profession they only perform because they can and it pays a wage. That sounds like a terrible life.
     
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  45. TYdeFan05

    TYdeFan05 gOATS™
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    I'd like to see the "tax burden" on the individual citizen to make public college free versus the "interest burden." Id bet the only loser in that scenario would be lenders and more poor high school kids wouldn't completely shut themselves off to higher education.
     
  46. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    What?
     
  47. Rusty Shackleford

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    You could just place a total cap on the amount loaned to individuals. You get X number of dollars to complete your degree. If you wish to exceed that amount you need to find a job, scholarship or go look for private loans that will be more difficult to acquire.
     
  48. Nelson

    Nelson Can somebody please get Ja Rule on the phone
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  49. PCH

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    If a kid wants to be a teacher, they need to go in state at a university that's not $40k/year.


    Also, I'm really speaking about federal loans.
     
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  50. OopsPowSurprise

    OopsPowSurprise Owed one ass kicking from poweshow
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    I think capping it at state tuition of your home state isn't awful but the issue is some states could raise it arbitrarily