U.S. household debt tops $14 TRILLION and reaches new record

Every teenager KNOWS when you borrow money it must be paid back.

A person does not need to achieve a college degree in order to pay back a loan.

No matter...people whining about college loan debt need to buck it up and focus.

Depends on one's career whether or not higher education is necessary. It's not required to write computer code. It's not required to join the military. It's not required to be entreperneural. It's not required to design something. Not required to be an artist. Not required to be a politician.

A lack of money for education IS NOT a road block...it's merely a challenge that can be overcome...

 

Nobody on this thread has suggested that. Please respond to what HAS been suggested.

This discussion has NOTHING to do with "lazy", "selfish", etc.

STEM courses wash out numerous kids who are putting absolutely everything into it. It's not about trying, obviously.

The fact that a few suceed is NOT the point. The point is that there are significant barriers that slow those who have low income parents.

No, we need MORE kids going to college.

Competition is moving toward those fields where more education is a requirement. America can't compete with other countries if we choose to waste our brainpower by allowing education to fail. We have less than 5% of the brains - with brains being more and more the scarce resource. We're not going to win while wasting our brains.

AND, when kids don't get educated, it propagates poverty - which WE pay for.

 

This misses the point. If there is a chance that one will incure tens of thousands of dollars of debt with NOTHING to show for it, that is a SOUND basis for questioning whether the money should be borrowed.

The point here is that there IS serious risk in teenagers borrowing that kind of money on the grounds that they hope to graduate with a meaningful degree that will help them pay it back.

For MY kids, there was no question. I could backstop my kids. For kids with low income parents, that can be a significant reason for not getting an education. it IS a differentiation based on the financial status of the parent or parents.

I couldn't disagree more strongly. I know that some will make it. However, suggesting there is no deterrence in having a highschool kid borrow that kind of money is just plain ridiculous.

How financially thoughtless does a high school kid have to be to see no risk in borrowing tens of thousands of dollars to take a chance on acquirig a saleable skill??

High school kids aren't stupid. They know when their parent or parents can't afford to help.

 

1) Laziness has everything to do with. That's what makes people 'fail' in our First World democracies. If functionally illiterate, penniless refugees can turn their family fortunes around in a single generation, anyone can.

2) So? And yes, it absolutely is about 'trying'. You're either prepared to stick it, or you're not. And once again, a low income has nothing to do with it. Parental support (which is absolutely free) of education - from a young age - is the deciding factor.

3) The problems we're seeing now are a direct result of working and middle class kids taking loans for 'rich people' courses (arts/humanities). The answer is not more of the same, obviously. The answer is for our kids to be competing in STEM and future-friendly fields. That means the "hard" stuff. The world isn't going to go easy on us because we find technical courses an imposition on our ease and comfort.

4) Since we all know that considered education is the way out of poverty, why are working and middle class parents failing to ensure their kids are educated in a way that will keep them out of poverty? That's the question you need to ask, and you need to ask them, not me. I would ask YOU why you would encourage more of that irresponsibility though, since you claim to care about the future poverty of our young.

 

This is wrong, from go to whoa.

The premise for borrowing should never be predicated upon your parents' financial status (unless they're very rich of course). It should be predicated upon the likelihood of your chosen course securing you sufficient reliable income to repay it. And clearly, any functionally sane kid over the age of 18 knows that means completing the course.

The part parents play (when not very rich), is committed and selfless support of the child's educational needs and goals. That is absolutely free .. and even the poorest parent can choose to provide it. People who work very long hours can also do it, by sacrificing sleep for a few years 'til high school is finished. That's how Asian parents do it. They don't do it by complaining about 'the system', or via the intervention of magical pixies. They actually do the hard yards, for as long as it takes.

 

Interest rates are being kept artificially low to prop up an economy based solely on credit borrowing.

Eventually that balloon is going to pop. I'm betting that it does so within the next two years.

 

I wish kids understood that they borrowed the money they should pay it back.

I also would like to see college not being so ridiculously priced. College should not cost as much as it does. If the college is spending millions on their sports teams then they need to lose government funding for example. Restrictions need to be made for federal funds.

 

Outside of college loan debt all of those who took out a loan should pay it back. If you owe on a car there is a good chance it is because you bought a car. If you owe 10k on your credit cards that's most likely your fault whether it was from bad circumstances or not. People need to learn more about borrowing money and high school needs to start teaching real world classes for the kids to understand the world.

 

Woulda, shoulda, coulda...

It's long past throwing blame on those that are in debt up to their eyeballs.

As long as the Feds continue to keep interests rates low, people, by their nature, will continue to borrow.

That's going to come due at some point, and when it does, the feces is going to hit the proverbial fan.

 

How is it not the consumers fault for taking out the debt? The government didnt force them. No matter where interest rates are.

 

A sad thing about Americans is that they spend based on how they feel about life currently rather than how much money they have. The learned it from Government-the world's largest borrower.

 

Sure, they learned it from Trump's government. Since he and his minions are shouting the booming Trump economy propaganda from the rooftops, who is not to believe it and spend some more money they don't have? Someone must keep the charade going, and it is not the rich, who sit on their purses and are not investing.

I have always proposed that from the behavioral economics point of view, tax cuts are a big mistake. Tax cuts feel like unearned money (a windfall). After getting the tax cuts, people spend it, and then some. Thus the tax cuts contribute to the acceleration of the rate of consumer debt taking and accelerate the time to the next debt-based recession. We've seen it with GWB and we'll see it with Trump again. Will voters ever learn from it? Probably not, unless the GOP eventually has to clean up their own tax cutting mess, for once. That's why I won't mind if trump wins, because it is unlikely that we'll have another four years without recession. Would be interesting how he'd react to it.

 

You make an excellent, key point! Too often -- FAR too often, people make life-changing decisions based on little more than "how they feel about life currently rather than how much money they have".

We see this happen all the time now, reflected in hugely-important events like stock market performance, and whether some 'central bank' thinks the 'sentiment' favors rate decreases, increases, decides to 'print' more mony, or whatever. More and more often we cease to THINK, and rely instead on what we FEEL. It wouldn't matter to me except that when large masses of people make really stupid, reckless, irresponsible (but important) decisions, it invariably slops over onto the rest of us!

I can mostly agree with much of what you're saying, but would add that the REAL basic fault is found in the U. S. Tax Code itself! Our taxation system is so thoroughly corrupted and manipulated to favor the rich -- of BOTH political parties -- that it makes a total mockery of anything that could be thought of as "fair".

We need to go through the current Tax Code like an avenging angel and remove ALL tax loopholes, tax shelters, exclusions, 'carried interest', exemptions, deductions, and instead, base all taxation in how a person is taxed on one (ONE) thing -- actual, real, no-bullshit INCOME.

And, no, it's not a "Republican" thing, and it's not a "Democrat" thing -- it's BOTH of them, because the big-rich in BOTH factions laughs all the way to the bank... while the American Middle-Class 'takes it up the ass'!

 

Glad you were able to stick in your talking points. You are like a hawk flying over the forum looking for something that triggers the talking points. Glad to oblige.

 

Hey, feel free to point out where my "talking points" are from? Inability to address what I wrote, however, is noted.

 

Mortgage debt and mortgage refinancing is long term usually 15 or 30 years. You can't hang any more than a few billion of that debt on Trump's 3 years in office. Student loans, auto debt and almost everything else originated long before Trump. You can thank Obama's 8 years of entomic failure for a good portion of the debt. The Bush years weren't much better if we're going to be perfectly honest.

 

For people who don't understand that a tax cut lets you keep more of the money you earned, sure.
We shouldn't cut taxes because people don't understand this?

 

You didn't respond to mine either. You simply added a diatribe. Not worth the effort to respond.

 

If some kid borrowed $60,000 to go to school and failed to get a degree YOU would be the first to call that kid lazy and irresponsible and state that they must pay back the money.

And, that is what the KID knows, too.

That is why the money IS a barrier to education.

 

Funding college is ALWAYS an issue of how much parental support is available. The only time it isn't is when the kid is legally separated from the family or the family is dead.

The applications for college include an exensive form that states the financial capacity of the parents. Without that form education loans are not available.

This is merely a statement that you think parents can address tens of thousands of dollars for thever various children.

And, that is absolute bunk. There are millions of American kids that simply do not have that kind of support

 

There are several well meaning parents and sometimes other relatives that often co-sign for student loans. The kid decides college is too hard so he/she quits and leaves the co-signers hanging with the loan. Some will default, other keep paying for what will never bear fruit. It happens more often than most know.

The only way to insure student loans get paid for is to tie them to an iron clad commitment, such as service in the military. For example, a student joins ROTC and receives a scholarship. If he defaults after the first year, he must repay the government, and must still serve in the military until the debt is paid.

 

It's not lack of information. A 10 year old knows (without being told) that borrowed things need to be returned. There is nothing to 'learn'.

Failure to repay loans is a function of something OTHER than lack of information. It's a failure of will. It's laziness/selfishness/lack of staying power, etc etc.

 

I think you're just increasing the enforcement of repayment.

I've been discussing the fact that these large sums and commitments are a disproportionate barrier for those from parents without means (or those without parents).

If the parents don't exist or don't have means, then the kid is less likely to sign up for tens of thousands in debt.

By raising barriers to education like this, we perpetuate poverty and reduce the number of college graduates we're turning out - at a time when education is a requirement for American competitiveness.

We need people paying taxes, not taking taxes. We have only 5% of the world's brains - the raw material becoming more and more necessary for our economy.

 

There is a cultural element also. Just because a 10 year old with good parents knows to pay back his debt doesnt mean someone else does. I had friends who parents were proud of bankruptcy getting ride of their debt (openly proud). Proud of the government taking care of them. They were never tqugh fiscal responsibility and need to be educated better in my opinion.

 

1) I'm not talking about the loan application form, I'm talking about the child's choices. The child should not choose to take out a loan based upon their parent's ability to repay it, they should take it out based upon their OWN ability to repay it. In which case, it doesn't matter how poor the parents are.

2) What 'tens of thousands'? I have two in university, and another to follow shortly. Hasn't cost us a cent more than high school did. We (the parents) could literally be on welfare and it wouldn't make any difference.

3) How is it 'bunk', when it's a choice? Parents either choose it, or they don't. And if they don't .. that's none of our business. They are free to choose aren't they? Or are you saying you want to outlaw that kind of parenting?