Quote:
Originally Posted by Munchkin03
But, you're not borrowing directly from the government. You're taking loans out from a bank; in the event that you completely default (which is next to impossible since they garnish your wages and/or reduce your income tax refund if you don't pay), the government backs it up. Also, since loans can't be discharged in bankruptcy anymore, it's not as if people are shirking their responsibilities. In my mind, it's no different from a VA or FHA mortgage except you can't foreclose on it.
Oh, most people who go to private schools don't "mortgage their future," either, unless they're going to law or medical school.
|
What do you mean? Are you saying something about the scale of the loan or the connection to future employment? I just meant, in an offhand way, that one would take a huge financial obligation in the future for something that might provide little tangible reward in the present.
In terms of the loans, I think I knew that they are just federally insured rather than federal loans for the most part. (Do we have any straight federal loans, rather than grants, for low income students?)
Not having a tangible valuable asset changes the nature of the loan quite a bit from a VA or FHA mortgage to me, but I'm with you about how the loans pretty much stay with you forever. I'm not even sure you can default really. Wouldn't you almost have to be a position of drawing no income? I'm not at all concerned that people are ripping off the government or anything.
It's a safe risk for the government to take, but it's still kind of a strange one if you really start thinking about it. If they were tied to high income majors or degrees that were associated with delivering needed services it makes more sense than simply insuring loans regardless of institution or degree. And I say that as a big fan of the liberal arts.
I guess as someone noted earlier your taxable income goes up so it makes sense of that level, no matter what degree you earn.