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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM
The housing bubble was the result of investments upon investments being built upon the notion that real estate prices would keep going up, though. I don't think student loans have a similar edifice built upon them.
edited 9th Apr '12 6:34:46 PM by Wicked223
You can't even write racist abuse in excrement on somebody's car without the politically correct brigade jumping down your throat!@Lin-person whose name I can't spell after the first 3 letters: Student loans are getting defaulted on more and more, as people are more and more unable to pay them off. Pretty much the same sort of thing that happened with the housing bubble, that everyone defaulted en masse. These loans aren't being traded around as much, but they're still relied upon for income by banks because they are very hard to get out of paying.
Very big Daydream Believer. "That's not knowledge, that's a crapshoot!" -Al Murray "Welcome to QI" -Stephen FryWhat does it mean for something to be a bubble? When we say "Gold is a bubble" that means that gold is overvalued, and eventually the market will stabilize as everyone realizes that fact. The real estate bubble meant real estate was overvalued, so people paid too much for their homes and when the bubble popped, their assets were low. What does it mean for one's education to be overvalued though? In order for the recipients of student loans to suffer as the result of a popping bubble, the net payoff of their education would have to be lowered.
You can't default on student loans-but by the same token, there's no collateral on student loans either. You can't reclaim a person's education. And the way debt from student loans affects one's purchasing power (which is relevant when discussing recessions) really doesn't seem to matter based on how valuable the education is; you have a certain amount of debt, and you have to pay it off.
Ultimately, I'm skeptical of the "Student loan bubble" for these reasons.
Fair enough. I'm just relating information on stuff that I heard somewhere, so I'm no expert. And it wasn't so much that the education is being overvalued (though let's face it, going to college is expensive as fuck nowadays) but that the loans are.
I think.
Very big Daydream Believer. "That's not knowledge, that's a crapshoot!" -Al Murray "Welcome to QI" -Stephen FryHmmm... that's true-I'm really not yet all that familiar with how financial markets work. I'm not starting my Financial Markets courses until-oh hey, look at that, tomorrow!
You can certainly have an overvaluation of the debt. This could theoretically lead to massive skyrocketing on the interest rates for student loans, which WOULD affect consumer spending...
OH shit-
@Tomu... well, would it not surprise you to know that student loan interest rates could double this summer if congress doesn't act?
I dunno; all things considered even if Romney doesn't get the required amount, he still has the most amount of delegates. I'm thinking they're going to stick with Romney, now that Santorum and Gingrich seem to be folding their hands. I mean, who else do they have that's eligible? Would they pull out another dark horse like Sarah Palin for this or what?
Edit: Regarding the bombardment of ads; I can't remember where it is, but I read that the ads Romney ran against Santorum and the like actually hurt Romney in the primary votes, in whichever state it was them competing in. Which means that just because he runs ads doesn't mean that they will be convincing ads, or that this tactic won't backfire on him in some way. And considering that Obama will quite likely be doing a similar thing, I don't see why ads alone would make you fear that Romney would win specifically because of those.
It's the debates between them that'll really be interesting. Ads are just going to be obnoxious until November is done.
edited 9th Apr '12 7:10:17 PM by AceofSpades
I figured out a surefire way to seal 2012 for Obama and 2016 for whoever runs for president after pushing this in Congress: a bill that forgives all student loan debts.
Share it so that people can get into this conversation, 'cause we're not the only ones who think like this.It should be noted that Romney's use of the attack ad Zerg Rush tends to drive his negatives up; especially among independents who are less likely to buy/see the appeal of his message.
Politics is the skilled use of blunt objects.Honestly, considering how much of a run for his money Santorum ended up giving Romney, I suspect we all may have overestimated the impact of money on the election to begin with. I mean, we'll have to wait until 2013 to know for certain, but for all the fuss over Citizens United, it's so far mostly just been the uber rich engaging in Mutually Assured Destruction by wasting more and more money.
Mass forgiveness of student loan debt would flat out bankrupt many banks and investors, just like a mass default. The point is that unprecedented defaults could send a shock through the system, triggering a panic in the credit markets akin to the one that happened when the housing bubble collapsed.
That's really what a collapse is, anyway: people abruptly no longer have confidence in the value of a particular category of investment. They abandon it for safer investments, but that sets off a general market run. It's like a chain of dominoes.
edited 9th Apr '12 8:16:12 PM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"oh sweet baby jesus, if I got promised that I don't think I could bring myself to vote for anyone else. I think I might even try to vote for them TWICE
and if I may indulge in a minor spot of short sighted, spiteful iconoclasm: FUCK THE BANKS.
edited 9th Apr '12 8:17:37 PM by Lanceleoghauni
"Coffee! Coffeecoffeecoffee! Coffee! Not as strong as Meth-amphetamine, but it lets you keep your teeth!"
I lol'd
The student loan situation is certainly interesting. I have quite a bit of debt myself, though not a crushing amount–if I managed to get a job in my field within driving distance of my parents' place, I could probably pay off most of the debt in one year by living with them and putting most of my income to bringing down said debt. But even ignoring that possibility, I have two big advantages: scholarships and going into a good-paying field. There are plenty of people who have more student debt than I do and have jobs that won't pay nearly as well. The Department of Education is fairly flexible about their loans, but I can't say the same thing for private lenders.

I think the Student loan bubble is something similar to the housing crisis. Prices go up and up and up until the whole system comes crashing down.