Just Do It

[jm21]

I did not say to never pay back the loans. I said you can delay paying them. They will still accrue interest. It's similar to switching to a different repayment plan. They never go away but some loans can be put off for a few years without too bad of effects.

I was fortunate enough to have gotten a really good deal on one set of student loans, and can put those off almost indefinitely with no real harm to myself. Eventually they will have to be repaid but it's not going to harm me to repay them later (they are on a variable rate and if the interest rates here soared it could make me have to pay more in the long term though). My other student loans have higher interest rates and putting them off for a year would cost me more in the long run but if it would make it possible for me to accomplish some dream or adventure I would do it.

Defaulting on a student loan in the USA has incredibly draconian penalties, as mentioned. Pretty much everyone who defaults on them ends up paying far more than what they would have had to pay if they had just paid them back. Fortunately or unfortunately they're almost impossible to get out of. So I would not recommend blowing them off entirely.

I don't know about the UK but in the USA student loans are through for-profit companies for the most part. The government gives some guarantees and collects when someone defaults. The government doesn't lose a lot of money on student loans here.

[jm21]

There are some people who rack up huge credit card debt and pay huge interest on that debt.

I use a credit card for some purchases and pay it back before payment is due. As a result I get a bit of cash from my rewards program. I've never paid any interest or fees of any sort but I milked them for a couple hundred bucks last year.

God I'm a freeloader.

[JRM]

Originally Posted by jm21

No, the typical American will not pay back into the system what s/he has taken from the system, especially if s/he has children like the typical American does at some point. No where near. Not a chance. Maybe those in the upper middle class will have paid back what they took from society by the time they retire, but then they get on medicare and draw even more. And yes, the typical American is going to draw far more from medicare than they contributed to it.

I'm no economist, I'm just a guy that breaks things for a living. But last time I checked it isn't feasable in the long term to have a system where more goes out than comes in.

Originally Posted by jm21

Anyways, that's how the system is designed. Our system provides for a relatively equal launchpad for people. The vast majority will not be anywhere near rich, and many will be poor, but a small handful will become incredibly wealthy. Those who were allowed to become incredibly wealthy due to the government creating an equal field to start from then pay back into the system and support it in order to sustain the next generation.

I'm not sure what sort of silver spoon world you were born into, but I actually laughed out loud when I read the "equal launchpad" thing. You do realize that the entire system is rigged to keep the people at the top in position, and the people at the bottom as well? Occasionally someone manages to claw their way up with a little luck and a lot of work, but for the most part, we're a relatively immobile society in terms of large scale vertical movement. There are the few high profile success stories that the 1%ers bring out to sell "the American dream" to the suckers so they vote against their own best interest, but they are rare and getting rarer.

Can I have your permission to forward your post (seriously), because this has to be one of the funniest things I've read in a while, and I think it has a real chance to go viral?

Originally Posted by jm21

Student loans, although unique, are just like other loans in most ways. They have the risk built in. They are for the most part one of the hardest, if not the hardest, to get rid of. The government recovers about 85% of the value of defaulted student loans. That's pretty incredible.

It isn't that hard to get rid of a loan. Just pay it back. I worked a bunch of jobs so that I could graduate college debt free, but my wife borrowed her way through grad school (when we got married her dad quit paying, as it was my responsibility then). It wasn't hard, we just tossed everything we had at the loan and "got rid of it" in a few years time. We weren't driving BMWs or eating caviar, but we still managed to have a great time and travel on the cheap. Heh, before kids. Kids are great, but they wreck your financial freedom (even with those credits and deductions ).

Originally Posted by jm21

If there's any moral question regarding student loans and/or their repayment, it should be whether it's appropriate to lend children vast sums of money to pursue an education that may benefit society, and then put incredibly draconian penalties if they are one of the many whose education doesn't lead to superior employment. Not so many years ago a 20 year old couldn't borrow money as they could not be bound to a contract, but now it's OK to lend them $60k. Are humans so much more mature now? They aren't responsible enough to have a beer but sure they can assess the costs, benefits, and risks of an enormous loan? No, most students don't even know what their interest rate is. Not to mention how the student loan system has made higher education more and more expensive due to giving perverse incentives to schools.

Heh. Dude, you are *classic*. Seriously, can I ***please*** have your permission to forward this stuff to some friends?

Rather than ask whether it's OK to loan money to "children" (and last time I was on a college campus, those Co-Eds were anything but children ), why not ask whether it's such a good idea to indoctrinate folks in the culture of borrowing at all? I managed to work my way through school, and I certainly didn't end up with "superior employment" (immediately). Heck, I couldn't afford the pay cut to follow my field of study, because I was too busy making money at the job I had to pay for school.

It's called work. Having a work ethic. It's easy to pay back student loans, I've done for loans that weren't even mine, and without your so called "superior employment." It's called sacrifice. And, as the OP points out, it's even possible to take some time out and "have a good time" while maintaining your responsibilities. You just have to be willing to work. When we both got out of college we had a lot of fun, and we worked hard so we could have it. But gradually the fun started taking a back seat to the work, and that's a trap that's so easy to fall into.

Even better is when you find out there are more important things in life than money. Don't get me wrong, having money is great. I've had it, and not had it, and I can tell you that having it is better. But it isn't the end all be all of existence. I gave up my really good paying job to start over in a blue collar career, and my family made sacrifices for me to do so. That was eight years ago. Before that, when the career took off there was no vacation. The last two summers I've taken over a month off each, and not only am I taking a month off this summer to cruise, I'm taking two and half weeks off right now to work in my yard and get the boat nice and cleaned up to sell. You can always make more money, you can't make more time...

I think the OP found that by taking a year off and deferring loan payments that they may be a bit behind upon re-entry, but they're way ahead on life. I'm one of the richest people I know, and I only make decent money. Now if I could just find the perfect boat...

JRM

-- all this is predicated on whether the OP intends to defer, rather than default. The only thing a man truly has is his integrity. It would be a shame to sell it so cheap...

[david7]

Thumbs up for what JRM said...theres no equal starting point in life (genetically or fiscally) and to think otherwise is wildly delusional.

Going back to the OP's original post I think it's great that they were able to go for a year even with bills to pay. I've done the same thing in shorter bursts and just this year decided I better postpone all extended adventure until I'm at zero. Hopefully then I'll be able to make my next adventure a lifestyle since there will be no obligations to pull me back. But it's definitely hard to wait. If I thought I could put off my loans at infinitum as was stated above it would certainly be tempting but I don't think I could do it. They'd always be lurking at the back of my mind. So only 8k to go and then I'm a free man and can start saving for my boat

[zeehag]

i sailed for a year on opb before i took my own out of san diego bay. was worth the experiences.

[jm21]

Originally Posted by JRM

I'm no economist, I'm just a guy that breaks things for a living. But last time I checked it isn't feasable in the long term to have a system where more goes out than comes in.

You take more from people who are particularly well-suited to the system (e.g. warren buffet) and give money to those who are particularly unsuited to the system (e.g. disabled).

I'm not sure what sort of silver spoon world you were born into, but I actually laughed out loud when I read the "equal launchpad" thing. You do realize that the entire system is rigged to keep the people at the top in position, and the people at the bottom as well? Occasionally someone manages to claw their way up with a little luck and a lot of work, but for the most part, we're a relatively immobile society in terms of large scale vertical movement. There are the few high profile success stories that the 1%ers bring out to sell "the American dream" to the suckers so they vote against their own best interest, but they are rare and getting rarer.

I said relatively equal. As in comparison to other past and present systems. I was saying that the bottom 99.9% or so wouldn't be able to sustain their current lifestyle without taking a large amount of money (dollar-wise, if not percent-wise) from the top .1% or maybe even .01%.

For example, if you put a high estate tax on estates over $500k or so, and use the money to provide better education for the majority of the populace, that is an attempt to level the playing field a bit more. Of course it's never going to be perfectly level but we're a hell of a lot more equal than feudal times. Less equal than Australia and some European countries.

It isn't that hard to get rid of a loan. Just pay it back. I worked a bunch of jobs so that I could graduate college debt free, but my wife borrowed her way through grad school (when we got married her dad quit paying, as it was my responsibility then). It wasn't hard, we just tossed everything we had at the loan and "got rid of it" in a few years time. We weren't driving BMWs or eating caviar, but we still managed to have a great time and travel on the cheap. Heh, before kids. Kids are great, but they wreck your financial freedom (even with those credits and deductions ).

My best friend graduated with a degree he couldn't find a job with. He works at a job that pays OK but he could have got when he was fresh out of high school. He worked during college but his student loan payments are to the point where to pay them back in 10 years he would have to live at his dad's place because he wouldn't be able to afford rent. It would take over half his income. He works 60-80 hours/week.

I don't know when you went to college but I'm guessing it's quite a while ago when there were more government subsidies to higher education and before higher education costs started spiraling out of control. Also you may be aware that wages have been stagnating for many many years. The decline of private sector labor unions probably hurts more than anything.

It's a public forum. You can do whatever you want.

[David_Old_Jersey]

Originally Posted by JRM

But last time I checked it isn't feasable in the long term to have a system where more goes out than comes in

I think I saw something on the news about how that has gone .

[Pete7]

Originally Posted by JRM

I'm no economist, I'm just a guy that breaks things for a living. But last time I checked it isn't feasable in the long term to have a system where more goes out than comes in. ...

Don't want to get too political, but isn't that the system we have in the West? we have to expand credit / debt each year or it all caves in and then the toys (yachts) have to go.

Pete

[JRM]

At the risk of threadlock...

Originally Posted by jm21

You take more from people who are particularly well-suited to the system (e.g. warren buffet) and give money to those who are particularly unsuited to the system (e.g. disabled).

My family refers to me as "that tree hugging hippie in California" so I think it's funny that I'm the one debating this. But in the interest of keeping the thread open I'll just sit here and rock back and forth like rain man. He seemed to do quite well for himself in Vegas...

Originally Posted by jm21

I said relatively equal. As in comparison to other past and present systems. I was saying that the bottom 99.9% or so wouldn't be able to sustain their current lifestyle without taking a large amount of money (dollar-wise, if not percent-wise) from the top .1% or maybe even .01%.

For example, if you put a high estate tax on estates over $500k or so, and use the money to provide better education for the majority of the populace, that is an attempt to level the playing field a bit more. Of course it's never going to be perfectly level but we're a hell of a lot more equal than feudal times. Less equal than Australia and some European countries.

Back and forth. Back and forth. Who's on first I don't know he's on second...

Originally Posted by jm21

My best friend graduated with a degree he couldn't find a job with. He works at a job that pays OK but he could have got when he was fresh out of high school. He worked during college but his student loan payments are to the point where to pay them back in 10 years he would have to live at his dad's place because he wouldn't be able to afford rent. It would take over half his income. He works 60-80 hours/week.

Say hello to dad for me then... Welcome to big boy life, where you make sacrifices to satisfy your obligations. Did he have a car in college? I sold mine to pay tuition and to cut expenses. Live in a nice place? Me and three other guys lived in a $400 /mo hole in the demilitarized zone. It was a bummer because you couldn't have girls over, they were all afraid of the neighborhood, which I guess was also a bonus because girls were expensive and cut into the beer fund. Besides, the Hobie 16 was all the girl magnet necessary (as long as they had a car to get us up to the lake, but it taught me to aim high...).

I guess I'm saying that if you want to postpone some pain and live it up in college, then go ahead. Just don't cry about it when the bill comes due. No one put a gun to your head and made you go to some crazy expensive place. Heck, if I had it to do over again, I'd stay at home (I moved out as soon as I could while I still knew everything) and toss a couple years of Junior College in. Unless you're working for some place like NASA, no-one in the working world cares how smart you are. They care about results, as in how hard a worker you are and how much they can squeeze out of you before you shrivel up and die (or say screw it all and go sailing).

Originally Posted by jm21

I don't know when you went to college but I'm guessing it's quite a while ago when there were more government subsidies to higher education and before higher education costs started spiraling out of control. Also you may be aware that wages have been stagnating for many many years. The decline of private sector labor unions probably hurts more than anything.

I went to college within the last 20 years (heh, this year at least). So don't think I'm some old fart sitting around reminiscing about the day. The cost of tuition tripled in the five years it took me to punch out a B.S. And silly me, I discovered fun my sophmore year and lost all my academic scholarship money because my G.P.A. dropped to near Blutarksy levels. BTW- it was SO worth it!

I'm a card carrying member of my I.A.F.F. Local, the Admiral pays her dues regularly to C.T.A., and this thread will lock in two seconds if we start talking unions because there isn't a filter strong enough to cover what I'd have to say on the topic. Try being in one (or worse, be a tradesman on the wrong side of one) before you start bemoaning their decline.

Originally Posted by jm21

It's a public forum. You can do whatever you want.

Sweet, thanks. Your famous on FB right now (amongst the four people I know there), if it means anything to you... I applaud your idealism, I really do. But now it's time to either get on a boat and flee or sack up and join the real world.

If you would like to get on a boat and flee, I have a really nice Catalina 30 with an electric motor I'll sell ya... You can save the fuel costs to put toward the student loan!

[jm21]

Originally Posted by JRM

Say hello to dad for me then... Welcome to big boy life, where you make sacrifices to satisfy your obligations. Did he have a car in college? I sold mine to pay tuition and to cut expenses. Live in a nice place? Me and three other guys lived in a $400 /mo hole in the demilitarized zone. It was a bummer because you couldn't have girls over, they were all afraid of the neighborhood, which I guess was also a bonus because girls were expensive and cut into the beer fund. Besides, the Hobie 16 was all the girl magnet necessary (as long as they had a car to get us up to the lake, but it taught me to aim high...).

Neither of us had cars in college or before college. We lived in a run down 2bdrm apartment with three people. We had no hobie cat. I graduated in three years and didn't do much partying at all.

But now it's time to either get on a boat and flee or sack up and join the real world.

We're in the process of buying a boat and fleeing...hopefully not to find the grass is less green.

My wife will consume too much electricity to make an electric engine work for us.