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December 27, 2012
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Why Should I Pay Off My Debts?

:icontbschemer:
TBSchemer Featured By Owner Dec 27, 2012
Why should I pay off my student debts if there's a chance that Obama will institute a policy of student loan forgiveness?

I can either pay off my debts early and have a chance of being punished for my responsibility by paying for everyone else's debts through my taxes while getting nothing for myself; or,

I can not pay my debts at all and continue accumulating 6% interest per year on the chance that Obama might make the taxpayers cover my costs.

In other words, just by remaining in power and making promises, Obama has created an economic incentive for me (and every other student) to engage in irresponsible financial behavior on the hope that we'll win the bailout lottery. This is one of the many ways a bad leader can cause economic damage without actually succeeding at passing anything, just by having the wrong philosophy. :omg:

In other words, suppose there's a 30% chance Obama could find a way to implement student debt forgiveness through executive powers, without going through Congress. If I have $30,000 in debt at a 6% interest rate, then at the end of Obama's term, I'd owe about $38,000 if nothing got paid off.

So If I choose to pay off nothing, I'd have a 70% chance of a -$38,000 value, and a 30% chance of a $0 value. That's an expected value of -$26,600.
If I choose to pay off everything ahead of time, I'd have a 100% chance of something between -$30,000 and -$38,000.

If the predicted chances are correct, I'm better off taking the irresponsible route, leaving me with a cost of $26,000, rather than a cost of $30,000-$38,000. Obama's presence in the White House gives me and plenty of other members of this economy good reason to be financially irresponsible and harm the country as a whole.
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Devious Comments

:iconalphamale1980:
alphamale1980 Featured By Owner Jan 2, 2013
Actually there are already several programs that will allow you to have your debt forgiven. Most require some kind of service like working at under serviced inner-city schools. But they ALL require you to be current on your student loans. Not staying current, disqualifies you for possible forgiveness (basically it proves that your an untrustworthy little shit). I'm sure any further programs will have similar clauses.
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:icontbschemer:
TBSchemer Featured By Owner Jan 3, 2013
Of course, my loans are in deferral thanks to grad school. So, just to stay current, I don't have to pay a cent until 2016.

My biggest problem is interest accumulation.
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:iconbryosgirl:
bryosgirl Featured By Owner Jan 1, 2013  Hobbyist Writer
It's naive to believe that loan forgiveness is incentive to be fiscally irresponsible. The bureacracy involved in these policies, not to mention the requirements for eligibility, are stringent, and only a small percentage of the people who are eligible will actually receive the go-ahead. By that point their credit rating will be shot to hell and back, putting credit-dependent goals such as owning a home, personal business or working in certain industries/companies on hold for at least a decade.
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:icontbschemer:
TBSchemer Featured By Owner Jan 3, 2013
On the contrary, it's naive to believe that these programs will be so perfectly designed as to avoid incentivizing fiscal irresponsibility. I mean, it was exactly that sort of government-incentivized irresponsibility that caused the 2008 financial crash. Why should we believe that the new government programs will be perfect and incapable of causing unwanted side-effects?
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:iconbryosgirl:
bryosgirl Featured By Owner Jan 3, 2013  Hobbyist Writer
I never said it would be perfect. In fact it is always the opposite. The past decade has shown just how much damage these forgiveness policies can cause to a national economy. Lenient credit policies paved the way to the cliff, but the introduction of forgiveness policies is what shoved us into a recession. Regardless of how you look at it, though, abusing social programs only screws yourself in the end.
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:iconyangfeili:
yangfeili Featured By Owner Dec 30, 2012
I'd be fine with debt forgiveness or other increases in financial support for education so long as it was accompanied by a MASSIVE increase in the academic admission standards. It's bad enough that all the dumb rich kids can get in. It's even worse with all the dumb poor kids dragging things down.
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:icontbschemer:
TBSchemer Featured By Owner Dec 31, 2012
If you want higher admissions standards, then we need to stop giving out such easy loans.
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:iconmgonzales041090:
mgonzales041090 Featured By Owner Dec 31, 2012  Student Traditional Artist
Giving out funding for an education based on a person's level of income is pretty fuckin' discriminatory dude. I'm of the school of thought that education is a right, and not a privilege. It's why I favor tuition free college, similar to certain European countries. Some fund the first 2 years, others fund the entire trip. We, as a country, have dropped in educational rankings. Education first. Books, not bombs! <3
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:iconjeysie:
Jeysie Featured By Owner Dec 31, 2012  Hobbyist Writer
Plus logic dictates that if fewer people could afford to go to college, standards would drop even further, as colleges literally couldn't afford to turn away or flunk out the few people that could afford to go.
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:iconyangfeili:
yangfeili Featured By Owner Dec 31, 2012
Yeah, that's pretty much how I've figured it works. Government starts tossing around free money for students, the universities lower their standards in response to pack in more students, many of whom have no business being there and just ruin the experience for everyone else.

I've personally seen professors go to extraordinary lengths to fudge the numbers so that students don't fail. I'll never forget the absurdly easy class where the professor nevertheless ended up putting 100 percentage points of extra credit on the final. The extra credit section consisted of all the questions from the previously graded, corrected, and returned tests from earlier in the semester, so the students were basically being handed a free pass on the course.

In all fairness, I'm sure the professor was under pressure from the administration to make sure all the stragglers passed. Failing students don't bring in more of that sweet federal money next year. Better to keep them coming back rather than let them suffer the consequences of their own choices.

This was at a reasonably prestigious private university known for having higher academic standards than the other local universities. My family and friends tell me that it was even worse at the big "standard" public university that most people around here go to.
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:iconjeysie:
Jeysie Featured By Owner Dec 31, 2012  Hobbyist Writer
Actually, by your logic, if fewer students could afford to go to college, then colleges would drop their standards even further to compensate. Because if only the rich can afford to go to college, thus vastly reducing the numbers and your income, you sure as hell don't want to drop any of them because you'll really be out of money then.

Whereas with more students able to go, you can afford to lose a few without going out of business financially.
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:iconthe-ever-eternal:
the-ever-eternal Featured By Owner Dec 30, 2012
i think yur seeing the glass half empty here.

the biggest problem about politics isnt the fact we don't agree but theres no one looking into how it could be done, people always argue over how it could happen as if they see the future and say its a bad idea and then there the others who say what should happen but are always shot down because of the problems that idea would cause.

never does it occour to them to ask a professional how to improve the idea, this could work, but we need people who actually know the system and have a willing ness to change it to do so
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:icontbschemer:
TBSchemer Featured By Owner Jan 3, 2013
You're thinking like a technocrat. We already have countless "experts" studying these problems, and their advice has gotten us into this mess in the first place.

Think of how Christina Romer predicted that if Obama's $1 trillion stimulus plan was passed, unemployment would never go above 8%. Where did it end up? 11%? And GDP growth didn't end up anywhere near where she predicted.

See, the thing you need to learn is that for any given "solution" or prediction, you can find so-called experts to support it. And that's what politicians will always do. They'll find an expert who uses assumptions that match their political philosophy, and that expert will design a plan that's predicted to give good results under those assumptions.

The problems arise when those predictions are wrong, yet our society fails to question the original assumptions. That's what happened with Obama. Everything he and his "experts" have predicted economically has been wrong, yet the media still fell in line for his views and convinced the public to reelect him.

What we need is a new set of assumptions. Keynesianism has failed. Socialism has failed. Libertarianism offers a better shot at working, and deserves a chance.
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:iconjackmolotov3:
JackMolotov3 Featured By Owner Dec 30, 2012  Hobbyist Photographer
There are special rules right now, which prevent student loans from bankruptcy protection like the type you run up purchasing shit you don't need.

Student loans are singled out in this regard, they need to be singled out.
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:iconjackmolotov3:
JackMolotov3 Featured By Owner Dec 30, 2012  Hobbyist Photographer
I meant to say "un-singled out".

gah,
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:iconjeysie:
Jeysie Featured By Owner Dec 30, 2012  Hobbyist Writer
(Ironically the majority of personal bankruptcies are due to medical bills.)
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:iconjackmolotov3:
JackMolotov3 Featured By Owner Dec 30, 2012  Hobbyist Photographer
nice point, but irrelevant.

I know I made a typo, but my argument is that student debt shouldn't have special rules baring people from protection against bankruptcy filing.

Especially when out of control spending on shit you don't need is not singled out.
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:iconjeysie:
Jeysie Featured By Owner Dec 30, 2012  Hobbyist Writer
Ah, OK. I misunderstood what point you were making. Sorry about that.
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:iconjackmolotov3:
JackMolotov3 Featured By Owner Dec 30, 2012  Hobbyist Photographer
its ok, I also made a typo.
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:iconsaidryian:
Saidryian Featured By Owner Dec 30, 2012
You're the person who keeps whining about the government and Obama taking away freedoms and removing liberty from the American people.

And right here, in an instance where you've been given extra choices, you whine about being given more freedom to act however you want :rofl:
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:icontbschemer:
TBSchemer Featured By Owner Jan 3, 2013
You're missing the point. Should I even have this choice? Why should I have the opportunity to just dump my debt on the rest of you?
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:iconsaidryian:
Saidryian Featured By Owner Jan 3, 2013
:rofl: Wow. Just wow.
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:icontheredsnifit:
TheRedSnifit Featured By Owner Dec 29, 2012
Implying that Obama actually intends to forgive student loans, and wasn't just using it as cheap campaign bait.
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:icontbschemer:
TBSchemer Featured By Owner Jan 3, 2013
Yeah, I honestly will not bet on the generosity of government for my well-being. I think a lot of students who voted for Obama are going to be severely disappointed.
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:iconwhiskyomega:
WhiskyOmega Featured By Owner Dec 29, 2012  Professional General Artist
I believe Obama's purpose for the debt forgiveness is only for those who have gone long periods of time unable to afford their monthly STL bills and can physically prove they cannot pay them; so unless you can prove you can't pay your STL I don't think the forgiveness plans will apply to you.
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
I could easily make my bills large enough to be unable to afford them. That would be a lot easier than the responsible thrift I currently exercise.
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:iconjackmolotov3:
JackMolotov3 Featured By Owner Dec 30, 2012  Hobbyist Photographer
or mabey going to college is better thing to do that stock up on shit you don't need.
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:iconthisismyboat:
thisismyboat Featured By Owner Dec 29, 2012  Student Traditional Artist
I don't think it's "I have a lot of debt, make it go away" that'll get you the forgiveness. I think it's more like "I have a lot of debt, I don't have a house, I can't find a job because I'm disabled, I can't use anymore credit cards because my credit is so bad, please help me get back to normal".
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
If that's the case, then all those students who voted for Obama just because they thought he understood their debt situation better are in for a rude awakening
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:iconwhiskyomega:
WhiskyOmega Featured By Owner Dec 29, 2012  Professional General Artist
Oh heck, we could all make our bills so unafordable it would be pathetic to even try paying them, but why would you want to ruin your credit that badly?
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
It's worth a lot of money if a bailout is looming...
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:iconsemi-surreal:
semi-surreal Featured By Owner Dec 29, 2012  Hobbyist General Artist
woo-hoo, student-loan forgiveness! I could sure use that.
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:iconchemicalalia:
ChemicalAlia Featured By Owner Dec 29, 2012  Professional Digital Artist
Some people have been financially destroyed by student loans and high interest rates, and I think that people should be allowed to declare bankruptcy in those cases just like anything else. Those people would actually be better off dealing with the repercussions of the bankruptcy than the loans that they cannot pay and continue to grow. If you're able to make your payments, you're probably better off doing so.

On the bright side, I paid off the last $25,000 of my student loans just this morning, exactly three years after I finished grad school! I was paying $1000 a month when I first started working and that was barely going towards the debt itself thanks to my 8.6% interest rate. I paid $14,000 in the past two years in interest alone, which is why I made throwing all of my savings at it my number one priority. I kinda fully expected at the beginning that I would be making these payments for pretty much the rest of my career.

I love my education, but I don't think I could honestly recommend the same path to anyone aspiring to do what I do, ever.
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:iconredmarlin:
redmarlin Featured By Owner Dec 29, 2012
To be fair, student debt is ridiculously high, in my opinion. I won't put up much of a fight if the government wants to help pay for it. All of it, that might be a bit too much, but lighten the load? Hey, sounds good to me.
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:iconrestinmotion:
RestInMotion Featured By Owner Dec 29, 2012
You finally did it! You made Schemer say something logical!
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:iconjeysie:
Jeysie Featured By Owner Dec 29, 2012  Hobbyist Writer
Schemer only says logical things when he thinks he's being sarcastic/making a deliberately bad argument.
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
Student debt is high because students choose to go to ridiculously expensive universities and then pick degrees which don't pay for themselves. This is a problem which is entirely avoidable for anyone who has the good sense to anticipate how their career will progress.

Certainly, some kids just aren't mature enough to properly plan their college education, but in those cases, they probably shouldn't be going to college until they've developed that sort of maturity. All this "everyone should go to college" bullshit coming out of the White House ignores the fact that many kids just aren't ready for it straight out of high school. Some of them need to just get a job for a year or two first so they can learn the value of a dollar, and learn what is being invested into their education.
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:iconjackmolotov3:
JackMolotov3 Featured By Owner Dec 30, 2012  Hobbyist Photographer
or there are no jobs.
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:icongussiejives:
gussiejives Featured By Owner Dec 29, 2012  Hobbyist Digital Artist
It's your credit rating, Schemer.
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
Nah, that doesn't get hit until my deferral for grad school is up. That means I've got 3.5 more years to not pay a dime, with no adverse consequences aside from interest accumulation.
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:iconmgonzales041090:
mgonzales041090 Featured By Owner Dec 29, 2012  Student Traditional Artist
Interest accumulation is a pretty adverse consequence dude.
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
But it would all be paid for if I got a bailout.
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:iconmgonzales041090:
mgonzales041090 Featured By Owner Dec 30, 2012  Student Traditional Artist
You know you have to pay back bailouts, right?
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:icontbschemer:
TBSchemer Featured By Owner Dec 30, 2012
Not all of them.
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:iconndifference:
ndifference Featured By Owner Dec 28, 2012  Professional Writer
Are you proposing to become the very same type of asshole you claim to despise?
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:icontbschemer:
TBSchemer Featured By Owner Dec 28, 2012
The assholes are the ones who voted for these systems, not necessarily everyone who uses them.
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:iconhustlerdu:
hustlerdu Featured By Owner Dec 29, 2012
i don't understand such fierce opposition to these sytems honestly, it's not like the government assisting students in financing education is some kind of nefarious endeavor, i think the worst case scenario would be like overgenerousity, which doesn't exactly bother me, especially considering there would be plenty more wiggle room for that scenario if the government wasn't so corrupt and wasteful to begin with, i really am just not seeing student financial aid on the short list of dubious things our government wastes money on, if you're gonna complain about anything i don't think this is it.
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:icontbschemer:
TBSchemer Featured By Owner Dec 29, 2012
Government financing for education is the entire reason college tuition has skyrocketed so drastically in recent years.
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:iconhustlerdu:
hustlerdu Featured By Owner Dec 29, 2012
it's not the entire reason, it's a contributing factor, but government financial assistance is really the only viable solution that has been brought to the table thus far in respect to the problem of people not being able to afford education. what's the better answer? what would your solution be to the fact that education is so expensive that people can't afford it? do we monitor these institutions and make sure they're not over charging? i would be open to hear other solutions, but the point is if people can't afford to go to school we have a serious problem that needs to be solved. students persuing an education are not like leeches on the system, they are the foundation of the system, they are the future, if anything is worth the collective support it is people seeking education. it's just if anything is worth paying for this seems like it would be it to me, unless you want a country full of unskilled neanderthals, people need to attend these institutions to develop skills of value so they can contribute accordingly. education needs to be accessible, it's not accessible enough right now, so we need some kind of solution, if you have a better one i'm all ears. i think the government financing the education of people who need it is very viable, you have pointed out legitimate problems, but i think they're very solvable problems. i just don't understand how any government is going to tell me they can afford to finance fucking drone warfare but simultaneously they can not afford the education of citizens in their own country, it's nonsense, it's an illumination of how corrupt our governance is, there's not any excuse for it.
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:icontacosteev:
tacosteev Featured By Owner Dec 29, 2012  Hobbyist
So talking against said system but then using said system isn't hypocritical at all?
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