In Sweden taking student loans is the most common option if you want to move out of your parent's home and study.
Its not uncommon for Swedish students to have 23K$ or more in debts.

Why should taking students loans be worse than taking mortgage loans or car loans ?

I have a 100K$ debt after taking my degrees abroad, but I bought a used car and only plan on renting an apartment for the foreseeable future, so in the end I still have less loans to pay off than your average Swede who buys a new car and/or house through borrowed money. For example every month I pay some 400$ to pay off my debt, my friends who have a house, car and/or kids pay a lot more than I do every month. So I'm not worse off in any way.

I wonder that, as well. Putting a car on credit is a losing proposition if one is concerned about retaining value. It's an iffy thing for a mortgage since values go up and down with the general economy. At least a student loan will net one the possibility of higher earnings, and is thus a bit of an investment in oneself that has a chance of paying off quite well.

As you and others mention, it's often the personal budgeting post-degree that causes the problem, and not necessarily the loan itself. For many grads it's New Degree = New Job = New Car and New Furniture. And then "my student loan debts are killing me!" as the grad is now financing all of this other stuff on top of the student loan. Not saying that's the only reason, but it's certainly a factor.

Some sort of financial counseling / personal budget training would not be a bad idea for newly-minted grads. For everyone, really, but especially those coming out of school with debt to manage.

i don't mind paying a reasonable sum to have the chance to get a more prestigous or better-paying job. however since degrees don't almost guarantee that anymore, and employers only seem to care about cutting costs, smashing unions, and raising their CEOs' paycheck to insane levels, those pieces of paper feel fancy ego-boosters for rich people.

donald trump would have still inherited all that money even if he didn't graduate.

There is a way to get the majority of funds reimbursed in America when attending college, although that involves serving in the military prior and meeting specific qualifications (and I am not sure how budget cuts will affect future recruits)... Not an ideal situation.

Gotta keep that cannon fodder coming for the wars citizen.

The second reason I don't really understand. The government is already backing the student loans, so everyone should be willing to lend money to students. Still these loans could be able to be discharged after a while. It's about giving people a second chance.

Also for foreclosures of houses, isn't there the option to return the house instead of repaying a mortgage, so you can effectively discharge the whole mortgage if the asset is under water (i.e. the mortgage is higher than the value).

I like the system more where everyone can be free after some time of suffering. It's just simpler and maybe even better to have this possibility to discharge all personal debt after a while and the risk is just on the lenders side and the interest rate.

That way everyone gets a second chance and is actually motivated to allways give his best at only slightly higher costs in the beginning.

Otherwise a valid strategy might be:

- take the largest student loan I can get
- try to get the best education by paying with this loan
- try to get a well paid job

case a: I get the job
- pay back the student loan

case b: I don't get it
- take on more loans
- have a good time while it lasts
- spend the rest of my life at the poverty limit working in the salvation army and playing cheap GOG games on old hardware

yeah... more hobos for USA. actually that is how many american citizens became homeless. they can't pay up because the "sub-prime" interest rates got too high, and the bank took back the house. not really related to student loans though.

http://www.theguardian.com/world/2008/jun/25/usa.subprimecrisis

Important fact that gets left out of this discussion: private vs public colleges.

Public colleges (aka state universities) are supported by local governments, and have reasonable prices. People graduate with reasonable amounts of debt unless they do something stupid. 20,000 is the high end of what I heard about, not the ridiculous 100,000 typical for high-end law or medical schools. Some degree programs even work with businesses to get students internships that pay nearly professional wages during the summer.

The downside to state schools is that because they are supported by the government, they take more students, including marginal ones, and can get a bad reputation. But many are excellent and about 25% of the cost of top-tier private universities like the Ivy League schools.

I don't know how college works in other countries in detail, but it sounds like you went to the equivalent of a public university, which is what most people in the US do. We can also defer loans so long as we're taking courses, which sounds very similar to what you are doing with your loan. Your situation is pretty typical of US students.

Perpetual students are very annoying. Taking advantage of the rules like that doesn't work in the real long-term, but it works for long enough that they're a burden on the system for everyone else.

Situation's more complicated than it looks in international newspapers, like most things.

Most of the people with sub-prime loans shouldn't have been loaned to in the first place - there was a law passed by Congress to try and reduce discrimination, and it wound up opening up a flood of predatory lending. But that was for a limited segment of the population. Medical bankruptcy, bad home life and mental illness are also big risk factors for homelessness. The medical bankruptcy issue was part of the reason Obamacare passed, because too many people were skipping insurance and then struggling to pay bills when something did happen.

The government does not generally back student loans in the US. The government is a lender for some student loans. That doesn't mean it's backing student loans in general, it means that the IRS comes after people who want to default. No one wants the IRS after them, it is one of the few governmental agencies that does not mess around.

The government did sorta-kinda back mortgages, and we all saw how that turned out.

US college students have real trouble viewing college as preparation for a future career - I blame too many 'follow your dreams' stories but YMMV - and so while everyone would be happier if case A happened it's a relatively uncommon story. That's part of why good lenders avoided student loans and predatory lenders were a big part of the market, leading to the current split private/public loans we have now.

Discharging a mortgage if the house is underwater is a complicated process, still leaves a huge black mark on credit records, and is generally a bad idea unless there's no way to recover the value and the person has somewhere else to go.

Financial literacy in high school and college students is incredibly low. If every one of them could balance a budget and track spending vs income we'd see college costs become rational in a hurry, but since at last count less than 25% could do that we're in for craziness a while longer.

Honestly, I wouldn't see it any other way. Private Unis teach the same thing in the long run, except they're more strict and have to keep certain investors happy. They also seem quite dodgy behind the scenes whenever something scandalous happens.... Money am I right?

It's funny because, just recently here in Aus some private school students 'attacked' a facebook page belonging to certain public school students. This was along the lines of "I'm so glad I have a rich family, I won't be a dumb shit like you, look forward to me being your boss some day"... just completely rich kid stuff like that. It received quite a backlash though, and one public 'no-hoper' even corrected this guy's speech with all of its formatting errors, poor punctuation, and politically incorrect terms.

All I'm saying is, more money just means the further your head will go up your own backside. Education is as good as the student wants it to be, depending on how they use it in the end.

None of what I said probably makes any sense but hey, I tried.

I agree with one caveat - expensive, high-quality universities can make a big difference for graduate students due to research opportunities and professor quality. Often cutting edge research needs expensive equipment than lower-tier schools simply don't have. For undergrad, not so much.

A lot of the really well-known schools are private universities, like the Ivy League schools, and they do attract better professors and students sometimes. There are also a lot of scummy private universities like the Kaplan ones too though.

nevro

Life in the US isexpensive. Being a student there is not easy but it's a good start in life as you'll get a lot of experience from being by your own.

Yeah, Europe is good for studies but I woldn't live there

I am originally from Germany, and while college there is 'free' it is pretty unlikely that you get admitted there after the hellscape that is Gymnasium and Abitur. I have had two friends who were enrolled in german university and, after four years of studying, failed their final exam twice which effectively cancels the four years of progress and forces you to start over. My Mother didn't study until she was 35 and was straight up told that she is probably too old and should give up. The German school system is based on psychological terror that, I would assume, is the leading cause of depression in young adults. I know I shed more than a few tears with my fellow classmates whenever an exam came up since two exams determined 90% of your grade. Anyway, my mom moved to America instead and now has a degree that allows her to work in a hospital. My friends came over here and are also happier for it. I also was able to get a degree and work a reasonable job. So, from my experience, this system is more practical.

I am not a fan of student loans and expensive college, but at least it literally gives anyone the chance to take a shot at it. Most fail by either not graduating or graduating with a degree that is practically useless (fine art, for example). Nevertheless, I prefer going in debt to get a chance than to stay out of debt but work for minimum wage at a retail job. Nowadays though, I wouldn't really encourage kids to go to college unless the job really requires a degree. Programming jobs, for example, often do not require degrees and going to college for it is a waste of money and time.

I personally graduated in IT at a university and only paid 2000 dollars; everything else was covered by Financial Aid and a minor scholarship. We europeans like to stick our noses up at the american systems (and that certainly includes me), and while I don't think the actual education is all that great, only opportunity matters today since it's no longer a meritocracy. Bad workers can often get a job by being clever or knowing the right people, while people with merit get left behind because they stumbled during the interview. You can be cynical about a lot of things here, but paying for college isn't terrible, and you can avoid student loans.

If you want to take a shit on something, take a shit on how badly society is managed, how the job market isn't a meritocracy, how education is bad and has been proven to be bad (we still use grading systems even though they are proven to be useless from what I have read), how we still have to work 8+ hours five days a week even though we live in 2019, how we ignore nature, how modern post-capitalism stifles creativity, how many americans cannot get a job unless they have money for a car because public transport is a complete shitshow in most of America, how we still have absolutely useless dress codes for interviews (proving only that, again, merit doesn't matter but wasting money on a suit does), how we still do daytime savings, and other such societal nonsense that we just can't leave behind us because it probably takes money out of some politician's or CEO's money.