[solveit]

There's nothing wrong with being in debt per se, and in particular, (federal) student loans and mortgages are loans rigged in favor of the borrower.

[LocalH]

I think being in debt is too normalized. I know there are specific financial instruments, that if one is savvy, can use to be in debt but come out ahead. But for the average person, I do not think mortgages and loans should be so widespread. Schools don't teach the upper level of financial suave, and neither do most parents who aren't already wealthy.

We should normalize buying a home and owning it outright, even if it takes more up-front capital. It's something that should have been done when housing was cheaper, if you ask me. Me and my girlfriend watch a lot of House Hunters on HGTV and almost every episode concerns someone buying a house with the expectation of mortgaging, so that they can get a house beyond their immediate means.

[beej71]

Out of curiosity, how are federal student loans rigged in favor of the borrower? Asking for a friend.

[erikerikson]

They are issued for something [contingently] incredibly valuable that cannot be repossessed. They are also generally issued at a lower rate of interest with little collateral, in part due to the fact that they cannot be discharged in bankruptcy and the resulting lower risk.

[edit: added "contingently" above. Some education programs have been found to be scams yet could be paid for with debt. I generally stand by the value of higher education and have found it to be a net benefit in my own life. The value has been strained as costs have shifted and the social contract is rearranged behind the backs of educators at all levels]

[xhkkffbf]

I'm curious too. The rates aren't particularly generous. Okay, maybe they're a bit lower than the private markets might deliver given the rates of default. And maybe they let you study whatever you want. A private lender might insist on funding economically worthwhile degrees.

The real issue isn't the loan, but the entire system. The colleges have really jacked up the price of a degree. That's the real source of the problem. The interest rates are much closer to the market rates for capital.