What am I missing here? Is it too hard to Google "income based student loan repayment" and read for a few minutes to know what to ask for? Or these people would rather have creditors calling them all day and a credit score of 300?

It's a completely separate matter that the Obama administration setup a system where we pay $1800 to debt collectors to collect $45 just so that the payer can default again. What is the point of collecting $5/month? I understand maybe trying to get at least a regular payment setup -- that's probably worth paying the debt collector $50 if they can manage it. But $1,800? Wow...

– parent loans are based on the parents' income, which makes income-based repayment useless

– loan servicers don't want you on income-based repayment, so if you ask them about it they're not helpful whatsoever

– they fuck up the paperwork CONSTANTLY, almost every year I have to apply for income based repayment 2-3 times because they lose the paperwork or make some asinine error

– no one is actively educating grads about the program because there's nothing to be gained from it

– if you get married your spousal income is factored into the payment, even if your spouse also has loans

It's not a one time simple thing and you're done situation. It's a pain in the ass and almost no one will help you figure it out.

This is an industry that thrives on the illiteracy the average American has in personal finance. I know multiple people who ruined their credit because they didn't know the unemployed get temporary loan deferments.

Both times they called me, emailed me the forms, and helped me set everything up. I think they people who are defaulting are the ones trying to ignore everything and ducking calls.

Parent loans leave the parent on the hook, not the student so I don't know why youre bringing that into the fold.

Things aren't that complicated, you have multiple (usually 8, one for each semester) loans at different interest rates and you need to repay them. Not that hard.

Because the family arrangement might still be for the student to help repay them -- or be forced to later by changing family economics -- when he graduates.

These are supposed to be college educated Americans.

It never ceases to amaze me some of the basic stuff in life I still don't know.

Luckily I researched how to pay off my undergraduate student loans in the best manner as soon as it was time to start ponying up.

Is this common? How do we educate people about this? How can we have a serious conversation on tax reform when people don't know what system we have now? Personally, I want an end to most deductions and credits (but honestly because there are so many that I'm not using and never will use). However, if wager that the only people who know about them are the people who use them.

For example, the Masters exemption for Airbnb hosts makes no sense.

I don't know how we can ever actually simplify the tax code.

(And even if you feel like that assumption is nonsense, since it results in absurd situations like an income increase resulting in a net loss: I would say most Americans don't expect the laws or tax code their government makes to behave sensibly, so this just isn't a red flag.)

> How can we have a serious conversation on tax reform when people don't know what system we have now?

We have this issue in a number of areas, not just taxes; e.g., tech issues (encryption, net neutrality) in politics.

(And I find this happens a lot, not just in politics. For example, I feel that I've run across a number of people who think that because C++ lacks garbage collection, that C++ code must therefore be littered with manually new/delete calls; thus, GC is "better", because folks don't realize that an alternative, RAII, exists.)

Although occasionally they were hit and miss (pornography is as bad as cocaine was a memorable one), I really valued them as useful life skills. The Wikipedia article gives an excellent definition [0]:

> Personal, social, health and economic (PSHE) education has in various forms been part of the National Curriculum for schools in UK since 2000 ... PSHE education is defined by the schools inspectorate Ofsted as a planned programme to help children and young people develop fully as individuals and as members of families and social and economic communities. Its goal is to equip young people with the knowledge, understanding, attitudes and practical skills to live healthily, safely, productively and responsibly.

[0] https://en.wikipedia.org/wiki/Personal,_Social_and_Health_Ed...

Summary versions that could easily be knocked out in a single year-long grade school course.

The biggest point of teaching these to everyone would be to address income inequality. Because if you're from an affluent family, these topics are usually information you have ready access to via your parents. If not... you really don't, and that has an impact on your chances of success in life.

Tons of them can't even place France on the map...

There are innumerable books on personal finance. I expect a college educated person would have no trouble picking one up and reading and understanding it.

It's not quantum electrodynamics.

I think most degrees are just rote memorization. You must be referring to comparative literature or math or philosophy or something.

If you picked a college that consisted of rote memorization, you were rooked. Due to google, rote memorization is rather pointless.

I see this a lot with junior devs at work. People are intimidated by what they don't know and ask for help or get frustrated or despondent - approaching things with a bit of bravery and analytical method is unusual. Those people are exactly the ones you want to keep, of course.

Ask people these questions:

1) I'm going to sell you a TV. It's priced at $300. I'm going to give you a 10% discount. What will it cost after the discount?

2) I'm selling you a washing machine. You're paying me $500. It's already had a 10% discount. How much did it cost before the discount?

Most people can get an answer for (1), but they do it by mashing buttons on their smartphone calculator app. They don't know the method; they would not be able to talk through the method on paper. Most people can't give you an answer for (2) even after some time mashing buttons on their calculator.

People can't spot misuse of percentages (eg, the "politician's bridge" (also called the Mexican Bridge from How to Lie With Statistics))

This isn't just the general population. We find some scary lack of understanding of percentages in doctors.

https://en.wikipedia.org/wiki/Confusion_of_the_inverse

> In one study, physicians were asked to give the chances of malignancy with a 1% prior probability of occurring. A test can detect 80% of malignancies and has a 10% false positive rate. What is the probability of malignancy given a positive test result?[3] Approximately 95 out of 100 physicians responded the probability of malignancy would be about 75%, apparently because the physicians believed that the chances of malignancy given a positive test result were approximately the same as the chances of a positive test result given malignancy.[4]

> The correct probability of malignancy given a positive test result as stated above is 7.5%

Gerd Gigerenzer's book Reckoning with Risk has many examples of this.

The particular students I met did not understand the idea behind percentages and could not calculate 10% of a given price.

This is what happens when you dog learning arithmetic in school, wondering what use it possibly can be. Not understanding arithmetic will cost you real money, a lot of it, throughout your life.

EDIT: The PAYE plan does not take into account spousal income if you file taxes separately. People should be aware of this.

> All that's needed to enroll is some paperwork that enables contracted loan servicers to confirm borrowers' annual earnings, but experts inside and outside the government say they don't know why this step isn't completed, and distressed borrowers are left stuck in debt collectors' sights.

My guess would be that the loan servicers in question aren't bothering to tell anyone about the program, and nobody else can make it available in the first place. Even this article just mentions "some paperwork" instead of mentioning any details.

If you aren't already aware of this option, how are you supposed to know the exact phrase to Google for? Maybe the issue is that we need more education about the options available for repayment.

Probably depends on the degree someone would associate getting a piece of paper for time served in a university as well as coming out heavily in debt is equivalent to an education.

> An educated person You seem to presume that just because someone has student loans, they are educated. If you look at the DoE and Congress going after the predatory loan practices of for-profit colleges in both misleading recruiting and sub-par {education, graduation, job prospects}, there is a sizable population of people with large student loans and nothing to show for them.

Edit: I missed this part:

> The consumer bureau estimates that the vast majority of borrowers who rehabilitate their defaulted debt with $5 monthly payments are eligible for $0 payments after they exit default, under an income-based repayment plan. But about 90 percent of debtors who rehabilitated their debt failed to enroll in these programs, according to the CFPB’s analysis.

In that case $5 * N months is an inexpensive temporary peace of mind even if the looming debt remains.

The best thing that she was able to do was to declare chapter 13 bankruptcy, which shut down the collections bullshit and trickery and let her pay debt down. In her case, the student loans picked up a prorata share of her payment which put a dent in the balance.

Or am I misunderstanding?

Then they go into rehabilitation with minimum payments, so they can get more student loans and not pay those back either. And the saga continues

In other words, the government is paying through the nose in order to artificially reduce actual default numbers.

Tuition fees are still outrageous compared to what they used to be, the subsidies are slashed to nearly nothing, but at least you're not going to be bled dry if you can't get a job when you graduate.

They did try to make it bikeable, by increasing parking costs and getting the county to reduce bus service. Oh, and the shower areas that UW/UWB/Seattle Colleges put into their new buildings to get LEED certified? Those are all locked up, cause screw bikers!

1. Have money to buy a new car

2. Can buy a new car every year

The point is not entirely without merit.

This is a major city but not like SF or somewhere crazy.

There's never really been "scary" places to live in Toronto apart from a few neighbourhoods and housing projects. The places that people describe as scary just have a lot more "character" than other parts. You'll see mentally ill people on the street, those with physical disabilities, those who are dirt poor. In other parts of the city they're swept away or ignored.

What you're describing is gentrification. Gentrification has happened.

Of course those are just anecdotes, but the data confirms it. Crime rates have declined meaningfully over the years. Gentrification made these nice places to live, but the decline in crime is why they are less scary. Unless you are trying to imply that crime isn't scary?

I've known people that have lived in Parkdale for thirty years, and while it's better now, less petty crime, it's never been an especially violent place. "Sketchy" in Toronto means places where you can't leave your bike unattended for six seconds or where your garage will be ransacked by people every couple of years if the door isn't locked properly.

Gentrification pushed the troublemakers further away, jacked up rents, and changed the demographics substantially. It's a whole different town in some places.

Don't talk average car prices, some people spend stupid amounts of money on luxury vehicles. Look at the easily accessible, low-cost options like Kia and Hyundai. Those are half that price.

When I was in school the tuition was $3500/yr. and I was in one of the most expensive programs in the whole university. I knew people in other programs paying as little as $2000/yr. Foreign students, who didn't receive any subsidies, paid about $19,000 for the same thing.

That was the kind of money you could easily make over the summer even at a mundane job if you were careful about saving.

Now for a basic arts degree get ready to fork out $10,000 or more. Some CS people are paying $16K a year. I'm not sure how you'd come up with that kind of scratch except with a student loan.

Education is not something that should be driven by demand pricing. Of course there's demand for education, society demands it, and as such, society should help offset the costs. Would you rather live in a place where half the people had a university education or where half the people had barely finished high school?

Just imagine if the government would simply employ people to advise debtors directly, how inefficient that would be, how unhelpful the advice would be, how much money would be wasted! They'd probably spend more money on that bureaucracy than what little revenue they'd bring in!

With our money, one might add.

After all, the reason people can't pay back their debts is 1) even state colleges are expensive, and 2) the job market doesn't reward degrees. It's not like changing the payer of tuition from the individual to the government is going to change either of those issues.

1 - There are an amazingly large number of well compensated overhead positions and offices compared to the 90s.

My alma mater, a large state university literally had to buy a 9 story office building to house administration.

2 - They spend money like water.

Example: The student internet network was run when I was there in 1996 by three telecom/network guys and a little army of student helpers who did installs and support for $4.25/hr. Now the costs are 25x, and the contractor has also built a small office building next door to house their people.

Example: Capital costs run amok. My alma mater has built a Tier-4 data center that is 15% occupied, a football stadium, a monumental second library that doesn't contain many books but does contain a lot of marble, a business school building, an art building, a bunch of extra dorms, and a gas fired power plant.

Example: New dorms are hotel like, with multiple fitness centers, TVs approximately every 10 linear feet, and associated parking structures.

The school I'm thinking about is doing well, but they've probably bonded nearly a half billion worth of capital projects alone that are not research funded. If you had 0% 30 year bonds that's over $1500 a student alone for 30 years assuming 10,000 students.

Drive around any town. The colleges and hospitals are wrapping up an orgy of construction in most places. The root causes are very similar

I'd say that we're getting less productivity gains out of degrees these days likely because a lot of people get a degree, then get a job that uses absolutely nothing they learned from that degree.

In that case, the degree is more or less worthless, and only proves to the employer that you can jump through the hoops. And between a known hoop-jumper and some random person, most companies would rather take the hoop-jumper.

sounds suspiciously like the advertising landscape, where it's a zero sum game. You pay $X to advertise to obtain Y% marketshare gain, but if your competitor also spends $X, it nullifies your Y% marketshare gain.

Replace the above with a college degree and job, and it seems the same.

In the case of raising the bar for a basic education across the board, at least in theory, we would expect to increase national/global GDP.

I'm not saying the increase in either case warrants the respective cost, but dismissing improvements in education on the grounds that life is just one big zero sum rat race seems overly simplistic.

I would not see many of the quality TV productions, because I don't have pay TV and I don't pirate. (Survivor etc).

Advertising spend paid for instant search, voice search, knowledge graph, Chrome and even Android.

On one hand, you really need to get a basic grasp of the fundamentals of a lot of areas. Even if you forget it, I like to think it's all in there somewhere, and would at least require less time to re-study it.

On the other hand, when you are actually working on a project, or at a job, typically you zoom in on one area of focus. For example, I have a Comp E degree from UIUC, and I had to take analog signal processing. Got a C, and never used it in my professional career.

But subjects that I have used, the course material was such a survey over the problems that it's only the very beginning of what you might need for the work. Therefore much study is required anyway on the job.

Then the practical experience, with test equipment, devices, best practices, isn't even usually taught in college.

If your best shot of getting a decent job requires you to first get a 40k piece of paper, many people will do this and they will put in the minimum amount of work to get what they want. I mean, it's efficient after all isn't it? Why work more for the same result?

[0] https://en.wikipedia.org/wiki/Positional_good

When I started college in 2000, in-state tuition at my alma mater (a major state university) was $3,021 for 2 semesters. I just looked and it's now $10,968 for the same 2 semesters. In 17 years, tuition went up 263%. From what I can tell, inflation over the same period was 42%.

At this rate, I'm scared that I will literally never be able to save enough to put my daughter through college without taking out loans, assuming tuition continues this trend. Something has got to give.

Now I have two kids in elementary school, and I'm socking away $2k/month for college savings, wondering if that will be enough. I figure $80k/kid.

Oh, it does. The schools and banks have just positioned themselves to capture as much of the added value as they can - which might take away a lot of the financial upside, but the difference in unemployment rate is still quite significant.

I was expecting significant to mean more than 1.3 percentage points[1] over the entire population of the same age[2], especially given those who have certain difficulties will most likely never attend college, and will struggle in the workplace because of those difficulties (think mental disabilities as an example). Handing a degree on a silver platter to someone in that position isn't really going to help them.

Knowing that such people exist and need to be accounted for, while seeing how close the numbers really are, I'm even less convinced that the market rewards degrees than I was before I read these comments.

[1] https://fred.stlouisfed.org/series/LNU04027662 [2] https://fred.stlouisfed.org/series/LNS14000048

( https://fred.stlouisfed.org/series/LNS11327662 and https://fred.stlouisfed.org/series/LNU01327660 ) -- edited to fix links

More interesting would be to narrow our criteria down to ages 25-34 to see how the rise in postsecondary schooling has changed the employment landscape over time. My opinion is that the unemployment rate is on trend[1], and while participation is unfortunately skewed from the 60s to the 90s due to rising of women coming into the workplace, since the 1990s there is little change in participation despite rising rates of postsecondary attainment[2]. If the workplace valued college, shouldn't we see a more obvious change over time corresponding with rising rates of postsecondary attainment?

[1] https://fred.stlouisfed.org/series/LNS14000089

[2] https://fred.stlouisfed.org/series/LNS12000089

That's not true at all. When I was in school, I used the state's public employee salary lookup to checkout how much my professors made. Almost all of professors (all of the professors and associate professors, and several of the assistant professors) in my department were making more than 100k. In addition, I was in a low cost of living area compared to most of the US.

I looked outside of CS as well. Humanities departments weren't paying that much, but most 100k pretty normal in most of the hard science departments, and the business school professors were making even more than the CS department.

Sure the adjuncts and grad students weren't making anything, and there are too many of them.

Also no one has ever asked if I had a degree either, but that's because it was on my resume. Without a degree you're going to get screened out before you even talk to someone a lot of the time.

There are different strata of academic. The adjuncts make peanuts and are either people who are stuck with a vision of being in academia or outside professionals earning a buck.

Tenure track professors end up making good money, which imo is well deserved.

Now you also have this middle tier of professors who are wandering nomads on 2-3 year contracts. They have a professor title, make better money than adjuncts, but tend to get dropped at the end of the contract. My neighbors boarder is one of these folks -- she commutes about 200 miles from her home and stays in my town for 2-3 days. This is her third contract like this.

Professors get big grants? They get nice salaries.

Facilities have also improved quite a bit at many schools.

Over the same period, the ratio of adjunct faculty to permanent faculty has also increased. Meanwhile, the permanent faculty are burdened with even more administrative duties (e.g., committees).

The administrators learned that they could eat high on the hog on the government's dime, and they have done so with a frightening degree of efficiency.

This is easy its because the government increased the amount students are allowed to borrow. It's a 1:1 ratio

That is 8 full time employees plus space & equipment doing a BS job that should be handled by local police (who also happen to be overstaffed). Should a university really be blowing that much cash needlessly?

>It's not like changing the payer of tuition from the individual to the government is going to change either of those issues

Some believe the ready availability of government-backed loans is partly responsible for the dramatic tuition increases.

The data from 1920 through 1990 was only for every ten years, then it becomes yearly after, which is why the first part of the graph has more straight segments. Note the tuition axis is on a log scale.

Comparing Stanford tuition growth by decade to inflation, here is how much Stanford tuition every 10 years was above the inflation adjusted tuition from 10 years earlier:

  1930: 183% 
  1940:  41%
  1950:  13%
  1960:  22%
  1970:  85%
  1980:  27%
  1990:  39%
  2000:  29%
  2010:  23%

I'd like to see similar data for other schools.

It's not an easy task to reduce the cost of something... this is even more so when the government is the one doing it.

Kind of like how Canada uses this one simple trick to cut their health care expenses.

A great example of laws purposefully foot binding & hobbling organizations is USPS, who is not allowed to up the ante and offer any modern services, and has to severely overfund their pension obligations, to the point that they are funding pensions for people they haven't hired.

Americans really need to get over their dumb cultural hangups on a lot of issues. (Also, universal healthcare does enjoy very wide support already.)

If I'm not mistaken, historically, only the rich have gotten these sorts of degrees.

Liberal arts teach you about thinking.

I dual majored in CS and History, concentrating on the path that Marco Polo supposedly took to China's the people and cultures there. The later has been far more helpful to me that the CS stuff, which was mostly theoretical bullshit.

You did get a fairly in-demand degree job-wise to go with it, though. Do you feel like the history degree by itself would have been good enough work-wise?

I struggled with choosing CS because everyone assumed I'd go to school for computer related stuff from age 8. I wanted to be sure I did what I wanted to do. But I also wanted good job prospects!

End of the day, CS opened doors to good jobs immediately after college. Without that, i problably would have gravitated towards teaching, sales, law or something similar.

Between luck, hustle, timing and what I know (not necessarily in that order), I'm pretty happy with how things have turned out. Had I taken another path, I tend to believe I would land in a similar place. But who knows!

I'm fairly confident you're quite mistaken.

The craziest thing is that this has been a totally first-world thing. Any english/american university student will tell you how engineering degree courses are made up predominately of foreign students, where-as the less employable and "trade"-producing courses are dominanted by the firsr-world population.

I did Physics. It was 130 students 120 white male, 9 white female, 1 black female. Zero international students

Same university, but mechanical engineering, 70%+ black, 70%+ international students (india/china essentially).

So, to answer your question to what happened to trade schools: they still exist, but the first world young white generation doesn't want to do it anymore, and foriegn/black students have filled in the gap, for whatever that may be.

It doesn't seem to have helped much if all you need to not default is $5/mo and yet what's the default rate again?

It's not as if we are spending $38 for every $1 in student loans - the vast majority of them have no money spent on collections.

$38 seems crazy high to me, and given the fact that it's the federal government in charge I'm sure it's horrifically inefficient, but we can't just walk away from the money or it all goes to hell.

I don't see a problem with that. How about this - in a similar manner to the 'starve the beast' ideological mantra we can starve the student loans beast to force change.

(Just like starve the beast I expect that it wouldn't work and we'd just end up totally messing up some systems that rely on that money, but desperate times right?)

Student loans are completely outside of this framework because they're risk-free for the lender and can't be discharged at bankruptcy by the lendee.

Because of this the loan costs for those that present a good and bad debt proposition are basically the same - I'd call this more of an abuse.

And I know they're technically optional. What I was saying is that we shouldn't be trying to build the idea that it's OK to default if you're better off financially not paying people back into our culture. Trust is important to the functioning of society.

I disagree with this. We saw people during the GFC screwing themselves by continuing to pay mortgages that they were underwater on out of some misguided sense of honour.

In that case, they should have walked away and left the bank saddled with the stranded asset. Loans are a commercial proposition with a risk and a reward. Introducing washy hard to define concepts like 'trust' to pressure one side only screws the good guys - the unscrupulous ones will do what they want.

Better to have a clear playing field where both lenders and lendees understand there will be situations in which the loan isn't going to get repaid and have the risk of that priced in.

That's how you end up in a society that no one wants to live in. We should find ways to bring the standards of business up, not bring the standards of individuals down.

I bet people get really irresponsible when they realize they don't have to pay these debts, they just have to take a massive hit to their credit score....or maybe, most people don't become irresponsible, the people that really need the help get it, and a couple take advantage of the system.

You're spending other people's money. Treat it with respect.

What about the shame of the lender for making poor lending decisions?

> We shouldn't try to normalize it.

Why not? The only reasons you've given is "because it makes for a nicer society" but I don't actually see how it does. All you're doing is taking one of the few tools the individual has to mitigate financial problems away from them because you want to moralise their failure.

It's not like declaring bankruptcy is a walk in the park. It's a total pain and really negatively impacts your ability to do a lot of stuff. It is already a last resort for individuals and they shouldn't be stigmatised for taking it.

> You're spending other people's money. Treat it with respect.

No you're spending your own money, gained through a business transaction in which the lender has accounted for the risk of non-repayment.

I actually think it makes for a potentially nicer society if lenders are incentivised to have a stake in the successful outcome of their clients. If the client is culturally conditioned to try and pay their loan even after the point it makes no sense to, then the lenders will put more and more onerous terms and rates on loans because they know the person will never give up. Lenders will have to make sure it's a good deal for their clients, not just themselves.

Why not? This is exactly what should happen. Students should be able to discharge their student loans in bankruptcy.

The problem is that lenders have little to no risk in making these loans, so they do. And colleges have high tuitions because loan money is easy to get, so colleges find all kinds of stuff to spend it on (usually building fancy new buildings). That needs to change: make loan money harder to acquire by making it risky for lenders to give it out, and the money will dry up, and tuitions will fall.

No. Bankruptcy is touted as being an absolute last resort that destroys lives. That's not the case, particularly if you are young. It's better to file for bankruptcy if you believe you will not be able to pay off your debts within a few short years. If student loans could be dumped with bankruptcy, every student would be advised to file for bankruptcy before their first payment became due. Bankruptcy would become the norm for many 21-24 year olds.

Also (you might like this proposal better), it would make sense for bankruptcy law to have a provision for student loans that you can't declare bankruptcy to dodge the loans within 5 years of graduation. Then only students with little hope of repaying the loans, and who have likely already defaulted, will actually declare bankruptcy.

The end effect I'm looking for is for lenders to think twice before lending money for student loans.

Now I somewhat understand the few countries who offer "free" education (ie: funded by taxpayers). The incentive should be to offer free education for degrees that practically guarantee employment benefiting society. If you major in something widely considered useful, enjoy your free ride. If you prefer to major in something wishy-washy as far as society is concerned, you can pay for it yourself. Such an ugly compromise. :/

The thing is, that's precisely the point of the system. The same can be said of health insurance. It isn't to service debt, it is to prop up an industry that has grown around servicing that debt.

As one commenter said, it's difficult to pay back your loan when your debt is being passed around to different collectors like a hot potato and it's increasingly difficult to get a hold of who owns your debt right now.

Edit: already exists, it's called Studentloans.gov.

Sometimes, you'll pay $38 to collect $1, cause, otherwise, you will face a reality where you have $100 to collect and not $1.

In other words, enforcement costs and ROI shall not be measured by direct results and achievements, rather by the side effect of prevention.

It might costs $250K to put in jail someone who robbed 10 houses in total amount of goods of $10k. But you'll do it all the way to alram others.

Some might I suppose.

It's like prison and retention. It's not worth it for the people it directly effects, but it is good because it encourages people to avoid it.

This here govt website suggests is the act of being caught that is the major deterrent to crime, not the severity of the punishment https://nij.gov/five-things/pages/deterrence.aspx

Original source: http://www.jstor.org/stable/10.1086/670398?seq=1#page_scan_t...

Taking this one for example:

h t t p s://www.bloomberg.com/news/articles/2017-05-19/americans-are-paying-38-to-collect-1-of-student-debt

If you include the question mark query parameter separator, the tracking parts take up as many characters as the entire reference to the article itself:

?cmpid=BBD051917_BIZ&utm_medium=email&utm_source=newsletter&utm_term=170519&utm_campaign=bloombergdaily

Am I just being an old-man-get-off-my-lawn about this or is there an actual purpose?

Those are urchin tags, aka Google Analytics: https://ga-dev-tools.appspot.com/campaign-url-builder/

If and only if we stop Government backed student loans will I be OK with some debt forgiveness or amnesty program.

The point of collection is that it also acts a deterrent. So the $38 spent are not just to get the $1 back but also to tell others that government will go out of the way to get back that debt.

That $38 needs to be compared with the total $s that come in as repayments.

Also this is the reason why government should not be in the business of giving loans.

Credit is nice, but it is not NEARLY as nice as not having debt.

That said, I'd question the deterrent effect. Per the article, nearly 40 percent of 'recovered' borrowers default within the next three years. Combined with paying debt collectors "nearly 40 times what they bring in," it seems as if there's a measurable problem with the current approach. But is that a problem with current recovery efforts, or merely a symptom of a larger issue? Like with most things student loan-related, there are no easy answers here.

Horrifically inefficient. But hopefully effective for a larger audience.

but in this case it sounds like a substantial amount of that expense goes towards getting people back onto plans. so thats obviously a default-specific expense.

I have to disagree with your assessment about wether the government should be in the student loan business. Providing employment for the sake of community/national services is the exact role of government.

The term is "non-enforcment".