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Poll: Student "Loans"

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Student Finance:Debt or Investment

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#1 +ChuckFinley

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Posted 17 October 2013 - 14:23

So I have had a lets say discussion with a a careers advisory. I was lets say informed that that I was making the job harder for them because I was spreading wrong information, I wanted to see how you view it...

 

My personal view is that the media has pushed out an agenda, (I am in the UK but I presume that this applies to other 1st world country's as well) that they are reclassifying student loans,finance,fees etc etc as "Investment" rather than a debt to make people feel better. They are pushing the wrong message out to people. Take all these loans and worry about it later mentality, If you cant afford to pay it back don't worry we will write it off anyway. No pressure. I think this is personally wrong. I don't care what you say, Until you pay it back its a Debt! You owe money to someone else plain and simple. Further education especially University is a Business and big business at that.

 

I DON'T buy into the BullS*** that you have to go to university and get a 4 year degree to be successful... therefore you DON'T have to take out loans. And that's the problem. A lot of people do or did buy into the BS, myself included. They really do drill that in your head when your high school. Not everyone is a good critical thinker. It has to be re-taught to some people due to immense brainwashing.

 

I think this is brilliant (I say this in the most sarcastic way possible), This guy says stop calling it a Debt. Then later in the article and I quote directly....

 

it's proportionate to earnings. If you haven't cleared what you owe within 30 years, the debt is wiped.

 

 

Make up your mind much?

 

http://www.telegraph...oans-debts.html

 

Thoughts?




#2 watkinsx2

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Posted 17 October 2013 - 14:28

I agree, It is debt but not in the traditional sense.



#3 philcruicks

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Posted 17 October 2013 - 14:34

I class it as debt as I have to pay it back, but I can clearly see how you could think of it as investment.

There is no way in hell I'd have the job I have today earning the money I earn if I hadn't gone to uni and gotten my degree.

So in that sense yes I've "invested" the money for my future.

 

The key difference and why it is debt and not investment

Is that debt involves taking money because you don't have it.

Investment is taking money you have and putting it into something with the hopes of gaining a return. (hence the business term RoI Return on Investment)

 

As I had to borrow money to go to Uni it is therefore debt. Simples.



#4 Astra.Xtreme

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Posted 17 October 2013 - 14:37

Most professional jobs out there absolutely require a degree, and that's just how it is.  How else can you quickly prove that you're qualified for the job?  I definitely see it as an investment, because you're essentially spending money to then turn it around for a return on that investment.  I spent around $120k for my degree and will be paying off my loans for a few more years, and without spending the money on that prestigious school, I would have never had the opportunities I had in college and moving forward in the future.

 

Yes, way too many people get crappy degrees and then get crappy jobs, but overall, people pay off their loans and then make more money than they started out with.  That's a pretty straight-up definition of investment.

 

When I put money in the stock market, I'm essentially loaning the company money and creating a debt, but it's still technically an investment.  Overall, it probably doesn't even make much sense to compare "debt" to "investment" since they're different concepts. Investing in something typically involves a debt being created, so you can't compare the two if one creates the other.



#5 Nick H.

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Posted 17 October 2013 - 14:40

I would class it as debt. But I dropped out of University (as you mentioned in the OP, some people just aren't cut out for academia) and went to work, so my debt is gone.

#6 LaP

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Posted 17 October 2013 - 14:52

I class it as debt as I have to pay it back, but I can clearly see how you could think of it as investment.

There is no way in hell I'd have the job I have today earning the money I earn if I hadn't gone to uni and gotten my degree.

So in that sense yes I've "invested" the money for my future.

 

The key difference and why it is debt and not investment

Is that debt involves taking money because you don't have it.

Investment is taking money you have and putting it into something with the hopes of gaining a return. (hence the business term RoI Return on Investment)

 

As I had to borrow money to go to Uni it is therefore debt. Simples.

 

Then everything could be an investment and not a debt.

 

An house is an investment. Without it you could probably not work. A car can be an investment if you use it to go to work. Clothes are investment without them you could not work. Food is an investment without it you could not work. A computer can be an investment in most case. Entertainment is an investment cause let's face it without it you could not work 99% of the people can't work 24/7 without having fun sometime.

 

I agree with you it's a debt.



#7 n_K

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Posted 17 October 2013 - 14:56

It is most certainly a debt, the government can change the interest at any time of any of the loans since 1997 or so (some leaked documents showed the government was planning to sell off a bunch of student debts and allow the company that bought them to set the level of interest per year that you owe on top to whatever they wanted), that is a DEBT and is in NO WAY AT ALL an investment. You're not guaranteed a job nor any work after getting a degree.

And it gets written off after 30 years if you're unable to pay it back, assuming that they don't later decide to change that, and wahay, if you get a degree and can't get a decent job and you're earning peanuts well don't let that put you off because the government will write off your debt by the time you retire! Oh what a uselessful idea......



#8 Tom

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Posted 17 October 2013 - 14:56

It's both. It is a debt, but one that is usually an investment. Investments require you to give some in order to get more back and that's precisely what going to university does. Sure, not all university grads become sucessful, and sure, people that don't go can become sucessful but the point is simple; knowledge that others don't have usually leads to someone needing that knowledge and thus paying for it. Universities are where knowledge collates and thus learning from those lecturers inside is going to provide you with the knowledge (of your choosing) and thus increasing your chances of getting a better paid job.

 

As was already pointed out, a lot of jobs require degrees (no matter if you have the knowledge or not) and getting one allows you access to a whole new section in the job market that you wouldn't have otherwise had. University can increase your job chances but it's up to the individual whether they can make it pay off in the long run.



#9 Torolol

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Posted 17 October 2013 - 14:59

I see it as debt, by luck managed to graduate without taking those 'loans'.

and now i have better net income than my peers who have same job,

as the money wasn't used to repay that loans with its interest.



#10 +Phouchg

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Posted 17 October 2013 - 16:14

If one borrows change for a bus fare to get to one's classes, is it an investment, too? Therefore, debt.



#11 Astra.Xtreme

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Posted 17 October 2013 - 16:18

If one borrows change for a bus fare to get to one's classes, is it an investment, too? Therefore, debt.

Actually yes, I'd classify that as an investment.  You're investing in getting to class faster as opposed to being late, so your return on investment is Time.



#12 +Phouchg

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Posted 17 October 2013 - 16:37

Actually yes, I'd classify that as an investment.  You're investing in getting to class faster as opposed to being late, so your return on investment is Time.

 

Hmm. Then perhaps everything we do is an investment? For instance, taking a walk (by investing increased physical effort; by extension, energy gained from food bought with money earned... or borrowed?) promises some, if highly uncertain, health benefit, with certain risk of getting run over by a bus, down the road. Also it isn't yet defined whether one will actually avoid being late or even arrive on time (consider a traffic jam).

 

I will not argue that "investment" in such cases can still be freely used (in addition to one's optional hard work, the learning process), but perhaps there is a line where economics becomes too convoluted and rather than a term it instead becomes a metaphor.

 

However, I'd rather like to stress "debt" which is dead certain, because that money will have to be returned with interest, in most cases regardless of whether the investment was fruitful.



#13 Astra.Xtreme

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Posted 17 October 2013 - 16:43

Hmm. Then perhaps everything we do is an investment? For instance, taking a walk (by investing increased physical effort; by extension, energy gained from food bought with money earned... or borrowed?) promises some, if highly uncertain, health benefit, with certain risk of getting run over by a bus, down the road. Also it isn't yet defined whether one will actually avoid being late or even arrive on time (consider a traffic jam).

 

I will not argue that investment in such cases can still be freely used (in addition to one's optional hard work, the learning process), but perhaps there is a line where economics becomes too convoluted and rather than a term it instead becomes a metaphor.

 

However, I'd rather like to stress debt which is dead certain, because that money will have to be returned with interest, in most cases regardless of whether the investment was fruitful.

They're both basically metaphor terms, but they kind of refer to different concepts.  So for that reason, it's not really meaningful to compare them.  We invest in things hoping for a high ROI, but that investment requires we give something up in the form of a debt.  We can apply to that basically any give-take in life, so they go hand in hand with each other.  An investment always requires some sort of debt, and a debt is created due to some sort of investment.



#14 Torolol

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Posted 17 October 2013 - 16:44

when the money you obtained in the past became financial liability in future, it IS debt.

just like what happened to my friend.



#15 Axel

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Posted 17 October 2013 - 16:58

It's more of a tax than a debt.

 

If you go to uni you pay the tax.  If you dont go to uni, you don't.  If you can't pay, you don't pay.  If you can, you do.  No bailiff's are gonna come knocking.