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jgoose71

Student Loan debt on the rise again

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President Obama offers help to those shackled with student load debt.
http://www.msnbc.msn.com/id/45039424/ns/politics-white_house/t/obama-offer-student-loan-relief/#.TqfsZnH7G_U

Mean while the cost of a student loan and a college education is on the rise again.
http://www.msnbc.msn.com/id/45040257/ns/us_news-education/#.TqftRnH7G_V

Does anyone else besides me see that Obama is creating an "Education Bubble?"

The housing bubble was created by making money easy to get so people could buy houses. People just kept trading houses back and forth because they could get more money to buy a house.

The government student loans are given at low rates, and as a student, you don't need good credit. Couple that with law stating you can't default on a student loan, and now Obama is saying "it's OK to spend $200,000 on an education that will only earn you $30,000 a year. I'll forgive you."

If you want to bring down the cost of college educations, I say let students start defaulting on there loans. How will this help?

Well, creditors will have to start looking more closely to whom they are giving there loans to. What is their GPA? What is their education plan? What is their earning potential when they get out of college?

What happens after that is students who want a $200,000 loan for an 8 year degree in liberal arts will get laughed at by the creditors. They will finally get the talking to that they needed...... "What the hell are you thinking?"

And colleges that want to fill those classes will have to bring down the costs if they want bodies in the seats.

My $.02
"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

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Cry me a fucking river.

I didn't get squat from the Federal Government despite paying for college on my own. Some one like me had shit choices for college loans, and now I get my student loan interest deduction phased out too! Good thing I am filthy rich. :S>:(

College is an investment, it shouldn't be free. That being said everyone should have access to reasonable loans.

My investment is currently paying off because I matched my expenditure with a job field that would give me a chance to pay it off. If people decide to rack up 60K in loans to get a BA in Sociology and now they have to work in Starbucks tough shit, that was a dumb ass move!

"The restraining order says you're only allowed to touch me in freefall"
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President Obama offers help to those shackled with student load debt.
http://www.msnbc.msn.com/id/45039424/ns/politics-white_house/t/obama-offer-student-loan-relief/#.TqfsZnH7G_U

Mean while the cost of a student loan and a college education is on the rise again.
http://www.msnbc.msn.com/id/45040257/ns/us_news-education/#.TqftRnH7G_V

Does anyone else besides me see that Obama is creating an "Education Bubble?"

The housing bubble was created by making money easy to get so people could buy houses. People just kept trading houses back and forth because they could get more money to buy a house.

The government student loans are given at low rates, and as a student, you don't need good credit. Couple that with law stating you can't default on a student loan, and now Obama is saying "it's OK to spend $200,000 on an education that will only earn you $30,000 a year. I'll forgive you."

If you want to bring down the cost of college educations, I say let students start defaulting on there loans. How will this help?

Well, creditors will have to start looking more closely to whom they are giving there loans to. What is their GPA? What is their education plan? What is their earning potential when they get out of college?

What happens after that is students who want a $200,000 loan for an 8 year degree in liberal arts will get laughed at by the creditors. They will finally get the talking to that they needed...... "What the hell are you thinking?"

And colleges that want to fill those classes will have to bring down the costs if they want bodies in the seats.

My $.02



Who offers an 8 years degree in liberal arts? Tuition + fees at Harvard is less than $35k/yr and you get a degree in 4 years.

You don't HAVE to go to an ivy league school. There are far cheaper alternatives, and not everyone can get into one anyway.

Liberal Arts is a reasonable UG degree if you want to go on to, say, law school.
...

The only sure way to survive a canopy collision is not to have one.

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Who offers an 8 years degree in liberal arts? Tuition + fees at Harvard is less than $35k/yr and you get a degree in 4 years.

You don't HAVE to go to an ivy league school. There are far cheaper alternatives, and not everyone can get into one anyway.

Liberal Arts is a reasonable UG degree if you want to go on to, say, law school.



I agree that liberal arts are generally not good money making degrees. I obtained a degree in foreign affairs, and when I realized there wasn't much I could do with it financially except go to law school, I went back and got an engineering degree. However, we as a society can't turn our back on liberal arts. The knowledge gained through studies other than business and applied science (which are the only studies conservatives seem to place any value in) is invaluable to society as a whole.

All that being said, I don't think I agree with this educational loan plan. There are a lot of ways to pay for college besides loans. I transferred from a private to a state school after one year when the financial reality hit home, and did ROTC for my first degree. I did take out loans for my engineering degree, but paid them all back before I even finished school using my Army Reservist pay. Obviously, military service is not for everyone, but forgiving financial obligations without reason just leads to lack of respect for contracts overall.

- Dan G

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As long as there is a Federal Guaranteed Student Loan program the tuition will rise faster than the cost of living. Why would it not? the customer can pay more so charge him more. There is nothing wrong with that. As tuition rises the teachers demand more and get it. again, nothing wrong with that in my mind.

so here is the problem as i see it. At some point the loan's being taken exceed the benefit. I'm pretty sure many are there right now. So students can be responsible and go to a more affortable school or skip college all together. That would drive down tuition and then salaries.

i just doubt our gov't or society will actually do anything constructive. to many people feel an expensive education is a right. so it's subsidized and tuition goes up. i think the OP had a good point, it builds a bubble.
"The point is, I'm weird, but I never felt weird."
John Frusciante

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What we need to do is remove bankruptcy protections on private student loans.

The private student loan interest is insane. And, these loans enjoy the same bankruptcy protections that federal loans do, without any of the benefits, which allows private lenders to give student loans to anyone, regardless of their ability to pay, and make them into what amounts to extortionists a few years down the road.

Example:

Student: "Hi, feds! I lost my job. Can I have a forebearance on my loans? I'm on unemployment and can't make payments right now. I'm barely making my mortgage."
Feds: "Sure! Or you can take classes part time and qualify for a deferment, and we'll start covering the interest on your subsidized loans again!"
Student: "Great! Thank you" (sigh of relief)

Student: "Hi, private loan lender! I lost my job. Can I have a forebearance on my loans? I'm on unemployment and can't make payments right now. I'm barely making my mortgage."
Private Lender: "No! You have to pay us! You get a maximum of three months of forebearance, which you used five years ago when you had a baby! If you don't pay, we'll get your cosigner involved, send it to collections, sue you, ruin your credit, and garnish your wages."
Student: "But I don't have any wages!"
Private Lender: "That's not our problem."


What's happening is that Congress has given PRIVATE, unsecured debt the same status as FEDERAL secured student loans. This is a major problem because the banks have absolutely no incentive to evaluate the creditworthiness of the borrower or their future earning potential, knowing that even if the borrower declares bankruptcy, under most circumstances, they can't get rid of this and it'll follow them forever! This is encouraging rising costs of education and leaving students buried in debt upon graduation, particularly those who started school prior to the economic crash and were told by their schools "Don't worry about the payments, you can consolidate!" and upon their graduation, virtually no banks are doing consolidation loans and for the few that are, qualifying for them is almost impossible, particularly as a new graduate, who are the ones who need them the most.

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The expansion of these loans only fueled large increases in tuition and salaries, likely this was the goal. My daughter started ASU in 2001 and at that time the cost was doable, much less so now. Luckily she got through grad school in Irvine with only 5K of debt that her mother demanded that she get !! Go figure that one ! ( she thought it was good idea cause all the other sheep were doing it, true story.) I lost that fight.

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What we need to do is remove bankruptcy protections on private student loans.

The private student loan interest is insane. And, these loans enjoy the same bankruptcy protections that federal loans do, without any of the benefits, which allows private lenders to give student loans to anyone, regardless of their ability to pay, and make them into what amounts to extortionists a few years down the road.

Example:

Student: "Hi, feds! I lost my job. Can I have a forebearance on my loans? I'm on unemployment and can't make payments right now. I'm barely making my mortgage."
Feds: "Sure! Or you can take classes part time and qualify for a deferment, and we'll start covering the interest on your subsidized loans again!"
Student: "Great! Thank you" (sigh of relief)

Student: "Hi, private loan lender! I lost my job. Can I have a forebearance on my loans? I'm on unemployment and can't make payments right now. I'm barely making my mortgage."
Private Lender: "No! You have to pay us! You get a maximum of three months of forebearance, which you used five years ago when you had a baby! If you don't pay, we'll get your cosigner involved, send it to collections, sue you, ruin your credit, and garnish your wages."
Student: "But I don't have any wages!"
Private Lender: "That's not our problem."


What's happening is that Congress has given PRIVATE, unsecured debt the same status as FEDERAL secured student loans. This is a major problem because the banks have absolutely no incentive to evaluate the creditworthiness of the borrower or their future earning potential, knowing that even if the borrower declares bankruptcy, under most circumstances, they can't get rid of this and it'll follow them forever! This is encouraging rising costs of education and leaving students buried in debt upon graduation, particularly those who started school prior to the economic crash and were told by their schools "Don't worry about the payments, you can consolidate!" and upon their graduation, virtually no banks are doing consolidation loans and for the few that are, qualifying for them is almost impossible, particularly as a new graduate, who are the ones who need them the most.



I agree 100% on the private loan comments.
"The restraining order says you're only allowed to touch me in freefall"
=P

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The problem I see is that students do not have single loans with single interest rates. Some are higher than a proposed consolidation loan and others are lower. Consolidated under a "smaller" interest rate the aggregate will be more costly in the long run.

What a student should do is pay off the highest rate first and as quickly as possible. This way they'll have paid less over the shortened period than what would have been paid over the normal course of that loan.

If a "Truth in lending" spread sheet were presented with consolidation -vs- paying off the highest first maybe the student would get the picture. Telling them that they will pay less by loan consolidation is misleading.

Obama's window dressing.

jon

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As long as there is a Federal Guaranteed Student Loan program the tuition will rise faster than the cost of living. Why would it not? the customer can pay more so charge him more.

I am a professor in the biomedical sciences field at a state university (in fact a so-called "flagship" university, i.e. at the top tier of state schools). Our tuition has risen fairly steadily over the past few years, but that is entirely a reflection of the fact that state funding of the university system has declined about 40% in the last 6 years and at the same time enrollment has increased. State schools are not for-profit entities, but there still has to be enough income to maintain at least a minimal standard of education or we risk losing accreditation. If it doesn't come from the state, it has to come from somewhere. In some states, state funding of the public universities has fallen to less than 10% of the total university budget.

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As tuition rises the teachers demand more and get it.

We have not had a pay increase (not cost-of-living, not merit, not anything) in 5 or 6 years. In the meantime, health insurance premiums, parking fees, and various other essentially mandatory deductions from our paychecks has almost doubled. We have had to deal with mandatory furloughs that amounted to an 8% reduction in pay, but for those of us running research programs we can't just not feed animals or not change media for cell lines so we still have to come in to work on those unpaid days. Often funding cuts to individual departments have been met by encouraging eligible faculty to retire earlier than they had planned, so the department saves their salary and benefits but the teaching workload just gets shifted to those of us remaining. Of course, none of the other stuff (research programs, training graduate students and postdocs, publishing papers, writing grant proposals) is ever reduced one iota. Almost everybody I know in the sciences is working 70-80+ hrs/week. So tell me, where exactly is it that "teachers" are demanding, and getting, more?

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That would drive down tuition and then salaries.

My experience was, I think, quite typical for faculty in the sciences. I paid my way through the Bachelor's program (4 years), Master's degree (3 years), and PhD (5 years). I then was a post-doctoral researcher for 4 more years at close to minimum wage salary, followed by 2 years as an assistant research scientist funded by my own research grants at a princely $35,000/yr. By the time I was judged worthy to be hired as an entry-level assistant professor, I was in my late 30's with my own research funding and 25 published research papers, many in top-tier journals. The same is true of everybody I have seen hired here since I came on board, indeed I think I would not have been competitive had I been applying in 2005 as the field of candidates had gotten even better. So, just how low of a salary do you think people will be willing to go through all of that for? I can assure you, it's already hard to find decent American students willing to take on grad school/postdoc as they perceive the cost to be too high for the likely benefit. Perhaps you think it would be a good idea to recruit university faculty from the pool of people who can't get any other job because they are the dregs of their class? That's what you'll get if salaries get lowered much more than they already are.

To the OP and others who wish to comment: Do you think it is in America's best interests to have an uneducated population, because the cost of the training needed to be competent in the sciences or engineering is unattainable, or saddles people with debt it takes half a lifetime to pay off? Other countries are investing in the eduction of their population, because they recognize that this drives economic productivity and is absolutely necessary to be competitive in the global economy. Faith in "American Exceptionalism" will not keep us afloat when other countries are the source of all the innovation and invention, and we are reduced to hewers of wood and drawers of water.

Don
_____________________________________
Tolerance is the cost we must pay for our adventure in liberty. (Dworkin, 1996)
“Education is not filling a bucket, but lighting a fire.” (Yeats)

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I hear what you are saying. Good on you for not carrying debt when you went to school may years ago and working your way through college.

But the truth of the matter is, something is worth what people are willing to pay for it. If student loans to go to college is easy money to get, then people will get lots, not thinking that the bill will eventually come due. Hopefully you will remember what it was like to be 18. Head full of dreams and not necessarily reality.

I'm going off assumptions, for this part so tell me where my mistakes are, using Florida State as the model:
http://registrar.fsu.edu/bulletin/undergrad/info/financial_info.htm

Non resident Fee: $1002.58 per semester hour.
Lecture class average size: 150 students.
Average semester hours per class: 3

Kind of hard to find, but lets say the teacher gives that class to 3 groups of people per semester, (2 classes per week per "class" for 6 instructional periods for that instructor)

Multiply that by 3 semesters (spring, summer and fall) That instructor has the potential of earning over $4,000,000 for the school over the course of a year. if the instructor only taught in state residence, that would drop the cost to over $1.3 million a year.

That's not including state subsides, facility fees, dorm fees, or book fees. How much does it cost to facilitate a class and where does the money go?

And what about the money from the football teams and merchandise?

Is it really necessary for a college education to cost this much?
"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

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who has $200k in student debt that only got them a $30K job? example please.



Ever meet a social worker from a fancy NE school? i have. their tuition is about 45k a year and their job pays about the same. Not a perfect match to your example but i feel close enough to make the point.

How about a speech language patholigist(sp)? i know one who went to Columbia and has a masters. works for a southern school system. started below 35k a year. Or my nephew who is studying for a masters in library science with an undergraduate degree from Vassar. he works full time as a researcher for about 8 bucks an hour.

I'm know those are not exact matches to your request but IMO are close enough to illustrate that it is possible to pay far more than you can realistically make.
"The point is, I'm weird, but I never felt weird."
John Frusciante

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Not quite at the 200k level but most teachers have to take out $75-100k for the bachelors and masters degrees and are lucky to get jobs at $30k here in Ohio. There is now a huge glut of teachers that are not even in the field since the options are work at Charter schools for $26k or bag groceries for $25k since public schools are not really hiring.

http://undergrad.osu.edu/money-matters/tuition-and-fees.html

Billed expenses

Ohio resident Non-Resident
Tuition and fees $9,711 $24,759
Room and board $10,215 $10,215

Total $19,926 $34,974

4 Year degree: $79704 $139896

Here in the state of Ohio all teachers are required to have their Masters degrees within 8 years of starting to teach so most schools just build the masters program right into their education program.

http://gradadmissions.osu.edu/Costs.html

All costs are subject to change without notice. A complete list of quarterly tuition charges by program may be found at the Office of the Registrar's website.

$11,298 - tuition cost for a U.S. citizen, permanent resident, aslyee, or refugee and a legal resident of the State of Ohio;
$28,746 - tuition cost for a US citizen, permanent resident, aslyee, or refugee whose residence is outside of Ohio;
$13,980 - estimated annual expenses for room, board, insurance, books and supplies

Add in the all the costs and you are looking at $104982 for instate rates and $182622 for out of state.


OSU has been having rate hikes of 6-8% per year on average for the last few years until the students protested the other year.
Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

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Again I will ask for a REAL example not your extrapolation of what you think your friend might be paying.

I am pretty sure that the majority of students are no where near what you are trying to describe as some sort of 'norm'



i didnt say it was the norm. i didnt even imply. it does happen though.

i gave examples of real people. two girls i dated and my nephew. do you want me to give their names and social so you can verify?

You dont know me so obviously i could be making this up and you seem to imply so. oh well, i cannot help that. any reasonable person could look at my examples and see they are not even worth lying about because they arent that hard to believe or check.

Check the tuition of some private NE schools then check what a researcher for a PBS affialiate would make, a social worker or a speach language person in a rural florida schoool district.

My examples aren't extreme or hard to believe at all.
"The point is, I'm weird, but I never felt weird."
John Frusciante

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They could also cut the lavish salaries these college professors make for teaching these "fluff" subjects.



It wasn't colleges and universities that brought the world economy crashing down. It was greedy Wall St. execs and bankers making $millions more each year than most professors make in a lifetime.

If you think education is expensive, try ignorance.
...

The only sure way to survive a canopy collision is not to have one.

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>It was greedy Wall St. execs and bankers making $millions more each year than most professors make in a lifetime.

Yes its that simple. Bankers were the only reason the economy tanked. It had nothing to due with anything else in the housing market. there were no other factors involved. all blame is on the banking sector. Does that really make sense to you?

Statements like this is why i thought you were a young college kid and not a mature educator. How can a grown man actually think something as complex as our economy is controlled by one factor?

"making $millions more each year than most professors make in a lifetime." Oh wait, actually its very easy to see why you feel the way you do. its not rational. your just overwhelmed with jealousy.
"The point is, I'm weird, but I never felt weird."
John Frusciante

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Greedy Wall Street bankers caused the cost of a College education to rise at this ridiculous rate?

Hello Kettle, Hello Pot, Why Mr. Kettle your looking awfully black today!
"The restraining order says you're only allowed to touch me in freefall"
=P

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and I didn't say that you said.....whatever. My original response was to the originator of the thread. You responded instead.

Your examples cite 'estimations' on your part. I am not asking for your friend's social security number but something along the line of "my brother has $200K in debt and has a $30K job" would still be marginally more accurate that what you replied with. not "ever heard of a NE school?" whatever.

The original poster started a thread stating a 'problem' that needed to be fixed apparently.

I countered with an arguement that perhaps this is not a 'problem at all' by asking for some specific examples.

It's kind of like saying we need to scrap welfare because there are 0.01% slackers on the welfare roles.

I am sure there are people out there with piss-poor jobs and high student debt. I doubt that is the norm. That is my point.

And the examples that you and phreezone cite imply that EVERY NICKEL someone spent going to school was taken out in the form of a student loan, I also doubt that this is the 'norm'.

So unless you can show me a REAL EXAMPLE of someone who has $200K in debt and only has a $30K job, then my argument will stand that this is nothing more than a 'reach' to stereotype all students into some category that does not actually exist.

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The number I have posted are dead on since that is the situation I am facing right now except I am looking at NY in state rates for my wife. Over 90k in student loans for a 28k a year job. Grants were not an option since the parents had too much in their 401k and were expected to empty them to pay for the education despite both having taken jobs making much less money recently so no liquid cash. Loans were split between private loans at 6.5+% interest rates since at 85k total income it is too much for federal loans.

I am seeing the same thing with my brother in law. Granted he is now old enough to qualify as an independent and gets more grants finally but that was after 4 years of schooling and only in his 5th year did he get a better deal. He'll be graduating with over 100k in debt with a sports degree and is now able to coach or referee high school games. :S

Here is the calculator used to figure out the Expected Family Contribution: http://www.finaid.org/calculators/scripts/estimate.cgi
On a family of 5 with an annual income of $100000 that has a total of $150000 over all the assets for the family (401k, savings, stocks, etc) they are expected to contribute $15,698 per year towards their child's education. If they do not have that $16k laying around then it all rolls into student loans.

Unless you are athletic enough to get a scholarship or score exceptionally high on tests to get an academic scholarship you are pretty much forced to empty out a large chunk of your family savings or take out loans to cover everything.

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

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>and I didn't say that you said.....whatever. My original response was to the originator of the thread. You responded instead.

my mistake. i thought you were implying that no one can have very high debt and a bad job. I thought it was an odd thing to say so responded. i didnt really follow the thread as well as i could have and i suppose my off point post reflects that.

I'm normally better than that but sometimes i just skip the long post because they bore me. my bad.
"The point is, I'm weird, but I never felt weird."
John Frusciante

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Unless you are athletic enough to get a scholarship or score exceptionally high on tests to get an academic scholarship you are pretty much forced to empty out a large chunk of your family savings or take out loans to cover everything.



Or choose alternative and cheaper means of education. Or responsibly choosing and education program that is a good choice financially for that level of investment or borrowing.
"What if there were no hypothetical questions?"

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