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Student Loan Interest Rankles College Grads
theodp writes "Like many recent college grads, Steven Lee finds himself unemployed in one of the roughest job markets in decades and saddled with a big pile of debt — he owes about $84,000 in student loans for undergrad and grad school. But what's really got Lee angry are the high interest rates on his government-backed student loans. 'The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%? The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?' Not only that, federal student loans are the only loans in the nation that are largely non-dischargeable in bankruptcy, have no statutes of limitations, and can't be refinanced after consolidation, so Lee can forget about pulling a move out of the GM playbook. And unlike mortgages on million-dollar vacation homes, student loans have very limited tax deductability. A spokeswoman for the Department of Education blamed Congress for the rates which she conceded 'may seem high today,' but suggested that students are a credit-unworthy lot who should thank their lucky stars that rates aren't 12% or higher. Makes one long for the good-old-days of 3% student loans, doesn't it?"
Direct loans were cheap, and the consolidation brought them down to ~5% afair. I know the new loans are not as cheap, but thats because some idiot decided having non-direct loans and promising a profit to everyone who serviced them. Doh!
-- dieman - Scott Dier
In India, student loans are 12% compound interest; while the borrowing rate in good banks is as high as 7.5% compunded quarterly.Money makes the world go round...
If you keep throwing chairs, one day you'll break windows....
I worked at a mid size private university in the midwest and tuition rates were astronomical ($30k for undergrad). I think the loans are one thing but tuition rates are a larger issue. I wondered how they stayed in business especially these days.
I think you mean "deductibility", not "detectability", though I'll admit to not reading very closely.
The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%?
Because if you default on the mortgage, they can take your house. Education repossession technology is still in beta. Even when it works it and rarely returns anything of value.
I just consolidated my federal student loans, at 2.25%. I'm not sure where these people are getting the 8+% figures from.
My student loans were detected in my taxes and actually increased my refund.
Pay your loan for 10 years... and the government will excuse the rest.
Some restrictions apply...
http://www.nextstudent.com/articles/student-loans-forgiven.asp
You saw the rates when you signed the papers. Not anyone's fault but yours. And no, I didn't want a bailout for GM or the banks either.
My Direct Loans are still around 3%. I wonder why he's paying 8.5%.
Unlike most other loans, student loans can get you a large tax deduction come April.
Tuition rates at many places is in the $40K range now. Schools have no incentive to keep costs down because they can borrow an infinite amount of money from the government on students' future credit. The result is a largely rubber-stamping budget process with occasional overtures to fiscal responsibility that are made more in name than in practice. A few schools are trying to be fiscally responsible this year because of the recession, mostly so they can say they're fiscally responsible and raise money from donors. Realistically, the spiralling admissions costs will make colleges more and more a redistributive agent as they funnel money from paying students to financial aid. The cycle seems unsustainable, and it sure as hell doesn't reflect the real world, but it will only be unsustainable until colleges can't attract the number of people they want to admit. Currently the top schools have admittance rates of easily 20% or less; they could double tuition and they'd still fill every seat.
So it's sustainable for a while.
Mortgages and car loans are secured loans, where the property or car that is bought with them is pledged as collateral. This makes a big difference for the interest rates. Student loans just ain't so.
Anyway, I've heard complaints like this about student loan rates before, and I've always had the same basic response: you're barking up the wrong tree. You don't really want lower interest rates on student loans; you want the government to spend more on making higher education affordable for those who qualify for it. There's a bunch of countries out there where if you get admitted into a university, the government picks up the tuition bill, period. Those countries ain't richer than the USA.
Are you adequate?
Fuck off, Department of Education spokesperson (and the quoted Republican party stance in the story too). I saved up three years of minimum wage for my college fund and I didn't do it just to hear how I'm an ungrateful child when I ask why I'm forced to pay a ridiculous amount of extra money on top of what is turning into an endeavor that is beyond the concept of "costly." Give me a break. Even with that hard work through high school I'm still forced into penny pinching.
30-year fixed-rate mortgages are backed by the property itself as collateral, and usual require either a 20 percent down payment or private mortgage insurance to protect against market fluctuations. (Of course, banks and mortgage companies have been known to market more "creative" products such as subprime mortgages, but presumably they have either learned their lesson or have been shut down by Federal regulators).
So that's comparing apples with oranges. Part of the higher rate for the student loan goes into a pool against defaults, when the government has no collateral to seize.
I saw the problem with school loans when my brother graduated from law school. I decided to work 40 hours a week at night and put myself through school. I graduated without any loans, but it took 6 years. All I can say is you're damned if you do and damned if you don't.
The real problem with school is that it's too expensive. We should consider it an investment to make college cheap. We don't. Business has decided that they don't need to pay taxes to keep schools open or up to date. They merely recruit the "best and the brightest" from around the world and lobby for low corporate taxes in the U.S.
The U.S. is becoming a really nice place to live...if you're rich.
I'm in a situation similar to the person featured in the article - interest accrues on my student loans at a rate of several thousand dollars per year, even WHILE I'M IN GRAD SCHOOL and have no reasonable means to pay down the principal. My tuition, even at a public undergraduate institution, was $30k + per year. I personally know many, many other grad students in my position. It's outrageous that the people the government and banks should be supporting - those who spend nearly a decade earning an advanced education - are being fleeced left and right.
If students are a "credit-unworthy lot" then limit the amounts they can borrow or make it a fixed amount that they must repay. Charging a higher interest rate for "credit-unworthy" people makes it more likely that they'll default, making it a self-fulfilling prophecy. This holds true for all borrowers.
It's plain and simple. The reason interest rates on a certain category of loans is high is because the borrowers in that category present a high risk of default to the lenders. This means that as more and more college grads struggle to land jobs, more and more of them will default on their loans, and interest rates on the whole will rise for everybody as lenders compensate for the increased risk.
The problem isn't finding a new fangled way for college student to be able to pay the enormous costs of college, it is to find ways to educate them more cheaply tha nwe do now. Online learning, competition, utilisation of open source textbooks... Be creative.
Sigs are too short to say anything truly profound so read the above post instead.
The problem is one of treating education as a business like any other. The country obtains a benefit from having an educated citizenry, and allowing education of this type to be treated as just another profit-center is at best short-sighted, at worst actively hostile to the country's best interests. From this basic problem, everything else flows.
:)
I'm from the UK, and just recently I've been reflecting on the things that I took for granted in the UK that are pay-for over here in the USA. Don't get me wrong, I love living here, I've just married an USAsian who's simply wonderful, but there are things I miss...
Primarily of course, is universal healthcare. The NHS is so far and away better than the situation we have here in the US that it's just not funny. Leaving that argument aside, the other major thing is education. My new wife and I were thinking about where any future offspring might be educated...
If the USA stays the same course as it's currently on, I think my children (as UK citizens by birthright) may be going to the UK for their education. It's a lot cheaper, it'll broaden their minds by travelling, and the quality is generally very high.
Oh how things have changed. I no longer think of the USA as being the gold-standard of higher education. Now I think of it as being just a way of transferring money from rich people to educated people.
As it happens, my wife paid off her student loans (for a JD/MBA) this evening (well, they'll settle on Tuesday). For the cost she just paid, we could buy a small house in the UK. The only debt higher is our mortgage, and living in a nice house in a nice part of the Bay area, that's expected.
I didn't pay for my education (although these days if you don't go to Scotland you pay something in the UK - it's a *lot* less than over here in the US though). I gave the UK about 10 years of higher taxes as a result - probably less than they were expecting - but moved to the USA for the nicer weather
Simon.
Physicists get Hadrons!
Its becoming increasingly obvious that education is more or less worthless for the -vast- majority of occupations. While a top degree will perhaps land you a job, people are starting to wonder why. The CEOs with degrees at Harvard are running companies into the ground. While education is a "nice thing" perhaps its time to start, as a society rebelling against unneeded education, especially with the internet. 25 years ago to find a lot of stuff you would need to spend time researching things either at a public library or at a college library. Today that is no longer the case. Similarly, even though technology has expanded, the skills needed to do a job have not for most careers, if anything technology has automated many of the tedious, time consuming and error-prone tasks. Knowledge is free, education is not. Knowledge is needed at most jobs, education in all honesty is not. I think its time for society to realize this.
Taxation is legalized theft, no more, no less.
There are two general type of student loans: direct and non-direct with a dirt cheap and a cheap interest rate. 8.5% is cheap for an UNSECURED loan that doesn't START accumulating interest until AFTER you graduate (actually Govt pays interest till you graduate).
Dude- you got $85K with ZERO collateral. The rate is NOT unreasonable. It is the best investment you can make for your future.
You can always become a teacher in the inner city or work 2 years for Peace Corps or any of the other methods the government has setup for most or all of your loan to be FORGIVEN.
Stop complaining about getting cheap money with no collateral and no limitation, except that you go to school.
I'll be graduating next summer with a Masters in IT Management. (Undergrad in Simulation Design Engineering)
75k or so in loans, and the year I went to college they jacked up the interest rate to 6.8%.
And to everyone saying its unsecured debt needs to actually look into their facts. Student Loans can not be bankrupt on, if I don't pay, the gubmint will dock my pay. Which actually is a better deal that paying the loans, the max they can dock is 15% per check, and my loans will be way more than that to actually pay.
The loans are government backed, they should be no interest.
No it doesn't.
A civilized nation should provide free education to the highest level each person wishes to attain, because that's part of believing that the nation's most most important resource is its people.
But when a government just wants dumb consumers, then it's a very different matter.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
In Australia, if you're a citizen or permanent resident, the government will subsidise a large portion of your undergraduate tuition fee. The remainder is paid by the student, but the student can pay for the remaining amount with a government loan (a HELP fee).
Interest is not charged on the loan, and you essentially have an indefinite repayment schedule. You begin paying 6% of your salary towards that debt once it passes some threshold ($37,000 AU if I recall correctly). The only thing they do is apply indexation each year so that inflation doesn't devalue repayments.
Post-graduate students are required to pay their tuition up front each semester in full, though again, if you're a citizen or a permanent resident, you get a big subsidy in cost.
I can't understand why the US government would saddle undergraduates with that much debt before they've even had a chance to start making a living. If there's one thing a large chunk of government money SHOULD be spent subsidising, it's education.
I'm sorry, but you guys are really screwed up in some ways.
The rules on college loans does need reform and the interest rates should be reduced. Plus the cost of higher education needs to be reigned in to levels that are affordable to the middle class.
Thank you for pointing out the obvious. I made it through Ohio State in 4 years, working my ass off, without any debt. School loans are the primary reason tuition and fees are high. If the goverment weren't subsidizing it by backing outrageous school loans, then tuition would drop and a college education would be much more accessible to those willing to work. Right now, though, it's only accessible to those who are willing (or ignorant) enough to sell out their future. The government is a large part of the problem, and the current administration is xeroxing the previous 20 years of making it worse.
The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?'
To me this is a tragedy. Young people starting off almost $100K in the hole. I had student loans, so did my wife. Together they didn't add up to $40K and she went to grad school.
On a higher level this kills entrepreneurial opportunities at the time in life you have the most desire, creativity and energy to launch a new business. Many of you are stuck in low-paying, dead end jobs because of student loans...one of the reasons some companies like to hire right out of college. Student loans and health insurance. Wouldn't it be better to turn all that creativity loose developing new businesses and jobs? But how can you saddled with all that debt and no health care coverage?
We have to do something, not just for people in college now but those recently graduating into 9.5% unemployment. Whatever that is, it has to include cost controls on education. The cost of education is running way ahead of inflation and textbook companies are worse than the mafia (at least the mob runs prostitutes). This is crazy.
But what to do about it? If the government tried some kind of forgiveness program, Republicans would scream about budget deficits. Student loans are also a giant bank pork program and you can see what kind clout they have in Washington. So, it's got to be paid for somehow, deficit neutral, combined with cost controls on education and everyone on both sides of the political pork barrel have to STFU long enough to get it done.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
The state has its own bank to offer residents low interest loans for socially useful things like student loans.
But it's basically Reaganomics. The theory goes that education shouldn't be supported because I guess it isn't really a social good and colleges should be run like businesses. So thank Neocon libertarianism for your loan payments. To do a "back in my day" may be annoying but it can also be enlightening. I remember something like $7.50 per undergraduate state college quarter credit. 48 in a typical three quarter year for a cool $360/year tuition. Sure, I was making $1.5/hour on my first summer job hammering together harrow weeder belts on a night shift factory job and that was considered a good high school wage so let's say $1/hour was more typical. Up that to $7.50 today and multiple by $360 and you should be paying something like $2,700/year for tuition at a four-year state college. Thank Reaganomics and "running colleges like a business" for your difference.
When I studied all of my fees were compiled into a thing called a HECS debt which i didnt have to pay off until my annaul salary passed a threshold.
The balance of hte loan and the threshold both went up with the CPI. But no interest was ever applied (yes, CPI acted like interest).
I never paid it off until about 3-4 years later when we salary went above 29,000.
I do think the guys got no right to gripe for himself. *but* when he started the course, perhaps the standard homeloan rate was about 8.5%.
In any case, the gov't should be making it easier for students to study, not making money off them for the privelege. Any capitalist can see that to make a good return you should be encouraging the young'uns to get the highest qualification they can, which has some bearing on their eventual tax output. Interest on the loans is a turnoff!
P.S Should note to those who are talking about tax dodges with student loans - I don't know the US system - but I also got a 15% bonus for any lump sums paid off my HECS debt over and above the mandatory payments. Makes my experience lightyears ahead of this guys plight.
"I split coffee all over my wife's nightie
Maybe if high school and college students spent as much time working on congressional campaigns as retirees, the laws would be a bit different.
Hoist Number One and Number Six.
'The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%? The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?'
Angry? You just got a "free" education, dummy. Sure, you have to pay the money back, but you didn't have to work and go to school intermittently for 10+ years hoping that you can finish your first degree before your credits are too old to apply. Your 401k/403b/457b/whatever will also have a 5-6 year head start, which will be amazing. College students from every previous generation have had a reputation for being poor. The subject of this post is a joke from a while back. Same as "Can you spare a dime? Working my way through med school."
standing in the world. It refuses to INVEST in future generations as a country, and instead only lets the monied class educate themselves. Thus the US becomes progressively stupider until the state you find it in now. Its only going to get worse guys, because of your shitty "me first" rather than "we first" philosophies and government policies. Unless you start putting education first, you're going to find yourselves turning into a 2nd world country.
High student loan interest rates are the result of Bush administration tinkering to increase the profit of lenders. If you believe religiously that corporate profits are the highest moral good possible, there's no end to the suffering you're willing to inflict on regular citizens in order to raise those profits. Bush promoted and signed bills raising student loans from ~2.5% to over 8% in some cases. It's that good-old "loot and pillage" economic theory. If you're a Republican over 50 years old, you don't give a d@mn about the future, as long as you wallet is swelling today....
"Sic Semper Path of Least Resistance"
Maybe it's because you're borrowing over 80,000 dollars for a college education.
5 minutes with a spreadsheet would tell you how much and for how long you have just screwed yourself, and by borrowing that kind of money you prove that you can't or won't spend even that much effort to think before borrowing.
I think part of the problem is cultural: I was broke back when I went to college, and I needed loans; but I also knew that you should never borrow anywhere near enough to pay your whole tuition bill. That's far too much money to borrow even if you aren't dead broke. Poverty forces you into indebtedness, but it also makes you paranoid about accumulated debt, and you understand that something that costs tens of thousands of dollars will require you to eat Ramen, work multiple jobs, and make affordable choices even if someone will extend you credit.
But now I hear horror stories about students who borrow enough money to buy a house in much of the USA, and use that to pay for an entire four-year degree plus graduate school. It's like the kids don't understand that they're poor; they get a credit line and stop acting like people who have to work for a living.
"The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?"
Why not, indeed?
Besides the fact that we have no money left, didn't before we started, and have been borrowing all of this, why not help the students?
Well, will someone else please tell them? I'm tired of it. Thanks.
ps - My wife and I paid off her student loans. She had a higher interest rate.
pps - No one is bailing me out of my mortgage on my home which is worth about half what I paid for it in 2005. I owe about %60,000 more than it is worth right now. My property taxes have not gone down a penny, cause everyone else around here is in the same boat. I can't afford to go back to college right now... Loans or not.
ppps - We are not doing a great job of bailing out big business. I work for one, and took a 15% pay cut in April. And I'm thankful to have my job still. Graduates should be thankful if they get a job at all before 2011.
We're teaching them well. Just the wrong lessons.
deleting the extra space after periods so i can stay relevant, yeah.
PLUS loan rates were changed to fixed in July 2006, so those receiving loans disbursed from 1998-2006 enjoy the variable 3.28% rate, while those who started school in 2007 and later will be assessed a fixed 7.9%-8.5% rate (in addition to a 4% upfront fee).
I'm wondering if more students have been getting college loans and then leaving the country and changing citizenship. Basically you get a job abroad and renounce your citizenship and stop paying your loans. Cruel I know, but makes you wonder.
Well as long as you stay in the country. Thanks to the Ministry of Social Development we get loans straight from the government and after a year the loan gets passed off to the IRD to get repayed. The minimum rate of repayment is 10% of whatever you earn over an annual income threshold which at the moment is $19,084. So that is nice and automatic and if you want to you can pay back more. http://www.studylink.govt.nz/
I worked my way through college.
It sucked. I didn't get to go ivy league (not a big problem since only a 1270 sat, 3.2gpa, and activities were computer club and D&D club).
Mainly, I didn't get to take a 4 to 5 year vacation. I studied 20 hours on top of 12 hours of classes on top of 40 to 55 hours a week of work.
But I graduated with no debt. It was my choice.
Students have the choice of going to public schools, or cheaper schools over seas, or on-line schools.
One of the reasons colleges have gotten so expensive is that children are willing to take on $200,000 debt to get a degree.
Look- if the professors were not making mid 100k incomes (yea, I know adjunct professors are poorly paid), if the universities were not funding research on the student's backs, if the university presidents were not making $350k!!! and if the universities JUST TAUGHT THE MATERIAL like they used to back in the 50's, then school wouldn't be so expensive.
Health care is super expensive for the same reason. People have shown that they *will* pay anything for it, so the providers have jacked up the bill.
You can get a good solid degree from a public university and graduate with little or no debt.
You can't get an idiot degree of course.
Given the work climate (that any INDIAN or CHINESE national can get a similar quality degree and take your job for $16,000 to $25,000 working in their companies for our corporations), you are an idiot to get a degree for something with that kind of exposure. At least get something that requires you be physically present, or that has national security implications.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
None of this should be a surprise. Part of getting treated like an adult means making rational decisions. I'm frustrated by the high price of higher education, but until people start looking at the pricetag and saying "Jeez, no thanks!" then the demand will be there to drive 10% a year price increases. A lot of people have complained to me about their loans, but no one forced them to make that decision. They apparently thought that going to that expensive school was worth the cost. Instead of complaining about having to pay those debts, they should be thanking their stars that they were able to GO to college (many people don't) and have the opportunities that affords. If they spent 80K$ on an English degree, that implies they thought that they could pay it off with whatever job they could get with that degree. If they made a bad decision, why shouldn't they have to undergo the consequences? Sounds like college is teaching them a lesson even after they graduate.
I'm up to about $100000 so far in my third year of medical school. As you can probably guess, I sure as hell won't be going into primary care. Sure there are ways to get it forgiven, but these are almost more trouble than they're worth. I voted for the Dems this time around, but it would sure be nice if they would help some of us out in these health care reform bills. I realize many would say we don't deserve the help given the salaries we'll (likely) be making, but you have to level the playing field somehow if you want the best and brightest to go into primary care.
The rest of the world is tired or hearing about your health-care issues. Please don't start with education fees!
Hint: most modern civilizations have free health-care + free education.
Another hint: the Red Dragon is awakening while you eat Doritos.
Except for the obvious fact that the country never did invest in the future, but was still great. Kind of fucks up your argument. The GI bill post-WW2 aided the formation of a larger middle class, but other than that, the only difference in the past is that nearly everyone didn't assume that they had to go to college. We had fewer schools and higher overall standards, while people who didn't go to college had more opportunities for vocational training.
Given the poor quality of your ideological rhetoric, I wouldn't hold up your own country's educational system as a standard.
Yup, plus he could have always chosen not get a loan or not borrow as much. The latter could be done with support from family or a job beforehand to build up buffer cache. A loan is a responsibility and a bit of an education in itself: be aware of what you're getting yourself into and accept the consequences. Life is hard and if you're not born into money, you have to take the long road to obtaining it : P. Sry.
You agreed to the terms, now abide by them and quit your damn whining.
I was the oldest child of a middle class family of 3. I applied to 2 public and 3 private universities and was accepted to all of them, but with minimal financial aid. I chose to attend a nearby public university that offered a quality education that cost approximately $10,000/year in the late 90's.
Why did I make this choice?
- I could afford to finance about 75% of tuition via savings that my parents had set aside for me.
- I worked various jobs while in school, eventually hitting $15-17/hr, which more than covered the remaining tuition & expenses.
- I didn't want to screw my siblings out of an education or force my parents into debt. In the end, I was able to leave about $4,000 of my parent's savings for my brother or sister.
I have friends who are teachers who decided that they needed to attend small, private New England colleges with tuition and expenses over 350% more than my education. One of those friends and his wife makes $120k combined teaching, but after years of deferments owes over $300,000 a decade after graduation (not including graduate work form a private school which would have been FREE had they gone to the state university) -- my friend and his wife can barely afford rent, and will likely become homeowners when they inherit a house when one of their parents pass.
People don't need bailouts, they need to live within their means and not assume that they are entitled to a specific lifestyle or type of job due to the circumstances of their birth. If you can't afford four years of college, borrow money to go to trade school and work as a plumber, HVAC, electrician, etc. If you really want to go to college, you'll be able to earn the money to do so.
Conformity is the jailer of freedom and enemy of growth. -JFK
Basically, only public university participates in Direct Loans. Most private insitutions participate in FFEL which basically a private lender originates your loan.
New Economic Perspectives
So you have two degrees, no job and 85k in loans at a high interest rate? Hmm...sounds like a jack-ass to me. Did you really believe your high school counselor when he/she said that going to college would do something for you? Did you believe that a chemistry course would make you employable? Oh, I'm sorry...you took a couple programming classes and made it through the weed-out portion. You deserve to make 6 figures. I'm sorry if I'm not sympathetic but my bachelors took some real effort. Now you can get half the degree by taking AP courses in High School. My masters was challenging but nowadays its just 30 hours of bs. And my Ph.D.? Get your own with 3/4 of the classes online with no peer interaction. Grow up. College education is a business with a major portion being the financial strapping of American youths into financial debt. Not to be a conspiracy theorist but it the writings on the wall.
The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?
You just answered your own question.
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
... but there are many many different places in the world, some of which are outside the USA. Most of these places have different laws, customs, and living standards. The UK is not Czechoslovakia...
If I didn't care about the state of play in the USA, I'd just up and leave, taking my family and my considerable yearly tax burden with me. I choose to stay and try to influence people as I can...
FWIW, my uncle was recently diagnosed with a heart problem back in the UK, he was in hospital the same day, operated on within 2 days and back home 2 days later. The only real down-side was that he couldn't attend the wedding because of the US insurance costs.
And two weeks before the wedding, my mother was diagnosed with breast cancer. She opted to put off the operation-date offered (1 week after diagnosis) and wait until after the wedding. Since then she's been back and had her operation.
My family is not rich. My father worked on the docks, my mother had a variety of part-time jobs through her life. Excellent, timely medical care is something she (and I, until I moved to the USA) take for granted, without any "recission", or "previously established medical condition" nonsense. If you're sick, see a doctor. Get better with as much or as little help as necessary. No co-payments. No payments (at the point of treatment) at all, and if you need heart surgery or extensive (5 years chemotherapy is being talked about for my mother) treatment, there's no questions asked...
There's no way my family could have afforded the medical insurance that would be equivalent to the care that my mother and uncle have just received. They of course don't consider this to be anything special, it's only when you don't have something any more, that you miss it. Similarly, I don't think americans miss it because frankly they've never experienced it. They just keep on telling themselves they have "the best healthcare system in the world", which (IMHO) is only true for the minority of rich americans that don't really need the insurance companies anyway...
Simon
Physicists get Hadrons!
In New Zealand, student loans are interest free as of last year :)
My rate 20 years ago was 9.5%.
So that you don't have to file Schedule A to take the deduction. Which means you don't have to itemize, which is pain in the ass and only when you have lots of other deductions to start with.
New Economic Perspectives
My sister just bought a place for £65k. Simon
Physicists get Hadrons!
Hire lobbyists to "influence" government with money.
Yes, I am being sarcastic. But if that doesn't paint the clearest possible picture of what is wrong with our government and why "the people" are increasingly getting screwed while big business and the extremely wealthy get everything they want on a silver platter, then I don't know what does. We, the ordinary people, don't have access to our government.
so that you won't have to pay the room & board.
Or learn how to live in the basement of a library.....
New Economic Perspectives
Education is a vehicle for social mobility.
Currently in the USA social mobility is dead - in fact it has been reversed. Bigger and bigger wealth is concentrating in fewer hands as a longer term trend.
The wealthiest (lawmakers) simply don't want too much competition, too much highly educated population. Solution: making higher education virtually non-affordable for the masses.
... student loan debt tends to be some of the easiest debt to get forbearance or deferment for.
If you get the right lender / loan manager, of course. In the last few years it's been revealed there's a lot of abuse in the student lending system, not everyone involved is trustworthy.
Tweet, tweet.
I graduated in 2005. I consolidated my student loans with citibank as soon as the grace period was over. My current interest rate on the remaining balance is 1.87% Looks like I got out just in time :)
and consider that International students get more forms of non-loans financial aid than domestic student, then you know something is wrong with the system.
New Economic Perspectives
Me, I'm PISSED at the bail-outs. We've done stupid idiotic things in order to financially support companies that have done stupid idiotic things, essentially giving them license to do more stupid, idiotic things. And we, lowly, powerless tax-payers are going to foot the bill.
"Stimulous money" should go to things that create wealth: Science exploration, improving education, infrastructure (roads, powerlines, maybe the "smart grid") pure research, space exploration. These are things that create wealth and set us up (as a country) for the next big wave of wealth. But instead, we prop up companies that are "too big to fail" who do stupid things like borrow money to buy derivatives that were created from borrowed money. A multi-trillion dollar industry created out of thin air and lots of pencil-pushing.
Meanwhile, our roads are clogged and crowded, our power grid is ancient and increasingly taxed/unstable by the more volatile alternative fuels being used to power it, and our schools lag so far behind that some are even considering teaching creation as "science".
Meanwhile, we squander our wealth with wild abandon, killing Iraqis and Afghans, spending a TRILLION DOLLARS PER YEAR just to send in planes and bombs.
Hey, I have a better idea. Let's take just 1% of that trillion dollars per year, and use it to feed EVERY SINGLE !@## STARVING KID THE WORLD OVER. Yes, that's all it would take. A Billion dollars per year could by a handful of rice, corn, or wheat to put into the hands of every single starving kid in the world. Can you imagine just how much goodwill this would cause? We'd be hailed the world over as harbingers of peace.
But, instead, we send the bombs and drone planes and guns, we violate international treaties by torturing people who haven't been accused of any crime, and do our damnedest to repeat the mistakes the Russians made when they invaded Afghanistan and spent their status as a world power trying to bring order to the same country we have so far failed completely to do.
Just !@#@ing stupid, and it's me, the smart, hardworking, disappearing upper middle class that gets to pay the !@#$ing bill.
Yes. I'm pissed.
I have no problem with your religion until you decide it's reason to deprive others of the truth.
Until you can afford it.
You want an unsecured loan to have the same interest rate as a secured asset?
You want the country to take on more loans which might be riskier than they are priced at.
I know it's not as bad as housing loans being underwritten by the government, but it's similar. We need to get out of this ideology of removing risk for one party of a transaction for "the good of the people" when we are uncertain and can not accurately price those gains (the gains in this case are the externalities associated with having an educated population).
If the education is valuable, the person will be able to gain the returns required to invest this money. If they aren't, then it isn't.
This is my footer. There are many like it, but this one is mine.
University is free.
I'm 37 years old with good credit (and a freshman in college). Stafford loans are the ONLY loans where one's credit rating isn't taken into account and that's a real shame. And for those with subsidized loans and pell grants, I don't want to hear any whining from you about interest rates when you were given handout after handout to begin with.
Health care and Education should be all free so every individual can all focus on providing the best productivity they can offer to the society, without worrying about meeting ends!
New Economic Perspectives
I suck at mathematics worse than most people do. I can't graduate from college for that reason, let alone money. ...so let's do the math on those two things (tee hee). I am sort of glad I didn't go to college.
That you can go to a state university on an honors scholarship, work the entire time, and leave with $40,000 in debt. Since primary education is a joke and a bachelor's is required for most decent jobs, something has to be done about this.
If you are a bit smart today, you don't go to college, you do what this 20 year old girl doing:
http://www.businessinsider.com/20-year-old-buys-home-with-183000-fha-loan-and-just-35-down-2009-10
"Denise Tejada bought a house last month at the age of 20, thanks in large part to a loan guaranteed by the Federal Housing Authority... The monthly payments on her debt amount to $1328. Her income is $2470, leaving her with just $285 a week to live on. She's paying 54% of her income to make the mortgage payments. She earns that income by holding down one full time and two part time jobs."
This is real life education for the times when middle-class jobs are outsourced and disappearing. If she can pull this off, she is a business woman, who can recognize business opportunities, identify most beneficial government programs, etc. She bought the house at the crashed market, taking advantage of historically low interest rate and if she fails, she can simply discharge it in bankruptcy. She is playing the system to full advantage, without raking up debt for education on how to play the game.
Direct loans were cheap, and the consolidation brought them down to ~5% afair.
I had a similar experience -- don't think I ever paid more than ~4% and some of them were cheaper. A lot of it depends on your lender/servicer, though, and they're not always particularly nice institutions...
thats because some idiot decided having non-direct loans and promising a profit to everyone who serviced them. Doh!
Yep. According to this article on student loans, that would apparently be congress circa the mid 1990s.
Over the last 4-5 years, it's been increasingly recognized that this has led to abuses that's getting to be systemic.
Tweet, tweet.
There's a vast difference between the skilled tradesman and what you call morons. Give me a licensed master plumber, master electrician, mechanical contractor, etc and I'll show you someone that truly understands their field and has years of experience under their belt. Sure the variety of assistants range in ability like any job, but to label the actual skilled person as a moron shows you don't understand the field. That'd be like comparing someone who flips burgers to a skilled chef. Also the skilled trades are very strongly union in every major city, unions being one of the strongest backers of the Democrats.
As for continuing education much of the green movement is powered by installation of ultra high efficiency equipments. Pull up a wiring schematic for a 96% boiler and the various pumps and zone valves - it's anything but moronic work.
So what's up with the trades bashing? Watch a few episodes of Dirty Jobs and you'll see some examples of problem solving at the finest.
No kidding.
There are tons of options:
1. Go to community college. Pretty much saves you like 50% on your tuition costs. This is such a ridiculously good idea it should be required.
2. Work during school. Yes, it's hard. But you get both work experience (invaluable if its related to your major, still good if its not) and money.
3. Don't go out of state.
4. Live at home if you can. Yeah, it sucks, but in some parts of the country it'll save you 10k/year or more.
5. Don't go to school. Contrary to popular opinion, it's not for everyone. I know a lot of psych/lit/communications/music majors that left school >40k in debt and starting below the people who worked right out of high school.
The real problem is that you feel entitled. "I deserve to go to college, I deserve a good paying job, I deserve to have my debts paid." You signed up for this when you took the loans. Now you sound like a little baby, complaining because you've been a good boy but the bad man won't forgive your debt. Stop crying for mommy, shut up, and pay up. Remember how your elders would talk about the "real world" that you would someday join? Welcome to it.
and made you sign up for the loans.
Just like no one held a gun to the heads of the idiots who refinanced their house so they could go on vacation.
But expecting to not have to live up to your agreements is the American way I guess.
Imagine how pissed he will be when (after adjusting for inflation) he sees people paying 1/10th of what he paid after the student loan system goes belly up and colleges suddenly have to charge market prices instead of inflated government subsidy prices. That will likely be tempered some by seeing that fixed rate debt evaporate to inflation I guess.
And he's an idiot since student loans are essentially credit card debt not mortgage debt - there's no security. If all those bankruptcy special cases weren't there then they'd be running at 25%.
I'm in the same boat. Tonnes of student loans, struggling to pay it off and find work in my field.
We're going to be a lost generation. By the time the jobs come back, no one will want to hire our tired, old faces when they can pick and choose from the next naive and optimistic generation.
Read his article here http://www.garynorth.com/public/department89.cfm and follow all of the links in the body. Then read this - http://www.lowestcostcolleges.com/ - for a thorough explanation on how to get a college degree quickly and cheaply.
Because of high tuition fees, North Americans view education as an investment, not as the pursuit of knowledge. As a result, we end up at best with a society of soulless engineers for hire (hey I'm on Slashdot and I'm one of them!), i.e. those who went to college, and at worst with an uneducated mass who thinks Africa is a country, i.e. those who didn't or got a cheap education. Where will the next generation of brilliant philosophers, historians, mathematicians, and linguists come from? Probably not North America. And we're all guilty by selfishly not being willing to pay whatever taxes it takes to get rid of tuition fees.
"In our tactical decisions, we are operating contrary to our strategic interest."
For all unsubsidized Stafford loans first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8 percent. The interest rate for subsidized Stafford loans first disbursed on or after July 1, 2009 is fixed at 5.6 percent.
PLUS loans? Parents should have been saving since the child was born.
Every degree is valuable, you know? Every student must get a degree! (probably because we already watered down the high school diploma by insisting that every student must get one, no matter if they can't effectively understand math usage or the meaning of something they read)
Imagine the outrage if it were suggested that physics, engineering, and math were more worthy than black studies, women's studies, and LGBT studies. We're going to Hell in a very nicely woven handbasket.
Perhaps the worst thing is that this perpetuates the idea that college education is generally worthless. When people see college graduates failing in the job market, they often conclude that education is not worth any effort. The correct conclusion is of course that your field of study matters, but that doesn't generally sink in.
Kids needed another reason to work hard in high school. I realized freshman year in high school (4 years ago, seems like just yesterday though) that I wasn't going to be able to go to Rice without some help. My parents might have been able to pay UTexas or UHouston out of pocket but it wouldn't have been easy. So for every NHS meeting I didnt't want to go to, for every Saturday service hour I wanted to sleep through, and for every test I didn't want to study for, I did it anyway. Because my high school success = $$$. I actually didn't end up at Rice- I'm at Clemson, so private vs. out of state public (not a HUGE difference), I was a little more than prepared for the $20-30k a year that they're going to want me to cough up. Guess what! There were people out there that wanted to throw money at me, a white male child of 2 college educated parents making over $100,000 a year! (about that paycheck vs tuition... there are additional circumstances) I got ~65% of my tuition payed with scholarships THROUGH THE SCHOOL, an additional 15% from other scholarships, and the rest was paid between my parents and a small loan I took out (a few grand a year, I've got educational savings still building up for that. Don't ask how it worked out to use savings to pay the loans, it just did). Thought college was too expensive? Tell that to the kid that got a full ride for being almost as smart as myself AND poor.
I like your ideas and would like to subscribe to your newsletter.
Now since I'm an engineer, that involves at some time during the process of education access to big, heavy, costly machinery. How will one be "creative" there?
Current day Education is industry and business. Do a search on Ivan Illich and you'll understand what I mean.
Well thankfully we have boards like slashdot to demonstrate just how utterly they failed.
Is their earning potential at the moment is not so much, but they're chock full of organs! And they're hardly even using a lot of them! Perhaps they could turn this organ surplus to their advantage somehow...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Except for the obvious fact that the country never did invest in the future, but was still great.
Not so--the US really did invest in its future in a lot of ways that really mattered. The question is, unlike 50 years ago, is higher education now one of those ways that really matters? That debate would be long, but I'd put my money on the "yes, it is" team.
You think like a ReThuglican Jew
Mortgages are secured. If you don't pay, the bank takes the property and sells it off to get their money back. How do you foreclose a college education?
#2, you need to be a good credit risk to get a mortgage. Student loans are given with much less regard to the ability to repay. the risk is higher, so the interest is higher. In effect, being responsible and paying your student loans means you're subsidizing those who can't pay theirs.
What to do? Get a job, and pay that sucker off ASAP. Don't make the minimum payments, pay as much as you can afford every month until the minkey is off your back. Yes, it will take a while. Get used to used cars and comparison shopping. It's galling how the universities jack up the tuition and fees because they know you can borrow the money, but you did sign on the dotted lines and now you gotta keep up your end of the raw deal.
Not all direct loans have subsidized interest. Most of my loans are of the unsubsidized type, and while not due while in school, accrued interest from the date of issue. Some of my loan money is subsidized, and is not accruing interest while in deferment.
The first chunk of my loans, issued pre-Fall 2006, are at ~1.8% and is a variable rate. My loans issued Fall 2006 and onwards are at 6 and change. My only complaint is that they refuse to let me pay back the higher interest loan first, telling me that federal law prohibits it.
Loans for graduate school are higher, my wife has graduate PLUS loans at the 8.5%.
2 years in the Peace Corps will not forgive any of your loans, it will just get you a two year deferment. Those PLUS loans of the OP are going to sit and accrue interest at 8.5% for two years. The $6,000 "resettlement" cash PC gives you when you return won't cover the interest on his loans. Not withstanding any other benefits (increased employability, personal growth, ect), the PC is a poor economic decision for recent graduates with unsubsidized loans.
I got a *private* student loan from a bank and I only pay 5% interest. My problem is tuition has gone up so much I'm not sure I can afford my last year without more funds for tuition, but I can't get more funds because the credit bar has been raised so high I don't qualify for anything even though I have a decent income and a high credit score. The lenders, the government, and the people who borrow more than they can pay back have really fucked over a lot of good people who pay their bills and keep their promises.
8.5% is cheap for an UNSECURED loan that doesn't START accumulating interest until AFTER you graduate (actually Govt pays interest till you graduate).
It's not dischargeable, and the overall default rate is low. How is this a risky thing?
Dude- you got $85K with ZERO collateral. The rate is NOT unreasonable. It is the best investment you can make for your future.
It's an investment, but you got the roles reversed - the government is investing in you. It should be subsidised. Increased tax revenue should make up the shortfall later.
Reboot macht Frei.
HECS - Higher Education Contribution Scheme Creates extremely low interest loans (5% is not low interest) that can be paid back via tax. Of course this option is only available to Australian citizens but is a system that pays for itself (just not all at once) in addition to increasing the amount of skilled labour in the market.
What many yanks dont understand is that investing in education, even someone else's education is an investment that benefits everyone (even you, mr libertarian) because if you have more people who have higher paying jobs then everyone pays less tax due to the cost being spread around and more disposable income being spent.
Calling someone a "hater" only means you can not rationally rebut their argument.
Citi, JPM And Nelnet were implicated in a huge student loan conspiracy to commit fraud. Not only do they make hand-over-fist on student loan interest, they were apparently engaging in fraudulent activity such that they made EVEN MORE money. That's what greed gets you...
http://www.zerohedge.com/article/nelnet-whistleblower-scandal-hits-wikileaks-jpm-citi-and-nelnet-implicated-massive-conspirat
People want to go to expensive schools because those schools have good reputations, but schools get those reputations from being exclusive. In other words, expensive schools are more desirable in part because they are so expensive.
When you graduate from a pricy school, you signal to others that you are high class.
But it's not just college loans. our entire culture has shifted so far toward individual wealth and away from the common good. The 28/40 year republican rule in the country has pretty much decimated civic values, put us 12 trillion dollars into debt (almost all of it in republican administrations)....
The richest people WANT to see high interest rates on the poor. That's how they make their money. Investing. As far as they are concerned, the higher the better. If a student will pay 8.4% interest, then they are a lot more likely to give him money than the guy only willing to pay 3%. And the more wealth is concentrated in the hands of the rich, the easier it is to raise interest rates to the absolute maximum possible.
The fact is that the free market systems we all love, start to fail at some time. It's always cheaper to pollute the stream, pass debt on to future generations, and screw the poor. It's more expensive to treat the water, raise taxes, and educate and help the poor.
The truth is we need to raise taxes on the wealthy and start putting money back into the common good like an educated public and public infrastructure instead of idiotic private McMansions.
Let's start with the idiotic low taxes on capital gains and the social security tax cap...Rich people pay FAR less of a tax percentage than the middle class, and the middle class is unbelievably ignorant of it. How many of you knew that there is a 13% Social Security tax that ENDS when you make over $106,000? The richest person in the world (Warren Buffet) pays a lower percentage in tax than his secretary? The rich don't even pay tax on money made through stock appreciation, until the stock is sold? But the wage guy has to pay every year?
It's gotten ridiculous, and the public needs to demand that taxes are raised...The rich will fight it tooth and nail and use all sorts of scare tactics and , but that's the only way things are going to get better....and the rich will NEVER do it voluntarily.
Write to your congressman..ask him to raise taxes...especially on the wealthy
http://www.house.gov/
http://www.senate.gov/
My folks supported me for about €60 per month for the years I spent in University and I graduated with less than €3K of student loans.. Without working while studying.
Of course now my income tax is around 30%, but I'll gladly pay it to pay off the studies of those coming after me.
You can get a fine education at a cheap school.
You'd rather attend an expensive school, because then employers will think you are more upper-class. (used to be called "good breeding" before that got offensive)
You'd rather attend the school with beautiful landscaping, fine dining, easy access to an exciting nightlife, and so on. Well, duh, you're going to pay for that. In part this is because providing those things is costly. In part it's because you're in a bidding war with all the other potential students.
Is it any surprise that schools offer you what you demand? It seems that you didn't take the economics courses at your school.
Obama passed a law saying that all federally backed student loan debt is forgiven after like 10 years. I didn't really like the law myself. I felt reducing the payments for current students was more important. But anybody asking these questions, i.e. theodp the o.p., has not even tried using google to find their answer.
Search for Income Based Repayment
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
There's a bunch of countries out there where if you get admitted into a university, the government picks up the tuition bill, period. Those countries ain't richer than the USA.
Sure there are. There are differences though. Speaking for the country I am in, anyone can go attend lectures, almost for free. Fine. But:
Why are tuition rates so high in the US? Economics 101: Supply and demand. Everyone in the US has this delusion that they need to go to college. Half of them study some useless liberal arts field that will leave them flipping hamburgers to pay off their debts.
Enjoy life! This is not a dress rehearsal.
That just got modded "flamebait" by somebody who clearly resents being reminded that some degrees (his own most likely) have nearly zero economic value.
It's an annoying way to stifle debate, but at least I find it amusing. :-/
It amazes me that people put up with that level of interest on student loans in the US. In the UK, my student loan is currently at 0% interest (Due to the current base interest rates) and it was only at 3.5% the last couple of years with base rates of ~5%. If you were lucky enough to take out a loan before 1998, then you're currently paying -0.4% because the interest is linked to the Retail Prices Index (RPI) and we're currently experiencing slight deflation by that measure.
1. What are the consequences of higher education being out of reach for most students? Because that's what you are advocating. There's no wiggle room on this. Your position is, if the student can't afford it then the student doesn't belong.
2. Would you say the same thing if all of the pieces DIDN'T fall into place for you?
3. Would you say the same thing if there were viable alternatives in the U.S? I'd like you to elaborate on the legions of wealthy construction and low-end sanitation workers who can make the math work to improve their general social status through education.
4. Would you say the same thing if the Bank of Mom and Dad didn't fund your education? Chances are at least 60% that your rugged individualism B.S. is supported by the Bank of Mom and Dad who can afford to carry you at any given time.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
College students from every previous generation have had a reputation for being poor.
You forgot to add, "in the United States of America".
Why compare the present situation in U.S. with what was there several decades ago, when you can compare to education systems of other First World countries?
According to http://www.springerlink.com/content/u380751518251x56/
"Majoring in a scientific or technological discipline, earning good grades, persisting to degree completion, getting and staying married, and not having dependent children are all actions that substantially increase the likelihood of repayment and lower the likelihood of default."
You have to pay to get the full publication I guess, but that first part says what should be obvious: people with nerd degrees don't default.
I've recently learned that for the most part student loans don't exist in Japan. Students' tuition is either paid for by their family or they work part time while in school to pay it off. I can't help but wonder how expensive college is in Japan for this to work.
Maybe the issue isn't that student loan interest rates are too high but that colleges themselves charge too much in tuition to start with. Maybe 20 years ago a college degree was pretty much guaranteed to get you a good job. Nowadays, is it really worth the money U.S colleges charge anymore?
THANK YOU, Sir!
FINALLY there's some fresh proof that education is the world's biggest Dutch Tulip enterprise. Yes there's scholars at the front of the room, but did'ya know, he's teaching the same courses every year. So I agree the Labs have scary fees for equipment, but the lectures ... are just words! And with or without backing instruments, we all know how cheap WORDS are...
Part of the Uni deal is holistic discipline, 'cause otherwise the kid might cram pretty hard for 6 months then fry out and quit his studies. But thank you for the proof I have searched for a long time now.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
5% vrs 8.5%?? why???
its called: C O L L A T E R A L
simple, really....
At what rate do you even imagine having to pay
for a home which is not held by the bank as collateral?
30%?? 40????
"There are 11 kinds of people: those who know binary, those who don't, and those who could not care less!"
> "Like many recent college grads, Steven Lee finds himself
> unemployed in one of the roughest job markets in decades
> and saddled with a big pile of debt -- he owes about $84,000
> in student loans for undergrad and grad school.
He should count himself lucky that he's only got an $85,000 student debt.
I know of people who have well over $100,000 student debt as their Veterinarian course fees were hideously expensive.
"you have just screwed yourself, and by borrowing that kind of money you prove that you can't or won't spend even that much effort to think before borrowing."
Alternatively people can screw themselves by not getting college education.
So maybe people do think it through and conclude they don't have much of a choice.
I have a government backed student loan... but it's following the 3-month Euribor index. All our student loans follow some index here and the only difference is how much extra rate the bank charges except from the euribor. In my case it's ½ a percent extra my bank takes. So a student loan of 8% is rediculus in my opinion.
Angry? You just got a "free" education, dummy. Sure, you have to pay the money back,
HAHAHAhahaha, you can be jealous of me. I got completely free undergraduate education from my government. It also gave me a PhD scholarship to travel to any place in the world (I decided to go to the UK) and I do not have to pay a cent if I do not want.
What will I do? I will go back to Mexico to transfer my knowledge to other students in my country. That is the payment they look.
Government investment in education means that they await for a "payment" in better educated individuals. If what you have to return is money (in addition to the high interest rates) then they are seeing you just as a money producing machine.
Get a job.
I paid my way through university after saving money from 12 yrs old on. No loans, no grants, no scholarships. I worked 30 hours a week in fast food all during college. My parents paid for room and food only. See there were 5 other kids before me in college. Christmas wasn't $1000 of gifts in my house - rather, $50 worth of clothes that we needed and a toothbrush.
When I graduated, I had ZERO debt, no credit card, and an average GPA. I got a job and a few other offers. Someone with $80K in debt who also applied for those jobs doesn't deserve them, IMHO.
Get a job. Start flippin' burgers and stop complaining.
and so is in most of the EU. In spite of this, the scientific output of Finnish universities is comparable to that of the US institutions. I don't deny that the US has top-notch universities. But they are not significantly better, per capita, than Finland's.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
Thats the trick, do all your subjects exams, bar one exam, and walk out, dont graduate.
How can MS refuse, just say, if its goog enough for billy, its good enough for you.
Liberty freedom are no1, not dicks in suits.
Where have you been dude.
USA is broke.
$70 trillion in obligations, not even a 99% tax rate will fix it.
You're on borrowed time, expect alaska, california, hawaii to be sold on ebay to other countries.
The only thing that will fix usa is a massive pendamic virus that will kill 90% of people over age of 60.
How late is the 787 dreamy liner? how many Airbus380s have flown?
Liberty freedom are no1, not dicks in suits.
Seriously. My wife and I finally gave up on the US. It's not possible to fix the problems. So we took our money and moved elsewhere.
The problems are as obvious as the solutions, which will never be implemented. Watching news from the states is like watching the band play on the Titanic.
There are too many people who shouldnt be in college, too many people in debt to a college that they shouldnt have gone too, which results in too many students defaulting on said loans. The higher the risk the higher the interest rate.
while education is a good thing, we have too many college grads who took "liberal arts", didnt learn anything (but have a nice piece of paper), and are working the drive thru at McDonalds.
We need to build up the vocational system, teach students useable skills (would help if they did some of that durring the K-12 years), which would make for a more productive workforce.
Thanks to file sharing, I purchase more CDs
Thanks to the RIAA, I buy them used...
Education shouldn't be a business. I vehemently oppose to student loans because I vehemently oppose to tuition.
The total amount of money involved, for all students in the country, is not huge. A couple of billion perhaps?
Why doesn't the government just stick that money in a pot, and issue the loans themselves? They can charge a notional low rate of interest, and set favourable rates of return. This is, after all, investing in education, and in the country as a whole, why try to gouge the rates up and punish people for trying to better themselves.
The UK government has a good system (or did 15 years ago, when I graduated). I could:
- choose how much to borrow (up to a limit, but I could borrow less)
- got a good rate of interest (1.2% or 1.3% I think)
- payments started a year after graduating
- didn't have to repay if I was earning around minimum wage (£12000 a year I think)
- could pay it off early if I wanted to
At the end of it, the government gets their money back (plus interest), from almost everyone, and they end up with a more educated workforce. Why exactly would you want to cripple that?
I would have loved a higher interest, deeper loan. I could have finished my degree 4 years ago instead of fucking around with trying to balance work & school. I wound up getting student loans for one year...and that year saved my broke ass from being expelled due to low marks(hard to get good grades when you work 80 hours a week). Even if I wind up paying 9-10x the cost of my degree in interest it would still be worth it. I didn't qualify first because my parents made too much money. Then I qualified...but only for a year, the next year they decided that my paperwork wasn't good enough or something. And I've been paying off not only my university, but my student loan ever since. On the upside I'll be relatively debt free come graduation in a few months...but I've thrown away most of my best years on working shit jobs for nickles on the dollar of what some of my peers are making.
GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
They made the choice to take out the big loans and now they're bitching about the terms they signed. Boo hoo.
And yes, big student loans are a choice. I worked full time 6 days a week and took classes at night where I could squeeze them in. It took me longer to get there, but I came out the other end with a minimum of student loans that I then paid off in a couple of years. (and no, there was no walking through the snow)
"An unarmed man can only flee from evil, and evil is not overcome by fleeing from it." Col. Jeff Cooper
I don't understand all the hate on this article. "You should have known what you were signing up for" "College degrees are worthless" "You're making six figures, you can afford it", a lot of rage, also some contradictory posts, but all of them lacking the basic tenet: Education is good.
The more people who go to university, the more qualified the nation as a whole. This increases their wealth and power internationally, as well as improving quality of life on a basic scale. The more wealthy and powerful they are, the more revenue they bring the government, and it goes on from there. Government investing in people and training is a good thing, surely?
The reason it's so expensive is self-fulfilling - people are prepared to have a lower quality of life (remortgage their home, work while they study) to fund it, so the universities jack up their prices to match. Just think, for the $84000 debt in the article, one could have hired a graduate for maybe a couple of years, and got 40 hours 1-1 training! Univesity does not cost tens of thousands of dollars per student per year to run. The money's being siphoned off to the private sector.
By making university less attainable, you end up with a lower quality workforce. This is why immigrants are flocking to the US, because they come from countries where education is more affordable, so they are more qualified. They're taking jobs (dey tk ur jerb!) because the american people is not educated enough as a whole to fill the market. The thing that I really don't understand, is you have a world leader country in terms of money, lifestyle, technology, science and research, why is it that poorer country immigrants are working for you, rather than you being paid large amounts of money to go over to their countries and bring them up to speed?
I think american corporations are rich; they have the money, the resources, they need the skills. The american people are increasingly education-poor, because the system doesn't help them. And increasingly, the corporations will take workers from other countries, who have the qualifications and skills necessary. The government of these countries (India, some European countries etc) are enabling their people, educating them, and it's working - they're getting well paid jobs in America! The American government needs to support their people to at least the same degree, make education available as a first step, rather than a challenge, and get their population being world leaders.
Since they're nondischargeable in bankruptcy, your collateral is effectively infinity: all your future earnings and subsequently-acquired property.
Student loans are backed by the feds. The feds have the full force of the IRS to make sure the all debts are paid.
In other words, student loans are the safest loans that can be made - much safer than home loans.
People who advocate ## 1 and 2 have likely never had to do either. #1 is a terrible option, as it absolutely wastes the most brilliant minds. That's effectively two years of potential research opportunities and learning wasted. It would literally retard the "creators" by two years across all of society. I was accepted into a prestigious undergraduate program where we could work directly with tenured professors in the sciences. Many of my friends did this their fresh and soph years.
#2 is also terrible. I worked one year in school, and my GPA dropped nearly a half point. While there isn't a 1-to-1 correlation b/w knowledge and GPA, it's not a zero-correlation either.
>>Because if you default on the mortgage, they can take your house. Education repossession technology is still in beta. Even when it works it and rarely returns anything of value.
If you default on student loan the IRS can garnish your wages. This means a student loan is far more secure than a home loan. A home can lose value, or you can go bankrupt. You can not avoid student loan repayments even though bankruptcy.
Most careers won't even look at you unless you have either 5 years of experience in their field, or a college degree. The careers that don't ask for such things are minimum wage, typically dead-end too.
So, for little Billy student his options are a little limited. He can either take the financially responsible route and go for those minimum wage jobs, working seven days a week and getting roughly $20k a year to live on. Maybe when he's in his 30's he can start on college with a responsible loan size and really get started on his life.
Or, little Billy student can take a huge risk and bank on his career choice being a good one. If he gets a good paying job, $70k a year let's say, the student loan debt will be manageable and easy to deal with. There's a lot of college-level jobs that aren't filling up because everybody tried to cram into IT.
Just to look back: Billy student can be responsible and put his future on hold for over a decade, or Billy student can be risky and plunge right in. If he's diligent and doesn't give up, he may be rewarded. If he fails, then he'll go back to the minimum wage jobs. Of course, the huge difference is that he'll be able to continue sending out his application to jobs his college degree fits with.
in france students complain about 150$ or less a year university, well dont remember numbers exactly but for sure less then 1000$ a year..what US students pay, make me feel they become slaves since birth.. unless they come from a rich family. But to come form a rich family, doesn't make you more clever, hence it is definitly unfair.. good way to make most people have a sword above their head, called loan.. you get used to it since birth.. and you end up thinking to take loan is no worries.. then you end up with subprime.. in the meantime (big) banks taking all benefits (they can't go bankrupt)
Education is a marketable commodity. Give me one good reason why private educational institutions should charge less for it. Other than "out of the goodness of their hearts" I don't think you can. This is the same entitlement-bound "thinking" that manifests itself as the "why does profession X make so much money... they should really make less... how hard could it be...", etc...
No one owes you an education. The government WILL provide you with 12 years of education... and if you cannot afford private universities, there are public colleges that are substantially cheaper. Or you could, you know, study and get a scholarship. If you're a B+ student or higher, you'll be able to get a scholarship somewhere, at least a partial one.
So please stop whining. Yes education is expensive (trust me, I know). But on average, it drastically increases lifetime earnings... so look at it as an investment. Do it, or don't do it... but please stop thinking that someone owes it to you.
Dude, politicians have always claimed that education is the most important thing when they campaign. However, they rarely EVER deliver on their promises. And if they do try, it's only because they'll be raising your taxes as well. As far as the student loans go, you were the one who took them out. Other people go to crap schools for cheap just to get a degree and a stable job until they can actually AFFORD to go to schools were you probably used your student loan money on. It's a gamble, and you lost. Call me harsh, but that's an existential problem. You made the choice, regardless of the circumstances. Now you have to deal with the consequences. But don't get too upset, when you do suceed (and you will, it's statistically bound to happen) you can take all the credit because you made the right decisions.
Easy solution - leave the country. The only way they could go after you then would be to sue you and get a judgment against you, and borrowers living in foreign countries are ineligible for DOJ litigation referrals. (Warning - Word Document. Look on page three).
There are much better places to live in this world than America despite with LimBeck, Sean Hannity and Fixed News will have you believe. There are many nations with lower unemployment rates that welcome immigrants, particularly educated and highly skilled ones, with open arms.
I live in Denmark, here students get roughly 1000 dollars from the government each month, and studentloans have intrests of about 4% (however, they use a system which makes it almost impossible to figure out exactly what it is untill you're done with you education and have to start paying it back). Still, the 1000 dollars a month means that most don't need to take out student loans.
It has probably been said before, but it bares repeating. TANSTAAFL, let this be your first real world example that. There are alternative ways to replay your loan. For an example:
Peace Corps. Volunteers may apply for deferment of Stafford, Perkins and Consolidation loans and partial cancellation of Perkins Loans (15% for each year of service, up to 70% in total). Volunteers make a real difference in the lives of real people with two years of service in more than 70 developing countries. Contact the Peace Corps at 1111 20th St., NW, Washington, DC 20526 or call 1-800-424-8580 or 1-202-692-1845.
Load Forgiveness Programs
I always wondered how my life would have changed if I had gone this route. I have this romanticized vision of working in dangerous, tropical climates with hot, altruistic babes with advanced degrees. I find a nice one and after a few years toiling away at toughest job we ever loved, we enter private industry and are bowled over by the size of our first paycheck. And since we were have a large portion of our loans out of the way and are accustomed to spartan living, we start building a roc sized nest egg. The naivete of youth.
The cancel button is your friend. Do not hesitate to use it.
Because you can't foreclose on someone's education. Next question.
As a student with 10+ years of education, 3 years of actively accepting student loads (which have been accruing interest for the last 8 years), and a wife with 5+ years of loans already in repayment I feel justified in saying "BOO FRIKIN' HOOO"
A college education was never meant to be a guarantee of future financial stability, especially in the short term. We need to get away from this pervasive mentality of "Things didn't go exactly according to the PLAN. The Government needs to save me!!!! WAAAAAAAA".
Of course it sucks trying to find a job in the current market, and I sympathise as I'm currently looking for my next job as I'm going to graduate soon. However, that doesn't mean that the federal government, who already bent over backward in order to help me get the loans I needed in order to persue my education, should be expected to further subsidize me into my 30's. Grow a friggin' pair, and if necessary get a job working at McD's and rent the shittiest appartment you can find to make ends meet. This sense of entitlement to an easy life, simpy because you are college educated is assinine and juvenile. The education is supposed to give you more skills, based on the idea that more skills make you more valuable. However, if you pursue a degree in which those skills are next to useless (I'm looking at you art history majors), or one in which the market is oversatturated, well then you were an idiot and deserve to suffer a little for your stupidity. That doesn't mean that you should be able to get your education for free, just because it took you a little while to find a job.
We need to stop supporting those that have made stupid decisions or else they'll never learn that there are consequences for their actions. I learned that in middle school, my older brother took until after high school, and apparently some have failed to learn the lesson despite being 22 (Bachelors), 24-28 (Graduate Degree), or even older 50-60 (Corporate CEO's that ran their companies into the ground). Maybe I'm just an insensitive clod, but not everyone can be happy all of the time. A little hardship can build character, just as our grandparents.
There are nowhere near as many people suffering as there were in the great depression, all the "Worst recession since the depression" hyperbole aside. If the current hardships mean that it takes you an extra 10 years to buy a house, or that you have to settle for something less than a McMansion I'm not going to be losing any sleep over it. I will probably lose more than a little over my own financial problems, but they are MY PROBLEMS and not the governments. A little more personal accountability on behalf of most Americans would go a long way to improving our collective condition.
Bureaucracy expands to meet the needs of the expanding bureaucracy.-Oscar Wilde
Free as in butterflies or free as in beer? I'm interested in seeing some relief from the tyranny of the education-industrial complex, if it's not too late.
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
Most careers won't even look at you unless you have either 5 years of experience in their field, or a college degree. The careers that don't ask for such things are minimum wage, typically dead-end too.
This would be a good point if it was anywhere approaching true. There are plenty of career options that don't fit either of these descriptions. Heck, if you really think that, then you could join the military, which will take you without a high school diploma and pays significantly better than minimum wage.
So, for little Billy student his options are a little limited. He can either take the financially responsible route and go for those minimum wage jobs, working seven days a week and getting roughly $20k a year to live on. Maybe when he's in his 30's he can start on college with a responsible loan size and really get started on his life.
if Little Billy can't rise above minimum wage given a decade, then he's certainly not going to cut it in college. It took me six months to get promoted to floor manager at a grocery store, and I was in high school at the time. As I said above, if he's got no other options, ten years in the military would get him a huge boost on his college bills, and would pay him a living wage in the meantime.
Or, little Billy student can take a huge risk and bank on his career choice being a good one. If he gets a good paying job, $70k a year let's say, the student loan debt will be manageable and easy to deal with. There's a lot of college-level jobs that aren't filling up because everybody tried to cram into IT.
Or, he can attend a school that won't leave him with crushing debt. There are plenty of colleges that can net you a degree for a sum that doesn't require $70k a year to afford.
Just to look back: Billy student can be responsible and put his future on hold for over a decade, or Billy student can be risky and plunge right in. If he's diligent and doesn't give up, he may be rewarded. If he fails, then he'll go back to the minimum wage jobs. Of course, the huge difference is that he'll be able to continue sending out his application to jobs his college degree fits with.
Or he can be a bit more sane about what he can afford and get a degree without swamping himself. Just to look back, the world isn't divided up into jobs that require a degree and minimum-wage-forever dead end jobs. Anyone who can't find something in the middle of that (at least when they're coming out of high school) isn't looking hard enough.
Virg
Or Billy can work while he is in high school, save his money and use it to pay for part of his college instead of all the crap he spends it on.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
It was the "citizenry incapable of evaluating arguments and ignorant of history" aka "the average person" who kept *them* in check - the "useful idiots" as Lennon so lovingly referred to them were born out of western higher education.
omfg!
So all the academics and university students had their chain pulled, however, the ignorant but virtuous citizenry kept society together.
Riiggghhhhttttt.
Sounds like you believe in an illiberal democracy, whether you know it or not.
Like all pain, suffering is a signal that something isn't right
I have a student loan, that the government seems to think that I should be exempt from being able to declare bankruptcy when big companies that already had all the incentives, and bonuses and bla,bla,bla, can turn around and star fresh the next day, after declaring
bankruptcy and with a smile, tell you it's all legal, well here is something legal for you, although it stinks for 7 years after wards.
If your goal is to start fresh, then you can take out a line of credit equal to the amount of your student loan, once you have been in the work force for awhile, and have been making a lot of money, then turn around use that credit to pay your student loan, and now you student loan, being paid in full is no longer subject to regular student loan crap, as now your loan is a full fledged loan which you can then declare bankruptcy.
There are flags you need to side step, you need to have been working for awhile, you need to make sure you have built up credit on the side and never missed payments, and then when you get pre approved for stuff, use it then cancel it after a few usage, it shows as traffic, good traffic on your credit line....then once you get a pre approved line of credit, start using that, and then by never missing payments, you will be able to get more and more, once you get the amount close to what you owe, you can use it
to payoff your student loan, then declare bankruptcy before the bank has any wind of it.
This might not work if you haven't been up to date with payments, or not pre approved for lines of credit, as this happens only when banks trust you, so you have to eventually do some good before you can do some bad.
Sad, but true....
I don't recommend doing this for small loans of lets say up to 20 k, but a student loan like 80,000 is one I would work at like this for a while, and then go for that line of credit switch. Problem with this is for 7 years after that you have no credit, ...here. You can always go to Dubai and work there for 7 years, and then come back....lol
really are you crying over a loan that you didn't have to pay until you graduated?
a loan that will land you a job making 6 figures plus most likely and you want to cry about the money that was
free for the past 4-8 years?
this is a good starting point about whats wrong with everyone born since the 80's
they all think they are owed something..
Because you students are who is needed to pay for the other bailouts. Now go procreate and create us some more slaves.
What I think is criminal is how we can only deduct $2500 of our interest payments.
After bailing out wall street, the banks, and the UAW, why can't "they" bail out students now? Simple. "They" (we) are broke. Actually, we're worse than broke. It'll take a few more years of suffering before we can get back to being broke.
I had friends who tried to work while going to college. Most of them dropped out or failed so many of their courses that they ended up staying twice as long. The lesson that I took from it is that it's easier to pay off some debt than it is to explain a crappy GPA at every interview.
Or have you promised to pay over a certain time span ?
Probably not. I paid off my GATE loan early, and I paid off my U.S. direct loan early. Freetership has its privileges.
Student loans are a scam. It's as much of a scam as 'having a better life' or 'getting an education'. It's a lie that you are told as a child in order to get compliance.
I'm 125k in debt, and I already filed bankruptcy. I panhandle for money and I read slashdot at the library. Come visit if you're on 9th avenue sometime! I own nothing but a pretty piece of paper hanging on the inside of my cardboard box.
Getting an education was the worst decision of my life.
So, just to do the math...80,000 - 4800 = 75,200.
Yeah, Billy would have been in the green if he saved every penny. /sarcasm
Even if Billy had worked all 4 years of high school (that may not be legal depending on his state's minor-employment laws) he would not have been able to accrue 80k unless he managed to find a job that would pay 20k a year to him working part time on a school schedule. And this is also assuming that Billy could finish his homework and maintain stellar grades with near constant work.
So, if Billy worked every day, and worked nights during the school week, and stayed up late to do his homework when he wasn't at work (maybe even doing his homework on his work break), and worked every day during summer vacation for his entire high school year, he'd make roughly 80k. He'd also be stressed, depressed, a loner, and would have minimal to no spare time to do anything besides work and study. While his summer vacation would offer a few more hours of freedom, he probably would not do much besides sleep, eat, and work.
If he worked weekends only during the school year and worked all summer, he may be able to make 40k.
However, this also assumes that he could keep two minimum wage jobs (as they all hire you part-time, which means they give you hours as they see fit), and do good in both of them so they don't fire him. When I was working in high school, they would give me maybe one or two days in a week to work, and give me four work days when it was a busy season.
Billy would also need to find a way to and from work that wouldn't cost him gas money. Billy would have to never go to the movies, never buy music, never buy video games, and so on. Unless Billy is going to college to be a business man, he'll be so disconnected from the world that he'll be lost in college. Graphic design? What's that Billy, you never used photoshop before? What's that Billy, you never even owned a computer?
I completely agree with you about skilled trades (like a machinist) being every bit as valuable to our society as someone working in a "white collar" office job. But unfortunately, we *also* still have a system in place where we generally pay salaries based on one's "credentials", instead of based on how well they can do a job a company needs to get done.
People with the most "formal education" tend to be the ones calling the shots in financial matters in companies, and they gravitate towards rewarding people based on the formal education metric.
Therefore, a top-notch CNC machinist will still only get paid the "going rate" required to employ one, whereas someone in management who holds a degree from a "prestigious university" will keep getting salary increases, if only to "keep that talent from walking out our door and going elsewhere". Half the time, it's a bit of a self-fulfilling prophecy at some point. The upper-management character who starts drawing a salary well into the 6 figures generates a perception of offering great worth to a company, simply because he's compensated that well. He might not really do much of anything beyond the basic essentials (and got lucky that the people below him are working their butts off, and just happen to be providing a product or service that's in high demand) -- but that salary he draws "proves" his worth to everyone else who might be hiring.
Your post points to the military a lot. The military is not for everyone. If every kid thought that joining the military was the best thing to do, we'd have more kids coming back in body bags. Would it be good for little Billy to learn discipline? Of course. Would little Billy die? Maybe. Would little Billy die for a cause he don't give a damn about? Probably. Would little Billy be safer simply taking out the damn loan? Definitely. It seems a bit extreme when possible death or physical injury is less of a hazard than having debt.
Just like not every high school student is going to be the next Einstein, not every high school student is going to be a soldier. We're all good at certain things, and we really need to stop trying to make everybody okay at everything.
I recognize that postponing grad school for a few to several years would have a negative impact on a scientific/academic career.
Citation needed. I know some nurses who got an LPN, upgraded it to RN and BSN by going to nursing school part-time alongside their nursing jobs, and took the BSN with them to med school.
I'm very surprised that the person in the article has such a high interest rate, though. Are those the interest rates now? I got my loans during the 90s. Mine were always less than 7% (same with everybody I know that has student loans.)
It's not about "handouts", fuckwit, it's about getting a fair deal. If you and John McCain go broke and are forced to declare bankruptcy tomorrow, he's free to seek new mortgage terms for his 11 secondary homes while you are Shit Out of Luck on your student loans. THAT'S what it's about.
Maybe you'd have an easier time seeing that if you weren't so enthusiastically grabbing your ankles for the rich and powerful while putting on airs of elitism.
Ireland has done wonders with free post-secondary from what I have heard. While just giving away free post secondary is a horrible idea, there has to be a better way to deal with this (ie-top students in high schools SHOULD be sent to post-secondary for free, and mid range students should have options, like working for 2 years and having money deducted to "pay" for their college). A high school education now means sweet fuck all. You can essentially have the same job with a high school diploma as you would without one. So therefore better education is going to become a VERY hot topic in the near future
Defender of Microsoft and Communism!!!
Let's put your sentences together in a fashion that actually fits the facts:
#2 is also terrible. I worked one year in school, and my GPA dropped nearly a half point. While there isn't a 1-to-1 correlation b/w knowledge and GPA, it's not a zero-correlation either.
I don't live in the US, but I wanted to share that I worked my way through University, and while my grades weren't as good as they could have been, I definitely recommend having some real-world job experience (especially if you can do it in your field of study - IT as was my case), and I wouldn't care that much about a GPA or whatever.
In my case, I'd definitely say the work experience more than offset the possible difference in grades.
There are three kinds of lies: lies, damned lies, and statistics.
I have 6 loans over 2003-2007. 5 are variable and are currently at 2.48%. One is not variable and is at 6.8%. The variable are before 2007. The fixed higher one was in 2007. So basically congress helped the banks by switching loans to fixed rate loans and allows them to collect absurd interest rates on what is essentially a no risk loan.
...where far more higher education costs are covered and they have single payer health care. Under teh evil Socialism, college grads over there don't have to worry about 6 figure student loan debt or trying to start a business while having to deal with health insurance.
But we can't have that here, as elitism and ankle grabbing are as American as apple pie.
Let's see:
So, what you are saying is that you worked less than a thousand hours over the course of 2-3 years. Now lets assume billy manages to work 3 months full time, and 9 months part time, say 15 hours a week, at a job that pays $6.00/hr:
So, Billy could make around $12,000 in 2 years, not including interest if he put it in a savings account. That also assumes that he doesn't get a raise because he works just hard enough to not get fired. And, it also assumes his parents never put any money away for his education and that he didn't get or save any money over the holidays. It also assumes that he got things like video games, computers, music, etc. the way my nephews did, as holiday and birthday gifts.
He would have to work while going to college, but I am fairly certain he could get manage that as people do that every single year.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
No, it's about making intelligent decisions about your liability and prospects for being able to live up to obligations you take on. It has nothing to do with being enthusiastic for being taken advantage of. I think if our bankruptcy laws were a little harsher, people would be less likely to take ill advised risks with other peoples money.
I've never understood why the wealthy can file for bankruptcy without risk of losing their mansions. I think that if you own enough assests to pay back your bill, then you shouldn't be filing for bankruptcy. you should be selling your shit to pay your bills.
Lenders are out to screw you, but that's nothing new. Most people are out to screw lenders if they can so whats the difference? The difference is that a lender can't tell so sob story about how they are weak and need to protected because they are funking infantalized like people can.
I took a chance when I took out student loans. I minimized my risks by attending a community college at a much lower cost first, pursued a degree in a field that is not overpopulated and will give me skills useful outside of my chosen field, and then pursued a graduate degree with a professor that was offering a stipend instead of the one that thought he "Might" be able to find funding next year despite having more interest in the research of broke professor.
I've minimized my expenses while in college by having roommates, constantly looking for cheaper rent, carpooling to work when I lived too far from the bus, and taking the bus when I could. I fail to see why anyone who failed to do as much deserves to get out of paying the bill for their education. Student loans can be payed back over DECADES if the former student so chooses, with lower monthly payments in that situation. There is nothing to stop the student from making higher payments after eventually getting a better paying job and paying off the debt early and saving themselves some money in the long run.
If you try and make it so that students can welch on their loans, people will stop extending loans to students. Either that, or the federal government will have to eat that loss as most student loans are guaranteed by the Fed. Then it goes from the Rich Fat Cats getting screwed to EVERYBODY THAT PAYS TAXES getting screwed by someone that was unable to find a job right away.
Bureaucracy expands to meet the needs of the expanding bureaucracy.-Oscar Wilde
Your average college administrator has burned out on teaching and burned out on research, so they went into administration seeking something different, and as a side benefit get double the salary they had before!
As someone who has lived his whole life in the USA, I can't say that I've "experienced" health-care in other parts of the world before. But thanks to the Internet, I've at least learned *some* about the differences.
I definitely don't claim the USA has the "best health-care in the world", but I do think it's a hugely complex issue that people tend to over-simplify based on their personal experiences.
Among other things, I've been told that the USA earns some "points" in having superior health-care to most of the rest of the world by way of a superior ambulance service. I think it was someone from either England or Germany, I recently saw complaining about the fact that with their govt. run health-care system, the ambulances were only outfitted with a minimum of devices on-board. With most ambulance services in the USA being privately owned and operated, they're not subject to government telling them what can and can't be put on-board, so they tend to compete for being the "best equipped". Therefore, patients here have a much better shot at making it to a hospital without the trip making their condition worse, or even dying before they get there.
There's also the issue of our nation's political "philosophy" on things. All else aside, it runs counter to our founding principles to claim that American citizens have a fundamental "right" to free health-care, because that in-turn, means we've just legislated our doctors and medical staff into "slavery", by stating they MUST provide medical treatment to all who require it (with no corresponding fundamental right to their compensation for said work).
I think there are plenty of steps that can be taken to improve our health-care situation without an all-out move to socialized medicine. A big one nobody really wants to touch is malpractice suits. Perhaps we need to be more proactive about stripping doctors of their license to practice in any of the 50 states as soon as they "screw up" even once, and at the same time, ditch the idea of awarding huge financial settlements all the time? All that does is cost everyone more per visit, as doctors charge enough to cover their costly malpractice insurance, from insurers who HAVE to charge those rates to cover the high settlements that keep getting awarded!
Dude- you got $85K with ZERO collateral. The rate is NOT unreasonable. It is the best investment you can make for your future.
Whereas the bank issued a loan guaranteed by the government, with the ability to garnish wages to recover it, that cannot be removed via bankrupcy.
Just because it looks fair from the student's end doesn't mean it is actually fair, or the slightest bit reasonable.
If banks want to issue student loans to people at 8% randomly, they should feel free to do so, without any government involvement.
But they should not be able to do it as part of a government program that guarantees they'll get paid back, so they have no risk at all.
You know, this is a major problem in this country. The government decides to operate a government program, but it would be much too easy to, you know, actually let the government do that.
Private industry has to be included somehow, and at some point they start making huge profits, and everyone says 'Well, that's just the free market at work'.
No, it's not. If banks want to participate in a government program, they can damn well have rules limiting their profit from that program, and how they're allowed to interact with people, and all sorts of shit, or they can stay the hell away from from the government program designed to get people loans, and just give people loans themselves. Nothing stopping them.
Of course, in this case, direct student loans have recently skyrocketed to also match the cost of other loans. I have no idea what's going on there. Both programs are supposed to 'borrow money on the open market', which should be, for a government banked (aka, non-defaultable) loan should just be slightly above the Fed, which is absurdly idiotically low at this point. (Actually, I would suspect that any loans would end up being slightly higher than the inflation rate, instead. But still.)
If corporations are people, aren't stockholders guilty of slavery?
A college degree is not the only type of education available. Trade skills are still quite useful and needed. Learning general mechanics, plumbing, electrical, and other skilled trades are a valid form of education. In many cases jobs needing these skills pay as well as those requiring a college degree.
What is lacking in the US is a good apprenticeship system. I have spent years learning about my profession without much access to people with more experience.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
"You can always become a teacher in the inner city or work 2 years for Peace Corps or any of the other methods the government has setup for most or all of your loan to be FORGIVEN."
Screw that, I can't count on fire support in the inner city.
Do one enlistment and get a full four-year college ride with ~1K/month (BAH rate varies by locale) stipend. Sure, military life sometimes involves stress and sacrifice, but after retiring and re-visiting how fucked up civilian organizations can be I'm glad I stayed in the Air Force. Now I'm debt-free at 50. :)
"This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
Unaffordable student loan. Unaffordable mortgage. There's no difference. There are kids that work and save money as much as possible before college, and work their tails off while in college. Where's their reward for responsible planning and being frugal? It's a simple concept: If you can't afford it, don't buy it. Those that take the high risk route or don't plan effectively should not be bailed out when things come crashing down. Call me a hardass, but I'm having a difficult time getting a tear in my eye to form.
If you want to stimulate the economy, what would be more optimal? To give cash to a corporation that has shown it is not capable of producing wealth, or to forgive a large percentage of all student debt?
I suspect that, in terms of economics, the second option is the winner.
I think most people accept the idea of getting an undergraduate degree. For me as a person who can 'hire', I don't look at a degree as any sign of information, or intelligence -- I look at it as a sign of dedication and an ability to stick with something and finish it. As I often tell people, what you learned in college is already 4 years out of date. Granted, I hire for technical positions so it doesn't apply universally.
Postgrad degrees honestly, have a diminishing return. PHD students are diminishing, and gladly for the VERY smart and outlandish people (my brother is one) they get full rides to school because they spent so much time 'preparing' for grad school. Other people don't. So the 'next generation' of scholars is going to thin out, while people like my brother will be able to command a great salary because he's in an ever shrinking field of academia. The problem multiplies, as fewer scholars = fewer teachers = more demand = higher university rates for those who CAN teach.
To boot, we don't generally VALUE those PHDs or advanced degrees. Why bother with a PHD, or MD, when you can make more money in less time getting a finance degree, and playing with other people's money, walking away with big bonuses and not worrying about long term affects because your reimbursement is right now. The emphasis we as a society put on the 'finance' field is greatly alluring, even in a down economy because you have people making millions by moving numbers around in Excel (I worked Wall Street on a hedge fund as a BA, I did the manipulations). Personally, I'd love to see more doctors (especially as our healthcare needs increase), more teachers, etc -- but our society doesn't seem to value those people and thus, we are left with the biggest part of our economy pumped into "defense" and now bailouts for people that got rich already and screwed the economy up.
I don't know the answer, but I am sure the path we are on is wrong. That said, my student loans are about $70k right now, but they are privatized and pegged to the prime rate, which for the last few years has been far better than what the government is offering. And for those who think you can write off interest -- it's only to a certain point. You can't write it ALL off if you paid $8000+ (like I have for many years) in interest only payments.
The price is always right if someone else is paying.
As someone who actually works in higher education, i'd like to point out how little sense this article makes.
first off, your interest rate on about half of your loans should be subsidized stafford loans at a rate of 5-6.5% (depending on when you signed up for them), which you don't have to pay a dime of interest on. second, why the hell didn't you consolidate *after* you took out all of the loans? i'm sick of people whining about not being able to consolidate a second time. i'm sorry you got suckered into thinking that two month payment break would help you in the long run instead of waiting until all of your loans have been disbursed and THEN consolidating everything.
if you are out of a job and struggling, there are a number of programs (income based repayment, as the prime example) that will adjust your monthly payments to a certain percentage of your adjusted gross income. Payments on this plan range from $0 to 15% of your AGI - 150% of the federal poverty line. wait...that means...yeah, if you're unemployed you dont have to pay anything.
makes me feel a bit bad that your [insert expensive "good" school here] degree holds about as much influence as my [insert state school i attended with full scholarship] degree. wait, no it doesnt. you picked the school. you signed up for stupid amounts of loans, attended for 5 years living in the dorms, and didnt work worth a damn to even TRY to pay off a portion of your loan while you were in school.
maybe you shouldnt go to grad school if you dont have an job/income? no? make sense?
on a final note, my car has an interest rate that i signed up for too. and my house. and my credit card. i'm an idiot and want the gov't to pay for all of that because well...you know...they bailed out GM so they should bail out me too. i'm poor. wah. woe is me. i dont want to pay for the things i signed up for. wah.
Mortages are backed by tangible collateral. Students loans are not. So OF COURSE the interest rates on student loans are higher! In free market, they would essential be priced the same as credit card debt. Would it be in the best interests of our society to subsidize student loans? Yes it would, but that doesn't mean that you as a student are entitled to anything. Most state universities are already heavily subsidized, so if you didn't want to run up $84,000 in student loans, perhaps you shouldn't have gone to a private university. Finally, hey, it's your own fault you didn't choose wealthier parents! (My coworker from India tells me that nobody owes student loans there; the schools are cheaper, and financing their children's education is the top priority of parents.)
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Only for direct loans that the government or institution owns. The government can't forgive a loan owned by someone else, they have to pay it off, which doesn't happen. You borrow $100k from the government in 5 different loans, then come to me and consolidate them into one loan through me. I pay off the government. The government can't come tell me that I'm SOL. They can't forgive the loan as it isn't theirs to forgive.
Finally ... PAY YOUR GOD DAMN BILLS. I have to. I paid mine. Why the fuck do you get a free ride because you fucked yourself over. Why do I now have to pay YOUR bill because YOU won't.
I didn't make the retarded decisions that got you where you are, why am I being punished for it?
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
Here is idea, stop bitching. You were lucky (or unlucky) enough to get a loan. Now pay it back like the rest of us. I took an extra year to get my degree and worked so I didn't have 80K in loans when I graduated. It is exactly this type of entitlement thinking that has ruined this country. You aren't entitled to a 80K education just because you want one. Go earn it instead of stealing, errr borrowing, money from the gov't.
... for example higher education is basically free. But, universities are not a piece of cake, and it requires a huge investment of time and effort to even pass the exams with the bare minimum grades.
The statistics at my engineering school, (up to 10 years ago because now apparently the system is changing a little to make it more similar to other European degrees), said that only 11% managed to finally get a degree and the rest simply gave up.
So you see selecting motivated people does not imply that you have to place an arbitrary financial barrier, which basically selects richer people rather than smarter (or, better said, hardworking) ones.
We learn from history that we learn nothing from history - Tom Veneziano
If college education was an open market, they'd run out of students who could afford to pay.
I cringe whn I hear of some new government program or subsidy. Because it will be throwing more fuel on the price fire.
I agree, and even more so what about those of us who were responsible and have zero debt? We _need_ to get compensated for that. I believe we should get a significant tax rebate, how about 5% of our gross income for the year.
What exactly is unfair?
I didn't go to school because it wasn't worth the cost to me. I didn't have a lot of money and neither did my parents but the government thought we had enough that I didn't qualify for any taxpayer aid.
Instead I taught myself and worked my butt off to get a contractor job paying just under six figures/year. I'm not a formally trained expert but I am an expert and I do my job well.
You signed up for the damn loans because the cost was worth it to you. Grow a pair and handle it. If your credit wasn't worthy to get lower rates, sorry about that but it was ultimately your signature that authorized those rates.
Even during the summer hours, the retail store I worked at would not grant me full time. Most jobs like that hire on part time because that means they can do whatever they like with your hours.
So, even when I was available 100% of the time, I tended to get 15 hours in a week. Because of where I lived, I was not legally allowed to work until I was 16; and I graduated when I was 17. So, I got 1 year of mediocre.
If Billy works in a place that will hire him younger, and if Billy stays the full 4 years in high school, Billy will do alright.
But remember, since we are looking at Billy as a kid that is not getting any help from his parents (why else would he be taking out a full 80k loan if only because his parents were entirely unwilling to support him in any way besides housing and food), he probably doesn't get all those shiny cool toys.
Buuuut if we assume that Billy is a happy boy in a well put family that lives in a place where minors under the age of 16 can work and is diligent, but not so much so that he graduates early, and his well put family is not quite so well put as to even offer a smidgeon of help to him, yeah, he'd do alright.
And by alright, I mean instead of an 80k loan, he'd be taking out a $67,760 loan. Sure, he shaved off 1/8 of his loan cost by having a bunch of bluetooth wielding businessmen shout down at him because he's a trashy wal-co employee, but he's still got a rather nasty loan leftover.
Another addendum: they can give you a nice raise, but only if they want to. They spoke volumes about how great of an employee I was, but my first (and only, given the timeframe) raise was a 6 cent one.
But we're talking two different Billys. Your Billy lives in a good part of the country. My Billy is living in Detroit, lucky Billy. Your Billy whistles while he works and can't wait for college. My Billy is just trying to find a job.
Point I'm making is that depending on where Billy is born, he may very well have no choice in the matter.
Yeah, this happened because of an unfortunate overlap between the interests of the banking industry and the "free market uber alles" crowd - we got roped into a system where the federal government basically bribed private lenders to give student loans, and then the private lenders just kept all that subsidy money and didn't even make the loans cheaper. It's worth mentioning that there's a bill in Congress to cut out the middleman by just having the gov't lend directly to students. It's a money saver for taxpayers, and should also result in cheaper loans to students. But the banking industry is fighting tooth and nail to stop it.
"We need to get away from this pervasive mentality of "Things didn't go exactly according to the PLAN. The Government needs to save me!!!! WAAAAAAAA"."
Funny a lot of the present economic problems that borrowers are under were directly or indirectly brought about because of the government. And even when it wasn't (9/11) or a failed health-care system were anyone can become bankrupt. The present problem still remains were there's a predatory system (kind of like the credit card system) that gains more from people defaulting than working with borrowers who desire to pay (the part you missed in your blame game because you didn't read the story links provided).
Also why is education three times the cost of inflation were any other goods and service in a depressed economy is adjusting downward? Me thinks borrowers aren't the only one's not dealing with reality.
Angry? You just got a "free" education, dummy. Sure, you have to pay the money back, but you didn't have to work and go to school intermittently for 10+ years hoping that you can finish your first degree before your credits are too old to apply. Your 401k/403b/457b/whatever will also have a 5-6 year head start, which will be amazing.
If there is a bright side it is that you didn't wind up a snide douchebag who can't understand that having a mountain of debt may prevent one from shoveling money into savings schemes, among other fairly obvious logical flaws in the above post.
You can't very well collect your debt if the person you're trying to collect from lives in South America or China. If you have a desirable trade, consider spending some time learning the trade in this country while working and go on vacation to places you find interesting. If you do move, you will be well received.
It's disgusting the amount that is charged for higher education in this country; seriously, the same algebra course at one end of the country costs 10 times at the other end and isn't necessarily any better, why is this? It's disgusting banks make unsecured loans with depositors money, playing fast and loose with something that isn't theirs to students then charge outrageous interest without realizing you're enslaving someone for 10-20 years. It's disgusting schools offer curriculum in things that don't have any pertinence to reality; History, Engineering, Fashion Design, these things have uses. To Politicians, Diplomats, Lawyers and linguists history is an important thing to know; engineering is just as important when you're making clothing as when you're building a bridge. Ethnic Studies, Women's studies (strange how there's no mens studies), Management courses, Art, these are all largely pointless and there should be no "degree" in art; there are no jobs in art. They should be hobby classes.
Education is done through the certification method; grades k-12 plus dumb tests and other junk; the teachers suck at it too. Education in this country does not teach how to be curious, to ask the right questions, and to find answers. Instead if discourages kids from doing this by making them think this is boring.
Billy may very well have no choice in the matter of actually going to college. Life isn't fair, and it is not the government's job to make life fair. Oh, and my local state university's 4 year cost is about $40K, not $80K. And, I know lots of working students.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
> student loans have very limited tax detectability.
Did you mean deductability?
But, you know, wouldn't to do something as insane as take out too big of a loan. That's just crazy talk.
Life's as fair as you make it. Take a risk, take a gamble, reach for the stars. Or give up, lie down, and let everybody kick you. Choice is yours, but I suppose when your world revolves around money the only choice is to give up and be head fry-cook; now paying $12 an hour!
So you're one of those guys I used to see who would come in with a resume that had their shiny college experience on it and little or no work experience. I tended to avoid hiring those guys because they felt that their shiny GPA entitled them to a lot more money than they were actually worth and because GPA doesn't say as much about how well you'll work out at a job as prior work experience does.
cheap labor conservatives - they want to keep you hungry enough to be thankful for minimum wage.
Scholarships
Employment
Government Programs including Military Service.
Saving programs.
Of the five mentioned, one has lottery-chances probability of paying for a decent school! That would be a full-ride scholarship.
I have no clue what is available through military service, so I'll give you the benefit of the doubt.
The rest don't work for a tier-1 or 2 school in this day and age.
-Savings require the ability to save much more and much faster than the rate of education inflation. It would require my ordinary wages to rise substantially. That's not happening in this economy.
-mythic 'government programs?' This is sheer ignorance on your part.
-Employment? Those part-time Blockbuster wages gonna pay for a tier 1/2 school? Not so much. A tier-1 or 2 school is set up for students who *don't work!*
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
I did not not take advantage of tens of thousands of scholarship/grant opportunities available to me, I did not work during school, my parents weren't financially savvy enough to underwrite my degree, so I took out tens of thousands in loans and now I am being asked to pay them back?!
Just because deadbeat homeowners, banking/car companies were given bailouts, doesn't make it right for you to expect others to pay for your obligations. You are a rational human being who made the conscious decision to take loans out at a certain interest percentage. There are programs to help students who can prove they are looking for a job or have a full-time job that isn't paying as much as anticipated in order to help students pay their bills. The fact of the matter is, no one put a gun to your head and forced you to take student loans, and anyone who tells you that any student had to take loans is ignorant of the other options. If you have no plan to pay for your privileged, your privileged, foray into higher education, then you are just as bad a the home owner making 20,000 a year living in a 250,000 dollar house with an adjustable rate mortgage. Just how you can make as many excuses for not having to satisfy your financial obligations, I can point out the numerous amount of options you had to avoid this situation, and still have to take care of your debts.
Demanding a handout isn't what's fair; it's what's easy. But some people have shame, and some don't.
Some one has to pay for all this other crap coming down the pipe like Cap and Tax and heath-care and because everyone deserves to live for free and the Government will take care of you. HA HA!!! Socialism Rocks! Thanks all of you student loaners for paying for me to get frees cares and stuffs. Isn't this administration great? I don't needs to gets a degree because you will and I'll gets what you earn. That's fair. That's what wees voted fors.
"Be wary of the man who urges an action in which he himself incurs no risk."
~Joaquin Setanti
I hate to go that route, but I mean didn't you know the interest rate when you took the loans?
No, I'm actually one of those guys who works in a field where GPA is nearly the sole determining factor in making interview invitations. There is furthermore no "relevant work experience" to be had in my field as an undergrad.
I appreciated your uninformed accusations, though. It's useful to be reminded that people in other fields also aren't always nice to strangers and love jumping to conclusions.
Yeah, where is your free money. How dare they expect you to pay back the money your borrowed. I'm sorry to hear your having a problem finding a job in the current market but cry me a river, you received the money didn't you? It was interest deferred until graduation, was it not? I am so sick of this ME TOO, ME TOO - crap. The reason why the job market is so screwed up right now is because of all this
Federal shenanigans with federal home loan market. Let's not look to Washington to fix our problems because they are the ones that caused them to begin with.
Think health care is expensive now? Wait until it's free. Imagine how the student doctors feel about their prospects of paying back their college loans when the government starts setting even more what they earn.
To be a little more sympathetic - this might be useful info for you - "You can postpone repayment of your loans under a variety of conditions. This is called a deferment. While you’re in school, for example, you may qualify for an in-school deferment. When you’re in a tough financial spot you can often temporarily stop paying back your loans without any penalty or damage to your credit." - Source http://banking.about.com/od/loans/a/studentloans.htm
Do you qualify for to temporarily stop paying without penalty or damage to credit?
The student doesn't even have a deflated house as collateral--just a worthless degree. Why should he or she get a better interest rate or one equivalent to a home loan when they only have their own questionable decision to take out massive loans as a testimony to their ability to repay? They are quivalent to the pre-bust 'stated loans' where you don't have to prove your income.
I have to tell you, my daughter is in the business of obtaining grants and scholarships (not loans) for seniors in high school. She averages obtaining $300K per student in stuff they don't have to pay back. Of course, this is usually for multiple schools, only one of which they will attend, but this idea that you 'can't get' scholarships is simply not true, as she has repeatedly proven. If you do your part as a student, there is no reason why you can't get a free ride at the school of your choice if you just plan ahead and do the work necessary to pull down these scholarships and grants. Loans are a last resort for those unable or unwilling to get the grants, and if that's the case, no wonder the percentage is higher. You are a higher risk.
How about a moderation of -1 pedantic.
I am not interested in benefit to America, I am interested in benefit to my own wallet. ...and the real reason finally comes out. You haven't watched Sicko, have you? The main point of the movie wasn't the uninsured, but the people who do have good insurance. Or even more appropriately, people who think they have good insurance.
So lets say you are John Galt, a hardworking elitist who pulled himself up by his own bootstraps. You put yourself through an elite school in your field with a combination of student loans and scholarships, and now make $300,000 a year at Elitist Investment Firm. Until you get cancer or have a catastrophic accident, that is. Then you quickly find out that your supposedly great insurance policy is quick to deny treatments and you quickly hit coverage caps.
Stop cutting off your nose to spite your face.
In fact every American can afford a decent education.
On what planet is this America that you speak of? One where the cost of tuition doubles every decade or and jobs haven't been shipped overseas?
I have never hit a woman, but I will punch her in the face if I ever saw her. She is probably one of the people who defaulted. We helped big business when they are the cause of the economy going down the drain. Yet we neglect the future of the nation in helping them. It is hilariously biased against the youth. In all purposes it is agism at its best. All of the congressman went to college on interest rates of less than half of what I am paying, yet they have the balls to raise our interest rates while they are giving billions to car companies who are in trouble by their own doing. The students are in debt do to the fact that college costs are going up at an audacious rate. I am graduating from Penn State this year, when I started going here I was paying $16,000 in four years it has gone up to $22,000. That is $6,000 dollars in 4 years, which is outrageous.
Just because you are wrong and I called you out on it doesn't mean I am a Troll.
Mortgages and car loans are secured loans, where the property or car that is bought with them is pledged as collateral. This makes a big difference for the interest rates. Student loans just ain't so.
Except that student loans ARE backed, by the government. And you're also ignoring the fact that student loan debt can't be wiped out by filing for bankruptcy, as mortgages and car loans can.
I find this ridiculous. I'm 20, and have a credit score of 750. I can't get a loan for less than 7.5%??? Very stupid.
That is what is known as a false dilemma. How about if Billy joins the military and gets training and the G.I. Bill? Or, maybe Billy apprentices at a trade. Or, maybe Billy goes to community college. Or, Billy does any number of other things.
Billy can become a journeyman electrician in five years or less.
Billy can become an auto mechanic.
Billy can do many things and earn good money without taking out a huge loan.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Unless you were top of your class, no one cares about your GPA at an interview.
I'm in my 3rd degree (Medicine), the Australian system works with government sponsored places (for most students) as well as "full fee paying" places.
As a medical student, which is about the most expensive degree you can study, I accrue about $3500 of debt per semester. This amount is the "contribution" I have to make to my tuition costs. Each year, it's probably about ~$8000-9000 when you include some books and equipment, if I was to pay it all up-front.
By comparison, an international student prices are currently $41,000 per annum. All values in $AUD and don't include living expenses.
To highlight some of the above comments about "price matching what the market will tolerate", there has been uproar down here over the past few years about the increases in the proportion of "Full Fee Paying" places.
In the past over 90% of student places were government sponsored in almost any degree, you had to pay a contribution that was accued as debt. This has since swung closer to the centre, there is money to be had and the institutions want it. There has been a remarkable increase in international student numbers, decrease in places for locals... essentially it's all following the money.
As quirky side note.. WA had it's first private univerisity open about 10 years ago.. an ex-girlfriend went there for a while.
While she was there, she didn't get a government sponsored place.. yet their fees were only a little higher than at any of the public uni's (maybe $12,000 per year?). I'm not sure if they had government backing but not the loan system... but it's interesting none the less. Some of the private university's in Australia are EXTORTIONATE (up to $50k per semester), but others have shown that the bottom line cost can be fair.
Regardless, it astounds me how much money each student brings in.. multiplied the number of bums in seats in the average lecture, divided by the number of staff (my sister is an full-time academic, I earn more in my part-time job).. even counting the number of new buildings, programs and research.. there is a LOT of money making it's way into the tertiary system.
Lecutre: A stadium of stuffed wallets, all staring at one dude who is talking for a minimum wage.
Get on the bus and sit down, now shut up! You voted for change and now you're complaining? When the market was open to non-govt lenders, you got competitive rates.... if you are a credit risk, your rate was higher... if you are a lower risk, your rate was lower.....
Now that the US Govt controls the market, everyone pays for the crappy-risky borrowers....
Thank your democratic representative and senator for shutting out private industry and moving student loans to the US Dept of Education...all in the name of eliminating "profit" from private industry and putting the "profit" back where it belongs....in the hands of congress.
Ha ha ha.... you get what you want when you vote democrat.... I thought college students went to school to learn something, not get indoctrinated.
except that government backed student loans can only get you through about 1 semester of college at best (unless you're fortunate enough to live at home). The rest requires private student loans if you're not lucky enough to get grants, scholarships, etc. Private student loans accrue interest while in deferment so no matter what the rate is you're likely to owe a very large sum of money. Personally, after 8 years I'm only now reaching the original balances on my loans. I wouldn't call that cheap.
The idea that it is zero collateral is bogus. Yes there is risk, but less than giving 85k to someone who wasn't trying to better themselves. The loan is a bet on your potential future earnings and success as a college student. College graduates earn nearly double a highschool graduate. Even only partially completing college increases potential wages by over $6000 annually.
Even if you don't graduate you're still going to have to find a job and pay the loans. You can't get rid of the loans even in bankruptcy. If for some reason you can't pay, they'll just garnish what they can so it is not a total loss of money.
Don't act like the loan interest is some form of charity to give rates "so low", its not. The companies giving the loans are making calculated risks and making big profits on it. If they weren't they'd be jacking the rates even higher, restricting who could get loans, or both.
Billy doesn't have the choice between (a) saving up or (b) financing the whole dang thing with loans.
Most of us will (c) take out loans to pay for part of college, and cover the rest by working before and throughout college, including summer internships; by choosing an affordable school, rather than one that costs over 20K/year; by making choices like not living in a dorm for all four years; and by not paying for graduate school out of your own pocket (it is rarely economical to do so.) I did these things, and ultimately got as far as a Ph.D. with a total loan burden on the order of 20K.
As I said, it seems like a cultural problem: people don't seem to understand that they can and must do these things if they are broke. Instead they think their only choice is a massive loan sufficient to finance an entire four-year degree.
You guys are so ignorant.
I love it. Keep it up.
The trades can't make any money! We're all doomed! White collar forever!
It's been a long time.
> Yes, joining the military pays more than minimum wage, but you have to be physically fit and willing to go overseas and get blown up. Most jobs that don't require a degree or prior experience but pay well either get you killed or require some form of special skill. Very few kids wake up and say "I want to be a plumber!" Nor are these jobs particularly easy to find nowadays, what with the massive unemployment of adults looking to make money.
I agree that jobs that pay above minimum wage have requirements, but there's a pretty big break (and a lot of job opportunities) between minimum wage and being a skilled craftsman. As I said, it took me six months to move from minimum wage to noticeably higher than that. Jobs can be tough to find, but that doesn't equate in any realistic way to "work minimum wage for a decade or borrow eighty grand".
> Your post points to the military a lot. The military is not for everyone.
I picked military service because it was a reasonable example of a job that doesn't require a degree and pays better than minimum. I could go through a raft of other possibilities if you like. Get a minimum wage job at a place that allows advancement, and then advance. Get a low end job that offers OTJ training, and learn your way up. Heck, one of my friends flipped burgers during the day and then worked after hours three days a week with an auto mechanic to learn to do it. After less than a year he knew enough to certify and sign on with a shop. Nine years after that he owns his own shop. He's certainly not making minimum wage. It's not easy, but the opportunities are out there.
> Would little Billy be safer simply taking out the damn loan? Definitely. It seems a bit extreme when possible death or physical injury is less of a hazard than having debt.
The vast majority of people who join the military survive their enlistments without major injury, so your example is indeed a bit extreme. Sure, there's extra risk, but that's true of a lot of jobs, with or without degrees. There's a reason why demolitions experts get paid so much.
> Just like not every high school student is going to be the next Einstein, not every high school student is going to be a soldier. We're all good at certain things, and we really need to stop trying to make everybody okay at everything.
This is way outside the scope of the discussion, but I'll address it insofar as I only suggested military service as one possibility. There are other ways to avoid the "work minimum wage for a decade or borrow eighty grand" dichotomy.
Virg
All the dumb fucks saying shit like "Man up" and "It's time to pay the piper" or whatever other stupid fucking quote are ignorant assholes. Yes, we know we signed the papers and borrowed the money. Yes, we want to pay it all back, BUT we want to be treated fairly.
Tell me this: Why does a student who chose a variable interest rate, get to "lock-in" later when the rate is 3%, but I'm stuck with 8%? That is total bullshit. The variable rate is the riskier choice and they should have to pay the consequences. Rates go up? So does your variable rate. The government bent us all over and fucked us hard in the ass with no lube when they allowed the people who chose variable to lock in at 3%.
What if we allowed all of those people who took ARMs on their house to suddenly lock in at 3%, so they don't lose their house, while the rest of the responsible home owners get stuck at whatever rate they originally received? Same thing. Total bullshit.