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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
My Direct Loans are still around 3%. I wonder why he's paying 8.5%.
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!
Last time I checked, student loan interest is deductible... I don't know what more of a handout this guy needs.
YOU SIGNED THE PAPERWORK, YOU HAVE NO ONE ELSE TO BLAME, YOU COULD HAVE GONE TO A CHEAPER SCHOOL.
... 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!
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
You start from the false premise the education is meant to prepare you for a job. It's not. Academia rightfully doesn't give a sh** about weather it's preparing you to shuffle work around or not. That's not it's goal, and I don't think it should be. It's goal is for you to learn things, and perhaps eventually further the field for the few that choose to continue. Learning for learning's sake is their goal and an admirable one.