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U.S. Students/Grads Carrying Over $1 Trillion In Debt
An anonymous reader writes "Time reports that American students and grads were carrying $1.08 trillion in student loan debt at the end of 2013. This compares to just $253 billion a decade earlier. Aggregate debt grew 10% in the past year alone. 'By comparison, overall debt grew just 43% in the last decade and 1.6% over the past year.' About 70% of students graduate with some amount of debt, and the average amount owed is $29,400. 'Delinquencies on student loans have risen dramatically over the past decade: 11.5 percent of graduates were at least 90 days late on paying back their loans at the end of 2013, compared with 6.2 percent delinquencies on student loans in 2003. Moreover, the Fed's figures on delinquencies hide more stark data: nearly half of all students with debt aren't currently in repayment thanks to deferments and forbearances and the fact that students are not expected to pay while they're in school.' An attached graph shows an alarming spike in delinquent loans that looks a bit like mortgage delinquencies did at the beginning of the sub-prime crisis."
Tell me again why college in the US costs sooooo much? It's not like you are getting a super special top notch education that is not comparable to top Canadian universities for example.
Tired of my customary (Score:1)
The problem is that anyone can get a loan, even people who definitely have no prospect of paying it back. With guarenteed loan money, schools can charge whatever they want and you'll just have to take out a bigger loan. And of course 18 year olds fresh out of high school don't understand the power of compound interest, they just know that they "have" to go to college to get a good job and they'll get a better job if they go to a fancy private school.
While you can't get a bachelors from our local community college, it only costs $2,500 a year in tuition and you're getting credits that can transfer to any state school. Why can a community college offer actual college classes for that little, but a 4 year school can charge $10,000, $20,000 or more for largely the same education? Its just insane.
Addition: during that time you are also allowed to get a free social security benefit of paying your rent.
No. It's not the borrowers who get bailouts -- it's the lenders.
But in 2005, Congress and the Bush Administration clamped down on bankruptcy filings, placing hurdles in the path of Americans trying to file and making it more difficult to discharge debts. In particular, the 2005 law made private student loan debt, like federal student loans, impossible to discharge in bankruptcy except under a difficult to meet hardship exemption. Today, bankruptcy allows for the discharge of credit card debt and auto loans but not student loan obligations. At the same time, the law permits judges to modify loans used for commercial real estate, vacation homes, and even yachts, but not a family’s primary residence. Two of the largest investments Americans make in order to enter the middle class – in their homes and their educations – are thus excluded from the relief offered to other debtors.
If Evil exists, this is it.
My theory: This "student loan bubble" is actually the bubble that caused the mortgage bubble. For the past 30 years, college loan professionals have been convincing 18 year olds that 5-digit debt is ok. We were "broken" (as in horse context) by the time we borrowed for our first car, our eyes glazed when buying our first house. We were trained to be numb by rationalizations worthy of drug pushers. The first thing a young person does at 18 is sabotage any hope of compound interest savings accounts, as every penny that would have been put away is spent on compounding interest in the wrong direction.
Ok, my college experience turned out ok. But I circumvented work-study and doubled my working hours (food service). If you DO borrow to go to college, it may turn out ok, but be sure to work in a few economics and accounting classes.
Gently reply
It can't be discharged by any bankruptcy proceedings. You are hooked for life once you take a loan in this form. We abolished debtors prisons sometime around 1800s, then indentured labor then fought a civil war to end slavery. Then created a debt that can survive even bankruptcy chaining the earnings of someone for life!
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The government has essentially taken over the academic loan business in order to make funds more readily available to a greater number of people seeking a college degree. The result of this easy money? Not only this debt crisis but also college tuition and fees inflated at four times the rate of cost-of-living inflation. Way to go government intervention!
But in 2005, Congress and the Bush Administration clamped down on bankruptcy filings, placing hurdles in the path of Americans trying to file and making it more difficult to discharge debts. In particular, the 2005 law made private student loan debt, like federal student loans, impossible to discharge in bankruptcy except under a difficult to meet hardship exemption.
The lead-in for this, which made it possible in the first place, was the 1999 Gramm–Leach–Bliley Act, signed by Bill Clinton, which is what allowed the merger that led to the legislation. This effectively turned credit card debt for students who shouldn't have been offered credit cards in the first place to be non-dischargable by bankruptcy (effectively turning uncollateralized loans into collateralized ones).
http://en.wikipedia.org/wiki/G...–Leach–Bliley_Act
Frankly, there's no difference between the parties; they both work for the banks.
Similar in Norway - university is basically free (except the 100 USD/year mandatory student union member ship), and you get a subsidised (i.e. no interest before you graduate, (much) lower-than-market interest rate after that) loan for up to ~7 years. This loan works so that when you pass your exams for that semester, ~half of the loan is turned into a stipend. Don't pass your exams and you have to pay it back.
On top of this, you have access to subsidised housing in "student villages" - these are apartments where you get your own room, and share a kitchen/bathroom with ~4-10 people - accomodation standards depend on how much you want to pay, but it is in general affordable within the budget of student loans. You can use the apartment year round, i.e. if you have a summer job in the city or you are a last-year masters student working at the university over the summer, no-one will kick you out. It's like a normal apartment, just cheaper, and everyone else in the same block are also students. There are also possible to get two-person apartments, i.e. for people who want to move in with their S.O. - with no strings attached about marriage etc.
And on top of that, you do of as a citizen get access to healthcare (hospitals are free to use, normal doctors appointments and medicine are cheap up to a certain limit after which is it free, the dentist you pay out of pocket but it's usually not that expensive and there are often student discounts available) and disability insurance.
I like our system :)
Very.
I have worked with CS degre'ed people and industrially educated people in I.T.
I have been trying to understand whyt here is such a huge difference between CS Degree;ed people, with BS/MS degrees and Industrially educated people.
I have come to the conclusion that:
1) Industry educated people love their work far more than CS degree'ed people. Daddy didn't pat for their education, they come to work everyday because they want to, not because they have loans to pay off.
2) Industry educated people are far more motivated than CS Degree'ed people. The reason why this fits my observations is the typical CS degree'ed person wants someone to teach them, which is why they went to school anyway. Industrially educated people see education more as their responsibility.
Carefully looking at resume's, I found industrially educated people who do nat have CS degree'es statistically have more independant/free lance work on their resumes. (i.e. They know how the technology works to the extent that, they do not need someone to hand them a check every 2 weeks. They really can develop solutions themselves and sell them.)
But, that may be due to the fact that some jobs require CS degrees and industrial educated people find that if they want to eat, they have to do it all themselves.
So they are much more resourceful and typically better business people.
3) Personally, looking at the education of a typical CS graduate, I am not convinced a university degree in the age of the internet is worth $120K.
My house for example, is worth $150k. I don't have a degree, but I own a house. I think it was a much better investment.
I still am employed in the I.T. world though, so in my opinion if you are doing hardware or software in the engineering department, or selling solutions, you can do a University program for 4 years, but you are at an EXTREME disadvantage compared to a person like me, that leverages a internet connection, does a few free lance jobs to get your career going.
Plus you typically get to stay at home rent free while you figure this stuff out.
By the time compare a 4 year tour through a university, you will most likely already have references, no debt and may even be employed.
However, Universities do have their place in education, but not at the $120K level for years anymore.
I could go back to school and would, but I would probably pay about $15K for a university degree for 4 years.
I don't think it is worth more than that, in my opinion as both a 25 year veteran working in the computer industry, and hiring and firing many of you out there with CS degrees.
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
1) Go to college because your parents tell you its the only way to succeed.
2) Bust your tail and do well in college.
3) Be unable to find any job coming out of college.
4) Be unable to work a minimum wage job because it won't even pay off interest on your loans.
5) Now what?
God spoke to me