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30% of America's Student Loan Borrowers Can't Keep Up After Six Years (cnbc.com)
The IRS recently ruled that under some circumstances employers can link their 401(k) matching contributions to the amount of an employee's student loan repayments -- making it easier for recent graduates to take advantage of this employer benefit. But that's one spot of good news in a sea of bad, according to one anonymous Slashdot reader:
Two new articles criticize America's student loan policies (under both the Obama and Trump administrations). CNBC cites reports that within six years, more than 15% of student borrowers had officially defaulted, while 10% more had stopped making payments and another 4.8% were at least 90 days late. And for-profit colleges fared even worse, where nearly 25% of graduates defaulted, and a total of 44% faced "some form of loan distress."
These trends were masked by Department of Education reports which stopped tracking repayment rates after just three years (reporting defaults rates of just 10%), according to Ben Miller, senior director for post-secondary education at the left-leaning Center for American Progress. "Official statistics present a relatively rosy picture of student debt. But looking at outcomes over more time and in greater detail shows that hundreds of thousands more borrowers from each cohort face troubles repaying."
These trends were masked by Department of Education reports which stopped tracking repayment rates after just three years (reporting defaults rates of just 10%), according to Ben Miller, senior director for post-secondary education at the left-leaning Center for American Progress. "Official statistics present a relatively rosy picture of student debt. But looking at outcomes over more time and in greater detail shows that hundreds of thousands more borrowers from each cohort face troubles repaying."
Come on everyone - let's all chip in to cut education funding so a billionaires can get tax cuts they don't need!
Stupid decisions should be painful, so as to teach people not to do them anymore.
This implies that attending college is a stupid decision. However, there is significant evidence to the contrary.
Honestly, someone should hit you upside the head for submitting that post because stupid decisions should be painful.
Anons need not reply. Questions end with a question mark.
No one is talking about loan forgiveness. What the article is about the mess they and society are in.
Here are the facts:
1. If you have a HS diploma you will live with your parents until 40 and have a life of poverty. HR won't give you the chance to build your resume outside of your grocery store or McDonalds. It kind of forces you to go to a trade school or a university of you want a non horrible sucky life. Don't bother talking about your friend Jon or yourself if you developed computer skills in the late 1990s. That was abnormal and still a very minority statistic.
2. Cost of living is VERY VERY HIGH. You can't attack the kids for not planning when your first jobs pay $35,000 a year with no experience. How the fuck can you pay rent of $1500 a month with that kind of salary? Let alone pay off the loan and a car payment?
3. Asshole College Admins jerked up the prices. Free money Wahoo! What do you do? You jack up prices to the max. Now you Mr. Smarty Pants who doesn't want to pay $30,000 a semester has to compete with Mike Ditwiit who didn't do the math. If you don't pay he will!
4. Federal Government guaranteeing the loans. Hey if you can't loose either way why not keep screwing people over and raising prices?
5. State Governments no longer funding Universities. This is a HUGE one. During the recession of the early 2000s states no longer subsidize the universities due to the free money from the federal student loan program.
So you can blame the kids for being stupid but if you are older which I assume you are, then you have no right to speak as you never had to pay these outrageous prices the youngers folks pay today. In the 1970s you could work at McDonalds and pay your Harvard Degree no problem. This is not true today.
It is a mess in America and it needs fixing FAST. Solution would be caps on the Federal Student Loan Program and maybe an ability to pay calculation put in. If the degree doesn't have the odds statistically of being able to be paid then the government funds less. This will force states to pay back into the University program and lower costs for students. Also the Federal Government could finance trade schools and community colleges differently. Not everyone is meant for University and less than 1/3 people have degrees. Plumbing for example is much cheaper to learn and pays good if you have plenty of experience. Maybe tax breaks for apprentice programs with plumbers, air craft techs, electricians, etc?
Also Maybe a discount tax for those who completed these programs for 5 years so they can keep more of what they earn as well as $40,000 is shit pay and even programmers starting out make $50,000 only if you don't have years of experience to back you up.
http://saveie6.com/
I don't know how this carousel stops,
Speaking as someone who teaches at the university level, there is an amazing amount of wasteful spending. This is made possible by, in fact caused by, the schools being flush with money (in the form of federal student grants and loans). The solution is to let the air out of the balloon by reducing the amount of money available. Of course, as you point out ....
but it's going to violent and messy when it does.
Yes, it certainly will be. Cutting off the flow of money will prevent some students going to college and it will hurt the schools as they will have to decide what is important and what can be cut. However, there does not appear another viable path to restore the balance. The effect will be similar to a significant market disruption: painful for the established players and rewarding to those who can adapt.