Student loans in the upcoming election
08-12-2015, 11:49 AM
#1
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Student loans in the upcoming election
With the upcoming elections there is a lot of interest, no pun intended, spent on student loan issues. Lately I've been hearing many arguments made toward the decrease of interests and the reduction of the cost of public education at the college level. In particular, I heard a graduate speaking about the high amount of his student loans, making a point toward how tuition is extremely expensive and the interest outrageous. Now, what bothers me is in the cases I've heard lately there is no remark as to what was the subject of study. This student in particular just goes ahead and says: I owe 250k in loans, the system is broken.
Now, I am of the opinion that the student loan situation is an individual responsibility. It seems strange to me that there is no mention as to what field was studied and I think is purposely left out due that it most likely was a bad decision to spend that amount of money in a field with no potential return and now someone needs to pay for it. What are your opinions?
Now, I am of the opinion that the student loan situation is an individual responsibility. It seems strange to me that there is no mention as to what field was studied and I think is purposely left out due that it most likely was a bad decision to spend that amount of money in a field with no potential return and now someone needs to pay for it. What are your opinions?
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08-12-2015, 11:58 AM
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I would suggest the speaker revise his speech to: I owe 250K in loans, I dont even have a job, I am a moron.
the ease of loans/subsisides makes colleges raise tuition, because they can. (think housing bubble)
tuition and fees at my college was around ~$5000 a year when I went to school, today it's over $13,000. That does not include room and board.
I took a graphic novel class for my literature credit.
the ease of loans/subsisides makes colleges raise tuition, because they can. (think housing bubble)
tuition and fees at my college was around ~$5000 a year when I went to school, today it's over $13,000. That does not include room and board.
I took a graphic novel class for my literature credit.
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08-12-2015, 12:34 PM
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$250k is way too much to pay for school, unless your definition of "school" includes one of the two following courses of study:
4 years of undergrad work consisting of biology, chemistry, anatomy and physiology, etc, followed by four years of graduate work culminating in an MD, followed by an Internship and Residency, followed by people calling you "Doctor."
or
4 years of undergrad work consisting of science, math and engineering, followed by three years of graduate work culminating in a JD in which you were in the top 10% of your class, followed by getting a job at a large corporate law firm in New York, Boston, Silicon Valley, etc.
or
4 years of undergrad work consisting of science, math and engineering, followed by three years of graduate work culminating in a JD in which you were in the top 10% of your class, followed by getting a job at a large corporate law firm in New York, Boston, Silicon Valley, etc.
Or, poor people shouldn't buy Mercedes. (Although they still do.)
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08-12-2015, 12:58 PM
#6
There are a lot of interrelated subjects that all feed into why the student loan issue is coming to a head right now.
My personal experience: Where I went to college, the tuition increased 250% just while I was attending, and MANY new buildings were constructed during that time. I paid $1100 per semester when I started, and tuition is over $5000 now. I've been out of school for 8 years now, and go back to that campus once a year (Flagstaff, AZ is a great city to visit. Wish I could've found a job there to continue living there) just to see how it's changed. The construction has continued to the point that there is almost no open space left on the university's "footprint", and many of the dorm buildings have been replaced by extravagant (by broke-*** 18 year old student standards) furnished apartments. Many of these new dorms are operated by an external contractor (big-money government contracts aren't just in the defense industry).
So, what's the problem with all of this?
Don't people want to go to the nicest school with the best facilities and technology available to them at all times? Absolutely. And the universities need to have those facilities to be competitive and attract the high-dollar out of state students (who pay triple the in-state rate). But how do the universities pay for all of this stuff, and how is it cost-effective for them? The ever-rising costs of tuition and dorms are paid for by the students. And it's easy for the university directors and board of regents to justify the increased costs (Just look at all the new buildings!). The problem is that the university isn't really "paying" for these buildings the same way a private business would. The university has a never-ending line of funding in the form of students who need a degree to get a job, and will take out loans to get it. The hoards of students are paying all of the interest on government money that's funneled straight into the university. When a public university views students as part of their business model for operations, as opposed to the benificiary of an education, all while still billing themselves as community of learning, there's a problem with the system.
I'm not advocating that a college education should be free at all. But this is exactly why Elizabeth Warren has been trying push through legislation to revise student loan interest rates such that the students pay the same interest rate as the banks do. As it currently stands, banks can borrow money from the federal goverment at a significantly lower interest rate than students do. Kids signing up for their loans at 18 have no idea what any of the terms mean or how it will impact their future financial standing. They're just coming out of high school with no clue about how to budget for anything other than lunch and gas, and the university/student loan finance system takes extreme advantage of that.
And all of these issues are multiplied in severity when you start looking at the for-profit entities like University of Phoenix. People end up $70k in debt for a bullshit tech degree from online courses. They're constantly reassured by the marketing department that all kinds of Fortune 500 companies have leaders with degrees from UoP, but most HR departments and hiring managers aren't going to view a resume with DeVry or University of Phoenix on it in high esteem.
My personal experience: Where I went to college, the tuition increased 250% just while I was attending, and MANY new buildings were constructed during that time. I paid $1100 per semester when I started, and tuition is over $5000 now. I've been out of school for 8 years now, and go back to that campus once a year (Flagstaff, AZ is a great city to visit. Wish I could've found a job there to continue living there) just to see how it's changed. The construction has continued to the point that there is almost no open space left on the university's "footprint", and many of the dorm buildings have been replaced by extravagant (by broke-*** 18 year old student standards) furnished apartments. Many of these new dorms are operated by an external contractor (big-money government contracts aren't just in the defense industry).
So, what's the problem with all of this?
Don't people want to go to the nicest school with the best facilities and technology available to them at all times? Absolutely. And the universities need to have those facilities to be competitive and attract the high-dollar out of state students (who pay triple the in-state rate). But how do the universities pay for all of this stuff, and how is it cost-effective for them? The ever-rising costs of tuition and dorms are paid for by the students. And it's easy for the university directors and board of regents to justify the increased costs (Just look at all the new buildings!). The problem is that the university isn't really "paying" for these buildings the same way a private business would. The university has a never-ending line of funding in the form of students who need a degree to get a job, and will take out loans to get it. The hoards of students are paying all of the interest on government money that's funneled straight into the university. When a public university views students as part of their business model for operations, as opposed to the benificiary of an education, all while still billing themselves as community of learning, there's a problem with the system.
I'm not advocating that a college education should be free at all. But this is exactly why Elizabeth Warren has been trying push through legislation to revise student loan interest rates such that the students pay the same interest rate as the banks do. As it currently stands, banks can borrow money from the federal goverment at a significantly lower interest rate than students do. Kids signing up for their loans at 18 have no idea what any of the terms mean or how it will impact their future financial standing. They're just coming out of high school with no clue about how to budget for anything other than lunch and gas, and the university/student loan finance system takes extreme advantage of that.
And all of these issues are multiplied in severity when you start looking at the for-profit entities like University of Phoenix. People end up $70k in debt for a bullshit tech degree from online courses. They're constantly reassured by the marketing department that all kinds of Fortune 500 companies have leaders with degrees from UoP, but most HR departments and hiring managers aren't going to view a resume with DeVry or University of Phoenix on it in high esteem.
Last edited by Crarrs; 08-12-2015 at 05:10 PM.
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08-12-2015, 01:33 PM
#7
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And in the housing bubble, individuals took on more debt than was reasonable in order to buy things that they didn't have a clear plan for repayment of, then complained about "predatory lending practices" and started shouting about how they shouldn't be required to pay their debts.
$250k is way too much to pay for school, unless your definition of "school" includes one of the two following courses of study:
Or, poor people shouldn't buy Mercedes. (Although they still do.)
$250k is way too much to pay for school, unless your definition of "school" includes one of the two following courses of study:
4 years of undergrad work consisting of biology, chemistry, anatomy and physiology, etc, followed by four years of graduate work culminating in an MD, followed by an Internship and Residency, followed by people calling you "Doctor."
or
4 years of undergrad work consisting of science, math and engineering, followed by three years of graduate work culminating in a JD in which you were in the top 10% of your class, followed by getting a job at a large corporate law firm in New York, Boston, Silicon Valley, etc.
or
4 years of undergrad work consisting of science, math and engineering, followed by three years of graduate work culminating in a JD in which you were in the top 10% of your class, followed by getting a job at a large corporate law firm in New York, Boston, Silicon Valley, etc.
Or, poor people shouldn't buy Mercedes. (Although they still do.)
Kids signing up for their loans at 18 have no idea what any of the terms mean or how it will impact their future financial standing. They're just coming out of high school with no clue about how to budget for anything other than lunch and gas, and the university/student loan finance system takes extreme advantage of that.
And all of these issues are multiplied in severity when you start looking at the for-profit entities like University of Phoenix. People end up $70k in debt for a bullshit tech degree from online courses. They're constantly reassured by the marketing department that all kinds of Fortune 500 companies have leaders with degrees from UoP, but most HR departments and hiring managers aren't going to view a resume with DeVry or University of Phoenix on it in high esteem.
And all of these issues are multiplied in severity when you start looking at the for-profit entities like University of Phoenix. People end up $70k in debt for a bullshit tech degree from online courses. They're constantly reassured by the marketing department that all kinds of Fortune 500 companies have leaders with degrees from UoP, but most HR departments and hiring managers aren't going to view a resume with DeVry or University of Phoenix on it in high esteem.
F(*# for profit Universities. I had some co-workers that are doing programs in schools like that and I feel bad for them, but they take no criticism toward their choice. So there isnt much you can do there.
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08-12-2015, 01:49 PM
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My personal experience: Where I went to college, the tuition increased 250% just while I was attending, and MANY new buildings were constructed during that time. I paid $1100 per semester when I started, and tuition is over $5000 now. I've been out of school for 8 years now, and go back to that campus once a year (Flagstaff, AZ is a great city to visit. Wish I could've found a job there to continue living there) just to see how it's changed. The construction has continued to the point that there is almost no open space left on the university's "footprint", and many of the dorm buildings have been replaced by extravagant (by broke-*** 18 year old student standards) furnished apartments. Many of these new dorms are operated by an external contractor (big-money government contracts aren't just in the defense industry).
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08-12-2015, 01:53 PM
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I don't know how you do it, but I think forcing parents and students to be rational about how much they're spending and what they're actually going to make is important. I finished with $50k in debt and an engineering degree, student loans have been annoying but not a big deal. My sister graduated with about the same and a film degree, not quite the same scenario. My parents (college educated) took my experience as the usual. It's especially hard on families that have never had members go to college. I don't think this is the sole responsibility of schools, but they do bare some of the responsibility.
The interest is what kills me. I'm paying way more in interest on government loans that bankruptcy doesn't get me out of and that I'm paying full payments on than I did on a new off the lot Miata note. Interest is supposed to reflect risk, and in my opinion those two things are disconnected.
The interest is what kills me. I'm paying way more in interest on government loans that bankruptcy doesn't get me out of and that I'm paying full payments on than I did on a new off the lot Miata note. Interest is supposed to reflect risk, and in my opinion those two things are disconnected.
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08-12-2015, 02:08 PM
#11
<p>I went to a public school and lived in a house with 5 people to reduce living expenses on top of working part time all through school. If you are smart about it you can get a college education without going deep into debt. </p><p>I do agree that interests on public loans are pretty high. I think my unsubsidized loan was about 8% and acquired interested immediately. However, that made me focus on living below my means to pay it off very quickly and lift that debt off my shoulders as soon as I could after graduating. </p>
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08-12-2015, 02:13 PM
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The interest is what kills me. I'm paying way more in interest on government loans that bankruptcy doesn't get me out of and that I'm paying full payments on than I did on a new off the lot Miata note. Interest is supposed to reflect risk, and in my opinion those two things are disconnected.
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08-12-2015, 02:17 PM
#13
<p> </p><p> </p><p> </p><p> </p><p> </p><p></p><p> </p><p> </p><p> </p><p>ICWUDT <img alt="likecat" src="https://www.miataturbo.net/images/smilies/likecat.png" style="height:20px; width:25px" title="likecat" /></p><p> </p><p> </p><p> </p><p> </p><p> </p><p> </p><p> </p><p> </p><p> </p>
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08-12-2015, 02:53 PM
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Because if it did, there would be *massive* fraud.
The only real disincentives to an individual declaring bankruptcy are liquidation of assets and the black mark associated with bankruptcy on one's credit report. A recent graduate presumably has no assets to liquidate, and is less likely to care about their credit report (having little to no extant credit history) than an individual who is older, owns a home, car and personal property, etc.
Thus, there'd be no reason for the vast majority of students to amass large student loan debt and subsequently default on it all immediately after graduation. This would lead to the collapse of the student lending industry, which I'm sure some people would view as a net positive outcome.
The only real disincentives to an individual declaring bankruptcy are liquidation of assets and the black mark associated with bankruptcy on one's credit report. A recent graduate presumably has no assets to liquidate, and is less likely to care about their credit report (having little to no extant credit history) than an individual who is older, owns a home, car and personal property, etc.
Thus, there'd be no reason for the vast majority of students to amass large student loan debt and subsequently default on it all immediately after graduation. This would lead to the collapse of the student lending industry, which I'm sure some people would view as a net positive outcome.
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08-12-2015, 03:17 PM
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My biggest problem with student loans in the Federal sense is that they don't cover my total cost of tuition. I'm pretty much completely paying out of pocket for my degree with no financial aid. I don't make good money but I make enough.
I came back to school later in my 20s, I'm 26 now and started only 2 years ago. I had an established credit of about 650 when I started with no real debt other then a car note that was paid off after the first year of school. BUt obviously I get hit with the not long established credit ding since I only got my first credit card and car note when I turned 21 and not 18.
Anyways it's BS that I only get approved for so much on my fed loans which really only covers half of tuition at my school. The rest the school assumes I can pay out of pocket. Which at about $4500 a quarter(10 weeks) I certainly cannot pay. I make $31,000 a year before taxes and live at home with my parents. (My parents make about $70k combined income so household income with around $100k yearly) I am forced to take out private loans to cover the difference left that Fed loans don't cover. So now I have federal loans and private loans to pay out on, not to mention my private loans absolutely rape me in interest and I cannot consolidate the 2 after graduation.
Combined loan total for a Bachelor's in computer science from Robert Morris University in downtown Chicago right now in my senior year is ~$70,000. It'll prbably be about $80,000 when I graduate.
My saving grace has been my pops co-signing for me on the 2 private loans I've had to take to cover left over costs. I'm going to need to apply for a 3rd and it freaks me out if by chance for whatever reason I or my dad don't get approved. The way my school works is basically even though they have all my fed loan money and previous private loan money, they will still keep me from graduating or continuing class if my personal balance with them gets over like $4k. Which would be complete bullshit if I can't finish my last 2 senior year quarters on time because I had to take off a quarter to try and pay down my balance.
Don;t even get me started on how ******* terrible my school's finance office is with help and advice. They are just money grabbing jackasses. I've had to pretty much figure out everything on my own, their typical response for when I ask for help struggling to come up with money is "Just go take out another loan". **** you guys, it;s not that easy to just go get a loan.
The whole idea "don't spend what you can't afford" approach for school is horse ****. Most schools work in trimester or 4 semester financial periods. They will not tell you total cost of attendance. Sure you can put 2 and 2 together to get an idea. But I honestly thought my education was going to be in the 50s-60s. BUt they have since hiked tuition so much even in 2 years it's easily in the 70s-80s now. In the scheme of things I still feel ok that the cost of my bachelor's is still under 100k. Especially upon graduation I should be able to land an easy $60k-$70k job. Paying it down shouldn't be all that bad. I just wish schools would just be upfront about the real costs of attendance and not fight with me and bleed me dry. Working with finance office is a nightmare and they take advantage of students. If I don't stay ontop of my class coordinator they sometimes try throwing me some completely BS class I don't need for my degree. RAAAGGGEE
*Breaths* I could rant for hours.
But anyways yeah, the whole system is fucked and I really think that Government needs to ******* do something about it because these for-profit based schools are killing our generation and future. If I woulda known better when I started I probably would have tried to get into a not-for-profit school. Or atleast kept with my local community college classes I was taking to completely finish my associates there before transitioning.
I came back to school later in my 20s, I'm 26 now and started only 2 years ago. I had an established credit of about 650 when I started with no real debt other then a car note that was paid off after the first year of school. BUt obviously I get hit with the not long established credit ding since I only got my first credit card and car note when I turned 21 and not 18.
Anyways it's BS that I only get approved for so much on my fed loans which really only covers half of tuition at my school. The rest the school assumes I can pay out of pocket. Which at about $4500 a quarter(10 weeks) I certainly cannot pay. I make $31,000 a year before taxes and live at home with my parents. (My parents make about $70k combined income so household income with around $100k yearly) I am forced to take out private loans to cover the difference left that Fed loans don't cover. So now I have federal loans and private loans to pay out on, not to mention my private loans absolutely rape me in interest and I cannot consolidate the 2 after graduation.
Combined loan total for a Bachelor's in computer science from Robert Morris University in downtown Chicago right now in my senior year is ~$70,000. It'll prbably be about $80,000 when I graduate.
My saving grace has been my pops co-signing for me on the 2 private loans I've had to take to cover left over costs. I'm going to need to apply for a 3rd and it freaks me out if by chance for whatever reason I or my dad don't get approved. The way my school works is basically even though they have all my fed loan money and previous private loan money, they will still keep me from graduating or continuing class if my personal balance with them gets over like $4k. Which would be complete bullshit if I can't finish my last 2 senior year quarters on time because I had to take off a quarter to try and pay down my balance.
Don;t even get me started on how ******* terrible my school's finance office is with help and advice. They are just money grabbing jackasses. I've had to pretty much figure out everything on my own, their typical response for when I ask for help struggling to come up with money is "Just go take out another loan". **** you guys, it;s not that easy to just go get a loan.
The whole idea "don't spend what you can't afford" approach for school is horse ****. Most schools work in trimester or 4 semester financial periods. They will not tell you total cost of attendance. Sure you can put 2 and 2 together to get an idea. But I honestly thought my education was going to be in the 50s-60s. BUt they have since hiked tuition so much even in 2 years it's easily in the 70s-80s now. In the scheme of things I still feel ok that the cost of my bachelor's is still under 100k. Especially upon graduation I should be able to land an easy $60k-$70k job. Paying it down shouldn't be all that bad. I just wish schools would just be upfront about the real costs of attendance and not fight with me and bleed me dry. Working with finance office is a nightmare and they take advantage of students. If I don't stay ontop of my class coordinator they sometimes try throwing me some completely BS class I don't need for my degree. RAAAGGGEE
*Breaths* I could rant for hours.
But anyways yeah, the whole system is fucked and I really think that Government needs to ******* do something about it because these for-profit based schools are killing our generation and future. If I woulda known better when I started I probably would have tried to get into a not-for-profit school. Or atleast kept with my local community college classes I was taking to completely finish my associates there before transitioning.
Last edited by Mazduh; 08-12-2015 at 03:30 PM.
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08-12-2015, 03:49 PM
#18
<p> </p><p>Quite a few years ago they eliminated the income tax deduction for interest on any loan except for residences (yes, I know that's been pretty much abused now) I.E. credit card interest, personal loan interest etc. Look for the interest on student loans to become tax deductible sometime in the near future. It's something the schools will push for to continue the tuition hikes they've enjoyed over the past couple decades.</p><p>Small help but a help nonetheless.</p><p> </p>
Last edited by bahurd; 08-12-2015 at 04:20 PM.
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08-12-2015, 04:11 PM
#19
I agree 100% with Phil's post.
Personally from my own experience it seemed a little 'too' easy for me to get signed up with ITT Tech and owe $70k+. Turned that down and went to austin community college instead, realized later my advanced IT classes were for me to be spoon fed with knowledge. Though more hands on, any higher learning acquired there I could of done at home in my free time & become qualified via certification.
Personally from my own experience it seemed a little 'too' easy for me to get signed up with ITT Tech and owe $70k+. Turned that down and went to austin community college instead, realized later my advanced IT classes were for me to be spoon fed with knowledge. Though more hands on, any higher learning acquired there I could of done at home in my free time & become qualified via certification.
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08-12-2015, 04:24 PM
#20
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<p>Oregon just passed a new bill that makes community college free for high school graduates. Combine 2 years of community college and 2 years of state school there is no way in hell you should ever have 250k in loans. If you can't afford to go to a 60k a year school then....DON'T ******* GO.</p><p>I worked hard in high school, got a good scholarship to my state school and paid very little (~1k) a year in tuition (because engineering classes). I had help from my parents, but also had paid internships every summer.</p><p>I have absolutely no sympathy for students graduating with 200k in loans, its stupid.</p><p>70-80k is a lot more reasonable.</p><p>I also agree that it is horse **** that you have to pay high interest rates on a loan that you have absolutely no chance of getting out of.</p>
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