Student Loan Debt The Truth

I will say that college is not for everyone, I don't think it was intended to be that way from the beginning. Shame that just about every job requires a degree of some sort these days.

a reply to: Hypntick

True, even for entry level positions in my company, I require a degree or 4 yrs experience.
And we run a very extensive background check. Also we're a Union shop.

The real problem is that student loans are federally guaranteed. This allows universities and other "higher learning" places to make money hand over fist without EVER having to worry about having a # product. It doesn't matter, they will always make more money than they deserve because of this.

It's pretty simple. Kill that federal program and they will have to compete again. Then they will have to trim the crust from the collective # sandwich.

a reply to: JAGStorm

I totally agree. Students are counceled into thinking that living in a dorm locally instead of living at home is not going to cost them anything around here, they are told the whole college experience will not cost them anything.... Yes it is not going to cost them a dime now, but they will have major debt when it is done. I have seen this personally over the last couple of years, I have seen the College papers stating the cost to the student is Nothing, but if you actually look at the figures, it is a lot of loans that are being taken out. The kids do not comprehend that, they are not taught to be wary of what the schools say. My granddaughter thought it was all going to be free to stay ten miles away on campus, but she found out it was going to cost her over twelve grand for the year...plus interest later on. She decided she was going to take a year off and go to trade school next year, the cost of the tuition is completely paid by her scholarships and she will be pretty much be guaranteed work at more than what she would have made with her degree. A woman who has maintenance and welding experience working in a mine will get a job easily around this area.

originally posted by: Fools
The real problem is that student loans are federally guaranteed. This allows universities and other "higher learning" places to make money hand over fist without EVER having to worry about having a # product. It doesn't matter, they will always make more money than they deserve because of this.

It's pretty simple. Kill that federal program and they will have to compete again. Then they will have to trim the crust from the collective # sandwich.

Yes, inject traditional loan underwriting back into the equation and problem goes away.....yes let failing students and those with no gumption or learned skills fail and declare bankruptcy due to whatever deficiency is used by the individual student.

Banks and financial institutions will immediately stop the insanity.

A rather large chunk of the students in college today don't belong there. I'm too lazy to look for it right now, but there was a census done that showed the people who are graduating college and getting the jobs in their fields are actually paying back their students loans something like 50% faster than people did in the 1970s. The problem is, the people who are in college that should be learning a trade and don't get those jobs or graduate on time or not at all.

There is a growing useless class in our society. And merely hiding the cost of college by shifting it over to the tax payer isn't going to solve this problem. The three big things I see driving this inequality people seem so obsessed with is big tech, the knowledge economy and global corporatism. None of those things are being addressed by the people who make their living crying about inequality. I wonder why...

College costs for a 4 year degree is around $70,000 at a public college. This only includes tuition, books and supplies, 12 meals per week and dorm room. If you add a graduate degree, which cost more per semester, a student will be indebted for over $100,000 for six years of college.

I don't see how published statistics come up with figures like $30,000 for a four year degree unless the student is living at home, using the parents car, have friends that provide them with old text books and being fed by parents while in attendance.

Most students don't have parental support. Also, I know people with STEM degrees that can't find work in their field and have to work in low paying jobs. This negates comments stating that if you get an engineering degree than you are in the money on graduation. Employers are looking for people with very specific skills that don't require training in the use of their software and equipment. Employers have the time to wait for the perfect match because new employees are not in very high demand.

With college loan payback of over a thousand USD per month and skyrocketing rent cost. College is just not worth the time.

IMO, the best thing to do is get a career in the military, get a retirement income, go to work for the government civilian sector then you will be set for life.

a reply to: Krakatoa

From my perspective, this attitude is EXACTLY the cause of this crisis. Parents that shirk their DUTY to raise their children to think rationally about finance and not with their "feelz". If they wish to pursue some wack-a-doodle degree, why should a parent pay for something that will assure them a failed future?

Parents can instruct their kids as much as they want and raise them in the best way they see fit, but it's their children's ultimate decision on the education and the degree they choose, and the parents have no say over what the children choose for themsleves, unless the parents are overbearing, controlling, and condition aid or shiny things based on their wishes.

That said, since this is about students loans, that really has little to do with what the parents pay toward the education, no?

BTW, what's a "feelz?"

As a first generation student in my family I didn't fully understand how college loans worked.
I learned the hard way, which weakened me financially in some ways back then but in other ways made me stronger.

To make sure my offspring don't have to deal with the burden I plan to eventually pay off their loans to help them get a boost. So when they graduate and get nice jobs hopefully they can save as much as possible.

a reply to: JAGStorm

With what has recently been revealed about paying to skip college all together...
You learn it's always been that way and the smartest have money to pay for the college credentials for their offspring.
Those of us trying to be smart...get caught in the business associated with student loans and sadly can become victims to financial burden unless you somehow learn the taxing ways of the student loan controllers...

a reply to: olaru12

Governments do not regulate but greatly affect tuition costs by providing a lot of easy dollars for education loans. If the money is there, universities and colleges will naturally raise their costs to take advantage of it.

If the cash flow was not as juicy, would their costs still be high as they compete for students?

With regards to a "useless degree"? How about a degree for which there is no demand. The borrower has no hopes for finding good paying employment. Ergo, the borrower has little hope of paying off the loan facilitating the degree in the first place.

Now, if the student simply wants to learn about a subject, great. Enjoy the knowledge and the loan payments. Hope it was worth it.

originally posted by: eManym
College costs for a 4 year degree is around $70,000 at a public college. This only includes tuition, books and supplies, 12 meals per week and dorm room. If you add a graduate degree, which cost more per semester, a student will be indebted for over $100,000 for six years of college.

I don't see how published statistics come up with figures like $30,000 for a four year degree unless the student is living at home, using the parents car, have friends that provide them with old text books and being fed by parents while in attendance.

Published statistics can come up with figures like 30K for a four year degree because it is a fact. Tuition is not nearly as expensive as people make it out to be. You are right about room and board, yes those are expensive. Keep in mind that is a choice. It is also a choice to go to school out of state. It is a choice to not live at home and go to a school close by. It is a choice to go to an expensive school vs a state school. It is a choice to go to a physical school vs. an online one.

Food and housing, it doesn't matter if you go to college or not, these are going to cost you, or your parents.

Most graduates have to settle for low paying employment out of college. This requires a deferment or forbearance on their payments, which causes interest accrual. The longer the loan goes without payment the bigger the debt gets. Every 12 years the debt doubles.

I have deferred my loans numerous times since getting my graduate degree. My loan debt has gone up 40%. The IT job market sucks, it is very difficult to find employment and the employment that is found is short term, part-time or casual. Employers treat interviewees like selecting food items at a menu in a restaurant.

The DOE loves that accrued interest.

originally posted by: JAGStorm

originally posted by: eManym
College costs for a 4 year degree is around $70,000 at a public college. This only includes tuition, books and supplies, 12 meals per week and dorm room. If you add a graduate degree, which cost more per semester, a student will be indebted for over $100,000 for six years of college.

I don't see how published statistics come up with figures like $30,000 for a four year degree unless the student is living at home, using the parents car, have friends that provide them with old text books and being fed by parents while in attendance.

Published statistics can come up with figures like 30K for a four year degree because it is a fact. Tuition is not nearly as expensive as people make it out to be. You are right about room and board, yes those are expensive. Keep in mind that is a choice. It is also a choice to go to school out of state. It is a choice to not live at home and go to a school close by. It is a choice to go to an expensive school vs a state school. It is a choice to go to a physical school vs. an online one.

Food and housing, it doesn't matter if you go to college or not, these are going to cost you, or your parents.

The problem with the data is very few people actually pay the "list price" for tuition... schools rely on rich international students to pay the full freight.

The MBA program I graduated from charges $106,000 / yr now. So basically $212k for two years. Not including room & board. The thing is that is the list price. Hardly anyone actually paid it between grants, scholarships, employer sponsored tuition, etc.

My employer paid my tuition for two years, but I took about $60k in student loans to cover my living expenses.

originally posted by: eManym
Most graduates have to settle for low paying employment out of college. This requires a deferment or forbearance on their payments, which causes interest accrual. The longer the loan goes without payment the bigger the debt gets. Every 12 years the debt doubles.

The DOE loves that accrued interest.

That is exactly right, people have no clue the cost of time!

One of the main problems with college is how terrible the elementary and high schools are. When you rely on test scores to get funding you have the kids just work on those subjects to ensure they can score high and you meet the goals of to get the funding. High schools and elementary schools are not doing a good job of providing a good baseline for kids so when they get into college or community college most have no idea what they want to do because they have not been exposed to a lot of different things or in many cases trades or specialized skills that could give them a foundation of what they may be interested in.

When you look at what most people spend a large portion of their money on throughout their life such as a home, car, insurance, and loans are kids ready to take on these responsibilities with a good understanding? Why are schools/colleges not offering education on how to take care of a home, what is a mortgage, what is a rental agreement, etc. Instead we have classes on our feelings and orientations on bullying. The entire education system in this country is moving to a bad place and until large scale reform happens nothing will change except the price tag will keep getting bigger and kids will be less prepared

originally posted by: JAGStorm
Some of these students are either not graduating, or graduating with useless degrees. These people would have been better off just not going to college. Yes that is harsh, but it's the truth. They made a bad decision and now how to live with it.

I had submitted in another thread bout this subject that a simple solution is to make Student Loan Debt dischargeable in bankruptcy.

Two additional aspects of this:

a) if the loan was backed by the government, said government should be able to hit the College in question with at least 50% of said discharge - meaning, they send the College a bill for that amount - and

b) all federal funding going to schools, including but not limited to colleges/universities, should be banned.

No more grants, no more guaranteed student loans, nothing. Schools should have to survive/thrive/fail on their merits.

This way, everyone learns a lesson, but the students have an out - not an easy one, but I don't think it should be easy.

a reply to: tanstaafl

a) if the loan was backed by the government, said government should be able to hit the College in question with at least 50% of said discharge - meaning, they send the College a bill for that amount - and

Why should colleges get hit with 50%?
Just curious

originally posted by: JAGStorm
a reply to: tanstaafl

a) if the loan was backed by the government, said government should be able to hit the College in question with at least 50% of said discharge - meaning, they send the College a bill for that amount - and

Why should colleges get hit with 50%?
Just curious

Because they would have skin in the game to ensure the students are graduating with jobs and not taking on too much debt.

I've proposed the school be on the hook for at least 10% of any debt used to attend the school. The school itself should also be underwriting the loan. This puts the incentive back on teh school to ensure they are vetting / due diligence of an individual student and their major, amount being borrowed, and likelihood of graduating with a job being able to service that debt.

If a student takes out say $50k in student loans and defaults, then the school would be on the hook for say $5k.

Right now, the university has no skin in the game so they don't care if a student over leverages themselves with debt to attend. As such, they have no issue continuing to raise tuition as they aren't the ones on the hook if the student fails.

a reply to: Edumakated

Because they would have skin in the game to ensure the students are graduating with jobs and not taking on too much debt.

Colleges often produce statistics on job rate after school.
Is it their fault if they have a bad student, that gets a minimum wage job after a degree?

I'll tell you right now what will happen if colleges are held accountable in this manner. A giant segment of the population will not be going to college. Colleges will be called racist and we'll start over from square one.


Edit to add, I went to school in Europe. For many of my classmates after school they took a test (similar to ACT) that test determined if you were even college material at all. If you were, you got in for free just like high school, some countries weren't free but very, very low cost. If you didn't do well on the test, you did a vocation or something else.
Maybe this is more the type of system we need to look at.......
maybe our bar in the US is just too low.

originally posted by: JAGStorm
a reply to: Edumakated

Because they would have skin in the game to ensure the students are graduating with jobs and not taking on too much debt.

Colleges often produce statistics on job rate after school.
Is it their fault if they have a bad student, that gets a minimum wage job after a degree?

I'll tell you right now what will happen if colleges are held accountable in this manner. A giant segment of the population will not be going to college. Colleges will be called racist and we'll start over from square one.


Edit to add, I went to school in Europe. For many of my classmates after school they took a test (similar to ACT) that test determined if you were even college material at all. If you were, you got in for free just like high school, some countries weren't free but very, very low cost. If you didn't do well on the test, you did a vocation or something else.
Maybe this is more the type of system we need to look at.......
maybe our bar in the US is just too low.

A big problem is that a large percentage of students should not be in college in the first place. However, we have decided that college is the be all end all and created a situation where people feel like they are failures if they don't go to college.

We can't have it both ways.

We have to accept that not everyone is going to get to go to college.

With that said, making colleges hold some of the paper ensures they are involved in making sure that students do in fact graduate and are capable of getting jobs. They have a vested interest. This means investing in career centers, tutoring, etc so they don't get burned by poor performing students.

The other thing that will happen if financing is being underwritten by private institutions is that costs will go down because loans will be granted based on likelihood of future success. You'd see costs much cheaper for say studying LBGT Art Theory majors because the schools know no one is going to give that student a loan, so they'd most likely be paying cash.

On the other hand, if a student is smart enough to go to Cal Tech or MIT, they will get plenty of loans as needed.

Right now schools charge the same for all majors. In addition, you have lower tier schools charging tuition similar to that of Ivy League and other peer schools. These lesser schools can only get away with this because of the easy financing available.

a reply to: JAGStorm

The ACTSAT and AP test are hardly relevant when you consider the conditions in high schools. Back in the 70's when I went to high school there were race riots, drugees, and race related school violence. Not very conducive to learning. When I took the ACT...I thought it was bullsh#t and I christmas treed the test, which gave me a bad grade, I just wanted to get out of there and be done with it.

When I got into college after repairing my grade level, I found value and graduated with a B+ average with my BS at a local state university and an A- average with an MS at FIT.

Not sure how HS is today but back when I went it was terrible and shouldn't be used as a measure of apptitude.