LockedStudent Loans

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DawnT
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2013/07/01 22:39:34 (permalink)

Student Loans

Today's news brought the word that recent and new loans have doubled to near 7%. Even with the former rate and a depressed job market leaving recently graduated students little or no means of repaying their loans, it must be devastating and even more so with cosigned parent ready to retire to be saddled with such lingering, undischargable debt.
#1

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    The Travelin Man
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    Re:Student Loans 2013/07/02 09:24:17 (permalink)
    What's your point?
    #2
    Sundancer7
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    Re:Student Loans 2013/07/02 12:04:43 (permalink)
    TTM:  In my opinion only, the point is that students that take out student loans have a very difficult time paying them back although to get through their program, they have very little choice.  Roz has been very fortunate due to some assistance with fees, tuition and housing, she has been able to slide almost through her PhD. program with no money owned.  I feel sorry with some paying better than $150K+ for the program and getting a student loan for the amount +7%.  I guess the option is not to get a loan and not get the degree.
     
    You being in the business will have a better idea of options available.  Roz could not get a scholarship as most of the time they are not offered to upper degree programs.  Mostly BS.
     
    Speaking of that and Roz, you and I have had the discussion of your important position with the university that employees you.  We both feel the importance of you continuing your MBA and PhD.  With your persuasive skills and personality, You could own the university.
     
    Paul E. Smith
    Knoxville, TN
    #3
    MetroplexJim
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    Re:Student Loans 2013/07/02 14:12:48 (permalink)
    Few understand Higher Education's market model.  Here it is:
     
    1)  Sell the market on the absolute necessity of your product/service.  In this they have been an outstanding success; the B.A. degree has become the present-day "union card".  There are even $10/hr. jobs that now require it; in a slack employment market, businesses use it as a screening device!
     
    2)  As a necessity they can set their "list" price to the sky; in some cases $100K+/year.  But, as they are "humane, public-spirited" institutions they "allow" their applicants to submit a FAFSA form (which is extremely intrusive of financial privacy) and, upon supplication, allow "discounts" - scholarships, loans, etc.
     
    Imagine a hot dog stand "listing" their dogs for $100.  But, if you show them your bank statements and tax forms, they kindly (as all suffer hunger) offer discounts, and all who submit are served.  Some get their dog for free, some pay $3, some pay $30, some pay $100, some pay the $100 and then donate $10,000 for a new fridge if you let them put their name on it. 
     
    (F.Y.I. : There are many institutions - private and public - whose endowment income is greater than their operating budgets).
    post edited by MetroplexJim - 2013/07/02 14:19:57
    #4
    Davydd
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    Re:Student Loans 2013/07/02 15:45:16 (permalink)
    Paul,
     
    So how does one "slide through...with no money owed" this day and age? Rhetorical question, BTW, and not asking directly about Roz. I know I got through college debt free and never borrowed a cent in a simpler time. Maybe if interest rates were 3.4% or even 6.8% I might have been tempted.  I read accounts in this day and age where people are still managing to do so debt free and yet others seem to get saddled with ridiculously high debt that I don't see how they can pay it off. Isn't the average around $30,000 debt?
     
    I know public institutions are really no longer public in that most operations cost no longer come much from the state.
     
    I know college tuition has far outstripped and risen higher than the Consumer Price Index and almost all other costs maybe with the exception of healthcare.
     
    It is true that a college degree is like getting a "union card" as MetroPlexJim coined it. That was a battle with HR where I worked in trying to hire qualified people to do specialized architectural CAD work. You just didn't get hired at corporate headquarters without a college degree. It seems to me it puts an extortion pressure on students in getting decent jobs and costs go unchecked.
    #5
    rumaki
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    Re:Student Loans 2013/07/02 16:22:50 (permalink)
    I can only speak for my department, but in our graduate program, we only admit as many grad students as we can support -- meaning that they get tuition offsets, "fringe" (health insurance), and a stipend for either being a teaching assistant, research assistant, or instructor of record, typically compensated for 20 hours of work a week.  They can also apply for university-wide fellowships, etc.
    They may not emerge debt-free, but it's nothing like in the professional programs (like law school), where they typically do emerge with lots of debt.
    #6
    jman
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    Re:Student Loans 2013/07/02 16:35:37 (permalink)
    Glenn Reynolds, a Law professor at the University of Tennessee, has been discussing the problems of student loans and tuition costs for a number of years. Here's an article he just wrote for the WSJ:
     
    What's Really 'Immoral' About Student Loans
     
    IMO, there are too many students investing in worthless degrees which give them zero chance to pay back their student loans.  Even for those students who get marketable degrees, too many of them get student loans without concern for paying them off. 
    #7
    The Travelin Man
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    Re:Student Loans 2013/07/02 16:37:45 (permalink)
    When asking "what's your point?" the idea was to find out why someone would find that borrowing money for education is any worse than borrowing money for a car one could not afford or taking out a mortgage on a home that one could not afford. People borrow money for things far less important than a college education all the time. People borrow money for things that are far less important AT FAR HIGHER INTEREST RATES all the time. Yet, I continually hear families that are unwilling to "go into debt" for a college education. Why not? Is your son or daughter's education less important than your Lexus? Is your son or daughter's education less important than maintaining the high-rent district home?
     
    For whatever reason, there is a growing trend in people to believe that their children's college education should be free or nearly free. Why is education the one commodity for which people believe that they should buy the cheapest available option? People generally don't buy the cheapest car, house, or even clothing. They buy things for which they perceive value.
     
    Not every college degree is worthless. Not every graduating senior cannot find a job. But, 17-year olds, by the very nature of having been told "you can do anything you want to do" and "everyone is a winner" find stark realities when they get to the college world. Sure, you can do anything you want to do. You want to study music or art, knock yourself out. Just know that society doesn't value the work of most musicians and artists, so your best case scenario is probably living in some hipster hell, packed eight to a one-bedroom SoHo apartment, in the hopes that one of the eight catch a lucky break and get a call back for a tampon commercial. If you had borrowed $200k to go to Swarthmore to make that happen, well.....that may just be your own (the student's) fault. If you allowed your child to do this, then it may be your (the parent's) fault.
     
    I could probably go on and on, but there's no point. 
    #8
    Tony Bad
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    Re:Student Loans 2013/07/02 16:53:21 (permalink)
    The Travelin Man

    When asking "what's your point?" the idea was to find out why someone would find that borrowing money for education is any worse than borrowing money for a car one could not afford or taking out a mortgage on a home that one could not afford. People borrow money for things far less important than a college education all the time. People borrow money for things that are far less important AT FAR HIGHER INTEREST RATES all the time. Yet, I continually hear families that are unwilling to "go into debt" for a college education. Why not? Is your son or daughter's education less important than your Lexus? Is your son or daughter's education less important than maintaining the high-rent district home?

     

    #9
    Russ Jackson
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    Re:Student Loans 2013/07/02 17:30:47 (permalink)
    Going to school and going into debt $120,000 dollars for a job that will pay $40,000 is stupid. Young adults expect parents to pick up the tab so they can experience life at school away from home. Party, sex and freedom at Parents expense. Get a job in high school and summers continue working through the first two years at a community college as you get the basics done. Then commute to a local university while still working and saving. Take as few loans out as possible and bust your ass. Get out of College with a $15k loan and learn how life really works. At the end of College you have 5 or 6 years work experience and a degree. Plus hopefully a fall back trade as you worked through high school college in case the economy is bad. Drive a used car until you are out of debt totally. Never have your Parents pay a dime. Today people feel they should have it taken care of for them on someone else's dime. That is why so many have such poor work ethic and for the ones that do the road to success is much easier. I bet most of us had two or three jobs getting through college....Russ  
    #10
    Davydd
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    Re:Student Loans 2013/07/02 17:53:17 (permalink)
    Maybe we generalize too much. Kids today are no different than kids of our generations. They just have different concerns, circumstances and pressures. Shake the sack, most will come out OK.
     
    Here is a chart I found online. If accurate, it does indicate a problem of concern in education.
     

    #11
    MetroplexJim
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    Re:Student Loans 2013/07/02 18:37:48 (permalink)
    Davydd

    Maybe we generalize too much. Kids today are no different than kids of our generations. They just have different concerns, circumstances and pressures. Shake the sack, most will come out OK.

    Here is a chart I found online. If accurate, it does indicate a problem of concern in education.




    An excellent illustration of the "model" I was trying to describe above.
    #12
    FriedClamFanatic
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    Re:Student Loans 2013/07/02 20:06:29 (permalink)
    MetroplexJim

    Davydd

    Maybe we generalize too much. Kids today are no different than kids of our generations. They just have different concerns, circumstances and pressures. Shake the sack, most will come out OK.

    Here is a chart I found online. If accurate, it does indicate a problem of concern in education.




    An excellent illustration of the "model" I was trying to describe above.

     
    too bad they didn't overlay "healthcare" on that chart. Maybe because the chart is too small?
    #13
    MetroplexJim
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    Re:Student Loans 2013/07/03 09:24:03 (permalink)
    Actually, healthcare costs have escalated more slowly than tuition.  That said, as an industry they have risen faster than anything other than tuition.  In 2000 healthcare was one-seventh of the GDP; presently, it is one-sixth.
     
    That said, nothing has grown faster than the national debt,  It nearly doubled 2001 - 2008 ($5T to $9.5T); presently it stands at $17T on its way to doubling again by 2016.  And, despite the fact that tax revenues are presently at an all-time high, it is still growing at $1T/year.
     
    Tuition, healthcare, national debt, student debt:  all are "out of control" - only the extraordinary, unprecedented actions of the Federal Reserve, creating $85B/ month "out of thin air" are keeping these bubbles aloft. 
    post edited by MetroplexJim - 2013/07/03 09:31:45
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    Russ Jackson
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    Re:Student Loans 2013/07/03 10:30:03 (permalink)
    Its ok just keep printing money, spend it like a drunken sailor on the people that will vote for you. And do not forget to tax the rich just a little more, because the top 10 percent of income earners paid 71 percent of all federal income taxes and thats just not enough. And 51% of the people are on some form of government assistance.
    Also, MetroplexJim I have a feeling health care costs are going to catch tuition increase % very soon...Russ
    #15
    MetroplexJim
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    Re:Student Loans 2013/07/04 10:07:51 (permalink)
    It is axiomatic that when additional layers of administration are added to an industry, the price to the consumer increases.
    #16
    Foodbme
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    Re:Student Loans 2013/07/04 20:49:37 (permalink)
    Let's face it-------We're Screwed!
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    tmiles
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    Re:Student Loans 2013/07/05 11:20:21 (permalink)
    Kids expect a lot from college too.....fun, great food, sports, dorm life, field trips and so on. It costs money to compete for students.
     
    If one wants to work his/her butt off,,,,,,,have no fun (or time for fun), just go to Harvard at night............low cost, lots of financial aid (not loans), and open admission. (prove that you can do the work, and you get to stay) Just look up Harvard Extension School, and point your kids in that direction.
     
    Service in the National Guard has put many a kid through college, debt free, but that too, is not a lot of fun.
     
    I think that a very hard job, today, is to be VP of enrollment management, at a mid to lower tier private college. You are offering a product in competition with 1/2 price state schools, and you don't have a lot of evidence to show that your graduates are better off than state grads 4 or 5 years down the road.
    post edited by tmiles - 2013/07/05 11:25:57
    #18
    Davydd
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    Re:Student Loans 2013/07/05 13:17:43 (permalink)
    When I was in the Navy one of my duties was the Liaison officer in charge of the Navy's Afloat College Education in Newport, RI. I organized and scheduled classes, used filmed lectures from Harvard Extension and had the lecturing professors come once a week to the ship and lecture. I went up to Harvard once a month to meet with their administration and I had to wear my uniform. That was not comfortable on campus back in 1969 and 1970 during the height of the Vietnam War.
    #19
    Cosmos
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    Re:Student Loans 2013/07/05 22:58:18 (permalink)
    It is in the interest of the country to invest in its future by making low cost loans available to the students who will become our future. No one is asking for a free ride, just an opportunity.
     
    I was the recipient of grants and student loans and I worked my way through school to pay the rent. As a result, I am a registered architect, associate in a firm and a contributor to society. Without the grants and loans, I have no idea where I'd be.
    post edited by Cosmos - 2013/07/05 23:02:53
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