Guilt and Student Debt

imoldernu

imoldernu

Gone but not forgotten
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Yours to make the connection between guilt and student debt... or maybe not.
The article will speak to those who have children to educate, and those who have already incurred student debt.

The second part... not included in the article: If the debt is not or cannot be repaid, what are the implications for the economy... and in the long run, your federal taxes?

The Average 25-Year Old's Debt Has Grown 91% in the Last Decade -- Will Borrowers Learn to Push Back? | Alternet

Am not including a quote, as there are too many major points.

Forbes on the $1 trillion student debt.
http://www.forbes.com/sites/halahtouryalai/2014/02/21/1-trillion-student-loan-problem-keeps-getting-worse/
 
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Sorry..... don't feel like what is being proposed is the solution to the problem.. they seem like the radicals they are....



BTW, I do think that the education system is more to blame than the banks... when we talk about student debts, that includes all those 'colleges' that you see advertised on daytime TV.... they will sign up anybody just to get paid tuition and fees... knowing that the service they provide is almost worthless... even the legit colleges and universities have raised their tuition to such high levels that it is hard to believe...
 
That was quite a biased article depicting the banks as evil (probably a large portion of the teacher/professor pension funds are invested in banks by the way)

It is sad that we live in a society that puts a gun to your head and forces you to sign the student loan paperwork.
 
Just for the record, I wouldn't suggest that banks are evil. If I were a banker, my objective would be to use all legal methods available to bring the maximum return for my stockholders.
Have to look elsewhere... to legislators on one side, or millions of deadbeat kids and the parents who co-signed, on the other side.
Thus the question about the interpretation of "guilt". :cool:
 
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I read the first article until I saw the quote from Granny Warren. Funny how she wants to freeze the loan rate rather than cut HER +300K/yr job for teaching ONE class a Harvard.

THERE's the problem.

In full disclosure my cousins husband is running the same racket at a state university ... 130k for teaching 2 classes 2 days a week ... same classes taught for nearly a decade.

So who's guilty?
 
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The student debt situation in the U.S. is both travesty and tragedy.

One of the primary drivers of rapidly escalating college costs is the easy availability of funding. Pretty much anyone who can fog a mirror can get a student loan.

And then on the other hand you have the broad math and financial illiteracy in this country. Kids (and their parents) just keep singing those forms every semester, piling up the loans, without so much as a passing thought as to how they'll ever repay them. The notion of higher education as the inevitable path to success has been a social mythology forever. The number of students who ever do an ROI analysis of their expected degree field is infinitesimal.

I don't think there will ever be any quick solutions. But you could start to solve it by mandating extremely low rates of interest, capping student loan debt loads (perhaps by degree), and enabling discharge in bankruptcy - measures which would reduce the attractiveness of this naive group of borrowers to rapacious lenders.

Ultimately, the answer is financial literacy. You make that a core curriculum subject, starting in elementary school.
 
Jager said:
I don't think there will ever be any quick solutions. But you could start to solve it by mandating extremely low rates of interest, capping student loan debt loads (perhaps by degree), and enabling discharge in bankruptcy - measures which would reduce the attractiveness of this naive group of borrowers to rapacious lenders.
Click to expand...

Interesting solution.

Alternatively you could mandate extremely low tuition rates by colleges, cap professor salaries (perhaps by number of classes taught), and enable the school to be sued if the student does not find a job in their chosen degree.

Textbooks and housing near colleges are also two very expensive items. We should mandate that textbooks can cost no more than $30 and house rentals no more than 1.2x that of other areas without nearby colleges.
 
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As long as the government gives students big loans (which they may or may not be able to pay off) colleges and universities have little incentive to bring down tuition and fees to reasonable levels. Part of the problem is the system. Our local public university seems to be able to raise millions for all sorts of building projects and monuments to various egos. But, money to keep student tuition reasonable? They don't seem to care about that.

We are starting to see some push back. When students graduate with loans as big as a young person's first mortgage - or maybe bigger - people start wondering and asking questions.
 
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tryan said:
I read the first article until I saw the quote from Granny Warren. Funny how she wants to freeze the loan rate rather than cut HER +300K/yr job for teaching ONE class a Harvard.
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Tyran, I don't doubt your story. But, at least in my neck of the woods, many classes are now taught by adjunct faculty who are paid much less. I personally know of several people who teach full-time including summer classes and don't even make $40,000 a year. In my area, with high housing costs, that is a pitiful salary.[-] Meanwhile administrators, who have never taught anything to anybody are making up to 3 times that salary. :mad:[/-] <-- INOPERATIVE.
 
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pb4uski said:
And of what relevance to what administrators are worth is the fact that they have never taught?
Click to expand...

My point is that the increasing cost of higher education is rarely the cost of faculty salaries, at least not among those I know who teach at the college level. None of them have relieved salary increases anywhere near the rate that tuition is going up. If my comment about administrators distracts us from that point, I will declare it 'inoperative'. :D
 
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Chuckanut said:
My point is that the increasing cost of higher education is rarely the cost of faculty salaries, at least not among those I know who teach at the college level. None of them have relieved salary increases anywhere near the rate that tuition is going up. If my comment about administrators distracts us from that point, I will declare it 'inoperative'. :D
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I'm there as well. We've got a private college, a community college, and a public university in my city. We went out a room to a friend who teaches adjunct at the public university and makes less than I do, with no college education or real responsibility. He teaches English and is constantly grading papers, talking with students, and otherwise working at home. I have no idea how hard he works at the uni, but he works more than I do just while he's off.

My friends over at the community and private uni are around the same salary range, but I can't speak for how much homework they do.
 
To further go with my earlier post....

I saw a commercial about some technical training for auto mechanics....

Their tag line was "4 out of 5 our our students have found jobs".... :(

IOW, only 80% of our students were even able to find a job after spending big money on learning.... and they might not even be working in a job where we trained them :facepalm:



I agree that student debt has gotten out of hand... I have nephews and nieces that are in big debt... one is going to become a doctor and will have close to $150K of debt when he graduates.... my sister said his backup plan was to leave the country if he does not make it.... and he was not kidding.... I know that he is smart enough to make it, but not all people with this level of debt are...
 
Jager said:
Ultimately, the answer is financial literacy. You make that a core curriculum subject, starting in elementary school.
Click to expand...
Of your proposals, I like this one best. But, are poor financial choices due to lack of knowledge, or to lack of discipline? Teaching people more about finances and how to be (materially) prosperous is a good thing and something that we should do regardless, but it will have a better chance of having an impact if it's accompanied by a change in values. That's a tougher row to hoe.
 
People choose to rack up college debt. It's not necessary to go into debt to attend college, and a degree from Harvard is not a birthright. For people who are heading into potentially high-paying careers, some debt might make sense. How much is something people can only measure for themselves.

I think there's tremendous value in a higher education, separate from the possibility of a higher income. I also think that people who are seduced by this and fail to think critically about the cost/benefit ratio of debt and college on the front end of the process will -- inevitably -- have to think about it on the back end.

In my experience, a lot of the student loan debt that my former classmates racked up was due to living expenses. Most of my former classmates had substantially higher standards of living than I did, even though we were in the same program with similar employment prospects (amazing karmic pay, but beans-and-rice on this sphere). Many of them had substantial debt when they graduated -- as well as nice clothes (that is, clothes without holes in them), cars, and comfortable apartments. I saved thousands by being flexible and intensely frugal with just about everything. The point is: we hear a lot about the cost of "college," but for many people a substantial amount of that cost is living expenses, and these are highly flexible, especially for young people with no kids.

Both DH and I got bachelor's degrees with no debt. I got a master's degree with only $1000 in credit card debt (car repair emergency that happened during my last year of school). Given that I got my degree in public health, even that $1000 debt was a little risky for me (average starting salaries in my field are abysmally low). DH took out loans for his master's degree (in computer science at a top private university) and had them paid off within a couple of years of after graduating. I worked all through school and lived really lean. DH didn't work in his programs but did when he got out. It worked out great for us.

These articles often also ignore the truly amazing education that can be had for nearly nothing at community colleges. Many of them are a screaming deal, for at least the first two years of school, at least.

A related and highly enjoyable read about this very subject is "Walden on Wheels" by Ken Ilgunas. I highly recommend it to people who are pondering these issues.
 
It would be interesting to see how much correlation there is between innumeracy and student debt levels. And credit card debt levels, for that matter.
 
The story goes a little deeper then what I've read so far. No question, our higher education story is complex. Most of the worlds other Countrys' send their best students to our colleges for their education. And, most of the great colleges have enormous trusts that reduce tuition for the majority of their needy students. Some Professors may abuse the system, I don't disagree; others may only teach a class or two but they are heavy into research and their research grants more than cover their salaries and expenses. On the othe hand I believe if you're gong to have kids and you THINK they may want to go to college, start saving the day their born......I did for all three of mine. All went to good schools, alll found good jobs and all are saving for the educations of their kids. I truly believe that our world leadership in inovation over the past century has been a result of all the research done at the University level. But I don't think their is a true understanding of our system and, yes, there are far too many examples of abuse. Me? I never went to college......too long a story to tell here.....but I taught at University, one class for many years.....very low pay......have been on the board of trustees at another University......and feel, overall, that the majority of Colleges do the best they can and each is unique so that we gain the advantage of their intellect/research which contributes to our world leadership as a Country.
 
What seems missing to me is a connection between what is borrowed, and how the funds will be repaid. If, in order to get a loan, a student had to provide a plan for repayment based on future potential salary, many students would not qualify, or at least see that the low salaries available would preclude repayment.
 
Love the calls I get from the alumni association to donate to the university ... now that I know the salaries of some of the tenured professors, that's not happening.

My niece graduated from a private high school with a BILLION dollar endowment. Seems to me that thing should be throwing off enough cash to run the school for FREE for EVER. But instead tuition is +30k/year.
 
My niece graduated from a private high school with a BILLION dollar endowment. Seems to me that thing should be throwing off enough cash to run the school for FREE for EVER. But instead tuition is +30k/year.

Heh, good point. I graduated from a very well-endowed college. I get the constant "begging-for-money" calls and mails and it irks me. I paid my tuition. I took out loans. I paid them back. I even earned a merit-based scholarship my freshman year and had the college reduce my aid grants by the same amount, such that it had no beneficial effect for me.

I have a friend who went to the same school and has similar views on money and wealth. He made a great comment one day, saying that our college asking for money from us is like having a rich uncle who invites you to lunch and asks you to pick up the tab. No thanks.

I also agree with the comments regarding tuition inflation. Easy government loans are a big part of the problem. Schools endlessly building, expanding, and upgrading the quality of life (fancy dorms, massive sports facilities, etc) are also part of the problem. In my opinion, aside from the elite schools, this trend is going to crash and burn within the next 20 years. Online learning - and hybrid online/in-person learning - is going to reduce costs and revolutionize college.

-progmtl.
 
I really wonder what is the reason for college education outpacing inflation by so much (I understand what some are saying, that loans drive up demand). But there must be more to it?

I'm told K-12 has gone up because all the special programs have increased so much. I can kind of see that, but it does not seem so apparent for colleges.

-ERD50
 
progmtl said:
Heh, good point. I graduated from a very well-endowed college. I get the constant "begging-for-money" calls and mails and it irks me. I paid my tuition. I took out loans. I paid them back. I even earned a merit-based scholarship my freshman year and had the college reduce my aid grants by the same amount, such that it had no beneficial effect for me.

I have a friend who went to the same school and has similar views on money and wealth. He made a great comment one day, saying that our college asking for money from us is like having a rich uncle who invites you to lunch and asks you to pick up the tab. No thanks.

I also agree with the comments regarding tuition inflation. Easy government loans are a big part of the problem. Schools endlessly building, expanding, and upgrading the quality of life (fancy dorms, massive sports facilities, etc) are also part of the problem. In my opinion, aside from the elite schools, this trend is going to crash and burn within the next 20 years. Online learning - and hybrid online/in-person learning - is going to reduce costs and revolutionize college.

-progmtl.
Click to expand...

Hey! GREAT first post. Had to check to see if I had written it, and then forgotten about it. Am almost afraid to find out if we went to the same college. It was very small (800 students) when I attended, in the 50's but it has an endowment of nearly a Billion today.
And paying one's way through... Yeah.. You BET... 20 hrs a week, washing dishes, monitoring, and teaching... Also, a full tuition scholarship that the colleges cashed in on with a little payback of advertising from my athletic national recognition.
Also... ditto on the expansion... Just incredible... The swimming pool was replaced with the newest state of the art olympic quality... electronic signing/tiiming/scoreboard $500K alone... But that wasn't the most expensive part of the deal... The old pool, built in 1929 was center campus. The decision was made to convert this relatively small building into a recital hall... Architects fees $3 million... eventual cost another $15 million. Seats about 150. That's just one of many, many new arenas and fieldhouses... skating rinks, science buildings etc... for a school with less than 2000 students. These costs for building alone. The ongoing maintenance cost can only be guessed at.

That said, the school provides many millions in scholarships, and has the best post college ROI in terms of the human product. Overall, it's well managed and looks to be stable for many decades to come. Exceptional when compared to similar schools.

In my opinion, aside from the elite schools, this trend is going to crash and burn within the next 20 years. Online learning - and hybrid online/in-person learning - is going to reduce costs and revolutionize college.
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I have a similar "rant" somewhere on this forum. Took some friendly flack on the tech based learning. Not a popular belief for most here, I think, but with 30% of the trillion dollars in student loans in arrears or uncollectible, there's no way to support the campus infrastructure and still stay in the race for education parity.

:flowers:
 
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ERD50 said:
I really wonder what is the reason for college education outpacing inflation by so much (I understand what some are saying, that loans drive up demand). But there must be more to it?

I'm told K-12 has gone up because all the special programs have increased so much. I can kind of see that, but it does not seem so apparent for colleges.

-ERD50
Click to expand...
Have you been on a campus in recent years? I did the college tours with my kids about 5 years ago. There is an amazing construction war that seems to be going on between all the colleges. Whoever builds the most new buildings apparently wins.

I think this is all an unintended consequence of the whole aid program. The government keeps raising the amount kids can borrow and the colleges keep raising the tuition to match. That pays for the new buildings and what kid wants to go to a college without air conditioning, etc.? Hence, all colleges must play this game. Government mandated paperwork has also added another layer of administrators.
 
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