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Old 11-10-2011, 12:01 PM   #61
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I'd like to read more about that Hamlet. Where did you get those numbers? I was aware of the <5% number for college grads in general but not the 9.3% for college grads under 25. It still sounds like the percentage of recent grads in trouble over their loans should be in low single digits. It would be the portion of the 9.3% unemployed who have large loans.
I agree with Hamlet, especially the stat about jobs for recent grads, as there are not a lot openings period, unless you have several years experience and a good story to tell. Make no mistake, its a horrible jobs market right now what ever your circumstance may be.
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Old 11-10-2011, 12:13 PM   #62
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My cousin married a tenured college prof. He teaches 2 classes , 2 days a week for a 6-figure salary. I only see tuition going higher until college is cost prohibitve.

Forgot to mention he's been teaching the same 2 classes for 5 years and is a scratch golfer.
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Old 11-10-2011, 12:28 PM   #63
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My cousin married a tenured college prof. He teaches 2 classes , 2 days a week for a 6-figure salary. I only see tuition going higher until college is cost prohibitve.

Forgot to mention he's been teaching the same 2 classes for 5 years and is a scratch golfer.
I talked to a student who works at the fitness center, I go to. He said he was taking an online class at his college, and it cost $25 more a credit hour than an actual class. I would have thought technology would make online learning cheaper than attending a bricks and mortar building. Guess I was wrong.
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Old 11-10-2011, 12:43 PM   #64
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Isn't there a maximum % of your salary you have to pay on your loan Might not be for private student loans, but I think it is for fed loans...
There are multiple government programs that tie your loan repayment to a percentage of your income. One is the Income Based Repayment (IBR) plan. You pay 15% of your income above a threshold amount for your loans. The threshold is 150% of the Federal Poverty Level, or about $16000 if single and $33000 for a household of 4. And those are AGI figures. So the guy earning $10 per hour makes about $20k a year and would presumably have an AGI around that level. This means he is paying $600 a year or $50 a month on his loans, whether it is $25000 or $125000. This applies to federal loans, not private loans. After 25 years of paying per this formula, they forgive all debt. 10 years if you work in government or non-profit.

The Obama administration recently proposed an executive order that would reduce the 15% to 10% and the 25 year repayment period to 20 years. My understanding is that the better income based repayment terms would cover only new debt incurred after passage of the executive order, with old debt grandfathered under the old IBR plan.
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Old 11-10-2011, 01:53 PM   #65
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I agree with Hamlet, especially the stat about jobs for recent grads, as there are not a lot openings period, unless you have several years experience and a good story to tell. Make no mistake, its a horrible jobs market right now what ever your circumstance may be.
I'm missing your point. I do agree that the recent grads with no jobs and high debt are in a bit-o-trouble, and my posts say that. But what do you suggest we do? Forgive the loans? Extend payments? If we forgive or extend the loans, what do we do for folks just starting college now so they get the same deal?

It's one thing to commenserate with no job / big loan folks. I do. But what do we do about it? What can we afford to do about it for the long term, especially if there is no tie between cheap loans likely to have a percentage forgiven and the needs of the economy in terms of job skills?
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Old 11-10-2011, 02:01 PM   #66
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I'm missing your point. I do agree that the recent grads with no jobs and high debt are in a bit-o-trouble, and my posts say that. But what do you suggest we do? Forgive the loans? Extend payments? If we forgive or extend the loans, what do we do for folks just starting college now so they get the same deal?

It's one thing to commenserate with no job / big loan folks. I do. But what do we do about it?
I thought you indicated you were not aware about the 9.3% number, so I was just agreeing with Hamlet's point on that.

To me the real root cause and answer to all of this has to be focusing on jobs creation, and not how we forgive or extend student loans. It kind of seems a bit like the medical issue, lets extend healthcare benefits to everyone but not pay any attention to cost containment which would make such coverage more affordable.
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Old 11-10-2011, 02:14 PM   #67
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I thought you indicated you were not aware about the 9.3% number, so I was just agreeing with Hamlet's point on that.

To me the real root cause and answer to all of this has to be focusing on jobs creation, and not how we forgive or extend student loans. It kind of seems a bit like the medical issue, lets extend healthcare benefits to everyone but not pay any attention to cost containment which would make such coverage more affordable.
OK. I wasn't disagreeing with Hamlet. And the fact that fresh out college grad unemployment is higher than overall college grad unemployment passes my common sense test. I was just hoping Hamlet would say where the number came from so I could look at it further.

Still, only the portion of the 9.3% college grad unemployed that has significant loan levels has a loan repayment issue. And of those only the folks whose loans don't qualify for the protections FUEGO points out in his informative post (above) need to sweat it. I think that would be only a few percent of all recent college grads.

I think the bulk of the folks whining about their loans are folks with jobs but without a plan and the will to get busy and pay it back. I don't envy folks in that position. You graduate, naive and idealistic, ready to get on with a career and a decent life style and instead you LBYM big time and pay back your loan. Ugh. You delay starting a family, buying a house, getting that new Miata you've been dreaming about, etc., etc. None of it sounds good....... and I've been there and done that. That's why the schools and lenders who benefit from the loans need to have an attitude adjustment just like mortgage lenders have gotten.
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Old 11-10-2011, 02:46 PM   #68
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My 9.3% number came from here--

The class of 2011: Young workers face a dire labor market without a safety net | Economic Policy Institute

I'm not 100% on the source they used, but the rest of their numbers make it look like they pulled it out of the unemployment reports.

Your missing a bigger point though.

The official rate of employment includes a large number of under-employed graduates that do not have much money to pay back loans. I'm not able to find any hard numbers, but the issue is much bigger than just the graduates that are officially unemployed. My younger brother graduated from college with a marketing degree and manages a Burger King. He's not one of the 9.3%, but if he had 25k in student debt he would have serious trouble paying it back.

There are also a large number of people who start college but don't finish. They are in an ugly financial spot too. I have no idea how large that group is, but given graduation rates I believe it is significant.

Twenty years ago, I was able to pay for a degree from a good public university (U of Minn) by working after hours and in the summer. It was feasible to graduate without debt if you worked hard and lived cheap. My tuition was about $3k per year. One of the reasons it was low was that the state was paying about two thirds of the cost.

Nowadays, tuition at that institution is $13k. One of the reasons it has gone up so much (not the whole reason), is that the state only pays about one third of the cost now. We've steadily cut the state's share of the cost over the last twenty years.

The deal is much, much worse for today's kids than it was for me. I'm not neccesarily advocating anything in particular to fix that, but trying to pretend that it hasn't changed and that today's kids are just whiners is a load of bull.

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Still, only the portion of the 9.3% college grad unemployed that has significant loan levels has a loan repayment issue. And of those only the folks whose loans don't qualify for the protections FUEGO points out in his informative post (above) need to sweat it. I think that would be only a few percent of all recent college grads.

I think the bulk of the folks whining about their loans are folks with jobs but without a plan and the will to get busy and pay it back. I don't envy folks in that position. You graduate, naive and idealistic, ready to get on with a career and a decent life style and instead you LBYM big time and pay back your loan. Ugh. You delay starting a family, buying a house, getting that new Miata you've been dreaming about, etc., etc. None of it sounds good....... and I've been there and done that. That's why the schools and lenders who benefit from the loans need to have an attitude adjustment just like mortgage lenders have gotten.
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Old 11-10-2011, 03:04 PM   #69
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My cousin married a tenured college prof. He teaches 2 classes , 2 days a week for a 6-figure salary. I only see tuition going higher until college is cost prohibitve.

Forgot to mention he's been teaching the same 2 classes for 5 years and is a scratch golfer.

The couple of friends that I have that are close to scratch golfer have to practice a lot to maintain their game. My tenured professor friend often only teaches one class a semester, which barely leaves him time to run his Venture capital fund. I am surprised that you cousins hubby with such a demanding work load that he has time to maintain his golf game.
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Old 11-10-2011, 03:09 PM   #70
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My 9.3% number came from here--

The class of 2011: Young workers face a dire labor market without a safety net | Economic Policy Institute

I'm not 100% on the source they used, but the rest of their numbers make it look like they pulled it out of the unemployment reports.
That was an interesting read, thanks.
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The deal is much, much worse for today's kids than it was for me. I'm not neccesarily advocating anything in particular to fix that,
And that's one of the problems....... The situation looks very different when you actually try to come up with solutions. Personally, I think the protections detailed in FUEGO's post (above) are adequate. There's no doubt that these are tough times in the economy and any student aid that isn't linked directly to vocational opportunities needs to be rethought.
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but trying to pretend that it hasn't changed and that today's kids are just whiners is a load of bull.
You really stretched my comments, or your interpretation of them, to relate that to me. A dishonest way to participate in a discussion. I'm not pretending anything. I just think that when people borrow money, they should understand the risks and rewards and have an aggresive, solid plan to pay it back. When somebody has a $25k loan, payable over many years, and a $35k - $40k income, I understand (and I stated that) it's going to take LBYM to pay it back. That's not fun. But it's what you do. If you're unemployed, that's a problem, and I stated that. But I think the unemployed recent grads who have large loans are only a small percentage of the people making a fuss over having to pay the loans back. Much of the discussion seems to assume that all the young people moaning about their loans are unemployed. That's not true.
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Old 11-10-2011, 03:26 PM   #71
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Youbet said - I just think that when people borrow money, they should understand the risks and rewards and have an aggresive, solid plan to pay it back. When somebody has a $25k loan, payable over many years, and a $35k - $40k income, I understand (and I stated that) it's going to take LBYM to pay it back. That's not fun. But it's what you do. If you're unemployed, that's a problem, and I stated that. But I think the unemployed recent grads who have large loans are only a small percentage. Much of the discussion seems to assume that all the young people moaning about their loans are unemployed. That's not true.

I believe that is the essence of the problem that young students face, or wont face. My daughter is the perfect example. She has no concept of how difficult it will be to pay $20 k off on a 30k job. I set her up a plan, that would get her out of college debt free. My ex and I are willing two pay 2 years university, and cover her 2 years at juco. She only wants to go this year at juco and go three years at the university and borrow the money herself. Im hoping she gives in, because she has no concept of taxes, and debt right now. I feel it is at least my obligation to try to save her from herself. Besides it isnt like she is a social creature anyways preferring to stay at home. Im sure she can learn how to binge drink her junior and senior year, without starting next year.
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Old 11-10-2011, 03:51 PM   #72
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I believe that is the essence of the problem that young students face, or wont face. My daughter is the perfect example. She has no concept of how difficult it will be to pay $20 k off on a 30k job. I set her up a plan, that would get her out of college debt free. My ex and I are willing two pay 2 years university, and cover her 2 years at juco. She only wants to go this year at juco and go three years at the university and borrow the money herself. Im hoping she gives in, because she has no concept of taxes, and debt right now. I feel it is at least my obligation to try to save her from herself. Besides it isnt like she is a social creature anyways preferring to stay at home. Im sure she can learn how to binge drink her junior and senior year, without starting next year.
Mulligan, your daughter is a lucky young woman to have you as her dad. That doesn't mean she's going to listen to you (been there, done that!) but I sure agree with how you're handling it. And I agree that sometimes you just can't tell 'em or make 'em understand.

I think the 2 yr juco + 2 yr State Univ plan is very sound. It's popular here because we live near a top-rated juco that has excellent transfer relationships with the Univ of Ill and the various state regional schools.

I know even the juco's are expensive these days. I graduated with an Associates degree from our local juco and as I recall classes were about $25 per credit hour back in the "olden days." Now they're 4 or 5 times that amount so you can spend several thousand a year on tuition.

I had a good news - bad news situation with my son. The bad news is that he turned down a full ride schlorship at a top 25 engineering school and accepted a much smaller schlorship from a top ten engineering school. I still cringe from that. He has done well with the degree he got but a the time the difference in cost seemed high. The good news is that he then co-op'd (worked every other semester) which helped him financially. So, with a little help from his old man , he made it out loan free although it took five years with the co-op program.

I hope your daughter sees the light and manages to stay away from loans too. But your story does remind me that the youngsters aren't always as pragmatic or sensible as their parents.
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Old 11-10-2011, 04:43 PM   #73
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You did call them whiners, but the tone of my comment was not called for. Sorry.

There are two issue I have with what you say below--

1. I think that expecting 18 year olds to buck the societal expectation that they must go to college and that the debt is worth it is optimistic. When I was in college, most of the people around me were pretty stupid with money. I expect that that hasn't changed. What has changed is that the consequences for that stupidity are much more severe nowadays.

2. You're looking at the people who graduate and get a job paying 35-40k as the norm. In the current environment, you're a pretty lucky graduate to be in that position.

Take a look at this article, and more importantly, the study that it is based off of (there is a link in the article)--

http://www.nytimes.com/2011/05/19/bu...y/19grads.html

Granted the study was small sample, it was a survey, etc, but it is more detailed and recent than anything else I've seen. It is the only thing I've seen that looks at recent graduates since the recession.

Only 53% of the graduates were employed full time. The median income was $27k for the people graduating in 2009-2010. Almost half of the people working were in a job that didn't require a college degree (which probably means dead end and low-paying). We've got an army of people graduating and working the same dead end jobs that they were working before they graduated.

25k of student debt is a manageable burden when you make 40k. It's a real problem when you make 27k (or less, like half of the people who graduated in 2009/2010).

This may get better as the economy recovers. If it doesn't, I think things are going to come apart at the seams.



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You really stretched my comments, or your interpretation of them, to relate that to me. A dishonest way to participate in a discussion. I'm not pretending anything. I just think that when people borrow money, they should understand the risks and rewards and have an aggresive, solid plan to pay it back. When somebody has a $25k loan, payable over many years, and a $35k - $40k income, I understand (and I stated that) it's going to take LBYM to pay it back. That's not fun. But it's what you do. If you're unemployed, that's a problem, and I stated that. But I think the unemployed recent grads who have large loans are only a small percentage of the people making a fuss over having to pay the loans back. Much of the discussion seems to assume that all the young people moaning about their loans are unemployed. That's not true.
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Old 11-10-2011, 05:48 PM   #74
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I'm missing your point. I do agree that the recent grads with no jobs and high debt are in a bit-o-trouble, and my posts say that. But what do you suggest we do? Forgive the loans? Extend payments? If we forgive or extend the loans, what do we do for folks just starting college now so they get the same deal?

It's one thing to commenserate with no job / big loan folks. I do. But what do we do about it? What can we afford to do about it for the long term, especially if there is no tie between cheap loans likely to have a percentage forgiven and the needs of the economy in terms of job skills?
Don't know what the answer is...but 1 trillion plus in outstanding student loan debt sounds daunting. Currently, it can not be wiped out in a bankruptcy. At least not until that law changes.
However there is a student loan forgiveness program...(of sorts)

http://www.articles.moneycentral.msn...ent-loans.aspx
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Old 11-10-2011, 05:56 PM   #75
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You did call them whiners, but the tone of my comment was not called for. Sorry.
This is what I said:

"I think the bulk of the folks whining about their loans are folks with jobs but without a plan and the will to get busy and pay it back. I don't envy folks in that position."

I did not call all students with loans "whiners." I referred to the folks who were whining as people with a job but without a plan and the will to get busy and pay it back. Some of the recent grads, IMO, are whining and that's what I think about those who are. You seem intent on generalizing what I said.

Perhaps we just disagree on what constitutes a whiner. When I hear students who have excellent job offers interviewed on public radio saying that it's unfair that they'll be asked to postpone a new car (as a graduation self-reward), paying for a big wedding or starting a family because they'll be paying student loans, I call that whining. I don't envy their position, and I've been there so I understand completely. But I don't remember whining about it so much.
Quote:

There are two issue I have with what you say below--

1. I think that expecting 18 year olds to buck the societal expectation that they must go to college and that the debt is worth it is optimistic. When I was in college, most of the people around me were pretty stupid with money. I expect that that hasn't changed. What has changed is that the consequences for that stupidity are much more severe nowadays.
I haven't said anything to disagree with that position. I said that lenders and schools, the folks who benefit directly from these loans, need to have an attitude adjustment like the mortgage lenders have gotten. Loans need to be made to look scary to students, not as an easy way to afford college. Then those taking loans will be primarily those who understand the benefit and have a plan to pay it back
Quote:

2. You're looking at the people who graduate and get a job paying 35-40k as the norm. In the current environment, you're a pretty lucky graduate to be in that position.

Take a look at this article, and more importantly, the study that it is based off of (there is a link in the article)--

http://www.nytimes.com/2011/05/19/bu...y/19grads.html

Granted the study was small sample, it was a survey, etc, but it is more detailed and recent than anything else I've seen. It is the only thing I've seen that looks at recent graduates since the recession.

Only 53% of the graduates were employed full time. The median income was $27k for the people graduating in 2009-2010. Almost half of the people working were in a job that didn't require a college degree (which probably means dead end and low-paying). We've got an army of people graduating and working the same dead end jobs that they were working before they graduated.

25k of student debt is a manageable burden when you make 40k. It's a real problem when you make 27k (or less, like half of the people who graduated in 2009/2010).

This may get better as the economy recovers. If it doesn't, I think things are going to come apart at the seams.
The point I've been trying to make, but am apparently failing at, is that unemployed graduates will not be able to make their payments, underemployed graduates will struggle with their payments and fully employed students will have to LBYM to pay off their loans. Just as it was wrong to make mortgages available to folks who couldn't afford the houses they purchased, it's been wrong to make student loans so readily available to students.

Those graduates who have significant loans but are fully employed in their field need to get serious, LBYM and pay them off.

I don't know specifically what to do about the others. But I do know if we let them completely off the hook, it will send a message to those we ask to pay that career success doesn't necessarily pay off.

Perhaps the protections outlined by FUEGO in his post (above) will be adequate. In the meantime, no big weddings/honeymoons, no post graduation international vacations, no new Miatas! Pay off the loan!
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Old 11-10-2011, 06:08 PM   #76
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I believe that is the essence of the problem that young students face, or wont face. My daughter is the perfect example. She has no concept of how difficult it will be to pay $20 k off on a 30k job. I set her up a plan, that would get her out of college debt free. My ex and I are willing two pay 2 years university, and cover her 2 years at juco. She only wants to go this year at juco and go three years at the university and borrow the money herself. Im hoping she gives in, because she has no concept of taxes, and debt right now. I feel it is at least my obligation to try to save her from herself. Besides it isnt like she is a social creature anyways preferring to stay at home. Im sure she can learn how to binge drink her junior and senior year, without starting next year.
Mulliagan I agree with your philosophy and attempts here. I've tried many times to save my own from themselves. Sometimes it works ..sometimes it doesn't.

I think one of the biggest wake up calls for the current young generation (18 to 23) was watching their parents get laid off. From some of my limited obervations, the children of otherwise upper middle class parents who had every financial need/want ( little and big) suddenly became more responsible...and wanted to help their family by making better decisions and choices that affected the financial health of the family.

Also...I'm not reading any more articles about the problems with generation x. Remember them? There were/are the generation who dictated to their employers want THEY wanted instead of the other way around.

We had a generation X nephew who after traveling the world for about 6 years post college came back and suddenly wanted a job in the family business. Not only did he want it, he expected it. After many conversations it was clear to "most of us" he wanted a soft landing. He was making demands about what he wanted rather than the other way around and without a true understanding of what he was NOT bringing to the table. The rest of us want/ed him to work for another company for 5 years. Play by someone else's rules first. Be managed by someone else first. He had worked one Christmas season answering the phones and seemingly thought this entitled him to skip the rest of the learning curve....and go right into being a Sales Manager with no sales experience of any kind. Ha! He was NOT brought on board. At least not yet. His mother is still trying.
Didn't mean to hijack the thread...but one thing led to another .
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Old 11-10-2011, 06:22 PM   #77
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Yes, and the point I was trying to make is that the percentage of unemployed and underemployed among recent college graduates is much, much higher than the numbers in the general unemployment statistics, and the general starting salary numbers from five years ago are not what recent college graduates are receiving.

That makes the debt loads that might have seemed reasonable in 2006 a much bigger problem.

The scary thing is is that having the college degree, the debt load, and a mostly crappy job is still a better result than kids who are not going to college are getting.

Those kids are really out of luck.


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The point I've been trying to make, but am apparently failing at, is that unemployed graduates will not be able to make their payments, underemployed graduates will struggle with their payments and fully employed students will have to LBYM to pay off their loans. Just as it was wrong to make mortgages available to folks who couldn't afford the houses they purchased, it's been wrong to make student loans so readily available to students.
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Old 11-10-2011, 06:58 PM   #78
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Old 11-10-2011, 06:58 PM   #79
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When supposedly savvy financial planners made some god-awful decisions and ended up losing their homes as recently discussed here, it's understandable that incoming college students aren't able to foresee exactly what paying off student loans means. And readily available student loans meant colleges jacked up their tuitions to match. And college tuitions seem to increase more than any other cost. And colleges are big in the marketing business--even back when our kids were h.s. jrs. and srs., the materials that came in the mail every day were overwhelming.

The 2 years community college, 2 years state school model seems like it should allow more students to graduate without so much debt--after your daughter's first year at the junior college, Mulligan, she's likely to stay there for the second year.

I could see interest on student loans being tax-deductible or even a credit--that might spur new graduates to start paying them off.
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Old 11-10-2011, 07:50 PM   #80
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Quote:
Originally Posted by Bestwifeever View Post
I could see interest on student loans being tax-deductible or even a credit--that might spur new graduates to start paying them off.
I believe that under current law, student loan inteerst is deductible above the line- ie. it decreases AGI, usually dollar for dollar, but under certain income conditions only part of it gets deducted. There is a worksheet for this.

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