The Dr has 1/2 million in student loans!

[Texas Proud]

I think you took a long way around the barn to reach the same conclusion that I and these other writers did- the responsibility needs to be put on someone who is in a position to understand what it means and who benefits from the lending. The school obviously does benefit (as does any firm whose product gets easy credit financing on someone else’s risk), as does the lender, as does the federal bureaucracy involved as does the student. No matter how perfect and cool and worldly wise and responsible all you tough love advocates think you were at age 18, I know I didn't know jack, and I know many young people don't either. So all parties get benefit, but one party is not truly able to understand the risk by virtue of being barely out of childhood. So which party gets left holding the entire bag? You guessed it, the naive 18 year old student borrower.

I am not quite there with you... I know that I did not want to run up a debt that I could not pay when I was 18... no amount of talking from some high priced school would have changed my mind (to be fair... none came a calling...)

I disagree that the schools are getting the benefits of this arrangement.. sure, more student can come with the easy credit... but most of the high priced ones are so oversubscribed they would fill their quota anyhow...

The banks can take a hit... but as mentioned.. who gets hit Using this girl as an example... should Citi suck up all of the bad debt since they loaned her the 'last' amount of money?

Also... should the lending institutions get involved with the degree choice? I mean, lending money for a degree in underwater basket weaving is not a good choice... but an engineer, finance or IT field might be the way to go...



Opps... just wanted to add.... what about the parents Sure... they want the best for their kids... but really... there is an adult in the equation .... so it is not only the 18 YO making a decision...

 

[harley]

I am not quite there with you... I know that I did not want to run up a debt that I could not pay when I was 18... no amount of talking from some high priced school would have changed my mind (to be fair... none came a calling...)

I disagree that the schools are getting the benefits of this arrangement.. sure, more student can come with the easy credit... but most of the high priced ones are so oversubscribed they would fill their quota anyhow...

The banks can take a hit... but as mentioned.. who gets hit Using this girl as an example... should Citi suck up all of the bad debt since they loaned her the 'last' amount of money?

Also... should the lending institutions get involved with the degree choice? I mean, lending money for a degree in underwater basket weaving is not a good choice... but an engineer, finance or IT field might be the way to go...

I'm not saying that a person who chooses to take the loan should be able to easily walk away from it. Just that there should be more of an effort to make sure the student (and his/her parents) understand what they are getting into beforehand. Wouldn't have hurt in the housing market over the past 1o years either. Honest, ethical lending shouldn't be that rare.

 

[haha]

no one forces anyone to go to college. it's a choice to sign on the dotted line, regardless of outside pressure and forces. removing the consequences (both good and bad) of one's choice benefits no one in the long term.

Give me a break. Being forced at gunpoint is not the only way young people can be led. They have spent 12 years in a school system which really has no endpoints other than college, or failure. We are almost alone in the world at not tracking students. Should a mediocre student who has an IQ of 100 go to college.? Of course not. Are they led to believe that college is what any self respecting young person should aspire to? Of course they are. Should they be able to resist this subtle and not so subtle pressure? Maybe, but it is hard to choose to be a non-person.

Many universities exist only to capture fees from students. Almost any advisor in the academic system, at any level, will suggest more schooling as an answer. Why not? Are surgeons against operations, or lawyers against lawsuits, or furniture salesmen against couches? Not in my admittedly limited experience.

The parent is often relatively powerless against this array of supposedly better informed opinion. At any rate, many parents have their hands full just keeping their children from sniffing glue and having group sex at age 15.

Ha

 

[harley]

At any rate, many parents have their hands full just keeping their children from sniffing glue and having group sex at age 15.[/COLOR]

Ha

I think this deserves it's own thread.

 

[ronocnikral]

Give me a break. Being forced at gunpoint is not the only way young people can be led. They have spent 12 years in a school system which really has no endpoints other than college, or failure. We are almost alone in the world at not tracking students. Should a mediocre student who has an IQ of 100 go to college.? Of course not. Are they led to believe that college is what any self respecting young person should aspire to? Of course they are. Should they be able to resist this subtle and not so subtle pressure? Maybe, but it is hard to choose to be a non-person.

Many universities exist only to capture fees from students. Almost any advisor in the academic system, at any level, will suggest more schooling as an answer. Why not? Are surgeons against operations, or lawyers against lawsuits, or furniture salesmen against couches? Not in my admittedly limited experience.

The parent is often relatively powerless against this array of supposedly better informed opinion. At any rate, many parents have their hands full just keeping their children from sniffing glue and having group sex at age 15.

Ha

while you may have read gunpoint, i alluded to no firearms.

regardless of how a student is led/taught by parents, teachers, mentors, religious figures etc, they are the ones ultimately responsible for their actions.

while some students may plead ignorance, they are given an amortization schedule with the loan or at minimum shown what your monthly payment will be at signing. you are also required to take exit counselling before graduation to enure you understand repayment terms. i hardly feel students are dooped. I seem to remember yearly statements as well, but that may have just been me keeping up with what i borrowed. i know we could all go online and see what we had borrowed at anytime. also, i feel the fin aid people at my school were very fair. In fact, i would get upset at them quite often b/c they would give me scholarships and i would go out and get another one outside the school - which in turn they would take away one of the previous awarded scholarships from me to give to another student. i was essentially earning a scholarship for another student.

regardless, the process is hardly unfair or predetory.

my dept head always said, if your starting salary => loan debt, it makes sense (or cents).

 

[haha]

while you may have read gunpoint, i alluded to no firearms.

regardless of how a student is led/taught by parents, teachers, mentors, religious figures etc, they are the ones ultimately responsible for their actions.

while some students may plead ignorance, they are given an amortization schedule with the loan or at minimum shown what your monthly payment will be at signing. you are also required to take exit counselling before graduation to enure you understand repayment terms. i hardly feel students are dooped. I seem to remember yearly statements as well, but that may have just been me keeping up with what i borrowed. i know we could all go online and see what we had borrowed at anytime. also, i feel the fin aid people at my school were very fair. In fact, i would get upset at them quite often b/c they would give me scholarships and i would go out and get another one outside the school - which in turn they would take away one of the previous awarded scholarships from me to give to another student. i was essentially earning a scholarship for another student.

regardless, the process is hardly unfair or predetory.

my dept head always said, if your starting salary => loan debt, it makes sense (or cents).

This might be true, if the society would immediately begin telling people from before kindergarten- you are on your own, all so-called helpers are actually predators, do not bend over in public or you will be eff'd, if you trust anyone you are a stupid fool, kill or be killed, and most of all anything you see in the media, whether a public service announcement, an advert, a product placement, or an endorsement by an astronaut is a dirty stinking lie and you are a moron to believe it.

And especially, do not let yourself respond to any advert that says "be all that you can be"' or you might well get shot in the spinal cord and then dumped on your own resources.

Understand that your society hates you as a person, your only value is as a producer and consumer.

I think with this fairly accurate long term preparation what you suggest might be fair.

 

[ronocnikral]

I think you took a long way around the barn to reach the same conclusion that I and these other writers did- the responsibility needs to be put on someone who is in a position to understand what it means and who benefits from the lending. The school obviously does benefit (as does any firm whose product gets easy credit financing on someone else’s risk), as does the lender, as does the federal bureaucracy involved as does the student. No matter how perfect and cool and worldly wise and responsible all you tough love advocates think you were at age 18, I know I didn't know jack, and I know many young people don't either. So all parties get benefit, but one party is not truly able to understand the risk by virtue of being barely out of childhood. So which party gets left holding the entire bag? You guessed it, the naive 18 year old student borrower.

maybe if we all start pooling our money, we can all benefit from everyone's success and share the burden of other's mistakes. this way the naive will be protected.

i think with the kind of protection for the naive and unknowing, what you suggest is fair.

 

[Texas Proud]

I'm not saying that a person who chooses to take the loan should be able to easily walk away from it. Just that there should be more of an effort to make sure the student (and his/her parents) understand what they are getting into beforehand. Wouldn't have hurt in the housing market over the past 1o years either. Honest, ethical lending shouldn't be that rare.

I can agree with that... but in the end, do you think it will change anybody's decision Once you are there... ready to sign the paperwork is someone going to say 'yea, you are right... there is no way I can afford this loan'


This has nothing to do with student loans... but back when I did taxes... there was a customer that we wanted to get rid of... they were a royal PITA and did not have enough money to afford a top notch firm... so the manager had them in his office and was telling them in as nice a way that they should go someplace else... they wanted to stay... so he tried 'we will have to charge you 5 times what you are paying now if you want to stay with us'.... the guy said 'sure'... the wife looked at him like he was stupid... it wasn't until the manager tacked on some other fees that they decided to move on... people don't want to admit that they can not afford something right then... so it has to be sooner in the process



OR... just don't allow them to borrow money... even if they are willing to pay it back...

 

[Texas Proud]

I was thinking about the responses that I have read... and something else popped into my head...

We are talking about COLLEGE STUDENTS... they are supposed to be a bit smarter than your average 18 or 19 yo...

Sure, we all know that some people are smart in certain ways and dumb as a doornail in others (sorry docs for this next comment)... most all of the doctors I ever met (well, to be more correct, the ones I met that talked about finance or I did taxes for) could not take care of their finances.... the paid soemone else to do it for them...

But... they are smarter and should do a bit of research to know what they are getting into...

 

[haha]

maybe if we all start pooling our money, we can all benefit from everyone's success and share the burden of other's mistakes. this way the naive will be protected.

i think with the kind of protection for the naive and unknowing, what you suggest is fair.

You may not have noticed, but today's practice actually winds up costing the innocent taxpayer, not what I am suggesting. You can't get blood from a turnip, and many of these loans will never be repaid. My plan would only have those who underwrite these loans, and sell them, and get sent on nice Caribbean vacations for bird-dogging, stand between the borrower and the taxpayer.

I don't know if you personally profit from this shady business, or if you are just naive, or if you are a victim of Stockholm Syndrome, but your boilerplate Rush Limbaugh statements do not make sense.

Ha

 

[ronocnikral]

You may not have noticed, but today's practice actually winds up costing the innocent taxpayer, not what I am suggesting. You can't get blood from a turnip, and many of these loans will never be repaid. My plan would only have those who underwrite these loans, and sell them, and get sent on nice Caribbean vacations for bird-dogging, stand between the borrower and the taxpayer.

I don't know if you personally profit from this shady business, or if you are just naive, or if you are a victim of Stockholm Syndrome, but your boilerplate Rush Limbaugh statements do not make sense.

Ha

is that suppose to be a personal attack?

defending against someone's straw man arguments is a bitch isn't it?

unfortunately for the both of us, the federal gov't has elected to be involved in all this. and i agree the taxpayer shouldn't be left footing the bill. i just think everyone should be accountable for their actions. like if i leave the rake laying on the ground and i step on it a bonk my head, it's my fault, not the person who designed/sold/made the rake.

perhaps the federal gov't should stop backing student loans, that way the private lenders will be a little more wise to whom they lend money to. i fear loan amounts to those wanting to study music theory will differ from those wanting to study IT. and that wouldn't be fair...now would it? is that rush limbaugh boilerplate? not that I have listened to him in a couple of years.

 

[Martha]

I was incredibly naive as a beginning college student. Many people seem to want to say that at 18, you have arrived. You stepped over the line from kid to adult. You are now responsible for each and every decision you make will color the rest of your life, even if you were encouraged and maybe even pushed into that decision by those who you are taught to respect.

When I was eighteen you could get caught with some dope or make a few mistakes and the consequences were not so harsh as they are today.

Some of you would be shocked by decisions I made at that age. I was impulsive. Inexperienced. Trusting. I certainly didn't understand money much less amortization schedules. It took time to become a responsible contributing member of society.

 

[FUEGO]

The bottom line is that student lending is a difficult policy issue. Make obtaining loans too onerous and the result is qualified but poor students won't attend college that they would otherwise benefit from due to lack of financial resources. Make loans too easy to obtain and you continue the status quo of large debt levels for people who will never likely be able to repay the loan.

Education is a great equalizer in socioeconomic terms. But it can also impoverish those who indulge in it at great expense in terms of opportunity costs and life long debt burdens.

 

[Dog]

It's Not Just Mortgages

Read this article the same day as the article about mortage defaults.


(borrowed close to $100k for a degree in religious and women's studies)

placing-the-blame-as-students-are-buried-in-debt: Personal Finance News from Yahoo! Finance

 

[BTravlin]

"She recently received a raise and now makes $22 an hour working for a photographer. It's the highest salary she's earned since graduating with an interdisciplinary degree in religious and women's studies."

It's no wonder she's having a tough time getting a decent paying job to pay off the student loans. What the h*ll was she thinking?

 

[beowulf]

Nothing personal, but the value of the job being sought after the degree should be weighed against the cost of the degree. Unless your family is independently wealthy, there is no point in going into deep debt to go to Harvard to get a degree in elementary education where the average pay is about $40K a year. I know very few people who take this into consideration for their children when they go to college. Since our kids were interested in fields that were not going to pay a lot, but did require degrees, they were given a choice - go to a state school and we pay or figure out where to get the difference for somewhere else. They both went to state schools, went on to get master's degrees and are doing well on their own - but not making the kind of money necessary to pay off a $100K college debt.

I don't feel any sympathy for those who make dumb choices.

 

[stephenandrew]

Hasn't a law passed or been proposed that will limit the amount that people will have to pay back on their student loans? I recall hearing the President reference this in his last State of the Union Speach.

Also, I think the reporter's perspective that the school bears some (not all, not most--some) responsibilility for this situation rings true. Colleges are not (or should not be) like car dealers--I'd like to think they have a higher purpose than just making money. They are supposed to be educators, and part of that role should be to be transaprent--make people aware of what their students' financial commitments may be when they graduate.

 

[clifp]

I read some encourage information from Michelle Singletary's column today about student loans.

In 2008, about two-thirds of students graduating from four-year colleges and universities had student loan debt averaging $23,200, according to data analyzed by the Project on Student Debt, an initiative of the nonprofit Institute for College Access & Success.

First I am impressed that 1/3 of kids graduate from college debt free, Dave Ramsey would be proud. 24K while certainly a lot of money at say 8% over 15 years is $230/month and seems affordable (assuming you can find a job of course.)

It certainly would affordable for this woman on her $22/hour job. On the other hand borrowing 100K for woman and religious study is just plain stupid.

 

[BTravlin]

Hasn't a law passed or been proposed that will limit the amount that people will have to pay back on their student loans? I recall hearing the President reference this in his last State of the Union Speach.

I hope not as our budget is beyond busted already.

 

[Martha]

Hasn't a law passed or been proposed that will limit the amount that people will have to pay back on their student loans? I recall hearing the President reference this in his last State of the Union Speach.

Also, I think the reporter's perspective that the school bears some (not all, not most--some) responsibilility for this situation rings true. Colleges are not (or should not be) like car dealers--I'd like to think they have a higher purpose than just making money. They are supposed to be educators, and part of that role should be to be transaprent--make people aware of what their students' financial commitments may be when they graduate.

A link in my post above describes the restructuring option for certain federal student loans which could result in a portion of the balance being written off, if you make the required restructure payments over 25 years (10 years for public service jobs). Payments each year will vary based on your income. Given the 25 year term and payments based on income which should go up, good chance most who follow through on the restructuring will pay in full, Student Aid on the Web

 

[meierlde]

AS has been pointed out there is one career path that gets you an education in exchange for time, the military. If you already have a bachelors and stay in you will get a free advanced degree at some point. Also of course the officer experience will help in getting a business admin job. In fact I wonder if a person who has risen to major or above has not gotten most of the good stuff from an mba on the job, as well as likley an advanced degree in the process.

 

[Westernskies]

Hasn't a law passed or been proposed that will limit the amount that people will have to pay back on their student loans? I recall hearing the President reference this in his last State of the Union Speach.

WTF? Why would you limit repayment to a percentage of what was borrowed? Do you have a link to this entitlement plan? I could use 200K with a repayment cap of, say 50K... I'll use it to repay my tuition in the school of hard knocks, aka my 401K plan.

 

[Emeritus]

WTF? Why would you limit repayment to a percentage of what was borrowed? Do you have a link to this entitlement plan? I could use 200K with a repayment cap of, say 50K... I'll use it to repay my tuition in the school of hard knocks, aka my 401K plan.

I believe you are referring to programs at :
IBRinfo :: What are these new programs?Public Service Loan Forgiveness

Public Service Loan Forgiveness is a new program for federal student loan borrowers who work in certain kinds of jobs. It will forgive remaining debt after 10 years of eligible employment and qualifying loan payments. (During those 10 years, the Income-Based Repayment (IBR) plan can help keep your loan payments affordable.)
Who can get Public Service Loan Forgiveness? This program is for people with federal student loans who work in a wide range of "public service" jobs, including jobs in government and nonprofit 501(c)(3) organizations.

 

[ronocnikral]

^ not mention if one could pair that loan forgiveness with some kind of cushy gov't pension, it may not be a bad way to go!

 

[Emeritus]

Government jobs are open to anyone who want to fill the bill.