Does anyone think “help” is coming for student loans? (highest, salary)

[mattywo85]

Originally Posted by K-Luv

The only protections student loans need are those concerning fair collection practices, fixed APRs, more repayment options that may be utilized if the borrower finds him/herself in economic difficulties, and perhaps a few more. Other than that, student loan debt should not be discharged. If student loan debt could be easily discharged than it would diminish the value of a college degree. Also, how can you take away an education from someone? The reason why new homeowners and current homeowners get financial breaks if you have a mortgage, the bank owns your home. On one hand it makes sense for the banks to keep you on your mortgage: you are giving the bank money, and, the bank ultimately owns the property. If you cannot keep up with your mortgage, the bank takes back their house. It's a win-win for them.

How can you do that with a college education? Can the fact that you went to college be completely erased? No. You may be struggling now, but ten years from now your college education may begin to come through for you. That is why it is not fair to discharge student loan debt unless it can be proved to be 100% necessary (as is already the policy).

Yes, you can put your student loan debt onto your credit cards...then have the credit card debt discharged. Ironic, sure, but why would you want to do that? And, if you have $10s of thousands of dollars in credit, you more-than-likely would have the financial means to handle a large student loan debt to begin with.

By discharging your credit card debt you are going to affect your credit rating and chance of getting new lines of credit for at least 7 years. It would make more sense financially to just pay down the loan as best you can each month.

The bubble will not burst.

Lol, so by not being able to pay and having limited, or no, options you go into default and ruin your credit anyway and still have to pay. Defaulting runis your credit quite similar to bankruptcy by the way. The reason student loan bankruptcy laws were changed were simply because it was being "abused"(hence the name bankruptcy protection act)....no proof of this exists. Credit card debt was the highest debt for a long time, was it ever abused....nope. Bankruptcy was taken away so tuition could continue to rise, therefore the likelihood of students needing a loan would increase. I can discharge my payday loan, healthcare bills, credit cards, etc. I mean healthcare is one corrupt SOB and they still allow bankruptcy. Wouldn't you say getting a necessary surgery is more important then a degree?

Look at it this way, young college students graduate in a poor economy like the one we are in, jobs are limited and they don't find anything, months go by and eventually default comes in, now its on your credit report. You look for a property to rent/purchase and a re deny because of your default. One type of debt affects the next.

Returning bankruptcy wouldn't diminish the value but would strengthen policies and laws as to who should get said loans and tuition costs would decrease, strain out the weak and improve competition.

[K-Luv]

Originally Posted by mattywo85

Lol, so by not being able to pay and having limited, or no, options you go into default and ruin your credit anyway and still have to pay. Defaulting runis your credit quite similar to bankruptcy by the way. The reason student loan bankruptcy laws were changed were simply because it was being "abused"(hence the name bankruptcy protection act)....no proof of this exists. Credit card debt was the highest debt for a long time, was it ever abused....nope. Bankruptcy was taken away so tuition could continue to rise, therefore the likelihood of students needing a loan would increase. I can discharge my payday loan, healthcare bills, credit cards, etc. I mean healthcare is one corrupt SOB and they still allow bankruptcy. Wouldn't you say getting a necessary surgery is more important then a degree?

Look at it this way, young college students graduate in a poor economy like the one we are in, jobs are limited and they don't find anything, months go by and eventually default comes in, now its on your credit report. You look for a property to rent/purchase and a re deny because of your default. One type of debt affects the next.

Returning bankruptcy wouldn't diminish the value but would strengthen policies and laws as to who should get said loans and tuition costs would decrease, strain out the weak and improve competition.

True, defaulting on your student loan will effect your credit score, but it is easier to get back on track. At least in my experience.

There is a difference between getting a necessary medical procedure and getting a college degree. The bottom line is that no one needs a college degree in order to survive. People get college degrees out of want: want of a better/higher paying job; want of entering a specific career/field; etc. For me that is the crux of the argument: the college degree is not necessary in order to survive.

As for inflation and raising costs of attending college: most of these are false. There is a columnist over at Forbes who wrote a pretty good blog post about it...and he is either currently writing a book (or has written a book) describing the three main fallacies relating to raising tuition costs. The most prominent among them is that tuition is rising faster than inflation. That is simply not true. There have been studies over the years that indicate tuition raises pretty much inline with inflation and when you look at most yearly tuition increases that are in the neighborhood of 3 to 5% a year, well, isn't that on par with the typical yearly COL raise of 3 to 5% that most employed people receive? Of course there are outliers, but those are extreme cases: not the norm.

The idea that tuition is rising faster than inflation is an illusion caused by the price of goods going down, or remain stable. The reason for that is simple, new technology and practices have enabled manufacturers to produce products at a cheaper rate. Look at the computer. A $300 cheapo laptop these days would have cost upwards of $10,000 twenty years ago. Twenty years from now we will have computers that are 100x, maybe even 1000x as powerful, yet will cost a fraction of the cost of a similar computer today (assuming that such a computer can even be produced today).

You also need to keep in mind that a university is not a cheap thing to run and maintain. On one hand, with more students attending college now than ever, colleges/universities need to expand. They need to add more space to accommodate the increase student population. Also, when a student receives a college education they are being taught be experts in the field(s). Outside of Communist Russia, America seems to be the only country where parents/students want the best education...at the cheapest costs. We blame educators for a failing educational system yet on the same side of the coin believe they should be paid pennies for their service/teaching.

As for student loans: prior to the Reagan Administration, colleges/universities where heavily subsidized by the Fed. Gov.. Reagan, in an effort to shrink Government and reduce spending removed this subsidy and replaced it with the Fed. student loan program that we know of today. When this happened it opened the door to college to many students who would have otherwise been unable to attend college and it snowballed. All of a sudden poor[er] students who were otherwise qualified be could not afford college financially were able to attend.

But, this did not cause college tuition to rise. And if it did, then why didn't the Fed. subsidies cause tuition to raise when in effect it had the same net worth to any particular university in the past? The Fed. Gov. allocates X amount of money to each college/university that that college/university may then use to dole out financial aid. Not the other way around. If 1000 students applied for financial aid at a particular school, for example, and the school only had enough allocations for 100, then the other 900 are going to be SOL. It is not like all 1000 are going to get aid and then school just sits back and collects the money, lining their pockets. It does not work that way. That is why you are told to apply as early in the year as possible to get the most aid available to you, before the allocation runs out.

Anyways, as I wrote in my previous post, a college education is not something that can be taken away from someone, yet, despite the economy, may be something that can be used in the future. Is it fair to allow someone to discharge a student loan through bankruptcy only to have that same education work for their benefit in the future when job prospects and the economy improve? No. A better solution would be to either cap monthly payments to an amount lower than what is available today if the borrower makes under X amount a year, and, to offer long-term interest-free deferment until a time when the borrower is able earn X amount a year.

But hey, this is just my opinion.

[K-Luv]

I should also point out that many (most?) universities practice price discrimination to give the illusion they are worth the money, yet, in order to remain competitive, the advertised price (that you pay) is not the full price to attend that college. The discrepancy (around 30%) is usually picked up by donations from alumni associations.

[Elle Oh Elle]

Originally Posted by K-Luv

I should also point out that many (most?) universities practice price discrimination to give the illusion they are worth the money, yet, in order to remain competitive, the advertised price (that you pay) is not the full price to attend that college. The discrepancy (around 30%) is usually picked up by donations from alumni associations.

This is true of everything. Do you really think a $50 meal is worth $50 per person? Why not just buy the ingredients for $10 and make the same meal at home? That $900 mattress wouldn't be $900, except you need assembly, shipping, and advertising fees.

I came here because I took a couple of classes awhile ago and I found out that I owe the school $2.6K (I did know I was in debt for student loans, but wasn't sure of the exact amount, they told me it's $2.6K). Reading some of these posts have not helped make me any happier. I should be happy I don't owe $50k+ like some people, but...

[killer2021]

There will be little to no help for student loans.

In fact, the government views student loans as a "strength" to help repay the federal deficit/debt. You can never discharge student loans (unless for very very serious conditions) and student loans are considered the creme de la creme in terms of loans. Better than mortgages. The only help you will receive is to prevent you from outright stop paying them. As far as principal reductions, it will never happen.

Plus statistically, college grads make more than non-grads. Why should the government help them repay their loans? They can afford to repay them over time considering they make more money than non-grads.

[sheena12]

I can say this much - help with student loans and ANY TYPE of GOVERNMENT BACKED FINANCIAL AID is NOT coming from the Republican party. They hate big government in any form. I need big government to help my children attend college.

So, if you as I do; want these loans and grants to remain available to middle class students, do not vote for Romney.

He has enough money to send you and your children off to college. But he won't.

We need more financial aid not less.

[NJBest]

Originally Posted by sheena12

I can say this much - help with student loans and ANY TYPE of GOVERNMENT BACKED FINANCIAL AID is NOT coming from the Republican party. They hate big government in any form. I need big government to help my children attend college.

So, if you as I do; want these loans and grants to remain available to middle class students, do not vote for Romney.

He has enough money to send you and your children off to college. But he won't.

We need more financial aid not less.

I'm not defending Romney in any way but I disagree that we need more financial aid for higher education. Right now there's a lot of noise in higher education. Too many students are getting free or cheap money to attend schools when the schools/programs aren't value-added or the students are not deserving.

We need to do the following:

1. Hold parents responsible for providing their students with the tools they need to fund and attend college.
2. Award financial aid only to promising students of need (generally, those with good merit).
3. Reduce grants, reduce interest rates.
4. Fix grade inflation. This is important because grade inflation reduces the ability to determine who is really college-worth vs who is not based on merit.

Relying on financial aid to put your kids through college is sad. It's great that the aid is available if needed but why not just focus on having them do good in school and get a free or subsidized ride?

[brocco]

Originally Posted by sheena12

I can say this much - help with student loans and ANY TYPE of GOVERNMENT BACKED FINANCIAL AID is NOT coming from the Republican party. They hate big government in any form. I need big government to help my children attend college.

So, if you as I do; want these loans and grants to remain available to middle class students, do not vote for Romney.

He has enough money to send you and your children off to college. But he won't.

We need more financial aid not less.

just because they don't want the goverment to be in charge of it doesn't mean they don't want it to happen. kids can get help from private sources

Originally Posted by NJBest

I'm not defending Romney in any way but I disagree that we need more financial aid for higher education. Right now there's a lot of noise in higher education. Too many students are getting free or cheap money to attend schools when the schools/programs aren't value-added or the students are not deserving.

We need to do the following:

1. Hold parents responsible for providing their students with the tools they need to fund and attend college.
2. Award financial aid only to promising students of need (generally, those with good merit).
3. Reduce grants, reduce interest rates.
4. Fix grade inflation. This is important because grade inflation reduces the ability to determine who is really college-worth vs who is not based on merit.

Relying on financial aid to put your kids through college is sad. It's great that the aid is available if needed but why not just focus on having them do good in school and get a free or subsidized ride?

1. Strikes me as creating a caste system. We already have less inter-generational economic mobility than most other western countries. I don't think we really want to have even less.
2. Agreed. We need to get rid of the ridiculous idea that everyone needs to go to college. There are way too many people attending universities who have no business being there, and who are unlikely to ever finish.
3. I might agree with this. Ideally, everyone rises or falls on their own merits, in which case how much money your parents have shouldn't determine whether you get a grant or a loan. I'm not a big fan of having financial aid tied to parents' income at all. Just because someone's parents can contribute something, doesn't mean they will.
4. Not gonna happen. SAT/ACT scores are the only thing we have that even approaches a reasonable national measure.

[edwardianlady]

Originally Posted by sheena12

I can say this much - help with student loans and ANY TYPE of GOVERNMENT BACKED FINANCIAL AID is NOT coming from the Republican party. They hate big government in any form. I need big government to help my children attend college.

So, if you as I do; want these loans and grants to remain available to middle class students, do not vote for Romney.

He has enough money to send you and your children off to college. But he won't.

We need more financial aid not less.

Thanks for helping me to decide to vote for Romney.The government has no business in handing out grants to anyone regardless of their financial status.If any awad is given at all ,it should be from the school thats based on grades or,other resources not the American taxpayer .