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Is it unreasonable for future lending to be based on fields of study that will give the most bang for the buck? For example, cap loan amounts for art history majors while providing more grant money to engineering or medical studies? Obviously as our need will change and so can the distribution of federal funds. This does fly in the face of the idea that college is for everyone and it doesn't matter what you study, but maybe it isn't and it should.
Is it unreasonable for future lending to be based on fields of study that will give the most bang for the buck? For example, cap loan amounts for art history majors while providing more grant money to engineering or medical studies? Obviously as our need will change and so can the distribution of federal funds. This does fly in the face of the idea that college is for everyone and it doesn't matter what you study, but maybe it isn't and it should.
May not be a bad idea but one would have to have enormous predictive powers to know what fields are going to work out in the long run.
My suggestion would be to reduce the cap in stages per year to $15,000, then $10,000. The schools would have trouble validating their tuition rates without government support in the form of monopoly-money loans.
Those who stupid enough to take it in the first place, should pay for it. Sorry, no free lunch. Especially to the Liberal Arts' ones.
You do realize that many liberal arts degrees are in high demand right now, right? Math, Physics, Biology, computer science, and psychology, just to name a few...
There's nothing wrong with taking student loans if you need it to make up some of the cost of attending college... but you can't go crazy with them.
You do realize that many liberal arts degrees are in high demand right now, right? Math, Physics, Biology, computer science, and psychology, just to name a few...
There's nothing wrong with taking student loans if you need it to make up some of the cost of attending college... but you can't go crazy with them.
The problem that I see is that student loans often have no winners except the colleges. What they allow is the college to set tuition levels higher than otherwise. Let me explain.
When one is accepted to a typical college and can't self-fund the tuition the student receives a four-part financial package:
Family contribution;
School scholarship;
Work-study; and
What's expected from a loan
When one goes up the others go down. The family contribution is usually calculated on a formula based on the family's assets and income so that won't change much. As far as work-study the amount of hours a student can work on-campus and still handle the curriculum doesn't change much. So the floating factors are the school's contribution and the loan.
So if the student can borow more that comes off what the school tosses in. The school's contribution comes from moneys that are paid by affluent students. So that has its limits.
Schools have tended to get rather fat administratively and in building plant over the years. That seriously needs to change. Families of wealthier students are not printing presses. This is what I meant above with part of my earlier post:
Quote:
Originally Posted by jbgusa
My suggestion would be to reduce the cap in stages per year to $15,000, then $10,000. The schools would have trouble validating their tuition rates without government support in the form of monopoly-money loans.
Some of the amounts are Sisyphean. I have a potential client with about $275,000 in student loans who has no assets and an income of maybe $40,000 per year. And she lives in the Chicago area.
There is no way that loan gets repaid unless the borrower wins Powerball.
To me this is a good argument for making student loans dischargable in bankruptcy again. They shouldn't be EASILY dischargable, but when the debt is clearly hopeless what's the point of pretending it will ever be repaid? And putting some risk back onto the lenders would give them an incentive to be more cautious about making these loans.
And if student loans become harder to get as a result of this change, the administrative bloat and "student lifestyle enhancements" that have become so rampant on many campuses and which are causing overall costs to skyrocket won't be sustainable.
I haven't the time to read this whole thing, so I will just say this (even if redundant)...
As to the loans being used for other things, I am not concerned. Just so long as they get paid back. And speaking of that, I think the federal loans are not dischargeable in bankruptcy and I'd like to see the non federal loans like that as well. No disrespect to the kids, but with other choices not taken available to them, they have a lifetime to pay them off and it's a good lesson to learn.
To me this is a good argument for making student loans dischargable in bankruptcy again. They shouldn't be EASILY dischargable, but when the debt is clearly hopeless what's the point of pretending it will ever be repaid? And putting some risk back onto the lenders would give them an incentive to be more cautious about making these loans.
And if student loans become harder to get as a result of this change, the administrative bloat and "student lifestyle enhancements" that have become so rampant on many campuses and which are causing overall costs to skyrocket won't be sustainable.
Here is why I will disagree with you.
Students have options. Like me, they can go to a juco for 2 years and work to help pay for university classes. I went to juco for 2 years and then worked my way through with minimal loans. I paid back those loans. Granted I didn't finish college until I was 30, but such is life.
To simply say, get loans and then if life isn't rosy declare bankruptcy seems both foolish and teaches the wrong life lesson. I'd rather teach responsibility and accountability than otherwise.
And if student loans become harder to get as a result of this change, the administrative bloat and "student lifestyle enhancements" that have become so rampant on many campuses and which are causing overall costs to skyrocket won't be sustainable.
Here's the problem with those "lifestyle enhancements", schools without them (dorm rooms instead of suites, shower rooms instead of individual suite bathrooms, no upgraded lounges) are losing population. Also, not requiring Freshmen, at least, to live on campus has played into that. Private housing is almost always more expensive than college dorms.
I don't want to start a generational war here but some of this may be tied into unrealistic expectations of what one "deserves to have" at age 18. Which can also be placed back onto the parents.
My college (admittedly I've been out 40 years) is now back to requiring 1st and 2nd year students to live on campus and banning cars for Freshmen. Which was the standard when I went.
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