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Old 12-13-2018, 05:39 AM
 
16,906 posts, read 18,059,172 times
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You guys need to remember that there is a huge overhead in a college. The tuitions also pay for that. So itís not all professors pay. There are coaches making millions of dollars.

As far as degrees there are plenty of people without degrees that make a lot more than a lot people with degrees. A in demand job will pay better than one thatís not in demand or easily trainable or mundane. Anywhere not just in colleges.

I donít think that people should be able to get out of loans easily period. I think that making a agreement where you borrow money you should have to pay it back. Or the consequences should be a lot tougher than they are. Unfortunately there is less and less stigma from having a BK. Thatís the reason more prople default. Because itís the easy way out. Iíll live beyond my means and I can always file Bk. Take that portion off the table, or make it tougher and banks can be tighter with credit you wouldnít have this issue. Or it would be a lot less of a issue. The only reason people arenít defaulting on student loans is because they canít.
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Old 12-13-2018, 05:55 AM
 
Location: Long Island, NYUSA, Earth, Solar System, Milky Way.
6,935 posts, read 2,032,595 times
Reputation: 1745
Quote:
Originally Posted by Electrician4you View Post
You guys need to remember that there is a huge overhead in a college. The tuitions also pay for that. So it’s not all professors pay. There are coaches making millions of dollars.

As far as degrees there are plenty of people without degrees that make a lot more than a lot people with degrees. A in demand job will pay better than one that’s not in demand or easily trainable or mundane. Anywhere not just in colleges.

I don’t think that people should be able to get out of loans easily period. I think that making a agreement where you borrow money you should have to pay it back. Or the consequences should be a lot tougher than they are. Unfortunately there is less and less stigma from having a BK. That’s the reason more prople default. Because it’s the easy way out. I’ll live beyond my means and I can always file Bk. Take that portion off the table, or make it tougher and banks can be tighter with credit you wouldn’t have this issue.. Or it would be a lot less of a issue. The only reason people aren’t defaulting on student loans is because they can’t.
Just one comment here re: bold:

This may be stating the obvious although please bear with me: banks, financial institutions, any 'for profit' enterprises et al are in business to make a profit period & full stop.

There is no incentive for such to be "tighter with credit" because that's how they generate profit.

This was/is demonstrated in the 'for profit' prison industry, & when financial institutions became involved in providing 'food stamps'. Here's just one piece describing:

JP Morgan’s Food Stamp Empire
How the welfare state became a profit center. By Peter Schweizer.

https://www.thedailybeast.com/jp-mor...d-stamp-empire

Quote:
“This business is a very important business to JP Morgan,” Christopher Paton, the company’s managing director of treasury services, told Bloomberg News in 2011. “It’s an important business in terms of its size and scale. We also regard it as very important in the sense that we are delivering a very useful social function. We are a key part of this benefit delivery mechanism. Right now volumes have gone through the roof in the past couple of years or so … The good news from JP Morgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.”
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Old 12-13-2018, 06:48 AM
 
6,262 posts, read 3,358,516 times
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Quote:
Originally Posted by lvmensch View Post
Because the cost of tuition was reasonably stable in the decades before the federal loans. My children for instance all attended various UC or Cal State colleges with no loans financed by me. My stray actually went through that and a Phd with no support other than her own earnings. She got free room and board from us though her master degrees but did most of her doctorate without help..late in it she was married and that carried her.
In other words, there is no evidence linking the two?
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Old 12-13-2018, 06:52 AM
 
6,262 posts, read 3,358,516 times
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Quote:
Originally Posted by Bob-Man View Post
Because colleges will always get their money back from the government, regardless if the borrower repays or defaults. So the schools can afford to raise their prices as high as they please.
So...there is no evidence of federal student loans causing tuition to increase?

You guys need to look up the term "cause and effect." Just because you don't like something, doesn't mean it causes something else you don't like. LOL.

No...you need some evidence of one causing the other. It doesn't even make sense that the loans would cause an increase in tuition. In fact, logic says it would have the opposite effect.

Now, it's obvious that increased tuitions would cause an increase in the amount of federal student loans, since the loans PAY the tuition. But tuition does not increase because loans pay the tuition vs. someone else. That's illogical.
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Old 12-13-2018, 07:01 AM
 
Location: The analog world
16,490 posts, read 9,097,237 times
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A complicating factor is that states began pulling back on funding for public universities in conjunction with rising costs. Weirdly, that has made the cost of an education at some state universities more expensive for students than one at similarly ranked private schools due to scholarship money. It is very difficult for even exceptional students to get much in the way of merit or needs-based aid from a public university. My kid gets $1k/year in merit aid from a state university. It's better than nothing, and she's grateful, but it barely covers her books. If we weren't in a position to pay her tuition plus a good portion of her R&B, she'd come out of her program in a very deep financial hole.

Last edited by randomparent; 12-13-2018 at 07:12 AM..
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Old 12-13-2018, 07:54 AM
 
3,904 posts, read 2,143,180 times
Reputation: 6788
Quote:
Originally Posted by Electrician4you View Post
You guys need to remember that there is a huge overhead in a college. The tuitions also pay for that. So itís not all professors pay. There are coaches making millions of dollars.

As far as degrees there are plenty of people without degrees that make a lot more than a lot people with degrees. A in demand job will pay better than one thatís not in demand or easily trainable or mundane. Anywhere not just in colleges.

I donít think that people should be able to get out of loans easily period. I think that making a agreement where you borrow money you should have to pay it back. Or the consequences should be a lot tougher than they are. Unfortunately there is less and less stigma from having a BK. Thatís the reason more prople default. Because itís the easy way out. Iíll live beyond my means and I can always file Bk. Take that portion off the table, or make it tougher and banks can be tighter with credit you wouldnít have this issue. Or it would be a lot less of a issue. The only reason people arenít defaulting on student loans is because they canít.
You and I know that is BS, pure BS. There has always been ďoverheadĒ but the issue has been the funding mechanism in America has given Colleges/Univeristies carte blanche to raise rates however they would like. Essentially Univeristies knew they had an almost endless demand curve that was almost perfectly price inelastic. This has made these institutions fat, inefficient, and borderline upon bankruptcy when the funding spicket if finally shut off.

The Univeristies as we know it may go the way of the dodo bird when one professor can record a virtual class and teach thousands at their home watching an iPad in their pajamas. They really only should have to fund the cost of the content creation and administration of grading /exams. Not the football stadium, not the college presidentís mother in law Lexus payment, and not the safe space free of hate speech zones.
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Old 12-13-2018, 09:20 AM
 
328 posts, read 169,115 times
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Quote:
Originally Posted by oceangaia View Post
And that is true so what is the objection to suspending a loan rather than forgiving it? If he never wins the lottery or turns his life around, it keeps getting re-suspended until it is dismissed upon his death. But there is just no good reason to dismiss a debt permanently when their situation is not permanent.

Humans respond to incentives - economics 101.

At any point when an individual will get a job offer, he/she will evaluate the net income (after paying student loan installments) and decide whether to take the job or keep doing the odd job for cash and keep deferring the student loan.
I'm not supporting forgiving student loan, or deferring. I'm all for adjusting loan amounts based on degree value. The universities will quickly learn how to adjust tuition based on degree values in the marketplace.
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Old 12-13-2018, 09:50 AM
 
328 posts, read 169,115 times
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I did not read through the whole thread but did anyone mention how the student loan is originated and distributed? The federal loan amount is small ($5.5k or so per year) that is given directly to student. The student is either under 18 when applying for college, or slightly above 18 with almost no credit history, so they can't get much private loan. The biggest chunk one can get is through "parent plus" loan that are given to student with parent as a co-signer.
Why are parents co-signing without evaluating the degree prospect or educating their kids on the real life impact it will have on their take home earning? Because in most cases they don't know themselves, and there is no collateral or credit score required for parents to take on these loans. So a parent with no assets and $30k yearly income can borrow as much as needed (all the way upto the full tuition minus federal loan) without any check and balance.

This enabled the universities to charge whatever they want and the parents to borrow whatever they want. The legislators knew this will happen and therefore removed the bankruptcy clause, they don't give a damn to what it will do to low income people and their kids with useless degrees or incomplete college.
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Old 12-13-2018, 10:53 AM
 
Location: Boston
5,466 posts, read 1,592,062 times
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what kind of lousy parents allows their kid to borrow a six figure sum for a college education. There are much cheaper alternatives.
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Old 12-13-2018, 11:53 AM
 
2,477 posts, read 2,173,192 times
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Totally agree the loan system needs to be reformed.

If you are a C student and want to take out a 60k in loans for a gender studies degree, then fine... but the risk assessment should dictate that student it far more likely to struggle paying it back than an A student getting a chemical engineering degree.

The interest rates each student gets on those loans should reflect that risk.

Also, any program which forgives student loan debt is a nonstarter for me. There are way too many people who are being "crushed" by student debt who seem to have no problem finding the money for alcohol, tattoos, iPhones, in-town lofts, luxury student apartments, etc. If you are going to forgive Joe Irresponsible's debt because he lived outside his means in his 20s and kept deferring payments, then what are you going to do for Jane Responsible who lived at home for a couple years after school and paid off her loans in full after 10 years?
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