Reasons For College Debt (degrees, costs, schools, career)
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I just finished watching it. It's interesting how they were comparing the effects of these easy gov't loans to subprime loans with housing. I saw an interview with the host and they pointed out how college cost were becoming more expensive because of these easy loans. When students are getting this easy gov't loan money colleges can charge whatever because market forces that would normally control cost are removed.
I just finished watching it. It's interesting how they were comparing the effects of these easy gov't loans to subprime loans with housing. I saw an interview with the host and they pointed out how college cost were becoming more expensive because of these easy loans. When students are getting this easy gov't loan money colleges can charge whatever because market forces that would normally control cost are removed.
I don't exactly agree with your last sentence because college tuiton is rising as insurance, utlilties, and other costs rise....but I do agree that it is WAAAAY to easy for students to take out loans.
Students should - at the minimum- be required to take a 2 hour seminar that outlines potential starting & 10-year out salaries for a variety of professions, how to calculate what the monthly payments will be, how to understand when the first month's payment is due (grace period terms, etc).
Hopefully that would lessen the amount of students (and their parents) who are honestly shocked that college cost $100k for 4 years and they took out $80k of loans, but a starting salary in fashion, teaching, film editing, IT, etc OR a "good" starting salary in accounting, etc but in a major metro area like DC or NYC or SF doesn't pay enough for the graduate to afford living expenses + a $600/mo loan payment (or whatever it would be).
I think a lot of students don't realize they're making a 20 year committment to pay off student loans. The "average" term being 20 years has crept up over the past decade. The "standard" used to be 10 years, unless you were talking major six-figure expenses like Medical or Law school.
I don't exactly agree with your last sentence because college tuiton is rising as insurance, utlilties, and other costs rise....
This seems to be the view held by many who have a more free market view on these things.
Quote:
Neal McCluskey, higher education analyst at the Cato Institute, believes that is one of the biggest drivers of college price increases. Much of college costs are covered not by families, but through other sources such as loans, taxpayer-funded grants, and college endowments. Increases in federal student aid, he said, just encourages institutions to continue raising their prices.
“You can’t charge an arm and a leg unless people can pay it . . . and Washington ensures that those limbs keep coming, taking them from taxpayers and giving them to students and schools,’’ McCluskey once wrote.
Wish I had seen it. Did it offer any (new) advice on how to get them paid down quicker?
My method has been, suck it up and just PAY as much as I can. lol
This seems to be the view held by many who have a more free market view on these things.
Want to know why college tuition costs are growing out of control?
Stop federal loans and watch that balloon deflate dramatically.
Am I saying that easy guaranteed loans is the only reason why college costs are growing out of control?
No. But they play a huge role. We need to find another way to make college more accessible.
I just finished watching it. It's interesting how they were comparing the effects of these easy gov't loans to subprime loans with housing. I saw an interview with the host and they pointed out how college cost were becoming more expensive because of these easy loans. When students are getting this easy gov't loan money colleges can charge whatever because market forces that would normally control cost are removed.
Quote:
Originally Posted by TurtleCreek80
I don't exactly agree with your last sentence because college tuiton is rising as insurance, utlilties, and other costs rise....but I do agree that it is WAAAAY to easy for students to take out loans.
Students should - at the minimum- be required to take a 2 hour seminar that outlines potential starting & 10-year out salaries for a variety of professions, how to calculate what the monthly payments will be, how to understand when the first month's payment is due (grace period terms, etc).
Hopefully that would lessen the amount of students (and their parents) who are honestly shocked that college cost $100k for 4 years and they took out $80k of loans, but a starting salary in fashion, teaching, film editing, IT, etc OR a "good" starting salary in accounting, etc but in a major metro area like DC or NYC or SF doesn't pay enough for the graduate to afford living expenses + a $600/mo loan payment (or whatever it would be).
I think a lot of students don't realize they're making a 20 year committment to pay off student loans. The "average" term being 20 years has crept up over the past decade. The "standard" used to be 10 years, unless you were talking major six-figure expenses like Medical or Law school.
Yes, a lot of costs are rising. While I agree that college education is getting pricey, I still find it odd that people moan and groan about the cost of higher education at a time while college is still, for the most part, a voluntary obligation, and, that most still do not have a problem with buying a new or home.
Automobiles depreciate with value, beginning with the moment you drive it off the lot. The costs of fuel, maintenance, repairs, insurance, and other costs such as parking and tolls may be on peoples minds, but for reasons which make no sense, are never really thought of "throwing your money away". It is the price we pay for the luxury and privilege to drive.
Now, what is the difference between someone buying a $35K car and dropping maybe another $2K a year on fuel, etc., and someone taking out $40K in loans? Perhaps at the end of ownership, you can sell the car for one or two grand, but still, at the end of the day you paid $40K + to essentially have the privilege to drive. You gain nothing in the end.
And buying a home? People buy homes because they want to own something. They want a dwelling to which they can do what-ever with. Owning a home costs a lot of money. Property tax, monthly mortgage payment, repairs, utilities, insurance, etc. At least with renting if a pipe bursts-which they will eventually-the landlord pays for it, not you.
I could go on, but my point is that Americans have no qualms with throwing money away on a bunch of frivolous sh*t, yet student loan debt is the big OH MY GOD. I am not suggesting that owning a home is frivolous, but just that the actual costs of ownership are higher then the advertised sticker price.
Just a different perspective.
Anyways; when I first went to school, a required info session for all students who were taking out loans for the first time was held over the summer before Fall Semester. If you didn't attend, you didn't get the loan money (or so they said ). The session was about 1 1/2 hours long. Maybe 2 hours. They didn't go over career perspectives (salary), but they did go over the realities of taking out a student loan, and every 10 minutes or so the session was interrupted by the speaker reminding us that this was money we had to pay back; it was not free money, we had to pay it back; don't borrow any more than you need.
It was pretty informative and really made question if I actually needed the money.
Doesn't anyone think about the cost BEFORE they sign their life away? Some degrees are worth some debt but many are not. I think people do realize this but the money is just so easy to get it's hard to resist. They have an "I'll think about it tomorrow" attitude towards the loans.
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). The session was about 1 1/2 hours long. Maybe 2 hours. They didn't go over career perspectives (salary), but they did go over the realities of taking out a student loan, and every 10 minutes or so the session was interrupted by the speaker reminding us that this was money we had to pay back; it was not free money, we had to pay it back; don't borrow any more than you need. 
