Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
"According to unpublished data obtained by The Chronicle, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions."
I debated whether the story here was the government's terrible job in estimating student loan defaults (Politics and Other Controversies forum) or the loan default rates themselves (Business and Finance forum) so it's here if you want to talk about the money and big numbers of defaulters issue and what that means and it's in the political forum if you want to talk about the federal government underestimating the defaults.
That's what happens when you loan a bunch of money out to kids with no credit to buy a product that has little or no immediate practical application in the real world.
That's what happens when you loan a bunch of money out to kids with no credit to buy a product that has little or no immediate practical application in the real world.
I know, in the old days, the IRS could take your refund checks until your defaulted student loan was paid. I don't know if that's still true in 2010.
I know, in the old days, the IRS could take your refund checks until your defaulted student loan was paid. I don't know if that's still true in 2010.
It still holds true today. Student loans guaranteed by the federal government can not be discharged in bankruptcy, even if you default - the loan will still be there when you exit bankruptcy. Default - does not pay as agreed; Discharged - fully paid off or completely and voluntarily written off by the lender.
"According to unpublished data obtained by The Chronicle, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions."
I debated whether the story here was the government's terrible job in estimating student loan defaults (Politics and Other Controversies forum) or the loan default rates themselves (Business and Finance forum) so it's here if you want to talk about the money and big numbers of defaulters issue and what that means and it's in the political forum if you want to talk about the federal government underestimating the defaults.
I would say it is an indicator of overpriced sleazy private "schools." If the Feds dial back the student loans across the board, it will force the entire college industry to cut back on the [over]pricing.
Same as with housing -- the crazy lending drove up the prices.
I would say it is an indicator of overpriced sleazy private "schools." If the Feds dial back the student loans across the board, it will force the entire college industry to cut back on the [over]pricing.
Same as with housing -- the crazy lending drove up the prices.
I do think they need to scale back the amount of money they give out on student loans. It’s ridiculous that the common idea is that "everyone" deserves an education.
I can see the statistics being right on for several reasons; you can use the student loan money for just about anything. I think it should be restricted to simply tuition, books, and housing. People will probably cry foul that they need a computer, clothes and $$ to eat out. The money should exist to provide you with the bare necessities and most universities worth their salt should be able to provide computer services anyways and most people should be able to hold down a part time job while they get an education.
Another thing is that you can use this money for any degree under the sun. Maybe come up with a list of approved majors that actually provide people with a real skill. I mean, come on, American Studies? You can learn that watching TV.
The default rate on the for-profit schools I understand is high due to the immense cost associated with it. I know an individual going to a for-profit school and am paying roughly 2x what I did at a public university. People don't need to be $100K+ in debt for a degree that would of cost them $20K+ somewhere else.
I admit, I took out student loans bringing my debt level up about $17K but I used that money only for school and books and got a degree in something that I felt could help me find a job, accounting. I also went to school at community college my first years.
My suggestions aren't the end all be all solution and I understand there will be some folks out there that just have bad luck and still may not be able to get past those student loans.
I do think they need to scale back the amount of money they give out on student loans. It’s ridiculous that the common idea is that "everyone" deserves an education.
Another thing is that you can use this money for any degree under the sun. Maybe come up with a list of approved majors that actually provide people with a real skill. I mean, come on, American Studies? You can learn that watching TV.]
I don't think it should pay for anything except tuition and books. I worked full time while going to school at night and had no debt on graduation day. Re: American Studies ...my favorite is Gender Studies. Any parent expecting to be "paid back" after their kid majors in that is off their rocker.
"I debated whether the story here was the government's terrible job in estimating student loan defaults (Politics and Other Controversies forum) or the loan default rates themselves (Business and Finance forum) ...
This story is yet another example of mixing apples and oranges. The "government's estimate of defaults" is not, nor was it ever, intended to measure the total number of people who fail to repay their loans. The "cohort default rate", or CDR, is a specific measurement that was intended, believe it or not, to assess whether a school's academic program was preparing students for the workplace. Schools with exceptionally high CDRs are subject to sanctions and potential termination of eligibility for federal aid programs. The CDR specifically looks only at the number of individuals who default within a prescribed amount of time after leaving school ... under the notion that if someone immediately defaults after leaving school, the primary reason for the default is that they didn't receive a quality education that adequately prepared them for a job. A correlary here being that if a student defaults significantly after graduation, it wasn't necessarily the school's fault.
We can debate all day whether or not that is an accurate measurement. But the bigger issue is the blatant misuse of statistics like this by the media. Suggesting that the government assesses total student loan defaults by using the CDR is outright ludicrous.
I would say it is an indicator of overpriced sleazy private "schools." If the Feds dial back the student loans across the board, it will force the entire college industry to cut back on the [over]pricing.
Same as with housing -- the crazy lending drove up the prices.
Education . . . . the next bubble to pop?
I couldn't agree more. Basically all the student loan lending was similar to the housing lending that went on. Also similar to the government getting involved with medical care (medicaid, medicare)...all it did was inflate prices.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
News Flash....
