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Old 03-24-2015, 11:48 AM
 
2,570 posts, read 2,051,852 times
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Quote:
Originally Posted by ZnGuy View Post
Student loan debt continues to grow (average debt in '13 at $30,894, up $12k from '04) especially since the Fed recently took control of college loans. The top 10 states with highest college loan debt:
States with the most student debt
https://www.tuition.io/blog/2013/02/...ent-loan-debt/
10 Colleges That Leave Graduates with the Most Student Loan Debt - US News
I would not have guessed that Iowa is tops with highest debt. New Hampshire has the highest average student loan debt burden in nation with graduates having an average of $32,795. New Mexico has the highest default rate in US at 20.8%. Midwest & Northeast states had the highest debt with Southern and Western the lowest. Citadel is #2 with the highest student debt which I found surprising with it being a military school. With college costs increasing more than inflation and only 39% of students graduating in 4 years this debt will continue to balloon.
Flawed - and overly hyped by the media - is the analysis. Well, no, there is no analysis, perhaps because the truth does not create the same headlines to sell papers.

Most stories hyping "average" student loan debt are wrong.

First, they only look at studies which include ONLY THOSE STUDENTS WITH LOAN DEBT. Guess what ... most students do not take out loans at all. According to one study by the Brookings Institute (Is a Student Loan Crisis on the Horizon? | Brookings Institution), only 36% between 20 and 40 take on student loan debt.

That means that more than SIX IN TEN HAVE NO DEBT.

Then, there is the difference between "average" and "median." They are not the same, though reporters and editors treat them as if they are.

So, three guys are in a bar, one has $800 in the bank, the second has $1000 in the bank and the third has $1200 in the bank. The "average" bank account balance is $1,000. And so it the median.

Bill Gates walks into the bar. His bank account has, for this example, $40,000,000,000. The average bank account balance for these four guys in now $10,000,000,000 and change. But the median - which is a better indicator of what each of these four guys has in the bank - is much different.

Now, is the way that the cost of higher education is being pushed onto the students from the taxpayers an issue? I would say, yes, in my opinion it is. Not only for the students (and perhaps their families, if they are lucky enough to get support from their families), but - again, IMO - it hurts our society as a whole in many ways, not all of them financial.
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Old 03-24-2015, 12:11 PM
 
Location: Ruidoso, NM
5,667 posts, read 6,563,655 times
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Quote:
Originally Posted by UNC4Me View Post
So what's your solution? No student loans for anyone under 25? I think a required class on finances and the true impact of loans would go a long way. It's a shame that many parents are as clueless as their kids about borrowing and can't provide competent advice.
I think there are many people who never develop the ability to plan for the future, but young people are more susceptible. They are consumer addicts. Buying stuff is like crack. The constant advertising and media bombardment contributes to this I believe.

When you take someone who has this issue and you make it easy for them to get a $100k loan, then they will get the $100k loan.
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Old 03-24-2015, 12:52 PM
 
Location: Florida
4,103 posts, read 5,406,054 times
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To be a bubble it has to be able to pop. Student loans cant unless there is a new Federal policy that allows you to discharge it on bankruptcy. Now what CAN happen is everyone keeps getting degree mill education and degrees become meaningless pieces of paper....sort of, an education inflation.
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Old 03-24-2015, 02:41 PM
 
18,512 posts, read 15,494,002 times
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Quote:
Originally Posted by okellies View Post
That 30k though has capitalized interest. You can easily pay off a 30k car loan in 6 years. Not the same with student loan debt. The capitalized interest eats up all the money that should be going to principal, if it was similar to a car loan.
If the payments are equal and the rates are equal, a 30k debt is a 30k debt is a 30k debt. If the car payment includes interest and principal then the student loan payment would as well. The principal balance would be going down, not up.

"Capitalized interest" while the borrower was still in school would be already included in the 30k.
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Old 03-24-2015, 03:54 PM
 
Location: The New England part of Ohio
23,938 posts, read 32,265,309 times
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Quote:
Originally Posted by BoredRestless View Post
Yup it's a bubble. A degree has never been so worthless (so many people have them nowadays). It also costs a lot more for the degree that is diminishing in value. During this 'recovery' graduates had the hardest time finding decent jobs to payoff the debt - meaning the debt burden is staying for longer and will prevent other purchases (like homes and vacations).

Since college graduates make and spend more money over a life time, (US Department of Labor statistics) and a BA is increasingly thought of as entry level into the middle class, this makes no sense. People who earn more money live in more expensive homes, travel more and have more.

Yes. College graduates are less likely to, for example; buy luxury vehicles directly after graduation.

And yes, more people have college degrees and that isn't going to change.

What will change in the future is that the BA will be replaced with the MA. That is already beginning to happen. We are not returning to high school degrees as a the standard of a well educated individual.
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Old 03-24-2015, 06:56 PM
 
2,485 posts, read 2,210,159 times
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what it is is that a lot of people are clueless about what colleges for and how to do it. Is as of so many Americans don't know that the way to Play the game is to go to college for something that will make you money and then read Shakespeare on the beach when you have the money to go on vacations.

If you make money, you will have the financial resources to pursue your interests later in life.
If you stubbornly pursue these interests when you're younger without consideration of your financial situation, you will be stuck waiting tables and thinking when you'll find the free time to read Shakespeare.

Successful and elite people have always done it this way. They make money first and thenthey become charitable. Had They studied social work and volunteer in Africa early on, they will not have the dollars to donate later.
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Old 03-24-2015, 06:58 PM
 
Location: Southeast, where else?
3,913 posts, read 5,213,396 times
Reputation: 5823
Quote:
Originally Posted by ZnGuy View Post
Student loan debt continues to grow (average debt in '13 at $30,894, up $12k from '04) especially since the Fed recently took control of college loans. The top 10 states with highest college loan debt:
States with the most student debt
https://www.tuition.io/blog/2013/02/...ent-loan-debt/
10 Colleges That Leave Graduates with the Most Student Loan Debt - US News
I would not have guessed that Iowa is tops with highest debt. New Hampshire has the highest average student loan debt burden in nation with graduates having an average of $32,795. New Mexico has the highest default rate in US at 20.8%. Midwest & Northeast states had the highest debt with Southern and Western the lowest. Citadel is #2 with the highest student debt which I found surprising with it being a military school. With college costs increasing more than inflation and only 39% of students graduating in 4 years this debt will continue to balloon.
Only if we let it. Frankly, I think they should have their paychecks garnished. You borrow the money, pay it back. No exceptions. It's tax payer funds subsidized by one and the same. Pay it back and may the system hunt you down to the day you die or, until you pay it back. It's a loan. Not a gift. Don't give them a pass.

Welcome to credit.
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Old 03-24-2015, 08:33 PM
 
24,488 posts, read 41,049,542 times
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Quote:
Originally Posted by usayit View Post
I see data that speaks opposite... Could you share a link or something that counters.. maybe with an explanation of why it states the opposite.

My personal experience as I already mentioned also doesn't seem to agree... but that's just an individual family's observation.
Which data are you looking at? I'd be interested to see the data that suggests otherwise.

The general consensus is that higher education is cheaper relative to middle-class income. The data used to assess this was middle-class income and tuition rates across the entire period of modern higher education. From 1100 to early 1900s, tuition rates were within reach of an elite class... and even then, not easily. In the early to mid 1900s, the delta between tuition rates and middle-class income dropped artificially and significantly. Up until now, tuition rates have been relatively cheap compared to middle-class income... with it being the cheapest (artificially) between the 1950s and 1970s.

Kent Halstead talks about this in his work. Namely, his piece of work called Higher Education Tuition (1989). A lot of his work is based on studies published by the Carnegie Commission on Higher Education (1974). Pietro Garibaldi touches on it in recent years in his work on tuition discontinuity (2009). Also worth looking at is the work of David Dockery in the International Journal of Advanced Education (2011).

Last edited by NJBest; 03-24-2015 at 08:53 PM..
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Old 03-24-2015, 08:39 PM
 
24,488 posts, read 41,049,542 times
Reputation: 12919
Quote:
Originally Posted by UNC4Me View Post
So what's your solution? No student loans for anyone under 25? I think a required class on finances and the true impact of loans would go a long way. It's a shame that many parents are as clueless as their kids about borrowing and can't provide competent advice.
Well, at the very least, stop admitting students who are not ready for college into college programs. That's not good for anyone. Not the student, not the parents, not the school, not the lender, and not the society.
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Old 03-24-2015, 08:49 PM
 
10,075 posts, read 7,499,984 times
Reputation: 15500
Quote:
Originally Posted by NJBest View Post
Which data are you looking at? I'd be interested to see the data that suggests otherwise.

The general consensus is that higher education is cheaper relative to middle-class income. The data used to assess this was middle-class income and tuition rates across the entire period of modern higher education. From 1100 to early 1900s, tuition rates were within reach of an elite class... and even then, not easily. In the early to mid 1900s, the delta between tuition rates and middle-class income dropped artificially and significantly. Up until now, tuition rates have been relatively cheap compared to middle-class income... with it being the cheapest (artificially) between the 1950s and 1970s.

Kent Halstead talks about this in his work. Namely, his piece of work called Higher Education Tution (1989). A lot of his work is based on studies published by the Carnegie Commission on Higher Education (1974). Pietro Garibaldi touches on it in recent years in his work on tuition discontinuity (2009). Also worth looking at is the work of David Dockery in the International Journal of Advanced Education (2011).
I agree with most of that, but people are going to argue that the last 10 or so years are "different" because they are the ones dealing with it :S So they'll point to higher costs/etc. which didn't really "bother" people while the economy was "okay". Secondarily they blame the "poor" economy because now they can't pay off the said "high" loans.

I'm not saying that it doesn't cost a lot to go to college, but it also isn't as crippling either. Who said that the average $30k debt isn't like a $30k car before? It doesn't even make sense, the payments are the same, debt is debt. Think that's bad? Try adding a mortgage on top of it. Sure someone might not be able to afford all 3 at once, student loans/mortgage/car. So what? It takes 5-6 years to pay off the $30k and 30 years for the mortgage. Drive an older car for the first 5 years out of college, pay off loans. At the same time get a smaller "starter" home. Then after loans are gone, you could upgrade car OR house. Then in another 5 years, you can do the other. In 10 or so years, there's no loans, a "newish" car and a house ready for a couple, maybe not for grown kids yet. Pay off the home or upgrade between years 15-20. And the person is 40-45 years old. This seems to be how it's always been done and yet people ignore it and want ALL of those things when they are 30-35 these days. Which just doesn't happen, there isn't enough time to accumulate that kind of money for middle class people, meaning new cars, large houses, no student debt.
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