How Student Debt Affects Economy

[Hemlock140]

The biggest problem is that people have been advised that they have to go to a big name private university. Many of the people making 100k+ where I work including me went to state colleges and universities and are doing just fine. Stanford is $48,000/ year, nearby San Jose State is $7,800.

[jrkliny]

It seems that most of the people who have posted on this topic are looking for someone to blame. That could include those unnamed people who advise others to spend a lot on a big name private university. Or it could be the schools who accept students who need loans in order to attend. Or it could be the colleges and universities that do not force students to take courses that will help them find a job.

We don't blame the stores for advertising their products or for accepting credit card purchases. We don't expect stores to sell only items that someone thinks would be good for the buyer. No one complains that luxuries and frivolous items are for sale.

Sorry, but none of this flies. The students and parents are responsible for deciding if taking a loan makes sense, if a specific major or courses are valuable and they can also decide if an expensive private school makes sense over a cheaper State school. The student also decides how much effort to put into learning in college and many just coast through with as little effort as possible.

None of this has anything to do with the original topic; i.e., the effect of the loans on the economy. Those effects are probably not worth trying to discuss for those stuck in looking for scapegoats.

[skeddy]

thankfully not my problem, get those payments in on time, you borrowed, you pay.

[foodyum]

Originally Posted by Hemlock140

The biggest problem is that people have been advised that they have to go to a big name private university. Many of the people making 100k+ where I work including me went to state colleges and universities and are doing just fine. Stanford is $48,000/ year, nearby San Jose State is $7,800.

Untrue, largest debt is incurred by students at for profit college.

[foodyum]

Originally Posted by jrkliny

And what degrees would those be? You have a list?

Yes in a way. The government has a database of all pell recipients (low income qualifying for grants), what college they went to and if they dropped out. It is easy to see which schools take government money and don’t graduate students. These schools should be denied access to government funding based on poor outcomes.
Also most colleges publish extensive data on their student body and alumni. This database is maintained and verified by the college board (I think) so that is another source for data analysis.

[foodyum]

If you worry about the state of the financial sector, once all the bad loans are written off or when there is an indication that the bad loans will be written off, unless the govt comes in and subsidizes the debt, you’ll see that industry badly hurt. The financial industry is very much tied to the health of the American economy and may have ripple effect.

[HappyHappy001]

Can you imagine if house mortgages where handed out like college loans? Borrower just goes to the lender with a "dream" about buying a house in the next 4 to 6 years, lender hands-out $10,000s of thousands each year to fund the "dream" with absolutely no proof the borrow has any collateral and/or ability to payback the loan. But, hey, the government is totally backing the loans, so no loss to the lender. The big winner is colleges that can continue to grow and employ millions of PhDs with no marketable skill except to teach / indoctrinate another generation in the "liber arts". The looser is the responsible American Tax Payer, AGAIN, not only do we pay our own bills, we are being asked again to bail out those that make poor decisions.

[foodyum]

Originally Posted by HappyHappy001

Can you imagine if house mortgages where handed out like college loans? Borrower just goes to the lender with a "dream" about buying a house in the next 4 to 6 years, lender hands-out $10,000s of thousands each year to fund the "dream" with absolutely no proof the borrow has any collateral and/or ability to payback the loan. But, hey, the government is totally backing the loans, so no loss to the lender. The big winner is colleges that can continue to grow and employ millions of PhDs with no marketable skill except to teach / indoctrinate another generation in the "liber arts". The looser is the responsible American Tax Payer, AGAIN, not only do we pay our own bills, we are being asked again to bail out those that make poor decisions.

You don’t have to imagine. This did happen and it caused the 2008 financial meltdown.

[galaxyhi]

Although I attended a 2 year college earlier pay-as-I-went, i went back to try and finish my degree (with a change in major, 1 year basics completed) in fall 1999.

Because I was well into adulthood in my 30s, my parents income/assets were no longer a criteria, and I was told that student loans would cover my costs.

Need money for tuition? Sure, sign here.
Need money for books? Sure sign here.
Need money to cover living/rent? Sure, sign here.
Need money for transportation? Sure sign here.
Need money for living expenses? Sure, sign here.
And I did sing all that.
I attended and came out with 3 As and a B. ( that seems to be my theme among my 3 completed semesters).

But mid Jan 2000, I had to have major invasive surgery, along with 6-10 weeks of recovery and therapy, which would interfere with my studies, so I had to withdraw and cancel my spring semester loans before the start of classes.

All that is to say I suddenly had student loans in the amount of $13,500 for just ONE semester at a Community college!!
I then realized I'd have had $27k IF I had gone on!

Shortly thereafter I got my SSDI approved andI (begrudgingly) paid back that loan over 8 years.

Now, I agree college should be free, or very low cost for those going to Community college or public universities. If you want to go to a private or Ivy league school, then you'll just have to pay for it out of pocket.
New York state has made strides in "free college "...if you can jump through all the hoops they require.

But, they need to ensure all high school prepares all students adequately for college. A previous poster mentioned that.

And, I want to know, if they automatically forgive $85k in student loans, are they going to also going to compensate those who did not attend college by the same amount??? After all the college student is SUPPOSED to be guaranteed a better paying job than the high schooler alone.

And what about those who go to a trade school instead of college? Will their costs be free too?

And what happens to all the college funds parents have already set up?

It could be considered "unjust enrichment " to the college kids, who are supposed to be guaranteed a higher paycheck anyway over those who just don't qualify for college and only have a HS diploma.

What about the parents who already paid for their kids college?
Or those who already paid dearly for their college?

Will they be reimbursed? Or is it 'to bad, so sad' for them?

What happens to all the education funds parents have saved in for kids eventual college?

And will this new "free for all" college program end the totally useless degrees in underwater left handed puppetry or desert tumbleweed basket weaving??

Things that make you ponder...