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The medical school scenario is a good idea for that subject: medicine. But what about the countless graduates who study something government has no use for. Think of all the vocational schools you see commercials for during daytime television. They are obviously targeting the unemployed since the majority of their advertising is done during the day. Did you know many vocational schools cost 15,000 to 30,000 per year? That's more than most state universities (for in state tuition)! And these people are hoping to make what - $10 an hour upon graduation? The economics don't make sense. You have on the one hand a service which is paid for by a third party, student loans. And on the other hand you have desperate or stupid people who get talked into paying whatever it takes to get a semi-worthless degree.
I agree that not all fields would fit the scenario. There is no call for some fields to have the option. However the ones that can fill the need could.
People think that Sally May such a low interest loan and it isn't. It's simply guaranteed by the government. I certainly don't think that paying any of the loaned sum off this way should be considered. Just Grant money and the interest of the loan.
maybe if people were offered a way to repay there loans in time they would stay away from the Tec collages that certainly do take advantage of the persons situation. However Sally May condones it by paying for them.
Another problem is unfairness in the student loan system. It has been stripped of all consumer protections, even discharge in bankruptcy. The corporations that run the racket have no reason to change unfair business practices since they are fully protected.
A person shouldn't be able to weasel out of their student loans through bankruptcy. I'm glad that's how it is.
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It is not uncommon for people to owe $100,000 or even $200,000 at the age of 25 or 30 at 8.5% or 12% interest rates. Think undergrad, grad school, etc. Currently only 40% of student loans are in active repayment.
It is not uncommon for people to default on these loans. 20% of the loans made in 1995 are in default and student loan burdens then were much lower than 2005- 2010.
There are stories of people owing $500,000 due to defaulting, penalties, and interest fees. They cannot get rid of this debt in bankruptcy and they have had everything they owned seized, their bank accounts seized, and wages garnished. There is very little recourse one has because there are no consumer protections.
Anyone that ends up with that much student loan debt is an idiot. Why should we let them off the hook for what our tax dollars did for them?
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What are possible solutions to this problem?
Perhaps for people to not be stupid about borrowing too much.
TUition is ridiculous and the entire process is garbage. Another "hustle" created by the connected. There is no reason for Tuition to skyrocket since the 1990s. Its ridiculous.
TUition is ridiculous and the entire process is garbage. Another "hustle" created by the connected. There is no reason for Tuition to skyrocket since the 1990s. Its ridiculous.
But we keep telling kids that the best way to be successful if via an education. I agree that education is huge important but we need to make it so that these kids aren't destroying there financial future via Sally May while they try to get an education to be financially successful.
We make the student a burden on the economy by telling them to go and not be a burden on the economy. Makes no sense
A person shouldn't be able to weasel out of their student loans through bankruptcy. I'm glad that's how it is.
Well, this may be a tough thing to come to terms with, but economically, that's a very bad idea. We have a bankruptcy process in the first place so that people are not permanently crippled by economic errors or debts. It does indeed damage the entire economy if we simply saddle a bunch of 18-year-olds with massive unpayable debts and then deny them access to the regular bankruptcy process, then keep hounding them for the money (most of which will be interest and fees) until they die.
The moral arguments are debatable, but the economics are fairly clear. Even ancient people had "jubilee" years where debts were cleared off the slate, for this reason.
Student loan debt is becoming a rampant problem in this country. Student loan debt equals nearly $1 trillion and it is monopolized by 10 student loan corporations. There is more student loan debt than credit card debt and is rapidly approaching residential mortgage debt.
An analyst for the student loan industry even admitted that by 2020, they predict that the problem of student loan debt will have a very noticeable negative impact on the US economy.
People in their 20s and 30s cannot buy houses, save for retirement, or even start businesses without significant hardship due to student loans.
Part of the problem is the high cost of undergradate and graduate education. The other part of the problem is high interest rates, even for government loans.
Another problem is unfairness in the student loan system. It has been stripped of all consumer protections, even discharge in bankruptcy. The corporations that run the racket have no reason to change unfair business practices since they are fully protected.
It is not uncommon for people to owe $100,000 or even $200,000 at the age of 25 or 30 at 8.5% or 12% interest rates. Think undergrad, grad school, etc. Currently only 40% of student loans are in active repayment.
It is not uncommon for people to default on these loans. 20% of the loans made in 1995 are in default and student loan burdens then were much lower than 2005- 2010.
There are stories of people owing $500,000 due to defaulting, penalties, and interest fees. They cannot get rid of this debt in bankruptcy and they have had everything they owned seized, their bank accounts seized, and wages garnished. There is very little recourse one has because there are no consumer protections.
Most other countries make interest free or very low interest loans. The interest charges have made young Americans unable to spend money to jumpstart this economy. Normally the young jumpstart the economy. But today, this is no longer possible.
While ostensibly the money will be repaid eventually, forgiving a portion of this debt will give more people more money to spend they would not pay on interest (i.e. unborrowed or unrealized money).
What are possible solutions to this problem?
I thought that Obama and his Congress had taken care of any new debt for student loans. Don't you know that now only the government makes student loans. The day will come when they are able to control all those students who can't pay their loans back any better than those who preceded them. Oh yeah, get them indebted to you and then demand that they vote for you later in thanks for what you did for them.
I have asked local bankers if they could still loan and they all say the same thing, that the government has taken it over.
We are doing this to ourselves.
Why are kids taking out outrageous loans and going to out of state schools ?
Why not 2 years at the CC and then the last 2 years at a state University..especially if they don't have the money to start with ?
Or better yet..go join the military Reserves and get partial GI bill benefits to use towards college ?
Or go P/T while working. There are so many alternatives to the easy student loan.
We are doing this to ourselves.
Why are kids taking out outrageous loans and going to out of state schools ?
Why not 2 years at the CC and then the last 2 years at a state University..especially if they don't have the money to start with ?
Or better yet..go join the military Reserves and get partial GI bill benefits to use towards college ?
Or go P/T while working. There are so many alternatives to the easy student loan.
Are you saying that student loans, today, aren't all made by the federal government? Obama and group wiped out all other loaning and now they have control of students when they borrow money from the government.
Are you saying that student loans, today, aren't all made by the federal government?
They are certainly not. Federal loans are no longer originated by banks or private companies (a system that made no sense anyway), but the private student loan industry is booming. It is bigger than ever and growing every day.
They are certainly not. Federal loans are no longer originated by banks or private companies (a system that made no sense anyway), but the private student loan industry is booming. It is bigger than ever and growing every day.
I guess I am going to have to go back to those bankers and tell them what you say. No longer does the federal government guarantee student loans as they did up to a short time ago. They make the loans or all my banker friends are liars.
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