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I think outstanding Student Loan Debt is close to a Trillion Dollars.
That sounds like a huge amount of money... until you realize that it is less than $30k per borrower. Or that we have 14 Trillion Dollars in outstanding government backed mortgage debt. (https://research.stlouisfed.org/fred2/series/MDOAH)
You have to read the details. FFEL, Perkins, and Stafford loans do not qualify, only FDLP which came into existence in 2010 (you could have technically used loan consolidation to use loans as far back as 2007). And if you consolidate, your 10 year clock starts all over again.
And you have to be paying on the 10-year plan or the income-driven plan. If you are paying on the 10-year plan, well, by the time you finish 120 payments your loan is paid off.
So, the only possible way to get any benefit out of this is to borrow only after 2007, never consolidate (and you generally should consolidate), work continuously for a public/non-profit employer for 10 years with no employment gaps (if lose employment during your 10-year period, you lose eligibility), and be on the income-driven plan while earning not earning enough to rise above the level of a standard payment plan.
To date, not a single person has qualified for loan forgiveness under this plan (for obvious reasons). Once we hit 2018 and there are people technically eligible, we will see how many actually take it. I don't think the numbers will be very big.
You have to read the details. FFEL, Perkins, and Stafford loans do not qualify, only FDLP which came into existence in 2010 (you could have technically used loan consolidation to use loans as far back as 2007). And if you consolidate, your 10 year clock starts all over again.
And you have to be paying on the 10-year plan or the income-driven plan. If you are paying on the 10-year plan, well, by the time you finish 120 payments your loan is paid off.
So, the only possible way to get any benefit out of this is to borrow only after 2007, never consolidate (and you generally should consolidate), work continuously for a public/non-profit employer for 10 years with no employment gaps (if lose employment during your 10-year period, you lose eligibility), and be on the income-driven plan while earning not earning enough to rise above the level of a standard payment plan.
To date, not a single person has qualified for loan forgiveness under this plan (for obvious reasons). Once we hit 2018 and there are people technically eligible, we will see how many actually take it. I don't think the numbers will be very big.
This post is ignorant at best in that it dismisses the fact that tuition in the 1980s was extremely cheap compared to salaries. Why don't you show the real numbers rather than focusing in on an abnormal period (1980s until now) that doesn't represent historic tuition pricing?
That being said, I don't agree with the student loan landscape.
Why do you defend private colleges that are simply seeking a profit by pseudo-educating students that cannot get a decent job.
Once students gained access to easy loans the colleges realize they could raise the tuition. It is a market decision-----if the students have the cash then the college can raise the tuition. If there were no student loans the tuition would be quite low.
The loans do not qualify for bankruptcy. Defaulting of these loans is serious and may cripple a person's credit rating for a lifetime.
All of this is due to crony capitalism. The government indirectly props the profit margin of the private colleges and the student is left with debt he will never be able to pay.
Why does free market folks like you defend crony capitalism?
I am 100% for capitalism, but you are defending crony capitalism and that is simply WRONG.
A good friend, for instance, had a 1 in a million allergic reaction to an antibiotic while he was in med school. It causes permanent nerve damage as well as cognitive impairment (not severe, but enough brain fog that he could not continue medical training) and long-term fatigue. Suddenly, he was in his mid-20s and could no longer do the work he had trained in (or much of any work) and was facing down tens of thousands of debt he thought would be easily paid off once he was a physician. He is now 30, lives at home, and all of his disability money goes toward paying off his student loan debt. I've seen this happen to friends in the cancer world as well. It almost happened to me as, if the economy had not crashed, I would have been halfway through law school when my own cancer diagnosis came.
Disability does not get your student loan debt wiped and no one can predict when it will happen/
There's also the run of the mill 18 year old who doesn't understand what $500+ a month to pay off loans will look like. Even with "good" degrees, there is no guarantee that your salary will be able to support that kind of loan debt. Not in the economy of the last decade. And no, it's not taught in high school. People looked at me when I was nuts in high school because I applied to 20+ schools shopping for the best financial aid (and ended up getting several full tuition or full ride scholarships as a result) to avoid going into any debt. It's on the parents to teach that - and unfortunately, many parents of today's kids still think college is the magical way to get a job. And it often is - just not for everyone.
Well, that could be anyone with any debt and not so common. What brought on the changes to SLs was the deliberate ripping off people were doing by maxing out loans and declaring bankruptcy.
Anyone who goes to school because they can't get a job because of a recession, then borrows a bunch of money is truly an idiot.
I know two people who are struggling to pay back 100k and all the while they were openly talking about it I was telling them they were nutz. Instead of the fabled 100K a year job they "thought" they would be handed they are working for half that.
Why do you defend private colleges that are simply seeking a profit by pseudo-educating students that cannot get a decent job.
Once students gained access to easy loans the colleges realize they could raise the tuition. It is a market decision-----if the students have the cash then the college can raise the tuition. If there were no student loans the tuition would be quite low.
The loans do not qualify for bankruptcy. Defaulting of these loans is serious and may cripple a person's credit rating for a lifetime.
All of this is due to crony capitalism. The government indirectly props the profit margin of the private colleges and the student is left with debt he will never be able to pay.
Those new campuses, instructors and computers aren't free. If there were no student loans there would be a lot fewer attending. I'd be ok with that.
Last edited by 1AngryTaxPayer; 10-06-2015 at 10:32 AM..
Those new campuses, instructors and computers aren't free. If there were no student loans there would be a lot fewer attending. I'd be ok with that.
Yet, another defender of crony capitalism. The computers are financed by student loans.
Quote:
BOSTON (AP) — The president of Northeastern University is the second highest-paid private college president in the country, with a total pay and benefits package of $3.1 million in 2011.
The Chronicle of Higher Education went through federal tax information from 2011 for the 500 private schools with the largest endowments.
It found Northeastern's compensation package for President Joseph Aoun ranked only behind Robert J. Zimmer at the University of Chicago, who made $3.4 million.
Former Tufts University President Lawrence Bacow ranked fifth on the list with a pay package of $2.2 million in 2011, and former Amherst College President Anthony W. Marx was 11th with $1.6 million in compensation.
So called educators in these universities are now getting the same pay as high end CEOs. What is wrong with this picture? This has nothing to do with the free market or education. This is simply a gravy train financed by student loans.
Why does free market folks like you defend crony capitalism?
I am 100% for capitalism, but you are defending crony capitalism and that is simply WRONG.
huh?
where did I defend 'crony capitalism'?
are you sure you're on the right thread?
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