43% Of Federal Student Loans Are Not Being Repaid

[supton]

Originally Posted By: oilpsi2high
This entire program is stupid. No bank would loan a 17 year old 100k, 50k or even 20k with no job history or payment history. Why does our federal government do this? Any loan officer who lends that kind of money to a student fresh out of high school would be fired on the spot. So why does our federal government loan money to these people? It's an awful idea!



Technically it could be viewed like any other investment. The government loans out money, albeit interest free, for 4 or 5 years. Then it collects with interest. But wait there's more! Now that said person is more highly educated they can pull in a higher wage and thus... pay more in taxes.

You could go a step further and say that such college educated kids are more apt to overextend themselves and buy more expensive items and take on more loans too. As long as it's somehow controlled it's overall an economy stimulus. [Ignoring the bit how it's not so good on an individual level, paying out so much in interest charges and/or getting worthless degress.]

 

[supton]

Originally Posted By: Vuflanovsky
Personally, I'm much more interested in the educational infrastructure that's generating these kinds of college costs and debt rather than touting my ability to pull myself up by my bootstraps 35 years ago.

College is almost ten times more expensive today than when I went to college for what is basically the same education. College is still college. If you want to make it a trade school only spitting out engineers then that's up to you...but I think the bottom line is that we need to change the structure to make it both cheaper and more focused. Enhanced two year JC transfer programs, etc. I would agree that I don't think "college just to do college" at these mind effingly high costs makes sense for many.



IMO it's the same problem as the housing market. The credit spigot was turned on, which inflated demand. Which then inflated prices. Thus the market grew. Had the market not been monkeyed with (houses or education) we'd be in a different place.

[There is a question these days as to if education has taken a downturn because of high enrollment numbers. In order to keep graduating people... crank down the standards a bit. Dunno how true that is, but it stands to reason that it could happen.]

 

[Alfred_B]

It's a predatory environment where the schools, especially the for-profit colleges, take advantage of the prospective students. Most of the students who default are the ones who did not graduate or finish their certificate programs. Those degrees are useless and can actually do more harm than good.

Not-for-profit colleges and universities fare better.

 

[A_Harman]

Originally Posted By: bradepb
My wife and I make less than 6 figures put together, however over the last 12 years or so we paid about 80% of our 3 children's undergrad degrees with them and grandparents paying the rest. This is at top Tier 4 year universities MSU and CMU. We are debt free including our home, my kid's are debt free. Two have earned there masters on there dime.
We do not however have a second home up north and have never purchased a brand new vehicle or go on lavish vacations. Life is all about choices. No regrets.


I would vote for you to be President ahead of all the other bloviating gasbags that are running now. You at least understand that people must live within their means, and work to achieve your goals.

 

[d00df00d]

Originally Posted By: WillsYoda
The OP article is misleading. The high loan default rate statistic pretty much ONLY refers to for-profit colleges. If you take those for-profit colleges out of the mix, the loan default rate is much lower.

If you look at the research on this, the student loan default problem is largely a problem for student who go to FOR-PROFIT colleges. The traditional public and private colleges are fine for the most part. Student loans at non-profit colleges are for the most part a very good investment (in terms of a variety of measurable personal and social outcomes).

Inside Higher Ed: "Study finds for-profit colleges drove spike in student loan defaults"
https://www.insidehighered.com/news/2015...t-loan-defaults

Sep 11, 2015 - The spike in student loan defaults over the last decade has been fueled by ... students at for-profit colleges fared the worst (47 percent defaulted ...


The Atlantic: "For-Profit Colleges Are Fueling the Student-Loan Crisis"
http://www.theatlantic.com/business/archive/2015/09/the-failure-of-for-profit-colleges/405301/


No one's in this thread to talk facts or policy. They're here to partake in a moralistic circle-jerk.

 

[Doog]

Originally Posted By: hatt
Who would have thunk giving people large sums of money to go to schools that don't teach them anything useful would be a problem. Anyway. The people not paying are smart. They'll get bailed out. The idiots paying will continue to pay. It was all taught in Victimhood 101.


+10000000000000000000000000000000000000000000

 

[Sierra048]

Kudos my friend. My wife and I made the choice to become debt free in the late eighties, long before we ever heard of Dave Ramsey. We paid our mortgage off in 1990 and haven't borrowed a penny since, for anything. It was extremely tough to do but worth every sacrifice we made. Our son's inherited our aversion to debt and are both doing well. Both have masters degrees using the GI bill earned through their service to our country. So for almost 26 years we've been paying ourselves interest instead of giving it to someone else. I know some people due to circumstances can't do what my wife and I did, but I also know there are others (some we know personally) that could, but just don't want to. We are not what most would consider wealthy, but we are blessed and doing OK in our retirement years.

 

[CT8]

They are the new parasite class.

 

[andrewg]

That's ok...the rest of us will just have to work harder to pick up the tab so that the cry babies don't get too overwhelmed.

 

[CT8]

Originally Posted By: OneEyeJack
The system is working exactly as expected. The student loan program was a great idea, an act of genius. What better way to raise tuition fees in one fell swoop with a guarantee of payment right now and diverting all the headaches and details to the financial industry to prepare for a taxpayer bailout. All the people that came up with this scheme had to do was buy a few liberal politicians and it's game on. This debt is rolling down the tracks and headed straight for that taxpayer bailout. That's called a payday. The politicians know with an absolute certainty that the taxpayers are nothing better than a slot machine that pays off every time they pull the handle. At least most of these politicians are discrete enough to only laugh at them when they are together in the company of other politicians, university administrators, lobbyists and bankers while on the golf course. The taxpayers are even paying for that too, lunch and drinks included.

Yes the stupid taxpayer.

 

[JHZR2]

Originally Posted By: WillsYoda
The OP article is misleading. The high loan default rate statistic pretty much ONLY refers to for-profit colleges. If you take those for-profit colleges out of the mix, the loan default rate is much lower.

If you look at the research on this, the student loan default problem is largely a problem for student who go to FOR-PROFIT colleges. The traditional public and private colleges are fine for the most part. Student loans at non-profit colleges are for the most part a very good investment (in terms of a variety of measurable personal and social outcomes).

Inside Higher Ed: "Study finds for-profit colleges drove spike in student loan defaults"
https://www.insidehighered.com/news/2015...t-loan-defaults

Sep 11, 2015 - The spike in student loan defaults over the last decade has been fueled by ... students at for-profit colleges fared the worst (47 percent defaulted ...


The Atlantic: "For-Profit Colleges Are Fueling the Student-Loan Crisis"
http://www.theatlantic.com/business/archive/2015/09/the-failure-of-for-profit-colleges/405301/



Thanks. At least some balance to the [censored] article and [censored] commentary that followed.

I managed to get all three degrees (b.s. through PhD) with zero debt. Of course I took a worthwhile course of learning that had some value, and the system past b.s. is designed to be paid for in return for research.

The medical field is far more of a ripoff, not only in terms of cost of service but also cost of education. My wife had loans for her doctorate. Sucked but we never took a means based repayment or a deferment.

Since you can't bankrupt out of a student loan, I'm failing to see how this article is practical or relevant. Essentially all you can do to avoid loans is die, and then they would come out of your estate. The "undue hardship" clause is not well defined, and while bogus fees and interest due to default potentially can and should be wiped, reasonable sustained interest and all principal should always be due.

Private loans I have little care for - it's on the private entity to gauge risk and NOT loan.

If loans due are pulled from a deceased's estate, causing hardship on their heirs, I'm also of the mind to say "so be it", particularly for anyone that is the age of majority.

 

[Shannow]

Originally Posted By: CT8
They are the new parasite class.


Actually, I'll pay that credit to the baby boomers.

Everything that they got for free, they put costs and impediments in the way of those that follow.

Be it education, housing, health care, they climb up and pulled the ladder up after them.

Tell a kid that in this "competetive" market they need a degree to even get a job flipping burgers, and they go and get one.

I agree that money should only be available to courses that are likely to achieve an employable outcome...but to that point, I'm in favour of society as a whole funding the first degree for "useful" stuff, whether that be Nurses, Engineers, Road designers, or Psychologists...and screening to only those who have the appropriate wiring and aptitude to make a go of it.

 

[Mr Nice]

My nephew is studying Political Science and is worried next year when he graduates from Florida State. I tell him to get ready for the real world cause it's not easy.

If he can't pay his loan back then all his tax returns should be withheld from him until every cent of loan is paid back, even if he is 70 years old.

It's very simple. You borrow the money.... you pay it back.

 

[Shannow]

Originally Posted By: Mr Nice
It's very simple. You borrow the money, you pay it back.


Got no problem with that...but in a lot of your states you won't even trust a kid to buy a beer...

 

[Nick1994]

It takes just a couple minutes to make a plan to pay back student loans. But a lot of kids today are idiots (and I'm a 21 year old University student!).

Here's the way I think of it:

Take out $20,000 in loans to get through college. Then once you get a job, don't go out and buy a new fancy car. Spend that $500 a month that would be on a car payment and you'd be paying back $6,000 a year toward the student loans, they'd be paid off in less than 4 years DEBT FREE.

Need $40,000 for college? $500 a month is $6,000 a year, in less than 7 years they'd be paid back in full, DEBT FREE.

And that's only 1 idea of cutting costs. Why do you need a big flashy car? Is there any reason my 2000 Camry won't be cool enough? Who cares?

I took out $5,500 in student loans last year because I thought I'd need it, but I don't think I'll need any of it so it's just sitting in the bank. I could pay it off today if I wanted to, but I'll keep it as a just in case. Once I'm done with college I'll pay it off right away.

 

[Nate1979]

Parents are equally to blame. Parent's don't want to parent and stop allowing their kids to go to any expensive college they want. Instead they pull out their wallet and say sweetie you can go to any school that feels right to you. Instead they need to teach their kids the value of a dollar including the cost of a college education. Schools are equally to blame for taking advantage of these schmucks.

 

[HTSS_TR]

I had few thousands dollar(probably $2000-$3000 ?) student loan when graduated in the early 80's, I paid it off in less than a year(may be 6-7 months).

My older daughter had about $10-12k loan, she and I paid it off in less than 2 years.

My younger daughter had $14-15k loan for nursing school. She has fairly good paying register nurse within 6 months after graduated and had a license to practice nurse. She plans to pay it off in 2 years.

When I borrowed money from anyone I planed to pay it back with interest as soon as I could.

I sold my first house for less than the loan balance in 1997, I paid almost $20k to escrow account to paid off the loan. This was after I bought another house I could just walk away and the bank could foreclose that house, I may had bad credit for some years but I couldn't do that.

 

[GMFan]

Originally Posted By: Nick1994


Here's the way I think of it:

Take out $20,000 in loans to get through college. Then once you get a job, don't go out and buy a new fancy car. Spend that $500 a month that would be on a car payment and you'd be paying back $6,000 a year toward the student loans, they'd be paid off in less than 4 years DEBT FREE.
.


Pretty much this. Assuming your college degree yields enough income you can pay off student loans within a few years if you live frugally. I rented a bedroom out of a house, drove my old paid for car and didn't go on fancy vacations after college. After saving a few months for an emergency fund, I wrote entire paychecks to the balance of my loan for 2-3 years until they were completely paid off.

I know a few guys I graduated with who have their wages garnished because they failed to pay their loans. They did however have money for diese trucks with big mud tires, fancy trips and weekend excursions...



Originally Posted By: Mr Nice
My nephew is studying Political Science and is worried next year when he graduates from Florida State. I tell him to get ready for the real world cause it's not easy.

If he can't pay his loan back then all his tax returns should be withheld from him until every cent of loan is paid back, even if he is 70 years old.

It's very simple. You borrow the money.... you pay it back.


Not likely with the salary of a Barista at Starbucks.

 

[Tempest]

Government trying to help people = higher demand = higher prices = more people in debt...

Typical social engineering results.

 

[Mr Nice]

GMFan,

Hopefully my nephew gets a job at Chick-fil-a so he can supersize my meal and not charge me extra.

But he is in a very rude awakening with a 4.0 GPA in Political Science.