Student loan debt

Racket wrote:

Jsjsjs wrote:

then want their loan forgiven lol.

And why not? We did it for Wall Street in 2008 to the tune of about 3 trillion dollars in bullsh!t mortgage bonds that the Fed still holds to this day.

AIG : bailout.

Auto industry : bailout.

Stupidly over-leveraged banks : bailout.

But when it comes to student loans the triggered and out of touch boomers never cease to amaze

And of course everyone will completely ignore this fact. People will go on and on about entitled millennials etc... but lets forget about bailing out the banks and auto industry and the massive bonuses that were given out to all the exec's with our tax money.

Congrats. I get that you're frustrated. I have three comments:

1. Giving money to other people doesn't really affect you much. You're complaining that other people are getting money but you want some of that money for yourself.

2. We don't want people to have such huge loans in the future. Just because you went through a painful situation, that doesn't mean everyone else should have to. I get that you're frustrated.

3. Not everyone is able to pay back those loans. There are a variety of life circumstances that could make it harder for some people than others.

Where did I propose "free money"? I'm proposing reasonable interest rates be imposed. And no, there is no reason for rates to increase from 1.5-3% (what they were in the 90s/Early Aughts) to 7-8% ten years later.

If one is complaining about their student loan load, I must first question why they made the choice to incur that debt. Did they not look at the cost to get the degree, and what they could expect to earn afterwards? I have no sympathy for people taking 80K in debt for a worthless liberal arts degree.

If the degree will not pay for itself, do something else. Period.

I got through undergrad with no debt only because I went to a state school that gave me a great scholarship package. I would have been better served at other schools but I followed the financials. It was "good enough". I worked 1-3 part time jobs through school in addition to 3 sports including CC/track. Then I went to a top tier grad school. But after 4 years the PhD was not looking to get done in a reasonable time, the finances were not lining up right, so I gave up my aspirational dream for another route...and a mountain of debt.

I switched to a top-tier MBA. My new wife and I spent everything we had, yet the second year I went deeply in debt. And she had master's debt hanging over us too. But my expected salary made it worthwhile. I got a good job, and the first 4-5 years things were very tight but we paid off all of her student loan debt and most of mine. Living frugally.

Kids changed things, my career moved up, my wife worked less and less. We're now about 40, mid school aged kids, she can now stay at home. I've got $17K in student load debt left I could pay off whenever but I earn more in the market with my money so why do it.

The reason university became so expensive was students were given access to easy money, so they could raise prices astronomically without sacrificing enrollment. Supply and demand. College students are adults, if you are bad at the math, I don't think the taxpayers should be liable. Listen to Mike Rowe. There are a lot of good paying jobs which pay a lot more than overpriced worthless 4-year degrees.

There are very few jobs today that can justify the mountains of stundent loan debt. Only jobs in STEM, finance, law or medicine really allow you to make enough money to comfortably pay back $50k+ in loans (and to get the best jobs in these fields, you often have to take out well over $100k in loans). We have to have teachers and writers and professions that would be considered “lesser” by most on this board to have a fully functioning society. Unfortunately, their degrees cost the exact same amount despite the lesser earnings potential. Perhaps college tuition should be tied more directly to the long term salary prospects of each students major. Student loan debt will continue to be a massive lead anchor around America’s neck until we do something drastic to fix the problem.

The beneficiaries of the current student loan programs, err, a program to make students mere conduits for federal money, are those members of in the academic industrial complex. The members vote almost universally in lockstep. I couldn’t understand many in the Occupy movement - exemplified by the guy with $30 grand in student debt for a degree in puppetry who couldn’t find a decent job - who never could realize that their progressive academic overlords are the reason the status quo - crushing to middle class kids - stays in place. Really smart families in my area are sending their kids to community college at very little cost and no debt - and many are good students - meaning high grades and virtualily automatic admission to good state schools. They also work while in community college, picking the habits of holding a job which no matter how lowly helps them in the future. The point is that education must be looked at differently today, and is all about value. Getting through community college with holding a Mike Rowe job may be the ideal for many.

By the way, ever read the federal balance sheet? Aside from Fannie and Freddie, which generate so much money they will never be private again, student loans are one of the federal government’s bigger assets, which is why kids will continue to be screwed. Of course, unlike a real bank, which has to take bad debt write offs when necessary (which impacts capital requirements), the feds just keep rolling along with a patchwork of feeble forgiveness programs, all of which are funded from another pot of money. Don’t go into student loan debt in any significant amount - no one should borrow money not dischargeable in bankruptcy on terrible terms with interest accruing even with deferral or some form of notional forgiveness. Oh, and if you eventually are forgiven, , the IRS bill will be shocking. Big Government is not your friend.

I'm a current grad student pursuing a double masters and I have a fair amount of student loan debt. Below is what I think should happen.

The first is that student loan debt should be forgiven. At the very least, I think undergrad debt should be wiped out because a BA/BS is essentially the new high school diploma. While trades are an alternative, most people don't really hear about that in high school and are funneled into the college machine. Even though 18 year olds are technically adults, I think most can agree that they don't really know how the world works. If everyone tells them they need to go to college for as long as they can remember, of course a huge percentage go since they have more or less been brainwashed. I don't mean to come across like a conspiracy nut, but it does seem mighty convenient for the system to continue that myth. Additionally, forgiving these student loans would immediately give people more disposable income so they can do things like buy cars, homes, etc that help the economy.

Post grad degrees are trickier since they have different rates of returns. I think academic masters degrees should be partially subsidized, up to about 50%. Obviously things like an MA in history has a different return than an MA in engineering, but creating different subsidies for different fields would be a nightmare so a blanket subsidy is the easiest. JDs and MDs should be more or less left alone since they have better rates of returns than masters and have a high earning potential. Lastly, professional degrees (MBA) should be slightly subsidized, up to about 20%. PhDs are fine since any program worthwhile pays you to go there, not the other way around.

However, regardless of any subsidy or forgiveness, I think that student loan interest rates should be dramatically reduced. I think it's odd that businesses can borrow at roughly 0.5% while students have about 6% currently. I'm fine with paying back the amount I borrowed, but I think the high interest rate is jacked. This is also rooted in freeing up disposable income. Plus, I don't really think huge corps need these low interest rates when a lot of the time they don't pay taxes.

DeBron Lames wrote:

State sponsored schools have seen large funding cuts over the last 10-15 years. That has caused increases in tuition. One could argue that less general tax revenue to universities and more fees to students is "fairer" as the burden is placed more on the user, not the entire state.

I graduated with college debt, got a full time job, then a part time job. After 3 years of two jobs, I was in the clear.

One could also argue that limiting University to only those that can afford the outrageous prices would severely impact the number of our best and brightest that are able to attend. I'd like our smartest kids to get our best education, not our richest.

While limiting college to just those that can afford to pay full price, yes we avoid a burden to the taxpayer in the short term, but end up bearing a much larger burden in the long run because we have severely limited the talent pool that has access to the best jobs and positions of leadership in our country. We all end up paying for that.

Also, why are you stopping at college? Why do we allow high school and elementary kids to get a 'free ride' and burden our taxpayers with providing them with a free education? Wouldn't society be better off if we avoided this burden and just let the upper middle class and the rich pay for their own kids' education and not worry about those who can't afford it?

Also, paying off college in 3 years is not a realistic expectation for most people.

Forgot to add that tuition rates flatly need to be adjusted down. Tuition has vastly outstripped inflation, but professors don't really make anymore than they did in the 90s. A lot of the cost has been because of an explosion in the administrative parts of universities while more and more professors are adjunct. This math doesn't compute. So adjust the rates down and pin them to inflation.

The student loan debt crisis was an absolutely genius move by Liberals. Use government intervention (student loan program) to massively inflate the cost of higher education so people become dependent on the government to go to college, then argue we need move government intervention to fix the problem.

I think a lot of millennials want student loan forgiveness from their debts incurred from the early 2000's-2012 or so because the attitudes towards college changed so dramatically and quickly. This is completely anecdotal, but I'm sure my experience reflects many out there:

I entered college in 2009, went to an out of state school to be a music major. The reason I chose the program was because it is one of the best in the country, and in my 18 year old mind I figured that I was following the logical path to a lucrative career as a professional musician. Because if I could get into this school, that meant I could get a good job later down the line. Not only that, but the prevailing attitude at the time was that it wasn't the TYPE of degree you got that counted, but just the fact that you earned one would guarantee a job somewhere by someone in the future.

As a high schooler I was taught employers wanted to see that bachelor's degree, and if you get that then your future income will far surpass the bloke who only has a high school degree. No mention of the fact that employers want to see a resume, work experience, volunteer experience, certifications, networking, yada yada yada. Just get the degree I was told. And go to the best school possible. So that's what I did.

As you can imagine, I had no concept of what finances meant, what loans entailed, what interest was and how it accrued. I just got the loans I needed each semester and went from there. It wasn't until the usmmer after my freshman year that I realized that the job market for a musician of my skill set was fully saturated and tiny. And after just two semesters, I was already staring at around $20k in debt in pursuit of a career with no promise of financial stability. Music isn't something like nursing, accounting, or engineering where you can walk out college with a pertinent degree, certifications, and some work experience via internships/clinicals into a wide open job market.

So after some soul searching, I left music behind after my sophomore year and transferred schools. The final damage? $45k for two years of college. I fortunately either received scholarships or paid my own way through the rest of undergrad without adding to the loan total.

I can see how a person in my position would feel jilted, misinformed, and led down the wrong path by the powers at be who were supposed to be looking out for my well-being. Why should I pay any money back when I took out that money without a full understanding of what I was doing? It isn't fair! And those financial institutions don't NEED that money. They're doing just fine.

But I'm not that kind of guy, unfortunately (or fortunately, depending on how you look at it). Did I f**k up? You bet. On MANY levels. I could have gone to a cheaper school and studied the same thing. I could have actually studied something useful. Or I could have left after that first year and not incurred another $25k in debt. And was I properly informed? No. But guess what? I signed my name on those loan papers, just like millions of other Americans. And I have enough honor and integrity to fully carry out the terms of the agreement into which I signed. It sucks, but I'm a man of principle, and I'm going to get out from under this debt. I'm down to $10k now, and I hope to be debt free within 5 years, if not sooner.

So if you don't get anything out of my spiel, please understand these points:

1. Attitudes towards college, education, and finances have dramatically shifted in the past 10-15 years.

2. Students now have way more information in regards to educational opportunities and obligations that 10-15 years ago.

3. The value of a degree has diminished over time

4. Not all millennial's are demanding student loan forgiveness. Some have a little character and are willing to pay theirs off fair and square. At the end of the day I think that's what everyone should do. Whether you were misinformed or uninformed when you agreed to that loan amount, you still agreed, and you still have an obligation to pay your debts.

Racket wrote:

Jsjsjs wrote:

then want their loan forgiven lol.

And why not? We did it for Wall Street in 2008 to the tune of about 3 trillion dollars in bullsh!t mortgage bonds that the Fed still holds to this day.

AIG : bailout.

Auto industry : bailout.

Stupidly over-leveraged banks : bailout.

But when it comes to student loans the triggered and out of touch boomers never cease to amaze

You do understand what it means to have "student loan forgiveness" right? It doesn't mean the loans would just disappear, it means they would be paid by some entity, you understand what/who that entity is right?

I’d say have the loans refinanced to a nominal rate, like 0.5%.

And extend the terms or allow more deferment periods where interest doesn’t accrue.

It’s not loan forgiveness but would help with cash flow which then would be spent into the economy.

On a side note, what percent of most people’s loans are for tuition vs room and board?

It’s not the cost of education but the cost of living that seems to have maybe a bigger impact on this debt.

That's easily my biggest problem with student loan debt and why I think there should be some sort of forgiveness, even if it isn't wiping it all out in one fell swoop. The seemingly purposeful misleading of high schoolers is unconscionable. Any educator should have easily been able to see the devaluation of a bachelors as well as the increase in costs. Even in the last ten years its a lot different, much less twenty or more years ago. Also, the lack of education about how interest rates accrue is appalling. I don't even think that would be acceptable if the interest rate was 1%. However, I think part of this also spills into high school not giving you useful life skills

I graduate in June with under $25,000 student loan debt. I went to community college for 2 years and then the nearest public university the last 3 (CPA requires 5 years of classes, not 4). I think too many people make poor choices regarding choice of school and major.

If you graduate with over 50k of debt, you went to the wrong school. Unless it's an Ivy League, it doesn't matter what school you go to, all that matters is that you get the degree. Go to the cheapest place that has your major. And pick a major that actually is in demand by employers. The tougher your major, the less free time you have in college, but the more fun you can have after college because you actually have a good job.

Where were your parents in all this? I can see where an 18 year old would make a dumb decision but would hope that parents would advise their children to go a more affordable route and major in something that is useful. At the same time at 18 you can vote and serve in the military so that is the age society has determined you can make your own bad decisions and suffer the consequences. Personally I’d raise the voting/military age to 21 but that’s another discussion

Why would anyone go for two masters? You have trouble making up your mind? Or are you a teacher that gets a pay bump for a worthless masters in something like media or art history?

Student loan debt guy lol wrote:

I entered university right around when things really got out of control (2006), and by the time I had graduated I had accumulated about 50k in loans. Maybe a little more, actually.

Many millennials want student loan forgiveness. You'll often hear that it's not fair, to NOT fully forgive student loan debt.

First of all, if you entered the university in 2006, you are a millennial yourself. Likely born in late 1980s, can't be more millennial than that.

Second, lol at this American bullshit. You get raped by crazy medical and tuition fees and think it is fair if everyone else is as much raped as you are. Well it is not. Somehow other countries manage to have free or at least much more affordable medical care and education (funded from taxes, yes, but it's not that they have much higher taxes than US), and some of them manage to actually provide services of better quality.

Too many people are going to university.

The government are aiming for 50% of the population going to university.

Why?