And even now 18 year olds sign up for loans knowing full well the interest rates and promise to pay it back. That’s part of taking a loan lol.
And they’ll complain about something THeY AGREED to!!!!
And even now 18 year olds sign up for loans knowing full well the interest rates and promise to pay it back. That’s part of taking a loan lol.
And they’ll complain about something THeY AGREED to!!!!
Education is not elitist wrote:
I don’t have a student loan sob/success story, because things were different when I obtained my bachelors degree in the ‘80s.
I went to a state-subsidized university nationally ranked for its Engineering and Science schools.
My parents had six kids, and at one point, five of us were in university at the same time.
We were not a family of means — probably best described as lower middle class.
I qualified for some grants, some scholarships, the parents paid some of it, and I had to borrow a little.
During my studies, I interned at an aerospace company which earned me job experience and a little extra money.
The total tuition over 4 years was around $4K-$5K, while room and board cost an estimated $15K, probably more counting beer and pizza.
I left school with under $4K in guaranteed student loans, and about $5K personal loan to my brother for a car, both easily manageable once I continued working at the same company I interned with. I paid my brother off in less than 1 year, and the two loans I had to pay off over 2 years and 4 years, although I could have paid them earlier, there was no benefit to paying them off early, as the terms forced me to pay all the interest too.
Some years later, I obtained a masters degree completely paid by my employer in a fellowship program.
30 years later, I looked at American universities for my son, and the estimated total cost at the University of California was around $65K per year, and I was told, with some luck, he qualified for grants and we could probably get that down to about $50K. Afterwards, he told me he wanted a PhD. With two kids, I’m well enough off, owning a home, and with no debts, but still balked at the idea of funding two educations that would cost upwards up to $1 million, as I prepare for my retirement in about 15 years.
I graduated in the late-80s, so what the heck happened in the last 30 years?
I’m all for personal responsibility, so I’m not inclined to suggest complete debt forgiveness as a general solution. I’m similarly generally not in favor of bankruptcy protection, but we should not forget some of America’s founders came from debt-prison, still sore from the tyranny of lenders, so bankruptcy is a fundamental part of the American system. To understand the entrenchment of the role of bankruptcy in America, we need look no further than the current US president.
While indebted students should bear some of the responsibility for their own personal choices, they cannot be blamed for the scale of the student debt crisis. I think it is unfair to point the finger *only* at “selfish” millennials, accusing them of only wanting everything for nothing (who are inheriting a world from baby boomers and generation Xers with massive national debt, credit card debt, housing debt, and complications from global warming, that they played no role in creating).
In order to create a problem on a national scale, you often need a combination of government and business to create a truly pathological and unsustainable situation for the masses.
While some talk about the irresponsibility of entering into a $50K-$100 obligation, and having no sympathy for the $80K art degree student unable to find a job, much of the defaults are for loans less than $10K, often from students who dropped out of university for whatever reasons, unable to get a high paying job without a degree, and many students with degrees still unable to get a high paying job.
Some factors:
One thing to keep in mind is that the student debt crisis is unique to the United States. No other country places such a heavy burden on their future. How is America getting it so wrong, when the rest of the world is not, and even America was doing it better just a few decades ago? The scale of the problem is a combination of several factors:
- Government policies intended to make higher education available to those who cannot afford it, essentially giving banks and lenders a risk-free source of loans and guaranteeing that university tuitions will be paid.
- 18 year olds forced into complex loan agreements that they do not understand. You might ask where are the parents, or at least professional counselling, and rightly so, at least in part. Some of these parents are well-intentioned, might not have gone to university themselves, wanting better opportunities for their children, and might not themselves have understood the complexity of the evolving financial landscape. It was a formula that worked not too long ago in the ‘80s, and ‘90s.
- Some predatory lenders charging high interest rates, or worse, forcing those who make late payments into taking new loans with harsher terms and higher interest rates, making the debt-trap even deeper
- Universities raising their tuition fees effectively to the maximum amount their students can borrow
- Too many students choosing to go to university
Some negative consequences:
- High debt burdens negatively impact the economy, as money that would be spent buying houses, cars, and other consumer items, is instead directed to student loans, while ex-students live frugally, many still with their parents.
- Parents of these students eventually want to retire, and not have to continue supporting their adult children, or help raise another generation of grandchildren.
- Interestingly, women are affected more, as are minorities, and particularly the combination of minority women. Women own 2/3rds of the student debt. They still earn less money then men. Many women end up delaying marriage, delaying having children, and often not having children at all.
Who, at 18 years old, would understand that the choice they are making is trading a college degree for a decade or two of their adult-life, or sacrificing having children of their own?
Suggestions:
- Fix the policies that created the massive scale of the problem. Without going into too many details, seems like rolling back to the ‘80s would be a step forward.
- Generally, to solve a problem of massive debt, debtors should get consolidations loans at low interest. Government programs to enable and encourage consolidations loans, even if they are partially subsidised, seem preferable to outright forgiveness.
- Recognize the role of banks and universities, and expose them to some risk and burden. Rather than forgiving student debt, why not identify and tax or fine universities and banks that have abused the system for their own profit, for their role in making the problem bigger than it should have been.
- Align bankruptcy protection for student loans with other foms of consumer debt.
- Government option: Aren’t state-subsidized schools supposed to be the affordable option? In the ‘80s, I had a choice between a state school (est. $20K for tuition, room and board total over 4 years), and a private university, in my home town, which was about double the price (est. $40K over 4 years), unless I lived at home. At the very least, community colleges should be an affordable option for the very poorest. In the worst case, if I borrowed the whole amount, I had options to keep it limited to about $20K in 1980s dollars.
- What exactly is the role and value added of “for-profit” universities: They lead the statistics with higher costs, most defaults, and low value degrees. I think universities should not be seen as a “for-profit” business, as society is better off when those that show promising intellectual potential are able to get a higher education, rather than only those who can simply afford it. But I don’t want to seem anti-capitalist — “for-profit” universities should co-exist, but should also be able to compete on the merits with public and private universities.
- If America’s system is broken — go abroad. Universities want cultural diversity. Canada’s universities are still affordable. German and French universities are essentially free, outside of travel and cost of living. Many universities teach in English, so language is not a great barrier.
- Expert counseling — independent expert advice which explains the options to students (or their parents) about the expected costs for a degree, expected prospects for employment with that degree, expected starting salary, expected time to repay the loan, combined with other expenses of starting a new job, and a new life, possibly in another city.
Well put and a good perspective. I appreciate this guy for being honest about his personal experience and how that connects to the current situation. Too many people (young and old) are standing on the sides of this situation pointing fingers.
It's alarming that many previous posters look with 20/20 hindsight and judge 18 year olds for not "upholding their commitment" and maintaining the expectation that a 18 year old should understand the mechanics of a multi-tiered loan program that is their only option to get the college degree that most everyone around them is telling them they need to get.
Student loan debt guy lol wrote:
I've been seeing so many social media posts / articles / discussions lately. It seems to be ramping up, though it has been a high profile topic for years.
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.
While a part of me understands their frustration, what do those millennials have to say about someone like me: I worked hard in a competitive major, which led to a stable job. I also live frugally in a tiny, cheap home and never buy things like new clothes, electronics, etc. Unless I need to. Ive had the same cell phone since 2013. Because of this, I've never missed a monthly loan payment and I've pretty much almost completely paid the loans off. Has it set me back? Yeah, obviously. Would they be willing to cut me a check for $50k?
ahhh, the ol' "I didn't get this so F-you" argument.
Millennials have the greatest disposable income EVER AND mommy and daddy STiLL helping with bills and they still blow it with their eating out 4 times a week to sushi and craft beer and instagramming how great their lives are while bitching about college loans. STFU
Why are you and other student loan holders entitled to tax payer money to absolve you of the consequences of your poor choices? As much as you and other student debt holders whine and complain about your poor choices, no one is obligated to help you. Comparing this to bank bail outs is a non starter as the banks were loaned money by the government that was PAID back. You’re advocating for money NOT being paid back by debtors who will still benefit from their now ill gotten professional gains.
For the record, even back in 2008 when I graduated from high school, high schoolers knew that student loans had to be paid back and could be a huge burden, but most narcissistically took them out purely to finance the “college experience” in most cases. I fall into the camp of people who knew that loans were a huge burden and made decisions accordingly to avoid taking them out. I went to CC, commuted from my parent’s house, worked 24-32 hours a week to graduate debt free. Yes, that lifestyle meant a lot of sacrifices for an 18-22 year old. No parties, dating was tough for a guy who lived with his parents, etc., but that was the price to be paid for having a successful post college life. I now own my house, my car, have plenty of money to save, invest, play around with once my bills are paid. At 29, I’m just hitting my stride. I invested in my future.
Student loan holders had the same choices, but largely decided to pursue short term pleasure and instant gratification. Now the party is over and they want to renege on their side of the contract. Sorry folks, but you need to pay the piper. Forgiving your selfish decisions drags society down a very slippery slope even further. What’s next? Forgiving auto loans that people just needed to have the fanciest new car so they could feel good and pretend that they’re better than they actually are?
F’ing wrecked the limp wristed liberal. ?
The definition of a loan is "money lent at interest"
A Definition of lend is "to let out money for temporary use on conditions of repayment with interest"
It's a loan; money was lent to you with conditions that you signed up for.
Nothing else matters - not the cost of the education, not the interest rates, nothing (those are irrelevant to any proposed "loan forgiveness"). You promised to pay back money at a prescribed interest rate over a fixed period of time. You knew the rules of the game before it started (and if you didn't, that 's on you too, because you are responsible for yourself).
There's an old adage in investing - "Don't invest in anything you don't understand." I'd add that if you don't understand how a loan or interest rates work, then you shouldn't be borrowing money until you do.
Not paying back a loan is breaking a promise (and a written contract).
I'm not a fan of people who break promises.
If I get 0% financing to buy a car that's not a loan?
It seems like something that I have to pay back.
X-Runner wrote:
If I get 0% financing to buy a car that's not a loan?
It seems like something that I have to pay back.
Um...no, the agreed interest is 0% - that's all. Oh, and don't miss one single payment, because if you do, it'll revert to a very high interest loan. It's all there in the terms. Which you signed.
It ain't rocket science.
I think students have big loans debt because they spent a lot of time on lessons and assignments. They have no time for a job. For example, I use a special service where I pay to writer and have more time for job.
The Government and other non-profit already provide 'debt forgiveness' options. Join the military, peace corps, or your employer may offer loan repayment options provided you work for 5 plus years for them. Granted these are not always the sexiest of jobs, the best paying, or in the best and/or coolest or locations. There are options to get help with your student loans, but people likely do not want to trade off service in the military or non-profit to get it.
There is no way the government will wipe out these student's debts despite the promises of the new democratic hopefuls (not including Klobuchar). Especially, when these students had lower cost options available to them. Don't give me the 'I had to go to this particular private school for 4 years for a degree' b.s. You were paying for the college experience and wanting to go to the college that had all the cool amenities that appealed to you. Plenty of kids go to community college for the first 2 years before transferring an university to complete their general courses and save money in the process.
Also, we need to stop saying all kids need to go to college. They don't. High Schools should bring back vocational courses and teach kids life skills that can transfer to a job out of school. Then rather than just looking at a prospect of flipping burgers because they have no skills and no college degree, they could have skills transferable to work in the trades.
Best case is to allow students to refinance the loans as rates fluctuate and teach kids and parents about the financial implications of their choices for college in high school before they decide to take out all these loans.
If they somehow do pass legislation for debt forgiveness, my guess is it would only be for a small amount equivalent to 2 years in the cheapest community college in the state their parents held residence as they have to apply the debt forgiveness uniformly. They would also have to deal with some sort of credit for those within a certain age range or graduation range that were aggressive and paid off their loans. Otherwise you are effectively penalizing people for being responsible and paying off their loans. Lastly, they would have to find a way to pay for all this.
Oregon Trail Junkie wrote:
Lastly, they would have to find a way to pay for all this.
Tax the rich. Duhhhh
But remember, we will have to pay for universal daycare, universal paid paternity leave, universal basic living wages, universal health care, pay for those unable or unwilling to work, and reparations.
What if they just made it so student loan debt was dischareable in bankruptcy? You know, like every other sort of loan in the world.
WeakPeople wrote:
Why are you and other student loan holders entitled to tax payer money to absolve you of the consequences of your poor choices? As much as you and other student debt holders whine and complain about your poor choices, no one is obligated to help you. Comparing this to bank bail outs is a non starter as the banks were loaned money by the government that was PAID back. You’re advocating for money NOT being paid back by debtors who will still benefit from their now ill gotten professional gains.
For the record, even back in 2008 when I graduated from high school, high schoolers knew that student loans had to be paid back and could be a huge burden, but most narcissistically took them out purely to finance the “college experience” in most cases. I fall into the camp of people who knew that loans were a huge burden and made decisions accordingly to avoid taking them out. I went to CC, commuted from my parent’s house, worked 24-32 hours a week to graduate debt free. Yes, that lifestyle meant a lot of sacrifices for an 18-22 year old. No parties, dating was tough for a guy who lived with his parents, etc., but that was the price to be paid for having a successful post college life. I now own my house, my car, have plenty of money to save, invest, play around with once my bills are paid. At 29, I’m just hitting my stride. I invested in my future.
Student loan holders had the same choices, but largely decided to pursue short term pleasure and instant gratification. Now the party is over and they want to renege on their side of the contract. Sorry folks, but you need to pay the piper. Forgiving your selfish decisions drags society down a very slippery slope even further. What’s next? Forgiving auto loans that people just needed to have the fanciest new car so they could feel good and pretend that they’re better than they actually are?
College loan debt is nothing like a fancy car debt. A fancy car debt is a luxury and everyone knows it's a bad investment. Until the last 10 years or so, the mantra has been "Education pays." The values of our society STRONGLY encouraged people to get their education at all costs. Well, those costs spiraled out of control, but 18-year-olds with no life experience were understandably following the mantra of "education pays." Honestly, what percentage of parents were telling their kids NOT to go to college?
And at 18, do you really want kids to decide that they can't pursue their full potential? It's not the same as buying a fancy car. If you bypass on a fancy car, you realize you are by passing on a material good that can bring you joy. But if you are bypassing on getting the best education you can, you are basically making a decision that you don't have enough faith in yourself to pursue your full potential. You are deciding that you aren't worth investing in. Why are we the only country in the world that has this problem? It's not the kid's fault, it's a broken system. They shouldn't be faced with the decision of whether to spend a quarter million dollars on their education or comprising on their potential before they are even old enough to drink. It's not fair to place them in that position. Frankly, I wouldn't want my kids to decide that they were going to settle for less than there potential at age 18.
I'm not saying kids should be borrowing 250k to pursue their dreams. I'm saying they shouldn't even have that as an option. We just gave billions of dollars away to the richest corporations in the world with a tax break. some of the companies are paying ZERO in taxes this year. Don't you think we can figure out a way to NOT have the most expensive education system in the world?
how about this? wrote:
What if they just made it so student loan debt was dischareable in bankruptcy? You know, like every other sort of loan in the world.
What would stop any student from just declaring bankruptcy right after they graduate? I think it would just make it harder for students to get loans.
But, I guess it would be one way to provide 'free' education to the masses.
you sound like a real winner wrote:
College loan debt is nothing like a fancy car debt. A fancy car debt is a luxury and everyone knows it's a bad investment. Until the last 10 years or so, the mantra has been "Education pays." The values of our society STRONGLY encouraged people to get their education at all costs. Well, those costs spiraled out of control, but 18-year-olds with no life experience were understandably following the mantra of "education pays." Honestly, what percentage of parents were telling their kids NOT to go to college?
College loan debt IS like fancy car debt. Why did one choose to go to a college that costs $50K a year when they had cheaper options (other public universities throughout the nation, 2 years of community college, etc). These kids chose the more luxurious college because it looked pretty with the new buildings, had a fancy dorm room, gourmet cafeteria, low class sizes, cool experiences, etc versus living at home for 2 years and getting their general education courses completed before transferring to a public university to finish their degrees. Rather than working part time during school and full time during the summer to help pay even a little bit towards school, they took the summers off and used their spare time to make memories in college and relied on these college loans completely. They paid for the college experience and this experience is a luxury.
Education is not elitist wrote:
LONG INSIGHTFUL POST
I enjoyed your post and agree with your sentiments.
I will state that I am near $50k in student debt still. I graduated from undergrad during the Great Recession. I went to graduate school the first time because it was all that was available to me and seemed like the best option to further my career and, well, not starve . Local news dubbed the recession impacts locally as "brain drain" from the nearby institutions. This was making the lives of job applicants very difficult. I also was not making enough money to get out and test other places either.
With many student loans the university takes what they need first and then sends you a refund check. Many semesters I would get a refund check of about $1800 to last me approximately 20-weeks with spring not including summer. Often times this would not suffice for 3 months rent and basic necessities in my locale. Loan amounts were determined on decade old rent rates. Meanwhile, my campus and surrounding area were experiencing rental building growth which was further complicating the price floor. Again, jobs were quite limited on my campus and when I did get university affiliated jobs theyd be $12/hr for high skilled work. It was a joke!
I recall one summer I worked for eight or nine weeks, mid-June to August, and didnt recieve a paycheck until September. Was this wrong? Definitely YES! Could I do anything about it? Sure, voice an opinion but then I'd lose my job and future university reference. Co-workers were more than upset and some rightfully quit. There were plenty of people waiting in line for their jobs though. One person quit and over 100 applied for her position. Twelve an hour was a good for a student job at the time too. This was a tough summer for me and I am sure many others.
Things I would like to add to the post written by "Education is not elitist" is that from Kindergarten onward educational achievement was emphasized in our curriculum. Scratch that, the need for educational achievement was indoctrinated.
The competition started in second grade for the gifted and talented programs and high math classes. You needed top grades to get into high math. You needed high math to get in high middle school math. You needed high middle school math classes to push you into the window of opportunity to take advanced Calculus courses while still in HS. Finally, you wanted to do near perfect in high school so you could get into a competitive university and obtain a good job. Because if you didnt get a good job you would be unsiccessful and poor which nobody wants.
Choices and decisions started early. What went into those decisions was an "at all costs put education first" attitude. At 18-23, coming from non-supportive parents who simultaneously displaced me from varying levels of financial aid due to their incomes, of course I signed those documents without a second guess. My mentality was that I would do anything for my education because it would lead me to success.
In essence, I graduated with a competitive major with a 3.4 GPA at a very good school. I went the same school for graduate school. Now being in my early thirties I can visually see the facade and trap I fell into. It is not your work ethic or your grades that necessarily get you from point A to point B or to success. Success is something many people are fraternized with more so than it is rewarded to those who work hard. This really, really sucks for the people who had dreams fueling their pursuit. My vision, in particular, was not what to be where I am at today. Loans have crippled my life and permeated many other parts of it too.
Millenials were indoctrinated with the notion that post secondary education was vital for success. We were coached that a linear relationship between educational achievement and long term financial security (success) existed. We were taught along with the 20 or so classes behind us and 10 or so in front of us that basically nothing would be as important as our college education.
Well, I did what I was told. What I was told was not a lie but rather an assumption or an ideal. The problem was I was characterized, molded and grown around those ideals and those ideals halted when I graduated.
Bottom line is by the late 1990s and early 2000s too many kids were sent to college which saturated the salaried job market. Another problem is that the cost of a college education far exceeded inflationary measures. To afford it, people like me did whatever they had to get to the finish. Then right when I got out the surrounding economic reality hit me hard.
Sorry for spelling errors! Phone keyboard is terrible.
I am a winner wrote:
you sound like a real winner wrote:
College loan debt is nothing like a fancy car debt. A fancy car debt is a luxury and everyone knows it's a bad investment. Until the last 10 years or so, the mantra has been "Education pays." The values of our society STRONGLY encouraged people to get their education at all costs. Well, those costs spiraled out of control, but 18-year-olds with no life experience were understandably following the mantra of "education pays." Honestly, what percentage of parents were telling their kids NOT to go to college?
College loan debt IS like fancy car debt. Why did one choose to go to a college that costs $50K a year when they had cheaper options (other public universities throughout the nation, 2 years of community college, etc). These kids chose the more luxurious college because it looked pretty with the new buildings, had a fancy dorm room, gourmet cafeteria, low class sizes, cool experiences, etc versus living at home for 2 years and getting their general education courses completed before transferring to a public university to finish their degrees. Rather than working part time during school and full time during the summer to help pay even a little bit towards school, they took the summers off and used their spare time to make memories in college and relied on these college loans completely. They paid for the college experience and this experience is a luxury.
And where exactly are you getting your data from?
All the kids I know who chose an expensive school chose it because they believed it would get them the best job and provide the best education to help them achieve their goals in life.
Honest fact, the best and brightest rarely teach at community college.
In hindsight, I can say community college makes financial sense in a lot of cases, but I don't blame anyone for not wanting to take that route at 18. To an 18 year old, it's as if you are already giving up.
And honestly, why should our brightest kids have to go to our worst schools purely for financial reasons? In the long run, it seems like a misallocation of resources.
Well, there are standards for bankruptcy. You can't just declare it because you want to. A court has to approve it. With income based repayment plans available I think many people would not qualify. Many people would also not want to live with the consequences of a bankruptcy on their credit report. It is quite a hindrance to getting other credit, buying a car renting an apartment, and oftentimes even getting a job. It might make it harder for students to get loans or require higher interest. One possible outcome. I just think it makes sense to treat student loan debt similarly to other kinds of debt.
Oregon Trail Junkie wrote:
What would stop any student from just declaring bankruptcy right after they graduate? I think it would just make it harder for students to get loans.
But, I guess it would be one way to provide 'free' education to the masses.
Am I living in the twilight zone? The Boston Marathon weather was terrible!
Is there a rule against attaching a helium balloon to yourself while running a road race?
How rare is it to run a sub 5 minute mile AND bench press 225?
Move over Mark Coogan, Rojo and John Kellogg share their 3 favorite mile workouts
Mark Coogan says that if you could only do 3 workouts as a 1500m runner you should do these
Matt Choi was drinking beer halfway through the Boston Marathon