I don't see anyone here exclusively blaming students. There is blame on both sides. Yes college is expensive and something must be done about it or it will become the next big economic crisis in the US. Students knowingly signing legal documents where they agree to borrow large sums of money to pay for college with ill-fated plans to pay it back are also responsible for their own actions. Nobody is forcing them to sign those agreements. It's irresponsible to agree to enter such a financial arrangement and then throw your hands up in the air and say that you can't afford to do what you said you would do. Expecting someone else to provide handouts in order to fix your financial problems isn't a solution. Receipt of additional penalties for failure to adhere to your loan agreement shouldn't be a surprise either.
FC: Student loan debt surpasses $1.5 TRILLION
- Thread starter mn78psu83
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Aside from Phys Ed, my public Junior High School had 4 required courses for every 7th/8th grade student, regardless of gender:
- Home Economics
- Industrial Arts (i.e. Shop)
- Typing
- Personal Finance (learning how to balance a checkbook, set up a budget, introduction into banking and the stock market etc)
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Right, not EXCLUSIVELY blaming students. How generous of you. So they should not go to college and be happy working in a Burger King or landscaping for the rest of their life.
It's not like employers are giving people a pass who don't go to college. Promising careers require it, for the most part.
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anon_xdc8rmuek44eq
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I was going to post something about how countries with the highest quality of life have higher taxes to support things like education and health care, and then remembered where I live, and what board this is. People in the U.S. are greedy. They care little about their fellow man and strengthening their weakest link. They don't buy that rising tides raise all ships - they only care about their ship, and how much money it can hold. The other constant - aside from greed - is the idea that everything exists statically, and things you could do 30 years ago remain true today.
Oooh, you saved money because you normally would not have bought any whoppers.
Even by today's standards earning $15/hr for a summer job is no way near the norm. Assuming you're around 40 years old and graduated about 20 years ago, the $15-17/hr you're quoting seems even more far fetched or a really rare exception (like getting a really high end internship)... and then doing that for four years makes all the more unbelievable.
Yes, but then you would have to cut out phonics to make room for it.
I'd define a promising career as one with demand for college graduates that also has potential for good wages and earning potential, which would enable loan repayment. There are an awful lot of students out there that take on a ton of debt only to major in something with limited career prospects, or in a field with low earning potential. That's fine if that's your bag, but in such cases it would be prudent to get your finances in order knowing the limitations of the selected field. College isn't for everyone and never was intended to be. The world still needs tradesmen. There are jobs out there besides being a permanent fast food worker that do not require a college education.
Much Federal Student Loan debt is sold to private institutions, such as Navient. SALLIE MAE gets it so far and then sells it on just like any other pool of debt.
I’m not saying forgiveness would help the economy - it wouldn’t - but the idea that student loan interest funds programs is mostly wrong, IMO.
My school district required these as well. I'm not sure how common a personal finance course is though. Based on anecdotal commentary I read online, we might be the exception and not the norm. I frequently see high school graduates state that they wish they had received some education in personal finance in any capacity. In my case my family was also very financially astute, so I learned a lot from them too.
And how they limit the number of people and ship the rest off to trade schools.
In 2014, Germany’s 16 states abolished tuition fees for undergraduate students at all public German universities. This means that currently both domestic and international undergraduates at public universities in Germany can study for free, with just a small fee to cover administration and other costs per semester.
Higher education in Denmark is free for students from the EU/EEA and Switzerland and for students participating in an exchange programme.
Tuition fees for universities in Spain are some of the lowest in Europe and are set by the Spanish government. Annual tuition fees in public Spanish universities are generally between €2,000-3,500.
Public Universities. Average tuition fees for a higher education in Italy are between €850-1,000 per year, depending on the university and program of study.
No, lets focus on the students in the US who are foolish enough not to want to work at a gas station the rest of their life. They are the problem. Not the ridiculous system this country has. Let's all make fun of the Millenials and their avocado toast, blame the victim par for the course.
Blame capitalism and other principles that have existed in the US for many years. Until someone assures me that they will provide me with a good quality of life in retirement, the objective of my career is to accumulate enough wealth to control my own quality of life. I don't expect anyone to provide for me, it's on me. So why would it be surprising that people put their own needs ahead of others? Now if I were fortunate enough to be wealthy enough to cover my own lifestyle forever (I'm not), or I had assurances that someone else would provide for me (I don't), it would be a different story.
Many, many other capitalistic countries have affordable or free college. What is Germany?
That's odd because I employ college students during the summer and they make $15 an hour. Trying to find people for $10 an hour to do actual work, well that's unusual.
I was a waiter. $15 an hour was low. But whatever.
LdN
You view life from a very short prism. My first home mortgage was at 17% interest, the average at the time. What's yours?
LDN,
It's good on you for paying them $15/hour. That's unheard of in many locations, including State College. It's not easy to find that type of pay in Pennsylvania.
I know someone who borrowed about 14k for school. Did some kind of deferral on repayment along with not paying in the summer months on some other kind of deferral because she is a teacher and now owes close to 40 grand. She has been paying towards it for close to 12 years now and it only keeps growing. Her min payments are close to a grand and even if she pays that the balance continues to grow. It's a government issued loan but keeps changing hands regularly and she's paying more interest on it than a credit card. I'd say there is something wrong with the fact that she has probably paid her initial balance off about 6 times now and owes more than double that original balance.
A lot of things changed under the Affordable Care Act when the federal government effectively monopolized student loans (From 2010 on). The gov't owns about $1trln with the remaining half a trillion in private hands.
Now, yes the interest does not fund programs. It barely funds the loans as most loans are eventually money losers (despite what people think, the government is losing money on this program and will eventually as defaults rise)
Here's some more info.
"Between 2011 and 2016, the share of privately originated student loans fell by nearly 90%."
Read more: Who Actually Owns Student Loan Debt? | Investopedia https://www.investopedia.com/articl...ally-owns-student-loan-debt.asp#ixzz5F1wZVGz1
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They are in sales. It pays well. It's $9-10 an hour plus commission.
You would be surprised at how few people are willing to go just a little bit further to make 2x the pay.
Most just want the $9 an hour job where they can play on their phone.
LdN
Personally, I also learned from mistakes my family made--the revolving checking account being one (a precursor of credit cards). While I use credit cards regularly, they all are paid off every month.
We are pretty much alone among "first world" countries in regard to higher education and health care. Maybe the rest of the world is wrong and we're right- but I doubt it.
$40k at $1k a month would be over 25% interest. She would benefit from maxing out a credit card to pay that off. The numbers you gave do not make sense.
Just do the simple math. 25% of 40k is 10k a year. If she is paying 12k a year she would be paying that amount down.
She should see an expert. And stop paying.
LdN
If you follow this method, who now teaches the kids before college. The earning potential for teachers doesn't come close to the cost of a 4 year education at a respectable college. So do we now resort to having 2 year degree community college grads teaching kids about physics, chemistry, finances?
Oh these numbers are accurate. Close anyway. It's crazy. Any yes I believe her interest rate is 28%. I think she still does some deferral in the summer months so she's not paying 12 a year but around 9 I think. Her interest is so high because for several reasons one I know of. Ecause she has missed a few payments. Mainly when her loan was sold and she didn't realize it. For instance she automatically was enrolled not to pay in the summer but then the loan sold and she didn't find out for 4 months later when she get a letter from a company she never heard of saying she is 4 months behind and now owes "x" more. I have no idea who she could even talk to for advice about it. There is not much she could do.
You must not spend much time outside the US because if you think Europe has some sort of "fix" for this problem you are wrong.
In France for example, at age 14 about 30% of my friends were told, with no recourse, their future involved fixing cars and AC units. Teachers just gave up on students... letting them walk out of class to go drink beer. It was the opposite of what you imply.
In the UK, where I'm a citizen, they have a massive issue with workers. Why do you think Brexit happened? They have been importing eastern europeans taking the jobs from the "weakest link". Oh but they get a free apartment. Great.
I could go on and on, but yes America is bad. White people especially.
LdN
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1). you could refinance to a lower rate when mortgage prices dropped. Student loans don't have that feature.
2). The interest rate argument for houses doesn't work because housing costs have skyrocketed. For example:
if 30 years ago you financed $100,000 worth of home with a 17% interest rate attached, your monthly payment was $1,426.00.
if that same home today sells for $300,000 with a loan at 4%, the monthly payment is $1,432.00.
The problem is people having the ability to save the capital to put the down payment for the $300,000 home vs the previous $100,000 homeowner. With student loans of $1,000 a month on top of the mortgage payment, it is a lot harder to pull off saving and spending.
She can call one of those 800 numbers on the television. Her interest rate is absurd and borderline extortion.
LdN
QUESTION...
...do you know what time "OW! MY BALLS!" comes on TV? You should come over and watch it with me.
What do you propose for the people the same age that didn't take out school loans that they couldn't afford? Do you send them a nice bonus check for being responsible? Or, is it tough luck, you should have screwed up your future finances too, so you could be forgiven? Loan forgiveness is a big wealth transfer through the government and not necessarily a transfer to those that deserve it.
That's all well & good. I'm telling you from personal experience there are not many jobs available for college students to make that type of money. Most are $10 or less per hour across many areas of Pennsylvania, including State College.
Only because I initially thought it was "your money"
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The majority of jobs are there for the majority of people. I agree this is probably the case. But again, I was a waiter because I knew it was harder work for more pay.
LdN
Honestly thats what I thought. I even put her in touch with a Bankruptcy Lawyer who I knew through a friend. All give her the same excuse. Nothing they can due because its a federal loan. The thing is... She is not trying to have it wiped away. She just wants a reasonable chance to actually pay it off or cut them a check now for the original amount and be done with it. She has worked with the companies managing it but then it gets sold and the agreements dont apply anymore. If she could just find a lawyer to look into it, I can almost guarantee none of the last 4 or 5 companies that were managing the loan have any idea where the loan even originated from, let alone have the proper paperwork.
Yeah that's why the solution is to just stop paying. Or pay it off by borrowing elsewhere. Either one. The latter being better.
But what it seems is that her deferring payments is simply paying late fees. She should stop doing that to begin with. Manage her money so she can make payments through the summer etc.
I'm not a loan specialist, but there's something wrong with her loan.
LdN
