This is the market trying to correct itself. Way too many people want to go to Harvard.

Nope. Harvard is about half of that.

There is nothing unique about Harvard’s cost. There are many schools with the same cost.

If they are smart enough to go to Harvard (whatever that is), they should understand the value of the investment they are making and the realistic ROI. "If I'm going to invest XX, how much more will I earn and how long will it take to pay it back.......taking into consideration economic impacts??"


"Harvard" educations ain't what they use to be in today's market.

Our son and his wife each have over $200,000 in student loans, and they didn't attend fancy ivy league schools. College is way more expensive now than it was when we were students, and these young kids have been victims of predatory lenders who charged exorbitant interest rates. Our son has been paying for at least 7 years, and has not yet started paying off the principal. I personally think there should have been more government oversight of the loan process, so the financial institutions were not taking advantage of the kids. As someone else mentioned, college is now the norm. When we were younger you could skip college and be assured of a good job. Not so much anymore unless you have the skills to get into a trade, which not everyone does. I'd like to see kids being given the opportunity to attend state universities/colleges for free for two years, the same way the government sponsors free high school education. I think our society has evolved to the point where that is needed. Any college education after that would be up to the individuals. As far as dealing with the existing debt, perhaps a scheduled forgiveness program if they serve a certain amount of time in certain volunteer/government sponsored programs like teaching in problems school districts for example.

When suggesting free just keep mind there is no such thing as free to the provider. They and now more that it is free will need to be paid....higher taxes...we all get to pay for the "free" stuff.....that is OK as long as folks keep in mind all the impacts of what ever is suggested or implemented.

And once the government gets into control then there will be ever increasing costs and inefficiencies....just because it is the government....and they do not use check book discipline.

Legally, "predatory lending" can only apply if the borrower is mentally unfit...otherwise the court will determine it just "foolish borrowing". it's almost like a lot of people don't read the loan document.

Its almost like an 18 year old is economically naive. Who would have thought...

As far as "free", it makes sense to have members of society educated enough so they can contribute more. In the long run, that pays for itself.

This applies ONLY if you attend university in order to make money. But people attend for other reasons.
I had a lovely 75 year old lady next to me by the computers at the university. She had the most amazing large diamond on her finger, made it hard for her to type. I found out that she owned a large number of pharmacies, and was quite well off, but she never got her master’s degree. At graduation, she was the oldest student on the stage.

I think this is what the thread is about.


:ohdear:

Sounds like your son did not read documents. Sounds like parents did not assist in understanding. Nothing is free.

Simple and accurate.


:coolsmiley:

I think your son borrowed too much money, especially if he is a teacher. Did he go to a community college and work part time for two years before going to a university? That would have saved money. But, $200,000 is way too much debt for a teacher to expect to pay back. He should have done the math. I understand that it is too late, but I wouldn't blame the lender or the Government.

Well if this thread is solely about money, then we need to consider the real cost of higher education. It is not only the tuition fees, residence and living expenses, it is also the foregone income. Assuming a job after 2 years of college, one starts to earn a salary, compared to 4 years for BA, 2 years for MA, then professional certification, or residency etc or 6 years for PhD (which is the norm in my field) in some it can be only 4 years. So at least 8 years of foregone income should be added to the direct expenses to calculate the true price of education.

I think this thread is simply about taking out a loan and then paying it back. If you want to borrow money to go to school, then fine, do the math, and calculate how much you can afford to borrow, and make a plan to pay it back. But, don't expect someone else to pay off the loan for you. That is your responsibility.

Retired, your comment is very reasonable. I was trying to look at the bigger picture. For the students at age 18 or so to make those financial calculations, they need guidance either from parents or counselors. In their young, ideal state of mind, I’m not sure how many actually think it through.

I agree that students should seek advice from parents and counselors. But, in our current legal system, when you become 18, you have the authority to enter into legal and binding financial contracts, and other contracts. Maybe, you are suggesting that we should raise the age to do that?

Well as an educator, you can guess what my answer would be, the school system needs to do a better job educating the students about financial decisions and responsibilities (since we can’t guarantee the parents will).

I totally agree.

I am the OP and this thread is NOT "...solely about money...".

It is about responsibility and honoring one's commitment...AS AGREED TO AND SIGNED FOR.....

Most of what we hear about is how unfair it is to expect people to to be burdened with such unreasonable education debt.
It was certainly not unreasonable when the agreed with the criteria to get the money.

It is a shame the responsibility has been politicized and now makes the obligation a selective decision.....with no penalty.

Too many of us have been in similar financially burdened times during those early years post graduation.....and made the right choices where and how/how not to spend our precious financial resources to MAKE SURE WE MET THE AGREED TO FINANCIAL OBLIGATION.

There is no excuse to default on the loans and the government pick up the tab.

We are becoming more and more tolerant of selective application of laws and obligations.

I thought that is essentially what I said in Post No. 56.

Since 2004, "National Flood Insurance Program has borrowed $39.4 billion from taxpayers. It has repaid just $2.82 billion of that principle. In a report last September, the Congressional Budget Office projected that, as currently structured, the program should be expected to lose $1.4 billion on an annual basis." Yes, everyone should pay off the loans they took out, but in this case, those who don't need flood insurance, will also have to help pay off the loan. Shouldn't those who have federal flood insurance be the ones responsible for paying off the loan? Socialism?

Why not provide the same handout proposed to those of with a college degree to include their peers. Why would we gift one segment of society? Those who provide some of the most essential services to society without a college degree and work tirelessly for smaller wages need to be rewarded too. Where does it stop?

Well, I agree that the loans should be honored, my daughter took out loans and is paying them off. Has never missed a payment. BUT what upsets me is we give money to bail out banks, and other companies, but we charge the students a higher interest, when some if these companies get off free. I am NOT saying forgive loans, but interest should be based on merit, ie. payment record, graduation, etc. These kids ARE the future. Lower the rates!!!!

I totally agree with your observation.

You are welcome to your opinion. But you don't seem to grasp that things are different now than when we were in the position to attend college and borrow money. Many posters have indicated what those differences are. One of the biggest is predatory lenders. "Back in the Day" we borrowed money via government loans. Many of those loans have dried up and kids are saddled with ridiculous loan interest rates from banks, who benefit from fleecing the kids, and the students pay double or triple what they would have when we were borrowers years ago. When society tells you you "have" to go to college to get a good job, you take the bait and you sign up for the loans as it is the only means of attending college. Then you graduate, and maybe things don't go as planned. The economy dries up - you can't get a job in your field, or the salary is much lower than the College advisor told you it would be - many of today's colleges are money making propositions and they really exaggerate to the potential students how good the various fields of study and job opportunities will be, just to get them to enroll. Couple that with financial naiveté, and it can be a recipe for disaster for some kids. No one is suggesting that people should get a free ride or skirt their responsibilities . But the system needs some changes.

We, the taxpayers, should never payoff student loans for others. I owe, I owe, it is off to work I go.

If you the government money they charge us 10%. That is also highway robbery.

Blaming "the system", Blaming "banks", Blaming "society"........your son must take responsibility for what he signed. If there is fraud, get a lawyer. If not and IF there is fleecing, refinance.


:ohdear:

I agree with all who state that a student loan is the responsibility of the person that undertook it. I cant see how it is right to ask many who did not go to college to subsidize through taxes those that did.

To the individual that states only the government may make student loans this is from Wikipedia.

The main types of student loans in the United States are the following:
Federal student loans made to students directly (Stafford and Perkins loans).[28] These loans are made regardless of credit history (most students have no credit history); approval is automatic if the student meets program requirements. The student makes no payments while enrolled in at least half-time studies. If a student drops below half time or graduates, there is a six-month grace period. If the student re-enrolls in at least half-time status, the loans are deferred, but when they drop below half time again they no longer have access to a grace period and repayment must begin. All Perkins loans and some undergraduate Stafford loans receive subsidies from the federal government. Amounts of both subsidized and unsubsidized loans are limited.
There are many deferments and a number of forbearances (cancellation of loan) one can get in the Direct Loan program.[29] For those who are disabled, there is also the possibility of 100% loan discharge (cancellation of loan).[30] Due to changes by the Higher Education Opportunity Act of 2008, it became easier to get one of these discharges after July 1, 2010.[31] There are loan forgiveness provisions for teachers in specific critical subjects or in a school with more than 30% of its students on reduced-price lunch (a common measure of poverty), and qualify for loan forgiveness of all their Stafford, Perkins, and Federal Family Education Loan Program loans totalling up to $77,500.[32] In addition, any person employed full-time (in any position) by any 501(c)(3) non-profit, or another qualifying public service organization, or serving in a full-time AmeriCorps or Peace Corps position,[33] qualifies for loan forgiveness (cancellation) after 120 qualifying payments. The 120 qualifying monthly payments do not need to be consecutive; they can be interrupted without penalty if there is a period of employment with a nonqualifying employer,.[34][35] However, loan forgivenesses or discharges are considered taxable income by the Internal Revenue Service under 26 U.S.C. 108(f).[36]

Federal student loans made to parents (PLUS loans):[37] Much higher limit, but payments start immediately. Credit history is considered; approval is not automatic.

Private student loans, made to students or parents: Higher limits and no payments until after graduation, although interest starts to accrue immediately and the deferred interest is added to the principal, so there is interest on the (deferred) interest (which Is not the case with subsidized student loans). Interest rates are higher than those of federal loans, which are set by the United States Congress. Private loans are, or should be, a last resort, when federal and other loan programs are exhausted. Any college financial aid officer will recommend you borrow the maximum under federal programs before turning to private loans.[38]

I think the Federal student loan program used to be operated by banks where the Government would guarantee the loan to protect the bank. Now, most student loans are not bank loans, but direct loans from the Government. Obviously, any bank can lend money to anyone for any reason, based on the borrower's credit rating, without Government involvement.

I disagree with the notion "...things are different today..."

I have two grandchildren who got student loans. They graduated. They had a tough time getting what they thought was going to be a financial post graduate beginning.

They and their spouses had to work. They drove older cars. They bought very small "affordable" housing. No eating out. They had non smart flip phones for several years. Etc. Etc.

Fast forward their loans are paid off. They have much more lucrative positions and all else that flows from success.

As I see it....not much has changed. It is the drive of the individuals that honor their obligations by making short term sacrifices.

What is of significance these days is the interest rates. When I had my Federal student loan it was at 1.5% for 10 years.

There is no reason for the high interest rates of today for such loans.

I maintain my opinion, there is no reason that loans should be forgiven. Instead the government, the banks, the parents et al.....should all endeavor to restructure what ever needs to be done to honor the debt. WHATEVER IT TAKES.

That is what will have a positive effect on the future.....drive and responsibility VS a hand out and loan forgiveness that breeds a bail out expectation.....instead of can do....must do....will do.

Thank you. You wrote what I think, too.

Unfortunately, the preaching of platitudes from a narrow, dated perspective is the name of the game for those who refuse to acknowledge that this is not a simple issue.

This mess will strangle segments of the economy — the housing market and retirement savings for starters. And it will eventually contribute to the erosion of the middle class.

The percentage of an average family’s income that even one year of college tuition represents is an obscenity. This is not how it was “back in the day.”

The beginning of this century saw banks getting way into getting a piece of the student loan action, along with the rise of those for-profit “colleges” that sprung up all over the place, with empty promises.

Established universities need to be held accountable for rising costs. Many must be swimming in money. I was shocked to learn that installing lazy rivers is the latest trend. That is plain insane.

A lot of young people are like lambs to the slaughter.

This mess is a horrible stew with many ingredients, some of them pure poison.

The solution is in finding a compromise through forward economic thinking and planning — not in waving an imaginary magic wand.

Students should be responsible to pay off their student loans but it is just as responsible to pay off their loans at 3% as at 10%. Also it is ridiculous that the loan is accumulating interest while still in school. Graduates would be helping the economy much better if they were buying cars, houses, eating at restaurants then paying off large monthly loans. We were so lucky we had the means to pay our children's postgraduate ( and some graduate) schooling.

Exactly. This is a huge mess that has significant impacts on our society. Most of the students WANT to pay it off, and they are. But in the meantime, they are not buying new cars, they are not buying houses, they are not spending money that would benefit other portions of the economy. The people profiting are the banks and the for profit colleges. When I went to school, even a two year community college was about $350 per semester, plus an additional $100 or so for books. I worked summers and was able to finance it myself. Now this same school is $2200 per semester, $600 for books and supplies. And that is a state government sponsored school.

Private schools are another whole ball of wax. The school I went to is now $25000 per semester plus $8000 per semester housing/meals plus $1400 for books. That is per semester i.e. nearly $70,000 per year. If one is fortunate enough to get government student loans, there are provisions that tie repayment plans to income. In contrast, private loans are much more expensive, may not be able to be consolidated for repayment and may not have any options for lowering loan payments over the life of the loans. There may be prepayment fees. Forbes did a big article on Student loans and how the shift from greater public funding of higher education to individual financing has negative social and economic effects and are an enormous drag on nationwide economy. It ends up being a vicious cycle. Having students bear the risk means colleges can keep raising prices and push the costs onto the students, who then take out more loans, often from predatory lenders.

My point is, the system needs to be fixed. If our society values and requires college education for people to be successful and to contribute to said society, then we need to find a way for people to attend college with incurring hundreds of thousands of dollars of debt that will take 20 years or more to pay off.

The shrill cry of "how I did it" and the refusal to understand how the world is different today is the biggest drawback in so many areas where we can grow.

There appears to be no listening or entertaining anything new at all, as if the world has just stood still for so many years.

At the risk of being deleted, I am not going to post a link but suggest folks read about A. Wayne Johnson, who recently resigned as the overseer of student loans and his viewpoint on student loans. Read his new proposal just publicly stated a few weeks ago.

So quick to label folks who are trying to solve problems. If it a'int my idea it sucks. right ?

If it a'int my idea it sucks. right ?[/QUOTE]

With some people, no matter how reasonable and fair it is, they would oppose it. What is that called??

Contrarian.

With some people, no matter how reasonable and fair it is, they would oppose it. What is that called??

Contrarian.[/QUOTE]

When you do it with no reason given or supplied...and just call the "idea maker" names, it is ignorance

This thread has about 90% posts haring personal stories, with no recognition of facts supplied...defaultshave been going down steadily, the change in income that is available. As usual, it is, we are older...we did it correctly, nothing's changed, why can't you others do it how e did it. The implication in most posts is that they are the last of honest people, and if you read any news at all, you know that is not true.

When you do it with no reason given or supplied...and just call the "idea maker" names, it is ignorance

This thread has about 90% posts haring personal stories, with no recognition of facts supplied...defaultshave been going down steadily, the change in income that is available. As usual, it is, we are older...we did it correctly, nothing's changed, why can't you others do it how e did it. The implication in most posts is that they are the last of honest people, and if you read any news at all, you know that is not true.[/QUOTE]

That is one observation!! Not the intent in raising the subject. However it is understandable when one needs to reinforce their view.

What is being over looked is the focus is on those who would default on their loans facilitated by an environment that is sympathetic to reasons why it cannot be done.

Citing experiences, yesteryear as well as current was/is intended to raise the issue of making it happen.

To each his own views or opinions without oblique minimization.

• Outstanding student loan debt reached an all-time high of $1.41 trillion in 2019.
• Soaring college costs are a big factor in student loan debt, with out-of-state tuition and fees averaging $26,290 per year for a four-year public university and $35,830 for a private college.
• The average student loan balance per borrower hit a record high in 2018: $35,359.
• Borrowers who don't complete their degree have a harder time paying off their loans.

The averages are not devastating. The extreme borrowers (who are the minority) are the problem.


11% of student loans are +90 days delinquent.



37% of people who took out student loans never finished college and earned a degree.


People who get more advanced degrees tend to accumulate more debt, but they are also likely to make payments on their student loans on time. These people knew what they were doing. It was not greedy bankers.