Ken777
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Student Debt Nears $1 Trillion

Fri Mar 01, 2013 4:48 am

Rather scary headline that caught my attention.

Quote:

Total student debt has nearly tripled over the past eight years, a new report from the New York Federal Reserve has found.

Total student debt stands at $966 billion as of the fourth quarter of 2012, the N.Y. Fed said in press materials, with a 70 percent increase in both the number of borrowers and the average balance per person. The overall number of borrowers past due on their student loan payments has also grown, from under 10 percent in 2004 to 17 percent in 2012.
http://www.huffingtonpost.com/2013/0...t-debt-new-york-fed_n_2783103.html

It might be easy to hit on the HuffPost, but the information came from the New York Federal Reserve. That gives it a lot of credibility.

It also points to a lot of concerns that are going to be related.

Quote:

Fewer people with student loans are buying homes, according to data in the report. Of borrowers ages 25 to 30 who are taking out new mortgages, the percentage of those with student debt has fallen by half, from nearly 9 percent in 2005 to just above 4 percent in 2012.

When you exclude the insanity (and fraud) of the housing bubble there has been an intelligent progress of home ownership for college grads. Starter homes were a responsible first step, moving up periodically when kids (and salary increases) arrived.

The games related to student loans has cut over half of those graduates from that normal consumer pattern.

Quote:

"I don't like to use the word 'crisis,' because it's a 'crisis' that really can't melt down the same way that the mortgage market did," Chopra said on HuffPost Live. "In fact, a lot of the student loan issues are just going to be a drag on the economy, because young people aren't going to be able to participate like a generation ago when they're making very large payments out of their salaries every single month instead of putting it to better use."

That pretty well points to a deteriorated economy in the future.

With interest rates so low these days it is, I believe, in our interest to allow students and graduates to refinance their loans under the new system. That puts cash into the local economies as soon as the loans are refinanced and the payments are lowered.

Putting that increased cash into the economy can only help. The financial sector would fight that - they are getting super cheap money and are making a killing off of those under the old loan system. Personally I'll go for helping grads, the housing markets and the local economies over the financial sector.

Quote:

The fed's report comes less than 24 hours before the federal sequester is scheduled to take effect, the automatic budget cuts that will cut off federal financial aid for as many as 280,000 students nationwide.

My bet is that won't matter. The financial sector has the money for lobbyists to keep those loans active. With billions going out in annual bonuses.
 
Cadet985
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 6:39 am

It doesn't surprise me one bit. I myself owe over $100k in student loan debt, which I am unable to even think about paying because I can't find a job. Lenders like Sallie Mae don't want to hear that I can't pay because I don't have a job so I've just stopped talking to them. There are many other recent college graduates in similar positions to mine (I'm 27 and graduated college in 2009).

Marc
 
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mad99
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 6:57 am

Quoting Cadet985 (Reply 1):
$100k

man! For four years of uni?

Quoting Cadet985 (Reply 1):
graduated college in 2009

sorry to hear it.

What degree do you have, if you don't mind me asking.
 
ouboy79
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 7:25 am

Quoting mad99 (Reply 2):
man! For four years of uni?

Welcome to the USA. I'm sitting on about 60K.

Unfortunately there hasn't been much done to keep college costs from escalating.
 
MD11Engineer
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 8:58 am

Germany is now going the opposite way: After experiments with study fees for third level university education the states are going back to free and almost free (a nominal semestral fee of a few hundred Euros, mainly for the student´s association and medical insurance). In vocational apprenticeships the apprentices have always been employed by their companies and have received a salary of a few hundred Euros a month, which increased as their experience and knowledge (and therefore their useability for the company) increased. University students still need some income for their daily needs, but they get it either from their parents, through working besides studying or through scholarships.
We realised that the base of our economy is the education of the population. We need highly qualified engineers and scientists as well as highly trained skilled workers.

Jan
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mad99
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 9:14 am

Quoting ouboy79 (Reply 3):
I'm sitting on about 60K.

Is that the total bill for a degree?
What degree is that for?
What does that include,housing, books etc?
 
flyingturtle
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 10:51 am

...and then the president of my university once said in an interview that although he is happy with the 1500 $ / year of tuition (does not matter if philosophy or medicine!), he said that he thinks about raising the fees.

Why?

Because 1500 $ / year is not seen as a sign of quality by U.S. and Asian students and their parents. Why send their sons and daughters to Switzerland if it's *that* darn cheap?

The Federal Institute of Technology consistently ranks among the five best European universities, and among the twenty best ones world-wide. In spite of a tuition of 1240 $ / year.


David
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Kiwirob
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 11:21 am

Quoting flyingturtle (Reply 6):
Because 1500 $ / year is not seen as a sign of quality by U.S. and Asian students and their parents. Why send their sons and daughters to Switzerland if it's *that* darn cheap?

Asians appear to be pretty happy travelling to Norway where university tuition is free.
 
Quokkas
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 12:31 pm

Quoting kiwirob (Reply 7):
Asians appear to be pretty happy travelling to Norway where university tuition is free.

Does that include for foreign students or is it limited to citizens/ permanent residents of Norway?

I ask because a number of countries provide education to nationals either free or for a low fee but charge full-fee for overseas students. Many overseas students' families are willing to pay the higher amount as they see it as a first step to migration and citizenship or improved employment chances and higher living standards elsewhere. The universities are happy to offer places because it means extra funding and the Governments are happy because it improves the balance of payments - education of overseas students is akin to exporting.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
romeobravo
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 12:37 pm

Quoting Quokkas (Reply 8):
I ask because a number of countries provide education to nationals either free or for a low fee but charge full-fee for overseas students.

Here in the UK, Scotland provides university education to Scots AND citizens of the EU. All citizens, apart those from those in England, Wales and Northern Ireland, who have to pay.  
 
Kiwirob
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 1:40 pm

Quoting Quokkas (Reply 8):
Does that include for foreign students or is it limited to citizens/ permanent residents of Norway?

University is free for everyone in Norway regardless of where you come from, hence the reason why there are a lot of Chinese studying here.
 
flyingturtle
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 1:47 pm

Quoting kiwirob (Reply 7):
Asians appear to be pretty happy travelling to Norway where university tuition is free.
Quoting Quokkas (Reply 8):

In Switzerland, we just began to raise tuition fees for aliens. At the moment, many French and Germans attend our universities, but from other countries, there are very few students.

Current tuition fees for all Swiss universities:

http://www.crus.ch/information-progr...dy-in-switzerland.html?L=2#8_Costs


David
Keeping calm is terrorism against those who want to live in fear.
 
Quokkas
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 2:12 pm

Quoting kiwirob (Reply 10):
hence the reason why there are a lot of Chinese studying here.

So what sort of restrictions, if any (e.g. visas), are there on people simply moving to Norway to study? Can anyone just turn up or is there some sort of screening? And what's in it for Norway to subsidise overseas students?

Quoting flyingturtle (Reply 11):
In Switzerland, we just began to raise tuition fees for aliens.

I can understand that within the EU and associated areas (I know that CH is not an EU member) that things may be different because of the ease in movement and in taking up employment but I am surprised that fees are not significantly greater for students who themselves or their parents have not paid taxes to support education services. Australia really does see education as an export and has encouraged student visas to support the growth of the education sector.

Sorry Ken. I didn't mean to hijack your thread. I will ask a couple of questions as I am not familiar with student loans in the US. I assume that these are provided by private organisations, including banks and not universally provided by the States or Federal Government. Would that be right?

Here in Australia, while some fees need to be paid upfront, much of the education is provided on the basis that a person will "repay a debt" through a levy on income tax once they start working. This means that students don't have to sell their soul to a bank or other financial institution and no-one (in theory) is turned away because they can't afford it. The criteria for admission is whether the student has achieved a suitable score for admission through the examination system. In this respect the "debt" is to the Tax Office and not a private organisation.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
CalebWilliams
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 2:49 pm

Quoting Cadet985 (Reply 1):
There are many other recent college graduates in similar positions to mine (I'm 27 and graduated college in 2009).

I'm not surprised. I had a boss that graduated from a great 4-year college and couldn't find a job. Worked at a fast food restaurant and gas station for a year or two after graduating. He graduated in 2009 and said a lot of his classmates were in a similar situation.
Caleb Williams MSP AUS STL AMS CPH LGW YYZ
 
Cadet985
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 2:51 pm

Quoting mad99 (Reply 2):

Quoting Cadet985 (Reply 1):
$100k

man! For four years of uni?

Quoting Cadet985 (Reply 1):
graduated college in 2009

sorry to hear it.

What degree do you have, if you don't mind me asking.

The school I went to was about $30,000/year including room and board. My grades were average so I didn't get scholarships, and grants were few and far to come by. I was on the five-year-plan. I have a degree in communications with a focus on broadcasting. Here's where my situation gets really screwed up. Since my creditor wants more money per month then I can pay, and won't accept anything less, I don't pay at all. So they report me to the credit bureaus. I don't want to get into specifics, but let's just say that my credit sucks because of this. What's one thing potential employers look at when considering an interview? You guessed it! Your credit score. So...I can't pay off my loans because I don't have money. I don't have money because I can't get a job. I can't get a job because my credit score stinks. I'm stuck in a vicious circle.

Marc
 
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 3:49 pm

Quoting flyingturtle (Reply 6):
Because 1500 $ / year is not seen as a sign of quality by U.S. and Asian students and their parents. Why send their sons and daughters to Switzerland if it's *that* darn cheap?

I think university admins worry too much about such things. It's not essential to have huge numbers of international students to have a vibrant university, IMHO.

http://nces.ed.gov/fastfacts/display.asp?id=76 says that for year 2010-11 the cost (room, tuition, board) for a year of education at a 4 year institution averaged $16k for a public institution and $32k for a private institution. Multiply by four years, and add in the cost of weekend meals, gas money, cell phones, clothes, etc. and you can see why people leave university with six figures of debt.

Compare that to $7k/$14k twenty years earlier in constant (inflation-adjusted) dollars and you can see the problem.

I'm not sure what the root cause is. I've been back to my university and can't see things that cost >2x after inflation than they did 20 years ago.

I'm told that federal and state support for higher education has dropped over the years and more and more of the cost is passed via these costs, which means families and/or eventually financial institutions in the likely case the student can't keep up with the payments.

It's my own theory that as the price for public institutions goes up then the cost for private institutions goes up because the low cost competitor is what is driving the market. Flipping that around, the more we support public institutions, the more the entire cost for higher education goes down.

I think this is a wedge issue. The right doesn't like public support of anything, and is backed by the wealthy who won't be using the public institutions anyway. However they seem to ignore the fact that the world wasn't built exclusively by the graduates of the elite institutions.

I think a lot of what we call the greatest generation yada yada happened because of the huge amount of support for public higher education after WW2. Most of my engineering profs in the early 80s were ex-GIs who trained on the GI Bill. That's the same generation of folks who sent a man to the moon, built the Interstates, and created the integrated circuit, the microprocessor and the Internet (with or without Al Gore).
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Quokkas
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 3:53 pm

Quoting Cadet985 (Reply 14):
I'm stuck in a vicious circle.

First of all, happy anniversary on Anet.  

My gosh. Your position as stated does suck. I simply can not see the sense in your credit provider accepting less than you can afford to pay if you have advised them of a problem. I don't mean that they should write off the loan or anything like that, but simply accept a regular payment. What can they possibly expect to gain from refusing to restructure and accept payments? I appreciate that the loan may be unsecured but surely some payment is better than none and what would they gain from bankrupting you? Are they applying additional interest or fees while refusing payments? I hope not, if they are refusing to accept what you can afford.

I hope that you are able to come to some sort of sensible arrangement. The way you describe it, nobody gains and that is counterproductive to all involved, not least yourself.

Best wishes in solving this problem.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
Kiwirob
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 4:02 pm

Quoting Quokkas (Reply 12):

So what sort of restrictions, if any (e.g. visas), are there on people simply moving to Norway to study? Can anyone just turn up or is there some sort of screening? And what's in it for Norway to subsidise overseas students?

I think the deal is if you are accepted to a university in Norway, getting a study visa is a given, from what I know so long as you meet the entry criteria you can go. What's in it for Norway, I believe they hope you stay after getting your qualifications, many do. I know a couple of Russians and an Chinese person who have stayed after going to university here.
 
RussianJet
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 4:11 pm

Quoting RomeoBravo (Reply 9):
Here in the UK, Scotland provides university education to Scots AND citizens of the EU. All citizens, apart those from those in England, Wales and Northern Ireland, who have to pay

Yes, very vexing. As for me, I fell into the 'experiment period' of the abolition of grants - starting uni in the year they were abolished, and graduating 1-2 years before they were reinstated. Had they been available, I would certainly have qualified for one. As it is, of course my student debt is nothing like the 100k figures being quoted by some of our American friends, but the repayments every month make the difference between affording to buy a home, and not being able to buy a home. It is not that I expect to receive a completely free university education (though that would of course be desirable), but the levels of support that were available to those most in need when I started were pathetic. Had the current grant levels been around when I studied, I would be finishing my pay-back roughly now. As it is, I have a further three years or so to go, and will be lucky to think about starting to buy a tiny place by the time I'm 40.
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Quokkas
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 4:37 pm

Quoting kiwirob (Reply 17):
Quoting flyingturtle (Reply 11):
Quoting RomeoBravo (Reply 9):

Thanks everyone who has been willing to answer my questions on how things work in different countries. I appreciate both your time and effort made in replying.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
Klima
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 5:20 pm

The best decision I made about college was joining the Air National Guard. I got 100% tuition assistance for going to a public in-state university. I took some loans out to pay for room and board and when I studied abroad, but that debt only amounted to 11k by the time I graduated.

I just wish I'd majored in something useful  

My cousin has over 100k in student loan debt. Her problem was she took out way more money than she needed. Instead of taking out just enough to cover tuition and related costs, she got more money to rent an apartment, furnish the apartment, buy 2 dogs, etc. And she didn't even go to a private university, so the majority of her debt was from buying crap. I wonder how many other students who are drowning in debt have done the same thing?
 
max999
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 5:21 pm

Conservatives here in the US - 'Subsidizing low-cost or free college education? That's socialism and simply cannot be done!'
All the things I really like to do are either immoral, illegal, or fattening.
 
Boeing717200
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 5:27 pm

Quoting Klima (Reply 20):
the majority of her debt was from buying crap. I wonder how many other students who are drowning in debt have done the same thing?

This is very much the problem. Couple that with a barage of useless degree programs and unrealistic expectations of the students when they get out and you have a fine mess.

Quoting max999 (Reply 21):
Conservatives here in the US - 'Subsidizing low-cost or free college education? That's socialism and simply cannot be done!'

Public Universities in the US are already massively subsidized. The FED ponies up $30 billion alone with billions more spent by the States running their University systems. The average tuition subsidy is around 40%.

[Edited 2013-03-01 09:42:42]
 
zhiao
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 5:31 pm

I don't have sympathy; most of the debt is actually in the form of things that are optional, ie costs associated with living alone, costs associated with going to private vs public school , costs associated with going out of state vs instate. This in itself explains about 80% of the debt because instate out of pocket tuition remains very affordable.
 
DiamondFlyer
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 5:32 pm

I went to school (2010 college grad) with many people who were $100,000 or more in loans. Some of them may have been pushing upwards of $200,000. I feel bad for them, they will never, ever ever be able to get out from under that with the low paying jobs they were forced to get into. Sure, down the road they will make decent money, but the interest goes up so quick they will be paying for decades.

I'm very fortunate to have got into a job that allowed me to pay off my student loans (roughly the amount of a mid-sized car) in 2 years. Now I'm debt free, just over 2 years out of college. IMO, the real problem with the entire economy is that there is simply too much credit available to high school kids to go to college.

-DiamondFlyer
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max999
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 6:07 pm

Quoting Boeing717200 (Reply 22):
Public Universities in the US are already massively subsidized. The FED ponies up $30 billion alone with billions more spent by the States running their University systems. The average tuition subsidy is around 40%.
http://money.cnn.com/2012/10/24/pf/c.../public-college-tuition/index.html

Apparently it's not subsidized enough when the average public university tuition is $8,655 per year (excluding rooming, board, textbooks, etc) and it has risen 104% in the past 10 years.
All the things I really like to do are either immoral, illegal, or fattening.
 
EricR
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 6:51 pm

I'm sorry, but instead of pointing the finger at universities for sky high tuition, I can't help but think the majority of the fault lies on the student.

There are so many ways to get a degree without accumulating $60K or higher of debt. The ones who have accumulated all this debt and are now complaining about it are the ones who wanted to attend a 4 year, out-of-state university with complete disregard of the cost and how they are going to repay these loans. It is financial mismanagement on the student's part.

In hindsight, I'm sure many of those who racked up enormous debt now wish they had gone to a community college for the first two years and then on to a university close to home so that it would not require room & board, worked harder in high school to get a scholarship of some sort, worked part time during college for a company that would give tuition assistance, sought out grant assistance, etc. etc, etc,

But in the U.S. these days, its never anyone's own fault, its always someone else's fault.
 
jetblueguy22
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 7:08 pm

Quoting EricR (Reply 26):
The ones who have accumulated all this debt and are now complaining about it are the ones who wanted to attend a 4 year, out-of-state university with complete disregard of the cost and how they are going to repay these loans. It is financial mismanagement on the student's part.

Sometimes it isn't that easy. My major was not available at any local University. I had to go all the way to North Dakota to find it. My tuition with room and board is about 25,000 with flight costs about 16-20k a year on top of that. My school is cheap too compared to other schools with the same degree. I'm not just going to go to a local school to get a degree in something I don't want to do.

I can believe it's this high. I'm fortunate that my folks can cover my tuition. I still have to cover my flight costs but not having to pay tuition is a huge relief. I already have about 25,000 in loans and I'm not too far into my schooling. The only good part about my school is they hire a huge amount of recent grads as flight instructors so I have the opportunity to get a job when I finish. I only wish access to government loans was easier. Just because my mother does well doesn't mean she can afford two kids in college. I get a pretty small amount of government loans. I'm honestly scared of what is going to happen when I graduate and banks start chasing me for money.
Pat
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einsteinboricua
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 8:01 pm

Quoting EricR (Reply 26):
There are so many ways to get a degree without accumulating $60K or higher of debt. The ones who have accumulated all this debt and are now complaining about it are the ones who wanted to attend a 4 year, out-of-state university with complete disregard of the cost and how they are going to repay these loans. It is financial mismanagement on the student's part.

So...if I wanted to go and study aviation and no campus in my state offers it, I should settle for a business major and then find a way to earn my wings? I don't know why I think that if this were the case, I would be told that it's my fault for not taking a risk (or that if I really don't want business then I should dropout or go to a community college).

Bottom line: we know the risks involved when choosing a college. However, I shouldn't settle for good if I can be the best...partly a reason I have dreaded the past 6 years studying engineering instead of aviation.
"You haven't seen a tree until you've seen its shadow from the sky."
 
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 8:31 pm

One deep down issue is there is a lot of parental fear about the college experience. Parents feel afraid to steer the kid at all lest they be accused of wrecking their future. That fear drives a lot of parents to make a lot of unwise decisions, ones bad for the kid and bad for themselves. They'd rather put tens of thousands of dollars that they and the kid(s) don't have just to avoid that fear. The entire system is geared around getting either the parents or the government to co-sign for massive loans, ones they'd never take out under other circumstances.

Another deep down issue is it's all but impossible to decide up front which kid will be a good student and what area of studies a student should persue. Given this uncertainty, it seems the system just lets kids sort it out for themselves and puts them, their parents, and the entire system itself at risk when it all doesn't work out.

Quoting max999 (Reply 21):
Conservatives here in the US - 'Subsidizing low-cost or free college education? That's socialism and simply cannot be done!'

Well, there is a great spectrum between total socialism and total conservatism.

In the conservative system, you end up with mostly the children of the wealthy getting educated and/or the profit imperative making it so that people get diplomas without actually getting educated.

In the liberal system, you end up with everything being funded equally (poorly), which typically ends up with lots of weak students either dropping out or taking majors that are easy to pass that don't contribute much back to society.

The current system ends up with a lot of the worst of both, with the insiders at the public institutions feeling they have to provide lots of costly extras because they feel like they are competing with the private sector.

The core issue is you can't decide who really is going to be a good student or where the economy will want them to be when they graduate and years after as their skills grow.

Quoting DiamondFlyer (Reply 24):
IMO, the real problem with the entire economy is that there is simply too much credit available to high school kids to go to college.

Yes, that's the root cause.

It's fuelled by parents with a guilt complex that makes them do whatever the kid wants to do, instead of treating it like any other decision you'd make that involves tens of thousands of dollars. Quite often these parents will co-sign loans that eventually drag them down. Also the US system allows for a lot of government-backed loans that never get paid off.

It's also fuelled by student expectations. Even back in the olden days living off-campus was a lot better than living on-campus, but if you did the math it cost a lot more. The dorms I lived in had two guys per room in bunk beds and a common shower. The ones they build now have individual rooms with a common living area. Sure it sucked to have to share a room with a dude who got wasted and was going to be puking all nite, so you learned to work things out with your neighbors and sleep on an air mattress. Like it or not, it taught you basic coping skills.

Quoting max999 (Reply 25):
Apparently it's not subsidized enough when the average public university tuition is $8,655 per year (excluding rooming, board, textbooks, etc) and it has risen 104% in the past 10 years.

As above, it's hard to understand why costs have doubled so quickly. The numbers I posted said >2x in 20 years including room and board and adjusting for inflation.

Quoting jetblueguy22 (Reply 27):
I'm not just going to go to a local school to get a degree in something I don't want to do.

Then the right answer would have been to go work till you save enough money to pay for what you want, or change your mind and decide to do something you and your family can afford. Move to ND long enough to earn residency. Join the local guard to get cheap tuition. Otherwise you end up with:

Quoting jetblueguy22 (Reply 27):
banks start chasing me for money.

... however the odds are good that you won't have any for them to give, especially if you are wanting to be a pilot.

Getting six figures in debt to get a job that pays, oh, $16-20k to start is a recipe for disaster. Not trying to pick on you specifically, but it's a strong example of how messed up the system is.
Inspiration, move me brightly!
 
EricR
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 8:34 pm

Quoting einsteinboricua (Reply 28):
So...if I wanted to go and study aviation and no campus in my state offers it, I should settle for a business major and then find a way to earn my wings? I don't know why I think that if this were the case, I would be told that it's my fault for not taking a risk (or that if I really don't want business then I should dropout or go to a community college).



And this comment is exactly what I am referring to when I say it is financial mismanagement on the student's part.

Since when is college free? For some reason there is a mentality among students that they should be able to go to any school and study any major. Until college becomes free (or you find other ways to fund your college tuition such as the many ways I listed above), then you have to choose what you can afford. However, too many students put little or no thought into the cost and then are faced with loans they cannot repay. They become financially strapped for the rest of their lives.

So to answer your question - sure - go right ahead and rack up $100K in student loans to pursue a major you love, but simply cannot afford, and see how your lifestyle is 5 years after graduating. You will be forever financially strapped. This is the same mentality that caught so many people off guard in the housing crisis. People went out and bought homes that were well above what they could afford. One would think society would learn from past mistakes.
 
VonRichtofen
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 8:44 pm

So what caused tuition to rise so dramitally over the last 40 years? Clearly easy access to loans is a big part of it. Just like the cheap credit bubble propped up the housing market.
 
srbmod
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 8:46 pm

I guess I was lucky and my college classes and books paid for (before I got bored with college and dropped out after a few years) by my grandmother (She pretty much split the money she had originally saved up for my mom to go to college between my sister and myself.) and college costs 20 years ago were not that bad and I was going to a state school. Back in the early 90s it cost about $1800-2000 a year (in-state) as a full time student at the two year school I went to before briefly transferring to a four year school. These days, those costs are around $5000 a year.

I remember when I was looking at colleges this time 20+ years ago, I was looking at several out of state schools but opted against them because they want $14,000-17,000 a year for out of state students. I definitely would have had to applied for financial aid and possibly taken out some student loans. My sister was going to a private college back in the early 90s and they wanted $15,000 a year and she ended up having to take out student loans because she couldn't get enough grant money and my grandmother was only partially covering her tuition because of the high costs to attend the school.

These days it is not uncommon for someone to graduate with $40,000-$60,000+ in student loan debts and for someone just getting out into the workforce, it can be difficult to keep up with the payments and it overwhelms many of them. Some colleges have gotten more expensive due to increased student activities fees used to help fun fledgling football and other collegiate sports.
 
ajd1992
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 9:17 pm

My fees starting in September are £9000 a year, plus a living costs loan of £3800. I qualify for grants but they're free.

Either way, I will graduate at the age of 25 in 2017 with debts of around £50,000. That's ridiculous, although they are nice on how you repay it - you pay nothing if you earn under £21,000, then when you earn over that, it's only taxed on what you earn OVER 21k, not the entire amount. If you drop below 21k for whatever reason, no repayments. If you get to 30 years and it's not paid off, no worry - it's written off anyway.

Uni education for poor people and rich people is easy in the UK. If you're middle class you qualify for few loans and no grants but can't afford to pay up front necessarily. Madness.
 
Ken777
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 9:19 pm

Quoting Quokkas (Reply 12):
Sorry Ken. I didn't mean to hijack your thread.

Not a problem - I took a couple of courses at Churchland's

Quoting CalebWilliams (Reply 13):
He graduated in 2009 and said a lot of his classmates were in a similar situation.

In addition to all of the ripoffs related to the student loans the guy also got his degree at the peak of the Great Recession, making it the worst time to get a degree. I find it amazing that we were able to bail out the financial institutions at that time, but not unemployed graduates unable to find a job.

Quoting Revelation (Reply 15):
Compare that to $7k/$14k twenty years earlier in constant (inflation-adjusted) dollars and you can see the problem.

Or the $250 a semester tuition at a local private university when I went. (LSU had a $25 per semester tuition for in state residents at that time - the early 60's)

THe standard in those days was that a student could graduate from a first rate state school and generally be debt free. He or she might have worked a part time job a bit for spending money with the parents picking up some of the costs. bit more expensive than just after WW II, but that system still served this country very well.

Now it's simply a game about money. The schools play it, the bookstores play it and the financial institutions play it. The result is that instead of being a strong, positive impact on the country like WW II it is going to be a drag on the economy for generations.

Quoting MD11Engineer (Reply 4):
We realised that the base of our economy is the education of the population. We need highly qualified engineers and scientists as well as highly trained skilled workers.

Germany is pretty far ahead of the US today when it comes to developing an educated population. We've dropped down so much that we even have large corporations advertising on TV that we need to educate more people in the math and sciences.

Quoting RomeoBravo (Reply 9):
All citizens, apart those from those in England, Wales and Northern Ireland, who have to pay.

LOL! I'm married to a lass born in Dundee and that exclusion of England, Wales and Northern Ireland is actually pretty funny for me.]

Quoting Revelation (Reply 15):
for year 2010-11 the cost (room, tuition, board) for a year of education at a 4 year institution averaged $16k for a public institution and $32k for a private institution.

Tulsa actually has developed something intelligent - study in High School, graduate and immediately enroll in a local junior college and your tuition is waived. You still have other costs, but it's a step forward.

Quoting Revelation (Reply 15):
I'm told that federal and state support for higher education has dropped over the years and more and more of the cost is passed via these costs, which means families and/or eventually financial institutions in the likely case the student can't keep up with the payments.

We have gone from a country that understands that education can be a major force in growing a country to one that believes that universities should be a revenue center. Huge amounts of money, especially with the student loan games that the financial sector worked up.

I was surprised that i actually agree with Rick Perry down in Texas who is pushing for a $10,000 cost for a 4 year university degree. I'm amazed that the guy can actually comes up with such a good idea considering how much they hate teaching science in texas.

Quoting Revelation (Reply 15):
The right doesn't like public support of anything, and is backed by the wealthy who won't be using the public institutions anyway.

Unfortunately the Right is pretty stupid when it comes to long term investments in the country - which is what education is. Germany is a mile ahead - as noted above.

As for the rich not getting anything from state schools, start with engineers.

Quoting Revelation (Reply 15):
I think a lot of what we call the greatest generation yada yada happened because of the huge amount of support for public higher education after WW2.

There has never ben any doubt about that and the country continued to benefit when their children went to university,

Quoting max999 (Reply 21):

Conservatives here in the US - 'Subsidizing low-cost or free college education? That's socialism and simply cannot be done!'

That would be right. But conservatives never complain when they receive benefits.

Quoting Boeing717200 (Reply 22):
This is very much the problem.
Quoting Boeing717200 (Reply 22):
Public Universities in the US are already massively subsidized.

So where we need to start is with changes that get the US more benefits from the money invested.

Let's start with allowing students & grads with the "old system" of student loans to refinance under the new system. If financial institutions won't allow that then (1) end their federal guarantee and (2) add in a windfall profit tax.

Then let's look at where research grants are going. Send those grants to schools that don't leave students in a lifetime of debt.. Focus more on state schools that have the lowest costs.

And let's address those over-priced text books. Use Federal Grants to "motivate" schools to go to ebooks at a very low cost, or free. $30 Billion is a lot of motivation.

We also need to recognize that often times a lot can be achieved for students with a 2 year degree. In 2 years a student can become a physical therapy assistant, or occupational therapy assistant. Pass the licensing test and start earning some pretty decent money.

And there are a lot of other JC courses that lead to jobs.

We also need to rebuild strong apprenticeship programs for young people. I like the Australian approach simply because I saw it performing so much better than ours.
 
max999
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 9:38 pm

Quoting DiamondFlyer (Reply 24):
IMO, the real problem with the entire economy is that there is simply too much credit available to high school kids to go to college.

All kinds of debt, not just tuition debt, is a major problem in the US...one of the big reasons for the 'Great Recession.' Simply put, I believe that with our stagnant wages over the past 20 years combined with the massive increases in cost of living in everything from tuition, housing, energy, etc...middle to low income Americans have kept up only by using lots of credit. The banks are responding to consumer demand for debt by making as making credit readily available...maybe it is too easily available.

So if we really want to resolve the debt problems of this country, we need to look for ways to increase the wages of low/middle income Americas so they can start spending with real cash instead of debt.

[Edited 2013-03-01 13:41:00]
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StarAC17
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 10:17 pm

Quoting max999 (Reply 35):
The banks are responding to consumer demand for debt by making as making credit readily available...maybe it is too easily available.

I think now the pendulum has swung the other way where credit for people who want to start businesses or buy homes is very difficult

Quoting max999 (Reply 35):
All kinds of debt, not just tuition debt, is a major problem in the US...one of the big reasons for the 'Great Recession.'

The biggest difference with student loan debt is that it cannot be discharged in bankruptcy meaning that it needs to be paid off.

This gives those lenders little to no incentive to re-finance student loans where as with traditional loans the lender has an interest in re-financing because if the don't and that person goes bankrupt the lender takes a loss.
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DeltaMD90
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 10:20 pm

I think more states should do what Georgia does with HOPE scholarship. I think many states have something similar. You need (well, until they made it harder because they were going broke) a 3.0 and to be full time (first semester went off high school grades.) Between that and the military, I got a free ride and then some.

There are also a lot of scholarship opportunities that often to unused that people could snag.

But at the end of the day, I know a lot of smart, responsible people that have a lot of debt and it really isn't their fault. I think the government shouldn't push college so much, I think tech schools are just as good and more appropriate for some people.

Student debt is what I see as a good investment (it's better when the economy doesn't suck and all it does is produce a lot of worthless degrees or put people in jobs that pay so low it's hard to pay off the debt.) Optimally, it improves education, makes a smarter workforce, gives people opportunity, and the debt (all of it, right?) eventually gets paid.

I get mad at the government spending money frivolously, but I don't see this as really spending, more like loaning it out (hence the name student loans, I guess)
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Cadet985
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 10:30 pm

Quoting Quokkas (Reply 16):
First of all, happy anniversary on Anet.  
Quoting Quokkas (Reply 16):
My gosh. Your position as stated does suck. I simply can not see the sense in your credit provider accepting less than you can afford to pay if you have advised them of a problem. I don't mean that they should write off the loan or anything like that, but simply accept a regular payment. What can they possibly expect to gain from refusing to restructure and accept payments? I appreciate that the loan may be unsecured but surely some payment is better than none and what would they gain from bankrupting you? Are they applying additional interest or fees while refusing payments? I hope not, if they are refusing to accept what you can afford.

They have proof of my monthly income, and a statement from me that I refuse to send them 100% of what I get. Yes, I keep getting billed additional interest and fees on the loans so every month, the debt goes up. They've told me that they want a minimum of $1100/month. When you're not making that, it's not possible to pay that, and they won't discuss forbearance or anything like that. So at this point, I'm almost waiting for them to sue me for the loan. I'll be able to show that the only thing I own worth any money is this laptop, and I'm sure any judge would side with me. I'd counter sue for harassment and damages since it's a fact that they have put negative marks on my credit score, and a low credit score (mine is below 600) will keep one from getting any type of job other than say at McDonald's (which I can't do for health reasons - I can't stand for long periods due to a bad ankle injury).

Marc
 
srbmod
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 10:46 pm

Quoting DeltaMD90 (Reply 37):

I think more states should do what Georgia does with HOPE scholarship. I think many states have something similar. You need (well, until they made it harder because they were going broke) a 3.0 and to be full time (first semester went off high school grades.) Between that and the military, I got a free ride and then some.

I started college right when the HOPE Scholarship was first introduced and most of the people I knew that qualified for it based on their high school grades lost it by the end of their Freshman year of college. I never got it because I didn't graduate high school with a 3.0 GPA (Screwing off my first two years of high school killed my GPA.) and I was always just on the cusp of being eligible for it when I was in college. The only scholarship I ever got in college was for one semester my sophomore year, as one of the two students in my major that were getting a partial scholarship from the Fine Arts department wasn't taking any classes that semester and I was given it and it covered about half my course costs that quarter.
 
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DeltaMD90
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 11:01 pm

Quoting srbmod (Reply 39):

Those 2 things you mentioned were what I didn't like about it... you could be a brand new person in 11th and 12th but 9th and 10th screwed ya, and my lowest semester was my first semester, and it is for a lot of people (most that I've known.) I guess a cut off must be made but I think it could be a little bit more lenient in these cases (somehow... guess they really can't since GA is broke like everyone else it seems)
Ironically I have never flown a Delta MD-90 :)
 
max999
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 11:05 pm

Quoting StarAC17 (Reply 36):
I think now the pendulum has swung the other way where credit for people who want to start businesses or buy homes is very difficult

The banks are in a no-win situation because they are so hated by the public. If they loosen credit, someone will criticize them for being irresponsible. If the banks remain tight with credit, someone will criticize them for holding back on economic growth. The middle ground in the right amount of lending and risk becomes impossible to achieve.
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Revelation
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RE: Student Debt Nears $1 Trillion

Fri Mar 01, 2013 11:28 pm

Quoting einsteinboricua (Reply 28):
So...if I wanted to go and study aviation and no campus in my state offers it, I should settle for a business major and then find a way to earn my wings?

Life is a balancing act between what you may want and what you may have. Hopefully you know this before you are 18 and are making a choice about college. If not, it's a great time to learn. Hopefully the cost isn't decades of not being able to get credit because you didn't learn.

Quoting Ken777 (Reply 34):
Now it's simply a game about money. The schools play it, the bookstores play it and the financial institutions play it. The result is that instead of being a strong, positive impact on the country like WW II it is going to be a drag on the economy for generations.
Quoting Ken777 (Reply 34):
We have gone from a country that understands that education can be a major force in growing a country to one that believes that universities should be a revenue center. Huge amounts of money, especially with the student loan games that the financial sector worked up.

  

I fear we have only seen the beginning. For-profit "universities" are in their early days. Wait till they really penetrate the right offices in Washington and we'll think today is the good old days. One of the more notorious diploma mills has made its in with my employer and is spamming our internal e-mail accounts.

Quoting max999 (Reply 35):
All kinds of debt, not just tuition debt, is a major problem in the US...one of the big reasons for the 'Great Recession.'

Right, but the theory behind education is that it enables you to gain access to a higher paying job, unlike, let's say a McMansion or a luxury car.

The problem with that theory is that it very much depends on the student, the economy and the school.
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StarAC17
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 6:47 am

Quoting VonRichtofen (Reply 31):

So what caused tuition to rise so dramitally over the last 40 years? Clearly easy access to loans is a big part of it. Just like the cheap credit bubble propped up the housing market.

It's all a matter of Supply and Demand.

Simply put, there has been a massive increase in demand of people going to university because they have been told time and time again they have to. In today's world getting some kind of education beyond high school is pretty much mandatory so with the increased demand the prices go up. Also the purpose of universities is to make money at the end of the day so they will take all the money given to them.

Quoting max999 (Reply 41):
The middle ground in the right amount of lending and risk becomes impossible to achieve.

   It's fairly easy to achieve and all is requires is a bank doing due diligence.

Saying that if you are an aspiring entrepreneur youe best best is seeking out venture capitalists over banks because they have more stakes in your success.
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Revelation
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 3:53 pm

Quoting StarAC17 (Reply 43):

Simply put, there has been a massive increase in demand of people going to university because they have been told time and time again they have to.

And chances are that is correct. There really is not much of a job market for someone without higher education in the US and Canada: there also the supply exceeds the demand.

Quoting StarAC17 (Reply 43):
Also the purpose of universities is to make money at the end of the day so they will take all the money given to them.

Most unis are either publicly owned or controlled by not-for-profit foundations.

Quoting StarAC17 (Reply 43):
It's fairly easy to achieve and all is requires is a bank doing due diligence.

It seems to not be happening. I recall filling in the standard 'Financial Aid Form' was quite a chore decades ago, and seems to be worse now, yet I hear of very few rejections, and lots of cases of students with six figure debts and no realistic prospects of paying them off.
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FURUREFA
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 6:12 pm

Quoting mad99 (Reply 5):

Is that the total bill for a degree?
What degree is that for?
What does that include,housing, books etc?

My tuition this year is $37,576 (or $54,496 if you include health insurance and room/board); this is for a four-year BA degree.

That being said, these "sticker prices" are a little bit misleading. My university has the most generous financial aid program in the country (all grant based, no loans); 62% of undergraduate students receive some sort of financial aid (students with parents whose income
 
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Revelation
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 7:03 pm

Quoting FURUREFA (Reply 45):
That being said, these "sticker prices" are a little bit misleading.

Not really, they exist because someone is paying them ...

Quoting FURUREFA (Reply 45):
62% of undergraduate students receive some sort of financial aid

.. 38% of the undergraduates are!

And when you say "some" FA, that means those who only get a small percent of that large bill are lumped into that 62%.

It'd be a lot more informative if they said N% of all undergraduate tuition/fees/books/room/board are covered via financial aid.

This is called critical thinking, something I hope you are picking up at your university!  
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Pyrex
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 8:25 pm

Quoting Cadet985 (Reply 1):
Lenders like Sallie Mae don't want to hear that I can't pay because I don't have a job so I've just stopped talking to them.

Sorry, but fault is not of the lenders - this problem is solely of the Government's creation, since, just like in mortgages, they are practically the only lender there is. "I am from the Government and I am here to help" - one of the scariest set of words in the English language.

Quoting VonRichtofen (Reply 31):
So what caused tuition to rise so dramitally over the last 40 years? Clearly easy access to loans is a big part of it. Just like the cheap credit bubble propped up the housing market.

Bingo. The government throwing money around.

Quoting max999 (Reply 35):
The banks are responding to consumer demand for debt by making as making credit readily available...maybe it is too easily available.

Banks don't provide student loans, the government does.

Quoting Revelation (Reply 42):
For-profit "universities" are in their early days

All universities are for-profit, it is just that some are honest enough to admit. By far the most expensive expenditure of my life was a little piece of paper I bought from a "non-profit" university - an institution run by faculty for the benefit of faculty. Just because you manage to blow all your money because of tremendous amounts of waste doesn't mean you are a non-profit - with that logic, General Motors is a non-profit too.

Quoting StarAC17 (Reply 43):

Saying that if you are an aspiring entrepreneur youe best best is seeking out venture capitalists over banks because they have more stakes in your success.

Banks are not in the business of providing equity, they are in the business of providing debt. If more people knew the difference between the two (along with perhaps a bit of Capital Structure 101) we wouldn't be in the mess we are in.
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Ken777
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 10:09 pm

Quoting DeltaMD90 (Reply 37):
I think the government shouldn't push college so much, I think tech schools are just as good and more appropriate for some people.

I'll agree with that for a lot of students. And I believe that we need to start looking at kids when they are 10 to 12 to get an initial indication of where they can be both reasonably successful and reasonably happy. That is going to lead some kids to a "professional course" (college bound) and some to a "trades course", be it electrician or aircraft mechanic.

Quoting DeltaMD90 (Reply 37):
Student debt is what I see as a good investment

It depends. 40 years ago it was fine, today (pre-Obama reform) it is a disaster, The difference is that too many people/industries started looking at universities as a great place to suck out a lot of money, with students paying off a debt for far too many years. Overburdening loans that cannot be refinanced under today's standards. Overpriced text books, often delivering generic information. Overpriced tuition & fees.

The university debt game is not a good investment for most students, nor is it a good investment for the country. Go back to Reply 4 to see how Germany handles it. And try to look at it as a long term investment for the county.

Quoting Revelation (Reply 42):
I fear we have only seen the beginning. For-profit "universities" are in their early days.

That is one of the scary new fads. Massive student, high profits and no oversight on the quality of the product.

Maybe we need to have some regulations and oversight as vets on the GI Bill have been a target for the rip off deals.

And maybe some significant fines for those schools who don't deliver performance at a responsible level.

Quoting Revelation (Reply 44):
And chances are that is correct. There really is not much of a job market for someone without higher education in the US and Canada: there also the supply exceeds the demand.

Looking at the trades you can find some jobs. Have you had to pay a plumber recently? Those are the guys that will be able to buy a new car and pay in cash.

Same with electricians, carpenters, etc. Get them young - start apprenticeships at 16 and train them well. Focus their non-job related courses on intelligent courses they can use in life - like personal finance.

That's pretty well how it worked when I worked in Australia. A clerk who worked with me (and her bricklayer boyfriend) were building a 2300 sq ft home. Her boyfriend had helped his mates in other trades when they built their house so guess who showed up to work for free for them. The house was finished and fully furnished by the wedding. And there was NO DEBT for the house or furnishings. She was 23 and he was 25 and they were debt free home owners.

BTW, saw her about 3 years later and they were building a 3500 sq ft home. Same financial situation - fully paid for before they moved in.

When I compare that to a US graduate with a mountain of debt they will pay for over 20 or 30 years and a lower chance of home ownership the overpriced educations that do not deliver solid jobs is pretty much a joke.

Quoting Pyrex (Reply 47):
"I am from the Government and I am here to help"

Doesn't scare me a bit. If they want to help build an Interstate System I'm not scared. If they want to get that totally unnecessary, grossly overpriced albatross of health insurance off the backs of employers I'm nor scared - especially when I see just how poor our outcomes are compared to the rest of the world.

If the government wants to set up a Social Security system for Americans to contribute to during their working years I'm not scared. My only fear (and it is a real one) is that the Financial Sector will get their hands on those trillions - they are sure trying hard to screw up the system.

I'm certainly not afraid of talking to FBI Agents (did that & identified a gal who had passed stolen money orders), I'm not afraid to fly commercially knowing that the ATC is staffed with government employees. I'm not afraid to drive over a bridge built to federal specifications, or take a vaccine that the government has helped developed and get in the hands of public health departments.

I appreciate the police cars driving around this part of the city and the fire department station that is half a mile away.

Saint Reagan loved that line, which is a pity as it didn't really help this country in the end.
 
BMI727
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RE: Student Debt Nears $1 Trillion

Sat Mar 02, 2013 10:33 pm

Quoting Pyrex (Reply 47):
Banks are not in the business of providing equity, they are in the business of providing debt.

There's always private equity, but they're evil.

Quoting Ken777 (Reply 48):
When I compare that to a US graduate with a mountain of debt they will pay for over 20 or 30 years and a lower chance of home ownership

That line sounds like it came straight out of 2006. This governmental and societal cheerleading for home ownership is part of how you ended up with the housing bubble. The whole idea that really being American or being successful means owning a house is part of how this whole mess started.
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