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<p>Even when I took a loan out in ah hem, a while ago, there were statements made similar to that. But that is a bit silly that someone who is smart enough to go to college, knows anything about current events (loan issues, high unemployment, underemployment, etc) needs to have someone state the obvious.</p>
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<p>That would be a good law. If they don’t ask tough questions, they get fined and lose their admissions spot.</p>
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<p>March 15th, 1992. I don’t know the time.</p>
<p>But you are right. It isn’t just lack of responsibility it is also the shift to entitlement thinking (fin aid is a gift, not an entitlement).</p>
<p>Ccdaddio, care to explain the lore? What happened March 15, 1992?</p>
<p>Personally, I don’t see the problem with the current system. Sure, some people do something stupid by taking loans for themselves and for their kids to attend overpriced universities for degrees with little prospect of being ale to pay their loans back, but that’s their call to make. You can’t protect people from their own stupidity and pretent to support free markets at the same time.</p>
<p>vladenshlutte…Clinton’s “I didn’t inhale”. One of my favorite quotes.</p>
<p>I support free markets, but I think private student loans should be treated the same as credit card debt or home mortgages, and be dischargeable on bankruptcy. Banks should not be able to take advantage of the most vulnerable, and should have skin in the game.</p>
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<p>Then they would no longer exist. (No bank is going to make a private loan to a teenager, many of whom have never worked a day in the lives.)</p>
<p>As I mentioned in my post, perhaps better disclosure laws, where a college will need to directly say, “we make no guarantee that you will ever earn enough with our education to pay these loans” could be a start and at least have those interested in attentding asking themselves ( and the school) tough questions<<<<</p>
<p>I’ve worked in consumer credit for many years. We’ve added and colored and bolded disclosures. Truth in lending requires boxes for amount borrowed and total amount to be repaid. At one point a person trying to get a $3000 loan would have to sign or initial 18 (yes 18!) places to acknowledge he understood the terms, the interest rate, the APR, the payment due date, the security, etc. etc. You know how much difference it made? ZERO. No one ever walked away from the loan because of the terms. No one cared that they were borrowing at 36% interest, or that if they made all their payments on time they’d pay back almost double what they borrowed. They only cared how much the payment was and when they could have the money.</p>
<p>Very few people compare terms on their mortgages. They see the interest rate, the monthly payment, and that’s all they care about. They may pick Mortgage Co. A over Co. B just because the interest rate is lower, but they really should be using the Truth in Lending statements to compare APR and fees and default provisions, and NO ONE ever does.</p>
<p>I agree that it would be a good idea to show students how much payments are if they borrow $5500 the first year PLUS $6500 the second year, etc. It’s easy to make a payment schedule if they borrow the full amount and graduate on time and begin repayment 6 months after graduation. I don’t think any student will walk away from the loan signing, but it may encourage him to not borrow the next year and just have to repay that first loan amount.</p>
<p>IMO, the government and society need to go back to greater public support for public universities at all levels and free/nominal fee tuition as it was in the mid-'60s and before at many state universities and before. No one should have to have a loan to attend college…especially if they demonstrate much academic achievement/promise. </p>
<p>Then again, I am also of the belief we as a society don’t seem to understand that if we want low admissions standards/open enrollment for many public colleges, expecting them to have high graduation rates matching institutions with high admission standards and punishing/condemning them if they don’t is unproductive and a bit of a fool’s errand. </p>
<p>If one’s admission standards are set up in such a way that many mediocre/marginal students are able to enroll, they’re much more likely to have issues with graduating within the 5-6 year timeframe…or at all. </p>
<p>Moreover, forcing such expectations have the pernicious side-effects of encouraging college admins/instructors to lower academic standards to maintain/keep their graduation rates from going too low. </p>
<p>This has already been happening in many public school systems…including some in NYC as illustrated by students being placed into remedial courses at local public colleges despite graduating with B or better averages and sometimes getting the equivalents on the statewide exams. </p>
<p>I also have a few friends who teach remedial courses at various regional community colleges who have been forced by their department chair/admins to pass students whose work didn’t meet the already reduced academic standards or worse, who didn’t bother to show up for a substantial portion of the term. Probably to protect their graduation rate and improve their metrics. </p>
<p>Said friends, however, are worried this “mandated passing” is setting such remedial students up for failure further down the line.</p>
<p>I agree to your first point, Emberjed.
To the cost issue, there are several reasons why college is inordinately expensive. The primary one is that federal loan and grant programs (including PLUS loans) were made available in the first place. One only needs to look at Grove City College’s COA to understand how Federal subsidies have increased costs. G.C.C. had to fight all the way to the Supreme Court in 1984 to maintain their independence from Federal government control.</p>
<p>In post #70, Roger said:</p>
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<p>Just saw this headline:</p>
<p>“New Rule Requiring Banks To Make Sure Borrowers Can Actually Repay Mortgages Goes Into Effect This Week”</p>
<p>[New</a> Rule Requiring Banks To Make Sure Borrowers Can Actually Repay Mortgages Goes Into Effect This Week ? Consumerist](<a href=“http://consumerist.com/2014/01/07/new-rule-requiring-banks-to-make-sure-borrowers-can-actually-repay-mortgages-goes-into-effect-this-week/]New”>New Rule Requiring Banks To Make Sure Borrowers Can Actually Repay Mortgages Goes Into Effect This Week – Consumerist)</p>
<p>Locking the barn door way too late …</p>
<p>^^ Unfortunately, stricter lending standards on residential mortgages will not necessarily be applicable to the college loan issue other than for those loans that would require a parent to co-sign. As others have mentioned, if these standards were to be put to bear on college loans the majority of available funds for student loans will simply go away.
For a timeline of how the non-dischargeable status of college loans via bankruptcy found itself where it is today: [FinAid</a> | Answering Your Questions | Student Loan Bankruptcy Exception](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)
While I agree that personal responsibility needs to play a much more prominent role in this issue than it seems to have done so over the past few decades, I also believe that the rules & processes for how student loan debt is handled by lending entities needs to be re-examined thoroughly. Some of the stories one hears of huge fees, fines and jumps in interest rates charged for delinquent balances are down right despicable. Especially in light of the fact that big banks have been spoon FED easy money at ZIRP over the past 5 years while the general public gets to pay the toll.</p>
<p>what your saying is, that people shouldnt have to pay back a company or bank that loans you, because its too much?</p>
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<p>If someone’s financial situation is such they have no feasible way of paying it back, we effectively DO allow that in our system of laws for most debts. </p>
<p>Hence the reason for bankruptcy laws for most forms of debts…including credit card debt incurred for any reason…including frivolous reasons.</p>
<p>The only people who suffer are the ones who pay their bills on time. We had to sell our house for more than what we owed. And that was that. We didn’t complain, we didn’t ask the government for money, we paid the extra.</p>
<p>Only in the US are you rewarded for being fiscally irresponsible. We have our children’s college debt planned out, and the end game is paying back 100%.</p>
<p>So much whining about entitlements. You bought the product, and now that you can’t give it back, you want a refund essentially?</p>
<p>College may cost too much, but so do Godiva chocolates. Make your decision if you are going to get Russell Stover or Godiva, or Thriftway brand chocolate.</p>
<p>Careful Rhandco, that kind of common sense thinking might get you banned from these boards.</p>
<p>@Grantstudent - no, to the contrary, I do believe that people need to honor their debts. What I am trying to point out is that over the past 30 years the way in which student debt is handled has changed significantly (as have the costs of education in general). The fact that student debt is now non-dischargeable in bankruptcy makes the decision making process for taking on said debt fairly critical, especially if significant amounts of debt are incurred. Argueably much more so than credit card debt which can be discharged.
My main objection to the process is how delinquent balances can be escalated by enormous amounts via fines and usurious levels of interest rate increases essentially locking people into a ‘debtors prison’ scenario for the rest of their lives. In this type of worst case scenario, why is student debt now non-dischargeable yet almost all other forms of debt are?</p>
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<p>Again, such “entities” R-Us. </p>
<p>The federal Dept of Educ is the owner of the billions in loans debt.</p>
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<p>So you are using a straw man argument to make your point? </p>
<p>“Usurious” interest? Seriously? (The last I checked, the rates were way below market for an unsecured loan given to an unemployed teenager.)</p>
<p>^Yes, the current terms for federal student loans are quite favorable, both in interest rate (3.86%) and repayment schedule options. See, [Stafford</a> Student Loans Repayment Options | StaffordLoan.com](<a href=“What is a Subsidized Student Loan? | Edvisors”>What is a Subsidized Student Loan? | Edvisors).</p>
<p>I do find it ironic how students complain about $29k loan debt (which happens to be the average loan debt in the US)… but have no problem going out and buying a new car after they graduate, or a $200k house. </p>
<p>I realize $29k sounds like a lot of money when you’re in high school, but after you graduate and get a job in your field, it is quite manageable.</p>
<p>Debt that cannot be paid back will not be paid back.</p>
<p>Debt that has no business existing in the first place will always cause problems.</p>
<p>See all of financial history for further details.</p>