<p>There was an article about this same thing in the NYT recently and it only included the undergraduates, I believe. But, sure, there are def. some kids who know what they are doing. For me, I can pay for my kids education. Not a problem. Plus, she got merit awards everywhere, too, even though, for us, it’s just out of pocket, not even from savings, or anything. But, my opinion is that it’s a racket, and it doesn’t benefit the kids who CAN’T pay.</p>
<p>I’m not trying to protect the banks from their “racket”. I’ve just heard a lot of noise and seen a lot of smoke about undergraduates’ borrowing, but I have yet to see any hard data on the issue. Nor have I seen a link to any bank that would offer an 18 yr old a, private unsecured loan for college. Some (many?) colleges definitely include private loans as part of their finaid package, but all that I have seen REQUIRE a co-signer or are PLUS loans (really parental debt).</p>
<p>fwiw: IMO, even the federal limits are too high ($23k), but they are what they are.</p>
<p>Actually, the aggregate limit is now 57,000 (only 23,000 may be subsidized). Independent students (or those who’s parents were denied Parent PLUS loans) are the only ones who reach those limits though.</p>
<p>That’s fine. I’m not the type of computer savvy person who can post links, and I think you are most likely “right” about the banks not posting on the website, and, too, I’m sure the parent’s do have to co-sign. What I am saying is this: Loans are NOT financial AID for the student. They are financial AID for the colleges, which allow the colleges to keep thier costs artificially elevated beyond what the market would ordinarily bear, IF these loans were not guaranteed by the government. These loans do not benefit the kids, but the schools. To put that as AID in the AID packet is misleading. That’s my story and I’m sticking to it.</p>
<p>The government loans are limited. The Staffords have a $5500 limit and then there is the Perkins loan. Some states also offer loans. Then come loans that the colleges themselves offer and some outside loans. I was just talking to a young lady I’ve known since she was a preteen who just graduated. She has over $60K in loans and graduated with a philosophy degree. She is looking for a job and thinking about architectural school. Parents are in tough financial straits and cannot help her out financially at all. </p>
<p>She is going to have to live with parents most likely to even be able to start making payments on that loan. She has the subsidized loans but also some 15% interest loans. She has absolutely no idea how tough this is going to be. Citibank lent her the money with some relative cosigning.</p>
<p>“it allows THEM to keep thier costs artificially inflated.”</p>
<p>“borrowing away thier whole future for 4 years at an institution while aiding the system in keeping the cost of post-secondary education artificially inflated”</p>
<p>“The colleges put the loans in the finaid packages because it allows THEM to keep thier costs artificially inflated.”</p>
<p>“These loans do not benefit the kids, but the schools”</p>
<p>I’m not so sure that the whole system is ‘artificially inflated’, nor am I sure that students receive no benefit. If we are to believe the College Board, the average tuition at a public 4 year institution is around $6,500. I don’t think this is an unreasonable amount of money. Private colleges are much higher, with an average of around $22,000, but many of these institutions have a much smaller student body. You would expect that the tuition costs would be higher for the same amount of services, given that there is a smaller number of students to support these services.</p>
<p>We could quibble about whether or not an institution of higher education should provide Service X or have Building Y. I do know that there are a lot of high profile stories about flashy new classroom buildings or state-of-the-art recreational centers. But there has also been a huge growth in support type functions that most students and their parents feel that colleges and universities should not do without: increased academic advising, for example, or computer labs which must be maintained and updated, or writing centers and math centers that employ multiple tutors and support personnel. I’m sure there is some bloat, as in every institution, and I am sure there are some places where costs can be trimmed, but be careful with the claim that tuition is ‘artificially’ inflated. </p>
<p>And as much as some would complain that these flashy new buildings, dorms and rec centers are wasteful and unnecessary, there is a certain reasoning out there that students would not come to that institution without them. At my institution, there is a story that after a group of students took the tour and were shown the classrooms in a certain building (one that was built in the 1970s and has no windows in any classroom), several said that would never attend a place where the classrooms were that ugly. In other words, institutions of higher education were giving the ‘customers’ what they wanted. </p>
<p>I would also like to point out that some students do take on loans, not because they necessarily need them for tuition, room and board, but because they are available and then these student can maintain a certain lifestyle with the extra money. I don’t know how prevalent this practice is, and I do not know how much this practice leads to the outrageous amounts of loan students take on, but I do know that it does happen.</p>
<p>I believe that any comodity, which is what a college education is, that relies on crippling debt for the purchasers is artificially inflated. For example, the entire subprime loan debacle whereby many who could not afford to pay thier loans overestimated the worth of the house they were buying, based on access to EASILY available credit for all involved. One of the huge benefits of having a high school dropout father, who was wildly financiall successful, in spite of the fact that I did go on to do YEARS of graduate work myself–for which I was paid, btw–is that I have an honest skepticism of any institution. I am not going to go dewey eyed over the value of an English PhD in Shakespeare. I’m sorry, I’m just not.</p>
<p>^^^What normal adult would cosign for a loan because a student wants a certain lifestyle? Are you talking about housing their horse in a nearby stable, having a car on campus, wearing only designer clothes? Eating dinner out at a 5 star restaurant daily? Exactly what kind of lifestyle are they keeping that they are going take out a private student loan? I don’t know any of these students, but they require a cosigner. Who would sign for a loan that is not needed? I don’t think kids who are taking out private loans are doing so to keep a lifestyle. I think that they are borrowing bc their financial need is being gapped, and/or the family cannot pay their efc.</p>
<p>BTW, I have heard of schools that cost over 40k per year, with lousy advising, where older classrooms exist with older furnishings in them, wireless campus is not completed, but there might be pools and a climbing wall at some of those same schools. As far as a math and writing center, often they are run by TAs, I believe, and TAs are not receiving the salary of a full time professor. OTOH, some expensive schools are also jamming 100, or 200+ students into intro classes (not talking about LACs).</p>
<p>Loans are NOT financial aid. I’m so with Poetgrl on this one. Loans are loans. Bottom line is kids and parents use them to finance a college or university they cannot afford at the moment. Good or bad, yes, it’s those people’s decision how they swing it financially, but I’m all about loans NOT being called out as “financial aid”. We have laws and ordinances and regulations up the wazoo in this country to protect people from themselves, yet there is no safety net for people who just don’t understand what they are getting into. Finally in response to Bluebayou there was no “noise and smoke” when all the ridiculous housing lending industry was engaging in their practices…the noise and smoke occur when the explosion happens so yes $20,000 is reaching the top of what any sane 21 year old should hold in debt period if they absolutely must take on debt. Even that amount will impact their lifestyle for awhile after college.</p>
<p>I went to Oxford in the early 70s. My room had no heat (just a heater coil), no closet, and hot water in the bathroom was iffy at best. The food was close to inedible. The squash court, unheated, hadn’t been painted in 20 years, had cracks in the wall, and “perspired”. There were no computers. The college library was extremely limited. One could go to the main university library, but it took hours to get a book “called up” (the stacks were closed), and no books could be taken out of the library. The student science labs were not up to the standard of my high school. There were two washing machines for 400 students. There was no gym, and the playing field changing rooms could only be described as a dungeon. No art center. Oh, and there was a ghost.</p>
<p>I received a very fine education.</p>
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<p>Unfortunately, yes, there was. If you check the Congressional transcripts, you’ll find where a Bush Under-Secretary of the Treasury was practically thrown out of a Congressional Hearing by Barney Frank who didn’t want the Under-Sec speaking ill of his good friends at Fannie and Freddie.</p>
<p>^^^^These students were taking out loans for a (used) car or furniture for an apartment. I don’t think it was in the tens of thousands of dollars, but usually a few thousand dollars to get certain amenities. I’m not making this stuff up!</p>
<p>Of course the writing lab and math lab are usually staffed by TAs, but there is also a director of such lab that is usually on the faculty. Such a director may require additional compensation or have a course release (which means that they teach less students, which affects how much tuition dollars they are bringing in). And such labs also come equipped with banks of computers that must be maintained and require IT personnel to maintain them. In addition, there is usually also a full-time secretary to help run the place. I’m not sure of the exact cost of these labs.</p>
<p>Is there a huge problem with students taking out too much loans? Surely some students are. What should we do about this? I doubt anybody would suggest that we should limit access to higher education to those who can afford it without loans. And although there is the claim that access to loans drives up tuition, I haven’t seen any sort of in-depth study of this claim. Perhaps this is the case and perhaps not. But I have also seen, over the past 15 years at my institution, huge growth in certain kinds of services and programs that certainly must contribute to rising tuition.</p>
<p>I think what’s really disturbing about the article is the situation of Renee French. Her original loan was for 14K; which in normal circumstances would be a manageable amount. But when she had to quit her job to take care of her sick mom, her interest and penalty fees started to mushroom so that she now owes almost three times the original amount! The kicker is that she got a lawyer and tried to get “hardship” consideration and the judge refused. If this wasn’t a hardship case, I don’t know what would be.</p>
<p>What I have suggested is 1. They stop putting the loan amount in the “financial aid” package. It should be separate. As in, “Here is the amount of aid we are giving you.” “Here are the types of loans you can take out to cover the cost we expect you to pay for your education.” Full disclosure. 2. There needs to be an educational campaign, particularly during the college rep visits, ie a requirement that students AND parents attend an in-depth financing seminar which lays out the cold hard facts of what it will cost to borrow money. 3. Admissions people and GCs need to stop saying “Cost should not effect where you apply to school. There are ways to pay for X or Y” Schools should be responsible about this.</p>
<p>But, this isn’t going to happen because if it happened, then nobody would borrow more than 20,000 TOPS, (which might be too much with the current lowering of wages), and schools would absolutely be forced to charge market value for what they are offering. They much prefer it this way. Where everyone else is discounting thier prices due to the economy and they are actually RAISING tuition.</p>
<p>I heard some colleges are going to seperate “real aid” from loans. I hope more continue to do so. It pains me when someone thinks its great after haggling for a week with the FA office, getting 500 in workstudy is great. It’s something but that’s pocketmoney for the student, not real aid. My mom was saying today she remembers when aid for college was grants, free money so to speak and loans were used much less frequently unless someone was going to law or med school. Back then you could work and pay for school.</p>
<p>I also think sites like this and many articles in college magazines (all good in their own way) encourage students who aren’t as financially educated, to look for the “fit”, to take tests to see if they are “LAC” or “University” types, do you like small classes or large, urban or small, etc. It makes you think you might have a choice when most students have the choice made for them. A mature student will get it, but not someone with their head in the clouds and dreams of a certain location or school. That is part of them problem too.</p>
<p>Gaby, I think that’s really fantastic! Thanks for letting us know. Maybe it will become the general practice.</p>
<p>This has the more prestigious colleges that are trying to eliminate loans, but I hope more can follow suit.
[FinAid</a> | Answering Your Questions | No Loans for Low Income Students](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)</p>
<p>Mini, I went to a uni in a city for college. We lived in what was called the student ghetto those days. We had a slum lord, cheap rent and lived on a shoestring budget. </p>
<p>These days a lot of these areas are more dangerous. The biggest problem students had from living there were break ins and stereo systems (about the only thing of any value any of us had) would be stolen. These same areas are not getting more confrontational crime. A big problem now for my alma mater as well as H’s, both schools in lousy neighborhoods.</p>
<p>A young man graduated this past weekend and was killed early the next morning while out celebrating in his neighborhood. Right down the street where my son lives in his off campus house. Sent a chill of fear through me. One of the reasons I objected to his living in that area was the crime stats. Not the B&Es and little stuff but the confrontational crimes. </p>
<p>However, I do agree that colleges have become wonderlands of sorts. Our old college digs had few places one could grab a meal. Now it’s like haven for fast foods and cheap eats. Some colleges are getting rid of their cafeterias because the kids are not eating there.</p>
<p>Mother Theresa tried to put together some sanctuaries here in the Bronx when she visited here and saw the appalling conditions and the homeless. She goes truly barebones with necessities and did not have things like hot water, heat and other amenities that we have regulated in our codes for even shelters. They were quietly closed down as soon as she left the scene. Amazing how terrible misery and living conditions continue even with the rules we have for standards.</p>
<p>My college roommate was murdered one block from Harvard Yard in 1974.</p>
<p>Most schools already do not charge the full cost of what it takes to educate a student, because some of the educational cost is either made up from support from the state government or spending from the endowment. When state support goes down, or your investments are not earning enough, you have to make it up by cutting expenditures, raising tuition or both. </p>
<p>I am skeptical of the claim that somehow the availability of loans has driven up tuition prices. I see the logic of the argument, and perhaps it might contribute to this in part, but I also see other cultural forces at work here as to what universities are expected to do for students or the type of environment they are supposed to provide that I think are more significant than the availability of loans.</p>
<p>I have seen old figures (about 4 years old) for average student indebtedness that run around $20,000 for a bachelors degree, which poetgrl suggests here as the top amount that a student should borrow. So again, I am not sure it’s huge borrowing (significantly greater than $20,000) that is driving tuition prices up.</p>