<p>Engineering has a lot of routes that one can take and get to the same place. For some of these specialty programs, that is not the case. If you get a slot in one, it can truly make a difference. </p>
<p>If a student who is at a school where the reason it is deemed doable due to the program changes his course of study, then he should transfer to a less costly way to get his major. That’ is what my friend should have insisted upon with her DD, but she could not bear to do it. I understand why, too.</p>
<p>I don’t disagree that certain fields can have near automatic job opps today. But, I remember the engineering bust sometime in the 70’s. And, not so long ago, issues for even Pharms, as major chains acquired more and more independents. And, before nurses got their union strength together, times when those jobs were plentiful but the pay and hours were lousy (and, there are still issues.) </p>
<p>When a family is making the best decision it can, that’s one thing. When they simply view the loans as a too easy “everything will work out,” it’s a problem. We already invest too much emotional energy into the idea of “dream schools,” the idea that kids wanted to be X “since I was a little kid,” and the notion that college is a certification that opens doors. It may be a baseline requirement, for many reasons, but many factors count in actually getting and keeping a job, much less advancing.</p>
<p>Yes, the nursing degree is no longer a shoe-in for a high income payday. There are so FEW sure things out there for careers. I just read the full article in the Chronicle of Higher Ed. One of the dads plans to pay back $317,000 in loans for his 2 kids’ educations. REALLY??!!! There is something seriously wrong here.
In addition, a single mom in the article earns only $50k annually but since her daughter is in NYU theatre school, hopes her child really hits it big in the acting field so that maybe she doesn’t have to work forever paying back loans. The daughter could have gone to a theatre program debt free in her home state, but “…it had to be NYU,” said the daughter.
And good luck with that working forever plan. Wait until the aches and pains of middle age set in, let alone an unsure job market.</p>
<p>When the default rate and loan repayment amounts start showing a deficit that is far off from what is expected, the loans will stop. A shame, but ther is likely to come that point in time. I don’t know the statistics as to how much benefit vs grief these loans are causing. They are there right now. I post a lot on the financial aid boards and I am not an advocate of taking these big loans, however, I was called out by a parent who had another side to these loans, and I have to say she was right too. I am not about to come out and say that they are not for low income families. They CAN cause severe problems in families when payback cannot be made and so taking them out should be done with that weighing heavily. THere is always that risk, but sometimes that risk is a near certainty.</p>
<p>Two years ago I applied on my S’s behalf for a PP loan and all the application asked for was my name, social security number, and PIN. I was truly freaked out by that. In probably 15 seconds I was able to qualify for “up to actual cost of attendance,” in his case, >50K year on my name alone. Yes, I am a professional with a long work history and I am married to someone who earns even more than I do, but the PP loan application never asked me any of that.</p>
<p>A few weeks ago I again applied for a PP loan and well, the application wasn’t any more stringent, though I do believe it said something on there about allowing them to run a credit check on me (I don’t remember that last time.)</p>
<p>For me personally, I will never take out PP loans that will exceed my ability to repay them either with our household income, or worse case scenario…liquidating assets. I feel fortunate to have these options because I know that many don’t have them.</p>
<p>You would have authorized a credit check two years ago, as well. It may be that you completed a paper application & just didn’t realize that you were authorizing the check. The online app seems to be more “obvious” in that regard. </p>
<p>I agree that it does seem easy. At my former school, we looked to make sure that the student and parent signatures did not look like they were done by the same person. If we were in doubt, we called the parent to verify that they wanted to borrow the loan. The school uses online apps now, though. This is one of the reasons parents should NOT share their PIN with their kids.</p>
<p>And, yet, when one considers that many schools include the Parent Plus loan as part of the aid package and, in many cases, the student may be the one taking the lead in the financial aid application process, due either to the parent’s lack of education or lack of language skills, I can see how a student might sign off on the Parent Plus loan application without fully realizing what he or she is getting the family into.</p>
<p>cptofthehouse, re post 17. There are no undergrad PT programs anymore. PT assistants usually have an associates degree. The minimum degree for new graduates to be licensed as a PT is a masters and that has been true since the 90’s. Actually there are very few masters level physical therapy programs left; the vast majority have transitioned to doctoral level degrees.</p>
<p>Wow kelsmom I would have never even considered that scenario. BTW, both PP applications I have done were online. I probably just missed the credit check the first time around.</p>
<p>In addition, a single mom in the article earns only $50k annually but since her daughter is in NYU theatre school, hopes her child really hits it big in the acting field so that maybe she doesn’t have to work forever paying back loans. The daughter could have gone to a theatre program debt free in her home state, but “…it had to be NYU,” said the daughter.</p>
<p>Wow…</p>
<p>And, what is this all saying about how some kids are being raised now. There was a time when a child of a single mom would have been more sensitive to the family financial situation. Now, it’s: “It has to be NYU, my mom can just sign right here on the dotted line.” Ugh!</p>
<p>I have known many families that have taken on too much debt and regret the decisions they made based on too little information. While I acknowledge that there must be families who benefitted from PP loans as a last resort, I have not met any. Based my anecdotal evidence, there is a huge problem with little potential benefit.</p>
<p>The arguments in favor of PP loans sound similar to those who say that “Payday Advance” loans are needed for families to buy groceries to feed their children. Do these families exist? Probably, but far more typical are ill-informed people who succumb to predatory practices.</p>
<p>However, PP loans are more politically acceptable simply because the main beneficiaries are well-connected colleges who can afford lobbyists and generous campaign contributions. The government’s involvement in this practice introduces a moral hazard, especially since the debts cannot be discharged in bankruptcy.</p>
<p>I know a lot of families who have used PLUS not just as a last resort but to stretch the payment period of college from 4 years to 10 or more in the future to make up for lack of savings in the past. By a lot, I mean probably hundreds, and more if I look. Most families I know, have used them. I’ve used them and am using them. </p>
<p>I don’t know what the statistics are for trouble with these loans and paying them back. There are issues, I am sure. But most of what I have read have involved these loans that students get cosigned by parents. Somehow, the parents think that they are off the hook or that the secondary hook is not so strong. There isn’t the leeway or flexibility in those loans and they will go after you.</p>
<p>That the PLUS program looks at the credit report and does see if there are any payments on there showing two months late is an important indicator of where a family is, regardless of income, in terms of paying their bills. It says a lot when a parent with a college aged kid is in that position. I think so, anyways. </p>
<p>More information and warnings and clear dilineation on what the obligation is, like the dollar amount remibursent over 10 years made screaming big on the screen . I’ll go for that.</p>
<p>These are nothing like "PayDay advance " loans for necessities. That shows a crisis. When someone is so hard up that s/he needs to borrow for food, rent,medical, that is a whole other issue with a whole other discussion. PLUS is a luxury loan, pure and simple. It is a luxury to have parents willing and able to get that loan for starters.</p>
<p>*I know a lot of families who have used PLUS not just as a last resort but to stretch the payment period of college from 4 years to 10 or more in the future to make up for lack of savings in the past. By a lot, I mean probably hundreds, and more if I look. Most families I know, have used them. I’ve used them and am using them. *</p>
<p>Yes, but you’re a high income family. Again, there’s nothing wrong with people using Plus loans if they would have been approved if NORMAL and responsible credit checks had been used. However, to allow some $40k per year single parent (or whatever) borrow $100k+ in Plus loans just because she’s never been 60 days late on her small credit card payments is just ridiculous. </p>
<p>Another problem is that the payments on these loans are delayed until after graduation. So, that encourages these “back room deals” with their kids. If these low-income parents had to make payments WHILE their kids were in college, then likely their credit would take a hit by the time they were making payments on $25k+ worth of debt…and then more debt would be stopped. </p>
<p>Actually, if they had to make such payments before graduation, many of these loans would never occur.</p>
<p>It;s not the credit check that will kill low income familiies who are responsible in paying their bills. It’s their income. You really think that making tese lows unavailabe to low income folks would fly? Uh Ohn, Nope. I know low income families using them too and when used wisely, with full planning on payback and being aware of what the amounts are, it’s not a problem. It’s the same old irresponsible people that are having this problem.</p>
<p>I don’t know the stats, but I had heard, and it makes sense to me, that the biggest killers in the loan bubble are the outside loans where there is little flexibility and the credit of both kid and parent are hit and the loans are even given to those with bad credit but with higher interest rates. These outside companies are giving the loans purely to MAKE money and anyone taking loans from them have to be very careful. One mis step, one missed payment, anything gets them on you.</p>
<p>I don’t blame the colleges as much as I blame the current culture that says everyone just “has to” go to college, has to go immediately after hs and shouldn’t “settle” for a lowest cost local option- or relevant pre-professional or tech training progams. This isn’t much different than the housing bubble or buying a more expensive car than you can afford payments for. If there wasn’t a drive for that bigger, better house, the loans would have gone begging, no?</p>
<p>We see top performers on CC agonizing about getting into a top school. Likewise, I think many look at the posts about kids who did get a great job and assume our kids will be as fortunate. But, the degree doesn’t guarantee anything. In many cases, many kids end up where they could have been, without the degree.</p>
<p>I mean, think about it- except for professions, were/are all of our coworkers degreed? Were the ones without a degree, but highly competent, always held back? How many career paths truly require higher writing skills or critical thinking (beyond what’s required specifically for that job?) And, when we look at coworkers, were all the degreed ones always better than the non-degreed?</p>
<p>Mom2, we pay on the PP loans, starting about 60-90 days after the 2nd half has been disbursed. So, freshman spring, we started- and it was a lovely low amount. Each sping, it goes up, based on the addl loans. Many parents don’t consider that- the initial payments can seem more reasonable than the final tally.</p>
<p>What cptofthehouse said. The good part of the PP loans, something that I saw right off the bat when applying / receiving them, was the flexibility in payment terms. That <em>almost</em> makes up for the now-seemingly usurious 6.9% interest rate. But it was either the PP, the HELOC (didn’t want to marry ed money and mortgage money) or private loans (high interest, no flexibility).</p>
<p>My kids went to OOS publics, thrived, and the PP was the right choice, and will be paid back within a few years. Just have to stay on top of it, like looking forward says.</p>
<p>It;s not the credit check that will kill low income familiies who are responsible in paying their bills. It’s their income</p>
<p>I may not have been clear with my words. When I said “normal and responsible credit checks” I didn’t mean just looking for credit “dings”, I meant a normal procedure for checking credit worthiness…which of course included INCOME. That’s been my point all along. People who don’t have the INCOME or ASSETS to justify borrowing large amounts of money should not be allowed to do so. Period…Otherwise the feds are acting like the Mafia…giving loans to people who can’t afford them, and then having them “on the hook” for the rest of their lives…and not caring that these loans will likely ruin their lives.</p>
<p>And the income guidelines don’t necessarily have to be as strict as they would be with a private loan . . . there’s no reason why they couldn’t be significantly more lenient. But there still has to be some kind of guideline! I mean, really - do you want to give a PP loan to a family living on gov’t assistance with zero earned income and a “perfect” credit history? That’s INSANITY!</p>
<p>The loans do not require a perfect credit history even, just no outstanding debts and they do ask if the candidate has a job and where that person is working. And, no, there does not have to be “some” kind of guidline for income. I don’t even know if there is. </p>
<p>I don’t know what the default rate of these loans are and who the defaulters are. Without that info, I won’t make any comments. The program will die out when there are so many defaults that the return money is not making it for the demand for the loans, which was a major reason that the burden of the loans was changed from student (as they once were) to the parent. They found that too many students could not care less about repayment and the process of getting the money back from them over many years was too costly and tiresome even for the government. Also going for the bigger bank accounts, ready income and concern about credit of the parents made it easier to increase the amounts which I personally believe has contributed to the high increases in college costs. </p>
<p>Kelsmom and others could probably give a better profile of who the borrowers of PLUS and the defaulters tend to be. For whatever reason, I have seen a lot of families gravitate to private loans where the parents are the cosigners rather that going PLUS even when the terms are more stingent, credit history and rating are taken into account fully and both parties are fully on the hook, sometimes on a even beyond a “till death” period.</p>