<p>Student</a> Loan Bubble: The Worst Investment in History... - Baltimore Investing | Examiner.com</p>
<p>is-the-college-debt-bubble-ready-to-explode:</a> Personal Finance News from Yahoo! Finance</p>
<p>Just get ready for more massive tax payer bailouts to cover the billions that are about to be lost.</p>
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<p>Actually, $24,000 in student loans doesn’t seem so bad to me. And why should it take 20 years to pay off that much? </p>
<p>The ones I feel sick about are the ones who borrowed $100,000 for a BS…</p>
<p>Quote from article: Only 10% of all graduates can find work out of college. Unemployment for college graduates sits at the highest rate since 1970, leaving many students with no jobs and tens of thousands in debt. And rising tuition costs even make inflation look tame…</p>
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<p>Sorry but is that a typo? only 10%?</p>
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<p>Right it doesn’t seem like that much, but many kids leaving with that debt aren’t getting economically viable jobs these days and run out of deferment time and end up missing a couple of payments. That’s all it takes are a couple of missed payments before penalty fees and penalty interest rate hikes kick in and start creating a never ending cascade of insurmountable debt for these students. The government has cut back on student loan funding and people like Senator Ryan are proposing that we cut even more billions away from things like Pell grants. The results have been more and more families and students being funneled towards private loan vendors which give out loans with much less favorable terms and interest rates than a government loan. You can read the hundrends, if not thousands of stories of student loan hell on this facebook group that got a lot of press a little while back:</p>
<p>[Forgive</a> Student Loan Debt to Stimulate the Economy | Facebook](<a href=“Facebook Public Group | Facebook”>Facebook Public Group | Facebook)</p>
<p>What does that say when 40% of government student loans are now in forebearance or default? It screams that you have a completely overpriced product, too many people taking out way too much debt to obtain that product, and now can not afford to pay back what they owe because that product is simply not giving a fair return on investment. A never ending rise in tuitions (just like housing prices pre 2008)? A never ending supply of questionable lending practices and loans to fuel the fire? It’s subprime mortgage crisis part II all over again. There is now more student loan debt than credit card debt in this economy. We should all be ready for huge tax payer bailouts of the banks that are about to lose billions once this unsustainable system comes crashing down that will be needed in order to prevent complete insolvency of our higher education system. Banks are to blame for giving out bad loans, colleges and their presidents are to blame for turning a blind eye to what is going on and constantly escalating their tuitions that far exceed the price of inflation, and students and families are to blame for buying into the scheme and taking out loans to go to pricey schools. The entire system is set up for huge failure and it is going to crash at any moment now.</p>
<p>This quote from the second link says it all!</p>
<p>“As a result of easy credit, declining grants and soaring tuitions, more than two-thirds of students graduated with debt in 2008–up from 45 percent in 1996. The average debt load is $24,000, according to the Project on Student Debt.” </p>
<p>The cost of a college education has increased at a ridiculous rate! Couple that with studies that show college students are spending less time studying and learning less, and it is reasonable to believe that some people are getting ripped off! I think much of this has to do with the notion that everyone needs to go to college. It devalues a college degree and is part of what has driven the prestige/ranking craziness that most buy into.</p>
<p>You are oh so right, fishymom…sigh.</p>
<p>Where are all the parents when these decisions are being made? One of our local Tier 2 LACs has an annual cost-of-attendance of $54,970. What kind of summer job even begins to cover that amount? $24,000 total debt may be defensible … $100K of debt for an UG degree starts looking like a bad decision.</p>
<p>Easy money does make it easier to get into debt.</p>
<p>You don’t necessarily have to go into debt to get a college degree though. There’s the work a little, go to college a little (a cheap college), go to work a little, go to college a little.</p>
<p>I agree, NewHope33. $24,000 is about $250 a month at 5% for 10 years. That I could see.</p>
<p>$100,000 is a little over $1,000 a month at 5% for 10 years. Quite a difference!</p>
<p>Is it possible that this generation of kids, like their parents just seem to think that money on paper has no real meaning so they just keep taking those loans. Yes, a very symplistic view however when kids graduate with $25,000 or $35,000 in debt what are they doing post graduation that they are not able to pay the loans off? The economy is in the crapper and many college grads are just not getting the jobs that past generation college grads were getting, but the reality is that paying off the student loans are not the priority of these kids. From some of my observations I see kids that would rather fly on vacation here or there and spend lots of money going out on the weekends and also paying high rents to live in NYC. They seem to be doing all of this while they have loan payments to make. It is my impression that these kids are just clueless about finances and debt, just as so many of our generation dung themselves into a hole buying homes they could not afford. </p>
<p>I do not think student loans should ever be bailed out. This generation of young people need to get a grasp on reality and start living within their means. I understand that many of todays grads are taking jobs that require them to move to the opposite coast or far from the family home but these kids also do not seem resilient enough to work their butts off to be debt free. When I went to college, college grads would work a weekend job just to make their loan payments and our generation often did this for several years. I just don’t see the same level of commitment from young people today and I think there is too much entitlement. Paying off debt can be done as long as these kids realize they may have to give up their entittled lifestyle to do so.</p>
<p>Personal responsibility, most forgot about it in era of governemtn interfering and bailing out everybody who decided to live beyond theit means, including College education, UG, Grad., Med. School, Law School, or whatever else, it is still a product available on a market for those who can afford buying. Affording does not always mean having load of dough. It might mean working hard getting high GPA and test scores so that kid has chances at Merit awards and choosing schools that give you these awards. In very many cases this process does NOT take place even when the first part (high stats and good chance at Merits) is achieved…then let’s see which elite college will take me…and yes, I will pay any money for it…somebody will eventually end up paying for me anyway…why it even matter? It does matter to people who are paying and also paying their own full load, but they are invisible for most.</p>
<p>Don’t the statistics show that college grads will earn $1million more in their lifetimes than non-college grads? If true, then a $25,000 loan seems like a drop in the bucket.</p>
<p>What makes you think student loans have not been forgiven? Parents HELOC’d their house to pay for their kids college expense eventhough there did not have enough equity(back when you could borrow anything). People withdrew more than the house was worth in the boom years and now they’re defaulting on their mortgages. The public already paid for these bad loans.</p>
<p>“The government has cut back on student loan funding and people like Senator Ryan are proposing that we cut even more billions away from things like Pell grants.”</p>
<p>I’m sure you can’t think the answer is more government money. More no strings attached money to as many people as possible, hot off the printing press, doesn’t make the price of tuition go down. When the government ends up subsidizing the maximum amount of people, the cost will only increase, with the taxpayers left holding the bag.</p>
<p>I agree with almost every other comment on this thread so far. This one, “then let’s see which elite college will take me…and yes, I will pay any money for it…somebody will eventually end up paying for me anyway…why it even matter? It does matter to people who are paying and also paying their own full load, but they are invisible for most,” really hits the mark for the attitude alot of students have. College education is assumed to be an entitlement, and it seems to be a surprise when they have to pay some of it back. And yes, where are the parents in this? I forgot…pushing their kids towards the highest ranked school they can get into, in spite of the money. Except for some of the smart ones who read cc, of course!</p>
<p>If the bankruptcy law was changed so that student loans could be discharged in bankruptcy, I think you’d see bank underwriters actually doing some underwriting and easily concluding that many of these loans would not be paid back. That would result in fewer ridiculous loans. Eventually I think that would have to result in a reduction of tuition. It might require a scaling back in some of the unnecessary amenities - the taj mahal dorms, the big student recreation centers, etc. - but those aren’t necessary for a good education.</p>
<p>PEOPLE won’t be getting bailed out, it will be the banks that will need to be bailed out for making bad loans to prevent complete collapse of our higher education system. Banks will lose billions as more kids default (which they are), they will fail, and students won’t be able to secure loans in order to pay their out rageous tuitions. No tution money flowing in means dozens if not hundreds of schools will fail once this bubble bursts. The government will HAVE to step in order to keep the whole system of collapsing.</p>
<p>Everyone is to blame, it goes beyond just personal responsibility. It is now impossible for almost any average family to be personally responsible when tuitions are spiralling out of control and 4 year tuitions are many times more than the median household income in this country.</p>
<p>Every generation thinks younger kids are lazy. Where is the data that shows kids these days are more lazy? Maybe kids these days are studying only 12 hrs per week because they are busy working 2 jobs just to pay for books, room, and board alone. Working your way through college is impossible for thousands of students when tuitions at many schools are runnng in excess of 30k per year.</p>
<p>Where is the accountability for banks and their loan lending decisions? How about universities and their presidents for looking the other way and pushing a product that is clearly not giving a fair return on investment for thousands of kids?</p>
<p>Get ready because the huge storm is coming…</p>
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<p>Excellent point!</p>
<p>Additionally, that 24,000 does not discuss private loan amounts, and parent PLUS loans (another public bailout if the parent who took the loan dies prior to paying it off, correct me if I am wrong about that, but this is my understanding regarding PLUS loans).</p>
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<p>This is so true. My husband paid for his own professional degree after his UG degree. He worked his way through professional school, worked summers, and took a very small student loan to get his graduate degree. Today that would be impossible to accomplish without a student loan the size of a mortgage payment on a home (ie: six figures).</p>
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<p>Which loans are you talking about? The government (Stafford) loans administered by the banks are not dischargeable. When students default, the government can garnish the student’s future wages to collect. So unless they never work again, the student will have no choice but to pay them back.</p>
<p>Try getting a decent paying job without a college degree…and i doubt costs will decrease anytime soon…24k in debt is less then what many people pay for a mid range Toyota, so it isn’t that significant…i feel as a parent that it is my responsibility to do whatever necessary to pay for their college education,and would never let my kids take on debt they couldn’t handle,if any at all</p>