<p>our 401 K has lost so much money lately- we were barely recovered from 15 years ago, and now essentially every area where our money is, has gone down more than 10% between about 20 different funds & stocks.
:p</p>
<p>pmrlcomm, look at the article in one of the first posts here (I'll try to go back and find the exact cite). It describes a trade school grad and how her loans ballooned up past the amount she origlly borrowed. The trade school loan issue is a nasty subset of the overall "college loan" issue. From what I've read these are private loans (ie, not necessarily a bank or college loan agency) marketed sometimes directly to students targeted by trade schools or proprietary schools with onerous terms that border on fraud. They will sometimes result in the interest on the loans becoming part of the principle and then you get interest accruing on the new principle. Interest rates are higher, the whole mess escalates like a bad credit card gone out of control. It is a whole different ball game than a traditional college and a traditional "college loan".</p>
<p>Since you say "what amounts to a cmmty college", I assume it is not actually a cmmty college. In our town we have these things some of which are called "business colleges". They advertise as training you for jobs like data entry, medical records asst, and stuff like that. Perhaps the school you are talking about is a "proprietary school". They are trade schools that operate outside the traditional cmmty college/college/univ framework.</p>
<p>Yes, these are private lenders. The principal was originally $110k but has ballooned up to $123k with interest and penalties. They are, none-the-less, protected from bankruptcies so the end result is they are a "traditional" college loan in that respect.</p>
<p>some of those trade schools are really skanky.
They seem to target students who aren't " college material" but are looking for post high school education to help with careers. Their parents are often not savvy or even in the picture and these kids can be very naive about the actual worth of the " education" and about the total expense.</p>
<p>In particular I have heard things about the " art institutes" who want to see a portfolio, but tell everyone they have " talent".Its possible to eck out training there, but I think for quite a few students it is a waste of their time and money.</p>
<p>Here's the link from a prior post:</p>
<p>And here are pertinent paragraphs:</p>
<p>"By the time Lora Ladd graduated with an associate degree in 2005, Brooks College, a for-profit, was on probation for its run-down buildings and poor academic standards, and for misrepresenting job-placement rates. The school has since announced plans to close.</p>
<p>Ladd's first "career" job turned out to be a $10-an-hour customer-service gig at a printing company. She'd borrowed $20,000 in private student loans from Sallie Mae — the nation's largest private student lender — but wasn't able to make payments and quickly went into default. Some days, she says, creditors would call 20 times.</p>
<p>Documents show the principal on Ladd's Sallie Mae loan has increased from $20,000 to $35,000 because of accrued interest and penalties. The interest rate is now 14.875 percent; her monthly payments $487. Add the federal loans she took out in her father's name but which she pays down, and her total debt now stands at more than $52,000 — $12,000 more than she borrowed — with monthly payments of nearly $700.</p>
<p>"It's made me feel hopeless at certain points," said Ladd, who said the stress has led to tears and contributed to bouts of depression. "I work and I work and I work, and all I have to show for it is paying this company money which doesn't go toward anything."</p>
<p>Three years after graduating, Ladd, of Portland, says she is getting back on her feet. She has realized one dream by starting her own business, a personal-assistant and maid service. For Ladd, one of the attractions of self-employment is that loan companies can't easily garnish her wages. She plans to pay back her loans in full."</p>
<p>Note the presence of the evil Sallie Mae in this story. They are the student loan equivalent of Fannie Mae and Freddie Mac. Also note that Brooks College is described as a 'for profit'. I think this is what is called a proprietary school in student loan lingo.</p>
<p>How in the world could an almost cmmty college cost $110k in principle in a loan? Our real cmmty college is so cheap you could pay a year's tuition by working full time at McDonald's over the summer.</p>
<p>Community colleges in the northeast typically run $3500 to $4000 per year. But they don't provide dorms so students have to take care of their own living expenses. Hard to see how you get to six figures at CC - must have been a CC-like education at very high prices.</p>
<p>I have been reading follow up articles and in some cases it seems like people borrowed stupid amounts of money, but is also seems like there are some usurious late fees, penalties, and interest rate increases out there....$20k loan becomes $35k, $35k loan becomes $120k with penalties.</p>
<p>I would have thought that if the student loans are via a govt vehicle, or guaranteed by the govt, and not able to be BKed, that there would be some protections to the student to make the loan NOT like going to a check cashing place. Doesn't sound like that is the case, though these articles can be mis-leading so it is hard to know the real story</p>
<p>Our cmmty college tuition is roughly $3500 a year. Last summer D2 earned $4,000 over the summer, admittedly not at McDonald's. D1 earned $2,000 or thereabouts. And I realise that cmmty college doesn't have dorms, but even if they did, you'd still have to pay for them. BUT a lot of the kids I know who go to the cmmty college live at home, so they have zero living expenses. But then there is transportation. If you don't have a car, then it is either ride a bike or ride the bus.</p>
<p>Now we are in the midst of a local dustup on the bus system, and there was a letter to the editor where someone complained their child had to drop out of cmmty college cause they couldn't afford the bus. This mom wanted the bus to be free for students. I don't think we have the tax base to do that. D2's college city has buses free for students, but it's actually a hidden expense in her college fees, so you're really paying that upfront. Anyway, a part time job could probably earn enuf to pay bus fare. Why does everything have to be free? My FIL worked as a garbage man to pay for college. Now everybody wants it to be free.</p>
<p>The photographer who did S's senior pix told me he spent 8 years at state u and chgd his major 4 times. His mom said she would only pay for 4 years. So...the 2nd 4years were on him. He worked a 40 hour/wk min wage job while going to school full time and living in a cheap apt. To wind up with a photography business. And no student loans.</p>
<p>She was stupid. Kept borrowing money for living expenses. Would take just enough classes to not have to repay the loans. No one asked why she kept needing loans...just kept signing.</p>
<p>Let's get real. If the economy is tanking, then the market forces will force school tuition to slow down its rate of increases--or perhaps even drop.</p>
<p>Here's an article that predicts just that--and talks about how, inevitably, the increases just cannot continue at the current rates:</p>
<p>I have little sympathy for people who borrow or spend beyond their means. When H & I were in school, we drove a >10 yr. old used car that my dad kept running and we drove it until it was 17 yrs. old and the engine literally fell out from rust. My brother took it for parts. We ate hamburger helper a LOT (to this day, I find hamburger very unappealing), drank tap water, and used the university's computers (yes, it was before the days of PCs). I worked a part time job in the beginning, and later on one or the other or both us had 3/4 time assistantships (as opposed to the usual half-time) that enabled us to get by and finish without debt. </p>
<p>When we graduated, we rented a newly constructed small house and our first and only purchase that year was a washer/dryer (which we still have 26 years later!). We bought that house after a year, and my parents loaned us $10K for a downpayment and we paid them back within a year with interest. And I wasn't working. </p>
<p>It can be done, but I think today's kids (not all) want a new car, not a clunker; the latest laptops and Iphones and electronics, designer clothes, and they don't want to work at a fastfood restaurant for min. wage for spending money. And I'm sure we all are aware of kids (and older students) doing the wise thing--no or minimal loans which they will pay off as quickly as possible, and living within their means. It is unfortunate that so many are just not being made aware of what such massive loan (or cc debt) means to their future.</p>
<p>The community college I am currently attending- is about $1,400 a qtr- say $5,000 once you include misc fees, many classes have technology fees.
Of course this doesn't include books.
Just for a 5 credit ( full time) course I am required to have notebooks- rite in the rain books, rain gear, boots/gloves, safety equipment on top of textbooks.</p>
<p>Of course it is not in my city- so I have to drive- as the time involved for public transit- would be at least two hours each way- to change counties.
So I have wear and tear on my car & while we do some work as we can ourselves, it is getting to the age when it needs more spent on maintainence.
Last qtr- there were several people in my area, with whom I could carpool, however, this qtr as I mentioned my carpool partner is homeless, so I feel guilty about asking her to pay more than she can.</p>
<p>While I have been looking for work- it is difficult because most of my volunteer experience, is for jobs that require advanced degrees- and I don't have recent experience in retail or other type work( or a degree). A younger student would have an easier time however, my daughter who still lives at home is the only one currently working in the family, she just found two retail jobs ( nobody hires full time- then they would have to pay for ins), but I am assuming she will be smarter than I & resist when they try and force her into wearing heels!</p>
<p>I really don't know students like in the article, but when you have been told that college is the way to being financially independent, when even instate public schools are hard to manage ( especially when many parents do not contribute to kids education expenses- many have told me that my 18 year old is lucky we " let" her live at home), it isn't hard to rack up bills using credit cards to pay for medical expenses and groceries.</p>
<p>( and please tell me what kind of washer and dryer lasts for 26 years- our first one was a handme down from inlaws & we had to replace it about 7 years ago- the dryer still works, but the washer is a waste of water and energy.)</p>
<p>Actually students for the last generation have been caught in a rigged system. As noted one of the drivers for increased college costs (an average of 6% yearly) has been the transference of academic/student funding to the privatized loan base. </p>
<p>Once that occurred the fiscal discipline the academe once had, and was once compelled to maintain, disappeared. The transference of the educational funding burden to students and their families essentially removed colleges from the perception of consequences. Unfortunately, the money was there without the old constraints on funding. And as a result of the loans the colleges became acclimated and dependent on that funding source but once the students were out the consequences of this system-and any sense of ethical consequence for academia also disappeared from view. And given the marketing pressure on colleges by these same companies any lingering ethical concerns faded away in the breeze. Despite last years investigations within academe the influence of these predatory companies is still very evident. For example students are counseled on student debt risks using materials which are provided by the same companies which have a vested interest in enhanced student debt. In other cases brochures are provided by 'non-profits' which are little more than fronts for these same companies. And at some institutions the handling of scholarship applications is actually being vetted by private corporations. All of the aforementioned examples are from current activities within Colorado higher education, and within the last year. </p>
<p>With these kinds of goings on, is it realistic to presume that college students are really being given the straight story about what the risks are? And since sophomores and freshmen still trust their schools, when that trust is betrayed will they be able to percieve what has been done to them? In a few years, after the financial disaster sets in, they might but then all that can be done is resentment. </p>
<p>Our alleged representatives in Congress and the Executive branch played a seminal role in the development of this debacle. As noted beginning in the early 80's there was a shift from grants and other like student aid to the privatized loan model. Supposedly this was intended to provide more effective use of money by turning the system over to the private sector. </p>
<p>But what actually happened was a government sponsored corporatism, wherein the primary beneficiaries were the limited number of companies allowed to control this government sponsored 'free market'. As such costs escalated beyond ,measure or reason because these same companies had governmental carte blanch (for example SMC's 220% increase in fee revenues since 2001) and little oversight (in this weeks "Chronicle" there is another expose of overbilling the government, to an estimated 1.2 billion +) And nothing is effectively done about these abuses of government monies, students, families and academia because of the lobby influence in Congress and the Executive branch. </p>
<p>Accordingly under those paradigms is it really possible to believe this entire system was ever intended to benefit students? </p>
<p>And as far as excessive student loan debts, sometimes it's not a matter of student's or families being irresponsible or stupid. Due to the costs of education, and the tricks played by such as SMC or NNC, it's not impossible for the original loan amount to double or even triple. Many of us who work in academe can attest to these tactics, as we can attest to the adverse effect of the obscene amount of power granted to these companies to pursue their profits. A power which is unparalled in consumer law and debt rights. As Dr. Warren of Harvard so eloquently stated the student loan companies have been given powers the mob would envy. </p>
<p>So perhaps some sympathy would be appropriate for current students and students of recent generations. They have been masticated by a system which is corrupt, inefficient, and exists soley to turn the promise of education into a form of postmodern indentured servitude. Plantation sharecropper overseers, mine town company store managers could only have dreamed of such a system. Massive, predatory, and sponsored by the national government...</p>
<p>"and please tell me what kind of washer and dryer lasts for 26 years- our first one was a handme down from inlaws & we had to replace it about 7 years ago- the dryer still works, but the washer is a waste of water and energy."</p>
<p>Our refrigerator, washer and dryer are all 20 years old. The dryer and refrigerator work fine. The Frig is probably more efficient than modern units as it uses CFCs. The washing machine pump died ages ago - could probably just fix it but too lazy.</p>
<p>Our daughter takes CC courses twice a week. It's a 40 minute drive from home and 20 minutes from work. It's a great experience for her though so I pay for the courses, books, and transportation including time. Only another two years and she's done with high-school and she should have about one to one and a half years of college credits.</p>
<p>oh our fridge jsut died too- but it actually did pretty good, cause we had had it for 10 years and my mother had it before that for 10.
We didn't get a full size one to replace it- but one that is more like a " beverage cooler" but I am wishing we had larger- well maybe when the economy picks up.</p>
<p>Our approach was to buy the cheapest stuff that we could find at Sears. I think that the stuff with bells and whistles tends to go faster than the stuff that they make millions of.</p>
<p>Q&A follow up of the articles published in the Seattel Times (happening now):</p>
<p>
[quote]
College Debt Q&A
Representatives from the University of Washington and Seattle University will answer your questions about financing college 1-3 p.m. Tuesday, Oct. 7. </p>
<p>Janet Cantelon is the Director of Student Financial Services at Seattle University. Kay Lewis is the Director of Student Financial Aid at the University of Washington
[/quote]
</p>
<p>Atana, I'm sure you have sympathy for your neighbors whose big screen TV's and late model BMW's are getting hauled away by the repo man.</p>
<p>People take on loans for all sorts of stuff. Sometimes they actually read the fine print and sometimes they don't. That doesn't make their igorance excusable.</p>
<p>I financed grad school through a large commercial bank. At no time did I delude myself into thinking that the loan officer cared about my education. At no time did I delude myself into thinking that the bank cared about how long my maternity leaves would be. I signed a note; I was an adult; I went back to work well before I wanted to after my kids were born because I had loans to pay.</p>
<p>Fraud is fraud, and the institutions who perpetuate it should be subject to legal action. Ignorant people who read marketing material with fancy graphics and nice photos and think, "hey, these people care about my education" need to accept their responsibility for having signed on for loans they couldn't afford to pay back. It is really irresponsible to claim foul once you're 125K in the hole.</p>
<p>And no, the bank didn't send me a thank you note when I paid off the loan. It was a business transaction. Some of my neighbors who are now having difficulty with educational loans are actually amazed that the banks make a good faith effort to collect the money they are owed.... amazing isn't it. I mean the bank should understand that gas prices are really high and all and that now is just not a good time to start repaying my loan. Maybe next year.</p>
<p>I feel sorry for everyone caught it this situation, especially the young people. It was rough for H and me to have our student loans, but the amounts in ration to our salaries were not anything like the numbers we are seeing now. I am seeing kids who are $40-120K in debt, and they were encouraged by the schools to take these loans. I have a hard time swallowing the loans that some of these schools offer to 18 year old kids over and above what Stafford loans are. I think that is plenty of debt for kids; beyond that is just not recommended for kids who are doing undergraduate work. Any loans above that should be parental loans.</p>