<p>The truth is that some very pricey schools ARE more affordable than less expensive state schools. I know this because I have a D at a very expensive private school and an S at a not-the-flagship state school. We pay quite a bit less for D than we do for S. D’s aid is all need based, and S has a merit scholarship.</p>
<p>Had I not understood that it is possible D might get more money at an expensive private school, she would not have applied (just as I did not apply when I was a high school senior & had no clue that the fact that 4 of the 5 kids in my family being in college at once might actually translate into the expensive school being affordable …). She would have assumed that we could not afford it, so why bother.</p>
<p>On the other hand, I knew that S’s school choices would probably not yield the same results. He applied, knowing that only if he got really good merit money would he be able to attend … because these schools did not promise to meet need.</p>
<p>College is an investment. An educated consumer is a wise consumer.</p>
<p>Of course, educated parents are the best back stop. But there are many parents who have not have the advantages in life of you. Shouldnt we have a government that demands fairness and transparency, whether in schools or bankruptcy law.</p>
<p>Be careful assessing the local CC. People rejecting their local CC are not all ‘noses in the air’ types; frankly, an honest appraisal can show, indeed, that the local CC may be a very very poor academic alternative. Our local CC is known as ‘the 13th grade’ and sadly not without reason. </p>
<p>Your state school can also be academically weak in the area your S or D want to study. Your visit to the local state school can be eye-opening about negative things there, and interviews & research sometimes bear this out. </p>
<p>Bottom line - the local CC and state school may NOT be good academic choices, and you sometimes need to acknowledge that. These would be BAD choices to spend anything on - even your S’s or D’s time.</p>
<h2>The local option is absolutely NOT ‘better than nothing’, sometimes.</h2>
<h2>Second,</h2>
<p>The biggest un-noted challenge I see is how ‘edgy’ these financial packages often are. I mean, they are often right on the edge of the parents’ ability to pay, in current circumstances. This type of analysis does NOT take into account a.) potential significant changes in income level, and b.) the CONSTANT INCREMENTAL COST INCREASE the college itself will be adding. And oh yes, rest assured they will be adding it! </p>
<p>Even if your own employment situation remains stable, the ‘package’ is calculated at the very edge of affordability, and the college WILL increment its costs. Couple that with the usual unexpected expenses/fees that always seem to arise, and guess what? Even in a stable job situation, you may not be able to afford their junior/senior year!</p>
<p>These easy slogans aren’t helpful at all. Of course, most, if not all of us, want a government that demands fairness and transparency. This really isn’t that arguable.</p>
<p>But the question is how should the government demand that fairness and transparency? Should the government put certain regulations in place to ensure this? Hmm…maybe, but there are loads of people in the ‘private sector’ that abhor regulation. </p>
<p>Even if this is one of the areas where most of us agree that there should be more regulation, then there is the problem of enforcement. How do we make sure that the fairness and transparency that the government demands is enforced? Do we want to staff a compliance office at a university? How will we pay for it?</p>
<p>We wonder why tuition and fees keep going up when we also keep demanding more and more services.</p>
<p>I think several posters really hit the crux of the ugly matter on the head when they discussed the presentation of these loans and the hype around them. It’s almost an automatic transition to taking the loans the way many of the financial aid packages are put together. The seriousness of undertaking this obligation is not explained, including the fact that the loans are not dischargeable upon bankruptcy. They can be the ruin, not only of the student, but of the family’s financial standings. </p>
<p>I have a friend who is seriously in this predicament with a daughter making less than $250 a week, with a $90K student loan and the family is in financial trouble already WITHOUT the loans looming over their head. And, yes, mom/dad signed for some of them with the student. And this is just their first child. They have another in college with loans too. She is heading towards at least $60K in loans with a music major. </p>
<p>No bank or lending body would give many of these folks loans for a tenth of that amount. But they are getting them for education at amounts that are staggering. This has scary implications for all of us as I do not see how these loans are going to be repaid.</p>
<p>$90k in loans means much of the debt was private loans. Stafford and Perkins loans cannot be borrowed until the borrower has completed entrance counseling, during which the important points (including the fact that the loans cannot be discharged in bankruptcy, I believe) is explained. You can’t MAKE anyone pay attention to what they are reading. Private loans are another matter. Schools are often asked to certify the loans, but the schools are not usually actually a part of the process … that is, borrowing private loans is done apart from the school’s financial aid office. Schools are bound by strict truth in lending regulations, and these regs can be viewed if you pull up TILA. The regulations have been getting stricter each year, so there is a move toward that in terms of regulating anything schools do with regard to lending/lenders or interacting with lenders. </p>
<p>For those who don’t think schools have to deal with government regulation and compliance already … HAHAHAHAHAHAHA!!!</p>
<p>^^^ But cptofthehouse, this is really a crazy situation. At some level, the family needs to decide that some things are simply unaffordable, right? You would hope that they simply wouldn’t qualify for these loans, but the family should be backing away long before it gets to this point, right? How could the government mandate responsible financial behavior?</p>
<p>sklvr, I think the fed can and should amend the bankruptcy law to provide that private student loans can be forgiven in bankruptcy. That was the law for many years. Others here have noted an increase in marketing of student loans as the housing market crashed. I do no think that would have happened without the change in the BK law.</p>
<p>What is wrong with people starting with the basics; if you borrow money, you must repay what you borrowed with interest?</p>
<p>Whether or not the loan is dischargeable through bankruptcy should be a non issue, because you should be paying back the money and not looking for a way to get out of your obligation. </p>
<p>If you/your child are borrowing more than the Stafford loan limits, it should be sending up a red flag that the school really may not be a financially feasible option for you and your family.</p>
<p>Parents/students who are taking out loans know or should know before they sign the paperwork (yes, you must sign the paperwork and read the fine print) if they and how they are going to be able to repay this money back (waiting for the money fairy to make this happen should not be an option).</p>
<p>Whether or not loans are dischargeable in BK likely encourages some lenders to lend irresponsibly. I want that stopped. Why should credit card loans be discarged? What you owe your doctor? But not private student loans? There are very very few things that are not discharged. Taxes. Child support. Why should banks making student loans have this favored status. It is not like anyone can declare BK – you have to satisfy the court that it is the right thing to do. The Constitution allows for bankruptcy. Our country did not want the debtors prisons of England.</p>
<p>Mom2 - I said private loans, dont most private loans require a guarantor or co-signer? Also, under the current BL law, is it that easy, even for a college grad to declare BK?</p>
<p>kayf,
No, private loans for college don’t require a parent signature. A friend’s son who is 18 was about to sign off on a huge loan, and mom just happened to call about another matter. She stopped him, but if she hadn’t, he would have legally signed…no need for a co-signer despite not having a job of his own, or any means of paying it back. For what it is worth, this was one of those for profit (Art Institute of…) schools, so I am not sure what is required from the loan company’s that provide funds for those attending Ivies or LAC’s.</p>
That would be really bad public policy. As a society, we shouldn’t be moving in the direction of encouraging yet more irresponsible behavior. These costs don’t simply disappear when somebody skips out; others pay them. </p>
<p>A policy like this would drive up prices for everybody - loan prices and college prices.</p>
<p>private loans for college don’t require a parent signature.</p>
<p>I think this example is rather unusual…unless this happened about 2+ years ago. Since then, banking had to change their policies due to all the bank failures. </p>
<p>I think all of these large student loans and large Plus loans should require higher qualifying standards. The thought that a low-income parent that has good credit can co-sign a large Sallie Mae student loan or sign a large Plus loan is really crazy. A person should have to show that they have the income to qualify to co-sign/sign. What’s especially crazy is that many of these low-income parents are signing these loans with the understanding that their child is going to pay them back.</p>
<p>Student loans should not be dischargeable in bankruptcy. It would just encourage more irresponsible behavior. Instead, the qualifying standards need to be tougher.</p>
<p>The point about allowing private student loans to be discharged in bankruptcy isn’t to encourage irresponsible behavior on the part of students.
It’s to DISCOURAGE irresponsible behavior on the part of banks – if banks could get burned, they would stop making loans for ridiculous amounts to people who aren’t creditworthy.</p>