<p>Also, there is no reason to HAVE to take on 80k in debt for undergrad. If you spend two years at community college and then two at a in-state university, I don't see how loans COULD even equal that amount, unless perhaps you lived in expensive on campus facilities at your community college.</p>
<p>
[quote]
But there's a difference between the loans needed to go to a good state university and the 60-80K the original poster was talking about.
[/quote]
</p>
<p>Perhaps, but here in Calif., a good state university would be the UC system, which costs approx. $25K per year (unless your home happens to be close enough to the campus you were admitted to). Nowadays, it often takes 5 years for UC students to graduate due to overcrowding. So even with 2 years of cc, you may be looking at $75K in tuition. The Cal State system would be cheaper and perhaps there might be a campus near your home, but I'm not sure that most of them qualify as "good" universities.</p>
<p>Merkur, the whole issue has many very concerned. After the NYS investigations into the major improprieties regarding the SL industry and academia there were a few in congress from the various political parties who stated the situation should be investigated and reforms made.
However, after a few photo-ops and op-ed pieces not a great deal has been done (at least from what I can find out). There are several probable reasons. The first would be after the Bear Stearns debacle, congress would tend to be very reluctant to publicize further problems which resulted from inadequate oversight of financial entities. So its very likely many in Congress were reluctant to pursue that matter as the SL industry is more layered and would effect more people than the Bear Stearns situation, as bad as that was. Also there would be some concern or outright fear that too many inquiries could cause further drops in overseas confidence about the stability of the US financial system. And of course the SL contingent played that card well with the PR blitz about liquidity and people not having the ability to go to college as a presumed result.
Another unfortunate but obvious factor would be that for years the SL industry has lobbied in congress with intensity and very few have not taken money from their PAC. So serious investigation or reform could be troublesome for a sizable contingent in congress. And any serious investigative inquiries could be obstructed from within because the larger SL interests have been fairly successful in getting their people or those sympathetic to them appointed to administrative positions within the US department of education. A good example was what happened with NN over billing the US government some 1/4 billion. The impetus for an investigation or even to block the loophole (one of questionable legality) which let that little trick slip through seems to have been quashed within the government itself. The man who came into the open about the problem was apparently forced out of his job with the GAO. Hard to have oversight or reform when the necessary information is effectively controlled by the entities needing watchdogs.
However enough reputable information has gotten out about the improprieties because of several consumer rights and student rights organizations that the whole mess can't be safely ignored too much longer. And an increasing number of people are in trouble with the SL payments because of a very troubled economy and so will no longer be able to compensate for the demands of the SL industry by using other resources. So its very probable many in congress will no longer be able to ignore the issue or to withhold statement on the matter. Because of the associated heat from the mortgage mess it might be politically problematic for many in Congress to be perceived as being too close to what many now consider a rapacious industry. </p>
<p>And M. Bay, perhaps some students will not be able to go to college without taking debt but that is one of the problems inherent to the manner in which the US has decided to fund higher education. We have become so accustomed to going into hock that we no longer perceive that other countries have formed considerably more workable systems.
And 80,000 being only two years salary, perhaps but that is contingent on having the type of a job which pays that well. And with our current state of inflation combined with the highest recorded level of personal debt, that two years salary won't go all that far. And depending on the field most just out of school are not going to make 40,000 a year. And as noted earlier in this discussion all it takes to blow that 80,000 into impossible territory is a deferment, or a period of unemployment or underemployment. Those are the type of conditions that the SL people rely on for their enhanced profits-and because of the way the laws and regs have been skewed to their advantage-they certainly have no need to be tolerant or prone to negotiate.
And that may get worse this summer, as some are projecting a 20+% SL default rate because of our current economic mire.</p>
<p>Since AnotherAngryTeen dismisses other people's experiences so lightly, I am curious to know how much experience AnotherAngryTeen has with the following:</p>
<p>1.) holding a full-time job</p>
<p>2.) paying for medical and car insurance</p>
<p>3.) paying for a car and car maintenance</p>
<p>4.) paying rent</p>
<p>5.) preparing and sticking to a budget</p>
<p>Bay - surely you are not expecting a college student to borrow every dollar needed for college? Using a "good" college as rationale - one can rationalize just about anything.
Tuition at UCDavis is $8400 a year - that is a bargain in our neck of the woods. A student CAN live much cheaper off campus if they so desire - I could give you plenty of "back in my day" stories about that.</p>
<p>The reality is - many students will need to borrow some money. To borrow $80,000 is ridiculous and is way above the Stafford loan threshold which means private loans come into play.
My own kids need to borrow money but I won't let them borrow above what they can borrow with Stafford Loans - that is plenty of debt.</p>
<p>BTW- there are lots and lots of college grads out there who are making less than $40,000/year when they graduate.</p>
<p>OP,</p>
<p>I'm a bankruptcy attorney. I recently had a consultation with a prospective client who is a newly minted "elite" school graduate. She has $120,000 in student loans and is working a $30,000 job. The look on her face when I told her that she couldn't discharge her student loans in bankruptcy says it all. Unfortunately, I've had the same student loan conversation with other clients. In short, yes, debt matters and it's a very big deal. Trust me on this. Your goal should be to complete your education with as little student loan debt as possible.</p>
<p>I think that most will grant that banks have made a lot of money in this century though some have had indigestion from bad loans. And many workers in the banking industry have done very well for themselves.</p>
<p>To the original poster: where do you think their profits come from? You generate wealth by creating incoming cashflows that require little effort to maintain. Guess what happens when you go in the other direction. You wind up with the opposite of wealth. If someone asks you what your net worth is, you'd have to tell them that it's a negative amount to be honest.</p>
<p>"I'm a bankruptcy attorney. I recently had a consultation with a prospective client who is a newly minted "elite" school graduate. She has $120,000 in student loans and is working a $30,000 job. The look on her face when I told her that she couldn't discharge her student loans in bankruptcy says it all. Unfortunately, I've had the same student loan conversation with other clients. In short, yes, debt matters and it's a very big deal. Trust me on this. Your goal should be to complete your education with as little student loan debt as possible."</p>
<p>What typically happens to people like this?</p>
<p>She pays $4K in Federal Taxes, about $2K in SS/Medicare leaving about $24K. Shares an apartment with three others for $4,000 a year in rent and utilities. So she could pay $1,500/month ($18,000/year) and pay the loan off in 10 years (assuming 8%). Leaving her $2,000 for health-care deductions, food, transportation, entertainment, clothes, emergencies. I suppose that it's possible to do that but how many would like to live like that?</p>
<p>On the other hand, I was in a McDonalds a few weeks ago and there were two kids, about 16 years old, well-dressed (for 16-year-olds) applying for summer jobs. They were very respectful: good students with prior job references. I think that the restaurant would be fortunate to get these two candidates. On the side of the building was a banner that advertised that they were looking for assistant managers with starting salaries at $35,000. I understand that jobs at the regional level at our local McDonalds go up into six figures. Sometimes I wonder if spending four years of life and $120K in tuition and starting at $30K is the better route unless you know that you're going to make far more with that sheepskin down the road. I think that McDonalds helps with tuition for some employees.</p>
<p>So do your prospective clients just eke out a living to pay off loans? I can imagine that this creates a lot of anger in this population.</p>
<p>
[quote]
'm a bankruptcy attorney. I recently had a consultation with a prospective client who is a newly minted "elite" school graduate. She has $120,000 in student loans and is working a $30,000 job
[/quote]
</p>
<p>I wonder how she was able to obtain $120K in loans. Do you know? It is surprising that she did not know that student loans are not dischargeable in bankruptcy, as I'm pretty sure that info is included in the loan docs.</p>
<p>
[quote]
Bay - surely you are not expecting a college student to borrow every dollar needed for college? Using a "good" college as rationale - one can rationalize just about anything.
Tuition at UCDavis is $8400 a year - that is a bargain in our neck of the woods. A student CAN live much cheaper off campus if they so desire - I could give you plenty of "back in my day" stories about that.
[/quote]
</p>
<p>I was using an approximate cost of UCs as an example in response to the previous poster who seemed to think that $60-80k in loans for a good state u was not necessary. UCDavis's "fees" (as they call their tuition) are actually closer to $9000 per year. If you live at home, then yes, this is not exhorbitant. Dorm costs are $10-11k per year, so if you need to live on campus, then your COA will increase to about $20K per year, or $80K total. Cal's estimated COA is a bit higher - approx $25-26K.</p>
<p>"I wonder how she was able to obtain $120K in loans. Do you know? It is surprising that she did not know that student loans are not dischargeable in bankruptcy, as I'm pretty sure that info is included in the loan docs."</p>
<p>Ever go to a real-estate closing? They stick this huge package of papers in front of you to sign. Are you going to just sign them and go to enjoy your new house or are you going to spend an hour reading them and asking questions with a bunch of people in the office waiting for you? I did read them all at the closing even though my lawyer already had read them. Perhaps the requirement of a lawyer to sign school loan documents would be a good idea. The loan amount that this lady has is more than my mortgage amount.</p>
<p>One other thing: when you download free software, and go to install it, do you read the entire EULA?</p>
<p>I don't know why you guys are fussing. 80K only? Pfft. Be a real man and take on 200K debt, OP.</p>
<p>The problem is that not everyone has the option of attending even a good state school without substantial debt. For me to attend Wesleyan University, where I'll be next semester, will cost roughly $2K more a year than if I attended my state's flagship university, University of Massachusetts at Amherst. The state colleges in MA are terrible, and while I would graduate with half the debt, I'd likely get half the education. </p>
<p>And not all parents are willing to pay anything, but they also do not advise against loans. My friend is attending Boston College and supposivly paying for all of it herself in loans, $200K in total. That is absurd, yes, but her parents are not advising her against it. They think she is going to get out with a $100K job and that she will be fine. She thinks that, too.</p>
<p>I'm going to graduate with $50K in debt, $60K if I do the 5-year BS/MS program I plan to do. Yes, that's alot of a debt, but my other options aren't much better. I'll be living at home, I guess.</p>
<p>
[quote]
The state colleges in MA are terrible, and while I would graduate with half the debt, I'd likely get half the education.
[/quote]
</p>
<p>don't be so sure about the "half the education" part. What's wrong with UMass?
Like I said before -
[quote]
Using a "good" college as rationale - one can rationalize just about anything.
[/quote]
</p>
<p>Bay - I am not disputing the cost - here in PA the local Penn State campus charges $12,000/ year. There are however, ways - no one says you have to complete in 4 years. Lots of people work and attend part time.</p>
<p>The only way for most 18 year olds - with no credit history -can get those loans is to have a co-signer.</p>
<p>
[quote]
Ever go to a real-estate closing? They stick this huge package of papers in front of you to sign. Are you going to just sign them and go to enjoy your new house or are you going to spend an hour reading them and asking questions with a bunch of people in the office waiting for you?
[/quote]
</p>
<p>Yes, I have purchased and refinanced several homes and I have always read every document. In fact, I have always found one or two errors in the documents. I don't recall every having the documents presented for the first time at closing, rather they are provided much earlier in the process.</p>
<p>No, I don't read the EULA for free software, but I certainly would if the purpose of it was to put me in debt.</p>
<p>Concerning what people should know, in the recent past that information hasn't exactly been clearly disseminated. At colleges they do a brief seminar on the responsibilities of student loans but that is usually a 10 minute blurb and a handout sheet.
On the loan application yes some of that information is there, but it is written in such a manner that anyone outside of the legal field (especially civil law) is going to have a time finding all the little clauses and dirty tricks.
Additionally the inability to apply for credit protection on SL's is a recent revision, but that hasn't stopped the SL people from applying it to loans which dated prior to that regulation. And although it may be 'law' how in perdition could the SL note be virtually the only debt from which these protections have been stripped. Or could it be equal protection under the law only applies if it doesn't involve those CEO's and shareholders? And if that's the actual case, why pretend the whole situation is anything but equivalent to the good old days of robber barons.
And given the 6% per year rise in college tuition and the glaring fact that the SL companies make more from enhanced fees and hidden charges than they do the original note...its not surprising that these 80,000 debts do exist. Even if a student does borrow responsibly a few years in a substandard paying job is enough to ensure the amount balloons upward. And gods help the people going to the Ivy's they may have better connections but at times those aren't enough to compensate for the debt loads. But no matter if these people spent the most productive years of their lives doing little but paying off sham and manipulative debts its not like that could ever hurt the housing, automotive, electronics or retail industries. Compared to SMC, NNC or their brethren those industries produce nothing of value.
And that's why the NEA and other professional journals has specifically published articles about this issue. And the NEA for example has clearly pointed out SMC as an example of how bad the situation has become. The NEA knows that if these trends continue this country will lose school teachers by the thousands. But what society really needs teachers, its not like the produce anything of value?<br>
But hey, as long as a few large companies can post 220% percent profits from questionable fees its alright, it'll trickle down and we'll all be ok...and so what if a entire generations most intelligent, ambitious, and generous end up as postmodern paupers and debt slaves to a few connected corporations and their CEO's...a nation doesn't need those kind of people anyway.</p>
<p>"The problem is that not everyone has the option of attending even a good state school without substantial debt. For me to attend Wesleyan University, where I'll be next semester, will cost roughly $2K more a year than if I attended my state's flagship university, University of Massachusetts at Amherst. The state colleges in MA are terrible, and while I would graduate with half the debt, I'd likely get half the education."</p>
<p>Were you accepted into the Commonwealth College (Honors program at University of Massachusetts)? It's a school within a school and it looks like there's a decent chunk of scholarship money in there.</p>
<p>"And not all parents are willing to pay anything, but they also do not advise against loans. My friend is attending Boston College and supposivly paying for all of it herself in loans, $200K in total. That is absurd, yes, but her parents are not advising her against it. They think she is going to get out with a $100K job and that she will be fine. She thinks that, too."</p>
<p>I think that BC is a great place to get an education. But there are state schools that have stronger programs in certain areas. And I would never recommend it to someone that had to take out loans over one-tenth that amount to attend there.</p>
<p>"Yes, I have purchased and refinanced several homes and I have always read every document. In fact, I have always found one or two errors in the documents. I don't recall every having the documents presented for the first time at closing, rather they are provided much earlier in the process."</p>
<p>Do you think the average teenager going to college does the same thing?</p>
<p>"But hey, as long as a few large companies can post 220% percent profits from questionable fees its alright, it'll trickle down and we'll all be ok...and so what if a entire generations most intelligent, ambitious, and generous end up as postmodern paupers and debt slaves to a few connected corporations and their CEO's...a nation doesn't need those kind of people anyway."</p>
<p>Perhaps that's why there isn't an AP Finance. Can't scare them away too early.</p>
<p>
[quote]
There are however, ways - no one says you have to complete in 4 years. Lots of people work and attend part time.
[/quote]
</p>
<p>Yes, this is absolutely true, there are many ways to finance your education, but unfortunately there are not always many ways to finance the education that you are qualified for. "Good" u's do not always allow part-time enrollment, and even when they do, you will still need to pay the same COA, you are merely spreading it over a longer period and delaying your degree for several years. It is obviously a cost-benefit analysis for each student. </p>
<p>Having financed my own education with student loans, I am less averse to them. In fact, I am in the camp that values an education from a "good" u over a new car or purchasing a home right away. My loans did motivate me to take a top-paying job and it was very stressful, but I don't regret it in the least. I travelled quite a bit for my job, so I didn't feel I had missed out on vacation-type experiences. My income increased quite rapidly, and I managed to pay off the loans in 10 years and then immediately purchase a home.</p>
<p>I'm not condoning taking out $80K in loans if it is not absolutely necessary, but I would probably do it if it was my only avenue to an outstanding education.</p>
<p>Angryteen, yes, things can work out with heavy debt. They can also cause stress and problems. I know many, many kids who have graduated from top schools more than 10 years ago and are not making anywhere near $80k a year. Many are not making much money at all. There are certain fields that just don't pay much and if you love that work, you have some tough decisions to make. My friend's son studied to become an accountant, only to find he despised the job to the point where it gave him horrible cluster headaches. He is the type of person who just loves to work with kids and families. He has his dream job, but it just does not pay much. He has no where near $80k in debt, but it is a struggle for him to pay his loans and be on his own two feet financially. He is fortunate to have a family who can afford to help out though he is doing the best he can himself and is not seeking family assistance. If he were from a family that is financially struggling, it would really be a tough situation.</p>