<p>bsumone-
Were the numbers you said you considered reasonable debt (50-200K) for advanced professional degrees (or perhaps a combination of some undergrad loans mixed with professinal school loans?) No matter what field soemone enters, entering with over 100K in loans is going to have a significant impact on their life for quite a while.</p>
<p>Lest we forget the “experts” who, back in 06-07, touted that the excessive borrowing for mortgages would not really affect the economy. We rely too much on “experts” and rest assured that Dr. X with his multiple PhD’s knows what he’s talking about even when disaster is staring us in the face. Soon we’ll have an “expert” that’ll tell us shooting one’s self in the head is not fatal and some idiots will actually try it. It’s pretty simple. College costs are rising. There are not enough well-paying jobs out there (whether or not that will get fixed soon is debatable), and if you have everyone studying the for the “hot-jobs” like computer programming, the employment market will be saturated and there’ll still be unemployment or underemployment as industry will have what it needs. I’ve lived in this country for a while and I’ve noticed a pattern. We don’t do anything until it goes horribly wrong. We gamble and gamble on different things, if it works then great, everyone celebrates the proponents, ignoring that it could have gone the other way and these people had no guarantee it would actually work. If it doesn’t work then everyone starts crying hurt and becomes quasi-experts themselves. Modern America’s education has been flawed for decades for one simple fact. People don’t want education, they want jobs. Most people only go to college because they feel that without it they’ll have to become truck drivers and this mindset has been purported by media with useless self-fulfilling statistics that show disparities in employment between college-goers and those that don’t go to college. Education is meant to be for the amateur. For nothing more than the love of learning. If that was really what most people wanted then they’d know they could very well do that without going to school if they couldn’t afford it. But people feel they must go to college to be employed so they go and they major in things like economics or English Literature which really consists of nothing more than reading a book and writing a paper (Yes, Economics. At the undergrad level an Econ degree is pretty useless. It doesn’t teach anything that actually trains one for a job. If that was true then most financial firms would be filed with Econ grad analysts and not Philosophy majors from Yale) and it doesn’t teach anything that one couldn’t have learned by themselves. Another side-effect, amplified by those stupid statistics, is the perception that graduating from college somehow validates one’s intelligence, which speaking as a drop-out myself, is totally false. Most students spend their time cramming and partying, but mostly cramming. This is the reality of what goes on in college. Students read stuff in a book, go into the test hall, get an A; ask them some questions from the test 2 days later and they don’t know, they’ve forgotten. This is what we call “learning”. Instead of psychologically forcing these people to go to university it makes more sence to set up more 2 year training and certificate programs, but even when they do get set-up, they get ridiculed because people choose not to focus on what may have been learned but instead focus on whether or not one learned it from university. To put it simply, ceteris paribus, if I studied Econ by myself and could prove I had greater mastery of it than, say, an Econ major at Harvard, guess who’s gonna get picked as a first-year analyst at Goldman. The college dillemma is a lot more than financials. It’s a psychological problem that ties into the greater American psychological problem of clinging on to the past even when the past becomes too inefficient to work in the present. Unfortunately it always takes a major disaster before people realize that it’s time to let go.</p>
<p>And to add to that mouthful, most of these students will not use anything they “learned” at university. You could say “Well, they learned to learn, so that helped.” But do you really believe there isn’t a more cost-efficient way to “learn to learn”? The issue isn’t that college is too expensive or debts are getting higher. The main root of the problem is we have people that don’t need to go to college who feel the obligation to go to college. Once we take care of these problems, set up more trade schools (Hey, apprenticeships are still a thing in Germany!) and do more to give those who don’t need to go ti university the training for the crafts they wish to pursue then the whole debt and tuition problem will stabilize itself.</p>
<p>BC, no my questions were not answered in the other thread, that link you keep giving is very pretty, but doesnt say what loans it is talking about.</p>
<p>Financial analysts are beginning to discuss this issue on channels like CNBC, and there is a real belief that the undischargability of student loans is probably going to end up being repealed.</p>
<p>Then we will see if this is a problem for all of us. I suspect, as I have for several years, that debting up our kids is going to cost us quite a bit, long term, and, now, perhaps, short term, as well.</p>
<p>We are already leaving them unbelievable amounts of government debt to pay off, not to mention the fact that there are more in the echo boom than in the baby boom. Baby boomers have grown accustomed to controlling the agenda, but this next generation can over-ride them. And will.</p>
<p>Poetgirl, I wasn’t aware of anyone beleiving that the non-dischargeability of student loans will be repealed. Financial institutions and the for-profit schools have and will lobby. If it is not changed, all of us will likely pay for the ultimate bailout.</p>
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<p>BC was $3,500 back in 1979 so I imagine that in-state U was a lot cheaper. I take it that the amount that you borrowed was much smaller than $30,000.</p>
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<p>The links later in the thread (and one of my later posts in the thread) says that the data that the Fed used was from Equifax and includes federal and private loans.</p>
<p>I disagree with the student loan bailout. Ultimately, some group in society will have to pay for the reckless decisions made by others. Taking out loans to pay for a liberal arts degree at an expensive private college, when you could attend a state university, is a reckless decision. Many young people aren’t thinking ahead to the future, when they will have to repay those loans. I do think liberal arts studies have value, but there is no need to major in one. If someone enjoys literature or art history, they could minor in those subjects, rather than majoring in them. Please don’t anyone think I’m slamming liberal arts, but I’ve seen firsthand that these degree programs create poverty. I know many people with degrees in religion, sociology, medieval history, anthropology and English, respectively. And they are either on welfare, food stamps or living at home with their parents - and these people are in their late 30s and early 40s. The one woman who majored in world religions has never had a steady job in her life, even though she is intelligent. She goes to the local food bank to get food. Her degree is like the equivalent of a high school diploma or less. </p>
<p>Colleges were traditionally only for children of wealthy parents. It was never meant for the middle classes at all. I hate to say that but its true. As a middle class person myself, I plan to continue my education at the cheapest state university I can find.</p>
<p>[Senior</a> citizens continue to bear burden of student loans - The Washington Post](<a href=“http://www.washingtonpost.com/business/economy/senior-citizens-continue-to-bear-burden-of-student-loans/2012/04/01/gIQAs47lpS_story.html?wprss=]Senior”>http://www.washingtonpost.com/business/economy/senior-citizens-continue-to-bear-burden-of-student-loans/2012/04/01/gIQAs47lpS_story.html?wprss=)</p>
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<p>Yup, and future administrations will write-down education debt. It WILL happen, almost by design.</p>
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<p>Except that there were plenty of “experts” that said the borrowings would affect the economy. It was just the free-lunch crowd that believed otherwise.</p>
<p>I’m sorry but student loans should NOT be dischargable. It is a far different debt then say unexpected medical bills. You chose to go to college, you don’t choose to have cancer.</p>
<p>I still think that the student loan crisis is more of an exaggeration because you really only hear about the art history majors with $200,000 of loans. You don’t hear about the average Joe with $26,000 but making $50,000 right out of college and paying off those loans in 5 years or less, which is more the norm than Sally Art History.</p>
<p>I think that it’s an exaggeration too but there are about 10% out there that made mistakes or ran into bad luck and are unlikely to ever get out of debt. I would like to see debt forgiveness after some period of time - the determination of that period of time can be worked out by others. Or it could be phased out.</p>
<p>That would result in lenders being more careful in lending money and maybe them not lending $200,000 to art history majors.</p>
<p>Edit: > You chose to go to college, you don’t choose to have cancer.</p>
<p>You see the 60 Minutes piece on sugar causing cancer?</p>
<p>@jym626</p>
<p>It depends. For finance, if someone got into a prestigious undergrad business school that is a target like Wharton, Stern (me), Sloan, McDonough, Haas, Ross, or McIntire, I consider a B.S. in finance a wise investment because if you are able to land a front office position at a BB (Goldman Sachs) or top boutique (Lazard), you are pretty much looking at six figures (after bonuses) right out of college as an analyst. And even though you are looking at around a $55,000-$75,000 starting salary, the same applies for engineering at universities such as MIT, Caltech, Stanford, Berkeley, Cornell, et cetera as well as computer science at an institute like Carnegie Mellon.</p>
<p>However, if one opted to go the medical school or the law school route, I would take the best deal I could get whether it be in-state tuition at StateU or a generous financial aid package at a private school because, as to my knowledge, law schools and med schools look more at your GPA and test scores. I find it a good investment to shell out $100,000+ for a law degree or a medical degree from top graduate universities such as Harvard, Yale, Princeton, UChicago, Stanford, NYU, Columbia, Johns Hopkins, Duke, etc.</p>
<p>Now, I would never go into that much debt for a degree in something like art history or sociology no matter what school I got accepted to because I think it is just crazy to do so as you will virtually spend the rest of your life struggling to pay back your student loans.</p>
<p>Bluebayou–IF there is going to be a partial write-down of mortgages, or Federal educational debt eventually for that matter, is it right to only favor those who are in the worst shape? Those are the ones who speculated, who over-extended, who didn’t read the fine print–who screwed up for lack of a better term. Not all of them, mind you, but a fair percentage fall under the financially heedless category.</p>
<p>Most of us here have fought the good fight. We have mortgages, investments, loans, we played it by the book. A partial write-down of our mortgage or PLUS loan would come in mighty handy for retirement. And I think our group is going to get nothing.</p>
<p>jnm123–I agree, I think those that are current on loans, etc. aren’t going to see any real help but in my opinion, that is where the help should come. If you can free up $500-1000/month for those that are current, they will spend the money on “stuff”, stimulating the economy vs those that are behind most likely spending those newly freed up dollars to pay other bills, doing nothing for the economy really. Also, it would be nice, just once, to get some kind of a reward for doing the right thing vs seeing all of the help for those that maybe didn’t make the best choices. I think it sends the wrong message–"took too much in loans for your unproductive major, oh well, here is your money anyway’.</p>
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<p>The reward is financial peace of mind that you can meet your obligations.</p>
<p>The future benefit is that your loan officer can tell you that he won’t approve a $50K loan (per year) for Art History at third-tier OOS public.</p>
<p>BCEagle91–I know that but again, it comes down to what is going to stimulate the economy more, putting the freed up money into bills for things already bought or increasing the disposable income for others who will buy new things, invest money, etc.?</p>
<p>“I don’t think it’s a bubble,” said Mark Kantrowitz, publisher of Finaid.org, a financial aid website. “Most students who graduate college are able to repay their loans.”</p>
<p>And most people who had mortgages were also able to repay theirs. It’s not like everyone defaulted; it was just that a large enough number did in a way that changed the market.</p>
<p>Other than that, this article doesn’t give one single reason why we are not in a student loan crisis. Saying that it’s a “positive investment” is the same as all of those people in the 1990s who sold subprime mortgages by telling people they were making a “positive investment” because housing prices would always rise. Sure, of course it’s a good investment in that you’ll make a bigger salary - but that doesn’t matter if you can’t afford to pay for what got you the larger salary. Or if you can’t get a job period.</p>
<p>I think that a lot of the student loan debt out there to older folks and those that are way underwater isn’t collectable and will probably get written off eventually. There isn’t a lot that you can do about that and some kind of forgiveness may result in lenders being more prudent so that less is written off in the future. In this case, there is no freed up money.</p>
<p>From my observations, the things that stimulate the economy the most are asset bubbles. The two usual culprits are the housing and stock markets though we can see that there are some other classes that can help things along quite well. Your proposal involves writing off loans that are current. I can’t understand why a lender would do that. The purpose of a private lender is to make a profit. The purpose of a public lender is to increase opportunities for education. I don’t think that either have, as their main goals, to stimulate the economy.</p>
<p>The Central Bank and our government may have those goals in mind but I think that we’ve seen that the private actors want profits in order to take writedowns or renegotiate loan deals. Somebody has to lose in those spaces and nobody wants to be the loser. That’s why it has been so hard in coming up with a writedown deal that works.</p>