man commits suicide - burdened by student loans

Paying for College
21

<p>Where is the personal accountability? I’m sorry he killed himself of course, and in my mind it was completely unnecessary. However, I cannot help but wonder why he took the loans out for the degree if he was not sure of the job market when he got out of school. He should have gone to nursing school instead of getting a masters in chemistry; if he had done that, the loans wouldn’t have been an issue. </p>

<p>Where was the psychiatric intervention though? This guy needed to see a doctor to help him with his depression, maybe then he would’ve had a better shot at landing a job. </p>

<p>If anything I blame the people around him for not getting him medical treatment.</p>

22

<p>Something doesn’t add up - ISU is not an expensive school, and it appears that Jason Yoder’s family lived nearby. According to news reports, he attended ISU for both graduate and undergraduate degrees, getting his MA in Chemistry in 2006. I found the tuition rates from 2000, when undergrad tuition was $4,336 a semester for 9 or more credits. He would have been paying between 8000-9000 a year for undergraduate tuition in the late 90’s or early 00’s.</p>

<p>It just does not add to $100,000, unless he spent over 10 years getting his degrees. I might add that a candidate with a masters degree in chem could walk into a decent paying teaching job somewhere in Illinois, although not necessarily in the Bloomington-Normal area. To me, it appears that other factors played the major role in his death.</p>

23

<p>there was a similar story in teh newspaper this morning of a man at NYU who commited suicide but this time it was because his girlfriend dumped him</p>

24

<p>A couple of notes…</p>

<p>It is not hard to get to 100K if you have the wrong type of loans. If he had Plus loans, the interest starts accumulating immediately, so he may not have taken out 100K in loans, but by the time he finished his education and a couple of years trying to land suitable employment the money quickly added up.</p>

<p>I think many people have missed the moral hazard in the student loan arena. Student loans are almost impossible to have wiped away in bankruptcy, so they are considered the among the most secure that a bank can make (if only the interest rates reflected that!). </p>

<p>So bank officers perceive no risk in loaning out huge amounts of money without collateral on students with no significant credit history, many of whom lack a financial plan for repaying (through improved earnings as a result of the degree). </p>

<p>It is great when student can finally pay off their loans, but for a growing number of people, the payments on the student loans (which are bigger than ever) become a burden that far outweighs the earning benefits from the degree (not to mention the years of income lost obtaining the degree).</p>

<p>Now if student loans could be treated like other unsecured debt in bankruptcy, I’d bet there would be lots of differences. First, the interest rate would be higher to reflect the true risk of the student involved. This by itself would make most people pause before signing the dotted line because the interest rate would look more like credit card interest rates. </p>

<p>With the cost being that much higher, the default rate would grow even more through a positive feedback loop (higher interest rates cause more defaults requiring still higher interest rates).</p>

<p>Banks would then start looking at the business case for that loan. Want to go to law school? Criminal or Corporate? If corporate, we’ll lend you the $120K you need because the extra $40K per year you earn will allow you to pay it back in 10 years. If criminal, well, we’ll consider about $40K because public defenders don’t earn much and we don’t want you to default. Can’t afford to study criminal law? Not our problem!</p>

<p>I think you can see where this is going. There will be incredible pressure to make very economic decisions about grad school (if not undergrad as well) which will (very) negatively affect the demand for certain degrees. Either the universities will have to reprice (lower) those degrees the banks won’t finance or discontinue them from lack of paying students. </p>

<p>Kind of Darwinian, but when the lack of criminal lawyers caused by this “market adjustment” becomes critical, consumers needing that services will raise the salaries (through higher fees) of criminal lawyers enough for the banks to loan money for that education. </p>

<p>It will work out, but it will be ugly! As ugly as this tortured soul from Illinois? I wouldn’t care to venture a guess.</p>

<p>My point is that the laws intended to make lending for college degrees possible have created a market where irrational actions (taking on too much debt) are allowed to happen - a moral hazard.</p>

<p>I’m sure there are lots of other ways to fix the affordability of college degrees, but nobody seems to want to cough up the money to do it. Instead those in charge (lots of parties here) let the gullible students dig themselves in way over their head and then start throwing dirt on them when they can’t dig themselves out of a hole (through bankruptcy).</p>

25

<p>The problem with student loans is that if you don’t pay and the loans to into collection you have to pay collection costs and those can add up really fast. Recent legislation that Pres. Bush has not yet signed will cut them (at least for the federal loans). This will help a bit, but the bigger issue is that some students are borrowing too much.</p>

26

<p>Colleges are already putting a premium on well-paying majors – that doesn’t even count the lenders. There was a piece, I believe on NPR, within the past two weeks, that discussed how more and more colleges are charging extra tuition/fees for certain majors (engineering, business come to mind). Are they recouping the costs of expanding popular programs or exploiting students who are trying to get into lucrative careers? What happens to the other majors and programs that provide valuable contributions to our society, though they may be neither lucrative nor popular?</p>

27

<p>All I can say is that my husband had no father, a mother who didn’t even drive let alone work, and he had to go to a local state school. He got a job, paying very little, worked hard, saved and turned himself into a successful buisness man. Of course this boy had problems, of course the loan companies will max you out…but growing up is about making choices and then having to live and grow from our mistakes. If they wouldn’t have given him the loans then everyone would be screaming that agencies only give loans to people who don’t need them. Educate the kids when they are young, let them know how fast debt adds up- and to think and act fiscally responsibly. I have a rather wealthy friend whose son went to Yale, he wanted to go to Grad school, they told him to go work for a year and save and then they would consider how they would help him. Sometimes parents need to bite the bullet and say no, or give the tough love guidance we are so afraid to give!</p>

28

<p>I’m also curious as to what he was doing between the ages of 21 and 35. That’s a long stretch to have interest accumulating on loans. Sounds like a combination of easy access to bad loans and substantial mismanagement was at play here. If true, there’s plenty of blame to go around to all parties.</p>

29

<p>I dont know why you guys keep blaming his “lack of” “responsibilities”.** Did you guys not read the article?** It claimed that he sent a lot of resumes and people did not want to hire someone with bad credit.</p>

30

<p>^ Naw, I just read the summary. Credit scores are important and becoming more so these days.</p>

31

<p>I read the article. God that’s sad.</p>

32

<p>tragic, but I doubt the loans were his only problem.</p>

33

<p>I may have missed it, but why can a person with poor credit not be hired easily? It seems that such a person would be a reliable employee since he really needs the money.</p>

<p>It doesn’t really say what Jason was doing in the time between ages 21 and 35. Was he employed? Was he being treated for depression? He certainly couldn’t have been working on his masters degree for 14 years. A note for student graduates: if you send out dozens of resumes without a single bite, you need to repackage yourself and possible be willing to look at other jobs and locations. </p>

<p>Also, I noticed from the article that two pharmaceutical companies were interested in him at the time of his death. It is so important to follow up on applications and resumes persistantly with phone calls, each and every one. And sometimes multiple times.</p>

34

<p>

</p>

<p>Two areas that would definitely give a person a problem getting hired with poor credit would be any job requiring a high level security clearance and any financial jobs with access to significant money. Probably not where he was applying, but beyond that, large employers find that people with poor credit often turn up to be employees with other problems (substance abuse, family problems, etc.) that could roll over into the job. Unfortunately, it is more expedient for the HR department to filter them out rather than find out why their credit score is so lousy.</p>

35

<p>My son applied for a job as a teller at a bank and they ran his credit rating. Seems reasonable, but something kids need to know. They can, and will, do a background check, a drug test, and a DMV check. And not just jobs at banks. A sprinkler company a friend’s son applied to the summer before college ran a DMV check. He was hired but his friend was not because of the points on his license.</p>

36

<p>bdmrad said–
tragic, but I doubt the loans were his only problem.</p>

<p>The student’s mom said–
Jason is dead…<of the=“” loan=“” company=“”>… "You are part of the reason he took his own life.‘’</of></p>

<p>This thread is related to that other cc thread about the student who ‘does not want to pay back her loans’ after choosing a fancy LAC and majoring in anthro, I believe. It has brought out similar responses: the people who indict the system, people who blame the student, and people who blame the parents.</p>

<p>One thing that is different is that in this case, the parents did not step in and bail the student out (probably did not have the means). For all those who advise a ‘tough love’ approach to these kinds of things, please see a distinct end state of that approach. The stakes are high. Even for a state school, ISU’s <em>avg</em> indebtedness is $17k, I believe. This person probably did not have have as much means as the <em>avg</em>, so carried a higher debt.</p>

<p>In the end, realistic self knowledge, especially of financial means to pay for college, BEFORE the ball starts rolling and gets out of control, is especially indicated. </p>

<p>----But such calm rational analysis is very difficult: there is a hyper competitive job market staring at a student, costs of the response to that hyper competition - higher education - going WAY above inflation, AND without a proper, proportionate support by that which has a compelling interest to educate the most people that can be educated, the State.</p>

37

<p>Thanks goaliedad! My naivety is showing. :o</p>

38

<p>It said that he was hired between 21 and 35, the only problem was that he didnt want a job in his profession because the collectors would want to take all his paycheck away, or something like that; so basically, he was earning very little.</p>

39

<p>lfk,</p>

<p>Not a problem. BTW, I hear that in some states they use credit checks as part of getting auto insurance. I guess the actuaries have decided that people with bad credit histories are also bad drivers. Oi!</p>

40

<p>The Federal loans can only be garnished up to 15% of disposable pay.</p>

<p>I’m not sure what the private loans would garnish.</p>