man commits suicide - burdened by student loans

northeastmom · September 27, 2007, 9:01am

I think that some posters are making judgements without having all of the information about this man’s life. He seems to come from a very poor family.

I agree with the poster who stated that these loans are going in the same direction as the mortgage industry. The difference is that with student loans there is no way out. I also agree that even a 35 y/o chem. major might be clueless about finances (esp. if he never had money). He might have had unrealistic expectations of earning power after he received his masters.

lfk good point. Loans are not aid.

I happen to be one who thinks that public colleges need to be more affordable for the poor and middle class. Earning one’s way through college was easier IMO 30+ years ago than it is today. Income has not kept up with rising tuition costs. I know that this is not a popular opinion on this board, but it is mine. I also happen to agree with many of mojojo’s posts.

tokenadult · September 27, 2007, 11:03am

This thread illustrates, among other things, that the dichotomy between low-list-price “public” (= government operated and taxpayer-subsidized) colleges and “private” (= privately operated and also taxpayer-subsidized) colleges is a false dichotomy. The unfortunate man who killed himself attended a public college with a low list price, but still managed to rack up huge debts (how?). For some applicants, and for ANY genuinely poor applicant, it’s probably safer to gain admission to a college with a higher list price but phenomenal financial aid, and end up coming out of college with less debt.

It’s always sad when someone feels such desperation that suicide appears to be the only way out. There are hundreds of thousands (perhaps millions) of Americans who suffer from debilitating bouts of depression. But research shows that most of the best treatments for keeping depression from turning into suicide are cognitive, involving the patient taking responsibility for his own thoughts and deeds. When I read in the original article

I see someone who was not fixing his problem, but making it worse.

I really appreciate goaliedad’s comments in this thread about the policy issues behind student load regulations. The push to make student loans available even to students who haven’t achieved well in free K-12 schooling, and to make sure lots of lenders participate in that market, means that some loans that would never be made in the first place in a more balanced market will be made. Each borrower has to look at the situation realistically before signing the loan agreements, which always include a promise to repay the loan.

joecollegedad · September 27, 2007, 11:55am

northeastmom said–
lfk good point. Loans are not aid.

YES!

It irritates me that loans are folded into the ‘final price’ and included in the financial aid package - the familiar assortment of grants, scholarships, work study, and LOANS. Since a loan has to be paid back, you never really ‘have it’ in the first place. It creates illusions and delusions and can cause problems of all sorts, more problems than are solved.

By including loans in the financial aid package at the time of application to (of buying) the college, it APPEARS to make the NET PRICE (vs sticker), or the ‘final price’, to go down. It appears to make something in reach which is probably out of reach and not purchasable.

This is a HUGE point in the process that misdirects people. Me included. Jason Yoder, too.

somebody is gaining in this process, too. We should ask,

‘Who is gaining?’

The colleges? --which can continue jacking up the costs far above what most everyone else can afford at a rate higher than the rate of earnings, therefore higher than the rate of savings, due to the student demand AND the fictitious availability of money?

The money lenders? --who must gain significantly on the considerable interest of the transactions? The magnitudue and volume of the money involved here, even state schools, are like a house PER KID. These are not trivial numbers for most people, or for anyone not in the upper crust.

So the college price numbers are like house numbers, but there is no corresponding security for the loans. It is anomalous. It is an accident waiting to happen.

tokenadult · September 27, 2007, 12:04pm

Yes, it is correct that many people make this mistake when comparing “financial aid” offers. See

<a href=“http://www.economics.harvard.edu/faculty/hoxby/papers/aidpaper.pdf[/url]”>http://www.economics.harvard.edu/faculty/hoxby/papers/aidpaper.pdf</a>

for a detailed discussion of the mistakes many families make when deciding which offer of financial aid is best.

07DAD · September 27, 2007, 12:07pm

tokenadult–AMEN

Less debt is better. Seems easy enough to understand. But, as you point out later, this may not be an option for students who did not do so well in HS.

Thats right. If the policy is to incourage high risk lending, it is the borrower who has to be realistic. And, all loans that are not repaid further increases the cost to the future high risk borrowers who need these loans and do repay them.

But all this does not seem to address what several posters seem to think is essential, “affordable” public college with aid/grants and no repayable loans. I simply do not think that spending the accumulated capital represented by endowments to pay ANY students to attend is prudent management and it puts the long term viability of these institutions at risk, which is terribly “policy.”

That seems to leave taxes as the only other option. However, I agree with you, the public has provided enough in free K-12.

BTW–I looked at every college’s statment sent to my S concerning the cost to my S to attend that school. EVERY ONE of these documents clearly listed scholarship as scholarships and loans as loans. No “deception” there. As you point out, when families don’t take care in understanding what they are doing it is theor mistake. Unless you do away with loans, they are going to have to be listed some way.

joecollegedad · September 27, 2007, 12:24pm

07DAD said–
I looked at every college’s statment sent to my S concerning the cost to my S to attend that school.

But I bet there is a ‘bottom line’ price, or cost, on those documents. Inasmuch as that bottom line cost includes loans ABOVE IT, it is misleading. To the extent that colleges are using loans to develop the final cost, even if they are labeled ‘loans’, it is misleading - to me, at least.

northeastmom · September 27, 2007, 12:26pm

joecollegedad, well said.

As far as public schools instate undergradutate costs vary widely. COA at Rutgers-NB is 20,400+, at University of Nebraska it is 12,500, and at University of Florida it looks like it is around 10,500. These figures are for instate students who reside on campus.

somemom · September 27, 2007, 12:37pm

A couple of things have been running through my mind after reading this article:

Loans are not aid, loans are loans. When my Ds compared packages, we made a spreadsheet with tuition and fees plus room & board. Then we subtracted any aid that did not have to be paid back. Any of the rest of the COA was in the second section- where I plugged in my estimate for books and for actual travel to that school. Loans are not really aid.

The bigger thing that I see in this article, esp. in light of some of the threads here recently about the girl who did not want to pay off her loans and the ADHD guy who may or may not be taking college seriously in year two of a private with $32k in loans and is on academic probation.

These are recent examples of people here who have kids with some sort of coping issues (ADD/ADHD/LD/Depression/other mental disorders) We all have a family member who just does not seem to cope well with real life and we have read threads on that topic, too, so many here have adult relatives who are non-functional.

I think that when you are raising a kid who may seem to have some coping issues, the thought that your child can complete college seems to a “fix.” You do not know how to teach your bright child how to cope with life and it seems so normal to hope that if they do the “normal” thing, attend and complete college, perhaps they will learn more about coping with life and will graduate ready to be independent.

As our poster whose D may not be capable of getting & keeping a job and paying back student loans has learned, coping with college may not equal coping with life. I think a bright kid can learn to cope with college- it is generally not 8-5 work, nor even 8-8 work! You are relatively alone, even in the big group; whereas working at a large company you need to get along with the group of coworkers and bosses, in college you can survive as a loner.

I have a family member, mid 30s who strikes me as very similar to the man who was the subject of this story, but with no loans. He is living with his mom and is way underemployed, he is brilliant, but, I think, depressive and does not have the best social skills. His mom is also brilliant, under-employed and actually dependent on other for her current living situation. If there were student loans in the mix neither of these people could cope with that!

A depressive or non-coping person can stay in the safety of academia for just so long, then real life must be faced. In reading about this case, I wonder if he is some one who was depressed and untreated as he functioned, but the depression may have caused the delay in finishing the degree and the student loans may have escalated if he used them to pay for living expenses.

In the case of young people I know now who are taking student loans, we have always suggested you not take loans for anything beyond tuition, earn your living expenses as you go. If this young man had only taken tuition amounts as a loan, given that he was at a public school, they likely would not have been any where near $100k total.

07DAD · September 27, 2007, 1:05pm

The statements I saw were as follows:

Tuition-$XX,XXX
Room- $X,XXX
Meal Plan -$X,XXX

“Name” Scholarship-$XX,XXX
“Name” Scholarship-$XX,XXX
“Gov. Name” Loan-$X,XXX

The statement did the math and listed a “net” sum (i.e., the total of the charges by the college, less the total of the money from third party sourses) that had to be paid by the student to the college for the semester/year.

Isn’t that what all of you experienced? How is that deceptive?

lkf725 · September 27, 2007, 1:46pm

I don’t think it is deceptive to a logical person. But I believe it is trying to sell a bill of goods to people with dreams who don’t really want to see the truth. A loan is debt, no mater how you package it…it is not financial “aid”. You can’t make a silk purse out of a sow’s ear.

07DAD · September 27, 2007, 2:51pm

I decided to spend some time and check this out.

A student cannot get a federal student loan without completing pre-loan counseling where every nuiance of the loan and repayment and the consequences of non-payment are explained.

I checked random state universities’ websites and they appear to all have links to Private Loan Comparison Charts that set out the range of interest rates (yes, up to prime +6%). These sites also warn the student not to take out these loans unless and until they exhaust all federal loan possibilties.

I then looked at the website information at my S’s private college. The site warns that all federal loans should be exhausted before recourse to Private loans. The site gives excrutiating details of the options and obligations concerning the different loan programs.

Folks-- you would have to be intentionally trying NOT to understand that loans are loans and have to be paid back.

As several posters either out-right state or imply, the desire or dream of attending college, not the lack of disclosure or candor by the school is what can result in taking out loans that you cannot pay back.

It is stunning that some suggest that the use of “aid” on a statment means that they have been tricked into taking out these loans thinking that they don’t have to pay the money back. It maybe a dream, but only as in “dream on.”

UCBChemEGrad · September 27, 2007, 2:52pm

Mojo: No, he shouldn’t. Just because his views don’t mesh with yours doesn’t mean he should stop posting.

UCBChemEGrad · September 27, 2007, 3:03pm

It is true that there is required pre-loan counseling and a post graduate meeting for government student loans.

However, the pre-loan counseling is only required when you first take out your initial loan…if you take out subsequent loans, there is no additional counseling.

Private loans are very easy to obtain. All you have to do is click on the banner ad at this website and “get up to $40,000 per year!”.

joecollegedad · September 27, 2007, 3:17pm

I am in the search part of the process now. I have not actually seen a real FA pkg yet. Another way of saying ‘the search part’ is – the ‘selling part’. The colleges are trying to sell themselves to us and we are trying to sell ourselves (my daughter, at least; that does not sound that good). So at this point we are at the higher level, but it is also when impressions are formed, discovery is done, and universes are made.

Again and again I have been advised by the colleges, by counselors, by guide books, and by others to ignore ‘the sticker price’; after Financial Aid is applied, it will be a different story,they say. However, the misleading or confusing thing is that loans are included in financial aid; not only are they included, they include a goodly portion of the FA - and that is a long, long way to run!

For my list of potential colleges, copied below fyi, I have tracked avg indebtedness of grads from the given college in 2006. Incidently, when I start this search, 2005 data were only availble. So I refreshed the data for 2006. For the colleges on our radar, there was a range of 5 to a whopping 25 pct increase in avg indebtiness from 2005 to 2006. wow.

I sorted the state schools first in the list below. Note that very big avg indebtiness for the state school. Just think what those kids will be looking at in 4 years assuming the 5 to 25 pct increase yearly.

You’re looking at Jason Yoder.

univ il - urbana,IL 15,413 s
western illinois 16,400 s
truman state, kirksville,MO 16,656 s
eastern illinois 16,890 s
illinois state,IL 17,015 s
univ iowa,IA 20,234 s
winona state, MN 20,889 s
indiana u,IN 21,251 s
university of michigan,MI 23,533 s
bradley university, peoria IL 15,079 
earlham college, richmond, IN 15,088 
millikin university, decatur IL 17,100 
augustana,rock Island, IL 17,100 
hiram, OH 17,125 
grinnell,IA 17,975 
Monmouth,IL 18,286 
carroll collge, WI 19,267 
carleton, northfield, MN 19,429 
ripon,WI 19,468 
university of dayton,OH 20,151 
univ wi,WI 20,282 
kenyon college, gambier, OH 20,627 
illinois Wesleyan, normal, IL 21,794 
beloit,WI 22,424 
ohio wesleyan,OH 22,619 
lawrence, appleton,wi 22,626 
knox, galesburg, IL 22,860 
hope college,MI 23,324 
college of wooster,OH 23,527 
st olaf, northfield,MN 23,993 
cornell college, IA 24,622 
st norbert, de pere, wi 24,808 
kalamazoo college,MI 25,000 
valparaiso,IN 25,524 
drake, des moines, IA 26,482 
coe, cedar rapids, IA 26,625 
st mary’s U, MN 28,500 
st ambrose, davenport,IA 30,541

Beloit actually went from 14.7k to 22.4k for a 52% increase.

lkf725 · September 27, 2007, 3:27pm

07DAD,
I don’t know if you were talking about me, but I am agreeing with you. Nobody is entitled to the education of their choice and folks have to make decisions they can live with. I just wanted to add that people see what they want to see (ie, loans = aid) and I do believe that colleges take advantage of that desire or desperation. The only reason they would subtract loans from the total is to make the bottom line less hideous than it really is. If people are too stupid to acknowledge the real bottom line, that is their problem.

northeastmom · September 27, 2007, 3:28pm

joecollege, Absolutely right about annual increases. College will be out of reach for many more families if nothing is done. This does not even take into account private loans, and parent loans that families take out to pay their efc. I am not worried about the student who feels entitled to a private education, but more the student who is trying to go to a public U.

lkf725 · September 27, 2007, 3:29pm

07DAD,
I don’t know if you were talking about me, but I am agreeing with you. Nobody is entitled to the education of their choice and folks have to make decisions they can live with. I just wanted to add that people see what they want to see (ie, loans = aid) and I do believe that colleges take advantage of that desire or desperation. The only reason they would subtract loans from the total is to make the bottom line less hideous than it really is. If people are too stupid to acknowledge the real bottom line, that is their problem.

(we did not even consider loan amounts listed on our financial aid statements, just the total that would ultimately come out of our pocket)

07DAD · September 27, 2007, 3:57pm

lkf725– I got the feeling that you saw the reality and the problem.

joecollegedad–take UCBChemEGrad’s suggestion and look at the banner ad for the astrive student loan

The stats you give indicate a total debt at graduation of $15K-$30K for your D’s target schools. The astrive loan has a monthly payment of between $91.57 and $131.93 after graduation PER $10K borrowed.

Using the $30K debt and increasing it by 25% you get a $37.5K total debt. Using the higher monthly payment amount (which can be avoided by paying $75.77 per month during 48 months of college) that is $494.96 a month after graduation. Using the lower rate, the monthly on $37.5K is $343.37. Obviously, if she goes to the school with the lower after graduation debt ($15K + $3.75K increase) her payments will be approximately $175 to $250 per month.

There is no reason to dispair. With minimum wage going up, in 4 years any 40 hour a week job would service this debt. I hope this helps quantify the reality. One way to minimize the cost of college is to apply at private schools where your D’s “profile” is at the top end of the stats. They can really do anything they want to get the “package” where you need it.

I still suggest that anyone that can do as little borrowing as possible.

joecollegedad · September 27, 2007, 4:01pm

lkf, would that everyone were as smart as you. That’s why they are going to college, I guess. I have to think about that statement.

Continuing the theme of improving communication between college and applicant, in the cost sheet presented to a student, then,

1) the loan amount should NOT be included in the deductions from the sticker side, but

2) the loan should be expanded to include the total amount the student will pay, with interest, and this should be ADDED to the total cost of the college.

compare THAT.

tokenadult · September 27, 2007, 4:11pm

YES! It may be interesting to you, joecollegedad, since you say you are new to the process, to take a look at a site

<a href=“http://www.maguireassoc.com/serving/financial_aid_officers.html[/url]”>http://www.maguireassoc.com/serving/financial_aid_officers.html</a>

by a college management consulting firm in which the firm points out that colleges can use their “financial aid” offers to sell their colleges to prospective students. You want to save money; they want to make money. Sometimes you the parent get better value by paying more out of pocket to get a better education for your child, as the article I cited earlier pointed out,

<a href=“http://www.economics.harvard.edu/faculty/hoxby/papers/aidpaper.pdf[/url]”>http://www.economics.harvard.edu/faculty/hoxby/papers/aidpaper.pdf</a>

but anyway all the colleges that send you letters will be trying to PERSUADE you, and not necessarily making it clear to you what the best value comparison is. Buyer beware.

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man commits suicide - burdened by student loans

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