<p>This long article about our student debt and tuition crisis is a great read: <a href="http://m.rollingstone.com/?redirurl=/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815%5B/url%5D">http://m.rollingstone.com/?redirurl=/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815</a></p>
<p>(Apologies if this is a duplicate thread but I couldn't find another one.)</p>
<p>I agree with most of what this story says. The problem is that you can’t convince those who want the loans. Just peruse these threads, and you see those begging for loans, any loans. These days, an 18, 19 year old, really any full time student without a work/credit history cannot get a loan on his/her own, and they are on their knees begging for them. They don’t care about any future consequences, stories of what happened to others, nothing except they want that loan. Worst than a crack addict. And parents wanting the give them the loans looking for famly cosigners when they are too busted to get them. So the demand is there and there are too many beneficiaries out there to make it a majority to be squeezed. The group of those decrying these loans, including those who can’t repay them are in the minority…still. That may change, but until it does, not gonna happen.</p>
<p>With mortgages, homeowners just bailed and left the lenders with the houses and little recourse and a lot of trouble. Not so with student loans. You can go after the student and in many cases the parents or cosigners till death do us all part. Squeeze them in terms of jobs credit reports, etc. and they can.never get free.</p>
<p>This has to be a first - linking CC to Rolling Stone…</p>
<p>^I think it is biased. The students have to go through Loan Counseling before they can borrow any money from Federal Direct Loans. That’s enough warnings there.</p>
<p>Excellent article - thanks for the link!</p>
<p>The article is biased. For instance from the wording: “He asked for a raise, didn’t get it, lost his job…” you would think Collinge was fired. In reality he quit in a snit when he didn’t get a raise. <a href=“That Student Loan, So Hard to Shake - The New York Times”>That Student Loan, So Hard to Shake - The New York Times; </p>
<p>Some things stated in the article I doubt very much: “Only a small minority of those who’ve been to college have been told very simple things, like what their interest rate was”</p>
<p>And the fact that apparently our HS graduates are unable to make decisions on their own" “she is likely to tell you a story about how a single moment in a financial-aid office at the age of 18 or 19 – an age when most people can barely do a load of laundry without help”</p>
<p>
Ah, yes. of course, loan counseling. Reciting some info to a 17 or 18 year old kid whose frontal lobes are still not fully developed (that’s the part of the brain responsible for PLANNING, and it doesn’t reach full development until well into the twenties), who is excited beyond all reason to be able to attend college, who has been told endlessly that attending the best college he can is the key to a successful future, who is distracted by the Bed Bath & Beyond sale flyer with great discounts on XL sheets. </p>
<p>Matt Taibbi is terrific–he writes in the tradition of the great muckrakers. And there was plenty of mud to rake on this topic.</p>
<p>I had heard some horror stories a few years ago about for-profit colleges that directed students into private loans with 20% interest rates, and the students said they had no idea what they would be paying. However, for federal loans, there definitely is disclosure.</p>
<p>I just heard a story about a freshman who was ready to start at a public university that offers little financial aid, and the family had planned on using PLUS loans, and at the last minute they found out their credit was too bad for PLUS loans. Yes, I know they should have planned ahead, and applied sooner, and should have avoided the need for PLUS loans, but it is still unfortunate. They also have another kid in college. She was so happy to get accepted at this selective university, and now she may not be able to go.</p>
<p>If you are turned down for PLUS loans, you can get some additional unsubsidized Staffords, but there still is a gap for them.</p>
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</p>
<p>;)</p>
<p>Well, there was a Grateful Dead thread here several months ago …</p>
<p>Rolling Stone has had some serious investigative journalism in recent years.</p>
<p>(I let my subscription expire many years ago when I no longer knew any of the bands they were writing about).</p>
<p>Some things stated in the article I doubt very much: “Only a small minority of those who’ve been to college have been told very simple things, like what their interest rate was”</p>
<hr>
<p>Being told something and paying attention to it are two very different things. I am amazed at how people will ignore everything they need to do and read and sign in order to get their loans, but will later insist “you never told me.” I swear, I put things in front of students over and over, in multiple ways for their multiple intelligences …and I still get blank stares or “how was I supposed to knows.”</p>
<p>
The article states that the interest rate is not the problem. The problem is the government encourages students to borrow a lot of money to attend schools and get useless degrees that lead nowhere.</p>
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</p>
<p>You’re missing the point, 4kidsdad. The problem, according to the article, is that burdensome loans, with virtually no escape hatch, are being given to teenagers who are clueless about what they’re getting themselves into. The borrowers’ ignorance regarding interest rates is but one example of their ignorance regarding the entire process.</p>
<p>They’re kids, they have zero financial acumen, and by the time they realize what they’ve gotten themselves into, it’s too late.</p>
<p>Really, don’t just ask these kids if they know how to do their own laundry - ask them what it’s going to cost them every week. I know one kid who’ll be attending a very prestigious and highly selective university this fall (he’s a smart kid, okay?), and when his parents asked him how much spending money he thought he’d need, his answer was $200/week! It’s not that he’s greedy . . . he just has NO CLUE about money!</p>
<p>
Makes you wonder about “college readiness” in the K-12 context, doesn’t it? :rolleyes:</p>
<p>
What is the solution? Let the parents, not the students, be the borrower for college education?</p>
<p>
If $45,000 loans are too much, what is the ‘not-too-burdensome’ debt?</p>
<p>I think the $27,00 debt would be ok; however, many people may find that amount of loans still too much.</p>
<p>For most students, taking out the allowed $19,000 of federally subsidized Stafford loans over 4 years is not a severe burden to pay off, assuming you are not a drama or dead languages major, and assuming you actually graduate in 4 years with some marketable skills. </p>
<p>However, the cost of the payments rapidly rise once you start adding non-subsidized Stafford loans, which allow interest to accrue while you are in college. If you add on Parent PLUS loans, you also raise the interest rate and add much higher initial fees. If you add in private loans, you have much higher costs. As a result, $30,000 of total college debt might cost twice as much as $19,000 of debt that only involves federally subsidized loans.</p>
<p>Some students will take get the $5K a year, the max in Perkins as well as the max Direct loans, with a bump up from parents being decilined the Parent PLUS. In cases like that, you are talking about $80K in debt just in those types of loans when you take into account the interest cranking up. </p>
<p>Drama and Dead Language majors are not the only topics of study that do not generate a living wage job right out of school. When my son graduated from a large state u, the pages for the 3 Ps, Philosophy, Psychology, Political Science combined were more than for all of the other majors combined. Business majors, education majors also can have trouble finding jobs that pay much. It’s been very tight these last several years in terms of finding a job right out of school, unless you are one of the top students in your class (and that even won’t always do it), have a marketable skill, major in a directed career area, have some connections and contacts or are intrepid. </p>
<p>If you can’t make enough to live on your own, and your parents don’t live in an area where there are many jobs, it’s really a tough situation. I’ve brought up the situation my friend and her DD are in a few times. They live in an area where Wal Mart, fast food, pizza deliviery shifts and hours are fought over by adults trying to make a go of it. The young lady majored in Philosophy and racked up quite a bill doing so, enjoying every aspect of university life and what was offered. She and her parents couldn’t even come up with a down payment for her to take a room in the university area for her to live and find work, and coming home meant coming to a depressed area with no public transportation and no extra car in the family with everyone hardpressed already to get where they need to go. And the loans were growing by the instant. At this point, I don’t have any answers for either of them as they are barely getting by even without paying the loans back. And yet, there is another kid in the famiies seeking cosigners for loans for himself. It’s the only way out of the area for him as he does not want to join the military. Borrow ones way through school with some part time work, and get out of a decripit home town. But at what price?</p>