Likelihood of repayment is one factor considered in approving non-student loans (and but for the lack of dischargeability of student loans, it would be considered there as well). Income will be part of that analysis. Even with secured loans that is true (lenders do not want to resort to collateral – its expensive to do so with often a lot of red tape to get there).
All programs are inherent with waste, fraud and abuse, but no one is raising that issue. (And who is cheating is irrelevant.)
The question is, don’t we as a society have a moral imperative to discourage the poverty student in your hypo from incurring massive debt in the first place? Instead of attending a private sleep-away college by massive debt, why not counsel students to attend their community college first? Why not make it more difficult to obtain a loan to attend a private sleep-away college? Or, borrow $300k to attend say, NYU Law, vs. taking big merit money at a lower tier law school?
Do we really do everyone a solid by making debt so easy to obtain? Is that really good public policy?
Of course, that depends on the availability of low cost accessible community colleges that offer the desired academic programs (including transfer preparation for BA/BS-intending students). Some states do this better than others. Also, for BA/BS-intending students, the affordability of the last two years of (probably state) university is also a dependency.
Some students in rural or remote areas may not have any college in reasonable commuting distance from where they live before college.
I think it’s really important to look for school- or state-specific information when comparing schools so you know what the average debt is per graduate and the percentage of graduates who have debt. For PA (my home state), for instance, it is QUITE eye-opening! (Numbers are from 2017.)
https://www.pennlive.com/news/2017/12/pennsylvania_is_number_one_in.html
And this doesn’t even factor in those who never graduate.
Even the most generous schools - typically those with the largest endowments - have a not-insignificant percentage of students graduating with $20k+ of debt (with a couple of exceptions).
Re: #103
But note that Pennsylvania public (CSHE and PASSHE) universities are well represented among the high student loan debt schools, contributing to Pennsylvania’s high student loan debt levels compared to other states.
I figured someone would raise both points, but so what? It’s not the fed’s job to manage community college tuition rates. If a state doesn’t want to support a low cost way to educate its own citizens, why should another state be forced to do it for them? (The states are supposed to be ‘laboratories of democracy’…)
But what if we redirected all the Pell money that goes to private Unis – does Harvard really need the Pell grant $ to attract low income kids? – and send that to community colleges to help offset the first two years? What about adding a 3rd year to community colleges? Or, (gasp), even a BA? sure, many are currently niche programs, but they obviously can be expanded.
Sure, not a sleep-away college, but then a no frills education comes no/little debt (which a third of students agree was not worth it).
Agreed, @ucbalumnus, and that’s why my son took a big merit package out of state. But it’s really important to know YOUR state’s options so you know if it offers the best value available for your family’s situation.
If I lived in FL or GA, for example, we might have decided our options were affordable and never bothered to chase merit money from OOS publics. But not in PA, not when my son’s stats could get him a big package somewhere in another state. I’m not sure what we would have done if he didn’t have those stats.
I have a different perspective. I feel we are blessed with the quality of our flagship, UIUC. It is very strong in the most popular, in-demand majors…engineering, business and STEM. Where the state is failing us is in the quality of the directionals. I don’t know how many students are graduating high school in Illinois who go on to a 4yr university, but I would guess over 60K per year. UIUC enrolls around 7K per year. The math says a lot of students who want a big campus experience will have to go OOS. We ‘suffer’ from an embarrassment of riches.
Yes, U of I loses a lot of top students. Some want an elite experience. Some want nice weather, a big city, sports or some other factor. Others can’t afford the high in-state tuition. But the point is there are a lot of strong students. I often wonder how many get into their desired major but go elsewhere due to COA…maybe the new Illinois Commitment Program will make a difference.
From my limited western suburb perspective, the biggest obstacle is getting admitted to one’s major. The number of high stat students who want to major in CS, engineering or business is very large. But with over 1500 high schools in Illinois, it is no wonder a lot of graduates pursue their education OOS. The reality is that UIUC had approx. 1600 engineering, ~700 business and ~2400 liberal arts and science freshman last year.
I personally know quite a few disgruntled parents who send their kids OOS, not because they necessarily want to, but because they feel like they have no other choice…a lot are paying more than if they attended U of I. Some have chosen “cheaper” schools, but many of them are also unhappy. The most common scenario I see are the kids find employment closer to their OOS school and the parents are disappointed when they don’t come home. A lot of those kids are also unhappy when they thought they could easily find employment after graduation back in our area.
What will be interesting to see is if the parents move to be closer to their kids or if in a few years the kids move back to be closer to the parents…or perhaps both stay in different locations. Regardless I’m sure it will involve employment opportunities.
As for U of I the trend I see is the growing representation of affluent families choosing UIUC. Like our family, a $125K difference to go to a “more elite” school is not seen as worth it. That’s why I believe we see so many threads on the subject.
It’s difficult to predict the future. We all try to identify trends and plan accordingly. What worked in the past may or may not translate to the future. So yes, a lot of Illinois high school grads are leaving for cheaper alternatives. But I’m also seeing a lot of families who can afford to go full pay to pricey schools, choosing UIUC for the value. I think the result is the middle being squeezed.
Blue- redirecting Pell money may sound great in theory but in practice- you are now subsidizing the less academically prepared at the expense of the most academically prepared. Not sure that’s the kind of public policy you intend.
I sat on the scholarship committee of a small foundation whose objective was “last dollar” scholarships- i…e tote up everything from Pell, state grants, federal loans, aid from the college itself… and we tried to bridge that gap. Some of those stories were so, so sad. Maybe not Harvard- but you’re going to tell a first gen kid who was promoted from bus boy to assistant manager at the local restaurant (where he’s worked every single weekend) who is heading to a top 50 research U that his Pell is going away because even though he’s eligible, it’s smarter to give it to the community college kid who doesn’t have the 4.0 and didn’t score 1500 on his SAT’s and didn’t have the full gamut of AP’s and honors and volunteering?
These are the kids who for lack of a Greyhound bus ticket and a winter coat may not be heading to college. Or the kid who does have the bus ticket and the warm clothing- but he needs new eyeglasses, and his family just realized that his health insurance won’t cover him out of state and they don’t have the $2500 for the college policy first semester. You’re gonna yank the Pell to make SURE that kid doesn’t get to a four year school?
For some kids, community college is the right answer. For many reasons- finances being in the top three, but academic prep and location are also important. For some kids- maybe the Val, who happens to be poor enough for Pell, but ambitious enough to be walking into college with a string of 5’s on his AP’s… you want that kid in Community College? What happens when he’s already taken the hardest math or chem class that the CC provides- you’re going to tell him to become a radiology tech (one of the most popular majors at my local CC) instead of an actual radiologist?
@88jm19 I will agree that IL doesn’t have a solid second choice(from flagship) school like some other states do. And in some states this other school is as good or better than the flagship. PA has Pitt. OH has Miami. Iowa has Iowa St. You would think a state with such a large population it would have a better choice or choices.
You are describing a numbers game. Between the international kids and the kids from families that are full pay(but don’t want the $50-70K pricetage) the middle like you said is getting squeezed. Plus it is a good school for many majors. At the end of the day my D19 found a school that will meet her academic needs and probably would have been $7-11K cheaper than UIUC. Also she was never interested in it at all.
One good thing about my situation is I won’t worry about the kids finding employment close to home, because I am leaving IL pretty quickly after the last kid is done with college.
Overall I just wish there were better in state choices in IL. We have some good privates but those are pricey unless you win one of the 15 full tuition scholarships.(i.e. Lottery)
You and me both @gpo613! Actually after high school for me (I think small chance S21 stays instate)
I agree with this with the exception of ISU for education majors and NIU for business majors, especially accounting.
…and I thought it was because Illinois is broke even though they have very high tax rates. Yes many upper middle class tax payers are abandoning high tax rates in favor of southern states with lower tax rates and warmer weather. Seems to me that will exacerbate the problem.
NY is making that possible. But a lot of states have not. There are academic deserts where the commuting is arduous and expensive and to a CC that is poorly designed where getting AA is very difficult poor selection, if any , of courses often cancelled due to lack of interest or overfilled or problem in organization. Then there is that next step of where to go and how to pay for it.
I’m all for free community colleges. TN is on the right track in my opinion. Like @bluebayou , I’d support yanking the PELL and other government aid money(state funds) from the private colleges and give it to the Community Colleges and soup them up. Anyone who outgrows the CC or is too far to commute to it , can get funds to go to a state sleepaway School. If the kid is that incredible in stats, the private schools can pay for him out of their own money. I think it would be a rough transition, but those schools will just have to adjust their enrollment and discounting accordingly.
One of the main reasons for the PASSHE student debt is that they students are from households with significantly lower average household incomes than many if not all of the other 4 year colleges/universities in PA. Many are the 1st to go to college. Add that with the lack of funding from the state for nearly a decade and the students get hammered.
Student loans are standard. Same interest rate, same amount, same terms for everyone. The government is not judging the major or the gpa or whether a cheaper school would be just as good. Here’s the program, here are the terms, here’s the borrowing limit. They do not have a better rate for someone more likely to repay (engineers) or more money for those headed to Harvard or for those who really need it. One program, same for all.
Qualifying for subsidized loans or IBR plans are separate from the loan program itself. Everyone at a qualifying school gets the same loan whether the student lives in a high COL area or is going to a community college or Emery.
At first I thought the maximum amount should adjust more because the COA at most schools continues to rise, but now that I’ve been through the process with 2 kids, I’m glad there are limits. One of my kids did just fine but she has a lot of merit. Graduated, has a job, pays her loan.
My other kid could really have used more money and certainly would have borrowed more if it had been available. Instead, she scrimped and saved and did not go on spring break, got to go on study abroad but did not do the Grand tour of Europe at the end of her semester, and lived low. That was just fine. It will soon be time to start repaying the loans and she’ll struggle. She’s one of those history majors who would have had to limit the amount or had a higher interest rate if loans were based on probability of repaying. She has a low paying, hourly job. She wants to go back to school at a community college horse riding program, which I think is just stupid so she’s on her own. She had a trip to the ER a few months ago and is trying to get the medical bills paid. She’s not a deadbeat but a pretty average college grad who will struggle to pay her bills.
So I’m glad there is a limit on student loans or she’d be looking at an even bigger loan payment on the same salary.
48% leaving the state and getting worse. I. Called our old governors office to grip about it a few years ago. They honestly had no clue. Hope the new governor sees that there is a problem. I see he’s committed $10 million for money to the colleges.
The lacs that we saw and my daughter applied to where in that range she went to Illinois Wesleyan for 2 years with what I call a “bait” scholarship ($20,000) but then transferred to Beloit with an over $30,000 merit . She loves the school and we can afford it.
That also suggests that students from middle and low income families in Illinois may be having a hard time finding affordable college options, other than the few who can get admitted to the most selective colleges with the best financial aid, or earn the biggest merit scholarships at less selective colleges, since in-state public colleges are the more affordable options in most states.
That 48% is just those going to 4 year colleges. Many public high school grads are at community colleges and trade schools.
Well yeah, so does free-college-for-all subsidize the advantaged over the less advantaged. (And that seems to be extremely popular right now.!)
But it’s all getting the most bang for the buck. $5k goes a whole lot farther on a cc than it does at Harvard. Clearly, HYPS et al have the cash to be able to accept low income students without the federal largesse. So, if private colleges desire economic diversity, let them pay for it out of their endowment.
Yes, I realize that there are plenty of private colleges that have a small endowment. But again, I’d much rather support the public colleges, including community colleges, first. If I was education czar, I’d make community college tuition free for those courses that are transferable to the 4 year Uni.
btw: the link below is a draft paper from someone who regrets borrowing an additional $100k to attend Penn Law over attending Temple. If we, the public, had not made Grad loans so easy to obtain, he might have been spared that debt.
https://www.almcms.com/contrib/content/uploads/documents/1/Independent-Study-US-News-1.pdf
Re: #118 and professional school debt
Seems like we have to choose between bad options:
- Physicians, dentists, lawyers, etc. saddled with $300k+ loans.
- Those professions only accessible to those with wealthy generous parents or trust funds.