<p>Don't know a better way to phrase it, but why are public universities permited to offer unsatisfactrory packages to young adults? I know that they cannot offer full need to out of state students, but why can schools present packages to out of state students which gap more than 20,000/year? Who is giving students private loans to make it happen? I just think that offering packages like this, leads some 18 year olds to think this is an acceptable, responsible amount of debt to take on for one's education (after all a public university presented and mailed such a package). I just think it is the wrong thing to do, if the package does not say something like:</p>
<p>We cannot offer you a package with what is considered a reasonable amount of debt. We have gapped you, but unless you have a relative willing to assume some of these additional payments, we advise that you do not put yourself into this amount of debt, and look elsewhere. (in other words, we gave you an admit/deny, so be smart about it).</p>
<p>I don't think that private colleges should offer these packages either. I am not just picking on publics, although I'll guess that for out of state students public Us do this more than private colleges because they must worry about their instate students first.</p>
<p>Because some people are making a lot off money off other people?</p>
<p>It is horrifying to see how much debt some people are willing to take on - and to realize that the majority of them truly have no concept of the impact that debt will have on their lives.</p>
<p>Perhaps the schools think that anyone willing to assume that much debt needs the education they can provide to learn why they should have refused the debt. </p>
<p>Or the debt laden financial aid offers protect schools from discrimination claims.</p>
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Perhaps the schools think that anyone willing to assume that much debt needs the education they can provide to learn why they should have refused the debt.
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<p>I love that sentence - so funny. Also so sad. And so true.</p>
<p>for the same reason that subprime and create mortgages were sold. There is a sucker born every minute, it's not illegal, people don't realize what they are doing (aka ignorance).</p>
<p>Hm, wonder would would happen if all of a sudden all the people who borrowed 100K or didn't pay it back. I heard that for govt loans there is a new (?) payback schedule that is based on your earnings. </p>
<p>But the private loans.... Can you say future crisis if there are enough people signing on for these loans.</p>
<p>As it is, my son will graduate with <30K in govt loans, none private (or so I am planning, he is finishing his freshman year). And that is with getting a 30K scholarship to a 50K school.....</p>
<p>The ONLY cheaper option was going to state U. But I promised him that if he got into NYU and got a big scholarship, I would pay my share and he would take out whatever govt loans were offered. </p>
<p>I wouldn't allow him to go further into debt than that.</p>
<p>Seriously though, I think that it is wrong. I also think when a package with a huge gap shows up on the doorstep of an 18 year old, and it comes from a flagship public university or widely known brand name school, a young person is going to think that it is doable, and a fair deal for their education. I think that many people want to trust that a college or university is not a used car dealer, and has made a fair offer. After all a financial person looked at their efc, tax return info, and all other financial info and returned this neatly packaged financial offer. In fact, my own son got one that arrived in a black and gold box! It looked like a present. Inside was the offer of a subsidized Stafford and a Perkins loan. It was far from a good package. Need was being met with all loans and I don't recall the gap. I will never forget the wrapping.</p>
<p>My daughter's school - email saying we have your financial aid offer - log onto your student account to see it. </p>
<p>I think a lot of students are convinced they are going to come out of school earning the big bucks from day 1. And many are truly clueless (understandably) about financial matters and seem to lack guidance from anyone who does. Then there are the really clueless ones who pass their (lack of) knowledge onto others. On one thread a poster (who is one of the most clueless posters out there) was telling people it was fine to take on $200k of debt and the payments would be less than $1000 a month over 20 years - would like the source of that apparently interest free loan!</p>
<p>swimcatsmom, I am not kidding you about that gold and black box. It was wrapped with cellophane around it so it would make a beautiful presentation once the cellophane was removed. I won't forget that one. It was one of my son's worst financial aid packages.</p>
<p>northeasternmom - I share your concern. The financial aid packages with hugh loans are shocking to me. But what surprises me more (as you pointed out) are the families/students willing to take this buden on. </p>
<p>In our family's case, D watched her cousin take on a lot of debt in her 1st and 2nd year of college. As a result she is clear that she does not want any FA with huge loans. I certainly wont allow her to take this burden on - and I have decided that I wont take it on. As a consequence, D has turned down one of her top school choices because of the high loans in the FA package. No school is worth 25K/yr in loans - especially when the student is talking about post graduate studies. Where will it end?</p>
<p>Joix, That is so sad for your D's cousin (your niece I presume). Beside it being awful to begin adult life with such debt for the individual, and perhaps the cosigners, I believe that it is not good for our country. Many of these kids won't be able to scrape money together for a downpayment on a home, won't be able to save for retirement properly, won't be able to put money away for their children's educations. Can you imagine if they marry someone with similar debt! I sure hope that my kids don't marry someone with this kind of debt. We have done our best to minimize our older boy's debt. I don't want him taking on his wife's financial headaches. I would predict a high chance of divorce! It might sound cold, but that is the harsh reality.</p>
<p>Way back in the dark ages, I transfered to an OOS school. They offered me no aid, which I didn't know till I got there (clueless, plus things seemed to work different back then--I think I was sure I could change their minds--mom was a low income widow, etc.) The first year we paid with loans and work, the next year I qualified for a merit award. I still took out the big loan, but mom's was smaller.</p>
<p>I am glad they let us decide to take it on, rather than doing me a kindness of turning me down instead. </p>
<p>Neither of us went bankrupt. I'm not saying it was a good thing,but i am saying that I understand that there was no money available that I wasn't getting, and I was glad I was given the opportunity to make it work, anyway.</p>
<p>@ NEmom - funny you should say that but I know this young couple...only been married for 5 years....they are in their early/mid 30s and they are in conflict now because wife's college loans have been deferred all this time and they want to buy a house. </p>
<p>He has paid his loans off years ago and said he will not be responsible for paying the wife's debts. Needless to say she is so burdened by her loans because she has deferred so long and her actions have actually affected their ability to buy a house. Hubby, as you can imagine is not pleased, or sympathetic.</p>
<p>So your harsh reality is spot on. It does happen.</p>
<p>It seems that one almost has to know what kind of college debt people are carrying before one marries them.</p>
<p>@ garland - yeah but way back in the dark ages did it cost 50K per year to attend college?</p>
<p>also, ones ability to take on a huge college loan has alot to do with future career plans. i know doctors and lawyers that i went to uni with that were able to pay off their HUGE loans in 10 years or less!!! Not all careers can support that. </p>
<p>what if you are going into non-profit work or some other career where your entry level job starts you are $40K per year? How in God's name will you pay for rent, car, misc expenses AND $800/month school loan?? especially if you live in expensive regions like NY, DC, MD, SF (and many more).</p>
<p>I do agree with you that it should all be about choice. But there should also be more education about the future impact of loans on the life choices of young people.</p>
<p>Such marital bliss! I wouldn't want to live in their household. My H and I both had student loans, but for graduate school. We were able to easily deal with them because they within an acceptable livable range.</p>
<p>Garland, do you think that your loans were as large as proportionately as some of the large debt many students are grappling with today?</p>
<p>Joix, I just cross posted this with you. </p>
<p>Just to give you an idea, my H did go to law school. His monthly loan payment was $100/month. That really was not too painful for us.</p>
<p>We have been given choices, and the freedom to chose. Who is the school to dash the hopes of dreamers who can become doers?</p>
<p>I do not disagree with OP. A hearty dose of reality, that hits the kids and parents hard over the head at the time of applying for loans would be helpful. CMU's freshman students who have guaranteed loans MUST attend a seminar on these loans and Again take an duties and responsibility loan program on graduation which is mandated by law.</p>
<p>It doesn't surprise me that they then go on to take on school loans that will bankrupt them.</p>
<p>What makes this all possible is the neat little thing in the bankruptcy code that makes most of these loans NOT dischargable in bankruptcy. Hence, the lenders (or worse yet the investment banks that buy the bundled college loans) think they are default-proof. Let's see what happens when 10% of the loans are in default and the lenders can't get blood from a turnip and turn to Congress for help.</p>
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Sounds a lot like our mortgage crisis...
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<p>I see this coming too. I wonder if down the road, kids who went to community college and then to their instate school will be bailing out those who took unrealistic loans at ages 18-22.</p>
<p>Okay I'm kind of worried at this. I submitted my financial aid late, and my single mother only started working last year. If I am an OOS student accepted into UVA, should I worry?</p>
<p>^ you should. Public universities are not meant for OOS students unless they are rich (and in that case why not go to a private university)
They don't have the kind of funds to provide a lot of aid to instate students leave out OOS students.
I really hope you have some other college to go to except for UVA.</p>
<p>My parents income is really low (i am a US citizen living abroad) since they earn in Indian Rupees and i got all my need met in grants and small loans at Emory ,Carleton, Brandeis and Boston university. But the public colleges UIUC, Uflorida etc gave me almost nothing except huge PLUS loans.</p>
<p>I understand why this is now and would not have spent the time writing essays and filling out the applications for state schools had i understood this properly before- i don't think any OOS student with a lot of need should apply to a public university.</p>