<p>annasdad: But why should the flagships be unaffordable to the average family?</p>
<p>The simple fact is that we need to raise taxes on the rich and increase state funding for public higher education. The richest Americans aren’t paying their fair share, not when their income has increased 385 percent since 1970 while those in the bottom 90% have seen their incomes actually drop 1 percent.</p>
<p>There is a simple solution to the student debt problem: Guarantee every student who is capable, the ability to afford their state school with a combination of need-based aid and Stafford loans.</p>
<p>polarscribe, I basically agree with you. However, looking at it from the standpoint of a parent or student evaluating alternative courses of action today, there are affordable routes to a solid college education - for most people.</p>
<p>I agree. I work at a non-flagship state school in NJ; the students here are getting a fine education. It is really an impressive place. Many of them commute, and all of them have made the choice to go here rather than take out ridiculous loans to go somewhere else. these are middle to lower income families who have made good choices. I hate to see them forced to subsidize bad choices. </p>
<p>It especially bothers me when I see stories of non-low-income students taking out these huge loans; it essentially means that their parents chose not to pay at all, but their incomes blocked the students from any sort of aid. It’s just a bad situation all around.</p>
<p>I have to say, also, that if the above referenced Drexel letter used the word loan (and it sounds like it did), I don’t see how anyone with any kind of reading comprehension at all good assume they were getting paid to go to school and wouldn’t owe money. </p>
<p>I worry about what is happening to the critical thinking in this country. I’m not a fan of the banks, but holy moly, how do people see these amounts and not have a clue about the reality? How do they so successfully fool themselves?</p>
<p>I have little sympathy with these students and families who borrow money so readily without asking how much they will have to pay back under the standard scenario. I don’t believe all of them did not get some figures. I think they just ignored them. When you take out $50-60K in loans, what the heck do you think the repayment amounts are going to be? </p>
<p>I guess the loan papers should have the standard monthly blazoned in red in 2 inch letters, but i’ll bet even then there will be those saying they were not informed. That quote of “I’m going to owe like $900 a month. No one told me that.” bothers the heck out of me. I’m sure no one told here that because they did not know of the prior loans as she racked up her $120K in loans over time. She frigging bought a house without getting one.</p>
<p>According to the Project on Student Debt, for the class of 2010, average debt was just over $25K. That’s below the Stafford maximums and seems doable for most. Yes, I do understand what an average is and that there are people with more – and less. </p>
<p>So, here’s my question, and it’s an honest one. Given the average, is this “student loan crisis” stuff the next housing bubble or just media hype? Are we hearing about a minority of students with huge debt when actually most people have pretty manageable levels?</p>
<p>THe problem with the “average” figures I have seen is that they do not take into account outside loans, co signed loans and parent loans. Those are usually the Stafford and Perkins loans that are tracked. You don’t know when a parent takes out a second mortgage or co signs a privatae loan putting both parent and kid on the hook. That stuff is not required to be tracked and there is no available info on this.</p>
<p>But why should the flagships be unaffordable to the average family?</p>
<p>Because it involves the cost of room and board. The average family typically can not afford to pay for their kids to live elsewhere while going to school without taking out loans. Even back in the stone age when I was in college, the “average family” didn’t send their kids away to college…they couldn’t afford it…even with heavily subsidized tuition. The ONLY kids I knew who went away to school were the more affluent or those who took out loans or worked extra to pay for their R&B. </p>
<p>And, it depends on how you’re defining the “average family”.</p>
<p>Raising taxes “on the rich” is not going to provide the billions needed to bring down state school tuition to some low cost. </p>
<p>But, hey…why don’t we redistribute GPA’s and test scores instead? Hey, it’s not fair that so many more affluent kids have super GPAs and test scores…we need to take some points from these kids and give them to the others. ;)</p>
<p>I would just add from the people that I know the problem is not really that they don’t understand what the COA is, its more that people believe this myth that there is plenty of money out there in scholarships/grants. That all you need to do is worry about being admitted and if your admitted somehow the money will majically appear!</p>
<p>I am sure we all have stories like this but I have a family member whose son just barely graduated HS by the skin of his teeth, then layed around on the couch for a year doing nothing, then decided he wanted to go to a private college and she was SHOCKED that he was’nt offered scholarships! Not only that but he did’nt even have all of the required coursework to be admitted.</p>
<p>Right now I have a friend whose son is planning to go to a state school on the other side of the state, not a good gpa, he has $3000 in local scholarships and thats it. Not pell eligible, dad lost his job due to business closing and not one time has she ever mentioned money. Son decided thats where he wanted to go and thats it. I am very afraid that after he registers for classes and they get the bill he may have a big dissappointment. But she has also not gone to one FA meeting the HS has had. Back in the fall when they went to the HS senior visiting day at the college he told me she skipped out on a lot of the classes and she is not planning to go with him for the day trip when he registers at the end of this month, even though the letter sent said they stongly encourage parents to attend…</p>
<p>Even just this week a co-worker mentioned she was turned down for a plus loan and was asking for advice and every single person was telling her " oh theres tons of unclaimed scholarship money out there you just have to research it to find it"!</p>
<p>I’m beginning to think that this partly happens as one of those boiled frog stories. You know the one where a frog will jump right out of a pot of boiling water but if it’s in there before the water gets heated to the boiling point, it ends up being boiled since the change in temperature is gradual and it doesn’t notice until it’s too late. The point is, that the first year of loans may not look too bad: the first $10,000 re-payment rates might not sound too egregious. After the first year, the student/parent might stop checking. By year four (or five) it adds up to real money.</p>
<p>I see that a little with my D who is starting school in the fall. She might have to have a loan, but it will be of the Stafford loan variety. When I plug it into an amortization schedule, the payment doesn’t look bad for $5,500. But using the full federal loan amount over four years, it starts being noticeable, when one now owes $25,000.</p>
<p>For those who are not practiced in looking at financial nuances, this detail is easily overlooked until it’s too late.</p>
CPT, I’m not sure that’s correct. [Grading</a> Student Loans - Liberty Street Economics](<a href=“Liberty Street Economics”>Grading Student Loans - Liberty Street Economics) The source certainly looks at more than federally funded loans. However, it probably does not include HELOCs or anything funded on a credit card.</p>
<p>Erin’s Dad, I don’t know enough about those figures you have there to comment. I do know that a lot of common data information on student loans are based on the college loans. THey do not include PLUS or private loans. </p>
<p>How widespread among the general population this is, I don’t know either. Not everyone goes to college and not everyone takes out student loans. It is a niche of society that does this.</p>
<p>However, in that niche, we are certainly making some distinctions between the “haves” and “have nots” within those who are well educated. My son who has no student loans is always belly aching about his friends and former classmates whose parents are well to do enough to supplement their kids heavily even when those kids are done with schools. They live in apartments or condos that the parents have gotten for them. It makes for a much easier life. Then you have those who are working many jobs just to make ends meet, like my son, but still lucky in that they are loan free and have parents who can slip them a little bit here and there, living close enough so that a meal, a ride, some help is available. There are kids who don’t have that and owe as well. Education is hardly the great equalizer in these situations.</p>
<p>I can tell you from my own experience in financial aid at a large public U that there are too many students taking on too much debt. I am confident that it is a house of cards that will come down on all of us. It’s not “everyone,” but it is too many.</p>
<p>It baffles me how the students have no clue about how the debt will impact them. Yes, I can understand that an 18 year old does not really get it, but where are the parents in this process? My kids did have to take in some loans - our family situation because of early retirement due to health issues meant that we were not able to help as much as we had anticipated. But I would never have allowed them to take on huge debt, even if they had wanted to which fortunately they didn’t. (my daughter thinks he slightly <$20k is a “butt load of debt”).</p>
<p>Her fiance has parents that were able to pay in full, so fortunately they just have her loans of less than $20k. My best friend’s daughter went to a private school but her wealthy dad was able to pay out of pocket. Her fiance just graduated with over $100k in loans. My friend’s daughter seems to think they will have no problem paying off the loans as she did leave college with a nursing job lined up (which is wonderful, it is her dream job). But she thinks they are going to be rolling in $$$$s although he does not have a job yet because his GPA was not that stellar and a couple of interested employers ultimately rejected him because of it. I don’t think they have the slightest concept even now (as evidenced by him buying her a $3500 engagement ring).</p>
<p>The girl in the quoted story still seems a little clueless. $900 a month payments on over $120k in loans sounds a tad optimistic.</p>
<p>^ Tad optmistic indeed. Assuming 6.8% and a 10-year repayment plan, it’s $1,380 a month. At 20 years, $916. I doubt she has a better rate, and may have one much higher. At the 10-year plan, making some optimistic assumption about taxes (net 30% of income), she’s need a yearly salary of $55,000 just to cover the debt, much less living expenses.</p>
<p>What I think fuels a lot of this misconception about affordability of large student loan payments is that these kids have NO IDEA how a single person with no dependents/deductions gets hit hard with taxes. They may have parents who pay little in taxes because they have more deductions/exemptions that may bring their taxable income to the point where they pay no or little taxes. </p>
<p>*They’ll say things like…I’ll make $40k, if I have to pay $12k for loans each year, then I’ll still have $28k to live on…I can live quite nicely on that. *</p>
<p>They also have NO IDEA how much living expenses will cost since few have ever paid for cell phones, car insurance, healthcare, along with rent, food, clothing, etc. </p>
<p>My older son’s grad stipend is about $27k per year. About half of it goes to rent alone (his half…he rents a 2 BR and there’s a student in the other room. He really doesn’t have much left over each month and we pay for his car insurance, health, and cell phone…and his air travel home.</p>
<p>One of my former managers showed me an email trail between her and a student. The student blamed the school for getting her into so much debt (a public school she could have commuted to, by the way). The manager explained that the student had completed entrance counseling when she borrowed, and she pointed out the information on the student’s award notifications … as well as the info on the MPN the student signed. The student responded that she didn’t actually pay attention to any of it. </p>
<p>Sometimes, you just don’t know what to say … :(</p>