<p>Average student loan debt nationally is about $24,000, that really is not an unreasonable number. The problem is stories like this one, maybe a handful of kids nationally get to this number for UG, but everything thinks it’s widespread because of the press and all of the sudden we have a “student loan crisis” which really doesn’t exist. What we DO have is a new grad crisis of kids thinking they need expensive toys and apartments :D.</p>
<p>Sen. Mario Rubio said last night in his response to the state of the union that he had $100,000 of student loan debt and that he had just paid them off (I believe he said a few months ago). He is 41. I wonder what kind of message this gives to our young people (if they are listening lol!)</p>
<p>^I think the message is “do as I say, not as I do” with a lot of these people.</p>
<p>Focussing on how long some are paying off their loans is a red herring. Some of those loans have very favorable terms so it is to one’s advantage not to pay them off early or quickly even if you can easily afford it.</p>
<p>This issue is going to demagogued to death. It’s our fault. Americans historically have liked cheap credit and easy bankruptcy. There is currently a sense that it’s almost a civil right to go to college. We don’t have the political will to tell some people they can’t borrow money to go.</p>
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<p>We live in a populist democracy. Do you really think that the vast majority of Americans, who are non-high-scoring ACT/SAT voters and are not intellectually capable of becoming engineers et al., are going to support this scheme that does nothing to help them or their kids? Again, we lack the political will to restrict access to college by cutting the availability of the cheap loans which fuel tuition inflation and institutional expansion.</p>
<p>Why discharged? Work with these people, defer repayment for a certain amount of time, extend the time period, whatever, but just give them a free pass because “they didn’t understand” what it would be like? I do believe they understood that they were not being given free money and that at some point they would be expected to make payments. I get it that there are several forces at work here contributing to the problem, but why does that absolve this person of ALL responsibility whatsoever?</p>
<p>I think that parents and their children who take out these astronomical loans are being willfully ignorant. I simply don’t buy the argument that they don’t understand the implications of their decision–it’s relatively simple math. I see this more as a product of a society that expects instant gratification. I am the child of immigrants who had minimal education themselves and understood nothing of the college process and so it was left to me at age 17 to navigate the process on my own. I knew I could get information from my high school guidance counselor (at a not-particularly-good high school) and from the colleges I was interested in. I incurred very little debt in getting my degree and this was all before the age of the Internet where there is tons of information at your fingertips. People need to learn to take responsibility for their actions and stories like this one should be a lesson to others. If people keep getting bailed out, it just encourages others to make dumb decisions.</p>
<p>Sen. Rubio’s degrees include a law degree from University of Miami. It’s too bad he didn’t clarify that when he mentioned having taken out $100,000 in student loans.</p>
<p>I will admit to not always making the smartest financial decisions, but holy cow… there is plenty of information readily available for that kid to figure out that his degree was not going to GUARANTEE a job straight out of college (if ever) with a salary high enough to cover that kind of expense. DS is currently deciding between a VERY expensive highly ranked school where he will likely not get any aid, and a much less expensive, slightly lower ranked school. We’ve had the talk, and while I feel fairly confident he is choosing a degree that will not only yield a job upon graduation, but also a decently paying job, it just DOES NOT MAKE SENSE. His starting salary is likely to be about the same with a degree from either school, and the $80,000 difference over 4 years is not worth saying he went to his “dream” school. And we would NOT be taking about loans to pay that $80,000… even paying cash out of pocket and him graduating with NO debt, it does not make sense to our family to spend that extra money for the same end result. I really can’t feel too sorry for this kid, and while I feel that college costs have become completely unrealistic, he knew what the costs were before he started, so it’s his (and probably his parents) debt to manage.</p>
<p>Sueinphilly, I read your great story. Thanks for sharing.</p>
<p>If the kid had taken out a loan to buy a Maserati (because he thought the car was a necessary component of getting a job) and ended up not be able to pay the loan, would anyone feel sorry for him (when a Honda Civic would have worked just as well)? To me this is no different, just substitute Goucher for Maserati and state school for Honda Civic.</p>
<p>If a kid borrowed money to buy a maserati he could walk away from the loan.</p>
<p>[5</a> car loan options in bankruptcy](<a href=“http://www.bankrate.com/finance/debt/5-options-for-a-car-loan-in-bankruptcy.aspx]5”>Keeping your car in bankruptcy | Bankrate)</p>
<p>I understand that there are different elements involved in car loans vs. student loans, but I am addressing the thought process that goes into making decisions about where to go to school and how much to pay for it. One choice is an expensive luxury the other is a reasonable value. No one should be taking out loans with the idea that they can file bankruptcy if it doesn’t work out.</p>
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<p>OK, and then need-blind admissions would quickly disappear. Kids with wealthy parents would be more privileged in college matters than they already are. Colleges are not going to take responsibility for the vagaries of the labor market. And frankly, why should they? They can’t control supply and demand in that market. They only respond to it awkwardly and belatedly, as is the case with most institutions.</p>
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<p>The thing is, no kid would be allowed to borrow that much money to buy a Maserati or any other consumer product. The only loans that an 18-year-old with no assets and no credit history can take are education loans.</p>
<p>“Colleges are not going to take responsibility for the vagaries of the labor market. And frankly, why should they?”</p>
<p>Of course they are not. They aren’t going to do squat that they don’t have to do without a monetary incentive to do so. But “why should they”? Well, because they are getting a lot of federal and state money to make money. We are paying for them to do this and if they are just producing more drains on us instead of doing good, yes, they should pay for it. A good start, as I said, is to make each college report the number of their graduates who have defaulted or are behind on their student loans. Would make for interesting reading that College A has X number of kids and parents who are deadbeats after borrowing federally backed loans and/or federal/state dollars. </p>
<p>There is supposed to be an accounting of jobs and pay of various majors but I do believe that the info is pretty clear. I’d rather see how many students a given school has that are unable to pay what the school costs had them borrow. That might get the alums and the school hustling a little bit. Have it affect their US News Rankings and they’ll hustle even a little bit more. And have that info required for the those parents and kids about to sigh on the dotted line as the school directs them to the Parent Loans. For those who have been around a bit in this area, do remember that these very same schools got into all kinds of trouble not too long ago for taking kick backs on private loans that they sent kids and parents to. So now they stay out of that area, after getting their back sides kicked on that abuse. So, no, they won’t do at thing to help anyone out and knowing what abused they have been party to in the past, not too distant past, unless forced, they will not do anything and will actually counsel and push for families to sign on these loans and may even be giving false reassurances, or as they say in my family, LYING.</p>
<p>"Focussing on how long some are paying off their loans is a red herring. Some of those loans have very favorable terms so it is to one’s advantage not to pay them off early or quickly even if you can easily afford it. "</p>
<p>Bay, that may have been the case for loans some time ago–I don’t know that history. But right now, unless a kid gets a subsidized loan with no interest while in UG studies and a reduced interest thereafter, the rates are no bargains. Take a look at those Parent loan rates. Given the prime rate, that’s not such a deal. Better off paying off the student loans and taking on a house or car loan.</p>
<p>*I think graduating with that kind of debt is unconscionable. </p>
<p>I think the debt should be allowed to be discharged. This young man is in big trouble. The school should have some responsibility to make sure the students are not graduating with $100,000 in debt.*</p>
<p>the school is not responsible. What would you expect a school to do? </p>
<p>If this student’s EFC was higher than his parents would pay, then what should a school do about that?</p>
<p>If this school cannot afford to “meet need” then do you suggest that the school reject all students who have high need?</p>
<p>If this student had parents who were willing to cosign these loans, then why should a school interfere? </p>
<p>You’re putting schools in an uncomfortable position. You’re essentially telling them to reject all students who can’t either pay their EFCs or have high need (and the school can’t meet need).</p>
<p>@NJSue - The amount the kid could have taken out without a cosigner is not an unreasonable amount (about the amount it takes to buy an average car), so he must have had a cosigner for the balance, presumably his parents (which means there are assets there that can be used to pay off at least part of the loans). Thus, his parents must have been involved in the process and since the article says his dad is a business owner, I can’t believe they didn’t know what they were getting into.</p>
<p>On another note, another factor in the kid’s current predicament might be his grades–a lot of employers ask for transcripts nowadays. Maybe he was a poor student and maybe he was never a great student which makes paying a lot for an education an even dumber decision. My brother has 4 kids and due to his income, none have or will qualify for aid. He told them he would only pay for college if they did their best throughout high school. Second oldest, after a good year in 9th grade, decided that having fun was more important and did just enough work to scrape by (despite offers for tutoring, etc.). When he graduated, he was on his own and decided to join the military (where he is doing well). Maybe more parents need to assess whether their kids “deserve” a college education.</p>
<p>If I had $100,000 in student loan debt at say 3%, I would not be in a hurry to pay those off. Saying that 40 some year old’ just paid that off is meaningless without the reason behind the delay. Seriously, Obama made over $2,000,000 in royalties on his first book, I’m pretty sure he could have used some of that to pay off his loans, however, investing those funds made a LOT more sense given some of those investments were earning 6+%, at least. Obviously a kid right out of college with no job it’s a can’t pay off the loans vs choosing to pay of the loan situation.</p>
<p>When I was in college, freshman year, mortgage rates were in the 15-18% range, student loans were at the unheard of rate of 8%. By the time we bought our first house, mortgage rates had dropped to 7% and we paid off our loans in short order because they were expensive. Had they been at 3%, we might still be paying on them by choice…</p>
<p>*I think graduating with that kind of debt is unconscionable. </p>
<p>I think the debt should be allowed to be discharged. This young man is in big trouble. The school should have some responsibility to make sure the students are not graduating with $100,000 in debt.*</p>
<p>the school is not responsible. What would you expect a school to do? </p>
<p>If this student’s EFC was higher than his parents would pay, then what should a school do about that?</p>
<p>If this school cannot afford to “meet need” then do you suggest that the school reject all students who have high need?</p>
<p>If this student had parents who were willing to cosign these loans, then why should a school interfere? </p>
<p>You’re putting schools in an uncomfortable position. You’re essentially telling them to reject all students who can’t either pay their EFCs or have high need (and the school can’t meet need). </p>
<p>Maybe the lenders need to include some kind of caveat that the co-signers must sign that states that if the student isn’t earning 10 times the annual loan payments within X months of graduation or leaving school, then the co-signer will be immediately billed a prorated amount. That ought to scare many of these idiot co-signers. </p>
<p>In the case of the subject of this thread, his monthly payments are probably about $1000 a month. So, if he’s not earning 6 figures, then the co-signer would be billed proportionately.</p>