<p>^But also let us not blow it out of proportion. The average debt is roughly equivalent to the price of the average new car.</p>
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<p>You need to read the n+1 article I posted. Because if you did, you’d realize that you, I, and everyone else are already on the hook as tax payers for paying off student loan debt when students start to default. </p>
<p>It’s a ridiculously stupid system we have set up in the United States. We practically have socialized education, only it is set up so people still think it is privately run and students have to take out massive debt to obtain it. It’s a system that’s socialized…except that it is set up only to help out the banking industry at the tax payer’s expense.</p>
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<p>this actually just reinforces what I am saying. carry on.</p>
<p>Sometimes what makes good economic sense offends some (ah-hem) “moral sensibilities”. Providing housing for chronic public inebriates (where sobriety isn’t required) is a good example. It cuts social service and medical costs that we end up paying for, in one way or another, by some two-thirds. (And a goodly number reduce their alcohol use.) But “how can we provide housing subsidies for the chronic alcoholics when the working poor get nothing?”</p>
<p>Same is true for providing mortgage assistance to those in over their heads so they can stay in their homes. “How can we take money from hardworking Americans to support those who made lousy decisions?” (even if it preverts the value of the houses of those hardworking Americans from collapsing.) Same (from the sinister side of the aisle) when it comes to “too big to fail”.</p>
<p>Sometimes the best economic policy is not the social policy we would prefer. Sometimes good “moral” thinking that might apply to middle-income Americans might not generally apply. Many people think of “debt” as a bad thing…wealthy investors think of “leverage” as the way to get rich. And public debt (think bonds to build schools or bridges or firehouses) is what makes our towns and cities work.</p>
<p>If the full “faith and credit” of the U.S. government is behind student loans, then the loan rates charged should be the same as the interest rate we pay to China. </p>
<p>I would think that something to consider would not necessarily be loan forgiveness, but putting loans into abeyance until people are employed. (Yes, I can imagine all the problems with that, and it would cost the government money, but it would put us all in a better position than we are now, I would think.)</p>
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<p>I think these are good ideas.</p>
<p>I also think it would be a good idea for us to consider the value of investing in our youth and that low cost high quality education is the best way to do this, also strong vocational training at low to minimal cost, as well. JMO</p>
<p>“^But also let us not blow it out of proportion. The average debt is roughly equivalent to the price of the average new car.” #21</p>
<p>I think the amount of debt that is equal to a new car only includes Stafford and Perkin loans.</p>
<p>It doesn’t include Plus Loans. If it did, the debt per student would be much higher.</p>
<p>Likewise, the amount that is government backed is only the Stafford and Perkin loans.</p>
<p>The n+1 article is the same article that is in Utne Reader.</p>
<p>The other option rather than student loan dischargability would be for lawmakers to pass a law making all payments on student loans to go FIRST towards the principal. After all the principal has paid off, then payments after that could go towards interest. The fact that you have to pay off interest first before any payment goes towards the principal makes it take much, much longer for students to pay off loans.</p>
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<p>Source?</p>
<p>[Student</a> loan debt on the rise - Oct. 22, 2010](<a href=“http://money.cnn.com/2010/10/22/pf/college/student_loan_debt/index.htm]Student”>http://money.cnn.com/2010/10/22/pf/college/student_loan_debt/index.htm)</p>
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<p>And at any rate, PLUS is an obligation of the parent, not the student.</p>
<p>I didn’t realize there are people that characterize student loan debt as “good debt”
And to think all this time I have been calling it, “Evil debt” mainly because it is nearly impossible to discharge and also because there is a tendency for students to pile it on beyond what is reasonable or what they originally anticipated. Why stop now when you only have 2 more years left?</p>
<p>Annasdad, #28, it really doesn’t matter who is ultimately responsible for the debt - it is still debt that is being acquired. Most Plus loans are signed by a student and co-signed by the parents. This is common knowledge (as you were aware). It is discussed in much more detail in the FA Section.</p>
<p>Debt sources have always posted the $24,000 figure to be deceptive. It isn’t new in 2010.</p>
<p>It is relevant to this discussion, I think, because one may think $24,000 of debt is good debt, and $75,000 is bad debt. </p>
<p>Interest rates, which gravenewworld also addressed, and other terms of the loans that vary greatly by lender (often several interest rate points that are contingent on a certain long term behavior), and different pay back periods and non-payment required periods (such as during unemployment), also influence whether this is a GOOD debt or BAD debt.</p>
<p>The student loans are indeed GOOD debt–for the lender because they are protected, regardless of how shoddy the product and how inappropriate the loan for the borrower.</p>
<p>So the loans pump money into the economy, that is, the coffers of the colleges and universities. They, in turn, hire folks, who supposedly buy houses and coffee, which means employment for construction workers and coffeewallahs. That’s how “trickle-down” works, right?</p>
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<p>Can you cite one?</p>
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<p>Flat wrong, as I am indeed “well aware.”</p>
<p>[Frequently</a> Asked Questions | PLUS Loans](<a href=“Parent Student Loans Hub - Articles, FAQ, and Applications | Edvisors”>Parent Student Loans Hub - Articles, FAQ, and Applications | Edvisors)</p>
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<p>“So the loans pump money into the economy, that is, the coffers of the colleges and universities. They, in turn, hire folks, who supposedly buy houses and coffee, which means employment for construction workers and coffeewallahs. That’s how “trickle-down” works, right?” Mini</p>
<p>What was most interesting (I thought) about the article I posted in Utne Reader and N-1 is the people who are benefiting from these loans.</p>
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<p>You forgot a piece: The loans pay for a college education for the would-be construction workers and coffeewallahs, and that is supposed to be sort of important for society and the economy.</p>
<p>So what’s not to love? Of course, we could take the money and build an extra engine that will never be used (for $20 billion) for a bomber, or send $1.8 billion to those who engaged in torture in Egypt. But education is our nation’s future, right? And it all trickles down…</p>
<p>Monthly payments on a $24K loan @ 6.8% is $276 per month.</p>
<p>Even if the student starts out making $10 per hour, s/he should be able to pay it back. Will it be pleasant? No, but it is certainly possible.</p>
<p>In some ways it would be better if fewer students were able to take out loans. Too many unprepared students are attending too many low-tier colleges and not graduating. If more of them would take up farmwork instead, we’d solve a couple of problems.</p>
<p>@#33 Yes the parents are technically responsible for the Plus Loan debt as a co-signer, but often they are the cheapest or only loans a parent can get. Agreements are made between parent and child about who will pay for the loan. So, only for the sake of being argumentative does it matter who signs. Also, the parent can declare bankruptcy if he so chooses, which a student cannot. </p>
<p>However, I can’t think of any parent who wants to declare bankruptcy on the school loan.</p>
<p>For citations for the rest of your questions, see the CC Financial Aid Forum.</p>
<p>I’ve paid for 15 years of higher ed for my children. I know all the ins and outs.</p>
<p>For how many years has Anna’sdad paid?</p>
<p>Gravenewworld said:
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<p>I’m not sure which Bush you are blaming, but inasmuch as Bush II takes most of the heat, I will clarify bankruptcy law for you.</p>
<p>Student loans have not been easily dischargeable under bankruptcy law since the Bankruptcy Code was created in 1978. Under Chapter 7 (what most people think of as bankruptcy) student loans were only dischargeable after 5 years of non-payment (not including any time of deferments). The law was amended to increase the non-payment period to 7 years in 1990. In 1998 (I forget if this is Bush I or Bush II) student loans were made completely non-dischargeable in Chapter 7 bankruptcies with a very limited exception.</p>
<p>In Chapter 13s, sometimes called “wage earner” plans, student loans were allowed to be discharged after sucessful completion of the Chapter 13 plan (which was typically three years). Chapter 7 discharge rules were applied to student loans in Chapter 13 in 1990 under the Danforth-Biden-Thurmond bill.</p>
<p>One note - originally only student loans owing to “a governmental unit or a non-profit institution of higher learning” were non-dischargeable. The law was subsequently amended to include loans for attending any institution of higher learning (including for-profit colleges) and was not limited to guaranteed student loans.</p>
<p>Personally, I have not been in favor of most of the changes to the student loan bankruptcy law (and I had very few clients that it mattered to). Nonetheless, I believe that bankruptcy can help both the individual and the economy if its use is limited to cases of true hardship.</p>