<p>Well, the banks can refuse to give the loans. I wouldn’t blame our melt down on consumers.</p>
<p>“I think I might support the choice to take on the debt if I did not think that in a few years we are going to be bailing out the education debt the same way we are bailing out the mortage debt.”</p>
<p>Probably right. Of course, if we’re going to be bailing people out, then maybe it would be a perfect time to take out a massive loan. You won’t have to pay it back anyways, right? With the new forgiveness plan that was passed with the health care bill, just keep making those minimum payments and after 20 years-whoopee, no debt! Just 10 years for “public servants”. Big bucks private colleges-now the new entitlement. Courtesy of the minority of people who are paying the taxes (and their kids tuitions too).</p>
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<p>We must have been watching something different. Suze “Orman” didn’t belittle, poke fun, or destroy the kid’s dreams. She is helping out the kid in the long run. She explained that she would have to pay $900 a month for 10 years. With the average starting income of a communications major, the girl would have roughly $600 left of dispoable income. How are you are going to live on $600 on a month if you don’t move back with your parents for 10 years?</p>
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<p>This is the exact problem with a lot of Americans today. Many Americans “buy now and pay later”. They think that if they have $20,000 available credit, then they should spend $20,000. </p>
<p>I’m 22 and I have over $15,000 of available credit from my credit cards. I’d love to go to New York. Maybe the MLB All-Star Game and going to concerts around the country. I would look back on those times with happiness, but the happiness will end the minute I get off the plane. Why? Because I don’t have the money to afford it. Why would I charge something I can’t afford and pay interest when I could wait until I can afford those trips and pay them off in full and not have the burden of being in debt?</p>
<p>Without a doubt, Suze Orman has an edge. However, I wonder if many people dislike her because she says what they do not want to hear.</p>
<p>If you guys are worried about student loans going the way of the mortgages, my suggestion is to stop lecturing families, and look to see if banks and hedge funds are dealing in derivatives backed by student loans. If they are, make sure the derivatives exchange is fully transparent, no off exchange private trades, and all banks are fully capitalized with abundant reserves against risk.</p>
<p>And maybe, if you don’t think that will work, lets ban the largest banks from dealing in such derivatives, as they are the ones that are too big too go through the normal FDIC takeover process.</p>
<p>My sense is most folks saying this is their business cause its just like mortgages, really haven’t been examining the mortgage crisis, or proposed financial regulations, that closely.</p>
<p>In any case, the entire market is different, as there is no salable asset being used as collateral for these loans.</p>
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<p>You took the words right out of my mouth. Some people don’t like to hear the truth. Fortunately, Suze is telling it like it is and hopefully that girl and her parents will follow her advice.</p>
<p>"I’m 22 and I have over $15,000 of available credit from my credit cards. I’d love to go to New York. Maybe the MLB All-Star Game and going to concerts around the country. I would look back on those times with happiness, but the happiness will end the minute I get off the plane. "</p>
<p>I guess some of us hope a good education, quite apart from its debatable effect on future incomes, will have a long term effect on the person that will NOT end the minute the four years are done. That education is soulcraft, as consumption expenditures are not. You don’t have to agree with that. That is the point, that this is something we don’t all agree on, which is why the judgementalness is particularly offputting, even more so than when someone goes all puritanical on someone else’s consumption and financing habits.</p>
<p>“Big bucks private colleges-now the new entitlement. Courtesy of the minority of people who are paying the taxes (and their kids tuitions too).”</p>
<p>do you people actually think that state colleges are cheaper cause the profs earn less, or cause they have such higher student teacher ratios? </p>
<p>Why does no one see the moneys states spend on state U’s as entitlements?</p>
<p>My state is spending over one billion dollars on its flagship campus alone. If I wasnt paying for a system which for a bunch of reasons I cannot use, I could much more easily afford the private U my DD will be attending. </p>
<p>[Virginia</a> DPB - 2010 Budget Document: Secretary Summary](<a href=“http://dpb.virginia.gov/budget/buddoc10/secretary.cfm?sa=3]Virginia”>Virginia DPB - 2010 Budget Document: Secretary Summary)</p>
<p>I really, really, think that folks advocating everyone go to state U’s should refrain from lecturing on entitlements.</p>
<p>"Why does no one see the moneys states spend on state U’s as entitlements? "</p>
<p>I see it too, it is a HUGE entitlement. The state universities are giving massive discounts in education, courtesy of the taxpayers. And then when they try to raise tuition to a more sustainable rate, everybody screams and yells. California in particular, has been subsidizing world class education and charging next to nothing for it. No wonder they’re broke.</p>
<p>“Courtesy of the minority of people who are paying the taxes (and their kids tuitions too).”</p>
<p>BTW, its not the case that a minority of people pay taxes. A minority of people pay FEDERAL INCOME taxes, but your talk show pals leave that out. Also, the percent paying taxes is temporarily lower, because of stimulus package tax cuts. </p>
<p>I would hope an elite university education is not required to understand these things.</p>
<p>“California in particular, has been subsidizing world class education and charging next to nothing for it. No wonder they’re broke.”</p>
<p>most states heavily subsidize state U’s. Calif is on the ropes cause of the mortgage crisis.</p>
<p>BTW, which flagship state Us are not up to par with private U’s? From these kinds of threads, I get the impression most are.</p>
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<p>I was comparing intangible assets to another intangible asset (college). Both are the same expenditures.</p>
<p>" the judgementalness is particularly offputting"</p>
<p>Yes, I think your posts are quite judgmental and offputting.
And you can pretend that everyone pays equal amount of taxes as much as you’d like, but you must know that for many lower income people, the child tax credit and the earned income credit easily cancels out the medicare and social security taxes they pay. You don’t need to listen to a talk show to figure that one out. And if you aren’t paying much in property taxes, you aren’t paying much towards public education.</p>
<p>Those who live in California might have the opinion that California is on the ropes because of massive government spending. Huge public entitlements, and massive amounts of money going to prisons and education.</p>
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<p>Yes. Financing a college education is not the same as financing a car, (which is a comparison that Suze Orman made). I don’t think so at least.</p>
<p>This illustrates my problem with Suze Orman, the few times I’ve seen her I’ve found her to be overly simplistic. Comparing financing a car with a college education is ignoring the nuances in what you get in return.</p>
<p>However, in this case I know she is right and Rebecca’s plans for college need to be more in line with what her parents can afford. But let us also remember there are worse things that a kid can do than want to go to college.</p>
<p>Well, in a strange way you can make the analogy to a vehicle. A vehicle becomes less and less “valuable” over time yet can still get the owner where they want to go. The college name has “less and less” meaning over time as the individual strengths take precedent over the degree and the college. The intangible is the valuation of how much difference does college A make over college B in the “future” capability of a given student. However, there are enough studies that show that it makes very little difference between two comparative individuals.</p>
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Those who live in California might have the opinion that California is on the ropes because of massive government spending. Huge public entitlements, and massive amounts of money going to prisons and education. "</p>
<p>Actually, I’ve gotten the impression that a large part of California’s problem is that the legislature can’t raise taxes without a referendum and thus they never get raised.</p>
<p>I don’t quite get the huge resistance to taxes in general, but that’s just me and for another thread.</p>
<p>“And you can pretend that everyone pays equal amount of taxes as much as you’d like”</p>
<p>Maybe because of statistics?</p>
<p><a href=“http://www.ctj.org/pdf/taxday2009.pdf[/url]”>http://www.ctj.org/pdf/taxday2009.pdf</a></p>
<p>Page 24 of <a href=“http://www.taxfoundation.org/files/wp1.pdf[/url]”>http://www.taxfoundation.org/files/wp1.pdf</a></p>
<p>No, it’s not equal, but it’s not so unfair to all you rich folk.</p>
<p>One of the reasons I don’t personally put much ‘premium’ on someone going to a big name Ivy school is for this very reason. Okay, they had good grades and scores but they also had the good fortune to either have wealthy parents or very poor parents. Employers, the media and a lot of people on CC should recognize that fact. The fact that someone went to a big name school should not be looked upon as though they are necessarily the best or the brightest. </p>
<p>So when I hear that a certain person went to HYP or some other big expensive school, I just shrug. Big deal. Kids who are just as intelligent and hard working went to state school because their moms and dads were not wealthy or poor. Just middle class and SOL on scholarship help.</p>
<p>Suze may be obnoxious and overly simplistic, but frankly when I hear her callers describe their financial situations and, in spite of debt, no savings, etc. what they think they can afford, I’m glad she’s there to tell many of them that they are way off base. Many elements of society are “telling” people that they need pricey things, including pricey educations. Suze is there to tell them that they can’t afford it, and they shouldn’t shove the costs onto their kids to gratify their egos. Some people like to have permission before they decide about things, and Suze is giving people permission to buck the ‘gotta have it no matter what it costs’ trend.</p>
<p>In the end, it would benefit all of us if we all lived within our means.</p>