<p>Educational debt is a choice. The borrower is to figure out the cost and decide if the benefit outweighs the cost.</p>
<p>Interest on educational debt used to be subsidized (deductible). This country ended the deductiblility of interest on educational loans and we tax income at lower tax rates instead. We made a trade off. Lower tax rates for fewer deductions.</p>
<p>ariesathena, and don't insult me with comments like do the math.</p>
<p>OK, I have a solution for the doctors. Almost free education, followed by civil service level income for their entire careers.</p>
<p>I know what you mean ariesathena. It's not all about choices. My mom thinks that clipping coupons for the grocery store would have gotten us a bigger home or a car or paid the CMU tuition! Of course, she also saves plastic bags and aluminum foil. She grew up in a different time, to be sure. I am shocked at the cost of tuition and dismayed at the amount of debt students and parents are expected to incur today. </p>
<p>I must admit, I would have been inclined to borrow more for my children's education if there was a larger tax deduction for such loans. This would be good for people like us who are not rich enough to afford it but not poor enough to get financial aid. I don't know much about tax law, but promoting access to education seems like a good thing to me.</p>
<p>"I don't know much about tax law, but..."</p>
<p>We have too much tax complexity and too many loopholes already, including those mentioned earlier for home ownership and quite a number of deductions, credits and other special provisions for education in general and student loan interest in particular.</p>
<p>I am the epitome of this article. I never led anything close to an extravagent lifestyle. I just had a slight drinking problem for many years, which accompanied with the salary of a security guard and expenses of a college student, can rack up a lot of debt quickly. I am around 20k CC debt and 15k student loans, but even just normal living expenses adds up really damn quickly. Paying all your bills on time is not an easy thing to do when you have 12 years of drinking debt and still pay for current expenses. And no I am not giving up my cellphone to pay off credit card debt. If people living in public housing can have cell phones, I deserve one also. It pi$$es me off to no end when people who miss every single payment on every debt they have ever had in their entire life get the same credit oppurtunities as myself when it comes to buying a house. They should bring back debtors prison for these people, or at least make their negative credit history permanent.</p>
<p>LOL. And hang on to that big screen TV.</p>
<p>Quote: "I deserve one also."</p>
<p>And there's the rub - no one DESERVES anything they cannot afford. It's thinking like this that will get you into debt and keep you there. (And which makes kids think they have to have $125 sneakers to be happy, but that's a whole different thread.) Pay off the debt and then get your cellphone, plasma TV, etc., etc.</p>
<p>Like many of the parents here, I graduated from undergrad with college debts, and then shoe-stinrged my way through grad school with a combination of more loans, working, and scholarships. When I got out there was a serious recession running (who remembers 1983?), so I did what our kids will do if the same thing happens to them: I moved back in with my parents.</p>
<p>When I got my first job, I stayed there for 18 months building the (small) base of capital required to get married and buy a (very, very small) house. </p>
<p>I'm surprised that no parents on this board have raised the "returning to the nest" option as a means of helping their kids to deal with some of their college debts. In my view, a heavily indebted recent grad is wasting money on rent. </p>
<p>Yes, it can stink to be home again, especially if you are ready to start a life with someone, or if one just thinks he "deserves" to finally be an independent adult. But the bottom line is that we "deserve" what we can afford, and knocking down some debt quickly can be a great life-lesson.</p>
<p>I agree with reasonabledad -- my nephew moved back into his parents home for a year after college, in order to save money for a house. His parents are paying his student loans (which were in the $35K range), and the house appreciated significantly in the 2 years he owned it. (He sold it when he got married.)</p>
<p>I'm not adept at providing links, but if anyone's interested, look at today's Boston Globe on-line to read a story about one person's problem with unpaid debt (student loans among them). It's the story about the candidate for lt. governor.</p>
<p>I graduated with debt (not an unreasonable amount, about what a new economy car would have cost at the time), worked 6 years and paid it all off before having children and buying a house. I could not live with a mountain of debt. Any student taking out a six figure loan is pretty much saying they can predict the future - that they will be healthy enough to pay it back. I've never had that confidence.</p>
<p>ARies--I'm not picking on you (I like you!) but can't you see that the choice to go to law school is one that you made despite lots of other choices? As I recall you are an engineer; back in olden times (the '70's) the engineering grads I knew all took jobs and worked for a couple of years to pay down the undergrad debt before heading back to grad school. People actually chose their jobs based on how generous a companies tuition reimbursement plan was. Many people worked full time and did grad school at night because they couldn't or wouldn't allow their undergrad debt to roll over into the grad school loans.</p>
<p>You have chosen the path you took-- which is great- but there were other choices you could have made as well with less severe financial consequences. I think these articles make a point that students today are loath to consider the lifestyle choices which only a generation ago were very common.</p>
<p>Tax deductibility of education loans would have two perhaps unintended effects:</p>
<ol>
<li><p>increase people's willingness to pay for education. That will further increase tuition and other college expenses, just as any shift to the right in the demand curve would.</p></li>
<li><p>afford the largest benefits to high income-bracket people. The higher the tax bracket, the higher the benefit of a deduction.</p></li>
</ol>
<p>"OK, I have a solution for the doctors. Almost free education, followed by civil service level income for their entire careers."</p>
<p>Here, here.</p>
<p>I would imagine that most people would almost happily undertake their educational debt in exchange for what amounts to a guaranteed return on their investment, with almost no business/employment risk, particularly when compared to everyone else in the working world. </p>
<p>Many people have big mortages,etc. and also no guarantee that they will be able to repay them, based on employment vagaries they are exposed to.</p>
<ol>
<li><p>Please don't insult me by pretending that I don't know that I chose this path.</p></li>
<li><p>Anyone who thinks that education is a "choice" that should be reserved for the wealthy should really return to the 19th century. Please.</p></li>
<li><p>Dstark: not to be too blunt, but if you write something stupid, I'm going to call you on it. You subtracted the tuitions, room, board, and expenses for four years of med school for two people from about $900,000 and ended up with.... $800,000. I do not know how on earth you would think that anyone can get through med school for $50,000. You were trying to make a point, failed, and then get cranky at me. Doesn't fly. </p></li>
<li><p>I missed the part where engineering companies pay for you to switch careers. Oh, wait... they don't. Professional school is on your own.</p></li>
</ol>
<p>What I'm hearing is that education is a "choice..." that you shouldn't choose unless your parents are paying for it. There is no reason why we should not continue investment in human capital in this country. There is also no reason why, with tuition fast outpacing salaries, we should not find new ways to encourage the lower social classes to seek education as a way to better their lives. </p>
<p>We've come very far in making education accessible to people of all social classes, but rising tuition rates and massive debt loads (taken on by young people) are fast undoing those gains. It is going to start being less profitable to be educated than to not be educated, with the result that:
1. Only the wealthy will "choose" education; and
2. Fewer people will seek out higher education -> oh, wow, what is that going to do for our country?</p>
<p>Someone of my generation, with a massive undergrad/grad debt load, is probably not going to encourage their kids to take on the debt and invest in themselves. Middle class people will stop wanting to be educated. That's not a good plan. </p>
<p>Education is a "choice" until you try to find a doctor, lawyer, accountant, or any other professional and realize that the only ones you can find are those whose parents were wealthy enough to put them through school - and you just can't find a good one. Education is a "choice" - but why do you think that everything is being sent overseas? Maybe the countries that are eating us for breakfast don't think that education is a choice and that people like me should just stay in their places and be content with lower-quality jobs and lesser educations. </p>
<p>Oh, liberal elitism. You'll never get over the gut-level "tax cut for the wealthy" to realize that
1. the 1970s (or whatever) model of tax deductions for educational benefits is about as applicable as.... oh, 1970s tuitions.
2. giving benefits to young people (and only young people who are paying for some of their education) will expand access to education, provide incentives for people of all social classes to educate themselves, and ensure that the professions don't become ghettos for the wealthy, any more than they already are. We are going to start reversing the trends of having more socio-economic diversity in higher education... but, wait, education is a choice, so it doesn't matter.</p>
<p>I didn't write something stupid. I had no idea your friends took out loans of over $300,000 each to educate themselves. I told you if I was wrong to correct me. I don't need your tone.</p>
<p>So you want tax breaks? In other words, you want a government handout?</p>
<p>Aries, I missed the part where the professions are ghettos for the wealthy. My internist paid for med school by signing on w/the Federal government, which paid his tuition in exchange for his service in an inner-city hospital after he graduated. My brother in law paid for law school by working full-time and taking classes at night. He passed the bar on the first try, so it doesn't seem to have held him back. My son's roommate is now paying for MIT via a ROTC scholarship. My current employer offers tuition reiumbursement for all employees who enroll in an accredited college or university, regardless of the couse of study, as long as the employee maintains a B average.</p>
<p>I know these choices are just not as popular as a wish that the "higher ed fairy" will rescue our young people-- but kids from middle income and disadvantaged backgrounds who seek an alternative to loading themselves up w/debt can still manage to find alternatives. Could you not have worked for a few more years before grad school to take a bite out of your undergrad loans before adding law school debt???</p>
<p>Ariesathena, I don't know where you're reading that education is only a choice if your parents are willing to pay for it. That's not the sense I get - but it is in fact a trade-off, and it's not a right. It requires sacrifice. Or you make the choice to go to your state-supported university, and state-supported medical school or law school for a much lower tuition than your doctor friends apparently made. The state supported system is there precisely for those who cannot afford Harvard. And if you choose to go to Harvard even if you can't afford cash and must take out loans, yes, that is your choice. And you must understand that your subsequent lifestyle will reflect that choice. You cannot have everything, and you cannot have something for nothing. (And by the way, who's going to pay for those tax cuts you want?)</p>
<p>I graduated with a six-figure education debt and three degrees. That's a choice I made. And in return, contrary to many of my contemporaries, I have never been to Europe; I take few vacations that do not revolve around staying with family; I own a smaller home. My d's high school class is going to France this April and my d isn't going - because we cannot afford it. But contrary to your statement, "Someone of my generation, with a massive undergrad/grad debt load, is probably not going to encourage their kids to take on the debt and invest in themselves. Middle class people will stop wanting to be educated" I will in fact encourage my child to do as I did. She knows that at least some of her education will be paid for by loans that she will be expected to repay. And she is making her choices and lists accordingly. Education is an investment; it's the other "stuff" that's not.</p>
<p>The wealthy always have had and always will have more choices (remember private elementary and high schools?). No tax cut will change that, and unless we want every school to be a public school, there will always be these disparities.</p>
<p>I am happy to be taxed to subsidize in state public schools so that students can have affordable tuition for 4 years.
I am not interested in subsidizing someones professional degree ( do we really need more lawyers? ;) )</p>
<p>I think that we should subsidize health workers and educators in areas that have difficulty attracting such, but I disagree that they need to be medical doctors- nurses, nurse practioners, Naturopaths are all professions that can meet community needs with out expense of doctors.</p>
<p>In Aries' defense, can anyone defend the mortgage deduction--also a government "handout" which accrues to the rich much more than to the less so, and, especially, can anyone defend the deductions for second homes or home equity loans?</p>
<p>Basically, these amount to ways for wealthier people to finance education and other things that the less wealthy do not have.</p>
<p>We accrued six figure educational debt--from state schools. We lived very frugally to pay them off-- not complaining, it was good training for us and for our kids. It did not affect our career choices--my H went into a medical fiedl considered at the bottom of the income level, and then plied that field in community medicine in places most people here would never go (sometimes he left his medical van to take care of bullet wounds outside it--I just hoped that the bullets were not still flying when he did so.) </p>
<p>I have no complaints for ourselves, it worked out fine, and my kids know how to live frugally, which means they have more choices.</p>
<p>But it did irk me that someone's second home was considered more important than a college education--at least, that's what our tax code says.</p>
<p>I have no undergrad debt. Zero dollars.</p>
<p>Yes, every cent of my debt is for law school.</p>
<p>Cheap law school. Like $15,000/year less than the other schools I was considering.</p>