<p>A person with a college education clearly has an advantage over those with only a high school diploma or less, but it is no guarantee of security. The Georgetown Center on Education and the Workforce published a study last week highlighting the problems.</p>
<p>But that graph only tells part of the story. “As the Washington Post’s Dylan Matthews has pointed out, the Georgetown report misleadingly sandwiches together plain-old bachelor’s degree holders with workers who have a master’s, doctorate, or professional degree. And according to data Matthews cites from the Economic Policy Institute, between 2007 and 2011, 98.3 percent of the job gains in that combined group went to the advanced degree holders. These days, it seems we’re really in a grad school economy.” (The Atlantic)</p>
<p>I have never understood the point of co-signing a loan for a person with worse credit than myself. If you’re going to do it, just take them out yourself in your own name and benefit from the (likely) better terms. Since you’re theoretically on the hook for the loan anyway if the primary borrower can’t pay, then you should just go ahead and get the best deal possible in your own name. </p>
<p>Parents who are unwilling to borrow the necessary money to fund their children’s education should not co-sign their children’s loans. Then we wouldn’t read these “I’m 200K in debt for an NYU degree” sob stories in the NY Times.</p>
<p>There needs to be more mandatory education BEFORE the loan is issued or signed so that parents & kids understand that these loans are NOT “free money” and that everyone who signs will be on the hook to pay it back.</p>
<p>There should also be caps on how much can be borrowed & whether folks can even qualify to borrow when they have no assets, no job, nothing but hope and promises of “education.” OK, climbing off my soapbox now. ;)</p>
<p>A friend of mine told me that the terms of her Ds private loans are that she can be removed as co-signer after two years of on time payments. Boy, I hope so.</p>
<p>The college process is designed to funnel the student and parents into a choice of their school releasing information and awards to promote that funnel. If they threw up a bunch of cautions at the front-end, they might be less successful at recruiting. That’s not the way you do sales.</p>
<p>I stood in line with my son when he was going to pick up his cap and gown and it was a fairly long line. There were tables along the way with people selling things. There was also a lady that was going through the line asking students to sign up for loan exit interviews. She got to him and asked if he had any student loans. He said no. She then asked him: “Are you Sure?” I didn’t want to spoil the moment so I didn’t say anything. But I’d guess that the vast majority at his school did take out loans. They’re certainly eager to do the counseling after you have taken out the loans.</p>
<p>Yea, I understand that lenders wouldn’t want informed borrowers, but it should be REQUIRED so folks can’t claim ignorance & it should be required of EACH PERSON who is signing & co-signing. They should also have to provide a proposed repayment schedule for the loan–amounts & duration PRIOR to signing, much like we get before signing a mortgage.</p>
<p>All of us without loans condemning those with loans. I don’t know what process people go through. Scholarships lost and replaced by loans, costs increasing every year, sit down and sign without really getting an explanation of what is going on. It is easy to start, maybe “only” $10,000 the first year, but then you might need $20,000 the second year, $25k the 3rd year… $40k to graduate with… oops! $100k total in loans! and once you start how can you stop? Leave college with debt and no degree? In some cases it is probably unfair to blame the ignorant borrower. </p>
<p>Also there is a huge difference between cosigning a 1 year lease and student loans.</p>
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<p>I just cosigned my son’s lease in Boston. Fortunately his lease has him responsible for his portion of a 5 bedroom apartment. I cosigned for $850 per month, or $10,200. I told him I would not cosign a lease for the entire apartment, over $50,000!</p>
<p>I think nearly everyone understands that the loans need to be paid back, but in a vague sort of way. A lot of people don’t get how fast interest can pile up, how unlikely it is that a new graduate will land a $250,000 job the first year they graduate, etc.</p>
<p>Students, in particular, can be really money-stupid. I went to college as a nontraditional student, and was amazed by the many and varied ways that students got into money trouble. (Credit card debt, etc.)</p>
<p>Yes, I feel individuals should be responsible for their finances. But I also feel banks and other loaners have a responsibility to act in good faith . . . To realize that a lot of people’s knowledge of student loans stops at “I’ve heard everyone takes out student loans so it must be a good thing to do, and I guess I will have to pay it back someday?”</p>
<p>A couple press clippings along the lines of “my $50,000 loans exploded into $100,000 and I am still paying it off at age 50” would be a good start.</p>
<p>I honestly don’t feel that a lot of people have a handle on how long repayment will be and what their budgets once they graduate from college are likely to include. This is especially so in families who have never had a loan or mortgage. The abstract, “Of course, I’ll be earning tons of money after I get my magical college degree so I will have no problem repaying,” is the common thought without any realistic idea of how much that will be monthly for how many years. Good intentions and unrealistic assumptions about how marketable their bachelor’s degree will be WON’T pay the loans. </p>
<p>I don’t see this as any condemnation, just a reality check that isn’t a part of the current process of college apps & getting financing for the dream U.</p>
<p>My daughter personally knows somebody who borrowed $160K for finance his education. Of course, he had to move back home, but jobs in his field are near his dream U.</p>
<p>What? Victim means there was a lack of consent about what was going on. You consent to signing loans. Unless there was fraud, loan co-signers are not victims. </p>
<p>And yes, you CAN blame students who have big loans. Really, you should blame the parents for being dumb enough to co-sign those loans for those children. You go to a school you can afford with Stafford loans or less. It’s not always pretty or easy but it’s DOABLE.</p>
<p>I know someone going 160k in debt for a dance degree! All of us know this is going to end horribly but both she and her parents are deaf to our pleas to think it through. We all know it’s going to end terribly but they just don’t care. “But it’s her dream!” Of course now she’s a senior and looking for a job come graduation. We think it’s finally hitting her too late.</p>
<p>We have a friend whose D got a good aid package + lots of loans to get a degree in BALLET at OOS private (never even knew such degrees existed). She injured herself & can no longer dance. Had to go into MORE debt at in-state flagship to get a degree in early childhood/education so she can get a job & help pay down her debt. Of course, she has also moved back home.</p>
<p>Yes, people are victims but the students & families and homeowners who take on loans they can’t repay bear some of the blame, as do lenders who encourage this over-extension of credit. At some point, people have to take responsibility for their own actions/inactions, even stupidity. If they don’t get loans/credit, they cry “discrimination” and how they are prevented from having these opportunities.</p>
<p>I went to an event put on by our state Department of Health, where one of the main speakers told everyone that it isn’t enough to help find housing for everyone (which our state is falling short in anyway), but we also HAVE to provide lifetime support services for EVERYONE who needs it. At what point, do people take responsibility for themselves and acquire the skills/resources to be self sufficient? It is very troubling to me, even though I am currently in public health/health promotion. Am seeing less and less self sufficiency and individual responsibility. Everyone has a “victim” attitude and their hand out. This is not how we build a strong society and community.</p>
<p>. A lot of people don’t get how fast interest can pile up, how unlikely it is that a new graduate will land a $250,000 job the first year they graduate, etc.</p>
<p>That’s the problem with low income families taking out Plus loans with the promise that their “smart college bound kid” will pay it back. They wrongly assume that the child will land a well paid job (maybe not THAT much), but when you’re low income, even $50k per year job can sound like a lot…especially if the amount is for a single person.</p>
<p>What these families often don’t realize is that as low income folks, they often really aren’t living on their low salaries. They may get food stamps, or their kids get free meals at school. They may get discounted housing/utilities. They also don’t pay any fed taxes and may not pay any state taxes. They also may not have jobs that require a rather costly wardrobe or a decent car. So, they don’t realize that their single child with his first “real job” is going to see a large chunk of his check go to fed taxes, state taxes, maybe healthcare…not to mention all of his living expenses. He won’t likely have much left over each month to put towards big debt. </p>
<p>Their kids don’t understand it either when the promises are made. They think, my whole family is living on $30k per year. I should earn at least $50k when I graduate, so I can easily pay $20k towards loans and live on the remaining $30k.</p>
<p>Our kids were required in 9th grade to pick a job & hourly rate of pay out of newspaper ads & write out a REALISTIC budget of how much they’d have to pay for housing, food, transportation, taxes & other expenses out of that budget. It made them realize very quickly how much money they would need to make to have the lifestyle they have enjoyed thus far in their lives.</p>
<p>You are right that many of the lower income families do NOT have a realistic concept of how much money it costs to maintain a middle-class lifestyle without any government assistance. It is a real eye-opener but comes too late (after loans have already been taken out, leaving the graduate under crushing debt, IF the kiddo does graduate and get a job).</p>
<p>I was smart enough not to co-sign loans for my law student. He went to a state school and even lived at home for two years to save money. He held a part-time clerkship to earn money for books and expenses. Even so, he’s at $100K in loans and interest from graduate school. This is not a kid who was a liberal arts kid who just went to law school because he didn’t know what else to do – it had been his planned career path since childhood.</p>
<p>Three years ago, his law school was saying that approximately 85% of its students found employment within 9 months after graduation. My kid knew that he’d have to struggle to pay the loans back, but also knew a few young lawyers who were doing it. He thought he was prepared for the struggle, and was prepared to defer home ownership etc. because of the loans.</p>
<p>As a result of the declining opportunities for law students and the initiative to force schools to be more accurate about their reporting, his school is now disclosing employment statistics that are closer to 55%. Even those statistics are inflated, since they include new graduates who are doing temporary document review and part time legal work. Some of his classmates are painting houses and bartending.</p>
<p>No, I didn’t sign his loans but I also don’t know how I can stand by without trying to help. </p>
<p>My points are (1) that sometimes when loans are taken, circumstances change. Foresight, unlike hindsight, is not always 20-20. (2) Not being a legal co-signer doesn’t mean that a parent isn’t going to be faced with the consequences of the loans anyway.</p>
<p>Mom2CollegeKids made some excellent points. I agree with her completely. Even middle class kids don’t understand the cost of living. With family plans for phones, discounted fleet insurance for family cars, bulk shopping for families of Costco, etc. they don’t always understand that there’s a premium on independence.</p>
<p>I was surprised and saddened to see a young attorney who was waiting tables in addition to holding down a full-time, very demanding job working for the city & county (I believe prosecutor’s office). She said she had to repay her student loans & the salary she was getting working 60+ hours/week as an attorney wasn’t enough. It is very, very hard these days when huge debts are incurred. Many places are cutting staff and salaries. Not a good time to incur greater liabilities. </p>
<p>My niece had the opportunity to go to in-state law school or private OOS law school with merit award. She chose in-state & is VERY happy. She was able to graduate debt-free, got a car & was able to buy a house with her husband (even though he had significant debt). Being in-state helped her make good connections in the local community & land an excellent internship & job with a great firm.</p>
<p>Niece & her H are paying off H’s loans, as well as their mortgage. Her job pays A LOT better than his. They met in law school. She did everything she could to minimize debt but still ended up marrying it! ;)</p>
<p>I’m glad to see the majority of posters here advocating personal responsibility for the borrowers. Nobody held a gun to these borrowers head and made them sign paperwork for loans they should’ve known they couldn’t afford. If they don’t educate themselves first, exactly who else would you blame? Caveat Emptor…“if something seems too good to be true”…any of these ringing a bell?</p>