<p>@HImom:
“I have heard of med students who aren’t concerned that they are racking up debt of $200K and expect to declare bankruptcy after med school, expecting these loans to be discharged.”</p>
<p>Just want to say that intentionally planning to rack up debt with the expectation to declare banckruptcy is amoral and fraudulent behavior. It really surprises me how many people thinks that this is okay.</p>
<p>
</p>
<p>And where do they think they are going to live? Their credit scores will be poor for many years. They can’t get a house or an apartment without a good credit score. Even many employers check credit scores.</p>
<p>But you can’t discharge student loans in bankruptcy - do these med students not realize this?</p>
<p>A relative says she has a classmate in podiatry school who is “living large” on her student loans, including fabulous trips to Europe & elsewhere, a new car with all the bells & whistles, etc., while she’s a podiatry student. The relative declines to participate in lavish outings and has tried repeatedly (& unsuccessfully) to remind her that the loans need to be repaid & should be kept as low as possible. She’s given up trying to reason with this woman but can’t imagine that this will end well. The classmate reasons that all loan monies she gets are hers to do with as she chooses & she’s been deprived all her life & will make boatloads of money when she graduates (or if she doesn’t will be happy she enjoyed these great times while she could). Wow!</p>
<p>Med & podiatry students ARE SUPPOSED to be VERY BRIGHT! If this is the thinking of some of these young people, I can understand why there are so many who are accumulating crushing debt.</p>
<p>My friend’s daughter’s fiancee has a boatload of loans ($100k ish) for undergrad school and bought my friend’s daughter a $3500 engagement ring using student loan money. They couldn’t understand why my friend was so horrified as they thought they would be making such a lot of money on graduation. Now they have graduated. She is a nurse making a reasonable salary (her Dad is loaded so she has no debt). He does not have a job yet (and her Dad’s side of the family, who previously thought he was just the bee’s knees because he graduated from a “name” school, have now decided she should dump him because he has no job yet and has so much debt). I think reality is beginning to hit.</p>
<p>It is a beautiful ring though :rolleyes:</p>
<p>There are a lot of rules & conditions for the forgiveness program:</p>
<p>[Obama</a> Student Loan Forgiveness](<a href=“http://www.simpletuition.com/student/obama_student_loan_forgiveness.html]Obama”>Student Loan Forgiveness: Relief Programs As Payment Restarts)</p>
<p>It’s worth a read and as it exists is GENERALLY capped at forgiveness of up to $45,000 after 20 years of on-time payments.</p>
<p>I think outstanding debt (whether from student loans, child support, alimony, car payments, or other) will be at least one factor considered by prospective in-laws, if it isn’t already. It was certainly something one of my relatives has considered in her Ds’ serious suitors (in thinking about encouraging or discouraging the matches).</p>
<p>
</p>
<p>For FEDERAL loans only. This means the 200k is likely not going to get much, if any, relief.</p>
<p>
</p>
<p>Thanks for clarifying that.</p>
<p>There are folks regularly posting on CC talking about blithely taking $100K-$200K in debt for undergrad & who knows how much for grad or professional school & getting very defensive & offended when folks try to suggest it is crushing debt–how many more people must be thinking about these things in private?</p>
<p>Went to a “fair” for the police department. They had several “colleges” present with tables, U of Phoenix & some other U that I had never even heard of. They also had 24 Hour Fitness, Fitness Book Camp & several financial & insurance companies. I was the only organization talking about lung health and smoking cessation. It was pretty upsetting that there was so little about these issues. None of the other local Us or colleges were present, including our in-state U. </p>
<p>I also attended a Hawaii Primary Care Association Conference. Most of the vendors were hawking their electronic medical records systems there. It was mostly attended by administrators with very few people who actually delivered healthcare to the public.</p>
<p>I am troubled by the huge marketing budgets that are being used to push these Us & colleges & other costly products of dubious value to the public.</p>
<p>Oh yea, the loans covered under the forgiveness program are FEDERAL mostly.</p>
<p>Hasn’t the “welfare queen” thing been repeatedly proven to be a myth? (See, for example, the food stamp challenge last year where it was shown that people are <em>far</em> from dining in luxury on food stamp allowances).</p>
<p>I missed where someone claimed that people are living in luxury on food stamps. If you’re referring to my post, re-read it. I never made such a claim.</p>
<p>^^^^ Yes, that “welfare queen” thing seemed to come out of left field.</p>
<p>I assumed that it was in reference to a deleted post. Otherwise, it would make no sense.</p>
<p>“I have heard of med students who aren’t concerned that they are racking up debt of $200K and expect to declare bankruptcy after med school, expecting these loans to be discharged.”</p>
<p>I haven’t heard this twist, but I have heard the following …</p>
<p>High school students (and their parents) who think it’s ok to choose a pricey undergrad for pre-med, rack up huge debt for undergrad, then rack up MORE debt for med school…BECAUSE they think they’re going to quickly be making a very high salary and easily manage the $400k+ in debt.</p>
<p>
</p>
<p>This was the mindset quite a few years ago that, in large part, led to the changing of the bankruptcy laws to include private loans becoming non-dischargeable. It was becoming far too commonplace for medical interns, legal associates, etc. to declare bankruptcy shortly after finishing professional school (while their incomes were still fairly low) and ridding themselves of the requirement to repay their school debt. Must’ve made for some great water cooler conversation among these “professionals”.</p>
<p>^^ med school education still has some options that many others don’t. There are hospitals who have a hard time attracting physicians who pay off loans in return for staying on the medical staff, but the choice of locations is obviously poorer.</p>
<p>Quote:
This might be the first step in a market cycle but it would mean that
colleges would lose pricing power or go out of business so they would
have to learn to operate more efficiently or go out of business. </p>
<p>Not necessarily… Even without government backed loans those with the income or savings to pay full freight will still do so, those with established credit will be able to get private loans, those with retirement funds or mortgages can borrow against their assets - a college degree is something we’ve been taught is something we need to provide for our children and those with the means will continue to provide it.</p>
<p>There will still be school and private scholarships to help a small percentage of lower class students, but for the rest of those lower class students that don’t have the income or the ability to secure loans without government backing, we’d just ensuring a college education is no longer an option for them.</p>
<p>What percentage of student loans go to students/families that wouldn’t qualify for private lending? Do you really believe it is a large enough number to impact the institutions or just being hopeful?</p>
<p>
</p>
<p>There ARE an awful lot of colleges out there, and pricing is set at the margin. I also read that the annual number of high school graduates recently peaked.</p>
<p>A lot of middle-class families have lost substantial home equity in recent years or have had a spouse that was laid off or had to take a lower-paying job. It may not be easy for them to qualify for new additional loans.</p>
<p>A mere ten percent drop in demand could well get vulnerable colleges cutting costs and scrambling for students – the ones in the grey middle: not the cheapest and not the most elite.</p>
<p>
</p>
<p>That depends on how you define “college education”. Far too many people assume that they somehow have a “right” to attend a 4-year university, live on-campus with a meal plan, wireless internet, and cable TV. When did a college education become confused with the full Monty college experience?</p>
<p>Our local CC here offers several associate degrees, fully transferable credits, and a dual-enrollment program with the regional branch of our state flagship university. It’s an option which quite a few of our D1’s HS classmates chose to begin their college careers. Annual tuition is just under $2300. Their net price calculator allocated about $1100 for books and supplies, which would leave $2100 for transportation and personal expenses for a full Pell student living at home and commuting. So even if Stafford loans were to suddenly go away, there would still be viable options for students to get a college education. Is it the full-on 4 year university experience everyone WANTS? Nope, but it’s certainly a means to the college education most would agree everyone NEEDS. It would require effort and sacrifice on the part of the student, but what’s worth having these days that doesn’t require that?</p>
<p>Does every student in the country have access to similar options? Probably not every one, but the majority probably do. People need to stop thinking they’re somehow entitled to a 4 year live away college experience and start realistically evaluating ALL the options they have available to them. In the words of the great philosopher Jagger…if you try sometimes, you might find, you get what you need.</p>
<p>
To be honest, they shouldn’t be paying for my service (and can get it for free once a week as an IRS sponsored tax clinic at our library, though I can’t tell them that once they walk in the door). They pay our fees out of their refund, and don’t trust the free services - at some of them “you get what you pay for.”</p>
<p>These are the same clients, who couldn’t be talked out of taking refund anticipation loans, rather than waiting 2 weeks for their refund, like everybody else. Many don’t have bank accounts, and pay 2-3% every time they cash a paycheck at the local pawn shop, unless they’re lucky enough to live near their employer’s bank, who might cash it for free (even Walmart charges $3 er check. I have changed the lives of a small number of clients, who are coachable, but so many don’t understand money, and have no desire to understand. These are the ones whose kids end up at the for-profit schools who will accept anyone who can qualify for federal loans. </p>
<p>So while I dislike cutting off all low-income students from loans, I think something needs to be done to discourage the abuse (by the colleges, not the students). As much as they are victims of circumstance, I believe anyone who signs a loan should be responsible to pay it off. If that means the only low-income students going to college are the ones who qualify for grants instead of loans, perhaps it will encourage low income families to help their students do so. It seems that same should apply for middle class students as well. I’m against loan forgiveness, except as an incentive to take the jobs nobody else seems to want - teaching in the inner city schools, for instance. </p>
<p>We know what we can afford, and have told our children we will not cosign any loans - those belong to them. We have also told them how much we can pay toward their education, and they should be afford something food - including HYPS if they get in (at least according to their net price calculators).</p>
<p>I find it offensive that families with similar income to ours, who have chosen not to save, or to forego certain lusuries, would expect not to be held accountable for their loans. I don’t think the current FAFSA formulas are particularly fair, but they are what they are. If those families have to take out loans, because they can’t come up with the money any other way, I don’t think the rest of us should end up paying them off for them.</p>
<p>Perhaps we need a new type of insurance policy, similar to mortgage insurance. (Actually it already exists for certain private loans). Pay your premium, and if you can’t make your loan payments, the insurance kicks in and pays it for you. Of course it would drive the cost of those loan/insurance combo even higher, but maybe it would get some small portion of families to reconsider.</p>
<br>
<br>
<p>The nature of bubbles is that they get bigger and bigger and bigger
until they pop. We had that in the internet bubble where people bought
stocks on margin. Then we had that with houses and we’ve been left
with an incredible hangover that may take to the end of the decade to
resolve.</p>
<p>Yes, I heard that housing was unaffordable so make the loans easier so
that people can borrow more money. And then we came crashing
down. Were those crazy loans helpful to those that used them? Did they
help the poor or did they make a lot of people poor?</p>
<p>What are we going to say when college prices are $160K per year? Yes,
that was discussed in another thread on this forum. Are we going to
continue to inflate the student loan bubble to home mortgage levels?</p>
<p>There are mechansims that individual schools can use to provide access
to the poor. That’s how I went to school way back when.</p>
<br>
<br>
<p>I’d suggest reading Mauldin’s piece on how the graduate degree is
becoming the new bachelors degree. I think everyone knows the fairly
dire circumstances of the class of 2012 and that there are other
options besides college as a way to make a living.</p>
<p>To deal with your argument, though, there is a limited amount of money
available when the government steps away. People could use other forms
of debt, but would they? You can see the trends already where parents
are pushing more of the responsibility of college costs to their kids
pushing them to take more loans and spending less of their savings and
retirement.</p>
<br>
<br>
<p>Well, we’re getting there with the current approach too.</p>
<br>
<br>
<p>I study and trade in bubbles. Lots of fun when you’re on the right
sides of a bubble. Bubbles are typically debt-fueled and the growth
in college prices can’t be fueled by anything other than debt.</p>