View Full Version : Student Loan Forgiveness Act of 2012
Well, finally someone has put one up!
Representative Hansen Clarke (D-MI) has put forth a bill (http://hansenclarke.house.gov/sites/hansenclarke.house.gov/files/documents/1-pager%20SLFA.pdf)!
The Student Loan Forgiveness Act of 2012 | Rep. Hansen Clarke
Key Objectives:
Make student loan repayment both simple and fair
-- The bill would create a new “10-10 standard” for student loan forgiveness.
-----If you make payments equal to 10% of your discretionary income for 10 years, your remaining federal student loan debt would be forgiven.
-----If you have already been making payments on your student loans, your repayment period would likely be shorter than 10 years. The amount you have already paid on your student loans over the past decade would be credited toward meeting the requirement for forgiveness.
--The bill would ensure low interest rates on federal student loans by capping them at 3.4%.
--The bill would allow existing borrowers whose educational loan debt exceeds their income to break free from the crushing interest rates of private loans by converting their private loan debt into federal Direct Loans, then enrolling their new federal loans into the 10/10 program.
--The bill would reward graduates for entering public service professions like teaching and firefighting. It would also provide incentives for medical professionals to work in underserved communities. It would reduce the Public Service Loan Forgiveness requirement to 5 years from its current 10 years.
Jumpstart the economy and create jobs
--The bill would increase millions of Americans’ purchasing power by forgiving debt,
reducing loan repayment burdens, and cutting fees and interest rates. This would free many of these Americans to invest, buy homes, and start businesses.
--The bill would create jobs by increasing consumer demand for goods and services.
Send a lifeline to student borrowers who have fallen on difficult times
--Many Americans who have fallen behind on payments due to illness, unemployment, or divorce face continually rising interest rates and compounding fees with no hope of escape.
-----The bill seeks to ensure that no one will be pushed into poverty because of a stroke of bad luck.
-----Americans who are behind on their payments would be eligible to enroll in the new program and bring their payments down to 10% of discretionary income.
Promote financial responsibility in higher education
--While current borrowers would be eligible for full forgiveness under the plan, future borrowers would be subject to a $45,520 cap on forgiveness (based on the average overall cost of a four-year degree at a public university). The aim is to incentivize students to be mindful of educational costs and for colleges and universities to control tuition increases.
--Provisions of the bill itself would be financed by projected savings from Iraq and Afghanistan Overseas Contingency Operations; the bill would not affect funding for existing student aid programs.
I reformatted because I couldn't get the PDF to look the same.
I feel so foolish not not borrowing money I'm not paying back. Damn I keep missing these loan forgiveness opportunities.
Oh, and as far as "promot[ing] financial responsibility in higher education" :laff: :laff: :laff:
Once the "cap" is establsihed in legislation, all the Higher Ed lobbyists have to do is to shoulder Congress to constantly move it upwards. And note it is a cap on FORGIVENESS --NOT a cap on that which can be borrowed. The latter would actually be a step in the right direction toward fiscal responsibility but this bill isn't interested in doing that.
Zoe, I will have to ask the obvious in your case: how will the U.S. forgiving your debt benefit the U.S economy?
[QUOTE=Iris lily;73202]I feel so foolish not not borrowing money I'm not paying back. Damn I keep missing these loan forgiveness opportunities.
[QUOTE]
Agreed. Don't borrow it and you don't have to worry about paying it back.
Also, why are politicians consistently trying to promote "public service" positions? In many cases, those jobs pay better than market already.
ApatheticNoMore
3-20-12, 5:08pm
college education for only 10% of your income for 10 years? Wow what a deal, I'm serious, bargains like that are hard to find.
I would rather they restructure the amortization. I'm paying back my DD's loan, and for 4 years I've been paying interest only!!! In my little Excel spreadsheet ALL my other debts have a nice downward trendline--except for this bugger. And if you DO pay extra, it doesn't do anything to the reduce the principal.
I should probably refinance. But it would be nice if "they" would do something about it.
ApatheticNoMore
3-20-12, 5:19pm
Agreed. Don't borrow it and you don't have to worry about paying it back.
Well the thing about a straight forward up front government program like say state funded colleges is it's straightforward, there are no special rules, special criteria, unanticipated bonuses that some people might qualify for and others not etc.. It's amazingly fair and above board really. Not a question of: 10 years down the road will I curse myself to no end for not having gone to school and gotten this forgiveness etc., for a program I couldn't even anticipate would exist?
Also, why are politicians consistently trying to promote "public service" positions? In many cases, those jobs pay better than market already.
If you actually plan on getting a pension it's a great deal (though it is doubtful some of those pensions will ever be paid), even without that with all the perks it generally is a much more favorable deal than private sector work IMO.
college education for only 10% of your income for 10 years? Wow what a deal, I'm serious, bargains like that are hard to find.
Worse than that. It's 10% of your DISCRETIONARY income.
Worse than that. It's 10% of your DISCRETIONARY income.
Stop it!!!!!! I can't stand it! Can we GET any stupider?
...Also, why are politicians consistently trying to promote "public service" positions? In many cases, those jobs pay better than market already.
More little goobermnt employees translates into a net gain at the polls for the pols who hand out those goobermnet employee goodies.
Stop it!!!!!! I can't stand it! Can we GET any stupider?
I think the "drop bales of $20 bills from helicopters over universities and shopping malls" plan is overall a lot simpler.
http://farm3.static.flickr.com/2473/3709537039_d9087487b0.jpg
Zoe, I will have to ask the obvious in your case: how will the U.S. forgiving your debt benefit the U.S economy?
We currently have assets in the economy. We would have more assets in the economy as well (in the form of investments) which is part of the equation.
Yes, I wish I hadn't taken out student loans. Unfortunately, I was young, naive, and stupid at the time -- I honestly wasn't thinking and I bought the bill of goods that I would easily be able to pay it all back!
As I said, I've paid off 1/3. I am continuing to pay it off. But if I can benefit from this, why wouldn't I seek to benefit?
The only loans outstanding at this point are federal loans. I've tried every which way to get into the best financial position I can with them, and as I said, I'm still paying them off.
But hey, I don't see why I shouldn't benefit from a plan like this, when banks get bail outs.
(and yes, I noted that about the cap. I think it's a good idea, to be honest -- if there's going to be a program, there should be a cap!).
flowerseverywhere
3-20-12, 7:04pm
I'm a triple idiot. Not only did my parents go without a lot of things to put us through college I worked extra weekend shifts and doubles as a nurse to put my kids through so they had very little debt which was not fun as you can imagine.
and I paid for my house early and didn't move up when everyone else did so no mortgage help here.
Now they will probably means test my social security because we saved and lived frugally and they are busy giving money away hand over fist for all kinds of programs and the money will come from somewhere!
triple Duh.
I would rather they restructure the amortization. I'm paying back my DD's loan, and for 4 years I've been paying interest only!!! In my little Excel spreadsheet ALL my other debts have a nice downward trendline--except for this bugger. And if you DO pay extra, it doesn't do anything to the reduce the principal.
I should probably refinance. But it would be nice if "they" would do something about it.
I had very similar problems. Right now, I have two options: pay off the whole debt at once, or continue to pay interest-only until I can pay the whole debt off at once.
I do put into a savings account each quarter to pay off this debt in full. THen, when my CD comes due, I roll this money into it. it's a 12 month CD. Then, i keep adding to the savings account and so on. At the current rate, I'm looking at 7 years until I have enough paid, plus then paying the interest each month.
I've been paying interest-only on the debt since 2005. If I also add the next 7 years to it, I will have paid $25,000 in interest.
Likewise, I've already paid off $35,000 in student loans, which had $1200 in interest in that one.
I would say that -- overall in the last 10 years -- I've done really well to pay back my loans!
Looking at the numbers that way, I actually feel good. :)
And, if I can get the money together in the next 7 years, that would be awesome.
I will be 42 when I pay off all my student loan debt. That's 20 years of debt repayment. That number doesn't make me so happy. LOL
goldensmom
3-20-12, 7:11pm
And to think that I worked and paid my way through undergrad/graduate schools without a loan of any kind. What was I thinking?
Worse than that. It's 10% of your DISCRETIONARY income.
This is already in play.
When a person falls behind in payments, or is heading into default, they can get on a program to get back into good credit (i can't' remember the word for this!), and it's based on "discretionary" income.
In my own case, when it finally went to the creditor (even though I fought it every step of the way because I was making payments), they contacted me to set up a payment program.
This was based on my discretionary income. I supplied my tax forms -- and a copy of my monthly bills for 6 months. As I live simply, there was not much on there. My tax forms also showed what were business expenses (such as transportation costs -- maintaining the car, gas, etc; clothing and equipment and so on).
Then, the payment was based on that.
What is *very* interesting is that the interest payment was actually HIGHER than the amount I could afford to pay (and therefore, that they could go to court and garnish), and so they actually adjusted my interest rate. I was able to "lock in" to that (via a new contract) that asserted that so long as I made the monthly payment by auto-payment, then they would keep me at that rate.
Today, I still pay the same rate (even though I could pay more and pay down the principle), but the company will not allow me to do so.
Why?
Because the debts are bundled and then sold as investments. The more principles that they hold wherein they are getting money (rather than them being paid off), the more money the company makes from those investments.
Having me pay off the debt would hurt their bottom line -- as the investment would be gone, paid off. The whole thing hinges on me *not* paying it off, but continuing to make payments of some kind (interest).
Which is why I'm stuck with either A. making payments for the rest of my life (luckily, debt cannot transfer in death) -- which is effectively indentured servitude -- or B. saving up to pay the debt off entirely in one go (as per what they demand).
Today, I still pay the same rate (even though I could pay more and pay down the principle), but the company will not allow me to do so.
Why?
Presumably the "no early payoff" clause was contained in the renegotiated loan contract that you signed of your own free will?
I really find the sanctimoniousness off-putting.
There are a lot of people "out there" who are not stupid, non-working people who want a free ride. I simply see this as beneficial (as is the other student loan bit that came down recently -- Obama mentioned it in a speech some months ago and I didn't qualify for it! :) ) for myself as well as the economy.
I said in the beginning that debt forgiveness was a good idea -- as we can see evidenced in Saudi Arabia and how it managed to help the economy and the people there. And also, how it set up interest-free loans and other opportunities for the common people as part of the economic stimulus.
I may not even qualify, once this process gets going -- just as I didn't qualify for the other recent changes.
But what I really dislike is the idea that I am a slouch.
I had no undergraduate debt. Working, scholarships and grants, as well as my parents paying for it and a generous subsidy from my grandmother for my living expenses made that possible. I was lucky in that I only had to work about 10 hours a week to make this happen, but I still worked and I enjoyed that part of my experience.
In graduate school, I received scholarships and grants -- which came to roughly 1/3 of the total tuition/fees costs -- and my parents contributed 1/5 of the total tuition/fees costs. I also worked which paid my living expenses, transportation, books, and materials (not part of the costs).
The loans covered only 47% of the expenses of law school. And I went to an inexpensive school, relatively, and graduated on time.
Of that remainder I've paid 1/3 of it, and I've paid the interest too. That loan wasn't consolidated with the others -- which is why I was able to pay it off. I do not know why it wasn't consolidated with the others -- as my paperwork clearly consolidated it, but whatever. At least some of it is paid off!
The remaining 2/3 is currently held by the credit company -- and I estimate I'll pay it off in 7 years at my current rate.
If I do not qualify for this program, I have no problem continuing on this path.
I will have paid off my student loans in 20 years -- which isn't bad considering most of my friends are still paying off their loans as well, and not nearly as aggressively as I have. Most of them will be paying theirs off for many years to come besides that.
And some of them may never pay them off -- I do not know. And most of them do work as lawyers.
If we were to qualify, then
Admittedly, I'm shooting to pay off this debt in 5 years or less. I'd love to do it in 3! I am aggressive about it as I possibly can be.
I work hard, we live simply, and so far 2/3 of our "discretionary income" (which is to say that which we put into savings, as the rest of it is fixed expenses) goes towards this. The other 1/3 goes to paying us back from our investment here, or in slightly increasing our quality of life (such as being able to buy more fresh fruit/veggies and less frozen).
I don't think I'm going to make it in 3 years, though. :( I do think it will be closer to 7.
---
And to flesh out more in regards to investments -- we would like to franchise the business into the US (and possibly move back carrying a franchise of our own), as well as own property there, as well as continue to grow our retirement IRAs and mutual funds.
Currently, we run two savings accounts, two checking accounts (one from which my auto-payment is made, the other is the fund that holds the money that I'm saving to pay off the debt until I roll it over into the CD that I hold to get higher interest on that money so that I can earn more on it and pay off the debt that much faster -- every dollar counts!), an IRA with mutual funds, and several CDs in the US. I understand that all of these things benefit the US economy.
I don't know if I want to live in the US again, but I would like that option.
And, if we do not get the next visa for here (hoping that we do!), then we'll have to take the franchise back to the US, and do our very best to get it off the ground back there.
Likely, DH would go back to regular work, DS would have to go into longer pre-school (steiner pre-school/kindy), and I would work this business. We've invested too much not to carry the basics with us -- brand, web site, and so on -- and we'd likely be able to manage this office as a franchise for someone who would be interested in maintaining it.
But there it is.
Why debt forgiveness for student loans and not, say, car loans? Or home improvement loans? Or small business loans? Are tutions outrageous? Sure they are. But here, unlike a car or trip or any number of things you get a loan for, you are 'buying' something that will essentially never go away. Once you have that degree, you have it forever. You own it, and saying these kids need 'forgiveness' because, why? I don't get it. Ok, maybe help these kids restructure the loan so they can for sure pay it back, but forgiveness? Naw. If they are willing to get a 20,000 + loan for a car, and don't expect forgiveness for that loan, then they shouldn't expect forgiveness for buying a product that they will always have without much depreciation.
Now, more education towards the kid and parents at the front end explaining exactly what they can expect from that particular 'product' they are buying, that I can agree on. If we can require the government to mandate intrusive medical procedures on women in the name of 'educating' them, then we certainly can expect government mandates on the type of 'education' a prospective college student AND his/her parents will receive before starting on this path. I still believe a college education is beneficial in the long run. College graduates earn more over a lifetime than non college graduates, on the average, but that doesn't mean everyone shouldn't enter into this path without open eyes.
Education on the realities, yes. Forgiveness, no.
I really find the sanctimoniousness off-putting.
...
And I am angry and freekin' TIRED of the stupidity of everyone thinking that the gooberment money will stretch forever and will fund whatever pet program makes them happy. So it's off putting for you, ok,whatever.
Now, I would expect you, and do not think less of you, to take advantage of any loan forgiveness programs that OUR IDIOT POLITICIANS in Washington offer. They are the *ssholes, not you.
I'm a triple idiot. Not only did my parents go without a lot of things to put us through college I worked extra weekend shifts and doubles as a nurse to put my kids through so they had very little debt which was not fun as you can imagine.
and I paid for my house early and didn't move up when everyone else did so no mortgage help here.
Now they will probably means test my social security because we saved and lived frugally and they are busy giving money away hand over fist for all kinds of programs and the money will come from somewhere!
triple Duh.
Same here.
We currently have assets in the economy. We would have more assets in the economy as well (in the form of investments) which is part of the equation.
While I think that having assets in the economy is a boon to the economy, there have been too many Obama types who argue that those like you (and me) who just put money into financial instruments and who do not "spend" or "risk capitaol" are not really helping the economy. You are not spendiing money at a big box store in the U.S. so I'm not sure that your assests qualify for moving the U.S. economy forward. Don't know, ask the Obama pundits for sure.
...Now they will probably means test my social security because we saved and lived frugally and they are busy giving money away hand over fist for all kinds of programs and the money will come from somewhere!
triple Duh.
Of course we will be means tested for Soc Security, there's not other way to proceed. Sucks a big one. But it will be necessary.
Why debt forgiveness for student loans and not, say, car loans? Or home improvement loans? Or small business loans? Are tutions outrageous? Sure they are. But here, unlike a car or trip or any number of things you get a loan for, you are 'buying' something that will essentially never go away. Once you have that degree, you have it forever. You own it, and saying these kids need 'forgiveness' because, why? I don't get it. Ok, maybe help these kids restructure the loan so they can for sure pay it back, but forgiveness? Naw. If they are willing to get a 20,000 + loan for a car, and don't expect forgiveness for that loan, then they shouldn't expect forgiveness for buying a product that they will always have without much depreciation.
Now, more education towards the kid and parents at the front end explaining exactly what they can expect from that particular 'product' they are buying, that I can agree on. If we can require the government to mandate intrusive medical procedures on women in the name of 'educating' them, then we certainly can expect government mandates on the type of 'education' a prospective college student AND his/her parents will receive before starting on this path. I still believe a college education is beneficial in the long run. College graduates earn more over a lifetime than non college graduates, on the average, but that doesn't mean everyone shouldn't enter into this path without open eyes.
Education on the realities, yes. Forgiveness, no.
The difference between student loans and all those other loans is that the others can all be absolved by bankruptcy. Small biz fails? Declare bankruptcy. Education doesn't result in a decent job? Slave away at some lower paying job to pay on the student loan until you die.
Zoe, I will have to ask the obvious in your case: how will the U.S. forgiving your debt benefit the U.S economy?
Obviously Zoe's case is special, but on a broader scale I think her point is valid. And, she could certainly make the argument that it was the stiffled economy in the US, caused by things like excessive student loan debt overall, which caused her to expatriate herself in the first place. She's mentioned before that one of the big reasons for her family's move was because they saw more opportunity elsewhere.
If I had to identify the two biggest things that prevent innovation and new business startups in the US economy today I'd say they are student loan debt and employer-tied health insurance. The first forces new grads to take "steady" jobs because they've got a big debt that needs to be paid. The second keeps older workers tied to their jobs in big companies because they need affordable health insurance. Whether student loan forgiveness is the best answer is debatable but something needs to happen if we want to continue to have an economy that's competitive in the global marketplace.
It's also equally apparent to me that the ever increasing student loan debt-load of the average college grad today will have long-term negative ramifications for the housing market, as many who graduate will be paying off student loans for the forseeable future rather than being able to purchase homes.
If I had to identify the two biggest things that prevent innovation and new business startups in the US economy today I'd say they are student loan debt and employer-tied health insurance. The first forces new grads to take "steady" jobs because they've got a big debt that needs to be paid. The second keeps older workers tied to their jobs in big companies because they need affordable health insurance. Whether student loan forgiveness is the best answer is debatable but something needs to happen if we want to continue to have an economy that's competitive in the global marketplace.
It's also equally apparent to me that the ever increasing student loan debt-load of the average college grad today will have long-term negative ramifications for the housing market, as many who graduate will be paying off student loans for the forseeable future rather than being able to purchase homes.
I don't deny this, you've made good points. But we can't wish the debt away. Oh wait, I guess we can--poof! It's gone.
Sign. whatever.
It's also equally apparent to me that the ever increasing student loan debt-load of the average college grad today will have long-term negative ramifications for the housing market, as many who graduate will be paying off student loans for the forseeable future rather than being able to purchase homes.
Yes, I had a colleague with 90,000 in student debt, which she called her "mortgage"--so the two (housing and student debt) definitely are connected.
Perhaps we should be better educators of our children about the ramifications of loans of all kinds--then maybe they would make different decisions about their college "needs."
I had student loan debt from my first degree, way back in the stone age. I chose not to go into high-end computer systems analystland, even though it would've resulted in me getting rid of my debt sooner. I chose differently -- self-employment -- and it was a personal choice to pursue something that made me happier. If there had been a debt forgiveness program then, sure, I would've taken advantage of it. But I never would've advocated for it. I do not expect anyone to absolve me of debt I take on with a clear mind and free choice, just as I would not want my tax dollars to pay to absolve someone else of debt taken on to purchase consumer goods or a home. It's simply unfair and unrealistic.
The only part of this that I like is the community service aspect of it (10 years, not 5); perhaps there is a better way for the government to exchange debt forgiveness for some sort of tangible, valuable service to this country. (I also believe in that as a path to citizenship) There may be savings realized in that way that might offset the cost of such a program. If the bill's sponsor can demonstrate that it will pay for itself dollar for dollar somehow, well, then I'll take it seriously.
Presumably the "no early payoff" clause was contained in the renegotiated loan contract that you signed of your own free will?
This isn't a typical contract. This is a contract for payments against a debt in default -- held by a creditor.
The contract states that they hold the original debt, and that we negotiated a new amount for the payments to lock in an interest rate. It doesn't say that I can't pay it off early, nor does it say that they must accept other payments.
Every month, I get a receipt from them saying that they received my payment as a collection on a debt, and that I must pay the debt in full within 30 days to get out of default. Once a year, they send me a letter saying that if I do not pay the debt in full, then they will take me to court.
I call them once a year when I get this letter, to make sure that our contract -- which says I will make these monthly payments -- is still in effect. I also try to renegotiate for higher payments -- wherein I am informed that they will take me to court to get the court order for the full collection of the loan plus their fees (1/3 more than the principle of the loan).
Likewise, at any point they can simply decide that they don't want payments, and then go and get a court order -- even if I made the payments according to the agreement.
According to my friend who works in this area of law, I basically have two options: 1. pay the monthly, save up, and buy off the loan; or 2. cut and run and let them get a court order.
What is the problem with the court order?
1. it could affect our immigration status here;
2. they could seize my US assets (this is not much -- just the CD, savings account, and checking that I have set up just for this loan anyway);
3. they could put a lien on my estate (ultimately).
They cannot chase me here, really -- so if I were leaving the country altogether and was comfortable with my immigration status, then the first one wouldn't be a concern. One aspect of the immigration paperwork asks if you have any court orders against you -- and I would have to answer honestly because you sign an affidavit stating that everything in the document is factual -- no commissions or omissions.
Of the other two, if I were leaving the country permanently and not returning, they have no way to access me to get the money on their court order -- though I'd have to fold and transfer my US assets before they get a court order. Likewise, I would be able to travel in the US unharassed, as this is a civil matter (they often state that they can "have you arrested when you enter the country!" on various documents when they try to collect, but this is a lie, as this is a civil, not a criminal matter once they have a court order. Likewise, it is expensive to attempt to collect in a foreign country.
For the estate, my friend asserts that this could easily be given in living trust to DS, and I could effectively die without assets, which means they would never get the money.
But my preference is to either A. pay it off or B. get a legal discharge of the debt.
If I were to qualify for this sort of program, it would qualify as B. If I wouldn't qualify, I'm still working on A.
As far as I can tell, I want to be able to live/work in the US should I so choose, and having a court order against me and any assets that I may have would be a detriment to that (I think, anyway).
THat being said, we really aren't planning on moving back. At this point, the country is looking more and more insane -- and Im not sure I could handle that. LOL We are seriously considering denmark or norway though.
I don't deny this, you've made good points. But we can't wish the debt away. Oh wait, I guess we can--poof! It's gone.
Sign. whatever.
Banks do this all the time. Honestly, it is "poof! gone!"
In fact, I've done it within my business -- and in so doing, had a positive tax result! My accountant explained the benefits of discharging the debt at the end of the fiscal year, how it balanced my books and created a good re-set which made the business healthier.
I don't understand why people don't understand how this debt forgiveness/discharge stuff works. It happens *all the time* in all manner of consumer, medical, and foreclosure debt. That's what happens in bankruptcy court.
Yes, I had a colleague with 90,000 in student debt, which she called her "mortgage"--so the two (housing and student debt) definitely are connected.
Perhaps we should be better educators of our children about the ramifications of loans of all kinds--then maybe they would make different decisions about their college "needs."
That's what we call my debt too. The mortgage!
Obviously Zoe's case is special, but on a broader scale I think her point is valid. And, she could certainly make the argument that it was the stiffled economy in the US, caused by things like excessive student loan debt overall, which caused her to expatriate herself in the first place. She's mentioned before that one of the big reasons for her family's move was because they saw more opportunity elsewhere.
This is true.
There were many reasons for choosing here. Some of them were positives -- we love wellington and new zealand, we love the lifestyle/culture/way of life.
But, one aspect was that I couldn't get a small business loan in the US because my student loans are in default (technically). Even though I demonstrated that I ran a successful business for years (profitable), and that I had a decent business plan, lease agreement, and sublease agreements with other teachers and massage therapists/etc lined up, and I needed only a very small amount of money ($15k) as I was providing seed money as well, and that I had made payments on the default to the creditor every month since I started working with them (I provided an accounting from the creditor that demonstrated this).
"With the economy the way it is, we cannot take on any risky loans."
Here in NZ, the business that I wanted to purchase cost far less than the one I wanted to start. The sustaining of it costs the same, and by this time I'd managed to save up 1.5 years worth of capital to sustain it. We also had the money from our house and car to utilize for our move, and then DH had his 401k rolled over into an IRA (mutual funds).
We were pre-approved for a small business loan from the local bank here -- having provided the relevant information -- and our landlord was willing to guarantee us for 3 months as well. The prior owners guaranteed us for two years (we provided an escrow account in case we defaulted in our rent), and we came into a business that had several subleasing practitioners.
NZ also provided us with business mentors -- which is something they try to do to prevent brain drain as well as to help people innovate. This is part of how they want to stimulate the economy, and while my business isn't exactly an economic stimulator in the highest order, they noted that franchises have a lot of possibilities in developing the service industry and self-employment work force. They also provide grants for people who would apply for them. I have not yet applied for any grants. We were awarded a small cash prize by our small mentoring group -- which we claimed on our taxes and everything. It was enough to cover a part of our web site that we wanted finished.
So, this was part of it as well.
flowerseverywhere
3-20-12, 10:54pm
Of course we will be means tested for Soc Security, there's not other way to proceed. Sucks a big one. But it will be necessary.
sucking it up for the greater good of society I can take. I am not sure this is one of those circumstances. I have some friends and family members who have had to take much lower paying jobs or go on unemployment and they would love to see their debt discharged, but it will not be. Their only hope is to work until they are old if their health holds out or move in with a relative or small apartment. It just doesn't seem right to me that special groups of people are singled out to get a break.
All around me I see cities, counties, schools, states and the federal government buckling under their pension and health benefit obligations, which they most likely won't be able to meet. Can you imagine how many people will have a future that is a shadow of what they worked for and expected if social security is targeted as well as medicare?
It would be great if all the debt our government is taking on could just be discharged with the stroke of a pen and go poof and vanish, but we all know it won't be. Instead future generations will have to pay it back. Not very fair in my book.
Anyone with SL debt, be aware that if you default, your social security can be seized to pay for it.
catherine
3-20-12, 11:09pm
I don't understand why people don't understand how this debt forgiveness/discharge stuff works. It happens *all the time* in all manner of consumer, medical, and foreclosure debt. That's what happens in bankruptcy court.
If there is no other recourse, there is no other recourse. But I do believe that if you say you're going to do something, it may not be a matter of good economics, but it's a matter of good character to follow through on what you promised to pay. I believe that society is based on commitments you can hold in good faith, realizing that sometimes life happens. But to make bail-outs the rule and not the exception--how is that reasonable? Discharges do happen, and bankruptcies happen and there are consequences to the consumer. Their credit score suffers. Banks refuse to loan money to them. The consumer has to pay more for future loans. That's how it should be. On a personal level, if I loan you money because you say you need it and then you then come back and say sorry, I don't see why I have to pay you back, how is that acceptable?* And how is a bank or government loan any different?
I don't understand why people don't understand that if you say you're going to pay for something, you mean you're going to pay for it. And that if you don't, you suffer the consequences. Call it bad economic policy or call it karma.
*ETA: That scenario wouldn't happen, because I no longer lend money--it's a personal policy. If you come to me and ask to borrow money, I'll give it to you, no strings attached and no expectations. I've arrived at this because of the resentment I was building up when people I gave money to never felt compelled to pay it back, even if they said they would. So now, I will either not lend it, or I will give it freely. That's the best way, I've found. Maybe that's how we should approach education: just make give out grants based on need.
ApatheticNoMore
3-20-12, 11:40pm
Why debt forgiveness for student loans and not, say, car loans? Or home improvement loans? Or small business loans? Are tutions outrageous? Sure they are. But here, unlike a car or trip or any number of things you get a loan for, you are 'buying' something that will essentially never go away. Once you have that degree, you have it forever. You own it, and saying these kids need 'forgiveness' because, why? I don't get it.
+1 I mean if you really want wholesale jubileee well .... ha as I like to say, at least that position is consistent and hey while I'm not entirely sold on it yet, the great jubilee might even be interesting, I would like to see some power shifted to the middle class and down. But really why single out any type of debt?
sucking it up for the greater good of society I can take. I am not sure this is one of those circumstances. I have some friends and family members who have had to take much lower paying jobs or go on unemployment and they would love to see their debt discharged, but it will not be. Their only hope is to work until they are old if their health holds out or move in with a relative or small apartment. It just doesn't seem right to me that special groups of people are singled out to get a break.
Yea, that's what irritates. A special break here, a special break there, not even based on anything like income redistribution, which would be a heck of a lot cleaner, but just pure pandering. And not based on anything widely accepted like funding education for the greater good or something (you do that on the front end for all, not with selective forgiveness on the back end only for those who took out debt).
I don't have debt. I don't want to bail out those with housing debt as I don't have a mortgage, I rent (and may be renting at 70 for all I know - there is a price for my choices). I don't want to bail out those with education debt as I don't have a 4 year degree (and may be and probably am discriminated, and yes that's the right word, for the lack of such in the job market all the time - there is a price for my choices). But apparently it is just my job to bail out endlessly the price of everyone else's choices while constantly facing the full cost of my own. grumble .... helping the poor I don't mind, funding state colleges which I or anyone else could go to I don't mind, but the special people getting singled out is really getting quite annoying.
And this sort of thing is why I have been removing myself from the lending business the past couple of years.
Let the Jubilee begin! Just give me a few days' warning, so I can max out my credit cards and home equity lines first though, thanks!
sucking it up for the greater good of society I can take. I am not sure this is one of those circumstances. I have some friends and family members who have had to take much lower paying jobs or go on unemployment and they would love to see their debt discharged, but it will not be. Their only hope is to work until they are old if their health holds out or move in with a relative or small apartment. It just doesn't seem right to me that special groups of people are singled out to get a break.
All around me I see cities, counties, schools, states and the federal government buckling under their pension and health benefit obligations, which they most likely won't be able to meet. Can you imagine how many people will have a future that is a shadow of what they worked for and expected if social security is targeted as well as medicare?
It would be great if all the debt our government is taking on could just be discharged with the stroke of a pen and go poof and vanish, but we all know it won't be. Instead future generations will have to pay it back. Not very fair in my book.
The key difference, thanks to the banks and their bought and paid for legislators, is that student loan debt CANNOT be discharged by bankruptcy. That is the one fatal flaw that makes student loan debt completely different from virtually every other debt that a person in the US can face. Anyone who is truly on the ropes financially, with virtually any other debt, can declare bankruptcy and start to rebuild their life. Student loan debtors will continue to have to repay up to and through their collection of social security. Welcome back, debtors prisons...
The bigger problem is that we've long gone done the path where banks, and anyone who lends money, has stopped underwriting those loans to be sure that the people they loan to have a realistic hope of repaying the loan. Unlike bae, who rightfully is now afraid to lend his hard earned money to anyone. instead banks now expect the government, through laws like the last bankruptcy law update, and bailouts like have been happening non-stop since 2008, to save their bacon. Why should anyone feel like they need to pay back a loan since the bank will just get a negative interest rate bailout loan from the federal reserve and permission to mark to fantasy the value of the loan on their balance sheet and pretend like it's not a loss.
For me, I think a jubilee would be a great idea. I've already said this though.
I also don't think it's really fair to get into character question over this issue. Most people who end up in bankruptcy courts are not trying to get there. Most people whom would be benefitted in the current economy by this sort of economic stimulus programming -- which goes to the people rather than banks or auto industry or what have you -- can do a lot of wonders for a lot of people in their daily lives.
IF we were to assume for a moment that I was in the US doing what I am doing -- I would be fine going as I am going now. And I'd keep on going and paying and saving to pay off. After all, I've been doing it for several years already anyway.
But, if the debt were to be discharged (legally speaking), it would be really great for us. That added money would allow us (in this environment) to purchase the health insurance that we want (which includes dental) and a life insurance policy as well. Or, it would allow us to live a little bit better (for example, buy a little bit more food since I am still eating sub-calorically 6 out of 7 days). Or, it would allow me to purchase the (used) linens that I would like for DS's bed (blankets, mostly).
Each of these things would stimulate the economy in some way -- and better my life considerably. And my payment is currently quite low, to be honest.
If I included the amount I'm saving per month into that amount, we could live high on the hog -- but really, we'd go into investing it in our mutual funds and retirement funds -- which I also think stimulates the economy, and will make it such that we wouldn't need government assistance down the track (in so much as we will).
Anyone with SL debt, be aware that if you default, your social security can be seized to pay for it.
That and wage garnishment as well.
As a self-employed person, I am unwaged. I also don't have to pay into social security if I don't want to or can't. I haven't payed in since I had a job in graduate school.
So, they have very little, if anything, to garnish from me.
The key difference, thanks to the banks and their bought and paid for legislators, is that student loan debt CANNOT be discharged by bankruptcy.
The key difference is that there is government interference in the market. If there were no government guarantees then I would say fine, if a private lender wants to give a 20 year old with no assets or income a $100,000 loan knowing the risk that it could be discharged in bankruptcy when they graduate and still have no assets, fine by me. What I think you would find is that if loans were to be made on a credit risk basis the same way as all those other types of loans and not just doled out as a matter of public policy it would just become a matter of parental credit like in the old days.
And if you want to keep the government guarantee so people continue lending to uncreditworthy borrowers then riddle me this, what is the difference between a nondischargeable loan and nonrefundable tuition? If I pay out of my savings or meager part time job earnings and end up making less than I thought, can I get a refund of my $50,000 of tuition and expenses? I don't think so. That money is gone forever. But if I borrow the money you want me to have an option to not repay it if I later in life don't have the money, whether by choice or circumstance. Where is the moral parity there? Again, if you can work it out with a private lender great, sign yourself up for the conditional expense. But when you spend our taxpayer dollars why can't we make sure we taxpayers get paid back, or at the least put you on the same level as those who pay from job earnings and savings and can't get a refund? If college provides a lifetime of benefits, why can't we create a lifetime lien on your earnings?
Call me a curmudgeon, but I paid my loans, I don't want to pay yours as a taxpayer. The last thing we need to do is to keep creating bubbles through market distortions, be it mortgages or tuition and creating a system of moral hazard where you can borrow huge sums in hopes of landing a lucrative job and keeping that income if you succeed but passing the cost of failure on to the taxpayers if you fail. Keep people accountable for their decisions, including the downside, and we will get a more rational allocation of resources.
You guys arnt' thinking. Lets get a bill passed that sends every citizen over say the age of say 18, $50,000 or so. Of coarse those with government backed school loans or are behind in their mortgage payments have that amount applied to the government backed loans. Then everyone will be happy.
Start those printing presses up. Vote for free money.
More little goobermnt employees translates into a net gain at the polls for the pols who hand out those goobermnet employee goodies.
I totally agree. The treasury is being looted to buy votes.
To those advocating this, who should pay for it?
The government funds to pay for these programs aren't created from air. The government funds are provided by the citizens of this country or thru borrowings. When you support these types of bailouts you are asking your friends/family to pay for your problems. I have real issues with bailing out others on this scale.
The first forces new grads to take "steady" jobs because they've got a big debt that needs to be paid.
Yep, welcome to the real world. The time to think about that is before you spend my money.
flowerseverywhere
3-21-12, 8:53am
[QUOTE=Midwest;73293
The government funds to pay for these programs aren't created from air. The government funds are provided by the citizens of this country or thru borrowings. When you support these types of bailouts you are asking your friends/family to pay for your problems. [/QUOTE]
and future generations. The staggering debt we are leaving for our children is unforgivable.
If student loans could be forgiven in bankruptcy then everyone could technically declare bankruptcy after graduation, because with large student loan debt and no assets most all would certainly qualify.
I'm with Bae, tell me if there is going to be a debt jubilee because I'm going shopping! New car, tap my heloc, new RV, new motorcycles. Look out here I come. all those things that we talk about but don't buy because we don't think it is sensible to do so.
I'm not sure what's controversial about forcing people fresh out of college with large debts to get jobs and repay them prior to living the dream. Work hard for a few years, live cheap and pay off the debt. Then you can start a business or do something more fullfilling.
Yep, welcome to the real world. The time to think about that is before you spend my money.
Actually I agree with your comment a couple of posts earlier about government interference in the market. This is probably the reason tuition has been able to rise so much faster then inflation, resulting in people paying more/taking out large loans, in order to try and get ahead.
I'm not sure what's controversial about forcing people fresh out of college with large debts to get jobs and repay them prior to living the dream. Work hard for a few years, live cheap and pay off the debt. Then you can start a business or do something more fullfilling.
I don't think it's controversial. Nor am I concerned about individual fulfillment. I simply think that graduating a generation of people deeply in debt by the time they hit the job market is probably not a good thing overall if we, and our leaders, want to do things that foster innovation. What if STeve Jobs or Bill Gates had been deeply in debt and wound up working for "the man" to pay it off instead of doing what they did?
Actually, although I'm certainly not for blanket student loan debt forgiveness, I think a process where this debt could be subject to bankruptcies law might work. Of course, if you are working, even a dead end job or below your talent job, or own a business and getting some money, well, this still wouldn't help you. If you can pay something, you should pay, even if it would be nice to have a little more at the end of the day.(wouldn't that be nice for all of us) Maybe just counseling to restructure your debt or budget. But in cases of catastrophic illness, death of breadwinner, unforeseen circumstances where there truly is no way you can ever pay it back, then perhaps bankruptcy could come into play. But then, I think bankruptcy should only be used for other debt this way too, not just a get out of jail free card.
Student debt is different in that first the kid must go through school, then get a job in their field, not always forthcoming right after school. Fine, keep the debt small, or even defer it for a period of time. Give them a chance to find a job. Then, over a period of time, raise the payments, or restructure the payments so as the young person gains in their job they can discharge this.
I don't think it's controversial. Nor am I concerned about individual fulfillment. I simply think that graduating a generation of people deeply in debt by the time they hit the job market is probably not a good thing overall if we, and our leaders, want to do things that foster innovation. What if STeve Jobs or Bill Gates had been deeply in debt and wound up working for "the man" to pay it off instead of doing what they did?
Student debt isn't an entirely new issue. Back in the late 90's when I graduated, some people were coming out of school with very large loans and some weren't. My wife and I graduated with $15,000 or $20,000 in debt and paid it off in a few years. My wife drove the same car she had in college for the first 5 years of our marriage. Simple recipe for payoff, live cheap and work hard.
I feel like my mortgage is stifling my innovation and wish someone would pay it off for me. Unfortunately, the govt can't and shouldn't do that. Instead, I've made a choice to pay it off myself by living below my means. At some point, personal responsibilty needs to come into play in all these decisions.
As far as "fostering innovation," forgiving student loans is just further interference into the market which will create more problems.
For an example of how you can pay off a crushing debt load from student loans, check out no more harvard debt. It's a blog about a guy who paid off $100k in a year.
flowerseverywhere
3-21-12, 9:39am
But in cases of catastrophic illness, death of breadwinner, unforeseen circumstances where there truly is no way you can ever pay it back, then perhaps bankruptcy could come into play. But then, I think bankruptcy should only be used for other debt this way too, not just a get out of jail free card.
Yes there are circumstances where bankruptcy could be appropriate in this case. But after seeing some people walk away from homes in which they knowingly took out $100,000 more than the house cost (for toys) and in one case walk away from credit card debt over $60,000 (twice no less) it is hard sometimes not to be weary. Your idea is great, tighten up all the bankruptcy laws, welfare laws (which has been done in many cases), child support collections and make people more responsible across the board for their actions, instead of punishing people who make good decisions, pay their debts and are responsible.
Actually I agree with your comment a couple of posts earlier about government interference in the market. This is probably the reason tuition has been able to rise so much faster then inflation, resulting in people paying more/taking out large loans, in order to try and get ahead.
I don't know if it's necessarily government interference, but it started with a trickle. First kids could work their way through college (my generation). It was hard, sure, but could be done. Then, the kid worked and mom and dad helped a bit with room, board, etc...Still hard, but still doable. Then kids started taking out loans, cause mom and dad were maybe not doing as well as they had. This kind of coincided with Reagan and the start of the giant suck from the middle class to the upper tiers. This is where the snowball started it's roll, faster and faster. Once kids were borrowing the money to go through school, well, that gave the colleges the freedom to raise their prices quickly. After all, there are only so many hours in a day and the kid couldn't work 35 hours a day, but they COULD add another zero to that bank loan.
So, yea, I guess it was government interference in a way. The slow and steady choke of the middle class meant parents couldn't help their kids get through college, coupled with the greed of universities seeing a fresh flow of money for ever bigger sports complexes and all the other bells and whistles on their wish list.
I sympathize with young people today, especially those kids with parents who are unwilling or unable to help out. Tuition has just skyrocketed since I went to school. It’s crazy. Even our local community college is expensive. It costs $200 a credit. A second tier state school costs 13K with tuition (not including room and board). State schools are getting ultra-competitive now just because of tuition costs.
My advice for new parents is to start a college fund as soon as your kid is born. That gives them an 18 year head start. Even $50/month is better than nothing.
I don’t support this bill though. 10% of discretionary income is absurd (and way too subjective). However, the student loan business is out of control. It’s a no-lose for private lenders and it’s too easy for kids to borrow. Who guides 18 year olds if their parents do not? The financial aid counselor? No way.
I said in the beginning that debt forgiveness was a good idea -- as we can see evidenced in Saudi Arabia and how it managed to help the economy and the people there.
Saudi Arabia managed to reduce their public debt (http://www.indexmundi.com/saudi_arabia/public_debt.html) in 8 of the past 11 years and overall has reduced it from 103% of GDP in 1999 to under 10% in 2010. It took a lot more than loan forgiveness to do that, but if we can produce those results I'd be happy to write off all kinds of debt.
The real deal is jobs; if it hit us in the face any harder it would break our nose. If college graduates had a strong job market to enter and could earn a good return on their investment (aka tuition) we would not be having this discussion because this bill would never have been introduced. Another typical, high priced, bureaucratic, nonsensical government band-aid placed on a severed limb. Oh but wait, treating the disease instead of the symptom would reduce dependence on Nanny G. We can't have that.
Saudi Arabia managed to reduce their public debt (http://www.indexmundi.com/saudi_arabia/public_debt.html) in 8 of the past 11 years and overall has reduced it from 103% of GDP in 1999 to under 10% in 2010. It took a lot more than loan forgiveness to do that, but if we can produce those results I'd be happy to write off all kinds of debt.
The real deal is jobs; if it hit us in the face any harder it would break our nose. If college graduates had a strong job market to enter and could earn a good return on their investment (aka tuition) we would not be having this discussion because this bill would never have been introduced. Another typical, high priced, bureaucratic, nonsensical government band-aid placed on a severed limb. Oh but wait, treating the disease instead of the symptom would reduce dependence on Nanny G. We can't have that.
It's almost like someone is trying to distract us from the real issue (jobs/economy) and buy votes in an election year.
It's almost like someone is trying to distract us from the real issue (jobs/economy) and buy votes in an election year.
Ya' think?
ApatheticNoMore
3-21-12, 11:37am
I'm with Bae, tell me if there is going to be a debt jubilee because I'm going shopping! New car, tap my heloc, new RV, new motorcycles. Look out here I come. all those things that we talk about but don't buy because we don't think it is sensible to do so
Meh, you know that's funny as humor and all, but it doesn't really ring true to my pscyhology, if there was really a debt jubilee I would not go shopping on debt (at most I'd be a little carefree with I don't know buying books on Amazon on credit? :)). For the most part, I'd really just continue to be the same live with in my means person I've always been. Because it's kind of who I am and really not that likely to be changed at this point in life :) Perhaps if I was 19 and still kinda unformed, I don't know ....
If it would somehow restore a better world though hmm. College loan forgiveness seems in many ways forgiveness to those who are already priviledged (compared to most of the country that doesn't have degrees anyway). As for money creation, it is being created anyway, it is just currently filtered through the banks (wonder why they are so rich?).
jennipurrr
3-21-12, 11:59am
I think there are a lot of problems in the pricing of higher education and the real financial/academic benefits of some "college degrees", especially in the for profit sector that need to be addressed before we (as a country) go and do something like this. Many of the for profit colleges are still ripping off the federal financial aid system and saddling nonsavvy students (the kind of students who would have likely chosen a trade school or community college previously) with huge student debt and worthless degrees. I have seen a few positive trends in that direction, but this is still going on at an alarming rate.
DH had $91,000 debt when he finished his second bachelors degree (and a stint in law school). We graduated with decent but not high earning positions. We saddled up and made the private loans with variable interest rates our top priority. His debt is less than $40,000 on a 1.5 interest rate currently.We love to travel and we did not go on a trip for those three years. We drove old beaters. It can be done it just takes restraint...something I see less of each and every day in our society.
flowerseverywhere
3-21-12, 12:47pm
Meh, you know that's funny as humor and all, but it doesn't really ring true to my pscyhology, if there was really a debt jubilee I would not go shopping on debt (at most I'd be a little carefree with I don't know buying books on Amazon on credit? :)). .
of course I was being funny to an extent. But I think most people would do so if they could get away with it. How do you think we got into this mess in the first place? People taking risks, borrowing more than they could afford, liar loans, bundling bad debt together and selling it fraudulently all went on and it was widespread. Every day you can read a paper and read about people stealing from the soccer concession stand, people who are arrested for welfare fraud, stores being robbed all over. for some reason people have talked themselves into thinking they deserve whatever they want dammed the consequences to anyone else or society as a whole.
For some reason people have talked themselves into thinking they deserve whatever they want dammed the consequences to anyone else or society as a whole.
The word that comes to mind is that they feel "entitled".
Saudi Arabia managed to reduce their public debt (http://www.indexmundi.com/saudi_arabia/public_debt.html) in 8 of the past 11 years and overall has reduced it from 103% of GDP in 1999 to under 10% in 2010. It took a lot more than loan forgiveness to do that, but if we can produce those results I'd be happy to write off all kinds of debt.
The real deal is jobs; if it hit us in the face any harder it would break our nose. If college graduates had a strong job market to enter and could earn a good return on their investment (aka tuition) we would not be having this discussion because this bill would never have been introduced. Another typical, high priced, bureaucratic, nonsensical government band-aid placed on a severed limb. Oh but wait, treating the disease instead of the symptom would reduce dependence on Nanny G. We can't have that.
There you go again...sigh... Do you really really believe the government, our government, WANTS people on welfare, in debt and standing on the street corner hat in hand? Honestly? To what end or purpose would they (we) WANT that? Could it just maybe possibly be that the government started backing student loans because they simply wanted to make a college education available for all? Does it always always have to be some nefarious, evil plot by THE GOVERNMENT to enslave us? Good intentions gone wrong are still, at their core, good intentions. And I think, by and large, students are paying back their debt. And government backed loans has opened up higher education to so many who would otherwise not have it available, just as medicaid/medicare have helped thousands (millions) who would have never had access to health care of any kind without it. The fact that a very small percentage may abuse this doesn't change the fact that it has done overwhelming good.
Strong jobs market isn't all the story though. Too many jobs with very average or even below average salaries too often require higher degrees to an almost ridiculous level. My daughter, for instance, had flirted with the idea of being a librarian, until she found out you needed a MASTERS to do this! A masters! to be a librarian. I'm not dissing librarians, mind you, but here is something you could learn all you possibly needed to know in a 2 year degree, much less a masters. And there are so many other career paths like this. Not pie in the sky career paths, but everyday career paths that really shouldn't be so out of reach.
Education, at least some, beyond grade 12 is becoming a necessity if you want to do anything beyond basic service type jobs
There you go again...sigh... Do you really really believe the government, our government, WANTS people on welfare, in debt and standing on the street corner hat in hand? Honestly?
Well peggy, yes, I actually do believe there are people in the government that see significant benefits to be had from keeping large blocks of people in a dependent state. The only thing that amazes me is that you don't. And I do not believe it is a case of good intentions gone wrong, but rather a plan that works exactly as its intended. There isn't much room to debate that welfare does not work improving the lot of those who 'qualify'. They are on a check to check treadmill that is very difficult to get off of. That has now gone on for decades. You could not design a more effective method of keeping a segment of the population under your control if you tried. If it wasn't intentional how do you explain that there's never been anything beyond dog and pony election year efforts to change it? How do you explain that makes no difference which party is in control?
Strong jobs market isn't all the story though. Too many jobs with very average or even below average salaries too often require higher degrees to an almost ridiculous level.
But that isn't a strong jobs market, is it? At least its not in my own definition of one. The requirements get so out of kilter because there are more and more people competing for fewer and fewer jobs. If there were more jobs than candidates (aka a very strong jobs market) your daughter would likely be finding requirements for positions more in line with what most of us would consider reasonable. The fact that positions are so often being filled with such highly qualified candidates is an indication of how long this has been going on.
flowerseverywhere
3-21-12, 2:07pm
Peggy according to USnews and World report http://www.usnews.com/news/articles/2012/03/06/5-shocking-facts-about-student-loan-debt
"the report estimates that 21 percent of the total student loan debt burden in the U.S. is delinquent, and that more than one-in-four of the 37 million student loan borrowers represented in the Equifax data have past due balances."
If this is true then something is way out of balance like the housing market is.
Such a conundrum.
With a contracting economy and jobs still being exported at a furious pace, there are fewer jobs to be had.
College-aged kids take out loans to attempt to gain degrees so they can compete in this increasingly competitive job market (where Ph.D.'s are taking telemarketing jobs)
Upon graduation, they find that they still can't find jobs that pay them enough to pay off the debt they took on.
It's terribly frustrating. I don't agree that debt absolution is the answer, but I wonder what is? I'm still an optimist, and believe there's an answer if we ask the right questions.
perhaps there is a better way for the government to exchange debt forgiveness for some sort of tangible, valuable service to this country. (I also believe in that as a path to citizenship)
One exists - it's called joining the US Military :-)! 4 years of service equals money for a college education. I think the same could be a pathway to earning citizenship or writing off current student loan debts - 4 years of service earns US citizenship. 4 years of service equals 4 years of write offs of student loan debts.
Like others here who have been "triple foolish" (no student loan debt because I DID join the armed forces, paid off mortgage by making MAJOR financial and personal sacrifices but didn't sell while housing prices were high, didn't use my house or credit cards as a bank to buy luxury items) I completely disagree with a mass student loan debt write offs. Re-structure? Definetely. Make it a low percent of "total" (not discretionary) income and a low interest? Definetely. Take into consideration certain financial hardships to certain people to put re-payment on hold for a limited period of time? Sure. But that loan should stay in all cases (except death when it should not have to be paid by the heirs). I don't think it should be a bankruptable thing. Too much potential for most people to claim BK once out of college. And while it doesn't seem fair that consumers should get to declare BK and keep many of their assets, I personally think many of us disagree with the current BK rules that allows people to keep many/all of their assets - including the luxury ones. I think that anytime someone claims BK that many of those assets should be seized and sold for debt repayment when they can be. The cars, the RVs, boats, and toys, the business, even the house should not be considered "safe" assts that one can retain in BK. BK to me is something that should be used only for extreme and dire financial situations that are out of the persons control - medical issues, natural disasters which wipe out a home, etc... Not to allow people to retain the things they bought (including an education) when there are other ways to fund those things - including getting second jobs.
Although I would never blame anyone (Zoebird et al) for taking advantage of a student loan reduction or elimination program if one was offered. Just like I would take advantage of the free-to-all $50,000 another poster suggested. I'd be the first in line for that :-)! But yes, like Iris Lily, it does tick me off to no end that such programs will exist by the goobermint. If the banks want to do it, fine. But I would rather fund a "work to education" program with taxpayer dollars rather than just give it all away. Even a "volunteer work to pay of student loan debt "program. Basicly give people an avenue/incentive to relieve that debt but make them work for it in some fashion if they need debt relief. Not really fair to all those service members working and living in extreme conditions everyday so that they can afford college.
ApatheticNoMore
3-21-12, 2:55pm
There isn't much room to debate that welfare does not work improving the lot of those who 'qualify'. They are on a check to check treadmill that is very difficult to get off of. That has now gone on for decades. You could not design a more effective method of keeping a segment of the population under your control if you tried.
it provides perhaps enough of a safety net to prevent revolution :) maybe that and prisons?
But that isn't a strong jobs market, is it? At least its not in my own definition of one. The requirements get so out of kilter because there are more and more people competing for fewer and fewer jobs. If there were more jobs than candidates (aka a very strong jobs market) your daughter would likely be finding requirements for positions more in line with what most of us would consider reasonable.
I don't know, which came first the chicken or the egg? I've always figured that pushing more and more people to go to college came first. That ok if 90% of the population has high school diplomas say then what are they worth as a sorting/signaling mechanism? And suppose purely hypothetically that we had a great education system everywhere where those high school grads were coming out really well educated. Still if 90% of the population has a high school diploma it is still a useless sorting mechanism. And it really is the same principle with a Bachelors and so on. If everyone had PhDs, PhDs would be cleaning tiolets, and I don't see any kind of economic prosperity that would prevent that in such a situation. True the middle class may have used to be larger (manufacturing, unionization etc. etc.) - but the whole idea of everyone as a white collar professional is ridiculous. And not even because some people are lesser or anything (maybe, maybe not, it's immaterial really), but because there's not that much demand for white collar work in ANY economy.
The need for more and more advanced degrees to do anything (masters for a librarian etc.) is a HEAVY TRANSACTION COST. That's what it is. It prevents people from better sorting themselves into careers that might suit them more just because it is a heavy transaction cost (it interferes with market flow if you will ...). Even if you have determined your highest career desire in life is to be a librarian, you might think twice about the masters ... Ok that's the cost, what is the benefit or who benefits? It protects certain fields from competition, that's the benefit, the benefit is barriers to entry. The benefit was for a long time to establish a middle class that can hold itself above the lesser working class rabble. But as more and more people pursue more and more degrees it breaks down, pretty soon you need to hold a PhD to avoid working retail. What if .... we have been SOLD (by politicians mostly) education INSTEAD OF a good society? Instead of a society where everyone benefits we have been sold "if only you get an education you can be one of the lucky ones that benefits". And then when it fails, you hear complaints like "but I did everything right ...." (because they were sold "if only you do everything right, you can be one of the lucky ones").
it provides perhaps enough of a safety net to prevent revolution :) maybe that and prisons?
I think just barely enough, which I also think is the goal. Give too much and the people will rise above. Give too little and they will revolt. The perfect level keeps them lined up with hands out waiting for the next installment.
I don't know, which came first the chicken or the egg? I've always figured that pushing more and more people to go to college came first.
DW and I have been talking a lot about this lately. We have 2 kids through college and 1 still in high school. We pushed the older kids into college just like all our friends did. For DD it was a good thing. She met people, had a great experience and then landed a good job in her field. Just like its supposed to work. DS took 8 years to get through, spent as much on partying as tuition and now has 2 jobs neither of which is in his field.
DW is pushing DD2 straight at college. She wants to take an 18 month cosmetology course. I can VERY easily see her doing something like opening her own shop someday (she's expressed interest already) or charting some other less than traditional course. She is more like me; I didn't go to college for a variety of reasons, but beyond the social aspects it would not have done me any good in my early 20's anyway. I do have a hunch that pushing her into college right out of HS is going to be a waste of her time and our money. Maybe we change up the rules.
What if we didn't let anyone into college before age 22. They could pull a hitch in the military or they could perform all the thankless, low paying tasks that unskilled, uneducated workers get to do. Either way they would learn some respect for others, some dicipline and some appreciation for what people do. Once they have their 4 years of life in then they would be free to study what they really want to learn. That, and maybe we cap student loans at 50% of the cost of school (or whatever figure you want) to keep balances lower at the end of a 4 year degree.
Typically speaking, creditors 'eat' the debts that are discharged which are counterbalanced in tax write-offs.
In the case of this bill, the government would likely pay pennies on the dollar and/or be discharged -- and that money would come from the war funds. I'd much rather spend it here than on war funding.
The whole point of discharging a debt is to avoid debtors prison, indentured servitude, and slavery.
What this situation sets up -- when people have no means of discharging the debt legally -- is indentured servitude in essence.
This is not a question of character, it's a question of justice (avoiding issues of indentured servitude, slavery, and debtors prisons).
I think just barely enough, which I also think is the goal. Give too much and the people will rise above. Give too little and they will revolt. The perfect level keeps them lined up with hands out waiting for the next installment.
DW and I have been talking a lot about this lately. We have 2 kids through college and 1 still in high school. We pushed the older kids into college just like all our friends did. For DD it was a good thing. She met people, had a great experience and then landed a good job in her field. Just like its supposed to work. DS took 8 years to get through, spent as much on partying as tuition and now has 2 jobs neither of which is in his field.
DW is pushing DD2 straight at college. She wants to take an 18 month cosmetology course. I can VERY easily see her doing something like opening her own shop someday (she's expressed interest already) or charting some other less than traditional course. She is more like me; I didn't go to college for a variety of reasons, but beyond the social aspects it would not have done me any good in my early 20's anyway. I do have a hunch that pushing her into college right out of HS is going to be a waste of her time and our money. Maybe we change up the rules.
What if we didn't let anyone into college before age 22. They could pull a hitch in the military or they could perform all the thankless, low paying tasks that unskilled, uneducated workers get to do. Either way they would learn some respect for others, some dicipline and some appreciation for what people do. Once they have their 4 years of life in then they would be free to study what they really want to learn. That, and maybe we cap student loans at 50% of the cost of school (or whatever figure you want) to keep balances lower at the end of a 4 year degree.
I did that thankless low paying type of work during high school and college.
Some kids are made to go to college and some aren't, but I don't need the govt telling my children they can't go to college until they are a certain age or that they have to go at all. Nothing wrong with the military or trade school, but kids need to find their own path without govt intrusion.
Capping loans at $x dollar amount for undergrad degrees, however, might be a step in the right direction in helping to controll the out of control college costs. In related news, one of our local colleges is helping their waterski team buy a $40,000 boat. Wonder why the cost of college is increasing?
Typically speaking, creditors 'eat' the debts that are discharged which are counterbalanced in tax write-offs.
In the case of this bill, the government would likely pay pennies on the dollar and/or be discharged -- and that money would come from the war funds. I'd much rather spend it here than on war funding.
The whole point of discharging a debt is to avoid debtors prison, indentured servitude, and slavery.
What this situation sets up -- when people have no means of discharging the debt legally -- is indentured servitude in essence.
This is not a question of character, it's a question of justice (avoiding issues of indentured servitude, slavery, and debtors prisons).
By this logic then every person who buys a house or car or anything that they must pay for - either on credit or working to earn the cash to buy it - is a slave or indentured servant. By the same logic then people who must work to provide for themselves and their kids are thus slaves. Those things are a matter of choice - slavery does not offer choice. Yet taking out a voluntary loan that is supposed to be repayed does. Having children you must work to support does. Taking out a mortgage or car loan does. While I agree it's not a matter of character, it certainly is not a matter of justice, and certainly not slavery.
Typically speaking, creditors 'eat' the debts that are discharged which are counterbalanced in tax write-offs.
In the case of this bill, the government would likely pay pennies on the dollar and/or be discharged -- and that money would come from the war funds. I'd much rather spend it here than on war funding.
The whole point of discharging a debt is to avoid debtors prison, indentured servitude, and slavery.
What this situation sets up -- when people have no means of discharging the debt legally -- is indentured servitude in essence.
This is not a question of character, it's a question of justice (avoiding issues of indentured servitude, slavery, and debtors prisons).
Debts written off are not counterbalanced by "tax write-offs." When a company writes off a bad debt, they receive a deduction. Assuming a tax rate of 35%, the company receives a benefit of 35 cents on the dollar for that write off. The company would much rather have the dollar repaid than a tax write-off.
With regard to your war comment, we can't afford the wars now. The deficit for 2011 was over a trillion. We aren't spending money we have, we are spending money we don't have. The assertion by the author of this bill that the bills would be paid for by savings from the ends of the war is ridiculous.
Even if the govt (thru guarantees) is on the hook for loans, the government is funded by the taxpayers. I'm a taxpayer as are your friends and family. I don't feel obligated to bail out all the people who now can't or don't want to pay their student loans. Ever hear the story of the ant and the grasshopper? I'm the ant.
I don't advocate putting people in debtors prison, but discharging debts too easily (as this bill would) creates an even larger problem. The students took out the debt and in most cases, I think they should repay it barring tremendously unforseen circumstances. If they don't, they are setting up future generations for additional debt and/or constraining their opportunity.
If current students don't repay, future students won't be able to get loans.
Education, at least some, beyond grade 12 is becoming a necessity if you want to do anything beyond basic service type jobs
Perhaps, though that itself in a way is a damnation of our current educational system, and of people's expectations.
However, that additional education need not be at an expensive 4-year college. There are plenty of professions out there in demand with high salaries that do not require a 4-year degree. Some of them even provide on-the-job training and apprenticeship programs. They are generally not professions involving Marxist literary criticism, or cross-cultural feminist basketweaving, but rather ones that require hard work and measurable output.
People entering college today to major in "liberal arts" without a focused plan, and who take on piles of debt to do so, are being rather foolish IMNSHO. Especially in today's economy. My own daughter has asked if she'd be better off taking the money and opportunity cost for 4 years of college, and using it to start a business of some sort.
My wife majored in religion, at an Ivy League school. She graduated with a huge amount of debt, because her parents weren't poor enough to get a lot of financial aid, and not wealthy enough to pay for it, being college professors themselves. She was not however intending on earning a salary with her undergraduate degree, it was a springboard to her graduate degree, which led to a reasonably-well paying set of jobs. Which she had planned out.
It still took many years of savings, simple living, and working hard for her to pay off the debts for her undergraduate and graduate education. Which we planned for.
So it must be nice to live in today's Occupy Wall Street era, when you can just expect money from the sky, whether you are a business or an individual who can't meet their commitments. I wonder how sustainable that is....
Well, no I don't.
Typically speaking, creditors 'eat' the debts that are discharged which are counterbalanced in tax write-offs.
A charge off that can be applied against income is not a "tax write off", it is a loss. Anytime someone has to "eat" a bad debt it is a loss. Real money was lent, not just columns on paper. That money came directly out of the pockets of investors, or in some cases tax payers. What if you lent money to someone and they decided it wasn't in their best interest to pay you back? Would your feelings change if the roles were reversed? Would it take away 100% of the pain if you could write off 35% of that loss against your other income?
In the case of this bill, the government would likely pay pennies on the dollar and/or be discharged -- and that money would come from the war funds. I'd much rather spend it here than on war funding.
Those "war funds" come from me, and about 150 million others like me. I'm going to be happy when they aren't spent on war, but damn sure want a say in where they do go because, quite frankly, I've had enough of bail outs.
This is not a question of character, it's a question of justice (avoiding issues of indentured servitude, slavery, and debtors prisons).
When someone lends money to a borrower it is absolutely based on character. That is what a credit score is trying very hard to quantify. As far as justice goes, if our government is going to look out for anyone it should be the party who was wronged, in this case that's the lenders. Like Spartana said, the fact that borrowing the money was voluntary is what makes all the difference.
The college cost / job market situation sucks. I absolutely feel for anyone caught up in that position. I just can not accept that this is a proper solution. When the sun comes up tomorrow the same problem will exist, just for different people. Nothing will be solved.
Saudi Arabia managed to reduce their public debt (http://www.indexmundi.com/saudi_arabia/public_debt.html) in 8 of the past 11 years and overall has reduced it from 103% of GDP in 1999 to under 10% in 2010. It took a lot more than loan forgiveness to do that, but if we can produce those results I'd be happy to write off all kinds of debt.
The real deal is jobs; if it hit us in the face any harder it would break our nose. If college graduates had a strong job market to enter and could earn a good return on their investment (aka tuition) we would not be having this discussion because this bill would never have been introduced. Another typical, high priced, bureaucratic, nonsensical government band-aid placed on a severed limb. Oh but wait, treating the disease instead of the symptom would reduce dependence on Nanny G. We can't have that.
I agree here 100%.
Looking at what SA has accomplished at multiple levels is great. But I still think debt forgiveness for average folks is part of the solution.
Well peggy, yes, I actually do believe there are people in the government that see significant benefits to be had from keeping large blocks of people in a dependent state. The only thing that amazes me is that you don't. And I do not believe it is a case of good intentions gone wrong, but rather a plan that works exactly as its intended. There isn't much room to debate that welfare does not work improving the lot of those who 'qualify'. They are on a check to check treadmill that is very difficult to get off of. That has now gone on for decades. You could not design a more effective method of keeping a segment of the population under your control if you tried. If it wasn't intentional how do you explain that there's never been anything beyond dog and pony election year efforts to change it? How do you explain that makes no difference which party is in control?
But that isn't a strong jobs market, is it? At least its not in my own definition of one. The requirements get so out of kilter because there are more and more people competing for fewer and fewer jobs. If there were more jobs than candidates (aka a very strong jobs market) your daughter would likely be finding requirements for positions more in line with what most of us would consider reasonable. The fact that positions are so often being filled with such highly qualified candidates is an indication of how long this has been going on.
Well that's a rather pessimistic view. And I suppose this is where we differ. Again, I find nothing nefarious about, say, welfare, or SS, or medicare. The government (us) helps these people because we decided as a nation, we simply cannot let these people starve, living on the streets. I, and many others don't really see it as THE GOVERNMENT building an army of welfare queens for the zombie apocalypse, but a simple case of moral duty to not let out neighbors starve.
Again, you never answered why exactly you think the government wants people on the dole. How does it possibly benefit the government to spend money on food and medical care for poor people? The reason we do it no matter which party is in office is because we have poor people who desperately need the help, no matter who is in office. Have you really bought the line that one party is orchestrating this? Do you think we shuffle the poor people out when republicans are in office and just scoot them back in when it's the democrats turn?
Wow. To think poverty and old age and medical need is just a political issue? Is that how you see it? A theoretical 'let's toss them off of aid and see what happens' kind of thing?
Yea, the government wants to keep old people dependant on them because, uh...why is it again they do that?
Its no different than if you lent money to someone and they decided it wasn't in their best interest to pay you back. Would your feelings change if the roles were reversed? Would it take away 100% of the pain if you could write off 35% of that loss?
I already stated that I had to do this, and that it worked to the benefit of my business in terms of columns on the paper. It wasn't painful.
Of course, the person "negotiated" with me to pay off what he could in a way that he could -- and then the debt was forgiven on paper so that both of us could balance our books at the end of the year. All of it handled above board.
But, I also got court orders for several debts as well -- people contesting that they didn't owe the money. When they don't pay on those, we have decided to carry some and forgive others, based on what would be best for the company. Of course, I was able to get one to pay by sending the bailiff as well.
Yes, I understand this process as a lender. I'm currently collecting on two debts at the moment, holding one other, and discharging one more.
It's not painful or emotional. It's business.
Those "war funds" come from me, and about 150 million others like me. I'm going to be happy when they aren't spent on war, but damn sure want a say in where they do go because, quite frankly, I've had enough of bail outs.
And from me, too. I'm happier with my tax dollars being spent on this than on the wars. I'm also happier with TARP than the war, see? Yes, there are also many other things that I would prefer the tax dollars to be spent on instead of the wars.
I see this as part of a process to help people in the immediate and potentially help people in the future, as well as to get more justice in the sense of debt discharge (which was designed under the idea of justice).
When someone lends money to a borrower it is absolutely based on character. That is basically what a credit score is trying very hard to quantify. As far as justice goes, if our government is going to look out for anyone it should be the party who was wronged, in this case that's the lenders. Like Spartana said, the fact that borrowing the money was voluntary is what makes all the difference.
What we are looking here in regards to justice is whether we as a society prefer indentured servitude/slavery or discharge. The whole point of being able to discharge a debt is a matter of justice -- not character of lender or borrower. That's the history and jurisprudence on the matter.
So, why would all but this one kind of debt be dischargeable? Why are we so comfortable yoking our younger generations to ALL kinds of indentured servitude?
The college cost / job market situation sucks. I absolutely feel for anyone caught up in that position. I just can not accept that this is a proper solution. When the sun comes up tomorrow the same problem will exist, just for different people. Nothing will be solved.
I think it's part of the solution -- but absolutely not "THE" solution. I think it will function as a good measure in the immediate, and with time-bounds and other elements in place, I'd be happy for it.
Like I've said before, I prefer austrian economics in this matter. I believe that the budget can be balanced, that we can leave our government/country debt-free to our children and grandchildren, and that we can have a good quality of life for people in the US.
And I think that this could be a viable part of that solution. (It will -- also and like any law or regulation -- open up a lot of questions/problems too)
Why are we so comfortable yoking our younger generations to ALL kinds of indentured servitude?
But they've yoked themselves - voluntarily. Again, voluntary student loan debt is no more indentured servitude then choosing to voluntarily have a child. A person should work to pay for the care of that child for 18 plus years. A person should work to pay off their debts as well.
My own daughter has asked if she'd be better off taking the money and opportunity cost for 4 years of college, and using it to start a business of some sort.
Here is the lesson for parenting that I learned: don't pressure your kids into jobs and career paths that they don't want, when it would force them to get into major debt.
While I have worked diligently to pay it off (and continue to do so), I'm still ticked that I even have it. LOL I blame myself and my parents.
Spartana:
Consumer and housing debt is also chosen and dischargeable.
Assuming a student has neither of these upon graduation, and doesn't take on either one until their debt is cleared, and that student STILL runs into major problems (medical, limited job prospects, jobs that only cover living expenses, etc) the debt is not dischargeable.
What is the difference -- from the standpoint of justice?
Here is the lesson for parenting that I learned: don't pressure your kids into jobs and career paths that they don't want, when it would force them to get into major debt.
I think my daughter does ask a fair question.
We won't be getting any financial aid I suspect, and she wants to go to a top-tier school. This year, Princeton would run us ~$59,000 a year for tuition, room, board, fees, insurance, and travel. My daughter could easily earn $25/hour here with a high school degree and her amount of dedication and contacts, so that's $50k/year in income. She'd also be quite welcome to continue living here, so her living expenses would be not-much.
$109k/year in college costs + opportunity costs, for 4 years. That's ~$440,000. You could do a lot with that kind of money.
Spartana:
Consumer and housing debt is also chosen and dischargeable.
Assuming a student has neither of these upon graduation, and doesn't take on either one until their debt is cleared, and that student STILL runs into major problems (medical, limited job prospects, jobs that only cover living expenses, etc) the debt is not dischargeable.
What is the difference -- from the standpoint of justice?
I personally don't think housing or consumer debt should be dischargable. And that if they are allowed to be so, then those assets should be sold to pay for that debt and not left in the hands of those consumers to enjoy (and we can't take away the "knowlegde" gained from an education to re-pay some of that debt). I feel that the only debt that should be dischargeable are unforseen things like impossible to pay medical bills - especially if the person is unable to work - and natural disasters where the person can't use those assets (home destroyed in a tornado, etc..) and loses those assets thru no fault of their own. I also feel that consumer debt should follow a person thru out their life. If they begin to make more money, then they should begin re-payment of those debts unless they lost those assets either selling to re-pay the debt or thru no fault of their own. I realize I am in the minority here but that's how I feel. Again, if a private institution wishes to discharge a debt it is owned, I have no problem with that. In that case it shouldn't matter to the government and there shouldn't be any government involvement. If the bank discharges debt, it suffered a loss and should get the tax write-off for that loss.
Wow. To think poverty and old age and medical need is just a political issue? Is that how you see it?
No peggy, not JUST a political issue (but it decidedly is A political issue). We both know we need safety nets. As usual and for the 1,000th time, nobody here is saying we should get rid of them. But doesn't it strike you as the least bit odd that the same people are always the ones caught in the net? That 60 years or so of the same programs never changed anything? The same people (http://www.childwelfare.gov/pubs/otherpubs/children/children.pdf) who were vulnerable 60 years ago remain so today. Rather than totally hijack this thread would you like to pick this up in a new one? I'm game if you are.
I personally don't think housing or consumer debt should be dischargable. And that if they are allowed to be so, then those assets should be sold to pay for that debt and not left in the hands of those consumers to enjoy (and we can't take away the "knowlegde" gained from an education to re-pay some of that debt). I feel that the only debt that should be dischargeable are unforseen things like impossible to pay medical bills - especially if the person is unable to work - and natural disasters where the person can't use those assets (home destroyed in a tornado, etc..) and loses those assets thru no fault of their own. I also feel that consumer debt should follow a person thru out their life. If they begin to make more money, then they should begin re-payment of those debts unless they lost those assets either selling to re-pay the debt or thru no fault of their own. I realize I am in the minority here but that's how I feel. Again, if a private institution wishes to discharge a debt it is owned, I have no problem with that. In that case it shouldn't matter to the government and there shouldn't be any government involvement. If the bank discharges debt, it suffered a loss and should get the tax write-off for that loss.
How about a middle ground? Student loan debt is dischargable 20 years after graduation thru the normal bankruptcy process and during the bankruptcy process we take all your stuff. You can't repo the knowledge, but you can take 20 years of earnings gained through the knowledge.
So, why would all but this one kind of debt be dischargeable?
You can't discharge a student loan simply because the risk to lenders would be so high. Lenders require collateral when they lend you money to buy a house or a car. If you go bankrupt and the debt is discharged they can sell the asset to recover what they lent you. Student loan lenders, however, can't repo your brain if you go under. They lend money based on the future production of a college grad. The only asset they have securing the loan is future income. Since there is nothing tangible that can be used as collateral the loans are not eligible for discharge.
Why are we so comfortable yoking our younger generations to ALL kinds of indentured servitude?
I'm not buying indentured servitude, its just hyperbole. I will, however, admit that my generation has done a great disservice to our kids (your generation) by placing such hyper importance on a college degree. A degree carried a lot of value when we are in our early 20's. I think we are guilty of not adapting to a new world. Our intentions were good, but the approach was too narrow minded and ignorant. I'd still much rather find a way to help boost our kids up rather than bail them out.
ApatheticNoMore
3-21-12, 6:41pm
While I have worked diligently to pay it off (and continue to do so), I'm still ticked that I even have it. LOL I blame myself and my parents.
and it seems so obvious to me you gained so much by having it. I see it as: I'd bet it made it easier for you to emigrate to another country, having those credentials. I'm sure I'd face much longer odds if I wanted out. Other countries don't just accept anyone and they like degrees and credentials. Well that's assuming you wanted to leave anyway, if you see evil student debt as the ONLY reason you were forced to leave your country of birth then I can see why that would be annoying. You obviously gained a great deal of education from your well education. It's obvious to anyone who sees you arguing on these boards (there are plenty of smart people on these boards but anyone can see you can make an argument - that's years of legal training and it's obvious). Whether that was all worth massive debt, haha well I can't say, I'm happy not to have debt I must say. But it comes with an understanding, that I won't have all the opportunities I might with more credentials.
I think my daughter does ask a fair question.
We won't be getting any financial aid I suspect, and she wants to go to a top-tier school. This year, Princeton would run us ~$59,000 a year for tuition, room, board, fees, insurance, and travel. My daughter could easily earn $25/hour here with a high school degree and her amount of dedication and contacts, so that's $50k/year in income. She'd also be quite welcome to continue living here, so her living expenses would be not-much.
$109k/year in college costs + opportunity costs, for 4 years. That's ~$440,000. You could do a lot with that kind of money.
Absolutely one could.
And, she could choose to go to a less expensive school to get a degree in her choosing, and then go to a prestigious graduate program if she would like -- all paying her way through in some cases.
The truth is, I just want me kid to know that he can "do anything" -- meaning I wouldn't be less proud of him if he decided he wanted to work in the recycling plant, or in construction or other trades, or go on and get degrees of various sorts. I might have hte most difficulty if he joined the military -- mostly because I would fear for his safety. Actually, any job that would require a high level of risk would give me pause.
Nevertheless, I would still support him, and strive to help him make good decisions in regards to his education and whether or not to take on debt as a part of that.
My parents encouraged me to take on debt 'as much as it takes' -- and discouraged me from working (even though I did work anyway). They asserted that I'd be able to "pay it off in no time!" with a good job. Most of my friends have "good jobs" and only a few of them are truly successful at this point.
Let me define successful: without debt of any kind (perhaps say, a modest mortgage), kids, well established careers that provide them with a modest income. I have one friend who meets this criteria.
His method? Worked his way through undergrad while living at home -- debt free. Then, worked for a judge while working his way through law school. Had less than $10k of debt upon graduation, which he paid back in 2 years. He graduated 1 year later than other people who graduated from high school at the same time he did. He continued to work for the judge after law school, then became a criminal attorney with his own law office. He now has two other lawyers who work with him. He's now running to be a judge. He has 3 daughters -- the eldest is 14. She came while he was in law school. His wife worked part time when he was home (night shifts at a grocery store as a manager), and so they had no child care costs.
The rest of us are burdened with debt, working jobs that don't pay as well as our friend -- yes *lawyers* -- and honestly, my earnings are about 2/3 of what my friend's are, save that he lives in a lower COL area. Many of my female lawyer friends are SAHMs, and several of us are yoga teachers because it turns out we could actually make MORE money doing this than practicing law which we no longer enjoyed.
I truly do wish that at 19, i'd been supported in what I wanted to do, not what my parents wanted me to do so that they could feel good about me.
That's really how I see it.
Gregg,
I can see how it would be seen as hyperbolic.
But, I look at my own situation from another POV. Loans go into default -- lets say by falling on hard times -- and those hard times may never recover. One of my friends had a stroke at 25. She lost the knowledge she'd learned in school, and her disabilities make it difficult for her to make the kind of income she was making before the stroke. She does work, but it basically covers her living expenses and a very, very modest retirement. Her debt is higher than mine and in default.
Neither of us can foresee any possibility wherein she'll ever be able to come up with the money to pay the credit company outright. She makes payments every month -- just like I do. She works very hard within her capabilities. For whatever reason, she doesn't qualify for the various disability discharge options (she's asked a lawyer too!).
As far as we can tell, she has the same options I have:
1. pay every month for the rest of her life (slavery/indentured servitude?)
2. pay every month and win the lottery/etc to pay off the debt;
3. not pay, get the judgment against her, which would be a lien against the estate eventually.
Which one creates better character?
And yes, thanks for asserting that your generation did us a disservice there. :) It really is helpful to hear.
Gee I never assumed lawyers made a lot of money, and all it takes is a little research to find that many do not. And then, just as many don't even practice the law as do. But I agree that people are generally ignorant of true income for attorneys, and I regularly hear "but she's/he's an attorney" as though that conveys some kind of automatic income standard on the subject at hand. Not hardly.
Now if you want to step out into the working word with a newly minted degree and immediately bring in some dough, try pharmacy school.
ANM:
That is true, to an extent.
It is particularly true if someone is applying for residency straight out on the point system here -- but I think a graduate degree only counts for another point or two, whereas the undergraduate degree counts as more. And it is also true if the degree is within the skills shortage list or within other forms of special consideration (such as religious degrees which somehow get some special consideration).
But, if you dont' have enough points to get in right away, the degree is not necessarily going to be the tipping point -- neither DH nor myself had enough points to get over that number. I don't remember the calculation now, but we didn't. :) And both of us have graduate degrees. We had enough to be in the lottery -- but I think we were 3-5 points from getting residency directly! *bummer*
For the visa we are on, it doesn't really help per se. I mean, it looks better, but one of the people whom I know who came here on the business visa only has a high school education and then was apprenticed in building until he founded his own business and became a very successful builder (building hospitals and the like). Then, he retired from that (leaving it to his son) and took his retirement (which is extensive) and started a business here. He was over the usual age limit, too.
But, he had enough money, business experience, and a business plan. That's pretty much what you need to get this sort of visa. So I cant' say that it helped us per se, but it certainly didn't hurt.
I guess you could say the only hurt that I feel is:
1. having the debt;
2. that the whole thing got farkled into this credit company situation.
And that second aspect made it hard for me to get a loan in the US, though I qualified well enough here.
And I now have a preference for living here.
----
Iris lily,
That's a good idea too -- but I still think it's better to just work your way through school somehow -- keeping loans to an absolute minimum, right? :)
Big bucks after or no, the reality is that any amount of debt for education at this point just seems too expensive for me.
flowerseverywhere
3-21-12, 9:27pm
Gee I never assumed lawyers made a lot of money, and all it takes is a little research to find that many do not. And then, just as many don't even practice the law as do. But I agree that people are generally ignorant of true income for attorneys, and I regularly hear "but she's/he's an attorney" as though that conveys some kind of automatic income standard on the subject at hand. Not hardly.
Now if you want to step out into the working word with a newly minted degree and immediately bring in some dough, try pharmacy school.
from my experience with attorneys sitting on a jury or in a real estate closing or will writing I would say it is one of my last choices for profession.
Want to make good money? Be a nurse. You can go to a two year community college and then work as an RN if you pass the boards. Associate to RN degrees are everywhere and you can start close to $50,000 in my area, make all kinds of money on the side and if you are industrious become a nurse practitioner or clinical nurse specialist. You can work around a family very easily. There is even a program that is 9 months and cost $8000 to become a licensed practical nurse then you go on to get your associates and bachelors while you work.
At this point anyone that deals with healthcare will probably have a go of it as our population ages. Phelobotomists, x-ray techs, dental hygenists etc all need certificate to bachelors education but you do have to have a very good work ethic, and these are not the professions that are glamorous or well thought of so a lot of people ignore them. Weekends and nights are often where you start, and as I said you really have to work hard but the jobs are there in most locations and the pay is there.
Pharmacists and physical therapists like librarians need two to three years post bachelor education so that is a huge investment. I have no idea how people make it through med school, between the loans and the dedication required.
Several of my nephews and nieces are in college majoring in things like Literature, English, Biology and Art. Good luck with that. I asked them about their career goals and what they planned on doing with it the last time we were all together. One of them actually said "you can do anything with an English degree".
I think my daughter does ask a fair question.
We won't be getting any financial aid I suspect, and she wants to go to a top-tier school. This year, Princeton would run us ~$59,000 a year for tuition, room, board, fees, insurance, and travel. My daughter could easily earn $25/hour here with a high school degree and her amount of dedication and contacts, so that's $50k/year in income. She'd also be quite welcome to continue living here, so her living expenses would be not-much.
$109k/year in college costs + opportunity costs, for 4 years. That's ~$440,000. You could do a lot with that kind of money.
This is true. And if your daughter wants to stay in the area and start her own business, I'm sure she could be successful. But you must acknowledge she has her start with a 'silver spoon' in her pocket. She has wealthy parents who respect and support her (as they should) as well as their 'business sense' support, practical, built-in support the average young person does not. (coupled with contacts she might not have if it weren't for her parents) Your daughter, for all her intelligence and drive and ambition, starts her career on third base, so it's a good bet she will eventually hit a home run. I don't mean this in a disparaging way. I think it's great you can support and help your daughter achieve all she can. Our kids also have enjoyed advantages many do not. But they , and we, recognize these advantages as not the normal experience, and try not to compare their experiences against the average experiences of their classmates. Where my kids left school with no debt, most of their friends had some to enormous debt.
Our son choose to not work in the field of his education, although he will tell you he gained enormous value from his years at university. He is also critical of the whole educational process, but that is for another thread. He is successful now in his chosen field and couldn't be happier. Our daughter has found enjoyable and fulfilling employment, but is in the process of continuing her education because even here she must get that advanced degree or lose options in her employment. Silly, and even she acknowledges that, but since she doesn't make the rules, she is left to 'fill the squares' that are set before her. (not librarian, as it turns out)
The real problem comes about when a kid doesn't want to stay on 'the island' and utilize her parents considerable wealth and/or connections to start a business, but really wants to become a librarian, or a teacher, or a lawyer or whatever. The only path to those, and so many other careers, is through the educational system.
Frankly i think about 3/4 or more of the degrees demanded now for mid level income type jobs could be discharged in a two or three year trade school. We've gotten silly about degrees necessary, but again, the kids don't make the rules. But they sure have to play by them, or they don't get to play at all.
ApatheticNoMore
3-21-12, 10:19pm
Frankly i think about 3/4 or more of the degrees demanded now for mid level income type jobs could be discharged in a two or three year trade school
+1
But they've yoked themselves - voluntarily. Again, voluntary student loan debt is no more indentured servitude then choosing to voluntarily have a child. A person should work to pay for the care of that child for 18 plus years. A person should work to pay off their debts as well.
But how often have their 'wise elders' told them that the only way to get ahead is to get a 'good education'. We can't fault them for not being smart enough to see that that's not a guarantee if we're the ones that told them to do that. I think Gregg is absolutely right to worry that his youngest will waste that money/time if she goes into a traditiional 4 year college education, but so many parents aren't that smart and how many kids will actually think smarter then their parents?
from my experience with attorneys sitting on a jury or in a real estate closing or will writing I would say it is one of my last choices for profession.
Want to make good money? Be a nurse. You can go to a two year community college and then work as an RN if you pass the boards. Associate to RN degrees are everywhere and you can start close to $50,000 in my area, make all kinds of money on the side and if you are industrious become a nurse practitioner or clinical nurse specialist. You can work around a family very easily. There is even a program that is 9 months and cost $8000 to become a licensed practical nurse then you go on to get your associates and bachelors while you work.
At this point anyone that deals with healthcare will probably have a go of it as our population ages. Phelobotomists, x-ray techs, dental hygenists etc all need certificate to bachelors education but you do have to have a very good work ethic, and these are not the professions that are glamorous or well thought of so a lot of people ignore them. Weekends and nights are often where you start, and as I said you really have to work hard but the jobs are there in most locations and the pay is there.
Pharmacists and physical therapists like librarians need two to three years post bachelor education so that is a huge investment. I have no idea how people make it through med school, between the loans and the dedication required.
Several of my nephews and nieces are in college majoring in things like Literature, English, Biology and Art. Good luck with that. I asked them about their career goals and what they planned on doing with it the last time we were all together. One of them actually said "you can do anything with an English degree".
You're absolutely right. THere are jobs out there that pay well and don't require significant education. I work in insurance. I started as a temp 10 years ago. Today I make well above the national average income. Did I have the prior experience or some specific education? No. My degree is in music and general business. But I have the ability to manage details and the ability to read and understand a contract. My job is not going to be outsourced to another country anytime soon because intimate knowledge of the American business insurance market is critical. It's not glamorous and there aren't 50 kids willing to do internships for free at my company for every summer position available. So my job pays well and will likely exist until I'm ready to retire. And it's not particularly oppressive compared to what I hear other people complain about.
flowerseverywhere
3-21-12, 11:57pm
You're absolutely right. THere are jobs out there that pay well and don't require significant education. I work in insurance. I started as a temp 10 years ago. Today I make well above the national average income. Did I have the prior experience or some specific education? No. My degree is in music and general business. But I have the ability to manage details and the ability to read and understand a contract. My job is not going to be outsourced to another country anytime soon because intimate knowledge of the American business insurance market is critical. It's not glamorous and there aren't 50 kids willing to do internships for free at my company for every summer position available. So my job pays well and will likely exist until I'm ready to retire. And it's not particularly oppressive compared to what I hear other people complain about.
that is what I am talking about. Going to work every day, being on time, wearing the right clothes and doing the job assigned. Not glamorous and you probably won't "find yourself". But you will support your family and have a nice middle class life. I don't know when we went beyond this concept.
Well that's a rather pessimistic view. And I suppose this is where we differ. Again, I find nothing nefarious about, say, welfare, or SS, or medicare. The government (us) helps these people because we decided as a nation, we simply cannot let these people starve, living on the streets. I, and many others don't really see it as THE GOVERNMENT building an army of welfare queens for the zombie apocalypse, but a simple case of moral duty to not let out neighbors starve.
Again, you never answered why exactly you think the government wants people on the dole. How does it possibly benefit the government to spend money on food and medical care for poor people? The reason we do it no matter which party is in office is because we have poor people who desperately need the help, no matter who is in office. Have you really bought the line that one party is orchestrating this? Do you think we shuffle the poor people out when republicans are in office and just scoot them back in when it's the democrats turn?
Wow. To think poverty and old age and medical need is just a political issue? Is that how you see it? A theoretical 'let's toss them off of aid and see what happens' kind of thing?
Yea, the government wants to keep old people dependant on them because, uh...why is it again they do that?
Well, people dependent on the government are unlikely to vote in anyone who plans to change that. Hence Ron Paul is unlikely to ever become president. But most of our current elected officials will likely get re-elected.
And when the money is simply created by a printing press and loaned to the government by the central bank via it's member banks, at interest below inflation, it's easy enough to do.
I'm not convinced that the politicians who run our gov't are smart enough to make this happen, but I'm not convinced that they're not either.
mtnlaurel
3-22-12, 12:46am
that is what I am talking about. Going to work every day, being on time, wearing the right clothes and doing the job assigned. Not glamorous and you probably won't "find yourself". But you will support your family and have a nice middle class life. I don't know when we went beyond this concept.
I'll tell you when flowerseverywhere.... and here we go again... throwing the Boomers under the bus, let it begin with me.
My husband (b. '68) and I (b. '70) both have parents that are self-made successes, but they wouldn't dare advise us on anything, more than 'find something you love to do and it will all work out'.
It's been hard for things to 'just work out' when both my husband and I bought The Don't Worry, Be Happy Dream -- hook, line and sinker.
Maybe our parents didn't mean for us to go as far with the lessons they instilled in us as we did!
(I do realize DH and I are TOTALLY responsible for our choices as then young adults, not mommy/daddy)
I guess our parents had been so hen pecked by our Great Depression reared grandparents that they didn't think we should have to endure those lectures of practicality ---- things only get better in the ol' US of A, right?
You just put money in the market and it grows --- oh wait, no..... it doesn't?
My house can lose value????
Multiple years of hard work can mean nothing in the marketplace????
Signed,
History Major with Anthropology & Women's Study Minors
Degree serves as weeder outer for certain job descriptions, but definitely brought me great pleasure to pursue and is a generally useful discipline... wish I would have thought to get a business minor, would have helped me tremendously in work world.
Student Loan Paid Off via waiting tables until I cobbled together a career that had legs - never missed a payment through severe personal problems though... you will get very little sympathy here, keep on moving folks
__________________________________
Would we be talking about any of this if there were jobs out there waiting for not only our grads, but all the people with real world experience under their belt?
...Want to make good money? Be a nurse. You can go to a two year community college and then work as an RN if you pass the boards. Associate to RN degrees are everywhere and you can start close to $50,000 in my area, make all kinds of money on the side and if you are industrious become a nurse practitioner or clinical nurse specialist... .
I keep hearing that nursing schools are totally full and turning applicants away, so I don't think it's that easy to get in. But those who pursue it will succeed, like anything else.
I think that if there were more jobs and less defaulting/potential for defaulting, then NO, this would not be that big of an issue at all.
In fact, in all of my own soul searching on this over the past several months -- thanks to all of you -- I identified several things about myself:
1. I've actually done a damn good job of paying back my loans under difficult circumstances, and according to my friends, I'm further along than ANY of them in paying them back (comparing those who had the same amount of loans as I did, who may or may not have had similar difficulties, and so on). So, I should congratulate myself.
2. I really have a bee in my bonnet about my parents over this. I think this is because I don't feel that supported in what I'm doing here by them. I am asking myself why I want/need this -- what is the deal with that?
3. Number 2 is combined with the fact that I wish my business were more established already. LOL I want to be more successful RIGHT NOW. I am putting in the work, cutting costs, increasing revenue, and generally doing awesome. Nothing to complain about -- honestly! Yippee!
But I get impatient. Not only do I want it to be successful RIGHT NOW so that we can live well and comfortably, but I also want it to be this way RIGHT NOW so that I can start saving again aggressively and get this loan paid off ASAP!!!
I'm just not there yet. I know that I will be, but I want it NOW. ;)
----
I'm all kinds of cranky about it and need to work out that stuff, don't I?
I think that, for me, the money is symbolic of how I felt I wasn't valued. This is is why I want it gone -- any way possible -- so freakin' bad. To me, it's symbolic of how I let myself down, and how I dont' feel supported by my family. And I think -- for some reason -- that if it's gone, I'll really be free! Not just free of the debt, but free of the tethers of having done something that I shouldn't have, and free of my family's judgement (hey, I never said it was logical!).
So, here is how I see things panning out for us in the next 3-7 years:
1. Business continues to establish and become stronger and more profitable;
2. DH's own career takes off, providing us with income from that (he already generates income for both the business and his own contract work, though, which is cool. but it's like. . . a tiny amount of money right now. :) );
3. Once 1 is in place, then I'll be able to aggressively work on paying back the debt;
4. Once the debt is paid off, we'll begin to aggressively pay back ourselves, build up our retirement and savings accounts, and look at whether or not we want to buy a house or what (we aren't sure if we want to -- but if we do, we want it to be without a mortgage!).
And then, when we hit retirement age, we have enough money to support ourselves without work -- even though we will likely continue to work -- and that we can provide things for DS if we so wish, and so on and so forth.
And, we'll live well and simply in between -- because we value living simply.
ApatheticNoMore
3-22-12, 1:56am
I guess our parents had been so hen pecked by our Great Depression reared grandparents that they didn't think we should have to endure those lectures of practicality ---- things only get better in the ol' US of A, right?
You just put money in the market and it grows --- oh wait, no..... it doesn't?
My house can lose value????
Multiple years of hard work can mean nothing in the marketplace????
I'm younger than you but I had a depression era father. I heard it: "never put your money in the stock market" (hey that's actually good advice, wish I had listened). "We had a PhD that was washing dishes in the great depression ... a PhD washing dishes, that's how bad things were then". So I heard about losing everything in the market "the stock market is gambling! gambling!" and education getting you a dishwashing job (of course that part was definitely not assumed to be normal).
I've never been don't worry be happy, rather I'm a natural doomster. Unemployed? Better take any job quickly just to have one, the Greater Depression is surely around the corner and there won't be any jobs then ..... What could go wrong? Oh how about: everything? I guess I was trained to live in my Dad's era and unfortunately I think it may well come to pass.
Actually, english degrees are good solid degrees.
My husband is never at a loss for work as a writer -- truly. He currently has his contract gigs (which come in about 5 hours a week) plus he has overflow work that he does for two other companies that just do communications/writing for other companies (outsourced). He also does a little bit of ad-copy work for a local company on an ad-hoc basis to fill in any gaps. On average, he chooses to work anywhere from 10-20 hours per week, earning anywhere from $50-125 per hour (depends upon the nature of the work).
Right out of his master's degree, he got a job that paid well and had benefits, and he worked that job for a decade before moving here. He was promoted several times (and sought those promotions) and also did contract work on the side.
I graduated with the same degree (english) and had several job opportunities available to me upon graduation (foolish of me to go to law school for yet another reason!). The company that my parents work for needed several different positions filled -- one was archiving (which was tedious as all get out, but where I started), and then was data-entry, and then you would move up into report writing, and then if you were really good, into quality assurance for the report writing. While the entry positions paid about $30k/annum plus bennies, the report writing gave quite a jump up to $45k (start point), and if you actually moved to QA -- which happened for a friend of mine about 6 years after graduation -- she jumped up to earning $65k.
I would say though that so long as these english majors have composition sub-degrees (non-fiction writing, professional writing, composition, science writing, etc), then they are even more likely to be considered.
Now, I grant you that there are not a lot of jobs out there for ANYONE at this point, but an english major does actually have a decent shot at a job because writers tend to be in fairly high demand -- so long as the company can hire to begin with.
My husband managed a 10-person team of writers at his company of under 200 people -- which is a large writing department for that sized business. He then went into marketing where he did "special projects" for the executive team -- a job which he really enjoyed. He didn't have anyone to manage, but he certainly had a lot of work, and ultiamtely they'd asked him to assemble and train a team (and he chose mostly writers -- both in-house and those whom they hired), and then when he left, he set up a friend of his (english major) to take over management. I think they hired 3 recent english grads before he left -- and that's no small number for that sized business and in the economy as it is now.
Here, contract work is the most common form of work that people do -- period. Forget about trying to get a normal job -- everyone starts on contracts. I highly recommend that students look for these gigs. Just start working on a contract -- 6 months, 1 year, 2 years. Heck, even 1 month will work to get your foot in the door (particularly if you are doing it in addition to whatever else, such as waiting tables or working retail -- something I also have done over the years to make a bit more income). That's how my husband got started on his contract work, and it's great.
And, it's really helped us as we have been here!
I'm just saying that it's possible. It's also hard work and you have to hustle. But I think that's anyone these days.
Also, I have to say that aside from what I wrote before, it's really cool to segregate my feelings out from the debt.
I was talking to DH today, and he said to have the amount we had paid off by 2007 was no small feat -- and once we added in everything (principles, interest, and so on), we actually paid *a lot* of money back. . . in fact just over double what Midwest and his wife did by the numbers he gave. . . in that time.
And we did that while also paying down a mortgage, moving to living on one income, and doing a considerable amount of travel -- for work, pleasure and spiritual edification -- and while we lived very simply and within our means, the reality is that it afforded us *a lot*.
ANd I can be proud of that.
And, also, he says that once the business is humming of course we'll be able to do that again. . . and in several years, the rest will be done. We did that amount before and we can do it again in 5 years. :)
I feel lots better.
(but hey, if i qualify for discharge, i'm gonna do it. LOL)
Yes, Zoebird, it sounds like you are going up a big mountain--you've been climbing, climbing, climbing so you're weary. You're so focused on the climb you can't see just how far up you've come... and you'd love right now to just be done with the climb and sitting back at the bottom at the side of the pool with a margarita in hand!
So glad you've been able to think through your feelings about your situation. I know when I'm frustrated about my debt, some mornings an hour can go by when I'm just staring at my Excel spreadsheet just trying to will those numbers down. It seems insurmountable, but it isn't.
One thing I've learned digging myself out of $197,995 worth of debt (which doesn't include the mortgage) is when you think "I'm really strapped. I have nothing. All my money has to go to this horrible big hole" it creates a poverty mentality that is so counter productive. Approaching the debt from an attitude of lack, in other words, only seems to attract lack. Instead, if you turn it around and see how much you have--you have solid businesses, for God's sake, at work that you love! the "prosperity mindset" really changes what comes into your life...
I was talking to DH today, and he said to have the amount we had paid off by 2007 was no small feat -- and once we added in everything (principles, interest, and so on), we actually paid *a lot* of money back. . . in fact just over double what Midwest and his wife did by the numbers he gave. . . in that time.
I think it's helpful to look at numbers on a quarterly or even annual basis. I like to look at expenses that way and see where I can cut back. Or, if we've had a month of out of the ordinary expenses and we weren't able to make any investments, it gets smoothed over when you look at the aggregate numbers. It's the same with savings or debt payoff. Monthly numbers start getting large when multiplied by 3 or 12.
flowerseverywhere
3-22-12, 8:36am
I'll tell you when flowerseverywhere.... and here we go again... throwing the Boomers under the bus, let it begin with me.
My husband (b. '68) and I (b. '70) both have parents that are self-made successes, but they wouldn't dare advise us on anything, more than 'find something you love to do and it will all work out'.
?
well that is not what I told my kids and not what my dad told me. My dad (a child during the depression) told all of us to get an education where you could get a job. Three nurses, one social worker, one computer programmer. He was adamant we should be nurses so that no matter what happened we could work and not be poor.
I said the same to my boys and they became professionals but were encouraged to pursue sports, photography, art, music etc. on the side.
and Iris Lilly, I bet that nursing schools are becoming more difficult to get into. But what a great thing it would be if there was no nursing shortage like there was my whole career. You know, to stack the odds on your side one could work as a nurses aide in a nursing home or home health agency (talk about lack of glamor and hard work) but you will learn a great deal about yourself and work ethics. There are EMT classes, and other ways to get a foot into the door in a health profession. Hard work will pay off.
I have also read that engineering has a good job outlook, and there are many disciplines as well. Again, this is going to require a lot of studying and hard work to obtain.
you know when I talked to my nieces and nephews as I mentioned before, I asked what classes they were taking and what they entailed. One said that psychology was counted as a science because it was a lab, but the labs weren't hard, they were fun. So I guess that could be part of the problem too. Instead of taking Chemistry and Physics like I had to (how we never blew up the lab I don't know) having fun in pyschology lab is counted the same in some schools. They all laughed and talked about the "fun" classes they were taking. Now I had my share of fun, but not in the classroom.
So it is all in your attitude. I still think that if you work really hard you can get ahead, but at this point the hard part is getting a foot in the door so you can prove yourself.
by the way when one of my kids graduated he sent out 120 job applications with custom cover letters. It was all he did for months but it landed him several good job offers. I know people who have been on unemployment for six months who haven't sent out that many.
Gregg,
I can see how it would be seen as hyperbolic.
But, I look at my own situation from another POV. Loans go into default -- lets say by falling on hard times -- and those hard times may never recover. One of my friends had a stroke at 25. She lost the knowledge she'd learned in school, and her disabilities make it difficult for her to make the kind of income she was making before the stroke. She does work, but it basically covers her living expenses and a very, very modest retirement. Her debt is higher than mine and in default.
Neither of us can foresee any possibility wherein she'll ever be able to come up with the money to pay the credit company outright. She makes payments every month -- just like I do. She works very hard within her capabilities. For whatever reason, she doesn't qualify for the various disability discharge options (she's asked a lawyer too!).
As far as we can tell, she has the same options I have:
1. pay every month for the rest of her life (slavery/indentured servitude?)
2. pay every month and win the lottery/etc to pay off the debt;
3. not pay, get the judgment against her, which would be a lien against the estate eventually.
Which one creates better character?
And yes, thanks for asserting that your generation did us a disservice there. :) It really is helpful to hear.
Again Zoebird, we simply can't concentrate on any individual case, especially the worst case scenario kind of cases. Yes, we absolutely need provisions for someone in your friend's position. I don't think anyone here would oppose loan forgiveness in cases where a person loses their capacity to to earn an income, but that is not the norm. The law simply should not be written as if everyone with student loan debt had suffered a stroke at age 25. You both deserve a compassionate response to your circumstances, just not the same response.
There are compelling reasons to offer a temporary hiatus from payments to someone who loses a job (until they are able to find a new one). It is absolutely reasonable to design streamlined methods for combining loans and to have the final product set at the lowest possible interest rate. It makes perfect sense to give people every opportunity to pay the loans off early if they are able. Forgiving or proportionally reducing the debt of an individual who suffers a major set back is not only compassionate, but logical as well. But that's about it.
I will almost never say that there is something that might better be handled by the government, but this could be the case. Please note: I said "better be handled by", not "be handled better by". There is a significant difference. Anyway, if student loans were actually made by a government entity, rather than simply guaranteed by, it could be done with a single set of rules. The ultimate collection vehicle for default loans is already in place (the IRS). It could also reflect a very low interest rate. Considering the somewhat theoretical long term benefit of increased tax rolls, I wouldn't even oppose interest free student loans. If you do that a lot of dollars would be freed up to stimulate other parts of the economy. To get it on the record now, this is far different than government involvement in something like health care. There is no heavy R&D in this industry, no great life saving innovations are going to come from the student loan industry. Not the case with healthcare. But that's a (few hundred) different thread(s).
One thing that hasn't been mentioned are the fees and penalties involved in student loans - if someone has trouble making payments, these can balloon a student loan very quickly, and are also not dischargeable.
ApatheticNoMore
3-22-12, 11:45am
The whole loan model is broken, you shouldn't have to take out massive loans to get a college education and government handling of it won't help anything (not of course that government backstopping private loans is really any different). The answer, I don't have one only this: you could have the federal government finiance education instead - only the U.S. federal government is so corrupt at this point that I really don't advocate it. What I do advocate is state colleges and community colleges but hey nobody wants to raise state taxes to pay for that, so too bad I guess. :(
mtnlaurel
3-22-12, 11:52am
Yes, Zoebird, it sounds like you are going up a big mountain--you've been climbing, climbing, climbing so you're weary. You're so focused on the climb you can't see just how far up you've come... and you'd love right now to just be done with the climb and sitting back at the bottom at the side of the pool with a margarita in hand!
So glad you've been able to think through your feelings about your situation. I know when I'm frustrated about my debt, some mornings an hour can go by when I'm just staring at my Excel spreadsheet just trying to will those numbers down. It seems insurmountable, but it isn't.
One thing I've learned digging myself out of $197,995 worth of debt (which doesn't include the mortgage) is when you think "I'm really strapped. I have nothing. All my money has to go to this horrible big hole" it creates a poverty mentality that is so counter productive. Approaching the debt from an attitude of lack, in other words, only seems to attract lack. Instead, if you turn it around and see how much you have--you have solid businesses, for God's sake, at work that you love! the "prosperity mindset" really changes what comes into your life...
zb -- just to ride Catherine's coattails..... if the worst thing you have to worry about early adulthood decisions is getting a law degree - that's a pretty useful mistake to make!
Just think how much $$ you will save over your lifetime in attorney fees, etc and your abilities to know how to really make things happen (edit to add: especially with your franchise plans).
My mom was an attorney and her knowledge and abilities served our family very well outside of her work.
Yossarian
3-22-12, 12:57pm
Yes, we absolutely need provisions for someone in your friend's position. I don't think anyone here would oppose loan forgiveness in cases where a person loses their capacity to to earn an income, but that is not the norm.
It's probably more generous than that already. 523(a)(8) contains a hardship exception:
See https://docs.google.com/viewer?url=http://www.ca8.uscourts.gov/opndir/11/08/102032P.pdf&hl=en_US&safe=on&chrome=true
But how often have their 'wise elders' told them that the only way to get ahead is to get a 'good education'. We can't fault them for not being smart enough to see that that's not a guarantee if we're the ones that told them to do that. I think Gregg is absolutely right to worry that his youngest will waste that money/time if she goes into a traditiional 4 year college education, but so many parents aren't that smart and how many kids will actually think smarter then their parents?
Ah, the sins of the father ;-)! Is it right to hold them accountable for their childrens mistakes? Especially when those "children" were suppose to be intellegent adults who were believed capable of handling all the other adult decisions of life: to vote, drive, live outside the home, join the armed forces, marry, have kids, invest, work, and even drink and get into an R rated movie. My (our) generation had it's own beef with our parents. Our parents telling us (at least the women) that we didn't need an education, a career, a job, skills out side the home, our own money, investments, savings, retirement funds, or to be able to provide for ourselves or our children because we would marry and be taken care of for life. How many of those women found themselves as single deeply impoverished Moms with no money, no skills and no financial future in old age because their husbands left the family and they only could work a low paying job? How many of those 50 plus aged women are still living in poverty with no hope of retirement or even a job that will meet more than their basic needs? That's the legacy "our" parents left us females - and to a lessor degree the males who believed that working 30 plus years for GM or GE or Bethleham Steel would gareentee them a pension and medical benefits as well as a good job for life. Yet I wouldn't blameparents for that - and don't expect the government to hand over billions and billions of dollars to every single woman in the country so she could quit working, stay at home with her kids, and have a nice retirement funds in place because she believed the things her parents told her she "needed" (or not needed in this case) to have a secure future.
It's probably more generous than that already. 523(a)(8) contains a hardship exception:
See https://docs.google.com/viewer?url=http://www.ca8.uscourts.gov/opndir/11/08/102032P.pdf&hl=en_US&safe=on&chrome=true
I really wish you'd stay out of these discussions, you with your on point and sensible information. We as a country prefer to wallow and blame. :D
How about a middle ground? Student loan debt is dischargable 20 years after graduation thru the normal bankruptcy process and during the bankruptcy process we take all your stuff. You can't repo the knowledge, but you can take 20 years of earnings gained through the knowledge.
That would be good but I can see a big downside in that people would have no incentive to actually make the student loan payments during those 20 years knowing that they could be discharged then. And banks, knowing that they may never see a penny of that debt repayed, will have no incentive to make future student loans. Since there is no asset to take back like you'd have with collateral - like a house or car or other possessions - and no way to "force" the student to make payments short of garnishing their wages via a court order (and I don't think that can be done), many would just ride out the 20 years anbd default - maybe hide their other assets (or put them in protected things like retirement accounts) to save them from repossession. I personally feel the best thing to do, and what could be done for the housing loan situation, is to just restructure the debt. lower the interest rates, quit tacking on additional fees, makle the payment a fixed % of the person's total income (say 10% or 15%), and just have that payment continue for the life of the loan. Unlike Zoebird, I don't think paying 10% or 15% (what it is now) of a person's income (especially since it's "disposable" income and not total income) toward student loan debt is indentured servitude in any way, shape or form.
That would be good but I can see a big downside in that people would have no incentive to actually make the student loan payments during those 20 years knowing that they could be discharged then. And banks, knowing that they may never see a penny of that debt repayed, will have no incentive to make future student loans. Since there is no asset to take back like you'd have with collateral - like a house or car or other possessions - and no way to "force" the student to make payments short of garnishing their wages via a court order (and I don't think that can be done), many would just ride out the 20 years anbd default - maybe hide their other assets (or put them in protected things like retirement accounts) to save them from repossession. I personally feel the best thing to do, and what could be done for the housing loan situation, is to just restructure the debt. lower the interest rates, quit tacking on additional fees, makle the payment a fixed % of the person's total income (say 10% or 15%), and just have that payment continue for the life of the loan. Unlike Zoebird, I don't think paying 10% or 15% (what it is now) of a person's income (especially since it's "disposable" income and not total income) toward student loan debt is indentured servitude in any way, shape or form.
Discharge under my hypothetical would be as part of an overall bankruptcy and involve losing all the other stuff they had gained since graduation.
For most of the population, the downside of losing 20 years of accumulated equity would outweigh the upside of debt discharge.
I don't disagree with your solution either.
Discharge under my hypothetical would be as part of an overall bankruptcy and involve losing all the other stuff they had gained since graduation.
For most of the population, the downside of losing 20 years of accumulated equity would outweigh the upside of debt discharge.
I don't disagree with your solution either.
Yeah but if everyone was like me, my 20 years of accumulated wealth would be hidden off-shore somewhere and untouchable! What house in Switerland? What Swiss bank account? No that's not mine - all I have is this ratty old Goodwill fold-out couch in my rented room and $25 in my bank account :devil:
flowerseverywhere
3-22-12, 3:06pm
Iris Lilly, you crack me up.
but I will say that East River Guides hardship article changes everything. If there is already a provision for those that have truly extenuating circumstances then I am not sure what the problem is. Sure it is hard but life is hard. Just ask anyone in a refugee camp or in Syria or most of Africa who would give anything for half the opportunity that we all have here in this country.
Yeah but if everyone was like me, my 20 years of accumulated wealth would be hidden off-shore somewhere and untouchable! What house in Switerland? What Swiss bank account? No that's not mine - all I have is this ratty old Goodwill fold-out couch in my rented room and $25 in my bank account :devil:
I don't think most people are going to want to tempt the IRS given the penalties for non-disclosure of foreign accts. Just saying. Nice creativity though.
I don't think most people are going to want to tempt the IRS given the penalties for non-disclosure of foreign accts. Just saying. Nice creativity though.
Yeah, the darn IRS and their new foreign asset disclosure policy ;-)! Gone are the good old days when a girl could hide her assets off shore and no one would be the wiser. I guess it's back to hiding my money underneath the mattress - or in the oven which I never use :-)!
Greg,
I understand you there. I agree with the idea of interest free loans (an aspect of what SA did as part of their plans/programs as well).
I kind of look at the whole situation this way. I know that there are students who are doing just fine. I mean, looking at what I have accomplished -- assuming that my loans hadn't gone into default -- I would be considered thus. I mean, right now -- having looked at everything -- truth is that I don't need it.
Yes, I do feel that I was defrauded by the bank (I think I'm mostly chapped that it's in default). But, by the same token I have done well, and to think that I have another 1/4 of the total remaining in a CD making nice interest -- that's nothing to sniff at!
So far, I think many of the programs are great. The public service discharge is already in place, as are many disability ones, and I think that's great. Also, if your creditor can't provide an adequate paper trail, then you can get the debt discharged that way, too (I had a couple of my student loans discharged this way -- which was really interesting because we never went to court, they just sent me a letter saying "this debt is discharged" since they couldn't provide the paperwork).
I think that I would like to see loans more difficult to get (as Midwest said before, this plays into how the market works and I think it's responsible for ballooning education costs), and I would like to see them move into some form of discharge that would work if a person does have to file for bankruptcy (maybe a 'deadline' on this? such as -- you have to carry/pay the student loans for 10 years, and if you fail for bankruptcy within, it wouldn't be discharged, btu after it would be considered?).
Most people do not want to file for bankruptcy -- and I never have. But I would be very happy with that protection being in place (as a matter of justice).
That being said, I do know that there are a lot of students right now who are under a huge burden. Taking my generation out of the equation -- because most of us came to work in a good economy and have apparently done ok -- this new batch are coming into a very bad economy indeed.
If they could get the 10/10 -- I think it would be good for them. And I would much rather that they have a shot at the opportunities I had -- since I got started when the economy was good and then lived simply, invested well, and paid down a lot of debt.
The thing about 'discretionary income' cap can get a bit interesting. Discretionary income is income after expenses. Not a lot of people actually have that these days. Particularly not new graduates.
I was reading an article the other day that talked about how many hours a person had to work -- if they earned minimum wage -- to make the average monthly rent on a modest (two -bedroom, they were assuming a family) apartment in a given state. Some states a person would have to work between 80 and 140 hours a week to *make rent*. That doesn't include food, power, water, waste removal, clothing, transportation, etc. That's *just housing*.
So this living wage thing is at issue as well.
I'm not saying that I support how many people spend when they have good jobs and stuff -- demonstrating or increasing their expenses -- but I do think that when we are looking at people who are underemployed (not enough hours) or paid minimum wage, there may not be much "discretionary income" and what there is. . . well some of it may be needed for other things.
I think this sort of bill could help them, for sure.
Perhaps it's just a matter of who qualifies.
ERG: I'll forward that article to my friend. She's just been making her payments, and hasn't looked at it in a while (not for a good 5 years) perhaps her situation has changed!
Spartana:
In essence, I agree with you -- but what is the life of the loan?
Right now, all of the things you mention are in play --- wage garnishment, Social security garnishment, the ability to get courts involved in determining what the payments will be (necessary for wage garnishment, btw), and this is all usually based on discretionary income without a cap. The issue in question is the life of the loan.
If the payment that a person can make -- whether it's garnished from their wages or made as a payment -- is so minimal that the loan would never effectively be repaid (i.e., it can only cover interest, etc), then the "life of the loan" is the "life of the person."
And this is where we are talking about indentured servitude/slavery. The person can never get out from under the debt -- it cannot be discharged for hardship (they have a job, are able bodied, etc -- it's just not the income that they would have made in a healthier economy perhaps), nor can it be discharged for public service. Nor can they effectively pay it back beyond the payments that they can make.
And bankruptcy was developed to avoid this as a matter of justice.
This bill creates two caps: life of loan and amount of discretionary income used to define the payments.
I think that both are too low, honestly. I would have no problem with 30 years and 30% -- for example. In regards to the 30%, this can go through checks -- say every 3-5 years -- to see if the income of the person has increased, and thereby increase the payments proportionally. And, I would estimate that these could be negotiable -- such as if you do 30 yrs you'll get a lower payment, if you do 15 you'll get a higher one, but it would equal the same and try to pay back as much of the loan as you can in that time.
I agree about fees/etc!
For me, a mortgage is no problem as far as a life span. It's 15-30 years. I think it would be fine to pay something back from age 21 to age 51. But, I would love to see it easier for people to pay back the principle faster -- if they wish. That is what lead my loans into problems -- even though I could pay it back sooner, the weird dealings with the bank and several confusing forms and having do it several times and having al own officer who didn't know what was what, etc etc etc was really damn frustrating. LOL
If it were clean and simple -- as it often is with a mortgage until they sell it and what not -- then I would say yes, lets do that.
I have no problem with the life-span of the pay back being longer, or the percentage of discretionary income being higher.
Catherine:
Thanks. I try to take stock, but instead of dollar amounts, I just think in terms of my percentages: 30% of principle paid off; 60% remaining, with 20% in savings. To only have 20% of it saved up over the past 3-4 years is a real PITA! LOL
Why? because for some reason I feel like it should be farther along, even though I decided to take the risk and do these other things instead: have a baby, start my business in earnest.
I really believe number 2 will bring in more income (it already is bringing in more income than ever before for me), and if we didn't have this kid, DH could work full time and it would have happened already (pay off, that is).
But because we have this delightful little boy (no regrets!) DH can't work full time, so things are more slow.
Is DS worth carrying the debt longer?
YES!
But I can see why people put off having children. I'd wanted to wait until the debt was paid off, but that would mean that we would be having him NOW or in three or for more years -- and by then, what about fertility? Yeah, not a good plan.
better to have him, and then get the business rolling and once he's in school DH will work more, and then we'll be able to have even more revenue (DH will likely cover living expenses) and I will be earning more, too, and we should be able to be our normal selves and get it done.
But I'm impatient! :D
Hello:
I’m new here. This is my 1st post. But I’ve been lurking. I think this topic is important.
I am a public school teacher. I am 47 years old and this is my 13th year teaching. I graduated from grad school with 65K in school debt bc my state wouldn’t let me become a teacher w/o a graduate degree. I have so much school debt because by the time I went back to college to try and make something of my life, I was 28 years old and my mother didn’t want me living at home. So I was working as a teller full time while I went to school. I used my teller salary to pay my rent and bills. I took Federal Student Loans to pay for college. My parents didn’t believe it was their responsibility to pay for the college education of their children.
My school debt is currently 92k because for the first 11.5 years after I graduated, I couldn’t afford to pay the $751. monthly payment that would have begun my 30-year repayment term because such a large payment would have been approximately 50% of my take home pay. So I put my federal loan in economic forbearance.
A year and a half ago I heard about the Public Service Loan Forgiveness Program and immediately signed up for it! I was so excited because it meant that my payments would be based on my income and at that point would only be $437. per month. (They’ve since gone down a bit temporarily. See below for explanation.) I’ve made 18 payments and I will have my debt forgiven in only 8.5 more years! This is so much better than the $1400. per month I would have paid for 20 years if I were in standard repayment. (The total debt has gone up because the interest capitalized while I was in economic forbearance.) My interest rate is 7.78% and by law it can’t be lowered. The law also states that if I were to declare bankruptcy (this is my only debt aside from my primary mortgage) I could not include this student debt in the bankruptcy. I’m ok with this because I am able-bodied and I really think it would be immoral for me to declare bankruptcy anyway.
I make 45k per year. I used to make 46.5k but 2 years ago my school division cut teacher’s salaries by 2%. This year they are saying they might give us the 2% pay cut back. While I only have 13 years teaching experience, I am currently within 8k of the top of the salary scale in my school division. So it is very unlikely that my income as a school teacher will ever get much higher.
I am single and run an entire household on my 1 paycheck. That includes my mortgage. I don’t have a car payment. I have been driving the same Toyota Corolla for 12 years. I only have this one job because teaching school takes a lot of time. I work all day in the classroom and then come home and spend several hours every evening planning my lessons for the next day. On the weekend I grade papers. During the summers I get involved in professional development opportunities. Currently I am involved in a Federal Grant for teaching social studies. That will take several weeks of my summer vacation. I will also be taking a class this summer in teaching economics. It’s a good thing I like learning because staying a good teacher takes a lot of my time as well.
For two summers straight, I also worked as an assistant manager at a swimming pool. I put every paycheck from that job for both years to paying off a credit card with a really high interest rate. And I did it! In addition, to save money, I don’t have cable TV or a smart phone (my cell phone is my home phone and it costs me $30 per month.) I have no money allocated for an “entertainment” budget. If I want to watch a movie, I must check it out of the library. It’s a good thing I like to cook for fun because I never go out to eat unless someone takes me out for a treat. Also it’s good that I neither drink nor smoke bc I’d never be able to afford that!
I am so grateful for the current PSLF program. If I had not found this program I would have had to continue in economic forbearance for the rest of my life or at least another 20 years until my mortgage is paid off. Then I would have had to pay my mortgage payment money to my student loan for the remainder of my life bc by then I wouldn’t have enough lifetime left to ever pay it off. Even if they don’t improve the program by passing this recently introduced House Bill in 2012, I’m so happy they have it in place for people like me.
I did have a choice though. When I first graduated from college with a degree in political science, I thought about going to law school. I took the LSAT, applied to several schools and was accepted! If I’d gone to law school instead of becoming a teacher I’d probably be making 5 times what I’m making now and this would be a moot point. I’d easily be able to make any student loan payment.
But I decided that the most important thing to me is education and helping children. I am so grateful that there are enough people in the government who care about children and education who are willing to look out for teachers like me. I really hope they expand this program by passing this bill so that other people who are in tough economic situations because they chose to spend a lot of money on getting an education can also have a light at the end of the tunnel.
I know this was lengthy. And probably TMI. I just wanted to put a real face to this issue by showing someone who really needs and benefits from this program and show how others connected to me can benefit by my benefiting. Thanks for reading.
I wouldn't necessarily say that you would be making more as a lawyer. Most of my friends are a decade out, and making between $50 and $60K. Most have government or government-related jobs, some work in industry (i.e., legal departments for oil company for example) and they make slightly more (up to $80k).
Three of my friends are "well off" -- one had no school debt (his parents didn't believe in paying either, so he worked his way through), worked for a judge, became a criminal defense attorney, and earns a comfortable income around $100k (after business expenses, etc). My other friend worked his way through engineering school, then law school -- working for the same engineering firm the whole time. They paid his whole way and he earned a comfortable income. He currently earns around $100k working for this same company and doing their legal stuff in house. My third friend joined his fathers (small) firm and when his father retired, he took over his father's partnership -- and earns around $100k.
Honestly, it's a great living -- but it's not 5x what you earn now. It's about 2x. :) And your debt is lower. :)
Welcome bunnys! Thank you for your story. It always helps to get first person experiences. It sounds like you have a workable plan. Great! Paid in 8 years! That's fantastic. I'm sure your story isn't all that unusual. Unfortunately, now days, any one who wants/needs to go through university for their career choice is spending a lot of money. Up front or in debt, college costs are astronomical. Even for what we pretty much consider average white collar jobs, teacher, librarian, etc... the incomes of these professions just don't warrant the extraordinary costs of the degrees. I'm afraid we are heading towards the rear, so to speak, in that only the wealthy will be able to afford college.
The thing about 'discretionary income' cap can get a bit interesting. Discretionary income is income after expenses. Not a lot of people actually have that these days. Particularly not new graduates.
I was reading an article the other day that talked about how many hours a person had to work -- if they earned minimum wage -- to make the average monthly rent on a modest (two -bedroom, they were assuming a family) apartment in a given state. Some states a person would have to work between 80 and 140 hours a week to *make rent*. That doesn't include food, power, water, waste removal, clothing, transportation, etc. That's *just housing*.
In regards to establishing the ability to repay a loan it is not the minimum or low wage folks that are the problem. We already know someone making $8 or $9 an hour won't have anything leftover, but even in a poor economy most college grads are not swimming in the shallowest end of the pool for very long.
"Discretionary income" is a problem because it is so vague. If two people make the same wage, but one rents an apartment for $500/month and the other buys a large home and has payments of $2,500/month the first person (for the sake of this example) would have $2,000/month more discretionary income. Should they pay more because they decided to live more frugally? Should the 2nd person get a break because owning a house supports the economy? Should they get a break simply because they decided to spend more money? My answer would be no to all the above. Most of us do some kind of dance with figures around April 15. Getting to adjusted gross income is a process very similar to arriving at someone's discretionary income. Those kinds of figures usually do not provide an accurate reflection of what is really going on because they are so easy to manipulate.
I don't mean to sound callous, but at some point things get talked out. Simply put, people take out loans. If there is any doubt that they might not have the ability to repay those loans they shouldn't take them out in the first place. If they do take the loan they should repay loan. The borrower's youth, ignorance, overwhelming desire to possess a degree, peer pressure, hair color, etc. at the time the loan was granted has no effect on that. Their discretionary income should be whats left AFTER the loan payment is made.
flowerseverywhere
3-23-12, 10:29am
but even in a poor economy most college grads are not swimming in the shallowest end of the pool for very long.
unless they want to be. I know several masters prepared people who wanted jobs with little responsibility and lots of flexibility. One makes $16,500 per year (I know because it is a state job and you can look up state employee wages in NY.) I certainly don't think that the rest of us should shoulder the responsibility for her student loans from a fancy private university. Each situation is individual and Gregg I so agree with you on this one.
mtnlaurel
3-23-12, 10:49am
Maybe a legislative body should put forth Mandatory Attendance of a Panel Seminar entitled "This is what paying your student loan back really looks like" before a student can take out a loan
Now those are scare tactics I could live with....
Maybe a legislative body should put forth Mandatory Attendance of a Panel Seminar entitled "This is what paying your student loan back really looks like" before a student can take out a loan
Now those are scare tactics I could live with....
Tough loans? Lol.
ApatheticNoMore
3-23-12, 12:09pm
unless they want to be. I know several masters prepared people who wanted jobs with little responsibility and lots of flexibility. One makes $16,500 per year (I know because it is a state job and you can look up state employee wages in NY.)
+1 yes, lots of people with masters who could easily earn my income. they don't want to be corporate drones though. odd that :)
unless they want to be. I know several masters prepared people who wanted jobs with little responsibility and lots of flexibility. One makes $16,500 per year (I know because it is a state job and you can look up state employee wages in NY.) I certainly don't think that the rest of us should shoulder the responsibility for her student loans from a fancy private university. Each situation is individual and Gregg I so agree with you on this one.
Exactly! Many people with student loan debt are choosing not only to pursue lower paying jobs in order to follow a dream, but are purchasing other things with their earnings like houses, cars, choosing to have children, retirement funding, etc... before paying off the student loans. Even people who make a higher salary or choose to work a second job choose to fund other things BEFORE even attempting to take on student loan debt at a higher rate than is required. I personally think that a student loan is a great loan - one anyone would love to have on their house. I mean a loan that one doesn't even have to begin repayment on for 4 years or longer? A loan that can be deferred for years if financial hardship? Payments that can be lowered if needed? And a loan that has the monthly payment amount tied to a very small percentage of disposable income for re-payment? Heck, who wouldn't want a loan like that?! If it were a regular loan amortized for a fix rate payment for 30 years like a home loan, I believe more people would work towards paying that off sooner rather than later. And pay it off BEFORE they used that income to purchase other things - consumer goods, houses, cars, saving for retirement, starting a family, etc... - or at least continue to pay it off in conjuction with other loans and financial things they choose to take on. Yes the payments would be higher, but then a person who is just out of college can live in a shared rental, drive an old car, eat rice and beans and beans and rice, work a second job, and hold off on future financial plans until they are in a better position to do so - and begin paying off the student loan debt. While I understand Zoebirds arguement that the low repayment and deferral ability that student loans have creates basicly indentured servitude for life, I disagree with that. Because, unlike indentured servents who are locked into a pro-scribed service 24/7 for years with no or little pay, and who, in most cases, have little hope of ever advancing beyond their employer's walls to have anything for themselves because of the financial structure of that life, most graduating students aren't forced into a pro-scribed work life, and therefore have the ability to pay more toward their student loans by making small temporary sacrifices in their life styles and deferring personal gratification for other things until they can afford them.
Spartana,
but that's the whole argument.
because of student loan debt, people are choosing to NOT do these things as much as they might.
i was talking to DH, and we were talking about how if we didn't have the debt, we might very well have more children -- because we would be able to have more disposable/discretionary income. We are looking at adopting.
But not until the debt is gone -- which will hopefully be in 5-7 years. Which means DS will be 8-10 yrs old, and we might look at a sibling group with an eldest at age 7-8 (if DS is 10) -- probably international, which I think is a $20,000 affair at the least.
Spartana,
but that's the whole argument.
because of student loan debt, people are choosing to NOT do these things as much as they might.
i was talking to DH, and we were talking about how if we didn't have the debt, we might very well have more children -- because we would be able to have more disposable/discretionary income. We are looking at adopting.
But not until the debt is gone -- which will hopefully be in 5-7 years. Which means DS will be 8-10 yrs old, and we might look at a sibling group with an eldest at age 7-8 (if DS is 10) -- probably international, which I think is a $20,000 affair at the least.
But isn't that the case with ANY type of loan? Or even when you are trying to save money? You delay doing things or incurring more debt until you can pay those loans off or save enough money. When I had a home loan (as well as having to pay ex-DH his share of the house when we divorced) I had to delay doing many many other things, even completely put off doing certain "dream" things forever. I had to get roommates and live very spartanly until I could get some of those things, like the ex-dh, paid off. That's how it is for everyone who is in debt (or how it should be IMHO), you have to delay things to pay off your debt. Or find a way to make more money to pay it off sooner so you don't have to delay things. I just think this is one of those topics that we will forever disagree on and we should probably just agree to disagree. And I certainly don't fault you for taking advantage of any program out there that allows you to discharge your debt or lower it. I'd be the first in line if it was me. But I disagree that those programs should exist. If the war ended (the stupid war) I'd rather see that money go to social programs for all like universal healthcare. So I'm not saying you're wrong - of course I would never say that - just that I'm right :devil::devil::laff::laff: (joking of course as I respect your opinion even if different from mine).
Spartana,
but that's the whole argument.
because of student loan debt, people are choosing to NOT do these things as much as they might.
I'm resisting making a "have your cake and eat it too" comment because I know that isn't your intent, even if the argument sounds that way. Still, at some point it is going to boil down to the choices people have made. Not every choice one would wish for is going to be available. If people wish to pursue a career they love that just happens to require an advanced degree, but doesn't pay squat, I have no problem whatsoever with that decision. If they want me to subsidize their choice I have a big problem with it. And make no mistake, if these loans were to be written off it is me and several million tax payers and shareholders like me that will ultimately foot the bill. There's no free lunch here.
I would have no problem telling someone to make a different choice and then, once they have the wherewithal to pay for their dream, go for it! But don't do it before that because you can't afford it. If that means you get your JD or MD or PhD at age 50 instead of 30, so be it. The world will survive and so will you. No one is entitled to a dream if they're trying to make someone else pay for it. This is not a Utopian society. Sometimes people are going to be disappointed because they can't have what they want. Sorry. They can choose to work for it in a different way or give up and move on to something else. What they can not and should not do is ride the coattails of everyone else in the society, many of whom are busting their hump doing something that very well might not be their first choice because they understand that dreams sometimes have to take a back seat to responsibilities.
ApatheticNoMore
3-23-12, 5:19pm
I hear you, like I say many of those with advance degrees and the loans to get there are working more interesting but lower paying jobs than me. They don't want to do corporate. Well you know I just love it. Ok no ... but it has paid the bills. Perhaps someday I'll walk away too, ironically if I wanted more education I would only consider if I could somehow get there via state colleges (ie where I could pay my way).
That the situation with loans and stuff is all messed up from the get go, yes. But stuff like this doesn't even FIX (or even reduce) the problem going forward, so that less needs to be taken out in loans in the future. It just gives a few people a bail out. I mean perhaps if the bailout came with some future solution for the next generation ... but it doesnt.
There are many good points here, and I haven't studied the bill, but I do know many people who are struggling with how to pay for an education (their own or their kids, or both). I don't know if anyone has made this point already, but tuition at 4-year public institutions has gone up (http://trends.collegeboard.org/college_pricing/report_findings/indicator/Tuition_Fees_Over_Time) by 900% (I sure would like to make that number larger, but don't know how) since most of you were in college, assuming you are in your 40s, but you're probably older and your education was EVEN CHEAPER. That's inflation-adjusted dollars, people -- an increase of 650 points above inflation since 1982, actually.
I'd like to know where these "many people don't want..." statements come from. A poll? An impression based on the vast numbers of people you know? Here are just a few of the horror stats for young folks these days.
Imagine that tuition you're so proud of paying-as-you-went was increased by 900%, like a giant hamster (http://www.youtube.com/watch?v=bqz3R1NpXzM&feature=player_embedded#!). Then imagine you just got out of high school, and your parents are folks who believe they shouldn't pay for your college. How could you possibly go to college if you did not get a loan?
You could get a job first, save up and then go... so let's see what kind of an income you can get... hmmm, well it's 40% less than it would be if you got the job AFTER the degree. And what are the chances of getting a job now? Well, employment is at 52% for your age bracket -- the lowest EVER on record. If you're a young black man -- fogetaboutit - your unemployment rate is TWICE that of whites.
So you can hang out in your parents basement... or you can get a loan. The amount of Federal loan you can get has been ever-shrinking. Say, maybe 40% of your tuition if you're lucky. So your average interest rate would currently be about 8.2%, assuming a 50/50 split on a $30K loan. Basically, your parents had similar numbers when they were buying their HOUSE in 1978. That's your choice: a home or an education. Your parents, of course, got to get both as their tuition cost was maybe a $600, and they graduated and got jobs at an average of $20/hour, with pensions (your father did; your mom got $13.)
You should be able to pay your loan off in 10 years, though, assuming you can get a decent job when you graduate, if you're frugal and have no set-backs, children, or medical issues. Of course, you'll need grad school if you ever want to get promoted. And you will, because for the next decade you'll be making 10-15% less than peers who got jobs before 2008, thanks to ‘cyclical downgrading.' (http://www.nytimes.com/roomfordebate/2011/05/24/the-downsized-college-graduate/young-workers-in-a-wage-rut-for-years) Or there's always the army... go to exotic places, maybe have to kill people, come back with brain injuries and PTSD, but you'd get a free ride for school. Your unemployment rate goes up to 29% once you get out, though. Yep, kids sure have it easy these days. Slackers and whiners! :devil:
ApatheticNoMore
3-24-12, 3:36am
Who here is arguing that young people are slackers? I mean really is there a single person arguing that? And how does the bail out solve the education costs problem going forward? It doesn't. Loans are maybe as much a part of the problem as the solution. And really why are loans, even on the federal level, even considered preferable to direct government funding? Is the plan going forward really to fund everyone's loan no matter how expensive for which everyone only pays back a small amount? Not a bad deal for the students. But who gets paid the full amount and who eats the loss? If the loans are still funnelled through private entities then this is a naked government subsidy for private entities - naked transfer of taxpayer money to private entities. Pure corporate welfare. If the loans are all government backed then the loans really amount to the same thing as direct government funding of education. Fine, they have more direct government funding in Europe (and the young still can't find jobs, but they are educated affordably).
Why I'm distrustful of that in the U.S. is because the government here (in Europe too maybe but to a lesser degree i think) is a massive corrupt fascist plutocracy empire. This article is why I say the federal government in education has risks, perhaps I exagerate (I don't know for sure how it would work out just has risks):
http://www.tomdispatch.com/post/175519/tomgram%3A_michael_gould-wartofsky%2C_class_of_2012_meet_the_class_of_1984/
There is no easy way to entirely remove them from education now. That's why I said the only half feasible good plan I see is: fund the state and community colleges at the state level and community level. Pay the taxes (also reform the administration if at all possible, it is sucking too much out of the system).
And really root causes .... why is education getting so expensive anyway? It's not something like oil for which we are reaching diminishing supplies of easily available oil - that's hard natural limitations. But there is no shortage of people with graduate degrees who would like to teach (in fact most people who had hoped for this can't find work). There is no innate shortage of education. But of course if as much education as people really could pay for at reasonable rates was offered it wouldn't be worth much as a signalling mechanism to determine who got the good jobs in the marketplace, would it? So, we're just going to bid each other up ad-infinitum, for access to the few good jobs left. To those who take out loans and default on them go the spoils (people who try hard not to default just get screwed). That's what you call perverse incentives! What if we have been sold education INSTEAD OF a good society that works for everyone? And then you can keep justifying all the people it doesn't work for on the basis of 'if only they had a degree, if only they had an advanced degree, if only they had a degree in the right subject', but with less and less opportunity, the claims ring more and more hollow. Btw, I think liberal education (to the extent it is not totally destroyed by the pressures of the government AND the corporatist marketplace) IS socially beneficial, it's just no pancea for a society that is working for less and less people.
If people wish to pursue a career they love that just happens to require an advanced degree, but doesn't pay squat, I have no problem whatsoever with that decision. {snip}
I would have no problem telling someone to make a different choice and then, once they have the wherewithal to pay for their dream, go for it! But don't do it before that because you can't afford it. If that means you get your JD or MD or PhD at age 50 instead of 30, so be it. The world will survive and so will you.
I agree with you here.
I think that there are lots and lots of layers to this equation -- one of which is the cultural idea that one needs a certain degree in order to have value as a human being.
A lot of people are going to school before they know what they want to do with their lives. And once they figure it out, they have a heap of debt and training around something that they don't want to do, and might not have any viable way to get the training for what they do want to do without taking more loans. Which really only creates a bigger hole for themselves.
This is why I'm such in favor of 1. putting off going to college with an OE or working time or whatever which gives a young person some 'real world' experience and the opportunity to decide what sort of education they want; and 2. having the young person work their way through school in some way (pay for it themselves in so far as they can, helping out when it seems most prudent but in a way that won't inhibit the student's ownership of the education).
This will lead more to the situation that you describe here -- imo -- wherein no one is taking up slack for where others really just made poor choices.
gewndolyn does have very valid points.
i pointed it out to my ILs the same situation. They are 66/7.
FIL went on the GI Bill to a state university that cost $12k *in total* at the time. He lived at home and worked part time while going through, which paid for his motorcycle (which he rebuilt himself) and then any additional fees/etc for the university. He worked with his step-father's engineering firm in drafting. So he graduated debt free.
I might also point out that my father went to a state school --- not on the GI Bill -- and it cost him $12,000 in tuition, fees, and books, and a couple thousand per year in living expenses through the fraternity. He worked his way through -- debt free.
MIL's school was private, small, and out of state. Her family paid for it. They spent $28k on her education in total. She had no debt.
They all graduated from undergrad between 1964 and 1968.
My tuition, books, room and board for year one at a state university cost $14k per year. It's currently $27k per year.
My husband went to a large private school that cost $27k per year. It's currently running $59k per year right now.
And then you add a few other things.
My ILs inherited their first house, which was in 1977. At the time, the house was valued around $50,000 while my FIL's income for the family was $55k per year (plus he had a pension, retirement investments due to frugality, and worked part time besides for "extra spending money."). MIL was a stay at home mom, but she had her pension vested after 5 years as a teacher, and she earned $35k per year for 5 years -- most of which living rent free in the house they inherited -- and so most of her money went into savings. That's $175,000 in savings.
They were 27 years old at the time, and both drove old, used cars.
If we contrast that with DH, he graduated with $13k in student loan debt, and bought his first used car for $7k. He took out a modest loan to pay for this car -- the payment was around $150 or so and was paid off in 5 years. BEcause of COL in the area, apartments were running $900 for the simplest of places, and so he was able to buy a house using the $5,000 he'd saved as a down payment, and paying about $750 in the house payment per month.
Oh, and his first job paid him $35k per annum -- the same amount his mother made in her first job in 1966. Except that my husband had a masters degree and was a writer/editor (the second highest position in the department) when he was hired.
So, while his mother lived at home or in a house rent free for 5 years and drove an old beater that she made very modest payments on for a couple of years and earned $35k and benefits and a pension, DH was paying back the car loan, a house payment, and a student loan on the same income -- at a time when the cost of bread was considerably higher as well. Just due to inflation.
And she would *harang* him for not having saved enough year-by-year because "that's what I earned when I came out of school!"
It's like they forgot how *easy* they actually had it. THey had a lot of parental help (such as living at home while going to school; living at home or in a rent-free house while working in their early years; inheriting that house when they had a young child), etc.
yes, they are currently worth several million, and my MIL is set to inherit from her step-mother roughly $6million when GMIL passes. They have done very well over the years through simple living and a modest income.
Not to mention paying for DH's education (Dll but $13k) as well as SIL's education and her specialized treatment for bulemia and drugs/alcohol.
If our business grows the way that we want it to, and DH's own film making career takes root, then we will be as well off. But the reality is that we didn't have the same start as they did.
Debt free, rent free, modest/simple living for 5 years? Then being debt free once they gain a house? My ILs have *never* had debt. I think they should be proud of that, truly. But they never had to take out a mortgage or a student loan. They never took out a car loan (and always buy used).
And they accomplished this because of family -- even FIL admits that when he went through uni on the GI bill, his family let him stay with them rent-free. That's 4 years without housing to pay for.
IDK, it just is a different world.
flowerseverywhere
3-24-12, 7:54am
Gwendolyn, you have made excellent points. The people to whom I referred with Masters degrees that have preferred to take a low paying job are older than the generation that has graduated just recently.
You are absolutely correct that the price of education is totally out of control, and yes, the military is not an option for some.
there are some options for some loan forgiveness already http://www.wisebread.com/7-great-jobs-that-offer-college-loan-forgiveness
Through my years reading and posting here people have paid enormous amounts of debt off in a short time by doing anything they had to do (legally of course) and making extreme sacrifices.
spartana,
the hard thing for me, here, is putting off kids.
i totally get the rest of it -- houses, cars, shoes, vacations, whatever. Yes, definitely put those off. Even retirement funding -- that's how we are resituating moving forward as well.
But for me, the kicker is the kids.
I have this one little boy -- and he's amazing. And I admit, I wasn't emotionalyl ready for him until I was over 30. Which means that fertility is impacted.
It would be great to have another kid, and I migth even be able to get two kids out before I would get into fertility issues at this rate (if I had a kid NOW and then another two/three years from NOW).
The problem with having another kid right now is that 1. I am the primary breadwinner and infants need mothers (for milk, cuddles, etc) and mothers need infants (to not go too crazy and to help with hormones and bonding and what not; 2. aside from 1, we are carrying a pretty hefty debt without a specific way of paying it off at the moment because 1 isnt working that aggressively (yet) to do that. Yes, I still make my payments, but my savings account to pay it off isn't growing; 3. i would be too damn tired. LOL that third one isn't that relevant to the conversation.
Now, it could be argued that we could: A. hire someone to cover my teaching, and I could do the administration work-from-home or take the infant to the office with me on the days that DS is in kindy and manage the business from there -- which would still bring in income from the business, but more modestly; and B. so long as I can still make my monthly payments, why not put off paying aggressively until the third child is about 3 (and in kindy) when I could work more. So that would be about 8 years from now?
I would be heading into my 50s before we'd start paying it back again in earnest, and in the mean time I could find ways for certain expenses to go down (ie, house in different neighborhood) while others would go up (food/clothing). ANd, it means that retirement would be later, etc. . . because I would be spending more to get the debt down quickly and less in retirement, etc.
So at that level, there is an issue of not having kids. . . because of the idea/feeling/sense that I can't afford them.
That being said, we don't think we are going to have another -- but we have talked about adopting after the debt is paid down. If that's 7 years on the outside, DS would be nearly 11, and we might be able to save up and do a sibling group (getting 2-3 kids at once).
In addition to paying for the adoption, though, we'd also have to pay for a lot of therapy once we are here -- therapy for DH and I, therapy for the whole family, and also for all 4 kids (DS and any we adopt). There might also be special educational needs (we'd have government support for this), and other needs related to institutionalization, and we'd ahve to have the right kind of housing for that number of kids, etc.
I'm estimating that we'd need about $20k for the adoption (just from ahving talked to several people) and that we would also then need at least $15k for the psychological care and other special care needs.
That's no small amount of money, is it?
But it begs the question if I"ll want that kind of project in 7 years.
I really am happy with just DS. :)
ANM:
I agree with you re:bail out without long-term solution.
And the cost of education argument.
FWIW Zoebird, family life usually manages to work around all our carefully plans. The day we found out DW was pregnant with youngest DD we had just started a new business, had one customer and $32 in the bank. That would not have been my choice for timing, but thank God that customer paid on time! We're all still here and doing great. At some point you just gotta wing it.
I'm with Gwendolyn: why is it we just accept that outrageous college costs plus predatory lending equals "just the way it is?" Most civilized countries consider having a healthy, well-educated population fundamental. Not us. We like to keep our citizens dumb and sickly. Easier to control, I guess. We need a robust movement to change the status quo, IMO.
In the meantime, students can take as many undergraduate classes as possible while they're still in high school; become autodidacts, learning on their own, then challenging courses to get credit by exam; take basic courses at community colleges; diligently apply for scholarships and grants; and avoid taking out any loans not quickly and easily repayable.
I'm thinking that I should blow through all my money and then just become a professional student. I know I sure had a lot of fun in my college days. This could be a great lifestyle.
ApatheticNoMore
3-24-12, 2:36pm
Gwendolyn, you have made excellent points. The people to whom I referred with Masters degrees that have preferred to take a low paying job are older than the generation that has graduated just recently.
Yes, I was referring almost entirely to generation X (my generation) and speaking from quite a lot of experience (the sacrifices I view as utterly normal to hold a decent (not even high) paying job, really are alien to others). But I never for a minute argued that people graduating now don't have a bad situation. Honestly though we graduated to find the dot.com crash soon after, things were not all great then, but they are quite bad now (you'd have to go back to the 80s, heck maybe to the great depression to find an economy this bad). And yes in the 80s though they graduated to a bad economy, I'm not sure the college educated workers were hit as bad (that didn't start until the dot.com crash), and they didn't graduate to as much debt for sure.
I'm thinking that I should blow through all my money and then just become a professional student. I know I sure had a lot of fun in my college days. This could be a great lifestyle.
Why even blow through all your money? If you have time (being retired) and money to pay the minimal fees, the community colleges are open for all. It's true a young person *might* be a better use of this education (that's just probability not a certainty, in truth this stuff is unpredictable), but they absolutely don't discriminiate. There are also whole *FREE* lectures given by *MAJOR* universities like MIT:
http://ocw.mit.edu/courses/
State colleges are fairly available and still somewhat affordable here. But there are also private college adult programs for more money.
With time and money you can really have all the formal and informal education you want. Most real world problems people face is they either don't have enough money (the whole loan debacle and without scholarships or loans private colleges are basically unaffordable) or enough time (if your not living at home pretty soon you're maybe working full time to pay housing even when you share, and doing that with school is harder, doing it with a professional job and the kind of commuting that often comes with a professional job (I do 2 hours a day), and your pushing pull your hair out hard). If your trying to do this after you have kids and with the responsibilities of child rearing, you truly go insane I think. Another time pressure is with all the cutbacks in public colleges here is that it is unknown when your graduation date will be. How long will the parents let you live at home? Or how long can you afford to take off between full time work?
I was thinking that if I blow all my money, then I would qualify for the loans. Then I would just put off paying till I die. Just one long college party.
Not going to happen, but I remember a few back in school that really were just going to school to have something to do. It beat working. They were there for at least 6-8 years.
Gregg,
It's true. We've become quite used to "winging it" in a lot of ways. But considering how intensively we've parented for the first two years of DS's life -- it's simply not possible to repeat under our current circumstances, and we really don't want to change those circumstances anyway. :)
And, we didn't really "wing" him either. He was planned for sure. We do a lot of planning, actually. LOL
I don't think I could 'wing' another unless I absolutely had to.
I raised my four sons during the 1950s - early 1960s.
At that time my (ex) husband was earning approx. $35,000 per year, which was enough money to pay for our bills, food, mortgage, clothing, etc. which allowed me to be a stay at home mother.
My sons were able to work during the summer vacations to pay their own tuitions while living at home.
They were willing to work wherever there were jobs--building roads, working on a garbage truck, planting trees to grow up in our forest areas, delivering newspapers, whatever was available.
Unfortunately, their children won't be able to do this, and we're all worried about they will manage with only a high school grad.
Hey all. I am new to the site! you all seem very smart and informed about politics and the way things are working right about now and i just wanted to give you guys a little in site as to why i think this bill needs to be passed. I am a 25 year old man who has a degree from Delaware state university . I started school in Sept 04 and grad aug 09. I had to take some summer classes in between and was so happy and proud to get my degree. I am the first man on my dads side that i know of to get it. My road to get there how ever is something that i think allot of people take for granted. I am from Brooklyn, NYC. I am a black man, no kids with a current fiance. I am not racist or bias at all towards any one or any thing, however certain things make a difference, and help lay out the story for what i am going through. When i got out of hs, i wanted to go away for school, but unlike alot of other people, my parents didn't have the money to send me, or were not educated enough to tell me not to take out loans. After i graduated HS Jan 04, we moved to Delaware in hopes i would get accepted into a 4 year college. When we applied to get financial aid, we were told my mom made too much, though she didn't, so that was not an option for me. At the time, there were only minimum wage jobs out that were hard to come by. I made the best of it and the summer before college i started to work at burger king. When it was official that i got accepted into college, i was ecstatic. It was a dream come true. By the time i got out of college, the opposite was true. When i graduated i was told that we had came out in the worst job market in decades and they were right. It took me 1 year to find a full time job. It took me 6 months to find anything at all, at which the summer before my current job, i worked for the us census. A full year after i graduated, i got my current job working at hertz rental cars. My gross income including to and bonus is 31,000. my student loan debt by graduation was 103,000 . now its 165k thanks to interest. The payments that they want are 1600 a month. I make 2000 a month after taxes. Not to mention i have bills too. Even thought i am fortunate enough to live with my parents, my step dad is the bread winner and my mom is unemployed for 2 years now. My dad is back home in NY and does not help me at all. Everyone does not have a fair and equal chance. We should not live in a place where its ok that families that are trying to make an honest living are losing their lives over debt because of hardship or underpaying jobs, but there are people who make billions and billions . whats the point of all that money? people that really need the money, never see it. Alot of people don't really don't know how hard it is when you live in an inner city and your not told what to do, or how to be successful and you think that college is the answer. I am not trying to say that yea this is everyone's story is like that, but people DO need help. I am more then willing to pay my loans off. But i need a job, but these jobs are not available any more. Its hard.
loosechickens
3-25-12, 3:08pm
thanks for your post, frombk. Often it's a lot easier to think about these things in the abstract, and have firm opinions about what should be done, but the situation gets a lot murkier when you start seeing the human face of these problems. As in the housing crisis, so many tend to look immediately at the folks "just trying to get a free ride", while ignoring that fact that large percentages got in trouble while trying to do the right, and responsible thing. I don't know the answers, but if we want to have an educated population, compete in the world marketplace, and not indenture our young people to a heavy burden of nearly lifelong debt, we need to find ways to rethink the situation.
I saw in Newsweek this week (they were having a cover story on the tv program Mad Men, so had a lot of stuff comparing 1965 to the present day), and they had a chart of various items and their costs (in today's dollars, adjusted for inflation) in 1965, and their cost today.......such things as a gallon of milk, or gas, or the cost of a copy of the NYTimes....a basket of various things. One thing was the yearly cost of a four year college degree, tuition, room/board and books. The cost in 1965, per year, in today's dollars was slightly over $1,000. The cost today, over $20,000. Something has to give.
My sweetie graduated from Georgetown University School of Foreign Service in the early 70s. He worked in the summers, and several years served as a Housemaster in International Student House, so contributed to his own expenses. His parents helped with costs, and his father has said that total expense paid during that four years by them was less than $10,000 by the time he graduated. Even adusted to today's dollars, this very expensive school, where now, tuitition, room/board and books tops well over $50,000 per year, if costs were similar, and if he'd had no help from family at all, he could probably have graduated with debts of perhaps $30,000, perhaps a little more, given the inflation factor. But today? Pretty near impossible.
Tuition there at Georgetown over the years has seen a rise similar to the percentage in the Newsweek table. If my husband was young today, and had the same level of family assistance, plus the jobs, he could not graduate without having huge student loan debt. It would be impossible to do today, what he was able to do then. Very sad.
I wish you good luck in trying to put your degree to work and congratulations for doing the hard work of making every effort to secure a better life than you might have had. It sure isn't easy.
Because my husband had the advantage of graduating from college without debt, he was able to follow his own path in life, choosing avenues that paid far less than many careers he could have chosen and college friends still have. It gave him immense freedom in life to follow his dreams rather than indenture himself to jobs because of how much he could make. I hate that young people today don't really have that option, given the levels of debt they have, and the limit that puts on their choices to turn their backs on what pays the most to choose what they love to do, even if it pays much less.
thank you very much chickens. I just wanted to make my views known to tell people that while i understand what they are saying about people that have abused the system, but their are just that many people that really do need help!
loosechickens
3-25-12, 3:28pm
as a fellow Georgetown graduate, now a tax and estate planning attorney in New Jersey has said on his website:
"As an Alumni Interviewer for Georgetown University for more than 30 years, I have seen the cost of private and public education skyrocket beyond inflation, investment returns and increases in income. My entire education, BSFS, JD, LL.M.(Tax), studying in Europe, living expenses and my car cost less than $40,000 in the early 1970's. Today, one year at Georgetown and other highly selective urban schools exceeds $50,000. The trend is rapidly increasing costs and large burdens on the families of students."
wow! that is some interesting yet not surprising news
student loan debt. It would be impossible to do today, what he was able to do then. Very sad.
No one has to go to Gtown. If Gtown provides a product that is worth $50/yr, pay up. If the costs exceed the benefits, don't go.
jfromdk,
thanks for sharing your story in specific, because I'm seeing that more and more -- whether people your age come from affluent or non-affluent backgrounds. More and more debt, then a great deal of interest, and so on.
If your loans are federal, you might qualify for several programs that can adjust your payments. please do look into those, instead of talking to the banks directly. If your loans are private, than it's a different matter, and I wish you good luck indeed.
And congratulations on your degree and being the first man in your family to have it! that is no small achievement!
loosechickens,
I pointed that out to my ILs again this weekend.
When my ILs graduated from university debt-free, they worked as teachers. Their income was the same as DH's first job back then: $35k. But $35k went a lot farther then.
Add to this that they lived rent-free in a home that my MIL's father owned, until he passed and they inherited that house. They've never had a mortgage/house payment.
They also had pensions, which both vested, before MIL became a SAHM. So, she's earning off of her pension as well (which is a percentage of the $35k every year until she passes). And FIL earns a pension that equals his final salary as a teacher -- which by 1997 was quite high indeed.
They live very simply -- which of course I value -- and they have a lot of retirement and savings.
They nearly constantly harass DH about "living too expensively" because they don't seem to comprehend having to make house payments -- they've only had to maintain and pay the taxes on their home.
They don't seem to comprehend the difference between a 401k and pension -- and in fact would yell and scream at DH for not 'being responsible and signing on for the pension!' It took us two years to convince them that pensions were no longer offered. It wasn't until they'd asked their financial planner/advisor to "talk sense into us" that he, in fact, talked sense into THEM and told them that such things didn't exist anymore.
They've always been unhappy with how we spend our money, even though we live far more simply than any of our friends, or even more simply than they do (we spend less per month on phone, power, water, etc). The expense that upsets MIL the most is the cost of food, because we don't buy with coupons. But we don't eat foods that you can buy with coupons, so there's no use in going through the process of clipping.
We are bargain shoppers, in so far as the items fit within our values -- and we pay cash. And we do save, and we live quite well while living simply. I think she just needs something to fuss about.
Right now, she's fussing about the cost of the holiday (them coming here). But, the tickets that I found them were a great price ($3k for both of them round trip -- one direction with the sky-couch rather than regular seats), and of course their expenses for the rest of the trip should be around $1k (same as us -- or rather, about $800 USD). They take a trip every year (a cruise) and pay an average of $2k per person for the cruise plus air-fare to get to the ship (usually another $3k). So their average holiday is 20 days and costs $7k, and we're keeping theirs below $4k. but, she needs something to fussy about I think. LOL
Anyway. . .ramble.
At this point, pretty much everything except online and community colleges exceed the benefit.
yea the whole thing is out of control. And bird, i had federal and private loans. Mostly private.
loosechickens
3-25-12, 10:12pm
But the point I make, East River Guide, is that Georgetown was providing that same high quality education in 1970, yet a decidedly middle class student , like my husband, could, without scholarships and with help that a middle class family could easily afford, working in the summers and part time during the school year could graduate debt free, even from such an excellent school. Who could do that today? Inflation may have tripled the cost, but actual costs are many times more than inflation in dollars. It is a new world out there today and a person in the position my husband was in financially absolutely could not replicate his experience.
Yossarian
3-25-12, 11:00pm
But the point I make, East River Guide, is that Georgetown was providing that same high quality education in 1970
The world is different than 1970, the percieved value of education has increased so one would expect the price to go up until it exceeds the perceived value. I say this as a professor at a private university- you can get a good education for less money at cheaper schools. But the market is still supply and demand. As more students try for the top spots the price goes up. If you want prices to fall to 1970s level, cut the number of buyers or quit subsidizing the ones you have to bubble proportions.
j: ouch. those hurt like no one's business and are harder than heck to renegotiate.
ApatheticNoMore
3-25-12, 11:34pm
As an Alumni Interviewer for Georgetown University for more than 30 years, I have seen the cost of private and public education skyrocket beyond inflation, investment returns and increases in income. My entire education, BSFS, JD, LL.M.(Tax), studying in Europe, living expenses and my car cost less than $40,000 in the early 1970's. Today, one year at Georgetown and other highly selective urban schools exceeds $50,000. The trend is rapidly increasing costs and large burdens on the families of students."]
40k was a MASSIVE SUM of money in the early 70s though. My parents bought their house in California for 36k in the mid 70s. It would now sell for at least 1/2 million. Tuitions aren't the only thing gone crazy.
At this point, pretty much everything except online and community colleges exceed the benefit.
It's a simple mathematical calculation isn't it? Expected increases in earnings over a lifetime for having x degree versus cost of tuition (including interest on loans etc.). No, I don't really expect most 17 year olds to be making this calculation very well, they mostly lack any basic financial training at all, not to mention life experience (!). I'm just saying that if you really want to figure if it's worth it purely on an economic basis that's what you do.
And Zoebird: just have the baby and stop listening to the in-laws!! Of course that is not mine to say but .... :)
Oh, and I kind of accept that financially I'll never have what my parents had. Frankly I have definite points of bitterness but that isn't really even one of them, I just accept mostly that lots of things cost more these days (and pensions don't exist except in government work, and the interest rate is zero when once it was regularly 6% etc. etc.). Comparisons are poison anyway, don't you know? :)
ANM,
I have no plans on having a baby right now because the way I parent is so intensive that I cannot take the time away from the business.
I really don't care about what my ILs think, I just wish they wouldn't harass DH for what he does -- which is great considering our income and the world we live in and so on and so forth. Right now, they're pissed because he gave up a "good job with benefits!" which was their goal for him. Of course, we have benefits here (via taxes), and the contract work keeps us flush and it's more relaxed and DH can be with his kid which he enjoys. :)
Ok, so we've apparently been able to weed out two distinctly different, but connected, issues here. College costs are hyper-inflated and a lot of people have student loans they can't pay back. Since the OP regards student loans I will just address that here and figure we can start another thread to talk about college costs...
Here's the kicker that has been mentioned several times, but never really addressed by those in favor of the bill: if these loans are forgiven, simply wiped clean, who is going to pay for it? As I've said, the money that was lent was very real. I'm talking about the principal here, there are all kinds of ways to look at the subsequent interest. A bank, the federal government or some other entity actually gave money to a student. If the loan is 'forgiven' (a very unfortunate and benign sounding choice of wording) the lender takes a loss. That loss comes directly out of the pockets of shareholders or tax payers, depending on where the loan came from. For anyone with a loan that might be wiped out I have only one question, is it fair that you would receive this benefit from others who would be forced to pay for it?
flowerseverywhere
3-26-12, 10:10am
Gregg I started a new thread in finance about college costs and alternatives. I am very interested to see others suggestions.
I am also curious to see the answer to your last question.
Thanks flowers, great idea. Its such an important topic it really does deserve its own thread.
Gingerella72
3-26-12, 2:38pm
I raised my four sons during the 1950s - early 1960s.
At that time my (ex) husband was earning approx. $35,000 per year, which was enough money to pay for our bills, food, mortgage, clothing, etc. which allowed me to be a stay at home mother.
My sons were able to work during the summer vacations to pay their own tuitions while living at home.
They were willing to work wherever there were jobs--building roads, working on a garbage truck, planting trees to grow up in our forest areas, delivering newspapers, whatever was available.
Unfortunately, their children won't be able to do this, and we're all worried about they will manage with only a high school grad.
My husband's and my combined income is just barely $35,000. I can't even imagine making enough money in today's world to enable one spouse to stay at home. It's just a pipe dream for me.
He decided, at age 40, to go back to school because he was tired of not being qualified for anything other than minimum wage jobs (because of course, it doesn't matter if you're an intelligent, hard working person, as long as you don't have a degree, you're worthless according to today's job market). The only way he was able to do this was to take out student loans which partly covered his tuition/fees, and partly paid for living expenses due to his reduced part time income while he went to school.
All of his advisors and professors told him he was doing the right thing. How else can you get a "decent" well paying job without a piece of paper stating that you have a degree?
He not only finished his undergraduate degree that he'd started in the late 80's (and had been paying off that student loan ever since then) but went on to get his master's degree. He had high hopes of getting a good job, even if it wasn't in his chosen field, because hey! he has a master's degree!
One year later, he's still working at the grocery store he was employed at while in school. He did run into some luck a couple of months ago when he was "promoted" to a "management" position (only because the person he was replacing was fired) and is now making $10.00 an hour instead of the $7.50 he had been making for the last 2 years. It's not even full time....but because of the hours it puts the kabosh on getting a second part time job. He doesn't dare leave because there isn't anything else available around here and we can't afford to move.
And now we're looking down the barrel of the gun that is his student loan payments starting in June. After he graduated he continued taking classes for a year (for free, through my employment benefit) for the sole purpose of deferring the loans out further and delaying payment. We have no idea how we're going to be able to make even a minimum payment, with our mortgage, car payment, and credit card debt (racked up due to medical expenses and unforeseen and unexpected home repairs). And before you say "just get another job" let me assure you that all employment options have been thoroughly explored here. There is no option. We're actually worse off financially now than if he had never gone back to school and just continued being a janitor.
As for putting off things until we have the student loans paid off....he'll be 46 this year and I'll be 40....so that pretty much kisses children goodbye.
I don't know what the solution is or how to go about even attempting to fix it. Tuition costs are insane. Employers requiring higher degrees for jobs that were once held by people with a high school diploma is insane. Telling people that the only way to get a good job and "live the dream" is to go to college is insane. Having the only way one CAN go to college is by enslaving oneself to a lifetime of student loans is insane. But I tell ya, if there is a gub'ment program that allows us to reduce his payments or forgives them altogether, you bet your ass that we'll be applying.
"Employers requiring higher degrees for jobs that were once held by people with a high school diploma is insane. "
My job falls under this - I did a 2 year school (electronics) and got employed at Bell Labs. I transitioned from my first job into systems administration using a few years on the job Unix use and a one week SA course. Later on I mentored a coworker who had less post high school education than I did.
These days what I do is a BS minimum, and many want a Master's. And it's just not needed. Part of what's going on I think is employers expecting years of school up front so they can avoid a few weeks of in-house training.
These days what I do is a BS minimum, and many want a Master's. And it's just not needed. Part of what's going on I think is employers expecting years of school up front so they can avoid a few weeks of in-house training.
At one time, most job seekers could prove their qualifications via employer testing prior to offers of employment. Unfortunately, this became a civil rights issue causing employers to simply up the ante by way of educational requirements rather than face a lawsuit over employment discrimination and biased examinations.
ApatheticNoMore
3-26-12, 4:51pm
At one time, most job seekers could prove their qualifications via employer testing prior to offers of employment. Unfortunately, this became a civil rights issue causing employers to simply up the ante by way of educational requirements rather than face a lawsuit over employment discrimination and biased examinations
IQ testing maybe. Skills testing is actually extremely common (although not always extensive). Yes I took a skills test for this job, yes I took a skills test for my last job .....
flowerseverywhere
3-26-12, 5:09pm
At one time, most job seekers could prove their qualifications via employer testing prior to offers of employment. Unfortunately, this became a civil rights issue causing employers to simply up the ante by way of educational requirements rather than face a lawsuit over employment discrimination and biased examinations.
what about civil service jobs? You have to take a test for them too. In our county there is a long list of exams being given- to work as a typist, welfare case worker, policeman etc. you first have to pass a screening test. If you work in a Nuclear power plant you have to take psych testing, drug testing and physical tests as well (thank goodness). Pilots have a great deal of scrutiny and many professions require all kinds of medical testing before and after the job is obtained. I believe that postal workers were the same with a screening test to even get interviewed (I don't think they are hiring these days.) For many jobs you have to take drug tests. I had to be fingerprinted and drug tested before working for the state in a low position. There are all kinds of testings out there that weed out a portion of people. Today you have to apply online to many jobs and even to apply at McDonalds and other entry level fast food positions you need some computer expertise to be able to even get a phone call. And some positions require background checks, and security checks and clearance. So there is plenty of testing, scrutinizing etc. out there.
and of course there are job interviews. You are being testing on your verbal skills, manner, punctuality, following directions, dress etc. through that process as well.
Gingerella72
3-26-12, 5:16pm
"Employers requiring higher degrees for jobs that were once held by people with a high school diploma is insane. "
My job falls under this - I did a 2 year school (electronics) and got employed at Bell Labs. I transitioned from my first job into systems administration using a few years on the job Unix use and a one week SA course. Later on I mentored a coworker who had less post high school education than I did.
These days what I do is a BS minimum, and many want a Master's. And it's just not needed. Part of what's going on I think is employers expecting years of school up front so they can avoid a few weeks of in-house training.
Or, they want someone with 5+ years of experience of already doing that same job. Um, how do you get experience unless you can get that job!?!?
Gregg,
To answer, I see it as viable in the immediate -- the current economic situation. I'm willing to bail out my fellow citizens -- like ginger's husband and jfromdk. Or myself for that matter. I already help out people like Red Fox who work in the public interest -- but at this point, I'm starting to see *everything* as in the public interest (in the interest of a healthy economy).
After all, I bailed out banks and an automotive industry. Why wouldn't I be willing to bail out these folks? And I'd much rather this money be spent at home than on war efforts that are futile and needless (and certainly don't help anyone).
So, here are some things that I like about the bill:
1. the 10 year process -- there are two ways to go about it already mentioned A. principle plus interest, or B. principle only payments;
2. cap on amount that can be discharged -- that cap at $50k which would encourage (as I see it) both a decrease or capping of costs at schools as well as people minding how much can be taken out;
Things I'm not too keen on --
1. discretionary income cap being so low -- to be honest, I think that this could be higher or as (i believe it was) Spartana who said that it should be considered another important payment, not part of discretionary. But this is to determine the payment, not so much how it should be emotionally considered by the person paying it back. And of course, there were your own considerations there as well.
2. moving the public service discharge up to 5 years -- i'm happy with them having whichever methods they have in place, and perhaps number 1 above should be higher by 5 years (for the average person).
Some other things that I would like to see:
1. public funding of education continuing or what have you -- but in a more effective way overall (ANM has talked about this);
2. the assertions for public service during/before going to school to also cover costs for students (giving back in ways that doesn't have to be military -- civil service corps, for example, Americorps, etc);
3. the cultural re-adjustment around trades, education, etc and jobs (taking to the issue above that some jobs now require degrees at levels that they never did before -- as an example, grounds keepers at Johns Hopkins now require undergraduate degrees and in some cases masters degrees. For grounds keeping!);
4. less access to loans in general -- i would like to see the loan situation more austrian and less stupid. I'll be honest -- I think there's no reason a young person without collateral should be able to take out these sorts of intensive loans. For $10-20k? Sure, maybe. But for $100k? For $200k?
It's one thing if you have a mortgage, and it's calculated based on your income, the value of the house, and ultimately there is collateral (the house! which the bank can foreclose, sell, etc). But it's another thing altogether if you have to figure out a way to suck information out of someone's head, or keep them in all kinds of painful methods (such as I'm experiencing -- I wish I could start paying back on principal and have it done with in 10 years in that way via auto payment and/or be able to pay more on principal as we go along so that I could pay it off sooner, rather than the way I have to do it now). And, I would say that 18-25 yr olds are not the most savvy consumers overall. . . even if they were raised in households that had good sense about money.
Anyway, those are just some thoughts about cultural reformation that might prevent some problems that we have now.
Oh, and I'd like to see a time-gap on the program. IE, anyone who took out loans since 2005 and until 2015 -- you will qualify. . . after that point, no more qualifiers or some such.
I haven't entirely thought this through, but each of the bail-outs have had time limits and such to get things sorted, and I think it would be possible for us to resort this educational mess and our economy by 2025, which is when the last person in that aspect would be discharged, and hopefully in the next 3-6 years, we could get the situation sorted for the average student, wherein they would be able to have different opportunities.
Maybe these time lines are too tight. But that's the idea anyway.
I don't think it should be a "forever and ever" program -- I think that other programs should be developed that would either A. make it possible for people to have a good education and stay competitive in the marketplace in a way that benefits our country (a la spartana's suggestion) or B. developed so that the marketplace sees different forms of education as valuable, etc.
Gregg,
To answer, I see it as viable in the immediate -- the current economic situation. I'm willing to bail out my fellow citizens -- like ginger's husband and jfromdk. Or myself for that matter. I already help out people like Red Fox who work in the public interest -- but at this point, I'm starting to see *everything* as in the public interest (in the interest of a healthy economy).
After all, I bailed out banks and an automotive industry. Why wouldn't I be willing to bail out these folks? And I'd much rather this money be spent at home than on war efforts that are futile and needless (and certainly don't help anyone).
Thanks Zoebird. Here's a little different question... DW and I worked for 12 years to pay off her student loans, including grad school loans. Every dime was paid back, with interest. Are we entitled to a refund of all that money or are we just S.O.L. because we came along a little too soon? What about all the hundreds and hundreds (thousands over the years) of extra hours we both worked so we would have enough at the end of the month to pay all our bills, including the student loans? We took 2 vacations in 12 years in large part because we didn't have enough money after ALL our bills were paid. Is there a way we can get that time back because I would much rather spend it with my baby girl than working to make a loan payment? Melodramatic? Perhaps, but still true. A little more practical question might be for me to ask, "what are you going to do with all the money you will save?" I can pretty much guarantee your answer will be really, REALLY close to what mine would have been if this were offered so many years ago.
Gregg:
SOL. You were a different economic situation (as was I, for the record) than jfromdk.
The same is true of what's going on in SA. Everyone who has paid back loans is SOL.
Honestly, we had a situation happen with DH's insurance, when they switched providers. We ended up being SOL on a particular financial situation, where a lot of our fellows got a pretty hefty "free ride" for being purposefully unhealthy people (from what we could tell).
As it is, I'll likely be SOL and pay back my loans -- as will many others -- even if this bill does pass.
but why would I be upset about someone like jfromdk getting a benefit that I value?
I'm SOL on getting welfare benefits, too. I'd prefer not to go down that route -- but I value having a welfare program.
IQ testing maybe. Skills testing is actually extremely common (although not always extensive). Yes I took a skills test for this job, yes I took a skills test for my last job .....
I took skills tests for two of the four jobs I had after retiring, plus one drug test. One of them was for an IT job and they announced who passed and who didn't immediately afterwards. Awkward.
I had to send one potential employer (Amazon) a copy of my college transcript and report my SAT scores (!), plus take a series of customer service tests via e-mail and pass a telephone interview. They were ready to hire me once I took a typing test, but the hours and pay ($10 an hour) didn't work for me.:D
my DH has to take writing/editing tests for several of his ad-hoc contract gigs. He does overflow work for several companies, and they make you take an exam first.
thank you bird. I am here right now depressed about this. i feel dumb because i took out that much to go to school, but i thought it would better my earning potential. I just feel so dumb, and honestly i don't feel like there is any hope.
flowerseverywhere
3-26-12, 11:34pm
thank you bird. I am here right now depressed about this. i feel dumb because i took out that much to go to school, but i thought it would better my earning potential. I just feel so dumb, and honestly i don't feel like there is any hope.
What interest rate is on your loans? It sounds like you had a huge jump in the principal between graduation and now. It seems like in this environment where you can't make interest they shouldn't be charging you interest.
I wish I had some sage advice but I have none. The situation you describe is nothing most of us are familiar with but I guess it is becoming more and more common from what people have posted here, and someone many pages back posted some stuff about hardship forgiveness so you might want to go back to see if it is anything you could follow up on. And you aren't dumb.
What interest rate is on your loans? It sounds like you had a huge jump in the principal between graduation and now. It seems like in this environment where you can't make interest they shouldn't be charging you interest.
I wish I had some sage advice but I have none. The situation you describe is nothing most of us are familiar with but I guess it is becoming more and more common from what people have posted here, and someone many pages back posted some stuff about hardship forgiveness so you might want to go back to see if it is anything you could follow up on. And you aren't dumb.
thanks flowers.. yea alot of people are in the same boat. at least that have been to school in this day and age. I never had a chance coming out of school. My loan interest is like 14.5 percent.. like wtf?lol.. thats crazy. i am 25 and before i even had my first job, which pays about 24,000 a year, and took me a year to find, i had a 1,600 a month loan payment. I just feel dumb. I feel trapped because when you live in a inner city, you don't just have the option to go to the community college, because your busy trying to get out of where you live at. No i am not from the ghetto or the hood or what have you, but life in the city was not easy and trying to stay out of bad situations gets alot harder when you get older because trouble seems to follow young men. So i was told go away to school to better my life. Yea right. i would gladly pay back my loans, but i borrowed a lil over 100k. Now i realize that was alot but i didnt blow it on any thing. I did.nt buy a car with it. Or get fancy clothes. I worked too. But college has become so costly that you are paying for things that you have no control over. Its really sad that alot of people(not you guys) really think that its just that easy to get two jobs to pay off debt.IF i could i would, trust me. I just got let go of my second job at ritas water ice because they had too many ppl on the schedule and couldnt fit me on. thats a minimum wage job. And i cant even keep that..
jfrombk --
here is my first thought.
take your federal loans and contact the government about them (http://www.nslds.ed.gov/nslds_SA/). usually, you can get into a program where you can pay what you can, they reduce the interest, and so on. It's a consolidation program. So long as you can do an auto-payment, it should drop your student loan interest down below 5% on those loans. You might even qualify for a discharge down the track (but I don't know).
at the most basic level, it will decrease your payments now -- and keep you out of default on these loans. Under the current information that I'm looking at right now, you can consolidate your federal loans, and will likely qualify for a great program that will not only cap your current payments based on your income (which is adjusted in some special, magical goverment way using your tax forms), but if you haven't paid it back in 25 years, the rest is forgiven. And honestly, that's not too bad (all things considered).
So, that's the federal loans.
Private loans have to be handled separate from your federal.
Go to multiple lenders -- and include your local bank or credit union. Our credit union does do some private loan consolidation, and i preferred to work with them. One very small portion of my private loans were consolidated by them (they had a cap), but those were paid off very painlessly and helped our position with the credit union (making it easier to -- for example -- get a loan for a car when we needed it).
If you can get all of the loans consolidated into one, this would be helpful. It's likely that the term of the loan will stretch out to 25 or 30 years, but you can lock in a low interest rate for the duration. You'll want to read all of the terms and conditions -- and make certain that there is no pre-payment penalty as this would allow you to pay back the loan more quickly should you win the lottery, inherit a ton of money, or just get that dream job that creates a lot of income.
When reading the new document for consolidation, read it twice and give it to a friend or financial advisor whom you trust. Go over any questions you have with the lender up-front -- before signing anything.
These two things can get your payments down very low.
You'll have two separate loan payments -- both consolidated -- but you should be able to at least get the payments to a level that you can afford.
I hope this can help you out.
And I'm sorry that you lost your second job. I hope that you can find another soon.
If nothing else this is a classic learning example of a philosophy most of us here share. Debt is best avoided in many cases. I have to steer around the knee jerk reaction of simply saying do away with the student loan program: pay as you go or don't go at all. It's obvious that, from a socioeconomic standpoint, the ranks of graduates would be top heavy. There are lots of issues that can be addressed in the personal finance thread flowers started. As far as this bill goes it looks like the two sides are going to have to agree to disagree. Personally, I will never support a bailout (in direct opposition to a "help-out") for anyone. Band-aids never fix anything. If we create an environment in which jfrombk could secure a job that pays well and combine that with a reasonable refinance & consolidation program for his loans he, and a couple million like him, should be fine. But now that Pandora's bailout box has been opened and the very word has become intrenched in the newspeak lexicon of the day there is no going back.
flowerseverywhere
3-27-12, 9:44am
If nothing else this is a classic learning example of a philosophy most of us here share. Debt is best avoided in many cases. I have to steer around the knee jerk reaction of simply saying do away with the student loan program: pay as you go or don't go at all. It's obvious that, from a socioeconomic standpoint, the ranks of graduates would be top heavy. There are lots of issues that can be addressed in the personal finance thread flowers started. As far as this bill goes it looks like the two sides are going to have to agree to disagree. Personally, I will never support a bailout (in direct opposition to a "help-out") for anyone. Band-aids never fix anything. If we create an environment in which jfrombk could secure a job that pays well and combine that with a reasonable refinance & consolidation program for his loans he, and a couple million like him, should be fine. But now that Pandora's bailout box has been opened and the very word has become intrenched in the newspeak lexicon of the day there is no going back.
I agree with you but one problem with these loans is the interest rate. One of my friends has a daughter and her federal loans are over 7%. Isn't that ridiculous when you can't get 1% at a bank. Maybe taking a middle ground and getting these interest rates to a reasonable rate would help many people at least make a go of it.
I also am opposed to a bailout without strings. Serving in an inner city school area, peace corps (currently for perkins loans), military all can help get rid of some of this debt and that is available now. Is it easy? No but it is available. Kind of a payback for being able to live in such a great country with all of our opportunities.
thanks flowers.. yea alot of people are in the same boat. at least that have been to school in this day and age. I never had a chance coming out of school. My loan interest is like 14.5 percent.. like wtf?lol.. thats crazy. i am 25 and before i even had my first job, which pays about 24,000 a year, and took me a year to find, i had a 1,600 a month loan payment. I just feel dumb. I feel trapped because when you live in a inner city, you don't just have the option to go to the community college, because your busy trying to get out of where you live at. No i am not from the ghetto or the hood or what have you, but life in the city was not easy and trying to stay out of bad situations gets alot harder when you get older because trouble seems to follow young men. So i was told go away to school to better my life. Yea right. i would gladly pay back my loans, but i borrowed a lil over 100k. Now i realize that was alot but i didnt blow it on any thing. I did.nt buy a car with it. Or get fancy clothes. I worked too. But college has become so costly that you are paying for things that you have no control over. Its really sad that alot of people(not you guys) really think that its just that easy to get two jobs to pay off debt.IF i could i would, trust me. I just got let go of my second job at ritas water ice because they had too many ppl on the schedule and couldnt fit me on. thats a minimum wage job. And i cant even keep that..
You are young. Please do check out the links here and in the finance thread to get that interest rate down. It is a ridiculous rate, and believe it or not there are people in the government who will help you navigate this.
There is another option which I think Spartana touched on briefly. Military service. And actually, with your degree, you probably qualify to start on the officer track, which isn't bad money. Plus the benefits are very good. (don't listen to nay sayers who don't really know. Government health care is the best!) And the travel opportunities can be fantastic. At your age and education you are prime for service. Go to a recruiter and talk to them and see what they can do for you as you do for them. Go to the Air Force first. Less combat duty, and a strong emphasis on education and professionalism. It's an absolute way to a career whether you stay in or not, and a way to pay down your debts.
I saw a report recently (on CNN, perhaps) about medical students choosing to study in Cuba to pursue a more patient-centered approach to health care and avoid crushing loans at the same time. I think there are also some community service programs here for health care professionals and loan forgiveness. Or there used to be.
Here are just a few of the horror stats for young folks these days.
Maybe to avoid the "horror" of expensive college tuitions young folks should consider going to a community college for the first 2 years and then a state university for the rest.
"For a full-time student taking 12 units per semester, annual tuition at a California community college is approximately $480"
"For a full time student enrolled in more than six units per term pay $4,026 per year in tuition fees at Calif State Universities."
I think most can swing that flipping burgers part time while in school without taking out loans. Live at home or in cheap shared digs, buy used text books and sell them back, work and save while in high school, work while in college, join the armed forces (I joined the Coast Guard) and earn money (and learn a trade) and also get money for college. College doesn't HAVE to be outragously expensive if you don't feel the need to go to a private Ivy League school.
College doesn't HAVE to be outragously expensive if you don't feel the need to go to a private Ivy League school.
In my response on the college-costs thread, you may notice that some Ivy League schools may in fact be the cheapest way to go.
I think there are also some community service programs here for health care professionals and loan forgiveness. Or there used to be.
There still are here in Nebraska. Depending on the program and where you live an MD can have all of med school paid with as little as 5 years service (less for PAs and RNs). And that is on top of salary and benefits. Of course you would have to live out back of nowhere during that time because the areas served by those programs are as rural as it gets. Some of us love that kind of area so I would think there would be a few students who would jump at the chance, but it is a struggle to find people every single year. Further compounding what a good deal that is, its really, really cheap to live in these places. There are lots of little towns in central and western Nebraska where you can buy a beautiful house for under $150K (http://www.wolfnebraska.com/realestate/269) and if you can get by with a smaller house then $50K (http://www.wolfnebraska.com/realestate/220) might do it. Plant a garden and you're livin' large on the cheap.
In my response on the college-costs thread, you may notice that some Ivy League schools may in fact be the cheapest way to go.
I haven't read all trhe posts yet (the problem when you only go online a few times a week) so should probably catch up with reading ALL the post before I respond. Although I may die of old age before I catch up ;-)!
military service also comes with a lot of social and emotional difficulties IMO. it is the absolute last thing that I would be suited for -- to be honest.
the peace corps (http://www.peacecorps.gov/index.cfm?) and americorps (http://www.americorps.gov/for_individuals/choose/vista.asp) (VISTA program would probably be well suited considering your educational level already) are also *viable* options that don't involve military aspects. These two programs do pay less -- peace corps will cover perkins (so check if you have any) up to 70% (meaning discharge) and americorps has an educational stipend that might cover the interest payments for several years while you serve. These are often 1-2 year commitments, which you could extend if you wish.
here is a link to the airforce (http://www.airforce.com/benefits/officer-education/), but it looks to me that they'll only cover $10,000 of the debt per recruit under the college loan repayment program (CLRP). Looks like the Air Force National Guard (http://www.ang.af.mil/careers/index.asp) also offers this program which might offer up to $20,000, plus a $15,000 signing bonus and offers part-time careers.
Air National Guard is part-time work as well -- so you could continue to live and work where you do now. I think this might be quite the viable option, to be honest.
here's a link (http://credit.about.com/od/reducingdebt/a/student-loan-forgiveness.htm) that outlines different options as well.
spartana,
the hard thing for me, here, is putting off kids.
My point wasn't that you should put off having kids, or buying or renting a place to live, or buying a car, or stop eating in order to pay off a student loan. My point was that people should, and most do, factor in ALL their debts and expenses - including student loans - when making financial and lifestyle decisions. Make it part of your budget just like you would with every other expense or debt. If you decided to have another child, wouldn't you factor in your other debts and expenses when making that decision? If you couldn't afford to pay for a place to live, you probably aren't going to have another child. And since you're not going to be given taxpayer money to cover your housing expenses so that you can have another child, you'll have to continue to pay your mortgage or rent expenses anyway and will have to find another way (other than taxpayer money) to come up with the extra needed. You'll stilll have to pay for your car and food. etc... So IMHO, student loan debt should be part of that mix of expenses a person needs to consider when deciding what they can afford to do. When hubby and I divorced, I went from a 2 income, one mortgage family to a one income, 2 mortgage family because I had to continue paying the original mortgage PLUS begin paying him for his share of the house. It was tough - I had to get a second job and 2 roommates to (barely) make ends meet. And I had to factor in the cost to re-pay those debts and those expenses when I wanted to do anything - like possibily have a child or adopt myself. If I couldn't afford it, I just didn't get to do it. Yes i would have loved it if the government handed me $50K or $100K so that I could pay off my debts sooner so that I could have a child or adopt if I wanted to, but that's my responsibility to pay off my debts not the taxpayers since "I" incurred those debts and benefited from them, not the taxpayers.
military service also comes with a lot of social and emotional difficulties IMO. it is the absolute last thing that I would be suited for -- to be honest.
That depends on what service and job specialty you choose - it's not all about war or even wartime activities. There is a myriad of job specialities (including lawyers) to choose from. It not just "boots on the ground" stuff. There are support positions of every stripe. It can be a great experience - and was for me - that can really expand your horizons in a good, positive manner. Here's the current Coast Guard (yes they do go to war) education benefits. You can get free tuition while on active duty as well as as a veteran once you are out. I was on the old GI Bill for Vietnam Era veterans not this current one. I also agree that there should be another type of service organization besides the armed forces that will allow you to earn a salary, learn a skill, and help pay for college. Other, more socialist, countries have this option. :
Coast Guard Tuition Assistance
Coast Guard Tuition Assistance allows you to have the Coast Guard pay for your off-duty college education and supports your personal and professional goals. Active Duty Coast Guard members can receive $250 per semester credit hour, up to $4,500 to pay for college tuition. Contact your Education Services Officer (ESO) or visit the Coast Guard website for details on how to apply.
MGIB Top-up Benefit
If you’re an Active Duty military member and use Tuition Assistance, you can use Top-up to cover any remaining tuition costs. As part of the Montgomery GI Bill-Active Duty program, the VA pays the Top up Benefit. Top up can pay the difference between the total cost of a college course and the amount of TA paid by the military for the course.
Coast Guard Veterans Benefits
Veterans can use the GI Bill to pay for their college education costs. Some veterans, depending on when they served, will have the option of picking the Post 911 GI Bill or the Montgomery GI Bill .
Post 911 GI Bill
The Post 9/11 GI Bill provides up to 36 months of financial support for education and housing, payable for up to 15 years following your release from Active Duty. To qualify for the Post 911 GI Bill you must have served for at least 90 days on or after Sept. 11, 2001, or for 30 days and received a disability discharge.
As of Aug. 1, 2011, with the Post 9/11 GI Bill, the GI Bill amount you receive will cover all in-state tuition and fees at degree-granting public schools. If you attend a public school out of state, you will receive the cost of in- state tuition at that school and can use the Yellow Ribbon Program to pay for the rest, as long as the school participates in the Yellow Ribbon Program. If you attend a private or for- profit, degree-granting school, online and/ or on campus, or a foreign school, you could receive a total of $17,500 per year and use the Yellow Ribbon Program to cover any excess tuition and fees.
As of Oct. 1, 2011, you can also use the Post 9/11 GI Bill to pay your tuition for non-degree programs, such as vocational or certificate programs. The Post 9/11 GI Bill pays the actual cost for in-state tuition at the school or $17,500, whichever is less.
Spartana,
Yes, that is so. That is how we look at it too -- when making any decision (including the decision to move here). From 2008 onwards, I simply saved my money from my work into the account that the auto-debt came from, so that we don't have to worry about it at all. I saved enough for 5 years worth of payments so that we would cover from 2009-2014.
I did this so that I knew I would make the payment without having to worry about it each month, and would give us a buffer to get things established here.
Simultaneously, we stopped saving into the account that pays off the loan (and the CD -- just rolling that over), and would start that up again once we were completely solvent -- so that we could start putting more cash aside to help with the move and business.
I think that I had hoped/planned for the business to be more established by now (i hadn't accounted for certain things, I guess), and I would already be gearing up to pay off the student loans again. And I'm seriously frustrated that I'm not! LOL
But, we still have that amount rolling around in a CD and I have enough for my payments for several more years now, so I'm ok. Right? It's factored in.
I'm wondering if just converting the student-loan system into a grant-system is a better option? If we are going to go the route of forgiveness/discharge (and we do in a lot of different ways as linked above), then that functions as a grant.
Military service -- regardless of type -- still requires a strict hierarchy of command, obedience to this command, and training in how to be a part of this command.
With this, you don't necessarily get a choice of where you want to go. You can ask to be put in any number of positions, but that doesn't mean you'll get those positions. I know this because I have several friends who went into the military to do specific jobs of all kinds and yet none of them are doing the job that they wanted. They are doing other jobs -- which are fine and dandy and not-combat related -- but at the end of the day, it's not what they signed on for.
This does not function in my brain or my personality type at all. I would be asked to leave before I even got started. Or I would go suicidal. Honestly.
It truly isn't for everyone. It's why I do not support compulsory military service as an idea, nor do I actively encourage or discourage people joining the military to get a college education. Can it be beneficial and edifying to some people? many people? Yes, it can. Absolutely. I think that people who can do that sort of work in that sort of environment are amazing. But I know that it's not for me, and i'm not that rare of a bird.
I did consider it. I come from a family with military on both sides. I considered joining several times in university to pay for graduate school (navy mostly -- and use the law degree). I considered joining after -- as well as doing peace corps (DH said NO), americorps VISTA (DH said NO even though I could work in Philly -- this was harder to talk about). I considered working for the government in MT (DH said NO) in order to get into the different payment programs.
Americorps has a civil-service corps like option, and I think going into the national guard can be beneficial (its' military light). I might have been able to do that last one, but I still have a problem with authority.
Yeah, that's what it is. A problem with authority.
I think going into the national guard can be beneficial (its' military light). I might have been able to do that last one, but I still have a problem with authority.
Yeah, that's what it is. A problem with authority.
Many Nat. Guard troops have been the first deployed to Iraq and Afganistan, and have been re-deployed there over and over again. Definitely not "military light" as they can be recalled at anytime. Also, many of the services offer a guaranteed school for your choice of job specialty even BEFORE you join. If you can't get it, you can be released. But you're right, even if you get the choice of job specialty you want, you may not be at the type of unit you want aor doing the type of job you wanted (or thought it would be), and you can be transferred about as needed. So yeah, it's all up in the air alot and of course youu can't just leave - gotta do your time. As far as problems with authority - I have that big time. Incentive to move up thru the ranks fast so you are the one giving orders rather than taking them. Being the control freak I am, I likes that :-)!
Well i think most people realize that in any business there is a structure of authority. But perhaps it would be better if he talked to someone who has actually been in/experienced the military. I"m not sure what social/emotional hardships you could be talking about, but life in the military isn't jumping up to taps every morning and wolfing down food under the strict eyes of some TI. That's movie stuff and not reality based life in the military, except maybe boot camp.
When I suggested the military, I wasn't talking about joining to go to school, If I'm not mistaken, he already has his degree. Nor was I talking about free money, it really isn't an all or nothing proposition. What I suggested was a way for a young man to escape the inner city, maybe see some of the world while making a decent living with great benefits WHILE paying back his loan. It doesn't have to be a career, they don't make you sign your whole life away, or your first born son, it's just a good job with benefits... and not flipping burgers.
My husband and I spent 30 years in the AF, traveled the world, retired with great benefits and surprisingly are not socially or emotionally damaged. We made some great friends, as I'm sure Spartana did, and still keep in touch with them. Is every aspect of the job great? No of course not. Is every aspect of any job great?
Plus, with his degree, HE WOULD BE the authority eventually if he stuck around.
I would still recommend it to a young man who feels stuck where he is and with what he is doing and maybe doesn't quite know what he wants to do.
I second Peggy's suggestion. The military can be a great career, one that I sometimes wish I had pursued rather than being a "four and out" guy.
I'm one of those people who went to school under the GI Bill, specifically the Vietnam War era GI Bill, which afforded me somewhere around $310 per month as a full time student for 4 years. Of course, that didn't make it easy since my wife and I were both attending school at the same time with both of us holding full time jobs and a baby at home. But, there were no student loans and therefore, no debt upon graduation. If it had taken debt to go, we probably wouldn't have.
The military can be a great career, one that I sometimes wish I had pursued rather than being a "four and out" guy.
It's funny, for all the negative beliefs and angst people have about joining the military, I've never met one person who didn't wish they had stayed in longer - most wishing they had made a career out of it. I also wish I had stayed in longer than I did (approx. 10 years) and would do it again in a heartbeat!
ETA: Because many people in the service are unable to attend regular classes, many your college general education requirments can be met thru a testing process that the military has called "Cleap" (or something like that) where you can basicly take a test while in the service rather than attend a class. I met many of my college GE requirments via Cleap test - history, math, health ed, etc... Saved alot of time and money on college classes once I was a full time student - and they were all transferable to a state university. Also, depending on your job specialty while in the service, much of your job training and classes can be transferred to a civilian college to meet GE and professional education requirements. Say you were an engineering technician in the service, much of that training and education could be used to meet your college prerequisites for an engineering degree. They even list those as classes you have taken on your transcripts.
well i honestly have a different look at things. And this is not to knock on any thing that you guys have said but this is just the world we live in. 1. i thank you all for the information that you ve given me. the federal loans aren't the problem, but rather the private are out of control. And those are the ones with the smallest amount of help too. Most places i ve checked don't like you do consolidation unless you have a cosigner and no one in their right mind will do that for me because of the amount of the loan. I am not an irresponsible young person that doesn't wanna pay his debt. I had a borrow money for school because i could not go to community college. I could not go because my parents moved me out of NYC to get a better life .. go figure..lol. any way .. i am in this mess now. if they were asking to pay back what i took and the amount wouldn't go up outrageously, i would be fine with that. I took out 103k. not 165.. and not the other load of bs taxes that will be attached to this too.. 2. i am about to get married, i would not wanna leave my future wife and family for the gov. I am not a fan of potentially having to go over seas and fight or die for something i dont believe in. I love the good usa, the great ppl and the freedoms that it offers, but i was and never will be a believer in the government because we honestly only know what we read. I dont believe in everything the government stands for.
ApatheticNoMore
3-27-12, 8:17pm
I wouldn't do the military either. In fact I'd probably choose to flip burgers until the day I die if the only two choices were that or the military.
Here's the thing.
I was really speaking for myself in regards to emotional damages. I have a *serious* problem with authority. It's not just the normal levels. It is hard core "gave my kindy teacher a hard time at age 4" problem with authority. LOL And, that isn't well handled in the military -- they let you go when you are not suited. Or, they break you down. Sometimes both (if they can't break you down, then you're out, and broken.) And I'm not down with the second.
Socially, you can be and often are away from family and friends for long stretches of time. This can be difficult for some people. It actually isn't difficult for me, which is partly why I even considered the military.
I come from a military family. Navy on my Dad's side, several of my cousins are in the Air Force, and several more are in the Reserves or National Guard (and none deployed, so I assumed that most weren't, but I think I was confusing my Reserves and my NGs). My father grew up on military bases, as did my cousins who have joined up.
I considered going to the navel academy, but after going through an in-depth process with their recruiter/counselors (there is a health issue that would technically make me unfit to join the military -- so they had to suss out whether I was worth taking on even though I have this issue), we all determined that my problem with authority which can pretty much be traced back to infancy, would likely be a big problem. Though, they were the first to recommend law as a pathway for me based on that. LOL
I also don't think that it is viable for everyone. I think that a lot of people who do join and do continue and do enjoy it (or wish they would have continued, etc) are suited to it. No doubt that my grandfathers were (since both were in the military), and no doubt that my cousins are. One is hard-core career military, working in meteorology in Minot, ND. Another is stationed in Guam right now -- mostly doing all sorts of disaster relief and other humanitarian efforts. THey have no plans on leaving.
I don't think that they are 'damaged' people at all. I think that the structure, the way of life, and the work suits them.
It just doesn't suit everyone. And, I think it's fair to say that.
And, since I believe in other methods as well (and those exist), those are also worth pointing out.
jfrombk,
Is that the total amount, or simply the private loan amount (principal at 103k, interest at 62k)?
It never hurts to get into the federal programs if you are not already there. So, if you haven't done that -- even if federal are 'ok' -- do it anyway, get it sorted.
For private loans, I don't know which of these (http://www.finaid.org/loans/privateconsolidation.phtml) is still valid, but one of them has a co-signer release after 12 months if all payments are made (Cedar Education). Which means that they can co-sign for the year, and at the end of the year, they are released and you keep paying. THis can at least get the interest rate down below 8%, which would be very helpful for you in the long term.
It's definitely worth looking into, and discussing with your parents. If the three of you together could cover 12 months, they would be free and clear after that. THere are also interest-only options for the first 4 years, which is a great option as well.
I would look into it again, see what you can come up with -- a plan for yourself and your family.
Also, as an aside -- does your fiance have debt, and how is that looking?
This is still one of the few areas where I've come to believe additional involvement by the Federal Government might be beneficial. Jfrombk's post confirmed that for me. Details belong in the finance thread, but it seems like a very workable compromise would be to establish a program within the Department of Education that would allow for the conversion of private student loans to government student loans at very low interest rates, with all loans being consolidated into one. The loans would still be paid back (heck, even AIG is paying the money from their bailout back), but in a fashion that would allow the borrowers to live a normal life as they repay. As much as I hate the thought of expanding any part of the government, I just don't see a lot of downside to this one.
This is still one of the few areas where I've come to believe additional involvement by the Federal Government might be beneficial. Jfrombk's post confirmed that for me. Details belong in the finance thread, but it seems like a very workable compromise would be to establish a program within the Department of Education that would allow for the conversion of private student loans to government student loans at very low interest rates, with all loans being consolidated into one. The loans would still be paid back (heck, even AIG is paying the money from their bailout back), but in a fashion that would allow the borrowers to live a normal life as they repay. As much as I hate the thought of expanding any part of the government, I just don't see a lot of downside to this one.
If I read j's post correctly that some of his loans are at 14.5%.... that seems morally wrong to me.
My sis is getting ready to go out and buy a new car at .9% interest - a stupid car at less than 1% over 5 yrs.
And I do understand (although not the ins&outs, but in a Liberal Arts, Big Picture Way ;) that the laws of economics are at play there.....
Tough to move new cars in a crap economy vs. Current demand for piece of paper saying You Did It, so you can scrap for barely existent jobs in said crap economy
If I read j's post correctly that some of his loans are at 14.5%.... that seems morally wrong to me.
And yet... he voluntarily signed the loan contract, in order to get what he wanted...
flowerseverywhere
3-28-12, 9:21am
It's funny, for all the negative beliefs and angst people have about joining the military, I've never met one person who didn't wish they had stayed in longer - most wishing they had made a career out of it.
I do. Just like the current college costs are something I cannot really comprehend as my kids have been out for ten years, the current military (or at least some branches) is somewhat different.
My friends son was in Iraq for fifteen months for his first tour. They did not have the proper armored vehicles and equipment yet they were sent anyway. You probably all remember the scandal when the troops did not have the right equipment or faulty equipment. He was sent for a second tour when he had about a year left. He was part of the stop loss thing and ended up being there again for fifteen months. Then they got stuck in Kuwait waiting to get home for weeks. He has nothing nice to say about his time in the military.
I'm guessing there are some Vietnam vets out there that also have no regrets they got out at the first chance, especially draftees.
And yet... he voluntarily signed the loan contract, in order to get what he wanted...
I get that.
It's just a tough nut to crack.
I hope there is legislation out there for 'Ultrasound Financial Tests before Student Loan Signing'. If kids REALLY knew what they were getting into and what their prospects REALLY were.... would they do it?
I have heard that some high schools have hundreds of students per guidance counselor.
Of course, their parent(s) should be guiding them. HMMM.
And even if they are, surely everyone has enough belief in themselves and are optimistic enough at that tender age to think , "That won't be me, I'll work hard and beat the odds!"
High interest loans are for lenders that the creditor believes has the lowest chance of pay back.
High interest rate, interest paid off first, then lender defaults - creditor hopefully recoups a decent portion of what they put out.
High interest rate + Principle paid off.... then creditor just made one handsome sum on a person that could afford it the least.
which they have every right to do b/c nothing in life is FREE & risk costs money, but last sentence above just doesn't sit well with me in regard to education which is of national interest - now rental furniture, stuff & things - that's another matter
But from the moment kids enter pre-k or kindy... Stay in School, Education/Hard Work will Pay Off, Education is the Way Out, Go to college
That's the MainStream messaging I heard (h.s. Class of 88)
And with more and more manufacture jobs shipped overseas & levels of specialization in fields skyrocketing, it seems even more imperative to need the piece of paper.
Somehow this correlates with Housing Mortgages.... where the thought process of Everyone Needs to Own a House walked handed in hand with some Shady, Greedy Corp.'s
Ol' Lucifer better be stoking up the fires, 'cuz Greed is on the prowl and being assisted by Pie in the Sky thinking!
Edit to Add: That really is "The road to hell is paved with good intentions!" :devil:
If I read j's post correctly that some of his loans are at 14.5%.... that seems morally wrong to me.
As bae said, the choice to enter into that contract was voluntary, not forced and he knew the terms before signing on the dotted line. There is nothing morally corrupt in that transaction. As you said, higher risk loans carry higher interest rates to adjust for the increased risk and for whatever reason jfrombk is in that category. Its a tried and true business model that survives today because it works. If your sister has a 750 credit score she can probably get that .9% car loan. If I walk into the dealership with a 550 score, I won't. In addition, the auto manufacturers are subsidizing those low interest car loans. Whatever institution of higher learning jfrombk went to apparently is not willing to do the same thing with his student loans. On top of that, your sister will still have to pledge her new car as collateral on that .9% car loan. If she missed payments the lender will come and get it and sell it to help cover their losses. What would you suggest j's lender do to secure their loan to him? Comparing student loans to any kind of collateralized loan really is comparing apples to oranges, but I'm not convinced Satan is behind either one.
mtnlaurel
3-28-12, 11:23am
As bae said, the choice to enter into that contract was voluntary, not forced and he knew the terms before signing on the dotted line. There is nothing morally corrupt in that transaction. As you said, higher risk loans carry higher interest rates to adjust for the increased risk and for whatever reason jfrombk is in that category. Its a tried and true business model that survives today because it works. If your sister has a 750 credit score she can probably get that .9% car loan. If I walk into the dealership with a 550 score, I won't. In addition, the auto manufacturers are subsidizing those low interest car loans. Whatever institution of higher learning jfrombk went to apparently is not willing to do the same thing with his student loans. On top of that, your sister will still have to pledge her new car as collateral on that .9% car loan. If she missed payments the lender will come and get it and sell it to help cover their losses. What would you suggest j's lender do to secure their loan to him? Comparing student loans to any kind of collateralized loan really is comparing apples to oranges, but I'm not convinced Satan is behind either one.
OK, I'll riscind 'morally wrong', but how about Big Old Bummer. Which reply to that is - yup, that's life with a low credit score.
It is a Big Grown Up Pill for sure.
Actually, what I would suggest for collateral might have us going down the path of Indentured Servitude that Zoebird brings up at top of thread.
If taxpayers have to bail out/help out at every turn, then Conscripted Public Service for cost of living wages appropriate to persons' skill set until they are able to find suitable employment.
At least then taxpayers would be getting some tangible benefit, if they are going to have to pay anyway.
If taxpayers have to bail out/help out at every turn, then Conscripted Public Service for cost of living wages appropriate to persons' skill set until they are able to find suitable employment.
At least then taxpayers would be getting some tangible benefit, if they are going to have to pay anyway.
I'm not sure about compulsory service, but the thought of an optional stint in areas where the government needs additional resources isn't a bad idea. We've talked about medical service in underserved areas in trade for med school loans being paid, why not expand that idea to other areas?
ApatheticNoMore
3-28-12, 2:24pm
Geez, what a mess, not sure that world you are creating is a world I 'd like to see. I mean it basically boils down to, taken to it's extreme, a world where you need a student loan to support yourself (not quite there yet, no matter how many people say we are in fits of hyperbole .... but you can see the possible progression and end game, right?) and then you need to serve in government labor to pay for that student loan (which could easily be made to made to mean the military, though it doesn't have to).
And yes I do believe the whole student loan thing is a mistake and student loans probably shouldn't even EXIST (but again I don't mind state colleges etc. - the California model worked pretty well when there was money and will to fund it, having that much money was an aberation, still ...).
San Onofre Guy
3-28-12, 3:11pm
My wife went to college at age 40 after her kids left the nest. She then moved to California and enrolled in a private university to earn a Masters Degree with a teaching credential. I met her when she was nearly finished with the program. Prior to finishing she received an Apple grant ( not the computer company but a teaching grant). If she taught in certain districts she would have $25,000 debt forgiven after two years. She got her credential one month after large layoffs began a few years ago. Do you know what it is like to try to get a teaching job today, or for that matter the past three years? Try being 55 years old. Jobs don't exist. Each month I pay $200 on the 7.8% loan now with a balance of $9,600 and $300 on the 3.4% loan with a balance of $64,000.
The $4,000 tax refund didn't go to pay it down but rather towards her daughters wedding and my youngest for a school trip to Europe.
Was it wise for my wife to borrow $80,000 for these degrees? You bet given the information she had when she began to take classes and get her credential. I treasure her knowledge when we go to Art Museums which is a few times per month.
Could I do something with an extra $500 per month? You bet, but my wife has knowledge and that is valuable.
Would I ever consider defaulting on the loan? Not on your life. She signed a contract and is morally obligated to satisfy that obligation.
She needs work, not for the money although it would be nice, but to be a productive participant in society. There still are people like us in the world that aren't looking for the lounge chair in retirement.
none of the private loans that i took out had those kinds of interest rates -- so i'm wondering if that's because of the year that they were taken.
and yes, according to ancient traditions around lending -- lending itself is considered problematic, and taking interest on it is considered immoral. that's in the bible, and i believe it goes back before then, even.
none of the private loans that i took out had those kinds of interest rates -- so i'm wondering if that's because of the year that they were taken.
and yes, according to ancient traditions around lending -- lending itself is considered problematic, and taking interest on it is considered immoral. that's in the bible, and i believe it goes back before then, even.
Do YOU consider it immoral to "take interest" on a loan? Is that why you posted this?
DH and I are being courted as investors by a young couple who live in this neighborhood. They've floated a couple of wildly divergent projects in front of us, the only commonality being that the projects are geographically located in our neighborhood.
I won't be "co-investing" with anyone when it seems to be my money and their--what--idea? that are brought to the table. When no one has to pay back anyone, and lending is immoral, that environment does a lot to dry up available capitol.
OTOH some years ago DH and I pledged a few thousand $$$ to rebuild a building that has grave historic significance for this neighborhood. We intended it as a charitable donation, and if we every saw any of that money back, it would have just been gravy.
none of the private loans that i took out had those kinds of interest rates -- so i'm wondering if that's because of the year that they were taken.
and yes, according to ancient traditions around lending -- lending itself is considered problematic, and taking interest on it is considered immoral. that's in the bible, and i believe it goes back before then, even.
Tangent to ensue:
I am embarrassed that I've gone through 12 years of parochial school and many, many yrs of church attendance (some yrs. spotty attendance) and really am not familiar with 'Usury'
If anyone is interested in reading the wikipedia entry, I'm in process of reading it right now...
http://en.wikipedia.org/wiki/Usury
And I'm sure there are better sorces than wikipedia, but it was one of the first to come up when Googled
We don't have to talk about it here, but could meet up on a Religion Thread if anyone wants to start one & discuss.
Tangent to ensue:
I am embarrassed that I've gone through 12 years of parochial school and many, many yrs of church attendance (some yrs. spotty attendance) and really am not familiar with 'Usury'
If anyone is interested in reading the wikipedia entry, I'm in process of reading it right now...
http://en.wikipedia.org/wiki/Usury
And I'm sure there are better sorces than wikipedia, but it was one of the first to come up when Googled
We don't have to talk about it here, but could meet up on a Religion Thread if anyone wants to start one & discuss.
There are usury laws in this country to prevent outragous loan practices (which for many legal reasons credit card companies don't fall under). But it is competely against the law in some other countries (mostly Islamic countiries) even though interest is still charged/earned, it's just done in a way that many believe follows religious requirements against usury. I'm with Iris Lily on thios - if you feel it's immoral to pay interest, then you in turn need to feel it is immoral ti earn interest.
Geez, what a mess, not sure that world you are creating is a world I 'd like to see. I mean it basically boils down to, taken to it's extreme, a world where you need a student loan to support yourself (not quite there yet, no matter how many people say we are in fits of hyperbole .... but you can see the possible progression and end game, right?) and then you need to serve in government labor to pay for that student loan (which could easily be made to made to mean the military, though it doesn't have to).
The term "optional" in the post you responded to kind of deflates the response. As in, if you didn't think government service was for you, don't do it. And as long as we're on the subject of optional behavior, its worth noting that there is not one single person here or anywhere else that HAD to take out a student loan. Absolutely none. It was 100% optional for everyone of those that did. That is an important point that gets skirted around time and time again. The "but I would have missed out on xxx..." that inevitably follows takes nothing away from the fact that it was an option to take out the loan the purpose of which was for personal gain. In short, it was a gamble and for many in the current market the dice came up craps. Sorry.
My wife went to college at age 40 after her kids left the nest. She then moved to California and enrolled in a private university to earn a Masters Degree with a teaching credential. I met her when she was nearly finished with the program. Prior to finishing she received an Apple grant ( not the computer company but a teaching grant). If she taught in certain districts she would have $25,000 debt forgiven after two years. She got her credential one month after large layoffs began a few years ago. Do you know what it is like to try to get a teaching job today, or for that matter the past three years? Try being 55 years old. Jobs don't exist. Each month I pay $200 on the 7.8% loan now with a balance of $9,600 and $300 on the 3.4% loan with a balance of $64,000.
The $4,000 tax refund didn't go to pay it down but rather towards her daughters wedding and my youngest for a school trip to Europe.
Was it wise for my wife to borrow $80,000 for these degrees? You bet given the information she had when she began to take classes and get her credential. I treasure her knowledge when we go to Art Museums which is a few times per month.
Could I do something with an extra $500 per month? You bet, but my wife has knowledge and that is valuable.
Would I ever consider defaulting on the loan? Not on your life. She signed a contract and is morally obligated to satisfy that obligation.
She needs work, not for the money although it would be nice, but to be a productive participant in society. There still are people like us in the world that aren't looking for the lounge chair in retirement.
+1 (and thank you!)
There are usury laws in this country to prevent outragous loan practices (which for many legal reasons credit card companies don't fall under). But it is competely against the law in some other countries (mostly Islamic countiries) even though interest is still charged/earned, it's just done in a way that many believe follows religious requirements against usury. I'm with Iris Lily on thios - if you feel it's immoral to pay interest, then you in turn need to feel it is immoral ti earn interest.
No, it's not a belief I hold, but am dumbfounded I've never really heard much about it.... but somewhere along the line 14.5% for education doesn't feel right to me
20% to go Out to Eat or an iPhone -- then you deserve whatever you get
I totally agree
1) If I owe someone/entity money I need to pay it back
2) If I borrow then I need to pay to use that money
I don't have any answers to any of it.
jennipurrr
3-28-12, 5:24pm
none of the private loans that i took out had those kinds of interest rates -- so i'm wondering if that's because of the year that they were taken.
I believe, and someone can correct me if I am wrong, that most private loans are variable interest rate, with two variables factoring into that rate - whatever index is used, and the initial "credit risk" of the borrower (sets the floor of the rate).
When DH had private loans we searched and searched in vain for a way to consolidate them into a low fixed rate product. Nothing out there even though by this point he had a good credit score and we had assets. The only decent option was a home equity loan. As I may have stated before (though I think not in this thread) we ended up putting them on zero percent credit cards because the rate was getting above 10% and we paid them off aggressively.
Now, what I will say, is I caution anyone considering private loans to use them as a LAST RESORT (or not at all!). The terms with federal loans are much more favorable. There are some private loan companies that advertise as easier to use/get, etc than fed loans...don't buy into it! The federal loan limits should be able to fund a degree without the use of private loans. If you want to go into law of medicine and need that extra money I would caution to make sure you really know you want to do that. We are still paying for DH's one year adventure at a private law school nearly 10 years later.
How old should a person be, before we expect them to be responsible enough to enter into binding contracts?
[QUOTE=Iris lily;73202]I feel so foolish not not borrowing money I'm not paying back. Damn I keep missing these loan forgiveness opportunities.
[QUOTE]
Agreed. Don't borrow it and you don't have to worry about paying it back.
Also, why are politicians consistently trying to promote "public service" positions? In many cases, those jobs pay better than market already.
Yes, certainly don't borrow it when you're denied retraining benefits after losing a job due to budget cuts, and just stay unemployed for the rest of your life. How silly of me to want to try to make myself more employable when losing my job had already destroyed my finances. Don't borrow it and see if flipping burgers is something you can continue to do after you hit 75 or so.
What many people miss is that a growing number of these students are in their 40s and 50s with no other avenue of education available to them, and no job prospects without retraining. Even what counts as a "modest" 2-year educational cost now adds up to more than we will live long enough to repay. Under the current regulations I may finish paying off my loans around my 80th birthday. Provided I find anyone who wants to employ someone over 55 in an entry level job, and never, ever miss a payment...
I really find the sanctimoniousness off-putting.
There are a lot of people "out there" who are not stupid, non-working people who want a free ride.
I agree, Zoebird. It's too easy to say "you should have been more prepared." I spent my entire life trying to be more prepared, but things haven't worked out that way. As a person with disabilities, for over two decades I worked harder than anyone around me, just to keep up, popping pain pills all the way. When my body couldn't do that anymore, I lost my job. Divorce, caretaking a dying parent, medical debt, all helped put me where I am. (Yeah, I made some dumb decisions, but they account for less than 5% of the total.) For physical reasons I can only work a skilled position, and no longer in my previous field. What was I supposed to do? Sit around and hope that unemployment would be extended forever? Resign myself to living on less in SSDI (as a former stay-at-home mom then part-time worker due to health) than a one-bedroom rat-infested sinkhole of an apartment costs?
For those of the "contract" and "free will" camp, if you haven't gotten a student loan lately you're in another world. In short, the schools are your contact and administrator, and the schools lie. The documents end up being a mish-mash of different terms applied at different times, and yes, the terms can change just like on your credit cards. What you signed up for may not be what you get. And if disaster strikes, you have no recourse for relief. The fees pile up until students who borrowed less than $10,000 to begin with owe $100 and $200K if they suffer even a few months of unemployment or illness. Rest assured, they don't tell you that: there's no real way to compare costs and make an informed decision, especially with a high-pressure salesmen impersonating school recruiters. If even Elizabeth Warren has trouble figuring out the fine print and terms on these loans, the average student doesn't have a prayer.
What many people miss is that a growing number of these students are in their 40s and 50s with no other avenue of education available to them, and no job prospects without retraining. Even what counts as a "modest" 2-year educational cost now adds up to more than we will live long enough to repay. Under the current regulations I may finish paying off my loans around my 80th birthday. Provided I find anyone who wants to employ someone over 55 in an entry level job, and never, ever miss a payment...
So I'm confused. Are you advocating for a bill that says those of us who have made it to our 40s or 50s should be able to borrow money without planning to pay it back?
ApatheticNoMore
3-28-12, 6:12pm
What many people miss is that a growing number of these students are in their 40s and 50s with no other avenue of education available to them, and no job prospects without retraining.
I am unconvinced most of them have prospects with retraining. I mean retraining makes sense if you are in a job in a field that very specifically went under far more than the rest of the economy. You were a real estate agent or something involved in home building maybe. That bubble probably isn't coming back. Or maybe you were in some type of manufacturing that is never coming back to this country. Then yes .... you need to retrain, it's rational, it's basic, change fields.
But retraining is often seen as some kind of fix for an unemployment that is not just caused by certain fields going away (horse and buggies going away say) but is rather part of the whole economy. And it's not. ALL jobs almost across the board have less openings. If you had a perfectly good job before, and one that isn't disproportionally affected, and you can't get rehired, training for another perfectly good job is not necessarily going to solve your problems. That's just nonsense that is preached at people told to "retrain ...". And you know it's tempting nonsense, because school is both fun (for me) and takes some work, and it feels like you are DOING SOMETHING (rather than just sending in resumes that don't get answers which can start to feel like doing nothing). But ... I mean I guess you slightly improve your odds if you are applying in two different fields (in which you can jobs in neither?), but retraining is not the answer to everyone's problems.
The fees pile up until students who borrowed less than $10,000 to begin with owe $100 and $200K if they suffer even a few months of unemployment or illness.
Fees of that amount and in that short a time frame would violate the usury limits (http://www.lectlaw.com/files/ban02.htm) in any state in the US. If you actually know of someone who is in that position you might have them contact an attorney.
The key difference, thanks to the banks and their bought and paid for legislators, is that student loan debt CANNOT be discharged by bankruptcy. That is the one fatal flaw that makes student loan debt completely different from virtually every other debt that a person in the US can face. Anyone who is truly on the ropes financially, with virtually any other debt, can declare bankruptcy and start to rebuild their life. Student loan debtors will continue to have to repay up to and through their collection of social security. Welcome back, debtors prisons...
The bigger problem is that we've long gone done the path where banks, and anyone who lends money, has stopped underwriting those loans to be sure that the people they loan to have a realistic hope of repaying the loan.
Exactly. It's helpful to read what Elizabeth Warren, a Harvard law professor specializing in bankruptcy and personal finance, has to say about student loans. In just 6 months the total of student loan debt in the US went up something like $200 B, mostly from jacked up interest and fees on existing loans, rather than new debt. Student loans are the next bubble, at over $1T and rising rapidly. Why special forgiveness for students? 1) Students are specially targeted for misleading loans they cannot reasonably be expected to ever be able to repay, and 2) student loans are the only loans that the lending industry has managed to get completely exempted from any form of consumer protection, even garnishing benefits that are usually exempt. It's virtually impossible for a student, young or older, to make a realistic estimate of what the loan will cost them in total, and the risks associated with being in default even by one payment. Once you miss a payment or two, you're at the mercy of rigid collections policies and punitive fees/interest designed to keep you from ever paying it off, until your loan is paid off. Forgiveness is simply an effort to level the playing field before this time bomb implodes. It's not a perfect solution, but better than doing nothing.
And BTW, it makes me sick that I can't pay every penny I owe. I don't want to be in this position. I did everything I knew to do to not end up in this position. Yet I am. And I am not alone. Like millions of others, I'd be in a much better position today if I hadn't tried to pay my debts to the bitter end and just went bankrupt at the outset. We're in bad shape because we didn't game the system and because we're trying to be responsible against impossible odds. Give us a break, ok?
And yet... he voluntarily signed the loan contract, in order to get what he wanted...
ahh.. i didnt get what i wanted . I went to college to get a better paying job and to get out of a bad living situation. I WAS directed by ppl older then me that this was the right thing to do .. SO no, i didn't get what i wanted. There are so many things wrong with what people are saying its not even funny. I know i am young but first of all, there is no morality of any sort to student loans. None. And do you know why? Because for one, like someone else stated even the bible says that you shouldn't take out loans and that god will provide for you. This i believed, but again, my parents had a big say in this. Alot of people that dont have to deal with certain things in life just comment with out a mindful direction. If the economy was how it should be, then none of this would even be a problem. But instead, i am taking home 24,000 grand a year. Alot of people that say these kids have choices and should just suck it up and pay are really talking just to talk. They have no idea about the situation of their families and everything like that. MY mom was making great money before she got laid off and was going to help me pay back my loans and guess what? She gets laid off the same year i graduate (still has not been able to find a job since). I didn't find a job in the first year of my graduation. I was told by all my professors they felt bad for me because this is the worst year to graduate in about 35 years. I graduated from an hbcu, thinking that i would be able to get with a great company and intern but that was not the case. The fact is that, school should be free. Whats not morally correct is we live in a place where we have people that can make 50 billion dollars off of the middle and lower class people. What is not morally correct is that we have athletes that make more then doctors. Or that Gas is 4.60 a gallon in some places. Or that people actually believe the government is right about things...
It doesn't make me sick that i cant pay it back. I am not happy about it, but not being able to pay some bs student loans that were rigged in the beginning... na.. I feel sick for the homeless, and the poor and the diseased.
And now we see why people charge high rates of interest, if they even offer to loan their capital at all anymore...
Strong jobs market isn't all the story though. Too many jobs with very average or even below average salaries too often require higher degrees to an almost ridiculous level. My daughter, for instance, had flirted with the idea of being a librarian, until she found out you needed a MASTERS to do this! A masters! to be a librarian. I'm not dissing librarians, mind you, but here is something you could learn all you possibly needed to know in a 2 year degree, much less a masters. And there are so many other career paths like this. Not pie in the sky career paths, but everyday career paths that really shouldn't be so out of reach.
Professional librarian jobs (as opposed to library worker jobs) have required an MLS for decades at least (yes, with many entry-level positions paying less than many entry-level clerical positions). Here's one for you: with over 22 years experience providing executive level administrative support, I was recently unable to even apply for a mid-level executive support position because I didn't have a Master's degree! The position mostly involved managing the executive's calendar, for crying out loud! In three years of trying to get a job, I've watched entry-level clerical positions creep from requiring a GED only to requiring a BA/BS, and many are unwilling accept a combination of equavalent education/experience anymore. My AA in business admin and decades of experience is no longer enough for me to get a job I have demonstrated ability to do. Sigh.
Ok, so we've apparently been able to weed out two distinctly different, but connected, issues here. College costs are hyper-inflated and a lot of people have student loans they can't pay back. Since the OP regards student loans I will just address that here and figure we can start another thread to talk about college costs...
Here's the kicker that has been mentioned several times, but never really addressed by those in favor of the bill: if these loans are forgiven, simply wiped clean, who is going to pay for it? As I've said, the money that was lent was very real. I'm talking about the principal here, there are all kinds of ways to look at the subsequent interest. A bank, the federal government or some other entity actually gave money to a student. If the loan is 'forgiven' (a very unfortunate and benign sounding choice of wording) the lender takes a loss. That loss comes directly out of the pockets of shareholders or tax payers, depending on where the loan came from. For anyone with a loan that might be wiped out I have only one question, is it fair that you would receive this benefit from others who would be forced to pay for it?
Has anyone answered the question of who should pay for it yet in a meaningful way? I'm not talking about things like "savings from the wars," "so and so got bailed out and so should I." Seriously, who is going to pay for this mess if all of these loans are forgiven?
Just to clarify one thing, since I think there are differing ideas of what some terms mean: in this context, "discretionary" income is pretty tightly defined to include all income after certain allowed basic items are paid, often with very strict allowed maximum amounts. There's a set amount allowed for food, for instance, as well as certain other bills. Just like a Chapter 13 bankruptcy, it includes every penny beyond the defined basics, and often a lot of pennies the consumer might consider basics as well. For instance, in my case, my monthly medications, which I cannot manage without, for some programs count as "discretionary" purchases and that amount would be included in the calculations of discretionary income, even though they are essential to my ability to repay the loan. Your discretionary income is determined entirely by an inflexible formula, regardless of individual circumstances in most cases.
ApatheticNoMore
3-28-12, 7:03pm
Has anyone answered the question of who should pay for it yet in a meaningful way? I'm not talking about things like "savings from the wars," "so and so got bailed out and so should I." Seriously, who is going to pay for this mess if all of these loans are forgiven?
And what is the plan going forward? I find that even more relevant. I mean really is this going to create an even worse mess down the line? And I don't mean an even worse mess for those that borrowed, I have no doubt that they will be better off, I mean an even worse mess in terms of FUTURE college costs and funding. And I don't even mean loans going away (that might at this point be a blessing, like I've said). I mean in terms of expectations of a permanent bailout etc..
Like I said, if you really want to argue for federal college funding you do that straightforwardly. Doing it indefinitely in the future in terms of student loan bailouts: 1) is unfair, it's basically unfair to those who pay their debt. Government programs where they exist should be fair, and this can in my view include a redistributive element (food stamps for the poor just because they are poor say), but it shouldn't include special favoritism. 2) is just the worst most dishonest possible way to handle it financially, pretending (by the government etc.) that loans will get paid off that don't. It's just dishonest.
I keep hearing that nursing schools are totally full and turning applicants away, so I don't think it's that easy to get in. But those who pursue it will succeed, like anything else.
My son's girlfriend camped out on the sidewalk in Seattle for two days with dozens of others in order to attempt to get in when registration was opened and was turned away because so many prospective students had been camped out for three days. She ended up on a waiting list for over a year, despite already being employed at a major hospital and her mother being a nursing alumnus. There's a national shortage of nursing teachers, for one thing.
Has anyone answered the question of who should pay for it yet in a meaningful way? I'm not talking about things like "savings from the wars," "so and so got bailed out and so should I." Seriously, who is going to pay for this mess if all of these loans are forgiven?
That question so far has gone unanswered in any kind of direct sense (although we all know the answer, don't we?). Perhaps China will simply forgive the US debt that it holds so the sun may shine again.
And now we see why people charge high rates of interest, if they even offer to loan their capital at all anymore...
Sigh, sad but true. I feel a gentle reminder of 'be careful what you wish for' would not be heard over this wind.
...14.5% for education doesn't feel right to me
...
Does 14.5% "feel" right to you for a mortgage? What about 16%? That's what interest rates were when I was first house shopping back in the day.
By all means, let's determine interest rates by what we "feel" about them. Let's gauge how emo Tim Geitner is right now to get a read on setting the prime rate tomorrow. Let's hope he's had dinner and sex, that will work in our favor.
ApatheticNoMore
3-28-12, 7:25pm
That question so far has gone unanswered in any kind of direct sense (although we all know the answer, don't we?). Perhaps China will simply forgive the US debt that it holds so the sun may shine again.
well I kind of didn't take that head on because .... well money was just plain printed to bail out the banks, what was it 1.2 trillion? And several billion was printed in U.S. money to bail out European banks as well. And then the argument goes if money can be printed to prop up the powers that be .... (and what is that but propping up the existing system, the existing distribution of wealth, and the powers that be?). Yes, but sooner or later money printing can't work anymore ... um one would think. That's why what I took on head on was ok what effect is this bailout going to have with the systems we have to live in in the future, future education costs and funding.
Sigh, sad but true. I feel a gentle reminder of 'be careful what you wish for' would not be heard over this wind.
true
i wonder why people are not wondering what will happen if these loans are not forgiven? what do you think will happen if ppl cannot get houses because they are paying inflated loan prices.. or they all are going broke because they cant afford to pay the crazy interest rates.?
I think your approach made a lot of sense ANM because it really is a way to take a look at the cause as well as the effect. But there is always that nagging little question of who's going to foot the bill this time. And at some point the printing press will probably be unleashed, but for now it makes more sense to sell our future dollars rather than fork over peach baskets full of today's dollars. It still makes more sense because bae's warning has not yet come to pass for the big borrower, the USA.
Professional librarian jobs (as opposed to library worker jobs) have required an MLS for decades at least (yes, with many entry-level positions paying less than many entry-level clerical positions). ...
Oh I'm certain that peggy is correct as always, librarians just checking out books, that hardly requires advanced education. Learn the job in 2 years? I'd think 2 hours.
So I'm confused. Are you advocating for a bill that says those of us who have made it to our 40s or 50s should be able to borrow money without planning to pay it back?
No, simply pointing out that the assumption that students loans are a problem for 18 year olds alone is a false one. Any solution has to go beyond that assumption, and find a way to make needed education affordable for older adults who are already permanently disadvantaged in the job market (as opposed to young people who have time to overcome the effects of the current very high unemployment rates.
i wonder why people are not wondering what will happen if these loans are not forgiven? what do you think will happen if ppl cannot get houses because they are paying inflated loan prices.. or they all are going broke because they cant afford to pay the crazy interest rates.?
On an individual level the situation is pretty clear what happens if the loans aren't paid and aren't forgiven. Like any other unsecured/unpaid loan there will probably be a collection action. Those calls at dinner time, letters in the mail every day, all the things that creditors do to attempt to make debtors honor their obligations. When you've spent enough time and effort to convince them they can't get blood out of a turnip they will probably get a judgment against you. At that point they can garnish your wages for whatever time period and amount is allowed in your state. That will go on until the debt is paid or until you reach the legal time limit for a garnishment where you live. The alternative is that you can offer a settlement. Show them what you have and see if they will take whatever you can come up with in a one time payment and then THEY will write off (forgive) the rest and its over. Just like governments, lenders know today's dollars are a lot more valuable than tomorrow's so it could work. If that option were to happen the difference is that the LENDER would forgive you without the government forcing them to. They would accept your offer of their own free will. Oh yea, and the rest of us won't have to pay it back.
As far as what would happen beyond that, it would be up to you. Your credit would take a stinger, but not as bad as a bankruptcy. You could get a job, save money, buy a house...whatever you want and are capable of.
ApatheticNoMore
3-28-12, 7:46pm
Oh I'm certain that peggy is correct as always, librarians just checking out books, that hardly requires advanced education. Learn the job in 2 years? I'd think 2 hours.
It used to be possible to land an entry level engineering job with a 4 year bachelors in math back in my parents day. I know, I know, librarianship is much more difficult, why it really shouldn't even be discussed in the same sentence as some easy field like that but ... it used to be possible to get into lots of things with a 4 year degree. I argue still that it's not impossible to get into some things without all the desired credentials, but to admit the fact that more and more degrees are being desired for everything is just to point out the obvious.
Fees of that amount and in that short a time frame would violate the usury limits (http://www.lectlaw.com/files/ban02.htm) in any state in the US. If you actually know of someone who is in that position you might have them contact an attorney.
When the Supreme Court decided in the 80s that banks could "export" interest rates from states with high or non-existent usury caps across the country, usury laws essentially ceased to exist for most purposes in most of the US (Elizabeth Warren, Nicholas Shaxon, several other authors). Payday lenders routinely charge rates of 400% to 1000%. I got the information I loosely quoted from several books quoting studies on actual student experiences.
It used to be possible to land an entry level engineering job with a 4 year bachelors in math.
In truth, when applying for jobs at a company I didn't yet work at, nobody ever asked me during the interview process whether I had a degree, what it was in, or where it was from. They asked about my skills and knowledge, and my work experience, and that was about it. I got recruited to come work at one startup by a fellow who met me at a conference, and I ended up working there for three months before I found out everyone else had a Masters or better, and that "we didn't hire BA/BS/BSEs" :-)
i wonder why people are not wondering what will happen if these loans are not forgiven? what do you think will happen if ppl cannot get houses because they are paying inflated loan prices.. or they all are going broke because they cant afford to pay the crazy interest rates.?
I zipped back thru the thread, so please feel free to correct me if I'm wrong. You are 25, make 24k, have $150K +/- in student loan debt, are reasonably healthy, just lost your 2nd job, and would like to get married. I'll be honest, don't know exactly how you got where you are, but wouldn't want to be in your shoes. I feel for you being in this position, but you have options.
Options, at least one of these is applicable to you, include a) higher paying job - This may require moving or doing something unpleasant b) Join the military, I understand they have debt foregiveness programs c) Take a govt job that offers some sort of debt foregiveness d) I would suggest lowering your expenses, but you can't have many at $25k a year.
The point is, you have options whether you realize it or not.
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