Student Loans - problems for retired.

Grandma's New Financial Problem: College Debt - Yahoo! Finance


Student loans are a problem that simply are not just going to go away.


Interest rates should be no higher than 3%, EVER.

Should be forgiven at age 60.

Should be forgiven after 5 years public service.

"Forgiven" is a touchy word.

Give me some examples of how they might work it off through public service.

I'm paying for my kids college education, why should I pay for their kids education also? If anything let's transfer the debt in full to the kids who attended college. No cut in interest rates, no forgiveness of debt. Too much is thrown on the taxpayers when people make bad decisions.

This is such a terrible double-edged sword. Really exemplifies Livy's ancient proverb of being able to cope with neither the disease nor the cure.

There's a good argument to be made that a big part of what's allowed college tuition costs to far outpace inflation is the glut of free money flowing into universities through federal aid programs. The universities get it without having to worry whether it will ever be paid back. If it isn't, that's the government's problem, not the institution's. At this point, at least while the bubble's still growing, universities can take in tuition and spend and spend and spend with no immediate consequences. I know my own alma mater, the University of Dayton, is a good example of this; there has been more construction on campus in the last 10 years than in the 45 years preceding.

At the same time, if we cut these programs off, are we really prepared for what happens then? I think that eventually the market will sort itself out and the ridiculous nature of attending college just to attend college will be gone forever and jobs for those without college degrees will become more widely available, but the short-term consequence could be pretty nasty, with colleges finding their money drying up and a lot of people suddenly finding out that they can't afford to attend college.

The next 'bubble'.

There is a reason the banks dumped the student loans onto the government...there is no collateral backing them. That is one of the reasons you can erase this debt with bankruptcy.

Remember the old saying - "Whats the difference between true love and herpes? Herpes is forever." So are student loans - until you pay them off.

Originally Posted by Clyde

"Forgiven" is a touchy word.

Give me some examples of how they might work it off through public service.

Working all those stimulus funded infrastructure projects!

Originally Posted by Bluegrasscard

Working all those stimulus funded infrastructure projects!

Yes I know you're joking with the above but it sort of gets to my point.

Are we saying one's labor will pay off student debt? How is the guy going to eat if he's not earning wages?

Originally Posted by Clyde

Yes I know you're joking with the above but it sort of gets to my point.

Are we saying one's labor will pay off student debt? How is the guy going to eat if he's not earning wages?

When you find a significant 'infrastructure' project (stimulus funded or not) please post it. I guess the I-75/71 bridge will fall into the Ohio before they spend real money on real things.

Originally Posted by Bluegrasscard

When you find a significant 'infrastructure' project (stimulus funded or not) please post it. I guess the I-75/71 bridge will fall into the Ohio before they spend real money on real things.

Oh you guys can't your bridges fixed/built either? That makes me feel better about Louisville.

Originally Posted by Bluegrasscard

The next 'bubble'.

There is a reason the banks dumped the student loans onto the government...there is no collateral backing them. That is one of the reasons you can erase this debt with bankruptcy.

Remember the old saying - "Whats the difference between true love and herpes? Herpes is forever." So are student loans - until you pay them off.

Student loan debt cannot be erased by bankruptcy.

Originally Posted by 4chs

Student loan debt cannot be erased by bankruptcy.

I saw that too; taken in context that's clearly what he meant.

I'm looking at around $40,000 in student debt when I graduate this spring. Not THAT much in the grand scheme of things, but still a lot more than I'd hoped for. Hoping to pay it off within 2 years by living as cheaply as possible and putting all spare cash into it. I don't want this $40,000 I owe to turn into the $75,000 it will be if I pay on their schedule.

Interest rates are pretty high up there right now...

Originally Posted by 4chs

Student loan debt cannot be erased by bankruptcy.

Oops...let out that all import word...NOT....sorry my mistake.

Originally Posted by Getslow

Oh you guys can't your bridges fixed/built either? That makes me feel better about Louisville.

Hey, hey...I live in the Bluegrass area...we have solution to the issue of bridges...its called the Valley View Ferry...3 cars at a time across the Kentucky River...

I can get a better interest rate on a car that depreciates than I can on an education that everyone in school told us to get? Stupidity.


Teachers, public defenders, health care workers that work for non-profits or county/state health agencies, police, firemen, emergency responders. Middle Class jobs that benefit the people and country.

Work 5 years and and pay no more than 10% of your disposable income and what is left is forgiven.

Originally Posted by CBDV

I can get a better interest rate on a car that depreciates than I can on an education that everyone in school told us to get? Stupidity.


.

Do you not understand the economic/financial reason for that?

Originally Posted by CBDV

Grandma's New Financial Problem: College Debt - Yahoo! Finance


Student loans are a problem that simply are not just going to go away.


Interest rates should be no higher than 3%, EVER.

Should be forgiven at age 60.

Should be forgiven after 5 years public service.

Again, sorry, but I completely disagree. Repeating myself from another thread, higher education is not a right. It is a privilege. There is no law that says a degree has to be obtained in 4 years, either.

Interest rates should be what the market can bare. Just like any other loan.

No loan should ever be forgiven due to the age. The economy can't bare something like that now, and the baby boomers are turning 60.

If public service is what one wishes, and gets a loan to finance an education to work in that domain, then it is their responsibility to pay it back. Not the taxpayers, who are already paying the graduate's salary. Many private sector employers offer tuition reimbursement. If one wants their education paid for, let the private sector do it.

We are at a tipping point on the cost vs. value of education - as it is currently implemented.

Education is important and post-secondary education is important and critical. But the traditional college experience is extraordinarily expensive.

The cost of college has greatly increased since the mid-1980s (at the risk of dating myself). Tuition alone has to be around 4 times what it was in the mid 1980s for a public university. Dorm fees, food other expenses have also go up with typical inflation.

Has the salary of the typical starting job done the same? The answer is clearly no. A couple of years ago I check with a friend who works for the countries largest aircraft manufacturer and asked - what is the market since my son had interest in aviation. He said we are hiring - $35,000 for a 4 year engineering degree (i.e. a B.S.). That is 2010. But knowing what I started at in the mid 1980s it was striking that it was basically the same. In 25 years the typical salary for a hard science technical engineering degree was flat in absolute, non-inflation adjusted dollars.

As noted here it is not unusual for kids to have tens of thousands of loans coming out. And that is for public universities. I have met people who went to private colleges who have loans heading for or over $100,000.

Something has to give. The price vs. value of post-secondary has obviously eroded badly. Loading up on student loans to have a $30K or less a year job waiting just seems like a bad model.

Originally Posted by Bluegrasscard

We are at a tipping point on the cost vs. value of education - as it is currently implemented.

Education is important and post-secondary education is important and critical. But the traditional college experience is extraordinarily expensive.

The cost of college has greatly increased since the mid-1980s (at the risk of dating myself). Tuition alone has to be around 4 times what it was in the mid 1980s for a public university. Dorm fees, food other expenses have also go up with typical inflation.

Has the salary of the typical starting job done the same? The answer is clearly no. A couple of years ago I check with a friend who works for the countries largest aircraft manufacturer and asked - what is the market since my son had interest in aviation. He said we are hiring - $35,000 for a 4 year engineering degree (i.e. a B.S.). That is 2010. But knowing what I started at in the mid 1980s it was striking that it was basically the same. In 25 years the typical salary for a hard science technical engineering degree was flat in absolute, non-inflation adjusted dollars.

As noted here it is not unusual for kids to have tens of thousands of loans coming out. And that is for public universities. I have met people who went to private colleges who have loans heading for or over $100,000.

Something has to give. The price vs. value of post-secondary has obviously eroded badly. Loading up on student loans to have a $30K or less a year job waiting just seems like a bad model.

We had kids go to Hanover and major in EDUCATION???? That's $50,000+ in loans to become a history teacher? Just doesn't make sense. The worst are the kids who aren't cut out for college. They are better w/ their hands than the books. Parents FORCE them into a four year school and they never graduate but carry that debt. Somehow, going to a Trade school has been cast in such a negative light that people have to fall into them. Those that pick up a trade start out at close to the same pay as an average college grad, if not better, and have no student debt if their union picks it up.

Originally Posted by mexitucky

We had kids go to Hanover and major in EDUCATION???? That's $50,000+ in loans to become a history teacher? Just doesn't make sense. The worst are the kids who aren't cut out for college. They are better w/ their hands than the books. Parents FORCE them into a four year school and they never graduate but carry that debt. Somehow, going to a Trade school has been cast in such a negative light that people have to fall into them. Those that pick up a trade start out at close to the same pay as an average college grad, if not better, and have no student debt if their union picks it up.

Yep. India has a problem in that with the focus on 'white collar' outsourcing jobs that is all they want to do. It is considered a disgrace to go into 'the trades'. Hence they lack good infrastructure building skills and their infrastructure is still 3rd world mostly. For reference - the recent 2 day power outage may have been related to the lack of focus on key infrastructure. In the US we have basically done the same thing with the bar being set at getting a 4 (or more) year BS or BA. I talked to a mother of recent marketing graduate who was unhappy since all he could really land were 'sales' jobs. His default solution - go back and get another degree. He did not even know what degree to get. But he knew his marketing degree was working to place him in a job he wanted. So there is dissapointment by many recent graduates it seems. And their answer - go get yet another degree (and load up more loan debt!).

$30,000 a years is roughly $15 an hour. Good plumbers, electricians, etc. make more than that. The concept of apprenticeships is one that needs to come back. There are a lot of good trades people who are going to retire soon and there will be a need. Especially if/when new construction picks up.