College Loans and the US Debt

[CBDV]

I've brought this up before. I'm in a not so good situation on student loans because -

 

Teachers say failing loan forgiveness program will cost them thousands | Education | Kentucky.com

 

 

It was cancelled right when I started work......

 

I would have paid for school another way or not finished if I had known the program wouldn't have been there when I needed it.

[BaseballIsLife]

Well I can tell you all a little about it although it appears some of it has already been shed.

 

I'm about ankle deep right now in debt which isn't too bad. I went to UK for undergraduate work with the plan of getting admission into Pharmacy school. You don't need a degree but just need to get the prerequisite classes done plus take the PCAT exam before being interviewed, etc. by the College of Pharmacy before being accepted. Although an interesting fact is that they are moving to getting a bachelor's before applying for Pharmacy which would make it one in the same with the model for Med School. Regardless, you can get both subsidized and unsubsidized loans in undergraduate work. You can borrow up to so much subsidized money each year otherwise if you need more money, it will have to be an unsubsidized loan. Fortunately for me I had scholarship money and KEES money so I didn't have to borrow any money for school. However, once I entered Pharmacy School last year that all changed.

 

Pharmacy School is pretty expensive itself as it is about double in the instate tuition to go to UK (roughly $22,000 year + $3,600 summer internship costs) for undegrad work. That also doesn't include living expenses, among other things that you would accrue along the way. Regardless over 4 years, its gets very expensive and if you are borrowing for every dollar of it you will easily break 6-figures and more. Its not cheap thats for sure. The loan structure though for graduate/professional schools actually recently changed and went into affect for this school year. Before this year, you could borrow so much subsidized loans before taking on unsubsidized ones like what is currently the undergraduate model for loans. However, there was legislation passed last year that eliminated borrowing any subsidized loans for all professional/graduate students from here on out so we could only borrow unsubsidized loans. There is also a Federal PLUS loan that is also unsubsidized but its interest is at a much higher rate compared to subsidized/unsubsidized loans. You can get this loan if you've already borrowed your max for the unsubsidized loans for that school year. Over 4 years, this stuff can get pretty expensive thats for sure.

 

Thankfully I've had mutual funds set up when I was only little by my parents and I've been able to use that and not take a big hit yet in the loan department. However, that money will officially run out this year (my 2nd year) so I'll have to start borrowing money each year and I will quickly be in some big debt. Fortunately, the job market is still okay for Pharmacists for the moment. About 7 years ago, the job market was ripe for recently graduated pharmacists because they used to have 4-5 job offers right out of school. Unfortunately, with the decline in economy the aging pharmacists that were planning to retire and would make way for a new one have opted to keep their jobs for a little longer which has hurt the job market for us. Fortunately, there is an average of about 1 job offer per graduating pharmacist now so we can start paying off our loans pretty quickly.

 

I may be incorrect on this but I believe you don't have to start paying off your school loans until 6 months after you stopped taking classes. Otherwise as long as you maintain yourself as a full-time student, you can keep deferring until you decide your finished with school.

 

I think I can agree with a comment or two in here that some degrees are just really money pits with no virtual job market for those who get the degree and thus are unable to pay back the loans they took. However, that isn't the case for every degree like the professional ones I'm involved in.

 

Overall this is just a rough overview of the loan system and what I'm aware of in my 2nd year of pharmacy school. I've still got 2 more years left after this one and in those 2 years I will be fully paying for my education on loans while I'm only partially borrowing this year. I won't be in as rough as shape as money but depending on the degree you are pursuing, those loan debts can accrue VERY quickly and can seem overwhelming and impossible to pay off based on the interest rates they have on them.

[Getslow]

Way back in the dark ages when I was in school, student loans were called National Defense Student Loans. I think the name says it all. It is in the long term best interest of our country for people to be able to further their education.

 

I agree with this in principle. I like the idea that a college education is available to any student with the brain and the work ethic to get through it, not just the ones whose parents can afford to pay for it. As we move forward as a country, we need a true meritocracy where our best minds are rewarded and making college affordable is a big part of that.

 

But there's a pretty good argument to be made that the insane increases we've been seeing in college tuition rates over the last 25 years can, at least in part, be attributed to the steady flow of easy money flowing into universities from these loan programs. Universities are flush with cash and can keep raising tuition higher and higher because with Uncle Sam as public loan guarantor, they never have to worry that some of that tuition will never be paid. It will always be paid. At this point there are almost no negative consequences for a university to raise tuition six percent every single year or two. That's a problem.

 

It's like the banks that bought up toxic assets for 10 years prior to the collapse of Lehman Brothers... and they didn't even need a guarantee. Given the government's history from the bailout of Mexico's creditors and forward, they KNEW that someone would step in and pay the bill.

 

Banks kept buying and buying and buying while colleges keep building and building and building. There are no consequences because someone else always pays the bill.

[marvel]

Anyone else see the immortality of taking money from taxpayers, then giving it to taxpayers, then making taxpayers pay it back with interest so uncle Sam can an make a profit?

[Lawnboy13]

Ever notice when the Gov't says they are making more money available for student loans then about two or three weeks later all the schools send a press release out that they are raising tuition, never fails.

 

If the Feds would get out of the student loan business college tuition would most definitely would come down.

[BIG BLACK JACK]

I don't think I, personally, would go to a private school for undergrad nowadays unless I had the means to pay for it. I do understand that the education is much better, but is it really worth $100K compares to ~$30K when going to an in-state institution?

 

With that being said, the expense of graduate school is outrageous. And again, unless you have a job lined up, are in a field with a high demand, or have a way to pay for it, I would recommend against it.

[swamprat]

College is not a right. It is a privilege.

 

There should be NO government sponsored or subsidized student loans. One should either take out a private loan, earn scholarships, or work their way through. If you want it paid for, there are plenty of businesses that offer tuition reimbursement.

 

When the "free" money goes away, the tuition will come down, naturally.