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Uncle Bill
04-29-2012, 01:12 PM
Here's some 'truth' concerning the college loans, as opposed to the prevaricator in chiefs rabble-rousing at various universities. When it comes to politicizing bull crap, no one is better than the Stuffed Shirt in the Whitehouse, and as is typical, no one is more ignorant about the facts.

UB

Washington Needs A Lesson on Student Loans (http://links.heritage.org/ct/8518269:11848552939:m:1:210623940:D684A11615C3B2E8 FC5235F037172489:r)

You know a politician is looking for applause when he speaks in front of a crowd of college students and says he's there to help them pay back their student loans. After all, who doesn't like the prospect of free money? But as the saying (sort of) goes, beware of politicians bearing gifts. That's especially true this week as President Barack Obama travels the country warning students that their student loan interest rates are set to double and that he has the answer to all their problems.

Guess what? He doesn't. But if there's one thing the president has managed to accomplish, it's in turning this issue into a political football. And now the House of Representatives is joining the game.

This all began back in 2007 when Democrats pushed for a five-year student loan interest rate reduction to 3.4 percent as a temporary subsidy in order to help make the loans more affordable. Now that "temporary" subsidy is set to expire, meaning that rates will return to their original 6.8 percent levels. In the midst of all this, the House is expected to vote today on a measure that would keep interest rates where they are -- costing taxpayers $5.9 billion for a one-year extension. And under the proposal, the extension would be paid for by taking funds from Obamacare's Prevention and Public Health Fund. Obamacare, instead, should be repealed outright -- not used as a "slush fund" to pay for other programs.

But besides the measure being a flawed and costly way to pay for the lower interest rates, there's an even bigger problem. The supposed benefits of keeping the interest rates at 3.4 percent are largely illusory, and the president is selling students a bag of magic beans.

Economist Douglas Holtz-Eakin explains (http://links.heritage.org/ct/8518270:11848552939:m:1:210623940:D684A11615C3B2E8 FC5235F037172489:r) on National Review's "The Corner":
[The interest rate increase] sounds serious. After all, there are 39 million Americans with student loans owing over a trillion dollars of debt, and interest rates doubling from 3.4 percent to 6.8 percent would be a huge hit at a time when households are already struggling.

Serious, except that the president's plan would apply only to those 23 million loans being borrowed directly from the federal government. Except that not all of those would benefit; it would apply only to the 9.5 million loans being borrowed through the so-called subsidized Stafford loans. Except the lower rate would apply only to new borrowers who apply this year. Except that no payments are made until after graduation, so it would not help anyone for several years. Except that it would lower monthly payments by an average of only $7.

In other words, for an incredibly high cost, students are realizing very little benefit. And don't forget, these are loans that they're voluntarily taking on as part of an investment to benefit themselves.

None of this is to say that the federal government should spend even more to subsidize student loans in an effort to make college more affordable. It absolutely should not. Federally subsidized student loans are handed out to millions of college students regardless of risk -- let alone whether they can handle college-level work. Thanks to taxpayer backing, the loans are offered at rates far below what private lenders would offer. When the students can't afford to pay, the American people are stuck with the bill.

On top of all this, government intervention in the higher education marketplace hasn't even succeeded in bringing down college costs. In fact, the price of a degree has risen right along with government spending. Pell grants have increased 475 percent since 1980, and yet the cost of attending college has increased 439 percent since 1982. It's a vicious cycle that will only get worse with more government subsidies.

There's a better way to drive down college costs. Heritage's Stuart Butler writes (http://links.heritage.org/ct/8518271:11848552939:m:1:210623940:D684A11615C3B2E8 FC5235F037172489:r) that the higher education industry is on the verge of a "transformative re-alignment," and notes:
"most college leaders live in a bubble in which the costs of ever more elaborate facilities, expanding administrative bureaucracies, and high-profile professors with light teaching loads can simply be passed on to customers in the form of higher tuition."

But those days are about to end. Underneath the surface, upstart institutions are perfecting radically new education technologies and business plans at the same time that young people and their parents are becoming more frustrated with the traditional higher-ed model, and more open-minded about alternatives. There is every reason to suspect that, quite soon, these new institutions will do to higher education what Sony did to radios and Apple did to computing. Afterward, our colleges and universities will never be the same. Few Americans, one suspects, will look back in regret.

Sure, it might strike all the right populist tones to tell college students that you're going to give them a hand out, but the caustic effects of the policy will only make higher education more costly over time. Instead of a short-term spending splurge that has little benefit, Washington should pursue a long-term strategy that gives students the help they really need.

Terri
04-30-2012, 07:02 PM
A government backed student loan is one bill, just as owing the IRS that never goes away. You can get out of your house, car, and credit card debt. The way the interest is calculated is beyond scary. I think the loan processes needs to change, but All the free money - grants to low income students is a bigger problem - causing the price of education to continually climb. College kids that go to state colleges and universities can not even get into classes needed to graduate in four years.

Two of my kids have student loan debt and in the fall my youngest daughter who will be a junior will also have student loan debt. No matter what interest rate they pay it will be a hell of a lot more money going back to the government than what was given to them in the form of grants. Not one got a grant (free money for low income). They have to pay back all the money they borrow plus interest. If more people had to pay for their education the cost would be lower for everyone. Grants are the real problem, but who really wants to deal with the real problems. It is so much easier to go after the people that work (will work) for a living.

Terri

Marvin S
04-30-2012, 08:33 PM
3 went - all were informed it was their dime - we would help with care packages - 1st one graduated with $0 debt from law school, second & third with about $3,000 apiece - but they had been taught to work & could hold a job before they were out of HS - so they were employable :). 1st grandkid finished with about 25K, will now see what the rest do, they all know how to work :).

I think it :( when people are loaned this money when they do not know how to manage it, but the fault is more than BHO's, he just the user for political purposes. Spring break was not a go to event when I went ;-).

mudminnow
05-01-2012, 11:38 AM
This is going to be the next bubble that will burst and could be worse than the housing bubble. I am in my mid twenties and my wife and i have around 200K in student loan debt. Thankfully we racked up the debt in fields where we can pay it back. I know plenty of people who are going 6 figures in debt for stupid/non marketable degrees and majors and wonder why they can't get a job. I feel the government puts to much emphasis on higher education and too little emphasis on trade schools. Plenty of kids who graduated high school with me and learned to weld or repair cars or build things now make more money than folks who spent 100k on a sociology degree.

ARay11
05-01-2012, 12:12 PM
most loans are backed by whatcha call "collateral"
Most 18 yr old kids have zero collateral.

So, how about we loan them based on grades? You must have x GPA exiting high school in order to qualify and If you can't carry x grade, you don't get money for the next semester?

charly_t
05-01-2012, 12:35 PM
This is going to be the next bubble that will burst and could be worse than the housing bubble. I am in my mid twenties and my wife and i have around 200K in student loan debt. Thankfully we racked up the debt in fields where we can pay it back. I know plenty of people who are going 6 figures in debt for stupid/non marketable degrees and majors and wonder why they can't get a job. I feel the government puts to much emphasis on higher education and too little emphasis on trade schools. Plenty of kids who graduated high school with me and learned to weld or repair cars or build things now make more money than folks who spent 100k on a sociology degree.

Good post, very true. Lots of college classes may be fun but provide no job skills ( and it is now worse than when I started to college in 1956 ).

Marvin S
05-01-2012, 12:40 PM
. I am in my mid twenties and my wife and i have around 200K in student loan debt.

There are not many fields that justify that type of debt, if any ;-).

My son has an individual with a MA in History doing day labor on his farm. If he has debt, he's in trouble.


most loans are backed by whatcha call "collateral"
Most 18 yr old kids have zero collateral.

So, how about we loan them based on grades? You must have x GPA exiting high school in order to qualify and If you can't carry x grade, you don't get money for the next semester?

I disagree with the grade idea. I would go with the ability to pay the loan off in a reasonable period of time as a criteria, based on the student's ability to verify & show employability.

As with government, every dollar that goes into this scam is a dollar that will never be productive nor go to making the country a better place to live.

helencalif
05-01-2012, 03:33 PM
I have no experience with student loans. I don't know how high the loans can get nor do I know how long the student has to pay on the loan to pay it off.

Does anyone know how many student loans are in default or never get paid back? Or does the government tap into their tax returns to get payment on student loans?

Helen

mudminnow
05-01-2012, 04:02 PM
[QUOTE=Marvin S;961212]There are not many fields that justify that type of debt, if any ;-).

QUOTE]

My go to rule when i tell folks whether or not to take out loans is "if you can make in a year what you have to take out, its fine" . You would be hard pressed to find a physician or dentist these days that are less than 100k in student loan debt. Probably 150k is the average. Student loans have a standard payback time of 10 years from the government but their are other payment schedules you can apply for.

ARay11
05-01-2012, 05:50 PM
I disagree with the grade idea. I would go with the ability to pay the loan off in a reasonable period of time as a criteria, based on the student's ability to verify & show employability.
.[/quote]


I was thinking that, too... but I don't think that would ever "pass mustard" since a teacher may rack up $120k in student loan debt to get a job that pays $36k/year. Highly employable...but not for much money. So would we not loan money to people willing to be teachers?
And, maybe they plan on going into admin at a later time where the superintendant is paid significantly more.

Heck I dunno... All I know is a whole lotta folks borrowed a whole lotta money with zero collateral and zero consequence for failure. And these are supposedly the 'smart kids' ?:rolleyes:

grades were just a simple idea LOL:razz:

ARay11
05-01-2012, 05:58 PM
helencalif;961281]I have no experience with student loans. I don't know how high the loans can get nor do I know how long the student has to pay on the loan to pay it off.
Loans can get crazy high... student can receive multiple loans over a period of time. Most loans have a 10 year payback, however, keeping those loans "deferred" is typical and can be done for several years until sustainable employment is found.

Does anyone know how many student loans are in default or never get paid back? Or does the government tap into their tax returns to get payment on student loans?
According to a NYTimes article, 8.8% are in default. I'm sure someone will correct me if I am wrong, but I think only the gov't backed student loans can be paid out of a tapped tax return.

Helen[/quote]

Cody Covey
05-01-2012, 07:25 PM
helencalif;961281]I have no experience with student loans. I don't know how high the loans can get nor do I know how long the student has to pay on the loan to pay it off.
Loans can get crazy high... student can receive multiple loans over a period of time. Most loans have a 10 year payback, however, keeping those loans "deferred" is typical and can be done for several years until sustainable employment is found.

Does anyone know how many student loans are in default or never get paid back? Or does the government tap into their tax returns to get payment on student loans?
According to a NYTimes article, 8.8% are in default. I'm sure someone will correct me if I am wrong, but I think only the gov't backed student loans can be paid out of a tapped tax return.

Helen[/QUOTE]
ALL student loans are gov't backed now

Cody Covey
05-01-2012, 07:28 PM
most loans are backed by whatcha call "collateral"
Most 18 yr old kids have zero collateral.

So, how about we loan them based on grades? You must have x GPA exiting high school in order to qualify and If you can't carry x grade, you don't get money for the next semester?

Loans are based on grades currently if you don't have above a 2.0 you can't take out loans

Cody Covey
05-01-2012, 07:34 PM
And these are supposedly the 'smart kids' ?:rolleyes:
No longer are they the smart kids...literally anyone can get into college now. It may be only community college but once you get an AA damn near any state school will accept you for most programs. The problem with loans as I see it is they are pushed as the only way to be able to pay for school. If people were frugal with school they could work and pay for school as they go or at the least have vastly less student loans. For some reason everyone thinks they need to go to a private school when the job opportunities for the most part are the same if you go to a public college or start with an AA and continue from there.

ARay11
05-02-2012, 10:32 AM
No longer are they the smart kids...literally anyone can get into college now. It may be only community college but once you get an AA damn near any state school will accept you for most programs. The problem with loans as I see it is they are pushed as the only way to be able to pay for school. If people were frugal with school they could work and pay for school as they go or at the least have vastly less student loans. For some reason everyone thinks they need to go to a private school when the job opportunities for the most part are the same if you go to a public college or start with an AA and continue from there.

We just enrolled our oldest child in college. We chose the local state college. He can live at home ( no housing expenses ) and our total bill was less than $1500 for tuition and fees. I am sure he would be excited to "get out" and go to a major university but we are trying to show him that the education is not free and it's the same wherever you get it (in regards to the basics) but the cost sure is different.

Do the student loans consider WHERE you are spending money? For example... is English 101 worth x dollars per credit hour?

mudminnow
05-02-2012, 12:10 PM
no student loans don't care where the money is spent. You apply for money and it is sent to the school. If you applied for more than tuition, the school writes you a check for that amount. Where kids get really stupid is when they apply for the Maximum disbursement they can get so they can live the high life in school. I only took out enough to pay tuition, my classmates on the other hand took out much more and would go party on the weekends with it. It never made sense to pay 8% interest on bud light for the next 10 years

Corey Capozzi
05-02-2012, 10:10 PM
Im currently in college working towards my medical degree. I havent taken out ONE single student loan... you know why???? when im not at school im at work. It can be done with a little effort. My Father and Mother did the same. They offered to pay it because they worked so hard, but how can i learn if i take their money.

Marvin S
05-02-2012, 11:00 PM
Im currently in college working towards my medical degree. I havent taken out ONE single student loan... you know why???? when im not at school im at work. It can be done with a little effort. My Father and Mother did the same. They offered to pay it because they worked so hard, but how can i learn if i take their money.

With that perspective you will merrily go through life being productive :cool:, not a bad attitude to have.

charly_t
05-02-2012, 11:19 PM
With that perspective you will merrily go through life being productive :cool:, not a bad attitude to have.

Ditto ! Too bad our schools don't turn out more students like this. Parents are a big part of it but so are schools.

Gerry Clinchy
05-02-2012, 11:34 PM
Interesting thoughts in this opinion piece:




K-12 public education is also partially to blame. During the late 1960s, a sense emerged that the performance of high schools had declined—judging from their critical thinking abilities and the English and math skills of college freshman, employers were probably right.

A few years of college became a proxy for employers that young applicants had what a decent high school diploma should guarantee but no longer did—the ability to do more than read and add sums, but also reason and string together four grammatically correct sentences into a coherent idea.

With half of the population headed to college, universities churned out too many graduates with little more than a general education—the ability to think critically, write a composition, and read poetry. Most college majors don’t prepare graduates for much.

In recent decades, states cut aid to higher education when tax revenues dipped during recessions but did not adequately restore those when times got better. Consequently, community colleges, where some of the best, cost-efficient technical training is offered, and some universities cut more-expensive programs in engineering, nursing and the like. Too many students are herded into liberal studies of some kind.

What students do in college really matters. A worker with a bachelor’s degree in petroleum engineering earns about $120,000, while a degree in counseling psychology fetches just $29,000. Even business degrees differ dramatically in value—finance, accounting, and supply chain majors are worth a lot more than general business and human resources management graduates.

Sadly, many incoming students often don’t want to take the tough majors—engineering programs are stuffed with foreign students—but that problem goes back to the high schools.

Growing up in the New York State public schools—back before the discovery of the computer chip—I studied Iroquois culture, early 20th Century child labor problems and Governor Al Smith’s reforms, but we also wrote essays about Thomas Edison and the Wright Brothers.

Now, students read Maya Angelou, get a steady portion of liberal theology about the exploitive history of white European culture, and are encouraged to find themselves, instead of learning something useful.

No surprise that many students come to universities only to enjoy intellectually pleasing but practically useless programs, and end up lost in poorly paying jobs and adrift in a sea of debt.

mudminnow
05-03-2012, 08:13 AM
Im currently in college working towards my medical degree. I havent taken out ONE single student loan... you know why???? when im not at school im at work. It can be done with a little effort. My Father and Mother did the same. They offered to pay it because they worked so hard, but how can i learn if i take their money.

Good for you, are you in med school yet? If you aren't and want to get through without debt go ahead and start looking into the military. I have no undergrad debt, but with the price of dental school starting at 30k then rising to 50k (this is in state public too) by my fourth year it is easy to see that unless you are military or have loaded parents you will be taking out money.Get student debt in something that pays well and pay if off quick so the gov't gets less money back than they thought

Cody Covey
05-03-2012, 11:51 AM
We just enrolled our oldest child in college. We chose the local state college. He can live at home ( no housing expenses ) and our total bill was less than $1500 for tuition and fees. I am sure he would be excited to "get out" and go to a major university but we are trying to show him that the education is not free and it's the same wherever you get it (in regards to the basics) but the cost sure is different.

Do the student loans consider WHERE you are spending money? For example... is English 101 worth x dollars per credit hour?

You got lucky :) Most Universities require that you live on campus at least the first year of school. My wife has a degree in biology and that is where most of her expenses come from was having to live in a dorm on campus and then the year after that at an expensive apartment near campus.

Financial Aid doesn't care where the money is spent. They say it has to be for school related things but there isn't much that you can't attribute to living expenses and on top of that I have never heard of anyone getting audited.

I was listening to Dave Ramsey the other day and this guy called in and his wife had 200k in student loan debt for a ministry degree from Columbia. THAT is the problem with idiots in our country. Why the hell would you need a ministry degree from an Ivy league. He said she now makes 35k at her job but again with 200k in debt to get there...dumb.

Corey Capozzi
05-03-2012, 02:13 PM
Good for you, are you in med school yet? If you aren't and want to get through without debt go ahead and start looking into the military. I have no undergrad debt, but with the price of dental school starting at 30k then rising to 50k (this is in state public too) by my fourth year it is easy to see that unless you are military or have loaded parents you will be taking out money.Get student debt in something that pays well and pay if off quick so the gov't gets less money back than they thought
I am actually considering the military. Im just worried they will tell me one thing and that not happening. I guess i need to speak with someone who has gone through the military. I have always had a real interest in the military.

Cody Covey
05-03-2012, 02:58 PM
Get EVERYTHING they promise in writing at MEPS. Know that with the economy in the dumps and people rushing to the military when they couldn't find a job they don't really NEED you. Going to be a doctor certainly does help though.

Also know that we are at war and you will potentially be in the thick of it.

Matt McKenzie
05-03-2012, 02:59 PM
I've got one heading off to college this fall. We spent our money on private school tuition for the last 12 years and he knows that there are no more tuition checks coming from Mom and Dad. He was dual enrolled in high school and the local community college for the last two years, so he's going in with much of his basic core work already done. Uncle Sam will be taking care of his college expenses and he will be serving as an officer in the U.S. Army (or Army Reserve or National Guard) for some period of time after he graduates.
An education, no student loan debt, a guaranteed job after graduation, leadership experience and an opportunity to serve his country. Looks like a pretty good deal from where I'm sitting.

mudminnow
05-04-2012, 08:24 AM
I am actually considering the military. Im just worried they will tell me one thing and that not happening. I guess i need to speak with someone who has gone through the military. I have always had a real interest in the military.

Its a good thing to be worried about. If i was to do dental school again, i would try going through the navy. They seemed to treat the students in my class better than the other services. And start applying right when you get your acceptance letter because those spots will fill up quick especially with obamascare making it tougher for physicians to earn a living.

IF YOU TAKE A MILITARY SCHOLARSHIP: be respectful of the money you are given. It is not free money, it is taxpayer money. You are receiving it because you VOLUNTEERED for the military. Going to school in a military town and seeing many taxpayers dollars wasted made me somewhat cynical if you cannot tell.

Corey Capozzi
05-04-2012, 03:34 PM
Its a good thing to be worried about. If i was to do dental school again, i would try going through the navy. They seemed to treat the students in my class better than the other services. And start applying right when you get your acceptance letter because those spots will fill up quick especially with obamascare making it tougher for physicians to earn a living.

IF YOU TAKE A MILITARY SCHOLARSHIP: be respectful of the money you are given. It is not free money, it is taxpayer money. You are receiving it because you VOLUNTEERED for the military. Going to school in a military town and seeing many taxpayers dollars wasted made me somewhat cynical if you cannot tell.I agree 100%.