Student loans in America: Nope, just debt - The next big credit bubble?

Originally posted by VforVendettea
Why do they get these loans when the 'education' that it pays for is so dumbed down a monkey could get a degree. ?

The only way a monkey could get a degree is if his credit rating was 500+ .... or an endowment from the family fortune....

I say bail out the kids who got degrees in useful subjects like engineering or physics but hell with the morons who studied useless liberal arts crap like literature or history. Poets don't build bridges.

All the liberal arts kids did was party for 4 years.

Here's why I think its a sham just like Fanny and Freddie- government programs that created the housing bubble.

When you apply for 'financial aid' you obtain an EFC (estimated family contribution). Your aid award is based on your EFC. The closer your EFC is to zero, the poorer you are. If you're an independent who is unemployed ad dirt poor your EFC will be 0. This means that based on your income you should have to pay $0 for your tuition at the time.

So they give the most money to the poorest people. It makes sense in one sense and doesn't in another.

Originally posted by Moonsouljah

It makes sense in one sense and doesn't in another.

That is when you know the government is doing something that they should not have any business doing.

I felt really bad about not going to college until this year. Now I think I "dodged a bullet."

I work in a clothing store. One of the other girls works next to me and has a degree in English Lit. The only difference between us and between our future job prospects seems to be she has a ton of debt and I don't.

I'm educating myself here:

www.khanacademy.org...

and here:

ocw.mit.edu...

and here:

www.abovetopsecret.com...

May not be perfect but the price of all three is right (free).

There are petitions and congressional members discussing student loan forgiveness through bankruptcy. With the amount of debt being racked up and the sheer numbers of people getting into this kind of debt, it won't take long for serious political attention. It is probably the biggest ace up Obama's sleeve should he get (or stay) in trouble.

And yes it would be another bailout. But if the Fed can just print trillions to prop up banks and take up toxic loans, and if the government can bail out Wall Street giants, why shouldn't everyone else be given a second chance?

Originally posted by Make Speed Limit 45
I say bail out the kids who got degrees in useful subjects like engineering or physics but hell with the morons who studied useless liberal arts crap like literature or history. Poets don't build bridges.

All the liberal arts kids did was party for 4 years.

Right, because what the world needs is more people without critical thinking skills. The 'liberal arts' that people like to slam so much typically include much more reading and writing than the straight out 'hard' sciences. While nothing in the American system guarantees critical thinking skills, the liberal arts are more likely to contain it.

Your whole education system needs revamped, from how it's financed down to how it's taught, and how it's evaluated. Right now, America is below pretty much everyone else in the First World in terms of quality of education. And you pay more for your crappy education than anyone else does.

While I am not too familiar with the cost of a university education in the States (although I know its a heck of a lot more expensive than here in Canada), I have way too many friends who are in over their heads when it comes to their student loans.

I was really lucky because my mother "garnished" my wages all through high school, and she paid for my housing costs while I there. I was fortunate enough to get my degree with no debt - not that having that degree has done me a world of good since then. She worked at CIBC in her twenties and saw so many kids with debt out their ears, so she'd been formulating a plan to get me through university my whole life. I had the concept of "fiscal responsibility" drilled into me over and over, and she definitely left me hanging on few occasions where I overspent my budget and didn't have enough for food. "Figure it out" was the usual catch phrase when I made those mistakes, and I did - university was excellent for developing my foraging skills.

But what I've thought since reaching adulthood, and having to deal with all of the financial issues that can come into play, was why didn't they teach us this!? We had classes in high school for fashion, cosmetology, auto, and building! Why didn't they have a mandatory class for teaching us how to manage our funds! I'm not saying that financial mismanagement is to blame for what is happening in the States, because the cost of education there is bonkers, but if students were taught what it meant to take on those student loans, what those interest rates meant, what the likelihood of paying them off within a reasonable time frame would be...

I don't know, but I have friends who currently owe upward of 80,000 and they only JUST graduated. One of them is considering a career as a teacher. She talks about having a big wedding, buying a new car and getting a home in a good neighbourhood, and I just want to shake her! I have no debt, have no desire to have a big wedding, or getting a new car and I am concerned about my finances. She's not even done school, and lord knows how much she'll owe then.

College Students' Borrowing Hits An All-Time High

November 03, 2011

www.npr.org.../141951756

Last week, we learned that college tuition costs went up around 5 percent. This week, the Project on Student Debt reports that student debt went up by about the same amount.

Average Debt Tops $25,000

Lauren Asher tracks loan amounts for the student debt project, a California nonprofit. She says that in 2010, the debt of the average student was $25,250.

The figures are gathered from more than 1,000 colleges and do not include for-profit schools, where enrollment has been climbing, and where loan levels tend to be much higher.

Now, you might expect the most expensive schools to have the highest levels of debt. Asher says that's not necessarily the case.

"Even colleges with the same sticker prices and similar student bodies can have very different shares of students with debt," she says, "and very different average debt for those who borrow."

So, a low-cost, public school like Alabama A&M produces graduates with an average debt of more than $31,000. The school says that it's simply a result of shrinking state support for the historically black college.
Meanwhile, the sticker price for Williams College, in Massachusetts, is around $55,000 a year. But students there only borrow around $8,000 on average. Spokesman Jim Kolesar says that's a result of a $1.7 billion endowment. It's also part of the school's commitment to admit everyone who qualifies, regardless of need.
Kolesar says "the vast majority of the way the debt need is met is through grants." Only families making around $75,000 a year or more are expected to take out loans.

...a low-cost, public school like Alabama A&M produces graduates with an average debt of more than $31,000...

... the sticker price for Williams College, in Massachusetts, is around $55,000 a year. But students there only borrow around $8,000 on average...

Imagine that.... the poorer communities have to borrow more, and at a more predatory rate, than those who don't need to....

...[at Williams College, in Massachusetts] ....that's a result of a $1.7 billion endowment. It's also part of the school's commitment to admit everyone who qualifies... regardless of need

How does this work? And how do we avoid calling it what it translates to our society?

It's easy enough for these institutions of "higher learning" to help.

There is no damn reason for some school to charge a kid $40,000 to sit in an auditorium with 100 other kids for 8 months out of the year.

Have any of them come out and taken the initiative to cut costs?

Well, I shouldnt say no reason. It keeps poor people out and oligarchs rich.

Ron Paul predicted the housing crisis, bubble and pop.

Ron Paul predicted the college loan racket, bubble and when the pop comes, he'll be 100% spot on as well.


America needs a doctor, give her one.

Originally posted by Skewed
Although it is through heavy disappointment from my direct family members, I have not allowed my child to get student loans. I go through this argument on a weekly basis. I am told I am hurting my child by not allowing her to go to school, which is not the case. I am told to just bite the bullet and get her the loans, but I refuse every time. I am not going to allow my child to go take out 30k+ loans, on the hope that she will find something. I am not going to put her in the position to be owing money before she ever even has a chance to get her own life going. I have a few benefits that I can let her use, but we are paying as we go. Sure, it may take a little longer but at least she/I will not owe anything. There is no way I am going to let her rack up this much debt this early in life.

You are a great parent!!!! Your child will thank you while her peers are debt ridden, jobless and broke like the rest of the kids.