Posted on 10/14/2009 10:52:52 AM PDT by SeekAndFind
If the U.S. can come to the assistance of banks and homeowners, surely it could offer a helping hand in the form of lower interest rates for students.
Like many recent college grads, Los Angeles resident Steven Lee finds himself unemployed in one of the roughest job markets in decades and saddled with a big pile of debt. He owes about $84,000 in student loans for undergrad and grad-school costs.
But what Lee's angry about isn't the slings and arrows of an outrageous economy, and it isn't the idea that he owes a ton of money for all the schooling he's received.
It's the interest rates on his government-backed student loans, which range from 6.8% to a whopping 8.5%.
"That's just ridiculous," Lee, 35, told me. "The rate for a 30-year mortgage is around 5%. Why should anyone have to pay 8.5%?"
Well, because a deal's a deal, and that's the rate Lee accepted when he received his loan.
"I disagree," he replied. "The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?"
Good question -- and one that's especially germane as tuition continues to soar at both public and private universities. The University of California is looking to raise its fees 32% next year to more than $10,000 a year.
"If I was a student, I'd be outraged too," said Tony Hollin, chief executive of Edamerica, the seventh-largest provider of student loans nationwide, with about $1.6 billion in loans originated last year. "This is an issue that more people need to be aware of."
Edamerica lent $30,000 to Lee so he could get a master's degree in clinical psychology from the Santa Barbara campus of Antioch University. This followed Lee's earning a bachelor's degree in sociology and psychology from UC Berkeley.
(Excerpt) Read more at latimes.com ...
I knew this was coming.
For those who don’t know, there is a Student Aid and Fiscal Responsibility Act (HR 3221) that passed the House last month pretty much along party lines. It’s now working its way through the Senate.
The bill would eliminate the Federal Family Education Loan Program, thus making student loans much riskier (and hence unattractive) for banks. The Education Department would continue offering direct loans and would presumably dominate the market.
Democrats say the legislation would free up more funds for Pell Grants and other financial aid. Republicans say the federal government would be playing too large a role in higher education.
One of my buddies owes me $$$ for the 41-0 beatdown of Jacksonville by Seattle, maybe he should apply for a bailout from Obeyme too.
How about all the liberals in the United States put there money together and pay my bills?
LOL!!
If any group is going to get bailed out of their college loans, it’s law-school graduates. And then once they’re satisfied, we’ll start subsidizing med school so we can replace all the doctors that retire when Obamacare goes through.
Here is the reasoning of a lot of college students like the aforementined Steven Lee :
“I’m not saying I don’t want to pay,” he said. “I’m just saying I should pay a rate that’s fair. If 30-year mortgage rates are near 5%, student loans should be close to that.”
This kid Lee owes nearly $14,000 more to Edamerica at a rate of 7.25%, plus $21,000 to All Student Loans at 6.8%. Then there’s $12,000 owed to JPMorgan Chase & Co. at a more reasonable 5.2% rate.
In all, Lee is on the hook for about $1,000 a month in student-loan costs. If he doesn’t find a job soon, I wonder how he’ll pay it off.
And assuming he gets a job that initially pays $35,000 a year, he’s be spending $12,000 of that ( 1/3 of his pay ) servicing his loans.
yep, fully expected. Now that they directly control the whole student loan program I expect the Dems to start floating Student Loan Forgiveness schemes around the time of every election.
Heard a case with a local company where a bunch of their tech employees who all carried five-figure student debt exploded when they learned that one of their colleagues who was there on an H1B visa got his Doctorate basically for free in his home country.
...my wife got her PhD and we are debt free....sorry I cannot say the same thing about other professors in her department....some are still paying on student loans and I’m talking about people now in their 40s.....I know of one case where the guy was 53 before he got free of grad school debt!
How about a “bailout” for taxpayers and other productive Americans? Let’s stop spending tax dollars when the spending is foolishly wasteful - that will cut a third of our spending.
“The rate for a 30-year mortgage is around 5%. Why should anyone have to pay 8.5%?”
I dunno...because you signed the paper?
Maybe one you your courses should have been economics.....
Yes by all means. Send your student loan bills to The LA Times, Attn: Accounts Payable, Los Angeles, CA
LOL...
——Woman had more than 50 fake student loans-——
http://www.freerepublic.com/focus/f-news/2339926/posts
another gubmint reparations program?
just a matter of time before, they make the taxpayers have to pay for “free” college education for all citizens...
and then ... next up, free for non citizens, next up: mandatory college education.
Maybe because a house has value if you default, and your Masters of Sociology is worthless so the lender's risk is higher?
If a claw back clause applies to payments to bankers based on performance, there should be a similar one for academicians and universities too. The universities should be required to absorb the loans by rescinding their outrageous school fees if their graduates cannot earn their potential rate...after all, they preach “to each according to their need” ;-)
How about an investigation by congress about why colleges costs have risen far faster than inflation over the last decade?
College administrators, almost all ultra-libs, have some ‘splaining to do about where all the money is going.
He overlooks that, with a mortgage, the house is collateral.
Someone please tell Lazarus to crawl back behind that stone he came from, he doesn’t have a prayer ; )
If a student takes the bailout, they should lose credit for all classwork, even their degree(s).
Employers should be able to use FOIA to determine if a potential employee received a student bailout, and if so, not hire them.
Although I disagree with any personal bailouts, my gut feeling is that a bailout of student loans is the least disagreeable. At least the money is going toward somebody who is productive and understands the value of a good education.
I have no idea how this would work, but some bailout money could be used to somehow reduce the interest rate these kids are paying. Just a thought....
.....Bob
Someone send the dumbarse Steven Lee a memo that all he needs to do is move to Washington DC and land an easy job with the government where his student loans will eventually be dismissed/forgiven via doing public service. Problem solved.....
As a student with student loan debts, I say hell no! If the government let me keep the second half of my paycheck and stopped sabotaging the economy, I would be able to pay off my debt in no time
There’s also the slight difference that the mortgage is secured by actual property, while his student loan is an unsecured loan.
But, as you say, he must have avoided any econ classes.
Me too, I'm a former student too. Hey, President and Congress, give me more money too!
I knew this was coming.
Oh great! Now they talk about this just when I’m about to pay off my loan next month.
The kid never worked while he was an undergrad, instead he traveled the world on student loans and is now hoping for a government bail-out, before he gets married and moves out of the country.
At least the money is going toward somebody who is productive and understands the value of a good education.
I won't argue that the purpose of college is to get a job; rather it is to hopefully foster an understanding of why we are here (i.e. Western Civ) and an interest in continuing learning - it should provide a framework that accurately reflects reality, a framework that can be fleshed out over time.
I don't see a huge demand for sociologists and psychologists, and anyone with sense would look at starting salaries of those entering the field and say, 'whoa! I'm going in debt how much to earn how much?!'
Therefore, I don't think the person in this story necessarily received a good education, nor do I think they are productive.
Subsidizing their loans is rewarding more of these drones, while paying for the continued undermining of the American experiment - bad all the way around, as far as I am concerned.
YMMV
Now our tax dollars are going to be used to bail out college students who just don’t feel like paying their own bills?
*There’s also the slight difference that the mortgage is secured by actual property, while his student loan is an unsecured loan.
But, as you say, he must have avoided any econ classes*
Maybe he could offer up his frontal lobe as collateral.
I can not strongly defend my post, because deep in my heart, I do not believe in ANY bailouts.
The only defense I have is that an education loan bailout (or lowering the rate) is more desirable that bailing out some dumbass who can not read a mortgage contract, or some other dumbasses who trade in perfectly good cars cause the Gov’t will give them $4,500 of my money.
The madness has got to stop.
....Bob
Well, according to Shylock, there's always that 'pound of flesh'. A kidney, perhaps?
Maybe the reason for the difference in rate is that the home loan is backed with an asset equal to the value of the loan and the student loan is backed with the value of a whiner who wants a hand out. The rate should be 50%.
I want mine! With interest that would be about $ 340,000.
"Show me just what Mohammed brought that was new, and there you will find only things evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelogus
"Show me just what Mohammed brought that was new, and there you will find only things evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelogus
Nope! Many of us never got to go to college and do not want to be on the hook for your education.
We make our choices that determine our paths. Too bad things go the way they do, but every decision is a risk. One of the biggest problems of our society today is that so many people want to be made comfortable at someone else’s expense, regardless of the fact they dug themselves into the hole they’re in.
I suggest this fellow put himself into a low paying job while he waits for the job opportunities he’s educated for and starts paying off the loans. Living frugally is well advised too. So its’ hard. Get over it.
1.) You should be allowed to “refinance” your loans if rates are lower and you have a good credit score. Currently, once you consolidate your loans are stuck at that interest rate till they are paid off.
2.) The loans should be treated as any other unsecured debt, currently you cannot have those loans discharged in bankruptcy, if someone is “truly” bankrupt, they should be able to treat this like any other debt.
Currently as it stands these loans are cash cows for the banks that have underwritten these loans. Not that this should be taken over by the government. We need the two changes to bring back market responsibility to the program and give debtors an even break.
We also need to get Government out of these programs because the universities and banks have abused this system.
Prior to the student loan & Pell grant programs tuition was affordable with some work by the student, assistance from parents and alumni. We did not have students burdened with mortgage type debt prior to the 60’s when the government was not involved. (outside of the GI Bill) Thru prudence, scholarship and alumni assistance students left with little or no debt when they graduated.
With Government getting involved it became a cash cow for banks & colleges, for students it became a burden for early years of adulthood and fast moved to a lifetime of debt servitude.
Somehow this guy was convinced he would profit from his investment in an education. (risk) It seems a lot of people are in this same situation, whether they invested is stock, or a house, or a business venture...it’s all the same. If upon going into a program of higher education the rules change after one made the agreement, then I would chime in on the “no fair” wagon.
IMHO, we are never going to get the government less involved in any of our affairs. The GOP had a majority in the Congress for 14 years and did nothing to improve this,(oh, they let the AWB expire) so this country has cried for change, ANY change, and Obama is what they got, along with an extreme congress that can barely be checked against the inmates running the asylum. If the GOP want to keep the majority they will probably win at the mid-term, they might consider doing something besides gloating about putting the liberal, socialist agenda on “hold”. All efforts by the U.S. Gov’t to increase size and power over life’s details incrementally have met with eventual success with no signs of being reversed.
So....we need to see the writing on the wall and act to protect ourselves (adapt) accordingly. Needing to reverse gov’t involvement will not get it done.
Rules like bankruptcy for debtors with student loans was changed in 1998. So even if your loans were from the 80’s, and you were out of school, you could no longer have them discharged after 1998. So they re-wrote the contracts after the fact...Not that bankruptcy is a good thing, but this one case the bank lobby created an “unfair” advantage.
I agree that the GOP blew their opportunity to lead, especially after 2000, when the controlled it all.
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