Posted on 07/09/2023 9:20:37 AM PDT by Libloather
Jarrett, 38, isn't feeling too hot about President Joe Biden's new plan for student-loan forgiveness.
After graduating with an undergraduate degree during the 2008 financial crisis, Jarrett - who requested his last name be withheld for privacy but whose identity is known to Insider - was laid off from his job. He decided pursuing an MBA would make him more appealing to employers, so that's what he did, and he graduated with his advanced degree in 2012 with the help of student loans.
But Jarrett said the degree didn't pay off as intended. For years after graduating, he struggled to find steady employment and placed his initial student-loan balance of about $60,000 on forbearance. During that period when he was not making payments, interest was still growing, and it surged his balance to about $80,000.
Now, Jarrett's student-debt load is just over $101,000, according to documents reviewed by Insider - and he doesn't see himself ever paying it off.
"I'm never going to be able to pay it down," Jarrett told Insider. "The interest rates on them have put me in a trap where it is literally impossible to do. The interest is accumulating faster than I can put any money down on it, making it impossible to get out from under if you're not being compensated at a much higher level than I've had."
Jarrett now works in the energy industry and earns five figures. He said he felt "fortunate" to be able to live reasonably on his salary during the student-loan payment pause - but that could all change soon when payments resume in October without Biden's broad student-loan forgiveness. At the end of June, the Supreme Court struck down the president's plan to cancel up to $20,000 in student debt for federal borrowers...
(Excerpt) Read more at businessinsider.com ...
If legislation were passed that required a dollar for dollar recoup from whatever school a defaulter went to, the leftwing push to “forgive” these loans would disappear overnight.
You are correct, I made an order of magnitude error. He earns between 99,999 and 10,000 per year. Since 30,000 is near minimum wage, say 30,000-90,000. Probably roughly 50,000 or more. He can certainly pay it off, though it will be challenging. An MBA is, I agree, a worthless credential, though it was something of an ambition filter at one time. I worked with a guy who had three master’s degrees, and he was next to totally worthless in three disciplines. One of his masters was an MBA. I never knew an MBA who displayed any concrete, useful knowledge so imparted.
They certainly should not be "guaranteed" by We the Taxpayers.
Banks that wish, at their own private risk, to issue student loans should be allowed ... nay ... encouraged to consider the prospective student's program of study before extending the loan.
Five figures is $10,000-$99,999. Six figures would start at $100,000.
Welcome to Serfdom, Jarrett.
Ya should have availed yourself of some free wisdom rather than debt slavery.
“Earns five figures?”
Snark, snark.
Now, snarking aside, who would ever write something like that? A freelance “journalist” living in mom’s basement for whom a five figure income is still aspirational?
Or a highly credentialed member of the guild demonstrating the financial acumen and mathematical prowess learned in J-school?
What a pointless factoid. That ranges from minimum wage at 30 hours per week to just short of $100,000. The general rule I've heard is that you shouldn't borrow more for college than your first year salary. If he is on the high end of the five figure income he's not too far above that limit.
These are the same people who rake up debt and never pay it back. They get everything for free while others suffer the consequences of their actions through increased costs.
Is that what YOUR university and graduate school Professors did?
You are speaking from personal experience, right?
What degree(s) have you earned? In what subject(s)?
Just curious ...
Maybe an MBA. An MBA who doesn’t understand finance? Perhaps that’s why he isn’t paid commiserate with his education.
In my opinion a lifetime student debt isn’t appropriate. I think that student loans, like most other debts, should be dischargeable in a bankruptcy proceeding some suitable number of years after a student leaves school. 10 or 12 years, let the experts pick the best duration.
[Borrowing $101,000 for an MBA means Jarret was too stupid for college. ]
Not arguing on the stupid part, but he borrowed $60K over 4 years and then let it grow to $101K in the following 11 years. They don’t teach compounding interest in MBA programs?
The colleges got the money. They are like a flying school charging big money for pilot training and graduating people who still have not learned to fly an airplane.
It is really fraud on a grand scale.
If these large unpaid loans are a societal outrage, the colleges should pay off the loans. They received the money and provided nothing of value to the borrowers for it. Most of these colleges have huge endowment funds from which they could repay the loans.
The silver lining in this will be young people considering college will be reluctant to borrow money to attend.
I hope these Leftist hellholes go bankrupt. Society does not need to financially support communist indoctrination by kooks, racists and perverts who hate America.
I agree. I know I know, they took out the loans and they should pay them back but preying on 18 year old kids dreaming of a bright future who see these schools as their best shot at achieving their dream is pretty scummy. These kids are virtual slaves, all to support the lavish lifestyles of communists entrenched in the university system, who act as self-appointed ‘gatekeepers’ to a better life for these kids.
The schools should be on the hook for loans that don’t pay off, imo. The entire university system needs dismantled brick by brick.
> Why haven’t we heard of even one of these damn schools offering to refund at least half of the money back to their students. <
These schools are certainly part of the problem. Yes, the borrower must do his own due diligence, and he must bear the ultimate responsibility.
On the other hand, a university will shamelessly lie to a young, naive kid. “With a degree in 12th century French literature, you can do many amazing things!”
Well, maybe. But probably not.
Yup. BI is pounding its political drum again. Unless he got a Pell Grant, it was only going to be $10,000 anyway. That leaves $91,000 in the tank. But paying this off on a five-figure salary is far from impossible - I paid the house I'm living in off on a salary that was likely smaller than his, and I was paying rent at the same time due to work location constraints. It can be done.
So if this guy makes approximately $85,000 per year (I’m estimating a net pay of $5000 per month), he should be able to pay a $700 per month student loan payment plus an extra $100 to $150.00 per month on the principle. Unless he has an otherwise extravagant lifestyle. If he can’t do so, he needs to develop a strategy to reduce his other payments and expenses so it can be done.
If I wanted to replace my 350000 miles truck with a new one and set it up for my business it’d cost about what this guy owes.
Indeed. Inflation exists and must be accounted for.
A few years ago, I looked up the then current tuition at the institution where I earned my Bachelor of Science degree. Using an on-line "inflation calculator", I found that in constant dollars, they were charging about 75% more than they had when I was a student there. I'm not convinced the students were getting 75% more education than I did.
I can honestly say i learned very little at college, and nothing i couldn’t have learned from reaing a book. I was, however, subjected to communist professor rants about gay rights in the middle of class and a mandatory lit class forced us to read stories about incest and homo topics. The entire university system is rotten to the core. All so these communists can use the promise of a better life to extort exorbitant amounts of money out of gullible kids.
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