Posted on 09/30/2007 3:10:04 PM PDT by seacapn
The near doubling in the cost of a college degree the past decade has produced an explosion in high-priced student loans that could haunt the U.S. economy for years.
While scholarship, grant money and government-backed student loans -- whose interest rates are capped -- have taken up some of the slack, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.
Many in the next generation of workers will be so debt-burdened they will have to delay home purchases, limit vacations, even eat out less to pay loans off on time.
Kristin Cole, 30, who graduated from Michigan State University's law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices.
"I could never buy a house. I can't travel; I can't do anything," she said. "I feel like a prisoner."
(Excerpt) Read more at businessweek.com ...
A law school graduate? Sue someone.
We need to have a windfall tax on “Big Education”!
Just forgive their loans. Put it on our National Credit Card.
Get back to me when the Democrats start pushing for fiscal responsibility from colleges and Universities..
As long as the taxpayers are willing to pony up more cash, the fraud, waste and abuse of College-Based Welfare for PHD’s is going to continue...
That might happen anyway. A lot of these loans are, by law, 95% federally-backed. So, if the economy goes through a rough patch, and we have a large number of loan defaults, the government is the agency that has volunteered to step in and pay the difference. But I think the other issue is that a lot of these indebted kids have politically-active parents who are going to agitate for some kind of ‘change.’
Combine this with the insight that the public has gained, from the Duke Gang of 88 and Ward Churchill.
American students and families are going into massive debt, all to support idiotic leftist pseudo-intellectual departments that are dedicated to installing feelings of worthlessness and self-hatred in the non-minority students.
What a deal!!
Is a bartender allowed to serve a drunk? What would the Austrian School say?
Should anyone be allowed to perform any surgery? What would the Austrian School say?
Should we have laws against that particular kind fraud where the promise of wealth in an uncertain future is sold to the young and payment is a hard contract that can never be extinguished in bankruptcy, for I thought that contract was called slavery -- at least indentured servitude had a fixed duration, these loan contracts do not, but what do I know? What does the Austrian School say?
Cole said she may need to get a job at a law firm, "doing something that I'm not real dedicated to, just for the sake of being able to live."
Welcome to the real world, Ms. Cole. Nobody forced you to sign those loan papers. If you had paid attention in math class or bothered to download a free loan amortization program, you could have calculated all this before you signed on the dotted line. Perhaps you should have considered working for a few years and paying off your undergraduate debt before you matriculated in law school. In any event, you received the benefits of a free society to make your own choices and live with the consequences.
Do you really think an entire generation of indebted young folks (and their parents) are going to shut up and ‘live with the consequences?’
"This is literally a new form of indenture ... something that every American parent should be scared of," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.
The real villains aren't the bankers offering the loans but the college administrations that have not cut out the Ward Churchill types and the other garbage that drives up costs. That said, students must be intelligent consumers and choose educational strategies that provide the most "bang for the buck." Many students I know make great use of community college for general education and standard foundational classes before a final two years at a more traditional university. One can also take a lighter course load, work part time, and come out in six years with a much lower debt load than trying to do it in four years with a much larger debt load. Planning for one's education is a good opportunity to set the groundwork for a fiscally responsible adult life.
Part of the scam is not allowing credit for some of those courses and forcing the student to take them over at the four year U's.
Do you really think an entire generation of indebted young folks (and their parents) are going to shut up and ‘live with the consequences?’
No, they will whine like overindulged adolescents. It is easy to desire freedom to make choices, but much harder to live with the consequences. But what choice is there for our society? Given our current federal, state, and local government debt load, do you honestly favor a bail out? Sadly, these folks will also live with the consequences of previous generations failure to reign in entitlements.
Just one more factor in the coming hyper-inflation.
student loans are not dischargable in bankruptcy.
Hard to burst when you have now way to escape.
Part of the scam is not allowing credit for some of those courses and forcing the student to take them over at the four year U's.
That is certainly true. However, many schools have agreements with our community colleges. There is no substitute for a student doing careful investigation before matriculating.
Wow, you mean there is a generation(s) that is indebted to the government for some entitlement beside the Boomers? /s
Four year college degrees are quickly becoming a joke. One is better off with a 2 year degree, or military service, or a labor union that teaches a trade. Or a combination of those three. Otherwise, if you get the 4 year degree you will soon find it is useless without the additional 2 years for a master’s degree. And then you may find yourself “over educated” for many positions.
I am telling my nieces, nephews and all their friends — ROTC kids. They all have the grades for ROTC scholarships. 4 years of school paid for by the military, no debt, a pretty decent paying job waiting for you when you graduate (as an officer), excellent job experience while you serve your country, and then you can pursue your civilian life when you have served your commitment.
No brainer.
My nephew and a few of his friends are applying for ROTC scholarships. Honestly, who the heck can afford these schools anymore? $30-40K/year? Are they kidding us right now?
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