(BTW, I''m fine with forgiving college loans for time spent in the US military in Iraq and Afghanistan. 1 year for 1 year.)
Posted on 04/21/2012 7:00:52 AM PDT by SeekAndFind
Move over, mortgages. Get out of the way, Greece. Another economic doomsday scenario is emerging.
Student loan debt has reached about $870 billion, exceeding credit cards and auto loans, and balances are expected to continue climbing, the Federal Reserve Bank of New York said last month. In February, the National Association of Consumer Bankruptcy Attorneys referred to a "student loan 'debt bomb'" and wondered if it was shaping up to become "America's next mortgage-style economic crisis." Such a burden could crimp an already weak economy.
"Student debt poses a large and growing threat to the stability of our economy," Illinois Attorney General Lisa Madigan testified March 20 before a U.S. Senate judiciary subcommittee hearing in Washington on the looming student debt crisis.
"Just as the housing crisis has trapped millions of borrowers in mortgages that are underwater, student debt could very well prevent millions of Americans from fully participating in the economy or ever achieving financial security," Madigan said.
In January, Madigan's office sued for-profit Westwood College, claiming it misleads students enrolled in its criminal justice program, puts them deep in debt and awards a nearly worthless degree. She told the Senate last month that since filing the suit, 1,000 former and current Westwood students have come forward to complain about their experiences.
A spokesman for Westwood said Thursday that a motion to dismiss the case is pending.
The hearing was convened by Sen. Dick Durbin, D-Ill., who is pushing legislation, the Fairness for Struggling Students Act, which would allow students who borrowed from private lenders for their education to wipe out that debt in bankruptcy proceedings, just as credit card borrowers and many other unsecured debtors may do.
(Excerpt) Read more at articles.chicagotribune.com ...
I see the obamedia is falling right in line behind their butt buddy.
Unfortunately it’s virtually impossible for a student to work through school anymore because of the cost of tuition combined with cost of living. When I was in school ( graduated 2010) I was making $13/ hour working 32-40 hours per week as a security guard. Not a lot, but better than a lot of other people I know. But with rent, car payment, insurance, utilities, gas, groceries, etc, all very reasonable expenses for a person living on their own, it was impossible to pony up an extra $2,500 for tuition every three months during the school year. “Financial aid” (loans/grants) were the only option.
The story of my life....I’ve paid my home loan and car loans and education loans faithfully every month because I signed on the line that said I will pay ‘X’ back if some lender would ‘front’ me the cash for my (at that time) immediate need that I didn’t have the cash for. Now that I’m within 3 or 4 years of having all my debt paid off, I’m expected to pay for the ‘forgiveness’ of other people’s irresponsible behaviors.
Is this a great country or what?
Guess I’m a suckar for playin’ by the rules of responsibility that I learned growing up in the ‘60s and ‘70s.
Feeling fortunate: 4 kids...no college debt. They all attended local Junior College first and lived at home. All lived on a shoestring for sure. One only attended long enough to be certified with a practical skill, but no degree. Two now has a PhD. Three is now a stay-at-home Mom with a four year degree. Four, has a four year degree, and has never used it... instead by following a passion.
My husband was determined that we would give our kids a debt free 4 year degree (in state) as his parents and mine had done for their children. It wasn’t easy for them nor was it for us. There was a real learning curve on the value of dollar and how to best stretch it. Side jobs helped provide ....
Not quite. Most schools provide financial aid. And the less you and your family have, the more aid you get. Especially at the Ivies. My son has accepted admission to Harvard for the fall term. I make a decent income. But my projected costs to send him to Harvard for four years are nlnness than one year's tuition, room and board there.
With no loans.
As well, Occidental and Columbia may cost $50+K TODAY, but not 20+ years ago.
The Kenyan anti-Christ DID graduate with student loan debt, as he has said. But no “normal” person who went to Occidental and Columbia in the 1980s and Harvard Law it the 1990s would have incurred anything close to $350,000 in student loans.
sitetest
nlnness = less
“This is a set up for a massive bail out of student loans in return for their votes to Obama.”
There you have it! Anyone care to guess who will end up paying for it?
The sad truth is that many of the young people who take these loans are impressionable and poorly educated on how interest works. They certainly weren't taught about it in high school. These loans are marketed as "instant money now, worry about it later" and shoved in their faces from the moment they set foot on campus. It's funny that we tell our 18-year olds that they're too irresponsible to drink a beer but we'll allow them rack up debt equivalent to a home mortgage in four years.
Pay your debt, you slacker bums.
They would if they had jobs. Leaving college $100k in debt with a job at Starbucks or some temp agency waiting for them isn't going to provide salary to let them pay off these loans if they tried. How's the saying go? You can't draw blood from a rock. Little wonder so many college grads are moving back in with mom and dad. This balloon is going to burst and it ain't gonna be pretty.
Well said @12
The infusion of government money makes more people dependent on government. The inflation of education costs rewarded the foot soldiers of progressivism with inflated salaries and increased the number of Americans that would be programmed.
One of the things that is often missed is that student loans were CREATED simply to allow idiot courses like the ones I listed to exist.
Before there were student loans, when going to college for most families meant really skrimping and saving to get a kid through college, mom and dad had a real interest in what junior was going to take. If dad was having to go without a new bass boat so that junior could take,”Queer Musicology’, all hell would break loose.
Since it is now junior going to school on “his” loan (should be “our” loan)nobody cares what he takes. When somebody actually has the balls to start talking about cutting student loans, it is always the liberal arts wing of education that screams the loudest. There is a reason why.
(BTW, I''m fine with forgiving college loans for time spent in the US military in Iraq and Afghanistan. 1 year for 1 year.)
I attended an undergraduate program at The University of Wisconsin, paid for to a large extent by my parents. I worked part time during my Junior and Senior years in retail, just for spending money.
5 years later I attended graduate school and took out $7,500 in GSLs. I completed a master's degree in business in 3 semesters. When what would have been the 4th semester rolled around I was contacted by the bank which wanted me to come and pick up my disbursement for another increment of GSL debt. I had to argue with them for an extended time to get them to understand that I was not enrolled, that I was done, graduated. I think in those days (mid 1980’s) the programs were so loosely administered they would have disbursed the check anyway.
I attended law school as a part time student in the late 1980’s to mid 1990’s. I worked full time and attended classes part-time, during my lunch hour and in the evenings. It was a long slog, but I emerged from law school with a JD and no debt (my employers had generous tuition reimbursement programs which covered books and tuition, and even provided “academic leave time” which accrued during the semester and gave me a nice break to study before final exams.)
I paid off my GSL in the mid 1990’s.
I have taken bar exams for admission in several states, most recently in FL in 2010. I was in a crowd of about 3,200 test takers, waiting to be admitted to the examination facility. While in line waiting to get in, it was nearly impossible not to notice that a) at 53, I was 2x the median age of the crowd, and b) everyone in line, mostly fresh law graduates, were talking about their accumulated student loan debts. I was hearing lots of numbers just south of $100k, then a few in the $110K-$130K range. It was as if they were playing “”Can you top this?” with their loan balances.
Simply amazing, an amount of debt the equivalent of a mortgage on a modest home, except there is no home, no tangible thing that was purchased.
Now, the point of all these “Looming student loan debt bomb approaches!” stories is to soften up the public’s thinking on this subject and to allow the Obama administration to introduce the idea of bankruptcy code reforms which would allow student loans to be discharged. This is merely taking the irresponsibility of some of these students and foisting it on the taxpayers, who guarantee these loans. So, farmers in Kansas and factory workers in Vermont, and all sorts of folks who don't get the benefit of Junior’s M.F.A. from Yale, get to pay for it.
Student loans, at present, are not dischargeable under the Bankruptcy Code. In the rarest of situations, so rare that you could say it is practically impossible, one could theoretically qualify for a hardship discharge. But we are talking about perhaps 1 in every 10,000. So, student loan debt is forever. If you default, ultimately the Department of Education will sue and get a judgment which can then be used to garnish pay, lien on real property, and levy against personal property. So, the transition from being a “performing” loan to a “non-performing” loan is merely a change in nomenclature. It merely means that the DOE will go to court, get a judgment (which will include filing fees and attorney's fees) and then a different process will begin to collect that. So it does not go away, and nothing blows up, nothing goes off a cliff.
These conspicuous and increasingly frequent warnings about “ticking time bombs” are background plants from the Obama Administration. They are going to attempt to curry favor with young, heavily education-indebted voters by moving the costs of their, perhaps unwise over-investment in education, onto the backs of a broader population.
> Now the destruction of the college level education system itself is well underway and the root cause is once again government attempts at social engineering. The infusion of government money into the college loan industry is just another effort to pick winners and losers.
> Every aspect of our society and culture the federal government touches becomes poisoned and is eventually destroyed.
>Well said ...
A little secret is that graduates of the "elite" colleges that have huge endowments don't graduate with huge piles of debt. In essence if mom and dad are successful and/or prudent they pay a "tax" in that they pay full price for tuition. Otherwise, the tuition is heavily subsidized and discounted. That BA & MFA from Yale shouldn't have a lot of debt when he or she goes to work. The big culprits here are the for-profit schools and the second and third tier of private colleges. I'd say "caveat emptor" with full disclosure (in large print) with earnings prospects of technical and non-technical major graduates and put a ceiling on the amount of the loans. Noting that the median household income in the US is $44,389, tuition is waaaaaaaay out of line. My kid's college had an official "College Arborist". Pretty campus, but -- wow!
Great job Mom - hats off to you.
Liberals push up the cost of education by mandating liberal social studies courses for all students as a graduation requirement. People don’t pay for race and sex hate classes without a graduation mandate. Perry is trying to get rid of this system of self serving liberalism at State Universities.
“...allow students who borrowed from private lenders for their education to wipe out that debt in bankruptcy proceedings...”
In other words, the parents must co-sign. At first, I was furious. But after further thought, yes, let the parents go down with em. Now the parents will be paying off the stupents debt WHILE they are living at home. This will also cut the steady flow of cash to the teachers/profs/universities.
You said it.
Here’s an alternate concept: don’t take out a loan for studying something that will NOT lead to a good-paying job.
A couple of my kids are cs & engineering majors, and in order to earn a BS in these subjects, they are required to take social & behavioral science and "diversity" courses (on top of the more typical art & humanities requirements)- none of which have any relevance to their core programs.
The frivolous requirements are embedded in the degree program structure at this point, thanks to the influx of gov't $$ that enabled the establishment of these useless, impractical courses (courses which most students seeking technical degrees and endeavoring to keep their education costs down would otherwise eschew). Students are between a rock and a hard place.
I'd add, "OR will get you admitted to a graduate professional school -- that will lead to a good paying job." Major is probably a lot less important than grades and test scores when applying to law, medical and business schools.
Yes, there are lots of education scams out there, such as “education” degrees, psychology degrees, queer studies degrees, black studies degrees, sociology degrees, hispanic studies degrees, etc.
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