(BTW, I''m fine with forgiving college loans for time spent in the US military in Iraq and Afghanistan. 1 year for 1 year.)
The real threat is the overpaid professors and administrators.
How much of that ‘student loan’ stuff is from trucking schools, beauty schools etc. The kind that give cash rewards for ‘finders’ and tells kids they don’t have to show up for classes - ‘here’s your cash’... Lots of education scams out there.
Another handout for Obama’s FSA.
Here’s an alternate concept: don’t take out a loan for studying something that will NOT lead to a good-paying job.
MoreOn is also agitating for this. It’s like mortgages: the deadbeats get relief, and those of us who were responsible and paying off our loans get stuck with the bill. . .
To put this into simple language. Stan finishes four years at a out-of-state college. He owes $96k on his loan. The best he can do after graduation is a $34k job, which he accepts and in five years....he’s pulling in $40k.
Stan is limited on expenses because of what he pays each month. He can’t afford more than a week of vacation at some 2-star hotel near Myrtle Beach, SC. He has a gal that he’d like to marry (at age 28) but between the two of them...they both $138k on college loans.
They marry in a quiet and small ceremony...taking a honeymoon to a nice two-star hotel for a week. No purchasing of a house in their plans for the next ten years, because they owe so much. Their preference for cars? $15k Honda cars.
Somewhere around age 35, they agree that they can have kids now because their student loans are down to $60k. They would still be living in an apartment but Stan’s parents have passed on and left him their ‘old’ house.
Around age 44, Stan and his wife have finally paid off their student loans. They have virtually nothing in a 401k, and the house really needs renovation...so they pour their money into that. Around age 49, they finally can afford to start a 401k .
By age 65, Stan and his wife have around $100k in their 401k. It’s not much, for two people who have degrees, but they owed so much on the student loans. They retire on social security and $400 a month from the 401k they have. Life is fairly miserable but they have a good education to appreciate.
By 2030, a quarter of the nation would fall into Stan’s category. I don’t see much for the housing market, the investment market, electronic sales, tourism, or the banking sector. Other than the educational sector and the loan sector....everything else in America is stalled.
Is there anything wrong with this picture?
All of the early experience students I’ve had and the last student teacher I had do not have jobs. They finance all of their education at our local private university. When did people quit working their way through college?
The infusion of federal government money destroyed the health care system, the two-parent black family, the housing industry, and the trade schools, to name just a few.
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.
lenders would be more careful if they knew their loans could be discharged in bankruptcy.
This is a set up for a massive bail out of student loans in return for their votes to Obama.
I say we assess all University professors a special tax to pay off those loans, since that's where the money went.
I see the obamedia is falling right in line behind their butt buddy.
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 ....
(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.
“...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.
This would be fine for loans issued AFTER the legislation becomes law, and is something I've also been advocating. Student loan issuers would simply stop issuing loans to students who are not likely to earn enough from their degree to pay off their loans. These students would be disproportionately minority, so look for the screaming to start.
I would also want the schools to issue at least part of the loan, so that if the student fails to pay off the loan, the school has to eat it.