Posted on 06/28/2013 8:20:21 AM PDT by SeekAndFind
With Congress and the Obama administration focused on Monday’s deadline to prevent student loan interest rates from doubling, it is an apt time to examine the larger consequences of America’s staggering student loan debt load. Even as mortgage, credit card and other consumer debt levels have decreased, today’s students carry unprecedented — and growing — debt burdens. With outstanding student loan debt in the first quarter of 2013 totaling a record $986 billion, the impact on individuals is disturbing. But add to that the fact that this debt load threatens the nation’s very ability to compete in the global economy, and you have the makings of a national crisis.
It is easy for those of us who are well beyond our college years to dismiss student loan debt as merely a rite of passage that we, too, endured. But today’s students are in a much more difficult financial position than any previous generation. Families are facing stagnant pay; public funding for student support has declined; and the real costs associated with higher education continue to rise. Combined with a still challenging post-graduation job market, the situation is truly a perfect storm, and one we cannot continue to ignore.
Sadly, many students are making uninformed decisions with lasting impact. While loans are an important ingredient in a student’s overall investment in higher education, it is of great concern that two out of five student loan borrowers fall behind on payments within the first five years of entering the repayment phase.
While there are no quick fixes for the student debt crisis, three sectors — education, government and business — must all step up to help solve this looming problem.
(Excerpt) Read more at politico.com ...
The vast majority of college kids voted for Obama, I say sock it to them, turnabout is fair play.
I predict a few things will happen:
1. Bankruptcy laws currently make it very difficult to discharge student loan debt. I predict that these laws will be changed, so that students can get these loans discharged in bankruptcy.
2. There will be additional programs to have debts forgiven if students do certain work, such as teaching in inner city schools, rural schools, or working in fields such as public health or social work.
3. There will be new laws so that loan repayments will be tied to income. Instead of having to pay $XX amount per month, a sliding scale will be in place, so that students who go into fields which don’t pay well will see their monthly payments adjusted downwards.
4. Interest rates on these loans will be permanently reduced at some point to a low level, say 3%, rather than being allowed to change based on interest rates in the financial markets.
5. Obama and Democrats will try to force through changes such as these in some comprehensive bill, thousands of pages long, which nobody will have time to read. And it will be said to be some emergency which has to be done right now. Nancy Pelosi will helpfully say we have to pass the bill to find out what’s in it.
In college, I worked to get through from one year to the next.
I knew I was not entitled to have a 4 year campus party at the expense of my parents or others.
I knew I had to work if I was going to get an education at all. It was NOT a party at any time in the process.
My parents helped a lot and with the condition that if my grades fell below B- I was entirely on my own.
Still I worked to get through. I didn't live on campus, but stayed at my parents house (NOT cool enough for THESE kids, I guess). And when I WAS enrolled, I still worked simultaneously. Some of the time, I had to skip semesters, until I could get enough money to return./p>
As I said, it took longer than 4 years and it was uphill all the way.
But when I graduated, I owed NO ONE!
As an employer, I care about how you financed your degree.
Two candidates, pretty much the same, one financed their education on student loans, the other partially financed it by working.
Guess which one I’m going to hire?
Let me add, that your list implies that no private entity will EVER consider granting student loans under these unfavorable conditions. That means that college education will increasingly be financed by and manipulated by the Federal Government. Look for near indentured servitude to the government for loan repayment to be increasingly common in the future.
Well, you’re just not with it. (sarcasm)
These college kids today feel entitled to live on campus. They want to party all the time. They expect to live in a dorm which resembles a nice hotel, complete with gyms and other amenities which colleges have now.
And the guys expect to have all this, plus have a girl waiting in his room. Party on! Who has time to study?
Work your way through college??? What an archaic concept. (more sarcasm)
College students are going to be next oppressed victimized group, due to having student loan debt, and not being able to get jobs with adequate income to pay these debts. It will be someone else’s fault. Probably the blame will go to Mitt Romney and Corporate America, for not giving these college kids good paying jobs after graduation.
No blame will go to Obama and good Democrats for their policies which have caused economic growth and job growth to stall out. There will be no discussion of how economic growth and job growth and constricting governmental policies are interconnected. Instead, blame will be cast on the Romneys of the world for not giving these college kids jobs.
Politico must have laid off a good portion of the I.Q’s as it now takes a minimum of two writers to complete an article.
3 already exists. It doesn’t matter what your job is just what your income is. IIRC there are numerous levels you can apply for depending on your income.
“There’s a time and a place for everything, and it’s called ‘college’” - Chef (South Park)
All that “College Money” is sure keeping a lot of Obama’s professors on the payroll, indoctrinating future useful idiots and swelling the rolls of the terminally ignorant. What a country!
Americans in general are completely SPOILED and have forgotten (if they ever knew) what ‘sacrifice’ and ‘effort’ mean.
The idea of waiting until you can afford a thing BEFORE you get it, is an alien concept!
I work with people like this who would NOT forgo a vacation no matter how problematic their income is. Everything will go on a charge card, rather than skip ONE vacation.
These people are completely enslaved to the idea of taking their kids to Disneyland, buying the latest gadgets, toys, clothes, cars... everything is NEW and up to date at all costs and even IF it has to be charged.
To deny oneself anything is unthinkable. No one even considers saving or waiting until it's affordable much less, just telling the kid NO not this year. Parents are doing this and are only capable of this mentality because they were themselves SPOILED and indulged beyond all reason. These are second and third generation Americans with NO concept of thrift or self discipline.
Eliminate the H-1B program and have employers hire American graduates would help.
Don’t offer the reduced rate in-state tuitions to illegal aliens, and use their full freight tuition to offset the increased education costs.
Or, if you insist on having an H1-B program, replace all the expensive American perffessers with cheap Chinese and Indian ones.
(I note that “American” companies are eager to hire fresh unexpereinced IIT graduates while turning up their noses at American MIT graduates. Maybe MIT, Berkeley, Cornell, etc. should replace their under-performing professors with the clearly more skilled educators from IIT, etc.)
Or we could tie professor’s income/retirement to the salaries their graduates earn.
If you can’t teach the kids a useful skill, your retirement package is going to look mighty thin...
Look for FedGov to morph that increasing servitude into defacto slavery.
The undue hardship standard in place at present is very difficult to meet. I think it will be a revision in the code, along with some nudges from places like the 9th Circuit, that softens this rule.
2. There will be additional programs to have debts forgiven if students do certain work, such as teaching in inner city schools, rural schools, or working in fields such as public health or social work.
The Obama administration has implemented a program which allows a student to pay for 20 years, some portion of their disposable income (however that is calculated), and then have the remaining balance forgiven. You would think that 20 years would cover payback of most borrowing. But the examples I have seen (assume, for instance, Brown undergrad, Yale or NYU law or medical school, etc.) show that even after 20 years, the amount forgiven can be significant. Remember, because the vast majority of student loans are federally guaranteed this is a zero sum game between the borrowing student and the taxpayer in general. The less the student pays, the more the taxpayer pays, and vice versa.
3. There will be new laws so that loan repayments will be tied to income. Instead of having to pay $XX amount per month, a sliding scale will be in place, so that students who go into fields which don’t pay well will see their monthly payments adjusted downwards.
Yup.
4. Interest rates on these loans will be permanently reduced at some point to a low level, say 3%, rather than being allowed to change based on interest rates in the financial markets.
Yup. Fixing it at one number in the mindset of the public means less recognition that the cost of funds actually fluctuates, and that fixing the rate means subsidies to some and surcharges to others. Why shouldn't the rate reflect the alternative use of those funds at the time they were borrowed by the student?
5. Obama and Democrats will try to force through changes such as these in some comprehensive bill, thousands of pages long, which nobody will have time to read. And it will be said to be some emergency which has to be done right now. Nancy Pelosi will helpfully say we have to pass the bill to find out what’s in it.
You got it.
I kind of puts you behind the 8 ball in that you are not the ‘kid’ that people want when you go job hunting.
I would sit in those interviews and talk to young kids in the HR office and they were very snotty...
Especially, if they didn’t have a degree themselves.
Bank on it.
There is a lot of discrimination LIKE THAT in hiring.
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