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What's Really 'Immoral' About Student Loans
Wall Street Journal ^ | 06/29/2013 | GLENN HARLAN REYNOLDS

Posted on 07/01/2013 5:26:01 AM PDT by SeekAndFind

Unless Congress acts, interest rates for government subsidized student loans will double to 6.8% from 3.4% on July 1. In May, House Republicans passed a bill that would index rates on new loans to the rate on 10-year Treasurys (currently about 2.6%), plus 2.5 percentage points, with an 8.5% cap. But with little Democratic support in the Senate, that bill is dead in the water.

Most Democrats want to lock the current 3.4% rate in place for two more years while Congress debates a "fairer" solution. Massachusetts Sen. Elizabeth Warren has even proposed letting students borrow directly from the government at the same ultra-low rate that banks currently get on short-term loans from the Federal Reserve—0.75%. She calls the Republican proposal "immoral."

In the student-loan world, there's immorality to spare—not in the still historically low interest rates, but in the principal of the thing. Student debt, which recently surpassed the trillion-dollar level in the U.S., is now a major burden on graduates, a burden that is often not offset by increased earnings from a college degree in say, race and gender issues, rather than engineering.

According to an extensive 2012 analysis by the Associated Press of college graduates 25 and younger, 50% are either unemployed or in jobs that don't require a college degree. Then there are the large numbers who don't graduate at all. According to the National Student Clearinghouse Research Center, more than 40% of full-time students at four-year institutions fail to graduate within six years. The National Center for Education Statistics reports that almost 75% of community-college students fail to graduate within three years. Those students don't have degrees, but they often still have debt.

Why do students have so much debt?

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: college; debt; studentloans; tuition
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To: SeekAndFind

What a jumbled mix of poor solutions he’s recommending.

The answer is to get the government out of the student loan business. A shock, I know. And if good students end up having to start at community college, while working full-time, so be it. They will raise the expectations that employers ultimately have of community college grads.

Meanwhile, those ultra-liberal beehives of mass indoctrination, known as four-year colleges and universities, will take a serious haircut, at least—and be all the better for it.


21 posted on 07/01/2013 6:39:10 AM PDT by 9YearLurker
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To: bert

Great essay.


22 posted on 07/01/2013 6:45:07 AM PDT by Atlas Sneezed (Universal Background Check -> Registration -> Confiscation -> Oppression -> Extermination)
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To: bert

“An interviewer will be blown out of her shoes when the lessons set out and learned are recounted in extreme detail.”

All great except for one small thing. There is a program called Taleo. It is one of many programs that now do the job of HR in finding suitable candidates for their organization. More than 75% of the time the first requirement is college degree.

You can be a brain surgeon, but without a degree you won’t get in the door.


23 posted on 07/01/2013 6:52:46 AM PDT by EQAndyBuzz (The reason we own guns is to protect ourselves from those wanting to take our guns from us.)
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To: CommieCutter

AMEN!


24 posted on 07/01/2013 6:56:39 AM PDT by LeonardFMason
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To: EQAndyBuzz

For those who have not yet determined a path or paths forward, the MD school can aid in determining something interesting, a way forward. I think of MD school as precollege

Unlike many FReepers, I place high value on college. In my mind, a main benefit is learning to write. It doesn’t matter which path is chosen, the ability to write and thus communicate, is of great importance.


25 posted on 07/01/2013 6:59:32 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Who will shoot Liberty Valence?)
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To: bert

The solution to that would be to throw the worker the necessary educational materials and only qualify those can pass tests.

For the sake of a few hundred dollars worth of texts, we are spending tens of thousands of dollars per year, per student.


26 posted on 07/01/2013 7:25:45 AM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: Jonty30
For the sake of a few hundred dollars worth of texts, we are spending tens of thousands of dollars per year, per student.

Which exactly what the education system wants.

They are not interested in education, they are interested in getting govt bucks, from the tax payers, using the students as conduits.

Not very complicated at all.

27 posted on 07/01/2013 7:31:00 AM PDT by going hot (Happiness is a momma deuce)
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To: bert
” ...I place high value on college. In my mind, a main benefit is learning to write. It doesn’t matter which path is chosen, the ability to write and thus communicate, is of great importance.”

I agree, except that people used to learn how to write in high school. Colleges now have the additional burden of fixing the failures of our K-12 educational system.

28 posted on 07/01/2013 8:17:52 AM PDT by riverdawg
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To: riverdawg

You ar wrong. Learining to write, really write is always been a function of post secondary school.


29 posted on 07/01/2013 8:21:29 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Who will shoot Liberty Valence?)
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To: Count of Monte Fisto
“The colleges and universities then spend lavishly on facilities and amenities to entice prospective customers and their loans.”

Students and their parents are partly to blame for the escalation of non-educational amenities. The local flagship state university has on-campus recreational facilities that are better than most country clubs and new dorms that compete with off-campus luxury condos. The “customers” have come to expect these frills and then wonder why tuition and fees are so high.

30 posted on 07/01/2013 8:26:50 AM PDT by riverdawg
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To: bert
“You ar wrong. Learining to write, really write is always been a function of post secondary school.”

I went to an excellent government-run high school in the 1960s. First-year composition in college was a breeze for me, as were subsequent courses that had a substantial writing component, because I had already been taught the basics of sentence structure and how to organize paragraphs and essays.

31 posted on 07/01/2013 8:34:25 AM PDT by riverdawg
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To: bert
Wilkow never went to engineering school

I never said that he did.

32 posted on 07/01/2013 4:45:51 PM PDT by CommieCutter
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To: SeekAndFind

I think the college should have to co-sign student loans. As is, it is the same circumstance that created to sub prime mess. No moral hazard for the lending agent..


33 posted on 07/01/2013 4:50:03 PM PDT by IamConservative (The soul of my lifes journey is Liberty!)
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To: bert

Never mind. I misunderstood your post.

That doesn’t always apply to engineering either, but fares much better, I will say.


34 posted on 07/01/2013 5:02:23 PM PDT by CommieCutter
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