theodp writes "Like many recent college grads, Steven Lee finds himself unemployed in one of the roughest job markets in decades and saddled with a big pile of debt — he owes about $84,000 in student loans for undergrad and grad school. But what's really got Lee angry are the high interest rates on his government-backed student loans. 'The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%? The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?' Not only that, federal student loans are the only loans in the nation that are largely non-dischargeable in bankruptcy, have no statutes of limitations, and can't be refinanced after consolidation, so Lee can forget about pulling a move out of the GM playbook. And unlike mortgages on million-dollar vacation homes, student loans have very limited tax deductability. A spokeswoman for the Department of Education blamed Congress for the rates which she conceded 'may seem high today,' but suggested that students are a credit-unworthy lot who should thank their lucky stars that rates aren't 12% or higher. Makes one long for the good-old-days of 3% student loans, doesn't it?"
Direct loans were cheap, and the consolidation brought them down to ~5% afair. I know the new loans are not as cheap, but thats because some idiot decided having non-direct loans and promising a profit to everyone who serviced them. Doh!
Mostly it depends on when you went to school -- I consolidated my graduate loans in 2000. So my rate is 7.75%. Which does suck. I don't understand why I can't "re-finance" my loans every time rates go low.
You can. Get a bank loan from somewhere else and pay off your student debt in full. Then it is not bound by the rules any more. Or have you promised to pay over a certain time span ?
by Anonymous Coward
on Sunday October 18, @10:17PM (#29789331)
In Australia, an average degree costs about $20K to $30K (depending on arts vs science/law/engineering/etc) and there's no interest on the government loan. It is, however, indexed to inflation.
If you go overseas, you don't have to keep paying it until you return to Australia, and it is terminated upon death. That maximum rate it is taken from you pay at is 7% and that only starts when you hit about $30K to $40K per year.
This only applies to degrees taken at public universities, but most of the universities in Australia are public (certainly all the best ones are).
So to hear about this system America uses is quite disturbing. The university attendance rate over there must be exceptionally low?
So you don't think that colleges charge whatever the market will bear?
Have you been to a US college recently? The one near me is still on a building spree that it has been on at least since I started there, eight years ago (I graduated and found a job in town). They have spent AT LEAST a half a billion dollars since I started paying attention, with the largest chunk being the first 100 million dollar expansion of the stadium to build box seats for rich donors. All this for a school with 30,000 students.
Also, you don't think the housing boom was caused by freely available cheap credit? Hell, while I was still in school, I was able to get a mortgage while I didn't even have a job! The mortgage payment was cheaper than rent!
Every degree is valuable, you know? Every student must get a degree! (probably because we already watered down the high school diploma by insisting that every student must get one, no matter if they can't effectively understand math usage or the meaning of something they read)
Imagine the outrage if it were suggested that physics, engineering, and math were more worthy than black studies, women's studies, and LGBT studies. We're going to Hell in a very nicely woven handbasket.
Perhaps the worst thing is that this perpetuates the idea that college education is generally worthless. When people see college graduates failing in the job market, they often conclude that education is not worth any effort. The correct conclusion is of course that your field of study matters, but that doesn't generally sink in.
That just got modded "flamebait" by somebody who clearly resents being reminded that some degrees (his own most likely) have nearly zero economic value.
It's an annoying way to stifle debate, but at least I find it amusing.:-/
Physics and maths are just theory, they have no economic value at face value and anyone who thinks otherwise is a moronic anti-intellectual who has no idea what either of those is or does. Also, someone who doesn't understand the meaning of economic value.
Tell that to someone who majored in medical physics and works at GE.
Tell that to the guys who work down the hall from me who design high performance motors for hybrid and electric vehicles.
Tell that to the mathematician doing model parameter estimation in our software.
You already told *me* - the software guy who uses math on nearly a daily basis.
Tell the business folks who employ these people.
BTW, I believe everyone mentioned here makes 6 figures. So no, there must not be economic value in math and physics.
Maybe you're one of those wall street guys that put the economy in the toilet because they all used the same flawed mathematical model for planning purposes - because they don't have too many math folks, because they have no economic value. Or the MBAs who say people in the US will just outsource and "manage" everything, because none of those things like engineering, design, manufacturing, distribution, etc... are "economically valuable".
You start from the false premise the education is meant to prepare you for a job. It's not. Academia rightfully doesn't give a sh** about weather it's preparing you to shuffle work around or not. That's not it's goal, and I don't think it should be. It's goal is for you to learn things, and perhaps eventually further the field for the few that choose to continue. Learning for learning's sake is their goal and an admirable one.
I take it that you didn't notice you were living in a democracy. Degrees like history or philosophy that have no direct application to employment (although the skills developed in doing such a degree have a general application) are exactly the sort of degrees that engender an informed and capable citizenry capable of properly holding its representatives to account. A citizenry incapable of evaluating arguments and ignorant of history is more easily duped.
It has long been a dream of fascists to eliminate such forms of education for precisely that reason.
And before anyone starts, you should already have noticed that the same phenomenon occurs with science degrees. Some of those who think science degrees are great as long as science graduates are making useful widgets tend to get very agitated when science graduates start using their education to hold policy makers to account (climate change is an obvious example, as is teaching evolution in schools).
Beware those who say that all education must be "useful". They often have a hidden agenda.
Degrees like history or philosophy that have no direct application to employment (although the skills developed in doing such a degree have a general application) are exactly the sort of degrees that engender an informed and capable citizenry capable of properly holding its representatives to account. A citizenry incapable of evaluating arguments and ignorant of history is more easily duped.
The problem isn't history/philosophy/sociology majors themselves. Quite a number of them do good, valuable things for the country and their fellow people (especially if their academic and intellectual experience is tempered with some real-world experience). The problem is the number of people who don't go to school for those things, but who go because "everyone needs to go to college" and they choose a major like that because they need to choose something. Coorectly or not, they pick something that sounds easy just so they can have a degree--and everyone knows that "you need to go to college to have a good job".
Part of the problem is that we're encouraging people to go to college when they aren't going to use it or even care about it. We've elevated the office job and made skilled trades a thing of contempt. The guy who sits in a cubicle churning out TPS reports a five-year-old could write is automatically elevated over a master CNC machinist and programmer simply because he has a degree and works in an office. There ought to be no shame in taking up a trade like machining or welding; a good machinist, for example, is as valuable to a company as any engineer.
Now don't get me wrong--it's always great for people to go and learn more. It's always a good thing to have a better-educated populace. But I think the current pushes of "everyone must go to college" and "you need a degree to get a decent job" force too many people to go befre they can afford it, and therefore take on piles of debt for something they don't need. Ideally, it would be far better to wait until they could afford it.
To put it another way, going tens of thousands into debt just to get a generic degree is stupid.
The problem is the number of people who don't go to school for those things, but who go because "everyone needs to go to college" and they choose a major like that because they need to choose something.....
The guy who sits in a cubicle churning out TPS reports a five-year-old could write is automatically elevated over a master CNC machinist and programmer simply because he has a degree and works in an office. There ought to be no shame in taking up a trade like machining or welding; a good machinist, for example, is as valuable to a company as any engineer.
As someone who lives in a Uni town, worked in a machine shop, got some college, and now sits in a cubical (well.. I do not to turn out TPS reports.. thank the FSM); I wholey endorse the parent and agree with what the comment said.
I see tons of people that think college is just a 4-year extension of High School, and the degradation of the K-12 US schooling system (or it seems like it's dumber then when I was in it), means that often HS grads are in fact not qualified for basic jobs.
He does bring up an interesting point though, admittedly in a stupid and ignorant way.
Why isn't education free? It's sure as hell free right up to a high school diploma, so why not free after that?? Government subsidizes some enormously unimportant and stupid shit and don't even get me started on the bail outs. Too late...
I'm sure his post can be seen as ignorant but it DOES create a question in many people's minds why Wall Street, the supposed bastion of white elitism, get's a bailout while the rest of America does not? I have yet to see any benefit from it. Other than the few in the service industries receiving large ridiculous payments for lavish "gloating" parties.
So why don't we just clawback 90% of their pay, it's not like that would not leave them with multiple times the average American salary, and use that to forgive all student loans?
Where is the *real* bailout for the American people?
I understand capitalism and the supposed free market (fuck-it, it DOES NOT EXIST) but why does it have to be labeled as socialism and pinko-communism to have the idea that education should be one of the few things that is supported solely by the government? Why does free education always have to be instantly equated to unpaid teachers and staff?
We are going to turn into a 3rd world country without education reform in our lifetimes. Part of that reform must be a federal education budget, that cannot be withheld from the states under any circumstances, and appropriately funded college educations. I am also definitely for removing high school and changing it to a trade school/college prep 5 year time period. Trade school does not have to a bad thing either. How about seriously training some of our young people for once? Paying local businesses, which can include IT firms, to take on young apprentices and actually give 5 years of subsidized real world experience. Operating tech/trade labs where young people can get hands on training in contemporary technology used in the field? Maybe instead of having a high school diploma we could just have certifications instead. Meaningful Certifications too, not worthless MCSE's. That's not a troll either, all of the MCSE's I have met have been near worthless and the ones that are not will candidly tell you how much they needed to learn outside of the certification to survive and get their jobs done.
I am sure that a lot of people could tear this post to shreds, but you know what? Education is not working right now and the only thing we seem to be able to do is to churn out young people by the thousands that have no real skills and start out saddled with debt at unreasonable rates that cannot be erased.
P.S - I would gladly pay a 5% tax rate on all good, services, and income if I KNEW it went straight into the education system in a way that it could not be diverted to anything else like SS has been in the past. At some point I might be retired and will have to rely on all those stupid young people for 20-40 years not to fuck things up too much till I die. The last thing I want to be is 75 in a grocery store being told by a 19 year old that they can't give me change because the machine is, "like all broke or something", while the cash tray is open and all they have to do is reach in and grab it. Oh wait... that was last week. Of course there are the good days too. When another young person get's handed a 100 dollar bill to pay for something and I get handed back 160 dollars as change. Of course I sweetly pointed out that she should check her math again and she blushed and said thank you. I wish I was kidding about those two incidents. Sadly I am not.
First, kids don't value free stuff, but they'll take it anyway. University is already "13th grade" to many people, and by telling kids that they can shirk responsibility and stay in high school as long as they want without paying for it is just crazy. Who wouldn't want to live the college life as long as possible? It's certainly a lot less stressful than "the real world." The only thing saving college from the unmitigated mediocrity of high school is the fact that they know they'll eventually pay for this lifestyle (or their parents are on their case because *they're* already paying for it.)
Second, it isn't required for survival. Many people get along just fine without college degrees, and indeed, don't need them in their day to day lives.
Third, it increases the number of people staying because of the Mom and Dad factor. I'm of the opinion that even the upper grades of *high school* are a waste on a significant number of people, because they simply don't care and are only there because they "have to be." Yes, they could theoretically drop out at 16, but Mom and Dad won't hear of it because they're convinced that little Johnny is throwing away his opportunity to become President one day. The fact that Johnny harbors an *active disdain* for the idea of school and learning in general doesn't ever seem to sink in.
The fact that people pay for University and take on a certain amount of risk means that people have to *think about it* before going or sending their kids. Do they really want to do it? Are they willing to put in the work necessary? How long are they willing to pay for it? Maybe in other countries the culture is different, but I fear in America, the disdain for learning that I observed during my time, and continue to observe in kids today, guarantees that government funding of higher education will be nothing more than another money sink with no tangible benefit. Scholarships, grants, and tuition assistance exist for a reason. Let them pick the people who are qualified for the privilege.
In India, student loans are 12% compound interest; while the borrowing rate in good banks is as high as 7.5% compunded quarterly.Money makes the world go round...
But in India, education is also highly subsidized and in a lot of universities, the fee structure is merit-based (i.e. your ranking in your entrance examinations determine which stratum you fall under).
I worked at a mid size private university in the midwest and tuition rates were astronomical ($30k for undergrad). I think the loans are one thing but tuition rates are a larger issue. I wondered how they stayed in business especially these days.
"I think the loans are one thing but tuition rates are a larger issue. "
tuition prices are so high because kids keep getting approved for loans. I imagine schools might someday see the same thing the housing market has recently if the prices keep going up faster than inflation [miamiherald.com]. Can't sustain that forever.
No, they're high because it's a service where productivity can't increase very much.
Rubbish. Folks like you cry we need to spend more money on education, so we give state universities more money, and they blow it on administrators or programs that are ancillary to actually putting useful knowledge into someone's head.
Your argument is only an argument for tuition prices tracking with inflation- but they've been rising at double the inflation rate.
If your state's making money at its institutions, please have them contact mine so we can resolve our huge current deficit.
It's not a matter of profit, it's a matter of finding new and creative ways to blow taxpayer and tuition money on expenses arguably, vaguely related to education.
State universities don't spend money efficiently because they don't have to. There are too many idealists out there who think that pouring money into the universities guarantees getting better results out. This isn't the case.
State Universities are run by mortal men and women, who make the same mistakes and misteps as the rest of us. The letters after their names simply indicate the possession of specialized knowledge, which is entirely unrelated to the efficient operation of a university.
I sit on an advisory board at the local community college, and as such I get the chance to rub elbows with others in academia, including faculty and administration at prestigious schools in the Ivy League. It's interesting that when you talk to these people, they make no bones about justifying why they charge so much for an education. As someone from Brown put it bluntly, "If we didn't charge so much, people would not think it was worth anything." Some might argue that the easy access of federal funds has done a lot to exacerbate the problem of rising tuition costs. Just as government contractors and consultants view federal government funds as a never-ending supply of money, colleges view it in a very similar way.
There's a vast difference between the skilled tradesman and what you call morons. Give me a licensed master plumber, master electrician, mechanical contractor, etc and I'll show you someone that truly understands their field and has years of experience under their belt. Sure the variety of assistants range in ability like any job, but to label the actual skilled person as a moron shows you don't understand the field. That'd be like comparing someone who flips burgers to a skilled chef. Also the skilled trades are very strongly union in every major city, unions being one of the strongest backers of the Democrats.
As for continuing education much of the green movement is powered by installation of ultra high efficiency equipments. Pull up a wiring schematic for a 96% boiler and the various pumps and zone valves - it's anything but moronic work.
So what's up with the trades bashing? Watch a few episodes of Dirty Jobs and you'll see some examples of problem solving at the finest.
The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%?
Because if you default on the mortgage, they can take your house. Education repossession technology is still in beta. Even when it works it and rarely returns anything of value.
And when you default on the student loans your wages and other income gets garnished. That renders your point moot.
Provided that you have an income. If someone is defaulting on hist student loan (and given the generous forbearance and other options before the dishonorable default), what makes you think he actually still has his job?
If someone has a mortgage, then unless he's done something illegal he does have a house that can be repossessed—it may be worth less than the mortgage, but it's still something, unlike with education.
Yes, but did they understand what the papers they signed meant, before they took the accounting classes?
Students are a gullible group.. if the banks convince them they need an 8% student loan, because for some reason they "are a poor credit risk", then the students who don't have the education yet are likely to sign, not even realizing there may be a possibility of finding another deal (or maybe there's not another option).
The claim students are a poor credit risk is one of the strangest... with a debt that cannot be discharged in bankruptcy, has no statute of limitations, has a government guarantee behind it, including an ability to garnish wages, and these people taking out student loans are generally young people....
It seems like student loan debt is less of a credit risk than most other types of even secured debt.
I declare that: "students are a credit-unworthy lot who should thank their lucky stars that rates aren't 12% or higher."
Is basically nonsense.
It makes no more sense than saying "30 year olds are an uncreditworthy lot."
It's credit history that relates to creditworthiness, not being a student or not.
by Anonymous Coward
on Sunday October 18, @10:19PM (#29789353)
There are two general type of student loans: direct and non-direct with a dirt cheap and a cheap interest rate. 8.5% is cheap for an UNSECURED loan that doesn't START accumulating interest until AFTER you graduate (actually Govt pays interest till you graduate).
Dude- you got $85K with ZERO collateral. The rate is NOT unreasonable. It is the best investment you can make for your future.
You can always become a teacher in the inner city or work 2 years for Peace Corps or any of the other methods the government has setup for most or all of your loan to be FORGIVEN.
Stop complaining about getting cheap money with no collateral and no limitation, except that you go to school.
'The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%? The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?' Not only that, federal student loans are the only loans in the nation that are largely non-dischargeable in bankruptcy, have no statutes of limitations, and can't be refinanced after consolidation, so Lee can forget about pulling a move out of the GM playbook. And unlike mortgages on million-dollar vacation homes, student loans have very limited tax detectability.
Mortgages and car loans are secured loans, where the property or car that is bought with them is pledged as collateral. This makes a big difference for the interest rates. Student loans just ain't so.
Anyway, I've heard complaints like this about student loan rates before, and I've always had the same basic response: you're barking up the wrong tree. You don't really want lower interest rates on student loans; you want the government to spend more on making higher education affordable for those who qualify for it. There's a bunch of countries out there where if you get admitted into a university, the government picks up the tuition bill, period. Those countries ain't richer than the USA.
I'm in a situation similar to the person featured in the article - interest accrues on my student loans at a rate of several thousand dollars per year, even WHILE I'M IN GRAD SCHOOL and have no reasonable means to pay down the principal. My tuition, even at a public undergraduate institution, was $30k + per year. I personally know many, many other grad students in my position. It's outrageous that the people the government and banks should be supporting - those who spend nearly a decade earning an advanced education - are being fleeced left and right.
Really? Grad school's been a pretty good deal for me as far as loans go. I just called up my lenders, and got all my student loans deferred (with no interest) until i complete my PhD. And considering that I get paid to do grad school, I plan to pay off those loans as soon as I graduate. I think the answer is to stop whining, save money, and if you couldn't afford the school in the first place, perhaps choose a cheaper option?
I think you must have loans that are somehow different from mine. While I don't have to make payments on most of my loans while I'm in grad school, the interest continues to accrue. I would also like to propose a distinction between "whining" and anecdotally highlighting a situation that is both unfair to individuals who decide to pursue an advanced education and harmful to the intellectual and scientific health of the country.
If students are a "credit-unworthy lot" then limit the amounts they can borrow or make it a fixed amount that they must repay. Charging a higher interest rate for "credit-unworthy" people makes it more likely that they'll default, making it a self-fulfilling prophecy. This holds true for all borrowers.
The problem isn't finding a new fangled way for college student to be able to pay the enormous costs of college, it is to find ways to educate them more cheaply tha nwe do now. Online learning, competition, utilisation of open source textbooks... Be creative.
The problem is one of treating education as a business like any other. The country obtains a benefit from having an educated citizenry, and allowing education of this type to be treated as just another profit-center is at best short-sighted, at worst actively hostile to the country's best interests. From this basic problem, everything else flows.
I'm from the UK, and just recently I've been reflecting on the things that I took for granted in the UK that are pay-for over here in the USA. Don't get me wrong, I love living here, I've just married an USAsian who's simply wonderful, but there are things I miss...
Primarily of course, is universal healthcare. The NHS is so far and away better than the situation we have here in the US that it's just not funny. Leaving that argument aside, the other major thing is education. My new wife and I were thinking about where any future offspring might be educated...
If the USA stays the same course as it's currently on, I think my children (as UK citizens by birthright) may be going to the UK for their education. It's a lot cheaper, it'll broaden their minds by travelling, and the quality is generally very high.
Oh how things have changed. I no longer think of the USA as being the gold-standard of higher education. Now I think of it as being just a way of transferring money from rich people to educated people.
As it happens, my wife paid off her student loans (for a JD/MBA) this evening (well, they'll settle on Tuesday). For the cost she just paid, we could buy a small house in the UK. The only debt higher is our mortgage, and living in a nice house in a nice part of the Bay area, that's expected.
I didn't pay for my education (although these days if you don't go to Scotland you pay something in the UK - it's a *lot* less than over here in the US though). I gave the UK about 10 years of higher taxes as a result - probably less than they were expecting - but moved to the USA for the nicer weather:)
... but there are many many different places in the world, some of which are outside the USA. Most of these places have different laws, customs, and living standards. The UK is not Czechoslovakia...
If I didn't care about the state of play in the USA, I'd just up and leave, taking my family and my considerable yearly tax burden with me. I choose to stay and try to influence people as I can...
FWIW, my uncle was recently diagnosed with a heart problem back in the UK, he was in hospital the same day, operated on within 2 days and back home 2 days later. The only real down-side was that he couldn't attend the wedding because of the US insurance costs.
And two weeks before the wedding, my mother was diagnosed with breast cancer. She opted to put off the operation-date offered (1 week after diagnosis) and wait until after the wedding. Since then she's been back and had her operation.
My family is not rich. My father worked on the docks, my mother had a variety of part-time jobs through her life. Excellent, timely medical care is something she (and I, until I moved to the USA) take for granted, without any "recission", or "previously established medical condition" nonsense. If you're sick, see a doctor. Get better with as much or as little help as necessary. No co-payments. No payments (at the point of treatment) at all, and if you need heart surgery or extensive (5 years chemotherapy is being talked about for my mother) treatment, there's no questions asked...
There's no way my family could have afforded the medical insurance that would be equivalent to the care that my mother and uncle have just received. They of course don't consider this to be anything special, it's only when you don't have something any more, that you miss it. Similarly, I don't think americans miss it because frankly they've never experienced it. They just keep on telling themselves they have "the best healthcare system in the world", which (IMHO) is only true for the minority of rich americans that don't really need the insurance companies anyway...
The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?'
To me this is a tragedy. Young people starting off almost $100K in the hole. I had student loans, so did my wife. Together they didn't add up to $40K and she went to grad school.
On a higher level this kills entrepreneurial opportunities at the time in life you have the most desire, creativity and energy to launch a new business. Many of you are stuck in low-paying, dead end jobs because of student loans...one of the reasons some companies like to hire right out of college. Student loans and health insurance. Wouldn't it be better to turn all that creativity loose developing new businesses and jobs? But how can you saddled with all that debt and no health care coverage?
We have to do something, not just for people in college now but those recently graduating into 9.5% unemployment. Whatever that is, it has to include cost controls on education. The cost of education is running way ahead of inflation and textbook companies are worse than the mafia (at least the mob runs prostitutes). This is crazy.
But what to do about it? If the government tried some kind of forgiveness program, Republicans would scream about budget deficits. Student loans are also a giant bank pork program and you can see what kind clout they have in Washington. So, it's got to be paid for somehow, deficit neutral, combined with cost controls on education and everyone on both sides of the political pork barrel have to STFU long enough to get it done.
Maybe it's because you're borrowing over 80,000 dollars for a college education.
5 minutes with a spreadsheet would tell you how much and for how long you have just screwed yourself, and by borrowing that kind of money you prove that you can't or won't spend even that much effort to think before borrowing.
I think part of the problem is cultural: I was broke back when I went to college, and I needed loans; but I also knew that you should never borrow anywhere near enough to pay your whole tuition bill. That's far too much money to borrow even if you aren't dead broke. Poverty forces you into indebtedness, but it also makes you paranoid about accumulated debt, and you understand that something that costs tens of thousands of dollars will require you to eat Ramen, work multiple jobs, and make affordable choices even if someone will extend you credit.
But now I hear horror stories about students who borrow enough money to buy a house in much of the USA, and use that to pay for an entire four-year degree plus graduate school. It's like the kids don't understand that they're poor; they get a credit line and stop acting like people who have to work for a living.
I was the oldest child of a middle class family of 3. I applied to 2 public and 3 private universities and was accepted to all of them, but with minimal financial aid. I chose to attend a nearby public university that offered a quality education that cost approximately $10,000/year in the late 90's.
Why did I make this choice?
- I could afford to finance about 75% of tuition via savings that my parents had set aside for me. - I worked various jobs while in school, eventually hitting $15-17/hr, which more than covered the remaining tuition & expenses. - I didn't want to screw my siblings out of an education or force my parents into debt. In the end, I was able to leave about $4,000 of my parent's savings for my brother or sister.
I have friends who are teachers who decided that they needed to attend small, private New England colleges with tuition and expenses over 350% more than my education. One of those friends and his wife makes $120k combined teaching, but after years of deferments owes over $300,000 a decade after graduation (not including graduate work form a private school which would have been FREE had they gone to the state university) -- my friend and his wife can barely afford rent, and will likely become homeowners when they inherit a house when one of their parents pass.
People don't need bailouts, they need to live within their means and not assume that they are entitled to a specific lifestyle or type of job due to the circumstances of their birth. If you can't afford four years of college, borrow money to go to trade school and work as a plumber, HVAC, electrician, etc. If you really want to go to college, you'll be able to earn the money to do so.
As a student with 10+ years of education, 3 years of actively accepting student loads (which have been accruing interest for the last 8 years), and a wife with 5+ years of loans already in repayment I feel justified in saying "BOO FRIKIN' HOOO"
A college education was never meant to be a guarantee of future financial stability, especially in the short term. We need to get away from this pervasive mentality of "Things didn't go exactly according to the PLAN. The Government needs to save me!!!! WAAAAAAAA".
Of course it sucks trying to find a job in the current market, and I sympathise as I'm currently looking for my next job as I'm going to graduate soon. However, that doesn't mean that the federal government, who already bent over backward in order to help me get the loans I needed in order to persue my education, should be expected to further subsidize me into my 30's. Grow a friggin' pair, and if necessary get a job working at McD's and rent the shittiest appartment you can find to make ends meet. This sense of entitlement to an easy life, simpy because you are college educated is assinine and juvenile. The education is supposed to give you more skills, based on the idea that more skills make you more valuable. However, if you pursue a degree in which those skills are next to useless (I'm looking at you art history majors), or one in which the market is oversatturated, well then you were an idiot and deserve to suffer a little for your stupidity. That doesn't mean that you should be able to get your education for free, just because it took you a little while to find a job.
We need to stop supporting those that have made stupid decisions or else they'll never learn that there are consequences for their actions. I learned that in middle school, my older brother took until after high school, and apparently some have failed to learn the lesson despite being 22 (Bachelors), 24-28 (Graduate Degree), or even older 50-60 (Corporate CEO's that ran their companies into the ground). Maybe I'm just an insensitive clod, but not everyone can be happy all of the time. A little hardship can build character, just as our grandparents.
There are nowhere near as many people suffering as there were in the great depression, all the "Worst recession since the depression" hyperbole aside. If the current hardships mean that it takes you an extra 10 years to buy a house, or that you have to settle for something less than a McMansion I'm not going to be losing any sleep over it. I will probably lose more than a little over my own financial problems, but they are MY PROBLEMS and not the governments. A little more personal accountability on behalf of most Americans would go a long way to improving our collective condition.
The government subsidy on college loans is being able to get a loan in the first place. How else can you get a loan for $30-60k (or more) as an 18 year old with no credit history, no job, and no skills! You're an idiot to place yourself in that much debt with a very clear understanding of the terms and a strong plan on how exactly you're going to pay them off. The job market is weak right now, but companies are still hiring - go train yourself up and find one.
If you can live cheap you should be able to pay off state college as you go. If you do Co-ops or internships all the way through you can pay a quarter work a quarter and graduate with no debt and a better chance of getting a full time job when you get out.
Someone (god only knows why) decided that simply because you wanted to go to college you were worth tens of thousands of dollars at honestly a really low interest rate, compared to if you wanted that money to do anything else (go try to get a signature loan for ten grand from a bank and see what interest they give you, if they don't laugh in your face).
You got yourself in debt and you alone. If you decided to spend that money you acquired on something that isn't going to allow you to pay it back, it's nobody's fault but your own.
Nearly 50% of all fortune 100 CEO's graduated from a state university. There's no reason to think you need any better if you can't afford it.
A civilized nation should provide free education to the highest level each person wishes to attain, because that's part of believing that the nation's most most important resource is its people.
Your conclusion fails to follow from your premise. Paying for someone's degree in Advanced Featherbedding just because they want on does little for the nation but produce yet another idiot with a meaningless degree and a sense of entitlement.
But when a government just wants dumb consumers, then it's a very different matter.
A nice soundbite, but nothing else.
Personally, I think a system that makes people work to pay for their education works just fine. It sorts out the those with the skills and dedication to obtain an advanced education from those without - the same skills and dedication they will hopefully employ in whatever career that education prepares them for.
And I am happy to pay for it. I'm happy to help someone out whenever I can. But geez, if you worked hard through high school, isn't the knowledge you gained from that hard work enough? I mean, you're going to college, you are working hard, and YOU are going to be the primary beneficiary of all your hard work. Do you really want to force someone else to pay for it? If you don't think it's truly worth it, don't do it. If you don't want to penny pinch, then don't; go do something where you don't have to. If it is too costly, then it's probably not worth it. Go do something else.
Spoken like someone who cant think beyond their own pocket.
Because proper education systems increase your wealth as well, the same as proper health systems benefit your health as well. Let me ask you this, would you rather have a nation full of highly educated white collar workers or a nation full of barely educated blue collar slobs barely able to swing a hammer?
Well the white collar workers of course, you cannot compete with the third world on manufacturing whilst maintaining a first world economy. Now if education is difficult to afford then you will end up with a large section of your workforce earning low wages, low wages means that their contributions to tax will also be low as well as the amount of money they have to spend or invest. This means that YOU as the middle class will contribute MORE in tax to maintain the same quality of life or YOU will have to accept a LESS fortunate lifestyle.
If you have more highly educated workers you can attract and create high tech industries which pay higher wages and thus contribute more in tax. This means the as a net result of more people paying more tax YOU pay less tax over all. YOU also benefit from OTHERS spending more disposable income or INVESTING that income which in turn creates more wealth and REDUCES the tax burden on INDIVIDUALS.
I suggest you look at HECS [wikipedia.org], a scheme created by the Australian Federal Government which covers the cost of tertiary education for Australians. This is in turn paid back as it is factored into the amount of tax a receiver of HECS pays (I.E. you pay only for the HECS that you have used) at the end of each financial year. In effect the government extends a near zero interest loan with a flexible amortisation schedule, so the tax taken from mr to pay HECS gets returned in full later in life via a reduction in taxes and economic benefits. It's almost like, well like an investment and an investment that has been working for Australia for the last 20 years.
All mine were cheap! (Score:5, Interesting)
Direct loans were cheap, and the consolidation brought them down to ~5% afair. I know the new loans are not as cheap, but thats because some idiot decided having non-direct loans and promising a profit to everyone who serviced them. Doh!
Re:All mine were cheap! (Score:5, Interesting)
Parent
Re:All mine were cheap! (Score:5, Informative)
Parent
Re:All mine were cheap! (Score:5, Informative)
In Australia, an average degree costs about $20K to $30K (depending on arts vs science/law/engineering/etc) and there's no interest on the government loan. It is, however, indexed to inflation.
If you go overseas, you don't have to keep paying it until you return to Australia, and it is terminated upon death. That maximum rate it is taken from you pay at is 7% and that only starts when you hit about $30K to $40K per year.
This only applies to degrees taken at public universities, but most of the universities in Australia are public (certainly all the best ones are).
So to hear about this system America uses is quite disturbing. The university attendance rate over there must be exceptionally low?
Parent
Re:All mine were cheap! (Score:5, Insightful)
That seems to be an argument to reduce university tuition costs, not reduce interest rates.
Parent
Re:All mine were cheap! (Score:5, Insightful)
Have you been to a US college recently? The one near me is still on a building spree that it has been on at least since I started there, eight years ago (I graduated and found a job in town). They have spent AT LEAST a half a billion dollars since I started paying attention, with the largest chunk being the first 100 million dollar expansion of the stadium to build box seats for rich donors. All this for a school with 30,000 students.
Also, you don't think the housing boom was caused by freely available cheap credit? Hell, while I was still in school, I was able to get a mortgage while I didn't even have a job! The mortgage payment was cheaper than rent!
Parent
yep, but it's not politically correct (Score:5, Insightful)
Every degree is valuable, you know? Every student must get a degree! (probably because we already watered down the high school diploma by insisting that every student must get one, no matter if they can't effectively understand math usage or the meaning of something they read)
Imagine the outrage if it were suggested that physics, engineering, and math were more worthy than black studies, women's studies, and LGBT studies. We're going to Hell in a very nicely woven handbasket.
Perhaps the worst thing is that this perpetuates the idea that college education is generally worthless. When people see college graduates failing in the job market, they often conclude that education is not worth any effort. The correct conclusion is of course that your field of study matters, but that doesn't generally sink in.
Parent
outrage noted :-) (Score:5, Informative)
That just got modded "flamebait" by somebody who clearly resents being reminded that some degrees (his own most likely) have nearly zero economic value.
It's an annoying way to stifle debate, but at least I find it amusing. :-/
Parent
Re:outrage noted :-) (Score:5, Insightful)
Tell that to someone who majored in medical physics and works at GE.
Tell that to the guys who work down the hall from me who design high performance motors for hybrid and electric vehicles.
Tell that to the mathematician doing model parameter estimation in our software.
You already told *me* - the software guy who uses math on nearly a daily basis.
Tell the business folks who employ these people.
BTW, I believe everyone mentioned here makes 6 figures. So no, there must not be economic value in math and physics.
Maybe you're one of those wall street guys that put the economy in the toilet because they all used the same flawed mathematical model for planning purposes - because they don't have too many math folks, because they have no economic value. Or the MBAs who say people in the US will just outsource and "manage" everything, because none of those things like engineering, design, manufacturing, distribution, etc... are "economically valuable".
Parent
Re:yep, but it's not politically correct (Score:5, Interesting)
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Re:All mine were cheap! (Score:5, Insightful)
I take it that you didn't notice you were living in a democracy. Degrees like history or philosophy that have no direct application to employment (although the skills developed in doing such a degree have a general application) are exactly the sort of degrees that engender an informed and capable citizenry capable of properly holding its representatives to account. A citizenry incapable of evaluating arguments and ignorant of history is more easily duped.
It has long been a dream of fascists to eliminate such forms of education for precisely that reason.
And before anyone starts, you should already have noticed that the same phenomenon occurs with science degrees. Some of those who think science degrees are great as long as science graduates are making useful widgets tend to get very agitated when science graduates start using their education to hold policy makers to account (climate change is an obvious example, as is teaching evolution in schools).
Beware those who say that all education must be "useful". They often have a hidden agenda.
Parent
Re:All mine were cheap! (Score:5, Insightful)
Degrees like history or philosophy that have no direct application to employment (although the skills developed in doing such a degree have a general application) are exactly the sort of degrees that engender an informed and capable citizenry capable of properly holding its representatives to account. A citizenry incapable of evaluating arguments and ignorant of history is more easily duped.
The problem isn't history/philosophy/sociology majors themselves. Quite a number of them do good, valuable things for the country and their fellow people (especially if their academic and intellectual experience is tempered with some real-world experience). The problem is the number of people who don't go to school for those things, but who go because "everyone needs to go to college" and they choose a major like that because they need to choose something. Coorectly or not, they pick something that sounds easy just so they can have a degree--and everyone knows that "you need to go to college to have a good job".
Part of the problem is that we're encouraging people to go to college when they aren't going to use it or even care about it. We've elevated the office job and made skilled trades a thing of contempt. The guy who sits in a cubicle churning out TPS reports a five-year-old could write is automatically elevated over a master CNC machinist and programmer simply because he has a degree and works in an office. There ought to be no shame in taking up a trade like machining or welding; a good machinist, for example, is as valuable to a company as any engineer.
Now don't get me wrong--it's always great for people to go and learn more. It's always a good thing to have a better-educated populace. But I think the current pushes of "everyone must go to college" and "you need a degree to get a decent job" force too many people to go befre they can afford it, and therefore take on piles of debt for something they don't need. Ideally, it would be far better to wait until they could afford it.
To put it another way, going tens of thousands into debt just to get a generic degree is stupid.
Parent
Re:All mine were cheap! (Score:5, Insightful)
The problem is the number of people who don't go to school for those things, but who go because "everyone needs to go to college" and they choose a major like that because they need to choose something. ....
The guy who sits in a cubicle churning out TPS reports a five-year-old could write is automatically elevated over a master CNC machinist and programmer simply because he has a degree and works in an office. There ought to be no shame in taking up a trade like machining or welding; a good machinist, for example, is as valuable to a company as any engineer.
As someone who lives in a Uni town, worked in a machine shop, got some college, and now sits in a cubical (well.. I do not to turn out TPS reports.. thank the FSM); I wholey endorse the parent and agree with what the comment said.
I see tons of people that think college is just a 4-year extension of High School, and the degradation of the K-12 US schooling system (or it seems like it's dumber then when I was in it), means that often HS grads are in fact not qualified for basic jobs.
Parent
Re:All mine were cheap! (Score:5, Funny)
It wasn't Lennon, it was McCarthy.
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Re:All mine were cheap! (Score:5, Insightful)
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Re:All mine were cheap! (Score:5, Interesting)
He does bring up an interesting point though, admittedly in a stupid and ignorant way.
Why isn't education free? It's sure as hell free right up to a high school diploma, so why not free after that?? Government subsidizes some enormously unimportant and stupid shit and don't even get me started on the bail outs. Too late...
I'm sure his post can be seen as ignorant but it DOES create a question in many people's minds why Wall Street, the supposed bastion of white elitism, get's a bailout while the rest of America does not? I have yet to see any benefit from it. Other than the few in the service industries receiving large ridiculous payments for lavish "gloating" parties.
So why don't we just clawback 90% of their pay, it's not like that would not leave them with multiple times the average American salary, and use that to forgive all student loans?
Where is the *real* bailout for the American people?
I understand capitalism and the supposed free market (fuck-it, it DOES NOT EXIST) but why does it have to be labeled as socialism and pinko-communism to have the idea that education should be one of the few things that is supported solely by the government? Why does free education always have to be instantly equated to unpaid teachers and staff?
We are going to turn into a 3rd world country without education reform in our lifetimes. Part of that reform must be a federal education budget, that cannot be withheld from the states under any circumstances, and appropriately funded college educations. I am also definitely for removing high school and changing it to a trade school/college prep 5 year time period. Trade school does not have to a bad thing either. How about seriously training some of our young people for once? Paying local businesses, which can include IT firms, to take on young apprentices and actually give 5 years of subsidized real world experience. Operating tech/trade labs where young people can get hands on training in contemporary technology used in the field? Maybe instead of having a high school diploma we could just have certifications instead. Meaningful Certifications too, not worthless MCSE's. That's not a troll either, all of the MCSE's I have met have been near worthless and the ones that are not will candidly tell you how much they needed to learn outside of the certification to survive and get their jobs done.
I am sure that a lot of people could tear this post to shreds, but you know what? Education is not working right now and the only thing we seem to be able to do is to churn out young people by the thousands that have no real skills and start out saddled with debt at unreasonable rates that cannot be erased.
P.S - I would gladly pay a 5% tax rate on all good, services, and income if I KNEW it went straight into the education system in a way that it could not be diverted to anything else like SS has been in the past. At some point I might be retired and will have to rely on all those stupid young people for 20-40 years not to fuck things up too much till I die. The last thing I want to be is 75 in a grocery store being told by a 19 year old that they can't give me change because the machine is, "like all broke or something", while the cash tray is open and all they have to do is reach in and grab it. Oh wait... that was last week. Of course there are the good days too. When another young person get's handed a 100 dollar bill to pay for something and I get handed back 160 dollars as change. Of course I sweetly pointed out that she should check her math again and she blushed and said thank you. I wish I was kidding about those two incidents. Sadly I am not.
Parent
Re:All mine were cheap! (Score:5, Interesting)
Higher education isn't free for several reasons.
First, kids don't value free stuff, but they'll take it anyway. University is already "13th grade" to many people, and by telling kids that they can shirk responsibility and stay in high school as long as they want without paying for it is just crazy. Who wouldn't want to live the college life as long as possible? It's certainly a lot less stressful than "the real world." The only thing saving college from the unmitigated mediocrity of high school is the fact that they know they'll eventually pay for this lifestyle (or their parents are on their case because *they're* already paying for it.)
Second, it isn't required for survival. Many people get along just fine without college degrees, and indeed, don't need them in their day to day lives.
Third, it increases the number of people staying because of the Mom and Dad factor. I'm of the opinion that even the upper grades of *high school* are a waste on a significant number of people, because they simply don't care and are only there because they "have to be." Yes, they could theoretically drop out at 16, but Mom and Dad won't hear of it because they're convinced that little Johnny is throwing away his opportunity to become President one day. The fact that Johnny harbors an *active disdain* for the idea of school and learning in general doesn't ever seem to sink in.
The fact that people pay for University and take on a certain amount of risk means that people have to *think about it* before going or sending their kids. Do they really want to do it? Are they willing to put in the work necessary? How long are they willing to pay for it? Maybe in other countries the culture is different, but I fear in America, the disdain for learning that I observed during my time, and continue to observe in kids today, guarantees that government funding of higher education will be nothing more than another money sink with no tangible benefit. Scholarships, grants, and tuition assistance exist for a reason. Let them pick the people who are qualified for the privilege.
Parent
It's cheap compared to India... (Score:4, Informative)
In India, student loans are 12% compound interest; while the borrowing rate in good banks is as high as 7.5% compunded quarterly.Money makes the world go round...
Re:It's cheap compared to India... (Score:4, Informative)
But in India, education is also highly subsidized and in a lot of universities, the fee structure is merit-based (i.e. your ranking in your entrance examinations determine which stratum you fall under).
Parent
Experience from academia (Score:5, Insightful)
I worked at a mid size private university in the midwest and tuition rates were astronomical ($30k for undergrad). I think the loans are one thing but tuition rates are a larger issue. I wondered how they stayed in business especially these days.
Re:Experience from academia (Score:5, Insightful)
tuition prices are so high because kids keep getting approved for loans. I imagine schools might someday see the same thing the housing market has recently if the prices keep going up faster than inflation [miamiherald.com]. Can't sustain that forever.
Parent
Re:Experience from academia (Score:5, Insightful)
No, they're high because it's a service where productivity can't increase very much.
Rubbish. Folks like you cry we need to spend more money on education, so we give state universities more money, and they blow it on administrators or programs that are ancillary to actually putting useful knowledge into someone's head.
Your argument is only an argument for tuition prices tracking with inflation- but they've been rising at double the inflation rate.
If your state's making money at its institutions, please have them contact mine so we can resolve our huge current deficit.
It's not a matter of profit, it's a matter of finding new and creative ways to blow taxpayer and tuition money on expenses arguably, vaguely related to education.
State universities don't spend money efficiently because they don't have to. There are too many idealists out there who think that pouring money into the universities guarantees getting better results out. This isn't the case.
State Universities are run by mortal men and women, who make the same mistakes and misteps as the rest of us. The letters after their names simply indicate the possession of specialized knowledge, which is entirely unrelated to the efficient operation of a university.
Parent
Re:Experience from academia (Score:5, Insightful)
Parent
Skilled trades are not morons (Score:5, Informative)
There's a vast difference between the skilled tradesman and what you call morons. Give me a licensed master plumber, master electrician, mechanical contractor, etc and I'll show you someone that truly understands their field and has years of experience under their belt. Sure the variety of assistants range in ability like any job, but to label the actual skilled person as a moron shows you don't understand the field. That'd be like comparing someone who flips burgers to a skilled chef. Also the skilled trades are very strongly union in every major city, unions being one of the strongest backers of the Democrats.
As for continuing education much of the green movement is powered by installation of ultra high efficiency equipments. Pull up a wiring schematic for a 96% boiler and the various pumps and zone valves - it's anything but moronic work.
So what's up with the trades bashing? Watch a few episodes of Dirty Jobs and you'll see some examples of problem solving at the finest.
Parent
Typo in summary: detectability vs deductibility (Score:5, Informative)
Re:Typo in summary: detectability vs deductibility (Score:5, Interesting)
Last time I checked, student loan interest is deductible... I don't know what more of a handout this guy needs.
YOU SIGNED THE PAPERWORK, YOU HAVE NO ONE ELSE TO BLAME, YOU COULD HAVE GONE TO A CHEAPER SCHOOL.
Parent
Hmm.. must be some difference (Score:5, Informative)
The rate for a 30-year mortgage is around 5%,' Lee said. 'Why should anyone have to pay 8.5%?
Because if you default on the mortgage, they can take your house. Education repossession technology is still in beta. Even when it works it and rarely returns anything of value.
Re:Hmm.. must be some difference (Score:4, Insightful)
And when you default on the student loans your wages and other income gets garnished. That renders your point moot.
Provided that you have an income. If someone is defaulting on hist student loan (and given the generous forbearance and other options before the dishonorable default), what makes you think he actually still has his job?
If someone has a mortgage, then unless he's done something illegal he does have a house that can be repossessed—it may be worth less than the mortgage, but it's still something, unlike with education.
Parent
Student Loan Forgiveness Plan (Score:5, Informative)
Pay your loan for 10 years... and the government will excuse the rest.
Some restrictions apply...
http://www.nextstudent.com/articles/student-loans-forgiven.asp [nextstudent.com]
Re:Student Loan Forgiveness Plan (Score:5, Funny)
You are one what? You are a federal government? Or you are a loan forgiveness program?
Parent
Tough Shit. (Score:5, Insightful)
Re:Tough Shit. (Score:4, Insightful)
Yes, but did they understand what the papers they signed meant, before they took the accounting classes?
Students are a gullible group.. if the banks convince them they need an 8% student loan, because for some reason they "are a poor credit risk", then the students who don't have the education yet are likely to sign, not even realizing there may be a possibility of finding another deal (or maybe there's not another option).
The claim students are a poor credit risk is one of the strangest... with a debt that cannot be discharged in bankruptcy, has no statute of limitations, has a government guarantee behind it, including an ability to garnish wages, and these people taking out student loans are generally young people....
It seems like student loan debt is less of a credit risk than most other types of even secured debt.
I declare that: "students are a credit-unworthy lot who should thank their lucky stars that rates aren't 12% or higher."
Is basically nonsense.
It makes no more sense than saying "30 year olds are an uncreditworthy lot."
It's credit history that relates to creditworthiness, not being a student or not.
Parent
That's a rip off (Score:4, Interesting)
Real world loans are going to really freak you out (Score:5, Informative)
There are two general type of student loans: direct and non-direct with a dirt cheap and a cheap interest rate. 8.5% is cheap for an UNSECURED loan that doesn't START accumulating interest until AFTER you graduate (actually Govt pays interest till you graduate).
Dude- you got $85K with ZERO collateral. The rate is NOT unreasonable. It is the best investment you can make for your future.
You can always become a teacher in the inner city or work 2 years for Peace Corps or any of the other methods the government has setup for most or all of your loan to be FORGIVEN.
Stop complaining about getting cheap money with no collateral and no limitation, except that you go to school.
Parent
Barking up the wronf tree. (Score:5, Insightful)
Mortgages and car loans are secured loans, where the property or car that is bought with them is pledged as collateral. This makes a big difference for the interest rates. Student loans just ain't so.
Anyway, I've heard complaints like this about student loan rates before, and I've always had the same basic response: you're barking up the wrong tree. You don't really want lower interest rates on student loans; you want the government to spend more on making higher education affordable for those who qualify for it. There's a bunch of countries out there where if you get admitted into a university, the government picks up the tuition bill, period. Those countries ain't richer than the USA.
Grad student with huge loans (Score:4, Interesting)
Re:Grad student with huge loans (Score:4, Informative)
Parent
Re:Grad student with huge loans (Score:5, Informative)
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credit-unworthy or just greedy? (Score:5, Insightful)
If students are a "credit-unworthy lot" then limit the amounts they can borrow or make it a fixed amount that they must repay. Charging a higher interest rate for "credit-unworthy" people makes it more likely that they'll default, making it a self-fulfilling prophecy. This holds true for all borrowers.
not the real problem (Score:4, Interesting)
The problem isn't finding a new fangled way for college student to be able to pay the enormous costs of college, it is to find ways to educate them more cheaply tha nwe do now. Online learning, competition, utilisation of open source textbooks... Be creative.
Restating the problem (Score:5, Interesting)
I'm from the UK, and just recently I've been reflecting on the things that I took for granted in the UK that are pay-for over here in the USA. Don't get me wrong, I love living here, I've just married an USAsian who's simply wonderful, but there are things I miss...
Primarily of course, is universal healthcare. The NHS is so far and away better than the situation we have here in the US that it's just not funny. Leaving that argument aside, the other major thing is education. My new wife and I were thinking about where any future offspring might be educated...
If the USA stays the same course as it's currently on, I think my children (as UK citizens by birthright) may be going to the UK for their education. It's a lot cheaper, it'll broaden their minds by travelling, and the quality is generally very high.
Oh how things have changed. I no longer think of the USA as being the gold-standard of higher education. Now I think of it as being just a way of transferring money from rich people to educated people.
As it happens, my wife paid off her student loans (for a JD/MBA) this evening (well, they'll settle on Tuesday). For the cost she just paid, we could buy a small house in the UK. The only debt higher is our mortgage, and living in a nice house in a nice part of the Bay area, that's expected.
I didn't pay for my education (although these days if you don't go to Scotland you pay something in the UK - it's a *lot* less than over here in the US though). I gave the UK about 10 years of higher taxes as a result - probably less than they were expecting - but moved to the USA for the nicer weather
Simon.
I hate to break this to you (Score:5, Interesting)
If I didn't care about the state of play in the USA, I'd just up and leave, taking my family and my considerable yearly tax burden with me. I choose to stay and try to influence people as I can...
FWIW, my uncle was recently diagnosed with a heart problem back in the UK, he was in hospital the same day, operated on within 2 days and back home 2 days later. The only real down-side was that he couldn't attend the wedding because of the US insurance costs.
And two weeks before the wedding, my mother was diagnosed with breast cancer. She opted to put off the operation-date offered (1 week after diagnosis) and wait until after the wedding. Since then she's been back and had her operation.
My family is not rich. My father worked on the docks, my mother had a variety of part-time jobs through her life. Excellent, timely medical care is something she (and I, until I moved to the USA) take for granted, without any "recission", or "previously established medical condition" nonsense. If you're sick, see a doctor. Get better with as much or as little help as necessary. No co-payments. No payments (at the point of treatment) at all, and if you need heart surgery or extensive (5 years chemotherapy is being talked about for my mother) treatment, there's no questions asked...
There's no way my family could have afforded the medical insurance that would be equivalent to the care that my mother and uncle have just received. They of course don't consider this to be anything special, it's only when you don't have something any more, that you miss it. Similarly, I don't think americans miss it because frankly they've never experienced it. They just keep on telling themselves they have "the best healthcare system in the world", which (IMHO) is only true for the minority of rich americans that don't really need the insurance companies anyway...
Simon
Parent
Nothing like starting life $100K in the hole (Score:4, Interesting)
The government has bailed out homeowners. It's bailed out big businesses. Why can't it also help students?'
To me this is a tragedy. Young people starting off almost $100K in the hole. I had student loans, so did my wife. Together they didn't add up to $40K and she went to grad school.
On a higher level this kills entrepreneurial opportunities at the time in life you have the most desire, creativity and energy to launch a new business. Many of you are stuck in low-paying, dead end jobs because of student loans...one of the reasons some companies like to hire right out of college. Student loans and health insurance. Wouldn't it be better to turn all that creativity loose developing new businesses and jobs? But how can you saddled with all that debt and no health care coverage?
We have to do something, not just for people in college now but those recently graduating into 9.5% unemployment. Whatever that is, it has to include cost controls on education. The cost of education is running way ahead of inflation and textbook companies are worse than the mafia (at least the mob runs prostitutes). This is crazy.
But what to do about it? If the government tried some kind of forgiveness program, Republicans would scream about budget deficits. Student loans are also a giant bank pork program and you can see what kind clout they have in Washington. So, it's got to be paid for somehow, deficit neutral, combined with cost controls on education and everyone on both sides of the political pork barrel have to STFU long enough to get it done.
I wonder why you're not considered credit-worthy? (Score:5, Informative)
Maybe it's because you're borrowing over 80,000 dollars for a college education.
5 minutes with a spreadsheet would tell you how much and for how long you have just screwed yourself, and by borrowing that kind of money you prove that you can't or won't spend even that much effort to think before borrowing.
I think part of the problem is cultural: I was broke back when I went to college, and I needed loans; but I also knew that you should never borrow anywhere near enough to pay your whole tuition bill. That's far too much money to borrow even if you aren't dead broke. Poverty forces you into indebtedness, but it also makes you paranoid about accumulated debt, and you understand that something that costs tens of thousands of dollars will require you to eat Ramen, work multiple jobs, and make affordable choices even if someone will extend you credit.
But now I hear horror stories about students who borrow enough money to buy a house in much of the USA, and use that to pay for an entire four-year degree plus graduate school. It's like the kids don't understand that they're poor; they get a credit line and stop acting like people who have to work for a living.
What do you expect? (Score:5, Insightful)
I was the oldest child of a middle class family of 3. I applied to 2 public and 3 private universities and was accepted to all of them, but with minimal financial aid. I chose to attend a nearby public university that offered a quality education that cost approximately $10,000/year in the late 90's.
Why did I make this choice?
- I could afford to finance about 75% of tuition via savings that my parents had set aside for me.
- I worked various jobs while in school, eventually hitting $15-17/hr, which more than covered the remaining tuition & expenses.
- I didn't want to screw my siblings out of an education or force my parents into debt. In the end, I was able to leave about $4,000 of my parent's savings for my brother or sister.
I have friends who are teachers who decided that they needed to attend small, private New England colleges with tuition and expenses over 350% more than my education. One of those friends and his wife makes $120k combined teaching, but after years of deferments owes over $300,000 a decade after graduation (not including graduate work form a private school which would have been FREE had they gone to the state university) -- my friend and his wife can barely afford rent, and will likely become homeowners when they inherit a house when one of their parents pass.
People don't need bailouts, they need to live within their means and not assume that they are entitled to a specific lifestyle or type of job due to the circumstances of their birth. If you can't afford four years of college, borrow money to go to trade school and work as a plumber, HVAC, electrician, etc. If you really want to go to college, you'll be able to earn the money to do so.
Why are mortgages 5% and education loans 8.5%? (Score:5, Insightful)
Because you can't foreclose on someone's education. Next question.
Waaa, Waaa, frikin' WAAAAA! (Score:5, Interesting)
A college education was never meant to be a guarantee of future financial stability, especially in the short term. We need to get away from this pervasive mentality of "Things didn't go exactly according to the PLAN. The Government needs to save me!!!! WAAAAAAAA".
Of course it sucks trying to find a job in the current market, and I sympathise as I'm currently looking for my next job as I'm going to graduate soon. However, that doesn't mean that the federal government, who already bent over backward in order to help me get the loans I needed in order to persue my education, should be expected to further subsidize me into my 30's. Grow a friggin' pair, and if necessary get a job working at McD's and rent the shittiest appartment you can find to make ends meet. This sense of entitlement to an easy life, simpy because you are college educated is assinine and juvenile. The education is supposed to give you more skills, based on the idea that more skills make you more valuable. However, if you pursue a degree in which those skills are next to useless (I'm looking at you art history majors), or one in which the market is oversatturated, well then you were an idiot and deserve to suffer a little for your stupidity. That doesn't mean that you should be able to get your education for free, just because it took you a little while to find a job.
We need to stop supporting those that have made stupid decisions or else they'll never learn that there are consequences for their actions. I learned that in middle school, my older brother took until after high school, and apparently some have failed to learn the lesson despite being 22 (Bachelors), 24-28 (Graduate Degree), or even older 50-60 (Corporate CEO's that ran their companies into the ground). Maybe I'm just an insensitive clod, but not everyone can be happy all of the time. A little hardship can build character, just as our grandparents.
There are nowhere near as many people suffering as there were in the great depression, all the "Worst recession since the depression" hyperbole aside. If the current hardships mean that it takes you an extra 10 years to buy a house, or that you have to settle for something less than a McMansion I'm not going to be losing any sleep over it. I will probably lose more than a little over my own financial problems, but they are MY PROBLEMS and not the governments. A little more personal accountability on behalf of most Americans would go a long way to improving our collective condition.
Re:tuition is insane. (Score:4, Insightful)
Grow up, go to state college, get a job.
The government subsidy on college loans is being able to get a loan in the first place. How else can you get a loan for $30-60k (or more) as an 18 year old with no credit history, no job, and no skills! You're an idiot to place yourself in that much debt with a very clear understanding of the terms and a strong plan on how exactly you're going to pay them off. The job market is weak right now, but companies are still hiring - go train yourself up and find one.
If you can live cheap you should be able to pay off state college as you go. If you do Co-ops or internships all the way through you can pay a quarter work a quarter and graduate with no debt and a better chance of getting a full time job when you get out.
Someone (god only knows why) decided that simply because you wanted to go to college you were worth tens of thousands of dollars at honestly a really low interest rate, compared to if you wanted that money to do anything else (go try to get a signature loan for ten grand from a bank and see what interest they give you, if they don't laugh in your face).
You got yourself in debt and you alone. If you decided to spend that money you acquired on something that isn't going to allow you to pay it back, it's nobody's fault but your own.
Nearly 50% of all fortune 100 CEO's graduated from a state university. There's no reason to think you need any better if you can't afford it.
Parent
Re:Education should be a national right and pride (Score:5, Insightful)
Your conclusion fails to follow from your premise. Paying for someone's degree in Advanced Featherbedding just because they want on does little for the nation but produce yet another idiot with a meaningless degree and a sense of entitlement.
A nice soundbite, but nothing else.
Personally, I think a system that makes people work to pay for their education works just fine. It sorts out the those with the skills and dedication to obtain an advanced education from those without - the same skills and dedication they will hopefully employ in whatever career that education prepares them for.
Parent
Re:As a college student (Score:5, Insightful)
Spoken like someone who cant think beyond their own pocket.
Because proper education systems increase your wealth as well, the same as proper health systems benefit your health as well. Let me ask you this, would you rather have a nation full of highly educated white collar workers or a nation full of barely educated blue collar slobs barely able to swing a hammer?
Well the white collar workers of course, you cannot compete with the third world on manufacturing whilst maintaining a first world economy. Now if education is difficult to afford then you will end up with a large section of your workforce earning low wages, low wages means that their contributions to tax will also be low as well as the amount of money they have to spend or invest. This means that YOU as the middle class will contribute MORE in tax to maintain the same quality of life or YOU will have to accept a LESS fortunate lifestyle.
If you have more highly educated workers you can attract and create high tech industries which pay higher wages and thus contribute more in tax. This means the as a net result of more people paying more tax YOU pay less tax over all. YOU also benefit from OTHERS spending more disposable income or INVESTING that income which in turn creates more wealth and REDUCES the tax burden on INDIVIDUALS.
I suggest you look at HECS [wikipedia.org], a scheme created by the Australian Federal Government which covers the cost of tertiary education for Australians. This is in turn paid back as it is factored into the amount of tax a receiver of HECS pays (I.E. you pay only for the HECS that you have used) at the end of each financial year. In effect the government extends a near zero interest loan with a flexible amortisation schedule, so the tax taken from mr to pay HECS gets returned in full later in life via a reduction in taxes and economic benefits. It's almost like, well like an investment and an investment that has been working for Australia for the last 20 years.
Parent