Student (College) Loans

[StuM]

I am late to this thread. I have a hard time with loan forgiveness.  I know parents that sacrificed greatly to get their kids through college with no debt.  It just seems unfair to me that others who are less fiscally responsible get a pass.

this will not help those with current debt but we need to start linking maximum student loans to a valid expectation of earning potential for a specific degree. This would mean one of two things need to happen.

1) colleges need to lower the cost for low value degrees or 2) students need to cover the additional cost out of their pocket.

I was told by one person that #1 would never happen because that would mean paying different professors different rates and that was not fair to the professors.  I disagree, pay for value received is 100% fair.

As for #2, it would force students to consider cost-benefit when making choices which is a good thing.

[saevel25]

18 minutes ago, StuM said:

I am late to this thread. I have a hard time with loan forgiveness.  I know parents that sacrificed greatly to get their kids through college with no debt.  It just seems unfair to me that others who are less fiscally responsible get a pass.

I understand this thought, but also, not every situation for everyone is the same. Not saying this logic is wrong, but to me, it is more complicated than this. Also, this doesn't mean I support the decision made. 

20 minutes ago, StuM said:

I was told by one person that #1 would never happen because that would mean paying different professors different rates and that was not fair to the professors.  I disagree, pay for value received is 100% fair.

The issue with college is not the professors salaries, but the administration bloat. 

Colleges could slim down, but let's say 20% of the administrative jobs would need to be cut. Lets say a professor makes $100K a year? That tuition could be covered by 3-4 students yearly tuition at some schools. Lets say that professor teaches 35 students. Like, where does the remaining 30xtuition money go? 

 

[StuM]

24 minutes ago, saevel25 said:

I understand this thought, but also, not every situation for everyone is the same. Not saying this logic is wrong, but to me, it is more complicated than this. Also, this doesn't mean I support the decision made. 

The issue with college is not the professors salaries, but the administration bloat. 

Colleges could slim down, but let's say 20% of the administrative jobs would need to be cut. Lets say a professor makes $100K a year? That tuition could be covered by 3-4 students yearly tuition at some schools. Lets say that professor teaches 35 students. Like, where does the remaining 30xtuition money go? 

 

I agree, as with any organization bureaucratic bloat should be the first area to cut costs.

my two points are;

1) should not lend more than is reasonable to expect to be repaid based on realistic expectations of the degree.  If a student chooses to pay more, their choice, but tax payers should not be on the hook.

2) I know people that sacrificed vacations, large houses, building retirement savings, etc. so their children could be debt free.  I am not in favor of the fiscally irresponsible being bailed out at taxpayer expense.

I would support loan modification, reclassifying excessive interest charges as principal, extend loan terms to reduce payment. Etc

[Vinsk]

As I may have mentioned before somewhere, I cannot even discuss this topic as it’s just too devastatingly infuriating and painful, but what many don’t realize is the downright criminal practices; lying, deceiving and harassment that’s been done by some of these loan corporations. It’s me vs a multi-billion dollar corporation and I have no chance. 
Being that I’ve paid back every penny I borrowed plus a significant amount more, You’re damn right I deserve forgiveness. It’s one thing to just be financially irresponsible but to be hoodwinked and deceived with threats of revoking our licenses, that’s another.

We’ve had to make laws requiring people to wear seatbelts and helmets but we expect 19 year olds to thoroughly understand the intricacies of private and federal loan systems.

In my case it’s like blaming a rape victim for dressing provocatively. 

[StuM]

43 minutes ago, Vinsk said:

As I may have mentioned before somewhere, I cannot even discuss this topic as it’s just too devastatingly infuriating and painful, but what many don’t realize is the downright criminal practices; lying, deceiving and harassment that’s been done by some of these loan corporations. It’s me vs a multi-billion dollar corporation and I have no chance. 
Being that I’ve paid back every penny I borrowed plus a significant amount more, You’re damn right I deserve forgiveness. It’s one thing to just be financially irresponsible but to be hoodwinked and deceived with threats of revoking our licenses, that’s another.

We’ve had to make laws requiring people to wear seatbelts and helmets but we expect 19 year olds to thoroughly understand the intricacies of private and federal loan systems.

In my case it’s like blaming a rape victim for dressing provocatively. 

Predatory loan practices are wrong and for that the lender should take accountability for.  

[Vinsk]

Just now, StuM said:

Predatory loan practices are wrong and for that the lender should take accountability for.  

Absolutely. Unfortunately they’re essentially unregulated and powerful. 

[StuM]

1 hour ago, Vinsk said:

Absolutely. Unfortunately they’re essentially unregulated and powerful. 

A few points:

1) very sorry you were victimized by a predatory lender. I would not wish that on anybody.

2) I respect you for sacrificing to pay it off.

now the parts you may not like:

3) since you paid you loan in full you will not get any forgiveness.

4) taxpayers funding loan forgiveness actually helps the predators by paying them off and allowing them to benefit from thief bad deeds.  

I am not saying a problem does not exist, just that I do not feel the current solution is the correct solution.

[Vinsk]

2 hours ago, StuM said:

3) since you paid you loan in full you will not get any forgiveness.

Oh no, not at all have I done that. I mean I’ve paid back the amount I borrowed plus a significant amount more. But the criminal changes of loan holders and interest rates have made it impossible to ever pay them off. I pay over $6,000/month just to keep them from defaulting….And of course they base your monthly payment on your gross income which makes absolutely no sense at all.

[SemperFi]

If your acknowledging that the price of college is a problem, then doing nothing about it is kinda stupid.  This will only make Colleges raise tuition higher.  They should tax the endowment money and use that to give to needy students.

 

 

[StuM]

1 hour ago, Vinsk said:

Oh no, not at all have I done that. I mean I’ve paid back the amount I borrowed plus a significant amount more. But the criminal changes of loan holders and interest rates have made it impossible to ever pay them off. I pay over $6,000/month just to keep them from defaulting….And of course they base your monthly payment on your gross income which makes absolutely no sense at all.

Sorry, I misinterpreted you post when you said you “paid back all you owed plus a significant amount more”.  I do not know your situation but it sounds as if you got screwed over.  Sad thing ifs if paying $6000 per month forgiving $10,000 is probably not going to help much.

I agree there is a problem and would like a better solution.

9 minutes ago, SemperFi said:

If your acknowledging that the price of college is a problem, then doing nothing about it is kinda stupid.  This will only make Colleges raise tuition higher.  They should tax the endowment money and use that to give to needy students.

 

 

Most endowments do spend earnings to help students thus taxing them is not going to increase funds to students. It will add a layer of government involvement that seldom helps.

Edited August 27, 2022 by StuM
Fixed typo

[Hohjoe]

10 hours ago, StuM said:

2) I know people that sacrificed vacations, large houses, building retirement savings, etc. so their children could be debt free.  I am not in favor of the fiscally irresponsible being bailed out at taxpayer expense.

 

You can add me to that list. And it was a great sacrifice for my daughter and I do not regret it even a tiny bit.

The irony is now both my daughter and, I as tax payers, now have student loans.

[TourSpoon]

My wife took out a federal student loan for her bachelor's degree with the understanding that after 10 years of public service it would be forgiven. She did her 10 years only to find out that the federal loan was sold to a private company and she no longer qualified for this benefit (through no fault of her own). A few years ago a program came out to remediate this issue and she was able to refinance her balance to a federal loan and it was forgiven under the program she initially was signed up for. While she was able to get some forgiveness, she really got screwed on the interest. 

 

[Shindig]

On 8/27/2022 at 5:34 AM, StuM said:

I am late to this thread. I have a hard time with loan forgiveness.  I know parents that sacrificed greatly to get their kids through college with no debt.  It just seems unfair to me that others who are less fiscally responsible get a pass.

this will not help those with current debt but we need to start linking maximum student loans to a valid expectation of earning potential for a specific degree. This would mean one of two things need to happen.

1) colleges need to lower the cost for low value degrees or 2) students need to cover the additional cost out of their pocket.

I was told by one person that #1 would never happen because that would mean paying different professors different rates and that was not fair to the professors.  I disagree, pay for value received is 100% fair.

As for #2, it would force students to consider cost-benefit when making choices which is a good thing.

I have been faculty at a few universities in my career.  Now, this is a small sample size, but at each of them, pay is different by field.  I think that's a common practice.  Part of that is market driven.  At my first university teaching job, there was an attempt (not by me) to unionize lecturers, and the organizers planned to demand a particular pay scale for all lecturers, regardless of field.  They ultimately left engineering (and a few other disciplines) out of the voting (and would have left them out of the representation, had it resulted in a union) because the amount they were demanding would have been a significant pay cut.  There was zero chance the unionization would have passed if the plan was to represent all lecturers -- all of STEM would have voted en masse against it.

On 8/27/2022 at 6:00 AM, saevel25 said:

I understand this thought, but also, not every situation for everyone is the same. Not saying this logic is wrong, but to me, it is more complicated than this. Also, this doesn't mean I support the decision made. 

The issue with college is not the professors salaries, but the administration bloat. 

Colleges could slim down, but let's say 20% of the administrative jobs would need to be cut. Lets say a professor makes $100K a year? That tuition could be covered by 3-4 students yearly tuition at some schools. Lets say that professor teaches 35 students. Like, where does the remaining 30xtuition money go? 

My understanding is that professor salaries are a small fraction of the university budget.  I don't know that for sure.  I am certainly seeing a small portion of this.  I'm also not entirely tuned into what my students are paying for tuition, but I have over three hundred undergraduates for the upcoming Fall term.   I am also teaching a class of graduate students (with far fewer students).  Then again, tuition for students who take my class isn't the entirety of money I bring in for the university -- they take a cut of any grants I bring in, which I believe goes towards overhead, as there are plenty of university employees who aren't the ones teaching classes.  This is, of course, true at K-12 schools also:  there's a principal and so on.

I also don't know what fraction of university income the tuition covers.  Other university income includes overhead from faculty grants (certainly at any R1 university), earnings from endowments and alumni donations.

On 8/27/2022 at 7:48 AM, Vinsk said:

As I may have mentioned before somewhere, I cannot even discuss this topic as it’s just too devastatingly infuriating and painful, but what many don’t realize is the downright criminal practices; lying, deceiving and harassment that’s been done by some of these loan corporations. It’s me vs a multi-billion dollar corporation and I have no chance. 
Being that I’ve paid back every penny I borrowed plus a significant amount more, You’re damn right I deserve forgiveness. It’s one thing to just be financially irresponsible but to be hoodwinked and deceived with threats of revoking our licenses, that’s another.

We’ve had to make laws requiring people to wear seatbelts and helmets but we expect 19 year olds to thoroughly understand the intricacies of private and federal loan systems.

In my case it’s like blaming a rape victim for dressing provocatively. 

Thank you for bringing this up.  There are some horribly predatory practices involved with issuing student loans.  I would love some reform that pushed some responsibility onto the lenders to ensure that they're making a good investment -- the current setup discourages that sort of thing.  When you buy a house, the bank doesn't give you a mortgage blindly -- even if you have no negative marks on your credit, they're going to appraise the house to figure out if what you're paying is reasonable for the value of the house.  Then again, you can't repossess an education.  

And I really wonder why anyone thinks it's reasonable for the general teenager / early 20s population to make such decisions.  I wonder how I made decisions at those ages.  I'm not going to sit here and pretend that I was among the better decision makers in my age bracket, but I certainly wasn't the worst. 

[Double Mocha Man]

12 minutes ago, Shindig said:

I have been faculty at a few universities in my career.  Now, this is a small sample size, but at each of them, pay is different by field.  I think that's a common practice.  Part of that is market driven. 

I have had a few professors who were phoning it in and should have been making minimum wage.  And maybe leave out a tip jar.  But for the most part, over my 7.5 years of being a professional student, all my professors were excellent and probably should have been making more.

[StuM]

People seem to be keying into my comment about prof. Salaries but that was more a side comment.  The point I want to make is that student loan amounts should be tied to a reasonable expectation of earning potential for a degree program.  For example, a medical degree would allow for higher loan amounts than a degree in a lower paying field such as the often mentioned “Under Water Basket Weaving”.

if expected earnings are @ $50,000 per year than do not lend as much as for a degree with expected earnings over $100,000 which would not be as much as for a degree with expected earnings of $300,000.

There needs to be a realistic expectation of being able to repay the loan.  

[iacas]

14 minutes ago, StuM said:

There needs to be a realistic expectation of being able to repay the loan.  

Except… that there doesn't, because student loans are one of the few types of loans that don't go away in bankruptcy. So banks LOVE to give them out, love to buy them from others, etc. And who takes them? 18-year-old optimistic college kids who don't understand what having to make a $1500/month payment or even a $500/month payment can mean when you're 22 and just out of school with a really lame degree and poor prospects.

[jshots]

4 minutes ago, iacas said:

Except… that there doesn't, because student loans are one of the few types of loans that don't go away in bankruptcy. So banks LOVE to give them out, love to buy them from others, etc. And who takes them? 18-year-old optimistic college kids who don't understand what having to make a $1500/month payment or even a $500/month payment can mean when you're 22 and just out of school with a really lame degree and poor prospects.

Generations raised to think 4 years of education after high school is the only way to be successful, encouraged to take that route regardless of cost. Compound that with a lack of financial literacy +

Government guarantees students will get loans

=

Schools jack up prices and make a killing

 

The government caused this stupid thing and schools and loan companies took advantage. They should pay for it, but we know that is never gonna happen. Wiping debt is a bad solution, but that US government is really good at bad solutions.

I think the long term solution  -  society needs to quit putting school on a pedestal. Education is absolutely important, but we don't need these schools to provide it. There are so many ways to get educated, and hopefully people and companies start embracing those. I see it shifting a lot as a software engineer, and I think other fields can do the same thing. 

[jmanbooyaa]

8 minutes ago, iacas said:

Except… that there doesn't, because student loans are one of the few types of loans that don't go away in bankruptcy. So banks LOVE to give them out, love to buy them from others, etc. And who takes them? 18-year-old optimistic college kids who don't understand what having to make a $1500/month payment or even a $500/month payment can mean when you're 22 and just out of school with a really lame degree and poor prospects.

That is a correct statement. However I cannot agree with student debt forgiveness at the expense of the tax  payer. College reform is needed as we all know there is no guarantee of employment post college. Tuition for some of these colleges are outrageous and sadly there are too many who come out of said colleges no more informed than before but saddled with income crushing debt. Shit you have to pass a road test to drive, maybe some type of course should be needed to take out a student loan.