Author Topic: "Student loans aren't always for school"  (Read 10913 times)

SisterX

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"Student loans aren't always for school"
« on: March 03, 2014, 12:56:39 PM »
From Yahoo:
http://finance.yahoo.com/news/student-loans-entice-borrowers-more-002100614.html

A few highlights:
"Take Ray Selent, a 30-year-old former retail clerk in Fort Lauderdale, Fla. He was unemployed in 2012 when he enrolled as a part-time student at Broward County's community college. That allowed him to borrow thousands of dollars to pay rent to his mother, cover his cellphone bill and catch the occasional movie."

"The report also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time."

"Mr. Selent, of Fort Lauderdale, knows he is getting himself deeper in a hole but prefers that to the alternative of making minimum wage. In his 20s, he earned a bachelor's degree in communications from a local for-profit school but couldn't find a job in the field after graduating and began falling behind on his student-loan bills. He is now taking courses for a degree in theater so he can become an actor."

It's inconceivable stupidity.

Self-employed-swami

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Re: "Student loans aren't always for school"
« Reply #1 on: March 03, 2014, 12:58:57 PM »
Wow

:o

soccerluvof4

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Re: "Student loans aren't always for school"
« Reply #2 on: March 03, 2014, 01:10:58 PM »
Thats stealing and he should suffer the consequences in my book. There are always rule breakers. Geez

wakkowarner

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Re: "Student loans aren't always for school"
« Reply #3 on: March 03, 2014, 01:16:02 PM »
Student loan debt is also a lot harder to get rid of compared to other debt.

Had a friend recently who took out a student loan to try paying for IVF.  Unfortunately she didn't get pregnant.  The thing is, there are businesses out there that will loan you money for IVF (though for my family's IVF we paid in cash).  These businesses even offer up insurance so that you don't have to pay the money back if you don't get pregnant. 

ScienceSexSavings

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Re: "Student loans aren't always for school"
« Reply #4 on: March 03, 2014, 01:33:29 PM »
I love the communications major who couldn't get a job and decided to become an actor.

Undecided

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Re: "Student loans aren't always for school"
« Reply #5 on: March 03, 2014, 01:36:49 PM »
I love the communications major who couldn't get a job and decided to become an actor.

Do what you love. Follow your passion.

Beaker

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Re: "Student loans aren't always for school"
« Reply #6 on: March 03, 2014, 01:43:21 PM »
I love the communications major who couldn't get a job and decided to become an actor.

Do what you love. Follow your passion.

So apparently his passions are talking, being unemployed, and accumulating debt.

the fixer

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Re: "Student loans aren't always for school"
« Reply #7 on: March 03, 2014, 01:51:53 PM »
I also find that to be ridiculous, especially since he claims to be going back to school to avoid minimum wage work. That suggests he cares about how much he makes per hour, so money is a factor in his decision-making. In that case, acting is a double-whammy bad idea: employment is highly competitive, and you still have to take a bunch of low-wage work waiting tables and such to get by until you "get discovered."

If that guy has a communications degree, he should learn to be a project manager or something. They're in high demand.

I understand wanting to follow a passion, but taking out debt to do it is a really bad idea. That's going to saddle him with a requirement to earn all that money he's spending now at a later date.

MsSindy

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Re: "Student loans aren't always for school"
« Reply #8 on: March 04, 2014, 07:58:46 AM »
Yeah, he's pretty much screwed for the next bulk part of his life.....even if he wises up later.

Jamesqf

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Re: "Student loans aren't always for school"
« Reply #9 on: March 04, 2014, 12:42:12 PM »
In that case, acting is a double-whammy bad idea: employment is highly competitive, and you still have to take a bunch of low-wage work waiting tables and such to get by until you "get discovered."

Yeah.  I think any honest acting school would have a required first year course on how to be a good waitperson :-)

No Name Guy

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Re: "Student loans aren't always for school"
« Reply #10 on: March 04, 2014, 12:48:18 PM »
Quote
Holy shit Batman.....shakes head in a combination of pity and anger, since this person, Ms. Eichengreen, and the others like her, are nothing but willful-out-of-ignorance sponges on a society that refuses to metaphorically face punch them, tell them to suck it up and just work at Wally world or McBurger Flipper.  And talk about an example of moral hazard - who in their right mind, risking their hard earned capital at actual risk of loss, would willingly lend this lady 200k for a FUCKING SOCIAL WORK degree at her age?  I'll tell you.  No one.....except if they know the taxpayer have their back and can't lose, that's who.....or a whiny politician or bureaucrat who is used to pissing away other peoples money that was taken at the point of a gun.  [end rant]

In the case of the posted article - adjust above to say who would willingly risk their hard earned capital at risk of loss for those who show zero or only token progress to marginally useful courses of study?  The same answer - no one....except....

From my post of:
http://www.mrmoneymustache.com/forum/antimustachian-wall-of-shame-and-comedy/yet-another-combination-of-sad-and-foolishness/

This is yet another example of how the taxpayer (who will ultimately foot the bill) is getting screwed for this messed up entire student loan cum make work for education cartel industry.

La Bibliotecaria Feroz

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Re: "Student loans aren't always for school"
« Reply #11 on: March 04, 2014, 01:06:33 PM »
This is particularly scary since my understanding is that student loans can't be discharged through bankruptcy. Like student loan lenders are so cautious and responsible they deserve that?

SisterX

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Re: "Student loans aren't always for school"
« Reply #12 on: March 04, 2014, 01:39:19 PM »
I'm surprised no one has yet commented on the family of five highlighted in the story.  They're using student loans to afford food but the mom is a SAHM.  I'm not insulting SAH parents here (my husband sort of is and I hope to be one myself in a couple of years, at least for a short time) but it's so insanely short-sighted to have one parent not doing anything monetary to contribute to the household (that we know of) while getting deeper and deeper into debt.  I feel so sorry for those kids, who, if they manage to learn from their parents' mistakes, will spend a good portion of their lives bailing out their parents' financial history.  Worst case scenario: no one learns and they all go down in a preventable ball of fiery debt.

Milspecstache

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Re: "Student loans aren't always for school"
« Reply #13 on: March 04, 2014, 07:00:20 PM »
I know a mechanic at my job that took out a bunch of college loans and then dropped out.  Once he got his current job they came and started garnishing his wages...  he was looking for advice but as far as I know, there is no way to avoid the lost wages at this point.

sherr

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Re: "Student loans aren't always for school"
« Reply #14 on: March 05, 2014, 06:58:58 AM »
This is particularly scary since my understanding is that student loans can't be discharged through bankruptcy. Like student loan lenders are so cautious and responsible they deserve that?

That rule is not to benefit the lenders, it's to benefit the students. Student loans used to be dischargable through bankruptcy, and when they were (surprise surprise) a significant number of students would go to school, graduate, immediately declare bankruptcy, and then go on with their lives. It would be even worse of a problem now that tuition is so high.

So if student loans were still dischargable through bankruptcy the only option that lenders would have to remain solvent is to start being more very choosy about who they give loans to. IE, you can only get a loan if you (or your parents, if you can get them to co-sign for you) have seizeable assets equal in value to the amount of the loan. That would limit the giving of student loans to the wealthy, which are the people who need it least.

It really does make sense that student loans should not be discharged in bankruptcy so that we can continue to give loans to the people who need them. It requires though that the student have a bit of personal responsibility, which sadly is a trait that many people seem not to have.
« Last Edit: March 05, 2014, 07:32:01 AM by sherr »

odput

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Re: "Student loans aren't always for school"
« Reply #15 on: March 05, 2014, 07:52:22 AM »

That rule is not to benefit the lenders, it's to benefit the students. Student loans used to be dischargable through bankruptcy, and when they were (surprise surprise) a significant number of students would go to school, graduate, immediately declare bankruptcy, and then go on with their lives. It would be even worse of a problem now that tuition is so high.


Bold mine for emphasis

I can't find the source so unfortunately you'll have to take this at my word, but this was recently reported to be approximately 1% of all student loans, which is much lower than normal delinquency rates for any type of loan.  Also it was discovered that this ~1% was highly concentrated in lawyers and doctors (those who had enormous debts and enough knowledge to beat the system), so they started by making govt loans non-dischargeable for 5 years and from there the lenders lobbies pushed further and further until we arrived today where no student loans govt or private can be discharged.

sherr

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Re: "Student loans aren't always for school"
« Reply #16 on: March 05, 2014, 08:22:43 AM »

That rule is not to benefit the lenders, it's to benefit the students. Student loans used to be dischargable through bankruptcy, and when they were (surprise surprise) a significant number of students would go to school, graduate, immediately declare bankruptcy, and then go on with their lives. It would be even worse of a problem now that tuition is so high.


Bold mine for emphasis

I can't find the source so unfortunately you'll have to take this at my word, but this was recently reported to be approximately 1% of all student loans, which is much lower than normal delinquency rates for any type of loan.  Also it was discovered that this ~1% was highly concentrated in lawyers and doctors (those who had enormous debts and enough knowledge to beat the system), so they started by making govt loans non-dischargeable for 5 years and from there the lenders lobbies pushed further and further until we arrived today where no student loans govt or private can be discharged.

You are ignoring several complicating factors.

1) You are assuming that the percentage of students that declared bankruptcy in 1976 would be the same as the percentage of students declaring bankruptcy today. Keep in mind that 1976 was far far before the internet and in an age where bankruptcy was far less common, so it makes sense that the only people who would have known of the "bankruptcy option" would have been lawyers. Today it would absolutely be common knowledge, and much greater percentage of graduating students would jump at the chance to discharge their enormous student loans with virtually no negative repercussions.

2) You are ignoring the fact that student loans today account for a much higher amount relative to the student's future earnings. You point out that the students in 1976 who had the highest debts (doctors and lawyers) were the most likely to file for bankruptcy. We are all aware that college expenses have risen much faster than inflation or earnings in the last several decades. It is probable that the increased debt load would prompt many people to skip out of loan repayment if they could, where there 1976 counterparts would have repaid it and not bothered with the hassle of bankruptcy (if they even knew about the option).

At the end of the day if you take away the special treatment of student loans then they become just like any other kind of loan. Mortgages have the house itself as collateral. Title loans the value of the car or whatever. If you want to just get a personal loan you're either going to be paying extremely high interest rates (see credit cards) or you will have to provide some form of collateral that the bank can seize if you default. Student loans would be no different.

It may not be a fantastic situation, but I really think that in order to 1) provide loans to those who need them and 2) keep student loan interest rates as low as they are you really do need to keep student loans not dischargable in bankruptcy (except in cases of undue hardship, as is current law). To do otherwise would only end up hurting the students, not the lenders. The lenders will always do the mathematically optimal thing regardless of what you change the rules to; they'll be fine. The students are the ones who stand to loose big.
« Last Edit: March 05, 2014, 08:24:53 AM by sherr »

odput

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Re: "Student loans aren't always for school"
« Reply #17 on: March 05, 2014, 09:10:53 AM »
1) Fair enough...the bankruptcy rate would be much higher today

2) This point seems to make the case for loans to be discharged...if the loans consume more of the future income due to the higher cost of education, then it seems to make more sense that people will have a harder time paying for them, thus should at least be restructured.

Also, since I didn't make it clear: I'm for govt backed loans being protected against bankruptcy/fraud, as these are the cheapest and most available loans, and are very much needed. Private student loans, however; should be treated differently as they are not subsidized by taxpayers and may force private lenders to more carefully consider who they are lending to and how much.  [start economic postulation]The current protection from bankruptcy allows private lenders to offer up as much money as they want (at fairly high but not astronomical rates) with zero risk, allowing schools to raise tuition because they know students will be able to "afford" it by taking out private loans (and that they've successfully sold "you HAVE to go to college" for years now).  While this may decrease the college participation rate, it will likely also decrease the dropout rate, and people starting out in jobs that don't make much money won't be saddled with payments for something they never received (the education they didn't finish)[/end economic postulation].

greaper007

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Re: "Student loans aren't always for school"
« Reply #18 on: March 07, 2014, 09:02:34 PM »
Which is why I used credit cards for my riskier student loans.   

1. If worst comes to worst you can declare bankruptcy and shed the loans, unlike federal student loans.

2. I always had a considerably lower interest rate by being careful with balance transfers.   I don't think I ever topped 3%.

As long as you're being careful with how you spend you're money, there's nothing wrong with using student loans to pay for affordable housing or food.   I did.   I worked as a student but never made enough money to pay for more than my apartment while taking a full load of classes, so I used student loans (credit cards) to pay for things like food and gas (I was flying an airplane in hick-ville Florida, you don't want to ride a bike there).   There's nothing unethical about that, just make sure you can pay them back when you're done.

EngGirl

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Re: "Student loans aren't always for school"
« Reply #19 on: March 12, 2014, 08:43:28 AM »
I went to university with a girl who's parents were low income, so she qualified for 7k a year in grants and 7k in loans. Her parents were mustachian though and had her tuition saved up before she went to school. Tuition for a Canadian university program was around 7k at the time (for my engineering degree, less for her B.A. in fashion design).

She took the grant and the loans and spent them all on designer clothes. So glad that people like that get funding, while my high income parents who didn't give me a penny for school meant that I didn't qualify for any help.

randymarsh

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Re: "Student loans aren't always for school"
« Reply #20 on: March 12, 2014, 09:20:45 AM »
I am completely guilty of using loan money to inflate my lifestyle too. Ugh. Lesson learned.

"The report also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time."

I'm not sure how that's even possible. Stafford and PLUS loans won't disburse unless you're at least half-time (6 hours). Aid like the Pell grant requires at least 1 credit hour.

Maybe private lenders (which are harder and harder to find now) don't have as strict requirements?


Elyse

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Re: "Student loans aren't always for school"
« Reply #21 on: March 13, 2014, 07:03:17 AM »

"The report also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time."


Actually, a friend of mine was a un-paid intern (required at our school for graduation) and still received his loans for that semester.  He kept it in a bank account as an emergency fund incase something went really really wrong.  He was already working a second job, and that money was all going to rent and typical living expenses.  His loans were just for school. 

So, he received loans for a semester he technically received no credits for.  But he was still doing a school function.  Which meant he owed a chunk of the fees.

But his family really liked to screw him over and "borrow" his car for a weekend without asking (he bought it from his dad, who kept a spare key and will not give it to him) and they always return it in worse condition. He won't report anything because it is his family.  But he keeps that loan money in his secret-from-family account in case worse things happen.

I would do things differently in his position, but he is trying to go in the right direction.

randymarsh

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Re: "Student loans aren't always for school"
« Reply #22 on: March 13, 2014, 07:48:07 AM »

"The report also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time."


Actually, a friend of mine was a un-paid intern (required at our school for graduation) and still received his loans for that semester.  He kept it in a bank account as an emergency fund incase something went really really wrong.  He was already working a second job, and that money was all going to rent and typical living expenses.  His loans were just for school. 

So, he received loans for a semester he technically received no credits for.  But he was still doing a school function.  Which meant he owed a chunk of the fees.

That's interesting, at my school when you do an internship you register for a class called "Internship" and it's 3 credit hours.

I think for people who work full time all semester and don't go to class, they change it to 12 credit hours so you're still full time. They did the same thing for me when I studied abroad.

Argyle

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Re: "Student loans aren't always for school"
« Reply #23 on: April 06, 2014, 12:48:49 PM »
This guy won't be able to pull this off for long. If you fail a class, the instructor is now required to report the last day of attendance, so loan scamming can't go on.  And if you get below a certain g.p.a (for instance because you haven't been going to class and studying), after a probationary period they throw you out.  It's  a shame these have to be put into effect because so many people were trying to use student loans for a free life subsidy, like this guy.

Zamboni

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Re: "Student loans aren't always for school"
« Reply #24 on: April 06, 2014, 01:03:45 PM »
I was at GreatClips the other day getting my semi-annual trim, and one of the stylists there was lamenting that they garnished her tax refund to pay part of her defaulted student loans.  I have no idea how this works, but this is what she said.

I will strongly advise my children not to take out student loans.  I had a boss advise me of this at one of my first jobs when I was in college while letting me know what his monthly payment was (high!), and it was great advice.

I have ranted about this before:  I don't think they should be able to call the student loans "financial aid."

greaper007

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Re: "Student loans aren't always for school"
« Reply #25 on: April 06, 2014, 11:45:04 PM »
I was at GreatClips the other day getting my semi-annual trim, and one of the stylists there was lamenting that they garnished her tax refund to pay part of her defaulted student loans.  I have no idea how this works, but this is what she said.

I will strongly advise my children not to take out student loans.  I had a boss advise me of this at one of my first jobs when I was in college while letting me know what his monthly payment was (high!), and it was great advice.

I have ranted about this before:  I don't think they should be able to call the student loans "financial aid."

How does one get through even a state school without taking out loans, or having parents with really deep pockets?    Sure there's scholarships, good luck.   Or the military, but do you really want your kid to die somewhere stupid like Iraq?

I paid $1200 for my first year at a community college, and that's a real option.  But you can't get around the $20k or so price tag for your average state university if you want to get a decent degree.    I would work two very good paying jobs during the summer, and I don't think I ever topped $10k.    During the school year the best job I could get paid minimum wage, and that was hard to find in a university town.    Paying your way just isn't possible anymore.

Zamboni

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Re: "Student loans aren't always for school"
« Reply #26 on: April 07, 2014, 05:52:00 AM »
^I agree the price tag has gotten too high.  That doesn't make a loan anything other than what it is: debt.

It doesn't change the fact that aid is aid, and a loan is money you have to pay back.  When I was in school a student loan that started acquiring interest while the student was in school was nearly unheard of, but this is becoming more and more common.  The issue is that some people say "my child got $20K per year to go to X school" without considering that over half of that might have been loans.  IF you are getting an MD or another job with a GUARANTEED high starting salary, then I think loans are okay as long as one uses common sense and lives like a poor college student to minimize borrowing.  Otherwise, proceed with caution and look around and consider all options.

But I feel sorry for the lady at great clips.  Who knows where 18 year old her went to school, what she studied, how long she continued, and how much it cost?  I used to work at a very large place and saw many students show up and spend a year or two or even three racking up debt before heading out the door with no degree.  There were all kinds of reasons for this, but the fact remains that these students left school jobless, still fairly uneducated, and now saddled with debt. 
http://www.cbsnews.com/news/50-state-universities-with-best-worst-grad-rates/

rocksinmyhead

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Re: "Student loans aren't always for school"
« Reply #27 on: April 07, 2014, 08:58:54 AM »
^I agree the price tag has gotten too high.  That doesn't make a loan anything other than what it is: debt.

It doesn't change the fact that aid is aid, and a loan is money you have to pay back.  When I was in school a student loan that started acquiring interest while the student was in school was nearly unheard of, but this is becoming more and more common.  The issue is that some people say "my child got $20K per year to go to X school" without considering that over half of that might have been loans.  IF you are getting an MD or another job with a GUARANTEED high starting salary, then I think loans are okay as long as one uses common sense and lives like a poor college student to minimize borrowing.  Otherwise, proceed with caution and look around and consider all options.

But I feel sorry for the lady at great clips.  Who knows where 18 year old her went to school, what she studied, how long she continued, and how much it cost?  I used to work at a very large place and saw many students show up and spend a year or two or even three racking up debt before heading out the door with no degree.  There were all kinds of reasons for this, but the fact remains that these students left school jobless, still fairly uneducated, and now saddled with debt. 
http://www.cbsnews.com/news/50-state-universities-with-best-worst-grad-rates/

I agree, and I hate that that's how schools describe it in statistics, too. "Such-and-such percent of students have this amount of their expenses covered by 'financial aid'!" Um, not really.

Forcus

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Re: "Student loans aren't always for school"
« Reply #28 on: April 07, 2014, 10:48:15 AM »
Paying your way just isn't possible anymore.

I disagree but with the caveat that it isn't for everyone. Did not take a student loan out for my 4 year business management degree:

2 years of community college, lived at home. I believe it was about $3500 / year. I would have still been able to afford it if I lived on my own.
2 years of 4 year school taught at the community college. This is an extension program of a 4 year school to non-4 year school campuses. The choice in degrees were somewhat limited though (thus the caveat). I believe it was about $4500 / year. As far as I know there are many other programs like this.

My wife did the same thing (not wife at the time). She got grants for most of the cost and we took out a small loan ($5k) for the rest which we paid off within a year.

I don't want to say its for everyone but I was very sure I wanted a universally applicable degree that could make me serious money in a short amount of time, for a (relatively) cheap price, and I am glad I did. I just think kids instantly default to I will have student loans, everyone does, its just the way it is.

greenmimama

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Re: "Student loans aren't always for school"
« Reply #29 on: April 07, 2014, 12:26:45 PM »
Paying your way just isn't possible anymore.

I disagree but with the caveat that it isn't for everyone. Did not take a student loan out for my 4 year business management degree:

2 years of community college, lived at home. I believe it was about $3500 / year. I would have still been able to afford it if I lived on my own.
2 years of 4 year school taught at the community college. This is an extension program of a 4 year school to non-4 year school campuses. The choice in degrees were somewhat limited though (thus the caveat). I believe it was about $4500 / year. As far as I know there are many other programs like this.

My wife did the same thing (not wife at the time). She got grants for most of the cost and we took out a small loan ($5k) for the rest which we paid off within a year.

I don't want to say its for everyone but I was very sure I wanted a universally applicable degree that could make me serious money in a short amount of time, for a (relatively) cheap price, and I am glad I did. I just think kids instantly default to I will have student loans, everyone does, its just the way it is.

This is an excellent plan, it's just that a lot of students don't want to go to CC.

I am going to stress at least a year of CC, even offer to pay 100% of it as long as they keep their grades up, then they will be better suited to spend what they and we have been saving at the college of their choice and hopefully be a little older and wiser and not spend their time drinking and partying, just a bit but actually you know study and learn something.

We got married when my DH still had a few years left of college, we paid cash for the classes he could handle while still working full time and he graduated with zero debt, he was also 28 when he got his bachelors, but most people are still paying for their school long after they are 28 :)

My nephew is in a program at his HS where he takes CC courses for free and once he graduates he will already have 1 year totally done, I love this idea.

ichangedmyname

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Re: "Student loans aren't always for school"
« Reply #30 on: April 07, 2014, 12:47:34 PM »
My husband used his student loan to feed an extravagant lifestyle for us in a third world country. He has no intentions of paying it back.

Forcus

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Re: "Student loans aren't always for school"
« Reply #31 on: April 07, 2014, 01:55:59 PM »
This is an excellent plan, it's just that a lot of students don't want to go to CC.

I highlighted "want" for emphasis. I think you pointed out that old want vs. need scenario. Too bad a lot of kids don't wake up until they out of their college and up to their necks in debt... an irony in the plan that I followed is that enrollment is so low for the "alternative" education (really, it was just like going to 4 years of community college), that they have been cutting back teachers and offerings.

I like your plan and will probably do something similar.

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Re: "Student loans aren't always for school"
« Reply #32 on: April 07, 2014, 03:39:38 PM »
Student loan debt is also a lot harder to get rid of compared to other debt.

Had a friend recently who took out a student loan to try paying for IVF.  Unfortunately she didn't get pregnant.  The thing is, there are businesses out there that will loan you money for IVF (though for my family's IVF we paid in cash).  These businesses even offer up insurance so that you don't have to pay the money back if you don't get pregnant.

From what I've heard, IVF loans typically have very high interest rates. I've heard of some in the teens!!! We put ours largely on 0% credit cards but not everyone has that option,

Wolf_Stache

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Re: "Student loans aren't always for school"
« Reply #33 on: April 07, 2014, 04:27:29 PM »
She took the grant and the loans and spent them all on designer clothes. So glad that people like that get funding, while my high income parents who didn't give me a penny for school meant that I didn't qualify for any help.

I was in the same position during my undergrad - my father made a high enough income that I couldn't qualify for a single penny of aid. I was bitter about it during school - having to work 2 jobs while going to school full time, but now I am grateful that the only student loans I have to pay off are from my graduate degree program.

Zamboni

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Re: "Student loans aren't always for school"
« Reply #34 on: April 07, 2014, 08:57:05 PM »
Quote
I am going to stress at least a year of CC, even offer to pay 100% of it as long as they keep their grades up, then they will be better suited to spend what they and we have been saving at the college of their choice

This is an excellent plan, but proceed with caution and look very carefully into the credit policies of the college of their choice before enrolling.  There is a trend among 4-year schools to severely limit the amount of "prematriculation" credits, such as AP and community college courses, that a student can count toward their degree.  Right now it is only very pricey okay let's just say hoity toity private schools doing this, but the trend might spread.  I can tell you that a bunch of parents have been surprised by this after enrollment, so be sure you check before enrollment.   

LucyBIT

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Re: "Student loans aren't always for school"
« Reply #35 on: April 08, 2014, 02:21:17 PM »
^I agree the price tag has gotten too high.  That doesn't make a loan anything other than what it is: debt.

It doesn't change the fact that aid is aid, and a loan is money you have to pay back.  When I was in school a student loan that started acquiring interest while the student was in school was nearly unheard of, but this is becoming more and more common.  The issue is that some people say "my child got $20K per year to go to X school" without considering that over half of that might have been loans.  IF you are getting an MD or another job with a GUARANTEED high starting salary, then I think loans are okay as long as one uses common sense and lives like a poor college student to minimize borrowing.  Otherwise, proceed with caution and look around and consider all options.

But I feel sorry for the lady at great clips.  Who knows where 18 year old her went to school, what she studied, how long she continued, and how much it cost?  I used to work at a very large place and saw many students show up and spend a year or two or even three racking up debt before heading out the door with no degree.  There were all kinds of reasons for this, but the fact remains that these students left school jobless, still fairly uneducated, and now saddled with debt. 
http://www.cbsnews.com/news/50-state-universities-with-best-worst-grad-rates/

I agree, and I hate that that's how schools describe it in statistics, too. "Such-and-such percent of students have this amount of their expenses covered by 'financial aid'!" Um, not really.

"Financial aid" is an umbrella term, though; it's not limited just to loans. I received financial aid that included loans, yes, but also grants, work study, and what was basically a tuition discount for parental poverty.

EDIT: I think I misunderstood you; you (and others) are saying that's the problem, that they lump everything in together, where the statistics don't tell you how much is loans and how much is other aid--correct? Apologies!
« Last Edit: April 08, 2014, 02:23:29 PM by LucyBIT »

rocksinmyhead

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Re: "Student loans aren't always for school"
« Reply #36 on: April 08, 2014, 02:36:52 PM »
"Financial aid" is an umbrella term, though; it's not limited just to loans. I received financial aid that included loans, yes, but also grants, work study, and what was basically a tuition discount for parental poverty.

EDIT: I think I misunderstood you; you (and others) are saying that's the problem, that they lump everything in together, where the statistics don't tell you how much is loans and how much is other aid--correct? Apologies!

yep! I'm with ya! :)

GoPackGo

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Re: "Student loans aren't always for school"
« Reply #37 on: April 14, 2014, 08:40:27 PM »
I would have to agree that student loans aren't always for school. I still remember the 1st time I put gas in my car using student loans. It killed me. Then slowly I believed everyone telling me it was good debt. Too much eating out at times forgetting that I was a poor student and should be saving for next semester. Luckily for me I stayed at home 1st two years and had some great scholarships and jobs that kept my overall student loans well below the average.

My wife has told me of her friends maxing out the amount to take out (SL) and then by the time the semester is half way through they are using CC for DT boozing. (not to say I didn't indulge in DT scene few times...) but still I think the OP is right. SL may be a good portion of consumer debt and not figuring out the ROI of a college degree.

Rural

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Re: "Student loans aren't always for school"
« Reply #38 on: April 15, 2014, 08:07:12 PM »
When I was in grad school, one of my classmates took out subsidized loans, invested the whole thing in laddered CDs, paid off the loans the day after graduation, and kept the interest. I wasn't that smart.