Author Topic: Another Student Loan Post - Article from Slate  (Read 4375 times)

StarBright

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Another Student Loan Post - Article from Slate
« on: January 28, 2016, 09:11:23 AM »
Did anyone else see this piece?:

http://www.slate.com/articles/business/moneybox/2016/01/student_loan_crisis_at_its_ugliest_i_graduated_and_found_out_i_owe_200_000.2.html

I actually feel awful for this kid. At 18 if my parents had told me to go ahead and sign off on student loans, I definitely would have done it without questioning.

Shame on the parents for not going over all of the loan terms with their son. Obviously in retrospect the writer should have read over the "financial aid package" himself - but I honestly don't really blame him for the undergraduate portion of his loans.

TheGrimSqueaker

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Re: Another Student Loan Post - Article from Slate
« Reply #1 on: January 28, 2016, 10:30:31 AM »
Did anyone else see this piece?:

http://www.slate.com/articles/business/moneybox/2016/01/student_loan_crisis_at_its_ugliest_i_graduated_and_found_out_i_owe_200_000.2.html

I actually feel awful for this kid. At 18 if my parents had told me to go ahead and sign off on student loans, I definitely would have done it without questioning.

Shame on the parents for not going over all of the loan terms with their son. Obviously in retrospect the writer should have read over the "financial aid package" himself - but I honestly don't really blame him for the undergraduate portion of his loans.

I posted this link in one of the existing student loan threads, but wasn't as sympathetic as you are. At 18, nobody should trust their parents for financial advice, and the writer should also have been working to earn the tuition money. Having to part with everything you've stashed in exchange for "education" makes you a lot more mindful of what you're buying, and a lot more likely to comparison shop.

StarBright

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Re: Another Student Loan Post - Article from Slate
« Reply #2 on: January 28, 2016, 10:48:17 AM »
Should have thought to check those other threads first- sorry! - will go find and continue the conversation on that thread.

mm1970

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Re: Another Student Loan Post - Article from Slate
« Reply #3 on: January 28, 2016, 10:49:53 AM »
Did anyone else see this piece?:

http://www.slate.com/articles/business/moneybox/2016/01/student_loan_crisis_at_its_ugliest_i_graduated_and_found_out_i_owe_200_000.2.html

I actually feel awful for this kid. At 18 if my parents had told me to go ahead and sign off on student loans, I definitely would have done it without questioning.

Shame on the parents for not going over all of the loan terms with their son. Obviously in retrospect the writer should have read over the "financial aid package" himself - but I honestly don't really blame him for the undergraduate portion of his loans.
What's not clear to me is whether the parents went to college and understand the system.

I think there are many many things that have lined up to make this mess.
- Availability of loans has caused the cost of college to skyrocket
- More students are going to college, so more competition for jobs
- More jobs require a degree, because they can (see, more students with degrees).  Example: office work, like being a receptionist.  My sister is an office manager, with 30+ years of experience, and no degree.  But now, degrees are usually required.  That requires debt for most people, and the jobs don't pay any better than they did before a degree was required.  You get to go into debt to even keep the status quo.
- many students are "first generation", so they simply do not know how to navigate the college, college major, funding situation.  I know I didn't have a clue.  I got lucky.  In some ways, it's good to grow up dirt poor.
- even for the non first-generation students, their parents (and teachers) tell them that college is the key to a better job - that used to be true.  Few people  had degrees - a degree was a ticket to a good job.  That is no longer the case.  Parents and teachers have no caught up with reality.
- most 18 year olds are in no position to be able to critically look at all of this.  They  haven't been educated at the school and their parents don't understand it either.  The sheer amount of debt that is involved now has increased.  I'd argue that 30 years ago, students could not borrow as much, and college simply didn't cost as much.  It's probably the job of a good HS guidance counselor, for the students whose parents aren't able to provide the information.

therethere

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Re: Another Student Loan Post - Article from Slate
« Reply #4 on: January 28, 2016, 11:00:32 AM »
As I've said on every other student loan thread..... The majority of people are not even 18 when you are making this decision. So you are a minor regarding everything else in life but you are not supposed to follow your parents guidance? The US tells you you are not even old enough to decide if you want to smoke cigarettes or have a beer. Some states you can't even drive after dark. The hours you are allowed to work per week are limited. By this, logic would say that if something is dangerous or questionable the US should be protecting you if you are under 18.... Instead it is doing the opposite and throwing marketing down the throat of 16-17 year olds and highly encouraging them so they and others can make a profit. Stop trying to put all the onus on minors to somehow know that they are throwing the next 10 years of their life away.

Sure you don't have to feel bad for them. But saying that a 16 or 17 year old should be doing extensive research, loan calculations, predicting the next 4 years of their expenses/income, and oh yeah choosing their career for their life is a bit of a stretch. Especially when the guidance counselors, teachers, parents, and everyone else in their life is just telling them to go to college. "They should have known better if they were smart." Is BS and a complete cop out when talking about student loans in a lot of these situations. Student loans are pretty much modern day indentured slavery. You know from the days when your parents sold you into slavery hoping for a "better life". Its the same damn thing.

Sure I think the 100k student loans for private liberal arts degrees are ridiculous too. But, then I think back to earlier. They were 17 year olds enjoying senior year. They were told go to college, do what you love, all that bull. They followed through and picked a school and went for a year or two. That's likely when reality is hitting them that maybe their degree wasn't worth it or wasn't what they are interested in or whatever. What are their choices at this point?

Option 1: They can drop out, accept the loans they already have, have no degree to show for it and work at a crappy job with no chance in really paying them off on an accelerated timeline. So struggle anyway.
Option 2: They can transfer to a cheaper school. But lose most of their credits and end up having to go for an extra year at a cheaper school. Which really isn't all that cheaper when you are adding on another year to redo credits that won't transfer (this was the case for most private universities when I was in school).
Option 3: Stick it out the remaining 2 years to get a degree. Add on the high loans but at least you have something to show for it (even if its a semi-meaningless overpriced degree). Hope for a good job and no unemployment to eventually pay them off.

So you have a minor make a choice that is pretty much irreversible without major damage. You give no real good options for them to change their mind. But ridicule them anyway.
« Last Edit: January 28, 2016, 11:21:42 AM by therethere »

No Name Guy

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Re: Another Student Loan Post - Article from Slate
« Reply #5 on: January 28, 2016, 01:31:18 PM »

Sure I think the 100k student loans for private liberal arts degrees are ridiculous too.

So tell me (not necessarily you there), by why is it that it's DeVry being sued instead of (or in addition to) NYU?

http://www.huffingtonpost.com/entry/feds-sue-devry-university_us_56a904c7e4b0f7179928af63

Quote
The Federal Trade Commission sued DeVry Education Group on Wednesday, alleging the for-profit college operator deceived tens of thousands of prospective students with bogus claims about their career prospects.

http://www.nytimes.com/2010/05/29/your-money/student-loans/29money.html?_r=0

Quote
Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.

Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.

Oh, and Ms. Munna ended up with an interdisciplinary in Religion and Women's Studies.  Yeah....I wonder what line she was fed about the career prospects of THAT line of study was.

Quote
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes.

Why is DeVry being held to account for bogus claims when NYU, Harvard, Stanford, Ohio State, Oregon State, UCLA, or any other "respectable" private or public school makes equally bogus claims about the career value of their (liberal arts) degrees AND foisting tons of student loans on the suckers to get those degrees? 

Clearly there is a wee bit of double standard going on here.  I have my own ideas why that is, but I'd challenge the reader to come up with their own reasons there a blatant double standard.

ps - don't bother with the nit picking on the Lib Art's degree and about how valuable it was for you.  On average, STEMs have a far clearer reward path than BA's in fluff studies.  Had Ms. Munna there done an mechanical engineering degree (to pick a classic STEM major) from Washington State University, she wouldn't have been in night school back in '05 with a 100k of debt, she would have been employed at a certain large airplane maker in Seattle.

MrsPete

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Re: Another Student Loan Post - Article from Slate
« Reply #6 on: January 28, 2016, 03:57:10 PM »
but wasn't as sympathetic as you are.
I can't find much sympathy either.  I can understand him not grasping just how much $100,000 really is, but I can't understand even an 18 year old failing to keep a running total of how much he'd borrowed -- yet this guy was surprised to find that he'd borrowed $100,000 more than he thought.  I also can't understand how anyone would say, "I don't have any money, have to borrow it all -- I think I'll choose an expensive private school!"  I also can't find any sympathy for failing to pay the first couple bills because he was "distraught and confused". 

I do have sympathy for the rules about grandma's-death-will-automatically-throw-you-into-default. 

and the writer should also have been working to earn the tuition money. Having to part with everything you've stashed in exchange for "education" makes you a lot more mindful of what you're buying, and a lot more likely to comparison shop.
Again, I'm in agreement.  I would be more sympathetic if the author'd worked and paid as much as he could; yet, he gives us no indication that he worked during school.

Option 2: They can transfer to a cheaper school. But lose most of their credits and end up having to go for an extra year at a cheaper school.
Assuming the first school is accredited, why would the student lose credits when transferring? 
« Last Edit: January 28, 2016, 04:06:51 PM by MrsPete »

therethere

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Re: Another Student Loan Post - Article from Slate
« Reply #7 on: January 28, 2016, 04:03:39 PM »

Option 2: They can transfer to a cheaper school. But lose most of their credits and end up having to go for an extra year at a cheaper school.
Assuming the first school is accredited, why would the student lose credits when transferring?
[/quote]

Well school's set it up this way usually on purpose so people won't do credits at a cheaper place of course! They can have alternative lengths of classes (quarters, semesters, trimesters, etc.). Also, they can have different syllabus for classes. Its not guaranteed that the split of Calc 1 and Calc 2 is at the same at different universities as I understood. Maybe other universities aren't that way and I just went to a f'ed up school that continually tried to screw me over. There's some truth to that...

MrsPete

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Re: Another Student Loan Post - Article from Slate
« Reply #8 on: January 28, 2016, 04:11:19 PM »
Well school's set it up this way usually on purpose so people won't do credits at a cheaper place of course! They can have alternative lengths of classes (quarters, semesters, trimesters, etc.). Also, they can have different syllabus for classes. Its not guaranteed that the split of Calc 1 and Calc 2 is at the same at different universities as I understood. Maybe other universities aren't that way and I just went to a f'ed up school that continually tried to screw me over. There's some truth to that...
Eh, my younger child is planning to transfer to another college, so we're researched this carefully.  Our state has a website that allows you to see how things transfer from one school to another, and EVERYTHING transfers as some credit -- though a minority of the classes transfer only as elective credits. 

I'm led to believe that in the past credits didn't transfer as easily (and, yes, my husband had trouble with this in the late 80s when he went from a tech school to a university), but this really isn't an issue today.

Racer X

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Re: Another Student Loan Post - Article from Slate
« Reply #9 on: January 29, 2016, 11:08:29 AM »
Smart enough to graduate from college, but not smart enough to understand even the basics of his financials.  SMH...

mm1970

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Re: Another Student Loan Post - Article from Slate
« Reply #10 on: January 29, 2016, 01:51:00 PM »
Smart enough to graduate from college, but not smart enough to understand even the basics of his financials.  SMH...
Imagine a bit the difference in maturity from age 17 to age 22.

I cannot speak for everyone, of course.

Even my own level of financial security, going from 18 to 22 to 26 to 30.

I learned most of my financial information in my 20's, and it's a pretty fast learning process when you are on your own.  I fared better than many, because I was financially on my own starting at about age 19. 

Still, I bounced a number of checks at 22, not to mention the parking tickets that I got.
I spent a crazy amount of money eating out at 25, but hey, at least I wasn't charging it.
When my college loans came due at 22.5, I tallied them all up for the FIRST TIME.  Why for the first time?  I don't know.  When the loan forms came each year, I signed them. I never even saw the money - it was sent straight to the university.  I  was kind of busy taking 21 credits, working a part time, job, and participating in ROTC.
When my boyfriend helped set up my first computer (in 1994), he also helped me set up Quicken.  Almost a direct quote: "Why on earth do you not pay off your credit card every month??"  "I dunno, I get close."  "But but but, you will have a bill for $908 and you only pay $900.  You are paying interest on the full amount EVERY MONTH."  "Really?"

Seriously, my parents never had a credit card, I didn't really know that.  Learn by doing, learn by fucking up, learn by supporting yourself.

Except for college loans.  THAT'S where we let you borrow almost as much as you want, even though you have no job and aren't self-supporting.

If I tried to borrow money for a car back then, with my 15-hour a week job at $3.35 an hour, I would have been denied.  But college loans?  No problem.

obstinate

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Re: Another Student Loan Post - Article from Slate
« Reply #11 on: January 31, 2016, 12:08:54 AM »
I've decided I want to get a little more extreme in my opinions about this. First, re. private loans:

- A loan that would not exist without special subsidies from the government is in every important sense government funds.
- Private student loans are therefore government funds -- the government guarantees them by excluding them from bankruptcy proceedings.

Then, re. the use of government funds:

- If you receive government funds, you should be able to prove that those funds are being put to good use.
- That means private colleges need to be able to justify that their students, with a high degree of certainty, can find gainful employment that will allow them to make reasonable progress on their loans.
- IF THEY CANNOT SHOW THIS, THEY CANNOT ACCEPT STUDENTS WHOSE LOANS ARE GUARANTEED OR PROVIDED BY THE GOVERNMENT. This includes private loans that are not dischargeable in bankruptcy.

That's all there is (should be) to it. This would also probably do a lot to counteract the rampant inflation in costs that private universities have been foisting on their unwitting victims.

On the other hand, I have absolutely no interest in free tuition to public schools. Subsidized? Yes. Need-based? Yes. But the recipient of the education is the prime beneficiary of that education. Therefore, they should mostly be the ones to pay for it.


Drifterrider

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Re: Another Student Loan Post - Article from Slate
« Reply #13 on: February 04, 2016, 11:21:37 AM »
Anyone smart enough to get into college should be smart enough to read (the loan documents) and understand them.  Blaming anyone else for one's own failure is the "victimization of self".

Saying one's parents didn't have time to plan for college (student aid), they had 18 years.  It is no surprise that when you have a child, in 18 years he will be of age to go to college or work.  They had 18 years to plan.

The US is a debtor nation because the people are (most of them).  They justify living in debt; and so they always will.


onlykelsey

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Re: Another Student Loan Post - Article from Slate
« Reply #14 on: February 04, 2016, 11:23:35 AM »
I feel bad for the 18 year old.  I do not feel bad for the college-educated 20-something who continued to dig his hole deeper and deeper.