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Discussion in 'BWI / McAndrew Board' started by mn78psu83, May 9, 2018.
LINK: Just another milestone
Reagan proved that deficits don't matter, didn't he?
The student loan burden will kill our economy over the next 25 years. My generation is supposed to pick up our spending as the generations before us head off into the sunset, but we can't spend like they did, because we're paying a mortgage every month on student loans alone.
I'm not advocating for loan forgiveness or anything of the sort. No matter the reason, the simple fact is that Millennials are putting off major life decisions such as marriage, buying new cars, buying a house, etc. because of debt levels. This will affect every segment of the marketplace in the coming years.
I may even go so far as to advocate loan forgiveness. Which does more harm, he govt forgiving 1.5 trillion in loans, or our economy going into a deep recession/depression?
I spend $1000/mo on student loans. There are millions more like me. What if we were all pumping that money back into the economy instead of writing a check to Uncle Sam. Wouldn't the jobs created and taxes generated on all that spending go a long way towards covering the 1.5 trillion forgiven over the 20 years those loans would've been repaid? Not to mention saving us from the jobs lost and taxes not generated when our lack of spending affects those who don't have any loans as well. I'm obviously not an economist, but it sure seems like loan forgiveness is better for the deficit long-term than sticking with it.
Lower the artificially high interest rates or risk rate the loans to give good payers a better rate. That will at least give some payment size relief
Sure, and please forgive my mortgage. An equivalent amount. Or give me a credit card with about $100k of value.
How about we make college cheaper instead of worrying on how much debt is required to pay for it?
The whole college debt debate is like debating how to best continue to keep your oil reservoir full but not at all focusing on the fact you have a huge leak in your oil line.
Student loan rates are artificially low. The opposite of artificially high. I am curious though why you think the rates are artificially high.
While we're at it, I want forgiveness (in the form of a multi-year tax credit) for all my previously paid-off mortgages. Life needs to be equitable dammit!!!
I like the final paragraph:
But the amount students borrow is also growing. Rising college costs and stagnant wages combined with state and federal disinvestment in higher education have made students and families more reliant on debt to fund a college education, Kantrowitz said. “It’s shifting the burden of paying for college from the government to the families,” he said. Americans hit a separate debt milestone in 2017, when credit card debt cleared the $1.021 trillion mark.
Really speaks to the "perfect storm" of factors that are accelerating this problem. Rising costs, stagnant wages and decreasing funds for colleges from the gov't.
I'm going to build myself a pool. And then I'm going to buy a new car. If I am forgiven for those loans, it will be good for the economy right? I mean I just built a pool and bought a car!
Stop giving the universities free money, there is no reason for the cost to attend to exceed the rate of inflation.
Odd they didn’t include bloated admin as a reason for rediculous cost increases.
The government is the reason tuition became so expensive. It's not the reason for the mortgage cost or credit card. It's not hard to see the difference.
Community college is extremely cheap. A few thousand dollars a year. People are making the choice to attend 4 year Universities and spending $100,000 plus over four years for an "education".
The problem IMO isn't the price. It is the lack of selectiveness of families and their children.
What's better? Attending community college and then a local school and leaving with $5k of debt, or attending PSU, getting a B- average and leaving with $120k in debt and expecting forgiveness?
There needs to be a shift where people understand the latter case isn't the better one.
I'd be interested to seem a chart dating back to the 1970's or 1980's showing average student loan debt in inflation-adjusted real dollars. I know tuitions at many universities outpaced normal inflation rates during the last 15 years, but it would be interesting to see the trend.
Before refinancing, I paid a lot more than you per month--in fact, the wife and I used to pay more than our mortgage by a sizable margin. Fortunately, I was able to refinance variable interest rate private loans (9.75%) into a fixed rate of 6.5% after establishing good credit over the years. But, it took a while.
Personally, I'm more in favor of redesigning the student loan program. I think there should be credit checks, a cap on student loans based on one's major and grades--the resulting saved funds should be put towards grants.
Hopefully as colleges see the writing on the wall, costs are lowered. Right now there's no incentive for a college to do this because the spigot is wide open. Without somehow addressing the spigot, things are going to get worse.
I completely agree. The government is also the reason home prices became so expensive.
But attending an expensive four year college and taking debt out to do so is a choice. Like putting in a pool. Having a place to live isn't.
Let me guess, you went to college when it was cheap. You faced none of these choices, but expect everyone else to. Sorry bud, but your career opportunities aren't the same from local community college as they are from Penn State.
Nah, I went to college when it was fairly expensive and I worked ~40 hrs a week when I went to college (at the Deli) paid my room/board expenses. Then over the summer I worked ~60 hrs a week to pay my tuition.
Today the choices are slightly different, but only slightly. The 2 year, 2 year plan is a considerably better option and provides time to save for a school like Penn State after transfer.
If the government didn't hand out unlimited loans, the colleges couldn't have continued tuition at limitless rates. The government did, so the colleges said "ok, now we can charge whatever we want and build all these nice buildings." The government didn't do any such thing with housing.
And it's not a "choice" any more than saying "do you want a satisfying career to spend your life's work or toil away unhappily for decades" is a choice. People from previous generations didn't have to make that "choice" because the government hadn't allowed tuition to become ridiculous.
Haha what you're describing wouldn't cover those costs today. I worked full time as well bud, it's not the same today.
Nor should they be. That's called "life".
Sure you did. But as I said it isn't the same today. Today to not end up in your situation one should attend community college for 2 years and then transfer into a four year University.
I know plenty of people who did that and still do. This is the obvious choice with 4 year tuition prices where they are today if you cannot afford college.
You took the other route. Borrowed money and don't want to repay it.
I'm repaying it and doing just fine financially. My concern is for the nation's economy, not my own well being.
More commentary from old folks never forced to make such decisions.
I think many people facing such debt burdens are living in the now and are banking on having enough credit to have some quality of life until they die. Then the debt will be somebody else's problem. Some have a plan to pay off their debt, some hope to pay it off someday, and some just put it out of their minds. In the end, much of it is left unpaid once the person dies.
This is not to say that everyone is hopelessly irresponsible. Some people are doing the best they can given the circumstances. A college education creates opportunities, but at a huge cost. Some people are irresponsible, though. They choose the wrong school based on cost and/or the wrong major based on earning potential. Unfortunately, many do not appreciate or even consider the debt burden before they choose a college. They think of the end product -- the degree, the job, the pay, and what they will do with that pay (car, house, travel...). They don't think of the loan debt. It is a rude awakening for many.
No, people from previous generations DID make that choice. You are coming across as extremely naive. Previous generations didn't spend money they didn't have. They were relatively thrifty. Our grandparents didn't just rely on the government to pay our way.
Here are the statistics... take a look.
I know plenty of older people who paid for their college by working part time while attending. It's exponentially more expensive now, so that's impossible. Therefore, previous generations did not have to choose between getting a good college degree that will provide them a better life, or paying a mortgage in loans for the next 25 years. You're being incredibly naive if you think there's any similarity in choosing to go to college 25 years ago and earlier versus today.
Seriously. Baby boomers will go down in history as the worst generation ever. Selfish and irresponsible.
I knew what I was getting into, and I don't regret my decision. I am significantly more satisfied in my career today than I would have been otherwise. And I'm going to repay it, I don't expect any forgiveness to happen.But it's a disaster for the economy going forward that I and millions others are paying $1k/mo or more to the government instead of pumping that into the economy.
It sucks that the government handing out unlimited money to these schools caused this problem, and now people like myself are forced to incur costs that burden the rest our lives as a result. Previous generations could go to school for the career they desired, work to pay for it or pay it off within 5 years, and live the life they wanted. We don't have such a simple choice. We have to either work a career we're unhappy with, or pay the exorbitant loans the government caused in order to enter the career we wanted. And it's the nations economy that will suffer as a result.
Again, I said today the obvious choice would be associates then four year university. Factually it was a choice most students made when I attended although those degrees were from other PSU campuses.
The problem with the university system IMO isn't simply a subsidy, which blew up tuitions (and I was railing against it years ago when many on this board thought more subsidies were the fix) it is this statement which you made:
"And it's not a "choice" any more than saying "do you want a satisfying career to spend your life's work or toil away unhappily for decades" is a choice"
A Penn State degree is not necessary for a satisfying career.
That depends on the career.
Students should be protected from the college marketing machine and the government/private loan traps. Borrowing should be limited to 7k per year (Community College cost in Pa) for the first 60 credits. Life isn't fair, but neither are the effects of massive debt at the start of your adult life. Even 14k in debt plus 2 years at 30/40/50k would keep most from borrowing over a 100k which is too, too much for most degrees. Also, the review of the percentages that do not ever graduate is frightening (mostly due to money) and leads to a more challenging economic reality. Even accounting majors should realize that paying back over 80-100k after graduation (hopefully) in 4 years will be.............difficult, if not impossible for most non-engineering types.
"It sucks that the government handing out unlimited money to these schools caused this problem, and now people like myself are forced to incur costs that burden the rest our lives as a result"
This quote really says it all IMO. Lack of self reflection.
No, but your likelihood of achieving satisfaction in your career if you have ambition is greatly increased by attending a prestigious university with a loyal alumni base.
And again, previous generations didn't have to face a lifetime of debt burden to pursue the career they wanted. But now it's so easy to expect others to do that. If that's the governments fault, which I believe it is, then I think the government should do something to correct it before it wrecks the economy, which I believe it will.
Who is on the other side of that 1.5 trillion if it's forgiven?
What impact would that have on the financial system as whole?
Apparently not. You're the one here going on and on about your debt burden. Anecdotally I would suggest there is more satisfaction with people who didn't attend college. Their expectations were low and were exceeded.
At $7.25 an hour today, your summer earnings would have been $5,220 and yearly earnings of $10,440 for a total of $15,660, pre tax. In-state tuition is $18,436 with estimated additional costs of $13,120-16,342, for a total of $31,556-34,778. So what covered your all of your expenses whenever you went to school would cover half of your expenses today.