FC: Student loan debt surpasses $1.5 TRILLION

[wbcincy]

"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.

LdN

You aren't listening to me, your preconceived notions won't allow you to. I am repaying mine. I knew the cost going in, and I chose it anyway. I worked full time at penn state and then 2 years after to school to be completely out of debt before starting grad school (fortunately I am old enough that tuition at PSU was 1/3 what it is today.)

I incurred my debts in law school, where you aren't permitted to work. Again, I chose it, im not advocating forgiveness for my sake, im bringing it up because I think our country's economy is screwed without it.

I've been paying a mortgage for law school for a decade, and will continue to for another 15 years. Meanwhile, a court administrator I worked with early in my career graduated 25 years before me, He sold his car to pay off his law school loans. There is simply no comparison in what it was like to make these "choices" a generation ago versus today. And the effect on the economy, and everyone's lives, whether they have any loans or not, is going to be devastating in a decade.

 

[LionDeNittany]

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.

I have rarely found a position where I could only earn minimum wage. In college I earned close to $15 an hour. During the summer closer to $17.

So try your math again. And don't forget, "additional costs" were covered while I was working during school.

LdN

 

[wbcincy]

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.

LdN

Again, it's not about me. You obviously just aren't reading, you just want to paint me with some brush you've decided applies to everyone who thinks there's a problem. We're all just spoiled kids who made a bad financial decision because we were too stupid to know it and should've just become janitors if we didn't like it. Got it. Enjoy the depression in a decade, your attitude will help ensure it.

 

[LionDeNittany]

You aren't listening to me, your preconceived notions won't allow you to. I am repaying mine. I knew the cost going in, and I chose it anyway. I worked full time at penn state and then 2 years after to school to be completely out of debt before starting grad school (fortunately I am old enough that tuition at PSU was 1/3 what it is today.)

I incurred my debts in law school, where you aren't permitted to work. Again, I chose it, im not advocating forgiveness for my sake, im bringing it up because I think our country's economy is screwed without it.

I've been paying a mortgage for law school for a decade, and will continue to for another 15 years. Meanwhile, a court administrator I worked with early in my career graduated 25 years before me, He sold his car to pay off his law school loans. There is simply no comparison in what it was like to make these "choices" a generation ago versus today. And the effect on the economy, and everyone's lives, whether they have any loans or not, is going to be devastating in a decade.

Forgiving the loans will be considerably more devastating. Money doesn't just appear. That money which the government is currently receiving is paying for other programs. You take that away, and now taxes need to go up.

The idea that forgiving student loans is good for the economy is an odd one. A myth created by people who do not understand economics.

And sorry if you graduated from law school 10 years ago or close to that we are the almost same age. Which was my initial expectation.

LdN

 

[wbcincy]

Forgiving the loans will be considerably more devastating. Money doesn't just appear. That money which the government is currently receiving is paying for other programs. You take that away, and now taxes need to go up.

The idea that forgiving student loans is good for the economy is an odd one. A myth created by people who do not understand economics.

And sorry if you graduated from law school 10 years ago or close to that we are the almost same age. Which was my initial expectation.

LdN

Forgiving $1.5 trillion in debt isn't a net $1.5 trillion loss to the government. The increased spending will create millions of jobs that increase the tax base. Further, it would avoid a recession/depression that will cost huge sums in lost tax revenue.

 

[LionDeNittany]

Forgiving $1.5 trillion in debt isn't a net $1.5 trillion loss to the government. The increased spending will create millions of jobs that increase the tax base. Further, it would avoid a recession/depression that will cost huge sums in lost tax revenue.

But it is. The interest received on that $1.5 trillion is used to pay for programs. And the principal, as it comes in, is used to pay for additional loans and or other programs.

I guess I shouldn't pay my income taxes. Nor should anyone. After all, the increased spending will help the economy. It will also avoid a recession.

LdN

 

[NJPSU]

Forgiving the loans will be considerably more devastating. Money doesn't just appear. That money which the government is currently receiving is paying for other programs. You take that away, and now taxes need to go up.

The idea that forgiving student loans is good for the economy is an odd one. A myth created by people who do not understand economics.

And sorry if you graduated from law school 10 years ago or close to that we are the almost same age. Which was my initial expectation.

LdN

I'm not advocating for the debt forgiveness, but since when does the government actually raise taxes to make up for a deficit?

We are actually witnessing the exact opposite. Increased deficit spending while cutting taxes.

 

[PeetzPoolBoy]

More commentary from old folks never forced to make such decisions.

Such decisions are age-independent.

 

[LionDeNittany]

I'm not advocating for the debt forgiveness, but since when does the government actually raise taxes to make up for a deficit?

We are actually witnessing the exact opposite. Increased deficit spending while cutting taxes.

It's called "other things being equal". Other things being equal taxes would need to be raised. You could make an equivalent argument that the government would go further into debt. I'm fine with that.

But both are two sides of the same bagel.

I think WB Cincy's basic view that subsidizing tuition is bad I agree with. As I did 10 years ago on the test board. The government becoming the only lender has led us down this odd path of "forgiveness". That said, the loan market was screwed years ago by the government guarantee.

LdN

 

[wbcincy]

Such decisions are age-independent.

Yeah, you just didn't have to make them. The older generations have spent this country into oblivion to make their lives better at the expense of future generations, so don't talk to me about choices younger people should be making.

 

[PSUSignore]

College is the new high school and that's part of the problem. A large majority of high school students seem to feel obligated to go to college when it's not for everyone. Then a number of those that decide to go to college are doing so in majors with limited career prospects. Then these same students act surprised when they do not find jobs and are riddled with debt they cannot afford. A little bit of research and rationalization before deciding on a college and a major would have revealed this problem beforehand in a lot of cases.

I opted for a branch campus of PSU that allowed me to live at home (lowering expenses) and to keep my part time fast food job (income) for my first 2 years. I did this because I didn't want to be in massive debt. Then when I transferred to University Park I also took semesters off for paid internships to build career experience and to also have money allowing me to not work part time during academic semesters. Oh, and I studied engineering which was a high demand major with an average salary for graduates that would allow me to pay off the debt I did take on in a reasonable timeline. Are my decisions the only course of action? Of course not, but it shows a reasonable thought process to ensure financial stability. I'd imagine if you polled underclassmen to see how many would be willing to work a fast food job to help pay for college most would roll their eyes at you, but one breath later would complain that they don't have any money.

Is college tuition getting out of hand? Abso-freaking-lutely, and it needs to be addressed. But those opting to attend college and sign the paperwork for their tuition costs and loans 100% share some of the blame. Many are knowingly going into a contractual agreement without a reasonable plan to hold up their end of the deal.

 

[PeetzPoolBoy]

Yeah, you just didn't have to make them. The older generations have spent this country into oblivion to make their lives better at the expense of future generations, so don't talk to me about choices younger people should be making.

I most certainly made sacrifices relative to friends and peers in order to earn my undergraduate and graduate degrees. The only difference between you and me is that I don't whine about such sacrifices nor did I ever feel entitled to a certain "opportunity" or "outcome".

My wife and I lived really frugally during and after Grad school so that we could accelerate repayment of our incurred debts. Have you tried that strategy?

 

[ILLINOISLION]

Did they give the student’s name that’s $1.5 trillion in debt? He/she should be ashamed being that far in debt.

 

[kgilbert78]

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.

They can be. At least in part. A lot of families I know here are sending their kids to a community college their first two years and then to Ohio State. Saves two years of higher tuition.

Personally, I started at a Commonwealth Campus for much the same reason, though of course, 40 years ago, tuition was actually reasonable (though I did end up with some college debt that I was able to pay off reasonably quickly).

 

[ThePennsyOracle]

My wife and I lived really frugally during and after Grad school so that we could accelerate repayment of our incurred debts. Have you tried that strategy?

This brings up another good point, and it's the lack of insight into financial matters exhibited by Millennials (also my generation). Many are completely unaware of the cost of loan repayment, and colleges aren't exactly offering this on the front page of admissions websites. Education is key here, and many Millennials don't have the right perspective. Financial literacy programs offered by colleges are a laughable joke and when you add in blissfully unaware students....here we are today.

I think wbcincy's original point (and I could be wrong) wasn't about loan forgiveness specifically. It was more about "How does the economy deal with the inevitable slowdown due to high student loan debts?" Things then delved into loan forgiveness and such. I don't have an answer as to how to deal with things economically--I don't personally favor total loan forgiveness--whereas wbcincy sees this forgiveness as an answer to help the economy.

 

[mn78psu83]

This brings up another good point, and it's the lack of insight into financial matters exhibited by Millennials (also my generation). Many are completely unaware of the cost of loan repayment, and colleges aren't exactly offering this on the front page of admissions websites. Education is key here, and many Millennials don't have the right perspective. Financial literacy programs offered by colleges are a laughable joke and when you add in blissfully unaware students....here we are today.

I think wbcincy's original point (and I could be wrong) wasn't about loan forgiveness specifically. It was more about "How does the economy deal with the inevitable slowdown due to high student loan debts?" Things then delved into loan forgiveness and such. I don't have an answer as to how to deal with things economically--I don't personally favor total loan forgiveness--whereas wbcincy sees this forgiveness as an answer to help the economy.

Financial literacy education should begin at the high school level.

LINK: Financial literacy in high schools - only one state gets an A+

Note PA's grade.

 

[ThePennsyOracle]

Financial literacy education should begin at the high school level.

LINK: Financial literacy in high schools - only one state gets an A+

Note PA's grade.

Absolutely, and PA's financial literacy high school education is even more laughable than college.

 

[bdgan]

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 completely agree that student loans are a huge problem but I place half the blame on the students. If they can't afford to repay their loans many should have looked into lower cost state schools and even community colleges for their first two years. They also shouldn't rack up huge debt to major in something that isn't likely to provide a decent return on investment.

That said I agree that the cost of a traditional college education is outrageous.

 

[PSUSignore]

This brings up another good point, and it's the lack of insight into financial matters exhibited by Millennials (also my generation). Many are completely unaware of the cost of loan repayment, and colleges aren't exactly offering this on the front page of admissions websites. Education is key here, and many Millennials don't have the right perspective. Financial literacy programs offered by colleges are a laughable joke and when you add in blissfully unaware students....here we are today.

I agree that basic personal finance knowledge is lacking in general. But the terms of any loan are spelled out in the paperwork. Loan T&C's aren't like skipping to the end of a phone app's terms and conditions to quickly click "accept," the terms of financial agreements absolutely must be reviewed. If they can't understand that, again they share some of the blame for not asking questions or getting help from someone beforehand.

 

[ThePennsyOracle]

I agree that basic personal finance knowledge is lacking in general. But the terms of any loan are spelled out in the paperwork. Loan T&C's aren't like skipping to the end of a phone app's terms and conditions to quickly click "accept," the terms of financial agreements absolutely must be reviewed. If they can't understand that, again they share some of the blame for not asking questions or getting help from someone beforehand.

I don't disagree with you. My point is that due to a lack of education from a young age, there are a ton of college-aged people who have no idea about personal finance, or reading T&Cs. Sure, the onus is ultimately on the borrower--schools, colleges, and the government are doing nothing to help them.

 

[bdgan]

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.

Did you got to college locally and commute for two years, thereby saving on food and housing costs? Did you attend a state university an avoid private tuition rates? Better yet, did you consider an ultra low cost community college for your first two years? Did you consider the payback when you decided to go into debt or were you too young an naive to do that at the time?

 

[ThePennsyOracle]

Did you got to college locally and commute for two years, thereby saving on food and housing costs? Did you attend a state university an avoid private tuition rates? Better yet, did you consider an ultra low cost community college for your first two years? Did you consider the payback when you decided to go into debt or were you too young an naive to do that at the time?

For what it's worth, I went to a community college full-time while working 35hrs/week part time, and saved a ton of money by doing this. I then made the "business decision" to come to Penn State.

I could not afford on campus living or meals, so I teamed up with a friend to rent a 1.5BR apartment at University Terrace (cheapest available at the time). I ate Banquet meals, Celeste pizzas, and sandwiches for 2 years. Heck, my last summer at Dear Old State, the only place I could afford to take my girlfriend (now wife) on a date was CiCi's for $5/person. I worked between 25-35 hours per week PT while going to school FT at Penn State.

My student loan payments were initially pushing $1000/month. I had no parental or family support and I did what I could to lower costs as much as possible. This was still the result.

 

[fairgambit]

"There is no such thing as a free lunch."

That is all I have to say on this subject.

 

[RochLion]

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.

There's over 9000 college choices out there and out of that I think you can find at least some reasonable options and still come away with a good education and experience.

Parents, teachers, guidance counselors have to explain to kids that there's a price to be paid for going to some elite private college for a degree that could be easily had at a community college. It's a choice.

All my kids are going to SUNY schools and are getting fine educations for what they are studying. They got accepted to many private and out-of-state schools but decided to find a SUNY college that fit their needs and desires. Lot of their friends went off to some pricey schools ... and then came back to a SUNY school after realizing how expensive it was going to be.

 

[ILLINOISLION]

"There is no such thing as a free lunch."

That is all I have to say on this subject.

I respectfully disagree!

There are a lot of “buy one, get one free” deals out there. Just cut a Burger King coupon out of today’s ads: “Buy a Whopper, get a Whopper Free”.

 

[Post_ShockTherapy_MackDaddy]

LINK: Just another milestone

They're in my thoughts and prayers.

 

[fairgambit]

I respectfully disagree!

There are a lot of “buy one, get one free” deals out there. Just cut a Burger King coupon out of today’s ads: “Buy a Whopper, get a Whopper Free”.

It is not free. You pay for it with gastrointestinal distress.

 

[Nitwit]

Some for profit colleges like Phoenix University counsel their students into obtaining student loans knowing full well the student is never going to succeed in school. Of course not for profit traditional colleges help their applicants obtain loans as well. One problem is that too many kids are choosing college instead of learning a trade or choosing vocational education. Not every kid belongs in college but our society values that.

 

[Langmuir]

I will never let me kids get a federally subsidized student loan. That debt can never be discharged even in bankruptcy, unlike most other forms of debt. That is not a risk I am willing to take. Thankfully, I am currently in a financial position that we don't need to get those student loans but that is not true for many students and their families.

 

[mn78psu83]

They're in my thoughts and prayers.

That's all ya got?

 

[Judge Smails]

Knew there would be a lot of "boot straps" advice in this thread.
Go look at how the rest of the first world manages to make college either free or very affordable for young people.

Here it's expensive as hell and people still manage to blame the students. This country is a ship of fools.

 

[roswelllion]

This x10000000.

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.

it is going to be a challenge but [and I know you said you don't advocate loan forgiveness] this is a hard lesson they need to learn. If for some reason these loans were forgiven two bad things would IMO opinion happen
1. Educators would fully expect this to continue and the meteoric rise of tuitions would continiue
2. The lesson for those whose loans were forgiven would be "as long as we all do it we'll get bailed out again if it goes wrong" I.E. another housing bubble with folks buying more than they can afford.

I am all for creative solutions [make the loans all 0 interest] as long as a significant piece of the "pain" is felt by colleges, Universities, and borrower's who largely caused the problem. Without that it will happen again in another area.

Speaking of out of the box solutions. I have read a lot about the huge amount of generational wealth that will be passed on when we baby boomers die off. I wonder how much of the $1.5 trillion is owed by families with some estate wealth? maybe defer the bill until the parents die off and pay it then?
Or maybe go to these wealthy universities and suggest for every $1 they would fund from their endowments [yea right] the govt. would reduce by a $1 up to 50%. In effect borrower pays 50% university pays 25% and govt forgives 25%

 

[Post_ShockTherapy_MackDaddy]

That's all ya got?

Well, I suppose we could cancel ALL debts after 7 years. It is in the Bible. But, I think God was just joking when he said that.

Deuteronomy 15:1 States (and I quote): "At the end of every seventh year you must cancel the debts of everyone who owes you money."

http://biblehub.com/deuteronomy/15-1.htm

 

[wbcincy]

I most certainly made sacrifices relative to friends and peers in order to earn my undergraduate and graduate degrees. The only difference between you and me is that I don't whine about such sacrifices nor did I ever feel entitled to a certain "opportunity" or "outcome".

My wife and I lived really frugally during and after Grad school so that we could accelerate repayment of our incurred debts. Have you tried that strategy?

Once again, you aren't reading what I've said. I don't personally "need" the forgiveness. Im paying mine and doing fine. Get out of your little box where you think every person who mentions forgiveness is asking for a hand out. I'm talking about the disaster that the student loans are going to cause the economy if something isn't done about them.

 

[Post_ShockTherapy_MackDaddy]

Knew there would be a lot of "boot straps" advice in this thread.
Go look at how the rest of the first world manages to make college either free or very affordable for young people.

Here it's expensive as hell and people still manage to blame the students. This country is a ship of fools.

Yeah, but, we still have God on our side. Maybe you should move to one of those Godless Countries you speak so highly of.

 

[wbcincy]

Did you got to college locally and commute for two years, thereby saving on food and housing costs? Did you attend a state university an avoid private tuition rates? Better yet, did you consider an ultra low cost community college for your first two years? Did you consider the payback when you decided to go into debt or were you too young an naive to do that at the time?

Did you read this thread? I went to a branch for 2 years, worked during school, and worked for 2 years after school to pay off the remainder of my undergrad debts before starting grad school.

I also stated I was aware of the debt I would incur in grad school and consciously made the choice and don't regret it. I would do it again. I'm also repaying my loans and can afford to do so. For the 100th time this thread, I'm not asking for a personal handout, I'm simply stating that the current condition, which the government caused, is going to wreck our economy. And forgiving the loans or large portions of them may be the only way to avoid that.

 

[Judge Smails]

Yeah, but, we still have God on our side. Maybe you should move to one of those Godless Countries you speak so highly of.

I think God is more worried about who is scoring touchdowns or allowing their team to win NBA playoff games though.

 

[4rosco]

Knew there would be a lot of "boot straps" advice in this thread.
Go look at how the rest of the first world manages to make college either free or very affordable for young people.

Here it's expensive as hell and people still manage to blame the students. This country is a ship of fools.

The rest of the world focuses on education and are not in the hospitality or sports businesses either.

 

[Woodpecker]

I think God is more worried about who is scoring touchdowns or allowing their team to win NBA playoff games though.

Or blessing high school students with D1 offers

 

[BiochemPSU]

People should be allowed to refinance their interest rates on the loans. People who pay them back timely should get bigger tax incentives at the end of the year.