The Student Loan Scheme - Gateway Drug to Debt Slavery

[Blart]

Great, non-partisan image that sums up our country's student loan problem.


http://www.collegescholarships.org/research/student-loan-scheme.jpg



from:
http://www.collegescholarships.org/
&
http://byjess.net/ (who also made a great government spending graph: http://www.deathandtaxesposter.com/)

[Garcia Bronco]

I work in the Student Loan industry and that picture is a bunch of ****. Where to begin.

Yes...if you don't pay your student loan you can be wage garnished and your IRS "refunds" could be used to pay the money you borrowed. This is not unreasonable. Anyone who thinks so is a crazy person thinking they are entitled to a free lunch. Further after 20-25 years the debt is forgiven. I've never seen someone have a state lic revoked, but even that wouldn't be unreasonable. Nor is getting disability checks (free money for not working) garnished.

Ted Kennedy sponcered that legislation and George Bush signed it in 2007 that took the points out of the loan guaranteed by the Federal Government to a private lender. It is correct that Obama signed legislation to remove private lenders from being able to lend money for student loans. Today only the Feds can make a loan for education, but there are still 4 companies that collect or service the loans. There are many stop gaps that can help ease the burden of paying a student loan.

If you want to fix the demand for a college education then we as a country need to change the way we are teaching children at the high school level as well as what they're taught. We also probably need to extend public education to k-14 to give young students more time to mature.

But the idea that our Government is doing something wrong at the DE, but providing taxpayer money to invest in education is laughable. What we have her is people that borrow money and don't want to pay it back because they decided on the wrong school or a bad ROI degree...guess what...you have no one to blame but yourself. You made that decision. Not the school and not our government.

[Blart]

Nice to have someone in the industry here.

Why do you think student loan default rates are rising (http://www.nytimes.com/2011/09/13/education/13loans.html) so quickly?

I assume you provide loans to for-profit colleges, seeing that's where half of our federal loan money goes. Why are a quarter (http://www.usatoday.com/news/education/story/2011-10-18/student-loans-for-profit-college/50819470/1)of the students defaulting within 3 years, without a diploma?

I can't imagine how it would help our economy to have so many Americans mired in debt, without any recourse (bankruptcy) to escape.

[Garcia Bronco]

Nice to have someone in the industry here.

Why do you think student loan default rates are rising (http://www.nytimes.com/2011/09/13/education/13loans.html) so quickly?

I assume you provide loans to for-profit colleges, seeing that's where half of our federal loan money goes. Why are a quarter (http://www.usatoday.com/news/education/story/2011-10-18/student-loans-for-profit-college/50819470/1)of the students defaulting within 3 years, without a diploma?

I can't imagine how it would help our economy to have so many Americans mired in debt, without any recourse (bankruptcy) to escape.

People default for a number of reasons. I used to sit near the rehab department and dude...you would not believe the kind of things people say. My personal favorite was. "My mom made me go to college so I should not have to pay this back. She should." If I had to sum up in one sentence why people default; they make bad personal choices. Defaults are going down at my company, because we put them on a payment plan to where they are paying something...anything.

Bottom line is college isn't for everyone. Not everyone needs to go to college and not everyone can go to college. I think we should raise rates on the loans to discourage people from borrowing money. We would need to change some of the things we do at the high school level and maybe even earlier. I am a big proponent of what Germany does by seperating out kids that can't hang, but they end up learning a trade.

There are all sorts of tools and programs to help people with their debt including but not limited to Deferments, Forbearance, and Rehabilation. If one is having trouble paying back student loans then contact your loan servicer and see if they can help.

[Requiem]

I consolidated all my Stafford Loans immediately after college, because it was the smart thing to do. So, I owe the Government one lump sum, and I owe just a little on my Perkins that was serviced by my University. Loan Servicing Agents have always been a help to me. All it takes is your own personal will and fifteen minutes of your time to explain a situation over the phone and they handle it well.

If you aren't able to find work or having trouble, they will give you a sixth month deferment. No interest accrues during this time. That should be plenty of time for you to find a job. A forbearance period will still accrue interest. You can pay the interest during that time, but if you can't -- it just ends up going onto the principal after it is over. Considering that the rates are pretty low, it isn't that big of a deal.

If you do have a job, but it isn't as well paying as you would like, they will do an income based repayment plan that is more affordable to you so you can make ends meet. They can only take a certain amount of your wages as part of repayment anyways, IIRC. They might ask you for paperwork in addition to the phone call, but that is not hard to do.

(1) Students need to take Entrance and Exit Loan Counseling more seriously -- so they know what they are getting into and what options are truly available to them. Most of the people I know who did this just clicked "next" through all the online documents and didn't take it seriously at all. If they would have, they would have known about the good options available to them and their responsibilities.

(2) Students need to make a cost/benefit analysis of actually going to college. I know kids who didn't go to college who are doing quite well for themselves because they went to a tech school instead and learned a good trade. College isn't for everyone. Universities should be raising standards across the board to ensure dolts don't get in and waste their time and money, and that the University isn't wasting their time on them. Minimum 3.0 to get into any college in the USA and a good standardized test score. There is no reason for kids who get 2.0's and can shoot hoops to be allowed into higher education. Obviously they didn't give a crap in High School, why would they then? They only let those turds get in to get revenue from Athletics. It is pathetic.

(3) If you were a good student 3.0+ in college, you will get your interest rates reduced. If you make your payments on time or have them automatically debited out of a bank about, it will lower your stuff by another half percent or so. There are rewards for being a good student and responsible person.

(4) I like pie. YOU LIKE PIE?

This isn't to say that there aren't some issues going on with the loaners/lenders, but I agree with Garcia that a lot of the abuse comes from people who just don't know what the Hell is going on or aren't a responsible borrower. I think that they should bring up the cost of college education and bring in people about loan counseling and stuff in High School to make kids aware of what they are getting into. It is a big decision to make for anyone, and they should have a grasp of it beforehand. My counselors in High School were terrible, and nothing was ever brought up to us. We had colleges and universities visit our basketball arena and set up shop, but that was about it. No counselor ever sat down with me and really planned out my college, I actually went to them for help and all they gave me was an almanac of schools to look over. Well, that isn't true -- they also asked me what I kind of wanted to do and showed me some schools in the area that might be a good fit.

That is my 27 cents on the issue. Go Broncos.

[pricejj]

You could always work 70 hours a week for 3 years (like I did) to pay them off. Unless you're too good for the grocery store.

[Requiem]

You could always work 70 hours a week for 3 years (like I did) to pay them off. Unless you're too good for the grocery store.

Most people get the mentality that getting a diploma entitles them to a great job. It doesn't. Work is work. Sometimes you gotta bust ass to make it through. Good on you for doing **** the hard way!

[Blart]

Not everyone needs to go to college and not everyone can go to college.

How do you feel about for-profit colleges giving the hard-sell to people, even those who are likely to never get a degree (or get a worthless degree - i.e. an unaccredited nursing degree) and will probably default on their loan?

<object width = "512" height = "328" > <param name = "movie" value = "http://www-tc.pbs.org/s3/pbs.videoportal-prod.cdn/media/swf/PBSPlayer.swf" > </param><param name="flashvars" value="video=1485280975&player=viral&chapter=1" /> <param name="allowFullScreen" value="true"></param > <param name = "allowscriptaccess" value = "always" > </param><param name="wmode" value="transparent"></param ><embed src="http://www-tc.pbs.org/s3/pbs.videoportal-prod.cdn/media/swf/PBSPlayer.swf" flashvars="video=1485280975&player=viral&chapter=1" type="application/x-shockwave-flash" allowscriptaccess="always" wmode="transparent" allowfullscreen="true" width="512" height="328" bgcolor="#000000"></embed></object><p style="font-size:11px; font-family:Arial, Helvetica, sans-serif; color: #808080; margin-top: 5px; background: transparent; text-align: center; width: 512px;">Watch <a style="text-decoration:none !important; font-weight:normal !important; height: 13px; color:#4eb2fe !important;" href="http://video.pbs.org/video/1485280975" target="_blank">College Inc.</a> on PBS. See more from <a style="text-decoration:none !important; font-weight:normal !important; height: 13px; color:#4eb2fe !important;" href="http://www.pbs.org/wgbh/pages/frontline/" target="_blank">FRONTLINE.</a></p>

[Requiem]

Don't feel sorry for the people who buy into that stuff. The reason they do that crap is because they were too dumb to get into a real school or do not understand what getting an education is about. Their own fault.

[Blart]

Don't feel sorry for the people who buy into that stuff. The reason they do that crap is because they were too dumb to get into a real school or do not understand what getting an education is about. Their own fault.

Alright, let's assume for a moment that I don't think fraud is wrong.

What if I'm sorry for the taxpayers? What if I'm sorry for the loss to our economy from putting so many people in debt? What if *I* don't like paying for Americans to become ill-educated debt slaves?

[bpc]

Waaaaaaaaaaaaah! Pay my bills. Lol.

Some folks will stop at nothing until sustinence is guaranteed. Get an education, work hard, good things happen. It's amazingly simple.

[barryr]

Waaaaaaaaaaaaah! Pay my bills. Lol.

Some folks will stop at nothing until sustinence is guaranteed. Get an education, work hard, good things happen. It's amazingly simple.

Agreed, we have people in this country who are never taught to work to earn what they get and expect others to do it for them while they get the reward. This handout society does not make us better.

[cutthemdown]

The problem with lots of low interest loans is that it just entices colleges and universities to gouge students even more. People have to come to the realization we can't solve all our problems by throwing money at it.

[Boomhauer]

...
I assume you provide loans to for-profit colleges, seeing that's where half of our federal loan money goes. Why are a quarter of the students defaulting within 3 years, without a diploma?
...

While banks getting a middle-man cut of federal student loans is one problem, the volume of student debt is another socioligically based one. Our eductaton system is designed as daycare for 5yr-olds to 22yr-olds instead of teaching/developing kids and then preparing them for the workforce.
It's a common belief that everyone needs to go to college, even if it's to get worthless degrees like communication, psychology, marketing, manegment, pre-law, etc. Mostly this is an agenda to mold adults into lifes as cubicle tools and financial slavery instead of an opportunity to gain usefull knowledge to better society.
That's how the nation ends up with stockpiled, wasted debt that cannot be repayed, but is necessary for Universities to pay the bills and make profit - similar to Obamacrae where he want's the healthy to be unnecessarily tapped to cover expenses and profit insurance companies.

[bpc]

Educational system needs to be totally overhauled from the K-12 level. Same could be said about Universities. They waste the first two years of your education taking random electives forcing people to jump through hoops and pay out the nose to get into majors they want. Trade specific universities could easily create a niche and revolution of how our collegiate educational system function while creating a more competitive environment financially. At the end of the day, 85% or less, it matters in a profession where you got your education from, just that you have a degree. That 15% would be specific professions.

[Garcia Bronco]

How do you feel about for-profit colleges giving the hard-sell to people, even those who are likely to never get a degree (or get a worthless degree - i.e. an unaccredited nursing degree) and will probably default on their loan?

<object width = "512" height = "328" > <param name = "movie" value = "http://www-tc.pbs.org/s3/pbs.videoportal-prod.cdn/media/swf/PBSPlayer.swf" > </param><param name="flashvars" value="video=1485280975&player=viral&chapter=1" /> <param name="allowFullScreen" value="true"></param > <param name = "allowscriptaccess" value = "always" > </param><param name="wmode" value="transparent"></param ><embed src="http://www-tc.pbs.org/s3/pbs.videoportal-prod.cdn/media/swf/PBSPlayer.swf" flashvars="video=1485280975&player=viral&chapter=1" type="application/x-shockwave-flash" allowscriptaccess="always" wmode="transparent" allowfullscreen="true" width="512" height="328" bgcolor="#000000"></embed></object><p style="font-size:11px; font-family:Arial, Helvetica, sans-serif; color: #808080; margin-top: 5px; background: transparent; text-align: center; width: 512px;">Watch <a style="text-decoration:none !important; font-weight:normal !important; height: 13px; color:#4eb2fe !important;" href="http://video.pbs.org/video/1485280975" target="_blank">College Inc.</a> on PBS. See more from <a style="text-decoration:none !important; font-weight:normal !important; height: 13px; color:#4eb2fe !important;" href="http://www.pbs.org/wgbh/pages/frontline/" target="_blank">FRONTLINE.</a></p>

Snake oil salesmen have always been a part of society. I don't consider those places actual colleges. It's continuing education, but still...if you get your degree from a place that spams ads at 2:00 am...it might not be the best place to go. But my answer to this is ultimately the same...no one has put a gun to anyone's head and made them sign a note for a loan.