Help! Defaulted Student Loans (and other debt fun)

[tshile]

And just to be clear - I’m less trying to push this specific idea, and more just showing there’s a lot of ideas to discuss if one were actually interesting in trying to fix this problem. 
 

i even like @PeterMPidea more and it’s only been discussed for 5 minutes amongst 3 people. 
 

im sure people with more time, being a little more clever, could come up with tons of ideas to consider. 
 

but that requires people wanting to sit down and brainstorm on how to fix the issue. 

[steve09ru]

In looking into things more, it seems like a lot of this boils down to a number of different things that are not necessarily requirements of college.  They include:

 

10% of undergrads study abroad (average ~$14k per semester)

https://www.goabroad.com/articles/study-abroad/average-cost-study-abroad-programs

 

21% of undergrads go to an out-of-state college (average ~$9k more per year)

https://www.statista.com/statistics/236069/share-of-us-students-who-enrolled-in-a-college-in-their-own-state/

https://www.heath.gwu.edu/state-vs-out-state-tuition#:~:text=the public institution.-,What is the cost difference on average between in-state,average cost difference is %248%2C990.

 

Public non-profit schools have ~12% who owe more than $40k, Private non-profit schools have ~20% who owe more than $40k

30% of 4 year finish with no debt

25% of 4 year finish with less than $20k

50% of those who went to for-profit schools have >$40k in debt

59% of those who attend 2-year schools graduate without debt

https://www.brookings.edu/policy2020/votervital/who-owes-all-that-student-debt-and-whod-benefit-if-it-were-forgiven/

 

50% of all outstanding student loan debt is held by those who attend graduate school or greater

https://www.cnbc.com/2021/07/16/graduate-students-owe-around-50percent-of-all-student-debt.html#:~:text=U.S. student debt has increased,of all outstanding student debt.

 

Costs are high, not arguing that but a lot of this can be avoidable.

Edited May 6, 2022 by steve09ru

[tshile]

Private, for profit, over seas, and out of state should all automatically be off the board. 
 

At least at this time. 
 

I’m not saying we can never address it. But if we’re piecemeal building this. Then people who went as far out of the way as possible to make their education as expensive as possible, are at the bottom of the list. 
 

i can’t think of a group that should be lower than them. They’re dead last on who gets anything, to me. 

[bearrock]

Another option students should really look into is doing your 100's and 200's at community colleges.  You get much more value for your money.

[steve09ru]

4 minutes ago, tshile said:

Private, for profit, over seas, and out of state should all automatically be off the board. 
 

At least at this time. 
 

I’m not saying we can never address it. But if we’re piecemeal building this. Then people who went as far out of the way as possible to make their education as expensive as possible, are at the bottom of the list. 
 

i can’t think of a group that should be lower than them. They’re dead last on who gets anything, to me. 

I would even extend that to those who continued further past bachelor's.  

 

• 60% of undergraduate certificate recipients owe an average of $16,940 each in federal loans.
• 42% of associate’s degree recipients owe an average of $21,890 each in federal loans.
• 63% of bachelor’s degree holders owe an average of $31,790 in federal loans.
• 54% of master’s degree holders owe an average of $70,070 in federal loans.
• 45% of doctoral degree recipients owe an average of $118,360.
• 71% of professional degree holders owe an average of $199,540.

https://educationdata.org/student-loan-debt-statistics#:~:text=In May of 2020%2C 9,behind on their loan payments.

 

I also found this interesting as well and the people who should be targeted for loan forgiveness:

 

Loan Forgiveness Eligibility

The process of student loan forgiveness appears to be muddled by ambiguous processes and errors. Borrowers are often unaware of actually being eligible for student loan forgiveness. Additionally, borrowers who should be eligible are denied because of negligence or misinformation by their loan servicer.

• The Higher Education Act, which expanded loan forgiveness in 2008, has never been funded by Congress.
• 0.7% of eligible borrowers will eventually benefit from student loan forgiveness.
• 6.7% of eligible student borrowers apply for loan forgiveness.
• $95.45 per indebted student borrower is the rate at which the federal government forgives student loans.
• The percentage of applications that are rejected each year is steadily rising.
• A little over 1% of applications for Public Service Loan Forgiveness have been approved since the program’s inception.
• In the program’s first year, 0.032% of applications were approved.
• 3 million student loan borrowers are eligible to apply for PSLF;
  Just over 200,000 have applied.
• Over 25% of the labor force in the US is in public service with over a million student loan borrowers either eligible or approaching eligibility for student loan forgiveness
• $26.9 million of the $700 million allocated for Public Service Loan Forgiveness Program was approved by the Department of Education.
• Other reasons for student loan forgiveness include institutional dishonesty and fraud.

https://educationdata.org/student-loan-debt-statistics#:~:text=In May of 2020%2C 9,behind on their loan payments.

4 minutes ago, bearrock said:

Another option students should really look into is doing your 100's and 200's at community colleges.  You get much more value for your money.

100%

 

Also, utilizing employer benefits for masters, classes, etc.  Too many jump into that way too quickly when it doesn't necessarily help for your entry-level roles coming out of college.

[PleaseBlitz]

On 1/6/2021 at 10:11 AM, PleaseBlitz said:

Personally, I think everyone should have to pay back their student loans, but the interest should be knocked down to 0.5%.  The 0.5% will pay the cost of servicing (which is a real cost), but otherwise remove the profits for student lending.  This would dramatically reduce the burden on borrowers.  The 2019-2020 federal student loan interest rates are currently 4.53% for undergraduate loans, 6.08% for unsubsidized graduate loans and 7.08% for direct PLUS loans.  That adds thousands or tens of thousands of dollars to the total repayment and, as is often the case, kills people doing income-based repayment because the interest compounds until they are just totally ****ed.  So basically, I think student should pay back the money the borrowed with nearly zero interest. 

 

I still stand by this as the solution.  If people made a commitment to pay back their loans, they should pay them back.  But having to pay usurious interest rates on government-guaranteed loans is outrageous.  

 

As an example, if you take out a $100,000 loan to pay for college at the current rate for a Grad Plus loan, and you have to do income-based repayment so it takes you 15 years to pay it off, you pay an extra $55,000 in interest.  So, more than half again your original note. 

Edited May 6, 2022 by PleaseBlitz

[steve09ru]

1 minute ago, PleaseBlitz said:

 

I still stand by this as the solution.  If people made a commitment to pay back their loans, they should pay them back.  But having to pay usurious interest rates on government-guaranteed loans is outrageous.  

Interest rates are definitely a solution.  No reason they should run as high as they do.  It should be 3-4% max

[tshile]

Yeah I’d be ok with dropping g the interest rate entirely. 
 

and even looking at current loans and relieving an amount equal to interest already paid.

[Ball Security]

1 hour ago, tshile said:

Private, for profit, over seas, and out of state should all automatically be off the board. 
 

At least at this time. 
 

I’m not saying we can never address it. But if we’re piecemeal building this. Then people who went as far out of the way as possible to make their education as expensive as possible, are at the bottom of the list. 
 

i can’t think of a group that should be lower than them. They’re dead last on who gets anything, to me. 

Anecdotal, but my Virginia nephew attends a public Ohio University and pays less than he would for the in-state sticker price of VT and JMU.

[tshile]

Just now, Ball Security said:

Anecdotal, but my Virginia nephew attends a public Ohio University and pays less than he would for the in-state sticker price of VT and JMU.

that and I’ve been thinking - maybe you just work with their instate tuition. Like - you don’t get 0, you just get what you would have got if you chose the cheaper option.
 

 

[PeterMP]

1 hour ago, bearrock said:

Another option students should really look into is doing your 100's and 200's at community colleges.  You get much more value for your money.

 

This all gets hard in many cases.  You do have to balance long term benefits vs. short(er) term costs.

 

For example in the sciences there are benefits to getting into a 4 year institution where you can go research early to get that experience. 

 

At some 4 year institutions, getting real research experience is competitive and coming in as a junior with no research experience might limit you.  If you plan on going to med. school or a graduate program in the sciences having extensive research experience is useful.  But even for getting a job, it can look good. 

 

Also just in my experience, the education that people seem to get from a CC (dealing with students that transfer from CC's) seems to be less good than a 4 year school.  I'm pretty sure that people teaching at a CC are more likely to be teaching multiple classes at multiple places and so are less committed to a group of students.

 

From what I know from talking to transfer students from CC schools also have less networking activities and just generally less career prep opportunities.  Where I work we have pretty good connections with our alumni and then we bring our alumni back to talk about their experiences and so our students are exposed to that their 1st year.  Generally, CC transfer students haven't had that experience/exposure.

 

For most people, there might not be a big difference between going to your local 4 year state institution and a CC.  But I wouldn't broadly suggest that people that can succeed at a 4 year school and have an idea of what they want to do to go to a CC.

 

Study a broad is also a case where it depends on the situation.  I've seen different places do it differently.  If you can get into a program over seas and then use credits from it at a US school while only paying over seas costs, that can actually save you money because some times over seas costs are less and no matter where you live you are paying to live so that cost essentially offsets (unless you are living at home when at school in the US).  Other places it is a more expensive option.

 

Now, I do believe bad choices and easy loans are part of the problem (thought not as much as some people).  Take the person in this story.

 

https://hechingerreport.org/some-experts-have-a-new-idea-to-help-students-afford-college-more-federal-loans/

 

She knows that she and her parents can't afford Clemson.  She doesn't really have any reason for going there other than it looks nice and is saddling not just herself but her parents with debt so she can enjoy the view where she goes college and based on the story she had less expensive choices.  It is going to be hard to do much about rising costs unless we can greatly curb this type of thinking.  If Clemson has a choice between raising tuition to spend money to have the campus look nice or holding the line on tuition, this type of thinking makes the choice clear.  And I don't think more easier loans federal assistance helps with that.

Edited May 6, 2022 by PeterMP

[PleaseBlitz]

A lot of the value of a 4 year college is also getting out on your own and figuring out who you are without parental supervision, and just learning how to deal with people.  We should not be taking that away from the 85-90% of students that won't end up in default.  

 

 

36 minutes ago, PeterMP said:

Study a broad

 

Sign me up. 

Edited May 6, 2022 by PleaseBlitz

[PleaseBlitz]

41 minutes ago, PeterMP said:

She doesn't really have any reason for going there other than it looks nice

 

The article does not support this proposition.  It says "Tatum Johnson was hooked on the view from Clemson University’s North Green soon after she set foot on the South Carolina institution’s campus for a tour while she was still a high school senior."  It also says that "The campus and Clemson’s academic reputation sealed the deal for Johnson to enroll."

 

Clemson is a name-brand ACC school ranked #75 overall in the nation by US News, the highest rated public school in SC, and among the top 30 public universities in America. 

[tshile]

Oh I’m not even talking about default. 
 

Im simply talking about taking out the loan. 
 

if it’s such a bad deal cause so many people make bad decisions and are too young to know better or any of the other various excuses as to why we should just relieve them of this debt, then the point was to create a scenario where they are capable of making better decisions and less likely to be victims of predatory tactics 

[PleaseBlitz]

8 minutes ago, tshile said:

Oh I’m not even talking about default. 
 

Im simply talking about taking out the loan. 
 

if it’s such a bad deal cause so many people make bad decisions and are too young to know better or any of the other various excuses as to why we should just relieve them of this debt, then the point was to create a scenario where they are capable of making better decisions and less likely to be victims of predatory tactics 

 

Fair enough, I was trying to think of a metric to quantify success vs. failure.  End of the day, college, like everything else, is a risk/reward, net tangible benefit analysis, it's just hard to do that analysis at 17 or 18 when you don't really know who you are yet (and its hard to figure out who you are when you are still living with your parents).  I also quibble with the "so many people make bad decisions" formulation; the vast vast majority of people with student loans pay them.  It sucks for them, but they pay them.  And they pay them because going to college allowed them to get a much better job than they could have otherwise and so they are better off at the end of the day.  You just don't hear about this vast majority because the squeaky wheels get the attentions, or whatever (which is why I'm not in favor of cancelling large tranches of student loans, but strongly favor making the interest rates close to zero). 

 

Agree very much that predatory tactics should be expunged to the extent possible.  For-profit colleges should mostly be killed off.  Anywhere that gives you credit for your "job experience" should be killed off.  

Edited May 6, 2022 by PleaseBlitz

[Ball Security]

9 minutes ago, PleaseBlitz said:

 

The article does not support this proposition.  It says "Tatum Johnson was hooked on the view from Clemson University’s North Green soon after she set foot on the South Carolina institution’s campus for a tour while she was still a high school senior."  It also says that "The campus and Clemson’s academic reputation sealed the deal for Johnson to enroll."

 

Clemson is a name-brand ACC school ranked #75 overall in the nation by US News, the highest rated public school in SC, and among the top 30 public universities in America. 

I just assumed that Clemson was a private school.  The network alone makes this a better choice than most SC schools.

Clemson: 14,118 20/21 tuition.

Claflin University: 16,476

Lander University: 10,700

[steve09ru]

the other things that needs to go away in my opinion after high school is required curriculum and credits that are irrelevant for what i want to do for my career.  I don't need to take a philosophy, history, english or university 101 class (all of these random electives) to be an engineer (insert major) - you can cut your time by half. 

Edited May 6, 2022 by steve09ru

[tshile]

Eh I may take issue there. 
 

there’s a general point of a well rounded education aspect of college. 
 

i don’t know that it should be a tunnel vision thing. Like a trade school. 
 

Plus, many people still struggle with basic math, writing, or science (or really any of the core stuff). 
 

 

[steve09ru]

Just now, tshile said:

Eh I may take issue there. 
 

there’s a general point of a well rounded education aspect of college. 
 

i don’t know that it should be a tunnel vision thing. Like a trade school. 
 

Plus, many people still struggle with basic math, writing, or science (or really any of the core stuff). 
 

 

You can layers those into the core curriculum though where it makes sense.  You can still offer but I don’t think it should be forced upon folks who it may not necessarily benefit from it, or need it.

[youngestson]

1 hour ago, Ball Security said:

Anecdotal, but my Virginia nephew attends a public Ohio University and pays less than he would for the in-state sticker price of VT and JMU.

The variation in college costs between states is wild. 

[PleaseBlitz]

29 minutes ago, steve09ru said:

the other things that needs to go away in my opinion after high school is required curriculum and credits that are irrelevant for what i want to do for my career.  I don't need to take a philosophy, history, english or university 101 class (all of these random electives) to be an engineer (insert major) - you can cut your time by half. 

 

27 minutes ago, tshile said:

Eh I may take issue there. 
 

there’s a general point of a well rounded education aspect of college. 
 

i don’t know that it should be a tunnel vision thing. Like a trade school. 
 

Plus, many people still struggle with basic math, writing, or science (or really any of the core stuff). 
 

 

 

Liberal arts like english, philosophy and the much maligned ART APPRECIATION classes teach you how to think, which is a skill of general applicability that not everyone has.  Engineering classes teach you how to do a thing.  The ability to do that thing is really important and very valuable on the open market, but IMO taking 15 credit hours or so of learning how to think about **** is really important to a lot of aspects of ones life. 

[steve09ru]

Just now, PleaseBlitz said:

 

 

Liberal arts like english, philosophy and the much maligned ART APPRECIATION classes teach you how to think, which is a skill of general applicability that not everyone has.  Engineering classes teach you how to do a thing.  The ability to do that thing is really important and very valuable on the open market, but IMO taking 15 credit hours or so of learning how to think about **** is really important to a lot of aspects of ones life. 

I’m not arguing that they aren’t important but thinking back to what I took and why I took certain classes (ease and convenience).  15 hours is different than 45-60 hours and why I mentioned rolling those core type critical thinking classes into core curriculum and relevant for ones desired career.  A lot of those are extensions of what is taught in high school.  The business classes I took, helped to think critically through simulations and research, communications/business writing, etc.
 

I honestly can’t remember what electives in gen ed I actually gained a lot from.  English was basically what I did in 10-11th grade, history- same, bowling, art- we learned to draw/paint a little more in depth than high school.  

[JCB]

Your lack of memory is a long way from an argument. Certainly wouldn’t pass muster in my humanities class, homie. 🤓

[steve09ru]

38 minutes ago, JCB said:

Your lack of memory is a long way from an argument. Certainly wouldn’t pass muster in my humanities class, homie. 🤓

Those memories are a fog 😂

[PeterMP]

5 hours ago, steve09ru said:

I honestly can’t remember what electives in gen ed I actually gained a lot from.  English was basically what I did in 10-11th grade, history- same, bowling, art- we learned to draw/paint a little more in depth than high school.  

 

Sounds you should have challenged yourself some more and taken some harder classes.

 

 

 

😉