Just how bad are these students loans?

[LegendKiller]

I think people feel the govt should not be making a profit off of student loans.

Repeat after me. There is no profit on student loans. It is a fucking joke, a political ploy to make people froth up and be used as a convenient strawman.

As you can see, I have a pretty in-depth knowledge of the workings of the student loan pool.

How can you even come close to saying there is a profit when you yourself are part of the reason there is no profit. The government will lose money hand over fist on IBR.

 

[Wreckem]

Repeat after me. There is no profit on student loans. It is a fucking joke, a political ploy to make people froth up and be used as a convenient strawman.

As you can see, I have a pretty in-depth knowledge of the workings of the student loan pool.

How can you even come close to saying there is a profit when you yourself are part of the reason there is no profit. The government will lose money hand over fist on IBR.

Only ~200k are on ibr/paye and it will only expand because the govt is trying to steer people to ibr/paye to hide/"lower" the default rate. The number of people on track for pslf is next to nothing. Not to mention the govt is going to make a money on the 20 year loan forgiveness because it is a plan for people who are bad at math. Atleast that's how it is currently set up. And yes they do profit off of individual loans. Mine not so much because of the public policy incentive that was passed by a bi-partisan effort under Bush. But the average person pays their student loans, and yes the govt makes money off of them. It's the delinquents they lose money on but that goes for all of society. The honest people pay for the losers who don't pay and that's going to happen no matter what changes they make. It's like those that work pay for those who don't via taxation.

My issue is different treatment for different students. Those with loans from prior to 2006 have loans in the low 2 range. Those that took out loans between 2006 and 2009 are at 6.8. Those who took out loans later have loans substantially lower, many with 4% and lower. Why are people who went to school in 2006 to 2009 unfairly treated/punished?

And personally I'd be okay with the proposed cap on pslf so long as they make the 20 year forgiveness non taxable.

 

[LegendKiller]

If you knew shit you'd know only ~200k are on ibr/paye and it will only expand because the govt is trying to steer people to ibr/paye to hide/"lower" the default rate. The number of people on track for pslf is next to nothing. Not to mention the govt is going to make a money on the 20 year loan forgiveness because it is a plan for people who are bad at math. Atleast that's how it is currently set up. And yes they do profit off of individual loans. Mine not so much because of the public policy incentive that was passed by a bi-partisan effort under Bush. But the average person pays their student loans, and yes the govt makes money off of them. It's the delinquents they lose money on but that goes for all of society. The honest people pay for the losers who don't pay and that's going to happen no matter what changes they make. It's like those that work pay for those who don't via taxation.

The plans to expand IBR/PAYE will put the number far in excess of that.

Of course they profit off of individual loans. That's like saying a subprime auto lender may profit off of 10 loans but have 15 default and not be profitable. Overall, as I have shown mathematically, they are losing money. IBR/PAYE has even been shown to lose money, mainly because while it has some people who are "bad at math", many are not and know that a drastically reduced payment amount of immensely profitable to the borrower in many cases.

 

[dmcowen674]

Just how bad are these students loans?

I don't get it, maybe I don't fit into the typical student loan box. When I graduated my M.S. (Computer Science) 2008. I had around 20K of student loans. I paid it off in 2014. The payments weren't really that bad (maybe 240 per month under the standard plan).

I just sent them a check for the full amount (14K) and was done with it....

The fed gov is pretty lenient with student loans. You can forgive and forbearance. I don't understand what the issues are. Are students simply not finding high paying jobs?

Like everyone has $14,000 laying around :whiste:

 

[Wreckem]

The plans to expand IBR/PAYE will put the number far in excess of that.

Of course they profit off of individual loans. That's like saying a subprime auto lender may profit off of 10 loans but have 15 default and not be profitable. Overall, as I have shown mathematically, they are losing money. IBR/PAYE has even been shown to lose money, mainly because while it has some people who are "bad at math", many are not and know that a drastically reduced payment amount of immensely profitable to the borrower in many cases.

In most cases those on the 20 or 25 year plans(the majority of people) will have massive tax bills. So while they have a reduced payment for 20-25 years they will have a substantial tax bill due upon forgiveness. The govt at this point is using paye and ibr to stop the future hemorrhaging so they will atleast recover the bulk of the principle from most borrowers whereas they would likely get substantially less otherwise. That's not how ibr was originally intended to be used but that is the reality of the current situation.

The govt could do a lot on correcting the student loan problem going forward by simply not allowing student loans to be used at for profit schools. The bulk of the current problem is from students at worthless for profit institutions. While people point out people who get say liberal arts degrees as the problem, it's for profits and the overall college graduation rates that have made student loans a $1trillion problem. The majority of borrowers never complete a degree and for profit degrees are worthless and many times more expensive. Correcting what's already happened just isn't likely to happen without the taxpayers eating a lot of money. We need to pay to fix the current problem and address the issues that caused them so they don't happen again. Instead we are just throwing more fuel to the fire.

 

[OverVolt]

It absolutely should not be free. Unbelievable.

It could be free if people were honest about who really belongs in college and who is just warming the seat until they dole out hamburgers and coffee.

 

[Wreckem]

It could be free if people were honest about who really belongs in college and who is just warming the seat until they dole out hamburgers and coffee.

But this isn't going to change when the govt makes college readiness a large component of how public schools being rated as effective. That's why there is a mantra of everyone should go to college. If we had a public education system like the rest of the world we would be better off and save a boat load of money in the process. Only the US tries to educate everyone to college readiness standards.

 

[MarkXIX]

Colleges are absolutely on the take these days as well. I remember when my wife started school, it was pretty close to $100.00 per credit hour. By the time I started school a mere 5 years later it was over $175.00 per credit hour and climbing fast at the same university. Now it is pushing $300.00 per credit hour and this is for in-state tuition at a state university.

Of course, in that time I've seen bathrooms be remodeled from functional bathrooms to ones that are fully automated with custom tile work with the school's logo, etc. The administration has grown probably 2-3 times what it was back when she went to school.

 

[pete6032]

I got a job right out of school and I make a lot of money. I don't get it, why is everyone else struggling?

Help me understand ATOT, help me understand!

 

[z1ggy]

The cost of my university since I've graduated just 4 years ago has gone up 17%.

Shit I wish I made 17% more money than I did 4 years ago.

 

[Scarpozzi]

OP. I can't tell if you're serious or if this is a brag thread. Either way....good job on making a wise degree and career choice.

Too many people go for degrees in the arts or choose careers in fields that don't pay....to make things worse, they go to the most expensive universities without thinking it through. I have no sympathy for stupid and hate that they can simply declare bankrupcy to get out of their debts.

I worked my way through my undergrad for 7 years and ended with $1300 of debt...then got my graduate degree comped. My wife finished her undergrad with $1200 and her graduate degree with $85-90k in debt.

All school loans were paid in full as quickly as possible. When I incurred my $1300, the interest rate was around 2%. My wife's loans were at 7% and over half of that interest was unsubsidized when she was in school. Student loans are big business.

 

[Mai72]

I made a little over $10m last year. Right out of college I got an awesome job. Why can't people be like me?

Help me understand ATOT! Help me understand!

 

[Mai72]

The cost of my university since I've graduated just 4 years ago has gone up 17%.

Shit I wish I made 17% more money than I did 4 years ago.

You should be a millionaire now. Everybody on ATOT are millionaires. Why aren't you one?

I don't think you're even allowed to post on ATOT unless you drive a Porsche and live in a mansion.

Do you drive a Porsche and live in a mansion?

 

[Phoenix86]

I have 130k in loans...I pay about $1400/mo. Bad enough for you?

Without getting into details on your pay how hard is that payment to make? How many years are left on it?

 

[z1ggy]

You should be a millionaire now. Everybody on ATOT are millionaires. Why aren't you one?

I don't think you're even allowed to post on ATOT unless you drive a Porsche and live in a mansion.

Do you drive a Porsche and live in a mansion?

I mean I USED to own an M3 and a sweet house, but the bank fuxed everything up and I had to sell my M3 and my house got foreclosed on. Bro.

 

[DougK62]

I have a hard time blaming the universities for the increasing tuitions. They're just charging what the market will allow. Students often shop higher education by how fancy the amenities are, so why shouldn't the schools increase tuition to pay for the fancy amenities? They want to stay competitive. If consumers want tuition to go down then they need to put their money where their mouth is, and start enrolling at schools that have more reasonable tuition costs. I did.

 

[Mai72]

I have a hard time blaming the universities for the increasing tuitions. They're just charging what the market will allow. Students often shop higher education by how fancy the amenities are, so why shouldn't the schools increase tuition to pay for the fancy amenities? They want to stay competitive. If consumers want tuition to go down then they need to put their money where their mouth is, and start enrolling at schools that have more reasonable tuition costs. I did.

True. They could protest and stop attending colleges for one full year. That would cause the colleges to take notice, and in-turn they would have to make the changes needed.

 

[IndyColtsFan]

I mean I USED to own an M3 and a sweet house, but the bank fuxed everything up and I had to sell my M3 and my house got foreclosed on. Bro.

Do you even lift, bro?

 

[CPA]

It's all about context, isn't it? If you make $65k a year, that's crippling. If you make $165k a year, that's a pittance.

$1400 on $165K is hardly pittance, especially when you have other debt (home, auto, cc).

 

[Sonikku]

I don't get what is with college grads being in debt myself. Don't like being in debt? Send a 14k check to the people holding your debt. It really is that simple.

 

[CPA]

I have a hard time blaming the universities for the increasing tuitions. They're just charging what the market will allow. Students often shop higher education by how fancy the amenities are, so why shouldn't the schools increase tuition to pay for the fancy amenities? They want to stay competitive. If consumers want tuition to go down then they need to put their money where their mouth is, and start enrolling at schools that have more reasonable tuition costs. I did.

Same here. I lived in a town with two small universities - one, an expensive, liberal arts university, the other an inexpensive, smaller, business university (this university actually spun-off from the liberal arts university back in the 60's-70's, I believe). To me, it was a no-brainer, go with the smaller (hell, we didn't even have football) university and get an accounting degree. I don't particularly love accounting, I use it as a means to an end.

 

[RollWave]

Try 400k for private undergrad and grad

 

[halik]

You should be a millionaire now. Everybody on ATOT are millionaires. Why aren't you one?

I don't think you're even allowed to post on ATOT unless you drive a Porsche and live in a mansion.

Do you drive a Porsche and live in a mansion?

Why, yes! Alas, I just sold the porsche in the spring.

Paid off 40K in grad school debt in 2012, that is after graduating in 2008 and being unemployed for a year. If there's will, there's a way. Also maaybe actually getting degrees in something marketable (CS and Finance in my case) would actually go long way to paying off that money.

But this is America, dang it, spending 300K at NYU on mediaeval poetry BA and not being able to pay that back in a lifetime is my right!

 

[Capt Caveman]

OP. I can't tell if you're serious or if this is a brag thread. Either way....good job on making a wise degree and career choice.

Too many people go for degrees in the arts or choose careers in fields that don't pay....to make things worse, they go to the most expensive universities without thinking it through. I have no sympathy for stupid and hate that they can simply declare bankrupcy to get out of their debts.

I worked my way through my undergrad for 7 years and ended with $1300 of debt...then got my graduate degree comped. My wife finished her undergrad with $1200 and her graduate degree with $85-90k in debt.

All school loans were paid in full as quickly as possible. When I incurred my $1300, the interest rate was around 2%. My wife's loans were at 7% and over half of that interest was unsubsidized when she was in school. Student loans are big business.

All of his threads are a thinly veiled brag thread.

 

[pontifex]

Yes- did you think it was normal to be able to send a 14k check to pay off a student loan?

lol, THIS! i don't even have 14k in the bank...