The Next Big Bailout: Student Loans

[Mai72]

http://www.foxbusiness.com/economy-policy/2014/06/03/next-big-bailout-student-loans/

Economist Douglas Holtz-Eakin, President of the American Action Forum, says the impact of increased indebtedness and the inability of college grads to repay loans (some are saddled with college debt of as much as $200,000) has already sparked a series of small-scale taxpayer-financed bailouts by the Obama Administration that he says will grow over time.

Holy Hell! $200k in student loan debt!

Could we see a bailout in the near future? I think it's going to depend who is sitting in the House and Senate. If the Republicans take control of the Senate than the answer will probably be no. Still, the pressure is going to intensify to do something in the near future so the Republicans might have no choice but to do this bailout.

 

[Matt1970]

$200K in student loans is fine for a career like a Doctor or lawyer. $200K in student loans for an art history career is a different story. Bailing them out is more of the same ole rewarding bad decisions.

 

[nehalem256]

Wait I thought the government was making billions a year off student loans?

 

[Mursilis]

$200K in student loans is fine for a career like a Doctor or lawyer. $200K in student loans for an art history career is a different story.

For a future lawyer, that used to be true, but given the glut of JDs out there, a $200K student debt burden isn't likely to get paid off soon.

Bailing them out is more of the same ole rewarding bad decisions.

This is America, after all. If you did something dumb like buy way more house than you could afford, it's someone else's responsibility to bail you out!

 

[QuantumPion]

Wait I thought the government was making billions a year off student loans?

Ya at that rate it will only take around 1200 years to pay off.

 

[z1ggy]

It's only going to get worse over time. Say college kid now has $200k in debt and isn't graduating with an MD or a degree which will earn him a high income. He/she will spend the next 10-30 years slowly paying that off. They will be living at home until their late 20's, sucking on their parents teet and not learning how to be real adults. Then, since they've spent all their money on loans, they will have no way to save up for buying a home. Not only that, but it's likely they will not be able to put money away for their children, thus making the burder on the children even higher when they need to pay for school.

But by then, $200k will be today's $20k in loan debt. I bet by the time I have kids in college, school will probably cost something like $80-100k a year. Hell, when I graduated college just 4 years ago, total enrollment cost was something like $45k. My dad just told me the other day, it's now about $53k.

 

[Mursilis]

It's only going to get worse over time. Say college kid now has $200k in debt and isn't graduating with an MD or a degree which will earn him a high income. He/she will spend the next 10-30 years slowly paying that off. They will be living at home until their late 20's, sucking on their parents teet and not learning how to be real adults. Then, since they've spent all their money on loans, they will have no way to save up for buying a home. Not only that, but it's likely they will not be able to put money away for their children, thus making the burder on the children even higher when they need to pay for school.

But by then, $200k will be today's $20k in loan debt. I bet by the time I have kids in college, school will probably cost something like $80-100k a year. Hell, when I graduated college just 4 years ago, total enrollment cost was something like $45k. My dad just told me the other day, it's now about $53k.

The bubble on the high-cost private schools is going to burst very soon, and some schools are already seeing the writing on the wall. The good state school less than 20 miles from my home is still only $21K for tuition, room, and board, and if our kids live at home, the tuition only cost is $10K/year. That's certainly affordable. This is a school from which both my spouse and I have graduate degrees, and it's well-ranked. There's no way I'm letting my kids dig themselves into a $200K hole. Even $50K in debt is too much for a lot of degrees.

 

[boomerang]

Our systems are going to go through a reset at some point in time as far too many of them are unsustainable. What's going to be really bad is if they all occur at once.

 

[rudder]

High schoolers should be required to take an economics class and understand the term "return on investment" before being enrolling in college.

Who goes to a private school, graduates with $200,000 in student loans and has a degree that enables them to earn $38,000/year?

http://peabody.vanderbilt.edu

 

[rudder]

And I will add there is already a bailout for holders of student loans. Under certain circumstances your loan can be forgiven.... for example working as a teacher for 10 years.

 

[cabri]

And I will add there is already a bailout for holders of student loans. Under certain circumstances your loan can be forgiven.... for example working as a teacher for 10 years.

I believe that this exists only for Federal backed loans and will work for any public service position.

 

[z1ggy]

The bubble on the high-cost private schools is going to burst very soon, and some schools are already seeing the writing on the wall. The good state school less than 20 miles from my home is still only $21K for tuition, room, and board, and if our kids live at home, the tuition only cost is $10K/year. That's certainly affordable. This is a school from which both my spouse and I have graduate degrees, and it's well-ranked. There's no way I'm letting my kids dig themselves into a $200K hole. Even $50K in debt is too much for a lot of degrees.

Yeah looking back on things, I wish that I either A) went to a state school instead of private or B) found a job close to home and lived with my Dad for a few years.

I got "lucky" and graduated with a BS in engineering with only about ~$35k in debt. My payments are roughly $450 a month. It's managable but still sucks knowing I'll be paying for another 6 years.

My g/f isn't as lucky. She got a doctorate degree and will easily be over $100k in loans, more likely closer to $120k. Her job will likely only pay $60k until she gets some specializations which can bump her up quite a bit. I feel bad because she really has no choice but to live at home.

With these schools getting tens of millions of endowement, why the hell does it cost a kid $50k a year to go to school???

 

[Subyman]

Luckily I got out with an MS debt free. I couldn't imagine be saddled with 100k+ fresh out of college.

 

[AznAnarchy99]

Went to a top 15 undergrad school and lucky enough to only have about $20k in debt. I'm on track to pay it off in about a year if I keep my current lifestyle.

 

[Genx87]

High schoolers should be required to take an economics class and understand the term "return on investment" before being enrolling in college.

Who goes to a private school, graduates with $200,000 in student loans and has a degree that enables them to earn $38,000/year?

http://peabody.vanderbilt.edu

An educated idiot. Vandy should be ashamed of themselves for offering a degree like that at such a tuition rate.

 

[AznAnarchy99]

High schoolers should be required to take an economics class and understand the term "return on investment" before being enrolling in college.

Who goes to a private school, graduates with $200,000 in student loans and has a degree that enables them to earn $38,000/year?

http://peabody.vanderbilt.edu

In California, at all take economics in high school. However, the high schools push hard to continue to college, no matter the costs.

 

[TerryMathews]

I believe that this exists only for Federal backed loans and will work for any public service position.

Doesn't even have to be public service. They are forgiven after 25 years regardless.

 

[sm625]

$200K in student loans is fine for a career like a Doctor or lawyer. $200K in student loans for an art history career is a different story. Bailing them out is more of the same ole rewarding bad decisions.

That is exactly how we know that a bailout is coming. It's only $1 trillion at this point though. Gotta get it to at least $5 trill before considering the bailout.

 

[Jeff7]

...
With these schools getting tens of millions of endowement, why the hell does it cost a kid $50k a year to go to school???

1) There's always the "because we can" type of pricing.
2) Probably because of doing things like turning computer labs into lounges, with expensive lighting, couches, and flat screen TVs on every wall; adding large electronic stock tickers that surround an entire room; digital LED clocks for various time zones around the world....Important things that really improve the delivered education.
:hmm:

 

[Engineer]

Millions of middle class jobs eliminated. Everyone told that they must go to college and once complete, everything will be fine. Everything isn't fine as costs soared and degrees became 'stagnant'. People going to college that shouldn't have been going in the first place.

A waste of resources.

 

[mammador]

er.. graduate tax? nationalise all unis, and take some away from the defence budget (so higher education is free)?

 

[OCGuy]

Wait, didn't we just learn that the .gov profits from them? Wasn't it the same OP?

Holy shit my head hurts...

 

[AznAnarchy99]

1) There's always the "because we can" type of pricing.
2) Probably because of doing things like turning computer labs into lounges, with expensive lighting, couches, and flat screen TVs on every wall; adding large electronic stock tickers that surround an entire room; digital LED clocks for various time zones around the world....Important things that really improve the delivered education.
:hmm:

Different departments have different budgets and donations. The money donated to the computer lab cannot be moved over to the science department. In addition, I would argue that a balance is needed with that technology to entice potential students to come to the school. It is the same way the athletics program spends millions on renovating the gym to bring in the best athletes.

 

[TheVrolok]

I believe that this exists only for Federal backed loans and will work for any public service position.

Hoping it stays in place. 350k loans, about 9 payments into my 120.

 

[LegendKiller]

Different departments have different budgets and donations. The money donated to the computer lab cannot be moved over to the science department. In addition, I would argue that a balance is needed with that technology to entice potential students to come to the school. It is the same way the athletics program spends millions on renovating the gym to bring in the best athletes.

Schools were doing just fine before they had all of that shit. Then it was the "race to the top" to get to the bottom. Now students can't afford it.