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What Warren and Bernie Sanders Supporters Are Worried About: Student Loan Repayment
Via Bored Panda:
Comments are worth reading as well. Here is one, regarding why a person can get $200K of student loans, but not even $20K in business loans:
Published in GeneralKevin Burgess
because the business loan could be forgiven, and written off as a loss. Student Loans cannot. Even though they actually come from the U.S. government, they’re handled by third parties, who count on it as a never ending income stream for the economic life of the student. Even in death it’s not cancelled.
If student loans are made dischargeable in bankruptcy, this problem will likely solve itself.
It has its attractions, but it sounds a bit like Bolshevik-style expropriation of wealth. I’m not sure we should go down that path. Whatever we do, though, needs to get the universities to put some skin in the game. I’m not sure we should just concentrate on those with large endowments, because many without those endowments should also bear responsibility for this mess.
In fairness, it does exist. If you work in the public sector, it’s 10 years; if you’re anywhere else, it’s 20 years. But there’s a catch …
See, forgiven loans count as income for the year in which they’re forgiven. Assuming nothing changes between now and 2034 in either tax rates or my total amount due, I will be looking at an income tax bill of $60,000 for my loans alone. On the plus side, tax debt is forgiveable in bankruptcy.
Reality hit in NY, so maybe it will show up here eventually.
Sorry, I’ve been unable to find anything to support this. I do remember that about halfway through her four years at the U of I, our private lender list was reduced – we had used lenders such as ‘My Rich Uncle’ which provided a lower interest rate. However, at some point, those small lenders were no longer available and we had to go with larger banks, such as Wells Fargo, which was more expensive. She was in school from 2008 to 2012.
Was it out of state tuition that ran up the cost? We put our daughter through UT and our son partway through just using regular income, and we’re far from wealthy.
I unfortunately don’t have a link either. However, all of my loans were transferred over to the federal government during the Obama administration. It wasn’t a choice, the Federal Government just sent me a note. They basically removed all private lenders from the Subsidized and Unsubsidized loans.
This article has some links about Obama’s takeover. And this Act might be relevant.
rgbact
$180K from a state school? Yikes! Anyway, thanks for sharing this. Your advice sounds good. Looking over the current tuition at the college I went to…..I’d be seeking out a community college alternative today too.
Currently, on the U of I website, the cost of non-resident undergraduate tuition is from $33,352-$38,356 Total expected cost per year, including room and board, books and supplies, and other expenses is $48,752 – $53,876. In my opinion these are underestimates.
This is similar to her costs, even seven years ago. As a resident the estimated total cost per year is $31,390 and $36,394. Keep in mind that the interest costs are piling up as long as you stay in school. So her freshman loans just kept increasing due to the way the interest is calculated. And so on. By the time she was a juni0r she was using her summer job earnings to pay some of the interest, but it quickly becomes overwhelming.
Thx. I hadn’t known about any of that. Maybe I should ask my youngest what he knows about this; I know that he still owes some, or did last time I asked.
This part works, not the second. And, you get on side with the students, families, and debtors by denouncing the dishonesty in college advertising and the massive selfish bloat of college adminstrations. You say nothing about professors because they are out of power, are not the major influence, and are connected to “learning.”
So pound on greedy college administrations ripping off students for their own benefit, and demand real reductions in admin costs, passed on as real reductions in fees and tuition.
Make this a key legislative priority in the Republican House caucus, make every candidate memorize the talking points if they want a dime of party support, and talk two phases:
See, totally a winner. Lots of moral outrage, and none of it aimed at voters who, if they show up in the swing states, will determine the outcome of 2020. That is what the Democrats are doing, as Dom Giordano, 1210 WPHT in Philadelphia, has been explaining as he substituted for Jim Bohanan this past week.
Exactly on point, and exactly what the Democrats are doing with this issue. They can count. They know they only need a few tens of thousands of votes in each swing state. They just need to get younger voters, who typically have the lowest turn out, to show up this time.
And. There is no reason not to turn this issue around on them by attacking greedy Big College and the massive administrative bloat driving the costs up without improving instruction or job placement.
After you have that established, you point out the so called bail out actually benefits the fat cat administrators, who are being let off the hook. And you go back to how you are going to make the real fat cats, the real villains, take responsibility for what they did to all the students.
Then, with that established, you go after the fraud of “free college” by pointing to other countries and saying if it is a right for everyone, than no one has a right to actually take the classes they want or need when there will be massive waiting lists and lines for the free thing. That is not hard for anyone to understand. And then you repeat how you are making it really better for students and their families by forcing the costs down.
If you get more computer for less, why aren’t you getting more college education for less?
Ah, non-resident is a killer. Plus an elite school. Their website says Illinois residents pay about $19,000 for tuition. My old mediocre school is charging $11,100 these days. Local community college option is at about $4,500.
I guess my point is that its fairly easy to make college debt politically unsympathetic, unlike say healthcare costs. Your example is a very good one….although it still is depressing to hear about that much debt.
My wife recently went back to college to retool. Many of her professors were telling their students to take out as much money as they can via student loans type programs given they will all be forgiven shortly. This was given and taken as fact. Many of these people in class with her were getting loans and make purchases that seem foolish to me. When my wife would push on this she was told it was free money so you should take as much as you can. There was also advice that you can skip paying back loans if you just took two classes a semester and if you got a government job your loan would be deferred and forgiven.
Civilization is doomed.
Then try this one: cradle christian vs death bed confession.
Forgive us our debts as we forgive our debtors.
Problem is most of those loans are Fannie/Freddie loans. None of my loans were private. Federal loans seem to be first order of attack in school financing. If you can cover it that way, no need for private.
That’s what the right IN GENERAL should be doing instead of writing belly aches about the kids these days wanting out of their obligations.
Try this argument next time: “what has been done to the young generations in pursuit of higher education is atrocious. This is what we should do…”
Express sympathy and compassion and then lay out your solution. Stop with the arguments on why not to student loan forgiveness. That’s the stupid reaction to progressivism that conservatism is known for, rather than their own ideas.
These points mirror one of my concerns on this issue: putting aside the morality and complexities of loan forgiveness and tuition reparations, if there is no “radical” restructuring of the college system and its costs going forward we are only continuing to subsidize the luxury product Big Education. Big Ed both played the system and responded to incentives with varying degrees of voter consent and societal acquiescence. We are faced with the bill and unrealistic consumer expectations – we need a paradigm shift. And fundamental to that shift is getting government money out of education as completely as possible.
Just saw this from Tucker Carlson and Neil Patel: Require colleges and universities to pay down 5% of their endowments per year like all other non-profits. If, in fact, higher education is exempt from rules that govern other entities around endowments, these are loop holes that can be closed and I suspect no one but the higher education lobbyists will be squawking.
thanks Gossamer Cat, I agree with what you have stated.
One other thing to mention, so often people call into Navient or other student loan financial firms only to to find out that they re talking to people in the third world.
First of all, if a nation requires its educated people to get jobs, one would think that having third world, English as a somewhat second language workers getting jobs that involve complex situations relating to choices the debtor must make instantaneously is not a really decent thing to do.
It is no secret that financial matters can be difficult to understand. For one thing, if a person can barely say in English “I see you are indeed the holder of this loan” you can bet your sweet pattooties that they cannot answer questions about the intricacies of the various loan programs that a debtor often has to choose from while being given little or no information.
Plus I often wonder how student loan holders in the Wilkes Barre, PA area feel about the lack of ability to find jobs when the financial payment center for tens of millions of Americans is right there in their neighborhood. Only Navient is so fond of hiring third world workers in the Mariana’s islands.
Those who are scornful about bringing manufacturing jobs back to America should stop & consider that perhaps if we really need to have people pay back their student loans, maybe American financial firms that are making a killing must absolutely hire American workers. And not just any Americans with student loans – hire the ones with bad credit from their med bills and the medical conditions interfering with ability to even make rent. I know several people who were on life support, then in a rehab center, and although now recover, cannot find a job due to the bad credit rating resulting from medical bills and non-payment of student loans .(Once your credit is in the toilet, job offers are an automatic impossibility, unless a friend or relative hires you.)
Is an 18 year old an adult in terms of finances? Sure an 18 year old can join the Armed Services and go off and risk his life fighting a war, but he or she is not doing that alone. They are given a number of weeks in boot camp, and have a plethora of support people while he or she learns the ropes. We don’t drop some 18 year old from an airplane via parachute into a war zone 2 days after he or she has signed up.
However our current system of student loans leaves most students totally on their own.
I have known 18 year olds who were handed the forms, put in a group of 8 other freshman students and offered 20 minutes discussion of in’s and out’s of the loan situation. Remember, people instructing the students how easy it is to pay for college tuition thru loans are people who work for the fancy pants college or university that will receive the monies via the student loans. We must reform the student loan instruction process Now!!
I ‘ve pointed out in other discussions here that it’s probably not this way by some Evil Design. When student loans 1st became available so that vast numbers of Baby Boomers were college educated, we also were given little support and instruction.
But to assume, as I did in the late 1970’s, a $ 6,000 loan to get through an AA program in electronics with a guaranteed job in a booming economy that paid over $ 32K is nowhere near what an 18 year old must deal with today. Today students are pressured to get into major universities and colleges, where tuition might be 25K a year or more. And when they then get out in four yrs, they find out that their degree in communications is worth less than toilet paper. But their loan repayment requirement may well be $ 600 a month or even more!
@cm
Clifford and Stina – Bravo. Thanks for both of your input.
Don’t these students have parents?
I thought that this was a really good discussion, where I came in with one idea and left with another. I thank Dave Barsham (can’t get his name to autocomplete to alert him) for bringing in another point of view and agree with Clifford wholeheartedly that our response now needs to be a firm acknowledgement that they are in a difficult situation, lay the blame squarely on the universities and colleges for the inflated prices and lay out a solution that does not involve loan forgiveness but does make it easier for them to pay off their loans and, more importantly, ensures that the next generation will not be ensnared in this same trap.
@lessersonofbarsham
I met Dave and his brother several years ago at a tailgate party while Titus Techera was staying with us. Dave was looking for Concretevol, and just happened to recognize Titus from his avatar photo as he was walking by. It was a pretty neat Ricochet moment.
And now I thank @arahant
Tasty, but I think you would get quite a lot of squawking, or at least mooing, from those who hold such things sacred.
Have you ever talked to people about their own indebtedness?
I met with my tax preparer one year, a bit bummed out I owed 8% of my income to credit card payments. He replied with amazement: “Eight percent? You might be in the one percent of all credit card holders!” (I probably was not even in the top 41% of all income earners.)
This was in Marin County, and some of his other clients were in the top three percent of all income earners in America. But people were mortgaged to the hilt, and had Beemer car payments, designer clothes wardrobes and other luxuries that were seen in Marin as necessities.
Think about it: you turn on the TV and there are ads showing that paying for your groceries with a credit card is the American way. We also have a banking industry that denies people business loans, which have reasonable interest rates, because after all, the society as a whole will not become enraged and demand different wealth providing strategies than what we are offered. Instead, we simply put our tails between our legs and slink off to get a credit card to keep the business running, with its 14 to 18% interest arrangements.
In reading over the biography of Walt Disney, I was amazed to find out that for much of his life prior to Disney Land opening in the 1950’s, Walt’s business schemes existed due to local LA area bankers wanting to support him. No banker wanted to be the guy whose kids would later find out that he had killed off the creator of Pinocchio or Sleeping Beauty. That would never happen these days, if it was up to the typical banker. Rather, Disney would have had to put his home up for collateral, and would have lost it as well as his business life in the 1940’s.