[Unknown Target]

http://www.democratandchronicle.com/article/20110821/NEWS01/108210345/1002/NEWS

What do you folks think? The big bubble that will finally destroy what remains of the economy, or a long, drawn out process of painful default/debt repayment for millions of young people over the course of their lives?

I've read stories of girls going into prostitution to pay off their loans, and I know a few people who will be graduating and paying off debt for the majority of the rest of their lives.

There was some discussion earlier about us living in a "meritocracy". In the article, the Judge says;

"Ninfo urges students to think realistically about college — looking for the most affordable school to get the skills they need."

- how realistic is that, do you think? These days it's less about the skills you have and more about the paper attached to your name. If you do have a degree then you're competing against millions of others with similar degrees, at which point it comes down to the "better" university (read: more expensive) you got it at.

Or do you disagree? Either way, is it really fair to say to people these days that if they're having debt issues they should simply "not go to college" or "go to a cheaper school"?


Another opportunity has crossed my mind as well; if enough indebted students could gather round some common causes, they could essentially hold the economy ransom by saying they will default on their loans? Possible? Ridiculous? What do you all think?

[Nuke]

im all for doing the ransom thing, its not like i can afford to pay it off anyway. frankly going to college and getting a degree was the biggest mistake i ever made, the school i went to wasnt very good at all. then when i got out i couldn't get a job in the it industry. somewhere in there i tried joining the military to pay off debts, but that didnt work (im too insane for them). so i ended up working minimum wage jobs which i could not afford to live and pay off debts simultaneously. eventually i just decided to live off the government.

[Bobboau]

I never got student loans, I payed my way as I went, by working in various meat plants and unloading boxes at sears, I graduated with no debt, I'll admit it took me twice as long as it was supposed to but that had more to do with me screwing around with useless classes for 3-4 years than anything else. now that said, I am at the moment under a considerable debt burden, but this has more to do with the expense of moving across country (and getting a new bed and a new TV and TV stand and sofa and maintenance on my car etc), and paying two months rent just for the honor of paying the first month's rent, oh, also I had to go to the hospital at one point which cost me $3 grand I have yet to pay off.

[MP-Ryan]

Granted, I went to school in Canada where tuition is much lower, but so are the scholarships (my $10,000 out of high school, versus my friends that were getting $50,000 for Ivy league schools with the same grades).

However, I got student loans for the years that I needed them.  They were spent on tuition, books, and housing.  I did not buy a car.  I did not spend it on alcohol.  I did not spend it on a new computer, though I wanted one.  I graduated with ~$20,000 in student loan debt.  I paid it off in a year.  That was two degrees and 6.5 years of schooling at a university, not a college, that is reasonably-well recognized internationally.

My wife did the same things, but as she was in a nursing program which much higher tuition and books and didn't manage to get the same caliber of summer jobs, she was ~$45,000 in debt at the end of her degree.  She paid hers off at the same time I did.

I don't have a lot of sympathy for people who whine about their student loan debt.  I've seen the things people blow student loan money on, and a hell of a lot of them could get by with a lot less money in loans if they controlled their spending.  A part time job helps too.  I know there are students out there that genuinely need to get large loans to live off of, but most don't.

There is also the tax break that comes from paying off loans as slowly as possible which some people see as an incentive to drag out the process.  If they did the math, they wouldn't - in many places in Canada, loan interest is set at PRIME +2.5%.

To compare, I paid off the final loan total with a lump sum, that also pays off the initial interest when it came out of interest free status.  My younger brother, who did one degree and graduated university before me with an engineering degree that gave him a job making $55,000+/yr straight out of post-secondary, did not.  I'm student debt free, and he's going to be making the minimum loan payments for the next 15 years.

That's another point - 5 years after finishing my last schooling, the only debt I have is my mortgage.  My wife and I have a lot of older belongings, we don't drive fancy cars, and we make decent wages, but the biggest contributor is financial prudence.  A lot of younger people don't have it.

A large part of student debt problems is financial illiteracy, not the school system.

[Sushi]

A large part of student debt problems is financial illiteracy, not the school system.

I agree with this.

I also think, however, that the cost of higher education is highly inflated, exacerbating the going-into-debt-for-school problem.

[Nuke]

i didnt really put much on my loans beyond tuition. of course i came out of it with only 13000 in debt, and managed to pay off 4000 of it before employing my **** it strategy. i did however get a computer as part of one of my classes, but that was required for a class (it was for my computer building class, and i had to assemble it on my own). i also had a computer job after i received the first part of my degree, to pay for living expenses, but it wasnt very much pay, so little in fact that i qualified for food stamps (all students should apply for food stamps, seriously, most of em qualify), which allowed me surplus cash that i utilized for buying booze and illegal drugs. i think at the time my schedule only allowed for 6 hours of sleep, had to leave at 6 to get ready to go to work, get off work around 6ish and get home from school at around midnight. i figured i spent 4 hours of the day waiting for and riding buses. of course i saved the partying for weekends. after a few months of that i just sorta burned out and my grades were dropping and quit the job and the partying to focus on school and barely managed to get my degree.

[Bobboau]

what degree did you get?

[G0atmaster]

Wow, poor Californians have it easy, I guess.  I'm attending a (roughly) $30,000/yr private school.  I recieve Cal Grant, which is roughly $10,000, and a Pell grant, worth roughly $5000.  Because I get both of these, my school supplements the rest of my tuition, dropping my cost to $7000/yr for room and board, plus a few other things (health insurance, books, parking pass, etc.)

I plan to graduate with barely more than $30K in debt, less if I can find employment soon.  Paying it off over the next 20 years means I'll be paying roughly the same as I would for, say, car insurance.  The hard part, admittedly, will be finding a paying job after I graduate.  I chose to take on an arts major with a rather narrow field.  There's always grad school, but that would put me in even more debt.

Somehow, I know it will all work out.  But I admit, there's a rather high risk in this investment I've made.

[Nuke]

what degree did you get?

its an associates in network admin. kinda worthless. i regret not going for a full bachelors in ee or comsci, but i couldn't afford it then and i definitely cant now.

[Bobboau]

$13k for an ASS?! holy **** man, you did get ripped off.
well, you know what you could do, take out a bunch of student loans get a degree you want, then declare bankruptcy, if you are going to **** with the system, you might as well do it in a fashion that get's you something useful.

[Nuke]

$13k for an ASS?! holy **** man, you did get ripped off.
well, you know what you could do, take out a bunch of student loans get a degree you want, then declare bankruptcy, if you are going to **** with the system, you might as well do it in a fashion that get's you something useful.

i doubt that strategy would work as ive been defaulted for at least a couple years now. been thinking about bankruptcy, as a final middle finger to the credit industry, after i wash my hands in its blood of course. sometimes i think project mayhem had the right idea.

[Kosh]

Student loans are exempted from bankruptcy protection.


EDIT: Actually that reminds me, from what I understand of the bankruptcy reform act of 2005, bankruptcy will no longer free you from any debt obligations.

[Black Wolf]

The system down here is pretty awesome. It used to be free (obviously better) but now, there's a scheme called "HECS" or "HELP" - same basic concept, though. Essentially, the government, through the tax office, pays the up-front cost of tuition directly to the various universities - no student loans or any opportunity for wasteful spending. Then, when you start earning an amount over a certain threshold, you pay it back through the tax system. There isn't even any interest on it, though it is pegged to inflation. It's a great system - I'm paying my debts off steadily without any money leaving my hands - it's taken out by your employer before you get your pay, though not in amounts that drastically affect anything. I've never heard of anyone struggling to pay, because if you don't earn enough, no obligation to pay anything.

Of course, this system wouldn;t work in America because you guys don't have the same regulations on your unis that we do. If, however, the US's apparent inability to manage its economy throws the rest of us into another financial crisis, I will be miffed.

[Spicious]

Don't forget only having to pay back ~a third of the full cost.

[Sololop]

oh, also I had to go to the hospital at one point which cost me $3 grand I have yet to pay off.

I love Canada for this.

On topic-ish, tuitions are too expensive imo. When I walk past the brand new Waterfront Campus or local University, and they have all this super high-tech modern structure and every computer is an iMac, I find it an enormous waste of money.

[Unknown Target]

I don't know if it's really fair of anybody to say "well I did X and Y so I don't have any loans, so really I can't emphasis with these people/I disregard this as a societal problem and prefer to place the blame almost entirely on the individuals". There's a lot of pressure to get to the right school, to get the right degree, to get the right job. From 16 years old this is drilled into American kid's heads, that if they don't go to the right school or don't get to the right college, they're perma-****ed. The sad part is that's not even necessarily untrue; though on the flipside it's also way untrue. But yea, a big problem that I didn't think about before is just a general lack of understanding and education about money and budgeting in this country. Hell, if Congress reflects the people, there's your prime example.

Solotop; you know, judging by the laws of mass production, more things being made should A) reduce the price of production and B) reduce the value of the individual thing.  I mean it just makes sense that if 70% of the people in the 2007 graduating class (mine) went to college and let's just say 60% of them got a bachelor's degree, a bachelor's degree should go down in value and thus, down in cost. But it doesn't it's only gone up.

A friend of mine and I were discussing this and he said to counter this that there has been a situation of permanent demand implemented. I don't know the specifics, but my argument was refuted or at least an explanation to our current issue was proposed, and I just can't remember how. Can anyone enlighten me?

[Scotty]

I don't know if it's really fair of anybody to say "well I did X and Y so I don't have any loans, so really I can't emphasis with these people/I disregard this as a societal problem and prefer to place the blame almost entirely on the individuals". There's a lot of pressure to get to the right school, to get the right degree, to get the right job. From 16 years old this is drilled into American kid's heads, that if they don't go to the right school or don't get to the right college, they're perma-****ed. The sad part is that's not even necessarily untrue; though on the flipside it's also way untrue. But yea, a big problem that I didn't think about before is just a general lack of understanding and education about money and budgeting in this country. Hell, if Congress reflects the people, there's your prime example.

Solotop; you know, judging by the laws of mass production, more things being made should A) reduce the price of production and B) reduce the value of the individual thing.  I mean it just makes sense that if 70% of the people in the 2007 graduating class (mine) went to college and let's just say 60% of them got a bachelor's degree, a bachelor's degree should go down in value and thus, down in cost. But it doesn't it's only gone up.

A friend of mine and I were discussing this and he said to counter this that there has been a situation of permanent demand implemented. I don't know the specifics, but my argument was refuted or at least an explanation to our current issue was proposed, and I just can't remember how. Can anyone enlighten me?

Idiotic assertion number one:

if Congress reflects the people

They obviously don't.

Idiotic assertion number two:

judging by the laws of mass production, more things being made should A) reduce the price of production and B) reduce the value of the individual thing

College is not a good, it's a service, and a service industry at that.  If mass production laws held true to service industries, movie tickets would be dirt cheap, restaurants would be the cheapest way to eat, and fixing your car would cost about ten bucks.

Idioitic assertion number three:

a bachelor's degree should go down in value and thus, down in cost. But it doesn't it's only gone up

Value is not cost.

[Unknown Target]

Idiotic assertion number one:

if Congress reflects the people

They obviously don't.

It's idiotic to assume that our elected officials reflect the people? Or it's idiotic to assume that they should?

Idiotic assertion number two:

judging by the laws of mass production, more things being made should A) reduce the price of production and B) reduce the value of the individual thing

College is not a good, it's a service, and a service industry at that.  If mass production laws held true to service industries, movie tickets would be dirt cheap, restaurants would be the cheapest way to eat, and fixing your car would cost about ten bucks.

Alright, I probably shouldn't have compared it to a good. Though could a degree be considered a product? Or a student the product of the university?

Idioitic assertion number three:

a bachelor's degree should go down in value and thus, down in cost. But it doesn't it's only gone up

Value is not cost.

So true.

[Scotty]

In order: the former, I already explained that it's a service industry, and indeed.

[MP-Ryan]

I don't know if it's really fair of anybody to say "well I did X and Y so I don't have any loans, so really I can't emphasis with these people/I disregard this as a societal problem and prefer to place the blame almost entirely on the individuals". There's a lot of pressure to get to the right school, to get the right degree, to get the right job. From 16 years old this is drilled into American kid's heads, that if they don't go to the right school or don't get to the right college, they're perma-****ed. The sad part is that's not even necessarily untrue; though on the flipside it's also way untrue.

This isn't a social problem.  Well, financial illiteracy is, but student debt is not.

If you want to get into the right school and get into the right degree, as you perceive them, be prepared to pay accordingly.  Post-secondary education isn't a right, nor should it be (because certain types of post-secondary are certainly not going to be helpful for everyone).  If that means you decide to take on debt, as seems to be the Western way instead of actually saving up [and I'm just as guilty], then be prepared to service that debt, take on as little as possible, and figure out a way to pay it off as expediently as possible.

The mere title of your thread says it all - "loans outpace credit card obligations."  Both of these are debt-servicing.  Neither of these is an absolute essential.  The mere fact that people keep balances on their 18%-interest credit cards makes my head explode, and the stupid things that kids do with their student loan money just floors me too.

If people can't spend, budget, and borrow within their means, that's their problem - not society's.  It's only a societal problem when your government is too partisan and ideological to figure that out too.  You think Congress is bad now, just wait until this generation's bunch of self-entitled want-now pay-later crowd get elected in there.  I really fear having a good chunk of my generation in politics, because as a group we have no self-control when it comes to spending.