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tokyogai
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Doing the right thing
tokyogai   12/7/2011 8:25:04 AM
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Although you sometimes get punished for doing the right thing, it works out more often than not. I would assume that at least the majority of people making commitments to pay back their loans would honor that commitment- after all, they didn't have to go on and get hiogher education. While the costs certainly are a problem. trying to create another problem by not honoring commitments made just doesn't seem to be the best answer. Kudos to you.

ProfR
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Debt is debt
ProfR   12/7/2011 8:45:43 AM
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I think student loans are definitely a problem for some grads. However, College should not be free because you do gain skills, access to good jobs and mature in the process. But part of the student loan issue is wrapped around our society and the way we think about debt. When you get debt, you need to know how to pay this off -- it does not go away.  

Before they go to college, students and their parents should look at how much debt they are going to have when they get out versus what kinds of jobs they may get when they graduate. They need to make sure they are willing to take on this obligation.

Noreen Seebacher
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Blogger
Re: Debt is debt
Noreen Seebacher   12/7/2011 10:56:45 AM
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One of the problems with the whole student loan process is the inherent complexity. I have waded through it with multiple children now, and the disclosures and so-called consumer education that borrowers have to gain is unclear, confusing and overwhelming, especially for kids who are taking out $30,000 a year loans at the same time they are opening their first checking accounts.

Some of the borrowers are only 17 when they take out their first student loans. Does that even make it a binding contract? At a minimum, they could claim "immaturity" as a defense. I mean, it's a valid excuse even according to the Catholic Church, which accepts immaturity as one of the grounds for annulment of a marriage.

cat tail
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Re: Debt is debt
cat tail   12/7/2011 12:46:18 PM
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"Some of the borrowers are only 17 when they take out their first student loans. Does that even make it a binding contract?"

Good point. I thought you had to be 18 in most states to make a binding contract?

erierunner
User Rank
Iron
Re: Debt is debt
erierunner   12/12/2011 11:40:23 PM
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It's funny, the kids are allowed to sign for 30K in debt like you mention but they put laws in place that credit card companies can't offer a t-shirt on campus to get an application for a credit card.  Little backwards on where the focus should be if you ask me. 

PredictableChaos
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Platinum
Why you need to get out of Student Loans
PredictableChaos   12/7/2011 9:23:51 AM
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Joey.

Before anyone thinks of stopping payment, have them take a look at this student-loan-infographic.  It shows why student loans may not be as fair and benevolent as your college counselors thought.

I think the topic is ripe for some voter-friendly reforms.

Noreen Seebacher
User Rank
Blogger
Re: Why you need to get out of Student Loans
Noreen Seebacher   12/7/2011 12:03:06 PM
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1 saves
That's a great infographic, @Predictable. I'm going to post it here for anyone who wants to see it.

student debt infographic

Dex
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Iron
Re: Why you need to get out of Student Loans
Dex   12/7/2011 12:05:16 PM
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That is a really depressing visual representation of the student loan burden.

Drivewaygirl
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Platinum
Re: Why you need to get out of Student Loans
Drivewaygirl   12/7/2011 12:24:39 PM
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Maybe there could be a way to link the loans/loan forgiveness with salary (as proven by annual tax returns). For example, modest payments while unemployed/looking for work. Then: for everyone, a fixed percentage of income toward the outstanding loans--say 3% of gross annual salary. But the difference is that in exchange, the loan principal would be reduced 3%. That means someone could chose to go into something lower paying but public service oriented, without worrying about student loan payments for the next 50 years,

That's just a rough idea-but maybe something along those lines would have merit,

back2basicz
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Platinum
Re: Why you need to get out of Student Loans
back2basicz   12/7/2011 1:23:41 PM
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DrivewayGirl,

That is way too complicated and unenforceable.

Won't work.Sorry.

Thing is the more simpler a system the better its chances of getting implemented and succeeding in the long-run.

Ashish.

 

Tenacious
User Rank
Platinum
Re: Why you need to get out of Student Loans
Tenacious   12/7/2011 12:42:03 PM
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I like the idea at the bottom of the infographic about waiting until you figure out what you want to learn before you start college,

back2basicz
User Rank
Platinum
Re: Why you need to get out of Student Loans
back2basicz   12/7/2011 1:21:58 PM
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Tenacious,

Try telling that to most parents who are conditioned to believing that a college education was and remains the ticket to a super-bright future.

Ashish.

PAW
User Rank
Iron
Loan Forgiveness
PAW   12/7/2011 9:51:16 AM
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I think it is ridiculous that there is an effort to have all student loans forgiven.  Maybe instead of getting loans, they should have gone to a less expensive school or worked for awhile to save money.  Too many of these students think they have a right to higher education and that everyone else should pay for it. 

TelecomFreq
User Rank
Platinum
Re: Loan Forgiveness
TelecomFreq   12/7/2011 10:31:49 AM
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While I do not agree with forgiving debt that students took on, I do think that college should be made more accessable for many more people. And I do not mean that EVERY college should be made more accessable, I do not expect Harvard to drop their tuition rates and lower their standards. That would not make any sense.

What I would like to see is a new way for students to finance their education at state run colleges and universities. I remember hearing something a few years back that in some countires the students are allowed to borrow for their education against future earnings, and the countries version of the IRS holds the debt and it becomes a payrole decution based on how much the person makes.This way all interest paid on the debt goes to the government, and if a person losses their job they are not on the hook for payments, until they start making money again. I think this might be a good system for our public colleges and universities to look at.

The bottom line is that college needs to be made avalible to more people, and America needs to find a way to do it.

Noreen Seebacher
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Blogger
Re: Loan Forgiveness
Noreen Seebacher   12/7/2011 10:50:51 AM
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I think you're onto something. The question has to be: Why is college so expensive--because on the surface, the rate of tuition inflation as measured against other goods and services just doesn't make sense. I'm sure part of it is supply and demand. Colleges did not dare charge as much back in the days when post-secondary education was a choice rather than an expectation for every college grad.

TelecomFreq
User Rank
Platinum
Re: Loan Forgiveness
TelecomFreq   12/7/2011 11:26:29 AM
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Noreen, I think a lot of the reason is that many Colleges are trying to attract top talent for prof postions, and that can drive up the cost, that coupled with a decline in gov funding relates to costs spiking. 

I am lucky, I do no thave any college loans, I was lucky enough to have my education paid for me via scholorships and grants, and later by my employer for grad school. but that is not the normal case, I do not think cost should be a factor to keep anyone from going to college.

If America allows the student loan situation to get out of control we will end up with generations that are lacking the education needed to drive the economy. And then we will be in real trouble.

Noreen Seebacher
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Blogger
Re: Loan Forgiveness
Noreen Seebacher   12/7/2011 11:56:41 AM
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There have been multiple studies that basically confirm the obvious:  For instance, undergraduate student borrowers are less likely to choose jobs in lower-paying sectors like government, nonprofit and education.

In addition, research suggests student loan debt weighs on the decisions of young adults to start families. Dora Gichevia at the University of North Carolina writes: A liquidity constrained young college graduate may need to work longer hours in order to make the required loan payments and have less time to spend on social activities that may lead to meeting a spouse. In a world in which perfect consumption smoothing is possible, it could be optimal for this worker to delay the payments until after starting a family.

AskAsa
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Platinum
Re: Loan Forgiveness
AskAsa   12/7/2011 12:52:44 PM
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The long term impact of this debt on young adults who can't find jobs, or can't find jobs that pay enough to cover their expenses and loan payments, risks creating major social shifts -- including lower donations from these students to their former schools, which could reduce future scholarships and potentially exacerbate the cycle of debt for future generations.

back2basicz
User Rank
Platinum
Re: Loan Forgiveness
back2basicz   12/7/2011 1:19:33 PM
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Ask Asa,

I never looked at it like that,but maybe that is reason enough for Universities to put in a Tuition freeze for next two years??

After all,Universities are all about building responsible citizens for the future.Are they not??

Ashish.

 

PAW
User Rank
Iron
Re: Loan Forgiveness
PAW   12/7/2011 1:49:38 PM
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I think students would do themselves a favor if they evaluated the long-term impact of debt to finance their eduication, before they enter into debt in the first place.  Maybe after careful consideration, going into debt for an education is not the right thing to do.

back2basicz
User Rank
Platinum
Re: Loan Forgiveness
back2basicz   12/7/2011 2:04:15 PM
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PAW,

That would work,if only the Students themselves as well as their parents would be educated in how Debt actually works.

For that they need basic economic and finance education.

Unfortunately is hugely lacking in most American households today starting with the President downwards.

Regards

Ashish.

PAW
User Rank
Iron
Re: Loan Forgiveness
PAW   12/7/2011 3:35:55 PM
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Yes, I agree that basic economic and finance education is lacking in most Americans.  But then, why would you need it if all you need to know is that you can walk away from your debt or, even better, it is foregiven.

Scott Raynovich
User Rank
Blogger
Re: Loan Forgiveness
Scott Raynovich   12/7/2011 5:34:20 PM
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Loan forgiveness is not the way.

Bullseye
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Iron
Re: Loan Forgiveness
Bullseye   12/7/2011 9:14:23 PM
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I suggest going back to school and finishing your degree. You only have two years left. There are numerous financial aide programs available to help. Imagine at the age of 45 and no degree. I thought like you once and glad I finished. Pay your loans.

Scott Raynovich
User Rank
Blogger
Re: Loan Forgiveness
Scott Raynovich   12/7/2011 9:56:46 PM
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Bullseye,

I agree.

 

Dex
User Rank
Iron
Re: Loan Forgiveness
Dex   12/7/2011 10:42:16 PM
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Agree with what? Finish school or pay the loans? Because unless I read the post wrong, he is paying his loans. So as for school, what's the point of getting an English degree? Shouldn't he wait to gain a better focus on a degree path with more potential?

PredictableChaos
User Rank
Platinum
Re: Loan Forgiveness
PredictableChaos   12/7/2011 11:15:57 PM
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It doesn't make sense to stay in college if you have no motivation - which is what Joey described.  This just becomes an extension of high school and there's no reason to go into debt for that.

I'm a big supporter of college.  Literally, with two kids in college, we send money quite often.  But from what Joey describes, I'd agree he should take a year and try his hand at actually writing.  Maybe he'll find he really enjoys it or maybe he'll find something else that motivates him to work.

Of course he should pay the loans back as soon as possible.  And he's the type of guy that wouldn't consider defaulting.

yalanand
User Rank
Platinum
Re: Loan Forgiveness
yalanand   12/8/2011 12:45:54 AM
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It doesn't make sense to stay in college if you have no motivation - which is what Joey described.

@PredictableChaos, I slightly disagree with you, motivation should not be the excuse for dropout once you choose your career path. You can have 10 different motivation's to choose a career path. Sometimes the subject interests, sometimes the subject has lot of scope etc. When we choose one career path we should do proper research about the course so that amount of effort/money invested on the course doesn't go in vain.


back2basicz
User Rank
Platinum
Re: Loan Forgiveness
back2basicz   12/8/2011 4:10:44 AM
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PC,

Extension of Highschool... Do u mean Frat parties,chasing the prettiest skirts on campus and well bunking classes??? Wow!! I miss the good times...

I agree with your opinion here,Joey should first figure out what fascinates and motivates him the most then work very,very hard to be the best in that area.

Regards

Ashish.

Drivewaygirl
User Rank
Platinum
Re: Loan Forgiveness
Drivewaygirl   12/9/2011 8:12:01 AM
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@Bullseye -- Please tell me what financial aid programs are applicable. Take a $40,000 a year school. You'll get $5000 or so MAX as a fed grant. Maybe another $2000 if you qualify for some kind of state aid. So basically you or your parents have to get loans for the balance. All those scholarship offers? More like glorified requests for personal information. Very few legit scholarships and the few that are rate as extremely hard to get.

Bullseye
User Rank
Iron
Re: Loan Forgiveness
Bullseye   12/9/2011 6:16:41 PM
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My state offers up to $12,192 sponsored by Cal grants. Google California grant and there is plenty of information. Also, there are federal grants for education. My niece received a $25000 grant for art school. Hope this helps. If you can't locate any options let me know and I'll help. Happy Holidays.

Jacob
User Rank
Iron
Re: Loan Forgiveness
Jacob   12/8/2011 3:18:37 AM
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1 saves
Joey, I think the government has to offer some cool off period for the repayment schedule. Otherwise it compels the students to look for an immediate job after schoolings to repay the loan. The cool off period can be either the student reaches some age or 1-2 years after completing the schooling. This can also provide a better breathing in unemployment situation.

back2basicz
User Rank
Platinum
Re: Loan Forgiveness
back2basicz   12/8/2011 4:25:28 AM
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Jacob,

I have a better suggestion.Let the Govt get out of the entire Student loan business and close the Department of Education down completely.

Let the Private sector back in on the student loan business.

Not only will that save us taxpayers a tremendous bundle and cut wastage(and our Govt debt piles) but you will be able to stop future generations from getting ensnared in debt mountains from which they will never be able to extricate themselves.

Too bad its most unlikely to happen under parasities like Obama  and his assorted flunkies.

Ah well we can always hope for Ron Paul....

Regards

Ashish.

Dex
User Rank
Iron
Re: Loan Forgiveness
Dex   12/8/2011 1:00:39 PM
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"Let the Private sector back in on the student loan business."

Makes sense to me.


back2basicz
User Rank
Platinum
Re: Loan Forgiveness
back2basicz   12/8/2011 1:26:54 PM
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Dex,

Sounds quite simple right? Unfortunately for  too many entitlement seekers all across America its too much to digest.

Way too many people today are dependent on the State in some form or another and any move to reduce this dependence will most probably create immense violence or social instability/anarchy.

Main reason is people will not know what to do.

BAsically You can take a horse to a pond but u cant teach him to drink.

Nice rant against socialism here do read

http://www.blackswantrading.com/blog/bid/72224/Are-we-an-artificial-hierarchical-oligopoly

Regards

Ashish.

Phoenix
User Rank
Gold
Re: Loan Forgiveness
Phoenix   12/7/2011 12:09:18 PM
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I think the system you mention where the loans are deducted based on your future earnings is a good one. I know some countries offer free education even at university level. Unfortunately people don't value what is given free and end up taking things for granted and asking for more with protests and strikes etc.

TelecomFreq
User Rank
Platinum
Re: Loan Forgiveness
TelecomFreq   12/7/2011 1:47:54 PM
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Phoenix, I would not say people do not value what is free, or low cost. Take the education system in Thailand for example. There all public education is decided by testing, from a very early age students have to compete via their test scores to see who will get seats in the best schools.

They use the same processes for their public universities. the public universities are held in a much higher regard then any private college they might. The public schools are very low cost, they might as well be free, and there are scholorships for students who earn a seat in the school but can not afford it.

In a system like this the students really do value the very high level of education they get. Though I do see a downside here. The education system in Thailand is much more structored than ours here in the US, as a result, students at these top schools do not have the chance to explore different classes to fill electives, my experience has been that this somewhat hampers creativity, but boosts knowledge, I think there needs to be a balance with a system like that.

back2basicz
User Rank
Platinum
Re: Loan Forgiveness
back2basicz   12/7/2011 1:17:24 PM
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PAW,

I agree wholeheartedly.

People like this Applebaum have gotten it all wrong.Nobody forced the said students to take the Loans for their education.

This whole idea of Debt forgiveness borders on the insane and challenges our very notion of being a responsible Capitalistic society,where the individual who takes on debts is responsible for paying it off.I can understand the rationale behind handouts from the State but this is ridiculous[Or has that notion already changed beyond repair than to the 2008 Wall Street bailouts???]

Sure Society has this thing about College Grads being very respectable but even that has changed now as people see some of the worlds most successful people all being College Dropouts(Bill Gates and Steve Jobs come to mind most readily).

Regards

Ashish.

back2basicz
User Rank
Platinum
Joey,Why did you leave College mid-way?
back2basicz   12/7/2011 1:48:03 PM
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Joey,

I don't mean to be rude,insensitive or prying but what was going through your mind when you decided to leave college mid-way?

It will be very,very interesting to get a viewpoint into what a College going adult thinks about the way the Higher education system works today.

I remember reading Steve Jobs talk at Stanford where he talked about why he quit college mid-way.It was fascinating to say the least.

However,here's another most interesting link.Basically what they say is that there are way too many LIberal Arts grads today and too few jobs for them.It would help a lot if some of them were diverted elsewhere-Say Engineering or Medicine.

Great article and a must read.

http://www.caseyresearch.com/editorial.php?page=articles/uss-education-bubble&ppref=ZHB428ED1211A

Ashish.

TelecomFreq
User Rank
Platinum
Re: Joey,Why did you leave College mid-way?
TelecomFreq   12/7/2011 2:21:17 PM
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Ashish,

I would also be interested to know why Joey left half way through.

I can share my experience. I left college the first time at the 3 year point to go work for a dot com that I was sure would make me rich (it didnt make anyone rich) After spending a few years not doing much of anything, I changed direction and went back to school. and was able to do it debt free.

For every Steve Jobs and Bill Gates that make it big after dropping out there are far more who end up wishing they finished school and got the degree.

back2basicz
User Rank
Platinum
Re: Joey,Why did you leave College mid-way?
back2basicz   12/7/2011 2:29:39 PM
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Telecom,

Precisely,

A lot of people have dropped out of college either because "this time was different"-The Wall street and Dot com booms of the last decade are notable examples or because they lost interest in what they were studying.

Which is why it would be interesting to see how todays young adults view college education.

As someone who works on College admissions part-time,this will be an interesting thing to share with my colleagues.

Regards

Ashish.

Joey Naddeo
User Rank
Gold
Re: Joey,Why did you leave College mid-way?
Joey Naddeo   12/7/2011 3:04:36 PM
 

@back2basicz - My decision to leave school was a result of a few things. One was my constant dissatisfcation with colleges I was attending. I transferred three times in my first two years and was never happy with the education I received. In my last semester of college I had severe lack of motivation, and found it increasingly difficult to finish even the simplest tasks. It seemed stupid to continue racking up student debt if I wasn't passing classes. 

My lack of motivation came from rising feelings that education in the liberal arts, specifically English, which was my major, was pointless. I knew I wanted to be a writer, but it became clear that the only thing I was learning in college was how to write an academic paper that pleased the professor who assigned it. I was also aware, through the constant reminding of a friend, that Lib arts majors are in excess and there aren't many jobs for them. 

I came to the conclusion that it was a better idea, so long as my motiviation was non-existant, to leave college and accumulate experience in my desired profession. I've been fortunate enough to get the opportunity to do so here at IU. 

 

back2basicz
User Rank
Platinum
Re: Joey,Why did you leave College mid-way?
back2basicz   12/8/2011 4:02:50 AM
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Joey,

Thanks for sharing your valuable perspective on this critical issue at hand here.

I totally and fully agree with the decisions you have taken here.

The link I had shared below talks in details about this very same issue of too many students studying Liberal Arts.

http://www.caseyresearch.com/editorial.php?page=articles/uss-education-bubble&ppref=ZHB428ED1211A

BY being a highly regarded &rated(just check out the number of comments you are racking up here my man!!!) Blogger at IU ,you are very much taking the first step in the direction towards your goal of being an accomplished writer.

I wish you all the best for the future.

Regards

Ashish.


back2basicz
User Rank
Platinum
Here's the great thing about America..
back2basicz   12/7/2011 2:35:06 PM
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Guys,

In all this we forgot to mention one great thing about America.Its okay to dropout of college (for whatever reason).

People dont attach some sort of stigma to it,unlike in Asia where if you drop out you are looked at as if you are a mis-fit or a burden on society.

Guess this shows the level to which Asia still has to evolve to catch up with America's maturity here.

Ashish.

TelecomFreq
User Rank
Platinum
Re: Here's the great thing about America..
TelecomFreq   12/7/2011 3:01:52 PM
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Ashish,

Thats a great point about the stigma attached to dropping out of college in Asia, I know in Thailand if you drop out of one of the public universities you can not go back.

I think your choice of the word maturity is a great one that really hits the nail on the head, so to speak. There has been so much focus in many asian countries on the quality of education not much time has been spent to explore creativity or freedom of thought, but I think that will come with time, i see it trending this way already.

yalanand
User Rank
Platinum
Re: Here's the great thing about America..
yalanand   12/8/2011 12:36:20 AM
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People dont attach some sort of stigma to it,unlike in Asia where if you drop out you are looked at as if you are a mis-fit or a burden on society.

@Ashish, you are partly right. I think mis-fit and burden on society are pretty harsh words describe the reality here. The thing is parents have lot of expectation from kids, they expect them to perform all the time.  And sometimes parental pressure is good because it forces the student to perform well. That is the reason student drop-out ratio is pretty low in India because they are under the pressure to perform all the time.


back2basicz
User Rank
Platinum
Re: Here's the great thing about America..
back2basicz   12/8/2011 3:49:00 AM
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Anand,

Is that why the suicide rate amongst students in India is the highest in the world?

More often than not its the parents who need counselling more than the kids[I am saying this from my perspective as an Admissions officer for a Major University]

Thankfully we are slowly and surely seeing tremendous change happening in the mindset of people/parents in India(why Do all parents want their kids to be Engineers or Doctors???).Films and TV have played an extremely significant role here.

People and their interests change over time.Its a fact.Something that holds ones fascination when he/she is 16-17 need not be the same thing which the student likes when he/she is 24-25.

Parents need to have the maturity to understand and appreciate these changes.

We don't yet have an excess of Engineers and Doctors in India(as India is growing very fast ) similar to the one we have in LIberal Arts majors in America but unless the attitude of parents towards other vocations changes and changes fast that day will dawn upon us within the next decade or two.

For a perspective on how things may turn out in India look at South.Korea today

http://www.bbc.co.uk/news/business-15662324

Regards

Ashish.

cat tail
User Rank
Platinum
Develop a thick skin
cat tail   12/8/2011 1:05:24 PM
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Joey, if you can take the grilling you get online, then you're developing one of the most necessary skills for your chosen career.

Tenacious
User Rank
Platinum
Re: Develop a thick skin
Tenacious   12/8/2011 1:14:19 PM
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You're a good writer Joey. Keep it coming.

erierunner
User Rank
Iron
Increases
erierunner   12/12/2011 11:35:14 PM
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College should not be free and debt should not be forgiven.  What does need to happen is someone somewhere needs to step in against the rising costs.  How can endowments grow at the rate they are today and you still see an 8% increase.  There is no oversight as to what is charged and an annual increase is a given no matter what the school budget is.  Do this year after year and you get the amount of debt that we have today. 

impactnow
User Rank
Iron
loans
impactnow   12/12/2011 11:57:12 PM
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Joey you bring up a great point that many miss when they go to college, its and investment and you should look at your ROI. If you are taking out a loan make sure that your chosen career can accommodate paying back that loan. If you are attending an expensive Ivy League school with a liberal arts major think seriously about what your are signing your name to—you may not be able to acquire a salary that will meet your payments. Research your chosen field and then determine the amount of debt you should take on. The days of follow your heart in education are gone, its way to expensive of a proposition.

back2basicz
User Rank
Platinum
Suddenly everyones talking about how expensive COllege is ..
back2basicz   12/14/2011 1:54:36 PM
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Guys,

Now Obama wants in on the action too....

 

http://www.economist.com/node/21541398?fsrc=nlw|mgt|12-14-2011|management_thinking

 

Drivewaygirl
User Rank
Platinum
Re: Suddenly everyones talking about how expensive COllege is ..
Drivewaygirl   12/19/2011 12:30:32 PM
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Very interesting piece Ashish. Thanks for sharing.

driven
User Rank
Iron
Re: Suddenly everyones talking about how expensive COllege is ..
driven   12/19/2011 12:49:04 PM
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I agree, Ashish. Well worth reading.





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