Re: Why you need to get out of Student Loans
Tenacious
12/7/2011 12:42:03 PM
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,
Re: Why you need to get out of Student Loans
Drivewaygirl
12/7/2011 12:24:39 PM
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,
Re: Loan Forgiveness
Phoenix
12/7/2011 12:09:18 PM
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.
Re: Why you need to get out of Student Loans
Dex
12/7/2011 12:05:16 PM
That is a really depressing visual representation of the student loan burden.
Re: Why you need to get out of Student Loans
Noreen Seebacher
12/7/2011 12:03:06 PM
That's a great infographic, @Predictable. I'm going to post it here for anyone who wants to see it.
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.
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.
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.
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.
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.
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