The future of student loans

[Miss Tequila]

Nov 21, 2020 18:00:27 GMT -5 @bamafan1954 said:

Nov 21, 2020 17:31:55 GMT -5 sesfw said:

but I personally think they'd be better off passing something that seriously caps the interest rate instead.

Another thing that might help with the SL situation is controlling what fields are eligible for the loans.  Too many people want to 'follow their dream' right now instead of getting a paying job to fund their dream.  My vocation is electronics, my avocation is music. I work in electronics to pay for my music.

It's not reasonable for someone to have $50K in SL for a job that pays $36K annually and not much room for income advancement.


What am I missing? ...........

You are missing the teaching profession.  Starting pay is abysmal.  Alabama got beginners to $40k only this year.  It tops out after 27 years at $52k.

But it is difficult not to have $50k in SL when tuition is $10k and your parents can't or won't pay for it.

So do we decide that only people who can afford college without loans should be teachers?  There is an element of "follow their dream" in many of the subject areas . . . art, music, etc.

I can assure you that teachers in my area are paid very well. One of my friends is a teacher in my school district and her salary is slightly over $90k and she has great health insurance. I know there are states that don’t pay well but there are a lot that do.

[Miss Tequila]

This is one of the reasons (one of many) that I voted against Biden. I am 100% against wiping away student loan debt. I’m ok with making interest rates reasonable, but anything above that is completely ridiculous. I graduated with $18k in student loan debt and made $20k fresh out of college. Trust me, it was not fun but I focused on my debt and I paid it off as soon as I could. I didn’t travel, I didn’t blow my money. If I could pay off my debt so could everyone else

[Deleted]

Nov 21, 2020 21:57:56 GMT -5 Miss Tequila said:

Nov 21, 2020 18:00:27 GMT -5 @bamafan1954 said:

You are missing the teaching profession.  Starting pay is abysmal.  Alabama got beginners to $40k only this year.  It tops out after 27 years at $52k.

But it is difficult not to have $50k in SL when tuition is $10k and your parents can't or won't pay for it.

So do we decide that only people who can afford college without loans should be teachers?  There is an element of "follow their dream" in many of the subject areas . . . art, music, etc.

I can assure you that teachers in my area are paid very well. One of my friends is a teacher in my school district and her salary is slightly over $90k and she has great health insurance. I know there are states that don’t pay well but there are a lot that do.

And some CPAs make a decent living.  But Lizard Queen points out that not all do.  Same thing.

And I doubt if your friend started that high.  I would be earning $65k if I were still working.  I have a MA and maximum experience.  My BFF would be earning $75k because she has an EdS and is National Board Certified.  We taught in an affluent school system.  There are ways to increase your salary.  I really had no complaints about my salary. But then I had no student loans. 

But that isn't the norm for a new teacher.

[Miss Tequila]

Nov 21, 2020 22:25:35 GMT -5 @bamafan1954 said:

Nov 21, 2020 21:57:56 GMT -5 Miss Tequila said:

I can assure you that teachers in my area are paid very well. One of my friends is a teacher in my school district and her salary is slightly over $90k and she has great health insurance. I know there are states that don’t pay well but there are a lot that do.

And some CPAs make a decent living.  But Lizard Queen points out that not all do.  Same thing.

Except you said “the teaching profession” and not “teachers in Alabama”. Teachers in my are and plenty other states would have zero problem paying their student loans. I would suggest if a person wants to teach in a low paid state like Alabama, the take that into account when choosing their college. Perhaps a 2 year stint at a community college and then 2 years at a state college would be a better choice.

[Miss Tequila]

Nov 21, 2020 22:25:35 GMT -5 @bamafan1954 said:

Nov 21, 2020 21:57:56 GMT -5 Miss Tequila said:

I can assure you that teachers in my area are paid very well. One of my friends is a teacher in my school district and her salary is slightly over $90k and she has great health insurance. I know there are states that don’t pay well but there are a lot that do.

And some CPAs make a decent living.  But Lizard Queen points out that not all do.  Same thing.

And I doubt if your friend started that high.  I would be earning $65k if I were still working.  I have a MA and maximum experience.  My BFF would be earning $75k because she has an EdS and is National Board Certified.  We taught in an affluent school system.  There are ways to increase your salary.  I really had no complaints about my salary. But then I had no student loans. 

But that isn't the norm for a new teacher.

We can’t go by a starting salary when deciding whether a profession is worth it or not. Lord knows I didn’t go the cpa track to make $20k (my first year salary).

There has to be some responsibility by the person signing for student loans. If not, then I’m for only giving student loans to credit worthy students. We can’t let people rack up whatever they want and then stick the debt into the taxpayers.

[Lizard Queen]

My first job also paid $20k, and it took me 15 years to get to $40k, do it's really hard for me to feel sorry for teachers starting out at $40k.

[Deleted]

Nov 21, 2020 22:51:19 GMT -5 Lizard Queen said:

My first job also paid $20k, and it took me 15 years to get to $40k, do it's really hard for me to feel sorry for teachers starting out at $40k.

You aren't being asked to feel sorry for anyone who starts out at $40k.   

sesfw asked: 

It's not reasonable for someone to have $50K in SL for a job that pays $36K annually and not much room for income advancement.





What am I missing? ...........

I simply pointed out that he/she was missing teachers, most of whom start low without much room for income advancement . . . unless they want to get more degrees with more student loans.  

I didn't say teachers were the only ones, most deserving ones, or anything else.  I never asked for sympathy for them.  I only pointed out that they fit the parameters Sesfw provided.

That's it.

[jelloshots4all]

I think interest rates on SL should be very low.  I do not agree with eliminating student debt.  Also, students should look at the tuition costs, their selected major, and potential job opportunities.

Since CPAs have been brought up, I will chime in as I am one. I chose a private University with a higher price tag.  I did receive some academic scholarships, but I also worked 2 jobs while in school and received very little help from my parents (which I knew going in).  Why should my loans be forgiven when I could have received a very comparable education with the same degree at a state school?

My daughter goes to the state school with a great accounting program that several of my friends attended and have great accounting jobs. My daughter is in the business school, but NOT AN ACCOUNTING MAJOR.  

We did college tours of my alma mater and several other schools.  My alma mater is now 4x the cost of her state school. 

Why would it be "fair" to forgive $80,000 of my student loans, and only $20,000 of my friends student loans for the same major??  (this is a hypothetical because I don't have any student loans now)

[Deleted]

Nov 22, 2020 9:28:39 GMT -5 jelloshots4all said:

I think interest rates on SL should be very low.  I do not agree with eliminating student debt.  Also, students should look at the tuition costs, their selected major, and potential job opportunities.

I agree.  Unfortunately, I don't think "financial aid counselors" at universities have any incentive to walk students and their parents through the process of looking at the value of a degree (in terms of increased income) vs. the cost.  How would they ever get enough students to fill the classes in English Lit. and Art History?  (And yes, those can be valuable and interesting things to learn but the demand for majors in those areas is limited.)  Similarly, are you pursuing grad school because it will lead to higher earnings (as with teachers) or because you can't find a job with a BA in Creative Writing so you want to get a Masters and maybe the job market will be better in a few years?

Sadly, there are some degrees that are best  left to trust fund babies.  There are also students who will drop out after a year and will have no degree and maybe a mix of transferrable courses and some that are remedial so not even college level.  

I think there should be limits on interest rates, especially with government-guaranteed loans, and no blanket loan forgiveness.

[tskeeter]

Nov 21, 2020 22:44:02 GMT -5 Miss Tequila said:

Nov 21, 2020 22:25:35 GMT -5 @bamafan1954 said:

And some CPAs make a decent living.  But Lizard Queen points out that not all do.  Same thing.

And I doubt if your friend started that high.  I would be earning $65k if I were still working.  I have a MA and maximum experience.  My BFF would be earning $75k because she has an EdS and is National Board Certified.  We taught in an affluent school system.  There are ways to increase your salary.  I really had no complaints about my salary. But then I had no student loans. 

But that isn't the norm for a new teacher.

We can’t go by a starting salary when deciding whether a profession is worth it or not. Lord knows I didn’t go the cpa track to make $20k (my first year salary).

There has to be some responsibility by the person signing for student loans. If not, then I’m for only giving student loans to credit worthy students. We can’t let people rack up whatever they want and then stick the debt into the taxpayers.

How about we tie the loan to the career?  The maximum amount a student could borrow would be based on the expected income that the degree will generate.  Kind of like a business loan, where the investment must be justified by the expected return.  No more loans of $150K to finance a Masters in Fine Arts so you can be a $12K a year photographer’s assistant.  (Wouldn’t it be a novel idea to make the education system justify the cost of the education it is selling instead of students just borrowing what ever the institution decides to charge?)

[justme]

Nov 22, 2020 11:07:43 GMT -5 @athena53 said:

Nov 22, 2020 9:28:39 GMT -5 jelloshots4all said:

I think interest rates on SL should be very low.  I do not agree with eliminating student debt.  Also, students should look at the tuition costs, their selected major, and potential job opportunities.

I agree.  Unfortunately, I don't think "financial aid counselors" at universities have any incentive to walk students and their parents through the process of looking at the value of a degree (in terms of increased income) vs. the cost.  How would they ever get enough students to fill the classes in English Lit. and Art History?  (And yes, those can be valuable and interesting things to learn but the demand for majors in those areas is limited.)  Similarly, are you pursuing grad school because it will lead to higher earnings (as with teachers) or because you can't find a job with a BA in Creative Writing so you want to get a Masters and maybe the job market will be better in a few years?

Sadly, there are some degrees that are best  left to trust fund babies.  There are also students who will drop out after a year and will have no degree and maybe a mix of transferrable courses and some that are remedial so not even college level.  

I think there should be limits on interest rates, especially with government-guaranteed loans, and no blanket loan forgiveness.

That's why I think being able to allow your students have federal loans should come with required reporting on average student loan amounts, which are then split out by major. It'd be a little harder to get average salary for major by school - though they could make it a reporting requirement on student loans - but they could just show average salary by professions with that major 1 year, 5 years, and 10 years out.

Or a table that's like SL level and salary and show the payments per year.

[justme]

Nov 22, 2020 23:17:53 GMT -5 tskeeter said:

Nov 21, 2020 22:44:02 GMT -5 Miss Tequila said:

We can’t go by a starting salary when deciding whether a profession is worth it or not. Lord knows I didn’t go the cpa track to make $20k (my first year salary).

There has to be some responsibility by the person signing for student loans. If not, then I’m for only giving student loans to credit worthy students. We can’t let people rack up whatever they want and then stick the debt into the taxpayers.

How about we tie the loan to the career?  The maximum amount a student could borrow would be based on the expected income that the degree will generate.  Kind of like a business loan, where the investment must be justified by the expected return.  No more loans of $150K to finance a Masters in Fine Arts so you can be a $12K a year photographer’s assistant.  (Wouldn’t it be a novel idea to make the education system justify the cost of the education it is selling instead of students just borrowing what ever the institution decides to charge?)

But what about the finance major that graduates and says fuck this shit and goes into photography? Or the would be history major that would have gone into law school but couldn't get the loans to finish undergrad? Or what happens when you graduate too many in one major over saturating the market that crashes wages so graduates are suddenly making half the money? (And yes that has happened - look into law schools, it's a big reason I didn't become a lawyer which was my dream) Or what happens when a major that doesn't have a high salary suddenly doesn't have anyone graduating at all?

Doing this will 100% have so many unintended consequences it will fuck shit up.

Not to mention the cost of the labor to figure out what each college will allow in loans because you can't just pick one set amount across all of the US.

[tskeeter]

Nov 22, 2020 23:54:34 GMT -5 justme said:

Nov 22, 2020 23:17:53 GMT -5 tskeeter said:

How about we tie the loan to the career?  The maximum amount a student could borrow would be based on the expected income that the degree will generate.  Kind of like a business loan, where the investment must be justified by the expected return.  No more loans of $150K to finance a Masters in Fine Arts so you can be a $12K a year photographer’s assistant.  (Wouldn’t it be a novel idea to make the education system justify the cost of the education it is selling instead of students just borrowing what ever the institution decides to charge?)

But what about the finance major that graduates and says fuck this shit and goes into photography? Or the would be history major that would have gone into law school but couldn't get the loans to finish undergrad? Or what happens when you graduate too many in one major over saturating the market that crashes wages so graduates are suddenly making half the money? (And yes that has happened - look into law schools, it's a big reason I didn't become a lawyer which was my dream) Or what happens when a major that doesn't have a high salary suddenly doesn't have anyone graduating at all?

Doing this will 100% have so many unintended consequences it will fuck shit up.

Not to mention the cost of the labor to figure out what each college will allow in loans because you can't just pick one set amount across all of the US.

So, you’re proposing that lenders continue to make loans that the borrows have no way of paying off?  And that colleges and universities should continue to encourage naive students (many who have difficulty paying their student loans are first generation college students) to enroll in programs that are unlikely to provide a living wage upon graduation?

You contend that it’s too complex to administer career (expected income) based student loan system?  Gee, we manage to use expected income to determine how much money people can borrow to buy a house in thousands of different towns and neighborhoods across the country every day.  I can’t imagine that doing something similar for several hundred colleges and career options would be an insurmountable obstacle.

Kids change their minds?  A certain amount of that is probably always going to happen. I expect that a more demanding lender evaluation at the beginning of the lending process would encourage more borrower thought and commitment to a career objective than the current process.  These days, I don’t think a lot of student borrowers do any level of return on investment evaluation before taking out  tens of thousands of student loans.

What do you do when the labor market changes?  What do you do about home loans when the economy tanks or when someone loses their job?  Borrowing money creates risk for both the borrower and the lender.  I don’t think we can protect people from all of the risk their decisions creates.  (On a macro basis, lenders should be less willing to make student loans or would limit the amount they will lend for careers with labor surpluses.  Probably a better situation for student borrowers than the current system, which is more likely to saddle students with loans they can’t pay.)

Our current student loan system, which makes student loans very difficult to discharge in bankruptcy, has effectively shifted the risk of non-payment from student loan lenders to the taxpayers (via the proposed loan forgiveness).  If lenders had to bear the losses associated with situations such as my MFA example, the lenders would implement lending standards that would reduce the likelihood that large amounts would be lent to fund educations for low income careers.

[justme]

Nov 23, 2020 3:43:38 GMT -5 tskeeter said:

Nov 22, 2020 23:54:34 GMT -5 justme said:

But what about the finance major that graduates and says fuck this shit and goes into photography? Or the would be history major that would have gone into law school but couldn't get the loans to finish undergrad? Or what happens when you graduate too many in one major over saturating the market that crashes wages so graduates are suddenly making half the money? (And yes that has happened - look into law schools, it's a big reason I didn't become a lawyer which was my dream) Or what happens when a major that doesn't have a high salary suddenly doesn't have anyone graduating at all?

Doing this will 100% have so many unintended consequences it will fuck shit up.

Not to mention the cost of the labor to figure out what each college will allow in loans because you can't just pick one set amount across all of the US.

So, you’re proposing that lenders continue to make loans that the borrows have no way of paying off?  And that colleges and universities should continue to encourage naive students (many who have difficulty paying their student loans are first generation college students) to enroll in programs that are unlikely to provide a living wage upon graduation?

You contend that it’s too complex to administer career (expected income) based student loan system?  Gee, we manage to use expected income to determine how much money people can borrow to buy a house in thousands of different towns and neighborhoods across the country every day.  I can’t imagine that doing something similar for several hundred colleges and career options would be an insurmountable obstacle.

Kids change their minds?  A certain amount of that is probably always going to happen. I expect that a more demanding lender evaluation at the beginning of the lending process would encourage more borrower thought and commitment to a career objective than the current process.  These days, I don’t think a lot of student borrowers do any level of return on investment evaluation before taking out  tens of thousands of student loans.

What do you do when the labor market changes?  What do you do about home loans when the economy tanks or when someone loses their job?  Borrowing money creates risk for both the borrower and the lender.  I don’t think we can protect people from all of the risk their decisions creates.  (On a macro basis, lenders should be less willing to make student loans or would limit the amount they will lend for careers with labor surpluses.  Probably a better situation for student borrowers than the current system, which is more likely to saddle students with loans they can’t pay.)

Our current student loan system, which makes student loans very difficult to discharge in bankruptcy, has effectively shifted the risk of non-payment from student loan lenders to the taxpayers (via the proposed loan forgiveness).  If lenders had to bear the losses associated with situations such as my MFA example, the lenders would implement lending standards that would reduce the likelihood that large amounts would be lent to fund educations for low income careers.

Mortgages aren't made on EXPECTED income they are made on VERIFIED income that is verified with pay stubs and tax returns and are also added to with copies of bank statements and other investments. The only guess work with mortgages is the assumption that you won't lose your job or that you would be able to find a job of similar pay if you do lose it. 

So your entire premise of trying to draw a parallels between the two is is just wrong. 

There are thousands of colleges, each in separate COLA that affect salaries. And each area also has varying needs of work. There's also the variable of those that would stay where the college is, vs move back to their hometown, vs somewhere else. Not to mention that each major doesn't have only one job option and sometimes the pay scale for jobs with one major can vary wildly. 

[jerseygirl]

WSJ had an opinion piece today. Limit SL relief to $5000. This would take care of the group that started college but didn’t graduate. Theory is that college graduates make more money than those w/o degrees . About 50% of population doesn’t have degree and these would be taxed to pay for SL debt relief for the more affluent

Largest SL are for those with graduate degrees (MD Attorneys dentists) who are more affluent and more able to pay SLs. So more poorly paid would be taxed to help more affluent

[tskeeter]

Nov 23, 2020 11:53:41 GMT -5 jerseygirl said:

WSJ had an opinion piece today. Limit SL relief to $5000. This would take care of the group that started college but didn’t graduate. Theory is that college graduates make more money than those w/o degrees . About 50% of population doesn’t have degree and these would be taxed to pay for SL debt relief for the more affluent

Largest SL are for those with graduate degrees (MD Attorneys dentists) who are more affluent and more able to pay SLs. So more poorly paid would be taxed to help more affluent

Let’s remember that approximately 50% of the US population pays no federal income tax.  The WSJ taxing the poor, presumably the 50% of the population without degrees, to pay for student loan forgiveness for the affluent argument really doesn’t hold water very well.

[tskeeter]

Nov 23, 2020 11:40:13 GMT -5 justme said:

Nov 23, 2020 3:43:38 GMT -5 tskeeter said:

So, you’re proposing that lenders continue to make loans that the borrows have no way of paying off?  And that colleges and universities should continue to encourage naive students (many who have difficulty paying their student loans are first generation college students) to enroll in programs that are unlikely to provide a living wage upon graduation?

You contend that it’s too complex to administer career (expected income) based student loan system?  Gee, we manage to use expected income to determine how much money people can borrow to buy a house in thousands of different towns and neighborhoods across the country every day.  I can’t imagine that doing something similar for several hundred colleges and career options would be an insurmountable obstacle.

Kids change their minds?  A certain amount of that is probably always going to happen. I expect that a more demanding lender evaluation at the beginning of the lending process would encourage more borrower thought and commitment to a career objective than the current process.  These days, I don’t think a lot of student borrowers do any level of return on investment evaluation before taking out  tens of thousands of student loans.

What do you do when the labor market changes?  What do you do about home loans when the economy tanks or when someone loses their job?  Borrowing money creates risk for both the borrower and the lender.  I don’t think we can protect people from all of the risk their decisions creates.  (On a macro basis, lenders should be less willing to make student loans or would limit the amount they will lend for careers with labor surpluses.  Probably a better situation for student borrowers than the current system, which is more likely to saddle students with loans they can’t pay.)

Our current student loan system, which makes student loans very difficult to discharge in bankruptcy, has effectively shifted the risk of non-payment from student loan lenders to the taxpayers (via the proposed loan forgiveness).  If lenders had to bear the losses associated with situations such as my MFA example, the lenders would implement lending standards that would reduce the likelihood that large amounts would be lent to fund educations for low income careers.

Mortgages aren't made on EXPECTED income they are made on VERIFIED income that is verified with pay stubs and tax returns and are also added to with copies of bank statements and other investments. The only guess work with mortgages is the assumption that you won't lose your job or that you would be able to find a job of similar pay if you do lose it. 

So your entire premise of trying to draw a parallels between the two is is just wrong. 

There are thousands of colleges, each in separate COLA that affect salaries. And each area also has varying needs of work. There's also the variable of those that would stay where the college is, vs move back to their hometown, vs somewhere else. Not to mention that each major doesn't have only one job option and sometimes the pay scale for jobs with one major can vary wildly. 

Lending money is 100% about what is expected.  The only reason that lenders verify income is because they want to be as sure as possible that the income can be expected to continue.  Not guaranteed to continue, but expected.  Just as most student borrowers are expected, but not guaranteed, to graduate college, get jobs in the field for which they were educated, and pay off their student loans.  

[Lizard Queen]

I know we don't want to pick winners and losers, but I think that limiting loans for low paying occupations could be a good thing. It's mostly about supply and demand, and lowering the supply would boost the pay for those occupations. I think putting in limits would help students choose their majors more wisely. If students show great promise, they'd still be able to get scholarships.

[justme]

I'm all for limiting the overall amount of the loans, but not by major. You don't pick a career in college so you can't use that. I 100% believe in unintended consequences going down that road beyond that fact it in no way guarantees the loans will be paid.

The only way I'd be slightly behind amount by major is if there was a quantity limit on it. The top or first 20k country wide computer engineering students that year get loans, the rest are SOL. But it's still a stupid idea and grasping at straws trying to parallel it to mortgages is stupid.

[Miss Tequila]

Nov 23, 2020 11:53:41 GMT -5 jerseygirl said:

WSJ had an opinion piece today. Limit SL relief to $5000. This would take care of the group that started college but didn’t graduate. Theory is that college graduates make more money than those w/o degrees . About 50% of population doesn’t have degree and these would be taxed to pay for SL debt relief for the more affluent

Largest SL are for those with graduate degrees (MD Attorneys dentists) who are more affluent and more able to pay SLs. So more poorly paid would be taxed to help more affluent

Or we can just let the people who signed for the student loans pay back their debt. Like I did. Like my daughter is doing. I can’t stand the new mentality of “the taxpayers should fund my decisions”.

[wvugurl26]

I'm all for people paying their loans. Cut the interest rates and have real conversations about what paying these back means before students take out loans.

The interest rate on a non dischargeable loan should not be more than a mortgage.

The interest rate on the mortgage on my house is less than the rate on my federal student loans and my husband had a crappy credit score when he bought this place.

[Deleted]

Nov 23, 2020 11:40:13 GMT -5 justme said:

Nov 23, 2020 3:43:38 GMT -5 tskeeter said:

<snip>
Our current student loan system, which makes student loans very difficult to discharge in bankruptcy, has effectively shifted the risk of non-payment from student loan lenders to the taxpayers (via the proposed loan forgiveness).  If lenders had to bear the losses associated with situations such as my MFA example, the lenders would implement lending standards that would reduce the likelihood that large amounts would be lent to fund educations for low income careers.

Mortgages aren't made on EXPECTED income they are made on VERIFIED income that is verified with pay stubs and tax returns and are also added to with copies of bank statements and other investments. The only guess work with mortgages is the assumption that you won't lose your job or that you would be able to find a job of similar pay if you do lose it. 

So your entire premise of trying to draw a parallels between the two is is just wrong. 

There are thousands of colleges, each in separate COLA that affect salaries. And each area also has varying needs of work. There's also the variable of those that would stay where the college is, vs move back to their hometown, vs somewhere else. Not to mention that each major doesn't have only one job option and sometimes the pay scale for jobs with one major can vary wildly. 

How about presenting a simple comparison of the minimum payment on the loan in the first year vs. the average starting salary in that major for graduates from, say, the last 2 years? Of course there are variables- a college in a LCOL area may have graduates getting offers in Chicago or NYC or an English Lit. major might go into the family business or the Classics major have a double major with Math being the other one- but if a student looks at ranges they'll have an idea of how much of their starting pay will be eaten up by loan payments.   

And I agree that the loan companies should have some skin in the game- if their late payment rate gets too far above the average maybe the Fed should stop guaranteeing their loans.

[justme]

Nov 23, 2020 19:57:14 GMT -5 @athena53 said:

Nov 23, 2020 11:40:13 GMT -5 justme said:

Mortgages aren't made on EXPECTED income they are made on VERIFIED income that is verified with pay stubs and tax returns and are also added to with copies of bank statements and other investments. The only guess work with mortgages is the assumption that you won't lose your job or that you would be able to find a job of similar pay if you do lose it. 

So your entire premise of trying to draw a parallels between the two is is just wrong. 

There are thousands of colleges, each in separate COLA that affect salaries. And each area also has varying needs of work. There's also the variable of those that would stay where the college is, vs move back to their hometown, vs somewhere else. Not to mention that each major doesn't have only one job option and sometimes the pay scale for jobs with one major can vary wildly. 

How about presenting a simple comparison of the minimum payment on the loan in the first year vs. the average starting salary in that major for graduates from, say, the last 2 years? Of course there are variables- a college in a LCOL area may have graduates getting offers in Chicago or NYC or an English Lit. major might go into the family business or the Classics major have a double major with Math being the other one- but if a student looks at ranges they'll have an idea of how much of their starting pay will be eaten up by loan payments.   

And I agree that the loan companies should have some skin in the game- if their late payment rate gets too far above the average maybe the Fed should stop guaranteeing their loans.

Did nobody read my first post on this thread?  Sorry it was my second post, #16.

[nidena]

An interesting article about student loan holder demographics.

[geenamercile]

I am actually okay with the forgiveness programs we have now.  studentaid.gov/manage-loans/forgiveness-cancellation/public-service covers teachers and public employees,  studentaid.gov/manage-loans/repayment/plans/income-driven for everyone else.  No one's student loan should last more then 20 to 25 years.  Yes that seems like a lot, but so is a 30 year mortgage.  

[justme]

Nov 24, 2020 21:02:36 GMT -5 geenamercile said:

I am actually okay with the forgiveness programs we have now.  studentaid.gov/manage-loans/forgiveness-cancellation/public-service covers teachers and public employees,  studentaid.gov/manage-loans/repayment/plans/income-driven for everyone else.  No one's student loan should last more then 20 to 25 years.  Yes that seems like a lot, but so is a 30 year mortgage.  

The problem is that they're not working in execution. Now, there is a question on whether that's because of how the plan or whether it's because of Frau devos... 

Though the non public service employees could still be hit with a huge tax bill as last I knew all their forgiven debt was taxable. 20% of even $20k would be a lot for some to come up with - which is likely the type to still have $20k to forgive after 20 years. 

I still think keeping the interest rates low would solve a lot of issues. There's no 100% guaranteed debt with next to no recovery cost that has rates as high as SLs. 

[thyme4change]

Nov 23, 2020 19:14:31 GMT -5 Miss Tequila said:

Nov 23, 2020 11:53:41 GMT -5 jerseygirl said:

WSJ had an opinion piece today. Limit SL relief to $5000. This would take care of the group that started college but didn’t graduate. Theory is that college graduates make more money than those w/o degrees . About 50% of population doesn’t have degree and these would be taxed to pay for SL debt relief for the more affluent

Largest SL are for those with graduate degrees (MD Attorneys dentists) who are more affluent and more able to pay SLs. So more poorly paid would be taxed to help more affluent

Or we can just let the people who signed for the student loans pay back their debt. Like I did. Like my daughter is doing. I can’t stand the new mentality of “the taxpayers should fund my decisions”.

I always struggled with the story of the prodigal son, who took his inheritance, pissed it away, and then returned home, where his father told the son - who stayed home and worked for his father for years - to get the prized lamb and slaughter it so there could be a giant party for the returning son. I was told repeatedly that this should comfort me that my heavenly father will always be excited to see me, and my mistakes and indiscretions will be forgiven. I only took that if I didn't want to be a chump, I should do whatever the fuck I want and then come back to drain more resources off the suckers that have been slaving away.

That said, I do agree that two wrongs don't make a right. Student loan forgiveness- even very limited programs- will give a boost to the economy and stability to a lot of people. It is our collective problem, so as irritating as it is than some people made bad choices and will benefit from some programs, if the economy as a whole benefits more from forgiving those loans, I think they should be on the table.

The real tragedy is that we let this happen in the first place- and guess who supported the actions that got us here?!

[adela76]

Nov 25, 2020 10:51:21 GMT -5 thyme4change said:

The real tragedy is that we let this happen in the first place- and guess who supported the actions that got us here?!

Who?

[Opti]

Nov 21, 2020 10:52:14 GMT -5 sesfw said:

Ava ...... I'm not quite sure how to say this and what ever comes out, please don't take it wrong.

I keep thinking about my g-dtr and the royal screwing she accepted with her education.  About 10 years ago she graduated with a BS from university of Phoenix.  It's a for profit school and not the best, and her degree is in child psychology.  She and her BF wanted to live together and she didn't like the class sizes at ASU.  

Think she had around $20K SL when she left and now it's more than $50K with non payment and interest building.  At age 34 she is an unwed mother and ruined for life financially.  She and boyfriend are still living together and run a karaoke bar close to ASU and struggling financially.

What will these potential choices do with people like her? 

Going to be interesting.

You know the answer, or at least I know where this train will likely crash.

For many people in SL debt, one time programs of reducing total amount owed will do little but reduce the total amount owed ... for now. These are people who can't afford the SL debt payments they have now. If they are lucky, that reduction makes it affordable enough they pay it and they continue to be able to pay until they pay the SL off.

What about $50K Opti, what about $50K?
Opti answers - You do math  don't you? Aren't there people out there that $50K doesn't even cover half of the student loan? And I have personal experience with underpaid under FT jobs to know that it is not only possible, but likely even in certain economic times for a person to make $0 in year, or $10K in year, and if they are lucky maybe possibly get near $20K yr. So knowing math ... knowing there are student loans/debt out there for $200K or larger, of course for *some* people that $50K won't change the course of the Titanic.

[haapai]

I think that Option 2, an extension of the current forbearance and zero percent interest rate, is the only viable option and that the odds of it happening are very, very good.  I think that it would be quite popular and relatively easy to effect.  It would provide a lot of hope at a time when our disease stats are pretty much guaranteed to be horrifying and later will give a staggering economy a bit of juice. 

Unfortunately, by the time that new cases, deaths, and hospitalizations come down and the economy begins to recover a bit, we'll be deep in fiscal do-do.  The odds of more permanent relief being granted at a time when states and cities are laying off cops, firefighters, and teachers are pretty much nonexistent. 

As for making changes that will benefit a future generation of borrowers, that's not going to happen during a budget crisis.  The next generation of borrowers will probably land up borrowing more than the current one as states and cities slash their already scant support for secondary education.