The Incredible, Rage-Inducing Inside Story of America’s Student Debt Machine (1 Viewer)

[RetroMcBananaFace]

The incredible, rage-inducing inside story of America's student debt machine

If this is deemed too political obviously feel free to move to that other board but I think the political machinations take a backseat in importance to the real-life impact on real individuals.

 

[Saint_Ward]

Obviously the focus on the article is the companies that service the debt and some congressional actions/inactions.

It sure doesn't get into the rising cost of tuition, what people are using their loans for, etc...

My wife is getting her masters for $11k. (granted, no room and board). Why are people spending over $100k?

 

[RetroMcBananaFace]

I would imagine the room and board bit is a pretty huge chunk.

I borrowed $30K even though I was working full-time, I just didn't make enough to live. Looking back now, I definitely have regrets on how I "wasted" some of it on things like cable and a washer/dryer, when I could've just watched broadcast TV and gone to the laundromat. But that's the hindsight of years and wisdom that the typical college student doesn't have.

The bigger problem that's alluded to in the story is not how much they borrowed but how the penalties and interest add up, and how the jobs people get aren't paying enough to allow them to make the scheduled payments. If you borrowed $70K and have paid back $50K, you shouldn't still owe $70K. That's just crazy to me.

On a semi-related note I just read where UL-L is charging $1000 for a textbook. An online textbook. Yikes.

 

[SigFreudianSlip]

It’s ridiculous. A definite problem.
My bio dad got his Masters for free at an all black college. Minority scholarship. The GI bill paid for his undergrad at USC.

Unless you get an academic or athletic scholarship or (other) it is incredible the debts students incur. My wife and I are paying for 2 of our 4 kids student debt now. One of the other 2 kids got a full ride academically and the 4th is not yet in college. I hope people can get this figured out.

 

[RetroMcBananaFace]

Start your kids a college fund, like a 529. Instead of an abundance of toys and crap they don't need for Christmas and birthdays ask friends and relatives to put in their $20 or whatever into that. Put half your tax return into it. etc. It adds up fast. My oldest is 7 and we already have $20K in his. They will still have all the toys and crap they can handle trust me.

My folks farted around and wasted money all their lives on stupid stuff and when I wanted to go to college I had to do it all by myself. I'm not letting that happen to my kids.

 

[guidomerkinsrules]

It sure doesn't get into the rising cost of tuition, what people are using their loans for, etc...

they work hand in glove - -once universities saw the sums available tuition went up
BUT
a huge part of tuition goes to inflated admin salaries and buildings (student amenities)

 

[gboudx]

We're at this point with our oldest. He just started college, but he's attending Collin College, which is a community college for the most part. He started with 3 classes and the out-of-county cost was $871. The traditional 5 classes for full-time would be about 1,200. In the meantime, he's working and saving money. We have $11k already saved for him, so hopefully when he's ready to start on the Bachelor's degree, there will be enough to cover without any loans. He doesn't want them, and neither do we.

 

[Surviving Saint]

My oldest is 7 and we already have $20K in his.

What if he doesnt want to go to college? I know Im not encouraging my son to go. I will encourage him to get a skilled trade as a plumber, HVAC, or electrician etc. and open his own business.

 

[RetroMcBananaFace]

What if he doesnt want to go to college? I know Im not encouraging my son to go. I will encourage him to get a skilled trade as a plumber, HVAC, or electrician etc. and open his own business.

Then he can use the money to buy a car, or furnish his first apartment, or whatever the hell he wants to do with it. I think it's a 10% penalty. Important to note it can also be used for trade and vocational schools so if the kid wants to be an electrician or whatever, that falls into the accepted post-secondary options.

I would not discourage college as an option if I were you. You can't force your worldviews on your kids - they will likely end up resenting you for it and going the opposite direction anyway. That's what teenagers do.

 

[Surviving Saint]

I would not discourage college as an option if I were you.

$60k+ in debt instead of getting an apprenticeship making good money with no debt. Sounds like a no brainer. I mean if he wants to get a job where he starts at $100k+, Im all for college but if he just wants some BS degree,I will tell him its a complete waste of time and money. Get in a field that isnt saturated (like the ones I mentioned)and he can make more money than most people with a college degree.

College has become a money racket.

 

[SigFreudianSlip]

$60k+ in debt instead of getting an apprenticeship making good money with no debt. Sounds like a no brainer. I mean if he wants to get a job where he starts at $100k+, Im all for college but if he just wants some BS degree,I will tell him its a complete waste of time and money. Get in a field that isnt saturated (like the ones I mentioned)and he can make more money than most people with a college degree.

College has become a money racket.

Totally get this point. My wife and I haven’t been and we do very well. With no student debt other than our kids. Lol.

I’ll be going but just for fun. I’ll also pay as I go.

 

[Surviving Saint]

You can't force your worldviews on your kids - they will likely end up resenting you for it and going the opposite direction anyway. That's what teenagers do.

Its not a world view, its reality. They need to know it.

 

[SigFreudianSlip]

Its not a world view, its reality. They need to know it.

It can certainly be done either way. Both views have merit. One just comes without the built in debt. And I’d imagine it’s tougher to reach 6 figure salaries without the degree than with the degree, but my wife and I are living proof that it can be done. I agree wholeheartedly with you Surviving Saint on the electrician take as I know a few masters and they make bank.

 

[Poppy]

$60k+ in debt instead of getting an apprenticeship making good money with no debt. Sounds like a no brainer. I mean if he wants to get a job where he starts at $100k+, Im all for college but if he just wants some BS degree,I will tell him its a complete waste of time and money. Get in a field that isnt saturated (like the ones I mentioned)and he can make more money than most people with a college degree.

College has become a money racket.

I agree totally. Colleges are raising tuition for one simple reason. The individual is not actually paying, and they know it. They know the gov't will hand out the money. And Bernie Sanders wants free tuition. Yeah, ok.

 

[RetroMcBananaFace]

Its not a world view, its reality. They need to know it.

Whatever you want to call it - they are likely going to lean the exact opposite direction of your influence. LOL. That's also just reality, I wasn't attempting to place a "right" or "wrong" on it.

I agree totally. Colleges are raising tuition for one simple reason. The individual is not actually paying, and they know it. They know the gov't will hand out the money. And Bernie Sanders wants free tuition. Yeah, ok.

But the individuals are paying, that's the point of this story. Sure, they might not be paying right at the moment, but they are paying, and because of all the penalties and such for missing payments, they're paying well more than they borrowed. I'm not sure what my total will be in the end but I borrowed $30K and I'm guessing it'll end up being closer to $35K by the time it's all paid (I'm not griping, my personal situation is very manageable, but I'm luckier than a lot of people)

It's more or less a predatory lending practice considering the target audience are an age group that largely speaking hasn't yet learned financial wisdom. Other countries teach kids about personal finance in high school, we don't.