I completely get the impossibility of paying off 200K for an expensive non marketable degree and not being able to find a job, but I'm not fully understanding the issue with paying off a moderate loan when hired after graduation.
Comparing it to my loan, I graduated with $9,500 in debt and was hired at $10.50/hr. That creeped up of course but I initially made less than 25K/year. Compared to 104K now, that was very little income.
I was the sole earner, paid my rent, had a new but modest car, paid for my two kids (didn't even have maternity benefits on the first (the health insurance industry has never been a bed of roses), had a couple of horses and still paid off my loans in 10 years.
What I don't get is the primary reason why that doesn't work the same for anyone that graduates with student debt that is roughly half of their annual income these days.
I'm sure interest plays a part, but what else?
Do people just resent having to pay them back? They're cramping the new lifestyle norm?
Some areas will not allow people to default on student loans anymore because many people had the same idea and stopped paying. Where I live, student loans will follow the borrower until the very end. Bankruptcy is not an option.
I attended a state school in California from 2001-2003. Before that I did my freshman and sophomore years at a California community college. Tuition at the community college was $12 a unit. Yes, you read that right -- $12 a unit! Tuition at the CSU was $1428 a year. Maybe $2000 once all the fees were added in. Needless to say, I didn't graduate with crippling debt.
Fast-forward to 2015. Tuition at a California community college is now $46 per unit. Still a deal, but roughly 380% more than I paid just 15 years ago. Tuition and fees for 2015 at my alma mater is $7,276 -- just over 500% more than I paid 15 years ago!
To really drive my point home, just for fun let's pretend I hadn't gone to a junior college those first two years. Let's say I went to the state school instead. After four years I would have graduated with $5712 in debt from tuition and fees.
Fast forward 15 years later, and a student attending the same school would graduate with $29048 in debt from tuition and fees. Even considering 15 years of inflation, this is a MASSIVE increase in the cost of education! $5712 vs $29048! Over 500% increase in only 15 years! You had better believe that I thank G*d every day that I was lucky enough to attend a state school at a time when budgets hadn't been slashed to the bone. I pray for the kids attending these days, and I live in fear of what things will be like when my daughter is ready to go, 16 years from now.
So please, can we stop dumping on "kids these days with their expensive tastes and gimmie attitudes" and acknowledge the fact that we had it pretty &%@# good? And that we should want the same for future generations?
The problem with this line of argument is that the cost of providing the education has also skyrocketed. Every school is expected to have the newest computers, test prep programs, simulation labs, cafes, uniforms... I think the rise in cost can be partially, if not largely, attributed to more expensive tastes. It may not be that every student is given a free iPhone, but if a school doesn't drop six figures on creating a state-of-the-art simulation lab and all the other bells and whistles, then it won't be able to attract any enrollment.
That being said, it also reflects the expensive tastes of the older generation who expect the escalating cold war of salaries and benefits but refuse to vote for legislators or bond initiatives that will fund the increases in education costs.
It is greed, but it isn't quite entirely the younger generation's fault.
Some areas will not allow people to default on student loans anymore because many people had the same idea and stopped paying. Where I live, student loans will follow the borrower until the very end. Bankruptcy is not an option.
Yeah, except they are now going after the parents of students who die to get out of their student loans. So, grieving parents who just lost someone loved to cancer or a drunk driver now have to come up with 5-6 figures just to be able to move on with their lives.
Yeah, except they are now going after the parents of students who die to get out of their student loans. So, grieving parents who just lost someone loved to cancer or a drunk driver now have to come up with 5-6 figures just to be able to move on with their lives.
Gosh, I never thought of that possibility. I suppose if the parent cosigned the loan they would be responsible for paying it back. How horrible!
It's horrible thing to think about, especially for a young person. That's why it's so important to have enough life insurance to cover your debt, so you're loved ones aren't left holding the bag. For a young, healthy adult its a pretty cheap investment.
I think before they go after disabled or dead defaulters, the lending practices need to be regulated.
Are the high schools warning about this, really explaining the irreversible possibilities? I'm not sure what our schools do in this regard.
An aside, my 21 yr old daughter is in a pretty serious dating relationship with a young man graduating from UCLA this spring, I did ask her if he had heavy student loans. I figured his parents had him covered considering his private schooling et al but I would actually hate to see her take on major debt, especially after we have been going the slow economical route ourselves due to modest income and paying OOP. In other words, he's a lovely boy but the prestigious degree he's about to obtain would be a negative IME if it came with 100K+ in loans attached, and with more schooling to go. This will sound mean but lathe student loans are like the anti dowry.
I don't make her decisions obviously but I do inform my kids of some realities they might not otherwise have considered. I was proud that she had already inquired, she's a smart and practical young woman.
Got ridiculous student loans? Move somewhere where there are no reciprocal agreements with where you are currently and don't pay them.
This is nonsense, unless you are suggesting expatriating to another country. Student loans (unless a strictly private loan from a financial institution) are administered by the state educational assistance agencies in all 50 states, and backed by the U.S. Dept of Education. In other words, after some period of time, your defaulted student loan will become an unpaid debt to the U.S. federal government and like other federal obligations (i.e. unpaid federal taxes), cannot be discharged through declaration of bankruptcy or "hiding". Wages will be garnished, property seized, and/or federal benefits such as social security reduced, until the debt is satisfied.
Specializes in CCU, SICU, CVSICU, Precepting & Teaching.
Yeah, except they are now going after the parents of students who die to get out of their student loans. So, grieving parents who just lost someone loved to cancer or a drunk driver now have to come up with 5-6 figures just to be able to move on with their lives.
I'd love to hear from some recent grads who are living the situation rather than a lot of speculation about other people's motives and habits. So glad so many of you have escaped the debt trap.
I was young and stupid, went to an expensive college for a year before I realized I couldn't afford it. Got a BS in biology because nursing schools were insanely competitive (I'm in MA. Had a 3.9 with all prerequisites for nursing done). Then finally did an Accelerated BSN. I was in survival mode and took loans to get myself through the two degrees. Always took extra so I could buy groceries. Now I'm sitting with around ~70k in loans and a $900/month bill. Yeah, it sucks. But I was young and stupid, didn't look into all my options, took out high interest rate loans, etc. At the end of it all I got to where I wanted to be and paired with my husband we make a good living. I think of my loan debt as a brand new luxury vehicle. Except what I got for the 70k will never depreciate :)
This is nonsense, unless you are suggesting expatriating to another country. Student loans (unless a strictly private loan from a financial institution) are administered by the state educational assistance agencies in all 50 states, and backed by the U.S. Dept of Education. In other words, after some period of time, your defaulted student loan will become an unpaid debt to the U.S. federal government and like other federal obligations (i.e. unpaid federal taxes), cannot be discharged through declaration of bankruptcy or "hiding". Wages will be garnished, property seized, and/or federal benefits such as social security reduced, until the debt is satisfied.
Don't let noadls get under your skin. This poster is a known troll who stirs people up intentionally. I apologize for the "troll" TOS violation, but being as noadls is admittedly proud of their trolling, I'm fairly certain this one might be okay???
NOADLS
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Got ridiculous student loans? Move somewhere where there are no reciprocal agreements with where you are currently and don't pay them.