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?
Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis.
Sure a lot of blase attitudes abound (not necessarily just here) about paying our bills. Our grandparents would not have "just filed backruptcy" to get out from under debt THEY acquired, not paying for essentials or medical bills, but for luxuries like 4000sq foot mc-mansions, BMWs, all the best and latest technology, mani/pedis etc. Our grandparents did not revolve charge cards for material things they did not need to live and paid their bills when they came due. Somehow, a huge disconnect between generations has occured as far as valuing our money and living in our means, no matter how modest.
People in their 20s want it all and want it NOW, but most of us who are older, knew it would take time to live the lifestyle we imagined. We also are the ones saving for our retirements; I am scared to think how many others are not.
People decry the fact they can't get out from under school debt by declaring bankruptcy. But you see, every time a person files for bankruptcy and succeeds, that means people like me, who pay their bills, now must assume their debt in the form of higher interest rates, taxes, etc.
I have a real problem with that.
I know a lot of people who accumulated 10s of 1000s of dollars revolving charges on STUFF (not essentials) and then simply said, "can't pay for it, gonna declare bankruptcy" and poof it was gone. Then a few years later, amazingly, were able to do it all again, more credit cards and even mortgages. More default. And on and on it goes. We all pay for these habits.
I also blame the banks/lending institutions for allowing interest-only loans on homes (who thought that was a good idea???)----and extending ridiculous amounts of credit to very high-risk customers. STUPID. That went on rampantly til 2008---------and we know what happened then.
And a few years later, now, we should just forgive $$$ millions in school loan debt? At whose expense?
We need to learn from the past and the economic disaster that was 2008-----learn to live within our means again. Another Depression will likely happen in our lifetimes, and all this unpaid debt is just speeding us along.
Just in general saying: Time to pay your own bills and quit thinking it's owed to you to be relieved of them.
On another thread, a poster commented in response to me, essentially stating, "Well you need a cell phone!"
Actually, no you don't. We've grown accustomed to cell phones in addition to many other gadgets. I used only a cheap land line in nursing school to save money, which was the point of that post.
I don't carry a cell phone and I do just fine. I have a really cheap one (pay per call) that I keep in my car for emergencies. Smart phones are not a necessity.
And on the same topic ... kids who need to talk to their parents every hour are too immature to be left at home without a babysitter. They should not be calling their parents every hour at work or in class.
I don't think it's about a cell phone or any individual item in of itself. It's the whole lifestyle/expectations/work ethic etc combined.
I had a horse after graduation, up to 3 of them and all adequately cared for, which was way more costly and luxurious than a cell phone, but I budgeted and limited myself in other ways.
When people talk about cell phones, I shake my head. My working class Depression Era parents paid for me to SHOW horses, they took a second out on their house to do it, and I still graduated young and grew up to be financially responsible. I got off easy giving my kids cell phones.
Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis.
The ONLY reason I have a smart phone is because my husband has to have a cell account for work; much of the cost is actually covered by his place of work. I only get phones when they are "free", never replacing them until needed and paid for. I would still have a flip-phone (or none at all) if it were up to me cause I don't care about technology that much. We are on a family plan that costs little d/t being mostly paid for.
But if I did not have a cheap plan, I would probably have a minutes-only cost per text plan and a really cheap old phone.
I only want what I can afford and need.
And my kids know better than to call or text me every hour, especially at work.
For the people who that it can all be fixed by allowing the debtors to declare bankruptcy ...
If large numbers of student loan debtors declare bankruptcy, it will cause a real hardship for the lending institutions ... who will lose lots of money ... and pass those losses onto society ... just like what happened in the real estate crisis of 2008. That wasn't such a fun time, was it?
Then ... when the banks have to factor in the possibility that the borrowers will have an easy bankruptcy option, they will raise the standards for borrowing. Only people they deem "good risks" will be allowed to take out loans for education -- and millions of students will not be able to get a loan because they won't qualify. The lenders will also be forced to raise the interest rates on loans, to make more profit per loan to cover the losses of those people who don't pay. Again, that won't be pretty.
Schools who serve a lot of those low-income students who rely on loans to go to school won't have many students and many will close -- or at least drop those majors that don't have lots of students. With few students and fewer majors, there will be fewer sections offered of each class and there will be less flexibility in scheduling your classes -- making it harder to work while going to school, etc.
These are just a few of the immediate consequences of simply "allowing people with too much student loan debt to declare bankruptcy" and not pay their loans. Who knows what other long-term consequences would arise.
I think there are some loans that need to be forgiven ... and their needs to be some serious re-design of the system. But simply "allowing people off the hook" because they made stupid choices as young adults and/or because they continue to make irresponsible financial decisions after graduation is not the answer.
These are just a few of the immediate consequences of simply "allowing people with too much student loan debt to declare bankruptcy" and not pay their loans. Who knows what other long-term consequences would arise.
I think there are some loans that need to be forgiven ... and their needs to be some serious re-design of the system. But simply "allowing people off the hook" because they made stupid choices as young adults and/or because they continue to make irresponsible financial decisions after graduation is not the answer.
Yes, yes, a hundred times yes. Some people could say that allowing bankruptcy would force schools to drop their tuition rates to have more enrollment. I don't think so. I forsee it turning into education being out of reach for many, many people and back to only the rich being college educated. That produces a whole other slew of problems.
As for bankruptcy itself, sometimes I get it. Sometimes it infuriates me. I was stupid as a kid and had a boyfriend that maxed out all my credit cards, and opened a few in my name, etc but we couldn't prove it was him because we shared the same dwelling, etc. Identify theft was going to be too hard to prove, I was told. I was also told to file bankruptcy to make it go "bye bye." I refused. I got a second job and paid off every cent he charged out of principle (almost MIGHT have sold a lot of his more expensive stuff and burned the rest, but that's another story. I was not in the right frame of mind at the time). It didn't make my credit any more valuable to a creditor but it meant something to ME. I know I don't get brownie points, but it mattered.
I think the problem is with student loans themselves, not that they can't be discharged. People sue others and end up getting nothing because the person files bankruptcy the next day. That's not right.
Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
I think if people want to get a college education, they shouldn't be punished after w/ payments they can't afford.
Here's the problem: these people willingly chose to obtain a college education, which is not an inalienable right in American society. 70 percent of all adults age 25 and older are without a college degree. If people who borrowed massive student loan dollars do not repay, the government will punish the rest of us who do pay our bills.
I was also a first generation college student from a household with a lower family income than yours, yet I didn't qualify for need-based aid. Actually, I don't know what I would have qualified for because my parents outright refused to provide any information for the FAFSA.
As a high school senior I applied to three regional state universities because I intuitively knew from a very young age that my family of origin had less money than many others. Although I was accepted to the schools, my parents discouraged college because they came of age in the 1970s, a time when a young person could still secure a well-paying entry level job at age 18, so they did not see the need for college.
However, by the time I graduated high school in 1999, the times of good entry-level jobs for young people were long gone. I ended up in the low-paying unskilled work force and, while I missed out on the traditional aged college experience, things fell into place.
I completed a 12-month LVN program in 2005, a 14-month LPN-to-ASN bridge program in 2010 and an online BSN degree in 2015. I have no student loan debt because I paid off each loan before moving on to the next educational venture. I paid for the online BSN with cash.
Those of us who come from low to moderate income backgrounds do not have the luxury of attending schools that cost $40,000+ annually, especially when the school and/or financial aid is not helping to offset any substantial costs. Unless we can find a private university that offers a generous aid package, our best bet is the community college or regional in-state university.
Financial responsibility is not about age. If this thread bashed 40-somethings and 50-somethings for irresponsible spending, it would be shut down in a heartbeat.
Consider the many companies the government has bailed out in the last 10 years. Why shouldn't student loans get the same treatment as GM, AIG, Donald Trump (who has declared bankruptcy twice), and hundreds of banks? All bankruptcies go through the courts, so it's not as of taxpayers would automatically be on the hook. Personally, I would much rather pay for a young person to go to college than to go to war.
One thing I have noticed is that "today's student" takes out too much money in loans, and then uses the extra money to live on. I work with new nurses who bought a new car, have a new house with lots of expensive furniture, and all the latest technological gadgets, but owe a ton of student loan debt. Plus they are resentful that they have to pay this money back. I agree that tuition is ridiculous these days, but it has never been cheap, and most all of us struggled financially as students. I went to nursing school in the 80's at a private college, but "did without" in order to pay tuition, gas, fees, etc. I lived as cheaply as possible, but I still had to pay for childcare, etc., just so I could go to school. My first RN job paid $12 per hour. I would never have dreamed of taking out student loans to support my lifestyle. Even today I drive an old car, do not have the latest gadgets, but my home is paid for, my 100 acres is paid for, and I owe nothing. I am resentful that people want the government to bail them out of their student loan debt, while I do without a lot of things just so that I don't have any debt!
You must live in a low cost of living area to have 100 acres of land. But think of the peace of mind you have knowing you have no debt. Most people are not in that enviable position, but have to juggle debt to go to school and own a home. Only in the last couple years did I manage to build up an emergency fund over $20,000 and I'm 50. I've relied on credit cards to make ends meet from the time I was 18 years old. I'm down to $5,000 credit cards, my house will be paid off before I retire and I'm paying off a car loan from when my 13 year car's transmission died in the middle of winter. I don't think I live a luxurious life, other than a few vacations over the years, but I haven't gone on a real vacation in over five years. Between paying off the mortgage, student loans, credit cards, retirement, home maintenance and now a car payment I'm tapped out! I wish I could bring myself to do overtime it would certainly help, but I find nursing just too stressful.
Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis.
And that, folks is how we do it.
No burden on the student NOR the taxpayer who pays his/her bills.
Here's the problem: these people willingly chose to obtain a college education, which is not an inalienable right in American society. 70 percent of all adults age 25 and older are without a college degree. If people who borrowed massive student loan dollars do not repay, the government will punish the rest of us who do pay our bills.
I was also a first generation college student from a household with a lower family income than yours, yet I didn't qualify for need-based aid. Actually, I don't know what I would have qualified for because my parents outright refused to provide any information for the FAFSA.
As a high school senior I applied to three regional state universities because I intuitively knew from a very young age that my family of origin had less money than many others. Although I was accepted to the schools, my parents discouraged college because they came of age in the 1970s, a time when a young person could still secure a well-paying entry level job at age 18, so they did not see the need for college.
However, by the time I graduated high school in 1999, the times of good entry-level jobs for young people were long gone. I ended up in the low-paying unskilled work force and, while I missed out on the traditional aged college experience, things fell into place.
I completed a 12-month LVN program in 2005, a 14-month LPN-to-ASN bridge program in 2010 and an online BSN degree in 2015. I have no student loan debt because I paid off each loan before moving on to the next educational venture. I paid for the online BSN with cash.
Those of us who come from low to moderate income backgrounds do not have the luxury of attending schools that cost $40,000+ annually, especially when the school and/or financial aid is not helping to offset any substantial costs. Unless we can find a private university that offers a generous aid package, our best bet is the community college or regional in-state university.
Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis.
I did mention how many are not saving for retirement. BUT I have HONESTLY noticed the majority of people wanting forgiveness are in the under-40 bracket. It's not bashing, it is the truth. At least anecdotally. I have not done any studies and have no hard statistics.ALSO I would NOT grant immunity and forgiveness to careless lending institutions or Trump. ALL would have to pay their bills.
But we are not talking about Trump or AIG/banks. We are addressing people who take out loans willingly and then because they want the "good life" want to them go away.
I also agree with the poster who said financial responsibility should be taught in high school, cause if we CAN blame the over-40 crowd for anything, it's NOT teaching our younger generation how to budget, save and borrow. We are not blameless.
They are getting a rude wake-up call in the real world that may not have had to come if we, their parents, did a better job teaching them these things.
Financial responsibility is not about age. If this thread bashed 40-somethings and 50-somethings for irresponsible spending, it would be shut down in a heartbeat.
Consider the many companies the government has bailed out in the last 10 years. Why shouldn't student loans get the same treatment as GM, AIG, Donald Trump (who has declared bankruptcy twice), and hundreds of banks? All bankruptcies go through the courts, so it's not as of taxpayers would automatically be on the hook. Personally, I would much rather pay for a young person to go to college than to go to war.
I have a somewhat different perspective. I went into a 4 year program right after high school, and being that young, I had no debt. I lived with my parents for the first 3 years and still had no debt. I got married at the beginning of my 4th year and he had debt but good credit, and I still had no debt. I took quite a bit of the money that we got for wedding gifts and started paying my student loans, then I graduated and took monetary grad gifts to make more payments, and we bought a house.
If I did not have student loans that I was already paying (before they were due), I would have had a zero credit rating and never been able to qualify for a mortgage. So while I agree it's not great to be 20k in debt when just starting out, my student loans allowed me to stop paying rent and become a homeowner, therefore I am grateful!
SmilingBluEyes
20,964 Posts
Sure a lot of blase attitudes abound (not necessarily just here) about paying our bills. Our grandparents would not have "just filed backruptcy" to get out from under debt THEY acquired, not paying for essentials or medical bills, but for luxuries like 4000sq foot mc-mansions, BMWs, all the best and latest technology, mani/pedis etc. Our grandparents did not revolve charge cards for material things they did not need to live and paid their bills when they came due. Somehow, a huge disconnect between generations has occured as far as valuing our money and living in our means, no matter how modest.
People in their 20s want it all and want it NOW, but most of us who are older, knew it would take time to live the lifestyle we imagined. We also are the ones saving for our retirements; I am scared to think how many others are not.
People decry the fact they can't get out from under school debt by declaring bankruptcy. But you see, every time a person files for bankruptcy and succeeds, that means people like me, who pay their bills, now must assume their debt in the form of higher interest rates, taxes, etc.
I have a real problem with that.
I know a lot of people who accumulated 10s of 1000s of dollars revolving charges on STUFF (not essentials) and then simply said, "can't pay for it, gonna declare bankruptcy" and poof it was gone. Then a few years later, amazingly, were able to do it all again, more credit cards and even mortgages. More default. And on and on it goes. We all pay for these habits.
I also blame the banks/lending institutions for allowing interest-only loans on homes (who thought that was a good idea???)----and extending ridiculous amounts of credit to very high-risk customers. STUPID. That went on rampantly til 2008---------and we know what happened then.
And a few years later, now, we should just forgive $$$ millions in school loan debt? At whose expense?
We need to learn from the past and the economic disaster that was 2008-----learn to live within our means again. Another Depression will likely happen in our lifetimes, and all this unpaid debt is just speeding us along.
Just in general saying: Time to pay your own bills and quit thinking it's owed to you to be relieved of them.
We need to be responsible again.