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US Student Loans Exceed $1 Trillion

timothy posted more than 2 years ago | from the incentives-and-disincentives dept.

Education 917

sycodon writes "Politico reports that student loan debt now exceeds one trillion dollars, an amount that should impress even Dr. Evil. Politico further reports that this is one of the more concrete issues driving the OWS protests and provides some enlightening examples of their particular gripes."

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917 comments

You think the housing collapse was bad (5, Interesting)

elrous0 (869638) | more than 2 years ago | (#37773424)

Just wait until you see what happens if THIS group starts going en masse into default. At least with houses, there is some collateral there. What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job? You going to foreclose on and resell his worthless degree?

And, sadly, this is only going to get worse. Tuition has been going through the roof at universities in the U.S., even as wages for the jobs post-grads get afterwards have remained stagnant. The wages of parents and post-grads have stayed the same, but they're having to fork out more and more for tuition--driving them to even more debt. So it's hardly surprising to find out that student loan debt has increased over 63% in just ten years.

So what do you think the end result is if this trend continues? Either large segments of the population are going to have to give up on college or they're going to have to put themselves in a position where default is almost an inevitability. I guess that could actually have one positive effect. It could finally dispel the idea that everyone can or should go to college (or that a college degree should be considered a prerequisite for any white collar job).

And, BTW, you know who pays when someone defaults? The U.S. government foots the bill, since these loans are federally guaranteed. So Uncle Sam gets to fund the bailout on that one too, just like he did with the banks and domestic car industry.

Re:You think the housing collapse was bad (1)

siddesu (698447) | more than 2 years ago | (#37773468)

What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job? You going to foreclose on and resell his worthless degree?

The Greeks had temporary slavery for debts before S&P lowered their ratings.

Re:You think the housing collapse was bad (1)

ZeroExistenZ (721849) | more than 2 years ago | (#37773514)

I would like to order a dosen of your finest Original American (tm) slaves please or ONE virgin American (tm) slave.

Re:You think the housing collapse was bad (1)

siddesu (698447) | more than 2 years ago | (#37773618)

Sure thing, we will ship immediately after your payment clears. Our account 129417 is with Zimbabwe Banking Corp/Bulawayo, SWIFT ZBCOZWHXBYO. $750 per slave, $2785 for the virgin. Do you have any preference for the gender? If not, we will ship all male.

Re:You think the housing collapse was bad (1)

Oxford_Comma_Lover (1679530) | more than 2 years ago | (#37773826)

FYI, those numbers actually sound high for slaves from Zimbabwe. (Well, maybe not with shipping, if you are ordering them from someone at the source rather than buying them after they've been trafficked.)

The student loan problem is massive, but of course is not nearly as bad as actual slavery, which is fairly common today. See River of Innocents [amazon.com] , for example. Or google the Polaris Project.

Re:You think the housing collapse was bad (0)

Anonymous Coward | more than 2 years ago | (#37773568)

Just because someone can't find a job doesn't mean that their education is worthless. What it does mean is that they can't find a job specifically tailored for someone with their type of educational background and it also implies that some changes need to be made to the entire education system here in the U.S.

Worthless or not, however, I do believe that it's not proportional to the economic climate. This is the biggest issue that needs to be dealt with, in my opinion. I'm also not in favor of mandatory tenure. I think the bar needs to be raised here... Too many lazy idiots in their comfy seats and little actual knowledge / experience to make the situation worth their pay! I've had FAR TOO MANY worthless instructors in my CS / IT classes who could do nothing on a keyboard but tell you everything you could ever wish to know about the damn theory.

The rationalization of theory over practice is a dying manipulation. This is one of the few things we have to be happy about in this rough road.

Re:You think the housing collapse was bad (0)

Anonymous Coward | more than 2 years ago | (#37773864)

Heh... Indentured Servitude. That'd go over real well in this country in this day and age- and if you did it to the black population, whooo....

That's not to say that this shouldn't be done if it's something like a Student Loan they're defaulting on, though.

Re:You think the housing collapse was bad (0)

stoolpigeon (454276) | more than 2 years ago | (#37773492)

Too many people go to college so it will be good if that get's adjusted. I met someone a number of years back that held over $40,000 in debt - that she accrued earning a masters degree in social work. When I met her she was in a program that cost $20,000 to earn a teaching certificate that would allow her to teach elementary school. She viewed the student loan program as a way to live and accepted that the debt would "always be there."

With that kind of thinking, someone else needs to stop these kinds of people. They wont stop themselves. She should never been able to get those loans in the first place.

Re:You think the housing collapse was bad (3, Insightful)

imric (6240) | more than 2 years ago | (#37773852)

Nah supply and demand is broken. When you need a degree to get a job, and you need a job to live, then the demand side skyrockets.

"With that kind of thinking, someone else needs to stop these kinds of people. They wont stop themselves. She should never been able to get those loans in the first place"

Ah. So that she would most likely not have any chance to rise above the poverty line. Check. That'll fix the economy! When there is no discretionary pay left after food and shelter, it doesn't matter how cheap things get when imported from other economies after all - the market for anything is essentially zero.

Get rid of the social stigma attached to being non-degreed, get rid of the bogus requirement to have a degree, any degree, in order to 'succeed' (heh - and THAT's defining success as 'marginally above the poverty line and insured so that medical expenses are less likely to bankrupt you'), and we'll talk.

Until then this will continue.

Re:You think the housing collapse was bad (1, Interesting)

yog (19073) | more than 2 years ago | (#37773498)

Maybe Little Johnny shouldn't borrow $100,000 if he doesn't have a reasonable plan for a career after graduation.

It's possible to get by with work-study, part time jobs, summer jobs, and maybe even waiting a year or two before going to university, to try to work, think about what you'd like to do, come up with a plan.

The average 17-year-olds applying to college don't really know what they're going to do afterwards. If it's a down economy, maybe they should be thinking practical instead of borrowing up to the hilt and then hoping for the best afterward.

It's hard to feel a lot of sympathy. As for defaulting, currently the rules are pretty strict; you can't get out of your student loans, but you can defer payment until you are employed again. It's maybe not the ideal system but it does assume a lot of personal responsibility, maybe an assumption that we need to rethink.

Another question to ask is, why does a college education cost so much to begin with? Why has tuition increased so much faster than inflation, year after year? Maybe a smart alternative would be to take advantage of the enormous resources available online, such as MIT's online courseware and the thousands of other course curricula. A resourceful person could do the equivalent of a college education for just the cost of an internet connection (or at the library for free).

Re:You think the housing collapse was bad (5, Insightful)

elrous0 (869638) | more than 2 years ago | (#37773586)

A resourceful person could do the equivalent of a college education for just the cost of an internet connection (or at the library for free).

That's true. But when's the last time you saw "4-year degree or equivalent do-it-yourself degree" listed as a job prerequisite for a white collar job?

Re:You think the housing collapse was bad (1)

siddesu (698447) | more than 2 years ago | (#37773666)

Actually, I see a lot of "XXX degree or equivalent experience" in job descriptions. But then, I rarely look at American jobs these days.

Re:You think the housing collapse was bad (1)

Anonymous Coward | more than 2 years ago | (#37773746)

"equivalent experience" almost always means professional experience. Doesn't help recent graduates, unless they managed to get lots of internships.

Re:You think the housing collapse was bad (1)

siddesu (698447) | more than 2 years ago | (#37773786)

We were discussing people with "DIY" degrees, not recent graduates.

Re:You think the housing collapse was bad (5, Informative)

scubamage (727538) | more than 2 years ago | (#37773594)

No, its not possible these days on average. The average public university costs close to 11034 a year according to the census. The average minimum wage is 7.35. That comes out to a 35 hour workweek alongside being a fulltime student (1823 hours). This is only public schools - NOT private schools. Not to mention prices for everything have gone up steeply. If they're trying to put themselves through school, its almost impossible to avoid debt. Baby boomers don't quite seem to understand the math, so here it is: A dose of Financial Reality [thesimpledollar.com] .

Re:You think the housing collapse was bad (0)

Anonymous Coward | more than 2 years ago | (#37773720)

Yes it's possible. I'm pretty average and I worked my way through school.

Re:You think the housing collapse was bad (2)

scubamage (727538) | more than 2 years ago | (#37773816)

It depends on your state - those tuition numbers are based on the national average, I don't think NCES breaks it down by state, and I think it depends very heavily on where you live. In Texas it costs roughly triple the national average (according to the folks who I know who went there on the GI bill). Source: http://nces.ed.gov/programs/digest/d07/tables/dt07_320.asp [ed.gov]

Re:You think the housing collapse was bad (3)

said213 (72685) | more than 2 years ago | (#37773608)

"Maybe Little Johnny shouldn't borrow $100,000 if he doesn't have a reasonable plan for a career after graduation."

If you pretend to have had plans for your career after graduation before beginning college studies, you are a lying cb.
Step off the high horse and check for some perspective.

Re:You think the housing collapse was bad (1)

imric (6240) | more than 2 years ago | (#37773694)

No, it's not possible. Where ARE these mythical 'jobs' you speak of? Last I heard, job seekers outnumber the jobs available.

Re:You think the housing collapse was bad (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37773862)

Maybe your expectations of Little Johnny are completely unrealistic? You expect the AVERAGE kid who gets told by parents, administrators, advisors, newspapers, etc that college is the way to go and to 'follow their dreams'. And given that the same average kid is often coddled and has little life experience... you want them to sort through this, pick the right degree (magically have aptitude for that career path) and also in the mean time delay school (while hearing messages like 'if you wait you will never end up going').

That is just a silly expectation. The kids have no experience to sort through the stream of BS thrown at them and the way they GET experience is to go get a few jobs. And what do those jobs entail? Working retail or McDonalds and being told to get a 'real job' they have to go get a degree, ANY degree.

And now we are back to square one.

Even if kids WERE that competent... what would they pick for a major? Assuming you are good at math (lol) then you MIGHT pick engineering, IT, or CS. But then if they are smart they ALSO see all the news stories about how those jobs are being constantly outsourced. Perhaps they look at the cost of education and possible income.... Real Estate and Finance come to mind as good career choices... or would have been 4 years ago. So they go to school, come out and.... OH WAIT. Predicting the future is hard. Current earnings and job openings DO NOT necessarily predict future earnings and job openings.

And you expect 16-18yo kids to figure this out when OUR ENTIRE GOVERNMENT CAN'T??

I feel sorry for the kids. I don't have a holier than thou attitude and expectations that are completely unrealistic and inane.

Re:You think the housing collapse was bad (5, Insightful)

scubamage (727538) | more than 2 years ago | (#37773520)

Since 1970, minimum wage has on average gone up about 300%. College tuition has gone up 994% (from 1200 a year at a public university to shy of 12000 a year). The cost of purchasing a home has gone up over 900% as well. Let's also not forget that every dollar is worth less, and when factoring in inflation and the consumer price index, minimum wage earners are making a good deal less than they did in 1970. Factor in that in the same timespan uneducated labor jobs have dropped by close to 70% in the US. So, people have no choice but to go to college, even the people who really shouldn't go, lest they live in poverty. They get no scholarships because they "just barely" managed to get in. They get a degree, and then can't find work. Working your way through school is now impossible with a minimum wage job, since, you're looking at 35 hours a week at minimum wage to be able to afford only tuition - that doesn't include books or board. In 1970, people were looking at 14 hours a week to be able to pay for school. This math also points out that its idiotic when baby boomers say, "people should work through college, that's what I did" because times are completely different. And as parent said, things are only going to get worse.

Re:You think the housing collapse was bad (1)

Dyinobal (1427207) | more than 2 years ago | (#37773596)

thanks for that, I should put that down on my phone or something. So much older folks I know talk about how they worked through college. It's just not possible to do that now.

Re:You think the housing collapse was bad (0)

Anonymous Coward | more than 2 years ago | (#37773758)

$12,000 a year? Where did you get that? The US average for a two semester year is over $30,000 per year and rising fast. As you say, there is no way a student can work through paying that, it's above the national average wage, and no one is going to hand out jobs paying that much for part time odd hour jobs to young people in college.

These people are graduating with a debt the size of a mortgage over their heads today. Think the housing market is bad now, just wait until these are expected to get on the property ladder. We're going to have a society of "kids" living at home in their 30s.

Re:You think the housing collapse was bad (2)

scubamage (727538) | more than 2 years ago | (#37773850)

This is only public universities for a 4 year degree. Here is the source document from NCES:http://nces.ed.gov/programs/digest/d07/tables/dt07_320.asp. Keep in mind since they're public universities, you have states which allow "in state residents" a free ride like North Carolina and Georgia scewing the results as the lowest number is taken.

Re:You think the housing collapse was bad (3, Insightful)

dintech (998802) | more than 2 years ago | (#37773790)

There has been a 50% population increase in the US since 1970 and there aren't 50% more good universities, good jobs and houses. Supply and demand is doubly destructive. More cheap labour means wages don't have to rise as fast. Increase population means higher demands on available housing, pushing up prices and cost of living generally. Universities aren't immune to charging more for their product either. We now also have more women in work than in 1970, increasing competition in the job market.

This doesn't account for 900% but accounts for some of it maybe.

Re:You think the housing collapse was bad (3, Informative)

uigrad_2000 (398500) | more than 2 years ago | (#37773802)

Working your way through school is now impossible with a minimum wage job, since, you're looking at 35 hours a week at minimum wage to be able to afford only tuition - that doesn't include books or board.

After my freshman year of college, which was stupidly at a private college, I took a year off, and worked 65 hours a week at 3 jobs (paper routes in the morning, lab rat stuff during the day, package handling 2nd shift). I paid down as much as I could in a year, and then went back to school.

It's hard, but not impossible to pay your way through school today. It's not as fun as the lives of most college students, but it can certainly be done.

Re:You think the housing collapse was bad (3, Insightful)

Anonymous Coward | more than 2 years ago | (#37773538)

When it comes to greed, the Universities make the Wall Street banksters look like Buddhist monks in comparison.

Re:You think the housing collapse was bad (1)

Joce640k (829181) | more than 2 years ago | (#37773644)

It's not just the director's salary...somebody, somewhere has taken the decision that students will die if they don't all have individual rooms with plasma TVs, 100Mb Internet connections, etc., plus en-suite sports facilities to rival those of many professional teams.

Re:You think the housing collapse was bad (1)

nedlohs (1335013) | more than 2 years ago | (#37773544)

When large segments give up on college the prices will go down. They can only be as high as they are because people are willing to borrow (and others to lend) large amounts of money to pay for them.

And while these loans defaulting would be painful, it's not a big deal to the economy - the government just prints some money and bails out the banks. That there is no collateral stops the knock effects. There's no "college degrees go down in value and so more people are underwater on their student loans", since everyone is underwater in the first place (there's no collareral as you mentioned). And you don't have huge amounts of people who took out student loans at teaser rates with the plan to refinance before the rate hike because the degree had gone up in value.

Though congrats to America for coming up with just about the worst possible way to finance an education system.

Re:You think the housing collapse was bad (2)

Sprouticus (1503545) | more than 2 years ago | (#37773556)

you cant just walk away from a student loan like you can a house.

You have to declare bankrupcy & be able to show 'undue hardship'.

This of course turns the students into indentured servants to the banks or government, but let's not worry about the young. After all, we all know it is the baby boomers who really matter

Re:You think the housing collapse was bad (2)

luis_a_espinal (1810296) | more than 2 years ago | (#37773650)

you cant just walk away from a student loan like you can a house.

You have to declare bankrupcy & be able to show 'undue hardship'.

This of course turns the students into indentured servants to the banks or government, but let's not worry about the young. After all, we all know it is the baby boomers who really matter

Err... bankruptcy does not eliminates one's student loan debts. You can't bankrupt your way out of it, even if you prove 'undue hardship' (as it is typically understood). The only way to get out is if - God forbids - you get permanently disabled or some other horrific event of that magnitude.

Re:You think the housing collapse was bad (4, Interesting)

EllisDees (268037) | more than 2 years ago | (#37773716)

>You have to declare bankrupcy & be able to show 'undue hardship'.

Nope, student loans aren't even dischargable in bankruptcy. You are stuck with them for life.

Re:You think the housing collapse was bad (1)

Bardwick (696376) | more than 2 years ago | (#37773754)

Torn on this. I mean, they actually went and signed up to be indentured servants. It's not like student loans are a requirement for citizenship.

Re:You think the housing collapse was bad (5, Informative)

JBMcB (73720) | more than 2 years ago | (#37773560)

You can't default on student loans, they never go away. The fed will garnish your wages forever until they are paid off.

Re:You think the housing collapse was bad (2)

elrous0 (869638) | more than 2 years ago | (#37773732)

You can't DISMISS student loans (through bankruptcy). You can MOST DEFINITELY default on them. And how are you going to garnish wages if someone is unemployed (or even severely underemployed)?

as with real state, personal responsibility... (2)

luis_a_espinal (1810296) | more than 2 years ago | (#37773584)

Just wait until you see what happens if THIS group starts going en masse into default. At least with houses, there is some collateral there. What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job? You going to foreclose on and resell his worthless degree?

With that said (and something that should be said more often), even with rising costs in education, one should only get over $60K in student loans if you get a degree in medicine or law or STEM degree (in particular from a private university.) If you have $40K or more in student loans with only a B.A. degree in History from a public university, there is something fundamentally fucked up with you - that Mac laptop wasn't something you really, really needed, for example. Or you really, really, really didn't need to go to a university in another state (and rack up dorm expenses) when a suitable university was closer by and you could have stayed with your parents. And so on and so on.

Personal responsibility is something not being considered, with the assumption that all expenses covered by student loans are/were legitimate educational expenses.

Just as with the real state bubble, there is also a lot of personal responsibility lying out there when it comes to student loans. The current situation is untenable, and there needs to be a solution. What a solution might look like? I don't know. But whatever shape a solution takes, I sure hope that it does not involve extrication of an individual's financial responsibility.

Re:as with real state, personal responsibility... (5, Interesting)

scubamage (727538) | more than 2 years ago | (#37773738)

Coming from your background, that's fine. Here's my story: my dad worked at Merck, and was earning well over 100k a year. I was told that my student loans wouldn't be a worry, and thanks to being a mediocre student in high school combined with his earnings, I didn't get much financial aide (not for want of talant, but because I was frequently sick and missed a lot of school). My parents wanted me to go to a highly ranked local private college for my CS degree. I didn't want to go, but they refused to sign my financial aide papers (FAFSA) if I didn't go where they wanted. I applied early admission, which barrs me from applying elsewhere. A quarter way through my junior year, my father has a series of heart attacks, is diagnosed with cancer and lyme disease. My mother is diagnosed with uterine cancer. Neither one lasted long. All of their money? Gone in an instant from medical bills. His pension? Merck decided to fire him after due to frequent illness thanks to the cancer, so it was lost. My situation? Newly graduated with over $100,000 in student debt thanks to interest rates peaking at 8%. Now, this is all my fault, I knew that money was racking up, but honestly it never clicked. Pair that with an utter lack of money management skills being taught in my school or by my parents, and it was a recipe for disaster. It was something I never knew I needed to know, or even thought to learn about it. Not everyone has something "seriously wrong with them" and that sort of world view will get you branded as shallow and ignorant. Some people honestly get screwed by student loans.

Re:You think the housing collapse was bad (1)

shadowsurfr1 (746027) | more than 2 years ago | (#37773592)

What's happening is a bubble, it's as simple as that. Looking at the costs of school now, I'm glad that I'm almost out of it. Yes, I'll have loans to pay for years but I also got a job to pay them off, thankfully. Some aren't nearly as lucky as I was, though, and they're moving back in with their parents if they can. Imagine the fun we're going to have when that bubble bursts, though, and people stop going to college because the cost is so unsustainable. Some will get a better education by actually learning more, others will be in a much worse spot. Even for those who have the money, it's not worth it. Would you pay for 4 years at a school that's going to cost you 50% or more as much per year as you're going to make when you get out of it? Probably not.

Re:You think the housing collapse was bad (1)

CaptSlaq (1491233) | more than 2 years ago | (#37773692)

What's happening is a bubble, it's as simple as that. Looking at the costs of school now, I'm glad that I'm almost out of it. Yes, I'll have loans to pay for years but I also got a job to pay them off, thankfully. Some aren't nearly as lucky as I was, though, and they're moving back in with their parents if they can. Imagine the fun we're going to have when that bubble bursts, though, and people stop going to college because the cost is so unsustainable. Some will get a better education by actually learning more, others will be in a much worse spot. Even for those who have the money, it's not worth it. Would you pay for 4 years at a school that's going to cost you 50% or more as much per year as you're going to make when you get out of it? Probably not.

Luck is being prepared when opportunity presents itself. Many people aren't willing to put in the work to be sufficiently prepared. Don't sell yourself short by saying "I was lucky".

Re:You think the housing collapse was bad (4, Informative)

shadowsurfr1 (746027) | more than 2 years ago | (#37773764)

Eh that's a good point. I've interned at the company I'll be working for after graduation for every summer since I got into college (started right after my freshman year). So far, I've done 5 summer internships and a 1 during the school year. Looking back, that's the best decision I could have made when it comes to my employment.

Re:You think the housing collapse was bad (1)

Anonymous Coward | more than 2 years ago | (#37773630)

I'm curious of what % of a schools budget actually pays for a teachers salary.
Mostly when I went to college I didn't get much student to teacher interaction. They could have had a canned video for all I cared. Not for all classes but for most.
Personally I would rather watch a professor at the top of his field lecture than some alcoholic in person. Maybe do a combination of the two and free up a teachers time to do more grading and 1 on 1 interaction if needed.
The reason why amazon doesn't sell online course videos is because there is no degree behind it.
If there was a market for schools to purchase online course material... Well that would make a few professors very wealthy while converting most teachers into low paid personal tutors.
The future is knocking would someone please answer the fucking door.

Re:You think the housing collapse was bad (3, Insightful)

Oxford_Comma_Lover (1679530) | more than 2 years ago | (#37773770)

You can't go into default in the normal sense. Most student loans can't be discharged in bankruptcy.

They can be discharged on death. Because unemployed angsty grads never have problems with suicide, Congress wanted to incentivize it. (Not really, that's just a side-effect. It really is to not burden the family of someone who dies.)

There are, however, really great loan forgiveness programs and loan repayment programs. It varies a little based on your exact loan, but generally, the current loans (which will change slightly next year, possibly) allow (1) income-adjusted repayment, where you repay the government based on your income and get the balance forgiven at the end of 30 years, regardless of how much you still owe, and (2) repayment for public service, where you get your student loans discharged after ten years of government service or not-for-profit work requiring the use of your degree.

Amazingly, I believe the Government accounts for these MASSIVE loan forgiveness expenditures in the budget by calling them budget-neutral and completely ignoring them.

They are great programs in several ways, which may be why they want to make them look good and not really account for them (they don't want to make programs which make public service work possible and which make college and graduate educations possible go away because of political pressures from the rich, who pay the most taxes and so would have the most interest in cutting those programs). Ultimately, of course, it is ridiculous to say they don't cost anything.

Re:You think the housing collapse was bad (1, Troll)

Quiet_Desperation (858215) | more than 2 years ago | (#37773828)

What are you going to foreclose on when little Johnny goes into default on his $100,000 loan debt because he can't find a job?

How are his kidneys?

University is not a right (1)

Quila (201335) | more than 2 years ago | (#37773856)

If you can't afford it, or aren't talented enough to get scholarships, or won't serve your country to get funding in return, too bad.

These people would probably be marching in Germany, where college is free. Only there, not everybody gets to go. You actually have to be relatively intelligent to get into college. In the US I've seen a college teaching number lines, normally taught in grade school, to incoming students. So they'd be marching for the right of everyone to go to college, even the dumb ones.

Also, don't expect sympathy when a degree in underwater basketweaving won't land you a job.

heh (0)

stoolpigeon (454276) | more than 2 years ago | (#37773450)

I wont be the first or last to say it, but I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt and doesn't understand that they made a poor choice.

Articles like this make me think OWS is a condemnation of the American educational system more than anything else. I would think anyone taught math in elementary school would see the problem with taking out hundreds of thousands of dollars in student loans.

Re:heh (0)

Anonymous Coward | more than 2 years ago | (#37773476)

State schools for the win! But not for long...

Re:heh (5, Insightful)

elrous0 (869638) | more than 2 years ago | (#37773516)

I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt

With almost any decent job these days requiring a 4-year college degree, what the hell do you expect? Unless your parents are upper-class or have had the foresight to save up the money (with no intervening crises to eat it up), your only hope to get anything better than slave wages at some manufacturing plant (that's probably going to China at any minute) is to get a highly-competitive scholarship or take out a student loan. And there are only so many scholarships to go around.

Re:heh (0)

Anonymous Coward | more than 2 years ago | (#37773558)

Yes, but it's a choice, you see. Who is stoolpigeon to say that poor people don't want to remain poor voluntarily?

Re:heh (5, Informative)

iamhassi (659463) | more than 2 years ago | (#37773566)

With almost any decent job these days requiring a 4-year college degree, what the hell do you expect?

That is why high school is worthless now days. You might as well drop out with a GED and go to community college. High school and GED gets you the same job now days, there's no need to waste those 4 years when you could go to college and at least get an associates and move on to bachelors at a real school.

Of course this only applies to the 99%, the 1% go to Ivy League high schools and Ivy League colleges so they don't need to worry about community college.

Re:heh (2)

luis_a_espinal (1810296) | more than 2 years ago | (#37773854)

I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt

With almost any decent job these days requiring a 4-year college degree, what the hell do you expect?

1. Not buy brand new Macs (really, you don't need them to do your studies.)

2. Not go to a distant university if there is one within commuting distance.

3. Not go to a 4-year university for your freshman and sophomore years if there is a community college near you.

4. Get a A.S. degree first (what I should have done.) Then go to a 4-year university, even if it takes you an additional year to get your B.S/B.A degree. That will better prepare you for eventualities.

5. Not go to a dorm if you can live with your parents (yes, there will be less booze and less sex, but you get the drift, plus that's not the reason to go to a university anyways.)

6. Not live solely on student loans if you have a chance to work part-time in school or flipping burgers.

7. Don't get any degree just because you don't know what you want. Due your due diligence in your freshman and junior years to find out what you want. IT CAN BE DONE. And if you can't, then take a break, possibly study part-time and go to work. Allow yourself time to explore and understand what you want out of life (economically and emotionally.)

8. Don't get a B.A. degree in History or Psychology (or similar degrees) and stop there. You might as well go to grad school (as B.A. degrees in those fields are pretty much worthless.) If you are going to invest in an education, you might as well go to a level that gives a better chance to get a job with it.

9. Don't use money of student loans and pell grants to finance a Spring Break trip to Cancun (I've seen it happening, and it is not a rare occurrence... sadly.)

That's just off the top of my head.

Re:heh (1)

iamhassi (659463) | more than 2 years ago | (#37773524)

Agreed, actually this is what I was typing before I previewed the post and saw you posted something similar:
It's very difficult to feel sorry for some of them when I see them going for degrees that I know there are no jobs for and they don't go on a job hunt BEFORE choosing that major to see if there are any jobs available.

Choosing a major before making sure there's jobs available is like going treasure hunting after finding a buried map, if you have the cash available that's great, but don't go borrowing $100,000 to rent a boat and dig up some island only to find nothing is there.

Also I'm sick of this excuse "but the recruiter said I could find a job!" So? Why didn't you search yourself to see if there were jobs in that field? Is it that hard to go on craigslist and type "programmer" or "RN" or "CPA" and look at the salaries be offered and see if it's worth 4 years of college loans to make that much?

Re:heh (2, Informative)

Anonymous Coward | more than 2 years ago | (#37773704)

This is retarded. You expect an inexperienced, 16-18y/o KID to know in advance where all the jobs are gonna be, sort through employment statistics and guess correctly? 4 years ago they probably would all go into real estate. The education is pretty cheap and you could make bank. Or how about finance, another 'great' pick. How would that work out now? (and while some finance people are still making money hand over fist many have been laid off). It is hard to predict the future AND not everyone is well suited to the few career choices that have any decent wages (mainly IT). And those (IT again) keep seeing news stories about offshoring. Couple that with every adult, administrator, and advisor to this KID telling them BS like "follow your dreams" and there is NO WAY it is reasonable to expect any kid going into college to magically be 'responsible' and pick the perfect major.

Re:heh (2)

cdrudge (68377) | more than 2 years ago | (#37773834)

Is it that hard to go on craigslist and type "programmer" or "RN" or "CPA" and look at the salaries be offered and see if it's worth 4 years of college loans to make that much?

My wife is currently looking for a job after a decade off to raise 3 kids. She doesn't have a degree and doesn't have much current, relevant experience for anything specialized or an in-demand position. She's using a variety of job posting boards including Craigslist for a receptionist, office admin, etc type of job. She's found job postings from anywhere between $8/hr to $48k/year. So hey, attending a business college or similar to get a basic advanced education degree would be worth it to make $48k! In reality though, 90% of them turn out to be spam or phishing attempts and the remaining 10% that pay the much more realistic $8-10 usually are filled by people with 4 year degrees who take anything just to have some income.

Re:heh (5, Insightful)

royallthefourth (1564389) | more than 2 years ago | (#37773610)

I wont be the first or last to say it, but I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt and doesn't understand that they made a poor choice.

OK, let me get this straight:
1. Don't go to college, can't find a job. Poor choice.
2. Go to college, can't find a job. Poor choice.

What we have here are a bunch of people willing to work, but the market is unable to find work for them. You blame the people, when the market is what's causing the problem.

Re:heh (1)

mjr167 (2477430) | more than 2 years ago | (#37773696)

When I graduated college I found a job right away. A friend of mine who graduated the semester after me couldn't find a job and has since given up on working in our field. I had a A average, she had a C average... sometimes the people ARE to blame.

Re:heh (0)

CaptSlaq (1491233) | more than 2 years ago | (#37773768)

Wow. Talk about oversimplifying an issue... I peeked at the OWS website a while back. Many of the ones who had posted were griping that they'd taken out massive loans on degrees in subjects like history or humanities. The REALITY is that the market doesn't want people with those kinds of degrees for the most part.

While there may be SOME truth in your statement, to say that it's wholly accurate would be a misnomer at best

Re:heh (5, Interesting)

Anonymous Coward | more than 2 years ago | (#37773724)

My knee-jerk reaction is the same as yours. "Why did you take out loans you can't afford? Regardless of why, it's your fault for doing it."

However, looking at the times we live in, I have a lot of sympathy for the OWS movement. I recently got my PhD in Physics from a top university, and was a triple major as an undergrad. All of this happened without a single penny of student debt, and in fact I was actually supporting one of my parents on my grad student stipend. While I was in school, employers were often contacting me with offers of, "Please quit! Come work for us at Facebook!", and "Please quit! Come work for us at Hedge Fund!" I flew out to a few of the places to interview just because I wanted to see the city. Now that I'm done, the job market has since collapsed. It's hard to even get a call back, even with a decade of programming experience, several publications in an emerging field a PhD, and international recognition for my programming abilities. My university is balking at paying me a $2150/month stipend for me to continue doing research there as a postdoc.

I'm left thinking that leaving the good thing I had in high school and undergrad, a well-paying job in a contracting collective, was a big mistake. A huge mistake. Because even the opportunity cost of going to university for 10 years for free was greater than the value of the education. Now imagine you're one of the 99% who took out loans on the promise that they'd get a better paying job that would cover them in the future, and you're thrust into a workforce that doesn't want you. You can't bankrupt your way out of it. You can't take a job at McDonalds because the student loan payments are more than you'd be making. You feel like going to university in the first place as opposed to working a McJob was a mistake.

So, I do have a lot of sympathy for them. I can't imagine being in that position, and the promises they were given by their institutions are worth about as much as the paper the diploma was printed on. Their student debt has them saddled for life--they can't default or bankrupt their way out of it. They'll be paying until they die. I wish I could do something to help them, but until someone will call me back for something other than evil (damn you hedge funds), I'm out of luck too.

AC because this is embarrassing. I support you OWC. :(

Re:heh (1)

Asic Eng (193332) | more than 2 years ago | (#37773868)

I have a hard time sympathizing with anyone who has voluntarily taken on large amounts of debt and doesn't understand that they made a poor choice.

Well having no sympathy is a staple of political discussion in the US, no surprise there. Personally I'm not happy with young people no longer being able to afford a good education. That alone I'd already consider an important issue.

That's not all there is to that story though: if it's no longer viable for many US citizens to get a degree, then the US economy will find it hard to get access to a skilled work force in the future. That's a pretty bleak outlook for your country.

Cool, we reached a new milestone... (0)

Anonymous Coward | more than 2 years ago | (#37773458)

And I helped! *oblivious smile*

what do you mean... (1, Insightful)

Anonymous Coward | more than 2 years ago | (#37773460)

I can't get a job with a degree in philosophy???

Re:what do you mean... (2)

somersault (912633) | more than 2 years ago | (#37773542)

Current quote at the foot of the page:

Look at it this way: Your wife's spending $280 a month on meditation lessons to forget $26,000 of college education. And you're still drinking ordinary scotch?

Here in the UK, repayments on your student loan are only taken while you're making over a certain threshold value (something like £14,000 a year). Also, once you hit 45 years old the debt will be wiped regardless of how big it is. I rather stupidly paid £2000 of my savings into repaying the loan after I left University, when if I'd been thinking sensibly I should have just saved it towards a deposit on a mortgage. It started at about £14000 and currently I have £8000 left to pay off on it.

Re:what do you mean... (0)

Bardwick (696376) | more than 2 years ago | (#37773870)

Who pays for the debt that was /cough "wiped out"? You "stupidly" payed your debt instead of ignoring it and buying a house? Did I read that right?

Wait... (0)

Anonymous Coward | more than 2 years ago | (#37773470)

How is this a concrete issue driving a protest? You took out $X amount in debt for your student loans, you now owe $X+Interest. You signed the contract, yes? What exactly is the issue?

The issue I think is the majority of these people got a degree in $USELESS_DEGREE and now don't want to have to pay for it. Sorry, boohoo. I spent my college years getting a useful degree and paying for it by working during the year and the summer and left college with no debt between scholarships and hard work. I now have a decently lucrative job. This isn't a hard concept.

Maybe it's not all about me (4, Insightful)

stomv (80392) | more than 2 years ago | (#37773750)

Perhaps the issue is that the inflation rate for college tuition is well above the general inflation rate, that states are contributing a far lower percentage toward operating state unis and community colleges than they have in the past, and that more and more employers are requiring a 4 year degree for positions which don't really need one in the first place.

Perhaps they're not protesting their own debt. Perhaps they're protesting the current situation -- created by banks, governments, universities, and employers -- which has helped foster the enormous tuition rates being charged for students *today*, thereby necessitating massive student loans or a society in which upward social mobility is unnecessarily reduced.

Perhaps there's more to a strong and diverse society and culture than engineering. Perhaps your $USELESS_DEGREE has tremendous social value, and the real problem is that our current economic structure doesn't reward the people working in job($USELESS_DEGREE) well enough. Perhaps they think the problem is that we're simply not funding enough social workers and teachers and the arts -- not that there are too many young people with those degrees.

Look -- I earned a whole bunch of college degrees on full scholarship in tUSA, in fields which pay reasonably well. This isn't about me. Yet, I do agree with the OWS protesters. College debt is too high. Sure, it was all taken voluntarily, but that doesn't mean that we shouldn't change the circumstance for future high school graduates. I believe that the Federal Gov't should open more universities at free/low tuition, and not require military service to be admitted -- and focus on areas where we have a national interest. Health care, energy, infrastructure, etc. I believe that state governments should pour far more money into their state universities. I believe that both Fed and state gov'ts should hire more teachers and fund more arts. I support raising taxes on folks with more money [both income and wealth] to pay for it. I think that if we moved in that direction, we'd have a safer, healthier, *better* society.

Re:Wait... (0)

gfxguy (98788) | more than 2 years ago | (#37773766)

I agree.. despite the fact that we haven't "forgiven" all student loans yet, the system is already screwed so that if you worked hard, made the right decisions and are living within your means, you're not exactly punished for it, but you get no "handouts," and the handouts that are given are often at your expense.

I borrowed some money in college, but I mostly worked my way through, paid everything back, and bought a house that was well within my means... I get nothing. Some people who have more-or-less the same education, but put it ALL on loans, and then when they graduated thought they "deserved" a McMansion, so figured a 5-1 ARM or an interest-only mortgage ought to do because, hey, they have a degree... so in five years they'll be able to afford it, and now want "loan" modifications (or helped crashed the market by defaulting) and want student loan forgiveness? So it's not necessarily that I'm penalized for making good decisions (although, in a larger sense, we all are when someone gets bailed out), it's that people are not penalized for making risky bad ones.

If wisdom is learning from your life experiences, how does bailing people out help?

Not saying banks weren't dumb (or even dishonest), but borrowers were willing participants. When the loan officer told me how much I could borrow, I just shook my head and said "I'm only looking for about half that." I knew the amount she was proposing would be difficult, to say the least.

But it's this safety-net that "rewards" (or at least makes up for) bad decisions that is the problem... just wait... since I've been living within my means and saving for retirement in an IRA, the government will come after that, too... don't think it won't happen? There are already people trying to do it. After all, why should I be able to retire with all that money when Joe Idiot will have nothing?

And no, I'm not some cold, heartless jerk that wants people to live on the street with no food or shelter - I realize sometimes people just can't make it on their own. I don't know what the answer is, but I know loan forgiveness isn't it.

Re:Wait... (2)

EllisDees (268037) | more than 2 years ago | (#37773774)

>I spent my college years getting a useful degree and paying for it by working during the year and the summer

Yeah, you can't do that anymore. You'd have to have a full time minimum wage job to even come close to paying for college now.

Let experts, not salesmen, decide (2)

concealment (2447304) | more than 2 years ago | (#37773472)

We have a bad habit in this country of letting sales figures and the profit incentive "make" decisions for us. In this case, college is a huge business. We can promise people more income if they get a college degree, so everyone wants a college degree.

Educators will tell you that perhaps college should be reserved for those with the ability and initiative to do the work. Not everyone is ready for a college education, or able to engage in the rigorous critical thinking required. That's not popular with the salespeople, who want to sell college to everyone.

The result is that college has become more like another four years of high school. The classes are easy and emphasize memorization instead of developing critical thought. Expectations are low. It's not a time of great discovery, but of people pushing through because if they just get that piece of paper, they get richer.

Through this process, we have cheapened education for everyone. High school is now four years of day care because those teachers figure the kids will really learn to spell in college. College is now like high school, a dreary period of drudgery. All of it is motivated by money, not a desire to learn or to help the truly exceptional students get ahead.

By trying to sell education to everybody, we have cheapened it and now to get anywhere in this world, you need a graduate degree. When they cheapen those, too, we're going to have to cut out the middleman and bribe our way into careers.

Banks not to blame for this (1)

JTsyo (1338447) | more than 2 years ago | (#37773482)

Don't think you can place the blame on banks this time since it's the colleges that set the limit. Might be the case that the easy credit allowed colleges to push up their tuition knowing students could take out loans. I don't see any reason why tuition rates need to grow as fast as they have.

Re:Banks not to blame for this (1)

Sosetta (702368) | more than 2 years ago | (#37773836)

"Might be the case that the easy credit allowed colleges to push up their tuition knowing students could take out loans"

This is exactly the case. Would you extend a loan to someone for $40,000 to allow them to get a job making $28,000 a year (instead of $24,000?). If you could charge them 7% interest and have it be guaranteed by the government (which means you take NO risk) you sure would.

The housing bubble happened because Fannie Mae and Freddie Mac would buy any home loan no matter how bad it was. So, as a bank, even though you know someone will never be able to afford the payments, you make the loan knowing you can sell it off immediately and make a profit with no risk. In fact, you'd be shirking your fiduciary responsibility to NOT make the loan, since it makes money for your bank.

Student Loans are Voluntary, just like other debt (0)

Anonymous Coward | more than 2 years ago | (#37773500)

I don't get why everyone is complaining about student loans. They are 100% voluntary. Nobody is forcing anyone to go into debt.

Re:Student Loans are Voluntary, just like other de (1)

binarylarry (1338699) | more than 2 years ago | (#37773580)

Yeah but US tax payers repay the banks when the original loan recipient stops paying.

gg college

non-profit? (5, Insightful)

cashman73 (855518) | more than 2 years ago | (#37773506)

Anyone that still believes that America's colleges and universities are "non-profit" institutions, should think again at this. For two of the most obvious examples, I cite you the "Bowl Championship Series" and most college sports in general (namely football and basketball), as well as the fact that student dormitories and student unions have largely been turned into country clubs, with just about every one of them having a Starbucks (heck, that's in the library now, too), and having such amenities as rock climbing walls, gyms with workout equipment that rival Gold's Gym, and many schools are giving every student their own iPad these days. Plus, when most schools in Division I pay their football or basketball coach twenty times the salary of the average professor, and four times the salary of the university president, you know something's fouled up,. . .

Sex trade (-1)

Anonymous Coward | more than 2 years ago | (#37773548)

This works kind of an encouragement for sex trade I guess. Or hacking for credit cards. Or robbing banks. Or....

Oh well, expect an increase of college porn videos soon to be...

WTF Slashdot? (1, Insightful)

shellster_dude (1261444) | more than 2 years ago | (#37773562)

1) Why the hell is this a topic for Slashdot? Has Slashdot given up all pretense of being either unbiased, or a tech news site?

2) If that were truly the thrust of OWS, then shouldn't they be "occupying" a university parking lot protesting the absurd prices of tuition?

3) How are student loans a problem? If you make good choices, you will choose a major which will provide you with the skills/qualifications to get a job which will more than pay for the loans. If you choose a worthless field of study, or go to an Ivy League schools with ridiculous costs (when you can't afford it), then that was your choice, and you deserve the consequences of that stupid choice.

4) The US Government has all but taken over the student loan process. This is Fannie and Freddie 2.0. There is no accountability or recourse when the government is running something. It's the fox in charge of the hen house. The rules don't apply. If OWS really wants to make a difference, then they need to be demanding that government get out of Student Loans, and get out of bailing out banks. They would be far more effective "occupying" a capitol building.

5) Let's not forget the historical context of "college" education. Even 50 years ago, your average person could not afford to go to an institute of higher learning. It was completely impractical unless you were rich. In modern times college is actually feasible for every one. You might have to go to small, no-name college, and you might have to take out some loans, but you can do it. That is incredible progress. Sometime a little perspective is useful.

Re:WTF Slashdot? (0)

Anonymous Coward | more than 2 years ago | (#37773652)

^mod this brother up

And you are still dumb as fuck (-1)

Anonymous Coward | more than 2 years ago | (#37773564)

Not much value in that dollar, huh america?

Don't forget your AA+.

Your problems cant be fixed, they all stem from the two party system which is too deeply entrenched to ever be a democracy again.

And you deserve every little bit of suffering heading your way, it's your birthright as a slave owning, war waging, god fearing American.

Karma, bitches.

Signed, the world

There are two legitimate sides to this argument (3, Insightful)

damn_registrars (1103043) | more than 2 years ago | (#37773570)

There are plenty of students who majored in very reasonable and marketable courses of study and came out with a mountain of debt and dramatically worse job prospects than what were available when they began their studies. These people have a very real complaint.

However there are also people out there who went to college and majored in drama, or comparative literature, or film studies, or any of a number of other fields that have very marginal job prospects even in a good economy. They are carrying debt because they took a foolish risk with 4 years of their lives. Of course, some of them may have been poorly informed by their college with regards to what they could do with their degree. Others didn't give a damn and set off determined to "study what I want" or whatever. This latter group dug their own hole and I don't have a lot of sympathy for them.

In short, if you majored in engineering and then couldn't find a job after the economy went down the toilet while you were in school working your ass off, I feel for you. But if you spent four years in a field with ordinarily terrible job prospects and now you are shocked that you have no job prospects, I don't have much sympathy for you as you took a great opportunity and managed to squander it.

However, those who excel at taking great opportunities and squandering them may yet have a future in American politics.

Re:There are two legitimate sides to this argument (1)

cashman73 (855518) | more than 2 years ago | (#37773702)

However there are also people out there who went to college and majored in drama, or comparative literature, or film studies, or any of a number of other fields that have very marginal job prospects even in a good economy.

I think there is also a reasonable number of these liberal arts students that began their college career in a marketable subject, like science or engineering, and realized quickly how difficult it was when they found out that they actually had to study instead of partying at the bars and frat houses every night. So after flunking a few courses their freshman year, they changed their major by sophomore year, flunked a few more courses, and ended up either dropping out with student loan debt, or graduating on the 6 or 7 year plan with a useless degree. It's difficult to have sympathy in someone like this, who ended up majoring in English not because they wanted to teach or go into journalism, but who "ended up" there in a futile attempt to merely end up college with a degree thinking that they're better off with a useless degree and massive student loan debt instead of no degree and little or no debt.

Simple solution. (-1)

Anonymous Coward | more than 2 years ago | (#37773612)

We in this country have a habit of screwing over a small minority if it is in the best interests of the majority.

The top 400 richest ppl have just as much in the usa as the bottom 150,000,000
We can screw over 400 people pretty easy. That's like a days work on the scale of goverment screwing.

We take the assets of those 400 people and spread it back across everyone else. In one swipe. Oh sure... its unfair and kinda sucks. but only for 400 people. an extreme tiny minority. we can do it no problem. We've screwed over more people for less many many times in the past.

What? we cant screw over 400 people because they are rich? They really are better than the rest of us? All bullcrap. Make it the top richest 1000 people. That's a good chunk of americas cash right there.

What? no? Why not? It's easy.

And hey... there's always the guillotine if they put up that much of a fuss. I hear that worked ok in the past.

There's some legitimacy to OWS but........ (1)

i_want_you_to_throw_ (559379) | more than 2 years ago | (#37773626)

but maybe you should have gotten a degree in something other than Elizabethan poetry. There's some legitimacy to OWS but there's also an awful lot of whiners which shouldn't be a surprise since we are largely a nation of entitlement.

The 1 Trillion number is incorrect (1)

Anonymous Coward | more than 2 years ago | (#37773638)

See here for the data:

http://blogs.reuters.com/felix-salmon/2011/10/19/fact-and-fiction-about-student-loans/

OWS = same whining leftists as always (-1, Flamebait)

argStyopa (232550) | more than 2 years ago | (#37773670)

http://blogs.wsj.com/metropolis/2011/10/19/who-is-occupying-wall-street-a-pollster-surveys-protester/ [wsj.com]

Successful, unchallenged capitalism makes the population so safe, so indolent, so comfortable, so well-off that it literally breeds away ambition, determination, and self-reliance.

Watching OWS protests, where we have largely a population of educated middle-class or higher kids (who are staggeringly wealthy by any world standard), who have spent their lives:
- getting everything they need, and pretty much everything they want
- have never known hunger
- have always been basically healthy
- have never seen war except as volunteers, which is pretty damn unlikely anyway (more importantly, have never faced the ravage of war across their homes)

For them, the idea that this gravy-train may stop or even be impaired is nearly inconceivable. No wonder the concept is nigh unto catastrophe. Of course, real people - people with some actual life under their belts - know that the bulk of their whinging is laughable.

Now, I'll credit them with saying (at least at first) publicly what normal people DO agree with: that the bankers and financiers whose shenanigans caused this financial crisis should NOT have been bailed out, and need to be punished to the extent of the damage they've caused. In fact, I'd love it if they were truly, biblically decimated.

Of COURSE, they also don't really understand what the real consequences of significant bank failures would have meant (see the points above), but ignorance is bliss, I guess.

I suppose it makes me a radical that I believe that the survival of the republic really required these failures. Like a forest where all fires are prevented, we've allowed socialist safety nets to suppress the normal consequences of failure so long that the next one that happens may truly be catastrophic (this one would have been borderline). But in the same sense that you can't forever prevent fires, you can't forever protect people from the consequences of their choices. That tension WILL COME OUT.

For Profit Colleges (0)

Anonymous Coward | more than 2 years ago | (#37773682)

I would like to see the break down of how much of student loan money is going to for profit colleges vs. real universities.

http://www.bloomberg.com/news/2011-06-07/for-profit-college-students-need-rules-protection-kanter-says.html

For profit colleges and online classes need to be out lawed.

Interest Rates (1)

svendsen (1029716) | more than 2 years ago | (#37773688)

The one thing that kills people with student loan debt (or mortgage for that matter) is the high interest rates. If banks can get near 0% loans why can't those with student loans (or again mortgages) refinance to a much lower % (say 1.5% which would more than cover admin costs if you get the money at 0%). While this wouldn't solve the amount of debt someone as it would at least help lower the monthly payments and take some pressure off. It would also help if student loan interest was allowed to be deducted no matter how much you make. I hate seeing that I cannot deduct student loan interest because I make too much money.

But on the other hand the unemployment rate for those with college degrees is about 4.5% which beats the national average ~10%.

Re:Interest Rates (1)

EmagGeek (574360) | more than 2 years ago | (#37773734)

Banks have to charge a spread on interest at least equal to the rate of inflation, which is 6-8% right now. Otherwise, the principal deflates with time and the bank loses money.

If you don't want to be burdened with student loans, you don't have to take them out.

Re:Interest Rates (1)

svendsen (1029716) | more than 2 years ago | (#37773818)

Yet the banks can be loaned money at 0% so isn't the government losing money then by lending at the rate? So why not have the government lend to people at a higher rate then the banks? The banks aren't loaning the money so it might do more good to lend to the people and free up cash flows for the population vs. a few banks.

Again, banks are committing fraud (5, Insightful)

fermion (181285) | more than 2 years ago | (#37773690)

There are a couple things here that clearly indicate that banks are committing fraud.

First, there is usury. Student loans are unsecured, but federally backed. There is very low risk to the bank. Yet interest rates charged tend to reflect that of high risk loans. Further, while payments are deferred, interest isn't. Not all of this is fully disclosed to the borrower. For instance, do all students know that they are payig interest rates comparable to normal loans, yet with normal loans a borrower can default on a loan. With student loans the must must be paid back, and garnishment of wages and other restrictions on one's livelihood are very easy. Unlike most loans, which are regularly renegotiated, the student loan, with exorbitant interest given the level of risk, is not.

Then there is collusion in the defrauding of the american public. Much of the loan money goes to private distance Universities. These Universities are well known for having very high default rates, and are well known for being victims of straw men loans. In any other financial process, the banks would conduct due diligence to minimize exposure. However, as this is a way to transfer taxpayer money to private banks, there is almost no due diligence. The money is handed out. Banks know or should know the forms are fraudulent. There was one reported case of many forms asking for money to the same address. However, as there is no real risk, and it free money for the bank, no such diligence is performed and banks happily take tax payer money. Unfortunately, all risk and blame is placed on the university and student. While this is appropriate, more blame must be placed on the people who are fundamentally profiting from the fraud. The bankers.

Re:Again, banks are committing fraud (2)

MozeeToby (1163751) | more than 2 years ago | (#37773874)

For instance, do all students know that they are payig interest rates comparable to normal loans, yet with normal loans a borrower can default on a loan.

You will never find a 14 year, collateral-less loan that banks will give to a jobless 18 year old student, at any interest rate, they simply don't exist, and for good reason. The government backing is the only thing that makes such remarkably low rates possible, and the default-less nature is the only thing that makes the government guarantee possible.

Mobius $trip of Love (1)

darkjohnson (640563) | more than 2 years ago | (#37773712)

Inflation causes education costs to rise. Students flooding the job market roll the dice and take out loans to try to improve their chances. The economy crashes, jobs are even more scarce, students delay leaving college, loans get bigger, they realize they're in deep poo and decide 'the man' and his want to be paid back on the loans is holding them down. OWS people. Don't trust anyone over 30 (which is now 40 because, it's the new 30). We need a good war to thin out their ranks, only now war is fought with expensive toys that rack up the national debt. And tomorrow the world ends - it must be Thursday.

Dumb (1)

JBMcB (73720) | more than 2 years ago | (#37773718)

I did it the stupid way I guess - I worked a ton and paid my own way through college. I also chose a college I could afford. I even had a credit card from one of those predatory credit card companies and, after paying off the balance every month, got enough rewards points to treat myself to a Starbucks every once in a while.

Sorry, zero sympathy for anyone taking out stupid loans. It's not rocket science. There are tons of organizations, books, magazines, and counselors out there to help you figure out what you can afford.

Limit loans to STEM degrees. (1)

couchslug (175151) | more than 2 years ago | (#37773760)

The way to cut the head off the snake is to only fund degrees useful to society and let hobbyists find money for their amusements.

Over $1 trillion, really? (0)

Anonymous Coward | more than 2 years ago | (#37773772)

We didn't get our money's worth.
GO $300 USED MCGRAW HILL BOOK WOOOO $150 TI-86 YEAH $1300 REQUIRED HIGHSCHOOL ALGEBRA CLASS AWESOME

WELCOME TO FU!

Most of them won't accept bankruptcy (1)

MikeRT (947531) | more than 2 years ago | (#37773830)

The thing I've noticed from regularly perusing We Are the 99% is that most of them feel entitled to a good job. You are screwing them over and stealing their American Dream if you don't recognize the Awesomeness(tm) that is their Political Science, Art, Psychology, Sociology, General Business or Women's Studies degree. You are just a sympathizer with the 1% if you don't support bailing them out, even if you're part of the 53% and still pissed that your tax money went to Goldman Sachs and Co.

They're going to demand a bailout and probably get it at some point. What is needed is for someone to actually tell them the truth. When blue collar workers with actual marketable skills can barely feed their families, a fresh-faced Psychology graduate ought to consider herself lucky she is a waitress with enough hours to feed herself, even if she doesn't have health insurance.

Blame the schools, too.... (1)

madhatter256 (443326) | more than 2 years ago | (#37773848)

Well, for-profit private schools should be blamed. Using car-salesman tactics they managed to convince students from low-income areas to go to their private, non-accredited school to be able to obtain a career that is most likely non-existant.

These schools take the maximum amount the student can borrow and they don't give a cent back to the student for what's left-over after tuition/books because they take care of everything for the student. The student doesn't realize how much they borrowed until AFTER they graduate.

Of course, you also have the poor art/sociology/psychology (anything non-engineering or science related) students who want to have a $5,500 apple laptop to facebook and twitter while they rack up a $100,000 student loan debt...

Combine those things together and you have a trillion dollar student loan debt...

I'm actually paying a bit more on my minimum loan payment as I only borrowed less than $26k for my college education. I went to school full-time and worked full-time, so those who decided to borrow to live off of it, then they should pay it back, no matter what.

apprenticeships / more trades based IT will help (1)

Joe_Dragon (2206452) | more than 2 years ago | (#37773878)

apprenticeships / more trades based IT schools will help with the part of going to school and having little to no idea about doing the job in the real world and by moving people in a system like that it will free up room in college as well letting CS be more about the high level stuff and less about how to work the help desktop / desktop / system admin. I have seen to many story's about people with 4 year CS being very clue less when it comes to basic IT stuff / lacking needed skills that if you went to a tech school or had a IT apprenticeship you would know. Also 4 years in the class room is to long it should be a 2-3 year mixed class room / apprenticeship on the job plan.

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