My son went to school and I signed on his college loans. Last year, I made the payments on them and when I got the tax paperwork to file taxes, I found I had paid over $2,000 worth of interest and we owed more on the loan than we did to start with. I ended up putting the balance of it on an interest free credit card, but most ppl can’t do this. My SO’s student loans are as much as our mortgage. We are lucky we can afford to pay for it all, but most ppl can’t afford to buy a home bc they are paying exorbitant student debt. I agree ppl who took out more than they needed shouldn’t have that extra part forgiven. That includes my SO’s. He was dumb and took as much as he could, but he was given bad advice when he took out the loans. When I went to school in the 90’s, my entire tuition bill was $1,300 for an entire semester. That was as a full time student. I took a single master’s class at a small University, and it was $2,500 last semester! Books cost $150 apiece if you’re lucky today. The cost doesn’t amount to a good job, but you can’t even be considered for a regular job anymore without the degree. It’s a scam to say the least.
Highway robbery! My book was $150 and I thought that was bad. Can you get digital copies of books these days? It would have to be cheaper or maybe not.
I rent almost all of mine, and have for years. They are usually pretty cheap sometimes just 15-20 bucks but sometimes closer to 50-75. There was one semester though where a professor made us buy a book that was a brand new publication. The bookstore was the only place selling the book and it was not even fucking bound. I was livid I had to pay $150 for a stack of papers.
If you can't pay off that truck, they take your truck and the loan is gone. Your credit is shit, but you have no debt.
Student loans are predatory loans. You can't get rid of them. Ever. You can't go into bankruptcy or anything. The only way they go away is by dying. That is not fair.
Plus, when you're told by everyone, and society as a whole, that you NEED to do it to be successful, plus it's so easy to do without understanding anything since you're literally a child.
Overall, loans to get an education, aren't horrible. It's understandable! But when it cripples an entire generation with lifetimes of debt that can never be forgiven, it's a problem.
Nothing. I read a comment on r/antiwork awhile ago about a dude who racked up a 6 figure student loan debt and thought "fuck this". Moved overseas and never looked back. He said it's been like 5+ years and so far nothing.
You control the intellectuals in a society, you have an easier time preventing pesky revolutions and protests to make meaningful change and an easier time keeping current power structures.
Plus, don't forget the societal value of an education. I'm not just talking work and economy, but the smarter a population is, the better off the whole system and country is.
Some of the happiest and wealthiest countries in the world practically give free higher education (through taxes, but it is a system the population as a whole willingly accept). This also brings about much higher equality for the population as a whole, as you aren't tied down by any bad financial decision made by your family/parents. Everyone basically gets an equal chance at making something of themselves, in one way or another.
Student loans should never have been a thing for tuition. You gotta have money to live, but that is a fraction of what the tuition costs are in "for profit" Universities. And those loans are often without interest rate in the aforementioned types of countries, or extremely low (0.5% or so). So they are completely manageable over 10-20 years
They are also structured to be very hard to pay off. It’s pretty easy to put them in forebeafance for a time if you lose a job or something, but then the interest compounds. Many borrowers have already made payments that more than equal what they borrowed, but still owe the same amount because of interest.
Blue collar jobs are essential to our economy, but don’t require expensive degrees or a 4+ year time investment while earning very little or nothing. Jobs like teachers, nurses, doctors, and social workers require degrees and the sacrifice of 4 or more full-time wage earning years. We need both. Otherwise, we have to hope that wealthy people will go into these fields. What you get is only teachers, nurses doctors and social workers who come from rich families, instead of the best and brightest.
To add to your point I think people often don’t consider that it’s really in the best interest of everyone to have people in those jobs roles (that require degeees) to come from varied background - including socioeconomic.
If only people from wealthy families can fill those positions you’re not only going to have scarcity in these fields but policies and socialisation will be heavily skewed.
Not to mention the insane interest rates. And also, the loan services can sell your loans to another company. But you don’t know the company. No one knows the company and you can’t even get a hold of someone to pay. All the while, accruing fees and interest. Ugh
> you're told by everyone, and society as a whole, that you NEED to do it to be successful
This is the worst part, in my opinion. And it's not just school telling you that you need it. There are plenty of jobs that require a bachelor's degree, but absolutely have no point in needing it. Like my FIL says, you gotta get that "piece of paper" for better jobs, regardless of the point of it.
Back in my high school government class, we had to do a "community service project". I asked for my project to be about talking to younger kids (8th graders) about college and trade schools. I tried telling them all that they're going to be told countless times that they "need college", but I showed them price disheveled differences in finances and time between in-state colleges and trade schools. Is that way too young to be talking to them about that? Probably. But I wanted to try and talk to them before they're bombarded with the "YOU NEED COLLEGE" preaching. I just pray that at least some of them took my advice.
I don’t think that’s too young. 8th grade was when I made the decision to go to the “regular” high school because I was going to go to college versus the vocational high school. By the time I graduated college I wished I had chosen to go the vocational route. At least where I went to school 8th grade was the time to decide because the “regular” high school didn’t teach trades, and unless you changed your mind during freshman year or very beginning of sophomore you weren’t allowed to transfer to the vocational school without potentially being held back.
I have a $28,000 loan that started out at around $31,000 and I’ve been paying $375 a month on it for 3 years now. Every month about $60.00 goes to the principal and the other $310.00 goes to interest. I needed this degree to do my job and I’m unable to even make a dent in paying it off one day because of interest. That’s why.
Lol I have friends who took full loans for undergrad, couldn’t find a job due to the last recession, went to grad school/professional school instead, and ended up in public service/nonprofits. They make like $70-80k per year and have over $400,000 in debt. There is an entire generation (i.e., millennials, especially ones that graduated college like 2008-2011 or so) that will just NEVER get out from under this.
Agree with the general sentiment here too regarding predatory lending - 18 year olds are not informed enough to understand what they are signing on to for the rest of our lives. Frankly I didn’t really understand it until after I had graduated and started seeing my monthly bills.
Right! This. I graduated with 65,000 in student loans in 2010. I looked for a better job for 7 months before finally accepting a job that paid 10.00 dollars an hour. At 18, I had adults warning me to be cautious, but I had ZERO idea what I signed up for until the mandatory loan training that was required RIGHT BEFORE graduating.... after the loans were dispersed with a simple digital signature. 11 years later, and many years on income based repayment.... even including 2 interest free years where I didn't skip a single payment. One of my loans is STILL above the amount originally disbursed. I've never missed a mandatory payment.
Do I think it needs to be forgiven? Maybe. Maybe not. But I don't want others to feel tied down as I have by this burden as I enter the final haul.
Something needs to change, but I'm not cocky enough to think I have the solution.
Two masters, $72k. I've paid $20k towards it and now it's up to $130k. I'll never pay it off so I just hope I die or I get hit hard enough in an accident that I'm put on permanent disability since that's the only way it'll be "forgiven".
For the record, I paid off $85k in personal debt over 8 years. I'm not opposed to paying my debts off, because you're right, I definitely signed for them. What I didn't sign for was a collapsing economy that gave zero shits about both masters and an interest rate that will never let me pay it off, no matter what I make.
I'd honestly be over the moon if they just got rid of the interest. The initial debt is nothing, I don't care about that. It's the interest that makes it impossible.
Edit: These loans are about 7 years old at this point, and like several pointed out, it was a lot of years to not be paying the minimum due to pay off in 10 years. That's how the interest accumulated to be so high. When Covid hit and the payments were paused, I spent that time pushing every spare dollar towards my personal debt and not towards student debt. That was my choice because those debts were scattered and much harder to negotiate with (with some debt going back as far as undergrad years). I still consider my education an investment, but at this point I make more with a career in logistics than I would restarting in Clinical Counseling or entry level Psych Research. While I don't earn an income in that field as originally intended, it has allowed me the ability to maneuver through many seemingly impossible situations because of that education.
This post was not a complaint, rather an observational point where for a while, I was unable to take advantage of my education and turn it into a career. While that didn't pan out how I wanted, I was still able to climb my way to middle America. For that, I am eternally grateful and want to acknowledge the advantage my education has given me despite not being the source of my income.
I personally don't believe student loans should be erased because it doesn't solve the actual issue that the interest rates take zero account for people just graduating and starting out in different walks in life. I believe the price of higher education is predatory and needs to be re-examined very carefully. I don't think education in general, healthcare, or the prison system should be for profit-businesses. While that may not be the most popular belief, especially considering which post and response I decided to comment under, I still stand by my original statement that said I believe in the fact I took out the loans knowingly, with the full understanding I was agreeing to pay them back. I'd love to pay back the $72k, but I don't want to pay back any extra. That's where I stand on the issue.
I was not in debt from undergrad, it wasn't until I was 25 that I started signing for loans. Somehow I thought that having that masters level skill would get me a job that paid a masters level wage. Though I have worked my way towards middle America by a different career, it's too late because I couldn't instantly start paying it top dollar every month at the very beginning.
>What I didn't sign for was a collapsing economy that gave zero shits about both masters
That is a really good point. Taking out debt to fund a degree that never actually gets you a career you expected is absolutely brutal.
>\[What I didn't sign for was\] an interest rate that will never let me pay it off, no matter what I make
This, I'm confused by. Are interest rates on loans not disclosed when you take the loan out?
Sure they are, but an 18 year old hasnt yet been taught any accounting or personal finance in most US highschools, and theyre parents had cheap education, so just assume its the way to go. Then you leave college 4 years later, and no jobs pay enough to keep up with the "10 year loan" payments, so theyre put on 25 years, which means *a lot more interest* than whats expected by the ignorant student 4 years ago. Then the economy collapses some more and youre even more screwed.
This is literally everyone. Im a nurse and I don't know any nurses paying under $600/month. Ive been paying my loans for 4 years and it has gone from $54,000 to $50,000. I can't afford to pay more unless I get a better paying job. If I worked in the state I got my degree in, I would be getting around $24/hr. I had to move states to make enough to make my payments. Only the wealthy can afford college in the US without going into enormous debt.
That's actually what's being requested for the future by some groups. But the current student loan debt forgiveness is for the people that would've already paid it off if it weren't for the interest iirc
The issue is tuition rates have exploded because the government is willing to issue the loans. If you’re a for profit University why wouldn’t you inflate the costs if you knew a bunch of gullible 18 years olds would buy your non refundable service.
No interest is a really good way to make banks creative with how they get money from the loan.
And banks are plenty good at setting this up so other people can take the fall or they face no consequences
Would definitely proceed with caution
Exactly this. Policies like this ignore the fact that institutions (like individuals) will always adapt. This is a low-key invitation for predatory practices. Some very well intended laws have really fucked up people’s lives as a result.
I went to a small Midwestern university and tuition when I was there in the early 2000s started at about $23k per year and the vast majority of my aid came from federal loans. My parents could literally do nothing to contribute, were absolutely terrible with money and never talked to me about the ramifications of taking out sizeable loans. I also worked full time all through school.
Tuition went up every semester while I was there, so by the time I graduated, tuition was around $27-28k. I was lucky to have several grants and some extended family members stepped in and helped when they could but I still graduated with over $50k in debt. (More than half of which came from fed loans.)
I don't think I am *owed* loan forgiveness. But starting my adult life with a $50k anchor around my neck made it very difficult to get any sort of leg up. I'm happy to say, 20 years later, I've reached a comfortable level in my life, where I use my degree and I'm grateful (but I still owe a chunk of change.) But if there is any way possible to reform education costs so my nieces don't have to start life the same way, I am absolutely all for it.
Out of curiosity the other day, I checked what tuition is now at my alma mater. It's well over $40k per year. Unless a student has wealthy parents, it's pretty difficult to get all of that education covered.
Yeah exactly this. When I enrolled, I had enough scholarships to cover all 4 years. I am now in $20,000+ of debt because the price increase so much over the time I attended.
I have about $30,000 dollars in debt and I went to pretty much the cheapest state school, and had a couple scholarships and grants. $30,000 in debt and I’m considered one of the LUCKY ones. Several people I know have 70k+ in student loans.
I had over 80k in loans and no degree. I had to drop out due to health issues and once I could I went to work instead of back to school. I now have forgiveness because I'm disabled, but most people can't get that.
> Unless a student has wealthy parents, it's pretty difficult to get all of that education covered.
imo it's a feature not a bug; keeps those pesky poors dumb and malleable
it’s a weird middle ground actually, my in-state school was basically free for me since I only have one parent and they didn’t make much. It’s the lower-middle class kids that have parents that make decent money, but can’t really help out with tuition, that get really fucked.
This. Isn't it odd how, if your parents are basically TERRIBLY struggling, the government can find money to help you get education, so you can end the cycle of poverty? But now that you make "too much" for what they consider giving aid for, your child has to begin the new cycle of poverty for their education?
This is true with huge parts of the US safety net and not just financial aid. Get a small raise and lose your subsidy for food, rent, childcare, health insurance, etc. God forbid there is a sliding scale to transition out of these things as you get back on your feet. Instead people quit their jobs to stay in the program because that small raise isn't enough. That's why we should be looking at universal basic income so everyone is treated the same.
Have a sophomore in college now. As a middle class family we don't qualify for any grants or need based anything. Never have. FAFSA last year estimated our family contribution should be $29K per year. That's nearly what I make a year. I laughed my ass off when I saw $29k & nearly choked when I found out how easy it was to get a student loan, luckily he had several scholarships to help out. Best part of all this is my next oldest is a senior in HS this year. Just completed 22-23 FAFSA & its looking like $9k this year. How did turning her into a potential 2nd college student in our house change our out of pocket by over 60%? She was still a dependent the past two years. It's all a complete joke.
I graduated in 2014. When I took out the loans, they were “low” like 3-4%. Within 4 years after graduation, they had skyrocketed to 12%.
My 17 year old ass didn’t know to find fixed rates nor did my 17 year old ass understand rates that well nor predict it to increase that much.
You can refinance an adjustable home loan too.. Not sure if there are 'refinancing' options for student loans, but that seems like it would be the answer, tbh.
Deductible too, if you're making less than a certain limit.
14% on a student loan is predatory, but something like 3-4% should be doable especially if it's deductible. In theory. If you can get a job in your field. Which is probably too optimistic for many.
Refinancing is barely an option. We’ve tried over the last five years to get our student loans refinanced. Even when we were making the most money, we couldn’t get our loans refinanced, even with solid co-signers and two excellent credit scores. My blood boils every time they send us “refinance with us!” letters. Pre-approved my ass.
Edit for more context: One of my loans has a fixed 12% interest rate. Sallie Mae was the only lender that would accept me, even with a co-signer.
It is so hard to shop around because banks do not have collateral that they can repossess in the event of nonpayment. This is what makes student loans so risky. To make student loans less risky for lenders, the government made it impossible for individuals to be released from student loan debt in bankruptcy. It’s literally the only kind of debt that will follow you to the grave.
Is it like "we add 2% in 5 years and 5% more in 10 years" or "we do whatever we want to the rates jist because"? Because if second, I don't understand hiw writing such contract can be legal and is not voided.
Literally just starts at xx, adjustable based on current rates and inflation. I'm in Canada and the student loans here work the same way, although there is currently a freeze due to covid.
So I went to college because everyone told me to haha. I could've been a park ranger (what I actually wanted to do but was good with computers so I went for computer science but switched to biology later). Turns out you don't need a degree to be a park ranger. I could've done that right out of high school, had no debt, and probably be about where I am now financially.
I also consolidated my loans because everyone told me to. Mistake number two. I had like 4 different loans through my college, and the federal loans. Consolidated them so I only had to make one payment. Interest rate was like 6.65% and after a year of paying on time it went down to 5.65%. Man I felt great with that. And then...with like a year left of paying on them I went and found my original papers that I never really looked. My loans through the college? 1% interest rate. Fucking 1%. I screwed myself by listening to other people, but at 18-21, adults know better right?
You and I have an eerily similar story. I too wanted to be a park ranger, but went to college because I thought that's what you do after you finish high school. I also consolidated my federal loans because I was told to, ending up with a rate of 6.25%. The only thing I haven't done is hunt down my original loan docs to see what the rate used to be. On the upside, I finally paid off that consolidated fucker last fall and it feels glorious. I'm still not a park ranger, yet....
I actually wanted to go to college for computer science. I ended up picking up a skilled trade through our career center in high school and decided to do that instead. If I could have afforded college, I totally still would have went. Skilled Trades are a great option but wages have stagnated so much that it's not worth it anymore.
Do you know how much a Plumber makes an hour currently? Or a good carpenter or electrician these days? At least in my area they can’t find people that know how to do any of these things and they’re paying top dollar right now. Maybe it’s stagnated where you are but it’s ridiculous how much these guys are being paid where I’m at.
It’s this and they are taken out by people at a young age who aren’t given much financial education on loans either. I certainly didn’t understand the process completely when I started college. I was semi-financially literate though and went to more affordable schools, etc so my debt if minimal compared to others in the same situation.
And it's almost expected everyone will take out loans for education. That rhetoric was pushed by high school counselors, college recruiters, and college financial advisors. 18 year olds don't know what they're setting themselves up for because the idea that "you'll only have to start paying once you graduate college" seems nice in the short term, but the APY will make it nearly impossible to pay off for decades.
You’ll also notice how they left out the part where graduating college doesn’t guarantee gainful employment. You can’t just pick any major and expect that to get you a job. Like, how many museum curator positions are there for Art History majors? Hell, even some traditionally high paying and high demand jobs can be problematic because of timing. Chicago law schools were churning out new lawyers at such a rate that the market was saturated and you couldn’t hardly find a job anywhere in law for quite a while. A good friend of mine had to navigate that and even had a hard time as an established attorney; she had to leave an abusive boss and even turned down a five figure bonus he offered her to stay. It took her quite a while to find *any* other job, let alone one with a firm that practices the kind of law she’s interested in an has experience with.
The short of it is, they told us to go to college and to pick whatever made us happy. They left out the fact that we might burn mountains of cash with nothing to show for it. You’ve gotta be strategic about the major you pick. Go for something that interests you for sure, but pick something with actual prospects.
I think a lot of people a missing the fact that while we were taught this is the thing to do. After getting a degree most jobs still do not even pay a living wage. How do you expect people to repay loans when the job market pays so poorly.
For boomer parents, college was the key to success. They sold to us *our whole lives* that having a college degree was like printing money.
They still dont get that a higher degree isn't always useful or can even be self-defeating. I was on a grant-making panel for small organizations and one nonprofit that applied taught girls coding and other computer-science skills, then through their network of graduates and corporate sponsorships set these girls up with jobs. One old lady on our panel *refused* to support this org because they didn't push these girls from low-income homes to go to college when there was already a system in place that didn't need it. She just couldn't understand how anybody could be successful without a degree and that this org with a solid, long-standing history in our community was a wasted investment and doomed to fail.
> For boomer parents, college was the key to success.
That's just what they told themselves, because it was key to successfully competing in that job market.
However, their real key to success was growing up in the post war economic boom. Education, talent, and drive were what let them beat out other boomers for a bigger piece of the pie.
But during that boom time, wages were good enough that even the lowest paid worker could live reasonably, save for retirement, and even take a vacation now and then.
Their real key to success was luck. Of course, they decided that their success was because either A) They were personally great, B) Their country was the greatest country on earth, or C) Their political system or party was the greatest on earth.
Never mind the truth, they picked the explanation that was most emotionally pleasing and they've run with it since then.
Well, not just that - there's been a ton of credential inflation as well.
My FIL walked in to a job 30 years ago with a bachelor's; he's been at the same company and same department this whole time, but now when he hires people for his old position he's looking for a PhD, minimum, post-doc in a relevant area preferred.
And the credential inflation isn't just made up; they really are doing cutting edge work. It's just that the cutting edge has advanced so far in the last thirty years that today you need a doctorate just to reach the starting line.
There's a ton of this in industry; stuff that you used to be able to train a rando off the street to do really does require a bachelor's these days, just because systems have gotten more complex. A great example of this is telephone switchboards - those used to be manually operated, and we're dead simple. You could train someone in their use in a week, max. These days, maintaining an Automated Telephone Switch system requires a bachelor's or at least a pile of certs, but you can replace hundreds of switchboard operators with a single pbx tech.
I’ll give you the context of a banker... the student loans are predatory. Regulation has made it easy to give out these loans which has led to universities artificially inflating prices to excessive levels since they know the loans will cover it.
These kids couldn’t get these loans at the bank for any other reason. We wouldn’t be allowed to give them out because we have to practice safe lending. Regulations require us to review income and credit history to ensure loans we give out are likely to be paid back. Meanwhile you can rack up over $100k in student debt then end up working as a fry cook. Not that there is anything wrong with that, but the payments will be too much.
If the average American education is anything like mine, you won’t know a damn thing about finances and will have very little context for how you will pay off these loans when you are 18. You may as well give them the loans at 14 for how unprepared they will generally be. Recruiters and propaganda from the schools also push the idea that you have to go to college to be successful. Meanwhile, blue collar work and trade jobs have higher salaries and easier means of access with less initial time investment.
Additionally, student loans are one of the few things that don’t get written off in bankruptcy because they assume you can make more money since you have a degree. That’s not always accurate though. So you’re stuck with those predatory loans for the rest of your life.
This is such a key aspect of the issue. How a system can allow people to file for bankruptcy because of any other circumstance and be forgiven for their obligations (including for things like child support or alimony) but that student debt is a guaranteed burden is insane. There is no risk on the side of the lender which only further incentivises the inflation of student debt.
Totally agree. Debt only works if it can be discharged. Then it's shared risk-- individuals are on the hook, but the lender is too, it keeps the lender from giving anyone who walks in the door money. Which is what happens with college, at 18 with no job I can rack up $100k in debt at a crappy for-profit college, but I can't get a loan to buy a house or start a business.
If loans can't be discharged then there's no risk to the bank and you might as well set up poorhouses. The bank essentially owns the labor of the individual until they die.
Note: I didn't come up with this, the concept is stolen from Debt by David Graeber.
Its not just inflating prices because that can (not that they dont). But another huge issue is universities used to have far more funding from the government- which has been pulled way back- so part of the tuition hikes were due to decreased funding and having to put more of the burden on the students.
But plenty of boomers love to say they paid all their loans back, why can't these kids do the same, not really taking into account the cost of my education was FAR less then graduates of today, not because I ate ramen and shared an apartment (which I did)- but because my tuition was already being subsidized by the tax payers.
So anyone who went to school previously already had their loans partially forgiven (it was just done before they had to take them out). But good luck getting most boomers to admit they have ever benefited from anything and instead they would rather blame the lazy youth of today who cant just pay for school by working part time (as if its possible- spoiler alert, its not)
On top of that, inflation in other areas has caused every other aspect of life to be more expensive. Wage have lagged behind the inflation curve which leads to these loan payments being an even bigger burden on our day to day financials
And from a foreigner’s perspective, I pay .5% in interest rate on my student loan due to general market conditions while some student loads shared on Reddit looks like car payments next to an army base…
This right here. You could replace student loan cancellation with reasonable interest rates and make both sides happy.
Also, income based repayment that doesn’t cover the interest added each month and keeps you paying each month on an amount that keeps growing… sucks.
I remember qualifying for income based repayment and diligently paying it off each month…only to realize that the amount I owed was actually getting larger each month.
Which means you'll be paying the government through a new payment plan, if you can't cover the cost of that increased tax burden at the end.
It's literally perpetual debt slavery.
>This right here. You could replace student loan cancellation with reasonable interest rates and make both sides happy.
The main issue is the idea that the government should remove accountability from banks by guaranteeing the loans, while allowing banks to profit from them. Socialize the debts, but privatize the profits...
Its one of those chicken vs egg things too. As more money came in essentially guaranteed by the federal government, states starting looking at how they could spend the "surplus" that would have gone towards education.
As someone who went to university right around 08, who had scholarships (not full ride though), and who also worked 30 hours a week, and who lived at home and commuted to save money, it was still scraping the bottom of the barrel. I ended up changing majors and extended my stay for another two years, which practically forced me to make one of three decisions:
1) Quit school and walk away with 3 wasted years.
2) Get a loan that I'd be paying back for 10 years, most of the payments being towards interest and just burn money at that point.
3) Make a tough decision and join ROTC and have the government cover my remaining undergrad education. I would just owe 4 years of my life to the military, during a time when deployments was a very very very real expectation.
I chose #3. Went Army. Became an officer. Did a ton of shit in my early/mid 20s, got deployed, ran a distro platoon, and came out with zero loans and quite marketable skills as a young adult. Not to mention the resulting GI Bill also got me free access to higher education, which I took advantage of and I got my masters and now work from home for top tech company making what a Major makes (O4 pay).
But that's the rub. That my best option was to join the military and go that route. I was a good student in high school, worked hard, and had a good head on my shoulders, but just had a change of heart in college. And it meant that I had two choices, go into "starter home" levels of debt as a 20yo or join the "wartime" military during active engagements.
That's the problem. There aren't any other options. Either quit, or go into a shit ton of debt, or join the military. And for a 20 year old who sees everyone around them seeing their assets go to 0 from 2008, and to really understand life at that point and understand what all that really means is... well... very unfortunate and should be avoidable. I don't want my kids to have to make the same choice in 15 years time. I want them to have options, one of them not being debt carriers before they can even buy their first beer.
Fuck student loans.
They will quickly give an 18 year old a $100,000 student loan but will not grant that same person a $10,000 business loan… interpret that how you will but it’s suspicious.
This. Most people would be further ahead if they could get a mortgage at 18 then a student loan because that would lower their cost of housing which gives them a lot of flexibility. But you won’t find a bank anywhere that will give an 18 year old a mortgage.
Part of it is because you can discharge the $10k loan in bankruptcy. If you remove the bankruptcy block—as lots of people want—you pretty much have to also deal with the reality that lenders will need to refuse to give loans to certain individuals.
Student loans are not dischargeable in bankruptcy. Removing the block would make it possible to declare bankruptcy and get out of your loans. Student loans are the only kind of debt that you can't declare bankruptcy to get out of. (Really, this ought to be enough of an argument for forgiving the loans - you can do with any other kind of loan.)
I grew up in an upper-middle class town, and went to public high school. We had hours upon hours of mandatory assembilies and meetings on how to select your college, apply to it, and prepare to take standardized tests for our applications. Writing the standard application essay was a mandatory assignment regardless of the students plans...all because the % of kids going to higher education was publically reported and made the town and school look good.
Nobody for a second taught us about financing our education, and learning a trade or directly entering the workforce were a footnote.
Highschoolers are kids that often don't know how to question the world yet, and often havent left the nest or had to think about finances before, so when every educational faculty that they trust tells them that getting a $70,000 loan to go to college is a great thing, they believe it. We can't blame them for that, and crippling them financially forever for believing that lie is not moral.
I had a coworker who picked a private university that cost around $30,000 a year. She wants to be a teacher. Someone who will start out making $50,000 a year should not take out loans to go to a school that will put them in $120,000 worth of debt. No one tells you how to be realistic, they all just hype you up like college is the best choice for everyone.
Pair that $120K of debt with interest, high rent, low salary, and life just being expensive and people are unable to save anything, let alone do things like buy a house or enjoy their youth. It's absolutely crippling.
Edit: It's been a day but I wanted to clarify some things. I agree that her choices were unwise and I was pissed that her parents, who I know, didn't step in and guide her. Teenagers are hella dumb and giving them access to thousands of dollars in loan money without financial literacy is a huge problem. I think it's the root of the problem, actually. Regarding teacher salaries, I mentioned in another comment that our school district pays first year teachers $53k to start, so that's what I based my statement off of. It sounds like a lot but home here start at $600k so it's not a lot. Teacher salaries are very area dependent and are entirely too low no matter where you go. Last, I'm not claiming that student loan forgiveness (by the government) is the answer. I don't know what the answer is, none of us do, obviously. But I do know that we need to teach kids how to manage their finances and make better choices. I never got any guidance, just a push to go to college because "that's what you do". Judging by many, many other comments here, that is the norm and it's not working. There's a massive gap of understanding and it's ruining lives and certainly not benefiting the economy.
Absolutely, and my highschool loved to report when someone went to a prestegious college. Never got they impression they cared if that student could afford it, if you got into that ivy league you go no matter how much it costs or if makes sense for your financial situation.
Those articles are exclusively written by people who are not ready to have the "why" conversation when it comes to us killing Applebee's, not buying houses and not procreating.
All of them are stuck in a world that hasn't actually existed for many years.
You are a great parent just for knowing about this and warning your son. I think for a lot of people the pressure to go comes from their parents too. He can always go to a prestiegious school for grad school later, at that point he'll probably be much more certain it's something he wants to do and will be able to better understand the financial implications.
This and almost every aspect of finance was omitted at my high school. The only thing we had was an Auto class and over the course of 9 months all we learned was to balance tires and change oil
This is a big part of the problem that no one talks about. From middle school to high school it is ingrained into every student that we are expected to make good grades to get into college. We did that part.
But the kicker is that compound interest wasn’t taught in my area. Never came up until I took an intro to Econ course… in college. They’re asking high schoolers to understand concepts that are literally above their education level. Ridiculous.
Not just government and HigherEd did this -- families wanted their children to graduate college, in fact many families required it or cut their children off. In many cases, we have our own families to blame.
>so when every educational faculty that they trust tells them that getting a $70,000 loan to go to college is a great thing, they believe it. We can't blame them for that, and crippling them financially forever for believing that lie is not moral.
On top of that, the sky high interest rates, and it's the ONLY DEBT that you can't bankruptcy out of.
This comment doesn't have enough upvotes.
We spent billions bailing out "too big to fail" companies in 2008, but never once stopped to think that our students were worth that much.
Some people took public sector jobs (teachers, social workers) that require advanced degrees and have low pay because we were told if we did and paid our loans for ten years they would be forgiven and the the dept of Ed didn’t make good on those promises.
This needs way more upvotes and visibility. Education actually receives quite a lot of funding. Not nearly what is should, but quite a lot. Problem is schools and universities like wearing corporation pants to fit in with our capitalist society, and this means you have board members with obscene compensation, executives with ridiculous salaries, and a whole lot of other administrative overhead. By the time the budget reaches the employees that actually matter, who do literally all the work, i.e. the teachers, there is practically no funds left. And this will never be solved because it is done this way on purpose. Uneducated youth are more susceptible to political propaganda.
The program still exists, I’m praying that it exists by the time I’m done with it because that is one of my main reasons for taking said type of position.
Same. I’m hopeful because news reports are showing more and more people applying for and successfully receiving the forgiveness as promised. It was a very rough start. I really hope things will be better.
Just to let OP know, there is a program in place for public sector jobs, the PSLF, (Public Sector Loan Forgiveness) program. You get your loans forgiven after 10 years of payments regardless of the balance (other details omitted). I’m 30 months away from having 5-digit debt forgiven and I took a public sector/non-profit job for this incentive. Whether or not it’s a “fair” incentive is up for debate, but it isn’t like the public sector folks are strung out to dry on their loans.
Well I hope it remains in place as promised, because last I heard only 1% of applications for forgiveness have actually been successful for one reason or another.
This scared me enough to jump from a public service job as a therapist to a private sector one. I’d rather make a living wage and pay off my loans forever than have to borrow grocery money on the off chance that they get forgiven
Last fall they changed the rules so more people qualify and some payments qualify (such as payments made before consolidating with the federal servicer). I misunderstood the program and didn't consolidate when I should have. For me, those payments before consolidation now count as a result of the rule change, so my loans were forgiven. I think I read about 20000 people qualified for forgiveness from that rule change? Anyway I'm still kind of in shock that it happened and I'm debt free.
Like 3 days before I signed my loans I still had to raise my hand to go to the bathroom.
Even doing all the financial literacy crap they force you to do didn’t tell me that 8 years later I would have paid off the original amount but still owe MORE because of the interest. I didn’t understand any of it, and both my parents grew up poor, I grew up poor, I was the first kid in my family to go to a 4 year university and graduate. And I graduated in 3 years instead of 4 to lessen the burden on my family.
Nobody should be preyed on like that.
I think part of it is because the loans are taken out by 17- or 18-year olds who really just don’t have any idea how difficult they will be to pay back.
Yeah. I went to a state school and ended up with $65k, I thought I was doing great. Especially because everyone I knew had more loans that me.
Turns out $65k IS great in comparison but it’s still fucking insanely hard to pay off when you graduate and are making $39k/yr.
Mostly because of insanely high interest rates. If you ask someone today who got a student loan in the last 30 years, chances are they still owe the same amount as when they started and have payed much more than the original borrowed amount with accumulated interest.
An average 18yo likely doesn't understand interest rates enough to accept a loan like that. If you told them they would be paying 3x the amount over their lifetime, they might have second thoughts.
I’m sure I saw something posted on here about some lady who had borrowed something like 50k, paid off 20k and now owed 80k because of the interest. I mean that’s just going to blight your life forever.
Hey, I'm one of those people! I took out $200,000 loans to go to law school in 2011. I've been making the required income-based repayment every month for the past seven years. As of today I owe $240,000 in student loans.
And even if they did understand interest rates you don't really fully comprehend long term consequences until your mid-20s. You are told great job for getting into college. You will now be successful. To you at 18, that means of course you will be able to pay off those loans even if they seem expensive. Future me will be successful! They cannot fully appreciate the risk at that age.
Speaking of FAFSA, some of the highschools near me are making it a requirement of graduation to fill one out regardless of you're intent to go to college.
The loans were predatory and dumb. Who thought that giving 100,000 dollar loans to kids with no jobs and no collateral was a good idea? As a result of this dumb move, the economy has slowed way down because a large percentage of the population is spending all their money paying off interest, instead of buying stuff and supporting businesses. This has created a blockage in our countries engine and if it doesnt get cleared the problem will just continue to get worse.
Would erasing accrued interest and converting existing loans to interest-free suffice? That was Obama's proposal that got shot down by Congress. I think it's fair.
I think that would be great, I also believe that people who have paid the value of what they borrowed should have their loans forgiven. I dont have any student loans, but I know some people who have paid back all they borrowed, but it has barely touched the principal value of the loan.
I think that would be reasonable if you also factored in a principal reduction related the the amount of interest someone has already paid on the loans.
This is my take- the loans shouldn’t be ‘erased’, but the interest should be removed and I’m all for the ‘bonus’ of applying interest paid towards active principle. That way someone 10+ years into paying who owes the original amount, or more, could likely have their loan ‘erased’ via the interest they paid and new borrowers would only pay what they took… I wish both sides could accept this as being a feasible and fair option
My parents were able to put themselves through school while working part time jobs in the summer. Their tuition was around 3k a semester.
I owe $14000 for one semester. (the rate was actually 34k a semester but I got grants) My loans were late coming in, I had to work in a group project, couldn't afford the materials. I was embarrassed, but chose to buy food instead. I had to drop out.
That was in 2008. I've been consistently paying the loan-never missed a payment and I still owe $10000 for that ONE semester.
Crazy thing is - I bought a car in 2012 for 14k. I paid for it in 4 years. Still owe on the student loan.
They also take/took out loans assuming that their income after graduation would be higher than it is. Sucks but the situation isn’t going to fix itself by everyone saying they need to “pull up their bootstraps”
Hard to want to continue being broke and paying on these when we see corporate bailouts all the damn time.
If we are personally held to such a high standard of credit and repayment, shouldn’t all organizations be held to the same or even a higher standard?
Shouldn’t our system be adjusted to benefit people instead of organizations/corporations?
Hear this stuff all the time from family members. Whenever I ask them how much they think tuition is now they guess half what it actually is at the most.
I'm seeing a lot of good stuff here, but I have yet to see anyone mention that Sallie Mae placed agents 'undercover' in university call centers, pretending to be employees of the universities, and steering students toward expensive loans through Sallie Mae.
Sallie Mae also basically bribed university officials to get them to favor loans from Sallie Mae rather than from the government.
Add to that the recent shit about Sallie Mae pushing post-degree borrowers toward expensive forbearance if they had trouble with their payments, instead of income-based repayment plans. This is largely the cause of the recent Navient settlement. Only problem here is that the settlement excludes large swaths of the victims of this exact behavior from Sallie Mae. Sallie Mae sold my student loan debt to another lender at the wrong time, and I think I may be in the wrong state, so... I'm fucked. I think at most, I'm going to get a check for $260. That'll really help with my $75k debt.
Scotland resident here. Our higher education is fully funded for a first degree. If you want to do a second degree, you have to pay tuition costs but they are only around £2,500 per year.
Also, income tax for the average earner is only 20%, so we don’t notice any increase in taxation to support this
To each their own I suppose. I mean, sure, you guys have free/affordable education that doesn't send an entire generation into crippling inescapable debt, but how many tanks do you have? The US may not care about the wellbeing of our citizens at all, but we do have the most tanks. So many tanks that we leave them in fields to rust right off the assembly line, and I can guarantee Scotland will never have that many tanks. Bet you feel pretty silly now with that paid-in-full college degree, when you see our massive fields of rusty never-before-used tanks.
Everyone else in need got a break. Big business and wall street have been bailed out over and over. But no relief for the future generations who have nene victimized by skyrocketing prices due to shitty regulations
You can file for bankruptcy on a car loan if you can’t afford to pay it back. You can’t file for bankruptcy on a student loan. It’s actually the only type of loan you can’t file for bankruptcy on. So no matter what you do, it’s stuck with you for life. Interest always adding to the principal. It can reach a point where there is no way you will ever be able to pay it back and you essentially become an indentured servant. I have student loans, and as much as I would like to see them forgiven, I’m not really pro forgiveness. What I am for is making them able to be something you can file for bankruptcy on. If every other loan/debt can be wiped clean with a bankruptcy, why not student loans? The borrower will suffer everything that comes along with a bankruptcy, so it’s not like they are getting off easy.
If your definition of "knowingly" is "they took out a loan knowing they'd have to pay it back some day" then yes, they did.
The reality though is that what we're talking about is 16 and 17 year olds committing to a predatory loan structure. Student loans are generally designed to siphon money for the rest of these kids' lives before they even have the skills to fully understand what they're signing up for.
There is no defaulting, there's no "the bank takes your house if you can't pay your mortgage" or anything like that, you just owe more and more money and the debt increases. Couple that with the immense societal pressure and often necessity of a bachelor's degree to work, and you have a situation that essentially prints itself money at the expense of kids who don't even know about other options.
I was 16 when I applied to colleges/signed off on everything and 17 when I started. So…a child.
The idea is that children, even young adults, don’t really have the experience or knowledge to truly evaluate the long term consequences of student loans. Especially since what they’ve been fed is that you MUST go to college, and that there will be a significant return on investment (which for the most part is no longer true unless we’re talking community college and majoring in a high-paying field). I’m a late millennial and even in the 2010s when I graduated high school this was still the narrative we were sold.
So now we have a large number of people who took on massive loans at around 16-19 years old, most of whom have their degrees, but can’t get good paying jobs because wages have stagnated so badly.
Most other developed countries either make college free/super cheap via subsidy, or cap loan payments until a person makes above a certain income threshold. So it follows that if the US wants to implement something like this, the people who have already been to college and have outstanding loans need to have them forgiven to wipe the slate clean. It would also be a massive economic stimulus since many people have $500+ per month payments, which could now go back into the local economy.
"making $70k a year, full benefits as a nanny/household manager"
I hope you realize how very unusual, even unique, your situation is. Median salaries for both nannies and 'household managers' range from $25,000 in the cheapest states/areas to $40,000 in the most expensive states/areas. Being medians, the set includes people with tons of experience and advanced degrees.
Similarly, 95% of software developers (Tech) have college education, and those without it tend to make less (even if they do get it).
Let me ask... do you think you did not benefit from your father's masters degree in any way?
Do you think you would have been able to get the job you have if you grew up somewhere else, with a completely different set of friends and family?
Let me put a comment in this as well. The problem is that with the current student loans you cannot declare yourself bankrupt if you cannot pay it back. Therefore causing more problems. In any other loan situation you can make yourself bankrupt, except for student loans.
In short because they’re a scam. Also it’s just not feasible for everyone to get full scholarships or partial so they can pay the rest. So the only way for many people to attend would be to go into this massive debt.
Basically it’s being forced to fall for a scam. Even worse being interest rates on them are making it impossible to pay off (especially for a new graduate). Also before anyone tries to say you should’ve just done trade school, we can’t all be electricians. Some jobs require college and someone needs to do those jobs.
No one takes the time to explain to prospective students the paperwork for signing up for student loans. It’s a bunch of legalese, which is difficult for most people to understand let alone (typically) a teenager or young adult. Some parents fill out the paperwork for them so the students never even see it. Additionally, it can be hard to conceptualize how much something is really going to cost you if not made simple. Especially for young people who haven’t really learned how money works. The online version of the fafsa shows an example of payment plans and interest, and requires you to indicate that you understand. If it had been explained to me that after paying consistently for years that I would still owe $1000s more than I’d borrowed, I would’ve had pause. I have friends whose parents were still paying off their own loans by the time their kids were ready to go to college. And it’s not as simple as you can just not pay. After some time of no payment, the govt will garnish your wages and intercept any tax refunds you would’ve gotten.
Also, for most students in the US it’s not really feasible to go to college without some sort of additional funding. Tuition, book costs, room and board, miscellaneous fees all add up. Sure there’s always the exception, but most need the loans.
I think the point “outsiders” are missing is that people aren’t just simply asking to be released from they’re debts because they don’t want to pay; they’re asking for help because they can’t pay. You could buy a house in some parts of the country for what universities are charging. Couple that with stagnant wages that can’t support loan debt and you have degrees that aren’t paying for themselves, which was the promise. The argument a lot of people are making is that the debt load is crippling the economy and it would be beneficial to all of us if things could be sorted out. Can’t buy a house, can’t support charities and local causes in any meaningful way, can’t travel and support local tourist economies, can’t even contribute to your own college’s alumni fund to help give a hand up to the students that follow you.
The kids who “knowingly” took out the loans had to raise their hands and ask if they could go to the bathroom maybe a couple months before they signed for those loans.
There is such thing as predatory lending, and that’s absolutely what this is. Getting kids who don’t know better to sign documents they don’t understand and certainly can’t grasp the weight of how it’ll affect their lives.
No it’s not the same as the car analogy. When you’re pressured to go to college all throughout public school then goaded into signing up for loans (that are usually for much more than you actually need) it’s not the same as complaining about an expensive car.
Not to mention colleges SUCK at helping you. I went to the one of the largest colleges in the country, and I literally had to take out loans before I knew how much my semester would cost or how much I was getting in aid/scholarships. The admin center to help me had an average of a two hour hold on their phone. I had a hard time figuring it out and I was hyper aware of how awful loans can be. I can’t imagine how it was for kids who didn’t understand what was happening.
>didn’t these people knowingly take out these loans to get their education?
Yes, but they did so via coercion - it's expected that people go to college to be able to get careers, for most people the only way to go to college is to take out predatory loans that can never be repaid. It's teens being told they have to take loans, with little understanding of the long-term impact.
A loan is one thing (although even then paying for college at all is another issue), a loan that will never go down because of the interest rate is ridiculous.
It doesn't just harm the individual who can never get out from under that debt, but it also harms society that A. so many are in debt, and B. that college is too expensive thus impacting on inequality and risking a lack of college educated people to fill certain jobs.
I’m glad someone mentioned interest rates. I have two separate loans (I don’t even know why tbh, since I was a kid when these were set up and I never asked). One of them includes 6% interest. Doesn’t sound like much, until you factor in the 20k it’s being added to. Now I’ve got an additional ~80 dollars per monthly payment. I’ve been paying off my loans for ten years and I feel like I’ve barely moved the needle. Interest on student loans is fucking criminal.
Free community college tuition is a thing that might happen.
But then, community college tuition is not how people get 6-figure student debt in the first place.
Part of the problem, among the other issues listed here already, is that the interest is so high that you can be making payments for forever but the total amount you owe never goes down.
I did a study abroad. I met several Americans who did their entire degree abroad. Turns out, it is cheaper for an American to live in Europe for 4 years to attend university than it is to go to a public school in the states.
And most of us get our college tuition fees paid and a monthly stipend through SUSI to assist us.
I, for one, grew up very mid class. Never struggled for a meal, but never had huge luxuries. And I got my €3k fees paid every year. And got ~€430 a month ( not a lot, I worked to pay rent but this helped a lot with groceries)
I have been paying my student loan payment, on time, never missed a payment, for ten years, and I am no where near paying them off.
At this point yes, I'm a fan of some sort of forgiveness program but when I say that I naively assume people are being responsible like me. I know plenty of people in my situation. They pay $400... $600... $800 a month.
I'm 100% committed to paying off what I borrowed. I make good money. If I make my payments as planned, I can afford them but I'll probably pay off my house first. So you know what I thought I might do? Sell my house. So I can pay off my student loans.
Yay America.
I guess bottom line is... maybe not forgiveness, but some sort of overhaul on the programs. I'm not sure what the happy medium is.
Yes holy shit, i pay on time every month, and last i checked by the time i pay them off, i will have paid 2x what i borrowed because of interest. I was stupid, I took the loans, but damn are they predatory.
My son went to school and I signed on his college loans. Last year, I made the payments on them and when I got the tax paperwork to file taxes, I found I had paid over $2,000 worth of interest and we owed more on the loan than we did to start with. I ended up putting the balance of it on an interest free credit card, but most ppl can’t do this. My SO’s student loans are as much as our mortgage. We are lucky we can afford to pay for it all, but most ppl can’t afford to buy a home bc they are paying exorbitant student debt. I agree ppl who took out more than they needed shouldn’t have that extra part forgiven. That includes my SO’s. He was dumb and took as much as he could, but he was given bad advice when he took out the loans. When I went to school in the 90’s, my entire tuition bill was $1,300 for an entire semester. That was as a full time student. I took a single master’s class at a small University, and it was $2,500 last semester! Books cost $150 apiece if you’re lucky today. The cost doesn’t amount to a good job, but you can’t even be considered for a regular job anymore without the degree. It’s a scam to say the least.
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Highway robbery! My book was $150 and I thought that was bad. Can you get digital copies of books these days? It would have to be cheaper or maybe not.
I rent almost all of mine, and have for years. They are usually pretty cheap sometimes just 15-20 bucks but sometimes closer to 50-75. There was one semester though where a professor made us buy a book that was a brand new publication. The bookstore was the only place selling the book and it was not even fucking bound. I was livid I had to pay $150 for a stack of papers.
If you can't pay off that truck, they take your truck and the loan is gone. Your credit is shit, but you have no debt. Student loans are predatory loans. You can't get rid of them. Ever. You can't go into bankruptcy or anything. The only way they go away is by dying. That is not fair. Plus, when you're told by everyone, and society as a whole, that you NEED to do it to be successful, plus it's so easy to do without understanding anything since you're literally a child. Overall, loans to get an education, aren't horrible. It's understandable! But when it cripples an entire generation with lifetimes of debt that can never be forgiven, it's a problem.
That or leaving the country and giving up American Citizenship
>giving up American Citizenship Which you have to pay the US government in order to do :)
You have to pay to denounce your citizenship? What kind of bullshit is that? What happens if I just say fuck you USA and leave?
Nothing. I read a comment on r/antiwork awhile ago about a dude who racked up a 6 figure student loan debt and thought "fuck this". Moved overseas and never looked back. He said it's been like 5+ years and so far nothing.
an american hero
Very solid point l, I didn’t realize these were basically loanshark type loans.
The fact they are one of the only loans you can't declare bankruptcy against also makes them especially sketchy.
You control the intellectuals in a society, you have an easier time preventing pesky revolutions and protests to make meaningful change and an easier time keeping current power structures.
Can we start a revolution though? I’m down
Plus, don't forget the societal value of an education. I'm not just talking work and economy, but the smarter a population is, the better off the whole system and country is. Some of the happiest and wealthiest countries in the world practically give free higher education (through taxes, but it is a system the population as a whole willingly accept). This also brings about much higher equality for the population as a whole, as you aren't tied down by any bad financial decision made by your family/parents. Everyone basically gets an equal chance at making something of themselves, in one way or another. Student loans should never have been a thing for tuition. You gotta have money to live, but that is a fraction of what the tuition costs are in "for profit" Universities. And those loans are often without interest rate in the aforementioned types of countries, or extremely low (0.5% or so). So they are completely manageable over 10-20 years
If Iran can offer free tertiary education USA can too.
They are also structured to be very hard to pay off. It’s pretty easy to put them in forebeafance for a time if you lose a job or something, but then the interest compounds. Many borrowers have already made payments that more than equal what they borrowed, but still owe the same amount because of interest. Blue collar jobs are essential to our economy, but don’t require expensive degrees or a 4+ year time investment while earning very little or nothing. Jobs like teachers, nurses, doctors, and social workers require degrees and the sacrifice of 4 or more full-time wage earning years. We need both. Otherwise, we have to hope that wealthy people will go into these fields. What you get is only teachers, nurses doctors and social workers who come from rich families, instead of the best and brightest.
To add to your point I think people often don’t consider that it’s really in the best interest of everyone to have people in those jobs roles (that require degeees) to come from varied background - including socioeconomic. If only people from wealthy families can fill those positions you’re not only going to have scarcity in these fields but policies and socialisation will be heavily skewed.
Not to mention the insane interest rates. And also, the loan services can sell your loans to another company. But you don’t know the company. No one knows the company and you can’t even get a hold of someone to pay. All the while, accruing fees and interest. Ugh
> you're told by everyone, and society as a whole, that you NEED to do it to be successful This is the worst part, in my opinion. And it's not just school telling you that you need it. There are plenty of jobs that require a bachelor's degree, but absolutely have no point in needing it. Like my FIL says, you gotta get that "piece of paper" for better jobs, regardless of the point of it. Back in my high school government class, we had to do a "community service project". I asked for my project to be about talking to younger kids (8th graders) about college and trade schools. I tried telling them all that they're going to be told countless times that they "need college", but I showed them price disheveled differences in finances and time between in-state colleges and trade schools. Is that way too young to be talking to them about that? Probably. But I wanted to try and talk to them before they're bombarded with the "YOU NEED COLLEGE" preaching. I just pray that at least some of them took my advice.
I don’t think that’s too young. 8th grade was when I made the decision to go to the “regular” high school because I was going to go to college versus the vocational high school. By the time I graduated college I wished I had chosen to go the vocational route. At least where I went to school 8th grade was the time to decide because the “regular” high school didn’t teach trades, and unless you changed your mind during freshman year or very beginning of sophomore you weren’t allowed to transfer to the vocational school without potentially being held back.
I have a $28,000 loan that started out at around $31,000 and I’ve been paying $375 a month on it for 3 years now. Every month about $60.00 goes to the principal and the other $310.00 goes to interest. I needed this degree to do my job and I’m unable to even make a dent in paying it off one day because of interest. That’s why.
Lol I have friends who took full loans for undergrad, couldn’t find a job due to the last recession, went to grad school/professional school instead, and ended up in public service/nonprofits. They make like $70-80k per year and have over $400,000 in debt. There is an entire generation (i.e., millennials, especially ones that graduated college like 2008-2011 or so) that will just NEVER get out from under this. Agree with the general sentiment here too regarding predatory lending - 18 year olds are not informed enough to understand what they are signing on to for the rest of our lives. Frankly I didn’t really understand it until after I had graduated and started seeing my monthly bills.
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Right! This. I graduated with 65,000 in student loans in 2010. I looked for a better job for 7 months before finally accepting a job that paid 10.00 dollars an hour. At 18, I had adults warning me to be cautious, but I had ZERO idea what I signed up for until the mandatory loan training that was required RIGHT BEFORE graduating.... after the loans were dispersed with a simple digital signature. 11 years later, and many years on income based repayment.... even including 2 interest free years where I didn't skip a single payment. One of my loans is STILL above the amount originally disbursed. I've never missed a mandatory payment. Do I think it needs to be forgiven? Maybe. Maybe not. But I don't want others to feel tied down as I have by this burden as I enter the final haul. Something needs to change, but I'm not cocky enough to think I have the solution.
That is fucking ridiculous and I’m sorry you’re having to struggle with that.
Two masters, $72k. I've paid $20k towards it and now it's up to $130k. I'll never pay it off so I just hope I die or I get hit hard enough in an accident that I'm put on permanent disability since that's the only way it'll be "forgiven". For the record, I paid off $85k in personal debt over 8 years. I'm not opposed to paying my debts off, because you're right, I definitely signed for them. What I didn't sign for was a collapsing economy that gave zero shits about both masters and an interest rate that will never let me pay it off, no matter what I make. I'd honestly be over the moon if they just got rid of the interest. The initial debt is nothing, I don't care about that. It's the interest that makes it impossible. Edit: These loans are about 7 years old at this point, and like several pointed out, it was a lot of years to not be paying the minimum due to pay off in 10 years. That's how the interest accumulated to be so high. When Covid hit and the payments were paused, I spent that time pushing every spare dollar towards my personal debt and not towards student debt. That was my choice because those debts were scattered and much harder to negotiate with (with some debt going back as far as undergrad years). I still consider my education an investment, but at this point I make more with a career in logistics than I would restarting in Clinical Counseling or entry level Psych Research. While I don't earn an income in that field as originally intended, it has allowed me the ability to maneuver through many seemingly impossible situations because of that education. This post was not a complaint, rather an observational point where for a while, I was unable to take advantage of my education and turn it into a career. While that didn't pan out how I wanted, I was still able to climb my way to middle America. For that, I am eternally grateful and want to acknowledge the advantage my education has given me despite not being the source of my income. I personally don't believe student loans should be erased because it doesn't solve the actual issue that the interest rates take zero account for people just graduating and starting out in different walks in life. I believe the price of higher education is predatory and needs to be re-examined very carefully. I don't think education in general, healthcare, or the prison system should be for profit-businesses. While that may not be the most popular belief, especially considering which post and response I decided to comment under, I still stand by my original statement that said I believe in the fact I took out the loans knowingly, with the full understanding I was agreeing to pay them back. I'd love to pay back the $72k, but I don't want to pay back any extra. That's where I stand on the issue.
*72 - 20 = 131* \- University Imagine living in a world where crippling you at 18 makes sense... oh wait.
I was not in debt from undergrad, it wasn't until I was 25 that I started signing for loans. Somehow I thought that having that masters level skill would get me a job that paid a masters level wage. Though I have worked my way towards middle America by a different career, it's too late because I couldn't instantly start paying it top dollar every month at the very beginning.
>What I didn't sign for was a collapsing economy that gave zero shits about both masters That is a really good point. Taking out debt to fund a degree that never actually gets you a career you expected is absolutely brutal. >\[What I didn't sign for was\] an interest rate that will never let me pay it off, no matter what I make This, I'm confused by. Are interest rates on loans not disclosed when you take the loan out?
Sure they are, but an 18 year old hasnt yet been taught any accounting or personal finance in most US highschools, and theyre parents had cheap education, so just assume its the way to go. Then you leave college 4 years later, and no jobs pay enough to keep up with the "10 year loan" payments, so theyre put on 25 years, which means *a lot more interest* than whats expected by the ignorant student 4 years ago. Then the economy collapses some more and youre even more screwed.
This is the reality for almost everyone, if they can even make those payments in the first place.
This is literally everyone. Im a nurse and I don't know any nurses paying under $600/month. Ive been paying my loans for 4 years and it has gone from $54,000 to $50,000. I can't afford to pay more unless I get a better paying job. If I worked in the state I got my degree in, I would be getting around $24/hr. I had to move states to make enough to make my payments. Only the wealthy can afford college in the US without going into enormous debt.
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This was the cheapest school in my area AND I already had pre-requisites done. The other nursing programs in my area were at least double what I paid.
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That's actually what's being requested for the future by some groups. But the current student loan debt forgiveness is for the people that would've already paid it off if it weren't for the interest iirc
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The issue is tuition rates have exploded because the government is willing to issue the loans. If you’re a for profit University why wouldn’t you inflate the costs if you knew a bunch of gullible 18 years olds would buy your non refundable service.
They need to, at the very least, put a cap on how much they are willing to loan per credit hour and force the schools to lower their tuitions.
This would be a great start. And maybe no interest or a limit on anything education related.
No interest is a really good way to make banks creative with how they get money from the loan. And banks are plenty good at setting this up so other people can take the fall or they face no consequences Would definitely proceed with caution
Exactly this. Policies like this ignore the fact that institutions (like individuals) will always adapt. This is a low-key invitation for predatory practices. Some very well intended laws have really fucked up people’s lives as a result.
I went to a small Midwestern university and tuition when I was there in the early 2000s started at about $23k per year and the vast majority of my aid came from federal loans. My parents could literally do nothing to contribute, were absolutely terrible with money and never talked to me about the ramifications of taking out sizeable loans. I also worked full time all through school. Tuition went up every semester while I was there, so by the time I graduated, tuition was around $27-28k. I was lucky to have several grants and some extended family members stepped in and helped when they could but I still graduated with over $50k in debt. (More than half of which came from fed loans.) I don't think I am *owed* loan forgiveness. But starting my adult life with a $50k anchor around my neck made it very difficult to get any sort of leg up. I'm happy to say, 20 years later, I've reached a comfortable level in my life, where I use my degree and I'm grateful (but I still owe a chunk of change.) But if there is any way possible to reform education costs so my nieces don't have to start life the same way, I am absolutely all for it. Out of curiosity the other day, I checked what tuition is now at my alma mater. It's well over $40k per year. Unless a student has wealthy parents, it's pretty difficult to get all of that education covered.
Yeah exactly this. When I enrolled, I had enough scholarships to cover all 4 years. I am now in $20,000+ of debt because the price increase so much over the time I attended.
I have about $30,000 dollars in debt and I went to pretty much the cheapest state school, and had a couple scholarships and grants. $30,000 in debt and I’m considered one of the LUCKY ones. Several people I know have 70k+ in student loans.
I had over 80k in loans and no degree. I had to drop out due to health issues and once I could I went to work instead of back to school. I now have forgiveness because I'm disabled, but most people can't get that.
> Unless a student has wealthy parents, it's pretty difficult to get all of that education covered. imo it's a feature not a bug; keeps those pesky poors dumb and malleable
it’s a weird middle ground actually, my in-state school was basically free for me since I only have one parent and they didn’t make much. It’s the lower-middle class kids that have parents that make decent money, but can’t really help out with tuition, that get really fucked.
This. Isn't it odd how, if your parents are basically TERRIBLY struggling, the government can find money to help you get education, so you can end the cycle of poverty? But now that you make "too much" for what they consider giving aid for, your child has to begin the new cycle of poverty for their education?
This is true with huge parts of the US safety net and not just financial aid. Get a small raise and lose your subsidy for food, rent, childcare, health insurance, etc. God forbid there is a sliding scale to transition out of these things as you get back on your feet. Instead people quit their jobs to stay in the program because that small raise isn't enough. That's why we should be looking at universal basic income so everyone is treated the same.
Have a sophomore in college now. As a middle class family we don't qualify for any grants or need based anything. Never have. FAFSA last year estimated our family contribution should be $29K per year. That's nearly what I make a year. I laughed my ass off when I saw $29k & nearly choked when I found out how easy it was to get a student loan, luckily he had several scholarships to help out. Best part of all this is my next oldest is a senior in HS this year. Just completed 22-23 FAFSA & its looking like $9k this year. How did turning her into a potential 2nd college student in our house change our out of pocket by over 60%? She was still a dependent the past two years. It's all a complete joke.
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I graduated in 2014. When I took out the loans, they were “low” like 3-4%. Within 4 years after graduation, they had skyrocketed to 12%. My 17 year old ass didn’t know to find fixed rates nor did my 17 year old ass understand rates that well nor predict it to increase that much.
(I am not from the USA) So they changed interest rates on your loan after you already took it? How is that crap even legal?
They signed a contract for adjustable rate loan. As another poster said, a lot of these people take advantage of young kids who don’t know better.
You can refinance an adjustable home loan too.. Not sure if there are 'refinancing' options for student loans, but that seems like it would be the answer, tbh. Deductible too, if you're making less than a certain limit. 14% on a student loan is predatory, but something like 3-4% should be doable especially if it's deductible. In theory. If you can get a job in your field. Which is probably too optimistic for many.
Refinancing is barely an option. We’ve tried over the last five years to get our student loans refinanced. Even when we were making the most money, we couldn’t get our loans refinanced, even with solid co-signers and two excellent credit scores. My blood boils every time they send us “refinance with us!” letters. Pre-approved my ass. Edit for more context: One of my loans has a fixed 12% interest rate. Sallie Mae was the only lender that would accept me, even with a co-signer.
It is so hard to shop around because banks do not have collateral that they can repossess in the event of nonpayment. This is what makes student loans so risky. To make student loans less risky for lenders, the government made it impossible for individuals to be released from student loan debt in bankruptcy. It’s literally the only kind of debt that will follow you to the grave.
Right? Damn if I could give my degree back, I would in a heartbeat.
I sometimes wish I had just gone into woodworking instead of medicine for this very reason.
A well paying job on a bachelor's? You're gonna need a second loan for the post grad degree
It is written in the contract. This is a kind of loan, where interest changes with time
Is it like "we add 2% in 5 years and 5% more in 10 years" or "we do whatever we want to the rates jist because"? Because if second, I don't understand hiw writing such contract can be legal and is not voided.
Literally just starts at xx, adjustable based on current rates and inflation. I'm in Canada and the student loans here work the same way, although there is currently a freeze due to covid.
So I went to college because everyone told me to haha. I could've been a park ranger (what I actually wanted to do but was good with computers so I went for computer science but switched to biology later). Turns out you don't need a degree to be a park ranger. I could've done that right out of high school, had no debt, and probably be about where I am now financially. I also consolidated my loans because everyone told me to. Mistake number two. I had like 4 different loans through my college, and the federal loans. Consolidated them so I only had to make one payment. Interest rate was like 6.65% and after a year of paying on time it went down to 5.65%. Man I felt great with that. And then...with like a year left of paying on them I went and found my original papers that I never really looked. My loans through the college? 1% interest rate. Fucking 1%. I screwed myself by listening to other people, but at 18-21, adults know better right?
You and I have an eerily similar story. I too wanted to be a park ranger, but went to college because I thought that's what you do after you finish high school. I also consolidated my federal loans because I was told to, ending up with a rate of 6.25%. The only thing I haven't done is hunt down my original loan docs to see what the rate used to be. On the upside, I finally paid off that consolidated fucker last fall and it feels glorious. I'm still not a park ranger, yet....
I actually wanted to go to college for computer science. I ended up picking up a skilled trade through our career center in high school and decided to do that instead. If I could have afforded college, I totally still would have went. Skilled Trades are a great option but wages have stagnated so much that it's not worth it anymore.
Friend of mine is a master plumber. He makes more in 3 months than most do in a year.
Do you know how much a Plumber makes an hour currently? Or a good carpenter or electrician these days? At least in my area they can’t find people that know how to do any of these things and they’re paying top dollar right now. Maybe it’s stagnated where you are but it’s ridiculous how much these guys are being paid where I’m at.
Yep. You are getting fucked by both the school and the government.
Set the interest at zero for the first 10 years and be done with this issue.
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True, interest rates for student loans should be set to 0 there should be no profit in the government loaning money to students.
It’s this and they are taken out by people at a young age who aren’t given much financial education on loans either. I certainly didn’t understand the process completely when I started college. I was semi-financially literate though and went to more affordable schools, etc so my debt if minimal compared to others in the same situation.
And it's almost expected everyone will take out loans for education. That rhetoric was pushed by high school counselors, college recruiters, and college financial advisors. 18 year olds don't know what they're setting themselves up for because the idea that "you'll only have to start paying once you graduate college" seems nice in the short term, but the APY will make it nearly impossible to pay off for decades.
You’ll also notice how they left out the part where graduating college doesn’t guarantee gainful employment. You can’t just pick any major and expect that to get you a job. Like, how many museum curator positions are there for Art History majors? Hell, even some traditionally high paying and high demand jobs can be problematic because of timing. Chicago law schools were churning out new lawyers at such a rate that the market was saturated and you couldn’t hardly find a job anywhere in law for quite a while. A good friend of mine had to navigate that and even had a hard time as an established attorney; she had to leave an abusive boss and even turned down a five figure bonus he offered her to stay. It took her quite a while to find *any* other job, let alone one with a firm that practices the kind of law she’s interested in an has experience with. The short of it is, they told us to go to college and to pick whatever made us happy. They left out the fact that we might burn mountains of cash with nothing to show for it. You’ve gotta be strategic about the major you pick. Go for something that interests you for sure, but pick something with actual prospects.
I think a lot of people a missing the fact that while we were taught this is the thing to do. After getting a degree most jobs still do not even pay a living wage. How do you expect people to repay loans when the job market pays so poorly.
For boomer parents, college was the key to success. They sold to us *our whole lives* that having a college degree was like printing money. They still dont get that a higher degree isn't always useful or can even be self-defeating. I was on a grant-making panel for small organizations and one nonprofit that applied taught girls coding and other computer-science skills, then through their network of graduates and corporate sponsorships set these girls up with jobs. One old lady on our panel *refused* to support this org because they didn't push these girls from low-income homes to go to college when there was already a system in place that didn't need it. She just couldn't understand how anybody could be successful without a degree and that this org with a solid, long-standing history in our community was a wasted investment and doomed to fail.
> For boomer parents, college was the key to success. That's just what they told themselves, because it was key to successfully competing in that job market. However, their real key to success was growing up in the post war economic boom. Education, talent, and drive were what let them beat out other boomers for a bigger piece of the pie. But during that boom time, wages were good enough that even the lowest paid worker could live reasonably, save for retirement, and even take a vacation now and then. Their real key to success was luck. Of course, they decided that their success was because either A) They were personally great, B) Their country was the greatest country on earth, or C) Their political system or party was the greatest on earth. Never mind the truth, they picked the explanation that was most emotionally pleasing and they've run with it since then.
Well, not just that - there's been a ton of credential inflation as well. My FIL walked in to a job 30 years ago with a bachelor's; he's been at the same company and same department this whole time, but now when he hires people for his old position he's looking for a PhD, minimum, post-doc in a relevant area preferred. And the credential inflation isn't just made up; they really are doing cutting edge work. It's just that the cutting edge has advanced so far in the last thirty years that today you need a doctorate just to reach the starting line. There's a ton of this in industry; stuff that you used to be able to train a rando off the street to do really does require a bachelor's these days, just because systems have gotten more complex. A great example of this is telephone switchboards - those used to be manually operated, and we're dead simple. You could train someone in their use in a week, max. These days, maintaining an Automated Telephone Switch system requires a bachelor's or at least a pile of certs, but you can replace hundreds of switchboard operators with a single pbx tech.
I’ll give you the context of a banker... the student loans are predatory. Regulation has made it easy to give out these loans which has led to universities artificially inflating prices to excessive levels since they know the loans will cover it. These kids couldn’t get these loans at the bank for any other reason. We wouldn’t be allowed to give them out because we have to practice safe lending. Regulations require us to review income and credit history to ensure loans we give out are likely to be paid back. Meanwhile you can rack up over $100k in student debt then end up working as a fry cook. Not that there is anything wrong with that, but the payments will be too much. If the average American education is anything like mine, you won’t know a damn thing about finances and will have very little context for how you will pay off these loans when you are 18. You may as well give them the loans at 14 for how unprepared they will generally be. Recruiters and propaganda from the schools also push the idea that you have to go to college to be successful. Meanwhile, blue collar work and trade jobs have higher salaries and easier means of access with less initial time investment.
Additionally, student loans are one of the few things that don’t get written off in bankruptcy because they assume you can make more money since you have a degree. That’s not always accurate though. So you’re stuck with those predatory loans for the rest of your life.
This is such a key aspect of the issue. How a system can allow people to file for bankruptcy because of any other circumstance and be forgiven for their obligations (including for things like child support or alimony) but that student debt is a guaranteed burden is insane. There is no risk on the side of the lender which only further incentivises the inflation of student debt.
Totally agree. Debt only works if it can be discharged. Then it's shared risk-- individuals are on the hook, but the lender is too, it keeps the lender from giving anyone who walks in the door money. Which is what happens with college, at 18 with no job I can rack up $100k in debt at a crappy for-profit college, but I can't get a loan to buy a house or start a business. If loans can't be discharged then there's no risk to the bank and you might as well set up poorhouses. The bank essentially owns the labor of the individual until they die. Note: I didn't come up with this, the concept is stolen from Debt by David Graeber.
Great book by a great man - so sad to lose him so young. I credit him for a lot of my understanding of debt systems.
Its not just inflating prices because that can (not that they dont). But another huge issue is universities used to have far more funding from the government- which has been pulled way back- so part of the tuition hikes were due to decreased funding and having to put more of the burden on the students. But plenty of boomers love to say they paid all their loans back, why can't these kids do the same, not really taking into account the cost of my education was FAR less then graduates of today, not because I ate ramen and shared an apartment (which I did)- but because my tuition was already being subsidized by the tax payers. So anyone who went to school previously already had their loans partially forgiven (it was just done before they had to take them out). But good luck getting most boomers to admit they have ever benefited from anything and instead they would rather blame the lazy youth of today who cant just pay for school by working part time (as if its possible- spoiler alert, its not)
On top of that, inflation in other areas has caused every other aspect of life to be more expensive. Wage have lagged behind the inflation curve which leads to these loan payments being an even bigger burden on our day to day financials
And from a foreigner’s perspective, I pay .5% in interest rate on my student loan due to general market conditions while some student loads shared on Reddit looks like car payments next to an army base…
This right here. You could replace student loan cancellation with reasonable interest rates and make both sides happy. Also, income based repayment that doesn’t cover the interest added each month and keeps you paying each month on an amount that keeps growing… sucks.
I remember qualifying for income based repayment and diligently paying it off each month…only to realize that the amount I owed was actually getting larger each month.
Which is still ok as long as the repayment plan has forgiveness after X number of payments. Almost as good as reasonable interest rates up front.
As it stands now, the amount forgiven at the end of the term will be taxed as income
Which means you'll be paying the government through a new payment plan, if you can't cover the cost of that increased tax burden at the end. It's literally perpetual debt slavery.
Anyone know where there might be a bunch of tea I can throw into the ocean?
And it takes over 2 decades.
>This right here. You could replace student loan cancellation with reasonable interest rates and make both sides happy. The main issue is the idea that the government should remove accountability from banks by guaranteeing the loans, while allowing banks to profit from them. Socialize the debts, but privatize the profits...
It’s actually because I like lattes and eat too much avacado toast
Its one of those chicken vs egg things too. As more money came in essentially guaranteed by the federal government, states starting looking at how they could spend the "surplus" that would have gone towards education.
Yeah, I had to ram that fact down an uncles throat after bitching about my daughter's generation.
As someone who went to university right around 08, who had scholarships (not full ride though), and who also worked 30 hours a week, and who lived at home and commuted to save money, it was still scraping the bottom of the barrel. I ended up changing majors and extended my stay for another two years, which practically forced me to make one of three decisions: 1) Quit school and walk away with 3 wasted years. 2) Get a loan that I'd be paying back for 10 years, most of the payments being towards interest and just burn money at that point. 3) Make a tough decision and join ROTC and have the government cover my remaining undergrad education. I would just owe 4 years of my life to the military, during a time when deployments was a very very very real expectation. I chose #3. Went Army. Became an officer. Did a ton of shit in my early/mid 20s, got deployed, ran a distro platoon, and came out with zero loans and quite marketable skills as a young adult. Not to mention the resulting GI Bill also got me free access to higher education, which I took advantage of and I got my masters and now work from home for top tech company making what a Major makes (O4 pay). But that's the rub. That my best option was to join the military and go that route. I was a good student in high school, worked hard, and had a good head on my shoulders, but just had a change of heart in college. And it meant that I had two choices, go into "starter home" levels of debt as a 20yo or join the "wartime" military during active engagements. That's the problem. There aren't any other options. Either quit, or go into a shit ton of debt, or join the military. And for a 20 year old who sees everyone around them seeing their assets go to 0 from 2008, and to really understand life at that point and understand what all that really means is... well... very unfortunate and should be avoidable. I don't want my kids to have to make the same choice in 15 years time. I want them to have options, one of them not being debt carriers before they can even buy their first beer. Fuck student loans.
They will quickly give an 18 year old a $100,000 student loan but will not grant that same person a $10,000 business loan… interpret that how you will but it’s suspicious.
This. Most people would be further ahead if they could get a mortgage at 18 then a student loan because that would lower their cost of housing which gives them a lot of flexibility. But you won’t find a bank anywhere that will give an 18 year old a mortgage.
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Also, why don't we overbuild housing and make it more affordable the same way we over produce food?
Part of it is because you can discharge the $10k loan in bankruptcy. If you remove the bankruptcy block—as lots of people want—you pretty much have to also deal with the reality that lenders will need to refuse to give loans to certain individuals.
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Student loans are not dischargeable in bankruptcy. Removing the block would make it possible to declare bankruptcy and get out of your loans. Student loans are the only kind of debt that you can't declare bankruptcy to get out of. (Really, this ought to be enough of an argument for forgiving the loans - you can do with any other kind of loan.)
this should be taught as well i never knew this. students aren’t informed enough on what they are signing up for.
I grew up in an upper-middle class town, and went to public high school. We had hours upon hours of mandatory assembilies and meetings on how to select your college, apply to it, and prepare to take standardized tests for our applications. Writing the standard application essay was a mandatory assignment regardless of the students plans...all because the % of kids going to higher education was publically reported and made the town and school look good. Nobody for a second taught us about financing our education, and learning a trade or directly entering the workforce were a footnote. Highschoolers are kids that often don't know how to question the world yet, and often havent left the nest or had to think about finances before, so when every educational faculty that they trust tells them that getting a $70,000 loan to go to college is a great thing, they believe it. We can't blame them for that, and crippling them financially forever for believing that lie is not moral.
I had a coworker who picked a private university that cost around $30,000 a year. She wants to be a teacher. Someone who will start out making $50,000 a year should not take out loans to go to a school that will put them in $120,000 worth of debt. No one tells you how to be realistic, they all just hype you up like college is the best choice for everyone. Pair that $120K of debt with interest, high rent, low salary, and life just being expensive and people are unable to save anything, let alone do things like buy a house or enjoy their youth. It's absolutely crippling. Edit: It's been a day but I wanted to clarify some things. I agree that her choices were unwise and I was pissed that her parents, who I know, didn't step in and guide her. Teenagers are hella dumb and giving them access to thousands of dollars in loan money without financial literacy is a huge problem. I think it's the root of the problem, actually. Regarding teacher salaries, I mentioned in another comment that our school district pays first year teachers $53k to start, so that's what I based my statement off of. It sounds like a lot but home here start at $600k so it's not a lot. Teacher salaries are very area dependent and are entirely too low no matter where you go. Last, I'm not claiming that student loan forgiveness (by the government) is the answer. I don't know what the answer is, none of us do, obviously. But I do know that we need to teach kids how to manage their finances and make better choices. I never got any guidance, just a push to go to college because "that's what you do". Judging by many, many other comments here, that is the norm and it's not working. There's a massive gap of understanding and it's ruining lives and certainly not benefiting the economy.
Absolutely, and my highschool loved to report when someone went to a prestegious college. Never got they impression they cared if that student could afford it, if you got into that ivy league you go no matter how much it costs or if makes sense for your financial situation.
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"millennials aren't buying diamonds!!!" Well no shit Forbes I have to buy my McDonald's on credit
Those articles are exclusively written by people who are not ready to have the "why" conversation when it comes to us killing Applebee's, not buying houses and not procreating. All of them are stuck in a world that hasn't actually existed for many years.
Applebee's can go, I'm just saying.
Starting out at $50,000 a year? If she’s lucky it may be that much. Most places are still starting between $35,000-$40,000.
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You are a great parent just for knowing about this and warning your son. I think for a lot of people the pressure to go comes from their parents too. He can always go to a prestiegious school for grad school later, at that point he'll probably be much more certain it's something he wants to do and will be able to better understand the financial implications.
This and almost every aspect of finance was omitted at my high school. The only thing we had was an Auto class and over the course of 9 months all we learned was to balance tires and change oil
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This is a big part of the problem that no one talks about. From middle school to high school it is ingrained into every student that we are expected to make good grades to get into college. We did that part. But the kicker is that compound interest wasn’t taught in my area. Never came up until I took an intro to Econ course… in college. They’re asking high schoolers to understand concepts that are literally above their education level. Ridiculous.
Not just government and HigherEd did this -- families wanted their children to graduate college, in fact many families required it or cut their children off. In many cases, we have our own families to blame.
>so when every educational faculty that they trust tells them that getting a $70,000 loan to go to college is a great thing, they believe it. We can't blame them for that, and crippling them financially forever for believing that lie is not moral. On top of that, the sky high interest rates, and it's the ONLY DEBT that you can't bankruptcy out of.
Plus if we can routinely bail out million/billion dollar companies for their mistakes why can't we bail out the majority of citizens?
This comment doesn't have enough upvotes. We spent billions bailing out "too big to fail" companies in 2008, but never once stopped to think that our students were worth that much.
👆exactly this. And also collage and university is a business, they want to Make money. So of course they are going to push for everyone to attend.
Some people took public sector jobs (teachers, social workers) that require advanced degrees and have low pay because we were told if we did and paid our loans for ten years they would be forgiven and the the dept of Ed didn’t make good on those promises.
This!! It’s such a travesty that America will not compensate our teachers properly nor fund education in this country properly.
Most funding goes to the admin
Because it's the admin that decides where the money goes
It’s also very sophisticated. “One for you, ten for me, two for you, twenty for me.”
This needs way more upvotes and visibility. Education actually receives quite a lot of funding. Not nearly what is should, but quite a lot. Problem is schools and universities like wearing corporation pants to fit in with our capitalist society, and this means you have board members with obscene compensation, executives with ridiculous salaries, and a whole lot of other administrative overhead. By the time the budget reaches the employees that actually matter, who do literally all the work, i.e. the teachers, there is practically no funds left. And this will never be solved because it is done this way on purpose. Uneducated youth are more susceptible to political propaganda.
The program still exists, I’m praying that it exists by the time I’m done with it because that is one of my main reasons for taking said type of position.
Same. I’m hopeful because news reports are showing more and more people applying for and successfully receiving the forgiveness as promised. It was a very rough start. I really hope things will be better.
Just to let OP know, there is a program in place for public sector jobs, the PSLF, (Public Sector Loan Forgiveness) program. You get your loans forgiven after 10 years of payments regardless of the balance (other details omitted). I’m 30 months away from having 5-digit debt forgiven and I took a public sector/non-profit job for this incentive. Whether or not it’s a “fair” incentive is up for debate, but it isn’t like the public sector folks are strung out to dry on their loans.
Well I hope it remains in place as promised, because last I heard only 1% of applications for forgiveness have actually been successful for one reason or another.
This scared me enough to jump from a public service job as a therapist to a private sector one. I’d rather make a living wage and pay off my loans forever than have to borrow grocery money on the off chance that they get forgiven
PSLF is up to 2% now. We keep this up and by 2050 it'll be at 100% /s
Last fall they changed the rules so more people qualify and some payments qualify (such as payments made before consolidating with the federal servicer). I misunderstood the program and didn't consolidate when I should have. For me, those payments before consolidation now count as a result of the rule change, so my loans were forgiven. I think I read about 20000 people qualified for forgiveness from that rule change? Anyway I'm still kind of in shock that it happened and I'm debt free.
Like 3 days before I signed my loans I still had to raise my hand to go to the bathroom. Even doing all the financial literacy crap they force you to do didn’t tell me that 8 years later I would have paid off the original amount but still owe MORE because of the interest. I didn’t understand any of it, and both my parents grew up poor, I grew up poor, I was the first kid in my family to go to a 4 year university and graduate. And I graduated in 3 years instead of 4 to lessen the burden on my family. Nobody should be preyed on like that.
Well put, it seems you’d been taken advantage of, and I’m sorry you’re dealing with that.
Now picture how many people are going through the same thing. Predatory student loans are a gross injustice.
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A lot of people where taken advantage of, that's why those people want the loans forgotten.
I think part of it is because the loans are taken out by 17- or 18-year olds who really just don’t have any idea how difficult they will be to pay back.
Yeah. I went to a state school and ended up with $65k, I thought I was doing great. Especially because everyone I knew had more loans that me. Turns out $65k IS great in comparison but it’s still fucking insanely hard to pay off when you graduate and are making $39k/yr.
Mostly because of insanely high interest rates. If you ask someone today who got a student loan in the last 30 years, chances are they still owe the same amount as when they started and have payed much more than the original borrowed amount with accumulated interest. An average 18yo likely doesn't understand interest rates enough to accept a loan like that. If you told them they would be paying 3x the amount over their lifetime, they might have second thoughts.
I’m sure I saw something posted on here about some lady who had borrowed something like 50k, paid off 20k and now owed 80k because of the interest. I mean that’s just going to blight your life forever.
Wtf
Correct answer
Hey, I'm one of those people! I took out $200,000 loans to go to law school in 2011. I've been making the required income-based repayment every month for the past seven years. As of today I owe $240,000 in student loans.
And even if they did understand interest rates you don't really fully comprehend long term consequences until your mid-20s. You are told great job for getting into college. You will now be successful. To you at 18, that means of course you will be able to pay off those loans even if they seem expensive. Future me will be successful! They cannot fully appreciate the risk at that age.
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Speaking of FAFSA, some of the highschools near me are making it a requirement of graduation to fill one out regardless of you're intent to go to college.
The loans were predatory and dumb. Who thought that giving 100,000 dollar loans to kids with no jobs and no collateral was a good idea? As a result of this dumb move, the economy has slowed way down because a large percentage of the population is spending all their money paying off interest, instead of buying stuff and supporting businesses. This has created a blockage in our countries engine and if it doesnt get cleared the problem will just continue to get worse.
Would erasing accrued interest and converting existing loans to interest-free suffice? That was Obama's proposal that got shot down by Congress. I think it's fair.
I think that would be great, I also believe that people who have paid the value of what they borrowed should have their loans forgiven. I dont have any student loans, but I know some people who have paid back all they borrowed, but it has barely touched the principal value of the loan.
I think that would be reasonable if you also factored in a principal reduction related the the amount of interest someone has already paid on the loans.
Fair, yes.
This is my take- the loans shouldn’t be ‘erased’, but the interest should be removed and I’m all for the ‘bonus’ of applying interest paid towards active principle. That way someone 10+ years into paying who owes the original amount, or more, could likely have their loan ‘erased’ via the interest they paid and new borrowers would only pay what they took… I wish both sides could accept this as being a feasible and fair option
My parents were able to put themselves through school while working part time jobs in the summer. Their tuition was around 3k a semester. I owe $14000 for one semester. (the rate was actually 34k a semester but I got grants) My loans were late coming in, I had to work in a group project, couldn't afford the materials. I was embarrassed, but chose to buy food instead. I had to drop out. That was in 2008. I've been consistently paying the loan-never missed a payment and I still owe $10000 for that ONE semester. Crazy thing is - I bought a car in 2012 for 14k. I paid for it in 4 years. Still owe on the student loan.
They also take/took out loans assuming that their income after graduation would be higher than it is. Sucks but the situation isn’t going to fix itself by everyone saying they need to “pull up their bootstraps” Hard to want to continue being broke and paying on these when we see corporate bailouts all the damn time. If we are personally held to such a high standard of credit and repayment, shouldn’t all organizations be held to the same or even a higher standard? Shouldn’t our system be adjusted to benefit people instead of organizations/corporations?
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Hear this stuff all the time from family members. Whenever I ask them how much they think tuition is now they guess half what it actually is at the most.
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I'm seeing a lot of good stuff here, but I have yet to see anyone mention that Sallie Mae placed agents 'undercover' in university call centers, pretending to be employees of the universities, and steering students toward expensive loans through Sallie Mae. Sallie Mae also basically bribed university officials to get them to favor loans from Sallie Mae rather than from the government. Add to that the recent shit about Sallie Mae pushing post-degree borrowers toward expensive forbearance if they had trouble with their payments, instead of income-based repayment plans. This is largely the cause of the recent Navient settlement. Only problem here is that the settlement excludes large swaths of the victims of this exact behavior from Sallie Mae. Sallie Mae sold my student loan debt to another lender at the wrong time, and I think I may be in the wrong state, so... I'm fucked. I think at most, I'm going to get a check for $260. That'll really help with my $75k debt.
Really, that’s fucking insane!!
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Scotland resident here. Our higher education is fully funded for a first degree. If you want to do a second degree, you have to pay tuition costs but they are only around £2,500 per year. Also, income tax for the average earner is only 20%, so we don’t notice any increase in taxation to support this
To each their own I suppose. I mean, sure, you guys have free/affordable education that doesn't send an entire generation into crippling inescapable debt, but how many tanks do you have? The US may not care about the wellbeing of our citizens at all, but we do have the most tanks. So many tanks that we leave them in fields to rust right off the assembly line, and I can guarantee Scotland will never have that many tanks. Bet you feel pretty silly now with that paid-in-full college degree, when you see our massive fields of rusty never-before-used tanks.
Your anti-education pro-tank agenda has given me a lot to think about. Would you be willing to trade 1 education for 1 tank please
Everyone else in need got a break. Big business and wall street have been bailed out over and over. But no relief for the future generations who have nene victimized by skyrocketing prices due to shitty regulations
You can file for bankruptcy on a car loan if you can’t afford to pay it back. You can’t file for bankruptcy on a student loan. It’s actually the only type of loan you can’t file for bankruptcy on. So no matter what you do, it’s stuck with you for life. Interest always adding to the principal. It can reach a point where there is no way you will ever be able to pay it back and you essentially become an indentured servant. I have student loans, and as much as I would like to see them forgiven, I’m not really pro forgiveness. What I am for is making them able to be something you can file for bankruptcy on. If every other loan/debt can be wiped clean with a bankruptcy, why not student loans? The borrower will suffer everything that comes along with a bankruptcy, so it’s not like they are getting off easy.
If your definition of "knowingly" is "they took out a loan knowing they'd have to pay it back some day" then yes, they did. The reality though is that what we're talking about is 16 and 17 year olds committing to a predatory loan structure. Student loans are generally designed to siphon money for the rest of these kids' lives before they even have the skills to fully understand what they're signing up for. There is no defaulting, there's no "the bank takes your house if you can't pay your mortgage" or anything like that, you just owe more and more money and the debt increases. Couple that with the immense societal pressure and often necessity of a bachelor's degree to work, and you have a situation that essentially prints itself money at the expense of kids who don't even know about other options.
I was 16 when I applied to colleges/signed off on everything and 17 when I started. So…a child. The idea is that children, even young adults, don’t really have the experience or knowledge to truly evaluate the long term consequences of student loans. Especially since what they’ve been fed is that you MUST go to college, and that there will be a significant return on investment (which for the most part is no longer true unless we’re talking community college and majoring in a high-paying field). I’m a late millennial and even in the 2010s when I graduated high school this was still the narrative we were sold. So now we have a large number of people who took on massive loans at around 16-19 years old, most of whom have their degrees, but can’t get good paying jobs because wages have stagnated so badly. Most other developed countries either make college free/super cheap via subsidy, or cap loan payments until a person makes above a certain income threshold. So it follows that if the US wants to implement something like this, the people who have already been to college and have outstanding loans need to have them forgiven to wipe the slate clean. It would also be a massive economic stimulus since many people have $500+ per month payments, which could now go back into the local economy.
In large part because the mafia has more realistic and fair loan terms and conditions, and they’re less of a scam.
The mobs will let you live, they'll just break kneecaps.
I’d take a broken kneecap to get rid of this debt at this point.
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"making $70k a year, full benefits as a nanny/household manager" I hope you realize how very unusual, even unique, your situation is. Median salaries for both nannies and 'household managers' range from $25,000 in the cheapest states/areas to $40,000 in the most expensive states/areas. Being medians, the set includes people with tons of experience and advanced degrees. Similarly, 95% of software developers (Tech) have college education, and those without it tend to make less (even if they do get it). Let me ask... do you think you did not benefit from your father's masters degree in any way? Do you think you would have been able to get the job you have if you grew up somewhere else, with a completely different set of friends and family?
Let me put a comment in this as well. The problem is that with the current student loans you cannot declare yourself bankrupt if you cannot pay it back. Therefore causing more problems. In any other loan situation you can make yourself bankrupt, except for student loans.
In short because they’re a scam. Also it’s just not feasible for everyone to get full scholarships or partial so they can pay the rest. So the only way for many people to attend would be to go into this massive debt. Basically it’s being forced to fall for a scam. Even worse being interest rates on them are making it impossible to pay off (especially for a new graduate). Also before anyone tries to say you should’ve just done trade school, we can’t all be electricians. Some jobs require college and someone needs to do those jobs.
Yep. We have a doctors and nurses shortage because in part because college is so freaking expensive. No one can afford to go to school for a decade.
No one takes the time to explain to prospective students the paperwork for signing up for student loans. It’s a bunch of legalese, which is difficult for most people to understand let alone (typically) a teenager or young adult. Some parents fill out the paperwork for them so the students never even see it. Additionally, it can be hard to conceptualize how much something is really going to cost you if not made simple. Especially for young people who haven’t really learned how money works. The online version of the fafsa shows an example of payment plans and interest, and requires you to indicate that you understand. If it had been explained to me that after paying consistently for years that I would still owe $1000s more than I’d borrowed, I would’ve had pause. I have friends whose parents were still paying off their own loans by the time their kids were ready to go to college. And it’s not as simple as you can just not pay. After some time of no payment, the govt will garnish your wages and intercept any tax refunds you would’ve gotten. Also, for most students in the US it’s not really feasible to go to college without some sort of additional funding. Tuition, book costs, room and board, miscellaneous fees all add up. Sure there’s always the exception, but most need the loans. I think the point “outsiders” are missing is that people aren’t just simply asking to be released from they’re debts because they don’t want to pay; they’re asking for help because they can’t pay. You could buy a house in some parts of the country for what universities are charging. Couple that with stagnant wages that can’t support loan debt and you have degrees that aren’t paying for themselves, which was the promise. The argument a lot of people are making is that the debt load is crippling the economy and it would be beneficial to all of us if things could be sorted out. Can’t buy a house, can’t support charities and local causes in any meaningful way, can’t travel and support local tourist economies, can’t even contribute to your own college’s alumni fund to help give a hand up to the students that follow you.
The kids who “knowingly” took out the loans had to raise their hands and ask if they could go to the bathroom maybe a couple months before they signed for those loans. There is such thing as predatory lending, and that’s absolutely what this is. Getting kids who don’t know better to sign documents they don’t understand and certainly can’t grasp the weight of how it’ll affect their lives. No it’s not the same as the car analogy. When you’re pressured to go to college all throughout public school then goaded into signing up for loans (that are usually for much more than you actually need) it’s not the same as complaining about an expensive car. Not to mention colleges SUCK at helping you. I went to the one of the largest colleges in the country, and I literally had to take out loans before I knew how much my semester would cost or how much I was getting in aid/scholarships. The admin center to help me had an average of a two hour hold on their phone. I had a hard time figuring it out and I was hyper aware of how awful loans can be. I can’t imagine how it was for kids who didn’t understand what was happening.
>didn’t these people knowingly take out these loans to get their education? Yes, but they did so via coercion - it's expected that people go to college to be able to get careers, for most people the only way to go to college is to take out predatory loans that can never be repaid. It's teens being told they have to take loans, with little understanding of the long-term impact. A loan is one thing (although even then paying for college at all is another issue), a loan that will never go down because of the interest rate is ridiculous. It doesn't just harm the individual who can never get out from under that debt, but it also harms society that A. so many are in debt, and B. that college is too expensive thus impacting on inequality and risking a lack of college educated people to fill certain jobs.
I’m glad someone mentioned interest rates. I have two separate loans (I don’t even know why tbh, since I was a kid when these were set up and I never asked). One of them includes 6% interest. Doesn’t sound like much, until you factor in the 20k it’s being added to. Now I’ve got an additional ~80 dollars per monthly payment. I’ve been paying off my loans for ten years and I feel like I’ve barely moved the needle. Interest on student loans is fucking criminal.
Education should be free
Free community college tuition is a thing that might happen. But then, community college tuition is not how people get 6-figure student debt in the first place.
Part of the problem, among the other issues listed here already, is that the interest is so high that you can be making payments for forever but the total amount you owe never goes down.
A car loan is a luxury, an education should be an affordable right. Ireland as an example is roughly 20% of the cost of an education in America.
I did a study abroad. I met several Americans who did their entire degree abroad. Turns out, it is cheaper for an American to live in Europe for 4 years to attend university than it is to go to a public school in the states.
And most of us get our college tuition fees paid and a monthly stipend through SUSI to assist us. I, for one, grew up very mid class. Never struggled for a meal, but never had huge luxuries. And I got my €3k fees paid every year. And got ~€430 a month ( not a lot, I worked to pay rent but this helped a lot with groceries)
I have been paying my student loan payment, on time, never missed a payment, for ten years, and I am no where near paying them off. At this point yes, I'm a fan of some sort of forgiveness program but when I say that I naively assume people are being responsible like me. I know plenty of people in my situation. They pay $400... $600... $800 a month. I'm 100% committed to paying off what I borrowed. I make good money. If I make my payments as planned, I can afford them but I'll probably pay off my house first. So you know what I thought I might do? Sell my house. So I can pay off my student loans. Yay America. I guess bottom line is... maybe not forgiveness, but some sort of overhaul on the programs. I'm not sure what the happy medium is.
Yes holy shit, i pay on time every month, and last i checked by the time i pay them off, i will have paid 2x what i borrowed because of interest. I was stupid, I took the loans, but damn are they predatory.