Managing the Burden of Student Debt.
http://thedianerehmshow.org/shows/2012-04-23/managing-burden-student-debt
President Obama is calling on Congress to stop federal student loan rates from doubling this summer. Republicans argue extending the current 3.4 percent rate would cost taxpayers too much. We discuss the implications for families and the economy.
Guests
Mark Zuckerman
deputy director of the White House Domestic Policy Council.
Derek Thompson
senior editor at the Atlantic
Jason Delisle
director of the Federal Education Budget Project at the New America Foundation, former senior analyst on the Republican staff of the U.S. Senate Budget Committee, where he played a key role in developing education legislation.
Vince Sampson
president of the Education Finance Council, former principal deputy assistant secretary in the U.S Department of Education in the Office of Postsecondary Education.
Sujatha Jahagirdar
political director, the Student PIRGs and former program director for the Student PIRGs new voters project during the 2008 election.
Comments
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Go right ahead Republicans and beat the heck out of our children financially before they even get a chance to make a dime. Let them realize they are in a huge hole as a result of their faith in a system that has been less than honest with them (and their parents) about the rewards for their commitment to education for a nonexistent future employer and take a guess at who they will vote for in the future.
Go right ahead Democrats and beat the heck out of our children financially before they even get a chance to make a dime. Let them realize they are in a huge hole as a result of federal government deficit spending, the system that has been less than honest with them (and their parents) about the rewards for their commitment to education for a nonexistent future employer that was driven out business or out of the country by over regulation and over taxation and take a guess at who they will vote for in the future.
I wonder if the guy in the picture Gan Golan with OWS in California would like to work in the Oil Patch to pay off some of those school loans? There is a lot of jobs out there and they pay great salaries.
Also wonder what is his graduate degree in, is it marketable?
Government aid drives tuition's higher! Why not focus on the real problem instead of trying to elevate Obama's pole numbers.There is a lot of research on this topic, instead of making it a political game, educate yourself. google this (government subsidies drive college tuition's up)
Andrew Gillen masterfully demonstrates that Bill Bennett is right--federal financial aid programs lead to higher tuition. The implications of this and related financial aid effects are profound:
1. The intended income transfers from taxpayers (and, increasingly bondholders) to students have been largely diverted to college coffers; swelling payrolls and leading to armies of new university bureaucrats, million-dollar college presidents, an academic arms race and other pathologies;
2. This, in turn, has thwarted university productivity growth and helps explain why higher education is vastly more expensive than in most other major developed countries;
3. The goal of helping low-income students has not been met, and a lower percent of recent college graduates come from less affluent students than was true in 1970 when Pell Grants did not exist;
4. To the extent that these aid programs have increased enrollments (read Gillen), they have added to the growing disconnect between labor-market realities and student job expectations, creating armies of college graduates who are bartenders, taxi drivers, etc.
5. Enrollment increases, in turn, have contributed to a dumbing down of higher education and to declining standards.
What to do? The federal government needs to wind down its financial aid commitment. Restrict eligibility for aid to truly low-income students. Impose performance criteria for aid recipients: mediocre students will lose aid. Make the college absorb some of the risk for loan defaults--a lesson we should have learned from the financial crisis. Give Pell Grants as vouchers directly to students, not schools. Reinstate private lending options. Unveil new human capital contract approaches that reduce debt reliance. Downsize and reinvent federal programs and allow market discipline to operate more..
http://www.mindingthecampus.com/originals/2012/02/why_they_seem_to_rise_...
As a current student in a state college; what about the TEXTBOOK RACKET??? The school bookstore here, like many others is not owned by the college. The school does receive a "cut" from the bookstore.
Bipartisan analyses (Delta Cost Project, SHEF) demonstrate a close relationship between the increase in tuition and the decrease in state appropriations. Both by 12% from '98-05 and I imagine only more since.
Institutional costs rose only 3% during that time.
http://www.ncsl.org/issues-research/educ/tuition-policy.aspx
(To even bring up the deficit, that while serious, is not by any reasonable account in the red... The US and people face bigger systemic problems, something the administration recognizes.)
My husband and I are college educated, I in science (BS-Biology) and he in engineering (BSME) with an MBA and concentration in finance. We have always been told "Go to school, get a good education, and you will get a good job." We did that and my husband has good employment. Unfortunately our student debt is $130,000 and the payments are much larger than our mortgage. We are lucky; we have a home, two used cars, and only I have experienced unemployment thus far. We are able to pay our debt, but it is approximately 45% of our take-home pay.
Many of our friends are in similar situations. Most of our friends are unable to pay even the minimum amount on their loans and will not be able to once they come due.
Student debt is unfairly onerous- with no way to refinance at lower interest levels, no relief from higher wages, and no emergency exit through bankruptcy (even though gambling debts can be cleared in bankruptcy).
Our generation is over-burdened with our educational debt (900% increase in college tuition since 1978) and are facing a very tough job market. I would not be at all surprised to see increasing defaults on student loans in the near future.
I wish that we could follow the Australian model, where we pay a % of our income over the next 10 to 20 years to pay for our education. We need help!
Education has become the latest "Cash Cow". How many times have you purchased that $200 book "required" by the department and it is never or hardly used in your class?
Recently I have turned to emailing professors prior to the beginning of class and have asked them if it is okay if I purchase the prior version to save money. I have not been told "no" so far, so I highly suggest trying this method.
JSawyer wrote:" (To even bring up the deficit, that while serious, is not by any reasonable account in the red... The US and people face bigger systemic problems, something the administration recognizes.)"
This is so far away from being based in reality it's scary. As far as this administration recognizing anything, it recognizes it's losing and will do anything to bribe voters with our own tax money to remain in power.
After slavery they conceived 'Share Croppers'. It just changed the names. Today America is allowing the T-Party extremists to recreate 'Share Croppers' in every field and occupation,replacing the middle class. A graduate today faces lower wages,and higher debt. Their debts may never be paid off. By the time an employee reaches age 45 today,they have become too expensive to keep,and are replaced by a young person,for half the wage.That means many people will be nibbling away at what they have struggled to save, just to survive. With a projected new retirement age of 70, I would not wish this nightmare on anyone,and am o so grateful I`m retired.
JSawyer wrote: cherry picking, this is from your link.
Why is Tuition Rising?
Rising tuition rates and the affordability of higher education are the subject of scrutiny from policymakers, university presidents, policy and advocacy organizations, the press, parents, and students. It is not uncommon to see annual tuition increases that are well above the rate of inflation; in fact, between 1988 and 2008, tuition and fees at public universities increased by 317 percent, while overall inflation rose by only 84 percent.[1] Rapidly increasing tuition is putting a strain on student budgets and is making higher education – especially at four-year institutions – seem out of reach for more and more students.
Student Loan Debt is far more manageable under the Obama Administration than it was under the Bush Administration. When my daughter attended Penn State U to achieve her dream of being an aerospace engineer who works on the Orion Project, the only financial aid she could get was a Parent Plus Loan through Bush's cronies in the private sector which had 8% interest with payments required throughout her four years of college. Neither she nor I could afford to make these payments and her actual loan doubled by the time she graduated. When Obama banished Bush's cronies and put all loans in the government's hands, I consolidated her loans under the Direct Loan Program and am now in an income-based program which allows the loan to be paid back at an affordable rate. My daughter achieved her dreams--she works on the Orion Project and is paying back her student loans. I fear for the future of Direct Loan Income-based repayment plan if the Republican's take over.
As so many have said "give students the same interest rates that the sub prime fraudsters received" Was that 0% for most of those loans
With two children who graduated from state schools in the last three years I have some realistic advice for students: Lower your standard of living, choose cheaper schools and work, work, work. A high percentage of college cost is not tuition but wanting cars, vacations, "nice" apartments, fancy cell phones, etc. Both my girls lived in low rent, very small living spaces, worked 20+ hours a week, choose very reasonable state schools. Both came out with less than $15000 in debt and have great jobs. (nurse and college placement officer) Live like you are poor when you are young and you have a better chance of NOT being poor because of school debts later on.
It is really a disgrace that the cost of an education is so expensive for some kids are discouraged from the outset, much less worrying about the interest rate. Once upon a time, to go to a state school for an undergraduate degree was affordable with a summer job, now you must hock your first born and their first born to get a BA degree.
I was considering going back for an advaced degree, to look at a PHD in this market would mean an additional $50 K in debt. I determined it isn't really worth it.
Please discuss how Wall Street banksters can go bankrupt but students can not go declare bankruptcy on student loans? Is it to much too expect student to get the same interest rate breaks that the sub prime industry received?
Equal Justice Works provides education on debt relief programs for law students who enter public service.
Is public service no longer being considered an important lever in current Congressional discussions on student loan matters?
Go to. http://www.equaljusticeworks.org/ed-debt.
Realize my comment is not what you're specifically speaking about, but is tied to our nation's job loss epidemic. The reason why people, of all ages, are having to go back to school to learn new skills or decide on a different major than they first sought is because big business is sending jobs overseas to save money. What excuses does your government represensative have to address this aspect?
I appreciate the idea that the cost of college is going up. However, the cost of doing business is not going down. Lights, gas, and water, in addition to other costs keep going up. Couple that with state cuts and a lack of will from the congress, and you have a recipe for increased costs at state schools. Private colleges have always cost more because they don't get a check from the state every year. Also, keep in mind that state colleges and universities are controlled by the state and tution increases are approved by state legislatures.
Sad very sad, the entire panel advocates for "Big Education" as with any government protected business, market forces are kept at bay for the misguided illusion of the greater good. If these people are an example of what higher education produces were in worse trouble than I thought.
Foreign students get huge tuition breaks; why not raise their tuition then lower the tuition for US students?
I think the problem is with the parents and the students. Instead of trips to Disney, we saved. One child skipped their dream school to go to another that was affordable. Both of our children will graduate loan free. Meanwhile we've seen their peers rack up $100,000+ in loans as "undeclared" majors or studying things that have no ability to earn, like dance. I object to bailing out anyone who was irresponsible and lacking of common sense when it came time to make these significant life decisions.
Yeah Right Jason, "with better employment rates, the student debt problem disappears." Long as Banks and Sallie Mae continues profiting, you're happy. Like most Republicans, just another spokesman for "Bankers R Us" and the 1%
My daughter consolidated her student loans with the original school student loan provider Nelnet. Since this consolidation it appears that all interest was added to the loan. The consolidation was done after paying 8 years on the original loan. Can a provider legally add the entire term interest to the loan? Other wise she is not just pay interest on current debt?
In 2007, President Bush signed the College Cost Reducation and Access Act that has two key provisions: Income-based loan repayment that allows graduates to pay their government loans back as a percentage of their income; and Public Service Loan Forgiveness, which provides complete forgiveness after ten years of payments for those who work in public service (teachers, fire fighters, government employees, etc.). Both of these provisions are extremely helpful in managing educational debt, yet few people know about them - including those who work in government agencies. Equal Justice Works (www.equaljusticeworks.org) is a non-profit organization that is working to spread the word on these important programs - they should be part of this dialogue.
As a parent with two children in college and one on the way, my question is why, in an environment where the cost of borrowing money is at an all-time low for every other sector, student loans charge almost 7% interest (and parent plus loans almost 8%). My parents, living on their retirement savings, are receiving not even 3% interest on their money.
A more correct comment for the "average" student loan payment is $276 a month for 10 years, not a "simple $100 a month."
Source: Finaid.com
$24,000 in student loans after 4 years of schooling, at 6.8% for 10 years with a Bachelors degree.
Isn't there some way that people receiving these lower interest rates could provide some form of public service in exchange?
Did I hear correctly that the suggested solution for employers being unable to locate science degree holders is to bring in immigrants? As a biologist who is finding a tremendous amount of competition for each position announced, bringing in more competition from other countries is not the answer.