Student Loans

[TwoMisfits]

Ok lets say your kids lived in NJ. How would’ve they afforded college?

My siblings did - they went to Rowan and lived at home. You can still do that for the same cost as a year of Catholic high school in NJ ($16K/year for tuition and books). Take a summer FT job and you get by on just the federal subsidizized loans even if you get no help from the specific NJ merit and need-based programs, of which there are many. You can do this same calculus at almost all the public schools in NJ...

 

[Pea-n-Me]

I just wish the payments on student loans would be tied to the graduate's income. A new teacher making $40,000 per year should not have to make the same high payment as a new attorney making $100,000 per year.

Reading through some of the articles on the subject that @Kennywood brought up, that seemed to be part of the problem of how the government lost track of what their returns on student loans would be - they were unable to get accurate data on how much borrowers were actually earning. So it sounds like, at least currently, they don’t know who’s making what.

 

[Mackenzie Click-Mickelson]

just adds more Interest

That was one of the reasons I think in hindsight reducing the interest but not pausing the payments was the better way to go once the decision was made "we have to do something" I know it's really hard to think back to almost 2 and a half years ago but many of us had no idea what the heck we were going to do with the pandemic. People were losing jobs, 401Ks were being impacted, everyone was stressed no one knew what we were dealing with, it was a mess. And at that time so early on the government didn't know what was what so they thought well if we're having suddenly people required to not work how are they going to pay? And that was also with a while's worth of pressure about our student loan issues as a nation.

However, a zero interest would have sped up repayment in the long-term and the pause in loans only serve to kick the bucket down the road further. Unless you made payments while you weren't adding more time you were not gaining any time. My husband and I were able to pay every month sometimes more because we did not want to add on more time but we left it where we manually made payments as a safety blanket. My sister-in-law who made well enough money opted to skip a few payments here and there, she's a good payer and all but made a decision that month or that other month to pull back those funds and not pay. I know she'll make up the time but many just can't. So many of our situations are different now and every time the deadline has come close the servicers are warning they don't know how they can cope with the influx of sudden restarting of payments.

 

[mjkacmom]

My siblings did - they went to Rowan and lived at home. You can still do that for the same cost as a year of Catholic high school in NJ ($16K/year for tuition and books). Take a summer FT job and you get buy on just the federal subsidizized loans even if you get no help from the specific NJ merit and need-based programs, of which there are many. You can do this same calculus at almost all the public schools in NJ...

My son is going to Montclair state to save money since he’s not sure what he wants, we are not eligible for any financial aid. He skipped s year so no merit (I’m not aware of any NJ based merit programs and I’ve lived here my entire life). My kids all work at least full time in the summer, but most of that money covers expensive throughout the year (my kids away at college also work part time during the year to pay rent and food). He will only have about $30,000 in loans because he has $30,000 in his 529 (same as the other 4 kids). The oldest went in state to Rutgers and TCNJ because they have better business programs, both got great internships junior year and great job offers before graduation. So many graduate college but can’t find immediate employment. The person I was replying to lives in a state where it is possible to get free money for college.

 

[luv2cheer92]

I think Villanova was actually the only school that offered any FA, I think it was $8000 a year which doesn’t even touch the $70,000 a year. I don’t know when you went to college but my youngest started in 2014 and things have changed even since then. As for her graduate program, it’s to get her doctorate in PT, a career she’s been interested in since she was 13. Many encouraged her to go to med school, but that’s $300,000+ and she really wants to be a physical therapist. She works to pay for rent and food which is about $1500 month.

I can vouch for PT. That is what I wanted to do, and all I wanted to do. I wouldn't be happy doing anything else. There is only one way to do it, and it's to get a very expensive Doctorate degree. Some schools are a little cheaper than others, but there isn't much variance. I got my DPT a little over 6 years ago and graduated with just over 200K in debt between undergrad and grad. My total pre-Covid was up to 215K. Yep, even with making my payment every single month, the interest was making my total go up, not down.
Average PT salary with a Doctorate degree is around 75-80K, usually a little lower as a new grad. It's easy to look past that debt to income ratio when it is your dream job and all you want to do.

 

[disykat]

I also brag about my kids who made really good choices and spent as little as possible on their schooling. I'm proud of them and of how we raised them and encouraged that. I can do that with still understanding that many students had no choice but to take out some loans. I know exactly how much my own kids would have had to take out it loans if I hadn't contributed and while no one likes to have a big bill like that hanging over their heads, it would have been manageable on their incomes - because of their choices. It would've been a car sized loan, not a mortgage sized loan. They might have even taken on a supplemental job for a year or two or kept living well under their paygrade (like I did when I got out of school) and paid it off. When I hear about people with over 100K in loans for a bachelors, I don't feel sorry for them for their loans, I feel sorry for them for their poor decision making.

I have personally known way too many students who made really bad choices getting expensive degrees they didn't use or in some cases never finished. I am not against education for education's sake, but I am against taking out massive loans for that. To me, there's a difference between taking out car sized loans and house sized loans - and I simply don't believe in taking out house sized loans for college unless you will come out with higher level degrees and a big enough salary to afford both that and your actual house.

I think continuing to remind on these threads that there are ways to cut back on the need for student loans and that searching for options where you will spend less is important. I think it's an IMPORTANT part of the conversation to discuss how to PREVENT the unaffordable student loans. Too many people (many that I've known personally) take the attitude that since they have to take out loans, what they spend doesn't matter and they'll worry about it later. That attitude is hard to stomach if I feel like my tax dollars will be paying for their choice.

 

[kymom99]

I also brag about my kids who made really good choices and spent as little as possible on their schooling. I'm proud of them and of how we raised them and encouraged that. I can do that with still understanding that many students had no choice but to take out some loans. I know exactly how much my own kids would have had to take out it loans if I hadn't contributed and while no one likes to have a big bill like that hanging over their heads, it would have been manageable on their incomes - because of their choices. When I hear about people with over 100K in loans for a bachelors, I don't feel sorry for them for their loans, I feel sorry for them for their poor decision making.

I have personally known way too many students who made really bad choices getting expensive degrees they didn't use. I am not against education for education's sake, but I am against taking out massive loans for that. To me, there's a difference between taking out car sized loans and house sized loans - and I simply don't believe in taking out house sized loans for college unless you will come out with higher level degrees and a big enough salary to afford both that and your actual house.

I think continuing to remind on these threads that there are ways to cut back on the need for student loans and that searching for options where you will spend less is important. I think it's an IMPORTANT part of the conversation to discuss how to PREVENT the unaffordable student loans. Too many people (many that I've known personally) take the attitude that since they have to take out loans, what they spend doesn't matter and they'll worry about it later. That attitude is hard to stomach if I feel like my tax dollars will be paying for their choice.

I was also thinking there are mixed messages towards these young adults. The university tells them they are adults and they don’t have to share info with parents. But on the other hand, as pointed out, they have to report parent income and assets on the aid forms. So these kids think they can conquer the world and will be making a bunch of money when they graduate, even if the job prospects don’t support those beliefs. Parents may try to warn their kids but they don’t have to listen. And they may not tell their parents what kind of hole they are digging.

So I do think young people are in some cases taken advantage of. People make fun of “helicopter parents” but then we expect these young people to make sound decisions in their own.

I’ll repeat that while I don’t think loan forgiveness is the answer, the whole system needs an overhaul.

 

[Mackenzie Click-Mickelson]

People make fun of “helicopter parents” but then we expect these young people to make sound decisions in their own.

I totally agree with what you're saying but there's def. a difference between helicopter parenting and engaged parenting. One overtakes control of their child's life the other (like I think many parents fall into) has discussions repeatedly over time throughout their public education days with open and honest communication that is both listening and advice giving. I'd give the benefit of the doubt that most parents are actually engaged parents not helicopter ones.

I've long since thought though that we should have some classes in schools to help out, as has been pointed out parents don't always know or are not the best person to go to. Financial advice from my mom given her situation would not have been the correct path to go even though she was my mother. And for her mom during those days the man was the one who had all the finances (the checking account the credit cards, etc).

 

[mjkacmom]

I can vouch for PT. That is what I wanted to do, and all I wanted to do. I wouldn't be happy doing anything else. There is only one way to do it, and it's to get a very expensive Doctorate degree. Some schools are a little cheaper than others, but there isn't much variance. I got my DPT a little over 6 years ago and graduated with just over 200K in debt between undergrad and grad. My total pre-Covid was up to 215K. Yep, even with making my payment every single month, the interest was making my total go up, not down.
Average PT salary with a Doctorate degree is around 75-80K, usually a little lower as a new grad. It's easy to look past that debt to income ratio when it is your dream job and all you want to do.

We are fortunate to live in a higher income area, she will most likely be working in NYC or right outside in the Hackensack area, so many medical facilities. She’s worked in a few PT centers already.

 

[mrodgers]

But wait, I thought doctors could EASILY pay off their student loan debt. Isn't that what @mrodgers said?

Do you know of any doctors who are living in a tiny "starter home" as this forum likes to offensively call my home when I had it? Or are they all living in enormous houses that their student loans allowed them to buy with mortgages that make the student loan payment look like pocket change? I think that is the bad decisions people are always mentioning when dissing on poor people who don't make a lot of money. I would think it would not be a wise decision to buy the million dollar home when you have $300,000 in student loans. No sympathy from me if you have a mortgage 3-4 times larger so you can't pay your student loan.

 

[amylevan]

My son is going to Montclair state to save money since he’s not sure what he wants, we are not eligible for any financial aid. He skipped s year so no merit (I’m not aware of any NJ based merit programs and I’ve lived here my entire life). My kids all work at least full time in the summer, but most of that money covers expensive throughout the year (my kids away at college also work part time during the year to pay rent and food). He will only have about $30,000 in loans because he has $30,000 in his 529 (same as the other 4 kids). The oldest went in state to Rutgers and TCNJ because they have better business programs, both got great internships junior year and great job offers before graduation. So many graduate college but can’t find immediate employment. The person I was replying to lives in a state where it is possible to get free money for college.

NJ Stars. FREE community college to any nj student graduating with a 3.25.

 

[mjkacmom]

NJ Stars. FREE community college to any nj student graduating with a 3.25.

I believe it’s those in the top 15% of their class, unfortunately ds, with an unweighted 3.6 didn’t make the cut (his twin got the letter). All of my daughters made the cut, not my sons.

 

[barkley]

As far as going to "cheaper" colleges/universities... does the "cheaper" school offer what the student needs to be successful? Does it offer the degree? Does it offer the resources?

for something like teaching k-12 individual states mandate what their certification (or when i got mine back in the day 'credential') requirements entail. in order for an individual school to be accredited they must provide the identical minimum standards.

That is your state

if you are speaking to the comment i made about a dual enrollment program, yes-it's in my state but it's not exclusive to my state. there are many states that offer free or reduced cost college courses to juniors and seniors in high school.

if you are speaking to the difference in cost between colleges, yes-this is for my state however my former state (where i received my degree/credentialing at the 'cheaper' college)-the difference in the area where i lived is currently $8000 per academic year vs. the identical education/curriculum at the name private going for $33.700 per academic year.

Being a long time teacher, I can promise you that where you got our degree has very little to do with your ability to get a job. I’d venture to say the same goes for nursing. They are so short staffed that as long as you pass your boards you can get hired.

we did our student teaching placements side by side with the students from the expensive schools-it was a level learning experience and our credentials didn't indicate where we got our degrees. i agree on the nursing as well-there are currently some spectacular opportunities through our local hospitals that include wages, benefits and tuition reimbursement for students to pursue nursing.

 

[disykat]

Do you know of any doctors who are living in a tiny "starter home" as this forum likes to offensively call my home when I had it? Or are they all living in enormous houses that their student loans allowed them to buy with mortgages that make the student loan payment look like pocket change? I think that is the bad decisions people are always mentioning when dissing on poor people who don't make a lot of money. I would think it would not be a wise decision to buy the million dollar home when you have $300,000 in student loans. No sympathy from me if you have a mortgage 3-4 times larger so you can't pay your student loan.

I totally agree! I actually remember when this kind of switched, at least where I grew up. My dad was a doctor. My parents bought their first home when dad was 34 and had already been out of school + his military time (required at the time for doctors in the aftermath of the Korean War.) for a few years. It was a 3 bedroom starter rambler that they never left, although I did notice that our vacations started involving airplanes etc. sometimes when I was about 5th grade. In the 70's I babysat for many of his colleagues and most were in starter homes until they were at least 10 years out of med school. Then all of a sudden in the late 70's any beyond the new docs coming in were buying at a totally different level.

I feel that same way across the board - that the expectation of luxury is just at a much higher level. People want to live like their parents right away or like people they see on tv.

 

[Colleen27]

A new report from the Government Accountability Office details a breathtaking discrepancy between what the federal government claimed the student loan program would generate, and what it actually costs taxpayers. As GAO explains: “Although the Department of Education originally estimated federal Direct Loans made in the last 25 years would generate billions in income for the federal government, its current estimates show these loans will cost the government billions.”

That’s right, instead of “making” $114 billion for taxpayers as the Department of Education originally claimed, the federal student loan program actually costs taxpayers $10 billion annually, costing $197 billion since 1997 — a $311 billion discrepancy.

Am I the only one who has a real issue with that first set of numbers? Why should funding higher education MAKE money for the federal government in the first place? Isn't it meant to be a public good, ie something that COSTS the government money but is worth having, like roads or primary education or the FDA?

Feel free to call me any name you choose. Doesn’t bother me. I will repeat, since this thread pertains to student loans - My kids did dual enrollment in high school, took AP classes for college credit, went to an in - state school for the Hope scholarship, all so they didn’t have to get student loans. I guided them the whole way. They also got degrees where they can support themselves. If that makes me boastful and an awful person, so be it. It also makes me someone who helped her kids be successful. And yes, I am proud they are successful.

There are other ways of getting college degrees without taking on mountains of debt. Parents need to guide their kids so they aren’t trapped under such high loads of debt.

I think a lot of the pushback you're getting is because you don't see how good fortune and factors outside the student's (and parents') control play into the ability to do things the way your kids did. Even something as simple as AP classes or dual enrollment often boils down to geography - if the parents can't afford a home in a good school district that offers those things, or if they live in a rural area where even good schools lack them, then the student has no choice but to take all their college credits at college prices. I live in a small town with small schools. Most years, no AP classes are offered because the student body is so small that not enough kids sign up to justify running them. The school budget can't absorb class sections of 10 or 12 kids. Dual enrollment is an option, and post-pandemic more are taking advantage because more classes are being offered online and the district dropped the requirement for DE to be done in person. But up until 2020, being able to benefit from dual enrollment required having transportation to the county seat, 30 miles away, to get to in-person classes. That meant most kids from poorer homes, single parent households, etc. didn't have the option while kids from middle/upper middle class families did.

 

[Southernmiss]

People have no clue how fortunate they really are.

 

[dreamer17555]

We also really haven’t touched on the fact that the cost of schools is up so high because one of the ways that they move up in ranking is per student spending so money spent on new dorms athletic facilities etc. contributes to the ranking of best school which generates more applicants more interest more alumni dollars.

This ranking and rating of schools has caused a lot of damage. The entire formula on how it’s calculated is a problem. How people look at those rankings and use them to decide what is T20 school and worth going to is even more upsetting.

 

[notatallmagic]

We are very fortunate in our state. High schools offer a dual enrollment program where high school kids can take college courses for free, beginning in 9th grade (in person or online - it depends on your district). And tuition alone is very affordable for state schools (and private ones if you apply for scholarships and have decent grades and scores).

My oldest did 8 college courses in high school, and spent Covid at home time researching and applying for every scholarship she could find. She did end up at her first choice school (private and out of state), but between working 40 hours/week during high school summers and now 50+ during college summers, scholarships, and working part-time at college, she will graduate with no student loans and a BSN with great income potential.

I made it clear to both kids that I would NOT be co-signing any student loans, and that my expectation was that they not have any. I also made it clear that their major should be something readily employable. My son is still in high school; will also take at least 4 college courses next year; and plans to commute to a local state school. If he just earns what he did this summer, and works 12 hours/week during the school year, he will also be able to pay for college AND buy the car needed to commute (his sister doesn't have or need a car at college - HUGE cost savings).

So, college CAN be done without debt; but it requires research, hard work, and lots of sacrifices. My kids aren't spending summers and breaks on expensive vacations, or driving shiny new cars. But they also won't have the burden of college debt. Repsonsible finances are all about choices and trade-offs. It's a shame so many young people didn't know or understand that.

 

[nycdisneygal]

Do you know of any doctors who are living in a tiny "starter home" as this forum likes to offensively call my home when I had it? Or are they all living in enormous houses that their student loans allowed them to buy with mortgages that make the student loan payment look like pocket change? I think that is the bad decisions people are always mentioning when dissing on poor people who don't make a lot of money. I would think it would not be a wise decision to buy the million dollar home when you have $300,000 in student loans. No sympathy from me if you have a mortgage 3-4 times larger so you can't pay your student loan.

Agree!! It did take me 20 yrs to pay off my med school loans but thats partly since I had 9 years of training after medical school where we dont get paid much but then I started extra payments like crazy. My house by many standards would be considered a starter home and I drive a subaru and cook dinner for my family. It does not make sense that a 68 yr old doctor is still paying off loans. Something is wrong there. PS I listen to Dave Ramsey while driving home at night.

 

[sam_gordon]

Do you know of any doctors who are living in a tiny "starter home" as this forum likes to offensively call my home when I had it? Or are they all living in enormous houses that their student loans allowed them to buy with mortgages that make the student loan payment look like pocket change? I think that is the bad decisions people are always mentioning when dissing on poor people who don't make a lot of money. I would think it would not be a wise decision to buy the million dollar home when you have $300,000 in student loans. No sympathy from me if you have a mortgage 3-4 times larger so you can't pay your student loan.

I don't know any doctors. At least not well enough to know what kind of house they have. How many do you know?