Student Loans

[Colleen27]

I know that every school system is different, but our HS has special offerings for first generation college-bound kids. I didn't look closely--my kids don't qualify--but it was either a class or social/after school group to help kids navigate the college scene, starting their freshman year. You know--how to apply, taking the SAT/ACTs, filling out the FAFSA, etc. I'm sure there was a heavy ESL component, to involve immigrant parents as much as possible.

Yeah, yeah, I know--I'm going to hear the wailing of "our school doesn't have that!", just like we hear for things like dual enrollment, early college, and AP classes. All I can say is, if you hear of ideas that you think could help students in your area, go to a school board meeting and advocate for change. Many ideas have been kicked around here, from community college to ROTC to using service hours to pay down student loans. There's always someone, somewhere who an idea won't work for. The perfect becomes the enemy of the good. Personally, I think the whole college industrial complex is broken, but I don't see any politician, anywhere, having the guts to take it on.

Around me, it isn't the perfect that is the enemy of the good. It is the appeal to tradition - this was good enough for me and good enough for my father, so is sure as heck is good enough for my kid - and a refusal to engage with the realities of how the working world has changed. Couple that with a worldview that is skeptical about "university brainwashing" and other such strawmen and there just isn't much public will to make it easier for kids to go on to a level of education a significant and vocal share of residents view as a scam or worse. Toss in a district in constant fiscal crisis because of state funding formulas - ours just restored pre-2008 recession levels of funding in 2019, without adjusting for inflation, but since that is per pupil and our district population is aging we're still faced with annual cuts just to keep the budget balanced - and implementing something like the early college program, which allows students to graduate with both a diploma and an associates, is seen as a luxury rather than a necessary way to help kids afford college.

Well if folks think that private loans will every be forgiven they are clueless, I think most realize we are talking about the federal loans given in the students names. I don’t think an amount over $10,000 has been mentioned, and students are limited to $27,500. Most people I know with loans believe they system needs to be fixed with the interest, and public universities should cost much less than they do. The majority of borrowers don’t get in trouble by attending $80,000 a year private universities, but just by attending in state flagships that should be affordable to those that can’t afford the privates.

Exactly. "Expensive private universities" and "worthless degrees" are convenient scapegoats but in reality, almost 80% of American undergrads go to public universities and some of the people struggling the most with student loan payments are in socially essential fields like teaching and social work. And though I can't find stats on it, I'll bet a good share of the 20% who are at private universities are kids like my daughter, who found that the private uni works out to be cheaper after accounting for a much more generous merit and need aid package there compared to the public unis that offered a couple grand in scholarships and loans for the rest.

 

[mom2rtk]

Exactly. "Expensive private universities" and "worthless degrees" are convenient scapegoats but in reality, almost 80% of American undergrads go to public universities and some of the people struggling the most with student loan payments are in socially essential fields like teaching and social work. And though I can't find stats on it, I'll bet a good share of the 20% who are at private universities are kids like my daughter, who found that the private uni works out to be cheaper after accounting for a much more generous merit and need aid package there compared to the public unis that offered a couple grand in scholarships and loans for the rest.

You know, I'm pretty strongly against across the board loan forgiveness. (And I consider something like has been proposed at 10K for those under 150K income to be across the board). But I would love to see some resources put into targeting some important areas. If the teacher loan forgiveness programs in place now aren't working, let's fix and expand those. If social workers are in short supply, set up some similar programs for them. I think they would find much broader support for something like that.

 

[mrodgers]

You know there are doctors who still have 200k in student loan debt right? You don't become a doctor or a lawyer and are instantly able to pay off your debt. It's still a huge, huge burden even for people who have, in your mind "worthwhile" degrees.

Most doctors I know of could have paid that $200k instead of spending it on a car and drove a Camry instead.

 

[mefordis]

I feel like a good portion of loans now are PLUS loans which I don't believe are on the table for forgiveness, are they?

 

[Pea-n-Me]

This conversation has made me wonder how we got where we are today? I did a little searching around but found that most articles on the subject are heavily biased. Obviously it’s a multi-faceted problem.

But the thing that caught my attention was charts like this one, showing how student loan debt took a sharp increase after around 2007-2010 - and kept going.




But why? Following the trail…

”The steep rise starting in 2010 can be partly explained by the elimination of the Federal Family Education Loan (FFEL) program, which allowed private lenders to make federally guaranteed student loans.

In 2010, Congress passed and the President signed into law a bill that eliminated the FFEL program for all new loans made as of July 1, 2010. All federal student loans have been made under the Direct Loan program as of that date….
The federal government now “essentially serves as the banker — it provides the loans to students and their families using federal capital (i.e., funds from the U.S. Treasury), and it owns the loans,.”

_________________________

”On 24 April 2009, President Barack Obama called for an end to the FFEL program, calling it a wasteful and inefficient system of "taxpayers...paying banks a premium to act as middlemen—a premium that costs the American people billions of dollars each year....a premium we cannot afford." A Congressional Budget Office review in July 2009 showed that if the government did the direct lending itself, rather than use private sector lenders via FFEL, it would save $80 billion over ten years. That estimate was later downgraded to $61 billion after the Congressional Budget Office revised its estimates for 2010.

The program was ended according to the provisions of the Student Aid and Fiscal Responsibility Act, which passed in 2010 as a rider bill to the Health Care and Education Reconciliation Act of 2010.”
__________________________

To the bolded: Is this $80 billion what they are referring to in today’s news which they now realize was a gross under-estimation and that the government is actually losing much more than that from these loans?
__________________________

[Referred to earlier in this thread:]
”The Education Department projected that student loans would generate $114 billion in income over the last 25 years. However, a new report shows that federal student loans have actually cost the government $197 billion, a $311 billion difference.

The findings come from a Government Accountability Office report released today that undermines a narrative from the department that the federal student loan program is generating income. The study, analyzing data on student loans between 1994 and 2021, found that the Education Department greatly underestimated how changes to loan programs and borrower behavior have impacted the federal student loan balance.”
___________________________

I’m sure there’s a lot more to the story. But this gives us a peek into at least part of what happened, once we start to piece together the puzzle.

It begs the questions 1) how are we to ever fix this problem? And 2) how would we possibly expect the government to run our healthcare system?

 

[QueenIsabella]

Around me, it isn't the perfect that is the enemy of the good. It is the appeal to tradition - this was good enough for me and good enough for my father, so is sure as heck is good enough for my kid - and a refusal to engage with the realities of how the working world has changed. Couple that with a worldview that is skeptical about "university brainwashing" and other such strawmen and there just isn't much public will to make it easier for kids to go on to a level of education a significant and vocal share of residents view as a scam or worse. Toss in a district in constant fiscal crisis because of state funding formulas - ours just restored pre-2008 recession levels of funding in 2019, without adjusting for inflation, but since that is per pupil and our district population is aging we're still faced with annual cuts just to keep the budget balanced - and implementing something like the early college program, which allows students to graduate with both a diploma and an associates, is seen as a luxury rather than a necessary way to help kids afford college.

That's not what I'm talking about (although it does happen, for sure). I'm talking about some useful suggestions that get shot down because they won't work for absolutely everyone:

Do Early college/dual enrollment/AP or IB classes--"Our school doesn't offer that!" (okay, but a lot of schools do)

Go the military route--ROTC or enlisting to get college money--"What about disabled kids?" (sure, it's not for everyone, but it's still a good option)

Go to community college--"We don't have a good one near us!" (again, okay, but a lot of people do. When I lived in the Northeast, community colleges were really looked down on. They should at least be looked at AS AN OPTION)

Work, and go to school part time--"But, what about the single mother with three jobs, trying to put food on the table for her kids?" (I'm sympathetic, but she clearly made some choices along the way that are going to make college exponentially harder)

Choose the less pricey option--"But, my DD has her heart set on this one animation program that costs $80k a year!" (sounds lovely, if there's a means to pay for it and a good shot at a decent-paying job at the end of the rainbow. Otherwise, look at a similar job with less expenses and/or better job prospects)

You get my point. Options, options, options.

 

[Mackenzie Click-Mickelson]

I feel like a good portion of loans now are PLUS loans which I don't believe are on the table for forgiveness, are they?

I do feel like I've heard of more and more parents taking out the loan as a PLUS loan. My father-in-law's wife did that for her son who graduated in 2020 IIRC or maybe it was 2021. Anywho he hasn't had the best success with his degree. Well he did work in the field of selling insurance which was related to his business degree but commissions weren't all that easy after a while (reality set in about the actual income opportunities). He then worked at Dick's Sporting Goods for a while. Not sure where he works now, should probably check at some point.

I don't know that I've heard of PLUS being included (which is also for grad students) in the plans.

 

[barkley]

"What about disabled kids?"

my youngest is disabled. the department of vocational rehabilitation has programs that can pay for college (he had several years worth paid in full including books, fees, supplies). in some states there is the 'developmental disabilitites administration' which can help as well. some scholarships earmarked for disabled students go entirely untapped b/c people just don't know to go looking for them (i informed a young friend of one i saw posted and reposted on a regional website and despite his disability not quite meeting the criteria suggested he reach out and inquire about it. this resulted in 4 years of signficant scholarship monies coming his way).

there are funds out there but it takes work hunting them down (helps to have someone advocating and assisting a disabled young person).

Work, and go to school part time

ideally looking to see if an employer offers any kind of tuition assistance/reimbursement as well! even the fast food places around us advertise about their programs-mc donalds will let you do on campus or online classes and offers up to $2500 per year towards tuition. yeah it's not much but it's $2500 less per year in potential loans (and it's not limited to f/t staff). i've known and worked side by side with people who took entry level jobs with companies and government entities entirely b/c they could avail themselves of college program financial assistance (know one in particular who did it at a university and scored them self, their dh and at least one of their kids a full free ride-yeah they were earning less for a handful of years but the offset against that combined tuition was phenomenal).

 

[QueenIsabella]

my youngest is disabled. the department of vocational rehabilitation has programs that can pay for college (he had several years worth paid in full including books, fees, supplies). in some states there is the 'developmental disabilitites administration' which can help as well. some scholarships earmarked for disabled students go entirely untapped b/c people just don't know to go looking for them (i informed a young friend of one i saw posted and reposted on a regional website and despite his disability not quite meeting the criteria suggested he reach out and inquire about it. this resulted in 4 years of signficant scholarship monies coming his way).

there are funds out there but it takes work hunting them down (helps to have someone advocating and assisting a disabled young person).



ideally looking to see if an employer offers any kind of tuition assistance/reimbursement as well! even the fast food places around us advertise about their programs-mc donalds will let you do on campus or online classes and offers up to $2500 per year towards tuition. yeah it's not much but it's $2500 less per year in potential loans (and it's not limited to f/t staff). i've known and worked side by side with people who took entry level jobs with companies and government entities entirely b/c they could avail themselves of college program financial assistance (know one in particular who did it at a university and scored them self, their dh and at least one of their kids a full free ride-yeah they were earning less for a handful of years but the offset against that combined tuition was phenomenal).

See, this is what I mean--there's stuff out there. Sometimes, you need to hunt.

My DS25 is autistic, plus he has anxiety and depression. He graduated from community college, after going there on public transportation (until the pandemic--he graduated in 2020). Now, he drives himself to the local State U (2 classes a semester--one online, this coming term). He also works full-time as a package handler for Fedex (and they offer some kind of tuition reimbursement--I'll ask him to look into it).

DD27 went to the pricey private U and took out loans. She's hoping for loan forgiveness-she teaches in a poor district-but is also paying on them. She took AP classes and tested out of some lower level classes.

DD19 is attending the local State U to save money for law school. Her IB diploma got a lot of beginning classes waived, so she's technically a junior.

DS16 is doing dual enrollment.

Four kids, same family, four different approaches.

 

[Colleen27]

I do feel like I've heard of more and more parents taking out the loan as a PLUS loan. My father-in-law's wife did that for her son who graduated in 2020 IIRC or maybe it was 2021. Anywho he hasn't had the best success with his degree. Well he did work in the field of selling insurance which was related to his business degree but commissions weren't all that easy after a while (reality set in about the actual income opportunities). He then worked at Dick's Sporting Goods for a while. Not sure where he works now, should probably check at some point.

I don't know that I've heard of PLUS being included (which is also for grad students) in the plans.

PLUS loans really started to blow up when the student borrowing limits went into place, because it left a big gap for many students between what they could finance on their own and the cost of actually getting a degree. It is a big and growing problem especially for kids from poorer homes - the max Pell grant plus max federal loan comes out to about half the cost of state universities here, so parents who didn't/couldn't save for college are under a lot of pressure to use PLUS loans to make up the difference if they want their kids to go to college. Which is a huge gamble with their own financial futures, one that I think a lot of parents from lower income brackets don't entirely understand.

I haven't really seen talk one way or the other about whether PLUS loans would be included in any forgiveness plan. Most of what I have read says "10,000 per borrower", which implies they might, at least for parents who don't also have their own loans that would be eligible, but no one is being particularly forthcoming with details so it could probably go either way.

See, this is what I mean--there's stuff out there. Sometimes, you need to hunt.

And sometimes the hunt comes up empty, which goes back to what I was saying earlier about individual level vs. systems level thinking. Focusing on the exceptions to the rule and saying everyone should just find a way to be exceptions is ignoring the fact that the problem is systemic and setting up a situation where those with the most means (not just financial but educated and supportive parents, good school districts, etc.) are able to do okay and subsequently become an argument that the problem is not in fact the system but rather a matter of individual shortcomings in those who don't find a way to work those exceptions to their advantage.

 

[LuvOrlando]

I can see the powers that be are working on some things, or so it says in the news, time will tell if they are genuinely wearing thinking caps or just going to push stuff around on the plate for optics.

 

[QueenIsabella]

And sometimes the hunt comes up empty, which goes back to what I was saying earlier about individual level vs. systems level thinking. Focusing on the exceptions to the rule and saying everyone should just find a way to be exceptions is ignoring the fact that the problem is systemic and setting up a situation where those with the most means (not just financial but educated and supportive parents, good school districts, etc.) are able to do okay and subsequently become an argument that the problem is not in fact the system but rather a matter of individual shortcomings in those who don't find a way to work those exceptions to their advantage.

If the hunt comes up empty, then you get a full-time job and go to school part time. It's a lot of work, but it's manageable, and you'll be that much prouder of yourself for having accomplished your goal. I'm really tired of people acting like there should be a government solution to every problem. Sometimes, the solution is to look at what's in front of you, and figure it out yourself. I'm not convinced the government has anybody's best interest at heart (except themselves), and every government "solution" seems to just create more, new, different problems. Heck, just look at what the government did in 2010 to "fix" the student loan issue. That fix has worked great, hasn't it?

 

[Mackenzie Click-Mickelson]

then you get a full-time job and go to school part time.

That's def. an option and I know it works on some people. Those who I knew tried that right out of high school either community college or 4 year school dropped out relatively soon after (within a year or two). Working took over. Same for gap years although a gap year did work on my ex, for everyone else I knew it just fell through. It was primarily financially motivated because they weren't making enough money wages-wise to pay for classes, books, course fees, etc.

I do see work and part time to be really good for those older, meaning someone is who is well-established in their life looking to fill in a previously unfilled portion of their education or furthering their own after saying so for many years, usually working out when there's a set job either during the day or nighttime and the schedule doesn't fluctuate and you have a set time you'll get done enough to accommodate classes. I remember I had a minor difficulty in scheduling when it came to working at JCP because my math class at the community college (taken in the summer) started at something like 3pm and sometimes they wanted to schedule me 2-10pm but well I had class couldn't do it. Now I could have done that when I was at the corporate job ONLY if the classes were Saturday and Sunday because when I first started I worked til 7pm but could work past that, it was whenever the phone call ended and while I had a set schedule it was unpredictable when I would get done. Even when my shift ended at 5:15pm there would be times I wouldn't get to close out til 6:30. This was a fairly normal call center insurance job with benefits full time.

People do it no doubt they do but I don't really know the percentage of success rate in combination with the trade off value in terms of income potential with time spent earning the degree. Haven't looked into that though.

 

[QueenIsabella]

That's def. an option and I know it works on some people. Those who I knew tried that right out of high school either community college or 4 year school dropped out relatively soon after (within a year or two). Working took over. Same for gap years although a gap year did work on my ex, for everyone else I knew it just fell through. It was primarily financially motivated because they weren't making enough money wages-wise to pay for classes, books, course fees, etc.

I do see work and part time to be really good for those older, meaning someone is who is well-established in their life looking to fill in a previously unfilled portion of their education or furthering their own after saying so for many years, usually working out when there's a set job either during the day or nighttime and the schedule doesn't fluctuate and you have a set time you'll get done enough to accommodate classes. I remember I had a minor difficulty in scheduling when it came to working at JCP because my math class at the community college (taken in the summer) started at something like 3pm and sometimes they wanted to schedule me 2-10pm but well I had class couldn't do it. Now I could have done that when I was at the corporate job ONLY if the classes were Saturday and Sunday because when I first started I worked til 7pm but could work past that, it was whenever the phone call ended and while I had a set schedule it was unpredictable when I would get done. Even when my shift ended at 5:15pm there would be times I wouldn't get to close out til 6:30. This was a fairly normal call center insurance job with benefits full time.

People do it no doubt they do but I don't really know the percentage of success rate in combination with the trade off value in terms of income potential with time spent earning the degree. Haven't looked into that though.

True, but that's on the individual. Even back in the Stone Age, when I was in school, there were many "older" (by which I mean, mid-20's) students who had gone back to school. They had either worked full-time for a few years, or were currently working and going to school part-time. In my experience, they were much more focused and motivated than the "young" kids (i.e., 18 and 19yos), because they'd been in the work world and really knew what they wanted.

 

[nw6675]

If the hunt comes up empty, then you get a full-time job and go to school part time. It's a lot of work, but it's manageable, and you'll be that much prouder of yourself for having accomplished your goal. I'm really tired of people acting like there should be a government solution to every problem. Sometimes, the solution is to look at what's in front of you, and figure it out yourself. I'm not convinced the government has anybody's best interest at heart (except themselves), and every government "solution" seems to just create more, new, different problems. Heck, just look at what the government did in 2010 to "fix" the student loan issue. That fix has worked great, hasn't it?

Granted, this was almost 30 years ago, but I got an entry level job in a medical practice after hs graduation. After a couple of years and several promotions, I used their tuituon reimbursement and took full time evening classes at a local university. I still graduated in 4 years, almost no debt.

It was hard and at times I cried having to work 40 and FT school. However, that work resulted in a corporate management career making well into 6 figures by age 28..

 

[Mackenzie Click-Mickelson]

True, but that's on the individual. Even back in the Stone Age, when I was in school, there were many "older" (by which I mean, mid-20's) students who had gone back to school. They had either worked full-time for a few years, or were currently working and going to school part-time. In my experience, they were much more focused and motivated than the "young" kids (i.e., 18 and 19yos), because they'd been in the work world and really knew what they wanted.

Times were different back then. I was making under $6 an hour at 2 of my retail places while in college only getting a raise at one when Federal was raised, costs of college is sky high now and it was already bad enough then.

I chose to comment because you said "well then you.." which in theory is true but sorta is like the "pull up your bootstraps you'll be fine".

When I was saying olderI meant older..not mid-20s lol. I meant at LEAST mid-30s but more like 40s. A big reason I was saying that was time spent in one's career, you're well established typically have steady income and time spent in the workforce for a job that hopefully allows that flexibility.

All my friends my age and none really went back to school if they attempted and left. Lack of motivation was not a big reason in the end and normally I'm really big about personal motivation. The trade off just wasn't there to them personally.

As far as choice about jobs..I graduated in 2010 I was lucky to find a job, one with decent enough pay, benefits and time off. Beggars could not be choosers then. I was even lucky to get interviews at places as they were swamped with 40s, 50s and 60 year olds who had been forced out and while they could hire 22 year old me on the cheap they could hire people with decades of experience. The job market was horrible then. Not like my friends either had much options to move on up.

Perspective is relative to one's experience. I bet we'll have some interesting perspectives for these kids who have grown up especially middle and high school during this pandemic with how much education has been turned on its head.

 

[QueenIsabella]

I still have more faith in the pluck and ingenuity of a motivated HS graduate than I do with any government program.

 

[leebee]

Obviously this thread is meandering, but it's just not the way it was back in the 70s and 80s. I went to a 2 year school for my AAS, worked 3 part time jobs (so 40 or more hours a week, no benefits of course) to pay tuition and keep the roof over my head. I transferred to Cornell for my BS. Managed to get a work-study job around my classes, and the endowment scholarship money was good; I think I only borrowed about $5K over 2 years, even living in a dorm. I don't think it's possible to do that anymore. I live in a small, isolated college town. Rent on crappy studio apartments is $700+ a month, and I'm talking places that are musty and smell of old cigarette smoke. Other options are the college housing conglomerates, where $600 a month gets you your own mini-bedroom in a 4br apartment, often with strangers. These locations are party-central, and most unsuspecting students only stay one year. However... it's a 12 month lease EVERYWHERE here, which means $7200 right off the top before you consider internet, electricity, heat, phone, food- before ever considering the cost of education. Minimum wage in Maine is $12.15 an hour, and many part-time jobs don't pay much more than that. It's all well and good to say live at home, go to community college, work part time or go to school part time, get scholarships (and that doesn't always work out, even for the kids who are qualified... DD missed out on $5K a year in merit money due to the way her HS handled college applications, it was an gross error and everyone was very apologetic, but in the long run that's $20K of the $25K she borrowed for college). I just get tired of hearing "I did it, so can you" when really, EVERYTHING has changed in the last 20 years, not everyone is fortunate or in the position of being able to do what "you" did, etc. Wears me out.

 

[mjkacmom]

Obviously this thread is meandering, but it's just not the way it was back in the 70s and 80s. I went to a 2 year school for my AAS, worked 3 part time jobs (so 40 or more hours a week, no benefits of course) to pay tuition and keep the roof over my head. I transferred to Cornell for my BS. Managed to get a work-study job around my classes, and the endowment scholarship money was good; I think I only borrowed about $5K over 2 years, even living in a dorm. I don't think it's possible to do that anymore. I live in a small, isolated college town. Rent on crappy studio apartments is $700+ a month, and I'm talking places that are musty and smell of old cigarette smoke. Other options are the college housing conglomerates, where $600 a month gets you your own mini-bedroom in a 4br apartment, often with strangers. These locations are party-central, and most unsuspecting students only stay one year. However... it's a 12 month lease EVERYWHERE here, which means $7200 right off the top before you consider internet, electricity, heat, phone, food- before ever considering the cost of education. Minimum wage in Maine is $12.15 an hour, and many part-time jobs don't pay much more than that. It's all well and good to say live at home, go to community college, work part time or go to school part time, get scholarships (and that doesn't always work out, even for the kids who are qualified... DD missed out on $5K a year in merit money due to the way her HS handled college applications, it was an gross error and everyone was very apologetic, but in the long run that's $20K of the $25K she borrowed for college). I just get tired of hearing "I did it, so can you" when really, EVERYTHING has changed in the last 20 years, not everyone is fortunate or in the position of being able to do what "you" did, etc. Wears me out.

My daughter pays $1300 a month for her bedroom, used to pay $750 for her room in a 6 bedroom apartment in a cheaper state. $750 is cheaper than a bedroom in her home town.

 

[Southernmiss]

Obviously this thread is meandering, but it's just not the way it was back in the 70s and 80s. I went to a 2 year school for my AAS, worked 3 part time jobs (so 40 or more hours a week, no benefits of course) to pay tuition and keep the roof over my head. I transferred to Cornell for my BS. Managed to get a work-study job around my classes, and the endowment scholarship money was good; I think I only borrowed about $5K over 2 years, even living in a dorm. I don't think it's possible to do that anymore. I live in a small, isolated college town. Rent on crappy studio apartments is $700+ a month, and I'm talking places that are musty and smell of old cigarette smoke. Other options are the college housing conglomerates, where $600 a month gets you your own mini-bedroom in a 4br apartment, often with strangers. These locations are party-central, and most unsuspecting students only stay one year. However... it's a 12 month lease EVERYWHERE here, which means $7200 right off the top before you consider internet, electricity, heat, phone, food- before ever considering the cost of education. Minimum wage in Maine is $12.15 an hour, and many part-time jobs don't pay much more than that. It's all well and good to say live at home, go to community college, work part time or go to school part time, get scholarships (and that doesn't always work out, even for the kids who are qualified... DD missed out on $5K a year in merit money due to the way her HS handled college applications, it was an gross error and everyone was very apologetic, but in the long run that's $20K of the $25K she borrowed for college). I just get tired of hearing "I did it, so can you" when really, EVERYTHING has changed in the last 20 years, not everyone is fortunate or in the position of being able to do what "you" did, etc. Wears me out.

Best post of this thread