Why do lenders do this?

[MrsPete]

MrsPete - You daughter's college wants her to take on debt? That's sad and has not been the case at the four UNC system universities my sons have attended/will attend.

We're gotten three or four offers for private student loans. My son has not gotten a single credit card offer, though, which makes me wonder (happily) what list he isn't on.

Yes, I didn't expect the college to take this stance! I've been on the phone with the financial aid office several times this past week because we're having trouble getting her scholarships credited to her account . . . and they keep saying, "She hasn't yet accepted her two loans. Don't you want her to do that now?" And they're willing to loan WAY BEYOND the cost of her education!

I really see how so many students end up with debt. They don't even have to seek it out -- well, yes, in all fairness, she has these offers only because we did the FAFSA. But they seem determined that we're going to take the loans.

Yes, our mailboxes are full of offers for private loans lately. They seem well-timed given that bills just came out this week.

 

[Praying Colonel]

I forget the comedienne's name, but I heard one talking about walking into Nordstrom and they were handing out credit card applications and she was told she was pre-approved. She said, "Great! See you in court!"

I think of her when I see the outrageous amounts people who have no business borrowing that amount are pre-approved to borrow.

 

[furb & dez]

Navigating the world of first cars, first houses, starting retirement savings is tough -- and much of the information out there is conflicting: On the one hand we hear that "we deserve" this and that lifestyle, on the other hand we hear that we need to live within our means and save.

And this is the problem. No one "deserves" anything.

 

[livndisney]

My dad was a CPA, yet had little grasp of his own personal finances. Being good with numbers, being able to balance other people's money, being able to find mistakes in the millions . . . doesn't always translate into personal responsibility when it comes down to "My old truck is in decent shape, and I should keep driving it another two years, save for a good downpayment, THEN buy something shiney and sexy." It doesn't translate when so many parts of society push just-graduated kids to start living large, to throw caution to the wind in their young professional years (before they're forced to settle down to the mini-van).

Sounds like an excuse to me. A CPA who does not have a good grasp on personal finances? I don't see that as "society" problem. That is a personal responsibility problem.

I have yet to see salesmen with loaded weapons MAKING people buy things.

 

[MrsPete]

And this is the problem. No one "deserves" anything.

No, we don't deserve anything -- not in the sense that advertisers mean it. I think McDonalds was the first to really jump on the deserving bandwagon with that well-known "You deserve a break today" phrase (you're singing it in your head right now, aren't you?). But plenty of other advertisers have adopted the idea that because you're a good, hardworking person you deserve this or that luxury.

 

[MrsPete]

Sounds like an excuse to me. A CPA who does not have a good grasp on personal finances? I don't see that as "society" problem. That is a personal responsibility problem.

I have yet to see salesmen with loaded weapons MAKING people buy things.

What I'm saying is that having KNOWLEDGE doesn't always translate into MAKING GOOD DECISIONS -- that's no excuse; it's just a fact.

Here's an example: Every last one of us knows how to lose weight. Eat less, move more. It isn't a secret. Why then is anyone overweight? Simple: Knowing the answer doesn't always mean that we'll follow through with the right choices. Making the right choices means choosing the more difficult path day after day, week after week. Just knowing equals nothing. Yes, that's personal responsibility.

However, society does play into it as well. We have temptations everywhere: Spend here, go into debt for that, this will improve your life so much, you owe it to your family, deal of a lifetime, save money in the long run, do it while your kids are still small, some things are more important than money, this is an investment, low interest rates, it is smart to buy this item, everyone else is in debt too. Unless you're determined each and every day to see those temptations for what they are and unless you're more vigilant than most, you'll fall for some of those ploys at some point. That's society's constant assault against your personal responsibility.

 

[livndisney]

What I'm saying is that having KNOWLEDGE doesn't always translate into MAKING GOOD DECISIONS -- that's no excuse; it's just a fact.

Here's an example: Every last one of us knows how to lose weight. Eat less, move more. It isn't a secret. Why then is anyone overweight? Simple: Knowing the answer doesn't always mean that we'll follow through with the right choices. Making the right choices means choosing the more difficult path day after day, week after week. Just knowing equals nothing. Yes, that's personal responsibility.

However, society does play into it as well. We have temptations everywhere: Spend here, go into debt for that, this will improve your life so much, you owe it to your family, deal of a lifetime, save money in the long run, do it while your kids are still small, some things are more important than money, this is an investment, low interest rates, it is smart to buy this item, everyone else is in debt too. Unless you're determined each and every day to see those temptations for what they are and unless you're more vigilant than most, you'll fall for some of those ploys at some point. That's society's constant assault against your personal responsibility.

Personal responsibility. NO ONE has to buy the most expensive anything. NO ONE has to buy more than they can afford, no matter how you want to try and twist or shift blame. Temptation is a choice. Blaming "society" for a choice you made is nothing more than an excuse.

 

[scbelleatheart]

What I'm saying is that having KNOWLEDGE doesn't always translate into MAKING GOOD DECISIONS -- that's no excuse; it's just a fact.

Here's an example: Every last one of us knows how to lose weight. Eat less, move more. It isn't a secret. Why then is anyone overweight? Simple: Knowing the answer doesn't always mean that we'll follow through with the right choices. Making the right choices means choosing the more difficult path day after day, week after week. Just knowing equals nothing. Yes, that's personal responsibility.

However, society does play into it as well. We have temptations everywhere: Spend here, go into debt for that, this will improve your life so much, you owe it to your family, deal of a lifetime, save money in the long run, do it while your kids are still small, some things are more important than money, this is an investment, low interest rates, it is smart to buy this item, everyone else is in debt too. Unless you're determined each and every day to see those temptations for what they are and unless you're more vigilant than most, you'll fall for some of those ploys at some point. That's society's constant assault against your personal responsibility.

Very true MrsPete. My parents were very frugal. Dad is a CPA. Retired at 36. Now living in FL retired. My DH's family liked to live large. Yes, he makes most of the money and I hoard mine just in case. I have 4 adult kids, 2 hoarders, 2 spenders.
I just cannot get it across to the one spender to look toward the future and save the money he makes.
That may make me a cheapskate but I like the security. DF took all our gift money as children and invested it in stocks and bonds. I get a nice dividend check each month.
I just need to it to sink in to my 22 year old that he really does not need a $30,000 SUV. Heck, I drove Mavericks and Pintos at that age. BTW, He is currently driving a 2004 Jaguar on my dime.

 

[Colleen27]

There is a disconnect between the way people think and the way lending works right now... It used to be that the person selling you a loan, especially for big-ticket purchases like mortgage and car loans, was affiliated with the company extending the credit. Therefore, borrower and broker had a mutual interest in determining a realistic, affordable loan amount and terms. But right now, most people looking to sell loans have no relationship with the lender that will ultimately be servicing the loan and thus no motivation to consider long-term prospects for that loan; commission is the only concern so of course they push consumers towards larger debts. And less savvy consumers get caught up in the contradiction between old-fashioned thinking and current reality.

 

[MrsPete]

Personal responsibility. NO ONE has to buy the most expensive anything. NO ONE has to buy more than they can afford, no matter how you want to try and twist or shift blame. Temptation is a choice. Blaming "society" for a choice you made is nothing more than an excuse.

You're still so focused on blame that you're missing the larger point, but whatever.

 

[livndisney]

You're still so focused on blame that you're missing the larger point, but whatever.

I am not the one missing the point.

 

[punkin]

Yes, I didn't expect the college to take this stance! I've been on the phone with the financial aid office several times this past week because we're having trouble getting her scholarships credited to her account . . . and they keep saying, "She hasn't yet accepted her two loans. Don't you want her to do that now?" And they're willing to loan WAY BEYOND the cost of her education!

I really see how so many students end up with debt. They don't even have to seek it out -- well, yes, in all fairness, she has these offers only because we did the FAFSA. But they seem determined that we're going to take the loans.

Yes, our mailboxes are full of offers for private loans lately. They seem well-timed given that bills just came out this week.

Very strange. We fill out the FAFSA. DD's college offered her some aid and $7500 in unsubsidized Stafford Loans (that's the max); we declined the loan portion; they sent a tuition bill. I can't imagine "pushing" loans. Are they getting a kickback or something?

 

[clh2]

I just need to it to sink in to my 22 year old that he really does not need a $30,000 SUV. Heck, I drove Mavericks and Pintos at that age. BTW, He is currently driving a 2004 Jaguar on my dime.

I'm confused...how is he driving a 2004 Jag on your dime?

 

[Marionnette]

Very strange. We fill out the FAFSA. DD's college offered her some aid and $7500 in unsubsidized Stafford Loans (that's the max); we declined the loan portion; they sent a tuition bill. I can't imagine "pushing" loans. Are they getting a kickback or something?

My son's school is the same thing as Mrs.Pete's daughter's school. Will only filled out FAFSA because my daughter's scholarship required it. We didn't want any loans for our sons. But our older son's school sent letter after letter to remind us to get him to complete the online promissory note.

When I called the financial aid office to inform them that he was declining the loan, the woman got very snippy with me and informed me that he had to go online and decline it. We could not simply ignore the offers. We had to specifically decline the money we didn't want.

Some of this may stem from it being a state university. Our daughter's school was a private institution and there was never any pressure to accept student loans.

 

[Sith Lord 13]

When I called the financial aid office to inform them that he was declining the loan, the woman got very snippy with me and informed me that he had to go online and decline it. We could not simply ignore the offers. We had to specifically decline the money we didn't want.

A) Having to go online and decline it is probably because 1) Loans aren't through school. 2) They want paperwork that you don't want it, so people don't complain later that they don't have the money and want more aid, when they could have had loans.

B) The only pressure I ever had over loans was the stafford subsidized, and that was because, after they explained, it was stupid not to take it. If you have the $ to not need it, put that in a CD and get the interest because if you pay the subsidized one off within 6 months of graduating, it's no interest, so you made the interest on that money at no cost.

 

[scbelleatheart]

I'm confused...how is he driving a 2004 Jag on your dime?

That is the car I owned and paid for the insurance on. I gave it to him to drive until he graduated college I'll get it back when he buys his own. It will be my beater car then. I pay the insurance on it now. So on my dime.

 

[punkin]

My son's school is the same thing as Mrs.Pete's daughter's school. Will only filled out FAFSA because my daughter's scholarship required it. We didn't want any loans for our sons. But our older son's school sent letter after letter to remind us to get him to complete the online promissory note.

When I called the financial aid office to inform them that he was declining the loan, the woman got very snippy with me and informed me that he had to go online and decline it. We could not simply ignore the offers. We had to specifically decline the money we didn't want.

Some of this may stem from it being a state university. Our daughter's school was a private institution and there was never any pressure to accept student loans.

We declined it online. I never spoke to anyone in financial aid. Maybe that's the process. If you don't actually "decline" they will automatically send the reminders.

 

[punkin]

That is the car I owned and paid for the insurance on. I gave it to him to drive until he graduated college I'll get it back when he buys his own. It will be my beater car then. I pay the insurance on it now. So on my dime.

I guess he got spoiled and now wants a comparable car. I can imagine it's a bit hard to go from a gently used 6 year old Jag to even a brand new econobox.

 

[scbelleatheart]

No way the car is gently used. I bought it 2 years ago to use as an escort vehicle for wide loads. It had 130,000 miles on it and I put another 60,000 on it. Jags can be found cheap. This one was. You can get one for under $7500 any day. They are reliable if nothing else which is why I choose to buy them as a beater car.
DS is looking at SUV's. Not even close to a S-Type Jag.