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Source: (consider it)
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Thread: off-the-wall question about student loans
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Ruudy
Shipmate
# 3939
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Posted
Does it talk at all about how so much debt could be a major reason why education costs have spiraled out of control and grown faster than inflation?
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The shipmate formerly known as Goar.
Posts: 1360 | From: Gatorland | Registered: Jan 2003
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Mere Nick
Shipmate
# 11827
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Posted
Maybe this link,which goes to a similar article will work. I googled the news for the WSJ article and went right to it but the link I posted earlier goes to the pay wall that Josephine said.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Porridge
Shipmate
# 15405
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Posted
quote:
Originally posted by Ruudy:
Does it talk at all about how so much debt could be a major reason why education costs have spiraled out of control and grown faster than inflation?
Why would this be the case? It's not the schools borrowing the money, it's the students. Students end up in debt, not schools.
College costs go up for different reasons: tenured faculty retire later and later, and go on pulling down maximal salaries and bennies while teaching lighter loads, which means adding teachers, usually adjuncts; colleges reach out to broader and broader segments of the population, and have to add programs and administrators to run them to add to the student body; they have as one result additional accreditation hoops to jump through, and so on.
The little podunk college where I taught briefly added three programs in the one semester I taught there: one for veterans of our current wars; one for women prisoners; and one for workers interested in math and science para-education. Each program got a dedicated staff, and space, and who-knows-what-all.
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Spiggott: Everything I've ever told you is a lie, including that.
Moon: Including what?
Spiggott: That everything I've ever told you is a lie.
Moon: That's not true!
Posts: 3925 | From: Upper right corner | Registered: Jan 2010
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Mere Nick
Shipmate
# 11827
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Posted
quote:
Originally posted by Ruudy:
Does it talk at all about how so much debt could be a major reason why education costs have spiraled out of control and grown faster than inflation?
Doesn't appear to be mentioned in the particular article, but it does seem obvious that demand would not be nearly as high if it all had to be paid up front, cash out of pocket.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Mere Nick
Shipmate
# 11827
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Posted
quote:
Originally posted by Porridge:
quote:
Originally posted by Ruudy:
[qb] Does it talk at all about how so much debt could be a major reason why education costs have spiraled out of control and grown faster than inflation?
Why would this be the case? It's not the schools borrowing the money, it's the students. Students end up in debt, not schools.
We borrowed the money, hundreds of billions worth, to pay to the schools. If I knew you had borrowed lots of money and was also receiving tax credits to pay for my services I doubt I would be hesitant to raise my price.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Ruudy
Shipmate
# 3939
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Posted
quote:
Originally posted by Porridge:
quote:
Originally posted by Ruudy:
Does it talk at all about how so much debt could be a major reason why education costs have spiraled out of control and grown faster than inflation?
Why would this be the case? It's not the schools borrowing the money, it's the students. Students end up in debt, not schools.
Prices are set by supply and demand. Easy credit to consumers of a good increases demand- especially predatory credit. An example would be all the easy credit that contributed to the housing bubble.
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The shipmate formerly known as Goar.
Posts: 1360 | From: Gatorland | Registered: Jan 2003
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Mere Nick
Shipmate
# 11827
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Posted
HCH said in a thread about helicopter parents
quote:
It might be interesting to have a thread discussing (in a civilized fashion) the costs of higher education.
tclune talked about it, too.
quote:
Well, in the US, the parents are going into debt up to their eyeballs to pay your salary. If you want the student to be treated as an adult by the parents, lower your damned rates so the parents aren't indentured to your institution for the rest of their lives.
Frankly, I find the arrogance of colleges insulting. The only thing they want from the parents is an endless supply of money with no accountability. If you can see anything "adult" about that, you are as immature as your students. Or so ISTM.
and quote:
not many children are able to borrow $140-200 K without at least a parental co-sign, and not very many parents have the credit for that without putting their house up for collateral.
I know an awful lot of parents who were put in that vice, and more than a few have had to delay their retirement to pay off the absurd tuition for a child with a history degree and no visible means of support. The amazing thing is not the occasional helicopter parent, but the vast number of parents who place their retirement in jeopardy without injecting themselves into every detail of their children's education.
In addition to the Stafford loans my oldest and youngest have maxed out on, I'm in for $200k+ in PLUS loans.
I believe it was JP Getty who said "If you owe the bank $100, that’s your problem; if you owe the bank $100 million, that’s the bank’s problem."
In this case, Obama had the federal government take over the PLUS loan business and is charging me over twice what our mortgage rate is. Good luck collecting, pal.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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ToujoursDan
Ship's prole
# 10578
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Posted
quote:
Originally posted by Ruudy:
quote:
Originally posted by Porridge:
quote:
Originally posted by Ruudy:
Does it talk at all about how so much debt could be a major reason why education costs have spiraled out of control and grown faster than inflation?
Why would this be the case? It's not the schools borrowing the money, it's the students. Students end up in debt, not schools.
Prices are set by supply and demand. Easy credit to consumers of a good increases demand- especially predatory credit. An example would be all the easy credit that contributed to the housing bubble.
Much of that demand is driven by the rapidly expanding international student population, who are sought after because they are likely to pay the full tuition, as they are often ineligible for scholarships and discounts. The same is true for state schools (University of California, SUNY, Rutgers, etc.) who are now actively courting out-of-state residents because they don't receive the in-state tuition discount. This, of course, denies places for eligible students who live in the state these schools are supposed to be serving.
But while supply and demand models work for widgets and possibly even houses, the university grant/loan market has always been heavily regulated. I don't believe that the availability of grants and loans is the primary driver of the tuition explosion. The Federal government started offering student loans in the 1950s, but the explosion in school costs didn't occur until the late 70s.
[ 04. January 2013, 20:31: Message edited by: ToujoursDan ]
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"Many people say I embarrass them with my humility" - Archbishop Peter Akinola
Facebook link: http://www.facebook.com/toujoursdan
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Dave W.
Shipmate
# 8765
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Posted
quote:
Originally posted by Mere Nick:
In this case, Obama had the federal government take over the PLUS loan business and is charging me over twice what our mortgage rate is.
What do you mean by the "take over" bit - could you provide a reference?
From what I can tell, PLUS loans have always been part of the Federal Direct Loan Program, and the rate has been fixed at 7.9% since July 1, 2006 - so it's not clear what this has to do with Obama (or with mortgage interest rates, for that matter.)
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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Mere Nick
Shipmate
# 11827
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Posted
quote:
Originally posted by Dave W.:
quote:
Originally posted by Mere Nick:
In this case, Obama had the federal government take over the PLUS loan business and is charging me over twice what our mortgage rate is.
What do you mean by the "take over" bit - could you provide a reference?
From what I can tell, PLUS loans have always been part of the Federal Direct Loan Program, and the rate has been fixed at 7.9% since July 1, 2006 - so it's not clear what this has to do with Obama (or with mortgage interest rates, for that matter.)
news article
I was paying up to 7.25% before the takeover on some of the PLUS debt. Some even a touch under 5%. New loans are 7.9% plus a 4% origination fee.
Obama has hurt, not helped. For him to take over the business, pay what he does to get the money and then turn around and charge what he does, it is a screw job that no one else has even come close to pulling on me.
There's more to it regarding my personal situation but right now it is 5:05 and I'd rather go have a beer than talk about money.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Mere Nick
Shipmate
# 11827
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Posted
Here's a little something else, too.
article
There's a big problem brewing.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Dave W.
Shipmate
# 8765
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Posted
Thanks for the links, Mere Nick.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
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Sergius-Melli
Shipmate
# 17462
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Posted
quote:
Originally posted by Justinian:
For the record UK student loans are repayed as a progressive income tax that only kicks in at IIRC £15,000/year. And if you don't meet that earning threshold your loans get forgiven.
Just to correct the facts, it is changing so that you have to be earning £21,000 and above before Student Loan repayments kick-in and are wiped off after a different period of time depending on where you studied... in reality, unless you have the means to pay it all of in either one go or early you are unlikely to ever pay back all that you were loaned (+ the interest)
Posts: 722 | From: Sneaking across Welsh hill and dale with a thurible in hand | Registered: Dec 2012
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deano
princess
# 12063
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Posted
in the UK you pay 9% of the difference between your salary and £21,000 but it's taken out before tax.
So if your gross starting salary is £25,000 you will ay 9% of (£25,000 - £21,000) £4000 which is £360 per annum, or £30 per month.
This was accurate as at the beginning if December when it was explained to us by the admissions tutor at Warwick University.
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"The moral high ground is slowly being bombed to oblivion. " - Supermatelot
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Mere Nick
Shipmate
# 11827
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Posted
IBR Calculator
For my kids' Stafford loans they can pay based upon income for 25 years, ten in certain public sector jobs.
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Carys
Ship's Celticist
# 78
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Posted
quote:
Originally posted by deano:
in the UK you pay 9% of the difference between your salary and £21,000 but it's taken out before tax.
So if your gross starting salary is £25,000 you will ay 9% of (£25,000 - £21,000) £4000 which is £360 per annum, or £30 per month.
This was accurate as at the beginning if December when it was explained to us by the admissions tutor at Warwick University.
It all depends when you started uni. I started in 1997 and was the last year pre tuition fees and on the old mortgage style loans, so I have to apply to defer the loans each year as I earn under the threshold of c.27k. But if I earn over that I post back a proportion of what I owe. From 1998 onwards they changed to being paid through the tax system over a lower threshold. Then this year it changed again with the biggest fees.
Carys
[ 11. January 2013, 18:21: Message edited by: Carys ]
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O Lord, you have searched me and know me
You know when I sit and when I rise
Posts: 6896 | From: Bryste mwy na thebyg | Registered: May 2001
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Sergius-Melli
Shipmate
# 17462
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Posted
quote:
Originally posted by Carys:
quote:
Originally posted by deano:
in the UK you pay 9% of the difference between your salary and £21,000 but it's taken out before tax.
So if your gross starting salary is £25,000 you will ay 9% of (£25,000 - £21,000) £4000 which is £360 per annum, or £30 per month.
This was accurate as at the beginning if December when it was explained to us by the admissions tutor at Warwick University.
It all depends when you started uni. I started in 1997 and was the last year pre tuition fees and on the old mortgage style loans, so I have to apply to defer the loans each year as I earn under the threshold of c.27k. But if I earn over that I post back a proportion of what I owe. From 1998 onwards they changed to being paid through the tax system over a lower threshold. Then this year it changed again with the biggest fees.
Carys
I saw what you did there... cheeky!
You forgot to mention that not all fees have gone up on all courses, nor have you remembered to mention that the payback threshold has gone up, nor the fact that such a tiny amount is paid back that few are likely to ever pay them back and reach 'write-off' and have most of the amount they owe never asked for.
Did your loan come from government or from the bank?
Posts: 722 | From: Sneaking across Welsh hill and dale with a thurible in hand | Registered: Dec 2012
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Arethosemyfeet
Shipmate
# 17047
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Posted
quote:
Originally posted by Sergius-Melli:
quote:
Originally posted by Carys:
quote:
Originally posted by deano:
in the UK you pay 9% of the difference between your salary and £21,000 but it's taken out before tax.
So if your gross starting salary is £25,000 you will ay 9% of (£25,000 - £21,000) £4000 which is £360 per annum, or £30 per month.
This was accurate as at the beginning if December when it was explained to us by the admissions tutor at Warwick University.
It all depends when you started uni. I started in 1997 and was the last year pre tuition fees and on the old mortgage style loans, so I have to apply to defer the loans each year as I earn under the threshold of c.27k. But if I earn over that I post back a proportion of what I owe. From 1998 onwards they changed to being paid through the tax system over a lower threshold. Then this year it changed again with the biggest fees.
Carys
I saw what you did there... cheeky!
You forgot to mention that not all fees have gone up on all courses, nor have you remembered to mention that the payback threshold has gone up, nor the fact that such a tiny amount is paid back that few are likely to ever pay them back and reach 'write-off' and have most of the amount they owe never asked for.
The effect of that "tiny amount" is that, once you take National Insurance into account, I have a higher marginal tax rate than someone on twice my salary who went to university 20 years earlier. I escaped the worst of the fees, but they have gone up for almost every course, and certainly for courses in the hard sciences.
Posts: 2933 | From: Hebrides | Registered: Apr 2012
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Sergius-Melli
Shipmate
# 17462
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Posted
quote:
Originally posted by Arethosemyfeet:
quote:
Originally posted by Sergius-Melli:
quote:
Originally posted by Carys:
quote:
Originally posted by deano:
in the UK you pay 9% of the difference between your salary and £21,000 but it's taken out before tax.
So if your gross starting salary is £25,000 you will ay 9% of (£25,000 - £21,000) £4000 which is £360 per annum, or £30 per month.
This was accurate as at the beginning if December when it was explained to us by the admissions tutor at Warwick University.
It all depends when you started uni. I started in 1997 and was the last year pre tuition fees and on the old mortgage style loans, so I have to apply to defer the loans each year as I earn under the threshold of c.27k. But if I earn over that I post back a proportion of what I owe. From 1998 onwards they changed to being paid through the tax system over a lower threshold. Then this year it changed again with the biggest fees.
Carys
I saw what you did there... cheeky!
You forgot to mention that not all fees have gone up on all courses, nor have you remembered to mention that the payback threshold has gone up, nor the fact that such a tiny amount is paid back that few are likely to ever pay them back and reach 'write-off' and have most of the amount they owe never asked for.
The effect of that "tiny amount" is that, once you take National Insurance into account, I have a higher marginal tax rate than someone on twice my salary who went to university 20 years earlier. I escaped the worst of the fees, but they have gone up for almost every course, and certainly for courses in the hard sciences.
If your going to compare to 20 years ago...(!!!) then yes it is a major jump! However, if your comparing to someone, say in the years just before these most recent changes, I don't imagine there will be much difference...
Posts: 722 | From: Sneaking across Welsh hill and dale with a thurible in hand | Registered: Dec 2012
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Arethosemyfeet:
The effect of that "tiny amount" is that, once you take National Insurance into account, I have a higher marginal tax rate than someone on twice my salary who went to university 20 years earlier.
That would be the case regardless of how the government decided to fund education. Even with no loans and a graduate tax you'd have to pay the extra "tiny amount" every month.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Belle Ringer
Shipmate
# 13379
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Posted
I have a friend with $100,000 student loan debt, who was denied the PhD. He will be in debt the rest of his life I guess because the rules say he has to pay the loan in the amount agreed, or a lesser amount that is a certain percentage of his income. He picks up temporary teaching jobs here and there, earning so little he's repaying about $10 per month. How many months will it take to repay $100,000? (I don't know what interest rate is when income/repayment is so low.)
But when the goal was to be a college professor, did $100,000 debt make sense? For an M.D., yes, but professors aren't paid a lot until they get to senior levels.
We as a culture need to rethink loans, make some judgments about the cost of the education vs the likely returns. But no one has motivation to do that. The schools thrive on getting students, not telling some "the education you seek will cost more than the resulting job will pay." Student loans cannot be discharged in bankruptcy so the lenders have motivation to encourage more borrowing, not compare borrowing to ability to repay.
Posts: 5830 | From: Texas | Registered: Jan 2008
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Mere Nick
Shipmate
# 11827
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Posted
quote:
Originally posted by Belle Ringer:
I have a friend with $100,000 student loan debt, who was denied the PhD. He will be in debt the rest of his life I guess because the rules say he has to pay the loan in the amount agreed, or a lesser amount that is a certain percentage of his income. He picks up temporary teaching jobs here and there, earning so little he's repaying about $10 per month. How many months will it take to repay $100,000? (I don't know what interest rate is when income/repayment is so low.)
But when the goal was to be a college professor, did $100,000 debt make sense? For an M.D., yes, but professors aren't paid a lot until they get to senior levels.
We as a culture need to rethink loans, make some judgments about the cost of the education vs the likely returns. But no one has motivation to do that. The schools thrive on getting students, not telling some "the education you seek will cost more than the resulting job will pay." Student loans cannot be discharged in bankruptcy so the lenders have motivation to encourage more borrowing, not compare borrowing to ability to repay.
What sort of loan does your friend have? Who does he really owe it to? Stafford? PLUS? private?
If we need to rethink loans I'd start first by making the schools co-sign the loan. That will make the schools say right up front if they think they are really worth what they charge.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Sergius-Melli
Shipmate
# 17462
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Posted
quote:
Originally posted by Belle Ringer:
We as a culture need to rethink loans, make some judgments about the cost of the education vs the likely returns.
Sorry to go of an a slight tangent here - we might well need to rethink loans, but more importantly we need to rethink university education in general. The idea that a majority should go to university (New Labours 50% of peeps going to uni. springs to mind) is an impractical and illogical proposition. We need to rethink what a university education is for, who should need the level of specialisation and what skills that a university graduate should achieve from their degree (that of course requires a rethink about secondary school education and the levels of compentence their). When it is an ideological belief that a majority of people should have a university education you run the risk of watering down the value, but also the quality, of a degree, and also increase the costs of such an education to the state and the individual.
I hope that the situation with the loan sorts itself out (it seems ridiculously large!) and I apologise for having highjacket your problem with a little rant about university education.
Posts: 722 | From: Sneaking across Welsh hill and dale with a thurible in hand | Registered: Dec 2012
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ken
Ship's Roundhead
# 2460
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Posted
quote:
Originally posted by Belle Ringer:
I have a friend [...] who was denied the PhD.
"Denied"? You mean he failed? His work wasn't good enough for a doctorate? You make it sound as if they arbitrarily took against him and decided not to award a PhD because of the colour of his hair or something.
I don't know how it works in the USA, but in Britain its quite rare to fail a PhD on a thesis that is actually submitted. The supervisor and the department ought to spot an inadequate thesis before it is finished. If someone can't hack the work they usually never complete - either they drop out altogether or else they keep on deferring submission for year after yeaar after year... Its also not unknown for a student to be diverted away from a PhD and given a lesser postgraduate degree of some sort - often an MPhil - its quite common for students intending to take a PhD to be required to resister for a 2-year MPhil and to transfer to the doctorate after one or two years.
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Ken
L’amor che move il sole e l’altre stelle.
Posts: 39579 | From: London | Registered: Mar 2002
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Belle Ringer
Shipmate
# 13379
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Posted
quote:
Originally posted by ken:
quote:
Originally posted by Belle Ringer:
I have a friend [...] who was denied the PhD.
"Denied"? You mean he failed? His work wasn't good enough for a doctorate? You make it sound as if they arbitrarily took against him
Hard to say, it's a friend so I'm really not in a position to ask aggressive questions. The friend believes it was arbitrary. Things like -- the thesis topic was approved and drafts reviewed, but at thesis defense the same people who had approved the work all along said "bad topic, you flunk." If it was a bad topic, why did they approve the topic and several years of drafts? Or is there a whole other side to the story?
Two years before the thesis was due I told a different friend, a former university dean, what was going on, and he said "there will be no PhD." Several PhD candidates were involuntarily transferred from the school that had accepted them to a different school in a university reorganization, which meant they were re-assigned to thesis advisers who had not chosen these candidates to sponsor. The former dean said candidates who get transferred liked that are not wanted by the receiving school, and usually end up with no degree no matter how excellent their work. He told me several similar stories he had witnessed in other schools.
So who knows, was it a bad thesis or was my friend an innocent victim of university politics?
Posts: 5830 | From: Texas | Registered: Jan 2008
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Mere Nick
Shipmate
# 11827
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Posted
What are the loan details? Depending on types of loans, certain things can be done to defer payment way into the future, reduce payment, pay only part, etc.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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Mere Nick
Shipmate
# 11827
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Posted
http://askheatherjarvis.com
Some US folks might find this quite helpful.
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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churchgeek
Have candles, will pray
# 5557
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Posted
quote:
Originally posted by Golden Key:
Josephine--
Check out Nolo.com. They put out self-help law books, and the student loan one helped me a lot. They also have info on their site.
Thank you! That looks like a fabulous resource!
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I reserve the right to change my mind.
My article on the Virgin of Vladimir
Posts: 7773 | From: Detroit | Registered: Feb 2004
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Josephine
Orthodox Belle
# 3899
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Posted
quote:
Originally posted by Mere Nick:
If we need to rethink loans I'd start first by making the schools co-sign the loan. That will make the schools say right up front if they think they are really worth what they charge.
I think that's a brilliant idea. Absolutely brilliant.
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I've written a book! Catherine's Pascha: A celebration of Easter in the Orthodox Church. It's a lovely book for children. Take a look!
Posts: 10273 | From: Pacific Northwest, USA | Registered: Jan 2003
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Mere Nick
Shipmate
# 11827
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Posted
Seems debt write-offs are booming.
article
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"Well that's it, boys. I've been redeemed. The preacher's done warshed away all my sins and transgressions. It's the straight and narrow from here on out, and heaven everlasting's my reward."
Delmar O'Donnell
Posts: 2797 | From: West Carolina | Registered: Sep 2006
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