Student Loans Are Ruining Your Life. Now They’re Ruining the Economy Too

[angelatc]

I don't understand how people can attend schools that end up costing them 400k in loans...or even 100k in loans and think that was a good decision. They must really be expecting an awesome job to be guaranteed to them when they get out or more realistically they never even thought about it in a logical way.

I'm amazed these people even know how to fill out student loan forms and pass classes.

But the other side of that coin is that they are ore likely NOT to end up unemployed, and the money they make in the workforce is almost double what un-degreed workers earn. It seems to be a wealth distribution scheme. Imagine that.

 

[jbauer]

I don't understand how people can attend schools that end up costing them 400k in loans...or even 100k in loans and think that was a good decision. They must really be expecting an awesome job to be guaranteed to them when they get out or more realistically they never even thought about it in a logical way.

I'm amazed these people even know how to fill out student loan forms and pass classes.

No kidding. I graduated in 04 with a BS. I worked my arse off every weekend, every break, every extra minute at a restaurant. I think I made 10 an hour? I graduated without any student debt in 3.5 yrs taking the max credits allowed for tuition. It is still doable, people just need to go with a mission of getting it done and not take the easy way out.

 

[jbauer]

But the other side of that coin is that they are ore likely NOT to end up unemployed, and the money they make in the workforce is almost double what un-degreed workers earn. It seems to be a wealth distribution scheme. Imagine that.

The chart is all good and fine but numbers lie. Get me a chart that shows what you just showed but only include the people that have been in school in the last 10 years. That's when the explosion in debt started....coincidentally when the government started guaranteeing the loans. Showing all the employed people with education prior to the past years factors in all the folks who got a degree at a time when it wasn't as popular and thus was more of an asset/in higher demand.

 

[angelatc]

The chart is all good and fine but numbers lie. Get me a chart that shows what you just showed but only include the people that have been in school in the last 10 years. That's when the explosion in debt started...

Well, that would be cherry picking, wouldn't it? Workers tend to earn more the older they get - that's part of the point.

And one could also point out that's about when the economy took a dive.

 

[heavenlyboy34]

But the other side of that coin is that they are ore likely NOT to end up unemployed, and the money they make in the workforce is almost double what un-degreed workers earn. It seems to be a wealth distribution scheme. Imagine that.

Incomplete chart is incomplete. It needs to include "non-college" education like trade schools. People in the trades like industrial arts make good money with no degree.

 

[angelatc]

Incomplete chart is incomplete. It needs to include "non-college" education like trade schools. People in the trades like industrial arts make good money with no degree.

It does include them, and they influence the median of the non-degreed in a positive manner because they're not segregated. If they were, the "high school only" numbers would likely be worse.

These education categories reflect only the highest level of education attained. They do not take into account completion of training programs in the form of apprenticeships and other on-the-job training, which may also influence earnings and unemployment rates

.


Here's a chart that seems to provide data on the trade school graduates:

http://www.bls.gov/emp/ep_table_education_summary.htm

 

[heavenlyboy34]

It does include them, and they influence the median of the non-degreed in a positive manner because they're not segregated. If they were, the "high school only" numbers would likely be worse.

.


Here's a chart that seems to provide data on the trade school graduates:

[/FONT][/COLOR]http://www.bls.gov/emp/ep_table_education_summary.htm

'scuse me. I would've liked to see a category for "industrial arts", "business owner", and so on so the chart would be more accurate at a glance. That second chart is much better, thanks. ~hugs~ (though a lot of Boobus people would prefer graphs to understand it... :/ )

 

[jtap]

No kidding. I graduated in 04 with a BS. I worked my arse off every weekend, every break, every extra minute at a restaurant. I think I made 10 an hour? I graduated without any student debt in 3.5 yrs taking the max credits allowed for tuition. It is still doable, people just need to go with a mission of getting it done and not take the easy way out.

I did the same but at some schools the tuition isn't reasonable and is clearly for the upper crust of the wealthy. Anyone who needs to take loans to go there, shouldn't be going there.

You may be more likely to get a job after, but if you have a mountain of debt, just having a job isn't going to help you ever get out from that debt. At least with a house you have something tangible at the end you could sell to pay off the debt. This racket is closer to selling carbon credits. They are only worth what some people (employers in this case) perceive them to be worth, and you will never get that value in a lump sum.

I'd want to pay the smallest amount for a degree that gives me something with enough perceived value to be worth my time. People don't even seem to be considering that.

 

[AuH20]

http://www.zerohedge.com/news/2014-03-04/what-student-loans-are-really-used-depressing-case-studies

Sounds like Bernanke and Krugman:

The logic for why "students" (or not) chose the easy way out? "The only way I feel I can survive financially is by going back to school and putting myself in more student debt," says Mr. Selent, who has since added $8,000 in student debt from living expenses. Returning to school also gave Mr. Selent a reprieve on the $400 a month he owed from previous student debt because the federal government doesn't require payments while borrowers are in school.

In other words, running away from insolvency by adding on more debt. And not just any debt, but Federal debt, which has no liens on any assets, aside from converting the obligor into a non-dischargeable, indentured debt slave indefinitely, with wage garnishment rights afforded to the government. Of course, the borrowers know all about this, but that too is a bridge to be crossed in due course. For now, someone has to pay for the rent and the food, even if that someone is once again the US taxpayer.

 

[Madison320]

No kidding. I graduated in 04 with a BS. I worked my arse off every weekend, every break, every extra minute at a restaurant. I think I made 10 an hour? I graduated without any student debt in 3.5 yrs taking the max credits allowed for tuition. It is still doable, people just need to go with a mission of getting it done and not take the easy way out.

My advice is to live with your parents, go to a CC and then finish off at a state school. And major in something useful, that teaches you a skill. You might have to borrow a little, but you won't break the bank.

 

[LibForestPaul]

Can't believe some here thinks this is a problem. Those connected get the new money first. A few tenured professors and a few connected (free masons) administrators. No problem.

 

[mad cow]

But the other side of that coin is that they are ore likely NOT to end up unemployed, and the money they make in the workforce is almost double what un-degreed workers earn. It seems to be a wealth distribution scheme. Imagine that.

That chart also doesn't take into account that the 16 year old high school drop-out income clock starts ticking at 16 and the Doctoral degree,say a dentist who graduates at 29 $400,000 dollars in debt,gets his clock started at 29 and it doesn't start at negative $400,000 either.

In many (most?) trades,given roughly equal intelligence,I would bet that their incomes and accumulated wealth would be a whole lot closer if you checked them at 50 or 60.

 

[oyarde]

Well , charts are really meaningless at this point , because the era we are in , and will continue to be in for these young people is more of them than there will be jobs for.It will get no better , stays like it is until it gets worse .

 

[Schifference]

Planning bankruptcy would be fraud so I would never suggest doing that. However I would bet that more than one person saddled with huge college debt had been smart enough to figure out that. ...... Once they graduate and are employed making the big $$$ they get more credit than god!! Once they established this credit they borrow against it and pay back the student loans that are not dischargeable in bankruptcy. So after a period of time they pay off all their college loans and are saddled with a a huge amount of unsecured debt that is dischargeable and then they decide to file bankruptcy. Of course I would never do this or recommend it.

 

[Spikender]

I took on student loan debts and Sallie Mae owned my debts.

Of course, I worked my butt off during college and was lucky enough to get a job right out of college, and I've almost paid off my student loan debt.

I was one of the lucky ones who escaped the debt prison, I guess. I owe to the fact that I didn't slack off, took multiple classes a term, and worked to save up money to pay it off while I was in college.

From what I've seen, the system itself is flawed, but it helps to have students willing to put themselves into a debt prison and then put forth no effort to escape it at all.

 

[oyarde]

I took on student loan debts and Sallie Mae owned my debts.

Of course, I worked my butt off during college and was lucky enough to get a job right out of college, and I've almost paid off my student loan debt.

I was one of the lucky ones who escaped the debt prison, I guess. I owe to the fact that I didn't slack off, took multiple classes a term, and worked to save up money to pay it off while I was in college.

From what I've seen, the system itself is flawed, but it helps to have students willing to put themselves into a debt prison and then put forth no effort to escape it at all.

That does not sound like a Rainbow Factory. Of course what I have done is not as well.

 

[Pauls' Revere]

Another terrible and tragic failure of the free market.

But don't worry. Government can fix this - easy.

It just needs to impose price controls on tuition, boarding, textbooks, etc.

I mean, what could possibly go wrong?

Nah, just bailout each and every student loan, then raise taxes to pay for it all. Sound familiar?

 

[VIDEODROME]

I went through an IT Security Associates thing, so I think I'm only in it for 28,000.

After graduating, I'm running out of time and money to wait for an actual IT job, so I'm applying to regular mundane jobs. If I'm lucky, I may land a job at a local IMAX / Cinema.

My last thought on IT students is they're expected to also get Certifications on top of their degree. I think these exams are over priced and students like me fresh out of college just can't afford to put down $200. It might seem more fair if you could have a retake, but you don't. If you fail the exam that's a few hundred bucks gone.

Also, I sat on my ass listening to dull Power Point lectures. I really think college failed to give me practical hands-on skill that employers are looking for.

 

[Spikender]

I went through an IT Security Associates thing, so I think I'm only in it for 28,000.

After graduating, I'm running out of time and money to wait for an actual IT job, so I'm applying to regular mundane jobs. If I'm lucky, I may land a job at a local IMAX / Cinema.

My last thought on IT students is they're expected to also get Certifications on top of their degree. I think these exams are over priced and students like me fresh out of college just can't afford to put down $200. It might seem more fair if you could have a retake, but you don't. If you fail the exam that's a few hundred bucks gone.

Also, I sat on my ass listening to dull Power Point lectures. I really think college failed to give me practical hands-on skill that employers are looking for.

I got a Bachelors and multiple certifications from ECPI University for 28000 and I was done within a year and a half. Granted, half the instructors sucked at their job and the Unix teacher knew nothing about Unix, but it is what it is.

The certifications are overpriced, luckily ECPI footed the bill for them and you only had to pay 15 dollars to take any certification while you were there.

It was also a hands-on focused school, so I got a lot of that. Unfortunately, I also got a few teachers who were in love with dull, forced speeches with white slides, so I feel your pain on that point.

That does not sound like a Rainbow Factory. Of course what I have done is not as well.

I work my hardest everyday
To make just a bit of pay
The Rainbow Factory really sucks
But hey it's how I make my bucks

 

[PRB]

Student Loans Are Ruining Your Life. Now They’re Ruining the Economy Too

American students are well over $1 trillion in debt, and it's starting to hurt everyone, economists say

By Sam Frizell @Sam_FrizellFeb. 26, 2014

http://business.time.com/2014/02/26...theyre-ruining-the-economy-too/#ixzz2uyGOehSD

Chris Rong did everything right. A 23-year-old dentistry student in New York City, Rong excelled at one of the country’s top high schools, breezed through college and is now studying dentistry at one of the best dental schools in the nation.

But it may be a long time before he sees any rewards. He’s moved back home with his parents in Bayside, Queens — an hour-and-a-half commute each way to class at New York University’s College of Dentistry — and by the time he graduates in 2016, he’ll face $400,000 in student loans. “If the money weren’t a problem I would live on my own,” says Rong. “My debt is hanging over my mind. I’m taking that all on myself.”

Rong isn’t alone. Across the U.S., students are taking on increasingly large amounts of debt to pay for heftier education tuitions. Figures released last week by the Federal Reserve of New York show that aggregate student loans nationwide have continued to rise. At the end of 2003, American students and graduates owed just $253 billion in aggregate debt; by the end of 2013, American students’ debt had ballooned to a total of $1.08 trillion, an increase of over 300%. In the past year alone, aggregate student debt grew 10%. By comparison, overall debt grew just 43% in the past decade and 1.6% over the past year.

According to a December study by the Institute for College Access & Success, 7 out of 10 students in the class of 2012 graduated with student loans, and the average amount of debt among students who owed was $29,400. There’s no clear end in sight. “The total amount of student debt is growing basically at a constant rate,” Wilbert van der Klaauw, an economist with the Federal Reserve Bank of New York tells TIME. “The inflow is much higher than the outflow, which is likely to continue in the future as reliance on student loans for college is expected to remain high.”

Debt is painful for many students, and an increasing number of graduates are unable to pay back their loans on time. Delinquencies on student loans have risen dramatically over the past decade: 11.5% of graduates were at least 90 days late on paying back their loans at the end of 2013, compared with 6.2% delinquencies on student loans in 2003. Moreover, the Fed’s figures on delinquencies hide more stark data: nearly half of all students with debt aren’t currently in repayment thanks to deferments and forbearances and the fact that students are not expected to pay while they’re in school, according to van der Klaauw. What that means is that for the graduates who are actually expected to pay their loans now, the delinquency rate is roughly double the 11.5% figure.

Only medical and dental students are allowed to have $400K debt, most students stop at $200K. there's a reason for that, even lenders know what's a return on investment and the likelihood it can be paid back