More Than 40% of Student Borrowers Aren’t Making Payments

Mott the Hoople said:
Two problems here. Tuition costs are grossly excessive and something needs to be done about it. Second, buyer beware, going $100,000 in debt for a basket weaving major is not sound financial planning.
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it sounds like what we need to do is make another law and call it the affordable college act that requires every american to pay for college tuition, whether they go or not, and fine those that refuse to do so.
 
I Love America said:
What if we just mandated price controls for all colleges? No tuition can be more than $5,000/year

This is where the GOP could back the democrat party into a corner. Force them to oppose the premise of price controls which the democrat party calls for in other areas
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The GOP had the chance to do something about tuition loans, and didn't.

Two years ago they blocked from consideration a bill that would have allowed students to refinance their loans to a lower rate.

We shouldn't forget that.
 
That number is deceiving, active students don't make payments, and there are five years of forbearance in which borrowers are allowed to stop making payments . Generally the interest rate is so low compared to other loans or what you can get in investments it makes sense to take advantage of all the leeway you can get. Considering these factors I am not surprised by the 40% number.

I think its a bit of chicken little being scared about the sky falling and the media capitalizing on that fear to sell soap. Now, if 40% were in default, I would be seriously concerned.
 
CFM said:
What do you propose, price control by the government?

Can you provide proof of your claim that most will not stay in default?
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I sure can. You can't write off a student loan debt through bankruptcy. If you're in default status the government can and will garnish your wages up to 15% of your salary until the loan is paid off.
 
cawacko said:
There is a definite correlation between the government becoming a major player in the student loan game and the rise in the increase in tuition.
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Indirectly maybe. The biggest factors in rising cost of higher education are personnel costs and infrastructure costs, that is, the cost of maintaining physical facilities. The demands for amenities by students and their families that have nothing to do with class room instruction also drive up cost.

If we're serious about reducing the costs of higher education we need to look not only at how we finance a college education but also how we operate them. I think that the success and far lower cost while providing a similar quality of class room instruction that junior and community colleges provide is something we need to investigate and maybe adopt at a broader level.

I can tell you this though. The large Land Grant Research Universities would not like that at all.
 
I Love America said:
What if we just mandated price controls for all colleges? No tuition can be more than $5,000/year

This is where the GOP could back the democrat party into a corner. Force them to oppose the premise of price controls which the democrat party calls for in other areas
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Spare me the hyperbole.

What probably needs to be done is to change the structure of tenure. Tenure is supposed to provide academics with intellectual freedom, not lifetime job security. Universities also carry lots of low demand curriculums that Universities may have to be required to periodically be evaluated for cost effectiveness and forced to drop if demand is too low as, from a practical stand point, we can't afford them. Another factor is sky rocketing costs are the lack of planning for the physical facilities that Universities have where many buildings have a 24 hour round the clock cost but are only utilized 6 to 8 hours a day. More systematic planning of how universities construct and maintain their physical facilities is needed. It is staggering how many physical facilities at large Universities are unoccupied and wasted space that has the same cost to maintain and operate as facilities that are fully utilized. To see what I mean is go to a Major University like an Ohio State and walk through the buildings and see how at any one given time the vast majority of rooms in buildings are not occupied. It's a huge waste of money.
 
Jarod said:
That number is deceiving, active students don't make payments, and there are five years of forbearance in which borrowers are allowed to stop making payments . Generally the interest rate is so low compared to other loans or what you can get in investments it makes sense to take advantage of all the leeway you can get. Considering these factors I am not surprised by the 40% number.

I think its a bit of chicken little being scared about the sky falling and the media capitalizing on that fear to sell soap. Now, if 40% were in default, I would be seriously concerned.
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I wish they had that 5 years of forbearance when I graduated. LOL
 
SmarterthanYou said:
it sounds like what we need to do is make another law and call it the affordable college act that requires every american to pay for college tuition, whether they go or not, and fine those that refuse to do so.
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Well we kinda do already. The tuition price a student pays at a State University typically only covers about half the cost of a public education. The other half is covered by the tax payers in that State.
 
Jarod said:
That number is deceiving, active students don't make payments, and there are five years of forbearance in which borrowers are allowed to stop making payments . Generally the interest rate is so low compared to other loans or what you can get in investments it makes sense to take advantage of all the leeway you can get. Considering these factors I am not surprised by the 40% number.

I think its a bit of chicken little being scared about the sky falling and the media capitalizing on that fear to sell soap. Now, if 40% were in default, I would be seriously concerned.
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Not really....I mean it is a bad figure and does indicate a serious systemic problem but understand, you cannot write off a student loan debt through bankruptcy and the government will garnish your wages if you have used up your forbearance and are still in default status. So you will pay that debt one way or the other.
 
Mott the Hoople said:
Not really....I mean it is a bad figure and does indicate a serious systemic problem but understand, you cannot write off a student loan debt through bankruptcy and the government will garnish your wages if you have used up your forbearance and are still in default status. So you will pay that debt one way or the other.
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Unless you work under the table the remainder of your life like some lawyers I know do, or move to France like one person I know did.
 
Banks are laughing all the way to the!
Funny how anti education conservatards ignorantly call it indoctrination.
Good Fox News tard outing buddy

Cost is not an issue as benefit is still over a million
 
The Dude said:
Banks are laughing all the way to the!
Funny how anti education conservatards ignorantly call it indoctrination.
Good Fox News tard outing buddy

Cost is not an issue as benefit is still over a million
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Funny how Libertards don't realize they have been indoctrinated. The difference between an educated Conservative and an indoctrinated Liberal, well, you figure it out.
 
CFM said:
Funny how Libertards don't realize they have been indoctrinated. The difference between an educated Conservative and an indoctrinated Liberal, well, you figure it out.
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How would you know? Seems to me most of you GED types call anyone with a college education an "indoctrinated liberal".

We all know that it's psychological projection on your part in that you haven't done the hard work, like we have, to develop our critical thinking skills. All you can do is insult, make ad homs and throw grenades but think? Meh...not so much.
 
Mott the Hoople said:
Two problems here. Tuition costs are grossly excessive and something needs to be done about it. Second, buyer beware, going $100,000 in debt for a basket weaving major is not sound financial planning.

I think the percentage in default is some what not representative. The overwhelming majority of those will not stay in default. I was in default of my student loan in my early 30's when I lost my job and it took me a while to get back on my feat. I paid a hefty fine but got back on track and paid it all off. Most of these young people will do so too.

Still and all something needs to be done about the grossly excessive costs of a college education. If parents new just what a small percentage of their tuition dollars and State funding went to pay for class room instruction at most State Universities they'd probably riot and lynch a few Public University Administrators.
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why do you think tuiton is excessive? Could it be that readily available loans that do not have to be paid for years keeps demand up? Preventing any correction due to lack of demand (people priced out of the service)?
 
tsuke said:
why do you think tuiton is excessive? Could it be that readily available loans that do not have to be paid for years keeps demand up? Preventing any correction due to lack of demand (people priced out of the service)?
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That is exactly right. Thanks to "government loans" the risk benefit ration of college has been skewed out of proportion
 
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