Things have changed a lot, it is hard to get through four years at a good school without borrowing money anymore, especially if you go on to graduate school. Student loans are a good thing. The problem is that the system is full of loopholes and gets jobbed all of the time. One of my staff nearing 50 has over 130,000 of student loans stretching back into the 70's. As long as he's still in school, he can defer paying them back. So what does he do . . . he takes two courses every semester, always pursuing additional masters degrees and never committed to a Phd program. He's been in school for 30 years and has no intention of ever finishing because he would have to pay back his 100K. That is the kind of abuse that should be stopped.
I can't imagine that's a common type of abuse that has much relative impact on the system. No offense to your friend, but you have to be a dishonest miscreant to do something like that and I just don't think many people have the time or energy to carry on this kind of abuse.
Student loans may be good for some, but there are better alternatives out there. The UPS program I participted in was amazing. The problem is you have too many kids taking out 60,000 in loans to get a worthless degree in something like political science or merchandising. After finishing school they can't get jobs to repay their loans. Even worse, are the kids that take out the loans and flunk out or have to quit school. We have a dumb culture where taking out student loans is just what you do. The amount of loans should be tied to the marketability of the degree. It might make sense to take out 60K and get a degree in Engineering, but it is foolish to take out 60K and get a degree in social work.
You might be surprised at how many professional students there are out there taking advantage of this loophole. They should have to start paying back the loan after a certain number of years whether they are still in school or not. The loans should be to help a person get a degree, not to job the system to pay for professional students.
Heard a little something on it today…basically they want to 1) cap the monthly payments at 10% and have that adjusted based on the borrower’s income 2) lower interest rates 2) let people consolidate their loans…something let me do with my 1st degree but not my second 3) grant forgiveness after 20 years.
My tuition here is pretty much all loans. The gvt gives $2500/semester and the rest is from a credit union. Last semester was $9900 total for 16 hours, raised $1400 over the summer a semester. $8300 last 2 semesters already done plus another $30000 coming to finish the degree. Total should be about $60000 in just tuition from LSU, plus about $20000 from my community college. I would have degrees in management and automotive, so there's a lot of options for jobs. Obama's "plan" really doesn't do anything at all. If anything students should want to pay the loan off ASAP, not sit there and let the interest pile on.
