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Ripping Off Young America: The College-Loan Scandal

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Re: Ripping Off Young America: The College-Loan Scandal

#11

Post by jacquesm »

One big problem I have with college loans is that people that sign up for it are not adequately informed on the long term consequences of their action. Since this is a loan for education one would expect that before being allowed to sign for the loan there would be a test that you'd have to pass to be able to apply.

That would get rid of a lot of people that find out the hard way that they've borrowed themselves into a very deep hole. Job prospects, interest rates, cumulative interest, evaluating the small print and so on. There are many ways to get burned on a student loan and there is only one way you can get out, and that way out takes not just skill but also considerable luck and long term stability.

A few of our Canadian employees were saddled with long term versions of these and we managed to get rid of those, and we managed to keep one intern out of debt by paying him enough that he didn't have to apply for a loan.

I don't think student loans are bad in and of themselves, they just don't work out for everybody and for quite a few people that get squeezed by them the risks were not readily apparent when they entered into the agreement.

Student loans are a tool, and like any other tool they required some study and mastery to make the most of them.

Re: Ripping Off Young America: The College-Loan Scandal

#12

Post by ethanbond »

gxs wrote: post #7

Amazing, perspective is everything. I don't deny that college kids are being taken advantage of. Graduating from a small liberal arts college in South Dakota that no one's ever heard of with a degree is Culture Studies and 80k in debt really is a rip off. The flipside of this coin however is someone like me. My parents are immigrants and I was the first to go to school. To my parents, the fact that someone would be e…

I agree. Loans aren't at the root of the problem, but they're also a bad solution. An even worse solution is getting rid of loans. The only solution worse than that? Blaming students.

This is why, until there's some radical, radical change, I'll always vote for the people perpetuating student loans. I'm not going to be the one that screws an entire generation out of a worthwhile education in the name of "loans are bad!"

Re: Ripping Off Young America: The College-Loan Scandal

#13

Post by Zimahl »

ihsw wrote: post #3

It will be interesting to see how Oregon's Pay-It-Forward will pan out, but it will take half a century to get any real data: http://www.huffingtonpost.com/2013/07/03/pay-it-forward-oreg... Ohio has also shown interest: http://www.huffingtonpost.com/2013/07/18/ohio-tuition-plan-o...

Commenting as an Oregonian, it isn't going to solve any problems it just makes college more accessible, allowing students to kick the can down the road. College is still too expensive and costs have risen for no reason.

I went to state college in Washington (Washington State, go Cougs) and when I started there tuition was $1300 (semester system, so $2600 per year). My middle-class parents were easily able to cover my full costs (tuition, room and board), with a part-time job I contributed to room and board. It's now well over $9000 (insert Dragonball Z joke here) for the year just for tuition. Now, I'd have had to graduate with student loans.

There's just too much waste in the college system and I have no idea where it's going. Facilities? Sports? Salaries? Marketing? It's certainly not inflation or value since salaries are stagnant pretty much across the board.

Re: Ripping Off Young America: The College-Loan Scandal

#14

Post by brucehart »

jacquesm wrote: post #11

One big problem I have with college loans is that people that sign up for it are not adequately informed on the long term consequences of their action. Since this is a loan for education one would expect that before being allowed to sign for the loan there would be a test that you'd have to pass to be able to apply. That would get rid of a lot of people that find out the hard way that they've borrowed themselves into…

I don't know if the rules have changed since I was in college, but I actually did have to take an online test showing I understood the nature of student loans before my loans could be approved.

Re: Ripping Off Young America: The College-Loan Scandal

#15

Post by jacquesm »

brucehart wrote: post #14
jacquesm wrote: post #11

One big problem I have with college loans is that people that sign up for it are not adequately informed on the long term consequences of their action. Since this is a loan for education one would expect that before being allowed to sign for the loan there would be a test that you'd have to pass to be able to apply. That would get rid of a lot of people that find out the hard way that they've borrowed themselves into…

I don't know if the rules have changed since I was in college, but I actually did have to take an online test showing I understood the nature of student loans before my loans could be approved.

That would be very good news. The time I'm talking about is the year 2000.

Re: Ripping Off Young America: The College-Loan Scandal

#16

Post by jessaustin »

error54 wrote: post #8

Remember a while back when the price of gold skyrocketed and suddenly there were all "Cash 4 Gold" places that were willing to pay you "good money" for your gold. I've noticed the same thing has happened with the education system with a of a bunch of college popping up seemingly out of nowhere with promises of making more money by having a better career. The whole college system seems like a racket to saddle people w…

Yeah when there is growth in easy-to-qualify loans that may only be spent with one industry, that industry will prosper. The great part about it (for schools) is that they don't actually have to work that hard to lobby for more government-underwritten education loans.

...our overall educational rank in the world hasn't improved.

If you just look at the top end, it isn't actually possible for the USA to improve its rank. ( http://www.timeshighereducation.co.uk/world-university-ranki... ) I know there are some awful lower-level schools, but I assume there are all over the world as well.

Re: Ripping Off Young America: The College-Loan Scandal

#18

Post by graeme »

cliveowen wrote: post #5

You can tell Matt Taibbi's articles just by looking at the title.

Matt Taibbi isn't the author of that article. You saw an ad for one of his articles buried in the text of the article.

Edit: Well, I was wrong. I realized that on my mobile, I read "By Victor Juhasz", referring to the photo credit.

Re: Ripping Off Young America: The College-Loan Scandal

#20

Post by iyulaev »

jessaustin wrote: post #9
rayiner wrote: post #4

Earlier quoted context omitted.

Betting on what instrument? Loans are mostly federal. For what it's worth, the student loan program is solidly in the black for the federal government.

I'm not an investment adviser, but I have to think there are many ways to bet on a rise in bankruptcies among young working people.

Except education loans don't get cleared in bankruptcy!
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