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This Woman Has $97K in Student Loans. Who's to Blame?

finance.yahoo.com

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Re: This Woman Has $97K in Student Loans. Who's to Blame?

#71

Post by huherto »

chris_j wrote: post #63

The title asks "Who's to Blame?" That's regrettable wording. We could apportion blame in a number of ways but that wouldn't really help prevent a situation like this arising again. There are three main actors in this case: - The university that charged huge tuition fees for a course in Religious and Women's Studies. - The financial companies that loaned the huge sums of money needed to pay for those fees. - The poor…

"How about a third option,..."

Here in Mexico the Tec of Monterrey (which is one of the best private Universities) does that. They give you a loan/scholarship based on a combination of good grades and socio-economic status. The students get 90%, 80%, 60%. If they get 80%, that means they have to pay 20% when they are in school, 40% is a scholarship and 40% is a loan.

One of the consequences of this is that most loans/scholarships are given to the engineering students. The fact that the school has a stake on the future success of the student makes them more careful on who to give the loan/scholarship to. I always assumed this was the way done in the U.S. but after reading the article and the comments here, it seems like it is not.

Re: This Woman Has $97K in Student Loans. Who's to Blame?

#72

Post by huherto »

mcu wrote: post #40

Here's my question: Why is an unsecured loan for education any different than any other unsecured loan? Remember, these aren't backed by the federal government. These are variable rate loans, often with double digit interest rates, 10 year re-payment plans, and virtually no consumer protections (even bankruptcy.) I'm lucky that I can make my $1,400 monthly payments. When I left school, I thought that I would be able…

"Should a bank really be making $100,000 unsecured loans to 18-22 yo-s just because someone in their (future) field has the potential to repay it?"

It is should be like insured deposit in a bank. The government guarantees up to $100k or so, but if you have more you run the risk your self. In this case if the banks lends more than let's say 40K, then they are on their own if borrower declares bankruptcy. (I may not be using the proper terminology. English is my second language)

Re: This Woman Has $97K in Student Loans. Who's to Blame?

#73

Post by philwelch »

potatolicious wrote: post #51
philwelch wrote: post #41

Earlier quoted context omitted.

"Free of expense" doesn't exist. You're talking about transferring the expense onto people who do create wealth. Maybe it makes sense for people to have an inherent right to medical treatment or housing or something, but an inherent right to study feminism and religion at the $100,000 expense of others? I mean, we already have subsidies for people who are actually good at the humanities--tenured professorships. Philo…

You have a good point - my question would be why the studies of feminism and religion carry a $100K price tag. My engineering degree cost about half as much (in Canada, mind you), but is understandably pricy due to the earning potential. Sure, there is a minimum cost to a degree that may or may not line up with its earning potential... but $100K? How in the world do schools get away with charging that much for a degr…

100K was her total student debt, which is not entirely from tuition and fees but also from living expenses. Living expenses for 4 years in New York can easily exceed 100K on their own. If you skimp and live on campus (which in NYC is probably cheaper than living in town--not true for the rural college I go to) it's going to be less than otherwise, but then you add tuition on top of that.

Re: This Woman Has $97K in Student Loans. Who's to Blame?

#74

Post by philwelch »

pmichaud wrote: post #62
houseabsolute wrote: post #53

Earlier quoted context omitted.

> there's a certain level of deceit that both the universities and lenders are complicit in: they know that they are charging excessively for a degree, based on the salary the student could expect to get with that degree. The charge for the degree isn't based on the income you can make from it, it's based on the cost of producing it (ostensibly). This is true of most things you buy. How much can you buy a steak for?…

I'm trying really hard not to down vote you. Since you kept it relatively civil, I won't, but let me say that I'm extremely disappointed in your attitude: 1) Making it more difficult for poor people to get the loans that are now pretty required for higher education is retrograde. The idea is to compensate for the already significant disadvantages that the poor face in climbing out of poverty, not to create yet anothe…

"Picking a subject out of the sky, like womens' studies, and declaring it "retarded" (classy in itself), is anti intellectual."

What if you declare it "retarded" after years of careful and intellectual consideration? What if you go on to point out that the field of study itself is intellectually bankrupt if not outright anti-intellectual?

Re: This Woman Has $97K in Student Loans. Who's to Blame?

#75

Post by herdrick »

DilipJ wrote: post #35
herdrick wrote: post #19

It was a terrible idea to have a class of debts that can't be discharged with bankruptcy. That it's mostly incurred by young who lack perspective makes it even worse. Someday people will look back on this the way we view debtor's prison.

Yes, it's a travesty that some private equity/LBO guy can have their debts removed, but not this poor girl. The law needs to be changed, especially when you consider how young she and others like her are when they make this decision. She's not considered old enough to drink, but it's okay to make her sign a document that says she is liable for a six-figure debt, for an asset that the lenders know is severely overvalu…

Actually, it's very important that the vilified robber baron of the week can declare bankruptcy too. High income people need to be able to walk away from a bad deal, too, as much for societies good as their own.

I'm sure you're right to put a lot of blame on the lenders though. If the loans weren't federally guaranteed I'm pretty sure they'd be looking at data more granularly than, 'four year degree' or 'two year degree' (though I have to admit that commercial bankers aren't leading in data analysis).

Re: This Woman Has $97K in Student Loans. Who's to Blame?

#76

Post by foldr »

houseabsolute wrote: post #68
pmichaud wrote: post #62

Earlier quoted context omitted.

I'm trying really hard not to down vote you. Since you kept it relatively civil, I won't, but let me say that I'm extremely disappointed in your attitude: 1) Making it more difficult for poor people to get the loans that are now pretty required for higher education is retrograde. The idea is to compensate for the already significant disadvantages that the poor face in climbing out of poverty, not to create yet anothe…

> Since you kept it relatively civil, I won't I applaud your restraint! > . . . higher education is retrograde . . . not to create yet another barrier The individual being discussed in this essay is far from unique. The question is whether many poor people aren't being saddled with even more debt for very little payoff; debt that the education lobby has made it very difficult to escape. Poor people studying in subjec…

>So if no one will pay for it and it offers little broader societal benefit that we might want to subsidize, what is it for?

You could ask that question about all of the humanities, really, but presumably you want poor people to have the option of studying English, history, philosophy, etc.

Re: This Woman Has $97K in Student Loans. Who's to Blame?

#77

Post by coned88 »

There are people who go to top schools, study an easy major and solely because of who they know, come out of school making 150-200K a year, proofing fashion magazines. NY is filled with girls like that, I know a few of them.

Though for the rest of us, with non anglo last names who didnt go to a top 25 school, its much harder.

This girl was just chasing that.

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