This in the wake of Far right attempts to ameliorate the rapidly worsening student debt situation. This is long, but researched, fact driven with some editorial input from the kid (me). Mush easier to read on the blog at bubblehead1026.blogspot/ The current debate over student loan debt is multi-faceted and disturbing (to me, at least) on several levels. In no particular order: Interest rates: Quicken Loans, an online funder is granting rates as low as 3.19% apr and most mainstream lenders are, and have been for some time, granting 30 year fixed rates of the low to mid 4% range. Contrast this with rates as high as 7.2% (parents and grad students), 6.21% (professional and Grad loans) and the 4.66% rate for more mundane undergraduate loans. Compound this with lenders selling bundled loans as if they were real money, and we have a potential mini version of the housing bubble /subprime mortgage collapse of late 2006 which triggered the recession were still trying to get out of 8 years later. The $1.2Trillion student debt monster isnt going away, yet today Republicans in Congress blocked an attempt to allow some ( Forgiveness Program was designed to offer borrowers who have financial difficulties a reasonable loan repayment alternative. But there are certain requirements which borrowers must before they may qualify for the plan) to reduce and refinance (not forgive or delete) student debt. At 31% + of total US Govt. assets, total student loan debt (just to the federal goverenment, forget private loans!) now exceeds credit card and auto loan debt! Important safety tip, Egon, if students cant repay loans, they arent assets anymore. College costs: Not all bachelors degrees are created equal, and some colleges have become incredibly adept at victimizing ingenuous students in the name of being affiliated with a prestige school. As it happens this is not the case with some of the better schools in America. Princeton, for example, grads have one of the lowest student debt loads in the nation. While seven of ten students nationwide have debt, averaging $29,400 each, fewer than 25% of Princeton undergrads had student debt, and the average amount was $5,096. Compare this to Felician College (who? what? where?) also in New Jersey whose grads shared an average per student debt of in excess of $38,000 . Ask yourself which degree will take you further. Many boutique colleges in America offer mostly BAs, causing advanced degree seekers to resort to other schools , entering as outside grad students. These schools are some of the least heard of and most expensive schools in the nation, offering relatively little value for dollar spent than a really cool environment and memories of sitting on the quad making smores and singing along with Cat Stevens greatest hits, while completing a BA in Psychology or Social Work. Wheelock College, in Boston is a prime example of such a school. Other factors include such misleading information as that offered by the ubiquitous University of Phoenix. While they style themselves as affordable, one years tuition is exceeded only by Boston Universitys online program credit hour cost. Phoenix charges about three times as much per credit hour as does U of Florida (and most state and public universities) for in state students! This fact notwithstanding, financial aid officers at schools like Phoenix and Devry have gotten very good at convincing potential students to take on debt which, on graduation will be financially crippling. Need for College: Most experts agree that college has been oversold in the last thirty years, as rapidly emerging and changing technologies make two year tech schools far more suited to many careers. The You must have a college degree to succeed is baseless. Ask the guy who installs your new Air conditioner or manages the network for any of thousands of large information driven business. Hell, ask Bill Gates. Ignorance of Alternatives: Many State formerly Junior Colleges are now four year schools heavy in tech (and relevant) programs. At $103 per credit hour, for example, Valencia College in Orlando, awards several different Bachelor of Science degrees in tech areas. So - spend $12,630 for a relevant degree at Valencia, or go to Wheelock, and spend $118,800 for a (as most experts would agree) useless by itself, BA in Psychology. That Wheelock figure, by the way is tuition only, Smores not included. Of course one could actually live at home while attending Valencia. Completing the Valencia Honors College program also guarantees state University acceptance if desired for pursuance of another degree field. Unfamiliarity with Finance and the dangers of Credit: As it currently stands, many student debts will never be repaid, so a program offering recovery of any of this potential loss seems a no brainer. Go figure. This inability of debt ridden students to repay regularly and within the time frame of the loan, bleeds over into home mortgage refusal, credit card refusal and in many cases inability to buy a new car. It threatens the entire economy. Paying less per payment over longer is far better than bankruptcy and default. Many students manage to graduate High School, at least in Florida, with only a token 1/2 semester course in economics, with relatively little focus on the most micro of economic studies - that of personal finance and debt management. The cavalier nature of the average 18 year old regarding debt and its accumulation is staggering, and is worsened steadily by the almost undetected wild card - That middle income families have seen their average yearly income, adjusted for inflation, steadily decrease over the last 7 years, while tuition costs go steadily up as state legislatures underfund education from K-12 to Grad School. Most High School seniors have never actually calculated home buying factors, shopped for insurance or researched buying a car. They have only the knowledge they accumulate from whatever they overhear at home regarding finances, which in far too many instances is precious little. But, never you mind, Far Right obstructionists, wait until the mass default occurs and stand back, point fingers at the president and shout in your best Tea Party scream -We told you so. That, of course will be a lie, but weve come to expect nothing less from you lot.
Posted on: Wed, 17 Sep 2014 19:25:45 +0000
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