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Grad-School Loan Binge Fans Debt Worries – WSJ

Following is an excellent article outlining the state of student loans. You really should take a look. Here is yet another example of government programs out of control with no structure to achieve reasonable goals and no monitoring of results or controls on utilization to assure taxpayers are getting value for their money.

You decide where to attend college, you decide what degree to pursue, you decide how many degrees to obtain … and somebody else picks up the tab.

billy_bully_dunce_lg_clrNobody asks the hard questions, nobody asks for accountability. We simply assume a college education is good and the more the better so we remove incentives for people to care about costs or quality or the appropriateness of this spending. Liberals and the young lap this up, Bernie Sanders pushes more of the same and those of us who question the logic of all this are the bad guys insensitive to the needs of society, yeah right‼️

Now I get it. If you only approach education like health care, you can always have more because more is always better. If you are among the liberal left and you think there is no problem with all this, I sure would like your comment explaining why.

Virginia Murphy borrowed a small fortune to attend law school and pursue her dream of becoming a public defender. Now the Florida resident is among an expanding breed of American borrower: those who owe at least $100,000 in student debt but have no expectation of paying it back.

Ms. Murphy pays just $330 a month—less than the interest on her $256,000 balance—under a federal income-based repayment program that has become one of the nation’s fastest-growing entitlements. She plans to use another federal program to have her balance forgiven in about seven years, a sum set to swell by then to $300,000.

The promise of forgiveness is “the only reason I would have ever considered” amassing so much debt to attend Tulane University Law School, says Ms. Murphy, 45 years old. She earns $56,500 a year as an assistant public defender in West Palm Beach.

via Grad-School Loan Binge Fans Debt Worries – WSJ.

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5 replies »

  1. The problem is simple – people are encouraged/allowed to take out loans that they believe/understand they need not repay unless they are somehow able to secure (and maintain) a high paying position after graduation. Repaying college debt is somehow “unfair” in situations where things don’t work out as planned/dreamed.

    Contingencies, such as tuition increases, illness of the student, lack of continued financial support from family members is a risk to be born by others, by the government, by taxpayers – not the borrower student. I/my parents need not “save up” to go to college, I need not obtain GI bill support, I need not finance my education by working during the day and taking classes on line or in the evenings – instead, let the government/taxpayers finance it and take almost all the risk of loss.

    Bottom line, the risk of losses due to college financing has been almost completely shifted to the government, and in turn, to taxpayers (many of whom will never, ever attend college) – while the benefits of college education remain with students. Another new government entitlement of the Obama “Transformation”

    The fact that the debt is not dischargeable means little if the government does not pursue collection. Expect the amount outstanding to become so gargantuan (sp?) that the government (like the IRS and other non-dischargeable tax debts) to start to accept offers of 10 cents or 20 cents on a dollar for those who are in default > 365 days.

    Bottom line, open your wallet, you greedy taxpayer you!

    My initial note:

    FYI, the government just announced yesterday that 6.9MM Americans have not made a single payment on their student loan debt in the last 365 days. The same report confirms that total student debt has tripled over the past 10 years, growing from about $375B to $1.2 Trillion!. Remember that the recession ended in June 2009 – more than six years ago. A Wall Street Journal article this AM mentioned one Derel Lance, 31 years old, who had accumulated $70,000 of student debt (undergrad and grad school), who remained in San Francisco and took employment as a “freelance charity fundraiser and marketer”. He only started making payments once he was advised that Mom the cosigner on the debt would be contacted by debt collectors and be required to make good on his loan.

    Instead of addressing the issue, Mrs. Clinton recommends expanding government support – with a proposal that she estimates, conservatively, will cost taxpayers $350B MORE over ten years.

    Again, I say, seems quite unfair that all taxpayers (particularly those who never aspire to attend college and those who worked their way thru college or spent time in the military to earn GI bill benefits) are charged to finance college education for a few. They get no vote here now that the Obama Administration totally took over the student debt market in 2010 – and has found ever more generous options to pass taxpayer funds designed to buy votes.

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  2. College costs will continue to rise as long as the government continues to provide “no questions asked” loan guarantees. If the lifetime outstanding loans were say 2x the national mean salary for a given degree, costs will come down as student will not be able to get guaranteed money to complete their studies.

    The other issue here is that the payment plans should include all of the monthly interest plus some principle. They finally required that form of payment on credit cards to prevent the banks from enslaving people.

    Also a truth and lending form should be filled out when applying for student loans that include the effects of all prior student loans, realistic pay back times, affect on the first born, etc. Right now the activists and government is telling you that you must get a college education at all costs. I wonder if it isn’t really the banks that are pushing this since they are always guarantee their money even in bankruptcy for student loans?

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    • I also think that some of the burden needs to be placed back on the colleges to ensure that students finish their degrees. No Child Left Behind believes that all students must take a college track in high school. Some people are not well suited for college. For profits as well as private colleges are more than willing to take the students money and the government is more than willing to supply the money.

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