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Started By
Message
re: Student Loan payments restarting
Posted on 8/5/23 at 8:31 am to thunderbird1100
Posted on 8/5/23 at 8:31 am to thunderbird1100
quote:
Want to see college cost go down? The govt needs to turn off the money printer, not incentivize it to be even more appealing to borrow.
Costs won't go down.
What will happen is as the number of students dramatically drops, many colleges will close. Capacity drops as enrollment drops, which keeps prices from falling.
Either the govenment needs to be fully involved in funding college education, or they need to be fully removed from funding college education. This current system is the worst of both worlds.
3
Posted on 8/5/23 at 8:33 am to LSUFanHouston
Posted on 8/5/23 at 2:58 pm to LSUFanHouston
quote:
What will happen is as the number of students dramatically drops, many colleges will close. Capacity drops as enrollment drops, which keeps prices from falling
You don't think as enrollment drops at a specific university it will entice that school to lower costs to try and increase enrollment? They will just keep their prices high as enrollment plummets until they have to shut down?
I guess it is just a race to see if university try to protect themselves faster than university closing to see if prices will drop or not.
Posted on 8/5/23 at 3:20 pm to LSUFanHouston
quote:
And before anyone says I'm insane... what I have proposed is basically a more accountable form of TOPS.
Meh, I don't necessarily think it should just be free if you basically graduate. It would likely also cause such high demand for the state schools that admission standards would get so high potentially causing other perceived problems.
My idea:
- interest fixed at 0%
- all repayments are done based on income
- 0 repayments when below a certain income (say <$50k and increases with inflation)
- just need to find the right % for those over the limit for paying back
- upon death the student loan balance is pulled from the estate and whatever is above the total estate amount is forgiven
In this scenario when someone is not making good money they don't have to pay back anything and the balance doesn't grow. If they become successful later in life well they have to pay back that money they borrowed. It doesn't transfer to heirs so it is never an undue burden on their heirs. Could put an exclusion criteria to fund a funeral before estate pays back the student loans.
Ultimately if you are successful then the taxpayers should not be on the hook for paying for the tools you used to make good money. We also should not be crippling people who are just trying to get by (crippling their current life or digging their hole so big that when they get their life together they can't get out). It is hard for me to think a secretary making $50k who pays taxes should be paying for a Doctor to receive his education to start making $400k after residency.
Posted on 8/5/23 at 3:46 pm to AUVet21
quote:
I’m all for the new bill being introduced about setting interest permanently at 0 but it seems unlikely to pass with only dems sponsoring it.
quote:self owned yourself, pal
if there isn’t going to be an interest rate anymore then there isn’t any point in doing that.
Posted on 8/5/23 at 4:56 pm to bod312
Nm
This post was edited on 8/5/23 at 4:58 pm
Posted on 8/5/23 at 8:38 pm to LSUFanHouston
If all we do is cause inflation in college costs, by fueling demand. Does it matter if your loan is 0% if it's double the amount in a non-proportionate amount of time? Colleges are licking their chops at these ideas being floated.
Costs are not going down? Ok fine, inflation is still a huge issue. You don't cause high inflation because deflation is not likely. The two things do not logically connect.
I think government should get out of the business, I'm fine with that, although I don't think all or nothing are the only options. If school loans were treated more like normal loans, where default risk was a primary factor, the whole system would perform better. Getting a degree that doesnt lead to income from an overpriced school? A loan should incur a huge interest rate in that scenario. We shouldn't double down on why the whole system is fked as is.
Costs are not going down? Ok fine, inflation is still a huge issue. You don't cause high inflation because deflation is not likely. The two things do not logically connect.
I think government should get out of the business, I'm fine with that, although I don't think all or nothing are the only options. If school loans were treated more like normal loans, where default risk was a primary factor, the whole system would perform better. Getting a degree that doesnt lead to income from an overpriced school? A loan should incur a huge interest rate in that scenario. We shouldn't double down on why the whole system is fked as is.
This post was edited on 8/5/23 at 8:46 pm
Posted on 8/5/23 at 10:32 pm to AUVet21
I’ve held onto about $12k that I was hoping President BuyDem would pay off for me. Alas, I’ll have to do it myself. It’s low interest though (~3%) so I’ll just burn off any accrued interest and make payments on the rest til it runs it’s course
Posted on 8/6/23 at 8:58 am to bod312
Or……..
How about you borrow money, you pay it back???
Maybe we need to do a better job of educating students before they take out a loan on what their monthly note will be, what the anticipated salary for their major is, and how that will fit into a monthly budget
Maybe we should cap the amount of money a student can borrow based on major and anticipated salary
How about you borrow money, you pay it back???
Maybe we need to do a better job of educating students before they take out a loan on what their monthly note will be, what the anticipated salary for their major is, and how that will fit into a monthly budget
Maybe we should cap the amount of money a student can borrow based on major and anticipated salary
Posted on 8/6/23 at 9:13 am to Tigerpaw123
The issue is the interest. Say you take out 50k and you make 40k at a starting job. After ten years you have been paying 100-200 a month but now owe 150k. So yes I agree pay back the 50k plus interest but the interest should be set from day 1 and not compounded.
Posted on 8/6/23 at 9:23 am to tigerbacon
Again, educate the borrower on how a loan works and what they will be responsible for, maybe at that point they will decide not to take out 100k of loans to get a degree in philosophy and ultimately have to pay back 400k making 30k……. Educate the borrower, and then hold them responsible
Posted on 8/6/23 at 9:25 am to Tigerpaw123
This needs to be a mandatory curriculum in high school. A big focus on how to handle basic financials would go a long way for every profession and I’m surprised it hasn’t become national standard.
Posted on 8/6/23 at 9:56 am to tigerbacon
quote:
Say you take out 50k and you make 40k at a starting job. After ten years you have been paying 100-200 a month but now owe 150k.
Sounds like you should be pay more than 1-200/month and that should of been part of the education you got before taking out a loan
“So if you take out 50k in loans, @7% to pay back in 10 years your monthly note will be around $500/month, and if you make $40k / year your take home pay will be about $2800/month before insurance, living expenses etc, are you sure you want to take this loan out?”
Posted on 8/6/23 at 10:06 am to Richard Grayson
quote:
I also have a mortgage (which is less than my loans)
Posted on 8/6/23 at 1:40 pm to tigerbacon
quote:
Say you take out 50k and you make 40k at a starting job. After ten years you have been paying 100-200 a month but now owe 150k
It wouldnt balloon to near that big even making $100 monthly payments, unless you had an absolutely absurd interest rate.
But with $50k in loans if the interest rate was say 5% you should be making about $530 payments a month on the 10 year payback plan which basically everyone should be on IMO. The income driven payment system is just a way to trap people into endless student loan payments.
Posted on 8/7/23 at 9:13 am to thunderbird1100
quote:
The income driven payment system is just a way to trap people into endless student loan payments.
I think it was before. It was shocking how easy it was to ask to pay less or not to pay at all and they'd just say "okay, see you next year but we'll keep accruing interest" and people would put it out of mind.
At present the government is devising all kinds of plans to forgive loans after some moderate amount of time of monthly payments, and counting those zero or low payments in there.
Posted on 8/7/23 at 1:11 pm to Tigerpaw123
quote:
Maybe we need to do a better job of educating students before they take out a loan on what their monthly note will be, what the anticipated salary for their major is, and how that will fit into a monthly budget
Maybe we should cap the amount of money a student can borrow based on major and anticipated salary
Perfectly said.
Posted on 8/7/23 at 3:28 pm to tigerbacon
quote:
The issue is the interest. Say you take out 50k and you make 40k at a starting job. After ten years you have been paying 100-200 a month but now owe 150k. So yes I agree pay back the 50k plus interest but the interest should be set from day 1 and not compounded.
This is correct, especially when you think they do not describe subsidized and unsubsidized loan difference in school. Its not just when you get out to start paying, many get intrest of 7% to 8% while they are in school making nothing. You borrow the money, do not have to make a payment for 5 years because you are in school while it accrues intrest which no one tells you that fact when you are getting the student loan.
Posted on 8/7/23 at 3:57 pm to FreddieMac
quote:
This is correct, especially when you think they do not describe subsidized and unsubsidized loan difference in school. Its not just when you get out to start paying, many get intrest of 7% to 8% while they are in school making nothing. You borrow the money, do not have to make a payment for 5 years because you are in school while it accrues intrest which no one tells you that fact when you are getting the student loan
This isn’t true. To obtain a federal direct loan (subsidized or unsubsidized) students are explicitly told about how interest will be calculated and when it will apply. They watch a video and it’s laid out in writing as well. My son just went thru this last year.
Posted on 8/7/23 at 5:53 pm to Tigerpaw123
quote:
Or…….. How about you borrow money, you pay it back??? Maybe we need to do a better job of educating students before they take out a loan on what their monthly note will be, what the anticipated salary for their major is, and how that will fit into a monthly budget Maybe we should cap the amount of money a student can borrow based on major and anticipated salary
I think it is nuts to expect the average college matriculant to have a sufficient grasp of their career prospects and aptitude, to commit to tens of thousands (to $100k+) of non-dischargeable debt. Teenagers with little to no work experience and probably little educational experience outside of a given school system have very little perspective to base these decisions. Often their advisors (especially parents and relatives) have outdated knowledge from a different time and a different job market.
You can educate high school students about the long term impact of student loan debt service, but they are likely to have an overly optimistic (or at least uninformed) sense of how likely they are to succeed in an in-demand field of study, and how likely they are to find a lucrative career in that field.
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