Comments on: Why Are Student Loans Acceptable?

By: Grim Reality

Grim Reality — Tue, 21 Oct 2008 22:31:28 +0000

Lets face it. Unless you want to be classified as an unskilled worker, you need some kind of training. Some kind of post Public school, education.

For most of the working class, and middle class, that means student loans.

The idea behind the original Higher education act, was to provide low cost (Non profit) loans to students who performed well enough to be able to attend a proper college.

But that got twisted out of shape. Too many private predatory schools got their hands into the cookie Jar along with greedy banksters like SMC. And now we have not one but 2 generations facing a life time of debt collors because the item paid for was worthless to begin with (and congess knew this), and the montly payments are half the persons take home pay with only pennies if any of it, going to paying off the prinicpal.

Student loans are a scam - and the victims are the students.

If companies want you to go to school, they will pay for it.

I sugget to any new student - If you cannot pay cash for it, don’t get a loan for it. Instead, wait till you can. Avoid the “quick fix” lure of student loans. They are not what they seem.

By: whitestripe

whitestripe — Sun, 19 Oct 2008 08:11:55 +0000

you don’t HAVE to go to college. for instance, you can get a trade.
there are OTHER things you can do besides going to college. it’s not the be all and end all of making money. it should be a choice of whether you WANT to study, and what you WANT to do, not just because it’s the ONLY way to make money. some people are so ignorant.

By: brittanyredman

brittanyredman — Sat, 18 Oct 2008 03:57:15 +0000

omg, wtf? have you even been to college? the demand for a college education is RISING! there are no jobs out there for ppl with just a high school diploma or GED!
yes, there is debt in student loans, but you cant go off on it just because students want to further their education. because its like this;

1) you dont go to college, you get a nowhere job, you live paycheck to paycheck and you are STILL piling up debt because you dont get a good paycheck.

2) you go to college, you start a career no matter how you pay for it, and you still have debt but a better way to pay it off and after that debt is paid off, guess what?! YOU GET TO USE YOUR MONEY!! not this paycheck to paycheck business.

i think i would rather go with 2, thankyou.

get a life.

By: On Student Loans (again) « Stacking Pennies

On Student Loans (again) « Stacking Pennies — Tue, 01 Jul 2008 15:37:04 +0000

[...] balance, a post on why student loans aren’t good and advocates paying as you go, even if it takes you 6 or more [...]

By: Jrprofess

Jrprofess — Tue, 24 Jun 2008 19:10:01 +0000

The article is very unbalanced. As one of the posters noted, delaying a completion of a college degree can also delay items such as retirement savings, 401k matches, and differentiated earnings from those who do not yet have, or will not have a degree. Over a “working life” those with a 4-year degree earn a third more than those who stopped out of college, and more than twice the salary of a high school graduate. By taking on reasonable debt, at an economical rate, and accelerating your entry into the work force by a couple of years you can put yourself ahead of the game “savings” wise given your opportunity to contribute that much earlier to the retirement benefits noted above. Getting an earlier and higher paying start on compound interest is a compelling reason to take on “reasonable” student loan debt.

By: orchid

orchid — Thu, 19 Jun 2008 23:28:45 +0000

I have student loans and I make three times as much as my high school class mates that did not go to college or who went into a (non-medical) two year degree program. I was able to get an excellent job in which I get a 401k match of 8% for my 5% contribution. My student loan interest is only 3%. I think my loans are worth it because I invested the student loans well by choosing a major and career path that made it worthwhile. I think student loan debt is good if you plan well and get a decent ROE. Debt is not inherently bad; you have to look at it relative to your personal situation. A $5k credit card balance is “bad debt” to a person who only makes $30k per year, but it means less to someone who makes $130k per year. Education loans are really a good option for people who choose programs that make enough money to pay the debt or for people who get a degree so they can do something they really love and value. Taking out loans is likely not a good choice for those who won’t be able to pay back their loans or for those who don’t place high value on education itself.

By: jganem

jganem — Wed, 18 Jun 2008 00:52:35 +0000

You’re correct that a college education is no guarantee of a job, let alone a high-paying job. But, many high-paying jobs require a college degree and that means as a group college grads earn more than others. Student loans are good debt when they fund a non-transferable asset (education) that strongly correlates with higher pay and even higher life expectancy.

However, college is not for everyone and I teach some students who should not be in college. These students are accumulating what is essentially bad debt because their lack of interest means that their education will be of limited value. Students should not spend money on college just because of family expectations. I think the good debt/bad debt issue depends strongly on the student’s approach to his or her education.

By: Lisa

Lisa — Tue, 17 Jun 2008 21:54:25 +0000

I also worked to pay for college and expenses. Both during the school years and in summers. I worked 20+ hours with 15-20 credits each semester. My parents paid 1/2 and I paid 1/2. I could have done an internship but it would have been on top of my paid job so I didn’t. Employers want to see initiative, independence, motivation and responsibility. That said I think one of the reasons that college prices have escalated out of control is because of financing. Financing makes everything more expensive. If something is financed sellers will make it more expensive seducing you with a monthly payment. If your family cannot afford to pay for 1/2 out of pocket and you paying 1/2 from a job than you should go to community college and then transfer to a 4 year university. Your diploma only identifies your 4 year university not the community college. Also alot of money is out there for assistance and high school/college kids refuse to apply. I am sure no one on this board is one of those but I hear about it all the time at work and from friends. Or the parents complain because their HS graduate doesn’t want to go to the 100% scholarship paid college and wants the 20,000-40,000 a year out of pocket school. I would never have considered or been allowed to consider burdening my parents or myself with that kind of debt. Only MD’s took on massive school loans.

By: reflectionite

reflectionite — Tue, 17 Jun 2008 21:14:21 +0000

@ mike:

the loan is paid back in full by the person who takes out the loan. so technically peoples taxes are only being LOANED to uni students.

would you rather your taxes being LOANED to someone finishing a university degree, or would you rather it gets GIVEN to someone who doesn’t have a job? (on the dole).

also i wanted to comment on the article again, there are a lot of uni students who don’t stay on campus. when i go to uni i won’t be, i will be renting, or possibly paying off a mortgage, and i will have to feed myself, pay bills and fill the car up with petrol.

By: Scott

Scott — Tue, 17 Jun 2008 17:29:13 +0000

@Alexandria

I weighed the pros/cons of working while in school to attempt to pay on the go, but just couldn’t come up with enough positives to go that route.

Your education is not just your day job where you can work the night shift and make tons of money. At least in my degree program it was way more valuable to work a part time research gig to improve the resume to help get that first internship/job. While it paid peanuts, it was enough for a little spending money.

While this job was not a part of my formal curriculum it was as much of a part of my overall University experience as anything else. If you want to make the most of your degree, make the most of your time at school.

I’m happy to have a small month payment for quite a while (1.6% fixed rate) as the interest is peanuts. Also, that interest is tax deductible, which lowers the effective rate even further.

What I’m trying to say is that you can’t just measure this by the money it will cost you in terms of interest. It’s an opportunity cost, what did you give up in order to pay for school by working?