Warren's Plan on Student Loans

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SLVRBK

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We don't disagree here, & she's really not the kid I'm concerned about.

I'm more talking about the kid who works a job throughout school, makes reasonable choices about borrowing & still comes out owing $60k.
The maximum allowable amount on a federal subsidized/unsubsidized undergraduate dependent student loan is $31k. This is approx 85% of the loans used by college students.
 
Nov 16, 2013
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Maybe it's changed since our daughter graduated HS in '15, idk, but for years I've never understood why at least a basic personal finance class is not required for every kid, given all of the other less practical stuff that is required. Personal finance literally applies to every single kid coming through our schools, every single one.
it is required, but unfortunately most of the people that teach it don't have a clue
 

RxCowboy

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Far too logical.
Here is the key point, and also given the power of the connected, why it won't go away:

The current system is exploitative: The students essentially function as a conveyor belt carrying government money into the universities, leaving borrowers instead of taxpayers on the hook because it looks better from an accounting point of view: If we just gave the universities money, that would show up on the books as an expenditure; lending it to students allows us to pretend that we have created an asset when all we have actually created is a great deal of debt and horses**t.
Yep, the student loan garbage is government subsidizing higher ed and has cost higher ed prices to rise. It happens with everything the government subsidizes. Eventually the bubble will burst, just like it did with the housing industry. And fingers will be pointed everywhere except the root cause, federal government subsidy of the industry. MOAR GOVERNMENT will be the solution, of course, because every failure of government is an excuse for more government.
 

RxCowboy

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New story up on Yahoo.

https://www.yahoo.com/finance/news/...orrowers-dont-understand-costs-193650429.html

Here is a quote:

"Nearly half of borrowers surveyed had no idea what their debt obligations will be once they graduate: 49% of borrowers did not know what their monthly minimum payment would be, with as few as 10% of 18-34 year-olds knowing what the exact payment amount would be."

Staggering.
That's because universities are literally barred by law from sitting them down and saying:

You are borrowing x. Your payments will be y per month because your interest is z and the loans are for k years. Given your major you can expect to earn q per month. q-y=n which is your net after paying your student loans, which after borrowing $200,000 is a negative number. You are borrowing too much, you need to forget about Spring break in Cancun and get a part-time job so that you don't have to borrow so much.

This should also be a function of parents as well, but at my university in particular we have almost 2/3 of our students are first generation college students, meaning their parents never went to college or never earned a degree, thus they simply do not have the skills to be able to do this.
 
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That's because universities are literally barred by law from sitting them down and saying:

You are borrowing x. Your payments will be y per month because your interest is z and the loans are for k years. Given your major you can expect to earn q per month. q-y=n which is your net after paying your student loans, which after borrowing $200,000 is a negative number. You are borrowing too much, you need to forget about Spring break in Cancun and get a part-time job so that you don't have to borrow so much.

This should also be a function of parents as well, but at my university in particular we have almost 2/3 of our students are first generation college students, meaning their parents never went to college or never earned a degree, thus they simply do not have the skills to be able to do this.
I guess things have changed. I picked up financial aid packets from the school with the only conversation being a quick discussion of which programs I was eligible for. Took the application(s) home, filled them out, mailed them, and everything I needed to know about the terms was provided by the lender in great big, easy to read text when they returned an acceptance letter....THAT I HAD TO SIGN after reading and mail back. The only time I heard from the university again was when I made a daily foray into Whitehurst. Those conversations were a few weeks with various iterations of

Them: "Next"
Me: "Has a check arrived for <states social security number>" (or early on, the 6-digit student ID number)
Them: "Nope"
Me: "Thanks, see you tomorrow"

Until their last response was "Here you go," which was promptly followed by a bike ride to the bank, eating fat for about a week and getting drunk on Scotch Buy for a few straight days.

So even if a university cannot discuss anything, the lender most certainly can and you do not actually agree to the assistance until after they first approve your application, they send you the terms and you sign completing the contract. For me anyway, there was nothing to calculate except being able to add the monthly payment from agreements past to the current year's payments.
 

RxCowboy

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I guess things have changed. I picked up financial aid packets from the school with the only conversation being a quick discussion of which programs I was eligible for. Took the application(s) home, filled them out, mailed them, and everything I needed to know about the terms was provided by the lender in great big, easy to read text when they returned an acceptance letter....THAT I HAD TO SIGN after reading and mail back. The only time I heard from the university again was when I made a daily foray into Whitehurst. Those conversations were a few weeks with various iterations of

Them: "Next"
Me: "Has a check arrived for <states social security number>" (or early on, the 6-digit student ID number)
Them: "Nope"
Me: "Thanks, see you tomorrow"

Until their last response was "Here you go," which was promptly followed by a bike ride to the bank, eating fat for about a week and getting drunk on Scotch Buy for a few straight days.

So even if a university cannot discuss anything, the lender most certainly can and you do not actually agree to the assistance until after they first approve your application, they send you the terms and you sign completing the contract. For me anyway, there was nothing to calculate except being able to add the monthly payment from agreements past to the current year's payments.
The lender is now the federal government. That's what I'm tryna get across. Didn't you miss that in Obamacare?
 
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I have a lot of pride in my self funding of college, I worked during school and as much as I could during the summers. I also was on the Meats Judging Team at OSU and unlike the athletic programs when we traveled we covered a lot of the expenses(at that time). I struggled for sure but I made it thru with $5K in student loan debt. I had no assistance from my parents financially, I applied for a lot of scholarships and I lived within my means. I learned a great lesson from that struggle, went to grad school in AR and left with 5X the student loan debt and no degree. I paid off my debt in 11 years, 1 year forbearance was because I was laid off in 2008. Would I have enjoyed my debt being erased, of course I would but I feel like I wouldn't have as much pride in what I accomplished. If you can't pay it back don't borrow it.
 
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The lender is now the federal government. That's what I'm tryna get across. Didn't you miss that in Obamacare?
But is the process still not somewhat similar where whatever lender is giving you money tells you your payment terms before you actually sign? I find it hard to believe upon accepting an application they just mail the applicant a check without disclosing payment terms and the applicant signing off to it..

Now granted, that does not help those who are clueless about what to expect with a salary, but they should at least know what their payment are going to be and for how long.
 

RxCowboy

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But is the process still not somewhat similar where whatever lender is giving you money tells you your payment terms before you actually sign? I find it hard to believe upon accepting an application they just mail the applicant a check without disclosing payment terms and the applicant signing off to it..

Now granted, that does not help those who are clueless about what to expect with a salary, but they should at least know what their payment are going to be and for how long.
Maxine Waters is the lender... she voted for the legislation...