Obama to announce plan regarding student loans

Discussion in 'Politics, Religion, Social Issues' started by dukebound85, Oct 25, 2011.

  1. dukebound85 macrumors P6

    dukebound85

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    #1
    http://www.msnbc.msn.com/id/45039424/#.TqeRH5wu4kY

    Personally I am against this. This effectively shifts the cost of these loans from those who had agreed to pay it to tax payers. Utter nonsense. When it comes to college education, there has to be some sort of accountability when it involves loans (be it choose a cheaper school, work, stay in state, go to a cc the first few years etc)

    If I were Obama, I would make it a requirement for school to list majors and their projected salary when offering loan packages to individuals.

    I am getting tired of people continually being bailed out for their naive decision making process when those who have thought sensibly and are doing things in an appropriate manner tend to get put by the wayside by legislation such as this

    FWIW, I do have student loans out
     
  2. CorvusCamenarum macrumors 65816

    CorvusCamenarum

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    #2
    Better this than toxic bank assets.

    I've been saying for a long time here that the price of college is too high partly because too many kids are going to college. Reduce demand, reduce price.

    Makes sense, provided you consider a college education an investment.

    This.
     
  3. hulugu macrumors 68000

    hulugu

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    #3
    Generally, I think this is a good thing. Lowering the interest rate, making loans and college cost more transparent, and allowing for consolidation are steps to making college more affordable without simply giving it away.

    Remember that student loans are already government backed and almost completely impossible to wiggle out from under, so making it easier for students to repay their loans over longer time-frames will ultimately be beneficial.

    On the other hand, colleges will still be able to raise tuition and private or for-profit colleges will still abuse the loan system to get students without any sense of whether their education will actually help them in the future.

    For-profit colleges like University of Phoenix seem increasingly part of the problem, offering easy student loans without financial counseling, with education that can be nearly worthless in the real world.
     
  4. acidfast7, Oct 26, 2011
    Last edited: Oct 26, 2011

    acidfast7 macrumors 65816

    acidfast7

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    #4
    No difference here.

    Actually, it could be worse for most borrowers in terms of interest paid.

    Will not get shuffled to the taxpayer ... lol.

    EDIT: one other thing, the whole point of attending a university/college versus a technical/trade school is NOT job preparation. that's not the traditional role of a university/college, therefore, the argument about providing potential earnings with never happen, nor should it.
     
  5. mkrishnan Moderator emeritus

    mkrishnan

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    #5
    I think there's broad value in college education, and I feel fortunate to have had mine, but in 2011, the historical role of college is about as relevant as the historical American perspective that only landowning white males should vote. People today attend college at least in significant part with respect to the careers they want, and the posturing from liberal arts programs that they provide some kind of phantom values that engineering programs do not is just self-preservation talk (even though I think the liberal arts are valuable, having gone through an engineering education, I know few people who have liberal arts educations who are as "well rounded" in their knowledge as I am).

    I would like to know more about how this will "not cost taxpayers anything," since I don't trust that phrase from the administration. The education loan / grant reform I would like to see is an overhaul tying government subsidy to outcomes, starting with cutting off loan/grant subsidies to education at dicey for-profit and marginal not-for-profit institutions that engage in predatory practices to lure bottom tier students, bilch money out of them, and then fail to make them employable.
     
  6. likemyorbs macrumors 68000

    likemyorbs

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    #6
    Maybe so many kids wouldn't have to go to college if it weren't near impossible to make a living in this country without it. Partially thanks to conservatives handing out tax cuts to companies who outsource manufacturing jobs. These days, a bachelors degree is like a second high school diploma. In addition, many americans are no longer willing to do blue collar work, and since the internet has been around more and more people have been attending college. I'm not sure of the correlation between the two but their is definitely a correlation between technology and education. I personally think that's a good thing. Your post suggests it's a bad thing that so many kids are going to college.
     
  7. acidfast7 macrumors 65816

    acidfast7

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    #7
    Not at all. That's your perspective, not the role of a university in society. I can understand how you'd repeat that misconception as you've probably been told that multiple times, perhaps even by staff, but most likely not by professors, during your education.

    That a personal misconception, albeit sometimes perpetuated by university staff.


    Liberal arts degrees provide "culture", which is essential, although hard to quantify. Also, it sounds as if you need to expand your circle of friends. As an engineer, you should know how difficult it is to quantify "well roundedness." To be honest, I've never really been impressed engineering curricula due to their unidimensional tendencies.
     
  8. acidfast7 macrumors 65816

    acidfast7

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    #8
    I think that the onus is upon you to provide a scenario where it would cost taxpayers money, if you disagree with my statement.

    I don't see how this could cost taxpayers anything as the loans are not dischargeable through bankruptcy.

    In addition, if the borrower doesn't earn enough to repay their loans after 20-25 years, at 10% disposable income, the government's loss (here I assume you're referring to the balance of the loans) on this person will be so large, i.e. they're essentially non-productive over their lifetime, that the loss on the loans will be insignificant compared to the rest (i.e. life-long dependance on social programs.)
     
  9. P-Worm macrumors 68020

    P-Worm

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    #9
    That a personal misconception, albeit sometimes perpetuated by liberal arts staff.

    P-Worm
     
  10. Mac'nCheese macrumors 68030

    Mac'nCheese

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    #10
    Obama is giving a speech about this now. You can see it on MSNBC or you can watch a car chase on Fox News cause that's important, too. Anyway, for a liberal who has no problem helping the poor, the unemployed, those who might lose their homes....I've got mixed feelings about this. he's talking about all the money he and his wife owed for the law school loans they had and now they had kids and needed to save up for their college. But....Who forced him to go to law school? And why should I care that a lawyer who is making a nice living has to pay for 30 years to pay back his loans? So what? That's his/her choice and if you can afford your home, your car, etc, you should be grateful that you have a job to do so. Who cares how long it takes to pay back the loan, its what afforded you your life? Its like people bitching about their mortgages because right now their homes are worth less then they owe. But they are living in it and someday, they will pay down that huge debt. But, in the meantime, they are living in the house they chose and you can't put a price on that, can you?


    rant over....
     
  11. acidfast7 macrumors 65816

    acidfast7

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    #11
    lol.

    I'm a biochem prof and I think you should consider what the world would be like without any liberal arts graduates. Do you want a planet full of engineers, biochemists, etc...?

    Also, universities aren't for training, they're for knowledge generation and transfer. period. full stop.

    If then transfer provides preparation for an occupation, then so be it, but it's not mandatory, in any field of study.

    ----------

    Another perspective is to think of the American university system. It's one of the few systems where full tuition is required and I'm not convinced that this results in a positive effect on the quality.
     
  12. Macky-Mac macrumors 68030

    Macky-Mac

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    #12
    here's why Americans think they need to go to college (link);

    [​IMG]

    The percentage of the population that goes to college has increased dramatically over the last several generations and that increase has been heavily driven by the idea that having a college degree will get you a good job.

    Have we now reached a point where we're producing more college graduates than the economy can absorb?
     
  13. acidfast7 macrumors 65816

    acidfast7

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    #13
    I like how that chart doesn't even consider opportunity cost.
     
  14. Rodimus Prime macrumors G4

    Rodimus Prime

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    #14
    Lets get to the real reason college is to high in cost.
    Yes demand is high but the bigger reason is states keep cutting high eds budget every year so the only way for college to keep going is raise prices. In the 80's for example University of Texas 50% of its year budget was state funded. Now it is like at below 15% and being cut more every year.

    States cut high ed about ever year.
     
  15. acidfast7 macrumors 65816

    acidfast7

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    #15
    I'm convinced that the accessibility of student loans is the major reason for the cost increase. It's capitalism after all, no?
     
  16. Rodimus Prime macrumors G4

    Rodimus Prime

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    #16
    And the fact that states are cutting funding to high educations every year is not a major factor?

    They get more students coming in and less money from the state. What do you expect to happen. Also Colleges are not for profit.
     
  17. acidfast7 macrumors 65816

    acidfast7

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    #17
    Who is "the state?" Stats?

    Colleges are "not for profit?" What does that even mean besides certain tax-exemption statuses?

    Have you ever worked at a university?
     
  18. GoCubsGo macrumors Nehalem

    GoCubsGo

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    #18
    I'd like to better understand where people are seeing this as a bailout? Unlike the typical bailout we've seen in the mortgage/banking industry, this plan is not to completely forgive debt. I've been trying to consolidate my loans for a couple of years now. I've been met with constant denials not because of credit according to the denials. I made a choice to go to college. I made a choice to earn a Bachelor's and a Master's degree and as far as my MBA goes, I went to a school that offered something that few schools offer. I made the decisions to borrow the money and whichever loans weren't subsidized I paid interest while in school. This shows a level of responsibility that I believe few show.

    Despite my borrowing and my degree my industry has suffered a great deal of ups and downs. As a result, my earning has suffered to a certain point and therefore, my ability to sustain the payments on the loan is harder. In an effort to not default I opted to try and consolidate the loans. I welcome some relief because as many know, there is no relief from this debt otherwise.

    Even though I would like the relief I would love to know why people consider having the opportunity to consolidate loans is a bailout. If you're saying the bailout comes when the debt hits 20 years then I can understand that.

    Unlike mortgage loan modifications that are awarded to people who made bad decisions who now sit on 2% interest rate loans with shoddy credit and months to years of missed payments, I just don't see this new legislation in the same light as the OP.

    Unless you tell me that those who have not made a payment on their student loans for a period of time, are in default and will not be brought current and granted some consolidation and interest rate reduction, this is in no way similar to the bailouts irresponsible mortgagors are getting.

    BTW: All colleges are for profit. If you don't think so then you have homework to do.
     
  19. imahawki macrumors 6502a

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    #19
    I agree with the first couple posters. Yet ANOTHER example of the 53% bailing out the 47% for poor decisions.

    As far as the quote above, that's fine but paying $100k for college because it makes you more well rounded is ****ing stupid. If you can't pay off the loan because of a higher paying job, don't get the loan. You're not entitled to be more well rounded on my back. ESPECIALLY since it doesn't work. How many of those OWS protestors have a college degree and can't string a coherent thought together?

    What this situation AND the mortgage crisis have taught us is that someone will loan you money for pretty much anything. We've gotten to a point where there is no individual accountability.

    If you were making $60k and took out a $400k home loan that should be YOUR fault, not the banks. I make $200k and have a $176k home loan. I'd like a $400k house but I decided that wasn't a smart move. Now I feel like I'm being punished in some perverse way. I should have bought a $400k home and made the bank adjust my mortgage. Same with my degree. I worked hard and graduated with only $5k in student loans. I would have liked to have gone to a best in class private school. I went to in-state public school instead. Maybe I should have gone to that private school and got my loans forgiven.

    And for those who disagree and think the fault lies with the banks, I doubt you REALLY want that. The only way to accomplish that is to have the banks tighten down lending so they only loan to sure bets. You want a student loan to go to Princeton and study Art History? Sorry, no, you can't have a student loan because that career won't allow you to pay back your loans.

    ----------

    This is just saying college is more expensive because they've quit making the tax payers pay as much of the cost. The plan cited in this thread is just an end around to put the cost back on the tax payers.
     
  20. Mac'nCheese macrumors 68030

    Mac'nCheese

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    #20
    Because of this:

    "In addition, the White House says the remaining debt would be forgiven after 20 years, instead of 25."


    So, you make smaller payments for five years less then before and then you don't have to pay the rest. Can I change my car loan to a smaller payment, and knock two years off of it and then forget about the rest?


    From:

    http://abcnews.go.com/Politics/wireStory/obama-college-loan-plan-aims-voting-bloc-14814817
     
  21. acidfast7 macrumors 65816

    acidfast7

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    #21
    Maybe you should read the article. I hope your remuneration is not based on reading comprehension.
     
  22. imahawki macrumors 6502a

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    #22
    If Universities aren't for "training" then why do you need to go to one to become an artist? Just join a coop and study writing or painting or play writing with other artist. The issue is NOT that people don't want art or artists, as your straw man suggests, its that people like me don't think you should take on $100k worth of debt to become an artist. Its not financially sound and if you fail commercially, your debt becomes the burden of the taxpayers.
     
  23. P-Worm macrumors 68020

    P-Worm

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    #23
    I see you live in Frankfurt, so maybe the system is different there. Here in the US, the individual states have schools that are funded by state tax money. The point was that as states cut the money that they are giving to state universities, that money has to be made up somewhere else - usually in tuition increases.

    Also, the state universities aren't for profit because they don't have owners (other than the state). Much like a non-profit organization the school can pay faculty etc. but the school it self is not for profit.

    P-Worm
     
  24. imahawki macrumors 6502a

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    #24
    He will put it into effect in 2012, instead of 2014. In addition, the White House says the remaining debt would be forgiven after 20 years
     
  25. mkrishnan Moderator emeritus

    mkrishnan

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    #25
    This is no doubt a result of my unidimensionality and lack of intellectual roundness, my having the wrong friends, and my failure to reject the idea that college education is a self-interested career move, but I still don't understand how accelerating debt forgiveness and lowering payment sizes is coming at no taxpayer cost. Is it purely because the government buys out private loans and cashes in on part of the difference between the interest rate on its own loans it pays and the interest rate the bank was charging the consumer?
     

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