Crushed by college debt: Massive loan bills hang over graduates, derail life plans

[marmar]

from the Detroit Free Press:



Sean Doerr, like thousands of Michigan college graduates this spring, is trapped between a rock and a hard place.

To get a good job, he knew he needed a college degree. But getting it cost the 22-year-old Detroiter dearly. He graduated Thursday from the College for Creative Studies in Detroit with more than $85,000 in debt.

He's far from alone: 130,000-plus Michigan residents are trying to repay school loans, and 10,711 are in default. Their average debt in 2010: $25,675. But many, like Doerr, have bills approaching $100,000 or more.

The debts, already at historical highs, will climb even higher if Congress can't agree to hold down interest rates on federally subsidized loans. But even if it does, Doerr still faces years of college bills. ..................(more)

The complete piece is at: http://www.freep.com/article/20120513/NEWS06/205130521/College-graduates-are-crushed-by-debt?odyssey=tab|topnews|text|FRONTPAGE

[xchrom]

1. Du rec. Nt

[dkf]

2. I don't understand what these kids thought they were getting in to.

Are these loans being issued without disclosures on schedule of payments and different scenarios?

It is ironic that college is being sold without any financial education...educators my ass.

[Egalitarian Thug]

3. Most of them probably thought they had no choice. n/t

[just1voice]

9. That's likely true in our corrupt banking/predatory capitalist system

They likely feel they either go into massive debt or don't go to school.

[backscatter712]

25. That's the choice.

Which is why I'm not feeling particularly guilty about failing to pay student loans. The banksters can go fuck themselves.

[dkf]

32. Why is it the banks fault and not the college or university?

It's pretty twisted when the person who charges you an arm and a leg is innocent but the person who loans the money is the bad guy.

[Egalitarian Thug]

33. It's the bank's fault because they paid to have the system set up

this way specifically for the purpose of turning a good idea, educating American citizens, into an obscene racket. Additionally, it is this system that allows colleges and universities to become so disproportionately expensive.

[dkf]

38. And no one would complain if the banks stopped lending?

I bet the Democrats in congress would be the first to raise holy hell and talk about "ungrateful banks".

[Egalitarian Thug]

39. Non sequitur. n/t

[riderinthestorm]

4. Or they are graduating into one of the worst economies in decades?

Or the field they started in has dried up in the 4 or 5 years it took them to graduate (funnily enough, the exact duration of this financial crash) like civil engineers, or architects?

Some of this is poor planning but a LOT of it is the economy over which these students have no control.

So we're bailing out banksters and investors worth billions but won't bail out our best and brightest young minds? Its a fraud.

[Fumesucker]

5. Kids get remarkably conflicting advice and the situation has become a real Catch 22..

On the one hand you should not go into debt, on the other hand it's difficult to get that piece of paper that says you have a top flight education without spending a great deal of money at a point in your life when you don't have much.

Without the piece of paper you're simply going to be locked out of most desirable occupations, the ones that people want to see their kids go into for the most part.

[Mariana]

17. The local school district's guidance counselors

really push the students hard to apply to the big-name, high-dollar schools.

My kid is about to graduate, and will be going to the local community college in the fall.

[PA Democrat]

21. It is pretty much up to the students to try to track what their total loan payments

will be. There is a tool on the Dept. of Education's website that you can use to calculate loan payments, but many students have additional loans outside of the federal student loan system as well.

It gets complicated with the fact that some of the federal Stafford loans are subsidized (no interest is charged until after graduation) and some are not, so the total debt grows while the student is still in school.

For anyone interested, here if the federal loan repayment calculator link:



http://www2.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlentry1.html

[malthaussen]

6. He should have gone in for a trade

'Tis true, college debt is rapidly growing out-of-control. But how much of the problem lies in the sentence "To get a good job, he knew he needed a college degree." Except for certain highly technical subjects requiring extensive theoretical and practical training, why is a college degree "required" for a "good job?" It is one of the simplest rules of market dynamics that price is related to supply and demand. If "everybody" expects to get a college degree, then how is the price to be kept down? Never minding the question of how the standards for the credential are to be kept up, if "everybody" expects one.

-- Mal

[customerserviceguy]

31. I have to wonder what the degree was in

since it came from "The College for Creative Studies". With a name like that, I think you'd have a really tough time finding a recent graduate who actually landed a genuine job with a degree in one of their educational 'programs'.

[liberal N proud]

7. Crushes the parents life plans as well

[Taitertots]

8. CCS is a private art college

$85,000 is enough to get 2 bachelors degrees at Wayne State University and still have more than $10,000.

[Journeyman]

10. Yeah. People need to be smart before they get educated. . .

It's a hard task at times, but I did just 5 minutes of searching on the web to find CCS would not be a wise choice for many students.

[Indykatie]

11. It's Hard for Me to Understand $100K Debt for 4 Year Degrees

I only have to assume that these students went to private or out of state schools that they could not afford when other less expensive options were probably available that were just as good. I would think too that there would be some small level of grants, scholarships and savings but then I'm from a generation that saving for college for your children was a given and actually possible to achieve. I know many families are simply not able to save for education but I also know some who had the means and didn't do it preferring instead to have larger houses and luxury vehicles.

[Taitertots]

12. Wayne State is literally just down the street

The media is bringing out people like Sean Dorr to reduce sympathy for people who will suffer from rate increases.

[riderinthestorm]

30. The University of Illinois, a state school is $30k/year. This is NOT private

its the state school, in state tuition rates.

Edited to add that's for a bachelors degree, masters are even higher!

[alp227]

14. When I first read the name I thought "for profit college"

[exboyfil]

13. Some observations

When my daughter was down for Engineering Days at the University of Iowa they had about 20 students that were helping. They went and asked each one if they were on track to graduate in 4 years. All but one double major said yes. You could tell that the school took this very seriously (our state schools have 4 year graduation plans that promise that the courses you need to graduate semester will be offered and you will get the chance to take them each semester.

I suspect admissions officers of the shakier institutions prey upon the dreams of individuals (kind of like really good car salesmen). You can see it in the slick advertisements for for profit colleges. I think every recipient institution of student loan money should disclose on their advertisements their current default rate (such as University of Phoenix at 18.8%, ITT Indianapolis at 22.6%, Kaplan at Davenport at 17.3%, and Devry at Chicago at 14.2%). Actually schools with default rates higher than 10% should not participate in student loan/grant programs but it is a start.

Some well known institutions with the highest default numbers:

Penn State at 4.2%
Arizona State at 3.9%
Rutgers at 2.9%
University of Minnesota at 1.7%


I took a table on the government web site and ordered it by the biggest damage (number of defaults). The University of Phoenix is the worst at 186,090 (a truly breathtaking number).

[Aviation Pro]

15. The University of Phoenix....

...is not a real college but the template for the way corporations want to take over education as a business model. I've met "Phoenixers" and by and large they are second tier ticket punchers.

[47of74]

16. I remember my last trip to Italy

Our guide Luigi explained how little college cost in Italy compared to what it cost here in the states. I remember thinking, "If people had a choice where they could be born why the fuck would anyone chose to be born in the United States anymore?" It's just obscene what people have to pay for college compared to other places on this Earth.

[closeupready]

18. Can't students just borrow $80,000 from their parents?

Incredibly simple solution, and I think Romney is right on that.

But it's an interesting thought to consider how many of the original Founding Fathers were what would today be considered 'deadbeats'. I think even the concept of discharging debt in bankruptcy/Chapter 7 is something that gained hold in the New World way before it did in the Old.

Yet, here we are today, regressing; it started with Reagan. Corporo-Democrats buy right in to the agenda; as they make money on moneylending, too.

Young people should reconsider going to college, as our society doesn't value education or intelligence. We value bombs and killing machinery. If they take on costs associated with college, they are going to be on their own when the bill comes due.

[Taitertots]

19. Borrow? $80,000 is less than Romney's birthday money

But seriously, the founding fathers had direct liability for the debts of their companies. They didn't get to go bankrupt; they paid out of pocket when they ran a company into the ground.

[malthaussen]

20. Well, Hancock owed in the neighborhood of 100,000 pounds to the Crown...

... for smuggling. He managed to find a way to avoid payment.

-- Mal

[closeupready]

27. The state of Georgia was founded as a deadbeat's haven.

>>James Oglethorpe was such a thinker. He and a group of charitable investors asked King George for permission to create a utopian experiment for English citizens imprisoned for debt. England's prison population could be decreased, and thousands of individuals could be given a new chance at life. With these lofty goals, Georgia was created.<<

http://www.ushistory.org/us/5d.asp

[Taitertots]

29. Now all he would have to do is declare his corporation bankrupt n/t

[Posteritatis]

22. Let the student-blaming resume! (nt)

[PA Democrat]

24. I wouldn't want to be a college student or a recent graduate right now.

I managed to graduate debt-free a little over 30 years ago. It now costs over $100,000 to attend my alma mater, a public university, for four years. And when I went to school, there were still good-paying union manufacturing jobs in this area. Kids today are screwed.

[Posteritatis]

26. Yeah, on my side of the border tuition's gone up by about 50% in the last decade

Every other university's running up a new business school building every few years so they can Stay Current and just pass the costs on, and the general disdain for education voters as a whole have is killing funding from other sources. Feels like the same thing that's been going on in the US, just (for now) less aggressive.

[WCGreen]

34. I graduated about $5 grand in debt...

I had it paid off in two years.

I went to a community college for all the requirements and then on to University for the degree requirements.

[backscatter712]

23. The banksters have been using debt as a weapon against everyone who's not a 0.1 percenter.

As for students, the word is debt strike.

Iceland did the right thing in just completely refusing to pay what the IMF claims they owe them.

Fuck debt. It's a weapon designed to keep people enslaved. People are forced into debt either to get an education, or to keep the rent or utilities paid, or to buy groceries when there are no jobs, or just to buy a house.

I'll say this about my personal debts (currently a lot of student loan debt) - if the banksters can't find a way to get an economy rolling where I can get a job that enables me to live comfortably while paying my debts, then I'm just going to welsh.

The student loan payments will be the very last priority behind rent, utilities, health care, food, etc., and I will work very hard to make it impossible for the bastards to collect.

[RC]

28. For starts payments will come out of any tax refund you may have coming.

And bankruptcy does not absolve you of student loan debt.

[limpyhobbler]

35. All student loan debt should be forgiven.

It's a jobs plan. It will stimulate the economy.

[meaculpa2011]

36. A quick look at the CCS website...

indicates that tuition is $16,500 per semester.

Our local community college has an outstanding art program and tuition is $1,800 per semester. Add two years at the local state college (which is required to accept all CC credits) plus all supplies and administrative fees and voila! All in for less than one year's tuition at CCS. Of course, I'll have to have my two little angels living with me for an additional four years (or more) each, but that's a small price.

[a la izquierda]

37. I've graduated into a lucrative field...

but NO ONE is retiring, which means no positions open up. I've got three degrees from good schools, a great dissertation, and a job (for now). But I've got 30 years of student loan payments ahead of me.
Another problem- these loans, even the federal ones, are often sold off and sold off, so it's very hard for some of us to figure out who the hell actually OWNS our loans. I didn't realize that I hadn't consolidate all of my loans because some had been sold off, and I'm not late on a bunch of them. Luckily, my lender is pretty understanding.