College Student Loans - A commentary

[Bread and Circuses]

Comments about student-loan forgiveness:

I have worked in higher education for over 20 years. Students and parents are cautioned about debt. There are workshops, pamphlets, presentations.

Problem # 1
Some students and parents were SCAMMED by for-profit schools who 'bought' non-profit colleges and became non-profit. These colleges have NO entrance exam requirements, inferior instruction and highering managers do NOT value degrees obtained from these 'colleges'. The students flocked to the schools because they could 'get in and get out'. Yes. There were ads on TV. Yes, there is accreditation , but it is a low bar.

Problem # 2
About 1/3 of all college students drop-out before completing a degree. Top reason that I and my peers encountered are :
(A) the student didn't really want to go to college, but parents wanted them to go
(B) the student didn't know what they wanted to study
(C) the student didn't like the classes, the professors, the subjects, material was too hard, etc.
(D) the student admits that they are not ready for college and is immature, plays computer games all night, parties, sleeps-in, etc.

Problem #3
Private colleges and universities overcharge for tuition and fees. Students are admitted and attend because they are enamored with the beautiful environment, small campus, and the sales pitch. Often these students must use a combination of financial aid, grants and loans. These colleges give the students a small scholarship as a 'carrot'
Yearly tuition and fees of $40K yearly is common. Students graduate with $80-100 K in debt. There is no reason to occur this much debt if a student is NOT attending a top 20 university ....and hopefully majoring in a field that is in demand.

Problem #4
College education does not equal preparation for a career or is it job training, except for a few disciplines (nursing, pharmacy,engineering,computer science,accounting, etc. ) So, attending a private university and over-paying for a good liberal arts education is just that..... A very good experience and a sweatshirt from a prestigious university.

For most students, I advise:

1. Attend local community college if you are not academically inclined or you are unsure of your interests. Transfer to 4-year university once you have required credits.
2. Attend local state college/university and live at home if you are a B/C student.
3. Attend flagship state university if you have a strong academic background, are mature, self-motivated and can get yourself up in the morning, not loose your textbook or forget when your exams are scheduled.
4. Attend private university if conditions in #3 are met and you are majoring in a field that prepares you for a career that is in demand and pays well.

Of course there is exceptions.

I'll park my opinion now. I have a lot more I can say but enough for now.

Thanks for reading and sharing your thoughts

[TheRealNorth]

1. You forgot to mention that college tuition costs have way outpaced inflation and wages.

It's not like people didn't major in studies that didn't lead to a job in a high-paying field 40 years ago. The problem is that today, you pretty much have to. And let's not forget technology can adversely affect some majors. When I went to college, I was planning to be a medical microbiologist. However PCR technology destroyed a lot of those jobs as hospitals and labs could hire a lab tech to run the PCR machine.

[Bread and Circuses]

7. The economy has changed over past 40 years....

Yes. 30 or 40 years ago, a college degree was an indication that the student had advanced skills, knowledge, and academic abilities. Employers would hire a good student and place them into a 'management training' position or similar position. Today, employers want someone who contributes to the bottom line on Day One. The economy continues to change and parents/students need to wake up. It's OK to delay attending college until later. But, parents push kids and kids feel like a 'loser' if they don't go to college.

[Colorado Liberal]

2. It's not just private colleges and universities that overcharge

At least in some states, so do public universities. My daughter went to a state university in Colorado, as an in-state resident, and between her loans and my Parent PLUS loans, it's over $90K in debt. She's working on her PhD in engineering now (and ironically, has a scholarship that pays 100% of the expenses for her graduate work). I know I won't get any relief from what is being proposed, and I am fine with that, but I really hope that part of the solution (in addition to student loan forgiveness) is reforming the federal student loan program (in my opinion, 7 1/2% for a student loan is absurd) and bringing down the costs to attend public colleges and universities.

[Bread and Circuses]

6. Costs at public universities are rising too.

Agree that loan rates are too high. I also think that loan amounts must be capped. Students/Parents are grabbing a 'pie in the sky' by taking out loans that are beyond their means.
And, parents are pressured to carry debt for their kids I don't think it makes sense.

[SharonAnn]

3. A lot of explanations are not readily understood by those who are not very financially literate.

And the private for-profit colleges put on a hell of a sales pitch. They're just a scam and many people are victimized by them.

In addition, our student loan process and policies are so bad they are almost criminal. If banks could borrow at almost 0%, why couldn't students? And then, supposedly there is a forgiveness if you spend 10 years in a particular group of public service jobs, bu the loan companies are allowed to misrepresent this and it's the students who are screwed? They're in the jobs they were told would grant forgiveness but the company lied to them. So the student still owes the money? Baloney, go after the loan provider and get the money from them.

To expect students to know more about all this financial stuff, scams, and chicanery is ridiculous. Most of us mature adults with an MBA would have trouble sussing out the details of each and every scam with this stuff.

[Bread and Circuses]

5. There does need to be reform

I think parents' have too much 'ego' involved regarding what college there child attends and they grab the 'dream school' like it's the golden egg.

I think it's foolish to have so much debt for an undergraduate degree. Loans should be capped at a certain dollar amount so that students can't accrue a loan over $50K...

It is a lot of information for a 17 year old to process.