
American Students Know Almost Nothing About Their College Loans - JumpCrisscross
http://www.bloomberg.com/news/articles/2016-02-02/american-students-know-almost-nothing-about-their-college-loans
======
dota_fanatic
It would have been nice to have been told up front: "Rent will be this much
higher (for a building with worse quality due to mass production), which
you'll _have_ to pay to get access to the city where the jobs are. Wages will
be stagnant by this much, and god save you if you have some kind of health
crisis and don't navigate the healthcare system just so."

Anyone saying these kids or their parents should've known better need to get
real. Most of the middle and lower class was hustled. Of course, they and
those with even fewer protections abroad are still needed to get shit done.
That is, only until those jobs can be replaced with automation so profits can
be even higher at the top. Humans are so fragile, costly, lazy, biased /
inaccurate, and replaceable.

What then? People keep saying that things have never been better, though, so I
guess there's that. Meanwhile (anecdote incoming), _most_ of childhood friends
are barely scraping by while living with their parents, clinically depressed &
flirting with homelessness, or dead. The successful ones are few and far
between, and they're typically those that were born with more "intelligence".
And by successful, I mean achieving some kind of success that somewhat matches
their parent's standard of living.

~~~
epalmer
Having been through this once and now doing it a second time as a parent the
information is available. It is not hidden. The undereducated parents are the
ones that need help. But I see well educated parents not pay attention.

My comments apply to the traditional not for profit schools. The for profit
ones are probably as you say.

~~~
dikdik
I'm one of those people with "uneducated parents" and it's true they do not
know the least about it. My father actually told every single one of his kids
not to go to college.

4/5 did (a couple have grad degress) and only 1 of those has been able to make
good on their investment (my sister who is a nurse). I love learning and I'm
glad I am educated, but I would not do this all again. Americans pride
ourselves on being a classless society, but the reality is I was born to blue
collar workers and I was meant to be a blue collar worker. The extreme attempt
at being a white collar worker has failed most in my family. All we did was
get was huge debts that have crippled every one of us through our 20's and
30's.

And then we're told to get on our hands and knees and thank our bosses for the
opportunity to never be challenged or build a career. I would rather slit my
throat than continue to be lied to about all these "opportunities" I
apparently have. I've made plans to do just that if I am going to be forced
into another bullshit job where I get to make the world worse all for the
"opportunity" to not be challenged or pay off my student loans. It sucks, but
I see more virtue in going off and dying.

~~~
runamok
You sound like you are in a very dark place. It's true student debt is
bullshit but your life is so much more important. Screw it. Leave the country
before you consider dying. So many people in your boat so hopefully things
will change. I am sorry you are going through this...

------
ntkachov
So I was one of these kids for the better part of college. The issue is that
you dont care because you don't have options. You're already in college and
stressing out about oweing $100k isn't productive. You look at your loans once
you're done with school and need to pay them back.

~~~
epalmer
We are getting ready to send our youngest off to college next fall. The three
of us (wife, myself, kid) talk about it, work the math and calculate repayment
amounts and length in years together. It is the only way to do this. My
daughter wants to understand the finances and we want her to. She also will
have to agree in advance when it is time for the final selection of school and
loans that the balance is doable. Much coaching along the way. I have an
Engineering and Chemistry Degree and wife is an accountant.

The good news is she will be majoring in Mechanical Engineering with a
concentration in CS and EE. Still we want student loan amounts to be
reasonable.

Met a young person recently that got a sociology degree and had >$100K US in
loans. She is making like $30,000. This is totally absurd.

~~~
washadjeffmad
Housing is killer. On-campus was over $600/mo, higher than median apartment
rent, and they shared with 3 other students. There's no reason student housing
should be half or more the expense of attendance over the same period.

~~~
gherkin0
> Housing is killer. On-campus was over $600/mo, higher than median apartment
> rent, and they shared with 3 other students.

That's insane. The whole point of on-campus housing is to provide very cheap
but spartan accommodations. If nearby apartments are cheaper, there's no point
to it.

~~~
nilkn
This has long ceased to be true at many American universities. The dorms
command a premium because they're on-campus (short walk to class and dining
halls, many of which are right in the dorms) and they foster an integrated
social environment that you can't fully appreciate when living off-campus
typically.

Dorms are also becoming increasingly luxurious in some cases. In my old
college suite, we had maids come by every morning to take out our trash and
recycling and every weekend they'd thoroughly clean the entire bathroom,
shower, sinks, and toilet. Just to be clear, these were private bathrooms in
individual suites that they'd clean, not just the shared communal bathrooms.

------
gghh
I am from Europe, where higher education is inexpensive, and have very little
understanding on the implication of such loans in someone's life.

But now this thought occurred to me: how can a 20-something person go out and
start a company (as I often read on stories here on HN), leaving on zero or
little income for a while (until you find investors, I guess), when I'd expect
people to need a steady income to at least go even with the monthly loan
payments?

~~~
edgyswingset
> how can a 20-something person go out and start a company

Short answer: they never had personal financial hardship to begin with.

There's always exceptions, but the most frequent trait among young startup
founders is that they have a great financial situation with their family and
can always fall back on that if they fail.

~~~
Lewisham
This is the rub that I never understand with right-wing politicians who prize
the free market, but then enable things that actively hamper it: tying health
care to having a job, tying startups to people who could somehow afford
college or just didn't go.

If you want to enable the free market, you have to remove the barriers.

~~~
humanrebar
> tying health care to having a job

Since when is that a right-wing thing? Employer-provided healthcare started as
a result of (left-wing) price controls. And Obama and a Democratic congress
purposely avoided that issue when they "reformed" healthcare.

~~~
secstate
Now hold the phone. Obama and a Democratic congress avoided that issue because
it would have had ZERO traction with some huge campaign donors. That's still a
mark against the administration, but it's also the reality of a government
ruled first and foremost by capitalist lobbies and greed.

Second, left-wing price controls did not start the current healthcare model,
empty hospitals beds, profit-based medicine, the great depression and WWII
created employer-based healthcare [0].

[http://www.npr.org/templates/story/story.php?storyId=1140451...](http://www.npr.org/templates/story/story.php?storyId=114045132)

~~~
humanrebar
> Obama and a Democratic congress avoided that issue because it would have had
> ZERO traction with some huge campaign donors.

You described special interests, not right-wing capitalists. Special interests
including people who would be confused then upset about losing their employer-
provided healthcare.

> left-wing price controls did not start the current healthcare model

Sure it did, at least as the employer involvement is concerned. FDR froze
wages, so employers provided other benefits, like company cars and free
healthcare.

I'm not saying there's a clean way to get there (keeping employers and
healthcare separate) from here (the current mess). But it's _not_ a right-wing
conspiracy or something.

~~~
secstate
No, but nor was it a left-wing conspiracy either. People in the US like to
throw mud at each other about whose to blame for this shitty situation, but
we're all in this together.

Also, I fail to see the difference between special interests and capitalists.
They may not be right-wing capitalists, but the folks who run Blue Cross,
Anthem and Harvard Pilgrim sure as hell didn't want a public option anywhere
close to the finished ADA legislation, and they paid big money to make sure
that happened.

But either way, something has to give, because health insurance and for-profit
corporations are an oxymoron. When you're for-profit and offer insurance, that
makes your primary operating procedure to charge as much as you can for the
least amount of service.

------
joshstrange
I hate myself for not knowing anything about them but it wasn't until I was
out of college that it even dawned on me I would have to pay for them at all.
I honestly thought my parents had that handled and the true cost of college
was never made apparent to me. I take full responsibility for this but I
really wish this had been made more clear to me. Not just this but also
finances, loans, CC's, taxes, etc in general. The extent of the advice I was
given from my parents was "Don't spend money you don't have" (subtext being:
unless it's for student loans). Past that I didn't even understand how taxes
really worked (Again, I take FULL responsibility) and racked up about $15K in
taxes while working as a contractor. I had been working since I was 14 but
part of that time I was working for my family and the other I was W2'd so I
was paying taxes as I went.

------
SimpleXYZ
A lot of people seem to assume you get handed a 18 point font piece of paper
that says, "You agree to borrow $70,000 for a student loan." Mine was hundreds
of pages of legalese and I didn't even know what the total of my 11 loans were
until I graduated and consolidated.

~~~
patio11
Your impression of the documents you were asked to sign does not comport with
my recollection of the contracts I was presented with. As federal loans are a
fairly standardized product, you can trivially find their contracts online.

Here's one of the examples for Sallie Mae:

[http://www.studentlendinganalytics.com/images/Sallie_Mae_Pro...](http://www.studentlendinganalytics.com/images/Sallie_Mae_Prom_Note_0409.pdf)

This document, in style and length, comports with my recollection of what I
signed ~15 years ago.

8 pages; approximately the length of an apartment lease. The language should
not tax the reading comprehension abilities of a college student.

Representative sample:

Interest on this note will accrue at the Variable Rate (as defined below),
beginning on the first Disbursement Date, on the principal balance advanced
and on the Capitalized Interest, Fees, and Other Amounts, until the principal
balance and all interest are paid in full. The Variable Rate will be used to
calculate interest during the entire term of this Note, and following the
maturity of, or any default under, this Note; there is no initially
discounted, premium, or other rate that will be used to calculate interest
under this Note.

~~~
kefka
Better question:

Why are Federally subsidized educational loans at 8% interest, whilst the Big
Banks get their money at 0%, or thereabouts?

One invests in the future, while the other breaks it. You can probably guess
which does which.

~~~
patejam
Because college students are a much higher risk. You can argue that 8% is too
high, but you can't argue that college students are more likely to pay back
loans than big banks.

~~~
markwaldron
Students aren't allowed to declare bankruptcy on their loans now, and if they
stop paying their wages will be garnished. I think we those types of
conditions the interest rate could be lowered a bit.

~~~
nieksand
The bankruptcy prohibition is why you even see loans in the single digits.

You have a typical 18 year old with zero credit history and zero real income.
You have a loan that may take many years to repay, but unlike a mortgage there
is no house to repossess if the loan goes bad. You can't repo a degree.

A good exercise is to imagine that you're a lender writing checks with your
own money. Would you even make loans to somebody majoring outside of STEM?
What interest would you charge especially given other options for investing
your capital? How would you have to adjust your interest rates if students
were allowed to declare bankruptcy to discharge their debt to you?

~~~
dragonwriter
> The bankruptcy prohibition is why you even see loans in the single digits.

No, the reason you see loans in the single digits is because the government is
both the sole lender (since the Health Care and Education Reconciliation Act
of 2010) and sets the rates by law.

What private lenders would accept was only relevant when there were private
lenders.

~~~
harryh
There are numerous private lenders that offer student loans. A google search
will easily lead you to dozens of them.

~~~
dragonwriter
> There are numerous private lenders that offer student loans.

Not federally subsidized ones; the program under which such loans were offered
through private lenders in addition to directly by the government was
discontinued several years ago (as noted in the grandparent comment.) The
upthread comment was about interest rates on _federally subsidized_ loans.

~~~
harryh
OK yes. That's correct. I think perhaps it's easy to read your comment and
think that there aren't private lenders at all anymore. I just wanted to point
out that this is not the case.

You're correct that private student loan lending is no longer subsidized and
hence the rates tend to be higher.

------
hnamazon123
The real absurdity here is that we can have a discussion about student loans
and not discuss the fact that non-STEM degrees offer, in nearly all cases, a
poor ROI.

This completely boggles my mind. It's insanity.

~~~
blktiger
It seems like the general advice for many years has been to just get _any_
college degree. If you have a college degree you are supposed to be able to
get a good job. I think the main problem with that advice is that it was good
advice when a college degree was relatively rare. These days, everyone is
expected to get a college degree so the degree itself becomes worthless.
Instead students should focus on acquiring some kind of skill in their post-
secondary education. For example, a history degree doesn't actually give you
any useful skills while a computer science degree gives you skill in writing
software which is a high-demand job right now. Actually, many students who get
a college degree would be better off going to a vocational school to learn
welding or some other skill. They'd probably actually earn _more_ money than
whatever job they can get with a generic 4-year degree.

~~~
hnamazon123
I got that advice all my life and it never made sense to me.

You have to demonstrate value to employers; to anyone with whome you desire to
exchange goods or services for money.

Simply having a college degree is a very weak signal for value.

~~~
dalke
I believe blktiger's point is that it _was_ a good signal for value but is no
longer.

I'll guess that most of the people who gave you that advice probably learned
it some 30-40 years ago, when it was more applicable.

------
kardashev
Though I can't recommend it, there would actually be better outcomes if we
banned loans for college. Flooding the higher education market with cash has
made it less affordable not more. Having people be responsible for the cost up
front would make them better shoppers and the colleges more lean. Prices would
come back down to reasonable levels.

~~~
jonlucc
The downside, of course, is that people who are from poor families never get
to attend college. This perpetuates poverty in certain
families/neighborhoods/regions and discourages diversity of opinion in
universities and the workplace.

~~~
kardashev
Actually (counter-intuitively) college would be _more_ affordable for middle
class and the poor in a situation where there are no loans. Consider, there
are only a tiny amount of rich people and there are many, many colleges. If
there were no loans, colleges would have to make themselves affordable enough
to get any enrollment. A large portion of tuition increases have come from
bloated administration and useless degree programs. Those would disappear if
people weren't given gobs of money in loans.

~~~
jonlucc
Sure the price will come way down, but it will still be out of reach for the
people who are most likely to perpetuate poverty in their families. Surely the
price would not drop below the annual difference in median incomes between
those with and without degrees. If I'm going to make an extra $5k a year just
for having the degree, I can get my family to cover it. Poor people can't
really afford that. In fact, I'd wager there is no price at which it is viable
to run a university that doesn't make it unattainable for people with parents
living paycheck-to-paycheck.

------
giardini
Dave Ramsey has a dim opinion of college loans that should be broadcast
further than it currently reaches.

Many, if not most, college students and parents therof seem ignorant of
Ramsey's sensible recommendations. As "Lie #4 about college loans" Ramsey
declares: "I can’t afford to go to college without a student loan."

from "9 Biggest Lies About College and Student Loans":

[https://www.daveramsey.com/blog/9-lies-college-student-
loans](https://www.daveramsey.com/blog/9-lies-college-student-loans)

~~~
jonlucc
Some of this is silly.

Lie 1 is wrong. The uber rich (Gates and Ellison) are not a prescription for
how to aim your life as a young person. Also, in the 2008 recession, people
without 4-year degrees were hurt far worse and recovered slower than those
with degrees.

Lie 2 is reasonable, except in particular majors. My wife was a historic
preservation major in undergrad (I think there's less than a dozen in the
country, and one happened to be in-state but she would have gone out of state
if necessary) and her graduate program was out-of-state for Museum Studies.
There are only a handful of these programs in the country, so being out-of-
state was not a choice.

3 is also incorrect in my experience. While the employers may not care a lot
what's on your diploma, they also don't recruit evenly across universities.
Wasn't everyone complaining a while ago that Google was basically where people
went after graduating from Stanford?

4\. When I was looking at school, the scholarships on those "find scholarships
for you" sites were all under $1000. While that's not insignificant, you can't
count on getting every one you apply for, and it's not reliable for paying for
more than books. Community colleges and living with parents are underutilized,
but you eventually have to attend at least 2 years in a 4-year institution if
you want the 4-year degree.

5\. I wish this had been drilled into me

6\. Reasonable, but I don't think it is widely talked about

7\. This is complicated. I was in school during the 2008 recession, so there
was really no way to know before going in what was going to happen after
graduation. Students _do_ need to know it isn't necessarily a given, and this
was a big pitfall for me. Unfortunately, our parents' generation didn't know
about this because it is different from their experience with college.

8\. I've never heard anyone say this, but attendance levels are up in bad
years

9\. Nobody thinks they're going to need bankruptcy when they start their
college education; they're still young and bushy-tailed.

------
qntty
_Fifty-nine percent of the students surveyed said the total outstanding
student debt was in the “millions.”_

The most worrying part to me. 59% can't estimate things like this within ~two
orders of magnitude?

~~~
stygiansonic
It is definitely worrying, though perhaps not surprising.

Many people who aren't accustomed to dealing with {figures, values, numbers}
won't put much time into doing a back of the envelope calculation, and perhaps
didn't put much thought into it. My best guess is that for these folks,
"millions" or "billions" simply means "a lot, a really big number that I don't
know/can't estimate right now".

I don't know how that particular question was phrased, and whether or not you
were allowed to answer with "I don't know", or whether that option was
presented as one you could answer with.

------
FussyZeus
Speaking as a student who graduated not too long ago, here's the reality for
those who are saying "we should know better":

1) We aren't required to know shit. Pretty much anyone can get a loan for any
amount, depending on what school they're going to. I for one borrowed about
$26,000 to go to a local technical college, and that included about 2
semesters of classes in a major I ended up dropping. I was never once
questioned about how much was borrowed, or asked to demonstrate any knowledge,
just sign on this line and you get free money. How many 19 year olds wouldn't
jump at that? I'm not saying that's right, I'm pointing out the fact that if I
were going to a bank to buy a house or a car, they would demand a LOT more
(proof of income, talk me through the terms, interest, etc.) than a school
does.

2) It's basically required. At this point a high school diploma isn't getting
you shit if you aren't some startup funded golden child. Someone going out
into the market for white collar work pretty much MUST have at least a 2 year
degree, and most businesses prefer 4 year degrees. It seems wrong to me that
we're billing people for what is more or less an essential part of their
resume if they want to do something other than trade skills and that sort of
thing, and doubling down on that, it seems insane than the debt incurred is
not dischargeable in bankruptcy and can be payed back via seizure of tax
refunds and other assets.

3) Entrance counseling is a joke. Yeah I know how loans work, I get this money
now, I pay it back later. That does not cover nearly enough, and not to
mention you can breeze through it in about a half an hour and fail the tests
as many times as you want, as long as you check all the right boxes you can
get past it, get your loan and never think about any of that shit again.

I'm not in trouble personally, I make my payments and I'm up to date. It just
drives me crazy when boomers are out there saying "we started out with
nothing" and my reply to that is "I started 25k in the hole, I would've LOVED
to have started with nothing."

------
pyromine
As a few others have expressed similar, I can attest to the sentiments in the
article.

I may be one of the more informed with my loans, and this is my understanding
of the matter.

My freshmen year I incurred ~$26,000 in commercial loans, with $4500 in
federal.

This year I got a residency reassignment and now have only $5500 in federal
loans to pay for the whole year.

So I may now the approximate amounts of my loans, and I just summed them and
found out I'm about $36,000 in debt. Truthfully that's the first time I've
ever seen that figure, and damn it's scary because I have absolutely zero
knowledge of how I'm expected to repay that. What are my interest rates, how
long do I have to repay, how many months after I graduate am I expected to
start paying that down?

The issue is that due to the inflation in college costs this is the only way
many of us can afford college, and I'd have to say I'm lucky because I am
supported for my living costs by my parents. Otherwise I would be in
significantly more debt.

~~~
chiph
> What are my interest rates, how long do I have to repay, how many months
> after I graduate am I expected to start paying that down?

All that will be in the contracts you signed. It'd probably be worthwhile to
see if you can audit or sit-in on a contracts class with the business college,
as the info will be very useful in your future, like when you buy a car or a
house.

------
jm_l
Worth noting that the Brookings study says:

"We do find that students with higher expected contributions are more likely
to be unaware that they have federal debt (or any debt). This may be because
these students’ parents made the decision for them to take out loans, perhaps
with the informal understanding that the parents would later pay it back (note
that students can usually obtain loans on more favorable terms than their
parents). In some cases, the lack of knowledge about cost and debt may stem
from parents proactively managing their children’s decisions about education."

And that the first study was an informal survey conducted by LendEDU, a
company that recommends and reviews student loan refinance companies.

That said, I think confusion and misinformation about loans likely does have a
large contribution to the US student loan debt. It is unclear how
statistically founded the contribution is.

------
ssharp
I was lucky enough to not have to take out loans, but we did finance my wife's
law school education predominantly with loans.

The thing I never understood was the interest rate. It seemed like we were
locked into a 6.5% rate no matter what, but others were getting loans at
nearly half that rate. I'm not sure if this was based on need (seems like a
dumb way to set interest rates), when we first started taking the loans, or
what.

Once you graduate, you're able to refinance into a private loan, which will
get you a lower rate, but you seem pretty stuck while in school and
unsubsidized loans accrue interest while you're in school. Our loans will be
paid off in a few short months, but we have been scrimping by the past two
years in order to put as much money as possible towards the loans. I'd guess
most people don't graduate as undergrads to this type of scenario. With law
school, you're hopefully graduating into a nice paying position and are in a
better financial place to pay off the loans. I do find it a bit ridiculous
that during a period when you could finance a house at 3%, a car at 2%, and
could only get 0.5% or 1% on a savings account that the government was
collected 6.5% of student loans. Yet, they did, and lots of students are going
to be stuck paying multiples of their actual education cost as they pay
interest on those loans for 30 years.

There is a government program where if you work in the public sector for 10
years, they will forgive your law school loans. I did the math on this and it
ended up costing less money to just pay off the loans as quickly as possible
rather than pay 10 years worth of interest on them, while being indentured to
a single public-service job that likely pays less than the private sector
anyway.

~~~
ASinclair
> I do find it a bit ridiculous that during a period when you could finance a
> house at 3%, a car at 2%, and could only get 0.5% or 1% on a savings account
> that the government was collected 6.5% of student loans.

You can't repossess an education... yet.

~~~
ssharp
You can't erase student loan debt with bankruptcy either, so its not something
you can really walk away from like a car or house.

~~~
dragonwriter
> You can't erase student loan debt with bankruptcy

You _can_ , though its harder than many other categories of debt. That you
_can 't_ is a popular myth which makes the problem worse, since it discourages
people from looking into the possibility of doing so.

------
xlm1717
The way I had to take out loans when I went to college, I knew how much more
in debt I was getting every semester and the total debt. I had gone to a
public university in the US. Since I had scholarships, I had to take out
"only" $1000-$2000 in loans per semester. Every semester when disbursement
time came around, the university financial office would send me an email
informing me of all the money that was coming in from scholarships and loans,
how much of it would be applied to tuition, and the amount of the rest that
would be deposited into my account. If I recall correctly, I think they even
made me see the balance before the money would be disbursed. In this way, I
knew what my loan balance was when I graduated, and instead of panicking about
it, paid it off gradually over several years.

------
Domenic_S
Looks like Entrance Counseling [0] isn't working.

[0]
[https://studentloans.gov/myDirectLoan/whatYouNeed.action?pag...](https://studentloans.gov/myDirectLoan/whatYouNeed.action?page=counseling)

~~~
jonlucc
There are lots of reasons for this, in my experience. Firstly, entrance
counselling is provided right at the beginning. That is when students are at
peak optimism, and most unaware of the realities of living on their own, much
less understanding their debt obligations. Secondly, I think students have
already made the decision by the time it gets to entrance counselling. This
should happen before or during the acceptance process, when kids are making
the decisions about which school to attend (and how much it will cost them
immediately and in the future). Thirdly, the online system I was in lacked
specific examples and calculators to make the thing seem real. If they had
given me a sliding bar to play with and see what my monthly payments would be,
it might have made a big difference. Maybe not, though, because I didn't
really know what to expect to pay in rent or mortgage either.

------
skewart
"The survey, conducted in January by Lendedu, a company that provides
information about loan refinancing options..."

Let's not forget that the company running the survey has skin in the game.
It's not at all clear exactly how they categorized different answers. I have
student loans. I can tell you a ballpark number for how much I currently owe,
but I couldn't tell you precicely down to the cent off the top of my head
(they get auto-payed every month and I don't really think about it). If I were
a student would I be categorized by this survey as not knowing how much I owe?

------
IvyMike
I didn't know anything about my loans, and only had a ballpark knowledge of
the cost of college. And it was fine--I paid off my loans after graduation
relatively quickly and with little fuss.

Of course this was because I went to college 24 years ago (dear god I'm
getting old). College was far more affordable, and the loan conditions were
more humane.

The landscape has changed dramatically. At least part of the problem is
parents in my age group not realizing that their children's loans are far more
onerous than their own loans were, and failing to give them adequate scrutiny.

------
kmkemp
You can say that students should know to read paperwork by the time they're
entering college and that's fine, but the problem is that (for most) their
only avenue towards high earnings is a degree and the only avenue to a degree
are loans. Combine that with someone around age 18 who has never had
significant income doesn't realize just how big those numbers are and how
they'll impact them in the future. We badly need to reign in public college
costs and offer student loans at lower rates.

------
satyajeet23
Not their fault! "Education System" \- They don't know how mortgage or taxes
work but hey atleast they know about the cells inside a fucking leaf!

~~~
TallGuyShort
If you're old enough to go to college you should know you should read papers
before you sign them. Not an excuse, even if public schools didn't teach how
compound interest worked, which they do.

~~~
FLUX-YOU
There should be counselors for this sort of thing too. However, I can't fault
an 18-20 year old for not really having any sense of scale about how much
>$50k is, even if they understand the paperwork clearly. They likely haven't
slogged through years of work in a job they hate just to make ends meet. Any
experience up to that point is likely with little bills and a low paying job.
Even if these loans were made interest free, the principal getting that high
in the first place is the larger issue. This is when the decision gets to the
parents, and the drum beat for as long as I've been alive has been "go to
college to get a good job!", conveniently ignoring the trade schools and other
opportunities.

It seems difficult to teach the hard lessons and experience of personal
finance without them actually being hard lessons. Unless something else is
driving everyone to accept student loans.

------
kefka
My wife was subject to very confusing papers that resulted in a federal loan
many years ago. To her (she is dyslexic), it appeared to be a scholarship or a
grant.

    
    
        1. She has no degree, yet owes money.
        2. Cannot get a better job to pay off said loan.
        3. Cannot get official transcript for classes she **has** paid for, because school blocks it.
    

Ok, so it's a perfect storm that she can never get out of, due to predatory
interest (yes ~8% on a federal loan when banks get 0% IS predatory) and 'fines
and fees' that exponentially compound.

Worse yet, taxes and wages are garnished. Yet any calls to find how they are
taken from the bill falls on deaf ears. Tax return payments alone have at
least counted up to $15k... yet Navient cannot answer for it. Nor can anyone
else.

So, how do you dig out of this situation? Well, she won't take the solution I
recommend: Lie about a degree. But we're looking at this haunting our
retirement. But one thing is for sure: we are in it together.

I know this isn't some sort of isolated situation. I can see variants of this
being played out time and again; I can only wonder how the fallout of this
will affect the people.

~~~
protomyth
Out of curiosity, have you talked to a lawyer, particularly one who does ADA
work? I'm not a fan of how some of them operate, but it might be a good talk
in your situation.

~~~
kefka
No, we haven't. She hasn't been in a good enough financial position to
properly address it, with legal retainer fees and all. She's also undiagnosed
with dyslexia, but we're working on that diagnosis (thanks to the PPACA for
our insurance).

I wasn't sure what kind of representation was needed, but you recommend an
attorney with ADA experience?

~~~
protomyth
IANAL, but it would be logical, or go see a lawyer of decent reputation that
does free consultations. That would point you in the right direction. Your
case really sounds like you need to talk to an actual lawyer and not try to
deal with it yourself.

------
solipsism
Perhaps the amount of money you're allowed to borrow should be proportional to
one's age (starting at 18). The fact that a 17 year old can sign a promissory
note for many thousands of dollars just doesn't make sense to me (ignoring the
fact that 17 year olds can't sign most other kinds of contracts).

Some of us were extremely knowledgable about the world at that age, but most
of us had no idea how anything worked. We had no experience, and our parents
didn't do us the service of teaching us. For many of us our maturity level
wasn't enough that we _could_ be taught what we were doing. At that age our
biology makes us reckless.

So why should it good for society to allow this? Putting aside the ideas of
free/subsidized tuition (not because they don't deserve consideration),
perhaps this is too young an age for people to be choosing their life's
vocation, much less signing away their financial future. More and more I think
we should focus on getting young people out into the world into a variety of
jobs and apprenticeships and internships and community service.

------
protomyth
In Fall of 1988, I was handed a sheet with my first loan that said how many $
per month the loan payments would be starting 6 months after I graduated and
lasting for 10 (15?) years. I take it that's unusual and new students don't
get that information?

~~~
jonlucc
I heard a news story last fall that said they're doing this at Indiana
University, but I went to a different university starting in 2006 and didn't
receive anything like that. The story made it seem like a novel and nearly
genius approach to making students aware of what they're getting into. It's
interesting that it was around in '88, then disappeared, then the economy
crashed, and it's coming back.

~~~
protomyth
Well, Bank of North Dakota is actually pretty good at what they do, so maybe
it was just them.

------
nickthemagicman
Make public higher education Nationalized like every other 1st world country
and the problem would be moot.

------
hiram112
In my mid 30's and that's the common theme in my very highly educated city.
The average home has been re-pumped up to over $500K, high property taxes,
etc.

Unless you're in the top 10% of wage earners, you'll need two incomes. Day
care costs would eat a lot of the second income anyway. The college loans
still exist as many here have masters and PHDs. Singles at 35+ live with
roommates as if they were in their early 20's.

Wonder why Donald Trump has risen so high so fast?

Lots of hispanic women with 2 or 3 little kids in tow, another on the way.
Guess who gets to pay for them?

~~~
derivagral
What do you mean by your comment about hispanic women?

~~~
brianlweiner
Lower classes like to imagine a large amount of public spending goes towards
welfare for "foreigners and their anchor babies".

~~~
hiram112
SJWs like to imagine that massive immigration of non-educated foreigners
creates jobs and raises wages cause they believed the studies pumped out by
the Heritage Foundation and Chamber of Commerce.

Anyone who points out the actual economics of this, in a society where there
are MORE people now than available jobs, is labeled xenophobic, racist, and
now, it appears, 'low class'.

------
sly_foxx
'STUDENTS' \- this word is the problem. Students are those studying to become
engineers/surgeons[producers] and those studying
sociology/gender_studies[parasites].

That's why so many people in humanities departments are liberals/communists.
How else is a sociology student going to get a smartphone? They have to tax
producers, take their money by getting a fake job in some non-
profit/government agency/college and receive a salary there[taken from tax
dollars].

The word 'student' makes it seem like we're all in this together, but we
aren't. Parasites are eating us alive.

~~~
hiram112
I agree with the sentiment 100%, however there is reasonably only so many
producers our society needs. We could give the non-producers a basic income.
If it's disparate, you end up with class warfare. If there is not a large
disparity, the producers stop producing since they can get the same outcome by
sitting on their ass. Not sure what the solution is.

~~~
sly_foxx
There is a solution and it's very simple:

\- Kill the parasites.

Producers are taxed at nearly 50% rate[income + sales tax + property + wage +
others] on what they make. If we kill off the parasites, then we would have to
work almost 50% less to have the same standard of living as we have now.
Imagine: 20 hours/week. You could work 2-3 days and then enjoy the rest. Or 1
person could work and the other one would stay at home and take care of their
children.

It makes sense to reward people you love and who are productive. But, these
are parasites and the correct course of action is to, not reward them with
cash and goods we producers make, but to kill them and enjoy our lives.

Don't you agree?

~~~
dang
We've banned this account for repeatedly breaking the site guidelines.

------
eblah
Instead of pushing students to loans, why not show them the value of hard work
thru college? People make out like it's an impossibility, but it isn't. It
isn't fun, and you might not get the 4.0 average you'd want, but it is
possible because I've done it. I didn't have a fancy car or a great high
paying job. I also didn't go to a well known college, but rather just a
smaller college locally.

What we really should be doing is showing students that WHERE they go to
college very often doesn't matter at all after graduation, because so much is
learned on the job. What matters is the core concepts are given that lays a
great foundation for their "real" jobs later.

~~~
zyxley
"I did it in this specific area, so anybody who can't in the entire country is
just lazy" seems to be what you're implying here, and that's an incredibly
unhelpful position when dealing with tuition that in many places has inflated
well beyond what an entry-level work can hope to cover while also dealing with
room and board.

~~~
eblah
No, I'm not. I'm saying a part of maturity is paying and cash flowing things.

It might take a lot longer, and it might be a lot harder and a few less
dinners with friends, but it is very possible to cash flow college.

It's a different mindset. What most people think today is you should always
have a loan for something -- car, house, college, a little consumer debt...
but it's incredibly freeing when you don't have any of that stuff. I wasn't
given anything, but I've learned that hard work and no debt can make life so
much greater.

