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Robert Winner

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College Debt in the US

The national average for a recent graduate is $27,000 however, if you add all the college, finicial institution, federal, state, and local government loans it is $47,000.

The outstanding Federal Educational Loan debit is 956 Billion. (US)

This shoud not become a debate on if education should be free ... its not.

The debate at hand is that professionals in high places and making big bucks still owe money to many places for their education ...

These people are employed by the military, government, industry, etc ... what is the best means of recovering these lost loans.

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  • Dec 28 2012: You can't get rid of student loans by declaring bankruptcy and the loans will follow you to your grave.
    What else do you want?
    Rather than make education free, the question is why is it being extended to so many people. That was not the original intent of a university education and really does not provide value for the money spent.
    Observing the predatory house loans, student loans and the general bad behaviour of wall street, maybe the motto of the US should be changed to "never give a sucker an even break"
    • Dec 28 2012: "You can't get rid of student loans by declaring bankruptcy and the loans will follow you to your grave.
      What else do you want?"

      That's right: 100% of what people can pay is already being recovered, there are no ways to recover more. However there are ways of reducing the burden: people need to understand that just getting any degree isn't automatically going to get you a good job like it used to, so they can avoid paying $100.000 for a useless art degree and if European universities can pull off running their teaching business off of $10.000 or less per student per year then so should American universities.

      I mean seriously, in 2010, the CEOs of American for profit colleges alone raked in $2bn, that's $100 per college student in the US that year. One of these CEO, Robert Silbermann received a whopping $42 million in 2010, or roughly $780 from each of the 54.000 students enrolled at his institutions. Just bringing his pay down to $2 million per year (still more than the president of Harvard gets, even when corrected for student numbers, and also more than president Obama or any other world leader gets) would cut tuition by $740 per year per student and in doing so cut $3.000-4.000 from their student debt! But hey, his students get $3.000-4.000 more value than they would get at Harvard, right?
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        Dec 29 2012: I think the for profits should be exempt from student loans. They should have thier own financing and recover their profit themselves instead of having the feds try and recoup the loans. They might be a little more selective on who they let in.
        Federal and state funded schools should be the ones that have access to federal student loans. Non-profit private schools should have access to some federal student loans but not have the entire education funded by loans.
      • Dec 29 2012: I've read somewhere that over 80% of university students in the US go to private institutions.
        When I went to University, you didn't expect to come out an expert in anything, but you learned how to learn and that got you into your first job and along the way.
        I am not sure that is still the case (I think it is not) and the old way of using Universities to find higher quality staff has past its best before date. The universities are no longer as relavent as they once were, however they still are trudging on as deploma mills, now moving into the online world.
        Your mention of salaries is interesting.....I have long believed that the US in particular but western culture in general believes that you must pay top dollar to get top people.
        This is wrong. You want people good at what they do and who like what they do. You pay them enough that they don't want to go elsewhere but not much more than the average employee.
        No one person is worth a million much less multiple millions.
        • Dec 29 2012: "I am not sure that is still the case (I think it is not) and the old way of using Universities to find higher quality staff has past its best before date."

          It definitely is: the situation in the Western world used to be such that there was a sudden increase demand for white collar workers while only a small percentage of the population had a college education, the result was that even a degree in art history would land you some comfortable desk job. Times have changed a lot, office work you could do with an art degree has been outsources/automated and now half of high school graduates go to college. True, there has been a rise in demand for skilled labor and specialist college graduates (like scientists and engineers), but those fields are not very popular among high school graduates.

          "No one person is worth a million much less multiple millions."

          Exactly: some faceless 9-to-5 executive running a handful of small colleges cannot possibly justify making many times more than all the G20 leaders combined. I'm always amazed when people think executives are actually worth the amount they're being paid when even the shareholders know it's not true: http://en.wikipedia.org/wiki/Tournament_theory
  • Dec 30 2012: Garnishment of wages for money made above current poverty level should be an expectation for college students beyond a reasonable payback period.

    The risk of non-repayment of loans in degrees that have limited market potential should be figured into the equation.

    State supported schools should be held accountable seeing that the percentage of in-state students admitted is equal to or exceeds the state identified number. In my state, there were several thousand out of state students admitted the year my daughter applied. Schools make more money on these students.

    Perhaps it is time to extend length of education experience and add a required internship in government or industry, which culminates in a job offer. This fosters mature workers exiting the education experience.

    Perhaps greater attention needs to be given to paths for success in trades that lead to proficiency levels which permit a life style that includes food, shelter, clothing, healthcare, the chance for continued professional growth.

    Education should not be free, but neither should a student be permitted to emerge at the end of a 4 year experience over 100K in debt and with no job. This risk should be managed by the school loan office.

    Families willing to risk personal money on a child's education should be permitted to do so.

    There are other maturity lessons being learned at college that should be understood and facilitated by a robust education experience, and not just a GPA competition.

    Academic performance is influenced by intelligence and work ethic. Many get by just on intelligence for a long period, then are crushed by something that demands a competitive work ethic. A GPA does not necessarily measure this trait. Somehow, our education system needs to recognize, foster, and reward superior work ethic in students, as well as getting a right answer.
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    Dec 29 2012: "You can't get blood from a rock."
    We are quickly approaching a point where a college education is required to do menial, task oriented jobs. Many graduates find themselves unmarketable because their field is saturated or they simply picked a field that is not in demand. So these graduates are now looking for jobs and ending up working in places like fast food and temp agencies. They are answering phones with a BS because the employer can require a BS to answer phones for $8/hr.

    The other frightening move I see is that many companies are leveraging temp agencies. Especially small business. They do not have to pay any benefits that way. They may have a few full time jobs and workers need to compete for those sometimes for years at minimum wage.

    So college grads are now working for minimum wage, which we all know cannot sustain an independent lifestyle, and they are moving back with their parents. They simply are not making enough to pay their loan. They either move back, or go on to grad school and amass more debt.

    Students are starting to sue colleges because of this. They spend several thousand dollars on an education and cannot find a job. They are starting to sue the colleges for the amount of their student loans.

    Should be an interesting year.
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      Dec 29 2012: The sure fire cure it to get government the F out of it, that is ALL that is wrong.
      • Jan 1 2013: I must agree.

        Many years ago, I thought student loans were one of the best uses of government funds, but time has shown this approach to be a complete failure. Let the loaners decide which students are good investments, with their own money. The current system is bad for banks, bad for students, bad for taxpayers, and good only for the unethical bloodsuckers.
    • Dec 29 2012: "So these graduates are now looking for jobs and ending up working in places like fast food and temp agencies. They are answering phones with a BS because the employer can require a BS to answer phones for $8/hr."

      It's a classical case of the prisoner dilemma: the smart thing to do would be for all young people who would be going to college in fields with bad prospects to come together and collectively decide not to go to college, yes that would mean you're still answering phones at the end of the day, but at least you wouldn't have student and you would have several more years in your life with an income. But this is very hard to do so in the end people get locked up in a rat race where a college degree becomes required to answer phones and parents and the media are telling their children that they must be going to college because otherwise they won't be chosen for the phone answering jobs. It's really sad and it fuels economic inequality.

      "The other frightening move I see is that many companies are leveraging temp agencies. Especially small business. They do not have to pay any benefits that way. They may have a few full time jobs and workers need to compete for those sometimes for years at minimum wage."

      I believe the core of this problem is that growing income inequality coupled with automation and outsourcing is outpacing the aging of society so that there just really aren't enough jobs for young people. This can partly be solved by making more young people go into skilled labor (including nursing) and engineering and science, but ultimately some kind of international cooperation is required to fully solve the problem and it would include shortening the workweek in many countries at once.
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      Dec 29 2012: Linda, I see no easy answer for either corporate greed or government/union stupidity. Corporations are fighting for their existance because of Cap and Trade Laws, Obamacare, and government intervention in policies, directives, and taxes. I agree that corporate greed is no bargin but at the current rate they will all pack up and move out of country .... then what. In some countries the rich are being taxed up to 75% in the US they want 39% ... at what point will these people say enough and leave and take their money with them. We continue along the very path that took Argentinia down .... will we learn. Not so far.

      Students continue to select areas that are not employable and colleges continue to take their money. At some point I think it is the students responsibility to investigate their own future.

      Thanks for the reply.

      Bob.
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    Dec 29 2012: It is another bubble caused by government tinkering. It will burst, my guess would be through technology. I thought they were cracking down on the debtors?
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      Dec 29 2012: They may be however, I saw no evidence of an crack down while I was in the military. There were many high ranking officers that said they were not paying it voluntaraly since there is no consequence.

      That appears to be a answer to many questions .... There is no direct consequence. If jail was in their future they would pay.

      I am no super sluth but given a debit list and access to the Army. Air Force, Navy, etc ... officer roles I could locate hundreds of debiters a day manually. Given a computer program thousands a day. This another example of government inefficiency is action.

      Serve them a warrent the same as a parent not making child payments and much of this crap would cease. Pay up or go to federal prison. As it is .... just another free ride.
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        Dec 29 2012: Is this the current situation?

        In the scheme things, I'm afraid the country won't exist before this subject makes much of a difference. But of course you are right it is BS.
    • Dec 29 2012: For once you are right that the government has a lot to do with it: removing government loans and grants would certainly solve the problem. But it would be like solving your ingrown toenail problem by chopping off your foot. So if you don't want to create a bigger problem (higher education becoming totally unaffordable to 90% of families, destroying any notion of social mobility) you might want to take a look over the border: Dutch colleges can qualitatively measure up to American ones and they work with a budget of only $10k per student per year. The government simply doesn't give them more.

      This is all fuel for a generational conflict: seniors like you who have already taken advantage of the system, don't really see the problem in denying future generations their income mobility, younger generations don't really see the problem in taking away your scoot mobiles and tripple bypass surgeries.
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    Dec 29 2012: I know that you said that this conversation is not about whether or not education should be free, but it's hard to answer your question without pointing something out.

    I find it rather offensive that if I know something that will make your life better, I will only tell it to you if you pay me money. The more money you give me, the more I will tell you.

    The entire fiscal paradigm is terribly flawed, and it is held up by our educational paradigm that was created to support big businesses as a subsidy.

    As to recovering the loans, you can't declare bankruptcy on them. They follow you to your grave. Your wages can be garnished, and old-age social security is garnished to pay off these loans as well as back taxes. So I'm not sure what you are talking about.
  • Dec 29 2012: This is becoming a horror show.