WatchDo we really value house more than education? From UC email:
Student Loan Debt is now the highest Debt in America.... higher than credit card debt. It is the only debt that is not forgivable by declaring bankruptcy.
If Congress does not act by June, the student loan interest rate is set to double from 3% to 6%."
I believe they are talking about gov. subsidized loans 3.4%, (max $7,500 per year for undergraduates), actually rates for students loans are more in par with unsecured credit cards.
Anyway, while 30 year fixed loan is about 4%, and for 15 year even less, students loans are more expensive. Generally speaking, buying a house became more affordable (in most areas we see 2005-2006 prices), while in the same timeframe college tuitions and fees skyrocketed and nearly unaffordable. Moreover, in most states you can just walk away from your house, student debt is not forgivable, you just cant walk away from it.
Its looks like younger generation will not be able to afford a house in near future: graduated students will be loaded with a huge debts, and thus can not be able to afford the house, and those who can't afford the college, will no be able afford a house either. So, for those who believes that we will see 1996 prices in housing market, may be right. Who will buy houses from those who are buying now?
http://economix.blogs.nytimes.com/2012/03/02/why-tuition-has-skyrocketed-at-state-schools/
A stockbroker, cold calling about a penny stock, found a taker. “This one is really going to move,” the broker said. “It’s only a $1 a share.” “Buy me 1000 shares,” said the client.
The following day, the stock was at $2. Seeing this, the client called the broker and told him to buy him 5000 more shares.
The next day the client checked in the newspaper and the stock was now at $4. Running to the phone, he called the broker and told him to get him 10,000 more shares.
Checking the paper the following day the client now saw that the stock was at $9. Thinking what a great profit he had made in just a few days, the client raced to the phone and called the broker. “Sell all my shares,” he instructed.
“To whom?” the broker replied. “You were the only one buying that stock!”
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Dublin, CA
The jobs that used to be done by those without much education have been outsourced or automated. Now, there's definite belief out there that if one does not go to college, they will live in poverty. Thus, students indebt themselves with loans. The availability of loans ensures that tuitions rates rise astronomically. The cuts in state budgets also contributes significantly to tuition hikes. It is a race down the circular drain. We might be better off with a modest tax hike and moving towards some sort of system where government pays for cost of college.
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Santa Clara, CA
dublin hillz says
True, but not only those jobs are being outsourced.
dublin hillz says
Maybe not all in poverty, but those with degree doing in general better.
dublin hillz says
True.
dublin hillz says
Some European countries have that system in place and do well.
List of some countries with free post-secondary education:
http://en.wikipedia.org/wiki/Free_education
Brazil
Belgium
China
Denmark
Finland
France
Greece
Germany
Hungary
Japan
Malta
Norway
Russia
Scotland
Slovakia
Sweden
Turkey
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zhanka says
I wonder why we have so many foreign exchange students from these countries if their education is free in their home country?
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BoomAndBustCycle says
so they can find an american to marry and live here.
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1,003 threads
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San Antonio, TX
jvolstad's website
College loan repayment program and more.
http://www.goarmy.com/benefits/education-benefits/money-for-college.html
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Santa Clara, CA
BoomAndBustCycle says
In most cases the for the same reason why local universities advertise Study abroad program, my kid want to spent her last year in United Kingdom or Sweden, it will cost her (us) almost the same as here plus travel expenses.
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506 comments
Los Angeles, CA
dublin hillz says
A lot of money is already doled out as grants and low interest subsidized loans by the gov't, so they are already in effect paying for a lot of the cost of college. And already from our tax dollars, at that.
The education bubble is a classic reiteration of the housing bubble: free/fake money chasing prices up. These programs benefit the schools by propping up tuitions. Just like health care; w/out insurance, nobody can afford medical care; and w/out insurance, the medical industry wouldn't be able to bill $2000 for an ambulance ride and $300 for an ordinary doctor visit.
Housing, education, healthcare--all supported by self-feeding loops that ultimately only benefit industry and marginalize human needs.
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That list is wrong.
China is not free.
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19 threads
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Los Angeles, CA
No country has free anything, someone is paying for it (taxpayers).
Anyway its best to focus on the cheap awsome things the govt/insurance companies DOESNT subsidize (yet) such are beer, pr0n, and TV/Movies/Entertainments, plastic surgery. That shit is cheap!
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There are tons of student abusing student loans...I know so many students with $100-150,000 in debt for just a bachelors degree..how did they get in so much debt? I will tell you:
- went to expensive colleges to begin with for worthless degrees (music, philosophy, social work....)
- lived in the expensive part of town because they wanted to be near the university
- Did not work or worked very little to reduce dependence on student loans, instead used time to party it up
- went on super expensive study abroad programs (aka vacations disguised as studies) to Spain, Italy etc. Study abroad is a luxury that one can afford only if one is not taking on any debt and paying 100% cash for their entire education.
- bought iPhones, iPads and what not with loan money, I know many who also attended rock concerts and charged Spring break expenses to Cabo as part of their "living expenses". Virtually all students I see have an iPhone and yet taking loans...irresponsible.
- Have a hi-fi social life eating out all the time, not only on their "living expenses" but also credit cards
and we are expected to feel sorry for these people? If you graduate with more than $25k student loans then you have not made a good financial decision and deserve to be held responsible.
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Los Angeles, CA
If they could only attend college with massive loans until they are old enoughtto get SS then they are set! Introducing The 40 Year Degree Program.
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My wish list:
Free education up to PhD
Unemployment benefits till I find a job and/or feel like working
Below $1 million, no need to pay income tax
Free healthcare and dental care
Disability benefits funded by Uncle Sam
State subsidized housing for anyone earn less than $1 million
zhanka,
The 1% and builder-turned-property renters would buy and rent the houses to those who can't afford. Please remember, if you don't buy, you've to rent or stay with your parent.
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Santa Clara, CA
My wish list:
Lets the free market work, no bailouts and Government interruption in a housing market
Affordable public secondary schools, UCs are now cost $30,000+ per year which is insane, they used to cost much less and it didn't affect the quality of education
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PockyClipsNow, that is actually a great idea...
see, instead of retiring at 65 I can retire at 50 and pretend to go to school, amass loads of student loan debts over that period to cover my "living expenses", then just shrug my shoulders at 65 and collect SS.
If I take private student loans then my SS cannot be garnished...the new American way of doing things :)
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10 threads
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San Ramon, CA
Being from Berkeley, I can easily list friends and acquaintances who are perpetual students. The excuses are myriad. I just caught up with a friend who is now 47 and just now starting seminary on the east coast after getting multiple MAs from UCB. He has been a student since he graduated from high school. That is the longest running one I know of. Usually, there is a decade gap.
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Los Angeles, CA
I know lots of people continue to take minimum classes to postpone repayment then at the end ask for 'forebearance'.
jaz5: Pretending to go to school is already common about half the students do it. Its called a humanities degree. Chicano Studies, womens studies, degree in literature, etc. I recommend Physchology as its 90% female and half are crazy(hopefully in a good way like codependent!ha)