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Student loans dragging down

By tovarichpeter   2012 Nov 29, 2:42am   1 link   430 views   2 comments   watch (0)   quote      

http://www.bloomberg.com/news/2012-11-29/student-loans-go-unpaid-burden-u-s-economy-chart-of-the-day.html

Borrowing for education will have potentially lasting effects on U.S. demand for houses, cars and other big-ticket items, according to Steven C. Wieting, Citigroup Inc.s director of economic and market analysis. As the CHART OF THE DAY depicts, student loans surpassed credit cards last quarter to show the highest delinquency rate among U.S. consumer debt. The shift was chronicled in a report published two days ago by the Federal Reserve Bank of New York. Student-loan debt crowds out other consumption, Wieting wrote yesterday in a report. The New York-based economist cited a Rutgers University study, done in May, that showed...

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1   Nobody     2012 Nov 29, 8:39am  ↑ like   ↓ dislike   quote    

OK, didn't you realize already that education is only for the rich and the privileged? If you can't afford it, you should just graduated from regular high school and become a slave for the rich? Even with the college education, the end result is the most likely the same any way.

Oh, and if you think the college education is going to be affordable? Think again. We need to squeeze more return on my investment, so we will charge you more for the education. Too bad, you can't declare bankruptcy on your student loan. It is guaranteed. If you refuse to work as a slave to pay back, we will put you in jail. You think the slavery is abolished? Think again.

2   drew_eckhardt     2012 Nov 29, 8:58am  ↑ like   ↓ dislike   quote    

Nobody says

OK, didn't you realize already that education is only for the rich and the privileged?

Nope. Out of state schools in fun places, private schools, and for-profit institutions are only for the rich.

The rest of us still have state schools and local community colleges.

As of last spring Front Range Community College ran $105/credit hour for Colorado residents or about $3150 a year plus a few hundred in fees.

CU Boulder was charging $11,000 a year with fees.

A Colorado resident could get core classes out of of the way at FRCC and graduate with a BS degree from CU for $28,300 plus the FRCCfew fees that might round to a $30K total which is readily covered by current federal loan programs that cover about $9K/year.

If you can't afford it, you should just graduated from regular high school and become a slave for the rich? Even with the college education, the end result is the most likely the same any way.

It depends what you study. New computer science graduates have starting compensation packages of $100K at the big Silicon valley companies. A degree in underwater basket weaving doesn't open so many doors.

That said making student loans forgivable in bankruptcy just like other unsecured debt would remove the profit from making loans that students can't afford to repay and $200K loans for photography degrees would disappear.

Government loans could require a sufficiently good academic credit rating (predicated on grades, standardized tests, performance at community college, etc) like government home loans. They could impose similar front and back-end debt load ratios, where income could be assumed to be what the 25% percentile of graduates from the same school/degree program earn three years after matriculation.

Without the free money to support high prices (which have gone up at 2.5X the rate of inflation since 1985) costs would need to drop.

This probably won't happen because children don't have PACs like the banks and commercial schools which would profit less.

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