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Old 11-14-2017, 03:47 PM   #21 (permalink)
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Part 4: Breaking kneecaps

"In an attempt to recover money on the defaulted loans, the Education Department paid more than $1.4 billion [fiscal year 2011] to collection agencies and other groups to hunt down defaulters.

One woman dropped out with $55,000 in student loans and had changed her phone number three times that year so far. Two of her tax refunds had been "seized, and other debtors have had their paychecks or Social Security payments garnisheed. Over all, the government recoups about 80 cents for every dollar that goes into default — an astounding rate, considering most lenders are lucky to recover 20 cents on the dollar on defaulted credit cards."

She attended a for-profit school and reached the point where she could not obtain more student loans.

Critics "say [their success with collections] has left the government with little incentive to try to prevent defaults in the first place."

Not enough borrowers are choosing income-based repayment, where borrowers repay with 15% of their discretionary spending for 25 years, and the rest is forgiven. Not everyone knows about it. Others simply pay nothing because it is easier. Navient tells me about this each time I visit their website. Later, the article says the repayment was reduced to 10% of discretionary spending.

I have had several people happily tell me they were on an income-based plan. They only paid $50 a month! If they pay for 25 years, they pay a mere $15,000--I have paid down more than that!

One site says the average student loan debt is $28,950. I cannot find an average interest rate, but there are many factors. I found a list of twelve of the most common rates and, without any data on how much was owed at each interest rate, I simply averaged them: 5.19%. After 25 years, their debt would be $71,676.88, but forgiven. If they paid $165.87 a month, which is substantially more, but still possibly less than their cable bill, they would pay it off in 25 years, including $8,625 in interest.

Student loan contracts are the most sought-after for collections agencies.

“If [one] vendor […] has not found a borrower in six months, the department turns the case over to another collection agency.”

Jill Shockley is 36 dropped out of nursing school with over $50,000 in student loans, some of which are in default. Her loan servicer asked her to come up with $600 a month to keep three of her federal loans from going into default. “I have rent, a car payment, [and] insurance”

According to Edmunds.com, the average monthly payment on a new vehicle is $483. If your existing car is trouble-free, that is a potential annual savings of $5,796 by postponing the purchase of a new vehicle. https://www.edmunds.com/car-news/ave...tudy-says.html

Insurance on a new car might be $117 more than on a used car.

Back to the New York Times article, “Guarantee agencies […] get paid much higher fees for collecting or rehabilitating a defaulted loan.”


Once a Student, Now Dogged by Collection Agencies - NYTimes.com

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I hate to say it, but slots in degree programs should be limited to the number of jobs available. I will be using the second degree to pay off the student loans from the first for some years to come.
What about requiring liberal arts majors to have a science minor?

As I read through these articles I feel frustrated. I had originally thought there were several articles about why college costs as much as it does, but two articles about how difficult life is for people who do not feel they can fulfill these specific commitments?

Does it even cover students who decide to attend out-of-state instead of in-state, when there are viable options? I had classmates that told stories of students that never applied for residency, and had their parents pay for four years of out-of-state tuition.

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Old 11-14-2017, 05:14 PM   #22 (permalink)
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Wall o' Text meet Mac OS Summarize (paragraphs, 10%):
Quote:
One woman dropped out with $55,000 in student loans and had changed her phone number three times that year so far. Two of her tax refunds had been "seized, and other debtors have had their paychecks or Social Security payments garnisheed. Over all, the government recoups about 80 cents for every dollar that goes into default — an astounding rate, considering most lenders are lucky to recover 20 cents on the dollar on defaulted credit cards."


Not enough borrowers are choosing income-based repayment, where borrowers repay with 15% of their discretionary spending for 25 years, and the rest is forgiven. Not everyone knows about it. Others simply pay nothing because it is easier. Navient tells me about this each time I visit their website. Later, the article says the repayment was reduced to 10% of discretionary spending.
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In a woke world, those who's debt is expunged can pay it forward until it is all rolled up.
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Old 11-14-2017, 05:26 PM   #23 (permalink)
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Parts 5 - 7

Okay, Mr. Smartytrousers, is that 10% of the original article, or my summary?

Part 5: Problematic parental student loans.

“[B]orrowers of student loans age 60 and older [are] the fastest-growing age group for college debt,” but they do not demand attention like their children because they are ashamed. They did well enough until they took on debt for their children.

“At one point, she said, the Internal Revenue Service seized a $2.43 tax refund.”

“In one extreme case, student debt, and the constant creditor calls, were mentioned in a suicide note by the stepfather of a young law school graduate. The guilt has been crushing for the graduate.”

That seems to be the story of a then-recent law school graduate, who owed $200,000 in student loans, and his mother co-signed for $100,000 more. Right now he is paying $1,200 a month, but that does not even cover all of the interest. He has not found a good job in his field.

Some Parents, Shouldering Student Loans, Fall on Tough Times - NYTimes.com

Part 6: Borrowing to build attractions on college campuses.

“A decade-long spending binge to build academic buildings, dormitories and recreational facilities — some of them inordinately lavish to attract students — has left colleges and universities saddled with large amounts of debt. Oftentimes, students are stuck picking up the bill.”

They list a great many ways that universities are spending money to make school more attractive, but very little of it goes towards actual education. “While Harvard is the wealthiest university in the country, it also has $6 billion in debt, the most of any private college, the data compiled by Moody’s shows.” “Harvard borrowed $1.5 billion to pay its bills rather than selling off assets at a sharp discount. Its interest expense more than doubled from fiscal 2008 to fiscal 2011, to nearly $300 million.

“Ohio University, […] has proposed spending $2.6 billion on construction projects in the next 20 years, half of it paid for by debt”

“Outstanding debt at the 224 public universities rated by Moody’s [increased 130%] in inflation-adjusted dollars in [twelve years]. At the 281 private universities rated by Moody’s, debt increased [107.5%], in that period.”

$63 million in debt has left Mount St. Mary’s University, a small Roman Catholic college in Maryland, with thin financial resources and junk-rated credit, according to a Moody’s rating in March. `We borrowed a lot of money, but we had no choice,” said Thomas H. Powell, the university’s president, […] `I wasn’t going to watch the buildings fall down.’”

“Daniel M. Fogel, who resigned last year as president of the University of Vermont, said that given the lack of state support, many public colleges and universities had to borrow money just to remain adequate. He said that when he arrived at the university in 2002, some of the laboratories were inferior to those at many high schools.”

“David K. Creamer, vice president for finance and business services at Miami University, said the importance of college rankings had pressured administrators to spend more and more. In some rankings, the effect of spending is direct because institutions with `the best dorms’ or `the best athletic facilities’ are singled out. The effect on other rankings is indirect: better facilities attract better students, and that ultimately raises rankings, Mr. Creamer said `[If] you become more efficient, your ratings will […] probably go down.”

Your tuition should go down, though, while schools that improve their rankings probably need to charge more.

“At Ramapo, President Mercer said he planned to focus on marketing the college’s academic reputation, rather than its new buildings. Students, he said, seem less interested in `bells and whistles’ now that the costs of college — and the potential debt — have become painfully clear.”

Colleges? Debt Falls on Students After Construction Binges - NYTimes.com

Part 7: Working your way through college

“As of 2010, some 17 percent of full-time undergraduates of traditional age worked 20 to 34 hours a week, according to the National Center for Education Statistics. About 6 percent worked 35 hours or more.”

“My folks tried everything to keep me from joining the Army,” [Steve Boedefeld] says. “They told me that I could go to school wherever I wanted and that they would pay for it. But I was pretty much dead-set that I could do it on my own. Their parents didn’t float their bill, so why should I be different?

“[He] enlisted in 2006 and finished his service in 2010, after three tours of duty in Iraq and one in Afghanistan, each lasting three to six months. The discipline that allowed him to endure Ranger training and survive combat has carried over to his financial life. As a soldier in a war zone away from his wife, Jennifer, he earned as much as $5,000 a month, much of it tax-free thanks to longstanding rules governing combat pay. They put away $10,000 to $15,000 annually. `One of my friends calls me an economy killer,’ he said.

“The Boedefelds arrived in Boone with enough money for a down payment on a fixer-upper. They moved there because Appalachian State offered a degree in renewable energy that interested Mr. Boedefeld, now 25. He joined the North Carolina National Guard to get in-state tuition rates, and his service enables him to buy reasonably priced health insurance for his wife and two sons.

With his National Guard service, his $2,000 a month or so in G.I. Bill benefits and the $10 an hour he makes working 15 to 20 hours a week for an electrician, the family is debt-free, save for their mortgage.”

“We definitely live on what we can grow in the garden and what I can hunt for.”

“Then there are the comments about [another student’s] banged-up Toyota with nearly 134,000 miles on it.”

I bought both of my current cars with more miles than that!

College Costs, Battled a Paycheck at a Time - The New York Times
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Old 11-14-2017, 05:40 PM   #24 (permalink)
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DNRTFA, so you.

I don't envy kids these days. I started out $1000 ahead, got $300 assistance, graduated $1000 in debt, and had that paid off by the end of the summer.

Then I marched off to war and threw it all in a bonfire I hadn't started.
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Old 11-14-2017, 06:44 PM   #25 (permalink)
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Old 11-14-2017, 06:54 PM   #26 (permalink)
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I have little sympathy for those who sign a contract stating they will repay their loans, and then chose not to do so. Many people who are in default pay nothing towards their debt, indicating they have no intention in making lifestyle changes to repay their obligations.

Tuition prices should reflect the actual cost to provide the education, meaning that a science class with expensive lab equipment should cost much more than a writing class.

When I have children, I will not feel obligated to pay for their post-secondary education. Perhaps I will contribute towards it, but they better not expect it from me. If they are sufficiently motivated, they will achieve their goals regardless of my contribution.

I graduated HS with a 2.3 GPA and have a criminal record. If I can do well in the land of opportunity, nearly anyone can.
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Old 11-14-2017, 10:20 PM   #27 (permalink)
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Has it always been burning, since the world's been turning?
https://www.youtube.com/results?sear...=paper+in+fire
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Old 11-15-2017, 01:10 AM   #28 (permalink)
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“Then there are the comments about [another student’s] banged-up Toyota with nearly 134,000 miles on it.”

I bought both of my current cars with more miles than that!
2 out of 3 for me. The Insight only had ~50K when I bought it (back in '03), but it's over 200K now, and has probably saved me close to its $8500 purchase price in gas. Figure 140K miles at 70 mpg (I've actually averaged a bit over that) is 2000 gallons, $6K at $3/gal. Anything else I bought would likely have gotten 35 mpg or less.

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