Student Loan Debt bailout

[Young Drachma]

With all of the talk of bailouts, I've been wondering for the past few months now, whether a student loan debtor bailout of say, lenders within a certain range, aimed at helping those who have had to grapple with increasing college costs, etc., and as a result, aren't able to contribute to the economy at large, as their grandparents and parents might have been able to do.

Philosophically, I don't support the idea. But if we're going to bailout major corporations, banks and the such, so they can continue to loan people money and let them stay in debt, then I don't see how this wouldn't be something they'd consider.

People under 35-40 are paying social security to ensure the old can live okay, they're being saddled with huge deficits that the folks making them will be too old and dead to care once it comes time to pay the piper on them and so...student loan debtor bailout, capped per borrower at a certain amount would surely be less than the $700bn paid to the banks and would result in people free to do what their generation does best.

Spend.

Discuss.

Again, I don't support it. But I wanted to create a wider dialogue on the subject, as it's been clanging around in my head for a while. I know off hand why it'd be infeasible and why it'd never happen. But so is most of the shit that's happened in the past decade that we've seen occur.

I'm wondering how it could happen and what it would look like and the benefits of it would be, since it's just not been mentioned short of a few random blog posts I've looked at a few months ago.

[JPhillips]

I'd be much happier if that money went to making school more affordable in the first place, thus reducing the need for student loans. I have students that are leaving undergrad with 40-70k in student loans and no prospects of paying that off for decades.

[Noop]

40-70k? Jebus Thrist, I just graduated (well one class left but I walked) and I owe a grand total of 213.43 and that's most due to the fact I didn't know that the money I got for my books when I was short was a loan. I thought it was apart of the school's scholarship thingy.

I expect to have some debt when I go to law school but I have been working and save for two years now. I don't anticipate leaving law school in excess of 20k; maybe less... Come to think of it I know a couple of friends who are in debt. They took the money when they really didn't need it and as a result face a mountain of debt.

[SportsDino]

I don't think a student loan bailout would help all that much. The idea of just throwing money around to everyone because we made the dumb mistake of throwing money at a bunch of banks is a logical mess.

Ultimately all sorts of massive debt forgiveness will come in the form of inflation... it just happens to wipe out savings and investments at the same time. Its the road we are heading down if the bailout train keeps chugging.

[miked]

I went to a state school (go RU) and left with 3k of insanely low interest gov't loans, that I deferred for a few years while I was in grad school. When I got my postdoc job they sent me a letter saying they were going to withdraw $50 a month until like 2011 or something. Whatever.

But the problem isn't the loans per se, it's that Universities are charging 40k a year. Not to mention the overhead they get from the government on grants...

[Young Drachma]

I'd be much happier if that money went to making school more affordable in the first place, thus reducing the need for student loans. I have students that are leaving undergrad with 40-70k in student loans and no prospects of paying that off for decades.

If they just got rid of federal loan programs all together, schools would have to lower their tuitions, merge, raise more money or close.

I favor this.

[Young Drachma]

But the problem isn't the loans per se, it's that Universities are charging 40k a year. Not to mention the overhead they get from the government on grants...

:+1:

[Eaglesfan27]

40-70k? Jebus Thrist, I just graduated (well one class left but I walked) and I owe a grand total of 213.43 and that's most due to the fact I didn't know that the money I got for my books when I was short was a loan. I thought it was apart of the school's scholarship thingy.

I expect to have some debt when I go to law school but I have been working and save for two years now. I don't anticipate leaving law school in excess of 20k; maybe less... Come to think of it I know a couple of friends who are in debt. They took the money when they really didn't need it and as a result face a mountain of debt.

Maybe law school is different than medical school, but I would have considered it a miracle to get away with under 20k in loans in 1 year, much less 4 years. I went to my home state medical school and still had to take out well over 100k in loans. I didn't have any loans in undergraduate though, so at least I don't have over 250k in loans like most of my graduating class had.

[Fidatelo]

I hate the idea of bailing out student loans. My wife has a friend that has lived like a Rockerfeller for years on student loans. Now that she has finally hit the real world and has to pay them back, she is facing the reality that maybe racking up 80k+ in debt while wearing $200 blue jeans was a bad idea. This is called a life lesson, and I'll be damned if my tax dollars are going to keep her from learning it.

[bob]

I am very much against this - you make choices in life, and you live with them.

I REALLY wanted to go to Notre Dame. I had a full ride at Georgia Tech due to Hope Scholarship and smaller scholarship. I went to Tech, got a great education, and graduated debt free. You don't have to go to a $25K / year school to get a good education.

I'd be a more likely to support medical school loan forgiveness if it came with required service hours in clinics.

[Ronnie Dobbs2]

As someone without a mortgage, and with little debt remaining from school, I could really get behind a new "Give Me Money Because I Did Shit Right" bill.

[bob]

As someone without a mortgage, and with little debt remaining from school, I could really get behind a new "Give Me Money Because I Did Shit Right" bill.

Agreed. I made the financially right choice for college, busted my ass to get a good job, bought a reasonable house, made the right choices. I have no problem with a safety net for helping people out when bad luck happens (layoffs, medical issues). But that's different than "I don't think I should have to pay the student loans that I agreed to."

[Marc Vaughan]

As someone without a mortgage, and with little debt remaining from school, I could really get behind a new "Give Me Money Because I Did Shit Right" bill.

Now thats a truly revolutionary idea - reward people for doing the right thing so it encourages others to do so also ......

Nahhh, can't see any politician buying that one :D

[Noop]

Maybe law school is different than medical school, but I would have considered it a miracle to get away with under 20k in loans in 1 year, much less 4 years. I went to my home state medical school and still had to take out well over 100k in loans. I didn't have any loans in undergraduate though, so at least I don't have over 250k in loans like most of my graduating class had.

I have saved a lot and have generous family who have been assisting in saving as well. If I get into Georgetown then I expect my loans to be pretty high however in case I don't and I go to Florida State or North Carolina the cost of living in those areas aren't as high as Georgetown.

Perhaps I am being a little fool-hearted into believing that I can walk away from law school relatively debt free I have eight months before I find out. I have a meeting with the advisors in a few weeks so I will know by then.

[Young Drachma]

I'll bump this thread again when Barry decides to push something like this. lol

[lungs]

I certainly didn't do it right. I never worked in college, besides a few weekends here and there and summer breaks. I racked up plenty of debt (20k). But the interest rates are so low that it is the least of my debt priorities. Minimum payment each month. I'll pay down my higher interest car loan first.

A student loan bailout would not be some tremendous weight off my shoulders. Maybe it is for others, but they should've thought about that before they racked up so much debt studying a field that either doesn't pay that kind of return or has become so saturated it's impossible to find a job.

[RedKingGold]

I'd be thrilled if the government paid my school debt.

[Raiders Army]

Maybe it is for others, but they should've thought about that before they racked up so much debt studying a field that either doesn't pay that kind of return or has become so saturated it's impossible to find a job.

QFT.

[CU Tiger]

The law school debt thing scared me, and life happened which kinda negated my plans.
But while I can see justifying 200k in debt to be a doc (hell bad and lazy ones make 200k/year) there are a whole bunch of lawyers making <50k.

I just couldnt pull the trigger. SC Law was going to run me 50k/year, with a no work your first 2 year rule.

[RedKingGold]

I just couldnt pull the trigger. SC Law was going to run me 50k/year, with a no work your first 2 year rule.

That's news to me. I'm pretty sure the ABA mandates that law students cannot work in a law-related profession for only the first semester of school.

However, is that a state law? That might be why.

[Eaglesfan27]

I have saved a lot and have generous family who have been assisting in saving as well. If I get into Georgetown then I expect my loans to be pretty high however in case I don't and I go to Florida State or North Carolina the cost of living in those areas aren't as high as Georgetown.

Perhaps I am being a little fool-hearted into believing that I can walk away from law school relatively debt free I have eight months before I find out. I have a meeting with the advisors in a few weeks so I will know by then.

Ahh, that makes a huge difference. My family is/was generous but broke. I payed for everything during those 4 years with the exception of the small amount of money my wife made the last 2 years of medical school. I had to take loans for basic things such as rent and food, and we lived frugally during those years. Anyway, I've got no complaints as my debt is very manageable.

[digamma]

To this point we haven't seen student loans default rates rise to the point to where a bailout is close to necessary. Additionally, student loan obligors often have greater access to forbearance or renegotiation options than a mortgage lender.

[molson]

I expect to have some debt when I go to law school but I have been working and save for two years now. I don't anticipate leaving law school in excess of 20k; maybe less... Come to think of it I know a couple of friends who are in debt. They took the money when they really didn't need it and as a result face a mountain of debt.

20k for law school would be tremendous (I think the average is around $70k now, with MANY in six figures that are fighting over low paying, entry level jobs.)

I would support enhanced student loan forgiveness programs for those who work in low-paying public service jobs. The Federal Government, States, and many universities already have such programs. I received $15k from my school against my loans for three years in public service. I don't think this would particularly help the recession though.

But hand-outs? No way, it's once again insulting and unfair to those who manage their financial lives with sanity. Those who take on insane debt loads deserve to have the credit rating impacted - maybe that'll keep them from getting mortgages they can't afford.

How about tax credits for those with excellent credit?

[CU Tiger]

That's news to me. I'm pretty sure the ABA mandates that law students cannot work in a law-related profession for only the first semester of school.

However, is that a state law? That might be why.

Honestly Im not sure. Its been the better part of a decade, and I am not positive I ever knew the reason, just that I got put on point in my interview when I mentioned working. And for what its worth it was not restricted just to law fields, it was you can not have a job at McDonald's.

I was acccepted and researched it a bit then, and as I recall there really was no check in place except that you had to sign a student pledge, which presumably if you could later be proven to have broken would not sit well with the ethics and code of conduct provisions.

[RainMaker]

If they just got rid of federal loan programs all together, schools would have to lower their tuitions, merge, raise more money or close.

I favor this.

How do you think they'll lower tuition? Most colleges are not profitible. They'd have to dramatically lower expenses. That means reducing the money they put into their facilities and programs. Skimping on salaries for professors.

I don't think the solution is to make our school's shittier. China and India are kicking our asses enough as it is in the education department these days.

[RainMaker]

I'm against just about all the bailouts with the exception of the educational field. We should be doing everything we can to lessen the burden on people who want to further their education and enhance their minds. This is not only essential to our future economy, but our national security.

[Young Drachma]

How do you think they'll lower tuition? Most colleges are not profitible. They'd have to dramatically lower expenses. That means reducing the money they put into their facilities and programs. Skimping on salaries for professors.

I don't think the solution is to make our school's shittier. China and India are kicking our asses enough as it is in the education department these days.

I understand all of this. You think those countries you cited are spending money on swanky dorms and athletic facilities for semi-pro "college teams?" Uh, no.

Lots of schools would need to cut costs the same way businesses do, not being subsidized by public largess or stupid 18-year olds who wouldn't be allowed to borrow that sum of money for anything else.

Making schools start to merge or find other solutions wouldn't erode our education at the higher ed level, it'd make it better.

Well that and deemphasizing how many kids go to college right after HS because they feel they "have" to. Vocational education needs to find its way back.

[RainMaker]

I understand all of this. You think those countries you cited are spending money on swanky dorms and athletic facilities for semi-pro "college teams?" Uh, no.

Lots of schools would need to cut costs the same way businesses do, not being subsidized by public largess or stupid 18-year olds who wouldn't be allowed to borrow that sum of money for anything else.

Making schools start to merge or find other solutions wouldn't erode our education at the higher ed level, it'd make it better.

Well that and deemphasizing how many kids go to college right after HS because they feel they "have" to. Vocational education needs to find its way back.

You're talking about a handful of schools in this country. For every Big Ten University, there are 5-10 small schools struggling to get by with sub-par facilities.

I went to Winona State, a nice state school in Minnesota. We had 50+ year old dormitories that I'd hardly call swanky. The school was cute, had it's nice parts, but it wasn't the Taj Mahal. The college was constantly fighting the state to fix their boilers so that the school could be heated. Take a walk around some state schools in your state and you'll notice they aren't as nice as you think.

And shouldn't de-emphasizing how many kids go to college be a bad thing? I'd personally prefer that we drilled it in the heads of kids that they need to get an education. Even drilled in their heads that they need to become skilled in some area. All I know is China and other countries are churning out engineers, doctors, scientists, and more at an astounding clip to what we are doing. If you don't think that will catch up to this country, I don't know what to say.

Making it harder to get an education, telling people they don't need to go, and making schools struggle even more to get by seems to be going the wrong direction.

[Young Drachma]

You're talking about a handful of schools in this country. For every Big Ten University, there are 5-10 small schools struggling to get by with sub-par facilities.

I went to Winona State, a nice state school in Minnesota. We had 50+ year old dormitories that I'd hardly call swanky. The school was cute, had it's nice parts, but it wasn't the Taj Mahal. The college was constantly fighting the state to fix their boilers so that the school could be heated. Take a walk around some state schools in your state and you'll notice they aren't as nice as you think.

And shouldn't de-emphasizing how many kids go to college be a bad thing? I'd personally prefer that we drilled it in the heads of kids that they need to get an education. Even drilled in their heads that they need to become skilled in some area. All I know is China and other countries are churning out engineers, doctors, scientists, and more at an astounding clip to what we are doing. If you don't think that will catch up to this country, I don't know what to say.

Making it harder to get an education, telling people they don't need to go, and making schools struggle even more to get by seems to be going the wrong direction.

I'm referring largely to private, secular institutions with less than 5,000 students. There are a glut of them out there, but most folks don't think about that if they went to Olde State U-Branch Campus.

These schools are dragging down the quality that could be better invested elsewhere.

That said, I don't think sending more kids to college is the answer if we can't fix the gaping hole that is K-12 education in this country.

[Young Drachma]

From the Chronicle of Higher Education almanac:

The proportion of college students enrolled at public institutions (Fall 2005)

http://chronicle.com/photos/v54/i01/2007Alm-map-enrolled-public.gif

[RainMaker]

I'm referring largely to private, secular institutions with less than 5,000 students. There are a glut of them out there, but most folks don't think about that if they went to Olde State U-Branch Campus.

These schools are dragging down the quality that could be better invested elsewhere.

That said, I don't think sending more kids to college is the answer if we can't fix the gaping hole that is K-12 education in this country.

Why would you punish those schools? They are the ones that take the burden off the taxpayer. State schools are much cheaper because the taxpayer is subsidizing a large portion of their tuition.

I would rather help a student at a private institution get cheaper loans than to simply hand the tuition to a student at a state school.

[Young Drachma]

Why would you punish those schools? They are the ones that take the burden off the taxpayer. State schools are much cheaper because the taxpayer is subsidizing a large portion of their tuition.

I would rather help a student at a private institution get cheaper loans than to simply hand the tuition to a student at a state school.

There are 921 private institutions that give degrees from Bachelors to Docotorate that have enrollments of less than 10,000 students.

By the same token, only 301 public institutions meet that same criteria.

The federal student aid system props up a lot of inefficient schools that would be better off closing, merging with other institutions or finding market solutions to finding a relevant place in the marketplace, because right now, most have deviated a great deal from their missions and however well-intentioned, most have devolved themselves into an arms race that most are ill equipped to compete in.

I realize that my bias is having spent close to a decade in higher education, so my understanding is coming from a completely different place than someone who just went to school or even someone who say, just teaches at an institution.

[RainMaker]

There are 921 private institutions that give degrees from Bachelors to Docotorate that have enrollments of less than 10,000 students.

By the same token, only 301 public institutions meet that same criteria.

The federal student aid system props up a lot of inefficient schools that would be better off closing, merging with other institutions or finding market solutions to finding a relevant place in the marketplace, because right now, most have deviated a great deal from their missions and however well-intentioned, most have devolved themselves into an arms race that most are ill equipped to compete in.

I realize that my bias is having spent close to a decade in higher education, so my understanding is coming from a completely different place than someone who just went to school or even someone who say, just teaches at an institution.

So you're saying that those who choose to attend private schools should receive no assistance toward their school loans. But they should have to pay in taxes that go toward public schools that they have chosen not to attend?

And I have no doubt that there are schools that are poorly run on the private level. But I wouldn't stereotype every school because of some bad apples. Private schools are the choice of many based on religious or career ambitions. There are some students who would prefer to study on a small campus with a more personal feel than a school with 30,000 enrolled.

[ISiddiqui]

The Federal Government, States, and many universities already have such programs.

Not "The Federal Government" as a whole. Each agency has to fund those student loan forgiveness programs. I know that mine has not, regardless of people continuing to petition them (and the fact they want to hire law students).

[Jon]

Maybe law school is different than medical school, but I would have considered it a miracle to get away with under 20k in loans in 1 year, much less 4 years. I went to my home state medical school and still had to take out well over 100k in loans. I didn't have any loans in undergraduate though, so at least I don't have over 250k in loans like most of my graduating class had.


It really depends where you go to law school. If you go to some instate schools, you may be able to get away with under 20K loans in one year. But, I don't know any lawyer who used loans who had less than 20K loans in one year. I have about $100K in student loans from law school.

(I posted my response before seeing the other responses).

I am not a fan of a student loan bailout per se, but I think it would be good if they increased the cap on the student loan interest deduction. I think they should also continue to improve loan forgiveness for entering certain types of law. For the longest time, the only way you could get loan forgiveness from the government is if you got a certain type of loan and went into law enforcement (prosecutors only counted). There has been movement to increase loan forgiveness but it hasn't gone far enough. It could be tied to the national service program, possibly.

[JonInMiddleGA]

The federal student aid system props up a lot of inefficient schools that would be better off closing, merging with other institutions or finding market solutions to finding a relevant place in the marketplace

I realize mileage with vary with geography but in Georgia you just described most of the state/public university system. Outside of UGA (in some fields) and GT (in other fields), the small private colleges blow the rest out of the water. And we compound the problem with the Hope scholarship.

Well that and deemphasizing how many kids go to college right after HS because they feel they "have" to. Vocational education needs to find its way back.

We seem to be in general agreement on this point, and while I've always agreed in general I'm swung more & more in that direction every day. On the one hand we hear how America needs to get back to being a producer of goods, not just a nation of consumers. And on the other hand, we try to maintain the fallacy that every person is college material or even that having them be so is somehow desirable.

[bob]

Outside of UGA (in some fields) and GT (in other fields), the small private colleges blow the rest out of the water.

No love for Georgia State?

[JonInMiddleGA]

No love for Georgia State?

Went there. By & large one of the biggest jokes I can ever imagine, with a couple of programs being the exceptions rather than the rule.

[Fidatelo]

I agree with DC and JimGA. Put some real learning back into K-12, get rid of the "no child left behind" bullshit, and focus on vocations/trades. What good does it do society to have people in school until they are 25 when they come out and take a job that they could have been specifically trained for in 6-12 months? I know far too many kids that went to university (myself included) simply because that's what they thought they had to do. Luckily I got wise and dropped out after a year, then got into a community college which pumped me out in 18 months. I keep moving up in my field and haven't once been passed over for anything because I don't have a degree.

Get these kids out in the real world earlier, producing value to society and not racking up massive debts. If they want to expand their general base of knowledge let them do it on their own time like people used to do.

[miked]

What's a small private college...Emory? Oglethorpe? Southern Poly? Emory is huge and other 2 are, well, probably in line with GSU. GT offers the best education money can buy. They are in the bottom 10th percentile for in-state tuition (probably way to low, but the polis love to brag) and they have a tuition freeze for freshman (the tuition you pay when you enter is the same when you leave). I'd say the hope is doing pretty well there, and part of UGA.

[bob]

Went there. By & large one of the biggest jokes I can ever imagine, with a couple of programs being the exceptions rather than the rule.

Not to threadjack, but any thoughts on their MBA program (if you know anything about it). I was considering it b/c of the flexibility.

[JonInMiddleGA]

What's a small private college...Emory? Oglethorpe? Southern Poly? Emory is huge and other 2 are, well, probably in line with GSU. GT offers the best education money can buy. They are in the bottom 10th percentile for in-state tuition (probably way to low, but the polis love to brag) and they have a tuition freeze for freshman (the tuition you pay when you enter is the same when you leave). I'd say the hope is doing pretty well there, and part of UGA.

Emory is around 12k last figure I saw, which puts it close to the 10k threshold being discussed earlier. I'd put Oglethorpe well above GSU and if it isn't, then there's a shitload of money being wasted by a number of parents. Southern didn't even cross my mind to be honest. Mercer comes to mind as one you didn't mention.

I took no issue with the quality of the education at GT, even gave UGA credit for some of their programs. But the directionals, the former 2 year schools that bumped up, etc., and most definitely the majority of Georgia State ...

[Dutch]

Instead of a bailout, how about an equal trade. The American people will give you $10k for every year of military service you give us. You could even work on your masters degree while serving your country.

[albionmoonlight]

Instead of a bailout, how about an equal trade. The American people will give you $10k for every year of military service you give us. You could even work on your masters degree while serving your country.


I think that student loan repayment for military service and other types of public service1 (teaching in inner city schools, etc.) is a great idea.

1 Which I know begs the question of what would constitute "public service" for such a program. Without a lot of oversight, it could become a joke as rich kids caddy at their Dad's country club and have it classified as "civic beautification" or something like that. Not to mention the fact that any agency who accepts such employess will probably have to jump through all of the hoops that any agency that accepts federal money has to jump through and . . . well, any sort of expansion comes with problems is what I am saying. The military is, at least, clearly public service.

[Mustang]

Half of college is just horseshit crap that they force upon you to make more money. I'm all for math, science, english and expanding your knowledge base, but in my 4 years I took 1 class that I wanted to and the rest was shoved down my throat. I would have loved to take more programming classes that would have had some relevance to my major, but unfortunately I had to take "Pre-18th Century Polish Love Poems and the Impact on the French Revolution"

College is one big legal scam.

[SportsDino]

I wouldn't mind an increase in tax deductions for student loans. If you are paying back the debt you should be able to deduct it to a greater degree than you can now. Heck, you go to college to get a high paying job, and once you have a high paying job you don't qualify to deduct the student loan interest! Kinda stupid really.

Besides, its one of the tax deductions that are kind of hard to game. Its not like you are going to go out and get thousands of dollars in student loans just so you can deduct a fraction of the interest on your tax return.

So that is an idea that rewards people that are doing the right thing (paying off their debts), and is positive encouragement to the economy.

-----

As for army service, maybe instead of billions in defense contracts we should actually pay our soldiers a decent wage. No need for a handout or some weird tax thing... just increase the pay directly. Until that happens, none of these politicians really support our troops, all they are good at is getting them killed for bullshit reasons.

[Klinglerware]

Not sure why a student loan bailout would be necessary--interest rates tend to be pretty low. Repayment options also tend to be pretty flexible. I carry a pretty hefty student loan debt load. I've always managed the payments--and they do get easier to make with each passing year.

One thing to keep in mind is that, for better or worse, the cachet of an "elite" school may make taking out student loans worth it. Studies have shown that people with an Ivy-type undergrad degree aren't necessarily more productive than state-school graduates, but they do tend to start at higher salaries--the effect of this higher starting salary compounds over time. So in that case, there is a good chance that you will get your money back.

I've also heard the advice that it generally isn't worth it to pay for business school if you can't get into a "top-10" or "top-20" school or whatever--the starting salary bump of a grad from a top-tier MBA program can be huge compared to an average MBA grad. In that case too, it may be worth it to take the loans out if you get into Wharton vs paying out of pocket for a more affordable school. Of course, if the other school choice is free, then that changes the calculus too.

[SportsDino]

I agree a lot of college is idiotic waste. Luckilly I qualified for some cool program at my university which was designed to give you leeway in your course selection (working with an advisor). I completely ditched my advisor for three years (they actually got pissed with me), developed my own program with massive computer science, economics, and business, and was ready to graduate in three years with mostly junior/senior level classes. I did meet with an advisor for the fourth year so they could sign off on my taking 50% graduate work.

Anyway, the point is college should be refactored into a service that is actually worth the money you spend on it (loans, scholarship, or otherwise). And they should stop requiring it for any job that requires menial amounts of thought (you are lucky to get a secretary job it seems without a degree with all the unemployment out there). The U.S. is drowning in waste and inefficiency (as well as corruption and incompetence at the top)... we need to get smart or get passed by other countries.

[Dutch]

Half of college is just horseshit crap that they force upon you to make more money. I'm all for math, science, english and expanding your knowledge base, but in my 4 years I took 1 class that I wanted to and the rest was shoved down my throat. I would have loved to take more programming classes that would have had some relevance to my major, but unfortunately I had to take "Pre-18th Century Polish Love Poems and the Impact on the French Revolution"

College is one big legal scam.

Suddenly I believe that. You could stand to take more math classes, for instance.

[Dutch]

I think that student loan repayment for military service and other types of public service1 (teaching in inner city schools, etc.) is a great idea.

1 Which I know begs the question of what would constitute "public service" for such a program. Without a lot of oversight, it could become a joke as rich kids caddy at their Dad's country club and have it classified as "civic beautification" or something like that. Not to mention the fact that any agency who accepts such employess will probably have to jump through all of the hoops that any agency that accepts federal money has to jump through and . . . well, any sort of expansion comes with problems is what I am saying. The military is, at least, clearly public service.

It would be nice if they were legit, sure. Public service could be anything that is generally construed as a "sacrifice". And by sacrifice, meaning working for the govt for cheap.

[Klinglerware]

I wouldn't mind an increase in tax deductions for student loans. If you are paying back the debt you should be able to deduct it to a greater degree than you can now. Heck, you go to college to get a high paying job, and once you have a high paying job you don't qualify to deduct the student loan interest! Kinda stupid really.




I'm not sure I completely agree with this. The original intention of the deduction was to help out kids just out of college, who do struggle with the payments early in their careers.

I do think that it was a good thing to get rid of the five year time limit, and open up the deduction to anybody below the income-cap. This did ease the sting for people who wanted to go on to less lucrative careers.

[Dutch]

...we need to get smart or get passed by other countries.

I think that's already happened. But we can still put up a fight if we actually tried.

[Mustang]

Suddenly I believe that. You could stand to take more math classes, for instance.

Ok... I must have missed something. Please enlighten me so I can laugh at myself. :p :)

[JonInMiddleGA]

Not to threadjack, but any thoughts on their MBA program (if you know anything about it). I was considering it b/c of the flexibility.

Generally speaking, I'd put it in the category of those "mid-tier" (or whatever the phrasing was) MBA programs mentioned elsewhere in the thread. It exists, it provides the degree, could prove worthwhile if you're in a situation where simply having one provides a fairly guaranteed income boost or whatever. But it ain't like having a Harvard MBA either (which I'm sure you knew already).

On the whole the MBA students I've encountered from there seemed similar to those in other lower profile programs, decent enough sorts with normal abilities just trying to find an edge if they can or older students trying to make sure they remain competitive on paper with the next gen workers.
Nothing wrong with either of those things afaic, but that's about my .02 on them.

[Dutch]

Ok... I must have missed something. Please enlighten me so I can laugh at myself. :p :)

Half, All, and "One out of..." do not equal the same thing. Just clowning around while believing that math needs a serious overhaul in our American mindset. It's not important for most of today's jobs, but it is more most of tommorrow's jobs, and the Chineese and Indians are going to be prepared.

[Jon]

I'm not sure I completely agree with this. The original intention of the deduction was to help out kids just out of college, who do struggle with the payments early in their careers.

I do think that it was a good thing to get rid of the five year time limit, and open up the deduction to anybody below the income-cap. This did ease the sting for people who wanted to go on to less lucrative careers.

To me the problem is the income cap. It's too small, and doesn't take into account the cost of living in different parts of the country. People shouldn't be dissuaded from attaining a college or advanced degree by being forced to make a choice between a house or student loan payments. In terms of lawyers, that is a very real choice, unless you work at a top tier firm or have a lucrative solo practice. If you choose public service or public interest law, you don't make much money. In this area, D.A.s and P.D.s don't make enough to pay the student loan bills and live.

[Klinglerware]

To me the problem is the income cap. It's too small, and doesn't take into account the cost of living in different parts of the country. People shouldn't be dissuaded from attaining a college or advanced degree by being forced to make a choice between a house or student loan payments. In terms of lawyers, that is a very real choice, unless you work at a top tier firm or have a lucrative solo practice. If you choose public service or public interest law, you don't make much money. In this area, D.A.s and P.D.s don't make enough to pay the student loan bills and live.

I do agree with this, but there should be a cap at some point. The deduction should still be a tool to help those struggling to make payments, rather than, as one of the other posters implied, an additional "reward" to those who managed to translate their degree into a high-paying job.

[Klinglerware]

Generally speaking, I'd put it in the category of those "mid-tier" (or whatever the phrasing was) MBA programs mentioned elsewhere in the thread. It exists, it provides the degree, could prove worthwhile if you're in a situation where simply having one provides a fairly guaranteed income boost or whatever. But it ain't like having a Harvard MBA either (which I'm sure you knew already).

On the whole the MBA students I've encountered from there seemed similar to those in other lower profile programs, decent enough sorts with normal abilities just trying to find an edge if they can or older students trying to make sure they remain competitive on paper with the next gen workers.
Nothing wrong with either of those things afaic, but that's about my .02 on them.

Of course. In many cases, you need the MBA as a credential (regardless of quality of the program) required by the position you seek. If viewed in that light (rather than as a general tool to substantially boost your income), then a "mid-tier" program will be useful.

[SportsDino]

My issues with the income cap:

- The main point of all that debt is to get a high paying job, it is also the justification for why everything is so expensive. Making the only tax cut related to it unavailable if the debt actually succeeded in its purpose is a bit ass backwards.

- The tax code is complicated enough.

- You can't really game it, it is unlikely you are going to take out a lot of debt to be able to deduct the interest. Its not like houses where you are dealing with an asset that could theoretically appreciate in value. There may be some marginal ways to exploit it if you are using loan money in weird ways, maybe, but then you are not doing that for the tax writeoff anyway.

- As far as using tax cuts as an incentive, it is actually one of the few that make sense. It is a deduction that applies only if you tried to get an education, and you are paying off your debts. Adding the income cap just means those two things are incentivized only if you happen to be in a low paying job.

- The government is backing a lot of these loans, so why not encourage them slightly more to be paid off if they are on your books.

- If you have hundreds of thousands in loans that built up interest during your years of low paid entry work to get to your payday, why not let you reap a little bit of a reward on the tail-end? Its not big enough of a reward to encourage people to go out of their way for it anyway.

[Galaxy]

Half of college is just horseshit crap that they force upon you to make more money. I'm all for math, science, english and expanding your knowledge base, but in my 4 years I took 1 class that I wanted to and the rest was shoved down my throat. I would have loved to take more programming classes that would have had some relevance to my major, but unfortunately I had to take "Pre-18th Century Polish Love Poems and the Impact on the French Revolution"

College is one big legal scam.

I can agree with you on this. However, it seems like you need a college degree today just for an entry level position.

[SportsDino]

I don't see any issues with rewarding someone who turned their debt (not just their degree) into a high paying job. I see it as rewarding someone who is paying off their debts that were backed by the government. Some additional nudge for people that were not born into piles of money who nevertheless have pulled themselves up into success.

Compared to giving massive incentive packages to incompetent businesses for doing nothing but shuffling paper and pork, its a positive incentive. I don't care if it gets applied equally to the poor, middle class, or rich... because the very fact it involved loans and they are paying them back, means that they were poor at some point. There is no incentive for a super rich person to fund college through loans for a tax cut later on. Reward hard work, not just the condition of poverty.

[SportsDino]

you do need a college degree for entry positions, all we have done is increased the inefficiency in our economy. For positions that should be sufficient with a high school diploma, we now require thousands of dollars of debt to be incurred, for a job you couldn't pay off such a debt anyway. It is madness. The notion of competition runamuck!

EDIT: The debt being that if you were on scholarship and therefore didn't run up a big bill, you probably are not going to be looking in the market for these low paying entry or simple office jobs since you'll probably be chasing skill jobs. So we are creating a class of jobs designed for the lower tier of college graduates, that are insufficient to likely cover the costs of acquiring the job in the first place.

[Galaxy]

you do need a college degree for entry positions, all we have done is increased the inefficiency in our economy. For positions that should be sufficient with a high school diploma, we now require thousands of dollars of debt to be incurred, for a job you couldn't pay off such a debt anyway. It is madness. The notion of competition runamuck!

EDIT: The debt being that if you were on scholarship and therefore didn't run up a big bill, you probably are not going to be looking in the market for these low paying entry or simple office jobs since you'll probably be chasing skill jobs. So we are creating a class of jobs designed for the lower tier of college graduates, that are insufficient to likely cover the costs of acquiring the job in the first place.

Do you think that an associates degree is just as useful a bachelors degree? Usually you just focus on the skills you need for that.

I think outside of careers that you need it (such as medicine, law), I'm starting to see what I got in return exactly.

[Raiders Army]

Aren't we painting all degrees with the same brush? There's a huge difference in earning potential between an Engineering degree and an English degree (as well there should be). I've been looking, but haven't found any recent statistics on what types of degrees are being earned.

The job market for Nuclear Engineers, for example, is better than the job market for someone with a Bachelors Degree in History or Music Appreciation.

[RainMaker]

I do agree with this, but there should be a cap at some point. The deduction should still be a tool to help those struggling to make payments, rather than, as one of the other posters implied, an additional "reward" to those who managed to translate their degree into a high-paying job.

But often times the high-paying careers are the ones who have huge student loan payments.

Say you got your medical degree and became a doctor. It's fair to say you may owe $100k-$150k in student loans. Now you may make $80k a year, but you aren't allowed any deductions. It seems you'd be at a huge disadvantage.

I just don't see why we wouldn't want to make it easier for people to become doctors, scientists, and engineers. Why must we constantly punish people in this country who have worked hard and made a success out of themselves?

[CU Tiger]

I don't see any issues with rewarding someone who turned their debt (not just their degree) into a high paying job. I see it as rewarding someone who is paying off their debts that were backed by the government. Some additional nudge for people that were not born into piles of money who nevertheless have pulled themselves up into success.

Compared to giving massive incentive packages to incompetent businesses for doing nothing but shuffling paper and pork, its a positive incentive. I don't care if it gets applied equally to the poor, middle class, or rich... because the very fact it involved loans and they are paying them back, means that they were poor at some point. There is no incentive for a super rich person to fund college through loans for a tax cut later on. Reward hard work, not just the condition of poverty.

If you are "poor" then Pell Grants will cover (off memory) 2,800 per semester and you never pay it back. Add state grants college FA packages and you can easily get a very reasonable education.

Quite contrarily it is my experience that upper middle class and wealthy families tend to incur the most student loan debt. Part of the is the need for prestige of a select private school, and part is the lifestyle continuation of the silver spoon babies. I also had a friend in college whose parents took out every dime they could in student loans only to invest them while it was interest free and then pay them off as soon the interest was called. 10% over 6 years on a couple hundred Gs adds up/.

[JonInMiddleGA]

Aren't we painting all degrees with the same brush? There's a huge difference in earning potential between an Engineering degree and an English degree (as well there should be). I've been looking, but haven't found any recent statistics on what types of degrees are being earned.

The job market for Nuclear Engineers, for example, is better than the job market for someone with a Bachelors Degree in History or Music Appreciation.

Can't vouch for the accuracy of the data yet, but there's quite a bit of info about salaries as they relate to both degree type & specific school at
Best Colleges, Best College Majors, Best College Degrees (http://www.payscale.com/best-colleges/)

[gstelmack]

Before 9/11 (when interest rates tanked), I knew folks who took out college loans and rolled them into CDs to MAKE money...

[DanGarion]

I didn't read a single post in this thread but I'm going to add my 2 cents.

No.

What's next bailing out people because they have too much credit card debit. People need to learn responsibility.

[Young Drachma]

Generally speaking, I'd put it in the category of those "mid-tier" (or whatever the phrasing was) MBA programs mentioned elsewhere in the thread. It exists, it provides the degree, could prove worthwhile if you're in a situation where simply having one provides a fairly guaranteed income boost or whatever. But it ain't like having a Harvard MBA either (which I'm sure you knew already).

On the whole the MBA students I've encountered from there seemed similar to those in other lower profile programs, decent enough sorts with normal abilities just trying to find an edge if they can or older students trying to make sure they remain competitive on paper with the next gen workers.
Nothing wrong with either of those things afaic, but that's about my .02 on them.

I'll be less diplomatic. It's a waste of your money and you'd be better served finding something more useful to do with it, even if that means traveling to a different part of the country where you can find a job that fits your skills better.

If you want a masters, get it in something that you'll actually benefit from the material. I mean, if you think the program you're applying to will help, have at it. But otherwise? Don't just get it to check a box unless it's free or near free because of tuition assistance or something.

[Galaxy]

I'll be less diplomatic. It's a waste of your money and you'd be better served finding something more useful to do with it, even if that means traveling to a different part of the country where you can find a job that fits your skills better.

If you want a masters, get it in something that you'll actually benefit from the material. I mean, if you think the program you're applying to will help, have at it. But otherwise? Don't just get it to check a box unless it's free or near free because of tuition assistance or something.

So are you saying that MBA's are useless/or not worth it?

[GoldenEagle]

I am in student debt loans out the ass due to my me and getting my bachelors and my wife getting her bachelors and her masters. We did not really get any academic scholarships out of high school and our families made to much money to qualify for much financial aid. We also lived off-campus which added to the cost.

That being said, it is our debt and we paying it off and really don't want any government hand-out. Use the money on something useful.

[Raiders Army]

Can't vouch for the accuracy of the data yet, but there's quite a bit of info about salaries as they relate to both degree type & specific school at
Best Colleges, Best College Majors, Best College Degrees (http://www.payscale.com/best-colleges/)

Thanks. It would seem to me that an Engineering degree is something that is far more worth your while to spend four years than a History degree. One of the jobs for a History degree is an Administrative Assistant?

[SportsDino]

If they are giving out more loans than your college expenses I know there is a money making scheme. That is true regardless of whether there is a tax deduction on the interest payments, and I consider it a separate issue.

You don't take out all those loans to benefit from the tax deduction, you take them out to secure a large source of capital with very generous payback options.

So, a student loan bailout would be rewarding people taking out loans as part of an investment scheme. Eliminating the cap on deductions provides NO economic incentive to take out more loans. It does extend the reward to people over the cap, what is so bad about that?

[remper]

If this issue is looked at simply from the perspective of its possible benefit to the economy, not the personal responsibility angle, would unburdening a good portion of many people's money that is currently going to student loan repayment help the economy in the long run?

I've had the thought myself before, but am by no means an expert in any way, shape or form on finances.

[molson]

If this issue is looked at simply from the perspective of its possible benefit to the economy, not the personal responsibility angle, would unburdening a good portion of many people's money that is currently going to student loan repayment help the economy in the long run?

I've had the thought myself before, but am by no means an expert in any way, shape or form on finances.

It think it's impossible to separate the two, because encouraging personal responsibility is a benefit to the economy. (If people are bailed out from one bad decision, they'll just make another one with a bad mortgage, etc).

It would free up more money to people, but so does a government stimulus check to everyone, or a tax break. If the government is going to give away money by any means, why do it it for the ones who have behaved the worst?

[Young Drachma]

It think it's impossible to separate the two, because encouraging personal responsibility is a benefit to the economy. (If people are bailed out from one bad decision, they'll just make another one with a bad mortgage, etc).

It would free up more money to people, but so does a government stimulus check to everyone, or a tax break. If the government is going to give away money by any means, why do it it for the ones who have behaved the worst?

I think, based on the logic of the OP, the idea is..."if we're already bailing people out anyway," then why not bail out a generation that would be more likely to 1) spend on stuff which would be better than a tax break, because you're boosting their net incomes annually and 2) they're more likely to be freed up to do things like get homes or move or do other moves that might provide a more lasting stimulus to the economy.

Far-fetched to be sure, but...it's no less illogical to me than the stuff that's passed as "economic" thought the past few months. What Paulson was able to convince them of and that they did without thinking seem to just plain defy logic.

[molson]

I think, based on the logic of the OP, the idea is..."if we're already bailing people out anyway," then why not bail out a generation that would be more likely to 1) spend on stuff which would be better than a tax break, because you're boosting their net incomes annually and 2) they're more likely to be freed up to do things like get homes or move or do other moves that might provide a more lasting stimulus to the economy.

Far-fetched to be sure, but...it's no less illogical to me than the stuff that's passed as "economic" thought the past few months. What Paulson was able to convince them of and that they did without thinking seem to just plain defy logic.

I guess I see the idea, and if these people were just going to stick to cash from now on, great, but they'll rape and pillage the personal credit market again and again.

The fed gives them money to get out of their loans, so they buy a house that they can't afford, but then then the fed bails them out of that.....

And the credit companies are encouraged to continue to loan the dead-beat money because in the end, the feds pay their bills too.

It's going to be painful to end the cycle, but we have to do it. Or we could just nationalize everything, so that there's no accountability for anyone, anytime. Things would be quite fair and equal, though the dollar wouldn't be worth the paper its printed on.

[JonInMiddleGA]

Thanks. It would seem to me that an Engineering degree is something that is far more worth your while to spend four years than a History degree. One of the jobs for a History degree is an Administrative Assistant?

That didn't really surprise me much. Same with Psychology majors frequently becoming administrative assistants, retail store managers, or program coordinators for non-profits. Or English & Poli Sci majors most commonly becoming marketing managers.

We spend a great deal of time teaching people things that have little to do with what they end up doing, and considerably less time teaching people things they need to know once they reach their job/career. Of course anybody who has hired or supervised in the past ten to twenty years knows that already.

[RainMaker]

That didn't really surprise me much. Same with Psychology majors frequently becoming administrative assistants, retail store managers, or program coordinators for non-profits. Or English & Poli Sci majors most commonly becoming marketing managers.

We spend a great deal of time teaching people things that have little to do with what they end up doing, and considerably less time teaching people things they need to know once they reach their job/career. Of course anybody who has hired or supervised in the past ten to twenty years knows that already.

Very true. Although, I'd still rather have a country full of people with those degrees than ones with none. Perhaps their time spent in college didn't resonate into a high paying job in their field of study, but they've at least picked up some knowledge and raise the nation's collective intelligence level a bit.

[Klinglerware]

That didn't really surprise me much. Same with Psychology majors frequently becoming administrative assistants, retail store managers, or program coordinators for non-profits. Or English & Poli Sci majors most commonly becoming marketing managers.

We spend a great deal of time teaching people things that have little to do with what they end up doing, and considerably less time teaching people things they need to know once they reach their job/career. Of course anybody who has hired or supervised in the past ten to twenty years knows that already.

I kind of disagree here, but I think the disagreement stems from differences in thought as to what college is supposed to be about. Is it meant to be vocational training? Or is it meant to generate traditional "men of letters"? Although I am more sympathetic to the latter view, it certainly is a fair topic for debate (the current reality of "there's probably room for schools with both types of missions" is probably a reasonable solution).

In my experience, while I've supervised very good people from both a traditional liberal arts background and people with more "vocational-focused" majors (Business, Marketing, etc), the ones from good schools with more of an "arts & sciences" background tend to be much easier to train, adapt better to change, and tend to progress much more quickly at my organization.

[Young Drachma]

I guess I see the idea, and if these people were just going to stick to cash from now on, great, but they'll rape and pillage the credit market again and again.



So will the people being allowed to stay in their homes. And those folks still don't have any money, even if you do restructure their mortgages.

I'm thinking of it from the perspective of freeing up younger generations to do more than just sit still.

[JonInMiddleGA]

I kind of disagree here, but I think the disagreement stems from differences in thought as to what college is supposed to be about. Is it meant to be vocational training? Or is it meant to generate traditional "men of letters"?

The latter works well enough IF you're wealthy enough to have the luxury of paying large sums of money for knowledge for knowledge sake. Better you buy a philosophy degree than your 11th car, works for me.

But we're talking about people borrowing money & investing in something that isn't paying off in a number of cases.

In my experience, while I've supervised very good people from both a traditional liberal arts background and people with more "vocational-focused" majors (Business, Marketing, etc), the ones from good schools with more of an "arts & sciences" background tend to be much easier to train, adapt better to change, and tend to progress much more quickly at my organization.

I can't honestly say I've ever worked with anyone in broadcasting nor advertising (outside of the accounting or technical departments) whose degree prepared them for their actual function nor provided them with any skill that could not have been learned more quickly, at less cost, and with more relevance in either the workplace or a 2 year (or less) specialized program. Especially true on the broadcast side but to a surprising extent on the advertising side as well. As much as anything on new hires there's time spent on untraining them from bad habits acquired in academia.

[CU Tiger]

Hmmmm what if tax stimulus checks were sent to everyone, EXCEPT if you had a student loan your check was applied to that balance....

[RainMaker]

But we're talking about people borrowing money & investing in something that isn't paying off in a number of cases.

You can say that about just about anything in this country these days. Just take a look at the average households credit card statement. At least with an education you're increasing the intelligence level of our country somewhat.

[JonInMiddleGA]

You can say that about just about anything in this country these days. Just take a look at the average households credit card statement. At least with an education you're increasing the intelligence level of our country somewhat.

I'm not even sure I buy that argument. I see as many educated idiots with degrees than anything else, not really feeling that's an improvement.

[RainMaker]

I'm not even sure I buy that argument. I see as many educated idiots with degrees than anything else, not really feeling that's an improvement.
I think it depends on what someone studied, although I think any bit of college education helps. I'm not talking about making people downright intelligent, but just wedding out the complete morons. The people who believe the Earth is 6,000 years old and can't point out Canada on a map.

[Noop]

I think it depends on what someone studied, although I think any bit of college education helps. I'm not talking about making people downright intelligent, but just wedding out the complete morons. The people who believe the Earth is 6,000 years old and can't point out Canada on a map.

Well if you do that then the world will be a lonely place real quick. I am all in favor of getting rid of the extremist on the left and the right though.

[JonInMiddleGA]

I am all in favor of getting rid of the extremist on the left and the right though.

That's like rain on your wedding day right there.

[RainMaker]

Well if you do that then the world will be a lonely place real quick. I am all in favor of getting rid of the extremist on the left and the right though.
Not really. I'd just like our country to have an intelligence level on par with the top countries in the world. Having half our country failing basic biology on the Earth's history and evolution is not a good thing.

[DanGarion]

I just don't understand how any sane person would think it's fair for ANY group to be given handouts, because that is what a bail out really is.

Just like buying an house, stocks, anything, even getting a loan for school, these are all investments, and with an investment there is ALWAYS a risk. I'm mean this would be as pathetic as not keeping score in sports, why the fuck even play if there is no chance of winning or losing.

[Passacaglia]

How about a loan bailout comes with a decrease in the strength of your vote? It's like the converse of "no taxation without representation."

[DanGarion]

How about a loan bailout comes with a decrease in the strength of your vote? It's like the converse of "no taxation without representation."

Sounds good to me.

[molson]

Just like buying an house, stocks, anything, even getting a loan for school, these are all investments, and with an investment there is ALWAYS a risk. I'm mean this would be as pathetic as not keeping score in sports, why the fuck even play if there is no chance of winning or losing.

The 200 economists that opposed the financial bailout to Congress said a similar thing. Unwise financial decisions NEED to suffer the consequences, that's how we weed out the crap from the productive. Recessions are a necessary part of a economy - it's an opportunity to clean out the crap.

I'm not as extreme as Ron Paul, but he summed it all up pretty well the other day in an interview:

"First, there is no authority in our constitution that we [Congress] should use taxpayer money to go and bailout companies that have not done well. That alone, should be enough to stop [the bailouts]. Second, it is morally wrong, because you have to take money from somebody who may be productive and reward people who have been non-productive. Third, the economics of [the bailout] are atrocious. Why should we subsidize mistakes? We have been doing that in the past. Our Federal Reserve System has created all the financial bubbles, and now we are suffering the consequences as these financial bubbles collapse. Propping up the mistakes made during the boom phase of the cycle is exactly the wrong thing to do. It prevents the correction [of the economy] and delays the inevitable. In order to get back to economic growth, you have to liquidate the excessive debts and bad investments. The only way you can do that is to just get out of the way. You cannot buy up all the bad debt, but that is what we are doing. This is exactly what we did in the Great Depression. So we are working real hard in the US Congress and with the Federal Reserve to recreate another Great Depression. It makes no sense, what so ever"

Michael Bendetson: Ron Paul Interview (http://www.huffingtonpost.com/michael-n-bendetson/ron-paul-interview_b_151073.html)

[Young Drachma]

Here's a thought I like more... (http://econlog.econlib.org/archives/2008/12/why_i_think_the.html)

Mark Zandi, chief economist at Moody’s Economy.com:

http://graphics8.nytimes.com/images/2008/12/12/business/zandi.2.jpg
“The package includes $300 billion in government spending and $200 billion in tax cuts. Government spending provides the largest economic bang for the buck, particularly infrastructure spending, as it immediately adds to output and jobs here in the U.S. Aid to state governments will also forestall immediate cuts in programs and jobs that states have to undertake to satisfy their balanced budget requirements. Infrastructure spending will take time to benefit the economy, and a tax cut is necessary to provide some quick support to the economy. A payroll tax holiday and a permanent payroll tax credit would be effective tax cuts, particularly if designed to help harder-pressed lower- and middle-income households and smaller businesses. If I had my druthers, however, the recovery package would be measurably larger than $500 billion. It is important for policy makers to send a strong and clear signal that they will do whatever is necessary to revive the economy. Only a concerted, comprehensive and consistent policy response stands between a severe recession and another depression.”