What Now -- Student Lenders Stealing Food from Borrowers?

Business & Media Institute ^ | Jeff Poor

[rednesss]

There is something to be said about the graph that tracks the cost of attendance with the amount of financial aid available side by side.

[kalee]

Where do they get that kind of money? Who loans it?
Why would anyone borrow that much and what parent wouldn’t talk their child out of doing so?

[AndyJackson]

The only question is which is cause and which is effect.

[weegee]

And what of the high tech degree jobs for engineers? Who see their paychecks in competition with cheaper H-1B Visa applicants courtesy of Bill Gates (D-Billionaire)?

An education is an investment in your future. Sometimes that investment is undercut by shady business practices.

But the schools get their money either way.

[weegee]

You might knock $10,000 off that if you are in state.

Or an illegal immigrant in some states. The courts should strike down this discrepancy for "in-state/out of state" tuition where the "third way" exception exists. It is nothing more than selective discrimination.

[rednesss]

Causation vs. Correlation.

[rednesss]

They don’t, see post #19.

[ridesthemiles]

She applied for the loan.
She attended the school(s).
She now has a job and doesn’t understand why she has to pay the money back per agreement?
If I take out a $4000/month house loan on a Soc Sec check of $960, and then don’t want to pay the money back, May I do that???????

[JoeSixPack1]

What am I missing here?

Students don’t pay off or even make payments for school loans until they drop below ‘full time student’ status, so how can she have any payment at all?

[JoeSixPack1]

oops, ok, she graduated.

[kilohertz]

Of course there’s a positive feedback problem : high tuition causes whining about high tuition, which pushes the government to increase subsidies, either as direct subsidies or low-interest loans ... and more money available allows colleges to raise tuition even higher.

[bvw]

Yes. The lender was an idiot. The both of you (the hypothetical you of the example) were idiots.

Now both of you can pay me, the debt collector. I'll take my percentage from both idiots.

[hunter112]

A 4 year degree costs $120K - $200K these days. The mortgage on that is $1200 per month.

Then, if you're paying the costs yourself (either as you go, daddy's wallet, or student loans) then you damn well better be studying something that pays off.

The state paid for me to get a two year degree in network administration that is practically worthless. I should have gone for the nursing program, instead.

[rabscuttle385]

There's a plus to the University of Virginia that you didn't mention: they have a very large endowment. Financial aid is centered around the AccessUVA program, which replaces loans with grants for students whose families have annual incomes of $40K or less. In addition, I could not find another major University in the Mid-Atlantic area that met 100% of demonstrated need for every student who applied for financial aid.

That said, I can only surmise that the young lady in the story did not finish school (explains her salary) and borrowed far too much in private loans (which have no interest rate cap, except for bankruptcy purposes, they are treated essentially the same as federal loans, i.e., you can not default on them).

Basically, with a private loan, you are at the complete mercy of the lender. Advice for other Freepers is to make sure the only loans your families take out are Federal Student Loans through FFEL or Direct (whichever program the school supports) with capped interest rates.

[rabscuttle385]

She’s on private loans...those are a totally new ball game.

[rabscuttle385]

That's why I'm studying Computer Science, with a heavy dose of Applied Mathematics, and a side of economics and business courses.

Very profitable here in Northern Va., and I actually enjoy what I'm studying, to boot.

[rabscuttle385]

PLUS is only nominally based on creditworthiness, since the Feds guarantee PLUS too. Basically the lender only checks for derogatory things like bankruptcies.

If the parent does not qualify for PLUS due to credit, the Stafford limits for the student are increased.

[hunter112]

Expect to be asked to have five years experience with software that's only been out for four years.

The Pakis and such being imported in here on H-1B visas are really making things rough.

[rabscuttle385]

I don't think it's that terrible, at least, not here in Northern Virginia. Programming and software engineering are not the same thing. We import folks to do the programming and some of the software engineering, but not all of it.

Regardless, I'm not aiming to spend my life writing software. There are better things to (from my perspective) like designing and maintaining networks, database management, content management systems, and security.

There's plenty of decent tech jobs here in Northern Virginia, especially with the government around, and they have jobs that can't be outsourced.

[hunter112]

Sounds like you live in the right part of the country! I knew there were plenty of networkers around in WA state, but I figured I’d be in a bit more demand here in NY.