Skip to comments.Student Loans Entice Borrowers More for Cash Than a Degree
Posted on 03/03/2014 10:14:42 AM PST by reaganaut1
Some Americans caught in the weak job market are lining up for federal student aid, not for education that boosts their employment prospects but for the chance to take out low-cost loans, sometimes with little intention of getting a degree.
A number of factors are behind the growth in student debt. The soft jobs recovery and the emphasis on education have driven people to attain more schooling. But borrowing thousands in low-rate student loanswhich cover tuition, textbooks and a vague category known as living expenses, a figure determined by each individual schoolalso can be easier than getting a bank loan. The government performs no credit checks for most student loans.
College officials and federal watchdogs can't say exactly how much of the U.S.'s swelling $1.1 trillion in student-loan debt has gone to living expenses. But data and government reports indicate the phenomenon is real. The Education Department's inspector general warned last month that the rise of online education has led more students to borrow excessively for personal expenses. Its report said that among online programs at eight universities and colleges, non-education expenses such as rent, transportation and "miscellaneous" items made up more than half the costs covered by student aid.
The report also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time. The report pointed to possible factors such as fraud in addition to cases of people enrolling without serious intentions of getting a degree.
Capella Education Co., which runs online schools, examined student costs and debt at institutionspublic and privatein Minnesota and concluded that between a quarter and three-quarters of loans taken out by students were for non-education expenses.
(Excerpt) Read more at online.wsj.com ...
I seriously hope these students of worthless degrees, pursuing leisure and subjects of flight of fantasy eventually have to put up their time instead of credit and wealth as payment for services rendered.
I hope they are forced into involuntary servitude (at even the government’s inflated minimum wage) doling out EBT cards, processing SNAP (food stamp) applications, Section 8 housing voucher applications (to the point of INSPECTING the premises of those inhabitants who have been forced out), and so on.
It would do them good, seeing their erstwhile compatriot comrades ‘giving back’ to their GOVERNMENT. I hope they get enveloped by the entitlement sewage they and this government sustain.
The 'rich' are going to start being required to pay their 'fair share' of other people's student loan payments - which Obama figures is somewhere in the neighborhood of 100% of the total amount.
Financial aid is the new welfare.
Over the past several years, I’ve seen this borne out by the change in fin-aid office clientele, and in their subsequent classroom performance.
I know people who took trips to Europe on their student loan money. They will be in debt forever.
Back in the 90s, while I was in high school, they practically shoved “Student Aid” at us to fill out. I had no idea what I was doing and filled it out.
That first year of college I was horrified at the amount I had received (an actual physical check), and in today’s money it really wasn’t that much.
I swore that I would never again have a loan. It took forever to finish school, but I dont regret it one bit.
Hey kids, you gotta keep those professors RICH FOR LIFE.
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For many on student loans it's borrow and go to school, or sit and collect public assistance.
Student loans are just another way of masking a poor job market for the young.
This is morphing into another Federal welfare program that will be trillions in red ink and unsustainable.
Why surely, taken away the “cash”, and the enrollments will dip by 50 percent or more.
No, they probably know that all student loans are forgiven by the uninformed taxpayers ten years after they are contracted.
And those of us not in debt will pay it for them.
Can you post a link on that? All I read on FR is that these persist even thru bankruptcy.
Could you post a link to this? Thanks
Even without your hopes and wishes (which I share, BTW), they’re in a world of hurt doing this. Student loans cannot be discharged in Bankruptcy, they’re like child support. They may bloody well have to sweat it out.
I don’t believe that.