Skip to comments.Financial Illiteracy Exacerbates Student Loan Crisis
Posted on 06/27/2013 8:14:19 AM PDT by William Tell 2
NEW YORK (MainStreet)It seems that many students - and their parents - are wading into a miasma of college tuition financing they are ill-prepared to understand. All too anxious to start attending the college of their choice, indeed often the college of their dreams, students and parents know little about the terms of the loans they obtain for tuition.
One would have thought somewhere in all the high school honors courses and all those science and math courses SOMEBODY would have mentioned ...
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Democrats love illiteracy. Why do you think they imposed laws that made it illegal to teach slaves to read?
You sign on the dotted line, you abide by the contract. There is nothing obscured here.
They intend to be winning future elections with loan forgiveness proposals.
I'm starting to regret sending my son to college without taking out any loans. Between my savings and his scholarship he came out debt free. I should have just banked the money for him and let him default so he could have a seat on the soon to arrive gravytrain.
I don’t think this problem can be laid entirely at the feet of financial illiteracy. I think it is more a product of emotion winning out over reason. Not that people are financially literate, but even if they were, they would fall for the same old pitch that leads so many to ‘care’ more than think, to vote with their heart not their mind.
A high school grad should be able to read a credit card bill, and answer questions like this: If you pay the minimum, but continue to charge X dollars per month, what will the balance be in one year? They should be able to know how many years it will take to pay off a loan given a principal of x dollars, y% interest, and z monthly payments. If they can't do that, the high schools have failed to teach basic math and the student is certainly not ready for college level.
Math has nothing to do with it. When I signed on the dotted line in the early ‘80s, interest rates were 9%, though on a much smaller nugget.
Many, if not most, college bound students, ESPECIALLY those with decent grades or scores and positive reinfoecement from peers and family, irrational exuberance sets in regarding future earnings potential.
This tendency is stronger in those attending elite or selective high priced private universities, and the choice of major has little influence on it.
Student Loans subsidize ObamaCare
Obamas politically-motivated plan to help college students repay their loans
You are correct.
No that cannot happen.
Ah yes the self-reliant I am always responsible for my actions and no one else is argument. It is true to a certain extent but then again are all loans created equal fwdude?
If we cannot rely on the pledge of each other in a society, we are no longer society. Sorry, but I want to live in civilization.
By the way, I had to pay off ALL of my college loans, the bulk of my financing for my education, with interest. I did it under extreme hardship and deprivation, deferring many wants (and a lot of what people would call needs) for years so that I could honor my uninformed commitment, but a commitment nevertheless.
I was almost in default at times, and I paid the price with added late fees and a severe credit hit - all according to the contract that I signed. And I fully accept that.
“Wait...Obama promised me free s—t.”
Because they cannot be discharged in bankruptcy and the government is going after them.
I paid cash. Never took out a loan. Just worked during the day and went at night. I was more self-reliant.
Yesterday, I went to a local mart to buy some alcohol that was 10% off. I picked up five items, a bottle of tequila, bottle of whiskey, bottle of wine, and just for snicks, two of those pouches of instant marguarita. Five items totaling about $65.
10% off? She added 10% x 5 = %50 off! I had to argue with her. If I would have bought 10 items, would they be free? 100% right? How about 20 items? She'd owe me a bunch of cash, right?
This girl has graduated from high school and has had two years of college.
I think the student loan bubble will be the next big government cave in (after immigration). Law breakers and dead beats alike will get an Obama hug as he makes them citizens and forgives their student loans.