Student Loan sob story of the day
-
-
I’m actually going to defend her a little. She did everything the right way for her bachelors. She got some credits at a community college, she worked and paid for parts of her tuition, and she graduated only $18K in debt.
Going through this now with Lucas, I can tell you that there are some serious flaws in the Sallie Mae portals and programs.
First and foremost, they don’t present you with an amortization schedule anywhere and when you set up your repayment plans, they present you with three options, none of which covers your interest. You have to override their options and set up your own payment amount. The system is set up to promote capitalization, not prevent it.
Second, normal loan contracts are required to show you the overall costs of your loan, based on the payment selected, the interest rates, and making the monthly payment on time. There’s a little area called the fed box that details all of these. Not so on with college loans. There is nothing showing these kids how much that $20K in loans will really cost them over 10 or even 20 years. Of course they don’t, because they are allowed to set up the repayment plans at payments that will never pay off these loans.
Third, they spam these kids to death. Between our contributions and Luke’s own contributions, his loan amounts aren’t very high, but he (and I as the co-signer) gets spam emails from Sallie Mae EVERY SINGLE DAY telling him that there are left over funds that he could take out to cover anything from books to travel expenses… This is Sallie Mae, the governments preferred student loan site, with some very predatory loan practices.
If I weren’t there helping Lucas with this, and had some knowledge about loans and financing, then he could have quickly get buried… A lot of these kids and families don’t have that, and have been abused by the government endorsed program.
-
I agree.
And to dovetail off of that...We are doing a horrible job at the high school level educating kids about financial matters. Budgeting, credit, saving, investing, rudimentary cost/benefit thinking, etc.
The subject matter would be beneficial for all.
“Cry havoc and let slip the DOGE of war!”
Those who cheered as J-6 American prisoners were locked in solitary for 18 months without trial, now suddenly fight tooth and nail for foreign terrorists’ "due process". — Buck Sexton
-
Now, on to this young lady, her mistakes began with going for the graduate degree.
-
Was a graduate degree truly necessary for her career goals? It doesn’t seem like it to me.
-
If it was necessary, was it necessary for her to go to a “dream school” with a sky high tuition? And what was going to be her estimated salary at the end?
-
Dehydration? The number one reason college aged kids get dehydrated to the point of needing hospitalization usually goes back to alcohol.
-
She graduated with a Masters Degree then took a low paying job so she could get loan forgiveness? Instead of taking a job that paid $30-$40K more per year and she could Polly off the loans in 10 years? Idiot.
-
-
I agree.
And to dovetail off of that...We are doing a horrible job at the high school level educating kids about financial matters. Budgeting, credit, saving, investing, rudimentary cost/benefit thinking, etc.
The subject matter would be beneficial for all.
@Jolly said in Student Loan sob story of the day:
I agree.
And to dovetail off of that...We are doing a horrible job at the high school level educating kids about financial matters. Budgeting, credit, saving, investing, rudimentary cost/benefit thinking, etc.
The subject matter would be beneficial for all.
It would indeed. Teaching both financial management and the career/financial lifecycle based on income would really help kids.
-
Good points LD which is why I’ve always been against treating this problem symptomatically. There needs to be some external discipline imposed on the universities and funding sources so they are disincentivized to create more cases like this.
"You never know what worse luck your bad luck has saved you from."
-Cormac McCarthy -
Good points LD which is why I’ve always been against treating this problem symptomatically. There needs to be some external discipline imposed on the universities and funding sources so they are disincentivized to create more cases like this.
A cynic would say that the primary goal of many universities appears to be making money, rather than providing a public service. Obviously, we don't have any cynics here, which is why I felt the need to point it out.
When we toured colleges with my son, I was really taken aback by how much things had changed, or at least how different things were compared to my experience in the UK in the 80's. Even the State schools seemed to be monstrous pits of luxurious living.
-
Good points LD which is why I’ve always been against treating this problem symptomatically. There needs to be some external discipline imposed on the universities and funding sources so they are disincentivized to create more cases like this.
@jon-nyc said in Student Loan sob story of the day:
Good points LD which is why I’ve always been against treating this problem symptomatically. There needs to be some external discipline imposed on the universities and funding sources so they are disincentivized to create more cases like this.
This.
-
-
Student Debt needs to be dischargeable in bankruptcy. Make lenders actually have to start determining credit worthiness before just giving loans to everybody at high interest rates. This will also make s lot of students have to look at more realistic and probably better situations for themselves. Trade schools, 2 years of Community College, etc… This will also force universities to be more competitive for students and instructors.
-
Put the same requirements onto student loans as you require for any FDIC Approved Lenders for commercial credit. Simple Interest, no Capitalization or no Capitalization that takes you above the original loan request plus 10% one time. Payment options should START at interest repayment. If your monthly interest accrual is $70, then that’s your minimum repayment option. Deferred payments till graduation? That’s no longer the default, that’s a feature that you need to apply for and approval should be on strict standards. The payment portals should be required to show the Fed Box and readily accessible amortization figures.
-
Pell Grants need to be accessible ONLY for 2 year community colleges and trade schools to start unless the student can show scholarships that will cover the rest of tuition and housing. Students in the income bracket to receive Pell Grants generally aren’t going to have the financial resources necessary to support them at a 4 year institution and will be far more likely to get truly behind and victimized in the Student Loan racket. Once 2 years of Community College and/or Trade School is successfully completed, the Pell Grants can be used towards a 4 year degree.
-
Student Loans are a one time approval and NOT an open line of credit. Funds can only be used for tuition, campus approved housing, and fees assessed prior to the academic year.
-
Schools accepting student loans should be required to provide fiscal counselors in addition to an academic counselor. Work with the students on their projected academic path, costs associated, and projected salaries… Public High Schools should add an actual financial preparation class that is a requirement for students in the college prep or stem tracks in HS.
-
For those existing in substantial student debt now, put a cap on total payback at a no capitalization, 10% APR on the original loan request. If they’ve already paid it off, the balance is forgiven. This can only be on Federal Direct or Subsidized Loans.
-
