The Academic Bubble

[Buster]

So here the details on my wife's college loan we just researched on today. This is a different loan company from mine. She is not in the education field. She has an administrative position and makes more money than I do. She is also income based repayment plan on this particular loan which is one of her college loans. After 20 years of also meticulous payments, this particular loan is now at $55,000 total. In 1999, when she graduated college it was $46,000 total.

The interest rate on her loan is 5%. Listen I'm open to suggestions here. Aside from the opinion that we weren't worthy of receiving college loans because we aren't both aerospace engineers making $500,000 a year. Why are they going up? The numbers don't wash when you take into account the interest rate and the number of years we've paid on them.

This makes no sense unless your monthly payment is less than the monthly interest accrual. I would ask for an amortization schedule of your payments for the life of the loan to date.

 

[oneforthebus]

So here the details on my wife's college loan we just researched on today. This is a different loan company from mine. She is not in the education field. She has an administrative position and makes more money than I do. She is also income based repayment plan on this particular loan which is one of her college loans. After 20 years of also meticulous payments, this particular loan is now at $55,000 total. In 1999, when she graduated college it was $46,000 total.

The interest rate on her loan is 5%. Listen I'm open to suggestions here. Aside from the opinion that we weren't worthy of receiving college loans because we aren't both aerospace engineers making $500,000 a year. Why are they going up? The numbers don't wash when you take into account the interest rate and the number of years we've paid on them.

Anyone with a decent understanding of finance should be able to look at your loans and tell you that. That's not me...but I suspect it has something to do with consolidating your loans which probably resulted in a higher interest rate (they do that to make money, not for charity) and the fact that your income based payments are lower than the interest you're being charged.

My opinion is not that you are unworthy of student loans. My opinion is that it shouldn't cost $70,000 to earn degrees that qualify you for a job making 21,000. Obtaining that degree should not be that expensive. The reason it costs that much is because college tuition is being subsidized by the government with easy to obtain loans to people who will not be able to pay them back.

It's the same reason housing prices shot though the roof. Someone decided people with little ability to pay them back should be able to borrow huge sums of money to buy houses. The easy availability of credit drove housing prices through the roof, until it all came crashing down.

 

[MT~Forged]

Here is my take on this discussion.

I have no problem with the US of A Taxpayers funding student loans, for those attending STATE schools. The requirement should be that you then attend a JR College for the first 2 years, while completing core and prerequisite classes, finish at a State College. The interest should also be relatively low, let's say 2-3%. The whole premise is that a highly educated populace benefits the whole country, the interest would just bee to cover administrative expenses. There also will be no loan forgiveness from the Government, for ANY REASON.

Of course this does not address the problem with rising college costs, so it is just one piece of the puzzle.

 

[SteelChip]

Of course this does not address the problem with rising college costs, so it is just one piece of the puzzle.

That seems to be the crux of the problem to start with MT, the more Gov't subsidizes colleges the more they charge. I have mentioned before that almost all the major universities have billions in stashed endowment funds just sitting there doing nuthin' but tuitions keep rising every year.

We just added a couple youngin' to the family last couple years. I can't imagine how much their education will cost...especially if it's gunna be free.

 

[Badcat]

My opinion is not that you are unworthy of student loans. My opinion is that it shouldn't cost $70,000 to earn degrees that qualify you for a job making 21,000. Obtaining that degree should not be that expensive. The reason it costs that much is because college tuition is being subsidized by the government with easy to obtain loans to people who will not be able to pay them back.
.

It doesn't have to cost that much. My daughter wanted to go to a private university out of state at a cost of $45k per year for an Interior Design major. Average salary for that career is $40-50k. We sat down and did the math with her and she came to the understanding that having $1200 per month in student loan debt wasn't going to allow her to do much. She's at a State school and will graduate with about $15k of debt.

Just like everything else in life, you have to make good decisions.

 

[CharlesDavenport]

It doesn't have to cost that much. My daughter wanted to go to a private university out of state at a cost of $45k per year for an Interior Design major. Average salary for that career is $40-50k. We sat down and did the math with her and she came to the understanding that having $1200 per month in student loan debt wasn't going to allow her to do much. She's at a State school and will graduate with about $15k of debt.

Just like everything else in life, you have to make good decisions.

Here's the **** that doesn't make sense. What could you possibly need to study for four years at a university to be an interior designer? There is no reason other than predictable revenue that a lot of majors should be 4 years.

 

[oneforthebus]

Here's the **** that doesn't make sense. What could you possibly need to study for four years at a university to be an interior designer? There is no reason other than predictable revenue that a lot of majors should be 4 years.

Depends. If you're talking about an interior decorator, no you don't need any real education for that. If you're talking about an accredited interior designer it involves knowledge of construction methods, building codes, technical drawing etc. It's almost akin to an architecture degree.

 

[CharlesDavenport]

Depends. If you're talking about an interior decorator, no you don't need any real education for that. If you're talking about an accredited interior designer it involves knowledge of construction methods, building codes, technical drawing etc. It's almost akin to an architecture degree.

Fair enough, but I wasn't saying that real education wasn't needed. Just observing that most degrees are four years, and I don't think that's needed for all of them. I took a bunch of stupid electives along the way to an engineering degree. The premise of a well rounded degree has given way to a library of stupid courses taken only to fulfill the elective requirements. Some of the popular ones when I was in school were African American Studies, Horror Films, and Jazz Studies (harder than everyone expected). It's a joke. Most degrees could be done in 3, if not 2 years.

 

[Buster]

Here's the **** that doesn't make sense. What could you possibly need to study for four years at a university to be an interior designer? There is no reason other than predictable revenue that a lot of majors should be 4 years.

Biology, American Literature....all that stuff.