What do you think should be done to fix America's student loan crisis?
What do you think should be done first to try to alleviate this huge problem? Is anyone in particular to blame?
This is a tough one, and it may be one of the few things that I believe the government should step in and fix. Who is to blame? I'm not sure blame is a worthwhile activity. I want solutions. Colleges need to reform, and if they won't do it by themselves then the government needs to regulate. Students need to reform; not everyone needs a college education and not everyone should be trying to get one. Trade schools are infinitely less expensive and we always need people in the trades.
I personally would like to see every high schools senior required to do service work for this country, and while doing that they can earn college credits or college tuition.
But what do I know?
Excellent, Bill. While blame should not exactly be the top priority, it is important to go straight to the source of it. And you answered it by saying colleges need to reform - and if not, the government should regulate. And yes, service for seniors.
Hey, Bill. In my city, all kids do have to do a substantial number of service work hours to graduate H.S., but with no college credit. It's just a flat requirement. College credit would be nice, tho.
The US has a loan system right? Treating education as a business has always puzzled for some reason. I can see the point in paying for health care but an education? Surely that's a basic right and should take priority;it ought to come way above spending on the military let's say for example.
In the UK we've had a loan system for a generation or so. I think we'll end up down the same road as you Americans - with an enormous dammed up debt pile? And little means to sponsor education for future generations, especially at a higher level.
To think, when I went to university in the 1970's (showing my age!) my local government PAID ME to go and learn. They gave me a grant which I did not have to pay back. That was normal back in those days.
My son will be getting loans for the next three years for uni education. When he gets his degree and a job he'll start repaying it only if his salary is 21,000£ or above.
I think governments should start to negotiate a sort of a tax on each and every citizen (I KNOW, THAT IDEA SUCKS!) but I'd be willing to pay a little if it meant kids from all backgrounds could be given a decent education.
What's the biggest issue in the US?
This problem cannot be fixed by doing more of what built it. It was easy access to other people's money and the illusion a college degree per se is a ticket to success that created this debt crisis and transformed universities into just another sort of big business. Getting past it requires correcting those corrupting public vices. The solution, then, is two-fold: stop subsidizing student loans with public funds, and start telling the truth about what it takes to earn one's way in a competitive economy. Until there is a will to be collectively honest with ourselves about the unintended consequences of policies that are well meant but fatally flawed due to their basis in fantasies about the real world and how it works, problems such as this one will only grow and fester.
Considering that what 67 % of kids graduate high school , and only fifty percent of college kids actually graduate ,with a degree ..! Somethings wrong in the system , entitlements ? Spoiled kids ? The moneys have been too easy to aquire perhaps .
College should become cheaper. Honestly. If you go back 30 years to 1983 and adjust for inflation, a 4 year degree was 3 times cheaper than it is now. That's after adjusting for inflation. It's ironic that in an age when the ability to be self-educated is at an all time high, college degrees are also at an all time high. Thank God for community college
Benj, you pointed out something that I don't think many people realize! This is the information age - the internet is a knowledge haven! But, without education, would the internet be as powerful? As full of data?
I bet you're right about that. That's an interesting quandary. Never thought about it like that before.
The answer to the problem is to stop giving out money so easily. College is a business like any other. Universities know full well that students have the ability to borrow large sums of money with little to no collateral. At one time loans were subsidized by the gov't through the banks. Now the money is dispersed directly by the Federal Gov't. As a result, the price of education is rising rapidly in contrast to baseline inflation. Imagine for a moment that all funding for students loans stopped. Student enrollment subsequently drops. Do universities suddenly say, "well...we had a nice run, let's start closing the doors". Hardly...they will lower costs and manage expenses to accommodate demand, like any other business does. My kids go to private school at the grade school level. They are able to provide just as an advanced curriculum, if not more so on a much smaller budget per student than the public school gets in funding. It's amazing how efficient you can be with your budget when you have to be.
Today we have a society, where we have allowed so much leverage in the educational system, that we produced an overabundance of MBA's that can't find a job and have a ton of debt on their backs. But the trades are short staffed. We a running low in electricians, plumbers and other specialty trades. They are now recruiting from overseas into the trade unions. Part of that is that some Americans are a bit spoiled and don't wish to get their hands dirty. But for the most part, this is just a huge market distortion that the Gov't has created. And it means you pay more for education, and more to have a quality plumber do some work, because we have shortages. And it is now a 1 trillion dollar national student loan debt problem as well.
If you want to understand the mindset of the people that run the educational system, just imagine the way your personal industry is run. If you're in the in-ground swimming pool business, and the gov't and society deems everyone should have access to swimming pools. And subsequently, the gov't extends easy, nearly unlimited credit and grants to install swimming pools. You'd have a ton of excess demand at which you could charge enormous rates, and raise them year over year faster than other products and services. Why wouldn't you ???
Many companies already pay for advanced training for their employees. If we stopped all of this easy credit, I wouldn't be surprised if corporations and other industries picked up the tap right out of HS in return for a certain number of years of service, which would probably provide valuable training, and force people to focus on the field of study more clearly.
Hi everyone, I used to work for a bankruptcy office and have seen this problem first-hand all too many times. For those that don't know, student loans are 'non-dischargeable' in bankruptcy, meaning even after bankruptcy you owe them, and your creditors have you on the hook for 10-25 years regardless.
2 problems and solution (multi-step):
1. The government needs to stop handing out student loans like candy. While the interest rates are relatively low for borrowing, it gives the educational system no reason to keep prices down (as you wouldn't expect them to, since they are encouraged to run like any business for profit.)
2. Loans should have the viability of repayment/assets of the borrower weighed before they are doled out, just like car loans, home loans, etc. Does this mean every student will not be able to have a chance to go to the college of their choice due to possible financial reasons or refusal of loans? Yes, but this is the way the system should have been from the start. The reason we are in a financial crisis in the first place is because people that really can't afford over-inflated school costs are not vetted for viability of repayment the same way as other loans...they are just told to sign on the dotted line if they want to go to college. Currently, why would lenders need to weigh the risk of your repayment when they know you can't even escape it in bankruptcy? There's the big problem. You should be going to a smaller school/trade school if that's truly all you can afford without a substantial loan that is outside of your payment viability.
Answer: Student loans should be made dischargeable in bankruptcy, on a non-retroactive basis (meaning those already with the loans cannot discharge them). What this will do is end this cycle of financial ruin. If you said from this date, that any loan doled out would be dischargeable in bankruptcy, the lenders would AUTOMATICALLY start weighing the risk of repayment and give borrowers only the money that they should be able to take on as debt financially. What happens to the current loan holders that can't be discharged? Yes, the current generation, including me, gets shafted. But then again, you can't penalize the lenders and make loans dischargeable when they only handed out those loans like candy because of a flaw in the legality of the lending system. What it would ensure is that future generations don't end up in the same debt position- and less money being doled out would bring the cost of education down,as they acclimate.
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