The truth about student loans

The truth about student loans.

Student Loans

This is an important issue. Seeing as how I have a lot of knowledge on the subject, I feel as though I should share my take on it. I should mention that I didn't bother to read the entire article. Didn't need to. I just would like to make a list of typical republican/regressive anecdotal stubborn rhetoric that I hear from people when I make the argument, and then thwart each mythological paternal points (nonsense) with facts and evidence. It seems to win every argument I've had thus so far, so why not?

Myth: You don't have to take on a bunch of student loan debt in order to attend school.

Wrong. Since the removal of the direct loan program in the 2000's, as well as ammendments to the higher education act of 1965, the burden of the cost of attending college has been shifted from the Gov't in the forms of scholarships, grants subsidies and other aid onto the student. It is common sense that we all know that no two individuals share the same experience. Different people from different walks of life will be awarded (or not) different opportunities at different times differently. Many people simply do not have the option to work their way through school, for various reasons. The cost of tuition has increased faster than healthcare costs. Knowing these things, it can, and should be accepted that for many people the ONLY way to attend college is to take out loans. Period.

Myth: Students have no intention of paying their loans back. They are lazy and do not want to get a job to pay off their loans.

Nope. This one gets used a lot, notably to justify removing bankruptcy protections from student loan borrowers. They did so out of fear that students would rack up the debt, graduate (or drop out) and immediately declare bankruptcy without ever planning on paying a penny for their loans. This however, was done by less than 1% of people at the time, yet standard consumer protections remain absent for student loan borrowers. There are countless stories for students working their way through school, and afterwards, not being able to pay off their loans. This is not because they don't make payments, it is because the lenders have been given the ability to hike interest rates to insane levels, so high that students end up paying only the interest. Little to no oversight into the industry (strategically done by the way) allows for this draconian way of punishing students who wanted to better themselves by getting an education.

Myth: If you don't want to be in debt, you should not take out the loans.

While there is truth to this on the surface level, one should not have to dig too deep to discover the root causes of why students find themselves in so much debt. Parents, older siblings, teachers, coaches, high school guidance counselors and other individuals in kids lives have been known to repeatedly instill the ethic of hard work into their kids. This ethic almost always includes rhetoric in the form of encouarging students to get an education, no matter what the cost. The decision to attend college is often made several years before signing onto a loan. Students scramble to finish high school, spend extraordinary amounts of time applying to schools (this does not include time spent applying for scholarships and grants, time spent preparing for SAT and ACT tests, whose scores get directly sent to schools looking for student tuition dollars, and time spent visiting college campuses). Deadlines incentivize students to quickly make choices where they will attend school (or if). How they are paying for college, what lenders will be used, and how the payment process works rarely factors into the decision when it's crunch time. Typically, college fairs at high schools consist only of college recruiters who aggressively push promotional materials onto students and their parents, and military recruiters; they are likely completely absent of alternatives to college such as trade/vocational school, apprenticeship programs, and other cheaper alternatives to school. Students sign on quickly, out of fear that if they do not, they will likely end up working low paying jobs for the rest of their lives. Seeing as how colleges collect ACT scores, round up data about students, spend thousands on marketing and say ANYTHING to get students to attend, it should be noted that colleges know more about students than they do about the colleges. This is only part of it, however totally worth mentioning.

Myth: You can do anything you want in this country. (This is part of the previous myth, so consider a sub-category if you will.)Students should consider embracing entreprenuerships instead. 1. A lot of people require formal training and education in order to make this happen. 2. It is insanely, INSANELY difficult to secure a start up loan in order to make this happen. Since today's expectations are much higher and require a 4 year degree for one to even have a CHANCE at securing a job that would pay enough to allow students to qualify for a start up it makes NO sense to say this. While alternatives to higher education are out there, many young students are simply unaware of them until it is too late.

Student loans are destroying this nation. Just recently, student loan debt surpassed credit card debt. Currently, it is sitting at 1.3 trillion dollars. Loans are non-dischargable in bankruptcy, carry unreasonably high interest rates (some reach about 18%) for the borrowers despite the low interest rates the lenders must pay to aquire them, and are hurting the economy and people's lives. The government is making billions on students defaulting on the loans because it is set up in such a way that they make more on students defaulting than students paying in good sted. The colleges are paid bribes to advertise "Preferred Lenders" to students, thereby not allowing for them to find a better deal, thereby making for little to almost NO competition in the industry. This all needs to change. We need to restore bankruptcy protections to borrowers of student loans. The forefathers such as Thomas Jefferson stated that 1. No person should be barred from obtaining an education by money and 2. We need to make changes and adaptations to industries throughout time as it calls for it.

I welcome anyone and everyone to share their thoughts. While I am respectful of people and would like to act like a mature adult, I will debate ANYONE about this ANY TIME.


Most Helpful Girl

  • I had over $80,000 in scholarships. I have $300,000 in student debt and climbing with interest each day.
    Not going to college was not an option. I was at the top of my high school class. I'm a brilliant individual. I'm the person you don't worry about failing because I'm always one of the best and make it all look easy. I would go to school and be successful. There was no other alternative. At one point though I considered going to culinary school. My 7th grade math teacher told me I would be wasting myself. When I looked at the salaries and job market for chefs I agreed.
    I finished school a year ago. I became a licensed attorney this year. I cannot find a job because I do not have the experience to find a job that pays enough for me to live on my own. So I live at my parents house so I can take a lower paying job. Those ones will not hire me because with my level of education they do not expect me to stay long term and thus I'm not a good investment for those employers.
    I have not worked since 2013. The loan companies wanted me to pay $2500 a month. I have negotiated with them and out of "the graciousness of their hearts" I pay $750 a month and have the last 8 months. Seems good until you remember I've had no income in 2 years.

    I agree with EVERYTHING you say. I didn't go to school because it was fun. I went to school because I wanted to find a career and be a productive member of society. I wanted to pay taxes and buy things and do good for society and the economy.
    My schooling and the debt it accumulated is preventing me from being that person.

    • It's a systemic vice squeezing the life out of millions, especially those among the millenial generation. I hope things get better for you and I am truly sorry for your situation. Perhaps congress and a new president can tackle this thing head on instead of ducking the problem again.

Most Helpful Guy

  • While there is a lot of truth to this, there is also a lot of abuse.

    I can't tell you how many people I know who went to college, who went out drinking every weekend to the local bar, who took ski vacations, Spring Break vacations, bought every Xbox and Playstation game they desired, bought whole new wardrobes twice a year, etc., and they did this by getting student loans. Many took 5-6 years to graduate, and few had a job of any kind at any time during their college years.

    Well, guess what? Now you're $200-300k in debt because you CHOSE to get "easy money" via student loans. Many of these people WOULD have defaulted and declared bankruptcy had that been an option.

    I also know a number of people who have been in college for 12+ years, getting multiple degrees, to put off having to join the workforce and having to start paying their student loans. They didn't go to school to get a degree for a specific job - they went to school to escape from adulthood and responsibility. These people simply could never have afforded to do this if it wasn't for easy student loan money - but THEY chose to take it and stay in school forever, and it's not right that they should be able to declare bankruptcy and drop all that expense on the rest of us.

    in my opinion, student loans should be limited to 10% above tuition costs, which means that almost no one could pay for college JUST with student loans - they'd either need a job or they'd need other financial support to attend college. THAT would help focus a lot more people on a goal-oriented education path vs. an escape-based path, and it would keep most people's loans realistic.

    Still, at the end of the day, having the OPPORTUNITY to make colossally stupid decisions doesn't mean you have to make them, nor does it mean that you should be insulated from the consequences. But society should do a better job in educating people about money management overall - a subject that VERY few people seem to have any interest in teaching (and few actually understand how it works in the first place).

    • I don't totally disagree with you here. A lot of people make terrible decisions, and should not get bailed out for them in any way. I do think we should consider visiting a process that would weed out people like this academically instead of allowing them to take more and more loans frivolously (in other words, GPA should have to remain at a certain level for them to continue school). It should also be noted that many lenders will give out loans to people who have no business taking them out. When this happened in the housing industry, the entire stock market crashed.
      However, my point is that Sallie Mae made horrific choices that were and still are illegal and got a pass for it. If students and taxpayers must be punished for bad choices, why shouldn't large powerful corporations?

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What Girls Said 5

  • I agree with everything you said right now I owe on student loans. I had 2 grants, a loan, and out of pocket expenses. I went to school full time commuting by public transportation to and from there most of the time and that was 2 hours to get there and back home. I was threatened to get kicked out of school for not paying my out of pocket expenses twice but I think they trying to just scare me into giving them money that I didn't have. After graduation I had my degree withheld I could only get a transcript, what good would that be to employers? They don't want to see that. During the last few months of college I had unpaid internship and not only that I was not able to use the company I worked for as a reference since they did not consider me an employee the only good thing that came out of it was the fact that my field of study was graphic design so I had my work to show for it (which I had a dispute with the company about) but as far as getting my head through the door at a company they still wanted real world experience and clients. All of us grads were trying to get jobs at the same time and I was not one of the lucky ones. I found a job at a small business that designs t-shirts. I was subjected to harsh work conditions, sexual harassment, and I was being underpaid less than minimum wage. I didn't get any sympathy from people that I complained to instead I was told that I should be grateful for my first job out of college. I didn't go to college for this and it wasn't right I also did not feel like I was gaining relevant experience there. I left after working there for one month and I had a few clients from there so I have been freelancing since then. It's been hard so I have had other jobs as well. Between paying bills and insurance and paying loans my bills and insurance will get paid first. When I look for jobs available I have applied and some require more experience or more degrees which means more school and more loans. NO thanks lol. I have had forbearance and deferment but I'm back on track now. People make it seem like its so simple to just go to college, get a good job, pay student loans, climb the career adder and you'll be debt free lol. Every situation is different like you said. I know a lot of people who had to drop out of college to save money or can't go back because of loans debt and they can't get any grants. Good grades are not always enough also.

    • I love how people say that when you take an unpaid internship, you should be grateful because they are paying you with experience. Yet in your case, you found it to be a door closer instead of a door opener. Had you have known that before, you never would have taken it. It becomes an experience catch 22 for our generation. You don't have enough experience, yet how much experience you can possibly gain is something you really have no control over beyond just applications.
      The person I have been arguing with likes to take the personal responsibility approach and blame the borrowers. Well if the borrowers get advice from career counselors, polish up their resumes and cover letters, volunteer, send out applications and expand their horizons, I think they have fulfilled their end of the bargain. It is not always their fault they cannot find work in alignment with their salary expectations. The student loan dilemma is exacerbated by a bad job market. I truly hope things get better for you.

    • Thank you :) With internships employers are getting free labor in my opinion. I have also seen that employers are requiring too much for too little pay. I don't know about other fields but many job ads that I have come across will have 2 or three different things compiled into one such graphic designer/web designer/3d animation each of those things require extensive knowledge. If you find a person that does 2 out of 3 there most likely will be lacking in one of those areas. Either the employer is not really knowledge about what each of those skills require ore they are trying to save money and if they happen to find someone who claims they can do everything under the sun they are only hurting themselves in the long run. I am finding that it is even hard for anyone to get a minimum wage job at a fast food restaurant these days people are not willing to train even if they know they need the help. Loans are often the last thing taken care of because of the cost of living

    • It's truly awful. Hopefully the words of truth-speakers like Robert Reich, Bernie Sanders and Elizabeth Warren will resonate across this nation and get through to congress and other elected officials. Hopefully we will start to see that you cannot put a vice onto hard working people by stagnant wages, indebted servitude and irresponsible financial decisions (on the part of big banks)-all while elderly people are living longer and need adequate health care and soldiers returning from the wars (they start) need to be taken care of.
      It's not a democracy, its a plutocracy. But the people need to speak up and demand that it become the former instead of the latter.

  • You couldn't have said it any better. I applied for university the year the tuition fees shot up, I felt unlucky at the time but now for next year's students they're making the maintenance loan, which currently does not need to be repaid, required to be repaid. Now I realise I'm luckier than next year's students, that's a good £18k of my loan I don't have to repay but they do. It's all fine and dandy to be studying now but I can never help thinking about the lingering fact that after I graduate I now have this hefty debt to pay for the rest of my life unless I leave my country and never come back. It's pretty hard to job-hunt and not have a degree. My mother is working an entry level job even though she's at managerial position because she doesn't have a degree and she doesn't want the debts of a loan to get one especially tuition was free when she was younger.

    • What country are you from?

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    • I hear they are suffering from underemployment and student debt as well. We should seriously consider examining countries like Germany, who offer free education as long as the students work hard.
      In our countries, the students work hard, and pay harder. Then this is exacerbated by a dismal job market because many of the jobs get outsourced for cheap labor.

    • Canada hikes up their tuition by $1000 each year (idk if they stopped yet), it's ridiculous

  • I <3 this. I'm surprised this type of info would be on a a site like this.

  • Well, that's why I am glad that I can make an apprenticeship, then find a good job for 60-80% and study for my next degree...

    I used to want to live in the USA because of the colleges... now, I am glad, I am not. This all sounds pretty harsh for somebody like me.

  • What scared me the most was in high school, when my 60ish year old English teacher told us that he was still paying off his student loans to this day.

    I remember thinking I didn't want to be like that.

    But in a way, it was inevitable.


What Guys Said 9

  • "Myth: You don't have to take on a bunch of student loan debt in order to attend school. "

    That's not a myth, it's true. You do not need to take out a loan to attend school. The increase in costs doesn't change anything. It can still be done. It might have to be delayed and planned ahead of time, but most people can do it. That's not saying there are no exceptions. But I don't think a loan is the first thing that should come to mind when it comes to higher education. There are many alternatives, including not going at all.

    "Myth: If you don't want to be in debt, you should not take out the loans."

    Again that's not a myth, it's true. It's quite simple, if you can't afford something then don't do it. While I agree with much of what you said about this, you didn't address the issue. You basically said that peer pressure and lack of information forces someone to take out a loan. Instead of saying that it's a myth, you should be saying that it's true. You should be countering the pressure and lack of information. You are simply playing into an existing problem.

    Society places too much importance on formal education. I fight against that. I'm not saying that education isn't important. I'm just saying that it's not the answer to everything, as many would have us believe. I'll go as far as saying that undue importance placed on higher education is economically dangerous. As a society, we are becoming over educated. It's akin to placing all your eggs in one basket.

    As to entrepreneurship, it's much easier and cheaper than many believe. As a matter of fact it can be completely free. Service businesses are usually the cheapest and easiest way to go into business. It requires one person who has something to offer. Very often simply having two hands is all that's needed.

    • But none of this was mentioned to me at a young age by anyone.
      Business was not taught in high school.
      The entire environment in which I grew up in consisted of unanimous agreement that a college degree was a one way ticket to success.
      Formal education will eventually collapse unless colleges offer more real work experience and overall value to their programs and degrees. But that isn't going to happen overnight.

    • And as such a business-minded individual, it would be complete hypocrisy to disagree with the point that bankruptcy should be a right afforded to student loan borrowers.
      Even conservative republicans will admit that rigging the industry to unfairly position yourself into success without playing by the rules is morally outrageous.

  • So let me summarize it:

    If you want to study, you'll have to dig a deep amount of debts, which you can not repay afterwards.
    If you don't want to study, you'll be free of debts but you still don't make enough for living decently.

    Conclusion: Life sucks.

  • Student loans are:
    (1.) Really freaking easy to get, and the poorer you are the more they'll offer you.
    (2.) Really easy to pay off, you don't own a DIME back until you graduate or drop out, and you have many, may years to pay them back and build up good credit. The point of getting an education is so you'll get a real job. How much does it cost to go to college? Like, $80k-$100k for 4 years? Get a degree, find a good job that starts off paying $60k-$90k a year, and paying off those loans won't even take 5 years.

    Overall, do I LIKE that college has gotten so expensive? No, and loans are part of the reason to blame for that. However, treating them as a killer is stupid.

    • Wrong. Student loans are offered to people they often know will not be able to pay them off. There is no sliding scale (charging my major), or any other pricing structure put in place at all except for ones that purely benefit the lenders, colleges and even the government. The Gov't actually stands to make about 70 billion the next fiscal year in defaulted student loans. Not acknowledging real facts only leads to further perpetuation of this horrifically broken student loan industry. The people need to be fully aware of this and they need to expect CONGRESS to change this. The borrowers should speak out against it.

    • You sound like a right winger.
      Well guess what? Bankruptcy is considered a fiscally conservative measure in any borrowing industry. Student loan borrowers should have the same right to declare bankruptcy as any other type of customer.

  • I disagree on about having to take on debt to go to school. We're not talking about a house here. I refuse to go into debt over something that I do not need. Live at home with mom and dad, work for one year full time and save your money to pay for school. It's what I did, and I had no debt because of it. Best choice I could have made.

    By taking on debt to go to school, you are taking a risk. The reward being a higher wage; However, if it doesn't lead to a higher wage have fun paying it off. People knowingly do this without thinking of the what ifs and then complain when the what ifs happen. Sorry! That's not how life works, that's not being an adult. Thing are going to work out differently than what you expect. It's the debtors job to plan for worst case scenarios. I think that a lot of people who took on debt to go to school did so blindly. When things didn't turn out the way they thought, they do what any irresponsible person would do. Blame something else for your own mistakes.

    • Again,
      Congress made the mistake of taking away basic consumer protections from student loan debt-borrowers. It is not a problem stemming from bad borrowers, it is a problem stemming from bad lenders. Many students are not able to pay for school by working full time for one year (unless you are talking about some kind of super accelerated associate's program at a community college).
      The problem is, 17 and 18 year olds are influenced by high school guidance counselors, parents, teachers and coaches to attend college. They are often told that it is a worthy investment that will pay off later. They do not have future fiscal decision-making on their minds. Yet promotional materials are pushed heavily onto them during crunch time when they must make a tough life choice. At one point, we seemed to push the age of adulthood from 21 down to 18, an age where students have other things on their mind.

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    • 1. The majority of individuals have too much honesty and integrity to do so.
      2. In no other credit source do lenders hand out so much money to so many people. The student loan industry devised a specific scheme in which they risked nothing, and we risked everything. If I were to try to borrow $27,000 for a year of school from another source, I would not qualify because the lenders would actually be risking money in that situation.

    • Removing bankruptcy protections was predicated under the assumption that students would take out loans, then declare bankruptcy with no intentions of paying them off. In reality, less than 1% of people did that. I suspect there were other motivations.

  • And people are wondering why there are so many escorts and sugar babies running around. They are popping up like mushrooms and these people are graduating debt free with possibly extra (connections, employments, capital... etc).

  • I don't understand the problem. If you want to invest in yourself to make more money then your going to have to pay money. If you don't have the money for investment then you will need a loan and take the risk that the investment you are making is going to pay off the loan and make you future money.
    People that continue to suffer from debt are ones that usually made poor choices like, choosing gender studies or history major, or getting another loan for something.

    I'm going to have about 75k (plus interest of another 8k) and i don't have a single problem with that.
    You pay for the service you get. College have actually gotten more expensive due to subsidies from government since the only way they could have applied is by making the college more expensive.
    Either way college should cost you about 1-2 years of your projected yearly salary.

    • Nope. College has gotten more expensive for the following reasons:
      1. Taking on costs they do not need. This happens mainly in the form of fancy recreational facilities, quads, projector televisions, swimming pools, lazy rivers, etc... Studies also show that they spend a ton on marketing and promotional materials, as well as over payed administrative salaries.
      2. Professors are spending an average of about 4 less hours teaching in the classroom. No pressure being put on them to provide quality in education takes away incentive for them to produce. It's the opposite of many market demands such as flat screen televisions. They have gotten better in terms of quality AND more affordable. Colleges, due to the aforementioned laziness, have gotten far more expensive and worse.
      Finally, I don't think the majority of 18 year olds fully realized what a risk it was they were in for. It's predatory.

    • Might I add, there are other forces at play in terms of tuition raises. Colleges have become so business-minded, that they have adopted the "Prestige" mentality in order to attract more tuition dollars. Since they spend so much collecting information (SAT and ACT scores) on students with high aptitudes, they are able to pull in quality students with let's all admit it, affluent and rich parents.
      Furthermore, it has been recognized that rankings get affected when it comes to student GPA's and ACT and SAT scores. So what colleges do is accept students from the low end and put them on a wait list. That way, others can only see the data on high achieving students, instead of getting the whole picture.

  • You will receive no debate from me, student loans are the most evil device that inflicts young students today. True maybe Med Students can get away with it because they have such a high first year salary. However overall they are a bad investment. Also scholarships these days are based entirely on test scores so every student should focus their time on the SAT's/ ACT's

  • I regret going to college in terms for going to get a job. Where I work now will likely be where I work when I graduate and I did not need a college degree to get it. I love the parts of college where I met my best friend, I had great experiences but I learned nothing that will help me make money. As an investment college is a huge fail. The only little bit of help it is giving me is connections through a club I am in but the actually classes were/are useless.

    • A lot of other op owners here would say that it is your own fault. I whole heartedly disagree with them.

  • People need to do what I did. Not be a turd in high school get good grades and have an academic full ride scholarship. They are easy to get at local in state colleges if you aren't an idiot in high school.

    • As I mentioned, scholarships, grants and other kinds of aid have been eroded over the past few years. While it is important to work hard, effort made by students will not solve this problem. Only returning bankruptcy protection. You will never get everyone to position themselves in the way you mentioned, and even if you did, schools would not offer free rides to everyone. That is just not going to happen.

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    • "Don't use Sallie Mae. Once again it's peoples poor choices. Never go to places that hand out loans to anyone, people who think there are no catches to places like that are gonna have a rough life no matter what if they lack the common sense to wonder why they can get a loan if they have terrible credit. The whole point of credit is to weed out people that are crapped financially. If all lenders gave loans to anyone and everyone the whole concept of credit wouldn't exist."
      1. Sallie Mae (Now Navient) is notoriously the nation's leading student loan "servicer". As I mentioned, Sallie Mae had former exec's work within the Department of Ed, who then gave them leverage to manipulate legislation for THEIR interest. Beyond this, up until 2007, Sallie Mae literally bribed student aid officers in colleges to advertise them as "Preferred Lenders" to students. Students had little to no choice in who to chose as their lender.

    • You haphazardly assume all industries involving credit operate the same way, when in fact they do not.
      Guess which industry is the ONLY one that doesn't allow bankruptcy protections for borrowing?
      Student Loan industry.
      There is no other industry with borrowing where the money is guaranteed, regardless of how bad the person's credit is, accept the SLI. Why would the system be set up that way? Because the lenders, colleges and the Gov't make money on people defaulting, not paying them on time.
      You are generalizing a concept that has specific complexities stemming from origins from 40 years ago. It simply cannot be simplified about a conversation about credit.