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No Income? No Problem! How the Gov’t Is Saddling Parents with College Loans They Can’t Afford

As college costs continue to climb, families are turning to federal Parent Plus loans to fill the gap. But with no checks on their ability to repay, many parents are left overburdened, and others set up for failure.

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John

Oct. 9, 2012, 9:49 a.m.

John, the reason there’s more of a focus on the East Coast schools is because there aren’t any “correct” West Coast schools.  Elites flow into the Eastern, liberal arts Ivies from their prep school feeders (Exeter, Hotchkiss, Phillips, and about twenty others) in the area.

I don’t believe this is evidence of some deep conspiracy (though feel free to take it that way, since that’s an acceptable conclusion), but given that politicians are very unlikely to believe, by their natures, that people different than them would be just as good at the job, the current generation is going to try to mentor people who resemble their histories, meaning they go back to their own schools.

So, you might find a better environment at Caltech or even MIT (technically an Ivy), but since nobody in power graduated from there, there’s no helping hand to be had to start your career.

(Not that going is a guarantee of political success—it’s probably much less of a coincidence than the press release implied that Obama is a distant relation to the Cheneys, who are distantly related to most of the other political families.  But the coincidence is still big enough that it wouldn’t be the stupidest idea to be a little more interested about the background of any candidate who graduates from a major school.)

Sam Spade

Oct. 9, 2012, 5:20 p.m.

It is really simple, if you don’t have enough money to pay for college without borrowing don’t go. That’s all.

Jim Stanford

Oct. 10, 2012, Midnight

This article and its reference article both fail to mention the important point, that just like the rise in home prices during the housing bubble, this easy credit is main cause of the rapid increase in college costs. At the macro-level these loans are not even helping society in the long-term because the higher tuition they feed cancels out their benefit to individuals.
This bubble will continue much longer than the housing one because the emotional and illogical forces related to parenthood are much stronger than a mere belief that housing prices can only rise; and the because the easy credit is coming from the government that is subject to political forces that strongly favor this “middle-class” foolishness. I’m not sure what the best solution is, but the common sense one is to gradually eliminate these programs (e.g. max loan amounts, goverment support, etc) over 10 years or so.  What will likely happen is that tuition will stop rising so in the end parents/students will end up paying the same out-of-pocket but won’t be saddled with a huge debt.

Lynda Sposato

Oct. 10, 2012, 12:23 p.m.

When a student applies for a loan he is living at home, probably. When he/she graduates the family is not responsible for the loan, the student is. So the student, with their family’s help, will have to decide what they are willing to repay and understand the responsibility they are assuming.

ibsteve2u

Oct. 11, 2012, 6:14 a.m.

I still think everybody is overlooking the impact of inequitable free trade, which laid waste to the nation’s manufacturing and service infrastructure.

That is, millions and millions of good-paying jobs that could be performed with no college degree at all or a two-year technical or community college degree were destroyed, driving up the perceived demand for baccalaureate college degrees.  That brought the corporations and banks into education big time.  But the the job market is still a mess; even a four-year degree is no guarantee of a job.

How many commercials a day do you see that promise jobs in exchange for massive debt?  How many of those commercials represent “truth in advertising”?

KnowledgeStrong

Oct. 11, 2012, 7:35 a.m.

John Wright

Oct. 11, 2012, 8:57 a.m.

Perhaps the expensive 4 year college degree model is deeply flawed in this rapidly changing job environment?

I work in the high tech industry and my job involves getting new products manufactured in domestic and overseas contract manufacturers.

At a recent trade show I was waiting in line and talked to an attendee who mentioned he was a junior college instructor in the Mid-West.

He ran an electronics program and mentioned the local employer would select promising employees and pay their tuition/books and time off to attend his program.

This is a small example of how an employer driven education model might work. 

The current “go to college and you’ll get a good job” might apply to an earlier economic cycle in the USA, that may not return.

Possibly a continuous education model needs to be the norm, where one doesn’t spend four years at college before entering the job market.

Then job skills, and educational enrichment, can be flexibly accrued during one’s career.

If full employment doesn’t come back to the USA in a reasonable time frame, possibly a model where people close to retirement move to part time mentoring status to train the eventual replacement younger workers is a good solution.

And as one approaching social security, I’d like to have younger workers employed in well-paid jobs for the health of MY social security.

It would be better to have everyone working, even if part time, to keep job skills up to date.

And if you look at employment as being paid to solve a problem for an employer, an out of work individual, with no contact to the job market, may be unaware of employer problems they may be able to solve.

SR Education Group

Oct. 16, 2012, 7:21 p.m.

@John Wright

I think that price and prestige used to go hand in hand. In 2003, only two colleges charged more than $40,000 a year for tuition, fees, and room and board; by 2009, 224 were above that mark. Now, the mediocre schools are raising their costs. Harvard (or even USC if we’re looking at the West Coast) could afford that high tuition cost because their wealthy alumni contributed and they were pulling from a socioeconomic level higher than what we are talking about. Students whose families make under $50k / year don’t pay anything to go to Harvard today.

Other Universities can’t afford that kind of luxury but they raised their prices anyways. The universities hiked up their prices so much and the government responded in the way of financial loans. But the problem started with the pricing hike.

Kids that want to attend NYU might not be able to. But a higher education should be available to anyone who desires it and it shouldn’t put them or their parents out hundreds of thousands of dollars in loans.

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This article is part of an ongoing investigation:
College Debt

College Debt

Total outstanding college debt is estimated at $1 trillion dollars – and with costs still soaring, the burden on students and their families shows no signs of abating. We're examining how the complicated system of college debt is putting the squeeze on families.

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