Damn Student Loans

my life would be perfect without any student debt. everything else is in order.

did you expect to be making more money in law at this point, or is the debt load for law school so high that only the 6-figure big lawfirm guys able to keep up?

#2

Will the academic tuition bubble ever burst?

I think the problem is that things have been set up so that it really does require $40,000 (or whatever) per student to keep the institution at status quo. So it's not a bubble that can pop without lots and lots of other things changing.

Yeah, my impression of the problem is that the wide availability of student credit has created or at least helped fueled a kind of arms race between schools -- since cost-competition is less important (since no one really notices what they're paying until the loans come due), schools try to outdo each other in programs and services and "quality of life." Students have come to expect a lot of things that would probably be hard to provide at lower costs.

Exactly. Nice dorms, new buildings every year, events etc. - a lot of the cost of an undergrad education has very little to do with the actual education part.

If it weren't for credit, there would be a good possibility that good students wouldn't be able to go to the schools they couldn't afford, and the high costs could actually hurt the institution. At the moment? Not really.

These decisions are difficult to make too. Is it worth going $50,000 in debt to go to private school X to get diploma X? Sometimes it is and some people come from states w/ crappy public schools. It's a life gamble.

$50,000 is one year of school

They are crushing. I'd stimulate the economy so much if I had that extra $1500 a month to buy stuff.

I do kinda wonder where the money goes in law schools though.

xp iatee: it is similar to the housing bubble in that the cost inflation is based on easy credit and minimal attention paid to the debtor's ability to repay the debt. I'm sure that if student loans became difficult to get, tuitions would go down at some institutions in order to attract students. There are a lot of 2nd and 3rd tier colleges and universities charging the same tuition as the Ivies, Stanford, etc. partly as a marketing strategy. Though the top tier schools tend to have larger endowments and offer more grant and scholarship aid, so students are often paying more to go to these 2nd and 3rd tier private schools. Another factor is the increase in graduate students. Grant and scholarship aid for grad students is a lot more scarce than for undergraduates.

$50,000 is one year of school

That's just incredible - it has doubled in 15 years.

word ive been paying down my private lawyer school loans v. aggressively. i had some decent scholarship $ too but yeah im ecstatically happy to only have the gov $ left even tho its like 50k lol -- just accepting ill be paying it for 30 yrs

50k is nothing

i finished paying mine off this week. what should i spend the spare £85 a month on now?

I do kinda wonder where the money goes in law schools though.

especially since law schools are total cash-cows for their parent institutions. the overhead costs (computer and library resources, professors and admin staff) are probably a great bit lower than other, more capital-intensive academic disciplines (such as the hard sciences).

srsly they started @ over 100 and i only finished law school in 05. if u rly want to make a dent in them, dont live in ny (or any other major city)

Yeah I wasn't disagreeing that it's a bubble, just that it could really crash. I don't see tuition going down anywhere, pretty much - universities are cash-strapped themselves right now due to the way they choose to finance themselves. Things might be downscaled, student body sizes might get smaller. Maybe tuition will stay flat for awhile and inflation will eat it up in the next 10 years.

Another variable: at a lot of private schools a large % of the student body *can* afford to pay the tuition + the fact that a % of poor students get a % of their tuition paid for. These %s are all different numbers at different schools. But truth be told, the actual tuition number cited by everyone is only gonna be paid by the very richest families. Considering that a large segment of their student body *can* afford to pay it, why not charge that much if not more? The solution is having a very, very good near-socialist financial aid system for the poor and middle class - which does seem to be happening more and more at the very best schools.

There are a lot of 2nd and 3rd tier colleges and universities charging the same tuition as the Ivies, Stanford, etc. partly as a marketing strategy.

Those 2nd and 3rd tier schools are charging the tuition not just for the image but also because they want to be 1st tier schools and that requires spending a lot of money. I do think that image is at least a part of it.

(recent examples of 2nd tier schools that got to the first tier on money alone: usc, washu)

especially since law schools are total cash-cows for their parent institutions. the overhead costs (computer and library resources, professors and admin staff) are probably a great bit lower than other, more capital-intensive academic disciplines (such as the hard sciences).

― LOLBJ (Eisbaer), Thursday, March 26, 2009 10:03 PM (16 minutes ago) Bookmark

Exactly. My school is an independent private, which means it's not sending excess dollars to a parent institution. Plus it owns a ton of valuable residential real estate, which I'm pretty sure it profits from even at the below-market rents it gives students. Faculty are paid highly but many classes are 80-person lectures. No need for expensive reseach facilities/technology, and even a lot of the library stuff is becoming obsolete and reduced to a few online research systems (which I'm guessing give the school a sweet deal in exchange for the promotion). Granted 50% of the student body gets at least some merit scholarship.

Maybe we talked about this article elsewhere? If so, I missed it. It's about a 26 year old with $100K in loans, having graduated from NYU. I'm curious what you think about this part:

"Her mother can’t help without selling her bed and breakfast, and then she’d have no home. She could take her daughter in, but there aren’t good ways for her to earn a living in Alexandria Bay, in upstate New York."

"Cortney could move someplace cheaper than her current home city of San Francisco, but she worries about her job prospects, even with her N.Y.U. diploma."

"She recently received a raise and now makes $22 an hour working for a photographer. It’s the highest salary she’s earned since graduating with an interdisciplinary degree in religious and women’s studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren’t being deferred, which would not leave a lot left over."

Paying her student loans "would not leave a lot left over", but according to the article's data, she'd be left with $850 a month. Any thoughts on that?

I think she is a bad choice to be a subject of an article like this...hell, she's in a better financial situation than a ton of people I know. there are plenty of people w/100k in loans from schools worse than NYU, who are not taking home $2300 after taxes.

yeah, I was thinking $2300 is pretty decent! I mean, if that's enough for a single person to get a NY Times article...well, then maybe this should go into the "quiddities" thread instead.

a friend of a friend was graduating john hopkins UNDERGRAD w/ 250k in debt.

$22 working for a photographer, must be a damn good photographer

how the hell can you graduate with 250k in debt. were they doing a 5 year program? xp

studying abroad somewhere expensive helps

this same person had the option to go to ut-austin iirc

damn; no shame on Hopkins but I don't think it would be much advantage brand-wise over a decent state school...unless you can spend all your free time there making friends with rich people (dunno if that's the kind of place Hopkins is)

oh it is

we have a family friend who is taking out $400k to finance his daughter going to medical school

but that's understandable, cuz you make all of that back in like 30 minutes after you graduate iirc

overall the thing that really disgusts me is the 'can't use bankruptcy' aspect. there are a lot of 18 year olds making stupid decisions w/ college loans so they can live in greenwich village (etc.) but there are people making comparably stupid decisions w/ houses that cost much more than 200k and if shit blows up, it might suck, but they won't be paying for it 15 years from now.

i have more loans than 100K. soon i can start paying them off. the only reason i'm not panicking about them is a big chunk is going to be forgiven after i make 120 payments if i keep working for the government. but then i gotta pay income taxes on that. it's ok i'll be like 36 at that point, plenty of time to think about it.

huge debts like this make me lol to myself because money is not real iirc

a big chunk is going to be forgiven after i make 120 payments if i keep working for the government

if you choose an eligible loan repayment plan. I think I'm sorta getting screwed, because I did all the paperwork and waiting to shift to the repayment plan that "counts", and it somehow ended up raising my monthly loan bill to like $790. So I shifted back to my previous plan ($450 a month), which apparently isn't eligible for the 120 payments thing.

I'm wondering if somehow I screwed up at some point? It seems off.

huge debts like this make me lol to myself because money is not real iirc

oh word

yeah i gotta do some more research before my forbearance ends 8/21

we have a family friend who is taking out $400k to finance his daughter going to medical school

but that's understandable, cuz you make all of that back in like 30 minutes after you graduate iirc

i'll defer to gbx here, but don't fledgling doctors usually take a low-paying internship right after med school?!?

as for the non-dischargeability in bankruptcy: the only defensible reason AFAIC relates to the portion given by the US government. however, student loans have only been damn near impossible to discharge in bankrupcty since 1997. and however the strong the reasons for making discharge of government loans so difficult, there's no good reason that i can think of as to why private student loans should not be dischargeable.

I have a friend who had $100,000 of student loans wiped after his mum died, because they were under her name or something. Every cloud and such.

I thought that the UK Student Loan Company had forgotten about me after they didn't get in touch for a couple of years, but a couple of weeks ago I got a letter telling me I owed them £15,000. Ah well. I can be pleased that I'm not my American friends doing PhDs here and adding $25,000 a year of loans to their already lingering undergrad loans.

I will have more than $100k when I'm done later this year.

Been really sorta freaking out about loans recently. Post calming things about student loans here! Gallows humor is fine so long is it is not mean-spirited.

i'm w/ u on this, and i just took out more for this round of grad school. topping out around 100,000.

also, two collection agencies seem to have found me for debts i – honestly! – paid off years ago.

I definitely do not regret going back to school, and absolutely knew how expensive it would be. No idea how I will ever pay all this stuff but on the plus side I have done things in the last 3 years that were simply unthinkable previously. But I def. owe a ton AND I got a half-scholarship! Hoping to consolidate under Federal Direct and do income-based repayment in hope of meeting forgiveness eventually. Maybe find low-interest credit union loan to pay down on some of it. Besides school, where else is good place to seek advice about handling repayment?

you're back at grad school, remy?

It is clear to me that I will have crappy income and high payments so income-sensitive makes sense.

On the plus side, I have no undergrad loans, car paid off, no mortgage, wife (currently) has good job which pays for her school. But I have Jewish paranoia that shit will inevitably happen!

Do we have any financial advisors on ILX? I'll edit your wedding video!

http://www.meltingmama.net/.a/6a00d8345190c169e2012876a140ef970c-400wi

yes

Honestly, the Peace Corps seems pretty cool and my wife would be into it, but I do not qualify as a non-US citizen. I heard a guy from my school was thinking about joining the army! But he is also that sort of guy.

yeah, peace corp is really hard to get into, i've heard.