Want more evidence that wealth is being transfered from the middle class upwards to the plutocrats?
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How does student loans tie into enhancing the plutocrats and hurting the middle class? It is the US government that made 90% of these loans which means us the taxpayers are on the hook for this debt.
The feds don’t even really screen people who take out the loans like a bank would. A good bit of this debt will not get paid back. Kids are on the hook for these for life until they are either paid back or they die. Student loans are just a huge mistake all the way around. This is a tremendous amount of money and I’m curious how much of it is actually spent on tuition and how much is spent on living expenses. Either way we seriously need to question why universities can justify these high tuition costs. Where is all the money actually going? We all know what the for profit schools are up to but why is public education so damn expensive? Is tuition really outpacing inflation or is this just evidence that we are not seeing the true numbers on inflation?
Where is all the money actually going?
Salaries for the sports team coaches, mostly.
Then the whiny Middle Class better make more money, huh?
I have always said it was crazy to borrow money to go to school. If people do, they must pay it back. This is nothing new and certainly isn’t the sensational subject the OP would have us bite upon.
@CWMcCall There is no need to expound on how a trillion dollars of debt that did not exist 30 years ago is a handicap for those owing the money. It’s important to realize that it isn’t the government passing out the money. It’s the private sector that lends the money at NO RISK, because the taxpayers (the government) guarantees the loans. So the question then becomes EXACTLY WHO RAKES IN THE PROFITS FROM THOSE RISK FREE LOANS? The entire scheme is another example of how the profits are privatized, while the risks are borne by you and I. If you as a parent wanted to loan your kid money for college at interest of 6% and up, just try to get a government guarantee against default. That trillion dollar debt is just another open and shut example of how wealth is being literally and OPENLY transferred from the pockets of people who work for a living to those who don’t.
@ARE_you_kidding_me It’s really important to question why it is necessary that there be a trillion dollars worth of debt for college education NOW, when such a situation did not exist until relatively recently. But much more important is the question: why is a college education virtually free in most first world countries? College costs are definitely rising faster than inflation. The states are broke, so the rising costs are increasingly shifted onto the backs of students. Student loans are the remedy for this apparent dilemma, with healthy risk- free profits for the banks doling out the money. If the federal government were making the loans (and raking in the profits) the scheme might make sense. But as it stands, that trillion dollar debt is the NOW the price required for merely a shot at landing somewhere in the declining middle class.
@Hypocrisy_Central One way to regard that debt (for those afflicted) is a decrease in disposable income, or a cut in pay.
@MollyMcGuire I would be tempted to agree with you if this were 1970. That’s another reason to be suspicious for the relatively quick rise of this debt. Just as the era arrives when it is universally accepted that a college education is ESSENTIAL to middle class existence, the costs have risen astronomically. Now since the average high school graduate is extremely unlikely to find a job paying a living wage, let alone enough for college tuition, borrowing money from SOMEWHERE is pretty much the SMART option.
In the end, rising college costs are merely a metaphor for money leaving the pockets of the folks paying to try to keep up. This would merely be another burden to shrug off as one of those irritating facts of life, were it not for the very conspicuous fact that in the face of all of these tribulations, THE RICH GET RICHER. It is NOT a coincidence.
@stanleybmanly On average 20% of those Sallie Mae guaranteed student loans are defaulted so that means you and I are covering the tab of 20 billions dollars worth of higher education.
Yes, the public gets stuck with the loss, but WHO reaps the profits from those loans which don’t go into default? Both cases represent massive transfers of enormous wealth from the non rich upwards to the “haves”.
@stanleybmanly @4.6% interest, education loans are not making the rich that much richer, plus they have to make something to cover their costs to process these loans so it’s not this massive upwards vacuum of cash into the super rich pockets you are making this out to be
4.6% over the life of the loan is not peanuts, that’s still big $
@stanleybmanly I don’t agree. Kids can work a year and go to school a semester, or whatever it takes. You don’t have to finish college at 22; finish at 26 debt free…..........a much smarter choice. Better still, try to work for a company that pays tuition for their employees. Many of them do.
Where is this “many”?
Who is paying for this kid’s life whilst they save every single penny of their minimum-wage income in order to pay for a semester?
Where is this kid going to school that one year’s salary of minimum-wage work pays for a semester?
I just did a quick “Net cost of college” application.
For myself, a married mother of one young child from a low-income family, it would cost me $22,000 a year to go to school full-time at the school I already live close to. After grants, I’m still in for $14,000 of that.
Yep, because I have $14,000 just sitting about. Every year. In a state with high unemployment and low wage rates. And it’s so easy to find a job that it’s totally feasable to get a job with tuition benefits.~
@stanleybmanly That’s how I got out debt free. It took like seven or eight years though because I was working full-time + a bunch or overtime. I had some family commitments on top of that. It was a rough seven years and that is not the way to do it in hindsight. There are not that many employers that will even allow this anymore. My employer cut off their tuition plan shortly before I got done and they would cut back what they paid for every year by increasing grade requirements and excluding things like books and fees. The paperwork for it was utterly ridiculous and was obviously designed to try and make you give up getting reimbursed. Yeah, you paid the full cost upfront and ended up getting about half of it back if you met all the requirements and jumped through all the hoops properly. That said it’s still much better to cash flow college if you can somehow manage it. Going slow or piecemeal is better than not going at all.
@MollyMcGuire I commend your positive attitude, but I have a much more jaundiced view than yourself regarding the viability of your solutions. For example, 20years ago I could tick off at will companies that did indeed contribute to help defray the college expenses of employees. But even then, the majority of these places weren’t the sort of folks hiring unskilled 18 year olds. Today, I can’t name offhand a single business reputed to offer such benefits. The environment (business wise) no longer allows such frivolous nonsense. Such silliness has pretty much gone the way of pensions and any other benefit not required by law.
@CWMcCall I doubt very much if the average interest rate on these loans is 4.6%. But the eagerness of the banks and the intensity of competition for student money are fairly good indicators that those risk free loans are a damned good deal. But let’s pretend that the rich aren’t making a killing on that 1.2 trillion which is growing and ongoing. What is beyond dispute is the fact that folks are going to be a combined 1.2 trillion short of what they might have had in their pockets. It is generally accepted that this debt is one of the more prudent “investments” that an individual can make in order to acquire what has come to be an essential commodity. Now that 1.2 trillion dollars and its interest is going SOMEWHERE. We know where it’s coming from, and no one is making the argument that it is going back into the pockets of the debtors. Nor is the government turning a profit. Wherever the money goes, that money is in effect a tax on the middle class that did not exist when I was in college..
From your article:
Some of them hand out big bucks to employees, while others just pay $500 towards school.
Woo! Five hundred whole dollars?!? That’s a load off my mind. That’s, what, a book and a half?
@MollyMcGuire Thanks for the enlightenment. You’re hard on cynicism
@Seek Shouldn’t the sentiment count for something?
I know you’re not being serious, so I’ll refrain from rebutting with scathing commentary.
I actually look forward to your scathing commentary, but isn’t 500 bucks better than “it’s not our business to encourage your education”?
@ARE_you_kidding_me You really are to be congratulated for beating the debt curve. Sorry I didn’t respond sooner.
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