Student loan fugitives

From CNN:

http://money.cnn.com/2008/10/23/pf/college/student_loan_fugitives/index.htm?postversion=2008102407

 

Student Loans

When I attended a brick-and-mortar school on-campus in my early 20s I racked up about 20,000.00 in student loans. When I started working, after leaving school in third year, I had to become a contractor/consultant to have any hope of paying off the loans in a reasonable time period. I poured every dollar I earned into repaying the student loans keeping just enough aside to cover living expenses that bordered on poverty. But I paid off my obligations in only 2 years.

While I would prefer that post-secondary education be fully funded by taxpayers including myself, I would be happy if the government had a reward system whereby for each year of post-secondary education towards a degree the student had to repay only a portion of the debt based on s sliding scale according to their GPA at the end of each year. The higher the GPA the higher the reduction in amount to be repaid. For life-long learners, there should be a flat 50% tax credit towards tuition and fees associated with post-secondary education regardless of the country in which the school is located and whether the student attends classes on campus or by distance education. The only stipulation is the school must be accredited to the satisfaction of the government.

 

You were smart to pay your loans off so quickly. In addition to your suggestions I would be interested in seeing someone put together a plan that would allow student loans or portions of student loans to be forgiven if people took certain jobs or certain jobs in specific geographic areas. I think that once upon a time this was done with MDs in order to get some medical professionals into more rural areas. I think that I would have been open to a deal like that when I graduated.

 

But there is, like joining the Armed Forces. But also will depend how much you owe.

 

I thought the Teach for America, or similarly named government-sponsored initiative to get new teachers into under-served inner-city and such areas, was structured to forgive loans or portions thereof. I read it a few years ago so my memory might be less than complete.

 

in some instances the federal government can repay student loans:

https://www.opm.gov/fedregis/2004/69-042004-21039-a.pdf


I really disagree with taxpayers paying for any post secondary education unless:

1. The person completes the degree with an appropriate GPA for graduation.
2. If my taxes are paying for the education then I would like some service back to the community/country.

a sliding scale GPA reduction wouldn't work due to the difference in studies/schools, etc...

I served 4 years in the Marines for the GI Bill to pay for my bachelors. Military service may not be an option for an individual for any number of reasons, but service to the public in some capacity certainly is an option. I do not believe a college education is a right, nor do I believe everyone is suited to college. Having taxpayers foot the bill provides another system with the potential for abuse.

 

I agree with Kevin 100%.

 

Personally I think the caps for finaid should be lowered and Title IV schools should be regulated in what they can charge. What? Federally backed money with no governmental oversight on tuition? Sounds like a deal even AIG would take. Schools raise tuition because of the availability of "easy" money. Students who aren't old enough to drink are somehow responsible enough to rack up tens of thousands of dollars in debt? Come on.

 

As do I; excellent points, Kevin.

 

Rather than taxpayers funding post secondary education (in the way that they fund K-12 AKA "The train wreck") I would rather see more business and industry embrace tuition reimbursement. There are a lot of direct and indirect benefits to the employer. My husband's company requires completion with minimum GPA and pays 50% up front- 50% at completion. There are add'l requirements- like it has to be related (somewhat) to his job, and he has to work 2 years after graduation or else he must pay it back. (+a few others) That said, he will be a better employee and bring into the company a world-view that is more current and competitive. The company invests in their people this way- and for the employee who is willing to work hard it's a FREE APPRECIABLE ASSET.
My husband's company will do this or all hourly or salary employees, but only about 10 per year out o 500 take advantage of it.

 

I think that's great. I'd love to have a benefit package that included a deal like that.

 

The thing is that some students make a living out of student loans(filling the gap for not working) and that is a big no no, some student will buy food and pay other expenses like rent, car payments, electronics etc... The only thing that would be good is that the government specifically restricts this money just for education purposes(tuition, books, and maybe room and board in the college).

 

Great in theory but in practice you need the education to even be considered for many jobs these days. Besides in tough economic times training allowances and tuition reimbursement are on the short list of cuts. Employers do not want to hire people they need to train or have trained; they want people with education and experience. There are a few exceptions and those employers should be recognized for their forward-thinking policy.

At my last place of employment, management regularly declined training requests despite the 5000.00 per year training allowance per employee. When a request was approved the employee worked the day shift they had to work a different shift (evening or overnight) and attend the course during the day OR attend the course during the day and work their regularly scheduled evening or overnight shift OR take vacation time for the training days.

 

or take the course online

 

Unfortunately many of the students don't think long-term and think about the massive amounts of debt they are accumulating while they are in school. I personally lay some blame on the financial aid offices for not doing more to impress upon these students that they should be very frugal with their loans and only take the money for those expenses directly related to their education.

I previously taught at a school and the students kept talking about their maintenance checks. I finally asked a student one day exactly what was a maintenance check. That's when I found out that it was the excess monies available from their student loans. From that point, I always made it a point at the beginning of each quarter to educate my students on their responsibilies of repaying those loans when they graduate.
Thankfully I am no longer associated with that institution!

 

That's what I was thinking. It's a great staff retention strategy.

 

$20,000 GRADUATE RETENTION PROGRAM LAUNCHED

..in Saskatchewan, Canada - here is the the article:

( http://www.gov.sk.ca/news?newsId=674d82e0-7c8c-4b65-b2a4-40cc0e79dbdd )

 

Agreed. Providing education reimbursement serves both the employee and probably more importantly the employer in the long-term. The cost of recruiting and training new hires often exceeds the annual salary of that new hire during the first year of employment.

Congratulations to your husband on nearing the milestone that is the bachelor degree.

 

As a financial aid professional, I am trying not to be offended. Yes, there are bad financial aid professionals, just as there are bad professors or any other profession out there. If you don't think that that the vast majority of us are concerned about how much students are borrowing, and if you don't think that we see what damage they are potentially doing to themselves, then you need to spend a little time talking to us and educating yourself.

We do what we can to help students get an education. Yes, students can get "maintenance checks", as they were called at your institution, since students can receive financial aid to cover living expenses for off-campus housing, and most schools have neither the physical or financial resources to house them all. If you restricted loan funds for students who were living on-campus only, most campuses would lose a huge percentage of their students. (And the amounts that students can get is restricted. It's not a free-for-all.)

Yes, more education is needed, and schools are doing what they can. Loan counseling (whether it be in person or online) is required for first-time borrowers, but I agree that more needs to be done. I agree that it's shameful to see some students ignorantly sign away their future financial health, and not be able to stop them. I find it strange, though, that you lay the blame at the feet of the financial aid office, and not with the families who have supposedly brought their children to this point, the legislators who make the rules, or with the students themselves who don't bother to read anything. In most cases, I can't stop a student from taking out a loan that I know he won't be able to afford after college. I can explain it to him every which way, but I can't take deny it if he has eligibility. What would you have me do differently?