Student loans at for-profit colleges & universities

Discussion in 'Off-Topic Discussions' started by me again, Aug 16, 2009.

  1. me again

    me again Well-Known Member

    Yikes! :eek:

    Click here to read the full story. :eek:

    It sounds like:
    • The government (taxpayers) are biting the bullet i.e. losing enormous amounts of monies on these [fraudulent] loans.
    • The students don't know what they're doing and can't pay back the enormious loans and, subsequently, they carry the bad credit rating i.e. the students get the bad rap while the for-profits get the money.
    • Some (not all) of the for-profit institutions who are making these [fraudulent] direct loans (that are backed by the government) are laughing all the way to the bank. CEOs and stockholders are getting rich off the backs of the taxpayers, while the students who are defaulting on their loans carry the bad credit rating.

    What a scam and what a financial mess!!! This legal-fraud-loophole needs to be closed. :mad:
    Last edited by a moderator: Aug 16, 2009
  2. Bill Huffman

    Bill Huffman Well-Known Member

    It's definitely a predatory lending practice but I personally wouldn't consider it fraudulent.
  3. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    Of course, the poor naive innocent sheep-like students should bear no responsibility whatsoever for determining how much they are borrowing, or what their payments will be, or whether they can even afford that.
  4. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    I just love the concept of "predatory" lending. Some self-anointed group of limosine liberals decides that they know exactly how much everyone else ought to be allowed to borrow and anything in excess of that is "predatory." No thought whatsoever that both borrower and lender are legal adults and both consented to the transaction.
  5. me again

    me again Well-Known Member


    One student said that he is going to go in debt about 35 to 40k to get a Bachelors degree in criminal justice. The return-on-investment doesn't seem to add-up, especially when other less expensive RA online alternatives exist. However, it does show the importance that people place on getting a degree.
  6. peng88

    peng88 New Member


    At the end of the day one has to ask if the degree will generate returns? I see a bleak future for graduates and postgraduates in uncertain economic toil as jobs will become scarce and one doesn't need an academic qualification to become an entrepreneur. One certainly will need some financial accumen whatever the vocation be it in sciences or arts, but at the end of the day one has to be financially independent and sound. A degree no longer guarantees a job for life and neither will companies survive forever as we have seen the goliaths tumble in Wall Street and the fall of banks in London and all over Europe.
  7. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    Well, how does that compare to the annual salary he is going to draw as a cop? More importantly, what are his monthly payments on that debt and what are those payments as a percentage of a cop's monthly pay? Did he bother to run the numbers?
  8. me again

    me again Well-Known Member

    He obviously didn't bother to run the numbers. Some people just don't have a knack for financial sense. It's a shame.

    On a different note: Have you ever seen someone who will scrimp and save to save a penny or a dime, but who has no self-control and will spontaneously splurge big bucks for things that aren't needed?
  9. me again

    me again Well-Known Member

    Here's an interesting follow-up commentary:

  10. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    I don't know about your question about someone who will scrimp and save to save a penny or a dime but then totally lose control with borrowing. But I think it's a waste of time to pity someone who wouldn't even calculate his ability to support a debt and then claims to be a "victim."
  11. me again

    me again Well-Known Member

    They aren't claiming to be victims; the author of the original article inferred that they are victims. The true victims are the taxpayers who must ultimately pay for the defaulted government student loans. The students who defaulted should have NEVER been given the loans in the first place. However, since the for-profit institutions are guaranteed large profits -- even if they provide student loans to customers who don't meet traditional credit requirements -- it's a profitable no brainer for the for-profit institutions.

    Just to reiterate how the profit scheme works:
  12. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

    The author of the article is clearly wrong in conferring victim status on individuals who are either too stupid or too lazy to figure out whether they can actually afford a loan before signing on the dotted line.

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