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So I was one of these kids for the better part of college. The issue is that you dont care because you don't have options. You're already in college and stressi

So I was one of these kids for the better part of college. The issue is that you dont care because you don't have options. You're already in college and stressing out about oweing $100k isn't productive. You look at your loans once you're done with school and need to pay them back.

jonlucc 11y ago
They also don't provide information in real terms. Sure, I owe a ton of money, but I have no idea what that means to me. How much per month for how many years? They're finally starting to give this information to students, but when I was in, it was all very opaque.
jaynos 11y ago
Even once they are in repayment, many people don't understand loans. One of my friends posted on facebook his frustration with how his principal never seemed to be going down. I was able to explain to him how amortized loans work (pay the accrued interest and then any remainder goes towards principal) and he was much less frustrated after that (I think he even started paying extra to pay down the principal). Edit: If you search online, there is a lot of info about subsidized vs unsubsidized, income based repayments vs standard repayment, etc, but not of the (small) sample of sites I looked at explained repayment in simple terms of what does my monthly payment go towards (principal vs interest).
- ashark 11y ago
  > One of my friends posted on facebook his frustration with how his principal never seemed to be going down. That's one of those really basic things that I'd bet well over half the adult population of the US couldn't explain, if asked. Like how marginal tax rates work.
  - giardini 11y ago
    David Letterman: "The lottery is the tax you pay for not paying attention in math class." Once one has taken algebra (and paid attention) to the point of studying compound interest, one should be sufficiently forewarned about loans. As for your remark about half the adult population: I truly fear you may be correct (it may even be greater - half the population has an IQ of only 100, after all. What IQ is required to understand compound interest? And then there's the training - making sure it is in place). If so, then perhaps stronger vetting systems for obtaining loans should be put in place. All in all, good arguments for increasing the numeracy of the population at large and, barring that, putting mechanisms in place that prevent them from unwitting personal fiscal disasters. Unfortunately, to do so in the USA would be viewed as a form of fiscal, and therefore, political discrimination, so the disasters will continue! Which leaves only increasing numeracy, Which is well-nigh impossible. Which leaves the task to our not-yet-here AI personal assistants to warn us not to make bad loans. Indeed the best argument for AI may be that we shall need AI to save us from ourselves, in ways both big and small.
    - notlefthanded 11y ago
      Why is increasing numeracy "well-nigh impossible"?
epalmer 11y ago
We are getting ready to send our youngest off to college next fall. The three of us (wife, myself, kid) talk about it, work the math and calculate repayment amounts and length in years together. It is the only way to do this. My daughter wants to understand the finances and we want her to. She also will have to agree in advance when it is time for the final selection of school and loans that the balance is doable. Much coaching along the way. I have an Engineering and Chemistry Degree and wife is an accountant. The good news is she will be majoring in Mechanical Engineering with a concentration in CS and EE. Still we want student loan amounts to be reasonable. Met a young person recently that got a sociology degree and had >$100K US in loans. She is making like $30,000. This is totally absurd.
- skewart 11y ago
  I know a lot of people who are in a similar situation to the Sociology major you described (well, not quite that bad a ratio, but not far off). They all have opted for the income-based repayment plan and are basically resigned to the fact that they'll be paying several hundred dollars a month towards the loans for basically the rest of their lives. It feels kind of like an education tax that gets used really inefficiently. Actually, since most people I know in this situation are getting a little help from their parents it's effectively an inheritance tax.
  - malnourish 11y ago
    The problem with IBR plans is they are generally only for federal loans. In my experience, private loans offer no alternative payment plans up front.
    - jonesb6 11y ago
      Worst still a large number of companies are springing up offering refinancing on private loads that offer absurd terms and drag debtors further into the hole. These refi companies are to debtors what for-profit schools are to blue-collard workers.
  - epalmer 11y ago
maxxxxx 11y ago
I work with a lot of young guys who are stressing about their loans. You make a good point. What are they supposed to do? These days you absolutely need a college degree to have a chance in the workplace so you have to take the loans if you like it or not. No options besides having a rich dad.
- ams6110 11y ago
  You don't need rich parents. You need parents who plan ahead. My parents put two kids through college with savings and zero student loans or other financial aid, and they had quite modest incomes.
  - sehutson 11y ago
    I know that may not feel rich to you, but it definitely makes you the exception to the rule. Most students receive some amount of financial aid, especially in 2016 after decades of massive inflation in tuition costs.
  - maxxxxx 11y ago
    That's great but it's not really something the student has much influence on
- brianlweiner 11y ago
  They should go to their state's public university, where the tuition is much lower. US average is still under $10k. http://trends.collegeboard.org/college-pricing/figures-tables/2015-16-state-tuition-and-fees-public-four-year-institutions-state-and-five-year-percentage http://trends.collegeboard.org/college-pricing/figures-table... If that number is still too high they should earn credits at a community college and transfer into the state university after their Sophomore year. I get incredibly frustrated when you have people complaining after they chose to forgo their own state's perfectly decent university to go to another state's. You get practically the same education for 5x the price.
  - jazzyk 11y ago
kamaal 11y ago
>>You're already in college and stressing out about oweing $100k isn't productive. This is one of the reason why as an Indian, I decided not to do my MS in the US. Though I could have. The reason is simple, you will rake up a huge loan back home in India. Most of friends who came to US for their MS had only horror stories to tell. A loan amount too huge to pay off working a job in India, perennial stress of paying off that loan(often taken against a house/plot in India) and doing small part time jobs for food and sustenance in restaurants. Add to that a good college is beyond affordable, and a degree in By-The-Freeway college is next to useless(but still costs a lot in Indian money). After all that you will be stuck fighting a Visa system, with a multi year green card struggle. And even after all this, while you are in your late 30's(or early 40's), you have to buy a home(and pay those loans for the remainder of your enjoyable life), worry about retirement, getting kids settled and save for health care expenses.

jonlucc 11y ago

They also don't provide information in real terms. Sure, I owe a ton of money, but I have no idea what that means to me. How much per month for how many years? They're finally starting to give this information to students, but when I was in, it was all very opaque.

jaynos 11y ago

Even once they are in repayment, many people don't understand loans. One of my friends posted on facebook his frustration with how his principal never seemed to be going down. I was able to explain to him how amortized loans work (pay the accrued interest and then any remainder goes towards principal) and he was much less frustrated after that (I think he even started paying extra to pay down the principal). Edit: If you search online, there is a lot of info about subsidized vs unsubsidized, income based repayments vs standard repayment, etc, but not of the (small) sample of sites I looked at explained repayment in simple terms of what does my monthly payment go towards (principal vs interest).

ashark 11y ago
> One of my friends posted on facebook his frustration with how his principal never seemed to be going down. That's one of those really basic things that I'd bet well over half the adult population of the US couldn't explain, if asked. Like how marginal tax rates work.
- giardini 11y ago
  David Letterman: "The lottery is the tax you pay for not paying attention in math class." Once one has taken algebra (and paid attention) to the point of studying compound interest, one should be sufficiently forewarned about loans. As for your remark about half the adult population: I truly fear you may be correct (it may even be greater - half the population has an IQ of only 100, after all. What IQ is required to understand compound interest? And then there's the training - making sure it is in place). If so, then perhaps stronger vetting systems for obtaining loans should be put in place. All in all, good arguments for increasing the numeracy of the population at large and, barring that, putting mechanisms in place that prevent them from unwitting personal fiscal disasters. Unfortunately, to do so in the USA would be viewed as a form of fiscal, and therefore, political discrimination, so the disasters will continue! Which leaves only increasing numeracy, Which is well-nigh impossible. Which leaves the task to our not-yet-here AI personal assistants to warn us not to make bad loans. Indeed the best argument for AI may be that we shall need AI to save us from ourselves, in ways both big and small.
  - notlefthanded 11y ago
    Why is increasing numeracy "well-nigh impossible"?

epalmer 11y ago

We are getting ready to send our youngest off to college next fall. The three of us (wife, myself, kid) talk about it, work the math and calculate repayment amounts and length in years together. It is the only way to do this. My daughter wants to understand the finances and we want her to. She also will have to agree in advance when it is time for the final selection of school and loans that the balance is doable. Much coaching along the way. I have an Engineering and Chemistry Degree and wife is an accountant. The good news is she will be majoring in Mechanical Engineering with a concentration in CS and EE. Still we want student loan amounts to be reasonable. Met a young person recently that got a sociology degree and had >$100K US in loans. She is making like $30,000. This is totally absurd.

skewart 11y ago
I know a lot of people who are in a similar situation to the Sociology major you described (well, not quite that bad a ratio, but not far off). They all have opted for the income-based repayment plan and are basically resigned to the fact that they'll be paying several hundred dollars a month towards the loans for basically the rest of their lives. It feels kind of like an education tax that gets used really inefficiently. Actually, since most people I know in this situation are getting a little help from their parents it's effectively an inheritance tax.
- malnourish 11y ago
  The problem with IBR plans is they are generally only for federal loans. In my experience, private loans offer no alternative payment plans up front.
  - jonesb6 11y ago
    Worst still a large number of companies are springing up offering refinancing on private loads that offer absurd terms and drag debtors further into the hole. These refi companies are to debtors what for-profit schools are to blue-collard workers.
- epalmer 11y ago

maxxxxx 11y ago

I work with a lot of young guys who are stressing about their loans. You make a good point. What are they supposed to do? These days you absolutely need a college degree to have a chance in the workplace so you have to take the loans if you like it or not. No options besides having a rich dad.

ams6110 11y ago
You don't need rich parents. You need parents who plan ahead. My parents put two kids through college with savings and zero student loans or other financial aid, and they had quite modest incomes.
- sehutson 11y ago
  I know that may not feel rich to you, but it definitely makes you the exception to the rule. Most students receive some amount of financial aid, especially in 2016 after decades of massive inflation in tuition costs.
- maxxxxx 11y ago
  That's great but it's not really something the student has much influence on
brianlweiner 11y ago
They should go to their state's public university, where the tuition is much lower. US average is still under $10k. http://trends.collegeboard.org/college-pricing/figures-tables/2015-16-state-tuition-and-fees-public-four-year-institutions-state-and-five-year-percentage http://trends.collegeboard.org/college-pricing/figures-table... If that number is still too high they should earn credits at a community college and transfer into the state university after their Sophomore year. I get incredibly frustrated when you have people complaining after they chose to forgo their own state's perfectly decent university to go to another state's. You get practically the same education for 5x the price.
- jazzyk 11y ago

kamaal 11y ago

>>You're already in college and stressing out about oweing $100k isn't productive. This is one of the reason why as an Indian, I decided not to do my MS in the US. Though I could have. The reason is simple, you will rake up a huge loan back home in India. Most of friends who came to US for their MS had only horror stories to tell. A loan amount too huge to pay off working a job in India, perennial stress of paying off that loan(often taken against a house/plot in India) and doing small part time jobs for food and sustenance in restaurants. Add to that a good college is beyond affordable, and a degree in By-The-Freeway college is next to useless(but still costs a lot in Indian money). After all that you will be stuck fighting a Visa system, with a multi year green card struggle. And even after all this, while you are in your late 30's(or early 40's), you have to buy a home(and pay those loans for the remainder of your enjoyable life), worry about retirement, getting kids settled and save for health care expenses.