How would you solve the student debt crisis?
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  How would you solve the student debt crisis?
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Author Topic: How would you solve the student debt crisis?  (Read 3072 times)
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Zen Lunatic
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« on: March 31, 2016, 03:26:52 AM »

Personally i'd enact universal loan forgiveness and universal free tuition from here on out and the rich would pay for it. What about you?


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dead0man
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« Reply #1 on: March 31, 2016, 05:55:36 AM »

First, it's not a crisis.  Second, I would stop telling kids that college is the best thing to do after High School for everybody.  Third, I would encourage kids going to college to NOT take out excessive loans.  You can be poor and graduate college without stupid amounts of debt.  People do it all the time.  Yeah, it will be harder and maybe longer.  So?  Will it be harder than making loan payments for the next 30 years?  Probably not.
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White Trash
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« Reply #2 on: March 31, 2016, 08:43:32 AM »

New scholarships and more funding to grants so that fewer students have to take loans. Lower interest rates on student loans.
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Nathan
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« Reply #3 on: March 31, 2016, 10:05:54 AM »

Forgiveness of existing loans (tens of thousands of dollars that can't be discharged in bankruptcy is not a fair cost for much of anything in this life and if you think it is then, yes, you're part of the problem). University tuition should continue to be heavily subsidized in a less boondoggle-ish way (or just capped in some way for state schools) but making it completely free is not feasible given what Americans expect of their schools culturally.
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RI
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« Reply #4 on: March 31, 2016, 10:21:55 AM »

Extending state constitutional education funding mandates to cover higher ed would be a good start.
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Famous Mortimer
WillipsBrighton
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« Reply #5 on: March 31, 2016, 10:26:45 AM »

Forgiveness for debt linked to tuition but not for any debt linked to living expenses.
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Mr. Reactionary
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« Reply #6 on: March 31, 2016, 12:54:46 PM »

This wouldn't solve the problem, but I'd support a plan to nullify all of my federal student loan debt and 40% of every other person's Federal Student Loan debt as part of an economic stimulus.
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snowguy716
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« Reply #7 on: March 31, 2016, 05:31:45 PM »

Best option:  Forgive all debts. 

Moderate hero option:  Reduce maximum loan payments to 10% of income below $75000 and 25% of remaining income up to the original terms of the loans.  This is then allowed for 15 years after leaving school.

Allow all student loan interest paid to be tax free.  Allow for loans to be tossed aside in bankruptcy in cases of disability or long term mental illness.  In periods of unemployment, loan payments are deferred and interest amortized...but the 15 year period does not extend.
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Antonio the Sixth
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« Reply #8 on: March 31, 2016, 06:01:40 PM »

Forgive all debt, make public colleges free for families below the median income (and gradually increase tuition as income increases).
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RFayette
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« Reply #9 on: April 01, 2016, 02:07:46 AM »

Forgive some debt.  Allow companies to enter into the student loan program and require them to sponsor students (based on major), and then students pay back with work at that company for a fixed number of years, with the firm taking a percentage of their salary.  This should constitute the majority of the student loan program.
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dead0man
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« Reply #10 on: April 01, 2016, 07:28:44 AM »

I'm totally not understanding the logic behind the "forgive all the debt" idea.  How is that fair?  The poor people that worked their way through school (like one should if they don't have the money) get nothing and the lazy layabouts get a hand out?
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Derpist
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« Reply #11 on: April 02, 2016, 12:44:04 AM »

Change the laws to let people discharge student loan debt.

Of course, I don't want to see the same exact loan bubble pop up again. Any college that doesn't disperse its endowment should lose its non-profit status. Most major private universities are just hedge funds with schools attached. Heck, any college that charges too much for tuition (not sure how too much will be determined but whatever) should also lose its nonprofit status. If college administrators cry and moan, tough luck.

Ironically, many of those who profit from our corrupt, wealth-driven university system...are the same university people voting for Sanders. Though that might not actually stop him from reforming the system if he were put in a position to do so.
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Derpist
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« Reply #12 on: April 02, 2016, 08:42:14 AM »

Ironically, many of those who profit from our corrupt, wealth-driven university system...are the same university people voting for Sanders. Though that might not actually stop him from reforming the system if he were put in a position to do so.

Your typical high-level, six- or seven-figure salary university administrator (or board member) is basically a textbook Clinton supporter/bundler.

The "education-industrial complex" has been firmly embedded within the Democratic Party's infrastructure for a long time. Some of this influence has been benevolent, other parts... not so much. That's just how interest group politics work. Unfortunately, the interests of students have never been organized enough or well-financed enough to serve as a counterweight to that influence in state or national politics.

To quell my curiosity, I just looked up university trustee donations.

I was actually wrong and you were right about their political leanings. I stand corrected.

Though I don't see anything benevolent about it. These are the people who have created the student loan crisis and all of the misery that has inflicted our students. They are disgusting since they're just a more successful version of Wall Street.
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dead0man
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« Reply #13 on: April 02, 2016, 09:57:42 AM »

Excellent posts Averroës.  Thank you.
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KingSweden
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« Reply #14 on: April 02, 2016, 02:47:03 PM »

1) Allow existing debtholders facing bankruptcy to actually discharge loans in bankruptcy. Do NOT do a blanket forgiveness - like others have pointed out, this is unfair to those who did not accrue debt and paid as they went, or had massive loans they paid off

2) Slash interest rates.

3) At PUBLIC universities, shift tuition to a back-pay system. You don't take a loan, but you have to pay the university back for the first 20 years after graduation. 1 year at school = 5 years needed to pay. You can determine percentages of income, but the dollar amount is unfixed - you pay X% of income regardless of income. So if your college does zip to educate you and get you good work after college, they don't make much back. Have the colleges have some skin in the game. This will also disincentives the skyrocketing tuition raises and facilities arms race going on.

This obviously does not help those at private universities, but it shouldn't. Public policy should be designed to help those partaking in public institutions. If you choose to go to an Ivy League school, it's not anybody else's problem how you pay for it. Those big endowments should probably be incentivized into doing more than being a hedge fund, though.
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muon2
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« Reply #15 on: April 02, 2016, 03:31:58 PM »

I think King Sweden makes a good point. Private schools should not be treated the same as public schools. I think that it's particularly troubling when students go to private schools without clear educational goals and are then surprised at the debt load and lack of employment available to pay it back. It's different for students who have the means from savings or parental income, or those who are studying for a career with solid job prospects. That said I think there is value in states providing need-based grants to students seeking to stay in the state for college as part of an overall financial package.

For students looking at public universities, but are worried about debt, I recommend community college for the first couple of years. Most courses, especially required courses, ohlne would take in the first two years can be found at community colleges. I know a number of students in the last decade who managed costs very well this way.
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KingSweden
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« Reply #16 on: April 02, 2016, 07:07:40 PM »

For students looking at public universities, but are worried about debt, I recommend community college for the first couple of years. Most courses, especially required courses, ohlne would take in the first two years can be found at community colleges. I know a number of students in the last decade who managed costs very well this way.

Do you think that students at community colleges have access to anything resembling the academic or social support available to the most successful students at four-year public schools? It's difficult to find data that shows how comparable students perform at different kinds of institutions because the student populations are so different. I know that many students do very well by starting out at a community college, but I'm skeptical of the idea that it provides a comparable learning environment for students.

Also, for what it's worth, it's difficult for me to put my personal experience aside: The best thing that happened to me when I left for college was that I was surrounded by other highly motivated students. I know plenty of people who have enrolled at community colleges, and all of them complained about how the lack of seriousness from (at least some of) their classmates affected their studies. In the most extreme cases, this extended to students involved in violent crime and gang activity on campus. In other words, some of our community colleges in New York State are beginning to the kinds of problems that we usually associate with the worst urban high schools. If debt were my only alternative to avoiding that, I would take on the debt.

Your skepticism is not unfounded. There is a very broad range in quality among CC's, much more than four-year traditional institutions.
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dead0man
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« Reply #17 on: April 02, 2016, 07:21:34 PM »

The three CCs I attended were all fine institutions.  LCCC (metro St Louis), CC of the Air Force (a CC in name only) and Metro CC (Omaha).
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Ray Goldfield
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« Reply #18 on: April 02, 2016, 07:44:11 PM »

Allow student loans to be discharged in bankruptcy. Offer free community college to all students with a 2.5 GPA or higher in high school, with scholarships available to state schools for those who excel in community college.

If people still want to attend an 80K liberal arts college, that's their business. The best way to solve the student debt crisis is to make alternatives easier and more appealing.
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muon2
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« Reply #19 on: April 03, 2016, 12:34:40 PM »

For students looking at public universities, but are worried about debt, I recommend community college for the first couple of years. Most courses, especially required courses, ohlne would take in the first two years can be found at community colleges. I know a number of students in the last decade who managed costs very well this way.

Do you think that students at community colleges have access to anything resembling the academic or social support available to the most successful students at four-year public schools? It's difficult to find data that shows how comparable students perform at different kinds of institutions because the student populations are so different. I know that many students do very well by starting out at a community college, but I'm skeptical of the idea that it provides a comparable learning environment for students.

Also, for what it's worth, it's difficult for me to put my personal experience aside: The best thing that happened to me when I left for college was that I was surrounded by other highly motivated students. I know plenty of people who have enrolled at community colleges, and all of them complained about how the lack of seriousness from (at least some of) their classmates affected their studies. In the most extreme cases, this extended to students involved in violent crime and gang activity on campus. In other words, some of our community colleges in New York State are beginning to the kinds of problems that we usually associate with the worst urban high schools. If debt were my only alternative to avoiding that, I would take on the debt.

I can speak to my experience teaching for over two decades at a non-flagship state university. We actively tracked our majors and included whether they were transfers from CCs or were native freshmen. Transfers were distributed from urban (Chicago/Cook), suburban and rural CCs. In our department it was about half from each group and there were no measurable differences in academic performance. In terms of motivation we found that the CC transfers were more likely to immediately continue studies in our MS or PhD program, so they were certainly not at a disadvantage in that regard either.
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KingSweden
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« Reply #20 on: April 06, 2016, 08:48:51 AM »

Allow student loans to be discharged in bankruptcy. Offer free community college to all students with a 2.5 GPA or higher in high school, with scholarships available to state schools for those who excel in community college.

If people still want to attend an 80K liberal arts college, that's their business. The best way to solve the student debt crisis is to make alternatives easier and more appealing.

Scholarships are a good idea, too. Basically, make public universities and colleges more appealing but private is private - that's your business.
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DC Al Fine
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« Reply #21 on: April 06, 2016, 06:31:09 PM »

Forgiveness of existing loans (tens of thousands of dollars that can't be discharged in bankruptcy is not a fair cost for much of anything in this life and if you think it is then, yes, you're part of the problem). University tuition should continue to be heavily subsidized in a less boondoggle-ish way (or just capped in some way for state schools) but making it completely free is not feasible given what Americans expect of their schools culturally.

Mass debt forgiveness sounds good, but is effectively a massive subsidy for the upper middle and soon to be upper middle class. Let's not forget that on average a college graduate will have an ample wage premium over a high school diploma holder.

Problematic student debt is concentrated among a few key groups:
1) Students in for-profit schools
2) Dropouts
3) Students with many years of education (grad school, changing programs, etc.)

Any debt forgiveness should be concentrated among those people. It is personally reasonable to ask people who are obtaining an education that will profit them immensely to contribute towards it if they are able.

You raise an interesting point around bankruptcy, but unfortunately there is no collateral like other loans. If a don't pay my mortgage or car note, the bank can seize the asset. There is nothing to seize in an education loan, so making them discharged in bankruptcy makes them like any other unsecured loan to an 18 year old with no income; there will be a cost either via higher rejection rates, higher interest rates, or the state subsidizing a massive moral hazard.

The solution IMO, is for the state to do its best to make state schools affordable, both through administration/amenities cuts and increased grants to students, while making loans discharged in bankruptcy. This would allow more students to self-finance, while keeping the 'cost' I described above reasonable.
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« Reply #22 on: April 08, 2016, 11:14:50 AM »

The question should be how to reduce college prices and here is one way of fixing that

1. No to construction of new buildings are sports stadiums unless you can prove the last one is in such bad quality that you have to create a new one

2. Stop funding or giving student loans for degrees what get people no where ahead in life , and instead use that finding for trade schools or stem and buiseness programs

3. Allow ways for people to be credited in that class in different and cheaper ways

4. Replace most text books with online text books to lower costs of them


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Kingpoleon
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« Reply #23 on: April 10, 2016, 07:06:56 PM »

1. I get free college to anywhere.
2. I raise the final price by .1% on everyone's student loans to pay for it.
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dead0man
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« Reply #24 on: April 12, 2016, 10:44:26 AM »

What makes you think a kid that dropped out of Community College would do better at four year school?  I agree the 12% number sucks, but I don't see how it would be any better if they started at a 4 year school instead of a CC.  It's a different type of person that goes to CC instead of a Uni.
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