Student loan debt piles up to $1.16 trillion: NY Fed

[Biochemist21]

High-risk, in the sense that you are charging an individual to be responsible for a large sum of money, as opposed to a large population. I'm uncomfortably familiar with how hard it is to discharge student debt under the current system.

Neglecting private/OOS colleges and universities is intentional. In this scenario the quality education is provided via tax revenue in total, but only at state schools. Should the student choose an instate private, they would recieve the same tuition guarantee as an instate public and have to make up the difference in private sector loans. OOS schools they'd get a % of tuition and again make up the remainder in private loans. Achieves the goal of broadly available higher education to all income levels, and allows the student to take on as much/little debt as they want (and even lets the private sector pick up responsibility for approval thereof). The compact between society and individual is not one sided here: society picks up the tab, but in the setting of its choosing (aka lowest overall cost to it).

Large debts are assigned to individuals on a daily basis in the way of mortgages. The relative risk of a single mortgage is offset by bundling thousands of them together in the form of securities. As long as we don't have a subprime mortgage equivalent in terms of student loans, then there should be no issue. I do concede that this is not an impossibility as long as we keep giving govt loans to for-profit schools, but I'm not gonna go there.

(just to play a little devil's advocate here) I think your proposed system would work great for residents of states with robust public university systems (CA, WI, MN, NY), but seriously kneecap residents in other states. With that system you're going to shunt large numbers of people towards the public universities (clearly by design). It is unlikely that the public schools could absorb the influx of students. Thus there's a fair chance that we'll just end up with a tiered education system. Private schools are left exclusively to the upper class, while middle class students who might have gone private instead go public, thus displacing the first-generation college students from positions that they might otherwise have had at a public university.

As to loan forgiveness: it really depends on how it's done. Forgiveness for paying the minimum income based repayment for 10 years? Fantastic scam if you can work it, terrible idea in practice. I think you hit the nail on the head though: All the examples you gave of "deserving" loan forgiveness repaid their debt in service. I honestly wouldn't care to repay the loan debt of the ***** that graduated with a theater major if they earned it through by working for a charity, serving the under served etc.

^^This. As annoyed as I am at people who actually graduate with ridiculous unemployable majors, the "lazy college grad" is pretty much a myth. Regardless of if a person's "interpersonal studies" degree makes in sense, they at least had to put forth a modicum effort and be able to deal with people long enough to graduate. Which sets them far enough apart from the rest of the workforce as to at least maintain gainful employment more often than not. Even if they end up as the manager of a corner gas station, they are at least a manager and will value their credit enough to prioritize repayment.

Maybe the answer to your concerns could be that loan forgiveness is only open to certain majors/degrees? And even if they don't have one of those majors, if an individual utilizes their degree in an underserved area for 10-15yrs, that's a huge commitment, and in those circumstances, if you're willing to give up that much of your life and lost earning potential, I think you've earned debt forgiveness. My guess is that if that's where the bar is set, most educated college grads will realize that they're better off gunning for a higher salaried job and paying off the debt on their own.

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[aneftp]

Large debts are assigned to individuals on a daily basis in the way of mortgages. The relative risk of a single mortgage is offset by bundling thousands of them together in the form of securities. As long as we don't have a subprime mortgage equivalent in terms of student loans, then there should be no issue. I do concede that this is not an impossibility as long as we keep giving govt loans to for-profit schools, but I'm not gonna go there.

(just to play a little devil's advocate here) I think your proposed system would work great for residents of states with robust public university systems (CA, WI, MN, NY), but seriously kneecap residents in other states. With that system you're going to shunt large numbers of people towards the public universities (clearly by design). It is unlikely that the public schools could absorb the influx of students. Thus there's a fair chance that we'll just end up with a tiered education system. Private schools are left exclusively to the upper class, while middle class students who might have gone private instead go public, thus displacing the first-generation college students from positions that they might otherwise have had at a public university.




Maybe the answer to your concerns could be that loan forgiveness is only open to certain majors/degrees? And even if they don't have one of those majors, if an individual utilizes their degree in an underserved area for 10-15yrs, that's a huge commitment, and in those circumstances, if you're willing to give up that much of your life and lost earning potential, I think you've earned debt forgiveness. My guess is that if that's where the bar is set, most educated college grads will realize that they're better off gunning for a higher salaried job and paying off the debt on their own.

They have loan forgiveness in certain degrees (aka BSN) if you do govt service for 10 years already.

Now some Crnas may game the system and claim BSN status to have their crnas tuition waived as well working for the VA system for 10 years.

 

[BLADEMDA]

They have loan forgiveness in certain degrees (aka BSN) if you do govt service for 10 years already.

Now some Crnas may game the system and claim BSN status to have their crnas tuition waived as well working for the VA system for 10 years.

I know a few CRNAs who are working the system hard; some received a large sum of money from our govt. after graduation and then were told to make minimum payments. Others are going to make payments for 10 years after which the remainder of their student loans would be forgiven.

The taxpayer is footing the bill for hundreds of millions of dollars for 6 figure income CRNAs.
This is another reason I do not support our current Student Loan program and believe it should be privatized.

 

[BLADEMDA]

http://www.benefits.gov/benefits/benefit-details/449


The Nursing Education Loan Repayment Program will pay 60 percent of the participant's total qualifying loan balance in two years and an additional 25 percent of the original balance for an optional third year.

Nurse practitioners and other advanced practice nurses are encouraged to apply.

 

[BLADEMDA]

FYI,

Most Public Hospitals and non profit hospitals qualify for the free Obama money; the loan forgiveness after 10 years requires the CRNA to work at a public hospital or non profit as an employee (private companies staffing the OR at these hospitals means the CRNA can't qualify for the 10 year loan forgiveness program).

 

[Biochemist21]

http://www.benefits.gov/benefits/benefit-details/449


The Nursing Education Loan Repayment Program will pay 60 percent of the participant's total qualifying loan balance in two years and an additional 25 percent of the original balance for an optional third year.

Nurse practitioners and other advanced practice nurses are encouraged to apply.

Although nurses only qualify for this program if they work at "designated critical shortage facilities" (not just any nonprofit hospital), I agree that the amount forgiven and short timeline which it is forgiven is pretty surprising.

 

[aneftp]

Although nurses only qualify for this program if they work at "designated critical shortage facilities" (not just any nonprofit hospital), I agree that the amount forgiven and short timeline which it is forgiven is pretty surprising.

They need to re categorized "critical shortage facilitie

Most are in urban areas (aka population centers with more than 500k- millions of people)

For me it's ridiculous to consider an urban area critical shortage. In this dAy and age those places those places are adequate staffed and shouldn't need taxpayer money for loan forgiveness to work there.

 

[Spinach Dip]

They need to re categorized "critical shortage facilities"

Most are in urban areas (aka population centers with more than 500k- millions of people)

For me it's ridiculous to consider an urban area critical shortage. In this dAy and age those places those places are adequate staffed and shouldn't need taxpayer money for loan forgiveness to work there.

Then the question becomes, "how does a hospital become a 'critical shortage facility'?"

To answer that, we have to delve into gov't bureaucracy which is only tangentially related to the topic of student loans.

 

[BLADEMDA]

Then the question becomes, "how does a hospital become a 'critical shortage facility'?"

To answer that, we have to delve into gov't bureaucracy which is only tangentially related to the topic of student loans.

95-99% of all hospitals qualify for the Free Obama money; I know this for a fact as dozens of CRNAs have qualified in Orlando, Jax, Tampa and Miami.

The student loan program is corrupt and poorly run. Is anyone really surprised to see the Federal govt. waste billions of taxpayer dollars on another bloated program?

Privatize the Student loan business and the cost of tuition will go down or at least level out.