On The Question of: Shall the Debt Be Repayed?

[jambro]

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I mean, they could charge less to recoup the money. To offset that, they could lower the reimbursements on residency salaries. Seems fair.

Alternatively, they could get out of it all together, let the banks charge you whatever and let residencies adopt whatever model they like. Also fair.

There's a million other places to make up the revenue (assuming that even needs to be done) - silly to assume it has to be made up by reducing resident salaries even further. Btw, what do you mean by reimbursement on residency salaries? Do you mean the medicare funding per spot?

Iirc the changes in graduate student loans were to make up some revenue in some other unrelated part of the budget

 

[SurfingDoctor]

There's a million other places to make up the revenue (assuming that even needs to be done) - silly to assume it has to be made up by reducing resident salaries even further. Btw, what do you mean by reimbursement on residency salaries? Do you mean the medicare funding per spot?

Iirc the changes in graduate student loans were to make up some revenue in some other unrelated part of the budget

Yes, Medicare funding of resident spots.

Of course there’s other places to make up revenue that’s more palatable to you, but maybe not others. There’s always a give and take.

 

[acstylin]

There's a million other places to make up the revenue

Do you mean like- making your debt someone else’s problem again? This time it’s different though. They can be outside of medicine.

 

[SurfingDoctor]

INB4 “taxes are theft”

 

[Goro]

INB4 “taxes are theft”

Maybe not. SB247 no longer posts here

 

[SurfingDoctor]

Maybe not. SB247 no longer posts here

I know. Sad. I hoping someone to pick up the Ron Swanson mantal.

 

[Lawpy]

Maybe not. SB247 no longer posts here

We are losing too many valuable members 🙁

 

[Matthew9Thirtyfive]

I mean, they could charge less to recoup the money. To offset that, they could lower the reimbursements on residency salaries. Seems fair.

Alternatively, they could get out of it all together, let the banks charge you whatever and let residencies adopt whatever model they like. Also fair.

I think some amount of interest is fair to make sure they recoup what they lent, but the government shouldn’t be making money off us like a bank.

 

[SurfingDoctor]

I think some amount of interest is fair to make sure they recoup what they lent, but the government shouldn’t be making money off us like a bank.

Again, you want them to break even... cool, but then something in the system gets cut elsewhere. The question would be where? Since these loans are used for education to get medical jobs (at least in this specific thread), I'd imagine they'd be less interesting in funding medical jobs if they are receiving less pay back for doing so. I mean, I guess they could cut elsewhere, but might as well keep it industry related.

 

[Matthew9Thirtyfive]

Again, you want them to break even... cool, but then something in the system gets cut elsewhere. The question would be where? Since these loans are used for education to get medical jobs (at least in this specific thread), I'd imagine they'd be less interesting in funding medical jobs if they are receiving less pay back for doing so. I mean, I guess they could cut elsewhere, but might as well keep it industry related.

Why do they need to cut elsewhere if they are breaking even?

 

[Lem0nz]

I’m with the OP, entire system is BS.

The only clear solution is medical students can’t be trusted to make financial decisions and therefore we should not allow loans for Med school anymore, ever. You have to pay for it up front so that there’s no chance of going into debt. This is the only thing that is fair and safe and equitable for these poor, unsuspecting victim medical students we are forcing to do medicine.

barbaric.

 

[SurfingDoctor]

Why do they need to cut elsewhere if they are breaking even?

Well, the surplus funds things. I don't think I need to explain how revenues and expenses work.

 

[SurfingDoctor]

I’m with the OP, entire system is BS.

The only clear solution is medical students can’t be trusted to make financial decisions and therefore we should not allow loans for Med school anymore, ever. You have to pay for it up front so that there’s no chance of going into debt. This is the only thing that is fair and safe and equitable for these poor, unsuspecting victim medical students we are forcing to do medicine.

barbaric.

 

[Matthew9Thirtyfive]

Well, the surplus funds things. I don't think I need to explain how revenues and expenses work.

So they need to charge me 6% interest to fund residency spots?

 

[Chemist0157]

I think interest rates are higher because no medical student is really being evaluated from a financial standpoint. They get into medical school, and they get a loan at the same rate and price everyone else does. There is some risk there for banks. Banks don’t have the capacity to evaluate who is a safe and not safe bet. There needs to be some ROI.

Now I’m not sophisticated to know how high an interest rate should be. The banks do seem to be getting quite a deal right now. Maybe have it mirror what an interest rate on a mortgage should be on someone with good credit...4%ish? That would help, but tuition is just high to start with.

If you want to address tuition, then you have to address that specifically. Loan forgiveness still has the same problems at 100k or 200k or 500k debt. Some issues are being conflated here.

 

[lumya]

I’m with the OP, entire system is BS.

The only clear solution is medical students can’t be trusted to make financial decisions and therefore we should not allow loans for Med school anymore, ever. You have to pay for it up front so that there’s no chance of going into debt. This is the only thing that is fair and safe and equitable for these poor, unsuspecting victim medical students we are forcing to do medicine.

barbaric.

Can't wait for 100% of med school students to have physician/professional parents instead of the 60% now!

 

[Gardenea]

The only clear solution is medical students can’t be trusted to make financial decisions and therefore we should not allow loans for Med school anymore, ever. You have to pay for it up front so that there’s no chance of going into debt. This is the only thing that is fair and safe and equitable for these poor, unsuspecting victim medical students we are forcing to do medicine.

What about the people who are willing to pay back their loans if med-school doesn't go the way they planned? Or what about the people who are willing to pay their loans once they get out of med-school and become successful? Wouldn't that prevent accountable and responsible students from pursing their passions?

 

[Lem0nz]

Can't wait for 100% of med school students to have physician/professional parents instead of the 60% now!

Fair and equitable. It’s the only way. Loans are unreasonable and dangerous.

 

[Lem0nz]

 

[beattheprocess]

Fair and equitable. It’s the only way. Loans are unreasonable and dangerous.

Why stop there?

 

[VA Hopeful Dr]

I think interest rates are higher because no medical student is really being evaluated from a financial standpoint. They get into medical school, and they get a loan at the same rate and price everyone else does. There is some risk there for banks. Banks don’t have the capacity to evaluate who is a safe and not safe bet. There needs to be some ROI.

Now I’m not sophisticated to know how high an interest rate should be. The banks do seem to be getting quite a deal right now. Maybe have it mirror what an interest rate on a mortgage should be on someone with good credit...4%ish? That would help, but tuition is just high to start with.

If you want to address tuition, then you have to address that specifically. Loan forgiveness still has the same problems at 100k or 200k or 500k debt. Some issues are being conflated here.

Historically, it did that. Up until the recession, mortgage rates bounced between 5-7.X%. Way way higher in the 80s, but the 90s and most of 2000s were in that range. So 6% on student loans was in the same ballpark.

 

[SurfingDoctor]

So they need to charge me 6% interest to fund residency spots?

 

[Chemist0157]

Historically, it did that. Up until the recession, mortgage rates bounced between 5-7.X%. Way way higher in the 80s, but the 90s and most of 2000s were in that range. So 6% on student loans was in the same ballpark.

I remember going through and the stafford loans were 6.8% I think. Grad plus was 8.5% which seemed pretty high...had another small loan that I think was 4% in school then bumped up to 8% after. I mean you can get that kind of return out of a mutual or index fund, and that kind of thing seems less risky compared to loaning a large sum to some 22 year old who doesn’t know how to spell IRA so maybe 8% interest for a student is a deal. Think tuition remains the issue not really interest rates.

 

[jambro]

Well, the surplus funds things. I don't think I need to explain how revenues and expenses work.

The federal government is not the same as a household or a business... if it decided to lower interest rates on student loans you don't necessarily need to raise the money elsewhere. That said, there are many, many ways in which the government can raise money that is not on the backs of students trying to get an education, and especially those who are training to provide a vital service to its citizens

 

[dpmd]

if the government didn't charge an arm and a leg for interest that would also be immensely helpful

Student loan interest is incredibly low for being unsecured debt.

 

[SurfingDoctor]

The federal government is not the same as a household or a business... if it decided to lower interest rates on student loans you don't necessarily need to raise the money elsewhere. That said, there are many, many ways in which the government can raise money that is not on the backs of students trying to get an education, and especially those who are training to provide a vital service to its citizens

Where should they cut cost then?

 

[VA Hopeful Dr]

I remember going through and the stafford loans were 6.8% I think. Grad plus was 8.5% which seemed pretty high...had another small loan that I think was 4% in school then bumped up to 8% after. I mean you can get that kind of return out of a mutual or index fund, and that kind of thing seems less risky compared to loaning a large sum to some 22 year old who doesn’t know how to spell IRA so maybe 8% interest for a student is a deal. Think tuition remains the issue not really interest rates.

Yeah mine were 6.8%, state school so didn't go anything beyond Stafford.

I don't think a flat 6% is unfair. That's a pretty low rate all things considered.

 

[VA Hopeful Dr]

The federal government is not the same as a household or a business... if it decided to lower interest rates on student loans you don't necessarily need to raise the money elsewhere. That said, there are many, many ways in which the government can raise money that is not on the backs of students trying to get an education, and especially those who are training to provide a vital service to its citizens

A vital service that we are paid handsomely to provide...

 

[jambro]

Student loan interest is incredibly low for being unsecured debt.

Yeah but you also can't really go bankrupt so it's not quite the same as unsecured debt; also physicians are obviously extremely likely to pay off their debt yet interest rates are the same as other grad students, so clearly we're not really talking about ability to pay off the debt in relation to the interest rate.

Also, again compared to Australia, our student loans are really high. I would argue that student loan interest should be considered in its own category when compared to other types of loans

 

[jambro]

A vital service that we are paid handsomely to provide...

True, but that's true either way. Again, not saying that for the majority of people it's not a good deal, it usually is even with tuition and interest taken into account. Also an issue for people who don't make as much money as physicians do, but who still want to get an education

 

[dpmd]

I think interest rates are higher because no medical student is really being evaluated from a financial standpoint. They get into medical school, and they get a loan at the same rate and price everyone else does. There is some risk there for banks. Banks don’t have the capacity to evaluate who is a safe and not safe bet. There needs to be some ROI.

Now I’m not sophisticated to know how high an interest rate should be. The banks do seem to be getting quite a deal right now. Maybe have it mirror what an interest rate on a mortgage should be on someone with good credit...4%ish? That would help, but tuition is just high to start with.

If you want to address tuition, then you have to address that specifically. Loan forgiveness still has the same problems at 100k or 200k or 500k debt. Some issues are being conflated here.

A mortgage is a secured loan, meaning when the person doesn't pay the lender gets something of similar value to offset that. You would have to compare it to unsecured loans for people with minimal credit history in which case rates would be much higher for everyone with the exception of those who built up good credit before starting med school. Even then unsecured loans could still run in the double digit interest for the amount of money requested and the long time frame before any payments are paid.

 

[RangerBob]

Student loan interest is incredibly low for being unsecured debt.

The program used to be seen as making the government a lot of money. When that was the case there was a fair argument to lower rates.

Lately, now that they take into account expected PSLF and IBR/PAYE/REPAYE forgiveness, it’s expected to be a huge money-loser and liability for the taxpayer.

Especially us since we’re in the 1-5%...

 

[jambro]

The program used to be seen as making the government a lot of money. When that was the case there was a fair argument to lower rates.

Lately, now that they take into account expected PSLF and IBR/PAYE/REPAYE forgiveness, it’s expected to be a huge money-loser and liability for the taxpayer.

Especially us since we’re in the 1-5%...

I'd be surprised if that many physicians really got PSLF and other forms of forgiveness; and with those other forms of forgiveness the physicians still have to pay more than they took out and there's a tax bomb that could easily be taxed at the highest federal marginal rates too.

 

[dpmd]

Yeah but you also can't really go bankrupt so it's not quite the same as unsecured debt; also physicians are obviously extremely likely to pay off their debt yet interest rates are the same as other grad students, so clearly we're not really talking about ability to pay off the debt in relation to the interest rate.

Also, again compared to Australia, our student loans are really high. I would argue that student loan interest should be considered in its own category when compared to other types of loans

We are speaking of loans offered to any student. If you want to discuss changing things so that certain degrees get charged less than others that is fine, but that isn't the case now. Also , you may not be able to discharge the loans through bankruptcy, but one can defer payments indefinitely if one doesn't earn much money and if one becomes permanently disabled or dies the debt is discharged. So in that sense it is much worse than normal unsecured debt.

 

[calivianya]

You guys ever tried taking out any other kind of loan with no collateral?

With an 800+ credit score, I got offered 11% on a personal loan once when I briefly needed one. That crap goes up to 30%+ if you have bad credit. 6-8% for a loan with no collateral items to be leveraged/repossessed is actually really, really low. Astronomically low. You will never find another no-collateral loan with rates this low, for any reason. So I don’t really see why people are saying that 6-8% is high - it’s really not.

Also, the 6-8% interest probably is for breaking even. Like I said earlier, someone hypothetically making $25k a year would only have to pay $78/month on an income-based repayment loan. That’s a huge loss that the government will never, ever get back if that person has $100k+ in loans... that would take 106 years to pay back if no interest accrued at all, and obviously nobody is living that long. Not to mention the people who get their loans forgiven through something like PSLF - that money just straight up disappears and the government never gets it back.

I haven’t seen the numbers, but IBR has got to be a huge whopping loss to the government in a lot of situations. Just saying, I know a ton of people who graduated with $100k+ in debt for their liberal arts degree who are doing something like stocking shelves at the grocery store or Home Depot, or teaching for $30k/year. The feds will literally never recoup what they loaned those people.

 

[RangerBob]

I'd be surprised if that many physicians really got PSLF and other forms of forgiveness; and with those other forms of forgiveness the physicians still have to pay more than they took out and there's a tax bomb that could easily be taxed at the highest federal marginal rates too.

I’m talking about all borrowers-not just docs.

Physicians will likely comprise a decent percentage of those who get PSLF. 2/3 of the jobs I applied for would’ve been eligible.

We will certainly disproportionally benefit given our high borrowing amount.

As it is, PSLF is tax-free, and for the next few years, any form or forgiveness is.

 

[ThoracicGuy]

Is there an iteration of the game whereby somehow the banks/schools/lenders Lose? Just asking?

If someone dies, the debts don't follow. Then the banks lose.

 

[Wordead]

Classic SDN

Groan - Im not saying that's true at all, Im just illustrating the slippery slope that is probably going result in effects counter to what you want.

 

[Phloston]

wait can we actually discharge debts by doing that

The US has too many financial issues to notice your loans nor do they care. As the expression goes, if you don't pay your loans, they just magically go away. Just practice in Australia or something.

 

[WingZeroMD]

he bank isn't "winning", they are getting the money back that you borrowed.

A loan, as defined by the oxford dictionary is "a thing that is borrowed, especially a sum of money that is expected to be paid back with interest."

It is not "money expected to be paid back IF your plan goes as you want it to".

This argument is extremely illogical. This is like saying, "I got a mortgage for a $500k home but I couldn't keep my job (due to poor performance) so I am going to need the bank to take the hit on this one."
Maybe URMs since they might not have gotten in on their own merits. Not sure your solution is going to help you long term.
The classic mentality of this generation: I mess up but it’s not my fault and someone else should fix it!

Game, Scheme, Whatever

The fact is that regardless of student outcome, the bank/lender still feels it proper to ask for the money back. Not acceptable to me

At how are Student loans Equatable to bank Loans? For those in the back here or those old enough, can you please elaborate on the sort of extensive checking lenders do before giving you a mortgage of 500K. My Guess is they Better? WHY? BECAUSE ITS A LOAN OF A FREAKING HALF MILLION DOLLARS!!
Also If the Loan doesn't work out, BANKRUPTCY is always there. You can always walk away from the house or sell the house and try and get the money back that way. There was that for students but it was taken away (as some of you may or may not know)

We can not compare house loans to school loans.

So we have a situation whereby an Unmatched Student of George Washington owes 350K, can't get a job but can't discharge the debt. And you think you high minded "Pay Back the Loan" talk is going to do anything for him. Nope.. If uncertainty has been introduced in to the once iron clad assumption the the can pay (by saying the match is not guaranteed) then uncertainty should also exist be on whether the bank gets is money.

When are we going to talk about giving a 22 year old, with no history of earning, no history of making successful business, no credit, no history of repeatable and observable business acumen a loan of 350K? And how Schools are taking advantage of the loan system. It looks like banks give these loans thinking its a sure bet. They haven't got the memo that there are no guarantees. If you loan a 22 yo THAT KIND OF MONEY without something IRONCLAD undergirding it, iono what to tell you, contract truthers be damned

Keep focusing on the lowly student and beating her over the head with "yOu sIGNEd tHe conTRac!!" They will soon get into Congress or into the halls of the California Assembly and flip everything on its head.

 

[YCAGA]

I haven't read this entire thread carefully because the starting concept is pretty laughable, but a few thoughts based on some stuff I have skimmed.

6-7% is pretty ridiculous for a Western country with the GDP/capita of the US. Basically every other Western country gives student loans with sub-inflation rates, sometimes even 0% interest. Either way, the government is losing money in those countries because they care more about educating their population than making a profit off student loans.

Even though 6-7% is ridiculous, during residency you actually pay half the advertised rate if you do the REPAYE plan, and there is no reason to not use that plan. Then as an attending it is more like 3-3.5% refinanced since with that attending $$$ you won't qualify for REPAYE anymore (hopefully). And while 3-3.5% is not as good as some other countries, other countries aren't paying their family medicine doctors and pediatricians $200-250k. So the interest is not really a huge deal when you figure you pay 3-3.5% versus 0-2% in the grand scheme of things. The people really getting screwed are professions like pharmacists or vets that pay these same interest rates for huge debt burdens but have MUCH less disposable income to pay off loans rapidly. But this is a thread about physicians so we will just put an F in the chat for our non-physician colleagues and move on lol.

DO's with a COMLEX Level 1 in the 6th-17th percentile (so 401-450 and 400 is the lowest passing score) have about a 90% chance of matching family medicine and this is without controlling for initially failing level 1, malignant personalities, clerkship grades, step 2/level 2 scores, failed classes/years, etc. So basically if you are in the bottom 15% of students within the 2nd tier medical degree in the US, you still have a 9/10 chance of matching into something. How could the system be made any more fair...? Match 100% of students even if they failed USMLE exams 3 times, took 7 years to graduate, and have a personality disorder? Because that is the type of students that NEVER match into SOMETHING.

 

[YCAGA]

The US has too many financial issues to notice your loans nor do they care. As the expression goes, if you don't pay your loans, they just magically go away. Just practice in Australia or something.

If you don’t match in the US, you sure as heck aren’t going to get a residency spot in Australia, assuming you aren’t an Aus/NZ citizen (in which case you messed up by coming to the US to begin with).

Germany is an actual option if you can complete a PGY-1 intern year in the US and pass Step 3. You would need to learn German to C1 on the CEFR scale, but that’s doable in a year of full time study. Beats being unemployed for the rest of your life. After 7-8 years in Germany, you can become a German citizen, renounce your US citizenship and tell the federal government to kiss your German behind. Or do income based repayment using your adjusted gross income with the foreign income exclusion, pay $0-500/month for 25 years, and then have your student loan debt forgiven. Prove you can’t take the income tax hit in year 25 and also have that forgiven too. Worst case you get put into an IRS payment plan, at which point you tell the IRS to come and get you in Europe if they want you to pay so bad.

 

[theendisnigh]

If you don’t match in the US, you sure as heck aren’t going to get a residency spot in Australia, assuming you aren’t an Aus/NZ citizen (in which case you messed up by coming to the US to begin with).

Germany is an actual option if you can complete a PGY-1 intern year in the US and pass Step 3. You would need to learn German to C1 on the CEFR scale, but that’s doable in a year of full time study. Beats being unemployed for the rest of your life. After 7-8 years in Germany, you can become a German citizen, renounce your US citizenship and tell the federal government to kiss your German behind. Or do income based repayment using your adjusted gross income with the foreign income exclusion, pay $0-500/month for 25 years, and then have your student loan debt forgiven. Prove you can’t take the income tax hit in year 25 and also have that forgiven too. Worst case you get put into an IRS payment plan, at which point you tell the IRS to come and get you in Europe if they want you to pay so bad.

Just gotta say I've seen you abash the system on a couple of different forums, I like your style and support your bid for president.

 

[Matthew9Thirtyfive]

You guys ever tried taking out any other kind of loan with no collateral?

With an 800+ credit score, I got offered 11% on a personal loan once when I briefly needed one. That crap goes up to 30%+ if you have bad credit. 6-8% for a loan with no collateral items to be leveraged/repossessed is actually really, really low. Astronomically low. You will never find another no-collateral loan with rates this low, for any reason. So I don’t really see why people are saying that 6-8% is high - it’s really not.

Also, the 6-8% interest probably is for breaking even. Like I said earlier, someone hypothetically making $25k a year would only have to pay $78/month on an income-based repayment loan. That’s a huge loss that the government will never, ever get back if that person has $100k+ in loans... that would take 106 years to pay back if no interest accrued at all, and obviously nobody is living that long. Not to mention the people who get their loans forgiven through something like PSLF - that money just straight up disappears and the government never gets it back.

I haven’t seen the numbers, but IBR has got to be a huge whopping loss to the government in a lot of situations. Just saying, I know a ton of people who graduated with $100k+ in debt for their liberal arts degree who are doing something like stocking shelves at the grocery store or Home Depot, or teaching for $30k/year. The feds will literally never recoup what they loaned those people.

If 6% is what they need to break even, so be it. But I’d like to see the numbers.

 

[calivianya]

If 6% is what they need to break even, so be it. But I’d like to see the numbers.

I would, too. I would love more transparency with this whole process.

 

[tony101]

You guys ever tried taking out any other kind of loan with no collateral?

With an 800+ credit score, I got offered 11% on a personal loan once when I briefly needed one. That crap goes up to 30%+ if you have bad credit. 6-8% for a loan with no collateral items to be leveraged/repossessed is actually really, really low. Astronomically low. You will never find another no-collateral loan with rates this low, for any reason. So I don’t really see why people are saying that 6-8% is high - it’s really not.

Also, the 6-8% interest probably is for breaking even. Like I said earlier, someone hypothetically making $25k a year would only have to pay $78/month on an income-based repayment loan. That’s a huge loss that the government will never, ever get back if that person has $100k+ in loans... that would take 106 years to pay back if no interest accrued at all, and obviously nobody is living that long. Not to mention the people who get their loans forgiven through something like PSLF - that money just straight up disappears and the government never gets it back.

I haven’t seen the numbers, but IBR has got to be a huge whopping loss to the government in a lot of situations. Just saying, I know a ton of people who graduated with $100k+ in debt for their liberal arts degree who are doing something like stocking shelves at the grocery store or Home Depot, or teaching for $30k/year. The feds will literally never recoup what they loaned those people.

What a weird argument. There is a large difference between a personal loan for a different car and literally having no choice (unless you come from an affluent family) but to take the money to acquire an education. (Which is pretty much a necessity in our society)

This is why K-12 is paid by property taxes and why you don't need to whip out a checkbook to pay for a child to go to school. This mindset is the same one that should be applied to college and graduate school. (Many modern nations worldwide have either FAR lower costs, easier payment plans, or tax-paid college in general, especially when speaking about Medical schools). Education is basically required to make any income in this nation to be able to survive, have healthcare (you know, not to die or go bankrupt if you get violently sick), and buy a home (to start building wealth). Yes, yes, I know there are exceptions, but again high school degrees only, on average, have FAR lower income compared to other individuals. Stats below:

HigherEdInfo - NCHEMS

www.higheredinfo.org

The difference in Median Earnings Estimate, High School Diploma, and Bachelors Degree:
In my state of CA: 32,995, which is massive.
Or
Median usual weekly earnings of full-time wage
Q3: Bachelors: 1281(1.7x higher) or high school 749

Median weekly earnings $606 for high school dropouts, $1,559 for advanced degree holders

In the third quarter of 2019, full-time workers age 25 and older had median weekly earnings of $975. Those without a high school diploma had median weekly earnings of $606, compared with $749 for high school graduates (no college), and $874 for workers with some college or an associate degree.

www.bls.gov

To have a middle-class job, you basically require a degree, especially since this nation lacks so many social safety nets that every other modern nation has.

I don't get why people keep talking about liberal art degrees. Suppose you go to undergraduate and get a bachelors to be a teacher, which is one of the world's most important jobs. You can easily end up in debt 80-100k if you need to pull out all loans. Then you have a teacher whose purpose is to help young minds develop be held down by loan payments that can cripple them for their entire lives. The United States does a horrible job incentivizing many of these positions that are so important since individuals need to think about the crippling debt that would occur.

Not to mention, the cost of undergraduate along is extremely cheap for a tax cost.

Tuition-Free College Could Cost Less Than You Think (Published 2019)

Making a tuition-free college education available to everyone who wants one is an immensely worthwhile — and realistic — goal, a Harvard economist says.

www.nytimes.com

Revenues of public degree-granting postsecondary institutions, by source of revenue and level of institution: Selected years, 2007-08 through 2016-17

The primary purpose of the Digest of Education Statistics is to provide a compilation of statistical information covering the broad field of American education from prekindergarten through graduate school. The Digest includes a selection of data from many sources, both government and private...

nces.ed.gov

"Eliminating tuition at all public colleges and universities would cost at least $79 billion a year, according to the most recent Department of Education data, and taxpayers would need to foot the bill.'
To put that in perspective, that would have been less than the US's military increase in 1 year alone. Doing something like this sounds like a no-brainer to me since it would benefit society, candidates, and future generations.

Anyways, education should not be compared to most items that can be bought by a persona loan. This isn't a new truck you want because you want the fastest horsepower. Education has always been different and always will be. (Similar to healthcare). It's time people stop treating a personal loan for a truck or car even close to the ability to rise out of poverty through education.

Edit: Note that I used a car for the example of a personal loan. A personal loan can be used for several different things. I was just giving an example of where a personal loan can be used. I am merely pointing out the point that education is not just some other thing you can buy on the market and should never be treated as such.

 

[SurfingDoctor]

What a weird argument. There is a large difference between a personal loan for a different car and literally having no choice (unless you come from an affluent family) but to take the money to acquire an education. (Which is pretty much a necessity in our society)

This is why K-12 is paid by property taxes and why you don't need to whip out a checkbook to pay for a child to go to school. This mindset is the same one that should be applied to college and graduate school. (Many modern nations worldwide have either FAR lower costs, easier payment plans, or tax-paid college in general, especially when speaking about Medical schools). Education is basically required to make any income in this nation to be able to survive, have healthcare (you know, not to die or go bankrupt if you get violently sick), and buy a home (to start building wealth). Yes, yes, I know there are exceptions, but again high school degrees only, on average, have FAR lower income compared to other individuals. Stats below:

HigherEdInfo - NCHEMS

www.higheredinfo.org

The difference in Median Earnings Estimate, High School Diploma, and Bachelors Degree:
In my state of CA: 32,995, which is massive.
Or
Median usual weekly earnings of full-time wage
Q3: Bachelors: 1281(1.7x higher) or high school 749

Median weekly earnings $606 for high school dropouts, $1,559 for advanced degree holders

In the third quarter of 2019, full-time workers age 25 and older had median weekly earnings of $975. Those without a high school diploma had median weekly earnings of $606, compared with $749 for high school graduates (no college), and $874 for workers with some college or an associate degree.

www.bls.gov

To have a middle-class job, you basically require a degree, especially since this nation lacks so many social safety nets that every other modern nation has.

I don't get why people keep talking about liberal art degrees. Suppose you go to undergraduate and get a bachelors to be a teacher, which is one of the world's most important jobs. You can easily end up in debt 80-100k if you need to pull out all loans. Then you have a teacher whose purpose is to help young minds develop be held down by loan payments that can cripple them for their entire lives. The United States does a horrible job incentivizing many of these positions that are so important since individuals need to think about the crippling debt that would occur.

Not to mention, the cost of undergraduate along is extremely cheap for a tax cost.

Tuition-Free College Could Cost Less Than You Think (Published 2019)

Making a tuition-free college education available to everyone who wants one is an immensely worthwhile — and realistic — goal, a Harvard economist says.

www.nytimes.com

Revenues of public degree-granting postsecondary institutions, by source of revenue and level of institution: Selected years, 2007-08 through 2016-17

The primary purpose of the Digest of Education Statistics is to provide a compilation of statistical information covering the broad field of American education from prekindergarten through graduate school. The Digest includes a selection of data from many sources, both government and private...

nces.ed.gov

"Eliminating tuition at all public colleges and universities would cost at least $79 billion a year, according to the most recent Department of Education data, and taxpayers would need to foot the bill.'
To put that in perspective, that would have been less than the US's military increase in 1 year alone. Doing something like this sounds like a no-brainer to me since it would benefit society, candidates, and future generations.

Anyways, education should not be compared to most items that can be bought by a persona loan. This isn't a new truck you want because you want the fastest horsepower. Education has always been different and always will be. (Similar to healthcare). It's time people stop treating a personal loan for a truck or car even close to the ability to rise out of poverty through education.

Edit: Note that I used a car for the example of a personal loan. A personal loan can be used for several different things. I was just giving an example of where a personal loan can be used. I am merely pointing out the point that education is not just some other thing you can buy on the market and should never be treated as such.

People are probably talking about Liberal Arts degrees because they make up an overwhelming majority of junk degrees. Teachers, sure I agree with you there. I think teacher pay should be boosted if they are spending their lives to educate the young. That probably is a calling more then any other profession I can think of and totally should be supported through taxpayer funding. However, there's also people, probably more so, that get degrees in fashion design and Greek philosophy and cooking. The taxpayers shouldn't be on the hook for that at all. Want to learn about Greek philosophy? Awesome. Go to your local library and check out a book.

As far as choice, I kinda agree, except you have the choice to be thoughtful and pick an education that is affordable to you and will have a good ROI for your future. The challenge is that most of education, the costs are inflated in proportion to what skills you actually gain and that the people seeking to gain skills are too young or naive to realize that. That's the real problem.

 

[Phloston]

If you don’t match in the US, you sure as heck aren’t going to get a residency spot in Australia, assuming you aren’t an Aus/NZ citizen (in which case you messed up by coming to the US to begin with).

Germany is an actual option if you can complete a PGY-1 intern year in the US and pass Step 3. You would need to learn German to C1 on the CEFR scale, but that’s doable in a year of full time study. Beats being unemployed for the rest of your life. After 7-8 years in Germany, you can become a German citizen, renounce your US citizenship and tell the federal government to kiss your German behind. Or do income based repayment using your adjusted gross income with the foreign income exclusion, pay $0-500/month for 25 years, and then have your student loan debt forgiven. Prove you can’t take the income tax hit in year 25 and also have that forgiven too. Worst case you get put into an IRS payment plan, at which point you tell the IRS to come and get you in Europe if they want you to pay so bad.

My posts have been partially facetious. I graduated med school in Australia and am aware of the system there. The insinuation is the OP can search for an escape hatch if he/she wants to go that route. Flee the country and then, yeah... where'd the debt go.

 

[calivianya]

What a weird argument. There is a large difference between a personal loan for a different car and literally having no choice (unless you come from an affluent family) but to take the money to acquire an education. (Which is pretty much a necessity in our society)

This is why K-12 is paid by property taxes and why you don't need to whip out a checkbook to pay for a child to go to school. This mindset is the same one that should be applied to college and graduate school. (Many modern nations worldwide have either FAR lower costs, easier payment plans, or tax-paid college in general, especially when speaking about Medical schools). Education is basically required to make any income in this nation to be able to survive, have healthcare (you know, not to die or go bankrupt if you get violently sick), and buy a home (to start building wealth). Yes, yes, I know there are exceptions, but again high school degrees only, on average, have FAR lower income compared to other individuals. Stats below:

HigherEdInfo - NCHEMS

www.higheredinfo.org

The difference in Median Earnings Estimate, High School Diploma, and Bachelors Degree:
In my state of CA: 32,995, which is massive.
Or
Median usual weekly earnings of full-time wage
Q3: Bachelors: 1281(1.7x higher) or high school 749

Median weekly earnings $606 for high school dropouts, $1,559 for advanced degree holders

In the third quarter of 2019, full-time workers age 25 and older had median weekly earnings of $975. Those without a high school diploma had median weekly earnings of $606, compared with $749 for high school graduates (no college), and $874 for workers with some college or an associate degree.

www.bls.gov

To have a middle-class job, you basically require a degree, especially since this nation lacks so many social safety nets that every other modern nation has.

I don't get why people keep talking about liberal art degrees. Suppose you go to undergraduate and get a bachelors to be a teacher, which is one of the world's most important jobs. You can easily end up in debt 80-100k if you need to pull out all loans. Then you have a teacher whose purpose is to help young minds develop be held down by loan payments that can cripple them for their entire lives. The United States does a horrible job incentivizing many of these positions that are so important since individuals need to think about the crippling debt that would occur.

Not to mention, the cost of undergraduate along is extremely cheap for a tax cost.

Tuition-Free College Could Cost Less Than You Think (Published 2019)

Making a tuition-free college education available to everyone who wants one is an immensely worthwhile — and realistic — goal, a Harvard economist says.

www.nytimes.com

Revenues of public degree-granting postsecondary institutions, by source of revenue and level of institution: Selected years, 2007-08 through 2016-17

The primary purpose of the Digest of Education Statistics is to provide a compilation of statistical information covering the broad field of American education from prekindergarten through graduate school. The Digest includes a selection of data from many sources, both government and private...

nces.ed.gov

"Eliminating tuition at all public colleges and universities would cost at least $79 billion a year, according to the most recent Department of Education data, and taxpayers would need to foot the bill.'
To put that in perspective, that would have been less than the US's military increase in 1 year alone. Doing something like this sounds like a no-brainer to me since it would benefit society, candidates, and future generations.

Anyways, education should not be compared to most items that can be bought by a persona loan. This isn't a new truck you want because you want the fastest horsepower. Education has always been different and always will be. (Similar to healthcare). It's time people stop treating a personal loan for a truck or car even close to the ability to rise out of poverty through education.

Edit: Note that I used a car for the example of a personal loan. A personal loan can be used for several different things. I was just giving an example of where a personal loan can be used. I am merely pointing out the point that education is not just some other thing you can buy on the market and should never be treated as such.

Student loans do have more in common with personal loans than any other loan type due to the lack of collateral for both. I’m talking about the debt itself, not the purpose. Once the debt is there, it doesn’t really matter what you got it for... both of these types of loans are handcuffs that are difficult to remove once you opt to put them on. You had better be putting them on for a very good reason, whatever that reason is. (Personal loans should never be for buying anything, IMO)

Anyway, nobody should be paying $80-100k for a degree to get a K-12 teaching job either (with the way things are now). People need to plan out their education better every step of the way if they intend to do something low paying like teaching at the K-12 level in the US.

Now, I also think teacher pay should be much higher because I do agree that they’re probably the single most important job there is. No child is interested in learning without good teachers. I also think that degrees for occupations that are necessary for society to function should actually be free or extremely low cost.

But we have to work in the confines of the world we live in now, in which none of those things apply. And if you know you’re not going to have great job prospects with the degree you’re getting, or that your job prospects are great but the pay is extremely low, you should never, ever, ever be taking out $100k+ in loans to get there. It’s just not a good idea, financially speaking.

 

[NotAProgDirector]

This is an interesting thread, but difficult to follow since multiple ideas are being discussed: Removing debt for those that are unmatched, Removing debt for everyone, Lowering tuition, and lowering interest rates on student loans. The situation is complicated and "fixing" it involves fixing lots of moving pieces at once -- tuition increases are at least partially due to the infinite availability of loan dollars, and the (apparent) infinite willingness of students to pay tuition.

But I do wonder whether loan forgiveness for the chronically unmatched could be addressed somewhat independent of all of those other issues. People who complete medical school but ultimately can't get a residency spot, for whatever reason, have great difficulty ever paying back their loans. Yes, they can stay in IBR for 25 years and have their debt discharged -- but that seems like a poor option, is it really necessary for them to carry this debt for that period of time if they have no chance of paying it off?

Yet, simply forgiving the debt seems wrong too -- students did make a commitment to repay, and they also (often) have the degree which might be of some benefit. My idea, posted on another thread, was to "share the pain". The student keeps 10% of the debt that they are responsible for -- this should be a more reasonable amount of debt that they actually have a chance of paying off. The school they graduated from is on the hook for 30-45% of the cost [Not sure what the right amount is, would need economic modeling]. Schools need some skin in the game, and schools that chronically do not match students need to be impacted more. The Gov't is on the hook for the rest. If you'd like to add a slice of the pie for the lender, I'm fine with that also although that's likely going to lead to lenders shying away from higher risk students / schools which might be problematic.

There clearly would need to be additional details. Someone who graduates medical school with an MD/MBA and is off to Wall Street shouldn't be able to use this pathway -- probably some income sensitivity is needed. Plus, anyone who uses this pathway loses all CMS funding eligibility -- that should stop people from trying to claim that they "failed to match and need their debt erased" and then try to match to something else. Plus this should only be available 5 years after graduation -- people can use IBR until then.