Proposed cap on student loans: end of the diploma mills?

[projektreverb]

Just saw this pop up on cnn:

https://www-m.cnn.com/2019/03/18/po...n-limit-cap/index.html?r=https://www.cnn.com/

Looks like the administration is looking at caping federal plus loans. If this happens, it might be the end of the 200k diploma mills?

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[mentos]

Prepharms will still find a way to borrow more than what they can pay back. They'll apply for private loans or have their parents take out loans for them.

 

[BC_89]

This has been talked on in the past decade but glad it’s mentioned yet again in 2019:

Some research suggests that unlimited borrowing may encourage colleges to drive up the price of tuition

If they truly keep this in mind (as it currently exists) it would surely close down newer institutes deprived of easy access to government money. Lower accessibility = lower tuition rates. It’s always been the cardinal sin allowing young students a high access of high-interest gov loans. Doubt it happens by 2020 but it’s a good tease.

Arrogance will drive people to private loans though...

 

[Sine Cura]

Example:

California Northstate University is for-profit and students there can't take federal loans. Doesn't stop people from going there for both med and pharmacy school

 

[Modest_anteater]

Prepharms will still find a way to borrow more than what they can pay back. They'll apply for private loans or have their parents take out loans for them.

I feel bad all the parents that cosigned for these sucker loans. They kid gonna default then there goes their retirement. Parents of pharmDers gonna be eating dog food in their 80's.

 

[Modest_anteater]

This has been talked on in the past decade but glad it’s mentioned yet again in 2019:

Some research suggests that unlimited borrowing may encourage colleges to drive up the price of tuition

If they truly keep this in mind (as it currently exists) it would surely close down newer institutes deprived of easy access to government money. Lower accessibility = lower tuition rates. It’s always been the cardinal sin allowing young students a high access of high-interest gov loans. Doubt it happens by 2020 but it’s a good tease.

Arrogance will drive people to private loans though...

private loaners arn't stupid though. they will require collateral in the term of parent's houses and bank accounts. then it will get even uglier

 

[Corytrade]

Example:

California Northstate University is for-profit and students there can't take federal loans. Doesn't stop people from going there for both med and pharmacy school

Not sure how much you follow the school, but I heard on NPR they are going to build a multi story teaching hospital across the freeway. They must be making a killing. I should note they have a med school too.

 

[PharmtoCS]

Example:

California Northstate University is for-profit and students there can't take federal loans. Doesn't stop people from going there for both med and pharmacy school

The good thing I see about forcing students to take out private loans is that they will feel the pain as soon as their grace period ends and their payments are due. They won't be able to defer them by going on IBR or getting them forgiven tax free via PSLF.

 

[Gombrich12]

I think a cap on loans would've stopped so many schools opening, but now that they are here it won't get rid of them. What I am encouraged by is the talk of schools having to share the risk of any loans students take out.

 

[mentos]

I feel bad all the parents that cosigned for these sucker loans. They kid gonna default then there goes their retirement. Parents of pharmDers gonna be eating dog food in their 80's.

The parents are at fault too, they could easily Google this message board but they see pharmacists are on all those top ten highest paid profession lists and assume it's easy money.

 

[BidingMyTime]

The parents are at fault too, they could easily Google this message board but they see pharmacists are on all those top ten highest paid profession lists and assume it's easy money.

Every parent assumes their child is a super-duper special shining snowflake, that will be at the top, no matter what happens to everyone else.

 

[mustang sally]

Maybe it will screw people over even more, because private loans will still exist but only those who have good credit/or whose parents have good credit (ie. the relatively well-off) will be able to get these loans. It would be nice if it magically made tuition lower though.

 

[sozetone]

The good thing I see about forcing students to take out private loans is that they will feel the pain as soon as their grace period ends and their payments are due. They won't be able to defer them by going on IBR or getting them forgiven tax free via PSLF.

No but my student loan lawyer advised they are viewed as "private" loans, Like a bank loan. and CAN be discharged in bankruptcy. This being the case, that would have to change. As it stands you can intentionally default on the loan, and get it settled for .35 to .50 on the dollar. IF your lawyer knows what he/she is doing. It's being done every day.

 

[sozetone]

The article actually quoted this

"Some research suggests that unlimited borrowing may encourage colleges to drive up the price of tuition"...lol ya think? "some research suggests" should not even be in that statement. It's a fact, not a suggestion. lol

 

[steveysmith54]

I think the schools should also be the ones who also give out loans and take on debt. This will ensure that they have skin in the game and actually care abt the graduates’ outcomes.

 

[Sparda29]

Wouldn't it be better just to tell the schools what they can charge for tuition? Max out tuition at $2000 a year for all colleges.

 

[projektreverb]

I think the schools should also be the ones who also give out loans and take on debt. This will ensure that they have skin in the game and actually care abt the graduates’ outcomes.

It’s 2019. No one wants to be accountable for anything man.

 

[mentos]

I think the schools should also be the ones who also give out loans and take on debt. This will ensure that they have skin in the game and actually care abt the graduates’ outcomes.

That's like asking a car dealer to take on responsibility when they finance a new car to someone who barely gets by, not gonna happen.

 

[steveysmith54]

That's like asking a car dealer to take on responsibility when they finance a new car to someone who barely gets by, not gonna happen.

Well, they loaning agencies don’t just give out loans to anyone who asks for them. They evaluate credit reports, credit scores, etc...