Octania

I can't believe this is legal

Paid ALL YEAR 2013, more than they wanted me to pay each time, and absolutely ZERO of that went to the principal of the loan.

Wow.

Magna86

damn what the hell is the interest on that loan? I know alot of them are like mortgages where little if any goes to principal at first. Glad I dont have any of these loan to payback. What does your loan paperwork say for terms.

jaunty75

From what you posted, it does not appear that your principal balance is increasing, so it appears that your loan payment is only enough to cover the interest each month with nothing left to pay down the principal. You need to increase your payment.

An arrangement like you have now is often done in the early years of a student loan payback period because it's assumed the student is just starting out after college and doesn't have a high income. You're not making progress against the loan, but you're not backing up, either. The latter is called "negative amortization," and it means that your payment isn't even enough to meet the interest amount each month, so the unpaid interest gets added to the principal balance, and the total amount you owe actually increases each month instead of decreasing or at least doing no worse than staying constant.

My guess is that your loan terms specify a certain number of years where you have this level of payment, and then it will rise at some future point (when your income has hopefully increased as well) so the loan actually begins to amortize.

It's not hard to figure out what you should be paying. What is the outstanding balance of your loan (it appears you've obscured this in what you posted)? What is the scheduled payoff date (how many years will you be making payments)? What's the interest rate?

z11375ss

A college degree isn't what it used to be. And now, all the kids coming out are saddled with debt like you. You have my sympathies. You used to be able to deliver pizzas and pay your way through. Now you need a mortgage. My niece and nephew owe over 100k each. I have 3 kids and so far so good. No debt. Two out and I have 2 years left on the last one.

Octania

I have not looked into the rest of the story
Interest rate is around 5.8% I think

There is ZERO reduction of the principal
Not one cent.
I assumed than when signing up for payments of over $200 when they thought $120 was fair, was going to pay it down "fast". I guess not. Oh to be in the 1% that makes the rules.

to be fair, this was looked at to file an amended tax return.
Late in 2014, the payments finally started chipping away at the principal.

Erinyes

This is one of the horrible things that at least a few of our congress critters are trying to kill. Elizabeth Warren, for one, has denounced the fact that the feds are actually making a profit on education loans, and wants to change that.

I mean, 5.8%? Our mortgage loan rate is less than that, from ten years ago!

z11375ss

You want to borrow money? Where are you going to get the loan for something as intangible as a college education? There is no free lunch. You have to pay the piper. That would be the Federal Govt unless you want to put your house up as many parents do only to have the kid get out with a sociology degree (if they graduate at all) that is worthless. Now they can't find a job in their field w/out a Masters. Even then they don't make enough to comfortably pay the loan down. It's called the financialization of College. When the govt offers any amount you may need, the universities jack up the cost to that level and vis versa. It is criminal in my opinion. Here's the kicker, they can't be dissolved by declaring BK either. Congress wrote that into law as well.
These loans are unsecured as they have No collateral. Hence the high rate.

Erinyes

You're absolutely right, and you have encapsulated the issue: Education should be free to the student.

Even college, just as it is in Argentina, Brazil, Denmark, Finland, France, Germany, Greece, Norway, Scotland, and Turkey.

It's an investment in the future of the country. Remove the profit motive, and let the price be the genuine effort that goes into learning. The system as it exists now simply perpetuates, if not widens, the chasm between economic classes.

Octania

Yeah, another story entirely, how tough it is to get a company to pay for or utilize an engineering education in central MI.

Wife went like TWO YEARS to community college, makes similar money. Folks running automatic screw guns at the auto plant make FAR more. Tough to get in there unless your family is in, it's not like they hire just anyone.

"You have to pay the piper"

Right, but FOREVER?
Good grief.
At least with 29% credit cards there is a theoretical possibility of one day paying off the balance.

Speaking of which... I got another one in the mail today. "Only" 12...to 22% interest after the introductory period of cheap. Does anyone besides me send their crap back, including envelope, in the business reply envelope? One place annoyed me so much I sent them a Priority Mail box of scrap steel with that BRE taped to it, and told 'em every time I send another the box will get bigger and heavier. 29% interest indeed.

1969w3155

Can you send a separate check to be applied to the principle, noted as such?

rustyroger

Should the USA's young citizens get a good education?, Absolutely, just as with any nation.
But it has to be paid for. Either on behalf of the student by family/employer, or by the state.
If the state picks up the tab the money comes from taxation.
However it has been appreciated for many years that educating the next generation, and more importantly, instilling a good work ethic in them, will be a good investment for the future.
The flourishing nations today have done just that. The ones that are stagnating, haven't.

Sadly, increasingly in the USA and the UK, a good advanced education is getting beyond affordable to the less well off.

Roger.

My442

School loans are a huge scam.


So are 401ks.


Everything is gamed.

z11375ss

Here's a solution. Go to your bank and ask them to roll your existing loan into a loan they control. You may get a lower interest rate and more favorable payment terms. Remember, YOU signed the papers. You need to read the fine print in any document. You will soon know your credit rating. We all need to recognize the fact we are getting hosed by the Federal Govt in so many different ways we can't count them. Welcome to debt slavery.

z11375ss

You bet your life it is.

z11375ss

When did trade school get such a bad name? College isn't worth it if you have to borrow scads of money to pay for it. Driving a truck or welding pipe are both honorable professions. I myself have cleaned restrooms in my youth as part of my job. Yeah, it sucked, but I worked my way out of it. That's the job you get now with a 4 year degree. If you get one at all.

MDchanic

+1.

When I was younger, I cleaned (really nasty) public toilets. There is nothing wrong with that, and one would be a total *** to feel as though he were above it.
Now, I have over 25 years (yes, you read that right) of accredited education under my belt, and I am worse off financially and occupationally than my father was, and he started his job with just a HS diploma, and got his college degree in night school while working.

Things ain't heading in a good direction, folks.

- Eric

Allan R

This is why I set up an education fund for my son when he was born. Call it 'advance planning'. It paid his college tuition and whatever is leftover can be used by any of us for further education. Note: there isn't any leftover now.

brownbomber77

Yep..... I cut trees with a degree in public administration. The gi bill covered it all but my wife and I are hammering her debt. The only debt that is not covered under bankruptcy. Which makes sense....but interest rates.....aargh

z11375ss

Did the same thing. Found that it covered about 50% of the cost I had planned for. The cost just keeps going up and the students just keep getting screwed harder and harder.

jaunty75

Seems like a timely article.



We’re Frighteningly in the Dark About Student Debt

http://www.nytimes.com/2015/03/22/up...abt=0002&abg=1

RetroRanger

I think what's frightening is high school grads and their parents who don't get simple math. If you can't afford something simply do not buy it in hopes that sometime in the future you might be able to afford it.

An article in a local paper pontificated that 10 years past college graduation it's not likely to matter much if you went to state school or a private institution, being at least 10 years past college graduation myself I agree.

When a family member who only had a trade school cert, and had built their own successful small biz wanted a career change the formulae was 2 years community college, transfer to a state college, apply for scholarships, and take any transferable courses during summer at the cc. The result was no loans and an affordable 4 year degree. Oddly the next real job came from a condensed biotech cert course offered for free from the same CC to " under employed" and advertised thru the local paper essentially any who applied got it. Sadly of the 20 or so that started the course 4 finished most never showed up more than a couple times. The course was part of obamas incentive to reduce unemployment, back when he was first elected.

z11375ss

I know one thing. If your parents don't make much money you qualify for loans and scholarships. If your folks make pretty good money you qualify for a little help. If they make good money they and you qualify for nothing whatsoever even though you are the person most able to pay it back. Sounds *** backwards doesn't it? My accountant recently stated to me that I get zero write offs for any education because I make too much money. College isn't necessary now unless you are going into a specific field like accounting or medicine. The bang for the buck is gone.
Did you parents out there notice how YOU must fill out a financial statement for the government to see if you qualify for anything? I have yet to fill one out. They can kiss my can. Also, my child/student had to have MY signature on an apartment lease even though she is over 18 and qualified to make a contract. No apartment w/out my sig. I had fun on that phone call, relenting as usual. The whole thing is nothing but a sham and a con to make people think they need a college education to attain any kind of wealth. That's BS.

jaunty75

This isn't quite correct. Scholarships and loans are two different things.

Qualifying for scholarships (money you don't have to pay back) is often dependent on family income unless it's a merit-based scholarship. But loans are different. You always qualify for a loan. You just may not qualify for a loan at a discounted interest rate if your family income is too high. In fact, the higher your family income, the better the chance you have of getting a loan because you have a better likelihood of paying it back.

z11375ss

I meant things from the Federal teat. Not the bank. Can you imagine though, having to mortgage your house to pay for an education for your kid. I wouldn't do it. As it is, YOU as a parent have to borrow the money putting up your collateral, not your kid. YOU are on the hook. The whole thing is a joke. A bad one. I feel sorry for today's youth.

jaunty75

Exactly right. Many parents take out home equity loans to pay for college and then are paying it back for years. It may significantly and negatively affect their own lives in terms of when or even if they can retire and other later-in-life decisions like that.

But because this debt is not the student's debt, it doesn't get counted in the student debt statistics, and it doesn't show up when the colleges and universities brag about how the average student graduates with "only" $20,000 of debt or something like that. They never count the total family indebtedness that was taken on to pay for college.

There's been a lot of talk over the years about a college cost "bubble" and that students and parents will finally realize that it's not worth taking on that debt, and tuition prices will have to come way down if half the colleges in the country aren't to close. But it hasn't happened yet even though many predicted it would have by now. Demand for college has been very inelastic. No matter how high tuition goes, students still want to go there, and their parents still want them to. The easy money that the government makes available is just an enabler. It enables colleges to raise tuition with impunity because the money is always there in one form or another to pay it.

Students sign that piece of paper in the bursar's office every semester, their tuition is paid that term, and the debt they just took on is an abstract concept that won't be an issue until some undetermined point in the future. That's how many students end up $30,000, $40,000, $50,000, or even $100,000 or more in debt without realizing it.

coppercutlass

When i was 17 i didnt know wtf i wanted to do with my self. I knew school was not for me and i did not want to cripple my parents financially . I decided to keep with autobody as i had take a votech program through my high school. Im 25 and the remainder of my mtg is 60k and thats all my debt and i have seen it shrunk . I have a lot of friends who went to school and have a lot of debt and are not working their field of study. Part of the problem i see is schools are killing shop classes. Kids dont know if they like running a mill , lathe , doing electrical work , cad drawing , blue printing , For me shop classes gave me hope becasue i was so bad in school a "c" average would have been a blessing . Then when i took autobody throuhg the VoTech program junior senior year i found out i wanted to work on cars and my teachers advised me to get my foot in the door in a shop that would take me in as an apprentice. Not only are shop classes dying ., but when they have career day or college day they dont give you tech school options . Colleges are big money and i dont think im crazy to think school districts get kick backs for the amount of students that go to certain colleges. I remember for college day you had big name colleges , like 2 local community colleges and the military. The drive to go to college has come about by the belief that working with your hands and busting your *** is for poor people. The demand for people working trades is skyhigh in many fields . Our society created this issue and the banks capitalized on it i also dont think the gov should give everyone free education just like that i think standards need to be set. The difference being someone who will actually truly take advantage of a good education vs some kid wanting a free ride to party. The more the demand and push for college the more prices will be blown up and the more banks will take advantage of the situation.

jaunty75

I think everything you said is spot on except this:

I think you are crazy.

There is no college anywhere that gives money to school districts for sending them students. In spite of the fact that tuition is so high historically, many colleges and universities are still financially strapped these days, and if word got out that a university's scarce dollars were being used to pay local school districts for students, there would be a revolution.


The situation at Sweet Briar College in Virginia is thought by some to be just the tip of the iceberg.

http://transition.sbc.edu/news/



A more general article about the situation from the Boston Globe.


"College presidents worry their schools won’t survive, report says"

http://www.bostonglobe.com/business/...1uM/story.html

illumined

I've met so many unemployed college grads it's not funny (for them).....

Destructor

If you think an education is expensive now just wait until it is "Free".

illumined

According to this a large percentage of young people already think it is free.


www.wtop.com/346/3741161/Report-Millennials-hope-for-student-loan-forgiveness

47 Convertible

__________________________________________________ _

Speaking from the vantage point of a retired guy with a Master's degree I don't regret the college but that was back in the 60s and 70s. I grew up in a mostly blue collar family. A college degree was admired but they were not in awe of it. One brother called it "white collar apprenticeship" and experience after college proved he was more correct than not.

Now unless you are going into a profession like engineering, medicine, CPA or law, I'm not so sure a college degree is worth going into debt over. For sure a degree in sociology, english, history, etc. won't get you squat. A 4 year degree in nursing parlayed into Nurse Practitioner over the years is well worth pursuing and will only get better as M.D.s get to be fewer and fewer. Plus you can earn while you learn.

Even degrees in computer sciences get outsourced to India and Asian countries. Lots of tech jobs in electronics etc. also get outsourced and 'graduates' are making job applications from the basement of their parents' home.

What doesn't get outsourced are skilled trades jobs, particularly the more skilled like electricians, HVAC mechanics, auto mechanics etc. Four year apprenticeships that also require night classes in theory likely are more valuable than four year college degrees in earning power. Less skilled building trades are getting fierce competition from "immigrants." If you want into the building trades become a journeyman level worker.

Plus if you want to own your own business its a heck of a lot easier to get in through the building trades or find a niche, for example, in the auto trades or appliance repair than it is to build a white collar business.
Jerry

jensenracing77

Wow, old thread... Sure glad I never went to collage. Best decision I ever made. I am far better off than most of my classmates that did. Even if I did I would have paid my way through and took longer to get the degree. Debt sucks and I have always avoided it at all costs. Just wish kids graduating were taught better about student loans and the hell that they will go through paying them off. So many go for worthless degrees and then stuck with the bill for years and decades.

Bfg

According to Bernie everything will be free, what a great idea! Do get I get reimbursed for the money I spent on my three kids I sent to college ten years ago? He wants to send everyone to College. Who gonna be digging the ditches?

Olds64

I'm going to close this thread.