Student Loan forgiveness idea

If someone wants to be a PT and this is what the education curriculum has become what do you tell a kid? Don't be a PT? How about we look at things like why costs are what they are? Why curriculum has expanded the way they have. Why private schools can increase tuition every semester once a student has started a program. Why a book can cost $300 and then be deemed obsolete in 2 semesters. Etc etc

Financially literacy absolutely needs to be taught but this does nothing to address why the deck is allowed to be stacked the way it is by all of the colluding parties that profit considerably off of students.

 

All colleges and universities used to, by law, have to publish their graduation rates and gainful employment numbers, which were how many graduates were gainfully employed in their field of study. Average salary per occupation by state can also be found in the Bureau of Labor Statistics. Many schools did, and still do, link to BLS to help students become more informed.

Unfortunately, Trump and De Vos ended the practice of forcing schools to publish their grad and gainful employment rates. Something I had hoped Biden would have reversed. But thankfully, many of the for-profit bad actors have gone out of business already. And these schools, by far, were the worst offenders when it came to defaults on student loans.

 

Serious question: Is it possible to refinance a student loan? That is roll it into a new loan with a lower rate as people establish their credit? Maybe even something like a HELOC where you're essentially paying yourself back depending on how established post-school one is? That would seem to be a quick way to reduce student debt as it would eliminate a ton of the interest being paid.

 

I believe she ended up refinancing at a locked in and lower rate but those first few years were spent throwing money to interest and a principle that didn't shrink and in fact grew slightly. Two loans. One fed and one private. I believe she now has a pretty low rate but the HELOC option is interesting. I am ignorant to these things because I myself have never paid interest on anything except for my current mortgage.

 

What would be the problem with tying the cost of tuition to the degree earning statistics? Certain degrees would cost less than others. If you select a cheaper degree tuition then switch, then you would be responsible to take out a loan for the difference.

 

In times of financial emergency before I had enough saved in my "OSF", I used a couple tools to help. I had a couple short term 401(k) loans over the years which I liked because again I was paying myself back at a lower interest rate (the risk is that if the market jumps drastically over the life of the loan the gains are potentially lost).

I've never taken one myself, but as I understand it a Line of Credit usually comes in at a lower rate than a conventional loan and a HELOC is using one's home equity as collateral so again you're essentially paying yourself back.

 

Yes, and I’ve done that with several of my student loans. Some more are private and the ones that were 6.55% were apparently a federal/private loan that I didn’t know at the time. What I found out the hard way is that my refinanced student loans were not eligible for the federal government deferment the last couple years and in all likelihood will not be eligible for forgiveness if that ever happens. My 6.55% ones (paid off in the past couple months) did not qualify either even though they were through a federal program, and obviously my private loans did not qualify. It’s a mess of a system.

 

You pay yourself back in a 401K loan but not a HELOC. The line of credit is secured by your excess home equity but you pay the bank back including interest.

 

The way its been explained to me is that a HELOC is also paying oneself back because you're borrowing against your own equity. Maybe a better way of saying it is that one is indirectly paying yourself back?

 

Unless there’s some type of loan I’m not aware of then no, you’re not paying yourself back but the bank. It’s no different than a traditional mortgage (secured by the property) it is just in second priority so it has more risk to a lender and usually higher rates. If you think about it, you have money in your 401k that is pulled out and then replenished with interest to your account. There is no money to take out of your home, just borrowing against it’s value.

 

When demand diminishes because a University charges too much…cost will come down.

While still viable. A dental degree at UF was $100K when my wife graduated in 2006. Today…$300K. That is ridiculous. Yet someone can technically manage that debt when you look income. But it is reaching the tipping point. Other degrees are well past the tipping point. An English degree just should not cost the same as an Engineering degree for example…

 

I think we should be looking closer at what these colleges are charging to go to school!!!!
A friend's daughter just started at Auburn, $51,000 a year, plus books. That is outrageous if you ask me!!

 

I'm not sure if the rules have changed, but loan consolidation was available to people with more than one federal loan. I don't believe the private loans are eligible for consolidation, but I could be wrong. I was eligible for consolidation when I was starting my career. It made 10yr loans 30yr loans, but with a much more manageable pymt (which can be prepaid, reducing the 30yr term). This was somewhere around 6 or 7% back in 1996. I also had a PLUS (private) loan, which ballooned during my masters, due to being unsubsidized. Lesson learned and I paid that off aggressively over the course of only a couple years.

Fast forward to 2009 when I graduated with a terminal degree. During my last year in grad school, I took out a token (1k) loan, which then made my loans once again eligible for consolidation and a lower interest rate. I hammered them and paid em off in about 4 years. It took about 12 years to pay off my 30 yr loan. Disclaimer: I attended only state schools (FL x 2 and UNT), with very low tuition.

 

Auburn tuition is less than 12k for in-state and about 32k for out-of-state.
Cost of Attendance

 

Probably including housing and food in the figures.

 

Perhaps, for out-of-state, but the poster wrote "before books." I just calculated the COA for in-state residents: $33,650

Here's the COA for out-of-state: $53,730. Truth be told, that number is outrageous for a state school the likes of Auburn. The tuition, however, is nowhere near 51k. The bottom line for students should be that if you wish to attend an out-of-state school, you need to receive an in-state tuition waiver. Our university offers reciprocity to students from neighboring states. Our grad students can earn in-state waivers, if they are on an assistantship (all of them are).

 

I didn't intend to be misleading. You are probably right that the 51k is room and board and tuition. I think first year or two it is required to stay on campus, but I'm not sure of that

 

Well, if it's 51k they are either a graduate student or from out-of-state (and making the mistake of paying out-of-state tuition).

 

It's the same for UF. I'm praying that my daughter gets into UF when she graduates because I can use my parents to have her establish residency. The money in her 529 would cover tuition completely compared to only covering about 2 years if she were to go to one of the Texas state schools even though she'd be in-state.

 

What about UNT? When I attended way back in the day (93-96), tuition was dirt cheap and comparable to UF. Then again, UF is a better school, unless she seeks to study music.