<p>^^ sue, I don’t disagree with you that food stamps should be for the working poor or those unable to work or find a job. I just hear people complaining of single moms receiving food stamps and not working but they’re ok with married moms doing it. I never see the sense in that.</p>
<p>I agree - those capable of working should work before getting aid (moms, dads, single, cohabitating, or married). I am all for helping those that truly need it, but a capable adult should work before my taxes pay for his/her lifestyle.</p>
<p>CPT- my friends think their kids should get interest free loans to help pay tuition since they haven’t had 18 years of income to build up a college fund. They think our State U should offer preferential financing options for kids who didn’t have the “luxury” of having a dual income family. They think the cap on IRA deductions should be lifted for families with only one working spouse (i.e. shelter or tax defer an unlimited amount, since there is only one “retirement” plan being funded other than social security).</p>
<p>These all sound fine in the abstract- but of course, any new tax break comes out of yours and my wallet. My state U can barely figure out how the children of the working poor (school bus driver married to a fast food worker) can manage to get to college- now they have to give a pass to the off-spring of someone who chose not to work for almost two decades?</p>
<p>Hate to be cynical. But people need to make financial decisions looking at a much longer horizon than just next year-- or not expect the rest of us (which means the government) to “fix” their sub-optimal choices.</p>
<p>Oh- and tax breaks to companies when they hire a worker who has been off the grid for over a decade. That’s my favorite idea. I had to bite my tongue before telling the woman who suggested this, “Welfare for the Pilates crowd?”</p>
<p><<children of="" the="" working="" poor="" (school="" bus="" driver="" married="" to="" a="" fast="" food="" worker)="">></children></p>
<p>these kids should be given every opportunity we as a country can give them in order to break the cycle of poverty. We are a country of enablers who don’t expect enough from the takers among us. I want the kids of the working poor to do better than their parents.</p>
<p>The Federal Government needs to get out of the lending business. Banks need to get out of the habit of looking to the Federal Government for loan guarantees. Pell Grants and Subsidized Perkins loans should be made by the colleges with government money because they don’t require any creditworthiness. I would get the government out of the Unsubsidized Perkins loans unless creditworthiness is a factor. No loans should be made unless there is a “need” in the COA that is not already covered by grants or scholarships. No checks from the school to the student. No students using Federal loans to get a car or go to Starbucks.</p>
<p>dstark - your article is about federally guaranteed student loans (Perkins), not student loans in general. You don’t get $100K of student loans through Perkins. Make “Bank” student loans dischargeable in the future and articles like the OP posted will disappear. I’m not sure how the present system was sold in Congress. Either Congress wanted more students to qualify for higher students loans (like they did for housing) and the banks said “Sure if you make them nondischargeable” or the banks went to Congress and said “We’ve got a great idea - make student loans nondischargeable and we will make loans to anybody who wants one.” I’m inclined to believe the first scenario, but am willing to be corrected.</p>
<p>Someone joked upstream about getting a Maserati without a credit check. Another poster pointed out the car would be repossessed for non-payment, which is true. How do you repossess a college degree? (And you also don’t wait until its been driven for four to six years to repossess it.)</p>
<p>duplicate post, apologies</p>
<p>Um. Yes, there are those who don’t work and get money from other sources. If they were fortunate enough to get chiild support/ alimony from a divorce situation and live off those proceeds, that’s their business. If they want to depend on what goodies that social services has for them, that’s a risk they take. It can end up being a pretty bad call, as child support does end, and social services are not reliable. You want to take the free cell phone, discounted utilities, food stamps, that’s fine. But there is also the down side to living that way. And really, Sueinphilly, if you had so wanted to do so, as you said yourself, you could have chosen that path, but you did not. A lot harder what you did and many who chose your path did not become as successful as you despite their efforts because they weren’t as talented, did not get the opportunities, were flat out unlucky. Some may have worked as hard or harder than you and it just did not pan out–not good enough, maybe. So one cannot choose to be successful in one’s career and make a goodly amount a money, because there are too many elements beyond ones control. But you, and others like you could have easily chosen to do as those who are on welfare systems or on other’s dime have done. YOU have that choice.</p>
<p>The same with financial aid. There are many who are resentful that low income kids get financial aid, sometimes, great financial aid, full rides if lucky enough to get them. Another kid who has parents who work, make money, but did not put enough aside and want to live at a level that precludes paying for a private college education, is out of luck. At some of the best schools, if you are not needy by their definitions, you get no aid. Tough luck. Yeah, I feel badly for such kids, as they had no choice in the matter, but not so the parents who also complain. They look with eyes of green at the fat aid packages that a low income kid gets, and all I can say is that if their kid were also accepted to the same full need school, that if those parents had quit their jobs and gotten rid of the assets and lived like the fin aid kid for a few years before applying, then they could have gotten the same package. Of course at the time you make that decision , you don’t know where your kid will be accepted and if he’ll get anything. So you takes your chances. </p>
<p>These days, saying GET A JOB, any job, is often futile with what’s available. In earlier posts, I told about my son who traveled to some areas where there were no jobs to be had, where hollow eyed workers scrapped for hours at jobs that are not much more than minimum wage, and he was there to turn out the lights there. I don’t think he’ll ever forget that year. </p>
<p>The big problem I see in the debt situation is that we have a system that is churning out kids and folks with big debts and they can’t pay them. It’s a concern because if they don’t pay, and they are also hamstrung by not being able to pay, it does start to affect all of us. I’m not saying to feel sorry for them. I am saying that there is a problem here and it does affect all of us. And, yes, the schools are complicit, as they are the ones benefitting from the situation. They just get the proceeds of the loan. And many of those schools run on those proceeds. Cut the programs and I firmly believe some of these schools will have to close shop.</p>
<p>this lady lives in walking distance of MANY retail stores, she could have a seasonal job if she wanted it. She doesn’t want to work. </p>
<p>She never lets her daughter be home alone or go anywhere alone, ever. She lives in a horrible neighborhood (in house owned by her dad) because it’s free.</p>
<p>She refused to marry the father of the child. It was okay to have his kid (after a 5 year relationship). Truth is, she didn’t want a husband. She wanted a kid and someone else to pay for it. If she worked, ever, I would not mind the free stuff. I’m not trying to take food out of her kid’s mouth. I just want people like her to want more for themselves.</p>
<p>Can you imagine being a tall white blond haired 15 year old, whose mother won’t ever let her leave the house or be home alone because mom lives in a free house by choice. Kid gets stuff from her dad (her unlimited cell phone, her laptop, etc).</p>
<p>I wish I could tell you that this girl has a bright future. I’ll know more when she changes schools for high school (decent charter school)</p>
<p>Wow. I’ve never met one single person who has felt that way simply because they were stay at home moms. Not one. That whole first paragraph of your post was all new stuff for me. I haven’t seen any movements on rewarding stay at home moms on the tax payers dimes, except in the cases of those who are at an income level that the family is endangered. </p>
<p>Here is the way I look at the situation at hand. We have a community with upcoming young people who can get better jobs and contribute to our community more if they go to college. And we take a percentage of what those in the community make, so it is of importance that we maximize earnings especially of the younger generation as the older ones are retiring. We therefore lend money out to the families of such young people so that they can go and get an education and jobs that will not only repay that money, but will make the higher contributors.</p>
<p>But, instead, they come back home and can’t find jobs and can’t pay back the loans either. And yet, for whatever reason, we still have to lend them the money because we made the commitment to do so that cannot be broken. So the loans are not being repaid and yet we are still lending out more money, and the community income is not growing either. </p>
<p>So what to do? Well, I 'd like a list of where these people are going that are taking this money and returning a useless product, for starters. Especially when there are choices as to how much money to borrow and where to go with it. I’d like to know where the losers are. And then, I would like to encourage those to go to the less expensive options out there so that as much money is not being borrowed. It might be better to put some of that money into those options so that that the programs there get the penache and luster of the expensive ones.</p>
<p>Then there is the problem of those in the community unable to find work to pay off what is borrowed. Some solution there would be sought. It’s not feeling sorry for anyone, so much as the model is threatening all of us. Yet we are stuck with certain tenets of it for reasons beyond our control. Oh, this will likely end after a while when the defaults come to the point where there is no more money to lend out and Congress then has to decide whether to throw some more money, good money after bad. But we aren’t there yet, so they’ll just let it roll. So what are the solutions? I don’t think a list of graduates, earnings and rankings is specific enough. A deadbeat list, hitting the USNews ranking which some of these school will lie cheat and steal to move up a few notches, is a more effective start.</p>
<p>“The government did not have to guarantee the student loans made by banks. That was a policy decision to make loans more accessible. Put the blame, if you must, where it rightly belongs; with the government (i.e. you).”</p>
<p>Sorry, but I stand by what I said - the government and the banks are interchangeable entities, and they exist for each other. And as I also wrote, banks and social responsibility are an oxymoron.</p>
<p>Doesn’t have to be. Sweden doesn’t have any problems with student loans. That’s 'cause the universities are free. Period. End of story. But then the banks don’t make any money off them.</p>
<p>“Pell Grants and Subsidized Perkins loans should be made by the colleges with government money because they don’t require any creditworthiness. I would get the government out of the Unsubsidized Perkins loans unless creditworthiness is a factor.”</p>
<p>There is no such thing as unsubsidized Perkins loans. Perkins loans are smaller loans that are given out by schools, usually to students who qualify for Pell or even just to students who have 0 efc. Schools are limited in how much Perkins $ they have and they usually distribute it to the neediest.</p>
<p>I think you are referring to Direct Student Loans, aka Staffords. The reason that students are given this without a test of creditworthiness is because it allows 1- students to repay the education which gives them a leg up and 2- to allow poorer students whose parents may not have good credit a chance to go to school. The subsidized loans do require there to be need. The unsubsidized loans are one of the only vehicles available to families that cannot meet their efc. Very early in this thread, I posted how, back in the 1990s, I, a single mom of several kids, was able to take out loans to finish my degree at my state flagship. I took out somewhere between $40-$50K and repaid all of it. I was given grants and scholarships but needed further assistance to make it because I was supporting children. (It didn’t go to buying a new car but it did go to daycare, electric, food bills, etc.) Had that loan money not been available, I would have had to go on public assistance because I could not pay our expenses even through full-time work. Federal student loans to students are an important part of financial aid for lots of working and poor students. Most people pay them back and do not default. Most people who get in trouble are going through other routes: private loans, PLUS loans, or attending sub-par schools or failing out of school. There need to be limits on loans but there is a good reason why creditworthiness is not a factor for student loans and to add in that stipulation would mean a whole lot of poorer kids could never finish their degrees.</p>
<p>my son got Perkins loans (9600 over 4 years), interest must have been paid to school by government, because none accrued while he was in school. They have an interest rate of 5%.</p>
<p>Best thing, imo, that the government did as far as money in the past few years was stop banks from handing out credit cards to students. My son racked up $4500 on 2 cards over 2 years. I got the ‘bailout’ phonecall from him. I was ****ED. I transferred it to a 0% interest card in my name. I paid it, instead of giving my son money for food for the next year or so. He had a kitchen in his living quarters in NYC.</p>
<p>that was his only mommy bailout. I had to have full access to his bank account also.</p>
<p>My son doesn’t want to have to do that again, and he learned his lesson. A year+ of no mommy money when you are 19 will do that to a person</p>
<p>My sons were fine in terms of money management while in college. But they all had problems when they got out. They really got used to living by the card swipe. My one son kept track of his money, by using the card until it was declined at which point he knew he had no money. What he did not know as that the bank card that replaced his college card was set up so that it allowed overages under $20. But would tack a $35 fee for them. Since his use of the card tended to be for small amounts, the card worked like the fishes and loaves, never ending. Until he looked at his balance and found himself owing over $1000, $900 plus of which were made up of the overdraft expenses! Panic time for him. </p>
<p>I was able to have the bank reverse all but three of those charges, but the way it was set up, it took the officer nearly 3 hours to do it since each charge to be removed had to go through a process. Couldn’t just get rid of all of them in a fell swoop. </p>
<p>Yes, Perkins and subsidized Staffords do not accrue interest to the student while in school. It’s the non subsized ones that do and the rates are not low. Though lower than the PLUS and I have no idea how outside loans work for those who don’t qualify for PLUS.</p>
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<p>I stand corrected. If they are not subject to creditworthiness, then you have to make Stafford loans nondischargeable in bankruptcy.</p>
<p>They are nondischargeable. But you can’t rack up $100K on them either. A dependent student couldn’t even rack up $40-$50K like I did. I had higher limits because I was independent. A dependent student is limited to $31K in Staffords ($23K subsidized and, after that, it’s unsubsidized even if there’s need). They could maybe get another $8-$10K in Perkins if they’re pretty low income compared to students in their school. The Perkins have had a flat 5% interest rate for many years but it’s up to the school who gets them and the amounts are lower. The interest rate for the Staffords floats up and down and, basically, all students can get them (with the usual caveats: domestic students, registered for selective service, etc).</p>
<p>Well you have to do something to change the current system. When college debt is more than credit card debt…well you have a problem</p>
<p>2Collegewego, actually even dependent students can rack up more than $60K in Staffords and maybe even $70 when you throw in the Perkins. A student can take out more if the parent is declined by PLUS. That brings the FACE amount of the Stafford debt close to $60, just like an independent student. The unsubsidized part of the Staffords will start accruing interest as soon as the funds are released, so by the time a student graduates, it can be well over $60K right there. I can’t remember the current unsub interest rate. It is not insignificant. More than the Perkins, I know and the meter starts ticking right away.</p>
<p>Yes, I knew that-- wasn’t thinking of those. Those loans, in essence, make the student carry the weight of a Parent PLUS. The additional amount is $4k/ year for freshman and sophomores, $5k/year for juniors/ seniors to a max of $57.5k and those limits are, really, too high for most students. I do think it’s when they dip into these higher subsidies or additional loans (like private loans) that students are more likely to get into trouble. I still don’t think we should completely forgive loans nor do I think they should require a credit test but I do agree with you that there should be ways to pay back the loans easily because, really, we need students to be able to attend college. </p>
<p>As far as the interest rate, I’m not sure what it is right now but one of my kids (graduated 2011) has Staffords in repayment; the higher rates are between 6% and 6.8%.</p>
<p>[6</a> Steps to Determine How Much to Borrow for College - US News and World Report](<a href=“http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/08/13/6-steps-to-determine-how-much-to-borrow-for-college]6”>http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/08/13/6-steps-to-determine-how-much-to-borrow-for-college)</p>
<p>"3. Research your earning potential: For a student loan burden to be manageable, the total amount you owe should be less than your starting salary after graduation, "</p>
<p>^That’s a good rule of thumb, and one I hadn’t heard before.</p>
<p>I have just been catching up on this conversation, and find it very interesting. Shaking my head that voluntary stay-at-home parents would think they “deserve” special breaks, or that being a two-income family is a “luxury.” It would have been a huge luxury for me to stay home with my kids when they were young.</p>