“”4. Someone will provide loans to med school students.””
True…at least someone will always loan to US med students attending US med schools. That said, I don’t think the feds are considering stopping loans to med students and other healthcare professionals. the suggestion is to limit, not stop.
Med schools do NOT want to fill their classes with the children of wealthy people…so even if there are enough wealthy applicants to fill the 20,000+ MS1 seats each year, med schools don’t want that and will do whatever it takes to prevent that… even if it means finding donors to provide need based aid or becoming lenders themselves. again, that won’t be necessary since Wells Fargo, Discover, SunTrust (now BB&T, which has just renamed itself Truist Bank), Citizens and others will just lend more. Haven’t checked what Chase, CitiBank and other big banks are doing, but if they’re not doing student loans, they likely would start.
I wouldn’t be sad to see that feds and lenders would hesitate/decline lending to those attending Caribb med schools. the drop out rate is horrible at those schools. at a minimum, at least require those students to pay for the first year to weed out many of the drop outs before lending them money.
(Anyone know how many defaulted loans are from Caribb med students who flunk out after a year or two or who can’t get residencies?)
Same with the many for-profit schools in the US…Full Sail and others that have students borrowing a lot and often defaulting on loans.
@mom2collegekids: “Many are fielding athletic teams that are big money losers to the tune of millions of dollars every year (im not talking about big Div 1 schools that have successful football teams that are funding the schools’ entire athletic programs)”
The schools that do that (this would include the Ivies and NESCAC schools, BTW) are those who can afford to do that. Also, you have to be aware of what is an accounting loss/gain and what is a business loss/gain. For instance, a sport may be considered a money loser by accounting measures (costs greater than profits for the sport) but actually be a business moneymaker (by bringing in students who otherwise would not be at that school and are paying above marginal costs, so paying for the fixed costs and balancing the books at a DivIII school).
I’m sure the system can benefit from some reforms, especially concerning Parent Plus loans and loans to attend for profit institutions. But there are a lot more factors at work here than just the availability of student loans. For one thing, ever since the 2008 recession, state legislatures have slashed funding for public universities. The universities in turn have greatly reduced their subsidies of their professional schools. My personal experience has been with law school. In my generation, you could attend a public law school in your home state without going into much debt because the tuition was super low. But that’s no longer the case. In state tuition at ASU Law, for example, is about 28K/yr and I think that’s pretty typical for resident law school tuition at a public school. The 3 year COA for an in state resident at ASU Law is 180K.
Another issue that affects schools is changing demographics. Many small schools draw almost all of their enrollment from just a few states. For example, my D19 is a freshman at Hope College in Holland, MI. Hope draws 88.5% of its students from Michigan, Illinois, Ohio and Indiana. In MI, IL and OH, the total number of high school graduates has declined significantly, presenting enrollment challenges for not only Hope but other colleges as well. I found this rather detailed analysis of the issue on the Hope website: https://hope.edu/offices/frost-research-center/institutional-research/resources/hope-facts-data/studies/2018%20Hope%20College%20Enrollment%20Projection%20Model%20final.pdf
You would think so, but historically, those at the top of a smaller economy often prefer that situation rather than expanding the economy at the risk of losing their (or their kids’) positional status or ranking within the economy, even if a lower ranking within a larger economy would mean a better standard of living for themselves (or their kids) in an absolute sense.
The post-WW2 expansion of low cost state universities, other increases in economic opportunity for those born into lower and middle income families, and decreases in economic inequality (partially due to much higher income tax rates on the highest incomes) is probably a historical anomaly. Even then, participation in that opportunity was blocked or made more difficult for those who happened to be black.
While college was not free for the boomers, it was cheap enough (and high school graduate jobs well paying enough) that many more then were able to work their way through college without parental assistance (perhaps with student loans in the hundreds of dollars, versus tens of thousands of dollars today). Today’s generations could only dream of being able to do that.
@ucbalumnus, it actually is still possible to work your way through college. Besides working for a college that provides tuition remission or an employer who covers college tuition costs, in many states, publics and CC’s are still cheap enough (and so are online programs) that you can do that. The main issue is that when many of your HS peers have to work their way through college, that is seen as an acceptable route but when many of your peers go away to college (even if they have to take out big loans to do so), then working your way through college is seen as much less appealing.
My daughter would not have gone to her college without the athletics (and athletic scholarship), nor would about 1/4 of the students, many who are internationals. It is a marketing investment and yes, brings in the warm bodies.
Yes, you can say the school budgets for the athletic money (most of which never leaves the school, just goes from one pocket to another), but it also budgets for the telescopes, and the music practice rooms, and the special geology library that attract students to the school.
The budget submitted by the executive branch doesn’t hold a lot of weight. It also proposes no funding for public radio, for the arts, for libraries and museums. Same as were proposed in 2017 and 2018 and 2019, and those years all saw funding for public radio and the arts. Millions of dollars in funding.
A generation ago, students worked their way through college living on their own on a high school graduate’s pay. These days, doesn’t working one’s way through college typically require continuing to live with parents (a parental subsidy, and adds additional constraints on the choice of job and college)?
@ucbalumnus, more constraints, yes, but still possible, especially with the proliferation of cheap quality online programs and material as well as more college credit possible in HS (thinking DE, etc.) and test-based credit (like CLEP) in recent years.
However, it’s less culturally acceptable (especially amongst the middle-class), and in part that’s because more available loans make stay-away college more possible and thus seen as more the ideal. A lot of it is keeping up with the Joneses.
Keeping up with the Joneses is for those who are fortunate enough to live among the Joneses. For those who can only dream of living in such a place, it is about borrowing to have opportunity. Removing that opportunity from those who truly need it is a step in the wrong direction for us as a society.
I found more specific information about the proposal. Cap for Parent PLUS is $26,500 (the difference between the aggregate amount that dependent & independent students can borrow). The cap for Grad PLUS is $50,000/year and $100,000 aggregate (total that can be borrowed in Grad PLUS overall). But it also proposes that there will be a single loan program for grad students, so that would eliminate the unsub (which currently is limited to $20,500 per year).
FSEOG would be eliminated. FWS would be cut in half.
Trump proposed consolidating the income-driven repayment (IDR) plans into a single plan with a discretionary income cap of 12.5%, a 15-year repayment term for undergraduates, and a 30-year repayment term for graduate students. The standard repayment cap would be eliminated. This would only affect those who borrowed their first loan on or after July 1, 2021 (further confusing the loan repayment landscape).
The difference is that, a generation ago, people were more likely to be able to attend a stay-away college supporting themselves on a high school graduate’s paycheck and using the leftovers for the cheap in-state public tuition and books to attend college. Now, parental subsidy (continuing to live with parents) and more student loans are more likely to be required to do that, and also limits choice of college to a greater extent. Whatever cultural desires there are, most traditional college students continue live with parents and attend local colleges.
But then in some areas, even the local public colleges’ affordability for those continuing to live with parents and commuting is a stretch (loans or not).
@ucbalumnus, that depends on financial circumstances and academic prowess. Net tuition price increases actually haven’t gone up much higher than inflation (list prices have skyrocketed). That means both fin aid grants and merit awards have increased with list prices.
Is there any change to graduate Direct Loans? IIRC, the annual amount for medical school students is in the $40,000 a year range for the Direct Loan.
If medical school students can continue to get that Direct Loan amount plus the Grad Plus at $25,000 a year (since the aggregate is $100,000 proposed), that will help…but it won’t cover the full cost of attendance at many private medical schools.
And before you all jump in and say that attending a private Med school is a choice…I’ll say…sort of. Many Med school applicants get only one acceptance, and it’s not like there are “safety schools” for Med schools. Sometimes the only acceptance is at a private medical school.
Yes - the proposal is to cap at $50k/year (moving to a single loan - hopefully modeled on the unsub rather than the PLUS), with a maximum of $100k over 2 years. I didn’t see anything about it being different for med or law, but if not … the extremely well organized and vocal group of med/law financial aid directors (and I assume their school presidents) will kick it into high gear.
(P.S. An aid director who is very involved in advocacy in DC indicated that he thinks the proposal will be DOA.)
This isn’t even a bill, so it’s not going to pass. It is a wish list budget proposed by the executive branch. The house budget committee might take some ideas (probably not) but the final budget will look nothing like this proposal.
Yes, a pre-med is lucky to get even one medical school admission (most get shut out). The choice for most of those lucky pre-meds is to take it or leave it. Despite the debt burden (that limits future career and life choices), many pre-meds have invested so much effort, money, and foregone other opportunities that they are unlikely to walk away from a medical school admission.