there was a taco tico across from campus, they had 49 cent tacos and burritos...i used to spend $2.00 a day, $1.00 at lunch and $1.00 at dinner for one of each...cheaper than the meal plan in the dorm, by far...went home on weekends and ate real food

There was a Taco Tico near my campus too...i don't remember the every day price for tacos (49 cents sounds about right), but i do remember that on Tuesdays or Wednesdays, tacos were 29 cents....of course, you had to buy about 10 of them to make a meal, but it was still pretty cheap.

ETA: And now i'm wondering if they were 19 cents on special....i think they might have been...i have a memory of myself and a buddy ordering 25 tacos for $5. (I know 25 tacos sounds like a lot of food.....but there was maybe half an ounce of meat on a Taco Tico taco.......even for a normal, non-teenage boy appetite, it took at least 5 to make a decent meal).

From the perspective of parents who did not want their children to be saddled with debt this is what we did.

No going out of state
Find a school within 2 hours along the NYS Thruway
No junk degree, if you can not find gainful employment soon after graduating I'm not paying
Do well on your SAT so that you will get additional scholarship money
If the curriculum is there, go to community college first

Oldest has two bachelors with only 40k and a good job as a nurse
Youngest has AS in Criminal Justice and is working on nursing degree but has minimal debt at this point

It can be done.

Could not agree more. While the cost of attending college is very high, it doesn't mean you should attend at all costs then complain about repaying the debt that is owed. These proposals to forgive student loan debt are outrageous.

Here's another scenario to consider:
17 year old child with a single mother with two jobs and no father figure their whole life. Child is told by counselor in high school that college is the only way to go. Child is told to apply to and attend the best colleges you get accepted too. Also, don't worry about paying for college, since your family has virtually no excess income, you will be given all the help you need, just sign and pay later. You take on over a hundred thousand in debt paying for school and living expenses. You are told don't bother working because the program is so tough you won't have time to work and focus on school. You attend four years, and in 2008/2009 the economy crashes. There are no jobs for you when you graduate with a viable 2 major degree.

Now you have to take any job you can to make the minimum payments. The economy starts coming back. Employers are hiring entry level jobs but require 5 years experience in the field. Employers question the gap in your resume from college to now since you took a job as a retail associate. You can't make your loan payments, so you go back to graduate school (MD OR JD) to defer your loans again as it's your only choice. You finally break the cycle. You made it as a lawyer or doctor, so you find a job starting at about 50k a year.

However your loans have now accumulated to $300,000 at a 9% interest rate while never missing a payment in 10 years. The minimum payment to stay ahead of the loans is $2,100 a month; - on IBR, your payment is $200 because you now have a wife and kid. You pay the $200 a month, save for your child's education, retirement, house, car, etc. because less than 1% of jobs would pay you enough after tax income to pay all the above expenses and allow you to make that payment.

15 more years go by.... your debt is finally up for 25 year forgiveness. The debt is now at $450,000 and you never missed a payment. You make about $100,000 a year. Your income tax rate because of the debt forgiveness is 35% for that year. You owe the IRS $192,000 at tax time. They add interest and penalties because it couldn't be paid on time. They put leins on your house, car etc.....

You see how this cycle is impossible to break? An uneducated 17 year old child, with no guidance at home, made the decision to simply go to college and was told to go to the best school they could to try and make it out...

I would like to hear some solutions for this person who already made the decision to go to college. A lot of the responses are, well they shouldn't have done this or that... well they did.... so.... what can we do about it? We can prevent the problem moving forward by lowering the cost of school or better educating our children not to make the same mistakes, but no one wants to offer solutions about the $1.8 trillion existing on tens of millions of borrowers today about 25% of which are in default already.

I haven't studied the economics of it, so i might have to backtrack......but i think i could get in favor of a plan that reduces the debt back near the original principal balance or some such (and if this involves giving money back to those who have already paid their student debt off, then that might have to happen) Can such a plan be feasible? I have no idea--probably n ot. Outright wiping away of the debt? No.

Is it at all feasible to have a student loan program where the loan is interest free until the person finds a job? That seems to be a big part of the problem, unless i'm missing something......by the time the person can or does start making payments that actually chip away at the principal, the principal has doubled or tripled.

I am just asking.....i never had a student loan. I had a cheap scholarship that paid my tuition (about $400 a semester) and the work i did took care of my other stuff....so i'm pretty ignorant of how the student loan game works.

As someone who has student loans which are being paid off ahead of schedule, with a wife and kid(s), I would argue your scenario's flaw is the assumption that the person is trapped in this particular situation and in need of a unique solution. The person in the example can either increase income, increase payments, or both. Firstly, one of the great things about our society is that hard work is often rewarded and no one is allowed to limit you regarding the number of sources of income you wish to obtain. My wife and I have both worked multiple jobs when necessary to achieve our financial goals. We got through that season knowing we were setting ourselves up for a better financial future. Sacrifice now for benefit later. That also goes along with the second element. The only way to decrease a loan balance in a reasonable period is to pay it off quicker. Making payments such as you described means you are taking your benefits now to make the sacrifice later. That is the choice. One can live, with a family, off $50,000 and still make adequate payments on one's debt. Or one can increase that income and make adequate payments. It really comes down to a lifestyle choice whereby one decides what elements of one's lifestyle are essential and what elements can wait.

As an aside, that retail job scenario you mentioned with a bit of disdain. One of the major problems with those in retail positions is they consider it a temporary fix for financial woes (often with an air of superiority due to their degrees in hand) instead of a career opportunity. Even in smaller markets, retail managers often make more than your $50,000 a year job which the person above was holding out for. It's all about seizing opportunities that are presented and proving your value to an organization, whether it matches with your degree or not.

Regarding solutions (you asked), the default rate from the department of education is much lower than your above number. There is a difference between being in default and actually defaulting on one's loans. The word "crisis" is thrown around rather loosely when the media discusses this topic. Regardless, you must recognize the disconnect between an individual making a choice and then demanding society assist in cleaning up that choice. I chose my educational path, I squandered opportunities early in life due to immaturity and lack of accountability, I went back to school to better my career opportunities, I do not expect my neighbor to pay for that. The solution you seek you have already described; at the end of 25 years if someone still hasn't managed to pay it off (though I would argue 25 years presents ample opportunity), a complete bailout is being offered. Respectfully, arguing that the tax bill that comes with it is too burdensome sounds like someone who wishes they could have their cake and eat it too.

I agree we should demand accountability from institutions that hand out junk degrees and convince students that are viable. I agree we should demand accountability from the government for backing loans to any breathing 18 year old who wants to live for four years in a protected environment where they have been told they will thrive and be prepared for the future. But I cannot agree that the 18 year old is not responsible for his/her own actions as well.

I like a lot of what you have said. However, in your first paragraph, that situation is more common than you think. Let's take your living off of $50k scenario. How does that happen? Show me a real budget.

First, there are two possible scenarios. Wife is or is NOT working. Wife working (assume no skills), min wage job less than $400 a week, but pay $300 a week for childcare(Very minimal number). Or stay home. Let's just assume one household income at that point.

$50k a year, pre-tax. Tax, SS, etc. lets just throw out a number of $35k take home left assuming no healthcare, etc. That leaves $35k. $25k a year for loan payments. That leaves $10k a year for housing, transportation, food, child expenses, you see how laughable that is right? That's just not possible. Even hard work takes time. How many years until you are paid over $100k? Even after taxes what's left?

I absolutely agree with you that institutions must be held accountable. The cost of higher education was lower when bankruptcy was a threat to lenders. The second they were exempted, we saw the government get involved, tuition costs started to skyrocket and government backed those loans making lenders go wild. Removal of protections and rising cost of school are directly correlated. When protections were in place for the consumer, costs were low. [censored], the rate of bankruptcies that included SL's when the protections were there was less than 2%. So people were NOT abusing the system, and people WERE taking accountability. The right solution would be returning bankruptcy protections to student loans and getting the government out of it in my opinion. It would reign in tuition costs. Consumers could be free of the debt, just as ANY OTHER debt an individual chooses to incur, and suffer the consequences of the bankruptcy.

There may be an initial surge of filings from those desperate, but go look at the actual numbers of filers when BK was in place for borrowers. Less than 2%. Students and borrowers used to take responsibility.

So how do you account for all of the other 17 years olds out there that got similar advice, and were able to sit back and say, yeah, no, that doesn't work.

Is it a cycle I and others are responsible for breaking or eating on your said 17 year old child's behalf? SeekingKnowledge summed it up better than I can rephrase it:

Financial education in high school and tackling the affordability issues are the key. Canceling debt is just treating the symptoms.

https://www.insidehighered.com/quicktakes/2019/09/26/student-loan-default-rate-continues-decline


Default rate at public universities is less than 10%, 6.6% at private universities and defaults have fallen for 6 straight years - where the heck do you get that tens of millions or 25% are in default ?

This.... I blame the parents, not the high school.

Sure the scenario you created is difficult and even impossible. But once again the picture is being painted in a distorted manner that does not account for personal responsibility. Why should the wife be unskilled and only capable of making $20k a year? Why couldn't the wife have come from her own single family home, recognized the struggles of her single parent and decided she wanted better than that for herself, worked her tail off through high school and gotten as many scholarships as possible, and then complete a four year degree in three years to minimize the costs involved? Anecdotal stories do not indicate a societal problem because anyone can declare a "what if" scenario. Additionally, if 50k isn't enough, one can make 75k. Delivering pizzas and waiting tables are legitimate sources of income that can easily be done as a second job.

Regarding a budget, as someone who has been there and done that I would encourage someone to cut everything out beyond what is needed. I have lived on mostly rice and beans because that's what it took. You'd be surprised how much free tv you can get these days. And have you seen all the new board games that are on the market right now? I am not extraordinary, just a normal guy who can add and see that only so much money a month means we can spend only so much money a month. We got through it, others can to. Seriously, if you need some specific advice send me a pm. I'm no expert, but I have been there. Any mountain of debt can be climbed, even 285k.

"Now you have to take any job you can to make the minimum payments. The economy starts coming back. Employers are hiring entry level jobs but require 5 years experience in the field. Employers question the gap in your resume from college to now since you took a job as a retail associate. You can't make your loan payments, so you go back to graduate school (MD OR JD) to defer your loans again as it's your only choice. You finally break the cycle. You made it as a lawyer or doctor, so you find a job starting at about 50k a year."

I don't know, even in my small town, doctors make well above $50K a year. Also, a quick Google search turned up a lot of student loan debt relief programs (and not just for MDs or JDs). You just have to be willing to make the adjustments in your life. If I owed $200K in student loan debt, I think I would be willing to make some sacrifices for a few years to reduce or eliminate that debt.

If we're going to allow student loans to fall under bankruptcy laws, how about we don't allow students to take out loans unless they are going to a state school? If you want the government to step in, then I think they remove themselves from providing aid to students that choose to attend a private school. I mean, if you want to get all hypothetical and all.

That would also force private schools to adjust their tuition rates.

praBSA, I would challenge you with this: Listen to the Dave Ramsey podcast for 30 days. Then come back here and let us know if anything in your thought processes on this have changed. I'm betting that it might change your perspective a little.

Your study and reference to DoE references only the Cohort Default rate which is in relation to borrowers who enter repayment and default by the end of the following year. That number is actually alarmingly high but they use it and spin it the way you did.

Here is a link to one of the more in-depth studies I like to reference which covers a longer period of time:

https://www.brookings.edu/research/the-looming-student-loan-default-crisis-is-worse-than-we-thought/

Some classes shows 23% which others have an expected default rate as high as 40% based on this study.




This isn't an anecdotal/made up story, this is a true story, far from fictitious. It's absurd you suggest that one's choice in wife is the husband's fault and is responsible for the husband not being able to get out of debt. Just a life of bad choices I guess. Come up with a workable scenario to pay $2100 a month in student loans and I will gladly listen, its not possible.

First year lawyers don't. Even in my big city. Maybe doctor was a bad example.

And most "debt relief" programs are scams.

My son left college with student loan debt. He became a high school biology teacher after 2 years when he figured out what he wanted to do with his life - and went to another private college to receive his masters.

His first 5 years were teaching in a rural school; and after that up to $17,500 of his student loan debt was forgiven. He still owes on it (graduated college in 2009 and grad school in 2012); however it is much reduced and he feels better about it. He did go to a small private college, but received a scholarship that covered approximately 1/3 of his cost. And, of course, the Bank of Mom helped out as much as she could.

Motion seconded

Take this advise.

I used to do financial counseling (still do a little). I've seen many cases like praBSA describes. All of them are "do-able" but it takes much discipline. I left college in 1989 with over $100k in medical debts, $30k in student loans, and $20k in credit card debt. I was married and we had a child (not planned) without maternity insurance. My child was covered, but my wife spent 5 days in intensive care - not covered. I went to work for the FDIC making $19,600 the first year. I paid off all of these debts within 7 years and was debt free (other than the house mortgage) within 10 years. How? As SeekingKnowledge mentioned above, rice and beans, no cable, etc. etc. It was tough, but I was able to sleep knowing I wasn't a slave to anyone. Anyone can do it, but it takes discipline.

I'll say it again, listen to the advice about listening to Dave Ramsey. He's not a con or a debt relief scam. I've used his techniques personally and have helped many others with his techniques. His advise is free through his radio and podcasts. https://www.daveramsey.com

praBSA,
What I think you are missing is the fact that there is a large group of people commenting on this thread who have been in similar situations (not the same but they never are) and have ended with significantly different experiences than you are. You said a person cannot live on $50k with a family, maybe not in a big city but again, that is a choice to live in a big city. I personally made roughly 32k a year out of college with a wife and child followed by a second child 2 years later with me making 38k. We didn't have all the fancy gadgets, cars, clothes and rarely ever got to eat out. Thankfully, 12 years later we are almost entirely debt free but we still live a very simple but happy life. It can be done if a person is willing to take responsibility and put their focus and effort into it.

I acknowledge that fact, was just trying to respond to all the nonsense about people talking about their successful situations managing less than 50k in debt or attending college when you could pay for the college you wanted by having a summer job. I never said a person can't live on 50k, you can, IBR makes life bearable for most people. But most people have a loan debt that, if they chose too, they could pay off 20-50k in a relatively short period of time. What no one wants to admit is that to make progress on a debt of over 300k at 9% just starting a career, is nearly impossible with a family and trying to plan for a future. The fact of the matter is, there is no future in these situations for these people. There is no way out without complete collapse. This is why you see more and more frequently suicides noted due to this loan debt becoming a nightmare for people. Social Security being garnished, default doubling and tripling someone's debt, etc.

I think we can all agree its a problem, which is why it has become a hot topic. It happens because Sallie Mae flies 100 employees to Hawaii for celebrating student debt profits. This will be the next great cause of an economic collapse if something doesn't change. No matter which side of the aisle you fall on, politicians are starting to recognize the need to address the existing debt, not just fix the issue for future generations.

Can you imagine what would happen if suddenly consumers had $1.8 trillion dollars to start spending again?

And from which consumers will that other 1.8 trillion come from to make you and others whole?

What are the effects to banks, government and other consumers who ultimately foot that bill through higher taxes who will no longer have that money to spend? The debt just doesn't go way. the money has to come from someone and somewhere. What else does the country go without then to make your life easier?