Should There Be a "Cap" on Student Loans?

Should There Be a "Cap" on Student Loans? Topic: Should There Be a "Cap" on Student Loans?
April 21, 2019 / By Trudy
Question: In the US, many students borrow thousands of dollars to attend college or trade schools. In many, many cases, the amount borrowed cannot be paid back for decades, because the student graduated from a program that is low-paying in comparison to the enormous debt. And most of these debts are "government" loans, which cannot be discharged in bankruptcy. Should the lenders be required to consider the pay level of the graduated student in making the loan? Should they only be able to lend the amount that a student could repay over (for example) 5 years, making payments of 10% (for example) of their pay? http://www.nytimes.com/2008/08/24/busine... Where's the love, cbjack? I'm not sticking my nose in anyone's business, I'm just asking what this community might advise to resolve this problem. No one seems to be benefitting under this current system--the loans are never paid back and the student lives with the effects of crushing debt. Do you have an answer? I appreciate the UK point of view. How do other democratic, capitalist countries deal with the expense of education after high school? I see your point Randy. I had to work my tail off to avoid college debt. If we want an educated population, maybe it shouldn't be so hard. And I was wrong before--the "schools" benefit from the student loan system. They get students to borrow for junk degrees, and the loans are government guaranteed. So the government ends up paying the school or lender for a student's degree, but the student is never let off the hook. If the student had to pay for it themselves, they might pick a major in demand in the market place. Thoughts? witwhat - I'm confused by your frequent quote marks around "civilized" because I don't see where anyone else use that word here. Many, if not most, degrees have value and people from other countries want to study in the US to get them. But many of these loans are made for things like "culinary academy" where students pay $40,000 to qualify them to peel potatoes. Is that a scam? And if it is, should the federal government be footing the bill? witwhat - I'm confused by your frequent quote marks around "civilized" because I don't see where anyone else use that word here. Many, if not most, degrees have value and people from other countries want to study in the US to get them. But many of these loans are made for things like "culinary academy" where students pay $40,000 to qualify them to peel potatoes. Is that a scam? And if it is, should the federal government be footing the bill?
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Best Answers: Should There Be a "Cap" on Student Loans?

Sandie Sandie | 1 day ago
Well the answer to that would have to be yes, however the level of that loan should be high enough to allow the student complete their studies with some margin of ease. Here in the UK not all 'Student Loans' have to be paid back. In my opinion the government should do all in its power to encourage young people into University Education and if that means financing those who are less well off then so be it, education should be for all not just those with a privileged background. Let's face it, the cost of subsidising students is only a tiny amount compared with grants given to foreign countries in the form of 'aid' or the military budget. The future of our country lies with the young!
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Sandie Originally Answered: student loans?
I think I just answered this question but in a different forum. Anyways... You already have Pell grant and Stafford. Is Stafford subsidized or unsubsidized. If you have one attempt to get the other. What you have now are federal aids, you need to look into local. I am a student at WSU and Washington gives me the Need Grant as well as the SEOG grant. Both of which are for low-income students. Also look into medicare or food stamps as you won't have to dip into your financial aid for food or times when you are ill. I currently have Staffords (unsubsidized), Grants (Washington, Pell, and SEOG), work study (make about $2-$6 more then minimum wage), and 2 jobs, so I am usually set for the school year. Also medicare helps and food stamps (we were issued a debit card and the government just loads it up with about $150 every month).

Noella Noella
Ahhh such "enlightened" opinions. #1 There is a cap on how much you can borrow. #2 If you "limit" what the student can borrow, you limit what they can become. #3. People have a right to make their own decisions, even stupid ones. #4. For those with advanced Finance Degrees; making it "free" doesn't mean that the slice of the pie that you pay for disappears, it just means you pay more taxes elsewhere. #5. If the US is so far behind the rest of the "civilized world", why is an American Degree still pursued by every professional in the world. #6. Free isn't "civilized" it's stupid. People that have already achieved these degrees need to be encouraged to teach them. Think they'll work for free? *Side note: If cheap "civilized" degrees are so good, why do Canadians abandon their ultra-mega-subsidized educational system and pay through the nose for an American Degree? Answer: They know the value of socialized degrees.
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Lys Lys
Every year I get a property tax bill and pay an azz load of property taxes. Within that tax bill is an illustration, shown as a pie, of how my taxes are spent. The largest section of that pie, over 50%, is for the education system. I think college should not cost anything except for housing. I pay more in taxes than will ever in any manner be recovered in any form by any member of my family so education should be free. If we didn't have so many bums mooching off of the system in this country education could be free but we have the dem/lib approved sponge society and they eventually will bankrupt us. I put both of my children through college without them having to get any loan. It's not fair for a child to be strapped with those expenses leaving college knowing that before they even land a position they already have these debts. It's also not fair to tax payers to see a segment of our society going to college for free off of our tax dollars when our children have to pay. But that is the lib/dem plan. To punish those that work.
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Keira Keira
The American education system should be revised so that every American gets an education from P-16. America has fallen behind the rest of the world due to a lack of affordable education.
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Indiana Indiana
No. People should have the freedom to make their own choices. Who are you or the government to stick your nose into other peoples business?
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Indiana Originally Answered: Student loans.scared?
You left off how much you pay for school and what degree you think you may want to get. There is a case to be made where school may not be worth it if youre paying 30k per yewr and getting a philosophy degree. You have to commit to school and stop worrying about paying it back if you are going to be successful at school. In the end it pretty much all works out. Say you get a 4 year degree and graduate with 70k in student loan debt but then are able to make 50k plus most years out of college. Your student loan payments are going to get put on a long long term repayment plan, they'll basically cost you 500-700 per month assuming you have a normal interest rate. That seems like so much money to a college kid but if you're making 50k per year you're taking in like 3.5-4k per month after taxes leaving you with a few thousand every month to live. That is very doable. In fact that is a way way better life than dropping out probably unless you want to enter a trade that pays well like being an electrician or something. Either way you need a plan. Dropping out and starting somewhere near minimum wage to avoid the debt long term is a bad plan. Taking a few semesters of courses then not graduating is a bad plan. You need to commit to graduating and forget about the debt or come up with a plan to get a decent paying job without college and commit to that. Being stressed out and indecisive will get you the worst of both worlds. Also remember inflation will eat away at the amount of your debt. In 10 years 70k won't be worth as much as 70k is today. And it will be easier to make 50k+ per year because 50k won't be worth what it is today.
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