Student Loan Debt

[Two-Gun Pete]

On 8/10/2021 at 4:22 PM, jasonxctf said:

Important to point out, current 529 plan here in Illinois, is not College Illinois. Here's info on Bright Start, reviewed by Morningstar. 

Actually, ptatc said that he was using College Illinois. And yes, at one time, IL had the prepaid tuition plan, known as "College Illinois," in addition to Bright Start/Bright Directions. 

The prepaid tuition plan was the one that my previous post was referencing in replying to ptatc's earlier post.

On 8/10/2021 at 5:15 PM, ptatc said:

Yep. Luckily, my last one graduates in 2023. It was a great plan but I can see why they had financial difficulties. We got a nearly 65% return on our investment.

Good to hear. 

That said, it was completely untenable to continue the prepaid tuition plan; most other states have already shitcanned theirs years ago.

In effect, they wanted to offer to contract holders "market rates" of return, while avoiding any measure of market risk/volatility, while having the taxpayers guarantee that other kids could go to school, regardless of how the underlying investments performed. If College tuition has increased by an average of ~8% over the past 2 decades, thats pretty much a "market rate" of return, if you're investing in large cap equities. 

But these prepaid tuition plans don't ever pass on any market losses to the contract holders over the time that they hold the contracts. Instead, the states and their taxpayers eat any losses, while guaranteeing that the tuition will be prepaid. (At an average return of ~8%, based on what tuition costs' inflation rate has been in recent decades.)

At the same time, the state was forbidden from investing more aggressively inside these prepaid tuition plans, by rule. So on the one hand, tuition goes up by ~8%, and the plan has to pay that out. But OTOH, College Illinois couldn't ever invest aggressively enough to cover the costs incurred by redemptions. Instead, the taxpayers ate the difference. 

 

TLDR: Prepaid tuition plans were a pretty sweet deal for the contract holders. They were pretty much shit for the state of Illinois and for the taxpayers. If you're like ptatc and you've got one of these, don't ever let these go until your kid gets into school.

Edited August 12, 2021 by Two-Gun Pete

[Soxbadger]

Looks like they are trying to move forward with a law that will make student debt dischargeable in bankruptcy after 10 years. I know this is less than what people hoped for, but it is a start.

[he gone.]

that will help future college participants. not allowing to discharge even in BK is what created this mess in the first place. it took the free market out of the equation leaving lenders to know they'll be able to recoup their investment regardless. so lending/underwriting (if you want tot even call it that) went out the door and colleges took full advantage of it basically going all SEC Football on their campuses. upgrading buildings, upgrading dorms, spend, spend spend. 18 year olds were funding campus upgrades via debt. a buncha thieves and corporations and politicians led to this mess. unfortunately someone has to get the brunt of it, and it's mostly 20-40 year olds. 30 year olds probably have it the worst.. the most expensive and useless degrees with a poor economy.  

 

[StrangeSox]

fwiw

 

 

[Soxbadger]

2 minutes ago, StrangeSox said:

fwiw

 

 

Well of course its supported by people who never went to college. Im sure free tickets to Field of Dreams game has the highest support amongst those who did not already pay for a ticket.

 

[StrangeSox]

One common push back on the idea of expanding universal free public education beyond k-12 was the claim that it was something favored by "elites"/college educated people.

From that data it looks like decent-to-large majorities support it across every demographic slice except two--conservative republicans and old people who grew up when college was a tiny fraction of what it is now if not outright free like Cali used to be.

[Soxbadger]

2 hours ago, StrangeSox said:

One common push back on the idea of expanding universal free public education beyond k-12 was the claim that it was something favored by "elites"/college educated people.

From that data it looks like decent-to-large majorities support it across every demographic slice except two--conservative republicans and old people who grew up when college was a tiny fraction of what it is now if not outright free like Cali used to be.

Ive never heard that before. I always believed that people who paid for college did not want other people to get free college because it diminished the value of their education and lowered the barrier of entry into their field.

IE

Lawyers want law school to be expensive and difficult because that means less lawyers which means the current lawyers have less competition and can charge more.

[raBBit]

On 8/12/2021 at 10:47 AM, Soxbadger said:

Looks like they are trying to move forward with a law that will make student debt dischargeable in bankruptcy after 10 years. I know this is less than what people hoped for, but it is a start.

POTUS making good on that promise of $10k of relief would be a start.

[Jerksticks]

On 8/12/2021 at 10:59 AM, BrianAnderson said:

that will help future college participants. not allowing to discharge even in BK is what created this mess in the first place. it took the free market out of the equation leaving lenders to know they'll be able to recoup their investment regardless. so lending/underwriting (if you want tot even call it that) went out the door and colleges took full advantage of it basically going all SEC Football on their campuses. upgrading buildings, upgrading dorms, spend, spend spend. 18 year olds were funding campus upgrades via debt. a buncha thieves and corporations and politicians led to this mess. unfortunately someone has to get the brunt of it, and it's mostly 20-40 year olds. 30 year olds probably have it the worst.. the most expensive and useless degrees with a poor economy.  

 

Yep.  It’s 100% the government’s fault for guaranteeing the loans.  100%.  Everybody drunk on free billions.  People have tenure for no reason other than guaranteed loans.  People SEEK tenure for no other reason than guaranteed loans.  People teach useless information for no other reason than…guaranteed loans.  The absolute majority of the colleges in Illinois alone exist because of 1 thing- guaranteed loans.  
 

100% the government’s fault.  And now we want more government to bail the whole thing out. 
 

You can’t write this stuff funnier lol

[jasonxctf]

i think some of the angst about making college "more affortable" or even free community college, is purely politics. College educated voters tend to vote heavily towards one party versus the other. So the political party who "loses" with college educated voters, doesnt really want to increase the number of those said voters.

[Texsox]

I fully support K-14 public education. We’re already partly there will dual credit in high school. 

[ptatc]

On 8/13/2021 at 5:34 PM, Texsox said:

I fully support K-14 public education. We’re already partly there will dual credit in high school. 

While its available, it's not free. In Illinois we had to pay substantial fees for the dual college credit. Unless it's changed in the 3 years since my kinds took them.

[Texsox]

19 hours ago, ptatc said:

While its available, it's not free. In Illinois we had to pay substantial fees for the dual college credit. Unless it's changed in the 3 years since my kinds took them.

Free here. YMMV. That should be the next step. 

I'm writing  letters to my senators (talking to brick walls) and my President (more receptive) to have dual credit free to all as a federal program. 

I wasn't aware some locals charged. 

[southsider2k5]

2 hours ago, Texsox said:

Free here. YMMV. That should be the next step. 

I'm writing  letters to my senators (talking to brick walls) and my President (more receptive) to have dual credit free to all as a federal program. 

I wasn't aware some locals charged. 

Its actually the college board that charges, but lots of locals pick up those costs, or there are special programs for systems with a significant level of poverty which pay for those programs.

[he gone.]

On 8/13/2021 at 5:34 PM, Texsox said:

I fully support K-14 public education. We’re already partly there will dual credit in high school. 

The 18 year old "you're an adult" threshold has always been kind of arbitrary and driven by old school thoughts, not science. Though all humans are different, the brain doesn't really fully develop until 25 for men, and a few years earlier for women. I dont know about all of you, but college to me served a number of purposes, but one main one is the social development and maturity. Give 18 year old myself a paycheck and tell him to go out in the real world and I'd be found shotgunning beers. Hell, that was even me at 23. I'm not sure we need school, school through K-14. But maybe something like a transitionary school from grades 12-14 or 12-15. Maybe less of sit down memorize, and more take this and apply towards every day needs in the real world. Either way, I am all for more education, making it free or affordable, and building a better, more well rounded society. 

[Texsox]

21 hours ago, southsider2k5 said:

Its actually the college board that charges, but lots of locals pick up those costs, or there are special programs for systems with a significant level of poverty which pay for those programs.

At least here in Texas College board is AP. Dual credit partners with a local college. I learned today in our district our students earned over 55,000 credit hours. 

Teachers of dual credit typically have to meet the same requirements of their faculty. Usually a MA in the subject. 
 

With dual credit the student is also enrolled at a college. Their college transcript will show those hours as having taken the class. Unlike College Board and their AP program there isn’t a test at the end to determine college credit. The value of AP or Dual will depend on which college or university the high school partners with for dual credit. In my district we’ve partnered with a local community college and UT Austin. Our students credits are guaranteed by law to transfer to any public college or university in Texas. In practice only a few private colleges nationwide refuse to accept them. They also typically do not accept AP or other community college credits.

I was reading that in Indiana the dual credit path is surpassing AP as the path for earning college credits while in high school. 
 

A separate discussion is the value in taking college freshmen classes while in college instead of jumping in at 200 level while also adjusting to college life. 

[Two-Gun Pete]

I'm surprised this hasn't been posted here:

 

The commies at Forbes talk about student loan forgiveness

And here's another one:

Educators getting into piles of debt

[The Beast]

Saw this today.

https://www.cnn.com/2021/10/06/politics/public-service-loan-forgiveness-program-overhaul/index.html

[Marqhead]

49 minutes ago, The Beast said:

Saw this today.

https://www.cnn.com/2021/10/06/politics/public-service-loan-forgiveness-program-overhaul/index.html

It would be big win if this is an actual overhaul. Forgiveness could be within reach for my wife. 

[Texsox]

On 10/6/2021 at 6:06 PM, Marqhead said:

It would be big win if this is an actual overhaul. Forgiveness could be within reach for my wife. 

Many government programs have put in so many regulations to "protect the taxpayers" from fraud that it makes the systems so complex that no one can complete the process. I remember being in a meeting years ago discussing the various childcare options for low income workers. By the end of the presentation I understood why some workers gave up and just stayed home collecting aid. A bunch of business and community leaders had a hard time following which programs were available and how a pay raise could move someone out of one program, but they could apply to a different program. 

I read a story by a college professor and how she kept meticulous notes over fifteen years and lost out when one of her servicers applied payments to one loan balance first then to the other instead of equally to both. She's working through an appeal. 

[Ducksnort]

Looking more and more like widespread forgiveness is not gonna happen anytime soon. 

[Texsox]

48 minutes ago, ScooterMcGee said:

Looking more and more like widespread forgiveness is not gonna happen anytime soon. 

Mid term election ploy? Re-election ace in the hole?

[Ducksnort]

47 minutes ago, Texsox said:

Mid term election ploy? Re-election ace in the hole?

That would piss me off lol. I mean I'd be happy for everyone else, but during the pandemic I saved up what I needed to to pay off my loans. It's not a small amount. I haven't actually paid them off in hopes of forgiveness coming, so then i could in turn use that money for a downpayment on my first house. As soon as we have to start paying again, I will just pay off all my loans. Not going to play the wait and see game while interest accrues. But if I have to use that money to pay off my loans only to have Biden forgive 10 grand just to get re-elected...ho boy.  

[Texsox]

5 minutes ago, ScooterMcGee said:

That would piss me off lol. I mean I'd be happy for everyone else, but during the pandemic I saved up what I needed to to pay off my loans. It's not a small amount. I haven't actually paid them off in hopes of forgiveness coming, so then i could in turn use that money for a downpayment on my first house. As soon as we have to start paying again, I will just pay off all my loans. Not going to play the wait and see game while interest accrues. But if I have to use that money to pay off my loans only to have Biden forgive 10 grand just to get re-elected...ho boy.  

It’s a tough call. I’d wait until after the mid terms

[Ducksnort]

Sounds like Biden is going to make a decision in the next few weeks on widespread forgiveness