Total Insanity…School Loans & Loan Forgiveness

The interest rates on student loans is ridiculous….criminal actually, as are some of the stringent laws associated with student loan repayment.

However, I don’t know how I feel about the idea of forgiving student loans in its entirety.  People took loans, knowing the cost of these loans and that they would have to  be repaid.  There is a responsibility in that, and as adults, you know that going into it.  There’s something to be said for making wiser choices and being held accountable for those choices.  I was fortunate enough to have my parents pay for undergrad (and I know that’s not everyone’s experience).  However, I paid for grad school myself, by working full-time and going to school part-time and saving up for every coming semester.   I purposely chose a cheaper state-school program specifically for that reason, so I could pay for it as I attended.  The program I chose was also probably not as good as some of the other ones I had considered (to be fair), and I specifically looked for a place that offered a part-time option so that I could work and go to school at the same time.  The difference in cost, vs. the difference in how much more attending a private school would allow me to make didn’t make chosing a more expensive option worthwhile. (Unless you’re looking at a top 10 program at one of the Ivy Schools, then you can probably make the argument that the  name, along with the networking opportunities are worth the upfront cost.  But that also depends on the type of degree.  In business or law that might make sense, or if you’re pursuing a PhD in certain fields, but for most degree programs, if there is a cap as to how much you will realistically make regardless of where you attend school – it might not give you the return on the investment you initially thought).   Anyway, I made sure I had no other debts and watched my spending and lived within my means.  Yes, I would have liked to go full-time.  Yes, I would have liked to go to a more prestigious private school vs. a state school, but in the long run, I just didn’t think the burden of debt was worth it.

Having said that, I DO think the interest rates should be reduced, or at least that should be forgiven, and if someone has already paid more than what was originally owed, they should be eligible for some sort of loan forgiveness. Likewise, those who can’t find jobs should be given amnesty until they do find employment of some sort…and again, the biggest culprit in this whole thing is the horribly high interest rates.  It practically guarantees you never get out of debt.  If the government could bail out wall street, at the very least, I think they could do that much for the next generation of workers in this country.

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3 thoughts on “Total Insanity…School Loans & Loan Forgiveness

  1. I have mixed feeling about this. I don’t have loans and never did alhamduliAllah, but I feel I’m in favor of it. I mean the government “bailed out” the mortgage banks, but did that really reflect or benefit any homeowners? Not that I know about! Some people even lost their homes and have a judgement against them! And the banks ate the money and gave no one a break. GE made millions in profit and didn’t pay taxes, now why does hardworking middle class people owe taxes instead? A lot of things are not adding up starting from congress sleeping with corporations and health insurance companies to interest rates. If all these huge profit making sectors can get a break, I think that stunts deserve one too.

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  2. I know what you’re saying about the government and the bailouts and, as I mentioned, I agree some sort of help needs to be there. The wall street bailouts aside – if you look at it, it’s the interest rate is what kills most people. It’s predatory and unfair – most people pay 3 pr 4 times what they originally owed simply because of interest. Having said that, I do feel that the younger generation is a little too used to not being responsible for some of their decisions, and don’t think people should be taught – make whatever decision you want because ultimately someone or something will bail you out and make it better, or that it’ll magically work itself out. That’s just not how life works. I think that can be seen in how people amass credit card debt. it’s making decisions without thinking out the repercussions. I think anyone should think long and hard before taking out any large loan because it has life changing repercussions. What if you can’t pay it, or don’t get a job that gives you the flexibility to do so? Anytime money is involved, you have to look at it as….is this worth it. What’s the return on my investment, etc.? Can I AFFORD this. I mean, we would all like to live in a bigger house, drive a nicer car, go to a top school, but the fact is, not all of us can afford it. Yes, it stinks, but that’s just life. Are you going to do it anyway, and not even think about the aftereffect? Having that high car payment or high mortgage payment? Loans come at a price – they have to be paid back – with interest. And if you are living beyond your means – it will come to haunt you if you can’t afford it. I don’t know if people have this warped perception that loans are just the bank giving out money…but it’s a HUGE commitment, and a very expensive one.

    Having said that, I think higher education is ridiculously expensive and it’s unfair that in some cases it’ll cost upward of $40,000 a year to attend certain institutions, and I think some sort of reform needs to take place there. But until that happens, does that mean – let me go there anyway and figure out how I’ll pay it back later? The interest aside, that loan is someone else’s money…money they could have invested elsewhere, and you agreed to pay it back. I guess the government could just keep bailing everyone out and getting further and further into debt, but that doesn’t seem like a great long term solution either for our country. The goverment bailed out the Banks, in return, there should have been some conditions with regards to home owners and student loans, and interests rates to give a break to those who most need it. The fact that the government didn’t do that is a whole other issue.

    Again, I do think the interest rates should be done with or greatly reduced, and I do think that people who have already paid the same or more than they originally owed should be forgiven the rest of their loan. But in general, I don’t like the message bailouts give.

    Kiss the kiddos for me 😉

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  3. You are bringing out many other loans into this,mi strictly was talking about student loans. I agree that people should be responsible for their actions and live within their means. However I think that taking out a loan to buy a nice car or house is different than one for education. Had the economy not been as bad at is, people losing jobs, homes..etc I don’t think this whole thing would have existed. I mean if the economy wasn’t as bad as it is with so many people laid off and paying $5 a gallon for gas.. Etc then sure no need to forgive any debt. But in this very specific case and situation, I have to agree!

    See you in June 🙂

    Reply

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