Because a few years ago, the Republicans wanted to hike them, in the midst of the recession, and the Dems made a deal to keep them where they were for a few years, then revisit the issue.
Now that deal is expiring, and the GOP is trying to spin this increase as the Dems fault because they didn’t make the rate permanent a few years back because the GOP then used this as a trading chit for some other nonsense they were trying to ram through, like more tax credits for Exxon Mobil or something.
They are so very difficult to be discharged in bankruptcy that “impossible” is not so much of a stretch. As such, it is almost like a secured debt because the government can hound you for life and garnish your wages. Therefore, 3.4% sounds about right and 6.8% sounds almost usurious.
Talking to my bankruptcy professor, he is astounded at the difficulty in bankrupting student loans. Several years ago, you could bankrupt student loan debt, 1) after 7 years, or 2) in cases of extreme hardship. The new law removed the 7 year provision but retained the same extreme hardship provision.
However, my professor said that under the old law judges would fairly apply the hardship provision and routinely bankrupted student loans. Even though that provision of the law hasn’t changed, judges have taken the hardship provision to an absurd level. He regularly represents Chapter 7 and 13 debtors and claims to have never been able to discharge student loan debt after the new law, but did so with regularity under the old scheme, but that provision hasn’t changed.
I understand why they got rid of the 7 year provision. Say I graduate with a law degree at age 25 (not me, but a regular student. ). I can pay the minimums or negatively amortize my loans for 7 years. During this time I progress enough in my job to get a mortgage on a nice house and a few nice cars. At age 32, I decide to bankrupt this 6 figure debt. That hurts my credit for 10 years, but it might make sense because I’m banking a lot of coin now and have my house.
At age 42, the bankruptcy is off of my credit report, and I basically screwed the government by paying pennies. But the hardship provision should be enforced like it was before.
What field? Let’s say U of P’s engineering program qualifies, but its mathematics program doesn’t. What happens to the 99% of students who switch majors, and then find their new program doesn’t qualify for financial aid?
You got a cite for that scenario? Both sides are playing politics now and I’m sure were back then…I heard Pelosi whine hysterically about all the women who would die of women’s cancer bcause the Reublicans were going to “pay” for it by reducing some Obamacare slush fund. Apparently she and the Dems voted to reduce that slush fund to pay for one of their own pet issues not too long ago and didn’t have the same concerns.
I don’t really see the problem here. There are standards now for schools to qualify to recieve student loan money. I think those standards should be stricter, because it’s public money, and the taxpayers shouldn’t feel that their tax dollars are feeding for profit institutions that aren’t providing a useful education. There are a large number of people trying to pay off these loans because they shouldn’t have been accepted into a program to start with, and some number of people who have degrees without receiving an education sufficient for employment either directly in a field, or because they haven’t acquired substantial general knowledge. Besides 0 interest, I’d like to see more scholarships based on means as well, for useful education. To get there, the issue can’t be a political football. There will always be politicians who manufacture issues out of whole cloth, but there are real economic issues to consider which can be argued by reasonable people. The motivation for providing availability of education is that it is beneficial to the country in economic terms, and not just a way to give a 4 year party for high school graduates before they enter the work force.
You’re clearly unfamiliar with the accreditation process: it’s basically a joke. (And note that that article only deals with the more stringent regional accreditation; the national accrediting bodies, which are significantly less demanding, are equally acceptable to the Department of Education).
There are literally hundreds of colleges – including state-run ones – that only graduate a small fraction of their students, that don’t come close to providing Return on Investment to students, and are not in any danger whatsoever of losing accreditation.
Would it not make sense to set the interest rate for student loans at Prime + some figure?
In Canada, student loan rates are set at the time you start repayments. You can chose floating (Prime + 2.5%) or Fixed (Prime + 5%). With prime currently at 1%, that makes the rates 3.5% (floating) or 6% (fixed).
My bank will give a student line of credit at Bank Prime + 1% (currently 3% + 1% = 4%)
I’m not saying the accreditation process is good. I’m saying there is one, and that process, or another one, should have stricter standards. And only in regard to public money. I don’t care what anyone spends their own money on.
I think there’s some merit to the idea of encouraging study in high demand fields (accounting, perhaps, per the above) the way we do with medicine. The problem is that nearly all bachelor’s degrees are essentially equally worthless (or worthwhile). In 99% of entry level jobs, nobody cares if your degree was in business or biology. So, really, this is something that only works at the postgraduate level.
Bachelor’s degrees shouldn’t be worthless. They should indicate a useful level of skill attained in some field, the ability to analyze, organize, solve problems, and communicate effectively. Too often some of those components are missing. I think there are too many opportunites for schools to operate as degree mills to simply to make money without providing an education that contributes to the economy, or even provides ‘higher education’.
There are certainly fields where a graduate degree is necessary, but a bachelor’s degree in a technical field certainly should prepare someone for a job in that specialized area better than someone with a degree in an unrelated field. The specialization seems almost pointless otherwise. It is important to achieve a useful level of skill in any field as a means of learning and exercising the skills required to do that, but if you haven’t learned enough about biology to have a higher qualification for a job in the field than a business major, I don’t think you’ve really reached that level. That doesn’t mean anyone needs to stay in the field they majored in at college, just that there should be a higher standard for achieving the degree in the first place.
We already do that, by paying people in those fields more. Isn’t that exactly how the Free Market is supposed to work? What, do you want the meddling government to try to decide which fields are really the important ones and putting their thumb on the scales?
). I can pay the minimums or negatively amortize my loans for 7 years. During this time I progress enough in my job to get a mortgage on a nice house and a few nice cars. At age 32, I decide to bankrupt this 6 figure debt. That hurts my credit for 10 years, but it might make sense because I’m banking a lot of coin now and have my house.