Our student loan program is an absolute mess and a drain on the American Tax Payer!!!! I don't know if that is an absolute fact or my opinion. As I was researching this issue, I was just getting frustrated. This is something you will have to decide on your own. BUT here are some facts - well facts as nearly as I can figure anyway.
One in five households have student loan debt!!! One if five - that is crazy!!!! If I believed that the debt ratio was equivalent with the ratio of productive, contributing college graduates, that number wouldn't be so bad. But I do not believe that at all.
Before everyone gets all upset, rest assured that I believe everyone should be entitled to an education. I have no idea how to make it work, but I don't believe that the current program is doing the job!
Government loaning money for schools??? Government giving longer period for that money to be repaid??? Government forgiving that debt???? What the heck? And where is government getting the money to loan out? Tax payers and China?? How did we get in the loan business in the first place? If government is going to be in the loan business, I should think that there would be stipulations to receiving that loan. #1 Go to a college that meets qualifications such as a good education at a reasonable cost. #2 Major in something that will be marketable and benefit both the educated and society.
If government is going to be loaning college money, they better be checking into the colleges! It seems to me that if there is more money available, and more students going to college, colleges are really taking advantages of that. Rising tuition costs prove that. And that is our free enterprise system at its best. Profit and demand - more demand, more rising costs, more profit!
Student debt crushes our economy! How?
1. First off the jobs are not there for college graduates! Period. There are way too many people graduating with no employment or at least under employment. But that is a different topic.
2. Debt lowers the chances of buying a home. Graduates are having a difficult time getting home loans because of the debt/income ratio. If homes are not purchased, the housing market tumbles. If the housing market goes under, there goes jobs! Vicious circle.
3. Same goes for the auto industry.
Remember, I am not against a college education. Right now I have two daughters and their husbands in college. But every one of those kids/adults have worked towards their education. They have held jobs, sometimes more than one, and have earned the grades to receive scholarships from the school. I assure you that when they are finished with their education, they will appreciate it! Isn't that the way it should be?
I have seen people who get grants for school and then get loans. When the loan money comes in, they use the excess to buy TVs, cars, and even Christmas presents for their kids. I met a lady who works at a college book store. She was telling me how the student loans are used to purchase entire wardrobes from the book store! Is that the way the program is intended? I don't think so. What happens to those people when the loans come due? That $40 sweatshirt will cost $400 over the course of the loan, people!
Here is what my hero, Dave Ramsey, has to say about college debt. He isn't endorsing a candidate, he is teaching financial responsibility. Getting a student loan can hurt you much worse than just a monthly payment.
Borrowing so much hurts the economy in multiple ways. More debt means less money invested. If money isn't invested, the economy doesn't grow as well. More debt also means less money to outright buy things, which leads to more financing to buy things
The sad part is that after you've gotten a student loan and paid on it for a couple of years, that's when the reality hits you. That's when you realize that you have obligated yourself to pay thousands of dollars in interest over several years, instead of keeping that money for yourself and investing it, or giving it away, or even saving up and buying things with cash.
Well, this is your wake-up call! Don't take out a student loan. You can apply for scholarships and grants, work part-time or go to a cheaper school. But it's not worth it to take out a loan and start behind the financial 8-ball in life when you graduate
You can read the rest of this article here.
http://www.daveramsey.com/article/student-loan-backlash/lifeandmoney_college
My head is spinning over all of this. Look up each candidate's policy proposals. They both seem to agree with me in certain ways. Then decide for yourself who has the best ideas.
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