Will the Federal Student Loan Program Default?

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Will the Federal Student Loan Program Default?

Postby ProfessionalEd » Fri Apr 20, 2012 12:41 pm

Recent history has shown us that the mortgage/housing and auto industry crisis' caused major problems for the United States economy. This May, the Federal Student Loan debt will exceed "One Trillion Dollars" $1,000,000,000,000. Look at all of those zeros! Will this event cause another economic crisis for America, and how will it change higher education as we know it? How will it effect students enrolled in college and universities in general?

http://www.google.com/search?q=federal+ ... ent=safari
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Re: Will the Federal Student Loan Program Default?

Postby nosborne48 » Fri Apr 20, 2012 2:23 pm

The student loan situation really can't be compared with the housing collapse. First, student loans are not dischargeable in bankruptcy and are not subject to a statute of limitations in the normal sense. They don't even require a court judgment to collect from tax refunds and the like. Second, other than the graduates themselves, no one speculates in student loans. There is no "being underwater" because the degree has lost value. Finally, there is not the huge wave of defaults we've seen with housing in part because "default" really doesn't mean anything. As long as the student lives, he can be squeezed.

Nevertheless, I do think that the U.S. system of financing higher education is insane and founded upon a faulty principal; that the degree inures to the benefit only of the student and therefore the student should bear the entire cost of his education. That's a dangerous manifestation of a growing anti-intellectualism in this country and it is a serious problem for our future.
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Re: Will the Federal Student Loan Program Default?

Postby Hungry Ghost » Fri Apr 20, 2012 2:55 pm

This is a good thread topic. I initially thought that the idea was kind of outlandish, but the more I think about it, the more I think that there might be something to it.

The tech bubble collapsing around 2000 did even more damage to my personal finances than the more recent housing meltdown. Silicon Valley has never returned to anything like its (probably unrealistic and unsustainable) late-1990's boom (when, for one brief moment, it felt like its engineers ruled the planet).

The thing is, bubbles cause damage when they pop.

So there's the inevitable question of whether we might be entering into kind of a higher-education bubble today. Might an argument be made that university degrees are seriously over-valued and people are throwing way too much money at them? (As they did at real-estate, and tech-stocks before that?)
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Re: Will the Federal Student Loan Program Default?

Postby nosborne48 » Fri Apr 20, 2012 3:28 pm

Oh, yes! Clearly we over-value degrees. Even the University system badly over-values doctorates...you shouldn't need a doctorate to teach English or math at a liberal arts college. A Master's degree, maybe thesis-based, should be enough for such a career but it isn't; we require the full set of academic research skills for a non-research position.

Do lawyers REALLY need law school to be competent? No. Law school doesn't really do much of anything beyond the first year. But most state absolutely REQUIRE a law degree and some demand an undergrad degree as well. I still cannot understand what possible value there is in requiring 150 semester hours for the CPA license.

Has anyone ever demonstrated that an MBA is of any real value to success in business?

Higher education, especially at the graduate level, is a racket.

I draw the line at medicine, though...I want my doctors to have gone through the most rigorous training possible before they cut into me. But even the lengthy training required of physicians and surgeons is substantially practical rather than theoretical.
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Re: Will the Federal Student Loan Program Default?

Postby ProfessionalEd » Fri Apr 20, 2012 3:35 pm

Ah Nosborne. There is only one way to get out of paying your student loans, and that is to apply for disability. In fact it worked for me in the late 1980s, with the forgiveness of a $6,000.00 student loan. And my exwife, had one forgiven based on disability for approximately $3,500.00. No one can help it when they get sick, but it doesn't have to carry with you.

The moral of the story. If you are in debt up to your a$$ in student loans, try applying for Social Security Disability. It is the fresh start that you can't get through bankruptcy.
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Re: Will the Federal Student Loan Program Default?

Postby nosborne48 » Fri Apr 20, 2012 3:41 pm

The truth is, a GOOD High School program should be all the general education that most people need to succeed in life, followed, of course, by appropriate, targeted vocational or professional training.
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Re: Will the Federal Student Loan Program Default?

Postby ProfessionalEd » Fri Apr 20, 2012 4:00 pm

I hope everyone carefully reviews the articles in my initial Google search. The greedy institutions and companies raping the Federal Student Loan Program deserve what is about to happen. Maybe then, tuitions will come down to a level, that people can afford to pay back.
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Re: Will the Federal Student Loan Program Default?

Postby Hungry Ghost » Fri Apr 20, 2012 4:10 pm

nosborne48 wrote:Oh, yes! Clearly we over-value degrees. Even the University system badly over-values doctorates...you shouldn't need a doctorate to teach English or math at a liberal arts college. A Master's degree, maybe thesis-based, should be enough for such a career but it isn't; we require the full set of academic research skills for a non-research position.


I've been spending a lot of time at the Internet Archive recently (archive.org). They have a great deal of the out-of-copyright 19'th century academic literature scanned and available for free download in a variety of formats (kindle, pdf, epub etc.) So I have downloaded hundreds of old academic titles in subjects of interest to me.

The thing is, most of them seem to have been written by professors with MA degrees. Doctorates appear to have been fairly rare among academics in the 19'th century, except among writers in the field of religion, wehre everyone seemed to sport a DD (doctor of divinity) which may have been honorary in many cases.

And another, very significant thing. Many of the 19'th century authors weren't really university professors at all. This was still the age of scholarly amateurs, people with BA degrees typically, who ended up working in the Indian colonial administration or something, and became Sanskrit scholars as an avocation, out of personal interest. And sometimes they wrote serious academic volumes that were published by publishers like Oxford University Press.

I think that we see far less of that today. Amateurs have been kind of excluded from serious intellectual life as the numbers of universities has exploded (England only had two universities total as late as 1830) and as the condition for being taken seriously has become the PhD. Barriers to entry into intellectual life have risen so high that intelligent people in normal life who might otherwise have been interested don't even try any more. They already have a sense that it's impossible, that it can't be done.

So Western intellectual life is increasingly a self-perpetuating clique, PhD's educating future PhD's, publising a flood of meaningless journal articles that not even others like themselves bother to read any more, while the whole process is cut off from and more and more foreign to regular people and from normal life. (I guess that the 'postmodern' humanities are kind of the reductio-ad-absurdem of that devolution.)

If there's any truth to these observations, the popping of the higher education bubble and the consequent reductions in public funding, downsizing of many institions and closure of many departments, might not reduce the volume of valuable scholarship coming from within the academy by very much, while it might have the unanticipated and very positive result of reviving the perceived possibilities of doing good work outside the academy.
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Re: Will the Federal Student Loan Program Default?

Postby ProfessionalEd » Fri Apr 20, 2012 4:40 pm

If this doesn't scare you, nothing will!

http://www.stansberryresearch.com/pro/1 ... OILN428/PR
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Re: Will the Federal Student Loan Program Default?

Postby Hungry Ghost » Fri Apr 20, 2012 4:51 pm

nosborne48 wrote:The truth is, a GOOD High School program should be all the general education that most people need to succeed in life, followed, of course, by appropriate, targeted vocational or professional training.


In the 19'th century, a good college-prep secondary program was a accomplishment, it meant something. Students often had to learn both Greek and Latin as a graduation requirement. (Today it might be differential equations and computer programming.) Of course, only a minority of people ever graduated from high school.

What changed that was the ideal of universal public education. As everyone was expected to graduate from high school, graduation requirements began to decline to kind of a lowest common denominator.

And as eveyone started to sport a (increasingly insubstantial) high school diploma, it stopped being a differentiator between educated and uneducated people. So people with a goal of appearing educated had to get a BA.

And today even bachelors degrees are becoming increasingly ubiquitous, so a student needs to earn a graduate degree to set him or herself apart.

So costs escalate, barriers to entry multiply, and people wonder what's gone wrong and why all the idealistic dreams aren't working out.
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Re: Will the Federal Student Loan Program Default?

Postby ProfessionalEd » Tue Apr 24, 2012 11:26 pm

There was more news on the Nightly NBC News, with Brian Williams regarding the financial crisis soon to hit the student loan industry. Guaranteed to effect the outcome of education in America. Watch the news clip.

http://www.msnbc.msn.com/id/21134540/vp ... 5#47165495
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