Student Loan debt

 

My daughter started her university at U Mass Boston then switched to the University of Mannheim in Germany. However the student loan people did not consider the university real enough for them not to add interest to her original loan and it accumulated for the years she was in Germany, upping her debt horrendously compared to the original loan. The university is Germany's best university in economics which my daughter was studying. It ranks 73rd worldwide.My daughter with my help finally worked her way out of the debt. She thought she was being smart going to an international school where her tuition was about $43 a semester. If only she didn't have to start at an American university and needed a student loan.

According to the Chamber of Commerce, U.S. Student debt is$1.5 trillion. Some 44.5 million people are struggling to pay this off, limiting their ability to have a normal financial life and also to contribute to the economy for normal consumer spending.

Something is wrong.

Other countries educate their population for a fraction of the cost to the student. Some even pay their students to go to university.

Here's some ideas on the problem.

Lower tuition: Many of the universities with huge endowments could lower their tuition. These same universities often underpay their professors. Their buildings are already built. Through publicity make the public aware of what those schools are doing. 

Make sure students are aware of how long it will take to make the amount of money they paid for their tuition. And don't forget to add in the interest on student loans. A degree from a name university in some professions can be the worse financial decision a person can make. It can ruin the rest of their lives.

Make state schools free or low cost.

Do not allow banks to make student loans or if allowed keep interest rates low. Researching for this blog, I found the amounts of profit from student loans varied, but all were obscene. For example: The Congressional Budget Office in February(2013)  estimated that the Department of Education will make $50.6 billion in profit in 2013 from student loan programs.An estimate for 2016 was only $1.6 billion in profit. Profit is the problem.

Profit means a few organizations gain at the expense of the borrowers and of the economy because the borrowers are limited in what they can consume. 

Loan forgiveness or loan reduction would free up money for the economy and the individual. There are so many cases that the amount of the original loan has been repaid several times over.

For those who say, "Well I paid off my loan, why should someone else get off free?" Hmmm...my father beat my mother so why shouldn't I beat my mother???? Perpetuating a bad idea makes no sense.

Find alternatives such as community colleges or on-line learning such as Open University. Then there are apprenticeships. 

We've been brainwashed into thinking a university degree is necessary. A loan officer at a credit union, a brilliant history major with an M.A. said, "I use my history degree. I take loan histories." That doesn't apply to doctors, lawyers, dentists, teachers and other careers that need certification. But then again an electrician needs a license.

Work and go to school part time. Many companies pay for an employee to take university courses. It will take longer. Campus life won't be as much fun, true but a lifetime of servitude to a loan isn't much fun either.