Student loan snooze in NYT

5/14/2012: The average debt for a student graduating with a bachelor’s is about the same as the loan for a new car, and the average return is considerable larger. A lot of graduates have to get an installment loan online to help them pay back what they owe, but it’s not the end of the world, just look what they get in return; excellent career prospects and financial security for life. Of course, there are a few students who are worried about taking out a loan that might be helpful to them due to their lack of knowledge on loans. However, a simple search online for how do payday loans actually work could put them at ease. Sorry, this is not a crisis. There are plenty of shocking anecdotes, which the NYT gives too much play – but they should not drive overall policy. The discussion does have some good ideas:

Congress should change the law so that colleges and universities have skin in the game when they include loans in the financial aid “packages” that hundreds of thousands of college students are receiving as we speak. Right now, a mediocre private college that encourages a student to borrow $100,000 to get a B.A. in art history bears no consequences when that student defaults on her loan, can’t get a mortgage, delays starting a family and endures constant harassment from collection agents. What if the college itself had to reimburse taxpayers for part of the losses? All in all it can be quite a worrying idea. Not to mention the amount of pressure it puts on students to result in success. It’s a distressing thought that even the simplest things in life can be still be out of reach. Some students around the world may have access to a Right to buy scheme which can tell you if you are eligible to buy a house at a heavily discounted price depending on your situation. Eligibility can be quickly worked out on a right to buy mortgage calculator found online.

In most cases, it doesn’t matter what degree or certification you qualify with, as the reality of not being able to afford luxuries like mortgages remains the same. Even physicians struggle to get the money they need for a mortgage, unless of course, they look to see how this doctor loan program works, as this will be able to help them secure financing for a home. But unfortunately, people in other professions will struggle to get the money they need to live their life. As we know from Pres Berdahl’s debate with Dr. Pernsteiner at the Eugene City club, UO graduates have the lowest debt of those from all OUS institutions:

Obviously this pattern is in part driven by rich out-of-state parents paying the tuition with their checkbooks. Thanks for subsidizing our in-staters: I bet the debt results are similar if broken out for Oregon residents. The full Berdahl handout is here.
And as an astute commenter notes, UO also has the highest graduation rate. Imagine borrowing 25K to go to Western and then not even getting a degree.
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One Response to Student loan snooze in NYT

  1. uomatters says:

    I mistakenly deleted all comments to UO Matters from 5/12 or so til now. I’m very sorry, there were some good ones too! I tried to recover them, but can’t.