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The current student loan debt totals $1 trillion. It’s the biggest worry among college-bound high school students, according to a recent Princeton Review Survey. They may have even more to worry about starting July 1, when the interest rate for subsidized student loans jumps to nearly 7 percent, unless Congress acts. Is there a better plan for students to manage, or even lower, their overall debt? We talk to experts about options for dealing with student loans.

Guests:
George Miller, congressman representing the 11th District of California in the East Bay, and senior Democrat of the House Education and Workforce Committee
Jason Delisle, director of the Federal Education Budget Project at the New America Foundation
Nancy Coolidge, coordinator for federal and state programs, student financial support at the Office of the President, University of California
Mike Cagney, co-founder, CEO, and chairman for SoFi, a group which connects students and alumni through a social community lending pool

  • Ambulamus

    In a police state, only the police have guns.
    In a slave state, only the owners have freedom.
    In a bankster state, only the banksters are free of debt.

  • Jacob

    I’m in law school and have over $100K in debt. I’m generally not too concerned about student loan debt since I can repay it under an Income Based Repayment plan.

    However, many people in my position are looking at job prospects that won’t even pay enough to make interest payments on the debt, leaving us with tremendous tax burdens after the loans are cancelled in 20 or 25 years. Can your guests, especially Mr. Miller, comment on what’s being done to reform the tax code so today’s student’s won’t be stuck with tremendous tax bills in two decades?

  • Kurt thialfad

    Is this the next “bubble”. If you can not find a job that gives you a salary generous enough to pay off your loan, then you are “underwater”. How many students are walking away? And those who are walking away, where are they going?

    • Jacob

      You can’t walk away – student loans are not forgiven in normal bankruptcy proceedings. That being said, you can limit your payments through IBR to (Your AGI – 150% Poverty line) * .15. Even if all your English degree can get you is a job at McD’s, your student loan payments will never crush you.

  • spaceship

    What are the effects of shady (for profit) schools like Heald college that take a large majority of loans.

  • Fay Nissenbaum

    Where is the consumer – the student – in this? Why aren’t all schools required to post their job placement success rates?
    As important is that student loans still cannot be discharged in bankruptcy. Yet we have seen bankruptcy laws tighten on low income folks, while Donald Trump racks up more than 30 bankruptcies and still has private planes.

    As a grad with 100K in debt, why can’t I re-finance at a lower rate like homeowners with mortgages? I am locked in at 8% rate due to consolidation. Again, we favor those seeking profit over those seeking education. Student loan interest should be tax deductible over the life of the loan just as mortgage borrowers do.

    How are the poor and working poor supposed to finance an education to get a leg up in society, and go on to buy homes and build communities, such as happened in post-war America? It is incongruous that education is loudly touted as the means to lever America in the global marketplace. Disconnect, anyone?

  • Guest

    There is no “opportunity” involved in going to college if you have to take out a loan for cost of living expenses. This sounds more like punishment for going to college. The silver bullet of education has lost its magic. It is a bad investment just now.

    • Fay Nissenbaum

      And higher education is not held accountable for their job placement rates.

  • Just Saying

    The federal government proposal discussed was to cut the interest rate on some federal loans by 3.4 percent. Each year this small benefit, reducing the monthly repayment by less than $10, would increase the federal deficit by six billion dollars per year.
    A private sector option was also presented that would encourage people to consolidate their existing federal loans into a new private loan. At the same loan amount discussed above, this refinancing would reduce a borrower’s payment by about three dollars per month. However, the borrower would also give up the flexible and generous repayment options provided through federal loan programs.
    Neither proposal would apparently provide much benefit to borrowers, compared to the cost required. Would either of these proposals at least do something to help achieve the national goal of increasing the share of our population that actually complete education beyond high school?

  • Fay Nissenbaum

    Thuy, why are ending on the private loan PARASITE – the kind of loan that is WORST of ALL for students?

    Irritating!

    • Guest

      The university itself is the parasite.

      • Fay Nissenbaum

        I hear you, but the system that allows both to exist was not sufficiently challenged today. Here is just the tip of the iceberg (it’s short):

        • Ambulamus

          It’s KQED? The only courageous person there is Krasny, and he’s hands-off on lots of topics.

  • Fay Nissenbaum

    Lousy show – no new ground broken! You should have had David Cay Johnston – the tax expert who writes about educational loans – to throw some outrage into this tepid mix of panelists.

  • spaceship

    Would have been nice if the actual reason why this is happening would be discussed. Lobbying, phony for profit school which the tax payers end up paying. Federal government making a profit? The list go on and on. And in the public square were talking about the lazy tenured teachers. Makes no sense.

  • Fay Nissenbaum

    This is David Cay Johnston on student loans and Sallie Mae profiteering:

    Do you see how he puts OUTRAGE into this topic? That’s what I wanted to hear today. And that was just a short excerpt of Mr Johnston’s attack on profiteering in the the student loan industry.

    Not one person, Thuy included, asked the private loan weasel or the UC rep the most important question (from Marty Nemko):

    “What percentage of graduates in your major or program land good jobs within six months of graduation?” What percentage of your students finish in four years and how many drop out?

    Again, these are standard consumer rights questions that somehow do no get applied to higher education. With a trillion dollars at stake, how can the elephant be not seen nor even named?

    And Need To Know last year on this issue:
    http://www.pbs.org/wnet/need-to-know/video/need-to-know-february-10-2012-student-debt-college-and-religion/13038/

    So, Forum producers, you bungled an opportunity to ask hard questions, not softballs, completely avoiding the scam that is for profit education. Follow the money, follow the numbers… We are in debt for life – as slaves – while federal rules allow those seeking profit – not education – the right to discharge their debts.

  • Fay Nissenbaum

    One more link – NPR’s Marty Nemko (the ‘Work Show’, 91.7fm, Sundays, 11am) wrote for the Washington post detailing how higher education fails students, deceiving them and indebting them until old age:

    http://www.washingtonpost.com/national/on-innovations/college-needs-a-consumer-warning-label/2011/10/24/gIQAok1t9N_story.html

    excerpt:

    “Today, assuming you graduate and learned anything, your employment prospects are uncertain. Slightly more than half, 53 percent, of college graduates are employed full-time, according to a2011 study from Rutgers University’s John J. Heldrich Center for Workforce Development. Meanwhile their average salary between 2009 and 2010 was $27,000 — barely enough to either pay back their student loans or to live on — but probably not both. Another 21 percent are in graduate school. Andalmost half of the employed are working in jobs they could have qualified for straight out of high school.”

  • Sanfordia113

    It is unconscionable that the UC OP spokesperson would be a proponent of these programs that cause students to pay higher rates. Allowing discharge and/or forgiveness shifts the burden to future borrowers. There should never be forgiveness, except by death. If loans couldn’t be discharged under any circumstances, the interest rates on loans wouldn’t exceed T-Bill + 0.5%, which is currently about 3%

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