Student Loans are a Terrible Idea
- Thread starter blox87
- Start date
I believe the university takes out their cut for tuition first (and student housing if they live on campus) Students get a check for whats left over.
For instance...tuition & room and board come out to 10k and the student gets a student loan for 15k...so when the student gets his check its only for 5k
If you had a college degree, you might have a much better understanding how it works. Perhaps they paid the security deposit and rent on a college rental? Needed some furnishings. bought some supplies for the college year. Or paid for their books? Or a lot of other things that comes with paying for college.
You are talking about 18-21 year olds - kids for all intensive purposes. Not all have a checking account or credit/debit cards. There is something called "cash" that some people use to buy stuff.
$80K/20 = $4K. That is a BEGINNING on what college costs for a year. The average private school is near $20K, not counting dorm/apt/food/college/car/transportation/etc.
The student has the debt. They often have little money. $4K is basically a down payment on a year of school.
When I got a degree, the loan was gone after paying a couple major expenses. And it was a lot cheaper and there is a lot less loan money available than when I went.
If the dropout rate wasn't 3 out of 4 I wouldn't be questioning the use of their money and how they spend it. I'm sorry to tell you that is not the case and we don't live in neverland. Alot of the money is put to misuse whether it be art classes, textbooks, tvs or bongs. Why aren't all the books available cheaper digitally now instead of ripping you off at 150 bucks a pop? Ever wonder why textbooks are so expensive yet you go to barnes and nobel and NO book there costs as much as a college textbook. It's called robbery.
not only that, but international students can't even get an unsubsidized private loan. many of them don't even have social security numbers and can't get credit cards.
as i've said before, they need to underwrite student loans based on your major and your college GPA.
(for freshmen, they obviously don't have a college GPA so the underwriting would be based solely on their major.)
if you have a 2.5 GPA in a shit major like women's studies, your interest rate should be margin + 3%, reflecting your credit risk, and you should be limited to $2000 per year. if you have a 3.8 in electrical engineering, you should get the lowest rate and be able to borrow more.
student loans are the only type of loan that has zero underwriting standards (well, not including sub-primes from 2003-06).
(for freshmen, they obviously don't have a college GPA so the underwriting would be based solely on their major.)
if you have a 2.5 GPA in a shit major like women's studies, your interest rate should be margin + 3%, reflecting your credit risk, and you should be limited to $2000 per year. if you have a 3.8 in electrical engineering, you should get the lowest rate and be able to borrow more.
student loans are the only type of loan that has zero underwriting standards (well, not including sub-primes from 2003-06).
Yeah, and i suppose in 2004-2006 when housing was going through the roof had nothing to do with everyone and their mother qualifying for a loan.
The cost of a house = homeowners raising their sell prices like crazy + international buyers + US buyers. Right?
Easy to get loan and countless grants have EVERYTHING to do with colleges raising their tuitions. Any business that gives credit to borrowers to buy their product will sell that product for inflated prices.
I'm pretty sure it would be illegal to charge an interest rate based on your major. I'm sure there is a steering law that prevents this charging a higher interest rate for a bullsh*t major. The GPA part might fly though.
well if there is a law against charging higher rates or limiting loan size depending on your major, then that retarded law needs to be repealed. that would be like a law preventing banks from charging more for people with lower wages. they're reasonable criteria for underwriting