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Student loans too easy to obtain, many students unable to repay costs

A massive amount of student debt is being created by federal lending programs, which has many fearing that student loans have become too easy to get.

Almost all student loans are made through the government, which asks little about the borrower’s ability to repay the loan or what kind of schooling they are in pursuit of.

According to the Federal Reserve Bank of New York, U.S. student loan debt rose by $42 billion, or 4.6 percent in the third quarter alone. The total amount of student debt now stands at $956 billion, according to a report in the Wall Street Journal.

Payments on 11 percent of student loan balances were 90 or more days behind at the end of September, which is an increase from 8.9 percent in June.

Unlike many other kinds of debt, student debt is very hard to get rid of after falling behind. Once the borrower is behind, it is typically harder and harder to obtain any other kind of consumer loans. President Barak Obama called for the need of easy-to-get student loans during his campaign this year because of the necessity of higher learning.

U.S. Department of Education Secretary Arne Ducan told WSJ the goal is “to make student loans available to as many people as possible,” and requiring a minimum credit score for students would block many Americans from attending college.

With more stories coming out about the struggles of students deep in debt, the national attention has shifted to the government and borrowers.

“Is there any way the federal government could possibly come out in the good?” said Sen. Bob Corker, R-Tenn. “What we are really doing is piling up debt and down the road the same students are going to have to pay it off.”

With the student debt problem growing quickly, many economists have proposed solutions.

Jackson Toby, a retired Rutgers sociologist, told the Wall Street Journal he proposes students should have to undergo a “comprehensive assessment of credit worthiness.” This would include analyzing how much debt a student has, their academic history and their expected income upon graduation.

The Education Department has also taken action to fight student debt. The department has tightened standards on loans to parents and graduate students, and has even allowed borrowers to postpone payments during times of “hardship,” as reported by the Wall Street Journal.

The administration has also finalized rules that would allow certain borrowers to have their remained debt forgiven after 20 years. This could only happen if the borrower makes monthly payments at 10 percent of their income throughout the duration of the loan.

“The government shouldn’t be lending out more money if they can’t expect to get it back,” Fowlerville freshman Brandon Craigie said. “It will just lead to more national debt.”

Craigie’s family has had experience with the repayment of student loans, and has been on the fortunate side of the matter.

“My aunt went to Central Michigan University for her teaching degree and the only reason she has her student loans paid off is because the school she teaches at paid them for her,” he said. “Without that, I’m sure she would still be paying them off.”

Capac sophomore Shannon Draper said the future of the nation needs to be taken into consideration when determining who gets financial aid and who doesn’t.

“It’s not really fair for the government to say someone shouldn’t get financial aid based on previous experiences because school is so important to society these days,” she said. “It could be just as harmful to the economy if a lot of people can’t afford to get into college. There are a lot of jobs that need a college education today and there would be fewer people to fill those jobs. That means the country’s unemployment rates could be higher.”

8 Comments

  1. The problem is NOT the ease in which student loans are obtained.

    The problem is the students who take them out without having any specific goal, purpose, definition or aim for going to college in the first place.

  2. The problem is also:
    (1) Unmarketable degree programs
    (2) Exorbitant tuition costs
    (3) Unnecessary University Program requirements

    • I wouldn’t call UP classes unnecessary. I graduated in 2010 and some of my favorite classes, if not all, were UP. I took more than half of them in the summer and it was always with a kick a** professor. I stayed at CMU during the summers just because those classes were so “fun” to take when it was easy to focus and the classes were filled with people who actually wanted to be there.

      For some reason, probably due to there being no stress in the class, I retained the info from all of those classes even now, and yes, it has come in handy on more than one occasion.

      I don’t know if I got lucky or whatever you want to call it, but those professors were the best and taught me a lot of interesting things, and none of it was from some textbook.

      College is expensive, yes, and you can use the argument that it’s all just some big scam. If you believe that, I won’t argue, but only you can choose what you want to do. And again, you can’t get mad at a college for simply having unmarketable degree programs. They aren’t all unmarketable, and again, it’s your choice whether or not you want to pursue them.

      Therefore, I don’t really know why anyone would blame the student loan problem on unmarketable degree programs.

      Who chooses to take the program? You do.
      Whose job is it to research a degree program before pursuing it? Yours.
      Who applies for the loan? You do.

      Loan companies don’t just walk up to your doorstep, throw money in a paper bag, ring your doorbell and run away. They have 35 documents you have to sign explaining the payback rules of the loan.

      Again, if you hate UP requirements, can’t afford them, think they are a waste, etc. etc. Whatever the reason…you have a choice to go to a different, shorter, focused program somewhere else that has none of those. No one is stopping you, my friend.

      People come from all over the world to study in the USA for a reason. If you want to complain about loans, you’re probably not ready for college.

      And that’s all I have to say about that.

      • UP courses not a waste? Why should a Chemistry major be required to take (and pay for) phys ed just to graduate? Is it nice? Maybe. Is it necessary? Absolutely not. UP Courses are fluff that should not be required. Unmarketable degree programs are IN PART the universities fault (absolutely the students are at fault as well) — why market and sell a product that you know has no value? You cannot just blame the drug addict for his problem, the drug dealer is part of the problem. How many of the Occupy Wall Street protesters did we see with signs describing advanced degrees in useless fields (Masters or PhD in Post-Black-Plague Central European Medieval Women’s Literature) and (gasp) unable to find a job? Schools should provide meaningfull employment statistics for the various programs.

        All of this creates an expensive self-sustaining economy for the university. Reduce cost of college by eliminating the UP course requirements thus fewer credits to graduate, ditch the unneeded profs and reduce operating expenses, and streamline the degree programs to further trim the ranks and reduce cost. The only reason that a lot of classes exist, and consequently the profs have jobs, is because the courses are required, otherwise almost nobody would take them. Get folks out of college in 3 years instead of 4-5 and this will result in a leaner less expensive path to graduation.

        Yes, college should be more like trade school.

        • Eliminating the UP program because college is expensive is not a solution to any problems. If universities required only major-specific courses (meaning less credits taken) to graduate would only make those courses more expensive to compensate.

          Regardless, the big picture is that a large number of freshmen come to the university having no idea what they want to do. The UP program helps students explore a diverse selection of majors to help students in selecting one. UP courses also add to the marketability of graduating students.

          Lastly, a chemistry degree does not require a phys ed class to graduate. That is an exaggeration to help your argument

        • I don’t really want to start a saga, but you don’t really have a sound argument.

          1) Where is a chemistry major required to take phys ed? That’s a bad example. You can’t draw a parallel like that when UP categories have tons of options.

          2) You don’t seem to understand grey areas. At what point does a degree program become unmarketable? Even if you think these “useless” history programs are unmarketable, you can’t just make them disappear. There are people who find careers in these fields. If you don’t like the program yourself…here’s an idea…DON’T SIGN UP FOR IT. Why are you worried about people who chose to major in something they aren’t the best at? People make their own choices.
          Just because you see some video of a picketing hipster who majored in history and can’t find a job…doesn’t mean history is unmarketable. It’s because that person just doesn’t have a job. That’s all there is to it.

          3) The drug dealer analogy….doesn’t really do anything. Would you sue a liquor store because you’re addicted to the alcohol they sell? (You’re going to say, “but alcohol is legally sold there”…) You’re missing the bigger picture here.

          4) You say, “Schools should provide meaningful employment statistics for the various programs.” Ok, define meaningful. Not everything is black and white here. I don’t care what degree you’re pursuing. The job related to that field is going to be different everywhere. You’re seriously going to choose a life career over a number published in a CMU magazine? That’ll make you feel more confident in your choice? You should be shadowing real workers, doctors for example, to see how viable it is to become successful in that field. That sh** changes year to year. You can’t have some cushy magazine to guide you. Get up off your butt and job shadow, move around, look at different cities, etc.

          Biomedical sciences for example..many people say it’s useless, but if you’re smart enough, that degree can get you into about 50,000 different programs, internships, careers, etc..the list is endless. People just get mad they aren’t
          spoon-fed.

          5) I finished my degree in three years, thank you. Not everyone needs 4-5 years. They just take that long because they aren’t focused, and they don’t WANT to finish in three years. Heck, if I was driven enough in high school, I could have taken enough AP classes that I could have done CMU in 2.5 years.

          If you want college to be some rushed, one professor, one desk, one lecture package, you’re missing out on a lot. I know what you’re trying to say, but everything depends. Just because you have a job in mind that you can get by taking a two year path at a community college doesn’t mean you need to turn CMU into a trade school…that’s why trade schools exist. Go to one and stop complaining.

          Not every college is the same. MIT and Harvard are good for some things, while you might be better off at a small school like Hillsdale for others. Or maybe a community college. Maybe no college at all. Figure out what it is you need and go for it.

      • Lucky for you. My UPs have almost entirely been a waste of times, with the professors (or more often, graduate assistants) and students competing to be as disinterested in the course as possible. A couple decent ones here or there, but those were the exception, not the rule.

        UPs are a poorly disguised money maker, disguised under the belief of providing a “diverse” education. CMU’s mission should be to give the tools and knowledge necessary for students to succeed in their field of choice. Everything else is superfluous.

  3. This is really how we are able to handle it. That’s just what I could do then.

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