Ron Lieber Answers Your Questions on Student Loan Debt

Thursday, October 27, 2011

On Wednesday, President Obama announced his plan for lowering the burden of student loan debt for people saddled with paying for the high cost of their education. The Takeaway asked listeners to tell us their stories about how they’re dealing with student loan debt. Ron Lieber, personal finance reporter for The New York Times, attempts to answer their queries.

Guests:

Ron Lieber

Comments [4]

pau. from Prospect Heights, Bkln

The kid who called in who owes $14k: nobody asked him what he studied, how well he did, or what kind of job he was expecting when he graduated (and, now presumably, cannot find). What's up with that?

Oct. 30 2011 11:30 AM
Dave from Boston

Listened to this segment this AM. Here's my take on the situation.

When I graduated with my BS in 1981 my entire 4 years of college totaled just under $29K(including room and board books, tuition). Tuition was just under $11K for 4 years.

My first job out of school paid $22,500K per year (salary), which is $10.80/hr.

In 2006 my daughter's first semester in college, "our portion of" tuition, room and board (not counting books) was $22,100K, she also received a $4K grant. She is now employed full time as a dental hygienist, starting salary was about $28K/year, which is ~$13.50/hr.

For me, a semester cost around $3,625 in 1980.
For her a semester cost $22K in 2006.
Delta $20,600.

That's a 507% growth in college cost over a 35 year period.

Granted we went into different fields/jobs, but wage growth for a college graduate (with 4 year degree) was 24.4%

For your guest who was the SUNY graduate complaining about his $12/hour job - that is a typical wage for starting college graduate.

Hopefully this illustrates that the problem is that college costs are completely out of control.

Oct. 27 2011 11:06 AM
listener

"The colleges get the money upfront which has fueled an inflation in tuition prices which is a whole other story"

Well how about exploring that "whole other story" about how "progressive" government interference is causing price gouging by "progressive" universities?

Oct. 27 2011 10:31 AM
Mike from Utah

In 2002, a article appeared in Readers Digest about bankruptcy. The article detailed that over 100,000 college students had declared bankruptcy for their student loans.
Orrin Hatch, US Senator from Utah, made a press comment "Anyone who delcares bankruptcy is a Deadbeat".
I wrote Orrin because there were so many bankruptcies because of Medical Bills, about 900,000 families every year. No other country in the world permits Medical Bills bankruptcy. None.
In 2002, there were close to 2 million bankruptcies filed, most were for Medical Bills. After the Bankruptcy laws were modified in 20003 with the driving force of Orrin Hatch (R-UT) and Chuck Grassley (R-IA), the student debt bankruptcy was tighted so much, that it became impossible as the college students know today that the President is trying to correct.
Bankruptcy was NOT intended to provide a path to financial ruin or slavery of debt from Privatized lending. Allowing Medical Bill debt into a bankruptcy option opened the door for abuse where it was really designed to encourage individuals to take risk in business and if a failed business, the business risk taker could take a 7 year time off to lick their wounds and maybe start over without being debt prison.
Students with college debt and families that had a major illness (900,000 of the 1.6 million bankruptcies in 2010) are the result.
When Hatch and Grassly put punishment as the only preventive option for Medical Bills and Student debt rather than going after the Predatory lenders (obtaining Federal funds at 2% and lending at 9% to students for Profit aka Privatizing loans) and the Monopolistic Medical Services Price Fixing with a nationwide of computers in the medical billing of 10% a year price increases for Profit and no anti-trust laws being enforced for Price Fixing Medical costs.
The end result is loss of assets of the American families (in Utah you are allowed to keep $20K in your equity - all the rest must be used to satisfy the Medical bills and if you have Medicaid cover your bills, after getting well, Medicaid (state run) uses "Estate Recovery" to get your assets along with wage garnishment, students who are "enslaved" with debt like having a mortgage and low paying jobs.
WIth student debt and Medical Bill bankrupcy, we are creating a generation of poverty and "debt Prisoners".
The "Let the market decide" and "Get the government off our backs" "Privatization of Student loans (making 7% Profit from 2% Federal Funds) and with the help of bank written legislation pushed through Congress by the likes of Orrin Hatch (R-UT) and Chuck Grassley (R-IA) is an example of just how our Congress have coddled the RIch, the banks, Wall Street, and the 1% while they take bribes from the Lobbyists whose Corporations, banks, and Wall Street write the bills that become law for the benefit of the Financial organizations.

Oct. 27 2011 07:40 AM

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