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Forum Post: Extend Federal Student Loan Changes to Direct Plus Loans

Posted 12 years ago on Jan. 11, 2012, 4:09 p.m. EST by webb3030 (1)
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[-] 2 points by Christy (62) 12 years ago

I agree. The new changes to the Fed.Student loans should apply to Direct Plus Loans as well.

[-] 1 points by MonetizingDiscontent (1257) 12 years ago

Almost breezed by an article on this subject earlier. Seeing this post made me want to go back and read it. Thought it might be worth inserting into this thread. Here's a snip of it.

::::::::::::The 5 Percent Solution to Paying for College::::::::::::


-January 12, 2012-

.....On first glance, this looks like a deal for students. Student fees... http://students.ucsd.edu/finances/financial-aid/budgeting/undergrad-20112012.html ...at UC San Diego for a California resident are $13,234 this year. Total for four years: $52,936. Twenty years of Fix UC payments at 5 percent of salary amount to one year’s average salary. A recent survey... http://cew.georgetown.edu/unemployment/ ...of Georgetown University graduates puts the average salary for a 22-to-26 year old engineering student at $55,000; for an arts major, it’s $30,000. The yearly payment gets bumped up, temporarily, if you use on-campus housing. Still, you’re spreading your payments over 20 years, and not paying additional interest as you would with a student loan.

For the universities, the outcome is less clear. The proposal refers to a “compounding” effect. But money that is now paid upfront would instead be paid over many years to come. To borrow that $52,936 and repay it over 20 years would cost... http://www.moneychimp.com/calculator/compound_interest_calculator.htm ...$98,814, at the rate of just 3.17 percent that California paid on bonds... http://latimesblogs.latimes.com/money_co/2011/09/california-bond-muni-sale-general-obligation-go-lockyer-tax-free-.html ...sold last year. Maybe if graduates’ salaries rise with inflation, they come closer to paying that back. Except that college costs have been rising faster than inflation. It seems hard to make those numbers work.

Of course, you know some Wall Street number cruncher is already working on the tradeable financial product that monetizes the uncertain graduate income stream — and the varying “tranches” of finance, science, and arts majors.

(((Read the -entire- article Here))) http://www.businessweek.com/finance/occupy-wall-street/archives/2012/01/the_5_percent_solution_to_paying_for_college.html

..I see Max Keiser has linked to the article too. He provides an alternative headline for the story though..

:::::::::::::::::::::::::The Soft-Slavery Solution for College Fees::::::::::::::::::::::::


-Posted on January 12, 2012 by maxkeiser-

[-] 1 points by webb3030 (1) 12 years ago

The latter two comments are true to some extent, but it would be better to simply have free education. Like the latter two commenters probably are, I am a libertarian--what I call a libertarian centrist (some libertarian ideas from the left, and some from the right). Yes, I think we should eventually end up at a de-centralized, private/cooperative educational system, but granting students free or nearly free education would not only not cost a lot, but it would help stabilize the economy by allowing students more freedom of choice concerning their career paths, etc. once they get out of college. This petition is a small step in the right direction.

[-] 0 points by thunk (15) 12 years ago

umm no. loans create artificial demand driving the cost of college up.

it'd be better if we had less loans, which would mean cheaper education. thus once people graduate, even if they didn't get a job, they'd have less loans to pay back

[-] 1 points by DependentClass (19) 12 years ago

You are right. Easy credit and dopey students that'll borrow themselves blind helped drive inflation in higher education. The schools happily raised tuition and bloated their costs. More loans is just more gasoline.