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Posted: 9/10/2013 5:35:20 AM EDT
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The largest bank in the United States will stop making student loans in a few weeks.

JPMorgan Chase has sent a memorandum to colleges notifying them that the bank will stop making new student loans in October, according to Reuters.


The official reason is quite bland.

"We just don't see this as a market that we can significantly grow," Thasunda Duckett tells Reuters. Duckett is the chief executive for auto and student loans at Chase, which means she's basically delivering the news that a large part of her business is getting closed down.

The move is eerily reminiscent of the subprime shutdown that happened in 2007. Each time a bank shuttered its subprime unit, the news was presented in much the same way that JPMorgan is spinning the end of its student lending.*

-more-


*did someone mention housing?

Yep, it's another housing bubble

Four months ago something troubling happened in the housing market. The home price affordability index tracked by the National Association of Realtors slipped below it's long-term trend line, marking a possible beginning of a housing bubble.

On Monday, we got the fourth month of home affordability data coming in below trend, which is a strong confirmation that the housing market is once again in a bubble. (The NAR index is published with a two-month delay, so the latest numbers are for July).

The affordability index measures the household income needed to qualify for a traditional mortgage on a median-priced single family home. So it's looking at a mortgage with a 20 percent down payment and a monthly payment below 25 percent of income at the currently effective rate on conventional mortgages.

When the index is at 100, that means that a household earning the median income has exactly the amount it needs to qualify for a conventional mortgage on a median-priced home. When it is above 100, it signals that the median income is higher than needed to qualify for a mortgage. An AI score of 130, for example, would indicate that households earning the median income would have 30 percent more income than needed to qualify.

-more-

Link Posted: 9/10/2013 5:42:20 AM EDT
Fundamental transformation indeed...
Link Posted: 9/10/2013 5:43:01 AM EDT
Tired of getting fucked by students who aren't going to pay?
Link Posted: 9/10/2013 5:45:32 AM EDT
Lame reasoning.  Student loans are the mother's milk of something.
Link Posted: 9/10/2013 5:46:06 AM EDT
Chase is getting out of the student loan business because Obama is sticking his nose into and the rumors of student loan forgiveness.  With Obama's track record of forcing mortgage companies to refinance homes for less than is owed it set a precedent for the government to step in and force businesses to take a loss.  Factor in all the FSA complaining about their $90,000 student loan debt for an art history degree and not able to find a job and it is easy to see how the same scenario would play out.
Link Posted: 9/10/2013 5:47:04 AM EDT
Maybe someone will finally hold univiserties accountable for what they charge?
Link Posted: 9/10/2013 5:49:11 AM EDT
With government being so involved, there is no place left for private money to be profitable.
Link Posted: 9/10/2013 5:50:09 AM EDT
It's sad to see these kids take loans to go to cooking and art schools.  And then they're saddled with debt.  
Link Posted: 9/10/2013 5:50:50 AM EDT
Good.

Not everyone needs to go to college.
Link Posted: 9/10/2013 5:52:52 AM EDT
So what will this mean for me. Junior in Eet. Loans taken this year but I'll be unable to get them next?
Link Posted: 9/10/2013 5:55:33 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Quoted:Factor in all the FSA complaining about their $90,000 student loan debt for an art history degree and not able to find a job and it is easy to see how the same scenario would play out.
View Quote


Had a lot of that at the private school I went to. I was mechanical engineering and my wife was pharmacy, where ALOT of people were business management, art, music, teaching, etc. They are having a hard time now meeting their obligations. I just hope those of us with a little foresight aren't stuck with the bill, or get the same forgiveness as the rest.
Link Posted: 9/10/2013 5:56:36 AM EDT


Does this mean Uncle Sugar will pay my loan for me and I can spend my monthly payment on whatever I want?
Oh wait, I forgot, having a full time job that pays many many times minimum wage makes me an evil 1%er. Not only will I have to pay off my loan, I have to pay off the loans of those fucking dead beats who can't a get a fucking job ANYWHERE because their major was art history and they dropped out of college a few semesters before finishing. . . I personally know people like this too!.





Link Posted: 9/10/2013 5:59:17 AM EDT
With the high availability of information in our modern technological age the default definition of "higher education" needs to change.

A college degree no longer guarantees an individual is competent in their field of study and/or the chosen field of study is relevant to the current market.

An individual working on and achieving a degree in a field with zero relevance to the current demands of the job market lacks serious foresight and at least to me not a good candidate for any meaningful position other than basic entry level work with minimal responsibility.
Link Posted: 9/10/2013 5:59:30 AM EDT
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Quoted:
Good.

Not everyone needs to go to college.
View Quote



Agreed.  Way too many of kids going to school with little thought on the degree earned being able to pay for itself in due time.  I guess we could just reinstitute the draft and send them off to Syria though.  

Trade schools would be a nice place for lots of young men and women.


i don't blame the banks one bit to get out of a line that's not profitable.  I still think they should burn for selling shitty bundled stocks based on shitty irresponsible home loans.   One way to pass on the crap that Congress stuck in their lap though.
Link Posted: 9/10/2013 6:00:52 AM EDT
So who thinks this leads down a road to where the gov will forgive student loans?
Link Posted: 9/10/2013 6:01:18 AM EDT
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Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?
View Quote


This is a big part of the problem
Link Posted: 9/10/2013 6:01:19 AM EDT
Link Posted: 9/10/2013 6:01:39 AM EDT
I though they did IBanking, why don't they just be on students that will be successful....the loans are nondischargeable
Link Posted: 9/10/2013 6:03:29 AM EDT
Obama fundamentally socialized the student loan industry. Now the taxpayer gets hit with default. FBHO!
Link Posted: 9/10/2013 6:04:21 AM EDT

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Quoted:


Fundamental transformation indeed...
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Don't worry...the gov't will swoop in with a solution...



This is just part of the playbook...



 
Link Posted: 9/10/2013 6:05:03 AM EDT
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Quoted:
It's sad to see these kids take loans to go to cooking and art schools.  And then they're saddled with debt.  
View Quote




Truth,go to Johnson and Wales in Providence,RI and take out $100k in loans...to make $15/hr as a sous chef if you're lucky.
Link Posted: 9/10/2013 6:06:13 AM EDT

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Quoted:
This is a big part of the problem
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Quoted:



Quoted:

Maybe someone will finally hold univiserties accountable for what they charge?




This is a big part of the problem


Just like housing, low interest rates have caused people to be able to spend big bucks on credit.  You can't fault builders (or universities) for surfing the supply/demand curve.



What O and his cronies don't understand, is that cheap money has consequences.  Always has, always will...  What to you think the auto companies would do if BHO handed out a $10k a year per person auto subsidy???  



 
Link Posted: 9/10/2013 6:06:32 AM EDT
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Quoted:
So who thinks this leads down a road to where the gov will forgive student loans?
View Quote


Link Posted: 9/10/2013 6:06:38 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?
View Quote


I don't see universities on the corner with guns forcing students to pay to go to school. If the student can't afford to pay his/her way out of pocket (or their parents can't afford it), there are ways to go to school without incurring student loan debt.

I paid my way through school by working all four years. I also went to school all 3 semesters a year. There's no reason students today can't do the same thing. The problem is that in order to do that, it would require a full time commitment to work and school. Kids today don't want that. They think everything should be given to them. They've been taught that by today's society and its "everyone gets a trophy" mentality so the thought that they may have to actually work to accomplish what they want is a foreign concept.

I don't blame the banks either. If you were the CEO of a company and saw the .gov sticking its hand in everyone's business forcing them to take a loss (mortgage refi's at below loan balance), would you want to risk your capital (or your shareholders) to loan money in an environment when 'ol Jugears is mentioning student loan forgiveness?
Link Posted: 9/10/2013 6:06:58 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Quoted:
With the high availability of information in our modern technological age the default definition of "higher education" needs to change.

A college degree no longer guarantees an individual is competent in their field of study and/or the chosen field of study is relevant to the current market.

An individual working on and achieving a degree in a field with zero relevance to the current demands of the job market lacks serious foresight and at least to me not a good candidate for any meaningful position other than basic entry level work with minimal responsibility.
View Quote



It tells me they are probably thinking law school.
Link Posted: 9/10/2013 6:07:47 AM EDT

Discussion ForumsJump to Quoted PostQuote History
Quoted:


With government being so involved, there is no place left for private money to be profitable.
View Quote




 
Link Posted: 9/10/2013 6:08:59 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Quoted:


I don't see universities on the corner with guns forcing students to pay to go to school. If the student can't afford to pay his/her way out of pocket (or their parents can't afford it), there are ways to go to school without incurring student loan debt.

I paid my way through school by working all four years. I also went to school all 3 semesters a year. There's no reason students today can't do the same thing. The problem is that in order to do that, it would require a full time commitment to work and school. Kids today don't want that. They think everything should be given to them. They've been taught that by today's society and its "everyone gets a trophy" mentality so the thought that they may have to actually work to accomplish what they want is a foreign concept.

I don't blame the banks either. If you were the CEO of a company and saw the .gov sticking its hand in everyone's business forcing them to take a loss (mortgage refi's at below loan balance), would you want to risk your capital (or your shareholders) to loan money in an environment when 'ol Jugears is mentioning student loan forgiveness?
View Quote View All Quotes
View All Quotes
Discussion ForumsJump to Quoted PostQuote History
Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


I don't see universities on the corner with guns forcing students to pay to go to school. If the student can't afford to pay his/her way out of pocket (or their parents can't afford it), there are ways to go to school without incurring student loan debt.

I paid my way through school by working all four years. I also went to school all 3 semesters a year. There's no reason students today can't do the same thing. The problem is that in order to do that, it would require a full time commitment to work and school. Kids today don't want that. They think everything should be given to them. They've been taught that by today's society and its "everyone gets a trophy" mentality so the thought that they may have to actually work to accomplish what they want is a foreign concept.

I don't blame the banks either. If you were the CEO of a company and saw the .gov sticking its hand in everyone's business forcing them to take a loss (mortgage refi's at below loan balance), would you want to risk your capital (or your shareholders) to loan money in an environment when 'ol Jugears is mentioning student loan forgiveness?


Yes - but to deny there isn't an "educational industrial complex" is just plain foolish. Gov't grants to colleges are used for research purposes, not towards tuition. the Schools have to pay for all that other crap somehow....
Link Posted: 9/10/2013 6:10:33 AM EDT
Student loans are my last debt.  They will be paid off by the end of thr year.  I suspect Obama will forgive all loans right after I pay mine off.  
Link Posted: 9/10/2013 6:11:12 AM EDT
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Quoted:


Had a lot of that at the private school I went to. I was mechanical engineering and my wife was pharmacy, where ALOT of people were business management, art, music, teaching, etc. They are having a hard time now meeting their obligations. I just hope those of us with a little foresight aren't stuck with the bill, or get the same forgiveness as the rest.
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View All Quotes
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Quoted:
Quoted:Factor in all the FSA complaining about their $90,000 student loan debt for an art history degree and not able to find a job and it is easy to see how the same scenario would play out.


Had a lot of that at the private school I went to. I was mechanical engineering and my wife was pharmacy, where ALOT of people were business management, art, music, teaching, etc. They are having a hard time now meeting their obligations. I just hope those of us with a little foresight aren't stuck with the bill, or get the same forgiveness as the rest.


You would think that the student loan amounts would be based on the marketable skills one can learn in the clases taken.

No different than getting a business loan IMHO. Risk taken for future profit. If your business model sucks then no loan for you. The same logic should apply for student loans. If you want a degree in music then you are on your own hook.

Speaking for myself I'd be more inclined to loan $$$ to someone going after the degrees you and your wife went after than someone going after a liberal arts degree. I'd only loan one year at a time too and would need to see the student's grades before extending them another loan.

Silly me, that would be responsible lending.  




Link Posted: 9/10/2013 6:13:05 AM EDT
Merka!

Nothing to see here, move along.
Link Posted: 9/10/2013 6:17:16 AM EDT
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Quoted:


This is a big part of the problem
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Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem



Maybe the government can solve it.
Link Posted: 9/10/2013 6:18:04 AM EDT
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Quoted:


Yes - but to deny there isn't an "educational industrial complex" is just plain foolish. Gov't grants to colleges are used for research purposes, not towards tuition. the Schools have to pay for all that other crap somehow....
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Quoted:
Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


I don't see universities on the corner with guns forcing students to pay to go to school. If the student can't afford to pay his/her way out of pocket (or their parents can't afford it), there are ways to go to school without incurring student loan debt.

I paid my way through school by working all four years. I also went to school all 3 semesters a year. There's no reason students today can't do the same thing. The problem is that in order to do that, it would require a full time commitment to work and school. Kids today don't want that. They think everything should be given to them. They've been taught that by today's society and its "everyone gets a trophy" mentality so the thought that they may have to actually work to accomplish what they want is a foreign concept.

I don't blame the banks either. If you were the CEO of a company and saw the .gov sticking its hand in everyone's business forcing them to take a loss (mortgage refi's at below loan balance), would you want to risk your capital (or your shareholders) to loan money in an environment when 'ol Jugears is mentioning student loan forgiveness?


Yes - but to deny there isn't an "educational industrial complex" is just plain foolish. Gov't grants to colleges are used for research purposes, not towards tuition. the Schools have to pay for all that other crap somehow....


I don't disagree. However, people/student know up front what a particular school is going to charge. Nobody is forcing them to enroll and incur debt. They could take fewer hours per semester, work a little more, and have no debt. It may take a little longer, but they'll have no debt. It will also make them think a little before they get that $200,000 women's studies degree that won't pay the bills when they graduate unless they get a job teaching that very subject at the college level.
Link Posted: 9/10/2013 6:19:06 AM EDT
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Quoted:
Chase is getting out of the student loan business because Obama is sticking his nose into and the rumors of student loan forgiveness.  With Obama's track record of forcing mortgage companies to refinance homes for less than is owed it set a precedent for the government to step in and force businesses to take a loss.  Factor in all the FSA complaining about their $90,000 student loan debt for an art history degree and not able to find a job and it is easy to see how the same scenario would play out.
View Quote View All Quotes
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Discussion ForumsJump to Quoted PostQuote History
Quoted:
Chase is getting out of the student loan business because Obama is sticking his nose into and the rumors of student loan forgiveness.  With Obama's track record of forcing mortgage companies to refinance homes for less than is owed it set a precedent for the government to step in and force businesses to take a loss.  Factor in all the FSA complaining about their $90,000 student loan debt for an art history degree and not able to find a job and it is easy to see how the same scenario would play out.


That. Investors get nervous when the authority with the guns might order the mandatory loss of billions of dollars of lending. The shareholders would be screwed, and they know it. The bank doesn't want that.

Yay government.

Quoted:
With the high availability of information in our modern technological age the default definition of "higher education" needs to change.


I've looked at some exams from someone who got a masters in a field I'm quite familiar with, and I knew every answer. If given the tests right now, I could likely ace them all. Every semesters' exams. It's all stuff I know. But I'd have to pay quite a bit of money to sit through what I know and take those tests over several years to get that piece of paper.

I'd be perfectly happy if universities would offer a far less expensive, far less time consuming accreditation degree program. Prove you can pass all the tests and know everything required, do the thesis and show you know your field, you get the degree. They wouldn't have much infrastructure cost to deal with, either.
Link Posted: 9/10/2013 6:19:44 AM EDT
There's an easy fix to the student loan crisis: make the debt dischargeable in bankruptcy. It won't ever happen, but this would cause lenders to be much more strict in their underwriting.
Link Posted: 9/10/2013 6:19:51 AM EDT
As soon as the Government got involved a long time ago it caused the system to generate a flawed model.

As with all loans the risk is to the lender. For example if you wanted to loan a friend money and he paid you back with interest you got a return on your loan. You did risk your money to receive that interest. You risked your friend not paying you back. As it should be. For without risk there is no downside to loaning money. If the government guaranteed every loan you made then what do you care about only loaning your money out to those that can or will pay it back. It set up the "Anti-Capitalist" student loan system.

The government removed that risk by making these loans guaranteed. So the lenders had no desire to worry about risk. If a student doesn't pay then Uncle Sam will......The fix was put in and now we are in a the viscous cycle created by our wonderful overseers....

If your mad at Student Loans it is because it isn't a system that should have ever been used in our capitalist society. These socialists should have been run out of this country long ago..... because they were not we are seeing the decline of our nation.... this is just a small symptom of that over all decline....
Link Posted: 9/10/2013 6:20:33 AM EDT
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Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?
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Never happen.  Gotta support football/baseball/basketball/volleyball at all expense and cost.  Sporting institutions with a small side order of communist indoctrination/learning.
Link Posted: 9/10/2013 6:21:58 AM EDT

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Quoted:


Good.

Not everyone needs to go to college.
View Quote




 
Link Posted: 9/10/2013 6:22:09 AM EDT
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Quoted:
It's sad to see these kids take loans to go to cooking and art schools.  And then they're saddled with debt.  
View Quote


Sad?

She can make a hell of a sandwich and keep the house painted.

What more could you want?
Link Posted: 9/10/2013 6:23:11 AM EDT
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Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?
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When all that cheap debt dries up, the market will do that all by itself.  Ending student loan subsidies would go a LONG LONG LONG way to reducing the cost of a college education.
Link Posted: 9/10/2013 6:25:14 AM EDT
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Quoted:


This is a big part of the problem
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Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?
Link Posted: 9/10/2013 6:28:27 AM EDT
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Quoted:

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?
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Quoted:
Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?


I would love to see more schools end tenure and make profs earn their keep.

There is so much dead weight in most universities, tenured profs that have a TA teach their classes and just navel-gaze in a paper-piled office all day. They bring NO income to the campus by their actions, and have no performance requirements. Which is why they write drivel disconnected from the real world that becomes public policy.
Link Posted: 9/10/2013 6:31:28 AM EDT
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Quoted:
So who thinks this leads down a road to where the gov will forgive student loans?
View Quote


We have been on that road for about 5 years now.
Link Posted: 9/10/2013 6:33:06 AM EDT
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Quoted:


This is a big part of the problem
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Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem

You can't be serious.

No one is forcing anyone to go to an expensive school.  There are still reasonably priced state schools.
Link Posted: 9/10/2013 6:33:49 AM EDT
Obama's fault!
Link Posted: 9/10/2013 6:33:59 AM EDT
Discussion ForumsJump to Quoted PostQuote History
Quoted:

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?
View Quote View All Quotes
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Quoted:
Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?

Yep. If we woke up tomorrow and by some sort of SHAZAAM! there was no health insurance, what would be the effect on health care costs?
Link Posted: 9/10/2013 6:35:16 AM EDT
I think these banks all know its time to get out. We have record high recent college graduate unemployment causing most students to be unable to repay their loans plus student loan forgiveness laws have been tossed around at the national level on many occasions, these banks dont want to take a hair cut on this so they are getting out.
Link Posted: 9/10/2013 6:35:24 AM EDT
The University of Miami can charge 35,000 per year for an undergraduate degree because of student loans.

The cheap, non-dischargeable money from the government has caused tuition hikes.
Link Posted: 9/10/2013 6:35:30 AM EDT
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Quoted:

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?
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Quoted:
Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem

But what started it?

Schools started charging more so people had to take out more loans?  Or did loans become easier to get, which allowed more people to get them/go to college and in turn the schools started charging more so they could expand to take in more students/money?


Cheap money drove up the prices.
Link Posted: 9/10/2013 6:36:06 AM EDT
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Quoted:

You can't be serious.

No one is forcing anyone to go to an expensive school.  There are still reasonably priced state schools.
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Quoted:
Quoted:
Quoted:
Maybe someone will finally hold univiserties accountable for what they charge?


This is a big part of the problem

You can't be serious.

No one is forcing anyone to go to an expensive school.  There are still reasonably priced state schools.


All tuition has been rising much faster than inflation or the cost of living for decades because of student loans.
Link Posted: 9/10/2013 6:36:55 AM EDT
They are getting out of the student loan business because the goverment has taken it over.

Interesting trend to note. The population of high schoolers graduating is on a steady decline and colleges are soon going to start having to compete for students and tuition prices will have to start falling.

Or some schools are going to keep the "list price" but will negotiate with you.
Link Posted: 9/10/2013 6:37:02 AM EDT
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