Does anybody who reads this not understand how crazy it is to say that taxpayers should pay for college for everybody? As with any government program that actually works (eg single payer health care) you have to be able to control both supply and demand. In countries with free higher education, only the "best and the brightest" get to go to college. And they don't get endless shots at it.
When you say that everybody can go to college and they can study whatever they like, and they can drop out and re-enroll in different programs and they can essentially keep this up for life -- you end up with people sucking up hundreds of thousands of dollars in costs with virtually no benefit to them (or society) to show for it. "Free college for all" would be like a match thrown on gasoline to the outrageous cost of college and the many useless studies offered unless the government somehow controlled who could go and what they could study. And Americans will never stand for that.
When you say that everybody can go to college and they can study whatever they like, and they can drop out and re-enroll in different programs and they can essentially keep this up for life -- you end up with people sucking up hundreds of thousands of dollars in costs with virtually no benefit to them (or society) to show for it. "Free college for all" would be like a match thrown on gasoline to the outrageous cost of college and the many useless studies offered unless the government somehow controlled who could go and what they could study. And Americans will never stand for that.
112
Ms. Kelley has a great option to get out of this situation—why does the author avoid writing about it? As the article notes: if she has consolidated her loans with the federal government, and then works ten years as a public school teacher, her loans will be forgiven. The amount she pays during that time would be affordable for someone in that situation. A quick estimate for the Pay-As-You Earn option on the federal education estimator (https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimato... for someone in her situation (married-filing-separately, $400,000 debt ($200,000 in Stafford, $200,000 in Grad Plus loans), and 4 kids) would be $77 per month. That would be $77 per month for 20 years if she worked in the private sector, or $77 per month for only 10 years if she worked as a public school teacher. That seems quite affordable and a great government program for someone like Ms. Kelley. Why does this article refer to this option as "mean[ing] a decade of what she describes as “futile” payments that won’t even cover her monthly interest"? Why would they be futile? Her loans would be forgiven and she would have only paid $9000 spread out over 10 years. The interest rate is irrelevant if you were in this situation. If her loans are with private lenders, then it's a different story, however.
128
Liz Kelley is the proverbial "blood out of a turnip" problem. She'll never pay that debt off.
Everyone here seems to be angry at her and full of condemnation about how she never should have made the decisions she did, and deserves whatever befalls her.
But where is the condemnation of Mr. Greenspan, for his decisions and theories that bankrupted millions? And were is the condemnation, if not the jail sentences, for all the banksters and grifters who made out like bandits?
Her problem is that she couldn;t borrow enough to be too big to fail ... that's all.
Everyone here seems to be angry at her and full of condemnation about how she never should have made the decisions she did, and deserves whatever befalls her.
But where is the condemnation of Mr. Greenspan, for his decisions and theories that bankrupted millions? And were is the condemnation, if not the jail sentences, for all the banksters and grifters who made out like bandits?
Her problem is that she couldn;t borrow enough to be too big to fail ... that's all.
74
Taking out student loans for daycare costs to get an English degree? Where to start..... No sympathy here-- just astonishment.
118
Apparently Bailouts are only for Wall Street Bankers who lose 100's of millions and crash the economy.
86
This is just flagrant abuse of the Federal student loan program. There's no other word for it. There really should be a ceiling on the amount one can borrow from the government.
126
Similarly, I too racked up over $150,000 in student loan debt and a degree in Fine Art that I was not able to pay for years. When I finally ran out of options to forbear my loans and had to face up to my decisions and my responsibilities I got a better paying job working my way up from the bottom (I had no education per say to back up working in a business because I had studied Fine Arts). Then I went back to school in mid life to study something more lucrative and applicable to my job, only this time I paid for it as I went rather than taking out student loans. While I am still "suffering" and paying back my first set of student loans I see it as a valuable lesson which I will teach my children - I have two now - don't borrow what you won't be able to pay back quickly and don't make promises about your future that you won't be able to keep. I don't blame anyone for my decisions except myself.
132
Unless something is done, the housing market will tank again since the kids can't afford to buy. And then the stock market will probably follow.
16
Oh, yeah, the Banks had nothing to do with the indebtedness. Get real.
28
The woman never grew up. Sometimes government needs to be paternalistic and place limits on reckless debtors. She will never pay that debt; her fellow citizens will.
96
C'mon everyone...the kitchen doesn't look *that* nice. Stainless steel appliances and granite countertops aren't that expensive.
I have over $250,000 in debt (I'm in healthcare), I really have no pity right now for what I'm reading here. I made a calculated decision that my student loans and subsequent income made sense. Her first mistake was racking up law school debt and not even returning to finish. I've had many colleagues defer school midway for various reasons (medical, personal), but they always came back. Why? Because not doing so was tantamount to financial suicide.
If that weren't enough, seeing her balk at one of the most generous repayment & forgiveness programs in the world makes me seethe. The payment is so utterly low (especially w/ 4 kids), and the amount she'll have discharged so high, at age 58, no less...I'm in shock.
And they complain about millennials having an entitlement attitude?
If she can't manage to save for retirement with THAT program, there's just no hope here. None. This isn't a government or public policy failure, this is a failure to read and do basic math on the part of the borrower. Or is that asking too much?
I have over $250,000 in debt (I'm in healthcare), I really have no pity right now for what I'm reading here. I made a calculated decision that my student loans and subsequent income made sense. Her first mistake was racking up law school debt and not even returning to finish. I've had many colleagues defer school midway for various reasons (medical, personal), but they always came back. Why? Because not doing so was tantamount to financial suicide.
If that weren't enough, seeing her balk at one of the most generous repayment & forgiveness programs in the world makes me seethe. The payment is so utterly low (especially w/ 4 kids), and the amount she'll have discharged so high, at age 58, no less...I'm in shock.
And they complain about millennials having an entitlement attitude?
If she can't manage to save for retirement with THAT program, there's just no hope here. None. This isn't a government or public policy failure, this is a failure to read and do basic math on the part of the borrower. Or is that asking too much?
168
Unlimited government-backed loan money for higher education have created an education price bubble. People who really shouldn't be in college are borrowing to go, and people who never will be able to pay back the loans are borrowing huge amounts. Schools are able to charge enormous tuition, since clueless students borrow with no prospect of ever being able to repay. Tuition just goes up and up.
It's time to change the system. Put the brakes on student borrowing. Cap government backed student loans at an amount that would pay for tuition only for two years in state at a community college, plus two years at a state college/university. Work a part time job to pay your living expenses while in school. You want to go to a for-profit trade school? Borrow from the trade school. You want to go to a private school? Earn a merit scholarship. You want to go to graduate school? Let the graduate school lend you the money.
There are other ways. You can join the National Guard - they pay tuition. You can join the armed forces. They pay tuition.
We don't have unlimited taxpayer backed loans to open a business, and we shouldn't have unlimited taxpayer backed loans to go to school.
It's time to change the system. Put the brakes on student borrowing. Cap government backed student loans at an amount that would pay for tuition only for two years in state at a community college, plus two years at a state college/university. Work a part time job to pay your living expenses while in school. You want to go to a for-profit trade school? Borrow from the trade school. You want to go to a private school? Earn a merit scholarship. You want to go to graduate school? Let the graduate school lend you the money.
There are other ways. You can join the National Guard - they pay tuition. You can join the armed forces. They pay tuition.
We don't have unlimited taxpayer backed loans to open a business, and we shouldn't have unlimited taxpayer backed loans to go to school.
61
Individuals, rich and poor, institutions, small and large businesses, international corporations and governments, local, state and national ALL make bad financial decisions. We, the individual, almost never hesitate to put on our self-righteous face and condemn the individual because they are an easy target, especially those who don't have legions of lawyers and gaggles of lobbyists to make laws that ALWAYS give the rich and the powerful an edge. Billions, even trillions of dollars are wasted and we say "ho, hum, that's how things are". Give us a chance to condemn the "little people" for making bad decisions and we can wait to throw the biggest stones available. This is one of the major flaws of human nature. Shame on us, the arrogant self-righteous.
53
Our country is so stupid. If we *wanted* to solve this problem we would. Limit total lifetime education borrowing, public and private, to $100K. The problem is our *leaders* don't *want* to solve this problem.
31
At least Ms. Kelley states that she is no victim. I will give her some credit for stating that. This money will never be re-paid by Ms. Kelley and it does not seem to bother her. I have worked all my life, went to a state school as a commuter and deny myself many things to this day that I can afford. When I see that photo of Ms. Kelley's kitchen (photos says it's hers) I want to scream. Why should I deny myself of anything and save for a rainy day, when this lady has a kitchen to die for. That Ms. Kelley allowed herself to be profiled shows that she never got it and never will.
63
I feel so sad when I see comments about how a woman should not have children or get an education unless she can afford it. What heartless person who condemn any American to loneliness and ignorance. Maybe you could afford to have family and education but don't you want to be surrounded by smart, happy, loved fellow Americans? It is not really okay to tell anyone they can't have a family.
30
The main point here is that college loans should be treated like all other loans.
They should be discharged through bankruptcy.
There is no excuse for treating college students worse than millionaire building developers who regularly go bankrupt to avoid paying their debts.
They should be discharged through bankruptcy.
There is no excuse for treating college students worse than millionaire building developers who regularly go bankrupt to avoid paying their debts.
77
The way out: pay it back. What's so complicated?
24
Oh, how many people would be better off if they just became plumbers or waitress'.
26
First - I love this article - a work of sublime erudition:
"People have always had a difficult relationship with debt. .... But there’s a reason debt is often grouped with sins and frailties in ancient moral codes. Borrowing is risky, financial decisions are not always rational, and people often do a poor job of properly weighing the interests of their present and future selves." I could not have said it any better. Cash is king; debt is what facilitates people staying in bad jobs, in unhappy marriages and makes the ends (the $$$) worth more than the means. Will leave you with a quote from the man (Al Gore) who used to be the next president of America that takes a macro view:
"...we're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the future of human civilization"
"People have always had a difficult relationship with debt. .... But there’s a reason debt is often grouped with sins and frailties in ancient moral codes. Borrowing is risky, financial decisions are not always rational, and people often do a poor job of properly weighing the interests of their present and future selves." I could not have said it any better. Cash is king; debt is what facilitates people staying in bad jobs, in unhappy marriages and makes the ends (the $$$) worth more than the means. Will leave you with a quote from the man (Al Gore) who used to be the next president of America that takes a macro view:
"...we're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the future of human civilization"
27
"Student Loans" are just that! Loans! And society and the legal profession demand that they be repaid, difficult though it may be. The borrower VOLUNTARILY signed the loan agreement - her or she was not forced to do so. I am very old and many times in my life I have found it quite difficult to pay back various loans - but I did so. As should each and every so-called "student" who owes such debt. If no borrower ever paid back a loan, society would soon collapse as would the availability of money to be loaned. Get on with it, borrowers!!!!
34
At Harvard business school I quickly learned that when you overwhelm yourself with personnel debt you're screwed. When you overwhelm your corporation with debt you screw somebody else.
64
I feel for people who've accumulated excessive student loan debt, but it looks like Ms. Kelley wasn't just borrowing money for school, but financing her family's lifestyle for quite a few years. Seems to me, the government should put a cap on the total amount a person can barrow since it seems unlikely they will never be repaid in full. In a free market, a person's ability to barrow would be determined by the overall risk. The answer is not making more subsidized student loans available. The answer is assessing the TRUE risk of the borrower...
49
Ms. Kelley should not be the poster child for education loan reform. I think she has had a hard-knock life, her decisions were not "unremarkable", but to never make one loan payment? Ever?
163
Yikes! Back in the day when I went to a state college, tuition was $75, and staying in the dorm was $1,500. And even THAT was prohibitive for me. So I worked for a year to get the first year's money up, started as a second semester freshmen, worked all through school, took summer courses by working a summer job at the college that paid for them and board, and graduated in 3 years. I had an outstanding debt of $3,000, which was a government loan that decreased 10% every year that I taught up to 50%, and paid $31.53 a month for 10 years. At the time I figured I could mow lawns and earn that a month if need be. I taught Art for 35 years, and would always tell my students when going on to art degrees, major in an area where there is work, minor in your passion, which you can always do on your own. Also, there are many grants and loans out there that go unfulfilled because people don't want to jump through hoops to apply. Also, you don't have to do "college" immediately, or in 4 years, or at a private school, or, or, or, or. Life is about choices and consequences, and in my case, about being in the right generation.
45
Miss Kelley "made a series of unremarkable decisions about college and borrowing?" It struck me as the opposite of unremarkable! Miss Kelley spent 15 years living on government loans totaling nearly $200,000 so she could ultimately get a job as a public school teacher! That is as remarkable as it is baffling. Unremarkable would be my brother's story: Four years at the local public university so he could get a job as... wait for it... a public school teacher. Saying that the student loan situation is broken because a minuscule percentage of borrowers made remarkably bad decisions is just silly.
228
Another reader has posted: ".. maybe you could consider Germany's policy: all state college tuition is free..."
So tiresome to always hear about all the great healthcare, education, transportation, 6 weeks vacation, retirement at 60 or now 62, ect....in Europe. Of course it's good. The US is subsidizing it. We have been supporting Europe for a century (WWI, WWII, Marshall Plan, cold war) and it continues today. Europe spends next to NOTHING on defense because we spend so much. The UK recently cut its already meager contribution to NATO. Of course Europeans love socialism. They are always on the receiving end courtesy the US taxpayer. Let's cut defense spending and let Europe pay its own way for a change.
So tiresome to always hear about all the great healthcare, education, transportation, 6 weeks vacation, retirement at 60 or now 62, ect....in Europe. Of course it's good. The US is subsidizing it. We have been supporting Europe for a century (WWI, WWII, Marshall Plan, cold war) and it continues today. Europe spends next to NOTHING on defense because we spend so much. The UK recently cut its already meager contribution to NATO. Of course Europeans love socialism. They are always on the receiving end courtesy the US taxpayer. Let's cut defense spending and let Europe pay its own way for a change.
121
An expensive private college that no one outside of your state (or, perhaps, your religion) has ever heard of.
THAT is the recipe for a financial calamity.
State schools, people.
THAT is the recipe for a financial calamity.
State schools, people.
152
After all is said and done can't we just limit the interest to 2 % ?
48
I deal with them constantly regarding my daughter's loans (technically mine, but she pays them back now) and find them ever increasingly easy to deal with and forgiving. You owe money, you pay it back and all is well. A good part of our society seems to have forgotten that. I'd love to know how many of the people who complain about it ignore the notices or just refuse to pay hopiing they can get away with it. Besides, as easy as he government is with collecting its debts, why would anyone think that someone collecting a debt should smile? Pay them back. Then they will smile.
62
Well, good luck getting any benefit from that "ten-year" program for public service. My daughter taught for 15 years in a public school in an inner city and was certain that she qualified for that loan forgiveness. The qualification is that you must make 120 on-time payments to your student loans. She did that. She filed the paperwork for the loan forgiveness program. Then they told her that her inner-city school (a MAJOR US city) did not meet the criteria, and that percentage of children based on ethnicity and race, as well as participation in the school lunch program, would not do. After they settled that issue, last week, she was told that since she had not consolidated her loans, which would have meant going from a 2.8 percent interest rate to a 6.85 percent interest rate, she would have to do that and START OVER again by making 120 consecutive on-time payments of her loans before she could qualify for loan forgiveness under the public service program. She graduated from college in 2000, has two master's degrees and six certifications. She is highly qualified (as the jargon goes). So good luck to anyone who thinks they can get into that program. And you don't even want to hear the saga of my son's debt from law school.
64
1. Federal government maximizing on choices and bad luck making it impossible to repay on a teacher's salary. She borrowed the average amount but now owes 2x what was borrowed because of interest.
2. X-husband is off the hook on a debt pile he helped create and benefited from.
There should be laws preventing this or some kind of reasonable way out. But anyone can go rack up a billion dollars in credit card debt and file bankruptcy and be clear in 13 years.
2. X-husband is off the hook on a debt pile he helped create and benefited from.
There should be laws preventing this or some kind of reasonable way out. But anyone can go rack up a billion dollars in credit card debt and file bankruptcy and be clear in 13 years.
19
I really feel for Ms. Kelley, because, unlike some commentators, I don't engage in schadenfreude or "tough noogies" when someone makes mistakes that are life-altering and not for the better. She was basically being enabled to drown herself in debt.
We really need people to understand the implications of student loan debt, as in you can't get a loan until you totally understand what you're getting into.
And this garbage law that you can't discharge student loan debts when you are ill is frankly draconian and lacking compassion. The interest also should be capped at the median income level for the profession that she chose so the interest doesn't grow exponentially.
We treated banks more compassionately in the great meltdown of 2008 to people who knew what they were doing was wrong too, you know...
We really need people to understand the implications of student loan debt, as in you can't get a loan until you totally understand what you're getting into.
And this garbage law that you can't discharge student loan debts when you are ill is frankly draconian and lacking compassion. The interest also should be capped at the median income level for the profession that she chose so the interest doesn't grow exponentially.
We treated banks more compassionately in the great meltdown of 2008 to people who knew what they were doing was wrong too, you know...
88
10,000 Americans are attending university in Canada where a good education at a good school is still within reach.
26
There is no good reason why a person who has been repaying a student loan reliably should continue to pay confiscatory interest rates. The current interest rate on Federal student loans is about double the Federal mortgage rate on home loans.
A lot of the money that the Feds lend is surplus money paid into the social security system above needs of retirement pensions. The social security account holders receive under two percent for their forced loans to the Feds
And of course the banks receive huge amounts of money at zero interest. Senator Elizabeth Warren introduced a bill to equalize these rates.
To see more good ideas go to YouTube and watch Comedy Party Platform.
A lot of the money that the Feds lend is surplus money paid into the social security system above needs of retirement pensions. The social security account holders receive under two percent for their forced loans to the Feds
And of course the banks receive huge amounts of money at zero interest. Senator Elizabeth Warren introduced a bill to equalize these rates.
To see more good ideas go to YouTube and watch Comedy Party Platform.
37
Ms. Kelly made bed choice one after anther. She knew that she could not pay off her student loan, yet she continued to finance her education with loans for as long as she could. She was no longer able to get any more student loan because she was no longer a student, yet she continued to obtain parent plus loan to finance her children's education. She has a desire to incur more loans and the tax payers could not do anything about it. She selected private institutions over public ones, her child also enrolled in private one not public school. This kind of abuse of student loans is hurting tax payers left and right. There are many more economical options available to her and her children to obtain higher education. She never had the desire to pay off her student loans.
106
I really implore the Times to please stop posting these sad attempts by Kevin Carey at sophisticated trolling of the Times' readership. As always, his monotonous fact-free and thought-free diatribes leaving our unlucky readers in complete ignorance of the relevant facts: 1) the Student Loan Program is, in fact, profitable for the Federal Government (so profitable, in fact, that the Federal Government got rid of all non-federal lenders so as not to leave money on the table and effectively give them a subsidy when they could keep the profits for themselves) 2) Good for the Economy generally, by increasing the education of the workforce, producing further revenue for the Government) 3) As Kelley admits, as if it were a mere irrelevant aside, the loans can be discharged in exchange for 10 years of full-time public service and a tenth of her income during this time. Carey is a conservative ideologue with instinctive hatred for government programs, in complete and total abstraction from what the actual facts of the program are, and nothing more. He has no absolutely no argument here, no reasons which actually support his case on a deeper reflection, as he more or less effectively sheepishly admits by the end of the article. All Carey has is a sensationalist anecdote that doesn't even support his claims, since if the woman goes into full-time teaching for 10 years at a non-profit educational institution, her loans are fully discharged and both borrower and lender have benefited.
38
Who is benefiting from the ballooning student loan problem? The borrowed principal ends up in the hands of academic institutions, using the student as a conduit, private lenders collect the interest, and the risk is borne by the taxpayers. Meanwhile, tuition costs have soared and students find their financial future (home ownership, children,even retirement) hobbled by debt.
Everything the government gives out ends somehow in corporate pockets.
Everything the government gives out ends somehow in corporate pockets.
16
The Government actually makes the money on the loans, Jane. There used to be Private lenders in the Federal Loan Program, but they were removed several years back because it was much more profitable for the Federal Government to make all the loans themselves. While there are Private Lenders still, that isn't what we're discussing here, and those loans only exist for those who cannot obtain Federal Loans (because they have defaulted on another debt, typically) and these loans are widely (correctly) seen as predatory. Nothing ends up in corporate pockets here. The government is the one benefiting and receiving the principal. do not worry.
19
As someone who graduated from law school and came out with loan debt the size of a mortgage for a small house in Kansas City (or a closet in Manhattan), I felt for her. I really did. Until I read that she had not made a single payment in 25 years. That's when I became annoyed--of course all those loans were going to pile and amortize over time, because she had completely ignored her obligations and gamed the system to her advantage with forbearances and deferments. The lenders also take into account good faith efforts at paying back what you owe--if you were diligent at repayment, they will be a bit more forgiving. But this is an outlandish case for debt burdens that afflict people like me, someone who started to pay back my loan debt as soon as I was able to and continue to chip away at this mountain.
But I knew what I was getting myself into--I was never too keen on buying a home, especially in the overheated market here in NYC, and don't plan to have children. I had a close look at my personal preferences and what I saw for myself in the near and far future, and felt that I could take on this debt. Obviously this woman does not think in the same methodical way--even with her huge debt she still believed a PhD in a subject like education was a good idea. And then she withdrew after they charged her for almost $8000 for nothing. Her head-in-the-sand optimism is a sight to behold.
But I knew what I was getting myself into--I was never too keen on buying a home, especially in the overheated market here in NYC, and don't plan to have children. I had a close look at my personal preferences and what I saw for myself in the near and far future, and felt that I could take on this debt. Obviously this woman does not think in the same methodical way--even with her huge debt she still believed a PhD in a subject like education was a good idea. And then she withdrew after they charged her for almost $8000 for nothing. Her head-in-the-sand optimism is a sight to behold.
201
Also, if unwilling or unable to work in public service, one can work 25 years in the private sector giving 10 percent of income as well. No one is getting one over on the federal government or taxpayers here. If you would put down your pitchforks for a moment and stop frothing at the mouth and screaming for blood, you might reflect upon the fact that the Student Loan Program in, in fact, quite profitable for the federal government. Yes, the Government lends on such favorable terms that it makes on these loans. Thus, you, the taxpayer are not "paying for" anything here and your anger is not even rational.
28
Education is the hallmark of success and an educated citizenry is essential for a healthy democracy's survival. To put high interest loans to an undergraduate as the best means for getting an education is an immoral act by the government who should have the best interest of the people in all activities. To act like a rubber baron is not the way the system is suppose to work. We should reform this student loan business. Thanks to Sen. Elizabeth Warren awareness is growing and more students are getting a closer look at these student loans masquerading as loans.
12
Trump got debts discharged in bankruptcy yet teachers with student loans can't. See a problem here?
60
Teachers with student loans can get their student loans discharged if they teach for 10 years, actually. (I agree that Trump is a charlatan.)
7
Are we supposed to feel sorry for this woman? C'mon, man! More likely than not, she saw school as an easy means to finance her needs. As usual, stories like these tend to omit information about a working (or non-working) spouse -- as if her situation was the same as a single mother. Fact is she applied for the loans over many years in full knowledge that it would have to be repaid. She must honor her obligations and pay as much as the family (she and hubby) can afford. This is only fair to a school financial system that gave her support when she asked for it.
51
Talk about burying the lead! The whole article is essentially pointless given the 3rd to last paragraph: "Ms. Kelley has one possible escape route: a federal loan forgiveness program that caps her payments as a percentage of her income and erases her debts if she logs 10 years of service in the public or nonprofit sector."
Like everyone else who has large educational debts, you put in your 10 years of full-time service for the public, plus 10 percent of your income in those years, and your loans are discharged. This is a good deal for the borrower, who gets an education and a career in the public service, and for the public, who gets a well-educated public servant committed to the field. The only problem occurs if one is unwilling to serve the public, and is otherwise unable to repay in the private sector. What an absolute non-story from Kevin Carey, as always.
Like everyone else who has large educational debts, you put in your 10 years of full-time service for the public, plus 10 percent of your income in those years, and your loans are discharged. This is a good deal for the borrower, who gets an education and a career in the public service, and for the public, who gets a well-educated public servant committed to the field. The only problem occurs if one is unwilling to serve the public, and is otherwise unable to repay in the private sector. What an absolute non-story from Kevin Carey, as always.
40
Can the media please start reporting on the actual, very real student debt situations facing the average borrower.
Let's hear about the parents who signed a plus loan and are now having to support their children who are back living in their home because they can't find jobs and are saddled with their own debt?
How about students who are forgoing marriage, children, buying a home, or investing in a start-up because they are mired in loan at accrues interest at 8% and cannot be paid down faster than the interest is being capitalized?
How about computer science and economics graduates who are being shortchanged by corporations and even our own federal govt. through imported Chinese and Indian labor? Nothing wrong with the Indian and Chinese but there is something wrong about paying systematically depressed wages and showing bias against hiring Americans at fair wages.
How about the horrific loan servicers who neglect to tell struggling borrowers that the difference between deferment and forbearance can mean tens of thousands of dollars in accumulating interest?
How about covering the federal government's massive role in taking over the great majority of all federal student loans from the banks and consolidating it under the Dept. of Education with GreatLakes as its primary servicer? Why isn't the govt. reducing the interest charged on these essentially risk-free loans (since they cannot be discharged in bankruptcy) to a rate commensurate with one it charges banks?
Let's hear about the parents who signed a plus loan and are now having to support their children who are back living in their home because they can't find jobs and are saddled with their own debt?
How about students who are forgoing marriage, children, buying a home, or investing in a start-up because they are mired in loan at accrues interest at 8% and cannot be paid down faster than the interest is being capitalized?
How about computer science and economics graduates who are being shortchanged by corporations and even our own federal govt. through imported Chinese and Indian labor? Nothing wrong with the Indian and Chinese but there is something wrong about paying systematically depressed wages and showing bias against hiring Americans at fair wages.
How about the horrific loan servicers who neglect to tell struggling borrowers that the difference between deferment and forbearance can mean tens of thousands of dollars in accumulating interest?
How about covering the federal government's massive role in taking over the great majority of all federal student loans from the banks and consolidating it under the Dept. of Education with GreatLakes as its primary servicer? Why isn't the govt. reducing the interest charged on these essentially risk-free loans (since they cannot be discharged in bankruptcy) to a rate commensurate with one it charges banks?
74
Probably, the reason the government doesn't reduce the interest rates on the loans because the loans are more profitable to the government, if the loan is lent at higher interest rates. When making a loan, the interest charged is all profit.
5
You know, with her credit history, no sane lender would have signed Ms. Kelley for PLUS loans without the government guaranteeing the loan against default. So the profits are privatized to lenders while the risks are socialized by government guarantee against default.
The whole bankruptcy reform bill of 2005, supported by Senators Schumer, Clinton and Biden, among others, set up this scam.
It would be cheaper to the taxpayers for the government to actually take over all lending. At least the paybacks would help defray the costs of defaults.
This article is quite wrong to say that Ms. Kelley owes this $410K to the government. The overwhelming majority is owed to private, for profit, lending institutions, which will collect from we the taxpayers upon Kelley's inevitable default.
The whole bankruptcy reform bill of 2005, supported by Senators Schumer, Clinton and Biden, among others, set up this scam.
It would be cheaper to the taxpayers for the government to actually take over all lending. At least the paybacks would help defray the costs of defaults.
This article is quite wrong to say that Ms. Kelley owes this $410K to the government. The overwhelming majority is owed to private, for profit, lending institutions, which will collect from we the taxpayers upon Kelley's inevitable default.
18
Paul, you seem to misunderstand how this works. The government HAS taken over all lending in the Federal Student market, because they make more money that way. This already occurred, several years ago under Obama. The Student Loan program, on the whole, produces revenue for the Federal Government. The Bankruptcy Reform bill of 2005 is not of any relevance here. Student loans are not dischargeable through bankruptcy, but through working for a certain number of years and paying a tax on one's income during that time. No one gets out of paying back the loans, and the profits are not privatized to lenders (some used to be, but Obama ended this practice almost immediately after taking office.)
15
What was the editorial motivation of posting this piece? Provocation? Ms Kelley's behavior is so beyond rational, let alone prudent, that comment and discussion based on this case is meaningless. These loans will never be repaid beyond a small fraction of the principle, let alone interest. Frankly premeditated fraud comes to mind.
What is made abundantly clear is that the "reform" called out for is to institute sane lending practices. Total educational loan amounts granted should be limited to what can be feasibly repaid. Forbearance should be limited to a few years at most. Financial counseling stepped up. Borrowing for higher education can be and often is a good investment but not when embraced with utter abandon. The Department of Education is doing no one, neither borrowers or the taxpayers, a favor by shoveling money out the door.
What is made abundantly clear is that the "reform" called out for is to institute sane lending practices. Total educational loan amounts granted should be limited to what can be feasibly repaid. Forbearance should be limited to a few years at most. Financial counseling stepped up. Borrowing for higher education can be and often is a good investment but not when embraced with utter abandon. The Department of Education is doing no one, neither borrowers or the taxpayers, a favor by shoveling money out the door.
62
Presumably the federal lending practices are quite "sane", given that they produce net revenue and profit for the federal government. What would be "insane" would be to get rid of them and abandon these source of federal income to private lenders, while reducing the education, intelligence, and competitiveness of our nation's workforce, and to do so out of some misplaced fealty to conservative talking points. As would be clear to the Times readers if Carey actually cared to inform his readership on the issues he discusses, rather than misinform them, the overall policies including eligibility requirements, the high rates of interest, the significant percentage fee which is charged up front on every loan, and the government's essentially unlimited powers to collect on the loans by imposing taxes on future earnings, effectively hedge risk of defaults significantly enough that the loans are a benefit, not a drain to the taxpayer. As for your suggestion on forbearance, that is already the policy-- forbearance is limited to 5 years, which is "a few years at the most." No one has committed fraud here, and you should think before you make such an accusation in a public forum.
8
On reading a great many of these comments it appears to me that stoning really hasn't gone out of style. Frankly, I find the sanctimonious harping on Ms. Kelly's decisions more offensive than the decisions themselves. Lending institutions took advantage of a woman who clearly was not capable of recognizing the fiscal impact of her decisions. That said, she does have a way out of this not-entirely-self-inflicted mess, which will permit her to get on with her life. I took out and repaid my student loans but I was fortunate that my mother was a student loan officer at a university who made sure I knew what I was doing.
To those writers who have harped about their fantastic decision making in not having too many kids, losing their homes or being hospitalized, great work. As noted, Ms. Kelly does have a way forward. While it is not entirely to her liking, it is fair and offers her a way to get on with her life. I'm glad she has this opportunity.
To those writers who have harped about their fantastic decision making in not having too many kids, losing their homes or being hospitalized, great work. As noted, Ms. Kelly does have a way forward. While it is not entirely to her liking, it is fair and offers her a way to get on with her life. I'm glad she has this opportunity.
41
Pretty Ayn Randian out there on the day after Thanksgiving. Ms. Kelley appears to be the first to say she made bad choices but the piling on seems beyond excessive.
That's an easy path to start on, though I'm sure many would know how to get off far sooner. But 4 children as "excess consumption", fearing for the education system where she is a teacher, begrudging her a nice kitchen - I suppose if she were in a low income rat-trap of an apartment you would be happier? Well, as long as no one built it next to your lovely upper-middle class several hundred thousand dollar home. Why not jus look at the issue of education and loans without kicking her anymore. It's a much more constructive conversation even if now it's not as simple as blaming a person you hold in such disregard.
That's an easy path to start on, though I'm sure many would know how to get off far sooner. But 4 children as "excess consumption", fearing for the education system where she is a teacher, begrudging her a nice kitchen - I suppose if she were in a low income rat-trap of an apartment you would be happier? Well, as long as no one built it next to your lovely upper-middle class several hundred thousand dollar home. Why not jus look at the issue of education and loans without kicking her anymore. It's a much more constructive conversation even if now it's not as simple as blaming a person you hold in such disregard.
27
I find the current debate almost never touches on the facility and benefits wars that are going on in colleges and the effects that is having on debt. The kids often make the decisions of where to go and they are so far removed from the results of their decisions. I went to a private school that had 2 to a room and community baths. The same university now has apartment style living with 2 bedrooms 2 bathroom full apartments with kitchens and appliances for the majority of students and no dorms have community baths anymore. The reason stated when I asked about it was the kids demanded it and it was often stated as a reason they choose to go to other schools. Other ammenties include internet access, cable, unlimited music streaming, daily maid service. Food service is also substantially upgraded including the ability to take your meal plan card off campus and use it at most of the restuarants in town like Chils and Applebees. All very popular with students and helped with recruiting. All also continued to drive up the cost of college and it had nothing to do with the actual education. A
40
Yes, Chili's and Applebee's are to blame! In my day, they served gruel at the University Commons and we were happy to have it.
5
I've read through many of the comments and I find there's a bias towards blaming Ms. Kelley for her "poor decisions". I am sure everyone who criticized her thought they were doing a favor by reminding others of the importance of taking responsibility for their individual choices.
Strangely enough, when rich people make bad choices, the government magically finds solutions. When rich corporations make bad choices the government will solve the problem. The main way the government helps them out is by crafting tax laws to their advantage, including the rules of who can or can't go bankrupt. When you are rich enough going bankrupt is easy. When you are very very wealthy corporation, the government will lend you vast amounts of money at zero interest.
I'm very disturbed that so many readers are seemingly unaware of this tilted playing field to the advantage of the rich. Not being born rich is not a choice, but a fact of of life. Ms. Kelley is not rich. She doesn't give lots of money to politicians. I guess she simply doesn't deserve sympathy as a result.
Strangely enough, when rich people make bad choices, the government magically finds solutions. When rich corporations make bad choices the government will solve the problem. The main way the government helps them out is by crafting tax laws to their advantage, including the rules of who can or can't go bankrupt. When you are rich enough going bankrupt is easy. When you are very very wealthy corporation, the government will lend you vast amounts of money at zero interest.
I'm very disturbed that so many readers are seemingly unaware of this tilted playing field to the advantage of the rich. Not being born rich is not a choice, but a fact of of life. Ms. Kelley is not rich. She doesn't give lots of money to politicians. I guess she simply doesn't deserve sympathy as a result.
60
Sure she's to blame. But the point is almost moot because what will happen is that she can't repay the debt and the federal government will pay off the debt to the private lender(s). And that, my friend, means that you and I will pay for her student debt as we are the taxpayers who cover the financial obligations of the federal government.
15
Well, Ms. Kelley herself says she's not a victim, a view rejected by the author of this stilted article.
"'I am not a victim,' said Ms. Kelley, who shared her loan documents with me. 'I made choices.'
"But her story is more complicated than that. It reveals the deep contradictions in the federal government’s approach to student loans."
The only thing I can say is that the schools should take a responsible approach in describing what responsibilities the student is signing on for, and the truth about the difficulty in discharging such debts.
But Ms. Kelley acknowledges that she made choices. She chose private colleges instead of more reasonably priced public universities. She started down the expensive law school trail before becoming seriously sick and dropping out. Then she went in a different direction.
I had a very checkered educational career, too. But only a single year was at a private institution, but because it was a junior year abroad at Trinity College, Dublin, it was actually the cheapest year of schooling I had.
The schools often get inducements (kickback is such an ugly, albeit accurate characterization) from lenders to basically screw their students. Do institutions encourage financial literacy, and urge students to only borrow the minimum necessary to get by?
She was to,d it's all really easy. But 8% these days is TWICE what a mortgage loan costs. She says she's not a victim, but her kids mght follow the fame fruitless path, and there's the tragedy.
"'I am not a victim,' said Ms. Kelley, who shared her loan documents with me. 'I made choices.'
"But her story is more complicated than that. It reveals the deep contradictions in the federal government’s approach to student loans."
The only thing I can say is that the schools should take a responsible approach in describing what responsibilities the student is signing on for, and the truth about the difficulty in discharging such debts.
But Ms. Kelley acknowledges that she made choices. She chose private colleges instead of more reasonably priced public universities. She started down the expensive law school trail before becoming seriously sick and dropping out. Then she went in a different direction.
I had a very checkered educational career, too. But only a single year was at a private institution, but because it was a junior year abroad at Trinity College, Dublin, it was actually the cheapest year of schooling I had.
The schools often get inducements (kickback is such an ugly, albeit accurate characterization) from lenders to basically screw their students. Do institutions encourage financial literacy, and urge students to only borrow the minimum necessary to get by?
She was to,d it's all really easy. But 8% these days is TWICE what a mortgage loan costs. She says she's not a victim, but her kids mght follow the fame fruitless path, and there's the tragedy.
2
Jim - But the system on the whole is profitable for the federal government, so what's there to cover? This is what happens with any type of debt (credit cards, etc...) by private institutions (banks, credit unions, etc...) For every basket case debt balloon that's charged off, there's dozens and dozens of interest payments of current borrowers that fill in the gap.
If anything, current borrowers subsidize delinquent borrowers, with a theoretical backstop of all taxpayers.
*yes I know old student loans were funded by private lenders, but this is no longer the case.
If anything, current borrowers subsidize delinquent borrowers, with a theoretical backstop of all taxpayers.
*yes I know old student loans were funded by private lenders, but this is no longer the case.
The most important priority of the government is to protect the profits of all phases of the financial industry. I understand that my happiness and well-being is not embodied in me as an individual but in the glorious success of the financial markets. How dare people criticize the glorious financial world!
8
Granted, I graduated back in 1997 with three degrees, but I owed just $50,000. I made the foolish and expensive choice of getting married, but then divorced, again an expensive choice, but at least we didn't have kids. I received assistantships for two of my degrees, so tuition was paid, but then I took out loans to pay for personal expenses. I also knew what my expected pay would be with those loan payments and made sure I always finished what I started, no matter my personal choices along the way. I don't understand $200,000 in students loans, knowing the pay scale of teachers. Personal choices, yes, but I'm thinking that this is a case of not facing the reality of life. The reality of life is that one must pay what is owed, and not making payments for 25 years is ludicrous. I paid off my loans in 10 years, and that's the choice I made.
31
Student loan debt in the US is a massive problem and it's getting worse. I have to agree with others that if this were treated as a cautionary tale it might be a good lesson, but to pile on Ms. Kelley is to miss the big picture.
I dropped out of college and started a business servicing tech firms in Silicon Valley nearly 40 years ago. Along the way I considered an MBA, ran the numbers, and came to the conclusion that at the end of 2 or 3 years to complete undergrad and graduate degrees I'd end up with nearly $100K in debt and unknown job prospects. But I knew from experience that if I persisted making new invention and my own startups I had better odds of making more money, creating greater value and having no debt. I was right several times over in a number of very competitive industries.
Education is very important and valuable to our nation's future. Not everyone is cut out to be an entrepreneur - we entrepreneurs need educated people to hire.
We're interviewing software developers. One from western Europe has a PhD and no debt. Due to marriage to Americans he's not an H1B. We're also seeing US grads, MS not PhD, and learn later they have $200K+ in debt. When we hire both at wonderful salaries they quickly compare notes as one is looking to buy a house, is driving a nicer car and taking great vacations while the other is living in a small rental with a 15 year old car from his grandmother while paying off student debt. As national policy it's absurd.
I dropped out of college and started a business servicing tech firms in Silicon Valley nearly 40 years ago. Along the way I considered an MBA, ran the numbers, and came to the conclusion that at the end of 2 or 3 years to complete undergrad and graduate degrees I'd end up with nearly $100K in debt and unknown job prospects. But I knew from experience that if I persisted making new invention and my own startups I had better odds of making more money, creating greater value and having no debt. I was right several times over in a number of very competitive industries.
Education is very important and valuable to our nation's future. Not everyone is cut out to be an entrepreneur - we entrepreneurs need educated people to hire.
We're interviewing software developers. One from western Europe has a PhD and no debt. Due to marriage to Americans he's not an H1B. We're also seeing US grads, MS not PhD, and learn later they have $200K+ in debt. When we hire both at wonderful salaries they quickly compare notes as one is looking to buy a house, is driving a nicer car and taking great vacations while the other is living in a small rental with a 15 year old car from his grandmother while paying off student debt. As national policy it's absurd.
31
The whole paying for grad school via social security contributions sounds pretty sweet! Given most of us may not ever see a single dime of what we have paid into the system our entire working lives, I would love to hear more about this opportunity.
On a serious note, we can all agree lending standards need to be reformed and interest rates are FAR to high, but the Times should profile people other than those with multiple children and poor decision making skills. Not making a single payment in 25-years because you feel it won't have an impact is moronic. That type of thinking is self centered and why this individual is in this particular situation.
Why private school? Why a low caliber law school? Why take out loans for your children? Why what appears to be a premium looking house? The list goes on...
On a serious note, we can all agree lending standards need to be reformed and interest rates are FAR to high, but the Times should profile people other than those with multiple children and poor decision making skills. Not making a single payment in 25-years because you feel it won't have an impact is moronic. That type of thinking is self centered and why this individual is in this particular situation.
Why private school? Why a low caliber law school? Why take out loans for your children? Why what appears to be a premium looking house? The list goes on...
14
I understand that Ms. Kelley has taken responsibility for her debt and her own choices, and I also have taken out loans to go back to school with children (as have many of my peers) so I completely understand her predicament.
I don't understand why the 10-year non-profit payments of 10% of her salary are not a "way out".
I can't recommend it enough. While seemingly crushing it is the absolute best way for someone with her level of debt to get out. I have recommended it to many people.
And there ought to be a limit to student loans as well, with more federal aid available (based on GPA and need and major eligibility--no 1.9 GPA in English composition, we'd like a 3.0 in English and pre-Education double major please) to cover student expenses.
Still, I hope Ms. Kelley comes to peace with Obama's public service repayments. It's a very fair deal and would leave her, presumably, paying off just what she owes.
If she makes about $65,000 per year or $5,000 / month, then that is $500/month. It might even be take-home-pay based, so it would be lower.
I have much less debt than she ever accumulated, and I still pay about $450 every month. Basically I'm paying for my kids' daycare after the fact, but I needed to get an education during the recession, not after. I feel this is a great deal. That is not the public-sector repayment, though I qualify.
I think of paying these back as paying it forward.
You're not alone, Liz. You can do it.
I don't understand why the 10-year non-profit payments of 10% of her salary are not a "way out".
I can't recommend it enough. While seemingly crushing it is the absolute best way for someone with her level of debt to get out. I have recommended it to many people.
And there ought to be a limit to student loans as well, with more federal aid available (based on GPA and need and major eligibility--no 1.9 GPA in English composition, we'd like a 3.0 in English and pre-Education double major please) to cover student expenses.
Still, I hope Ms. Kelley comes to peace with Obama's public service repayments. It's a very fair deal and would leave her, presumably, paying off just what she owes.
If she makes about $65,000 per year or $5,000 / month, then that is $500/month. It might even be take-home-pay based, so it would be lower.
I have much less debt than she ever accumulated, and I still pay about $450 every month. Basically I'm paying for my kids' daycare after the fact, but I needed to get an education during the recession, not after. I feel this is a great deal. That is not the public-sector repayment, though I qualify.
I think of paying these back as paying it forward.
You're not alone, Liz. You can do it.
30
I have a friend in a similiar predicament. What they don't tell you about the 10 year public service forgiveness program is that they require you to pay taxes on the total of the forgiven amount. There is no way to make a payment like that!
3
Beautiful comment. I'll be taking full advantage of the income-based program. Liz, you can do it. Stay strong and pay them their damn money. We're rooting for you.
3
I have a certain aquantence I know who has 2 children, plus 2 more adopted children. She has upwards of $30k in student loans from a well known undergraduate institution, doesn't work and lives somewhere at or slightly below the poverty line with her boyfriend. She has an on-n-off student loan payment that is a tedious burden to her. She does not talk about paying back loans or finding a job to do so. She spends a lot of time studying how her circumstances might let her not pay the loans, due to hardship clauses; and the ultimate winner being complete loan forgiveness after a couple decades. Finally, despite all this she is researching going to graduate school on the premise that she won't have to pay. She is a lifetime learner, but none of this contains a goal of applying the education after, as she is happy being a mother for her children currently.
At some point, people need to take accountability for their loans and choices.
At some point, people need to take accountability for their loans and choices.
29
Your story is suspect, but in the 2005 bankruptcy "reform" act, supported by Senators Schumer, Clinton and Biden, et al., student loans are all but impossible to discharge short of 100% disability, the kind that entitles one to SSI payments.
She's not getting out from under. And you say she's happy to be a mother at or slightly below the poverty line. Color me skeptical of the tale you spin here.
She's not getting out from under. And you say she's happy to be a mother at or slightly below the poverty line. Color me skeptical of the tale you spin here.
3
Those who rush to judgment about Ms. Kelly's choices seem not to have registered two crucial points in the article:
1. "She became ill with a life-threatening autoimmune disease, requiring a lengthy hospitalization. She dropped out of law school and ultimately chose not to return. But she still owed the money," and
2. "The Great Recession was devastating. Facing home foreclosure, Ms. Kelley cashed out her public teacher retirement funds, despite the stiff penalty. But it wasn’t enough. In 2008, she and her husband lost their home, and they divorced."
I'll bet that if neither of those things had happened, she would have started paying off her loans much earlier. She probably would have completed law school and had a higher income to make the payments. She wouldn't have lost everything, probably including her marriage, without the devastation of the recession.
The key thing here is that the student loans are never escapable, even with bankruptcy and that the interest keeps growing during deferrals. This is so similar to the horror stories about people losing everything because of medical debt, even with good insurance.
1. "She became ill with a life-threatening autoimmune disease, requiring a lengthy hospitalization. She dropped out of law school and ultimately chose not to return. But she still owed the money," and
2. "The Great Recession was devastating. Facing home foreclosure, Ms. Kelley cashed out her public teacher retirement funds, despite the stiff penalty. But it wasn’t enough. In 2008, she and her husband lost their home, and they divorced."
I'll bet that if neither of those things had happened, she would have started paying off her loans much earlier. She probably would have completed law school and had a higher income to make the payments. She wouldn't have lost everything, probably including her marriage, without the devastation of the recession.
The key thing here is that the student loans are never escapable, even with bankruptcy and that the interest keeps growing during deferrals. This is so similar to the horror stories about people losing everything because of medical debt, even with good insurance.
44
Student loans should come with a type of catastrophic risk insurance to protect the borrower from financial ruin should they encounter the kind of life challenges which Ms. Kelly faced. I find it incredibly remarkable that NO loan officer ever pointed out to her along the way about her mounting debts? Also, for an educated person, shouldn't she have had greater financial knowledge?
11
"She had taken out her first student loan 25 years earlier and had yet to make a single payment."
What part of that do you find remotely defensible?
What part of that do you find remotely defensible?
13
They actually do come with this. If you get to the end of the article, you find out that Ms. Kelley has a quite reasonable way out.
What a freaking, flopping, frog pond jumping mess.
Memo to govt.: please beware of the dangers of doing evil when trying to do good.
I suspect that all of those who benefit from student debt lobbied heavily to keep things all loosey-goosey so that they could get the tuition payments, enroll more students and so forth. Make no mistake, there are billions being raked in somewhere in all of this.
Clearly, the student in question was being victimized, as are millions of others, along with the taxpayers. At the same time, her story reflects that of a lot of people who don't really know what they want to do in life by starting and stopping things (law school, Ph.D.) without finishing various goals or considering the consequences.
Student loans are a swamp and the only way to start to pull ourselves out of the muck is reform from top to bottom.
Memo to govt.: please beware of the dangers of doing evil when trying to do good.
I suspect that all of those who benefit from student debt lobbied heavily to keep things all loosey-goosey so that they could get the tuition payments, enroll more students and so forth. Make no mistake, there are billions being raked in somewhere in all of this.
Clearly, the student in question was being victimized, as are millions of others, along with the taxpayers. At the same time, her story reflects that of a lot of people who don't really know what they want to do in life by starting and stopping things (law school, Ph.D.) without finishing various goals or considering the consequences.
Student loans are a swamp and the only way to start to pull ourselves out of the muck is reform from top to bottom.
8
Who would like to bet that the legal clauses which made the student loans a 'no fault' loan were championed by lobbyists paid by commercial banks? The only other examples of no fault loans that I am aware of are the kind which the World Bank makes to third world countries. There may be others, but I find it interesting that students and bankrupt 3rd world nations are made to pay with little chance of loan forgiveness. (Well, the WB eventually did forgive because they either made a lot of money or got the taxpayers of WB member countries to pay for it!!)
4
This is beyond absurd. Student-loans are a $1-Trillion pyramid-scheme. What exactly of value, other than a couple law-school classes and child-care payments did this poor woman receive for $400K in student-debt?
It took me 7 years to repay my student-loans in the 80's and 90's. At least back then there was reasonable expectation your (mostly pre-internet,) college-education would lead to the great-American-bargain of upward-mobility. But today that's all gone, and this poor woman is an example of how distorted things have gotten.
The system fails more people than ever before, and clearly it's failed her. Why should she be enslaved for life?
The only realistic solution is to allow student-loan debt to be included in all future bankruptcy-filings starting in 2016. To deny this constitutionally-protected right is unjust-punishment.
And student-loan-debt slaves have that weeping-liberal "man-of-the-people" and "savior of the middle-class" Joe Biden to thank -- in 2005 he aggressively pushed the legislation on behalf of his Delaware banking constituents that changed the law denying the inclusion of student-loan-debt in bankruptcy.
(The very same banks that skated home-free after The Great Recession of 2009, thanks to taxpayer bailouts.) Privatized-profit, socialized-losses. Thanks "Uncle Joe!"
What happened to all the 'hope and change?"
Where's your great President Obama the liberator?
Enough is enough.
It took me 7 years to repay my student-loans in the 80's and 90's. At least back then there was reasonable expectation your (mostly pre-internet,) college-education would lead to the great-American-bargain of upward-mobility. But today that's all gone, and this poor woman is an example of how distorted things have gotten.
The system fails more people than ever before, and clearly it's failed her. Why should she be enslaved for life?
The only realistic solution is to allow student-loan debt to be included in all future bankruptcy-filings starting in 2016. To deny this constitutionally-protected right is unjust-punishment.
And student-loan-debt slaves have that weeping-liberal "man-of-the-people" and "savior of the middle-class" Joe Biden to thank -- in 2005 he aggressively pushed the legislation on behalf of his Delaware banking constituents that changed the law denying the inclusion of student-loan-debt in bankruptcy.
(The very same banks that skated home-free after The Great Recession of 2009, thanks to taxpayer bailouts.) Privatized-profit, socialized-losses. Thanks "Uncle Joe!"
What happened to all the 'hope and change?"
Where's your great President Obama the liberator?
Enough is enough.
13
Vote for Bernie Sanders!
5
If we pulled our military out of the 150 countries the Department of "Defense" admits we are in we could have free college education for all. An extremely well educated nation will do more for our nation's future than our current continual state of war will. We would have wiser voters and a far more dynamic economy.
111
Nothing really surprising here. Loans made with no regard for possible repayment. Borrower signing up without any apparent consideration for the consequences. Individuals have to take full responsibility for their actions. Ms. Kelley says she knows she made bad decisions yet when discussing the 10 years of service for loan forgiveness laments she won't be able to save for retirement. Does she realize that for the portion of the loans the government forgives that someone else didn't get to save as much for retirement because they had to pay for her bad choices? Also, is it any surprise college costs continue to spiral out of control.....same issue as mortgage debacle. easy money, loans made with no regard for ability to repay result in higher prices that are unsustainable without the funny money.
Yet those that make responsible decisions and don't abandon basic reality (and math) have to pay for the lunacy.
Yet those that make responsible decisions and don't abandon basic reality (and math) have to pay for the lunacy.
27
Only in America. Seems to be a case that the Consumer Financial Protection Bureau should be on. Not protecting Ms. Kelly, but you and me. Of course, you and me, taxpayers will be taken care of this debt, since it is obvious the person is or will be in a public service job and therefore the debt will be forgiven to her, and we will pay it. So, my the time the ten years lapses, the debt needing to be forgiven will be about $758,000. Where will she get the money to pay the taxes of the forgiven amount? Answer, she never will as she can then declare bankruptcy and get it cleared, for then it will not be student debt but ordinary tax debt. Only in America. ,
15
As a taxpayer, I benefit from having a more highly educated set of compatriots. I am quite happy supporting education. However, it should be in the form of tuition reduction, rather than loans.
Education is an investment for the country, even when it is not an investment for the individual.
Education is an investment for the country, even when it is not an investment for the individual.
12
Public Service Loan Forgiveness of student loans is not taxed. After 10 years she would be in the clear.
Only in America do the self-righteous "tax payers" whine and condemn when an ordinary citizen gets in trouble through bad decisions. Only in America do we grovel at the feet of the rich, the powerful, the giant corporations when they file for corporate bankruptcy and cheat the taxpayers out of billions or trillions. Only in America is the little guy shamed and condemned for their folly while the rich and powerful are praised and glorified even as they rob us taxpayers blind. Only in America does our self-righteousness and hypocrisy grow with every condemning stone that we throw at the Ms. Kellys. Only in America is the rapacious nanny corporate welfare state adored and glorified.
7
Her problem, like mine, is that all those helpful programs for today's young people don't help those of us with older loans. We're stuck with 8% loans whose interest kept piling up because there were no reasonable or graduated income repayment plans.
I started out with $25,000 in loans to pay for my teaching degree 18 years ago. I wound up employed, but a single parent with two children and a husband who wasn't paying much child support. My loan repayment plan back then totaled nearly half my net pay as a beginning teacher. Partial payments weren't accepted. The only option was forbearance.
When my own children reached college age, I managed without borrowing more money until my ex-husband lost his job as a lawyer when my older son was a senior and his younger brother a sophomore. The loans started mounting.
Today I'm 58, with no savings (although, mercifully a defined benefit pension), a student loan debt of $140,000 and once again a monthly payment of half my net income. I don't qualify for the loan programs that are helping my children. I would love to be able to pay 10% of my net or at least be able to refinance my loans from 8% to 3% -- which would still give the gov't a 2% profit, by the way.
I'm with Ms. Kelley. There has to be a way out.
I started out with $25,000 in loans to pay for my teaching degree 18 years ago. I wound up employed, but a single parent with two children and a husband who wasn't paying much child support. My loan repayment plan back then totaled nearly half my net pay as a beginning teacher. Partial payments weren't accepted. The only option was forbearance.
When my own children reached college age, I managed without borrowing more money until my ex-husband lost his job as a lawyer when my older son was a senior and his younger brother a sophomore. The loans started mounting.
Today I'm 58, with no savings (although, mercifully a defined benefit pension), a student loan debt of $140,000 and once again a monthly payment of half my net income. I don't qualify for the loan programs that are helping my children. I would love to be able to pay 10% of my net or at least be able to refinance my loans from 8% to 3% -- which would still give the gov't a 2% profit, by the way.
I'm with Ms. Kelley. There has to be a way out.
40
This woman is presented as a victim, yet she seems to have quite carefully gamed the system to avoid paying back even a cent of what she borrowed. Now, rather than make even 10 years of minimum payments, which she calls futile, she thinks she should be allowed to put that money into her retirement funds, having previously withdrawn her retirement savings. Despite starting her education later in life, she has taken out government loans for 4 degrees, couple not finished, including living expenses. She and her husband and now she and her daughter have structured a series of loans such that they all are added to her obviously unrepayable pile of debt. The law ought to be structured such that further loans are cut off to people like this. The proper word for this is fraud. After all of this educational debt, she is teaching for a salary less than public school districts pay.
204
I give credit to President Obama for trying hard to acknowledge the problem. A White House Fact Sheet says: "With college costs and student debt on the rise, the choices that American families make when searching for and selecting a college have never been more important."
I wrote a book about College Selection arguing that students need to consider college the same way as people would any other investment - like buying shares of a company’s stock. They need to estimate their financial Return on Investment (ROI) - which Ms. Kelly clearly did not do - in addition to the emotional and intangible benefits that a college degree provides.
There are simple research tools that help in every aspect of college selection: the location and region you choose, what you study, how long you take to graduate, how you limit costs (and borrowing), what career you pursue and how to get an internship in a growing industry leading to a meaningful job after graduation so that you can begin paying down the loan.
I've approached several high school districts with offers to conduct free workshops to educate students but they say that they are so cash-strapped that I have to pay to rent a school auditorium and market my seminar! They also concede that they are not measured on what students do after high school, and so they have no incentive to take action.
The total education debt is over $1.2 trillion, all of which is unsecured. Unfortunately, this problem will only get worse.
I wrote a book about College Selection arguing that students need to consider college the same way as people would any other investment - like buying shares of a company’s stock. They need to estimate their financial Return on Investment (ROI) - which Ms. Kelly clearly did not do - in addition to the emotional and intangible benefits that a college degree provides.
There are simple research tools that help in every aspect of college selection: the location and region you choose, what you study, how long you take to graduate, how you limit costs (and borrowing), what career you pursue and how to get an internship in a growing industry leading to a meaningful job after graduation so that you can begin paying down the loan.
I've approached several high school districts with offers to conduct free workshops to educate students but they say that they are so cash-strapped that I have to pay to rent a school auditorium and market my seminar! They also concede that they are not measured on what students do after high school, and so they have no incentive to take action.
The total education debt is over $1.2 trillion, all of which is unsecured. Unfortunately, this problem will only get worse.
4
I have many wealthy friends with children that will never be strapped with thousands of dollars of student loans. These same children make their fair share of mistakes as we all did when we were young..Lets not sit in the judgement seat please...In my view, it is unconscionable that we live in a society/world where only the children of the wealthy can be 100% free of all student debt. These same wealthy children often switch majors or take time away for many reasons & fortunately never have to worry about student debt accumulation..I believe all people, including Ms. Kelly deserve the same..
39
How people select to spend their monies is their business. Your wealthy friends children are not in student loan debt because they never borrowed money to finance their education.
We do not live in a country of equity. Based on race, gender, socio-economics there is inheritable wealthy and thus, your friends are in a better financial place and that gives them choice. For the rest of us- the goal is go to university; get our "ticket punched" ; find work; and pay back your debit. A university education is a gift not a right.
While Ms. Kelley's situation is unfortunate, she needs to pay back her debt or make an attempt to try.
We do not live in a country of equity. Based on race, gender, socio-economics there is inheritable wealthy and thus, your friends are in a better financial place and that gives them choice. For the rest of us- the goal is go to university; get our "ticket punched" ; find work; and pay back your debit. A university education is a gift not a right.
While Ms. Kelley's situation is unfortunate, she needs to pay back her debt or make an attempt to try.
12
The more important question is how a supposedly "educated" woman let herself build almost half a million dollars in student debt. I feel not an ounce of pity for Ms. Kelley, nor do I think taxpayers should foot the bill for her financial incompetence.
61
'I feel not an ounce of pity for Ms. Kelley,,,'.
That's a harsh position. It's clear that she bears some responsibility for the mess she's in, but the government had no business lending her so much money.
And the colleges, far from being temples of education, have become profit centers. There's no justification for the outrageous fees they charge, not to mention the mind-blowing prices for textbooks, many of which aren't worth the paper they're printed on.
Mark Yudof, the former president of the University of California, was once asked whether he deserved to be paid $600,000 per year, quite a bit more than the president of the United States. His answer was that while POTUS had a plane, he didn't!
When we allow this kind of naked, shameless greed to continue, what should we expect other than a broken system?
That's a harsh position. It's clear that she bears some responsibility for the mess she's in, but the government had no business lending her so much money.
And the colleges, far from being temples of education, have become profit centers. There's no justification for the outrageous fees they charge, not to mention the mind-blowing prices for textbooks, many of which aren't worth the paper they're printed on.
Mark Yudof, the former president of the University of California, was once asked whether he deserved to be paid $600,000 per year, quite a bit more than the president of the United States. His answer was that while POTUS had a plane, he didn't!
When we allow this kind of naked, shameless greed to continue, what should we expect other than a broken system?
23
Place a maximum of $ 50,000 for any and all students that attend college and want to become a teacher. For they could attend city and or state universities to be come teachers. There is no reason for anyone to attend private school and to pay $ 60,000 a year to become a teacher. So if they want to they can borrow to become teacher but loans will be limited to a maximum of $ 50,000 for the four years of attendance. The rest should be financial aid or payment should be upfront.
15
The subject of this story already had children when she started her degree. It's possible that the only college within her driving range was private. Should we make her responsible for thousands of dollars of tuition simply because of where she lives?
3
Yes! A person is not entitled to an expensive education at taxpayer expense, without ever paying back a penny. Ms. Kelley made some terrible choices. Even if she had never gotten sick, even if she hadn't lost her home, even if she hadn't gotten divorced, she would have still been in financial trouble because of these loans. She shouldn't have borrowed for an English degree in middle age. She shouldn't have been allowed to borrow money to pay for childcare, in addition to tuition, room and board, etc. She did this all to herself, and now she complains that she is expected to pay back the loans. Cry me a river.
38
I don't understand how the title "Lend with a smile, collect with a fist" is supposed to fit the facts.
As the article states, Ms. Kelly repeatedly received "forbearance" was allowed to delay making any payments for 25 years. How does amount to collecting with a fist?
Also the article mentions that only 1% of students have loan debt totals over more than $150K, but it should probably add that almost all of those individuals are people who borrowed for medical school or law school for professions with high salaries.
As the article states, Ms. Kelly repeatedly received "forbearance" was allowed to delay making any payments for 25 years. How does amount to collecting with a fist?
Also the article mentions that only 1% of students have loan debt totals over more than $150K, but it should probably add that almost all of those individuals are people who borrowed for medical school or law school for professions with high salaries.
60
I don't understand what drives someone to have four children. Seriously. I just don't understand it. I had two children because that's what I could afford and still have the career I wanted, the babysitters, not to mention their braces, summer activities, and loan free college educations I was lucky enough to provide for them. Well at least Ms. Kelley admits that it was her choice to take out the loans upon loans in order to pursue degree upon degree. Wow, this sounds really bad.
71
ho-hum.....blame the victim.
My opinion of living and going to school on borrowed money is that it sets the tone for all the rest of a person's life. I used to be in favor but now I would rather see the tax payer extend educational opportunities to people who qualify, either for skilled trade or liberal arts education. We could be repaid by some form of community service.
10
The lenders and schools are happily exploiting an irrational belief, encouraged by our national leadership, that every citizen needs and deserves college-level education. With provisions in the bankruptcy code prohibiting discharge of educational debt in all but the most dire circumstances, along with the threat of garnishment of tax returns and Social Security benefits, the lenders build vast portfolios of very secure debt and the schools amass huge endowments with which to lavish millions on faculty salaries, construction and marketing. The
schools benefit richly because they can charge whatever they want for tuition and fees and the banks are only too happy to lend whatever the schools demand for educational programs that may or, increasingly, may not produce any tangible benefit but a diploma that may not be worth the paper it's printed on.
As a nation we need to understand that education is not a commodity but an investment good. Our best and brightest should not have to pay for university education at all, but supported in their intellectual endeavors. And those who are not intellectually prepared or inclined should be given free or heavily-subsidized alternatives to careers in useful, necessary and important work that does not require a university education and which provides a living wage.
schools benefit richly because they can charge whatever they want for tuition and fees and the banks are only too happy to lend whatever the schools demand for educational programs that may or, increasingly, may not produce any tangible benefit but a diploma that may not be worth the paper it's printed on.
As a nation we need to understand that education is not a commodity but an investment good. Our best and brightest should not have to pay for university education at all, but supported in their intellectual endeavors. And those who are not intellectually prepared or inclined should be given free or heavily-subsidized alternatives to careers in useful, necessary and important work that does not require a university education and which provides a living wage.
12
I agree, but I disagree. A high school degree does not prepare people for most careers. Even jobs that used to only require high school - like auto repair - now often require some technical education after high school. Plumber. HVAC repair. Welder. Chef. Truck driver. The list goes on. In general, some form of advanced education is required, if one wants even to be lower middle class.
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Where we go wrong, is that we don't consider a technical certification or bachelors of science degree to be worth as much as a BA. "Go to college" means "go get a four year degree in something interesting, but don't worry about money." Hence English degrees: studying Chaucer and writing poems. Or philosophy, which when I was in college could well have been renamed bong studies. These people graduate with a ton of debt, and then must take on more to gof any use in a profession.
.
Instead of discouraging people from going to college. We really need to redefine college to be any sort of education post high school. That would get us the affordable, technical educations that we so often eschew now.
.
Where we go wrong, is that we don't consider a technical certification or bachelors of science degree to be worth as much as a BA. "Go to college" means "go get a four year degree in something interesting, but don't worry about money." Hence English degrees: studying Chaucer and writing poems. Or philosophy, which when I was in college could well have been renamed bong studies. These people graduate with a ton of debt, and then must take on more to gof any use in a profession.
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Instead of discouraging people from going to college. We really need to redefine college to be any sort of education post high school. That would get us the affordable, technical educations that we so often eschew now.
11
ho-hum....blame the victim....whatever happened to the social contract?
My wife and I both have BAs in art history. My wife went to grad school in art history. I went to architecture school. We both finished about ten years ago. Between us we have only $11,000 debt remaining.
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Some of it is luck. I was very lucky to get grants for both undergrad and grad school. But another big part of it is just being cognizant of debt loads and seeking out the least expensive ways of getting an education. Community colleges, for example, are a great way to minimize costs - since their tuitions are much lower even than the state schools. The credits transfer so you can complete your degree at a state university. And the best way to do that, of course, is to go to your state's state university - taking advantage of in-state tuition. This is what my wife did.
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And, of course, sometimes a degree isn't worth the money. My wife has toyed with the idea of getting. PhD in art history. I've thought about another masters: this time in urban planning and public policy. But it's doubtful we'll do either soon. Not with a three year old, a mortgage, credit card debt.... And not when neither of our careers demand these degrees.
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Some of it is luck. I was very lucky to get grants for both undergrad and grad school. But another big part of it is just being cognizant of debt loads and seeking out the least expensive ways of getting an education. Community colleges, for example, are a great way to minimize costs - since their tuitions are much lower even than the state schools. The credits transfer so you can complete your degree at a state university. And the best way to do that, of course, is to go to your state's state university - taking advantage of in-state tuition. This is what my wife did.
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And, of course, sometimes a degree isn't worth the money. My wife has toyed with the idea of getting. PhD in art history. I've thought about another masters: this time in urban planning and public policy. But it's doubtful we'll do either soon. Not with a three year old, a mortgage, credit card debt.... And not when neither of our careers demand these degrees.
31
A highly misleading article. High debt levels are generally associated with students pursuing high cost graduate education which also results in correspondingly high lifelong income (MD, JD, Nursing, etc). The highest default rates are for loans of less than $5000 or for students who start and almost immediately dropout of school. Student lending repayment has been incredibly favorable to students provided the loan holder actually responds to what amounts to a barrage of requests before default proceedings begin.
The average loan repayment for a 10 repayment with $30K/debt is about $350/month. HOWEVER, you can extend payments to 25 years or in the event of partial financial hardship, your monthly payments can be set to ~10% of discretionary (not gross) income. If your income remains very low, the loan is forgiven after 20 years.
In other words, these loans are less than a car, can be paid off either by % of income or over 10 years and get you a college degree. At what point do we hold individuals responsible for their own decisions?
The average loan repayment for a 10 repayment with $30K/debt is about $350/month. HOWEVER, you can extend payments to 25 years or in the event of partial financial hardship, your monthly payments can be set to ~10% of discretionary (not gross) income. If your income remains very low, the loan is forgiven after 20 years.
In other words, these loans are less than a car, can be paid off either by % of income or over 10 years and get you a college degree. At what point do we hold individuals responsible for their own decisions?
38
I enjoyed so much your article and the various incidents that have led to a discouraging fate for this woman (and her family...including her ex-husband)
To me, the key to correcting this education loan program is to require at 11 months after the loan is granted the yeas's accrued interest plus $100 is due. Non-payment results in immediate cancellation of any future loan agreements, and collection efforts will begin. Think about it...if this had been implemented when this tragedy first began, what a different result would have been wrought!!
To me, the key to correcting this education loan program is to require at 11 months after the loan is granted the yeas's accrued interest plus $100 is due. Non-payment results in immediate cancellation of any future loan agreements, and collection efforts will begin. Think about it...if this had been implemented when this tragedy first began, what a different result would have been wrought!!
3
And how many miles per gallon does one get from these student loans?
RE: But it does not explain the plight of Liz Kelley, a Missouri high school teacher and mother of four who made a series of unremarkable decisions about college and borrowing. She now owes the federal government $410,000, and counting.
No the decisions are remarkable as in warranting remarks. Her decision to borrow money was fool hardy and irresponsible. Wait unil the kids are in school rather than borrow for child care. Don't study English. Don't get a divorce it's less expensive to maintain one household rather than two. Who knows what other bad decision there were.
No the decisions are remarkable as in warranting remarks. Her decision to borrow money was fool hardy and irresponsible. Wait unil the kids are in school rather than borrow for child care. Don't study English. Don't get a divorce it's less expensive to maintain one household rather than two. Who knows what other bad decision there were.
62
"Wait until the kids are is school rather than borrow for child care. Don't study English, don't get a divorce..."
OK. Also known as:
"Suck it up you stupid woman! Why did you marry that Idiot? It's all your fault for making a stupid decision to even have kids with that moron! Don't start complaining now about how difficult it is...you made your bed, and you now have to sleep in it!" Said every man ever.
OK. Also known as:
"Suck it up you stupid woman! Why did you marry that Idiot? It's all your fault for making a stupid decision to even have kids with that moron! Don't start complaining now about how difficult it is...you made your bed, and you now have to sleep in it!" Said every man ever.
5
My wife and I have five children. Four of them have a BA degree. Four attended community college first. All five attended public colleges. Because of a business move, two graduated from the University of North Carolina and one from the University of Virginia. No one in their right mind can say that a private college will provide a superior education to these universities, especially for the cost.
In addition, two attended and graduated from law school and were admitted to the bar. Another has a business degree and is fluent in French and Italian.
One of the lawyers has international business experience and speaks French, German, and Dutch. All took out student loans. All repaid the student loans over a ten year period.
Smart choices, public colleges, working while in school, financial discipline after graduating make a reasonable life. Poor choices, private colleges, not working during school, starting and not completing a degree program, and lack of financial discipline after college lead to a crisis.
"She had taken out her first student loan 25 years earlier and had yet to make a single payment." What else can I say.
ien after college
In addition, two attended and graduated from law school and were admitted to the bar. Another has a business degree and is fluent in French and Italian.
One of the lawyers has international business experience and speaks French, German, and Dutch. All took out student loans. All repaid the student loans over a ten year period.
Smart choices, public colleges, working while in school, financial discipline after graduating make a reasonable life. Poor choices, private colleges, not working during school, starting and not completing a degree program, and lack of financial discipline after college lead to a crisis.
"She had taken out her first student loan 25 years earlier and had yet to make a single payment." What else can I say.
ien after college
135
Income-based repayments for the Public Loan Forgiveness Program are based off one's adjusted gross income. As a public employee, Ms. Kelley could enroll in a 403(b) program which would allow her to save for retirement and make a monthly loan payment. Additionally, if she claims her children as dependents that further lowers her monthly payments as the calculator accounts for family size.
6
Unfortunately, Ms. Kelley is not a public employee. She is a high school teacher in a parochial school.
1
Ms. Kelley is a law school and phd program drop out. She enrolled in four higher education programs, and paid for five programs: (1) undergraduate degree; (2) master's degree; (3) law school; (4) PhD program; and (5) she took out educational loans on behalf of children. Had Ms. Kelley only completed undergraduate and the master's degree then started working as a teacher and worked without interruption until retirement age like a reasonable person, she would have had a lower amount of loans, lower accumulated interest, and more years of income. In addition, having four children is an excess form of consumption that other reasonable people trying to make ends meet refrain from.
179
It doesn't feel like "real" money, but it is. Money that all of us contributed through our taxes...
2
Oh I get it. When Ms. Kelley made an investment in herself, and her plans for repayment went awry, she's stuck with that debt---forever.
In comparison, when Wall Street gambled and lost billions, or Donald Trump's Casino's went bankrupt FOUR times, they get to shed their debt and resume their high flying lifestyles. In fact the un-indicted Wall Street's "Masters of the Universe" piously extolled the virtues of the free enterprise system---bad mouthed Obama's "socialism" as they held out their hands for their government bailout---corporate welfare. Even more striking, some people actually believe that Trump can lead a nation and that he's some business genius.
Corporations obtain loans based on their assessments on repaying them
and sometimes those don't pan out, yet they get to write off those debts. Clearly, Ms. Kelley should be allowed to do the same. Discharging student loans via bankruptcy is not an impossibility, she just needs to find the right attorney and leverage that reality with her loan companies.
How many student loan companies, or credit card companies have gone bankrupt? Exactly. Losses are part of the student loan business model. This reporter should explore the scale of that reality. Ms. Kelley's case is not the defining example, there are other cases where people can work out a better solution. Obviously, none of these companies owed by Ms. Kelley are going to receive their full payment, so then what? Exactly---another write off.
In comparison, when Wall Street gambled and lost billions, or Donald Trump's Casino's went bankrupt FOUR times, they get to shed their debt and resume their high flying lifestyles. In fact the un-indicted Wall Street's "Masters of the Universe" piously extolled the virtues of the free enterprise system---bad mouthed Obama's "socialism" as they held out their hands for their government bailout---corporate welfare. Even more striking, some people actually believe that Trump can lead a nation and that he's some business genius.
Corporations obtain loans based on their assessments on repaying them
and sometimes those don't pan out, yet they get to write off those debts. Clearly, Ms. Kelley should be allowed to do the same. Discharging student loans via bankruptcy is not an impossibility, she just needs to find the right attorney and leverage that reality with her loan companies.
How many student loan companies, or credit card companies have gone bankrupt? Exactly. Losses are part of the student loan business model. This reporter should explore the scale of that reality. Ms. Kelley's case is not the defining example, there are other cases where people can work out a better solution. Obviously, none of these companies owed by Ms. Kelley are going to receive their full payment, so then what? Exactly---another write off.
68
I opposed the Wall Street bailouts, and I oppose bailouts for people like Ms Kelley, too.
9
After stating that less than one percent of borrowers own more than 200k you then tell of the sad saga of a women who owns more than 400k. Obviously this is a rare and unique case involving both bad luck and bad choices. But the answers to improving current student loan issues aren't about the one in 500 or 1000 tragic case. I think it is much more relevant to look at the people who own the median number and see how they are dealing with their debts. The case of Liz Kelley doesn't do that.
176
Such a good point - are there really that few large student loan debts? Isn't it common for debt to top 150K for med and law school? Or pharmacy school?
1
The real story here is the ludicrous law that forbids bankruptcy on student loans. Why? There are hundreds of thousands of (very) educated people who cannot service these debts. If one can go bankrupt on an IRS debt, the same should apply to a student loan.
33
Looks to me that Ms. Kelley was the irresponsible one here.
152
"... who made a series of unremarkable decisions about college and borrowing. She now owes the federal government $410,000 ..."
I don't think the word "unremarkable" means what you think it means.
I don't think the word "unremarkable" means what you think it means.
255
So commenters blame me gleefully for student loans acquired at 24, w No earning history, yet people who decide to have babies and face same unending social and financial burden are not responsible for their decision making? Babies areSO valuable to our 9 billion population mark, I guess..
10
Sorry, NYT. After reading the article, I felt manipulated, not informed or enlightened.
You have a solid story to tell about sloppy lending standards, moral hazard, and taxpayer responsibility. However, embedding it in Ms. Kelleys' tale of extreme financial irresponsibility evokes strong emotions that obscure the real issues you are trying to address.
You have a solid story to tell about sloppy lending standards, moral hazard, and taxpayer responsibility. However, embedding it in Ms. Kelleys' tale of extreme financial irresponsibility evokes strong emotions that obscure the real issues you are trying to address.
331
For loans to students, tight lending standards defeats the purpose of allowing people without money or scholarships the financial means to attend college. The issue is lending limits, the lack of which leads to moral hazard and taxpayer responsibility. Ms. Kelley's story is extreme but it illustrates the risks of insufficient limits in the student loan programs.
9
Lending limits would not have been helpful in this situation. The majority of the outstanding balance is due to interest accrued over 25 years during which zero payments were made.
13
We need to develop a national on-line degree program for the first two years of college leading to a two-year AAS degree. This would be offered on-line to every person in America for free.
This would eliminate student debt for at least two years.
It would allow single working mothers to go to school.
It would lessen the tax burden of every American.
It would lead to a more educated populous.
It would allow displaced workers a cheap was to start retraining.
I have taken free courses through EdX and Coursera taught by some of the best professors in the world. I took them for free. This would be an excellent way for our government to address rising college costs, student loans, and student debt. College would be more approachable for many Americans and, a more flexible schedule would allow far more people to get an education.
When I consider an online degree program offered for free by our government, I start seeing brick and mortar colleges the same way I view corded phones and black and white TV.
This would eliminate student debt for at least two years.
It would allow single working mothers to go to school.
It would lessen the tax burden of every American.
It would lead to a more educated populous.
It would allow displaced workers a cheap was to start retraining.
I have taken free courses through EdX and Coursera taught by some of the best professors in the world. I took them for free. This would be an excellent way for our government to address rising college costs, student loans, and student debt. College would be more approachable for many Americans and, a more flexible schedule would allow far more people to get an education.
When I consider an online degree program offered for free by our government, I start seeing brick and mortar colleges the same way I view corded phones and black and white TV.
21
If you finished those online courses, I congratulate you -- you are among the few who has. While your goal of educating the populace is a worthy one, the reality is that online courses are not a panacea. Many students find them difficult or boring, and miss contact with professors and other students.
Despite the PR put out by companies like Coursera (who are intent on monetizing, not democratizing, education), there's still something about face to face interaction with a trained, experienced teacher and other students in the classroom that many students, especially poor students, need. The "best professors in the world" don't even give feedback in those giant MOOCs -- quizzes are multiple choice and assignments are peer-graded, meaning graded by another student.
And what about a good Internet connection and a personal computer, which quite a few Americans still don't have?
Why don't we just make the first two years of college free for everyone at public colleges and universities? Or better yet, all four years?
I feel sorry for Ms. Kelley. Yes, she admittedly made some bad choices (law school is almost always a bad choice), but the student loan system in the '90s and '00s was extremely complicated and opaque. I don't fault her for being confused about it. I wish her luck in getting out of her situation.
Despite the PR put out by companies like Coursera (who are intent on monetizing, not democratizing, education), there's still something about face to face interaction with a trained, experienced teacher and other students in the classroom that many students, especially poor students, need. The "best professors in the world" don't even give feedback in those giant MOOCs -- quizzes are multiple choice and assignments are peer-graded, meaning graded by another student.
And what about a good Internet connection and a personal computer, which quite a few Americans still don't have?
Why don't we just make the first two years of college free for everyone at public colleges and universities? Or better yet, all four years?
I feel sorry for Ms. Kelley. Yes, she admittedly made some bad choices (law school is almost always a bad choice), but the student loan system in the '90s and '00s was extremely complicated and opaque. I don't fault her for being confused about it. I wish her luck in getting out of her situation.
8
Loans are just that, LOANS- not free money to attend whatever college you want for however long you want. I attended a private college in the 1980's when tuition was still affordable. I borrowed some money, but earned much of my tuition myself. Unless they earn scholarships, my children will attend SUNY or CUNY schools- and their diploma will be as good or better than the one I earned. Not every State has a decent, relatively affordable, University System, I am glad New York does.
16
'Student Debt in America: A Fool And Their Money...'
As long as it does not become the taxpayer's money, this is just another story about someone who borrowed more money than they could afford to repay.
If the taxpayers are on the hook, there will be more and more people like this, as why bother to repay anything?
As long as it does not become the taxpayer's money, this is just another story about someone who borrowed more money than they could afford to repay.
If the taxpayers are on the hook, there will be more and more people like this, as why bother to repay anything?
12
The meanest thing they do, you seem to have overlooked: Other than the federal loan forgiveness for public/nonprofit service; those who make regular payments under the income-based repayment plans for 25 years will face a huge tax burden on the remaining balances. Many of those people will not be making payments sufficient enough to significantly reduce the principal amount, in fact, for many; the payments won't cover the interest. So, their principal amount will go up every year. After 25 years of making payments their loan will be retired, but (and this is a big but) the remaining balance will be treated by the IRS as income in that twenty fifth year. For someone like Ms. Kelley, she could face a tax bill of well over $100,000 if she works in the private sector. And, talk about ruthless bill collectors, the IRS isn't the warm and fuzzy type.
9
There is at least one provision for avoiding the federal income tax on imputed income arising from the cancellation of debt and one such provision is that the amount of debt forgiven is not taxable to the extent the taxpayer is insolvent at the time the debt is cancelled. It is worth noting that one need NOT be "broke" in the traditional sense in order to be technically insolvent. One simply must have more debt (for example, a mortgage) than assets (typically, cash, securities and the value of a home).
2
Still, a very bad position for a professional to be in as they are approaching retirement.
Also, really hard to do estate planning with a spouse who is better off.
Also, really hard to do estate planning with a spouse who is better off.
So neither she or her children had any financial acuity at all? The overburdened student debt is often financial illiteracy on the part of the borrower. Little sympathy here from a family full of college graduates.
29
Nope, no financial acuity. And therefore deserving of your scorn, of course.
14
I have little sympathy for self inflicted wounds.
24
Absolutely - I mean she's a teacher for goodness sakes!
1
With all that expensive education Ms. Kelley still does not understand her options? If she enrolls in Public Service Loan Forgiveness and gets a job in the non-profit world, her payments won't be futile at all. They'll be a tiny fraction of her income for ten years and then poof, her loan will be gone and the taxpayers will bail her out.
To repay a $410,000 loan at 7% in ten years without PSLF would require monthly payments of about $4,750. Ms. Kelley would be required to make far lower payments. Each payment would be the equivalent of $4,750, most of which is ultimately a tax-free gift from the American taxpayer to her. What's futile in that?
Ms. Kelley says "There ought to be a way out". There is. The system does currently have safeguards for catastrophic outcomes like this one. I am sorry it's not perfectly aligned with Ms. Kelley's hopes and dreams and I am sorry Ms. Kelley is so dismissive of an incredible opportunity to get her finances on track in a decade, but it is a realistic solution. There's no tale of woe here.
To repay a $410,000 loan at 7% in ten years without PSLF would require monthly payments of about $4,750. Ms. Kelley would be required to make far lower payments. Each payment would be the equivalent of $4,750, most of which is ultimately a tax-free gift from the American taxpayer to her. What's futile in that?
Ms. Kelley says "There ought to be a way out". There is. The system does currently have safeguards for catastrophic outcomes like this one. I am sorry it's not perfectly aligned with Ms. Kelley's hopes and dreams and I am sorry Ms. Kelley is so dismissive of an incredible opportunity to get her finances on track in a decade, but it is a realistic solution. There's no tale of woe here.
269
Why should student loan forgiveness be considered a "taxpayer gift"? Why is the United States a country that regards an investment in the education of its citizens as money those citizens have somehow sneakily swindled out of their fellow citizens?
24
I fully support loan forgiveness for public school teachers, nurses, primary care doctors who work in inner city and rural community health centers, public defenders, and elder care workers, etc. And I am happy to support it as a taxpayer; taking the financial burden off people who do critical but under-appreciated jobs is in my opinion a fantastic use of public funds. . But in this particular case, it's a gift because Ms. Kelley would much prefer the debt go away magically, without her actually doing the public service. And it's a gift because the taxpayers would be paying upwards of $400,000 for a teacher's education, when it could have been offered much more cost effectively.
41
Fair enough, it's not something to be considered "charity", but the public service forgiveness option is a truly great option. Anyone who can't afford it can go to school and then pay just 10% of their income for 10 years. That is very reasonable if you ask me. There are lots of really great government and non-profit jobs out there. Particularly for individuals married to someone making more money, it's an unbelievable deal!
As someone who faced many of the same hardships of the article's subject (but who borrowed less, mainly due to having attended undergrad at CC and state U and of course before kids), I can't really understand why the article doesn't end, "Thank heaven for this program--without it, I don't know what I'd do."
As someone who faced many of the same hardships of the article's subject (but who borrowed less, mainly due to having attended undergrad at CC and state U and of course before kids), I can't really understand why the article doesn't end, "Thank heaven for this program--without it, I don't know what I'd do."
8
Ms. Kelley is a teacher; she teaches our children. She should have no debt, period. The tenets of the "American Dream" encourages the kind of choices Ms. Kelley made. Until we realize that the "American Dream" is an idea that profits very few--mainly the ones who continue to perpetuate its sentimental hope for a better future--we will continue to lose and lose and lose. Unless one has money to begin with, especially today, we need to understand how much luck and timing has to do with the achievement of any noble goal.
Nurses should be included in the no-debt category..We should not charge people who go to school to serve our children and mend our bodies. That's it.
Nurses should be included in the no-debt category..We should not charge people who go to school to serve our children and mend our bodies. That's it.
17
I tend to agree, up to a point. I think most entry level teaching jobs do not require a master's degree. Making good financial choices should be a requisite for an educator. The "American Dream" is just that, a dream. It does not exist, never has.
There is absolutely nothing wrong with a state school education. Millions of us have been quite successful without an Ivy League diploma (or a master's or PhD).
There is absolutely nothing wrong with a state school education. Millions of us have been quite successful without an Ivy League diploma (or a master's or PhD).
12
To be fair, the careers that could once be had without a master's (teaching) now require one. Those that could be had with a high school diploma are overseas or pay wages that are equivalent to mowing lawns back in the 1950s. Your point is well-taken but people do need an education.
2
Ms. Kelley acted as if her college education was free. She still acts that way in regard to her children's college education. Since she has the escape route of erasing her debts after 10 years of public or nonprofit service with an income based repayment plan I have no sympathy for her, she has the option of being bailed out of her debt - if she takes it.
Clearly the system is broken. I very much appreciate the balanced reporting from the author of this article. My view is that as a society we don't like to impose limits. We don't want to deliver bad news. It is commendable to not hold students back from college due to being poor. However, we pretend that everybody should go to college regardless of their ability. Many students do not receive a good education in elementary and high school but the solution to that should be to improve those schools, not to provide remedial education in college. Currently most jobs do not require a college education and I think that's great. I don't want people to have to go to college just as a screening filter for employers. Going to college for personal fulfillment is fine too but there is a trade off in society for spending more money on education, it means that same money can't be spent on health care or infrastructure, etc. But as a society we all act like Ms. Kelley, we act as if what we want is free.
Clearly the system is broken. I very much appreciate the balanced reporting from the author of this article. My view is that as a society we don't like to impose limits. We don't want to deliver bad news. It is commendable to not hold students back from college due to being poor. However, we pretend that everybody should go to college regardless of their ability. Many students do not receive a good education in elementary and high school but the solution to that should be to improve those schools, not to provide remedial education in college. Currently most jobs do not require a college education and I think that's great. I don't want people to have to go to college just as a screening filter for employers. Going to college for personal fulfillment is fine too but there is a trade off in society for spending more money on education, it means that same money can't be spent on health care or infrastructure, etc. But as a society we all act like Ms. Kelley, we act as if what we want is free.
21
Charles, in a short post you described the fallacy of today's college education. In the 70's, a college degree led to a better job and higher wages..in this day it isn't a given (with notable exceptions).
12
Individuals who are not capable of life planning should not be enabled by government to dig into this unnaturally large amount of debt. A federal loan forgiveness program burdens other people with the mistake, it does not erase the mistake. The "magic loan" policy itself is a mistake.
38
Why did the loan companies continue to give her loans when she had never paid the first loans off....? Don't they perform credit checks before they grant loans...?
1
Most people simply don't benefit from spending as much time in the educational system as this woman spent. Colleges should know this, and they would act on it properly if they had to bear a share of the loan losses incurred on people who wasted so much time on repetitive and ill-suited courses and degrees. Each college should bear 50% of the loan losses on college loans past the first 10% of principal. This would make them more responsible in extending or suggesting loans.
26
Your point is a great one.
If the bursar at any college had some skin in the game - even a small commitment (7-10%?) - I doubt they'd be interested in students that linger for more than 8yrs in any program. The schools themselves are complicit.
If the bursar at any college had some skin in the game - even a small commitment (7-10%?) - I doubt they'd be interested in students that linger for more than 8yrs in any program. The schools themselves are complicit.
8
I graduated with 25K in student loans and 8K in credit card, for the first two years I lived with 2 roommates in NYC paying 20% of my after paid income in housing, eating home cooked pasta almost every night, and paid off all my student loans in two years. I decided to attend graduate school while working, paid wholy by my employer, instead of attended an Ivy which accepted me. Only regret was that I should NOT have paid off my student loans that fast, I should have used the money to buy an apartment, in NYC. Ms Kelly was living off the student loans and where was her sense of financial planning?
22
Soon after I graduated from law school, overheard lawyers at the firm and one was still paying his loans. The other lawyer told him he could've paid his loans off years ago, but the first one replied, why should I? I agree that there is a sweet spot in paying student loans back too quickly vs the value of using that cash for investing. But there's a difference between not paying too quickly and just not paying.
2
This is a repeat of the housing "boom"; people spending money to support a lifestyle or ambition that they will not ever be able to afford.
It amazes me that this teacher has so little self reflection that she would allow herself to profiled by the Times.
It amazes me that this teacher has so little self reflection that she would allow herself to profiled by the Times.
123
Perhaps she did it as a service and cautionary tale for the rest of us, did you consider that?
9
I think she was indeed clueless and agreed to be profiled by the NYT to garner public sympathy, hoping that it will lead to forgiveness of her student debt.
2
We as a society benefit when all potentially productive people have the opportunity to realize their potential through training and education, rather than as a result of the fate and family wealth. Since we do not have adequate programs of providing direct financial help to students (Pell programs and the like have been reduced), our national response has been to create easy access to cash loans to finance education.
This gives lip service to a meritocratic system for educational opportunity (anyone who qualifies for education can get it regardless of household wealth), yet is a greater benefit to the other stakeholders: The US gov't and financial servicing organizations make a profit on this scheme (another poster has added a link), and educational institutions get to cast a wider net for potential students.
In an environment where an undergraduate degree is perceived as the minimum entry requirement for a middle-class life, what rational person who needs student loans not take them?
This is why making student loans based on risk is a repugnant response. In order to screen out those who may end up with huge amounts of unrepayable debt, we remove the opportunity to attend college for many others since as a nation we decided to build a system that converted grants to loans, and is rigged to take all risk from the various institutional players and place it on individual students and families.
Plus we get to call those who default deadbeats.
This gives lip service to a meritocratic system for educational opportunity (anyone who qualifies for education can get it regardless of household wealth), yet is a greater benefit to the other stakeholders: The US gov't and financial servicing organizations make a profit on this scheme (another poster has added a link), and educational institutions get to cast a wider net for potential students.
In an environment where an undergraduate degree is perceived as the minimum entry requirement for a middle-class life, what rational person who needs student loans not take them?
This is why making student loans based on risk is a repugnant response. In order to screen out those who may end up with huge amounts of unrepayable debt, we remove the opportunity to attend college for many others since as a nation we decided to build a system that converted grants to loans, and is rigged to take all risk from the various institutional players and place it on individual students and families.
Plus we get to call those who default deadbeats.
13
How could someone ever expect to pay back this amount of debt? Poor decision making. I borrowed almost 100k for law school and paid more than $1500 a month to get it paid off. I have little sympathy for those who borrow in excess and then think the government (i.e. the taxpayers) should pay their debts for them.
59
She borrowed the principle. Most of it is interest.
2
I feel badly for Ms. Kelley. She should not have been allowed to continue to borrow for her graduate education given the interest rate on her earlier loans. Our student loan programs, a mix of public and private enterprises that encourage over-borrowing, are a travesty. That said, how can a college-educated woman with four children make such a poor decision by loading on more debt to increase her salary by an amount that will not meet the interest payments on existing loans? We need two things: a high school course that teaches basic personal finance issues and better regulation of the student loan industry. Predator lenders and for-profit "universities" make me sick to my stomach.
27
I have been told that the only area of our economy whose cost is growing faster than health care is ... post-secondary education.
Because so much education in the US is paid for by 3rd parties via loans, students are insulated from the cost of their educations. As a consequence, there is little incentive for colleges and universities to hold down costs.
We see this pattern repeated in other areas of our economy. During the housing boom, loans were easy to come by, and housing prices sky-rocketed.
In health care, 3rd party payers (insurers and the government) partially insulate the consumer from making price-based health care decisions. As a consequence, there is a reduced incentive to hold down costs and health care costs skyrocket.
Our government is horrid at managing risk. Private investors are much better. A private investor would not invest tens of thousands of dollars in a student studying English. Said investor would, however, be willing to invest $100k in a nursing or engineering major.
Because so much education in the US is paid for by 3rd parties via loans, students are insulated from the cost of their educations. As a consequence, there is little incentive for colleges and universities to hold down costs.
We see this pattern repeated in other areas of our economy. During the housing boom, loans were easy to come by, and housing prices sky-rocketed.
In health care, 3rd party payers (insurers and the government) partially insulate the consumer from making price-based health care decisions. As a consequence, there is a reduced incentive to hold down costs and health care costs skyrocket.
Our government is horrid at managing risk. Private investors are much better. A private investor would not invest tens of thousands of dollars in a student studying English. Said investor would, however, be willing to invest $100k in a nursing or engineering major.
7
Private investors are much better? Have you already forgotten about 2008 when so-called private investors took risks that were off the chart? I would suggest you also take a look at what the private colleges are doing and how they are dealing with student loan risk. They are not and student loan defaults are substantially higher than mainstream schools.
13
And have you forgotten Fannie Mae and Freddie Mac, the two GSEs the federal government was going to privatize because they required a $150 billion taxpayer bailout? (Since then, these GSEs have repaid their loans, and then some, at the expense of their shareholders' dividends. They remain under federal conservatorship, and are expected to experience further financial troubles.)
As an example of poor government risk-taking, I offer you Solyndra, the solar cell company. They could not obtain private investor backing, as private investors judged the risk too great, so they obtained $536 million from the federal government (and an additional $25 million from the State of California). Then they declared bankruptcy.
The federal government expects to recoup about $27 million of the $536 million loaned.
The private investors were right, once again.
As an example of poor government risk-taking, I offer you Solyndra, the solar cell company. They could not obtain private investor backing, as private investors judged the risk too great, so they obtained $536 million from the federal government (and an additional $25 million from the State of California). Then they declared bankruptcy.
The federal government expects to recoup about $27 million of the $536 million loaned.
The private investors were right, once again.
There were plenty of private investors that walked on their debts during the 2007/2008 financial crisis. Bear Stearns was one of them as was many real estate so-called "investors"! And before that we had Enron who stiffed every employee that earned a pension from them. And how about Arthur Anderson? Remember them? One of the Big Eight International accounting firms that folded and filed bankruptcy. So let us not pretend that taxpayers are bad and investors are good.
7
Lending once entailed an equal responsibility of lender and borrower. With the exception of the banks which taxpayers bailed out, most of the time borrowers are held guilty if they cannot repay. This is foolish and new. Banks are businesses investing with hopes of a return that is profitable. They are rewarded for the risk they took in lending, right? When a business risk fails, they loose, right? But students are uniquely discriminated against, and cannot seek protection under bankruptcy. They are castigated for profiligacy by propagandists who overlook the perennial bankruptcies of businesses for example: airlines.
Students are bad risks. They attend colleges that cost more than the career that they are pursuing with no thought to repayment. They attend expensive private colleges without knowing what they want to do. They are adolescents. They have little preparation for borrowing.
The Federal government is acting like a predator bank, and risking future income by failing to act responsibly. Student loans should be written off, forgiven. The lending agent was the bad actor. The borrower was not vetted, not qualified, and deceived. America, the IMF, banks have a long history of forgiving debt, renegotiating debt, writing debt down. It must relieve everyone of this debt. It must also reform its lending practices, stop lending to students who don't know what they are borrowing for, attend costly schools, or have poor grades. Those forgiven debt must go through bankruptcy.
Students are bad risks. They attend colleges that cost more than the career that they are pursuing with no thought to repayment. They attend expensive private colleges without knowing what they want to do. They are adolescents. They have little preparation for borrowing.
The Federal government is acting like a predator bank, and risking future income by failing to act responsibly. Student loans should be written off, forgiven. The lending agent was the bad actor. The borrower was not vetted, not qualified, and deceived. America, the IMF, banks have a long history of forgiving debt, renegotiating debt, writing debt down. It must relieve everyone of this debt. It must also reform its lending practices, stop lending to students who don't know what they are borrowing for, attend costly schools, or have poor grades. Those forgiven debt must go through bankruptcy.
12
"She had taken out her first student loan 25 years earlier and had yet to make a single payment."
Sorry, this is where I have to bow out of any sympathy for Ms. Kelley. Anyone can make a bad decision or run into back luck, but the decisions here are not only bad in compound form, they describe someone who took every available loan and then actively sought ways to avoid payment--for 25 years. I took out loans for both undergraduate and graduate school, and my spouse borrowed for graduate school. In addition to making payments through very lean times, every time we got a little extra money, we used it to pay down our collective loans, and eventually they were all paid. It can be done, but actively avoiding your debts for 25 years sure doesn't get you there--quite the opposite.
Sorry, this is where I have to bow out of any sympathy for Ms. Kelley. Anyone can make a bad decision or run into back luck, but the decisions here are not only bad in compound form, they describe someone who took every available loan and then actively sought ways to avoid payment--for 25 years. I took out loans for both undergraduate and graduate school, and my spouse borrowed for graduate school. In addition to making payments through very lean times, every time we got a little extra money, we used it to pay down our collective loans, and eventually they were all paid. It can be done, but actively avoiding your debts for 25 years sure doesn't get you there--quite the opposite.
331
The story is not here to elicit your sympathy. It's here to inform you about the consequences of policies implemented by the society of which you are a part.
19
The student loan program is a way to steal millions and ultimately billions of dollars from the American taxpayer. We are on the line for those privately funded, federally guaranteed loans that have a pretty sweet escape clause for the borrower. It is crazy to imagine that within this system, no risk assessment of credit worthiness is performed and loans essentially cannot be denied.
As for Ms. Kelley, it is hard to really feel sorry for a mature woman with grown children, some real hard life experience about money continually lining up at the altar of the student loan all the while clueless about how much money she already owed and what her real earning potential is.
As for Ms. Kelley, it is hard to really feel sorry for a mature woman with grown children, some real hard life experience about money continually lining up at the altar of the student loan all the while clueless about how much money she already owed and what her real earning potential is.
25
The default rate is 4-5% and the profit from student loans last year was about 45 billion dollars.
17
Ms. Kelley's story reveals contradictions in our American society. On one hand we are individualists, taught that our choices make us who we are. To that, Ms. Kelley made choices which resulted in huge debts. On the other hand, Americans are egalitarian. Why does Ms. Kelley not deserve the same education as a wealthy trust fund kid? Because she didn't have parents that could afford to pay for her education while she focused on studies rather than working? Too much of our lives are bound up in how much wealth our parents have for any story about the morality of debt to make sense.
24
You hit the nail on the head. If Ms. Kelley were rich, all the unwise decisions in the world wouldn't have gotten her into this hole. But because she wasn't rich and she borrowed from the government, everyone gets to sit around and cluck-cluck and tut-tut about how foolish she is and how terrible it is for taxpayers to fund this kind of foolishness. Why don't we try a different approach: making college free for everyone who qualifies and sincerely wants to go? If we can't do that, can we at least make it free for everyone who at least has a plan to serve the public?
18
Bingo. Shows us that the people running the country really do put their trust in their God: money.
4
Students of any age need to remember that the Federal government is a huge set of bureaucracies which have a long reach into your life. Once your Federal student loans are reported to the Social Security administration, your future social security payouts can and will be garnished at a 15% rate. You will have a difficult time reversing such actions, too. And, because Social Security was never intended to be a complete retirement plan, an already small sum, gets even smaller.
I wish we had more and easier ways to pay for higher education, such as public service options which would forgive the loans once the service was completed. There are a few of these programs now, but there should be more of them, for all sorts of degree programs.
9
The problem with reporting a story such as Ms. Kelley's is that it mostly succeeds in stirring indignation about education loans (how could she be allowed to do such a thing?) when in fact she represents less than 1% of student borrowers. Most of those in hock are like my daughter, who works and pays her loans but is left hard-pressed to invest in a home, or in savings, or any else of what supposedly constitutes a middle-class lifestyle. Millions of young people are being very badly served --- and indeed, damaged --- by education policy in the USA. If we want to be sane about it, we should extend tuition-free education past high school through university, with appropriate controls on how long & how much that education is available.
246
To add to the same thought: I don't know if we've come to grips yet with the drag a generation of younger adults with significant student debt creates on our economy. The average debt burden is about $30,000. That's about $300 in monthly payments. -- $300 that isn't getting spent on a house, a car, a restaurant, retail, anything that keeps money circulating. That's bad for everyone, particularly in concert with wage stagnation, and it's one reason why this is everyone's problem.
36
$300 a month on education is worth much more than that spent on cars, restaurants and retail.
2
Thank you for your comment --- I wish that had been mentioned in this article instead of the statement that most students enjoy the fruits of their degrees. I have a bachelors in a science field and worked between 2000 and 2010 in that field while trying to pay the loans. I have never lived extravagantly nor have I ever been able to just enjoy some disposable income because all extra money went to the loan. If I ever had any hardship -- which I did --I was screwed as far as the loan was concerned. I had a low average salary -- barely 30,000 - which would have been more than enough to live on -- but with the loan payment was too difficult. I have been driving the same car for 16 years luckily, it is a 20 yr old car. I am a nurse now -- more education debt -- as continuing on that path of low salary and not being able to pay was not a future I wanted.
The 28,000 for the bachelor degree has had about 16,000 in interest added to it and now I have about 20,000 for the nursing degree added to that. I have just started working as a new nurse a few months ago and hope to be able to afford higher payments but it is frustrating that my credit score and ability to purchase a house or car or really anything is affected by loans, so even though I have a good job and no kids!!!!!! I have debt that is adversely affecting my life
The 28,000 for the bachelor degree has had about 16,000 in interest added to it and now I have about 20,000 for the nursing degree added to that. I have just started working as a new nurse a few months ago and hope to be able to afford higher payments but it is frustrating that my credit score and ability to purchase a house or car or really anything is affected by loans, so even though I have a good job and no kids!!!!!! I have debt that is adversely affecting my life
3
A private college, really? Master's degree? Borrowing money for child care? Granted the loan system is a joke, but what was she thinking? Sounds like another bail out of irresponsible people. No wonder we have a deficit of good educators.
126
What kind of insane lending program does not take risk into account, at ANY time? That makes no sense. At some point, Ms. Kelley became a risk. A very bad risk. But the money continue to be lent to her. This practice has to stop.
But there is plenty of blame to go around, from the Federal government, to the private lenders who lend money knowing the person usually cannot have it discharged in bankruptcy, to the borrowers themselves. I am sure a lot of commenters will bash Ms. Kelley for getting herself into financial trouble and in this case, I am inclined to agree that somewhere along the line, she needed to step back and assess the situation. She hadn't made a payment in 25 years? She didn't know what the balance was? That is simply irresponsible. But the student loan program is culpable, too, for not taking such obvious risk into account.
"Ms. Kelley has one possible escape route: a federal loan forgiveness program that caps her payments as a percentage of her income and erases her debts if she logs 10 years of service in the public or nonprofit sector.... But that would still mean a decade of what she describes as 'futile' payments that won’t even cover her monthly interest expenses, leaving nothing to put away for retirement." I'm sorry, but here is where my sympathy has its limits. There IS an "escape route". And if it means she is unable to save during those 10 years, I have a hard time feeling sorry for her. Many serial bad choices have led to a bad outcome.
But there is plenty of blame to go around, from the Federal government, to the private lenders who lend money knowing the person usually cannot have it discharged in bankruptcy, to the borrowers themselves. I am sure a lot of commenters will bash Ms. Kelley for getting herself into financial trouble and in this case, I am inclined to agree that somewhere along the line, she needed to step back and assess the situation. She hadn't made a payment in 25 years? She didn't know what the balance was? That is simply irresponsible. But the student loan program is culpable, too, for not taking such obvious risk into account.
"Ms. Kelley has one possible escape route: a federal loan forgiveness program that caps her payments as a percentage of her income and erases her debts if she logs 10 years of service in the public or nonprofit sector.... But that would still mean a decade of what she describes as 'futile' payments that won’t even cover her monthly interest expenses, leaving nothing to put away for retirement." I'm sorry, but here is where my sympathy has its limits. There IS an "escape route". And if it means she is unable to save during those 10 years, I have a hard time feeling sorry for her. Many serial bad choices have led to a bad outcome.
89
(1) DO NOT have more kids than you can afford to support if something happens to your spouse.
(2) Not working until in her early 30s? Bad decision.
(3) Now the real problem is NOT that the Federal government does student loans. The problem is private loans, not Fed.
(a) At the undergraduate level, the Fed amount that can be borrowed has 2 caps: (i) no more than a certain amount based upon year in school (freshman less than seniors) & (ii) no more than a certain total for ALL of undergrad. ($31,000 if a dependent & $57,500 if older & independent.)
(b) For graduate school, there are still limits -- $20,500 a year.
(c) There are limits on the TOTAL for all education of not more than $138,500 for an independent adult.
She could NOT borrow unlimited amounts from the Feds.
When she was in school in the 1990s & early 2000s, she COULD borrow directly from banks as PRIVATE loans.
It isn't the fault of the Fed student loan program that she got unlimited money - guarantee there are some private bank loans in there
(4) For the regular kinda' nonsense, commenters spew:
* Before there were federal student loans (& the GI bill post WWII) only those from the top 10% of households could afford college. No Fed student loans, no college for 90%.
* The usual shriek of "go to community college & then state university"
Community or state colleges are not always within driving distance for even 19 year olds - let alone adults with families.
(2) Not working until in her early 30s? Bad decision.
(3) Now the real problem is NOT that the Federal government does student loans. The problem is private loans, not Fed.
(a) At the undergraduate level, the Fed amount that can be borrowed has 2 caps: (i) no more than a certain amount based upon year in school (freshman less than seniors) & (ii) no more than a certain total for ALL of undergrad. ($31,000 if a dependent & $57,500 if older & independent.)
(b) For graduate school, there are still limits -- $20,500 a year.
(c) There are limits on the TOTAL for all education of not more than $138,500 for an independent adult.
She could NOT borrow unlimited amounts from the Feds.
When she was in school in the 1990s & early 2000s, she COULD borrow directly from banks as PRIVATE loans.
It isn't the fault of the Fed student loan program that she got unlimited money - guarantee there are some private bank loans in there
(4) For the regular kinda' nonsense, commenters spew:
* Before there were federal student loans (& the GI bill post WWII) only those from the top 10% of households could afford college. No Fed student loans, no college for 90%.
* The usual shriek of "go to community college & then state university"
Community or state colleges are not always within driving distance for even 19 year olds - let alone adults with families.
8
"The usual shriek of 'go to community college & then state university'"
I did a simple search that took less than 10 minutes. Ms. Kelley had the option of going to 2 different community colleges, both within 15 miles / 15 minutes of the school she attended. She could have then transferred to 1 of 2 4-yr state schools: Harris Strowe State (17 miles from her private school) or U Missouri-St. Louis (18 miles from her private school).
The argument that community / state colleges are not always within driving distance is fine for people who live in remote areas. Not fine for someone going to school in St. Louis. It's a red herring argument for people who choose not to take responsibility for their actions.
I did a simple search that took less than 10 minutes. Ms. Kelley had the option of going to 2 different community colleges, both within 15 miles / 15 minutes of the school she attended. She could have then transferred to 1 of 2 4-yr state schools: Harris Strowe State (17 miles from her private school) or U Missouri-St. Louis (18 miles from her private school).
The argument that community / state colleges are not always within driving distance is fine for people who live in remote areas. Not fine for someone going to school in St. Louis. It's a red herring argument for people who choose not to take responsibility for their actions.
111
At the time Ms. Kelley began her post secondary odyssey, the local public colleges might not have offered programming for non-traditional students. While I cannot speak for the St. Louis region, in Central Texas at that time the only options for non-traditional students were the private colleges. Programming for non-traditional students at the local public universities is a very recent development.
6
"DO NOT have more kids than you can afford to support if something happens to your spouse."
That is a terrible idea. Nobody can really afford children all on their own at all except the exceptionally wealthy.
Moreover, almost nobody can afford to have children between 18 and 30 which are most women's healthiest childbearing years.
The idea that you can't have children until you are 100% sure you can provide for them, all alone, for a full 18 years--that's insane. It's insane because nobody ever knows what will happen for the next 18 years. They can only be sure that things worked out when they were well, well beyond childbearing age.
As for me, I worked like heck until my first child, had a career, a salary well above the median, was in management, and had great maternity leave, and was married.
Can I just say... I didn't exactly choose my three-year-old's college fund to go to $0 within three months. I didn't choose for my now ex-husband to leave. I didn't choose for my job to turn into a non-job. Not all while pregnant with my 2nd, with over $50,000 in the bank, plus college savings.
Well, that's what happened. And three years later of working here and there and trying to make things work, I was back with student debt again.
I did 100% of the things you are suggesting. It did not "work".
Society has to be able to deal with the fact that nobody can control everything.
(I do agree that CC or at least State U should be the only options for federal loans.)
That is a terrible idea. Nobody can really afford children all on their own at all except the exceptionally wealthy.
Moreover, almost nobody can afford to have children between 18 and 30 which are most women's healthiest childbearing years.
The idea that you can't have children until you are 100% sure you can provide for them, all alone, for a full 18 years--that's insane. It's insane because nobody ever knows what will happen for the next 18 years. They can only be sure that things worked out when they were well, well beyond childbearing age.
As for me, I worked like heck until my first child, had a career, a salary well above the median, was in management, and had great maternity leave, and was married.
Can I just say... I didn't exactly choose my three-year-old's college fund to go to $0 within three months. I didn't choose for my now ex-husband to leave. I didn't choose for my job to turn into a non-job. Not all while pregnant with my 2nd, with over $50,000 in the bank, plus college savings.
Well, that's what happened. And three years later of working here and there and trying to make things work, I was back with student debt again.
I did 100% of the things you are suggesting. It did not "work".
Society has to be able to deal with the fact that nobody can control everything.
(I do agree that CC or at least State U should be the only options for federal loans.)
5
Please tell me that Ms. Kelley does not teach math!
Her story is ridiculous. Anyone with a shred of sense would have stopped borrowing say, $350k earlier. Her behavior is like that of a gambling addict, who keeps thinking that *one more* round at the blackjack table and all the losses will be erased.
The conspiracy theorist in me thinks that our government refuses to teach personal finance in schools and encourages profligate reproduction in order to keep people on the hamster wheel. An indebted society is one that is too tired and powerless to do big things and make real change happen.
Her story is ridiculous. Anyone with a shred of sense would have stopped borrowing say, $350k earlier. Her behavior is like that of a gambling addict, who keeps thinking that *one more* round at the blackjack table and all the losses will be erased.
The conspiracy theorist in me thinks that our government refuses to teach personal finance in schools and encourages profligate reproduction in order to keep people on the hamster wheel. An indebted society is one that is too tired and powerless to do big things and make real change happen.
120
Her story IS ridiculous. That's the point.
Your second paragraph is not too far off, except for the part about being a conspiracy theorist in order to believe it. It's not just the government but the society as a whole, of which government is just one tool the society uses to achieve its ends.
Your second paragraph is not too far off, except for the part about being a conspiracy theorist in order to believe it. It's not just the government but the society as a whole, of which government is just one tool the society uses to achieve its ends.
6
This woman did suffer some bad luck. However, her behavior over twenty five years makes Mr. Micawber look like a paragon of financial management. An English teacher should know her Dickens.
31
I know it's just a drop in the bucket of Ms. Kelley's misery, but I'm especially angered by one detail of her debt: that between herself and her now ex-husband, she was the only one paying for child care. Both parents should have. But it sounds as if she allowed herself to be guilted into paying solo, because she was the mom. Absurd.
A few years ago I decided to go back into debt for a degree so I could change careers. Getting the loans was easy. But because nothing comes that easily without a catch, I did it with the plan to pursue professional licensure in a high-demand field, get a public-service job, enroll in income-based repayment, and stay in public service 10 years. I would not borrow for longer than 3 years, gut my retirement fund (I did dip into it, but only to a small extent), go into a field lacking plentiful jobs or health/retirement benefits, or defer repayments for a longer time. I also don't have kids--so I didn't need to borrow for them.
Had this not been something I thought doable, I wouldn't have done it. But I am well aware of how lucky I am that I could. One gamble: that I will not become physically/mentally incapacitated beyond what my employer insurance will cover. In America, government healthcare is socialism, y'know.
Ms. Kelley may not have made all the smartest decisions, but people shouldn't have to make nothing but smart decisions all the time just to keep their heads above water. And some of it was just bad luck. I hope she can get relief.
A few years ago I decided to go back into debt for a degree so I could change careers. Getting the loans was easy. But because nothing comes that easily without a catch, I did it with the plan to pursue professional licensure in a high-demand field, get a public-service job, enroll in income-based repayment, and stay in public service 10 years. I would not borrow for longer than 3 years, gut my retirement fund (I did dip into it, but only to a small extent), go into a field lacking plentiful jobs or health/retirement benefits, or defer repayments for a longer time. I also don't have kids--so I didn't need to borrow for them.
Had this not been something I thought doable, I wouldn't have done it. But I am well aware of how lucky I am that I could. One gamble: that I will not become physically/mentally incapacitated beyond what my employer insurance will cover. In America, government healthcare is socialism, y'know.
Ms. Kelley may not have made all the smartest decisions, but people shouldn't have to make nothing but smart decisions all the time just to keep their heads above water. And some of it was just bad luck. I hope she can get relief.
22
The desire of the federal government to promote post secondary education for all has disturbing parallels with its policy to promote home-ownership for all. We all know how the latter turned out.
38
"If you had loans prior to this date, then 15% of your discretionary income is used to calculate your payment. This is the amount of income you earn over 150% of the federal poverty line for your family size."
Alone, Ms. Kelley would have the first 16k of her salary exempted from the 15%. If the difference were, say, 50k (although, at a parochial school, probably much less), the annual amount is now 7.5k which is $625 dollars a month, much better than, almost $2,800 hundred a month, no?
Summer school at a well paying public high school pays 6k for the whole summer and they hire teachers from all over (speaking from experience). That amount covers an entire year of payments (only one possible solution, of course). Now retirement savings are possible.
After 10 years, the debt goes away FOREVER! Which is why I do not understand this: "But that would still mean a decade of what she describes as “futile” payments that won’t even cover her monthly interest..."
"FUTILE"? I would call it a blessing from on high.
To admit to bad choices and get this deal is fair and just and offers a legitimate way out.
Of course, there are a lot of jobs in the American international school market. Many pay well, and Uncle Sam can't garnish money paid by the American School of Bangkok.
Good luck.
Alone, Ms. Kelley would have the first 16k of her salary exempted from the 15%. If the difference were, say, 50k (although, at a parochial school, probably much less), the annual amount is now 7.5k which is $625 dollars a month, much better than, almost $2,800 hundred a month, no?
Summer school at a well paying public high school pays 6k for the whole summer and they hire teachers from all over (speaking from experience). That amount covers an entire year of payments (only one possible solution, of course). Now retirement savings are possible.
After 10 years, the debt goes away FOREVER! Which is why I do not understand this: "But that would still mean a decade of what she describes as “futile” payments that won’t even cover her monthly interest..."
"FUTILE"? I would call it a blessing from on high.
To admit to bad choices and get this deal is fair and just and offers a legitimate way out.
Of course, there are a lot of jobs in the American international school market. Many pay well, and Uncle Sam can't garnish money paid by the American School of Bangkok.
Good luck.
35
Jack, the Public Service Loan Forgiveness program only works if you:
Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Secondly she doesn't qualify for this because she's probably been in either deferment, forbearance, or default.
More info here: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public...
The problem is that she is 48 years old and 10 years of only making loan payments with no money left over for retirement is another high-risk gamble. She'd have to start saving for retirement at age 58 and basically live hand-to mouth and work until she drops dead or becomes so disabled that she will inevitably need welfare etc. Or move overseas, as you've suggested and that's another gamble with someone with autoimmune disease like her.
Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Secondly she doesn't qualify for this because she's probably been in either deferment, forbearance, or default.
More info here: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public...
The problem is that she is 48 years old and 10 years of only making loan payments with no money left over for retirement is another high-risk gamble. She'd have to start saving for retirement at age 58 and basically live hand-to mouth and work until she drops dead or becomes so disabled that she will inevitably need welfare etc. Or move overseas, as you've suggested and that's another gamble with someone with autoimmune disease like her.
4
Those jobs abroad in the international school system are incredibly hard to get.
Negatory.
US citizens working outside the US are still subject to US income tax filing and payment.
Even in Bangkok.
US citizens working outside the US are still subject to US income tax filing and payment.
Even in Bangkok.
1
This nation threw money at private contractors in the Middle East conflict regions for years now (with little or no progress) but some readers would begrudge financial support for education of American families, especially for woman willing to occupy the thankless and underpaid profession of teaching our children...
59
In NYC, the average teacher salary is $80K, not shabby even in this city, especially with platinum benefits worth the same or more.
People can choose their careers before they go to college and they can research the pay scale on the internet.
Or just keep borrowing money and hoping for the best.
Which has the better outcome?
People can choose their careers before they go to college and they can research the pay scale on the internet.
Or just keep borrowing money and hoping for the best.
Which has the better outcome?
5
A solution with many useful impacts is to make colleges have real skin in the game by creating college owned banks.
College owned banks would do the student loans and also be the collectors. College ownership of the debt and revenue would change the equation greatly, since then the colleges would be very interested in the ability of the students to repay, which includes the graduate's ability to acquire jobs which generate enough salary to repay the loans.
This college ownership of the debt would incentivize colleges keep their operating costs in line, avoid unrealistic promises, keep an eye on graduation rates and watch student performance well after graduation.
States and the federal government could be underwriters of the college banks to the extent that they provide initial capital, and perhaps act as insurers - which would make them into auditors, also a good thing.
College to college competition in the lending would also be a good thing, as it should help colleges clarify their strengths and help students better understand their options and their commitments.
It well might be that smaller colleges would band together to form consolidated banks, but that would not detract from the goal of making the colleges and their students each share in the loan and repayment process and its long term outcomes, as well as the effort to keep costs under control.
Skin in the game, for bot college and student!
College owned banks would do the student loans and also be the collectors. College ownership of the debt and revenue would change the equation greatly, since then the colleges would be very interested in the ability of the students to repay, which includes the graduate's ability to acquire jobs which generate enough salary to repay the loans.
This college ownership of the debt would incentivize colleges keep their operating costs in line, avoid unrealistic promises, keep an eye on graduation rates and watch student performance well after graduation.
States and the federal government could be underwriters of the college banks to the extent that they provide initial capital, and perhaps act as insurers - which would make them into auditors, also a good thing.
College to college competition in the lending would also be a good thing, as it should help colleges clarify their strengths and help students better understand their options and their commitments.
It well might be that smaller colleges would band together to form consolidated banks, but that would not detract from the goal of making the colleges and their students each share in the loan and repayment process and its long term outcomes, as well as the effort to keep costs under control.
Skin in the game, for bot college and student!
11
I can drum up sympathy for a person who brings ONE child into the world + saves for college + saves for medical and other emergencies + child enrolls in a reasonably priced state school, graduating with a modest amount of debt.
My level of sympathy dwindles as: Person brings into the world TWO, THREE and then FOUR children + such that saving for college/medical/other emergencies is impossible + saving for retirement is impossible + children enroll in expensive schools requiring huge amounts of debt + parent has low paying job/career + parent has unstable marriage such that there is not another income to pay for all of this.
And then my sympathy dwindles significantly further when that person seems to want my sympathy by allowing him/herself to be profiled in the New York Times for worldwide readership.
Decisions to bring multiple children into the world should not be taken lightly. Deciding to enroll in expensive colleges, requiring huge amounts of debt, should not be taken lightly either.
The victims in this story are the taxpayers who will likely be on the hook for this $410,000 (and growing) debt. I have some sympathy for Ms. Kelley’s children too in terms of this debt load they face. But Ms. Kelley… upon deciding to bring lives into the world could/should have foreseen these costs—pretty much all of these costs.
My level of sympathy dwindles as: Person brings into the world TWO, THREE and then FOUR children + such that saving for college/medical/other emergencies is impossible + saving for retirement is impossible + children enroll in expensive schools requiring huge amounts of debt + parent has low paying job/career + parent has unstable marriage such that there is not another income to pay for all of this.
And then my sympathy dwindles significantly further when that person seems to want my sympathy by allowing him/herself to be profiled in the New York Times for worldwide readership.
Decisions to bring multiple children into the world should not be taken lightly. Deciding to enroll in expensive colleges, requiring huge amounts of debt, should not be taken lightly either.
The victims in this story are the taxpayers who will likely be on the hook for this $410,000 (and growing) debt. I have some sympathy for Ms. Kelley’s children too in terms of this debt load they face. But Ms. Kelley… upon deciding to bring lives into the world could/should have foreseen these costs—pretty much all of these costs.
211
She made some poor decisions but the U.S. and individuals would greatly benefit from the tuition-free public college policy that Bernie Sanders has proposed. Perhaps that policy could be limited to one four-year degree.
6
@KP. And the "tuition-free public college policy that Bernie Sanders has proposed" would be paid for how? I like getting "free stuff" too but when you grow up and become an adult, you realize that someone has to pay for that "free stuff." Do you want to add a voluntary tax contribution to the government for April 15, 2016 to pay for my children to go to college? I'll tell you up front that I don't want to make such a voluntary contribution to pay college tuition for your kids. You didn't tell me to have my kids and I didn't tell you to have yours. It's called personal responsibility.
12
You don't have to have children to benefit from an affordable education system. You do realize that today's children will be tomorrow's adults, right? They'll be voting, running for office, and making choices that matter. I'd like them to be educated.
13
Sorry for the rant, but give me a break! Ms. Kelley was an adult who should have known better. How about community college / 4-yr directional school instead of private college? When she finally decided to go into teaching, why did she need grad school, and a PhD program? And why did she not fight in the courts to have her husband pick up half of the child care debt?
It's frightening that 1) she's teaching the youth of our country when she doesn't understand how simple principle / interest calculations work; and 2) she's perpetuating the same problem with her children. Parent Plus loan? Uh, no. Community college / state school.
And, by the way, nice big kitchen with stainless steel appliances and granite countertops.
It's frightening that 1) she's teaching the youth of our country when she doesn't understand how simple principle / interest calculations work; and 2) she's perpetuating the same problem with her children. Parent Plus loan? Uh, no. Community college / state school.
And, by the way, nice big kitchen with stainless steel appliances and granite countertops.
309
(1) You do not no if that is her kitchen or her sisters. Stupid assumption
BTW good luck getting any appliances that are not that tacky stainless metal stuff.
Odds are if it is her home, it is rented with the foreclosure out there and the huge student loan debt.
(2) I checked on her college options -did you?
There are NO public universities near St Louis within commute distance.
Choice was
* abandon the family for 2 years and go off to college for the BA several hours away
* do one of those low-rent online things from some more expensive private 'college" that employers laugh at.
* not get a BA
ANd yeah, to get the most salary possible, a teacher needs a Masters and to go into the higher paying administration, a PhD
PS:: Never heard of a 4 year "directional" school -despite my holding a doctorate. There are 4 year colleges. There are 4 year universities. Directional? LOL!
BTW good luck getting any appliances that are not that tacky stainless metal stuff.
Odds are if it is her home, it is rented with the foreclosure out there and the huge student loan debt.
(2) I checked on her college options -did you?
There are NO public universities near St Louis within commute distance.
Choice was
* abandon the family for 2 years and go off to college for the BA several hours away
* do one of those low-rent online things from some more expensive private 'college" that employers laugh at.
* not get a BA
ANd yeah, to get the most salary possible, a teacher needs a Masters and to go into the higher paying administration, a PhD
PS:: Never heard of a 4 year "directional" school -despite my holding a doctorate. There are 4 year colleges. There are 4 year universities. Directional? LOL!
13
1) The caption on the photo clearly states that it is Ms. Kelley's home in Ballwin, Mo. The article makes no reference to whether or not she rents, so I didn't assume (and if she is renting, could she not rent a smaller place?)
2) Here is a list of schools within 20 miles of Maryville University (source: MapQuest):
a) St. Louis CC at Forest Park - 14 miles
b) St. Louis CC at Meramec - 10 miles
c) Harris Strowe State - 17 miles
d) U Missouri St. Louis - 18 miles
Assuming those schools allowed non-traditional students to enter at that time, she would have had many choices aside from racking up ridiculous amounts of debt.
And, yeah, to get the most salary possible, higher degrees are needed, but what about coming in at entry level, like so many education majors do, before racking up additional debt? Poor choice after poor choice...
2) Here is a list of schools within 20 miles of Maryville University (source: MapQuest):
a) St. Louis CC at Forest Park - 14 miles
b) St. Louis CC at Meramec - 10 miles
c) Harris Strowe State - 17 miles
d) U Missouri St. Louis - 18 miles
Assuming those schools allowed non-traditional students to enter at that time, she would have had many choices aside from racking up ridiculous amounts of debt.
And, yeah, to get the most salary possible, higher degrees are needed, but what about coming in at entry level, like so many education majors do, before racking up additional debt? Poor choice after poor choice...
14
AnnS you are so quick to judge. A couple of facts (and even PhD should have gotten these):
1) The photo's caption in article indicates it is Ms. Kelley's home not her sisters. Perhaps it is rented. Perhaps it is not.
2) The University of Missouri - St. Louis seems convenient to me. It has a College of Education. It also offers a Masters in Education and PhD in Education or Educational Practice. It's been in existence since 1965 and offers a relatively inexpensive public school undergraduate tuition of $335.50 per credit hour for this academic year.
Thank you for sharing your opinions but better fact checking next time please.
1) The photo's caption in article indicates it is Ms. Kelley's home not her sisters. Perhaps it is rented. Perhaps it is not.
2) The University of Missouri - St. Louis seems convenient to me. It has a College of Education. It also offers a Masters in Education and PhD in Education or Educational Practice. It's been in existence since 1965 and offers a relatively inexpensive public school undergraduate tuition of $335.50 per credit hour for this academic year.
Thank you for sharing your opinions but better fact checking next time please.
11
Thet only logical solution is to get the federal government out of the student loan business. Then, if people default, don't bail out that banks; make them eat that debt if there are no assets to collect. That is the only logical solution to that problem.
Count on the private market to make credit decisions and make it bear the responsibility for its' actions. When getting a student loan becomes a entitlement, we see what can happen in the case of Miss Kelly.
Count on the private market to make credit decisions and make it bear the responsibility for its' actions. When getting a student loan becomes a entitlement, we see what can happen in the case of Miss Kelly.
28
Almost half a million dollars in undischargable debt is not what I would call an "entitlement."
And btw, there are no "bail outs" here. The US government MADE 45 billion in profits on these loans last year and will make 175 billion in profit over the next ten years:
http://www.usatoday.com/story/news/nation/2013/11/25/federal-student-loa...
The government LOANS about 100 billion a year to students. Imagine the long term benefit to the economy if they were grants and the principal and interest payments of graduates went to capital accumulation like houses and cars? I know that doesn't sound "manly" and Republican and a "free lunch" but it's a gimme. What would have been the interest on the 2-3 trillion the Iraq war cost and will cost the U.S.? hmmmm.....
And btw, there are no "bail outs" here. The US government MADE 45 billion in profits on these loans last year and will make 175 billion in profit over the next ten years:
http://www.usatoday.com/story/news/nation/2013/11/25/federal-student-loa...
The government LOANS about 100 billion a year to students. Imagine the long term benefit to the economy if they were grants and the principal and interest payments of graduates went to capital accumulation like houses and cars? I know that doesn't sound "manly" and Republican and a "free lunch" but it's a gimme. What would have been the interest on the 2-3 trillion the Iraq war cost and will cost the U.S.? hmmmm.....
17
The problem is, if you "get the federal government out of the student loan business" as you suggest, not only would this woman not have been lent so much money over the years, but she likely would not have gotten the first loan, and definitely not at 8.25%. If this process goes fully into private hands, loans will be underwritten by banks who will care deeply who they are lending to, and you will also start to see a much more rational relationship between risk and the price of credit. The result of both is that a) far fewer people will get education loans and b) the ones that do will pay far higher interest rates. People must realize that the involvement of the government is the only reason a private lender is willing to lend an 18 year-old tens of thousands of dollars in the first place. Or, for that matter, a 30-plus woman with scant work and repayment history on existing loans.
The more I think about this problem, the more I believe that the government has made a decision that they want there to be a system to finance higher education for nearly all citizens, and they are willing to stomach a certain amount of default in doing it. It's the cost of doing business. Until, maybe, the rates of default become unacceptable.
The more I think about this problem, the more I believe that the government has made a decision that they want there to be a system to finance higher education for nearly all citizens, and they are willing to stomach a certain amount of default in doing it. It's the cost of doing business. Until, maybe, the rates of default become unacceptable.
3
about 50% of smokers will die prematurely of COPD, various kinds of cancer or another disease. yet smokers continue to smoke like there is no tomorrow.
and tobacco companies surely do not have the best interest of consumers in mind.
when you think about it, this scenario is much worse than ms. kelley's case.