and I guess a lot of people can relate to this.
I would love to see comments on this since I do not know what local Americans are going through.
Thursday, October 27, 2011
student debt
Great article on cost of education in America and in other parts of the world.
and I guess a lot of people can relate to this.
and I guess a lot of people can relate to this.
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When anyone takes on debt, there is generally, or at least hopefully, a plan of repayment. Generally, it is a bad principle to accumulate debt and "kick the can down the road" to when you have a job and are making 50k with your fresh out of college job. Unfortunately, college graduates, with no outside work experience, may have to settle for an entry-level job. Another point, is capitalization. This is when your accumulated interests, which in college gets added to your principle upon graduation. Consequently, this hurts college students with a higher principle and more interest right after college. Another note undergrads may need to evaluate is entering a masters or JD programs immediately after undergrad.
ReplyDeleteEither way, a good idea for undergrads who are taking out a lot of loans is to get an on-campus job to start paying off interest to avoid capitalization, and perhaps begin paying off the principle. Just some ideas.
Good article and this is now also applicable to international students who are taking out loans.
ReplyDeletedude
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I do not like that you are doing it for two points be reasonable...
The idea of restructuring the debt repayment methods to align with those in Australia and other countries where amounts to be repaid are dependent on income levels is a good one. This really would make it so that more people had the opportunity to receive higher education, improving our human capital. In addition to this the writer's suggestion on make repayments higher for those majoring in less lucrative fields, though he says this will be controversial, I think is one of the best approaches to be made. It makes no sense to give the opportunity of education equally to all members if not all will benefit the growth of the country. In my home country the amount of student loan received or the rate that you pay (I can't recall which) on the loan is dependent to some degree of your achievements in secondary school.
ReplyDeleteConsidering financial background when creating a repayment plan wouldn't be a bad idea. However, this should be based on the kind of income that the individual is making after college, rather than what they had coming into college. It is also important for students to work during college in order to begin paying off their loans or prevent loans from accumulating too much. I have mostly seen people in trouble when they forget that their loans will need to be paid off, and incur more expenses right out of graduation than they can afford.
ReplyDeleteI really liked the idea of altering the loans for college debt almost like a mortgage payment. That they would be on a schedule and not have to wait until the end of college to repay back the debt because the reality is in this economy, the first job out of college won't be enough to really knock out the debt. By changing the payments to be due while in school, may succeed in relieving some of weight of their student loan bill.
ReplyDeleteShouldnt there also be a sort of a downpayment on college loans.
ReplyDeleteDo the american banks ask for it.
Shouldn't the future rates also depend on present GPA since that will help determine how fast it can be paid back.