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Why are students taking out such large student loans?

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littleroc02us
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Why are students taking out such large student loans?  Reply with quote  

The latest figure on college student loan debt is 1.3 trillion. The question everyone wants to know is how did this happen. First I blame the gov't for backing Federal student loans to students who have no income. Second I blame the parents, because most back their students wishes based solely on emotions and not ROI. I don't blame the students, because the parents should be looking over their chidlrens'spending habits. I don't blame colleges, because they are simply taking advantage of the Federal Gov'ts backing of student loans and the more money the students take out the richer they get.
The Gov't should completely get out of lending money, because they suck at it and should allow the free market to take place. I work for a major University and I see so much waste on the spedning side. Every year my University complains to the state legislature that they need more money, when I watch every year foolish spending by departments for equipment they don't need for fear of a lower fiscal budget for the folliwng year.
As for the students, they are taking out extra student loans to afford a lifestyle in brand new luxury college apartment high rises that have pools, computer labs, workout facilities and elaborate TV areas. If students stayed in the dorms or get 4 roomates and lives in old houses, they could save a bundle. Also, with two Starbucks and every restuarant you can think of within a mile radius, these students are spending up to $30 a day on coffee, breakfast and lunch, which comes out to $4,000 a school year.
Last night I did a comparison of why parents cannot afford college and came up with a conclusion that doesn't make sense to me. So I have 2 kids that are in daycare 3 days a week (we chose for my wife to work part time, since fulltime we only would have pocketed $5,000). I pay $382 a week for daycare and believe me this isn't one of those brand new posh daycares. That comes out to close to 20k a year. If they both went fulltime the yearly costs for both kids would be around 26k.
So I compared this to the current costs of a quality state school in Minnesota and after calculating room and board in the dormitory, tuition for fulltime, school fees and extra expenses, the total came out to $21,000. This doesn't include grants and scholarships.
So before I get into how to pay for school, I must preface this by saying I lived on a farm and my dad starting paying me $1.00 an hour to drive tractor at the age of 10 and every year I got a dollar raise until I graduated. I also worked during high school bagging groceries and was involved in sports, music and church activites. My grades were just fine.
The thing I don't understand is that if your child were to work 40 hours a week in the summertime and during the school year @ $10.00. Now if they did this from their Freshman year until their Senior year, that's 4 years to earn around $25,000. Obviously with a $3,000 car, insurance and going out money, they'd have maybe $10,000 to $15,000 left for college.
This could help pay for half the first school year and with grants and scholarships that even a B student could earn, this might cover another $5,000. So that really only leaves $6,000 for the parents to pay out of pocket for.
So the question is if parent's who are much younger and have lower incomes can send their children to daycare for $26,000 a year for two kids, how come parents/students that are should be making much higher incomes then when their kids were in daycare, have to take out the national average of 32k a year in Federal and Private student loans. Is it because of poor planning, not wanting to have their kids work while in school for fear of hurting their performance. (Which is bull, because I wasn't the smartest kid, but I got a B average and was heavily involved) or is it that they cannot say no to their kids wants and dreams. Or is it the parents that have inflated their lifestyle to a point at which they spend a large percent of their incomes on a big house, new cars, vacations and other wants. To me it makes no sense at all after looking at the math.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon May 22, 2017 8:13 pm
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music23
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Post Sat Nov 04, 2017 6:52 am
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