College is financially attainable for just about anyone.
So a 10% hit to your income for at least 20 years isn't significant? What percentage of someone's student debt works under income based repayment?
> If you never make more than 1.5x the poverty level, you’ll never pay back a dime.
So... your suggestion is to live just above poverty so you won't have to pay student loans?
> Federal loans are enough to pay for a state school (especially if you do your general education at a community college)
Sure, there exists ways to go about getting a degree which doesn't _have_ to have a massive financial burden for decades, but what percentage of degree holders (Or, those who have student loans) took this path? Is this a pragmatically fair expectation for 17/18 year olds to make?
How do you resolve the "while the total average balance (including private loan debt) may be as high as $41,618"[0]
[0]: https://educationdata.org/student-loan-debt-statistics#:~:te...
It's not a 10% hit to your income. It's 10% of your income over 1.5x the poverty limit. And it's capped at whatever the payments would be under a 10 year repayment plan.
And it's not at least 20 years, it's at most 20 years. If you make more $80k or so you'll pay less under the standard 10 year plan, so you'll pay that. Which for $40k in deb is something like $450 a month (about 6.75% of your income).
>So... your suggestion is to live just above poverty so you won't have to pay student loans?
That's clearly what I said...of course it's not. The point is that worst case scenario you make under 1.5x the poverty limit you make nothing. If you make a little more than that you pay a 10% tax on the money over that (up to about $60k then it goes down).
>Sure, there exists ways to go about getting a degree which doesn't _have_ to have a massive financial burden for decades, but what percentage of degree holders (Or, those who have student loans) took this path? Is this a pragmatically fair expectation for 17/18 year olds to make?
In 2020 around 6% of students took out private student loans. And private student loans represent only around 7% of all student loan debt, so most of them don't have a massive financial burden because they qualify for income based repayment.
>How do you resolve the "while the total average balance (including private loan debt) may be as high as $41,618"[0]
The vast majority of that is federal, which qualifies for IBR, so isn't a massive burden. Don't take out private loans unless you're going to an Ivy League school, or med school.
The utility of a degree, from what I've seen, _does_ end up being better than the accrued debt on average, but the distribution of these cases (I simply imagine) leaves enough people on the margin to be harmful.
My point is that whether they need a marketable skill or not has very little to do with student loans. Provided they go to a state school.
If you borrow $40k to go to a state school, the most you’re going to pay is something like $450 a month for 10 years. Any degree no matter how vocationally useless will allow you to make more than $450 a month extra than you otherwise would have.
There are of course cases where this doesn’t hold, but you’d almost have to try for it not to be worth it. The program is good enough that I think we’ve mostly reached the point of diminishing returns, and there are other things we could spend additional money on with higher ROIs.
That's $14,150 per year. Let's take one of the highest cost of living states--california. Cal state LA: tuition and mandatory fees: $7,160, books: $1,054.
That's about $6k a year more than you need for tuition and books. Obviously this isn't going to cover all of your living expenses, so you're going to need to work or live with family.
But if you're an independent student, with the larger loan limits, you could get close if you live really cheap.
> The Trump administration has gotten rid of applications for income-driven repayment plans from the federal aid website.
The change occurs as the Eighth Circuit Court of Appeals blocked income-driven repayment plans in its February ruling. That means former President Joe Biden's SAVE plans and PSLF options are no longer available.
“ Today, the U.S. Department of Education’s Office of Federal Student Aid (FSA) reopened the online income-driven repayment (IDR) plan and loan consolidation applications for borrowers. The application was temporarily paused to comply with the 8th Circuit Court of Appeals injunction issued last month, which directed the Department to cease implementation of the Biden Administration’s Saving on a Valuable Education (SAVE) Plan and parts of other IDR plans. Because the online application incorporated provisions subject to the injunction, it was necessary to revise the form, making it unavailable to borrowers in the interim. Paper loan consolidation applications were available to borrowers during that time.”
http://www.ed.gov/about/news/press-release/us-department-of-...