BellaOnline Forums Education Distance Learning Subsidized vs Unsubsidized Loans

excuse me...but no one is getting rich off interest these days

Average annual tuition&fees for public 4yr universities in the US-$7020 Annual available federal Stafford loans-if dependent on parents, $3500 subsidized, $2000 unsubsidized. subsidized increases to $4500 second and third year, and to $5500 your final year. If independent, the unsub allowance is higher. Add in Pell grants, up to $5550 per year for up to three years, EFC, and other federal, state and local or private financing options, and many, if not most can get their undergrad for free. The situation I imagined when I read your original post is not an atypical one: a student manages to get their education paid for through a combination of grants, scholarships, parental contributions (if applicable), etc. and then has the option of taking out loans. If they have other bills to pay, or had to empty their savings, or whatever else may apply, then they should absolutely consider the loans. That is what they are there for. But if that is not the case, and they are covered and have their emergency fund intact, then I am sorry, but as unlikely as you may declare it to be (and I disagree on that), it is an abuse of the system. And taking that money and investing it is not contributing to that individuals education, but rather helping them to cultivate a nest egg. That may be nice, and perhaps we should start a push for it! I'd love to see people graduate with an eager mind and a chunk of cash to jumpstart a new business or a home purchase or whatever, but that's not what this money we're talking about is for. I doubt you would encourage anyone in that situation to pull out a personal loan from a bank and sock it away for four years, and the only difference is that we the taxpayers are paying the interest on the Stafford loan.

Live2Learn - I believe that is basic tuition and doesn't even count room and board.

I highly contest the idea that "many, if not most can get their undergrad for free." The volumes of email I get from people seems to make this seem highly unlikely.

From Wikipedia:

"the median cumulative debt among graduating 4-year undergraduate students was $19,999"

I will acknowledge that I misused the word 'free'; I noticed right after I posted. Perhaps that wasn't your issue, because I would defend the notion that for most of the individuals for whom public aid in obtaining education is intended, they absolutely have the ability, with some effort, to obtain a solid education at a public institution for little to no out of pocket costs for tuition and fees (as above)through loans, grants and scholarships. I cannot include room and board in an educational expense, especially when we are comparing to and talking about distance learning. Those are expenses regardless of whether or not one chooses to get educated, and are certainly not included in any of the pricing for online schools that we might compare to. Further, the reason for such an inclusion in the old model of educational expenses is that there was an assumption of full-time study and full-time residence.I don't think that does, nor does it need to, apply to the education of many people today. You are getting your education while (at least) running this website and managing various aspects of that business. This is a very different situation than was even possible when we established these financial aid offerings, and certainly affect the way you regard 'room and board' as necessarily an educational expense. As to your median debt stat, it says two things: first, that students are not so 'scared of debt' as you suggested earlier (if you are rather arguing that education is too expensive, well then you're on my side in this thing and should be joining forces with my mission in this and other threads ;) ), and second, that the cost of private education is remarkably high in comparison to public education. (The comparable avg/annually for private is over 23k! compared to the 7k for public) This simply needs to be a factor in determining where you choose to go. If money is no object, then by all means go wherever you like, spend whatever you want.... but don't ask for tax dollars to fund it beyond your true needs. So that brings the conversation back to its subject: the appropriateness of borrowing money beyond one's needs, and I think my position is both clear and intractable. Certainly other issues have emerged from the conversation here, and deserve their own threads perhaps. (?) What should education cost? What should the public pay for? What expectations should be attached to those provisions? Should we be more thoroughly discouraging debt? Especially in those who often don't yet understand it or its implications on their lives? etc.