What Is Really Immoral About Student Loans

The link provided requires a paid subscription, but I can only guess at the concept. The immorality of the student loan system to me is somewhat akin to the sub-prime mortgage crisis where otherwise unqualified borrowers were saddled with loans they wouldn't be able to afford to repay at market rates - all under the guise that home ownership is a right that all Americans should enjoy. In education, the availability of low interest student loans has in part, driven up the price of a private college education because it increases market demand by increasing the pool of applicants willing to pay inflated prices for the product (a college education). The continued frenzy among high school students (and their parents) to get their kids into the very best schools, independent of their ability to be able to afford them is framed in part by the availability of low interest student loans. This problem is by no means isolated. I'm not sure of the precise number, but the overwhelming majority of students graduate with student loan debt, which will impede their ability to purchase their own home, save for their retirement, and even save for their own children's education. Even our own President has railed about the necessity for all Americans to attain a college degree, as if this achieved nirvana will automatically create a more productive competitive workforce. Those smart enough to realize that a debt laden path to a college education may not provide the brightest future after all may be way ahead in the long run.
 
Below is a Wall Street Journal graphics which identifies 3500 US colleges & universities that lists coast, graduation rate, student default rate and student debt.

If you "click" the default rate and go to the last page you will see that the highest defaults are among the "for profit" trade schools (see the many branch divisions of the profitable "ITT Technical Institute") where in many case less than one third of the kids graduate but more than one third of the kids default on their loans. No doubt that if a politician of either party came out against subsidized student loans to kids attending a for profit like ITT they would be criticized for beating up on the poor kid when in fact the for profits seemingly scam the less educated/ poor kid by leading the majority of their students down the road of debt and disappointment.

http://online.wsj.com/article/SB100...ct=BORROW021620130216&articleTabs=interactive
 
Below is a Wall Street Journal graphics which identifies 3500 US colleges & universities that lists coast, graduation rate, student default rate and student debt.

If you "click" the default rate and go to the last page you will see that the highest defaults are among the "for profit" trade schools (see the many branch divisions of the profitable "ITT Technical Institute") where in many case less than one third of the kids graduate but more than one third of the kids default on their loans. No doubt that if a politician of either party came out against subsidized student loans to kids attending a for profit like ITT they would be criticized for beating up on the poor kid when in fact the for profits seemingly scam the less educated/ poor kid by leading the majority of their students down the road of debt and disappointment.

http://online.wsj.com/article/SB100...ct=BORROW021620130216&articleTabs=interactive
Click to expand...


The school with the highest default rate (62 percent) on the WSJ chart is ICPR Junior College, which has 502 students who borrow an annual median amount of $ 2250.

502 students x 62 percent = 311 defaulting students X $2250 = 699,750 dollars



ITT Tech in Albany has 518 students (coincidentally it also has a 518 area code). 34 percent of students default 16,000 annually. **

518 students X 34 percent = 176 defaulting students X $16500 = 2.9 million dollars




There are 21,354 students at SJU Queens. 10 percent of those students default a median amount of 26202.


21,354 X 10 percent = 2135 defaulting students X 26202 = $55,941,270


Which school is running the most successful scam do you think?





http://student-loan-default.findthedata.org/l/3902/ITT-Technical-Institute

http://www.collegeview.com/schools/icpr-junior-college-mayaguez/

http://www.huffingtonpost.com/2011/09/12/student-loan-default-rate_0_n_958421.html




** The WSJ ITT numbers cannot be right. First, every ITT campus has the same default rate and the same median amount borrowed. Second briefly searching I found two sources (the Houston Chronicle and Huffo) that cite a default rate at ITT of 22 percent, but whatever.
 
one local catholic college that is half the cost of our beloved St. John's university

St. Joseph college in Brooklyn annual net tuition of $12,063 and only a 6% default rate, a very small school however their tuition model and catholic mission are great examples of what can be done today. A similar school is St. Francis College net tuition of $12,325 however a high loan default rate of 14%.
 
Jersey, I appreciate the links you contribute but you realize they don't work for non-subscribers right? It's just like Newsday...unless you subscribe you only get to see a few lines of articles. It might be a better idea to copy and paste the articles from there so everyone can see just a suggestion.
 
Great articles JSJ IMHO SJU should be a leader in tuition reform not a follower. Finally the press is attacking the federal government and the colleges that enable federal waste, the colleges are spending the governments money on unneeded facilities and bs admin jobs. Also colleges brag about their endowment, which in essence is having a huge portfolio that for the most part helps no one but the financial firm that set it up for them and exhaust fees etc. Like him or hate him he had his flaws but many of the alumni on here benefited from the leadership of FR. Joseph Cahill who kept tuition at low levels and went out of his way to deny federal bundy aid, not wanting federal involvement in a catholic university. Fr. Harrington who initially kept tuition at decent levels broke the mission by caring about the growth of endowment and exhausting federal funds. The traditional SJU student lets say a middle class kid from maspeth queens whose parents are working hard to provide a quality education will not be eligible for grants because they are deemed as having a high annual income of100k which is middle class in ny.
 
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