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View Diary: Federal student loan interest slated to rise back to 6.8% (43 comments)

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  •  I'm told that in Australia, student loans (1+ / 0-)
    Recommended by:
    Ramoth

    are interest-free, and they're automatically granted to every citizen who asks for one.  The loans cover costs at state-run universities, which are relatively low, and no one has to pay them back until they get a job.  (I think they need to earn a salary of around $40k per year before they need to start paying back.)   No interest accrues.  The loans are administered by the Australian equivalent of the IRS, and a small percentage added to the person's income tax rather than having a separate repayment structure.  

    Of course, Australia is a rich country.  I wish the U.S. could afford a system like that.

    •  Awesome, but: (1+ / 0-)
      Recommended by:
      Lasgalen Lothir
      The loans cover costs at state-run universities, which are relatively low, and no one has to pay them back until they get a job.
      We also have loans to cover costs at state-run universities, with low interest rates, deferred until graduation.  The terms are probably nowhere near as good as they have in Australia, but we have them.

      The problem is that many Americans borrow more than the subsidized government loan, for various reasons:  living expenses, going to private schools, living in states like CA with massive cuts in tuition subsidies.  This puts them at the mercy of predatory loans, regardless of how perfect the government loans are.

      The real question is:  does Australia dictate tuition costs, or do they have a system like ours where costs skyrocket far beyond the reach of a government loan program?

      Taking jokes seriously is the exact mirror activity of laughing if someone says they have cancer. --jbou

      by Caj on Sun Mar 31, 2013 at 09:13:29 AM PDT

      [ Parent ]

      •  To be blunt... (0+ / 0-)
        ...living expenses, going to private schools...
        It's these two things combined, among other follies engaged in by today's university students.

        In the past, students were far more willing to work through college than they are now.  I can't even begin to tell you how many of my own students have said they "can't work so they can focus on their studies" (while earning a C in my class).

        Also, in the past, parents were more willing to foot part or all of the bill for their children than they are today.  Again, I can't even begin to tell you how often I've heard students tell me their parents haven't paid a dime towards their college costs.

        And on top of that, many of them take out loans for living expenses, and that's just sheer folly.  The community college student who made that McBurger that you put on your student loan is going to look a lot wiser in the long run, even as you look down your nose at her or him now.

        We have a cultural problem going on that's fueling these rising tuitions.  AS long as people think that they have to go to Southeast Ohio State College instead of Ohio State University, and as long as they think they don't have to work through college, and as long as their parents think they don't have to put any money on the table, and as long as students put living expenses in their college loans, tuition prices will continue to rise.

        And granting an amnesty on student loans will actually only encourage it.

        •  asdf (1+ / 0-)
          Recommended by:
          Lasgalen Lothir
          Also, in the past, parents were more willing to foot part or all of the bill for their children than they are today.  Again, I can't even begin to tell you how often I've heard students tell me their parents haven't paid a dime towards their college costs.
          This is a common rite of passage for college students:  your parents tell you that they're really sorry but they can't afford to pay for your college, and four years later you come home to find a new Mustang in the driveway.

          Taking jokes seriously is the exact mirror activity of laughing if someone says they have cancer. --jbou

          by Caj on Sun Mar 31, 2013 at 07:50:06 PM PDT

          [ Parent ]

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