Student Loans are History...for USMC

[usmarinemike]

Whoa, so you're saying that because my parents made too much to qualify for enough loans to cover the school I wanted to go to, it's their fault? Are you criticizing my parents for working hard enough to scrape out enough money from lousy jobs to improve their childrens' lives, or criticizing them for not scraping out enough? Or is it my fault that I wanted to go to an expensive-ass school? Who decided that it's even parents' job to pay for college?

I'm not doing any name calling. The past is passed. I'm sure your parents are wonderful people. You should be in a position though, that if you were smart with your money, then you should be able to chip in a decent amount for your childrens college. That's how you change your family tree so to speak.

Or are you being critical of my parents for not making enough money to keep me from enlisting in the Marines right out of high school? Because if they had, then I wouldn't be here today. Instead, I'd probably be a hippie-looking chef with hair down to my ass, bitching about The Man keeping me down.

You took the same road I'm taking. I knew the day that I went to MEPS that I was going to go through MECEP. That was my solution to funding school. If I didn't get accepted for MECEP (not a possibility in my playbook) then I had the GI Bill with Marine Corps College Fund. That was my contingency. Granted I didn't think the same way about money then as I do now, but I still didn't want to borrow for college.

 

[gaijin6423]

What if I think that my (potential) children should be prompted to pay for their own college education, so as to teach them certain aspects of personal accountability? Sure, maybe our perspective will change once we've actually had children, but right now, my wife and I are in agreement that this is the way to go. It has worked rather well in both our cases.

 

[usmarinemike]

That's admirable, but not all debt is bad. That's the fundamental idea behind investing - someone else is taking on debt to be able to grow/produce/make more than they would without that borrowed money.

College loans are a classic example of a sound reason to incur debt, because you're improving your own net-worth. It's based on this principle that the federal government subsidizes college loans, not just because college education is a feel good thing worth spending money on.

Thanks for replying without being so offended.

OK, I have to admit that I don't believe student loans are SOOO bad, but people just get the wrong idea. You get student loans to get an education and a better career. It's especially good for people with protracted education times like doctors, lawyers, etc. Okay, great ROI.

The problem is that people learn with student loans that it is okay to borrow money to be happy. They get the job and things are looking great. Then it comes time to pay back the student loans and whoops...got two car payments, a house note with greater than 90% LTV, and $15000 in credit card debt. So the ROI goes out the window because of lack of discipline.

It is quite analagous sub prime mortgages. Instead of education, the borrower got time. The idea was to give sub-prime borrowers competitive loans for houses that they would eventually be able to refinance when their credit became prime, or at least more conventional. I'm actually a good case of that. Unfortunately, the borrowers didn't have the discipline to make their mortgage into a gift, and instead it became a curse...for the whole nation. Where the analogy falls apart is that when you declare bankruptcy, student loans don't go away.

Student loans aren't so so bad, but without putting proper principles in place, it's like giving a chimpanzee a loaded weapon.

 

[usmarinemike]

What if I think that my (potential) children should be prompted to pay for their own college education, so as to teach them certain aspects of personal accountability? Sure, maybe our perspective will change once we've actually had children, but right now, my wife and I are in agreement that this is the way to go. It has worked rather well in both our cases.

There are tons of ways to look at it. I'm in no position to advise anybody on how to raise their kids. Just make sure you teach them discipline because in the scenario where they grind away to pay for school themselves, so many kids end up being hippie-looking chefs with hair down to their asses complaining about how the man is keeping them down.

 

[mmx1]

Well, there are some controls in place. I got counseled on my Stafford loan and had to take a mandatory quiz. Contents of which included questions like:

My Stafford loan can be spent on
a) books
b) pot and booze
c) an ipod
d) throwing a party

 

[BACONATOR]

I personally disagree Mike. You know we both agree on financial issues in general but when it comes to student loans, I wouldn't have been able to go to the college I did without them. My dad does very well and was able to pay a significant portion of my tuition (about 40-50%) but the rest was grants, scholarship and student loans. I think that while it isn't required of parents to help their kids beyond 18, that if you don't and are in a position to do so, you are setting your kids up for failure.

I worked a shit job over the summer working 12 hour shifts and such to contribute as much money as I could toward my education, as well as worked during the year and summers but there is no way I could have paid for college on my own.

If my dad said "FU, I'm not paying for college" (when he was able to), I can no say whether I would have been motivated enough to go to CC, then transfer to a state school, work jobs and go to school to pay my own way. I may, but I likely wouldn't have done it that way.

My dad paid a lot of money for me to go to school and I was very thankful to him for doing so. Meanwhile I have done him proud and instead of being a hippie chef complaining about how the man is bringing me down, I got an engineering degree in 3 years (partially to save him $$), And became a Naval Officer and a Student Naval Aviator.

I don't think he has any complaints. :icon_wink




Plus if I die, he gets the better part of half a million dollars.

 

[phrogdriver]

By your theory, there's never any good debt at all. Going into debt for school is much like a business taking out bonds for expansion. You don't see a manufacturer saving up for 50 years to buy a factory. That's because the income from the factory is expected to be greater than the cost of the debt.

Given the difference in incomes between college grads and HS grads, one could easily say that it makes more sense to get a degree, then pay back the debt as a high-earner, than to slave away on the multi-year plan.

You chose to go into the military. Not everyone is suited to that, as we know. College debt serves a valid purpose. I tend to think that this program is a poor use of incentive dollars by the Marine Corps, but it isn't encouraging some evil use of debt.

 

[usmarinemike]

I personally disagree Mike. You know we both agree on financial issues in general but when it comes to student loans, I wouldn't have been able to go to the college I did without them. My dad does very well and was able to pay a significant portion of my tuition (about 40-50%) but the rest was grants, scholarship and student loans. I think that while it isn't required of parents to help their kids beyond 18, that if you don't and are in a position to do so, you are setting your kids up for failure.

I worked a shit job over the summer working 12 hour shifts and such to contribute as much money as I could toward my education, as well as worked during the year and summers but there is no way I could have paid for college on my own.

If my dad said "FU, I'm not paying for college" (when he was able to), I can no say whether I would have been motivated enough to go to CC, then transfer to a state school, work jobs and go to school to pay my own way. I may, but I likely wouldn't have done it that way.

My dad paid a lot of money for me to go to school and I was very thankful to him for doing so. Meanwhile I have done him proud and instead of being a hippie chef complaining about how the man is bringing me down, I got an engineering degree in 3 years (partially to save him $$), And became a Naval Officer and a Student Naval Aviator.

I don't think he has any complaints. :icon_wink




Plus if I die, he gets the better part of half a million dollars.

Cheers. Seems like your dad taught you well. Just don't be a chimpanzee.

BTW...How did you get so many green squares after being the Airwarriors shitbird just mear months ago!?

 

[BACONATOR]

Cheers. Seems like your dad taught you well. Just don't be a chimpanzee.

BTW...How did you get so many green squares after being the Airwarriors shitbird just mear months ago!?

Because, quite the opposite of the dude in the ebay listing in the other thread, I mostly corrected my cranial-rectal inversion (or so the vast majority has told me).


I do have relapses now and again though.

 

[gaijin6423]

Okay, look, I'm not saying that children should be thrown to the wolves, ala Sparta, and forced to fend for themselves from the age of 8, so let's spare those comments.

What I do advocate, though, is teaching people (not just children, as I've counseled a few Marines on this, too) that there are financial options out there to take advantage of which don't involve putting extra burden on parents who are strapped for cash.

 

[Zilch]

Dammit...no love for OCC-R guys. Guess I'll have to repay them as expected...

 

[ChunksJR]

Wow, because I commissioned 30NOV07 I'm not eligible. Awesome.

Timing is everything...get used to hearing that one.

~D

 

[Zilch]

Until last week, I worked in financial aid.

Student loans are the only thing keeping many students in class and paying bills. It's true that there are need-based awards out there, but, until you're 24, they take your parents' income into account to generate an Estimated Family Contribution (EFC.) This is the dollar amount the governemnt says your family can make available for your education that year. All need-based awards depend on this EFC being low.

For example, the Pell grant requires that your EFC be lower than $4110. If your EFC is even a dollar higher, you don't get it.

The catch is that a student's family does not always have that EFC available for the student. Some students are not on speaking terms with their folks, etc. I know a student who's EFC is $15,000. However, she gets $0 from her parents and is totally self-sufficient. Because she's under 24, she can't take her parents' income out of her EFC calculation. She should be Pell eligible with just her own income, but isn't. FAFSA does not negotiate on this except in the most extreme cases (ie, if your mom is literally a crack whore or in a coma.)

Point being, financial aid (including loans) doesn't always work the way it is intended. Need-based awards don't always pay to who needs them, and performance-based ones are typically very lmited in availability. My school, for example, didn't get much FA to hand out to students, performance-wise. It's a 1st come, 1st served thing.

So, yeah, technically there are lots of awards out there, but most are scarce and you should not count on getting one. It depends on what your school's budget is and who else is going there. The vast majority are stuck with what's available from FAFSA, and most of that is...yep, loan money.

That said, the only reason I could graduate in time to not need an age waiver for flight is because of loans. I could not work enough to pay out of pocket, and Mom and Dad obviously had their own expenses...wouldn't want them to pay anyway. Now I'm in debt, but happily so. It pays off, long run. If the USMC doesn't pick up the tab, so be it. 'Tis only what I expected.

 

[BackOrdered]

I finally get to use this one

:icon_long

 

[Scoob]

...until you're 24, they take your parents' income into account to generate an Estimated Family Contribution (EFC.)

Unless you qualify on the short list of circumstances that allows you to claim financial independence.

One of which is Veteran status.