Student Loan Credit Crunch

[starbuck1]

This student loan credit crunch concerns me as I'm starting grad school next year. How do people pay for law/medical schools that are 30 - 40,000 a year when all you can borrow from the federal government is 12 - 20? I have excellent credit, however I have quite a bit of debt from undergrad and the private loan market isn't lending to anyone in this environment. I hope the economy recovers by next fall.

[ScottC]

Well, here's the deal with people who get to spend 7 years in college to become a doctor/lawyer...they have money to pay to college to begin with! They don't rely on loans like the vast majority of us! And when I say "they" I actually mean their parents. So if you don't come from money, don't expect to have an easy time getting either of these degrees (if its even possible).

You're dead on when you say the government only wants to give you a fraction of what it truly costs to go to school. I went to a public university that w/o R&B cost about $8,000 an academic year (two semesters) or $15k for tution+r&b. Unless you lived in the small college town and could commute, everyone had to pay the $15k deal. I couldn't even get govt. loans to pay the TUITION part of a public university education.

The only way I got through school was taking out two big private loans in my junior and senior year. I didn't have a cosigner so the rates were super high compared to most but it was either take the loan or have a half-finished Bachelor's Degree.

What's retarded is that the govt. has different rules for graduate level studies - they'll pay for your whole school practically. They just don't want to help people pay for undergrad schooling.

[wordsmith]

Well, here's the deal with people who get to spend 7 years in college to become a doctor/lawyer...they have money to pay to college to begin with! They don't rely on loans like the vast majority of us! And when I say "they" I actually mean their parents. So if you don't come from money, don't expect to have an easy time getting either of these degrees (if its even possible).

This is definitely not a truism. My boyfriend's entire family is full of doctors and lawyers, and they're an immigrant family within the last several generations.

You're dead on when you say the government only wants to give you a fraction of what it truly costs to go to school. I went to a public university that w/o R&B cost about $8,000 an academic year (two semesters) or $15k for tution+r&b. Unless you lived in the small college town and could commute, everyone had to pay the $15k deal. I couldn't even get govt. loans to pay the TUITION part of a public university education.

This is actually exactly why I went to a private school. Better aid than public, for me. I would have paid more out of pocket to go to public schoo (I applied to quite a few of each, to get a variety of comparison shopping info, and the private schools were a better deal, overall, when aid was figured in)l. Most of my tuition was handled by grants and scholarships. I took out a small percentage of it in loans.

[NewMrs.]

In my region it least, it seemed for awhile that the very first students to be impacted by the credit crunch were going to be the community college students. One of the major bank chains in the Pittsburgh area announced this summer that it was planning on discontinuing student loans to students enrolled in the community colleges. At that point, it planned to continue offering SL's to students enrolled at 4-year schools.

The press release that was associated with this said something to the effect that at the time, they had examined their footprint and determined that this was not a profitable part of their business. Apparently students at cc's were deemed less likely to obtain degrees within a certain time frame and thus had a greater chance of not paying back the loans. After about a month or so, the bank announced that it was reversing its previous decision. I think some of the state's lawmakers got involved and had a hand in getting the bank to change its decision, since this bank had been receiving tax credits from the state.

[Restless&Lost]

This student loan credit crunch concerns me as I'm starting grad school next year. How do people pay for law/medical schools that are 30 - 40,000 a year when all you can borrow from the federal government is 12 - 20? I have excellent credit, however I have quite a bit of debt from undergrad and the private loan market isn't lending to anyone in this environment. I hope the economy recovers by next fall.

Well as stated above, you either come from money or the school GIVES you money in the form of scholarships/grants and whatnot. At any of the major law schools I know of, they don't allow you to work more than like, 10 hours during the school year. I don't know how you'd even work AT ALL during med school. So if it were me, and I wasn't getting any aid from the school whatsoever, I would seriously reconsider going in the first place.

For pretty much any other discipline, I don't think going into graduate study without any funding from the school is a very smart choice (unless you have a job that would pay for it or something). Unless you're a real screw-up, law and medicine are pretty much the only fields that more or less ensure the kind of salary that would justify that kind of expense.

[wordsmith]

In my region it least, it seemed for awhile that the very first students to be impacted by the credit crunch were going to be the community college students. One of the major bank chains in the Pittsburgh area announced this summer that it was planning on discontinuing student loans to students enrolled in the community colleges. At that point, it planned to continue offering SL's to students enrolled at 4-year schools.

The press release that was associated with this said something to the effect that at the time, they had examined their footprint and determined that this was not a profitable part of their business. Apparently students at cc's were deemed less likely to obtain degrees within a certain time frame and thus had a greater chance of not paying back the loans. After about a month or so, the bank announced that it was reversing its previous decision. I think some of the state's lawmakers got involved and had a hand in getting the bank to change its decision, since this bank had been receiving tax credits from the state.

Way back in '96-'97 ish, when I was a student, my bank at home, which had provided some of my college loan, was bought out by a larger bank. The new bank decided they were no longer in the student loan business, and attemped to call in all the previous bank's outstanding student loans, effective immediately. They met with roadblocks to going through with that, as well, but it looked like I was going to be unable to finish my degree, at that point. And this wasn't at a community college, either - it was a private 4-year. The purchasing bank just decided that student loans were not something they were going to involve themselves in.