Thread: The strongest economy in the world
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Old 01-10-2007, 09:12 PM   #543 (permalink)
Milkman
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This article focuses on a dental student and a law student, but the costs have increased 100% for everybody. Even State Unies. The U.S. government's solution: raise the lending cap. Just let them borrow more money. When the ceiling in reached, these students can borrow from privates institutions. Once a person gets into that much debt as such a young age, they'll never get out of it.

Quote:
Tuition zooms; so do fears over student loans

By Marcy Gordon
The Associated Press



BOB CHILD / AP
Dentist Paul-Henry Zottola, in Rocky Hill, Conn., is paying $1,600 a month on a student loan as well as the payments on his mortgage and a loan he took out to start his practice.


The near-doubling in the cost of a college degree the past decade has produced an explosion in high-priced student loans that could haunt the U.S. economy for years.



While scholarships, grant money and government-backed student loans — whose interest rates are capped — have eased the burden for some, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.
More people in the next generation of workers will be so debt-burdened they will have to delay home purchases, limit vacations, even eat out less to pay loans off on time.


Kristin Cole, 30, who graduated from Michigan State University's law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, will jump to $800 in a year or so, confronting her with stark financial choices.


"I could never buy a house. I can't travel; I can't do anything," said Cole, a legal-aid worker. "I feel like a prisoner."


Parents are still the primary source of money for many students, but the dynamics were radically altered in recent years as tuition costs soared and sources of readily available and more costly private financing made higher education seemingly available to anyone willing to sign a loan application.
Students with no credit history and no relatives to co-sign loans (or co-signing parents with tarnished credit) were willing to bet that high-priced loans were a trade-off for a shot at the American dream. But high-paying jobs are proving elusive for many graduates.


"This is literally a new form of indenture ... something that every American parent should be scared of," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.
Entire: Business & Technology | Tuition zooms; so do fears over student loans | Seattle Times Newspaper
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