Monday, September 13, 2010

The Student Loan Scam

Student Loans Scheme.

Infographic by College

H.T.: Ferdinand.


Professor Hale said...

the problem starts and ends with covernment intervention in the credit markets. If the government did not back these loans, then bank lenders would look at each loan on its merits ans the ability of students to pay it back. They would get co-signers and colateral. They might even discuss the credit worthiness of certain degrees in the arts and discourage people from entering those fields.

But with federal backing, it is free money to the lenders.

Elusive Wapiti said...

And guaranteed payback...else its off to the debtor's prison for you.

Justin said...

Wow, I hadn't realized the scope of the problem, or the gov't program to crush normal consumer rights here.

trumwill said...

I'm not sold on the third suggestion, "Work". In my experience, trying to balance working and college is a recipe for failure. Among other things, it can slow you down so that it ends up costing you more in tuition. My GPA fell like a rock when I got a job (albeit a full-time one) and I know more than one bright peer (and "Julianne") that flunked out trying to serve two masters.

Working during the summer is not a bad deal, though, if you can get a good summer job.

I would replace "Work" with "Have a plan." I don't think there is anything inherently wrong with going into debt if you're going into a field where there is a good chance of paying it back. If the cost/benefit of the degree is not such that you are going to be able to pay it back, develop a better plan.

I am also of a mixed mind about community college. Sure, it's a great way to get an inexpensive education. But you also bypass some of the intangibles of college (the connections) that can help you with your career later on. On the other hand, if you're starting with nothing... it's not as easy to justify the immense costs of living on campus full-time.

Φ said...

I think the idea behind community college is that it is an inexpensive way for a student to complete his general ed requirements, which he would then transfer to a 4-year school. That said, attending CC pretty much rules out transferring to a selective college, except for a public school in the same state with which the CC has a relationship. Selective colleges are usually harder to transfer into than get admitted to as a freshman.

Some colleges have co-op programs that help place students in jobs working in their field of study and allow them to alternate work and school.

trumwill said...

Yeah, but transfering is difficult, socially. I don't think that you're going to get the same social network in the last two years of college that you would get if you went somewhere for four years. You transfer in and the other juniors already have their social networks in place. If someone is particularly extroverted or charismatic, this really isn't so much a problem. I don't look at it from the perspective of the extroverted and charismatic, though.

Selective colleges are usually harder to transfer into than get admitted to as a freshman.

Private schools, maybe, but in my experience the opposite is true of public universities. Even selective ones. I know in my home state that the flagship U (well regarded nationally) loved transfer students. You could be turned down graduating in the top third of your class from a five-star high school but just about anyone with a 3.0 GPA in juco was in.

There were reasons for this that might be peculiar to my state, but I've heard similar things about UCLA (that transferring in is a lot easier than getting in directly). I think that they are easier on transfers because it allows them to replace those that flunked out and probably because JuCo performance is probably a better predictor of BigU performance than high school performance and SAT are.

Co-ops are golden. Like working summers. It's a great gig if you can get it. I think in the last 10-20 years, though, there has been a shift away from paid co-ops and towards unpaid internships. I could be wrong about that, though.

Φ said...

Yeah, getting paid as a coop in non-tech fields is tough, but doable for scientists and engineers.

Regarding transfers: Consider a nationally ranked public school like Georgia Tech. GT has a number of partnership programs that admit transfer students by contract; in other words, taking X courses with Y performance guarantees admission. But for general transfer students, admissions are still competitive, and even exceeding the minimum standards guarantees nothing.

I also understand that transfer students replace drop- and flunk-outs, but generally, the more selective the school, the fewer the dropouts, so fewer transfer slots open up. I would predict that JuCo performance is a better predictor of college success than HS GPA/SAT, but the flip side is that there are plenty of students with 3.972 GPAs and 1390 SATs who STILL struggle to keep a 3.0 GPA in an engineering curriculum. (Not that I'm bitter or anything . . . )

trumwill said...

I'm not entirely sure whether we should be looking at "general transfer students" or those under the contract. Seems to me that if you're smart enough to get into GT outright, you should be able to get into a contract transfer program, right? Strikes me as good motivation to make sure that the JuCo you're going to has a good admissions pipeline to the university in question, but not as a good reason to stay away from JuCos for fear of getting in.

I can't really talk about "The University of Delosa" (I'll just say that it is a university that you would agree fits the definition of "nationally ranked" and "selective"), so I decided to look more at UCLA (a more competitive school than GT). According to the this source (from the University), competition is similarly fierce for transfers and freshman students. Incoming freshmen average a GPA of 4.3 (of 5) and transfers 3.57 (of 4). That does not strike me as putting transfers at a disadvantage and would actually consider 3.57 more do-able because I would bet that in addition to the 4.3 GPA the average UCLA admit probably has a load of "intangibles" in their favor that those that can't pay for college don't have. Complete the course requirements with the requisite GPA (3.2 GPA) and you get "priority enrollment".

They, like GT, seems to have a feeder program. So if you can't afford to get into UCLA, seems like a good idea to make sure that the JuCo you're looking at has a relationship with the target university. Or at least have a very good idea what the process is.

You're probably right that there are fewer dropouts at the selective universities, though I think that this is often less true at public ones than private one. And I think that at particularly competitive colleges within the universities, you probably do see openings as engineering students switch their majors to business and so on. And I also think that while the slots for transfers are limited, the competition probably isn't as fierce. The smartest students that didn't get in probably committed to other programs elsewhere (ie decided to get their degree from UC-Irvine rather than go to Pasadena Community College and transfer in after a couple of years).

(OT: I posted on Colton Place on HC)

trumwill said...

(a more competitive school than GT)

Oy. My mother would *kill* me for that comment. Replace "competitive" with "selective".

Φ said...

I see your point about the intangibles. If you don't have them, then the criteria for transfer students, which seem more heavily weighted towards academics, probably work to your advantage.

Another aspect: I would speculate that affirmative action doesn't play quite the role for transfer students as it does for entering freshmen. So a middle-class white male might find it easier to replace a NAM dropout than overcome the "diversity" deficit.

My perception is colored by my experience and that of my brother. He won early admission to the same engineering school I attended but opted for a dual-degree program. He wound up doing very badly in calculus and physics at the first school. Had he gone straight to the engineering school, he might have recovered, but there was no way he would be allowed to transfer. (Although engineering probably wasn't his calling anyway.)

So I guess it depends on whether your high school portfolio over or under predicts your eventual performance.

trumwill said...

That's actually what I was referring to when I said that transfering advantages might be "peculiar to my state". My home state, as an endrun around race-based affirmative action, created a set of "equal access initiative" laws that are essentially class-based affirmative action. So it became incredibly difficult to get in if you didn't qualify under EAI, but a whole lot easier if you were willing to cool your heels at a JuCo for a bit.

I applied to the "University of Delosa" and was initially rejected, but actually received a phone call from their admissions office asking me to spend a semester or two at JuCo and he was sure that a spot would open up for me if I did well there. I enrolled at "Southern Tech" instead. I know one guy who didn't enroll and a spot ended up opening up before the first class. In addition to people flunking out, there are also people that enroll and then only later discover that they can't afford tuition or couldn't get the loan lined up on time.