questionscollege tuition for garnished wages?

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That seems like an awful idea for any technical field, and a financial disaster at the state level for those degrees that tend not to lead to higher paying jobs.

I wouldn't participate if I had a choice. It looks like an awful financial decision.

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By "no money down" I assume you mean free tuition (and hopefully books). I don't know if it's a sound financial idea on the macro, but for a lot of people it would be great on the micro. I'd have considered taking advantage of that type of program if I could have figured out a way to make it work. I moved out at 17 and was paying my own way in life before I finished high school. I struggled through a couple of years of college and finally gave up as it was so hard to make ends meet. I turned my financial efforts to buying a house instead. Lack of a sheepskin (Permission slip for advancement) has cost me a lot professionally. As we speak I am working both my job and that of my boss who retired last year. My department would like to promote me to his position, but they can't as I lack the educational requirement to earn that pay. An educational requirement obviously not necessary to do the job, though.

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sure, spend $80,000 of OTHER'S money on education, then take a $12,000/Year job as a barista at starbucks. As usual, a pie-in-the-sky idea that sounds good but is doomed to failure. Unless a student is paying for college themselves, very few will value the education they receive and get full value out of their education. Too much easy money for college is what has fueled the increases in tuition costs.

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We already have that "pay part of your salary to the government for the education you got" - it's called taxes, and everybody hates them.

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If it were the only way possible for a person to go to college, then I suppose it might be worth it. But 24 years? That's longer than a lot of mortgage terms.

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lol great idea, go to school for free then get a job out of state or country and never pay it back. how could this fail. Ooo... better yet institute this right after teh country goes through one of it's biggest boughts of unemployment. I still have friends with masters degrees that are smart people that have not had jobs that pay enough to pay loans and live on and they have been out of school 5+ years. lets see 60k for under grad another 60 for a masters then 5 years of 30% of 30k. yeah they will eventually pay it back....

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It seems like if this was done right, it would provide an incentive for state schools to boost their STEM/medical programs (which usually lead to higher paying jobs) at the expense of some of the liberal arts/humanities programs (which often lead to lower paying jobs). If that is the case, it sounds like a point in favor to me.

BTW, I am in Oregon and have college-bound kids, so I am watching this with interest.

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@turbinator42: But the problem is, STEM & medical field people can do math. They can see that they can outearn the 24 year period of this 3% tax, and be free from the burden more quickly than what's proposed. So they'll most likely never participate unless forced to by the state, in which case they'll go out of state and still pay back their loans at a faster rate.

Meanwhile, you'll be encouraging people to pursue fields that while are valuable (I will never say as an engineer that my degree program is harder than an English or History major. Those are valuable fields that simply don't have the same earning potential, that's all) cannot pay themselves back, and so their lower earnings will slump this program financially, since they'll likely never be able to pay back the full cost of their tuition. In the meantime, there's still no incentive at the university level to limit expenses, because they know the state will reimburse them.

Bad incentives for high earners, bad finances.

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@moondrake: (This is a serious question, not snark.) Have you looked into the non-campus based programs that are essentially buying a degree? Since it's clear that you need the piece of paper just for the sake of having the piece of paper rather than for any knowledge the program would give you, which is the case for a number of undergrad degrees, perhaps that would be an option?

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@magic cave: I actually did look into it but I couldn't get the personnel department to give me a straight answer on whether they would accept that type of degree. If I were planning on working much longer I would get one and then push the issue with personnel, but I become eligible for retirement next Christmas and with only one year after that of mortgage payments (of less than $600 a month) I am blowing this pop stand. I may take other work after that but I really expect that I will be looking at contract work, where my real world education carries weight rather than my institutional education. I should be able to make ends meet without working, but some of the agencies I currently contract with are eager to procure my grant-writing and organizational skills so why not earn some extra income for a rainy day?

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It is an interesting idea. I'm not sure if it will self sustain in the long term, though. It does mean that those with high earning degrees will pay more for their education than someone with a low earning degree. I'm not sure if that's fair or not (depends on how you look at it.) It may very well be a reasonable alternative to solving the student loan issue.
However, what happens if they don't pay it back? Are they going to attempt to enforce it through the IRS with tax returns? Because that is easily avoided. Are they going to use wage garnishment? If they cannot guarantee payment, this will kill the state's financial health over the next few decades. Also, if this program doesn't stay in place for at least 3 decades, the state actively loses money on it.

BIG risk here. I'm not sure the payoff will be worth it. As it stands, we have far too many people with degrees and no jobs, how will more degrees help? Will they do this for trade schools?

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@thumperchick: Yeah, and it gets messier if this is not required, but merely an option. I'd bet quite a few of people in higher paying fields, like MD/JD folk, would stay as far away from this as possible. And what about people that move out of state and become residents elsewhere? How will Oregon collect its money back then?

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ugh if we do things like provide higher education via taxes, we're going to end up like the Scandinavians (you know, smart and healthy and lacking our enormous socioeconomic gap)

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@lotsofgoats: not the scandalous socialist Scandinavians!

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Here is one for Washington State for 2012.

While an interesting concept, student loans are still not a good bet with the default rate at between 7-13% and that is with garnishing privileges. Granted 3% of your salary is probably easier to pay back than 7.9% intrest on an $84,000 education loan, but still...

http://www.ed.gov/news/press-releases/first-official-three-year-student-loan-default-rates-published.

I do not begrudge anyone an education, I just think the cost and the borrowing are out of control on so called public colleges.

FWIW, my daughter and I both took out loans for her education.

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@lotsofgoats: Well, yeah, that would be pretty horrific, all right.

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@thumperchick: Since a college degree is, for the most part, a key to open employment doors, I think that paying a higher price for the degree to open a better door is pretty fair. I was wondering if they are only talking about a BS, though. Some of the best paying jobs require advanced degrees or special schooling. It would seem unfair to charge 3% of the actual wage when only a portion of the educational cost was covered. Also, when does the clock start ticking? Would someone graduating with a BS and pursuing an advanced degree avoid the first four years of payback, or does it not kick in till later? I always liked the Northern Exposure concept, where a small town in need of a doctor paid for the cost of med school in exchange for a contract with the doc to have a medical practice in the town for a certain number of years.

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@moondrake: I've heard of that one, though it's rarer nowadays for that sort of thing to happen. I'd be all for that.

I think the big problem here is it's state level, and so Oregon would have trouble chasing down Janet the engineer who moved to California for a job for 3% of her wages. If it were federal level, then that's a different story and a lot easier to enforce.

Though I'd argue that the amount of money being spent at the university level is going less and less to the learning side of things (which most people, including myself, don't really begrudge) but more to the student life side of things.

It looks like everyone from all sides of the political spectrum have lots of questions about the nuts and bolts here, as well as implementation concepts. Hopefully Oregon will flesh those things out (if it hasn't already).

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@moondrake: Sorry, meant the Northern Exposure bit, where some company/group pays for an MD education in return for X years of working in the community or company. If it's a gig you can find, it's brilliant.

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I had multiple professors tell me while I wasin school that anyone who pays for their own graduate degree is crazy. I thought about pursuing a masters but thought it a better use of my time to work toward my professional licensure. I borrowed a VERY large portion of my undergraduate tuition. The payments are rough but managable. My earning potential far outweighs the cost of my education and I'll eventually be able to pay off larger portions and be done before the terms of my loans.

Looking forward is hard when you are young. Money for education is so easy to get that it's hard for many students to notice when they are getting into trouble. You don't have a financial advisor and if you have never really had to pay your own bills it's difficult to build a realistic mock budget to know what you can afford. It's all guess work and a lot of times you end up taking a chance. I am VERY good at math and knew (numbers wise) what I was getting into. continued.

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But I had no idea how much my mortgage would cost, or my health insurance, or car insurance, or utility bills. You are borrowing money over 4-5 years and keeping a running total isn't so easy. Most banks don't even start an account or sending statements until payments start. They certainly don't tell you that 3% over 5 years could easily add $5k dollars to your total balance. It's very easy to condemn the students who get in over their heads but if they don't have anyone to help or anyway to know what to expect it's a very easy mistake to make. They are no basic financing courses for general living, if there were they wouldn't be filled with useful info, they'd teach you how to invest your stock money or buy equipment for businesses.

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Yes, there are those who over borrow and know it. ($200k is a bit much) but the difference in $60k to $75k doesn't seem that bad until the payments come due. You can ask for help and do your own research every day but without experienced (or someone else's continuous guidance) you're still just guessing to a certain degree.

The system needs to change, the schools and banks need to provide better council. The state schools need to have real world financing classes as a requirement. 18 may be the legal age to borrow but you're more than likely still a kid at that point an have no idea what you are getting into.

I can see how this fund would be useful to some but the payback needs options or caps before I'd consider it.

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@figgers3036: less to learning more to student life? HAHAHAHAHAHAHA

I think its less to learning, less to student life, more to anything that makes someone somewhere money (a golf course that a student cannot afford to play on or a student welcome center that got the most "no" votes of anything in university history). That someone somewhere cannot be the school itself because the tuition and fees get higher every year. I hate fees. Fees are how they pay for the gym or the "free" student health center. Fees are what is incresing tuition to unaffordable rates.

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@nmchapma: Also it can be a good money after bad situation. Halfway through the student realizes they are in over their heads financially, but what can they do, quit? f they do they're unlikely to get a job good enough to pay back the amount they have already borrowed. So they have little choice but to forge ahead, digging themselves in deeper every step of the way. Maybe it would be worth considering doing school loans as a "forgivable loan". If payments are kept up each year, then interest for that year is forgiven. If a student keeps up with all the payments for the life of the loan or pays it off early then it is a zero interest loan.

I've always believed that real world financing should be a mandatory class in high school.

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@nmchapma: That's true, but students also can be spendthrifts. I have a friend who's 33 and lived in the real world for about 10 years so he ought to know better, but he just dropped $2,200 of his student loan money on a "Surface" tablet, because he couldn't live without a state of the art device which could meet both his school (minimal) and gaming (major) needs. He paid some outrageous additional cost (like $200) to have it fabricated and shipped in about a week rather than having to wait two whole weeks for it to be fabricated and shipped at the regular pace. A guy I know spent 20 years living off school loans and grants, using them for food and rent with no intention of ever graduating and starting to pay them back. Finally the college told him he was messing up their stats and he had to graduate or drop that year. Now he's homeless and will never pay back any of those loans. I'd like to believe that these folks are the exceptions, but it doesn't seem like it.