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The whole system needs reform. Tution prices are inflated because of federally insured student loans. People are so saddled with debt that they can't participate in the economy because their discretionary income is going towards interest payments for decades. It is a mess especially for the higher earning professions. Not sure what the solutions are, but I hope there are some found that are realistic and help give people relief.

I really don't get the whole private loan business. Basically the government gives them loans at 1 or 2% interest and then they give it to students at 6+? Why not just directly lend me money at 1 or 2%?

This topic frustrates me to no end. I hope I am able to pay mine off fast enough that I can offset some of my children's future costs and break this cycle. It is nasty.

@OpinionsLikeKittens: Honestly, no I really didn't realize how much money it would really be. I think I just say that because that is often the argument against student loan reform and I wanted to address it. But you are absolutely right, every single person I know/knew had student loans, so I figured it would all work out. Buuuut, hindisght is 20/20 right?

Jones makes some good points - especially about the defunding of higher education. When you have public universities which are no longer funded in the majority with public funds, the only way to make up that difference (while remaining a viable and full-service university) is by making up the difference in tuition. It isn't the fault of either federal or private lenders; a huge issue at the heart of the cost of higher education (and therefore, student loans) is the funding of public education in this country. Also, administrative costs in higher education - the private-sector salaries of many administrators are certainly not given to the rest of the public-sector faculty and employees.

Student loan reform is definitely needed. If we, as a country, really value a higher educated workforce; it doesn't make sense to make the cost of higher education and the resulting loans prohibitively expensive for the majority of people. And since we don't have the large numbers of manufacturing jobs and unionized employee support we've had in the past; having a higher educated workforce makes sense for all of us.

I can't say too much about student loans because I was fortunate enough to not need to take out any, but I can give some context into comparing US and Canadian schools and the costs. I attended a top private university in the US for a year before going back to Canada and completing my education there at a public university.

My first year tuition in the US was $22k but I got a scholarship for half the amount, so I was responsible for $11k for the year plus living expenses of around $10k. My tuition in Canada started at $6000 and increased to $8000 by the time I graduated. I knew that many of my classmates at my US school received scholarships or grants in addition to taking on loans. Most of my classmates at my Canadian school received no grant funding and some had small government loans, but many worked through the summers to earn enough to pay for school.

The biggest differences I saw between the schools was in the funding for research and funding for facilities and school activities. The American campus was beautiful, well-kept and the facilities were top notch. There were tons of fun campus activities, the athletic fields & facilities were top notch. Professors had budget to hire undergraduate research assistants.

My Canadian school was barebones. The computer labs had great computers but the buildings themselves were old, ugly and falling apart. There were almost no campus activities and professors had very tiny budgets and there were almost no undergraduate opportunities for research. To sum up the athletic facilities, the motto of the track team was "no track, no problem".

When you go to university, you are paying for professors as well as all the amenities that go along with the "college experience". All of it costs money and it usually comes out of undergraduate tuition fees. It's not to say all of this isn't worthwhile, because I do think some of it is, particularly the opportunity to do undergraduate research and to fund world class faculty. However, it all comes at a price.

I wrote this in another thread, I think the issue is really the fact that we have so many mediocre colleges and universities in this country that charge tutition as if they were in the Ivy League.

I used to think that a good benchmark for the total cost of your tuition was to compare it to what you could earn in that profession in a year, given some experience. Basically, if your education cost $100k, could you expect to earn that at some point in your career? If yes, great, if not, maybe look at a school that was less expensive. I don't think that is a reasonable measure any longer and frankly, I don't know what is an acceptable replacement.

@looch: I like the benchmark your referred to, I think it would be really helpful for people to look at it that way. The issue I had and I know many peers had was we had no clue what we wanted to do when we graduated, we thought college was going to magically make a path obvious and easy. I feel like career guidance is sorely lacking in our schools both at the college and high school level. I feel like with my peer group in high school a lot of people just knew they didn't want to work in a factory or other "blue collar" job so we went to college and that was the extent of our thought process. I don't regret it but I could have made a wiser choice with a bit more help.

@Mrs. Jump Rope: yea those of us who went to school from 2002-2008 have the privilege if high interest rates AND no job opportunities-- yay

@Mrs. Jump Rope: My husband also has a 2% fixed rate loan (started school 2002). Not sure how he managed it. Mine is in the mid 4s, percentage-wise, and we went to school at the same time.

@Mae: Yeah, I think right after I graduated (2006) was when job opportunities went down the drain. I got out of school right at the right time!

@OpinionsLikeKittens: @Mae: my federal loans (over 100k) are all at 6.55%. I get .25% off by paying with auto debit. All my debt is prom professional school.

It really is ridiculous that all my other debt is at a lower interest than my student loans and I have no opportunity to refinance. I can't refinance with a private lender because then you lose all benefits of a federal loan such as loan repayment opportunities.

I knew exactly how much debt I would have out of professional school. I can't pay the standard repayment on my salary, but that's why I work in a place I can get loan repayment assistance. I don't think programs like the one I am in will be around too long though because they are losing funding as well. It really is sad

@Mrs. Jump Rope: This is nuts to me. I think my whole 4 years of school cost about $70k! And that includes room and board and my meal plan!!

ETA: Just looked it up and it would now cost $26,436.00/year for my school. Inflation blows.

@Mrs. Jump Rope: I just went to a state university. In-state, so definitely cheaper than going out of state, but still, costs have definitely gone up! I'm NOT looking forward to the costs when Xander and baby #2 go to school!!

@Mrs. Jump Rope: I graduated in 2008 and did find a job (although my chosen specialization had disappeared due to lack of funding so I had to go another direction). My class was the last to have an okay-ish time finding jobs. But now 6 yrs out trying to find lateral positions is ridiculously hard.

@lizzywiz: Honestly, even at 18, I think it's crazy that people aren't thinking about getting a degree in something actually USEFUL. I actually WANTED to major in English because I really wanted to be an author, but my parents encouraged me to really think about my future and what the job market looked like and what I would really do with an English degree. Because of their encouragement, I ended up majoring in Computer Science instead and it was definitely the best decision I ever made! I'll probably never write a book, but I LOVE my job and what I do and I especially LOVE my paycheck!!! Plus finding a software job as a female was pretty easy since companies are always trying to be more diverse and inclusive and women in engineering is such a small percentage!

@Mae: oh I know. The federal gov lends money to private Liam companies at 1-2% and then they lend it out higher. I don't get why they can't give the students that rate anymore. My lowest loan is 4.75% and that is a flex rate. Eeep

I've recently learned that if the Feds paid for all state sponsored school, it would be cheaper than what they pay for the federal still deny loan program. I found that statistic mind-blowing.

I would not be where I am today without the amazing federal student loan program. But I went to school in an era where I consolidated my loans at 2.5% and was able to pay my huge debt burden off last March without problem. Seems like the rates that can be charged now are exorbitant and may prohibit students from achieving their dreams while being very lucrative for banks.

I'm very appreciative of Senator Elizabeth Warren taking this on! She seems to really get it.