With caps on amounts borrowed, HOW do students get into high debt like $200K +?

[Anonymous]

I’m not sure I believe all the TikTok’s but there are vids of college students joking about being 400K in debt. If this is true- how? Who’s lending them this money?

[Anonymous]

Just because someone hits caps on Stafford loans, etc., doesn’t mean that they don’t find other loans. And loan caps go up a lot with graduate school, so that even those loans can get you in a hole quickly. And then maybe they’re factoring the interest they’ll have to pay….

[Anonymous]

Graduate school.

[Anonymous]

Their parents are co-signing.

[Anonymous]

You've never heard of Parent PLUS loans?

Their parents are co-signing the loans.

[Anonymous]

Grad school loans can be much higher than undergrad.

[Anonymous]

Yes, no caps on grad school. Medical, law, dental, and unfunded PhDs rack up the max debt. WSJ had an article last year in the first person to surpass $1M. He had gone to dental school and residency at USC. Apparently you pay full tuition during dental residencies vs getting paid for medical residencies.

[Anonymous]

Terrible loans that recapitalize interest. Payment deferrals that add to amount ultimately owed.

They aren’t talking about the amount they borrowed, it’s how much they will ultimately pay.

[Anonymous]

Op-the high loan amounts are grad school debt. In America students can take out only the max $27kfederal unsubsidized loans (for all four years) meaning parents have to come up with the difference. Now a few voices in here will say that their kids will get private loans in addition to the unsubsidized ones but I’ve yet to hear of a bank willing to make a loan to a 17 year old with no collateral. (Even if parents copay). So it’s all back on the parents for undergrad. The big hue and cry of the media has been sleight of hand because that crisis us all about dental, medical, law and business school, etc

[Anonymous]

Anonymous wrote:Op-the high loan amounts are grad school debt. In America students can take out only the max $27kfederal unsubsidized loans (for all four years) meaning parents have to come up with the difference. Now a few voices in here will say that their kids will get private loans in addition to the unsubsidized ones but I’ve yet to hear of a bank willing to make a loan to a 17 year old with no collateral. (Even if parents copay). So it’s all back on the parents for undergrad. The big hue and cry of the media has been sleight of hand because that crisis us all about dental, medical, law and business school, etc

This is a recent rule (27.5K limit). This did not used to be the rule.

[Anonymous]

Anonymous wrote:You've never heard of Parent PLUS loans?

Their parents are co-signing the loans.

Aren't parent plus loans actually debts for parents?
Students are not on the hooks?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op-the high loan amounts are grad school debt. In America students can take out only the max $27kfederal unsubsidized loans (for all four years) meaning parents have to come up with the difference. Now a few voices in here will say that their kids will get private loans in addition to the unsubsidized ones but I’ve yet to hear of a bank willing to make a loan to a 17 year old with no collateral. (Even if parents copay). So it’s all back on the parents for undergrad. The big hue and cry of the media has been sleight of hand because that crisis us all about dental, medical, law and business school, etc

This is a recent rule (27.5K limit). This did not used to be the rule.

The limits haven’t changed that much over time. I took out the max in loans and owed a total of $17k in 1997.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op-the high loan amounts are grad school debt. In America students can take out only the max $27kfederal unsubsidized loans (for all four years) meaning parents have to come up with the difference. Now a few voices in here will say that their kids will get private loans in addition to the unsubsidized ones but I’ve yet to hear of a bank willing to make a loan to a 17 year old with no collateral. (Even if parents copay). So it’s all back on the parents for undergrad. The big hue and cry of the media has been sleight of hand because that crisis us all about dental, medical, law and business school, etc

This is a recent rule (27.5K limit). This did not used to be the rule.

The limits haven’t changed that much over time. I took out the max in loans and owed a total of $17k in 1997.

Was that the principal? Because when people defer payments and refinance and use those awful old consolidators, the amount owed balloons. Also, I think people are sometimes referring to what they will eventually pay with all the interest.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op-the high loan amounts are grad school debt. In America students can take out only the max $27kfederal unsubsidized loans (for all four years) meaning parents have to come up with the difference. Now a few voices in here will say that their kids will get private loans in addition to the unsubsidized ones but I’ve yet to hear of a bank willing to make a loan to a 17 year old with no collateral. (Even if parents copay). So it’s all back on the parents for undergrad. The big hue and cry of the media has been sleight of hand because that crisis us all about dental, medical, law and business school, etc

This is a recent rule (27.5K limit). This did not used to be the rule.

The limits haven’t changed that much over time. I took out the max in loans and owed a total of $17k in 1997.

Was that the principal? Because when people defer payments and refinance and use those awful old consolidators, the amount owed balloons. Also, I think people are sometimes referring to what they will eventually pay with all the interest.

The interest rate is low though. I think these huge amounts are parent loans and/or grad loans.

[Anonymous]

Income based repayment plans is the main problem. When you buy a car or house, your payment amount and term is very clear. For example, $1500 per month for 30 years, etc. With income based repayments, you pay a % based on your income. If your income is low, your payment is also low, but you are NOT paying down the principal and, interest in accruing every single month.

Another issue was during the pandemic when people, even though they were employed, didn’t continue to pay on their loan payments.
- Just my 2 cents