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Student-Loan Debt Tops $1 Trillion [Copy link] 中文

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Post time 2012-3-31 04:59:01 |Display all floors
This post was edited by sansukong at 2012-3-31 04:16

Updated March 22, 2012, 12:46 p.m. ET

Student-Loan Debt Tops $1 Trillion


The amount Americans owe on student loans is far higher than earlier estimates and could lead some consumers to postpone buying homes, potentially slowing the housing recovery, U.S. officials said Wednesday.

Total student debt outstanding appears to have surpassed $1 trillion late last year, said officials at the Consumer Financial Protection Bureau, a federal agency created in the wake of the financial crisis. That would be roughly 16% higher than an estimate earlier thisyear by the Federal Reserve Bank of New York.                                                

Total student debt outstanding appears to have surpassed $1 trillion late last year, roughly 16% higher than an estimate earlier this year by the Federal Reserve Bank of New York. Joshua Mitchell has details on Markets Hub. (Photo: AP/Reed Saxon)

The new figure—released Wednesday at a banking conference in Austin, Texas—is a preliminary finding from a study of student debt that the bureau plans to release this summer. Bureau officials said the estimate is based on a survey of private lenders, as opposed to other estimates that rely on a sampling of consumer credit reports.

CFPB officials say student debt is rising for several reasons, including a surge in Americans going to college in recent years to escape the weak labor market. Also, tuition increases—which many colleges say are needed to offset big cuts in state funding—have many students taking out bigger loans.
In addition, the interest costs on older loans are climbing as borrowers fall behind on payments, reflecting mounting financial strains, bureau officials said. New York Fed data show that as many as one in four student borrowers who have begun repaying their education debts are behind on payments.Economists say college is an increasingly good investment because of the widening pay gap between jobs that require a degree and those that don't. Ultimately, the educational degrees and added skills are meant to help workers earn higher incomes that, in time, will more than offset the student debt.But as more people go to college and assume bigger loans for education, they may take longer than previous generations to hit key milestones such as buying a house or getting married, U.S. officials and economists say. It could take longer for heavily indebted graduates to save money for a down payment on a home, or it could be harder for them to qualify for mortgages.Rohit Chopra, student-loan ombudsman for the Consumer Financial Protection Bureau, said student debt could ultimately slow the recovery of the housing market. "First-time home-buyers are a substantial part of the housing market," Mr. Chopra said in a speech at the banking conference in Austin. "Instead of saving for a down payment, these borrowers are sending big payments every month. "Student debt is a burden not just for recent college graduates in their 20s but also parents, who often co-sign their children's student loans, as well as midcareer professionals who opted to go back to school during the sluggish recovery. David Johnson, a 58-year-old groundskeeper from Milton, Wash., decided to leave gardening after more than two decades to become a nurse. Two years ago, he took out about $18,000 in private and federal loans to attend a local community college that had a nursing program. After completing prerequisite classes, he learned that the program had a waiting list. With no guarantee of getting into the nursing program, he is wondering whether to take out more debt to continue in school. "It's an awkward place to be. I'm not yet a nurse but I've got all this debt and interest compounding on me," he said. "I don't have a lot of working years left and I'm saddled with this debt.

"Write to Josh Mitchell at joshua.mitchell@dowjones.comA version of this article appeared Mar. 22, 2012, on page A5 in some U.S. editions of The Wall Street Journal, with the headline: Student-Loan Debt Tops $1 Trillion.

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Post time 2012-3-31 05:57:30 |Display all floors

RE: Student-Loan Debt Tops $1 Trillion

This post was edited by sansukong at 2012-3-31 04:59

Part: 1 of 2

Cost of education can ruin parents

Last Updated (Beijing Time): 2012-03-19    11:12

Desire to send students abroad comes at a very high price, reports Zhou Wenting in Shanghai.
A recent audit at Dickinson State University in the United States will have made uncomfortable reading for parents in China.
Over the last four years, according to the audit, the college in North Dakota had issued diplomas to 400 foreign students despite their failure to complete the required coursework.
Roughly 95 percent of these students were Chinese.

It was just one of several controls "waived or intentionally overridden or ignored" by DSU, according to the audit, which has again cast a spotlight on the risks families face in paying out huge sums to have their children educated overseas.
Such investments often create what sociologists call "the new urban poor".
"Parents are surrendering their last resources to wager them on a child's future by sending them abroad," said Lao Kaisheng, an education policy researcher at Capital Normal University.

"If these children don't get the decent jobs and the salary that is expected, their parents will naturally be sucked into poverty."
Ministry of Education data show that more than 330,000 people nationwide went abroad for study in 2011, making China the largest supplier of students to Western schools.

The desire to send offspring to schools overseas has existed for decades, although today it is largely fueled by the belief that it gives youngsters an advantage in the tough domestic employment market.
However, not many Chinese families have enough saved in the bank to cover the tuition fees and accommodation and living expenses involved in overseas study potentially hundreds of thousands of yuan. Instead, many are choosing to take on massive debt at a critical time in their own life.
It is a gamble, experts say, and the stakes are high.
"People need to think over the input and potential output, as well as the risks that any investment brings," said Zhang Jianbai, who runs a private school in Yunnan province and is a self-proclaimed "explorer" of new education models.
He said that parents in small cities across his southwestern province, many of whom earn just 2,000 yuan ($320) a month, often sell their apartments to fund their children's study overseas.

"Those who are now suffering trouble (owning property is important in Chinese culture) or financial difficulties would not have been in this position had they chosen a more suitable way to educate their children," he added.Differences in quality After graduating from the university in his native Guangdong province two years ago, Wang Jianhai was sent to Texas to get a master's degree, which his family believed would give him an edge in the job market. His father worked at an electronics factory in Zhuhai and earned more than 10,000 yuan a month, so the adventure was not a great financial burden. However, after his return, 26-year-old Wang was no better prepared to find work.
Even his English skills had not improved, he said, as "we stayed with other Asians most of the time".
Eventually, his parents had to invest more money to help their only son eke out a meager living by running his own electronics store.

"He hasn't earned a penny back for us, even though we've taken care of him for 26 years, while other people his age might have earned more than 200,000 yuan by now," said his 66-year-old father, who did not want to be identified.
"We could have had a decent life after retirement with our savings, but now we've painted ourselves into a tight corner," he added bitterly.

Wang said his father has had to quit his favorite hobbies swimming and rock climbing to save money. He added: "It's not just the lack of money, the feeling we're now poor makes me really ashamed when I'm with friends."

Although parents see an overseas education as a shortcut to success, experts argue that very few truly understand the vast differences in quality that exist among colleges in developed nations.

"The quality of the schools is varied, from heaven to earth," said Lao at Capital Normal University.
In the United States, for example, one of the most popular destinations for Chinese students, options stretch from world-renowned Ivy League universities, such as Harvard or Yale, to about 3,000 community colleges. There are also many diploma mills, which require very little or even no academic study.

Zhou Rong, a senior advisor at New Oriental Vision Overseas Consulting, said that although every student dreams of going to a prestigious college in the US, many fall victim to diploma mills.

She provides guidance to at least 300 students every year and said only one or two academic stars will make it into an Ivy League college, with rest enrolled in common or even "nameless institutes".

"Regardless of where they end up, ultimately the value of a diploma (in this country) has been undermined due to the sheer amount of people who pursue one," Zhang in Yunnan added. "It's extremely silly for someone to pay such a high price for a diploma."

Looking abroad
Despite the struggles being experienced by families and returned students nationwide, the demand for places at overseas colleges does not show any sign of abating.

All 35 final-year students in a class at No 1 Middle School affiliated to Central China Normal University in Wuhan, Hubei province, have decided not to take the national college entrance exam in June; each has instead been admitted to a higher education institute in the US.

To be continued ................

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Post time 2012-3-31 06:24:01 |Display all floors

RE: Student-Loan Debt Tops $1 Trillion

This post was edited by sansukong at 2012-3-31 05:28

Part: 2 of 2

Cost of education can ruin parents

Special classes for students applying to universities overseas have also become common at schools nationwide. Zhou Haoyu is part of such a class at Shanghai Yan'an High School. He said he has 21 classmates, which means one in every 18 final-year students is looking to go abroad.
Education industry insiders say foreign colleges have become increasingly eager to profit from this trend among Chinese students, especially since the start of the financial crisis.

"At international education fairs, which attract colleges from across the globe, any lecture or symposium about how to enroll Chinese students is guaranteed to get a full house," said Chen Danli, marketing manager at Aoji Enrollment Center of International Education, a consultancy service in Beijing.
Zhou Xiaozheng, a sociology professor at Renmin University of China, said everybody knows Chinese parents are willing to spend money on their children, but he warned that those looking to benefit today are largely "second- and third-rate colleges that don't offer scholarships or subsidies". As with any investment, foregoing due diligence dramatically increases the risk of making a loss. That is why Yunnan principal Zhang Jianbai says it is essential for families to take a pragmatic approach, so as to prevent them from wasting money and ending up in debt. Parents need to be reasonable, he said, as well as "clear about what they expect from the study period mental development or practical skills".

Personalities must also be taken into account, experts say, as not every youngster will be suited to the challenges of overseas study, which involves extra stresses such as coming to terms with language, lifestyle and culture differences, and requires a lot of self-discipline. Only by looking closely at the road ahead can parents avoid the pitfalls, Lao at Capital Normal University said.

"Using money that had been intended to improve the living conditions of people in later years to make blind investments in education will ultimately be wasted," he warned.

Editor's noteiao Bin, 55, spent his life savings to send his daughter to study overseas. His family is now struggling to pay off the debt. Until recently, I had an office job at a State-owned factory in Shanghai and was all set to retire in five years. I never expected our family would be in the crisis we're in now. My daughter Qiao Qian graduated junior college two years ago. At first she worked at a kindergarten, but after about 12 months she told us she wanted to join some colleagues who had decided to continue their studies in Switzerland.The total cost was going to be 660,000 yuan ($104,400) how many families have access to that kind of money? We were comfortable, but not rich.At first, I was reluctant, but after a few days I relented and gave my approval. I invested 460,000 yuan, which was almost everything we'd saved over the years, and then borrowed the rest from relatives.I had been under the belief that the money would guarantee my daughter a brilliant future. It's common for young people nowadays to earn a 10,000 yuan a month, so I convinced myself not to worry about the debt. Who'd have thought it would all have gone to waste?

Three years of study in Switzerland did not create the opportunities we'd hoped for. She has not settled down since returning to China, she has jumped from one job to another. We now have many family arguments.Life has become for more prosperous for others, but we're in reverse.

My wife and I have had to ration our food to gradually wipe off the debt.

In the end, I took a redundancy settlement from the Shanghai factory just before Spring Festival to pay back the money we had borrowed. Now I make a living working as a security guard.We'd planned to use our savings to move to a larger apartment once I'd retired, but there's no chance of that now.

I can only cry at home I don't dare to cry out loud, though, for fear of being heard by our neighbors.

My daughter's overseas study was a failure.

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Post time 2012-4-2 01:44:02 |Display all floors
This post was edited by sansukong at 2012-4-2 00:46

290,000 overseas students studied in China in2011

(Xinhua)    09:04, February 29, 2012

BEIJING, Feb. 28 (Xinhua) -- A record 292,611 students from 194 countries and regions studied in China in 2011, up 10.38 percent from the previous year, figures from the Ministry of Education show.

These students studied in 660 colleges, academic institutions and other educational organizations, according to a statement released Tuesday by the ministry.

Of the total, 25,687 were supported by scholarships from the Chinese government, up14.73 percent year-on-year. Self-funded learners, which accounted for the rest, increased by 9.98 percent year-on-year.

As for nationalities, the Republic of Korea sent the highest number of students to China, followed by the United States and Japan. ' "Students from overseas are a significant part of our country's education drive. We will further regulate education management and boost the quality of education for students from overseas," the ministry said in the statement.

According to the statement, the country aims to attract 500,000 overseas students by 2020.


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Post time 2012-4-4 16:39:43 |Display all floors

RE: Student-Loan Debt Tops $1 Trillion

The next frontier

Updated: 2012-03-24 07:49By Hu Haiyan (China Daily)

Even as a majority of foreign MBA students flock to big brand business schools in the nation's economic hubs, there are those that are taking the route less traveled.

For Simon Roberto, an IMBA student at Chongqing University, studying in a city like Chongqing, which is less well known in the West, is a chance to grab a front row seat to learn more about one of China's fastest developing cities.

"What attracts me most is the fast development of China's cities like Chongqing. And if you want to succeed here, you have to understand it well and immerse yourself here," the 31-year-old German said.

He said much like the locations in which they are housed, IMBA programs in second-tier cities are developing at breakneck speeds.

The Economics and Business Administration School of Chongqing University first started offering the IMBA program in 2010 and has since seen dozens of students pass through its doors,despite being in a lesser-known location.

"Through the development and increasing popularity of Chongqing city and our IMBA program, it is expected that by 2015, we will have about 150 foreign students enrolled in our IMBA program,"said Liu Xing, the dean of Economics and Business Administration School of Chongqing University.

Currently, there are 50 international students enrolled in the program.

It is the relatively removed location of second-tier IMBA programs that gives students unique opportunities, Roberto said.

"Because there are far fewer foreign students like me studying here than in the better-known cities, we enjoy more opportunities and resources to develop our talents," he said.

However, to cultivate a first-class IMBA program, Chongqing University still has a long way to go.

Xiong Bingqi, deputy director of the 21st Century Education Research Institute, a private,nonprofit policy-research body, said universities in lesser-known cities still lack favorable conditions for development of IMBA programs.

"Lesser-known cities are not as attractive to the foreign students and professors as best-known cities," Xiong said. "What's more, be it in employment opportunities or education facilities, less-familiar cities' universities still lag best-known cities," he said.

To bridge the gap, Chongqing University in cooperation with the Chongqing municipal governmentis offering incentives to attract foreign students to the IMBA programs. Notable among them is the over 100,000-yuan ($15,800) scholarship, which covers most of the expenses required to study in the 2-year program.

Primarily geared at foreign countries such as the United States, the school has made big efforts to attract first-class scholars to participate in education exchange activities.

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Post time 2014-12-18 10:59:58 |Display all floors
Most of those loans will never be paid back because most of those "students" will never be gainfully employed.

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