Given the sheer volume of free aids to compute every known statistic about student loans, it's hard to feel sorry for the stupidity of borrowers.
15
Student debt as a function of total education debt is under-calculated and misleading because it does not include the parental debt burden incurred.
10
Someone may have said this and I apologize if the topic has been covered. It is not only the parents of minority or disadvantaged students that do not understand the implications. I suspect that for each first child in a family entering college, the parents do not fully grasp the situation. Also, the colleges themselves declare the students as adults entitled to full privacy of information at the time of their enrollment. In our experience, and this is not well disclosed, the student must sign acknowledgment annually allowing the parents to have access to information, including financial. The colleges are not helping families understand.
10
How much should college cost? When I graduated from a state school in 1977, it cost me about $10,000 for room, board, tuition, and books...for the entire 4 years. My first job paid about $10,000/year, which was a little lower than average but in the ball park for my classmates. In other words, I exchanged $10,000 in education to get a job that paid that amount in it's first year.
My two daughters are graduating over the next two weeks. Costs, after grants, scholarships, and all aid (no loans) will be between $80,000 and $100,000 each. Even though they each will graduate with high GPA's and bio-chem majors, neither is in a position to get a job that will pay any where near that amount their first year. Only after at least another 2 - 3 years of graduate school, will they be able to expect opportunities for an annual salary in excess of $70,000.
I'm not complaining, I'm just saying the math doesn't seem to be right. For me, it was a 1:1 ratio, for them it's more like 1:2.
BTW, each went to a small private college and the costs, after the incentives offered by the schools, we're about the same, even less, then the closest state school. Don't rule out a private school, they're willing to help out financially if needed.
My two daughters are graduating over the next two weeks. Costs, after grants, scholarships, and all aid (no loans) will be between $80,000 and $100,000 each. Even though they each will graduate with high GPA's and bio-chem majors, neither is in a position to get a job that will pay any where near that amount their first year. Only after at least another 2 - 3 years of graduate school, will they be able to expect opportunities for an annual salary in excess of $70,000.
I'm not complaining, I'm just saying the math doesn't seem to be right. For me, it was a 1:1 ratio, for them it's more like 1:2.
BTW, each went to a small private college and the costs, after the incentives offered by the schools, we're about the same, even less, then the closest state school. Don't rule out a private school, they're willing to help out financially if needed.
13
Here are 3 things I know about student debt (having repaid since the late 1990s and on the cusp of being done) that I wish I knew when I borrowed the cash:
1. In repayment, never seek a forebearance unless absolutely and obviously necessary. And necessary would include things like being presently unemployed or in school at least 18 hours per semester. No job is too low-paying and always look for a job that pays more (but once you're in full-time mode, stay at your current job for one year if at all possible).
2. Rent. Rent. Rent (with roommates). Until your annual income equals or exceeds the amount of your student debt, you're a renter. Between condo fees and home improvements, you need a lot of money to sustain real property. Better to focus on paying off your debt that acquiring more debt.
3. Always pay yourself first. Pay for your retirement if your employer matches your contribution. If your employer doesn't match your contribution, get a Roth IRA and put 5% of your salary into it (and, when you're young, be an aggressive investor). Why do this with student debt? You'll always have debt but you don't want to be 40 and starting to save for retirement. It's much better to get as much as you can in your retirement as a 20-something. And, yes, stocks/bonds are much better -- long term -- than real property.
1. In repayment, never seek a forebearance unless absolutely and obviously necessary. And necessary would include things like being presently unemployed or in school at least 18 hours per semester. No job is too low-paying and always look for a job that pays more (but once you're in full-time mode, stay at your current job for one year if at all possible).
2. Rent. Rent. Rent (with roommates). Until your annual income equals or exceeds the amount of your student debt, you're a renter. Between condo fees and home improvements, you need a lot of money to sustain real property. Better to focus on paying off your debt that acquiring more debt.
3. Always pay yourself first. Pay for your retirement if your employer matches your contribution. If your employer doesn't match your contribution, get a Roth IRA and put 5% of your salary into it (and, when you're young, be an aggressive investor). Why do this with student debt? You'll always have debt but you don't want to be 40 and starting to save for retirement. It's much better to get as much as you can in your retirement as a 20-something. And, yes, stocks/bonds are much better -- long term -- than real property.
12
I recently talked to admissions counsellor for a graduate school program at my local state-run university. As a person in his mid-50s, I was considering becoming a nontraditional student enrolled in a post-graduate degree program. As the counsellor began to explain the admissions process for the Department that I was interested in, she breezily talked about "financial aid" for two or three minutes before I realized that "financial aid" meant a student loan. There was exact parity in the meaning of the two terms in her spiel. Not only was it not applicable to my situation, her use of the term "financial aid" to promote student loans was a jarring contrast to my recollection of the idea of "financial aid" as an undergraduate thirty years ago when that term conceptually meant a combination of scholarships, grants, work-study jobs and other financial resources. Now it's all about a loan. For what it's worth, I think it would be nuts to apply for a student loan in your 50s. My gut feeling is that I would try to avoid that as a young person as well.
9
sorry Kim, you will just not be able to have a latte everyday as your wealthy friends all do, but if you got the education $'s for the cost of a daily latte , that seems pretty good, and my guess is you are far ahead.
6
What is important is that Kim Liao went to Georgetown, with a value adding degree from a brand name institution.
She is much better off than the young adults who have come out of the diploma mills with that level of debt or more.
No bank will give you a house loan that is worth more than your house, but you can get a non-dischargeable student loan for a degree that is not worth what you pay. Why don't the loan officers apply similar standards to the educational loans?
She is much better off than the young adults who have come out of the diploma mills with that level of debt or more.
No bank will give you a house loan that is worth more than your house, but you can get a non-dischargeable student loan for a degree that is not worth what you pay. Why don't the loan officers apply similar standards to the educational loans?
19
I went to a private college. It is now a $240,000.00 school. My child goes to a well regarded public university. It is a $120,000.00 school. Amazingly, adjusted for inflation, I am spending more to send my child to a public university than it cost my parents to send me private...by a factor of 3x.
Sending a kid into the world with six figures of student loans is parental malpractice.
Oh and you can't discharge student loans...ever. It is true debt bondage.
Sending a kid into the world with six figures of student loans is parental malpractice.
Oh and you can't discharge student loans...ever. It is true debt bondage.
9
It may be parental malpractice but it's also student ignorance. There isn't much we can do about private college expenses, but there is something that we can do about public university tuition: elect state legislators who will reign in expenses at the state universities and reduce tuition to reasonable rates. They can start by halving the salaries of all administrators and increasing the undergraduate teaching load of fulltime faculty.
10
Easy solution: Make these debts dischargeable in bankruptcy. That will make lenders act more responsibly.
20
Sad that the money that students could have saved to put a down payment on a house has to be spent to pay down exorbitant student loans. The way student loans are structured - like mortgage or auto loans where interest is paid up front - should be changed. Since student loans are mostly exempt from bankruptcy, they should be treated differently, with interest paid evenly and more money credited to principal in early years. There's no reason why student loans have to be structured like a loan for a house, especially when they are given special protections from the government.
20
College tuition is one of the biggest expenses now hard-wired into our economy. There are plenty of other ones, like healthcare insurance, for example, but, if you look at the compensation packages for top university presidents, it is a lucrative job with both social prestige and power within the local community.
Part of that presidential compensation package is paid for by struggling students. This just seems wrong to me. If college is the new high school, and it is, it should be part of the American public education system, and should be as low cost as possible, with only basic fees needing to be paid, and it should be free for those under certain minimum family income levels.
Students should look for the best public university, or college in their state. They should make certain they have lived in their locality long enough to qualify for in-state tuition, then go there for their college education.
If they are qualified for one of the ivy league schools, and they are socially ambitious, they should go there, and look for foundation and grant money which will pay for their education. They should avoid Federally-guaranteed student loans as much as possible, and work while in school, and during the summers, too.
7
>>>If college is the new high school<<<
College has effectively become "the new high school" only because large multi-national corporations that happen to be operationally domiciled in the United States have made college degrees the requirement for many entry-level jobs.
I doubt you can find a single American who will disagree with education as a means to making something of oneself in our society, but the reality is that government spending on higher education is now little more than an implicit subsidy to large multi-national corporations, who can acquire large numbers of indentured "resources" to work in their boiler rooms.
College has effectively become "the new high school" only because large multi-national corporations that happen to be operationally domiciled in the United States have made college degrees the requirement for many entry-level jobs.
I doubt you can find a single American who will disagree with education as a means to making something of oneself in our society, but the reality is that government spending on higher education is now little more than an implicit subsidy to large multi-national corporations, who can acquire large numbers of indentured "resources" to work in their boiler rooms.
1
I'm worried that as soon as I graduate, I will be stuck in a bad job, paying piles of debt that I was told would get me a good job. If I can't find a job I'll doubtlessly be told to go back to get an advanced degree - and acquire more debt. Maybe in a parallel universe, I enjoy learning, but no thanks, not going to be a debt slave for life.
14
Actually, I really need to comment on this again.
Let me put it all in perspective.
I am currently a sophomore at a private institution, when I graduate, me and my family will have accumulated about 80k of debt.
Some will say, well why didn't you go to a public school? Well, because I got a good deal at the private school - and the public school would have ALSO cost me 80k for four years, as they provided basically no aid (thanks christie).
Some will say, why not go to community college for two years? I could have, but then I risk coursework not counting for credit when I get to a four year institution, and lacking the proper infrastructure to make important connections and network which is so important these days. All that on top of the stigma already associated with community college.
Some will say, work a summer job or during the year! I did, I paid most of my own expenses my first two years in terms of spending money, but working summers or during spare time during the semester CANNOT POSSIBLY make a dent in my debt, it simply isn't possible unless you have a great (read RARE) opportunity/job. PLUS, nowadays, WE ARE EXPECTED TO WORK FOR FREE, ITS CALLED AN INTERNSHIP.
Some will say, why did you go to college and accept the debt if you knew you might not be able to pay it?
I would then reply, what other RELIABLE (not risk laden) options did I have to get a "good" job with "good" wages and benefits.
I will tell you what I'm learning from this: No more debt for me.
Let me put it all in perspective.
I am currently a sophomore at a private institution, when I graduate, me and my family will have accumulated about 80k of debt.
Some will say, well why didn't you go to a public school? Well, because I got a good deal at the private school - and the public school would have ALSO cost me 80k for four years, as they provided basically no aid (thanks christie).
Some will say, why not go to community college for two years? I could have, but then I risk coursework not counting for credit when I get to a four year institution, and lacking the proper infrastructure to make important connections and network which is so important these days. All that on top of the stigma already associated with community college.
Some will say, work a summer job or during the year! I did, I paid most of my own expenses my first two years in terms of spending money, but working summers or during spare time during the semester CANNOT POSSIBLY make a dent in my debt, it simply isn't possible unless you have a great (read RARE) opportunity/job. PLUS, nowadays, WE ARE EXPECTED TO WORK FOR FREE, ITS CALLED AN INTERNSHIP.
Some will say, why did you go to college and accept the debt if you knew you might not be able to pay it?
I would then reply, what other RELIABLE (not risk laden) options did I have to get a "good" job with "good" wages and benefits.
I will tell you what I'm learning from this: No more debt for me.
54
Excuses, excuses, excuses.
6
For every student I've known that had over $50k in student loan debt after school, there is one general theme at hand. There was another school or situation they could have gone to that would have ended with less debt, sometimes significantly less debt. But for whatever reason it wasn't their top choice. The choice should not necessarily be fogoing your Ivy admission to attend the local town college, but it might be wise for students to include financial burden as a consideration in their 10+ apps they may be sending out, as well as where they end up ultimately.
17
My only frustration with student loans is that the interest is so high. I'm paying 6% on Federal loans and 1% on a car loan. It's horrifying how much money I've spent in interest on my graduate and undergraduate loans...and I know I don't have it nearly as bad as others.
I'd be thrilled with some sort of interest reduction - 3% would have me smiling. I've never missed a payment...it'd be great for some sort of reward for being such a great borrower. Sigh...I'll be paying until I'm in my 50s.
I'd be thrilled with some sort of interest reduction - 3% would have me smiling. I've never missed a payment...it'd be great for some sort of reward for being such a great borrower. Sigh...I'll be paying until I'm in my 50s.
11
Not an accurate comparison. Student loans are given to almost everyone, no matter how bad their credit or default risk is. Not the same with car loans. Student loan lenders have no collateral. Not the same with car loans. Student loans are given for 10 years on average. Car loans aren't.
3
But student loans cannot be forgiven even in a case of bankruptcy, unlike car loan. If that's the case, shouldn't interest rate be lower?
7
Student loan lenders don't need collateral when you can't clear them with bankruptcy.
3
Counseling is only part of the problem.
I felt fairly counseled and informed when I signed up for my loans. The problem? I NEEDED the education that came with the outsize price tag. I didn't feel that I had any financially affordable options that were viable or palatable. For example, one might suggest moving overseas for a cheaper education? But I had no money for the upfront costs, like plane tickets and initial accommodations.
Of course it is important that students be informed of the costs and risks of taking loans. But it's sort of a moot point when the vast majority of people NEED to take on these loans in order to enter middle class life.
The real issue is the cost of education.
I felt fairly counseled and informed when I signed up for my loans. The problem? I NEEDED the education that came with the outsize price tag. I didn't feel that I had any financially affordable options that were viable or palatable. For example, one might suggest moving overseas for a cheaper education? But I had no money for the upfront costs, like plane tickets and initial accommodations.
Of course it is important that students be informed of the costs and risks of taking loans. But it's sort of a moot point when the vast majority of people NEED to take on these loans in order to enter middle class life.
The real issue is the cost of education.
9
Or they could work for a few years and save up those upfront costs. Not everyone needs to matriculate at age 18. Unless there is dysfunction where the teen can't continue to live with family, even 20 hours a week at McDonald's would add up considerably over three or four years.
4
Our country is becoming more and more like Imperial Russia with huge concentrations of wealth in the hands of the few while the many struggle to survive. In today's NYT was a Real Estate article about luxury condo's going up in the Hamptons. They start at four thousand square feet because those who can afford beach homes for three million dollars don't want anything 'too big'. If four thousand isn't 'too big', what are their main houses like? When is enough enough for the One Percent? Our sons and daughters forgo educations or take on ridiculous debt to become our future doctors, scientists, mathematicians, nurses, professors, etc. etc. Their future is our future. What will we have to show for it in years to come? A job market that includes dog walkers, grocery shoppers, shoe shiners and pool cleaners? Royal dynasties found out too late. Are we condemned to repeat the past because we have forgotten history?
17
Wow! So basic and yet it simplifies so much. Like the guy who feels like he's paying two mortgages with only one house --- I am the proud owner of an invisible car. I have paid one loan of $26,00 in full and am now working on knocking off a $18,00 loan. Unfortunately, I have two kids who have started college and not obtained a degree; I think every parent needs to consider that college may not work out and they need to be prepared for some tough discussions on money and what now?
This is real money being spent and I feel a HUGE number of the students don't get it; it's too abstract. My recommendation ---- start at a reasonable community college and make sure the drive for success is there. Show them statements and get them up to speed of the real cost --- today and 10 years into the future.
This is real money being spent and I feel a HUGE number of the students don't get it; it's too abstract. My recommendation ---- start at a reasonable community college and make sure the drive for success is there. Show them statements and get them up to speed of the real cost --- today and 10 years into the future.
4
Community colleges are not worth the time nor the money. The type of people they attract, a student who has any desire to study will lose it, socializing with those semi literates. Study hard enough to get a scholarship to a second tier university, not an Ivy, but still reputable. Can't do that? May be better not go to college and come out loaded with debt. Third tier colleges are not that great help in the job market.
6
These loan totals seem low. I wonder what is the average student loan balance is if students that have no debt at all are eliminated from the average.
7
Universities are just another American corporation. They are in the lower ethical tier at that since they start out with the false premise that they are a ice all that and put students first. Universities are behind this since it has enabled them to overprice their product to young narcissists who are ripe to buy the tripe that "You are worth it!".
5
It doesn't look like you know what you are talking about. There are many reasons why the tuition keeps rising, but most universities don't really make "profit", there are no the same stakeholders as there are for corporations. People should start taking some responsibility for themselves. If one wants to study History, he shouldn't expect a job ready for him right out of college. It's no one's responsibility to provide him with one. If one chooses to study History on college loans, it's sounds like a bad decision to me, but it's still a person's decision and they need to take responsibility for it. People who go into marketable majors and get jobs afterwards usually don't complain about student loans because they have means to pay them.
3
@Sobaka: It is the administrative costs and non-educational amenities that are driving up the costs. There may not be shareholders, but these institutions are being run for the "profit" of a self-perpetuating class of administrators who are generally paid and treated better than the instructors and whose number grows incessantly. I'd almost think that these places would be more rationally run if there were shareholders complaining about the overhead costs, but then I see the fiascos of the for-profit colleges....
7
I guess that schools no longer teach history.
1
Kids don't really have a choice. Since there are so many college graduates, many jobs that arguably don't need a college education now require one. When my office was last looking for a receptionist, they ended up hiring a horribly overqualified marketing major from Lehigh University.
But what is the alternative? Should she have continued being unemployed? Should she have not gone to college in the first place so she wouldn't be able to even get the receptionist job?
The only thing you can do is give careful consideration to cheaper colleges and those giving aid. I don't know if going to school #60 is all that different from #260. State schools used to be a good option, but with state budget cuts, some of them charge almost the same tuition as private schools.
But what is the alternative? Should she have continued being unemployed? Should she have not gone to college in the first place so she wouldn't be able to even get the receptionist job?
The only thing you can do is give careful consideration to cheaper colleges and those giving aid. I don't know if going to school #60 is all that different from #260. State schools used to be a good option, but with state budget cuts, some of them charge almost the same tuition as private schools.
9
Aside from Ms. Liao's queasiness about paying interest on loan balances, there have been many articles where both defaulted and non-defaulted borrowers saying things like "Enough -- I have paid what I borrowed, and why do I have to pay more?"
That is a grant or a gift. A loan, by definition, means that you pay back more than what you borrowed. No one seems to have a problem with a mortgage where you may repay three times what you borrowed over 30 years, or a car loan, where many are now borrowing on 5 or 6 year terms. Part of the "comfort" in those cases is that consumers shop for a monthly payment they can fit into their budget, and they think very little about the interest factor.
Perhaps because it is a social program, some borrowers and pundits feel that paying interest on federal education loans is unseemly. If that is the case, then they need to face the options of of (1) accepting sharp tax increases or (2) cutting Medicare, Medicaid, defense, etc., to restore some of the funding for postsecondary education. At the state level, Medicaid has largely squeezed out funding for postsec ed over the past three decades. "Medicaid planning" became a thriving business, where financial advisers assist affluent citizens to get on Medicaid.
That is a grant or a gift. A loan, by definition, means that you pay back more than what you borrowed. No one seems to have a problem with a mortgage where you may repay three times what you borrowed over 30 years, or a car loan, where many are now borrowing on 5 or 6 year terms. Part of the "comfort" in those cases is that consumers shop for a monthly payment they can fit into their budget, and they think very little about the interest factor.
Perhaps because it is a social program, some borrowers and pundits feel that paying interest on federal education loans is unseemly. If that is the case, then they need to face the options of of (1) accepting sharp tax increases or (2) cutting Medicare, Medicaid, defense, etc., to restore some of the funding for postsecondary education. At the state level, Medicaid has largely squeezed out funding for postsec ed over the past three decades. "Medicaid planning" became a thriving business, where financial advisers assist affluent citizens to get on Medicaid.
4
Miss Liao is wrong. She did buy something for her daily interest and that was her education. It is worth a measly 2.23 per day.
4
The 2.23 is interest. It bought the loan. The principal bought the education.
1
When I was in school I watched almost all the other students buy new cars, take vacations, and buy new clothes with their student loans. I wish there was some data on this kind of use of student loans. Hey, when you're a student it looks like free money. The banks push the loans like heroin to young people who never had borrowing opportunities. I'd estimate that only 50% of the loans went to education....the rest to partying and cars.
8
Yep.
No question that for-profit colleges, universities with their non-stop construction mania and high admin/exec costs, etc. are a big part of the problem.
But I would pay good money to see the checkbook registers, bank statements and credit card spending history of any student complaining of high debt levels. I am sure we could find plenty of fat that could've been cut if students today weren't expecting the lifestyles and amenities of settled middle-class professionals even as no-income teen and twenty-something undergrads.
No question that for-profit colleges, universities with their non-stop construction mania and high admin/exec costs, etc. are a big part of the problem.
But I would pay good money to see the checkbook registers, bank statements and credit card spending history of any student complaining of high debt levels. I am sure we could find plenty of fat that could've been cut if students today weren't expecting the lifestyles and amenities of settled middle-class professionals even as no-income teen and twenty-something undergrads.
2
How is it that Germany just offered Free tuition for ALL students who qualify for any University? Also, even board and room for those with really bad finances. France , most Scandinavian countries also give free college. How come we are cutting back on education and our congress wants hundreds of billions for new weapons? How Come?
19
Profit.
"for all who qualify" is the operative sentence.
I would be that many of the semi-literate young people handed a high-school diploma (or in many cases "college degree") here in the US today would not be considered qualified. And the higher education industrial complex would shrivel up...
I would be that many of the semi-literate young people handed a high-school diploma (or in many cases "college degree") here in the US today would not be considered qualified. And the higher education industrial complex would shrivel up...
3
They have different priorities. They are "socialists", that is, they believe in the collective good rather than "pull yourself up by your own bootstraps, make as much money as you can, screwing anyone and everyone along the way and stash what you can in the Caymans". 99% of Americans don't understand the difference between socialism and communism so they lump them together and suffer the consequences.
7
Education should be free or with minimal fees. I better see my tax increased with educated Americans refusing to go for no reason to war, rather than paying for wounded uneducated soldiers who had no choice but go to the military to get "free" eduction. It is so obvious: individual contribution for the overall benefit of the country.
3
Education is free at your public library. It is the credential that costs money. Our society makes too much of them, but there are atill areas of the economy where people only care about your performance.
2
My family returned to California in order to establish residency, so that the children would be able to attend UC (with scholarships and loans) at a reasonable cost. This was exactly why the State of California established the state university system - as one of the biggest economic draws for a population that would thru its skills, training and professions strengthen the California economy. In turn, I gained entry to UC, chose to attend there rather than the several schools back east that I was admitted to, obtained three degrees and paid back my admittedly minimal loans in good time. It really only goes to show that investments are only worth what they produce - and buying something because it costs a lot is probably not much of a deal.
3
Just once, I would like one of these personal finance writers to demand documentation going back through the student's years of school and to scrutinize credit card statements, check registers, leases, car loan or registration statements, etc. for an honest talley of student loans monies spent on tuition, books and fees vs spent on discretionary items, dining out, travel, etc.
At my alma mater, the same-size student body supports orders of magnitude more eateries, bistros & upscale boutiques than it did 30 years ago. Same number of people, dozens of more chain restaurants and bars packed even on weekdays; students with large flat-screen TVs and apartments full of IKEA and Pottery Barn furnishings, streets lined with late-model SUVs, every student a smartphone in hand. When I was at the same school, one person in my circle of about 10 close friends owned a car -- an old K car. I could count on one hand the number of times we dined out in an entire academic year and we certainly were not doing spring breaks on student loans or semesters abroad. Nor did we have lavish wardrobes, $20 mascara and coordinated bedding. And most of us graduated debt-free or with minimal loans.
My sister's newly minted law clerk even crowed to her recently about how student loans paid for his Hawaiian honeymoon.
If you want those consumer goods and travel experiences, have at it -- but then don't come running to me whining that the loans which paid for them are too burdensome for you.
At my alma mater, the same-size student body supports orders of magnitude more eateries, bistros & upscale boutiques than it did 30 years ago. Same number of people, dozens of more chain restaurants and bars packed even on weekdays; students with large flat-screen TVs and apartments full of IKEA and Pottery Barn furnishings, streets lined with late-model SUVs, every student a smartphone in hand. When I was at the same school, one person in my circle of about 10 close friends owned a car -- an old K car. I could count on one hand the number of times we dined out in an entire academic year and we certainly were not doing spring breaks on student loans or semesters abroad. Nor did we have lavish wardrobes, $20 mascara and coordinated bedding. And most of us graduated debt-free or with minimal loans.
My sister's newly minted law clerk even crowed to her recently about how student loans paid for his Hawaiian honeymoon.
If you want those consumer goods and travel experiences, have at it -- but then don't come running to me whining that the loans which paid for them are too burdensome for you.
24
High school students have to take higher math to get into college, but don't get any Consumer Math to prepare them for the real world. Giving them a quick course about student loan debt is only going to help a little if they have a poor grasp of budgeting and financial planning. They need more guidance about how to calculate the income from their proposed occupation versus the student loan payments. They also need to learn how to analyze cost of living vs. salaries in making life decisions. Students needs more practical classes instead of so many theoretical ones. Colleges need to consider how to make students well-rounded, practical people instead of focusing so much on their status as research institutions. Research is great, but undergrads need financial and practical life skills very badly. How many college grads do you know that are idiots at handling money?
6
Is arrogance the problem here? College loan applications have cost disclosure statements. If you read them before you sign them you have been told what its going to cost.
It seems too many “students” are signing and taking the money without reading what they sign.
What did their parents and earlier education teach them, aside from arrogance.
No national service “draft”, no work experience paid or not, goody-two shoes never having gotten dirt on their hands or under their finger nails. An occasional internship in posh & arrogant offices perhaps. Abe Lincoln spilt rails (logs) with an ax, 100 years later I had a hydraulic splitter but the logs were placed in it and then stacked by hand after splitting. I see crews doing it occasionally today.
It seems too many “students” are signing and taking the money without reading what they sign.
What did their parents and earlier education teach them, aside from arrogance.
No national service “draft”, no work experience paid or not, goody-two shoes never having gotten dirt on their hands or under their finger nails. An occasional internship in posh & arrogant offices perhaps. Abe Lincoln spilt rails (logs) with an ax, 100 years later I had a hydraulic splitter but the logs were placed in it and then stacked by hand after splitting. I see crews doing it occasionally today.
Yes, students need to think about the total cost of student loans before they take them out. More important, they need to think about their course of study, will it pay off in the end. Gone are days of education for education's sake, unless one is independently wealthy and has the leisure to enjoy such trivial pursuits.
1
Student loans are no more than subsidies to colleges. These subsidies have financed all manner of non essential bureaucratic and other expenses by the college educational industry.
18
In California, the community college system provided me with the first two years of my undergraduate work. The University of California provided me with an affordable completion. The State University system enabled me to, over a ten year period as a single working mom, finish a masters degree. It was literally better in the long run to put my tuition on a credit card each semester than it would have been to take out student loans. When did I get into trouble? When I succumbed to the marketing of a private online university and began a PhD. Came to my senses $13K in, but due to an extended period of unemployment ended up paying $23K for that original loan. At 57, I was awarded a fellowship to earn the degree required to meet the pos-recession needs in my field. I advised my children to ONLY apply for and accept merit-based awards.
5
Anyone who does not at least consider studying abroard where studying is MUCH cheaper should get their head examined.
Example: You can study in Germany for free and living costs are likely about EUR1000/month. You can work on the side a little.
For $12,000 a year, the admission counselor will not even shake your hand.
Example: You can study in Germany for free and living costs are likely about EUR1000/month. You can work on the side a little.
For $12,000 a year, the admission counselor will not even shake your hand.
9
It's not just the amount, it's the interest. Relative to mortgage interest, interest on student loans has quadrupled in the last dozen years.
My own experience - after years in the workforce, in '02, I went back to school for a graduate degree, and graduated with student loans that I could consolidate for about 3%, compared to my mortgage, of 6%. Five years ago, I took out federal Parental PLUS loans for my daughter's undergrad education, at 8%. Since mortgage interest then dropped to about 4%, and I was fortunate to have enough home equity, I was able to refinance to eliminate them.
What that means is that student loans went from being half as expensive as mortgage interest, to twice as expensive. The government is making a handy profit off of our students and their parents; I believe the old expression for this is "grinding your seed corn."
My own experience - after years in the workforce, in '02, I went back to school for a graduate degree, and graduated with student loans that I could consolidate for about 3%, compared to my mortgage, of 6%. Five years ago, I took out federal Parental PLUS loans for my daughter's undergrad education, at 8%. Since mortgage interest then dropped to about 4%, and I was fortunate to have enough home equity, I was able to refinance to eliminate them.
What that means is that student loans went from being half as expensive as mortgage interest, to twice as expensive. The government is making a handy profit off of our students and their parents; I believe the old expression for this is "grinding your seed corn."
51
In the eighties medical students were paying 9-12%
Maybe along with both the "hard science" as well as anecdotal advice given to students (prospective or current) on financial matters we could also add financial and anecdotal advice regarding whether the cost-benefit analysis to attend graduate school (or which one)? I say this because I have two daughters for whom I paid all their college expenses (yes, they graduated debt-free with BS degrees), then went on to graduate school "on their dime." The result is they're both saddles with six-figure debt for the foreseeable future.
In one case, the cost-benefit equation looks favorable: government-guaranteed debt repayment based on earning potential as a DVM (veterinarian). In the other case, the chiropractic college my daughter attended wooed her with what now appears by all to be outrageous claims of professional success in the making. Well, not so much: She made a serious go of private practice for several years and worked very hard to bootstrap her business, but to no avail in the post-recession economy. She reports that out of the 15 classmates she keeps in touch with from her former school, only 2 report being reasonably successful in the marketplace. That's an abysmal track record, if you ask me, and points to the need for graduate schools as well to provide some sort of statistics to potential applicants as to the real-world results of former students in making school pay off.
In one case, the cost-benefit equation looks favorable: government-guaranteed debt repayment based on earning potential as a DVM (veterinarian). In the other case, the chiropractic college my daughter attended wooed her with what now appears by all to be outrageous claims of professional success in the making. Well, not so much: She made a serious go of private practice for several years and worked very hard to bootstrap her business, but to no avail in the post-recession economy. She reports that out of the 15 classmates she keeps in touch with from her former school, only 2 report being reasonably successful in the marketplace. That's an abysmal track record, if you ask me, and points to the need for graduate schools as well to provide some sort of statistics to potential applicants as to the real-world results of former students in making school pay off.
3
Great article! An aspect of this student loan debt nightmare that seems to fly under the radar is Parent borrowing. When colleges "boast" about how manageable their average student debt load is, they fail to mention that parents are often borrowing the same amount (and in many cases, far more) than the students. Where are the statistics about parent loans (totals, default rates)? Colleges don't volunteer this information and no one seems to be asking for it. Also, why aren't we (as a nation) squawking more about the potential cancellation of the Perkins loan program? This loss will just drive students toward much more expensive private loans. It's not too late to save this program, but the public needs to let Congress know that this is another unacceptable blow to students, particularly grad students (Perkins is the only federal subsidized loan available for advanced study).
8
I find it sad and ironic that we ask international students to prove they have the money to pay -- 36,000 must be in liquid assets before we let them even step one foot on campus..yet we allow our own students to be in enormous sums of debt. The college system is run on greed... When I started college in 2002, it was $400 for city college (with books) for the whole year (if you didn't live there). State school was $3000. Now it is 2k for city and 8k for state. I went the cheapest route, lived at home, and graduated with no debt. I thought about other more expensive schools, but realized it would be unfeasible to pay off that loan--having seen how my parents were still paying off the house they had bought in the 1980's and they had good jobs..I had no job and no guarantee of one. I'll never regret saying NO to private schools that wanted me. I would have been 75,000 in debt for 3 semesters of private school. The sad part is that the fancy school is honestly no different. Most people don't make use of the school's "network," and employers do not really care unless *maybe* it is Harvard. But those other institutions like Chapman, APU, USC, Pepperdine, etc....just squeezing money out of people. If you are middle class and want to stay that way, don't go there. Run. You end up being an indentured servant to the debt you rack up. PhD programs are becoming the same way. I said no to one when I found out it wasn't 100% covered and I'd be a professor's slave.
4
Why do we continue with this idiocy? The greed of every institution, especially our education system, guarantees the collapse of the nation. A) Virtually every college and university should be forced to collapse their prices otherwise lose their non and not for profit status (ditto for hospitals and others). Administrators receive lavish packages out of proportion to their value. B) Colleges and universities have to get back to education, not building lavish resort-like facilities. C) On-line education on its own will eventually destroy a good 1/4 to 1/2 of existing institutions. Start consolidating, liquidating and selling now. D) Require remaining institutions to charge no more than what is reasonable otherwise be forced to shut down. When forced to pare down, solutions will be found. E) Stop funding moronic weapons programs and use that money for education. F) GET RID OF TENURE! Have contracts that expand over time (e.g. 3-4 yrs for junior faculty, 6-8 for senior faculty). G) Force education increases to follow the same inflation curve for social security payments. H) Get RID of for-profit education at the college level. Talk about an absurd conflict of interest on many levels. There is so much that can be done, but this society will devour itself in utter stupidity and greed; the American way is based on making a $1 today at the expense of $10 or $100 tomorrow.
3
The time has come for a free fully accredited online University with the best professors in the world teaching the courses .
All you would need is a $300 laptop.
Kids would graduate owing nothing.
All you would need is a $300 laptop.
Kids would graduate owing nothing.
1
I agree ..... (:
And who would pay for the costs of this fully accredited online university with the best professors in the world? Developing, marketing, and producing online courses runs costs not quite as high as a Hollywood film, but not so far from it either. And *somebody* will have to pay those best professors in the world, to get them away from what it is they are doing now!
1
This is really pretty basic math, or accounting if one prefers. If kids are getting out of K-12 without these basic skills, not to mention the ability to understand that a loan is something that is not only to be paid back, but is something that accrues interest, and interest is a percent of that loan *added* to the loan balance, well, perhaps we should look a bit more critically at K-12.
It isn't rocket science, unless you are merely told you're brilliant rather than being taught to be brilliant (or, as in my case, rather average).
It isn't rocket science, unless you are merely told you're brilliant rather than being taught to be brilliant (or, as in my case, rather average).
3
Public two- and four-year colleges and universities are, by far, the best deal for the buck. Students should strongly consider attending their in-state flagship university or community college and live at home. Just living at home cuts the cost of a college education in half. In addition, apply for every scholarship possible. Just two or three $1500 or $2000 a year scholarships can knock of thousands from an annual tuition. Choose your major early on and try not to switch degree programs. Switching degree programs will add time to your college experience. Sit down early with an academic counselor to map out your course plan. The goal is to get in and out as quickly as possible. Testing out of entry-level courses in high school is one way to shorten the time in college. Finally, when it comes to books, don't be afraid to ask a professor if you can purchase the previous edition. Textbooks usually don't change substantially between editions, but students can save upwards of 90% of the cost by purchasing the previous edition to the new one. There are many ways to make college more affordable, but it takes some careful planning and smart choices.
5
I am a retired college administrator who often talked myself blue in the face trying to discourage students from taking out loans. With maximum TAP and Pell grants, they really did not need the loan money, or did not need the maximum amount offered to them for "living expenses". All too often, some students just dropped out after receiving the loan money. Some would return from Spring break with tales of vacations, showing off jewelry and clothing bought on these trips. I don't begrudge anyone a bit of fun, but not at the high price these students will pay. And the financial aid counselors didn't warn them at all.
7
I mostly worked my way through. Sure tuition was much more reasonable 30 years ago but I worked up to three part time jobs and NEVER went on a "spring break" trip. I even skipped graduation to work.
1
So called "subsidized" government loans created the same bubble in Higher Education that exists in Health Care and Housing. We are now conditioned to accept as normal high level of debt in pursuit of a College Education while our tax dollars go into new Football stadium and higher salaries. The rationale is that higher education is priceless and should be worth as much to your child as your average house. We are so brainwashed that we think it's a good deal that the balance due is merely the price of a high end SUV after four years of paying thru the nose.
3
The tone of moral superiority in some of these comments is insufferable. The argument is basically, "if you can't afford to pay back your loans, then don't borrow." The implication is that low-income students are not just poor, they're also stupid.
The truth is that low-income students are trying to break into the middle class the only way the American system permits them to -- by borrowing for college. Blue collar jobs no longer pay a middle class income; kids have to go to college. And in order to go to college, everyone has to borrow. It's the way the system works now. Even low-income students receiving lots of financial assistance wind up borrowing the maximum amount.
Work part time? Yes, they're doing that, too. But if a student is educationally disadvantaged to begin with, trading study hours for work hours just makes it harder.
These commenters are telling low-income kids who are trying to break into the middle class the only way our American economic system permits them to -- by borrowing for college -- that they're being irresponsible. I can't begin to imagine what kind of privilege and insularity are required to shape an opinion like that, but I'm beginning to sense a malevolent intention behind it.
If you add it all up -- low blue collar wages, high college costs, and the necessity to borrow -- you've got a pretty good system for keeping poor (i.e. "morally inferior") people down. And I'm beginning to wonder if it's not so much an accident as it is a design.
The truth is that low-income students are trying to break into the middle class the only way the American system permits them to -- by borrowing for college. Blue collar jobs no longer pay a middle class income; kids have to go to college. And in order to go to college, everyone has to borrow. It's the way the system works now. Even low-income students receiving lots of financial assistance wind up borrowing the maximum amount.
Work part time? Yes, they're doing that, too. But if a student is educationally disadvantaged to begin with, trading study hours for work hours just makes it harder.
These commenters are telling low-income kids who are trying to break into the middle class the only way our American economic system permits them to -- by borrowing for college -- that they're being irresponsible. I can't begin to imagine what kind of privilege and insularity are required to shape an opinion like that, but I'm beginning to sense a malevolent intention behind it.
If you add it all up -- low blue collar wages, high college costs, and the necessity to borrow -- you've got a pretty good system for keeping poor (i.e. "morally inferior") people down. And I'm beginning to wonder if it's not so much an accident as it is a design.
117
No one is trying to keep low-income students down. On the contrary, taking out loans is very likely to KEEP that low-income student from true upward mobility and wealth-building by saddling him/her with loan debt for years and years to come. Even the graduate with a B.A. and a $60,000 job right out of the gate is due for some pretty tough times if they've taken out student loans. Millions of Americans, low income and otherwise, have been sold a bill of goods about debt in general--that if you can afford the payments, you can afford the debt.
Word of advice to ALL would-be college students: yes, go to college--but do it WITHOUT DEBT. It can be done. Rachel Cruze's work is a good starting point for encouragement and strategies: http://www.rachelcruze.com/topics/college-planning/5-ways-to-pay-for-col...
Word of advice to ALL would-be college students: yes, go to college--but do it WITHOUT DEBT. It can be done. Rachel Cruze's work is a good starting point for encouragement and strategies: http://www.rachelcruze.com/topics/college-planning/5-ways-to-pay-for-col...
Loans for college expenses, like those for many other purposes, are a way to have in the present what could be had later by a combination of preliminary saving and partial deferral. Prospective borrowers should consider that, as well as the various trade-offs associated with deferral, like deferral of other things such as, perhaps, marriage, children, cars, and home ownership. It is not obvious that accumulating $25,000 - $100,000 or more in debt to obtain a college degree in 4 to 6 years always will be a better choice than a stretched out course of part time study that leads to a degree in 5 - 10 years with much less debt or none. Certainly it has been, for some, a distinctly inferior choice.
While it may seem a harsh judgment, it also is not clear that "educationally disadvantaged" students really belong in a full time college program. It may be that some do, others do not but would benefit from additional preparation, and that others simply do not and will not.
While it may seem a harsh judgment, it also is not clear that "educationally disadvantaged" students really belong in a full time college program. It may be that some do, others do not but would benefit from additional preparation, and that others simply do not and will not.
1
"kids have to go to college." On this your entire argument hinges. Where did you get such a notion?
The absence of which would put a rumble of hunger in your stomach sooner? Oil drillers, truck drivers, and farmers, or rather social workers, tort lawyers, and artists?
There are plenty of people without college degrees making six figure incomes in natural resource extraction. That is pretty solidly middle class.
The absence of which would put a rumble of hunger in your stomach sooner? Oil drillers, truck drivers, and farmers, or rather social workers, tort lawyers, and artists?
There are plenty of people without college degrees making six figure incomes in natural resource extraction. That is pretty solidly middle class.
1
The fact is our system is moving in the direction to bail out students and colleges who ran up these insane debts. The only thing catching fire in these new generations is their obligations. One more sign that there is no such thing as character anymore. These are the future leaders of our nation? Older people who did carry their weight and then some might as well get used to tins of cat food and hope for dementia so they can be oblivious to where this whole sham is headed. And no, it is NOT sustainable.
8
Many students have been the victims of the same sort of predatory lending that created the Great Recession and for which the banking industry has yet to be punished. Corporations - oops, I'm sorry - PEOPLE made millions or even billions of dollars exploiting the American Dream with both mortgage and student loans. If indeed the nation has awakened from that dream-turned-nightmare, it is not the fault of the students who go to school so that they can contribute to the economy and the country after graduation.
what frustrates me is that you go to school for your doctorate and a life situation comes up and you take a leave of absence for a year then you get ready to start back up and they tell you oh we no longer are offering your EDD program but we can see if the classes you took and wasted money on count towards any of our new programs! What a complete waste of money and my time and my sacrifice from my family! Now what do I do? Oh yeah pay back the obscene monthly payments on classes that are no longer valid to a doctorate. The crappy part was I was only one class away, getting ready to start comps, and begin writing dissertation! Ugggh
7
that is awful! Will no other colleges accept the credits?? :( I know something similar happened to a few people at CSULB in education, they were 2 classes away from having their credential, then they decided to change the requirements and a bunch of people were screwed over.
1
I never paid a nickel for graduate school. I always had a teaching assistantship or some other kind of support that included a living stipend.
2
I would be surprised if you didn't have some legal recourse. If you took only a year leave of absence they should have notified you during that time that the program was to be terminated.
1
Remember that even when you retire to take Social Security, students loans will be deducted upon the first SS check sent to you. Nice to think that your SS calculations upon retirement are not calculated until you do retire. There was a story on this subject in the NYTimes within 6 months ago. Nice to know your SS check will be less by 25% than the calculated one.
4
Yes, debt should be paid back. However, so many people who borrow, don't pay it back. Do you know anyone who has short sold a home? They are everywhere and I have not yet met one with remorse (about leaving the debt.) What we need students to know is that they may see others get out of mortgage debt, credit card debt, and even tax debt. Student debt is much more persistent than those I just mentioned.
The other point worth mentioning regarding student debt is, it is the foundation of your emerging credit score. Having a great credit score is paramount.
The other point worth mentioning regarding student debt is, it is the foundation of your emerging credit score. Having a great credit score is paramount.
2
Entering students should be made aware that paying student loans back will usually require that they be part of the system once they graduate. In general, they can forget about asceticism in Nepal, humanitarian work in Haiti or Detroit, entrepreneurial activities in California, whatever. In essence, they have staked their financial and moral credibility to being cogs in a machine fueled by money and money alone. So much for that pricey liberal arts education......
8
Prior to going to college, there should be a conversation:
The guidance counselor, the parents, and the student.
The guidance counselor should tell the parents and the student how much it will cost (tuition, books, room, board, and "walking around money") to go to the college that he or she wants to go to. The guidance counselor needs to then tell the student and parents how much it will cost and what the payments will be. Then the parents and student will know how much it will cost and how much it will cost. Then the student and parents will have to decide if going to a particular college is worth the money.
The guidance counselor needs to then provide various alternatives.
The guidance counselor, the parents, and the student.
The guidance counselor should tell the parents and the student how much it will cost (tuition, books, room, board, and "walking around money") to go to the college that he or she wants to go to. The guidance counselor needs to then tell the student and parents how much it will cost and what the payments will be. Then the parents and student will know how much it will cost and how much it will cost. Then the student and parents will have to decide if going to a particular college is worth the money.
The guidance counselor needs to then provide various alternatives.
On top of everything else, guidance counselors now have to be financial advisers??
At what point do the parents shoulder the responsibility of knowing their financial limits and explaining the reality of living within one's means?
sheesh. No wonder so many kids have no clue about money.
At what point do the parents shoulder the responsibility of knowing their financial limits and explaining the reality of living within one's means?
sheesh. No wonder so many kids have no clue about money.
1
Do you have any idea of the current ratios of guidance counselors to students? What you describe x number of students per guidance counselor x several colleges per student is not feasible. Never mind the fact that they aren't actually trained for financial advice.
Better to require a standardized form from each school outlining costs AND any financial aid they are offering.
Better to require a standardized form from each school outlining costs AND any financial aid they are offering.
University education should be free (or we'll end up with even more confused, coddled students who don't understand how to do basic math, problem solve, or critically reflect on their choices). It should also be competitive. Students who want to attend university shouldn't have to pay for it, so they'll be economically stymied; they should have to work hard for it, so they'll be an economic asset to our communities.
4
I was told that the world didn't owe me a living OR an education.
I am so tired of whining about student loan debt acquired by those choosing to attend private colleges and universities.
9
True...although I think now the cost of public school has also really skyrocketed. Some people though continue to make bad decisions to go to schools that are famous in name. Here in CA, a student can go to CSU for 4 years, live at home and pay 32,000 (in total), or they can choose to go to the famous UCLA and rack up around 64,000 (living at home). What usually happens though is a student wants the "college experience" of being "independent" and decides that while they live within a commutable distance to say CSU northridge, they'd rather go to UCSB and have to live there... then they owe $128,000. Personally I think students should only be allowed to go local, within a commutable range from their high school location. 50 miles max in distance. For dorms people should have to prove they have the money to pay upfront for them, vs student loans, and loan money should be in an account controlled by the school, not the student for trips to Cancun and drinks at bars.
1
The only private college I attended actually paid off my loans for that degree. My near 6 figure loan balance is due to public/state universities only.
Admittedly, I'm not whining though.
Admittedly, I'm not whining though.
Do you think that only kids going to private schools need loans?
Maybe you should educate yourself.
Maybe you should educate yourself.
2
What I learned: The student who is subject to having to borrow--which is most of them--cannot afford to act as if anyone else is looking out for their long-term financial well-being. It they have responsible and realistic parents with a sound grasp of the big picture, that's a rarity, and the student must still run their own numbers (trust, but verify.) Even if they have family to co-sign and help, anything could happen to their parents, grandparents, etc. before all student loans are repaid. The student ideally should get on top of the numbers years ahead of time. I assumed that my parents could not pay a dime, and as it turned out I was right. But they didn't share that information with me, and neither did the college (I had to obtain it by other means during my first year), forcing me to create and strategize from multiple contingent scenarios, then act from the scenario that best matched the bills I received. If I hadn't done that, it would have been a harder for me in the long run. What I wish I had known: that carrying the maximum work-study hour load, in addition to earning high grades and constantly worrying about end-running my parents in juggling the messy financing of my education, would be so hard on my health. If I had it to do over again I would try to find a way to borrow about 10% more than I did, and cut the work-study hours back to a more normal level.
14
Nobody seems to mention the saddest of all sad endings:
Those students with large balances on their federal student loans will most likely need to use the Income Based Repayment
Plan. After 25 years of making their income adjusted payments, the balance (conceivably larger than the original loan if the payment is less than the accruing interest) at that point will be forgiven. Oh joy! EXCEPT, it will be treated as regular income and you will be facing a gigantic tax bill; just as you're getting ready to retire.
My spouse racked up over $200,000 in student loans while earning an MFA at UCLA film school. It is now over $230,000 after eight years of paying between $630 and $900 per month on it. At year 25, I estimate his taxes on the forgiven remainder will be well over $100,000!
Those students with large balances on their federal student loans will most likely need to use the Income Based Repayment
Plan. After 25 years of making their income adjusted payments, the balance (conceivably larger than the original loan if the payment is less than the accruing interest) at that point will be forgiven. Oh joy! EXCEPT, it will be treated as regular income and you will be facing a gigantic tax bill; just as you're getting ready to retire.
My spouse racked up over $200,000 in student loans while earning an MFA at UCLA film school. It is now over $230,000 after eight years of paying between $630 and $900 per month on it. At year 25, I estimate his taxes on the forgiven remainder will be well over $100,000!
30
I strongly recommend your partner seek employment in the Federal government. Many agencies offer loan-repayment schemes. http://www.opm.gov/policy-data-oversight/pay-leave/student-loan-repayment/
All these comments about how "entitled" the current crop of college graduates are with their refusal to drive around in a "junk" old car, stop drinking their lattes, etc is just unfounded assumptions. Public universities in NJ costs $28K - $30K/year so the idea that you can avoid student debt by not going to the small private liberal arts college is ridiculous when 4 years here will cost you close to $120K. There is NO SUCH THING as working a job during the year, while being a full time student, to pay for tuition. The minimum wage you receive will not begin to make a dent in the costs. Maybe this was the reality pre 1980 but this doesn't exist anymore. It's almost impossible to be middle class get a few kids through college with taking on some kind of debt, parent or student. I guess what you really want these kids to do is forgo school completely because unfortunately for them, they became college age during the wrong time. Tough luck for them, right?
98
what about not living on campus? what about getting a technical degree or learning a trade instead?
This information is simply wrong. Tuition at Rutgers can be found on the Rutgers website. In-state tuition plus mandatory fees per year at the New Brunswick campus total $13,813. (Books & living expenses not included.) That is less than my private school college tuition + fees was TWENTY years ago - without even adjusting for inflation. I understand that it's tough out there, but please stick with the facts.
If they live in New Jersey, yes. But then, living in New Jersey isn't luck, that is a choice, just as it is a choice by the people of New Jersey to depend their bloated tax collection on something else.
This is why I went to CUNY, and I would recommend students give all of their local State and City universities a serious, second look.
11
I am about at the point at which I am going to stop reading these articles.
How ugly and mean-spirited so many of these comments are. We are bankrupting the next generation before they even get started, ensuring they and their children will have a nearly impossible task to claw their way out of poverty.
Forgive the bulk of student loans. Between onerous interest rates and a job market that holds employees in contempt, it is the least we can do to give today's students a chance at prosperity.
How to pay for it? Gee, we found money to bail out the banks, and to wage needless and immoral wars. I'm betting the money is there somewhere.
How ugly and mean-spirited so many of these comments are. We are bankrupting the next generation before they even get started, ensuring they and their children will have a nearly impossible task to claw their way out of poverty.
Forgive the bulk of student loans. Between onerous interest rates and a job market that holds employees in contempt, it is the least we can do to give today's students a chance at prosperity.
How to pay for it? Gee, we found money to bail out the banks, and to wage needless and immoral wars. I'm betting the money is there somewhere.
64
Really? you want to forgive all the student loans? Well that's a great way to teach the graduates (and some who never graduated) that they can just walk out on their responsibilities.
There are many ways to get through school without crushing student loans - choose a less expensive school, do the first 2 years at a community college, enlist in one of the armed forces, work a few years to save some money, take AP classes in high school, live at home instead of in a dorm.
I have 2 offspring that are recent college graduates and neither of them have student loans. Of course they worked through college and I don't own a car that less than 10 years old. When these kids ask why are they paying for someone else's student loans, what would you like to tell them? You are betting the money is there somewhere? Yes - it's in the taxes that we pay and in Connecticut we haven't even made it to tax freedom day yet. So every dime my family has made this year is still going to pay taxes - hoping some day they will let me keep some of it.
There are many ways to get through school without crushing student loans - choose a less expensive school, do the first 2 years at a community college, enlist in one of the armed forces, work a few years to save some money, take AP classes in high school, live at home instead of in a dorm.
I have 2 offspring that are recent college graduates and neither of them have student loans. Of course they worked through college and I don't own a car that less than 10 years old. When these kids ask why are they paying for someone else's student loans, what would you like to tell them? You are betting the money is there somewhere? Yes - it's in the taxes that we pay and in Connecticut we haven't even made it to tax freedom day yet. So every dime my family has made this year is still going to pay taxes - hoping some day they will let me keep some of it.
9
Less than 10% of people default on their loans. You have to pay for what you buy, even if it is a dumb purchase.
Elizabeth, I'm with you. It would be very easy if all these students were lazy, entitled babies with no brains and worthless parents. That's just not the case. Yes, loans must be paid back. But please tell me where it makes sense that a state school now costs 18,000 and up a year? I graduated with no debt in the mid 80s from a small Midwestern university...I was able to afford the 3,000 a year tuition and board by working. In 2005, when my niece enrolled at the same school, tuition alone was almost 20,000 per year--after board, it was over 30,000. How can costs be that high? How in the world would someone pay that back with the lack of decent jobs available? She decided against it and worked hard to get on with a company that would help reimburse her tuition costs, although she had to move 1,000 miles away from her family to do it.
Why don't the angry types turn those judgmental eyes towards these colleges that have become giant profiteering engines? How about questioning the lousy return on investment? Instead of seeking new ways to be horrible and snarky, stop believing that there are only 2 kinds of folks--you smart, honorable types and the rest of us low lifes. It's not only pathetic, it increases the vitriolic storyline embraced by those who will profit by supporting such a class divide.
Why don't the angry types turn those judgmental eyes towards these colleges that have become giant profiteering engines? How about questioning the lousy return on investment? Instead of seeking new ways to be horrible and snarky, stop believing that there are only 2 kinds of folks--you smart, honorable types and the rest of us low lifes. It's not only pathetic, it increases the vitriolic storyline embraced by those who will profit by supporting such a class divide.
2
I am an adjunct at a prestigious private university that costs about $30K a year. Adjuncts, who are often among the best professors, are paid very little. Where is the high tuition being spent? On sports teams and stadiums?
I paid my own way through college with the help of a student loan of $10,000. It took me ten years to pay the loan off. I can't imagine carrying $100,000 in debt. My current job is as a government attorney, and the pay is at least half what I made in the private sector. Jobs for lawyers are not as plentiful as they were when I graduated over thirty years ago. I used to encourage young people to go to law school. No more. Consider what your income will be after graduation, assuming you are fortunate enough to land a job in the field in which you studied, and gauge your debt accordingly.
I paid my own way through college with the help of a student loan of $10,000. It took me ten years to pay the loan off. I can't imagine carrying $100,000 in debt. My current job is as a government attorney, and the pay is at least half what I made in the private sector. Jobs for lawyers are not as plentiful as they were when I graduated over thirty years ago. I used to encourage young people to go to law school. No more. Consider what your income will be after graduation, assuming you are fortunate enough to land a job in the field in which you studied, and gauge your debt accordingly.
10
nice to see someone be honest about becoming a lawyer. We have far too many professors insisting students follow in their paths.
1
A close friend of mine stumbled through a life marred early on by a traumatic brain injury, hanging on as best he could until the safe haven of his $1400/month Social Security finally kicked in at age 62.
Except it isn't a safe haven at all .The IRS and his old student loan lop $600 off the top of that before he even sees it. $1400/month would have been tight but doable...
Except it isn't a safe haven at all .The IRS and his old student loan lop $600 off the top of that before he even sees it. $1400/month would have been tight but doable...
5
Here's a free counseling session for all you poor folks who feel life is treating you unfairly:
Lesson # 1: Borrowed money really must be paid back. If you cannot afford to pay this money back, you should not borrow it.
End of session.
Lesson # 1: Borrowed money really must be paid back. If you cannot afford to pay this money back, you should not borrow it.
End of session.
6
This lesson is incomplete.
Lesson #1: Borrowed money really must be paid back. If you cannot afford to pay this money back, you should not borrow it.
Addendum: Lesson #2: If you must borrow more money than you can ever reasonably expect to repay after graduating from your chosen field of study, you should change your field of study, go to a less expensive school, or both.
Lesson #1: Borrowed money really must be paid back. If you cannot afford to pay this money back, you should not borrow it.
Addendum: Lesson #2: If you must borrow more money than you can ever reasonably expect to repay after graduating from your chosen field of study, you should change your field of study, go to a less expensive school, or both.
6
... therefore, don't even think of going to college. College is for rich people like me and my children, who will forever be your social, economic, and moral superiors. Get used to it.
1
How less expensive do you expect the school to be? Pray tell, how much is a four years tuition at a good public university in South Carolina and what is the minimum wage there that a student can expect to make so they can pay off all their tuition, fees, books, commuting expenses (because God knows, it usually costs just as much to live on campus as tuition) while they are attending school full time? And can the South Carolina public university assure them with their marketable, needed STEM major they will make enough money to pay off any loans that they needed even though they attended a less expensive school? There are no guarantees, even from public universities that you all think are so much less expensive and even with those with desirable fields of study.
"Given the hopscotch manner in which students take on debt each year, loan by loan, it is much too easy to lose track of your running total."
How hard is it to write down the numbers for all the loans (regardless of whether it's federal or not) that one should be paying on a monthly basis??? There are lots of online calculators to help you figure out how much interests you'll be paying. I'm sorry, but for a college grad to say that she has no idea how much she's paying until some debt collector tells her she's paying $2.23 interest per day??? What kind of college grad is that??? My bet is, most of these borrowers have no idea, not because resources are not available, but because they don't bother to look.
"...there was pressure on her to work part time as an undergraduate — not to pay her way but to send money home."
How relevant is this, really? I worked part time jobs - three of them, actually - during my college days. I paid my way through college with no college loans. Yes, it's hard work but I wouldn't even bother to bring that up as a discussion point. In fact, it toughens up my grit toward life and adversity. Grow up.
How hard is it to write down the numbers for all the loans (regardless of whether it's federal or not) that one should be paying on a monthly basis??? There are lots of online calculators to help you figure out how much interests you'll be paying. I'm sorry, but for a college grad to say that she has no idea how much she's paying until some debt collector tells her she's paying $2.23 interest per day??? What kind of college grad is that??? My bet is, most of these borrowers have no idea, not because resources are not available, but because they don't bother to look.
"...there was pressure on her to work part time as an undergraduate — not to pay her way but to send money home."
How relevant is this, really? I worked part time jobs - three of them, actually - during my college days. I paid my way through college with no college loans. Yes, it's hard work but I wouldn't even bother to bring that up as a discussion point. In fact, it toughens up my grit toward life and adversity. Grow up.
4
yeah, right, grow up and don't notice the kids with no need to pay or work because they have it handed down from the parents. They are the ones who will go to famous private colleges and have a CEO position lined up as soon as they get out of college...while the rest of us have to work, pay for loans and have to wait for years until the degree pays off....WHILE IN CIVILIZED COUNTRIES IF YOU ARE SMART TO MAKE IT TO COLLEGE YOU HAVE NO BILL BECAUSE IT'S FREE FOR THE WORTHY
4
These are the same students who can't keep track of assignment due dates and their own midterm and homework grades, and so pester the faculty for how they are doing. Time for some chlorine in the gene pool.
4
I can tell you didn't graduate college in the last 10 years or so, when the yearly cost for even a state school can run 18K or more. I'd really love to see a non-stripper make 18K a year while full time. I do so love it when old people rattle their canes and say "Back in my day..." Their dusk is soon approaching and then this straw man can finally be buried. Literally.
3
All the articles I see cover undergraduate loans which tend to be subsidized tot he tune of 4% or less if qualifying for pell grants and other monies. What's NEVER discussed is the CRIPPLING debt service of graduate school loans. I am currently accumulating debt that will amount to approximately 200,000+ to cover only tuition for 4 years of medical school and my loans will have an average of approximately 7% thanks to recent decreases in interest rates approved by congress. Why shouldn't my tuition and other graduate student tuitions be subsidized at the same level, or lower, than undergraduates given the economic stimulus that many graduate students go on to provide? At minimum, graduate students merit lower interest rates solely based on the fact that we are far less likely to default on our loans given a much higher earning potential than someone taking on a loan for a 4 year undergraduate degree at a for profit institution. I'm thankful that I will have a job when I graduate to pay back my debt and while there are some programs for medical professionals to pay down their loans, however, it's absurd to penalize individuals pursuing advanced degrees.
57
Check out: http://nhsc.hrsa.gov/loanrepayment/
If you work with certain underserved populations, you may be able to get your loan reduced or forgiven.
If you work with certain underserved populations, you may be able to get your loan reduced or forgiven.
This makes no sense. You are going to be a doctor. That will give you an income well above the average income in the united states. But you want the Federal Government to *increase* the subsidy it already provides you in the form of below-market interest? What should we do in order to pay for that? Cut programs that benefit the less well off and the truly poor? Or should we raise taxes further. And if raising taxes, who should we raise them on (since you apparently feel that doctors are taxed to heavily already). Your comment is little more than "I want more and I want to pay less." Well, get in line ... everyone does.
As an educator with a Masters degree, I know the value of having the highest form of schooling in a chosen profession. That being said. I didn't go to Harvard for either of my degrees and am quite debt free. I tell my students that they need to find what they like to do and then do whatever is required to create that life in the most affordable way. I then tell them this includes; networking and working their way up in their vocation of choice, obtaining a degree or certificate, etc. I tell them that rarely will their job depend on the school that their degree is from but that it depends on their willingness to be innovative in their chosen field, whether its flipping burgers or rocket science. I then EMPHASIZE that they learn to live on what they earn.
6
I cannot believe a 16 year old made this list of his financial situation.
2
I cant believe he was getting 10% on his money.
2
Another caveat: keep good records! I attended medical school during the days of the Carter administration, when financial aid was more available than today. I thus graduated with loan debt that was small by today's standards. I made my monthly payments faithfully, and close to the time my debt was to be discharged, I received a cryptic letter from my lender. An "error" had been made in the terms of part of the balance of my loan, and I was told to destroy my remaining payment coupons. I received 2 new books of coupons in the following days. Even though my new total monthly payment was much smaller than my previously, I received a surprise when I sat down and reviewed my original promissory note: my total new payment was to be over $600.00 more than previously! Since my loan had no prepayment penalty, I sent the lender the lump sum of the total payments due under the old scheme, along with a letter saying that my loan obligation had been discharged. Although the lender promptly cashed my check, I soon started receiving delinquency notices from both the lender and NY State, the guarantor of my loan, that I was in danger of default. Finally, after a two year fight, I received a letter from the lender congratulating me on having satisfied my student loan obligation. In the years since, I have often wondered if this is a common tactic by lenders to increase their profit margin, since many individuals would have made the instructed additional payments without question.
12
Nobody should ever profit from offering education, in this country. The minute anything becomes a money maker, the abuse begins. Americans should be able to expect to receive a full education and reasonable health care, paid for by progressive federal taxes. No citizen should ever go into debt to receive an education or necessary medical attention. Our system is backward and destructive, and the longer it goes on, the worse off our country will be.
17
It's mighty tough to get good information about the net price for all 4 (or 5) years of college at each university. (By net price I mean the price net of outright grants.) Some schools will offer a lot to freshman students then magically pull the rug out on sophomores and up. Others will make it look like the loans are a part of the financial aid package, but they're really not.
Parents and students need to realize that this is a huge purchase, and comparison shop based on price (and not based on how fancy the student union is or the athletic facilities). If more folks did this, there might be more price competition among colleges.
Parents and students need to realize that this is a huge purchase, and comparison shop based on price (and not based on how fancy the student union is or the athletic facilities). If more folks did this, there might be more price competition among colleges.
7
I graduated from a third world country, which cost me 1500 $ for six years tuition and then I got a job in US, around 50k salary . I don't know why education in United state ,as a first world country is so expensive .
21
It is because people are beguiled by reputation and not by value.
3
When I was in law school I remember hearing the old saying "Live like a lawyer as a law student, you'll live like a law student as a lawyer".
I fully support accountability in college costs and reining in administrator salaries and out-of-control sports programs that cost money and produce no new knowledge, but to the extent these loans were to support lifestyle rather than education, the students should blame their parents for not educating them on finances. My suspicion is that the vast majority of those whose parents are truly poor and uneducated actually got a better education in thrift, and that the majority of students who face this have parents who should have known better.
Oh, and as for the $2.23; Get some perspective. Would she rather have a coffee a day or her education? If my children could pay for college at the cost of $2.23 a day FOR THE REST OF THEIR LIVES, I'd be overjoyed. There are any number of less valuable things that you will be paying far more for in your life
I fully support accountability in college costs and reining in administrator salaries and out-of-control sports programs that cost money and produce no new knowledge, but to the extent these loans were to support lifestyle rather than education, the students should blame their parents for not educating them on finances. My suspicion is that the vast majority of those whose parents are truly poor and uneducated actually got a better education in thrift, and that the majority of students who face this have parents who should have known better.
Oh, and as for the $2.23; Get some perspective. Would she rather have a coffee a day or her education? If my children could pay for college at the cost of $2.23 a day FOR THE REST OF THEIR LIVES, I'd be overjoyed. There are any number of less valuable things that you will be paying far more for in your life
3
I don’t know why any of the commenters criticize Ms. Liao. The article says that having debt “didn’t sit well with her”. That’s a good thing, folks. Debt should not sit well with people. Ms. Liao didn’t like giving her money away to banks, so she paid off her loans early. Good for her. Thank you, Mr. Lieber, for highlighting a sensible person.
6
Huh? These are college students too ignorant to read and understand about their student loans? Their bad. Or is it President Obama's bad? He took over the student loan industry in 2010. You choose. This is like home ownership borrowers who took on loans they couldn't afford to repay. The far-left media and Democrat politicians, including most egregiously, the president of the United States, blamed banks. Not borrowers or the government whose control of Fannie Mae and Freddie Mac led to the financial panic and recession. Personal responsibility is now a quaint old-fashioned concept, according to the New York Times and its left-wing sycophants, "Personal responsibility" -- look it up.
Http://www.periodictablet.com
Http://www.periodictablet.com
1
Yes, counseling would have been a good thing.
The major problem, however, is that the cost of college has risen much faster than incomes. 40 years ago, I graduated from one of the more expensive schools in the country, My parents were lower middle class. I graduated with $6,000 in debt. A typical starting salary might have been $9,000/year. That load of debt, with that sort of income, was manageable.
Today, a young person could graduate with $70,000 in debt, and a starting salary (if he has a job at all) of $35,000/year. That is an unmanageable load. If college costs tracked inflation, and if the job market weren't so dismal the last few years, this wouldn't be the issue it is.
The major problem, however, is that the cost of college has risen much faster than incomes. 40 years ago, I graduated from one of the more expensive schools in the country, My parents were lower middle class. I graduated with $6,000 in debt. A typical starting salary might have been $9,000/year. That load of debt, with that sort of income, was manageable.
Today, a young person could graduate with $70,000 in debt, and a starting salary (if he has a job at all) of $35,000/year. That is an unmanageable load. If college costs tracked inflation, and if the job market weren't so dismal the last few years, this wouldn't be the issue it is.
9
Who sold Americans this idea of the only way to success was a college degree? This is crazy to think everyone has the brains enough to a good degree for a well paying job. Why should those who work in supermarkets pay the price in low wages for no degree? The min wage in Australia is $15 a hour and I do not expect people to live on "tips". Is this all part of the American dream, if it is.... get on a boat and leave..
6
How about some honesty about a lot of this student debt???? Another NYT article tried to create a sob story about borrowers. One of the student borrowers was living in Manhattan and had a dog and was struggling. Poor thing... imagine rent was high and an apartment that allowed dogs was a challenge. She was a political science major whose education included according to LinkedIn study abroad. My comment about this was not posted in the comments section of that article. Let's see if NYT will censor this attempt.
Racial Relations at Cultural Sites: Paris, France 2008
Hip-Hop and Activism: Cape Town, South Africa 2009
http://www.nytimes.com/2014/06/08/realestate/student-loans-make-it-hard-...
Racial Relations at Cultural Sites: Paris, France 2008
Hip-Hop and Activism: Cape Town, South Africa 2009
http://www.nytimes.com/2014/06/08/realestate/student-loans-make-it-hard-...
16
The great "education" scam continues...
$200,000 (yes with interest) for a degree that will get you $35,000 a year after college.
1) Political Science
2) Anthropology
3) Liberal Arts
If you are not going to be a doctor, lawyer or civil engineer - you have no business in college. a better education, with far more lucrative results can be had on StackExchange.
$200,000 (yes with interest) for a degree that will get you $35,000 a year after college.
1) Political Science
2) Anthropology
3) Liberal Arts
If you are not going to be a doctor, lawyer or civil engineer - you have no business in college. a better education, with far more lucrative results can be had on StackExchange.
8
The notion that "If you are not going to be a doctor, lawyer or civil engineer - you have no business in college" does not resonate well with newly minted lawyers these days. They followed the rule--studied law whether they enjoyed it or not--in the expectation that, as had been true for generations, they would have high earnings.
Now many can find no work at all.
No safe professions remain. The right wing's ambition to devastate the middle class--and to trick everyone into blaming it on each individual rather than on the 1%'s game plan--is rampantly successful.
Now many can find no work at all.
No safe professions remain. The right wing's ambition to devastate the middle class--and to trick everyone into blaming it on each individual rather than on the 1%'s game plan--is rampantly successful.
20
Or you can pay $200,000 or whatever to get a $35,000/year job because you want that kind of work and are willing to be in debt and poor for it. I was a philosophy major. And perfectly happy to pay the price. The aim isn't money but interesting work, and that's worth any cost.
4
No the left just doesnt understand what the "middle class" is in 2015.
the middle class are professionals in IT and Healthcare or any fast growing profession earning over $200k per year, per adult.
If you dont make six figures, you are poor.
the old "middle class" is extinct - where are the "factory jobs" the middle class worked for 100 years? GONE
the middle class are professionals in IT and Healthcare or any fast growing profession earning over $200k per year, per adult.
If you dont make six figures, you are poor.
the old "middle class" is extinct - where are the "factory jobs" the middle class worked for 100 years? GONE
4
$22,500 in debt: gee whiz, that’s a car loan. $2.23 a day in interest: that’s not enough to pay for a Starbucks coffee. $100,000 in debt: that’s much less than most folks’ mortgages.
But I don’t hear students who whine about student loans complaining about mortgages, car loans or Starbucks’ prices. And the assumption seems to be that they have a god-given right to these luxuries as soon as they get out of college—or sooner.
Sorry, students: YOU DON’T. When you’re in college (and grad school) you live in student poverty: on ramen—without a car and without Starbucks. When you graduate, you get an old junker car if necessary and live in the cheapest hole you can find in the local slum, saving money until, if you’re lucky, you can make the down payment for a house—at about 35. What on earth makes you imagine that you are entitled to live better at 22 than most Americans and, a fortiori, most of the world’s population, who are poor and quite often indebted, live for all of their lives?
I am amazed at students’ (and parents’) arrogance and sense of entitlement.
But I don’t hear students who whine about student loans complaining about mortgages, car loans or Starbucks’ prices. And the assumption seems to be that they have a god-given right to these luxuries as soon as they get out of college—or sooner.
Sorry, students: YOU DON’T. When you’re in college (and grad school) you live in student poverty: on ramen—without a car and without Starbucks. When you graduate, you get an old junker car if necessary and live in the cheapest hole you can find in the local slum, saving money until, if you’re lucky, you can make the down payment for a house—at about 35. What on earth makes you imagine that you are entitled to live better at 22 than most Americans and, a fortiori, most of the world’s population, who are poor and quite often indebted, live for all of their lives?
I am amazed at students’ (and parents’) arrogance and sense of entitlement.
37
This is just the worst kind of attitude. Ignore the individual cases and think about what happens to a country/economy/culture when an entire generation has to treads water for 15-20 years, no one buys new cars, and no one buys houses. Consider that previous generations were able to educate themselves cheaply and support a family on one salary. I'm so sick of hearing about "entitlement." Someone will always have it worse, so why bother ever getting it right, is that it?
57
Are you familiar with the depression? Many people delayed marriage (including Harry Truman) until they could afford it, and saved for years to buy a first house - my own parents were 44 and 51 when this finally happened, and it was very small. It took my father 7 years to finish college - a year in school, a year working and saving to afford more tuition. They were both from middle class families and this was typical.
6
I’m a member of that previous generation who lived in poverty for 15-20 years, and lived in genuine slums, on ramen. I’ve never owned a new car and never will. And it was only at 35 that I, because I was lucky—married with 2 incomes—could scrape together the downpayment on a house in a lower-income area. I don’t know anyone who was able to support a family on one income.
So, pardon my bad attitude. My students live in luxury apartment complexes, with rent twice the monthly payments on my mortgage, and would be horrified at the prospect of living as I do—as an academic.
Sure. Please get it right: provide free college education. And I as a taxpayer would be delighted to support that. But it doesn’t follow that students or others have a right to luxury, with new cars and fancy apartments in cool urban areas. Life is full of hard choices, and if you want interesting work—the work you buy a college education for—you have to live poor for a good deal of your life. That’s fair.
So, pardon my bad attitude. My students live in luxury apartment complexes, with rent twice the monthly payments on my mortgage, and would be horrified at the prospect of living as I do—as an academic.
Sure. Please get it right: provide free college education. And I as a taxpayer would be delighted to support that. But it doesn’t follow that students or others have a right to luxury, with new cars and fancy apartments in cool urban areas. Life is full of hard choices, and if you want interesting work—the work you buy a college education for—you have to live poor for a good deal of your life. That’s fair.
12
Nothing that the "financial-government" complex will NOT do to shackle ordinary (everyday?) Americans to debt. It is indentured servitude for profit.
Our government even fights wars with debt (and the blood of many young people, who struggle financially to survive). But when the government runs out of money (not $2.28 but over a BILLION dollars a day), it relies on its full faith and credit to produce more debt, and gets its own subsidiary institution, called the Federal Reserve, to fabricate dollars out of thin air to buy this debt at NO interest. The financial-industrial complex takes it cut every step or the way. Because have "free" markets (literally) for some, and a "democracy" that is for sale to the highest bidder.
The students have only one weapon. Organize as one to vote in ALL congressional and Presidential elections. Make this your single biggest issue, Republican or Democrat. Get a pledge from any office seeker, as to what he/she will do to set you FREE from the financiers, and "take America back". Recall all "liars".
Use the AARP "Senior" organization as your model. When you get a job, even for a low wage, look at the money taken out of your paycheck to support these seniors (with incomes are 5, 10, and a 1000 times yours).
Organize, using social media! The Arab Spring Revolutions were for freedom and democracy, but were soon snuffed out. Put you freedom and our democracy to work for YOU NOW before it too is snuffed out completely!
Our government even fights wars with debt (and the blood of many young people, who struggle financially to survive). But when the government runs out of money (not $2.28 but over a BILLION dollars a day), it relies on its full faith and credit to produce more debt, and gets its own subsidiary institution, called the Federal Reserve, to fabricate dollars out of thin air to buy this debt at NO interest. The financial-industrial complex takes it cut every step or the way. Because have "free" markets (literally) for some, and a "democracy" that is for sale to the highest bidder.
The students have only one weapon. Organize as one to vote in ALL congressional and Presidential elections. Make this your single biggest issue, Republican or Democrat. Get a pledge from any office seeker, as to what he/she will do to set you FREE from the financiers, and "take America back". Recall all "liars".
Use the AARP "Senior" organization as your model. When you get a job, even for a low wage, look at the money taken out of your paycheck to support these seniors (with incomes are 5, 10, and a 1000 times yours).
Organize, using social media! The Arab Spring Revolutions were for freedom and democracy, but were soon snuffed out. Put you freedom and our democracy to work for YOU NOW before it too is snuffed out completely!
8
Just sayin', as a not-yet-retired senior, big bucks still come out of my paycheck every year to support the great-grandparents, grandparents of these students, not to mention the school (and general infrastructure) taxes I've paid. Since I started working at 15.
It's called a social contract. Hearing you complain about students supporting me makes me roll my eyes.
It's called a social contract. Hearing you complain about students supporting me makes me roll my eyes.
6
Pathetic, these students lack even walking around sense, why would they ever be admitted to a college, even the ones mentioned in this article? And of course in our "don't blame me it's always someone else's fault culture, let's blame the college, the bank, Sallie Mae, the Dept. of Social Services, or anyone other than the student and his parent(s). All of this whining notwithstanding, even these students, their folks and the writers and editors at the New York Times should know if you borrow money from anyone other than your grandmother you are expected to pay it back.
10
I'm a grandmother - I also expect a loan to be repaid! A gift is another matter, but both are clearly defined.
3
I took an online course recently. College is soon going to be obsolete.
1
End all federal student loans and federally backed student loans and college would become affordable. The schools charge so much because the students can borrow so much. The federal policy of trying to make school affordable by encouraging borrowing has had the opposite effect. Just as the cheap mortgage money created the housing bubble.
32
This is the first brilliant I've heard on this topic. You are absolutely correct. It's egregious that college presidents are making 4 million a year.
3
Tuitions expand to meet the pool of available funds. Increased Federal loan money availability only functions as an unregulated subsidy to secondary education bloat and waste.
Access without price controls isn't access.
Access without price controls isn't access.
2
If you get a degree from a good university and end up owing less than $25,000 that's a pretty darn good deal. If you take the loans and fail, well whose fault is that?
My daughter selected a good small private college and got some academic money, and some sports scholarship money, and I took some loans and she took on some loans. I've paid my share off, she's working a good job and paying her loans off, and she'll finance some of grad school, too.
It worked for us. We went into it with our eyes open and not complaining about about paying money that we BORROWED back to the people that lent it to us.
My daughter selected a good small private college and got some academic money, and some sports scholarship money, and I took some loans and she took on some loans. I've paid my share off, she's working a good job and paying her loans off, and she'll finance some of grad school, too.
It worked for us. We went into it with our eyes open and not complaining about about paying money that we BORROWED back to the people that lent it to us.
7
The biggest problem is that a student can no longer work 2-3 jobs during the summer and come anywhere close to having the money to pay tuition, let alone room and board in the fall.
In 1978, when minimum wage was something like 2.19 and the waitress pay was $2.07 hr, but waitress tips did not have to be declared, nor were they automatically declared. Today, the minimum wage is only 7.25 hr. Waitress wages are $2 .10 and 15% of the resturant gross is added to the waitress base as assumed tips. Then many restaurants force wait staffs to illegally be in tip pools and tip out beyond bussers, to cooks, mgmt, etc.
My private University tuition in 1978 was 3,200 per year with room and board at 3,200 by 82 it was tuition 6,400 but room and board 3,200. My Social Security earning statements from 1980-1981 show 6,000 In earnings . I worked for an ARrchitect by day for $5 hr. And I waited tables at nights and weekends. I would make $100-$150 every wait shift basically with only $2hr going to taxes. I could earn enough to pay the tuition and board.
Today the least expensive tuition is $40,000 with another $15,000 for RB. My daughter has a good pastime job working as a BOA teller at $12.05 hr. She made $14,000 last year. They cut our pell Grant from $5600 to $2500 because she went up from $11,000. I am a disabled first responder with $22k of disability income.
In 1978, when minimum wage was something like 2.19 and the waitress pay was $2.07 hr, but waitress tips did not have to be declared, nor were they automatically declared. Today, the minimum wage is only 7.25 hr. Waitress wages are $2 .10 and 15% of the resturant gross is added to the waitress base as assumed tips. Then many restaurants force wait staffs to illegally be in tip pools and tip out beyond bussers, to cooks, mgmt, etc.
My private University tuition in 1978 was 3,200 per year with room and board at 3,200 by 82 it was tuition 6,400 but room and board 3,200. My Social Security earning statements from 1980-1981 show 6,000 In earnings . I worked for an ARrchitect by day for $5 hr. And I waited tables at nights and weekends. I would make $100-$150 every wait shift basically with only $2hr going to taxes. I could earn enough to pay the tuition and board.
Today the least expensive tuition is $40,000 with another $15,000 for RB. My daughter has a good pastime job working as a BOA teller at $12.05 hr. She made $14,000 last year. They cut our pell Grant from $5600 to $2500 because she went up from $11,000. I am a disabled first responder with $22k of disability income.
15
The least expensive tuition in NY is $7000 at our state universities and it is even cheaper if the first two years are done at a community college.
That students want an expensive college 'experience' is not the same thing as needing one to get a good-paying job.
That students want an expensive college 'experience' is not the same thing as needing one to get a good-paying job.
1
A bit more context on Ms. Liao's situation would have been useful, particularly about how that $2.23 per day interest was determined. To find out how much interest one is paying on a loan in which monthly payments are made (which is like most student loans), multiply the monthly payment by the total number of payments to be made over the life of the loan, and then subtract the principal. Then you can parse that total interest in whatever way desired. This is all a function of the time value of money. And her comment that she 'was spending $2.23 per day without actually buying anything for myself' rings false; did she not 'buy' an education and, with it, all the opportunities that presents? Had she been told about the $2.23 per day interest before deciding to attend Georgetown University, would she have said 'no'?
12
The way I heard her quote was this: She had no problems with the debt or the deal she got. Paying any more interest than she absolutely had to, however, made her itchy. If that wasn't more clear, then it's on me for not framing it right.
13
Maybe Basic Finance should be the subject of a required high school course, focused on real-world examples of student borrowing.
5
If the $2.23 is an average over the life of the loan, then it is misleading because interest paid in earlier years is far greater than in later years. In early years, interest will be close to 100% of the monthly payment. So if that payment is, say, $300 a month, she would actually be paying about $10 a day for interest. Twenty years later, her daily interest will be close to zero. The point is that very little of the principal gets paid down in the first 5-10 years, which essentially means the lender is making much of the loan back in interest. However, the borrower doesn't have a tangible good, like a house or car, that can be repossessed, sold back, or protected in bankruptcy. Student loans are treated like secured loans but are really unsecured; a diploma is just a piece of paper that cannot be sold to someone else. They should be treated like unsecured debt with a minimum payment that would cover interest and some principal and would allow for any excess payments to go directly toward principal, thus paying off the loan sooner.
Why are they handed a high school diploma without having to demonstrate basic proficiency in mathematics and reading comprehension? The same ignorance heads into a voting booth each election day and results in an electorate that votes against its own economic self interest.
6
Get the federal government out of the student loan business. Allow student loans in bankruptcy.
7
If this were allowed, the number of those in their 20's doing this to avoid paying, would skyrocket.
So if the gov't gets out amd allows discharge in BK, will you be the one making a $100,000 loan to a student, kid goes to school, files BK, you get $0 back as a creditor....doesn't sound like a great investment for the creditor. No one would even lend to a student...
2
All that will happen is that even more students will take out even more loans for useless degrees and summers in France.
Slippery slope.
Slippery slope.
1
At $2.23 interest per day, that is around 3.5%. And the problem is what, exactly?
So just don't buy your Starbucks Latte every 2nd day and you will have covered this crushing debt.
So just don't buy your Starbucks Latte every 2nd day and you will have covered this crushing debt.
13
The American system is not only immoral but also a drain on the overall US economy as money -- oftentimes from young people -- is syphoned from homes and cars into student loan repayments. At the very least private student loan debts should be dischargeable: they were until 2005 and, after the change, the interest charged to borrowers did not decrease at all.
7
As a (retired) teacher, I am firmly in he camp of kids going to college. Given that, maybe expectations need to be lowered some vis-à-vis kids/families being able to afford said institution. Granted that some of the major private universities given aid to cover many of their own high costs, a student should not commit to going to a Stanford, Yale, or Harvard if the money is just not there. Those three and others cost in the range of $40K per year. (I read an article a few months back, probably here n the Times that had one small-ish eastern private costing $58K per year, not counting living expenses.
2
Although interest does accrue daily has no one considered the effect of inflation on these loans? With IBR payment programs I plan on paying long term and let inflation work for me. As long as one pays more than the interest accrued each month this could be a sound strategy especially if there are years where a huge inflation spike occurs (has not happened much lately but has historically).
1
We have been paying out children's college loan interest since they received the first bill. Interest compounds and while it is their education that they should be largely responsible for, keeping the payments low is a family obligation.
I also know families that are allegedly scamming the system by having their children claim to be emancipated minors. This makes more funds available to them and hurts those who are truly needy.
I also know families that are allegedly scamming the system by having their children claim to be emancipated minors. This makes more funds available to them and hurts those who are truly needy.
2
"Kim Liao realized the cost of her $22,500 in student loans when she discovered she would be paying $2.23 in interest each day."
And this is an issue? Roughly $66 a month? Give up the daily latte at Starbucks until you pay your loan off.
And this is an issue? Roughly $66 a month? Give up the daily latte at Starbucks until you pay your loan off.
17
Why would you assume that Ms. Liao goes to Starbucks everyday? Some students are living so close to the edge financially that they wouldn't even consider going to Starbucks, but this knee jerk argument is repeated so often it has become the go to cliche from the dismissive ones.
4
I will wager that there are many thousands out there who took out loans only to find their finances unmanageable shortly after graduation. They then declared bankruptcy. Student loans are not dischargeable. I wonder how many took horrible advice from their lawyer, as I did mine: I didn't need to pay my loans during bankruptcy and in fact, the USDE "doesn't want" me to pay.
That leads to the crime the USDE has enshrined as a policy: continue to add interest during a bankruptcy. The crime is exaction and usury.
I came out of my five year chapter 13 bankruptcy with more than 30k in interest added. I guess they thought the added interest on the loan, now over 92k on a 42k principal, would expedite paying it back.
I would like to bring a class action lawsuit to the USDE. What percentage of student loan debt due to such interest?
That leads to the crime the USDE has enshrined as a policy: continue to add interest during a bankruptcy. The crime is exaction and usury.
I came out of my five year chapter 13 bankruptcy with more than 30k in interest added. I guess they thought the added interest on the loan, now over 92k on a 42k principal, would expedite paying it back.
I would like to bring a class action lawsuit to the USDE. What percentage of student loan debt due to such interest?
11
We have two kids who are happily attending a quality state university about 40 miles from our house for about $23k per year. They applied and were admitted to private colleges that would have cost over $225k for four years. They were awarded little or no merit aid by the small private schools (no surprise there since we had to disclose our ability to pay). Both kids were smart enough the see through the the sophisticated and targeted marketing efforts of the tremendously expensive private schools. They recognize a good deal when they see it. My husband and I openly discuss our financial decisions in front of our kids and we have zero debt. We only make purchases (college included) with money in hand. Colleges are able to set sky high tuition rates for two main reasons - wealthy parents are willing to pay whatever it takes for a brand name college and the rest of the people take on serious debt to get that brand name. Our restraint with college costs has freed up money for other things of value to us like travel, home improvement, savings, etc. It's got to be stressful for parents and students who commit to expensive colleges. Sadly, this generation of high school graduates is modeling greedy parents who excessively spent the country into recession.
65
Very impressive. Unfortunately state university tuition is rising at a rapid rate faster than many private schools. I fear further in the future the price between the 2 will be similar and much the same. They feel they have wiggle room to increase and as long as they are slightly below the private schools, they will be considered a good deal.
But good job and good habits. I'm seeing smarter kids show up at public universities and I'm impressed by how bright many of the kids are. I'm also impressed by how stupid many are too. Intelligence I would say on average is increasing but much slower than other countries.
But good job and good habits. I'm seeing smarter kids show up at public universities and I'm impressed by how bright many of the kids are. I'm also impressed by how stupid many are too. Intelligence I would say on average is increasing but much slower than other countries.
Cari, I assume your kids are at the UW main Seattle campus. My sisters and I obtained degrees there. It is a truly vibrant and challenging institution, and one of the best values in higher education.
The one drawback is that the UW will gladly allow a student to flunk out. There is little hand holding, which is why many students end up living on Greek Row, at least for a year or two.
The UW has also developed a strong taste for full-tuition out-of-staters. Getting in used to be a birthright for state residents with a B+ GPA but no longer. Your kids must be sharp and motivated. Congrats!
The one drawback is that the UW will gladly allow a student to flunk out. There is little hand holding, which is why many students end up living on Greek Row, at least for a year or two.
The UW has also developed a strong taste for full-tuition out-of-staters. Getting in used to be a birthright for state residents with a B+ GPA but no longer. Your kids must be sharp and motivated. Congrats!
The focus of these columns should be on tuition inflation, not on how to pay for it. What are the structural factors that allow universities to double their inflation adjusted tuition costs for the exact same product? I suggest that the prices doubled because they can, and spending increases followed - not the other way around.
I enrolled at the Univ of WI in Milwaukee in 1964 with an annual tuition of $300. In 2015 dollars that is $2,269. Tuition now is $4,695, 2.07 times greater for the same degree. I could pay my school costs, rent and food with a summer job at $2/hr and part time work as a waiter during school.
I enrolled at the Univ of WI in Milwaukee in 1964 with an annual tuition of $300. In 2015 dollars that is $2,269. Tuition now is $4,695, 2.07 times greater for the same degree. I could pay my school costs, rent and food with a summer job at $2/hr and part time work as a waiter during school.
3
$20,000 for is not a lot for a four year college degree, as many students happily spend a lot more than that on a shiny new car.
2
"So Ben Lindsey, 27, who graduated from Oklahoma Christian University with about $100,000 in student loan debt, said he wished that colleges would require all new students to take a basic course about money that forced them to run their overall loan projections at the beginning of their first year."
This is basic Algebra II on geometric progressions. Dollars to doughnuts this was taught in his high school
This is basic Algebra II on geometric progressions. Dollars to doughnuts this was taught in his high school
8
$100,000 in loans from a college no one has ever heard of? Surely, there were better options available, including community colleges.
1
Debt interest, making money from nothing, is insidious, and why capitalists seek to indenture the innumerate.
4
Because people should just give away money for free?
Feel free to do so yourself and let us know how it goes.
Feel free to do so yourself and let us know how it goes.
America is in the process of refreshing its nuclear arsenal. This is a group of weapons which will never be used.
The cost is approximately equal to the total amount of tuition to be paid by college students over the next twenty-five years.
How's that for some priorities?
The cost is approximately equal to the total amount of tuition to be paid by college students over the next twenty-five years.
How's that for some priorities?
8
I think the person whop put a gun to her head and forced to take those loans, be arrested.
1
IVORY TOWER is a great documentary film that examines the issues discussed in this article's comments section.
Personally, I think college is the best investment a person can make for his or her future. But, that's exactly what it is: a financial investment. It's probably a bad financial investment to a small, expensive, unrecognized, private school in another state and majoring in philosophy and borrowing to pay tuition, room and board. It's fine to do it if someone's parents have enough resources and want to pay for his or her exercise in personal growth. It doesn't make sense to borrow to make that a reality, but a lot of families feel like kids are entitled to a special, self-designed experience, regardless of financial realities.
On the other hand, for most people, it's probably a great investment to live at home and go to the local public university, maybe even knocking out the first couple years of gen ed courses at a community college to save even more. If borrowing needs to take place in that scenario, at least it's kept to a minimum. If a young person can get accepted to a top-tier school (e.g. Harvard, Stanford, etc.) that will lead to lucrative career prospects, that may be worth taking on extra debt, since extra earnings will cover it. But, getting a grad degree from the local public university may elevate the student's prospects even further, for the same or even less cost. Everyone needs to make their own calculus, but money should be in the equation.
Personally, I think college is the best investment a person can make for his or her future. But, that's exactly what it is: a financial investment. It's probably a bad financial investment to a small, expensive, unrecognized, private school in another state and majoring in philosophy and borrowing to pay tuition, room and board. It's fine to do it if someone's parents have enough resources and want to pay for his or her exercise in personal growth. It doesn't make sense to borrow to make that a reality, but a lot of families feel like kids are entitled to a special, self-designed experience, regardless of financial realities.
On the other hand, for most people, it's probably a great investment to live at home and go to the local public university, maybe even knocking out the first couple years of gen ed courses at a community college to save even more. If borrowing needs to take place in that scenario, at least it's kept to a minimum. If a young person can get accepted to a top-tier school (e.g. Harvard, Stanford, etc.) that will lead to lucrative career prospects, that may be worth taking on extra debt, since extra earnings will cover it. But, getting a grad degree from the local public university may elevate the student's prospects even further, for the same or even less cost. Everyone needs to make their own calculus, but money should be in the equation.
6
"Federal law makes it difficult for people to discharge student loans in bankruptcy... Auto lenders and credit card companies don’t have that same privilege."
Auto loans are secured by the vehicle and credit cards have an interest rate that compensates the lender for their high default rate. Student loans are not secured and charge a low interest rate. Elizabeth Warren knows this but she panders to the public's desire for a free lunch.
Auto loans are secured by the vehicle and credit cards have an interest rate that compensates the lender for their high default rate. Student loans are not secured and charge a low interest rate. Elizabeth Warren knows this but she panders to the public's desire for a free lunch.
7
Credit cards have a default rate of around 4%. Explain how this leads to justification of 17-29% interest rates?
I'm surprised at the self-righteous readers bragging about helping their children fund an education and the scornful readers who think the students are entirely at fault.
Read this article again, please. Loan sharking has no place in helping kids get a college education, and kids they are. They don't understand loans very well and virtually no one, student or adult, reads the fine print.
Loan sharks like it that way and a simple, straightforward explanation of the loan terms, bankruptcy provisions, cost per day, is something the sharks absolutely don't want borrowers to know.
Read this article again, please. Loan sharking has no place in helping kids get a college education, and kids they are. They don't understand loans very well and virtually no one, student or adult, reads the fine print.
Loan sharks like it that way and a simple, straightforward explanation of the loan terms, bankruptcy provisions, cost per day, is something the sharks absolutely don't want borrowers to know.
10
The students *are* entirely at fault, as no one forced them to take the loans out and they could have easily researched the total cost of the loans on the internet.
People did this long before the internet existed, but they were not professional victims and whiners.
People did this long before the internet existed, but they were not professional victims and whiners.
There are solutions to this problem, but colleges as for-profit entities are not inclined to institute them. Placement rates. Colleges have intentionally withheld these numbers from the public. Private colleges and professional organizations have lied about them (see Corinthian). It's not too far of a stretch to tie loan risk to placement rates. Since the gravy train has been encouraged by rewarding loose lenders with legislation, such that these loans cannot be discharged in bankruptcy, colleges have had no incentive to reign in the practice.
1
As a student and a borrower, I reported my 'placement' after graduation. The placement rates are found in the federal Bureau of Labor Statistics. (bls.gov)
I worked my way through college and graduated debt free. Since that time minimum wage has tripled and the cost of an academic quarter at the University of California has gone up 12-fold. It's not just a single problem, but a set of problems leading to the rising inequality in this country.
8
Kim is smart enough to get into Georgetown. I am sure that she is smart enough to make good decisions about choosing a college and financing it. Her family made a valid agreement to repay a loan. We will all suffer if we allow folks like Kim to default on the terms. It always sounds nice to give someone something for nothing, but in the end someone pays.
The article mentions her family's downward mobility, and her dad's death is sad, but isn't tuition at institutions with large endowments need based?
When it comes to college education. I think we tinker with supply and demand a bit too much. This is artificially inflating the cost of college.
The article mentions her family's downward mobility, and her dad's death is sad, but isn't tuition at institutions with large endowments need based?
When it comes to college education. I think we tinker with supply and demand a bit too much. This is artificially inflating the cost of college.
6
The Times neglects to mention that in the era up to the time when Republicans reformed our student loan system, it was possible for students to declare bankruptcy. The fury over this was so great that all student debts are considered different from debt contracted by any individual or corporation that wishes to declare themselves unable to pay. Now, only student debt is impossible to dispense with legally.
Buy a baseball team and all the radio stations and newspapers in the country and then go broke; sure, why not?! And in a few years , you can start over again, after defaulting on a billion dollars of loans! It's the American way! But if you try and "weasel" your way out of a debt to a loan company for an education, you better get ready to pay and pay and pay-there is no way out.
It is impossible to declare bankruptcy for student debt.
Win a million dollar lottery and try and pay the debt off early and you must still pay the interest the loan issuer "loses" by "early payment" as a "penalty". In student loans, kids are taught that responsibility is secondary to paying. and paying until it hurts, and doing it until you die, preferably.
Buy a baseball team and all the radio stations and newspapers in the country and then go broke; sure, why not?! And in a few years , you can start over again, after defaulting on a billion dollars of loans! It's the American way! But if you try and "weasel" your way out of a debt to a loan company for an education, you better get ready to pay and pay and pay-there is no way out.
It is impossible to declare bankruptcy for student debt.
Win a million dollar lottery and try and pay the debt off early and you must still pay the interest the loan issuer "loses" by "early payment" as a "penalty". In student loans, kids are taught that responsibility is secondary to paying. and paying until it hurts, and doing it until you die, preferably.
8
mabraun you're welcome to start a charity for deadbeat borrowers. Just don't suggest taxpayers be forced to pay for such charity.
1
'...In student loans, kids are taught that responsibility is secondary to paying...'
Paying your freely incurred debts is a definition of 'responsibility', as opposed to believing everything should be 'free'.
Paying your freely incurred debts is a definition of 'responsibility', as opposed to believing everything should be 'free'.
1
The American Dream still exists for young Australians, where a Bachelor's Degree is a 3 year program at a modest cost and if you need it the government loans you the relatively modest amount at a modest interest rate. Or just pay cash by working part-time in the campus bookstore or café at 3 times the minimum wage of the U.S. And not to worry about health care, the citizens believe you deserve that at a modest cost as well. There are plenty of very wealthy Australians, they just aren't as selfish and greedy as the American 1%.
10
I worked in consumer finance for five years. I have a great deal to say about this topic, but I'll try to keep it short.
Selling debt is a lucrative business. Of the thousands of people that I've loaned money to, most of them borrowed it under the pretense of thinking that, in terms of their financial situation, tomorrow is going to be better than yesterday was. That self-deluded sense of optimism is what keeps most people borrowing: no matter how hard you try to talk to them sensibly about their decision. And, as interest builds on these loans, lenders make their money--much of which is, itself, borrowed.
In terms of student loans, it wouldn't matter if there was "financial counselling" from a third party involved, because the universities would simply counter that fear of debt load by exaggerating the figures that their graduates could expect to make. Then, these universities could back up their statements with whatever numbers the Bureau of Labor Statistics publishes for a certain job title. Try looking up your current job title at www.bls.gov. I bet you'll get a laugh out of it.
Universities and student lending companies are simply peddling The American Dream to a bunch of teenagers. They're not the first to do this, and I doubt they'll be the last.
Selling debt is a lucrative business. Of the thousands of people that I've loaned money to, most of them borrowed it under the pretense of thinking that, in terms of their financial situation, tomorrow is going to be better than yesterday was. That self-deluded sense of optimism is what keeps most people borrowing: no matter how hard you try to talk to them sensibly about their decision. And, as interest builds on these loans, lenders make their money--much of which is, itself, borrowed.
In terms of student loans, it wouldn't matter if there was "financial counselling" from a third party involved, because the universities would simply counter that fear of debt load by exaggerating the figures that their graduates could expect to make. Then, these universities could back up their statements with whatever numbers the Bureau of Labor Statistics publishes for a certain job title. Try looking up your current job title at www.bls.gov. I bet you'll get a laugh out of it.
Universities and student lending companies are simply peddling The American Dream to a bunch of teenagers. They're not the first to do this, and I doubt they'll be the last.
8
There is this thing called the 'internet', where people can research the total cost of a loan *before* the choose to borrow money.
1
This article is practical and seemingly doable, but the reality is that even if students know all about personal finance, often loans are unavoidable.
I entered college at age 18 after having handled my own finances for years. I knew all about interest rates, the differences between repayment options on public and private loans, and the like - I did become an accountant after all. All this informationwas useful but did not save me from diving into $60k worth of debt. The problem is how expensive schools are. Many schools require two years of living on campus with a meal plan (unavoidable if you're away from home), which can set you back $20k or more.
The real problem that needs addressed begins in high school. Kids are taught to major in something that they are absolutely passionate in , and to do whatever it takes to get there. Then we get kids entering a private college that is quadruple the price of a state school, and majoring in a subject that will never earn them money. Everyone always says, "money isn't everything," but when you're making loan payments it's nice to make enough to know that there is an end in sight. High schools need to encourage seniors to choose a field that makes sense.
I entered college at age 18 after having handled my own finances for years. I knew all about interest rates, the differences between repayment options on public and private loans, and the like - I did become an accountant after all. All this informationwas useful but did not save me from diving into $60k worth of debt. The problem is how expensive schools are. Many schools require two years of living on campus with a meal plan (unavoidable if you're away from home), which can set you back $20k or more.
The real problem that needs addressed begins in high school. Kids are taught to major in something that they are absolutely passionate in , and to do whatever it takes to get there. Then we get kids entering a private college that is quadruple the price of a state school, and majoring in a subject that will never earn them money. Everyone always says, "money isn't everything," but when you're making loan payments it's nice to make enough to know that there is an end in sight. High schools need to encourage seniors to choose a field that makes sense.
6
Community college, public university, live at home.
That would be a good start to keeping debt low.
'...Kids are taught to major in something that they are absolutely passionate in...Everyone always says, "money isn't everything,"...'
I do not know anyone who ever said this, much less anyone who would listen to such bad advice.
That would be a good start to keeping debt low.
'...Kids are taught to major in something that they are absolutely passionate in...Everyone always says, "money isn't everything,"...'
I do not know anyone who ever said this, much less anyone who would listen to such bad advice.
Other things you may not know about student debt:
Bankruptcy will not erase your student debt.
Even if you are old, poor, and living on Social Security, they will garnish your social security for debt that is more than 30 years old.
Bankruptcy will not erase your student debt.
Even if you are old, poor, and living on Social Security, they will garnish your social security for debt that is more than 30 years old.
6
What do people expect when they borrow? That they won't have to repay?
3
This is a huge issue. I wish you would do a whole series on this--how the children are heart-broken when they realize their dreams are not possible even though they have good grades, the predatory for profit schools and how the recruiters lie to the students, and the clueless and overworked counselors.
3
Considering Ms. Liao's experience, decisions before any interests accrue may be crucial. We must ask ourselves whether a private school degree was actually necessary for her career at the Fed. Would not a public school degree have sufficed? Particularly in her situation need-based programs at public schools, like AccessUVA, might have helped reduce the debt burden from the get-go?
Think really hard whether your choice of college justifies the means. As with many money decisions in life, keeping your footprint small at the start pays in the long run.
Think really hard whether your choice of college justifies the means. As with many money decisions in life, keeping your footprint small at the start pays in the long run.
3
It might be a good idea to offer a course on paying for college for high schoolers planning to attend. It would also be a good idea to lower tuition costs for these kids, as well as interest rates.
1
No one is putting a gun to the head of these students to sign for their loans. As a parent paying full freight for two kids at over $ 100,000 a year after-tax dollars I have no sympathy for these students and their parents.
My kids work at school while carrying full academic loads. By working they get a better appreciation on living costs, i.e. a Starbucks latte will cost 30 minutes of work. So, instead of splurging on costly spring break/summer vacations, cars and showy electronic devices my family instead splurges on their education so they can graduate loan-free.
My kids work at school while carrying full academic loads. By working they get a better appreciation on living costs, i.e. a Starbucks latte will cost 30 minutes of work. So, instead of splurging on costly spring break/summer vacations, cars and showy electronic devices my family instead splurges on their education so they can graduate loan-free.
4
In the early 90's when I was graduating with my BFA, my loan interest rates were 8% then jumped to 11%. Thank you Reagan/Bush. There were the Federally backed Stafford loans. I had to pay that rate for a while until the loan rates were dropped to 5%. Thank you Clinton.
In America, education isn't about education. It is about free market concepts and profit margins. Nothing more, nothing less. Colleges, especially private ones can charge what they want because the students attending are paying for it - via parents, work and mostly loans. The banks and schools and anyone profiting in the middle of all that do not care about the financial health of the student.
Similarly like the ACA, it's not about health, it's about profits. Which is why the 'right' side of our government wants to do away with it because it reduces profits. Which is also why the American education system will continue to destroy financial lives because the concept of 'free university' as other countries have will never happen. Money is too important. Why do you think the pubic education systems are failing? Not because they don't work. It is because they are being underfunded because there is so immediate profit margins in publicly funded education.
As the conservatives do: No profits. Starve the system and use the failing of education because of lack of funding as an excuse to cut more funding until profit centers rise...a la...charter schools.
In America, education isn't about education. It is about free market concepts and profit margins. Nothing more, nothing less. Colleges, especially private ones can charge what they want because the students attending are paying for it - via parents, work and mostly loans. The banks and schools and anyone profiting in the middle of all that do not care about the financial health of the student.
Similarly like the ACA, it's not about health, it's about profits. Which is why the 'right' side of our government wants to do away with it because it reduces profits. Which is also why the American education system will continue to destroy financial lives because the concept of 'free university' as other countries have will never happen. Money is too important. Why do you think the pubic education systems are failing? Not because they don't work. It is because they are being underfunded because there is so immediate profit margins in publicly funded education.
As the conservatives do: No profits. Starve the system and use the failing of education because of lack of funding as an excuse to cut more funding until profit centers rise...a la...charter schools.
4
For those caught in the student loan trap, there’s a great repayment option via the Dept. of Ed, for many but not all loans: IBR (income Based Repayment) coupled with the (PSLF) Public Service Loan Forgiveness plan. Basically, the graduate’s loans are consolidated through the US Dept. of Ed, payments are based on the payee’s level of INCOME, not amount of DEBT, and after 10 years of working in a public service position, via a non-profit or government job, the remaining debt is forgiven without an IRS penalty. I personally know a teacher who is using this program to rid herself of $170k in debt, at $420/mo payments; her payments don’t even cover the interest on the debt (so it’s actually growing), but the entire amount will be retired in another 4 years.
4
Thanks taxpayers!!!
1
Anyone who got themselves $170K in debt did not use all that money for an education.
Hard not to pity her students.
Hard not to pity her students.
1
Here we go again blame the victim, not the system that forces (yes forces, because we are told that without an education you are doomed) people to take loans. We don't question how everyone takes advantage of the student and their families. Why is education so expensive?
7
There are many strategies and options that make an undergraduate and graduate degree affordable/attainable; first two years at a community college, commuting from parent’s home for several years, military service prior to college (amazing benefits), part-time employment, credit through CLEP, online classes (tuition is comparable, but no commuting cost), grants, scholarships, and lastly, student loans.
26
1) Our best and brightest don't belong in community college, and CERTAINLY don't belong in the military.
2) Part-time employment? Find a part-time job for an 18-year-old that pays $23-$60k a year after taxes.
3) Online classes? See 1, above.
4) Grants and scholarships? A crapshoot at best, especially if you're a white, middle-class B+ student -- which is most of the kids in college.
2) Part-time employment? Find a part-time job for an 18-year-old that pays $23-$60k a year after taxes.
3) Online classes? See 1, above.
4) Grants and scholarships? A crapshoot at best, especially if you're a white, middle-class B+ student -- which is most of the kids in college.
1
I still remember my college loan payment from the 1970s: $45.28 per month for seven years. At the time, it was about half of the weekly take-home pay from my first post-college job. It became less of a burden as I changed jobs and made more money.I got my first job because of my Syracuse University degree and it always has been an asset. I do not regret taking on debt that was about the price of a new car of the era.
Decades later, my eldest son graduated from an Ivy League college with a debt of about the price of a Mercedes or BMW. Still a good deal. My youngest emerged debt-free from another Ivy League school because of the generous aid program sponsored by alumni and benefactors. In both cases my wife and I contributed to their educations.
Education is hard work, but it does pay off. It results in better jobs and better opportunity.
I think, however, that student loan profiteers should be put out of business. The federal government has lots of guaranteed loan aid for U.S. multinationals exporting goods and services to unstable foreign nations. The Republicans need to step up to admit that all the people have a right to inexpensive student loans.
Decades later, my eldest son graduated from an Ivy League college with a debt of about the price of a Mercedes or BMW. Still a good deal. My youngest emerged debt-free from another Ivy League school because of the generous aid program sponsored by alumni and benefactors. In both cases my wife and I contributed to their educations.
Education is hard work, but it does pay off. It results in better jobs and better opportunity.
I think, however, that student loan profiteers should be put out of business. The federal government has lots of guaranteed loan aid for U.S. multinationals exporting goods and services to unstable foreign nations. The Republicans need to step up to admit that all the people have a right to inexpensive student loans.
8
Graduated from high school in 1968, went to college for a year and then enlisted in the Navy. Went back to college - public university - on the G.I. Bill after serving my tour and graduated with no debt. Of course this meant living at home and driving an old car for a while, but it worked out for me. I am thankful for the G.I. Bill since I came from a single parent family where no financial support was available. Our kids are another story and were able to help all three financially so they would not be burdened with large debts. Yes, we were fortunate to have the resources, but it still took a lot of planning and sacrifice. I celebrated by buying my dream car, a Corvette, albeit years later than I planned.
2
Schools cannot be expected to do what parents do not, but it would serve society well if all high schools had a mandatory course in basic finance.
That said, it is shocking that so many students get into serious debt for degrees in field that do not pay well, if there are any jobs at all. And that is not news, as those liberal arts and '(Fill In The Blank) Studies never paid well, not even 50 years ago.
That said, it is shocking that so many students get into serious debt for degrees in field that do not pay well, if there are any jobs at all. And that is not news, as those liberal arts and '(Fill In The Blank) Studies never paid well, not even 50 years ago.
5
If 18-year old can't legally drink in most states, why are they being allowed to sign financial documents which may change their lives for the following 20 years?
93
Eighteen year olds can't legally drink in *any* state, a misguided and insane federal policy that has caused more problems than it has fixed.
3
It's a good point, but probably not the way you intended. An 18 year old can vote, drive, get drafted into the army, and otherwise act and be treated like an adult. Why can't they drink legally?
2
Drinking is not all it's cracked up to be. The can serve their country in many ways, vote and have many other benefits.
Mr. Lieber,
The banking (credit card) industry lobbied congress for 10 years to change the bankruptcy laws in their favor. http://www.nytimes.com/2005/12/11/national/11credit.html
As did Sallie Mae/Navient. Topping the list of campaign cash received is Speaker John Boehner whose daughter, Tricia, works for Sallie's student loan debt collection arm, General Revenue Corporation. Gamblers who owe a casino money can and do receive debt relief in bankruptcy. A person paying off their student loan for years then experiencing a job loss? Impossible. Credit counseling is laughable compared to how the system is so stacked against the average citizen--one who doesn't have millions to spend on lobbying.
http://thinkprogress.org/politics/2006/02/03/3527/boehner-hamiltons/
The banking (credit card) industry lobbied congress for 10 years to change the bankruptcy laws in their favor. http://www.nytimes.com/2005/12/11/national/11credit.html
As did Sallie Mae/Navient. Topping the list of campaign cash received is Speaker John Boehner whose daughter, Tricia, works for Sallie's student loan debt collection arm, General Revenue Corporation. Gamblers who owe a casino money can and do receive debt relief in bankruptcy. A person paying off their student loan for years then experiencing a job loss? Impossible. Credit counseling is laughable compared to how the system is so stacked against the average citizen--one who doesn't have millions to spend on lobbying.
http://thinkprogress.org/politics/2006/02/03/3527/boehner-hamiltons/
56
The law was written because as soon as people realized they could discharge their student loans in bankruptcy, many people took out huge loans, spent the money frivolously, then declared bankruptcy, sticking the taxpayers with the bill.
Future doctors and other lucrative professions jumped on the bandwagon and the slippery slope became a free for all.
Future doctors and other lucrative professions jumped on the bandwagon and the slippery slope became a free for all.
No, NM, they didn't. It was the fairytale put forth by the American Bankers' Association in the 1970's that legions of newly-minted lawyers and doctors were marching straight from graduation to bankruptcy court. The thing is, it never happened. The GAO investigated the claims and found that student debt was the major factor in less than 1% of all bankruptcy cases. Nevertheless, the ABA pressed on, adamant on diverting attention away from the stagflation of the day, and was able to convince Congress and the "silent majority" that it was 'spoiled hippie college kids' wrecking their finances. That sentiment lives on today in the "latte libel" against student borrowers.
1
Isn't it a crime that we allow lending institutions to make money using government borrowed money (currently with little to no interest) from our vulnerable young people? As Elizabth Warren said, students should be able to borrow at the same low rates that banks do...we don't need college students paying the middle man...and while I'm at it...why is college SO expensive?...education should be better supported for by our government...instead of paying for wars and tax breaks for the very rich.
166
Borrowing at 1% instead of 3% doesnt get rid of the $100,000 principal...
1
College is expensive because government IS involved, creating the student loan program in the first place. Its a simple law of economics. You have removed the relationship between the "customer" (the student) and the seller (the university). Since the university just gets chunks of cash from the government they can raise tuition at will. They could not if they were forced to directly deal with tuition costs with the student without government guaranteed loans available. State universities would have to severely drop their tuition prices and textbook prices to compete for students.
1
What Elizabeth Warren said was ridiculous, and discerning people everywhere roundly criticized her for it. Here is why:
It is widely accepted that interest rates are determined by risk. When you lend money to your bank (also known as deposits), you accept a low/zero interest rate because there is a negligible risk you won't get your money back.
Would you be equally willing to lend YOUR money to a budding college student with no assets and no guarantee the person would even finish college, much less pay you back?
It is widely accepted that interest rates are determined by risk. When you lend money to your bank (also known as deposits), you accept a low/zero interest rate because there is a negligible risk you won't get your money back.
Would you be equally willing to lend YOUR money to a budding college student with no assets and no guarantee the person would even finish college, much less pay you back?
1
I graduated in 1983 owing about $70,000 in today's money. I got a good education and ultimately a good job. It took till 40 to pay it off but by then it was less than 1/4 my mortgage.
My advice would be to pay close attention to the terms you are signing up for--over time, interest rates matter at least as much as the gross total--and to the value of the education you're getting.
My advice would be to pay close attention to the terms you are signing up for--over time, interest rates matter at least as much as the gross total--and to the value of the education you're getting.
5
The fact is that college is so expensive and loans are small, that students and parents have little choice but to get them. People worry but they still need the loan. How can teens ever quite know about loans when these are the first loans they will ever get?
1
Their parents help them with this?
I'm in agreement with the general sentiments here. Students should know how much they are borrowing and make good financial decisions.
However, the student loan system in this country is a travesty. We shouldn't require students to mortgage their future (quite literally) in order to secure an education. The defunding of higher education is one of the greatest injustices inflicted upon our nation.
Even if you accept the proposition that students should contribute to their own education, I consider the interest rates we are inflicted upon them usurious. We should be providing no-interest (or at least as close to 0% as possible) loans. My federal direct student loans have the highest interest rate by far of any debt I have. I have a mortgage at 3.5%, a bank car loan (not dealer promotion) of 2%, and my student loans are 6.5%. That is outrageous. (And lest anyone respond that the house and car are collateral, those loans can be discharged in bankruptcy, while student loans never can -- and my paycheck can be directly garnished.)
However, the student loan system in this country is a travesty. We shouldn't require students to mortgage their future (quite literally) in order to secure an education. The defunding of higher education is one of the greatest injustices inflicted upon our nation.
Even if you accept the proposition that students should contribute to their own education, I consider the interest rates we are inflicted upon them usurious. We should be providing no-interest (or at least as close to 0% as possible) loans. My federal direct student loans have the highest interest rate by far of any debt I have. I have a mortgage at 3.5%, a bank car loan (not dealer promotion) of 2%, and my student loans are 6.5%. That is outrageous. (And lest anyone respond that the house and car are collateral, those loans can be discharged in bankruptcy, while student loans never can -- and my paycheck can be directly garnished.)
46
I agree that student loans should have low interest based on the prime rate, but to expect the taxpayers to fund a no interest loan to finance your future is not feasible or rational and would encourage even more students to get even more useless degrees.
Until the easy loan money is eradicated from higher education, runaway costs will continue unabated. Humanity is best served by when quality education is affordable. How four walls, a text book, a chair, a table, a dry-erase board, and 14 weeks of a professor's time, comes to $5,000 per student per class at many private universities is obscene. Consider that a 20 students in a typical private college classroom grosses $100,000! And the college doesn't even pay any federal or state income tax on the revenue! It is truly terrifying to think where we'll be in 10 to 20 years because there is no end in sight. Colleges have no incentive to control costs because (1) demand for a degree is inelastic, and (2) the student loan system always makes the money available to parents and students to pay. Abolish the federal financial aid program, I say. Cut off the money supply. Only then will colleges get serious with controlling their costs.
3
Only the rich can afford to go to private colleges. It was always so, it is just that recently every student seems to believe that they too should go to an expensive school, whereas in the past, most people went to state universities.
A lot of the comments deny the reality that young people often, and almost inevitably, have little financial knowledge, education, experience or feedback. Clearly one goes to college partly to acquire these things, but one has to get into college, and pay the bills, in the first place. It's also clear that much of the student loan machinery is set up in a way that makes financial insight more difficult. The simple fact is that, regardless of actual talent, more rich kids attend college than do poor ones, and they accumulate less debt. It's expensive to be poor!
8
If a student does not understand what borrowing means and cannot bother to research it before they take out huge loans, perhaps they are not college material in the first place.
1
No loans are free. Taking out a student loan is like taking out a mortgage on a house -- or not paying a credit card bill on time. Fees pile up.
It takes a steady eye and a little self-deprivation to get out from under.
Unless you're a bank or financial institution -- or a hotshot who bought more house than he needed or could afford and then a beach house for good measure -- you have to pay your debts.
It takes a steady eye and a little self-deprivation to get out from under.
Unless you're a bank or financial institution -- or a hotshot who bought more house than he needed or could afford and then a beach house for good measure -- you have to pay your debts.
3
Yes, that much is obvious. But why do my federal student loans have a higher interest rate than my car loan?
1
My father insisted I go to college (in 1960) and swore he would pay for the loan that started me off ($80k in today's money). Then he had money problems, and it took me (probably what someone else said was 14 years) to pay off the debt. And yes, I didn't buy a house until my 30s, and yes, I didn't go to Europe until my 30's, but I got a college education that started me on the road to value more education that has paid for itself many times over.
1
The federal government has NO business in student loans.
The federal government loans and monies causes increased tuition.
Get the federal government OUT OF EDUCATION.
Abolish the Department of Education
Get the federal government OUT OF STUDENT LOANS.
The federal government loans and monies causes increased tuition.
Get the federal government OUT OF EDUCATION.
Abolish the Department of Education
Get the federal government OUT OF STUDENT LOANS.
3
College was not quite so expensive until the whole student loan business was concocted. Then all of sudden, tuition expanded to fill the dollars available to borrow. That said, it's all a big game and like all games, it's how you play it.
My younger neighbors wonder how we afforded private university tuition for our 2 kids. Preparation. I often explain that the more you save for your kids' educations, the more they (the system) will take and the less in grants, institutional scholarships, etc. (the free tuition) you get. I'm talking about middle-class-both-parents working families. If you can control your "income," best to divert as much as you can to retirement accounts and deferred compensation. Talk to an accountant. Look at what you and your student have to fill out on the FAFSA years before you do it. The poorer you look on paper, the better. Even your student's summer earnings will get sucked up and they will "give" you less. Better your kid starts his own IRA with that money.
Institutional money is the way to go (grants, scholarships, low-interest loans)--check out the universities you're applying to. The better endowed ones have more to give. Helps if your kid maintains an A average in high school too. Start preparing early--like when your student is in 8th grade. And make sure (s)he knows what's involved every step of the way.
My younger neighbors wonder how we afforded private university tuition for our 2 kids. Preparation. I often explain that the more you save for your kids' educations, the more they (the system) will take and the less in grants, institutional scholarships, etc. (the free tuition) you get. I'm talking about middle-class-both-parents working families. If you can control your "income," best to divert as much as you can to retirement accounts and deferred compensation. Talk to an accountant. Look at what you and your student have to fill out on the FAFSA years before you do it. The poorer you look on paper, the better. Even your student's summer earnings will get sucked up and they will "give" you less. Better your kid starts his own IRA with that money.
Institutional money is the way to go (grants, scholarships, low-interest loans)--check out the universities you're applying to. The better endowed ones have more to give. Helps if your kid maintains an A average in high school too. Start preparing early--like when your student is in 8th grade. And make sure (s)he knows what's involved every step of the way.
18
Maybe a silly dumb thought...not even worth asking?
Why is American college so expensive in the first place?
Isn't that really the problem? In a way, making all these loans available just feeds the beast. Wasn't the idea to help poor people have a chance? At some point it stopped doing that, just put off their subjugation, maybe when the colleges subsequently jacked their prices (supply and demand?). So what, then, has become the point?
Why is American college so expensive in the first place?
Isn't that really the problem? In a way, making all these loans available just feeds the beast. Wasn't the idea to help poor people have a chance? At some point it stopped doing that, just put off their subjugation, maybe when the colleges subsequently jacked their prices (supply and demand?). So what, then, has become the point?
27
The state university in NY is about $7000 a year and if a student goes to a community college for the first two years and lives at home, the total is cheaper than a new car.
What is expensive is private universities and students should realize that unless it is Harvard or Yale, they are not worth the money.
What is expensive is private universities and students should realize that unless it is Harvard or Yale, they are not worth the money.
2
It's the free market system in education. Nothing more.
One can complain about teachers or administrators salaries but the reason why it is so expensive is because people are willing to pay for it and they continue to do. They get the loans from the profiting banks to pay for it. Whether or not a student goes into debt is irrelevant when profit motives are paramount to education.
One can complain about teachers or administrators salaries but the reason why it is so expensive is because people are willing to pay for it and they continue to do. They get the loans from the profiting banks to pay for it. Whether or not a student goes into debt is irrelevant when profit motives are paramount to education.
The reason it is so expensive is that the banks will lend just about any amount to anyone who wants to go. Knowing this, colleges have no incentive to keep costs down. If caps were in place on how much debt a student could take on, the price of college would drop.
It drives me crazy that the value of money is not taught from Kindergarten and up. As a fourteen year old I remember practicing the right way to make change. One particular problem I had is when a customer was charged say, $2.37 cents. They'd hand me a 5 dollar bill and 37 cents in change. Used to drive me nuts because the fiver was more than enough. Why add 37 more cents? (Yea, I got it now).
Capitalism is the democracy of our country. And it ought to be taught starting from kindergarden. I suspect it is not because the greedy want to keep all the money.
Capitalism is the democracy of our country. And it ought to be taught starting from kindergarden. I suspect it is not because the greedy want to keep all the money.
5
Kindergarten teacher here. Yes, we teach them how to make change.
1
can you imagine what the unemployment rate in the U.S. would be were it not for the development of our present-day "cash registers" which do the math for its operator? One of the greatest economic developments of all time!!!
This is a great article. Rather than focusing on hard luck stories, of which there is no shortage, it takes a more positive view by showing how the process can be managed by a student who has proper information and good advice. I particularly liked the interest per day anecdote at the end. Seeing numbers like that can really drive home an elusive concept such as loan interest. One concept not dealt with, however, is career choices and the relationship of a student's likely future income to repay the loans taken.
6
We can talk left and right about personal responsibility in college debt but the larger picture is why is college so damn expensive? Why was (mandatory) food and board so expensive?
You can give kids a clear view of their loan burden before going into college but I don't think it will make them take out less loans - this is the ugly cost of going to school in America. Trust me: I graduated from undergrad with $72k in loans. My French husband graduated from an elite engineering school in France with $0 in debt.
The only reason we were financially able to buy a house was because all those years of not paying back student loans allowed him to save up for a down payment.
There are a million of angry things I could say about student loans and the very real burden they put on our young, but I will only praise the French system instead: the only reason I'm even able to pay for a NYTimes subscription is because of them. Thanks, France. Keep up the good work.
You can give kids a clear view of their loan burden before going into college but I don't think it will make them take out less loans - this is the ugly cost of going to school in America. Trust me: I graduated from undergrad with $72k in loans. My French husband graduated from an elite engineering school in France with $0 in debt.
The only reason we were financially able to buy a house was because all those years of not paying back student loans allowed him to save up for a down payment.
There are a million of angry things I could say about student loans and the very real burden they put on our young, but I will only praise the French system instead: the only reason I'm even able to pay for a NYTimes subscription is because of them. Thanks, France. Keep up the good work.
107
It's expensive because: free market.
The left wants to curb profits in education. The right wants to enhance it. It's as simple as that.
The left wants to curb profits in education. The right wants to enhance it. It's as simple as that.
The Grandes Ecole are fantastic -- if you get in. The French university system is a mess, however. The best high students spend the next two years in class preparatoire (roughly equivalent to government sponsored, and more intensive, Kaplan prep) training to take the entrance exams for the grandes ecoles. In a truly French twist, the grandes ecoles graduates who become professors end up teaching university students who weren't ambitious enough to try the entrance exams. They are also paid less than the cram-school teachers!
So yes, thank the French for your husband's education. But also thank the USA for offering him professional opportunities commensurate with his training.
So yes, thank the French for your husband's education. But also thank the USA for offering him professional opportunities commensurate with his training.
1
A recent study commissioned by the Commonwealth of Virginia showed that increases in spending for athletic programs and administration were the greatest drivers of state college tuition.
4
Student loans are one more example of a system of bad policy based on good intentions by the federal government. Easy terms, long-term spread out payments, abilities to defer and all sorts of bells & whistles designed to encourage lending and lessen the impact of repayment have distorted behavior by created a permissive environment of borrowing. This "something for free" attitude is part of every subscription based business model so in vogue now. Why pay for music when you can sign up for $9.95 for the rest of your life. Why watch free TV when Hulu and Netflix simply want a little per month. Most people's cell bill exceeds their student loan cost (1/3 of people who default have only a $5K balance).
Further, the loan system encourages bad decision making by fixing an interest rate regardless of major or college you attend. Imagine if you paid a loan equal to the outcome you should expect. In other words, if you attended University of Phoenix or for that matter any of the bottom 1/3 of non-profit universities with default rates over 12% and were told that if you attend and get a low value degree, you would be paying 12% vs if you attended a good school and studied computer science, you would be paying only 2%.
Further, the loan system encourages bad decision making by fixing an interest rate regardless of major or college you attend. Imagine if you paid a loan equal to the outcome you should expect. In other words, if you attended University of Phoenix or for that matter any of the bottom 1/3 of non-profit universities with default rates over 12% and were told that if you attend and get a low value degree, you would be paying 12% vs if you attended a good school and studied computer science, you would be paying only 2%.
4
In my family of six kids, I was the only one to go to college and then law school. I had no idea about financial aid. I enlisted in the Air Force and did four years active duty (and took several classes while on active duty), so I had the G.I. Bill for 45 months of schooling. Even though I went to a state school (UMAss Amherst), the G.I. Bill did not pay for everything. I worked and went to school - I only took as many courses as I could afford each semester because I did not know about student loans and did not want to get in debt. That meant it took me ten years after my four years in the military - but I graduated with zero debt.
For nearly 40 years now, I have taught as an adjunct at a variety of colleges and universities. I continually urge people to live at home, go to community college, work part time or full time and avoid student debt - this may extend the time it takes to get a degree, but they will be more mature and in less debt. We need to slow and/or stop this lunacy of borrowing money to get an education.
For nearly 40 years now, I have taught as an adjunct at a variety of colleges and universities. I continually urge people to live at home, go to community college, work part time or full time and avoid student debt - this may extend the time it takes to get a degree, but they will be more mature and in less debt. We need to slow and/or stop this lunacy of borrowing money to get an education.
47
Let's do some back of the envelope math here: if graduate with $100k in debt and a job making $50,000 and want to live in a "cool" urban setting.
Say 20% ($10,000) goes to federal, state taxes, SS, medicare etc. Down to $40,000.
$1,000 per month to rent. Down to $28,000
$1,500 per month to other living (food, drinks, clothing, commute, car, entertainment). Down to $12,000
$2,000 for health insurance. Down to $10,000.
Interest on loan (3% x $100k). Down to $7,000
So with no savings, no retirement account, no extravagent purchases, no putting money aside for house downpayment...it takes 14 years to pay off that debt.
There's the math. Read it. How about we counsel using that.
Say 20% ($10,000) goes to federal, state taxes, SS, medicare etc. Down to $40,000.
$1,000 per month to rent. Down to $28,000
$1,500 per month to other living (food, drinks, clothing, commute, car, entertainment). Down to $12,000
$2,000 for health insurance. Down to $10,000.
Interest on loan (3% x $100k). Down to $7,000
So with no savings, no retirement account, no extravagent purchases, no putting money aside for house downpayment...it takes 14 years to pay off that debt.
There's the math. Read it. How about we counsel using that.
59
Thank you, Dennis. It's just arithmetic. Please, folks, follow Dennis' lead and do the arithmetic.
1
As someone with $100,000 in loans and making $48,000 a year, I'll give you the real envelope math, cause you've left a few things out.
Takehome is 36,360 a year
$700 per month for mortgage, homeowners insurance, and property taxes (it was a federally sponsored, no money down, low interest loan and it's cheaper than renting in this area, so don't judge) leaves us with $28,000
Health insurance $4,000 (and that's a high deductible policy, better not actually get sick!) puts us at $24,000
Car insurance $1500 (I live in Louisiana, car insurance is stupidly expensive here) $22,500
$1000 a month for utility bills, food, commute, maintenance on car, etc-- $12,500
$7000 a year interest on student loans (all DOE loans, consolidated and using auto pay to get the interest rate down as far as possible. I don't know what planet you live on to come up with 3% It's 7-9 for government loans and who knows what for private) 5,500
So that puts it being paid off in 20 years if I never need a new car, have no savings, never actually go to the doctor, don't lose my job, don't dine out, don't go to movies, never go on vacation...
Takehome is 36,360 a year
$700 per month for mortgage, homeowners insurance, and property taxes (it was a federally sponsored, no money down, low interest loan and it's cheaper than renting in this area, so don't judge) leaves us with $28,000
Health insurance $4,000 (and that's a high deductible policy, better not actually get sick!) puts us at $24,000
Car insurance $1500 (I live in Louisiana, car insurance is stupidly expensive here) $22,500
$1000 a month for utility bills, food, commute, maintenance on car, etc-- $12,500
$7000 a year interest on student loans (all DOE loans, consolidated and using auto pay to get the interest rate down as far as possible. I don't know what planet you live on to come up with 3% It's 7-9 for government loans and who knows what for private) 5,500
So that puts it being paid off in 20 years if I never need a new car, have no savings, never actually go to the doctor, don't lose my job, don't dine out, don't go to movies, never go on vacation...
7
Dennis,
If $1,500 a month is needed for other living expenses (which seems reasonable), the annual expense is $18,000, not $16,000, so you're down to $10,000, not $12,000, and at the end you have $8,000 left for principal and interest, not $10,000.
The interest on the loan each year is going to be computed on the outstanding balance rather than the full loan amount, but on the other hand the interest rate is probably going to be higher than 3%. If the rate is 5% and you have $8,000 a year for debt service, it's going to take you almost 20 years to pay off the loan. If the rate is 7%, almost 30 years.
If $1,500 a month is needed for other living expenses (which seems reasonable), the annual expense is $18,000, not $16,000, so you're down to $10,000, not $12,000, and at the end you have $8,000 left for principal and interest, not $10,000.
The interest on the loan each year is going to be computed on the outstanding balance rather than the full loan amount, but on the other hand the interest rate is probably going to be higher than 3%. If the rate is 5% and you have $8,000 a year for debt service, it's going to take you almost 20 years to pay off the loan. If the rate is 7%, almost 30 years.
4
The average college debt, based on reports I've seen, is in the mid to high $20k range. That's much less than most people will spend on their beloved SUVs. Yet, a college degree and training can add a million dollars to one's lifetime earnings. With an SUV, all you have is a costly to run depreciating asset. Why don't we see that this is an investment in one's future and therefore worth the cost.
It is vogue to complain about college costs now, but here is my challenge. Find yourself a hotel room in a decent size US city, that includes a full meal plan, as well as a fitness center, on site nursing and counseling services and, oh, an education. You couldn't do so for the real cost most folks pay for tuition-the actual net dollars spent after discounts are factored in, known as financial aid. Providing an education is a labor intensive enterprise that requires highly trained professionals to deliver the core product. PhDs are not cheap to obtain.
Yet, most colleges do engage in responsible financial aid practices and, as a result, have low default rates. It is the for profit schools that buck this trend and used predatory lending practices to fill seats. Why must news media forever conflate the honest non profits with the sketchy for profits?
And, I don't recall the last time I heard someone complain about the the price of their $40 or $50k SUV. Where, then, are our priorities?
It is vogue to complain about college costs now, but here is my challenge. Find yourself a hotel room in a decent size US city, that includes a full meal plan, as well as a fitness center, on site nursing and counseling services and, oh, an education. You couldn't do so for the real cost most folks pay for tuition-the actual net dollars spent after discounts are factored in, known as financial aid. Providing an education is a labor intensive enterprise that requires highly trained professionals to deliver the core product. PhDs are not cheap to obtain.
Yet, most colleges do engage in responsible financial aid practices and, as a result, have low default rates. It is the for profit schools that buck this trend and used predatory lending practices to fill seats. Why must news media forever conflate the honest non profits with the sketchy for profits?
And, I don't recall the last time I heard someone complain about the the price of their $40 or $50k SUV. Where, then, are our priorities?
105
That SUV you're speaking of is, firstly, new, and secondly, usually purchased when the spending power is high enough to support it.
It's quite a different matter entirely, to speak of what a young person with, *at best*, a starting level salary and no savings or important assets, will have to pay, and pay for years.
That means for many, no new SUV for a long time, which really is not much of a loss. But importantly, for them and us, it means no house down payment, a delayed marriage, a delayed birth of the first child, and less set aside for the next generation to fund their college education.
It's quite a different matter entirely, to speak of what a young person with, *at best*, a starting level salary and no savings or important assets, will have to pay, and pay for years.
That means for many, no new SUV for a long time, which really is not much of a loss. But importantly, for them and us, it means no house down payment, a delayed marriage, a delayed birth of the first child, and less set aside for the next generation to fund their college education.
2
Wish I could "Recommend" this reply more than once
3
I have no idea where that average figure comes from, but I suspect it's reached by including a bunch of people who don't make a lot of sense to include, like people who go to community college, trade school or certification courses, people who drop out after incurring only some debt and people whose parents paid full or partial freight for them.
To use a concrete example that can be verified, SUNY's estimated cost (combined direct and indirect) for an in-state student in 2014-15 is $23,342 a year. That's $93,368 for four years, assuming costs do not go up (which is a fantasy--they go up every year). That's also assuming that the student is able to live on the $1,450 SUNY has allocated for "personal expenses," which works out to about $4 a day.
That's a public university, in-state tuition, and does not account for interest that accrues while the student is enrolled. You're not talking the cost of a new car--something else most young people can't afford--you're talking the cost of a new house.
To use a concrete example that can be verified, SUNY's estimated cost (combined direct and indirect) for an in-state student in 2014-15 is $23,342 a year. That's $93,368 for four years, assuming costs do not go up (which is a fantasy--they go up every year). That's also assuming that the student is able to live on the $1,450 SUNY has allocated for "personal expenses," which works out to about $4 a day.
That's a public university, in-state tuition, and does not account for interest that accrues while the student is enrolled. You're not talking the cost of a new car--something else most young people can't afford--you're talking the cost of a new house.
1
There's a theme in this article that colleges are at least somewhat responsible for informing students about how student loan debt works. I don't think they are, and thinking about college that way is just to view it as High School Part 2. Collegiate and graduate-level education is for adults--the fact that undergraduates these days resemble adults less and less is another issue--and part of being an adult is taking responsibility for yourself. When you buy a car, the dealership is not responsible for your personal financial well-being; they don't need to counsel you on whether you're making the right decision or how much the car is actually going to cost you with interest on the loan, etc. They don't require you to take a class first, either. The expectation is that you are managing your own financial situation, informing yourself, and making your own decisions. I see nothing wrong with having the same expectation of 18 year-olds entering college. If you don't get info on personal finance in high school, it's always available for free in libraries, or for the cost of an Internet connection. Part of learning how to manage your money, and understanding debt, is part of learning how to be an adult. Let's not do away with that expectation for young people.
22
Maybe we need just one brutally honest, but tongue in cheek (somewhat) disclaimer students must sign:
You're about to borrow one heck of a lot of money. The amount probably doesn't even seem real to you right now. But when you graduate and the debt comes due it will be more real than you can imagine. Are you really prepared to juggle your monthly loan repayment of $___ given that doing so along with your other future living expenses may require any of all of the following:
1. Having roommates for several years.
2. Driving the old car you got when you turned 16
3. Not have the latest fashion fill your closet.
4. Staying home on Friday night when your friends are out on the town ... for 5-10 years.
5. Not putting the maximum amount you can in your retirement account and as a result missing out on decades of compounding interest that would otherwise allow you to lead a more enjoyable retirement.
You're about to borrow one heck of a lot of money. The amount probably doesn't even seem real to you right now. But when you graduate and the debt comes due it will be more real than you can imagine. Are you really prepared to juggle your monthly loan repayment of $___ given that doing so along with your other future living expenses may require any of all of the following:
1. Having roommates for several years.
2. Driving the old car you got when you turned 16
3. Not have the latest fashion fill your closet.
4. Staying home on Friday night when your friends are out on the town ... for 5-10 years.
5. Not putting the maximum amount you can in your retirement account and as a result missing out on decades of compounding interest that would otherwise allow you to lead a more enjoyable retirement.
83
While I was pursuing my bachelor's degree in the late 1990s, I took 1996 off for personal reasons. When I resumed my studies a year later, I had to start repaying my Perkins and Stafford loans because the time off was considered my grace period. At the time, I was annoyed about it ... but, in hindsight, repaying my loans while I was still an undergraduate turned out to be one of the best things that could've happened to me (and it allowed me to chuck the deuces to Sallie Mae once and for all in 2002).
The point of my story is I had to make sacrifices and live within -- and sometimes below -- my means to pay off these loans. This is financial literacy 101: if you can't pay a bill IN FULL and ON TIME, don't take the money! Read the fine print; a flexible interest rate -- or one above five percent -- is a disaster waiting to happen. And don't sign any documents without reading -- and understanding -- them. (My father was adamant about NOT co-signing for any of my loans; knowing what I know now, I appreciate that.)
The point of my story is I had to make sacrifices and live within -- and sometimes below -- my means to pay off these loans. This is financial literacy 101: if you can't pay a bill IN FULL and ON TIME, don't take the money! Read the fine print; a flexible interest rate -- or one above five percent -- is a disaster waiting to happen. And don't sign any documents without reading -- and understanding -- them. (My father was adamant about NOT co-signing for any of my loans; knowing what I know now, I appreciate that.)
4
Our colleges & universities are, in general, grossly overpriced due to intended expansion of national economy and GDP by all those trillions that are running through the education-industrial complex. In order to prop-up that GDP (in blobal competition, namely with China) governmental grants and subsidized loans along with trillions of student loan debt, piling up while the spiel "everyone deserves a college degree" is coming at us and students from all directions.
College degrees, now further deflated in actual value though massive onslaught of completely online programs, are in essence a scam, driven by the above, unspoken priority, while presented as a noble cause and smart investment.
"College experience," is something marketed similarly to shopping experience or other emotional event and is - intentionally - grossly oversold.
And especially young people, naturally full with optimism and no experience of paying of any and in particular substantial debt, are, since 18 years+ old adults, more or else eager to sign on the bottom line.
Like with healthcare, where we spend (waste?) twice as much money and twice as many % of GDP than any other developed (OECD) country with precious nothing to show for that, the mentioned education-industrial complex, working in unison with strategic objective of inflating the GDP will continue to march on, unchecked.
College degrees, now further deflated in actual value though massive onslaught of completely online programs, are in essence a scam, driven by the above, unspoken priority, while presented as a noble cause and smart investment.
"College experience," is something marketed similarly to shopping experience or other emotional event and is - intentionally - grossly oversold.
And especially young people, naturally full with optimism and no experience of paying of any and in particular substantial debt, are, since 18 years+ old adults, more or else eager to sign on the bottom line.
Like with healthcare, where we spend (waste?) twice as much money and twice as many % of GDP than any other developed (OECD) country with precious nothing to show for that, the mentioned education-industrial complex, working in unison with strategic objective of inflating the GDP will continue to march on, unchecked.
2
I went to Harvard and when I graduated a decade or so ago, I literally had no idea how much debt I had. All I had was a stack of papers with numbers on them, and I knew I'd have to pay something back. I wasn't ignorant or naive, I don't think, I just honestly hadn't thought about it, and I never remember seeing one sum of "here's what you owe, in sum." This article has some great suggestions for both schools and families. I busted my a$$ to pay off my college loan debt for the ensuing decade and it only really hit me when I was babysitting by night, working by day, living in a tiny NYC apartment, just how much I owed. (And don't get me started on grad school...)
'...I wasn't ignorant or naïve...'
Anyone who takes out loans without understanding exactly how much will have to be paid back can hardly be seen as otherwise.
Anyone who takes out loans without understanding exactly how much will have to be paid back can hardly be seen as otherwise.
6
Seems to me that there ought to be a grown up involved here somewhere. Seems to me that some decisions have to be made spending the money and perhaps some hard decisions made. Why are people perpetually surprised when the facts are right there.
2
Debt education should be mandatory, because it is something that our culture tends to overlook. Ideally it should be imparted while kids are growing up, but that's assuming that parents have a full understanding and healthy respect for the potential risks and rewards of taking on debt. Thus it should definitely be taught to high school and middle school students, before they enter the admissions process. The benefits of debt understanding extend to other important decisions that are made, beyond college selection (as some who were caught in the 2008 mortgage could attest to).
1
The underlying issue throughout these stories is that students are not financial literate by the time they need to make a decision about where to go to college and how much debt to take on. And unfortunately, most parents aren't that much more knowledgeable about finances to steer their children in the best direction. Here's a simple solution: use some of the questions on all the tests schools are now administrating and make them problems about calculating student loan interest to figure out the total cost of a college education with loans. Then teachers would have to spend class time teaching to the test and cover the topic of student loans and interest calculations. And while you're waiting for that to happen, check out www.Road2College.com and their many articles on understanding financing college. Bringing information to parents on college admissions and financing earlier in their child's school career is our mission. Here's a recent post explaining how college should be looked at like any other investment: http://www.road2college.com/evaluating-college-as-an-investment-whats-it...
17
If this were a civilized country, state colleges would be free. But that would require billionaires like Sheldon Adelson (who benefit greatly from society) to pay more taxes.
I must be mad!
I must be mad!
25
The US has the most progressive tax system in the world. For people like you, it is never enough.
2
Too many schools only focus on keeping enrollments up and could care less about the burdens student debt will place on the futures of many young men and women.
Reminds one of the subprime debacle.
Reminds one of the subprime debacle.
I always assumed a mix of savings, loans and scholarships would get both of my children through and it did. I told them from the beginning of high school to apply themselves if they wanted more choices in where to attend because we could not afford private unless big scholarships. My oldest graduated in 2011 with about 24k loan from a private college with a music and theater degree. She has a great paying job in technology and expects to finish paying her loan this year. She could have gone to public university, but I'm convinced the small private college she attended was perfect. My second daughter opted to go private on a large scholarshiip. She switched to public voluntarily. She will have a very small loan as a result and is happy with her choices.
2
Your daughter is lucky, as there are thousands of young people with degrees in music and theater who are working minimum wage jobs, if even that.
Parents should counsel their children not to get degrees in fields with no jobs, unless they want their children in debt living in their basements forever.
Parents should counsel their children not to get degrees in fields with no jobs, unless they want their children in debt living in their basements forever.
Good advice to deal with the out-of-control loans. The Basic problem, however, is out of control costs.
No matter how you paint it, many college kids are economically crippled before they even get out of the gate. How can they buy cars, save for down payments, have children, take vacations, save for retirement, etc., when so much of their disposable income is already spoken for?
I so wish there were an option for students, and their families, who want good teachers, classrooms and information availability/libraries but not costly extras. Why does Georgetown have a shuttle bus system in public-transport-rich urban Washington DC? Why did NYU acquire so much of Greenwich Village, thereby indebting the university practically forever....
This happens, in my view, largely because vainglorious administrators get to play with federally funded student loans that comprise so much of tuition payments.
If there were no, or much reduced, student loans, then there would be much less of this nonsense. Same problem, in a way, as medical costs. When insurers pay, cost controls go by the wayside.
No matter how you paint it, many college kids are economically crippled before they even get out of the gate. How can they buy cars, save for down payments, have children, take vacations, save for retirement, etc., when so much of their disposable income is already spoken for?
I so wish there were an option for students, and their families, who want good teachers, classrooms and information availability/libraries but not costly extras. Why does Georgetown have a shuttle bus system in public-transport-rich urban Washington DC? Why did NYU acquire so much of Greenwich Village, thereby indebting the university practically forever....
This happens, in my view, largely because vainglorious administrators get to play with federally funded student loans that comprise so much of tuition payments.
If there were no, or much reduced, student loans, then there would be much less of this nonsense. Same problem, in a way, as medical costs. When insurers pay, cost controls go by the wayside.
3
You are absolutely right. The unreasonable explosion in costs is what is driving the high tuition as well as room and board costs, which in turn leads to high parental contribution and student and parent debt.
How is it possible that the cost of a ream of paper or a roll of toilet paper costs less than it did 20 years ago and even less than 40 years ago, but a textbook costs five times as much? Why is it that the cost of attending a college is four time higher than it was 40 years ago?
How is it possible that the cost of a ream of paper or a roll of toilet paper costs less than it did 20 years ago and even less than 40 years ago, but a textbook costs five times as much? Why is it that the cost of attending a college is four time higher than it was 40 years ago?
Counseling should be required for private loans. Private lenders work to obscure how predatory they are. Romney ran for president boosting private loans because he cares only about bankers getting their hooks into students, not you finishing college with manageable debt. See people like Romney for what they are and run for your life.
Most borrowers never consider nondischargeability. Private lenders are ruthless in battling attempts at discharge, no matter how dire the circumstances. Your spouse can be dying, or your child or your parents but they'll fight your discharge. And they'll probably fight even if you're dying. They don't care about tragic irreversible circumstances.
Almost no young people consider they might become permanently disabled. Then government loans can be discharged with medical evidence - but private lenders will battle such attempts. Why? Because they can. It's their job to load you with as much nondischargeable debt as possible.
Know that going in and run.
Work nights, weekends, anything to avoid private loans, which are like slavery. Saving yourself from them is paramount. Do your research.
Taking private loans can destroy your life. Sounds awful, right, but how bad can it be?
Learn all you can about how they've battled the elderly and disabled. At 50 you might be living in a trailer with terminal cancer collecting social security. Private lenders would do whatever they can to take any money you have.
Forewarned is forearmed.
Most borrowers never consider nondischargeability. Private lenders are ruthless in battling attempts at discharge, no matter how dire the circumstances. Your spouse can be dying, or your child or your parents but they'll fight your discharge. And they'll probably fight even if you're dying. They don't care about tragic irreversible circumstances.
Almost no young people consider they might become permanently disabled. Then government loans can be discharged with medical evidence - but private lenders will battle such attempts. Why? Because they can. It's their job to load you with as much nondischargeable debt as possible.
Know that going in and run.
Work nights, weekends, anything to avoid private loans, which are like slavery. Saving yourself from them is paramount. Do your research.
Taking private loans can destroy your life. Sounds awful, right, but how bad can it be?
Learn all you can about how they've battled the elderly and disabled. At 50 you might be living in a trailer with terminal cancer collecting social security. Private lenders would do whatever they can to take any money you have.
Forewarned is forearmed.
9
I think that student loans are a big mistake. If students could not borrow to pay for college then the colleges would have to figure out a way to make an education affordable. When I went to college in the 60s I had to figure out how to pay for it without borrowing. A stint in the military provided money in the form of the GI bill. Going to a state school keep the costs down. Working a midnight to 8 am job provided income. There are plenty of ways to get a college education without going into heavy dept. There is also night school which may even be subsidized by your employer.
2
Much has changed in 50 years. Your college experience isn't really relevant to the discussion anymore.
1
The reason his experience is not relevant is that the cost of college has increased beyond reason.
While reforming the college loan system is critical, some examination and criticism needs to be directed at the underlying cost structure of our colleges and universities. We need to ask ourselves whether degree programs need to be as long as they are and whether institutions have the right level of automation and centralization of administrative tasks. Most importantly, we must examine the difference between the cost per student for different degree programs and the tuition collected. I would speculate that some underutilized departments are effectively subsidized by others better attended programs. Out of control costs of college are creating a huge barrier to upward mobility and financial drag on our young people. They deserve better.
29
I went to Duke with a student loan and was made to feel like a beggar. Duke hired the poorest people in Durham for their lowest-level clerical positions and they hated us all. At the beginning of each semester, I was starving, out of money, and each day I would trudge to the office only to have the town girls sneer and say it hadn't arrived. It took me a few semesters to learn this was their way of exerting control. When I received the money, half would be taken up buying used copies of my own professors' books, their own little scam. When I was ready to graduate, I learned at the last minute that I would not receive a degree in my second major, that the advisor no longer agreed with the courses he had earlier approved. Because I was always made to feel like a panhandler there, I did not contest it. Later, I never once had to prove I was a honors grad, or even a grad at all. Knowing what I know now, I wouldn't have wasted my time going there on borrowed money to be treated like I was a resented step-child. Don't borrow money to attend college if you will be treated as a second-class student.
65
Those people are there to help you. If politeness doesn't work, change your voice and tell them you expect them to have a better attitude next time. If that doesn't work, go to their supervisor. Nine out of ten times they will stop treating you badly once they realize you won't tolerate it.
2
"When I received the money, half would be taken up buying used copies of my own professors' books, their own little scam. "
Every university I have been associated with did not let professors collect royalties on their own textbooks. So did you make this up or did you go to an unethical institution?
Every university I have been associated with did not let professors collect royalties on their own textbooks. So did you make this up or did you go to an unethical institution?
They did the same nonsense at Binghamton. And after the bursar's office finally decided to hand over the checks, many of us then had to contend with bank tellers who would happily inform us that "student checking accounts" had "anti-fraud systems" in place that would freeze large deposits for thirty business days.
I am a college professor at a public university. I am outraged at the tuition small private colleges, such as Oklahoma Christian University, charge students. Colleges like Oklahoma Christian University do not have great track records sending their students off to graduate school or high paying jobs. Nor do their faculty publish in prestigious research journals or write well regarded books. They have no business charging their students $100,000 for the degree they provide. It is not worth it. It as a swindle.
My advice is to go to the best public university possible and avoid debt. This means avoiding small private (for profit) universities with little or no national reputation but with big "marketing campaigns" and warm (manipulative) "welcoming committees" that are all to happy to "help" students put together loan packages. It makes me sick. And, sad.
My advice is to go to the best public university possible and avoid debt. This means avoiding small private (for profit) universities with little or no national reputation but with big "marketing campaigns" and warm (manipulative) "welcoming committees" that are all to happy to "help" students put together loan packages. It makes me sick. And, sad.
224
This is a deflection, Lynn. Somehow, you have implied that small Christian private colleges (the one you cite is a nonprofit, by the way) are the culprit behind the massive student loan problem. Unfair. The problem is dramatically more widespread.
1. All colleges are in on the scam. Not just Christian ones. There are an endless number of mediocre private schools whose tuition is excessive and whose value is limited.
2. Public colleges are cheaper than private schools if you are from that state. But, state schools have been increasing their enrollment of out of state (and even out of country students) as the tuition is higher. This also crowds out the lower tuition in state student population.
3. Someone needs to explain why the presigious "non-profit" schools, who obviously pay no taxes, make profits every year and have multi-billion dollar endowments. Seems to me, the biggest winners are the Wall Street banks who invest these funds for a nice fat commission.
1. All colleges are in on the scam. Not just Christian ones. There are an endless number of mediocre private schools whose tuition is excessive and whose value is limited.
2. Public colleges are cheaper than private schools if you are from that state. But, state schools have been increasing their enrollment of out of state (and even out of country students) as the tuition is higher. This also crowds out the lower tuition in state student population.
3. Someone needs to explain why the presigious "non-profit" schools, who obviously pay no taxes, make profits every year and have multi-billion dollar endowments. Seems to me, the biggest winners are the Wall Street banks who invest these funds for a nice fat commission.
2
A "Christian College" - has God on its Side.
A M E N !
A M E N !
"I am outraged at the tuition small private colleges, such as Oklahoma Christian University, charge students."
Oh you are outraged! Please. Small private colleges have to fund themselves so charge higher tuition. Saying they have no business charging $X is not for you to say until you've examined their balance sheet. You have no idea if they are justified or not in charging the fees they do. I do agree that if someone can't take on the cost they should attend a public university, but that is a personal decision and the college is not responsible for it. The student and his family is.
Oh you are outraged! Please. Small private colleges have to fund themselves so charge higher tuition. Saying they have no business charging $X is not for you to say until you've examined their balance sheet. You have no idea if they are justified or not in charging the fees they do. I do agree that if someone can't take on the cost they should attend a public university, but that is a personal decision and the college is not responsible for it. The student and his family is.
The article just highlights one facet of a bigger problem, financial illiteracy in America is right up there with scientific illiteracy. In my junior high school, there was a required class that taught finance and bookkeeping as part of the course. Some 20 years later, my daughter took a similar required course at the same school. Somewhere in the 1990's, the course disappeared and never returned. I suspect this is true in many parts of the country.
39
Wall Street does not want an educated "consumer."
3
This has little or nothing to do with financial illiteracy. I incurred six figures of educational debt and I am fully financially literate. I did it because, even incurring that debt, my risk-adjusted earning capacity was higher. Oh, and it also let me do something fulfilling with my life instead of digging ditches or being perpetually marginally employed.
The important phrase there, by the way, is "risk-adjusted." There is no riskless investment. Education might once have been close, when subsidies made it cheap, but it certainly has been quite the contrary for the last fifteen or twenty years.
If you're a high school student in this country, you have two options. Option 1 is forego college, and accept the moderate-risk, low-reward life of working jobs that do not require a college degree and being forever shut out of many of those jobs. You give up a huge chunk of possible future earning capacity, but in exchange you do not have to put your soul in hock. Option 2 is to go to college, and maybe beyond, and accept the high risk that comes with high leverage (your net worth on a balance sheet basis will likely be negative for years, requiring you to maintain a healthy cash flow to remain personally solvent), in exchange for the reward of the possibility of upward mobility.
You do not choose Option 2 because you are financially illiterate--you choose it because you have the modicum of ambition and self-esteem required to want to make something of yourself.
The important phrase there, by the way, is "risk-adjusted." There is no riskless investment. Education might once have been close, when subsidies made it cheap, but it certainly has been quite the contrary for the last fifteen or twenty years.
If you're a high school student in this country, you have two options. Option 1 is forego college, and accept the moderate-risk, low-reward life of working jobs that do not require a college degree and being forever shut out of many of those jobs. You give up a huge chunk of possible future earning capacity, but in exchange you do not have to put your soul in hock. Option 2 is to go to college, and maybe beyond, and accept the high risk that comes with high leverage (your net worth on a balance sheet basis will likely be negative for years, requiring you to maintain a healthy cash flow to remain personally solvent), in exchange for the reward of the possibility of upward mobility.
You do not choose Option 2 because you are financially illiterate--you choose it because you have the modicum of ambition and self-esteem required to want to make something of yourself.
3
Since the student loan business was originally government subsidized, private sector lending, the banks had no incentive to promote responsible borrowing because the taxpayers picked up the default risk. In fact, obscuring the cumulative balance and payment info was good for business.
Now that public loans are direct, new tools are emerging to help students and parents. More are needed.
The history of private sector lending in the last couple of decades has been pushing money at the consumer with as little disclosure as possible, leading ultimately to the Great Recession.
But even after that harsh lesson, the GOP is still opposing reasonable disclosures on high risk loans. Prddictable but nauseating.
Now that public loans are direct, new tools are emerging to help students and parents. More are needed.
The history of private sector lending in the last couple of decades has been pushing money at the consumer with as little disclosure as possible, leading ultimately to the Great Recession.
But even after that harsh lesson, the GOP is still opposing reasonable disclosures on high risk loans. Prddictable but nauseating.
42
The high-risk loans are taken out because parents and students have so little choice -- without the loan, you won't be going to college. Make all the disclosures you want, nobody reads the fine print anyway. The only thing nauseating is your making a political issue out of this. Which is typical for a NY Times commentator.
Frankly that isn't true. Whether its student loans or payday loans, terms of the loans are disclosed. The problem is financial illiteracy. People are sloppy, don't understand and sign the contract without really knowing (and possibly not caring) what the terms are. We would be well served with high schools and colleges teaching required financial literacy courses.
4
For Ms. Liao to say “But the fact that I was spending $2.23 each day without actually buying anything for myself resonated with me so much more.” is utterly and completely wrong. She invested in herself by getting an education. This thinking will not serve her well in the real world if she can't understand that the debt bought her an education, she only wants to focus on the negative aspect of student loans, not the positive.
68
No, Ms Liao is actually likely wondering why she is paying that kind of debt for a college education that people twenty and thirty years older than her are not.
She feels like she lost some kind of generational lottery, and she's right. Through no fault of her own.
She feels like she lost some kind of generational lottery, and she's right. Through no fault of her own.
1
Incurring debt is not investing. Investing is spending less than you earn and investing the difference. The old G.I. Bill was investing - you served your time in the military; afterwards, you got a benefit to help you go to college. Now, you go to college and then enter the military or law enforcement to pay off the debt - that is not investing.
Ms. Liao has the right idea. It is costing her money every day. Yes, she has a formal education now, but student loans put you in debt before you even start your college classes. I am glad she got an education and was lucky enough to not get sick or injured and to find and keep a job to pay it off - but hoping for good fortune and good health and a good job to pay off loans is NOT investing.
Ms. Liao has the right idea. It is costing her money every day. Yes, she has a formal education now, but student loans put you in debt before you even start your college classes. I am glad she got an education and was lucky enough to not get sick or injured and to find and keep a job to pay it off - but hoping for good fortune and good health and a good job to pay off loans is NOT investing.
1
There are other ways, to make an investment, than to leverage it!
I'm thrilled that she's keenly noticing how it's painful to pay interest. Hopefully, she'll at some point be able to be on the returns side of her finances. Which unfortunately will be harder, and take longer, for her than it should.
I'm thrilled that she's keenly noticing how it's painful to pay interest. Hopefully, she'll at some point be able to be on the returns side of her finances. Which unfortunately will be harder, and take longer, for her than it should.
What's up with parents who refuse to help their kids through college? I have 2 who have finished college and my commitment was to do anything possible to have them graduate debt free. Seeing them start off life on a sound footing was worth a lot more to me than having newer and better cars, or a fancier house.
114
What if you wouldn't have a car or a house?
Some families were unemployed and spent down all savings during the recession, not to mention other costs like health care, that make it hard to pay for college.
Still others got a late start and only paid down their own loans or started working at their current salary later in life and are nowhere near being able to pay the expected family contribution, even forgoing buying a house PERIOD, not to mention retirement.
I'm happy your plans worked out. Not everyone's do.
Some families were unemployed and spent down all savings during the recession, not to mention other costs like health care, that make it hard to pay for college.
Still others got a late start and only paid down their own loans or started working at their current salary later in life and are nowhere near being able to pay the expected family contribution, even forgoing buying a house PERIOD, not to mention retirement.
I'm happy your plans worked out. Not everyone's do.
2
Some parents do not love their children and do not wish to help them--and beyond a miserly minimum, will not. (Money has nothing to do with it.)
Some parents love their children deeply and help them as much as possible, but they are simply too poor.
Some parents love their children deeply and help them as much as possible, but they are simply too poor.
6
This attitude is very elitist. Not every parent has the money or assets to liquidate to pay their kid's way through college.
14
Colleges want students to borrow to pay tuition. And students want get a degree and most enjoy the college experience. I doubt that the borrowing moment is realistically the time for serious counseling although career counseling while in school makes sense. The counseling about how to handle and pay off debt should come when jobs begin and it will be an important life lesson about debt more generally.
I beg to differ. The time to learn about managing debt should not be when one is already saddled with it. This is the problem so many people seem to face: they didn't fully think through or comprehend the long-term implications of the debt they were assuming ... or they just didn't care. So they graduate college saddled with debt and then quickly amass more debt as they buy a new car, get a new wardrobe for their new job, move to a more expensive city, et al.
3
Colleges are over priced but that doesn't excuse students borrowing excessive amounts of money. They should carefully consider their major and understand the economic consequences. Chemical engineering is hard but it pays well. Gender studies, Peace Studies, and You Name It Studies don't pay particularly well if you can manage to find a job. Buyer beware.
32
It's easy to pick on the humanities but not everyone can or should get a STEM degree. I majored in English and developed advanced skills in research, critical reading, writing, and thinking. Being able to express yourself easily and well on paper is an invaluable skill that most people lack. I got a lot of crap for my choice in major at the time, but not now - I hear all the time from people that they wish they could write well, and that working life would be so much easier if they did.
The value of a humanities major isn't in the subject knowledge. My knowledge of obscure 16th century British authors has never been of value in the workplace. It's the skills developed by reading them with a critical eye, and distilling my thoughts about them into words. I use those skills daily. As long as a major is sufficiently rigorous and develops critical reading, writing, and thinking, it'll produce a valuable worker. Why should someone with no talent for science become a chemical engineer? Better that they play to their own skills, because it takes a variety of talents to make the world function as it does.
The value of a humanities major isn't in the subject knowledge. My knowledge of obscure 16th century British authors has never been of value in the workplace. It's the skills developed by reading them with a critical eye, and distilling my thoughts about them into words. I use those skills daily. As long as a major is sufficiently rigorous and develops critical reading, writing, and thinking, it'll produce a valuable worker. Why should someone with no talent for science become a chemical engineer? Better that they play to their own skills, because it takes a variety of talents to make the world function as it does.
21
Colleges are overpriced because of government involvement in student loans.
5
nrbsr
HOGWASH!!
Before the mid-160s there were no student loans for all (except GI bill from WWII)
THat meant only the top 10% of households could afford college
Federal student loans are capped per year and in total. (And always have been).
Now the total allowed per year might cover just tuition for 1 semester - forget living expenses or the 2nd semester.
WHat is unlimited - and flooded in the money - were the PRIVATE student loans which began in the late 1980s. Unlimited money from banks - what could possibly go wrong with that?
HOGWASH!!
Before the mid-160s there were no student loans for all (except GI bill from WWII)
THat meant only the top 10% of households could afford college
Federal student loans are capped per year and in total. (And always have been).
Now the total allowed per year might cover just tuition for 1 semester - forget living expenses or the 2nd semester.
WHat is unlimited - and flooded in the money - were the PRIVATE student loans which began in the late 1980s. Unlimited money from banks - what could possibly go wrong with that?
3
My wife and I have five children. All five attended PUBLIC colleges where the tuition was reasonable. Four of the five had BA's. One has a business degree from a state university and two lawyers. All five have repaid their student loans by working nights and summers during college, living reasonably and paying off the student loans early. We did what we could to help them. But we did not live in a large house, take expensive vacations, buy new cars or raid retirement accounts. Two of the boys even had to share a bedroom without having to undergo years of psychotherapy from their childhood penury.
Everyone should have to take financial education BEFORE they accept the first student loan check. In addition, a new document needs to be added which reads
" I voluntarily accept this student loan for my education. I understand that I must repay this loan and the interest on this loan. I cannot go bankrupt to get out of repaying this loan. The lending agency does not care that I want to take an education degree from a private college and will only make #35,000 a year while repaying $100,000 in student debt. I am an adult and I must act as an adult. I may have to delay buying s house, having children, buying a new car or even getting married until I have repaid this prior debt obligation."
Next year our first grandchild goes to college. We informed her that we would NOT pay for her to attend MIT. The state university engineering program is reasonable.
Everyone should have to take financial education BEFORE they accept the first student loan check. In addition, a new document needs to be added which reads
" I voluntarily accept this student loan for my education. I understand that I must repay this loan and the interest on this loan. I cannot go bankrupt to get out of repaying this loan. The lending agency does not care that I want to take an education degree from a private college and will only make #35,000 a year while repaying $100,000 in student debt. I am an adult and I must act as an adult. I may have to delay buying s house, having children, buying a new car or even getting married until I have repaid this prior debt obligation."
Next year our first grandchild goes to college. We informed her that we would NOT pay for her to attend MIT. The state university engineering program is reasonable.
56
I am on the MIT board, so no doubt I'm biased. But the value of the MIT education is pretty enormous. And it may not actually cost her any more, depending on what her family income and assets are. Whatever help you're willing to give her, you should give her the same regardless of what she decides.
5
Congratulations on raising 5 children who have graduated college. But may I point out that the COST of an education at public and private institutions is not that much different. The CHARGE to the student is much less at a public institution because most of the cost is borne by the taxpayer. So you had many of your neighbors helping your children pay the cost of their education.
5
Did your grandchild ask you to pay for MIT? Did she ask you to pay for anything?
My father wouldn't pay a dime toward my college. Fortunately, I was able to get the loans I needed and to live on campus. That was decades ago, but I was glad that I did it. School was more affordable then, but it was still a stretch for me, even with loans.
One of my kids has graduated debt-free from a good state school and the other is on her way. I am proud and happy to help them.
My father wouldn't pay a dime toward my college. Fortunately, I was able to get the loans I needed and to live on campus. That was decades ago, but I was glad that I did it. School was more affordable then, but it was still a stretch for me, even with loans.
One of my kids has graduated debt-free from a good state school and the other is on her way. I am proud and happy to help them.
We could solve a myriad of these problems by requiring every applicant take a basic common-sense IQ test before there loan requests can be processed.
If you are dumber than a rock - you don't qualify.
If you are dumber than a rock - you don't qualify.
16
Would this test require loan applicants know the difference between "there" and "their"?
185
Do you think someone who uses "there" instead "their" should qualify?
15
Is our children learning?
18
As I learned early in life, student loans are not forced upon students. Those loans are contracts voluntarily signed by the students. Live and learn, young people.
20
Then to add insult to injury industry claims foreigners, with H1B visas, are needed because there is a shortage of skilled professionals???????? They like H1B foriegn labor because these workers are indentured to the job position.
Just another debt securitization scheme to turn the lower and middlE class into debt slaves to Wall Street machinations.
Education improves society and the gov't should pick up the tab.
This country has been ruined by the avarice and greed of moneylenders.