Nelson Rockefeller may have died with his pants down but he believed in higher education. The New York State Regents Scholarship allowed me to get a free ride at any state school.
Buffalo is as far away as you can get from New Rochelle.
Out in '70 with no debt
31
If the government could bail out banks for their misdeeds/criminal actions (much of the money going to exutive bonuses), then that same government can spend the same amount of money to eliminate student debt. This a very siimple solution.
64
I always have a problem with sob stories such as this. If someone is bright enough for college to be a good choice, one should also be bright enough to realize what it is going to cost one. The author lived in Texas - a state with outstanding public colleges. But he chose Howard? What about Rice? I bet he would have gotten far more grants than loans there.
And then there are the career choices. Choosing to be a writer and still pay off $800 a month in student loans for lord knows how long, is yet another bad choice. Why not have taken a job with a good salary and made a big head start on those loans, and used weekend spare time to start writing, writing when the loan was smaller? Author PD James started her writing while working in a civil service job in the UK, and supporting her two daughters and disabled (from WWII husband who had been a doctor!! It took a couple of books before she could consider quitting her day job.
My father was the youngest of 10 children, and was born in 1901. College was the exception in his small southern MO town - far from the rule. It took him 7 years to finish college at the Univ of MO. He would go to school for a year, and then teach for a year (possible in those days).
I am aware that working ones way through college today is far more difficult due to college costs, but it is still possible if the motivation is there. And if that motivation isn't, then perhaps college would be a waste of money anyway.
88
I too signed off on debts that I did not understand at age 18. Let's face it, my frontal lobe was still not fully formed, but I was permitted to take out 84,000 in student loans anyway. I will be paying those debts for the rest of my life. We have been scammed and no one in Washington is looking out for us. The federal government created the loan forgiveness program in 2007, which made me eligible for loan forgiveness for public servants and educators who have served 20 years. They rejected my application last year because my loan is not a "direct" loan. That rejection has trapped me into student loan payments for the rest of my life even though I am completely eligible. My lender, Sally Mae went bankrupt in 2008 and was taken over by a predatory corporation called Navient. Navient's predatory practices through which they deceive customers so that they can't pay off their loans have been documented more than once in the New York Times. We have been preyed upon as young people and completely bamboozled by corporations hijacking the lives of the young in this country.
93
The personal stories of those venerable commenters who hie back to the salad days of their youth in the '50s, '60s, and '70s, noting that THEY were able to graduate with little or no debt and pay it off in three weeks because THEY worked hard and sacrificed, are truly inspiring.
After all, what could be more challenging than graduating into the largest and richest middle class in the history of the world? One which was still growing?
Sure, by any objective indicator, the American middle class has been on life support for a generation, college costs have skyrocketed, wages have stagnated, but its kids' own failings that make them losers.
Kids today.
142
Hang in there. At least you didn't go to law school. Like you, I felt like a sucker with all those loans and no corresponding job, but I muddled through and now it's all in the rear view mirror. I focus on the fact that I did get a good education (even if it didn't pay off financially) and I see people riding around in expensive vehicles and tell myself all I missed out on was driving a really nice car for 10 years. An education lasts forever and you never know how being a Howard grad might help you in the future. My only regret now that my loans are paid off is that I let myself worry so much. Focus on the positive and keep doing what you're already doing -- trying to keep others from going to schools beyond their means.
62
It is starting to be said over and over, maybe people will start listening. We always need electricians, auto mechanics, hvac techs, plumbers, carpenters, chefs, cable tv and phone techs, linemen, well the list goes on and on.
All these jobs can pay well and there is plenty of advancement. But then again those jobs all sound like work.
Most of them have free on the job training, heck I think alot of them even pay you while you learn.
52
Most of these comments are about how these lazy, spoilt millennials should just shut up and get a job.
That's nice and all, but I'm wondering what kind of part-time, entry-level job a 19-year-old can get that leaves them with a spare 30-60K per year after living expenses.
And how would they have the time for all the unpaid internships that their future employment is based on?
74
I feel for the author, but isn't he almost done paying off the private loans, if he had 12 years to pay them off, and repayment started in 2007?
14
This could all be solved, if the parents of these students just gave them a small loan. Say one million dollars. Right, Donald ???
Thanks, GOP. November.
75
Filthy luchre has sullied US academia beyond repair. Anyone can consult the comparative rate hikes of food, shelter, transport and other fixed expenses with those of university fee increases in the past three decades. Unfortunately students who have the misfortune to be limited to the US university system have to contend with an entrenched generation of blindly greedy administrators and tenured faculty staff who reign over impoverished co-adjudants and indentured students such as Arceneaux. Things will never revert to a healthy level until policy makers render academia less attractive from the financial point of view for faculty grandees. If they want to make a 'killing', they should opt for a career on Wall Street or as a neurosurgeon. Get the jackals out of academia for the sake of America's youth !
24
It is hard to feel sorry for people who were smart enough to go to college but stupid enough to assume that all the debt they were creating was somehow going to magically get paid back. Work hard, sacrifice and pay back what you have borrowed. Don't expect the taxpayers of this country to bail you out.
Students and parents should stop thinking that college is the only way to go. There are trades and construction jobs that will provide our young people a good living. The only down side is that they actually have to work hard.
41
It's disgraceful that a private bank should be able to sell you an education by smiling that it's the only way to succeed in life, then burden you with payments that crush your will and sap your energy just at the time of life when you most need your will and energy to succeed, and then send private collectors out to sue you and ruin the precious credit you sought to establish by getting the education the banks sold you in the first place. Disgraceful and disgusting. Someone ought to bring the student loan industry to heel, and make it sit up and bark and beg and do tricks besides.
40
It's a horrible trend, very bad for the country's future. Of course the GOP loves having an uneducated citizenry, so we won't see change coming from them.
36
Let's not blame this on President Trump. You took out your loans when Obama was President. This system has been disgusting for years.
37
I wish the author mentioned his major and what kind of work he found after graduation. As for his memoir, the title sounds atrocious, his exepensive education didn’t pay off.
25
Ok People: Part one: The federal government makes a pot full of money guaranteeing college loans.
Part two; Have you ever seen a college campus the was not constructing new buildings every year since you graduated?
Part three: When the football coach makes more money than the whole faculty combined, there is a problem.
Part four: This problem started way back before President Trump took office.
Go Back to the Clinton White House: Did they fix it? No................
Go Back to the Obama White House : Did they fix it? No..................
Soon we will enter a privatized education system and it will benefit all American kids that want an education.
18
I’m not sure why the author felt compelled to mention Trump. I thought Lizzie Warren had already promised to fix student loans.
21
I think you made the correct choice to attend Howard University, and that you will pay your loan off in well under 12 years!
5
What jumps right out at me are the innumerable comments that criticize the writer for choosing a prestigious private university when he obviously wasn't rich, and a handful that express sympathy but with a trace of condescension.
I haven't seen one yet that acknowledges that this writer is GOOD.
Sir, I am so glad you graduated from Toni Morrison's alma mater. Keep the great work coming. From Howard, you have something real to live up to, for life.
54
Students pay 9% interest while the richest Americans in the world (through their share-owned banks) pay 0.01% through the DISCOUNT WINDOW at the federal reserve.
If you don't know what the discount window is then you're either a republican voter or you aren't paying attention and don't deserve sympathy.
48
So, the excuse is that you once believed in the Money Fairy? And if it's true that the only way minorities can get good high-paying jobs is to go to college (but check out what a plumber makes)...well, that question kind of answers itself, doesn't it?
Not impressed here. At all.
26
I think many readers are harsh in their expectations of young people whose judgement we do not trust enough to let them buy beer. Historically, it has been good advice to go to the most elite college that you can get into. Can anyone say that this is not still the case? College costs have gone up far more than salaries. At what point does this shift the cost-benefit equation?Many state schools have gone up much more proportionally than privates, and not just because of pensions. Voters have not supported education as a priority. Unless your children are struggling under crushing debt, it does not seem as large a problem as other needs competing for funds. I went to Princeton. In my day it cost $5000 a year for all expenses. Today there are a lot of scholarships but it is far from the case that only the rich pay. From what I can see, our graduates are still doing just fine, thank you. Hang in there Michael. It will get better.
25
Sorry, your story had my interest until the “our future president, Oprah Winfrey “ line, then I knew it was time to click away. Just the facts ma’am.
34
The GOP strikes again. College costs should be covered by the government (taxes) or with low interest loans -- not the ridiculous student loans that are created to have high interest rates and make the fat bankers comfortable.
14
When the Senate Majority leader can sneak into the budget bill an exception for Berea College in KY so that it can continue to offer free tuition without paying a tax on its endowment, you know there's nothing fair about college tuition. When the powers that be can make sure filing bankruptcy will not cover student loans, you know who is calling the shots. When typical credit cards charge mafia-style interest rates, you know who is in control. We live in an age of predatory capitalism. The president is one; likewise his family; Wilbur Ross, Stephen Mnuchin, Gary Cohn - all predators. But leave it to the self-righteous commenters who want to take a young adult to the wood shed for not thinking this through. Guess they have the same wisdom for the suckers who under Ivanka's plan will take maternal leave using Social Security and have to pay it back when they are in their late 60's. Same for the $14/hr crowd who don't save for retirement. Sorry! Something is wrong when a bank can pony up to the Fed Reserve window, get oodles of money for next to nothing, lend it to students like this writer for a nice return and have the loan guaranteed by us the taxpayers if the student ends up in debtor's prison or opts out of living.
34
Can student lending be predatory? Yes, if the students and their parents aren't bright enough to do the work of figuring out the cost. (It's simple addition.) Students lending should come with a required financial counseling session and form signing, because American society, with the abetting of foolish politicians, apparently dumbed down "college" to that point.
11
DJ Trump promised he'd do something about providing relief when he ran for president. Maybe he'll get to that after Mexico send $25 billion to pay for the wall, l's he'd
2
Call future-president Oprah and see if she'll help out.
22
I can't possibly know, of course, but I imagine your mother wanted you to realize your dream of attending a prestigious college. But it's too bad she or another adult in your world didn't counsel you on what you were getting into. I admire your courage and honesty in accepting the responsibility for your situation. May your book be a block-buster!
5
And we say Trump University was a scam. Pretty penny-ante compared to the pros.
10
Some of these comments are unduly harsh. It makes me sad that commenters are so cruel.
29
Emigration to Canada is the answer. Medical care and higher education supported. The US is a parasitic culture with the rich sticking to the rest of us. It's a no brainer. Emigrate.
16
I disregarded my parents' advice to attend an excellent state university and ended up with a small house mortgage worth of student loan debt. After graduation I lived like a thrifty student (roommates, no dinners out, ancient car) for years until it was paid off. I always found it interesting that at the time the Private University and the banks were legally able to have me begin to sign my life away at 17. No co-signer needed.
15
‘Now that Donald Trump is President....’ still gives me a shock to read it.
6
You got into college but didn’t understand how loans work?
Even then, weren’t you curious enough about your responsibilities to ask, or heaven forbid, get educated about it by taking at least one economics class????
20
1. I can't help noticing you did not mention your major. I'm going to assume something silly like (insert sociological category) studies.
2. Why did you go to a private school out of town, as you have asked yourself WAY too late? You could have accomplished your goal of a college degree in something silly locally.
3. I hope this article does what it intends to do - draw people to look at your one-line bio at the end, so that you can pitch your book.
16
I read this and it made me mad. Mad at the student and her mother. I think there is a certain amount of magical thinking that goes into signing and co-signing for a student loan. It's like Monopoly money to some. Thing is, there are no guarantees in this life.
Why is it necessary to go to college right out of hight school?
Why not work for ten or fifteen years (waiting, retail, anything) and sock some money away. Then go to a community college and transfer when you can afford it.
This reminds me of the idiots who borrowed money right before the recession to by houses they KNEW they couldn't afford and then they blamed the mortgage company or bank when they faced foreclosure.
If you cannot afford to pay for it, don't buy it. Simple common sense.
Kudos to the commenters who worked their way through.
The title of this writer's book speaks volumes about how much of reality she is facing. Get a job.
20
Repeat after me: community college.
21
So you graduated in 2007. @$800/mo. That is about $96,000. When will you be done?
8
I sympathize and I agree our system can be done much better, but its your fault. Its your fault you never went to a student loan payment calculator and added up the cost of your loans, or asked anyone who had already graduated what is was like. Its your fault you are working in the gig economy instead of facing the reality your loans are pushing on you and working in a more lucrative career. Our system may be unfriendly and possibly even predatory, but it isnt mandatory. There are options. Scholarships, grants, work study, living on a tighter budget, God forbid going to a cheaper instate school or community college to complete your prereqs. We do a disservice to these kids by tying up so much of their self worth into which school they get into when it really doesn't make that much of a difference, but aside from that, its your fault. Yours to deal with. Lets fix the system to prevent people from even having the option of dropping 100k on degrees where they wont make more than 35 k a year, but its still your fault. You ask all the right questions. How could you not have understood what you were getting into? Its literally available at your finger tips. Any time you wanted to know. You could have googled "Is going to an Ivy league school worth it?" and found answers there. But you didn't. And now you have an 800 dollar payment for the next decade. Not the end of the world. Lets not make it out to be.
16
I have been dunned for more than 30 years for debts that I was guaranteed "would expire because of the onset of ailment or disability."
I have that wordage in writing, but it hasn't done anything for my credit rating for 30 years.
So I love my alma mater, USC, which I understand has become incredibly selective (God bless my alma mater!!!!) and may they ever become more selective, because I graduated... with a degree that... I want to brag about but won't, because I'm still in "debt" because I incurred horrendous "bills" (and not like anyone who attends any premiere college these days!!!!) -- because everyone who has ever gone to school has incurred the sort.... and has signed papers of precisely the sort I signed, except that mine explicitly rejected any need for re-payment when I became disabled....
But then I took a job that that didn't just impair my immune system but caused a flu that blew out my stomach valve, so that I wasn't able to bend over without throwing up, because... well, gravity does that for you.
I couldn't laugh without.... running to the bathroom, then pitching it over the porcelain sink.
My doctors did all they could. Drugs. They tried every drug possible... but none worked. Surgery did.
Because that's the gamble you take when you work... and you work according to a government-sponsored loan.
2
I'm pretty sure this is just what Modern Day Slavery looks like in a First World predators paradise. Bachelor's degrees should be free and the rest heavily subsidized.
18
If you are not smart enough to understand that loans have to be paid back you are not intelligent enough to be admitted to a top college--that said the price of a college education is ridiculous..$70,000 plus extras a year is ridiculous.
12
We wanted to pretend that everyone had the capacity and need to attend a university, and the only way to finance that fantasy was to pretend that adolescents had the intelligence and brain maturity to make rational decisions when huge amounts of money were dangled in front of their eyes. Politicians benefited from everyone being flattered, and university administrators benefited by having undreamed of piles of cash to spend on useless lavishness. What a betrayal of innocence and what a national disgrace.
18
When u take drivers ed you should learn how to fix a flat tire. That seems pretty basic to me. And when you take out a student you should learn about compound interest.
Being saddled with debt is a hole that is very difficult to climb out of and everyone including our politicians need to understand before that bankrupt themselves and the country.
4
I took out student loans too but knew that before I went out on my own, I needed to first pay them off. I lived with my parents until I was 29 and was debt-free. I also saved money, purchased everything for my apartment in advance, and bought a great wardrobe for my job so I was dressing for the job I wanted, not the one I had. I learned from the people around me and planned my life to be debt-free. With hard work and much sacrifice, I went on to get two masters, thanks to my companies tuition-reimbursement program and a scholarship. It's never been easy paying off student loans but the long-term rewards will pay-off one way or another. Good Luck!
12
I have no sympathy at all for all those who decided that they just had to go to a school that they could not afford. If they were smart enough to get into a high priced school, they should have been smart enough to understand that they had to pay the loans back. That they are now saddled with a huge debt is their own fault.
10
People who say, "back in my day, I worked 5 jobs, was a full-time student, and graduated with zero debt" just need to stop. Back then college was a fraction of the cost it is today. Congratulations to you, but some college kid waiting tables today can't pay for a $100k education with tip money and a little moxie.
Federal Loans are lent at predatory interest rates, and are virtually impossible to shed, short of dying. How many of these articles have to be written to understand that 17-18 yr olds are not yet equipped to understand the consequences of signing onto a huge loan? Not to mention the fact that many people's parents really even care to explain this to their soon-to-be-doomed kids?
Student loans perpetuate a growing debtor class that prevents people from having financial freedom. How is it that a country this "rich" has so much college debt compared to other nations which make higher education publicly funded like K-12? The business class brags about using bankruptcy protection as a tactic. Trump even boasts that he "brilliantly" used bankruptcy laws for his success. There's no reason young, highly educated people don't deserve the same humane treatment.
29
I keep reading these stories and I feel sorry for the students. While they are the ones who chose to borrow, they probably didn’t fully understand the extent of the costs and resulting debt. They are only 17 or 18 years old.
Instead of blaming banks, schools or students, a more constructive path would be to create independent education financial counseling that would be required before taking out a loan. The advisor would have fiduciary responsibility to the student and would layout the whole 4 year plan. Alternatives would be proposed such as 2-3 years at a community college or state school, then transfer to the more prestigious school. Costs could be halved. Not as glamorous but years of debt isn’t desirable either.
Also, the gratuitous slap at Trump is unnecessary and makes you look foolish. You graduated a decade before he was elected.
10
I was in the same boat as the author. My monthly student loan payments were upwards of $1200/mo when I got out of college. And same as the author, when I was 18, I was only bombarded with messages about how worthless I would be (professionally and personally) if I didn't go to a university -- and make sure it's a fancy one. No adults intervened to offer any other perspective.
If I had to do it over again, I would probably have chosen a community college program. But hindsight is 20/20. At the time, I was essentially shamed for considering anything other than reaching for the tip top schools.
I am aware that the degree on my resume impresses hiring manages. But all the cultural machinery of pushing dumb (even if book-smart) young kids into this machinery smacks of a cruel scam.
12
Even federal student loans are a bad deal. It is pretty pathetic that most people can get a home mortgage from a commercial bank (average now at 4.4%) at a lower interest rate than a grad student can get from a Federal Direct Student Loan (6%). Don't blame the students, blame the system and everyone (Wall Street, the government, universities) that are profiting from this tragedy. It doesn't need to be this way.
10
Here's the thing guy. You don't matter!! You aren't rich, you aren't a fancy Republican donor or even voter, you have no influence, and as you emphasize you aren't even a corporation or a "job creator" who would warrant all kinds of special consideration. So take comfort in the knowledge that the people who do matter are doing just great! They pay minimal taxes, no one is regulating them with inconvenient bankruptcy rules (they can go bankrupt multiple times and still be president!) or environmental rules or banking rules or anything else, and "their people" are running every government agency to make sure it all continues smooth as silk for them. We have a government and a governing ideology of the elite, by the elite, for the elite. We exalt our winners and recognize the corollary that for our system to work at its best, the vast majority of us must be undeserving losers. So yes, we have to maintain the pipeline of students like you to line the pockets of bank executives. Thanks! You have done your part to support our system and its underlying ideology. You are among us. Our comfort is the spectacular comfort of our betters.
12
I finished my bachelor's degree in 1968 with tuition at a pittance. No debt. Graduate school for a master's degree was covered by a scholarship. No debt.
My biggest worry was not school debt. It was being drafted and sent to the Lyndon Johnson war in Vietnam.
Today's students are being harassed by student loans and fear being thrown out of school rather than being drafted by a war mongering president.
America's form of aggressive capitalism provides a myriad of ways to indebt people of all ages with little concern for how this might destroy their lives. Legislation that protects college students from their own bad decisions is non existent.
My generation was fortunate to go to college before greed completely took over the country. Today's America has had its soul stolen by bankers on Wall Street.
I'm sorry I have no hopeful words for future young people. It's not a coincidence that I became an expatriate!
19
This may be an obvious question but is your Citibank interest rate reasonable or outrageous? If outrageous, have your tried to refinance the loan? SoFi gets decent reviews, for instance. Keep doing the best that you can, yes, but if you feel trapped it can't hurt to see if you have better options.
2
"I’m not dismissing my responsibility for this."...
---and then this---
"But the truth is, a lot of this was always out of my control. The student loan industry is a barely regulated, predatory system, and with Donald Trump in the White House and those equally useless people in Congress, oversight of the industry is becoming nonexistent."
Sorry - but these two statements are in direct contradiction with each other.
Your debts are someone else's fault?
The banks? The Government? The College recruiter?
You don't but a luxury car if all you can afford is a subcompact.
People who are smart enough to get into prestigious colleges can't really say they didn't have the smarts to understand that they were going to have to pay back the loans.
In NY State we have many excellent State and City colleges.
which offers tuition for $7,000/yr. for a NY resident.
($17,400 per year for out of state students)
I was accepted at MIT and Columbia.
Very excited, I showed the results to my family.
Their response was -
"That's wonderful, but you can't afford that, and neither can we.
I attended a local school and got a very good education and a good job.
I worked a full time job and waited tables at night to pay off my relatively modest loans.
If you think others may fall into the same "trap", is there something you can do to help those who come behind you?
I think you are in a prime position to relate to college bound students in high schools about financial planning.
15
Much of the problem resides with the desire to get into Ivy League colleges and other prestigious schools. I know a guy who attended Yale and Harvard Medical School, but makes no bones about the fact that the most valuable "degrees" he has ever received are the ones he gets from Medicare and Medicaid attesting to his ability to bill them. Had he attended Podunk Medical School instead, the money he gets would still be the same.
5
"... no one mentioned how soul crushing my debt would be". -- The staggering costs of higher education aside, the author lacked a foresight in contracting long-term indebtedness. As an adage goes, "check, before you bind yourself". Any debt is enslavement.
6
The Republican Party in collusion with the big banks passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This abomination was a gift to the big banks that ended the ability of students in most cases to discharge student loans in bankruptcy. It was a total victory of the rich and powerful over the poor, the working class and the middle class. Its reforms did nothing to stop corporate bankruptcies. It was another example of how large financial institutions have continued to squeeze and punish the average person financially and how these institutions have Republicans (and some democrats) in Congress in their pockets. The Reform Act can only be described as disgusting, a disgrace to the nation.
6
It's immoral to charge students in a public college for tuition. The people in charge are getting kick backs. It must change and it can't come soon enough.
2
I've pretty well accepted that burden is never going away, i owe too much and make too little. Maybe i'll actually land a good job someday, but as is, they aren't getting that money back. Which I suppose is fine, since "they" no longer exist, shut down for fraudulent and predatory recruitment practices. Yet somehow I still owe them the money...my degree (ba business managment) has done nothing but land me a part time job at target, but with any luck, a company that no longer exists will get their money in the next 20 years or so....
3
Perhaps the '17 and 18 year olds' of TODAY don't understand debt, loans, interest rates etc. but the 17 and 18 year olds of YESTERDAY sure did. As did their parents. It wasn't that long ago that people understood sacrifice and did just about anything to avoid debt for anything except housing (and that with a big down payment), not to mention having kids when married with 2 parents for love and support (95% of kids born in wedlock, vs 50% today, if that) and the family went to church together on Sunday and ate dinner together each night to talk and engage, share dreams and reality, problems and wisdom. No more. No wonder things are such a mess and kids are so immature, and age 30 is the new (what used to be maturity at age) 20.
4
The majority of student loan debt is owed by people who never bothered to graduate. 'Nuff said.
5
We should be thinking about a way as a society that we can cancel or greatly reduce these debts.
7
I'm with you. It's a broke, predatory system. A disservice to those who strive for something better and untenable for a nation trying to create citizens ready to compete in global economy. But on the brighter side, I love love love the title of your forthcoming book. Gonna buy it and help fill the coffers!
4
There are several culprits here, and they rank ahead of the hapless borrower. The first is university/faculty union greed. Before the top of their heads come off, just compare the CPI to college tuition - even at State schools - since 1980. Then compare average salaries of tenured professors and college administrators to - pick a typical white collar job - accountant, paralegal, systems analyst, electrical engineer. There's the first outrage. Next is the proliferation of nonsense, feel-good courses, primarily in the Sociology and English departments, that 20% of graduates in these majors find relevant work in, at a top end of maybe $45K. Try urban living on that wage, paying tuition debt, rent and carfare. Finally there are athletic scholarships, which rob the academics with their obscene expenditures, ridiculous pay packages and under the table lures to ignorant recruits. By the way. Every high school and college has "guidance" counselors. These are teachers, paid their union wage, who are supposed to advise these kids - particularly those not from gated households. But instead what do they do? They hire themselves out, privately, as experts to...those very same gated households. Nothing happens by chance folks; these waters are muddied for these poor kids by design. And the slogans play on.
8
"I didn’t know anything about student loans"
18 year olds don't understand how a loan works? I guarantee you the writer never worked one day while in college, either.
11
Isn’t this really just loan sharking with gowns and mortar boards? The author seems to have made some pretty dumb decisions, but the lenders here were not acting in good faith, and neither was the university. Something like this could happen in any family.
4
Ever heard of "caveat emptor = buyer beware"? That is the 1st step of being a co-equal adult. Yes, some have it easier than others, but mistakes are mistakes--and they are not to be whined about such as here. This article does make for interesting "literature", so it belongs in the NYT. Finally, a word of advice to all, including myself: you chose it, accept your choices (and their implications), learn from it and change, or don't. And don't waste your time throwing stones at my good luck. I have made plenty of LARGE economic mistakes that I have also had to/did pay very painfully for and over long periods of time, just like you, but sans the public "poor me." More humility, please. HRS
4
At the heart of the student loan battle is politics. There are simple questions with difficult answers: What is the purpose of education in a democratic society? Who pays for that education? What benefits from that education? Who receives what education? None of these questions lends itself to an easy answer, but there is a truth hidden in there: The questions are never even asked properly if we continue to masquerade around these 50 states and pretend the current method of financing higher education is sustainable, just, or even financially reasonable--it's none of the above.
Note on the Undue Hardship exception. It is rarely granted, but is granted b/n 30-40% of the time. It was inserted in the BR Code b/c of rumors of lending abuse and tightened down with little justification. It needs to go. Ask your Cong. Rep: How do you feel about the 523(a)(8) undue hardship exception? If the answer is not a full and immediate repeal, then it's the wrong answer.
Education is a lot of things in US society, a simple cost-benefit analysis or path towards a bigger paycheck...it is not. Those are only a couple of a myriad of considerations made by students when deciding whether to pursue an education. Not to mention that society as a whole benefits IMMEASURABLY by way of having a more educated population. I get it, it's harder for out dated institutions to maintain power by force over smarter populations, but that's not a justification to saddle the population down with debt.
4
College loans were the only escape out of cyclic family poverty. I wasn't even aware of anyone with a college education when I was growing up (teachers didn't talk about it in my rural town). I've taken my entire family and introduced them to the fact there is a much bigger world out there than they had any idea about. I've taken my kids with me. And I only did it because of a college loan.
I get it why there are people working hard to make sure college loans scare anyone going for them. They don't talk about the investment in life, in understanding the systems designed around you--for you--against you, they talk about debt.
Debt when you are poor is supposed to be a very scary thing. Why? When you are at the bottom of a trench without family, without one of those high selling society values like good looks, you have no where to go but up. The problem is being poor you are shut out of acquiring capital. In fact you might not even know how money, banking, and the acquisition of capital works--it isn't like you are born into it.
Student loans are access to this network. They get you the information you need and they allow you future choices that at least one, if not two, political parties would prefer you didn't have--after all you are competition and in America's free market system someone wants you to be stupid so they can "pick" your pockets and make their own wealth.
Take out the student loan. Then take economics. Learn how to access equality.
7
Student loans are predatory. They are the modern version of indentured servitude. You can have this dream, but you have to make those of us who already have the dream a whole lot richer first. It is the elders cannibalizing the youth. It is a crying shame.
6
You didn't kill yourself because of the 2005 bill excluding student loans from discharge because of bankruptcy, but my best friend did.
13
"The student loan industry is a barely regulated, predatory system..."
True. Yet millenials can only blame themselves for not voting or voting for pie-in-the-sky identitarian ideals instead of hard-nosed economic facts. Michael and friends: see which politician is ready to squeeze the predatory system and help you with the loans. Then let everyone know you will canvass and vote for them.
2
And women plan on careers, get Masters degrees, take out loans, not anticipating that in a few years they will want to stay home and raise their children.
3
"The student loan industry is a barely regulated, predatory system, and with Donald Trump in the White House and those equally useless people in Congress, oversight of the industry is becoming nonexistent."
You graduated in 2007. Bush was President.
The 2005 bankruptcy bill you reference. Bush was President.
And yet, you can't resist a snarky comment about President Trump. Did you blame President Obama about your college indebtedness during his 8 years in the White House? Why and how is Trump responsible for YOUR decisions?
11
There should be a law that caps student loans at $10K / year for a four-year degree.
2
Another reason why fellow liberals who are not completely behind vocal supporters of cheaper education, like Elizabeth Warren, baffle me.
The Clintons were too close to the banks. Get over them.
5
Grow up. The system is not and was never rigged against you. If you didn't know math before college, you shouldn't have applied. It gets tiresome hearing whining complaints from lifetime adolescents who think for some inexplicable reason that they are not responsible for their own actions.
15
Let's see - you can't afford to pay $800 per month for student loans, which is about $9,600 per year. What did you study? What sort of job do you have? Are you a freelance journalist? I'm sure there are some jobs out there that will enable you to make that loan payment.
Having said that, the alternative is to have a nationwide college entrance exam, and then make college free for all who can pass it. The difficulty of the exam is set so that the number who pass is equal to the number of college spots available. But then, we would all be paying more in taxes to cover the nationalized tuition.
4
Bad choices have bad consequences. Why should all the people who went to in state public colleges and maybe even started in a community college as a way save more money have to share in the results of your poor choices, While I sure that some recruiters have questionable ethics and at 17 it was easy to believe their lies ultimately blaming them is like complaining TV ads for donuts are the reason one is fat.
11
No one should expect a 17-year-old to understand the consequences of taking on that much debt. That is what parents are for. Millennials need to quit blaming society and instead blame the people responsible — your parents. They let you live beyond your means, and they should be ashamed of their failure as parents.
6
Twenty years of schoolin'
And they put you on the day shift
Look out kid
They keep it all hid
--A Prescient Bob Dylan
5
I was lucky enough to go to Queens College, CUNY, in the 80s. Got a fantastic education, and paid probably a total of about $2,000. I was able to immediately start living a productive and economically healthy life (never made a lot of money, but have always been able to pay my bills).
Nowadays we are a nation of cheapskates, with little to no ability to think in the long term. Government is evil! Just pull yourselves up by your bootstraps! Hands off "my" money! There's no such thing as society!
I will never ever vote for anyone who offers to reduce taxes. Please, raise my taxes, and put the money toward health and education. Everything else will follow from that.
12
Can we just cut to the chase — it is immoral to exploit young people who need an education for profit. The Republicans created this system under the Reagan Administration and it's part and parcel of the trickle down lies. The Democrats of the era bought into the lies for their own political purposes. The same people who said tax cuts will pay for themselves told us that career advancement would make student debt disappear. No and No, those things don't happen — it's welfare for the rich and the banks through ruthless exploitation of everybody else. Our system now is a form of vampirism where the youth of the working and middle class have their career earningd sucked out of them to the point that they are weakened and broken and can not grow strong and support the society the way they should. Their allegiances will be appropriately placed. It's as if America's wealthy want to bring back Communism. The leadership in the two party system has for 30 40 years now never met a scheme to exploit the everyday working people that it didn't like. We can only hope that ultimately their enormous success at running these scams will prove their downfall. I just hope we don't have to bring back pitchforks and torches to get there.
8
There is an education elite that decided it is entitled to large salaries for little work while toiling in palaces built on the backs of taxpayers and students. Congress honored the wish of their partners in crime and decided to pump more money into the system so that the cost for the same product inflated beyond reason. When state legislatures attempt to slow the flow of cash to campuses, the education elite hold the baby hostage and threaten to kill it by predicting horrible futures for students forced to attend the to-be-financially-crippled institution of higher learning. "Oh, the horror if our International Studies program doesn't have the same facilities as State Next Door University. If you want to make millions, offer a product that people buy over and over. College doesn't end in 4 or 6 years. Interest on student debt means you keep buying your high-priced education, over and over and over.
4
You can declare bankruptcy to wipe out credit card debt and even jettison a miscalculated home purchase (albeit with severe penalties). Yet with the stroke of a pen, a young adult with no credit check or collateral can borrow hundreds of thousands of dollars that can never be discharged. It's the equivalent of filling out an online form with no review and instant approval to buy a $200,000 home that you can never sell.
That sort of predatory lending recently resulted in a financial crisis yet within the education "industry" (itself an unfortunately accurate misnomer) these same practices are proliferating. While we set ourselves up for another catastrophe we're discouraging our citizens from pursuing their educational potential and punishing those who do.
Advising others to simply work more or suffer with less is an insufficient response to failing policies that threaten the nation’s level of education. Knowledge is not a trophy, it’s every citizen’s right.
8
We need to better fund our public education systems, instead of gutting state funding which increases tuition and then eliminating subsidized student loans which increases student debt. The situation today is nothing like it was for past generations. High performing students from middle and low income households need more options for state-funded college Honors Programs to avoid being demoralized attending schools where their classmates are not high performing. As a professor at a state university, I see this every day. These bright students in a digital age know exactly what has happened to them and deserve a richer academic environment. I agree that it does not have to be an expensive elitist environment, but it does need to be more dedicated to giving them an equivalent academic experience and faith that their talents are recognized in society by graduating from State U. How many presidents, supreme court justices, and journalists working for the NYT went to State U?
4
Because there are no good schools in Houston? I'm so over these stories. Unless you can guarantee yourself an instant 6 figure income after graduation, or you have a trust fund, stay home, work summers and do work-study.
Two things have fueled this nonsense. The idea that college is an entitled "experience" and parents who are not helping their kids out.
I will never understand going into debt to live in an apartment while you are essentially unemployed. I await an article entitled: I Graduated Without Debt. If you need an author I know of two.
11
As a teacher at Stuyvesant HS, I see students getting into brand-name schools all the time, but a BA for a quarter of a millions dollars? WHAT are they and their families thinking? I counseled a student who did not yet have his American citizenship to turn down Cornell--and thank goodness, he did. He took a year off, and is not getting an excellent engineering degree at a Korean University FOR FREE. The school is specifically set up for students like him. Besides bankrupting families, our own higher education is missing out on potential students. SEVEN PERCENT?!? You can't get that rate in anything these days.
Shame on this industry--but for heaven's sake, your BA's pedigree IS NOT WORTH THAT.
14
There are 2 separate issues: 1) If you borrow money (whether for education, to start a company, buy a new TV) you should honor that obligation and pay back your loan, and 2) how do we ensure everyone has the info they need to make informed borrowing decisions -- whether for school, a car, a house, starting a business, etc. -- and avoid predators?
The predators need to be jailed. The rest need some coaching. But at the end of the day, the person taking out the loan needs to think about the costs, the risks, the benefits and own their decision. No one is forcing them.
2
After 5 years of paying off student loans with a 10 year re-payment window we have just now reached the point where the current balance matches our initial borrowed amount. Ridiculous. Federal loans should have an interest rate at the lowest levels that any monies are borrowed through the government AND should not start to accrue interest until the time of graduation, if continuously enrolled. Alas-
1
I have deep into six figures of student loan debt. But my loans are all federal, which means I was able to consolidate them into one single loan with good repayment options (20 year, income based repayment). My monthly payment is large but still leaves a chunk of my paycheck for other expenses.
why did you ever borrow from Citibank? I'm sure you were told repeatedly that your best option was with federal loans. Private loans are predatory and cannot be consolidated -- and, yes, they will hound you for your payment. With federal loans, if you lose your job, you can call up your servicer and get a forebearance.
Again, the problem is not necessarily the debt (we all have student loan debt) but the fact that you sought private loans with your parents as co-signers. I mean, did you not read Howard's info. on financial aid? I'm sure it outlines your federal borrowing options.
5
Can universities be asked to publish their audited financial statements every year so that perspective “customers” can see how their loan dollars are spent?
3
Feeling your pain and yeah, all they can do is get your money when you get it (and trash your scores). Make sure you have a roommate and the lease is in their name. Buy all your cars used and make friends with a mechanic.
I do advise that if you default, get an attorney. Its cheaper in the long run to pay him to defend you in court than it is to let them win a judgement against you and garnish your checks. This has happened to several friends of mine; most didn't even know there was a court filing. Research the statute of limitations in your state and play the game like they do. Best case, you can get out of it because they'll write off the loses. Worst case their taking it out of your paycheck, which they may wind out up doing anyway.
If its any comfort, I have well over 50K in debt to go to state schools, not Harvard. All to become a highly qualified and extremely underpaid teacher. Love my field, my kids, my content area - hate the pay and the politicians who trash us for working with less every year while expecting more with no raises in sight.
Best of luck.
4
You should ever take out a student loan unless you're 99 percent sure that there will be a great demand for your newly acquired knowledge when you get out. And YOU do the research. Don't rely on what some graduate advisor or some such says about how the job market in your area is supposed to improve. He or she is biased toward keeping enrollment up. That brings more money to the school, not to you. Also, remember that many millionaires dropped out of school early and learned what they needed to know while working. Consider the late Warren Miller. He realized his dream of freedom through skiing and surfing, though he started poor and not particularly well educated. Avoid debt. Interest accrues while you're sleeping. High interest credit cards are making slaves out of people as I write this.
5
Everything the writer says about the predatory loan system is true, and it's not just the banks that are the problem since the colleges have also raised tuition way beyond the ability of students to pay for the worthless pieces of paper that they're selling.
HOWEVER.
The writer needs to grow up and get a job that pays. Whoever this person is needs to learn that adulthood involves move to where jobs are plentiful, where two to three jobs with an hourly wage is possible at a way that is high in comparison with the cost of living.
This is an ordinary trade off that everybody - including people with expensive and advanced degrees - makes.
The jobs that pay these days are undesirable, unpleasant, or difficult, so get used to it: drive truck, unblock toilets, handle electricity, clean filthy houses, haul loads as a labourer.
You're going to have to stop whining, and start working, in other words, AT JOBS THAT PAY.
It was a HUGE mistake for you to think that you didn't need to work while you were at school.
What were you thinking when you signed a loan for $10,000 that you had no hope of repaying, when it would have been dead easy for you to waiter or work a bar for $800 per month?
Why aren't you cleaning houses for cash and working bars right now, in addition to a steady salaried job, or one that apprentices you a higher wage in a couple of years?
11
What kind of 'advanced' nation would saddle its young people with so much debt ($1.4 trillion and counting) that it essentially prohibits them from actively participating in the growth of their country and its economy?
4
The loans are one thing, the interest charged by the banks is something else. It's a giveaway program for the government and nobody loses any money but the student who often ends up paying one and one half to twice the original amount. The universities bear their share of the responsibility as well. The whole program needs to be completely revamped. A number of European countries offer free education; if I were a student today I would look beyond the U.S. Otherwise I guess you start a fund at year one of your life.
3
torment yourself with the realization that the FT tuition at MSU in 1967 was barely more than $100/qtr.
To protect your Mom, get term life insurance for the loan amount. Beware the "nice guy" again telling you to get whole life insurance- same type of game as out of state private college - not worth it, but highly promoted.
The real life lesson here is to not trust salesmen, do your homework and don't expect the government to protect you - great if they do but there are lots of gaps. Also, invest your spare time on financial literacy -consumer reports is a great place to pick up the basics, unfortunately, there are many more traps out there -car leasing, adjustable mortgages, payday loans, credit card interest, whole life insurance, annuities... all without the government protecting you.
5
Many comments on this thread are virtuously offering ways to save money, be frugal, get a college degree as inexpensively as possible. I applaud this advice, but one should not overlook the problems here. Why should student debt be immune to bankruptcy laws? That is an egregious hand out to financial institutions, and monstrously unfair to students. Also, all those who sanctimoniously tell the author that he made his bed and now he must lie in it; consider: he is not buying a house. He is not furnishing said house, nor is he starting a family. He is not saving much money for his retirement. When we cavalierly dismiss the issue of student debt as “stop whining and be smarter” we fail to acknowledge the very important yet lower paid jobs that will not be taken because people can’t afford them (hello teaching jobs, especially with young children); the marriages and home purchases that will be delayed, sometimes for decades; the money that won’t be spent on goods and services and taxes because it is going to debt service; the businesses that are not started for the same reason; and the increase in the use of emergency rooms and immediate care clinics because these young people choose not to buy health insurance (understandable when you already pay $600 a month on student loans). In short, student debt burden is a significant drag on our economy, and current administration policies make it worse. Self-righteous superiority may feel good but boy it costs us a lot in the long run.
11
I went to the U of M starting in 1967. Tuition was $125/ quarter, I suppose about $1000 today. One could work full time summers and partime during the school year and meet tuition, live in a college dump with a pile of roommates and live on ramen but graduate with no debt. Which I did. My kids worked just as hard, lived like that but even with our help, and our acquiring debt, all have their own debt burden. It's a tough deal now.
3
Actually, the author is dismissing his own responsibility for the debt he has incorrect. The vast majority of students who borrow do so responsibly and get a fair return from their investment in themselves. It is disheartening to read the opposite stories from people who are actually outliers.
2
It’s sad that so many of these comments blame someone who was 17 or 18 at the time of making a college decision. Hugely overwhelmed, excited, frantic, and awed are words that describe the typical college freshman and their family. People don’t always know the consequences of their actions yet have the best of intentions. Sympathy, compassion, and an understanding that people just want a better life... would go a long way.
4
Accepting all criticisms for taking out the loans, I still think the system overburdens the student while the “smart” universities are subsidized by the insurance the government gives them by blocking bankruptcy protection. If I was a lender I would push up interest rates as high as possible because there is much less likelihood that they fail and it saves both the lender and the school the time (and therefore the money) it takes to evaluate and support the students in their pursuit of the best career and knowledge needed to assess their ability and likelihood to payoff the loans.
It would be as if banks were subsidized by private mortgage insurance, tax deductible payments, ability to sell stock on the basis of giving value to non performing loans and ripping people off at all steps. But you say that wouldn’t happen and we wouldn’t expect the banks to allow refinancing when the value of the asset can’t be realized. Hmmmm.
Easier to blame the liberal young spoiled brats(not arguing that it’s not true)than push for renovation of the lending institutions and expect them to work harder to evaluate safe investments. People expect 17 year olds to read the future but can’t expect the schools and banks to do so when that is who should be best at that.
Planning to retire on the value of your home? What if no young people are able to afford your house because they are paying off college debt? The stock market saw this in 2008 The housing market was first however.
1
Public Service Loan Forgiveness has a very specific guideline. It takes specific careers to qualify, you must prove employment for ten years by application in a row. Any gaps in 120 payments and you are dropped. The interest written off is charged on your tax return that final year.
The current repayment programs under FedLoan are based on a percentage of yearly income and does not take in to account any other expenses. If you cant make the payment in full, you are in default.
Financial aid offices do not explain the fed loan process at length and FedLoan doesnt speak directly to students until six mos. after graduation.
The accountability should be shared by everyone with an advantage to the funds. Colleges, banks, and students share that benefit.
While college is a choice, everyone at one point or another becomes familiar with borrowing money; most of us with the intention to repay. To blame or shame is pointless.
If there was more attention given to financial literacy we would all be better off.
1
The interest rates are criminal. I pay less than half the interest on my mortgage. The federal loans are way to easy to get and only requires a few clicks on the website to borrow more the next year. The only saving grace is you can defer if you have some financial trouble like losing your job. Not the best option but it saved me from defaulting. Getting a private loan at a much lower rate is compelling but you lose the deferment flexibility.
Too many people think we should follow the European educational model. OK, let's look at it.
My French daughter-in-law explained the system that existed 20 years ago.
1.Only the top 50% of students get to go to academic junior high school.
2. A series of examination were taken after 11th. grade, If you passed ALL seven, you got to continue for two more years of pre-university education. If not, you could qualify for lesser programs such as agriculture or education.
3. The student took exams in the three subjects they chose. The top students got to attend university on one of the three subjects. The number of students in a program was limited to some number N, that's all who attended. The BA was a three year degree. None of this "finding yourself" in college.
4. Tuition was virtually free. But the university was classrooms, professor's offices, and library. NO football teams, recreation building, etc. The student union was a sandwich shop. There were no dorms. You looked for an apartment with other students you knew or met at the university.
5 Your university was the local one. Since my daughter-in-law was from near Paris, her ONLY choice was La Sorbonne.
6. There are NO STUDENT LOANS OR PRIVATE COLLEGES!!!!
We Americans would hate a system were a true meritocracy was imposed. The French did have an allowance for the student to go home and study. The student could take the exams again the next year.
Limited admissions, no student debt. Chose which system you prefer
7
Was anyone at high school ever advised about how student loans work, or how (at least in the U.S.) you virtually can't get rid of them?
I recall reading a story perhaps 5 years ago about a student who was "accepted" into law school. Future secured, he treated himself to a summer in Europe paid for by his student loan. After graduation (huge amount of student loans by then) he found that his degree from a 'tier 4' law school wasn't taken very seriously by any of the prestigious law firms he had assumed would be begging to hire him.
Are there no guidance councilors available at the high school level to conduct some 'information sessions' on how the whole racket works?
2
I took out something like 80,000 for law school.
Law school was great. I learned a lot.
And then I graduated into a law market crash. I had 80,000 to pay back, with interest accruing and firms weren’t hiring. Not pleasant. And you can’t just wait around. The least appealing law firm hire is someone who graduated three years before. Freshly graduated meat for the associate grinder is preferred.
It was tough, and the absence of any significant inflation in the past 20 years didn’t help.
All those boomers who helpfully bark out “Bootstraps! Grit!” had much higher inflation rates diminishing the real value of their debt constantly. And also, at that time, more of the economy’s productivity gains want to regular folks.
But regardless, the lesson I learned is:
Don’t go into debt for school.
Sure the big job you plan on landing may easily pay for it, but what if the economy tanks while you are in school? What if you’ve got to bootstrap yourself a career?
I have a great and fun career (better than if those firms HAD been hiring, in fact) but all would have been easier and less terrifying without a load of debt.
So, barring the death of a rich uncle, my kids will be heading to Europe for their education.
Cheaper or free, with health care taken care of and yes, good degrees at the other end. Maybe they will stay there. Who knows?
But graduating from school owing the down payment on a house is no way to start life.
22 years later, I should finish paying my debt shortly.
4
Anyone commenting here on fiscal responsibility and how they just worked their way through college doesn't get it. Going to college any time before the late 1990s was a totally different proposition. It's not impressive to work your way through college when college costs a few thousand dollars a year. The reason unprecedented numbers of graduates are mired in horrific debt is not because they are all inherently lazy -- also query whether commenters here would respond with the same negativity if the author had not attended a historically black college? -- but that the United States has decided it doesn't care about financing education. It's policy choices, not individual moral failures, that got us here.
2
“Why didn’t I take more part-time jobs? I was in Washington — why didn’t I try to date some closeted politician and be his well-compensated secret? Or spend more time at the campus gym and land a job stripping? I could have paid for classes in cash!”
Is this for real? If so, I’m not surprised at his lack of good judgement.
11
I came to this country with literally $8. I had a free tuition scholarship and Research assistantship for $325 per month the University of Cincinnati. Mistakenly I thought I will be paid first months assistantship on arrival, turned out I had to take a $125 loan ( Thanks to Mrs Mary Campbell,our Foreign student advisor, I paid it back promptly in five equal installments ) to pay for rent for the efficiency I had to share with another student, healthcare charges to student health services, barely leaving a dollar a day to survivie for the first month. I learnt after arrival that there are plenty of encamps and off campus jobs available to survive, while managing to get some assistance from schools.
As someone from a working class background who managed to earn a Ph.D. by attending publicly subsidized institutions owing to impoverishment, tales such as this mystify me. I received a better undergraduate education at community college than at a large university owing to smaller class sizes and professors whose sole dedication was to teaching rather than research, and the cost was far, far less. Unless your last name is Rockefeller, Kennedy, or Trump, I would strenuously advise any ambitious high school student who believes college is in his or her best interest to begin studies at a community college and see whether further academic study is for them (having also taught college for years, I can knowledgeably state that far too many students are wasting their precious youth sitting in a classroom rather than learning a trade or traveling the world or serving our country, etc.). Colleges and universities charging outrageous sums of money to herd clueless young people seduced by over-inflated hype into large lecture halls taught by graduate students are no better than snake-oil salesmen. To an astonishing extent, academia is a fraud, and at some point our society is going to come to its senses and our entire system of higher education is going to endure a very painful and long, long overdue restructuring. Until then, caveat emptor!
7
Here is one thought: You were a college student, and who were you waiting for to tell you about the impact of debt repayment? Please know that I am not being insincere at all. I want to know what you were thinking as you were borrowing money? Have you considered the conditions of the loans before drawing the money? I ask that because there are different lenders and some offer far better terms than others. Isn't it the college student's responsibility to think through before singing on the dotted line?
2
Just looked at the price of "economics textbooks" at a big online bookseller...
The most popular two in the search were priced at $193 and $266...
The higher-priced one was written seventy years ago...
Would you pay $266 for a seven-year-old smartphone - let alone a seventy-year-old one???
The cruel irony is that the cost of textbooks is less than two percent of overall cost (exceeding $70K/year) at a typical ivy league school...
The crueler irony is that someone could provide these students with one simple number - but does not...
The annual salary they'd need at graduation - projecting at total amount borrowed, and any interest accumulated - so that repayment on a ten-year-schedule would consume no more than twenty percent of their take-home pay...
1
Sure it's always your problem - you bad choices. You didn't work hard enough or something. But while it may be easier in America to hit the jack pot its also tremendously easy to lose all and go deep into debt.
This ain't Germany, the economic engine of Europe, that spends easily a thousand times as much on training and education as our government does even though we are four times the size of Germany. In America it's just a lot easier to fail.
1
"good students deserved to go to schools that matched our talents and ambition." Who says that? Who believes that? You and I don't "deserve" anything. You earn it, and you pay for it. Sounds like you live in L.A. and decided to attend college 3,000 miles away in Washington. Hmmm, out of state rates, room and board. Sounds like you can't afford what you feel you deserve.
Maybe if high school students are told they have to pay for college, like pay for a car, they may make better, more cost effective choices.
5
I consider private loans usury but I find it difficult to understand how a student bright enough to enroll at Howard University was unaware of what a loan is. Did you look at the payment schedule, understand interest or research expected salary of undergrad majors? I feel your pain, but it is possible that if not for this loan, you might have gotten yourself into another financial hole (car loan, credit card debt, mortgage) The money owed is not impossible, and hopefully the education was of value. You made a mistake and please go back to your High School and let the kids know how tough it is to pay back more than 100 dollars a month in loans. Still 12,000 dollars a year should not be impossible-250 dollars a week-you just can't have much of a life outside of working all the time and have no disposable income. People do it all the time. I'm sorry that your Mom is saddled with your unfortunate decision and that she was ill equipped to educate you about money. Living cheaply for the next ten years might be an amazing liberation for you, it is entirely possible, although very hard. I wish you good luck in your career and I advise you to never take out another loan. Although you did not intend it, your actions are exactly the reason University is a financial rip off for every working class and middle class student.
6
The great debt of students is a black eye for the U.S. Predatory lending is correct. Why don't these useless suits in Congress do something to help? There should be public service options to help pay these loans, and no one should ever have to make a payment so large that they cannot live a decent life. Young people were sold on the idea that they need a college education, no matter the cost, by the same people who are now sticking it to them - government and the banking industry.
3
Michael, I hope your book is a hit and you can get out from under this debt. For other commenters complaining about people defaulting on loans - he's not defaulting. He's paying his loans back. He's being responsible. He just thinks it's a heck of a burden to be acquired by a 17-year-old who only wants to get ahead.
5
1. Correct me if I'm wrong, but taking on student debt is voluntary.
2. Tell me again why I'm supposed to feel sorry for you because you opted for a college you could not afford. (Insert picture of Gene Wilder here.)
3. Through planning, hard work, and, yes, luck, my daughter paid of her undergraduate and graduate loans in less than five years. Please explain to her why you should have your debt forgiven.
6
Apparently college was not that great if one cannot compute and comprehend the results of taking out loans.
4
Lesson 1: If you must borrow to pay for room and board then you should attend a commuter school and live at home. It makes no sense to borrow $40-$60K for room and board
Lesson 2: calculate how much you would need to borrow for all four years and add a 5th since so many people don’t finish on time. What would the payment be and for how many years? If that makes you nervous - begin at a community college
Lesson 3: what is the starting salary for the job you are training to do? Do you know? You should not begin any program that doesn’t have an excellent placement track record
6
Re rising tuitions at public universities, I recommend "Public Research Universities: Recommitting to Lincoln’s Vision—An Educational Compact for the 21st Century," published by The Lincoln Project of the American Academy of Arts & Sciences and available on line. A central point in this study is how and why over the past decades state legislatures have precipitously cut funding for public universities, which have had little choice but to raise tuition and cut operating budgets. In other words, public universities are being privatized because they do not depend entirely on state support. Universities compete for state dollars with, for example, prisons, but the inmates are not paying tuition. Meanwhile, along with rising tuition for students, the percentage of full-time tenured or tenure-track faculty has fallen sharply. I'm retiring soon after 32 years at my university, and do not have a "tenure-track" replacement.
Right now I'm helping a family member pay off student loans, both subsidized and unsubsidized, that include capitalized interest. But's not obvious to me what the best strategy is for directing those payments in terms of principal and/or interest.
1
"The student loan industry is. . barely regulated."
Not exactly. Only about 10 percent of education loans are private. The rest are federal (direct or guaranteed), which are heavily regulated -- and more heavily-regulated every year, by politicians of all stripes who want to test their pet policy ideas, apparently based on the idea that, because these debts aren't particularly-critical to the national interest, it doesn't matter that their policy ideas haven't been studied or tested.
6
It is true that universities bear some responsibility for this problem, but they are only part of the problem.
I recall reading a few years back that the cost a public university education had not increased since the 1980’s. What has changed is who is paying for it. States now think that since the benefits accrue to the student, taxpayers shouldn’t subsidize their educations. We all like low taxes -- something’s gotta give.
One factor driving college costs that is rarely mentioned is the demand for student amenities. Students who live on campus do better academically, but some years ago, we couldn't keep students in the dorms because they refused to eat dorm food. So we built fancy food courts, which were, of course, more expensive. Then we built luxury dorms to keep students on campus, but they quickly filled up, so we had to build more. Walk around any campus today and the most opulent, extravagant, over the top building is the student recreation and wellness center. If you don’t have one, you can’t compete for students.
Universities are part of the problem, but so are congress, state legislatures, parents, and the students themselves.
4
This is nothing new. I took out loans for college & law school. When I finished school in 1977, I earned $12K/year & owed around $25K. My payments were $400/month, almost half my gross pay. The author of this article is paying about $1,100 a month. I'm willing to bet he's earning more than $26K per year.
In college, my work study job paid $1.35/hour, and that kept me well-stocked in vinyl records ($3 each!) and other fun.
A debt of $100K or $200K still has the power to shock those of us who may have recently paid that much for a house, so everyone is horrified on behalf of the current crop of borrowers. My mortgage payments and my student loan payments in the 1980s were equal. I could have had a second home for what I paid for my education.
But I paid the $25K, with interest, took a short break in the payment schedule to give birth to 2 future college borrowers, & once again borrowed money for their educations. I'm about to make the last payment on $80K of student loans for them, of which they paid half. It took 20 years. My 3rd child is much younger and just finished college at a state college. Still ended up owing $45K, which we will split.
I wouldn't have done anything differently, given the chance to do it over. Education is everything. It's not an investment for which value can be calculated. It's EVERYTHING.
8
But is it really necessary to go to college to get an education? Why not have cooperative groups doing on line courses together?
One problem is that many colleges, particularly the small liberal arts schools (like the one I attended), do not prepare students for their transition from being a scholar to being an earner. There is much to be gained from the interdisciplinary scholarship of a liberal arts education, but that experience must come with additional knowledge regarding how to transition from the bubble of the campus to the hard scrabble world of work and rent. Colleges do not take responsibility for that transition. They only take responsibility for their own lofty curriculum which is valuable, yes, but not exclusively so. The result is a lot of student who leave a very valuable learning experience with no clue how to pay for it when the student loan checks come due. If these colleges want to be taken seriously, they need to take their own students' futures seriously and help prepare them for it, not through vocational training, necessarily (though that is valuable, too), but through financial and vocational literacy that will help those students prevail as debtors, rather than suffer as debtors.
5
Where are the guidance counselors at these high schools? Is there nobody with KNOWLEDGE and experience about how quickly these costs are going to mount up, and who is available at high schools to advise the student AND the student's PARENT(S)?
I think independent counseling should be MANDATORY before you sign up for student loans. I can't get a mortgage unless the bank thinks I'll be able to make my payments; similarly, I can't buy a car on credit if I don't earn enough, etc.
There needs to be someone at every school to provide much-needed education about taking out loans (and maybe throw some cold water on these plans!). How much is it going to cost to borrow to go to that nice "out of state" college, versus staying IN-STATE (and maybe living at home!)? Or maybe you can do 2 years of community college + 2 years of "brand name" college.
Maybe we need a video game called "Let's Go Bankrupt!" to show high school students what REALLY happens when you chase after a college degree without understanding the total cost of what you're getting yourself into.
Or maybe high schools need to develop a required course that teaches basic financial literacy to all students.
IMO, parents should NOT be co-signing these loans. My parents wouldn't have signed even if they could have. I financed my college education 100% on my own, via scholarships, jobs, & student loans - but I ALWAYS knew exactly what I was getting myself into (& how deep!) - and that nobody was going to bail me out.
3
I think one of the big oversights kids make is not understanding how much they will earn relative to the debt they're willing to incur for student loans. They think they'll work hard at the great job their undergrad degree will earn them, but they're not savvy enough to look at the numbers with any real-life financial experience. Unfortunately, many parents don't have that financial savvy to properly guide them. One step in the right direction would be for schools to help kids and parents understand what certain amounts of debt translate to in terms of loan repayments and what real-world salaries and living costs look like these days. Kids don't have the experience or information to making this kind of investment decision really...and schools and lenders take big advantage of that.
9
I graduated after 8 years of college in 1986 with debt that took me 20 years to pay off. My education was important to me and I do not regret it.
But I wanted to be an artist; I just assumed I wouldn't ever make much money--it wasn't ABOUT that. For a long time the sacrifices I made to do what I wanted to do were well worth it. I actually made a living, partly because I didn't allow myself to have much--it went back into my work. And I was lucky to have some talent and I worked very hard.
My parents raised me to take responsibility for my choices. That's really what it's about. You can choose a variety of ways to go to college and figure out how to finance that. College is certainly more expensive now than when I went, but not so different in commensurate terms.
7
Actually, it's WAAAAAAAAY more expensive now. It's a totally different ballgame. So a lot of students who are very well-qualified academically don't have the choices they would have had at an earlier time, based on finances alone.
21
Since 1986, college costs have increased at 2.5 times the rate of inflation, on average, and at the most selective private colleges, even more.
https://www.forbes.com/sites/steveodland/2012/03/24/college-costs-are-so...
https://www.washingtonpost.com/news/grade-point/wp/2016/09/13/the-anxiet...
http://college.usatoday.com/2017/06/09/private-college-tuition-is-rising...
2
We should work it into the societal fabric that there are extremely few undergraduate degrees worth taking out significant debt for. The rule of thumb, let's say it together: do not take out more loans for undergrad than you expect to earn in your first year out of college. If you expect to be an itinerant writer after graduation, that number is likely $0, and for most humanities majors that number is probably under $40,000. People who can get into fancy expensive schools almost always have the credentials to go to good flagship state schools at a hefty discount. (Also Don't Forget: undergrad tuition at the very fanciest and richest schools like Harvard and Yale are free to all but the rich, just upon admission.)
If you really need a fancy name to get by in your field (and there are surely fields where this is the case), get it in graduate school, when you're a bit older and more sure about your interests and career direction, and where you will have a better idea of how to gauge your future professional income.
10
I can't really identify with students who default on college loans. I didn't take any money from my parents for college or law school, both Ivy League. I worked all year, both in school and during summers. Tuition was a fraction of what it is today, but I earned less than $2 an hour. My big extravagance was going to a prestigious law school where I'd have to live in a dorm and pay for food (I stayed at home for college). I thought it was a good investment; it was because the name made a difference to employers (if not to me). But near the end, I ran out of money to eat and went to the student loan office. I borrowed the money I needed, didn't do anything with it more than buy food to cook in my dorm room and was able to pay it back within two years after graduating. We're making it much too easy for students to borrow more than they can repay, and we shouldn't be bailing them out of bad financial decisions. They're not babies.
12
Although you acknowledge that "tuition was a fraction of what it is today", you don't say what fraction. If you went to school in the early 70's you are probably talking about $3,000 - $4,000 a year for tuition at top-tier private schools. If it was later in the 70's maybe it was 6 or 7 thousand dollars a year. Today, that same tuition is about $60,000.00 a year at top tier schools with a minimum wage of maybe $8/ hour. It is not possible for a college student today to work and satisfy tuition, to say nothing of room and board.
The real question is whether people should be denied the opportunity to go an educationally appropriate institution because he/ she cannot afford it? And if the answer is no, then what is the appropriate percentage to be borne by the individual and the government. And what role does the government and do the schools have in limiting or reducing tuition?
23
The best way to enhance one's status once one has done as well as possible during the university phase of one's career -- and that phase is long over -- is of course to do everything possible to undermine those who are just starting out.
There are myriad ways to accomplish this goal. If tangible means are unavailable or momentarily elusive, one may always try psychological means, or even calumny. Experiment, see what works, and maintain a positive attitude. You can do this!
6
You cannot identify because you apparently grew up in a bygone era and haven't caught up with the reality college students face today. You admit your tuition was a fraction of the cost it is now but don't seem to understand we have had stagnant wage growth for decades and skyrocketing college tuition. The "back in my day" arguments are misguided and harmful. What is happening with student loan debt in this country is not the result of our young people suddenly, en masse, making bad decisions but the result of a corrupt system that is intentionally rigged against them. We could fix it all but have chosen not to. Instead we watch as the white boomers try to drag every last cent with them to their grave.
As a recently retired professor, I've been concerned for years about rising college costs. My undergrad education at an 'elite' school was paid for with a private scholarship. Although, I also worked, ate a lot of peanut butter sandwiches and bisquick and wore the same patched clothes for 4 years. But, I managed to avoid student loans. That is so much harder for lower and middle class kids these days. A big part of the problem is the college ranking system. Most of the rankings do not consider affordability and value. Moreover, many colleges and universities push faculty hard to bring in big research grants which improve the university ranking-- so they can charge students more. The big grants require lots of expensive administrators (and college presidents, etc. often make way too much money). I'm a fan of research but not of driving up college costs based on a college's federal research dollars. Another problem is that the more a university charges, the higher their ranking. Charging less hurts rankings. The idea is... if you're a good school, why don't you charge more? Financial aid and scholarships often don't make up for simply charging less to begin with. If a student switches majors or can't get into required classes or an advisor blunders, graduation can be delayed--and fellowships often are limited to 4 years. Too many state schools rely on graduate students to teach classes which is outrageous given tuition costs. It's a total mess.
20
I was up against word count so here are a few more thoughts. Should all majors really require 8 semesters of 4-5 classes per semester? For engineering students and others who will need professional licensure--yes. But, too many classes students are forced to take are (I'm going to get clobbered) are more about job security for some faculty than about what is really needed to succeed in life. It would be great if every college grad could have depth and breadth in studies. But, if the cost is crippling student loans, I's go for a semester less in college and some more real life experiences. I wish colleges and our entire system would understand that. The university system has been great but it's time for some big changes.
15
I feel sorry for Michael, for I am a college professor and I do see often and hear the stories from my students of their massive loan debt for their classes. And, i tell them I was in the same boat, took out loans, and it took me years and years to pay those loans back. But, I also tell them to watch the loan amounts they take, only take what they need, always try to get a scholarship/grant too, and work as well. It can be a lot to take in, but one can learn financial management this way. The problem: students' maturity in regards to taking on this debt. Some don't realize that what they take out will double in what they repay. That is the rude awakening. I tell my students this over and over again, that the money they are borrowing has to be paid back and it will twice what they took out so be realistic in what they need in their loan amounts.
10
Do you also talk to the administration at every opportunity about ways to cut costs for students? And, perhaps talk to the students about how they might take online courses or summer community courses, etc to cut costs? The faculty need to be proactive about cutting the costs of a college education as the administration isn't going to do it unless they're pushed hard from as many directions as possible.
3
Hmmm. I enlisted in the military for three years, earned the GI Bill, went to state schools and worked part time while in college and law school and graduated with no debt. I don't think there is anything stopping today's students from doing the same thing. We all make our choices and then live with the consequences, both good and bad.
14
But you shouldn't have to join the military to be able to afford higher education. Not everyone that is cut out for higher education is also cut out for military service.
15
@Schneiderman: I think reinstating mandatory conscription would do wonders on many levels in this country - it would make 18-year-olds grow up (as opposed to the many 20-somethings I see who have trouble "adulting"), it would provide college education for all of them after they got done serving, and they'd all have a much better idea of how the world (and money) works!
2
What you did was wonderful and you should be very proud. But there are plenty of kids with various disabilities who can't do what you did. Or, kids who don't meet the height requirements. I would have been willing to go to an academy or ROTC but I was too short (thankfully I got a private scholarship and even grew in college; actually, in my day there weren't many options in the military for women). I've worked with lots of kids with various disabilities who didn't have military options. So, there are indeed some things stopping some kids today from doing what you did. That doesn't detract from your wonderful service, though.
1
I worked full and part time as a student and have worked full-time in decent jobs dince. I've also paid about 30k in interest on low-interest federal loans (from undergrad and grad school at state schools) in the past 10 years. The balance has hardly gone down at all and I've realized they really aren't meant to be paid off. Even so, keep fighting the fight and don't let loans turn you off of college. It's worth every penny.
10
my grandfather pursued the Rhodes and obtained it. He went on to be on the selection committee that sent a future US president to Oxford. My father went to an Ivy League school and then eventually obtained a PhD. My mother has a master's degree from Parsons in fine art. My own grandmother even went to college, in days when women didnt go to college. When I asked my father what PhD meant, he'd answer Post hole Digger. I went to college. I got a degree and eventually made a lucrative living in a technical career that I never pursued in college. I went on to pursue yet another career after that I never went to school for and was altogether completely different from the other two. If you pursue a field you love, start out in the lower ranks and are truly passionate about it, no college degree is going to help. I see people get hired above and beyond me who a) are half my age and b) never end went to college.
Any education is as good as the effort you put into it, no matter where it comes from.
5
Here's one option. You could enlist in the military under the College Loan Repayment Program. Do six years or so, and also earn the Post 9/11 GI Bill. You'll have plenty of time to write in the military, both on and off deployments - if you stick your nose to the grindstone and don't get trapped in many of the pitfalls of a military life - partying and boozing, womanizing, or general hellraising.
Depending on how large your student loans are, they could be paid off by the time you finish your first enlistment. You'll have to Post 9/11 GI Bill to pay for any graduate school you want, plus you'll be a member of a Protected and underserved minority - a Veteran.
(Full disclosure: I served 10 years in the US Army and got all my undergraduate student loans paid, as well as an in-process Master's degree at Harvard University, paid for plus a 3,000 dollar a month living stipend. I also got to go to Iraq and Afghanistan and Bahrain (where I met my wife) and met plenty of people and engaged in situations from which I will have stories that will last a lifetime. I too am a writer, albeit unpublished. Yet.)
8
I had a full scholarship to Penn State (1957-61) , paid for by General Motors. Then I had a G. H. S. Bushnell scholarship to Yale (1961-62), which paid everything except food, which I covered by waiting tables at Yale Law School. In Berlin, I lived off money I had saved in New York and by selling Christmas trees and working as a gardener’s assistant for the British forces. At Stanford (1965-75 – my ex-wife got her Ph. D. at Columbia, with grant money from the Doherty Foundation and Columbia University), I had teaching and research assistantships, NIMH, NIH and Ford Foundation grants to get me through my Ph. D. At the end, the dean sent me to get a loan, which I believe was about 1500 USD.
Note the dates. When I asked my son why he needed money, he replied, “Dad, times have changed.”
17
Note to borrowers: debt is to be repaid. Common sense.
14
Correction: I meant he, not she. I think it was the "politician's well-compensated secret" part that caused me to think he was a woman. But actually it works even better the other way: he'd have his pick of closeted conservatives!
The exorbitant amounts that U.S. college students pay for their education is first of all money that is transferred in various ways to the top .01% of earners, not least by keeping tax rates on their earnings criminally low. Our country has also chosen to spend several trillion dollars on wars in Iraq and Afghanistan - money that would have been much better spent on education. Remember also that our banking system received trillions of dollars during the 2008 financial crisis (the same banks that are now hounding students for debt repayment).
Two dozen countries worldwide, including much of Europe, offer free tuition to students at public institutions.
27
Thank you so much for publishing Mr. Arceneaux's piece because it so clearly makes the case against government-funded debt forgiveness. Every decision he has made -- choice of college, method of financing, career path, etc. -- has been utterly thoughtless on his part. His choices reflect the fact that many in his generation EXPECT the world to work for them, without regard to any level of effort or personal responsibility. And when the reality of their thoughtless decisions slaps them in the face, Donald Trump and predatory capitalism are always to blame.
Let's promptly halt all of this loan forgiveness nonsense, at least until borrowers come to understand that a student loan is an investment in one's future, and that, like any other investment, it must be made prudently. For example, if you cannot stand the thought of corporate employment or a straight job of any kind, you might not want to borrow six figures to attend a private university or to study some obscure aspect of the humanities.
It's a crime to run the student loan program as a charity for self-marginaling losers. How about loan standards that require the student to demonstrate likely repayment based upon an actual plan -- complete with proof of aptitude, qualifications, course of study -- that will actually result in gainful employment? Such a program would allow us to provide full support to deserving students. And people like Mr. Arceneaux can do what they want to do on their own dime.
10
Were you aware of what interest rates and minimum payments and debt looked like when you were a teenager? Most parents and schools don't teach children about finances at that age, which makes student loans look appealing.
Also, the student loan program preys on students. The interest rates are higher than loan rates for cars, personal, etc. Why is that? Aren't we supposed to encourage people to get educations and improve their opportunities and lives?
I received student loans. When I was not able to find a full-time job, I called about consolidation of my loans. They consolidated them to the highest interest rate of all the loans - 9% (and this is 25 years ago). Then when I got ahead on my payments years later, my mother sent me an article that said loan companies often lower interest rates if you pay ahead and don't miss any payments. I called and was told that because I consolidated my loans, they couldn't make any adjustments to interest rates. So...I did what I needed to do to make sure I could pay my loans while the government hit me with a 9% interest rate and no chance of lowering that rate as I continued to pay my loan. Yeah, there's nothing wrong with the student loan program. Yeesh.
1
So, as a a nation, we're just giving up on innovation and excellence in the arts and humanities because they don't lead to immediate gainful employment, then? People who pursue those accomplishments are just "self-marginalizing" losers, then? When we want to look back and pinpoint the moment when America started to decline beyond redemption, this could be a benchmark- when we decided that anyone who chooses to pursue a life that doesn't lead immediately to a highly paid, preferably corporate, position was considered a loser.
2
"Clayboy": Your attitude is despicable and emblematic of the phony rugged individualist anti-intellectual philosophy that has precipitated the decline of American society. You really expect some teenaged high school student to come in with a detailed financial plan worthy of a CPA? 50 years ago with some help from my saintly parents I went to college and professional school with the assistance of low-interest student loans, including the old National Defense loans guaranteed by the Federal government, which I was able to pay off entirely after 10 years of work. They were a small fraction of what they are in today's predatory environment and a decent job permitted one to manage the debt. Some day your antipathy towards government support of education will prevent someone you call a "self-marginalizing loser" from providing health care to you and you will die a painful and well-deserved death.
2
And women plan on clearance, get Masters degrees, take out loans, not anticipating that in a few years they will want to stay home and raise their children. This is a very understandable but it puts tremendous pressure on the husbands who are paying off two sets of loans on the husbands who are paying off two sets of loans. The old expectation that men should be the breadwinners comes to play. But that is not always realistic in this age of student debt. I've seen four marriages that failed due to this scenario- and worse - a husband's suicide.
8
If banks can borrow money from our government at 0,1 or 2% interest rates why can't students??
48
What has always been interesting to me is that the student loan interest rate is set not by the markets, but by Congress. If going to college is so important to our society maybe we need our representatives to start acting with that interest in mind and lower rates to a level where they cover costs, but don't overburden students/debtors. I think that would go a long way toward making this situation more manageable.
1
Because of the risk. A student loan is incredibly risky. You are loaning money to young people ages 17-24 (mostly) who have no track record and no proof they will even finish college -- something like 40% of each freshman class never graduates! -- they might run up debt, but not have any degree or skill to earn money to repay the debt!
And this is not a small debt, as often mentioned here a good school can easily run $40K to $60K a year, plus living expenses -- most people cannot get scholarships -- it is a rare scholarship that covers 100% of costs anyways.
When a student defaults on their debt....or takes extra years to repay it....there is no asset like a house or car or stocks or anything to "repossess". The education is inside that student's HEAD. It can't be taken back, or sold, or monetized until that student gets a job and earns money -- and what if that student studies an arcane major in a soft subject? "Gender Studies"? "Communications"? "Art History"?
If students COULD default on debts of six figures -- trust me, most of them would default. Who would possibly want to pay on a debt for 25-40 years?
1
There are 4 participants in this problem. 1) The Student borrower who takes on the obligation, 2) the School that receives the money, 3) the lender who provides the money, and 4) the government who subsidizes student lending and public universities in many cases. Students drowning in debt want the lender to forgive the debt and the government to bail them out. The problem here is moral hazard at the Universities. They always get paid, so they continue to raise tuition, expand and overpay administration, and build sports and dorm palaces. The lenders are not "bad guys" here and it is savers who are invested in the student loan securitizations that make the system work. I just don't see how we continue a system where the Universities don't have skin in the game and a share of the pain here. States and the Federal government are weighed down by public employee pensions and entitlements. There is no free money here, so the question is whether the taxpayer should bail out the borrowers. But if loans are to be restructured or forgiven, how should the people who honored their repayment obligations be treated? Tough luck for those suckers? What about the parents who paid the tuition - tough luck and here are more taxes to pay some other kid's tuition? No, that doesn't work either. We need to align incentives to drive smarter risk/reward situations and a healthier higher ed marketplace.
11
We could have boosted the economy by forgiving all the mortgage debt during the housing bust, too. We didn't. It would benefit one segment and cast the cost on all, including the more prudent who didn't buy more house than they could afford. Many, many people borrowed cautiously and paid off their student loans (including me). Now that I'm on Social Security I'm supposed to bail today's students out? As it is, school-driven property taxes are threatening to force me from my home. Enough!
I agree that universities are also to blame in the ever-escalating cost of tuition. They keep building resort-style amenities to attract students -- lavish recreation centers and sports arenas, dorms that are more like luxury apartments, water parks, golf courses...College presidents and coaches are making millions... literally. Time for schools to pare back, too.
7
Another piece is that we've allowed universities to freely price discriminate.
Economics tells us that the best way to maximize revenue when you're selling a product is to offer different prices to everyone based on what they're capable of paying. It also tells us that this is profoundly unfair to the buyers, who all get the worst bargain possible.
We've allowed universities to do this - wrapped up in the cloak of grants and financial assistance - and it means they can keep raising the prices so that everyone pays top dollar based on their income (except the very rich). It's broken.
1
Sharpshin, if you are now on Social Security, your loan debt wasn’t overwhelming because you borrowed “wisely-“ it wasn’t overwhelming because tuition was a heck of a lot lower back in the ‘60s and ‘70s.
Don’t turn this into a game of “who is more virtuous.”
If you do, young people might take note of the fact that you are probably going to take far more out of Social Security than you ever paid in.
And they are paying you that surplus out of their paychecks.
2
This story reminds me of that of my niece.
She graduated from a state school with $25,000 in student loans and for her birthday and Christmas, I would make a loan payment for her.
Then one Christmas, the payment I made was refunded about three weeks after I made it - with no explanation. After calling their customer service desk, I was told to send it to another address "because they transferred some loans there". Again my check was cashed and then refunded about three weeks later with no explanation. The intervening time had caused the loan to go into default and they called the loan - demanding payment in full immediately - but they would discount the loan if we sent the money immediately. We said "OK - send us an invoice and we'll pay it." Their response was "we can't do that, our system has been down since last month". In all future conversations, they refused to send us any paperwork for different reasons - in doing further research on this particular company, it appears that this is their standard business model - because many who did make their "discounted payment" - some after mortgaging their houses - were then charged with additional fees and penalties.
All thanks to the 2005 (republican sponsored) bankruptcy law.
36
Let's all admit that the financial industry has stood by like vultures and engaged, over and over and over, in unethical practices which they could reasonably know would destroy the financial lives of loan holders. Our government allowed it to happen, and THEY ARE STILL allowing it to happen. A whole generation of young students thrown to the wolves, so that banks could rake in easy money.
Should students know better than to sign up for loans? Yes, they should. And people are responsible for what they do. But these are government backed loans. Don't you think it would have been reasonable to have people available to assess the advisability of making these loans in the first place? Many of these loans should NEVER have been approved. But hey, there were fortunes to be made by the lenders, and the government looked the other way.
In future years, history books will record the era of predatory student loans in the same kind of language we write about the Triangle Shirtwaist Fire, or the Tuskegee Experiment--horrible injustices committed against groups of people. No, borrowers didn't die, but most slaves didn't die, either.
16
If we could organize 20,000 people with crushing student debt we could start a movement. I think debtors feel that they are powerless when facing the debt collectors. But debtors organized in mass have profound power. We could threaten the entire predatory financial industry, demanding that debts be renegotiated or forgiven. The situation is only going to get worse until we realize the power we have to make changes. WE WON'T PAY!!!
7
You do realize when you say "We won't pay," the bill will fall on taxpayers. Would you gladly chip in to relieve others of their debt, taken on with little or no forethought?
7
@Aron: "Crushing student debt"? Well, by gosh, whose signature is on those loan papers? Did someone forge your signature?
Your comment indicates the lazy/heedless mindset that got you into this mess. The "power" you have - and have ALWAYS had - is the power to NOT BORROW MONEY YOU CAN'T AFFORD! And yep, the situation is going to get worse until you understand that.
How about this as your slogan: "We won't take out loans we don't fully understand the implications of!"?
9
Sadly this isn't Obama vs Trump, it's unregulated predatory capitalism. I grew up poor, joined the USAF to pay for an expensive private medical school education (and even had undergrad student debt to pay as well). HOWEVER, college at a private uni is 70,000 all in. Even in state at a place like UNC Chapel Hill is 25,000 a year. Why does college cost so much? I would argue you could almost educate yourself for free online. The idea of getting a 4 year degree has been sold and commoditized to an insane point. Most of my foreign national MDs that I train have ZERO educational debt (college and medical school combined). Sadly, America has taken advantage of the lower and middle class again (and I grew up in that demographic.)
17
As Elizabeth Warren keeps saying "The system is rigged." Against the 99%. It appears that the raison detre of our nation is to supply cheap labor (from within or outside the nation) so that the rich 1% (who own corporations, businesses) have access to all the cheap labor they can exploit to enrich themselves even more. Plain and simple! In old days, it was the rich landowners, who needed cheap or no-cost (aka slaves) labor to extract money from their lands. Now it is corporations, indirectly of course! They have no reason to worry about anything but profits for their owners (called shareholder value in the same spirit that inheritance tax is called death tax). Pay the minimum or subminimum (if one is an illegal) wage, overwork them and exploit the working stiff. If that is not possible, export entire industries to low-labor countries and exploit both those workers and jobless ones at home. What a system! Aided and abetted by our Congress!
Why would such a system care about whether you got a degree or not? What it does care about is how best to exploit you, by giving you a "generous" student loan (even if you end up jobless) and make you pay it back through your social security benefits if need be or your parents' meager wealth. Our complicit law makers have made sure that the young citizens of our country are deprived of bankruptcy protection, while Trump can declare bankruptcy any number of times and get away. Compare this to "higher education free" countries like Germany!
16
Can you please explain why Elizabeth Warren was willing to accept an annual salary of $350,000 to teach one class at Harvard Law School? What does that say about "the system?" And the 1% that includes Senator Warren?
5
Thank President Obama’s for making student loans under govern. Rules. Can’t refinance ask him? I have very little sympathy for students caught in this problem. Did she have a cell phone?computer? Eat out a lot? Part time job? Ask what the monthly payments would be? My generation didn’t by a home without a large saved down payments.
3
I'm sure I am also of your generation - baby boomer. It cost me next to nothing to get my undergraduate degree, and literally nothing to get my Master's degree - I had a full fellowship. My degrees are in fine arts. Bought my first house for 5% down (the house cost $85,000). So you do the math. I simply don't believe your self-congratulatory narrative. Starting out my adult life was infinitely easier than it was for my kids, now in their 20's. People advise them to go where the jobs are. But that's also where the housing costs are completely out of reach. I wish I had answers for them. By the way, having a cell phone is hardly an indulgence these days. Try getting a part-time job without one.
You take a loan. You have to pay it back. Why is anyone else the problem here?
Unless there is fraud/deception, shouldn't the borrower and his parents think & reflect a bit before taking money - whether they can pay it back or if that degree gets a worthwhile paying job. People want the prestige of a degree on someone else's back.
Most of the commentators (& the borrower) seem to miss the point that it is someone else's hard-earned money. It doesn't fall from a tree. Most probably it will end up on the taxpayers.
There are unscrupulous people/motives in the system, but ultimately, nobody is going to force me to take on debt which I don't understand or cant pay back.
It has become fashionable nowadays to blame some amorphous ambiguous 'other' for a simple lack of judgement and reflection and forethought.
10
When I went to Berkeley decades ago not only was it cheap, but interest would not start accruing on loans until you graduated. I have two children in graduate school. We paid their obscenely expensive undergrad tuition (over $50k/year each) and they took some loans for graduate school. What really annoys me is that even federal loans charge interest while they are in school. At the very least, the lenders could not charge interest until graduation.
7
Donald Trump has filed for bankruptcy SIX times.
While Congress has granted corporate welfare to the student loan industry making it impossible for students to declare bankruptcy on the loans,
Trump’s companies have filed for Chapter 11 bankruptcy protection a half dozen times, which means a company can remain in business while wiping away many of its debts.
And it's been really easy for him.
For example, Trump’s Taj Mahal opened in April 1990 in Atlantic City, but six months later, “defaulted on interest payments to bondholders as his finances went into a tailspin,” The Washington Post’s Robert O’Harrow found.
In July 1991, Trump’s Taj Mahal filed for bankruptcy. He could not keep up with debts on two other Atlantic City casinos, and those two properties declared bankruptcy in 1992. A fourth property, the Plaza Hotel in New York, declared bankruptcy in 1992 after amassing debt.
PolitiFact has uncovered two more bankruptcies filed after 1992, totaling six. Trump Hotels and Casinos Resorts filed for bankruptcy again in 2004, after accruing about $1.8 billion in debt. Trump Entertainment Resorts also declared bankruptcy in 2009, after being hit hard during the 2008 recession.
The least we can do for those suffering under crushing student loan burdens is to give them the same protection (i.e. the possibility of bankruptcy) that Trump, the big bankers and the Wall Street tycoons have.
It's only fair.
16
Uh, in the early 80s several student loans were 18% or more. So the amount borrowed nearly doubled every three years ( rule of 72). The loans were tied to the prime rate which peaked at 21.5% in December, 1980. Some of us worked day and night to pay off those loans for this reason. My debt was 90K and it took seven years of no vacation, no missing work because of illness, sorry Mom I can't make it for Christmas.
Perhaps Mr. Arceneaux should focus on earning money to pay off his debt and disregard everything else.
Surely Howard U. taught you about "life".
My heart breaks for you and the burden you carry, one which also afflicts my nieces and nephew. Please hang on for better days and continue to advocate, as you are in this article, for reform. It is absolutely WRONG that young people should be exploited for profit when they are striving to educate themselves and become full and productive members of society. The burden of such usurious loans falls heavily on individuals but, in doing so, it actually undermines the fabric of our society - it isn't just the individuals who are being hurt here, but our collective future. And we must collectively stop this assault on our nation's well-being. Good luck to you!
8
In my day, the 1960s, college was affordable for anybody who could make the grade. Cheap state schools were always an option. Things started to change when college students supported civil rights and opposed the Vietnam war. In response, conservative politicians began "the war on college," to teach those liberal brats a lesson.
College was invented in the first place as a rite of passage for the well-to-do and a barrier to upward mobility for others. The GI Bill and the post-war affluent society may turn out to be an aberration. We may be returning to the days when higher education was a privilege, with the added twist of a predatory banking scam to victimize ambitious people who can't pay cash.
15
Part of my son's financial aid package included five thousand in "work-study." He arrived on campus, expecting to find a work study job that would accommodate his class schedule. Instead, every job he applied to insisted that he skip classes to show up for work! How is that "work-study," if even campus jobs do not take into account the fact that students actually have to do the "study," not just the "work"? He was not able to find a work-study job, thanks to the inflexibility of the school, so now we owe the money he was supposed to have received from work-study! What a scam!
The first semester, we set up a monthly payment program, but the school itself has been terrible in compliance. Twice it has returned our checks, claiming that they didn't know whose account to credit it to, despite the fact that my son's name and his student ID number were noted on the checks. This semester, the school seems to have forgotten that we even had a payment plan at all, and has tried to charge us a delinquent fee!
I am starting to think that the people in the financial aid office must wake up in a brand new world every day. They certainly make us feel as if they have never heard of organizational systems or agreements. We have five adults in our family contributing money to his tuition so that he doesn't have to take out much in student loans, mostly because of the sad stories like this one. But it is starting to feel like the whole system is a scam, whether you take out loans or not.
12
The oppressor in this case is the Federal Government which is the actual lender for all student loans. And surprise, Uncle Sam exempted himself from bankruptcy laws. His mantra is always "Pay me what you owe me". Its the modern version of debtors prison, except even prison wont make the debt go away.
3
The cost of education is outrageous these days. Yet we seem to worship the so called educated and support their extortion. The blame for that lies solely with our higher education system. Next, I suspect that the author did not have anybody hold their hand or force them to sign on the dotted line. And it appears that the mom in the story was not much help in the math and common sense department. And by the way, for profit lending institutions are just that. Our society is quite enabled and we seem to accept no responsibility for our actions. We must learn that just because we want a Lamborghini sometimes we need to act on the reality that a Ford Fiesta will do. As a professor once told me "just because you want to be a NBA player does not mean you are qualified", in other words, perhaps a dose of reality might be a good thing. If you cannot pay the bill do not make the purchase.
2
To be blunt, I have zero sympathy for students complaining about their debt. I worked my way through college and graduate school, because I refused to be burdened by debt and my family could not afford the tuitition. I worked evenings and weekends parking cars to pay for undergrad then I worked as a software developer during the day and went to grad school at night, and studied and did homework on the weekends for years.
If you sign your name and promise to repay a debt, you are responsible for it. So, quit complaining, get a second job, or even a third to pay off the loan. The problem isn't how much you owe - it's that you are too lazy to work off the debt you promised to pay.
3
Sorry but this message has been shouted for some time now.
As has many messages about accumulating debt.
Should there be more transparency about the rates, etc, and how they will effect the graduate? Yes. Especially if the degree is for some thing not known to earn high wages. Don't go Ivy League IF you're gonna teach for two years then get married.
Basically, high school students and their parents need to face reality. Academic and potential reality. Just because Jane's best-friend has a bright future and is gonna be a professional, don't mean lazy-Jane has to go the same school. Just because little Joe "wants" to be the next Hedge Fund maven, but can't remember his locker combination, don't mean he needs to go top shelf University. Just because Mom and Dad are alums of Ivy League X, dont mean Taylor, whose proclivities lean to civil service or trade work - should not be forced to fulfill their dreams.
Its very obvious the nation and the economy and jobs markets have left the need for top-shelf college status behind. The NEEDs of employers and job markets are not truly being met by the choices most high school students are making...so a new "look" is needed.
Its no longer about where the diploma was issued, or the old-school courses taken, but more about the real world skills an employee has at the time of hiring that matters. And those can easily be obtained at less costly commuter colleges, or small under the radar colleges.
Or learn a trade!
2
"Like taking candy from a baby," is the mantra of those in the student loan business. Moneylending, especially with interest, was historically condemned by the Church as far back as the Fourth Century. People who charged interest could not receive communion nor have a Christian burial. Biblical taboos against it can be traced to the 7th Century BCE. "Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest." It is very troubling that our so-called Judeo-Christian society allows companies to impoverish individual children who want to attend college. If people just didn't go to college, what would happen to the competitive edge the US has in the world? It is patriotic to go to college. It is unpatriotic and against Judeo-Christian law to charge students interest. If there are to be loans, they should be interest free and suject to fair discharge, like any other borrower is entitled to.
5
Most if not all for profit colleges such as the University of Phoenix, Capella, DeVry et al, would not be around if they did not have business models that involved title IV money from taxpayers and converting it into student debt. All for degrees that are pretty worthless. That goes for Jack Welch school of business and the famed Trump University.
Cap that with the fact that the overall graduation time is now 6 years for undergrads in all schools, you have a huge problem.
Perhaps the students should have a class action lawsuit against the schools much the same way as borrowers sued mortgage lenders for misrepresentation. Some of the tactics used by schools to lure students border on predatory lending practices.
That said, thanks to Hillary among others, this debt will follow you beyond the grave because you cannot declare bankruptcy.
2
I'm trying to extend my student loan debt past my death. I should be dead by 2030, my loan payments currently extend to 2042. They do say that one of the ways loans are forgiven is by "death of the student."
4
You take out a loan, you pay it back. Surely someone in the writer's 8-12 years of post-elementary education might have explained the basics of debt? Or he could have maybe seen a movie or sitcom or reality TV show where someone has debt and needs to pay it. His beefs are "no one told me" and "I'm not being treated well because I'm reminded I need to pay my debts". Sorry, in 21st century American if someone doesn't understand what signing a promissory note means, then schools, family, and friends sure failed the the writer.
3
The recent tax reform, by eliminating student loan interest deductions, expresses loud and clear Trump's "looove for the uneducated!" The right does not benefit from highly educated voters, thus does whatever it can to discourage the pursuit of higher education by average folk. Not a good recipe for democracy, and extremely short-sighted in terms of our economic future.
3
Take another look at the final version of the tax reform; you should still be able to deduct that interest paid if your income is <80K/year single filer, <165K if joint filing.
The interest rates are predatory. Emigrate and pay off the principle plus 1 percent and tell them thats all they get. Debt doesnt cross borders.
1
As with health care, you Americans are masochists. You think that paying more for services results in better outcomes. You're wrong. Socialized medical coverage in Europe averages about 10% of GDP with results equal to or better than the U.S. at 18%. Students attending university in Europe are not burdened with gigantic loans to achieve academic degrees and I would put any European college grad up against an American any day.
And here's a deeper problem. The current president and conservatives believe that they're going to "make America great again" by somehow magically educating a 21st Century workforce (both blue and white collar). Unfortunately, I see no effort or investment in training or retraining people by corporate American. No, quite the opposite. Getting an education is viewed as nothing more than a "profit center" for schools and investors.
The fact that students graduate with huge debt is absurd.
8
Well, 17% of Italians age 25-64 have a college education versus 44% of Americans, so whatever they're doing doesn't seem to be working particularly well. Is that how their healthcare plays out as well?
1
Your story is compelling, but you fail to acknowledge one of the big villains in the entire student loan story: universities and colleges who charge enormous tuition and fees And are quite happy to have this subsidized by student debt.
4
Oh good - I'm first! Before all of the judgers and haters start on this writer's poor decisions, her decision to go to an expensive school, her shock at having to pay back loans, and that she probably got a ridiculous degree that's useless: whew.
My own offspring from a working class family are in the same boat. BUT (before you get started) they always held jobs, one of them lived at home for a portion of their college days, and they went to state universities. That last part is important because usually these stories generate all sorts of comments about how students could have avoided this by going to state schools.
Not true! These loans are predatory. And when they tell these young people they can pay them back with income-based payments, what it really means is they will be paying them back literally forever at between 7-10% (my mortgage is 3.25% for cryin out loud). It's like a big credit card debt that can never be paid off with a minimum payment every month. BTW, credit card companies can no longer prey on 18 year olds on campus, like they used to do.
So before all of you judges out there get started criticizing these young folks for their loans, educate yourselves about the realities.
10
At least once a month I counsel a senior in high school or his parents about not getting deeply in debt from school loans. I do the math for them and run the numbers, but I have no chance against the popular belief that starting life with $150,000 in debt, twice as much as my first house cost, is an acceptable proposition. So many of my patients come from lower middle class homes and the parents, either out of shame or a lack of information, go along with this sham.
5
"But the truth is, a lot of this was always out of my control."
False.
I graduated from college in 2016. I could have gone to an Ivy League school, but chose to go to a more affordable university that offered me scholarship money. I worked two part-time jobs during college and graduate with $1000 in debt for exactly the reason that I didn't want to end up in your shoes when I graduate.
American children need to be taught responsibility. They need to be taught that they can't have everything they want. They need to be taught that resources are finite, and that if you can't afford something (private education) then you can't afford it. And they need to be taught, from a young age, to be wise with their finances.
It's possible. Trust me!
10
The solution to the student loan burden lies with the universities and colleges that took obscene advantage of the easy money available to students. The colleges and universities need to reimburse students for at least 50% of their loans.
2
This article really irritates me. Why didn't the author understand the impact of loans, and make some estimate of future earnings and loan repayment schedules? I went to college in the 60's under very similar circumstances, worked part time while in school to minimize loans, and paid them off quickly. Others I know went to junior colleges for 2 years then transferred to the state universities. Be responsible! There's a great deal we can't control in life, but this is one area where we have some power. Everybody does not need Harvard, or Howard.
1
And what is the role and the position of Howard University in this scenario? Do they bear any responsibility? If you purchased a car for $60k and it failed to provide a means of transportation, you would work with the car dealer to get it resolved. But if you pay $200k to a school and are left underemployed, you are on your own. Something has to give here, otherwise the only job opportunities in America will be in the field of debt collection.
3
Must be somebody's fault, right? I don't think the author mentions what degree he pursued, his choice we must assume. Spend a fortune on a pricey sports car and then complain it's a death trap on the highway, is that your analogy? This piece is a promo for an upcoming book, so I guess he's chosen to be a writer, not a noticeably lucrative field -- especially for snarky, self-referential memoir-type titles such as his.
2
I missed the part where you assign a large share of the blame to Howard University (and many other schools), where it rightfully belongs. Colleges that are supposed to be centers of truth and enlightenment are themselves a huge part of the problem. They are happy to take the money.
9
Did you ever notice that the commencement speakers at high school and college graduations are usually prominent and successful people who most likely do not have student debt. Easy for them to say, go after your dreams and be all you can be. "You owe to yourself to fulfill your destiny" Great motivating speeches but don't give you a realistic look at your future path and the potholes in front of it. The lure of ivy league colleges and universities will give you a leg up on the competition and networking to be successful. Depends on the person.
I know most of my successful friends went to public colleges and universities. No stigma there. The Education "industrial complex" has gotten all the parents and kids bamboozled with the USNAWR college ratings, etc. I have a nephew with his wife in NJ took out their 401K money just to send their kid to a private high school (50K/yr) so he would have a better chance of getting into an Ivy league school. Didn't happen.
5
Capitalism is essentially incompatible with a "free" society, where all receive relatively equal opportunities for life. This is because capital itself is the most crucial opportunity that cannot be equal for all. That said, relatively fair societies would enable social mobility that somewhat compensate for this issue. The most crucial part of this social mobility is education.
What we are seeing here is what happens when education is part of the capitalist system. In contrast, there are countries in the world, also capitalist, where the more prestigious a school, the less students generally pay - because those schools are generally public. In countries such as China and India, most private schools are considered second tier and at the same time expensive.
That said, I am a big fan of the quality of American college education. It is generally very high. It's just that the quality of education does not seem to map to the reputation/ranking...and the reputation/ranking should should not have been directly related to price of the education. There are many disciplines in colleges today that will never pay for themselves. What happens when we run out of talents in those fields?
1
This article merely highlights a problem without offering a solution. None of us like paying off our student loans, but no one seems to propose a workable solution. Should loans only be offered for those majors that have a better chance of getting high paying jobs? If so, how will we hire qualified teachers or journalists? Should they simply limit the amount of loans given to each person? If so, wouldn't that shutout a lot of people from going to college and then make college only for those who can afford it without loans? Should student loans simply be forgiven for those who can't afford them? If so, what about those people who did eat spam and lived in poverty just to be able to make their payments? Are they unworthy of student loan forgiveness? Every solution seems to cause even more problems.
3
The situation with student loans is unconscionable. It is set up to the advantage of the banking and educational institutions, and to the detriment of less sophisticated students. There should be mandatory disclosure and financial advice to students. Colleges and universities with high rates of default should be cut off from the gravy train of student loans that cannot be paid back. Shame on our country for not properly addressing this student loan fiasco to better support education and students. These struggling students represent our future as a nation.
The cost of higher education has far outstripped that of inflation and young adults (and their parents, hopefully) are faced with a much greater fiscal challenge than those just a half generation prior. This is a shameful situation and major roadblock to the growth of an individual as well as that of the nation. However, anyone who can navigate their way into a prestigious school, including the quantitative component of the SAT entrance exam, should be quite capable of determining the future cost of their debt commitment.
2
Why did anyone ever think that extending massive amounts of credit to teenagers was a good idea? As easy money always does, it created a bubble - in this case an unsustainable runup in college costs, as the institutions absorbed the bounty.
8
It's incredible that most colleges require, at minimum, a 4.0 GPA and 1200 on the SATs, and yet somehow the bright youngsters who manage those impressive scores are getting into college unable to read fine print and believing anything advertisers tell them. How did they pass high school level math without understanding how compound interest works? What's worse, their parents don't even understand it enough to explain it to them; or do they just feel guilty that they weren't able to pay for it themselves, forcing their offspring to take the student loan in the first place? But that's the new sophistication: not believing in Santa Claus, but thinking money for college appears magically.
Well, I still that for every college graduate whose student loan is forgiven, there should be a homeowner whose mortgage is forgiven (and next time it should be me).
3
The high school educational system has some responsiblity fo teaching students to evaluate the academic and financial issues associated with going to college. Everyone needs those skills, very few need the ability to do advanced Calculus.
Fantastic article. Should be required reading for all high school juniors and their families (before the senior year frenzy kicks in). So true “All I knew was what I was told: College was the ticket to social mobility, and good students deserved to go to schools “.
By the grace of God, my parents paid for my college. By some magical trance, attending the University of California would satisfy my pursuit of status as an 18 year old, so common in America. I met an administrator who told me, you never pay for graduate school. And went to places that gave me scholarships. Nobody thinks debt will happen to them especially when doing something good like attending college.
1
In Mr. Arceneaux's case, it's a shame that he passed over the excellent UT Austin, and other fine schools in the Lone Star state, at half the cost of Howard.
When I was at Cornell, a new entry level BMW 2002 cost just under $8k and Ivy League tuition, fees, and R&B ran about $8K as well. Today, the entry level BMW is about $40K +/- and the Ivy League cost is about $45K +/- per year. (I ended up with a 3 year old SAAB for $3K. Heated seats too!).
So if everything, including wages, have gone up about 5X since the late 1970's, then a burdened student has only themselves to blame for borrowing money to attend college. It's not the fault of the banks nor politicians.
Perhaps college financing and basic personal financial classes should be a part of public school education? Then maybe we can all fill out IRS tax forms, plan for retirement, and complete other associated government forms too. Recently, a town where I own a vacation home invoked a bed tax for short term rentals. The instructions are 32 pages, lol.
1
I went to an Ivy league school and got a good education, went on to a doctrate and a post doc at another ILS and worked at something that really interested me. In those days schools were cheap and there was plenty of federal support for graduate studies in science so I never had to take any loans. I never cared much about saving but I don't think it really mattered because after I retired I squandered half my savings and got swindled out of the other half. Now I live on very inadequate Social Security stipend and am essentially a bum. But I am a happy bum because I can still work at what I love.
My advise to students today is to study what you love and borrow all you can and stay in school as long as possible. Then get a part time job and do what you love in your spare time and stiff the banks. This seems like a no brainer and I don't know why anyone would follow any other course.
2
Because it's unethical, self-indulgent and throws the burden of his debt onto others?
4
Or again you could get a good education and leave the country. This country deserves to have a good brain drain. It does not deserve to continue to exist as it is now.
1
As Gen X and now Millennials face decades of debt, we have, as a nation, lost generations of economic and intellectual strength.
After 20+ years of paying and no end in sight, with 3 economic meltdowns in our time, my husband and I have had no chance to save or buy a home. We are most certify not alone-- our generation has been crushed by the greed fo the one before us.
3
"Easy money" is a big temptation, and young people who succumb find the hard truth when the payments start. Parents and high schools need to do a better job of ensuring financial literacy. The "I don't have all minute!" culture aids and abets the easy-money trap, and while living in the moment is great for mindfulness practice, it's not so great if it means accruing debt that one will not be able to pay off.
I have been a lawyer for 20 years. In that time I bought a house opened a practice and my wife and I are raising two children. I still owe 20k on my loans down from 75k when I started. I hope to.have them paid off by the time my oldest starts college.
4.5 years to go
1
What kind of country have we become when we let the vaunted free market, which works well for some things, destroy our children when they try to do the most responsible and normal thing they should do and get a college education? Aside from the effect on their individual early lives, how does putting up such road blocks help our country prepare the next generation for the future? When a young person contemplates committing to a college education and possibly another 4 to 6 years in grad school, do they see incentives or major hurdles? Do we really want our children starting off their bright new lives with massive debt? Shouldn't sharing in the responsibility of ensuring fair access to and reasonably priced higher education be a core value of a forward-thinking society?
2
We bailed out Citibank, JP Morgan, and the Bank of America, and then our children take out education loans with higher interest rates and fewer loan protections than any company or homeowner does. How about zero interest education loans for students who maintain good grades and work once they're done? How about interest forgiveness for everyone already in the system? We have trillions to give away in tax cuts, and trillions more to add in spending: there is no excuse for not having solved this well-documented problem by now.
5
The banks making the student loans are for profit, so I am not surprised that they have little regard for the financial well being of students taking out the loans. However, I am appalled that recruiters and administrators at the colleges do not take more care in warning students about the dangers of too much student debt. I and my single minimum wage working mother were very naive in 1967 when we started incurring student debt to pay for my college. Luckily all but one year of my loans were Federal loans and my total debt in 1971 after four years of college was only about 2500. Back then that was the price of an inexpensive car. My advice to current students is only acquire Federal loans not private ones, and never accrue more debt than the price of a inexpensive car (about $22,000).
Only 20% of eligible voters ages 18 to 29 actually vote in off-year (non-presidential) elections. If another 60% voted their interests, they wouldn't need any student loans. They don't vote for Congress because they don't know what Congress will do to them unless they vote. It's as simple as that.
1
I work with a young woman in her early 30s. She was from a family that had no experience in going to college, but they had done well for themselves and raised her to be bright and ambitious. She finished her Masters in International Development just in time to graduate into the recession of 2008. 10 years later she has aging degrees that will never get her into the work area in which she had hoped to be, and nearly half her take-home pay is swallowed-up by student loan payments that she will be making for another 15 years. She had this dream, a realistic one, and it has ruined her life.
3
People need to accept that they are simply not rich enough to attend to college or university on their own. Their intelligence levels aren't that great either. Smart people can find ways to be successful whether or not they have formal education. There is no guarantee that a bachelor's degree will provide a good paying job. There are so many people without degrees that are doing just fine. You have to have an interest in business or making money in order to make money from those degrees. I've never heard of Howard university but I'm sure the state school I went to is just as fine. I got so much grants and scholarships i didn't need loans. So I'm working at a low paying job but I'm not too worried because I have no loans and no debt. I don't spend on silly things so my savings account keeps growing. People always say that I should use my degree and get a job that pays more money but those jobs are not that interesting and can be much more stressful than this one I have which actually comes with good benefits. People need to rethink the cost and benefits of getting that dream job and whether or not it's worth the effort. I'm not too hungry for personal accomplishments and shiny material possessions so I don't really need that much money. For people with expensive desires, they'll never be happy even while being a millionaire.
The US should have low to no cost higher education which we did for many years in many states. We also had Federal Land Grant universities. The UC system, SUNY, CCNY etc all produced qualified graduates. That was until the anti-tax crowd bamboozled people and let them think they could have theirs while not investing in the future of the country. An investment we all benefit from. Germany has an excellent model on how to do this that includes trade and technical training as not everyone wants to go to college. As for the moral hazard crowd they are simply repeating tired and worn Calvinist views. Education at all levels is a national investment. But hey give the rich and profit heavy corporations a tax cut, bail out irresponsible banks or use those funds to address the educational and student loan problem.
1
The US is becoming a feudal state, where the working class is indentured to a small privileged minority. Any excess income is captured by rent-seeking corporations or taxed away by the government. And the main road out of serfdom, higher education, has been made into a debt trap. Of course the bankruptcy code no longer allows student loans to be cancelled. It is our version of debtors prison.
But is doesn't matter, as long as the 1% keep getting richer. After all, they are the only ones who create value, they are blessed with divine rights.
2
I will be paying my federal student loans until I die. Luckily they are "income driven" but still I am paying over $700 per month which does not even pay the interest. I only took out around $60,000 in loans for graduate and law school (I took out NO LOANS for undergraduate). I now owe over 3x as much as I borrowed despite sending hundreds of dollars per month for a over a decade.
There is a provision to get your federal student loans forgiven after 20 or 25 years but that income is taxable. Meaning that at some point I would be expected to pay tax on like $200,000.
The good news is that with the "income driven" plan as my income decreases at or near retirement then my payments will decrease as well.
But understand this and have no illusions - I took out about $60,000 in loans and after paying more than $60,000 in a very low (even a zero interest environment) I owe 3x what I took out 20 years ago.
I feel like I took out a $60,000 loan from a loan shark. I will pay this loan back at least twice in my lifetime and die owing much, much more than I ever took out. Why do student loans have interest rates so much higher than the Fed Rate (which has been basically zero for ten years)?
At least my loans are federal unlike the private loans in the article. I feel so much for the author...
1
Crushing student debt is the result of 4 factors:
1. Colleges sit on their tax-sheltered endowments and don’t give grants to upper middle class kids, unless your parents are divorced and one gets less than $75,000 in alimony. Ivy League schools allow you to attend tuition free if your parent/parents make less than $75,000 without regard to SAT scores or GPAs. We need more merit-based scholarships.
2. Upper middle class parents are taxed to death and can’t save up for college for their kids.
3. College regents raise tuition to fund retired professors’ retirement and other legacies costs, with no regard for current students. There are no checks and balances. Is a liberal arts BA really worth $250,000?
4. College kids eat out 7 days a week now, while years ago their parents cooked on hot plates in their dorm rooms.
2
Old enough to vote but not, apparently, old enough to understand the consequences of loan obligations.
5
Go to the Levy Institute of Economics at Bard College and look at the new study of how the government could cancel all student loan debt for about the amount of increase in the national debt incurred by the recent tax cuts for the rich -- and how the economy would benefit in many ways. It is titled "The Macroeconomic Effects of Student Debt Cancellation."
2
Mr. Arceneaux was free to choose Howard U., another school or no school. It is clear from this story that Howard U. either failed to educate him about virtues like temperance, prudence, courage and justice or he was resistant to learning them. It is not the responsibility of any university, a bank or the government to educate applicants about the obligation of paying off their loans with future money. Knowledge about repaying a loan is a personal responsibility of the one who receives the benefit. No one would ever complain why they had to pay the cashier at a McDonald's after ordering lunch. If no one paid their bill at McD's, it would be very crowded for a short time but cease to operate very soon.
I am a university professor. The future of American High. Ed. will not be found in speaking about "my student loan oppressors". Debts for personal benefits must be paid. Success will be found by prudent applicants to college and graduates making responsible choices. Using a McDonald's image again, if hamburgers at McD's each cost $25.00 few people would buy them. McD's would be forced to close. A simple cost - benefit analysis explains why at McD's is successful. Consumers and purveyors of education will be affected in dramatic ways because the situation cannot continue any more than a $25 price tag on a McD's hamburger. I hope that some day Mr. Aceneaux will write about virtues that he has learned in life and how learning about them he finds life is more joyful.
5
If the United States were civilized, like the countries of Western Europe, higher education would be free or low cost. Also, were we like Western Europe, skilled trades would be esteemed. Free or low-cost opportunities for learning skilled trades would be abundant and, thus, not everyone would feel compelled to go to college.
1
In some circumstances, debt forgiveness is one of the inducements for enlistment in the National Guard or Reserves.
1
This is why every high school should require a basic personal finance course to graduate. It is astounding that we do not do that.
1
The real story of just about everything wrong with the US education system is that the decisions are all demand driven, and the demanders are ill-informed 17-year old like the author of this article, or ill-informed 17-year olds with some means who are more impressed with fancy gyms and activities than they are with class size. (You doubt me, check out the rec center gym at the University of Colorado, and then ask about history classroom space.)
The author here and his mom were unsophisticated consumers, and yeah, they were exploited because they were sold a bill of goods that wasn't quite true, and had no resources to learn just how bad the product was until it was too late.
Unlike the author's mom, I have a PhD from a top program. I am as sophisticated about education shopping as I could possibly be and am guiding my son to a college choice. I have found it harder to find out real meaningful facts about the programs the schools offer (attrition rates in my son's expected field, grade distributions in physics classes, attrition policies) than I found it to find out meaningful facts about my last used car.
We are Americans, and our economy has always been consumer driven, but we are doing kids (and taxpayers who offset those loans) a serious disservice.
6
As a college professor I see many students who waste their time and opportunities. A state school that is affordable will get you to the next step without onerous debt. Too many think everyone should go to college when there are other options. The private schools are businesses...they got out of education a long time ago now offering the gourmet cafe, the Toll Bros. dorm, and the lifestyle of the someday I’ll be rich and famous...
3
I’ve always said this: if you go to college, you should pay for it. However, we need to do a better job of teaching financial responsibility in high school.
First, excessive public financial aid and public dollars for universities is not fair. It’s not fair to the taxpayers who have to pay for someone else’s education. If you want a service, pay for it! You are not entitled to education at taxpayer expense.
Therefore, we need to teach financial responsibility in schools. Students need to understand how interest works, how to analyze cost-benefit decisions, and how to responsibly borrow money.
I came out of law school at a time when that profession had gone on a nearly national hiring freeze and even the government positions like prosecutors and public defenders were only offering unpaid internships. Because of the 8, 7, and 6 percent interest rates of student loans I took out to go to school (it was my dream, my parents raised me to believe that I should do what I have to to make it happen, I believed my school’s lies about employment stats for graduates), I left school with nearly $150,000 in debt that only grew with each month of deferment I used.
That was 5 years ago. I’ve barely made a dent in the overall amount of debt. I can’t refinance like someone with a mortgage or a business loan. I cannot make the situation more bearable. I pay every month, even if it leaves me unable to put gas in my car.
Like clockwork, I spend at least one week every month suicidally depressed. I have no co-signers, no assets, and the companies wouldn’t be able to go after my parents. Five years with no reason to be hopeful that my future will be my own any time soon. I don’t know if I will have the energy to make it through year six. I wouldn’t be the first person to kill themselves over student debt and how hopeless it is to live with. I certainly wouldn’t be the last.
And not a single voice in D.C. is doing anything about it.
3
"And I have to be good to myself." This is a concept that seems to be a sub-title to the label "millennial". Every other generation in the history of civilization (I'm guessing) has focused on "being good to others" (Golden Rule, and that sort of thing.) It's often followed up by "I deserve it."
Older generations ask you: Why?
3
Most of the commenters here enjoy "piling on" the author rather than addressing the issue.
When I attended college (1977-1981), my tuition was $7500 a year--steep, but still manageable. I finished with $3500 in federal student loans--which I paid off two years later with gifts from my wedding. Today, tuition for my alma mater is $48,000 per year--almost a 700% increase in 37 years, far above the rate of inflation.
Fast forward to the 21st Century. My son and my daughter went to college. Their scholarships and grants didn't cover all their college costs. So they took out federal loans. I took out PLUS loans. What real choice did we have? My children needed to go to college. Employers won't even LOOK at you unless you have a degree.
In 2008, I lost my job at the beginning of the Great Recession. I was unable to find another job. So I went back to school. It took me three years to get my teaching certification, and another three years to earn a Masters degree. If not for student loans and on-campus housing, I would have died from starvation or homelessness. My choices were limited, but I'm proud of what I accomplished at age 56.
Today, I teach English at a Roman Catholic high school. It doesn't pay as well as public school, but I love my students and I love my work. I have roughly $180,000 in student and PLUS loans, and I have no idea how I will pay them. It's so easy to point fingers at "reckless students." It's so hard to find a real, practical solution.
3
The first 18 years of your life you are told you have to go to college and when you graduate you will have a great, high paying job - that's why you go. So of course when you are 18 taking on the debt to go to college looks like the obvious, smart choice. But then maybe you don't get that high paying job everyone told you was guaranteed, but you have the equivalent of a car payment or more every month to start paying. When I graduated and had to start paying my loans (before ACA/Obamacare, whatever you want to call it) I eventually had health insurance but had to pay the equivalent of another car payment every month for my to treat my preexisting condition that wasn't covered. Still trying to pay for both.
The crushing loan repayments also lead to other hidden problems. Inability to get any other type of finance as well as crushing interest repayments is making graduates ability of reaching a comfortable middle class (or beyond) lifestyle unattainable.
Is it also any wonder that new business and start up creation is at an all time low in amongst those under 40? Nobody has the time or freedom anymore of striking out on their own to pursue the next big idea or industry. Not least while you've got the financiers henchman breathing down your neck every week for the next payment. Is this what freedom looks like in America these days?
1
While I understand there are difficulties for those who don't come from a family of college graduates, do any high school students today ever do a little research on their own? Like using Google, for instance. I'm still waiting to hear about all the millennials who never learned how to text or tweet because no one in their family had ever used social media.
1
We owe 515,000 on our mortgage. It is not soul crushing. It is a mortgage and allows us to house our family.
I am not allowed to get out of the mortgage if a number of Congressman simply 'forgive the loan' as some folks might argue for student loan holders.
Getting into debt and then out of debt is one of the 'learning lessons' of being an adult. We borrowed $20,000 for my graduate school and paid it off over 10 years - every month for 120 months.
2
Even if nobody cares about the personal toll of lifelong debt incurred by teenagers who can borrow hundreds of thousands of dollars with a click or a pen stroke but can't drink legally, what a drag on economic growth this vast debt load is.
All to enrich lenders and university administrators (not to mention the for-profit education industry which couldn't exist a day without government support), when most other countries offer higher education at no cost, as a measure of civilization. A fair number even pay their students to go to school.
But us? Never! According to our masters, the ones who compete for corporate America's dollars so as to run for public office, lifelong debt is good for other people's souls. Or, at least, good for their campaign contributors.
1
I went to a private school for my first degree, and then state supported schools for my masters and PhD. I got lucky with an examination I took in high school and got a scholarship that paid my tuition for 5 years at a private Michigan college in the late 70s- early 80s. I had a teaching assistantship in graduate school that paid tuition and a very small stipend. I got no help for the PhD. Paying the football coach $2 million a year was more important in Wisconsin than helping PhD students with a 4.0 gpa. Times were changing. My student loans were at 3.5% and guaranteed by the US government. My son's student loans were at 10% and may as well have been taken out with a credit card (on which you could probably default, come to think of it...). While I was a dissertator my tuition increased by 300%. I cannot comprehend why the government does not understand the boost to this country's economy, prestige, leadership, overall advancement and general well-being that helping people through college would give us. Just look at what happened to our country as a result of the GI Bill after WW2! Instead our "leaders" do everything they can to cast academia in a vile light. The state of Texas board of education even made it against state policy to teach children to think critically!! Going to college was the best thing that ever happened to me! It helped me earn a life that I would never have had otherwise.
5
So, you're worthy of expensive private schools, but can't do math.
So, its a downgrade (is it really?) to attend community college first, then a state school. Perhaps your gap year is a job to make some tuition money first. We can pass the blame around. You, the system, your parents, but the answer is the same every time.
College is nice, but 4 years in a row right out of high school is a privilege.
There are many other ways to achieve the goal.
When I graduated from high school and went to Columbia University in 1958, tuition was about $1000 and a New York State Regents science scholarship paid almost $900 per year. State scholarships, and especially the state scholarships that were not only for science majors and paid a little less, were available to a sizable percentage of high school graduates in New York State. If I had gone to Brooklyn College or to City College, I would have paid no tuition. I lived at home in Brooklyn, and my parents could pay the rest of my tuition.
Unfortunately, tuition has gone up way faster than inflation, the City University now charges tuition, and state scholarships are long gone. The mentality now is large tax cuts for the rich and very minimal support from government for students. Students going to graduate school can just about forget about support other than from being teaching assistants (and tuition waiver for teaching assistants just barely survived not being taxed when the latest ridiculous tax legislation was finalized).
In the long run, it will cost our economy hugely as the supply of well educated individuals declines, especially as the ratio of retirees to working people keeps going down as our population ages. It is a tragedy.
3
I once took out upwards of 140k in student debt and had it paid off in 3 years. It wasn't that difficult.
It is time to look at college education for what it really is; realistically unattainable for most people.
Student loans have always been a trap, that is why they always needed to be “sold” by persuasive providers with the schools themselves acting as wingmen.
Is this what we want a college education to be? Is this who we want to be as a people?
1
Move to a civilized country. Tuition costs in France: 150 to 900 Euros per term. Tuition costs in Germany: free. Tuition costs in England: 9000 Euros a year maximum. These are countries that care about their young people.
1
You went to college so I will assume you know how to vote.
If you are voting and you're choosing to vote Republican then off with you. I have no patience with anyone who votes to cut off their own nose to spite their face. (If you can comprehend that phrasing then you may need to ask yourself what exactly did you learn at that very important social media program called college where a substantial subscription is mandatory.
My son and daughter-through-marriage both put themselves through college. I recall my son telling me: "Mom, if I don't go to Embry-Riddle University there's very little chance I will ever be a professional pilot." But I couldn't co-sign and he couldn't get a loan for $22K a semester. So he went to University of Texas to earn his bachelor's degree. But before he started college he joined the Texas Air Guard. He worked daily while he when to college, and then became active in the guard as a crew chief. He took the tests and continued his education. He became a fighter pilot and he worked his back end off for it while still paying for his student loans. He will be retiring from the guards in a couple of years and from there he will move to a private job with a private carrier. In all of this time I have heard him complain only once about his school debt and that may be because I asked him: Did you get what you expected to get with your college degree? He responded with a yes. Well, then. I supposedly said, What is it that you feel short changed on?
1
The only Fed loan that works is the Public Loan Forgiveness Program. Ten years if you work for a school or not for profit. Consolidate your debt, make one payment per month based on 10% of your net income for 10 years and you're done.
This 10 year repayment system needs to be expanded to other types of employment so other's with student loan debt can repay them in a timely manner.
2
How about turning the discussion to
- WHY has college become so expensive?
Why Does a college Chancellor make $750K a year?
Why Does an AD make $500K a year
Why is the cost of college so much more affordable in other industrialized nations?
6
I went to an Ivy League college for undergrad and four years later another Ivy League school for an MBA. I took loans out and repaid them ahead of schedule. How did I do this?
1. I choose Cornell over other Ivy League schools due to cheaper tuition for in state residents in several “state” colleges at Cornell. Maybe I “deserved” to attend Harvard or Yale but as a 17 year old I was keenly aware of the significantly higher costs that would entail and choose a more financially manageable path.
2. While at Cornell I held part time positions working 20 hours a week to make (not borrow) spending money at school - again sacrificing a bit to ensure a more financially manageable path. Also I graduated with honors so I don’t by the argument that part time work impedes learning.
3. While at college I didn’t own a car, eat out much, take vacations and worked summers. Again sacrificing a bit to ensure a more financially manageable path.
4. After college I took a job, bought a cheap used car, lived frugally and repaid all my loans in 4 years. Again sacrificing a bit to ensure a more financially manageable path.
5. While I business school I again worked part time, lived frugally (limited eating out and vacations). Graduated in top 3. Again sacrificing a bit to ensure a more financially manageable path.
6. After business school I sacrificed lifestyle for several years to maximize the cash flow to repay the loans in advance. I paid them all off ahead of time.
7
You might want to attack Trump but it was President Bill Clinton who took away the ability to include student debt in a bankruptcy.
I had a heart attack and was unable to sleep while recovering after surgery. The nurse asked why I was so distressed, that the surgery had gone well. I couldn't tell her that all I was thinking about was my student loan debt and how this was going to make it more difficult to make my payments. I laid there for hours worried and wondering if maybe I should have died.
I remembered a debt collector who had told me, when I had fallen behind on payments, that I had two choices on my student loans - do what he demanded immediately or die.
I was homeless when I was young. My mother struggled to keep our family together. I worked hard, earned good grades, worked from the time I was 12, and, thanks to my mother, always hoped for a better day.
The dream for me has ended. Perhaps I just never had the right stuff. I never got "the job". I don't have the money to dress for success. I talk a little funny. I never had the right network of friends. Student loan debt has crushed me and there is no way out from years under the heavy burden. For me, it was an awful choice. Perhaps the years of stress will lead to a second heart attack and this time they will just let me rest in peace.
3
For everyone saying, "Well, it's your fault for going to such an expensive school/taking out so much in loans," you must not know anyone like me, who did go to one of those "low-cost state schools" and is still struggling to pay back their much more modest loans. I didn't really have a choice about those loans either: it was take out loans and get to work in the field that I'm good at and most suited for, or don't take out loans and work minimum wage for years and be miserable even if I got promoted. What I didn't realize is how far salaries would still be depressed and how high inflation and rent prices would rise by the time I finished grad school. But even in hindsight, I'm still not sure if I had any other options that would have panned out better. I can't imagine owing $800+ a month in loans when I can hardly afford to cover the $220 I owe in federal loans--and that payment hardly makes a dent in what I actually owe after the interest takes its bite. And then people have the gall to wonder why millenialls aren't buying diamonds, why they spend less eating out and also spend less on groceries, why they aren't buying disposable napkins, etc. Just take a look around and see the people my age and younger absolutely drowning in debt!
2
I've worked with international students applying to college- students who could afford to pay for valuable information on school choice and the admissions process, and access to this information makes a BIG difference. There are too few resources for students navigating the college admissions process by themselves, and virtually none for high schoolers trying to decipher their options for taking out a significant loan, or weighing the decision of paying more for a better education. And recruiters do manipulate students' "pain points." Plenty of comments chastising the folly of high school seniors. Were you the paragon of financial wisdom when you were seventeen? These students are trying to build a future for themselves, and the "adults" are taking advantage of them.
3
A child of 17 or 18 can borrow hundreds of thousands of dollars but they are not mature enough to legally have a glass of wine. I think students need more protection from these student loan sharks.
As they are now, student loans have created a new kind of indentured servitude. Articles like this are helpful in creating the appropriate level of terror in the next generation. Best of luck to the author and all of the others who sit under a massive pile of inescapable debt.
And one more thing...
when your doctor owes a half a million dollars in education debt, do you really think they give you the best medical advice? Or do they give you the most profitable (from their standpoint) advice? There are many who suffer under the current system and you may be one of them even if you have not taken out student loan shark debt.
5
I went to a City University of NY (Queens College) in 1968. The tuition was $45 a semester. Tuition was raised to $63 and there student demonstrations and riots. I guess times have changed a bit since then.
2
I graduated around the same time as the author with a Ph.D. in engineering from a state university and am fortunate enough now that I can make my loan payment every month and also save for a home down-payment someday. The total loan amount was $45k though, much less than some of the figures I see mentioned by those graduating from private schools today.
We are graduating oceans of young people who are unable to purchase cars, buy homes or participate in the economy to the detriment of everyone who relies on that economy for their own well-being. There is a pronounced and poisonous form of extreme selfishness - an "every man for himself" dogma - that has percolated full-force to the surface of American society: education, health care, elder care, housing, you name it. This is a country that is in the process of cannibalizing itself in full view of the world.
6
Michael Arceneaux could have stayed in Texas to attend one of the excellent colleges there and even one that is in Houston. He did not have to incur so much debt by going to a private college out of state. Many students today go to colleges closer to home so that they do not end up paying back loans that are next impossible to repay. Hopefully his story is a wake call to students so that they do not end up in the same predicament that Mr. Arceneaux found himself in. By the way, he was lucky to be given a scholarship to so many schools. There are many students who pay full tuition for room and board without any scholarships whatsoever. He was very lucky and should count his good fortune for that lucky break.
1
As a single mom who graduated with my final postgraduate degree in 2005, I can totally relate to the employment issues, The truth is if you don't get a job aligned with your education quickly and capitalize on that in the first five years, the value of the degree is diminished. But, with a good education you can reinvent yourself. If I am lucky I will have my post graduate student loans paid off by age eighty. There is no way I will have a "comfortable retirement" and I will work until I drop, but I am making sure that my son does not incur any debt.
1
"Hope to get a good job with a decent wage" Why do Americans accept that only jobs with a college degree can pay well? What is wrong with every American, no matter what job, being able to live a quality life with good wages and 4 weeks paid vacation and retire with a aged pension? Take a good look at wages and working conditions in other nations.
3
Today student loan debt totals over $1.3 trillion. More than half is for grad school, medical school. etc.
How did we end up here?
Colleges selling their high cost tuition and the great opportunity. A society, parents, students, republicans and democrats, who failed to compare the cost of attending college to the wages that one may earn (published regularly by the Bureau of Labor Statistics by region of the country). Students who are not ready to attend college and take on responsibility.
But we believe in the right of individuals and as such cannot make such borrowers pass a test to show they know what they are getting into. Not sure how you solve the issue.
It seems in our country that we have forgot that when you borrow money, you need to plan to pay it back.
I borrowed a little money, stayed at home and worked 30 hours a week and got an accounting degree. All worked out fine.
It is a shame that there is not a "basic" 13to16 year" education that is provided free to students qualified for advanced education beyond high school. Our country would be the richer for educating our youth just as California provided for them years ago.
I was from a very poor family from the coal fields of Pennsylvania and now am 86. The US Army during the Korean War gave me the training to be a Medical Laboratory Technician. I was also provided with the GI Bill. While not as generous as the WWII GI Bill, it die allow me to complete college and enter the Medical Device Industry. After a number of years I rose to become Vice President of a world famous company in the microbiological field. I never could have done that without the aid of my government. I believe I paid my debt for this gift by my contribution of safe and effective products to patients over the years. Surely, there are millions of young folks who could do the same for our country if given the chance without being burdened by heavy financial loads.
3
The cost of university should be tied to what the average student can earn working summers and after school and 12-16 hrs a week during the university semester. Period.
This was my University experience that included a 4 year fully paid scholarship from the State of California.
What changed from the 70’s is that
campuses started looking like 5 star resorts, the number of administrative jobs for adults on campus expanded exponentially,
and technology exploded. My old
university is unrecognizable.
Universities raised billions from alumni but plowed the money into
infrastructure, not students. The State no longer matched costs with funding.
Australia does it differently. The cost for a year is less than a single semester at a UC campus. If you can’t pay now, you can pay it back interest free a little at a time when you start earning a salary when you start your job, through your annual tax form. One of my children took advantage of this for a master’s degree, but
all of them left Australia for a Bachelor’s degree and we paid out-of-state tuition for all of them.
The privatized student loan system
in the US actually depresses the economy because young people there are not setting up households and starting families like we did in the ‘70’s. California’s
small investment in me was wildly
successful for both of us.
Ironically, without coercion, one of my children chose my old, now flashy university, and reported that “ It looks great but the restrooms are filthy.”
1
Immediately after graduating, the author had monthly payments of $800 toward private debt and “several hundred dollars” ($300?) in federal government backed debt. So if the author can make just $13,200 more per year as a college graduate than as high school graduate earning a hourly wage, then the payoff will be worthwhile. That doesn’t sound implausible.
Frankly, students who took out similar levels of debt from third tier law schools, but cannot get law-related jobs, or graduates of culinary schools, who work as short-order cooks, are in far worse shape.
If the cost of 3rd level education wasn't so high, having shifty lenders and bad judgment calls by people wouldn't be so bad. Its the fact that they are so high and that the terms of the loans so obfuscated that explains why many people get into trouble. Especially those whose parents didn't navigate the system before them to offer some advise.
Why are costs so high?
Its because YOU don't count, as Humpty Trumpty supporters, some , may one day discover.
Majority People's news does not count: its normally not featured if they are student people who cannot afford any type of post-secondary training or education, or they resemble your own experience.
Majority People don't count if they are old people outliving their money.
People forming the Majority don't count if they are almost starving children.
One Half the People are People who don't count if they don't come up with the cash for quality health insurance in our fee for service rip-off system.
People don't count if they haven't a retirement plan that's adequate to their needs.
People who must choose between meds and even bad food, just do't count.
2
Kudos to the author for speaking up, eloquently and with candor. Much (most?) of this essay resonates with my experience as well. Student loan debt is epidemic, insidious, and unmitigated by the current governmental regime.
A student loan debtor, I, too, am still in repayment because loan officers pushed forbearance and deferment - acts that left me feeling even more hopeless and drove up my loan total - instead of the Income-Based Repayment Plan, which I finally learned about and am following now.
But it gets worse: after working in public service for 15 years, because of my forbearance and deferment history, I am ineligible for the “Public Service Loan Forgiveness (PSLF) Program [that] forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.”
I, we, are not alone. Millions of college students have been been served a vat of snake oil, choking and poisoning us, for the rest of our lives.
1
Many colleges are experiencing declining enrollments and will for the foreseeable future. Not the Harvards and Yales, but the smaller regional private schools that charge top dollar. My sense is that many parents and their kids are simply running a cost/benefit analysis and concluding that state schools and universities can often accomplish the same thing that an expensive school offers, usually for half the cost. Beyond that, 60-70k per year for what really amounts to perhaps 5 months of schooling is just ridiculous, except for the Harvards of this world. I graduated from BU (a decent and somewhat competitive school, then and now) in 1987 and my final year costs were around 15k, for everything but spending money. Given the rate of inflation from then to now, the same annual costs should by 30k, not the 65k they ask. Therein lies the issue, plain as day.
There's plenty of blame to go all around, and the issue definitely needs true, honest, and well meaning reformers to pay attention to it and find solutions. But, the author is not one of them, with his political agendas, which is clear from his references to Trump and "future president" Oprah. Trump had nothing to do with his problem. We may infer that he went to college during Obama years or earlier, and Oprah has nothing to do with the issue altogether. Oversight was great under other presidents and just going down under Trump now? This is not about politicians you like and don't like, it's something that affects everyone and for which everyone as part of the system is responsible. People like this author do a great disservice by sowing seeds of differences between people and not let us find common solutions.
1
The burden of crushing student loans is not new. Any recent grad, and certainly current students, had to be aware of the danger of taking on significant debt to go to the college of their choice. This is no different than people who continue to attend mediocre or poor law schools despite the lack of jobs. It is ostrich like behavior. You can’t say you weren’t warned, at this point.
Sure colleges and universities should make more effort to lower prices, but as long as they fill their classes, that won’t happen.
"I am a member of that class of college students that graduated into a financial crisis... I’ve come to accept that I’m simply doing the best that I can with the choices I made in earnest."
Like the author, I am a millennial with the Great Recession imprinted through my young adult experience. My student loans were accumulated soley through Medical School; worked over +30 hours a week in undergrad and received scholarships. Pre-medical school, I calculated my final debt as $190,000; not ideal, but manageable. A few things happened along the way outside of my control that bumped it up a hundred thousand dollars above that. For one, my Medical School rose tuition every year by thousands of dollars; what was I to do, switch Medical schools? 'Ha' to that notion. Interest rates shot up additionally, so some of my loans are at 6.9%. Finally, the Obama administration eliminated graduate subsidized loans the summer I entered school, meaning my loans accumulated interest while in school with no way to pay them back. Now almost thirty as a resident, I have no retirement, no assets, drive a 15 year old car, and have a $290000 debt. Everyday I awake too with a heavy conscious.
While I recognize these were my own choices, there is something to be said that no other developed country on Earth faces these issues. I recognize that I will be a doctor, and repayment will come eventually (likely in my forties), but the overall plight of my millennial generation is simply insane.
3
Yes, make sure every kid is educated as to the cost and life-implications of borrowing money to go to college. Fine.
More importantly, stop the near-criminality of the cost. No one has come close to offering a cogent explanation as to why my generation (b. 1952) accrued so little debt while young people in the last twenty years effectively take out a mortgage to go to college. And they don't get the house.
There are reasons for this obscenity. No one wants to address them -- and don't buy "it's just inflation," etc. The people of my generation that feed off that cost -- professors, and particularly administrators, credit facilities -- will all claim rising cost is inevitable. If you believe that, there is a bridge in Brooklyn I'd like to sell you.
1
While this is a well-written description of the result of taking out such loans for college, it's also a warning about the nsf choices and wrong reasons for getting these loans in the first place.
Had the author pursued a career with a lucrative income potential, then $800/month wouldn't be as much of a burden as it is for a freelance writer who covers Beyonce. Perhaps his upcoming book release will help with the payments, or President Oprah will forgive the loans. Maybe there are still well-closeted politicians still available.
I graduated from medical school with 300k (very common) in loans at an interest rate of 6-7%. In order to pay off my loans by the time I'm 50 I will have to pay 3-4k per month. It is ridiculous that someone who is not risky to loan money to should have such high interest rates given to them on a government loan. This money is guaranteed to get paid back as all doctors have significant job security, we should get money at lower interest rates. Why do those who get frivolous degrees with low income potential and low job prospects get the same interest on loans as medical students get? It is hard enough to be responsible for other people's lives on a daily basis, giving up the greater portion of your 20's/30's to training with long hours away from family and friends, but to also be paying a large portion of your salary on loans is soul crushing after working so hard. Something needs to change, there is a reason we have a doctor shortage in this country.
Well, thank goodness today's smart phones provide for a block call function. Kitchen phones of yesteryear only allowed you to refuse to take the call, but there was still the nasty voicemail waiting for you whenever you did decide to wade through your messages to root out the hated debt collectors.
But that only provides one with a temporary avoidance of the problem. The debt remains whether the choice is made to engage with the debt collector or not. The real problem, as you point out, is the predatory nature of the for-profit student loan industry.
I'm glad that, thus far, I've managed to talk my daughter into the community college option. But that will only buy her (us) two years or so before the switch to the far more expensive state or private university has to be considered. At that time she (we) will be forced to reckon with the huge -- and grossly overvalued -- price of a college education. This, mostly so that she (we) can pay for expensive athletic programs, stadiums, coaches' salaries, etc., many of which she (we) will most certainly not even have much to do with.
For the time being, however, the savings allow me to direct her toward beginning some small investments in a stock portfolio -- five or ten dividend-paying stocks that will hopefully provide a foundation for a lifetime of future savings. How every kid could but invest that $50k or $100k cost of a college education in a worthy stock porfolio and pay cash for community college instead.
What many student loan borrowers do not realize is that if they do not make their payments, INTEREST will still continue to accrue, and gradually be added onto the principal portion of loan, which will make the amount of interest due even larger, and so on and so on. Don't dig yourself an even deeper hole. You are better off to borrow money elsewhere (if you still have good credit, borrow as much unsecured debt as you can), payoff all your student loans, and THEN declare bankruptcy. At least then all your other debt will be discharged in bankruptcy. Follow the example of POTUS, who TWICE declared bankruptcy.
Wow. What a totally unethical suggestion. Follow the example of a grifter whose bankruptcies and shady dealings have in turn bankrupted many a blameless subcontractor and family-owned business. That'll help.
What degree did you graduate with, Michael? You articulate so well what and how you feel, is why I ask.
If people, having read your article, begin to question not just the merits of college, but also relative merits of majors and colleges, something good might emerge.
Most majors currently offered by non-elite institutions (such as English Lit or Social Work) should be restricted to independently wealthy. I hear sages go on about following dreams of being ballet dancers, TV personalities, movie stars, sports figures, plain rich. They are lying to you.
My 18-year old's passion (a few years ago) was Facebook and Twitter, and a gross dispassion for "hard stuff" like science and math, like philosophy and logic. Her idea of college then: have a great time, hang out, party, take easy courses, and graduate with a BA in Modern American (I.e., I have skills necessary for living in my basement only).
After agony, drama, tears, tantrums - she is now pursuing engineering, and is likely to go on to grad school in engineering. She will repay her loans - no problem.
I get that some Americans made bad choices.
But why should taxpayers repay your loans, or lawmakers change the law for you to default?
I don't care for Trump, but how can he - or anyone - solve your problem?
Particularly when your generation does not vote nor participate in the political process. You seem to want the benefits of everything, and the costs of nothing. Thank you for helping out China.
8
For those of you who are so quick to blame the student, I really, really hope that you do a reality check. Higher education in this country has become a competitive business, and colleges and lending institutions heavily recruit students to benefit themselves--not society, not the students, but themselves. Every person who has ever been scammed (and I'm assuming, based on the last presidential election, that it's a huge percentage of the population) should show a little sympathy to these students who bought the argument that a college degree was worth the debt and then signed their financial freedom away.
I have taught in college for more than thirty years. While most faculty try to fight a system that has become almost as corrupt as Wall Street of the early 2000s (and beyond, I presume), we are faced daily with the tell-tale signs of exploitation: overcrowded classrooms; quick-fix tutoring plans; 'free-lunch' entry programs and open admission; lowering standards; cheapened goals. That's not to mention the outright fraud of 'data-driven decision making' that manipulates data collection and analysis to achieve financial goals.
I don't want to admit that I now work in a profession that seems to do as much exploitation as it does education, but unfortunately--no matter how hard I try not to--I keep witnessing, over and over, experiences of a vulnerable population that, once again, has been fleeced by an often ruthless and greedy power structure. We're all to blame.
It seems one of the problems here is that financial institutions have no incentive to help high school seniors and college students understand and appreciate the ramifications of debt burden: What are your payments going to be, and for how long? What is your earning potential, and what is the likelihood that you will make more than the mean salary?
In fact, the financial institutions have every incentive to obfuscate and bury the real economic and financial consequences, particularly because they know full well the students can never discharge the debts in bankruptcy. And in the event of default, why there is always the co-signer to hound.
Financial institutions should be required to make full and transparent disclosures of all these issues, among others. Right now, they are as rapacious as payday lenders. It is repugnant that we treat our next generation like this. WE ARE crushing the souls of the next next Einsteins.
A certain family member of mine (not one of my kids) after high school was convinced she had to to attend a small, intimate, private New England college no matter what the cost. Now keep in mind that her parents were divorced. Her father, a blue collar worker (making decent money) saw no value in going to college and refused to help out at all with her tuition. Her mother was in no financial shape to offer up any financial help. So the answer was loans, lots of loans. Some federally subsidized, some private loans (which accrue interest from day one). Well the small New England college thing didn't quite live up to expectations, so after one year she transfers to a local (another private college) school and moves. As expected, she lost a certain number of credits in the transfer. So after three years of college she gets her Associates in Nursing (a 2 year degree) and racks up some $80k in student loans (an amount you should probably have graduated with a Bachelors). Her private loans ($52k) had already accumulated $8k in interest by the time she graduated. Her mother had no clue what she was signing and the college kid was totally oblivious to the amount she was was racking up. Anyway, we (wife and I) sat down with the college kid and worked up the numbers. We offered to pay off her private loans ($60k) and in return she would pay us back with a 0% interest loan. The federal loans were on her.
Let's pretend that we can understand your initial naive choice of a 'fancy school' to follow your heart's desire of an Arts degree.
That does not excuse three wilful years of not working; taking out increasingly large loans; and never speaking to the plentiful financial aid workers at your college that in my experience spend their days waiting for a student to come in for a modicum of advice and counselling.
And - just in passing - everyone pretty much knows now that pursuing a $100K debt for an arts degree is probably a bad strategy - so we can see the ends of these articles.
1
Parents co-sign the private loans for the expensive schools. What are they thinking? I cannot feel sorry for the middle and upper middle class families who do this. I feel sorry for financially struggling students who can barely afford their state’s public colleges.
So many students want a designer education. They want a school with name recognition. They are taught to disdain community colleges and state schools. In reality, the education offered at these schools is top notch. Very few professions reward designer educations, anyway. A college graduate with minimal debt has the freedom to pursue her dreams. If you are smart enough to gain entrance to a prestigious school you should be smart enough to realize that a 100,000 philosophy degree will never be worth it. If you can't afford a Mercedes (and don't want to work inside a building to pay for it) buy a nice Toyota. You'll be happier in three long run.
1
OK, here is some advice:
(1) Live modestly while in college. An apartment shared with 3 other people will probably be easier to afford than a dorm room. You probably can get by without a car, especially as a freshman or sophomore. If you buy a meal plan, use it and avoid eating out. Look for used text books when you can.
(2) Work a few hours a week while you're in school. I don't advocate working more than 10 hours a week, as it can interfere with classwork.
(3) Work during the summer. You should be able to make a few thousand dollars over the summer. Stay at home if you can - it'll save you rent.
(4) Take an extra class when you can. This includes taking a class during the summer at a local college and transferring the credits. You may be able to finish a semester early.
(5) Limit how much you borrow, especially during your freshman and sophomore years. Lots of people never finish college. The only thing worse than graduating with lots of debt is NOT graduating with lots of debt.
(6) Be realistic about your profession of choice. If you want to be a journalist, or school teacher, or social worker, you may need to borrow less than if you are going to be a physician or engineer.
Good luck with your book. I'm sorry you are feeling stressed about your student loans. It does seem like you got a good education at Howard.
Those pesky loans are sharks in disguise, to be honored till death do us part. One more reason to push for 'free' universal higher education...and push the private loan 'oppressors' out of business. Your predicament, if we can still call it such, is not infrequent, as we tend to count the money before we can get hold of it, a swampy terrain at best. Insofar your own future, soon to have a published book (if successful), the loans may not see the light of day for much longer. By then, do not worry, as other headaches may arise and prevent boredom from installing in your station, as life will remain bittersweet at best, full of surprises, and even great success if serendipity does it's thing, Oprah and Beyonce notwithstanding.
The math behind loans is simple 1 plus the interest rate (3 percent = 1.03) to the number of years power 1+i^n. Figure out how much you will owe and conditions, read fine print.
Look at the average salary's of the major you are taking after college these are normally online. If the math works out you are good to go. If its unreasonable, find other options or major in something else.
Student loans, the cost of private college etc is rather unreasonable/poorly governed and/or not existent, only two lenders still offer private loans. The system is inefficient and broken.
However some basic math and practical decisions such as don't major in psychology (no.1 major in america, one of the lowest average salary's of any major) can go a long way.
P.S. Our economy seriously needs more engineers and doctors.
Ever heard of "caveat emptor = buyer beware"? That is the 1st step of being a co-equal adult. Yes, some have it easier than others, but mistakes are mistakes--and they are not to be whined about such as here. A word of advice to all, including myself: you chose it, accept your choices (and their implications), learn from it and change, or don't. And don't waste your time throwing stones at my good luck. I have made plenty of LARGE economic mistakes that I have also had to/did pay very painfully for and over long periods of time, just like you, but sans the public protest. More humility, please. HRS
The story of a generation. Sad.
What I really want to know if what you would have done differently given the information and life experience you have today.
You can make the same argument for overpriced clothes, cars, food, housing, etc. in a free society there are lots of ways to spend money you don’t have at exorbitant prices.
College at any cost has clearly been taken to the “any cost” extreme by colleges who pad every amenity rather than save the Benjamin.
We’ve seen this makes no sense. And yet when Peter thiel says college is not necessarily a good investment of time and money for all we see an outcry. When people say vocational schools and trade schools and apprenticeships are paths to get to 100k jobs the college at all costs crows cry foul.
Insanity repeatedly hits us in bubbles. Most of success in this life appears to be tuning out the generic platitudes and social decision making and figuring out what it is you actually want (and doing that).
What this author misses is that the fear is driven by defaults slave to conformity and salesmanship - they’re already bought in.
If you didn't understand debt, repayments and a household budget then you weren't college material.
The best thing you can do now is to tell every high school student you meet that they have to repay what they borrow and that task is pretty hard if they don't buckle down and take the difficult courses. Maybe their dream of playing the flute would be better pursued in an amateur orchestra while doing engineering work during the day.
2
I recall a time in the 1960s when college students were considered to be our future. Now, they are just another commodity -- cash cows if it were -- for colleges and universities with bloated administrations and huge tuitions and fees. Especially concerning is the cost of going to a land-grant university these days. These institutions were first the means to avoid starving to death on farms and then be the means to an educated middle class in the USA. Now it looks like we will have millions of young folk severely limited in their financial well-being and by extension to our society. Another example of our short-sighted economic philosophy.
Most loan companies don’t maintain the right paperwork. Ask the company to send you a copy of the documents you signed. If they don’t have it, it will be tough for them to prove that you took out loans with them.
1
I came from a working class family and I was only a "C" student, so I knew I would never be a doctor or lawyer or have that 30 year, gray flannel suit career that ended with a gold watch and a pension.
I decided to make it up on the cost side, not the earning side, so I took advantage of the City University of New York. That meant no "college experience." No keggers. No Saturday football games. No sneaking girls in and out of the dorm. Also, no tuition.
I took the same subway that I took when I was in high school. I lived in my parent's basement, just like high school. Same working class neighborhood, just like high school.
My liberal arts degree, earned in the customary 4 years, did little for me at the bottom of the 1974 recession. I wound up taking a job as a fast food restaurant manager.
But, I had no debt. Zero. Zilch. Nada. I worked part time during the year and full time in the summer for incidental expenses.
My mom let me live in her house, rent free, saying it was her contribution to my college education.
Oh, and that fast food manager job? Within a year I was earning the equivalent in today's dollars of $55,000 per year. A 22 year old kid.
Want to retire a millionaire? Do it on the cost side. Not the income side.
That way, YOU are in control.
This is advertised constantly as a "consumer society" and "buyer beware" is the first thing to keep in mind anytime there is a DOLLAR involved.
Words to live by:
"In God we Trust - all others must pay in cash."
You can wire transfer me $100,000.00 for that information. It will be worth it going forward in life - if you remember and make use of it.
They did. They do. They will.
1
For those smugly giving advice to "work yourself through college like I did" are living in a fantasy land. It was possible 30-40 years ago but not anymore due to massive increase in costs. May as well suggest that they go back in time and be born wealthy.
Oh gosh, the author got the opportunity to attend a fantastic school and study in a field that he is passionate about. It's too bad he didn't get a pony when he graduated, but reading this article makes 2 things clear to me:
1. High schools need to do a better job of teaching kids that there's no such thing as a free lunch. You borrow money, you have to pay it back, with interest. And, thanks to the GOP being derelict when it comes to growing the deficit, you can bet that interest rates are going to head higher in the coming years.
2. Not everyone is cut out for college. As the author points out, too many kids are being taught that a college education is "the ticket to social mobility." We need to do a better job of cultivating and respecting skilled trades in this country. The laws of supply and demand kick in when you have too many kids doing anything to chase a college degree.
Maybe he'll publish a follow-up piece about how crushing it is to pay a mortgage to live in the house of his dreams. Eye-roll...
1
In the information age we have been living in with the internet, how do so many young people borrow so much money with no concept of the consequences?
1
Pundits on the right continue to lack empathy for the student debt problem. They say things like, “You should have known that a history degree wouldn’t get you a ‘real’ job. Study math or science.” They apply capitalism to the notion that education is entirely supply and demand for vocational talent. Guess what? Education isn’t just about preparing young people to become armies of workers to enrich corporate owners; education is the democratizing force that propels societies to better decisions and better standards of living. Engineering is important (and I am one of those engineering alums), but so are history, art, philosophy, literature, and even...gasp... subjects like journalism.
College is the new K-12, preparing a wide assortment of students to be thinkers and leaders. Why would we want to shackle those students to a lifetime of service to debt holders and to limit their potential to utilize those degrees they just obtained? Set them free to invent, create, write, and opine, without the challenges of crippling debt in early adulthood. Yes, some graduates didn’t study high-earning subjects; don’t double penalize them. Rather, set them loose into a world giving them the best chance to improve all of us collectively.
1
He's being accurate about the options here that would have been more prudent/careful, but there is still something very fishy about this whole system. Just today, I heard from a friend who said he ate only a lunch for a week to help save for a used car, given his student loan burden. People frankly refer to "debt slaves" now in this country. I say "this country" because of the increasingly known fact of higher education being paid through tax money in other countries. Would I mind paying taxes for it to help these people rather than military adventures such as that in Iraq (still no WMDs!) and the "graveyard of empires" (Afghanistan)? You bet! This country is becoming more and more isolated in the world as it is a selfishly greedy, authoritarian culture. How long can the majority of citizens be almost masochistically patient about this situation? That's the other question. Support Bernie Sanders' proposals and bills in Congress and vote Republicans and corporate Democrats OUT.
I see the "you got what you deserve" crowd is already here in force. Unfortunately, the difference between a private school and a state one is a matter of scale - 10 years of a crushed soul, or 20?
My fiancé and I could easily have bought a home if not for the $90k mortgages on our two brains. There are many millions more like us. And then the economists sit around pondering "secular stagnation", unable to figure out why recovery has been so slow...
The Fed enabled the incredible and unjustifiable rise in tuition costs that harnessed millennials into working off monstrous debt for years to come by extending anyone who walked through the door, with a dream, huge student loans. Without the Fed's complicity tuition would not be hurdle it now is and dreams die hard. Most eighteen year olds don't have the capacity to comprehend the significance of enormous debt much less the consequences of not paying it. For those who don't survive this heart attack machine, and there are many, it's a very cruel system of thought and behavior control, a true dream killer.
its like anything if you want to pay $10 for jeans, you can; if you want to pay $200 for jeans, you can do that too. too many people are spending $40,000 tuition when they could pay $4,000, whose fault is that? oprah's for being inspirational? trump for being a big meanie? nah; its your fault for spending/borrowing more than you can repay.
what no one ever talks about is if student loans dont get repaid, who gets hurt are future college students who would see the program curtailed if current borrowers don't repay.
gotta go and watch some more oprah and ellen...
We live to server the bankers, whether its student loans, mortgages, or credit cards. Congress is not about to shut off that source of campaign funds. After all, you're barely getting by - you can't afford to make a $100,000 campaign contribution.
I was from a working class family. But smart, good looking and ambitious. I aimed high as a kid and landed at a brand-name east-coast university. That experience led me to New York and a career that has taken me around the world. The name of my school most definitely landed me interviews, opened doors, and provided much needed social capital.
I never had to explain or defend my credentials, and I was accepted as "one of the gang" among similarly credentialed peers - all bright young things in the city. And although I sometimes came up short - lacking skills in tennis and golf and never having 'summered' anywhere - I could gloss over these inadequacies and still fashion a successful enough identity to match the degree. In return, I was exposed to things, met people, had experiences, learned and developed taste. And it was success in these social networks in New York that reinforced, over time, my professional life.
As years passed, my experience and achievements became more important than the degree. But that hard won and expensive diploma was the initial grease I needed to move from the bottom of the heap to the top, to land job after job, and to meet my partner of 25 years. Also, one of the gang.
So please be careful about crushing dreams due to cost alone. Brand name schools can be vital accelerators for some young, poor lives despite the expense. You must choose wisely and hit the ground running. But don't opt out on price alone if the opportunity is there.
1
The costs are out of control. I worked at same place from ages 16-22, saving at least 75% of all my wages and tips to pay for college. I went to my community college from 19-22 while staying with my parents, transferred to a 4-year university away from home and finished my degree at 24. Still ended up with 6K in student loans. I can't imagine how other people do it because I consider myself pretty lucky.
2
The author's dismissiveness of the suggestion to "work in a building" ended the sympathy I was feeling up to that point. Adults have responsibilities. It may not be fun or "fulfilling" to meet them. It may involve boredom, drudgery, and delaying of one's "dreams". Persisting in blaming the system (even when, as in this case, the system took advantage of a naive young person), rather than stepping up and doing everything possible to meet ones obligations - including finding better-paying, though less desirable employment, is a sign, to me, of continued immaturity. I've got no sympathy for that.
12
you're attitude seems more to me like a continued misunderstanding of the fact that a vocation goes beyond an office building and that to pursue a job that you are meant for and good at and were trained to do with that education that you incurred debt for, even though it doesnt take place in an office building, does not therefore make your ambitions invalid nor does it make you immature. It merely makes you someone pursuing your ambitions, choosing a career that's right for you. You'll either dwindle and get fired working a job you are no good at, or you'll thrive making little money doing a job you love well. Bear in mind that the writer you are critiquing is writing for one of the most prestigious newspapers in the world, probably one that you could not write for, no matter what office building you yourself might work in.
If you can't afford the elite universities don't go. Excel at a public university and there is a good chance for at least a partial scholarship at a good graduate school. I lived in poverty until I finally earned a graduate degree and was burdened with $3,000 in loans upon graduation. I received no assistance from my parent, and worked while in school. It took longer to earned my degrees, but I feared debt. My classmate took out $20,000 in loans at 12% interest! You know how that rate of interest inflates the debt owed. Students received a better education before colleges were run as businesses, but simply as institutions of higher education. No frills, no perks, no 3:1 ratio of administrators to professors. The main focus was on learning and the cost was manageable. At state universities tuition can be as low as $7,000 a year and the very needy can get all costs paid if they keep their grades up to a C or C+.
7
It took me 30 years and an inheritance to pay off my student loans. I'm now trying to repair my credit. The interest was insane. I was threatened numerous times by bill collectors. I don't know if a private education is worth ore than a local, state one. Your mileage may vary. I started at a state school and finished at a private one, and the private school was way better, though it never helped me get any sort of lucrative job.
2
Even as a high school student, I knew loans had to be paid back. University of Houston tuition is $8,537 per year for in-state residents. Howard University tuition is $23,970, but with room, board, and other fees combined, the estimated total cost of attendance is $43,116. It took me less than two minutes to find this out.
21
That's good for you, William. You should feel grateful.
Interesting article especially the part about feeling you have to attend a prestigious school and using student loans to do so. Once you're out of school, have a job and prove yourself no one really cares what college you went to. Once employed, many companies provide tuition assistance for a graduate degree. The prestigious school might help you get a job but it won't help you keep it and a state school will serve you very well. State colleges are not that easy to get into because of the lower cost and the community college route into a four-year state school is beneficial financially.
11
I'm aware that colleges have been running a racket for 20+ years now. They have essentially been in collusion with the loan originators. And yes, even state schools are now crazy expensive. It must be dealt with, but that won't help those who are already buried.
But I will take issue with the idea that at 17 or 18 years of age, you are too immature to understand the action you are taking with a loan, and the possible devastating financial ramifications. Teens are exposed to culture and knowledge far sooner than I was in the 60s/70s -- but even then I knew I could not afford an expensive school. Think of it on even simpler terms; when you want a car, did you go to the Lexus or the Kia dealership?
9
Starting at a community college and transferring to a local state college or university, living at home (hopefully rent free but not everyone has that option) and working several jobs still isn't a guarantee today of being able to graduate from college debt free. Those days are long gone. Sometimes you can get more money at the private schools, but then you have know the difference between loans and grants (grants often don't have to be repaid, while loans do). Even getting scholarships and grants aren't going to lower your loan debt. At some schools, if you're getting financial aid (combination of loans, grants, etc.) and you get a scholarship, they'll deduct the amount of your scholarship from your financial grant/grant, so you still have find a way to make up the money. State schools are no longer cheap. They're cheaper than the private schools, but in MA the in-state tuition and room board rate is over $26,000 per year for UMass. I don't know anyone who has that kind of spare cash.
10
It would be simple to attribute the author’s woes to vainly choosing a prestigious private college but any public college offering four year degrees is no longer affordable to middle and lower income individuals without loans or full time employment income. To attend a higher rated public institution requires lots of loans that do require a decade of above average income to afford to pay off. We are back in the pre-WWII situation where higher education is affordable for the rich. The high loans can easily offset the benefits of a good education by denying people the money they need to prosper.
10
"It would be simple to attribute the author’s woes to vainly choosing a prestigious private college but any public college offering four year degrees is no longer affordable to middle and lower income individuals without loans or full time employment income"
Not true. You fail basic math.
During the Dark Ages(1964-1968), I attended a community college in my town. I worked 2 part time jobs and paid tuition, books, etc. from them. Because of very good grades, I won a scholarship to the premier state university.( It was and is superior to virtually ALL private colleges.) I worked during the school year seven days for 18+ hours a week. I worked 60 hours during the summer and at Christmas. I did NOT go to Virginia Beach for spring break, I worked. I graduated with honors and debt free.
My three children were NOT allowed to attend private colleges. Onw studied accounting, but did not graduate. She has a good job because she had a skill. The middle child took a degree in anthropology, learned German and French and then took a business degree. Later he attended law school, passed the bar the first time and worked as a lawyer to repay his student loans for a private law school. The baby took a degree in French and economics, & attended MBA school. He now has paid off his student loans, has two businesses and owns a house plus rental property. Even today it is possible to graduate almost debt free. But there will be no apartment by yourself, vacations in France or Mexico, or other luxuries. Your job is to graduate and be debt free or debt limited.
My cousin has three grandchildren. The girl and older boy attended private colleges to earn education degrees. $80,000 student debts are hard to repay as teachers. The youngest became a plumber and makes more.
15
I commend the author, the article is well written.
As the parent of a son getting ready to go college, I dread the time when I will have to face the financial reality. In my experience societies everywhere tend not to pay attention to issues that cost pennies when dealt with early. If you require everyone to choose only those professions that pay well, then I believe such societies in the long run will decay.
As a member of the society it is not unreasonable to expect that government extend the same benefits it extends to corporations. That student debt is not dischargeable for most, speaks to values we cherish. I hope government takes steps in investing in the future of our country, its young members.
12
$102,165.90 owed here, and still ABD, five years after my qualifying exams.
I'm entering my 5th year in the Public Service Loan Forgiveness Program (teaching at a State University and at a Community College), which is a great comfort, at least until Trump or Betsy De Voss sneezes and the whole thing goes away!
There's got to be a better way.
23
Don't go into a profession where there are 1000 applicants for every opening?
1
Or until you are told that they made a mistake and you don't actually qualify for the program --- which has been known to happen.
I don't think that some in positions of leadership have recognized how student loan debt will impact upon the country in the years ahead. Already students are shying away from majors that may not pay well after college and even then, because they are saddled with debt, they will be forced to delay home ownership. In some locations, student debt coupled with an expensive real estate market will lead to more renters and longer commutes.
11
It's by design. Students who are ignorant of history, philosophy, and literature are easier to control. The youth are now ushered through business and marketing programs which are little more than corporate-backed diploma factories for the uncritical and imaginative world in which they will inhabit. E' pazzo ma e' la realita'.
Your story reminds me of my own total lack of understanding about college loans and the debt I would be in after graduation - but my story happened decades ago. I graduated from college in 1974. Does nothing ever change? One solution might be to have required high school courses that teach students how to manage money in real life situations - prepare them for what their life is going to cost. High school students should be taught about loans and interest, credit card debt, credit scores, cash savings versus investing in the stock market, making major purchases like a house and a car, the cost of raising children, saving for retirement, the cost of long term care for yourself or your parents, what health insurance costs, etc. Schools should take some responsibility in giving students the financial knowledge they need to get through life.
19
1) By writing this column, the author has helped a few people avoid the mistake he made -- that part is good.
2) What isn't good is assertion that he has no control over what happens now. That attitude will not get the loans paid off, and not getting the loans paid off means they will follow him quite literally for the rest of his life.
3) Yes the system is predatory -- but not just the banks, the so called prestigious private colleges are just as predatory. But that won't get the loans paid off. Yes, Trump makes this worse, but no president is going to magically wipe out Mr. Arceneaux's debt.
4) The only answer is to accept SOME responsibility, negotiate the best terms with lenders, work 3 jobs if necessary, and then make the payments RELIGIOUSLY. It will only take two years to establish credit, That's where living in your parents' basement and living on mac and cheese comes in.
5) Once good credit is established, the loans can be refinanced on favorable terms which will make a HUGE difference in monthly payments and allow Mr. Arceneaux to move out of his parents' basement and maybe afford some hamburger occasionally.
36
Around here many kids take the option of 2 year community college to get some of their courses out of the way. Then they transfer to the state university system and are able to manage that cost with some loans and part time work. I worked every summer from age 14 all the way through college. I then took an unpopular option of living with my parents for a year while I paid back what loans I did have to take out. There are ways to manage costs if you live in a state that has an inexpensive community college system.
15
Community college for required foundation courses is definitely an option in CA, with its very robust community college system. I consider it a great gift to my son that I urged him to take that route, transfer to California State U system and graduate with his B.A. debt free. Board of Governor's waivers are available at the CC level for those who are struggling financially and CA offers grants to transfer students on track to graduate within a reasonable period of time. One catch, though, he did live at home for 4 years as the cost of living in the Bay Area is insanely out of kilter with the COL elsewhere. But young adults living at home isn't an anomaly anymore, is it?
12
Our son entered college in the fall of 2008 during the financial meltdown. Even though we (his parents) had the financial resources to send him to a private college, we never even considered it. He attended a community college and earned a transfer diploma to attend a state university. He worked part time for gas and spending money and we picked up the rest (tuition, books, etc.) so that he graduated debt free. Going to a community college and state university did not impact his ability to get a good job. He regularly thanks us for ensuring that he graduated debt free. I urge other parents to consider this route. I'm a little tired of parents saying "but my child wanted to attend a private college" as if the parents didn't have the ability to counsel a more sensible and affordable college plan.
3
Community college sure didn't work in NJ. They accepted 6 credits, and I had a 4.0. cumulative average (1979-81). Ended up doing four more years. In 1982 Reagan's America cut the merit scholarship program that was paying my tuition. Rather than switch schools a third time I took out loans and finished. Yes I worked full time, scrambled for child care the whole time, living in terrible neighborhoods, worked two jobs for eight years after graduation (into my early 30s). Read the history. We used to have fine city and state schools all over the country. Tuition inflation was created by bad political policy. It's reprehensible.
First and foremost, higher education is a business, the cogs of which are greased by student loans.
As a debt carrier (aka student), you pay to play. The rules of the game are contingent on the arbitrary largess of benefactors.
7
More transparency would help and should be required. Colleges should have to show applicants the full cost of a degree under typical scenarios (often more than 4 years of study), the mean and median salaries of graduates in the student's intended field of study, the monthly "nut" the student's will be paying and, crucially, the total monthly cost of debt service AND average living costs against the expected monthly salary of the graduate. Statistics on the percentage of students who DON'T graduate should be part of the presentation. Students and parents should be required to sit through the presentation and then certify in writing they have received the information. It won't cure the problem but it will help reduce these horror stories from jaded graduates who are always crying "I wish I had known"...
12
My parents couldn't contribute to my college education so I worked every summer during high school and after school during the school year. I was accepted into top 10 universities and received scholarships but like the author, it was not a free ride. So what did I do? I used my savings from those jobs and I worked during the school year and two jobs over the summer. I graduated debt free and went on to an Ivy League graduate school. I also worked to pay for it and again, graduated debt free. I don't quite understand what happened to "working your way through college". Why are students taking out so much in loans that they can never pay back? Are there no jobs available to supplement whatever they get in scholarships and financial aid?
24
The days of being to work your way through college ended in the 80s. The cost of tuition, room and board, fees, and textbooks have all long since outpaced the ability of a minimum wage, part time job to cover.
58
You don’t say when you went to college, but I went 30 years ago and my daughter is a freshman at the same state school I attended. Tuition, room and board are more than 5 times what it cost me. Minimum wage is only 2 time more than it was. You can’t just work your way through school like you once could.
133
No, Mr. Osborn. In today's world, college age kids get unpaid "internships," or they can work at McDonald's. Neither option buys a lot of credits.
5
It seems that the rampant rise in the costs of higher education coincided with the shift away from regarding educated students as the "products" of a university and toward viewing them as "customers" of it.
Those of us who went to school in the 70's remember cramped, too-cold or too-hot dorms, food that was prepared to feed, not delight us, and a dearth of fitness centers scattered about campus. It just costs a lot more to run a 4- Star hotel than it does to run a barracks.
The fact that most colleges now have to sell themselves to their consumers rather than the students selling themselves to academic institutions is sad but true. Hence, a college degree now joins that BMW 7 series, the 3-Carat engagement ring, and the iPhoneX as marketed luxury items, and the same rule applies to all of them: Caveat Emptor !
27
I'm sorry you were misled--it happens too often. I don't judge you. I remember being 18.
Think about the messages you received in middle and high school about "getting into a 'good' college." Who came up with that concept? Great branding for U.S. News and World Report, but this emphasis on test scores, grades and numbers of boxes checked (sports? community service? awards?) over actual learning has reduced the quality of education for children and teens in the quest for "getting in to a good college."
A "good college" can be a lower- priced college if you have developed the skills to get the most out of it--find the best teachers for you, navigate to the classes where you learn the most, teach yourself through reading good books, etc. Why aim to work for someone who is only interested in hiring people from elite colleges? Rather than take an expensive gamble, better to start your own business with your quality lower-priced education than take an extensive gamble.
15
"If you have developed the skills...."
Where you get those skills is college. Barely one in a thousand high school graduates have them.
College is always great, who doesn't love it? But there is a cost, which in the mid 20th century was always exceeded by the benefits. That hasn't been the case for decades now. But obviously we can't count on academia to say it like it is, that would counter their self interest. There needs to be financial literacy education in this country, taught to our kids. Our economy is 2/3rds consumption-driven (versus investment- or export-driven), so of course everyone is encouraged to borrow borrow & spend spend! With benefits accruing to those at the top of our capitalist pyramid. But sshh, don't tell anyone.
5
Perhaps our current president, with his eight bankruptcies despite his inherited fortune from his real estate mogul father, will see fit to change the student loan system.
JK!
21
Higher education these days is a whole different ballgame than it was even in the 1980s. Tuition has skyrocketed; it's simply not possible to avoid significant student loan debt by holding down a job and living frugally. I speak from experience, having gone to college in the late 1980s and returning to receive my PhD from a state university in 2009. The massive amount of student loan debt in almost every case is caused not by individual student borrowers but by incoherent and cruel federal education policy. The student loan program was not created in order to impoverish borrowers for decades but to allow people to get an education who otherwise would not be able to, and to contribute to society. Our student debt crisis prevents graduates from buying a home, starting a family, starting a business. It also removes the billions in repayment from the economy. It's appalling and unjust that student loan debt is the one kind of debt that can't be discharged in bankruptcy. The $1.7 trillion tax cut for billionaires indicates once again, if comparisons with other developed nations wasn't sufficient, that our nation has the capacity to make the cost of higher education affordable and avoid plunging generations of young people into debt peonage, but instead that funding is being used to enrich the 1%.
40
The colleges are like any other big business and they have raised the price of their product way beyond what it is worth.
In many good colleges teachers have had real nice life styles and good benefits. Often turning to the use of adjuncts to preserve their nice lifestyle. That game is over in many cases, No need to blame the rich here, plenty of blame for our politicians and academic institutions.
1
If student loans are discharged in bankruptcy, then the taxpayers get stuck with the tab. Is that what you're suggesting?
1
A hitch in the military provided me with the GI Bill so that I could finance my own education. Interesting that no one seems to consider this approach. Of course, I also worked two part time jobs to offset costs through grad school. Where there is a will, there is a way.
21
I am with you and I sympathize. I don't blame you. I'm there too. When I was accepted into my fancy graduate school, the student loans seemed like an afterthought. I would go spend time with the Financial Aid office, asking questions. I remember feeling confused, but kept being told it was no big deal, sign the papers, that people in my field, "pay them off the fastest!" Not true. It's been tough. Harder on my marriage to someone who had family support for graduate school and little debt when we met. I had work study and outside scholarships and still 6 figures of debt.
It's got to change. I hope it starts with us. I'm so sorry.
29
Did you not know how much it cost per semester/quarter? Or what expected salary was? Amazed that financial aid staff told you to "just sign the papers" that's downright horrible. I don't mean to be negative but 'm honestly curious when I hear comments like yours...
Hopefully things will change but as long as the govt is flooding the market with billions in $$$ for loans I don't see colleges being forced to cut back anytime soon.
1
The spending potential of graduates hobbled by debt is lost to society. They will hesitate about having children. They are less likely to be customers for furniture, clothes, non-cheap restaurants, houses, vacations, trips, hobbies, discretionary spending in general, or all the goods and services parents buy. They are potential sources of business who are now blocked by their loans, and new customers graduating from college or other studies, who should be sources of spending, business, and profit for our consumer-driven economy, will similarly be blocked.
Consumer companies of all sorts should see solving the student loan dilemma as a major source of new customers, and throw themselves into an alliance with students to, at the very least, keep those now in college from falling into the same trap. They do not make money from collecting on student debt; in fact, the collectors of student debt are in direct competition with them for graduate dollars.
But the consumer companies would rather preserve solidarity with our system of property even if that means letting investors (whoever owns the student loans) steal their consumer customers. Strengthening consumers and government at the cost of diminishing investors and "free enterprise" is treason; far preferable to let customers be pilfered. Class solidarity emerges as the ultimate self-interest.
27
The problem is not the schools or the lenders. It is the students that for various reasons decided to attend schools that they could not afford and now whine that they have to pay back the money they borrowed. They have a sense of entitlement and no sense of responsibility.
1
I am 65 years old with two children in college. My parents paid for my college tuition and for law school. I was lucky. When I got married I started saving for my future children's education and my parents and grandparents helped me. I made believe I had student loan debt and I made those monthly payments to myself. I continue to save now, even though I spend to pay current tuition. I underestimated the cost of tuition (and my ability to invest). So I've used the last 3 of my children's college years to continue saving so I can (hopefully) pay for their senior year. After they graduate, I will continue saving - for grandchildren - and I will include a provision in my Will to set aside funds for education. I have life insurance for this as well. When my children get jobs, I will require them to start saving for these unknown children in the same way (by paying to themselves each month what their friends now pay to banks). My point is that education savings has to be a long term multi-generational effort. If you play the game, it cannot be lost. By that I mean if you save, then its simply a matter of how much the family wins. Every semester I pay is another win.For those who are married with no children... start saving now. And get parents and grandparents to chip in. At Christmas, give a token family award to the person who saves the most. Have parents and grandparents modify their Wills to include bequests just for education. Do whatever you can as a family.
30
Well, you had a definite leg up, coming out of college and law school, and presumably into a relatively good salaried profession, with no debt at all. And you have a financial plan to cover the education of your children and grandchildren. But the author is from a family that could not afford to cover the large gap between his scholarship aid and his expenses—not to mention they didn’t think that they could send him to a more prestigious college. Forget about grad or professional school! I am grateful that my parents paid for my college education (using in part my summer jobs’ savings), but although they could afford it, they did not pay for my Masters’ and doctoral degrees. In the late ‘60s and early ‘70s, the federal government had a terrific method of investing in future teachers: It offered (NDSC) student loans at 6%, but half the principal and half the interest was forgiven if the recipient taught for at least five years, which I did (for 11 years). The push was to encourage students to go into science, but the program covered all subjects. Currently, the South Carolina lottery proceeds are dedicated to covering the gap between Pell grants and the cost of tuition and fees for college students.
5
Your post is inspiring... well done!
AS one of six kids my parents had no money for my college. But that was back in the early 80s before college was expensive. I got a full scholarship. Got my degree, then a PhD, now I am a tenured full professor. Problem is my kids can't go to the fancy private elite schools I went to because I can't afford it and we don't quality for aid.
But my question is if professors can not afford the colleges they went to and that they work at, where is all the money?
Why are students taking on enormous debt, why are the kids of professors going into debt?
The answer is that all the money is going to the tippy top.
People assume our kids get to go to college for free, they don't.
This is the question everyone must ask. If most employees of universities including full (female) Professors can not afford college where is the money?
26
Not just the tippy top. The cost of health care as a percentage of state budgets is a huge and overlooked issue, pushing aside state spending on everything else including education.
7
Administrators.
1
My children both went to public universities. My son had half his tuition and expenses covered by scholarships. As a middle class family we were only able to save enough for one year of college for each child. My kids took loans, and thankfully neither had to borrow more than 10k. My husband and I borrowed 23k. It's 8 years since our youngest graduated and we are still paying off loans. It is insane that the cost of college has gone up 400% since I went to school.
26
I was a good student from a poor and broken family who enrolled in my local school, which happened to be Penn State. I managed to win a full tuition scholarship during my first year. I lived at home and was a commuting student in the worst possible way -- my mother dropped me off at campus in the morning and picked me up in the afternoon as though I were in elementary school.
I graduated with no debt and immediately entered a graduate program at Penn State. I married a fellow graduate student and we pooled our assistantships to pay the mortgage on an inexpensive house in a neighboring town. Today, I'm a retiree still living in the house I earned by going to graduate school.
My college experience began in 1962. It's hard for me to comprehend the change in our country's willingness to help students get a college education.
29
My wife and I, both “first generation college students”, did the same in the 1990s. Our families couldn’t afford to subsidize our adult choices. We did cheap but fun things such as movies on Tuesday’s when it was almost free to anyone. We both worked multiple jobs in school, including stuffing circulars info Sunday papers very early Sunday mornings during grad school.
Where there is a will, there is a way. You are your life choices.
My son went to Penn State not too long ago. Even paying the ""out of state"tuition rate, it was still about $100,000 less than a private college. He managed to graduate with only a moderate amount (under $25K) of Federal, fixed-rate loans. We were determined he would not take out any private loans, and drove 10-year-old cars and took no vacations for four years. It was worth it
A lot of critical commenters seem to not understand the societal pressure (from both peers and authority figures like teachers) that many students face, telling them to attend the most prestigious college, preferably out of state for the "experience." State schools can be associated with football and frat culture, as well as huge, impersonal lecture halls. If you don't have a parent steering you to the lowest cost option, it's easy to get carried away and make a bad decision.
I was lucky in that an academic scholarship made one of my "dream" private schools cost about as much as State U. But I know I would have been quite disappointed if it hadn't worked out that way, even though as an adult I know that I would have received a great education at State.
So yes, this author made a bad decision - which he acknowledges - but he did so as a teenager who had never supported himself financially and who received bad advice from authority figures, and then graduated into a global recession. A little empathy please.
34
"Societal pressure... to attend the most prestigious college" Wow. I went to a state school, now on my second masters and doing pretty well after a LOT of work. The school wasn't flashy but solid and not for a split second did the thought ever enter my mind to go private, my parents at that time could in no way shape or form could have covered the cost. Ludicrous to even think about it -- and this is 20 years ago! State schools are great so sorry, not so much pity there...
Yes! Empathy, because not everyone has a college-savvy parent, and we know guidance counselors in high schools are often misled and misleading. I know of a student pushed toward a pricey college--"You can be on the sports team! Don't underestimate yourself--you can handle a prestigious college." Flunked out, stuck with loans, will never qualify for loans again, working in fast food. NOT a good high school guidance counselor!
1
I have empathy. I just don't want his decisions to become the public's problem via bankruptcy.
1
How hard would it have been to use an excel spreadsheet (or google sheet) and calculate the cost in advance? If your chosen field doesn't cover that cost, don't take the loan.
If you were to take out a home loan, you'd see it if would match your income, and you'd inspect the house and check out the neighborhood-- i.e. do some risk analysis. Run the numbers yourself- don't think that the bank will be your friend when it comes to what you can afford. If the house is more than you can afford, see if you can live with less.
Why is a college loan any different? Should an out-of-state private school be the first choice if money is a problem? If people lack the sense to think about this, it's hard to think that they have the sense to finish college. And if they lack that sense, why should 'society' pay for this?
26
Clinton - curious if you would be open to a little moment of compassion and empathy today. I really appreciate your comment was probably coming from your own experience and felt alive in you when you posted.
I don't think this author disagrees with you that she needs to own her lack of knowledge or avoid her own personal responsibility for being in this situation.
What I hear this author say is that the crushing costs of a college education COMBINED with predatory lending practices and rapacious debt collection processes is a real challenge. I heard her say that the student loan officer might have been deliberately misleading and willing to trade on her hopes of a better future. I heard her offering words of caution to others with similar choices. I hear someone who is not asking for support but nonetheless could use some.
Have you or a loved one ever struggled and then were offered support? What was that help and how did it feel to you to give or receive it? Was there a time when you got unconditional help or support even if you were partly responsible for the situation? Was it ok?
For me, I try to connect with empathy esp. when there larger issues at play because if I don't, I become numb to the possibility of my own power to stand with others to demand change and vulnerable to fears about my own self worth.
I believe in mutual support - for me, for you, for this author. I also love spreadsheets ... but that might not be what is needed here.
I actually did this when preparing for my MBA. It was a signifier that I truly belonged in the business world.
1. Most students (myself included) don’t know what “our field” is going to be going into college. And even if we did, it’s ridiculous to say a 17 year old could possibly accurately predict their exact salary 5-10 years in the future.
2. State schools have the same issues, and often similar costs, as private schools. Private college students often offer huge discounts (aka “scholarships”) that make top-line tuition costs in-line with state schools. But in both cases, it’s often the cost of living, which no 18 year old has a firm grasp on at all, which ends up being funded by loans, and can vary widely and unpredictably.
3. Most students don’t realize that so many of the scholarships you receive in high school and your first year of college don’t carry over to later years. You might have a first year nearly all covered by scholarships and grants, but then face massive costs (and need loans) to continue in years 2-4. Perhaps the entirely rational actor (do you know any teenagers who are like this?) would drop out at that point. But almost nobody does.
4. Your condescension is noted, but not appreciated. Nobody is saying students are blameless, or didn’t make bad decisions. But you fail to acknowledge, apparently, that teenagers dont have the vast financial expertise required to make 10 year personal financial forecasts right out of high school.
After graduating in 2003 with a bachelors of science in mechanical engineering I owed $80,000 which equaled $725/month for 12 years - it was painful and prevented me from buying an apartment. It did however, allow me to get s good job and build a quality life. I don’t celebrate student load debt or the cost of education but the ROI is incredible.
15
ROI on a mechanical engineering degree is great. Not so for a degree in say, Roman studies. People need to be aware of the distinction.
2
At 65, not finding enough work to support myself, I went back to a state university (to save costs) to update my education and graduate, giving me better earning options (or so I thought). I had to borrow due to high college costs...and to help pay rent (my social security not being enough). I graduated with a 4.0, but grants and scholarships were given to athletes, not stellar students. Finding sufficient work is still difficult, but now I do it with student loans on my back...and feel the pain of millenials and older students who went back to school with hopes for a better future.
32
You're an inspiration, KJ.
Some other commenters have noted how much more expensive college has become in real terms. I graduated from college at $4000 a year all costs included in 1974. Law School, tuition only was $4000. In 1977 an entry level law job for the government was GS 11 at $17,000. Now, the educations costs are roughly $60,000 a year and Gs-11 is about that. In other words, the income that once would cover college or law school, now only covers one year.
Public schools are hardly public. Universities in other countries are truly public, .i.e., tuition free
50
Here's what I don't understand and I am sympathetic to students and their fiscal plight Apart from the initial error of borrowing from a private lender, why has he not refinanced? There are many options out there. And, there are new lenders who are non-predatory and offer reasonable terms and forbearance and deferral in times of distress. And, what about asking an employer for assistance? That happens -- not often but it happens. For the record, the "undue hardship" discharge is loosening. And, another for the record, being weighted down is surely psychological. Debt is burdensome. Anger, though, does not produce repayment. Try other lenders, try friends, try alt-lenders. Some credit cards may be preferable if you make payments and perhaps move for new and better deals. Just saying: it takes work to work out of a mistake in not borrowing federal funds. And we do de-link borrowing and repaying. But, the map is not devoid of options. That's my point.
8
Karen is 100% correct. Why has he not refinanced or looked at other options? I went to law school in my 40's, and worked with my accountant and the school's financial aid director, both of whom walked me through the federal loan process. I graduated with $90,000.00 of debt. At first the payments were high, but I was offered a refinance package within a year of graduation. It carved my payments in half and added another 12 years to the payment plan. I have 5 years left on the loan and I will be 70 years old. Debt is a part of life, whether it is a school loan, mortgage, car payment or to purchase any of the things we feel adds to our quality of life. Work it out; hopefully you will live to be 70 and not spent your life worrying about it.
1
I have private and federal and I could not refinance with the company that would have given me the best rate because my private student loan was sold to a new bank and this new bank will not allow me to refinance unless I pay one years’s worth of payments. I’m arguing with them now, but just to go aheas and pay would be $12,000 that I don’t have. It’s unbelievable how they could change the rules of my loan without getting my authorization, but I guess there’s just no oversight in the industry.
1
Refinancing of student loans has only been available for a few years. It was nonexistent for many years after the recession. Only a few companies offer it, and it requires stellar credit (I would know, I’ve done it myself). If at some point between graduation and the availability of such refinancing options, the author was late or missed even a few payments, that option would be closed to him.
Besides, refinancing only (potentially) lowers the interest rate. Most private loans have 10 year terms, and refinancing options don’t offer longer terms. For as much as some people take out, even a 0% interest rate would result in relatively high monthly payments.
The costs of higher education have been shifting from states to individual students and their families since the mid 1970s. In addition, federal assistance has shifted from grants to loans. State colleges and universities cost in the range of $30k per year for in-state students for tuition and room-and-board. This shift in responsibility from governments to individuals and their families has led to massive student debt that undermines the future for millions of young people. Tax cuts aimed primarily at corporations and the wealthy at the federal level and subsidies for corporations from states are not the policy directions that will benefit either the next generation caught in debt or the future of our nation.
17
Tuition keeps going up, driven by easy to access government-guaranteed loans. That needs to change.
7
“It’s not our fault that no one told us the system beyond higher education was set up for us to fail.”
Why are we not focusing the blame on the higher education institutions themselves? Schools should be embarrassed at the egregious inflation in tuition and fees that force students to take out loans. What other industry or part of the economy competes for business (students in this case) by consistently raising costs and adding unnecessary services instead of using technology to lower costs and improve the value of dollars spent on the service (education received)?
40
Very true, but colleges are also responding to the demands of students. In some cases, actual tuition has indeed grown faster than inflation, but is still less than $5-$10k per year at state schools (expensive, but manageable with only federal loans). The real problem is that cost of living on campuses has skyrocketed. Students and parents are also demanding much nicer, full-boarding-school style amenities that many state schools of yesteryear never offered. One could still attend a local state school, living at home and cooking for themselves, for relatively cheap. It’s just that nobody wants to do that anymore.
Answer: That other industry is the US Health Care Industry. Does anyone see a pattern here?
Continuing on in Education after High School is the way to class mobility, job promotion. But, you have to go a long way to reach The Top. If not The Top, then close to, is more than okay. The Top is 52 Grades of School and achieving a Brilliant IQ Score. Unfortunately, the University Professors that this author had, did not do so well in School. They probably are not even finished with School, all 52 Grades. And, they probably don't have Brilliant IQ Scores. Like Michael Arceneaux, I probably had the same caliber of Professor, at my undergraduate university: Duke. The University Administrators are in the same boat as these Professors. They are not totally finished, they are still trying to find their way, they are still rough, not polished. And their classes that they offer, are the same way. I know about this, because I did reach The Top. It is unfortunate, perhaps even a crime, that Students are not aware of The Structure of School.
For any future college students or parents of future students reading this: If you're going to have to take out private loans in order to attend a school, choose a different school.
52
We chose the local state college, with "reasonable" tuition and fees. My daughter worked and supported two young children during her entire college career. She is now a public school math teacher in a large urban high school, teaching low-achieving students. I help her with her student loans because I earn quite a bit more than she does. I'm now 67. Any hope I had for retiring in the near future is gone.
19
There are many top notch private schools that offer better financial aid than public colleges, resulting in less student loan debt. All too many students and families don't do the research to see what the best bargain is--it's often not the public institutions.
2
Why doesn't she qualify for the loan forgiveness programs based on public service? She certainly sounds like she should. Or have those programs been discontinued?
I pursued an advanced degree in my 40's, which has worked out well enough that student loans are a distant memory. I minimized them by working full time, and taking one or two classes a semester. I paid for some of my education as I went along, and I never borrowed money for living expenses.
Once you start borrowing for tuition and living expenses, you will probably be in over your head.
I wish the young man well, but this should be required reading for high school juniors and seniors. That and a mandatory consumer math course.
39
Some people don’t want to take 8-12 years to get a degree though. That’s good it worked for you, but how would someone pay $30k a year working part time?
It seems that any transaction that someone regrets somehow is "predatory." Mr. Arceneaux had options--different schools, working and saving before going to college, etc. I think the article doesn't mention his major. It appears, however, that the Mr. Arceneaux chose a very difficult path of being an author. There is nothing wrong with that choice, but it is a CHOICE. He alternatively could've selected a career path that (1) doesn't require a degree from Howard or (2) is more lucrative. I agree that student loan debt should be dischargeable in bankruptcy so that borrowers and lenders face the same risks as exist in other lending transactions. Having said that, all must realize that the lenders likely will increase interest rates to account for the added risk.
21
It is predatory when colleges and banks target people with little knowledge of what they're getting into due to their age and socioeconomic status. Sure, students make their choice; but a choice made without all the information, or with incorrect information, is not always going to be a good choice. Colleges and banks are definitely not providing the students all the information with their enthusiastic loan offers. I would also expect better statistics from colleges on the average and median income of graduates within different majors.
As to your comment about interest rates, why shouldn't interest on risky loans be higher? For some students, college is a risky investment and the interest should not be artificially deflated to disguise that risk.
10
Any transaction that someone regards as predatory can and will be regarded by others as not so. If predatory is in the eye of the beholder, then it is not a real thing but rather a way to manipulate emotions and get out of agreements. It was the business of anyone who enters into a disadvantageous agreement to have known better; fooling and misleading people is as legal and lucrative in real life as it is in poker.
Alternatively, we might opt for an objective reality in which some situations are clearly and objectively predatory, some are on the edge and can be seen either way, and in some situations the cry of predatory is part of a scam. In this reality our judgments may be mistaken, but we can figure this out and fix them; an example would be the judgment of Southern states on the fairness of segregation.
If the dangers of taking on college loans got as much publicity as its advantages, with stories of failure and problems told as much as stories of success, and with figures and statistics provided of the various fates awaiting graduates, there would be less predation. This would probably produce more difficulties and failures for private colleges, and would certainly constitute interference in the free market (in which information is provided by the parties hoping to influence decisions in their favor rather than by some supposedly objective neutral party).
@Sherry: James is correct. Mr. Arceneaux chose to attend a university in which "... good students [like me] deserved to go to schools that matched our talent and ambition. "Deserved!" There you are, Sherry, he got what he deserved.
If you believe you deserve a Rolls, and a Ford won't do, be prepared to pay for it.
1
My son wanted to go to an expensive school and was willing to take on the debt as a 17 year old. I explained to him that his payment when graduating would be the equivalent of leasing two BMWs. He quickly changed his mind and graduated from state school and is doing just fine.
119
I completely agree with a comment below...we need to end this idea that people can be anything they want to be.
We need to also stop telling every student to "pursue their passion". Most students need to hear a different message...
"Cash in" is beats passion.
For most students, the loans remains long after the passion fades.
60
But this is America, we're all taught that we can have it all. Anything is possible!
1
What a vibrant society we will have if we are all bankers and lawyers! (Not doctors, I hear they don't get paid so well anymore) Edit- bankers, lawyers, and insurance brokers!
The old can be, and often are, thoughtlessly cruel to the young.
I remember the draft. Today we have Obamacare, Social Security, Medicare, excess government pensions, various drug and drinking laws, licensing requirements, zoning and building restrictions. But the worst is the way that adults are given jobs of dubious societal value paid for by student debt, with no correlation between the debt incurred, and the risk taken by the young, and the future benefits that will accrue.
And these debts cannot even be discharged in bankruptcy?
There are many complicated and difficult to implement ways to improve the situation. But the simplest is to make colleges responsible for the bad decisions they participate in. It is they who have the data to know what likely results will be.
Better decisions will follow, as night follows day.
24
I'm sure I'll be slammed for saying this, but I don't feel that sorry for Mr. Arceneaux. If he was smart enough to get into Howard University, he was likely smart enough to get into UT-Austin or one of the other solid state universities where, as a Houstonian, he would have paid a fraction of the price. Maybe he could even have gotten into one of the many honors programs at these decent state universities, which would have propelled him into any number of fields and graduate programs. If he was smart enough to go to Howard, he was smart enough to know the difference in price between that school and others. Like Mr. Arceneaux, my parents told me that an education was the way out of the lower income class that I was born into. But I was also told that debt was bad. Figure it out, they said. So I went to a state school. When it came time for graduate school, I turned down an offer from an Ivy League school, opting again for a state school where my entire program would be covered. College was cheaper in real dollars when I went, to be sure, but it was still very expensive to go to a fancy, out-of-state school. You make a choice and then you live with it.
166
Sounds like you went to school decades ago. Even state schools are not cheap, even leas so with decimanted state funding, making it impossible to pay off with low paying job she during school. Private universities with financial aid is sometime much less expensive than state schools. Also graduating during the worst year financial crisis since the 1930s does not help. I was in similar circumstances and have since mostly paid off my loans, but it look almost ten years. The crisis caused me to delay payments by two years as I fought to get my career started.
38
I too was intelligent enough to get into pricey, "prestigious" private, out of state universities. My working class parents also made it clear to me that I was 100% going to college and that excessive debt was bad. I too went to a solid state university where my financial aid consisted of academic merit scholarships. I worked hard t ensure I graduated in 4 years, not 5 like many others so that I didn't incur the expense of a 5th year. I too turned down Ivy League MDA programs for the in-state flagship state university who paid 100% of my attendance. Almost 30 years on, I am a highly successful business executive. We choose our paths.
53
Yea but state schools were much more affordable 30 years ago. Inflation adjusted, you were paying 10-15 of current tuition for in state tuition in many states. There is little comparison. Yes, smart choices should be made, but the tuition costs are out of control and scholarships haven't kept pace.
23
Students should remember that rather than forgive their nearly $1.5 trillion in debt, the Republicans instead voted to give $1.5 trillion in tax breaks to the rich and corporations, of which the bottom 80% gets 35% of the benefit.
It would cost about $400 billion per year to pay for 20 million college students' tuition to in-state universities, at $20,000 each. With proper price controls and increased use of community colleges, we should be able to lower those costs to $10,000 each or $200 billion.
For scale, here are options for financing this:
1. The Trump tax cuts are about $125 billion per year, on the top of the Bush tax cuts of $125 billion per year. Since the rich are the ones paying the vast majority of income taxes (e.g., the top 1% pay about 50% of federal income taxes) going back to Clinton rates should cover most of the financing.
2. The top 1% get $100 billion per year in tax breaks due to preferential treatment (lower rates) for capital gains and dividends.
3. We spend $600 billion/year on defense.
Democrats argued for higher taxes on the rich to fund universal tuition and the U.S. chose Clinton by majority vote, but some angry white people in swing states put Trump in office against their own economic interests.
Hopefully the kids struggling with this debt burden know who actually wants to help them, instead of the 1%.
134
Why should student loan debt be forgiven? So the taxpayers can pay for it?
6
Ah yes, price controls. Just what a "free market" needs is price controls. Communism anyone???
2
As much sympathy as I have for people that find themselves in an unmanageable financial position due to student debt, I also wonder why parents don't attempt to intervene, with simple paper and pen. Basically nobody has any business whatsoever attending a private school or a public school out of state, unless their education is being funding by a wealthy benefactor.
25
Yes, but since graduates from elite schools often grab the top spots in private and public positions, doesn't it follow that only the rich, as the only ones with the means to an elite education, would completly run our lives. No, I think if we're going to try to keep up the facade of an equal opportunity country, we should actually try to make some effort in that direction.
8
Some of their parents are also unsophisticated consumers, and particularly for first generation college students, just as blinded by these opportunities as their children. The schools come on strong. My own son has received two letters "congratulating" him on a financial aid package that consisted solely of loan offers.
21
You are out of touch. First, the private schools often offer more financial aid than state schools, so students may end up owing less than if they attended a state school. Second, often parents don’t ntervene because they do not know themselves how to run the numbers. In general, the high schools don’ t provide a lot of information about the looming debt, and the universities don’t either. The lenders themselves are anything but clear, until after the student graduates from or leaves college.
8
I paid off the $70k I borrowed for graduate school ten years ago. I still owe about $300k on those loans, however. How does that math work? When I graduated in 2001, the interest rate set for my federal loans was 8.5%. The fun thing about student loans is that you cannot negotiate a lower rate when interest rates drop. Where they are when you graduate is where they'll be for you, personally, for the life of that loan. Pretty cool.
28
Contingent:
You may not be able to renegotiate a new rate, but can't you take out a consolidation loan that would effectively do the same thing?
9
Timelines for repayment are different. Consolidation loan likely will not have a term of 15-30 years. Even if he got 70k at 60 months this guy would have to be a very high earner. If he had equity in a home he likely wouldn’t be in this predicament to begin with.
2
Not only that, but if you do default (miss a few payments - even if you try to make them up) the fees that get added on for collection, selling the loan, who even knows what, are crushing. You can end up owing five times as much. Even if you are still trying to pay.
1
In 1969, when I started college, the University of Washington cost less than $500 per quarter. That is because it was heavily subsidized by the state and the federal government. Same is true of the University of Illinois in 1982, where my tuition was so low I emerged with a JD/MBA and only $14,000 of debt after three years. Now that the states have no money, it's a different story. I blame tax cuts and particularly tax cuts for the wealthy. To think we as a nation should be lowering taxes when education and infrastructure are collapsing is insanity. The voters have to stand up for the middle class and those aspiring to it.
233
" .. To think we as a nation should be lowering taxes when education and infrastructure are collapsing is insanity. The voters have to stand up for the middle class and those aspiring to it .."
How very odd. What really happened was, those who decided *not* to go to college thought it was unfair that their taxes had to subsidize the educations of trial lawyers and heart surgeons. And so, they voted with their feet.
To over-rule their decisions, isn't that what they do, in dictatorships?
2
State taxes are much higher than they were in the 60s and 70s, not lower. But back down, states did not spend tens of billions of dollars on medical care.
2
What tax cuts are you blaming? Why don’t you instead research why the cost of college has skyrocketed?
High schools should take the lead in educating their students and their parents regarding these types of issues. Except for very wealthy enclaves, high schools should be pushing public institutions of higher learning by default. I grew up in California and nobody talked about anything other than the University of California or California State University systems. A few rich kids went to private schools but that was rare ( actually most of the rich kids went to one of the University of California schools ). Also, high schools should help kids distinguish between private schools that can *potentially* make a difference long-term versus a private school that just costs a lot of money (i.e. the school referenced in this article). Finally, we need to end this idea that people can be anything they want to be. That was a naive notion that really hurt many people. Honestly, a kid from modest means realistically needs to go to school at an in-state public school and stick with a reliable career-oriented major like nursing, accounting, or a STEM field.
53
"Finally, we need to end this idea that people can be anything they want to be. That was a naive notion that really hurt many people."
Wow, Marc Krawitz, I can't believe you actually wrote that. So we should just tell all those kids of "modest means" that they should not reach too far, not vie with their betters attending the Ivy Leagues, just be content with their lot as nurses, accountants or lab technicians? Their aspirations to anything higher were just "naive"? Absolutely mind-boggling.
Michael, I feel your pain. No doubt, others will express the same.
Countless times, I did the research to find what recourse I had after my loan was sold to dubious third parties that kept me from the info I needed to manage my debt, all the while, unaware of all the fees they were tacking on and all the schemes they were playing.
Next month I'll have them paid off thanks to Obama's hand in holding these lenders accountable. My education paid off in most ways, but I'm close to retirement now and I calculated that I paid close to twice that which I borrowed. Most of those years, my loans were in a twilight zone of disinformation and little to no access to what I needed to manage things and keep from defaulting.
I feel as though I was made to be an indentured servant to the rich folks who could game the misfortunes of those of us who made the mistake of using loans to reach up from our working poor beginnings. I had no choice: grants, work-study, and part-time jobs were not enough. This is STILL the case for the students I teach who are about to be spun into the same financial void I only recently-- after two decades, will be rid of.
Thank you for this article.
67
Everything you say is true. I understand the comments from people who paid their loans. I want to pay mine. But miss just a few payments and you start getting all those other fees - I don't know if most people realize that part of it. It just gets harder and harder to dig yourself out. And then you see the banks getting bailouts and people like Trump getting to declare bankruptcy (I know it's another discussion, but I still have to pay my loans even though I have lost money from clients who declared bankruptcy).
You always have a choice. It’s called community college.
2
I went to school full time and worked full time. Missed out on all the "fun" aspects of college life and had to grow up much sooner than my peers. And, i admit, there were times i felt jealous and self-pity for missing out on what jy friends were doing. People at that age can ge very tribal and group-oriented. it was hard and often downright lonely.
But I got to have a life afterward.
Maybe more should try that.
65
Andy, from one self-financed graduate to another, I think you are exaggerating a bit. It is impossible to go to school full time and work full time. Unless you are one of those rare individuals who does not need to sleep and can still concentrate to pass exams.
While studying, I worked 2 full time jobs every summer: for example, as a typist from 8 to 5, then night shift at Dunkin Donuts from midnight to 7 in the morning. I slept from about 6 to 11 every day.
Of course, back then my liberal arts college cost $4,000 in the first year (1980) and $9,000 by 1984. With the money I earned. a few achievement scholarships and Social Security benefits (my father had died), I initially thought I could swing it. In the end, after Reagan slashed the Social Security and tuition skyrocketed, I was just able to squeak through. In fact, that was why I came to Germany in the first place: in one year as an exchange student, I did 1 1/2 years of course work (at no extra charge) and finished my Bachelors in 3 1/2 years, thus saving $4,500 that I did not have!
In the meantime, my college--now over $43,000 a year--has caught on: exchange students have to pay FULL tuition, even though the cost at German universities is practically ZERO. Nowadays, you could work 2 full time shifts (at minimum wage) all year round and you would still not be able to pay that tuition! That is the reality that American students are facing nowadays.
5
Same here. Worked full time while attending school full time. Got kicked out of that "tribal" sorority because I couldn't attend one of their events because I had to work in order to pay tuition. I'm better off. No one gave us anything, we worked hard to get where we are. You are right-more should try the hard path. I still do-and I'm 48. It builds character.....
4
Was hard to find a job in the middle of the great recession. Maybe you ought to try a little less judgment.
Students spend less than half the time studying that they did half a century ago. This is part of why, and it's related to why degrees are losing their value.
1
I'm so sorry for your situation. It is not right to have worked so hard for a degree and then be saddled with a debt for the rest of your life. Things are different in other parts of the world. My children attended college and graduate school in Europe, at Einstein's alma mater, where the tuition fee was about $1200 per year. Now they're starting their careers with no debt burden. They can think about starting a family, buying a house, etc. I feel so bad for young people trying to pay for a decent education, and then being burdened for life with debt.
103
But only the best students are accepted. And, in most countries, the number of entrance slots per department is in step with the economy's needs. Young people with good, but not great, skills in the arts are not entitled to a free education to live their dream.
2
I come from a similar background; mother dropped out after the 8th grade, father dropped out in high school. I knew the importance of money from my father being laid off some years in the winter. I worked, went to community college and then my local 4 year college. I've done well, though in comparison to some, I didn't have a new car until I was 43 or bought my first condo when I was 41. Lesson here is that some of us can't have it all. I've had no regrets and am happy that I never betrayed myself by getting into debt. For upcoming college students, stay focused, work hard, make sure you major in something that pays well and has a future and you'll be fine. I wish I could have provided some points of view to the writer early in his journey.
41
Students who need financial aid need to evaluate colleges by their ability to provide substantial grants. That’s a tough lesson, but otherwise wonderful schools like Howard don’t have the endowment that can support most needy students.
The commenters here who think students should confine themselves to in-state publics are not fully informed. I live in Massachusetts, and for my family, UMass would likely be our most expensive option. It costs almost 30K per year, and most competitive privates would cost substantially less.
17
So true. My daughter was admitted to three UC's, but attending a private college was much cheaper due to ample financial aid (we were really poor at that point). But I did learn that private colleges vary enormously in the amount of aid they offer--you have to shop around. Her college specialized in STEM subject and really, really wanted to attract young women.
12
I don't think you're looking very closely at private colleges' tuitions. In the Northeast, they run $50-$60,000 per year. That's not "substantially less" than $30,000.
2
There are so many things wrong with the Student Loan Industry, its tough to say where to begin.
But I will say this- this is one a few types of debt that is not dischargeable in bankruptcy. We need to change that. And we need to change that soon. Many of the people who are saddled with exorbitant amounts of debt, took out these loans to pay for a vocational education, that will yield salaries not much better than minimum wage.
It is one thing to be saddled with $100,000 worth of debt to get a law degree or some other graduate degree, but its a whole different ballgame when you're strapped with $25,000 and are a medical assistant.
That's barely more than a high-school diploma.
At least public high-school is free.
30
High school is free SO FAR. Keep an eye on Secretary Betsy DeVos. She hates public education. It’s for “little people.” All her friends send their kids to expensive private schools and they are the only ones who matter in the golden age of Trump.
One interesting piece that gets missed in most such sad stories about student loans is that the main issue is the cost of higher education in the US. All the debate seems to focus on how bad the student loan companies are, not on why does US college education need to be so expensive?
261
The two issues are very closely related. US college education would never cost so much if it was not for the readily available commercial loans which are used to pay for it. That is a positive feedback loop (bubble) not dissimilar from the mortgage/property situation. The more it costs, the more you need to borrow to pay for it, the more money gets into the system via borrowing, the more they can charge for it, and on, an on it goes ... You either regulate it away via affordable state education or low-interest state loans (or both) or it all blows when debtors could not pay and most of the debts go bad. It will cost taxpayers either way, but amounts could be vastly different.
1
Especially since half the professors are starvation wage adjuncts. Look at the administrative bloat, and the lazy rivers, and the golf carts for driving around the football team.
1
My two brothers and I were the first to attend and graduate from college including 2 professional degrees and 1 master’s degree. We started in a state university. One brother went on to UPenn for a dental degree. My other brother got his masters from a state university. I attended Duke and became a lawyer. Our parents gave is very little support. Instead we worked in high school and while we attended college. We borrowed but we always understood that every borrowed dollar would be paid back with interest and that it would take years to pay off our loans. When we stated work, we drove used cars and live inexpensive apartments. Even when we could buy new cars, they always were entry level. No expensive vacations. No Starbucks and no bottled water. I don’t buy what the author is selling. After a year or two of going to a private college in DC, there was still time to lighten the load by going to a state college even if no one told the author in high school about the economics of going to college. Not to mention the higher education loan situation has been written extensively about in the media for years now. By the way, there is also something to be said for federal loan guarantees exacerbating the amount of money lenders have to throw around. Put a pile of money out there and there never is a shortage of folks prepared to take advantage. My advice; pay of your loans sooner rather than later. Every dollar of principal paid ahead of schedule reduces interest.
44
I teach at a community college and see students who pay $46 a unit for the first two years of school. My daughter is one of these. When will millennials be disabused of the idea that when they make mistakes in life that it is the responsibility of the rest of us to "let them slide"? How do you become indebted to the tune of $100k or $200K and not understand that paying that back is a challenge when you are not sure what you want to be when you grow up? Besides accounting I teach my students how to follow the news and the job market to ascertain whether their chosen career will be available when they graduate. Just because you want to be something doesn't necessarily mean you get to be that.
166
"I teach at a community college..." A lot of millennials aren't fortunate enough to have a parent who is well versed in the intricacies of higher education. More importantly is it appropriate to completely blame a millennial when they are forced to make a decision at 18 years old? In this particular article the writer was advised by people who should know better (family and a guidance counselor) and still made a poor decision.
Your generalization of "millennials" allows another point of contention: earlier generations paid less, adjusted for inflation, for college than millennials. So as our society sees a much greater need for highly educated individuals we are putting more onerous costs on them. It's cruel and unstable.
One more point. You live in California and I live in New York. Our states spend money on education and significantly subsidize costs so our poorer students don't pay as much. This is just not the case in a lot of other places.
4
It is also a myth that somehow, in the past, financing an education and career in any areas other than business and STEM was ever easier. After graduating from an Ivy League school my parents paid for, I knew if I wanted a Ph.D. in the humanities I would have to pay for it entirely by myself through grants and stipends. Because I knew
I had zero guarantee, and faint prospect, of ever getting a tenured job. I didn't take out loans. I went to a school that paid me to be a T.A., lived in a dump with many roommates, ate canned soup a lot, and graduated with no debt. It took me over ten more years to get a tenured job and I never made as much as a high-school teacher in NYS. Somehow now, students think society owes them an education and a job in any career they choose. Never has, never will work this way.
2
From what you wrote, it sure sounds like you are criticizing these students for not having the good fortune to have a teacher like you. As someone so curious about causation, have you considered asking yourself how THAT happens?
Sen. Warren has spoken about this issue. One problem is that often the students are paying more interest and service fees than they should. The federal government is insuring the loans so the banks are basically just services. They are making a fortune overcharging students and penalizing students for missing payments.
119
Seems to me that the lesson here is: there should be no private loans available for college students. If your parents want to take them out, fine. Otherwise, do otherwise.
I know it sounds extreme, but a "real" loan offered to a college student is just a step above a PayDay loan in that they are giving you more time to pay back a amazingly large amount of money, a debt few could ever truly afford.
More to the point, if tuition is at such a state of high cost that students must seek out private loans, (1) something is wrong with the educational system (overpriced), and (2) the market will adjust if fewer and fewer pay the overpriced tuition.
E.g., would Private College X go out of business if few pay the 100K semester fee? No. It would adjust its fees, meaning lower them.
29
I believe prospective college students should carefully consider and plan their course of study before taking out student loans. They should major in subjects that will offer the best opportunity for gainful employment after graduation. Before college tuition rose to heights well out of reach for most families, except the elite, one could major in most anything, but that is not the case, and that is unfortunate. Another problem, especially for students in the liberal arts, is that they need to understand how to apply what they learned to the real world. In other words, it is unlikely the history major is going to find gainful employment as a historian but may find employment utilizing the skills acquired in the study of history: critical thinking, writing, research. Most professions utilize these skills. Thank you.
20
To Southern Boy
Your comments about the value of a liberal arts degree are sad but true. There is very little practical application to be derived from a French or philosophy major, for the world is no longer a place full of entry level office jobs that go a-begging. Such academic majors will soon be limited to the eccentric and artsy offspring of the monied classes, whilst the masses will be obliged to major in whatever is deemed to be the most useful in the constantly evolving job market. And face it -- only a few clusters of the cultural élite in their ivory towers in New York, London and Paris really attach such importance to the latest Pulitzer or Goncourt Prize. Times change, so do society's cultural and entertainment habits, too.
1
This article and many of the Comments are truly sad. I have been reading these shared stories for years and these are the pitfalls I've tried to apply to my children: you might not earn transferable credits if you take AP courses in high school and they might be taught by h.s. teachers not able to teach college-level material to you, so don't worry if you don't take them -- try for h.s. Honors courses instead; and we will save $50,000 - $130,000 in tuition if you choose to get your Associate's degree at a community college and then find the school of your choice for junior and senior years. This second fact is very sad, because most of their peers are off to lovely, prestigious schools and every h.s. student deserves this opportunity. The good news is that my child is awed at the fellow students at the community college - practical, hard-working, and beer isn't served on campus. This has its appeal to some.
40
I'm confused by your comment about AP classes. At my public high school at least, the AP track was much more rigorous than the honors track, and I earned some credits at my private college, which is fairly typical.
10
Hi, LAM - I've learned from others that AP credits are not accepted by some colleges and I've learned that top schools want you to take their 100 Level classes as freshman in the way they teach. Not all high school teachers are competent to teach AP/college-level work. I am glad your AP coursework was excellent prep for your college - this isn't always the case and it informed the advice I've given to my high school-aged children. I hope this clarifies.
2
I attended both a county college and a state university in NJ. I will say the courses at county were just as difficult as any university. In fact, some students transferred right to Ivy League schools following county. Those are the smart ones.....saved all that money while at county for 2 years.
1
I taught at a small private college, and a student told me he was attending college for free. As it turns out he had borrowed most of the money for school, so he thought he was going free. Maybe his parents handled all the financial arrangements, and he signed his name to papers he did not know anything about. Needless to say he dropped out, and is probably wondering what those bills were that kept showing up in the mail.
33
Two comments.
As others have pointed out, the culprit is the schools and not the lenders. It is the schools that have used the loan programs to run up tuition, in much the same way that easy money led to a real estate bubble that burst in 2008.
At the same time I wonder about his lack of judgement, which he attributes to a working class background and an unfamiliarity with college. I have a similar background. In my case thought it led to my parents viewing college like trade school. I wound up majoring in accounting which led to a job that, if not glamorous, was certainly well paying. I think if I had expressed interest in say a film studies program they would have had me committed.
51
Right, because no one works in the film industry.
1
One option is to maximize the number of AP classes in high school (within reason and availability) and take any 1st year and 2nd year science, math, other liberal arts classes needed in a particular major at a local community college. These classes are often capped at 20-30 students, much smaller than those at a large university. The student can then transfer those classes to a 4-year college/university and take 2 classes per semester while doing internships/ working part-time for the remaining semesters. It is possible, then, to get the "full college experience" at the same time as gaining work experience and at a much lower cost.
24
I've been waiting to share this with future and current students. Back in the early 1980s I went to college and was somewhat aware of the consequences of borrowing for school.
It's not what you make it's what you spend. When I was in school, very, very few students had a car, or a landline phone, or a cable/satellite dish but used internet on campus. Off campus was cheaper if you developed cooking skills with other students and ate out only occasionally. These ideas are almost unimaginable to today's students. I know because I managed a two unit off campus apartment and made some of these suggestions at times to student renters and received polite looks of, "Are you kidding."
If you go out for pizza, to save time and for convenience, would you pay two or three times the price for the meal? That's what you might pay for that meal given compounding interest, fees and late charges ten years from now.
I balanced out my beer money with eating lots of beans and rice, making my own bread, packing my own lunch, and growing my own sprouts.
Know the value and costs of what you do or you'll be played by the congressional banking industrial complex!
129
Millennials aren't $30,000 in debt because they eat out and have a cell phone, but because universities charge outrageous amounts for tuition and fees.
Are you aware of the exorbitant increase in the cost that colleges are charging for tuition? College was a lot cheaper in the 80’s and the cost increases have far outpaced inflation. Just skipping the pizza and lattes won’t make a difference anymore, sorry.
1
Some kids are forced to pay for campus meal plans, but on the whole, yes, cheap is the way to go. Gives you character and stories for later. Don't take out every loan they offer you. The financial aid office is required to tell you every bit of "aid" you qualify for, but if you live cheap or at home, if you don't travel much or eat fancy, you don't need to take all of the loans they'll offer you. And please, no iPhone 10s, no car, no off campus job that's going to jerk you around, no new clothes, and you'll save a lot of money if you don't drink much.
1
Choices have consequences. She chose to attend Howard instead of the University of Texas. During her years at Howard she made choices about working or not and how to live. And she chose the career she wanted to pursue.
She was able to finance all of those choices, but now that it's time to pay back she regrets some or all of them. But the responsibility is hers.
94
I agree with you. It is her responsibility. BUT, there is no other way a person in their late teens/early 20’s can borrow $50 to $100K (or more) with absolutely no credit history or collateral. There’s a good reason for this. It’s because they haven’t had the opportunity to have a financial track record yet that would prove that they are a good credit risk. Match that with a young person’s financial naivety and their inability to comprehend what it’s really going to take to pay off a huge loan, and you have a recipe for disaster.
1
He. Michael Arceneaux is a he.
And he never said it wasn't his responsibility to pay the loans off. I read his piece as a cautionary tale. And what 17- or 18-year-old doesn't make bad choices? Some are just much more expensive, and difficult to recover from, than others.
The student loan business is rigged against the borrower. Not sure why it's so hard to have compassion for someone who feels caught in the many traps those lenders set for naive high school students and their equally naive parents.
3
According to the U.S. Census Bureau, the mean income for the 15-24 year old age group is about $15K (full-time & part-time); however the average state school tuition is $9K a year. After taxes, room & board, etc. there's little choice but to take out loans. Universities would have to start offering degrees in magic to make working your way through school viable to the masses.
17
More like $11K+ these days. Wish I could be paying $9K.
A parent happily paying the bill.
To me this is a prime example of why we should be teaching basic financial literacy in school (start in middle school, I say). If we taught even the basics concepts we could arm our children with some much needed understandings of how decisions can impact their financial futures. Too often “money” issues are hard for families to discuss (or sadly understand themselves) so it must fall to the schools to do so. Having clear, unemotional, conversations about how money (and debt) works is vital. It is time.
66
Fully agree. My parents never once taught me anything and I just saw them struggle with bills and debt. I think this is something that people would benefit learning at a young age before all the bad habits set in.
1
My kids' high school guidance counselors did run programs on the cost of college, so I don't think any student or their parents could claim they had no idea how much $$ they could save by going to community college the first two years then a state college - many of my kids' classmates did exactly that. Perhaps all public school students should be required to take a seminar in realistic options to paying for college.
29
I have a Ph.D, so education is clearly important to me. My husband and I begged our daughter to go to a 4 year school to get all those college experiences that were so life expanding for me. Nope, she said, I'm living at home, going to community college. I'm not mature enough to live away yet, and I don't want to be in debt when I graduate, she said. I wept. Who's the mature one in this scenario?
59
As a thank you to her, and for educational purposes you should send her on a trip to Europe (or she can pay if she is so inclined) and by staying in hostels with young people from around the world and seeing the historical sights of Europe she can have an invaluable experience that most colleges don’t provide.
7
I agree with you! I advised my dual national kids to study in Germany. Public universities are free in Germany, up to PhD level.
I don't think your situation has been caused by banks, finance companies, or the federal government. You borrowed the money and unfortunately the people who loaned it to you want it back. That includes the federal government. The problem is you have been unable to find work sufficient to pay off your loans. Lots of external reasons - the economy, local job market where you live, etc. Other factors include how much you borrowed and the major you chose. Engineering pays well but many like poverty studies, communications, etc. don't.
The Obama administration cracked down on for-profit colleges saying they deceived students. One possible way to help alleviate this problem is make all colleges partially responsible for the debts of their students. You would see a lot more honesty about the marketability of certain majors as well as recruitment of students who need to take on debt. Of course the college will be against this since your loans pay for their operations.
In the end college probably isn't needed for most jobs. College isn't for everyone and we would be better off acknowledging that fact. You completed college but many students wind up with debt and no degree.
Please don't forget the Obama administration basically took over all student loans. All defaults are paid by the taxpayer.
22
I think what a lot of commenters (and writers on this topic) fail to understand is that those of us with crushing student loan debt would love to go back and change our decision to take out so much, and to make a better choice, but it's done and over with. We're simply trying to move forward at this point. The problem now is that we are currently taxpaying members of society who are under enormous financial strain after simply doing what we were told by well-intentioned adults that we should do when we were far too young to understand the implications of our actions. I have over $200,000 in student loan debt that I accumulated before I turned 25 (!) and can't afford to buy a home or invest significantly in the stock market; my parents are aging and I have significant concern that I will be unable to assist them. I have very little liquidity. From an economic standpoint, this is going to become a crisis very soon - we are certainly not alone. Additionally, if I default, I could lose my license to practice, and thus lose my job. This needs to be addressed on a national level, because we are drowning.
326
Hang in there. Run for office. Two things that can be done: 1) the biggest thing is to abolish student debt; 2) the second biggest thing outside of abolishing student debt is a full repeal of the 523(a)(8) undue hardship exception. And as far as a crisis--it already is for millions. It is a crisis for anyone who has to unjustly deal with a mountain of debt in order to get an education.
2
@KS: I would honestly be interested in hearing what you wish you'd known at the time, or that you think was not explained to you clearly, that got you into the situation you're currently in. Because it seems like a lot of over-optimistic students are jumping into loans without TRULY knowing what they're jumping into - or maybe a lot of loan companies are lying to students & their parents. Or maybe both!
Being young, optimistic and not clearly seeing the long-reaching financial implications of student loans is obviously a very bad combination for a huge number of people.
1
The reality is that most people are more interested in being self righteous and superior, Objectivist rather than address the issue. It makes them feel good. They have theirs and in no way can understand how societies benefit from investment in education. They ignore stagnant wages, jobs offshored, corporations who illegally use H1Bs to import low paid work...and the neo-Calvinism can be found as much with progressives as those on the right.
3
While I think that higher education provides a benefit to society as well as the individual, and should be made as freely available as high school, I disagree that "...going to college is still the only way high-achieving, lower-income students can hope to get a good job with a decent wage." Some training beyond high school is necessary, but a four year degree is not. There are many community college programs leading to well-paying skilled occupations; coding academies for those interested in computer software; city, county and state jobs that pay far in excess of the salaries offered in the private sector; and even still a few extravagantly remunerated industrial positions with public utilities and defense contractors.
30
"should be made as freely available as high school,"
No school is free. The question is who picks up the tab.
1
I was afforded the opportunity to go to college debt free due to my parents finding a way to put money towards my degree. When it came time to go back to school for my Masters I used 5k a year tuition reimbursement, had 2 sometimes 3 jobs and managed to graduate without debt. I chose schools that were reasonably priced and within budget. I even took an extra year to graduate with my MBA just so I didn't have to take out loans. My decisions were made at 18 and at 26. My parents gave me a list of schools to choose from for my undergrad and I chose for grad school. I have friends who all say the same thing to me when they discuss their debt 'I wish I had taken longer and been smarter.' I respect the issues people face, but simply can't relate.
31
There’s an unstated (extremely ingrained) idea planted in the youth of today that there is one, only one, ‘right’ way to walk life’s path. It’s unfortunate and financially crippling for many. They graduate and are then hamstrung with debt, preventing them from being able to fully participate in our economy. As far as I’m concerned, higher education and those who provide it all fall under the same name; IOU University. The process is definitely not making us competitive globally. I wish many, many more could tell stories like yours. The reality of it is not even remotely similar.
8
Parents are a very important guide in these decisions. Getting a student loan was not even an option for my working-class parents. It was unthinkable. I went to the nearest state school, lived at home, worked for pocket money while my parents paid the tuition as the bills came -- at great sacrifice, I understand now. I eventually won a student leadership position that came with a half tuition waiver so I could help them out. When it was time for graduate school, I looked at my options, looked at how much I'd make in my chosen field, and decided against my favorite choice: a private school in another state that would have cost me $60,000 just in tuition for my Master's. I went to my state's flagship state school and took on as little debt as I could. I worked an office job and tutored foreign students in English. I ate raw spinach salads every day for lunch because spinach was nutritious and a bag lasted me all week. I sold plasma and did psychological studies for money. I borrowed some of my class books from the library or used reference copies. Then, when I graduated I paid off my $15,000 or so in debt in about 6 years by living frugally. Writing this I sort of marvel at how careful and conscientious I was, but it's not that I'm a naturally careful person. My very frugal parents drilled it into me, and I feel for people who didn't have that kind of direction -- much to their life-long detriment.
22
There's another problem that no one seems to mention. I graduated from college in 1972, and went on to a private, not for profit law school. Tuition: $1,000 per semester. It was paid for by some help from my family, savings, and left over GI bill from the Korean war. Half way through, the school raised tuition to $1,500 per semester, and created such a stir that we were grandfathered it at the $1,000 rate.
Today, tuition at the same school is $30,000 per semester! I can only assume that it is payable only because of the availability of student loans. They may have driven the increase in cost.
In addition, many other law schools have opened, several of which have the reputation of being wildly inferior, with a low pass rate on the bar exam.
Maybe a good part of the problem is the easy availability of these loans to students (not Mr. Arceneaux) who shouldn't be in these schools in the first place.
85
There are many state law schools that charge less than $10K/year.
The abysmal pass rate at the bar is not due to the school - it is due to the students that chose law school despite all indications (low LSAT, low grades) that they should not attend.
1
Steve, correct. But it is best that you go to school in the state in which you intend to practice. And it would be best not to lend money to someone with low indications. I think you are just agreeing with me.
1
Thank you for sharing your experience. As a public school teacher, I know many students who are sold the idea of higher education as a golden ticket. College is important, and I encourage my students to find a viable way to pursue a degree. I also encourage them to see through the marketing gimmicks and make realistic calculations about expenses and future income.
71
It's really a well disguised Ponzi scheme. Invest your money, incur debt, then reap the rewards. But like Trump Univerdity there are no rewards for most, just a decades long burdensome debt.
Unless the teen has a LOT of experience with work, earnings, paying off credit card balances, and the general cost of living, they are not in a realistic position to understand how a loan today translates into so much monthly payment after college in a few short years. But their parents or guardians should understand this! They all should be using each prospective college's cost estimators, and the parent/guardian should characterize the loan repayments in terms that they and the teen may appreciate, such as it being the equivalent of paying for several cars at the same time, or whatever amount and relevant index is useful. And let's fund public schools well, so that people continue to see them as affordable, excellent educational choices that leave the student able buy actual cars instead of repaying loans!
42
Carolyn - You've nailed it in that part of the scenario is that we have "protected" our children from gaining any pre-college experience as a worker. Among my son's peers, those who had have some kind of job, even in the family business, seem almost immune to the siren song of massive college debt. They understand the flow of money through their lives.
To the commenters who describe the real problem as college tuition costs, you're right but that is an effect of student loans. When parents or students were writing checks against their personal funds each semester, sudden increases were challenged vociferously and often and the budget was not open-ended. As colleges discovered how costs can be piled on without too much squawking, they did just that. Anything that is perceived as "free" is allowed to rise in real costs almost without bound (see medical costs as another example).
11
You can tell an 18 year old, but not much.
It's actually amusing to see how these suckers con themselves into big ticket student loan debt.
1
I'm going through the same thing. How does one pay off student loan debt when the good paying jobs are non existent, and 100 people apply for 1 position? I have to live with my mom because the $500 a month I owe each month in student loan debt makes it impossible for me to afford even a tiny no bedroom apartment. The one thing that keeps me going is that there's millions of other people in the same situation I'm in that keep going. Maybe eventually I'll be able to discharge this debt, or by some miracle get a job that allows me to be an independent person for once in my life.
41
To Chris
A very harrowing testimony which the self-righteous amongst the commentators here and elsewhere leave unanswered. There are not enough decent paying careers to match up for all deserving graduates drowning in college debt. We now live in a time when working hard, keeping your nose clean and getting that diploma simply do not matter anymore. Society is doing nothing but churning out better educated members of the unemployed class. Where are those 'great' jobs supposedly generated by the new breakthrough technologies ? Not so common, really. And remember -- it is not the capitalist system's virtue to deliberately create jobs, employees are viewed as nothing but a drain on corporate profit. TodayToday we are all are on our won
1
Did you ever consider relocating for a job? You know - leave the most expensive city in the Americas for some place more affordable with a shortage of workers - you know like millions of Americans used to do.
1
Colleges and universities also bear responsibility in another way. When I went to college, it was actually possible to work your way through college. University programs are now designed in such a way that semester- or month-long practicums, immersive and out-of-country "experiences" are required, making it nearly impossible for students to meet their course requirements and maintain a part-time job. Let's identify and promote schools that advertise not just graduate hiring rates but also the number of students who graduate with less than $5,000 worth of student loans.
62
In the 1970, college tuition was 7% of the median income. Today, it is 25% of the median income. Since I graduated from college in 1980, the cost of college has more than tripled and the minimum wage has doubled.
The issue is not experiences or practicums, the issue is the cost of college relative to what a student or recent graduate can realistically expect to earn.
22
No one graduates with less than $5k. Low amount is $40 k. Middle range is $60 plus. $5k won’t cover even one semester.
2
I attended an in-state University, worked 20 hours a week, full time over the summer, was a resident assistant, and got a degree in engineering. For some reason, I just can't relate.
110
@Tom Stoltz: You left out the time and cost. When did you do this? How high was the cost?
26
It is always difficult to relate to people who have made choices that differ from our own. The question is, are we willing to get past our own myopia and consider how things are for others? If we're lucky, somewhere in childhood, we are around people who can do this and we start to learn ourselves.
45
I can't relate either. I also attended an in state university and worked full time (2 or more jobs at all times) to pay that tuition. Did we just have a better work ethic? Did we just not expect things to be given to us? I don't know. I do know I worked very hard and I am still the same way today. It has served me well. I've never had a loan other than my mortgage and a very low cost loan for a Honda once.......never any credit card debt.
8
It is capitalism run amok when we handicap a large percentage of our graduates with a crushing debt that not only deprives them of the freedom to follow their dreams but deprives all of us from their young minds ever reaching their full potential.
Great innovations come from creative minds pursuing a larger vision, not quick cash. Would Bill Gates ever have created Microsoft if he came out of school $100,000 in debt? (OK he was a dropout, but that's beside the point).
45 years ago, many state systems had tuition free universities. We've allowed prices to escalate and the burden to shift towards students with no study of the consequences. It is certainly one way money shifts to the investment class- that's where the interest fees end up. Anyone not getting a piece of that action is on the losing side of our new system of exploding student loans.
120
Agreed, tuition costs are out of control and I just don't agree that kids understand the consequences - if so many of them are in this position, it's a systemic problem, not an individual mistake.
And Bill Gates was able to drop out because his dad was a wealthy lawyer. He had a safety net. Working class kids do not.
18
The crushing loan repayments also lead to other hidden problems. Inability to get any other type of finance as well as crushing interest repayments is making graduates ability of reaching a comfortable middle class (or beyond) lifestyle unattainable.
Is it also any wonder that new business and start up creation is at an all time low in amongst those under 40? Nobody has the time or freedom anymore of striking out on their own to pursue the next big idea or industry. Not least while you've got the financiers henchman breathing down your neck every week for the next payment
The author of this piece comes from Houston, Texas, a city and a state with many excellent colleges and universities, some of which would have been free to low cost for him. Instead, he chose a prominent private HBC in DC and incurred tons of debt by borrowing from a bank (federal student loans are low interest and come with many protections from being overwhelmed by debt).
The fact that he received many scholarships say he is bright and had good grades and test scores. If he graduated in the top 10% of his high school class, then he had automatic admission to all Texas state universities, where in-state tuition is minimal. Most state schools have good work/study programs for disadvantaged students that obviate the need for private loans on top of federal loans. Or he could have chosen a school in Houston and (gasp!) lived at home, eliminating the need to pay room and board, much less the airfare for going back and forth to DC!
People give way too much importance to the so-called "need" to attend a prestigious private unviversity, as well as the need/attractiveness of going out of state to school. UT Austin would have provided this young man an excellent education w/o anywhere near the debt he incurred to go to Howard. He could have gone to Rice and lived at home. Choices have consequences, and it's high time people started accepting that and quit whining.
3
Then we wonder why we don't have enough doctors, nurses and others available in our country? Depending instead on state educated ones from foreign countries.
American students can't compete with those who are educated overseas on their nation's dime. Many can't afford to go on to grad school because of the costs incurred in higher education. We are putting financial millstones around the necks of our young adults. Then they can't afford to buy much or put a down payment on a home. They are robbed by the system straight out of high school. I've a friend who just completed paying off her student loans at age 40. I know she and millions others like her will never get ahead.
The banks eat our young. Meanwhile we import immigrants from other countries who have a free or low cost educational ride. It's an uneven table. We must invest in the futures of our students. Especially anyone who is willing and able of becoming a doctor, nurse, et al.
268
Dr's are limited by the number residency programs not by school costs.
2
Actually, “importing” doctors from overseas who benefited from a low cost education is saving american society a ton of money by NOT having to pay for their education. The blowback comes later when society can not afford health care.
The problem with the high cost of the US Health Care system starts at the graduate school level. It should be free to the student who earns a place. Society needs to pay the full cost of the education in order to reap the benefit.
2
You can become a registered nurse via a community college in 27 months. Pass the nursing board exams and start earning $5,000 per month at age 20.
3
When I went to college in the late 50s and 60s, most of cost of my education was borne by a left over commitment to WWII veterans. Also the panicked reaction to Sputnik created a very strong incentive for the government to pour money into college science programs. Now our state and federal governments are planning for one year and planting rice instead of planning for a thousand years and building schools.
48
When I read these stories of student loan burden I am always puzzled why some one, even a fiscally naive teenager, would leave their home state, particularly a state with a strong and low cost public university system, to attend a university at much higher cost and far from home. Howard over the University of Texas? Really? Because the Howard recruiter was very handome and inspiring? Other 18 year-olds and their co-signing parents should take heed. An excellent education can be obtained in most cases close to home through state junior colleges and universities. Ambition, talent and hard work count far more than the name of the school on the diploma.
266
I have children at the University of Texas. The tuition is no longer low and it varies by major. Top state universities now have tuition that rivals that of private institutation.
1
Those who go to get an MBA at Harvard have a very good idea of what they are paying for: what we used to refer to as the Rolodex. Talent and diligence will take most only so far without the equivalent of that Rolodex. For many, maybe most, you can't get in the front door without the Rolodex.
1
Parents are mostly to blame here. Kid can have pie in the sky dreams but the parents should have said no. I did this in several instances with my own kids. At some point one needs to take responsibility for one's actions.
1
Back when I was college age, there was a federal program where you could get your loan forgiven, gradually, by teaching school. Given our teacher shortage, this could help a lot of young people, and help our schools at the same time.
32
So you think having indentured servants as teachers would benefit the next generation of students? Not so sure about that one...
1
I had a great time in college. But I tell my kids to have a great time in high school, get involved, make friends, explore subjects that interest you. College will have to be more practical. The calculus they teach at the community college or the in-state universities is the same Calc they teach at the luxury colleges they are trying to lure my kids to. Some kids' parents can afford a 4-year intellectual dive/party blast/brand name experience at a school with a 60k a year price tag. Others will shoulder immense debt. We'll try to steer our kids in a more affordable direction. But it's tough, when their friends are heading off to big-name colleges and they know that they work as hard and deserve as much.
122
"The calculus they teach at the community college or the in-state universities is the same Calc ..." Often, it is not. It may be watered down, or at the prestige university it may be a very advanced treatment that isn't even offered as an elective at most places.
68
Um, no. I went to a nationally recognized private school, and took classes at the local Community College over this summer to finish sooner. The General Ed classes I took there were of the same caliber.
There is no Advanced treatment of basic calculus. That would be the next level of calculus.
7
I went to a private undergrad and took a few classes at a well-regarded community college when applying to grad school.
The CC instructors were good for the most part, and in a math or science class the basic curriculum will be fairly uniform. But the CC student body definitely struggles more on average (with some notable exceptions) and slowed down the pace fo instruction in each of the classes I took there. And the assignments, testing and grading were laughable - I think my lowest grade at CC was a 98% or so. Meanwhile, I had some classes in "regular" college where I had to work hard for a B+.
Of course I don't think it makes sense to take on another $50k in debt to avoid CC, but it's not remotely the same academic experience.
11
Student loans as done now are pulling down the economy, we would have had a faster recovery for consumer spending without it. The loans also allow colleges to increase tuition endlessly year after year regardless of students'ability to pay. They subsidize aggressive capital programs athletic facilities and runaway construction projects. in the meantime teaching is done by lower-paid assistants (who are discouraged from joining a union of course). Because of heavy student loan debt, younger people are putting off marriage, foregoing having children, and those cumulative decisions will have a long-term social impact. Even those with chronic illnesses that affect employment, or disabled former students are finding it difficult to have the debts discharged. However, the younger generation has not come together as a united voice to influence policy on this issue. The only relief in sight would be wage inflation, which would increase the pay of graduates and make it easier to pay off the loans.
92
@GY: What you say is partially valid but not quite right. The heavy use of adjuncts is common and scandalous, but uneven. On average, some teaching is done by low-paid graduate students and adjuncts, but how much varies greatly from place to place. Some of those people are excellent teachers, too. On the other hand, you left out the enormous expansion of administration and the power of top administrators to extract large salaries, sometimes insanely large and/or corruptly obtained (as at Adelphi, years ago).
8
Writing off the student loans, particularly the private ones, would do far worse than just "pulling down" our economy.
Think about that for a while before you respond, GY.
2
Our daughter went to medical school based on loans. She accepted loans that were set around 6%. She was not allowed to refinance her debt at competitive terms. Why? Her cost just to pay the interest, not the principal, was high, even with her medical degree. So, her husband's parents and her mother loaned her the principal at 3% just so that she could start paying off the principal. She was able to pay off the principal of the federal loan. This was an easy decision to loan her the money since banks were paying 1% or less interest rate.
What I really want to know is why students can't refinance their loan at a lower rate? Everyone else can: homeowners, car buyers, businesses, even our own governments at the local, state, and federal levels. WHY NOT STUDENTS?
634
@Charlie Fieselman: And student loans cannot be discharged in bankruptcy. The answer to your question: Corrupt legislators who don't represent the people. Both Democrats and Republicans, but the latter are much worse, on average: look what the Republicans are doing to the Consumer Financial Protection Bureau.
36
I believe the idea behind not allowing bankruptcy protection for student loans is so that the risk is spread among those taking the loans. Other taxpayers, many of them who never went to college, would not end up footing the bill.
9
Exactly. I graduated with $97,786. in student loans from NYU at an interest rate of close to 9% about seven years ago. I completed my first two years of college at community college and two years at NYU.
I don’t expect college to be free but why can’t the interest rates be nominal to cover costs? Why do big banks get all the breaks. It took me 8 years to pay off NYU. I waitressed almost every night after leaving my day job to pay off the loans.
13
"After I received my diploma, I immediately owed almost $800 a month in private loans, with 12 years to pay it off. That’s not counting the few hundred dollars I pay each month in federal loans."
Yes, well, attending a private university in DC will do that for you. A plethora of good, (more) affordable, state schools around the country offer an education (at least an undergraduate education) for much less. Many of them offers scholarships based on merit or financial need. In many circumstances (based off of dozens of friends who have done so), students pay nothing either based on family ability to pay, or merit. The fact that some people choose to go to pricey, private schools in pricey cities, is unfortunate when those choices don't pan out into making $100K right out school. However, people make financial and investment choices just like any other situation (like when purchasing a house). Even 18-year-old students ready to ship off to college can understand big numbers.
58
I think it is overwhelming for 18 year olds to make those kinds of choices with no guidance. My daughter applied to private colleges that run up to 60k . They offered merit scholarships that brought it down to around 25k which was the same as in state college living away from home. That is still a great deal of money. However my point is kids need more guidance with this, an informed person who can point out the pitfalls and where to get financial aid etc. otherwise they are going to make theses kinds of decisions. After all this county touts that you can be whatever or achieve whatever if you work hard. The fine print is massive student debt if your dream is a college education.
106
Amen.
As someone who attended an enormous, in-state, public school, worked straight through, and had a mediocre college experience but came out with relatively low debt, it's hard to be overly sympathetic with this.
6
Where are the parents in this discussion?
You can't claim to be "wards" of your parents until the age of 26 and then ignore them on matters as influential as a lifetime of educational debt.
The student loan issue sees a fair amount of abuse by the banks, but those taking out the loans share as much, if not more, of the responsibility for the messes that they get themselves in by borrowing on an ill-defined dream of the future.
4
There are several issues here. First, there needs to be more disclosure of terms and conditions of student loans, in explicit and detailed terms so that students really know what they are getting into. They should know that debt is a burden and not an easy way to immediate gratification.
Second, there needs to be limits on the total amount a student can borrow and those amounts should be much lower than they currently are. Tying aggregate borrowings to expected future earnings probably makes sense.
Finally, we need to look at who really benefits from student loans. It's generally not the student. The ready availability of student loans has allowed colleges to increase tuition and fees at rates well in excess of inflation. It has also led to the proliferation of for-profit schools looking to make easy money off the taxpayer. My personal opinion is that the schools which receive the proceeds of student loans should be responsible for payment if the student defaults. Then they might be more careful about who they lend to and how much.
178
" .. there needs to be limits on the total amount a student can borrow and those amounts should be much lower than they currently are .."
Absolutely. A prudent rule, when student loan borrowing exceeds the first year's salary -- that student is headed for real financial problems.
The student should plan carefully, and stop spending, if necessary. Now. Today.
2
With loans, more students (especially those from families who don't own a home and make less than $250k/year) are able to afford to send their kids to college. Student loans are the means by which school administrators, for-profit and not-for-profit alike, are able to keep enrollment up and pay themselves large salaries. Most Americans cannot afford a college education.
I am sure that school administrators do not think they are part of this problem but when reframed in this manner, it is clear that federal and private student loans are funding the complex and expensive bureaucracy that underpins most universities.
4
Nowhere in your good discussion, Mr. Waddell, is there an admonition that the dreaming student get his expectations in line with reality.
And isn't that the real problem...students betting their futures against far longer odds than they are willing to admit?
3
There are some days when I look at my federal student loans, at a whopping 7%, and think the same thing. Why did I make the choice to pursue education? How is it that we finance cars and homes at lower mortgage rates, but not in investing in the education of our society which has greater benefits beyond just landing a job. There are times when I think about ending it all. But I guess the point is to keep trudging through, and hope these things will eventually be gone by the time I retire. I feel you.
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Jennifer - I can't know for sure what you mean by "ending it all" but let me assure you: your life isn't completely defined by your debt or the understandable anxieties that debt entails. I had student loans into my 40s from two stints in graduate school, and I was also a single parent. It was really hard to watch peers travel and have international adventures while I could barely pay monthly bills. I was careful and diligent for many, many years. Now my own student loans are gone (my mortgage and car loans remain, natch) and I'm watching my son navigate college.
Education adds value to life that goes far beyond any salary, and is worth more than any loan. Please believe that it will get better. You invested in yourself, not just in the promise of future employment.
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The high rate of default might be part of the answer.
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Please don’t end it all. You have a long life ahead of you. I am 67 and the times I thought about ending it all had to do with money. Things will work out, it may take some time but they will. I made some bad financial decisions, ended up selling my house on a short sale, and moving to a less affluent neighborhood and renting. Guess what? I like it better. If all that had not happened, I would not have ended up here. Hang in there. Positive thoughts coming your way.
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I am one of those fortunate college graduates who attended the Univ. of California in Berkeley during the 1950s when tuition was free. I'm sure the state as well as the students benefit when education is freely available.
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Today, California spends $31.5 billion a year on Medi-Cal. In the 50s they spent nothing. How many students could go to college on $31.5 billion?
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Almost everyone aging in place in Congress and the State Legislatures went to university when it was practically free. They created the problem downstream.
4
Free? Not really. Someone, likely taxpayers end up paying for this "free" education. There are plenty of lower cost options. Go to a community college for the first two years and you can save a lot.
3
My heart goes out to you. As a college professor, I have repeatedly urged my students to be careful of getting too deeply into loans (though mine is one of those low-cost state universities). At the same time, I know that the students who work while in college to pay their bills have a hard time completing their homework, sometimes even missing classes due to employers who may insist they do shifts during class-time. It's a catch-twenty-two in many ways, and very unfair. It's also bad for the economy as talented students like you cannot fully unfurl their talents by taking those risks that the "new economy" folks keep promoting.
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@Bbwalker, as a college professor, I endorse this. I have seen enough students at my well reputed school whose schoolwork is obstructed by having to support themselves.
12
Even "low cost" state schools cost a lot of money. They tend to keep the "tuition" low while raising R&B and other "expenses." Politicians and administrators can argue with a straight face that "tuition is low." It's a big shock to discover that the total costs have gone way up. Who can send their kid to school and not also pay for R&B? It costs about $100,000 for a student to attend a SUNY (unless you qualify for the Excelsior and other low-income scholarships).
$100,000 and that doesn't include transportation for getting 8 hours there and another 8 hours back to NYC, if that's where you're from. Crazy daisy times we have here . . .
1
The root of the problem is capitalism gone wild. Like other nonprofit institutions, including our political parties, the colleges are now headed by business minded types whose main goal is to maximize the cash flow, and not incidentally their own salaries. But the main problem is that local governments are starved for cash so they can no longer support education. The reason is that the Federal government no longer returns a large part of its revenues to the States as it used to, because the money has to go to the out of control MIC, which amounts to welfare for the rich. Of course it can't go on like this for ever. When the national product is stripped of productive enterprises, and amounts mainly to the financial industry and the arms industry, the economy is going to collapse. It can't happen too soon in my opinion.
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