Some hard-working recent graduates notice that their less-focused friends who studied liberal arts, rather than engineering or accounting/business, are taking jobs with amusement parks and restaurants, while moving back home with parents. Of course loan repayment is deferred, which can double the loan's balance in a surprisingly short number of years.
My point is that higher education is overpriced. I attended the UC system in the mid-1980s, and paid about $1,200 per year for tuition. Tuition is now around $12,000 per year for the same school. Private schools can run up to $50,000 per year. This has way outpaced inflation. The cost of the education is even higher if you factor in 4+ years of lost wages while in school. Is there any way to get this under control?
Of course, there will always be some parent willing to foot the bill to send Sammy to an expensive college so that he can "find himself". He may graduate with a useless degree which only means he will have to ask his parents to finance another 4 years so that he can "really find himself". Then with a J.D. or a phd in hand, perhaps he will be mature enough to handle real work in the real world. Lucky kid with rich parents.
But for the rest of us, is it practical to rack up $200,000 in student loans in order to get a job that pays way less than the average $42,000 per year salary? How exactly is this practical? Should loan companies (er, now the government -- eyeroll) look at the earning potential of degrees before shoving huge piles of money at young adults who were children just the prior year? That is, if the graduate gets a job at all, and youth unemployment is much higher than average, some say over 50%.
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I don't dismiss this is a problem, but maybe, just maybe these kids should stop demanding dorms with private bathrooms, granite counters, and flat screen tvs. One of the reasons that the prices have gone up as high as they have is because of the ability to get the government to back the loans and the never ending demand of kids who are not used to hearing no.
I paid for my own education, as my parents who were older didn't see the need for a girl to get a degree. I lived on next to nothing for four years and worked almost full time.
I think it is Michigan or maybe Michigan State that is adding all these goodies to the dorms due to demand. I am sorry, if you want all that it has to be paid for. We are raising a bunch of kids who have such a sense of entitlement and the parents who don't raise their kids that way, are still be forced to pay for the ones who do.
JACG, precisely. What ever happened to families saving for college. Is that a joke? Does anybody do it anymore? Or are modern families too busy buying flat screen TVs and SUVs to save for their kids' education.
Also, if the loan-ers would be more selective and make smaller loans, that might force down the cost of tuition, and might make bloated university bureaucracies take their bottom line into account.
I'm an older student. I'm 44 years old. I'll graduate with my B.S. next year - when I'm 45. I'm gobsmacked at how much my tuition costs are (as much as my mortgage).
I have never been willing to take out a loan to finance my education. Because of that, I've had to wait until I could afford to go.
There are many other areas of study that interest me more than my major. My major means that I can make the kind of money I need/want to make to maintain the standard of living I want.
It's not a hard concept. Don't spend more than you can repay.
Congrats on your degree. Graduating without debt? That's what I'm talking about! Well done!
Dorms with flat screen tv's and granite? I have one of the two in my house, can't afford the granite yet.
I shake my head at how much money it costs to obtain a degree, not only tuition but the books are atrocious. I'm going to be almost old enough to retire by the time I get this degree but thank God I will not have incurred debt. I'm not going to be quite old enough to retire but it sounded good! lol
Things I've heard in my travels in the news and on the web recently.
The 1% guy who was at the Occupy in NYC was saying that "government guaranteeing the loans is what drives up the cost"
What I understand so far about oblabbers executive order is that essentially students will only have to fork over 10% of their "disposable income". Do people Have disposable income? Especially new grads?
Similar to the law that lets people pay doctors and hospitals only what they can afford, this almost amounts to free college for everyone. Meaning that WE (taxpayers) pay for it.
I can envision the whole college/university experience being degraded as a result as everyone piles on.
No one seems to be talking about that yet, but this is what I know about it so far.
Oh Darlin, present company excepted! Congrats on getting through debt-free. We live longer now, so the old retirement dates are 10 to 20 years outdated, no worries.
Kid, I knew nationalization of student loans was some kind of nefarious plot. I doubt we will be able to undo that. Nobody understands what was done yet. It will be hard enough to undo Obamacare.
Excellent post, Opie!
I have taken out too much in college loans but due to illness and other unbelievably crazy circumstances I still have yet to attain my bachelor's degree. Thankfully not even close to $200,000, heck not even $100,000 but still way too much money. I still think I need at least a bachelor's degree in order to help provide for my family. I'm really in a catch 22 situation where I need a degree to have the ability get a good job but don't have enough money to pay for it myself due to only having low wage employment. Ending the government's backing of these loans would help the situation. I also think new construction, remodeling, and adding this or that amenity to the dorms and other areas on campus is adding to the big increase in tuition.
At the rate things are going, most American's won't be able to afford a car, or a house or pay off college loans or ANYTHING!
College was good at one time, when it was cheap. I think the profiteering of many colleges now, esp. the on-line ones, have sold students a bill of worthless goods. What good is a BA 4 year degree, when all you can get is a job at McD's if that?
I'm glad I have my degree now. Learning is good, but I'd advise do it on your own, and don't become saddled with lots of debt, it really won't help you get a job...better to go to a trade school, the pay is more when you're working after learning a good "blue collar" trade.
Okay, short version: I got out of college in 1992, started paying back on the $16K of loans I'd taken out.
1993: lost my job. Contacted the loan folks, told them what happened, they deferred my loans for six months. Four months later I was re-employed, contacted the loan folks and asked what my new payment would be.
I asked, in writing, every month after that for a year - and never got a reply.
Fast-forward to 2008: I get a letter from the Department of Education. My loan is now $38K and they want the full payment NOW; in fact, they would garnish a portion of my Social Security Disability payment to start paying it off.
After wrangling with these folks, with Social Security (because of my disability) and two or three OTHER government agencies who are all, apparently, involved in student loans (and we wonder why our government is so expensive and so hopelessly clueless about things), they are 'investigating' and they're no longer garnishing my check.
That happened in March - and I haven't heard from them since (a lot like my original problem with the loan folks).
Get a student loan? I wouldn't recommend it to ANYBODY.
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