I’ve been saying this in my lectures about college admissions for the last five years. Read the entire article here. WELL worth your time.
“Placing the Blame as Students Are Buried in Debt”
By Ron LieberLike many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it….Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.
This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes…..
It is utterly depressing that there are so many people like her facing decades of payments, limited capacity to buy a home and a debt burden that can repel potential life partners. For starters, it’s a shared failure of parenting and loan underwriting.
But perhaps the biggest share lies with colleges and universities because they have the most knowledge of the financial aid process….
Ms. Munna started college at age 17 and borrowed as much money as she could under the federal loan program. To make up the difference between her grants and work study money and the total cost of attending, her mother co-signed two private loans with Sallie Mae totaling about $20,000.
When they applied for a third loan, however, Sallie Mae rejected the application….So before Cortney’s junior year, N.Y.U. recommended that she apply for a private student loan on her own with Citibank.
Over the course of the next two years, starting when she was still a teenager, she borrowed about $40,000 from Citibank without thinking much about how she would pay it back. How could her mother have let her run up that debt, and why didn’t she try to make her daughter transfer to, say, the best school in the much cheaper state university system in New York? “All I could see was college, and a good college and how proud I was of her,” [her mother] Cathryn said. “All we needed to do was get this education and get the good job. This is the thing that eats away at me, the naïveté on my part.”
Pause for one minute while I insert my own opinion. Maybe–possibly–it was worth going into debt for an Ivy League (or equivalent) college thirty or forty years ago, when such an education actually did make you a member of an old-boys’ network that would provide you with contacts and the inside track towards an enormously profitable career; maybe, thirty or forty years ago, the investment had a chance of paying off.
If that was ever true, it isn’t now.
…[W]hat was Citi thinking, handing over $40,000 to an undergraduate who had already amassed debt well into the five figures?
Er, interest???
….Today, someone like Ms. Munna might not qualify for the $40,000 she borrowed. But as the economy rebounds, there is little doubt that plenty of lenders will step forward to roll the dice on desperate students, especially because the students generally can’t get rid of the debt in bankruptcy court.
The financial aid office often has the best picture of what students like Ms. Munna are up against, because they see their families’ financial situation splayed out on the federal financial aid form. So why didn’t N.Y.U. tell Ms. Munna that she simply did not belong there once she’d passed, say, $60,000 in total debt?
“Had somebody called me and said, ‘Do you have a clue where this is all headed?’, it would have been a slap in the face, but a slap in the face that I needed,” said Cathryn Munna. “When financial aid told her that they could get her $2,000 more in loans, they should have been saying ‘You are in deep doo-doo, little girl.’ ”
That’s not a role that the university wants to take on, though. “I think that would be completely inappropriate,” said Randall Deike, the vice president of enrollment management for N.Y.U., who oversees admissions and financial aid. “Some families will do whatever it takes for their son or daughter to be not just at N.Y.U., but any first-choice college. I’m not sure that’s always the best decision, but it’s one that they really have to make themselves.”
….Urging students to attend a cheaper college or leave altogether suggests a lack of confidence about the earning potential of alumni. Nobody wants to admit that. And once a university starts encouraging middle-class students to go elsewhere, it must fill its classes with more children of the wealthy and a much smaller number of low-income students to whom it can afford to offer enormous scholarships. That’s hardly an ideal outcome either.
Finally, universities exist to enroll students, not turn them away. “Aid administrators want to keep their jobs,” said Joan H. Crissman, interim president and chief executive of the National Association of Student Financial Aid Administrators. “If the administration finds out that you’re encouraging students to go to a cheaper school just because you don’t think they can handle the debt load, I don’t think that’s going to mesh very well.”
That doesn’t change the fact, however, that the financial aid office is still in the best position to see trouble coming and do something to stop it. University officials should take on this obligation, even if they aren’t willing to advise students to attend another college.
Amen to that.
…[Ms. Munna] recently received a raise and now makes $22 an hour working for a photographer. It’s the highest salary she’s earned since graduating with an interdisciplinary degree in religious and women’s studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren’t being deferred, which would not leave a lot left over.
She may finally be earning enough to barely scrape by while still making the payments for the first time since she graduated, at least until interest rates rise and the payments on her loans with variable rates spiral up. And while her job requires her to work nights and weekends sometimes, she probably should find a flexible second job to try to bring in a few extra hundred dollars a month.
Ms. Munna understands this tough love, buck up, buckle-down advice. But she also badly wants to call a do-over on the last decade. “I don’t want to spend the rest of my life slaving away to pay for an education I got for four years and would happily give back,” she said. “It feels wrong to me.”
I say this to parents all the time, and I’ll say it now: if you’re well-intentioned and conscientious, there aren’t too many things you can do that will permanently damage your child. Kids are resilient. But allowing a child to take on thousands and thousands of dollars in college debt…yep, that will do it.
My husband and I are in our forties (late and early, respectively). We have many, many friends who are still paying off college loans. The need to make those payments has dictated where they live, what they do, and how they spend their time. For the last two decades.
There are many, many good colleges out there–affordable, if non-Ivy League, colleges that will give your child a perfectly good education without saddling them with twenty years’ worth of debt.
It is not worth it.
I only paid for one of my four degrees. None of those are from Ivy League schools. (In at least one case, WAY far from it.) I love what I do, and I have the freedom to do it because I’m not in debt. And never have been.
Will post shortly on our own college decisions once I get permission from my son (currently in transit between China and Australia, so not immediately available.)
In the meantime, read the article.
Thanks for posting this.
When I was a graduate student, I would have my algebra students calculate how much it would cost them if they had to buy individual tickets to each one of my lectures. NYU students pay about $21,000/semester (not including room and board), so someone with an average load of 15hrs/wk will be paying over $90 per lecture. At the UberStateU that I taught at in the Midwest, the students were paying something like $25 per lecture (over $60/lecture for out of state/international). Part of the purpose of this assignment was to encourage the students not to skip class, but it mostly just bummed me out when I realized how much I was getting paid to teach a class of 100 students.
“Did I really just give a $2500 lecture?”, I would think. Hmmm….I probably at least owed it to them to put on a clean shirt, and comb my hair every once and a while.
Tuition at my new school, a slightly smaller more selective +20,000 student school in the northeast, is quite a bit less — about $10/lecture.
Ok-ok. I know that not every penny of their tuition goes towards class time (+scholarships, etc.)–but there are lots of days when the whole operation just seems like a colossal waste. When I walk by the huge lecture halls, and I see half the students on Facebook, I am not encouraged. And, pandering aside, there are lots of days when, rather than lecture, it would be better for me to buy each of my students a copy of The Well Trained Mind, and for me to go home and take a nap. (Ok–maybe that’s pandering a bit).
Tuition at Midwest UberStateU has gone up 10% every year in the last 5 years; and at smaller northwestU, tuition is raised every year by the maximum allowed by law. Where does this end?
I don’t mean to sound so negative. I had a great experience in college ($4/lecture — what a deal!)– and I’m very grateful for it, and grateful to my parents . I just know a lot of people for whom spending a lot of money is just a bad idea (Section 104–11am). Even so, going away to college — and going to the best college you possibly can, at that– is such an ingrained part of our culture that I wonder if people are really willing to take seriously the compromises you suggest.
For many, the decision not to go to college, or to go to less than the most fancy school, might be just as stressful as any other decision they will face. And honestly, it is really difficult for a student to judge the quality of a school that doesn’t have ivy covered walls; and it’s not easy for parents to judge either. But I agree with you. There are great deals out there — If you know where to look.
Great article–thanks! I think homeschoolers and public school kids definitely should look into dual credit courses offered by local community colleges. In our area the courses are free for high school students. Killing two birds with one free stone? We’re in! I’d much rather pay for only two years at a large university instead of four, especially with three kids in college at the same time.
Ouch. Talk about some sticker shock! Well, not to be cruel, but I feel much better about my own student loan now. It’s a fraction of a fraction of that poor girl’s burden. Ideally, I have plans to get my kids into some of the free community college (in place of ) high school programs which have started up locally. That is, if they survive budget cuts in the coming years. If not, we will put them through the community college system, anyway. It isn’t a fancy credential (i.e. no ivy hanging from it and probably embossed with fools gold), but it is at least a start. After that, perhaps they can find an employer to help them pay for it (and we will chip in the difference).
There is always more than one way to skin that cat, although I’ve never really known why one would want to skin it in the first place. ;) Cats in bags, skinned cats, killing birds with stones–idioms are so cruel when it comes to animals.
Thanks for the article. I just recently started subscribing to your blog!
The following website looks like a good companion to this article:
http://www.debtfreescholar.com/
This is so true. Though I am not crazy about telling people that I graduated from Liberty, I, too, graduated with no debt. Being able to start a marriage and family without worrying about accruing interest was wonderful.
Such an important post. Thank you.
Many homeschoolers (like me) must experience this: you have family and friends who are just a bit skeptical that your kids could be receiving the same quality of education sitting at your kitchen table that other kids are at XYZ school. Then they see your child scoring well on the SAT, or doing wonderfully in art or sports or music or whatever, and you have that feeling of “See! Ha! They are just as good as anyone at that state-0f-the-art school…they are not being deprived.”
How much more will this play into the college choice for the conscientious homeschooling parent! It sure makes me (the parent) look like I did a good job, or at least as good as other parents, if my kid goes to a big name school.
When I do not remind myself of the reasons I am homeschooling – why I think it is best (not perfect – nothing is ever perfect) to take charge of my kids’ education, self-justification and self-defense loom large. This is especially true if you live in an academically competitive community and if people have a low view of homeschooling (“I knew a family once…” :)).
I truly believe in giving my children a cost-effective education, emphasis on effective. We will begin homeschooling my 6 year old in the fall and do so through the rest of her primary and secondary education. This will apply to my 4 year old as well after she graduates from kindergarten. (I believe kindergarten is very important!)
After seeing how public colleges work during my last 5 years as a community college instructor, I believe in NOT paying a bloated tuition fee and room & board for basic courses like English Composition, American History, Calculus, and others which should be easy for the student who maximized her experience in high school. All courses meeting the two year core curriculum (freshman and sophomore years) in college are transferrable from accredited state community colleges to accredited state universities. Since state institutions (at least in my state this is true) are accredited by the same organization, then community colleges and universities alike must adhere to the same standards, and community colleges do so with lower tuition rates and smaller classes than their university counterparts.
Duel enrollment classes are a way to save money on college courses, however, I believe these should only be taken after the high school courses are completed, not instead of high school courses.
My husband and I agree we will homeschool our children through high school and send them to our local community college to complete their core. Once they have proven they are responsible enough to manage their college courses and affairs as an adult, they may transfer to the university of their choice to complete their major field courses. We will be happy to pay all tuition, fees and room and board for field coursework. My husband and I have known too many friends with stories of their high achieving children going to a major state university and failing out the first year of college. Freedom without a sense of responsibility leads these students to waste their opportunity and their parents college dollars.
Of course another item to consider is the ability to find a job with the degree when finished. Being jobless and strapped with college loan debt is heartbreaking. In our area, more of the jobs available are for graduates with two year Associate degrees rather than higher level degrees. In fact, we have many graduates from the local university to come to our two year programs after not finding a job with their bachelor, master or doctorate degree.
I urge everyone to reconsider the idea of sending their child to a big name school for the sole reason of the name. In my experience, after my first job, no one ever again asked me where I went to college. The private sector only cared about experience, licensure, and board certification, in that order. Which college I attended seems to only be of recurrent interest to academic institutions.
Wow, I think you’re right on the money with that last paragraph. Just looking at my resume as an architect, it’s probably true that in descending order of importance:
1) portfolio (=work experience)
2) professional registration
3) graduate degree from state university
4) undergraduate degree from Ivy League
5) high school at elite college prep school
The costs were, in order of highest to lowest:
College, high school, grad school, professional registration (free – paid by my work), portfolio (I got paid)
Ahhh…these posts always take me back…perhaps that’s a sign that I am truly middle-aged (in my early 40′s as well). Over my 12+ years in the work force, I worked side-by-side, desk-by-desk, cubicle-by-cubicle with TONS of people from expensive, private colleges. (I graduated from a very good state university in Business Admin.) We did the same jobs, received the same pay, had the same level of contacts and responsibilities. The one difference was that I did not have 40K+ in student loans to pay off.
One of my jobs was at the Chamber of Commerce in a major coast city in the International Relations department (this was in the early 90′s, when international was *hot*). I did more “informational interviews” (that dates me) with people seeking to work in “international” that I care to remember. Nearly all of them had high-priced fancy degrees from places like “Thunderbird International School of Management” (high-priced school in Arizona), etc. Almost every single person I met with ended up at some non-international basic mid-level (at best) nondescript manager position they could have gotten without the advanced international degree. But the schools sell themselves as a “great place to gain that competitive edge, that knowledge base, etc.” and people buy it. A lot of it is bunk.
There are very few professions where the college you attend for your undergrad (or even grad degree) truly makes a difference. What matters is the type of degree and the completion of it.
One final note: in the article, the daughter’s choice of degree brings to mind the previous guest blog (“Girls, Science….”). Not to say this young woman shouldn’t have majored in Religion and Women’s Studies (or whatever it was)…but to choose to major in that AND to attend the most expensive school AND to graduate with 100K in debt….not good choices. And a very sad end for her.
Well, as someone who graduated in the last 5 years, I just don’t see how it will continue to be possible to pay for college without some debt. The costs are just rising too fast even at public institutions! Both hubby and I have graduate degrees from public universities, we worked our way through school (him full-time, me part-time), had parental help for undergrad with tuition, and we both still ended up with tens of thousands of dollars in debt! In my case, I even specifically chose a state university over more prestigious schools in order to minimize my costs.
We are both in careers that require licenses and Master’s degrees in order to acquire licensure, so going for less education was not a possibility without making different career choices. Obviously, we take responsibility for our own decisions and are accelerating our debt repayment plans, but it frustrates me when people think there is an easy solution to this problem. In my opinion a major part of the issue is the cost of college and associated fees in the first place. It would be lovely if there was some way for colleges to control costs and focus on providing a quality education at a reasonable price!
Two thoughts on this:
1. I have no pity for poor little Miss Munna, who will have to work now to pay her debt. Her choice of degree was under-researched (as was mine). Her choice of college was over-reaching (but mine wasn’t).
2. Years ago, my sister and I managed to scrape together our (also under-researched, now completely worthless) degrees in Social Work by doing this:
(a) Went two years to local state college while living at home and working paid jobs. The in-state tuition was 1/3rd of what other schools charged. Room & board were covered by parents; books, clothing, gas/insurance were covered by our jobs. We got all our Gen. Ed. requirements out of the way in two years or less.
(b) Worked full-time in paid employment for a year. Lived at home and saved almost an entire year’s income.
(c) Transferred to another college of choice for two more years. We had carefully compared the transfer requirements, so all our credits transferred into the second school.
Five years, two schools, almost NO DEBT (I had none, my sister had a small debt), and we both ended up with B.S. degrees in Social Work — which we used for years to make a living (until children came along). We both agree, though, our degrees would not make us employable NOW, because we could/would not go back into social work unless it was the only option to feed our families. We’re 43 and 45, with three children each — and grunt-level social work in New Jersey is not a “career” that grows old with you, KWIM?
If I could do it over again, I would try to TEST OUT of as much as possible. We didn’t know anything about testing then. I’d only heard of the SAT! But in my senior year I met someone who had tested out of so much she was a second semester sophomore. “How did you do that?” I asked, and she told me how she’d done it. I had no idea. We were so clueless….
i can totally relate. Although I don’t have the huge load of this woman, I have a debt that I will be paying off for many many many years. I was encouraged by my family that i “had” to have a college degree so I would never have to depend on anyone to support me (!!). I went to a relatively inexpensive state school and majored in a very dependable field where I knew I would always be empolyed (speech language pathology). I was careful to select a viable field. My pell grants would be taken care of if I worked in a public school for a certain number of years. So it seemed like a good idea to take on the debt (4 years of undergrad plus 2 years of grad school). I graduated, easily found a job and worked for…. 2 years. Then I got married and chose to stay home to raise our children. I am SO BLESSED that the Lord provides for us so I can do this, but it annoys me to no end that I let people talk me into getting a degree that I could not afford. I wish someone had encouraged me to either find a different way to foot the bill or choose a field where I didn’t need a graduate degree, or Something else. If the Lord wants you to go to college, He will provide a way that doesn’t leave you deeply in debt for the rest of your adult life.
It strikes me that maybe we (collective US parents) spend less time researching college options with our kids than we spend researching a much smaller purchase like a car or a computer.
Of course you need to consider the return on the degree that you are paying for. Maybe the return isn’t going to be an immediately employable credential. And there are circumstances under which that would be ok.
But to spend that much money on a degree that does little for you? At some point, isn’t that rather self indulgent?
As an “intellectual” (add self-deprecating smirk here) who studied Medieval Lit in as an undergrad and grad because it was what interested me–and who paid for my education with scholarships and by cleaning toilets while others were out partying–I truly enjoyed academia. I loved thinking, teaching, and writing all day. I wanted to be a professor. What a life! But the first day of grad school, our first-year advisor gave us a reality check. He explained to us that (at that time) only about 40% of PhD English majors EVER found a tenure-track position–even in a tiny school in some remote part of Alaska. I’m from Florida and that did not sound appealing to me. (No offense, Alaskans, I just don’t own a winter coat!) And when you are offered, you accept. No matter what. And add to that, I was a Medieval Lit specialist. There are no new Medieval Lit jobs being created. Basically, people like me are waiting for someone to retire.
That day was eye-opening, and that professor changed the course of my life. I didn’t go for my PhD, which I occasionally regret, but instead went into tech writing and teaching, which I love. I don’t think Dr. D did any of us, even the huge state U I attended, a disservice be being honest with us. But he did save me 4+ years of college and probably a student loan. Don’t get me wrong, I had to fight my pride. I would have relished being called Doctor or Professor (a LOT!). But that PhD will still be available when I’m ready and have the money to pay for it. And maybe by then I will be humble enough to give God the glory instead of congratulating myself for obtaining an advanced degree at such a superior school.
Jahna,
Had to chuckle (sorry) when I read your intended major only because today (especially), well, who would ever concieve trying for such a delightful major?
Commend you on your work ethics and planning. So many people have the benefit of hindsight–so few apply the use of foresight!
Mona
Just curious why no one has mentioned academic scholarships? I worked hard in high school, graduated a year early and selected my (Ivy) undergrad school based on applying for – a luckily – received a full academic scholarship. Grad school was paid for by living at home and working for 2 years, then living on a relative’s couch for 2 years adjacent to the (Ivy League) campus, while also consulting 1 full day a week.
The scholarships are out there, if you research them.
Our 3rd grader is already researching colleges and saving!
I just had to add one more comment, in response to Lissa, above. Lissa, you are right. College is soooo much more expensive than when I went to school. And, even more than college, is the rent, car payments (which you usually need if you are going to work through college), food. Everything is so much more, and that makes the decision on what college and what type of degree so much more pressured than when I was a student (MUST choose right college/major….the first time….at 18….with no life experience…). I mean, that kind of stinks for an 18-year-old.
I don’t know what to do about it, though. It’s just plain harder for the average student today than it was 20 years ago. You have to be wiser, younger, and with better advice from your parents and mentors.
I was very fortunate to make it through undergrad and law school with only $5000 debt, paid off easily the first year I worked. I worked, my dh worked, and we purposely chose to stay in state. I was astounded 25 years ago at how much debt friends and colleagues had accumlated. I’m just re-entering that world with my first hs graduate. I was always shocked at how much of the debt was unnecessary living expenses. While most college students claim to be poor, I see don’t see enough living the beans and rice lifestyle it takes to eek through school with little to no debt. Added to student loans are often credit card loans. And I would not for one minute place the lion’s share of blame at the financial aid departments. It’s somewhat ironic to me that adults smart enough to earn college degrees (and the parents who send them) want to play dumb about fundamental financial principles.
Lisa,
I graduated from high school in 1969 and never went on to college but into a full-time job as a Library Aide. I have home-schooled our son from third grade on and he will graduate from high school next year. One of the classes I will be teaching this year I call “Life Skills”. It will cover as much as possible all aspects of living on one’s own, money management included.
Mona
This was a great article. I think so many kids today go to school with absolutely no clue of how much it is costing and how long it will take them to pay it off.
Case in point, my younger sister. I’m not writing this to disparage her, but to illustrate my point. Ten years ago she enrolled at a small private school that cost $18,000 per year. When she started doing poorly midway through her first semester and my parents spoke with her about it, she said, “What’s the big deal? It’s only $1800 per year.”
I think we as parents need to talk with our children up front about how much college going to cost, where the money is going to come from, and what the ramifications are of having a high debt load at a young age.
Luckily, I was able to get a 1/2 tuition scholarship at the college of my choice and then I took an R.A. job that paid half my room and board. I graduated 12 years ago and my debt has been paid off for quite a while. I am so glad now that I’m able to stay home with my two preschoolers instead of being forced to work to pay off student loans.
Thanks for an insightful post!
I was clueless and spent my entire 30,000 dollar inheritance on 2 yrs at a christian liberal arts school. Plus a 4,ooo dollar loan. I smartened up a bit and choose a very reasonable instate school accumulating about 7,000 more dollars in 3 additional years in school. I could have worked more and lived more frugally but I didn’t do too bad.
I definitely made some mistakes but am so happy that afterwards I lived on “beans and rice” until paying it all off 4 years later. Oh the joy to be debt free!
There are some great suggestions here on how to do it much better. Thank you!
The suggestions
When I was researching colleges, I NEVER thought I’d go to a state school. I was always planning on attending a private, Christian university. But as I was applying, I was blessed to get a full ride to the honor’s college at USC (south carolina). Even though I never thought I’d go there, I knew in the long run that not having undergrad debt would be a blessing. I had always wanted to be a doctor, and now having completed med school and residency, I’m very thankful for this decision. Many of my med school classmates entered med school with thousands of dollars of debt – those who attended upper tier schools like Duke or Stanford had probably well over $100,000. And since med school is quite pricey, many end up finishing with another $100,000 of debt. I received a great undergrad education, and do not for one minute think that those who went to one of the top tier schools were better off in med school because of their education. When I picked my med school, I chose it for many of the same reasons as my undergrad school – price. I got accepted into a good, private med school but since the price tag was almost twice as much as the state school, I knew there was no reason to go there. Although med school is expensive and it’s nearly impossible to graduate without some debt, I’m thankful I’m on the low end of the spectrum. Maybe for certain very competitive specialities one would be better off somewhere more prestigious, but as with other things, med school is what you make it. If you study hard, get good grades, and can do well on the standardized tests, you should be able to match into whatever specialty you want.
There is absolutely NO REASON to go to college, not today anyway given the bounty of the internet. And it pains me to hear of homeschoolers talking about sending their kids to *community college* (unless they are 12-16 yrs old).
BTW, I am an Ivy League graduate myself. And I’m about the only college-grad I know, particularly from a *top* school, with the stones to say so.
College = Debt + Deferred Adulthood + Lost Income
I disagree with your first point–material for the next blog entry!
Already looking forward to it…
Any thoughts on WHY college is so much more expensive these days? I graduated 18 years ago from an Ivy League school with $12K in debt and my parents paid about $15K for all four years. It seems like a steal these days. My latest alumni magazine had a short blurb about how the school has now surpassed $50K/year in cost. $50K!!!!!! ($36K for tuition, other for fees, room & board, etc.)
The costs certainly exceed the rate of inflation and I can’t imagine the quality of the education is that much better. Why so much more expensive these days? I think part of it the ‘student lifestyle’ is way more expensive today. Futons, ramen noodles, no air conditioning, working two jobs and splurging on pizza once a week has been replaced with laptop computers, cell phones, lattes as a necessity and who knows what else. I don’t think I would recognize student life today. But that doesn’t explain the staggering increase in tuition costs. (Maybe it’s in the full article which I should find time to read.)
I think it’s a dangerous situation for our economy that further separates the ‘haves’ from the ‘have nots’ and completely ignores the need for skilled technical workers. So many kids finish their 4-year degrees only to find they need to do MORE school to do what they actually want in life.
I hope our kids will be able to take advantage of a local community college and a soul-searching gap year to set them up for a solid future.
Laptops are required by the colleges. The college my son first attended had also gotten rid of land lines in the dorms to save money, so the students needed cell phones as well. It’s not just that the students want these things. (Lattes probably still are not a requirement, although my son was telling me about one place on campus that advertised some percentage of the price of a useless $5 drink as going to Haiti earthquake relief. He said to me, “Why not just donate $5 to relief and skip the stupid drink?!”
College students (with a few exceptions) are adults. Why is it expected that someone else, whether their parents or the university financial office, should be managing their loans? If someone is capable of keeping up with a college class, I would assume they are also capable of understanding their own finances. The problem here is not with university offices not giving correct advice, or even with banks giving loans to people who will have trouble repaying – the problem is with adults borrowing more than they can repay, and with adults being treated like children. It’s a cultural problem – somehow we’ve become completely steeped in this idea. There are others that go along with it, like the idea that a college degree is some kind of magical job-ticket, and if you just have that particular piece of paper you’ll always be in demand. That’s just not true, and we have to stop acting like it is before we can make any progress. I think once we get out of that assumption, the financial issues will be easier to sort out.
This is a subject about which my husband and I have talked a lot. Our oldest son is only (nearly) 4, but because of our different college experiences, we know we should be talking about it long before our children are looking at colleges! I went to William and Mary which, though many people think is private, is a public university. (Yes, I have almost gotten into arguments about that.) My husband went to a small private liberal arts college in southern California. My four-year education was the same price as one year at his college. Thankfully his parents paid for it, and I left college only $8,000 in debt, which we paid off our first year of marriage. We disagree on whether his experience was “worth it” because I contend that I got one of the best educations in the country for far less money! I also realize that I was a Virginia resident at the time and thankfully, Virginia has great public options, as does California, for example. Students in other states are not so lucky, though. He and I would love it if we were in VA or CA and our children had UCLA, W&M, UVa, or UC Berkley (and many other fine schools) as public options. But we know that might not be the case and if not, what do we do? We know that college is vital. And, to disagree with an earlier poster, we think it’s very important. Yes, you can live at home and go to community college or even do coursework over the internet and receive a lot of knowledge. But what my husband and I treasure from our time at college is not only the academic knowledge, but the overall growth we experienced. For us it wasn’t just about learning history (my major) or math (his); it was about being very involved in InterVarsity Christian Fellowship, living in dorms, managing our time away from our parents, and generally having a wonderfully rich transition time from the home of our parents to the complete freedom of adulthood. We already know that we will encourage our children to go away to college (if their talents lean in the academic direction), but I’m already shuddering when I think of what it will cost to educate three (probably more by then!) children!
Thanks for this article and your thoughts on it. I couldn’t agree more with your interjections and final thoughts.
I personally have not graduated college and I don’t feel as if I’ve missed out on a whole lot that would have improved my life. I chose not to graduate college very intentionally. I did attend for one year. I have no regrets, neither about attending for that one year nor for deciding not to finish. When I was 18 I really didn’t know what I wanted to “be” when I grew up. I had already met the man I was going to marry. I wanted to have children young so that I would be (relatively) young when they were grown so that I could then go on to pursue a career post-motherhood if I so desired. And that plan is being fulfilled now, which thankfully was God’s and not just mine. Being older, a little wiser and knowing my adult self better than I did when I was 18, I am also currently pursuing passions/career options that were nowhere near my radar when I graduated high school but which certainly reflect more of what I want to spend my days doing than anything I would have chosen to pursue via a traditional university education.
I’m not sure if there is a connection to this, but it would appear that tuition rates and expenses raised AFTER student loans became so readily available. Bill Clinton was the president if I recall who pushed for student loans to be so available. Would colleges be able to be so expensive if students could in no way afford them? Much in the same way that housing prices could not rise so quickly, if banks refused to give false apparaisals to close the deal.
I read this article a few days ago and also watched a great show on PBS a few months ago on the subject. I consider the banks loaning students loans to be much like the sub-prime mortgage lending and aggressive credit card lending practices on college campuses. All of this was going on when I was in school from ’92-99. I dare say that the colleges themselves are very much to blame. Lenders prey on inexperienced eighteen year old students who have little to no life experience with real financial decisions. It would be like encouraging a fist year student to buy a house and take on a mortgage because it was a good investment down the road.
My husband and I are both the first to receive college degrees in our families. We were both told by well intentioned parents to get our degrees and our lives would be much better off. We both attended on partial to full scholarships for one of our degrees and took out loans for the other, but, even with that we finished with thousands of dollars of debt. It has been a burden so huge, I am not sure when we will ever pay it off entirely. Sadly, with this economy my husband’s income is no longer enough to pay both of our loans. This past year we had to quit homeschooling and I had to work more than the part time hours I had been working. We have been paying for our loans now for 10 years. The banks have now received more interest than the initial loans we borrowed. So I ask you, who are the winners here and who are the losers?
My family relates to this, although on a different scale. In the last few months, we had to decide between two medical schools for my husband to attend. They were similarly ranked, but one was a little more prestigious than the other, and also about 3 times as expensive and a private school. After much deliberation, we decided it was wisest to go with the less expensive state school, where we even got a scholarship and qualified for better financial aid. We just went through the numbers with the cheaper school and we should be able to pay back the loans in 5 years or less if we aren’t stupid. The other school would have taken more like 20 years, so I’d say it’s definitely worth thinking about how much money prestige can make you, because in our case, it definitely wasn’t worth 15 extra years of financial bondage.
My husband is an Anesthesiologist, he started at a community college, then transferred to a state school. He paid for all of his undergrad while working summer jobs (construction). The only debt he (we) have is for his medical school.
While he went to medical school, I managed the apartments we lived in. The amount of debt people were coming into med. school was insane! I saw it on their credit reports. Most of them were for degrees they couldn’t go and get a job with. They, my husband included (with the exception of debt), had to go further with their education to actually make it worth it.
We have three kids now, no where near college age, but we are thinking about it. Do we want our kids to go to college? Yes, but only if it is for something that they can go out and get a job with. And they will be encouraged to do just as their father, go to community college first and then state.
Thanks for this warning in Richmond. With our oldest now starting the process of evaluating colleges, its a gret reminder of our responsibility to lead him well. Thanks Susan.
I agree wholeheartedly with the poster who pointed out that the outrageous increase in college tuition is directly related to government intervention in college financing, as well as government intervention in secondary schooling, which teaches kids that the only way to have a successful life is to consume more government schooling. It’s just wrong, on so many levels.
I have a son who just finished his freshman year at a very expensive private west-coast college, but he would never have gone there if he had not been able to earn very significant scholarships, and if we hadn’t been able to pay the balance in cash. My husband and I graduated in 1982 with no college debt at all, thanks to academic and sports scholarships, but we have so many friends whose lives have been ruled by student loans. Truely, the borrower is slave to the lender, as Proverbs says. We have seen mothers working who would have prefered to be home with their children, we have seen fathers working multiple jobs and neglecting their families, and we have seen several divorces resulting from constant financial pressure. We have also seen a couple of cases of perpetual students who are now as old as their mid-fifties who keep taking just one more graduate school class each time their student loans start to come due. We will both be 50 this year and this is still going on with some of our friends. We have also had friends who have just given up on debt in general – they say they will have student loan debt their entire lives, so what does it matter if they also have mortgage debt, car debts, business debts, and massive credit card debts. We do not want to let any of our children make the same mistakes as our friends, and I pray that they will not marry spouses who have been so unwise, or ill-advised, either.
People need to realize that an expensive college education is a luxury, and is not either a necessity or an entitlement. It’s a nice idea to be able to spend four years “discovering who you are and what your talents are”, but it isn’t necessary for a good life, and if you cannot afford it, then you had better not buy into it. It’s also very unfortunate that most high school graduates have no marketable skills whatsoever, except for those with strong backs who are willing to do hard manual labor. My son lasted three days last summer working at a horse farm – it was a humbling experience for him, as he is a very academic kid. But no one wants to pay him to sit around and think smart thoughts.
On the subject of dual enrollment for high school homeschoolers, I just would like to add that if your child is likely to be eligible for college scholarships, it is sometimes a mistake to accept too many college credits in high school. If a student has above a certain number of credits, they may be considered a transfer student rather than a freshman, and scholarships are usually much more limited for transfers. I know that isn’t a problem for all students, but it is something to be aware of.
Lastly, I also think that the young lady in the article was very poorly advised to choose a degree in religious/womens studies. Again, if you are of an income level where you can attend college simply to further your own intellectual development, then fine, major in whatever stimulates your mind. But most students are not going to be in that category, and they need to realize it starting out. There needs to be some cost/benefit analysis going on here. As in, can I possibly earn enough money with this degree to justify the expense of earning it? I have a niece right now who is borrowing $30,000 per year to attend an out-of-state state school so she can get a degree in …GLEE CLUB. That’s right, she’ll be $120,000 in debt, at least, assuming she actually graduates in four years, and her potential job possibility is …high school music teacher. Yikes. And what if she marries someone who is equally in debt (or worse), or fails to finish, or takes longer than four years? Then what? It may very well follow her the rest of her life. But her (divorced) parents are so proud of her, and are solidly behind her “going for her dream”. So who am I to be her pessimistic old aunt? She’s just so talented, you know.
I wholeheartedly agree and had the opportunity to write an article for Forbes’-owned Investopedia.com comparing tuition rates to median starting and mid-career salaries for colleges nationwide. It was a fascinating study and helped cement my belief that while future earning potential shouldn’t be the only – or even first – factor when evaluating colleges it is certainly worth considering when you’re talking about taking on mountains of debt. I am very grateful that we live in a state (Virginia) with top-notch public colleges! You can view the article here: http://financialedge.investopedia.com/financial-edge/0709/Top-Colleges-For-Your-Tuition-Buck.aspx
I must nod a sad agreement to this article. My husband and I are both one of these
“recently graduated” students saddled with massive student loan debt. (Together, we owe over $75,000). How I wish someone had sat down with me and explained to me how it all worked, who might have advised me to attend a cheaper state college! When I started college at a small private college highly ranked and near-Ivy League status, I never once thought about the cost. I had a few scholarships, and frankly, didn’t understand the loan and credit game at the time.
It was not until we were in premarital counseling with a very wise mentor who included many lessons on financial management that we even *began* to understand what “deep doo doo” we were in. By that time, we were well into the waning years of our bachelors’ degrees, and I must admit- it felt ‘too late’.
I graduated in 2006, and my husband- in 2008. (We both took semesters off due to family needs.) As you all well know, the economy began to buckle not soon after in September of 2008- my husband was laid off from his job three weeks into September. It took nearly two years before either of us found jobs- in January of 2010. And while we both have college degrees, our earning power has been much diminished by the state of the economy, and we’re both in jobs beneath our training and education just to pay the bills and make ends meet.
I am ashamed to admit that all of our loans are in income based repayment at this time- we would not be able to pay them otherwise. I would have never chosen this route, but there seems to be few options to make the payments on an education that’s not worth the paper it was written on in this soured economy.
I find this frustrating because I have always been conscientious and responsible, and I find it deeply horrifying that I cannot meet my obligations. But on the other hand, the student loan system is arcane, confusing, and above all, built to line the college’s pockets, not ensure an education. Had I even for one second understood what the loans would have involved, I would have never, ever signed on the bottom line.
The whole system needs renovation- but at the end of the day, the responsibility still lies with the student and his or her parents. How I wish we would wake up to this very real danger and problem!