Once again, The New York Times is playing catch-up with Patch.com.
On Sunday, The Times had a front-page story about the growing burdens of college loans, three days after ran on the same subject. The paper did a wee bit more legwork for their gazillion-word story – my research consisted mainly of talking to a friend at the deli counter at the Giant supermarket – so I’ll leave the term “copycat” out of this discussion.
The lead of The Times story was about a young Ohio college graduate who owes $120,000 in loans and is working two jobs to pay the $900-a-month bill. Her mother is taking out life insurance on her because if anything happens to her daughter, she couldn’t pay the loans for which she co-signed.
A decade ago, 58 percent of families didn’t have to take out loans to send their child to public colleges and universities. By 2008-2009, only 7 percent could say the same.
The Times story shows there is plenty of blame to go around. Too many colleges emphasize the long-term investment aspect of having a college degree and play down the debt students will be left with. Some of the students admitted they failed to ask enough questions about how much debt they were incurring. The situation sounds eerily like the complaints about lenders and borrowers of risky mortgages before the housing bubble burst.
State and local spending per college student, when adjusted for inflation, is at its lowest in 25 years, according to The Times. State legislators, in turn, say universities are inefficient and bloated. The price of tuition has outpaced inflation, increasing even faster than medical spending.
The result is so many young people getting out of college with the equivalent of a mortgage but no house to show for it. One 24-year-old told The Times she dropped out of Bowling Green State University with $70,000 in debt and wasn’t going back. “It makes me puke to think about borrowing more money,” she said.
Many of those commenting on last week’s column had little sympathy for such students – variations of you-made-your-bed-now-lie-in-it were all the rage. But I think there’s some selective amnesia going on.
How many of those commenting had formative experiences in the first years after graduating from college where they lived on a shoestring budget in order to take a low-paying job they loved, follow a dream, work for a cause or have a life-changing adventure? It might have been a short window of freedom before the responsibilities of kids and mortgages, but it can have a lasting influence on their lives.
The graduates The Times wrote about can’t even afford to move out of their parents’ homes.
I fear I’m seeing the Ghost of Christmas Future. When my kids were little, we started a Pennsylvania Tuition Account for each one. We contributed to it each year but not enough so they’ll be able to avoid taking out loans. Right now, both boys have enough money in their accounts to go to college for about 1½ years – just so long as they don’t eat or sleep.
The notion that "a college education will always pay for itself in the long run" is proving more and more to be a quaint throwback to an era when the U.S. was a formidable manufacturing power. The fortunes of the middle class used to rise in what was considered an inexorable march of progress - the realization of the American dream. We have now awakened from that dream and many hard-working folks have nothing to show for years' worth of struggling and saving.
1 - We need a national strike to force the government to stop fighting very costly and completely unnecessary wars whose only beneficiaries are the defense contractors. The money for these wars can be used to fund worthy students' college tuition costs if indeed taxpayers dollars should be used for this purpose. 2 - Along the same lines, we need to slowly but surely cut defense spending, this money can be reallocated for educational purposes across the boards, not only at the college level. Presently the US military budget is equal to the military budgets of the next 15 nations combined. This is outrageous and completely unacceptable. 3 - Along with 1 and 2 we can begin to shut down some of the military bases we have in 135 of the 180+ nations on the planet. The savings would be staggering, empire building is expensive. 4 - If we're no longer meddling in the affairs of other countries as we have been for decades, we can shut down the Department of Homeland Security and their TSA cretins as terrorism will subside. More money will be saved.
I was asking a serious question. Of course I think it would lead to a lot of wasteful spending because a lot of students who probably don't belong in college would go and waste a lot of time and money. Unless some serious testing, beyond SAT's, took place to sort out the serious from the not so serious. And that would cause all sorts of trouble with what advantages then richer kids have over the poor and then how on earth would you level that playing field?
http://www.usnews.com/education/best-colleges/paying-for-college/articles/2012/05/16/mark-cuban-college-is-a-business-decision Students today(along with their parents) need to be “smart”consumers when shopping for the higher eduction they desire or need. They also need to be realistic in their choice of field of study. Somebody mentioned STEM fields. We need to steer more students into these type of career choices; science, technology, engineering & math. I wish more students would enter finance and economics, maybe that would help more people be able to deal with the realities of how to manage the monetary costs of managing their lives and our country. http://news.investors.com/article/588637/201110191813/college-has-been-oversold.htm?p=full The author of this story makes the key point I think some on this forum are trying to make. “Going to college is not enough. You also have to study the right subjects. And American students are not studying the fields with the greatest economic potential.” The amount of college graduates has increased 50% over the last 25 years but that increase is not reflected in STEM fields. The number of college grads in these fields remain flat. Are these not the fields where we would see the innovation and economic advances that will take us into the future?
Instead college grads today are choosing to earn degrees in visual & performing arts, psychology, and communication & journalism. The number of students in these subjects has doubled in the past 25 years. It sounds nice to say all young people today deserve to go to the school of their choice but should we be subsidizing those that are choosing fields that don't drive innovation & economic growth? It would be nice if we could all take a low- paying job we loved, follow a dream,work for a cause or send every deserving student to the elite college of their choice if these types of pursuits actually paid off. Unfortunately we need to balance all of that with a dose of reality. Every student needs to weigh the cost of their education with the potential economic benefits they will reap after they've earned their degree before they make that decision to go to an expensive school and take on that school loan.
Kids born into a poor or middle class family are unlucky? Why would you think kids in this situation would think they are unlucky? I think you just insulted a whole class of people. As somebody who was in this type of situation as a kid, I never felt I was “unlucky” to be born into my poor/middle class family. If anything, I felt lucky because it helped me learn to take a realistic view on the value of education, earning potential and living within my means. It taught me to work hard, to pursue an education(one I could afford) in a profession that had a realistic potential for job security & earnings, the value of saving as much money as I could and how to live with the least amount of debt I possibly could(no school, car or credit card debt here!). As a high school grad in the 80's my parents had no money to help me pursue my secondary education but this in no way prevented me for making a better life for myself and my family now than my parents could provide for me as a kid. I actually believe my child is at a disadvantage today because they don't get to experience the economic struggles I saw my family go through as a child.
Colleges are no better than the real estate brokers 5 years ago, enticing people into buying a product they can I'll afford. Not even as bad as a car salesman selling ou a car you cannot afford, or a real estate agent selling you a home you cannot afford. The only thing they do is lock you into a fixed cost. Colleges do one step worse, and get you in and raise tuition annually. Part two is the parent. If Johnnie doesn't know what he wants to do, recommend Community college. If Johnnie's GPA in high school was 2.0, suggest trade school. Of you and Johnnie have nothing is savings, then taking on a $24,000 burden is quite overwhelming. Although this may be an average, this also takes into account the families who have fiscally planned for education...so I believe this number to be considerably higher. Parents, learn to tell your children "no"!!! Placing them and you with a $50,000 debt for a bachelors I simply ludicrous. I personally have 6 nieces and nephews with an average $62,000 in debt, and each averaging @ $39,000 of annual income. They pay $750/month on this loan. Ludicrous!
The college search now is not like it was 20 or 30 years ago. The information is out there on what colleges cost and the average amount of grants and financial aid available. My older two kids colleges cost just over the amount of attending PSU in-state because they chose colleges that gave very good merit aid. The sticker price for one college was $42,000 but 96% of the students were awarded some type of financial aid. Their loans when they graduated were around $7,000 each. Parents need to tell their kids the amount they can afford, up front, before visits, before they set their hearts on some very expensive college. Thirty years ago when my generation was going to college, the cost was about the same as a community college and it was do-able for a person to put themselves through college. That is not the case today and it does a HS student a huge disservice if parents do not educate themselves and give their children clear guidance on expenses.
I concur completely! But colleges who charge $42,000 are at as much fault as those parents. C'mon, $42,000/yr for a chelors degree? Would you give an 18 year old a $168,000 check? But then I look at it from the college perspective. If parents are stupid enough to pay, then colleges had might as well charge it! 96% get aid, but the aid doesn't cover 96% of the $42,000. FAFSA claims that a person making $200,000/yr can afford $28,000, which is 67% of just the tuition. And how many make $200,000/yr?
In a different time, California did consider extending free public education through a bachelor's degree. Once we only paid for education through eighth grade. A new world required that we require our schools be available through grade 12. We can't afford free public college for all qualified students right now but it is not an unreasonable goal--at least for those who put education near the top of their life's values. I do. And so I feel less condemnatory towards parents who acquire huge college debt on their child's behalf. Very few people are frugal about everything. Some overspend on clothes, some on food, some on cars, etc. Let's put this discussion in perspective and recognize that people who "overspend" on education shouldn't be condemned as much as more materialistic over-spenders.
http://www.npr.org/blogs/money/2012/05/22/153316565/the-price-of-college-tuition-in-1-graphic
I appreciate the discussion...great points by all!
When applying to college, sure, go for the best you can think of. But when the aid offers come back and you're short 50-100k over the course of your expected studies, you're going to have to look elsewhere. Go to a cheaper school for 4 years. Go to a cheaper school for 2 years and re-apply as a transfer student. Take more AP courses to get college credit. But please don't act like society owes you and education of your choice.
I believe the terrible message that has already been delivered is that "if you want something, you should have it." It's that sense of entitlement which has driven huge gov't spending programs. It's also that sense of entitlement which has to end.