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Everyone from our college professors to our financial aid officers assured us that student loans were "good debt" because our educations would be long-term, steadily appreciating assets -- unlike, say, a car. But if an education is an investment that appreciates, there should be the prospect of a solid return.</p>
<p>Instead the mountains of student loan debt have an unsettling parallel to another one-time boom market: real estate. Like those who took out big mortgages to fund their "can't miss" investments in pricey McMansions -- only to find those homes suddenly dropping in value -- those of us who took out student loans to pay for pricey degrees now find our prospects of securing well-paying jobs with comfortable lifestyles shrinking every day.
<p>If the current administration’s socialistic policies that effectively punish the “rich” come to fruition, there will be many fewer high paying jobs anywhere in the U.S. Higher taxes on the rich, limits on corporate executive income, universal healthcare that limits physician salaries, tort reform … will limit every student’s prospects for servicing their debt.</p>
<p>“Instead the mountains of student loan debt have an unsettling parallel to another one-time boom market: real estate.”</p>
<p>Ah, if this is the case then a good chunk of the ‘problem’ with student loan debt is folks borrowing for that big McMansion that their income couldn’t really support instead of the 2-bedroom starter they could manage on one income.</p>
<p>Its the same with a college education…folks thinking they need four years at a ‘name’ school no matter the cost when they really could do just as well with two years at CC and then two years at Big Name U, or State U…and ride their TALENTS to a good career.</p>
<p>The kid who spent four years at Notre Dame University started at the same salary I did after graduating from a NJ state school (Montclair). My education had to cost onlyhalf of his, but we both climbed the same ladder. The only difference was that he had a big loan to pay back…I didn’t.</p>
<p>Good article. It makes me worry about my sister who has almost entirely financed her education with loans, and is in her 5th year of undergrad (ugh) so hasn’t yet begun to really pay them back.</p>
<p>I feel cheated though because if the average public university’s tuition is somewhere around 6k, I want to know why I’m spending nearly 4x that amount at mine.</p>
<p>Romanigypsyeyes, you are not paying $24k for tuition. You will owe a bit less than $12k for the year if you take 16 credits per semester. The reason it’s double is because you will live on campus. </p>
<p>And yes, the tuition is double the average public university’s tuition. However, there are options in your state that DO cost the average, or close to that. You just happen to be attending one of the more expensive schools in the state. Remember, “average” means some may cost more!</p>
<p>Oh, whoops I definitely forgot that tuition doesn’t include room and board and all that. I feel stupid :(. Lol! </p>
<p>Even though, 12k is still double. My sister goes to a cheaper instate and still pays about 10k for tuition. </p>
<p>Just out of curiosity, which ones are cheaper? I know U of M and MSU are about the same. EMU is about 10k, and Michigan Tech is more expensive than any of those. Western? GVSU?</p>
<p>Lake Superior State, Saginaw Valley, Eastern (7624 for 32 credits), Wayne, Northern … I think UM, MSU, and maybe GVSU are among the most expensive.</p>
<p>In a no inflation environment, student loans are even more onerous. 5% is excessive. Many loans are at rates even higher than that.
But unlike housing debt, you will never get out from under through bankruptcy or by just forking over the keys. For how many will student loans be a bad bet? I don’t know. Most tallies don’t include the roughly half who never graduate and who are left with significant debt. Adding these folks into the calculus would be important, but I’ve never seen the numbers. Being coy on this one of course benefits the higher education business.</p>
<p>Needs vs. wants…funny you mention that. My kids both roll their eyes when my husband and I go into our standard speech:</p>
<p>“Your mother and I will pay for what you NEED…YOU will pay for what you WANT”. </p>
<p>I started teaching my kids that very early on. When my daughter was a tween she swooned over $45 jeans at The Limited and begged for them…“everyone wears them, Mom!” I told her I’d be happy to put $15 toward the price since that’s what I could get jeans for at Kohl’s…she didn’t NEED $45 jeans, she wanted them. I’ll give her credit…she did save up but that exercise made her realize that the same $45 would have purchased three pair of jeans instead of one. It also made an impression when she watched her brother accept whatever Mom and Dad would pay for so he could have his allowance for fun stuff.</p>
<p>Bay: Thanks for your illuminating contribution to this thread. It hadn’t occurred to me that corporate executives whose bonuses may be limited because they chose to accept a government bailout may have problems paying back their student loans. This is an outrage! And that extra 3 or 4% in taxes on income over $200k-250k, should Bush’s top-bracket cuts be allowed to expire, will undoubtedly lead to an explosion in loan defaults!</p>