<p>Could this be the next bubble to burst? Student debt is nearing 1 TRILLION DOLLARS! Very enlightening special report investigating the college financial aid system that encourages widespread borrowing.</p>
<p>News</a> Headlines</p>
<p>Interesting compilation of data by the biz network. Yesterday, they interviewed some prof who spent his entire allocation of air time justifying high costs, saying that they were always going to rise faster than inflation, and that it was impossible to improve productivity. (I’m guessing he doesn’t spend much of his week in the classroom, and isn’t leveraging the reach of his lectures with electronic technology.)</p>
<p>Even scarier than the high college costs and student loans most of us think about here are the debt loads from for-profit schools. The for-profits have much higher average debt and often don’t result in a completed degree or a degree that is respected by all employers.</p>
<p>It has been a while since I posted but tuition rising faster than the rate of inflation is something I have been bothered about for years. Add to that the exploding endowments at many schools and I just do not understand how it continues.</p>
<p>Others on these boards have said that education is so personalized and that this is just what it costs. I strongly disagree. The application of technology to teaching should drive down the cost of education, not drive it up. Easier delivery of lectures through technology should enable better follow up and ultimately better results.</p>
<p>While a number of schools have stepped up during these difficult economic times there is much more that could be done. Time for a major industry restructuring forced by the high debt of the students who have attended.</p>
<p>It will be interesting to watch.</p>
<p>
I have been surprised to discover that at both the CC I attended till this semester, and the Large State U I am about to attend, online classes are more expensive per credit hour than in classroom classes. I am not sure how they justify that. I think it is “just because they can” as a lot of students who take online classes do so because it is the only way they can make it work. (I took a mixture of online classes and live classes at the CC because the overall tuition was not too high - being an older student with a very elderly parent in another country I liked to have the online classes in the mix so that if I had to suddenly take off I could at least finish some of my classes). I am not signed up for any online classes at the larger university as the cost is already so high and I don’t want to add to it.</p>
<p>I think it will be a long time before universities change anything. Though the rate of the increase in tuition and fees did at least slow down the last couple of years. I suspect they will compensate for that as soon as they can though. Sheesh, just look at the price of used textbooks at most colleges. Both the colleges I am familiar with buy back books at a ridiculous low price and turn round and sell them for a much higher price - several hundred percent mark up. So, I never buy my books from the school except for the odd class that has a customized version of an existing text book so forces you to buy it from them (that bugs me no end).</p>
<p>They kind of have students over a barrel right now. I’m not sure what it will take to change this. Most seem quite happy to encourage students to take on debt.</p>
<p>Oh dear God… In an age where computer chips will be cheaper than paper in a matter of years, how could colleges possibly justify skyrocketing prices…? I just don’t get it. More applicants also means more money is sent in (application fees and what not). The number of actual applicants accepted doesn’t increase on a yearly basis for colleges, so how could they demand more money for the same amount of students? Truly mind-blowing. I’m scared to go to college. I might just end up going to a cheaper state university (Well UVA provides a great college education, but that’s only if I get in).</p>
<p>Swimcatsmom, at the univ. I’m in right now the online classes are also significantly higher per credit than the face-to-face classes. Like you, I can’t imagine what the justification for that is. At the community college they’re a little higher, but only a bit more with little extra “technology fees” and so forth. In total, taking the class online only adds $35 or so to the overall cost of the class, but at the regional public univ. the increase is very steep. From looking at the bill, it appears they’re charging more because the online students, who are rarely if ever on campus, object to paying the “building fee”, “health center fee”, etc. for things they’re not using. To offset the loss of fees, the univ. charges much more per unit for the classes. The problem is that they are also charging much more than on-campus students are paying in fees to begin with, which leads me to agree with you – they’ve found a group they can soak and they’re gonna do it.</p>
<p>With a background in Print Advertising and a daughter going to college
I am amazed at the boxes of Print Material that was mailed to our house.
It seems that cutting down and going green has not happened.
True our in box is full of emails and applications are for the most part electronic,
however universities still send these glossy expensive mailings. Multiply postage and the brochures by thousands and the cash register is going. Some have cut down to these tiny brochures, mostly those are the LA colleges. My daughter commented how archaic the mailing was and what a waste, but still enjoyed those glossy images in the snow!</p>
<p>It’s the same reason health care keeps going up in price. Demand. There is a tremendous demand for college since the word is out that the future of the U.S. is a two-tier society of those who control the wealth and the working poor. </p>
<p>Therefore, parent are screaming at their kids that they better make sure they are in the “haves” group and not in the “have-not” group. </p>
<p>Higher education is considered the key. When something is in that much demand, the costs are going to go up. It’s not going to change. Better get used to it.</p>
<p>im waiting for the bubble to burst…there’s gonna be a point where no one is gonna pay $200k/year for college and everyone defaults (well, kinda) on their debt</p>
<p>colleges will fold up left and right, there’s no more finaid, and the american economy goes to crap</p>
<p>let’s hope for inflation, shall we?..</p>
<p>The promo’s for the show a young couple with 200k of college debt, and moaning and complaining about the implications of such debt as they start a family…NO sympathy from me…Pay for the best education you can AFFORD…For every student carrying 100k of undergraduate debt,there is likely 90+ students with nominal debt…The extremes provide great TV and are splashed across newspapers and magazines…</p>
<p>I have to admit that I yelled at the tv this morning as the young couple complained about how they just couldn’t avoid that much debt … somehow, “they” lured them into thinking it would be okay to borrow that much - in fact, it was necessary. I couldn’t help but notice that they lived in what would be considered a nice home in my area.</p>
<p>Schools do not want students to borrow too much, because a high default rate will jeopardize the school’s ability to participate in federal aid programs. Somehow, schools are going to need to figure out how to keep tuition costs in line, especially in these challenging times. For example, higher ed funding has been cut WAY, WAY back in my state. It is absolutely necessary for our CC’s and state schools to find ways to keep tuition rates from sky rocketing.</p>
<p>On the other hand, private colleges can pretty much do what they want. People need to learn to say "No, thank you - I can’t afford to come to your school, and I will not borrow $100k to do so. </p>
<p>As for grad degrees … students need to seriously consider the value added. Part time while working might be a better option than going full time & borrowing a small fortune to finance both tuition & living expenses.</p>
<p>Time for an attitude change, America.</p>
<p>to be honest, i think there should be debtors’ prisons should come back…it’ll scare people, and it’s certainly better than having a person in a lifetime of financial misery</p>
<p>if you declare bankruptcy twice, you will be sent to prison for 3 years…if you go bankrupt again within 3 years of being released, another 4 years in prison</p>
<p>if the amount of debt you own is 15x the amount your income+assets, you can choose to have it all expunged in exchange for 5 years in prison</p>
<p>food for thought…</p>
<p>
'rentof2: At the CC I was at the students pay the same tuition and all the same fees as for live class fees plus and additional charge on top for the class being online. I think it worked out at about an extra $50+ per credit hour. At the 4 year state U I am about to attend the students again pay all the same tuition and fees per credit hour (including things like health fees and transportation and parking services fees) plus an additional charge of $65 or more a credit hour. I don’t understand how they justify it.</p>
<p>The special was both hilarious & frustrating. I wanted to bust out the small violin for every interview.</p>
<p>The worst was the girl at the end who just entered college.</p>
<p>Q: “Are you worried that you won’t be able to pay for college”
A: “I’m not really worried about it, I’m at a private school, and I like it”</p>
<p>This is the attitude that these brats get themselves into. Live with it.</p>
<p>“the word is out that the future of the U.S. is a two-tier society of those who control the wealth and the working poor”</p>
<p>Bye-bye, Middle Class. It was nice knowin’ ya!</p>
<p>This is so tragic. If the future does pan out like this (and I think it well may), then the America we have known and loved will be gone, perhaps forever. God help us!!</p>
<p>"People need to learn to say “No, thank you - I can’t afford to come to your school, and I will not borrow $100k to do so.”</p>
<p>AMEN!</p>
<p>^Honestly, I have to lay more blame at the doorstep of parents than the schools. I’m appalled at the number of parents who can’t or won’t divorce emotion from the college selection process and who fall for the “dream school” even if it means allowing their kids to take on excessive debt. Yes, it’s difficult to tell your hard-working, deserving child that they can’t attend Pricey Favorite U because neither you nor they can afford it, but imho protecting our children from avoidable hardship is just part of being a parent. </p>
<p>The “Voices” section of POSD’s website has many posts from people whose parents or other advisors told them that educational debt was an investment and they apparently never looked into it much beyond that…and some of these people seem to have been adult career-changers! We all know that a surprising number of people do not do their research into the true cost of college, and their ability to repay the debt within the context of their chosen field, or set forth proper budgets in order to do so, until it’s much too late. Often that comes through in their posts, but it doesn’t mitigate the despair they have, an almost universal side effect of overwhelming student loan debt. They’re stuck with debt that will probably never be repaid, with no possibility of IBR because they’re already in default with no means to rehabilitate because they have low-paying jobs, their wages are garnished, and their credit record is in shambles…imo, that’s a problem that really needs urgent attention because it will affect their children as well. </p>
<p>Without a more comprehensive and mandatory financial training during the selection process, I think that the president’s campaign to increase college graduation will likely serve to feed the debt monster and accelerate the number of defaults…perhaps not on a percentage basis, but in actual numbers, and I always think that every one of those numbers has a real person living in despair behind it. Increasing education does not, in itself, lead to an increase in income and there are many, many college educated people earning less than $40K in this country. With community colleges becoming overcrowded, state grant programs drying up, and public uni’s resorting to program cuts and tuition hikes to make up for budget cuts, the “affordable” options are not available to everyone and that has to change.</p>
<p>The President’s “plan” to encourage Americans to go to college/to go back to school doesn’t help the debt issue … because other than the expanded Pell program (which did not make a significant difference for the majority), the centerpiece of this plan is “increased access” … to DEBT. Be honest, please.</p>
<p>One thing that was glossed over (while the obvious praising the Prez) is the cost to tax payers. Whether the default rate is 7% or 33% as one ‘expert’ suggested (this was a outrageous claim, however, since the reporter didn’t ask for any support), or somewhere in between, the federal deficit continues to grow on account of the defaulters… What is THAT total, year after year? Yeah, I get that the piece didn’t set out to answer that question, (and wouldn’t bcos the solution is obvious), but it just seems to me that it shoulda been asked if they are gonna continue to quote the Administration on goal of higher ed for everyone. In other words, ‘Including default rates, how much cost to taxpayers to accomplish this, Mr. Duncan?’ </p>
<p>Are we just building a worse Freddie/Fannie? (Worse because there is no assets to back the loan.)</p>
<p>I know this is mostly parents discussing, but I have noticed this within my own peer group. (I’m a senior in high school)</p>
<p>As a high school senior, SO many of my friends have the same attitude as the girl at the end: “Oh, I’ll just take out loans, it doesn’t matter, I NEED to go to ______ school.”, regardless of the cost.</p>
<p>For example, one of my best friends is applying to college right now. She is applying as undecided as of now but wants to transfer as a theatre or acting major later (she’s applying undecided because she doesn’t want to do auditions right now). We’re from the East Coast, and she absolutely insists on going to California to school and considers Berkeley, University of Southern California, and Pepperdine as her three top choices. Her backup option for California is NYU and her safety school is a local private university that costs upwards of 36,000 a year + residency etc. </p>
<p>Her parents do not even want to pay our high school tuition which is at about 7,000 right now. She relies on the alumni scholarship to pay for it. She’s planning on taking out loans, and REFUSES to even consider a public state school, even though acting is a career in which there is no guarantee of any kind of payback. She refuses to consider a backup plan. However, she comes from a family that is too rich for financial aid, but too poor to actually pay the full price tag/her parents are unwilling to pay that kind of money.</p>
<p>This mentality is not at all uncommon among my peers. Many of them ONLY want to attend a private university, where the classes are small, and they get “spa treatment”. Virtually none of these universities are Ivies/top 20s. They are often obscure colleges that have little to no prestige. </p>
<p>I think what I’ve noticed is that those “paper mailings” with the glossy pictures, beautiful buildings, and nice dorms really DO draw students like me. At 18, we aren’t think of the future, we’re thinking “do I really want to be in some crappy public university where the dorms are small, and the buildings are ugly?”. All of the advertising works. I think that “spoiled” mentality is a huge problem because no one is thinking of the 200,000 debt they’ll incur. </p>
<p>I’m very lucky because I’m guaranteed 25,000 a year shaved off of my Penn tuition, and my parents have given up spoiling me with material items for Christmas since I was very little, and instead saved up money in a savings account. When I was little, I resented getting a nice pair of PJs or a book for Christmas, while all of my friends got expensive cameras and iPods but now that I see this and look around, I realize HOW lucky I am to have been given this opportunity to be able to afford any university in the country without any debt. However, most of my friends want it all. They don’t consider what a burden it will be. Part of the reason colleges’ tuition costs so much, is because SO MANY students buy into it.</p>