<p>If you work at Radio Shack, and need transportation to get to work, a car may be a sensible investment. It will help you get your pacheck. But a Ferrari would be a stupid investment. A college degree is the same–it is probably a pretty good investment for most students, but only the kind of college degree they can afford.</p>
<p>If you’re rich enough to get your Ferrari or your college education without borrowing any money, it’s not really an investment anyway, or at least not entirely an investment.</p>
<p>Ok, i’ll agree some are attending schools where the degree received is not very good…Though i also believe those students may not really need to go to college…it may say contrary to what i’ve stated above, but it is a simple fact college is NOT for everyone…Everyone can’t be a lawyer,accountant,etc…</p>
<p>Last year my S had to choose between 2 high $$ private colleges (where he would have had to take on student loans), and 2 lower $$ public universities which offered him great merit $. He, very maturely, choose to go debt-free to a public U. I think in our competitive culture many get caught up in the prestige factor of choosing a college – to the detriment of their financial future.</p>
<p>Ahh Goldman Sachs, the same guys who securitized mortgages, got bailed out 2x over by taxpayers afer their gambling blew up in their face, is dabbling in pretty much doing the same thing with student loans. Granted that was written in 2008, I wonder where Marblehead is at now?</p>
<p>"is dabbling in pretty much doing the same thing with student loans. "</p>
<p>er not to defend goldman or anything, but the claim that there is a parallel between the mortgage crisis and the student loan crisis is mindless.</p>
<p>The housing crisis was an asset bubble. People bought houses whose payments they couldnt cover, on the assumption that they could sell them for a gain. Cause houses can, you know, be resold. When it became clear (as it does with ANY asset bubble) that at some point the price escalation would stop, that there was no one left to resell to - the house prices (justified by the availability of more folks to resell to) didnt just plateau - they collapsed. Which is what made those loans worthless. </p>
<p>You can’t resell a BA from NYU. Somebody borrowing 200k for a BA from NYU is either gonna cover it out of income, or they wont. The time when they are MOST like to fail to cover it is when employment and income hits bottom. Which it did (barring some new disaster) in 2009. Which is why those 2008 articles, whether they had any substance or not, are not particularly useful now. </p>
<p>the boom there is in the last two or three years. Yet the spike in tuitions and total COA has been going on for some time, nothing in the last 3 year that would drive that. Nor is there a huge spike in numbers attending college, or attending private college. Does that graph perhaps reflect changes in the structure of the federal student loan program? Were loans done indirectly through private lenders (the way the program used to work) counted there? </p>
<p>Its worth carefully knowing what your data are, and what they mean, before hitting people over the head with how your argument is based on data.</p>
<p>Go to the FRB G19 press release, and check the footnotes</p>
<p>“Data for the Student Loan Marketing Association (Sallie Mae) are included in the Federal government sector until the completion
of Sallie Mae’s privatization in 2004:Q4 and in the Finance company sector thereafter” AFAICT the sudden growth in FEDERAL Sector student loans is because the FRB is only counting ones made directly be the feds and not counting Sallie Mae, at least in earlier years. And yes, that makes the graph title confusing - but looking at the footnote, and the data in the table to which the footnote refers, I see no other way to read it.</p>
<p>“The Worst Investment in History”? That’s sensationalist garbage. Unfortunately, these are real issues:</p>
<ol>
<li><p>According to the Pell Report the average cost of attending 4 year college has increased three fold (in inflation adjusted dollars) since 1980. I haven’t checked those figures (quoted by the Washington Post) but if true would go a long way in demonstrating why college is unaffordable for many students. Families that still want to attend college may wind up taking on heavy debt loads.</p></li>
<li><p>Big question is why have costs increased so much? </p></li>
<li><p>Defaults on student debt occur at a much higher rate for students attending for-profit schools. For many, the degrees granted by these schools are indeed worthless. IMO the schools only exist because they have access to government guaranteed financing, ie., they collect the money and don’t have to worry when the student later defaults when unemployable.</p></li>
</ol>
<p>Unfortunately, the group behind that video “College conspiracy”, NIA is not that trustworthy. It has connections to George Adams and Jonathan Lebed, two alleged pump and dump stock artists.</p>
You should be thankful your S had the maturity to chose the lower cost option. It sounds though like since it was his choice as you stated, if he picked the high cost private you would have let him…
That would mean YOU didn’t have the maturity to lay down the limits and prevent him from making a poor choice.</p>
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