<p>NOPE not at all. Education has ruined my life. If your son or daughter has to take out more than $20k for an education it isn’t worth it. A bachelor’s degree is the most overrated product out on the market. Don’t listen to college admins and all of their bs statistics. I graduated with a lot of debt and won’t be able to buy a house until I’m probably in my 40s. I don’t think I will ever start a family, I simply won’t be able to afford it, and even when I’m able to afford it, I’ll be too old. Most college grads will land jobs with salaries in the range of $35-60k. A $40k loan will take almost 20-30 years to pay off if you just pay the minimum, and even if you pay double than the $500/mo payments it will still take 10 or more years to pay that off with a salary in that range. It makes it almost impossible to save for a down payment on a house. Put it this way, if you made $45k per year, if you owned a house would you go out and buy a BMW? Absolutely not, that would be absurd, you couldn’t afford it. I don’t know why so many people still keep falling for the hype of the belief that you should take out lots of loans for a college education because it is “investing in yourself”. It’s so dumb. Many ivy league trained professors teach at state schools. You can pretty much get the same undergrad education anywhere. Why not do it for the cheapest then? There’s not a whole of of difference between say a school like Penn St. and a school with double the price tag like BC or BU.</p>
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<p>What a mistake. PharmD is now the equivalent of a JD degree. Another overrated product after which grads struggle to find jobs. He’ll be regretting he took out $120k 3 or 4 years from now after he can’t find a job.</p>
<p>I would gladly have a college graduate S/D with a $35-60k salary living at home at my expense for 1-2 years as long as they use all of their income to pay their debt (details of arrangement to be found in the small print at the end of the contract).</p>
<p>gravenewworld: I am curious. When you were a teenager choosing what college you would attend did anyone raise an eyebrow that you planned to take out a lot of debt (I am making this assumption based on your first post)? If anyone did, what made you not listen to them and do you think there is anything anyone could have said or done to convince you otherwise? I ask this because as a high school teacher I do talk with my seniors about taking on too much college debt and those whose minds are set in stone don’t listen. I would really like to know what I could say to at least make them think a little harder about their decision.</p>
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<p>No, no one made a big stink about taking out a large amount ($42k, ok not nearly as bad as some people, but still a lot) because after all, my family and I bought into the whole hype of the ‘prestige’ the university where I went had. You don’t find out that your parents are bad at finances until years later after you are out and buried under your student loan debt. High schools should offer personal finance not only for students, but for parents as well. For a while there in the US, the national rate of savings of the country was negative. What’s the average household balance on credit cards? Let’s be real here, your typical American family is absolutely stupid when it comes to finances. Should students be liable for their debt that they chose? Yes. But at the same time, colleges and universities should NOT be way overhyping their degrees and salaries of their graduates all while inflating their tuitions every year. My university now has a tuition and yearly expense cost of over $51k. 5 years ago when I was going, it was only $40k per year. What in the world exactly justifies over a $11k increase in 5 years for tuition? College tuition costs have spiraled out of control. Even if you try to go the cheap route of state university, many middle income families and students still have to take out a lot of loans. If colleges controlled their tuition costs and didn’t falsely advertise their product maybe you wouldn’t see so many students drowning in debt. If the price of milk rose at the same rate of inflation as college tuition does, then we’d all be paying over $10 for a gallon of milk right now. People would be peeved at that, but for some reason they aren’t angry about the increasingly unaffordable cost of education for a huge chunk of the populous.</p>
<p>Btw I wouldn’t even adovcate for taking time off after hs and trying to save for a college education. It would take a long time to try to save 40-80k which is about what you would need to cover a big chunk of tuition costs at a lot of schools for 4 years. That is lost time you never get back there certainly is an opportunity cost that you have to factor in. I would just try to go to a public school where you would have to take out 20k max for 4 years and bust your butt. From there you can get a job and then get an advanced degree for free or you can apply to grad schools for phd programs for free. At the under grad level it doesn’t really matter where you go anyway. Where you went to school matters much more once you talk about graduate degrees but those should be free. Id never pay for a grad degree unless it was in a professional field, but even then a degree in something like law is iffy. A mba you can get for free by working at the right company after getting you bs/ba.</p>
<p>gravenewworld: I agree that many parents are not financially savvy and they misguide their children to go to unaffordable schools. I also honestly believe that a large percentage of these parents convince themselves that their children are better off going to a prestigious school when in reality they want the kids to attend for “bragging rights” (kudos to me because I am a parent of an elite college student) or they are living vicariously through their children. For children of parents that can afford to send their children to a prestigious school, well that is the benefit of being wealthy.</p>
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<p>Proud_mom, I don’t know if this will help, but my experience is that the GPA and academic achievements count for a lot more than the name on the degree. That is – a student who graduates with honors from a public U. may be better off in terms of post-college employment than a student who gets a prestige degree with a mediocre GPA – and of course that would be true of grad school apps as well. </p>
<p>That’s one issue that may militate in favor of the student accepting a merit offer at a college they considered to be a math or safety, or accepting a spot at an “honors” college at a public U. The fact that the student is in the top of the applicant pool may pave the way both for a high GPA and a succession of honors down the line – and in some settings, completing the requirements of the “honors” college is itself a guarantee of having an “honors” designation on the diploma, whatever the GPA. </p>
<p>Obviously the converse is true – a B average at Pudunk U. isn’t going to open any doors – but the point is that it is often easier to earn A’s at Podunk than at Pricey U.</p>
<p>calmom: Thank you for the advise and I agree, but I have tried this approach. I honestly believe that the parent’s influence really overrides whatever I or any guidance counselor can say. I have heard of so many, many reasons why a child should spend XXX (and I use three X’s because sometimes it is an obscene amount of money) to attend an elite school. As for right now I will continue with having a spreadsheet project (to learn about functions and other features) that has them compare COA’s at a variety of public and private schools minus anticipated scholarships, financial aid and parental help, along with reading current news articles about student loan horror stories. </p>
<p>It is sad how many of my students tell me that their parents tell them not to worry because they will cover it all during junior year and then in senior year after actually sitting down and doing the numbers they tell their kids they can’t. Ignorance can be cruel.</p>
<p>Proud_mom – when I compared financial aid at colleges my kids were accepted to, I used spread sheets to create bar graphs of the colleges – and I did the analysis two ways. In one analysis I treated self-help aid (loans + work study) as part of the aid package, looking at only our bottom line, out-of-pocket cost for each college; and in the 2nd analysis I looked at such aid as part our cost , factoring it in the “what does each college cost” column. (Since of course the student pays the loans and has to work to earn the work-study money).</p>
<p>So lets say you have this breakdown:</p>
<p>College A: Cost of Attendance, $50K
Grants & scholarships: $10K
Loans & work-study: $10K</p>
<p>In the first analysis – College A costs $30K - in the 2nd analysis, the cost is $40K.</p>
<p>I found this very helpful because it helped tease out ways in which some financial aid awards were quite disparate, and in sometimes the college that seemed to have the best award when we looked at out-of-pocket costs was one of the worst when we looked at long-term costs. It also helped me visualize the grants or scholarships as a percentage of overall COA. </p>
<p>That still won’t hope the person who lives under the delusion that their kid can spend 4 years at NYU majoring in religious studies, emerge with a B average and thereupon be offered a job in a brokerage house paying $110K a year… but at least it might help give some a dose of reality as to what they are signing onto. </p>
<p>I didn’t need to do it for my own purposes… but it might be interesting if you also use the spread sheets to graph the long-term debt picture, factoring in interest rates and anticipated increases in annual tuition.</p>
<p>As to the students who get the bad news from their parents senior year – I think its tough for them, but they are much better off than the ones who go on to take on more debt than they can handle. I think that’s a function of parents really not being aware of all the costs or how the financial aid system works. I mean… my own attitude with my son was… “I don’t have a clue, we’ll see what they offer and go from there.” I don’t see how I could have had any other answer for him when he was a high school junior – the financial aid system is far too complex and unpredictable for a parent to really know what kind of aid their kid is likely to get.</p>
<p>It is difficult telling kids and parents who too often enter this process overly starry eyed. As a generation, we spoiled our kids terribly, giving them all they wanted, even when we could not really afford it. I say this in generalities, but include myself in this group. We were determined to send our first child to college where ever he wanted to go regardless of cost. We would get the money somewhere. He really didn’t know where the best place was for him, but he took our constant assurances and reassurances as his entitlement. I can look in the mirror to see who to blame for that.</p>
<p>But the mistake continues with other families as well. The best any counselor or any one can do is try to get the student and parents to seek and include some good financial safeties on their list so that the end of the process when it comes time to pay the piper who has lured your child, you have an alternative. Also discuss alternatives so that they are more familiar and less repugnant. </p>
<p>My 4th child is open to the idea of commuting. Partly because of his nature, but also because the advantages of doing so have been discussed. The monetary savings, for one thing. With our budget, a full price private school with room, board, etc expenses is really out of range. But we have some excellent private schools nearby that are within financial reach with some Stafford money and work in the summer. Also, we are talking state schools and schools with lower sticker prices. Discussing all of this ahead of time is really making the difference.</p>
<p>When I applied to college, cost was such a big deal to us that I just discarded those schools with the lowest offers. Didn’t even bat an eye. The scholarship package was even more important than the offer for me. So it was with my third one. BC and HC went on the discard heap because they offered a big fat zero in merit aid and they were way to expensive for us at full freight. </p>
<p>Friends of ours were in the position at the end of the year with only unaffordable choices or schools that did not meet the child’s needs in terms of subject study at all. Poor planning and stubbornness and pickiness. If they had seen at the beginning of the process how things could go, they could have included some cheaper schools that may not be exactly what the girl wanted, but close, close enough for under grad anyways, and doable with very little in the way of loans. I do not see how this girl will be able to pay those loans without getting very, very lucky. She had better start playing the lottery.</p>
<p>Student debt has always been an issue, but the last two years have really been a reality check for a lot of people. Suddenly that house you were going to sell and use to pay off all those kids’ loans didn’t quite materialize (in fact now lots of folks are in a huge hole). That “dream school” degree didn’t really land the paycheck required to pay off those loans.</p>
<p>People who played their cards correctly, and modestly, might not be living the high life at the moment but they’re mostly sleeping well at night. However many of those that have taken out stupid amounts of debt to finance unrealistic propositions, whether that be homes or education, are in a world of hurt. </p>
<p>There’s “good” debt, there’s “bad debt” and then there’s just plain “stupid” debt. A lot of people need to sit down and figure these things out before they just go out signing papers and not realizing what they’re truly signing up for. </p>
<p>“Good Debt”
- A mortgage on a home you can afford vs. paying rent (and by “afford” I mean you can put a healthy down payment on it and comfortably meet the mortgage payments with ease). Ideally you can put down a little extra principal each month too. In your financial calculations you assume the value of the home essentially stays constant over the long term, increasing with inflation, with any additional appreciation being a windfall bonus. You plan on building wealth by paying down the mortgage to establish additional equity in the property. </p>
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<li>Modest student loans (if necessary) which you can comfortably pay back based on the lower end of your expected income immediately after graduation. By “comfortably pay back” I mean you can pay far more than the minimum payment to maximize principal payment and minimize interest payments.<br></li>
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<p>“Bad/Stupid Debt”
- A mortgage on a home you can’t afford, can’t make a reasonable down payment on, but justify the whole thing on the basis of “real estate just goes up up up so we’ll just take a 0% down payment interest only loan and rake in the cash when we sell this thing a few years from now.” Your primary home is not a speculative investment. </p>
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<li>Loading up the truck with whatever debt is required to attend a “dream school” then finding you have a financial ball-n-chain around your ankle for the first 20-30 years of your adult life.</li>
</ul>
<p>the issue of good debt/bad debt/stupid debt/affordable debt/etc debt completely misses the point of this problem. what would crystallize it to vivid clarity would be to subject a college education to what is commonly referred to as a “business plan”. if this young woman had been required to figure out how much money she’d have to make each year to pay off 100 grand in student loans, and live in a place like san francisco after “graduating with an interdisciplinary degree in religious and womens studies” she might have considered changing her major to something more in line with a job description. by my rough calculations, based on the report that “She recently received a raise and now makes $22 an hour…the highest salary shes earned” i’d say this young woman will maybe pay for her 4 year degree at nyu sometime late this century - assumes she rents and uses public transportation. it’s the price she’ll pay for following her “passion”. new world, new rules, folks.</p>
<p>“Education” has become a joke in this country. For millenia only the rich could afford an education, it was the primary way they kept the masses down. After years of strife the middle class finally won the right to an education. The rich, however, are not to be out done. They have deceived us all into thinking we can get ahead in life because we now have access to education. They have rigged the game so now that everyone has access to education, but once you obtain it, you will be strapped for decades trying to pay off the costs. No wonder the gap between the wealthy and middle class in this country has continued to grow wider and wider every year even though more and more people are educated. The rich control the game. The rich stay rich and the poor will still be poor no matter how educated the poor are. The real answer is to have, OMG, a more socialized form of education that controls costs which will make education more affordable for everyone. That will never happen in the us though since everyone here is afraid of the big bad s word. Well it isn’t surprising then that the us is continually falling behind countries like sweden, japan, canada, denmark, etc. in rankings for standards of living when a middle class person in the us has to pay 60k out of pocket for simply a higher education while people in those countries are given a higher education because it is perceived as a human right.</p>
<p>I believe both students and parents are to blame in this case. In my situation, my parents did not mind taking out loans, thinking that they would solve everything. They thought that as long as I finished college, I would be able to pay them off. Luckily, I knew enough that loans are not the answer. While I am still going to take out some loans, they will probably only amount to 10-12k in subsidized stafford loans after 4 years of undergrad.</p>
<p>Something has to be done so that parents and students are informed of the reality of using excessive loans to finance an education.</p>
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<p>What could anyone possibly do to inform parents and students about exceesive loans? There is nothing anyone could do if they don’t want to know. We are not talking about high finance here where average people couldn’t easily figure out. Most of those loans have such low interest rate that if you just took the principal(100k) and divided it by number of months for repayments, you could get a general idea of how long it would take for you to pay it back. Then if you were to project future income from potential job then you could easily figure out if you could afford it.</p>
<p>Few posts back from me - People are stupid when it’s convenient to them.</p>
<p>New one from me - You just can’t help some idiots when they don’t want to be helped.</p>
<p>*It is sad how many of my students tell me that their parents tell them not to worry because they will cover it all during junior year and then in senior year after actually sitting down and doing the numbers they tell their kids they can’t. Ignorance can be cruel. *</p>
<p>Many parents attend incoming freshmen orientation meetings at high schools. That is the time to educate parents about upcoming college costs using current prices and inflation projections. </p>
<p>I mentioned in another thread that while some parents understand that tuition has gone up since they were in college, they don’t realize how much it’s gone up, and many have no idea that Room and Board can add another $10k+ to the costs. My neighbor was shocked that room and board wasn’t just a couple of thousand. He just assumed about a thousand for the dorm and about a thousand for food. LOL</p>
<p>^^ How does anyone think that their child think that they will be fed on less than $25-30 per week for 19 meals? Even assuming $30 per week, that would come to 1.58 per meal! Did this person ever sit down with an adding machine?</p>
<p>Our hs does not discuss the cost of college. They shy away from the topic, but bring in an outside person for one parent presentation and it is not very useful. It introduces terms like Profile, FAFSA, and Plus loans. They mention work study, and merit aid. It is a first introduction to these terms, but that is all it is. Frankly, they can’t tackle parent’s financial problems and our instate Public Us are pretty pricey too.</p>
<p>It’s ludicrous to expect a 17 or 18 year old who has never had a real job, never been trained in personal finances, never payed a big bill in their life, or even owned anything costing more than a few thousand to make an informed and logical decision to take out a loan for basically what is now amounting to a cost similar to a house. Would you trust a 17 with no real job to take out a good loan for a house? It’s also absurd in many cases to be able to think you can simply ‘work your way through college’ or that you can that you can save enough before going to college with a job right out of high school. Many private universities are now approaching $40,000-50,000 per year and many public schools are quickly approaching $20,000 for in state residents. This is all happening while purchasing power for most people in the US has actually declined when you compare it to the 70s. Textbook costs alone can eat up $5000 or more for just 4 years. Tuition costs have spiraled out of control because people continue to be dumb enough like I was to buy into all of the overrated hype that universities put out there about their reputation and what you can expect to get with a degree from their institution. The universities in this country then direct all of their sheep to places like Sallie Mae to take out loans to cover the costs. Tuitions keep going up because universities are able to get away with it by since they are getting guaranteed money in the form of student loans. Universities don’t care about what happens to their students or if they will ever be able to pay off their loans in a lifetime. Universities are institutions of business first, and about education second. Anytime big money is involved, money always comes first. It’s hilarious that loan companies like Sallie Mae rake in hundreds of millions of dollars per year in profits when Sallie Mae is a quasi government entity that wasn’t supposed to be about making a lot of money in the first place.</p>
<h2>to OldFort’s point which is spot on … drive the Lexus, wear the Sex and the City 2 pumps, get the golf country club membership, and the designer College degree for your kid … this attitude is pervasive where we live and this is what reality TV about “real housewives” is feeding the “sheepeople” … and the masses are buying it … </h2>
<p>New Jersey Housewife In Deep Debt</p>
<p>Before its second season began in early May, Real Housewives of New Jersey star Teresa Giudice promised fans that the new episodes would let them see in my home.</p>
<p>What would they see?</p>
<p>That Im a real housewife, she said. I actually cook. Youll see me giving birth. Shed had a baby girl two months earlier. And of course, she added, there will be a lot of drama.</p>
<p>But wait. Although the season is still unfolding, the real drama is just starting and its taking place off-camera, in get ready for the shocker debtors court.</p>
<p>According to a report in the New York Post, Teresa and her husband, Joe, arent just broke. They owe $11 million.</p>
<p>Thats not a typo. They owe $11 million!</p>
<p>The Giudices are up to their tanned necks in liens, foreclosures and unpaid bills, according to bankruptcy papers filed in Newark federal court, said the Post.</p>