<p>The COA is about $55,000. So 41% paid their own way or took loans. Of the remaining 59%, the grants were about $22500. Hence even students with aid would have to fund, on an average, about $32500 with loans and parental contributions. Note how they emphasize that the cost is worth it.</p>
<p>*Financial Aid
There’s no denying it, a private college education like Carnegie Mellon’s is expensive. We hope that you and your family will look at private education as an investment in your future, and that you’ll choose a school based on academic quality, not on cost alone.</p>
<p>Financing a college education will take creativity, sacrifice and support‚ although there are many ways of making it happen. That’s why Carnegie Mellon has a financial assistance program designed to provide your family with options. Approximately 59 percent of last year’s first-year students (U.S citizens and eligible non-citizens only) received aid; the average need-based package was $27,348 (of which the average gift aid was $22,482).*</p>
<p>The only thing that NEEDS to happen is to allow all future student loans to be cleared by bankruptcy. </p>
<p>Then the problem becomes moot. Banks won’t loan money for useless degrees.</p>
<p>Elite schools like NYU pride themselves on not being “training schools”. Yet the goal of almost all poor and middle income students is a “bankable” degree. They are mislead as to what majors provide this feature.</p>
<p>A “college education” is marketed as a magic panacea that will transform ordinary folks into high earners. Not gonna happen for the mass of the population. </p>
<p>NYU has a nursing school. Why didn’t the subject of the OP study that?</p>
<p>The “traditional”, pre-1970’s college degree was earned by the rich, who were going to cash their family connections to earn money, and the super-smart, hard-working people necessary to business and professional activity. This created the illusion that a college degree was a guarantee of affluence.</p>
<p>Guess what? The rich were going to be rich because they were, well, rich. The super -smart, hard working types would earn a good living college degree or not. </p>
<p>In the way back times, loans were National Defense loans and were only available to smart math, science , and engineering majors. Those who would work to keep the “Godless Commies” away from our shores.</p>
<p>This was distorting the political landscape of American higher education so the mushy departments lobbied for loans for mushy students. That is why today we have a mushy economy.</p>
<p>If no one will pay you to do it, you are not good at it. Maybe no one is.</p>
<ol>
<li>In terms of the value of a MIT degree v. Podunk U., I went to the Podunk U that some people on this board are so impressed by for my BS + MS. I don’t claim that is the only reason I don’t have a “real job”, nor am I going to give out my life story on this forum. However, my job prospects and those of my peers certainly color my perspective. </li>
<li>In terms of official statistics, this nytimes link [Job</a> Prospects Improve Slightly for Graduates - NYTimes.com](<a href=“Job Prospects Improve Slightly for Graduates - The New York Times”>Job Prospects Improve Slightly for Graduates - The New York Times) says 51% of 21-25 year old college graduates have college level jobs.</li>
</ol>
<p>I can’t believe that so many posters think that NYU should be counseling kids about their debts before they start school. </p>
<p>Folks . GET REAL! Universities are businesses. This is true whether they are for profit or non-profit, they are a business. They are NOT going to turn away kids that they could keep. They are NOT going to announce to the world that maybe paying high tuition at a private school is a bad deal. They are not going to suggest that having a lot of undergraduate debt is financially irresponsible. It isn’t going to happen!</p>
<p>The key is in the high school. Schools and communities should pay to have financial training provided to everyone: kids and parents alike. This is where the problem starts and should finish. We could easily get rid of a semester of gym, health or even language in favor of a semester on financial planning.</p>
<p>“Folks . GET REAL! Universities are businesses. This is true whether they are for profit or non-profit, they are a business. They are NOT going to turn away kids that they could keep. They are NOT going to announce to the world that maybe paying high tuition at a private school is a bad deal. They are not going to suggest that having a lot of undergraduate debt is financially irresponsible. It isn’t going to happen!”</p>
<p>People have the impression that they care about you because they are non-profit. Colleges (along with other non-profits, hospitals and charities and such) take advantage of this. Yeah, you can say the girl is stupid for trusting them, but I’d bet more than half or all students out there trust these places. </p>
<p>Of 'course it can’t be expected that they will, but it’s perfectly acceptable to say they should. In the same way people shouldn’t murder others, we don’t expect that no one ever will.</p>
<p>“Colleges are nonprofits - they’re not supposed to be like a slimy used car dealer. We can expect the worst, but we must insist on better.”</p>
<p>It goes beyond the fact that they are non-profit. The national political parties are non-profit, but I don’t expect them to be altruistic. NYU owns billions of dollars worth of Manhattan real estate and doesn’t have to pay the same taxes as any other property owner. This is because universities are supposed to be doing work that benefits society – like creating educated people who are better citizens and better workers because of their college experience. Saddling promising young people with 6-figure debt that they can never escape is destructive to our society. If the article is correct and NYU believes it is “inappropriate” for its FINANCIAL AID OFFICE to give students any guidance about smart use of financial aid, it deserves a reputation as deceptive and irresponsible.</p>
<p>None of this absolves the young woman’s mother from blame. She acted terribly; NYU is acting terribly; there is plenty of blame to go around.</p>
<p>
[quoteThe only thing that NEEDS to happen is to allow all future student loans to be cleared by bankruptcy. </p>
<p>Then the problem becomes moot. Banks won’t loan money for useless degrees.
[/quote]
</p>
<p>BG, I would agree with you if you amended your statement to say private loans can be discharged through bankruptcy. As a taxpayer, I have a problem of students attending a trade/arts/chef/fill-in-the-blank school on federal loans and then defaulting to the rest of us.</p>
<p>*None of this absolves the young woman’s mother from blame. She acted terribly; NYU is acting terribly; there is plenty of blame to go around. *</p>
<p>Absolutely. Mom, student, NYU, and banks all acted like idiots.</p>
<p>This student’s story is the natural result of selling higher education as some kind of emotional or self-fulfillment activity – and Lord knows I see a lot of that on here. It isn’t. It’s an economic activity. Yes, we want our children to have a nice “experience.” Yes, we want them to be happy at college. But the point of it all is future employment, ideally employment that allows one to prosper, but at the very least employment that allows one to be self-sufficient, pay all her own bills, and therefore not be a cost to society. I see so many people on here say things like “college isn’t a ‘vocational’ school, and shouldn’t be treated as such.” Of course it is. That is precisely what it is. The problem is that more and more colleges are selling degrees that offer no prospects for “vocation” whatsoever. It’s a big con, but colleges like NYU have figured out that the price people will pay to massage their vanity is almost limitless. </p>
<p>Because so many (students and parents) have bought into the self-fulfillment, “perfect fit,” “meant to be there” narcissism that higher education so magnificently sells, schools like NYU can “advise” students to take out many thousands of dollars in loans for worthless degrees like the student profiled has earned. She’ll probably never work in her field (her field, after all, doesn’t exist except on the corrupt faculties of universities like NYU), will never earn a substantial income without a more economic-based graduate degree, but she was “happy” and “fulfilled” taking all those wonderful women’s studies classes. Her faculty advisers, then, go home at the end of the day believing they gave her something of value – she “feels good” about herself, after all, and isn’t that worth $50,000 a year? – but they haven’t given her anything of value at all. They’ve conned her. They are selling a concept – self-fulfillment – and coupling it with the mindset of this generation – entitlement – to create a perfect storm of debt, disappointment, and despair. Self-fulfillment and “perfect fits” are luxuries, not entitlements. And college is an economic activity, not an emotional choice. </p>
<p>And from the tone of that article, I suspect this student (and thousands like her) has no intention of paying back her loans. It seems the one thing she did learn at her prestigious school was an even greater sense of entitlement, with some nice victimization thrown in (the big, bad bank made me borrow money so I could be happy and fulfilled at NYU). Nice. Good thing all those “vocational” kids will be earning livings and paying taxes someday. Somebody has to.</p>
<p>Taxguy, your assessment was much too black and white. It is one thing to tell someone “oh, it’s not a good idea to pay our tuition.” It is another thing to tell someone what kind of payments they would need to make on X amount of loans, and what kind of salary and sacrifices they would need to make to support this - the college doesn’t have to say “don’t attend” or “do attend”. They provide the picture, you make the INFORMED choice. There was an anectdote in this thread about Dartmouth telling a girl it didn’t seem like she had the money. I have witnessed various other financial aid offices be REALISTIC and FORTHCOMING when they talk loans with kids and parents. I’ve seen just as many do the opposite. Universities CAN and DO operate honestly…some CHOOSE not to…and they should be stopped…</p>
<p>
</p>
<p>Right. IF they’re a used car dealership, let them be subjected to the same taxes and other burdens a car dealership is subjected to. And let them get a reputation they deserve.</p>
<p>(As an aside, in terms of political parties…We DO demand transparency - or we should demand it - from our government and politicians. Similarly we must demand the same from our universities.)</p>
<p>(Also as an aside, gimmechocolate makes a great point…except that he alluded to the fact that a liberal arts degree is a con, which it’s not, and many people go on to be successful after being womens’ studies majors, but certainly they aren’t worth extravagant amounts of debt, which I DO agree with…and I agree with pretty much everything else he said as well).</p>
<p>Student loans should not be dischargeable in bankruptcy. The three largest loans a person will ever make are usually his house, his student loans, and his car in that order. For two out of the three, the bank can reclaim the property and get most of their money back. If student loans are discharged in bankruptcy, then students won’t get loans plain and simple. Lots of students need loans and that should not stop just because a few idiots major in underwater basket weaving at a Ivy priced college.</p>
<p>umcp11 notes that some universities do try to be honest with their students such as Dartmouth.</p>
<p>Response:Schools like Dartmouth are in a very favorable position. They can afford to make applicants realistically view their financial situation BECAUSE they get many more applicants than seats. If they turn away even 50% of the applicants due to financial concerns, they would still fill up their seats with top students. </p>
<p>NYU and MANY< MANY other private schools, and even some state schools, are in more dire straights.They don’t get the same number of applicants. They certainly don’t have the same endowment per student. They want the bodies. </p>
<p>Yes,fault can be spread around. NYU isn’t innocent. However, I especially fault the parents and the kid for this situation. There are plenty of posts throughout the web warning people about educational debt. Do you think that this is some new phenominon?</p>
<p>Moreover, having tax free status doesn’t carry with it the obligation to provide widespread financial couseling. There are plenty of tax free organizations whose goal is to raise money: Political parties, Political Action Committees, Museums. In fact, I would like to make as much money as many of these non-profits.</p>
<p>All the government requires is that they use the money received for the benefit of the non-profit. Let this last point sink in! Benefiting members, students, visitors etc. is NOT a requirement for tax free status. It just has to benefit the goals and objectives of the non-profit and not inure ( to much) to any one individual founder. </p>
<p>Paying $200,000++ to major in Woman’s studies might be psychologically fulfilling,but it won’t pay the bills when they come due. This student should have known that. I’m sorry,but I don’t have empathy for her nor do I have empathy for the hundreds of thousands of kids who agree to this type of indebtedness. </p>
<p>The answer is widespread financial education in the high schools instead of gym and health.</p>
<p>I took money management in high school. Financial education doesn’t mean ****. It’s a garbage suggestion which won’t help anything. The majority of these courses will be a combo of memorize some definitions and study hall. High schools do a decent job of teaching Math, History, English, Science, and maybe every once in a while there’s a good Auto-shop teacher. Nothing else is worthwhile. New classes are a bad solution.</p>
<p>Qwerty, those of us who suggest this aren’t suggesting a garbage course. You’ll see that my suggestion included economics. High school graduates need to understand how mortgage loans, car loans, credit cards, savings accounts, mutual funds, life insurance, stock markets, commodities prices, and taxes work. That’s far more than definitions and study hall.</p>
<p>They seem to have an excellent response rate to their surveys --69% of all MIT undergrads so I think that you would find them to be a good source of data.</p>
<p>The survey from 2009 shows that only 37% of students who had earned their bachelor’s degree had jobs --47% were off to grad school . Given the large number seeking a further degree, I’m wondering if the 4-year undergrad degree is what pays off. If a student opted instead for a 4-year degree at a respectable public college (let’s say -Georgia Tech) and emerged without debt – and then went on to seek a master’s from MIT… wouldn’t that student be in a better (and less costly) position for seeking employment, than the student mired in debt with only a 4-year undergraduate degree?</p>
<p>I think its easy when you are frustrated with the employment situation to believe that you would be much better off with a prestige degree from a top institution – but employment isn’t guaranteed for everyone. Even with the excellent job prospects for MIT grads, there were still a number of grads having a hard time finding work (roughly 20% of job seekers). Also, only 73% of the employed students had jobs related to their undergraduate degree – so its possible that others were under-employed. </p>
<p>It’s a mistake to project out the “value” of an investment (like a college loan) to optimistically or too much into the future, because life doesn’t always goes as plans. When I bought my house (big loan), I could be pretty sure that my house would stay put, and I could purchase insurance for the contingency that it might not. I had an income already, and could make a decision based on factoring my existing ability to carry the debt and current market value of the home. But education is a much riskier proposition. </p>
<p>So you when you are running the numbers like you did, I think you are erring by failing to factor in the risks of unemployment or underemployment. One advantage of the government-backed lending program is that it provides some protection for those risks - but that is not true in the private lending market. </p>
<p>I do agree that it is worth taking on some debt for a more prestigious school, especially in the case of a university like MIT, where most students are on career tracks to high paying technical fields. But even for MIT I would think a reasonable amount of debt would be something more far more modest than what is being discussed in this thread.</p>
<p>My personal rule of thumb was something along the lines of total amount of debt = anticipated first year salary. I made that up – no math behind that – but it works pretty well in terms of ability to make payments on the loan. That would mean that an MIT student might reasonably take on $65K worth of debt – and certainly I think it would be very reasonable for student to choose to take on that debt to go to MIT over a school perceived as weak for engineering – though I would note that a student who could qualify for admission to MIT might also win substantial merit aid at a well-respected engineering school that also affords good long-term employment prospects without much of a marginal difference.</p>
<p>“Qwerty, those of us who suggest this aren’t suggesting a garbage course. You’ll see that my suggestion included economics. High school graduates need to understand how mortgage loans, car loans, credit cards, savings accounts, mutual funds, life insurance, stock markets, commodities prices, and taxes work. That’s far more than definitions and study hall.”</p>
<p>I know no one is suggesting a garbage course, but a garbage course is what will come out as a “personal finance” course. If you want to recommend Economics as an academic subject just like people would take a History class, that sounds fine, however I doubt it’ll do a whole lot in regards to making people make smarter decisions with their money, since Economics as an academic subject is theoretical rather than practical. Economics (at least not Economics classes that I’ve taken, which is introductory level college Economics), does not teach about those subjects you listed for the most part, at least not in any practical way.</p>
<p>I’d also like to suggest that many adults don’t know how to manage their money well either. Many state governments and certainly our federal government can’t (or don’t in favor of votes, I guess that’s debatable). Many educators except those who teach math and science don’t know hardly any math, are we going to make sure the people who know math are going to write the curriculum? Who will write it?</p>
<p>A class isn’t needed for this loan problem.</p>
<p>A simple brochure that lists typical salaries for graduates during their “payback years” for various professions would go a long way (since may students overestimate how much they will be earning.). </p>
<p>There should also be a mention of how much of the salary is already spoken for with taxes (state, local, federal, FICA) and living expenses (rent, utilities, car payment, car insurance, gasoline, health insurance, food, clothing, entertainment, cell phone, etc), which leaves little for loan repayments. (Since young people who are used to having parents pay for these things often forget how much these things cost and that these are things that they will be paying for after they graduate)</p>
<p>There should also be a mention that those who will need to borrow for med/law/business/grad school, should also take that into account and borrow less for undergrad. </p>
<p>The brochure would also include a chart with various monthly payment amounts based on cum borrowing amounts over 4 years.</p>
<p>How about a law that does let a student “give back” their diploma and credits and get a refund of their tuition? Money borrowed for room and board would have to be paid back.</p>
<p>If the college or university created no value, why should they retain any money?</p>
<p>So let me get this straight… someone takes out six figures worth of debt to get an undergraduate degree in religious and women’s studies and now they’re whining because it turns out there aren’t exactly loads of people tripping over themselves to hire folks with a degree in religious and women’s studies and so they’re struggling to make the loan payments. Sigh. </p>
<p>Whatever happened to old fashioned personal responsibility?</p>
<p>Six figures of education debt is totally insane unless you’re practically guaranteed a position in a lucrative job post graduation and even then it’s a huge financial toll to have what amounts to an extra mortgage/rent payment on your back every month year after year. And to do that for undergrad, especially when it’s in a degree that isn’t particularly marketable with out additional graduate school, is practically financial suicide. </p>
<p>When people look at these debt repayments they often don’t look at the whole picture. They tend to only look at what’s going out during the repayment and don’t include the “opportunity cost” of using that money to repay the loan vs. what else it could be doing.</p>
<p>A $100k loan at 6% interest (assuming you start repaying the day you graduate) equates into $600 per month for 30 years. Of course at the end of that time period that $100k will have cost you $216,000. </p>
<p>A lot of people would stop there, but imagine if instead you went to a cheaper school (eg your in-state public university) and didn’t have $100k in debt at graduation. If you took that $600 per month and put it into some sort of retirement vehicle for just the same 30 year period and assuming a 6% average return on investment (quite conservative) you’d have a bit over $1 million by the time you reached your early 60s. </p>
<p>The question’s not should I take out $100k to get an undergrad degree in religious and women’s studies… it’s do I choose between taking out $100k in debt for my undergrad degree and spend the rest of my financial life playing catch-up or do I explore more cost effective options and in return take a cool extra $1 million + in cash when I retire. </p>
<p>I know I sound like Suze Orman… but when it comes to this sort of stuff she’s totally right.</p>