<p>Why are so many students graduating with so much debt? It's outrageous.
I wanted to know what are the biggest myths that you have when it comes to graduating college debt-free? A lot of people say they make too much money to qualify for financial aid or that their child is just an average student so they don't have the highest GPA or SAT scores, but are there any other reasons why you can't graduate college debt-free?</p>
<p>I assume a lot of parents are unable to fund their children’s college education each year without incurring some debt because they live beyond their means or they don’t have piles of money sitting around waiting for the college bills to come rolling in.</p>
<p>We are a middle class family who lives in a house that is a throw-back to the 80s but we are very frugal so we can send our kids to college. It’s embarrassing to have my friends over but I just explain we live without flat screen TVs, 4G (or 3G for that matter) cell phones, an updated kitchen and bathroom, new cars, and new furniture so we can send our kids to college. </p>
<p>I have several friends who complain about the cost of college and whine about how unaffordable it is (I’ll agree it’s ridiculously high) but they’ll remodel their kitchen, get new carpet, buy cars for their kids, and go on expensive vacations. Our “vacation” this year was taking our youngest to visit colleges she was accepted to but we hadn’t visited in the spring and then dropping her off at college in the fall. The spring trip was the first time I’ve been on an airplane in five years because we’ve been paying for our oldest daughter to go to college.</p>
<p>My husband lost his job a year ago and is in training and will hopefully have a job soon but this is the first year our oldest has had to take out a subsidized loan. She goes to a state school and it’s the cheapest one in our state. We previously paid for her college expenses with my husband’s salary and we paid our bills with my salary. While I didn’t want her to have to take out any loans, with her father out of work there was no way around it and $5,500 in loans for a 4-year degree isn’t bad. </p>
<p>This year our youngest is also in college and both kids received significant financial aid (thank goodness) so we had to cash our two remaining small investments (which we’ve been paying $50 a/month to since we were in our 20s) to pay for our kids’ college expenses this year. Hopefully my husband will begin work in December or January so we can pay for our youngest daughter’s sophomore year of college because if his salary won’t cover the cost we have nothing left to pay for college and we will not be taking loans ourselves to pay for her college costs. It’s possible she’ll have to take a year off (if that’s possible) and go back the following year if my husband has trouble finding a job. I hope it doesn’t come to that but it could, unfortunately.</p>
<p>So . . . if you have extra money sitting around, we’d be glad to take it off your hands LOL!</p>
<p>The school where I teach gives out most of its scholarships based on on index of ACT scores and high school GPA. We literally go to college fairs and sign kids up on the spot. Of course, the students must maintain a minimal GPA in college to keep the scholarship, and that’s the trouble. High school GPAs are so inflated (in my state anyway) that a lot of students lose their scholarships after the first semester. They just can’t keep up.</p>
<p>Myth - that a name-brand college is always a better choice. Shoot, outside of cc or higher ed in general, I don’t know that many ranked schools have much name recognition at all. Have a friend who graduated from Pomona. Hadn’t heard of it until I met her, kwim? There are plenty of people who would rather take out loans and go somewhere they feel like is recognizable.</p>
<p>I’m not sure name recognition is a factor. There are schools with name recognition in their region, but not across the world. And there are plenty of schools that aren’t on everyone’s daily radar that are excellent schools.</p>
<p>
Because a student/family picks a school that is too expensive for their income/household expenses. For some reason students don’t want to start at CC despite the obvious cost savings.</p>
<p>
</p>
<p>One reason:</p>
<p>People keep hearing horror stories about courses that won’t transfer from CC to 4-year. What they don’t hear as much, I think, is that there are ways to minimize this problem, especially if you know in advance what 4-year school you want to transfer to. As with anything else in life, you can’t cross your fingers and make a bunch of assumptions. You have to play it smart.</p>
<p>In some states the public support for colleges has eroded to the point that the public schools are very expensive even for in-state students.</p>
<p>I can easily see how it would be impossible for many families to pay out of pocket for college in states like Illinois and Pennsylvania.</p>
<p>I think the major problem is parents don’t know how the process works. They assume only low income people get scholarships or only athletes. Another thing is I don’t think they realize how many colleges are actually out there (with a lot of great deals).</p>
<p>The facts are:
Parents don’t know how the system works.
Prices keep going up.
Good grades or good scores are not enough to pay for high name recognition schools BOTH the kid and parents think they “deserve.”
It’s tough to be financially stable enough in the middle class to pay 10-30k or more a year per kid…parents are still paying off their OWN student loans, or they spent money on fertility treatments or divorce, they experienced an unstable job and the economy wasn’t better every year like they expected, increased health care costs (plus health issues), underwater due to housing bubble, they spent money every month and year to pay for EC’s or camps or schools or prep classes that got the student in the great spot, and trying to save for retirement without the same company retirements/benefits.</p>
<p>
</p>
<p>These are reasons why people might not get a lot of aid, but they’re not reasons why people would graduate with a lot of debt. You figure out how much your family can afford to pay for college. Add in another few thousand from the student working. Then try to find a college that would fit within that budget. If nothing works, increase the budget by the amount the student could get from Stafford loans ($5500 for freshman year).</p>
<p>It’s too expensive for eligible finAid people to have it 100% covered, but not expensive enough for “rich” people to be eligible.</p>
<p>The FAFSA EFC and the PROFIL expected contributions are generally numbers that few families can meet out of current income. Most of us would be very hard put to suddenly have pay out that percentage of income, that dollar amount for four years running unless livng well under what the income dictates (and yay to those) or making so much over what the living expenses are that they have that surplus. Most famlies “move up” as they make more money wanting the amenities and luxuries that the higher income allows them to have. Yes, I did it. We live in a big expensive house in a very good school district, convenient to what we do in our lives, considered safe, with people who share a lot of our values. We have a nice house with extra bedroom and it doesn’t need a lot of work. The area is pretty safe, and the community does take care of a lot of things very well. Oh, yes, I’ve moved up the ladder from some places where we lived 30 years ago, and I don’t miss a lot of those features. I love our neighborhood, the way it looks, I love having plenty of room to take in the elderly mothers and still having breathing room, being able to have guests for extended time periods, my kids have their own rooms, I can go down the list. And, these sort of things are not abnormal to want to have for every day life. In my case, I have a dozen family members enjoying these wonderful benefits for many minutes, hours, days ,years in the time we have had them. So, to say this is a waste of money isn’t going to cut it with me. This is our life.</p>
<p>But other expectations crawl, creep or are inherent with this type of life. We have to keep the yard up to a certain standard, for instance, and the kids going to school around here talk about going away to school, school rank, reputation, recognition are in the picture, not whether one is going to college or not. Other things too. And most of us who make this sort of move, have education pretty high up there on our priority list. It is on mine, and something I’ve had to juggle all of the time with our standard of living costs. </p>
<p>So, when it comes to college, even though we have a high income, $5K a month after taxes for a private college isn’t going to happen. That money has already been promised to others in the form of monthly commitments, mostly to the house that owns us rather than the other way around. So, we have to look at what we can pay out of the monthly paychecks towards school. If the school costs more than that, then we have to look into our savings. This is where it gets tricky, because most of us did not save enough for what colleges are costing these days. No where near enough when we are talking the private slelep away schools. I felt back in year 2000, that there was no way the numbers could continue to rise the way they had, and when the economy went bust and there was so much unemployment, I could not beilieve how the costs still went up a good 3-5%. Also a lot of colleges OOS, and some little known privates that were some nice deals back then, have really raised their prices too. Also, you don’t just save for college. As a responsible family, there should be emergency funds in place and of course retirement. But we did save some for college, Just not enough. So we can take those savings and divide by 4 and that the annual amount of past income toward the annual college cost plus the annual amount you can take out of current pay.</p>
<p>And that shoud do it. But if you didn’t save much or anything and you are up in the whazoo with bills your income can hardly or can’t cover, due to salary decreases, emergencies, or plain old over spending and over commiting, then you have a big fat zero towards college costs. </p>
<p>If I’d done this right, I’d have had $120K in a savings account for my son and could afford $2500 a month out of our pay towards college, and he could go to a $60K school. That we have 5 kids made this problematic, and we missed at this goal, and a goal this was for us. We failed.</p>
<p>So what to do about college for our kids? What COULD we afford? We have past, present earnings, and can leverage some of it with future earnings, and the kid needs to come on board too. He had some savings, works summers and is amenable to working some during the school year too. He cojuld also borrow $5500 freshman year, and we could also borrow to open up some other options. </p>
<p>Or he could go to a local state school or a community college and we could pay all of that out of current income, if he commuted. We could even throw in a car, insurance and maintenace. We continue paying for the old three squares and the cot here at the house. A local private school offered a free tuitions scholarship, another a discount on tuition, so we had some options here if our son stayed at home. But he wanted to go away to college.</p>
<p>We are lucky in that our state costs are not so bad, and we can cover them, so he could to any state school, and we still would be doing fine. </p>
<p>But what about other possibilities? He’s running with a crowd that tends to go away to college and not the state unis. He wants some things that our state schools are not the best in providing, Since we’ve been so indulgent all along, we want to continue this, and we really wanted our kids to get to choose whatever college they wanted. By coming up with some numbers and some loans, kid can go to OOS publics</p>
<p>Borrowing opens up more opportunities by levering the income and by spreading out payment over a longer period of time. Responsible borrowing isn’t the problem, It’s when people borrow with no thought and plan of paying the money back. </p>
<p>We took out PLUS for our oldest. We probably shouldn’t, and we could see this path was not going to work with all of them, as we started loan repayment as soon as we took out the loan and amortized over 10 years. Even so we are just getting over his loans and he’s been out of school for 7 years now. That’s why the cautions need to be given. Seriously, by requiring payment to start immediately after getting the funds, would cut down on a lot of the loans, as families can feel the impact of what they borrow year to year, instead of blindly borrowing for all 4 years and suddenly getting hit, and with the loan amounts growing with no payments on them and that high PLUS interest. 25 year amortiziations are being offered these days. They are like mortgages with no house behind them.</p>
<p>The pretty simple reason is that the COA for even some public schools has reached 6 digits over the course of 4 years. In states like mine, where there is no state aid, that is kind of a problem.</p>
<p>The best way to educate parents about the costs of education is none other than a scaled “participation” cost in K-12 with an objective of having 50 percent of the cost of the HS carried by the family and a FAFSA like aid system. The offset would be lower property taxes. </p>
<p>As it stands, parents are lulled in believing education is an “Other People Problem” and that false promise of a free education really exists. By seeing a gradual bill in August, they might also start balking at the perennial waste and abuses in how school really spend their tax dollars. </p>
<p>Education is expensive because there are few controls in spending, and little to no efficiency in a system that is meant to ensure sinecures to an army of insiders.</p>
<p>
</p>
<p>There are a lot of inefficiencies, but [tenure</a> is not one of them.](<a href=“http://www.aaup.org/issues/contingency/background-facts]tenure”>Background Facts on Contingent Faculty Positions | AAUP) You certainly can point to the disproportionate number of administrators who have been hired in the last 30 years, as well as the huge number of specialized services for underprepared students.</p>
<p>The tech boom since the advent of the WWW has also been costly and has only recently been considered part of the base cost of operations (rather than something extra as it was in 1994, say).</p>
<p>There has also been a huge increase in spending to make campuses more “user-friendly.” When I attended a seven-sisters back in the 80s, we took it for granted that the paint was peeling and that one color TV for an entire dorm was a pretty good deal. We accepted that a 50-year-old claw-footed tub was a viable option when the showers were occupied. If we wanted to lift weights, we went to the gym. We sure as heck didn’t go to the spa down the hall.</p>