NYT-- The Ripple Effects of Student Debt

Parents Forum
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<p>At: <a href="http://www.nytimes.com/2014/05/25/business/the-ripple-effects-of-rising-student-debt.html"&gt;http://www.nytimes.com/2014/05/25/business/the-ripple-effects-of-rising-student-debt.html&lt;/a&gt;&lt;/p>

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What are the roads not taken because students must take out loans for college? A collection of studies shows that the burden of student debt may well cause people to make different decisions than they would otherwise — affecting not just individual lives but also the entire economy.</p>

<p>For one thing, it appears that people with student loans are less likely to start businesses of their own. A new study has found that areas with higher relative growth in student debt show lower growth in the formation of small businesses (in this case, firms with one to four employees).

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<p>(More at link above)</p>

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<p>I would like to turn the question around. What is the ripple effect of no student loans? Is the only consequence a less financially burdened society? Or, is the consequence a less educated society because fewer people will be graduating from college (or trade school) because of lack of funds to pay?</p>

<p>Which would we rather have?</p>

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<p>Well, I went to Rutgers for a BS Computer Science and joined the Army National Guard. I was able to walk out of undergrad with a security clearance, no educational debt, and a software engineer position at a defense contractor that offered me a higher starting salary in a low cost area of living than any financial firm in a NYC.</p>

<p>The ripple effect of no student loans is that a 2.8GPA state university grad who was able to work less and live better. I was able to make large asset purchases such as real estate far earlier in my life than my peers who went to more prestigious universities but had to work twice as much as I did just to pay off student debt.</p>

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<p>No college loans does not necessarily mean no education. It could mean picking the most affordable option out of all your choices, or even picking the school that will give you the most aid. Not going to the most prestigious (yet expensive) university on your list could be a blessing in disguise</p>

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<p>Higher education has become so expensive that it’s nearly impossible for the vast majority of young people to afford it without loans, even with help from their parents. Picking a less expensive option is generally not the issue, as even state schools are a huge financial burden for most. As for picking the school that gives the most aid, again, how many students really have that option at all?</p>

<p>On top of all that, a bachelor’s degree has replaced the high school diploma as the baseline education level for nearly every job with growth potential. So you people are increasingly finding that they MUST take on debt in order to even have a shot at the majority of jobs.</p>

<p>“…if the cost of college tuition was $10,000 in 1986, it would now cost the same student over $21,500 if education had increased as much as the average inflation rate but instead education is $59,800 or over 2 ½ times the inflation rate.” <a href=“College Costs Out Of Control”>http://www.forbes.com/sites/steveodland/2012/03/24/college-costs-are-soaring/&lt;/a&gt;&lt;/p&gt;

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<p>@bajamm - That’s the question that came to my mind immediately also. I don’t know any kids who’ve gotten free rides or whose parents could afford the whole thing themselves. </p>

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<p>My kid took the free ride and only applied to school’s that were free or nearly free for us. $0 is what we could afford. She had many options. I started searching at the end of her HS freshman year. </p>