@twoinanddone You have been fortunate. Many others are not and end up with loads of debt and no degree.
Agree that launching in Dayton or Tulsa doesn’t always sound so appealing to a new grad- until they see the cost of housing.
It just confounds me that for this generation who do SO much research for such stupid things (really- do you need to Yelp every single time you buy a sandwich?) are so casual about something which is both important, really expensive, and has consequences down the road. I have tried to help dozens of young kids launch (friends of friends, neighborhood kids, etc) and the misconceptions they have about careers and trajectory and growth and professional development is just astonishing.
The debt is real, the perceptions about careers are frequently not so real. (Don’t we all know a kid in real life who convinced the parents that they had to go into debt because the only school that had an “International Business” major was the one they can’t afford? As if you can’t get hired by a multinational company and sent overseas if you only major in plain vanilla finance, or history with a foreign language fluency?)
It’s because parents are allowing their kids to take out more loans than they can pay back. Johnny got into his “dream” school and we HAVE to find a way to let him go there, so they co-sign private loans. Those are completely irrational decisions based on an irrational demand from a teenager who has ZERO understanding of how hard it is to pay back $100,000. Who’s the adult here? It’s a parent’s job to bring their star-struck kid back to earth. The affordability talk is a good way to break the prestige fantasy and help them start thinking like rational adults. It’s better to have a disappointed teenager now than a college graduate with a crippled future.
Meanwhile, “the federal official in charge of protecting student borrowers from predatory lending practices has stepped down.”
https://www.opb.org/news/article/npr-student-loan-watchdog-quits-blames-trump-administration/
The end of the “gainful employment rule” will also mean fewer restrictions against using government student loans on the least valuable college programs.
https://www.chronicle.com/blogs/ticker/over-800-programs-fail-education-dept-s-gainful-employment-rule/116378
https://www.chronicle.com/article/Here-Are-the-Programs-That/238851
The student can’t take out that much in loans, @coolguy40 - the idiots are the parents.
“It’s because parents are allowing their kids to take out more loans than they can pay back. Johnny got into his “dream” school and we HAVE to find a way to let him go there, so they co-sign private loans. Those are completely irrational decisions based on an irrational demand from a teenager who has ZERO understanding of how hard it is to pay back $100,000.”
And yet people on CC are much more understanding (and even approving) of the parents who live on a fraction of their salaries, have an old car, smaller house, no holidays, etc so their kid can go and spend another $100,000 or more on the “dream” private school rather than attending a more affordable in-state public school. And there’s another set of people who aren’t taking out these loans but still have to (or even plan to) downsize in retirement because too much of their savings was spent on paying for expensive colleges for their kids.
Aren’t those decisions still based on an irrational demand from a teenager who has ZERO understanding of how hard it is for most people to save up $100,000? Moreover, those parents don’t usually say “here’s the $100,000 I’ve saved for you, do you want to spend it on the fancy private college or something else, like a house downpayment?” More often than not, if kid 1 doesn’t spend the money, it goes to pay for kid 2’s expensive college instead (which doesn’t exactly create the optimal incentives for kid 1 to look for the best ROI).
Richer people make irrational decisions about education spending too, it’s just that the consequences aren’t necessarily so dramatic or visible. But in fact the people who took out the loans might even be better off if their loans end up getting written off at some point in the future, just like the people who walked away from their underwater houses in 2008 were sometimes better off than the people who kept paying. Like this guy:
https://www.brookings.edu/blog/up-front/2018/05/30/why-the-dentist-with-1-million-in-student-debt-spells-trouble-for-federal-loan-programs/
This is an excellent overview of the student loan problem, with some useful figures. I’m pretty certain that in the next recession there will be a widespread bailout of borrowers. Who knows how generous it will be?
https://www.zerohedge.com/news/2018-08-28/how-us-education-became-debt-sentence
^^I disagree. It’s a poorly researched and written blog (and likely against the ToS).
Especially given that the linked site has earned a reputation for being mostly doom-and-gloom conspiracy theories and such…
There’s a fallacy of composition here. The US has a lot of credential inflation. Jobs that in the past would have gone to a HS grad now go to a BS/BA holder. Jobs that used to go BS/BA holders now go to people with graduate or professional degrees. While an individual is undoubtedly better off with a college degree, the aggregate effect on gdp and the tax base, is extremely debatable.