@bluebayou Hummm… I don’t really know that the Morehouse grads are all poor to begin with. So, there’s another stat that we don’t have: how does student loan debt correlate to parental income/status?
So many things we don’t know…
“Maybe CC’ers need to stop steering people to all those quaint little second and third tier LACs all over the northeast. Those seem to be some of the biggest culprits among the private schools.”
I get called a "prestige $%^& " on CC (and in real life) all the time, so I’m pretty thick skinned by now. There is a reason why kids at Harvard have less debt than kids at “fill in the blank LAC”. It’s called “massive endowment and generous need based aid”.
I’m no apologist for Harvard and the other “meets need” colleges- they can handle things themselves without little 'old Blossom to carry their bags for them. But in the spirit of “anti-elitism/Harvard and Stanford are just big brands skating on their reputation” but the REAL learning goes on at Marlboro and Hampshire (poor Hampshire)-- take note. And all the folks on here who periodically call for punishing the colleges who successfully grow their endowments so we can subsidize the colleges whose endowments are either in the tank or weren’t so hot to begin with and never scaled-- take note.
Money matters. In a perfect world-- yes, fit would trump all and the financial aid fairy would visit everyone’s home and sprinkle fairy dust all over the place. In the real world, most people have to make some trade-offs. And if that means a well-resourced state flagship with oodles of majors-- and yes- a teaching assistant every now and again- that might be preferable to borrowing a boatload to attend a college with a better learning style for your kid. Might be.
It’s your money, you get to decide how to spend it. But people sign these loan forms with no plan on how they are paying them back. Mom and Dad- if you haven’t been able to sock away a thousand bucks or $750 a month for the last 18 years, how are you paying off a $1400 /month loan?? Which law of physics have you just revoked to make that happen?
Neither we nor our children borrowed to pay for undergraduate degrees. My spouse and I had saved over many years to have a nestegg to cover >50% of the costs; and this, combined with current annual earnings, allowed us to cover about 90% of the total costs of the two kids’ education. My parents (“the grandparents”) paid the rest, by having donated federal savings bonds to the kids over the years. So both kids graduated without any debt; and we owed nothing either.
Because our older one stopped with his BA degree and had a decent job right out of college, he has been financially on his own after that.
But after working in the economy for 5 years, and then encountering the “crash” of 2008, our younger one decided to return to college for an advanced degree (MBA). She financed most of that from federal direct loans, a tremendously expensive source of money with a ~7.5% interest rate! She struggled to keep up. After a couple of years we came to the rescue and used some of our savings/income to bail her out. Otherwise she’d have been in debt hell even today. Now both kids are prospering as well as progressing in their careers, and we are accumulating in anticipation of retirement.
In the first place, I never wrote ‘all’.
Beyond that, the numbers are readily available on IPEDS…nearly half (48%) of Morehouse students are eligible for Pell grants, which puts them in the lower income levels.
And from the Common Data Set, we see that Morehouse does not meet full need, meaning students have to have self-help, i.e., private loans.
https://nces.ed.gov/collegenavigator/?q=morehouse&s=all&id=140553#finaid
@bluebayou I was musing about overall American rates of student loan debt, not just Morehouse. Thanks, though, for the clarification. That’s exactly the sort of data that is rarely conveyed accurately in the media.
This report has much of the data people are asking for, it just has so much data that it takes time to unpack.
https://trends.collegeboard.org/sites/default/files/2018-trends-in-student-aid.pdf
2019 report is not yet out
Regarding FTE students and what type of school they attend: (page 16, bottom right, from NCES and IPEDs data)
32% attend 2 yr publics
42% 4 yr publics
18% 4 yr privates
7% for profit
@ccprofandmomof2
p18 figure 10a shows share and avg of parent plus loans by type of school
fig 10B shows share and avg of private loans by type of school
p22 figure 15 shows cumulative ug debt by public vs private 4 year schools, not counting parent plus loans
Table on page 20 lower right shows average loan balance per borrower, # of borrowers and total balance outstanding all detailed by repayment status. (unfortunately it is not cut by age, @privatebanker)
So this should be pinned to just about every post on CC. This needs to be filed under “The best college for your child is the one you can afford”.
Giving advise on here sometimes can be difficult. The child OP will state that their parents can afford college but never had a meaningful conversation with them about it. This truly amazes me. Or the parent that says to apply where ever you want to then can’t afford their own car payment. Having unrealistic assumptions of what “merit” or “scholarship” money actually means.
Excellent @Mwfan1921
Thank you!
College debt comes from different stories/reasons. All the way from the families looking to pay for an elite down to smaller amounts of kids or adults for looking to pay for community college and everything in the middle. Everyone has their own story and dream. But at the end of the day most are making a risky financial decision.
At this point there is enough data to be able to assign levels of risk and predict outcomes. Any normal lender would either not loan any money or they would charge such a high rate of interest almost no one would take out the loan. But these loans are backed by the gov’t in some cases or not able to discharge in bankruptcy. Most people on this board know this. It is a perfect storm for people to be given the opportunity to borrow money they have no business borrowing.
Like I said in an earlier post I saw plenty of families make decisions this spring that will have many of them will end up with debt of $50-100K after 4 years. Not all of them but plenty. I just don’t get how people can disregard the cost factor.
I agree, go to the school that you can afford. However, you may not know what you can afford until you investigate. I had no idea what kind of school I could afford, except I figured I could afford a Florida public school, which was about $15k per year. I made that the goal.
Daughter was asked to look at a school that was $50k! NO WAY, I thought, but she wanted to look. Well, it turned out she’d get some money from Bright Futures, some from a resident grant. Okay, looking better. School had merit based on stats, so that’s good, more money. A big chunk more. Met with the coach and there were 2 other grants she could have, and then the coach gave an athletic scholarship. The $50k school was now cheaper than a state public.
However #2. If the money doesn’t fall into place, you have to walk away. We were always prepared to do that.
Some parents are unwilling to tell their children that they can’t afford a particular college. I don’t get that and feel like CC posters are usually very good about asking about afforability (even when that question is not asked). One of my colleagues is allowing his son to go to Penn State which is OOS, rather than a more affordable option, even though he says he doesn’t know how they will pay for it beyond freshmen year. Their other child is going to a private with scholarship money, because that school has the specific and unusual major the kid wants and which is an in-demand field. Another took essentially all loans to pay for his kid’s college education. I don’t quite understand how you can afford to pay back a loan, if you couldn’t afford to save anything in the first place. I try not to be judgemental, but I just don’t understand not setting a financial limit on college costs.
The issue I have with the Morehouse thing is that while it is great for those kids (and not clear if this applies only to the student’s own debt or to their parent’s as well), it has to be painful for graduates from other years who are struggling to pay for their own loans. It is a big, splashy thing to do. Perhaps paying for part of the next five years of kids’ loans would have had an even bigger impact - loan payments will be made beyond X% of the kid’s salary.
Looking at the state data for PA, the lowest average appeared to be Haverford, based on what I saw. One of the highest at over $40K was Kutztown, which is a state school. Clearly, for those students who have high need and who can get into an elite college that meets full need, that is the way to go. What is less clear, however, is how many of the students with debt are those with demonstrated need that are gapped or those with families that have EFCs that are higher than they are willing or able to pay. Many middle to upper middle class families, especially in high cost of living areas, have not saved enough to be full pay for college and are taking out loans.
Too many parents want to give their kids the college that the kids want and set up that expectation. Some kids are ungrateful creatures that expect certain things as their god-given rights unless they’ve been told repeatedly and firmly that college is going to be a search for funds as well as the schools. Sometimes even then, they don’t get it. Many kids upset and depressed that finances won’t let them go to their first choice. They don’t understand they are the lucky ones in that their parents are managing future finances so that loan repayment doesn’t become a big issue.
Interesting that I’m seeing ads for Kutztown on my computer (on CC) as I type.
I agree that most parents see college as what they need to do for their offspring to have a better future. That may, indeed, be true for many (not all). Then it’s really tough if you’re a median income family to come up with the cost in high cost states (like PA). It’s also tough for a median income family to come up with the cost in HCOL areas. There are some schools with terrific aid, both merit and/or need based, but the vast majority of students don’t have the stats for that aid. Thus, loans (even for the 2 year schools) are often the default.
I seriously doubt many are turning down full rides for full pay via loans. There will be some, undoubtedly, but very small numbers in comparison to those who just are trying for the basics. From my school, most students going to college will have basic loans. It’s a fact of life for the majority of economic levels. Whether they need more than that is more variable, but again, many do.
Not everyone has had years of steady income, rising year after year. Peak earning years? What’s that?
The financial aid forms cared nothing about our previous ten years of barely keeping our heads above water. Thank you 2008! The EFC only sees “now”.
So, even in-state tuition in Illinois, for our transfer student, required us (parents) to take out PLUS loans. Luckily, we can swing accelerated payments, as long as we keep our jobs and our health and neglect our house.
There was an article in the Chicago Tribune that something like 45-48% of Illinois Freshman go out of state. That’s alarming to me. We did when UIUC didn’t give us anything and other schools did. Major flight to Alabama etc due to 2/3 to full rides. Our state needs to do something to stop losing talent to other states.
@csfmap
Parents should understand that the secondary school “A” does not translate to a university/college “A” when most of the class also had “A’s.” It should be obvious, but parental pride blinds us. The average first exam grade in Physics when I went to an engineering college was 35.
The shock was meant to wake us up. The University was looking for a higher standard.
Watch what the University requirements are to maintain “merit” awards. It is one thing to “bait” an application. It is another thing trap the matriculating student.
Interesting that student debt in Canada is comparable to that in the US despite the generally lower tuition and lack of private universities.
https://cfs-fcee.ca/wp-content/uploads/2018/10/Factsheet-2015-05-Student-Debt-EN.pdf
I’m probably out on the fringes, but put me in the camp of: If you cannot graduate debt free - choose another school.
I don’t understand how this school loan stuff works (I’m sure I’m about to get an education) so allow me to ask a few post-worthy questions. In a few categories:
Getting loans…
Student loans from govt are capped (am I right), but parents can also take out education specific loans. For student loans is there any consideration on the major (as an indicator of future potential to repay?). For the parent loans, don’t the parents need to show that they can begin paying back the loan now (if I get a car loan I need to, how is a college loan different)?
Repaying loans
Are there any stats on what type of students are successfully paying off the loans? Major, job, and percentage of salary used to service debt? Are there similar stats on what type of parents are paying off the loans?
And two questions above except for loans in default.
I think that all this debt is driven by lack of financial maturity. It’s hard to argue numbers.
Average US debt is also lower than the UK.
“In England, the average amount of debt for each graduate is £32,220. … But average debt at graduation was $34,000 (£27,000), less than for UK graduates.”
In my age group, Aussie and UK educated expats really didn't work in the countries that paid for them to go to college. Aussies used to be able to leave Australia and student debt behind them, the UK had free tuition back in the day. That is't a great model either.
@Rivet2000 The problem is many (most?) students can’t graduate debt free and many college degrees do pay a better salary with an overall lower unemployment rate.
I know H had a 5 digit debt load when we married. We paid it off in 5 years and have been reaping the benefits ever since. If he had just gotten a job that was available to him where he lived we’d be nowhere near where we are now.
One of my own lads has wanted to be a doctor since third grade. He has med school loans now. He needed them to reach his dream. I’m pretty sure he’ll be fine, though he’s also considering some of those loan repayment options post residency.
There are ways/times when debt is a good choice. Folks just need to be realistic IME. Those are the things I try to discuss with the seniors who come across my path at school looking for advice.