<p>Today my super intelligent, highly educated, highly technical, way smarter brother's global company stock bottomed out and he has more kids that are younger than mine. Debt for education.... bah. I'm old, I'm gray and I'm somewhat wise. In the 70s I wrote an off the wall op-ed piece for our college newspaper that predicted that we college students would during our lifetime pull within and revert to some very basic economic fundamentals. People thought I was nuts. They thought I was even nuttier in the 80s. Micro-econ I never got. Macro-econ I get.</p>
<p>Plus I have learned that the very smartest profs live in very cool places - so that's where we sent our first son.</p>
<p>We'll never get FA and our Ds are smart(top 10%) but not uber-smart, well rounded and athletic. D1 looked for OOS LAC and found it very worthwhile...D2 better stats but we're still pushing the 2nd/3rd tier schools and then up the ante for grad school. D1 will have no debt upon graduatin...D2 .... we'll see this time next yr!!!:)</p>
<p>I refuse to be over $140,000 in debt when I graduate from college, so instead I'll be attending my State U this fall-full tuition scholarship + other money in hand... (why do I have to be middle class?!? stupid CSS profile :p)</p>
<p>NorthMinn, dont assume that your D's cannot get very nice finaid awards. Our son was in the top 6% of his class with a 1450 SAT and recieved merit scholarship offers totalling $350,000 from 6 colleges. He is attending RPI with three scholarships totalling $25k/yr.</p>
<p>If she applied to colleges like St Olaf, K'zoo, Beloit or Wooster you may be surprised what scholarships they might offer. Carleton-nope.</p>
<p>Second orinaloog's post. S with MUCH worse stats got substantial merit offers from Wooster and Randolph Macon.</p>
<p>My S has a complete free ride (Tu, R&B, fees, books, everything) to a little local college for their honors engineering program. He was loathe to even consider this unbelievable offer, until we crunched the numbers with him. Because he will graduate from high school with 40+ college credits - not AP or IB, he went to college - he could finish the engineering degree w/in 2-1/2 years and then jump right into grad school at age 20. He has a 4.0 at this college now and has completed all their core courses.</p>
<p>We have compared the free ride and early entrance to grad school with the considerable debt he might incur at some other colleges. No debt vs. over $800/month repayment? Guess which one has more appeal? When you really do the financial sheets with your kids, the dream school doesn't always appear so dreamy.</p>
<p>Twice a year I take this thread out of mothballs in order to give parents and kids a reality check from the " atend a top school at any cost" mentality.</p>
<p>taxguy, this is such a worthwhile topic, IMHO. I am so grateful that H and I got out of undergrad with less than 12k of debt, which cost a miniscule amount over 10 years. Unlike many of our peers, we saved a lot in our twenties, which has paid off tremendously 20 years later. I am also grateful not to have asked my parents to foot the bill for an expensive college; they have enjoyed a relatively early retirement, and great financial stability which has benefitted everyone.</p>
<p>I wonder what the stats are on student loan defaults. I observed this among some peers and relatives. I even saw folks default who could have paid! Of course, in the end, we probably all end up paying for this type of behavior as a society.</p>
<p>With D #1 in the class of '09, we are weighing the options very carefully.</p>
<p>Taxguy... By routinely reviving this discussion you're doing a service to parents, students and the general public.
At its best motivation the attend the elite at any cost condition is driven by the parents desire to improve the lot of their kid, the students drive to better themselves and the wish to meet social expectations.
However its also driven by some very effective marketing or propaganda. People do tend to forget that colleges do have self referential agendas, which includes profit. And the catalog, web presence, and marketing for reputation can be as effective and sometimes as duplicitous as an ad for any up market item. It is marketing for status and not necessity after all.
That compounded with the even more overtly profit driven marketing of the edudebt industry can combine for an economically disastrous situation.
And that's not adding other factors of escalating college costs, such contributory elements such as trophy buildings, bidding wars for star professors (or coaches), corporate sweetheart marketing deals and etc. </p>
<p>A supplemental problem which may be specifically linked to the humanities contingent is the somewhat unique psychological vulnerability they possess.
For that crew, arts, music, theater, creative writing etc is a core component to their psyche. And as such to do these things they tend to absorb into the act of their creation rather than the consequences. And the schools (elite or otherwise) do prey on those tendencies. To the extent that they seem to have forgotten that the placement rate for the products of their programs is usually about 10%. But hey, they can do their art...but so few make it that its very evident reforms are needed in how humanities curriculum's are structured.</p>
<p>Pumpkin, the default rates averaged about 5-8% depending on the year and type of school if government default rates are used to assess the situation.(Inside Higher Education) However the government has skewed the stats because they only track for 24 months from graduation. In 2003 "the Education Dept.s Office of the Inspector General found that the smaller two-year look at default doesnt actually reflect long-term default trends" (2007 wordpress) Recently Inside Higher Education listed projected overall default rates of 11.9% using adjusted stats.
However Ben Miller from Higher Education watch recently did an analysis of recent data which has some frightening implications...
"A Wobbly Stool: Turning Student Loan Default Rates into a Better Quality Measure
Ben Miller - </p>
<p>The House version of legislation to reauthorize the Higher Education Act contains language that proposes to change how student loan defaults are calculated, a move that could have serious implications for schools and students access to federal student aid. This is a welcome change to the current shaky three-part system of accountability that fails to provide good information about the absolute and relative quality of a schools education.</p>
<p>The Current System</p>
<p>The absence of national examinations leaves only three things with enough teeth to effectively judge colleges that are not meeting desired standards for higher education: (1) accreditation, (2) licensure, and (3) loan defaults. Failure to meet these requirements can cause the school to lose the ability to receive federal funds meaning all its students will be denied Pell Grants, Stafford Loans, and other forms of aid. Unfortunately, these measures do little more than guard against diploma mills or fake schools, indicating nothing about the quality of an individual institution.</p>
<p>Accreditation appears to be the strongest of the three legs of this accountability stool, but in practice it is little more than a rubber stamp. To be accredited, an accreditation agency, which is typically one of six regional groups, looks at a schools resources and goals. Yet, as a July 2007 report by the American Council of Trustees & Alumni points out, these visits generally consist of little more than seeing if a school is meeting certain inputs, such as enough highly-qualified faculty. Accreditation agencies pay little to no attention to the outcome-oriented measures.</p>
<p>State licensure operates in a similar manner to these regional accreditation bodies with universities required to meet certain benchmarks set by their state. In many respects, state licensure is even easier to meet than accreditation standards, as the requirements are only on the local level.</p>
<p>Of these three standards, loan default rates are by far the most complex, yet also possibly the best measure of quality. The Department of Education calculates the percentage of students repaying federal loans from every given graduation year, known as a cohort, that default on those loans within two years of leaving school (for example, the 2005 cohort is measured in 2006 and 2007). Defaults in the third year or later are not counted.</p>
<p>Schools with more than 30 individuals in a given repayment cohort are subject to sanctions if more than 10 percent of a cohort defaults. A default rate of 40 percent in a given year or 25 percent for three consecutive cohorts results in the school losing access to federal funds.</p>
<p>The connection between cohort default rates and quality is not as obvious as regional and state accreditation, but it plays just as important a role. Since students can defer payments due to certain forms of hardship, defaulting on a loan is a sign that a student took on too much debt or could not obtain a job that allowed him or her to meet monthly payments. A large number of students in default thus can expose a school as being overpriced, poorly preparing its students for the working world, or both.</p>
<p>Despite their utiltiy, default rates are also a weak accountability measure in their current form. As our colleagues at Education Sector point out, it takes some time for a loan to officially default, meaning that the two-year window really only reflects students who make no payments on their loans.</p>
<p>A Welcome Change</p>
<p>Within the House reauthorization of the Higher Education Act there is a provision that would extend the cohort default rate measurement window (page 91) by another year, meaning students that default any time in their first three years after graduation will be counted for accountability purposes.</p>
<p>An analysis of default rates by the Department of Education found that a longer-term snapshot could show that default rates are as much as 60 percent higher than with the two-year window. Under the proposed change, public schools would see their average default rate go from 4.7 percent to 7.2 percent, while private schools would edge up to 4.7 percent from 3.0 percent.</p>
<p>The biggest increase, however, would be at for-profit institutions, which would see their average default rate increase from 8.6 percent to an estimated 16.7 percent. Even more troubling, though, is the fact that were the cohort window extended to four years, for-profit colleges would have an average default rate of 23.3 percent. In other words, after four years, one out of every four for-profit students would likely have defaulted on their federal student loans.</p>
<p>The Career College Association, an organization of vocational private schools, is opposing the House provision (click on Background Information), claiming that defaults far into the future have "little to do with [the students] education and more with their personal behavior and responsibility, or the lack thereof." The group goes on to claim that socioeconomic status is the highest indicator of default and that institutions enrolling lower-income students are thus likely to have higher default rates.</p>
<p>Even taking this argument into account, the projected for-profit default rates are still much higher than community colleges and other public institutions that enroll a large number of low-income students. For-profit default rates with a four-year window would still be seven percentage points higher than two-to-three year public schools.</p>
<p>This raises some troubling questions about for-profit colleges, such as whether students may be taking on overly high levels of debt to pay for programs that carry little value in the job market. It adds credence to the assertion that for-profit schools unscrupulous admissions and marketing policies are having long-term detrimental effects on their students.</p>
<p>When nearly one-fourth of a schools graduates default on their federal student loans, its not a sign of individual flaws. Its a troublesome indicator of an institution that is failing its students. If Congress wants to actually measure the quality of an institution, it needs to adopt the three-year window and strengthen at least one part of these supposed accountability measures."</p>
<p>And what cannot be discounted in any discussion about student loan default rates is the draconian manner in which these are handled. Literally and damned unjustly the recent regulations controlling student loan defaults ripped debtors rights apart, there is no form of debt in this country which allows such rampant abuse or power by lenders. Yes these regulations did lower temporarily- student loan defaults but only at a appalling social and personal cost. Many of us who are faculty are seeing the appalling effects of that misguided agenda because in a poor economy students aren't getting the work needed and are increasingly desperate to pay loan tolls in a rigged system in which they have no rights or proper protections. And that desperation has included some even considering death as their only option.</p>
<p>i think what really needs to happen is not to send everyone to the most affordable school, but instead to make every school affordable. This a lofty and most probably naive dream, but it needs to be done, especially if we want to be a nation that touts equal opportunity and equality, and especially if we want to nurture brilliant disadvantaged kids who would otherwise be attending MIT but instead start working at Stop and Shop because their family needs money. The culture of college does not exist in many areas of the country and one of the main reasons is that "college is expensive"</p>
<p>which it is</p>
<p>so what i am talking about is massive federal subsidies making ALL universities affordable, and a system of finaid that actually makes sense. </p>
<p>Look to our neighbor to the north. No one pays near the 45k a year we pay down here for a harvard quality education and educational experience. Granted, a lot of that is buffered by grants and loans, but there are two major problems with this system, 1. is that the EFC is always more than you can actually pay, especially if you have been responsible enough to save for college or are on that cusp of making too much to get grants but not enough to afford it, and 2. loans are not financial aid -- few students enter lucrative enough fields after college to afford that, and the juice keeps running. </p>
<p>So what we need here, people, is not a conversation about whether or not one should drop the dough to pay for Yale, but how to get Yale and its cohorts to take the steps towards affordability for all, as Harvard has done, for instance. But I think this must be done on federal level as few schools have the endowment that Ivies and other top 20 schools have. The money is there. It just needs to be deverted from the pentagon. If we can deficit spend billions on a war, why can't we deficit spend a fraction of that to nurture the future of our country through education?</p>
<p>There are countries which have done what Claysoul is proposing, to certain extents. Largely they've enacted these policies because they have noted an educated populace, and an educated populace who aren't mired in debt are a economic asset to the country as a whole.
Perhaps however Germany, Ireland or Australia might be better references than Canada. Canada does have a somewhat better system than here in the US, but not extensively so. With the Canadian situation its more a lesser degree of debt being involved rather than a substantially different system. In Canada the debt, education issue has become contentious enough that they have active consumer student rights organizations not dissimilar to like organizations here in the US . So in their case the tolls levied are less, but are still a concern.
However what Harvard and other elite schools have done to correct for the educational debt issue will not be soon be enacted at many of the state schools. Simply because these institutions lack the resources and are usually inadequately supported by the overall government. Which keeps the door wedged open for the edudebt industry. Which ironically largely gets its massive profits from redirection of government money...
Granted we've almost lost the potential of a generation to a system which is not benefiting those it was supposedly there to serve, but the situation can change. It depends on where we chose to allow our resources (and tax money) to be directed. And just maybe it should be directly routed to students and schools rather than indirectly providing for corporate coffers.
SMC,s 220% fee increases were largely possible due to governmental policies, as was the recent 250 million+ over billing of the US department of education by NNC. So yes, the juice is going to a bloated financial monster and not to the common good.</p>
<p>Should you incur substantial debt for dream school or even pay the "dream" tuition?</p>
<p>No! Then again, if you're the kind of parent that tries to buy your kid's love, go for it. If you feel the need to pay $45,000+/yr to have your kid take 2 years of general education classes--go for it. If you feel the need to brag to your friends that your kid is attending an overpriced "elite" college, I suggest you go right ahead and pay for it. Just remember that when the kid graduates from his/her "dream school" and goes on to graduate school, he or she will be sitting next to a kid who graduated from a public state university debt free.</p>
<p>Some state schools may graduate debt free, but many do not for reasons already mentioned. But you are quite right about the status and glitter appeal perhaps not being the best motivations for a parent to pay for and send their progeny to an elite high cost school.
Unfortunately for those who do graduate from state schools and do incur student loan debts, it can be a substantial problem although the amounts are usually much less. The problem is that those who often attend these schools usually begin with much less status and resources so it takes a much lesser amount to be economically damaging.</p>
<p>IMO, another question might be, is it worth it to PAY significantly more for an elite school education (forgetting the question of debt for the moment). Is an Ivy or next tier elite private school really worth a huge amount more in $? 50k? 100K? 200K? Money can be used lots of different ways. Imagine having 100K fall in your lap as a result of choosing an alternative (and good) option. Wow, that could fund retirement if invested at age 18. Wow. Sometimes, it's hard for me to see how people can ignore this and pay whatever it takes for the "dream"</p>
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No! Then again, if you're the kind of parent that tries to buy your kid's love, go for it. If you feel the need to pay $45,000+/yr to have your kid take 2 years of general education classes--go for it. If you feel the need to brag to your friends that your kid is attending an overpriced "elite" college, I suggest you go right ahead and pay for it. Just remember that when the kid graduates from his/her "dream school" and goes on to graduate school, he or she will be sitting next to a kid who graduated from a public state university debt free.
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<p>This other extreme is also self righteous and irritating. How about viewing an elite private education the same way you view other luxuries of life? For those who can afford it, value it and have a child competitive for top colleges, is there something wrong or stupid to agree to pay for it? </p>
<p>I admire taxguy for starting this thread as a balance to the elite/ivy mania prevalent on this web site, but those who do their due diligence and make a decision either way (public vs. private, merit vs. full pay) do not need to have others sit in judgment of their motives or intelligence.</p>
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IMO, another question might be, is it worth it to PAY significantly more for an elite school education
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<p>Why spend the money for the first two years of a flagship state U when your child can go to a community college, transfer to the state U and wind up with the same exact diploma?</p>
<p>Why spend the money for the first two years of a flagship state U when your child can go to a community college, transfer to the state U and wind up with the same exact diploma?</p>
<p>Sorry, but these are two different college experiences. Going to a state university usually means living away from home, the dorm experience, etc. while going to a community college usually means living at home and working part time. You're right--both will get you the degree and in the long run, it doesn't really matter how you do it. Finances usually dictate the decision. </p>
<p>If you're trying to say that kids in public state universities are not competitive enough (subtle wording meaning bright enough) to attend top tier/Ivy schools, you're wrong. Once again, it comes down to money. There are many students attending public universities with the academic statistics to gain entrance into competitive/elite colleges and many have been offered acceptances. Perhaps the merit money wasn't enough, they didn't qualify for financial aid, or they wisely chose not put themselves and their parents into massive debt.</p>
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If you're trying to say that kids in public state universities are not competitive enough (subtle wording meaning bright enough) to attend top tier/Ivy schools, you're wrong. Once again, it comes down to money. There are many students attending public universities with the academic statistics to gain entrance into competitive/elite colleges and many have been offered acceptances.
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<p>Not at all, since I was one of those kids many years ago and am a proud state school graduate. My point was about "judging" either way. Every family should make their own decision on what would be best for them and their child.</p>
<p>And actually many who do attend state schools are more competitive if its looked at from other perspectives. Often coming out of less than affluent situations, having been subjected sometimes to very poor primary and secondary schools, and still often able to excel in a collegiate environment. That's competitive.
And just perhaps not condemning such people to a crushing educational debt would be the most moral, productive and egalitarian approach. But its not what we have now, insofar as state higher education has become much too enmeshed with the credit industry. And it will remain that way until some state and federal representatives get their morals out of the vest pockets of the big lenders.
Great men such as W.E.B Du Bois and John Dewey would be horrified by our current system. What they advocated was to have higher education properly available as the proving ground for the best of a people or of a economic class. A place which hones the abilities of those stars to then allow them to then go out and teach others and otherwise improve the lot of the common man...what we have produced is a system which economically marginalizes or even condemns by debtors chains those very individuals who could do so much to better our country.
So its good that such as Harvard are making efforts to reform the problem. But the state schools are the institutions who have more to do, and much more to answer for, simply because their mission which affects so many more has been corrupted to benefit so very few.</p>
<p>I am a parent who attended 3 state schools (one undergraduate degree, two graduate degrees). I came out of it with $16,000 in debt, which took me 9 years to pay off. State schools don't necessarily equate to zero debt, especially in California, where we used to live.</p>
<p>Our daughter's choices came down to Berkeley vs. NYU. At first blush, you may think Berkeley would have been the wiser choice, financially. In our case, we were offered no financial aid other than loans to cover Berkeley. The cost would have totaled, including all of her expenses, about $100,000 (tuition, room/board, transportation, etc.) for 4 years.</p>
<p>NYU offered her a very modest scholarship ($6,200/year), and the total cost per year is around $52,000, not including personal living expenses. So the total for four years is double that of Berkeley: about $200,000. That's a lot of money, and we ain't rich. We're both writers, if that gives you any idea of how much money we make (read: solidly middle class).</p>
<p>But we made a decision: We did NOT want her to choose her college based on cost. We figured there had to be a way to make it work, whichever choice she made.</p>
<p>She chose NYU. We had enough money saved to cover the first year, but after that, we really didn't know what we were going to do.</p>
<p>To make a long story short, we made a bold move: We sold our home in Calif. just as the market was starting to slide (so we didn't get quite what we thought we would), and decided we would use that money to pay for NYU. </p>
<p>We moved to NYC (actually to Riverdale, in the Bronx), seriously downsized our home and living expenses, and got jobs at Columbia University--not knowing at first that an employee benefit is that, with both of us working there, Columbia pays ONE HUNDRED PERCENT of our daughter's tuition at NYU. (Yes, you read that correctly.)</p>
<p>With that employee benefit in place, we now figure that our out-of-pocket costs to cover her 4-year education at NYU are identical to what we would have paid had she gone to Berkeley: around $100,000.</p>
<p>All this to say, there are many ways to pay for your child's education, and as I wrote in another posting, many universities offer this sort of reciprocal reimbursement if you are an employee. </p>
<p>Sound like a drastic move? It was, but it's been great for us. We live nearby in case she needs something (like when she had mono), and we have reinvented ourselves at midlife and taken on some exciting new challenges.</p>
<p>We now live in 600 square feet as opposed to 1,500, we sold our cars and use the subway or bus, we look for free or low-cost entertainment in NYC (lots of choices!), and we couldn't be happier. </p>
<p>What may have seemed like a huge sacrifice to some--You're selling your home in Calif. with the pool?? And moving to NYC???--has been a boon for us. No, it hasn't been easy. Not at all. But it has been GOOD for us, in so many ways.</p>
<p>And all of it has allowed our daughter to go to the university that was ultimately the much better choice for her line of study.</p>
<p>One last point: We, the grown-ups, have learned a very important lesson through all this, which is that truly where there is a will, there is a way. And some things, like education (even at the ridiculous prices nowadays at ALL schools, private or otherwise), are worth every penny.</p>