<p>Students absolutely do not run the calculations behind what their debt entails. The vast majority simply do not understand the opportunity costs associated with 100K in debt. I only applied to public schools for this exact reason.</p>
<p>an eloquent contribution, paying3. I'm gonna cut n paste it!</p>
<p>As one who plans to gladly fund an undergraduate education in music (and who knows if my kid is one of the top three in the world LOL!), I find the thrust of this thread disturbing as well.</p>
<p>If the only degrees worth getting are those that will yield lucrative careers, I think we may as well turn college into trade school after all. No need for philosophy, anthropology, sociology, psych, poly sci majors etc. How many undergrad students in any of the humanities are coming out of college with a career focus? Ever checked on the kinds of jobs a BA in psych can get, and what they earn? In my expensive city...like $18K. </p>
<p>If we are going to diss the value of arts education, let's go all the way and diss the value of the English degree, the Soc degree, the psych degree. Let's just abolish liberal arts altogether, and force everyone into engineering!</p>
<p>I understand the point of Taxguy's post, and I am not a proponent of debt. However, I think the attitude that a college education is only worthwhile if it yields a high paying job at the end is just plain rubbish.</p>
<p>Calmom notes, "I have read elsewhere that financial counselors advise that monthly payments should not exceed 8% of income "</p>
<p>Response: If this is correct or has any financial validity then no one should take on much debt. Think about it. If the average student makes $40,000 per year to start or less, 8% would be about $3200 in mortage payments. This translates at 8% interest for 10 years to a maximum debt of $31,814. If the child earns less than this, such as their starting pay is $30,000, the maximum debt should be no more than $23,920. </p>
<p>Sadly, many students have debt well in excess of this just for undergradute studies!</p>
<p>No wonder I have met so many kids who have defaulted on their loans. No wonder I have seen kids have to wait a long time before they can afford to buy their first home. No wonder that only 2% of those who hit age 65 can retire with the same standard of living that they had before retirements. Most have to either continue working or live on some form of charity from relatives.</p>
<p>I am deeply saddened seeing folks sacrifice their retirements under the guise of "finances be damned." I am saddened seeing kids with few economic choices due to their killer debt load.</p>
<p>What I want is for some people to say to colleges, "enough is enough" and send their kids to cheaper alternatives or to those schools that give the biggest scholarships. </p>
<p>Frankly, if the tuition races keeps heating up, the only folks that can really afford the ivy type schools, the expensive LACs and the other pricey schools will be the poor and the rich. The middle class will be financially closed out with poor financial aid. Frankly, I am beginning to believe that this is occuring today.</p>
<p>to my reading, taxguy is NOT bashing liberal arts education or some of the careers that they lead to. He is, wisely, simply pointing out that it is a very rare 18 yearold who understands what he/she is "signing up for" by taking on large amount of debt, and that a relatively low-paying career track only exacerbates the issue. That seems to me to be a simple statement of fact, and a call to caution. </p>
<p>Given the vice grip that many consumers take on in our society for lots of assets - cars, houses, boats, whatever - taking on debt for education does not put it in some sort of esteemed category. Those are hard dollars that must be repaid like any other. Given that the financial literacy of the average young person is, unfortunately, very low, graduating from college with tens of thousands in debt is a cruel way to become financially aware. </p>
<p>There seems to be some suggestion in this thread that a course other than an elite (and expensive) LAC is somehow a neanderthal idea, and if debt is the way to the Promised Land, so be it. That may be true for many, but it's a road to long term financial distress for others.</p>
<p>To each his/her own.</p>
<p>Taxguy..I did understand :) My statement was a shortcut to try and stem the tide of the "I value education more than you do" posts. I wasn't happy with Simba's statement about some people being in love with money. I took too much of a shortcut so I appreciate your clarification. </p>
<p>I think the numbers speak for themselves and they speak very loudly. </p>
<p>We all know that in general as education level increases so does pay. So yes, go to college. What you are showing is that obtaining that education at a premium price can be very costly in the long run. Your numbers are low risk investing so I believe they are very accurate.</p>
<p>Although we gave our son the option of all his choices he chose one with no debt. This decision has enabled our family as a unit to be financially much stronger.</p>
<p>Everybody keeps talking about their kids' dream schools. We leave the parents' dreams out of the picture for some reason. I still have dreams and I am every bit as deserving as my son. We are in our 50's with some very cool dreams of our own. One of those is to never, ever, be financially dependent on our kids :). I am sure they will be very happy with this when they are in their forties.</p>
<p>Agreed. Taxguy is not bashing expensive LAC or "elite universities", but calling for some fiscal sanity. I am a parent (2 in college, I a HS junior) as well as a hs teacher, so I have seen this scenario over and over again from many angles. </p>
<p>I thought of a student of mine who wants to be a film maker. Good for him - I hope he makes it. The odds say he won't. He is trying to decide between NYU (Tisch - $48,000) and SUNY Purchase ($13,000). Purchase is "less prestigious" and ironically probably more difficult to get into . To me its no contest. To make it into film you have to be able to work a lot of production assistant type jobs and wait for your chance. He won't be able to take these temporary, low paying jobs or internships unless he is debt-free.</p>
<p>My son graduated debt-free and was able to work the kind of jobs for a year that eventually got him into TV production. Its a jungle out there. </p>
<p>By all means follow your bliss, whether its in the arts, entepreneurship, law...just don't bankrupt your or your s/d's future.</p>
<p>deezmom makes a very wise point. Students must understand that the early parts of their careers will be, ideally, a time for taking risks, bolting a nicely paying job for one with more uncertainty, but more upside opportunity in terms of experience or money, or both.</p>
<p>If you are socked in with heavy school debt many of the options will be unavailable to you as you are heavily reliant on cash flow to service those loans. The fledgling film maker is an excellent example. With little or no debt he can drive to LA (or wherever), live simply and frugally and take on whatever menial film-related jobs which provide him with exposure and experience. If he has a $500 payment every month, that may be a non-option. </p>
<p>Students, the expression of "there is no free lunch" has more subtlety than it appears. Being debt free (or having manageable debt) is about options and opportunities, mobility, and peace of mind. This is true for individuals, the average family, for businesses and universities.</p>
<p>Can I just remind everyone that this thread (as I understand it) is addressing the issue of STUDENT debt, not PARENT debt? </p>
<p>This is not just a rehash of is a $200,000 college education as good as a $60,000 education...that is already covered on so many threads.</p>
<p>I want to also vouch for taxguy and make sure that we do not misrepresent the statements at the beginning of this thread. I was a classical greek major at a small LAC and I am associated with a LAC now. If I had a lot of money, no doubt I would advocate an LAC. They are sincere and strive for excellence in teaching, something that can not be said (with exceptions) about large state research institutions whose brand identity is based on publication. On the other hand, I am not sure that it is worthwhile going into extreme debt, if that debt is to be carried by the student (if the parent carries it, that is their choice).
A question I often ask myself is; why do parents continue to pay $45k per year when it is obvious that the S/D is not performing well, though not for lack of ability. Lots of money is being spent to sustain substance misuse. Why don't these parents (and they are typically wealthy) say to S/D, hey, try the real world for a few years, get your act together, and we will finance your education at that point? I would not be a Prof. today had my parents not done this to me.</p>
<p>^ At the risk of being off topic...From briansteffy: "Lots of money is being spent to sustain substance misuse. Why don't these parents (and they are typically wealthy) say to S/D, hey, try the real world for a few years, get your act together, and we will finance your education at that point?"</p>
<p>From what I've seen among my friends: It's because parents are in denial. Parents think it's all part of a "normal" college experience. Parents believe that at any monent these kids will grow up. Parents do not want these kids home.</p>
<p>PLEASE NOTE:</p>
<p>Taxguy started three threads on the same topic with the same post on three different forums: The Parent Forum, The Parent Cafe, and The Arts Majors Forum. Rather than three separate discussions on the same topic, along with copied posts between them, we have merged all three threads into one and it is featured on our main page as well as in the Parents Forum with redirects from the other two forums. </p>
<p>Please realize that when threads are merged, all the posts are inserted in chronological order. Thus, responses to posts may appear a bit out of sync since discussions are combined.</p>
<p>Weenie, I am addressing several issues at once</p>
<ol>
<li>Having large student debt</li>
<li>Having large parent debt (although this is a conscious choice made by supposedly knowledgable adults)</li>
<li>Paying for expensive colleges at the cost of sacrificing retirement savings.Again this is a conscious choice made by supposedly knowledgable adults.</li>
</ol>
<p>I am not sure that these issues are mutually exclusive anyway.</p>
<p>deezmom, I couldn't have said it better. Your example of the film student was quite compelling. Having little or no college debt or having a lot of extra cash around due to not paying high tuition costs gives a kid and parents a lot of options. I too can't believe that a kid will take NYU, incur crushing debt, over that of Suny Purchase. </p>
<p>I have seen far too many kids from middle class families incurring large tuition bills and debt from very expensive colleges. Our high school has a high representation at Tufts, Michigan, CMU, Wash U and Syracuse. I know some of the parents of these kids who attend these schools. They are not, for the most part, wealthy and did not, in many cases, get a great financial aid package since they are deemed to earn "too much." It is sad to see the debt load being undertaken. Even worse, some of these kids were given a great package by our University of Maryland,which is a very good state university,and these kids turned it down! In fact, one of my daughter's friends got almost a "full-ride" at Maryland and turned it down to go to Wesleyan. Her mom is a single mom struggling to make ends meet.</p>
<p>I really had to shake my head in disbelief at,what I believe, is fiscal insanity.I believe the reason for this is that there are few, if any courses, taught on financial planning and fiscal responsiblity. Yes, there are courses in ethics, government, math, science and even economics. However, many parents and most kids have little to no understanding of financial planning or of the future costs of what they are incurring. The "I want" syndrome is taking the place of what they really need.</p>
<p>Mini referred to the concept of dream school as an oxymoron. I may not totally agree with this,but I do know that most kids have no concept of what they want in life. Even those that do,usually change their mind anyway. They get suckered in by the charming pictures on the glossy brochures or by the coached tour guide. Rarely, do I see an expensive school being very forthright with expected costs. Check out Carnegie Mellon as an example. It is actually hard to find the total costs for tuition, fees, supplies, room and board without doing a search. Check out Syracuse University. They hide the schools costs quite well. No where is there a button showing: tuition and fees. The same can sadly be said of other schools as well.</p>
<p>Let me finally note:I am NOT bashing careers or study in the arts, education, music, english etc. In fact, I would have more of this available to students. What I am bashing, as noted above, is fiscal insanity and financial irresposibility. I want people educated and informed of the costs associated with any major financial decision.</p>
<p>Taxguy, Yes, I do think those three topics (listed in posts #133) are ones you are discussing, not just student debt. I believe your initial posts also dealt with the topic of debt for an arts major. </p>
<p>With regard to a parent taking on loans as a way to pay for part of the education costs, I see it like when I take out car loans. I don't make enough money to pay for it in one lump sum. However, if I pay out some of it (after paying some in cash, and also some is scholarships/grants), over many years, I can afford the payments per month but simply don't have that kind of money on hand. That's why we qualify for financial aid in the first place. We don't have $200,000 per kid on hand. </p>
<p>I also care about fit when it comes to college and so while my kid had a full ride at another college, that college didn't meet any of her criteria for college selection and would not have been a good fit. So, the cost of her college IS worth it to me. It has nothing to do with prestige but all to do with finding the best fit for the student. For me, that is worth the price. Financing the education and figuring out the loan payments we could handle were all a part of the decision.</p>
<p>I see it as giving our kids their start in life and after they graduate, they can take it from there.</p>
<p>Thank you collegemom!</p>
<p>taxguy: Oh, OK. It just seems like #2 and #3 have been discussed to death on here and very recently...but, whatever.</p>
<p>This topic should be the first discussion that parents and children have before looking at colleges. It's not knocking anyone's choices on where they go and how they pay for colleges - it's just the facts.</p>
<p>Briansteffy, I understand your point about parents paying big bucks in some instances, where the kids are goofing off at college, not making the most of it and doing some not so good things. I think in those instances, it behooves a parent to think twice about paying for that. By the luck of the draw, I think, I happen to have kids who are very motivated and achievement oriented and driven. They go beyond that which is required. They are not goofing off at college (though they are enjoying the experience) and are making the most of it and then some. Sometimes my own parent will ask me why my kids keep taking on more and more things that are not required but she doesn't get that that's what they are like and they WANT to do these things, even if they do not have to. I'm sure that is why they were accepted in teh first place or given scholarships or whatever, because they are the type to take on leadership things and extracurriculars at college and senior thesis and so on and so forth. They are making the most of their opportunities and that is why it was worth it to me to allow them to pick any college they wanted because frankly, they worked their butts off to get there and we saw our job as finding a way to make it happen for them after they did THEIR job.</p>
<p>nunofyourbeesknees...I agree that this discussion should be had with your kids (no matter which route you take with financing an education) before they apply. I am seeing too many sad stories of kids getting into colleges they are dying to attend and then being told that they can't afford it. It would have been better to either not have applied in the first place if it was out of their financial range OR the discussion could be: "you may apply but only attend if the FA comes in at such and such".</p>
<p>By the same token, some are mistaken that more expensive colleges will cost them more but that is not always the case. Sometimes a kid can get a better package at their more expensive schools, thus making that school cost less in the end. For instance, one of my kids attends one of the most expensive colleges out there, NYU. I believe the price tag is now approximately $50,000. BUT she was offered a scholarship of $20,000/year, so the price tag is really $30,000/year, coming in cheaper than other schools she applied to, which for the sake of this discussion, were "less prestigious" or less of a "dream". Oh, and she is in an arts major.</p>
<p>Being free to pursue your dreams in your 20's debt-free is a great gift to give your child. Save those big tuition $ - you'll need them to help you s/d out with health insurance costs one they age off your policy! (whole other topic!)</p>
<p>If you have to incur debt, I think it makes more sense to go into debt for grad, law, medical school. Thats where the payoff (financially anyway) would be. A good friend of mine went to SUNY Buffalo for undergrad and Cornell Law. Much better off than doing it the other way around! Realistically, certain business, laws schools opens doors that others won't, unfortunately.</p>
<p>soozievt, I agree it's sad, but I guess it's a way for kids to learn that "you can have anything you want, but you can't have everything you want, at least not all at the same time." It's nice to reward your kids for working their butts off, but my own personal experiences of not being able to attend the school I wanted or study the major I wanted taught me that it is possible to find the positive in ANY situation and make it work somehow. I make good money now (I obeyed my parents and got the "practical" degrees instead of a music degree) and find that it's much easier to play music without having to worry about whether I'm able to pay my bills. Plus, now I'm able to plan to buy that music education that I've always wanted, but that my parents couldn't afford. And now I'm old enough to really, really appreciate it that much more. The best part is that I still have a practical education that gives me a comfortable day job and health insurance.</p>
<p>Sure, I was mad as hell at my parents when I was younger. But again, I found a way to make it all work out anyway. My love for music, literature and the arts has survived some hostile environments (read: engineering school and tech jobs) and has gotten that much stronger because of it. Life didn't end just because I didn't have my "dream" college experience.</p>