@blossom I agree. That was actually my point. Cost is a determining factor for a lot of families, but you really can’t look at it in a vacuum. I feel sorry for kids who don’t have an adult helping them navigate the process bc finding a realistic affordable option that actually matches interests and goals is not the simple matter of attending the closest proximity school.
"A kid with a four year degree from a third tier university in sports management- he’s in debt, he’s working at an LA Fitness " - What if he likes it a lot and planning on marrying the future MD? I believe that each situation is very unique, and I actually presented a real life example of a very happy couple (as of now)
^^ or not as simple as the best college that admits them.
Just saying: I thought it was savvy of my kid’s friend to go study radiation tech at the cc. She came out employed, with maybe 8k debt. Nice kid, well suited to the work. Poor, single parent family. Doing better than her older sisters who did the 4 year thing. And it’s something she can do in almost any part of the country. Or part-time, if she has her own family. She wasn’t interested in the rounding of a more academic college experience, didn’t assume anything about a golden ticket- and knew herself well enough to go for pre-professional.
A friend’s dau graduated with honors from a local 3rd tier, works third shift at the grocery store. That’s her, her personality, her limited goals, not her academics. Luckily, not in debt. Another graduated in engineering from the same school, still moseying around, will probably end up in a tech job that doesn’t require a 4 year engineering degree. Or sales (nothing wrong with that, for the most industrious.) But the debt.
As for my trainer, who majored in that at a big state U, she’s 23 and closing on a (nice) house, no family help in that. I guess the lesson is, ya never know. There are kids in poli sci who won’t make it big time. The difference is the kids themselves, how they hunker down. My former trainer was finishing his degree in education, wanting to be a gym teacher. Yeah. But he lit up and is now a regional admin director for the school system.
I guess what I want to say is: college is right for some kids, the debt (I distinctly mean reasonable debt) is just something they will deal with, they have the goods to take their position in life further. Others are missing something and need to take a safer economic path.
@lookingforward Our oldest dd is a COTA. She graduated with zero debt and makes more than the median income in the US. She is 100% a people person and has had an affinity for working with the elderly since she was in elementary school. She loves her job working in a rehab facility which serves mostly geriatric patients.
The premise that any local commuting school can meet student goals, though, still leaves a huge segment of students ill-served. The Allied Health program our dd attended is actually 4 1/2 hrs from our home. There are currently only 2 OTA programs in our entire state. (Not that unusual. http://www.aota.org/education-careers/find-school/accreditentrylevel/otaprograms.aspx )
This all goes back to the original premise of this thread. Local and commuting offers limited options. But going into debt is not necessarily the alternative.
A little off topic, but my spouse (who has a lot of contact with state education officials and senior school district staff nationwide) tells me that a disproportionate number of top administrators in the K-12 system began their careers as gym teachers. Almost everyone in education administration began by teaching something, but the higher you get in the hierarchy, the more likely it is that the person was a gym teacher. She thinks their positive attitude, their discipline, and their involvement in team sports wind up making them look like potential leaders that don’t threaten their peers.
@ucbalumnus SDSU has that requirement for freshman year for any student graduating from our school district. Incidentally, we are at the same distance from SDSU as from our catchment area Cal State (different directions). I don’t know how easy it is to get an exemption.
Something I’ve learned over the past year is that in general, if you’re not willing to travel out of the northeast and the state schools are unsuitable for your needs (or wants) you’re more likely to spend more. There are a ton of terrific schools here, but not a lot of good small ones that have automatic merit for certain grades/scores.
Absolutely right. Our D1 was a full-pay at an elite private LAC. We had her take out the maximum in unsubsidized federal loans totaling about $29K over 4 years, with the intention that we (the parents) would pay off these relatively low-interest loans quickly and painlessly once she finished, simply as a way of spreading the cost of a very pricey private education over 5 or 6 years, instead of 4. As it turned out, we were able to pay off the full amount of the loans within months after she graduated. We didn’t “need” to borrow, but it was convenient and fiscally prudent for us to take advantage of those low interest rates to spread the cost over a slightly longer period.
I realize we are not typical borrowers—though I also imagine we’re far from alone as relatively high-income, high net worth borrowers who borrowed because we calculated it was part of a sound financing strategy. But even at somewhat lower income levels, borrowing for college can be relatively painless and financially sensible. There’s no shame in borrowing to pay for college, any more than there’s shame in borrowing to purchase a home. It’s only when you buy more home than you can afford, or overpay for what you get, that a mortgage loan is going to cause you problems. And it’s much the same with borrowing for college. Some people do bite off more than they can chew, and get into trouble. Most don’t; roughly 80% of all college loans are repaid, higher than that at 4-year institutions, and even higher at the nation’s top 4-year schools, though the repayment statistics are somewhat worse at 2-year institutions and much worse at private for-profit institutions.
I think the focus should be on the problem institutions, not on student loans in general, because for most borrowers, student loans aren’t a problem. I also think more parents should take the approach we did, and not assume that the burden of repayment needs to fall entirely on the student, who in most cases will have less income and less assets than the parents, at least at the beginning of the repayment period.
That compare’s pretty unfavorably to default rates on car and home loans (about 1%), and credit card debt (about 3%). That suggests that a lot of people are taking student loans that are too big, as compared to other kinds of loans.
SDSU’s policy is at http://www.sdsu.edu/housing/exemption.aspx .
SDSU’s local service area (whose students are exempt from the frosh on-campus housing requirement) is described at http://arweb.sdsu.edu/es/admissions/local.html . Looks like you live just barely on the CSUSM side of the local service area boundary.
Yes, undoubtedly, many people are taking out student loans that are too big. Most aren’t, and it appears that relatively few at the better 4-year colleges and universities are. Default rates are roughly twice as high at 2-year institutions as at 4-year institutions, and roughly 3 times as high at private for-profit schools as compared to either public 4-year schools or private non-profit 4-year schools. So a lot of this is just about predatory lending by unscrupulous for-profit institutions. And if you think about it, it’s just about a perfect rip-off opportunity—the schools get to originate the loans, they get paid by Uncle Sam whether or not the student ever graduates or learns anything of value, and there’s absolutely no consequence to them if the borrower defaults. Under the circumstances, it’s understandable that some not-for-profit institutions would be pretty lax, but they don’t have the same profit motive that for-profit schools do. For them, it’s been almost a license to print money.
If you drill down into the data, the pattern becomes even clearer. In Illinois, for example, the Dept. of Education’s College Scorecard shows 96% of Northwestern borrowers and 95% of University of Chicago borrowers are “paying down their debt.” Makes sense; these are elite private schools with high graduation rates whose graduates tend to do well in the job market, regardless of major. That figure is only slightly lower, 93%, at the public flagship. UIUC, but only 87% at the University of Illinois-Chicago, a secondary campus in the U of I system, and 83% at Northern Illinois, a second-tier “directional” state school. It’s a respectable 92% at the Illinois Institute of Technology, a pretty good private, engineering-heavy 4-year school; 90% at Knox, a pretty good private 4-year LAC; and 90% at Loyola, but only 83% at DePaul, the latter both private (Catholic) 4-year institutions. At the College of DuPage, a public 2-year college in affluent suburban Naperville, it’s only 61%; only 58% at Rock Valley College a public 2-year college in outstate Rockford; and only 54% at Highland Community College, a public 2-year institution in outstate Freeport. At the private, for-profit DeVry University-Illinois, it’s only 54%, and only 41% at both the University of Phoenix-Chicago Campus and American InterContinental University-Online, both private, for-profit 4-year “colleges.”
So, yes, a lot of students, especially at proprietary for-profit private colleges, are in over their heads financially, along with a substantial fraction of borrowers at 2-year colleges. The for-profits are the more problematic category, however. DeVry-Illinois enrolls over 20,000 undergrads, 82% of them borrow, and those who complete college carry an average debt load of $43,068. American InterContinental enrolls 10,000, 90% borrow, and its grads carry an average debt in excess of $35,000. In contrast, the public 2-year colleges are so cheap that relatively few students borrow, and those that do borrow much smaller amounts. For example, at Rock Valley CC (enrollment 7,400, average annual cost $4,920) only 9% borrow, carrying an average debt of just $6,900. It’s troublesome that so many default when the average monthly repayment would be a paltry $76, but at least the taxpayers aren’t on the hook for that much money.
By the way, I believe these default figures also include the 2010-2011 period when home mortgage default rates spiked to about 5.5% and credit card default rates rose to about 9%. Credit car defaults are the more comparable category because like student loans, that’s unsecured debt. So there’s still a disparity but perhaps not as great as your figures suggest.
^^ Also, if I understand it correctly, a 1% mortgage default rate means 1% of outstanding mortgages default in any given year. Measured that way, the default rate for college loans would be about 3 or 4% at 4-year public and private not-for-profit colleges and universities, double that at 2-year colleges, and triple at for-profit colleges and universities.
Like Pennsylvania, Illinois has very expensive in-state options. It’s hard to find one with a COA below $30k. Our kids get better deals at the directionals in Indiana and Missouri, which offer a tuition break to neighbors.
@bclintonk Thank you for being brave enough to say it’s okay not to go to a school that’s inexpensive! My daughters want to go to some small, good quality LACs in the northeast and while we’ll get a bit of need based aid we’ll also need to take out loans. However – I’m comfortable that they and we can handle them, and that it’s not an idiotic move. I’d feel much, much more worried and guilty if I made them attend a large school in, say, Mississippi or Alabama, or our local large state school where they really hate the thought of going. Cost isn’t the ONLY factor to consider.