<p>Here is the link: Student</a> Debt Grows Dramatically - WSJ.com</p>
<p>An interesting article -- some of the debts loads are staggering -- and some of the comments are "interesting" too.</p>
<p>wow! Interesting article. I would have thought the lousy economy would cause more students to scale back their college plans which might pressure colleges to lower costs. But instead, students simply borrow more which continues the upward pressure on college costs. This cycle of increased borrowing which pushes up costs which creates the need for more borrowing… reminds me a lot of the housing bubble, doesn’t it? But homeowners who find themselves mired in mortgage debt with negative equity can simply walk away from their houses and turn the keys over to the bank. Students saddled with hundreds of thousands of dollars in debt with a lousy (or no) job will be stuck with their loans forever.</p>
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<p>Incredible stat, and it’s for 2006. Wonder what it will be for 2009, 2013, etc.</p>
<p>I was surprised that, in light of the stock market drop, there were not more kids at my kid’s HS going to CC.</p>
<p>Way back in 2007, about 20 percent of the kids graduating from my sons’ high school went to an in-state 4-year public college. This year it’s up to 33%. And I think a lot more are going to the local community college also. (Virtually everybody goes to college.)</p>
<p>In some ways, this year’s class is lucky. They are going in knowing that things aren’t good. The people in the article started college, or law school, in a decent economy and thought – in the blissful ignorance of youth, maybe? – that things would stay that way.</p>
<p>Actually, I take the “youth” part back – there were a lot of parents who were blissfully ignorant too. And their kids are playing the price.</p>
<p>It will be a disaster. My DD’s friend is a communications major, already 50K in debt she is only starting her sophomore year.</p>
<p>So the massive debt kind of negates the benefit of going to college? One is trying to get the loan monkey off his/her back before they can be solvent? :(</p>
<p>Whenever a major newspaper posts an article like this, it should post an accompanying chart showing median income, college, and house price trends since WWII, just to show how badly the American middle class is falling behind.</p>
<p>In the early 1970s, median household income was about $10k; the COA at an elite, private 4 year college was about $4K (UPenn); the national median new house price was about $25K (perfectly in line with conventional lending advice to spend no more than 2.5x income on a house).</p>
<p>By December 2008, median household income was about $50K, the COA at an elite, private 4 year college was about $50K ; the national median new single-family house price was about $200K.</p>
<p>So the spread has gone from about $1-$0.4-$2.5 to about $1-$1-$4 (income-college-house). Meanwhile, household income typically has gone from one full-time wage earner to two.</p>
<p>Sources:
[url=<a href=“http://www.census.gov/hhes/www/income/histinc/h05.html]Historical”>http://www.census.gov/hhes/www/income/histinc/h05.html]Historical</a> Income Tables - Households<a href=“income”>/url</a>
[url=<a href=“http://www.archives.upenn.edu/histy/features/tuition/1970.html]Educational”>http://www.archives.upenn.edu/histy/features/tuition/1970.html]Educational</a> Costs (1970-1979), University of Pennsylvania Archives<a href=“college”>/url</a>
[url=<a href=“http://www.investmenttools.com/median_and_average_sales_prices_of_houses_sold_in_the_us.htm]Real”>Real Estate]Real</a> Estate<a href=“house”>/url</a></p>
<p>The National Longitudinal Study of Youth has shown that adult earnings track youth IQ much more tightly than years of schooling. I think that “college graduate” is just a fairly weak proxy for smarts.
What interests me about these articles is that they invariably assume college graduation. What about the significant percentage who never graduate and yet have education debt that cannot be discharged through bankruptcy? Not a blip on anybody’s radar, as far as I can tell.</p>
<p>The worst part is most of these kids are being fooled. Many think if they go to school, put in the time, get a good gpa, they will get a good job with good pay. This is simply just not true. If a remember correctly only around 33% of students graduate college, though of those in 2008 only 5% actually have jobs in what they majored in. </p>
<p>Not everybody should go to college, people need to do trades also and parents should mention these opportunities to their children. The more students who go to college year after year, the more the wages will come down and down and the higher trade wages will go up.</p>
<p>In the NYC metropolitan area, tradesmen make very good wages, some make drastically more than most doctors with no college education. It is very common for a apprentice to a trade to make between $14-$20 a hour, a journeyman to make around $50 an hour and a master to make $80-$90 a hour. Given that all of these people are in unions, they all have pensions and great medical care. Special programs do exist for women to get into the trades as well.</p>
<p>I attribute the massive overpopulation of our colleges as well as the very high prices with federal student loans. Most students dont go to school to learn, they go to get a good job.</p>
<p>member person, studies show a growing gap in earnings between those with degrees and those without.</p>
<p>As to debt, I keep going through basic calculations with kids because they don’t understand how they’re implicitly mis-valuing a degree from one school versus another. </p>
<p>Let’s say kid can choose between school A and B and A is “ranked” better but the difference isn’t between Podunk College and Yale, meaning the ranking - which I’ve said over and over is bull - is relative difference. Let’s say A costs more net, considering whatever aid packages either have. Putting aside personal satisfaction issues and focusing only on numbers, the real issue is whether the degree from A will earn you as much per year after you pay your loan costs as the degree from B? The more extra you spend the less likely that is because studies show the main determinants for salary are the field you’re in and where you’re located - meaning you make more as an engineer than a librarian and more in New Jersey than in South Carolina. </p>
<p>I find that kids have next to no understanding of what the payback costs will be - and that you can’t get out of the obligations, even in bankruptcy. They don’t realize a $10k a year payment on debt means you have to live in a cheaper apartment, can’t afford vacations or a better car, maybe have to wait to get married or have kids. They also seem to believe that a degree from school ranked 32 is worth in actual dollars that much more than a degree from school ranked 46. And that reflects the utter ignorance of the statistical meaning of these rankings - and their general bs quality.</p>
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<p>These stories make me cringe, which is why I’m sure that any article on student debt includes them. Unless you are going to a top law school and can get a great job out of law school, $175,000 debt is a life killer. And a journalism major wit $60K in debt seems like someone who will be burdened for a while with her debt as she works at low paying jobs. Maybe she’ll go to law school…</p>
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<p>I highly disagree with that. Id love for you to show me data saying that college students today make more than masters in the trades. Do you realize how much $90 a hour is? Most Doctors dont even make that.</p>
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<p>Of course, some are adept at getting deferments and abatements–remember the man who hadn’t made any educational loan payments for over 20 years (and the State Bar wouldn’t grant him a license to practice law)?</p>
<p>It baffles me that these young people appear to have no idea what it means to pay back the debt and seem so surprised at the payment amount. I wonder whether they just don’t have any idea of how much they will actually make upon graduation–if they find a job.</p>
<p>The more I read, the happier I am that my first one was savvy enough to go for the no-loan-required undergraduate offer rather than the bigger name and higher ranked school and the option of some loans. Although the students that were quoted in the WSJ article were not attending pricey private schools.</p>
<p>young people don’t really have a lot of choice these days. Around here
there’s no good jobs, the future is living at home, working for $10 hour
no benes if you can even find that or going into the service or college.
Outside of commuting to a community college, the state school system
is going to leave you $30,000 in debt even if you graduate in 4 years.
For a lot of kids that seems like the best option, some hope for the future.</p>
<p>$30K debt is like taking out a car loan for a nice, but not extravagant, car. You’ll be able to fit that within the Stafford limits. $60K is a whole 'nuther kettle of fish. Once you get involved with private loans, things can get very crazy, very fast.</p>
<p>[Help</a> for Paying Off Your Student Loans - US News and World Report](<a href=“http://www.usnews.com/articles/education/2009/01/30/help-for-paying-off-your-student-loans.html]Help”>http://www.usnews.com/articles/education/2009/01/30/help-for-paying-off-your-student-loans.html)</p>
<p>The above article talks about new rules for payment of some student loans. On federal student loans young low income adults will only have to pay 15 % of their income for 25 years and the rest will be forgiven. Also if they work in the public sector they can have their loans forgiven after a time.</p>
<p>It is very interesting to read through the comments people have writen on this article. Many, many who say “hey, I have bills to pay! How am I supposed to pay my loans?” </p>
<p>We as a nation have failed to teach fiscal responsibility. </p>
<p>It is my opinion that we are all learning that you do not have to be responsible for your debts as the gov’t will come along with a program to save you. So who cares…take as much as you need. We can just add it to the deficit.</p>
<p>yes, I am being sarcastic.</p>
<p>Part of the problem in reinforcing bad habits is that we will not let markets clear. If you live through a true Kondreytieff Winter, you know that you don’t want to go through another one and you learn that debt is something to be hated and avoided. That’s not politically possible today so we print like mad to avoid markets clearing. And so we have the effects that you talk about. If the government is printing like mad, perhaps they’ll get wages higher eventually which should kill the debt. Maybe we should just do it explicitly with a devaluation.</p>
<p>member -</p>
<p>New information from the U.S. Census Bureau reinforces the value of a college education: workers 18 and over with a bachelors degree earn an average of $51,206 a year, while those with a high school diploma earn $27,915. Workers with an advanced degree make an average of $74,602, and those without a high school diploma average $18,734.</p>
<p>There are always exceptions, but ON AVERAGE, people with college degrees make more over the course of their lives than people who have only a high school diploma. That may not be true for the journeyman plumber versus the freelance journalist, but they are not norm. </p>
<p>And, even in this recession, colleges grads are less likely to be unemployed than those without a degree.</p>
<p>Equally important, you dont have to go into enormous debt to get the college degree. In my state, if you spend two years at a community college and then 2 years at our state flagship public, you pay about $30,000 for tuition, fees, and books for your undergrad education. You may not get the college experience you crave, but that doesnt show up on your diploma.</p>
<p>That doesnt mean college is for everyone. I think some kids who arent academically ready are steered to college, as are some that dont have the interest in being in a classroom for 4 years. And some kids just dont have the innate ability.</p>