Reasons For College Debt (SAT, skills, doctors, psychology)

[Motion]

This advice sounds similar to what someone else mentioned.




http://www.youtube.com/watch?v=WG2La7K6wwQ&NR=1

[John23]

Originally Posted by K-Luv

Yes, a lot of costs are rising. While I agree that college education is getting pricey, I still find it odd that people moan and groan about the cost of higher education at a time while college is still, for the most part, a voluntary obligation, and, that most still do not have a problem with buying a new or home.

Automobiles depreciate with value, beginning with the moment you drive it off the lot. The costs of fuel, maintenance, repairs, insurance, and other costs such as parking and tolls may be on peoples minds, but for reasons which make no sense, are never really thought of "throwing your money away". It is the price we pay for the luxury and privilege to drive.

Now, what is the difference between someone buying a $35K car and dropping maybe another $2K a year on fuel, etc., and someone taking out $40K in loans? Perhaps at the end of ownership, you can sell the car for one or two grand, but still, at the end of the day you paid $40K + to essentially have the privilege to drive. You gain nothing in the end.

And buying a home? People buy homes because they want to own something. They want a dwelling to which they can do what-ever with. Owning a home costs a lot of money. Property tax, monthly mortgage payment, repairs, utilities, insurance, etc. At least with renting if a pipe bursts-which they will eventually-the landlord pays for it, not you.

I could go on, but my point is that Americans have no qualms with throwing money away on a bunch of frivolous sh*t, yet student loan debt is the big OH MY GOD. I am not suggesting that owning a home is frivolous, but just that the actual costs of ownership are higher then the advertised sticker price.

Just a different perspective.

Anyways; when I first went to school, a required info session for all students who were taking out loans for the first time was held over the summer before Fall Semester. If you didn't attend, you didn't get the loan money (or so they said ). The session was about 1 1/2 hours long. Maybe 2 hours. They didn't go over career perspectives (salary), but they did go over the realities of taking out a student loan, and every 10 minutes or so the session was interrupted by the speaker reminding us that this was money we had to pay back; it was not free money, we had to pay it back; don't borrow any more than you need.

It was pretty informative and really made question if I actually needed the money.

I think college has become an *outrageous* scam in this country. It is *The* Scam going for generation x and y, no question in my mind.

A. The big difference between college and buying a car or home, is that other alternatives have been systematically eliminated in k-12. Kind of like walking onto the car lot. You're not encouraged to buy $8-12,000 cars. Even though they are safe, economical, have high dependabilty. In some ways they're better made than more expensive cars. You can't even take those cars for a test drive, or find out what they are like.

Instead, you're steered into buying an $18 k car. With bells and whistles you don't really need. Community college is laughed at, as below your potential. It's the 13th grade. Tech/vocational schools are sort of derided. Things like apprenticeships aren't really taught.

B. Job growth has not kept up with this explosion of student loans. What was job growth, net from 2000 to 2010? Anything? But look at this explosion of $$$$ loans.

C. The quality of education has been degraded. It's like buying a home that's almost hollow. Highschool grads can't even pass a basic military exam. Everything is so watered down and cheapened.

APNewsBreak: Nearly 1 in 4 fails military exam - Yahoo! News (http://news.yahoo.com/s/ap/20101222/ap_on_re_us/us_military_exam - broken link)

D. It's not really voluntary. There's so much social pressure to get into college. From teachers and administrators who rememeber a different era. To students. To media influences. It's very hard to dodge all of the influences.

E. Most kids are very inexperienced with money. What's the average 16 year old done financially? Babysat? Borrowed $1,500, $2,000 at most? Then they're expected to handle $40,000 or $60,000 or more in loans in a few years? In a very unpredictable economy? It's like handing the keys to a boat in rough water to an inexperienced sailor.

F. There's misinformation and half truths. There are lemon laws protecting car sales. There are consumer protections when you buy most things. You can't buy a home on a shaky foundation. But what do you hear as a highschool grad? All these half truths...."oh, there will be jobs". Oh, "you'll be successful". Oh, "just take this and you'll do well".

I think there's a difference between naive and impressionable 16 or 17 year olds, who believe everything they hear. And someone more mature and responsible (who's going to buy a house or car).

Plus there's so many flimsy degrees now...womens studies? Latino studies? Etc.

[Thomas_Thumb]

Originally Posted by John23

C. The quality of education has been degraded. It's like buying a home that's almost hollow. Highschool grads can't even pass a basic military exam. Everything is so watered down and cheapened.

We care more about graduation rates, than if students are properly learning in high schools or colleges.
We value the pieces of paper, more than the education.

[alphamale]

Every time the government gets involved, things go wrong.

[Motion]

One more thing from Clark Howard.


Video - Breaking News Videos from CNN.com - Saving for college the easy way

[phylogeny]

I agree that the cost of college seems to go up exponentially as students receive easier access to loans. It was done with good intentions, but the end result are underemployed students drowning in a mountain of debt.

I don't know if there's an easy way out of this. I think colleges see rapid raise in tuition as a cash cow, and will resist any call to changes. However, we can combat this perception of easy loan money by teaching students what paying back the loans truly means. Forcing all students to sit through a seminar about budgeting, loan repayment and the different types of loans are, including the pitfalls of compound interests, would go a long way to teaching students financial responsibility.

My parents helped me with college, and I received scholarships as well. I graduated with a small debt that I quickly paid off. However, I will never forgot how annoying it was to see some of that money stripped away every month for my tuition. I am now far more careful with my loans, because I know that it is an albatross that will hang on my neck for years to come. I figure, as long as I keep the debt in mind, it will enable me to keep student loans to the bare minimal.

[Bhaalspawn]

Originally Posted by phylogeny

I don't know if there's an easy way out of this. I think colleges see rapid raise in tuition as a cash cow, and will resist any call to changes. However, we can combat this perception of easy loan money by teaching students what paying back the loans truly means.

No question the colleges and their stakeholders will fight any type of reform that might reduce the number of people who go to college and/or the amount of money the colleges receive tooth-and-nail.

I doubt that educating students about student loan debt will do much good. They have all been brainwashed to believe that they'll obtain a good return on their investment and be able to pay back their loans and their parents (and everyone else in society) are urging them to go to college.

Instead, what we need is to restore market forces to education. End the federal student loan programs and allow all private student loans to be fully dischargeable in bankruptcy and watch what will happen. Banks wouldn't want to lend money to students who were poor prospects or who were going to major in fields like Women's Studies. Also, the creditors might implement clawback provisions in their loans that would make the schools pay back a percentage of the loan in the case of a debtor default.

Another idea would be for schools to receive the payment by collecting a certain percentage of their graduates' incomes over a number of years. This would essentially eliminate any conflict of interest between the schools and its students. If the schools train marketable people who will be successful then they'll profit. If they produce too many graduates with useless degrees then they'll lose money. This works for students too. If they end up unemployed or underemployed they wouldn't have to pay anything. On the otherhand if they strike it rich then they'll end up paying a lot of money but that might be a small price to pay for the credentials that enabled them to be successful.

Basically, market forces need to be restored to higher education in some sort of a way.

[richb]

If you do have to borrow, avoid federal student loans at all costs. They aren't the good deal people think they are.

If you end up bankrupt after school, they DO NOT GO AWAY in bankruptcy. Doesn't matter why or how you go bankrupt, they don't get discharged under any kind of bankruptcy. About the only way they get discharged is total physical disability or the borrower's death.

Unless you can borrow from a different source (can't get "student loans" from private banks anymore) I wouldn't go for a degree in the humanities unless you can get grants, loans from relatives or friends, or a personal loan if you can get one or pay cash. If you are broke now, a degree in the humanities will not help you with the step up on the ladder of personal financial world.

Biggest mistake of my college years. Can't afford them, and I didn't borrow that much. My degree will never "pay" for itself. Wish someone had told me this then.

Many, many college degrees are now only for those with the time and money to burn. Frankly many college departments should be charging far less for their programs because there just aren't any good paying jobs for the grads.

[killer2021]

Its a bubble for the colleges. Once a viable alternative comes along thats significantly cheaper while providing the same quality of service people will rush to use that service instead. Most of college is just an outright scam. For example:

Charging 150$ for a new textbook while there are cheaper alternatives.
Charging exorbitant fees for tuition.
Paying administrators 6 figures + amazing benefits
Paying teachers 6 figures + amazing benefits
Plus all the external costs bared by the student: such as not able to work at all or not able to work full time, cost of commute etc.

For most, the only reason people attend college is because they want a DEGREE that employers value. What if this new services provides the college education and a degree that employers value for a fraction of the price. Its game over for most colleges.

All I am saying is that there are better solutions out there and the colleges better watch out. The tuition bubble won't last forever. It'll stop when students stop applying for the school.

[K-Luv]

Originally Posted by killer2021

Its a bubble for the colleges. Once a viable alternative comes along thats significantly cheaper while providing the same quality of service people will rush to use that service instead. Most of college is just an outright scam. For example:

Originally Posted by killer2021

Charging 150$ for a new textbook while there are cheaper alternatives.

The college does not charge this price for the textbook, the bookstore does. Yes, there is a difference. Students are free to buy their books where ever they want, or, in some cases they can elect not to buy textbooks. You can only pay your tuition in one place. And, in a lot of cases the "college bookstore" is a privately owned independent operation that is not connected to the school, even if it is on campus.

Textbooks can be deducted on tax returns, although to my knowledge only if they are absolutely required for the course.

Originally Posted by killer2021

Charging exorbitant fees for tuition.

I will agree that tuition is pricey, but you need to separate the two: tuition is the cost of education, although tuition usually goes into the general fund. Fees cover subsidiary and supplemental items like lab usage, computer rooms, media centers, activity, etc.

One way to lower the cost of college would be to remove [most] fees and have a pay-as-you-go system. Look at your tuition bill, you are more than likely paying at least one fee for a service you do not or did not use.

Originally Posted by killer2021

Paying administrators 6 figures + amazing benefits

Like all jobs, this is going to vary by location and length of service. But, I find it interesting that in a country where people don't question why, say, athletes can make millions of dollars a year, they do question why people in education make a little bit more than they do. On one hand, who cares! Why do you care? They all went to college, too, you know. And don't say it is because they don't do anything, or it is because they raise tuition so they can pay themselves more.

Secondly, you make it sound like all administrators are paid 6 figures. That is just false. Some, sure, all, no. Amazing benefits? You make it sound it is a bad thing.

Originally Posted by killer2021

Paying teachers 6 figures + amazing benefits

Ugh. Like administrators, professors salaries vary widely. If you look at pay scales for average salary, you will see that those who are making six figures either work at the top universities, or they have twenty years experience. Or both. I believe that over 40% of all college profs have 20 years or more experience teaching. So, do they not deserve 6 figs?

Originally Posted by killer2021

Plus all the external costs bared by the student: such as not able to work at all or not able to work full time, cost of commute etc.

These have nothing to do with the school. Students can live within walking distance in most cases or ride public transportation; they can create schedules that would free up time for employment (only taking classes on Tue and Thur, for example only taking morning classes so they can work the afternoon/evening). Generally, any "barring" are just restrictions that the student places on him/her self.

Originally Posted by killer2021

For most, the only reason people attend college is because they want a DEGREE that employers value. What if this new services provides the college education and a degree that employers value for a fraction of the price. Its game over for most colleges.

All I am saying is that there are better solutions out there and the colleges better watch out. The tuition bubble won't last forever. It'll stop when students stop applying for the school.

I disagree that most people attend college to get a degree that employers want. Well, young people anyways. Far too many high school students see college as a competition; getting the highest SAT/ACT scores and getting into the most prestigious schools. Plus, most want the degree that is going to bring in the most money. If you look at employment ads, the majority of ads want a degree-in anything. And even for science type jobs the exact subject the degree was earned in can vary. There are a few jobs where a specific degree in a specific major is required, though.

Adults (uh, those that are well into their 20s and beyond) are generally the ones that are going for specific degrees that employers want. This is primarily owed to the fact that they have hit a ceiling and getting a higher degree or a degree in a different subject is the only way to move up. MBAs and other professional degrees are a good example of this.

What is this new service you speak of? Direct education? The only way to really reduce the costs of higher education, at least for the moment, is to offer a bare-bones college education. By that I mean only offer the classroom experience and do away with everything else. But, on one hand this is what for-profit colleges do anyways, and on the other, this will only really appeal to those students that are well into adulthood and could care less, let alone use, a college rec. center/student union; athletics; free movie nights; Greek Life; career service center; etc.

Eventually, something will be done about high tuition, but in reality what will more than likely happen is that tuition will stabilize-not rise, or at least not as fast. Universities as an institution are in no threat, and won't be in the future, either.