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Some of you need to go back and click the link that shows which schools have high default rates. Four-year accredited universities typically have sub-5% default rates. Most of them hover around the 2-3% rate compared to for-profit schools that have 15-20% default rates. Here's the link again so you can see for yourself...
The school in my state with the highest default rate is a community college with a graduation rate of just 10% followed by a beauty school, both with loan default rates of near 30%, but the loan amounts are small at $5k or so. The private school my eldest attends has default rate of 1% while the state university my daughter attends has a default rate of 3%, and the average loan amounts for both schools are around $15k. So while you may want to blame the Starbucks-swilling, avocado toast-eating coed, the one more likely to default is a single mom working & studying eighteen hours a day just trying to improve her lot in life.
Many kids want to go to college because of the knowledge they want to receive. My son was a history major in college. He had to do tons of reading and writing. Many dropped out because they couldn't handle the course. He went on to get a masters in International Relations. Some just really want to learn. The problem is many kids go to college because they don't know what else to do. We need trade schools because many aren't cut out for college. We need plumbers, electricians, carpenters, mechanics....etc. I know unions will teach them the trade but why don't we have schools for them.
K-12 are pushed towards college, not technical training.
The fault is with our system that changed from having a choice to pushing everyone towards college.
This is going to be an unpopular opinion, but my advice to my kids is to NOT get legally entangled (marriage, parenthood, property ownership, leases, etc.) with anyone who owes student loan debt. They don't owe. No use taking on an albatross who does, my apologies to Samuel Taylor Coleridge (The Rime of the Ancient Mariner).
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Not bad advice. I've read student loan horror stories where the (divorcing) spouse gets hit with the ex's student loans, whether in full or half. Either way, makes me cringe to think about.
Some of you need to go back and click the link that shows which schools have high default rates. Four-year accredited universities typically have sub-5% default rates. Most of them hover around the 2-3% rate compared to for-profit schools that have 15-20% default rates. Here's the link again so you can see for yourself...
The school in my state with the highest default rate is a community college with a graduation rate of just 10% followed by a beauty school, both with loan default rates of near 30%, but the loan amounts are small at $5k or so. The private school my eldest attends has default rate of 1% while the state university my daughter attends has a default rate of 3%, and the average loan amounts for both schools are around $15k. So while you may want to blame the Starbucks-swilling, avocado toast-eating coed, the one more likely to default is a single mom working & studying eighteen hours a day just trying to improve her lot in life.
I don't understand your post. Default rates are generally a personal issue, not a school issue. Of course, if the school itself provides inadequate education and leaving the person unable to be hired in their skilled trade, then maybe there's room for discussion about the school. But getting hired does not exist in a vacuum. There could be a gazillion reasons why a person doesn't get hired, and that can't be 100% the fault of the school, no matter how crappy it is. In the end, a person without a job has to take some responsibility for their inability to get a job. Especially in a booming economy.
I don't understand your post. Default rates are generally a personal issue, not a school issue. Of course, if the school itself provides inadequate education and leaving the person unable to be hired in their skilled trade, then maybe there's room for discussion about the school. But getting hired does not exist in a vacuum. There could be a gazillion reasons why a person doesn't get hired, and that can't be 100% the fault of the school, no matter how crappy it is. In the end, a person without a job has to take some responsibility for their inability to get a job. Especially in a booming economy.
My point is that the OP seems to think that it's State U coeds drinking martinis and eating avocado toast driving the high default rates, but that's not the case. Those kids may be annoying, but they don't default on student loans in large numbers. The high loan default rates come from for-profit and community colleges with low graduation rates and/or low employability options.
I guess I can see why they are accumulating so much debt. Lots of avacado toast and designer martini's to keep up with the university students from elite families.
Many millennials have extremely unrealistic expectations. I live in a college town and a majority drive luxury or newer model cars. They have upscale apartments with all the bells and whistles that the university students feel entitled to because they will rich after graduation and the "small" debt will be a rounding error.
Lovecrowds, Rio Salado Community College in Tempe has the third highest loan default rate in Arizona. It graduates just 4% of its students, which is dismal, to say the least. The school has ~8,000 borrowers, of which 30% default, and the average amount of the defaulted loan is $3500. On the other hand, ASU-Tempe with an enrollment of 70k students has a default rate of 7%, which could be better but certainly isn't terrible, and the average loan amount is $15k.
Last edited by randomparent; 01-16-2018 at 12:36 PM..
Last I looked, the actual default rate was in the neighborhood of 10% There are a larger number of borrowers NOT repaying their student loans, because they are in "income based" repayment programs with incomes below the level where monthly payments are required. (150% of poverty level, or about $8.50/hr of full time work.)
It almost impossible to get rid of student loans through bankruptcy, they changed the law years ago. I have seen articles where they have put liens on social security.
Yes, I know. Almost impossible is not the same as impossible though. To just say flatout that they cannot be discharged isn't being fully honest. Some manage to declare them in bankruptcy still. If more people knew they could attempt it then maybe the numbers would go up, but most people believe you simply aren't allowed to do it at all which isn't the case.
It's been a long time since I graduated college (grad school), but I get the sense that today's graduates aren't really willing to start in the trenches and work their way up? A masters degree still only got me $32,000 starting pay, which then went to $44,000 when I moved to a new job, and then to $58,000 at the next job. Each successive job prepared me for the next job on the ladder. I now make well into six figures, but I had to work to get here, which meant starting at the bottom. I also had $80,000 in student loans, which I paid off in 6 years mostly due to taking an assignment overseas that paid very well and was partly eligible for the Foreign Earned Income tax exclusion. It's all about planning every step - which should actually start BEFORE you select a major and graduate. Easier said than done in many cases, but I have to wonder if many are just flailing along hoping for a big break instead of aiming for something and going for it.
My advice to anyone from age 22-30 is to BE MOBILE. Don't settle down and get married. Go where the opportunity is. If your significant other wants to come along, fine. But don't let him/her hold you back. Just GO. Everything will work out on its own.
Your perception is incorrect. Millennials are very mobile - there's a reason so many have moved to a small subset of cities (i.e. jobs!!!!).
The problem is that the jobs they're getting don't often pay enough to live in these (often expensive) regions. And if they tough it out and make it up the ring, their pay is flat, stagnant, or below salaries of comparable positions of a few decades ago (especially relative to cost of living in those expensive regions).
It's not as simple as you describe. The "lazy" stereotype is really tired, and ignores a lot of the realities of how the world has changed.
I think your advice is good - but you're missing the point that many are doing exactly what you say they should be doing.
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