College Debt

welsh

welsh

Junkmaster
The Economist did an article recently that the US would be dominant in education well into the next century.

That said, there is a problem if school prices keep going up. It might lead to generations so burdened with debt that they can't move forward.

Before we cancel the African Debt, we might have to cancel scholastic debts.

And if business can write off business expenses from their taxes, why can't we write off educational expenses?

From MSN.Money
College debts and broken dreams

The most indebted generation in modern history is quickly learning the real price of a college education today: Big debts that keep big dreams in check.

By BusinessWeek

Paige Nichols has a certain stoicism about her, which has helped her overcome disappointments big and small. She was born in Oklahoma City in 1975, a time of plenty for her family. Her father was prospering as a commodities trader, and he liked to spend his money. Paige would turn out to be the same way.

But by the time she entered college in 1993, their financial situation had become, she says, considerably more "volatile." Her parents had been able to pay for the education of her two sisters, 11 and 13 years older than she, but told Paige they couldn't do the same for her.

She finished up at the University of Tulsa in 1997 with a business degree and $20,000 in student loans, which makes her, by official reckoning anyway, a typical graduate. She is now paying off her loans, $300 a month; at that rate it will take her until she's about 50. "Twenty thousand isn't even that much, but it feels hefty," she says. "I'm not making any headway."

Like many who emerged from adolescence amid the promise of the late 1990s, Paige never imagined that money would be the issue upon which crucial decisions in her life would turn. But it is. She has been fascinated with forensic psychology ever since reading a book in college about a woman who studied serial killers. She was accepted into a master's degree program at the Chicago School of Professional Psychology in 2004. Before long she reconsidered.

"I dream big," she says, "then reality seeps in."

Paige would have had to borrow at least $32,000, which seemed like "way too much to think about," especially since afterward she might earn less than she would in the corporate world.

"I could not justify putting myself in that financial jeopardy," she says. "But it could have been my life's passion."

The most-indebted generation
Paige belongs to the first generation that came of age with the Internet, grew up marketed to at every turn and is too young to remember the Vietnam War, Watergate or the Beatles: There are all kinds of ways to describe today's 30-year-olds. But what may really come to distinguish them is that they could be the most indebted generation in modern history.

Two new economic realities are at work. Many had to borrow serious money to attend colleges that are ever more costly. And as soon as they entered school, they were offered credit cards. By 30, many have accumulated thousands of dollars of that very expensive debt, too. Imprudent choices sometimes have compounded their troubles. The consequences can be profound: Many of those 30-year-olds feeling unduly burdened by their financial obligations have had to make compromises on some of life's vital decisions.

Paige is a typical graduate, not only because of the amount of her student loan debt, but also because of the way in which her attitude toward it has shifted. In those early years, she felt unprepared for life on her own and had what she calls an immature attitude toward money. She paid as little as she could on her student loans, about $50 a month, while working in Tulsa as an accountant at Deloitte & Touche and later at WilTel Communications Group as a product manager.

She could have made higher payments, but that would have meant scrimping. Paige, though, had long ago learned the prevailing cultural language of brand names and status symbols. Living in reduced circumstances simply didn't correspond with what she thought she understood about being an adult.

"My lifestyle was a little out of whack," she says. "I expected to be able to live the way my parents raised me."

Now, after two turbulent years in Chicago, Paige is happily employed as a product manager for a Web site called ShopLocal LLC, earning $65,000 a year. She's hoping to buy a place of her own before she's 35 years old, maybe invest in real estate with a group of friends and start saving more money for retirement.

"We were supposed to be the slacker generation," she says, "but I think we grew out of it."

No guarantees
In myriad ways, the economics of being 30 have changed for the worse. A college degree is now the minimum required to find a place in the working world that affords some job satisfaction and material comfort. But it doesn't offer protection against turmoil in the labor market, as it once did. Nor does it guarantee such things as health insurance or a retirement plan. And real earnings for college graduates without an advanced degree have fallen four years in a row, for the first time since the 1970s.

The cost of higher education, however, has increased so dramatically in the past decade and a half -- up by 63% at public schools and 47% at private -- that more students have to borrow tens of thousands of dollars to attend, ensuring that many of them are paying off those loans well into their 40s. The median debt-to-income ratio now is about 8%. But fully one-quarter of graduates are paying more than 12% of their income, a level many financial experts regard as worryingly high. That burden will only grow: Interest rates on student loans are going up for the first time in five years.

Their financial obligations leave them particularly vulnerable to life's discontents. Nellie Mae, the student lender, found that 55% of all borrowers felt hampered by debt in some way in 2002: They changed career plans, gave up on graduate school, put off buying a home, getting married or having kids.
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more here

Ok, so this might be alleviate with the ending of "the death tax" you say. Perhaps, if your folks have money left over. But old folks are living longer and longer lives are expensive.

Then assume that you don't have rich family members who are expected to die soon.

Why the bust- part of this is the cost of college has gone up (thought professor salaries are still pretty crappy). THe other culprit might be that salaries have not kept up with cost of living increases.

Either case, be careful before you borrow too much.
 
The Atlantic published an article in the November issue raising questions of meritocracy. Not only is the debt itself a major downer on future economic generations, but the number of people attending college will drop; and those who do attend will come from a narrow slice of society.

"The advantage to well-off students is particularly pronounced at private colleges and universities. Over the course of the 1990s, for instance, the average private-school grant to students from the top income quartile grew from $1,920 to $3,510, whereas the average grant to students from the lowest income quartile grew from $2,890 to $3,460... families with incomes below $40,000 received less than seventy cents in grants for every dollar increase in private-college tuition. All other families, including the richest, received more than a dollar in aid for every dollar increase in tuition."


Ain't that a bitch? Let's cancel the Pell Grants.
 
:arrow: You might not agree on my views, but i agree that world dept should come second to dept at home eg: college depts.

:arrow: i mean what is more important getting educated or wipe off dept, Also why must any nation give up its wealth for other people :twisted: .

:arrow: Also removing dept from a nation doesn't guarantee the well being of it's people. :twisted:

:arrow: And most importantly what you borrow is what you must return so removing some dept is acceptable but not all :evil:
 
College debt? My back alone now entitles me to almost 40% VA disabilities... so VA will pay my tuition, buy my books for me, pay for a new computer, for college, pay me a stipend as long as i'm a student and allow me to have a job at the same time so i can make even more money....

at damn near any college i choose.

and they said "Heh, you damn near died in combat, congratualtions, you're a statistic!" I say being a statistic rocks!

edit: just found this out today from a friend who's getting out on a 30% VA Disability.... told me 20% is all you need for all that education crap..
 
The state I live in will introduce student fees for public universities next year. As of next winter semester every student will have to pay € 500 per semester -- that's a bit more than USD 500.

To allow people who don't have parents that can afford the fees to study, the government wants to provide loans for students at "good" conditions that have to be payed off once they enter the employment market.

The result will be that every student coming from a not-so-well-off family will have accumulated several thousand Euros worth of debts by the time he or she graduates.

I'm lucky as my parents can afford the fees even though I wouldn't consider them to be "upper" middle class, but others won't be as lucky and can't get a stipend either, and they'll probably be fucked over by it.

The cynical part of the story is that the money won't even go to the universities but to the state.
 
Wow thats is a heck sum of money :? Why does it cost so much per year?
 
Yeah, but we're talking about PUBLIC state universities, not private academies.
 
Gravy Train

Gravy Train



S.:
... Why does it cost so much per year?
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One would like to imagine that everyone in the educational industrial complex is paid a ""living wage"".
But "living wage" is too easy an answer to justify the labyrinth of traditionally preserved tariffs and fiefdoms.

State or Private ''the beast'' , the institution, must be fed.

One cost of doing business relates to entertainment. Sports entertainment. It is an industry onto itself in our media age.

Cost of doing business.
Perhaps some tuitions are still broken down into line items. Perhaps the student paper still has 'the balls' to roast the yearly publication of the school's budget. This fiscal event was leaked during 2nd Semester finals where I was institutionalized.


Sports entertainment.
Look for a line item, "'laundry fee"', even if there is no longer a " laundry service", and guess
how many sports scholarship recipients have 'a job' and 'a check'. But perhaps that scandal has already been hidden, back in the 1970's, and this tap on the general fund is covertly closeted, less arrogantly, else where.



When some OSU [not my alma mater, just a MAJOR employer in Columbus, in Ohio, in the whole Solar System, if one 'eats' the PR], when some OSU football/ basketball, 'playah' apartments / cars are burglarized, they claim thousands of dollars in lost stereos, CD's, computers, and thousands of dollars in CASH. - Student - athletes.
Got to keep one's 'best and the brightest' entertained or they'll wander off into the city. Kids in candyland,
that get arrested for a DWI (again) or illegal possession of hand guns, loaded and accessible from the driver's seat no less. (This doubly - loaded - while driving predates the 'right to carry' laws in Ohio.) Livin' large, M-F'er.


If the institution is afflicted by SPORTS DYNASTY SYNDROME there is this extra layer of entrenched entitlements that feed on the general fund. More milking of the tuition cow, and even alumni donations are not safe. If one wanted to
donate to the library or a specific school, that had to be clearly stated. If not one might fund the out of state fees for some line backer Prodigy from New Jersey.

Sports entertainment appears to be THE one, true, public relations quest for NAME RECOGNITION in our media age.
Of Object, Image, or Illusion, '' Who's on First''?

It makes sense that glad handed Business Colleges, Greek Gangstas, and real estate / state legislature mafioso have a divinely Olympian orgy to program their nostalgia for their tax deductible alumni contributions to come. Bread and Circuses forever.


In the '70's my ""school"" cared more that I owed no library fees, and filled out a FIVE LAYER carbon form that allowed me to make my 'pledge' , from there to eternity, in easy monthly payments ... cared more for squeezing a dry stone than to coordinate the graduating ritual so the participants could arrange to have their friends and family at the proper 'sports arena' in time, to swelter and fidget until the 'dignitaries' chose to be fashionably late.

This poor adhoc chorus had two cathedral style alumni songs to indoctrinate our
subconsciousness, and we heard it over and over and over, and over, while we waited for the gods of academia to materialize.

Oh, my alma mater cared more to shame our class as the 'lowest per capita alumni givers' in the multi hundred years (more or less depending on if the buildings were standing or had burned down, again.), in ALL the multi hundred years of that institution's history. But the 'career counsellor' , 'job counselor', graduate school fascillitator, was too busy that Friday afternoon to honor our scheduled interview.
T.S. It was too close to finals and most administrative functionaries were on 3 day weekends ....


So, ya, any thing worth while has it's costs, in time and money,
mental and past-present-future physical abuse,
but to reward mediocre institutions, perhaps one could choose the least common of denominators, where the voltmeters in the physics labs, if older than you, have polished wood cases and calibrated analogue mechanisms.

Or show up with your own Fluke 170 (or better) to measure micro amperages ....

Oh, another hidden expense ...

Word problem: if you borrow 100,000 dollars at 5% to fund a 4 year plus degree in high speed rail Engineering, and if a train leaves Cleveland at 0600 est, and a train leaves Cincinnati at 0630 est, how soon [in metric dog years] will your eternal alumni tithe trigger a deduction on the standard 1040 Federal Income Tax Form?


A: ""Need more information? Didn't you get last Friday's handout?""

B: ""No I took that visitor from Exitor College to the ''Lee Hall'' Hospitality House, tried to straddle the shift change for more free beers, then we ...""








4too
 
Thank God my college doesn't have sports teams other than Ultimate Frisbee, Basketball and Soccer (save intramurals)... and I doubt that anyone has been recruited for any of those sports in the 35 years we've been around.

As for the cost, it's something like $40,500 a year. The breakdown is thus:
Tuition, Fall: 16, 467
Student Activities: 165
Student Medical Insurance Fall: 390
Health Services Fee: 125
Housing (minus meal plan): 3,133
Fall Balance: 20,213

My school grant covers $10,100, and I was a 3.6 student w/ a 1380 - additionally, I transferred from a top-tier fine arts school. They refused to give me credit for the classes I took there, in order to insure they would get four years tuition from me. I'm from a divorced family, and my parents make about $60,000/annum combined.

Now, if you broke the housing fee into months, they're charging me roughly $800/mo for a 12x12 3rd floor walkup w/ 2 1/2bathrooms and a 1/2 kitchen shared between 8 people. And on top of that, I'm expect to provide my own food. To be on a meal plan would cost $1500 for the semester. If I spent $50/week on food and cooked it myself I would be in tip top health and spend a total of $900. Last year when I lived off-campus with my gf rent was $400/month for each of us, with about 10 times the living space.

Now, before anyone comes at me with the argument that food services require labor, I'll just say that I accept that. But what I can't accept is that the apartments I live in are built so poorly that the school has to overcharge me $400-500/mo in order to cover the heat bills. It's not like they do much as far as maintaining the buildings; the cleaning is left solely to us.

There is of course the argument that if I loathe these costs so much, I should drop out. The truth of the matter is that I believe that my education is worth the cost, provided that it gets me where I need to go in order to repay the loans. And at this point I'm already $44,000 in the hole, so why not add on some more?
 
Ashmo said:
Yeah, but we're talking about PUBLIC state universities, not private academies.
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Mmm even public schools (at least here in new york) would net you about 10-15000 dollars a year.

But aye, school's expensive. I've been trying hard to find ways to cut it down a bunch but it's still a hardy task.

Mmmm wasn't a bill proposed to cut student's financial aid as well? I remember reading about it in our school newspaper. Good to have No Child Left Behind.
 
SimpleMinded said:
Ashmo said:
Yeah, but we're talking about PUBLIC state universities, not private academies.
Click to expand...

Mmm even public schools (at least here in new york) would net you about 10-15000 dollars a year.

But aye, school's expensive. I've been trying hard to find ways to cut it down a bunch but it's still a hardy task.

Mmmm wasn't a bill proposed to cut student's financial aid as well? I remember reading about it in our school newspaper. Good to have No Child Left Behind.
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Yeah, but we're talking about a DEMOCRATIC country, not the US.
 
Elli- you know the GI Bill is still one of the best deals. That people who serve the US get huge amounts for college is great. I often think that's one of the things that really got the US going after World War 2- that all these vets from the war could come back and go to college. A lot of your older professors are GI Bill paid.

It's the least they could do.

That said, imagine that getting the undergrad education is only the first step to getting a decent job.

+ Grad school.

If you go professional school, like law, you are talking 20K in tuition, and we're not talking about housing, etc.

When I graduated law, back in '92, I had friends with 100K in debt (but that included law school). Now there are students with 100K coming out of 4 years of public university. It's fucking unreal.
 
welsh said:
Elli- you know the GI Bill is still one of the best deals. That people who serve the US get huge amounts for college is great. I often think that's one of the things that really got the US going after World War 2- that all these vets from the war could come back and go to college. A lot of your older professors are GI Bill paid.
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Yeah, the MGIB alone would have paid me 50,00 USD total over 4 years, w/o a stipend or any of the other perks, to get the VA to cover my college i have to sign a statement saying that they get my MGIB but what they would end up paying out to me for my education over that 4 year time span would far exceed what the MGIB would cover... just another way that injured vet's are being helped out when they leave active federal service.
 
Elissar said:
edit: just found this out today from a friend who's getting out on a 30% VA Disability.... told me 20% is all you need for all that education crap..
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Voc Rehab is perhaps one of the few good things about the VA, especially since they seem to enjoy skimping on health care and benefits as of recent. Something about VA funds being cut when a hell of a lot more veterans are being created. So it has been rumored that the disability qualifications for Voc Rehab may either go up, or that the program may be cut in several ways, so get your application in as soon as you are able to.
 
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