OK, because there is no "comment on this story" option on this article, I have to vent here. Sorry!!! I just read this article and it's the kind of thing that makes me CRAZY! https://www.yahoo.com/news/federal-college-loan-program-trap...First of all, let me say that I am a firm believer in education. I don't have kids, but if I had kids, I would encourage them to go to college, the best college they could get into that we could reasonably afford.Here is yet another story bemoaning poor borrowing decisions for college. Yes, I'm glad they are highlighting the issues surrounding PLUS loans, so hopefully it can be a lesson to other people. But it makes me crazy that they pick the worst-case scenarios. So for the New York family, both kids went to private colleges. NYU's tuition is about $53K a year, Manhattanville College is also private, with tuition of about $39K a year. But the family lives in NY, which has a lot of community colleges, and the tuition for SUNY (public) is $23K if you live on campus and $13K if you commute. Why don't families feel like they can say "Honey, I'm glad you got into NYU and I'm proud of you, but we can't afford it. I'll do X amount in loans and that's it, and hey, coincidentally, that's the exact amount it will cost if you live at home and commute to SUNY!" Or something similar. Anyway... just a rant. I just hate that these really bad scenarios get press, which highlights a real issue, and then these worst-case scenarios are often used to say "See, college just isn't worth it!"
"I just hate that these really bad scenarios get press, which highlights a real issue, and then these worst-case scenarios are often used to say "See, college just isn't worth it!" "*************************************************************************************Not too many high school graduates really know what they want to spend their lives accomplishing.Selection of a school, a major or even course work - at college or technical school - is not as critical a step if there is not a deep desire to follow a certain path. Howie52I know a lot of people who changed careers in mid stream and created a happier life for themselves.
I know a lot of people who changed careers in mid stream and created a happier life for themselves. Many people I know did exactly that. So in the end did it really help them or is it worth it? A fun one was the English Major who taught for a few years and has spent the next 20 years doing computer work.
First of all, let me say that I am a firm believer in education. I don't have kids, but if I had kids, I would encourage them to go to college, the best college they could get into that we could reasonably afford.Part of the problem here is that the parents clearly did not have a clear and unambiguous discussion with the children about what was within reach. Admittedly, no one wants to tell their children not to dream big. We were very clear with both kids that we can foot the bill for four years in-state public school tuition (about $30k/year right now in Texas) and no more. Out-of-state or private school meant you had to make up the gap somehow. DD did just that; she got herself a big ol' scholarship from the small private school she's attending, such that our contribution is about what it would be UT or A&M.Here is yet another story bemoaning poor borrowing decisions for college. Yes, I'm glad they are highlighting the issues surrounding PLUS loans, so hopefully it can be a lesson to other people. But it makes me crazy that they pick the worst-case scenarios.You have to admit, though, "student takes small loans and pays them off quickly" isn't a very compelling article.Also, from the article, there seems to be a shocking naiveté about the loans. "'Even though the cost of tuition seemed insane, I convinced myself that it would all make sense and pay off in the end,' Schweizer, 65, said. 'I had hoped that since my husband had a solid, union job, we would — we should — be able to afford this.'" Yeah, college tuition is absolutely insane. Hope is not a plan. Student loans have very unfavorable terms and are basically impossible to discharge beyond paying them off. Minimum payments may not even cover the interest. (So, so many horror stories about this on the Internet.)Regards,- HCF
Maybe I'm usual. My degree was in Computer Science and I worked in IT my entire career.
I know two young women who recently graduated from college. In state schools. One had some parental help and has $40K in loans the other $60K with a few scholarships and zero parental help. Nothing close to half a million. Still $600/month 10 years.I mentor these girls. Both just found jobs. One very low paid ( $12/hr she’s going to need a masters) the second $50K a year, a decent wage.The second one was talking to me two years ago planning to major in psychology and minor in computer science. I told her “swap those two” and explained a plan to get a job and do psychology classes on the side while doing better paying IT work and she did exactly that. Helps to get advice from someone more worldly wise. Met a lady whose husband was the first in his family to go to college and when they met he thought all degrees were the same she said NOOO! Steered him away from art into something marketable. Some kids just don’t know.
Maybe I'm usual. My degree was in Computer Science and I worked in IT my entire career. As did I, but it could have turned out much differently/worse. I had the amazing good fortune to have my high school offer an elective in Computer Programming in 1970. It was to be Fortran and Basic. We were supposed to have access to an RJE station for Fortran; we never did. We never even started Basic as the computer for that never materialized either. So the class was limited to desk checking for the entire school year.You might say I cheated, as I had my older brother's Fortran book from college. It wasn't really a text book, more of a language reference. It was much more complete than the book for the class. None of the other students had such a resource, and I'm not sure the teacher had as much. After a while the teacher would turn to me for confirmation of some point or other. That class set me on course for my career; AS and BS in CompSci and a 30 year career in IT.Mr Nagy, wherever you are, Thank You!As for paying for college... I lived in NY state in those days, and always did well on standardized tests, so I had a NY State Regents Scholarship. That covered 100% of tuition for four years at any of the state's community colleges or SUNY universities. Working summers, living at home, and commuting/car pooling to school, when I graduated (Dec 1976) my debt was zero, as was my bank balance.
MissEdithKeeler,I read that same article over the weekend and totally agree with you. I also see so much student loans from both, parents and children, in my line of work as a mortgage officer. Everyone wants to blame the government and wipe student loan debt off people's plates but what about having some responsibility for your actions? The biggest issue I see is the government is too lax on allowing forbearance and deferments. Then fast forward 5 years later and that original 90k balance is now 180k! I recently went to preapprove an attorney who is making 100k/year. Not a bad salary at all. Originally took out 167k in student loans. Has deferred payments and now owes 297k! This person's only other debt is a reasonable $330/mo auto loan. So makes me wonder what the heck has be doing with all his money???? Since he was looking to get preapproved, I had bank statements and scanned transactions: eating out basically every day and amazon purchases. I see this stuff about 1-2 times per month in my line of work. Never feel bad for them cause I paid off my student loan debt and eventually my wife's loans from obtaining her masters. We lived below our means for minimum 2 years to accomplish this. I feel the government should incorporate some "Ability to Repay" rules like they have enacted on mortgages and not freely give out these loans. Even disclose (like they do on credit card statements) how long and how much you will pay if you pay the minimum payments. It's crazy government allows these repayment plans as income-based repayment plans don't even cover the interest due. A great idea on paper but income based should only be allowed for 2-3 years with agreement of accelerated payments cause rarely does one pay extra. Crazy that the government allows these egregious forms of loan-sharking whereas they regulate mortgages, credit cards, and even pay day loans in some states.
My two cents:Preamble(1) A while back I read that the average graduate (in 2018, I believe) left school who left school with debt had an obligation of about $22K. That hardly seem crippling to me.(2) There are certainly going to be outliers where someone financed nearly all their expenses, weren't thrifty, and pursued advanced degrees. (3) There are students who "reach for what's within their grasp". They go to a juco and work part time to knock out a lot of electives. They go to an affordable school (with "affordable" factoring in whether they can live at home, not need a car, don't have to travel, etc.) They borrow and rent texts rather than shop the school bookstore. They live at home or share living quarters with other students to keep housing costs down. They eat the cafeteria (or, better yet, work there). There are more of these out there than many would believe.(4) There are also 'extraordinary circumstances' -- people going through school while also having to support a family (in part, if not whole). They finance everything simply because it's a necessity to do so.My ProposalNationalize all student debt and link the interest to the prime rate. Offer options to temporarily suspend payments for mitigating factors at no penalty. Credit payments for 'community service' type work as at present. Payments being one year after graduation (have to figure out what to do for dropouts) and no interest accumulation until then. Offer at least two options for payment:(A) Pay per a loan schedule;(B) Pay an income surtax over some TBD timeframe (let Congress argue details)This should cover almost all situations in (1), (3), and (4). I confess that I don't feel a lot of compassion for those in (2), but I do think we can help prevent more them by having required financial counseling (at least once per semester) where a student using debt must sit down and go over a financial plan to understand the rate at which debt is accumulating, the outlook to graduate, what their preferred profession will pay, etc. This needs to include hearing some "hard truths" (e.g., "Yes, you'll almost certainly have a your pick of jobs with a degree in social work, but you'll find they all are paid very poorly [show statistics}. So let's talk about the *reality* of where you're going.")
(1) A while back I read that the average graduate (in 2018, I believe) left school who left school with debt had an obligation of about $22K. That hardly seem crippling to me. Less than an average car (2) There are certainly going to be outliers where someone financed nearly all their expenses, weren't thrifty, and pursued advanced degrees. Medical and law degrees are expensive but also provide the income to pay the loans. It is often those that fail to graduate that have the hardest time paying off their loans regardless of the size of the loans.
I think it is a mindset thing, with a few things missing. A student thinks, "I'll get a student loan.... Everybody gets a student loan and then they pay it off for years." It is the "norm." This kind of thinking is acceptable to a 19 year old. When you are 19, you have no concept of borrowing $20,000 or $80,000... If either amount is approved. I think the parents need to discuss it with their kids, maybe more than they typically do. Actually, I think money in general needs to be discussed with the teenagers more that it usually is. But that's just me...Footsox
I've probably said this before on another board...In England my husband had to pay just about nothing for his Law Degree at Oxford University and I paid the equivalent of $200 a semester for room and board at Bristol University. I had a small award because of entry level scores, and paid nothing for the education. So I did not understand my husband, who said when baby #1 arrived, "We have to start a college fund""What's that?""In America you have to pay for University."He knew something important that I hadn't realized. So we started college funds the minute each kid was born. But we also told them, " We'll pay an undergrad degree. Post-grad is up to you...." Solid Ivy League degrees, but I believe one child may still be paying off some post grad debt.Thank goodness my husband knew about college fees when baby#1 arrived. We are now working on college funds for the grandsons, but we haven't mentioned that to the parents. We hope they too, are saving, and that the boys will understand they have to work summer jobs to help.
We are now working on college funds for the grandsons, but we haven't mentioned that to the parents.Why not?Btw, I have a new grandbaby, looked into 529's for him, selected what I think will be the best one, and then thought, "Waitaminute. How old will I be when he's in college? Old enough that I'll be lucky to still be handling my own finances; I certainly shouldn't be involved in anyone else's."So I sent DS and DDIL the info, and recommended they set it up. I also sent some money for them to put into it to start. After it's set up, I can continue contributing directly, and they can also contribute, although their budget's pretty tight at the moment, so I don't know if/when they will. They can also give the info to the other grandparents, in case they're interested in chipping in. My in-laws used to give my children savings bonds as birthday presents, and I think 529 contributions are the 21st-century equivalent.Later, when it's time for college aid eligibility, a 529 owned by a grandparent is slightly more advantageous than one owned by a parent, but:- With enough savings, he won't need college aid,- Most aid is in the form of loans or work-study, not grants, so not great anyway, and- Things could change between now and then.Overall, I think it's best to let the parents handle it.
"Waitaminute. How old will I be when he's in college? Old enough that I'll be lucky to still be handling my own finances; I certainly shouldn't be involved in anyone else's." An authorized user can be setup which I have done. They have full authority to manage the account which means that there isn't any paperwork for them to take over management of the account.
if I had kids, I would encourage them to go to college, the best college they could get into that we could reasonably afford. -- MEKI smile a bit as I remember a conversation with our daughter a number of years ago when she announced that she wanted to go to Harvard.At that point in time, we were in recovery mode from a near bankruptcy from a failed business. We had some savings and a smidge of home equity.....and an offsetting amount of debt, much on credit cards used to float the business at the end. Zero saved up for college at that point and here she wants Harvard."Can't do it, Sweetie. We just don't have the money because... etc"Well, she was angry. But got over it.In a bit, we were able to tell our two kids we could give them each $30k.... for their entire college. We didn't have it all. Yet. But I committed to it.Daughter went to a State college in Michigan, got a nursing degree and a good job in Charlotte NC. During college, she worked summers and got scholarships. Even traveled and studied in London, taking in weekend trips around Europe. Graduated with a little bit of debt that was quickly paid off. Married in a couple years (we paid for that too.... on a strict $30k budget that she adhered to). Now COO of her household. Family doing nicely and we're lucky enough to be close to them in Charlotte. Our two grandsons are enjoying a sleepover here tonight as a matter of fact. :DSon wanted to go to a crazy school we never heard of.... and didn't care that his grades were crummy. A "for profit" school. We travelled to examine the school and were impressed. He was motivated, did very well in school. Graduated with a good amount of debt and we tossed in more money besides. Worked his way up in his career and now makes mid-six figures.... a lot more than 'ol Dad ever made in his career.Bottom line: The whole education scene, including financing, is an adventure. Time to be creative. Time to be smart in career choices. And time to be smart in deciding where to get that education.OH!And how did we come up with the money for college and wedding when we didn't have any?Investing what cash we had.Marvel (as in the movies) put them through college.And Chipotle profits paid for the wedding.Investing ain't just for retirement....RobRule Breaker Home Fool & STMP/MTH Maintenance Coverage FoolHe is no fool who gives what he cannot keep to gain what he cannot lose.
I was fortunate enough to be accepted by every college to which I applied -- MIT, Stanford, CalTech, Rose-Hulman, and Iowa State. My family and I could afford Iowa State with in-state tuition and a small academic (National Merit) scholarship.STEM schools and majors, am I right?I worked a variety of part-time jobs after my freshman year to earn what I could toward expenses. That, my scholarship, ~$200/month from my parents saw me graduate debt-free.Would my life be different with a 'brand name' degree? Likely. I have no regrets. Kip
I just hate that these really bad scenarios get press, which highlights a real issue, and then these worst-case scenarios are often used to say "See, college just isn't worth it!"There are some high-paying jobs that you can't get without a college degree: Doctor, lawyer, engineer. Maybe a business degree would lead to a decent paying job, but it's not always necessary.Then there are some college majors that really don't have a good payoff: Art History, Modern Dance, Grievance Studies, Theater, etc. Someone may feel that he or she will be getting a "breadth of knowledge" or life skills, but there is not a reliable job payoff afterwards. Others want to get the "college experience" by going somewhere with fraternities/sororities, top-notch sports, etc. If you go to State U, this is already being subsidized by the state's taxpayers. If your dream college is very expensive, and you still want to attend, I don't want to be in the way of you achieving your dreams. If you want to go on expensive spring break trips or summer vacations during your college years, I'm not going to veto that. The money you spend on those trips may come from your loans, but even if they don't, that's money that could otherwise have reduced the amount you needed to borrow.But, please don't ask me, plus workers who didn't attend college, plus taxpayers who did the cost-vs-benefit analysis, to pay for your attending your dream college to study a subject without a job that society values at a monetary level that will let you pay off your loans. Don't ask us to pay for your vacations just because they occurred during your college years.I see more than a few high school graduates turn up their noses at the local college (State University extension) which they could attend for about $5000 (assuming they lived at home). Despite offering most of the degrees they would want, it's just not "real college" to them without the sports, campus life, etc. Which is fine, but requires borrowing a lot more money to go elsewhere. I also see a lot of college graduates who looked at "getting a degree in X" as the end goal. They didn't look into what a bachelor's degree would allow them entry to. For example, one young lady is selling Cutco knives because her bachelor's degree in psychology didn't lead to a psychology job...you need a Master's degree at least (apparently). She could have discovered that prior to college, though, because all that is on the internet. (Plus, selling whatever isn't automatically bad, but it's not what she wanted to be doing.)What I advised my kids to do was to:-Look at the total four-year cost of the college you want to attend. Include scholarships in the reduced price, but not all financial aid is "free money," i.e., subsidized loans mean you still owe the money-Look at the opportunities allowed by the degrees you might pursue. If "teacher" will make a more rewarding career and life than "businessperson," go for it, but realize you will need to work more years to reach whatever level of Financial Independence you might want. (And really, wouldn't you rather work 40 years at something you like vs. 35 at something you hate?)-Don't let part-time work keep you from graduating in four years (starting that "real job" a semester or year earlier is better than part-time pay that slightly reduces your loan amount)-Pay off your college loans as fast as possible. Live like a college student while you owe money. (Reliable but not flashy car, hold off on dream furniture and lifestyle)If American society ever decides to more heavily subsidize college degrees, we should be ready for:-A vastly different college experience as far as sports or activities (having been in other countries and worked with people from all over the world, sports are all club-level, and there's no college sports "industry")-A high degree of society telling you what you can major in
CuriousQ makes great points here. Just a few tweaks . I know four recent college grads.1. State U costs about $25K a year of which $10K is room and board.2. FAFSA for poor kids is $5K a year. So if your folks don’t live in college town you’re at $20K a year.3. Most of the poor kids I knew also worked odd jobs and ended up $40-$60K in debt after 4+ years (due to the jobs most went over by 1-2 semesters. Less than 40% finish college in 4 years)4. All picked up STEM degrees.5. Two are under employed ($11.50/hr) will need advanced degrees. One at $50K a year, one at $80K a year (masters in EE).The under employed ones will need to live at home until they can move forward. But they’re genetics and biology majors.
Even in the 1960s, college sports was a major factor for a significant part of the college selection. Who didn't want to got to a school with a top football team? Rah rah rah! Of course, many state colleges had competitive football, from Univ of TX and several campuses, Texas A&M, etc. Many 'elite' schools have none like Baylor..... Univ of IL, Alabama, OH state , MI.......For some, it's the fraternities and making 'contacts' valuable after college - like Harvard - Princeton, etc. (not much football at Harvard, though - top Hockey team - maybe other sports)...,I did go to private engineering college - and graduated with some loans..... which were paid off in 2 years. Yeah, after college I drove a 3 year old car. I had 2 room mates the first year in a 'garden Apt' in the suburbs, and 1 the next two years. Paid off the car loan in 18 months, too. No spring break trips - other than home - and same for summer. At parents house working a job to earn 'spending money' for college - like 8-10/week during the year. Lived in the dorms. Had a roommate 3 of 4 years. Big expenditures at the time were occasional trips to downtown Chicago.....visit some nightclubs packed with 20 year olds. Cost a few bucks - maybe once a month. Or a pizza out with friends - once every two weeks..... I guess the 'regulars' were there every weekend spending bucks from their jobs. It was nearly 20 years before I bought my first 1350 sq ft house. (1977) .....Now, most 'starter' houses are double the size. - - --I just can't image how people , a few, pile up $250,000 in debt - other than medical school....and ever expect to pay it off. t.
Texas state colleges are about $25,50 on campus and $12.5K if you live off campus with parent or other. For lower income students, tuition scholarships can go from paid tuition/room board to zero depending upon family income....from TX: "To increase access to higher education, Texas State University offers the Bobcat Promise. This program guarantees free tuition and mandatory fees for 15 credit hours per semester to new entering freshmen with a family adjusted gross income that does not exceed $50,000. Students may qualify for the program for up to eight continuous long semesters (fall and spring). This program will provide up to the cost of 15 credit hours of tuition and fees each fall and spring semester (an award of $11,860 for the 2021-2022 academic year).Under the Bobcat Promise, tuition and mandatory fees will be paid (up to a student’s demonstrated need) through a combination of federal, state and institutional funds. These funds include, but are not limited to, Pell Grant, Supplemental Educational Opportunity Grant (SEOG), TEXAS Grant, Texas Public Educational Grant (TPEG), Texas State Tuition Grant (TSTG), institutional scholarships, college work–study, etc.https://www.finaid.txstate.edu/undergraduate/freshman-aid-pr...t
This program guarantees free tuition and mandatory fees for 15 credit hours per semester to new entering freshmen with a family adjusted gross income that does not exceed $50,000.I believe this might be one of the problems with financial aid. Family income is used to calculate their aid package, but many students don't get help from their families. My parents gave me a hand-me-down car, other than that I was on my own.
" Family income is used to calculate their aid package, but many students don't get help from their families. My parents gave me a hand-me-down car, other than that I was on my own. "***************************************************************************************This may be too personal a question - so if you choose not to answer I will understand - butdid you explicitly ask for assistance?Howie52Perhaps the government should specify a maximum cost for a "4 year college education" from all institutions?After all price controls are known to work so well.
When my son was at Georgia Tech the Governor publicly chastised Tech for letting in more and more foreign and out of state students (who pay double) and fewer local students.The president of Tech responded, publicly, showing that Georgia had reduced state support of Tech every year for the past 8 years. “If you continue to reduce support we have to pay the bills somehow!”That shut the Governor up.
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