May 11, 2013
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Student Loans
I see people getting an education and spending a ton of money that they are borrowing. Here is the link: Link
Some people are graduating with $100,000 or more in debt only to find themselves unemployed.Is it wise to borrow money in order to get a college education?
Comments (59)
Not always. Depends on the school and the major.
Students are well informed about the terms of their loans, both before they borrow and as they leave school. The student in the video made several errors — she borrowed for wants rather than for needs, causing her to borrow way more than she needed in order to pay for school. She didn’t keep track of her debt as she went through school. She didn’t approach her debt with any awareness of the terms and conditions, and she probably used costly forbearances and forgiveness provisions. Unfortunately, by the time students enter college they often have had very little education or training about how money works, and how to control debt — at that point the goal is to borrow so they can pay tuition and fees and have a good time. Better high school training would help a lot in the student loan crisis.
i googled it
Salaries for HS Grad
32,800
Bachelors
49,800
Different 17K per year – over 5 years to make up the difference.
But then the HS grade has made 120K over the 4 years the other guy was in school so thats like another 6 years.. so the break even is probably 12+ years. Now any HS grade worth a damn would get raises over the 12 years so I’d say about 15 years..
If the HS grad was to invest the 100K in a rental property s/he would have another 10-20K in equity
As it has been already mentioned, I think it very much depends. The value of a degree can vary greatly, depending on the school and the major. 100K on a humanities major at a random private school is probably a bad investment. But 100K for the same major at Harvard might be a different story. But most people aren’t going to a top UG that will put them in a very strong position for employment regardless of what they major in. These people should focus on majors that will make them employable and try to limit debt as much as possible.
As a victim of the student loan debt crisis, the answer to your question is a resounding NO. College doesn’t take care of people like it did back in the day. Nothing is guaranteed, but at least with college education, you had a puncher’s chance at making a decent life. A diploma is still a nice item to have, but if you still find yourself unemployed, the folks you took the loan from won’t give two tugs and a jerk about your situation. They don’t care about you as an individual. The only thing they care about is getting that money back with that sweet interest.
The system is broken. We shouldn’t have to pay all that money and be in perpetual slavery just for a piece of paper.
We need an overhaul.
@anth0nyc - You need to take into account interest on those loans, which can have a huge effect. Unemployment rates are helpful to know as well, though the data might be misleading because other negative factors that affect employability might be more present in the group that doesn’t graduate college. Finally, being unemployed without a college degree and with no student loans can be a better position to be in compared to being unemployed with a college degree and 100K in student loans. Student loans are notoriously difficult to discharge in bankruptcy. There’s a very good chance that debt is going to follow you for the rest of your life (unlike other investments in the real world, where if it turns out to be an awful investment, you still have the safety net of bankruptcy).
A hilariously depressing quote from a lawyer regarding his law school loans:
“Borrowed: $168,800
Have paid: $63,182
Still owe: $158,360.
That’s the tyranny of 8.5%.”
Source:
http://teen.xoxohth.com/thread.php?thread_id=1890604&mc=88&forum_id=2&PHPSESSID=b1dcee42c221551a0a84516c6aee209a#20128826
Probably not for most students.
don’t make me drag you…
Depends on what you want out of life.
Student loans are just another reason I don’t like college.
Maybe more students need to live frugally, shop and party less, and work to pay each semester off in full as they go through college rather than take out loans.
@Jack_Hawksmoor -
“As a victim of the student loan debt crisis, the answer to your question is a resounding NO. …
The system is broken. We shouldn’t have to pay all that money and be in perpetual slavery just for a piece of paper. “
What was your college major?
@Celestial_Teapot - Media Arts and Animation.
@Jack_Hawksmoor - You trying to join Pixar?
Student loans are too damn high!
Depends. Paid about 70 grand for mine. Business degree biiig mistake. My brother paid in the 6 figures for his (100grand plus) But he double majored in physics and aeronautical/astronautical engineering and it was his life long dream to go to a particular college. Now he talks to the CEO and makes a fuck of a lot. So I think it depends on your degree. Some kind of engineering, computer, or medical degree? Go for it. Some general shit business/lib arts degree? Save as much money as possible!
only if they honestly think they can pay it back.
@Celestial_Teapot - …and the GPA, research, volunteering, etc.
I think the biggest problem with borrowing money for school is that our generation expects too much to be handed to them.
Sucks!!!
when I took a loan from my aunt, I honestly thought I could return it back easily working in Australia after graduating , I’ve paid her slowly whenever I had surplus in aus, now I’m back, its just crazy with the rate exchange and difference with wages here n there and worst part is I’ve no idea how much I’ve paid her and how much remaining, she now chases after me for money every end of the month and she’s prob also secretly charging me interest! I’ve asked her for the total amount but she’s not saying :’(
I sit in class next to people with ipads and iphones and the trendiest clothes, then try not to giggle when they name off whatever a foofy degree at introduction time. (There are going to be A LOT of record producers and theater majors in 4-6 years…) If they continue to take out money for crap and get a major in basket weaving? Then, no…not worth it. I borrow to cover living expenses and am going into the health sciences field. Worth it.
The student loan system is such a mess. I agree that part of the issue reduces to individual responsibility; people shouldn’t take out loans they won’t be able to repay. The problem, of course, then your typical 18 year old out of high school is not very financially responsible, and may not have a good grasp on what the long term consequences of borrowing for college will be. In spite of this, the banks are quite happy to throw money at these kids – in many cases, much much more than they actually need for school – because they know that the loans are federally guaranteed, that the kids will never have the ability to discharge the loans even if they suffer severe financial hardship later and declare bankruptcy. As others have said here, the system needs a complete overhaul. We need to find a way to give people access to quality education without drowning them in debt.
Work hard, get a scholarship, study hard, graduate without debt. I did it. I’m out.
Oh yeah, my hubs did it too, with military tuition assistance. Didn’t even touch his GI Bill, which now goes to our kids.
College degree doesn’t equal debt. Choices do.
@Shadowrunner81 - I wish. Sadly, I went to the Art Institute of Philadelphia and the education there wasn’t that good. Compared to other schools and programs, companies like Pixar would laugh for a couple of days straight before telling me to GTFO. Besides, I had to learn this the hard way, but I’m more of an illustrator. Things like storyboards, concept art, and character design are a better fit for me. The same goes for comic books/graphic novels.
@mellywelly15 - Taking out a Parent Plus loan was the worse decision I ever made. It’s one thing to have my own debt, but when I included family members and couldn’t pay them back, things got a little ugly…
I wish there was a reset button for life after high school.
Only if you are getting a good degree…..I obviously chose the wrong degree.
Its no secret what degrees are more employable and for what salary. Its a cost benefit analysis. I know someone with over 100k and studied an undergrad in psyche only. What do you expect?
It’s not wise, but what else can you do if you do not come from a rich family?
Funny thing is I just wrote a check to pay back my monthly payment for my students loans just now.
An average auto mechanic working for a car dealer makes $43,250 a year. That is far from top pay in that field
Spend 5 years years of your life and at least a $100,000 and you will on average make $49,000 a year. SO you better know what feild you are studying to get into because no economically it does not make sense unless you sure as hell know what job you are going to get and what it pays. The truth is that being an auto mechanic requires more talent than most college student have, so this is not a fair comparison. Wait truck drivers make $66,000 a year ……
It is if you are willing to work when you get out of college. Kids today think they’re entitled to be an executive vice president as soon as they’re handed their diploma and they won’t settle for anything less. Thus they’re all unemployed. No legitimate company is going to give you a six figure salary and an executive level position when you’ve got no real world experience. I took a customer service position for shit money after graduation and went from there. It took me over ten years to get to where the current generation demands to be the day after graduation. Instead of whining and bitching that you’re an unemployed college graduate, how ’bout just taking one of those jobs you feel are beneath you? Maybe you’ll be able to use it as a springboard something better in a few years. But then again, instant gratification is your birth right. Eff you all.
No. Never, ever borrow more than you can hope to pay back. I was fortunate enough to apply for all scholarships and grants I could and get some.In the end, I still had to take a loan, but it was only 5 grand.
just as Carol answered I am impressed that anyone able to make $5833 in 4 weeks on the internet. have you read this web link http://www.rev24.com
@SKANLYN -
Honest question, how much student debt did you have after graduation? And how much was tuition when you went to school?
I think there’s a disconnect between the generation graduating now and the generations that graduated 20, 30, 40 years ago. The reality is that college tuition has skyrocketed, at a much higher rate than inflation. While your advice seems good-natured, it seems to be missing part of the reality of the current situation: A graduating student with 100K in debt can’t just take a low paying job and hope to work their way up–they need a job that will do an adequate job of paying down their debt before the interest on the debt balloons. Thus, while there may be some entitlement out of this current graduating generation, a lot of that is driven by their circumstances–they NEED the higher paying job much more than past generations.
I’m trying my absolute best not to take any type of loans and only take grants. However, I don’t know how long that’ll work out. But hopefully at least the first 2 years.
I wouldn’t be able to afford a college education without loans. Therefore yes, I think it was a wise decision for me.
I wouldn’t know, education is free in all Latin American countries.
@PrincessPowers - ”College degree doesn’t equal debt. Choices do.” — I completely agree!!
I had that same mindset for a while, but sadly I gave in after my first year. I realized that at the moment, it was best option to not only further my education but to better my life. Ive decided to only take out one year and at a community college level, it is not as big as the rest.
So I say, you have to ask yourself if the circumstances calls for it. If not, then no.
-E
Is there an alternative? I had a high GPA and was a great student and couldn’t get scholarships than offered more than 1000. Jobs don’t pay that much either, and if they did, you’re spending way too much time working and too little time actually studying and attending college.
I don”t know and my son is in college retraining-community college-he is an adult and the business he has worked at since high school shut down. He has been there for 4 quarters and has a 4 point gpa and is going on a pel grant. He just for awarded a scholarship for academic excellence that will cover expenses his pel grant doesn”t. so he will be graduating with no expense from having to borrow money.
He buses every where and lives very cheaply. A person doe snot have to spend thousands of dollars in loans to get an education to get a job bu tI guess people want the big degrees so they can work at 7-11 or Walmart.
when I went to nursing school back in 1970 they paid me a stapling to go to school and also I was welcome to work shifts at the hospital to earn money.
there was a shortage of nurses then
It’s not worth it. College is one of the biggest money making scams in the country. It’s quite disgusting.
Student loans + Multiple Sclerosis is just bondage. I skip docs appointments college wasnt worth it
@anth0nyc - I have to add my 2 cents because I hate seeing expected salaries listed. When students see these listed they actually expect to make that much. It just is not true, at least not in Michigan. Perhaps really big cities can pay these amounts but I think starting wages are much, much lower. To post these just raises people’s idea that they will be paid that much and they just won’t most of the time.
But to answer the actual question – no I don’t think taking on a huge debt is worth it. My daughter owes less than $20,000 after 4 years (way below the norm) but the payments are killing her. I have taken to helping her out each month but it is hurting my budget too. Sallie Mae is awful to work with. My other daughter sees the struggles her sister has and is attending a community college instead.
@TheBeastWithThe4DirtyPaws - agreed!
I don’t know. I have one of those useless degrees. I have one in Humanities and Fine Arts. If I had to borrow money for it, I probably wouldn’t have gotten it. I’m getting it actually, which was a surprise to me. I had enough hours for it.
I earned the money to pay for it. My grandma helped me a little at first. Most of it was paid for by my money though.
I went to school for fun. I didn’t really care about it. Most of my family doesn’t even use the majors they earned. My major certifies me to work in a museum or something. I think I’m going to be a career janitor, however. I like to write on the side. I’m not a serious person.
I don’t believe you have to do A to get to B.
Everyone has always been like, “You’re going to be homeless.” I think they use me to justify their pointless lives.
Guess what? I’m not homeless, and I never will be. They are more likely to be homeless than I am because I don’t have an anchor. I don’t have a family or a skill set that dooms me to stay in one place. I can pick up and move like a drop of water. I’ll also work jobs they won’t.
@SKANLYN - This is an issue, particularly for the graduates of professional schools. I recently hired a law student from a top 10 school who worked for 6 months and then quit after he was frustrated with not being promoted at his 6 month review. He also complained about being underpaid. For reference, the average salary of an associate in my state is 60,000 dollars. We were paying him 70,000 dollars a year with a great benefit package and offering him a fast track to teach at a very prestigious school. But no, he felt entitled to everything immediately.
To be fair, a lot of it is the fault of colleges and universities that actively spread misinformation to their students and set unreasonable expectations when they graduate. When I graduated from school, it was understood that you had to work for a decade or two before you had a chance at the becoming a big shot.
@chaospet - It goes beyond that. Many colleges misrepresent employment statistics to students in order to get them to take out those outrageous loans. Further, until 3-5 years ago, there was no reliable alternative employment information for students to assess when deciding whether to attend that college because colleges were thought to be the only reliable source for that information. If an admissions officer for a prestigious school sets an 18 year old down and tells them “Our students make 90,000 dollars a year on average when they graduate”, that 150,000 dollar loan doesn’t seem too burdensome. This is apparently a particularly bad problem with law schools, which are self-reporting 95-100% employment rates with average salaries of 100,000 plus dollars to prospective students. However, in reality, the legal field has been contracting for a decade with the average salaries of new associates plummeting and with many large firms enacting hiring freezes that last months at a time.
Anyways, it’s easy for bitter people who never got accepted to college to sit back and criticize kids who were only doing what their parents did, where doing what society encourages them to do, what was completely reasonable based on the available information, and what was not an issue a decade ago (before the cost of higher education exploded). But, the law typically protects people who are duped by misinformation when making commercial/financial decisions at a bargaining power/informational disadvantage. And that’s what bothers me regarding the student loan crisis. For example, if you are a mortgagor and the lender misrepresents material facts about your mortgage (like your interest rate or monthly payment), there are a myriad of state and federal laws the mortgagor can turn to in order to for relief and perhaps even revoke the contract. Similarly, under the Uniform Commercial Code, fraud that induces buyers to purchase a good (e.g., a car, television, bike, etc.) can be grounds for revoking the contract. Yet, for no discernible reason, we allow colleges and universities to lie to children about material facts when entering into contracts (student loans) worth tens of thousands of dollars. That’s insane.
You have to look at it like an investment. Do your research and make a cost/benefit analysis. What will the degree cost, including books, housing, clothing, tuition and fees. What will the degree get you; how much does it pay? Will the pay be enough for living expenses, career expenses and debt payments? If not, you will need to look at a different degree. You may have a real passion for your major, but the career it leads to may not be lucrative enough to pay for a degree. Passion doesn’t pay the bills.
@UTRow1 - Excellent points, and well said
I wouldn’t say it’s unwise to get a student loan. You have to do what you have to do. Not everyone can afford paying for their tuition. On the other hand, not everyone is lucky enough to receive a scholarship, either. I think it’s definitely worth it to get your education and a degree, if that’s what you want to do in life.
Depends on the major. In some degree fields, you have to go to “the right school” even though essentially you’d learn the same stuff in any other university. (This should be a major point for reform!). That means that you either take on a lot of debt to go to the “right school” but have better job prospects upon graduation, or take on somewhat less debt but find yourself unemployed.
The real issue that’s overlooked is that for a mere 1 % of GDP, we could make higher education for everyone *free* and eliminate student debtdom forever.
-netnguy
@PrincessPowers -
Work hard, get a scholarship, study hard, graduate without debt. I did it. I’m out
Don’t suggest solutions that don’t work for everyone. Not everyone can get a scholarship, b/c there’s just not enough scholarship money around.
The better solution is simply to make higher education *free*.
-netnguy
@netnguy - Sorry, I don’t believe in handing people something that they haven’t earned in one way or another. Either by working hard or some other sacrifice or contractual agreement (military).
@Crystalinne - @Crystalinne -
Maybe more students need to live frugally, shop and party less, and work to pay each semester off in full
Hmm, do you really think that students “party” and blow money to the tune of $100,000 or more? The students I know don’t.
A better question would be this: why does an “elite” university education cost $100k+ to begin with, when you can put students through public K-12 for a mere $3-4k or so? Sure, the profs are paid more, but not 20 times more. The buildings aren’t that much more expensive to maintain. As for housing, there’s no need (and indeed good reasons why not) for dorms. The books are pricier, but that price is inflated too.
Of course, the principle of a public high school isn’t raking in a CEO-like multi-million dollar salary, plus his immediate minions, for jobs that used to considered “public service” types jobs. It used to be that being the head of a major university paid comfortably but not extravagantly, and was filled by those who had already made names for themselves in other fields of endeavors and took being the head of a university in retirement as a way to give back to the community instead of a making even more bucks.
-netnguy
@PrincessPowers - S
orry, I don’t believe in handing people something that they haven’t earned in one way or another.
This extends to the sick? Children? Posterity? People in nursing homes?
I hate to break it to you, but interdependency is a fact of life. You will get things you’ve not “earned” and that’s normal. You also give things to others that they have not “earned”. Human societies operate that way.
In the case of free education, even if you’re not getting education nor have children get it you still benefit.
-netnguy
It’s really not that hard. Here’s what it boils down to: Impatience.
People want what they want RIGHT NOW. They don’t want to wait until they can afford it, they want it now, no matter the cost, no matter the outcome.
Here’s another solution, wait. If you simply cannot afford some oulandishly expensive University, that for some reason is the only school that will render your education proper, do something else to make it happen. Get a job and save up. Can’t get a high enough paying job? Go to a technical college for 2 years, it’s really not expensive, and come out with an actual trade. Then save. Take 5 years of your time to make it happen rather than potentially wrecking your financial future for the next 20+ years, all in the name of instant gratification.
But we want what we want now, don’t we.
Got a masters degree in development reproductive biology…sounds fancy but research pay sucks. My decision to be passionate about a poor paying job makes me depressed. I also have a car….used of course..but San Fran bay area rapes my wallet for rent and gas…. gaah… two jobs and full tine student…I think my diet and lack of sleep will kill me before I can pay off my debt.