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Are Student Loans Burying Graduates?
DrHogie asks: "This is an interesting Op/Ed piece on student loans -- and how they bury the graduate in a load of insurmountable debt. As someone who is considering going back to college to finish his degree, are student loans (and the degree they get you) worth the debt load?" Update: 05/09 5:45 GMT by C :I apologize. The link in this story is bad, and I can't locate the original story on Yahoo. In the meantime, here's a replacement story in the same vein, and an article about student debt and how most college kids are having to work more to offset rising tuition costs. The original question is still valid, however. Is college getting to be too expensive for the average high school graduate?
Document Not Found -- fix the link. Or better yet, don't link to Yahoo!
Anyhow, yes, it's very expensive to get a good education these days; I was lucky in that I went to an in-state public school, but still ended up with $20k of loans. And for what? Bad job prospects.
I feel for anyone graduating into today's bleak economy, I really do. We private citizens can't just perpetually borrow money like our governments do...
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I had to pay for my first year of college with mainly student loans. I didn't qualify for enough student aid, and didn't recieve much scholarships. I realized I wouldn't be able to handle that debt x4 years, so I followed my brother's advice, a sailor, and joined the Air Force Reserves. I got a nice elistment bonus ($8000), plus the GI Bill (almost $700 a month, for 3 years), and a well paying weekend job ($200 a weekend). I was able to recieve more money in federal aid after enlisting and didn't have to take any more loans to pay for school. I highly suggest this for anyone thinking of paying for school by themselves, i.e. no rich uncles. Even the waiting a year part, since I got 2 stripes for having 30 college creditsand the GI Bill only pays for 3 years anyways.
Th
Your desire to accept student loans should be proportional to you ability to pay them off.
For example, if you are planning on getting a degree, and similar people with that degree are offered a median starting salary of US$45000, then you might be able to tolerate a significant debt load after you graduate because your debt payments will be a relatively small fraction of your monthly income.
If, however, your likely starting salary is US$20000, that same debt load might not be such a good plan because it is going to be a significant fraction of your monthly income.
As noted by other posters, an education can be a good investment, provided you will ever have the means to pay off your debt, and you make the most of you time in school so that you actually learn something.
Outside of a dog, a book is a man's best friend. Inside a dog, its too dark to read.
Of course, they do this because it benefits them when you bring your enhanced knowledge and skills to the job. I don't know how they'd feel about someone who skips out as soon as the schooling is finished... And you certainly don't want to say in the interview that you're just looking for someone to foot the bill for your education! If going this route, it really ought to be a place where you'd be happy working for some period of time after you finish school. Good karma and all that. ;-)
As others have said, a degree can go a long way towards getting a better job, especially if you're not the best at doing interviews, regardless of your actual skills. I'm now about 7 years out of college and getting close to paying off my loans in full. They were set as 10 year loans with low interest rate (as most student loans are) -- I could have paid them off earlier (arguably should have, to save money in the long run) but I didn't. The pace was slow and easy enough that I never had trouble making payments, even when I was making half of what I do now.
I'd take advantage of my company's tuition program for a Masters or something, but I lack the motivation. Life after school is so much nicer, and school + job at the same time would be hell. ;-)
Say hello to zMac.
are student loans (and the degree they get you) worth the debt load?
From the 2002 Statistical Abstract of the US (warning - this is a PDF):
Median Annual Income by Educational Degree (No 664)
Overall - $32,092
High School Graduate - $27,669
Some college, no degree - $33,035
Bachelor's degree - $49,180
Master's degree - $59,376
Professional degree - $81,606
Doctoral degree - $71,732
Obviously, the answer to your question depends on how much debt you're carrying. But education does pay off.
The wealth numbers (which I don't have on me) are even more striking. The vast majority of Americans are in debt. If you have a college degree or above, you can begin to break even (especially if you own your house and are middle-aged or older). Those with Master's degrees have the most wealth, followed by those with Doctoral degrees. (Master's does better than doctorate, I suspect, because of all the MBAs.)
If you're a programmer wanting a productive way to ride out the recession in school and you've already got a bachelor's degree, consider going to grad school in CS, mathematics, EE, or any of the 'hard' or even soft sciences. (particularly if you're female )
Why? First of all, it's a great way to develop all those great ideas you weren't "allowed" to when working in a closely managed and directed "role" with the concommittant "responsibilities." Second of all, here's a little secret: in grad school in the US, they pay YOU , not the other way around. Low wages, but beats workin'! Third of all, your entering, say, CS with a psyche background, or math with a bio background, or physics with an engineering background is not only possible at the best schools, but positively encouraged. It's not "off topic" or "irrelevant" background, it's cross-disciplinary .
A few years work experience-- or even more than a few years--particularly in any area of computer support, installation, management, programming, are all viewed very positively by selection committees (I know, I've sat on them). Why is this? Well, for one thing, they can get certain kinds of specialist work done around the department for about a third of the commercial rate. For another, you're going to appreciate the chance to work on your own projects far more actively than a kid fresh out of college who's maybe done one or two closely supervised "independent" projects. You know how to organise and present your work. You can make decisions for yourself. You don't necessarily believe everything the professor says. This is called critical thinking and it's positively discouraged in high school, can get you labelled as a troublemaker at work, is encouraged in some university classes, discouraged in others -- but in graduate school and beyond in academics it is absolutely essential .
Furthermore, hving been in the "real world" you know the real economic advantages of developing and owning your own Intellectual Property-- as distinct from developing IP for someone else. You can develop all sorts of ideas into almost marketable products in graduate school--prototypes--and create the opportunity for yourself to develop it further when you get out. It's much, much easier to get invesment with that Ph.D. after your name, and the prototype you and only you developed in your pocket .
For those of you who quit to go to work for awhile say, half way through your undergraduate degree, you might as well take a few courses at a time while still working, at the local state or community college to get back into it. Cheaper, and it gives you more flexibility in which course of study you choose to get your undergraduate degree in, because the competition at those institutions is just not as stiff. If your heart is in the field you're switching to, believe me, you will ace these courses, and be able to transfer into a "real" school -- with scholarships . The other advantage of taking a few classes is that it will eat into your savings enough that these won't literally count against you when it comes time for the real school to calculate your financial aid package. If you've switched to working-part-time while taking your classes, all the better.
Basically, there are a number of winning strategies for finishing degrees and even changing fields in the process that don't involve taking out huge loans and going for broke. What you need to do is take up the discussion with the financial aid officer and some of the faculty you are interested in working with at your "dream" school, your "safety" school and your "University Near Mom" school where you can take a few courses(that's what we used to call UNM, which is a very good school for a very reasonable price BTW).
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Disclaimers
1) I'm a Brit. That means with my parents throwing in $400 a month, and working 40 hours a week in vacations, I'll only owe $18000 when I graduate.
2) I graduate in July
3) I'm looking for jobs right now
4) Job prospects in the computing field, for students and graduates, in the UK, are minimal to non-existant
5) Average UK graduate wage is $33k
6) Average UK wage is £36k
7) Above $30k gross earnings, we get taxed at 32%, with an additional 17.5% tax on everything (aside from food) we buy (effectively a 50% tak rate)
8) Above $50k gross earnings, we get taxed at 40%, with an additional 17.5% tax on everything we buy (effectivly a 60% tax rate)
9) The current government wants 50% of kids to go to university
10) Current government propaganda states that the average graduate earns $15,000 a year more then non-graduates ($8,000 paid straight back in taxes). Thats based on figures before the whole "cram everyone into increasingly underfunded universities" policy
11) Almost every computing job outside graduate training schemes requires 1, 2 or more years full time commercial experience. About half of them would like a degree, and a third of them say a degree is essential.
12) We can only take out $5000 a year loans (to cover rent + food), and some banks lend upto $4000 over the 3 year degree.
13) Many UK computer courses suck, teaching you 20 year old crap no companies have ever used (or certainly dont now).
Unless you have, or can afford to take, at least 1 years work experience (which is usually unpaid, as you have no experience *or* qualifications, and demand is very high), chances of finding a job better then flipping burgers is minimal. If you have contacts (real contacts, not people on IRC that claim to run a company in Vermont), you probably wont find one in the computing field. Not in the UK anyway.
Personally, I'm off to greece for the summer - my parents emmigrated from this shithole last year, and things are just getting worse. Thanks Tony!
My degree may help later in life, but it sure as hell doesnt help getting your foot in the door. If you got experience in the boom, then uni's probably worth it. Tighten the belt buckle, stop buying iPods and tivos, maybe sell your DVD collection, and it's probably a good thing. I had a friend that went straight to work at 18, for a year, then chose a local uni while still working there. As luck would have it, that uni is getting better and better (
Part of the reason scholarships are out there is FOR keeping students heads above water with the student loans.
:) Also, look for local scholarship contests. You have a much greater chance there because LESS people are applying. :) happy trails.
There is over 3 BILLION dollars of scholarship money out there (including those for refrigerator engineers, waitress's, women, everything-- dont tell me you cant get scholarships because you CANT write-- bull), if you try hard enough, work long enough,and prepare well enough, you can have half to all of your college tuition on scholarship money. Some great sites are www.scholarships.com and www.collegeboard.com -- If you begin to prepare in your sophmore year, you'll get there
~Just keep eating, porky. Fat people are harder to kidnap.