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?

Comments

work while in school

[buttahead]

I found that working while in school helped to pay for tuition. Some people believe that they can worry about the payments later, but never pay tomorrow what you will be charged interest for today.

School doesn't need to be paid for all at once. Pay for each semester as you earn the money. Do a work study so that you are learning on the job and making money to pay for your next semester.

Re:ugh!

[sporty]

Yeah, but you should ask THEM if they say it's not worth it.

I am spending about $40k total on my college ed. Even if I spend $100k, over 30 years, that's $10 every 3 years, or 3600 every year. About $200 a month.

Now, if you make $400 more a month just 'cause of the diploma, you already have $200 extra a month after paying off the loan (monthly). An extra $100k over the 30 years, assuming no raises.

That's IRA, pr0n, wedding, anything else money, and that's after those 30 years. Your investment continues after that too... until 60'ish.

Re:ugh!

[sporty]

Then your friends wasted their money. Not finishing college or some other educational enhancing facility at all, once you start, is really lame.

That's like getting a subscription to the gym and never going. You give your money and you come out behind.

Re:It depends on your future salary potential.

[elmegil]

You shouldn't be just using starting salary to decide this issue. While it is important, you also need to look at overall earning potential. My "likely" starting salary was in the $40k range, but I opted to start my career at a university, so my actual starting salary was under $30k. But it was never beyond my means to make the monthly payments (mine were all federally secured, can't speak for the other types of loans), and after 8 years I had moved to a job that was closer to $50k. With some options I was even able to pay off early, though in the current economy I wouldn't advice relying on that. But 7 years at a pittance academic salary was still not so terrible as to make me think I shouldn't have had those loans.

Worth Every Penny

[mjstrom]

Student loans are a good way to finance education costs, especially if you don't have other options. I took out a modest amount while at college but I can honestly say that 1. I would not be where I am today without the degree and 2. I would not have been able to pay for colledge without the loans.

Tha debt loan can eat up a decent amount of your income when you first graduate. But, I think it is more important to look at it as an investment. If you can raise your earning potential from $6/hour (12,000 a year) to $15 (31,200) you are seeing over a 100% increse in your investment (yourself) in the first year alone.

Take that over your entire lifetime and see that they will end up giving you more than they take away.

College?

[Anonymous Coward]

As a parent with two kids (5 and 8), I often find myself pondering whether college will be a good choice when they hit that age. Yeah, sure, if you want to be something which requires a degree, then more power to ya. But for the rest of us, I'm not so sure.

My wife and I have had quite different lives. She came from a family where the mother didn't give a shit about educating her four daughters, but managed to get her son interested in commmunity college (an old-school Mormon mentality, where her daughers were to be perfect wives/baby-makers and nothing else). She dropped out of HS, got knocked up (before she met me), got a GED for herself, and has worked shit jobs ever since. I came from a middle class family that paid for 5.5 years at a decent state college, but I never finished. I'm a sysadmin. Sometimes she gets irritated that I can gross $25/hr sitting at a desk at a job that I love while she (when she decides to work) usually busts her ass for (at best) $10/hr.

The quicker route would be to take that $40k for college (if you have the savings) and simply jump to the final step above (own real property with no consumer debt). But the 4 years of living poor will really make one appreciate the value of money.

You might think that both of us would be huge supporters of the college degree thing. Oddly enough, we're not. We've both filed for Chapter 7 bankruptcy at different points in our lives. She did mostly due to hard times (single mother anyone?). I did because I was a dumb-ass who racked up unsecured debt and then lost his job.

Once we both we jarred out of consumerism, we became much more accutely aware of just how well-off most people could do with modest income. The problem is that most people choose not to. They piss away countless money on eating out, cable/sattelite TV, new cars, homes in the 'burbs, and countless other crap. It's sad, really.

But it doesn't matter what demographic people are in, they'll waste money just the same. There are just as many DirecTV dishes in poorer neighborhoods as there are in your typical middle-class 'burb.

Ever hear a parent advise their kids: "When you graduate, I'll buy you a reliable used car. I want you to find yourself a cheap place to live. Share a house or apartment with 2-3 other kids your age (in a college town), or find a cheap efficiency, whatever it takes. Then find the best-paying job you can find right now. I don't care if it's labor shift work at a factory, waiting tables (decent money for the work), or whatever. If the pay-to-rent ratio is too low, I'll relocate you. You're young, you have your health, and you have no family and/or kids to bog you down. Live like a pauper. Scrimp every spare penny you can for 4 years and put it somewhere where you can't touch it -- bonds, CDs, even a savings or money market account at your local credit union. I'll cover disasters for you (you break a leg or your car gives up the ghost), but you handle the rest. You may not believe it, but in 4 years you'll be far further along than 95% of your classmates who went to college. Many will have loans, and nearly all will have credit card debt. You'll have at good-sized wad of cold hard cash and you can use that to put down (or buy outright) a fixer-upper house or a piece of land to throw a trailer on. From there, if you're smart, you'll be on a very short road to financial freedom, and you won't owe anyone a dime (excepting property taxes)."

Of course you'd never hear that. Any parent who said that would be shunned as an evil parent. Note that I didn't say to kick the kids out the door and hope they have a good life. I think a life of financial freedom (note, not "idependantly wealthy") is better than any typical middle-class life that I know of.

Maybe slightly idealistic, but true freedom is possible for most everyone until they head down the road of consumerism and debt. The sad part is that most people want Shiny New Things (tm) instead.

Man, if I

Compiler

[Glonoinha]

Compiler doesn't care if you spell it correctly, as long as you are consistant :)