Ideally, the quality of one's college education depends on how much effort the student puts into it; thus the name of the place on the diploma really doesn't matter. Opting to go to a "state" school or a community college however, may indeed be "cheaper," BUT when it comes to applying for career-starting jobs, the applicant who had been graduated from an Ivy League or a name-brand college might receive preferential hiring treatment.
And offering credit cards to college freshmen may be legal, but it's not at all ethical. It's a booby trap for the student, but it's a win-win situation for the credit card companies. If the kid can't pay, the lenders assume that Mom and Dad will bail him out, right?
Finally, one question that is never asked about
higher education. We wring our hands over how
to make it education possible for everyone who wants to go -- which may be an appropriate sentiment in a society such as ours. But why do the costs of tuition keep escalating every year? In terms of cost, college tuition is one of the two fastest-rising entities in the country. (The other one is health care.) Anybody want to venture to answer why?
Freshpersons, Welcome to Debt!
Welcome to Fleece U., where our mission is to take feckless teenagers such as yourselves and turn them into full-fledged citizens of our economy, meaning, of course, debtors.
Many life-changing things will happen to you in the next four years. You will make lasting friends, including perhaps the love of your life. You will drink more than you ever thought possible and bitterly regret it in the morning. You will lose your virginity, if you happen to have brought it with you.
Our stellar faculty ardently hopes that along the way you will be amazed by calculus and charmed by the tipsy conversation between Alcibiades and that wily old radical, Socrates. There is also a general expectation that you that you will come out of here with some hazy notion of spelling and grammar.
But never forget that your real purpose here is to shake off the pointless freedom of youth and assume the burden of debt. To this end, we have just raised our tuition in an attempt to keep up with such top-of-the-line institutions as George Washington University (now weighing in at $39,210 a year, or $50,000 with room and board). You will find us also charging a plethora of additional fees -- a "student activities fee," a "technology fee," and an "incidentals fee." In addition, we will be experimenting this year with a "snow removal fee," a "lecture hall seat-use fee," and the installation of pay toilets in the dorms.
It would be short-sighted to resent these fees, since they provide valuable experience in bill-reading, and will come in handy when you confront your own personal monthly utility statements. At present we do not charge any additional tuition for this training in bill-reading, though we are considering adding a special "fee fee" in the future.
Another thing that will help ease you into the status of debtor is the price of your textbooks -- about $120 to $180 for a new, graffiti-free copy. True, this seems high when you could buy a hardcover of Harry Potter and the Deathly Hallows for $20 or less, but the aim is to teach you that a book is something to treasure (and, again, we charge no extra fee for this lesson).
On average, you will graduate with a respectable-sized debt of $20,000, which will enable you to establish your all-important "credit history." If we have succeeded in our educational mission, you will be a first-rate debtor, capable of making minimum monthly payments much of the time. As fresh offers of credit cards and home equity loans pour in, you will beam with pride at your achievement.
Please note carefully that Fleece U degree cannot guarantee you a future income that will allow you to pay off your debts. Many of our most promising graduates are now, three or four years later, working for $8-12 an hour serving up lattés, counseling disturbed youth or creating business computer networks. They are set for a lifetime of debt, and we are proud that they first began to accrue it right here, on our lovely mock Oxfordian campus.
We don't have to remind you not to stigmatize debt as a condition associated with poverty. In 2006, for the first time, the average household's debt exceeded its income. By becoming a debtor, you will have entered the American mainstream! We have confidence that you will go on to mature effortlessly from college debt to car loan to mortgage to medical debts occasioned by the ever-growing gaps in coverage.
You will see the value of all this debt when the day comes, as it inevitably will, when you wake up and ask yourself, "Who am I and what am I doing here?" You will be tempted to take long walks, read the Upanishads, or try out for a new career as a trophy spouse.
In a crisis like this, you could easily spend thousands of dollars on life coaching and motivational DVDs. But you won't have to, because you'll have debt to keep you going. You will get up, shower, and toil faithfully in your cubicle year after year until, in the fullness of time, your family acquires the debt for your interment (at which point we trust you will have remembered Fleece U in your will.)
So think of debt as the great motivator. Think of it as our gift to you. Because for at least the next academic year, we are not even thinking of charging for it.
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To put things in some perspective, everything
costs more than it used to. In fact, practically
everything costs *ten times* what it did when
Baby Boomers Went to College, but that's
offset in that most (many?) of us make that much
more than we did when we got *out* of college.
However, the cruel fact is that college now
costs about *twenty times* more, even at state
schools, and that is a BIG difference.
There was a time when state institutions were primarily funded by the state. Tuition was kept low enough that the average working family could scrimp and save to send their child to a state school.
That time has come and gone.
State institutions are no longer funded by your tax dollars, and as a result, tuition has skyrocketed (not to mention living expenses, books, and fees).
I was a straight A student with extracurricular activities. I was the oldest of 5 children from a struggling working-class family. I qualified for - not grants, not significant scholarships - but LOANS.
$20,000 in student loans??? Even at a state school, that's getting off easy.
Well, the author says "you will graduate with" in reference to the $20,000.
I wonder, does that take into account people that don't graduate (for whatever reason, but primarily to financial hardship)?
Actually here, I'll save you all the trouble and post this quiz which sums up conservative sentiment on almost any finance related issue:
If you complain about (jobs, wages, healthcare, tuition rates, debt, misc) you must be one of the following:
a) a deadbeat
b) lazy
c) too greedy and shortsighted to sacrifice and save money
d) all of the above
Or maybe a hard worker who makes their own way while others bitch it's impossible?
Worked full time, went to college full time at the same time. Can be done. No loans. Took a semester off from time to time to save up money for the next year. No vacations, drove a 20 year old car, ate my own cooking not restaurant food. Graduated got a fairly good job. Who cares what is advertized, who cares about what is cool. I worked 3 years before I even started college. I don't understand the attitude that I have to have it now and my parents have to pay for it. HUH?? Vacations?? Yes it was hard at times but I was younger, healthier than my parents and I certainly wasn't going to let them deplete their retirement. My parents raised me better than that. Yes I did 2 years at a Community College,2 years at Pepperdine (a fairly expensive university) 4 years at the University of Washington. I paid for it all, I earned my doctorate both financially and academically. What students cannot work and defer their education for 3-4 years to keep out of debt. Yes I was offered credit cards, no I wasn't stupid enough to bite. I think lots of kids, yes KIDS, are not ready for college. They think it is an extention of high school and are expecting to live like kids for another 4-8 years without working. Not preparing the kids for being an adult, parents.
I (honestly) applaud and commend you for your hard work.
In addition to that, I applaud your parents for providing you with the mental skill set and work ethic (and presumably solid education up through high school) that allowed you to come through a situation most people would fail in (largely because they weren't lucky enough to have such a good upbringing and solid educational base).
See, the thing is, *of course* there is and always will be a certain amount of "lazy" people who don't take advantage of available opportunities, abuse assistance or knowingly take on more than they can handle (credit card shopping spree, etc).
The problem is when you argue that the ONLY reason anyone questions jobs, wages, healthcare, tuition, debt, etc is because they're (pick one) lazy/a deadbeat/a scammer looking for someone else to foot the bill (i.e. what in my opinion seems to be the conservative worldview).
But the point is, you don't (for example) stop any and ALL assistance just because *some* amount of people abuse the system. Rather, you look for ways to minimize the abuse and recognize that overall you're helping more people than you're hurting.
And if you believe in 'easy-credit' loans
amounting to $25K/year or more for all,
that would definitely make you a liberal.
If you don't, you're not, apparently.
Ridiculus, most liberals work their way through school. It is the conservatives who get mommy and daddy to pay for it.
Our economy is driven by debt. I've been onn many college campuses, and every student center has bulletin boards littered with applications for credit cards. And the idea that bankruptcy destroys your ability to get credit is nonsense. When I declared bankruptcy, within two weeks my mailbox was full of offers to apply for credit cards.
On average, you will graduate with a respectable-sized debt of $20,000, which will enable you to establish your all-important "credit history."
Only in America would being 20k in debt for an education that should enable you to be successful for your lifetime be a negative, but it's ok to drop 20k for a Harley or 50k for a Lexus (ya'ever watch their commercials around Christmas time)? 20 k is a bargain after you consider an average of 10k per student (K-12 = $120,000) at the taxpayers expense, by the time you're old enough to vote it's time for you to figure out how to pay your own way.
Okay - I just got done trying to figure out how to come up with this month's tuition payment of $4500. My son and I don't qualify for grants of stafford loans because I had to take an early withdrawal from my IRA to stay afloat and that had to be declared as income on my taxes (plus a 10% penalty). I make $27,000 per year and he made $18,000 working full time. I investigated other "student" loans and found out that even though you can defer payment until leaving school, the interest starts accruing right away.
We scraped and came up with the first 2 $4200 payment in April and July, but this time just couldn't do it. So I just took out another disbursement from my IRA to pay this one. I know it is probably against all financial advise to do so, but I cannot let this kid come out of school $50,000 in debt and I will not let these vultures do anything.
As far as scholarships - he was a straight A student until Jr High and then decided it wasn't cool, so his High school grades don't qualify him. He worked fulltime for 2 1/2 years and then decided to go to college. Now he is straight A's again. Now he can start to apply again, but in the meantime....
I'm right there with you - my son is heading off to college one semester late so that we could save up the money to move him to the city where his college is. I've been saving his whole life, and we're still having to take out loans because I make "just enough" for him not to qualify for those grants that some people think just fall from the sky. And the only reason I'm having to send him away to school in the first place is because there is no university within reasonable driving distance from our town. He's been working since his sophomore year in high school, and managed to get a couple of scholarships, but the tuition for the tech school he's going to is almost $40,000.00 for two years. When you consider I don't even make that much in a year (and YES, I have a college degree), you can imagine how hard that is to come up with.
Wait a minute, how can this be true?
I thought grants and scholarships fell out of the sky?
You must be leaving out the part about how you bought a $20,000 Harley or a $50,000 Lexus.
I see a lot of comments here pointing out that the borrower has a choice and we should live within our means. I agree wholeheartedly. However we tend to forget the power (the awesome power) of advertising, especially when it's backed up by peer pressure on the young. Even with all the recent hoo-hah about predatory sub-prime loans I still see infomercials for them on TV with no mention that the payments will take you nownere. Old "One-Eye" in the corner of the room has been telling us what to do for 60-odd years now and the corporate types who want to own us lock, stock and barrel are quite adept at using it. Frank Zappa summed it up quite well in the seventies with his sone "I'm The Slime" that says, "You will obey me while I lead you, eat the garbage that I feed you." Sure we all have responsibility for our own actions but there are hoardes of psychologists working on systems to bypass oour rational thinking and basic common sense. And those psychologists are smarter than us... they went to college and were able to pay off their student loans.
"Frank Zappa summed it up quite well in the seventies with his sone "I'm The Slime" that says, "You will obey me while I lead you, eat the garbage that I feed you." "--by indypete. I remember that one and I'm not a huge Zappa head. Great one.
Just remembered a bit more... "Your mind is totally controlled, it has been stuffed into my mould, And you will do as you are told, until the rights to you are sold"
So it's like parents who rack up a lot of
debt need to pass this proclivity on to their
kids, and what better way than by hooking them
up with some hyper-expensive college.
So, just step away from the 'proclivity', ok?
Either send your kid to a college they (or you)
can afford, or save up the money ahead of time.
Thus doing yourself & them a great favor.
"You can hardly imagine how glad I am, when every morning I perceive myself environed and surrounded with brigades of creditors--humble, fawning, and full of their reverences." - Rabelais from Gargantuan and Pantagruel.
At least creditors want you to stay alive. At least until you've accumulated enough junk to sell at an estate auction.
It seems so long ago now. Was it 6 months? Reading where a financial adviser was telling his clients that equity in their homes was a waste of money and that they should be borrowing every penny available to them against tht equity. The reasons for borrowing? vacations, bigger and better cars, plastic surgury etc. All essentials of course. The money changers have really got the population of the USA by the balls now. I wonder if anyone will learn at least a little lesson about the folly of listening to a snake oil salesman´s pitch and finding truth in it.
Car payments. Cell phone bills. Fat surgery. In vitro twins. All the necessities.
Yes there is financial aid available but only if you're below a certain household income. What about middle class families that don't qualify for financial aid and grants, which I think is a majority of families. They're the ones having to go into major debt to send their kids to school. Going to a state school is not always the answer. What about out of state tuition for state schools? They're OUTRAGEOUS!! Almost 4 fold to what a state resident has to pay. However, if you're not a legal resident and want to go to school, you have lots of financial assitance which as a taxpayer, makes me crazy! Everyone should have a fair right at a good education without being fleeced in the process. Thanks to Bush, the uber rich just keep getting richer while the rest of us pay the price!
Federal student loans are available as long as you don't have a drug conviction I believe. Choice in schools will affect your financial aid opportunities. I only qualified for need based my first year, when my brother was in his last year at a more expensive and less giving university. After that it was scholarships and stafford loans.
Out of state tuition for state schools is huge because state schools are supported by state taxes. Cheap instate tuition works at state schools, otherwise people in state x are subsidizing people in state y. Which would permit states to just not give a rats ass since their neighbors would pick up the tab.
Are there some states without a state college system? I admit that I didn't actually verify that everyone had that chance.
I really love to want to feel sorry for these people, but I just can't. Someone went to school, racked up a bunch of debt, and then didn't do anything with their degree? So sorry! I guess you should have got a better degree. Maybe you should have done something with your degree.
Some people with business degrees make $8 an hour, some make $150,00 a year. It isn't the degree, it's what you do with it. If someone decided to be an English major with no real plans as to what they would do with their degree, that is their own fault. You can't blame the system for someone who went to college because "it's just what you do after highschool" and then didn't know what to do with their lives or their degree.
I'm going to school right now; it's $30,000 a year. My first year, I took out the entire amount in loans, but this year, I took out less than half of that. Scholarships and grants are ridiculously easy to come by. And unless you are attending an incredibly difficult institution and are taking more than 20 credits, you can get a job, and you won't need to borrow for room and board.
"Fleece U degree cannot guarantee you a future income that will allow you to pay off your debts." I would hope not. Pay should be merit based, not debt based.
Please don't make this into a "the entire country is in debt now" argument. For every hardworking person who can't make ends meet because of medical bills or student loans, there are a thousand people who went out to eat 6 times a week on their credit cards and can't afford to pay them off now. And if you can't afford your auto loans *buy a cheaper car*.
Most importantly, if you are just going to waste your education and work jobs at $8-12 an hour, don't spend $50,000 a year on your degree.
Because you say that you're going to school right now, I will, against my better judgment, forgive your naivete, because you don't have a clue. No one with a college degree sets out to make coffee at Starbucks. You may not realize this, but for many career paths it can take a couple of years to get that first break--I know tons of bright, hard-working people who have spent a couple of years slaving away in low-paying jobs before getting a good opportunity in their field of choice. And even then, many jobs that require degrees don't pay the big bucks necessary to get a decent start out of the gate while you're paying fat student loans bills. Teachers are the first to spring to mind, but there are many, many more positions that don't pay very well but require a solid education. And, obviously you're not a math or econ major; in many locations, the starting wage for the average college grad in a first job is around $30,000. (We can't all be doctors, lawyers, and stock brokers, you know.) Most of these locations have seen skyrocketing cost-of-living increases over the past years. And in many if not most places, an automobile is an absolute requirement. So imagine paying $800-1000 a month rent, $250 minimum car payment, $150 minimum car insurance, plus food, clothing, utilities, AND $400-500 a month for student loans. That's all your money right there, and you haven't even considered entertainment expenses, vacation, emergencies, medical, etc. Welcome to the real world, kiddie.
Don't get loans. Save up front for your college. That will save a little money. Share your housing, buy a second hand car. Shop for car insurance, live somewhere cheaper. Bike a lot saves gas, car wear and tear, and insurance. Welcome to the real world kid.
I think the problem here is you think I'm 18. I'm 24. I've already been in the real world kiddie.
Because of that I know a lot of your expenses are bogus. Here's a tip: live somewhere cheaper. Get a roommate. For the love of god, buy a cheaper car! Why are you spending so much money on these things that don't matter? Who says you need new clothes every week? Buy something quality at a thrift store, and it won't fall apart after a month. "Entertainment expenses"? Why would you need money for that if you have the internet? Vacation? You're worried about money and you're going on a vacation?
Another great money saving tip: eat rice, fish and vegetables, drink milk. They are cheap and they keep you healthy. Suddenly top of the line medical insurance isn't so important. Also, if you're paying $1000 a month for rent, you probably live in a city. Take the bus, ride a bike, walk. You'll be healthier and you'll save a lot of money.
You know what else? When you finish school, you consolidate all your loans into one loan you get from the government. And if you can't afford the monthly payment, you can pay less. I know, I've seen people do it for years. You also get a grace period so that you have that decent start out of the gate.
Perhaps you are the naive one here?
I'll be interested in what you have to say 5 years from now, after you finish college, when you won't be able to take your own advice. Good luck getting a first job that pays more than $12 an hour and doesn't make you feel like a prisoner.
And for the record, scholarships are almost impossible to come by if your family makes a good amount of money, but is not rich. I was an excellent student but could never get a scholarship because my father made "enough" money. Now, we don't know what to do about his retirement. It all went to mine and my sister's college educations.
We both graduated with honors. I have yet to be paid more than $15/hr. In Los Angeles, that's rent. After groceries, health insurance, car insurance, cable/internet, electric bill, gas bill, and caring for 2 pet rats, saving is out of the question.
And here you come telling me that it's just because I'm irresponsible.
"These people" don't want your pity. But don't dismiss the debt problem as being a result of "people who went out to eat 6 times a week" or bought cars they can't afford.
There are educated people out there, that are behaving exactly as they should, and still can't get their finances into the + category. I think that's wrong.
And good luck getting that $150,000 a year salary when you graduate by "using your degree". Reality is going to be a big slap in the face.
You spent you parents retirement?? You didn't delay your college and work and save for college?? What were you thinking?
I'm sorry, I appear to have angered you.
Before I started going to school, I was making $10 an hour, living in the seattle area. I have a car and therefore an insurance bill, two cats, an electric bill, a phone/ internet bill (easy way to save, you don't need cable TV), and health insurance. The Seattle area is one of the more expensive areas to live (so I've heard), but I never really had any trouble. No help from parents needed. I don't understand how someone making 50% more than me can be in such dire straits.
When I applied for college, I got a loan based on my work and credit history, and I also got several grants because I don't live with my parents, they based the need off my income. I took my time picking out a college and a degree. 90% of graduates from my program have a job before they graduate. The starting salary in my field is $50,000. I guess I just don't get someone who would pick a school and major that didn't have a high success rate, bankrupt their parents, and then complain that they have it hard.
Now, as a student, I already have a job that pays $12 an hour. I would be fine making that when I get out, but the thing is, as long as you have any kind of degree, you can get a crap manger job *running* a Starbucks.
I didn't mean to imply that you are irresponsible, I mean to say that people who don't do the research before they blow alot of their (or their parents') money before getting an education deserve what they get.
Your story is sad. Maybe you should try harder to get a job in your chosen field? Maybe the industry you are trying to get into is sick of college grads who have no work experience, no life experience and their only real virtue is that their parents paid a lot for them to take some classes.
Under the Bush regime, money and wealth has been more and more concentrated in the hands of the upper 5%, with perhaps an additional 15% doing quite well, but 80% doing gradually worse over time. Once the ruling class has all the money, how can they get even more? Hard to sell things to a public that's just broke.
So we need credit. People do not earn the money they need to pay for their living expenses. Therefore, they charge it. Just think, if the financial institutions can take 25% of a person's entire life-long earnings, what an income stream that would be.
So they start with the 18 year olds taking on long-term debt for education. Those who don't go to college immediately take on debt for a car and clothes so they can get a job. Eventually they want to buy a place to live, with more debt. The price of housing has risen 200% in the past 8 years in many areas, and is simply unaffordable to most people. Therefore, they have to borrow more and more.
We have usury laws which limit interest to the federal discount rate plus 5%, or 10%, whichever the lender chooses. But the credit card, bank, S&L, and other financial institutions have bribed the politicians to pass laws saying that the usury laws do not apply to them.
One way to cut into this debt orgy would be to pass laws saying that no loan may exceed 10% interest, and there are no other fees. If someone is late, the interest keeps running on the principal, and that's all the creditor gets.
But of course we would need a Democratic-controlled Congress to get that law. Oh, that's right .... the Democrats also take money from the financial elite.
So we need to have a working people's rights law drafted by us, given to Congress with clear instructions to pass it. If they don't, we throw them out of office.
Well said. Any chance we voters could have national referendums? Congress isn't offering anything but more misery and no solutions to credit usury. I'd also like a vote to recall the president and the VP.
This reply was meant to NABNYC's post.
Why are 18 year olds taking on debt to get a car? Why not save up and take a bus in the meantime? How about buying a cheap car and learning a little autoshop? Clothing? Is there something wrong with buying inexpensive clothes?
No wonder this whole country is in debt.
Learn to live withing your means!!
Once again, bobert, your naivete is showing. You're unaware of what it's like in the real world. Outside of the top major cities, many areas of our country do not have reliable, far-reaching public transportation. Visit the Detroit Metro area if you don't believe me. And cars these days are like computer--in fact, they're filled with microprocessors--they have very few user-serviceable systems. Sure you can probably still change your own oil and replace your windshield wipers, but most other repairs require a trained technician with specialized tools and equipment. Keep studying, bobert, cuz you've got a lot to learn.
Posted September 7, 2007 | 10:38 AM (EST)