Just this past week I spent an evening with about 25 or so interested parents as we had a Collegiate Discussion, where the focus was on 1) Don’t go to the cheapest school just because of money, 2) Good Grades Do Pay, 3) Be Proactive vs Reactive, etc and some planning strategies; academic, financial and otherwise.
Totally disconnected from that, but going on at the same time is an escalated level of college loan debt and possible forgiveness, which has resulted in a flood of news and blog articles, including some (and the one referenced below) that present the process as a “scheme”.
My experience with college debt is limited. One son had merit scholarship awards that pretty much exceeded the cost of his school and the other, who did have loan debt when he graduated undergrad from one of the higher prices school types referenced, had a job that enabled him to pay those off in a year….so that he could start grad school debt free.
But I have also heard of parents taking out a second mortgage to pay for a high price tag school …. and, unfortunately, know personally of recent college grads either living at home, unemployed or having to settle for employment outside the degree field for the time being.
Before I get to “The American Dream” article, I had a a few thoughts:
- Consider the financial comparison (we’ve all heard that college grads make more money — assuming they end up working in their degree field) between someone who gets a decent job out of high school vs the person who spends the enormous amount required today to go to a high priced college …… at the point that person graduates, including debt. With one having four years of income while the other has four years of debt, how long will it take them to get back to even (including replacing the money spent on college + loan repayment) …. or for the college grad to pull ahead?
- Although I have spoken negatively about it, perhaps taking the intro courses at a local community college before going off to the specialty school can be a way to save some money. My negativity about that process is more related to the difficulty, or reluctance, of people to change …. as in, if I start at community college just to get the lower level classes out of the way, will I become comfortable and stay there rather than stick with the plan?
- Especially given the current economy (although college grads need to think several years ahead), it seems unwise to blindly take on limitless debt. Rather, I encourage students to use their four high school years to build themselves up to the point where they can get much of their college education taken care of in merit-based grants and scholarships vs loans.
Ok, here is my borrowed and referenced material for the day.
These 16 facts come from an article by The American Dream that takes the “its-all-a-scam” position. For more from a variety of sources, search something like “college loan bubble”.
#1 Americans now owe more than $875 billion on student loans, which is more than the total amount that Americans owe on their credit cards.
#2 Since 1982, the cost of medical care in the United States has gone up over 200%, which is horrific, but that is nothing compared to the cost of college tuition which has gone up by more than 400%.
#3 The typical U.S. college student spends less than 30 hours a week on academics.
#4 The unemployment rate for college graduates under the age of 25 is over 9 percent.
#5 There are about two million recent college graduates that are currently unemployed.
#6 Approximately two-thirds of all college students graduate with student loans.
#7 In the United States today, 317,000 waiters and waitresses have college degrees.
#8 The Project on Student Debt estimates that 206,000 Americans graduated from college with more than $40,000 in student loan debt during 2008.
#9 In the United States today, 24.5 percent of all retail salespersons have a college degree.
#10 Total student loan debt in the United States is now increasing at a rate of approximately $2,853.88 per second.
#11 There are 365,000 cashiers in the United States today that have college degrees.
#12 Starting salaries for college graduates across the United States are down in 2010.
#13 In 1992, there were 5.1 million “underemployed” college graduates in the United States. In 2008, there were 17 million “underemployed” college graduates in the United States.
#14 In the United States today, over 18,000 parking lot attendants have college degrees.
#15 Federal statistics reveal that only 36 percent of the full-time students who began college in 2001 received a bachelor’s degree within four years.
#16 According to a recent survey by Twentysomething Inc., a staggering 85 percent of college seniors planned to move back home after graduation last May.