The Great College Hoax

Some don't have any problems borrowing school $ nowadays. I know some full time students (couple) that borrow big $. They go on vacations with the $ (Hawaii, Bahamas, Disney) and have even borrowed school $ to run a Quixtar pyramid scheme for a while. They must be tens of thousands of $ in debt. No problem, they just keep pushing back graduation and borrowing more $. What gives?

when i went to college--no way in hell I was goin on vacations to Hawaii. Somethings not right with the school fundings program.

Quote from Piccaboo : Get a clue - not every person who graduates with a Law Degree wants to make "Partner". Some go to work for the Government, some open their own practices, some work for small firms (not requiring 80 to 100 or more billing hours per week), etc.

This is true, and many of these lawyers are not pulling down 6 figures. If the two lawyers in the OP weren't on the big firm track, I can see how they might fall behind on their debt. Especially if they tried to show flash in order to look successful to attract clients.

Quote from rrc06 : I think a bonafide in-state public Ivy (U Mich, UNC, U Wisc, UVa, UF, UAB, UC-whatever, UWash etc.) is the way to go unless you get into a classic Ivy (Harvard, Yale, Princeton). Everything else is a waste of money IMO

It's also a regional thing as well UChicago and Northwestern are big names in the Midwest. The classic Ivies dominate the position on top of the rankings because they encourage an atmosphere of pride and entitlement. I just wish we had more politicians and CEOs that didn't have the Ive League stamp.

Quote from gibbersome : It's also a regional thing as well UChicago and Northwestern are big names in the Midwest. The classic Ivies dominate the position on top of the rankings because they encourage an atmosphere of pride and entitlement. I just wish we had more politicians and CEOs that didn't have the Ive League stamp.

Is UChicago private? IIRC it is.

Several items:

- The availability of loans has made college costs go sky-high. Think about it - if you went to a private univ. and had loans, was there a conscious decision to go into so much debt at the onset, or was it automatic (please note that I am NOT saying students are coerced into taking out loans - it's simply the "normal" thing to to and you don't even think twice about signing the papers)? When the customer has no concern for the cost of what they are purchasing (e.g. a student purchasing an education), there is little reason to participate on a price point and therefore tuition skyrockets. This is similar to what's happened with insurance and the cost of healthcare. You all see this if you tour colleges - how many colleges/Univ will tout how their faculty has X# Ph.D's or is prevalent in the literature? More likely you'll hear about their student union with all sorts of food, or their new multi-million $ gym with a great pool, or their new dorms with all sorts of nifty features.

- I've always wondered how people accumulate SO much debt - $200k for one person? Granted, if the tuition was $40k and you had $10k for living expenses you could do that in 4 years. My wife went back to school (she's a teacher with a BS and MA and went back to get a cert to be a principle, etc) and since I was a student at the time she took out loans. The school - a public CT Univ - was about $4k/semester for 2 classes ala-carte - yet we were offered nearly $20k/SEMESTER in FEDERAL loans! It was up to us to choose how much to accept. I actually called the school and asked what the catch was and asked "So I could go buy a car with the extra $$?" to which they replied "... well.... you'd have to pay it back" Well DUH! I guess it's very common for kids to take out loans in excess of tuition and live on the rest.... a very bad idea.

- I'm a proponent of letting a kid pay their way through college. Too often nowadays, college is the expected continuation of HS, and not all kids are ready/can handle college. So, classes are failed and they spend their time partying. If you knew that every class you took cost you, PERSONALLY, $2k (or whatever), you'd spend alot more time studying and less time partying. If, as a parent, you'd want to help your children, then fine - let them accumulate the debt then suprise them at graduation with a check.

- College is not for everyone, and there shouldn't be anything wrong with saying that. My father was an electrician - my FIL is an electrician, and even though I chose the college route (I have a Ph.D. in Chemical Engineering from Yale), I probably use the skills I learned from my father more on a daily basis than my "formal" education. After all, does everyone know how much it costs to hire an electrician/plumber/carpenter/HVAC per hour??? ALOT more than I make! Sure trade work might be harder and more demanding physically, but please do not just go to college, get some nonsense degree, and be back in the same place you started, but 4 or 5 years older and deeper in debt.

I do agree that the lawyers in the OP could probably have 'worked it out' if they'd planned better. Though it does say that the husband was 'moonlighting' somewhere. Add to that the fact that they live in California where the cost of living and housing is pretty high. And the fact that they were lawyers and so they probably "needed" that BMW, for example.

However, I also have seen many many examples of regular folk living within their means but still with a mountain of school debt. There's also the small matter of people 18-24 not understanding the full ramifications of financing their education.... they don't know how much of a bite out of their income it's going to take, nor are they aware of the length of time that payment is going to be there.

Someone was critical of people choosing a history degree. This is really a point of contradiction that we've not resolved between the university and society. On the one hand you've got a job market that requires a degree to even get an interview... on the other hand you've got this idea that you should study something you are at least interested in. And the university usually has a list of jobs you can get with a history degree, or other liberal arts degree... and they are usually pretty broad.

I think (and I hope it's not just good old days syndrome) there was a time when a liberal arts degree was a fine degree that would get you a decent job. The whole idea of a 'liberal education' is lost now anyway, and 99% of schools do not provide a liberal education. Beyond that there are now millions of liberal arts majors... and it's one of those things where you tend to get lost in the shuffle. It seems that you really have to define yourself by your work and degree. Employers seem to have a lack of imagination when it comes to a resume and degree. If your degree and experience are not within some narrow confines of what they think would be a good fit, you don't get an interview.

Quote from Piccaboo : Get a clue - not every person who graduates with a Law Degree wants to make "Partner". Some go to work for the Government, some open their own practices, some work for small firms (not requiring 80 to 100 or more billing hours per week), etc.

Or, some just do it because they can (Caroline Kennedy).

I was just thinking about that the other day without this thread.

Quote from Dr. J : Several items: - The availability of loans has made college costs go sky-high. Think about it - if you went to a private univ. and had loans, was there a conscious decision to go into so much debt at the onset, or was it automatic (please note that I am NOT saying students are coerced into taking out loans - it's simply the "normal" thing to to and you don't even think twice about signing the papers)? When the customer has no concern for the cost of what they are purchasing (e.g. a student purchasing an education), there is little reason to participate on a price point and therefore tuition skyrockets. This is similar to what's happened with insurance and the cost of healthcare. You all see this if you tour colleges - how many colleges/Univ will tout how their faculty has X# Ph.D's or is prevalent in the literature? More likely you'll hear about their student union with all sorts of food, or their new multi-million $ gym with a great pool, or their new dorms with all sorts of nifty features. - I've always wondered how people accumulate SO much debt - $200k for one person? Granted, if the tuition was $40k and you had $10k for living expenses you could do that in 4 years. My wife went back to school (she's a teacher with a BS and MA and went back to get a cert to be a principle, etc) and since I was a student at the time she took out loans. The school - a public CT Univ - was about $4k/semester for 2 classes ala-carte - yet we were offered nearly $20k/SEMESTER in FEDERAL loans! It was up to us to choose how much to accept. I actually called the school and asked what the catch was and asked "So I could go buy a car with the extra $$?" to which they replied "... well.... you'd have to pay it back" Well DUH! I guess it's very common for kids to take out loans in excess of tuition and live on the rest.... a very bad idea. - I'm a proponent of letting a kid pay their way through college. Too often nowadays, college is the expected continuation of HS, and not all kids are ready/can handle college. So, classes are failed and they spend their time partying. If you knew that every class you took cost you, PERSONALLY, $2k (or whatever), you'd spend alot more time studying and less time partying. If, as a parent, you'd want to help your children, then fine - let them accumulate the debt then suprise them at graduation with a check. - College is not for everyone, and there shouldn't be anything wrong with saying that. My father was an electrician - my FIL is an electrician, and even though I chose the college route (I have a Ph.D. in Chemical Engineering from Yale), I probably use the skills I learned from my father more on a daily basis than my "formal" education. After all, does everyone know how much it costs to hire an electrician/plumber/carpenter/HVAC per hour??? ALOT more than I make! Sure trade work might be harder and more demanding physically, but please do not just go to college, get some nonsense degree, and be back in the same place you started, but 4 or 5 years older and deeper in debt.

Those 18 hrs/week teachin is a real killer. How do you manage keepin up with the materials with those 1 month breaks between semesters & all summer off?

Quote from Dr. J : Several items: - The availability of loans has made college costs go sky-high. Think about it - if you went to a private univ. and had loans, was there a conscious decision to go into so much debt at the onset, or was it automatic (please note that I am NOT saying students are coerced into taking out loans - it's simply the "normal" thing to to and you don't even think twice about signing the papers)? When the customer has no concern for the cost of what they are purchasing (e.g. a student purchasing an education), there is little reason to participate on a price point and therefore tuition skyrockets. This is similar to what's happened with insurance and the cost of healthcare. You all see this if you tour colleges - how many colleges/Univ will tout how their faculty has X# Ph.D's or is prevalent in the literature? More likely you'll hear about their student union with all sorts of food, or their new multi-million $ gym with a great pool, or their new dorms with all sorts of nifty features.

That's a great point considering the lenders know if you're going to a good school, you're more than likely not a deadbeat and will repay the loan.

Quote from Hawk2007 : That's a great point considering the lenders know if you're going to a good school, you're more than likely not a deadbeat and will repay the loan.

Student loans are the best racket in town. About the only thing they can't do to force you to repay is take your thumbs.

Even if you're a deadbeat...student loans cannot be discharged even in bankruptcy. Isn't that a nice racket? Charge 8-12% interest on money the Feds loan you at 0.25% with guaranteed return. IMO, if all the risk is taken out of the investment, then the reward should be taken out as well. I'd put an interest rate cap of the Fed Funds Rate + 1% on every student loan to reflect the fact that these loans are essentially risk-free to the lender.

Like any investment, college is no sure thing.

Only pays off when you invest in the right degree and the right college.

You should not invest only for a monetary return, but rather in order to do what you want to do for a living.

I know I could not have had a career doing what interests me without a college degree.

Quote from shhaggy : Somebody at my college committed suicide, and then his roommate got straight As. True story.

That was a movie http://www.imdb.com/title/tt0123034/

Another element where you get screwed on the back end of this deal is the student loan interest deduction. Our leaders have seen fit to cap the amount of the deduction at $2500 a year. That's a joke.

If it was uncapped more people would itemize and go over the standard deduction... thus reducing the federal take. The fact that most people probably don't itemize may contribute to people not realizing that they are getting hosed in this arena.

Quote from Doctor_Wu : I think (and I hope it's not just good old days syndrome) there was a time when a liberal arts degree was a fine degree that would get you a decent job.... [Now] Employers seem to have a lack of imagination when it comes to a resume and degree. If your degree and experience are not within some narrow confines of what they think would be a good fit, you don't get an interview.

This is a good point. My father got a history degree way back when. He then went on to qualify and join the Department of Defense Technical Intern program (I think the requirement to get in was that you could touch-type 40 wpm... pretty rigorous), and wound up with a life-long, 30+ year career as a IT specialist / Network administrator for various agencies within the DoD.
He never went back to school for an IT degree or any kind of technical education at all. Thirty years after finishing college, he was one of the most sought-after IT guys in the Pentagon with nothing but a History degree from Western Kentucky University.

I can say with a depressing amount of certainty that, thirty years from now, no one will have a similar story to tell, because you'd never get so much as your big toe through the door of an IT position without at least an associates degree in a "related field". Someone with just a history degree applying for an IT job is going to get laughed out of the building.