Hey Joe College. Spare me a dime?
 

My kids are finished with college, but how are you college boys...and your parents...getting through the process?


I met a young girl a few months ago who was going to graduate with loans over $100,000. When I asked her about working and repaymenty plans, her reply was: "Well, I'm going to grad school and if I can get a job paying $100,000 when I finish, I'll be ok!" I was left speechless!:eek: Her major was something in literature or language iirc.

As college costs rise, loans become harder to get


By David Cho
Washington Post Staff Writer
Monday, December 28, 2009

When Daniel Ottalini entered the University of Maryland in 2004, his family had an array of choices to cover the cost -- cheap student loans, a second mortgage at low rates, credit cards with high limits and their own soaring investments.

By the time his younger brother, Russell, started at the University of Pittsburgh this fall, the financial crisis had left the family with fewer options. Russell has had to juggle several jobs in school, and the money he could borrow came with a much higher interest rate that could climb even further over time.

The upheaval in financial markets did not just eliminate generous lending for home buyers; it also ended an era of easy credit for students and their families facing the soaring cost of a college degree.

To pay for higher education, most Americans had come to rely on a range of financial products born of the Wall Street boom. Nearly all of these shrank or disappeared in the storm that engulfed the stock and debt markets.

Lenders have raised rates and tightened standards, dramatically limiting the availability of home-equity loans and private student loans. College savings accounts, known as 529 plans, had acute losses in the downturn. And a new law, set to take effect Feb. 22, will bar students younger than 21 from getting credit cards on their own.

Loans offered with federal backing were the lone form of student debt to expand, but only because the government stepped in last year to prevent this business from collapsing under the pressure of the credit crunch. Still, the most common type of federally backed loan has a limit of $5,500 a year, not enough to pay for most four-year programs.

Even as the financing options have narrowed for families, college expenses are rising faster than ever as schools suffer from endowment losses and cuts in state funding because of the financial crisis and the recession that followed.

Last month, California's public universities announced that tuition fees would rise by 32 percent, sparking student demonstrations across the state. University of Virginia officials said a 15 percent cut in state funding for higher education will also force them to significantly raise tuition.


Some educators are concerned that the new price tags will discourage poor students from applying and will price out middle-class families that make too much to obtain financial aid, but not enough to easily afford college.

"It's not only the credit model that has changed; the basic financial model of higher education has also become challenged," said Anthony Marx, president of Amherst College in Massachusetts. "We were already concerned that middle-class students were getting squeezed by racking up debt that could constrain their career choices after they graduate. All of that comes under more strain in these new circumstances."

Other educators worry that students will be forced to compromise on their education.

Russell Ottalini said he choose the University of Pittsburgh because he judged that it would be best for his Japanese-language studies. He relied on his parents to borrow money for his education. But he acknowledged that economic times are tough and said he is willing to transfer to a cheaper school if one parent gets laid off, even if it means attending a lesser program.
"My dad told me I should go to college where I wanted to go," said Russell, 19, whose family lives in Silver Spring. "But not only do my parents have to co-sign for most of my loans, they have to watch one of their sons take on immense amount of debt."

While public universities had little to do with causing the financial crisis, they are suffering its consequences.

To help close a record $60 billion gap in the state budget triggered by the real estate downturn, for instance, California announced $800 million in cuts to the University of California system of 10 schools. In the past two years, a fifth of the system's state funding has vanished. An additional $1.3 billion in reductions is expected next year.

In response, the system's board of regents announced in November the 32 percent increase in tuition, taking effect next year.

After the decision was made, armed police in riot gear had to protect officials from protesters. Students took over classroom buildings at Berkeley, Los Angeles and Santa Cruz, barricading themselves inside. Dozens of students have been arrested. Then, earlier this month, about 70 students and activists surrounded the home of Berkeley's chancellor while he and his family were sleeping, smashing light fixtures and windows and throwing torches at the house. .....................

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/27/AR2009122702116.html?nav=hcmodule

I really don't like the idea of college loans, they cause you to start out with too much debt. As much as I would like to see my kids have the "life lesson" of paying for their own educations, I've told them I would pay for it.

When I was in college 30 years ago, I was able to pay my tuition with a minimum wage job; unfortunately those days are gone. If you really want a surprise, look into the cost of private secondary schools.

Regarding the person with the $100k loan, she is more likely to start at $50k per year and spend 10 years paying off her loans. Is unfortunate because it forces students to treat college as a trade school to recover their investment.

And add in the fact tuition is going up and return is going down.

I went to a private university (U of R) and the tuition was $4200. at that time, IIRC.

Total cost for four years with room and board was $24k..........less some financial assistance. I was able to graduate with almost no debt.

Today, the same school gets $45K for the same miserable education...........it's unconscionable.

Leaving such a school with $125K debt puts the graduate severely behind the financial curve for many years into the future.

My wife's niece and husband currently have over $1 million in college loans. She is a veternarian and he is in about the last year of residency in neurology. With their expected combined income, they will probably pay it off in a few years.

I seriously doubt it. Those that graduate with a medical degree don't make any serious money for at least 10 years.

Their combined income for the first five years probably won't exceed $200K. Making a dent in $1M is going to be a long and arduous task. The interest alone is probably $30K per year.

I understand a starting vet averages only $50K. But she works in animal testing at a human hospital and started at $100K about three years ago. He has been offered (and will likely accept) a faculty position at a major university starting at $350K. They're both exceptional in their fields.

Until I see the actual paycheck............I'm not buying it. No university hires a person fresh out of school for $350K.

Agreed, I paid about $2000 per year at a public university ($2.50 per hour at a time), now public universities are in the $15-25K range (a factor of 10), while the ability of a student to earn money has only increased by a factor of about 4. It is not clear to me why the cost of education has risen disproportionately to the rest of the economy?

In any case, I would advise anyone to avoid debt with few exceptions, such as buying their first house, but unless their parents can/will write a large check they might not have a choice.

My son is a Junior this year so we have started looking into colleges and finances. As a retired teacher and farmer, I never put away a lot of money for his college, but we will be able to help some. Fortunately, he is a bona fide member of TWO different minority groups. His tribal membership qualifies him for scholarship money from his tribe, in addition, he's eligible for scholarships thru several latino organizations. He's a member of the National Honor Society and carries a very high GPA.(as a teacher's son, the poor kid didn't have any choice in being a good student:D) Several schools with native american financial aid money to spend have already started to schmooze him.
As an educator, I know that there are tons of scholarships nationwide that go unclaimed each year. I also know that high school guidance counselors can be p!ss poor at helping kids maximize their search for funds. They're overburdened with too many kids and often aren't very well trained. It's really up to parents to help their kids get all the financial aid they can. A student with a great high school record shouldn't look at loans as a first option, even with costs as high as they are these days. An excellent book to read for anyone starting on a college search or even just interested in the subject is the book "Colleges That Change Lives". Get it on Amazon, the author also has a website.

I went to a private university too. Tuition there for a year was about 1800 per year when I started. Maybe about 3,000 when I finally graduated. I didn't have any debt when I finished. I paid for my liviing expenses out of the GI Bill money I received and the 'rents paid the tuition. Lucky for me.

"Unconscionable" is too polite a word. Screwin' them with their pants on is more like it. My Alma Mater today is in the 50k T&R&B range. To push a kid out the door with 100,000 in debt with their PoliSci or History degree is more like robbery. (Nothing against History, mind you. Twas my major;))
100G's in debt at 5% for 5 years is 1,800 per month. For 10 years it's about 1,050. Good luck with that.

It's one of the worst things I've ever seen. College tuition is just an abhorrent mistake.

As sad as it is, the only thing that will get colleges to lower their tuition will be major hits to their bottem line. It's unfortunate that HR monkeys click past applications without degrees. Colleges know that and price accordingly.

Someone mentioned awhile ago that this is the college tuition bubble and the only people it will be hurting are colleges and universities.

BTW, does anyone know if there is a tax deduction/credit for tuition; if so, does it only apply to college or is it also applicable to secondary school. I haven't looked into any of this yet.

Can't say I agree with that assessment. It's been bubbling for 40+ years. In the meantime, lots of hurting going on each year to kids and parents.

A few years ago, I read that Harvard could go tuition free and "pay" the students' tuition from the annual income earned on their endowment.
Why fleece them?:confused:

Mostly, it's for post-secondary education.... :(
IRS links.
http://www.irs.gov/newsroom/article/0,,id=205674,00.html
These links are not updated for 2009 law changes yet.
http://www.irs.gov/app/understandingTaxes/teacher/hows_mod10.jsp
http://www.irs.gov/publications/p970/index.html

Thanks, that's what I thought.

My Brothers and I were fortunate to have parents that sans spending money, paid 100% of our tuition/room & board/ for up to a 4-yr. BA or BS degree. We all took advantage of the deal - however not all of us attained the BS or BA. My older Brother eventually got his MS & Ph D, but that was on him. The only way they could afford to do this was because they, (our parents) had built, owned, and managed their own rental properties. Which were a couple small apartment buildings they built 10 years prior - that threw-off the money to pay for things like colleges for their kids. My Father's income outside the rental properties would not have done it.

Me? I'd cash-flow it were I a parent - if I could, that's the way to go to give yer kids a start in life, without loans hanging over their heads.

College is not necessarily the best way to prepare for a work-career, and sometimes some of the things learned there need to be unlearned afterwards. Many trades are better suited for many young people entering the workforce. Finding one's cup of tea, is the challenge.

We got a few lucky breaks so our kids will be mostly paid for via savings, and scholarship and grant money.

The best route financially is to start out the first year or 2 at a local junior or county college to get all the basic course work out of the way. Then getting into a state or private school is often easier if you have good grades. The problem is getting a kid to agree, and to forgo the first years of the campus college life experience. Usually they have no idea what they are getting into when they sign up for a $20K loan.

Filling out the FAFSA is important. Schools will often kick in an amount to meet your family contribution threshold. That still doesn't make it cheap, but its the best way we have found, short of quitting your job or doing something unlawful.

Regardless of work plans, I would recommend almost everyone having some post-secondary education. Not everyone wants/needs a degree, but having some formal education is always a good thing. Many young people (including myself, at the time) thought of college as a trade school, that is a missed opportunity to actually learn something.

I wouldn't recommend doing the community collage route unless it is necessary due to cost or grades. Community collage is not the same experience as a four-year college, and many students will lose a year due to transfer credits not being accepted. For some people it's the only way to able to obtain a degree, but it's not optimum.

I do know a guy who was a reputable plastic surgeon who was hired as a med school prof in residence and his salary was $ 295,000. His specialty was reconstructive surgery of the skull following major traumatic accidents. Apparently he was also a brain surgeon as well.

Given all his experience he barely hit $ 300,000 in the med school. But he decided to do that and only consult occasionally, he felt the need to train more surgeons because the work load was too much for him, and the stress was getting to him.

To say he barely hit 300,000 as if it were nothing may sound crass. But he has amazing skills and apparently he's been doing it for a while. He told me about one operation wher ehe had to make a device to hold the brain for a day in a certain position while two teams (his and his partner's) worked around the clock to reconstruct the lady's skull. It was a success and six months later she had all of her physical faculties except a slightly reduced sense of taste. And she was 65!

That's skill I don't mind paying for. It's the difference between life as a vegetable and life after an almost mortal accident.

But his skill is rare. 300 grand is worth it.

NROTC + parents (we) are paying room and board etc. No debt is a big advantage, having a job after grad and the possibility of getting a flight assignment. Paying for flight hours privately is expensive. You do owe 4-6 years after grad to uncle sam.

Tax deductions for college looked small-nothing for us.

Yes it is risky taking loans as a art major. Hard to live and pay off your loans waiting tables.

They have so many tuition grant programs that 85% of the students get them. I wanted my son to go there but he didn't want to leave the area. His choice.

In the meantime I have forsaken the idea of law school, and am about to transfer my GI BIll benefits to him for his last three years of undergraduate (You guys didn't know this, but I got off three years of Army active duty June 12 of this year, then became a reservist and civilian).

My sister has spend over 60k on an Art major and a Dance Minor over the last 3 years.

When I ask what she wants to do with it, She cant give me a straighter answer then she knows people that have been at that same school for 8 years and havent gone into the workforce yet...

Just stupid... Lots of stupid... I hate that.

I got the taxpayers to cover mine... I'll be in Iraq soon enough:D
So, thanks for the education everyone. I got most of the generals done, and should start core nursing class's soon.

~Nate

Plenty of experienced docs make a mid-six figure income, but a new doc is probably closer the low-six figures. That's not bad, but I know plenty of folks with less responsibility who make more. Being a doc is a tough way to earn a living; if you're just in it for the money, do something else.

If that's what she wants, what's the problem? I've spent a lot more than $60K on stuff with less return in my lifetime. You don't want to know how many $1000s I've spent for things like music lessons and instruments for my kids, I doubt they will ever earn a dime in that field. Whatever makes you happy.

So find yourself a degree that will pay for itself. When you have made the money and want to pursue something like say pottery making or whatever as a luxury, go for it.

Rising loan and student credit rates are the reason why.

It's terrible and I don't agree with it. Dynalow, was the girl you talked to at Chad's GTG? Because I remember hearing about that. I think she was going to the University of Delaware.

It shows me as an employer that you can commit to something and achieve it. That is something important to me. I would rather see that as opposed to somebody who has flights of fancy.

If you can, I would recommend specialization. That is why the wife went to be an NP instead of an MD. At her age, there is no way she can make the money back to pay for the education, lost wages and what not without specialization. By the time she specializes and builds up a practice, it will be time to retire or she would have to work into her 80s to make the money back. Medicine is a young man's game.

That's your money though. I doubt that his sister is in the same boat. If she is spending her inheritance, go for it. If she is on somebody's dime, that might be an issue.

True, education is a significant advantage to earning a living; but it's not the only way. Anyone who's really motivated isn't going to have an employer very long anyway.

I was simply talking about the advantages of having some knowledge beyond our own experiences. We have no idea what our kids will be doing (or what part of the world they will be living in) in 30 or 40 years.

Certainly, but there are plenty of ways to earn a decent income that do not require that much cost or commitment. I wouldn't recommend medicine to anyone who doesn't really want to do that job, regardless of the finances.

What is this "retire" that you speak of? Is that some type of punishment for living too long?

Problem is, in this day and age, as an employer, I don't even want you around for a short time. I don't have to take a chance on you since there are so many who want a job. I'll take any edge I can.

My kids are dogs so I know what they will be doing in 30 or 40 years. As piles of ashes on the mantelpiece, reminding me of the good times we had. :D

I think the definition of work should be that you are there because you have to be and not because you want to be. When I go to a whorehouse, I am there because I want to have fun. As such, I pay for it. When I go to work, I am there because I have to and would rather not be there. Therefore, I get paid.

Pretty much. Something to look forward to as your useful years are over and done with and soon you are going to be at the mercy of somebody else because you are unable to take care of yourself.

Yep. She's the one. I'm pretty sure she was attending the school that her boyfriend, who will remain anonymous for the time being (to avoid possible embarrrasment) also attended.
I don't think it would be possible to rack up 100k in debt from UDEL, unless the tuition has climbed up a lot since 2004, my oldest's last year there. It was about 22k T&R&B per year for OOS students then, iirc. I don't know what the tuition there is today. Good school though. Good value, imo.:)

Many 2-year community colleges, like our local one, are highly regarded and are every bit as tough as the big schools. Of course you have to do some additional footwork to make sure all your credits get transferred, and they have programs specifically geared to that goal. The reward is annual tuition that's 1/4 - 1/10 that of a full 4-year college, and thats money on your pocket. One of my kids is currently taking that route since he hosed up his first year being away at a real school, and making bad decisions.

I spend too much time working to do something I don't enjoy. If I "would rather not be there" I would find something else to do. Getting paid is good too, but not enough motivation to do something I don't enjoy.

I really hope I never have to retire; I'm currently getting restless because I have a few weeks off. I'm already waiting to get back to work, I could never stop working permanently.

I also have a kid going that route, but it is not my first choice. I would gladly pay the difference to have her go to a "real school" if circumstances were different.

That's the way.;) Pedigree diploma at 50-60% of the full 4 year cost.
The alumni networks don't know or care if you went 2 or 4 years. Contacts and in-career networking opportunities are big school advantages often overlooked however. At least early in one's career.

How high up the big school pyramid you can get from a CC is another matter.
Probably not to Harvard or Ivy League caliber schools, but to go from local CC to U of MD. or Penn State (Univ Park). is still a home run.

You are beginning to sound like my father. Stop scaring me. :eek: If his business failed, he has enough to sit back and play golf all day long. He has told me that even if it didn't make money, he'd be doing it unless it was running at a loss. Myself, I can't imagine a job where I would do it if there wasn't money in it. IOW, I am a whore. I sell a slice of my time for the job. As long as you got the money, honey, I got the time. That goes, I'm gone. Anything I have done, even for fun, if I had to make a living doing it, I doubt I would enjoy it. Even if I got a job as a porno star, it would be work once I had to "deliver the goods" on a schedule. Till then, it will be fun.

College has gotton to expensive, its big business now. These private schools make a lot of money, heck just look at Yale. Yale is a whole other world, they have billions and cry broke all the time.:rolleyes:


State schools are becoming popular because people can afford them.

............and u dont lrn veri mush whn u go theyre............

If that is the case, don't go to college. Save the money. Choices do come with consequences though.

............ went right over your head............

Pff me right just fin.:P

That's the virtue of the free market and private enterprise, not to mention American style capitalism.

As for Yale, in 2008:

Yale is the latest ivy-league college to announce financial aid reforms. As competition for top students increases, the best schools are competing for academic talent - financially. With this latest announcement, Yale is eliminating all tuition for students who come from families earning an annual income of $60,000 or less.



Dartmouth 2008:

1. Free tuition for students who come from families with annual incomes below $75,000
2. Replacing loans with scholarships
3. Need-blind admissions for international students
4. Junior leave term with no earnings expectation

Brown 2008:

Brown University is eliminating tuition for students whose parents earn less than $60,000, after decisions by fellow Ivy League universities to bolster financial aid as their endowments grow.

The university, in Providence, R.I., said on Saturday that it also planned to substitute grants for student loans in the financial aid packages of students whose families earned less than $100,000 a year. The new program cuts reliance on loans for all students regardless of family income, the university said in a statement posted on its Web site.

First I don't think the majority of the college grads I've dealt with really got their moneys worth.
They have the book learning, well some do, but little or no practical experience.
I always loved when they had a problem, threw fixes at it until they gave up, came to me. In less time than they spent on the first 'fix', I'd show them the problem and outline the solution.
Half the time they still came back to me to help with the solution.

Oh and then my fav was an MBA (recent grad) that I had to explain what ROI meant, fortunately in front of the CEO(I did try cover for him). He'd been with the company for years, got his degree via tutition reimbursment, he was gone several weeks later. Oh he was my boss at the time, a nice guy, but a very bad boss.


IMHO half (problably more) of the problem with rising college costs goes back to the government, match it to the housing bubble but I don't know how this one unwinds.

The more grants, low interest loans, tax breaks etc the government hands out, the more the colleges raise their price, so the government throws more grants etc, so the colleges raise their rates, so the .....

Part of it is basic economics, the law of supply and demand, as the government throws more money for kids to go to college, more go, again ...

And how many grads do you know that actually work in their field after a few years.

return on investment?

I don't see the gov handing out money for college.
FAFSA estimated we could afford a massive amount, seems they
look at your home equity, sure we could sell our house to pay for college