Skip to comments.Graduating with degrees in debt
Posted on 06/17/2007 11:52:39 AM PDT by Graybeard58
My friend's son is moving back home. He is in debt, his mother says. "Up to his eyebrows."
Well, join the club.
Most Americans today carry about $8,000 in credit card debt, which sounds like peanuts to some of us out here, staggering under far more. Lots of this debt goes to all the doo-dads and gee-gaws that we once considered luxuries and now view as staples. But more, far more of that debt is going toward the very lubricant that Americans have been indoctrinated into believing will grease the economic ladder for them: Education.
Education, which Thomas Jefferson once proclaimed as the "great equalizer of the conditions of men," has become the great albatross of the working class. The difference between what a high school student can hope to earn today versus what a college student earns is the difference between Dinty Moore beef stew and bouillabaisse.
A college graduate earns almost twice as much as a high school graduate over his or her lifetime, according to the U.S. Census Bureau. Add to that the attendant social and cultural benefits (college graduates tend to vote, read and attend cultural events), to say nothing of the soupcon of wisdom that students might inhale, and you've got a time-tested vehicle for success.
Here's the catch: You have to be as rich as Croesus to afford it. Either that, or you have to embrace indentured servitude. The average cost of a four-year private institution is $22,218 a year this year, an increase of almost 6 percent over last year, reports the College Board. The organization adds that tuition will increase an average of 10 percent each year for public schools and 6 percent for private ones.
College tuition has grown faster than family income for the past 15 years but that hasn't stopped families from doing whatever they can to get their progeny into the higher halls of academia. It is a tragic equation that is tearing at the middle class, leaving it caught between a rock and a hard place: Throw your children to the demons of debt or consign them to a life of dead-end jobs and missed opportunities.
The worst of it is that we are living shoulder-to-shoulder with what USA Today calls "the wealthiest generation in American history." The problem, if you could call it that, is that the people grabbing that wealth are typically over 55. Wealth for older families has actually doubled since 1989. For those 35 to 50, wealth has shrunk. They cannot manage to save and they are smothered by debt.
I graduated from college in 1984 with a debt I then considered crushing: $10,000. For 10 years, I sent little paper stubs of $117 a month off to Wachovia Bank in North Carolina. That seems like chicken feed now, but, remember, I was working in newspapers. Chicken feed is what they pay you.
Today, the average college student is graduating with more than $19,000 in debt, if they're lucky. Go to a "good" (i.e. expensive) college, and it's worse. USA Today reports on students who have six-figure debt, like Rutgers University graduate Joe Palazzolo, who graduated this year with a master's degree in public policy and student loans of more than $116,000. (That's an $800 monthly payment).
College costs will continue to accelerate, and you don't have to have a college degree to figure out why. There's a huge demographic bubble of kids in the college-age group, so it's a buyer's market from a college's perspective.
To make themselves attractive to students, they add fripperies like spas and widespread Internet access, to say nothing of trendy coffee shops, rock-climbing walls, state-of-the-art health clubs and princely dining halls. The University of Vermont recently spent nearly $100 million on student amenities, including an artificial skating pond. Boston University upped the ante with six racquetball and squash courts, a competition pool, a recreational pool, two gyms, a jogging track and a 35-foot rock-climbing wall.
Washington State University boasts the largest student weight and cardiovascular center in the country, a natatorium that features a leisure pool with a water volleyball net and water spa that can accommodate more than 50 people. Ohio State University's $140 million gym includes a natatorium with five pools and two spas, golf hitting stations with putting greens
What, you may ask, does this have to do with Plato?
Ah, but you would have to be a college graduate to answer that.
And that would cost a lot of dough.
If you get the chance, take Dave's Financial Peace University. It'll be the best $91 you EVER spent. My wife and I did it and it's been life-changing.
We just got my first college student registered Saturday. Her tuition is going to be $10K / semester. She can take 10 credit hours or up to 20 credit hours for that price. The college suggested she take 15 hours. She signed up for 19 and intends to graduate in 3 years. I found it amazing it was flat rate.
It's not just student loan debt, either. Most campuses invite the credit card leeches to set up tables -- "Get a free t-shirt when you apply!" -- and students get hooked on "free money."
One of the female freshmen in my class last year racked up five grand on a citibank credit card (with a 29% interest rate) because it was "free"money. Some of these kids are so financially inept it hurts to look at them, and some of their parents aren't much beter.
A fried asked me what could be done with a degree in sociology. I told the friend that would qualify them to study for a masters in sociology. The friend then asked what could she do with a master’s in sociology. I told her then she could study for a PhD in sociology. She asked what she could do with a PhD in sociology. I told her that she could then teach sociology in college. She changed majors.
“I understand completely, but luckily I stumbled accross Dave Ramseys Total Money Makeover and will have my final SL paid off in a few short months.”
Good for you. Ramsey works. My wife and I will be totally debt free in about three years. Mortgage too.
“If you are divorced parents, you have no choice about paying for your childrens college education.
You HAVE to pay for it.”
Does the same legal requirement exist for married parents?
“Does the same legal requirement exist for married parents?”
No. It has been challenged in the state supreme court as violating equal protection laws, but the challenge failed.
You forgot one.
“No. It has been challenged in the state supreme court as violating equal protection laws, but the challenge failed.”
That is amazing! I suppose that it could be an attempt by the State to be more punative of divorces.....I then have to wonder why it is so easy to go thru the process if they want to be so punative.
Schools still take 75% of my property tax. Fairbanksans have a tradition of complaint about gov’t, and when I mention this 75% they suddenly change the subject.
Many who obtain their PhD do not know that they have the key to the world. What they do with it is up to their initiative (which they have clearly demonstrated), but they sure don’t have to get a job. Exec Director of something would be an amusing passtime for a few decades.
I’ve seen this, too, and it’s insane. Normal (well, maybe not so normal, anymore), married parents have no legal financial obligation to their children once they are over 18. If you want to fund your childrens’ university education, that’s your choice, and if not, that’s your choice, too. But somehow once parents get divorced, a right to have your post-secondary education funded by your parents is created. Sometimes I’m kinda glad I don’t have any kids, or an ex.
My son will enter college this year but surpise, surprise they expect mom and dad to take out the loans now instead of the kids.
When did all this happen?
>>the average college student is graduating with more than $19,000 in debt<<
>P-40>The average college student will spend more than that on their first car.<<
Eh, cry me a river. My MBA is looking to cost 80 grand.
I still don’t understand why they have “financial hardship” awards for Executive MBAs though.
When you were not paying attention. The cost of education has gone up at twice the rate of inflation. A fancy school in 1975 was about $5,000 per year tuition room board books and spending, which is about $21,000 today. But the current cost of all that is about $45,000 per year.
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