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The Great College Hoax
Forbes ^ | 2009-02-02

Posted on 01/15/2009 10:10:48 AM PST by rabscuttle385

Higher education can be a financial disaster. Especially with the return on degrees down and student loan sharks on the prowl.

BY KATHY KRISTOF

As steadily as ivy creeps up the walls of its well-groomed campuses, the education industrial complex has cultivated the image of college as a sure-fire path to a life of social and economic privilege.

Joel Kellum says he's living proof that the claim is a lie. A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Accepted into the California Western School of Law, a private San Diego institution, Kellum couldn't swing the $36,000 in annual tuition with financial aid and part-time work. So he did what friends and professors said was the smart move and took out $60,000 in student loans.

Kellum's law school sweetheart, Jennifer Coultas, did much the same. By the time they graduated in 1995, the couple was $194,000 in debt. They eventually married and each landed a six-figure job. Yet even with Kellum moonlighting, they had to scrounge to come up with $145,000 in loan payments. With interest accruing at up to 12% a year, that whittled away only $21,000 in principal. Their remaining bill: $173,000 and counting.

Kellum and Coultas divorced last year. Each cites their struggle with law school debt as a major source of stress on their marriage. "Two people with this much debt just shouldn't be together," Kellum says.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News; Government; News/Current Events
KEYWORDS: bankinglist; college; creditbubble; cwsl; debt; financelist; financialcrisis; highereducation; moneylist; studentloans; uva
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Also, FTA:

"The two disillusioned attorneys were victims of an unfolding education hoax on the middle class that's just as insidious, and nearly as sweeping, as the housing debacle. The ingredients are strikingly similar, too: Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks."

Getting a college degree isn't always a bad thing, but it's not always a good thing, either.

1 posted on 01/15/2009 10:10:49 AM PST by rabscuttle385
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To: PAR35; TigerLikesRooster; bamahead; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; ...
*Ping!*
2 posted on 01/15/2009 10:11:49 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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The Money, Banking, and Financial Markets Ping List.

"Money, not morality, is the principle commerce of civilized nations."
—Thomas Jefferson

FR Keywords: moneylist, bankinglist, financelist

Please tag all relevant threads with the aforementioned keywords.

This can be a very high-volume ping list at times.

Ping list jointly pinged by rabscuttle385 and TigerLikesRooster.

To join the ping list:
FReepmail rabscuttle385 with the subject line add  moneylist.
(Stop getting pings by sending the subject line drop moneylist.)


3 posted on 01/15/2009 10:11:59 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: qam1

ping!


4 posted on 01/15/2009 10:12:49 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: rabscuttle385
a self-serving establishment trading in half-truths that exaggerate the value of its product;

I love that line. And I couldn't agree more.

5 posted on 01/15/2009 10:13:54 AM PST by Flycatcher (Strong copy for a strong America)
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To: rabscuttle385

O boo hoo hoo. If each had a six figure income, then I’m guessing they were living the high life instead of paying off the debt. If they had lived on one of their incomes and used the other to pay off the debt, they’d be done with it by now. Silly people.


6 posted on 01/15/2009 10:14:09 AM PST by Mercat (God doesn't call me to be successful. God calls me to be faithful. Mother Teresa)
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To: rabscuttle385
A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Swing and a miss!

7 posted on 01/15/2009 10:14:29 AM PST by Wolfie
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To: rabscuttle385

>>Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor’s degree in history.

A History degree? Perhaps, if he had studied something useful...


8 posted on 01/15/2009 10:15:19 AM PST by vikingd00d (chown -R us ./base)
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To: rabscuttle385
I concur with just about every point that is made in this article about the idiocy of taking on huge piles of debt to pay for "higher education."

I would recommend attending school on a part-time basis (and working on a full-time basis, or close to it) as one possible alternative to this scenario. I can't think of too many careers in which $140,000 of debt would actually be a good investment.

9 posted on 01/15/2009 10:16:02 AM PST by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
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To: rabscuttle385

Was there some reason this couple with two six figure incomes couldn’t live on one and use the other to retire their loan debt?

While I agree than higher education is now one of the biggest scams on the planet, this couple have only themselves to blame for poor decision making.


10 posted on 01/15/2009 10:17:23 AM PST by Valpal1 (Always be prepared to make that difference.)
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To: Wolfie

Beyond the fact that he received a BA that guarantees you’ll need to go to grad school unless you want to teach HS for peanuts, these people lived in LOS ANGELES—one of the most expensive cities on the planet. No wonder their six-figure salary went nowhere.

Why didn’t they take their fancy law degrees and move somewhere cheaper?


11 posted on 01/15/2009 10:17:42 AM PST by j-damn
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To: vikingd00d

Is profitability the only measure of usefulness?


12 posted on 01/15/2009 10:17:59 AM PST by swain_forkbeard (Rationality may not be sufficient, but it is necessary.)
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To: Mercat

“If each had a six figure income, then I’m guessing they were living the high life instead of paying off the debt.”

####

Unquestionably.

Oh, and the LAST thing this country needs is more “degreed” history graduates and lawyers.


13 posted on 01/15/2009 10:18:27 AM PST by EyeGuy
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To: rabscuttle385

Together, they make in excess of $200,000. If they rented a small apartment or paid on a small home and had low ownership cost cars to drive, then there is no question that this debt could be quickly paid off.

They are living expensive, rather than prudent, lifestyles.


14 posted on 01/15/2009 10:18:44 AM PST by ConservativeMind (What's "Price Gouging"? Should government force us to sell to the 15th highest bidder on eBay?)
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To: rabscuttle385
I went to a state engineering schools. Tuition was about $5,000 a year which I earned working as a TA and odd jobs. Housing was free as a RA and living in a frat (well, almost free).

Graduated with no debt. First year salary more than paid for all the cost college plus interest (ROI - 1 year).

Of course, I was a geek, spend many a weekend studying and my employer actually expects productivity and something of value.

15 posted on 01/15/2009 10:19:07 AM PST by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: rabscuttle385

Nonsense. Nothing increases one’s bankability as surely as an education. With few exceptions there is no greater obstacle to earning potential than lacking education. For every billionaire dropout like Bill Gates there are a million earning $35,000 a year.


16 posted on 01/15/2009 10:19:21 AM PST by Melas
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To: vikingd00d; Wolfie

Each of you hit the real big issue!


17 posted on 01/15/2009 10:20:14 AM PST by ConservativeMind (What's "Price Gouging"? Should government force us to sell to the 15th highest bidder on eBay?)
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To: rabscuttle385

It’s true that it works for some and not for others. I hold four degrees (a Bachelors, two Masters and a Doctoral Level degree). At 46 I still have $59,000 sitting out there at 3.75%. Was it worth it? Yes. Why? Because I was able to get into ivy league programs and parlay them into a very high paying career.

To undertake that financial obligation for a soft science degree and masters or law degree from a third tier university and then to marry someone who did the same thing might not be an ideal financial move. It works on a case by case basis.


18 posted on 01/15/2009 10:20:19 AM PST by johnnycap
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To: j-damn

Los Angeles does indeed have a lot to do with it. I’m struggling too, because my rent is about 400% of the norm. But I love it here, so I just... keep struggling.


19 posted on 01/15/2009 10:21:44 AM PST by A_perfect_lady (History repeats itself because human nature is static.)
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To: rabscuttle385
A 40-year-old Los Angeles resident, Kellum did everything he was supposed to do to get ahead in life. He worked hard as a high schooler, got into the University of Virginia and graduated with a bachelor's degree in history.

Where did this goofball get the idea that a degree in history would make him money?

This article is idiotic.

20 posted on 01/15/2009 10:21:49 AM PST by <1/1,000,000th%
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To: Alberta's Child

Never had a student loan in my life. My husband didn’t either. We worked part time, at times. Or one was working full time while the other went to school full time.

My son will graduated next year without a loan. We started saving when he was young. He did part of his college years in a state school and he works part time.


21 posted on 01/15/2009 10:22:41 AM PST by CaptainK (...please make it stop. Shake a can of pennies at it.)
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To: Melas
I agree with that, but I would also suggest that the type of education one receives or even the manner in which that education is obtained could actually be a LIABILITY for someone -- not an asset.

I work in a field (engineering) that typically requires an extensive education involving difficult subjects. My best employees are the ones who paid their way through "marginal" schools -- often taking 6-7 years even just to finish an undergraduate degree.

I'll take these folks over their counterparts with expensive Ivy League educations any day.

22 posted on 01/15/2009 10:22:56 AM PST by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
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To: EyeGuy

This just blows me away...supposedly intelligent people submerging in debt for worthless sheepskins. They should have bought old cars, or stamps, or gold bars. At least there would be something of value to sell off. I bet they expected this all to be guaranteed to pay back.
The real trouble here is the failure of the school system to give kids any inkling of personal finance training, which could at least prepare them to make better decisions about debt. My two didn’t get it either...


23 posted on 01/15/2009 10:23:07 AM PST by randomwalk (Liberalism is a psychosis...)
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To: rabscuttle385

I have to say that I value a good, honest auto mechanic, plumber, HVAC technician or house painter as much as I do a good, honest accountant or lawyer. And to be candid I believe that one is just as difficult to find as the other and all of them are worth the money when you need them. Skilled and honest tradesmen are real assets to a community and I would have no problem at all encouraging my son or any young person to seek training in a needed trade. A lot of these tradesmen make good money and given the relative glut of degreed individuals in certain sectors make more than many who have submitted themselves to “higher education” in a lot of cases.


24 posted on 01/15/2009 10:23:32 AM PST by scory
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To: j-damn

>>Beyond the fact that he received a BA that guarantees you’ll need to go to grad school unless you want to teach HS for peanuts,

Can you even do that, any more? I think you now in many cases have to be an Education College graduate to teach in the schools.


25 posted on 01/15/2009 10:23:38 AM PST by FreedomPoster (Obama: Carter's only chance to avoid going down in history as the worst U.S. president ever.)
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To: rabscuttle385

Articles like this make me so happy I walked out of college with only one ~$7000 loan to pay back...


26 posted on 01/15/2009 10:23:56 AM PST by Andonius_99 (There are two sides to every issue. One is right, the other is wrong; but the middle is always evil.)
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To: j-damn
Why didn’t they take their fancy law degrees and move somewhere cheaper?

Los Angeles has more lawyers than all of Japan. Some of them make a good living suing each other.

If they had gone to some small burgh, they would be writing wills and doing bankruptcy filings for relative peanuts.

27 posted on 01/15/2009 10:23:56 AM PST by Vigilanteman (Are there any men left in Washington? Or, are there only cowards? Ahmad Shah Massoud)
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To: A_perfect_lady

We need to get you out of there. That area, including San Diego, is beautiful, but you are taxed and expensed to heck.

Please look elsewhere for work and get around more conservative people. Even if you moved toward Yuba City, you’d live cheaper. However, I’d strongly suggest moving to another state.

Find one with more conservative guys. Maybe the southeastern US would be where you should look...


28 posted on 01/15/2009 10:24:36 AM PST by ConservativeMind (What's "Price Gouging"? Should government force us to sell to the 15th highest bidder on eBay?)
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To: rabscuttle385
My Grandson had a similar experience. He said that he didn't see the value of a High school education because "it was hard".

We had furter discussions.

29 posted on 01/15/2009 10:24:49 AM PST by River_Wrangler (Nothing difficult is ever easy!)
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To: vikingd00d
A History degree? Perhaps, if he had studied something useful...

My Economics degree comes in very handy. I can logically and correctly explain the theory behind my unemployment.

30 posted on 01/15/2009 10:26:33 AM PST by TexasNative2000 (Everything Obama does is "appropriate", therefore, nothing he does is "inappropriate".)
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To: rabscuttle385


31 posted on 01/15/2009 10:27:03 AM PST by GalaxieFiveHundred
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To: <1/1,000,000th%
Where did this goofball get the idea that a degree in history would make him money?

A degree in history (with a heavy load of English lit,) is the best prep for law school you can have. If this guy had law school in mind when he was an undergrad he was doing the right thing. As can be seen by the nice job he landed after passing the bar exam!

32 posted on 01/15/2009 10:29:07 AM PST by Snickersnee (Where are we going? And what's with this handbasket?)
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To: Flycatcher
Th other half of the story is that every time the government offers guaranteed student loan programs the colleges factor the availability of loan money into what they ‘expect’ students can afford and jack up their rates.
33 posted on 01/15/2009 10:29:31 AM PST by Old North State
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To: Mercat
O boo hoo hoo. If each had a six figure income, then I’m guessing they were living the high life instead of paying off the debt. If they had lived on one of their incomes and used the other to pay off the debt, they’d be done with it by now. Silly people.

Keep in mind that when you both make a six figure income that the government lives off one of them, so you are already living off just one yourself. Additionally, you make too much money to deduct any of that school debt.

That said, yea, they should have just increased their standard of living marginally after taking the jobs and paid off the debt in four years time.

34 posted on 01/15/2009 10:30:03 AM PST by SampleMan (Community Organizer: What liberals do when they run out of college, before they run out of Marxism.)
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To: rabscuttle385

12% a year? Since when are educational loans 12% a year? Something doesn’t sound right here.


35 posted on 01/15/2009 10:32:19 AM PST by RonF
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To: Melas

I must be doing well...HS graduate and 36,400 income!


36 posted on 01/15/2009 10:34:04 AM PST by PghBaldy (Obama showing off his crotch: http://www.liveleak.com/view?i=550_1210277599)
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To: swain_forkbeard
Is profitability the only measure of usefulness?

When it comes to paying off debts: YES!

Regards,

37 posted on 01/15/2009 10:34:14 AM PST by alexander_busek
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To: rabscuttle385
By the time they graduated in 1995, the couple was $194,000 in debt...and each landed a six-figure job. Yet even with Kellum moonlighting, they had to scrounge to come up with loan payments.

BS. Let's assume with both making 6 figures, they are clearing $12k a month (rough estimate, depends on state, etc - that and "6 figures" is very broad, so I am estimating from the low end, i.e. $200k per year, pre-tax). The student loan payments with 12% interest (as quoted in the article) would be around $2.9k a month over a 10 year term, or $2.3k a month over a 14.5 years. If they cannot live off $9k a month, they are mind-numbingly stupid.

38 posted on 01/15/2009 10:34:36 AM PST by M203M4 (Bill Kristol: Piltdown conservative)
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To: vikingd00d

IMO a History Degree would be worthwhile except that Most History depts have become post modern shitte-holes. The problem is the extreme bias of most of the History/Social Studies academia. The Universities are ripe for change...they are tottering as their investments have cratered and the Cost/Benefit equation has come into focus.


39 posted on 01/15/2009 10:34:38 AM PST by iopscusa (El Vaquero. (SC Lowcountry Cowboy))
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To: vikingd00d

Sounds to me like this whiny-assed idiot may have “worked hard” in high school but didn’t learn anything about BUSINESS. He sure didn’t create a very good BUSINESS PLAN about financing his life goals.

No, what you really have here is back-biting about a frustrated sense of entitlement. Yeah, hey, I went to college and law school. Where’s my big house? Where’s my Lexus?

Me Me Me. Sounds like a little choir girl.


40 posted on 01/15/2009 10:34:41 AM PST by henkster (When I was young I was told anyone could be President. Now I believe it.)
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To: rabscuttle385
$194,000 in law school debt

Harry Truman never graduated law school, yet became a judge and President.

41 posted on 01/15/2009 10:35:40 AM PST by montag813 (www.FreepShop.com)
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To: rabscuttle385; ItsOurTimeNow; PresbyRev; Fraulein; StoneColdGOP; Clemenza; m18436572; InShanghai; ..
Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.

42 posted on 01/15/2009 10:38:16 AM PST by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
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To: rabscuttle385
They eventually married and each landed a six-figure job.

Uh, so why didn't they pay off the $174,000 loan? they had no kids, could presumably live in a $2,000/month house or condo. I put their (rational) joint living expenses at a max of $40,000 annually, including 2 car loans. Assuming their combined in come was $250,000/yr, what was the problem? and what kind of assclown wants us to feel sorry for them?

43 posted on 01/15/2009 10:38:43 AM PST by montag813 (www.FreepShop.com)
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To: Wolfie

ROTFLMAO


44 posted on 01/15/2009 10:41:27 AM PST by hudsonohio
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To: RonF
12% a year? Since when are educational loans 12% a year?

Private bank-issues student loans.

45 posted on 01/15/2009 10:42:21 AM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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To: 2banana

2banana...you have it right about the way to view Higher Ed...BTW I checked your about page here and lloved the history lesson on the Right to Bear Arms and the Agincourt to American Revolution analysis.


46 posted on 01/15/2009 10:43:04 AM PST by iopscusa (El Vaquero. (SC Lowcountry Cowboy))
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To: Mercat

This article is merely an advertisement for the coming movement to abolish student loans and make college “FREE” (except to us taxpayers who already paid our own way of course).


47 posted on 01/15/2009 10:43:53 AM PST by Troll_House_Cookies (Ironically, Chancellor Obama's first re-education camp will be in Alaska.)
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To: rabscuttle385

All I can say is that over the years working part time retail jobs almost everywhere I ever worked I was he only one without a college degree. A degree is no guaratee that you will find a decent job.


48 posted on 01/15/2009 10:44:14 AM PST by chris_bdba
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To: rabscuttle385

The return on investment can be lousy if you are in the tech world where the Bill Gates’ of the world are pushing for more HB-1 visas for foreign workers to come to America and undercut the job market (Microsoft competes against the modelling industry for HB-1 visas, they want Indian programmers and the fashion world wants Russian girlies).

Add to this equation offshoring of R&D (especially but not limited to product testing) and there is no job security. The corporations lobby the government to secure cheaper labor.


49 posted on 01/15/2009 10:46:01 AM PST by weegee (Beware the Green Menace, the socialists warning you of global warming under your bed are hysteric.)
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To: j-damn

“Why didn’t they take their fancy law degrees and move somewhere cheaper?”

Exactly, they could have lived in TN,AL,IN and many other places.
If I had to do it all over again, I would become an electrician.


50 posted on 01/15/2009 10:46:21 AM PST by woodbutcher1963
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