25 years old and deep in debt

[crazy canuck]

I'm a little confused by your arguments, CC.

On one hand you seem to be saying that people who end up in educational debt with little to show for it except a degree knowingly took a risk, their gamble didn't pay out, and now they're living with the consequences; this is called capitalism. It seemed to me that you think that's fine?

On the other hand, you're also dismissing the notion that you should make your educational choices purely based on your career prospects once you're done.*

I'm not sure how to square those two positions. Did I misunderstand something?

--------
*as an aside, I'm with you there; and even if you do do that, it doesn't solve the problem of people who make decisions based on the wrong information or those who get caught out when the job market shifts, like the indebted American graduates from various law programs whose numbers apparently outnumber the available jobs by an order of magnitude or more.

My point is that people should be free to choose.  If they want to take the gamble that a high priced education at a top rated university is going to pay off then they should be able to choose that.  The alternative is for that State to step in and regulate education cost.  History has shown in this province and elsewhere that such a move is disasterous and hurts everyone.  One would hope that people would see over priced educations for what they are - but that is the market for you.

I do think that university education should be not take primarily with career aspirations in mind.  Imo it is the one chance a person has to fully explore their academic interests.  That may well lead to great career opportunites - and often does.

I dont see anything inconsistent with those two views.  Others are willing to make choices I would not make and that I will guide my kids away from making.  But I cannot say that because I think they are wrong choices that they are objectively wrong or silly the way others here seem to think - well ok only really Garbon.

But I do think the OP cannot complain now that she made her gamble and lost - which is perhaps Valmy's point.

[MadImmortalMan]

Miami (OH) is an excellent school BTW. That's nothing to scoff at. It's not like she went to Bowling Green or Toledo.


And Jaya--The military is certainly an option, but no different than any other profession really. Many if not most employers offer some sort of tuition assistance like the military does. Perhaps the point should be more along the lines of getting out in the workforce first for a while before committing to an educational choice. Or simply altering the character of the experience entirely. Why do we need to go live at a university anymore? Why must it take 4 years? How much of it can be replaced by technology rather than brick and mortar, and do we need so many teachers once that happens?

[crazy canuck]

BTW CC, do you prefer the Canadian post-secondary setup or the American one?

It is hard to compare.  The good Canadian schools are a bit of a hybrid between the US state and private institutions.  We get government funding but large chunks of the budget (particularly the building budget) comes from donors.  But the kinds of donations Canadian universities recieve pale in comparison to the major US schools.

After comparing the various US and UK options I would be quite happy for the boys to attend a good Canadian school as I think the quality of education is at least equivalent and probably better than most other options.

On the whole I think we got it right.  But it wasnt through any good planning.  Its just that Canada didnt have the same kind of donors the US had to set up private universities in the early days.

[garbon]

well ok only really Garbon.

When you say things like "really" you're supposed to actually be representing the views of the person mentioned.

[Josquius]

Yeah ok that is not what I am saying but there is a way do it while giving yourself crippling debt and ways to do it where you don't.  Be smart don't be an idiot.  But I thought you just said you should use college to delay your life and goof off and not because you picked a path you want to pursue.

I didnt say you should, I said some people do.

That would be concerning Tyr, if it were remotely true.

Luckily, it mostly is not, and hence largely irrelevant.

How?
A lot of people here have been saying not to go to a pricey uni and to instead go somewhere cheaper.
Going to the best school you can should never be a gamble, it should be just plain common sense, that money rears its head  even with regards to living costs is already enough of an impediment, but that tuition would be such a major concern....its just wrong.

[Grey Fox]

Tyr, don't. This is a waste of your time.

[Caliga]

I believe this is her so she got a BA but I don't know in what:

http://www.miami.muohio.edu/cdp_lists/pdfs/12_09/Commence_Ohio.pdf

Katherine Elizabeth Brotherton

She's a librarian.

[Darth Wagtaros]

I believe this is her so she got a BA but I don't know in what:

http://www.miami.muohio.edu/cdp_lists/pdfs/12_09/Commence_Ohio.pdf

Katherine Elizabeth Brotherton

She's a librarian.

Librarians make tons of money. If I had to do it all over again I'd have gotten a Masters in Library Science. 

[Caliga]

Apparently this one doesn't.

[OttoVonBismarck]

I'm usually all about making fun of people who got silly degrees and super indebted, but to be honest I feel it's really misplaced. Most of these people are simply being ignorant at a time in their lives when basically everyone is ignorant. And truthfully the decisions they have made are not materially different from the generation before, save for one big exception: the massive debt.

In the 70s and 80s people who wanted to become solidly middle class, maybe even have a chance at working their way into an upper class lifestyle, went to college. They got degrees in all kinds of things, B.A.s in Economics, English Literature, Sociology, History, B.S. in Physics, Geology, even more "practical" degrees like Business Administration and Accounting. But you know what happened next? They got good jobs, they became mid level managers at Fortune 500 companies, bank managers, etc. Just a few generations ago, having any college education was such a big bonus that you could get hired by Proctor & Gamble as an introductory level manager just off the fact you graduated college. Having an English degree didn't make you unhireable for such a role. In fact if you ever read about the backgrounds of some CEOs of major Fortune 500 companies today, many of them are guys in their 50s-60s whose undegraduate degrees were in something "silly" like English or History. [That is slightly off point, as when talking about high level CEOs you're talking about 1%er types who got those "silly" degrees from Harvard and Princeton and also probably have their MBAs and / or J.D.s.]

To all the blue collar types who lived through that time and had children, and even the white collar types, they grew up basically thinking "college = good job." By and large their understanding of the system is lacking, and they only pass on to their children the importance of going to college, not everything else. Back in that generation, college was much less expensive per capita. If you didn't have scholarships or wealthy parents you did go into debt, and some people took a decade or more to pay it off...but it was "reasonable."

Now, it is so easy to pay so much for tuition, and thus go so far into debt, that even if you get a good job it can be almost impossible to pay off. At loan balances like the 25-year old mentioned, with some student loan interest rates 6.5% even up to 9.5% (some loans issued by Sallie Mae and other non-FAFSA lenders actually are that high) you could be looking at $1200 a month in payments. Imagine a student graduating and getting a $55,000 a year job--great starting pay for someone with a four year degree (basically middle class income), after taxes they will only be bringing home something like $3500 a month $1200 of which is going to repay student debt? That is essentially an intolerable ratio unlike anything seen in prior generations.

For those who do not immediately go into jobs that allow them to make payments, they enter years of forbearance--during which interest continually accumulates. That can essentially make the student loan impossible to ever pay off without the borrower essentially becoming wealthy.

That's the other thing, the past was not roses and flowers. New college graduates have always had high unemployment rates. College always has paid off relative to high school graduates over the long term, but in the first few years college grad employment rates have never been "great." Some people network and get lucky and have a job lined up right out of college, but a decent number don't and there has always been a decent number that take six months to a year or even longer to find a good job out of college. That used to just be part of life, but now that fairly normal circumstance has crushing consequences because of the need to immediately be able to make massive student loan payments or face lifelong financial ruin.

There are absolutely, 100% ways around it, but it involves on kids being educated about realities that the companies issuing loans and the universities aren't interested in teaching students about. Oh, and in case any of you missed it the "private" student loan industry in the United States is almost non-existent now, having been almost entirely Federalized. So this isn't just Bank of America and Chase on the hook, while private lenders still hold billions in student loan debt, almost all new issue student loans since the 2008 market collapse have been made by Uncle Sam. (And the biggest player still in the private market is Sallie Mae, who is about as likely to never be taken back over by the government as we were to not bail out Freddie Mac and Fannie Mae which.)

The world is so different now, that the best advice kids from non-wealthy families can give students is this:

1. If you're seriously, seriously, seriously interested in becoming an Academic, or a high power lawyer, skip this section.

2. If you want to be anything else, go to a State school. There are many that are very, very good. If the one you really want to go to is in another state, move there and work for one year to get in-state tuition prior to starting. Work at Denny's or McDonald's, they're still hiring. Parents, feel free to subsidize this as it is a great ROI and probably teaches kids a few things about life.

3. If you absolutely must go private, recognize some actually are affordable. Just as a crazy example some people may be unaware of, Harvard after all the grants and discounts they give to people of lower income levels can be more affordable that out-of-state tuition at some of the better public schools. But if you can't go private without the massive tuition, don't do it.

4. As much of your degree as possible should be taken at community college, which is always much, much cheaper. You can even in many cases take entire years at community colleges, some of which feed into some of the most prestigious four year public schools in the country. Even if you do not go that route there is virtually no reason not to go to community college in the summer and etc to speed graduation and load up on general education credits.

5. It is a myth and a lie that you should not work at all during college. College is easy and anyone should be able to take 12-15 hours a semester while still working part time. Use this part time money to subsidize living expenses, don't take out tens of thousands of dollars to live in the trendiest apartments on campus, that is madness.

6. "It takes everyone 5 years" is for stupid people. It is easy to graduate in 4 years and doable in 3.5 for many, many majors if you take summer courses. Universities benefit immensely from 5th year seniors who pay just as much tuition in their 5th year to get the same degree someone who does it in 3.5 or 4 does.

If you are serious about going into academia or want to be a big shot at a big law firm, that's basically the only career where undergraduate degree really matters. Academic programs are big on referrals from professors and networking, and each field has flagship schools that serious doctoral candidates are expected to come from. But you need to be 100% aware that academia is a field almost no one succeeds in, it has decent payoffs but almost no one succeeds in them.

Likewise if you want to be the next big time lawyer, you have to go to a prestigious school, a top 10 law school, and graduate high in your class. Almost everyone else can follow the advice above and live happily ever after.

[OttoVonBismarck]

On the issue of becoming a lawyer, I suspect the tuition is so different in America Canadian impressions are essentially useless. It's possible as a middle class kid who isn't funded by mommy and daddy to come out of undergrad with a reasonable $15-20k in debt. But it is nigh impossible to get out of law school without being over $100k in, and many will be $150k or more in debt. Joining the military is one of the few ways I can immediately think of you can get out of that easily.

Lawyer income is still good in America, with median pay in the $115k+ range, but it has a lot more variance than medicine (which is the far more lucrative profession on average.) The problem with that median income, is it takes years to get to the median for an average law student recently graduating. Most people who go into law school in America are not told that the six-figure out of school jobs almost all go to kids at the extreme top of their class in normal law schools or in the top 30-40% at the super-prestigious law schools. Everyone else is fighting desperate for $60-80k out of school, and some will end up making $40k a year working in some hell hole field like social security benefit law (which has legal caps on payouts to the representing attorneys making it extremely bad to be an associate at one of those firms.)

Also, the median income for lawyers in America doesn't factor in the large number of people with J.D.s who are not gainfully employed as lawyers. I don't mean the CEOs who have a J.D. like Mitt Romney but have never practiced law, but rather the J.D.s working at Barnes & Noble who drink themselves to sleep every night when they think about having to pay back six figures in debt on a $9 / hour wage.

Law in America is one of those fields that, again, the experiences of prior generations has lead to an improper perspective for the present generation. Getting your J.D. used to be a good shot at basically becoming one of the 1%, but these days it compares unfavorably in risk v reward to becoming say, an engineer or just a regular B.S./B.A. holder. Especially if you follow my above advice on doing undergrad. The seeming guarantee of joining the 1%, combined with the fact medical school is inordinately harder than law school (which virtually any idiot can and does graduate if they choose) has attracted far too many people into that path in America dooming an entire generation of fools into huge debt for no returns in their lifetimes.

[Valmy]

but that tuition would be such a major concern....its just wrong.

Maybe but that is just how it is these days for whatever reason.

[Valmy]

Tyr, don't. This is a waste of your time.

How is that?  I mean more than any other post on Languish.

[OttoVonBismarck]

Medical school still almost always pays off, though. Speaking from personal experience (I started dating my wife when she was in medical school), virtually everyone who gets into medical school graduates and passes their boards. This is not because medical school is easy, but because (for various reasons) we have a very small number of open spots each year at American medical schools. This means it is extremely hard to get in, the hardest part about med school really is admissions. If you don't have at least a 3.85 then you need to get a second degree or a graduate degree to come back with a higher GPA. (Or you can go to the Caribbean...there are four Caribbean medical schools that allow you to become licensed in the United States and that admit at lower standards.) If you realistically want in you really need to plan on getting a 4.0 undergrad and doing very well on the admissions test.

Once you get in, the first two years are hellish on studying. The second two years you actually make some money but you work a lot and still study a lot. After graduating it is virtually unheard of to not immediately begin making good money. At least $100,000. It mike take a few years to really ratchet it up, but unless you really desperately want to be a PCP you can easily be making $150-225k/yr just as a guy with an M.D. and no specialization working in a hospital.

PCP is a bit of a different world, and people that want to go that route and work in rural areas might not even clear $100k...but that is basically a lifestyle decision. It is so much so that the lack of rural doctors has actually lead to many states and communities subsidizing rural medicine such that even rural PCPs now make good money in some places.

If you have the aptitude to actually go into surgery or a specialty after medical school, the money gets unreal. Even non-surgical specialties like dermatology or pathology you can be talking easy $300k+ a year. People that go into one of the higher paying surgical specialties and get board certified can legitimately make $600k/year, at which point $250k in debt is a joke as you'll own multiple houses that cost more than that. There are surgeons who work with my wife who make $650k+ for the work they do as surgeons, and then lecture part time and other random stuff like that and clear another $100k off jobs that they only do a few hours a month.

If you aren't already part of the elite, that really is the best, most realistic way you have of becoming ultra wealthy. But even if you lack the drive, aptitude, and intelligence to become a surgical specialist you still will have no problems paying off your medical school loans by your 40s as a PCP, and then you can work for 15 years and retire at 55 with $5m in the bank just by living smart (most doctors don't, though...but most doctors strangely really enjoy their jobs and work until they fall over dead.)

[Valmy]

If you are serious about going into academia or want to be a big shot at a big law firm, that's basically the only career where undergraduate degree really matters.

Gosh I hope not or I am going to be really sad once I finish my engineering degree.