What's the deal with student loans?

[Gerard]

A few thoughts:
1. The ratio of good to bad schools varies by country (and perhaps by state). Throw out the shit schools (many religiously-based ones, many many for-profits), accept that you can't afford the Super Elite ones, and look really hard at going to the closest one that's left.
2. You should be able to squeak through grad school without building up toooo much more debt. Schools need grad students, to do the work they used to pay faculty for.
3. Even so-so schools are often very good at a couple of things. Read, find out. See if you can find by-programme acceptance rates as a hint. My undergrad school (Concordia in Montreal) is the poor cousin to McGill, but it has excellent programmes in journalism, TESL, and visual arts.
4. Don't move for undergrad if you can help it, but definitely consider moving for grad school, including moving out of country. For example, graduate tuition at the place I teach (a middle-of-the-pack Canadian university) is about $900 a semester for international students.

[Self-employed-swami]

A few thoughts:
4. Don't move for undergrad if you can help it, but definitely consider moving for grad school, including moving out of country. For example, graduate tuition at the place I teach (a middle-of-the-pack Canadian university) is about $900 a semester for international students.

Can I ask what grad school that is?

[JString]

There are a lot of things at work here.

Easy access to loans HAS contributed to the increase in tuition.  But even more pervasive is the ideal that is jammed down every kids throat: "You have to go to college to succeed, no matter what, no matter what it takes... and the bigger the name of the school the better."

I went to undergraduate college from 99-03. It was an out-of-state public school, and my parents had no money to give me.  I ended up with roughly $80k in loans.  I will tell you that for me, and for many other kids out there, they have no concept of what that sort of debt does to their day-to-day quality of life, or what sort of burden it is.  They simply know that they need to get loans to pay for school.

I consider myself lucky.  I had $80k in loans, but a starting salary of $55k.  So, a debt-to-income of 1.45x.  I'm seeing more and more examples of kids today coming out with $100k+ loans, for a job getting them $30k/yr.  That is just poor planning.

There are a lot of things driving this problem.  Not to sound like a talking point on a talkshow or anything, but I truly believe that this is the next "bubble" in the economy... with the problem that it can't actually burst, because this debt can't be bankrupted away.

Yes, exactly.  Of course we know we're taking out debt, but we have no frame of reference for what that debt will mean, and we're told we have to go to college.  I was the first in my family to attend college, and they were so excited that I got into the best schools - of course I would go, even with loans.  I wish I wish I wish I knew that there were other options, that a state school was just as good, what student loan debt would mean on the other side...but those are questions a 17-year-old doesn't know to ask. 

[JString]

There are a lot of things at work here.

I think you are right -- a lot of things contributing, including the factors put forth by others in the discussion. It seems the primary problem is students not going in with their eyes open. It is really hard for me to imagine leaving college with $100k+, 200k+ in loans. You had really better have a solid game plan for earning a lot of $$$ when you get out to have that kind of debt hanging over you.

I wonder if students/parents don't understand the federal work study program and always opt for loans instead. Work study jobs pay a ridiculously high amount because they are subsidized. When I was in school, I got paid about triple what I would have earned in a non-work study job, and the jobs themselves must be designed to give you good experience for when you graduate (i.e., they are not service jobs in fast food, they are usually semi-professional positions, internships, or jobs in labs, etc.). The board advertising the vacancies was always full of unfilled positions.

Students today really should look into it! Rather than 100% in loans, I took about 85% in work study, and 15% in loans. I only had to work 10-15 hours a week getting great experience that helped after graduation, and therefore owed only about $4000-5000 when I finished.

I paid $40K per year for a private university 2002-06, and my work-study portion of my package was only $2000 per semester (combo loans, scholarships, grants, and work-study).  You can only work up to the max in your package, and package is determined based on a lot of things (for example - they included my deadbeat dad's income, 3x my mom's, in my family income even though he abandoned my family and didn't pay a cent - so I didn't qualify for full-ride need-based scholarships).

[JString]

Many of my friends racked up huge student loans since that's the norm. They weren't able to find a job when they graduated so then they went to grad school. I just can't imagine how far into debt they are! Part of the problem is that these massive student loans are considered normal. These students haven't been told there's other options when it comes to paying for school.

To be fair, huge student loans are not the norm. Median student debt owed is around $23K.  Roughly three percent of borrowers owe more than $100K.  A lot of the media stories on student loans seem to focus on the folks with more than $100K in debt incurred in programs other than med school, things like a master's degree in social work or divinity which may lead to admirable professions but ones which tend not to pay well. 

Depends on the profession.  Nearly half of lawyers and over half of doctors have more than $100K.

[decisionprof]

Getting in to this discussion kind of late but I am a prof at a small liberal arts college.  My Doctorate is in Leadership with a concentration in Decision Analysis.  I certainly see what everyone is saying and would like to do a case study to see if providing families with better decision-making skills would help with the student loan issue.  Based on what I can see, the private schools do a tremendous "sell job" to students and their parents.  Students often get financial assistance for tuition, but the room/board and many, many other fees (and books) alone can cost more than everything combined at a state school.  In the end, it is the student & family decision, but there is a relatively simple process (not just "pros & cons") that can be followed so that at least they are well aware of the choices they are making.  (And I am a FIRM believer that college is a family decision if the student is not paying their own way...)  Just wondering if people out there think that students and parents might be interested.  I have a junior in high school and we will be starting this process ourselves early in 2013.  Maybe there are some MMM followers who would like to join in.

[Nords]

Our daughter's a college junior this year.  Over the last couple years, she's found that several scholarships (especially in the $500-$1000 range) go begging.  Fill out a website application, churn out an essay in an hour or two and upload it, then get a check in a couple months.  The little-known scholarships tend to be endowments set up by alumni or local chapters of the professional societies and they're just not very well publicized.  The national scholarship search websites can help, but students should ask the college financial aid office for a complete list of all their local scholarships... and start writing.

One of her most entertaining moves has been giving campus tours for $12/hour.  (She'd pay them to do it, so she feels the money is just bonus.)  It's taught her public-speaking skills, people skills, thinking on her feet (literally), and how to tactfully answer impromptu questions.  (She's also become extraordinarily skilled at walking backwards, although that's more of a party trick.)  Now she views her discretionary spending through the lens of "How many tours do I want to give to be able to buy this?"

Her university's campus dorms don't have enough room for all the students, so a large minority of the juniors typically get "kicked off campus".  This led to major angst and unhappiness and drama as our daughter's decision time approached, but somewhat to everyone's surprise it's turned out to be a great deal.  She rooms with two other students in a 2BR/2BA apartment in one of America's largest cities only a couple miles off campus... with more space & amenities for less monthly expense than the dorm.  (Of course she commutes by bicycle.)  She's even buying and cooking her own food for less than the cost of the servery's meal plan.  Best of all, she's not dealing with the drunks and the stoners and the partiers and the midwatch fire alarms... and whatever else she hasn't felt like sharing with us. 

She's on a Navy ROTC scholarship for tuition & fees, so we pay "just" room & board (and some textbook/printing fees).  To prevent this off-campus move from turning into a lifestyle gimme grab, we told her that we'd pay her the room & board money that we'd normally pay to the college.  The catch was that she had to manage her budget on only two lump-sum payments a year, just like the college used to bill us.  She could live large and eat cheap, or live cheap and eat out every day, or figure out a third option.  She also had to stretch the budget to fit the entire year, not just the academic semester calendar.  Whatever she decides to do, she gets to keep whatever funds she didn't use. 

So this year she's learned to:
- seek and set up an off-campus apartment 
- parse the paragraphs of a lease
- arrange for utilities
- negotiate cost-sharing with roommates
- recruit short-term guest roommates during summers/holidays
- dumpster dive procure frugal furniture
- DIY home improvement, maintenance, repairs
- buy food in bulk and practice once-a-week cooking
- eat healthy (cheaper than junk food in the long run)
- become very organized (can't just run back to the dorm to retrieve a forgotten textbook)
- become very efficient with her time (can't just run back to the dorm to crash between classes)
- commute by bicycle (and contend with city drivers)
- take better care of her stuff (she lives out of a backpack)
- be more responsible for her personal security

... and, oh yeah, I think she's managed to attend a class or two on civil engineering.  I'm not sure.  Her grades are her business, not ours.

One of the fringe benefits is that she doesn't have to move out of the dorm and put her stuff in storage every May, then reverse the process in August.  I don't think she's ever going back to the dorm life.

She's accomplished a lot of growing up this year, and we're no longer parenting a teen-- we're coaching a young adult.  She's seen what some of her classmates have racked up in student loans, which has raised her self-awareness of her own budgeting & spending.  To the university's credit they're starting to promise families "a four-year degree with no student loans", but I'm not sure of the details. 

When our daughter starts to feel bummed by her first-world problems, she can consider coming home to Leeward Community College and working shifts at Zippy's her roommates' examples.  One is on a student visa from an Asian country and hasn't been home in nearly three years.  Her family's financial support for college was the one-way plane ticket-- the rest is up to her.  Our daughter's other roommate is an extremely talented musician (as in "top ten metropolitan orchestras") who practices 6-8 hours per day.  She expects to graduate to a very fulfilling life of music... and very low income.  She's paying for college on her own, too, and it involves a lot of work-study.  But she spends summers playing her instrument on street corners, and it's common for her to clear $100/hour.

Ironically, despite our daughter's nascent life skills, she takes great comfort in knowing that there'll be a job waiting for her when she graduates.

For those who feel that the American college system is fatally flawed both financially and academically, I have two questions: 
Why are so many foreign students coming here to study?  Our daughter's college's student body is over 25% international.
Why are so few Americans going abroad for four years of study?
In a rational capitalist society, you'd expect that at least the northern half of the U.S. would be spending their college dollars in Canada.  If they're not, then there must be some other reason that they're buying American.

In the end, it is the student & family decision, but there is a relatively simple process (not just "pros & cons") that can be followed so that at least they are well aware of the choices they are making.

You'd think that websites like College Board and College Confidential would already be all over this.

[liquidbanana]

I was 18 in 2002, so tuition was a lot less then. However, my mom married a dude with enough income that I didn't qualify for any need based aid, but I will still expected to pay for everything myself, which was fine to me.

However, I wasn't able to get a loan to even cover the full amount of tuition. I also didn't have the option for work study. I only had a few hundred of dollars per semester that I needed to pay out of pocket though, plus books. I worked over 40 hours a week at a customer service job and still struggled to pay those few extra hundred dollars on top of my housing, food and transportation costs. And I was definitely living frugally. I hear about people who worked their way through college paying for tuition out of pocket, but I really have no idea how they do it. If you can live with your parents, it may be doable, but with the tuition at most schools today, that almost seems impossible.

Another thing: I read these stories of people with liberal arts degrees complaining about being unemployed or working low wage jobs with debt to pay and my gut reaction is the laugh at them. Duh, you have a BA in English! Did you really think that was going to translate into enough income to cover thousands of dollars in debt and pay your rent on top of it?

But when I think about it, I almost did the same thing. My high school teachers and administrators make it seem like all you need to do is go to college, get good grades and a bachelor's degree in something you like and are good at and you will instantly be able to get a white collar job that will pay the bills. I really loved sociology, so I was encouraged to major in it. I thought, "oh, I will be a sociologist, whatever that is! They have a degree program for it so it must be a real job, right?" Now, that sounds about as idiotic as anything, but at 17, that is what I really thought due to the adults working in my high school.

So I enrolled in a public university and began working on a degree in sociology. Fortunately, during my first semester, I encountered many people with liberal arts degrees who were working in factories, customer service and fast food. Then it hit me: this degree is going to make me qualified to work at taco bell. It wasn't until this point that I realized what the job market was really like and that a sociology degree prepares you for graduate school and nothing else. I looked into the possibility of going to graduate school and it didn't seem feasible financially. At this point, I had no idea why I was taking out loans to pay for college other than for personal enrichment. I knew personal enrichment shouldn't cost so much, so I dropped out after my first semester, disillusioned and completely lost.

However, had I not encountered all those minimum wage workers with degrees during that first semester, I may have just blindly continued college and gotten a BA just to find out I was qualified to work in fast food. If I had been taking out huge loans to pay for the tuition costs of today, I would have been fucked. And I likely would be online bitching about it too.

So I sympathize with many of these young adults who have no idea what they are getting themselves into. Their biggest fault is blindly following the advice of their parents and teachers.

After I was not as stupid, I put off going to college until I found something affordable and translated into a job that justified the costs...which took me a long time. I finally found Western Governor's University. It's a public University that is mostly online, so it's cheaper. It costs about $6,000 a year. It's accredited and taken seriously by most employers, unlike most private online, so overall, it's a good deal.

[SwordGuy]

There is another situation at play with students attending public universities.  Theoretically a student should be able to graduate in four years.  But there have been such deep cuts at some of these schools that few sections of required courses are being offered.  One of my son's friends begged and cajoled to gain admission into a necessary class.  She was lucky but she reported that she knew students who were being forced to attend school for an additional semester through no fault of their own.  For this reason some of the private liberal arts schools are actually pitching parents that students will graduate in four years.

I went to college from 1975 to 1979 for my undergraduate.  The problem with courses not being offered when convenient to a student who didn't pay attention existed then.  No one warned students of this, they had to figure it out for themselves.  I was lucky and had friends who had started a year earlier, who had made friends with folks who had been there for several years.  So I saw in my first semester, at first hand, the problems this caused.

So, I went to school backwards.  I took every junior and senior course I could take as quickly as I could schedule it.  I put off the freshman courses whenever possible.  My last year was mostly freshman intro courses.

This was also possible because, unlike most of my fellow students in high school, I actually learned the material I was taught.  I didn't subscribe to the "it's cool to be ignorant" philosopy so prevalent then (and apparently, now).

And I NEVER trusted an advisor to figure out what I had to take.  I went thru the catalog requirements and made darn sure I had taken what I had to.

[chucklesmcgee]

Seems like a lot of the student loan horror stories involve people who took out absurdly-large (relative to future earning potential) loans, either to live comfortably while a student, or to attend an expensive big-name private school like Harvard or Yale instead of the local State U.

Harvard & Yale (as well as most of the rest of the Ivy League) are both quite affordable for those who can get in. The real trouble comes from going to a big-name school with a small endowment,. Law school today is also a terrible deal, as the tuition is extremely high and rarely offset with scholarships, and the employment prospects are not very good.

I second this. I graduated from Duke, and while my parents weren't poor by any means (I think $120k a year gross combined) financial aid still kicked in with an immediate and unrequested "scholarship" (AKA free cash money) of around $10-15k a semester. My parents had also saved for this and I had a few minor scholarships, so I think I graduated with $8k in debt, which they paid off over two years. My rather poor friend went to Duke after he learned that it would be cheaper to attend than his in-state public university after financial aid "adjustments". Hardly anyone pays sticker price at a top school unless you're making bank.

The people who run into the most debt I think are probably the ones who aren't the best at making decisions in the first place, like the sort of people who decide to go to a hippy-dippy ok-but-not great $50k/year small liberal arts college and major in history instead of going to their in-state public university because they "need a place to find themselves" and they'll be able to pay for it "because when there's a will there's a way".

Graduate school is also where people can really get reamed not at the top. PhD programs at the top all cover tuition and pay around $30k/year in stipends. Graduate programs at lame places charge you to attend and there are about 5 places that need someone with a degree in Pre-Columbian Sexuality and it's not your school. Professional schools usually don't have any sort of financial aid aside from loans, but the return on these degrees at the top more than justifies tuition. There's no cap on the number of newly MBAs or JDs though, so employers really discriminate and only draw from the top, no matter how good a student's performance. Every business wants a Harvard MBA, big law firms will pull people out of the top 10 or so law schools with $160k+ starting. It's the people who pay about the same tuition to go to the Southwest Kentucky School of Law and can't get a job as anything more than a traffic court attorney who get screwed. Medical schools have very high standards and keep a really tight cap on the number of MDs, so there's always a high demand no matter what school, though salaries might take a hit with Obamacare.

Personally I don't feel too badly for most people in these situations. It's not like any of this information was terribly secret, it was all laid out in front of them and they chose to go a certain route. No one made you go to that awful law school and rack up $200k in debt.

[grantmeaname]

I'm with you on the big picture message of the post, but with a couple quibbles.

Graduate school is also where people can really get reamed not at the top. PhD programs at the top all cover tuition and pay around $30k/year in stipends.

Depends on the program. Shitty engineering grad schools still pay you to go, and top 10 english grad schools are still paid out of the pocket. It doesn't matter if you're Charles Dickens, you're not getting your English degree paid for and $30k/year on the top.

Professional schools usually don't have any sort of financial aid aside from loans, but the return on these degrees at the top more than justifies tuition. There's no cap on the number of newly MBAs or JDs though, so employers really discriminate and only draw from the top, no matter how good a student's performance. Every business wants a Harvard MBA, big law firms will pull people out of the top 10 or so law schools with $160k+ starting.

That used to be true, but it really isn't anymore for law schools. The top schools for employmeny and the top schools for academic ranking don't overlap exactly, and there's trouble gathering data in a consistent and repeatable manner. There are a couple top-10 law school grads in this community who don't paint a rosy picture of their peers' employment prospects, and then there's the stunning reporting fraud (below) to further muddy the picture.

*shrug* maybe it's still true for MBA programs.

Personally I don't feel too badly for most people in these situations. It's not like any of this information was terribly secret, it was all laid out in front of them and they chose to go a certain route. No one made you go to that awful law school and rack up $200k in debt.

You must have a very broad definition of "all laid out in front of them", or you must not be informed of the widespread fraudulent reporting of law school employment numbers. Even setting that aside for the minute, there's a lot of uncertainty anytime you're predicting what the job market 5-15 years in the future will be like, and there's enough evidence that the legal sector is growing to convince almost anyone who wants to believe that it's true.

[chucklesmcgee]

I'm with you on the big picture message of the post, but with a couple quibbles.

Fair points.

The top schools for employment and the top schools for academic ranking don't overlap exactly, and there's trouble gathering data in a consistent and repeatable manner.

Your link doesn't really show they don't overlap. The top 10 schools for career prospects are all in the top 12 academically. Sure it's not 1:1, but we're splitting hairs over 95%-99% having median salaries of $130k to $160k 9 months out, and the difference in employment "ranking" can also be attributed to differences in student's career direction- Yale for instance is much more oriented towards academic pursuits, government and public service and grads won't be making the most- but these students also get their loans mitigated as a result. My point was that a degree from a top 14 school is usually well worth it, certainly compared to third tier schools where fewer than half the class can even get any sort of legal job despite almost identical tuition. True, if you're at the bottom of the class anywhere your job prospects will not be stellar, but that's generally an almost universal truth.
[/quote]
You must have a very broad definition of "all laid out in front of them", or you must not be informed of the widespread fraudulent reporting of law school employment numbers

I am informed of the widespread fraud in reporting law school employment numbers which I take to be very much laid out in front of prospective students at this point. Dozens upon dozens of articles have been published about the fraud in law school employment numbers, the poor state of the job market, the subpar quality of diploma-like law schools and the desperate state many law students are in from these schools AND people still chose to attend. I suppose I do have a lot of sympathy for students who went to a law school because of fudged numbers which weren't yet revealed to be fradulent. But when law schools are reporting 25% unemployment, bar passage rates of 30-60% and median salaries of $50k, all of which are probably still skewed in the school's favor, and people still decide to take on $100k+ in debt and kill 3 years, I just can't feel sorry.

[badassprof]

Actually, I went to a top  PhD program in English literature and had free tuition and a full stipend.  But you're right, there aren't many of those.

[pineapple]

I'm a graduating senior this year, and this topic has been on my mind quite a bit as I watch my friends solidify plans for after they graduate.  I have noticed a strange trend in the majors with growing popularity at my school, the trend being to choose new and exciting majors over more standard and generic majors.  I go to a large state flagship university, and it seems like my school adds new majors every year.  I know four student majoring in international studies, one with a focus in diplomacy, one with a focus on development, and two with a focus on cyber security and intelligence (a program which apparently  involves little to no programming).  I know a public policy major, a sexuality studies major, a neuroscience major, and an environmental engineering major.  I think students are drawn into choosing these majors because they believe they will set them apart, but for the most part, these majors are minimally quantitative, and more about theory and discussion than the development of skills. 

There are already so many history and psychology and English majors, but now it seems like the trend is to choose equally useless majors that sound more exciting.  My friend majoring in environmental engineering keeps going to job fairs, where 150+ companies are looking for interns and full-time employees in engineering, but no one is looking for someone with his major, and he fails to understand why a more common engineering degree is a better choice.  He just wants to save the environment with his work, and seems poorly informed of what his career opportunities might actually be. 

I've been told that college isn't a trade school, that it should be about learning for the sake of learning, but I think that perspective is a dying one.  I care much more about my ability to find a job after school than I do about becoming a "well-rounded citizen of the world" or whatever it is that college is supposed to transform me into.  I suspect that it is the students who feel differently that are the ones racking up debt to study journalism at Northwestern, or English at Emory. 

[YoungAndWise]

I guess I'll place my two cents in as well, being a graduating senior this year as well. For me, what I have seen is quite different from what pineapple is seeing (although my viewpoint my be skewed from the fact that most of the people I associate are usually quite smart, nonetheless). Most of friends are aiming for majors leading into healthcare industry, engineering jobs, along with other semi-sensible majors from what I've heard.

Also a majority of them are going to Texas A&M, a public college which is also a good idea for the most part.

However that being said the idea that the changing look at college as a a four-year trade-school instead of a place about becoming a better overall person is true, with the majority of sector growth and market need not being the humanities or soft sciences but instead the need being healthcare, construction, international relations, and so on.

[pineapple]

Most of my friends are also in practical majors like engineering, CS, and business, but I still thought it was notable that there seems to be a rising number of new majors universities are offering, many of which have seemingly poor career prospects.  I didn't mean to imply that the majority of my friends were in unusual majors, as that is certainly not the case. 

That said, the students I had in mind with obscure new majors were nearly all in Ohio State's honors program, so with ACT scores of 30+.  Plenty of smart people do not have necessarily practical aspirations, which is a shame in some cases, but not unexpected.   

[grantmeaname]

That said, the students I had in mind with obscure new majors were nearly all in Ohio State's honors program, so with ACT scores of 30+.  Plenty of smart people do not have necessarily practical aspirations, which is a shame in some cases, but not unexpected.

Hey, we should hang out sometime!

Regarding practical aspirations: I was an anthropology major until less than a year ago. If you're at the very top and willing to work hard, and you're in a moderately STEM-y major like anthro, you can at least get grad school paid for. You'll have to work a lot harder than in any other job that pays $30k, and it'll suck to graduate from a doctoral program to something like clinical trial design making $50k after 10 years of post-secondary education, but it's at least a less terrible idea than an average student going into the field.

[badassprof]

Well, it is all supply and demand. Believe it or not, one of my students just got a full ride at a top PhD program with full stipend to do Scandinavian Studies.  They need someone who teaches Swedish, which she can do. We'll see if there is a job for her when she gets done.

But I wonder in the end how much the degree ready matters--so much of it is about timing and place and TONS of luck. My partner got into biotech in the 1990s with a degree in music. In his first biotech job (which he found on craigslist) he made less than he made as a full time jazz musician. He has worked his butt off and is now in upper management at a big company making a nice living, even by SF standards.   I lucked out and landed a great tenure track job right out of college and transitioned to an even better job at just the right moment. Plenty of people, however, who aren't so lucky, even those who study practical things.  (I'm a Chaucer specialist--pretty wacky for a first generation college student, huh)?

[YoungAndWise]

Most of my friends are also in practical majors like engineering, CS, and business, but I still thought it was notable that there seems to be a rising number of new majors universities are offering, many of which have seemingly poor career prospects.  I didn't mean to imply that the majority of my friends were in unusual majors, as that is certainly not the case. 

That said, the students I had in mind with obscure new majors were nearly all in Ohio State's honors program, so with ACT scores of 30+.  Plenty of smart people do not have necessarily practical aspirations, which is a shame in some cases, but not unexpected.

Sadly that is true. Many brilliant, hard-working people go to waste.

EDIT: Scratch that. Eh I hate when I type things that come off as dickish.

@badassprof: Chaucer specialist?

[Nords]

Most of my friends are also in practical majors like engineering, CS, and business, but I still thought it was notable that there seems to be a rising number of new majors universities are offering, many of which have seemingly poor career prospects.  I didn't mean to imply that the majority of my friends were in unusual majors, as that is certainly not the case. 

That said, the students I had in mind with obscure new majors were nearly all in Ohio State's honors program, so with ACT scores of 30+.  Plenty of smart people do not have necessarily practical aspirations, which is a shame in some cases, but not unexpected.

Sadly that is true. Many brilliant, hard-working people go to waste.

Not all those who wander are lost!

[YoungAndWise]

Most of my friends are also in practical majors like engineering, CS, and business, but I still thought it was notable that there seems to be a rising number of new majors universities are offering, many of which have seemingly poor career prospects.  I didn't mean to imply that the majority of my friends were in unusual majors, as that is certainly not the case. 

That said, the students I had in mind with obscure new majors were nearly all in Ohio State's honors program, so with ACT scores of 30+.  Plenty of smart people do not have necessarily practical aspirations, which is a shame in some cases, but not unexpected.

Sadly that is true. Many brilliant, hard-working people go to waste.

Not all those who wander are lost!

I kind of said that wrong.

I should have said go int areas that are not exactly in high need however it is their choice.

[liquidbanana]

Not all those who wander are lost!
[/quote]

I agree. I'm a wanderer. But wandering puts you up to face more obstacles, generally, so people should be expecting that! :)

[badassprof]

Yep, Chaucer and also Shakespeare.  I suppose some might call that a waste, but I think it is a kickass job to teach literature and to get paid 90000+ to do it. To be witness to that moment when the lightbulb goes off for people is sweet.  But again, I have a sweet deal that not everyone gets.  Same with my partner too. Part of it is also where you live. Here in the Bay area, there are a lot of people who work in high tech and other well-paying jobs with "impractical" degrees.  Critical thinking skills are pretty highly valued here.

[Jamesqf]

Yep, Chaucer and also Shakespeare.  I suppose some might call that a waste, but I think it is a kickass job to teach literature and to get paid 90000+ to do it. To be witness to that moment when the lightbulb goes off for people is sweet.

Just FYI, it is perfectly possible to have degrees - even advanced ones - in STEM fields, and still enjoy Shakespeare.  The Arkangel recordings are some of my favorite listening for long drives.

[badassprof]

Of course!  I have tons of students from these fields in my classes!!

[pineapple]

That said, the students I had in mind with obscure new majors were nearly all in Ohio State's honors program, so with ACT scores of 30+.  Plenty of smart people do not have necessarily practical aspirations, which is a shame in some cases, but not unexpected.

Hey, we should hang out sometime!

Regarding practical aspirations: I was an anthropology major until less than a year ago. If you're at the very top and willing to work hard, and you're in a moderately STEM-y major like anthro, you can at least get grad school paid for. You'll have to work a lot harder than in any other job that pays $30k, and it'll suck to graduate from a doctoral program to something like clinical trial design making $50k after 10 years of post-secondary education, but it's at least a less terrible idea than an average student going into the field.

I won't be living in Columbus for much longer, unfortunately.  I have really come to love this city, but my job after I graduate will be elsewhere. 

I am a little amused that you consider Anthropology to be a STEM-y major.  One of  my roommates is about to graduate with a degree in anthropology from OSU, and I would characterize her degree as being a social science degree.  While "STEM" includes sciences, I suppose I draw a distinction between science majors that are in-demand and that lead to high pay, and everything else.  I've read that the most popular STEM major is actually biology, which is almost strange being that bio majors have worse job and pay prospects out of nearly all other STEM majors, like those in engineering, CS, IT/ MIS, and math. 

I do have friends who have been able to go to grad school on stipends, but stipends are more for students seeking a PhD than a Masters degree, right?  I doubt I would be able to get a stipend to get an MBA or a masters in some engineering discipline, and I would be uninterested in staying in school until I was nearly 30, even with a stipend. 

Even getting a PhD for free in my field would mean I would not hold a private-sector job until I was 28-30, which would seriously delay my savings and all the things I want to do with my life that require money, like buying a house.  By that logic alone, I would be uninterested in getting a PhD even with a stipend.  5-7 years after undergrad is a long time to live as a student. 

[Worsted Skeins]

I do have friends who have been able to go to grad school on stipends, but stipends are more for students seeking a PhD than a Masters degree, right?  I doubt I would be able to get a stipend to get an MBA or a masters in some engineering discipline, and I would be uninterested in staying in school until I was nearly 30, even with a stipend. 

Depends on the field.  I have a master's degree in Mathematics which was funded by a stipend.  I worked as a TA as did all of my colleagues except those with minimal English skills. 

I have never heard of a stipend for an MBA unless it is coming from a corporation that funds employees further education.  A master's degree in an engineering field can be beneficial--but a PE may mean more.

Even getting a PhD for free in my field would mean I would not hold a private-sector job until I was 28-30, which would seriously delay my savings and all the things I want to do with my life that require money, like buying a house.  By that logic alone, I would be uninterested in getting a PhD even with a stipend.  5-7 years after undergrad is a long time to live as a student.

In some fields, graduate or professional work is an investment.  This may not be true in yours.  For example, my husband the cyber geek began earning a higher base pay in the private sector because of his master's degree.  My degree enabled me to teach at the post-secondary level (although ironically I am not considered certified to teach in high school.) 

Having lived a few more decades than some of the posters on this thread has not necessarily made me wiser but I will say that I am less inclined to jump to assumptions.  When I was an undergrad, there were no computer science degrees.  At that point in time, companies like IBM hired liberal arts students because they knew how to think.  Colleges cannot prepare students for technologies that have not yet been invented.  We return to the age old question of the purpose of college:  education or trade school.

Wackadoo that I am, I place more value on an English degree than a business degree.  The latter often focuses on trends that go out of fashion.  As an advocate of education in general, I made a point of saving for my son's college education so that he does not have to take on debt.  And I am a supportive parent who thinks that he should follow his passions and not wager on employment statistics.  Of course a comfortable affluence allows us to make this decision.

[fruplicity]

I know I'm late to the party but I wanted to chip in as a manager of student loans at a 2-year public college... Rangifier's answer is closest to what I see every day:

Each year you log onto a website. It tells you how much you can borrow. There is no recommended amount, just the maximum you can get. Students punch in a few numbers here and a while later a check magically appears in the mail. Year 2 comes and it's time to fill out that form again. Boy you sure did enjoy that extra cash, and hey, no one's given you any grief over how you spent it so lets get a little more this year.

I really think over-borrowing is based on a lack of exposure to culture and communication about financing college. There is a fine line between personal responsibility and having access to the tools and ideas that foster that responsibility. I know MMM leans towards individual over collective and community responsibility, and that is one area where I don't always agree...

It's actually illegal for me to deny a student's request to max out their loans (keeping within other federal regulations of course). I have the capacity to counsel students who talk to me in person, and I always have a conversation with students trying to borrow private loans, but it would be impossible for me (even with colleagues' help) to personally counsel every individual student borrowing loans. I also cannot legally refuse a student going through bankruptcy the "right" to borrow more student loans (ISN'T THAT RIDICULOUS!!??)

Another small but ridiculous issue is the vocabulary - schools cannot hold excess funds for students, so whether they have enough grants/scholarships OR loans OR both to have leftover $$ after paying tuition, any money they get back from the school is called a "refund". It's rare that a student hearing from the school that they're getting a "refund" check actually asks or understands what the source of that money is. I'd like to change the vocab to be "excess" checks instead.

In my ideal world my sole job would truly be a loan counselor who works specifically and personally with the population of students borrowing or seeking to borrow loans. In the real world of financial aid, a "loan coordinator's" job is really to make sure the school's financial aid software is correctly processing all the loans that have already been borrowed and making sure the school is following federal regulations - in other words working for the school and government's benefit, not the student's.

Yes I'm currently volunteering to actually work on the students' behalf as well as looking for other work...

[Jamesqf]

Even getting a PhD for free in my field would mean I would not hold a private-sector job until I was 28-30, which would seriously delay my savings and all the things I want to do with my life that require money, like buying a house.  By that logic alone, I would be uninterested in getting a PhD even with a stipend.  5-7 years after undergrad is a long time to live as a student.

There's no reason you have to do it all in one solid block.  I didn't get a MS until about 15 years after the BS, and in that time had bought a house and socked away quite a bit in savings.  Then add almost a decade (so far) between MS and PhD, in which (minimal) financial independence, remunerative consulting, and dissertation research meant that my main problem was the limited number of hours in a day...

So find a job in your field, with (if you can manage it) an employer who will encourage continuing education.  Take a course or two a semester, then in a few years you'll be most of the way to the degree, and will have experience & resources to set you apart from your student-track classmates.

[pineapple]

Even getting a PhD for free in my field would mean I would not hold a private-sector job until I was 28-30, which would seriously delay my savings and all the things I want to do with my life that require money, like buying a house.  By that logic alone, I would be uninterested in getting a PhD even with a stipend.  5-7 years after undergrad is a long time to live as a student.

There's no reason you have to do it all in one solid block.  I didn't get a MS until about 15 years after the BS, and in that time had bought a house and socked away quite a bit in savings.  Then add almost a decade (so far) between MS and PhD, in which (minimal) financial independence, remunerative consulting, and dissertation research meant that my main problem was the limited number of hours in a day...

So find a job in your field, with (if you can manage it) an employer who will encourage continuing education.  Take a course or two a semester, then in a few years you'll be most of the way to the degree, and will have experience & resources to set you apart from your student-track classmates.

I think my future employer does offer some tuition reimbursement for any additional education I might pursue, but I hadn't really thought about the possibility of getting a masters more than a few years into my career.  Fifteen years into my career seems a long way off, being that I'm still in undergrad.  I suppose that my future interest in grad school will greatly depend on my career trajectory, and whether or not I think more education would put me in a better position to pursue the work I want.  I'm hoping I won't need to go back to school for the sake of my career, not so much because I don't want to pay for it, but because I don't really enjoy taking classes and doing assignments.  Four years was enough for me, I hope.   

[Nords]

I'm hoping I won't need to go back to school for the sake of my career, not so much because I don't want to pay for it, but because I don't really enjoy taking classes and doing assignments.  Four years was enough for me, I hope.

My masters thesis quenched my thirst for higher education...

I'd only pursue a higher degree if you're genuinely interested and your employer's willing to pay for it.

[grantmeaname]

I am a little amused that you consider Anthropology to be a STEM-y major.  One of  my roommates is about to graduate with a degree in anthropology from OSU, and I would characterize her degree as being a social science degree.

OSU's Anthro department is very science-heavy. Most of the archaeologists do real-science archaeology, like surface wear analyses of artifacts with electron microscopes, environmental reconstruction based on fossilized pollen and charcoal, and geophysical analyses of sites. There are only two pure cultural anthropologists in the whole department, with one being a traditional social scientist and the other an economic anthropologist doing crazy-complex research largely about cattle disease epidemiology, with heavy legislative and GIS investigations as side projects of the research. The largest part of the department is the physical anthropologists: OSU's department has the leading anthro statistician in the nation, one of the three greatest bioarchaeologists alive today as its chair (bioarchaeology being skeletal analysis of trauma and disease at archaeological sites), a whole handful of human geneticists and human nutritionists with dual appointments in the med school, a primatologist and several paleontologists with dual appointments in the school of evolution and ecology... Point being, yes, it's real science. I guess I don't really consider it STEM-y, but STEM. It's real, hard science, and if you graduate from your anthro degree with three years working in an Anthro lab, you're just as well versed in science as any chemist or a geneticist who studied genetics in a different college.

While "STEM" includes sciences, I suppose I draw a distinction between science majors that are in-demand and that lead to high pay, and everything else.  I've read that the most popular STEM major is actually biology, which is almost strange being that bio majors have worse job and pay prospects out of nearly all other STEM majors, like those in engineering, CS, IT/ MIS, and math.

Certainly. That's one of the reasons I think STEM as a category seems pretty useless to me.

Even getting a PhD for free in my field would mean I would not hold a private-sector job until I was 28-30, which would seriously delay my savings and all the things I want to do with my life that require money, like buying a house.  By that logic alone, I would be uninterested in getting a PhD even with a stipend.  5-7 years after undergrad is a long time to live as a student.

I'm thinking about getting a PhD on the way to FI but after my 'stach is built up. It does take a really long time, though, and I may have better ideas by then.

[Jamesqf]

I'm hoping I won't need to go back to school for the sake of my career, not so much because I don't want to pay for it, but because I don't really enjoy taking classes and doing assignments.  Four years was enough for me, I hope.

Different strokes.  In my case it was just the other way around, postponing the advanced degrees until I had enough financial security that I could choose to work at things which interested me.  Oddly enough, I'm not the only one doing that.  Another guy in the same lab had made a considerable pile from a startup, sold out and retired in his mid-30s, then got bored and decided to go for a PhD in neurobiology 'cause it interested him.

[badassprof]

Jamesqf, I know someone who is doing the same thing.  Worked at a start up and made a bunch of money and now is doing a PhD in applied physics for fun.  (And applied physics IS fun)!!

[Jamesqf]

Yeah, I always figured that brains are a lot like bodies, in that if you let them sit around being idle (and worse, stuffing them with junk), they get flabby and then succumb to rot long before they'd naturally wear out.

[EngGirl]

Man am I happy that I earned my engineering degree at a Canadian university! With that said, our system can be pretty flawed too. For recent highschool grads (<4 years), access to grant money and reasonable student loans (@5.5%) are determined by your parents income.

Growing up, my parents told me that they would pay my way. When I showed them my first year's tuition (around 8000 dollars), they took a run for the hills and decided to give me squat. That was okay, because it taught me a lot about money. However, if they were poor, I'd been able to get my tuition covered by the government. Because my parents make a lot of money, the government gave me squat too.

I know kids who's parents didn't make a lot of money, but had saved for their education. Their parents were paying their way, AND the government was gifting them with tons of cash.

And then there were kids like me: no parental support, but because my parents made too much money, no government support either. As a result, I worked harder and came out of school poorer than the kids from modest backgrounds. 

[DoubleDown]

And then there were kids like me: no parental support, but because my parents made too much money, no government support either. As a result, I worked harder and came out of school poorer than the kids from modest backgrounds.

I feel for you, this is a big hole for many young students. The entire philosophical underpinnings of the financial aid system are:

1. The FAMILY (i.e., mostly parents) holds primary responsibility for paying for the student's education
2. The government (through grants, loans, and work-study) will make up the difference where the family is UNABLE to pay (not "unwilling" to pay)

So, students have a major problem when parents decide they "just won't pay." The financial aid system does not agree with those parents, and will not make up that difference (see Point 1). Need-based calculations continue to include the parents' income/assets, even when the parents decide not to pay. And the student suffers the consequences, as you did.

One little-known exception in the financial aid regulations are appeals based on special circumstances, such as declaring oneself "independent" of their parents. However, this is difficult to do, and requires more evidence than "my parents won't pay." It can be done though, and it's worth trying for students who really have been abandoned, financially speaking, by their parents. I was able to do this, and it made a HUGE difference.

Another really crappy outcome of need-based aid determinations: Frugal savers are totally penalized vs. wasteful spenders, because cash assets and home equity are considered in the equations, whereas cars, stereos, vacations, etc. are not. So a family who blows all their money on crap and has nothing to show for it savings-wise will fare very well in the need determination, whereas frugal savers who have foregone wasteful spending in order to carefully accrue assets typically end up getting nothing or very little when the need determination is made. Makes sense, huh?

[Worsted Skeins]

Another really crappy outcome of need-based aid determinations: Frugal savers are totally penalized vs. wasteful spenders, because cash assets and home equity are considered in the equations, whereas cars, stereos, vacations, etc. are not. So a family who blows all their money on crap and has nothing to show for it savings-wise will fare very well in the need determination, whereas frugal savers who have foregone wasteful spending in order to carefully accrue assets typically end up getting nothing or very little when the need determination is made. Makes sense, huh?

A clarification:  FAFSA does not consider parent's home equity but competitive colleges that use the CSS Profile (mostly privates) do.

Also, I am not convinced that savers are penalized.  People with no savings are expected to have saved for their kids' educations based on some formula involving current income.  Parents on my homeschool board with no savings and lots of debt have been stunned that they were expected to pony up.

When I was a student, it was much easier to become independent of one's parents financially.  Here are the questions FAFSA asks to determine whether or not a student is independent: 

    Were you born before January 1, 1989?
    As of today are you married?
    At the beginning of the 2012-2013 school year, will you be working on a master's or doctorate program (such as an MA, MBA, MD, JD, PhD, EdD, or graduate certificate, etc.)?
    Are you currently serving on active duty in the U.S. Armed Forces for purposes other than training?
    Are you a veteran of the U.S. Armed Forces?
    Do you have children who will receive more than half of their support from you between July 1, 2012 and June 30, 2013?
    Do you have dependents (other than your children or spouse) who live with you and who receive more than half of their support from you, now and through June 30, 2013?
    At any time since you turned age 13, were both your parents deceased, were you in foster care or were you a dependent or ward of the court?
    As determined by a court in your state of legal residence, are you or were you an emancipated minor?
    As determined by a court in your state of legal residence, are you or were you in legal guardianship?
    At any time on or after July 1, 2011, did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless?
    At any time on or after July 1, 2011, did the director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development determine that you were an unaccompanied youth who was homeless?
    At any time on or after July 1, 2011, did the director of a runaway or homeless youth basic center or transitional living program determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless?

[grantmeaname]

Man am I happy that I earned my engineering degree at a Canadian university! With that said, our system can be pretty flawed too. For recent highschool grads (<4 years), access to grant money and reasonable student loans (@5.5%) are determined by your parents income.

Maybe I'm missing something, but why are you glad that you went to a Canadian school? How is that any different from what happens in the US?

[DoubleDown]

Also, I am not convinced that savers are penalized.  People with no savings are expected to have saved for their kids' educations based on some formula involving current income.  Parents on my homeschool board with no savings and lots of debt have been stunned that they were expected to pony up.

I think your example actually helps demonstrate my point that savers are penalized, in the sense that the need determinations look only at recent/current income and assets.  Long term income and spending habits are ignored. Theoretically, a family could earn $200k/year for 10 years, blow it all on "stuff" with no savings, then drop their income to $50k for the one year prior to applying, and do very well in the determination of "need." Meanwhile a family who earned only $50k/year for those same ten years, but lived frugally while carefully saving up assets over that same period of time could end up qualifying for significantly less (or nothing) compared to the wasteful spenders because of their accumulated savings.

The experience of your homeschool board associates is almost certainly consistent with this -- as long as their current incomes are decent, they will be expected to contribute significantly towards the costs of education (as it should be, IMO). It's just somewhat of a shame that savings and assets count "against" you in the need determination compared to wasteful spenders. And to be fair, I'm not sure a better system could be devised.

It's just another example to me of our general society rewarding bad habits in some cases, like bailing out people who took home loans they had no business taking.

Speaking of homes, home equity seems to go in and out of consideration for need depending on the current legislation. Over the years it's gone back and forth, I trust that you that it's not currently used for federal need determinations. When I went to college, if parents had any substantial equity in their home, they would qualify for nothing. And it could easily go back into consideration again depending on the legislators of the day -- another way of penalizing folks who saved by carefully paying down their mortgages!

[Worsted Skeins]

Also, I am not convinced that savers are penalized.  People with no savings are expected to have saved for their kids' educations based on some formula involving current income.  Parents on my homeschool board with no savings and lots of debt have been stunned that they were expected to pony up.

I think your example actually helps demonstrate my point that savers are penalized, in the sense that the need determinations look only at recent/current income and assets.  Long term income and spending habits are ignored. Theoretically, a family could earn $200k/year for 10 years, blow it all on "stuff" with no savings, then drop their income to $50k for the one year prior to applying, and do very well in the determination of "need." Meanwhile a family who earned only $50k/year for those same ten years, but lived frugally while carefully saving up assets over that same period of time could end up qualifying for significantly less (or nothing) compared to the wasteful spenders because of their accumulated savings.

The experience of your homeschool board associates is almost certainly consistent with this -- as long as their current incomes are decent, they will be expected to contribute significantly towards the costs of education (as it should be, IMO). It's just somewhat of a shame that savings and assets count "against" you in the need determination compared to wasteful spenders. And to be fair, I'm not sure a better system could be devised.

It's just another example to me of our general society rewarding bad habits in some cases, like bailing out people who took home loans they had no business taking.

Speaking of homes, home equity seems to go in and out of consideration for need depending on the current legislation. Over the years it's gone back and forth, I trust that you that it's not currently used for federal need determinations. When I went to college, if parents had any substantial equity in their home, they would qualify for nothing. And it could easily go back into consideration again depending on the legislators of the day -- another way of penalizing folks who saved by carefully paying down their mortgages!

Points well made.

It is also worth noting that FAFSA can ask for one thing but each school can have a financial aid supplement asking for something else.  Home equity can enter the equation here.

I remember reading an article after the '08 crash that discussed whether parents would be able to use their homes as cash machines to pay for college educations.  There was an official from a private university who said that his school expected parents to do this.  Wow.  It just never occurred to this parent to consider such a step!

[grantmeaname]

I remember reading an article after the '08 crash that discussed whether parents would be able to use their homes as cash machines to pay for college educations.  There was an official from a private university who said that his school expected parents to do this.  Wow.  It just never occurred to this parent to consider such a step!

You must not be the target market. :)