Author Topic: Families Make Big Changes To Pay For College  (Read 4772 times)

The Fleetwood Project

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Families Make Big Changes To Pay For College
« on: August 04, 2012, 12:56:16 PM »
So I have been around since the inception or MMM.com, and have just recently begun posting. I saw this the other day and just had to share it. The whole entire story had me going "Are you kidding me?!?"

http://www.npr.org/2012/08/02/157657475/families-make-big-changes-to-pay-for-college

Let me know what you all think!


The sheer audacity that the mother has to let her daughter go out of state when cannot afford it is beyond me. I am still kind of mad about this >.<

Jamesqf

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Re: Families Make Big Changes To Pay For College
« Reply #1 on: August 04, 2012, 02:05:16 PM »
I was - well, maybe amused isn't quite the right word - by the mother who took out loans to qualify for a job paying $93K/year (instead of being unemployed), and complains because a third of take-home pay goes to service the loans.  Seems like she's still way ahead.  $93K base should give about $77K takehome (assuming married with one dependent), 2/3 of that is about $51K.  I could live quite comfortably on that.

Worsted Skeins

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Re: Families Make Big Changes To Pay For College
« Reply #2 on: August 04, 2012, 02:08:23 PM »
Stories like this drive me bonkers because they focus on the extreme and not the typical college student or his family.

There is an oft cited statistic that the average amount of student debt is about $25K.  What is not mentioned is that this average is the mean--the median is about $12.5K.  I am not trying to justify this debt, just pointing out that the young lady in the NPR story is far from today's typical student.  (Maybe journalists need to study statistics??)

What also astounds me is how it seems that so many people don't think about funding college until Johnny is maybe sixteen.  College is part of our family's ethos, so to speak.  So we started saving for our son's college education from birth.  He had fewer things than many of his peers but he is on track to graduate without debt thanks to substantial merit aid, our savings and his contributions.

Jamesqf

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Re: Families Make Big Changes To Pay For College
« Reply #3 on: August 04, 2012, 11:11:26 PM »
What is not mentioned is that this average is the mean--the median is about $12.5K.  I am not trying to justify this debt...

And why not?  Seems to me that investing $12.5K in raising one's potential annual salary by about that much per year over the course of a working life is a pretty darned good investment.

Worsted Skeins

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Re: Families Make Big Changes To Pay For College
« Reply #4 on: August 05, 2012, 04:52:25 AM »
What is not mentioned is that this average is the mean--the median is about $12.5K.  I am not trying to justify this debt...

And why not?  Seems to me that investing $12.5K in raising one's potential annual salary by about that much per year over the course of a working life is a pretty darned good investment.

Fair point.  I agree with your assessment that an investment in college often offers a great return.  Perhaps it would have been better to have said that each individual needs to determine an acceptable level of debt for his situation.

There is no one size fits all answer to college which also makes the attached comments to these sorts of articles irritating.  For example, the CC near me has more remedial than college transfer offerings.  They don't offer any math beyond Calc I, no Physics.  A student who wants to be an engineer would be better off at the state U from the get go--even if that meant assuming some debt...



The Fleetwood Project

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Re: Families Make Big Changes To Pay For College
« Reply #5 on: August 05, 2012, 10:42:15 AM »
One thing to note as well, many states offer free tuition at any state school in-state (redundancy is redundant). My state does this, and along with a few merit based scholarships, I am receiving a check from the school every semester for about 1.5k. Not that this is totally typical, but there are a lot of opportunities if you work hard and try to be financially aware.

A friend that I am working with this summer decided to go to school at Notre Dame, with no scholarships. She will have ~225,000 dollars in debt when she graduates. Granted, her parents are helping her out and can afford it somewhat, but the fact of the matter remains, would you rather go to an in state school and have a house, or would you want to go to notre dame? I am sure it is a great school, but I would be hard pressed to see if she was much happier than me, I love my university...


Jamesqf

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Re: Families Make Big Changes To Pay For College
« Reply #6 on: August 05, 2012, 01:04:51 PM »
There is no one size fits all answer to college which also makes the attached comments to these sorts of articles irritating.  For example, the CC near me has more remedial than college transfer offerings.  They don't offer any math beyond Calc I, no Physics.  A student who wants to be an engineer would be better off at the state U from the get go--even if that meant assuming some debt...

Also, a lot of these student debt horror stories are just that: people who made really bad investment decisions, akin to having all their money tied up in Enron or Madoff's investment fund.

There might be cases where in makes sense to borrow a lot of money to go to a "prestigious" university, as if you're planning on going into a field where networking is more important than ability.  But an engineering degree from Harvard isn't worth much more than one from State U.

simonsez

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Re: Families Make Big Changes To Pay For College
« Reply #7 on: August 07, 2012, 11:29:33 AM »
Hello, former young financial idiot here with middle class anti-mustachian parents meaning (in this context) I didn't have any money set aside for college.  I went to a slightly below average public school in a metropolitan area (below avg. in terms of college preparedness for its students, purely my opinion) and made excellent grades but had no AP credit or any other sort of college credit before entrance.  Anyway I graduated from a good state university (in state tuition) and went to another state university (out of state tuition) for my M.S.  It took 6 years in total for both degrees and the total of my federal loans was around 85k, ignoring Parent PLUS loans.  Nearly two years into my career and I'm making a little under 70k so the investment was worth it to me thus far (loans should be paid off in 5 total years, 3 to go) even though my way had to be borrowed to get through.  The state I attended undergrad in didn't have any free or reduced tuition (other than the in-state rate which was 6200 for my freshmen year).  Out of state tuition for grad school hurt, $1000 per credit hour, but my field was/is quite narrow in scope and isn't offered too many places and did end up making me directly hire-able in a technical position right out of school.

Looking back financially, I wish I would've went to cc for 2 years and then transferred but as it's been pointed out, that isn't always a guarantee.  I don't really blame my parents as they're awesome in other ways and the worth of my upbringing far outweighs having to trudge into debt for my tertiary education.  I was stupid then and easily could've been more frugal but I had a great time in college and I have no regrets.  One thing I wish was different was that the public education system, at least in my experience, is/had been better about educating students (and parents) about personal finance and college choices and the expense/debt involved.  My parents certainly didn't have that financial information and college expenses were vastly different in their time.  I think public education could be much better with a few tweaks for college-bound students.  e.g. more active counselors, personal finance class, seminars/assemblies for seniors, etc.  I realize this varies across every imaginable area and some public schools may already be doing this in some ways but I don't think it is necessarily fair to castigate 17/18 year olds for making sub-optimal financial decisions regarding going to college and taking on debt.  I'm happy to be where I am career-wise and the path to FI is still a major work in progress but I don't think the average person with 85k in loan debt with a master's pays it off in 5 years for a variety of reasons.  Yes, many of these are probably related to their anti-mustachian ways but when is the accepted age to be a mustachioed adult?  18? 22? 25?  There is no perfect answer of course but I just think more light needs to be shed for 17/18 year olds regarding the long-term financial implications of the years immediately following high school.

simonsez

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Re: Families Make Big Changes To Pay For College
« Reply #8 on: August 07, 2012, 11:40:48 AM »
BTW, now that I'm older, I don't think a 4 year university is an entitlement to those with good grades like I once did (but that goes back to more knowledge beforehand).  But yes, the NPR article has some egregious behaviors that make even my college choices pedestrian.