The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: oldtoyota on May 21, 2014, 07:57:46 AM
-
An acquaintance is frustrated with life. He graduated from an expensive prestigious school and took out loans to attend it. The course of study was not one that anyone would think would lead to a high pay check.
This person finds himself living in a small apartment, working in a space he doesn't like, and generally feeling trapped by how little money he makes.
He thinks he's making a political statement by complaining because, basically, "Americans need to know that people like me are not having good lives."
One complaint is that so much is taken from his paycheck that he has little left over to spend and has to live with a relative.
All I could see in this situation were the responses you all would give:
Bike to work. Don't drive.
Change jobs. Keep looking until you find something else.
Reduce expenses.
This guy seems to think it's the fault of other people (I am not sure who? The government?) that he took out loans to attend a fancy school and now those loan payments take up most of his paycheck.
What are your thoughts?
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
-
Wah, wah, wah.
Having just raised a teenager through high school graduation, I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
The teenager we've raised has a full ride to a decent-enough state university (where she plans to study business with a focus on hospitality), has savings in the bank for incidentals, and is opening her very first roth IRA this week. She's 19, has worked since she turned 16, and currently makes between $13-$30/hr as a server at a high end restaurant. She also has side jobs where she's using her hobby/talent to generate a couple thousand extra per year. She drives a paid for 13 year old car. She'll have a roommate to save on expenses. She has a budget, an emergency fund and I can tell -- will be wealthy one day because of her ability to WORK HARD and save even harder.
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
-
Wah, wah, wah.
Having just raised a teenager through high school graduation, I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
The teenager we've raised has a full ride to a decent-enough state university (where she plans to study business with a focus on hospitality), has savings in the bank for incidentals, and is opening her very first roth IRA this week. She's 19, has worked since she turned 16, and currently makes between $13-$30/hr as a server at a high end restaurant. She also has side jobs where she's using her hobby/talent to generate a couple thousand extra per year. She drives a paid for 13 year old car. She'll have a roommate to save on expenses. She has a budget, an emergency fund and I can tell -- will be wealthy one day because of her ability to WORK HARD and save even harder.
Obviously if you're raised mustachian, you'll be ahead of the game. But 18yo kids who haven't ever lived on their own are highly influenced by their parents, and not all parents are as enlightened as you or I.
Plus there's clear evidence that 18-21 year-olds are still undergoing brain development, particularly in the areas controlling risk assessment and good judgement.
There's a real argument to be made here that young adults need additional help or even protections against predatory lending, etc.
-
oooh...interesting! And difficult because:
What is poor? This, for me, is along the lines of this (http://forum.mrmoneymustache.com/welcome-to-the-forum/what-role-has-luck-played-in-your-financial-success/) discussion. Are people poor because they have "Bad Luck" (assuming you don't want to be poor) having iterated towards a 'negative' direction by making poor* decisions. Or, can you create your own "Good Luck" by making (on balance) decisions that iterate you towards a 'positive' or 'rich' direction?
As for the acquaintance, I would argue that they are not poor. They may have made sub-optimal choices. For this I generally believe the 'blame' lies squarely on the individual's shoulders. You have to own up to all decisions you make and use the lessons learned going forward. This is how one iterates in the 'positive' or desired direction.
* Pun intended, but not to be taken lightly.
-
The teenager we've raised has a full ride to a decent-enough state university (where she plans to study business with a focus on hospitality), has savings in the bank for incidentals, and is opening her very first roth IRA this week.
I've added emphasis to show that the key here is that you've raised your child to do the things she's doing. I'm going to assume that she didn't wake up one morning and realize that that IRA she'll be contributing to existed without any information being presented to her? And that she had an optimal environment in which to get good enough grades to get that scholarship?
How about kids whose parents don't even have an IRA themselves, and do the best they can to escape a similar life by taking out loans to go to a school that no one has prepared them for? Do you say "Wah, wah, wah" to them too?
-
Plus there's clear evidence that 18-21 year-olds are still undergoing brain development, particularly in the areas controlling risk assessment and good judgement.
There's a real argument to be made here that young adults need additional help or even protections against predatory lending, etc.
I really agree with this. I would lower the first age by about 5 years though.
If more emphasis was put on what CarSafetyGuy advocates:
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
we would have more people capable of making appropriate decisions by critically thinking.
-
Wah, wah, wah.
Having just raised a teenager through high school graduation, I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
The teenager we've raised has a full ride to a decent-enough state university (where she plans to study business with a focus on hospitality), has savings in the bank for incidentals, and is opening her very first roth IRA this week. She's 19, has worked since she turned 16, and currently makes between $13-$30/hr as a server at a high end restaurant. She also has side jobs where she's using her hobby/talent to generate a couple thousand extra per year. She drives a paid for 13 year old car. She'll have a roommate to save on expenses. She has a budget, an emergency fund and I can tell -- will be wealthy one day because of her ability to WORK HARD and save even harder.
Obviously if you're raised mustachian, you'll be ahead of the game. But 18yo kids who haven't ever lived on their own are highly influenced by their parents, and not all parents are as enlightened as you or I.
Plus there's clear evidence that 18-21 year-olds are still undergoing brain development, particularly in the areas controlling risk assessment and good judgement.
There's a real argument to be made here that young adults need additional help or even protections against predatory lending, etc.
yeah. in a way, sure, it's no one's fault but his own. but I also agree with oldtoyota's statement:
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
I had no fucking idea what I was doing when I took out >$70k in student loans. I was 17 when I started and my parents are wonderful people but haven't always made the most responsible financial decisions. it's basically total luck that I wound up in a field I enjoy that also pays really well, so I don't feel trapped by my loans. initially I wanted to be a high school English teacher... ha ha, wouldn't that be a riot right now.
Carrie, your daughter had YOU to provide an excellent example and a solid grounding in personal finance. many (most?) high schoolers aren't that lucky!
-
If they're federal loans tell him to get on an income-based repayment plan (IBR)...
If they're private then he's SOL =\
-
Of course it's his fault (shared with his parents).
Let's assume that he had no financial knowledge and nor did his parents. He was totally financially illiterate and just made the best choices he could with the information he had at the time.
Things he did wrong:
1. He failed to educate himself. 15 minutes with Google would have given him enough information to think twice.
2. He picked an expensive course of study without adequate ROI. He could have probably figured this one out just by posting his plan on Facebook. A Magic 8 ball had at least a 50% chance of steering him away from this course of action.
3. He failed to own his mistake, which makes it hard to learn from it.
Since we're little kids, we're supposed to learn from our mistakes. When I was little, I accidentally disturbed a beehive that I didn't see. The bees came out and stung me. Do I blame the bees? No. I learned to watch out for beehives. I may not have known better, but it was still my mistake.
Should there be consumer protections in place to prevent predatory lending to teenaged nitwits? Sure. I don't think it'll stop teenaged nitwits from getting expensive, useless degrees, but at least we could stop encouraging it. If it was hard to get a loan for a Medieval English degree, maybe it would make the idealistic youths of the world take a moment to ask themselves if it's a good idea.
Should there be education in the public school system that actively discourages expensive degrees with a low ROI? Absolutely! Again, it might not stop them, but maybe it would make them pause and think. It would certainly stop them from blaming everyone but themselves.
-
I'm being harsh, I know.
There is a lot of entitlement going on here though. Why shouldn't a 20 year old live in a tiny apartment? What's wrong with being poor when you're first starting out? Is happiness a guaranteed rite of passage, or something that you work towards and define as you mature?
I do think counseling in what taking out loans actually means should be a pre req to being handed loans. When I was a student, I did not take out loans because it felt wrong --- couldn't have articulated why, exactly, but it just didn't sit right, so I lived very frugally and worked my butt off during summers to pay cash as I went. Meanwhile, classmates were racking up as much debt as they were allowed. Never researched to find out that our field started in the high 20's, low 30's and how long it would take to pay off $40k in student loans.....
-
Hrm... didn't we hash this topic out before with a seven page discussion?
The fault (if that's really what is important) is complex and can't be laid down on any one person or thing. I do know what is under this person's control. Making the right decisions going forward which will increase their odds of not being poor.
-
Wah, wah, wah.
Having just raised a teenager through high school graduation, I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
The teenager we've raised has a full ride to a decent-enough state university (where she plans to study business with a focus on hospitality), has savings in the bank for incidentals, and is opening her very first roth IRA this week. She's 19, has worked since she turned 16, and currently makes between $13-$30/hr as a server at a high end restaurant. She also has side jobs where she's using her hobby/talent to generate a couple thousand extra per year. She drives a paid for 13 year old car. She'll have a roommate to save on expenses. She has a budget, an emergency fund and I can tell -- will be wealthy one day because of her ability to WORK HARD and save even harder.
At 17, and a high school grad, I did not know enough (and this was back in the dark ages without a good internet, it was just starting) to know that when my mom said I could not legally leave at 17 (and she would call the cops if I did). I did have some savings but knew nothing about a Roth (I truly wish I had). I got a full academic ride but would have had to pay for living expenses. Because my mom was raised poor and never had gone to college, she was a big proponent of community college (never mind that our state, if you look at the units requires more than 2 years to be able to transfer, if you also get the major lower division requirements done, the average community college student has to do about 20 "extra" units to transfer as a junior), therefore unless I went to community college, she would not fill out my FAFSA (and the school would not allow me to get the full ride without filling it out, which is very common). Kids learn from their parents, I learn a lot of what NOT to do but I wish I had been able to learn what to do.
-
At 17, and a high school grad, I did not know enough (and this was back in the dark ages without a good internet, it was just starting) to know that when my mom said I could not legally leave at 17 (and she would call the cops if I did). I did have some savings but knew nothing about a Roth (I truly wish I had). I got a full academic ride but would have had to pay for living expenses. Because my mom was raised poor and never had gone to college, she was a big proponent of community college (never mind that our state, if you look at the units requires more than 2 years to be able to transfer, if you also get the major lower division requirements done, the average community college student has to do about 20 "extra" units to transfer as a junior), therefore unless I went to community college, she would not fill out my FAFSA (and the school would not allow me to get the full ride without filling it out, which is very common). Kids learn from their parents, I learn a lot of what NOT to do but I wish I had been able to learn what to do.
Yup, everything here. And this is probably a better story, since the mom at least encouraged/"allowed" community college. There seems to be some fantasy happening on a grand scale on these boards that every 18 year old has ideal parents who know enough and care enough to guide them. If a kid's parents suck, it's somehow the kid's fault according to a lot of what I see here.
-
Disclaimer: This is just my suspicion and I have not read any articles or conducted any studies to confirm this theory one way or another. Don’t take what I say too seriously since I’m just rebounding for ideas.
I can’t help but feel that the whole “everyone must go to college” trend is a holdover from the late Enlightenment period when the only people who attended universities were nobles and/or wealthy. A large number (I would say most if I knew the actual number) of early scientists, writers, and philosophers were noblemen: Newton, Copernicus, Descartes, Darwin, etc. Who else had the time and money to waste thinking about this kind of stuff and setting up careful experiments and observations? The peasant and working classes were probably no less intelligent and clever but they would have put their efforts toward improving their tools and daily lives instead of more esoteric pursuits.
As evidence, a traditional “liberal arts education” is designed to touch on broad intellectual pursuits including history, science, math, language, art, literature, and so on, the whole of which is meant to create a noble, well informed mind. The pursuing all these realms is the reward itself. In a similar vein, we still mandate that college sports must be amateur and unpaid. This is a holdover from a time when it was believed the purest expression of athleticism was sport for the sake of sport.
For a very long time through the 19th century there was no such thing as scholarships. I remember reading that various professors recognized that Edgar A. Poe was a brilliant writer but when his family fell on hard times and the money ran out, he was forced to drop out despite the pleas of his teachers that he stay.
So, for centuries we’ve had college and university systems where only the nobles and wealthy could attend. It should not be surprising then that this education produced people who succeeded in life; it’s much easier to succeed when you’re already connected and rich. I suspect this trend actually continued well into the 20th century at which point the newly wealthy middle class figured this was the secret to getting into the upper class.
Today, it is constantly drilled into young people (I’m talking about preteens) that you go to college and then succeed even though that formula itself is based in largely archaic, classist roots that actually run counter to much of the ideals of modern society. “Well what do I study in college?” “Anything you want, there are lots of subjects which will all give you a noble mind. Just sign these forms here and you can pay us back later for it.”
So is it your friend’s fault that he took on so many loans that he’s now poor? Yes and no. He did sign the loan documents and of course he could have tried to find the value of the education on his own, but he’s also fighting hugely resourced loan and education systems that stand to gain a lot by getting him and others like him to go and a lot to lose if they don’t. I actually agree with your friend that he should be announcing to the world what a terrible deal he got, not so much so he can get out of his loans (which is what some in the Occupy Wall Street movement want) but so that he can warn others like him against making the same mistake.
-
Being poor is certainly open to interpretation (http://www.huffingtonpost.com/linda-tirado/why-poor-peoples-bad-decisions-make-perfect-sense_b_4326233.html). And if Tirado is a 'spokesperson' for the 'poor' then I don't know what to say.
Now, what do you think about this:
that people who live in poverty tend to make poor long term financial decisions because their economic situation makes it difficult to focus on anything but the near term.
(http://phys.org/news/2012-11-poverty-people-focus-short-term.html (http://phys.org/news/2012-11-poverty-people-focus-short-term.html))
I'd like to see what people have to say about the following research..which indicates the above quote to be true:
http://theslab.uchicago.edu/anuj/wp-content/uploads/sci.pdf (http://theslab.uchicago.edu/anuj/wp-content/uploads/sci.pdf)
http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/mani/mani_science_976.full.pdf (http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/mani/mani_science_976.full.pdf)
-
Sweet! That last poor people thread was getting a bit stale. Nice to have a fresh new thread where people can lay out all their anecdotal evidence in order to make sweeping generalizations and judgments about complex issues.
I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
All while getting in a few jabs at young people! What's not to love.
-
I'm being harsh, I know.
There is a lot of entitlement going on here though. Why shouldn't a 20 year old live in a tiny apartment? What's wrong with being poor when you're first starting out? Is happiness a guaranteed rite of passage, or something that you work towards and define as you mature?
The person is not in their 20s…so the entitlement-of-20-year-olds argument is not quite applicable here. I think this person is around 35 or so.
-
Sweet! That last poor people thread was getting a bit stale. Nice to have a fresh new thread where people can lay out all their anecdotal evidence in order to make sweeping generalizations and judgments about complex issues.
Yeah, but one can try to steer people away from anecdotes...and discuss actual research! You should prolly toss the link up from the previous 'poor people' thread...to possibly attempt to steer the discussion to new areas...
-
He doesn't sound poor, he sounds like an early 20 something. Most of us starting off had student loans to pay and did not live in what we considered our "ideal" location. Many of us had roommates and had to scrape by, welcome to life.
I also don't agree with this everyone has to go to university. I am currently having this talk with my 16 year old. Her favorite quote is that "everyone says you have to go to university". I keep telling her that no, not everyone has to or even should go to university. She has no idea what she wants to do in life, which is not unusual at that age, and I feel and have expressed to her that before she goes out and spends all of this money that she should know what she wants to do and then figure out what education she will need to get there.
-
There is a lot of entitlement going on here though. Why shouldn't a 20 year old live in a tiny apartment? What's wrong with being poor when you're first starting out? Is happiness a guaranteed rite of passage, or something that you work towards and define as you mature?
+1
I suspect some younger folks see their parents' lifestyle and expect the same when they become adults. Cell phones were still a rarity when I went to college, but if your Mom always got you the latest iPhone and took you on nice vacations it might be a let-down to live without those things.
Perhaps it was easier for us because we didn't have much of that stuff to begin with.
-
At 17, and a high school grad, I did not know enough (and this was back in the dark ages without a good internet, it was just starting) to know that when my mom said I could not legally leave at 17 (and she would call the cops if I did). I did have some savings but knew nothing about a Roth (I truly wish I had). I got a full academic ride but would have had to pay for living expenses. Because my mom was raised poor and never had gone to college, she was a big proponent of community college (never mind that our state, if you look at the units requires more than 2 years to be able to transfer, if you also get the major lower division requirements done, the average community college student has to do about 20 "extra" units to transfer as a junior), therefore unless I went to community college, she would not fill out my FAFSA (and the school would not allow me to get the full ride without filling it out, which is very common). Kids learn from their parents, I learn a lot of what NOT to do but I wish I had been able to learn what to do.
Yup, everything here. And this is probably a better story, since the mom at least encouraged/"allowed" community college. There seems to be some fantasy happening on a grand scale on these boards that every 18 year old has ideal parents who know enough and care enough to guide them. If a kid's parents suck, it's somehow the kid's fault according to a lot of what I see here.
Part of that, I bet, is that my mom was RAISED poor but because of the kindness of Catholic schools was able to go to private schools as a child and is not poor now. By the time she retired she was making six figures. But she still has the holdovers from being raised poor and the attitudes toward the well off and learning about money are still there.
-
I am told all the time I am not a very compassionate person. Oh like so many have had the rough childhood, divorce, neglect blah blah blah. Cops at the house all the time you get the picture. Made it through High School and at 17 kn. knew i wasn't ready for college so went into the military. Did well but wanted to get out as soon as I could because couldnt see myself spending the rest of my life asking for permission to do ?? Anyhow long and short of it , by 19 knocked up a girl and paid child support for 19 years plus health insurance. Tried the marriage thing last 2 years because we weren't in "Love". By the time i was 21 i was so far in debt and my parents were useless when it came to guidance. Instead of blaming them and sitting around I worked every hour possible till i figured it out. So instead of blaming whomever your friend should just get off his ass instead of waiting around for whatever he is entitled to. There is always someone to blame but at the end of the day rise up from it.
-
I'm sure some people are poor because of their own bad choices, not sure if it's the majority or minority though.
Regarding kids and school, I think it's fair for them to slightly blame others for part of their situation. The ones who are really struggling at least. We've been telling kids for a long time now "Do what you love, life's too short to be miserable." and "just go to college, everything will be fine as long as you have a bachelor's!".
Yes, they're adults but 18 year olds are still heavily controlled/manipulated/advised by their parents, teachers, friends, etc.
I also suspect that due to the number of income based repayment options available now and the decline of private loans, that many students' monthly financial situation isn't as dire as some of them contend. Sure, there's that person who owes $200,000 for drama school, but that's an extremely small minority. These income based plans are a band aid solution IMO, designed mainly to just prevent default.
-
I started out poor, married young, worked through college, had little money knowledge, but still managed. Lived in small/cheap apartments, worked my tail off at less-than-dream jobs, and pulled through. Big difference -- I expected to start at the bottom and work up. No luxuries, no travel, etc. AND THAT WAS FINE. Still better than living with abusive parents.
Why should a youngster start out with their own place (no roommates)? Why should they start out being able to afford vacations or have their ideal job right off the bat? Life isn't always fun or ideal, but with the availability of knowledge (the whole freaking internet) there's little excuse for not improving one's situation.
(back in my day if you wanted to learn about a mortgage you had to go to the library and check out a book on it....) ha, I'm not quite that old, but seriously --- the information is out there, seems like few actually want to educate themselves on anything other than what celebrities are doing and how many people liked their most recent selfie on facebook.
-
I did not ask this question originally, but here we go. What can I do to help the person see there's another way? Some of you are pretty harsh. You not necessarily incorrect, but that tone would not go over well with someone who is already angry and already full of a defeatist attitude.
So far, I suggested biking to work because there was a lot of talk about the car breaking down and expenses related to getting it fixed.
Part of me, though, is wondering WHY would someone go to such an expensive school for a degree that won't help to bring in a paycheck. That seems like a big part of this situation based on what I know.
The other puzzling part is why does this person think he's being "political" by sharing his not-so-great life choices? The government did not make him take out the loans.
-
I did not ask this question originally, but here we go. What can I do to help the person see there's another way? Some of you are pretty harsh. You not necessarily incorrect, but that tone would not go over well with someone who is already angry and already full of a defeatist attitude.
So far, I suggested biking to work because there was a lot of talk about the car breaking down and expenses related to getting it fixed.
Part of me, though, is wondering WHY would someone go to such an expensive school for a degree that won't help to bring in a paycheck. That seems like a big part of this situation based on what I know.
The other puzzling part is why does this person think he's being "political" by sharing his not-so-great life choices? The government did not make him take out the loans.
What's past is past. There will be all sorts of rationalization for what decisions your friend has made. The focus should be on going forward. How exactly? I don't know. You can't make people change their behaviors, you can only demonstrate that there are other options.
As for the politicization of his issue... well an external locus of control can be a nice warm blanket to wrap around your bad decisions. But until he realizes that you won't be able to cajole, arm twist, or push the change. It will only be up to him. It sucks to see someone ignore good advice. But our monkey brains have a way of tricking us quite easily.
-
Sweet! That last poor people thread was getting a bit stale. Nice to have a fresh new thread where people can lay out all their anecdotal evidence in order to make sweeping generalizations and judgments about complex issues.
I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
All while getting in a few jabs at young people! What's not to love.
This pretty much sums it up.
-
I started out poor, married young, worked through college, had little money knowledge, but still managed. Lived in small/cheap apartments, worked my tail off at less-than-dream jobs, and pulled through. Big difference -- I expected to start at the bottom and work up. No luxuries, no travel, etc. AND THAT WAS FINE. Still better than living with abusive parents.
Why should a youngster start out with their own place (no roommates)? Why should they start out being able to afford vacations or have their ideal job right off the bat? Life isn't always fun or ideal, but with the availability of knowledge (the whole freaking internet) there's little excuse for not improving one's situation.
(back in my day if you wanted to learn about a mortgage you had to go to the library and check out a book on it....) ha, I'm not quite that old, but seriously --- the information is out there, seems like few actually want to educate themselves on anything other than what celebrities are doing and how many people liked their most recent selfie on facebook.
Do you think the kid in the original post would behave differently if he were your child, raised like your own (who definitely seems to have a great handle on things)?
-
I'm being harsh, I know.
There is a lot of entitlement going on here though. Why shouldn't a 20 year old live in a tiny apartment? What's wrong with being poor when you're first starting out? Is happiness a guaranteed rite of passage, or something that you work towards and define as you mature?
I do think counseling in what taking out loans actually means should be a pre req to being handed loans. When I was a student, I did not take out loans because it felt wrong --- couldn't have articulated why, exactly, but it just didn't sit right, so I lived very frugally and worked my butt off during summers to pay cash as I went. Meanwhile, classmates were racking up as much debt as they were allowed. Never researched to find out that our field started in the high 20's, low 30's and how long it would take to pay off $40k in student loans.....
There was another thread this morning about how hard your little green soldiers are working for you, and it led me to do the math. At 6%, every 25k in student loans means you have to repay that debt with a little over a $1/hr pay cut. Not a big deal if your degree earns well. But a lot of people (myself included) did not get degrees that earn well. I knew some people in college that took as much loan as they could, and now make $10-$15 per hour with over 50k in debts. I would wager if they had know how much earning power they were losing by taking on that debt over the long term, I would wager a lot of them would have made better choices.
-
I don't really blame this guy for feeling trapped, because I don't think that there are many 18 year olds who are really wise enough to understand the implications down the road of taking out a huge loan for college. He is probably wishing that he knew then what he knows now.
I was pretty clueless at 18, my friends were pretty clueless at 18, and I'm betting that all of you were pretty clueless too.
-
You know, I do think that there's a benefit to shedding light on your personal situation if that can help inform others - ie, if this friend went into heavy debt for a not-so-lucrative degree, it's reasonable for him to share his experience so others are better informed and don't follow in the same path. So, if (none of the following is true about me) I went into 100K debt on a psychology degree, and now I rue the situation because I have a low-paying job and wish I could go back in time and make different choices (pick a different major/school, not take out tons of loans), it's good if I'm clear with friends and family about what this debt load means for my life, and why I wouldn't advise someone else to take the same path.
I have a lot of compassion for people who didn't have the education, thoughtful and dedicated parents, and physical and mental abilities that I did/do. The way I see it, there are two (mostly) orthogonal components to our success: (1) personal circumstances, ability, and effort & (2) systemic & macro factors. Some people focus heavily on one or the other, but it doesn't feel right not to acknowledge both components. So I think think that's it's possible to simultaneously critique what this 'friend' is doing about housing & expenses, and to acknowledge the larger problem of the system where teens are legally able to take on tons of debt without understanding the impact on the rest of their lives, and where federal loans are propping up the rising cost of college.
I will say that I see myself & my peers having a hard time delaying gratification and being able to view the bigger picture. It's pretty true that among my mostly middle/upper middle class friends, it's standard to go out lots for dinner and drinks, to have nice phones, etc. I and many of my friends are immigrants, so I remember reeeeally well that my parents (& I) had a really different lifestyle when we first moved to the US, that the very comfortable life my parents now have is not a life they could've afforded at my age. But I think it's easy to forget that, and to feel as though your life standard should be at where your parents/you growing up, are at.
So I guess I don't have a lot of sympathy for someone who doesn't see that sacrifices are necessary & that your lifestyle should be determined by what you can afford firstly, and what you want secondarily. For example: don't start your housing search saying you want a one bedroom with X. See what you can reasonably afford, then see what your options are, whether you need to find roommates, etc. Complaining for the sake of complaining isn't doing much to advance your life in the direction you want - better to harness your experiences and learnings to change your behavior in the future, rather than get stuck lamenting the past.
-
I'm being harsh, I know.
There is a lot of entitlement going on here though. Why shouldn't a 20 year old live in a tiny apartment? What's wrong with being poor when you're first starting out? Is happiness a guaranteed rite of passage, or something that you work towards and define as you mature?
I do think counseling in what taking out loans actually means should be a pre req to being handed loans. When I was a student, I did not take out loans because it felt wrong --- couldn't have articulated why, exactly, but it just didn't sit right, so I lived very frugally and worked my butt off during summers to pay cash as I went. Meanwhile, classmates were racking up as much debt as they were allowed. Never researched to find out that our field started in the high 20's, low 30's and how long it would take to pay off $40k in student loans.....
There was another thread this morning about how hard your little green soldiers are working for you, and it led me to do the math. At 6%, every 25k in student loans means you have to repay that debt with a little over a $1/hr pay cut. Not a big deal if your degree earns well. But a lot of people (myself included) did not get degrees that earn well. I knew some people in college that took as much loan as they could, and now make $10-$15 per hour with over 50k in debts. I would wager if they had know how much earning power they were losing by taking on that debt over the long term, I would wager a lot of them would have made better choices.
It is this kind of math that I think any 18-21 year old wanting/needing to get a loan should be told clearly before they are allowed to get a loan.
I almost took out loans for both years of grad school. My friend, thankfully, stopped me from doing it the second year and showed me how I could get around having loans. In the end, I had some loans yet I paid them off quickly and they were not that much anyway.
-
Why do people do liberal arts school even when there is no increase in value? It's discussed quite frequently here as a recognized pattern, not just among the poor but in our entire society.
I remember reading a forum post in the 'antimustachian wall of shame' section that talked about a husband that even though he was making more than his 'liberal arts' educated wife, people were still wondering when he was going to get a real job. This is also discussed in 'Millionaire Next Door' where the wealthy want their children to have well respected jobs. Granted a lot of times they overlap with well paying jobs, but people by far want to have a job that is respected over a job that makes good money.
And why is that? I would suggest it is people want to show off their career. Even if they don't make the money, they want the 'Dr.' in front of their name because it gives them prestige. And really that gets to the heart of Western culture. It doesn't matter if you're in debt, as long as you look good doing it.
-
You know, I do think that there's a benefit to shedding light on your personal situation if that can help inform others - ie, if this friend went into heavy debt for a not-so-lucrative degree, it's reasonable for him to share his experience so others are better informed and don't follow in the same path. So, if (none of the following is true about me) I went into 100K debt on a psychology degree, and now I rue the situation because I have a low-paying job and wish I could go back in time and make different choices (pick a different major/school, not take out tons of loans), it's good if I'm clear with friends and family about what this debt load means for my life, and why I wouldn't advise someone else to take the same path.
I have a lot of compassion for people who didn't have the education, thoughtful and dedicated parents, and physical and mental abilities that I did/do. The way I see it, there are two (mostly) orthogonal components to our success: (1) personal circumstances, ability, and effort & (2) systemic & macro factors. Some people focus heavily on one or the other, but it doesn't feel right not to acknowledge both components. So I think think that's it's possible to simultaneously critique what this 'friend' is doing about housing & expenses, and to acknowledge the larger problem of the system where teens are legally able to take on tons of debt without understanding the impact on the rest of their lives, and where federal loans are propping up the rising cost of college…
Thoughtful post. Thanks!
-
It's our fault, for failing to provide educations and opportunities sufficient to keep everyone out of poverty that wants to be. This guy made some bad decisions out of ignorance. That's a failure of our education system to teach him how to calculate an ROI (something which I was ignorant of as well when I took out loans to help pay for my education). I was lucky that my loans were small due to scholarships, and that I earned a degree that happens to be financially rewarded by society. I'd love to think that was the result of some foresight and planning on my part, but the truth is I was ignorant and lucky. Not everyone can afford community college, and there are plenty of people unable to earn enough money to support themselves with a high school education. This is particularly a problem for 18yo kids aging out of foster care, but there are also plenty of kids who's parents simply haven't equipped them with the tools necessary to succeed. It's a tragic waste of human capital, and we would be well served as a society to close those gaps as much as possible.
-
I'll throw in my two cents:
I tend to believe that a very large percentage of our "life success" comes from the choices that we as individuals make. I absolutely believe there are many people out in the US that are content at not working hard and complaining about their outcome, and I have no compassion for those people. I have no compassion for people that never seem to get it right, but are always doing the same thing (I think that's the definition of insanity). If you are in a bad situation, financial or otherwise, you should think about how to change that situation, not to proceed with the same activities. So yes, I think much of what we do boils down to personal choice.
That said, how can we, as a society, encourage people to make smart choices? I do feel sorry for the college grad that went a private university to study dance and has $150k worth of debt and no job. The gut reaction is, "why the heck did you do that!?!?!" but I have to think about the fact that they were 18 at the time and they just thought that they should go to college (I'm 26 btw). I thought about my earning potential when I picked a college and major, but not everyone had the same upbringing as I had. I think our education system should include the (what I consider) basic training that everyone should get: how do I balance a checkbook, how does debt work, how should I plan out my entry into the workforce, is college actually a smart option? If we aren't teaching this to children in schools, we are relying on parents to do it. In a perfect world, parents would be doing this already, but we aren't so optimistic and delusional for that. I am a firm believe of equality of opportunity, not equality in outcome. Everyone should have an equal opportunity (of course as much as this is possible, given that some we shouldn't hold people back, and we can't control for individual traits such as intelligence and beauty) once they graduate high school. From there, they've got to start making start decisions (based on the training that they've received) and deal with the consequences themselves.
The risk with bringing in words like "luck" or "fortunate" or "fate" is that is removes our choices from the equation. If we do that, what's the point in our actions or trying? It doesn't hold up with my perception of the world and certainly doesn't hold up with what my gut tells me is possible. I think we as a society should be to get everyone ready for the race of life (which starts once high school ends) and then let each person run the race the way they prefer to run it. In that world everyone person can appreciate the way in which they "run" and understand how that affects their life (cost, length, etc.). Why do I pick high school? I think college adds skills (or may not actually) that are not necessary to be successful in life. Some paths require that additional education, but kids shouldn't be pushed or encouraged to follow individual paths without understanding the repercussions. And I don't believe college should ever be universally free, because if it was, we'd only be encouraging kids to follow paths that they may not value or that society may not value.
-
The way I see it, there are two (mostly) orthogonal components to our success: (1) personal circumstances, ability, and effort & (2) systemic & macro factors. Some people focus heavily on one or the other, but it doesn't feel right not to acknowledge both components.
Systemic and macro factors should not be underestimated. Several of my friends and I all went to the same highly-ranked state university and studied similar engineering fields, but I double-majored and therefore graduated in 2009 instead of 2007. Double-majoring should have increased my earning potential, but instead I graduated into the recession, spent a long time unemployed, and am way behind compared to my peers.
Now, it also caused me to make different choices (e.g. to buy a house at the bottom of the market instead of the top of it, and to keep my budget lower in general) so I might catch up eventually, but economic studies show that people like me (who graduate into recessions), on average, don't. And that, at least, is legitimate to complain about.
-
I probably wrongly assumed that this guy is from a middle to upper middle class background since he went to a prestigious private school (something that is usually not even on the radar for a child raised in poverty). That assumption led me to believe that he likely thinks that he is entitled to a bigger apartment, a better paying job - what-have-you.
I certainly don't blame poor people for being poor, and when kids are raised in the hood and with parents who are absent or drugged out or just eeking by on two minimum wage jobs, then I can absolutely get not understanding cause & effect. I have not meant to bash poor people or to bash young people.
I'm still blown away that kids raised in middle/upper middle income brackets can be so clueless about so many things. The information is out there, readily accessible by every device (that they likely already own), I'm just not seeing that much interest. Whether it comes from parents who are also clueless or what, I don't know. How many of us have been entirely self taught on everything finance, often getting started by a google search? I'd love to see some real financial education in high school. The banks certainly don't want to teach how interest works to people they're selling loans to.
As far as actual advice to the guy, I'd probably say his blaming others is not a helpful action (unless he's looking to educate other young people about the dangers of an expensive degree & tons of loans; but complaining just to complain will likely lead to attitude problems that may make it harder to climb the ladder). Looking for a better paying job, reading & educating himself on budgeting/MMM lifestyle would be infinitely more helpful to improve both his mindset and his financial outlook.
-
At 17, and a high school grad, I did not know enough (and this was back in the dark ages without a good internet, it was just starting) to know that when my mom said I could not legally leave at 17 (and she would call the cops if I did). I did have some savings but knew nothing about a Roth (I truly wish I had). I got a full academic ride but would have had to pay for living expenses. Because my mom was raised poor and never had gone to college, she was a big proponent of community college (never mind that our state, if you look at the units requires more than 2 years to be able to transfer, if you also get the major lower division requirements done, the average community college student has to do about 20 "extra" units to transfer as a junior), therefore unless I went to community college, she would not fill out my FAFSA (and the school would not allow me to get the full ride without filling it out, which is very common). Kids learn from their parents, I learn a lot of what NOT to do but I wish I had been able to learn what to do.
Yup, everything here. And this is probably a better story, since the mom at least encouraged/"allowed" community college. There seems to be some fantasy happening on a grand scale on these boards that every 18 year old has ideal parents who know enough and care enough to guide them. If a kid's parents suck, it's somehow the kid's fault according to a lot of what I see here.
Yeah, guidance is the biggest problem. When you don't have responsible and educated parents, you have to learn responsibility and gain an education about life through the "School of Hard Knocks". And some of those "knocks" are really hard.
Part of the problem is also the idiotic platitudes given to kids over the past twenty years. "Follow your passion and the money will follow" and that kind of dreck. So you end up with kids thinking "Gee, I like to write. How about I get a degree in English?" and then they end up becoming a Starbucks barrista with a Master's degree. I think this is beginning to change now, because all the teenagers I speak to about college are all approaching it as job training, which is what it should be used for. (Unless you are a trust fund baby, in which case, you can go get that degree in Philosophy).
-
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
Are you suggesting that someone applying for education loans go through the same process as someone applying for a mortgage to purchase a home? Not a terrible idea, actually.
Let's see, no job, no assets, no collateral...
Then people poised to go to college at a typical age would never get an education loan. Sounds like a good way to stop anyone from getting education loans which is a terrible idea.
-
... (Unless you are a trust fund baby, in which case, you can go get that degree in Philosophy).
Not a good example.
A degree in philosophy is probably the most valuable non-technical, non-business/law degree one can obtain.
-
Much of your friend's complaints are valid. Both of you should see: https://www.youtube.com/watch?v=9REdcxfie3M
You and or your friend can complain about it in your spare time.
While you complain via the voting booth, put a plan together. Don't wait for or count on anything changing due to your complaint(s). Plan is 'A' is a failure. Work on plan 'B'.
For example, I am working in a job and field that I am convinced is "dead end", partly due to technology (plan A). I am re-tooling for a more "in-demand" field, meanwhile looking for a better position in a related field (plan B).
-
If poverty was entirely dependent on personal choices, then there wouldn't be more poor people in the US than there are in other developed countries. People shouldn't have to live in poverty because of one poor choice that they made, let it be picking a pointless major or having a baby at a young age. Choices aside, people shouldn't have to live in poverty because they grew up in situations which limited their access to information, education, nutrition, and everything else that makes someone a healthy and happy adult. The fact that some people are capable of overcoming those barriers does not mean that anyone should have to.
So yeah, I'm with those who've said that the US has a terrible safety net and that we'd be a stronger country if we stopped blaming people for their crushing poverty.
-
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
Are you suggesting that someone applying for education loans go through the same process as someone applying for a mortgage to purchase a home? Not a terrible idea, actually.
Let's see, no job, no assets, no collateral...
Then people poised to go to college at a typical age would never get an education loan. Sounds like a good way to stop anyone from getting education loans which is a terrible idea.
Almost. More loan rigor would force people to actually work and earn $ for their education. Not terrible.
What do you mean by loan rigor? What rigor would you apply to hopeful students?
-
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
Are you suggesting that someone applying for education loans go through the same process as someone applying for a mortgage to purchase a home? Not a terrible idea, actually.
Let's see, no job, no assets, no collateral...
Then people poised to go to college at a typical age would never get an education loan. Sounds like a good way to stop anyone from getting education loans which is a terrible idea.
Almost. More loan rigor would force people to actually work and earn $ for their education. Not terrible.
What do you mean by loan rigor? What rigor would you apply to hopeful students?
I don't have that list in front of me, but it would probably be similar criteria you would use if a "hopeful student" asked you for $100,000 because they wanted their masters in underwater basket weaving.
So you want to dictate which professions degrees and/or people will be profitable in the future? Well I'm glad your crystal ball is so clear that you think that anyone taking a liberal arts degree is useless. Look hyperbole is cute and all but it isn't anything if you don't have a leg to stand on.
-
The usual argument against stringent student loan requirements is that rich kids have college funds and get to go to school without loans. Loan requirements create a barrier to entry only for poor students.
In most cases, it would lead to parents cosigning silly loans - seems fair - at least an adult is involved in the process! But of course, parents with bad credit couldn't do this, so it's another barrier to entry for poor students. On the other hand, there are more need-based awards available for poorer students.
My personal opinion is that student lending based on the average salary of the degree would be an adequate measure to encourage responsible choices. It's not perfect - since average salaries would be historical, but it injects a measure of sensibility. But I won't hold my breath on anything like that happening!
-
/snip
So you want to dictate which professions degrees and/or people will be profitable in the future? Well I'm glad your crystal ball is so clear that you think that anyone taking a liberal arts degree is useless. Look hyperbole is cute and all but it isn't anything if you don't have a leg to stand on.
Actually the market dictates that. One thing is for sure: I'm sending all the "hopeful students" your way for a loan!
Agree with Cpa Cat. Injecting some measure of sensibility (parents, historical salaries, etc) would make more fiscal sense for the lender and the student.
The market already dictates pay. Why do you want to put additional artificial pressure on job availability by implementing the policy you're proposing. Those students aren't coming your way for a loan so what the hell is your problem?
Even if we went with an analysis of historical salaries then only rich people would be allowed to go into things like the arts. It isn't actually leveling any of the playing field but tilting it towards rich people having a lower barrier of entry into liberal education.
-
To the original post, I say, yes and no.
First off, No. Any society of more than 2 people will have a distribution of incomes/assets. There may be more elements of skewness one way or another, but by and large, there's a earning level that most people make, and there are tails of the curve in both directions on the income scale. What matters is the purchasing power of the income distribution. I'd aurgue, that the official Poverty level used in the US, still leaves a person equipped well enough to support a standard of living that's more than a few clicks north of caveman.
Secondingly, absolutely. You own your station in life. It can't be any other way. As soon as an individual says it's someone elses fault they are where they are, they've abdicated control of their life to that party, and are, in fact, powerless to improve it. Accept that you are the reason you are where you are, and suddenly you're empowered. Sure, the government, or 'the man' or the illuminati may make it harder, but it's still on you to find a way around it. Posting hashtags on facebook is not the answer.
-
/snip
So you want to dictate which professions degrees and/or people will be profitable in the future? Well I'm glad your crystal ball is so clear that you think that anyone taking a liberal arts degree is useless. Look hyperbole is cute and all but it isn't anything if you don't have a leg to stand on.
Actually the market dictates that. One thing is for sure: I'm sending all the "hopeful students" your way for a loan!
Agree with Cpa Cat. Injecting some measure of sensibility (parents, historical salaries, etc) would make more fiscal sense for the lender and the student.
The market already dictates pay. Why do you want to put additional artificial pressure on job availability by implementing the policy you're proposing. Those students aren't coming your way for a loan so what the hell is your problem?
Even if we went with an analysis of historical salaries then only rich people would be allowed to go into things like the arts. It isn't actually leveling any of the playing field but tilting it towards rich people having a lower barrier of entry into liberal education.
Sorry, I'm not great with multiple quote snippets, but here goes.....
Why do you want to put additional artificial pressure on job availability by implementing the policy you're proposing.
This doesn't make any sense. Please explain further.
So would you agree that job availability and anything related to job pools could easily be described with supply and demand? If so you're putting artificial pressure by changing the pool of people seeking those types of jobs by an arbitrary barrier to entry.
Those students aren't coming your way for a loan so what the hell is your problem?
If they are getting student aid from Uncle Sam, then technically they are. Also, do you always get this upset when someone doesn't agree with you? Try a more "hopeful" approach.
It doesn't matter if it is student aid from Uncle Sam or not. You're not the arbiter of who gets loans and who doesn't. I'd much rather see free education than such huge restrictions with obvious downsides. Sorry just getting frustrated with more hyperbole instead of seeing you actually think out your proposal and the consequences.
Even if we went with an analysis of historical salaries then only rich people would be allowed to go into things like the arts.
Or more likely the cost of going into the arts would fall considerably due to market forces.
Why would the costs suddenly drop? If only rich people can afford it then it won't likely drop as they'd be the ones willing to spend the money for it and everyone else is pushed out with your proposed restrictions.
Basically I feel (very passionately) that any education anyone wants should be available. The consequences are on the individual, you don't suffer any of the consequences and as a citizen of the United States you get to reap all the benefits of having an educated society of people who pay taxes and student loan balances back to the government.
-
I think a core issue here is how the price of school has far outpaced its long-term value to the student. Many kids are graduating with huge debt and a worthless degree. Normally this would sort itself out naturally and schools would be forced to lower prices when fewer people apply and the ones that do can't pay, but the system of undischargeable federal loans separates schools too far from their pricing decisions. They get paid no matter what as long as they can push kids into government debt, so they just keep selling college as the be-all-end-all and people keep signing up to the American dream.
One interesting proposal I've heard is to make schools liable for half of the value of loans that don't get repaid when graduates can't find employment. I think that would help make school a lot more affordable pretty quickly, or at the very least it would greatly reduce predatory loan practices.
-
One interesting proposal I've heard is to make schools liable for half of the value of loans that don't get repaid when graduates can't find employment. I think that would help make school a lot more affordable pretty quickly, or at the very least it would greatly reduce predatory loan practices.
I like that idea.
-
I, too, have a co-worker friend who has a bad attitude about the amount of student debt ($80,000) and low salary ($33,000) as a teacher. I have tried to give her helpful hints, but she really didn't want a solution to the problem. She just wanted to vent. I commiserate with her and ask what she is planning on doing and then just listen. As a result, she has become much more receptive to any ideas that I give her. She was able to lower her payments, but has mostly private loans so cannot get them discharged using an income based repayment plan. In Indiana, if you do not make payments on a debt for 10 years, then it is discharged. She has stopped making payments on the private loans. Does anyone know if there is any exclusion of this for private student loans?
-
Of course it's his fault (shared with his parents).
Let's assume that he had no financial knowledge and nor did his parents. He was totally financially illiterate and just made the best choices he could with the information he had at the time.
Things he did wrong:
1. He failed to educate himself. 15 minutes with Google would have given him enough information to think twice.
2. He picked an expensive course of study without adequate ROI. He could have probably figured this one out just by posting his plan on Facebook. A Magic 8 ball had at least a 50% chance of steering him away from this course of action.
3. He failed to own his mistake, which makes it hard to learn from it.
Since we're little kids, we're supposed to learn from our mistakes. When I was little, I accidentally disturbed a beehive that I didn't see. The bees came out and stung me. Do I blame the bees? No. I learned to watch out for beehives. I may not have known better, but it was still my mistake.
Should there be consumer protections in place to prevent predatory lending to teenaged nitwits? Sure. I don't think it'll stop teenaged nitwits from getting expensive, useless degrees, but at least we could stop encouraging it. If it was hard to get a loan for a Medieval English degree, maybe it would make the idealistic youths of the world take a moment to ask themselves if it's a good idea.
Should there be education in the public school system that actively discourages expensive degrees with a low ROI? Absolutely! Again, it might not stop them, but maybe it would make them pause and think. It would certainly stop them from blaming everyone but themselves.
Holy S@#$ that is a fantastic idea. Why the hell aren't loan approvals based on majors of study? Like, have extremely low interest rates on STEM majors, and really high ones on the BAs. Or...well, I guess a lot of college students (including me) change majors a lot so you would have to restructure your deal. If I wanted to game the system I would declare a STEM major freshman year, then change it the next semester lol.
It is a good idea though....
-
I was delighted when credit card statements (some) started to come out with an actual accounting of how much you'd end up paying if you only made the minimum payment. That illustrated better than anything else the cost associated with your choices. Mortgage documentation has the same thing, total of payments, etc.
Why wouldn't you go the extra mile to educate pre-college kids on the costs of their choices, loan-wise?
--Here is the cost of your education (estimated) in this course of study at this university
--Here are the statistics on what your field will pay when you graduate, and after you're in the workforce for a while
--Here are some statistics on the cost of living ranges (rent, etc.) in this market, so, your monthly expenses
--Here's what your loan payment will be. Will you have enough left at the end of the month to live the life you want?
Just some basic questions and examples illustrating the cost of their decisions would be so valuable. Most 18-20 y/o folks can't visualize that nor bring it all together in that way (like Your Money or Your Life does)
There seem to be people who love to place blame (like your friend) and then there are those who figure out solutions. I love that you're helping your friend try to shift from one -- which he can do nothing about at this point -- to the other. But I wouldn't hold my breath. Many times, they don't really want to change. And his situation isn't fatal. It's not like he's living in a hole in the ground in the middle of a minefield.
-
I was delighted when credit card statements (some) started to come out with an actual accounting of how much you'd end up paying if you only made the minimum payment. That illustrated better than anything else the cost associated with your choices. Mortgage documentation has the same thing, total of payments, etc.
Why wouldn't you go the extra mile to educate pre-college kids on the costs of their choices, loan-wise?
--Here is the cost of your education (estimated) in this course of study at this university
--Here are the statistics on what your field will pay when you graduate, and after you're in the workforce for a while
--Here are some statistics on the cost of living ranges (rent, etc.) in this market, so, your monthly expenses
--Here's what your loan payment will be. Will you have enough left at the end of the month to live the life you want?
Just some basic questions and examples illustrating the cost of their decisions would be so valuable. Most 18-20 y/o folks can't visualize that nor bring it all together in that way (like Your Money or Your Life does)
There seem to be people who love to place blame (like your friend) and then there are those who figure out solutions. I love that you're helping your friend try to shift from one -- which he can do nothing about at this point -- to the other. But I wouldn't hold my breath. Many times, they don't really want to change. And his situation isn't fatal. It's not like he's living in a hole in the ground in the middle of a minefield.
Good idea! What's shocking to me is that in spite of those ridiculous credit card minimum payment breakdowns people still get in way over their heads...or is it clever marketing to show how little you need to pay to make minimum payment in order to keep up over- spending ?
-
To the original post, I say, yes and no.
First off, No. Any society of more than 2 people will have a distribution of incomes/assets. There may be more elements of skewness one way or another, but by and large, there's a earning level that most people make, and there are tails of the curve in both directions on the income scale. What matters is the purchasing power of the income distribution. I'd aurgue, that the official Poverty level used in the US, still leaves a person equipped well enough to support a standard of living that's more than a few clicks north of caveman.
Secondingly, absolutely. You own your station in life. It can't be any other way. As soon as an individual says it's someone elses fault they are where they are, they've abdicated control of their life to that party, and are, in fact, powerless to improve it. Accept that you are the reason you are where you are, and suddenly you're empowered. Sure, the government, or 'the man' or the illuminati may make it harder, but it's still on you to find a way around it. Posting hashtags on facebook is not the answer.
I should note that the person did not call themselves poor, and that was my word choice. Your second point is spot on. This person *is* abdicating control and even responsibility for past choices while indicating "the man" is the cause for this.
Update is that the person is looking for a new job, so there is that.
-
Some have mentioned the cost of education and the original model of those in the moneyed classes attaining higher education. In Great Scots!: How the Scots Created Canada Matthew Shaw discusses the development of the Canadian educational system from the Scottish one - the Scots did not have the "public" schools the British did, they educated all the children in basic skills, so they were well prepared as colonists in Canada. Many of the fur traders were Scottish (and made a lot of money) because they had the skills to run a trading post, which the young English immigrants did not. They also valued education. "Glengarry School Days" is the story of a few years at a schoolhouse in Glengarry (Ontario) and things like the spelling bee were highlights. Anyway, although higher education is not free here, it is certainly affordable. Different histories produce different end points.
-
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
Are you suggesting that someone applying for education loans go through the same process as someone applying for a mortgage to purchase a home? Not a terrible idea, actually.
The idea of degree based lending goes over like a lead balloon...
A four year engineering degree from a four year public school is a good loan
An undergrad and law degree from a private school? Maybe not
Psychology? Fund it yourself
Sent from my iPad using Tapatalk
-
Very interesting thread! In some cases, I would say yes - why on earth did he take out so many loans for poor prospects?
On the other hand, I agree that young brains aren't fully formed. I picked an expensive school and took out loans that I had no business taking out. Luckily for me I picked engineering (it pays well) and later joined ROTC (for the scholarship) because I grew up poor and knew a bit about money.
But a lot of young kids don't have those skills, and neither do their parents.
I agree with whomever suggested education for all, but I also agree with "quit yer whining". I mean, try to change the system for the better, but work with what you have now. It's my philosophy on my job too. "Short term goals" and "long term goals".
-
He's an adult so make adult choices and stop complaining about things HE COULD HAVE CHANGED! Different if he was born into an abusive household or a raised in a war torn country.
- He CHOSE to go to a expensive school
- He CHOSE to take a degree without good knowledge of future job prospects when done
- He CHOSE to take on loans to do those things
Tell him to spot complaining about the choices he made, control what he can now to make changes.
-
This just sounds normal to me.
When I graduated with my bachelors, my first post college job was awful and I made hardly anything and it was generally pretty sketchy there for about a year and a half or so.
Most recent college grads aren't exactly raking it in, in terms of money or personal happiness. It's a transition time and usually a bad one. It sounds like he may have paid too much for his degree too.
More facts are needed to really say what's what here. I knew someone who came straight out of school with an $80,000 salary and $300,000 in student loans who complained like this.
Now the thing is, if she got her spending down to a luxurious and indulgent $2500 a month, that debt should vanish in about 6 years give or take, doing back of the envelope math here. And that's assuming no raises, etc.
But she complained she couldn't "make it" and ran up huge consumer debt instead, and made similar complaints and said her student loans should be forgiven and such.
I mean I'm not unsympathetic, we give hundreds of thousands of dollars of debt to 18 year olds who don't know beans about the reality of these loans (I wouldn't have) and then we act shocked when they're a tiny bit older and a hell of a lot smarter a few years later and they suddenly turn green in the gills. Of course they do.
The only reason I avoided this trap was my father though student loans were a big scam, a criminal enterprise really, and wouldn't let me go near them for any reason and this was pounded into me as a young child before I was even in kindergarten. He may have been extreme but he was a prophet, he saw this bubble coming a mile away.
If I'd not had that experience there's no telling what idiocy I'd have committed. I did a lot of stupid things at that age, don't get me wrong, but I didn't make it worse by taking on student loans at least.
That's my long winded way of saying everyone involved sucks when this happens.
-
Thing is, paying a lot for a top school, even for a non vocational degree, in the past has been a good deal.
1) Signalling to potential employers (I am clever & ambitious enough to get into top school, plus I'll have to work really hard to pay off my loans)
2) Connections made at college.
I looked at doing an MBA a couple of times - and the value was in the above two things, not in the content of the course. Having (say) an INSEAD MBA shows that you are willing to invest heavily in yourself, and are clever enough to get in (point 1) and got you a list of acquaintances who would be equally ambitious (point 2)
Four of my close friends at college did classics (I was an engineer). One is an entertainment lawyer, one a music producer, one a fund manager and one a forward deployment engineer for a very specialist database/ IT firm. Sure, their knowledge of Greek odes was of no use to them practically, but only the one who went into music wasn't given their start due to the fact they did a rigorous degree at a top school.
-
There are people who take responsibility for their actions and people who don't. The former can spot the latter from a mile away and will instantly write them off as not worth their time. The best thing your friend can do for himself is look himself in the mirror and say "This situation is 100% my fault. Getting myself out of this situation is 100% in my control." If he can do that, he will be unimaginably successful. But, this is a pretty clear example of paying too much for a degree that isn't very marketable. At this point, write it off as a loss and try to resume build best he can.
Now, for practical stuff: if he went to a prestigious school then the #1 thing he can do is to tap into the alumni base to get a better paying job. The top schools have very high-earning alumni. These successful alumni, however, will invariably be the types of people who take responsibility for their actions and will spot the everything-is-not-my-fault person very quickly, so make sure this is truly out of his system before he tries this step.
The ONLY way to get a job is by networking. Many of us fight this fact because it violates our principles, but it is probably the most actionable piece of job hunting advice I've ever seen.
-
This just sounds normal to me.
When I graduated with my bachelors, my first post college job was awful and I made hardly anything and it was generally pretty sketchy there for about a year and a half or so.
Most recent college grads aren't exactly raking it in, in terms of money or personal happiness. It's a transition time and usually a bad one. It sounds like he may have paid too much for his degree too.
More facts are needed to really say what's what here. I knew someone who came straight out of school with an $80,000 salary and $300,000 in student loans who complained like this.
Now the thing is, if she got her spending down to a luxurious and indulgent $2500 a month, that debt should vanish in about 6 years give or take, doing back of the envelope math here. And that's assuming no raises, etc.
But she complained she couldn't "make it" and ran up huge consumer debt instead, and made similar complaints and said her student loans should be forgiven and such.
I mean I'm not unsympathetic, we give hundreds of thousands of dollars of debt to 18 year olds who don't know beans about the reality of these loans (I wouldn't have) and then we act shocked when they're a tiny bit older and a hell of a lot smarter a few years later and they suddenly turn green in the gills. Of course they do.
The only reason I avoided this trap was my father though student loans were a big scam, a criminal enterprise really, and wouldn't let me go near them for any reason and this was pounded into me as a young child before I was even in kindergarten. He may have been extreme but he was a prophet, he saw this bubble coming a mile away.
If I'd not had that experience there's no telling what idiocy I'd have committed. I did a lot of stupid things at that age, don't get me wrong, but I didn't make it worse by taking on student loans at least.
That's my long winded way of saying everyone involved sucks when this happens.
$10 says she's a lawyer from an upper-middle class family.
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion.
I'm not sure if the author, who appears to be about 23 years old, and recently graduated from blogger to full time employment status as a writer, is mathematically challenged, intentionally deceptive, or both. His claim is patently ridiculous to anyone who reads the first paragraph of that article and has even a modicum of ability to conduct critical analysis.
He claim is based on the $62.6 Billion is how much PUBLIC colleges (and only 4-year public colleges) collected from undergraduates in 2012.
To claim that that number is "how much government would have to spend to make Public college tuition free" is, simply, moronic.
First off, this does not include the hundreds of billions that Federal, State, and Local governments already spend to subsidize Public colleges. From the same source that the mathematically challenged author used, I was able to see that the expenses for Public colleges back in 2012 were actually about THREE HUNDRED BILLION DOLLARS! That alone is about 5-times the misleading claim made by the author.
And remember, that's only the cost for public universities. You make "State U" free for everyone, and a TON of students who are currently going to private schools will be bellying up to the troth for their "free" education, too. You toss in the cost of private schools, and the total is about another $192,000,000,000.
So we could be looking at about $492,000,000,000 (that's $492 BILLION per year). And that's based on 2012 data, the costs today are likely well in excess of $500 BILLION per year.
But the nitwit/deceptive author didn't include what may be the biggest cost of them all. You open up a "government freebie" and tons of people who are not currently in college will be lining up to take advantage- that would likely cost hundreds of billions more per year. Hell, I'd probably belly up for the freebie, and I'm over 50.
By the time you are done, it's not unreasonable to assume that the "mere $62.6 Billion per year" will end up costing closer to ONE TRILLION dollars per year.
A hundred billion here and a hundred billion there, and pretty soon, you are starting to talk about real money...
If we were to provide free college in the USA, we couldn't possibly afford to do it for every person with a pulse and nothing better to do than spend time "finding himself" while earning a BS (and I don't mean Baccalaureate of Science) degree in Early Uzbek Interpretive Dance.
We'd have to do it like other countries do- make it highly selective and highly competitive. This is something that most of the "we want free public college education" crowd rarely mentions- the percentage of people going to college in Germany, China, Japan, and other nations that do this is MUCH MUCH MUCH lower than in the USA. They give free college educations, but ONLY to the academic elite, not every "C" student who can fog a mirror. That means that a lot of the kids currently using government loans/grants would be left out in the cold, while the bright kids got all the money. Do you think that would fly?
-
... (Unless you are a trust fund baby, in which case, you can go get that degree in Philosophy).
Not a good example.
A degree in philosophy is probably the most valuable non-technical, non-business/law degree one can obtain.
I heard this as well. I once heard from a reliable source that Walmart prefers to hire greeters with degrees in Philosophy over lesser degrees like Art Appreciation, Modern Dance, Womyn's Studies, or Film.
-
I think something often overlooked in this debate is the difference between "fault" and "responsibility". For example, crime is exclusively the fault of criminals, and to a large extent it's their responsibility to not commit crime - but because crime has negative effects on the rest of society, we accept that the police also have a responsibility to reduce crime, and that we all have a responsibility to fund the police to do so.
-
I once heard from a reliable source that Walmart prefers to hire greeters with degrees in Philosophy over lesser degrees like Art Appreciation, Modern Dance, Womyn's Studies, or Film.
Ha! Maybe it's because they think those other degrees are more useful, and philosophy graduates are less likely to later find work elsewhere? ;-)
-
I was told about 12 million times growing up that college was an expectation, and that liberal arts was by far the best. Only stupid people who didn't care about being intellectual went to non-liberal arts colleges. Going to college was supposed to teach me "how to think" so the degree itself did not matter. I was told to go to the most prestigious college I could get I to, regardless of cost.
Fast forward to age 18: chose a good private liberal arts college far away from home (read: out of state). Got in. Signed up. Filled out FAFSA. Mom said she'd pay the rest. Signed loan documents where my mom marked an X. Started school in the fall, taking with me a handmedown car that I didn't pay insurance or anything on. Bank account refilled whenever I called for more.
Fast forward to graduation: moved in with boyfriend who was still in grad school, and his parents paid for everything. Similar situation with unlimited refilling bank accounts.
Fast forwards to mid-twenties: neither of us has made a $ in our lives. We have to move back in with parents and I decided to get yet another degree because my liberal arts degree was the "wrong direction". My husband is in the arts and has to support us on his own. We learn about finances real quick!
I will not send my kids to college until they have an idea of ow hat they want from life. I will probably not pay for it. I will teach them about money as soon as possible.
I think my case is a good explanation for why there is so much student loan debt. High schoolers just don't have any frame of reference for decisions regarding money that go into six-figures. Only older people with the benefit of a long-term perspective can keep them from making those poor decisions. If your parents don't act in that capacity, the only way to learn is in hindsight.
Not to say everyone under 25 is blameless, simply that it's easy to judge others and ourselves in retrospect. But 17/18 year olds need protection and help and not every parent is capable or willing to do that.
-
The guy was good at school, but now he is finding out that real life is not like school. He's going to have to start setting his own goals and teaching himself the skills he needs to acquire to reach them.
-
life is cruel and guess what's next? THEN YOU DIE!!!!
all our dreams and ambitions often amount to nothing. for every winner out there thousands lose and suffer so the winner may bask in glory and envy.
how did this happen? well that's simple: it all began with that race in the womb.
so yes, we are all responsible for our own failures for we started it all by winning that race.
life is cruel.
-
Sounds like a double standard.
Uh, yes, it's a double standard. We hold the government to a different standard than we hold private organisations, isn't it obvious that we should? If something is socially beneficial and profitable then we (generally) let private organisations do it, if something is socially beneficial but unprofitable then we accept that the government might have to do it. If something is socially harmful but profitable, we also expect the government to prevent private organisations from doing it.
-
It doesn't matter if it is student aid from Uncle Sam or not. You're not the arbiter of who gets loans and who doesn't. I'd much rather see free education than such huge restrictions with obvious downsides. Sorry just getting frustrated with more hyperbole instead of seeing you actually think out your proposal and the consequences.
In only matters if care about taxes being spent in an unmustachian manner. If it was private money, lend away!
You never said you've give that hopeful student a loan, so why expect taxpayers to give out blank checks? Sounds like a double standard.
Also, what is free education? Are there professors that work for free?
Basically I feel (very passionately) that any education anyone wants should be available.
It is available to anyone. What you are really saying is that you feel anyone should get a free ride on taxpayer dime.
Red herring. Whether I'd give a loan out or not has no bearing on your crappy proposal. Free as in on the tax payers dime. It seems to me that this is just another instance of some someone saying I don't like something so it should stop. Sorry it is a democratic system. There will be all sorts of shit you don't like that they'll spend money on. And if it's on a philosophy major it is no skin off your back since they have to pay back the money anyway. So I ask again, what is your problem with the current system? Why would you rebuild it in such a way to be restrictive?
It ("free" education) is a hell of a better proposal than yours which limits what people can learn for no other reason that it seems to anger you.
-
I once heard from a reliable source that Walmart prefers to hire greeters with degrees in Philosophy over lesser degrees like Art Appreciation, Modern Dance, Womyn's Studies, or Film.
Ha! Maybe it's because they think those other degrees are more useful, and philosophy graduates are less likely to later find work elsewhere? ;-)
To the contrary: Last time I looked, a bachelors degree in Philosophy was associated with a substantially higher mid career median income (81k) than, for example, a bachelors degree in information technology (75k) or business management (72k).
Of course, people with bachelors degrees in philosophy very rarely work as philosophers proper but many go on to become lawyers, administrators, public servants, and even physicians.
One could argue that this record of success in life is due to the smarter ones choosing philosophy to start with but I guess some credit has to be given to the subject itself.
In any case, you are more likely to find Walmart employees with philosophy degrees in the corporate office than at the store entrance.
http://www.philosophy.northwestern.edu/undergraduate/documents/WHY_Major_in_Philosophy_leaflet.pdf
-
I know humour is hard to spot on the internet, but usually "Ha!" and ";-)" are clues.
-
What I'm hearing is that he isn't progressing in the world as fast as he expected. He isn't poor -- he's eating, driving a car, living indoors. But he hasn't made VP, isn't driving a company car, isn't able to jet to Hawaii for Christmas. That's not poverty. That's being in an entry-level job.
He complains that "people ought to know" that people like him aren't making it in the world, that they aren't living a rock-star life. Duh. Does he think the rest of us come home every day to find that the post man has dropped off piles of cash money? That's being immature and ungrateful for what he has.
Could he have made better choices? Of course!
I do somewhat agree with the poster who says student loans are just a bad, bad idea all around. Yes, plenty of research exists to show that 18-21 year olds' brains are still developing, and they aren't genuinely "adults" mentally in the same sense as those of us who are older. Yes, they are more likely to take risks and are less likely to calculate the consequences. This isn't debatable. It's brain research. Not new research, not questionable research. Fact.
I hear you when you say, "What's it to you? It's the individual student who suffers if he has to pay back $$$ on a worthless degree." But that's not true. When MANY individuals prosper, the country prospers: Those people pay more taxes, we as a society pay out fewer benefits, citizens are happy and participate in the world of consumerism. In contrast, when MANY individuals are not prospering because they're paying back excessive loans (or mortgages or credit cards), then we as a society run into trouble.
Free education? Frankly, I say no. We have free education K-12, and people don't value what they don't pay for. I see it constantly. I do think college could be less expensive without loss of quality, but free -- no. We have financial aid and community college and so many other ways to make college affordable, but the people in the most need don't use many of those.
-
Wah, wah, wah.
Having just raised a teenager through high school graduation, I have very little sympathy with the plight of the 20-somethings who aren't happy. (Due to their entitlement issues and lack of clear planning.)
The teenager we've raised has a full ride to a decent-enough state university (where she plans to study business with a focus on hospitality), has savings in the bank for incidentals, and is opening her very first roth IRA this week. She's 19, has worked since she turned 16, and currently makes between $13-$30/hr as a server at a high end restaurant. She also has side jobs where she's using her hobby/talent to generate a couple thousand extra per year. She drives a paid for 13 year old car. She'll have a roommate to save on expenses. She has a budget, an emergency fund and I can tell -- will be wealthy one day because of her ability to WORK HARD and save even harder.
For what it's worth, I have this same teenager. My version is 20 and only halfway through college, but she's doing everything I expect her to do at this point in her life.
However, I also teach high school seniors, and not all teenagers are capable of this level of maturity and planning. When I was in school I thought some people were just too lazy to do what was necessary, but now as a teacher I see that a good percentage are just not capable academically. I've got one sweet little girl right now who's taking the lowest level of my class possible, and she's working her butt off, but she's just stupid. And she doesn't know it. Another portion is still uber-immature and makes bad choices.
The upshot: Your kid and my kid are doing well, and that's great . . . but literally not everyone is capable of doing what they're doing.
-
I know humour is hard to spot on the internet, but usually "Ha!" and ";-)" are clues.
I know. My comment was directed at libertarian not at your response. I thought he was serious in a way.
The problem is that many think that philosophy is a prime example of a useless pursuit and we may have some younger readers who may not know how wrong that is.
My advice is: If you think of going into a technical field, law or business and do not like to be told what to do, get a degree in philosophy first - then you are more likely to eventually get to tell others what to do.
-
I think a core issue here is how the price of school has far outpaced its long-term value to the student. Many kids are graduating with huge debt and a worthless degree.
This is a sweeping generalization. Some degrees are never going to bring big bucks, but that's not true of every discipline.
-
Philosophically speaking, whether you're rich or poor is your decision. Really. An African tribesman with enough tools, skills, and health to feed himself and his family plus some others would consider himself rich. Somebody would have to give him a plasma TV with 130 cable channels to make him feel otherwise. The average American dropped into the same situation would definitely feel poor.
I sympathize with today's generation and their absurd college debts. It's one of those basic assumptions of the 20th century that college education equaled a path to easy street. And it was indeed true for decades. But as this was ingrained into the population demand went up. Increased demand built more schools which started to operate as businesses. Add the incredible administrative bloat and college education costs soared even as the quality of the education declined. Careers that required only a HS education demanded a BA. Instead of searching for the idealistic whole person liberal arts education colleges once had you needed to grab a money making degree to keep up with the loan payments. So basically anyone majoring in Art, Literature, Language, Theology, History, Philosophy, etc. is just setting themselves up for failure unless they already have major talent. But the specialist who tracks only on Computer Science, Engineering, and Business is missing out. This is a serious source of non-mustachians getting on the hamster wheel of consumer debt, work, whine, rinse, repeat. This is what trapped me when I graduated - and college wasn't as expensive then. It's easy to feel angry and resentful, like you've been cheated. There's plenty of blame to go around.
But in the end blame doesn't help you much. If it did, Pres. Bush and Pres. Obama between themselves would have made every American citizen millionaires. If you assume responsibility for your life, you will erroneously make yourself miserable over situations out of your control. But you can engineer outcomes that will far outweigh them.
-
I sympathize with today's generation and their absurd college debts. It's one of those basic assumptions of the 20th century that college education equaled a path to easy street. And it was indeed true for decades. But as this was ingrained into the population demand went up. Increased demand built more schools which started to operate as businesses. Add the incredible administrative bloat and college education costs soared even as the quality of the education declined. Careers that required only a HS education demanded a BA. Instead of searching for the idealistic whole person liberal arts education colleges once had you needed to grab a money making degree to keep up with the loan payments. So basically anyone majoring in Art, Literature, Language, Theology, History, Philosophy, etc. is just setting themselves up for failure unless they already have major talent. But the specialist who tracks only on Computer Science, Engineering, and Business is missing out. This is a serious source of non-mustachians getting on the hamster wheel of consumer debt, work, whine, rinse, repeat. This is what trapped me when I graduated - and college wasn't as expensive then. It's easy to feel angry and resentful, like you've been cheated. There's plenty of blame to go around.
Looks a lot like the Red Queen Hypothesis (http://en.wikipedia.org/wiki/Red_Queen_hypothesis) to me.
Now, here, you see, it takes all the running you can do, to keep in the same place.
- Lewis Carroll
-
The upshot: Your kid and my kid are doing well, and that's great . . . but literally not everyone is capable of doing what they're doing.
Ah yes. Such is life.
Some kids are going to do better than others, whether it is from persistence, intelligence, a combination of the two. But I don't see how it is possible to level the playing field. There will always be people who just *don't get it* and there will be others who don't care. Tons of kids coming out of college are disappointed in their starting out lifestyle, but they're not delivering the goods. Not a lot of problem solving skills, not a lot of independence --- I blame helicopter parenting & kids never having to endure any hardship at all until they're facing a low paying career and massive student loans.
-
It doesn't matter if it is student aid from Uncle Sam or not. You're not the arbiter of who gets loans and who doesn't. I'd much rather see free education than such huge restrictions with obvious downsides. Sorry just getting frustrated with more hyperbole instead of seeing you actually think out your proposal and the consequences.
In only matters if care about taxes being spent in an unmustachian manner. If it was private money, lend away!
You never said you've give that hopeful student a loan, so why expect taxpayers to give out blank checks? Sounds like a double standard.
Also, what is free education? Are there professors that work for free?
Basically I feel (very passionately) that any education anyone wants should be available.
It is available to anyone. What you are really saying is that you feel anyone should get a free ride on taxpayer dime.
Red herring. Whether I'd give a loan out or not has no bearing on your crappy proposal. Free as in on the tax payers dime. It seems to me that this is just another instance of some someone saying I don't like something so it should stop. Sorry it is a democratic system. There will be all sorts of shit you don't like that they'll spend money on. And if it's on a philosophy major it is no skin off your back since they have to pay back the money anyway. So I ask again, what is your problem with the current system? Why would you rebuild it in such a way to be restrictive?
It ("free" education) is a hell of a better proposal than yours which limits what people can learn for no other reason that it seems to anger you.
No need for projection, my indignant friend.
So to sum up, in your world mustachian principles should only apply to the individual, not the state (i.e. other people's money). Got it.
Let me know when you find those free professors. I'm "hopeful" you will find them.
Feel free to keep avoiding my points. You want a restrictive system that judges what education is worthwhile to fund. Got it.
-
It doesn't matter if it is student aid from Uncle Sam or not. You're not the arbiter of who gets loans and who doesn't. I'd much rather see free education than such huge restrictions with obvious downsides. Sorry just getting frustrated with more hyperbole instead of seeing you actually think out your proposal and the consequences.
In only matters if care about taxes being spent in an unmustachian manner. If it was private money, lend away!
You never said you've give that hopeful student a loan, so why expect taxpayers to give out blank checks? Sounds like a double standard.
Also, what is free education? Are there professors that work for free?
Basically I feel (very passionately) that any education anyone wants should be available.
It is available to anyone. What you are really saying is that you feel anyone should get a free ride on taxpayer dime.
Red herring. Whether I'd give a loan out or not has no bearing on your crappy proposal. Free as in on the tax payers dime. It seems to me that this is just another instance of some someone saying I don't like something so it should stop. Sorry it is a democratic system. There will be all sorts of shit you don't like that they'll spend money on. And if it's on a philosophy major it is no skin off your back since they have to pay back the money anyway. So I ask again, what is your problem with the current system? Why would you rebuild it in such a way to be restrictive?
It ("free" education) is a hell of a better proposal than yours which limits what people can learn for no other reason that it seems to anger you.
No need for projection, my indignant friend.
So to sum up, in your world mustachian principles should only apply to the individual, not the state (i.e. other people's money). Got it.
Let me know when you find those free professors. I'm "hopeful" you will find them.
Feel free to keep avoiding my points. You want a restrictive system that judges what education is worthwhile to fund. Got it.
The market judges that, as has already been stated. Maybe the market is just a big meany and needs a big dose of hopefulness.
*looks behind couch* Nope. No free professors back there.
No what you are proposing is more restrictive. Back to your original post that started this.
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
Are you suggesting that someone applying for education loans go through the same process as someone applying for a mortgage to purchase a home? Not a terrible idea, actually.
Is more restrictive than the "market" is currently. The market as it is set up right now doesn't give a rats ass what your degree will be in, the market doesn't care about your future earning potential which is what you were stating here -
I don't have that list in front of me, but it would probably be similar criteria you would use if a "hopeful student" asked you for $100,000 because they wanted their masters in underwater basket weaving.
So again. Why do you want a more restrictive system that would choose which degrees are worth student loans? Why restrict what education a person chooses to have?
-
The only thing worse than young people is people whose social values differ slightly from mine!
-
Because it may cause hopeful students to think a bit more about what they want to do with their lives and perhaps avoid racking up debt earning a "degree" that makes it very difficult to pay off that debt.
Actually, given enough time the market should take care of this, too. Why would someone go $200,000 in debt for a worthless degree? Common sense should take over at some point. And thankfully, as MMM has pointed out, there are alternatives to the 4 year degree that are significantly cheaper.
Unfortunately "common" sense is a very unusual thing.
-
Because it may cause hopeful students to think a bit more about what they want to do with their lives and perhaps avoid racking up debt earning a "degree" that makes it very difficult to pay off that debt.
Actually, given enough time the market should take care of this, too. Why would someone go $200,000 in debt for a worthless degree? Common sense should take over at some point. And thankfully, as MMM has pointed out, there are alternatives to the 4 year degree that are significantly cheaper.
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them. Who are you to decide what is worthless or not? What's common sense in the scenarios of all the people who want to contribute to arts or god forbid not be in STEM or business?
The world is made up of all the different people who have pursued all sorts of different degrees. That should never be restricted for some poorly thought out idea of saving people from themselves. It's not your decision to make, it's not anyone's but the individual making that decision. Don't take that way from them. If they think they made a mistake so what? It has given them an opportunity to learn.
The system works as is right now.
-
Because it may cause hopeful students to think a bit more about what they want to do with their lives and perhaps avoid racking up debt earning a "degree" that makes it very difficult to pay off that debt.
Actually, given enough time the market should take care of this, too. Why would someone go $200,000 in debt for a worthless degree? Common sense should take over at some point. And thankfully, as MMM has pointed out, there are alternatives to the 4 year degree that are significantly cheaper.
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them. Who are you to decide what is worthless or not? What's common sense in the scenarios of all the people who want to contribute to arts or god forbid not be in STEM or business?
The world is made up of all the different people who have pursued all sorts of different degrees. That should never be restricted for some poorly thought out idea of saving people from themselves. It's not your decision to make, it's not anyone's but the individual making that decision. Don't take that way from them. If they think they made a mistake so what? It has given them an opportunity to learn.
The system works as is right now.
Sure let the individual make this decision, if it turns out to be a mistake I hope this individual own up to it and suck it up. Knowledge is priceless (actually everything has a price but we won't go there), I am OK if people make decisions if they are prepared to pay the price. If not? well then they don't get to make decisions, as simple as that.
Freedom to choose is a priviledge not a right, some people don't seem to grasp that.
-
Because it may cause hopeful students to think a bit more about what they want to do with their lives and perhaps avoid racking up debt earning a "degree" that makes it very difficult to pay off that debt.
Actually, given enough time the market should take care of this, too. Why would someone go $200,000 in debt for a worthless degree? Common sense should take over at some point. And thankfully, as MMM has pointed out, there are alternatives to the 4 year degree that are significantly cheaper.
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them. Who are you to decide what is worthless or not? What's common sense in the scenarios of all the people who want to contribute to arts or god forbid not be in STEM or business?
The world is made up of all the different people who have pursued all sorts of different degrees. That should never be restricted for some poorly thought out idea of saving people from themselves. It's not your decision to make, it's not anyone's but the individual making that decision. Don't take that way from them. If they think they made a mistake so what? It has given them an opportunity to learn.
The system works as is right now.
Sure let the individual make this decision, if it turns out to be a mistake I hope this individual own up to it and suck it up. Knowledge is priceless (actually everything has a price but we won't go there), I am OK if people make decisions if they are prepared to pay the price. If not? well then they don't get to make decisions, as simple as that.
Freedom to choose is a priviledge not a right, some people don't seem to grasp that.
A) Who gets to choose who is prepared or not to "pay the price" as you put it?
B) Freedom to choose is not a right? What? So some people should have their freedom to choose taken away from them because they chose something you or someone else deems bad/worthless/economically unwise? If it is a privilege then who is granting said privilege? I strongly disagree with this point. My ability to choose my life is not a privilege to be decided by someone else if my decisions were good or not. It is my right to lead my life as I wish. No one decides that for me.
-
yup, there's a saying that goes something like this "where you stand depends on where you sit."
so believe and advocate whatever suits you the best. life goes on regardless.
-
yup, there's a saying that goes something like this "where you stand depends on where you sit."
so believe and advocate whatever suits you the best. life goes on regardless.
What?
-
I see a lot of common threads.
I didn't have a clue what I was doing until I was 35. at 38 I can barely be said to have a positive net worth, though I'm getting there faster than a lot of peers.
My parents didn't teach me about financial matters. My peers weren't in a place to. I didn't have the internet :P.
Society as a whole isn't geared to teach you real world skills. Information is a bit more free now, which I love.
However the person mentioned in the original post just needs to suck it up and move on. Whining isn't going to solve it. I'm an expert :P
-
Are people poor because they have "Bad Luck" (assuming you don't want to be poor) having iterated towards a 'negative' direction by making poor* decisions. Or, can you create your own "Good Luck" by making (on balance) decisions that iterate you towards a 'positive' or 'rich' direction?
Arrrrrg, my SO was one of the worst offenders... when we first started dating, he constantly told me how he had the worst luck. Every time he tells me he has bad luck, I explain to him how his actions led to his "bad luck". It wasn't long before he stopped blaming bad luck and started working towards better choices.
I work as an auditor. From an auditor's prospective, bad luck is the equivalent of inherent risk... it's a risk that is out of your hands that couldn't be prevented.
-
On one hand, you have poor people making poor choices that keep them poor. On the other, you have a system that rewards poor decisions with immediate gratification.
If you start well off, and you end up poor, that's pretty much either rotten luck or bad choices. If you start poor, and you're still poor, you have to fight an incredibly vicious cycle to break out.
What's quite interesting, though, is that entire subcultures here have the mindset of 'poor people', whereas other subcultures completely avoid the mindset and the poor choices, seemingly ignoring the system that pushes them to make them.
For example, consider this issue. You need to find an apartment. However, all the apartments need a year's worth of verifiable residency, and you need to put a deposit down. However, you've been moving from place to place and you rarely have a permanent address, and due to no credit, nobody's giving you a checking account so you can't pay your deposit with a check, and they refuse cash. So no address and no credit means no apartment, and no rent payments and no checking account means no credit, and no credit and no address means no checking account. Then it gets worse: You have no account so you can't get a direct deposit, so your choices are either to take a check that you have to cash using a cashing service (read: liquor store or loan shark) who will take $5 + 2%, or to get a prepaid card that is in cahoots with your employer for kickbacks that charges you a 2% balance fee and $1 per transaction and $2 to check your balance. What the fuck do you do?
(As an aside: Why do you think disability fraud is so rampant? Why do you think that we as in the government put up with it? It's because a $700 a month check permanently removes an unemployed, often unemployable (based in attitude) person from the will-make-trouble list; it's because $700 a month for a fake disability is way cheaper than prison.)
There's a way out of this hole but it requires a lot of hoops to jump through. A seriously large amount. Immigrants do it because we remember standing in fucking bread lines and hoping there would be bread when it was our turn, and hopefully not filled with soggy paper to weigh more so it can be more expensive. (You think that's a joke, and not something that happened over and over again?) Immigrants do it because they've been taught by the system to jump through much bigger hoops, and more of them, and some of them on fire in front of an audience.
And some people who grew up here are able to figure it out, one hoop at a time, and get out of the cycle.
But most people let it become ingrained and it rules their lives, and we can look down on all the poor choices they make, and maybe we should look down on all the poor choices they make, but we have to remember that sometimes the poor choices are the only escape they think they have from the reality of Fuck You.
-
What's a poor person? For one, someone who says they are poor. Trust me: I both get and empathize with people who live at or below the poverty line and I get hunger and an inability to pay for shelter, food, clothing....I see it every day. And it really saddens me.
But in THIS case, the POOR element is this person's mindset.
Wayne Dyer: "When you change the way you look at things, the things you look at change."
Here's my gift...a free copy of "Think and Grow Rich" LINK: https://ia600209.us.archive.org/6/items/Think_and_Grow_Rich/think-and-grow-rich-napoleon-hill.pdf
Trust me that "rich" has little to do with money -- money is a mere means of exchange. Abundance has everything to do with mindset.
-
In some cases, being poor is your own fault. But the OP'S friend isn't poor. He's got a cash flow problem but three incredible assets to leverage in overcoming his situation: health, an education and a future.
-
I think what a lot of people are missing is that this person is 35, not 25. I'm not surprised he's feeling a little bitter at this point in his life. However, he's also had time to realize that what he's doing now is not getting him to where he wants to be. Instead of complaining about it, better to come up with a new plan.
-
What's a poor person? For one, someone who says they are poor. Trust me: I both get and empathize with people who live at or below the poverty line and I get hunger and an inability to pay for shelter, food, clothing....I see it every day. And it really saddens me.
But in THIS case, the POOR element is this person's mindset.
Wayne Dyer: "When you change the way you look at things, the things you look at change."
Here's my gift...a free copy of "Think and Grow Rich" LINK: https://ia600209.us.archive.org/6/items/Think_and_Grow_Rich/think-and-grow-rich-napoleon-hill.pdf
Trust me that "rich" has little to do with money -- money is a mere means of exchange. Abundance has everything to do with mindset.
So, my family member who owns a million dollar home, has 3 mill in the bank and travels the world every month is poor because she thinks she is? (true story... She actually refers to herself as "living in poverty").
-
What's a poor person? For one, someone who says they are poor. Trust me: I both get and empathize with people who live at or below the poverty line and I get hunger and an inability to pay for shelter, food, clothing....I see it every day. And it really saddens me.
But in THIS case, the POOR element is this person's mindset.
Wayne Dyer: "When you change the way you look at things, the things you look at change."
Here's my gift...a free copy of "Think and Grow Rich" LINK: https://ia600209.us.archive.org/6/items/Think_and_Grow_Rich/think-and-grow-rich-napoleon-hill.pdf
Trust me that "rich" has little to do with money -- money is a mere means of exchange. Abundance has everything to do with mindset.
So, my family member who owns a million dollar home, has 3 mill in the bank and travels the world every month is poor because she thinks she is? (true story... She actually refers to herself as "living in poverty").
lol, i actually like this mentality. only by admitting the glass is half empty can we lust for more to be in the glass.
omg that was so zen.
-
What's a poor person? For one, someone who says they are poor. Trust me: I both get and empathize with people who live at or below the poverty line and I get hunger and an inability to pay for shelter, food, clothing....I see it every day. And it really saddens me.
But in THIS case, the POOR element is this person's mindset.
Wayne Dyer: "When you change the way you look at things, the things you look at change."
Here's my gift...a free copy of "Think and Grow Rich" LINK: https://ia600209.us.archive.org/6/items/Think_and_Grow_Rich/think-and-grow-rich-napoleon-hill.pdf
Trust me that "rich" has little to do with money -- money is a mere means of exchange. Abundance has everything to do with mindset.
So, my family member who owns a million dollar home, has 3 mill in the bank and travels the world every month is poor because she thinks she is? (true story... She actually refers to herself as "living in poverty").
honeymomma -- That family member is poor in every sense of the word, and I question how much her/his total net worth will grow over time. Your family member needs to be dropped off in the middle of nowhere in Liberty City to get a bit o' perspective. Why Liberty City? I had a rental car break down there many years ago before there were mobile phones. Every pay phone for several city blocks was ripped out and non-functional. I didn't get killed. I did get... a bit o' perspective.
-
I once heard from a reliable source that Walmart prefers to hire greeters with degrees in Philosophy over lesser degrees like Art Appreciation, Modern Dance, Womyn's Studies, or Film.
Ha! Maybe it's because they think those other degrees are more useful, and philosophy graduates are less likely to later find work elsewhere? ;-)
To the contrary: Last time I looked, a bachelors degree in Philosophy was associated with a substantially higher mid career median income (81k) than, for example, a bachelors degree in information technology (75k) or business management (72k).
Of course, people with bachelors degrees in philosophy very rarely work as philosophers proper but many go on to become lawyers, administrators, public servants, and even physicians.
One could argue that this record of success in life is due to the smarter ones choosing philosophy to start with but I guess some credit has to be given to the subject itself.
In any case, you are more likely to find Walmart employees with philosophy degrees in the corporate office than at the store entrance.
http://www.philosophy.northwestern.edu/undergraduate/documents/WHY_Major_in_Philosophy_leaflet.pdf
The smarter ones choose philosophy? Really? From the data you presented, philosophy isn't very competitive salary wise (starting or mid career) with science and engineering. That is based on 2008 data. I suspect 2014 data is similar. And 1981 data (when I started college) was the same (I'm spying a trend here). Science and engineering, in general, were the best choices. It seems pretty consistent over the long term- if you want a job that pays well, get your BS in science or engineering. Or have a damned goof plan for how you are going to turn your nearly useless undergrad Philosophy degree into something lucrative when you grow up.
There is a catch to this, of course. Science and engineering majors, even at mediocre state schools, tend to be very challenging. No "easy A's."
I actually know of one guy who went into philosophy. He got a PhD in Philosopy of Science (it took him FOREVER to finish). He was an intelligent guy, but nowhere near the top of the heap. At age 51, he is currently teaching philosophy at a hyphenated-state U. I think he makes about a $1.25 over minimum wage (I kid, sort of). The best and brightest all went into engineering, science, and medicine.
Look, if you go into philosophy, or some other soft major, as an undergrad, and plan to use it as a springboard to an advanced degree in something more substantial (law, business, etc), that's great. But be aware that a BA in Philosophy, by itself, is likely to lead to a job in the fast paced world of "Want fries with that?"
And if you think I'm being harsh, you're right. I've seen far too many kids, even bright kids, go through 4-years of college getting lame liberal arts degrees (many of which are far more pathetic than philosphy), and finding themselves, for all practical purposes, unemployable after 4-6 years of high cost education.
I guess my point is, if you are graduating from HS, take some time to PLAN, don't just go to college and get a "feel good" degree, then sit there looking stunned when no one wants to hire you at age 22, with your $40,000 Modern Asian Dance Philosophy degree from from East Central Western State U-Cookeville.
Make your plan when you are in High School, not 3 weeks before graduation from good ol' ECWSU-C, after you have run up tens of thousands in debt and have no prospects other than working at the local Walmart.
-
I guess my point is, if you are graduating from HS, take some time to PLAN, don't just go to college and get a "feel good" degree, then sit there looking stunned when no one wants to hire you at age 22, with your $40,000 Modern Asian Dance Philosophy degree from from East Central Western State U-Cookeville.
I have to wonder, though, how many major in Modern Asian Dance Philosophy because they're actually overwhelmingly interested in it, versus those who figure it'll be a bunch of skate courses to take while they pursue their real major - partying!
-
An acquaintance is frustrated with life. He graduated from an expensive prestigious school and took out loans to attend it. The course of study was not one that anyone would think would lead to a high pay check.
This person finds himself living in a small apartment, working in a space he doesn't like, and generally feeling trapped by how little money he makes.
He thinks he's making a political statement by complaining because, basically, "Americans need to know that people like me are not having good lives."
One complaint is that so much is taken from his paycheck that he has little left over to spend and has to live with a relative.
All I could see in this situation were the responses you all would give:
Bike to work. Don't drive.
Change jobs. Keep looking until you find something else.
Reduce expenses.
This guy seems to think it's the fault of other people (I am not sure who? The government?) that he took out loans to attend a fancy school and now those loan payments take up most of his paycheck.
What are your thoughts?
The only thing I can think of is that 18 year olds--or even 20 year olds--should not be allowed to get loans for education without some excellent education as to how those loans will affect their future.
I sympathize with his plight. As far as he knew, he was doing the right things. I'm assuming he performed well in high school, good SAT scores, and went to a good college thinking it would lead to a better life. Obviously, society has failed him, and many others like him, by giving him unrealistic expectations about school/life/earnings.
Every day we hear on the news that more loans need to be made available to students, but nothing is mentioned regarding how to educate people to make good decisions. These loans never go away! Many people don't understand this. Ultimately, he has to pay the debt, one way or another. In some ways he is stuck. Going back to school for a better course of study would make him dig an even deeper hole, while continuing along this path he'll never be able to get ahead.
I admit, if that were me, I'd feel like everyone had lied to me (high school teachers/counselors/college admissions/etc). It really is a failure for society, because he will likely never be a productive citizen... at least not in a way that exceeds the direct cost of his loans.
How to fix this problem? Force every kid to take a seminar and pass a basic financial literacy test to prove they understand what it means to take out a loan, how much they'll have to earn to pay it back (at a minimum), and reenforce in big, bold print, "You cannot get rid of these in bankruptcy!"
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
You don't have a right to an affordable education. The only rights you have are clearly spelled out in the US Constitution and the Bill of Rights. EVERYTHING else is up to the individual. If you partake in "groupthink", like most people do these days, you will fall into the "victim" and "entitlement" trap. With all of our freedoms in this Country and all the information that is available TO ALL, there is no reason whatsoever, except for legitimate disabling circumstances, to prosper and live as you wish in America.
All the rest is laziness, lethargy and bullshit.
-
Why should someone be able to study anything they want for free? Should I be able to eat anything I want for free? Eating's necessary for life, post-secondary education isn't. (Not saying I oppose things like food banks... but that's a far cry from walking into the fancy steakhouse and expecting a fine porterhouse for free, just because you want one.)
What if someone just wanted to study and study for the rest of their life, with no intention of making a career out of any of it? We the people should pay for that? There were a lot of classes in college I thought might be fun, but that wouldn't get me towards my degree, and thus weren't worth paying for, in my opinion. If they were free? Why not?
I wouldn't necessarily have a problem with it if there were some nationwide shortage of X profession, for there to be a limited government subsidy available to train people for that profession, especially if it keeps us from having to outsource it. But paying for somebody to study whatever they want, just because they want to? No freakin' way.
-
The upshot: Your kid and my kid are doing well, and that's great . . . but literally not everyone is capable of doing what they're doing.
Ah yes. Such is life.
Some kids are going to do better than others, whether it is from persistence, intelligence, a combination of the two. But I don't see how it is possible to level the playing field. There will always be people who just *don't get it* and there will be others who don't care. Tons of kids coming out of college are disappointed in their starting out lifestyle, but they're not delivering the goods. Not a lot of problem solving skills, not a lot of independence --- I blame helicopter parenting & kids never having to endure any hardship at all until they're facing a low paying career and massive student loans.
For quite a few, the answer is extra time and/or lower expectations. LOTS of kids are capable of doing well . . . but they aren't going to catch onto things as quickly as the top-of-the-class kids, or they lack the emotional maturity to get going at a young age, or they'll do well -- in a trade, perhaps, but will never make it in a professional job.
Yes, the helicoptering crew is a part of the problem -- that is very real -- but I see many, many more who are "behind" for the opposite reason: They haven't received enough parenting. They don't spend enough time with their parents, don't receive much guidance from their parents, often don't even eat meals together as a family -- and they're just kind of floundering, trying to figure things out on their own. Those kids are much more numerous than the coddled, over-parented kids.
-
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them.
Ah, but people who earn art history degrees tend to think that they're going to be able to make money from that degree . . . and that is often not true. In the worst cases, we as a society end up with people who can't fully participate in society and the economy because they're paying back excessive debt and aren't earning enough to support themselves.
A story about a student of mine who's going to study art -- specifically furniture design -- in college: He said he'd been concerned about being able to make a living with this degree, so he researched it (with Google). I'm not sure my numbers are correct, but he said that a typical person with this degree earns $50,000-90,000. So he figures that if those numbers are "typical", a person who really has talent and really works at it could do more -- may be $150,000! I tried to point out the flaws in this thought process, but he was dead-sure of his facts.
-
Because it may cause hopeful students to think a bit more about what they want to do with their lives and perhaps avoid racking up debt earning a "degree" that makes it very difficult to pay off that debt.
Actually, given enough time the market should take care of this, too. Why would someone go $200,000 in debt for a worthless degree? Common sense should take over at some point. And thankfully, as MMM has pointed out, there are alternatives to the 4 year degree that are significantly cheaper.
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them. Who are you to decide what is worthless or not? What's common sense in the scenarios of all the people who want to contribute to arts or god forbid not be in STEM or business?
The world is made up of all the different people who have pursued all sorts of different degrees. That should never be restricted for some poorly thought out idea of saving people from themselves. It's not your decision to make, it's not anyone's but the individual making that decision. Don't take that way from them. If they think they made a mistake so what? It has given them an opportunity to learn.
The system works as is right now.
I will say that one of the wealthiest guys I know (houses in Aspen, Honolulu, and San Francisco and tens of millions of investments) got a degree in Chinese art history from an Ivy league school. It turns out that a white guy who is fluent in Mandarin and has deep understanding of Chinese culture is very valuable resource for companies doing business n China. I don't know for a fact but I bet his parents at times rolled their eyes over his choice of a major.
That said I find it strange that you don't think society has huge interest and I'd argue responsibility from preventing young people from putting themselves deeply in debt that have little hope repaying. The single most important criteria for figuring out if somebody can repay a loan is to assess their current and future income. The average salaries for petroleum engineers is roughly 3x that of art history majors, and the unemployment rate for art history major several times higher. By any lending standard an Engineer major is lower credit risk than an art history major.
My largest bond holding is Sallie Mae bonds, so prior to making the investment I did research in how student loans worked. A side product of ACA was reducing the government subsidy for private lenders who made student loans, but more importantly in many cases student loans are made directly from Uncle Sam. While there are plenty of exceptions as general rule, when student default, gets and interest rate reduction, or stretches out payments, banks or Sallie Mae take the first 2% of the loss, with the tax payers picking up the tab for the other 98%. Since, ACA was passed Uncle Sam general acts as the lender and such we tax payers are on the hook for any default or loan forgiveness.
There is 1.2 trillion in student loans, second only behind mortgage debt. That works out to be $11,000 per household in the US. Unlike in the case of mortgage where the loans were bundled together and sold as mortgage backed securities to investors who took steep losses during the crisis student loan. I believe that vast majority of student loan is held by the government (aka the taxpayers) or backed by the government. In any event the people that are responsible for bailing out bad student loans is ourselves.
We can't do anything about bad loans made in the past, but we sure can and should insist on being smarter about lending in the future.
-
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them.
Ah, but people who earn art history degrees tend to think that they're going to be able to make money from that degree . . . and that is often not true. In the worst cases, we as a society end up with people who can't fully participate in society and the economy because they're paying back excessive debt and aren't earning enough to support themselves.
A story about a student of mine who's going to study art -- specifically furniture design -- in college: He said he'd been concerned about being able to make a living with this degree, so he researched it (with Google). I'm not sure my numbers are correct, but he said that a typical person with this degree earns $50,000-90,000. So he figures that if those numbers are "typical", a person who really has talent and really works at it could do more -- may be $150,000! I tried to point out the flaws in this thought process, but he was dead-sure of his facts.
This is going to sound condescending, but I don't apologize for it. Does he really think he's that special/talented?
Who in their right mind sees an "average" statistic and thinks they are TWICE as talented as average? Does he realize these statistics are probably mid-career stats as well? It means a new hire/entry level may be in the 40-50 range... or maybe even lower.
Too bad... can't educate someone who has the rosy dreamy eyes over something.
-
It's hard to say.. most can only be determined on a case by case basis but I'd say in more than 50% of the cases, it's the individual's fault or the individual is to blame for most of it. There are some situations where it's not entirely their fault (i.e. having a rare disease.)
-
My Dad was a mechanic when we were growing up. We were poorer than church mice, yet learnt the values of family, buying second hand, biking/walking, cheap reliable cars and enjoying a simple life.
I'm a Mum now, and have just reached $1M in assets.
The trick was to be optimistic about improving your lot. Realise it's in your power to set goals! And then, work hard to reach those goals, show determination, conquer life's challenges with a happy heart, get up when you're down, set a budget, continue to bike everywhere, continue to buy second hand.
My son (12yo) makes his own lunch and has a paper round, and I'm teaching him about income less expenses equals savings. When he saves $1000 I'll teach him about shares and we'll buy some with his money. If he owes me money, he pays it back. I think Credit Cards are a huge trap, so have recently gone over to a visa debit.
Poor is not a bad place to start! But poor is a different place than poor mind set!
-
I guess my point is, if you are graduating from HS, take some time to PLAN, don't just go to college and get a "feel good" degree, then sit there looking stunned when no one wants to hire you at age 22, with your $40,000 Modern Asian Dance Philosophy degree from from East Central Western State U-Cookeville.
I have to wonder, though, how many major in Modern Asian Dance Philosophy because they're actually overwhelmingly interested in it, versus those who figure it'll be a bunch of skate courses to take while they pursue their real major - partying!
Yes, I'm sure there is a lot of this. A lot of kids think of college as nothing more than 4-years of screwing off. They take any BS Major and show up for class now and then so they can keep the party going.
-
I will say that one of the wealthiest guys I know (houses in Aspen, Honolulu, and San Francisco and tens of millions of investments) got a degree in Chinese art history from an Ivy league school. It turns out that a white guy who is fluent in Mandarin and has deep understanding of Chinese culture is very valuable resource for companies doing business n China. I don't know for a fact but I bet his parents at times rolled their eyes over his choice of a major.
I'm sure we can point to anectdotal evidence of people who screwed off, or took random useless degrees, and ended up doing well, all day long.
Hell, Bill Gates dropped out of Harvard. Michael Dell and a lot of other successful people dropped out of college.
Two points. Anyone who got into Harvard, whether Bill Gates or "Chinese art history guy" is probably a few steps ahead of the average college schmuck (to say nothing of the guys who don't even go to college). These folks have the tools to do well, even if they screw up at first, and don't follow a traditional path.
The chances of success are far lower for Joe Average going to Random State U, and screwing off, or taking a useless degree.
And unfortunately, for every Bill Gates or Michael Dell, there are a thousand Joe Dipstick's tossing frisbees, drinking beer, and majoring in Primitive Latvian Womyn's Music Appreciation (or similar useless degree).
-
Why are you so obsessed with the notion that all young people are assholes who fuck around instead of getting their work done?
-
I figure this is an opportune time to mention the most popular course at my alma mater was "The Psychobiology of Sex, Love and Attraction".
Was it useful? I don't know, because I was too embarrassed to have it on my transcript, so I cancelled my enrolment.
But if it helps a geek or nerdette find love, then I'm prepared to have a part of my taxes fund it, even if it doesn't lend itself to properly training students for gainful employment for the benefit of society.
-
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them.
Ah, but people who earn art history degrees tend to think that they're going to be able to make money from that degree . . . and that is often not true. In the worst cases, we as a society end up with people who can't fully participate in society and the economy because they're paying back excessive debt and aren't earning enough to support themselves.
A story about a student of mine who's going to study art -- specifically furniture design -- in college: He said he'd been concerned about being able to make a living with this degree, so he researched it (with Google). I'm not sure my numbers are correct, but he said that a typical person with this degree earns $50,000-90,000. So he figures that if those numbers are "typical", a person who really has talent and really works at it could do more -- may be $150,000! I tried to point out the flaws in this thought process, but he was dead-sure of his facts.
So what? We should only fund that which is economically viable? If they're paying back debt and supporting themselves they're participating in the economic framework regardless of degree and the worry is useless. So what if your student wants to get into furniture design? Why is that a problem and why do you automatically assume that he isn't going to fully participate in society? And what does that even mean? You're talking as if there is this huge number of college grads who are living some nomadic subsistence farming existence.
Because it may cause hopeful students to think a bit more about what they want to do with their lives and perhaps avoid racking up debt earning a "degree" that makes it very difficult to pay off that debt.
Actually, given enough time the market should take care of this, too. Why would someone go $200,000 in debt for a worthless degree? Common sense should take over at some point. And thankfully, as MMM has pointed out, there are alternatives to the 4 year degree that are significantly cheaper.
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them. Who are you to decide what is worthless or not? What's common sense in the scenarios of all the people who want to contribute to arts or god forbid not be in STEM or business?
The world is made up of all the different people who have pursued all sorts of different degrees. That should never be restricted for some poorly thought out idea of saving people from themselves. It's not your decision to make, it's not anyone's but the individual making that decision. Don't take that way from them. If they think they made a mistake so what? It has given them an opportunity to learn.
The system works as is right now.
I will say that one of the wealthiest guys I know (houses in Aspen, Honolulu, and San Francisco and tens of millions of investments) got a degree in Chinese art history from an Ivy league school. It turns out that a white guy who is fluent in Mandarin and has deep understanding of Chinese culture is very valuable resource for companies doing business n China. I don't know for a fact but I bet his parents at times rolled their eyes over his choice of a major.
That said I find it strange that you don't think society has huge interest and I'd argue responsibility from preventing young people from putting themselves deeply in debt that have little hope repaying. The single most important criteria for figuring out if somebody can repay a loan is to assess their current and future income. The average salaries for petroleum engineers is roughly 3x that of art history majors, and the unemployment rate for art history major several times higher. By any lending standard an Engineer major is lower credit risk than an art history major.
My largest bond holding is Sallie Mae bonds, so prior to making the investment I did research in how student loans worked. A side product of ACA was reducing the government subsidy for private lenders who made student loans, but more importantly in many cases student loans are made directly from Uncle Sam. While there are plenty of exceptions as general rule, when student default, gets and interest rate reduction, or stretches out payments, banks or Sallie Mae take the first 2% of the loss, with the tax payers picking up the tab for the other 98%. Since, ACA was passed Uncle Sam general acts as the lender and such we tax payers are on the hook for any default or loan forgiveness.
There is 1.2 trillion in student loans, second only behind mortgage debt. That works out to be $11,000 per household in the US. Unlike in the case of mortgage where the loans were bundled together and sold as mortgage backed securities to investors who took steep losses during the crisis student loan. I believe that vast majority of student loan is held by the government (aka the taxpayers) or backed by the government. In any event the people that are responsible for bailing out bad student loans is ourselves.
We can't do anything about bad loans made in the past, but we sure can and should insist on being smarter about lending in the future.
Why don't we actually use facts instead of speculation? Student loans, when put into default, do not automatically fall onto tax payers.
From https://studentaid.ed.gov/repay-loans/default -
What are the consequences of default?
The consequences of default can be severe:
The entire unpaid balance of your loan and any interest is immediately due and payable.
You lose eligibility for deferment, forbearance, and repayment plans.
You lose eligibility for additional federal student aid.
Your loan account is assigned to a collection agency.
The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.
Your federal and state taxes may be withheld through a tax offset. This means that the Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loan debt.
Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process.
Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This process is called wage garnishment.
The loan holder can take legal action against you, and you may not be able to purchase or sell assets such as real estate.
Federal employees face the possibility of having 15% of their disposable pay offset by their employer toward repayment of their loan through Federal Salary Offset.
It will take years to reestablish your credit and recover from default.
Quoting big scary numbers doesn't make it a problem. And nobody has answered my question. Who are you to judge who can take loans out or not? You all seem to assume that students don't have access to this information, that they're not of sound mind when making their decisions. And most of the evidence shows that most people don't default, most people are employed, most people didn't just fuck around getting their degrees, yet all you guys want to focus on is how bad it is to have a bunch of beer swilling liberal arts majors running around unemployed as if it's the next threat to society. WON'T SOMEONE PLEASE THINK OF THE CHILDREN!! Get over yourselves.
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
+1
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
DoD budget is half of what you proclaimed. http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/defense.pdf and accounts for about 20% of the federal budget. Typical scapegoating free of pesky facts.
-
Why are you so obsessed with the notion that all young people are assholes who fuck around instead of getting their work done?
Not all. But many. This ain't exactly new and revolutionary. When I graduated college 30 years ago, the same was true. And I'll bet it was true 30 years before that. Many college students are serious students, with solid academic skills, with clear cut goals, and with plenty of drive and ambition. These are the folks who will lead us for decades to come- they are the academic elite.
Unfortunately, we have loads and loads of college "students" who meet none of these criteria. They are, at best, mediocrities. They go to college because someone told them they should go to college, but have no drive, and no direction. The best of them skate through college, getting good grades in meaningless and easy courses. They are likely marginally employable, at best, at graduation.
The majority screw ups, who probably shouldn't be going to college at all. Getting mediocre/crappy grades in pointless curriculum's, with nearly ZERO ability to get hired after college (unless you count "Want fries with that?" as "employment.)"
Let's be honest, most kids are NOT college material. The mere fact that some sub standard community college or State U is willing to let some lazy, slow witted, dim wit attend (for a fee, of course- let's call him "Bubba"), does not mean that Bubba should be going to college.
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
DoD budget is half of what you proclaimed. http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/defense.pdf and accounts for about 20% of the federal budget. Typical scapegoating free of pesky facts.
Good catch. But it's hardly the only flaw in his logic.
-
Regarding the discussion on free education, I think it's worthwhile to take a look at models in other countries.
My own country isn't currently doing too shabby economically. And yet, university/college education is basically free of charge. There are restrictions, of course. You can't study forever, and you only get one or two shots at it. Conversely, you even get your cost of living subsidized during your studies if your parents don't earn enough to support your education (50% gift, 50% zero-interest loan). But for that, you have to regularly prove that you're advancing in your studies.
I think there are two main factors that make this different situation possible. One is that in our culture, loans that are not balanced by tangible assets are still pretty uncommon (although they are on the increase). Most credit cards are essentially just fancy debit cards. While you can take out loans to fund your education (COL, that is), it is not very common.
Another factor is the idea how education itself is valued. It is not only regarded as an individual thing that a student does for him/herself, but also as something from which society as a whole benefits. That's why esoteric and economically less directly valuable studies get funded, too, so they can keep educating students for free (needless to say, there are always big struggles about which university gets how much funding). But in the end, society is outfitted with all sorts of weird and uncommon competencies and skills, where you can't predict whether or how society will benefit (economically, culturally or otherwise). And more often than not, it does, actually.
Disclaimer: I'm not from a socialist or collectivist culture. :) Also, probably needless to say, I am not arguing that one culture were better than the other. For example I envy entrepreneurship in the US, and how easy it is to start a company.
Regarding the original posting: That person isn't poor, he's just shit with money. And if he's blaming others, he's at fault. Because the behavior of blaming others instead of changing things is itself a sign for avoiding responsibility, so it's pretty clear who's at fault. Q.E.D. ;-)
-
Why should someone be able to study anything they want for free? Should I be able to eat anything I want for free? Eating's necessary for life, post-secondary education isn't. (Not saying I oppose things like food banks... but that's a far cry from walking into the fancy steakhouse and expecting a fine porterhouse for free, just because you want one.)
What if someone just wanted to study and study for the rest of their life, with no intention of making a career out of any of it? We the people should pay for that? There were a lot of classes in college I thought might be fun, but that wouldn't get me towards my degree, and thus weren't worth paying for, in my opinion. If they were free? Why not?
I wouldn't necessarily have a problem with it if there were some nationwide shortage of X profession, for there to be a limited government subsidy available to train people for that profession, especially if it keeps us from having to outsource it. But paying for somebody to study whatever they want, just because they want to? No freakin' way.
Just because someone supports the idea of free education doesn't mean that they support crappy legislation to execute it. You could limit it by years or # of degrees. All of your objections are easily handled by how the system would be setup.
-
Why don't we actually use facts instead of speculation? Student loans, when put into default, do not automatically fall onto tax payers.
From https://studentaid.ed.gov/repay-loans/default -
What are the consequences of default?
Quoting big scary numbers doesn't make it a problem. And nobody has answered my question. Who are you to judge who can take loans out or not? You all seem to assume that students don't have access to this information, that they're not of sound mind when making their decisions. And most of the evidence shows that most people don't default, most people are employed, most people didn't just fuck around getting their degrees, yet all you guys want to focus on is how bad it is to have a bunch of beer swilling liberal arts majors running around unemployed as if it's the next threat to society. WON'T SOMEONE PLEASE THINK OF THE CHILDREN!! Get over yourselves.
If Mike borrows $100,000 of Federally guarantee students loans and doesn't pay them back, who do you think is ultimately takes the loss, the tooth fairy?. No it is the taxpayer who ultimately has to pay the bill. My ex girlfriend, ex husband (an artist ironically) has never paid back a dime of his student loans, and I think next year is eligible for SS, but won't make enough on SS that his SS benefits will be decreased. I sure he will go to his grave with a six digit student loan debt that will be ultimately never be paid.
Of course most people are employed, and most people pay back their loans. During the height of the housing crisis 90% of people were still paying their mortgage on time, less than 5% were seriously delinquent on their federal guaranteed loans, and 96% of all houses weren't in foreclosure.
And yet this small number of folks not paying their debt nearly resulted in the complete meltdown of our financial system. In a recent interview Tim Geitneher with Hank Paulson, that we were within 3 days of ATMs in the country no longer working.
This article http://consumerist.com/2014/03/19/as-many-as-1-in-3-student-loans-may-be-delinquent/ (http://consumerist.com/2014/03/19/as-many-as-1-in-3-student-loans-may-be-delinquent/) puts the number of current delinquent or defaulted student loans at close to 1/3. Now the good news is that student loans are only 1/10 the size 1.2 trillion vs 13 trillion of mortgage but if delinquency rates are 6x as high that is pretty bad problem.
So my concern for the kids, doesn't extend to believing that every kid should be allowed to borrow as much as he wants for whatever major floats his boat.
[Mod Edit: Fixed quote tags.]
-
If Mike borrows $100,000 of Federally guarantee students loans and doesn't pay them back, who do you think is ultimately takes the loss, the tooth fairy?. No it is the taxpayer who ultimately has to pay the bill. My ex girlfriend, ex husband (an artist ironically) has never paid back a dime of his student loans, and I think next year is eligible for SS, but won't make enough on SS that his SS benefits will be decreased. I sure he will go to his grave with a six digit student loan debt that will be ultimately never be paid.
That's hardly representative. Six figures is the 97th percentile of indebtedness (http://forum.mrmoneymustache.com/ask-a-mustachian/threshold-family-spending/msg13052/#msg13052) and the average (a year ago, since the NY Fed doesn't have newer statistics) is $15.5k.
Your big scary story overstates the student loan problem, I think. The financial crisis was caused by unregulated, irresponsible trading in derivative securities with notional value dramatically larger than the underlying phenomenon, such that the derivatives introduced unhedged risk rather than hedging the risk produced by a productive economic activity. The solution isn't merely to tighten lending, it's to regulate the dipshits leveraging themselves to the hilts with the derivatives. Provided that traders can't speculate excessively with student loan default derivatives (and I believe they can't, currently), the 11.5% default rate isn't necessarily a problem in itself.
-
That's hardly representative. Six figures is the 97th percentile of indebtedness (http://forum.mrmoneymustache.com/ask-a-mustachian/threshold-family-spending/msg13052/#msg13052) and the average (a year ago, since the NY Fed doesn't have newer statistics) is $15.5k.
Your big scary story overstates the student loan problem, I think. The financial crisis was caused by unregulated, irresponsible trading in derivative securities with notional value dramatically larger than the underlying phenomenon, such that the derivatives introduced unhedged risk rather than hedging the risk produced by a productive economic activity. The solution isn't merely to tighten lending, it's to regulate the dipshits leveraging themselves to the hilts with the derivatives. Provided that traders can't speculate excessively with student loan default derivatives (and I believe they can't, currently), the 11.5% default rate isn't necessarily a problem in itself.
Well the more recent article I linked to puts the average $29,300 and the NY Time article put it at $23,300, the NY Fed puts it at $24,803 as Q4/2012. So I am not sure where you pulled the figure $15.5K from?
Lets see 11.5% on 1.2 trillion= $138 billion or just over $1,000 per household... If the article is right and the less creditworthy student loan is currently in deferral, and the default rate is anywhere close to 1/3 that's several hundred billion dollar in lost revenue for the federal government over the next decade or so. Regardless of what ever risk student loan default cause to the financial system that is a significant sum of money. Certainly of a significant magnitude to start applying some common sense rules to limit young people from getting themselves into more debt than they can reasonably pay off.
-
Well the more recent article I linked to puts the average $29,300 and the NY Time article put it at $23,300, the NY Fed puts it at $24,803 as Q4/2012. So I am not sure where you pulled the figure $15.5K from?
It's 2/3rds of grads borrow and 1/3 don't, so you take 2/3*$23.3k +1/3*0 and you get about $15.5k - as you'd see if you went to the linked post.
Lets see 11.5% on 1.2 trillion= $138 billion or just over $1,000 per household... If the article is right and the less creditworthy student loan is currently in deferral, and the default rate is anywhere close to 1/3 that's several hundred billion dollar in lost revenue for the federal government over the next decade or so.
The default rate is 11.5% according to the article. Stop saying it's a third.
Regardless of what ever risk student loan default cause to the financial system that is a significant sum of money. Certainly of a significant magnitude to start applying some common sense rules to limit young people from getting themselves into more debt than they can reasonably pay off.
I'm not arguing it's insignificant, I'm arguing you're being disingenuous by using an absolutely exceptional number in your anecdotal argument. It'd be like me talking about how expensive cars are and then saying I have a friend who drives a 7 series. Yes, it's true that cars are expensive, and yes, it's true that I have a friend who drives a 7 series, but that doesn't mean her experience is typical of auto owners. As for common sense (http://www.don-lindsay-archive.org/skeptic/arguments.html#commonsense): I think it's clear from this thread that there are no common sense rules that the nation can agree on, perhaps with the exception of those already in place.
-
I did go to the linked post. It is irrelevant how much the folks who didn't borrow owe, they can't default.
But even using your weird math the correct average student debt is 71% * $29,400= $20,870, can we at least agree that when discussing this we should use the most current data available,not a NY Times article using 2011 data.
But none of the averages really matter. Nor does the $100,000 matter is completely irrelevant If you want change it to $1,000 that is fine with me..
What matter is the total debt in aggregate of 1.08 trillion.
By using the report’s “New Delinquent Balances By Loan Type” graph (click image on the left for full-size), Credit.com was able to conclude that an additional 5% of student loans are 30 or more days delinquent.
So, in total, nearly one-third of the $600 billion in student loans that are currently in repayment mode could be considered delinquent.
If you read Fed report or the 2012 Fed study on student loan you'll see that Federal reserve, the Consumerist, and I are all adjust the numerator to account for almost 1/2 of the outstanding student loans are in deferment. 11.5% 90 days delinquent, 5% 30-60 days late = 16.5% * 2 = 33%
Even more disturbing is that while the delinquency rates of all other type of times of consumer debt have gone down since 2010 student loans have gone up.
-
I can tell you that one of the biggest problems I faced when I lived in poverty was fear. People would constantly say "You need to take risks to improve your station in life", but I would avoid anything that wasn't a sure thing, because any mistake had catastrophic consequences, because there was no leeway or cushion for me. Growing up, my family's income was so low that my father would have to call out of work if one of the children needed a prescription for an ear infection, because he would have to use money he had budgeted for gas for his commute to make the co-pay (and we were extremely lucky to have employer-provided health insurance). So then he didn't have that day's income after missing work and he'd have to make other cuts, which usually came from the food budget, and we would end up not having as much to eat. When you constantly live on a financial razor's edge, it messes with you psychologically. Some people just give up and spend every dime they have as soon as they get it on frivolous crap, because their minds just snap.
John Cheese on Cracked.com has an excellent series on the psychology of poverty, which really might open some people's eyes when they question why poor people behave the way they do.
-
Well the more recent article I linked to puts the average $29,300 and the NY Time article put it at $23,300, the NY Fed puts it at $24,803 as Q4/2012. So I am not sure where you pulled the figure $15.5K from?
Let's say the average is a nice round $25K, just to make things easier. Then at least half of borrowers owe less than that, no? In fact, probably a lot more than half own less, because it takes at least 8 of them to balance out the one who borrowed $200K to go to an Ivy League school.
But none of the averages really matter. Nor does the $100,000 matter is completely irrelevant If you want change it to $1,000 that is fine with me..
What matter is the total debt in aggregate of 1.08 trillion.
No, what matters is the amount of the debt that's in real risk of default. I'd argue that most of it isn't. The majority who borrowed a reasonable amount and used it to get a degree that increased their earnings more than enough to cover the payments aren't really at risk, though of course they may whine about the payments because they've been sucked into the overspending trap.
-
John Cheese on Cracked.com has an excellent series on the psychology of poverty, which really might open some people's eyes when they question why poor people behave the way they do.
In the article, The 5 Stupidest Habits You Develop Growing Up Poor, John Cheese said: "As some of you know, until the last couple of years, I was poor as shit. The first 18 years, I was a kid and couldn't do anything about it. The next 17, I was still a kid and wouldn't do anything about it. I take full responsibility for that, and I don't point a finger at anyone for the way I lived. I dug my own hole. "
That's a man that owns up to his own actions and takes full responsibility. Of course, he could be sarcastic and I am totally reading it wrong. But wouldn't it be nice if everyone took full responsibilities of their own financial mistakes?
Actually, while we are at it, why stop at financial mistakes, people should be happy that they are poor:
"Do you teach the poor to endure their lot?"
"I think it's very beautiful for the poor to accept their lot, to share it with the passion of Christ. I think the world is being helped much by the suffering of the poor people."
--- a well respected religious figure of the 20th centery, 1981.
I dont know about you, but I know it's certainly true to an extent.
-
So if someone wants to earn a degree as an art history major and they are truly passionate about it they should just abandon it because the debt will be difficult to pay off or that you propose a system which judges their degree as worthless. It certainly isn't worthless to them.
Ah, but people who earn art history degrees tend to think that they're going to be able to make money from that degree . . . and that is often not true. In the worst cases, we as a society end up with people who can't fully participate in society and the economy because they're paying back excessive debt and aren't earning enough to support themselves.
A story about a student of mine who's going to study art -- specifically furniture design -- in college: He said he'd been concerned about being able to make a living with this degree, so he researched it (with Google). I'm not sure my numbers are correct, but he said that a typical person with this degree earns $50,000-90,000. So he figures that if those numbers are "typical", a person who really has talent and really works at it could do more -- may be $150,000! I tried to point out the flaws in this thought process, but he was dead-sure of his facts.
This is going to sound condescending, but I don't apologize for it. Does he really think he's that special/talented?
Who in their right mind sees an "average" statistic and thinks they are TWICE as talented as average? Does he realize these statistics are probably mid-career stats as well? It means a new hire/entry level may be in the 40-50 range... or maybe even lower.
Too bad... can't educate someone who has the rosy dreamy eyes over something.
Oh, I don't disagree with you at all, and I tried to point all this out to the student . . . but he wouldn't hear me.
He's 18 and in the small world of high school he is EASILY the best artist in his graduating class. Only one other student even comes close. He cannot conceive that he has a counterpart in every other high school in America who is also super talented, and he cannot believe that this talent won't blossom into big paychecks. Also, he is hard-working, and he can't believe that won't count for . . . well, everything! Talent plus hard work, how could he fail? He genuinely believes this, and nothing will deter him.
-
I'd like to see what people have to say about the following research..which indicates the above quote to be true:
http://theslab.uchicago.edu/anuj/wp-content/uploads/sci.pdf (http://theslab.uchicago.edu/anuj/wp-content/uploads/sci.pdf)
http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/mani/mani_science_976.full.pdf (http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/mani/mani_science_976.full.pdf)
Ottawa, in case you are still curious about what people have to say about this research - I had dinner at the home of the lead author of the second paper last year, and got teased all the way home because I had fallen in love with her. I mention this because I think it's relevant that she's one of the most gracious, kind and intelligent people I have ever met - I cannot imagine that there is any negative judgement about 'the poor' in her research, and I think that she and her co-authors are making a genuine attempt to understand the issue (and in the academic context 'the poor' is not pejorative). (I also mentioned it because it wasn't something I expected to stumble across in this forum and I nearly coughed up my coffee in delight when I saw it).
These studies are done in developing countries, and 'poor' in that context is a different sort of 'poor' than we see in developed countries, but I think the effect of being poor on cognitive resources also applies - I think that is one reason why consumer protection laws (and enforcement thereof) are so important.
If you enjoy reading papers like these, I'm interested to hear your opinion on this one (sorry it's just a link to the presentation of the paper - the paper itself is only available to subscribers to EJ but I will post a better link later if I can find one):
http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav/moav_neeman_slides_2013.pdf (http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav/moav_neeman_slides_2013.pdf)
-
I'd like to see what people have to say about the following research..which indicates the above quote to be true:
http://theslab.uchicago.edu/anuj/wp-content/uploads/sci.pdf (http://theslab.uchicago.edu/anuj/wp-content/uploads/sci.pdf)
http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/mani/mani_science_976.full.pdf (http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/mani/mani_science_976.full.pdf)
Ottawa, in case you are still curious about what people have to say about this research - I had dinner at the home of the lead author of the second paper last year, and got teased all the way home because I had fallen in love with her. I mention this because I think it's relevant that she's one of the most gracious, kind and intelligent people I have ever met - I cannot imagine that there is any negative judgement about 'the poor' in her research, and that she and her co-authors are making a genuine attempt to understand the issue (and in the academic context 'the poor' is not pejorative). (I also mentioned it because it wasn't something I expected to stumble across in this forum and I nearly coughed up my coffee in delight when I saw it).
These studies are done in developing countries, and 'poor' in that context is a different sort of 'poor' than we see in developed countries, but I think the effect of being poor on cognitive resources also applies - I think that is one reason why consumer protection laws (and enforcement thereof) are so important.
If you enjoy reading papers like these, I'm interested to hear your opinion on this one (sorry it's just a link to the presentation of the paper - the paper itself is only available to subscribers to EJ but I will post a better link later if I can find one):
http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav/moav_neeman_slides_2013.pdf (http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav/moav_neeman_slides_2013.pdf)
Hey thanks SU! I'll have a look through this...I'm glad you said this:
I mention this because I think it's relevant that she's one of the most gracious, kind and intelligent people I have ever met - I cannot imagine that there is any negative judgement about 'the poor' in her research, and that she and her co-authors are making a genuine attempt to understand the issue (and in the academic context 'the poor' is not pejorative
-
In the article, The 5 Stupidest Habits You Develop Growing Up Poor, John Cheese said...
Operative word there is 'you'. Those are stupid habits he developed, and I suppose I can see how other people in similar circumstances might develop the same habits. But that's not the only way of growing up poor, or the only set of poverty-caused habits you can develop. I think some of mine, like the classic New England "Use it up, wear it out, make it do or do without" can be pretty smart.
"Do you teach the poor to endure their lot?"
"I think it's very beautiful for the poor to accept their lot, to share it with the passion of Christ. I think the world is being helped much by the suffering of the poor people."
--- a well respected religious figure of the 20th centery, 1981.
I dont know about you, but I know it's certainly true to an extent.
Had to look it up to be sure, but as I suspected, Mother Theresa. Which probably would be #79 or so on my list of top 100 reasons why I'm not a Christian, if I ever went to the trouble of writing it down :-)
But makes a good point in a backhanded way. I mean, if we didn't have all those suffering poor around, how would people like her ever find a cause in which to express their need for self-abnegation?
-
Ottawa I've attached a contraband copy of the paper. You are allowed to let your eyes glaze over section 4, unless you love calculus, in which case you can read it closely...
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
Please read the Constitution. Please! Those are your only rights
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
Please read the Constitution. Please! Those are your only rights
My rights as a human aren't dictated by other humans' assumptions about what rights I have as an American. I don't necessarily agree that everyone should get a free college education, but I don't pretend that a few guys that wrote a document get to decide once and for all what rights humans have.
-
Rights are either laws or opinions. So I guess you're in the camp that "whatever I say is a right is a right", an even more casual and shifting definition than "whatever society codifies as a right is a right"?
-
Why does it have to be about rights and constitution? You could just decide that education in all state schools costs let's say 2,000$ a year and all remaining costs are covered by State and Federal government. There is plenty of money in your country to pay for it.
-
Meh, I think he's right. If our nation actually prioritized education, we could make a college education free for every single student in the country. Per this article (http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/), it could be done for between $40 and $63 billion. As a comparison, we spend somewhere around $1 trillion (that's 1000 billion) on the military every single year.
However, this is one of those issues where I'm in the minority, including on this forum. Too many folks are inured with the "quit 'yer whining" outlook toward life in this country, which is why we're missing so many safety nets that our fellow citizens in fellow rich countries rightfully take for granted (including the right to an affordable education).
Please read the Constitution. Please! Those are your only rights
My rights as a human aren't dictated by other humans' assumptions about what rights I have as an American. I don't necessarily agree that everyone should get a free college education, but I don't pretend that a few guys that wrote a document get to decide once and for all what rights humans have.
You are absolutely right. That's why we have consistently amended the constitution over the years.
-
Rights are either laws or opinions. So I guess you're in the camp that "whatever I say is a right is a right", an even more casual and shifting definition than "whatever society codifies as a right is a right"?
As davisgang90 says, Constitutions get amended because people and the society of which they are a part change. Laws & rights can change to; thinking that what is a law now is best because it's the law now is silly & shortsided.
-
I guess my argument wasn't very clear. I'm not saying they can't change or that the law as it exists at any point in time is perfect. What I'm saying is that our society doesn't function the way it does because the space pope bestowed a bunch of inexorable truths on society, it functions because we achieve some sort of consensus and live it out through norms and laws. Rights are just norms and laws. If there are a bunch of people here disagreeing about a topic, it's not very effective to say "well it's a right". What you're really saying is "it's my opinion on society", which we all already knew; if it were truly a value or law that we all held in common, you saying "this is a norm we all share" would be redundant and obvious.
-
I guess my argument wasn't very clear. I'm not saying they can't change or that the law as it exists at any point in time is perfect. What I'm saying is that our society doesn't function the way it does because the space pope bestowed a bunch of inexorable truths on society, it functions because we achieve some sort of consensus and live it out through norms and laws. Rights are just norms and laws. If there are a bunch of people here disagreeing about a topic, it's not very effective to say "well it's a right". What you're really saying is "it's my opinion on society", which we all already knew; if it were truly a value or law that we all held in common, you saying "this is a norm we all share" would be redundant and obvious.
The first 10 amendments to the Constitution aren't called the Bill of Norms and Laws. It is called the Bill of Rights. So we can quibble about whether they are still accurate today, but we can't argue as to whether they are rights. By definition they are. When I say I have the right to free speech under the U.S. constitution, that isn't just my opinion on society. We can argue about what that right entails, the limits that should or should not be applied to the right, but it remains a right until we either write a new constitution or amend the current one.
-
John Cheese on Cracked.com has an excellent series on the psychology of poverty, which really might open some people's eyes when they question why poor people behave the way they do.
In the article, The 5 Stupidest Habits You Develop Growing Up Poor, John Cheese said: "As some of you know, until the last couple of years, I was poor as shit. The first 18 years, I was a kid and couldn't do anything about it. The next 17, I was still a kid and wouldn't do anything about it. I take full responsibility for that, and I don't point a finger at anyone for the way I lived. I dug my own hole. "
That's a man that owns up to his own actions and takes full responsibility. Of course, he could be sarcastic and I am totally reading it wrong. But wouldn't it be nice if everyone took full responsibilities of their own financial mistakes?
Actually, while we are at it, why stop at financial mistakes, people should be happy that they are poor:
"Do you teach the poor to endure their lot?"
"I think it's very beautiful for the poor to accept their lot, to share it with the passion of Christ. I think the world is being helped much by the suffering of the poor people."
--- a well respected religious figure of the 20th centery, 1981.
I dont know about you, but I know it's certainly true to an extent.
John Cheese eventually came to a similar realization that I did: You can't control the circumstances you are born into, but you can personally do things to improve your life. It is very difficult to break out of the poverty mindset, especially when the only assistance you have is government assistance that people despise you for taking. I couldn't help the fact that I was born into a family so poor that we received WIC, for instance, and I began working under-the-table when I was 12 just to survive. I also couldn't help the fact that my parents had no valuable knowledge about personal finance that they could pass on to me (and so I didn't even know that such knowledge existed, because my high school was busy teaching me stuff like trigonometry that had no bearing on my existence instead of something useful like how to manage a bank account.)
On the plus side, I was blessed with a good intellect and I was born into a world in which the Internet existed, so I could accidentally find my way to free information that would eventually help me break the cycle of poverty. I was also blessed in that my family valued education, even though they were extremely poor, so unlike most poor people I spent a lot of time learning about things at the library and I had the literacy level of a college senior when I was 10 years old.
It's very popular these days to blame poor people for being poor, but most people in the USA have extremely easy lives so they can't possibly understand the pressures the poor are under. Not only do they lack knowledge, but they are taught to despise anything that would improve their intellects. They are taught that they have to spend absolutely everything they have as soon as they get it, before it magically disappears. When they accept help so they can learn to improve their lives, they are hated for it. They desperately seek social status because of the hate directed toward them, so their priorities get skewed and they waste money instead of working to improve their station in life. They accept broken families as normal instead of understanding how broken families perpetuate poverty, because they have never known anything else.
Poverty is not easy to escape from and I should know because I managed to do it.
And, by the way, taking one quote out of context from a Catholic saint does not invalidate an entire faith. Christianity over the centuries has been a force for Good throughout the world. Catholic Charities, for example, provides billions of dollars worth of assistance to the needy every year. Catholic monasteries preserved the knowledge of the Roman Empire during the Dark Ages, so we didn't lose thousands of years of literature and scientific study. Of course, there are around 2 billion Christians in the world, so there will always be Christians who do bad things, but saying that all Christianity is bad because of atrocities is like saying that all Americans are horrible because of the Japanese internment during WWII, the practice of slavery until 1865, and the genocide of Native Americans from the 1700s-1800s. It's just a ludicrous thing to say.
-
Why are people whining about a $25,000 student loan debt balance? I've even seen a number of comments in the media about how that's like debt slavery! That's not a huge burden. After all, the median new car price is around $32,000 and they get paid off in 7 years or less....
-
Why are people whining about a $25,000 student loan debt balance? I've even seen a number of comments in the media about how that's like debt slavery! That's not a huge burden. After all, the median new car price is around $32,000 and they get paid off in 7 years or less....
It's the crisis du jour. All you need is a sense of outrage, mix in a dash of glossing over the details, a dollop false equivalency to a known scary time, and one teaspoon of hastily cobbled together solutions which would generate more problems; put it in the oven at 350F for thirty minutes and voila a good ol' fashioned American Crisis. Let it sit for a while before serving and the crust will thicken.
Don't worry when the next "not a problem" (baby boomers all retiring, autonomous cars, China) rears its head, it'll be forgotten.
-
The first 10 amendments to the Constitution aren't called the Bill of Norms and Laws. It is called the Bill of Rights. So we can quibble about whether they are still accurate today, but we can't argue as to whether they are rights. By definition they are. When I say I have the right to free speech under the U.S. constitution, that isn't just my opinion on society. We can argue about what that right entails, the limits that should or should not be applied to the right, but it remains a right until we either write a new constitution or amend the current one.
Yeah, no shit. The constitution is law, and so the rights in the constitution fall into the "laws" category of the two kinds of rights. FFS.
-
The first 10 amendments to the Constitution aren't called the Bill of Norms and Laws. It is called the Bill of Rights. So we can quibble about whether they are still accurate today, but we can't argue as to whether they are rights. By definition they are. When I say I have the right to free speech under the U.S. constitution, that isn't just my opinion on society. We can argue about what that right entails, the limits that should or should not be applied to the right, but it remains a right until we either write a new constitution or amend the current one.
Yeah, no shit. The constitution is law, and so the rights in the constitution fall into the "laws" category of the two kinds of rights. FFS.
Yeah, FFS your argument remains unclear.
-
I think $32,000 of debt for a new car is equally burdensome and insane. We've just become hardened to it because the automotive companies want us to accept it as "the way things are."
-
Why are people whining about a $25,000 student loan debt balance? I've even seen a number of comments in the media about how that's like debt slavery! That's not a huge burden. After all, the median new car price is around $32,000 and they get paid off in 7 years or less....
That was my point a few pages back. This person has a cash flow problem. It's not the same thing as poverty.
-
Dezrah nailed it in page 1 of this thread.
At the most expensive and prestigious schools, engineering programs aside (and we can even have this argument about those) many of the faculty who advise students do not view college as "job training." Rather, they view it as a chance to become a well rounded person who gains some critical reasoning skills before the student proceeds to graduate/professional school to get real professional training. In fact, I have many colleagues who are devoted to the ideals of a liberal arts education and love to encourage students to explore fields they've never heard of and pursue whatever catches their eye. But at the same time, the same colleagues are SHOCKED to read that some graduates actually get jobs right after school without going to grad school. I kid you not. Just sat in a meeting where someone had collected direct stats showing that a good fraction of undergraduates who major in our discipline (about a third) go straight to work after college. This did not surprise me, but several of my colleagues had real trouble understanding the concept that NOT ALL of OUR graduates want to continue with 4+ years of additional education after college. Please remember that most professors have never worked outside of academia, so they've not really even been exposed to the normal job market; my Mom calls professors "hot house flowers," and she's got it exactly right. And these folks are giving out ADVICE to 18 year olds about what they should do in college.
College is NOT a ticket out of being poor. That is a myth. It was never designed that way. It was designed for the wealthy, not for the poor, and many schools retain this model (especially the prestigious, expensive schools.) That's part of the reason why family wealth dramatically increases the chances that someone who enters college will actually finish college. Getting a "book smarts" education beside someone who is wealthy does not make you wealthy. I wish it did, because dang I had some college friends from loaded families.
-
The first 10 amendments to the Constitution aren't called the Bill of Norms and Laws. It is called the Bill of Rights. So we can quibble about whether they are still accurate today, but we can't argue as to whether they are rights. By definition they are. When I say I have the right to free speech under the U.S. constitution, that isn't just my opinion on society. We can argue about what that right entails, the limits that should or should not be applied to the right, but it remains a right until we either write a new constitution or amend the current one.
Yeah, no shit. The constitution is law, and so the rights in the constitution fall into the "laws" category of the two kinds of rights. FFS.
I suppose if you don't believe in the theory of natural rights this post will be pretty much irrelevant to you.
But for my perspective, the Constitution and Bill of Rights do not even establish rights. It simply limits the function of government to a strict list of enumerated powers. All remaining power remains with the people and the states. If I view all natural rights as variations of the simple rights to life, liberty, and property, the Bill of Rights is in fact a redundancy. Listing them in the first ten amendments did not GIVE me those rights because there is no language in the Constitution stating that the federal government can take away those rights. So, I already had my rights and the Bill of Rights just made extra sure that the government through no kind of 'well it doesn't say so' reasoning doesn't attempt to abridge those rights. Even the 9th amendment makes that clear with its "now just because we listed some, doesn't mean we listed them all" subtext.
But, well, that's just like, my opinion, man.
-
Lithy,
This is my view as well. That's one of the reasons why I take exception to just treating them as laws. Whether you believe in natural law or not, the Constitution is the bedrock for our country, any and all laws passed must meet constitutional muster. Alternatively, we can amend the constitution.
-
Here's an article about an interesting 30 year study of 800 people conducted in Baltimore about poverty and the likelihood of changing social class: http://www.motherjones.com/mojo/2014/06/the-long-shadow-poverty-baltimore-poor-children (http://www.motherjones.com/mojo/2014/06/the-long-shadow-poverty-baltimore-poor-children). Basically, what the study found was that people who are born into poor families almost always stay poor and social mobility is largely based not on a person's education, but the quality of their family. The findings make sense in my own situation. I was successfully able to escape poverty because I had a relatively stable home-life compared to most people dealing with the same difficulties.
-
If someone disagrees with you as to whether something is a fundamental thing that all humans deserve, it's not much of a support to say "well it's a right".
Either:
i) it's the law of the land (e.g., freedom of assembly), in which case you can say "it's the law of the land that all citizens get X", or
ii) it's not the law of the land (e.g., access to broadband), in which case what you're really saying is "Y is a right because I believe that it's a right", which is tautological and gets you nowhere, because they can equally say "it's not a right because I believe that it's not a right".
You're really conflating two different meanings when you say something is a right. One of those things is entirely worthless for discussion (you saying "I believe that access to broadband is a right" does not make me suddenly share that norm if a moment before I disagreed with you).
-
Please read the Constitution. Please! Those are your only rights
The 9th amendment would seem to disagree with you.