Amusing (and true) face punches about student debt

[iris lily]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

[studentloandude]

I have wondered for some time if there is simple ratio for a reasonable student debt to potential income.

You could make some basic assumptions:

1. There is a good chance you can get a job in the field (say greater than 80%).
2. You aren't just getting the degree to be a stay-at-home mom/dad.
3. You parents aren't funding your education (AKA you actually have to come up with the money that you borrowed)

When we graduated my wife and I were about $600,000 in debt, just from student loans. No cars, consumer debt, house etc. We make a good income and are paying it down (mostly mustachian style). However, when you are talking that kind of debt you are also talking paying it off with after tax dollars in a 33% tax bracket.

Any thoughts? How much should we make assuming we took on $600,000 to make it?

[renorogue]

I have always heard- and this is not from Mustachians- that you shouldn't take out more student debt (total) than you expect to make in salary during your first year of working.  Going by that, folks who take out $70K to pay for nursing school but then turn around and make that as a starting salary doing 3 12 hour shifts a week are smart.  Those who get an MFA for $100K only to get adjunct teaching jobs for next to nothing, dumb.

One has to wonder, though, whether there should be a max for any profession, regardless of how much they can expect to earn. Doctors and lawyers come to mind.  It seems like most of the non-parentally funded residents I know (I work in healthcare) are completely mired in their debt.  It dictates the rest of their lives.  You can't exactly turn your back on six figures of student debt if you decide you're sick of stitching people up and want to hide out in the Bahamas or something. Plus, there's that whole broke-at-a-higher-level that seems to hit these professions hard, what with the golf games and obligatory luxury cars.

What would be the Mustachian ratio of student debt to earning power?  If the goal is to save 50% of your income, but you're paying 25-50% of your post-tax funds to loaners every month, that can't work until you've paid down a ton of your debt.  Unfortunately, I'm speaking from experience here- I send 15-25% of my net income just for my loan payments every month (on a 10 year plan), which doesn't take into account the money I send on top of that to pay down the principal (usually another 500-1500 a month, plus any unexpected cash that comes my way).  Over three years I've paid down all of my private (higher interest) loans and I'm at about half of what I started at (hint hint; it was just about breaking six figures).  Contrary to some opinions, I've been saving money over that time as well.  Not a ton, but I figure that if I break my leg, it's not going to help that my student loans are paid off if I don't have a couple of months' living expenses in the bank.  I haven't ignored all the retirement stuff either. 

Interesting stuff. I'm looking forward to hearing what others have to say about student debt and Mustachianism.   

[iris lily]

Any thoughts? How much should we make assuming we took on $600,000 to make it?

ok, I'll bite.
You should be making $200,000 of which you throw $100,000 annually at the student debt. That leaves the rest of it for you to live on, much less than $100,000 but thems the breaks.

[studentloandude]

Renorogue's vote is for student loans to potential income per year of 1:1

iris lily's vote is for student loans to potential income per year of 3:1


At 1:1 you're still talking about 2-3 years to pay it off minimum. Then you are left with a >$50,000/yr job. That does automatically eliminate some professions (i.e. Doctor, Dentist, Lawyer).

At 3:1 Doctor, Dentist, Lawyer are on the table.

Maybe a strait ratio isn't quite the right idea. A person earning $250,000/yr can live on 10%, after tax of 33% you are left with $142,500. To reach mustatian freedom you need $625,000 which can be achieved in 4.5 years.

So that leaves 5.5 years to pay off student debt (assuming a 10 year plan). 

[marty998]

When we graduated my wife and I were about $600,000 in debt, just from student loans.

What the fuck.

[frugalnacho]

Yeah I agree with "wtf?"

My goal was to never get more than a couple semesters behind, even if I could easily pay it off once I got a job.  I hated the debt, and the whole idea of being in debt.  So I lived at home and commuted.  Found someone near by in my program that I could commute with.  And worked part time to pay off the debt as it accumulated.  Ended up graduating with $11k in debt, and paid it off after having a "real" job for less than a year. 

If only I could have found MMM during that time and not succumbed to lifestyle inflation. 

[iris lily]

When we graduated my wife and I were about $600,000 in debt, just from student loans.

What the fuck.

Well, if they are both physicians who are practicing working for others (no having the expenses of opening their own shop) perhaps that's reasonable.

Or hey, two chemical engineers--my nephew and his wife probably make about that much. But oh yeah, they graduated with no debt from midwestern state universities and they live in the Midwest with low COL so their 'stache is no doubt of a nice pile. Big houses, fast cars--not their style.

Or perhaps two super high-powered marketing types, but those types that I know also throw money around in big ways so they might make $200,000+ but they spend it all.

[frugalnacho]

Not all doctors and chemical engineers will make that kind of money either.  I am a chemical engineer and I can't fathom paying off $600,000 in student loan debt.  That is more like my FIRE goal.

[OSUBearCub]

I think the issue is more systemic than a simple ratio can address.  The world would be a sad, colorless, depressing place without musicians, artists, and social workers/therapists.  None of the above careers (and so many more) could ever fit into either the 1:1 or 3:1 unless you luck out and have a community college in your back yard and can live with your parents at home.  And we'd lose out on a LOT of free or cheap entertainment - concerts on the lawn, Shakespeare in the park, MFA graduate recitals, public art shows, etc.

The world would also be pretty dumb without teachers.  When you consider that most US states require a 4 year bachelors degree and further require a 1-2 year masters degree within the first 5 years of teaching, we again find it difficult to shoe-horn the investment into either of these ratios.

My BA in English came in at just over $50k from a state school.  I thought I was planning for decent career opportunities and then I learned that the market is pretty damn saturated with English teachers.  This was about a year before graduation - too late to switch gears without adding an additional year of school.

So, my point is this.  Perhaps the days of across-the-board tuition rates needs to come to an end.  The cost of an education should be pegged to potential future earnings from day one.  This would incentivize the STEM careers and promote science education by highlighting future earnings.  It would also provide a viable fee structure for all the rest of the lower-earning but still vital careers.

[chicagomeg]

There's a great book called "Your Money Ratios", which I really like for boiling things down to straight forward, manageable, rules of thumb. True, it's far from full on Mustachian, but if everyone followed "Your Money Ratios", we'd be in a lot better shape. Anyway, I know he recommends a 1:1 ratio for loans:starting salary for undergrad. I believe he then says no more than 2:1 for grad school. That part I'm a little fuzzy on.

From my experience, I can say that my $30k in student loans would be manageable on my salary of $35k, but can't imagine having too much more than that. I think my salary is a reasonable estimate for most average undergrads, that is to say, not STEM, accounting, etc. But, I think you also need to take into account the need for further education. If you know starting undergrad that you will have to go to grad school to get a job in your field, it is just craziness to start out with $40k, $50k, etc. in loans. On the other hand, if you are going to school to be an accountant, maybe you can afford to take out a bit more.

Of course, we all know that we need to minimize the loans as much as possible across the board; it's really hard to imagine a scenario where you would truly need to take on more than $30k or so in loans to get a degree. If you're paying full freight to go to an in-state public school, you can switch to part time & pay more as you go. If you're on some form of scholarships or grants that require full time status, then that should mitigate the costs enough that you still wouldn't need to take out an outrageous amount.

[okashira]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

Ramsey is such a worthless d-bag.

You don't talk to someone like that AFTER they have racked up the debt and gotten the degree.
I'm an ass and wouldn't talk to them like that.
Maybe to someone THINKING about getting into that situation...

[frugalnacho]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

Ramsey is such a worthless d-bag.

You don't talk to someone like that AFTER they have racked up the debt and gotten the degree.
I'm an ass and wouldn't talk to them like that.
Maybe to someone THINKING about getting into that situation...

I don't know, he kind of has a point and I feel the same way about a lot of people.  Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

[LibrarIan]

I don't understand how any of this is possible. My wife and I both got out of our undergrad programs with 0 debt. She and I both has modest scholarships, but work paid for the rest. Then I worked my way through my graduate degree, and she is about to do the same. Even with all four of those programs combined, we didn't even approach 130k in education expenses. I'm starting to wonder if I'm the abnormal one.

[The Money Monk]

I have wondered for some time if there is simple ratio for a reasonable student debt to potential income.

You could make some basic assumptions:

1. There is a good chance you can get a job in the field (say greater than 80%).
2. You aren't just getting the degree to be a stay-at-home mom/dad.
3. You parents aren't funding your education (AKA you actually have to come up with the money that you borrowed)

When we graduated my wife and I were about $600,000 in debt, just from student loans. No cars, consumer debt, house etc. We make a good income and are paying it down (mostly mustachian style). However, when you are talking that kind of debt you are also talking paying it off with after tax dollars in a 33% tax bracket.

Any thoughts? How much should we make assuming we took on $600,000 to make it?

Clark Howard says you shouldn't spend more than 3 times your expected starting salary. Not sure what he based that off of, but it doesn't seem too unreasonable. I

[OSUBearCub]

Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

You're being really harsh here.  Thank a teacher for teaching you how to write these (frustrating) comments in the first place.  First, you're looking at this issue from the vantage point of an adult who's taught himself personal finance discipline.  Could you have been so rational and were you so judgmental at 18 years old? 

And as for not being able to "hack it" in a technical major - that's some elitist-geek nonsense.  I could have been a chemist, engineer, programmer if not for the fact that science bores me to tears.  My productivity in the world is directly related to not hating every waking moment of my career.  And like it or not, even engineers need to learn to string together a word or two to effectively communicate with each other. 

[DeepEllumStache]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

Ramsey is such a worthless d-bag.

You don't talk to someone like that AFTER they have racked up the debt and gotten the degree.
I'm an ass and wouldn't talk to them like that.
Maybe to someone THINKING about getting into that situation...

I don't know, he kind of has a point and I feel the same way about a lot of people.  Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

Hopefully the people he is talking to start to consider that their approach wasn't the best and teach their kids to something smarter.  There are probably people listening to him that never considered that their college/career choices could have been wrong.  Many people get obsessed with colleges because their parents went there and they grew up thinking that said Alma Mater is the only good choice regardless of career aspirations.

[frugalnacho]

Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

You're being really harsh here.  Thank a teacher for teaching you how to write these (frustrating) comments in the first place.  First, you're looking at this issue from the vantage point of an adult who's taught himself personal finance discipline.  Could you have been so rational and were you so judgmental at 18 years old? 

And as for not being able to "hack it" in a technical major - that's some elitist-geek nonsense.  I could have been a chemist, engineer, programmer if not for the fact that science bores me to tears.  My productivity in the world is directly related to not hating every waking moment of my career.  And like it or not, even engineers need to learn to string together a word or two to effectively communicate with each other.

My teachers were paid for their time.  None of them were forced to get a teaching degree, it was voluntary for 100% of them.  They all could have chosen different career paths. I would like to stay at home and watch movies all day, or play music, but unfortunately no one is willing to pay me enough to adequately live on so I have to be more practical with my career choices.

Yes and I was.  See post #6.

I know a great deal of people that entered school for engineering or some technical degree and they couldn't pass the required classes with the required grades (ie couldn't hack it).  Many of them continued the education route just because it's what they were supposed to do, or they switched to some ridiculously unpractical degree (like photography?) that didn't require hard courses like organic chemistry, calculus, thermodynamics, etc.  They had no real career path to follow, and yet racked up huge student loan debts anyway.  I thought it was stupid while I attended college, I thought it was stupid after graduation, and I still think it is stupid.  I just can't fathom the thinking process of racking up so much debt without any realistic repayment time frame.

[OSUBearCub]

My teachers were paid for their time.  None of them were forced to get a teaching degree, it was voluntary for 100% of them.  They all could have chosen different career paths. I would like to stay at home and watch movies all day, or play music, but unfortunately no one is willing to pay me enough to adequately live on so I have to be more practical with my career choices.

Yes and I was.  See post #6.

I know a great deal of people that entered school for engineering or some technical degree and they couldn't pass the required classes with the required grades (ie couldn't hack it).  Many of them continued the education route just because it's what they were supposed to do, or they switched to some ridiculously unpractical degree (like photography?) that didn't require hard courses like organic chemistry, calculus, thermodynamics, etc.  They had no real career path to follow, and yet racked up huge student loan debts anyway.  I thought it was stupid while I attended college, I thought it was stupid after graduation, and I still think it is stupid.  I just can't fathom the thinking process of racking up so much debt without any realistic repayment time frame.

The troubling thing with some of the prevailing ideologies on MMM are face punches paired with in-actionable ideologies.  This is not a black and white world in which we live.  Photographers have been vital in communicating innumerable, complex scientific concepts. Without photographers, we wouldn't know what's going on in the middle of war zones.  Photography is a cornerstone of the publishing industry which employs hundreds of thousands of people.    So sure, you feel certain careers are stupid.  But quit shaming people for choices made decades ago in a forum many of us are using to help correct the unforeseen, negative results of these choices.  You're surely turning a lot of people off. 

So, how do we fix the "stupid"?  What do you suggest we do - as a rational society - to prevent the heavy burden of increasing student debt, moving forward?  "Debt-shaming" seems more counter-productive when you're already preaching to the choir.

[frugalnacho]

My teachers were paid for their time.  None of them were forced to get a teaching degree, it was voluntary for 100% of them.  They all could have chosen different career paths. I would like to stay at home and watch movies all day, or play music, but unfortunately no one is willing to pay me enough to adequately live on so I have to be more practical with my career choices.

Yes and I was.  See post #6.

I know a great deal of people that entered school for engineering or some technical degree and they couldn't pass the required classes with the required grades (ie couldn't hack it).  Many of them continued the education route just because it's what they were supposed to do, or they switched to some ridiculously unpractical degree (like photography?) that didn't require hard courses like organic chemistry, calculus, thermodynamics, etc.  They had no real career path to follow, and yet racked up huge student loan debts anyway.  I thought it was stupid while I attended college, I thought it was stupid after graduation, and I still think it is stupid.  I just can't fathom the thinking process of racking up so much debt without any realistic repayment time frame.

The troubling thing with some of the prevailing ideologies on MMM are face punches paired with in-actionable ideologies.  This is not a black and white world in which we live.  Photographers have been vital in communicating innumerable, complex scientific concepts. Without photographers, we wouldn't know what's going on in the middle of war zones.  Photography is a cornerstone of the publishing industry which employs hundreds of thousands of people.    So sure, you feel certain careers are stupid.  But quit shaming people for choices made decades ago in a forum many of us are using to help correct the unforeseen, negative results of these choices.  You're surely turning a lot of people off. 

So, how do we fix the "stupid"?  What do you suggest we do - as a rational society - to prevent the heavy burden of increasing student debt, moving forward?  "Debt-shaming" seems more counter-productive when you're already preaching to the choir.

Photographers are needed to some degree, but I think people need to be practical about it.  Are you going to be one of the useful, important photographers?  Are you going to be able to make a career out of it? Will you be able to repay the debt you incurred getting your degree? Those are all questions that need to be asked before getting any degree.  I guess I just don't understand how those questions are not asked, or how the reality of massive student loans are not thought out.  How do you not see the unsustainability of that decision?

I don't know how you fix the "stupid".  It seems to me the resources are already there for people to make rational decisions, they just aren't making them.   The same way they rack up hundreds of thousands of non student loan debt.  Some people just aren't realistic or honest with themselves.  They gotta live in the "now", spend spend spend on an education, bury their head in the sand, and worry about it later (or never). 

[Jack]

The troubling thing with some of the prevailing ideologies on MMM are face punches paired with in-actionable ideologies.  This is not a black and white world in which we live.  Photographers have been vital in communicating innumerable, complex scientific concepts. Without photographers, we wouldn't know what's going on in the middle of war zones.  Photography is a cornerstone of the publishing industry which employs hundreds of thousands of people.    So sure, you feel certain careers are stupid.  But quit shaming people for choices made decades ago in a forum many of us are using to help correct the unforeseen, negative results of these choices.  You're surely turning a lot of people off. 

So, how do we fix the "stupid"?  What do you suggest we do - as a rational society - to prevent the heavy burden of increasing student debt, moving forward?  "Debt-shaming" seems more counter-productive when you're already preaching to the choir.

It's not that some careers are "stupid," it's that some careers are unprofitable enough that racking up debt to get a degree in that field is stupid.

If you can afford to get a degree in photography or whatever other sort of fine art you're passionate about without going into debt for it, by all means go for it! Otherwise, you really need to be self-taught and get people to hire you based on your talent, not a degree.

(Luckily, most of the unprofitable fields other than social work and teaching mostly require talent rather than a degree. People who want to be social workers are just screwed.)

[EMP]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

Ramsey is such a worthless d-bag.

You don't talk to someone like that AFTER they have racked up the debt and gotten the degree.
I'm an ass and wouldn't talk to them like that.
Maybe to someone THINKING about getting into that situation...

+1

What is he hoping to accomplish by talking this way?  Driving ratings?  Yeah...that's  the way to teach someone how to manage their money.  Get a whole bunch of people listening to their story and making fun of them.  Ramsey's just a bully. 

[studentloandude]

http://education.newamerica.net/publications/policy/the_graduate_student_debt_review

Here is an interesting excerpt about WHO is carrying the student debt.  A recent study by the New America Foundation found that 40% of the overwhelming $1 Trillion student debt is carried by those with graduate degrees. They give a couple of examples of tuition nearly doubling from 2004 to 2012.

Have those with graduate level education seen a near doubling of their expected income? Or are all these highly educated people idiots that deserve a punch in the face? Or is there something else going on?

[rocketpj]

Jesus Christ in a wobbly sidecar, what the hell do you people pay for tuition down the the US anyway?  Are you all insane?

I spent about $30K on two degrees (BA, MA - tuition only).  About $10K of that was from an inheritance (thanks Grandma).  Another $10K came from my folks (thanks folks), $8k from a scholarship (thanks crappy graduate school) and $2k from my own savings.  I paid all my living expenses by WORKING REALLY DAMN HARD in the summer.  The only debt I finished with was just under $5k at the very end because my wife was offered a job on the other side of the country and I had to finish my grad degree in the summer rather than work.  And that 5K included living expenses for 4 months and a truck rental to move from Ottawa to Vancouver (plus gas).

I would not have bothered going to college if there had been the possibility of hundreds of thousands of debt at the end.  NOT worth it.

Tuition has been inflating into the stratosphere for ridiculous amounts of time, and from where I'm sitting you lot look completely insane.  University and education are a bubble.  Spend four years NOT going into debt - start a business, start three, do some travelling.  You will learn more doing that than you ever will at university, and you won't be fucking slave for the next 20 years.

[rocketpj]

Have those with graduate level education seen a near doubling of their expected income? Or are all these highly educated people idiots that deserve a punch in the face? Or is there something else going on?

I have an MA in Political Science, and it did open some doors after I graduated.  However, they were office doors, behind which is an office.  I could have used a face punch before going to graduate school, mostly for the opportunity cost - 1 year spent on a degree which I did not learn much and was mostly jumping through hoops, which qualified me for jobs I do not want.  It only took me a decade to admit it to myself though.  Very little debt though.

[Mr. Frugalwoods]

I've seen some professions where a Masters degree isn't needed to get in the door but is basically required for climbing the ladder.  I'm most familiar with the nonprofit world, where you can get a decent development job with a BA but if you expect to be a Director of Development you'd better get your MA.

I imagine that's the sane way of doing a Masters degree.  Get a job with your BA, ensure that you want to continue in that career and that it does in fact require an MA to advance, and then get a MA while working so you don't have to take out much or any debt.

It neatly avoids the real hidden cost of a MA, which is loss of experience and wages compared to your peers.  That's two years of salary, 401k, and connections in the business that you are missing out on if you do it full time.  Maybe it's worth it in some cases... maybe not.

[Jags4186]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

Ramsey is such a worthless d-bag.

You don't talk to someone like that AFTER they have racked up the debt and gotten the degree.
I'm an ass and wouldn't talk to them like that.
Maybe to someone THINKING about getting into that situation...

+1

What is he hoping to accomplish by talking this way?  Driving ratings?  Yeah...that's  the way to teach someone how to manage their money.  Get a whole bunch of people listening to their story and making fun of them.  Ramsey's just a bully.

I'm as critical of DR as anyone, but in his defense, he doesn't say this to people who call in.  He usually does his best to help them but really, what advice can you give to someone who calls in and says "I make 33k a year and have 117k SL in deferral".  Then after they are off the phone he will make these comments as a generality to warn the general populace of whats ahead of them.  He's right on this one.

[iris lily]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

Ramsey is such a worthless d-bag.

You don't talk to someone like that AFTER they have racked up the debt and gotten the degree.
I'm an ass and wouldn't talk to them like that.
Maybe to someone THINKING about getting into that situation...

The hyperbolic Ramsey lecture isn't for those already in the weeds, it's to keep other fools from following in their footsteps. Perhaps the dramatic delivery will get someone's attention. Other people need more "gentle" leadership.

I don't really see how Ramsey's voice is much different from the collective voice of MMM. Being pelted by one guy vs being pelted by 20--not much different.
 

[Eric]

Have those with graduate level education seen a near doubling of their expected income? Or are all these highly educated people idiots that deserve a punch in the face? Or is there something else going on?

I believe what was going on was a major recession.  Lots of people were graduating with no hope of getting an actual job (it was hard enough for people with experience, those without were left on the outside looking in) and after banging their head against the wall submitting resume after resume only to come up empty, the next logical choice was to go back to school and get that graduate degree in the hopes of making themselves more employable.  If your choice is not working or going to school, most people chose school.

I'm not saying it was the best choice, but I'm pretty sure that's how lots of smart people got into this mess.

[iris lily]

Have those with graduate level education seen a near doubling of their expected income? Or are all these highly educated people idiots that deserve a punch in the face? Or is there something else going on?

I believe what was going on was a major recession.  Lots of people were graduating with no hope of getting an actual job (it was hard enough for people with experience, those without were left on the outside looking in) and after banging their head against the wall submitting resume after resume only to come up empty, the next logical choice was to go back to school and get that graduate degree in the hopes of making themselves more employable.  If your choice is not working or going to school, most people chose school.

I'm not saying it was the best choice, but I'm pretty sure that's how lots of smart people got into this mess.

not working + making more debt by taking on school expense = not smart

[gimp]

My ratio is 1:3 loans:income. Did I win the game?

[clarkfan1979]

I never liked using first year income as a measure. Many first jobs pay very little. Then when you get 1-2 years experience your income typically jumps drastically from your first job. I would feel more comfortable using a number like expected income of first five years. If you can afford the payments and are happy I don't think any math can tell you that you made a mistake.

[GeneralJinjur]

My ratio is 1:3 loans:income. Did I win the game?

No, I won. ;)  My ratio was 1:5 loan:income and that was only working 9 months my first year.  (OTOH, that was a few years' shy of my 40th birthday and I am a single mom with 3 kids, so my earning years are limited.)  I don't know of a single coworker who doesn't complain about student loans.  I have learned not to mention that I paid mine off less than a year after graduation.  It just makes them cry.

[Ian]

I don't know, he kind of has a point and I feel the same way about a lot of people.  Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

I don't think this attitude is fair (speaking to the thread in general, your post is just a clear statement of it). You're assuming that high school graduates have perfect access to information, and I'd argue that's not even remotely the case. In my experience, a lot of people graduates believe they should trust (teachers, guidance counselors, etc) will tell them that college is a good investment. They'll show a bunch of numbers that seem to prove this, citing salaries and employment rates, and it all seems very clear - do you expect people just out of high school to assume people are lying to them and go verify the numbers?

Also, do you have any evidence that a significant number of people move from technical degrees to liberal arts degrees? I'm not saying I disbelieve it, I've just never met anyone who did.

[Bateaux]

I know it's not for everyone but, I made it out of college debt free on the GI BIll.  I landed a career with the company I'm still working for.   Just 4 days after sending in a resume I was hired.  Due in large part to my military experience and I'm certain it didn't hurt, majoring in Microbiology.  I made 120k last year, not bad and I never once had a student loan.  There are options out there.

[frugalnacho]

I don't know, he kind of has a point and I feel the same way about a lot of people.  Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

I don't think this attitude is fair (speaking to the thread in general, your post is just a clear statement of it). You're assuming that high school graduates have perfect access to information, and I'd argue that's not even remotely the case. In my experience, a lot of people graduates believe they should trust (teachers, guidance counselors, etc) will tell them that college is a good investment. They'll show a bunch of numbers that seem to prove this, citing salaries and employment rates, and it all seems very clear - do you expect people just out of high school to assume people are lying to them and go verify the numbers?

Also, do you have any evidence that a significant number of people move from technical degrees to liberal arts degrees? I'm not saying I disbelieve it, I've just never met anyone who did.

I don't understand, how do you not run the numbers?   You are going to attend somewhere for 4+ years, and you will need to live somewhere (unless you commute) and you will have to buy books and pay for tuition.  You have to pay for those with real dollars, and if you borrow them you have to pay them back.  So you are 18 years old and apparently smart enough to graduate high school and get accepted to a university, so why can't you do simple arithmetic?

My first engineering classes started with about 400 students (that included all engineering disciplines).  By the time we graduated we only had about 12 in the chemical engineering course.   Way more than half of the people that originally started down the engineering path didn't make it.  You could watch it happen in real time.  Each difficult class more and more struggled and eventually dropped the class because it was too difficult.  Happened in organic chemistry, differential equations, thermodynamics, kinetics, etc.

[EricP]

So, my point is this.  Perhaps the days of across-the-board tuition rates needs to come to an end.  The cost of an education should be pegged to potential future earnings from day one.  This would incentivize the STEM careers and promote science education by highlighting future earnings.  It would also provide a viable fee structure for all the rest of the lower-earning but still vital careers.

Tuition Rates should correspond to how much it costs to provide the education. Nothing else.  I would be fine with changing tuition rates based on what major you want, if those majors have different costs.  Which I could easily see being the case.  I imagine English professors are cheaper than Engineering professors due to the lack of other high-paying jobs for English Doctorettes.  But having STEM majors subsidize the education costs for B.A.s is not right. 

Additionally, STEM professors could be much cheaper for Universities due to them getting research grants and such.  But decreasing the cost on low income (low demand) majors and increasing the cost on high income (high demand) would just make the problem worse and there would be even more English majors out there.  It wouldn't incentivize STEM majors, people already know what careers make money when they are picking majors at 18; it would increase the supply of already over-supplied majors. 

(Teachers don't really fall into this discussion because their compensation isn't determined in a fair market; additionally due 3 months of unemployment and usually an inability to find "full employment" during that time they present a unique challenge in ensuring adequate compensation)

[prof61820]

Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

You're being really harsh here.  Thank a teacher for teaching you how to write these (frustrating) comments in the first place.  First, you're looking at this issue from the vantage point of an adult who's taught himself personal finance discipline.  Could you have been so rational and were you so judgmental at 18 years old? 

And as for not being able to "hack it" in a technical major - that's some elitist-geek nonsense.  I could have been a chemist, engineer, programmer if not for the fact that science bores me to tears.  My productivity in the world is directly related to not hating every waking moment of my career.  And like it or not, even engineers need to learn to string together a word or two to effectively communicate with each other.

I agree.  From my experience, the folks who have technical degrees and no liberal education or travel experience are the primary reason why history repeats itself.  This, you can imagine, is a gigantic cost to world.  Don't get me wrong, some of my best friends are engineers (he said with a wink), but they can drive me crazy.  It's been fun to watch the engineers work so hard try to do everything within the current financial system to make it work, operating under the assumption that nothing can ever change so at to not rock the political boat.  Liberal arts majors tend to focus on changing messed up systems and, at the same time, make some really dumb mathematical errors or engage in wishful thinking when it comes to our financial system.  It's been fun to watch the two collide here.  Be careful what you wish for because a world without liberal arts, will be a cold, boring, harsh, unimaginative and potentially unenlightened and dangerous world.

[prof61820]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

With the more expansive loan forgiveness that Obama just instituted, isn't this somewhat irrelevant now?

[frugalnacho]

Like when they tell me they have $100,000 in student loan debt and they have a liberal arts degree (ie they couldn't hack it getting a technical degree).  I mean wtf were you thinking that you racked up over 100k in debt with no game plan and no career prospects?  Do they not think more than a few months into the future?  Do they not understand math or finances? Do I really want to hire someone that makes those kinds of decisions?  Not only did they rack up 100k+ in debt with practically nothing to show for it, but they just wasted the last 4-5 years not being financially productive so it's a double whammy.

You're being really harsh here.  Thank a teacher for teaching you how to write these (frustrating) comments in the first place.  First, you're looking at this issue from the vantage point of an adult who's taught himself personal finance discipline.  Could you have been so rational and were you so judgmental at 18 years old? 

And as for not being able to "hack it" in a technical major - that's some elitist-geek nonsense.  I could have been a chemist, engineer, programmer if not for the fact that science bores me to tears.  My productivity in the world is directly related to not hating every waking moment of my career.  And like it or not, even engineers need to learn to string together a word or two to effectively communicate with each other.

I agree.  From my experience, the folks who have technical degrees and no liberal education or travel experience are the primary reason why history repeats itself.  This, you can imagine, is a gigantic cost to world.  Don't get me wrong, some of my best friends are engineers (he said with a wink), but they can drive me crazy.  It's been fun to watch the engineers work so hard try to do everything within the current financial system to make it work, operating under the assumption that nothing can ever change so at to not rock the political boat.  Liberal arts majors tend to focus on changing messed up systems and, at the same time, make some really dumb mathematical errors or engage in wishful thinking when it comes to our financial system.  It's been fun to watch the two collide here.  Be careful what you wish for because a world without liberal arts, will be a cold, boring, harsh, unimaginative and potentially unenlightened and dangerous world.

What a load of rubbish.  You get plenty of liberal education with a technical degree, but you also get the technical education.  If they really were so creative, imaginative, and smart maybe they would become engineers so they could become FI sooner and do more good in the world, or changing a messed up system, or whatever you like.  No one wants to eliminate liberal arts, but its a stupid path to down if your plan is to not rack up student loan debt and get a high paying job.

[OSUBearCub]

I don't understand, how do you not run the numbers?   You are going to attend somewhere for 4+ years, and you will need to live somewhere (unless you commute) and you will have to buy books and pay for tuition.  You have to pay for those with real dollars, and if you borrow them you have to pay them back.  So you are 18 years old and apparently smart enough to graduate high school and get accepted to a university, so why can't you do simple arithmetic?

Because your're 17 friggin' years old!  Because your guidance counselor pulled you into his/her office and showed you CHARTS indicating that you'd make a million dollars more over the life of your career if you get a bachelors degree.  Because the same guidance counselor put you through personality tests to determine your aptitudes.  Because that test didn't mention ANYTHING about STEM careers.  Because "STEM careers" wasn't even a friggin' term in 1997!  Because flashy liberal arts schools pulled you out of boring AP classes once a week to pitch their flashy, expensive, liberal arts educations!  Because you were 8th in your graduating class and EVERY FRIGGIN' SCHOOL EVER bombarded you with promo fliers.  Because your Mom and Dad literally GLOWED when the prestigious, private, pricey universities showed legitimate interest in their kid and then bragged to literally EVERYONE.  THAT is why *I* didn't do the simple arithmetic.

A business transaction was turned into an emotional decision.  The fact that I had the tiny amount of good sense to pick a state school over the $27k per year private university ***that was taking me to lunch monthly*** is a God damn miracle. 

[randymarsh]

I found these turns of phrases in a face punch by Dave Ramsey to be hilarious! Here are nuggets from his lecture. Google the rest.

...I’ve got to tell you that I’m about to blow a gasket. I’m about to go into orbit.... Seriously—$130,000 to get a degree from Columbia in divinity to get a $40,000 job as a minister. Spending $130,000 to get an undergraduate degree in psychology—that’s crazy!! So when you have babies, you go home to be a stay-at-home mom.

I love stay-at-home moms. But you know the number one reason I’m finding out now that people can’t stay home with their kids? It’s their freaking student loan stupidity!

...Your stupid degree in a stupid field does not have a marketplace value and it doesn’t guarantee that you’re going to get a job! As a matter of fact, it’s an indicator that you’re too stupid to hire! Do not allow your 18-year-old to go $200,000 in debt so they can get a good Christian education in underwater basket weaving. That’s stupid! Stop it!

...Stupidity with education choices is about as paradoxical as anything I can think of.

With the more expansive loan forgiveness that Obama just instituted, isn't this somewhat irrelevant now?

I doubt it. Loan forgiveness isn't even that great an of option for many people. Sure, it'll lower their payments now and keep them from defaulting. But it requires 20 years (!) of payments. I bet a lot of low income 23 year olds are going to become 35 year olds with much higher incomes. Their payments are going to rise to the point where they should have just tried to get it paid off ASAP. Then they're going to owe taxes on the forgiven amount. How many are saving up for that IRS bill?

[frugalnacho]

I don't understand, how do you not run the numbers?   You are going to attend somewhere for 4+ years, and you will need to live somewhere (unless you commute) and you will have to buy books and pay for tuition.  You have to pay for those with real dollars, and if you borrow them you have to pay them back.  So you are 18 years old and apparently smart enough to graduate high school and get accepted to a university, so why can't you do simple arithmetic?

Because your're 17 friggin' years old!  Because your guidance counselor pulled you into his/her office and showed you CHARTS indicating that you'd make a million dollars more over the life of your career if you get a bachelors degree.  Because the same guidance counselor put you through personality tests to determine your aptitudes.  Because that test didn't mention ANYTHING about STEM careers.  Because "STEM careers" wasn't even a friggin' term in 1997!  Because flashy liberal arts schools pulled you out of boring AP classes once a week to pitch their flashy, expensive, liberal arts educations!  Because you were 8th in your graduating class and EVERY FRIGGIN' SCHOOL EVER bombarded you with promo fliers.  Because your Mom and Dad literally GLOWED when the prestigious, private, pricey universities showed legitimate interest in their kid and then bragged to literally EVERYONE.  THAT is why *I* didn't do the simple arithmetic.

A business transaction was turned into an emotional decision.  The fact that I had the tiny amount of good sense to pick a state school over the $27k per year private university ***that was taking me to lunch monthly*** is a God damn miracle.

Alright man, simmer down.  I found my experience somewhat different.  I was painfully aware that I was on my own and had to pay for my education with my own money.  I also have always had an aversion to debt of any kind because I knew I had to pay it back (it seems like most people don't make that connection?).  Many of my classmates just piled the student loans on to go have a party. 

So I chose a good university with a good engineering program that was 1/4 the price of the big state universities and was also within commuting distance and then tried to pay my debt off as it accumulated.   I had 11k in debt when I graduated and had that paid off within the first year. 

[OSUBearCub]

So I chose a good university with a good engineering program that was 1/4 the price of the big state universities and was also within commuting distance and then tried to pay my debt off as it accumulated.   I had 11k in debt when I graduated and had that paid off within the first year.

Then, for the love of Pete, pay this wise advice forward the next time a 17 year old kid mentions her/his college search. ;-)

[EricP]

So I chose a good university with a good engineering program that was 1/4 the price of the big state universities and was also within commuting distance and then tried to pay my debt off as it accumulated.   I had 11k in debt when I graduated and had that paid off within the first year.

Then, for the love of Pete, pay this wise advice forward the next time a 17 year old kid mentions her/his college search. ;-)

It won't matter even if you do.  The people who care already know all the information, and the people who don't care don't listen when told.  They'd rather live like kings on student loans blowing thousands of dollars a year on booze and restaurants and nice apartments.

[Angie55]

Then, for the love of Pete, pay this wise advice forward the next time a 17 year old kid mentions her/his college search. ;-)
[/quote]



It won't matter even if you do.  The people who care already know all the information, and the people who don't care don't listen when told.  They'd rather live like kings on student loans blowing thousands of dollars a year on booze and restaurants and nice apartments.
[/quote]

I would have loved it if someone told me the truth. Instead most high school students are told that it doesn't matter how much it costs. All they see is copious amounts of college marketing. Also, no one advises that once you are locked into a school they will raise tuition every year while you are there. Making the last year nearly 10-15k more expensive than the first year! There is no explanation from parents or guidance counselors to tell you the amount of debt will be astronomical. My parents are middle class and said NOTHING about the 100k in loans I took out. I worked PT through college, 3 jobs in the summer and still took out that much. I applied to college when I was 16! I couldn't even drive after 8pm but I'm supposed to know my starting salary and total tuition costs projected ahead for 5 years? Am I really supposed to know any better? I didn't even know what engineers actual did for jobs was until I was working on my senior college project.

I'm not trying to pull the victim card. But we need more people to speak up and advice on the truth. Its discouraging to hear you say its not worth it because they won't listen. That will only perpetuate the problem.

[frugalnacho]

We aren't talking about people who racked up a reasonable amount of debt, and had a reasonable view of the job market.  We are talking about people with totally unreasonable amounts of debt, and that apparently never did any fact checking.  I wanted to be an engineer, and was told what salary range I could expect.  I then went a step further and actually checked into by looking into open job positions and actual salary data of what engineers in different areas are getting paid.  It just blows my mind that other people didn't have the same foresight.

At what point do you think a naive 17 year old should use some critical thinking skills and say that the cost incurred getting a degree is unreasonable? $100k? 300k? A million dollars? Or is there literally no limit? Your counselor said you need a degree and you will get it no matter how much it costs, and don't bother even thinking about the fact that you have to repay that money until you have that degree in hand?

[matchewed]

Ugh, another one of these discussions?

Seriously can't anyone see that when we're bringing up the example of the person who just got the 100k photography degree that we're not even in a representative sample of the person who takes out loans anymore?

This running around and blowing up about hyperbolic examples skews the view of the discussion. So let's save all the youth bashing and liberal arts hating on one side and the pity party on the other side and realize it isn't a big deal. There are so few people with this level of debt that this is akin to screaming about the number of Hummers on the road today.

Time to wind up the outrage machine, hasn't had enough yet.

[frugalnacho]

Ugh, another one of these discussions?

Seriously can't anyone see that when we're bringing up the example of the person who just got the 100k photography degree that we're not even in a representative sample of the person who takes out loans anymore?

This running around and blowing up about hyperbolic examples skews the view of the discussion. So let's save all the youth bashing and liberal arts hating on one side and the pity party on the other side and realize it isn't a big deal. There are so few people with this level of debt that this is akin to screaming about the number of Hummers on the road today.

Time to wind up the outrage machine, hasn't had enough yet.

I know several people in real life that this applies to.  It's certainly not everyone, but it is still happening.

[matchewed]

Ugh, another one of these discussions?

Seriously can't anyone see that when we're bringing up the example of the person who just got the 100k photography degree that we're not even in a representative sample of the person who takes out loans anymore?

This running around and blowing up about hyperbolic examples skews the view of the discussion. So let's save all the youth bashing and liberal arts hating on one side and the pity party on the other side and realize it isn't a big deal. There are so few people with this level of debt that this is akin to screaming about the number of Hummers on the road today.

Time to wind up the outrage machine, hasn't had enough yet.

I know several people in real life that this applies to.  It's certainly not everyone, but it is still happening.

So what?