Don't borrow money for school...it can hurt you and those close to you...

[dfrecore]

I've already told my kids that there will be no loans of any kind. We are more than happy to pay for school and let them live at home while going to college, there are 9 CC's (yes, NINE), 2 state colleges, and a UC all within 35 miles. We will not be paying for the "college experience", but for their "education". I told them it's as easy to party and have a good time when you're a 22 year old college graduate with no debt as it is during your college years!

We are also talking about which degrees are worth the time and money to spend getting. For my friend who went to Santa Clara University to become a TEACHER! You don't need a $150k education to teach kindergarten. If you want to become a social worker because that's your calling, great, but it had better be at a CC for as many classes as you can get, and then the cheapest in-state school you can find near your parents house, because when you make $35k a year, you'd better not have spent $90k getting that degree. People just don't look at the ROI on the investment of college. If it was their 401(k) plan, they would be screaming at the HR department to get a better plan, but if it's a college degree, for some reason (for some people), all reason just flies out the window.

And as a person who was offered a partial scholarship to Stanford, with parents who said "sorry, but HELL no" to the admissions officer when she suggested that I take out loans to finance whatever they couldn't afford to pay - I'm thankful all the time for that. I ended up going to another school on scholarship and HATED college. I would have had many thousands of dollars to repay for an education I didn't get and couldn't afford.

And finally, it's the government's fault that student loan debt has gotten out of control. When student loans weren't available, people went to college they could afford to pay for. Which was most colleges. My state school was $1500/semester in 1988. Totally reasonable. Even now, at $7400/yr, it's still doable. But the reason it's gone up so much is that it's RIGHT under the amount of federal student aid available. You don't think that the $7500 federal amount being exactly what CA State schools charge is a coincidence!! If the feds decided they'd be raising it to $10k, schools would charge $9950. And if the feds said they were doing away with subsidized loans, I think costs would magically start to come down to affordable levels. The market would work, and schools would have to lower tuition to compete for students, who would be thinking whether it was worth it because the money was coming directly out of their pockets. The government screws up everything they touch, what with always forgetting to account for the law of unintended consequences.

[sanantone]

I've already told my kids that there will be no loans of any kind. We are more than happy to pay for school and let them live at home while going to college, there are 9 CC's (yes, NINE), 2 state colleges, and a UC all within 35 miles. We will not be paying for the "college experience", but for their "education". I told them it's as easy to party and have a good time when you're a 22 year old college graduate with no debt as it is during your college years!

We are also talking about which degrees are worth the time and money to spend getting. For my friend who went to Santa Clara University to become a TEACHER! You don't need a $150k education to teach kindergarten. If you want to become a social worker because that's your calling, great, but it had better be at a CC for as many classes as you can get, and then the cheapest in-state school you can find near your parents house, because when you make $35k a year, you'd better not have spent $90k getting that degree. People just don't look at the ROI on the investment of college. If it was their 401(k) plan, they would be screaming at the HR department to get a better plan, but if it's a college degree, for some reason (for some people), all reason just flies out the window.

And as a person who was offered a partial scholarship to Stanford, with parents who said "sorry, but HELL no" to the admissions officer when she suggested that I take out loans to finance whatever they couldn't afford to pay - I'm thankful all the time for that. I ended up going to another school on scholarship and HATED college. I would have had many thousands of dollars to repay for an education I didn't get and couldn't afford.

And finally, it's the government's fault that student loan debt has gotten out of control. When student loans weren't available, people went to college they could afford to pay for. Which was most colleges. My state school was $1500/semester in 1988. Totally reasonable. Even now, at $7400/yr, it's still doable. But the reason it's gone up so much is that it's RIGHT under the amount of federal student aid available. You don't think that the $7500 federal amount being exactly what CA State schools charge is a coincidence!! If the feds decided they'd be raising it to $10k, schools would charge $9950. And if the feds said they were doing away with subsidized loans, I think costs would magically start to come down to affordable levels. The market would work, and schools would have to lower tuition to compete for students, who would be thinking whether it was worth it because the money was coming directly out of their pockets. The government screws up everything they touch, what with always forgetting to account for the law of unintended consequences.

$1500 per semester in 1988 is $3,015.70 per semester in 2015. You have to take inflation into account. That is not something that poor people can pay out of pocket. There are issues with the student loan system, but the truth is that poor people usually could not and did not attend college before financial aid was widely available. $6,000 a year is a lot of money for someone living paycheck to paycheck. In the past, it didn't really matter when it came to pay because one could get a good-paying factory job. Although, I do see an issue when working class people aren't able to become educated at the level of everyone else. That's just a way to keep the working class ignorant and unable to attain a higher socioeconomic status. These days, college degrees are needed for most good-paying jobs.

If it weren't for financial aid, I would have to join the military or try to get a job at Starbucks in order to attend school. Some people don't see a problem with this, but I do. That is basically telling poor kids that they need to take on a dangerous occupation because they were born in a situation that was no fault of their own while wealthier children can go to college with having to potentially go to war.

The $7,400 tuition doesn't look suspicious to me. There are public, 4-year colleges that range from around $4k or $5k a year to well over $10k a year. Considering that range, there are going to be colleges that fall in between without regard to financial aid amounts. The student loan limit you gave is for a third-year, dependent student. The student loan limit is lower for first and second-year students, so I don't think the college even took into consideration the student loan limit for dependent students.

[dfrecore]

I made a mistake, the price for my college was a lot less than $1500/semester. Online, it says it was $800/yr, but my scholarship covered tuition plus books and fees, plus I had to work at the school, and the amount I received was $1500 for the school YEAR, not per semester. Which would make it approximately $3000/year now if you looked at inflation. So it's 2 1/2 times the price that it would be if inflation was taken into account. I still maintain that if the government stayed out of the student loan business, the market would fix this problem. When money gets artificially dumped into an area by the government, prices go up. Look at the housing bubble. Right now we're in a college bubble.

I live in a predominantly hispanic community in San Diego county. I know a LOT of lower income people who qualify for Pell grants and other types of needs-based scholarships. So I don't think poor people can't go to college. I have a lot of kids I'm dealing with from my soccer club who are coming to me regarding college, and every single kid is poor, and qualifies for tons of aid. Way more than it actually costs to take their classes at the local cc (tuition and fees are about $1750 for the school year) and it would pay their way through state college if they worked part-time to pay the rest. They are ALL working to pay their way through by the way. None of them says "I can't go because I can't afford it", they say "with this aid and living at home and taking the bus, how much do I have to work at my job to be able to go to school? Do I need a second part-time job? How much can you earn refereeing on weekends? How can I become a high school referee and work weeknights as well?" That's what the poor kids I know are doing. None of them are asking about loans, they're asking about work.

As for joining the military to go to college, this is not done by predominantly poor people. More kids join the military from middle to upper-middle income families than poor families. And if you look at former military families where I live, they aren't poor - the ones I know are all upper-middle income families. Because they joined the military and got skills and degrees and came out way ahead. My husband works with military and former military guys for a living, and many are very successful and make a lot of money. $100-$200k in annual salary, except the pilots who make a lot more than that. Obviously not everyone who comes out of the military does that, but to imply that only poor kids join the military and possibly die for their country just so they can afford go to college is not the case.

As for Starbucks (or UPS or any of the myriad companies that will help pay your way through college in exchange for lots of hard work), I think it's fantastic. If either of my kids said they wanted to do this (so that I didn't have to pay), I would tell them to go for it. I'm not seeing the downside of this.

[cookderosa]

I've already told my kids that there will be no loans of any kind. We are more than happy to pay for school and let them live at home while going to college, there are 9 CC's (yes, NINE), 2 state colleges, and a UC all within 35 miles. We will not be paying for the "college experience", but for their "education". I told them it's as easy to party and have a good time when you're a 22 year old college graduate with no debt as it is during your college years!

We are also talking about which degrees are worth the time and money to spend getting. For my friend who went to Santa Clara University to become a TEACHER! You don't need a $150k education to teach kindergarten. If you want to become a social worker because that's your calling, great, but it had better be at a CC for as many classes as you can get, and then the cheapest in-state school you can find near your parents house, because when you make $35k a year, you'd better not have spent $90k getting that degree. People just don't look at the ROI on the investment of college. If it was their 401(k) plan, they would be screaming at the HR department to get a better plan, but if it's a college degree, for some reason (for some people), all reason just flies out the window.

And as a person who was offered a partial scholarship to Stanford, with parents who said "sorry, but HELL no" to the admissions officer when she suggested that I take out loans to finance whatever they couldn't afford to pay - I'm thankful all the time for that. I ended up going to another school on scholarship and HATED college. I would have had many thousands of dollars to repay for an education I didn't get and couldn't afford.

And finally, it's the government's fault that student loan debt has gotten out of control. When student loans weren't available, people went to college they could afford to pay for. Which was most colleges. My state school was $1500/semester in 1988. Totally reasonable. Even now, at $7400/yr, it's still doable. But the reason it's gone up so much is that it's RIGHT under the amount of federal student aid available. You don't think that the $7500 federal amount being exactly what CA State schools charge is a coincidence!! If the feds decided they'd be raising it to $10k, schools would charge $9950. And if the feds said they were doing away with subsidized loans, I think costs would magically start to come down to affordable levels. The market would work, and schools would have to lower tuition to compete for students, who would be thinking whether it was worth it because the money was coming directly out of their pockets. The government screws up everything they touch, what with always forgetting to account for the law of unintended consequences.

Defrecore did you see the story about the Anti-college? It's no tuition up front- but you dedicate a % of your salary after you graduate. Interesting concept. Just thinking back how 10 years in education has changed SO dramatically, I mean in Earth-shattering ways, I think that problems like these that surround lending will be solved through the market. The govt has no idea how to fix this. Why This MIT Dropout Started an Anti-College - Seeker Network

[rebel100]

Recent grads speak out on their college loan woes: http://finance.yahoo.com/news/9-really-d...28472.html

[sanantone]

I made a mistake, the price for my college was a lot less than $1500/semester. Online, it says it was $800/yr, but my scholarship covered tuition plus books and fees, plus I had to work at the school, and the amount I received was $1500 for the school YEAR, not per semester. Which would make it approximately $3000/year now if you looked at inflation. So it's 2 1/2 times the price that it would be if inflation was taken into account. I still maintain that if the government stayed out of the student loan business, the market would fix this problem. When money gets artificially dumped into an area by the government, prices go up. Look at the housing bubble. Right now we're in a college bubble.

I live in a predominantly hispanic community in San Diego county. I know a LOT of lower income people who qualify for Pell grants and other types of needs-based scholarships. So I don't think poor people can't go to college. I have a lot of kids I'm dealing with from my soccer club who are coming to me regarding college, and every single kid is poor, and qualifies for tons of aid. Way more than it actually costs to take their classes at the local cc (tuition and fees are about $1750 for the school year) and it would pay their way through state college if they worked part-time to pay the rest. They are ALL working to pay their way through by the way. None of them says "I can't go because I can't afford it", they say "with this aid and living at home and taking the bus, how much do I have to work at my job to be able to go to school? Do I need a second part-time job? How much can you earn refereeing on weekends? How can I become a high school referee and work weeknights as well?" That's what the poor kids I know are doing. None of them are asking about loans, they're asking about work.

But, you're contradicting yourself. Pell Grants are government intervention in college financing. Grants don't have to be paid back, but a $5,500 grant has the same effect on tuition as a $5,500 loan. $5,500 is the max a first-year, dependent student can borrow. $31,000 is currently the max a dependent student can borrow, in total, from the federal government. Students aren't getting into $100,000 of debt because of freely available loans from the government. The loans that are offered to parents require credit worthiness.

As for joining the military to go to college, this is not done by predominantly poor people. More kids join the military from middle to upper-middle income families than poor families. And if you look at former military families where I live, they aren't poor - the ones I know are all upper-middle income families. Because they joined the military and got skills and degrees and came out way ahead. My husband works with military and former military guys for a living, and many are very successful and make a lot of money. $100-$200k in annual salary, except the pilots who make a lot more than that. Obviously not everyone who comes out of the military does that, but to imply that only poor kids join the military and possibly die for their country just so they can afford go to college is not the case.

This is not what I meant at all. I know that poor people do not make up the majority of military recruits. I meant that the military is often recommended to poor kids. I, personally, believe that people should only join the military because they want to. I don't believe that people should join the military out of desperation, and I definitely do not believe it should be one of the only options to get out of poverty.

As for Starbucks (or UPS or any of the myriad companies that will help pay your way through college in exchange for lots of hard work), I think it's fantastic. If either of my kids said they wanted to do this (so that I didn't have to pay), I would tell them to go for it. I'm not seeing the downside of this.

There is nothing wrong with working at Starbucks for free tuition at ASU Online, but this is not a macro-level solution. ASU can only take so many students, and Starbucks only has so many job openings. There are also not enough entry-level jobs at companies that offer tuition assistance for every person who wants to attend college, but can't afford to pay for it out of pocket. Out of the many, many jobs I've had, only a few offered tuition assistance (in very small amounts) and only one could someone hypothetically get right out of high school (this organization rarely hires anyone under 21). It would be nice if people could just pick and choose where they want to work based on benefits, but life doesn't work that way. During the two recessions that occurred since I was 16, I had to take what I could get.

[dfrecore]

Recent grads speak out on their college loan woes: http://finance.yahoo.com/news/9-really-d...28472.html

What I don't get is how they didn't figure out BEFORE taking out these loans how much they will be and how long they will take to pay off. They signed up for the money, now they're complaining about paying it back. I don't get it. I bought my house, signed the loan docs, and now I just make that payment every month, with no complaining. I never tweet out "Gee, only 26 years left on the loan I took."

I guess that's another thing the government has done, is let these people take out ungodly amounts of money that they may or may not be able to repay easily ($100k for private school to become a social worker making $35k when you graduate - sure!). If they made the loans based on some logical rules, such as "you can only take out x% of the projected annual income of your chosen profession" or whatever, at least that might help some. But there are just no rules. I can't go buy a $2M house just because I want to, I have to show the bank that we can pay the mortgage with a 1/3 of our paycheck. If not, then they're like "scale back honey, and join us in the real world!".

[dfrecore]

a $5,500 grant has the same effect on tuition as a $5,500 loan.

Actually, it doesn't. Because not everyone qualifies for a grant (about 38% at public universities), so the number of students getting that money is fewer, and has less effect on the marketplace of tuition. If EVERYONE at a school has the opportunity to get a loan, then the school can raise their rates and tell people "just go get a loan." But if they aren't able to, then schools can't say that, so they don't. They lower their tuition to compete for students. It's actually how the marketplace works for many, many things in the world.

If you can't afford a new iPhone or Samsung Galaxy because it's too expensive, there are tons of options for less expensive phones. Over the last few years, demand for cheaper phone service has exploded, and companies responded to that demand. The cost of cell phone plans has come down, as the companies compete against each other for your business. I pay a whopping $25/mo for unlimited text, phone and 1G of data. I paid $80 just a couple of years ago!

Look at the car marketplace - not only is there a huge range of prices for new cars, but for those who can't afford/don't want new, there is a wide range of prices and places to buy used cars.

The easy money from the government has meant that schools can raise their prices unnecessarily, and because students can put off paying for it until after they're out of school, when it's too late to do anything about it, they have no effect on the pricing. If they had to pay for it up front, they would demand better pricing or go somewhere they could afford, and colleges would be FORCED by the marketplace to make their colleges affordable, or lose students.

[dfrecore]

Defrecore did you see the story about the Anti-college? It's no tuition up front- but you dedicate a % of your salary after you graduate. Interesting concept. Just thinking back how 10 years in education has changed SO dramatically, I mean in Earth-shattering ways, I think that problems like these that surround lending will be solved through the market. The govt has no idea how to fix this. Why This MIT Dropout Started an Anti-College - Seeker Network

I like it! I like anything where people try new things to see how they're going to work.

I also like the idea that the school has a vested interest in your future career. Talk is cheap, but when they're receiving a % of your salary, they want that salary to be as high as possible! Interesting concept.

I agree that over the next 10, 20 years, the market is going to explode with new ideas and models of education, and this whole B&M college thing will be changing drastically. And this is a good thing, as what we have now isn't working for so many people. AND, the government won't have to get involved at all, because they will be too far behind. This will all work itself out before the government can get their grimy little paws in there to mess stuff up!!

[UptonSinclair]

I don't mind easy money for public colleges, but I believe tuition should be heavily regulated. Too many public colleges are operated like private entities. I have listed to the president of our flagship university talk about what the market will bear. These clowns what to play capitalism when it comes to pricing and socialism when it comes to government money.