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

[rebel100]

Our sons' $189,000 student debt is delaying our retirement - Nov. 30, 2015

Details a couple of intelligent people who allowed their kid to place the burden of a seemingly worthless degree around their necks. Now they are shackled to $129K in loans while the kid waits tables.

Seems they haven't fully learned their lesson either, kid #2 already at $60K and counting! Combined losses of $289K so far.

Quote
"Tim graduated from Rutgers University with a bachelor's degree in journalism and media studies. He's especially interested in a Hollywood career, but has found it hard to land a job there, though he's picked up some spots as an extra on TV shows. Tim is mostly trying to make ends meet by working as a waiter and bartender."

Sad, sad, sad, student loans don't just affect you.

And this is Rutgers! It's a freaking PUBLIC college!

What a disservice this debt has become for this family. I know I'm preaching mostly to the choir here, but remember to be careful out there!

[rvm]

I totally agree. I tell my kids this all the time. This is exactly why I refuse to take out one penny in student loans. Of course it's taking me years to complete my degree (after waking from the years I wasted). But when I'm done, I won't have to worry about being in debt.

On another note: college isn't over-rated but some degrees are. Parents and kids need to do their homework. Did they really think their kid could land a job as a writer in Hollywood? Hollywood, FLA? Writer for a news outlet, online magazine, or what? How many people today earn a living as a writer?

Universities need to do a better job of educating their students as well. I'm not talking academics here. I'm talking near worthless degrees like journalism and marine biology. The learning is valuable. But the jobs are few and far between. And when a job is landed, the pay is terrible - less than $30k. Who can feed themselves - not to mention a family on that and have $1 remaining to pay student loans. It's an atrocity!

[videogamesrock]

I blame the parents. The parents are idiots, the kids are probably idiots too.

[rebel100]

I think they have each other to blame, and I think they are all right! College is one of those weird things. We are taught that through the hollowed doors of academia lie success, and I still think that's partially true, but it's only part of the story. Google will show you hundreds of stories like the one linked above and these are for the graduates. It's so much worse if one takes out loans and fails to finish the degree.

I prefer a game of "beat the man" where I've taught my youngsters to game the system, CC first, use CLEP/DSST, use dual enrollment, live at home,exploit every opportunity. The flip side of the high cost equation is that there are opportunities to greatly reduce your expenses. You owe it to yourself to be super informed and make smart choices.

[LaterBloomer]

Some years back I attended a college graduation at a very expensive private school. One of the students who spoke was a resident of the state. She told of a conversation with her father when she was in first grade. He told her that if she wanted to go to college, it was on her. He was a farmer with a very limited income. Parents should be having those types of conversations with children beginning at an early age.

And the kid going for a second degree? Mean me thinks it's just doubling-down on stupid.

[sanantone]

I don't think the problem is borrowing money for school. Rutgers' in-state tuition does not cost that much. I'm not even sure if their non-resident tuition costs that much. You rack up that much debt by taking out more money than needed for tuition. If you're on a budget, then you should give your child the option of either going in-state (maybe even close to home) or getting a job to pay for living expenses and/or out-of-state fees.

[rebel100]

There are a lot of ways to do it without debt. When you consider the poor return that many degrees offer reducing cost should rise in importance. I suppose part of my problem is that I've found so many free or reduced cost options that I just can't fathom taking on significant school loans (I refuse to take out any more and I will not be a party to my kids taking out loans for anything less than a medical, engineering, etc... degree).

I think your right though Sanantone, it isn't necessarily the tuition that gets you. And perhaps the skills of budgeting and prioritizing are whats truly lacking. One has to be able to think beyond today to consider how the choices we make will affect our future.

[Johann]

If there was ultra-easy financing for cars - say, via government agencies, like college financing, then an entry-level micro-car would soon cost $50,000! And anyone with a driver's licence could get such a loan, or maybe two, whether they could afford the payments or not. Easy credit leads to sleazy pricing - for anything, including all costs of an education. It's just like the rent-to-own furniture companies, except the merchandise (degrees) is different. Or maybe like the ninja-loans mortgage bubble...

Despite this, the mere existence of a bad, or badly-administered scheme is no excuse for the individual stupidity of signing up for it, especially when one knows exactly where it leads. And if one doesn't - one ought to. Unfortunately, stupidity is not curable - as a doctor once sadly informed me, shaking his head.

J

[sanantone]

If there was ultra-easy financing for cars - say, via government agencies, like college financing, then an entry-level micro-car would soon cost $50,000! And anyone with a driver's licence could get such a loan, or maybe two, whether they could afford the payments or not. Easy credit leads to sleazy pricing - for anything, including all costs of an education. It's just like the rent-to-own furniture companies, except the merchandise (degrees) is different. Or maybe like the ninja-loans mortgage bubble...

Despite this, the mere existence of a bad, or badly-administered scheme is no excuse for the individual stupidity of signing up for it, especially when one knows exactly where it leads. And if one doesn't - one ought to. Unfortunately, stupidity is not curable - as a doctor once sadly informed me, shaking his head.

J

You don't have buy here-pay here places in Canada? That's where people with a low income and bad credit can finance overpriced, used cars at high interest rates in the U.S.

[Johann]

You don't have buy here-pay here places in Canada? That's where people with a low income and bad credit can finance overpriced, used cars at high interest rates in the U.S.

Of course we do! Interest rates to match the risk. That's what I meant by "rent-to-own" furniture. The store shows up with a truck if payments are behind. We have predatory "lease-to-own" used car lots, too, where the dealer retains an extra set of keys, handy if someone gets behind on their note. Plenty of people with low incomes and bad credit here! I was talking about what would happen if those same poor people with bad credit could finance new cars, under a government-involved scheme that doesn't exist - and hopefully never will. That would be more like the current U.S. education loan system - and I think it has even worse consequences than "buy here - pay here."

If the mistake is irretrievable, even the worst "buy here - pay here" car deal can be discharged in bankruptcy at any time. "Easy" education loan --- not so. It's still possible in Canada, but nowadays there are some restrictions on bankruptcy discharge of student loans. I think the time-frame must be 10 years or more since leaving school; a decision about the amount, if any, to be repaid after bankruptcy is made by a bankruptcy judge in each individual case, according to the debtor's circumstances. Canada used to have no rules in this regard, but we got to a place where one in eight bankrupts was a former student (sometimes newly out of school) with education debt. So we put the brakes on, but discharge is still possible and the terms are on an individual basis.


J.