Average debt up again for new college grads - Page 3

SteveMA · 10-23-2012, 02:59 PM

If they don't have a job they can defer paying back the loans. There are provisions in the federal loans for doing that but even with that, making $12/hour at Target or where ever will earn you $25,000/year, which is the same ratio of debt to income I had when I first got out of college. There ARE jobs out there, kids need to be flexible about where they move to get those jobs though....

zenkoan · 10-23-2012, 03:08 PM

I'd like to believe that there are jobs available for all young people seeking them, if they'll only move to find them, but I've seen a lot of news accounts of hundreds of applicants for each entry-level job, all over the country. That's one of the main reasons so many college grads are moving back in with their parents. But some kids don't even have supportive families (or any families to speak of, in some cases) to whom they can return while they look for work.

J'adoube · 10-23-2012, 08:50 PM

Dug out some old papers: Tuition U of Florida 1970-71: $450 1971-72: $570 (2012-13: $6170).
COA 1970 (mine): $2000 1971: $2200 (off off campus in a mobile home) Official COA 2012-13 from school website: $20580. My projected debt would have been $4000 ($40k today?) after four years because the maximum amount for the type of loan I got was $1K/year. After 2 years ran out of money so parents found me a school they could afford. It turned out to be a very good choice.

bchan1 · 10-25-2012, 03:40 PM

I think the troubling aspects of current educational costs are not truly revealed by the dollar amount at graduation. If 50% of college students graduate without a job, I have to believe that a good portion of those kids has a larger debt load by the time they are employed with a college commensurate salary.

I don't believe the lost wealth of parent borrowing via HELOC is accounted for in these numbers - nor is the lack of saving for retirement and other things foregone by parents to keep the debt as low as it is.

In my experience, kids and parents will say "it's only costing X dollars per year" because they are only looking at the direct cost and not taking into account the other things that have been liquidated or eliminated to make a college choice possible - things that had value either as dollars contributed to some sort of savings or investment account or as money that would have been invested in a house or other real estate if the cost of education weren't where it is. I don't think the nature of the problem is such that it will burst in the same spectacular fashion as the housing industry, but unless there is job recovery on a scale that is nothing short of spectacular in this country - I do think this growing pile of debt will cripple many individuals to greater or lesser extent and collectively drag our economy down for decades to come.

spunk61 · 10-25-2012, 09:53 PM

What would the monthly payment be on $26000. Just trying to crunch the numbers in my head. Rent, Car, Car Insurance for a young kid, FOOD, Phone ,Internet which I don't see how you can avoid, Cable TV, Medical. I'm sure I'm forgetting a bunch of other bills. Seems to me that a $26,000 debt is going to be causing a big problem. $12 an hour at Target is not going to cut it. I don't see the job market changing for a long long time and it could get worse.

J'adoube · 10-25-2012, 11:07 PM

$26,000 at 5% interest for 10 years would be $275.77 per month.
At 8% the payments would be $315/month. (from a mortgage amortization calculator)

SteveMA · 10-26-2012, 07:48 AM

spunk61--$26K is a take home pay of roughly $1600/month depending on your tax situation. No, you won't survive in NYC, Boston, etc. on that wage unless you have 10 roommates but there are 1000's of places across the country where a young college grad can do just fine on that salary. Given that the average salary for a new college grad is almost double that, having $26K in student loans is not going to be an issue if you are smart about expenses.

zenkoan · 10-26-2012, 04:25 PM

Given that many new college grads throughout the country are unable to find steady work at all, and that many that do find jobs make considerably below that average figure, I'm still very worried about my contemporaries graduating with that much debt.

TheOmniscient · 10-26-2012, 11:20 PM

College loans are one of the worst propositions students can make today. Much better to just go to a state school.

spunk61 · 10-27-2012, 06:37 AM

SteveMA, I lived in NYC after college with 4 roommates so I know it can be done. I also worked in a restaurant in NY during school not getting home sometimes till 4AM. think I started at around 18,000 (84)after college and landed my first interview. I just don't think it's too easy to find good jobs though right now . But young kids have time on their sides and I think you really have to be thinking outside the box these days. I would also encourage kids to develop or learn some other skill that they could do part time or full time if need be.

SteveMA · 10-27-2012, 08:32 AM

TheOmniscient--except for many students here the state schools end up costing MORE then the private schools after merit aid. Between our 2 applying this year they have applied to 19 schools, 4 state schools. Of their choices, 1 state school is on the lower end of their costs, but not the lowest, the other 3 are their most expensive choices right now.

Whatdidyou · 10-27-2012, 05:36 PM

"College loans are one of the worst propositions students can make today. Much better to just go to a state school."

haha. State school is expensive too. If it was just private colleges that were so expensive, there would not be so much uproar about rising tuition costs.

"again, there is NO reason ANY student should have to take out loans that are not affordable to pay back."

Here are some reasons:
1. No job after graduateing (a bucket that MANY students fall into) = unable to pay back.
2. No full-ride/full-tuition scholarships or wealthy & supportive parents. One of the cheaper state schools in my state has a total estimated cost of attendance of ~27K/year. That is a BIG number.
3. Low paying/hour jobs during school & summer jobs (getting a decent job that will work around your ever-changing school schedule in this economy is tougher than some realize.

"I think the troubling aspects of current educational costs are not truly revealed by the dollar amount at graduation. If 50% of college students graduate without a job, I have to believe that a good portion of those kids has a larger debt load by the time they are employed with a college commensurate salary."

I agree with this. Many students continue working their retail jobs for a long time after they graduate.

"There ARE jobs out there, kids need to be flexible about where they move to get those jobs though...."

This is a silly thought IMO. It can be difficult/expensive to get an out-of-state job and ill-advised to move before you have something lined up.

"Given that many new college grads throughout the country are unable to find steady work at all, and that many that do find jobs make considerably below that average figure, I'm still very worried about my contemporaries graduating with that much debt."

$26k is a lot for the environment these students are facing. And remember, that $26k figure is misleading. Many students are lucky enought to have parents who supported/contributed greatly to their college costs. There are many students with much more debt than that.

SteveMA · 10-27-2012, 05:52 PM

Whatdidyou--the figure is misleading in that it is the average, if you take the mean, which is more accurate and pointed out in an earlier post, that figure is actually $13,000. In other words, more hype.

When I graduated from college no one had jobs when they graduated. Most took time off after school and THEN looked for jobs. That 50% graduate with no job is FAR more misleading. Look at the number of kids that have jobs within 6 months of graduating and you are more accurate.

As for moving to the job, how it is silly? Sure, it can be somewhat expensive if you have a house to pack up and move but for a kid right out of college, pack up your stuff in the back of the VW and off you go. Getting an apartment anywhere is going to cost you money so why not do that where you have a job? No one said anything about moving before you had a job.

Whatdidyou · 10-27-2012, 07:52 PM

SteveMA:

"There ARE jobs out there, kids need to be flexible about where they move to get those jobs though...."

Explaining away the high student unemployment rate by saying that students just need to be more flexible is much too simplified. And if anything, being too broad about location desires in the interview process is often seen as a negative not a positive.

"When I graduated from college no one had jobs when they graduated. Most took time off after school and THEN looked for jobs. That 50% graduate with no job is FAR more misleading. Look at the number of kids that have jobs within 6 months of graduating and you are more accurate. "

Statistics are all relative. I'd bet the 6 months after graduation figure is also higher than it used to be. And nowadays, students are foolish to take months off the job search in this economy. Taking time to travel, explore, and discover yourself is a pastime. It is much too competitive nowadays.

"Whatdidyou--the figure is misleading in that it is the average, if you take the mean, which is more accurate and pointed out in an earlier post, that figure is actually $13,000. In other words, more hype. "

You mean median? I'm not sure I trust your statistics. Even if I do, if 1/3 graduate with no debt due mostly to parents and scholarships. I can believe that many students also get 2/3 to 1/2 of their costs paid by mommy and daddy and that the median debt is $13K. However, there are many students who are not nearly as lucky.

SteveMA · 10-27-2012, 08:00 PM

Whatdidyou--scroll back, I didn't post the $13,000 figure, someone else did. Again, hype, you HEAR the horror stories about kids graduating with $200,000 of debt from UG but they are still few and far between. How many kids do you know personally that have that kind of UG debt? In fact, most of the time you hear huge student loan amounts it's in conjunction with UG and Med or Law school.

Look at the threads here about kids looking for jobs and where they are looking. There is some fascination with NYC and Boston. How many kids do you see looking for jobs in Omaha, Des Moines, etc.? The center part of the country has very low unemployment rates and many companies are crying for qualified employees....but they aren't sexy towns to live in so they aren't getting any attention.

I disagree that taking time off after college is a bad idea. How does that make you any less employable then someone that started looking the day after they graduated. I would say that employees would be happy to see someone apply for jobs that traveled around Europe for a month after graduating. I think you are making too much out of the "competitive" nature of jobs around the country. Companies hire at all times of the year, not just May.

Just to use one midwest example--3M, probably heard of that company once or twice, has 5 PAGES of listings for engineers....