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College Costs: Some Economic Lessons To Minimize Debt

Dave_BerryDave_Berry CC Admissions Expert Posts: 2,315 Senior Member
"College is possible without horrifically burdensome student loans. Forethought and good decisions are necessary — either that or substantial wealth. I recently picked up some tips from credit union leaders who make student loans. I gave them an economic update and also reviewed the statistics that we all know: College graduates have higher earnings and lower unemployment than those who didn’t go to college or didn’t graduate. Then I listened to other experts. Here are a few things that I learned." ...

Opinion.

https://www.forbes.com/sites/billconerly/2017/10/06/college-costs-some-economic-lessons-to-minimize-debt/#d109f674798a

Replies to: College Costs: Some Economic Lessons To Minimize Debt

  • juilletjuillet Super Moderator Posts: 11,582 Super Moderator
    I think this article maybe offers some decent insights to people from middle-class to upper-middle-class families.

    Completion of the degree is, indeed, critical - but generally speaking it's prior financial problems that cause students to drop out and not complete, not the other way around. The students who are mostly likely to drop out are the students in the lower socioeconomic brackets, and often they drop out because they don't have enough money to pay next semester's tuition while keeping a roof over their head and feeding their children. The average middle-class honor roll student who finds a way to comfortably pay for college within their family's means is generally not dropping out because of alcohol or drugs (or video games...and a big WHAT. at that being in the same sentence with alcohol and drugs. Eyeroll.)

    The second piece of advice is an even bigger exemplar of that. Many high schools populated by lower-income students don't offer many or any AP classes. And $94 (the current AP exam fee) is only a "small fee" for middle-class and higher families. It adds up over time, especially if you're talking about earning enough credits to exempt you from a semester or more of college - assuming that you pass all of the AP exams with a high enough score to get credit, one semester of credit is nearly $500. (Sure, that's cheaper than maybe $5,000 of tuition or more, but at least with tuition you can borrow.) Some states and/or school districts don't cover the exam fee. If my high school didn't cover my AP exam fees, my family would not have been able to afford the cost of all the AP exams I took.

    Also getting enough AP credits to exempt one from an entire year of college work would be relatively difficult.

    The third case needs a little more examination, because the math is incomplete. Even if we assume that theater major makes $17.50 an hour in their first job out of college, $10,529 is how much they will make gross in 15 weeks. After a tax rate of roughly 20%, that's about $8,400 that they'll have after 15 weeks of work. After paying tuition of $6,000, that will leave them with $2,400 to live on for nearly 4 months - or about $600 a month, not even enough for rent in even a smaller city. The author says he ignores taxes in this example, but it makes NO sense to ignore taxes when you can pretty easily calculate their impact, especially since it's a $4,000 difference.

    He is right about the scholarships though. There aren't as many of them out there as people think, and most of the really big ones that exist are at more mid-tier colleges who are trying to attract top students who could get into the Harvards and Yales to come to their college and boost their profile. Frankly, the Dukes and Vanderbilts of the world don't really NEED to offer a lot of money to attract students.
  • thetransfercoachthetransfercoach Registered User Posts: 95 Junior Member
    edited October 26
    I agree completely with Juillet. There is a lot that goes into dropping out of college; I worked at a high-poverty community college and the issue goes far beyond whether the students pay for tuition (they usually don't; most poor students qualify for Pell grants, anyway). It's hard to get to class if your car is always breaking down; it's hard to take online classes if your computer breaks and you can't afford a new one and financial aid doesn't disburse until the middle of the semester, or your internet is turned off in the middle of the semester.
  • Josie5Josie5 Registered User Posts: 7 New Member
    It also seems a little glib to imply that anyone can do two years at community college, then transfer to a "high-prestige school". Maybe if you're in a state with a good CC system - - not everyone is. Some kids will probably struggle to make sure their CC credits transfer to a state university.
  • user4321user4321 Registered User Posts: 89 Junior Member
    If this is the best advice that experts can give us, we don't have a chance
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