But that’s California. In my state, or at least area, CC is $10,000 a year. There aren’t free CC classes for high school students. Commuters at 4 year colleges pay $15,000 a year. Not everyone lives commuting distance to 4 year colleges. With a very high COL, families who live paycheck to paycheck can still not be eligible for FA.
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They could always choose to take lower paying jobs and give their existing assets to charity in order to become poor if they think that the poor have it easier.
Of course, if they had lower income with lower spending then, and kept their spending low after having higher income, then they should have plenty of unspent current income to pay for kids’ college.
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In your case, the cheapest option to get a college degree would be $50K totally commuting from home. If there is no college in commuting distance, then you need to be creative to save money, such as sharing apartment with others, cook for yourself and etc., My point is if your family cannot afford the “traditional” collage experience, you should look for the best option which your family can afford, for least amount of college debt. Unless your family can afford it, don’t expect to go to top colleges, because you are the top students in high school. Good Luck
Do you understand that working professionals with 6 figure incomes are already doing this-- and with some stress financially? A college kid from a low income family is supposed to do this?
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Living at home and commuting does cost more than $0, so actual costs for a commuter student would be higher than just the tuition costs.
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As far as actual amounts of undergraduate debt students are taking, you can look at Interactive Map - The Institute for College Access & Success . On the map, if you click on a state, it will show average debt levels and percentage with debt for various colleges in the state.
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Yes.
That said, however, it’s not always the easiest thing to figure out the costs. It’s actually how I came to be on CC. My kid was nowhere near the age when it was reasonable to be thinking about specific colleges and college lists. My spouse and I had planned to cover the COA of our in-state flagship, but there were some signs that a state flagship might not be the right kind of school for our kid and we were trying to guesstimate what the costs might end up being for us to save appropriately. But in a financial forum and even some on CC, there were those who said that it was too early to be thinking about and/or save every bit you can!
But there was also the point of trying to find a balance (i.e. going on vacation with extended family who don’t live nearby or with relatives who only have a few years left to travel vs. doing staycations by ourselves, whether to spend money on enriching camps vs. having the kid stay home and watch tv/play videogames all day with family for free, what kind of ECs, if any, were affordable, etc). And of course, there’s no guarantee that the kid would decide that college was the right next step anyway…so how much did we want to sacrifice for a future that might not be desired?
So we’re still in the game of trying to balance sufficient savings for college with other spending values/priorities. Though I’m at peace with where we are, I’m not 100% confident that we’re at the best balance point. But if it was challenging for someone who likes to research, likes colleges, and is a planner ( 
) to get a sense of future costs, then I can definitely understand how it could be a pitfall for others.
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Not sure where to put this, so will put this here: someone is creating bots to pose as artificial students to take (steal) financial aid money that could go to real, needy students.
https://www.sfgate.com/bayarea/article/ghost-students-creating-problem-calif-colleges-20311708.php
Yes, students are borrowing too much without understanding the loans, the actual repayment costs, the costs of deferring loans when they DON’T make $100k as their first year salary. I think students WAY overestimate how much they will make and how far that first salary will stretch. Will they need a car to get to the new job? Will they need dishes and pots and pans for the new apartment? Security deposit? Pet fee (oh they all want pets and pets cost A LOT).
18 year olds just don’t understand the nickels and dimes of their budget once they leave home, be it at 18 or 22 or 30. They don’t understand that the water bill in Jan is $37 (the minimum for my house) but $150 in the summer if they water a lawn or garden. They don’t understand, until they have to pay it, FICA/SS taxes, special assessments (here for sewer and, yes, a new ‘sidewalk tax’). $75 x 2 x twice a year hits the budget.
My daughter is working just to pay her student loans first. She has a very understanding husband who is supporting them because her teaching job fell through for this semester after she’d changed her hours at her extra job (now only job). It’s tough. I’ve paid some of her student loans (using my Segal grant from Teach for America) and will pay some more as I can, but have advised her that doing a deferment is not a good idea and will just cost more in the long run. Just suck it up now.
And she only borrowed about $20k. Even with the extra payments I’ve made, she still owes almost all of it after paying for 3 years. It doesn’t go down very fast and she has a much lower interest rate than most borrowing now (I think hers is about a 4% average for the years she borrowed)
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My favorite phone call from one of my kids during their first year of work after graduating college.
“Mom, did you know that even with health insurance you still have to pay the doctor?” (yes I did). “They are taking money out of every paycheck for my health insurance… and today I went to the doctor for a strep test and I had to hand them over a “co-pay”. Have you ever heard of that?” (yes, I have. I have been paying your co-pays for every single doctor’s visit your entire life). “Wow, I just assumed that since I was paying for health insurance, everything would be covered. And the billing person started explaining to me how my deductible worked and now I’m really freaking out”.
I don’t think my kids were naive about money. But we probably should have shown them a paystub or two along the way which showed Gross, FICA, health insurance, etc. and then way down at the bottom, the severely diminished net pay!!!
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Interesting conversation about this here: AI used to defraud Community Colleges and taxpayer funds
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Yep. That’s it. And I looked back and we were discussing this same exact issue here on CC 2 years ago!
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Here it is!:
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I don’t think mine were either, but I did do their taxes because it was just easier as they were away at college and I needed to coordinate all three returns to claim the AOTC. They’d had jobs in hs but when FICA is just a few dollars of a paycheck, they didn’t care. When it got to be hundreds or thousands a year? Shocker.
When my daughter was about 5 she was really upset about sales tax. She knew if she had $3 that wasn’t enough to buy something that cost $3. She didn’t really understand it, but knew she needed more money to get that item. She suggested I should cover it because the whole system was just SO unfair (No, but sometimes her grandmother would spring for the tax.) FICA was another disappointment for her.
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Sales tax- hilarious!
You’re right about FICA. Kid had been working for several years, so it should not have been such a shocker. But when it’s a minimal amount from each paycheck, it’s easy to disregard (plus when he was living at home, he didn’t need to make sure he could pay his rent!) But the first paystub of a “real” job- ouch!
I had a grad school student who came to me because she was doing her own taxes for the first time & she thought she was doing something wrong. TurboTax was showing that she owed a pretty hefty amount for taxes, and she was sure she had to be entering information incorrectly. I had a policy of no tax advice, but I told her that if she wanted to show me what she did, I would help her identify the issue. Well … the issue was that she didn’t understand what withholding was, and she set her withholding up at 0. That was a real learning experience for her. She had always had very part time jobs through undergrad, and she didn’t make enough for the no-withholding to be a problem. Prior to starting grad school, she had worked full time + overtime for the first eight months of the year. That was a problem, and she had to borrow from her parents to pay her tax bill.
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You’ve identified a common problem. The Dave Ramsey’s of the world are preaching that only an idiot lends money to the federal government by allowing them to withhold. Except the opposite of idiot isn’t always genius- especially when those alleged geniuses have to pay a tax bill when they don’t have the money to pay it.
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Yes! Even if you are aiming for a high paying career its still probably a good idea not to take on too much debt. Life happens…and what if you change your mind about that high paying career. It’s best to avoid debt if at all possible even if you are aiming for a high paying career. And that’s before the kid decides they want to go to grad school or wants to be a doctor and is going to medical school…
Well said! Or they want their kids to have a certain experience. Question is, is that experience worth the debt?
In my day you often went to the in state school because it was the cheapest. Most kids stayed in state, even the ones who were quite well off. If you went private it was either because your family was catholic and they wanted you to go to a catholic university, or you got recruited for sports, or your parents were old fashioned and wanted you at a women’s college or you were the 1 super smart kid who went to an ivy. You almost never heard of anyone out of state for a public universities.
Same here! It’s also funny how many parents expect their kids will get free rides and a ton of scholarships or will get recruited to play sports. Most kids don’t. I bet if you asked parents how many people they actually know (not some sports star) who got full rides to college, they probably could only name a few if any. Middle and upper middle class people often can afford college, just maybe not the fancy one.
My biggest pet peeve is people who think the poor have it easier. Talk about being delusional.
My niece had a high paying job right out of college and she still wasn’t making $100K. She also had a smaller wedding due to her student loans, even though she was making a lot of money.
I can’t tell you how many friend’s of my D who complain about money, but just had to get a pure bred dog. And they post go fund mes to help pay the vet expenses. Like, maybe don’t get a pet in the first place?
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"Americans are deep in the hole on student loans, with over $1.6 trillion in outstanding debt, according to the Federal Reserve Bank of New York. "
When I checked a couple of years ago, about half of that total is debt for grad/professional schools, incurred by adults.
Spot on.
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Many students still have a good amount of uncertainty about the future of their student loans, as there has been past discussion about student loans being cancelled, or being cancelled for certain students in certain situations. There has also been long periods of 0% interest, which some students believe may return in the future. This uncertainty contributes to why some students have not been paying loans off/down.
Assuming student loans are applied as specified in contract, whether students are taking on too much debt depends on a variety of factors including the type of degree, planned career path, and alternative lower debt options available to the particular student. Many analyses have found that attending college (and completing a degree) as a whole has a high ROI and is one of the most influential factors in improving SES from one generation to the next, including when considering debt.
However, it’s not a uniform improvement for all students who go to college. According to the NCES, ~35% of students who start at a 4 year college fail to graduate within 6 years. Among open admission 4-year colleges, 70% fail to graduate. Students who fail to graduate usually have a poor ROI on their student debt.
Both post college earnings vary widely by college major and career path. For example, the NACE reports the following outcomes by major among the >750k students in the most recent year of their database. It’s easier to pay back student debt on a $100k salary than a $40k salary.
- CS (11.07) – Median Salary = $102k, 15% seeking employment or education
- Statistics (27.05) – Median Salary = $84k, 15% seeking employment or education
- Mech Eng (14.19) – Median Salary = $76k, 11% seeking employment or education
- Finance (52.08) – Median Salary = $72k, 10% seeking employment or education
- Nursing (51.38) – Median Salary = $69k, 9% seeking employment or education
- …
- Overall – Median Salary = $64k, 15% seeking employment or education
- …
- English (23.01) – Median Salary = $45k, 21% seeking employment or education
- Psychology (26.01) – Median Salary = $44k, 18% seeking employment or education
- Biology (26.01) – Median Salary = $43k, 19% seeking employment or education
- Education (13.01) – Median Salary = $42k, 9% seeking employment or education
- Drama (50.05) – Median Salary = $40k, 23% seeking employment or education
A similar type of pattern occurred for master’s degrees, which are associated with substantially larger debt than bachelor’s degrees.
- CS (11.07) – Median Salary = $124k, 12% seeking employment or education
- Nursing (51.38) – Median Salary = $94k, 11% seeking employment or education
- Mech Eng (14.19) – Median Salary = $92k, 13% seeking employment or education
- …
- Biology (26.01) – Median Salary = $57k, 19% seeking employment or education
- Education (13.01) – Median Salary = $53k, 9% seeking employment or education
- English (23.01) – Median Salary = $50k, 13% seeking employment or education
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