Student Loans - they aren't good

Paying for College
45

Thank you for your post.

First off, it’s an article and yes I agree with much of it, but if we are not balanced, seeking all opinions here, then what are we?

And I did give a path to approving of loans in the first post. I’m really concerned that kids/parents don’t seek reasonable alternatives when they are available.

Here’s what bothers me - I need to spend $80K to go to UCLA and take a loan to do it when my in state flagship (likely a sub) is $40K.

Now, it’s not an exact but someone just mentioned grad school debt - there’s a post now about should I go to Rutgers or Wesleyan. My family can afford both and I’m going to end up in med or some other grad school. If I go to Rutgers, I have $250K saved for grad school. If I go to Wes, I’ll have to take loans for grad school / med school.

Now, if the parents can pay Wes out of pocket, they are not most students - and wealthy parents are more likely able to help their kids pay loans.

But why is someone going to a four year residential school that can’t afford it vs a home school or a two year school. Now, you say not all can reach and of course that’s true but two year schools have a lot more reach than you think. I travel the SE - from VA to Texas - the last 15 years. I’ll be heading to Atlanta in two hours. As I drive, there are so many branches of CCs and even four year schools - in small towns….so many. So I think for most, access isn’t that far….even in places like rural MS.

Third party, but I found this on line - it shows 36 states providing free community college. Are they free to all, I don’t know. But inherently community college is a lower cost option. Heck today, some states - Georgia/Florida as examples - offer free four years of college and yet some families take out loans so their kid can go to Emory or Duke..

But my point is for that kid that doesn’t have a decent budget, he can go to KU for cheap in state, but much rather go to UIUC because it’s more esteemed and his parents take on debt to do it.

Or kids that come on here - I want to go to Harvard - I’ll take on any debt, etc. etc.

There are tradeoffs and choices.

My true argument is - kids should make the choice that has lower or limited debt. Now we talk about Ivies or the Vandy’s of the world - in most cases, those kids don’t take on big debt as they get need. And the wealthy parents can afford them.

But what about the kids whose parents are in the middle - I forget the term you all use - but they make too much to get aid but can’t afford $90K so they take loans. Why? If you want your kid at Vandy or WUSTL, what’s wrong with discounted Denver or Miami of Ohio or Butler, etc.

That’s really my point - and some of it was mentioned above - lenders (which is their business to lend) so while I don’t love them, I understand why they do what they do.

And perhaps it goes back to - how important is prestige?

I’d rather kids get a college degree and have choice in life - to do what they want. So, so so so many are falling behind and they lose choice - where to work, live, to put money away for retirement and more.

Others will say I’m wrong - but college is a commodity in my opinon. You are getting a degree in something. Yes, the experiences are often different - but Denver will have a cheese club just like a Vandy, etc. U Arkansas or Alabama graduates engineers just like U of Michigan, etc. They all have nice dorms and gourmet food - so it seems today. So then how aren’t they a commodity?

That’s my contention - life has tradeoffs. Sometimes it means you have to live at home or start at a two year school - in hopes of acquiring a degree.

Too many are thinking the short and not long game, and they’ll get burned.

Thanks

Which States Offer Tuition-Free Community College? - Scholarships360

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46

Cannot agree more. Very well put.

Students need to be intentional about their choice of college depending on their personal situation.

The biggest challenge is when a student is either not very motivated, or ends up taking loans to attend a college where environment isn’t very conducive to academic growth and career success.

I live in GA, where almost everyone attending state colleges pay zero tuition provided they meet a very reasonable GPA criteria. I know many who drop a chance to attend an Ivy and attend GT, UGA to avoid needless debt.

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47

But this is not true.

The closet branch of my state University system to my town does NOT graduate engineers. That requires the state flagship, which is in a rural area and not commutable for most of the population centers of the state. And the local branch does NOT have nice dorms and gourmet foods. It has one dorm and some “rent from local landlord, 12 month lease, good luck finding a subletter for July and August”. But we have good public transportation so many kids live at home and commute. They’ll still need loans-but they get a free bus pass if they are enrolled.

Want to be a K-12 teacher? It has a solid reputation. Want to be a pre-school teacher? Its early ed program is great– why, because it used to be a teacher’s college. Want to be a CPA? It’s a solid choice, because adding a business major was a cheap add-on when the school entered the state U system and was overly female and adding a business degree was the fastest way to diversify the gender mix.

Want to study robotics? Sorry kid. Want to become an engineer– like your kid wanted? Sorry kid. Pre-med? well, we have a chemistry lab, mostly for the students who want to teach HS chemistry.

It is a fallacy that a kid from a limited income family can get to any place he/she wants to because- after all- college is a commodity in your opinion. Your opinion doesn’t explain the kids who- absent loans- would not be getting a degree.

The classism in the “No loans” arguments are hard to ignore, mainly because it preserves educational options for wealthy and middle class kids, and shuts out viable options for low income kids. But that’s ok. There’s always the military (which is overwhelmingly volunteers from low income households right now, wonder why).

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48

But that local branch can get the first two years out and that kid can live at home.

Just like lots of schools - publics and privates - have pre-engineering or whatever else, 2+2 and 3+2 because they can do the math, science and other general eds.

And if they have a money crunch, they don’t need that luxury dorm - many of which are public / private partnerships today.

That student, if they can’t afford Your State U, then you shouldn’t be at Your State U - at least until they have to be. The student you describe can likely do their first two years locally and live at home if money is an issue.

And if you’re taking out loans the first two years because you couldn’t afford to be there, then you will the last two years - and now you have a kid with too much debt.

Kids coming out today, $50K, $60K - and guess what - it’s not enough. Engineers - mine is making 6 figures two years out - and yet based on where he lives, it’s not really enough.

And the world is getting more, not less expensive - which wages now not keeping up with inflation.

YMMV - and we’ll never agree on this and that’s ok.

Thanks

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49

And what of the kid who has taken the “wrong” math and science? Very common for engineering, somewhat common for the pre-meds.

Taking the chem that’s right for allied health won’t get you credit at the state flagship for a chemistry major. Taking the statistics that’s right for a business degree won’t get you credit for an engineering degree at the flagship.

Then what? so it’s not 2-2. It’s 2-3 or worse, usually meaning like in Kelsmom’s point, the kid drops out with NO degree.

Like I said, a LOT of classism in these discussions. Nobody loses sleep over the kid from a low income family who is at the local state college taking classes which WON’T “count”.

Here on CC we can spend hundreds of threads debating “fit” for a kid who wants to play soccer or lacrosse, major in finance, isn’t good enough of a player to get recruited, but still wants playing opportunities and loves snow and isn’t so great in math so needs a “low math” program. We love that kid. We have so many great suggestions for that kid.

But when the kid is low income and needs Pell and loans to get a chemistry degree all of a sudden the kid needs to get real.

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51

I think one thing that would help the prospective college students…

Every HS student, before senior year, should be required to take a personal finance course in high school. I think many students just don’t understand loans, interest, compound interest, terms of repayment, etc. They could learn this in a personal finance course. If they maybe understood how loans and repayment actually work, they might think twice about the amount of loans for undergraduate school. Maybe.

When high schools do their college prep and financial aid parent info sessions, the issue of large loans should be addressed. In my opinion.

I just think there are many folks who don’t understand how loans actually work.

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52

Especially if there is a population of students who feel entitled to loan forgiveness as a strategy. Not a great bet.

53

I would not call it entitled. Many of these students are working jobs that most do not want- in very rural areas, inner cities in not so great neighborhoods, getting spit on or pinched on a daily basis etc.

I would not call those students entitled. They are taking on necessary work that many would not do, and are being rewarded for it.

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54

I am in favor of established programs that forgive loans in exchange for public service and think there should be more (It is my understanding however that those programs are poorly managed and the burden of proof is crushing.) My comment is meant for the students who believe or who have been duped into believing that they don’t or won’t have to pay because Uncle Sam is coming to their rescue. The safer assumption is that you will have to pay. Every penny. Such a class on financial literacy would help reinforce this notion.

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55

That’s why you have advisors. That same thing can happen at the four year school you attend. If you know you are going to study engineering, you’ll know in advance the classes to take.

Kids can do this - they don’t need to be at a four year school and in fact many do this not starting at a four year school.

And this save money they don’t have, the point of the thread.

56

Many community colleges (including our local one) do not even offer the level of courses needed to progress to a 4-year engineering or science/math major. Ours has many, many sections of developmental math and extremely few options for strong math/science students. More and more courses, programs, and faculty are being cut every year. Nursing and allied health programs are strong and thriving (2 of my kids are in those programs currently) but very few others are.
Advisors are often far from knowledgeable about the courses needed for a program, or are just careless. This is true even at 4-year schools. My son’s advisor placed him in a physics class for majors and didn’t even schedule the lab! Needless to say, my son failed the course. This was for a football player/ exercise science major who barely graduated from high school. I learned after that to ask to check my kids’ proposed schedules.

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57

Thank you for the reality check. There are some states where the so-called articulation agreements should have five asterisks after the name.

1- IF you can take the right pre-requisite courses in the right order

2- IF your department chair (if there is one) forwards the syllabus, a graded final paper, and a record of every completed assignment or quiz

3- IF we manage to hire a professor who can teach the classes you need- we had a budget cut and so physics got cut first since it had the lowest enrollment (chicken/egg, right? Once a school let’s it known that they’re having trouble staffing physics classes, the physics oriented kids don’t show up at all)

4- If the harried adjuncts who do the bulk of the teaching have time to advise you that if you didn’t get a B or better in HS calc, you probably shouldn’t tackle Calc 2 at community college.

Etc. And at some CC’s the academic advising is worse than in the HS’s we all complain about– and the issues are much more complex, and the downside (paying for credits which don’t “count” towards a degree ) is much more expensive.

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58

But isn’t that kind of obvious? Even the Wesleyan/Rutgers example you give is sort of not really the point. I see way more threads asking for info on merit aid than I do of people seeking to take out $100K loans for non-profit undergrad colleges. Feel free to correct me, if I’m wrong.

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59

We’ve had a lot of discussions about supposed “donut hole” families and done exercises looking at what really happens with NPCs and such in different hypotheticals.

Realistically, the aid formulas at the highly resourced privates are such that you really do need to have a outlier combination of income and/or assessable financial assets in order to fail to qualify for any need aid. Maybe not outlier in their subdivision or social circles, but outlier by the standards of most families, even most families of college-bound kids.

Of course these parents may not WANT to use those financial resources in that way, like they may have other plans for using those resources that they prioritize. Which is fine, I don’t think any family should feel obligated to pay that much for undergrad if they don’t see enough value in doing so. And that’s what these colleges implicitly do with such families, ask us to prioritize college education over some other things people with those means sometimes like to have.

But typically, only if these parents want to “have it all”–both these other things they want to spend their money on AND the most expensive colleges for their kids–are they likely going to actually need to carry much debt for long. The aid formulas just don’t assess income or assets enough to make it otherwise.

Except in specific cases like a divorced parent with means refusing to contribute. In cases like that, the custodial parent may not have the means by themselves to pay. That’s tough for the kid sometimes, but there is nothing much colleges can do about that (need aid can’t be triggered just by parents of means saying they don’t want to pay).

Of course some families with means to pay out of pocket might temporarily make use of student loans anyway, just because student loans can have terms that make sense for them in their specific financial context. This doesn’t mean they plan to have the kid burdened with those loans indefinitely, it is just a temporary financing tool that is efficient in their specific context.

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