<p>Why would they need to be regulated, im a bit confused by this? Do you assume an adult is to stupid to understand the consequences of their decisions. When I was 18 I was already investing. I dont think the system needs to be regulated, I think you parents need to teach your kids about money, again that is your job. But hey why not push that to on the government. How you raise you child is your business, but it is not the govt;s job to regulate or teach your child about loans. </p>
<p>No wounder people like Suze Orman claim that her number one request is from teens on how to deal with helping their parents and the way they manage money.</p>
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<p>I am still waiting on data which shows that a college graduate on average does better than a unionized trade worker, the math just is not there. Sure those who decide to be secretaries may not make as much as a college grad, but when we look at the trades, the fact is there is a lot of demand and a very small supply of workers. Somehow all of you parents have instill in your children that doing a trade is somehow bad or somehow non respectable. I suggest you watch the FrontLine episode on Student debt, 95% of 2008 graduates either do not have jobs in what they were trained for and are either unemployed or working in jobs which require no college education, most could have had before college. </p>
<p>The problem I have with student loans is they have none of the consumer protections of other loans. Someone with a gambling problem can go bankrupt and get rid of their debt but someone who tried to go to school will be hounded for the rest of their lives even if they declare bankruptcy. I know you’re a libertarian, but how much sense is it that other loans have consumer protections and student loans do not? </p>
<p>My parents didn’t teach me anything, my mother died before it was time for me to go to college and my father was convinced that if I was eighteen I was supposed to know everything on my own. But, they taught me to avoid debt for as long as I could and not to take out loans for school. I had to resist the desire to go to a pricey private art school and instead am going to a community college then transferring to a state school with a good program in the art I am interested in. Fortunately my poverty status is going to benefit me for once and the government will cover my college fees.</p>
<p>A lot of the solutions to student debt seem to run under the assumption that students have a family to support them. If I didn’t have a boyfriend to help me pay living expenses I doubt I’d be able to go to school. It’s kind of hard to save money when you don’t have the option of living with your parents and your family contributes absolutely nothing. My family actually takes away from my income and what I can put towards college.</p>
<p>I have friends who tell me they can just take out loans to pay for school. I do not understand these people. I tried to tell them they were going to regret it but they just told me they’d pay it back after college. A lot of it is about having to go to the perfect school and have the “college experience”. None of my friends were willing to even consider considering community college before they went to a four year university. </p>
<p>I do agree it’s not the government’s job to teach fiscal responsibility, but I think the government should give student loans the consumer protections on all other loans. If students can declare bankruptcy and get rid of their student loans, the banks will think more carefully about who they hand loans out to when they actually lose money on liberal lending practices.</p>
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<p>I was watching a documentary on higher education all the parents were talking about was how they always taught their children that they HAD to go to college! It irritated me, too, and I’ve wanted to go to college my entire life. My mother never pushed her children one way or the other. She wanted me to go to college because I was a high achieving student and loved going to school and learning. But my other three siblings had absolutely no interest in going to college and she told them to learn a trade. </p>
<p>I wonder how much of it is wanting to brag about your child being in college rather studying plumbing. College is a status symbol for both parents and students.</p>
<p>Yes. There’s this little thing called the mortgage bubble that popped and it’s been in the news lately. A lot of adults were too stupid to understand the consequences of their decisions.</p>
<p>Same thing with the Internet Bubble a few years before that.</p>
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<p>I gave my son $25,000 to play with when he was 13 and taught him about technical
analysis, shorting and other trading techniques. But I have a fairly decent understanding
of what I’m doing and have done a fair amount of research on markets and I have access
to shared research and trading tips with other experienced investors. Most parents, probably the vast majority, don’t understand trading, investing or the mass corruption in the markets. If you can swim with the sharks, that’s great. But most people can’t. To expect people to explain what they don’t understand to their kids is silly.</p>
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<p>Perhaps you should research education law before making such a statement. I’d suggest start with Pierce vs. Society of Sisters. In the past, the banks did their job in regulating loans. They had metrics to determine whether one could get a loan or not. These went out the window with financial alchemy that turned risky loans into AAA-rated securities. People that make a ton of money and considered smart bought these securities. And the rubble in Wall St is a testament to what the best and brightest thought would reap them huge rewards. If they screwed up, what chance does the rest of us have?</p>
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<p>You actually admit listening to her?</p>
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<p>I would posit that the burden of proof is upon you to demonstrate that a unionized trade worker makes more than the average college graduate. It isn’t a matter of the math not being there; but the data. I will have to go through the thread to see who made the original claim though.</p>
<p>That said, if union membership is so beneficial, why is union membership declining?</p>
<p>WALLINGFORD - Despite the fact that, on average, union workers earn higher salaries and are more likely to have health benefits and a pension through their employers, membership in unions has declined steadily since the U.S. Department of Labor began keeping membership statistics, in 1983.</p>
<p>That year, one in five American workers, or 20.1 percent, belonged to a union; by 2008, that figure had dropped to 12.4 percent, for a unionized workforce of only 16.1 million.</p>
<p>Secretaries where I work have university degrees.</p>
<p>As far as the trade go, I think that demand varies widely from place to place.</p>
<p>I have neighbors and coworkers that hire latino and asian workers to work on their homes doing electrical, painting, carpentry and plumbing work at a small fraction of the price of union labor. I also have a friend that’s a general contractor and he is generally busy but he had to cut back his company from 12 to 8 employees recently due to the deteriorating economy.</p>
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<p>Tsk, tsk, tsk. ALL of you parents? If you make a forall proposition, then you bear
the burden of proof in showing that your proposition is true for every case. With
people, that usually requires proof by enumeration which is impossible with large
groups. You don’t have to when you the characteristic is innate but that is not the
case here.</p>
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<p>Perhaps you could post a link to the transcript. My browser doesn’t play Flash.</p>
<p>The National Compensation Survey: Occupational Wages in the United States, July 2002 has a lot of data including blue collar workers at high skill levels.</p>
<p>I dont have the energy to reply to both of you individually, but what I will say is that I understand the home loan bubble burst and I can say that the problem was rooted in govt based backing of the loans. No backing, no loans would have been given. You are correct eagle that many banks used to have strict requirements to get a home loan, though when the loans are back there is no reason to use those requirements. If I ask you to give a random person $20, you will likely say no. If I back your $20, you will likely say yes as you have nothing to loose. </p>
<p>I also think its foolish for the govt to be helping these people who took out bad loans. While I feel bad for them, I have a feeling personal responsibility is out the door and never coming back. </p>
<p>When I suggest parents teach their children finance, I am not talking about investing. I am talking about simple things like having a checking account, and debt based accounts. Most parents don’t teach their children even this, mine certainly didn’t. The reason why so many students are willing to go so deep into debt, is a lack of knowledge on the subject. </p>
<p>I took loans to go to school and don’t regret it. But I have had them on my shoulders since I took the first one. I understand them as good and bad. </p>
<p>You mention the rich on wall street, the fact is they got exactly what they wanted. None of the higher ups from wall street have been hurt by the so called economic troubles. They either got rich or got a spot in the white house with Obama. </p>
<p>As for the Suze Orman, yeah I watch the show and im not embarrassed about that. No reason not to, I find it interesting and love to learn from others mistakes.</p>
<p>Some of us know the evils of debt, but don’t have any other options. </p>
<p>For my husband and me, the ONLY way we can afford college for our two kids is through loans. We have saved only a total of $25,000 toward their college educations, despite nearly 20-years of trying to put money away. We eliminated family vacations, drive old cars with more than 100,000 miles on them, work our tails off, clip coupons, but still have little to no money left over after paying essential bills. </p>
<p>EFCs are a joke. We’re paying 50% more than our kids’ EFCs. We don’t qualify for Perkins or Pell. But we can’t pay cash, either! We’re stuck in the middle.</p>
<p>Our son is at a large state university, but school has never been easy for him. Not all students learn well in classes with 200+ students. Our dd chose a small LAC. Yes, it’s more expensive. But I think her chances of graduating from that school are much better than if she were in a huge, impersonal state school. Her largest class size is 26, much more in line with her learning needs. She has grants, scholarships, and work study in her major–so the total cost is not significantly more than our son’s total cost at a state university.</p>
<p>Both kids’ intended careers require a college degree (son is majoring in Marine Geology, dd is majoring in Athletic Training.) </p>
<p>For those preaching against the evils of debt, we already know. I track their loans on spreadsheets and the numbers haunt me. If you don’t have rich parents/grandparents and don’t win the lottery, what do you really see as viable options for working class families?</p>
<p>I grew up in a poor, single-parent minority family and took out a loan for $1,000 way back when college was less than a tenth of the cost of what it is today. I only went for a year and then went to work fulltime. I eventually went back later on to get my degrees and they were mostly paid for by my employers. This approach is a lot harder today for a variety of reasons.</p>
<p>Your question about what to do about the current situation is valid. What do you do given the current situation. If a lot of people use debt, then the service provider can raise their price. If an individual doesn’t use debt, then they don’t have access to the service. Nontraditional approaches can work (or alternatives like trades) but you need a way in or you need some guidance to see it through.</p>
<p>You sound like you are aware of the dangers and that your kids have chosen practical majors and you’ve made sacrifices to see them through. It’s hard to ask for more from parents.</p>
<p>Read up on collateralized debt obligations. These are private instruments that turn junk into AAA-rated securities through financial alchemy.</p>
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<p>You really don’t know anything about me. I might say yes and I might say no.</p>
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<p>I took Finance 101 many years ago and it seemed to me that we spent most of the course in learning how to value assets and instruments.</p>
<p>It sounds like you are referring to financial management.</p>
<p>There are topics on credit card and checking account management on college confidential on a regular basis so some parents do teach their kids about this but a lot of parents aren’t very good at financial management themselves so passing on their bad skills to their kids would result in a propagation of bad behavior.</p>
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<p>There are the few but in fact we’ve had $14 trillion in deflation and the rich have taken a big hit.</p>
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<p>I think that she’s a waste of time and perhaps dangerous. I would rather read material
from others that are successful in generating trading income actively instead of relying on a fund manager to generate returns for you.</p>
<p>The issue isn’t to avoid loans at all costs. Just that it is important to keep loans to a manageable level. My thoughts:</p>
<p>Cheapest route: Go to CC for a couple of years, transfer to a cheap college and live at home.</p>
<p>Cheaper route: Go to a cheap 4 year college from the start while living at home.</p>
<p>Alternate: find ways to get someone else to pay for your college–always a problem because whoever pays for your college will want something from you in return. Think ROTC, serving in the military first and using the GI Bill, working at a place that has tuition reimbursement. Some schools have great merit aid, but those kinds of scholarships that pay a substantial load are very competitive. Some schools have great aid for working class families, but again those schools can be very hard to get into. Getting an athletic scholarship requires having a skill that the colleges are willing to pay for.</p>
<p>It’s true that the price differences for different college options can vary tremendously. When my D was at CC, we paid under $1000/semester for tuition + under $500/semester for books. When she attended flagship U this summer, we paid about $1000 for her to take two 6-week terms of German plus > $100 for a book. She lived at home so that was the cheapest credits we got for her. Her CC courses were taught by instructors who taught THE SAME COURSES in flagship U except her CC courses tended to have only 10-30 students and a lot more personal attention. Flagship U courses are MUCH larger (except German which had about a dozen students).</p>
<p>D is now at a U where she works while going to school to help defray costs as much as she can & interned this summer in her field.</p>
<p>S got about 32 credits by taking lots of AP courses when he was in HS. He could have graduated in 3 years with his AP credits but has chosen a major that has extensive course requirements & will be taking the full 4 years. He got significant merit aid that has helped defray his cost of attendance tremendously. He also has summer jobs in his field & works at school. His field is EE & we believe he will have many options this spring as he graduates.</p>
<p>There are always options–it’s just a matter of how palatable/unpalatable they are to the family & individual involved. My D found it tough to find a social niche in CC (she didn’t ID with most of the students there). She attended as a stepping stone to where she wanted to go, without causing anyone to incur unnecessary expense so we could better afford a U that she transferred to.</p>
<p>Neither we nor our kids want anyone saddled with crushing debt which will limit choices.</p>
<p>One difference that I see with regard to the choice between CC and State U is the availability of research jobs (research assistants and research internships). These are often on campus and can be in the student’s area of interest. Another difference that I see is the level of connections in the departments which can be useful for finding jobs, internships and scholarships.</p>
<p>Just wondering if you all agree: Can the 2nd 3rd tier schools can sustain annual tuitions in the $50,000 range in this economy? Maybe what I should have aske dis can the students sustain the debt necessary to keep these tuitions increasing?</p>
<p>The US debt machine has amazed me since the late 1990s. I’ve thought that the consumerism was unsustainable for so long and it kept on growing. Yes, we’ve had a major setback to consumerism but I somehow think that we could get it going again without too much effort.</p>
<p>I’ve been looking at cars with a friend and I had in my mind that a Toyota Corolla costs about $12,000. Well maybe back in 2000 or the 1990s but they cost a lot more today. Budget cars are pretty expensive now and family and luxury cars have moved up a lot. But lots of people still buy them. I really don’t know how they do it but the do do it. Perhaps this continues with expensive universities too.</p>
<p>why cant consumers simply make educated decisions on what they are willing to pay. College is not to expensive, it is at the highest price people are willing to pay for it. If people no longer are willing to pay such high prices, those colleges will simply go out of business or lower cost. Its quite simple.</p>
<p>College is a complex product and it’s a different product for every person. It’s also a product that changes while you consume it. Finance is about valuation. It’s a complex area the people get degrees and advanced degrees in. Do you think that it is simple? Here’s a question for you: what do you think a share of AAPL is worth? What will it be worth in four years?</p>
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<p>Expensive is a relative term that’s compared against ability to pay.</p>
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<p>Or change their model.</p>
<p>The problem is that we live in a macro-world; not a micro-world. The behavior of a small group may result in no change in the larger group with which prices are set.</p>
<p>Yes, once the student has a better idea of what s/he is majoring in & has taken a lot of the basic courses that are available at CCs & public in-state Us, there is something to be said for going where the student can get hired in his/her field. Not too many freshmen have that degree of marketabililty, no matter what school they attend.</p>
<p>I don’t feel my D was terribly handicapped by attending CC for 3 semesters while she was figuring out her major & getting required courses satisfied in small classes–she doesn’t either & it saved us all a lot of $$ that could easily have required significant loans.</p>
<p>Our family works hard to live below our income and it allows us to sleep at night. I know many others who are comfortable with significant debt but hubby & I just aren’t and we don’t want our kids saddled with crushing debt either.</p>
<p>I’m not intending to sound snarky or naive, but are there very many 2nd or 3rd tier schools that cost $50,000 plus? I thought most schools in that cost range were in Tier 1, and that the lower ranked privates tended to be more in the high $30K range.</p>
<p>I just had a look at the prices for a third-tier (maybe fourth) and it came to about $34,000 for everything. I had a look at another and it was $37,000 for everything. I found another third-tier for 42,000. Another third-tier is $25,890 for everything. I had a look at a Massachusetts third-tier and it runs $40,000.</p>
<p>I didn’t look at any big city schools. They might be more expensive because of higher costs.</p>
<p>Regarding the Frontline statistic that 95% of 2008 college graduates are not working in the field of their major: could you quantify that statistic and describe the methodology used? I wasn’t able to find a reference to that statistic.</p>