Free Ebook.

Enter your email address:

Delivered by FeedBurner

« How Not to Act Old in an Interview | Main | Is Now the Time to Sell Unwanted Gold Items? »

March 08, 2010


Feed You can follow this conversation by subscribing to the comment feed for this post.

The one problem I see with FMF's logic is that he is assuming that people know beforehand what they want to do with their life before selecting a college. If they don't, his cost/benefit analysis breaks down. You can't compute benefits when you have no idea what they are.

The one thing that people do know is that if they go to a school with a nationally recognized name that it will look way better than some community college, obscure school or even State U. They also know that their diploma is forever.

Maybe from that point of view it makes sense to go to the best (and usually most expensive) school that you can and then figure out how to deal with the debt later.

If you aren't going to school on Daddy's nickel and you're funding it yourself, it makes a big difference what you pay. Most 18 year olds don't think in those terms, and don't consider the consequences until they get out in the working world and realize their income doesn't justify the size of their loans.

Great post and link.

One girl has $295,000 of debt. WOW, I hope she has her doctorate...

Based on the increasing number of stories like this, I'm guessing that the number of Community College students will continue to grow. The cost of a college education has been spiraling out of control for sometime in my opinion. I'm planning on posting a story on it soon.

"Why is it that all financial sanity seems to go out the window"

What financial sanity? I had no idea that my debt would be so large or that I would make so little when I graduated. I had absolutely no realistic expectations of anything.

vga --

Nope. You need to read my post on the value of an elite degree:

Kyle --

Not knowing how big your debt is/borrowing sums you are unaware of reflects a lack of financial sanity IMO. And borrowing any amount with no idea of whether or not it will pay off is as well. That's the financial sanity going out the window I was talking about.

Look further and in most cases (maybe not the ones you list but in the bigger picture) you will find a large number of these types of students totally SQUANDERED their college time.

They majored in subjects that gave no hope of preparing them for the work world, had no desire to go on to grad school for many subjects that defacto require at least a Masters degree, and probably spent more time at parties than in study hall.

The fault lays not in our stars but...

vga - GET REAL! BTW: I went to a small state university, took NO loans (in state in = cheap and part-time work during school and full-time in the summer paid for a lot of it) and graduated cum laude at age 22 with a double major and a positive net worth (2 very used but, paid for cars and almost $2K in the bank, no debts!). That degree/school WAS "good enough" to get my commission in the Air Force and gave me the smarts to earn as much as $500K~ a year later in life,... community colleges, state u, etc., ARE THE way to go to college (along w/ GI bill too!)

Jeff - Sounds like you went ROTC. If that's the case Uncle Sam paid for a good part of your eduction so naturally you had low school debt.

vga is much more right than he/she is being given credit. Too many people think school name along will propel them into the upper eschelones success and money. Perhaps at one time it would have. But those days are gone for at least 20 years. Then again, what big name school is actually going to admit that to perspective students?! Buyer beware.

The other part vga is right about is too many people expect college to help them find themselves. It won't. The cold truth is that there are MANY people in their 30's, 40's and even 50's (or older) that *still* haven't found themselves. But they do have to keep a roof over their heads and food on the table. At 18 or 19 or whenever you go to college you may not know what your passion in work life is (and even if you do it will likely change over time anyway) but you do need to realize that you have no one to blame but yourself if you graduate in 4-5 years with a do-nothing degree, crushing debt, and no more a clue than when you started.

Then again, coddling and consoling is the new norm of American society instead of hard work and individual initiative.

Heaven help us all.

In my opinion, this continues to prove the point that it all starts with the parents. The phrase, "We only want what is best for you" sometimes clouds judgment and puts kids/families in the position to choose Vanderbilt @ $40,000/year vs. state school at a fraction of the cost -- when the end result is the intention is to "give back" as a social worker.

Parents have to teach kids about money early on & set a strong example with money practices in the home. If they do not, then we will continue to read about these "sad stories" of kids who got in over their heads...

NOPE, JEFF went to OTS NOT ROTC, didn't even enlist until age 25 when I was 3 years into a mgt career w/ a Fortune 500 co...

Generally if someone is 18 and going to school they are young and honestly not really old enough to know better. THey are told that college is the only way to go and that the expensive private school is best for them.

One of the examples in that article is a guy who went back to school at age 50 to go into teaching and ended up with $115k in debt. How does that happen??

THe woman with $295k is a doctor so thats a lot more understandable and manageable.

One buy has $160k and he went to ITT Tech. I feel bad for him.

I am really shocked by reading article, i would blame there parent took debts of such a large amount, as I know, for bachelors student it cost only $30000/year and master 50000/year. They have spent a lot of money.

I'm actually quite surprised how little college debt people have. I read stats like the average 4 year in-state college costs $80K, that most people have little to no savings, and somehow the average debt at graduation is "only" around $20K.

There are obviously a lot of people that should never have borrowed so much. But I'm shocked at how many people I know say their $40K in student debt has ruined them. If you have to consolidate to the 30 year payment plan, $40K works out to $3K/year in payments. They always seem to be making much more than the $3K/year more than they would have made without a college degree, so I don't really get the complaint, unless they're just saying they should have spent smarter or gone for a more lucrative degree. Similarly, I realize $295K is a ton of debt, but that works out to $24K/year in payments over 30 years. I'd assume becoming a doctor would have increased your income more than this. Sure I'd rather not have this massive debt, would have tried to keep it as low as possible and pay it off quickly, but in the end isn't it "worth it" financially.

One thing I would encourage people to look for in a college is a co-op program. There are many more schools now that offer one than there used to be. My school even offered (actually required) it for the business management students. I think sometimes people think that co-op and intern are the same. They are WAY different. Co-op jobs pay good money and get you semester after semester of quality work experience. Mine paid $15 an hour and that was almost 10 years ago. I had friends making $20 with all living and relocation expenses paid for. That is good money to use towards college and valuable experience with an almost guaranteed foot in the door at graduation.

The one thing that people do know is that if they go to a school with a nationally recognized name that it will look way better than some community college, obscure school or even State U. They also know that their diploma is forever.

Probably off-topic but...Funny how noone here has mentioned that the college name or credentials have a lot less to do with success than people think. Many times it's who you know or being in the right place at the right time (and, of course, being prepared helps!); it's also important to be willing to take risks.

All of you nout there looking to matriculate:

Go to state U, apply for grants, scholarships, and get a part-time job. Apply to be an "RA" - Resident's Assistant" for a free or discounted dorm housing. Whatever gap is left, try for the cheapest Federal loan possible (and claim later on your taxes); I can definitely see how it can be done without incurring massive debt. Also, if you are already employed and looking to further your degree/credentials, see if your employer will help to cover expenses.

I only wish I had the access to fin. knowledge that this generation has...

If you think about the cost of college, and what you get in return, it always amazes me that the college boards can charge as much as they do.

If anyone hasn't noticed, technology has drastically reduced the cost of information. Things that you use to have a professional do, is now available on the internet via a seach engine of some sort. Heck, there are entire books in electronic format or audio book format for free!

And yet the price of college keeps marching up as if there is no stopping it. It's as if that degree from college is magic and will make your wildest dreams come true, not matter what it's in. Amazing...

Basically, we are paying more for the prestige and college experience than what they are teaching (except for perhaps, the legal and medical fields).

Actually people need to be alert for this more now than ever. I went to college in 1990, my 4 year tuition plus room / board at Johns Hopkins was about $90k. My parents paid for it, God bless 'em. At the time I didn't fathom how long it would take to pay it back as it was covered. I just knew it was a huge amount.

For Grad school, I got a full scholarship and worked part time. Now I make enough to pay for my 4 year education in 1 year but at the time of starting work- it would have taken 6-7 years of savings. Pretty ugly.

Now education is becoming even more of a scam and the programs to make school 'affordable' are actually creating subsidies that increase cost. Young people nowadays need to be much more aware.

I really feel for them.


Interesting. One person's story there is actually understandable - it's a doctor whose loan was mistakenly characterized as "graduate" when it was "medical", and the lender failed to fix it for years in spite of specific complaints. Seems like he needs a lawyer.

But the rest of them are people who really should have thought in advance. Even when I was in college I couldn't understand people who majored in fields that weren't likely to lead to a job. Sure, there are legitimate cases when one wants to major in English - like a daughter of a friend of mine who is an extremely talented writer -- I firmly believe that if you really have a god-given talent you owe it to yourself to try it even if it carries risks. I also knew a woman who majored in music as she put it, this is the only thing I know how to do well, and who had a very clear idea of what she wanted to be (vocal coach/opera accompanist) and who now works at the Met. Neither of them had student loans though: the writer was lucky enough to have parents' help and also got into a program that paid for her room/board in exchange for evaluating student essays, the musician went to state university that nevertheless was the best for what she wanted to do. But majoring in English because you "want to learn how to write" or majoring in other fields without any clear idea about your own abilities, the reality and prospects and with no plan, shouldn't know better.

I also don't understand not knowing what you want to be at 18. I knew what I wanted to be but couldn't because of luck of talent at 15 (at 10 I still had illusions), I also knew what I was good at. I also had another thing I liked to major in that wasn't likely to get a job, so I kept it as minor. And I wasn't even particularly mature...

Why not have these discussions in high school? Everyone has subjects one is better at or worse at in high school, subject one likes or hates, hobbies, interests. Why not have representatives of different professions coming to high school and talking about what they do at work. When I was in 8th grade in Russia, some of the parents came to school and talked about jobs. It doesn't seem like it's such a bad idea... Why not have these discussions with your kids at least and also talk to other parents and have each parent come to school and talk about their jobs? In many countries in Europe, kids apply not to 'college' in general, but to specific major and the entrance requirements are different for each major as is the competition.

I was great at every subject in school (but didn't really enjoy any of them) and enjoy talking. This has led me to get a job I can stand, hang out with friends and family, and start a blog. I still don't know what I want to be when I grow up and I'm in my late 20's...

To the post, not everyone loses their financial sanity when it comes to college (obviously). The kids I know that ended up in deep debt and feeling lost had no financial upbringing at all...they partied away at college or simply blew off the stuff they didn't like since they were told to follow their dreams. They would have been better served by being taught about compound interest and how to balance a check book. The blame should be shared by the parents and the high school kid that had no personal motivation to find out about their future.

Today's GI bill is exceptional, enlist, mature, learn a way of work, then attend college w/o teh financial hassles and maturity. You probably could do a bach degree in 3/12 vice today's kids takin' 5 years. I 4 years in late 70's early 80's I did a double major cum laude at state U,worked pt and graduated w/ NO loans or isn't THAT hard!

MasterPo agrees with Kitty.

Although knowing exactly what you want to do with the rest of your life at 18 may be a bit too much of a stretch, NTL by 18 you have to have *some* idea. And in any event you aren't going to find your passion working in Wendy's until inspiration strikes.

While you're waiting to find your life's work goal time is ticking away. And you still have to pay your way through life.

Or is that too now an out dated concept? MasterPo can't keep up.

College overall is a big expensive scam. I dropped out after the 10th grade and have no debt and a fair amount to the plus side of the equation. There is nothing wrong with learning, but you don't need to sit in a classroom and pay hundreds of thousands in order to learn. Sure, some professions (doctors, etc) require a college education. However, I learned a lot more with a library card than a lot of college grads I've had work for me learned sitting in a classroom.

Having said all that, my kids are going to college. They will go with an understanding of math and interest. If they foolishly choose to go in debt they will do so knowing the risk.

chynalemay: I did the same thing, worked out great! Would recommend that path to any young person unsure of a future. It will help sort them out, that's for sure!

When entering college, evreyone makes a big deal about how much you can earn if you have a college degree. As a college student, it is easy to be fooled into thinking that the well paying job will be easy to get, irregardless of the degree you get. Two years after getting the B.A., when you no longer qualify for most grants, you discover that the degree you took didn't get you the job you expected and that you have to go back to retool, that is when the loans start multiplying. Guidance counselors and college recruiters would do well by making sure potential students know about alternatives to attending college right away so that when they do attend college, they have a more realistic view of what they want from their education. I wish I had been encouraged in my desire to take some time off before committing to a four year degree.

It's unbelievably crazy the high cost of going to college these days, not everyone can afford it and there's no guarantee to have a better job after graduation makes it more frustrating.

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.