Student Debt Story

308 thoughts on Student Debt Story

1. I was curious until she got to the Duke part.

   Seriously? Go cry in some milk. If she was smart enough to get into Duke, then she was smart enough to figure out a loan agreement. I don’t get what the tragedy is here. She freely chose a university that, even 10 years ago, was about $40,000/year. …and was able to pay for that b/c of her parents, I guess. Nice gig if you can get it.

   I don’t have much sympathy for people who look at a price tag they can’t afford and still make the purchase. That’s kinda why we’re in the jam we’re in. It’s not some one-sided, game of Gotcha! If people weren’t willing to buy what they can’t afford, lenders wouldn’t be able to pull this shit.

   And, really? Who spends $160,000 on a journalism degree? That isn’t even higher math!

2. Do University tuitions in the U.S. vary widely from school to school? Up here I was under the impression that there was a difference between technical colleges and academic universities (unis being about 2x the tuition of technical colleges) but that there wasn’t much variance from school to school. You’d pay about as much to go to the University of Toronto as you would to go to Nippising.

3. Duke is a private institution. In-state tuition (going to school in the state in which you legally reside) and associated fees are a fraction of the cost — say 10-12K or possibly less. State tuition varies from state to state.

4. I can’t recommend enough that people make use of their local Junior and Community colleges. Before I transferred to a major university, I completed almost all of my lower division credits at a community college. I started in about 2005, and my tuition was between 2000 and 2500 per semester, which I was often able to pay off at no interest through their installment plan.

   While the facilities aren’t often as nice, many of the faculty at the CC I went to were talented and passionate about teaching. When I got to the nearby, fancy, land grant Big Ten major university I didn’t feel at all unprepared for upper division coursework. I just got my first debt invoice in the mail the other day, and while it’s still substantial, it’s about half of what it would have been had I gone to the major school straight up.

   Obviously, it’s not a silver bullet solution for everyone. But I think it’s a frequently overlooked resource for those seeking a four year degree but who are in a less than ideal financial situation. Or those who want to manage their future debt.

5. @Andie,

   Yes. State schools can be very cheap, particularly if you are a resident of that state. M’s B.A. at a state school was in total less than 8k whereas my tuition for a private school down the street (which was waived via scholarship) was about 80k. And that’s not a typo. 10 times as much. Some state schools are also fairly expensive even for in-state residents. Not to mention that the quality of employment opportunities vary dramatically. M’s undergrad degree is fairly worthless as is my own despite its price tag. But someone who went to UVA would have better prospects.

6. Q Grrl,

   Get over yourself.

   Bad debt happens to good people. It’s not always as simple as wanting something you can’t afford, especially if what you want is to go to a private university. A good education shouldn’t be a luxury.

7. Horrifying and disgusting. I can’t imagine what it must be like to be young and have that kind of burden.

   There’s so much blame to go around. The schools, for jacking up tuition by many times the rate of inflation. The banks, for their tireless lobbying to rig the rules in their favor. (How the fuck is a government-guaranteed loan not dischargeable by bankruptcy?) And, of course, the government for going along.

8. You know, sometimes in life our expectations don’t meet up with the realities of life. That is particularly true when you’re young. In some ways I took the opposite approach and gave up on the things I was passionate about in order to meet those loan obligations and then there was this thing called a recession that left me without income for a good long while. Shit happens. You make do. But you should never be forced to sacrifice your health or your child’s wellbeing to pay off Citibank.

9. Lies that our Teachers tell us: You can be anything you want to be!

   It’s depressing but there are some jobs that do not make up the cost of your degree. Society tells us we can be anything we want, but when it comes down to it, it’s a lie. Schools should be educate students much more about this, but they do not.

10. Athenia:
    Society tells us we can be anything we want, but when it comes down to it, it’s a lie. Schools should be educate students much more about this, but they do not.

    Heh, when I was looking into switching from Sociology to Psychology, the career counsellor had a list of all the careers you can get into with a Soc degree. What it DIDN’T tell you was that most of them required other years of training and certification as well.

11. State schools are not the panacea they are made out to be. I went exclusively to public state schools, got significant scholarships, and my total student loan debt is on the order of $200,000. The only reason I can afford to eat, even with substantial income, is because of income-based repayment.

    Also, we are not “in the jam we are in” because of people living beyond their means. We are in the jam we are in because of a vicious cycle caused by a credit crunch in 2008. Lots of businesses cut employees, which led to people cutting their spending, which led more businesses to cut their employees, on and on and on. The idea that our dire economy is our “punishment” for taking out too much debt is helping to fuel the continuing immiseration of both the U.S. and Europe.

12. Duke is a privilege, not a necessity. And Duke is very, very, very much a luxury. They bill themselves as such. It’s a self-contained entity within Durham where students have just about everything they need without having to leave campus. The facilities are flawless and beautiful.

    When you pay $40,000 at Duke, you aren’t paying for your tuition, you’re paying for wood paneling in the dining hall. Nice, old, wood paneling. And the Chapel! Paying for that too. And the gardens! Don’t even get me started. Beautiful, all of it. Really. (and the MacDonald’s and the Chick-fil-A in the student union — paying for that too!)

    But let’s not kid ourselves that $40,000/year is paying for “education”.

    Now, if that’s what you want, go for it sister. Just don’t expect a lot of sympathy when you have less than $40,000 in debt afterward. It makes you look, well, privileged! LOL.

    And really? Again. If you want a quality education (which can happen anywhere, believe it or not!), then understand what you are buying. Especially if you want people to feel sympathetic to your cause.

13. Q Grrl,
    Her debt balance was $37,099, and after paying $23,500, she has only made a dent of $2,000. I think the general problem here isn’t that she is an entitled girl who went for more than she deserves (seriously?), but that the entire system is indisputably broken. Our nation should be founded on the concept of equal opportunity, and clearly that is not the case anymore. Duke is a great school, as everyone knows, and don’t forget that these banks sucker you in when you still don’t know a damn thing about the world, when you’re just beyond 18. She has done everything she can and been incredibly responsible in trying to get beyond this (paying more on her loan than the minimum, sacrificing health [actually not saying that’s responsible, but indicative of understandable desperation]), and she still is nowhere near free.

    Your comment is victim-blaming, when in reality the fact that hundreds of thousands of students being in the same situation clearly shows that the system is rigged this way. This is a business to prey on young naive kids in college, and it’s working perfectly.
    Something needs to change.

14. You know, sometimes in life our expectations don’t meet up with the realities of life. That is particularly true when you’re young.

    THIS

    Shit happens. You make do. But you should never be forced to sacrifice your health or your child’s wellbeing to pay off Citibank.

    and THIS

    The issue is not that she made a bad decision and is having to pay for it. The issue is that the bank made an equally bad decision – worse! even, bc if you expect an 18 year old to know this isn’t a good idea, you really expect a financial institution to know this isn’t a good idea – but she is shouldering the bulk (all?) of the fallout from it.

    Much the same thing happened to me with my credit card loans. (Although my current situation is not as dire, thank goodness.) My complaint is not that I am perfect and therefore don’t deserve this (wtf?), it’s that credit cards used to be smarter about who they they gave lots of money to, because they used to have more to lose themselves if I defaulted on the loan. Now, with the way financing higher education works, with the way – as the op pointed out – even renting works, etc., consumers carry an unequal burden of the risk, despite having less power to negotiate better terms and – in many cases – being quite young and inexperienced.

15. Q Grrl,

    My brother transferred from a private school after his freshman year to our top state university because he realized that the debt load would be enormous. Pretty responsible decision for an 18 year old, right? Well that state school costs $28,000 – 33,000, according to the webpage (including books, room, and board). That’s only 10k less/year than my private school cost when I started college just 8 years ago. That same public school costs MORE than my private school cost, including books, room, and board, if you’re out of state.

    I’m a graduate student at a major public university. We had (I think still do, though I don’t pay tuition, so not sure) one of the lowest in-state tuition rates. Then our budget was slashed by 50% over 2 years. No exaggeration. The state legislature is currently considering even deeper cuts, about 17%, for the coming year. Where does the money come from? Cutting jobs that can pay for work-study. Increased tuition and fees. Good times.

16. What’s up with those figures? If she really managed to pay ~22K since 2006 and still ended up breaking even on a ~37K loan (more or less), she has had an effective yearly interest rate of over 10% on average. That sounds like a ridiculously bad loan.

    Is the student loan situation in the US really that bad?

17. Man, and I thought it was bad for us in Canada! This is horrifying. There’s still a lot of problems here with people sinking money into a BA with no job prospects (because we were all told in high school that the *smart* people went to university, and only those who couldn’t hack it there went to college – meanwhile most of my financially-successful friends started off in the local technical college and the others went there later after their first university degree proved useless in the job market), but at least the loan options can be much more forgiving and the tuition just doesn’t get as high as it can in the US for private institutions. I paid about $5000 a year for a good program at a prestigious university in Ontario and Ontario government student loans are basically the most forgiving, kindest loans you can have, if you’re going to be in debt to someone (interest-free while enrolled and both interest and debt relief options for financial hardship – some of my friends have saved many thousands of dollars in interest because of this). Still crappy job prospects for a BA without any direct applied background and we’ve all been lied to about the “right” kind of undergraduate degree to get, but it’s still not as bad as all this.

18. Victim of what? Her own decision to sign the loan papers?

    For fuck’s sake.

    She wasn’t young and naive. She came from a family that, up until her junior year was financially solvent enough to pay $120,000 over the course of three years for her to attend Duke. You cannot tell me that they didn’t know what they were signing.

    Yeah, the situation sucks. Giant ball of suckage. But guess what? She chose it. All of it.

19. A good education shouldn’t be a luxury, but unfortunately the way the current higher education system operates a degree from a highly-rated private university is. Those elite private universities are all competing against one another and maintaining their status by offering a package of services that is very expensive to provide. I don’t think it’s unfair for people to point out that you can still get a good education at a much better price point, even if you have to sacrifice on the prestige of the institution. 10 years ago when undergraduate tuition at Duke was $40K it was $2K in-state and $10K out of state just down the street at UNC.

    That said, I have tremendous sympathy for people who find themselves in this position. Kids are pushed so hard to achieve and told that an education is the key to a prosperous future (which isn’t incorrect), that until recently there hasn’t really been any focus on how leveraging your future to obtain that education could not pan out.

    Still, there’s not a whole lot that we can do for these people. The default rate on student loans in the first two years of repayment is almost 7%. One commentator noted that “[o]nce they’ve consumed the education, a large number of students seem to decide that it wasn’t worth it, and that therefore someone other than them should have to eat the cost.” And if we do make student loans dischargeable in bankruptcy at a time in their lives when most people wouldn’t have significant assets or impediments to seeking a BK then the financing for students will be either at impossibly high rates or completely unavailable.

    I think maybe the best thing we could do for someone like the author is to find a way to allow her to refinance her outstanding loans at current interest rates (much like you can refinance a house). Based on the numbers she provided I suspect she’s locked into quite a high rate. When I came out of my last degree program with ~$150K of debt, roughly 1/2 was federal at a fixed 8% and 1/2 was private at a floating rate. I paid down the federal portion as quickly as possible since it was so expensive, but my floating rate private loan is currently riding at 2.5% and I intend to keep it outstanding for as long as possible. To make this workable you’d still have to refinance into a non-dischargeable loan, because I think no lender would be willing to extend credit on an intangible asset (the degree) in which they can’t get a security interest (unlike a house).

20. Can someone explain the math here more clearly? Or Sallie Mae’s payment plan?

    Her statement lists $37K in initial debt, $35,908 of current balance and $8,786 of capitalized interest. Add in another $150 of accrued interest…and she’s paid $23,500?

    She’s reduced the principal by $2K and sent another $9K to interest. Where is the remaining $11K? Fees?

21. matlun: Is the student loan situation in the US really that bad?

    Yes. Especially if you get put on a payment plan because of low income, which it sounds like is what happened in Natalia’s case.

22. While I wouldn’t phrase things as starkly as Q Grrl, I do think that Natalia bears some fault for her choices. A good education shouldn’t be a luxury, but that doesn’t mean that there is no such thing as luxury education. There are plenty of state schools that offer education on par with what is offered at Duke, for significantly lower prices. Deciding to spend more money to get a similar level of education from a name-brand private school was probably the wrong choice in this situation.

    Unfortunately, the student loan system removes a lot of the immediate costs and incentives that would steer students away from making choices that put them in these situations. When more students who required financial aid were getting by on things like grants, that had hard limits on the amount of money they received, they were faced with making choices about what they could afford with the amount of money they were provided. With loans, though, they can be offered significantly more money (with no need to pay it back until graduation) and end up getting themselves into a situation like this one.

    Also, there’s the fact that more students using more money from student loans to pay for their education leads to higher prices for a degree, as the demand (and ability to pay for) an education outpaces the supply. Thus, the vicious cycle continues.

23. @matlun

    I believe government backed student loans have interest rates between 6.8% and 8.5% (at least those are the rates for my various student loans). Interest was probably accruing on her loans while she was in school and before the repayment period began.

24. @ Q Grrl :

    Disclaimer – I’m an already-in-too-much-debt-college student-who-should-have-gone-to-a-more-affordable-school, so this may be incoherent, especially since it’s finals funtimes atm.

    a) a good education shouldn’t be the luxury of the rich – saying you should have gone to a state school instead of a 60k per year school may make sense as a piece of advice to a specific individual, but it doesn’t really solve the issue that most of this country’s best universities are incredibly overpriced and inaccessible to most.

    b) I think you may be underestimating the rhetoric and context surrounding signing said loan agreement. Here you are, a high school senior who got into a pretty, shiny, prestigious university – except that you can’t go without loans. The dominant advice (from parents to college counselor) is : go ! it’s worth it ! shiny degree is worth it and will make you able to pay off these loans in no time ! We all had student loans, it’s totally normal and expected !
    Making this about me for a sec – in my case, I even wrote to my counselor asking her to help me write an appeals letter to get more grant money/less loans – and got the following answer :
    “[loans are] part of the experience of going to a college in a country where education is expensive, but access is the key”.

    Loans = obligatory growing up experience ! everyone goes through it! it’s fun!

    Also, lol @ accessibility is the key – except it then defines what you do with your life afterwards.

    When that’s the dominant advice surrounding you, it’s really not very hard to sign on the dotted line and go to a university one “can’t afford”. Or maybe I’m just projecting.

25. Q Grrl,

    So are you saying because she wanted to stay in a great school (which, by the way, tells us that she’ll have an easier time finding a high paying job), she deserved to sacrifice her health and the potential well-being of her child? Are you saying that you feel absolutely no sympathy for her and that the entire system is just fine because well damn if that’s the only option she had when she was that far into the degree she should have thrown it all out the window for for just 2 more semesters? Are you saying that she should have been so terrified of this idea of debt that she should have sacrificed a degree from world-renowned institution with only 1 more year of study, when actually a high percentage of people in these schools have debt as well, and it would seem like a very normal thing to do to get a loan?

    Are you saying that because you yourself would be so much more highly intelligent and savvy at that age you would have seen all this coming, and that because she didn’t, she deserves to suffer as an indentured cash cow for the rest of her life?

    Seriously, what the hell are you saying? Are you saying you have no sympathy for students with a lot of debt because they signed the papers, and thus do you believe that this entire system makes perfect sense and Sallie Mae is entitled to keep doing business as they see fit?

    Clearly the only person you side on in this debate is the side of the lenders, and it really seems like you think that there was no victimization in this system, and thus that the system is working soundly and fine.

26. One more thing: she really needs to get away from Sallie Mae. Based on the numbers she described in her piece (as you can see from the math in these comments), they are really screwing her with fees (and probably a really shitty interest rate as well). She (and others in her situation) could go through direct government loan consolidation (https://www.myedaccount.com) and get a lot of that cut down.

27. Gaiz! Q Grrl has totally got me figured out! I went to school for the wood paneling!

    What can I say, I am just that uppity. As were my parents, of course. What were they thinking? Coming over from Ukraine and wanting their kid to have a good education (in-state!) and then having the temerity of losing their business and seeing the entire thing snowball.

    On a more serious note, I have had a good career, coming out of Duke. And I think that if I had access to better preventative care when I was younger, I would still be a good little cash cow for them. It was health problems that got me, in the end. I think health care is a big part of this puzzle. A lot of the people I’ve spoken to since “coming out” about my debt problems – which include my other, government loans, btw – got screwed over when they became ill. When your body doesn’t want to function anymore, you don’t earn as much money, or don’t earn any money at all. And then you’re really trapped.

    Someone posted today on my blog about losing his brother to suicide. From what I can gather, he got sick after going back to school to get his master’s, and his finances took a hit he could never recover from. It’s a pattern for a lot of people.

28. Shoshie – yes!

    I don’t know what it’s like now, but I do that one of the factors that went into my choosing the private school I went to was that the projected costs of it and the state school that was at the top of my list were the same, once the financial aid (including grants/scholarships)was factored in.

29. Lance: Deciding to spend more money to get a similar level of education from a name-brand private school was probably the wrong choice in this situation.

    Okay, not USian here, so I could be wrong, but it sounds to me like A) re: American Dream, part of the ideological culture of the country is that people are encouraged to strive for things which are beyond their reasonable grasp and that failure to try do this is considered a moral and personal failing, and B) the level of education is *not* equivalent in the sense that the same degrees from institutions of differing prestige (and price tag) are associated with far different job prospects.

    It’s appalling to me that there could ever be a payment plan set-up in which debt repayment is actually impossible on that scheme, which is what people are describing here – if interest is accruing faster than it can be paid down, then the system is fundamentally exploitative and I think it should actually be illegal to approve such a loan. Also, if such loans are required in order for a majority of people to access a meaningful level of education with reasonably equivalent job prospects (because getting a job is what higher education is actually about, these days), then the entire education system (not to mention moral compass) of a country is clearly screwed up, especially if people from all income brackets are simultaneously being pressured to go to the best school that will take them, financials be damned. That’s just sadistic and irredeemably classist.

30. She wasn’t an 18-year-old high school student. She was a junior at Duke.

    Not naive. Not stupid.

    Hell, she probably even could have received financial counseling from… wait for it… Duke!

    Holy shit. The options are really quite abundant.

    [I understand the operations of predatory lending. Trust, I do. I also understand when privileged people find themselves reduced in means and stature and then want to blame someone ELSE for their own damn decisions]

    Are you all seriously trying to tell me that she never thought “what is my contingency plan, if I sign this loan, and I don’t get a job after college?”

    If that never crossed her mind? Privilege. She’s soaking in it.

31. Q Grrl: Victim of what? Her own decision to sign the loan papers?

    For fuck’s sake.

    She wasn’t young and naive. She came from a family that, up until her junior year was financially solvent enough to pay $120,000 over the course of three years for her to attend Duke. You cannot tell me that they didn’t know what they were signing.

    Yeah, the situation sucks. Giant ball of suckage. But guess what? She chose it. All of it.

      

    Actually, pumpkin, I had financial aid + government loans.

    Try harder.

32. DP:
    Cansomeoneexplainthemathheremoreclearly?OrSallieMae’spaymentplan?

    Herstatementlists$37Kininitialdebt,$35,908ofcurrentbalanceand$8,786ofcapitalizedinterest.Addinanother$150ofaccruedinterest…andshe’spaid$23,500?

    She’sreducedtheprincipalby$2Kandsentanother$9Ktointerest.Whereistheremaining$11K?Fees?

    I think the math works (very roughly) like this, but it wasn’t entirely clear.

    She took out $37K for the degree, then deferred payments during which time $9K of interest accrued and was capitalized. She starts making payments on her now roughly $46K of debt at let’s say 10%. If she pays $5K per year then five years later she’ll have paid $25K split roughly $23K to interest and $2K to principal. That’s how her balance is still so high.

33. And? Ok whatever, let’s say for the benefit of your argument that she’s “soaking in privilege” (which personally I disagree with, but whatever.)

    And? What are you saying? Are you saying that the system is or isn’t broken?

34. Jadey: Okay,notUSianhere,soIcouldbewrong,butitsoundstomelikeA)re:AmericanDream,partoftheideologicalcultureofthecountryisthatpeopleareencouragedtostriveforthingswhicharebeyondtheirreasonablegraspandthatfailuretotrydothisisconsideredamoralandpersonalfailing,andB)thelevelofeducationis*not*equivalentinthesensethatthesamedegreesfrominstitutionsofdifferingprestige(andpricetag)areassociatedwithfardifferentjobprospects.

    It’sappallingtomethattherecouldeverbeapaymentplanset-upinwhichdebtrepaymentisactuallyimpossibleonthatscheme,whichiswhatpeoplearedescribinghere–ifinterestisaccruingfasterthanitcanbepaiddown,thenthesystemisfundamentallyexploitativeandIthinkitshouldactuallybeillegaltoapprovesuchaloan.Also,ifsuchloansarerequiredinorderforamajorityofpeopletoaccessameaningfullevelofeducationwithreasonablyequivalentjobprospects(becausegettingajobiswhathighereducationisactuallyabout,thesedays),thentheentireeducationsystem(nottomentionmoralcompass)ofacountryisclearlyscrewedup,especiallyifpeoplefromallincomebracketsaresimultaneouslybeingpressuredtogotothebestschoolthatwilltakethem,financialsbedamned.That’sjustsadisticandirredeemablyclassist.

    Something like a degree from Duke isn’t a requirement for a career, even a good career, but the way universities are marketed in the US they often try really hard to make it seem as though it is. A lot of money from name-brand private institutions goes towards marketing themselves. The university system in the US is world-class and there are colleges and universities all along the price spectrum that give great educations, but unfortunately there aren’t enough tools out there for the typical high school senior to be able to make an informed decisions in many cases.

    Also, as for the interest levels and payment plans being exploitative, I mentioned that earlier with regards to Sallie Mae and how they should be dumped for more direct government servicing, which I’ve found to be a good program that has allowed me to pay down my debt pretty significantly (from $30 to $20k, despite career changes and significant medical problems that have caused hardship).

35. Actually, pumpkin, I had financial aid + government loans.

    Try harder.

    So you were familiar with loans, loan repayment, etc. before you signed the Sallie Mae paperwork.

36. Are you saying that the system is or isn’t broken?

    Can you point out to me any time in history, any place in the world, where lenders haven’t been out to make serious cash off of people’s bad decisions?

37. Of course, and are you saying this one is or is not sound? Are you saying this is a systemic or individual issue?

38. Lance: Something like a degree from Duke isn’t a requirement for a career, even a good career, but the way universities are marketed in the US they often try really hard to make it seem as though it is. A lot of money from name-brand private institutions goes towards marketing themselves. The university system in the US is world-class and there are colleges and universities all along the price spectrum that give great educations, but unfortunately there aren’t enough tools out there for the typical high school senior to be able to make an informed decisions in many cases.

    Okay, well now I’m getting two different messages, and I’m not in a position to verify either side, so I’d appreciate insights to that effect. Is there any truth to the notion that some US degrees lend themselves to substantially better job prospects, or are they all basically equivalent, just mythologized otherwise? (And I’m not talking about deterministic requirements, but probabilistic odds here.) Because it only makes sense to me that people would want to pursue a program which gives them a better likelihood of getting employed after. Paying $80,000 for an 90% shot at getting the kind of job that can help you pay that off is a more rational decision than paying $40,000 for a 10% shot of the same. (I am obviously making those numbers up as an example, but you see the logic I’m driving at.)

    Although perhaps it doesn’t matter too much if the truth is different, if the perception among the tuition-paying students who have to make these choices have been so manipulated and misinformed as it make it true in its consequences.

39. @Ryan: Yes, that could explain it. If she started with 37K and deferred payment for a couple of years before starting to pay, then the interest rate could actually be reasonable.

40. It’s disheartening to see such enthusiastic water-carrying for creditors who have managed to stack the deck in their favor *and* convince people that there’s some virtue attached to repaying usurious fees and interest.

    If you’re going to argue that it was a bad idea to accept the loan, then it was also a bad idea for the creditor to make the loan, but somehow they’ve been moved beyond reproach. Debtors may have lost some of their options, but creditors brought default upon themselves by eliminating the ability to discharge the debt in a controlled and equitable way through bankruptcy. Why isn’t any of the “they made a bad deal and it’s their fault” rhetoric directed at the creditors, then?

41. Dear flying spaghetti monster above, Q Grrl, here’s the thing (and I’m making assumptions about Natalia’s situation here, so my apologies for that) :
    You go to a university. An expensive university, admittedly. You’ve been there for two years. And then you can’t afford it anymore. Of course you’d like to stay and finish what you started – especially if the dominant discourse is that you will be able to repay your loans because, hey, shiny Duke education is shiny. And you already have loans, right ? Adding more is not that big of a deal. At least it doesn’t seem like it, then.

    It’s an understandable decision that you can’t exactly fault.

    But more importantly! Can we like, consider the predatory nature of Sallie Mae and student loans and stop victim-blaming ?

42. When I was a junior/senior, the pressure to consolidate our government loans with Sallie Mae was HUGE. Incredibly, unethically huge. I got 2-3 emails a day from Sallie May, brochures, and the student loan office endorsing this choice.

    All while conveniently forgetting that once you consolidated, any government protection on your interest rates or repayment status would go up in smoke. Luckily I had some friendly who helped me work out the math to see where consolidation would lead. Not everyone is so lucky.

    Just because 18 year olds kids are making foolish financial decisions so they have a shot in hell of pursuing their dreams doesn’t mean the loan companies aren’t also fucking predatory.

    My debt (about 30k) is entirely in federal loans–and it still terrifies the bejeesus out of me. I had a full ride to two decent state schools, and I turned it down for a partial ride and a lot of aid at an Ivy. I consciously gambled that the only way out of my background was to take this shot. And I’m not convinced that I was wrong. What IS wrong is the overall situation.

43. @Jadey: Yes, at least in some fields. My law degree from a top-14 law school opens a lot of doors job-wise than my brother’s law degree from a marginally cheaper law school towards the bottom of the top tier. In a market where an employer can choose someone from a place like Harvard or a place like New York Law School (which I understand to be a decen school, but is not perceived as a “top” school), the Harvard grad is much much more likely to get hired, even if both are equally qualified.

    I can’t speak from first-hand experience about journalism, but I understand the market dynamics are similar.

44. One thing that my parents taught me about finances and debt (for which I will forever be thankful) is that I should never never never do the “minimum payment” on anything.

    Very often (and you will need to read deeply into fine print to find it) the minimum payment only covers the interest on the original loan. So if you spend years and years and years of only sending in that minimum payment, then you are only paying off the (eternally accruing) interest and never touching the balance of the loan.

    So I can totally see something like in the original post happening… paying out over $20k on a $35k loan, and finding out that you still owe $32k. I can totally see it. And it is sad, and it happens to a lot of people (this is how people find themselves drowning in credit card debt and mortgage debt as well, with no end in sight). And the only way to escape the cycle is to pay more then the minimum and bring your balance down… and that is really really hard to do in a recession.

    Ugh. My deepest sympathies.

45. Are you saying this is a systemic or individual issue?

    No. What I’m saying is that I think it’s crap when someone who has obvious and documented privilege tries to tap into the zeitgeist of the less-than-privileged.

46. The issue is complicated. Colleges and universities increasingly have created redundant departments. They have employed people in them who make over $100,000 a year to do essentially nothing. Should the institute of higher learning have an air of exclusivity to it, the price goes even higher.

    Is it even worth going to somewhere prestigious if it doesn’t get your foot in the door? If you can’t make connections there that you wouldn’t attain otherwise, what’s the point? Also, is it worth paying the money if you’re too in dutch to student loans that it takes you forever to dig out?

    I myself took out 18K total in loans for grad school. Being that I enrolled in a state school, the cost was not nearly as expensive as it could be. Half of it was provided interest-free, backed by the US Government. However, the other 9K came from private lenders who charged interest on the debt. I had to put my payments in deferment due to financial hardship shortly after I left school, meaning that the interest-bearing portion rapidly snowballed.

    18K within a year and a half became 24K. But if there is any silver lining to this story, student loan debt is good debt to have. It may not ever go away, but it will help you build a credit history should you want to own a house one day, among other things.

47. DP: She’s reduced the principal by $2K and sent another $9K to interest. Where is the remaining $11K? Fees?

    Fees and interest. Sallie Mae makes it very difficult to pay anything down on principal, and even if you defer or get a forbearance, the interest continues to rack up so that you’re paying additional interest not only on the principal, but on the total amount owed, which includes that interest that never really goes away.

    Student debt is a huge issue right now in law schools, which charge way more than undergraduate institutions because not only do the graduate schools have to pay the main institution money for the use of university facilities, but there’s the assumption that lawyers are going to make tons of money. Except that’s never been true for anyone but those at the top schools or the top of the class at less-well-ranked schools.

    Not to mention, schools escalate their tuition and fees because they can — as long as the government guarantees the loans, they’re more than happy to extend enormous, nondischargeable debt to 18-year-olds with no jobs or credit history and only a potential ability to repay.

    But at least with law schools, after the crash of 2008, when there was a fundamental shift in the way that firms and clients behaved — law firms were for the first time willing to admit that they had to lay people off, and clients dug in about paying to train new lawyers — there’s going to be a reckoning, soon. Especially now that it’s been revealed that many schools were inflating their post-graduation employment numbers to improve their US News rankings; there are a number of lawsuits being brought now by graduates who are unable to find a job and claim that their schools fraudulently induced them to attend and take on huge debt by inflating their employment figures and reputation.

    By the by, Q Grrl, is it your usual practice to place blame on the least powerful actors in any given system? Because regardless of your feelings about Duke, any given student is the least powerful actor in the education/student loan system, and has the least amount of information available to make good decisions. Maybe you could, I don’t know, criticize the system?

48. The effective interest rate Natalia is paying is fucked up. She probably took out her loans when interest rates were much higher than they are now, but is likely ineligible to negotiate a lower rate. This is totally unfair, as homeowners have much more leeway, for instance, to renegotiate their interest rate when they decline.

    Also screwed up is that student loans are WAY WAY WAY harder to default on than normal debt. It basically screws up your life forever, unlike other forms of debt–and it’s based on decisions you make when you’re barely (if at all) legal.

    The other issue is that education is totally overpriced. Tuition increases have outpaced inflation for years. 10 years ago my in-state tuition was $1,200 per semester.When I went to grad school last year (also state school), in-state tuition was $18,000. Tuition at private schools has similarly risen a freakish amount. They do this not because education is now 10 times better than it was 10 years ago, but because they can get away with it.

    Really, the government should only give out loans for tuition up to a certain amount. So, for instance, if a private school should be able to provide an accredited, quality education for $12,000 a year, they shouldn’t provide much more than + living expenses in loans. Since many schools depend on student loans, the price of tuition may come in line.

    And schools that have a substantially higher rate of kids who can’t pay back their loans or don’t get jobs in their field with a sufficient income shouldn’t be eligible for student loans. That would remove some of the for-profit universities that prey upon folks who are less privileged.

49. This is truly horrifying and I hope everyone of you can get out of this trap. I feel the American higher education system needs substantial change.

    Until it changes, consider other options for yourself, your kids, your friends. Why not study abroad? I did my BA in Germany (currently doing my postgrad in the UK). There, studying is almost free. In some German cities, studying is cheaper than NOT studying because one gets student benefits like health care and free public transport use. Also, countries like France, Italy, Switzerland, Austria and the Netherlands also have amazing universities with none or very, very little tuition fees.

    I can understand if one wants to live in their homecountry. But living abroad for a few years is not so bad compared to being in debt for the rest of your life.

50. Another thing to be wary of is loans that won’t let you make double payments–or worse, DO legally allow it, but apply that extra payment to the interest rather than the principal. Which is illegal, yet most people won’t catch it, so it goes on. Our mortgage company has tried to pull that one a few times.

    Kara:
    Onethingthatmyparentstaughtmeaboutfinancesanddebt(forwhichIwillforeverbethankful)isthatIshouldneverneverneverdothe“minimumpayment”onanything.

    Veryoften(andyouwillneedtoreaddeeplyintofineprinttofindit)theminimumpaymentonlycoverstheinterestontheoriginalloan.Soifyouspendyearsandyearsandyearsofonlysendinginthatminimumpayment,thenyouareonlypayingoffthe(eternallyaccruing)interestandnevertouchingthebalanceoftheloan.

    SoIcantotallyseesomethinglikeintheoriginalposthappening…payingoutover$20kona$35kloan,andfindingoutthatyoustillowe$32k.Icantotallyseeit.Anditissad,andithappenstoalotofpeople(thisishowpeoplefindthemselvesdrowningincreditcarddebtandmortgagedebtaswell,withnoendinsight).Andtheonlywaytoescapethecycleistopaymorethentheminimumandbringyourbalancedown…andthatisreallyreallyhardtodoinarecession.

    Ugh.Mydeepestsympathies.

51. @Jadey,

    It makes a tremendous difference. Particularly schools like Duke with excellent alum connections. If you look at average post grad salary both initial and mid-career:

    UH – 41,000/73,500
    Duke – 54,400/113,000

    Not small change. These schools are an investment…but its in a life you may not want or have the ability to lead years and years into the future.

52. So Q Grrl you basically are just angry that she’s angry.
    Ok. Good to know that we’re dealing with the bigger picture here.

53. Lance: Also, there’s the fact that more students using more money from student loans to pay for their education leads to higher prices for a degree, as the demand (and ability to pay for) an education outpaces the supply. Thus, the vicious cycle continues.

    That can hardly be laid at the feet of the students, though, Lance. The government guarantees the loans and the schools set the tuitions. Are you really arguing that a bunch of teenagers are really the ones who have the most power here?

54. (I don’t know why this quote text is appearing without spaces, sorry if it’s breaking any tables.)

    Jadey: Okay,wellnowI’mgettingtwodifferentmessages,andI’mnotinapositiontoverifyeitherside,soI’dappreciateinsightstothateffect.IsthereanytruthtothenotionthatsomeUSdegreeslendthemselvestosubstantiallybetterjobprospects,oraretheyallbasicallyequivalent,justmythologizedotherwise?(AndI’mnottalkingaboutdeterministicrequirements,butprobabilisticoddshere.)Becauseitonlymakessensetomethatpeoplewouldwanttopursueaprogramwhichgivesthemabetterlikelihoodofgettingemployedafter.Paying$80,000foran90%shotatgettingthekindofjobthatcanhelpyoupaythatoffisamorerationaldecisionthanpaying$40,000fora10%shotofthesame.(Iamobviouslymakingthosenumbersupasanexample,butyouseethelogicI’mdrivingat.)

    Althoughperhapsitdoesn’tmattertoomuchifthetruthisdifferent,iftheperceptionamongthetuition-payingstudentswhohavetomakethesechoiceshavebeensomanipulatedandmisinformedasitmakeittrueinitsconsequences.

    In my experience, having a degree, almost any degree, is a big bar to clear for a lot of the more solid middle-class work in the US. HR departments tend to take the applications of those without degrees and put them towards the bottom of the stack (or just straight throw them in the trash). So that’s a long-run advantage that you have over those without college degrees.

    However, the place where you got your degree really only gives you a short-run advantage generally. You may get things like better internship opportunities, networking opportunities with more privileged people (giving your more access to privilege yourself) and something to brag about on your resume for the first two or three years after you’ve graduated, but those kinds of head-starts ultimately only help initially. If you’re able to run with that head start, then your advantage will just increase. If you aren’t able to do much with it, then where you actually graduated from will matter less and less over time.

    Here’s a list of colleges by their graduate’s average pay. Duke is pretty high on the list, but so are a lot of schools with lower price tags:

    http://www.payscale.com/best-colleges/top-us-colleges-graduate-salary-statistics.asp

55. So Q Grrl you basically are just angry that she’s angry.

    In a nutshell, yes. Am I not allowed to be? In my mind, it’s fronting. I really am not sympathetic about the outcome of her decision. I do not, and probably won’t, ever think of her as a victim.

    And I’m saying this as someone who is currently living off nothing *but* student loans. Loans which I researched and created a budget for, all before I decided whether I could afford to pursue my degree.

56. Q Grrl: She wasn’t an 18-year-old high school student. She was a junior at Duke.

    Yes, those two years make all the difference in the world.

    Let me tell you something, as a lawyer: there are a hell of a lot of loan agreements that are confusing to ME, and I HAVE A LAW DEGREE AND THIRTEEN YEARS OF LEGAL PRACTICE UNDER MY BELT. Loan documents are designed to be confusing.

    Why do you think Elizabeth Warren, with her push to simplify loan documents, terrified the banksters so?

    They rely on assymetrical information. Do you really think, I mean *really* think, that a 20-year-old, no matter where she’s a student, really has all the information necessary to make the kind of decision you think is so easy for her to make?

    And do you really think it’s that easy to transfer to another institution at the last minute?

57. Let’s look at the macro issue. The student loan industry has the ability to shield itself from losses in a way that the originators of mortgages did. That’s pretty much a recipe for a bubble. The bubble inflates the prices so that anyone unwilling to borrow foolishly is priced out of the market. In the housing market, people can rent for a few years, but with education, there are life-sequencing issues that make this a lot less attractive. So the unaffordability of the marquee educations is a problem of capital allocation, caused by how we structure the loan market. Structually allocating too much money to any sector of the economy is going to drive asset values in that sector beyond what their social use would dictate. (Don’t tell Eugene Fama! He still believes there are no bubbles. And also that there is a Santa Claus.)

    If education financing was more sensitive to actual ability to repay, then schools would have to drop their prices and return to the days of dorms with cinderblock walls to make the facilities cost-effective (given faculty salaries, actually providing a great education isn’t that costly for the schools; it’s the bells and whistles that cost money). I’d like to see more inventive ways of financing loans — for example, law school loans indexed to income, so that the lenders can essentially make a risk-capital bet on “poor, smart, hungry” law students who will go to BigLaw and make big money, and get a lower return if they give up the big pay for public interest.

58. Are you really arguing that a bunch of teenagers are really the ones who have the most power here?

    Why is this so untenable? They’re young adults; not lemmings, fer christ’s sake.

    No one gets forced, all powerless and what-not, into a private university. No one gets forced to sign loan papers for the tuition for the school that they weren’t forced into.

    I would go so far as to say that the *only* person with power in this situation is the student. Right up until they sign it away.

59. Actually, Lance those colleges are listed in order of highest mid-career salary and there is no school on that list higher than Duke that has substantially lower tuition.

60. Man. I so agree with this. All of this. I only have maybe 10,000 in loans from undergrad…which are still interest free and no payments required cuz I’m in graduate school now (on full TA-ship which means my tuition is free and I get a salary…aka very lucky). The 10,000 is mostly from study abroad and travel (my degree is in a foreign language…it’s required to study abroad).

    However, despite my coming out of state education and a MA that is free (and in fact, I am getting paid to do at a respectable state school)…my partner-in-crime (hubby) has accumulated muuuch more. As of now its around 50,000 which will probably be twice that if we ever repay it. Most of his former schoolmates owe two to three (even four) times that amount–he was lucky and received many scholarships. But he also attended a private art school. (ooh, I can just hear the cries of “unnecessary” and “privilege”). We both just are crazy people for thinking we should major in language, cultural and arts degrees…I even have a women’s studies minor and a focus on sociology! The most made-fun of degrees I know (I can’t count the number of times I’ve been asked what the point of WST was).

    Yes, I’m rambling. But I’m pissed. His degree was required to have the kind of job he has in design. Yes, it is possible to get a technical degree in graphic arts from a community college or state college. But unless you go to one or two state colleges in the US (which were not in my state and out of state tuition is insane), you are not going to have the experience to get a job doing major design work (book design, major branding, etc.). And since he didn’t want to work at the local “SIGNS IN MINUTES” sign making place…he had to pay the big bucks for the private school.

    But 800 a month!!! What the fuck. I live in (insert big city) which is fairly inexpensive compared to other major cities…but rent is still high and 800 in payments is a lot. And for now we’ll have to do the “reduced” payment plan since I only get around 10,000 a year for being a graduate student/TA and not much more from part-time jobs. He makes a “decent” salary (a little over 30,000 before taxes). If I gave up school and got a “real” job we’d probably be better off but I don’t want to. And I’ll make more teaching with an MA than without one. So for now I guess we’ll be majorly screwed over by Sallie Mae’s reduced plan. (we start payments in January…we are both very recent grads).

    And technically it’s all our debt anyways…I don’t see some as his and some as mine. We were married as teens (the horror!) and got each other through school. So we can both say, fuck Sallie Mae.

61. Lance: (I don’t know why this quote text is appearing without spaces, sorry if it’s breaking any tables.)

    Highlight and copy the text before you hit the “Quote this Comment?” link. There’s a bug.

62. And do you really think it’s that easy to transfer to another institution at the last minute?

    At two years into the degree, depending on the math of the credit hours it may have actually set her back MORE in terms of progress toward completing her degree (and therefore the connected amount of money spent in tuition) to transfer to a cheaper school.

63. They rely on assymetrical information. Do you really think, I mean *really* think, that a 20-year-old, no matter where she’s a student, really has all the information necessary to make the kind of decision you think is so easy for her to make?

    Yes, I do believe that a 20-year-old has the information they need. [and backing from a very strong financial aid office]

    It’s not like we’ve only been talking about predatory lending since OWS started. This is old information.

    And do you really think it’s that easy to transfer to another institution at the last minute?

    No, but I don’t see the relevance. Why is ease the delimiting factor? I will say, though, that transferring to another college is easier than, say, not using the degree you just spent $160,000 on!

64. Q Grrl: I would go so far as to say that the *only* person with power in this situation is the student. Right up until they sign it away.

    O_o

    Okay.

    I’m sure you feel that way about all kinds of people who took out predatory loans, yes?

65. Q Grrl: Privilege. She’s soaking in it.

    And you’re jealous of it.

66. I have only stafford loans (federally subsidized interest while in school), but we were required to use a lender such as Sallie Mae, bank of America, etc. So they “are” federal loans, but at least a few years ago there was no way to avoid having a non-government lender.

    chava:
    WhenIwasajunior/senior,thepressuretoconsolidateourgovernmentloanswithSallieMaewasHUGE.Incredibly,unethicallyhuge.Igot2-3emailsadayfromSallieMay,brochures,andthestudentloanofficeendorsingthischoice.

    Allwhileconvenientlyforgettingthatonceyouconsolidated,anygovernmentprotectiononyourinterestratesorrepaymentstatuswouldgoupinsmoke.LuckilyIhadsomefriendlywhohelpedmeworkoutthemathtoseewhereconsolidationwouldlead.Noteveryoneissolucky.

    Justbecause18yearoldskidsaremakingfoolishfinancialdecisionssotheyhaveashotinhellofpursuingtheirdreamsdoesn’tmeantheloancompaniesaren’talsofuckingpredatory.

    Mydebt(about30k)isentirelyinfederalloans–anditstillterrifiesthebejeesusoutofme.Ihadafullridetotwodecentstateschools,andIturneditdownforapartialrideandalotofaidatanIvy.Iconsciouslygambledthattheonlywayoutofmybackgroundwastotakethisshot.AndI’mnotconvincedthatIwaswrong.WhatISwrongistheoverallsituation.

67. Q Grrl: Yes, I do believe that a 20-year-old has the information they need. [and backing from a very strong financial aid office]

    HAHAHAHAHA.

    Oh, Christ. You really think the financial aid office is there to HELP the students and TALK THEM OUT of signing loan documents?

    They work for the university! Their whole job is to line up sources of payment FOR THE UNIVERSITY!

68. Q Grrl: In a nutshell, yes. Am I not allowed to be? In my mind, it’s fronting. I really am not sympathetic about the outcome of her decision. I do not, and probably won’t, ever think of her as a victim.

    And I’m saying this as someone who is currently living off nothing *but* student loans. Loans which I researched and created a budget for, all before I decided whether I could afford to pursue my degree.

    But did she ever claim that she was more screwed over than anyone else, or the most screwed over of anyone? I mean, she’s challenging the system, not claiming to be the Queen of the Victims. Should Jill shut down Feministe because she’s not the world’s most oppressed woman and therefore has nothing valuable to contribute regarding sexism?

    Lance: Here’s a list of colleges by their graduate’s average pay. Duke is pretty high on the list, but so are a lot of schools with lower price tags:

    I can’t actually tell from that table which schools are cheaper, not being familiar with any of them, although I guess I can go roughly with the private/public distinction (although they aren’t all described that way). But it also looks like Engineering might be an exceptional discipline.

    (P.S., there’s an on-going issue regarding the quote formatting, which you can circumvent by selecting the text you want to quote first and then using the quote link.)

69. Andie: Do University tuitions in the U.S. vary widely from school to school? Up here I was under the impression that there was a difference between technical colleges and academic universities (unis being about 2x the tuition of technical colleges) but that there wasn’t much variance from school to school. You’d pay about as much to go to the University of Toronto as you would to go to Nippising.

    Really? I’m at U of T and my bro is at U of M in Winnipeg and he pays waaaaaaaaaaaay less. Is that just an Ontario thing? That said, reading this I’m so glad I’ve got an Ontario student loan. What an incredibly fucked up system to deal with, Natalia (and other people here who are in the USian student loan system regardless of ‘privilege’ e_e).

70. Mounia: But more importantly! Can we like, consider the predatory nature of Sallie Mae and student loans and stop victim-blaming ?

    One would hope. I’d like to see it. Then again, I’d like a pet unicorn, so don’t mind me.

71. Q Grrl:
    IwascuriousuntilshegottotheDukepart.

    Seriously?Gocryinsomemilk.IfshewassmartenoughtogetintoDuke,thenshewassmartenoughtofigureoutaloanagreement.Idon’tgetwhatthetragedyishere.Shefreelychoseauniversitythat,even10yearsago,wasabout$40,000/year.…andwasabletopayforthatb/cofherparents,Iguess.Nicegigifyoucangetit.

    Idon’thavemuchsympathyforpeoplewholookatapricetagtheycan’taffordandstillmakethepurchase.That’skindawhywe’reinthejamwe’rein.It’snotsomeone-sided,gameofGotcha!Ifpeopleweren’twillingtobuywhattheycan’tafford,lenderswouldn’tbeabletopullthisshit.
    And,really?Whospends$160,000onajournalismdegree?Thatisn’tevenhighermath!

    But of course… how dare she want to have a good education in a degree she want. journalism doesn’t matter as much as mathematics anyway, because…. ? Why do you think journlism is somehow easier or less valuable than mathematics again? i can tell you are no journalist and sure as hell no mathematician.
    But again… it her’s fault that education is paid and gets more and more expensive… she should have stayed without education and taken all those super prestige jobs which are available for degree-less people.

    enough ranting, now some actual valid points: we can’t go without education, higher education is mandatory if we want to be…anything. And because everyone wants to be something, the prices go up and up and up… and education is treated as something fancy kids these days do for the sake of spending their time and money somewhere (really, higher education is just like the arcade you guys!) and not a country investment in its future.

    If this proceeds to happen in scale, it will lead to a binary classes – educated rich who have access to the good jobs and uneducated poor who are stuck to the shitty jobs and can’t change it, because they don’t have the money for the education to change it. But don’t take my word for it, go on, check out history books and you will see it.

    But of course… everything is their personal’s choice and in no way created culturally or socially or complex… just eery person could choose… for instance.. if we want to live in poverty, we can do that. If we want to live well but can’t afford the education that would give it to us… well, it’s our fault for not being born in wealthy families, amir-rite?

72. And I’ll make more teaching with an MA than without one.

    Okay, that’s true. But if you’re talking about teaching salary, the difference is only going to be a couple of thousand dollars per year until you’ve put in 5 or so. Does all the math add up? If your loan repayment is like Natalia’s you will be better off working for a lower salary and paying the loan down, then earning a higher salary that you don’t get to keep because your loan payments are impossible to bring down. You could be losing money, big time.

73. I’m just waiting to be called “lazy.”

    Although, to get the conversation back on track for a second – I really do think that student debt should be looked at in context of the other serious problems in our society. I mean, if all it takes is a single illness or other type of setback to basically make you unable to pay.

    Today, I heard from someone who survived a terrible car crash shotly after graduating. They’re over 100k in debt now. Disability discharge has been impossible, even with the help of sympathetic doctors. WTF.

74. I am so, so sorry for the quotation fiasco, no idea why it happened. Dear moderators, can you fix it, please?

75. Boy, Q Grrl, I’m so glad you’re here to advise us on our life decisions.

76. @Zuzu,

    Re: loan document.

    Agreed. I negotiate the blasted things from time to time…it takes an enormous investment of time and brain power to figure out what the hell they say. Fortunately, I work for an org with market power, so I can do things like…make them use language I understand. I remember as a first year spending a good week sorting through the language and the definitions in a loan agreement. And how many of those terms are terms of art that refer to statutory provisions or common law principles that are unfamiliar to a layperson. I’m highly skeptical of any claim that anyone who doesn’t live and breathe these agreements (including me!) fully understands them.

77. I’m sure you feel that way about all kinds of people who took out predatory loans, yes?

    That they had power prior to signing the loan papers? Yes. I do think that. It’s not about what I “feel.”

    People get jammed up something wicked and can be in financial ruin. It doesn’t make them powerless, and I think it’s a dangerous mentality to tell people they are powerless in a system that is *entirely* dependent upon them.

    A bank can’t lend money to someone who won’t take it. And there is a lot of power in that dynamic for the consumer.

78. zuzu: Thatcanhardlybelaidatthefeetofthestudents,though,Lance. Thegovernmentguaranteestheloansandtheschoolssetthetuitions. Areyoureallyarguingthatabunchofteenagersarereallytheoneswhohavethemostpowerhere?

    Of course not. It’s a matter of the incentives being messed up, which is primarily a systemic problem.

    Kristen J.:
    Actually,Lancethosecollegesarelistedinorderofhighestmid-careersalaryandthereisnoschoolonthatlisthigherthanDukethathassubstantiallylowertuition.

    There’s no college higher than Duke with a much lower tuition, but there are others that will get you pretty close to Duke’s level. Also, when considering the graduate salary information it should be remembered that there’s Duke’s law, medicine, and engineering schools pushing that average up. Unfortunately, one thing that isn’t considered is the way that some of the colleges and degree programs within particular universities may have better or worse offerings/reputations. (For example; At my school, University of Texas, we have one of the best classics departments in the US. However, our philosophy department is a laughingstock.)

79. Q Grrl: Privilege. She’s soaking in it.

    And you’re jealous of it.

    What can I say. She hates me because I’m beautiful.

80. Q Grrl: A bank can’t lend money to someone who won’t take it. And there is a lot of power in that dynamic for the consumer.

    You’re assuming the consumer has perfect information. I think we’ve seen time and again that consumers do not.

    It’s called predatory lending for a reason.

    You’re really precious, you know that?

81. Q Grrl: Okay, that’s true. But if you’re talking about teaching salary, the difference is only going to be a couple of thousand dollars per year until you’ve put in 5 or so. Does all the math add up? If your loan repayment is like Natalia’s you will be better off working for a lower salary and paying the loan down, then earning a higher salary that you don’t get to keep because your loan payments are impossible to bring down. You could be losing money, big time.

    Yeah. I should totally quit this MA program that I am not paying for, and am in fact getting paid a (albeit tiny) salary for attending. Just so that I can work an extra two years and pay off a little more interest on my hubby’s loans. I’m not in the MA “only” because of the extra pay, it is just a bonus. Unfortunately, to most people it’s the only good reason, since they tend to see a graduate degree in a fucking foreign language/literature as being completely useless and a waste of time. Since when did actual knowledge and cultural learning become useless?

    You probably think my Women’s Studies minor was useless too. Wasting money on learning about “feminism” and shit.

82. Alex: Really? I’m at U of T and my bro is at U of M in Winnipeg and he pays waaaaaaaaaaaay less. Is that just an Ontario thing?

    I found some stats here that show averages across provinces and territories, and it does look like there’s some variance, with Ontario as the most expensive on average. But not every province has a provincial loan system either. Overall, still WAY cheaper than the US at its most high-end, and, at least in my discipline, I’ve never been told that my degrees (particularly my MA) would be less valued here than a USian one.

83. You know, zuzu, I have a hell of a lot of respect for you. I am sorry that my POV on this is so damn irritating.

    I think by now we all know that I’m not sympathetic, so my prolonged involvement is just going to be needlessly annoying.

84. Q Grrl: A bank can’t lend money to someone who won’t take it. And there is a lot of power in that dynamic for the consumer.

    Yes, but someone who needs a loan or will become homeless, or someone who needs the loan or they will end up lacking a degree in spite of already having paid for half of it, or various other situations isn’t exactly in a very powerful bargaining situation. The power to turn down a loan is only really power when you don’t actually have much/any pressing need for the loan.

85. @Lance,

    But isn’t reputation part of the deal? I mean my undergraduate degree has been listed as a “Best Buy” but despite having a super high GRE I struggled to get into a good graduate program. Duke will get you into any MBA program, any med program, yada yada. A degree from my undergrad will get you A job, but not necessarily the job or career you want.

86. You probably think my Women’s Studies minor was useless too. Wasting money on learning about “feminism” and shit.

    Okay, one last thing, and then I’ll drop my tirade:

    Have I even come close, anywhere in this thread, to slamming education? Or educational choices?

    I’ll I’ve been talking about is price tags, for fuck’s sake.

87. So, we’re reading a story in which someone spent 5 years paying off over 60% of their base loan and, due to predatory structuring of said loan, their creditor gets to act like they only paid off 10% of their loan.

    And some of us are still taking away “Well fuck them right in their privileged ears! At least they were approved for that intensely predatory loan in the first place! Nobody made them take that deliberately unrepayable loan!” from that.

    So, I guess next up on the agenda is telling people to be grateful to payday lenders and their 2000% APR because if it was really that awful, they’d have started eating nothing but ramen six months before they stopped being able to make ends meet?

88. Q Grrl: Have I even come close, anywhere in this thread, to slamming education? Or educational choices?

    Ahem:

    And, really? Who spends $160,000 on a journalism degree?

89. Wow, Q Girl, not only is your anger entirely misplaced, but you don’t even understand what privilege is or how it works. Hint: it’s not absolute and it’s not static. Also your ability to research and understand your student loans: privilege. Your ability to live off said loans instead of working three jobs and taking a class here and there when you can afford it: same. Your ability to waste time trollin’ on the internet: same. See, it’s a game that everyone can play if they are so inclined. And it’s not helpful, particularly if you don’t know first thing about it and just go “privilege, privilege” like a parrot.

90. Angel: seriously, that was about the fucking price tag, not the degree. Unless you know something about the secret salaries of journalists that I don’t know, that is a huge price tag.

91. Q Grrl: And, really? Who spends $160,000 on a journalism degree? That isn’t even higher math!

    Q Grrl: Have I even come close, anywhere in this thread, to slamming education? Or educational choices?

    I’ll I’ve been talking about is price tags, for fuck’s sake.

    When you criticize spending a certain amount of money on (the horrors!) a journalism degree…as opposed to “higher math”…you sound EXACTLY like the type of people I’ve heard over the years criticize my degree choices for being a waste of money. “Why spend so much money for a (insert random foreign language) degree?” “Who pays money to learn about Women’s Studies…just read a magazine!”. Yeah. I’ve heard these things. My hubby gets the same thing for paying private school tuition (subsidized by many scholarships it’s still expensive) because it’s “only” for art.

    People seem much more understanding when money is paid for a business degree from Harvard or a Law degree from University of Chicago or something similar because it’s “practical”.

92. Also, just from a theoretical perspective…standardized contracts (contracts you can’t negotiate) are historically considered contracts of adhesion because its a take it or leave it proposition. Its only relatively recently that courts are being asshats about enforcing them even when under equitable principles the agreements would be modified.

93. Gender studies is a luxury, and only privileged people get luxuries!

94. And QGrrl, before you go into how lawyers and business degree-holders make more money than language teachers… I think that someone who teaches our future children deserves just as good (and expensive, if it comes to that) of an education as a lawyer. It’s not always about the monetary payoff. Education should be affordable and accessible to ANYONE who is willing to do the work and get that degree. Regardless of what they study or how much money they will make.

    In order for that to happen, I believe student loans should not be in the hands of private companies. It should be federally controlled, with payment plans that correlate to income WITHOUT additional fees or higher interest. For that matter, I also believe more money should go to grants so that less debt is needed anyways.

95. Alex: Really? I’m at U of T and my bro is at U of M in Winnipeg and he pays waaaaaaaaaaaay less. Is that just an Ontario thing?

    Entirely possible, I don’t know anyone at any schools outside of Ontario, so I can’t really say. My own perception may even be mistaken. I do know that when I was taking sociology at Laurentian through their Georgian College campus, I wasn’t paying much less than my sister paid to go to York at the same time.

96. Miku: Gender studies is a luxury, and only privileged people get luxuries!

    I enjoy soaking in this privilege of having such a luxurious degree. College also turned me from a pro-life, conservative, religious, capitalist into a feminist leftist agnostic. So it is also a part of the liberal feminist agenda and should be banned.

97. I’m with Q Grrl on this one. The student enjoyed the privileges of a Duke’s education while in school and after, has enjoyed the privilege of readily available loans and is only now complaining about the system when it does not work out for her anymore.

    1. I’m with Q Grrl on this one. The student enjoyed the privileges of a Duke’s education while in school and after, has enjoyed the privilege of readily available loans and is only now complaining about the system when it does not work out for her anymore.

       Don’t you all know that the privileges of a great education should be reserved only for the most economically privileged? And if some bottom-dweller has the audacity to attend an elite university, then they never get to complain about anything ever again, even fundamentally unfair and predatory financial deals, because Privilege?

98. Oh, the “higher math” thing.

    Duh.

    I meant that it doesn’t take higher math to figure out that a journalist’s salary is not going to make much of a dent into a $160,000 tuition bill.

    I could care less what people study. Go for it.

    I’m just not sympathetic to big price tags and people trying to pass *that* privilege off as a common-peoples trope.

99. To everyone who says that Duke University was “too expensive” for Natalia and she should have gone somewhere else, I have a question: Should elite colleges be reserved for the rich? Because the last time I checked, it’s not easy to get admitted to Duke. If Natalia did well enough to get in, she should have been able to attend without becoming a debt slave. Or maybe some people like how it was in the bad old days, back when higher education was the province of the rich.
    There was a time after W.W. II and throughout much of the twentieth century when college was affordably priced and there were abundant grants for deserving students. But now we’ve reverted to the bad old days and a predatory student loan industry. (And, btw, you can’t get student loan debts discharged in bankruptcy, but of course you can get gambling debts discharged. This thanks to the lobbying power of the student loan industry.)
    I have noticed that whenever the question of student loan debt comes up, there are inevitably pro-creditor trolls coming out of the woodwork. But rather than feeding them, maybe a good question for discussion would be this: Is it good for society if young people are forced to take on huge amounts of debt in order to get an education, and if not, what are the alternatives?

100. Education should be affordable and accessible to ANYONE who is willing to do the work and get that degree. Regardless of what they study or how much money they will make.

     okay, i guess I’m still here.

     Right, I agree about affordable education and accessibility. But if someone walks right past all that affordable and accessible education and walks directly, knowingly into a $160,000 price tag while simultaneously knowing what salary they might be making on the flip-side? Yeah, so not sympathetic to their financial strife.

101. Q Grrl: “A bank can’t lend money to someone who won’t take it. And there is a lot of power in that dynamic for the consumer.”

     In many ways, I agree with Q Grrl. I just still can’t get around the math and probably won’t until Natalia provides the payment schedule, interest rate, etc. She says she overpaid and there were no fees. That means the interest rate had to be really high.

     Anyway, back to Q Grrl, while the consumer does have ultimate power over the transaction (by not taking out the loan), there is a fundamental weakness in that there are thousands of others willing to step in to take the spot. So, the consumer is left to choose one of two bad outcomes.

     At the same time, while you are right that the student may be to blame, I think the hierarchy of blame goes: 1) Government; 2) Education Industry; 3) Lending Industry; 4) Student. The Government decided it would help the Student afford the Education, the Banks agreed, so long as their debt was protected, and the Schools took advantage of the free money by jacking up their prices.

     So, yeah, I think the Student is somewhat to blame, just make sure the other guilty parties get their fair share.
     -Jut

102. Of course there is the simple alternative of tax-funded education and health care system… but that means there wont be privileges like you get at Duke!

103. Journalism majors make about 36k starting and 65k mid-career. That’s tough but not undoable or unreasonable.

104. “Right, I agree about affordable education and accessibility. But if someone walks right past all that affordable and accessible education and walks directly, knowingly into a $160,000 price tag while simultaneously knowing what salary they might be making on the flip-side? Yeah, so not sympathetic to their financial strife.” <— THIS!

     1. “Right, I agree about affordable education and accessibility. But if someone walks right past all that affordable and accessible education and walks directly, knowingly into a $160,000 price tag while simultaneously knowing what salary they might be making on the flip-side? Yeah, so not sympathetic to their financial strife.” < — THIS!

        You think 17-year-olds go into college knowing exactly what they plan to do with their lives, and what those salaries will be? Come on.

     2. It’s also worth pointing out that there are less tangible but still incredibly beneficial reasons to go to an elite university. Other folks have mentioned the fact that having a top-tier school listed on your resume often ends up giving you better job prospects. That’s definitely true in my field — if you graduate from a top-five law school, you have a much better chance at securing a job than if you’re at a second-tier school. And the job you will get will likely pay significantly more than many of the other positions available. In order to do as well immediately post-graduation as an average student from a top law school, a student at a lower-ranked school has to be at the top of their class. That’s how the system works. And of course people who graduate from lower-ranked schools aren’t any less intelligent, and over the course of their careers often do just as well (or better) than the B student at a top institution. But for that first or second job? The pedigree matters. If I had gone to University of Washington for law school, I can 100% guarantee that my job prospects would not have been nearly as good as they were for me coming out of NYU.

        It also matters in applying to grad schools. An elite undergraduate education secures you certain benefits. And it matters in terms of connections and alumni networks. Jobs aren’t just secured based on how smart you are; who you know is a huge part of how successful you can be, and who will interview you, and who will hire you, and how you hear about other positions. Elite institutions are, unfortunately, gate-openers in that regard.

        Is any of that fair or just? No. But this isn’t as simple as “Natalia (or whoever) was stupid for taking on all that debt when she could have gone to a state school.” It isn’t just the most financially privileged people who should have access to the education and the connections that institutions like Duke offer. To suggest that we shouldn’t have financial mechanisms — like fair student loan policies — that enable the not-rich to get a foot in the door is absolutely ridiculous.

105. Miguel Bloomfontosis: Should elite colleges be reserved for the rich?

     Definitely not. Which is why criticizing someone for their debt to such a college bothers me. Because Pell Grants only go so far. If you get into an elite school and are not rich you will still have to take out loans…scholarships only go so far too. And I don’t think they should be told “no” just because they aren’t wealthy.

     Miguel Bloomfontosis: Is it good for society if young people are forced to take on huge amounts of debt in order to get an education, and if not, what are the alternatives?

     I wish I had a great answer. I do feel that having loans in the hands of private companies is a bad idea–federal loans are run through companies like Sallie Mae. They shouldn’t be. They should have little to no interest and should be there primarily to help students pay for education and not there to make any money. Education should be a priority to our country, so offering these kinds of loans without making money (and possibly losing money) should be considered a small price to pay for educating the people here.

     I also think schools should be more subsidized and housing should be as well. Right now student housing is a joke–it’s extremely expensive. Food should be subsidized too. When I studied in Germany we could have a full meal in the student cafeteria for under 1.5 euros. That really helps students stay healthy without spending too much money.

106. Miguel Bloomfontosis: Is it good for society if young people are forced to take on huge amounts of debt in order to get an education, and if not, what are the alternatives?

     Nope. And don’t get me started on the “these loans will help you build credit” tripe.

     There are a lot of education systems that are worth emulating out there. The Soviets got a lot of things right in regards to education, imho (they also got a bunch of shit wrong in that area – but if we want to focus on something positive to take away from them, there is plenty of stuff to look at). To start off, they recognized higher ed as a fundamental right – even while supporting and encouraging trade schools.

107. Jill: You think 17-year-olds go into college knowing exactly what they plan to do with their lives, and what those salaries will be? Come on.

     This. I discovered my senior year I wanted to do something else. Because of the sheltered way I’d been raised it took getting married and college to open my eyes. So I’m biding my time, finishing up my (paid for) MA, getting a teaching job, and going to study my dream subject part-time. I’m lucky I have that option to continue studying…I have a partner who is happy to work and help me go to school as long as I need to. Not everyone does, and not everyone should be punished for not knowing at 18 what you will want in four years. I’m 25 now and don’t even know exactly what I want. Geez.

108. Q Grrl: But if someone walks right past all that affordable and accessible education and walks directly, knowingly into a $160,000 price tag while simultaneously knowing what salary they might be making on the flip-side? Yeah, so not sympathetic to their financial strife.

     So, just to get a bead on what levels of systemic inequity we’re not supposed to give a shit about, should people who take on $60,000 in debt knowing that their beginning salary is going to be $25,000 also go fuck themselves? I’m a little leery of writing off most teachers like that, but at the same time the holidays are coming up and I’d like to be able to get on a high horse at my elementary-school-teacher sister without having to harp on her problem-drinking again.

109. You think 17-year-olds go into college knowing exactly what they plan to do with their lives, and what those salaries will be? Come on.

     I did not have a plan for life at 17 and that is why I did not apply to Duke and the like for a program that would cost me a lifetime and only maybe work out for me. It is wonderful that other people had the privilege to do so, though!

     1. I did not have a plan for life at 17 and that is why I did not apply to Duke and the like for a program that would cost me a lifetime and only maybe work out for me. It is wonderful that other people had the privilege to do so, though!

        And that’s fine that you made that decision. But your argument basically amounts to “Only the richest people who can afford to shell out $160,000 on the front end should have access to institutions like Duke. And also I don’t like Natalia because she has the audacity to think maybe she should be able to go to an elite school even though she wasn’t super-wealthy, and then she had the audacity to point out that student loans are exploitative, and also Privilege.” And I think that’s ridiculous, and classist., and naive to how these things actually work.

110. I’m going to point out something obvious:

     Good educations are not a luxury for the rich. Prestigious state schools and public Ivies bend over backwards to make sure qualified low-income students can afford to attend. I have never met a brilliant poor kid who had to choose Big Mediocre State School over Elite Private Institution because of money. If you have the brains to get in, anyone can go to a great school.

     1. Good educations are not a luxury for the rich. Prestigious state schools and public Ivies bend over backwards to make sure qualified low-income students can afford to attend. I have never met a brilliant poor kid who had to choose Big Mediocre State School over Elite Private Institution because of money. If you have the brains to get in, anyone can go to a great school.

        Hahahaha. No. Not how it works.

111. Oops prestigious private schools.

112. How about federal loans to students who pay it back out of a percentage of their income (above a living wage)? If you earn a lot, you’ll pay it off with interest. If you don’t earn much, you only pay an affordable percentage of income. In either event it doesn’t count against your debt load.

113. I’m amazed at how autonomous some of you were in your higher education choices. Maybe I was the only one who had strict, first-generation immigrant parents with ridiculously high expectations of where I went to school?

     Elena: Ididnothaveaplanforlifeat17andthatiswhyIdidnotapplytoDukeandthelikeforaprogramthatwouldcostmealifetimeandonlymaybeworkoutforme.Itiswonderfulthatotherpeoplehadtheprivilegetodoso,though!

114. Unless something changed since I graduated, you can’t get a journalism degree at Duke. I know that Q Grrl has spent a lot of time studying the important question of the wood paneling in the dining hall, but she should try to keep up.

     I’m an English & Slavic Literatures and Languages major. I’m bilingual. I do a lot of freelance work, some of it in theater (and hopefully soon in movies, please LAWD). I have a cool resume already. I worked in Dubai, I worked in Jordan – before I came to Moscow. I ought to be a success story wrt my finances.

     But I don’t believe that my problems with student debt are directly related to my career path either. I went for a career where I knew I would be doing the things that I’m good at. That was probably one of the smartest things I ever did – I encourage other people to do the same (I’ve seen a lot of people go for engineering degrees when they hated engineering and sucked at it… and ending up at the point of failing out). Another smart thing was going abroad before the crisis. Considering the health problems that showed up later, I could have easily seen my ass living on friends’ couches. And that would have been the “good scenario.”

     Also, cost of living? It is going up, folks. And that makes a lot of difference if the money you make doesn’t increase with it.

115. Jill: It also matters in applying to grad schools. An elite undergraduate education secures you certain benefits. And it matters in terms of connections and alumni networks.

     Absolutely. When applying to PhD programs, a long recommendation from Top Professor at Ivy League University is going to carry a lot more wait than one from Not Very Well-Known Professor at a place whose letterhead isn’t impressive, to say nothing of what it means to have well-connected advisers who can make personal phone calls when you’re applying to grad school.

     Hairless Cat: Prestigious state schools and public Ivies bend over backwards to make sure qualified low-income students can afford to attend.

     There’s no such thing as a public Ivy. The Ivy league is entirely private universities.

     Hairless Cat: I have never met a brilliant poor kid who had to choose Big Mediocre State School over Elite Private Institution because of money.

     Oh, well, I guess since you never met them, they don’t exist. The issue is not whether an exceptionally brilliant poor kid can get into an Ivy. If she/he’s lucky, she/he can. The question is about the relatively smart but not necessarily exceptionally brilliant poor or middle-class kid who is not getting half the chances to learn and improve that the dumbest rich kid is getting.

     Miguel Bloomfontosis: There was a time after W.W. II and throughout much of the twentieth century when college was affordably priced and there were abundant grants for deserving students.

     I just want to add a qualification: if you were white.

116. Jill: But your argument basically amounts to “Only the richest people who can afford to shell out $160,000 on the front end should have access to institutions like Duke. And also I don’t like Natalia because she has the audacity to think maybe she should be able to go to an elite school even though she wasn’t super-wealthy, and then she had the audacity to point out that student loans are exploitative, and also Privilege.” And I think that’s ridiculous, and classist., and naive to how these things actually work.

     I also want to point out that this argument basically means that if you don’t have an air-tight life plan and your parents can’t shell out $160K upfront, then you should effectively foreclose the possibilities that would be offered to you by a prestigious university with top faculty and excellent intellectual resources and support services. Choosing not to go to a top school doesn’t keep all your options open; you’re just restricted by things that are not debt.

117. I’m amazed at how autonomous some of you were in your higher education choices. Maybe I was the only one who had strict, first-generation immigrant parents with ridiculously high expectations of where I went to school?

     I was not autonomous in my choices either, I just had strict parents with ridiculously high expectations of me not getting into debt before I can grasp the concept and make payments for that choice.

118. Q Grrl: Right, I agree about affordable education and accessibility. But if someone walks right past all that affordable and accessible education and walks directly, knowingly into a $160,000 price tag while simultaneously knowing what salary they might be making on the flip-side? Yeah, so not sympathetic to their financial strife.

     I’m a little irritated that you haven’t touched on my original comment Q Grrl. With your infinite wisdom, what do you propose for students who are facing outlandish prices from even public universities?

     Also, even with tuitions of “only” $10K/year, that adds up to AT LEAST $40K after 4 years which is more than Natalia ended up with. So…I’m still not sure what you’re getting at.

     Hairless Cat: I have never met a brilliant poor kid who had to choose Big Mediocre State School over Elite Private Institution because of money.

     I have met many brilliant middle class students who had to pass up the best school they got into because of money, myself humbly included. Don’t get me wrong, I went to a pretty awesome school and got a great education. But if my parents had paid what they could afford, I would have been $80K in debt at my top choice, which was a top 10 university.

119. Hm. When I was in school the big push was “consolidation,” meaning the a private institution bought your loans from the government, in exchange for giving you a lump sum reduction of the total debt/a supposedly lower (HA fucking HA) interest rate, etc. The loans then were no longer subject to things like educational deferral.

     My federal loans are administered through AES, but the government still owns the debt.

     27 Random Scribbles:
     Ihaveonlystaffordloans(federallysubsidizedinterestwhileinschool),butwewererequiredtousealendersuchasSallieMae,bankofAmerica,etc.Sothey“are”federalloans,butatleastafewyearsagotherewasnowaytoavoidhavinganon-governmentlender.

120. preying mantis: So, we’re reading a story in which someone spent 5 years paying off over 60% of their base loan and, due to predatory structuring of said loan, their creditor gets to act like they only paid off 10% of their loan.

     Jill: And if some bottom-dweller has the audacity to attend an elite university, then they never get to complain about anything ever again, even fundamentally unfair and predatory financial deals, because Privilege?

     I’m sorry, but can you guys explain the way in which the lending arrangement is predatory? Like some of the other lawyer’s up-thread, I’ve negotiated a good number of credit agreements, and the terms of her lending (and mine too for that matter) don’t strike me as “predatory.”

121. EG: Absolutely.WhenapplyingtoPhDprograms,alongrecommendationfromTopProfessoratIvyLeagueUniversityisgoingtocarryalotmorewaitthanonefromNotVeryWell-KnownProfessorataplacewhoseletterheadisn’timpressive,tosaynothingofwhatitmeanstohavewell-connectedadviserswhocanmakepersonalphonecallswhenyou’reapplyingtogradschool.

     There’snosuchthingasapublicIvy.TheIvyleagueisentirelyprivateuniversities.

     Oh,well,Iguesssinceyounevermetthem,theydon’texist.TheissueisnotwhetheranexceptionallybrilliantpoorkidcangetintoanIvy.Ifshe/he’slucky,she/hecan.Thequestionisabouttherelativelysmartbutnotnecessarilyexceptionallybrilliantpoorormiddle-classkidwhoisnotgettinghalfthechancestolearnandimprovethatthedumbestrichkidisgetting.

     Ijustwanttoaddaqualification:ifyouwerewhite.

     “Public Ivy” is a term that refers to elite public institutions offering educations equal to or better than the less prestigious Ivy League schools like Cornell, Dartmouth, et al; schools like UC Berk, Mich, UT, ULCA, et al.

122. Shoshie: I’malittleirritatedthatyouhaven’ttouchedonmyoriginalcommentQGrrl.Withyourinfinitewisdom,whatdoyouproposeforstudentswhoarefacingoutlandishpricesfromevenpublicuniversities?

     Also,evenwithtuitionsof“only”$10K/year,thataddsuptoATLEAST$40Kafter4yearswhichismorethanNataliaendedupwith.So…I’mstillnotsurewhatyou’regettingat.

     Ihavemetmanybrilliantmiddleclassstudentswhohadtopassupthebestschooltheygotintobecauseofmoney,myselfhumblyincluded.Don’tgetmewrong,Iwenttoaprettyawesomeschoolandgotagreateducation.Butifmyparentshadpaidwhattheycouldafford,Iwouldhavebeen$80Kindebtatmytopchoice,whichwasatop10university.

     Agreed, the middle class get royally screwed when it comes to higher ed.

123. You know….fuck that. I was one of those “brilliant poor kids.” (gag) There would have been no way in hell I was going to ANY university without help. I DID have to choose between the two; the big state school just offered me a full scholarship. Going to the Ivy was harder, but it has arguably paid off in networking and class connection that someone from my background *would not have had,* otherwise

     Regardless, I agree that top tier universities use their model handful of lower income students as red herrings to distract from the fact that a for a huge swath of the population, their school is out of reach. I don’t see any reason to therefore decide the problem is with lower income students, and not the system itself.

     Hairless Cat:
     I’mgoingtopointoutsomethingobvious:

     Goodeducationsarenotaluxuryfortherich.PrestigiousstateschoolsandpublicIviesbendoverbackwardstomakesurequalifiedlow-incomestudentscanaffordtoattend.IhavenevermetabrilliantpoorkidwhohadtochooseBigMediocreStateSchooloverElitePrivateInstitutionbecauseofmoney.Ifyouhavethebrainstogetin,anyonecangotoagreatschool.

124. @Q Grrl

     People understand the concept of debt when they talk to loan sharks. Doesn’t mean that loan sharking isn’t immoral, inethical, or isn’t preying on the weak, vulnerable, and desperate.

125. I don’t give a flying fuck what for or why someone borrowed 37,000 dollars. (Although I would argue that education is one of the most legitimate reasons since it is an investment that increases in value.) THERE IS NO REASON WHY A PERSON WHO HAS PAID $23,500 ON THAT LOAN SHOULD STILL OWE $36,000. It should be ILLEGAL for a bank or any other entity to get away with that. End of story. It absolutely sickens me the number of people who are advocating the rights of a profit-making machine over the rights of an individual human person. There but for the grace of God go you.

126. STILL ignoring the structural issues. Duke needs a demand for its supply — not just enough people who can pay the tuition to fill the class, but so many that they can turn many away to be selective and keep the incoming scores high. The number of people who can do that at any given price point is dependent on how much capital is allocated, and by making loans available without risk to borrowers, we’ve inflated the point at which Duke (and other schools) can price a degree and still fill a class with the same caliber of student. It’s a societal choice about the allocation of resources.

     Would people really rather argue “Natalia, victim or deadbeat?” instead of talk about how education is financed and what the better way would look like? Because when I want to sit around being all judgey, I watch Dance Moms. Just sayin’.

127. Q Grrl: Right, I agree about affordable education and accessibility. But if someone walks right past all that affordable and accessible education and walks directly, knowingly into a $160,000 price tag while simultaneously knowing what salary they might be making on the flip-side? Yeah, so not sympathetic to their financial strife.

     You’re arguing for a two-tiered educational system, which will have the effect of concentrating wealth and privilege even more than it does now.

     There’s a reason people want to get into schools like Harvard and Duke, even if they have to borrow to do it. It’s because those schools have a cachet, and yes, it does make a difference where you went to school. Only a handful of public universities have nearly the cachet that the Ivies do, and that cachet greases the wheels for things like internships, which lead to jobs. You also meet people who can help you out — because of course, it’s all about who you know.

     I used to know a guy who taught economics at UMass in Amherst. He was a bit of a Marxist. He used to march his 101 class over to the quad at one of the nearby exclusive private colleges on the first day of classes and sit them down. He wouldn’t say anything. Finally, one of his students would ask him what they were doing there, and he’d sweep his arm around at the private-college students playing hackey sack and say, “Here’s your first lesson in economics: these will be your bosses one day.” Then they’d go back to the classroom.

128. Tina: I don’t give a flying fuck what for or why someone borrowed 37,000 dollars. (Although I would argue that education is one of the most legitimate reasons since it is an investment that increases in value.) THERE IS NO REASON WHY A PERSON WHO HAS PAID $23,500 ON THAT LOAN SHOULD STILL OWE $36,000. It should be ILLEGAL for a bank or any other entity to get away with that. End of story. It absolutely sickens me the number of people who are advocating the rights of a profit-making machine over the rights of an individual human person. There but for the grace of God go you.

     I ran the numbers using very rough terms up-thread. Based on those assumptions, it’s not really unreasonable.

     Ryan: She took out $37K for the degree, then deferred payments during which time $9K of interest accrued and was capitalized. She starts making payments on her now roughly $46K of debt at let’s say 10%. If she pays $5K per year then five years later she’ll have paid $25K split roughly $23K to interest and $2K to principal. That’s how her balance is still so high.

129. @Ryan

     One word: adhesion.

     Sometimes I think the law and econ crew has poisoned the entire freaking legal field. Does no one remember equitable principles any more? Courts are supposed to balance equities and power imbalances.

     ::grumble:: fiduciary ::grumble:: Easterbrook ::grumble:: unconscionability ::grumble:: Posner ::grumble::

130. My dad, who I disagree with on a lot of things but agree with on this, said once that ‘A degree used to be something you got in order to get ahead, now it’s something you need in order to keep up’.

     Frankly, I think he’s being generous there, as it implies that a degree will help you keep up, but I agree with the general sentiment. An ‘education’ has become necessary for survival, or for any hope of improvement on one’s lot in life

     As such, a good education should NOT be only something for the wealthy who can afford it.. and if someone is qualified enough to get into a high-brow school, they should not be hindered by their financial status.

     IMO, people who say ‘well why did you take out a huge loan if you weren’t going to pay it’ are on par with people who tell single mothers ‘well why did you have a kid with a guy who wasn’t going to stick around?’

     Umm.. Circumstances are unforseen? We usually do figure that we’ll be able to pay, because a degree is supposed to help you get a well-paying job?

131. Anonymous Coward: It’s disheartening to see such enthusiastic water-carrying for creditors who have managed to stack the deck in their favor *and* convince people that there’s some virtue attached to repaying usurious fees and interest.

     alessa: Your comment is victim-blaming, when in reality the fact that hundreds of thousands of students being in the same situation clearly shows that the system is rigged this way. This is a business to prey on young naive kids in college, and it’s working perfectly.
     Something needs to change.

     This and this, and everything Thomas MacAulay Millar said about the bubble of financing.

     Haven’t all the big players in the student loan business been bailed out by taxpayer money at this point? Didn’t they know it would be tough in the industry? Remember, corporations are people too. I say they should have thought these things through and looked at the numbers before they got into it and signed the papers. No one forced them.

132. Hairless Cat: “Public Ivy” is a term that refers to elite public institutions offering educations equal to or better than the less prestigious Ivy League schools like Cornell, Dartmouth, et al; schools like UC Berk, Mich, UT, ULCA, et al.

     Those schools are vastly different than what goes down at the Ivies. UC-Berkeley, UMichigan, UCLA, are massive schools in which it is very easy to get lost in the shuffle. They’re excellent schools, and they have excellent faculty, but they do not offer anything like the attention/resources you get from going to, I don’t know, Harvard. It’s not the same dynamic at all. And for all those fantastic public state schools, if you’re not actually a resident of the state, you can easily rack up quite a lot of debt attending them. Right now, for instance, the cost per year for a non-Californian to attend Berkeley is almost $20K per year. Yes, that’s less for Harvard, but it’s hardly affordable, and you might as well be hanged for a sheep as for a lamb.

     Private schools like Dartmouth, Sarah Lawrence, they can and do offer that kind of experience, and they cost a shitload of money. You can come out of them with just as much debt as you can any other private school. I believe that NYU is one of biggest debt-producers. Dartmouth is costing 55K a year right now. And yes, they have financial aid. It was my experience, though, in college, that “demonstrated need” according to the financial aid office is a very different thing than “what you can really afford to pay.”

     For instance, when I was applying for financial aid, one of the resources that was factored in to my parents’ assets was the money they and my grandparents were saving/investing for my younger sister’s future education, that they had begun building up since my mother found out she was pregnant again. Even though it was under her name, with the custodial care assigned to my father, it was treated as though it was money my parents could spend on my education, if they so chose. This is one of the reasons I had to take out loans. And while I understand that my family’s ability to put money away and invest it for my sister’s future indicates that we were very fortunate compared to the majority of people, and I appreciate it, and I also understand that they have to do it that way so that the very wealthy can’t weasel out of their financial obligations by putting the bulk of the family wealth in the name of some underage kid, administering it, and then taking it back once the older kid is finished with college, the fact is that that money was not available to me.

133. Kristen J.: Sometimes I think the law and econ crew has poisoned the entire freaking legal field. Does no one remember equitable principles any more? Courts are supposed to balance equities and power imbalances.

     Yes! My contracts class was all law and econ all the time. I thought my eyeballs were going to explode from rage every class.

134. Ryan: I ran the numbers using very rough terms up-thread. Based on those assumptions, it’s not really unreasonable.

     I think you have misunderstood what she means by “unreasonable”.

135. EG: I just want to add a qualification: if you were white.

     Also Christian.

136. EG: Right now, for instance, the cost per year for a non-Californian to attend Berkeley is almost $20K per year. Yes, that’s less for Harvard, but it’s hardly affordable, and you might as well be hanged for a sheep as for a lamb.

     No, it’s higher than that. Tuition, fees, etc. for a resident is over $31K if you’re on campus, $22K if you live at home. Non residents pay over $22K more in tuition. http://students.berkeley.edu/admissions/general.asp?id=26

137. @ Kristen
     I understand she didn’t have any market power to negotiate the agreement (and I’m not necessarily a law & econ baby-posner). But I’m still having trouble seeing what the term of the credit agreement that renders it fundamentally unfair and predatory is, and it’s bugging me because I’ve had occasion to negotiate agreements where we were the party with all the leverage.

     Her rate isn’t usurious (based on credit markets a decade ago), her repayments terms allowed flexibility on the payment schedule, etc…

138. “I’m going to point out something obvious:

     Good educations are not a luxury for the rich. Prestigious state schools and public Ivies bend over backwards to make sure qualified low-income students can afford to attend. I have never met a brilliant poor kid who had to choose Big Mediocre State School over Elite Private Institution because of money. If you have the brains to get in, anyone can go to a great school.”

     I disagree that it’s that easy. I have a different perspective on this as well, that might contribute to the discussion further.
     I go to a fancy-pants, expensive art school. It’s a very famous institution, and generally regarded as “the harvard” of art schools. One thing I find interesting about most trade schools, like culinary, music, or art ones, is that they are all stupid expensive, and hand out little to no financial aid, especially in comparison to other colleges.

     Contrary to popular belief, success in these fields is almost always precluded by a degree in them from an expensive school like mine. You hear about artists who make it with no schooling because they’re remarkable and rare. By far though, pretty much no artist makes it in the art world without schooling. You need the in-depth education, and the network available. All in addition to a kick-ass work ethic, of course.
     I find this all interesting because these trade schools are almost off-limits to people without the means to pay. I know tons of people who are struggling by on their loans, only because this is what they love and they can’t imagine doing anything else. It’s difficult though, because ultimately the people who truly find success in these fields are the ones who are not bogged down by enormous amounts of debt and can dedicate time to their craft.

     The whole point of what I’m saying is that all of this debt is classist, and causing serious divides in who will be part of the “working class” and who will rise above that. More than anything, I align with the Occupy movement in stating that education should be as free as air and water.

139. Which really only strengthens your argument, EG! Because it’s not like taht extra tuition goes to having extra advisors or counselors available to students. So you’re out $57K for your first year of college, and still potentially getting lost in the shuffle. Many students can qualify for in state tuition after a year at a UC, but in that year tuition might go up another several thousand dollars or more, so you might still end up paying higher tuition than you expected going in.

140. zuzu: He used to march his 101 class over to the quad at one of the nearby exclusive private colleges on the first day of classes and sit them down. He wouldn’t say anything. Finally, one of his students would ask him what they were doing there, and he’d sweep his arm around at the private-college students playing hackey sack and say, “Here’s your first lesson in economics: these will be your bosses one day.” Then they’d go back to the classroom.

     Yes. Sometimes I tell my students to take the subway up to Columbia someday when they have the time in order to get a look at exactly what they’re being deprived of.

     alessa: Your comment is victim-blaming, when in reality the fact that hundreds of thousands of students being in the same situation clearly shows that the system is rigged this way. This is a business to prey on young naive kids in college, and it’s working perfectly.

     I could not agree more. The idea that it’s all the students’ fault somehow implies that young people just got a whole lot stupider in the past few decades than they ever had been before. That seems highly unlikely to me. The facts are these: a college degree has become a necessity to break into the white-collar sector and some of the blue-collar jobs as well; more prestigious, expensive schools do make a difference in your future chances and do have better scholarly resources and support services; the cost of a higher education has become completely outrageous; most fully mature adults do not understand the financial shenanigans in the papers they sign, let alone 18-year-olds; there is an entire industry of professionals who have dedicated their careers to making those shenanigans as opaque as possible so that they can get away with as much as possible.

     A high-school senior is supposed to believe that the first two aren’t true, and is supposed to be so financially savvy as to understand and outwit professional financiers? Does that sound at all reasonable?

141. Thomas MacAulay Millar: Would people really rather argue “Natalia, victim or deadbeat?” instead of talk about how education is financed and what the better way would look like? Because when I want to sit around being all judgey, I watch Dance Moms. Just sayin’.

     It’s more fun to argue about whether or not it’s OK for me to be angry about my situation… then to talk about the situation in general. Which sucks. And is scary.

     So far, five of the people who have gotten in touch with me about their student debt problems are saying they’re thinking of suicide.

     I’ve got people showing up on my blog telling me that my son should be taken away from me.

     It’s the power of that credit rating! We think it stands for goodness, nowadays. And that’s all kinds of screwed up. For a start.

142. @Ryan,

     When you can’t negotiate, that is itself predatory and subject to principles of fairness. Inability to discharge under any circumstances, how interest accrues during hardship periods, the level of servicing fees and the level of penalties make these loans unconscionable when the individual debtor is insolvent.

143. And just…everything EG has said. As I said, I go to grad school at a big public university, and a very good one at that. The undergraduates get a good education here, but it’s very different than the one I received as an undergraduate. Majors are competitive here. So is working in a research lab. When I wanted to major in chemistry at my undergrad, I didn’t need to apply, I just checked a box. Here, many classes are restricted to people in certain majors and tracks. That wasn’t the case at my undergrad (though, obviously, many classes had pre-reqs). At my undergrad school, all chemistry majors did research for at least 1 year, usually 2. Here, only the best students get into research labs and it’s certainly not expected that students participate in research. Doing undergraduate research is also pretty much the only way to pursue a high powered career in chemistry, because it’s necessary to get into graduate school.

     And, when they did the financial aid calculations for me, they took my parents home value into account. Yes, my family was/is privileged enough that they were able to own their house. But my parents were not going to take out a home equity loan so that I could go to Harvard. As EG said, that money just wasn’t available to me, even though they counted it towards the amount my family could pay. It’s just not a simple or easy situation.

144. @Natalia,

     A few months ago Elie over at Above the Law came out as well and since the commentariat over there perhaps the worst on Earth he was skewered. So you aren’t alone.

145. I paid for my in-state college education with loans because that’s what teen moms are supposed to do to keep off the dole, and because my parents wouldn’t help me pay tuition since hardship was supposed to be hard for teen parents. Today I’m $50,000 in debt, which is $12,000 higher than when I graduated. I’m quitting. I have no more plans to pay it back because I have no means to pay it back.

     So I got a college degree and after a few years, I finally scored a reasonable middle-class job. I have no other debt, I live below my means, and I’m still unable to pay more than the minimum on my loans. Why? Because Sallie Mae encouraged me to go with income-based repayment plan that will increase over the course of thirty (count ’em) years. I am ineligible for consolidation of my loans, and I am ineligible to renegotiate my interest rates. If I continue to pay as I have for the last six years, by the time these loans are paid in full I will have paid $80,000 for my in-state undergraduate degree.

     What Natalia gets at in her original essay, which I encourage people to read instead of knee-jerking around the issue of individual privilege, is how universities and lenders ask you to bet on your optimism and potential when you decide how to design your education and finances. You go in bright-eyed and bushy-tailed, convinced that this degree is your golden ticket to success, and you are encouraged to bet on your ability to secure a good job and a good salary, and no one (unless you’re lucky like Q Grrl) advises you to be conservative about your future plans, or imagine that you’ll put in all this time, effort, and money, with potentially little to no payoff. After all, the sky is the limit.

146. I’m not a math person but here’s how the math on the loan looks to me:

     3/5ths of the amount of money loaned has been paid to the holder of the debt.
     9/10ths of the amount of money loaned is STILL OWED to the holder of the debt.

     I know loans are complicated and that time is money (aka interest) but looking at the loan in such simplified terms makes it seem like there is something unfair with how the loan is structured. Either the loan isn’t fair, or it needs to be explained in similarly simple terms how it is fair.

147. Ryan: But I’m still having trouble seeing what the term of the credit agreement that renders it fundamentally unfair and predatory is

     It’s non-dischargeable.

148. Lauren: What Natalia gets at in her original essay, which I encourage people to read instead of knee-jerking around the issue of individual privilege, is how universities and lenders ask you to bet on your optimism and potential when you decide how to design your education and finances. You go in bright-eyed and bushy-tailed, convinced that this degree is your golden ticket to success, and you are encouraged to bet on your ability to secure a good job and a good salary, and no one (unless you’re lucky like Q Grrl) advises you to be conservative about your future plans, or imagine that you’ll put in all this time, effort, and money, with potentially little to no payoff. After all, the sky is the limit.

     This.

     Also, I don’t see why it’s such a terrible thing to suggest that higher education is something that should be made accessible to everyone–and by “accessible” I don’t mean “made available through the magic of predatory lending.”

149. Also, didn’t the economy fall off a cliff about three years ago? And isn’t the job market across the country completely fucked? Is the worst job market in generations forseeable, and is it something young people can correct for?

150. To everyone who says that Duke University was “too expensive” for Natalia and she should have gone somewhere else, I have a question: Should elite colleges be reserved for the rich? Because the last time I checked, it’s not easy to get admitted to Duke. If Natalia did well enough to get in, she should have been able to attend without becoming a debt slave

     The reality is that college is a privilege in the US, dictated by the price tag. I’m not telling you how it should be, but how it is. So yes, when you’re looking to spend 200k and you don’t have 200k, you should know you’re gonna have to take loans.

     10 years ago, I chose to go the NC State over Duke (NC State is 30 mins from Duke) because the numbers didn’t make sense to me. It’s ridiculous to pay 40k/year for *any* degree. You don’t need to be over 17 to do the math.

     Also, if you guys want more affordable “elite” education, think about paying more taxes so that your public universities improve and stop raising tuition on you. I know I am. The reason Duke can charge that price is because there is a market for it. When top public institutions start lowering their tuition prices, it will have an impact on how much private universities can charge.

     1. The reality is that college is a privilege in the US, dictated by the price tag. I’m not telling you how it should be, but how it is. So yes, when you’re looking to spend 200k and you don’t have 200k, you should know you’re gonna have to take loans.

        Well obviously. And Natalia was aware that she was taking out loans. I don’t think that’s in dispute? She didn’t wake up one day and was like, “Wait, I took out loans AND NOW I HAVE LOANS?!”

151. Duke needs a demand for its supply — not just enough people who can pay the tuition to fill the class, but so many that they can turn many away to be selective and keep the incoming scores high. The number of people who can do that at any given price point is dependent on how much capital is allocated, and by making loans available without risk to borrowers, we’ve inflated the point at which Duke (and other schools) can price a degree and still fill a class with the same caliber of student.

     Yes, part of the reason schools like Duke are able to charge so much is that student loans are so widely available, which maintains a large pool of applicants who can pay. Another factor to consider is that the pool of people willing to pay tuition at a place like Duke is also affected by the number of equivalent low-cost alternatives to attending Duke. Jill earlier mentioned that NYU was much more prestigious that the University of Washington. That means that the U.W., while low-cost, is not “equivalent” to NYU. Now, if public universities were adequately funded, and were able to attract top notch faculties, they would then be able to offer an equivalent alternative to pricey private schools, which would put downward pressure on tuition at places like Duke.

152. (How the fuck is a government-guaranteed loan not dischargeable by bankruptcy?)

     You’ve answered your own question

153. To anyone arguing that this is somehow Natalia’s fault for choosing to go to a prestigious university:

     I did my undergrad at the University of Toronto, which is ranked higher than Duke on the Times Higher Educational Supplement world university rankings, and paid $5 500 Canadian per year. This meant that, with part-time work during the year and full-time in the summer, scholarships, the savings that my parents and I had put aside through the years and about $1000/yr from my parents, I was able to graduate debt-free. I was lucky that my parents were able to put some money aside, and also that they REALLY prioritised education over just about anything else (we were middle-class, but a financially precarious middle-class).

     The cost of education in the US is absolutely ridiculous and defies all basic principles of social justice and access to education for all. And the Sallie Mae system is pure usury and should be illegal.

154. Kristen J.: When you can’t negotiate, that is itself predatory and subject to principles of fairness. Inability to discharge under any circumstances, how interest accrues during hardship periods, the level of servicing fees and the level of penalties make these loans unconscionable when the individual debtor is insolvent.

     I can see a number of those, but I still have a hard time figuring out how you could get around the discharge issue without either causing the credit to vanish or driving up rates. Maybe if you could discharge the debts, but only if you relinquish the asset (the degree)? Maybe that in conjunction with being able to refinance your loans when rates decrease would be enough to give debtors the breathing room they need to either be able to afford their payments in tough times or to permanently get out from under the debt if it was truly unsustainable (but in a way that would prevent mass-BKs by recent grads)?
     I’ve got tremendous sympathy for the debtors as victims, and it’s not that I think the lenders are angels, but I’m just not sure that it’s fair to cast them as the villains with this problem. I also have a hard time trying to see viable solutions to the problem from the financing side. It seems to me like the colleges and their pricing are the most culpable, especially sitting on the endowments that they are.

155. Ryan, most lenders get a return on their investment for risk, especially the risk that the principal will be lost. Loans with really, really low risk of nonpayment also earn really tiny yields — currently, treasuries can yield negative real rates of return factoring in transaction costs.

     Student loans are guaranteed, so the originators bear no risk and have an incentive to get any available borrower to borrow, without regard to their ability to repay. But the loans are also non-dischargeable, unlike mortgage debt, so we have a situation where originators are incentivized to lend to every person they can, and the borrowers cannot get out of the debt even if they suffer calamitous personal reversals. That’s not really a situation we countenance anywhere else in the economy.

     Kristen J, and the lawyers: so I just walked in to A&P and there was a big sign that said, “by crossing this line you have agreed to arbitrate all disputes.” Not really, but maybe by next week. Courthouses are for corporations, proles!

156. Gah. And just reading all these comments is so upsetting.

     I am genuinly pissed off at the older generations. What the fuck have you set us up for? Our degrees saddle us with small mortgages of debt, there are no jobs to be found even after spending upwards of $40,000 to get them, our deficit has also saddled us each with an additional $50,000 in debt, our environment is going to shit, and credit companies are just trying to find more and more ways to exploit us, as if we need more. Seriously guys, this is bullshit.

     I propose that the younger generations give the finger to the older ones for fucking us over and start our own country. No more money, or something. Huzzah.

157. Ryan: I can see a number of those, but I still have a hard time figuring out how you could get around the discharge issue without either causing the credit to vanish or driving up rates. Maybe if you could discharge the debts, but only if you relinquish the asset (the degree)? Maybe that in conjunction with being able to refinance your loans when rates decrease would be enough to give debtors the breathing room they need to either be able to afford their payments in tough times or to permanently get out from under the debt if it was truly unsustainable (but in a way that would prevent mass-BKs by recent grads)?

     Student loans need to fall under bankruptcy terms, even if that means bulking up bankruptcy penalties in order to forgive part or all of the student loan debt. There is absolutely no reason that student debt is treated differently than medical, mortgage, or credit card debt.

     Student loans should operate under a low, fixed interest rate for all parties all the time.

     Repayment plans should be negotiable — especially when someone is asking to ease repayment plans because they want to pay, but whose current plan is prohibitive due to permanent or temporary economic hardship.

     Deferment should be accessible to people on a temporary basis without the current terms which basically dictate that you and your family be living under the poverty level.

158. nc person: Also, if you guys want more affordable “elite” education, think about paying more taxes so that your public universities improve and stop raising tuition on you. I know I am.

     Oh snap! I think I’ll just include an extra $50 in my taxes this year. Thanks for the pro tip!

     Thomas MacAulay Millar: Kristen J, and the lawyers: so I just walked in to A&P and there was a big sign that said, “by crossing this line you have agreed to arbitrate all disputes.” Not really, but maybe by next week. Courthouses are for corporations, proles!

     I had a split second where I totally believed this (of course, followed by reading the next sentence). Dare to dream.

159. Thomas MacAulay Millar: But the loans are also non-dischargeable, unlike mortgage debt, so we have a situation where originators are incentivized to lend to every person they can, and the borrowers cannot get out of the debt even if they suffer calamitous personal reversals.

     I understand that, and you’re absolutely right that they price their investment based on it’s riskiness. What I’m asking is how do you address this issue, which is going to increase the riskiness of an an investment that already has a 7% default rate in the first two years, in a way that doesn’t give borrowers a strong financial incentive to declare a BK immediately upon graduating or drive the rate charged on these loans through the roof? I don’t think people are confronting the practical hurdles this issue presents.

160. Natalia: So far, five of the people who have gotten in touch with me about their student debt problems are saying they’re thinking of suicide.

     I’ve got people showing up on my blog telling me that my son should be taken away from me.

     I am so sorry.

     I hope you don’t need to hear it, but you’re doing the right thing by putting yourself and your family first, and you’re doing a service to yourself and others by talking about this, even when people respond horribly or would rather talk “Natalia: victim or deadbeat” then focus on the real issue here. The more people talk publicly about the predation of the industry the better.

     Sheelzebub: Also, I don’t see why it’s such a terrible thing to suggest that higher education is something that should be made accessible to everyone”

     Because it means you’re a socialist out to destroy the American way, obviously. I bet you want everyone to have health care too, even the sick and expensive people.

161. Oh snap! I think I’ll just include an extra $50 in my taxes this year. Thanks for the pro tip!

     You’re welcome. You’ll probably need to send more though. Chances are you’re living in a state that has been cutting education funding for the last 5 years and/or a governor that keeps promising more education spending.

162. nc person: 10 years ago, I chose to go the NC State over Duke (NC State is 30 mins from Duke) because the numbers didn’t make sense to me. It’s ridiculous to pay 40k/year for *any* degree. You don’t need to be over 17 to do the math.

     Yes, it is outrageous that teenagers with different temperaments, goals, hopes, and backgrounds from you could come to a different conclusion. And it’s not like any teenagers ever aren’t quite as level-headed or future-oriented as fully mature adults. Also, if a teenager make a decision that you wouldn’t have made, he/she deserves to be punished with penury for the rest of his/her life. That’ll teach that uppity prole to know her place.

     What you’re saying is that instead of getting pissed off about and fighting systemic institutionalized inequities, we need to put her heads down and accept them like good little peasants. Why, precisely? Whom does that benefit, exactly?

     nc person: Also, if you guys want more affordable “elite” education, think about paying more taxes so that your public universities improve and stop raising tuition on you.

     I’d be fucking thrilled to pay more taxes if those taxes were going to education and health care.

     Miguel Bloomfontosis: Now, if public universities were adequately funded, and were able to attract top notch faculties, they would then be able to offer an equivalent alternative to pricey private schools, which would put downward pressure on tuition at places like Duke.

     Indeed. But instead, Andrew Cuomo wants to break the power of my union, so he can keep my salary lower and increase my workload, which will drive top faculty away from public institutions and increase the value of elite private education. This is intimately bound up with the attack on public-sector unions. Faculty who are unionized are faculty at public universities; because public universities don’t have the massive resources of private schools, unionization is the only thing that keeps those public universities competitive for faculty. When the Wisconsin governor destroys the power of the public universities, one of the things he’s attacking is public education. UWisconsin-Madison is an excellent public university. But it won’t stay that way if faculty won’t teach there.

163. Wow, what a frakking nightmare. Sallie Mae serviced my grad school loan, and I had a completely different experience. I borrowed $28,500 (all tuition and fees, I was lucky enough to live at home rent-free during grad school). My loan counselor advised me to pay off the interest I had accrued while I was in school (about $2000). There went my meager salary from a retail job, but I did it so I would start with just the principal. After that, I paid about $400-$500 a month for the next seven years. My interest varied between 6 percent and 8 percent (and because I’d gotten it through the government, was supposed to cap at 10 percent). Seven years in, I had paid off about 2/3. Luckily, my circumstances at that point enabled me to pay the rest in two lump sums. All told, the plan cost me about $37,000.
     Mind you, this all took place in the late ’90s-mid-2000s. Sounds like things have gone to crap since. I can’t say I ever loved Sallie Mae, but I didn’t realize she was this bad. I hope Natalia gets away from her.

164. alessa: I propose that the younger generations give the finger to the older ones for fucking us over and start our own country. No more money, or something.

     Older people in this country are significantly fucked as well, unless they happen to be rich.

     And I meant to write that when the Wisconsin governor destroys the power of the public unions, one of the things he’s attacking is public higher education.

165. @Lauren

     That sounds like an awesome way to finance our higher education system, especially given the public-private split we have with our universities. But it would have to be the government that stepped in to issue all of these loans, because no private lender is going to extend credit on those terms. I think that’s definitely a discussion we should be having though. The one big thing I think we’re all in agreement on is that the current system is deeply unfair to aspiring students and struggling grads.

166. A couple of points in this discussion:

     In California, I do not know about other states, there is no longer a guarantee that community colleges or low-tier public schools will be graduate-able. Due to budget cutting and its effect on course selection, it is now impossible at many low-end public schools for students to graduate in less than 6 years, and I know a whole bunch of 7-year seniors (and they are not 7-year by choice). Community college is a dead end unless you are certain that you will be going to a good enough school (where you can actually get all of your courses) and you will be high-achieving enough to succeed and transfer. In either case you, the student who needed to attend one of these schools because you could afford no other option, are now stuck paying for more years of tuition (and sometimes food/housing depending on circumstances). It can also screw up your employment prospects since you can either focus on school and remain out of the job market for those years, or work as you normally would at that point, but only part-time. This is assuming you can even find a job in California, some of the Cal States are in areas with higher-than-average unemployment (San Bernardino for instance).

     So yeah, those costs are still going to accrue unless you are on full-ride which simply does not happen for the vast majority of students at public institutions that have long since gutted their financial aid departments.

     Finally, classes at these schools really are of much poorer quality than those at a private school like Duke. Class sizes at most California public universities are huge and often times you never even meet the professors. In addition, very talented professors also do not tend to remain at the public universities when the private universities can pay them so much more in salary. Teaching effective essay/writing skills in such an environment is difficult to impossible since there is no time and not enough staff to effectively grade papers. So, at a default, you are coming out of these schools with one less important life skill and very little personal guidance. These schools are still fine if you are in a technical discipline, but even then you are going to suffer relative to someone who had more resources and opportunities in their education relative to yours (funding for labs is also always a go-to cut at a school that can no longer afford to have as many classes).

     So yeah, I can see how for some smart low-income students a private school with most of its tuition subsidized through scholarships can seem like a far better option than a public school with none of its tuition paid for. Especially since the higher-level public schools are now charging tuition that is outrageous. There is no way to escape from this system if you want a functional, employment-engendering, degree. Either way you come out with a certain amount of debt, and in one case you come out with much better job prospects.

     Full disclosure: I went the half/half route to avoid paying for two years of the private university tuition where I currently am attending. Many of my fellow transfers are struggling with the increased work-load and challenges of a competitive private college, some will not graduate. I survived because my high school education was so great, but I can recognize that is not something most people have access to.

167. Ryan: But it would have to be the government that stepped in to issue all of these loans, because no private lender is going to extend credit on those terms.

     Yep. And I’d be a-okay with that.

168. Ryan, there are a lot of options between nondischargability and “bankruptcy on demand without apology,” which nobody advocates. As to the 7% default rate, if those people can’t pay back the loans the incentives should be for the borrowers to have factored that in for most of them and not leant, right? There is no way to make loan financing nearly universally available and also to force universities to reprice degrees; we need banks to eat the risk on nonpayment, we need loan requirements to be tighter, and we need to stop thinking that loans are a way for people who have a hard time affording higher education to access it. The proper tools for lower income folks to get degrees are work-study and grants, and subsidized loans from the government that are need-based and do not satisfy a business case on strictly financial ROI. Loans should be a cash management tool for people who basically can afford the degree with the use of borrowed money to smooth out the cash stream, not a tool for people to bet on their future earnings.

     But, you know, this can’t exist in a vaccuum. I’m a mixed-economy proponent and I think we need cap gains taxed as ordinary income, etc.

169. EG: Olderpeopleinthiscountryaresignificantlyfuckedaswell,unlesstheyhappentoberich.AndImeanttowritethatwhentheWisconsingovernordestroysthepowerofthepublicunions,oneofthethingshe’sattackingispublichighereducation.

     Meh, I’m not actually serious. Well, serious about anger, but not about any of that other stuff

170. Lauren: Yep. And I’d be a-okay with that.

     Me too! 🙂
     @Thomas
     I agree, but I do worry about being cavalier about the effect of private lenders tightening lending standards. Would it be okay for them to condition your loans on maintaining a certain GPA? Or keeping a certain major? What happens when you declare as a sociology major after sophomore year and they refuse to fund the rest of your studies?
     The further we’ve gotten in this conversation the more I’m left feeling like private credit markets just aren’t, as a structural matter, a viable way to finance higher ed. I think transitioning to something resembling Lauren’s plan would be ideal. And if we could also devise some transition assistance to help out everyone in Natalia, Lauren, et al’s position, even better still.

171. Ryan: I can see a number of those, but I still have a hard time figuring out how you could get around the discharge issue without either causing the credit to vanish or driving up rates.

     Simple: The government caps the amount it will guarantee, which means that schools can either lower their tuition or they can keep it high and get fewer takers. And in the meantime, students will still have to borrow, but they won’t be on the hook for such an exorbitant amount of money.

     By the way, anyone pulling out the finger of shame because Natalia didn’t go to NC State: not everyone can go to such an institution, either, without federal loans. It would behoove everyone to remember that the pepper-spraying cop at UC Davis wasn’t spraying Occupy protesters; he was spraying students who were protesting yet another jump in tuition rates at their public university. Here’s a link showing not only how much the current tuition is ($15K for in-state students for undergrad and grad, and $35K for professional schools; $38K/$30K/$46K for out of state), but there’s also a chart which shows how much tuition has gone up since 1997-98. That’s 250% in just 15 years.

     Sure, it’s easy to say “just pay more in taxes!” but FFS, THAT’S KIND OF THE WHOLE PROBLEM. California has a jacked-up Constitution due to the referendum amendment process, and any tax increase requires a supermajority. Do you think the legislature can ever get a supermajority with the prevailing anti-tax sentiment of the Republicans? And while California may be unique in that it’s a constitutional problem, most other states have serious problems with their state budgets due to anti-tax crusaders.

     Finally, where you go to college makes a big difference in terms of your geographic mobility; if you go to a nationally-known school, you get past the whole verification process anywhere you go. If you go to a regional or local school, your best chance at work is in the area, and if you want to go elsewhere, you better hope your school has a nationally-known sports team so that people elsewhere have at least heard of it.

172. I would also point out that this kind of lending drives people away from careers that are not oriented to making money hand over fist. We need social workers; we need public school teachers; we need public-interest lawyers. But people cannot make enough money to make student-loan payments in those professions, so they are not able to go into them, even if they wanted to.

173. I’ll jump on the “let’s refute Q Grrl” bandwagon here, on a point that I think got looked over.

     You’re saying she had all the power, and all the decision-making capability, and then she signed it away on a loan she shouldn’t have taken. Let’s pretend that the last part is true. Whether or not it is, is moot. It’s your understand of her power dynamics here.

     “She has all the power.” No. This is false. Do you understand the kind of pressure that the American culture puts on kids to go to Super Amazing Colleges? Given the choice between Joe State University and Caltech, which one do you think parents are going to be more proud of? Colleagues? Teachers? So on? Authority figures in America want OMG SUCCESS and OMG ACHIEVEMENT, and they want it at any cost.

     I went to a back-breaking university where I got little sleep and came out depressed and looking like a zombie. I graduated. That degree has gotten me really far. I would probably never do that ever again, were I given the chance.

     Did she have a choice to go to Duke? Technically, yes. Does society give her a hard kick in the ass towards the Shiny Luxury Important School? Oh, hell yes. Just like dropouts are looked down on, can you imagine the shame people receive when they say they decided to go to a random state or community school instead of the Super High Education type place?

     The point here is, teenagers A) do not think rationally, with a few exceptions, and maybe you are one of them, B) society puts a lot of pressure on kids to try to be overachievers and work their asses off and be Better Than Everyone Else, and C) by their powers combined, the kid is haring off to a school they don’t want or can’t afford, for the sake of the Mythical Panacea that is the Good College Degree. Hell, I know MIT students who can’t get jobs nowadays…but that doesn’t mean society isn’t promising them jobs if they go to the most bone-crushing or expensive schools. Society just says afterward, “Whoops, that was a lie, have your loan debt now.”

     There is no power in misinformation and peer pressure.

174. …so we have a situation where originators are incentivized to lend to every person they can, and the borrowers cannot get out of the debt even if they suffer calamitous personal reversals.

     THIS THIS THIS.

     This why so many people are talking about amnesty for student loans. Because the system is fucked up…and currently it’s pretty much just the students – the least powerful and experienced people in this equation – who are getting fucked over.

     Yes, it’s not quite as pressing of an issue as the frightening number of children that do not have enough food (only in part because of the economic crisis) but it is part of the same dynamic that caused the financial crisis and motivates all those asshole politicians that it’s politically safe to make out like helping poor kids eat is some evil liberal plot to teach them to mooch of the system for forever.

175. zuzu: It would behoove everyone to remember that the pepper-spraying cop at UC Davis wasn’t spraying Occupy protesters; he was spraying students who were protesting yet another jump in tuition rates at their public university.

     Yes. Students at CUNY have just been hit with another jump in their tuition as well, all justified by “austerity” measures, which drives me up a fucking wall, because really? Tuition at CUNY was free during the Great Depression. It’s not that we had more money then; it’s because we made public education a priority.

176. For more shits and giggles, here are some tuition charts for my alma mater, UM Law. I attended from 1993-1995, so my out of state tuition was between 18K per year and 21K per year. In-state students now pay more than double the highest amount I paid, which is not much less than what out-of-state students pay.

177. “Is the worst job market in generations forseeable, and is it something young people can correct for?”

     Well, clearly, piny, an 18 year old college first-year should have better predicting powers regarding the worldwide economy than financial and political leaders decades older and more experienced than herself. :p

178. zuzu: If you go to a regional or local school, your best chance at work is in the area, and if you want to go elsewhere, you better hope your school has a nationally-known sports team so that people elsewhere have at least heard of it.

     Ha! No kidding.

179. For those of a more wonkish nature, Mike Konczal over at Rortybomb has a bunch of really good articles on this issue.

     From http://rortybomb.wordpress.com/2011/10/31/halloween-costumes-foreclosures-creditors-bargains-and-how-the-1-view-our-laws-on-debt/:

     This view of the world has its roots in a theory of how the rules governing debt, especially bankruptcy, should function in this country. A heuristic can be used to understand it — it’s called the creditor’s bargain. In this idea, the rules should only exist to the extent that they benefit the creditor’s ability to collect money. It’s simple: if a law, custom, norm, or rule helps creditors collect when things go wrong, it is a good one. If it takes into account concerns other than creditors’ return — say, destroyed neighborhoods, whether banks follow the rules, etc. — they are worthless.

     This seems to be the attitude a few people in this thread have; any concerns of unconscionability, failure to properly disclose rates or options like IBR and forgiveness, usurious rates, or the inability to discharge are swept aside.  Meanwhile, any failure on the part of the debtor is seen as a great moral wrong.  It’s a rather morally repugnant view, since it assigns fault to the party in a transaction who had the least ability to predict its outcome.

     There’s also some pretty good recommendations for how to fix the student loan system going forward, http://rortybomb.wordpress.com/2011/11/07/two-steps-towards-tackling-our-current-student-loan-problems/.  The big elements are adjusting the rules for bankruptcy (5 years before public student loans become dischargeable, no limitations on the discharge of private loans) and using the Fed to refinance existing loans into more manageable loans with current (near-zero) interest rates.  This avoids the moral hazard of mass loan forgiveness while not allowing banks to tear down our economy in the name of maximizing the return on their bad debts.

180. And here’s another link, comparing the cost of attending Michigan Law as an in-state resident with the median family income.

     In 1980, the tuition represented 11.7% of the median family income.
     In 1993, the tuition represented 39.9% of the median family income.
     In 2007, the tuition represented 75.8% of the median family income.

181. oh, and regarding rising costs…yeah.

     My dad retired a couple of years ago and my sister and I put together a slideshow that included facts about then (when he started which was also when the community college opened) and now (a few years ago, when he retired, even before the crisis and the more recent tuition hikes).

     The tuition was the most startling difference, for the simple fact that is was free for the first few years of the school. And pretty much pennies for decades after. In fact, not only was it free, but it was so commonly understood that it was free that this was never clearly stated in the course guides, etc. Which led to an amusing wild goose chase and quite a few humorous conversations.

182. Sure, it’s easy to say “just pay more in taxes!” but FFS, THAT’S KIND OF THE WHOLE PROBLEM. California has a jacked-up Constitution due to the referendum amendment process, and any tax increase requires a supermajority. Do you think the legislature can ever get a supermajority with the prevailing anti-tax sentiment of the Republicans? And while California may be unique in that it’s a constitutional problem, most other states have serious problems with their state budgets due to anti-tax crusaders.

     What would you propose? I don’t see how else to stop the yearly climb in tuition prices.

183. EG: It’s not that we had more money then; it’s because we made public education a priority.

     Werd.

     midnightsky: Hell, I know MIT students who can’t get jobs nowadays…but that doesn’t mean society isn’t promising them jobs if they go to the most bone-crushing or expensive schools. Society just says afterward, “Whoops, that was a lie, have your loan debt now.”

     There is no power in misinformation and peer pressure.

     Word again. They are asking us to bet our future on optimism and best-case scenarios, and if we doubled-down and lost, sure, we have out educations and no one can take that away from us, and other esoteric revolutionary crap, but the quality of our educations mean nothing if we can’t find or keep a good job, support our families, or create self-sustaining economies that stave off this kind of economic failure.

     So on a side thought that is perhaps ill-conceived, it’s ironic to me that this is a system that is set up to capitalize on what is essentially socialist dogma, the ideal that education should be available to all. I don’t know what that means (thanks to my substandard land-grant university education), but it’s bumping around my head today.

184. I would also point out that this kind of lending drives people away from careers that are not oriented to making money hand over fist. We need social workers; we need public school teachers; we need public-interest lawyers. But people cannot make enough money to make student-loan payments in those professions, so they are not able to go into them, even if they wanted to.

     For me this is another manifestation of a people that don’t want to pay taxes whether it’s for more affordable education or for better social services.

185. nc person: What would you propose? I don’t see how else to stop the yearly climb in tuition prices.

     Well, no shit taxes have to go up, but it’s not a matter of wagging your finger at people who note rising tuition and saying, “Well, pay more in taxes!”

     Or did you happen to forget that there are powerful forces resistant to the very idea of tax increases? And those powerful forces have a big influence on the people who can actually make such increases happen?

186. Let’s say, for the sake of argument, that it was 100% the borrower’s fault. Let’s stipulate that she was vain, reckless, entitled, and whatever other nasty adjectives you want to pile on. Let’s say chose to borrow that money as freely and knowingly as a hardened criminal chooses to hold up a liquor store.

     You know what? We still give that criminal a chance to pay is debt to society and eventually walk away from that terrible decision. You do your time, you walk away. There’s a statute of limitations on greed, stupidity, and malice. Why is debt forever? Why should lenders be allowed to keep the gullible or the desperate or the unlucky on the hook for the rest of their lives, long after the lender has gotten all her money back plus a healthy amount of interest. It’s inhuman.

     Natalia has been paying for 5 years and she has paid back about 63% of her principal. But she still owes a whopping 98% of the original balance, despite killing herself with payments for 5 years. That’s debt peonage. If her debt was partially forgiven, she could have some hope of paying off her debts, and her lender could still get a handsome ROI.

     I should be careful. I don’t want to give Q Grrl any ideas about debtors’ prisons.

187. I also want to add that part of what this change in tuition also does is ensure that students are working with out dated information/analysis. Even aside from the fact that no one knows what overall, long-term affect the current tuition hikes are going to have because they are new to everyone, younger adults often rely a lot on advice from parents and the like (those that are lucky enough to have them).

     Their parents are still often operating under the mindset of what it was like when they went through school.* You know, when community colleges in CA were free. Even knowing that isn’t technically what it is like now, that perception still colors what advice they give their children.

     *example: when I went to grad school and was looking at loans and getting nervous about the amount I was borrowing, just about every adult in my life – all financially solvent then and now – kept reassuring me that student loans were no big deal and easy to repay. Now, granted, they may have said something different if I had started looking at Sallie Mae and the like, but still. Even that advice was outdated, even with regards to federal loans, even a decade ago.

188. Well, no shit taxes have to go up, but it’s not a matter of wagging your finger at people who note rising tuition and saying, “Well, pay more in taxes!”

     Or did you happen to forget that there are powerful forces resistant to the very idea of tax increases? And those powerful forces have a big influence on the people who can actually make such increases happen?

     I know where I live. My question still stands, though.

189. Also, what Lindsay said. xinfinity

190. Lindsay Beyerstein: You know what? We still give that criminal a chance to pay is debt to society and eventually walk away from that terrible decision. You do your time, you walk away. There’s a statute of limitations on greed, stupidity, and malice. Why is debt forever? Why should lenders be allowed to keep the gullible or the desperate or the unlucky on the hook for the rest of their lives, long after the lender has gotten all her money back plus a healthy amount of interest. It’s inhuman.

     WH00T!!!

191. I would go so far as to say that the *only* person with power in this situation is the student. Right up until they sign it away.

     oh, yeah, totally. Those multi-trillion dollar banks? Mere peons when faced with Natalia’s Completely and Totally Awesome Powers of Persuasion.

192. nc person

     I don’t have to have perfect solutions in order to have the right to point out that the system is fucked up beyond all belief.

     That’s what They Want You To Think, though. Because the only sure result of that kind of stupid requirement is for nothing to get fixed. And oh, gee, you know, sometimes it helps to talk about the details and dynamics of the actual issue before trying to come up with solutions.

     So, take your derail elsewhere please.

193. (although, for the record, that was more directed at the plethora of comments like yours, rather than you in particular)

194. “The further we’ve gotten in this conversation the more I’m left feeling like private credit markets just aren’t, as a structural matter, a viable way to finance higher ed.”

     YYYYYEEEEESSSS! Yes. That is correct. When private loans are a central part of our national system to finance higher ed, THAT IS ITSELF A PROBLEM. That itself needs to be fixed. Yes. You have correctly identified a core problem we need to fix. Private loans need to be only a component of the total system, not the overwhelming way it gets done.

195. You know, people are talking about teenagers making these decisions, but adults can be ignorant on all of this as well.

     My parents encouraged me to go to a local private college. My mom has no college education and knows nothing of the process. My dad got his Bachelor’s by working while attending community college and then spending two years at the local college in our hometown (he worked as a firefighter his whole life; the degree was really just for better pay at the job he already had). He wanted me to have a better education and thought a private school would be better than a public university. And hell, I thought so, too, since that’s what they advertise. It wasn’t until I went to grad school at a public university that I realized I spent all that extra money for a pretty similar education. Also, at the time I attended undergrad, the economy was still in good shape. Go figure that things change over the course of four years…

     I mean, I feel like we’re the average family that gets targeted by these types of things. We trust what people with more expertise in these areas tell us what’s best for us. If we didn’t, how else could we know? We don’t understand the legal documents or all the fancy math. Personally, I don’t learn numbers/math very well unless I have a concrete experience or example. I pretty much flunked Calculus (but really didn’t…it’s an odd story) because I couldn’t see or visualize the space being used on the graphs. My brain, just…I don’t know if it was still growing (since there are still neural pathways that aren’t finished growing/getting their coatings until your thirties), but there was a point where the concept of credit itself didn’t really register for me, and then Bam! One day someone explained the exact same thing to me for the hundredth time, but this time it made sense.

     I’ll tell you one thing, though. I sure was lucky about the private college because of the health care. The college had a counselor on hand for temporary issues like stress and whatnot, but they also had a contract with the local health center for more serious cases. When I was diagnosed with OCD, I saw a practicing counselor right away. He was super-helpful and was all, “You need to get some medicine in you, and come see me once a week for a chat.” Knew what I needed right away. I only paid a $5 co-pay for each session, and if that had been too much, they could have worked something out.

     It’s a bit different at the public university, though they don’t have to diagnose me here, just help me during the bad times. Everything is done in house. I was assigned to a grad student (we were taped so her teacher could intervene if she was doing too poorly). When I first came in, I had to wait a week to see someone who would just listen to my symptoms so she could assign me to an appropriate counselor, and then I waited another week for them to call me, tell me who I was seeing, and find a time to fit the counselor’s schedule. Their goal is to get you over your issues before the end of the semester because services stop for winter and summer breaks.

     Yeah, I freakin’ hate the services here, I’ll be honest. Feels like they don’t care about you personally…

196. Ok. So, for shits and grins, I thought I’d surf around and see how much money my daughter would have to borrow to complete college, if she did the typical working-class thing and went to two years of community college first. I mean, she’s twelve years old, but just sayin’. What if my daughter was Natalia’s age, ans she did the “responsible” thing that supposedly Natalia didn’t do? I used the college cost estimator and the price of the nearby cheap public university.

     After grants, she would still need to borrow approximately $34,000. To get a BS. At a state school. For comparison’s sake, let’s just say that you can buy a really beautiful two-story house in my community for around 70 grand.

     To recap: even if Natalia did all the “right things”, went to a state school and did the first two years at community college—she’d have still had the same debt load that she ended up with her last year at Duke.

197. The good news is that when you die, most of your debt evaporates.

198. nc person: My question still stands, though.

     What question? People here are advocating for more gov’t regulation and support of education. I bet you the cost of my law school loans that most of us also think taxes should be higher to support those goals. Are you really convinced that because no one here is rolling out a tax plan that we don’t realize the connection between tax and revenue? or are you just trolling and ‘splaining?

199. I’m pretty sure the only reason the student loan system even exists is so that the big shareholders and top management of large corporations (in this case banks) can extract more resources from the rest of the population. Actually, I’m pretty sure that’s why everything that exists in the economy exists. Just different forms of the same thing.

200. Jadey – you asked whether a degree gets you better job –

     Sorta. My degree (in history, from a UC school) means I get to apply for jobs shuffling paper and typing stuff into a computer: all indoor work, no heavy lifting, and I don’t have to tell my supervisor when I’m going to the bathroom. So, yeah, that degree put me in position to get better jobs than I otherwise would. The trouble is that while the jobs I can get also pay better, they don’t necessarily pay so much better that taking out a student loan for four years of college makes long-term fiscal sense.

     Colleges make a point of not helping prospective students do a realistic cost-benefit analysis.

     Also: back in the 1950s, my mother got to apply for jobs shuffling paper and typing with only a diploma from the business course at LA High School.

201. I swear some of these comments are one step away from scolding Natalie for having the temerity to attempt to go beyond her station or something equally outdated and classist. Yes, how dare she want to go to a prestigious school that was willing to take her. Didn’t she know that if she could afford a cheaper education, she should get one! Oh wait, she probably didn’t know that, or just how intense debt is because she was very young and the institutions claiming to exist to help her actually encouraged her to take on more debt. Ignore the fact that some universities are simply objectively superior to others in terms of specific programs and that a degree from a more elite school comes with more prestige and thus more opportunities. Ignore the fact that the rhetoric surrounding financing college is often neglectful of just how expensive it can be to repay when coupled with the general cost of living. Ignore the fact that loans are written in such a way as to be as hard to understand for the common person as possible. No, clearly she is at fault for at the age of 18 not having the life experience of a 38 year-old and the ability to read complex contracts of a seasoned contract lawyer. Duh.

     Because as usual, blaming the individual is easier and thus preferable to actually dealing with the larger systemic problem.

202. I think that arguing the merits of choosing an Ivy versus a state school has the effect of turning victims of the predatory student loan industry against one another instead of uniting them against the industry. A person who chose a local state school still paid $10,000 a year plus living expenses, so they may graduate owing up to 50 grand.

     Students at unaccredited for-profit schools like ITT Tech and U of Phoenix are in an even worse bind: they pay about $25,000 a year in tuition and have a lousy time finding a job, since employers don’t value those schools at all. For-profit vocational colleges are making out like bandits from loans given to mostly blue collar students looking to make a better life for their families.

203. What happens to those loans if you leave the country?

     One consequence of New Zealand’s government-issued, income-linked-repayments system administered through the tax system is a significant incentive for students to leave the country when they graduate. Once you’re not paying NZ income tax the student loan repayments are effectively optional, and the default is over 50% – the debt never goes away, but as long as you don’t go back you don’t have to pay. They’re working around that but it’s tricky, since you don’t want to make it so nasty that the message becomes “and never come back”.

     So I wonder what happens to a US debt peon who moves to a different country. Both in theory (ie, you’re supposed to keep paying) and in practice (do they actively pursue you or extradite you back to the US to serve?)

204. MozInOz: What happens to those loans if you leave the country?

     The IRS will collect from your federal tax refunds if you default, and if don’t get a refund, they’ll add it to your tax bill and potentially get a tax lien. Just like they do if you default while you’re in the US. US citizens have to pay federal taxes when they live abroad, although in many cases, they can offset those taxes by the amount of any local taxes they have to pay.

205. suspect class: suspect class 12.8.2011 at 3:27 pm
     nc person: Also, if you guys want more affordable “elite” education, think about paying more taxes so that your public universities improve and stop raising tuition on you. I know I am.

     Oh snap! I think I’ll just include an extra $50 in my taxes this year. Thanks for the pro tip!

     Me: Here, Mr. Canada Revenue Tax Guy (or IRS-guy, or whathaveyou). Please keep my tax return this year. I would like it to go towards improving higher education. But please, only keep it if you plan to put it towards universities and/or funding for scholarships and grants.

     Canada Revenue: (while muffling laughter) Oh for SURE. I’ll totally make sure that’s where it goes. I guarantee it won’t go towards a pay raise for myself, or towards some politician’s campaign budget.*snickers* or a trillion-dollar WAR. The schools… Definitely… because you know (now close to exploding with laughter) KNOWLEDGE IS POWER..BWAHAHAHAHAHAHAH

     Yup. Sounds like a reasonable resolution to me. Because I totally get to pick and choose what my tax dollars go to.

206. Reading all this, I feel like the people talking about $160,000 for journalism? WTF were you thinking would find me and my friends irresponsible and deserving of our poverty-level existence. I mean MFA for $40,000 a year for three years? It’s not like there’s any value in poetry or drama or music.

207. The system is pretty clearly broken for a lot of reasons, but a good first step would be compelling institutions to co-sign the loans that their students take out to pay the tuition. That way, when they sell students a degree that is worth far, far less than they charged for it, they’re on the hook to the banks along with the student.

208. “The good news is that when you die, most of your debt evaporates.”

     Unless you are a (working class?) parent with younger adult children, apparently. There was just an article in my local paper about shady things lenders are doing to convince younger adults that they really are legally obligated to pay for their parents debts.

     But well, I guess they should have known better if they fall prey to such predatory lending practices?

209. iiii: Jadey – you asked whether a degree gets you better job –

     Well, technically I asked whether the same degree from different institutions affects the odds of getting a good job, but I’ll agree that the lack of a reasonably accurate prospective analysis of cost-benefit outcomes is a problem. Certainly it appears that the message given to most families and prospective students is that the more expensive degree is worth it in the long run. Whether it actually is seems to be an issue of some controversy.

210. “Private loans need to be only a component of the total system, not the overwhelming way it gets done.”

     And, you know, it used to be this way. As recently as just a few decades ago. I think that’s half* the problem right there, with much of the FAIL on this thread. People that don’t understand/see that shift and how it changes students’ options and risks.

     *the other half would be what Cagey and Lindsay were talking about. srsly ppl.

211. Jadey: Well, technically I asked whether the same degree from different institutions affects the odds of getting a good job, but I’ll agree that the lack of a reasonably accurate prospective analysis of cost-benefit outcomes is a problem. Certainly it appears that the message given to most families and prospective students is that the more expensive degree is worth it in the long run. Whether it actually is seems to be an issue of some controversy.

     I’ll give an example from my own experience: when it was time for me to choose a law school, I found myself choosing between the University of Michigan, Tulane and UConn Law. UConn would have been cheapest, as I was in-state; about half what the other schools cost. Tulane had the advantage of being located in New Orleans, which is good or bad depending on your susceptibility to les bon temps, and certainly would have meant a lot of visitors. Michigan was, and is, a top-ranked school (I think it was #3 when I was there, and has not been out of the top 10 since).

     All three would have given me a JD and qualified me to work as an attorney. But if I’d gone to UConn Law, I’d have pretty much been stuck in Connecticut or Western Mass, and I was desperate to get out of Connecticut. Why would I be stuck? Because while it’s a good law school, it’s got only a regional reputation, and as jobs are gotten based on the reputation of your school and your network, I’d have been at a disadvantage if I’d wanted to move to another part of the country (which I did).

     Tulane would have been great if I’d wanted to do shipping law, or work in Louisiana or Houston, but not so much in the Northeast at a general firm.

     So hell yeah I picked Michigan. And I don’t regret it. I even wound up getting some good grant money because my family’s situation at the time was pretty dire, so that I had a zero parental contribution in my financial aid formula (though don’t get me started on how fucking annoying it was that I had to submit my parent’s financial information, and how much of a dick my father was about it).

212. Oh, I should add: my Michigan Law degree has opened doors for me and has given me a certain amount of credibility. I’m currently working at a law school, and when the faculty find out I went to school there, they take me a little more seriously. Which is kind of jacked up, but I’ll take it.

213. I also just received my statement from Sallie Mae. I went to a state school. The amount I originally borrowed totaled 41881.00.

     After three years of paying my monthly student loan payments of approximately $300 a month–with no missed payments or deferrals–I now owe……. Wait for it…..

     40, 111.00.

     And I don’t even get to deduct the interest from my taxes.

     I was in shock when I saw what I currently owe. I thought I would have made a dent in my student loan debt.

     To me, it has nothing to do with where you went to school. The price of higher education is skyrocketing, even for decently priced state schools. The problem here is the ridiculous interest rates.

214. Q Grrl, I hate you a million.

     I took $70,000 in loans to go to a wonderful, private school that feeds into graduate schools–2/3 of the student body went on a foreign term and 1/3 attended higher education, as opposed to my State school, where those numbers were significantly less.

     Assuming I get a job making $35,000 a year out of school, I can plunk between 11 and 7 thousand dollars on my loans, and still have enough to live comfortably with some roommates and my SO.

     My parents told me to go for it–they had some extra cash and were cautiously getting into real estate, so we figured we could fall back on that. My guidance councilor told me to do it. The banks told me. The government told me, the college told me and got alumni to tell me. Every single person or entity I trusted in the world had been pushing me to do this for years, and everyone knows, college graduates make a million dollars more over their lifetimes.

     And then I graduated and was unemployed for months. The property my parents bought had hidden issues. My brother lost custody of his child to the state so they were now foster parents and had NO extra cash. I finally got a decent job making $25,000 a year… and I was laid off (and I got that job by virtue of the excellent college I attended). I’m on job #6 this year, all either temporary work or I was laid off. My income is about $12,000 for the year of 2011. I’m a manager at a pizza place and I eat the pizzas we’d otherwise throw away as a way to keep from paying groceries bills. I make $8.50 an hour. I haven’t been to a doctor in months, my debt is in deferrment and increasing, and I can’t get a decent job for the life of me.

     I took a chance thinking there was a light at the end of the tunnel. There was a train. And, even worse, there’s no REASON for it, except FUCK YOU. There’s no logical reason why I can’t discharge student loan debt or why my school cost so much in the first place or why I even HAD to go to college (and trust me, you do).

     But yeah, I’m a fucking idiot and I deserve no help and there’s nothing wrong with a highly exploitative system designed to ruin you. People are stupid and HOW DARE THEY ever point out this out. Stupid people are disgusting and deserve nothing.

215. zuzu: MozInOz: What happens to those loans if you leave the country?

     The IRS will collect from your federal tax refunds if you default, and if don’t get a refund, they’ll add it to your tax bill and potentially get a tax lien. Just like they do if you default while you’re in the US. US citizens have to pay federal taxes when they live abroad, although in many cases, they can offset those taxes by the amount of any local taxes they have to pay.

     Hmm. If I understand that correctly it means the IRS try to make foreign governments collect the tax debt on their behalf? Otherwise it amounts to “if you come back to the US we might bug you”, which is effectvely no enforcement.

     The “pay direct US taxes for the privilege of not living there” always sounds like a reason to renounce citizenship as well. I am surprised that more peons don’t do that. And I know ex-citizens who have done exactly that.

216. Ok…seriously dumbass question here: how does one find out what a school’s ranking is for whatever program of study?

217. La Lubu: Ok…seriously dumbass question here: how does one find out what a school’s ranking is for whatever program of study?

     US News & World Report publishes a guide every year ranking various institutions. They’re pretty controversial, but at the same time controlling.

218. Thanks, zuzu! (I never knew that!)

219. Kristen J.:
     Journalism majors make a bout 36k starting and 65kmid-career.That’s tough but not undoable or unreasonable.

     Really?? I find that hard to believe. But regardless, 36K—depending on where you live—isn’t a lot (I make 36K before taxes in NYC. Whee!).

     Unless you have a specialized degree, I’m guessing the norm for most entry level jobs is 30K, if even.

220. Athenia: Really?? I find that hard to believe. But regardless, 36K—depending on where you live—isn’t a lot (I make 36K before taxes in NYC. Whee!).
     Unless you have a specialized degree, I’m guessing the norm for most entry level jobs is 30K, if even.

     Oh, I didn’t mean to imply it was a lot! I just meant that if someone wanted to go into journalism, and had that salary expectation they would think that a degree that cost them 40k would be repayable.

221. ~~~~
     karak 12.8.2011 at 7:31 pm
     Q Grrl, I hate you a million.

     I took $70,000 in loans to go to a wonderful, private school that feeds into graduate schools–2/3 of the student body went on a foreign term and 1/3 attended higher education, as opposed to my State school, where those numbers were significantly less.

     Assuming I get a job making $35,000 a year out of school, I can plunk between 11 and 7 thousand dollars on my loans, and still have enough to live comfortably with some roommates and my SO.

     ~~
     And that’s part of the problem. My bf has a degree in Public Health and has 70K in loans. His starting salary was/is 54K.

     Like, we’ve gotta to a point in the US where just to get a entry level job you need a degree which, for most people, comes with tons of debt. These entry level jobs weren’t made for people who carry all that debt. In the past, just having an advanced degree meant you could command a higher salary, but that doesn’t even fly anymore either—it really depends on the degree. (masters in Public Health vs. Masters in Middle East Studies–guess who gets a job and more money??)

222. Well, alessa, I know you were kidding about old folks like me, but believe it or not, shit has gotten worse for us, too. When I first started working, health insurance was an integral part of one’s compensation package, and some companies even provided pensions and profit-sharing.

     My spouse & I have been funding our own health insurance since 1997, and our own retirement, too, via 401(k). Medicare is shrinking; Social Security is on the block, and everything costs more, more, more. Our salaries have stayed pretty stagnant for about 10 years.

     That said, I really worry about young folks. I don’t care how freaking smart Natalia was supposed to have been, her situation is pretty desperate.. A choice between health and any obligatory/necessary expense is no choice at all.

     Furthermore, I don’t know how people are expected to buy a home, much less pay rent, with earnings and expenses so far out of whack. The rules of the game, which used to be, “Work hard, pay your dues, live ‘poor’ for awhile, and all will be well” have changed to: “Too bad for you; life is hard; you shoulda/coulda done it differently; and don’t come crying to us when life becomes so overwhelming.”

     I have kids in high school and middle school, and I have no idea how they’re going to make it on their own. Not because they’re stupid or ignorant or entitled, but because the deck is increasingly stacked against all but the very, very wealthiest segment of society. And slick, predatory, complicated student loans are a huge part of our society’s sickness.

223. So, I’m actually in the business of postsecondary education access and I read about 10 newsletters a day on the topic. For everyone talking up the virtues of community and state schools, look into what’s been happening in CA. Students at community colleges can’t get into classes because of budget cuts. Even for people who don’t end up spinning their wheels in developmental education, accumulating enough credits to start the transfer process is not easy and would most likely take more than two years. At least 12 states have capped enrollment at state schools, so good luck even getting in these days. Community college, by the way, can cost over 14K for two years if you count in tuition, books, transportation, and other college expenses. And Berkeley can end up costing more than Harvard.

     And you’d think that if you’re low income, you get more aid, right? That’s how I financed small and fairly pricey liberal arts school in the 90s. Not so fast. Schools are shifting more and more towards offering merit aid. Poor kids go to shitty schools and rich kids go to good schools, as a rule. Guess who is going to have more AP classes, better grades, higher SAT scores? Guess who will get more merit aid? A low income family now pays an amount equivalent to 72% of annual income per year to finance 4-year school for one child. High-income family pays 14%. Here’s a good report on various financial aid issues from Ed Trust. Things are just really dire in education right now, so things that could be the answer in the 90s, like state schools, just don’t work anymore.

224. Jadey – oh, sorry.

     Hell, yes, where you go matters, but only if you’re trying to do something specific. If you want to be a Wall Street Master of the Universe, you have to get your credentials at one of a fairly short list of schools. If you want to be an electrical engineer, you should get your credentials at a different short list of schools. But if you’re going to end up selling insurance in your hometown, all you really need is a generic degree.

     My sister A got her undergrad degree from a Seven Sisters school, futzed around temping and doing retail for a few years, then decided to get a teaching credential. She could have done that with a degree from CalState. AFAIK she feels like her name-brand degree was worth it for the intangibles… but she only paid late 80s prices for it, and our family situation was such that she didn’t have to finance the full cost. Viewed strictly in financial terms, it was not a good investment.

225. Shoshie: Also, even with tuitions of “only” $10K/year, that adds up to AT LEAST $40K after 4 years which is more than Natalia ended up with. So…I’m still not sure what you’re getting at.

     This.
     My school was relatively cheap and I still have trouble with loans and the repayments. Most of my loans are government but that in no way means I don’t struggle. I chose to stay a place that was cheaper because it was in-state, I chose to live at home to not pay dorm costs, I chose to start paying off the interest on the private loan I needed to fill the gap in my first year early (they lend you less and Pell grants are less because of drop out rates) and it still fucking sucks. I feel for you Natalia, if I ever fell ill I would be so fucked. The loan system is disgusting, and blaming people and screeching “Privilege!!” is just…lacking empathy in a very basic way.

226. I went to a small private school and came out with about $30k in loans that I’m now having trouble repaying four years after graduation. Long-term unemployment, after being laid off from an entry-level job that isn’t even in my field (fun fact: I was in HR as a recruiter for recent graduates. When they stopped hiring them, they got rid of me) is a fucker.

     And the really fun part is there is a lot I could do to improve my situation if I wasn’t spending $500/month on my student loans. Like buy a car, which would greatly expand my job options (public transportation in my medium-sized economically depressed city is, unsurprisingly, shit). Or afford to move somewhere with better prospects. Or be able to seriously consider graduate school, which is what I really want. No one in my field is really hiring without a masters or a LOT of experience, which is difficult to get when no one will hire you unless you already have a lot of experience.

     I agreed to these loans at 19. My parents promised they would help me with them, but then my dad got laid off and they couldn’t. I was already two years into my degree, I’d made connections with other students and my professors (many of whom I still keep in touch with), and I didn’t want to leave. So I signed. And now I will probably be paying this off for the rest of my damn life. I know I’ve paid at least 10k since graduating, but I’ve hardly made a dent.

227. There seems to be this perception that the kids who take out these huge loans are only doing it because they’re naive or they’re caving to pressure. It’s more complicated than that. I’d argue that plenty of kids who attend schools outside their means do so not because they’ve disregarded the consequences, but because they know the consequences of *not* attending. We’ve all seen the cautionary tales. Take my friend Josh.

     Josh (name changed) was in my graduating class at a public rural high school. He and I took almost all the same classes. Our extracurriculars were almost identical. We had the exact same GPA, since we’d taken the same AP classes. Josh was creative and talented in ways I’ll never be; he was widely regarded as a rising star–one of the few kids likely to make it. We were both offered a merit-based state grant–he was offered his outright and I was pulled off the alternate list. My SAT scores were 10 points higher.

     There was a decent private college in our state–small and not overly selective, but with an honors program, a few strong departments, and an emphasis on teaching. We both applied for the full tuition scholarship. I got it.

     Four years later, I’m happily ensconced in an Ivy League professional program being exploited for all I’m worth. When I graduate, I’ll have mountains of debt and low relative earning potential, but my field still offers a fairly strong guarantee of employment. More importantly, I’ll be able to work wherever I want.

     When I last heard from Josh, he was back in our hometown working part-time, doing odd jobs, and seeking full-time employment. He’d done the “responsible” thing; he spent two years at the local community college and finished at the state school. His debt was negligible. But, he’d missed his chance to get out. Josh has a supportive family and has remained close with many of his friends. Overall, he seems like a happy man. But, he was an extraordinary kid, and had he had the same opportunity I had, there’s no telling what he could have become.

228. You know, every time I have a little bit of hope, I’ll read a thread like this and realize that I’ve quite successfully screwed myself over with my own loan situation. Argh.

229. Brennan, community college followed by 2 years at a state school doesn’t necessarily doom one to a dead-end life. VA, for example, has a great program at localmcpmmunity colleges, and great state schools (i.e., VA Tech, UVA, William & Mary) besides.

     Just want to throw in some hope for those who, even with awesome grades, don’t qualify for or can’t afford expensive private schools.

230. You know, student debt isn’t something that I just decided to get angry about one day, because “things didn’t work out” for me. When I was at my lowest – physically and mentally – the brief thought of suicide flickered in the back of my head. I thought – OK, this is never going away, and surely I’m one of the few people who gets stuck like this. I’m too sick to make a lot of money, but not sick enough to be called disabled. They will always be after me. I should just beat them at their own game. I can’t afford to think this way anymore, because I have a little boy and hell, whatever, I’ve done a lot of growing up. Give up my life? Because of these bastards? Fuck that and fuck them.

     I’ve been angry about it for a while, but like many people, I was afraid to talk about it. And anyway, as long as i managed to get by making the payments, sometimes even overpaying, when I could, I could pretend that I would be alright.

     The student debt industry is huge, and it’s very lucrative for many people. So it’s not going to change without a massive fight. But the fight has already begun, and a lot of different people are participating, and i think more should get involved. We need consumer protection back for these loans, at the very least. And yes, that means listening to people you may not personally like, people who were “uppity” like me and went to places like Duke and still got screwed, in the end.

     There are lots of student debt victims out there, from different backgrounds.

     And karak, I’m totally with you. Especially in regards to the food. In the lean months, food becomes a huge issue. I’d go to big press events hoping there would be a buffet. But now that I am currently breastfeeding, it’s like – no, I can’t give up on basic nutrition so that Sallie Mae can keep making money off of me.

231. JS:

     Untilitchanges,considerotheroptionsforyourself,yourkids,yourfriends.Whynotstudyabroad?IdidmyBAinGermany(currentlydoingmypostgradintheUK).There,studyingisalmostfree.InsomeGermancities,studyingischeaperthanNOTstudyingbecauseonegetsstudentbenefitslikehealthcareandfreepublictransportuse.Also,countrieslikeFrance,Italy,Switzerland,AustriaandtheNetherlandsalsohaveamazinguniversitieswithnoneorvery,verylittletuitionfees.

     This is one of the reasons I moved away from Canada to do my MA in Germany. Tuition was finally dropped this semester (which, at a whopping 500 euro a semester, wasn’t a big deal in the first place), and the discount on public transport is a lifesaver. Health care isn’t free here for students anymore, but the current rate of 78 euro a month could be worse; at least I’m covered if anything happens.

     I did take out (private) student loans so I can focus on studying and not needing to work. People here look at me like I’m crazy, since the attitude is that you should avoid taking on debt at all costs. Still, I’ll end up paying little more at the end of two years than I would have for just tuition alone back home.

     That being said, studying abroad isn’t an option for everyone since many countries require you to have enough to support yourself in the bank for the length of your degree. Chances are, if American (or Canadian) students want to study abroad to save money, they probably don’t have the minimum 600 euro/month saved up to last three/four years that the government (in Germany, at least) wants to now see before handing out student visas. Student loans/government assistance are normally only available to citizens/long-time residents.

232. I graduated from community college in June, and my first payment on my 27k loan is due next month. I still don’t have a job, am in between a rock and a hard place with my health insurance, and while we could get the payments lowered for the next two years, what is about a 30k loan could become a 90k loan during our repayment time. I can’t count how many resumes I’ve sent out, and tomorrow I’m going to apply at the nasty looking sausage shop that always has the help wanted sign out.

     It’s this sort of thing that makes me wonder what was even the point of returning to school. Because the job market sucks, and it took me out of it for two stinking years, so I have no recent references, and a shitload of a debt.

     I need to go watch kitten videos now.

233. P.S. I think the word “serf” is way more appropriate than the word “slave.” “Slave” tends to dilute the historic meaning of slavery and what people went through – as I was reminded over on my own blog. “Serf,” I think, remains applicable. We just have a new kind of serfdom in place.

     shfree: shfree 12.9.2011 at 2:40 am

     I graduated from community college in June, and my first payment on my 27k loan is due next month. I still don’t have a job, am in between a rock and a hard place with my health insurance, and while we could get the payments lowered for the next two years, what is about a 30k loan could become a 90k loan during our repayment time. I can’t count how many resumes I’ve sent out, and tomorrow I’m going to apply at the nasty looking sausage shop that always has the help wanted sign out.

     It’s this sort of thing that makes me wonder what was even the point of returning to school. Because the job market sucks, and it took me out of it for two stinking years, so I have no recent references, and a shitload of a debt.

     I need to go watch kitten videos now.

     Clearly, you are lazy and stupid. If only you had the hindsight to go to an expensive private school, like I did! Bahaha.

234. LotusBen:
     Thegoodnewsisthatwhenyoudie,mostofyourdebtevaporates.

     *cries*

235. woooaaaaaahh.

     woah.

     this system is pretty messed up. I feel dreadful for everyone who is dealing with this crushing debt. It must be a very scary thing to be facing.

     it would be interesting to compare the feasibility of different countries and their tertiary systems. Here in Australia my BA will cost around $20 000. I don’t need to pay for any of that upfront because all domestic students can access a no-interest government loan (i just got sent an email when i enrol in each unit, tick a box to say i am an australian citizen and its done). The debt varies according to inflation, but zero interest is ever applied, and there is no obligation to pay it back until my income reaches somewhere around $42000, when I will pay back 4% of my income.

     I am a general fail at understanding economics, so i am unsure as to whether the US health and tertiary education systems are so messed up because it is unsustainable to have more government backing with such a large population, or if is just that the weird emphasis on independence and the free market that seems to come out of the political Right is totally screwing up the country for the vast majority of citizens.

236. It was my experience, though, in college, that “demonstrated need” according to the financial aid office is a very different thing than “what you can really afford to pay.”

     Ain’t that the truth. This is why I was a 26yo freshman — they considered my parents’ income to be at my disposal until I was 24, even though my dad deadbeated out of dodge by the time I was in first grade and my mom changed the locks on the front doors and kicked me out into the street for being queer when I was 16. Neither of my parents contributed a penny to my education because they are/were abusive homophobic assholes, but there was not a line where I could explain that on the FAFSA, so I had to suck it up and work shit jobs and try to save and wait.

     I used to know a guy who taught economics at UMass in Amherst. He was a bit of a Marxist. He used to march his 101 class over to the quad at one of the nearby exclusive private colleges on the first day of classes and sit them down. He wouldn’t say anything. Finally, one of his students would ask him what they were doing there, and he’d sweep his arm around at the private-college students playing hackey sack and say, “Here’s your first lesson in economics: these will be your bosses one day.” Then they’d go back to the classroom.

     lol@ “UMass in Amherst…bit of a Marxist”. More seriously, godDAMN but I love a teacher who tells their students the truth. It’s a nice little change-up from the constant stream of utter bullshit.

237. The good news is that when you die, most of your debt evaporates.

     Not in the US, generally, no, even dying does not eliminate most of your debt. Typically, if you have any money left that hasn’t been protected in some way (put into a trust instrument, held as joint property, things like that), it is used to pay your debts, such as credit cards or health-related bills, etc., and of course the administrative costs and attorney’s fees involved with managing these affairs, first priority. Also, I think funeral expenses are a priority but I don’t remember very well anymore, it’s been a while since I did the work. But only if there is any money left over after all of that does it get distributed to your potential heirs.

     And of course some debt attaches to property that you might wish to pass on, like a mortgage to a house, for example, or a car loan to the car. Student loans are all murky, some discharge on death and others don’t; I think it’s about federal vs. privately held but I don’t know and anyone who needs to know ought to consult an estate attorney if they can. In any case, very little debt is discharged upon death unless the person dies with very little/no money.

     Last I checked, debt that is not attached to property is still not heritable, but unless we stop fucking around with letting the rich use the rest of us like chewtoys, I wouldn’t count on it to stay that way.

     Unless you are a (working class?) parent with younger adult children, apparently. There was just an article in my local paper about shady things lenders are doing to convince younger adults that they really are legally obligated to pay for their parents debts.

     Oh man that’s downright fucking evil. People are often so vulnerable after the death of a parent. Wouldn’t it be awesome if we had something like a federal agency, I don’t know, maybe we could call it the Department of Justice or something — obviously, I’m just spitballin’ here — which could investigate that kind of shit and shut it the fuck down?

238. Jen in Ohio: Ain’t that the truth. This is why I was a 26yo freshman — they considered my parents’ income to be at my disposal until I was 24, even though my dad deadbeated out of dodge by the time I was in first grade and my mom changed the locks on the front doors and kicked me out into the street for being queer when I was 16. Neither of my parents contributed a penny to my education because they are/were abusive homophobic assholes, but there was not a line where I could explain that on the FAFSA, so I had to suck it up and work shit jobs and try to save and wait.

     A friend of mine had a deadbeat dad who left her mom for another woman and bought a huge house. She barely got any financial aid at all. Her father was rich! The fact that he wanted nothing to do with her was conveniently overlooked.

     It’s odd, how they can just do that. Even though her parents were divorced and he wasn’t exactly claiming his daughter as a dependant. And even told her to fuck off when she dared to ask for a little money for college.

     Or maybe “odd” is the wrong word. Such treatment of students fits in with everything being talked about here. Students are cash cows first and foremost.

239. A couple of points .

     First Point
     1000$ borrowed at 8% over 10 years is 12$ a month. At the end you’ll have paid back 1400$
     1000$ Borrowed at 8% over 20 years is 8$ a month at the end you’ll have paid back 2000$

     So yes, over time you pay back a LOT more than you borrow.

     Second point

     Most loans amortize the interest. This means that the first payment goes mostly to interest and the principle isn’t reduced much until late in life of the loan. Wiki has a good explanation of how/why this is figured out.

     So who’s getting rich? Are the banks getting rich? It’s easy to blame the banks but if the student loan industry dried up that would mean that a lot of people couldn’t go to college at all. If it were easier to get out of the loans the rates would go and people that get loans now would be told no. I doubt anyone of the previous 200+ commenter’s wants that. I’ll bet there are a lot of people in the student loan industry who are worried about massive defaults and wish they could go back in time and tell prospective borrowers “No. You can’t have more money for school. There’s too little chance you’ll be able to pay off 50 grand with a degree in journalism.”

     The principle goes to the school. Is it the school getting rich? They’re most not for profit enterprises so they’re not paying dividends. Do upper administrators get huge bonuses? I’m sure the top 25 administrators of Duke get paid well but is that where all the money goes? Do they have scads of underworked and over paid employees milking the system? I doubt that also.

     So where is the money going?

     Also, how do we fix this? Let the loans be discharged in bankruptcy? Make schools co-sign? Just have governemnt pick up the cost of college?

240. Jen,

     I know right? I think part of what they are doing is also going after the children of deadbeat parents – ie, children whose parents were so deadbeat they were put into the system but the deadbeat parents continued claiming their children as a reason why they needed loans, assistance, etc. This has actually been a thing for a while: deadbeat parents deliberately – or even: poorer parents doing so because they have so few options, credit wise – ruining their kids credit before they even become adults. Via using their kids social security numbers once their own credit is shot, etc.

241. What we’re looking at here is a US consumer credit bubble. Student loans, credit cards, mortgages and car loans — the mortgage bubble, IMO, was only the beginning. Consumer spending is about 70% of the US economy, and it has to decrease until Americans are living on what they can make, not what they can borrow. This correction has started but not ended. There will be no recovery from this recession; we can either drop more, or drift down, until we hit the new normal, which is a smaller economy than we have now. That’s the way it is. Anyone telling you that things will get better in the near term is trying to sell you something.

     BTW, eventually this will hit corporate profits. It hasn’t yet, but inevitably it will, because it’s impossible for a wide swath of companies to make just as much in a smaller economy.

242. Currently at (a top 3) law school – $140k in debt but have a job so I’m not stressed about it.

     My only issue with the rant is that it’s very clear from the even preliminary discussions on this thread that this is not the fault of the banks, it’s the natural consequence of a non free/govt funded system. There is no other way. “Luxury” education is a public good – you can’t expect the market to provide it.

     So stop blaming Sallie Mae and blame Obama.

243. Wow.

     I was thinking of going to college in the US and I was accepted to Smith, my dream school. They didn’t offer any financial aid, so I had to say no. But I thought about taking out loans and I just kind of blithely assumed that paying them back wouldn’t be so difficult if you had a semi-well-paying job. I guess not. Glad I stayed in Germany, where tuition is 500 euros a semester at the moment and going to be free soon (at least in my state).

244. I am fully convinced that the only way to actually fix U.S. higher education at this point is for the government to set caps on tuition. No matter how much you mess around on the loan side by restricting the amount of educational debt that can be borrowed, you aren’t going to reduce demand all that much. Why? Because there will always be people willing to pay whatever schools charge. People’s parents will take out second mortgages or use their retirement funds. Students will take on consumer debt. There are no shortage of institutions willing to loan very large sums of money to people, if you’re willing to sign up for punishing interest rates and other really bad terms.

     Demand for education is not inelastic, but it’s a lot less sensitive to market pressures than other things. It is extremely difficult to make a living wage in this country without a degree. And if, heaven forefend, you actually care about *what* you do for a living and not just that you aren’t starving on the street, there are a huge number of careers that it is impossible to do without a college (and often graduate) degree. Q Girl was right about one thing — it’s absolutely ridiculous to think it’s a smart idea to pay $160,000 for a humanities degree. But the problem isn’t with the people who do so; the problem is that that’s what they cost.

     I’m not an expert on university finances, but my guess is that capping tuition will have the biggest effect on professor salaries, as well as some effect on the facilities and services that are offered. Which is why it needs to be a cap — schools can’t voluntarily reduce what they pay to professors, or they will lose the talent war and see a corresponding decrease in the number of grants they receive, the quality of education they can provide, etc. It’s awfully nice for law professors at elite schools that they can make six figures without working law firm hours, but that money is often being made directly off the backs of students who, simply because they wanted to become a lawyer and that required both a college and law degree, will find themselves in a perpetually indentured state unless they are one of the few to luck into a biglaw degree (or a teaching job at an elite school). Similarly, it’s really nice to have the kinds of facilities I enjoyed at the extremely fancy law school I went to, but if I could have paid $20,000 a year less to have uglier buildings and no free happy hours and a higher co-pay on my insurance? I absolutely would have made that trade.

     Since caps on tuition will never happen in America, though, I agree that educational debt needs to be dischargeable and there should be caps on interest rates and a lot more restrictions on the terms of repayment plans. Which, as others have pointed out, probably requires the government to step into the role of lender (so, so grateful I did my undergraduate degree in Ontario, and took loans from OSAP). We can work out various ways of allowing discharge that reduce the incentives to default immediately out of college, but it is unconscionable that in the current system no amount of hardship can get you out of crushing debt that you signed up for when you were 18 years old.

245. Here’s my proposed fix.

     1. Public student loans are dischargeable in bankruptcy 7 years after the last one was initiated. This is to prevent people from graduating and immediately defaulting while living as an ‘indigent’ in their parent’s basement; a strategy most likely to be used by the well off who can afford the legal counsel to do strategic bankruptcy.
     2. Colleges will have to co-sign for at least 10% of the debt for undergraduate programs. They will have to co-sign for 30% of the debt for graduate programs. If the student defaults the college will have to cover that much of it. This gives them some skin in the game.

     The downside will be that fewer loans get made to people who have poor credit history. This means that college will be more of a privilege than it already is. Additionally we’ll see a lot fewer admissions to fields that lack an obvious career path. Philosophy, Art History, and the like will become the privilege of the privileged while the middle class are funded to pursue degrees in Accounting, Computer Programming, and Engineering.

246. Well, what if we did something completely radical? What if the government paid tuition up to X dollars (not the median, but perhaps an index of the cost to provide a college education at the average public school) and schools that want to charge in excess of that must loan the amount to the student themselves. The loans could either be dischargeable in bankruptcy OR repayment could be capped to account for financial hardship.

247. Cutting the availability of loans radically so that it pulls down tuition will make non-debt need-based financing easier. A non-profit that can spend x million per year on grants will have a lot more purchasing power for its grant recipients if tuition falls by forty percent.

248. jor: Additionally we’ll see a lot fewer admissions to fields that lack an obvious career path. Philosophy, Art History, and the like will become the privilege of the privileged while the middle class are funded to pursue degrees in Accounting, Computer Programming, and Engineering.

     Great solution you’ve got there. Culture is only for the wealthy. If you’re not part of the superrich class, you don’t get study human endeavor. The Village Voice ran an excellent article many years ago about the defunding of CUNY, pointing out that depriving poor and middle-class people of access to knowledge of culture is not unlike the policies directed at other subjugated groups: when you want to destroy people, one of the first things you destroy is their access to culture and knowledge of it.

     And hey, if we miss out on some brilliant artists or historians or philosophers or writers, well, that’s just the way things are. Only rich people get to develop their critical thinking skills or knowledge base. The peons don’t get to learn anything other than what they need to survive and make profit for the cultured overlords.

     At least part of the problem in my eyes is that a liberal arts degree was never meant to be vocational, and it’s absurd that the US has turned it into a prerequisite for any white collar job, with very few exceptions. If it were possible to get a white collar job without a college degree, fewer kids would bother to get one, and the price would have to drop.

249. I’d like to point out that if you’re smart, and you foresee a good career in an industry that makes a lot of money, and you do the math, and you factor in the prestige issue, and all of that comes out to say “yeah, this is expensive, but it will be worth it, because $40 K will be easy to pay off once you’re making $100K a year…” AND THEN YOU GET SICK AND CANNOT WORK… it doesn’t matter how fucking smart you were about your choices and how much research you did and how well you understood the options, if the only mistake you made was thinking that your health would not collapse out from under you when you were 26.

     You’re still fucked.

     I had close to $40K in student loans in 1992. I went to University of Pennsylvania, an Ivy League school. I had my future mapped out; I was going to go into psychological research with an MD/PhD so I could work with humans. Then it turned out in junior year that organic chemistry was too fucking hard and I decided I wasn’t cut out for medical school, so I changed plans and decided to be just a PhD. Then I suffered from a bout of depression in grad school (a disorder I didn’t even know I had the potential for), and had to drop out of grad school because I couldn’t maintain the grades for my stipend.

     You know why I was able to pay off that $40K loan in about fifteen years and Natalia wasn’t? Because I graduated at the bare beginning of the Internet boom and it turns out I’m really good at stuff relating to computers and data. (That and it doesn’t sound like she’s had fifteen years to work on it yet, but my $40K loan was down to $28K within five years.) Instead of becoming a scientist I became an analyst. Which pays a lot better than being a scientist, honestly. And, very importantly, I didn’t become too sick to work at any point.

     In other words, I was lucky, and Natalia wasn’t. My plans didn’t work out because of things I didn’t know about myself, but I was fortunate enough to fall into a better paying career anyway, because I was lucky enough to have a particular talent that people pay money for and because I came in at a time when the barriers to entry for using that talent to get paid were so low that I didn’t have to *plan* for that to be my career; it just happened.

     The system should not be designed so that two people can make the same decision, based on the same set of information (ie, what you know about yourself when you’re 20), take out the same amount of money… and one can pay it in full within 15 years and one ends up ruining her life trying to pay, and the only difference is luck. THAT is the problem here.

250. EG: Greatsolutionyou’vegotthere.Cultureisonlyforthewealthy.Ifyou’renotpartofthesuperrichclass,youdon’tgetstudyhumanendeavor.TheVillageVoicerananexcellentarticlemanyyearsagoaboutthedefundingofCUNY,pointingoutthatdeprivingpoorandmiddle-classpeopleofaccesstoknowledgeofcultureisnotunlikethepoliciesdirectedatothersubjugatedgroups:whenyouwanttodestroypeople,oneofthefirstthingsyoudestroyistheiraccesstocultureandknowledgeofit.Andhey,ifwemissoutonsomebrilliantartistsorhistoriansorphilosophersorwriters,well,that’sjustthewaythingsare.Onlyrichpeoplegettodeveloptheircriticalthinkingskillsorknowledgebase.Thepeonsdon’tgettolearnanythingotherthanwhattheyneedtosurviveandmakeprofitfortheculturedoverlords.Atleastpartoftheprobleminmyeyesisthataliberalartsdegreewasnevermeanttobevocational,andit’sabsurdthattheUShasturneditintoaprerequisiteforanywhitecollarjob,withveryfewexceptions.Ifitwerepossibletogetawhitecollarjobwithoutacollegedegree,fewerkidswouldbothertogetone,andthepricewouldhavetodrop.

     EG, did you miss the part where I said it was a downside?

     Everyone saying that the loans are predatory is saying that the person that borrowed the money should not have been allowed to do so. That means they would not have ‘wasted’ the money getting learning things that aren’t “marketable”.

     Right now it’s really easy to borrow money to go to college. Provided you get accepted you can study what you want where you want when you want and it’s easy to borrow money to pay for it. Heck you can even borrow money to live on while you study. It’s easy. It’s too easy. It’s way too easy. People are borrowing so much money that paying it back will be a major hardship for them for decades.

     I’m not being sarcastic, it’s a hardship. We pay over 500$ a month for my loans. It sucks.

     But the alternative to “predatory” lending is to NOT LEND.

     Unless someone can figure out where all this increased cost is going. Costs have gone up FAST. I don’t think we’re buying better educations. So where is the money going? The lenders/interest payments are besides the point. The problem starts with the principle. What the hell is costing so much?!?

251. i want to point out that I agree not being able to discharge student loans in bankruptcy is a bad policy and should be changed. That change should have little impact other than a small increase in the interest rates people pay on student loans.

252. jor, you’re absurdly wrong about “little impact.” The whole system is based on nobody worrying about the ability to repay, and as soon as the debts become dischargeable, even only upon showing of hardship, then lending standards tighten. As soon as lending standards tighten, the pool of applicants at each price point at each student quality point shrinks and schools can either take less well-performing students and maintain the class size, or take smaller classes, or lower the price. The loans won’t just go up a few points because the risk of default is already high, it’s just that right now, no lender ever has to right off the default because the defaulted loans are like zombies that never die. If they were dischargable, half the private loans would disappear overnight and the price points of every private university in America would be untenable next year.

253. Oh, and I did forget to mention that I do have another option for avoiding paying back my loan, which is to return to school, thus INCREASING MY LOAN. So. Screwed no matter what I do, unless I find a fucking job. And although I could tell my neurologist, who I think is about seven years old and about six months out of school and is rarin’ to tinker around with my meds just to see if I can get by on a lower dosage, like hell am I not drugged to the hilt right now. And the life circumstances that allow me to be on insurance that covers what would be my bajillion dollars in monthly meds also preclude me from getting grants, income-based deferments, what have you.

     I think I need Maru now.
     http://sisinmaru.blog17.fc2.com/page-2.html

254. jor, you and I are on the same page here. Predatory lending is an exacerbating factor, but the real issue is the cost of education. The average debt-load for a four-year degree is now almost $30,000. Many of my friends — including those who went to state schools like UC Berkeley — came out of undergrad with $100,000 in debt. $100,000. That’s a mortgage. That you were told you had to sign up for at age 18 if you wanted a shot at a decent job.

     Even if all loans were all interest free and allowed you to defer without penalty when you could show hardship, repaying $100,000 of debt in ten years would require minimum monthly payments of more than $800. No one should have to sign up for ten years of that to get a bachelors degree.

     Maybe reducing the availability of loans would cause people to stop going to university, but I suspect it’s more likely to cause them to shift their debt outside of student loans. And even if it drove down the number of people attending college and that eventually caused tuition to go down, there would be a considerable lag period during which a lot of kids lost their shot at attending any college because they weren’t a good bet for lenders. And I doubt that top schools would ever see a decrease in demand that caused them to lower tuition. So then you’d just have more stratification among colleges: worse-ranked schools would shed students faster, have to reduce services and lose good professors quicker, and then shed even more students. Top-ranked schools will never run out of people willing to pay, so they’ll snatch up more and more of the best professors and the gap between those schools and the others would grow even wider.

255. jor: EG, did you miss the part where I said it was a downside?

     No, I didn’t miss it. I just think that “downside” is a vast understatement, and that that particular “downside” will do nothing but recreate a society in which the many suffer from things other than debt. That “downside” makes your plan completely unacceptable to me.

     There’s a difference between a solution and a surrender.

     Esti: my guess is that capping tuition will have the biggest effect on professor salaries, as well as some effect on the facilities and services that are offered.

     I disagree. It will change things dramatically for law school and business school professors, but not for the general run of professoriat, unless I have colleagues earning a shitload more than they’re letting on. It might have a big impact on administrators’ salaries, and on sports coaches’ salaries, however.

256. I am disabled and fortunately able to put my loans on IBR where I owe $0/month right now. However this will result in a huge tax liability if I am unable to pay it off before the 20-25 years is up. The thing is, I am far from alone in this. Even if you think we uppity kids are just foolish and irresponsible, there’s no getting around the impact the student debt scam is going to have on our country. When you are sending us out into the world with huge debt and NO jobs, we’re not going to be able to pay and something will have to budge. Eventually all our “betters” in the older generations will get too sick to work and will start to die. Something will have to change, we are not going to our graves indentured to this system someone else set up with the joke being on us.

257. jennygadget:
     Jen,

     Iknowright?Ithinkpartofwhattheyaredoingisalsogoingafterthechildrenofdeadbeatparents–ie,childrenwhoseparentsweresodeadbeattheywereputintothesystembutthedeadbeatparentscontinuedclaimingtheirchildrenasareasonwhytheyneededloans,assistance,etc.Thishasactuallybeenathingforawhile:deadbeatparentsdeliberately–oreven:poorerparentsdoingsobecausetheyhavesofewoptions,creditwise–ruiningtheirkidscreditbeforetheyevenbecomeadults.Viausingtheirkidssocialsecuritynumbersoncetheirowncreditisshot,etc.

     Yep. My husband’s parents went bankrupt when he was a kid–when he was a teenager they made him get a credit card so they could use it to pay for his sister’s community college. Which they then conveniently became unable to pay off, so we had to do it, because techinically the credit card was in his name. We were married undergrads; he wasn’t working, I was working 2 jobs and we were living on about $200 a month. Whee.

258. Professor salaries have not really gone up even among law professors. Most of these cost increases go to infrastructure improvements. Mostly its demand driven rather than supply driven.

259. One of the funny things about the steep hike in tuition is that it’s happened at exactly the same time as tenured professors have been replaced by adjuncts, aka temps with no benefits. There may be some rock star professors that are getting paid ridiculously well, but as I understand it the average cost of instructors has gone down while tuition went up.

     I’ve got another sister who’s a tenured professor at a public university, one that’s been mentioned upthread. A raise would be nice, of course. But what she really really wants is for her department to hire more tenure-track people, or at the very least make a bunch of their adjuncts into permanent employees. As it is, she’s one of ten people doing the service and advising that used to be done by thirty, and she’s expected to teach and publish, too. Something’s gotta give.

260. I’m doing my MA in postcolonial studies in the UK. By the time I finish I’ll have six figures in student loan debt courtesy of Sallie Mae and the US federal government. That includes my BA degree. I had about $70,000 in debt after I finished–and that’s after I had a full scholarship for two years. When my scholarship ran out, I found myself in the position of being halfway through my BA at a religious university. It’s accredited, but it was unlikely that all my credits would have transferred. So I stuck it out. And then I started getting sick. Turns out I’ve got a rare blood disorder. Hello, fifth year of university. Hello, stack of medical bills I’ll never be able to pay.

     I finished my degree, applied for countless jobs and received one offer that would have given me a salary of under $24,000 a year. It was a position as a campaign manager, so I would have been working 80-100 hours per week at certain points. So I did the math, as Q Grrl so kindly suggested we all do, and discovered that the only reason this nonprofit group had offered me a salary is so they could get out of paying me minimum wage for a job that required a BA degree.

     I turned it down. I also discovered that a master’s degree had become the new entry level degree in the social sciences (they didn’t tell me that when I was picking colleges and majors), so to grad school I went. If I’m lucky, I’ll be able to continue to my PhD here in a country that doesn’t treat me like a second class citizen because I’ve got an incurable disease.

     So Q Grrl: Fuck you. I am so very sorry that at eighteen years old, I did not know that I would get sick, and take longer to finish my degree. I’m so sorry that when I picked my university I didn’t know they’d raise tuition every year and there wouldn’t be enough scholarships available for upperclassmen. I’m sorry I believed my teachers when they told me that if I worked really hard, I could go anywhere I wanted and I would have a job waiting for me because a BA is all you need to have a career. As for privilege: again, fuck you. I’m from the Appalachian mountains. I may be white but my peer group isn’t exactly stacked with college graduates. I didn’t know what I was getting into. Many of us don’t. I was a goddamn superstar for even leaving our half of the state to go to school. For a quality private school, no less.

     That’s my rant for the night. Back to homework.

261. My understanding is that the big athletic programs (i.e. the ones where coaches make ridiculous salaries) more than pay for themselves, which is part of why schools love to have them around. My knowledge of faculty salaries is largely limited to the law school realm (though the top undergraduate professors — the ones who have public intellectual creds and could go outside of academia if they wanted to — also make big money and are already fairly concentrated in elite schools), but outside of that I frankly don’t know where the increases in tuition are going. It can’t just be facility improvement, most schools aren’t spending that much on new/renovated buildings.

262. @Esti,

     Take a look at these (Discussing infrastructure projects and the connection to bond financing):

     http://www.oudaily.com/news/2011/mar/09/rising-costs-increase-tuition/
     http://scthenerve.wordpress.com/2011/08/23/tuition-link-raises-questions-about-usc-building-projects/
     http://keepcaliforniaspromise.org/wp-content/uploads/2009/10/They_Pledged_Your_Tuition.pdf

     I’m not saying that’s *why* tuition is going up, by any means…I just think its part of where the money is going.

263. You criticize this author for having student debt. I will owe over $250k when I finish. I currently have two bachelor degrees (Psychology and Sociology) and a masters degree (Clinical Psychology), and soon I will have my doctorate (Clinical Psychology). This was the only way I could do what I’m most passionate about. While I love my education and I love what I do, why should anyone have to pay more for education than they’d pay for a house? Especially when you factor in interest rates. I’ve been in repayment for 3 years and I’ve hardly made a dent. I’m afraid of what will happen to me in the future.

     I pursued the highest degree possible to have a job I love, help the people that need it most, and to have a better life and provide for my family. I don’t know if I’ll be able to do that with this massive student loan burden.

264. Esti: the top undergraduate professors — the ones who have public intellectual creds and could go outside of academia if they wanted to — also make big money and are already fairly concentrated in elite schools

     That’s just not even slightly representative of even the most prestigious professors at even top-ranked universities. They just don’t make that much, and very, very few are “public intellectuals.” Steven Greenblatt is trying to make the jump now, but I don’t think his prospects are good.

     Esti: most schools aren’t spending that much on new/renovated buildings.

     Believe me, most schools are not spending half of that on faculty salaries. As someone else mentioned, what they’ve been doing is outsourcing labor to adjuncts so they don’t have to pay benefits or provide office space, and then figuring out ways to get the few of us who are left full-time to do all the admin work.

265. My understanding, by the way, is that a lot of money is required for necessary scientific equipment, and for all the frills that differentiate a private college from a public one. The reason public tuition fees are going up as well is because supposedly “public” universities have seen a significant decrease in the proportion of funding that comes from state coffers over the past few decades.

266. Esti: I frankly don’t know where the increases in tuition are going

     At many schools, tuition only pays a small fraction of the operating budget. I looked up the 2010 operating budget at Yale (because that’s where I went as an undergraduate, back before the Flood when tuition was probably about $5,000 per year, and I still have some residual fondness for the place, much more than for Harvard Law School, which — for me — was an incredibly bleak and depressing experience. I was in the same first-year class as Scott Turow, if anyone’s ever read OneL!). Anyway, Yale received about $433 million in tuition and fees (from undergraduate, graduate, and professional schools). $180 million went to funded scholarships based on need. $185 million to faculty salaries. $433 million to staff/administration salaries and wages. $158 million to employee benefits. $70 million to utilities. $267 million to interest and capital replacement. And so on. Most of the money to pay for all that comes from endowment income (which, obviously, is the big advantage that Yale and a small handful of other schools have over all the rest).

     Neither Yale nor any other school gets rich on tuition.

     I won’t pretend to have any kind of answer. Except that it makes me feel ill to read all these stories, and that I passionately hate the idea of any kind of “solution” under which it would be impossible for anyone other than the wealthy to study anything but supposedly “useful” STEM-related fields.

     I do know how fortunate, and privileged, my son is — he knows, too — that there’s been enough money from my ex’s parents, given from the time he was born, that the only loans he’s had to take out in his four years at Chicago (he graduates in June) are the subsidized Stafford loans he was eligible for. I would guess they total about $20,000, and I gather that the accumulated interest while he’s been in school gets paid by the federal government, and that if he ever goes to grad school his payment will be deferred further while he’s there. I’m equally grateful that after my own mistake in going to law school rather than to graduate school in history or maybe Egyptology or Assyriology (it was the mid-1970’s, and I was scared by all the stories back then about the incredible difficulties of an academic career), I’ve successfully discouraged him most of his life from repeating it by going to law school (not that he ever had an interest in it), and have always encouraged him, perhaps foolishly some would think, to have a life doing something for a career that he actually enjoys (unlike some people!) — in his case, eventually, an academic career in art history.

     Even so, he knows that any job he gets next year — or unpaid internship, quite possibly — probably won’t pay enough to make any kind of dent in the amount he does owe.

     I haven’t told him specifically, but I think he knows that as much and for as long as I’m able to, I’ll always try to help him financially. Sorry, I can’t stand it when parents refuse to help their kids financially after college solely on principle, or refuse to let them live at home in the interests of fostering “independence.” What are parents for? He’ll probably be living at home next year, if he gets a job in New York, going back and forth between me and my ex like he did beginning when we separated when he was 10. It won’t be ideal for him at 22 to be sleeping in the living room of my one-bedroom apartment half of the time (bringing guys home will be a little awkward, I’m sure), but at least we enjoy each other’s company a lot, and it’s the only thing that makes financial sense.

     He also knows that there’s no grandparent money left for graduate school, and every one of his professors — even though they’ve encouraged him to go to grad school and pursue a Ph.D. — have made very clear to him that it’s a good idea only if he gets into one of the top programs in the country and is fully subsidized; paying for graduate school in art history (in other words, taking out loans), or going to something other than one of the top programs, would not be a wise decision. He’s done some research, and just about every single person with a Ph.D in art history from any of the programs he’s interested in, in the last several years, has a good job. If he can manage all that (and I have every confidence in him, given how unbelievably brilliant and talented and kind and wonderful he is — it’s all true — and how much better with people he is than I am), then his job prospects will be far better than they’d likely be if he went to law school. Even a place like Harvard, not that I had a stellar career there — I was kind of depressed after my mother, to whom I was very close, died in a car accident we were in, two months before I began, and it didn’t help me feel any better when the boarding house I lived in my first year because the dorms were full caught fire one night while I was asleep. Not a good start, and not that I had an easy time of finding a job after I graduated, even in 1979. (I was possibly the worst interviewee ever; like many trans people growing up in this world, self-confidence and self-esteem were not my strong points at any time in my long and unsuccessful attempt to be, and live as, a man. I’m a little better now.) But I was lucky and did get a job eventually, and was also lucky that even though I was first diagnosed with my lifelong chronic illness in my third year of law school, my health didn’t really collapse for the first time until I was a couple of years into my job, when at least I could take time off to be in the hospital and still be paid. Most people aren’t as fortunate as I’ve been, in lots of ways, but unforeseen problems like that are something I’m very aware of. Nothing is certain in this world, and everything can fall apart at any moment, as I realized from early childhood when I first started to understand what had happened to my mother and her family in Germany. So I empathize with all of you. (And worry all the time, of course, that my son’s promising life could be affected by illness too, although, knock on wood and kinehora, he shows none of the signs that I already did at his age.)

267. So, I may miss some of the nuance of the system as I’m Australian, but to me this system seems to support gambling… hear me out… People are gambling with their lives that the big expensive school will pay off in a way that makes it worth attending, much more than the lower cost, lower prestige school. They take the chance that the advantages of going to the top school will outweigh the risks such as the cost. They gamble on getting a high paying job to cover the debt.

     So, in a way I can see where Q Girl is coming from, while I also appreciate the intensity of the pressure to take that gamble.

268. I’m working now at a private law school, and I was somewhat surprised to learn that our tuition is actually less than that of the state-U law schools.

     But I don’t think the tuition is sustainable. We had about 50 fewer students entering this year than we did last year, which reflects potential students deciding that taking on $100K in debt in a job market that didn’t just experience a temporary dip but a fundamental change wasn’t a rational choice. And this is the case across the country; the only schools that didn’t experience a decline in enrollment were those at the top of the chain. But they were filling their seats with less-qualified candidates than they were able to get in the past; one reason my school’s entering class is smaller is that we decided not to lower our credentials to get butts in the seats. That may not be sustainable, either, if the applicant pool keeps shrinking.

269. I don’t think the market for law school graduates is ever going to go back to what it once was. Anyone interested in that subject might want to read this thread on a forum for parents with children in high school, college, and beyond: http://talk.collegeconfidential.com/parents-forum/1004653-current-supply-demand-lawyers.html

270. @Natalia

     When I was at my lowest – physically and mentally – the brief thought of suicide flickered in the back of my head. I thought – OK, this is never going away, and surely I’m one of the few people who gets stuck like this. I’m too sick to make a lot of money, but not sick enough to be called disabled. They will always be after me. I should just beat them at their own game.

     One of my lowest points was when I was sitting in my chair considering just lying there until I died… and then I realized I couldn’t afford my own funeral. I was too poor to die What a horrible, horrible zombielike feeling; but it propelled me to keep waking up every day. You can’t lay down and die. You can’t afford it.

271. As a non-USian who went to grad school in US (fully supported by TAships and fellowships) what I saw among the undergrads was a huge optimism in how much they’d earn after they graduated. In India (where I come from), people have a pretty decent idea of what you should try to aim toward, if you want money, go for the engineering/MBA route. If you want a softer life, try to aim toward academia, you won’t earn that much, but you’ll have a more relaxed life, and be vey, very wary of debt. Both lenders and loan takers are wary of giving those students money who may not be able to pay it back.

     Among Americans though, I was surprised that people had enormous loans regardless of what they may eventually earn. People doing things like Women’s Studies or African American studies and other majors that have really limited markets. I do believe though that lenders should be held equally culpable here. They should have looked at what the student might be worth in the future.

272. One of the funny things about the steep hike in tuition is that it’s happened at exactly the same time as tenured professors have been replaced by adjuncts, aka temps with no benefits. There may be some rock star professors that are getting paid ridiculously well, but as I understand it the average cost of instructors has gone down while tuition went up.

     Exactly right — if by “funny” you mean something more like “totally fucked up”, and I think you probably do.

     As an older freshman, I was better situated to be friendly with my profs than with my student-peers, so several of my closer friends from college were my teachers. I was hearing about their end of this from them in the 90s, while on my end, my tuition hiked every single year I was in school and I had to look harder and harder for quality classes.

     I had to drop out my senior year because I got a neurological/autoimmune disabling condition. So I didn’t even get the damn degree I’ve spent the past 10 years paying for, with another 10 years of payments to go, on disability income, WHEEEE! But I kept an eye on things for a while (kept hoping to go back and finish but my sketchy health never allowed it), and the tuition at my college just continued to jack up while as many of the quality profs as could effectively do so changed their stations, and cheap adjuncts replaced them.

     I went from ’96-’99, and this line of the thread made me curious, so I just surfed over to my college’s admissions page to learn that a new in-state freshman this fall will have to pay 172% more than what I paid.

273. Um. Q Grrl made a budget and is currently living off of student loans, right? So why the hell would anyone take her seriously?

     Am I the only one who couldn’t give a fuck about someone’s opinion until they’re actually in repayment?

     And FFS, if you’re going to live in abject poverty by not going to college or live in abject poverty by going to college, why wouldn’t you go? The only difference is that the dominant narrative says you won’t live in abject poverty if you finish school – which, I think most of us know in hindsight is only kind of true if you manage to finish a professional degree.

274. Addendum: professional degrees are increasingly worthless too.

275. Step one, bring consumer protection back for student loans.

     Step two – now that’s where things get really tricky – because clearly, there are better examples of how higher ed should be run out there. But I don’t know what works best for the U.S. Though it’s becoming increasingly obvious that just standing back and going, “Wow, something’s fucked up here” is not going to be enough.

276. Donna L: I don’t think the market for law school graduates is ever going to go back to what it once was.

     No, but it’s not like there aren’t jobs for lawyers out there. If tuition comes (way) down, graduates can pursue the kinds of opportunities that debt has priced new lawyers out of for many years now.

     One of the justifications for high tuitions was the existence of $160,000 starting salaries, even though that represented only a select few positions that were unattainable for the general run of lawyers. That had the perverse effect of forcing students to pursue those jobs to the exclusion of, say, public-interest jobs.

277. I’m working on my dissertation right now and hoping to be a professor one day. And after some teaching experience at an elite private university, let me tell you something, Q Girl. Someone as thoughtful, articulate and intelligent as Natalia definitely does have a right to be at any university that accepts her, and the same goes for thousands of smart, talented kids who don’t happen to be rich. As far as I’m concerned, Duke was lucky to have her. And our system should be set up to encourage people like her to stay in the US and contribute their considerable talents to our economy, rather than burdening her and so many college graduates with the kind of debt that inhibits their ability to be healthy, productive members of our society. (I’ll add a caveat that when I say ‘healthy’ and ‘productive’ I realize that is not always an option for everyone. But student debt certainly shouldn’t be the prohibitive factor)

278. More private institutions are in the position to be able to do what Amherst College does…go check it out at amherst.edu/financial_aid Certainly not the answer for everything or everybody.

279. *just a thought on policies that can and are helping..

280. Kay, how does that work in practice? Does Amherst give more need-based scholarships?

     On a separate note, I think many (if not most) people are unaware of their rights and responsibilities when it comes to major loans – and frankly, entrance counseling for student loans is a joke. I would argue most people need to take out a major loan at some point in their life (car? home? education? etc) – and as such, it really should be a mandated part of K-12 curriculum. As Natalia and SO MANY PEOPLE find out later – you don’t know what you don’t know.

281. I’d like to point out that if you’re smart, and you foresee a good career in an industry that makes a lot of money, and you do the math, and you factor in the prestige issue, and all of that comes out to say “yeah, this is expensive, but it will be worth it, because $40 K will be easy to pay off once you’re making $100K a year…” AND THEN YOU GET SICK AND CANNOT WORK… it doesn’t matter how fucking smart you were about your choices and how much research you did and how well you understood the options, if the only mistake you made was thinking that your health would not collapse out from under you when you were 26.

     Whooo yeah. I have done almost everything “right” through a mixture of privilege and hard work and luck — my parents were able to cover most of my tuition (after the 2nd mortgage on the house) so I only took out ~$20k in loans, I got good enough grades in undergrad to make it into a Ph.D. program, and because the program is in STEM I receive a stipend that is enough to live on every year (and I should be pretty employable once I graduate, at least somewhere) and while I’m in school I don’t have to start paying back my loans. So everything should be perfect, right?

     …Except that currently I’m on my second medical leave of absence in the last 6 months, because all the depression/anxiety/OCD I though I’d had a handle on in childhood, high school and college is now back with a vengeance and not responding to the treatments that used to work. So if I can’t get my brain fixed, and soon, I will run out of money (no stipend while I’m out of the lab) and I’ll have to drop out of the program, at which point my loans will enter repayment, and who knows if I’d be able to find a job (or be able to hold said job, on account of crazybrainsuckage), not to mention my very practical and lovely plans — I’m in STEM! I’m doing what I love! It’s a magic success bullet! — will be derailed for who-knows-how-long.

     And I’m still not totally screwed compared to lots of people, because if they had to my parents could probably shoulder some of this for me and I wouldn’t end up in a gutter or anything, I’d just be a huge burden on them emotionally and financially. I could totally move back into my room from when I was a kid and they could take out more loans to pay for my debts. So that’s a “best case” scenario if my brain doesn’t get back on track. Yay.

     And this is where I did EVERYTHING right, and had pretty much every possible advantage in the world! Anyone with less than that gets my complete and utter sympathy because if my upper-middle class intelligent competent lucky pampered ass can be potentially fucked like this then really nearly anyone could.

     (Holding out hope for the brain, still! If that works out I’m back on track and I will be so incredibly grateful. Because that will be pure fucking luck and I’ll never claim otherwise. C’mon, serotonin!)

282. And I’ll chime in that Ivy Leagues seem to give better financial support than many “less expensive” schools. My sister went to an Ivy League and with her grants and scholarships she actually ended up paying less than I did, even though the tuition listed for my (private liberal arts) school was like $10k per year less than hers. :p

283. jor, you’re absurdly wrong about “little impact.” The whole system is based on nobody worrying about the ability to repay, and as soon as the debts become dischargeable, even only upon showing of hardship, then lending standards tighten. As soon as lending standards tighten, the pool of applicants at each price point at each student quality point shrinks and schools can either take less well-performing students and maintain the class size, or take smaller classes, or lower the price. The loans won’t just go up a few points because the risk of default is already high, it’s just that right now, no lender ever has to right off the default because the defaulted loans are like zombies that never die. If they were dischargable, half the private loans would disappear overnight and the price points of every private university in America would be untenable next year.

     Nope. This is something people seem to be missing. Ivy League and other top schools would still fill classes with spectacular students at full price. Yale Law School is the no 1 law school in the country and could fill its class 3 times over with students who score above the 99th percentile in the LSAT. I doubt that if private loans disappeared, Princeton undergrad will suddenly be scrambling for students. There is too much of a correlation between wealth and academic success. It’s not dispositive but there are enough smart rich people (in the world, remember, foreign students would presumably pay anything). No, what would happen is that the market would correct so that supply equaled demand. Suddenly the thousands of law students getting into debt at terrible schools when there are no jobs would stop. It would close half the graduate schools in the country but the most privileged and elite ones would remain (probably get more competitive). I’m not sure that would make things more equal, though.

284. @PrettyAmiable (from the Amherst College Website)•Amherst meets the full demonstrated need of every admitted student. So if your family shows that it can pay only a small portion of tuition and costs—or maybe none at all—Amherst pays the rest.
     •Amherst offers generous scholarships. In 2010-11, Amherst provided more than $41 million in scholarship aid to about half of the student body. The average financial aid award was over $41,000.
     •Students graduate from Amherst with no debt. Since the 2008-09 school year, students are no longer required to take out student loans as part of their financial aid awards. Amherst is among only a handful of colleges and universities in the country that do not require their students to acquire student loan debt in order to pay for their undergraduate educations.
     •Amherst is need-blind for both domestic and international applicants. In the 2008-09 admission cycle, Amherst extended its need-blind admission policy for domestic applicants to international applicants as well. This means Amherst will make your admission decision without considering whether you apply for aid or to what degree you have financial need.

     I did not attend Amherst College but live in the area so it was something that I have been aware of. I’m guessing as with most programs there may be some issues that arise when in actual practice that are perhaps a bit more challenging than the words on paper convey. However I believe that this policy is probably exactly what it is…..graduates without student loan debt.

285. Kay

     hmmm…the students graduate with no debt, but what about parents? I went to another of the five colleges and while I had debt, it was all manageable and NOT from places like Sallie Mae. My parents however – while again, the loans were NOT Sallie Mae type loans and manageable for them (but wouldn’t have been for me) were significant.

     That said, while not everyone has the endowment to be needs-blind and offer all grants no loans, more places need to at least do the first step: admission and aid are a package deal, admission is not granted if they can’t also offer enough aid.

286. jennygadget: more places need to at least do the first step: admission and aid are a package deal, admission is not granted if they can’t also offer enough aid.

     I strongly disagree with this. Decades ago, when my mother applied to college, you put your parents’ income and assets right there on the application, and whether or not you were admitted depended on your ability to pay. She was terrified that I wouldn’t get into the college I wanted to go to because of her low income in the first couple years following my parents’ divorce, and kept encouraging me to lie on the financial aid application until I explained to her that they no longer did things that way, that admissions was need-blind and that the financial aid application went to a completely different office than the application for admission.

     All doing away with need-blind admissions will do is make the chasm between tiers of education all the more unbridgeable for the non-wealthy.

287. jenny gadget,

     according to the college, there is no debt, student or family. That said, it is just one attempt. Amherst College is highly competitive and selective so good luck getting in. I’m of the opinion (as are many) that higher ed. should be realistically within reach for anyone who so desires. I too have tens of thousands of student loan debt (less than $30,000) and am struggling to feel positive about repayment. When I was signing for these loans I knew what Iwas getting into. No one should have to sell there soul to get a degree but I also feel there should be better loan counseling. I knew students with Sociology degrees with over $90,000 of debt at graduation. That is absolutely ridiculous and unacceptable in my opinion. Allowing students to sign for everything offered is setting them up for so much financial pain in the future. Some degrees will pay off and do require deeper loan debt but, allowing (supporting) undergrads to accept far more than they *need just sickens me…and YES! The cost really needs to just be more affordable to begin with…….great discussion.

288. Kay: •Students graduate from Amherst with no debt. Since the 2008-09 school year, students are no longer required to take out student loans as part of their financial aid awards. Amherst is among only a handful of colleges and universities in the country that do not require their students to acquire student loan debt in order to pay for their undergraduate educations.

     Right, I clearly read the website since I referenced this exact page. What I’m saying is that if they aren’t expecting you to take out loans, you need to bridge that gap some other way. So my question is are they instead giving more need-based scholarships than other institutions? This page doesn’t answer that.

289. Hey there PrettyAmiable,
     Only going off of what I understand from the website and through living in the community….YES THEY PROVIDE WHERE THE FAMILY CANNOT!!(based on their formula of different factors) through work study and grants…loans are certainly available and used. If I am wrong and I don’t really care so much about that, then maybe the College needs to be more clear. My original comment was to share an institutions attempt at the debt that faces individuals and families surrounding college costs. I also stated that (vaguely perhaps) in practice it may be less thrilling than it is on paper. The only way to know for sure is to talk with someone at the college or a student who currently has an aid package there. None the less, I still believe that it is a strong attempt to address the problem. ‘Wasn’t looking for a battle, I am in the end someone who believes that college costs got out of control a long time ago and never should have been in a place that left so many unable to reasonably afford. thanx.

290. EG

     Sorry, I didn’t make it clear – if one IS going to do that, one also needs to admit at least a certain percentage – a majority – of students without looking at need. Mount Holyoke was Needs Blind for several decades, but is now what they call Needs Sensitive. Which means – in their case – that when they go through the admissions process they first look at need combined with ability, then when they have admitted X number of students they go back to Needs Blind admissions. It’s not perfect and I would prefer they go back to Needs Blind and I actually happened to have been one of the students who rallied and marched in order to try to convince the Trustees to change their mind when they went that route. But at the same time I am not privy to their final budgets, and I know that at the time of the change, the endowment had ceased to grow.

     To clarify, I did not mean that colleges should only take people who can pay (and a rare few they give scholarships to) just that being Needs Blind But Stingy With Financial Aid is not nearly as useful as being Something That Approximates Needs Blind And Is Willing And Able to Help Every Student Admitted Pay Their Tuition.

     The problem with doing Needs Blind admissions without the promise of realistic financial aid is that you get people admitted to schools that they can never afford to go to and never will go to without realistic aid and how is that useful to anyone? (and yes, that also happened to me) Especially when predatory lenders are willing to step in and supposedly save the day. Granted, dealing with the predatory practices is more important and more useful in the long run. But still.

     I would love to go to a system that is completely Needs Blind – but that is going to require a lot more government support than is going to happen anytime soon.

     Kay

     I’m skeptical. Perhaps Amherst’s endowment is much larger than I think it is – it is Amherst after all – but I don’t see how they can actually do that financially. Also, they say the family will only have to pay what they can afford, but then that the student will graduate debt free. That in itself is tricky language – my parents may have been able to pay for more of my tuition up front than they did, but not with several sibling near my age – that’s part of why my package from another in the Five College Consortium included loans for my parents.

     Without any other clarification, I’m leaning towards assuming that they are doing admission and aid the way Mt Holyoke was doing it when I was admitted: Needs Blind Admission; fin aid packages that don’t just cover tuition, but are also realistic in terms of the amount of debt student and parents will have to take out in the end; most students fin aid packages include a sliding scale of loans and grants (in the end, my parents and I paid for maybe half of the stated cost of the school, with the half we did pay for being covered by Direct Federal Loans, not Sallie Mae, etc.) – but with the small addition of not including federal loans for students in the aid packages. Which is very doable, as the federal loans for undergraduates (unless it’s changed and I haven’t noticed) amounts to less than half of the amount Natalia is talking about. For the entire four years. Because the federal government has strict limits on how much it will lend undergraduates.

     And that loan? Yeah, I’ve already paid that off. Now, my graduate school loans, however…

291. Thanks for the clarification, jennygadget. Now that you’ve explained, I completely understand what you mean, and it makes far more sense.

292. Jen in Ohio: Not in the US, generally, no, even dying does not eliminate most of your debt.

     You’re right about all that Jen. I guess what I meant was that you personally won’t have to pay your debt after you’re dead because, well, you know. And also that no one is actually forced to pay off your debt with their money (as far as I know. . .funerals might be an exception?). They might not be able to inherit anything, all your assets might have to be sold, but unlike in some societies, the debt doesn’t literally pass on from generation to generation. Still an egregious system though, no doubt.

293. Talking about private schools is a red herring. Let’s talk about public schools in the US. For in-state students at the University of Washington in Seattle it costs about $24k a year to go here, if you include books and rent (student housing costs about $900 a month). Tuition here is based on the quarter system.

     At University of Austin Texas, it costs the same, give or take about $100 bucks. This is based on the semester system. University of Tennessee Knoxville is close to the same, once you also figure in rent and food. These are three public universities in different areas.

     Now, assuming your parents can’t pay anything, and you weren’t able to land scholarships, the maximum amount of financial aid you can get from the federal government is $5000 per year, and that’s if you’re really incredibly poor. That leaves about $15,000 a year for you to finance at a public university.

     Community colleges (two year) are more affordable, but the classes are often less rigorous, and the professors have few, if any connections. Most people going to them are disadvantaged: poor, immigrants, parents, older students, disabled. You have fewer (or no) after school activities that help you build networks for mutual study and support, and professors don’t have the connections necessary to help you start thinking about grad school or research. These places only offer Associate’s degrees, which are practically useless unless you have experience in your field. The best you can do with these is transfer, and you’ve already missed out on networking, mentoring, and internships for the first two years of your college career.

     Funding possibilities are even bleaker for older students. Many states won’t offer any sort of state aid to older students.

     Unless you have scholarships, or parents who can pay, you WILL end up with loans, and the rates are extortionary, and it’s pathetic that there’s no way to declare bankruptcy or hardship. In many ways, suicide is the only way out.

     Also, you may say “choose something marketable.” What if you don’t have any aptitude in math or science? That lets out medical, engineering, and computer science as majors. What tends to be left are things like teaching, sociology, linguistics, and so on. These things are undervalued and underpaid, when in reality they require just as much education and just as much work, simply a different aptitude. This is a systemic problem, and it will never be fixed in the US.

294. For those who are bad at math, after reading my last comment consider this: If tuition costs $20,000 a year at a public university and the max federal financial aid you can get is $5k a year, and for whatever reason you don’t qualify for state aid (which happens in many states simply if you’re “too old” or didn’t go to high school there, even if you’ve been paying taxes there for years and living there), that leaves you with $15k a year to finance. Say a 4-year degree (which is actually increasingly useless…most jobs, especially in the humanities, require at least a masters and usually a doctorate). But say 4 years for a bachelors. 4 x 15 leaves you with 90k in debt, which can easily double or triple before you can pay it off, through the mechanism of interest over the years. This is for a PUBLIC UNIVERSITY. If you’re confused, read my previous comment where I detailed the costs of three universities.

295. Yeah, LotusBen, I got your meaning. It’s just that I’ve run across an astounding number of people who are tragically misinformed about How Money Works When Someone Dies, so I tend to take an opportunity to talk about it a little bit whenever I see one. Thanks for the opening. May you live long and prosper…but not so much that you don’t ultimately die a happy old person who owes Visa way more than your estate can pay, heh.

     PS. Funerals are of course customary, but optional, so no one is forced to pay unless they contract for one. A lot of funeral homes offer deals for pre-arrange/pre-pay. Disposition of human remains is required but if there’s no money for that, the State generally pays for a modest disposition.

296. Just to add more bullshit to the pile:

     At the Canadian university where I obtained both of my degrees, students are only eligible for bursaries if they have been approved for the maximum student loan amount. Read that again and let the meaning really sink in: in order to apply (and potentially receive) a bursary, which is essentially a grant that is doled out based on financial need, you need to go out and accrue a huge chunk of debt you know you can’t afford. So anyone who actually attempts to graduate debt-free by avoiding student loans and paying for their education with savings/work income can’t even apply, regardless of what their level of financial need may be.

297. This is a systemic problem, and it will never be fixed in the US.

     I hope you’re wrong about that “never” part.

     Sigh.

298. Well, a bit late perhaps, but anyone still reading this thread, this post on Jezebel made me think of this thread. Look at that ballooning student debt! Anyone receiving advice in the last 10 years or so on student debt from someone who already graduated and was using their own experience as an example was getting bad, outdated advice. And yet, who else would you go to when you’re young and making a major decision like going into debt? The people you know who’ve already been through this! It’s a vicious cycle.

299. Thanks for that link. The student loan bubble may burst after all…

300. Kay: YES THEY PROVIDE WHERE THE FAMILY CANNOT!!

     NOT WHAT I ASKED BUT OKAY.

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302. There are a huge number of solutions to this problem…one would be to freeze accruing interest while a debtor is indigent and keep student debt off the credit report, we don’t need the finality of a bankruptcy discharge, just a system where people have an actual shot at repayment and that does not lend itself to abuse like the old dischargeable student loans did. Once the debtor has income a garnishment to make the payments could easily be put in place. We can fight about the numbers, that’s for cost of living experts etc. Yes you need to pay it back because that money is slated to be lent to the next student.

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