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Hernan Castillo is treading water, trying to survive under the weight of $5,200 in credit card debt and $30,000 in student loans. He’s making payments on time, but the Orange County, Calif., resident sees little hope for getting out of the warehouse job he holds and landing a job as an accountant, the field in which he earned his degree.
College grad: ‘I wish I’d gone to prison instead’ - The Red Tape Chronicles - MSNBC.com (http://redtape.msnbc.com/2009/05/college-debt-so-crushing-grad-says-i-wish-id-gone-to-prison-instead.html#posts - broken link)
The crux of the problem is not the degree, it's the opportunity cost. In other words, if said college degree hadn't saddled him with 30K in loans plus another couple grand on living expenses during a 4-year period of no substantial income, he would be no worse off TODAY than had he not pursued the degree and not attained a livable wage job anyways. It's not the not having a good job that's choking him, it's the not having a good job and having that noose on his neck on top of it that's killing him. If degrees are the high school diploma of the 21st century, as exemplified by cases like this individual, then it should cost you what a diploma costs people today....$0 for all practical purposes. Of course, it will be a cold day in h$ll before the DOEd/ universities/administrators/tenured professors/other cronies of the system lets anything of that magnitude to occur.
College costs are overinflated, they are not worth it. People feel trapped in having to pursue it because their peers are racing to the bottom. The only way to alleviate the situation is to devalue the undergraduate college degree faster than people are willing to endebt themselves to attain one. In practicality this won't happen, but what can happen is to attack the problem from the main vehicle of pain, the money supply. You close off the student loan money supply and voila, people stop committing financial suicide. Make student loans clearable at bankruptcy and voila, you remove the financial incentive for the student loan industrial complex.
If a house provides you a roof over your head but you paid too much for it and find its investment value not worth it, you default on it and the bank takes the house and you walk away with a credit ding that at least in theory would hinder you from borrowing again for an amount of time. Why should college costs be different? The degree doesn't even guarantee an utilitarian value like a house or a car does, yet costs the same or more. You should be able to walk away from a botched financial investment in the same manner you can a house or a car. Heck, take the degree away if you want to make an apples to apples comparison. Nobody is trying to argue it's possible to securitize an education anyways (other than a paper certificate saying so...weak), would you be ill-served if somebody 'took away' your high school diploma? Nope, you still think how you think and you still don't know how to think the way you don't know how to think. If it was free after all, there be nothing to securitize anyways, but as I mentioned before, this outcome is unlikely.
In the absence of either of these options (free education OR relinquishable debt/malinvestment) then I'll be telling my children to either forego a college education or pursue one on the cheap. And by cheap I mean the equivalent of financing a used vehicle, adjusted for inflation. If they can't attain that kind of financing to secure a college education, then said education is not worth it. I sure as heck won't saddle myself with an additional de facto mortgage at the age of 50 just so my children can continue to prop the system at their own expense, I might as well bypass the process and buy them a house where they can then pursue whatever they wish without having to starve or not have enough to cover shelter because they're repaying an uncatchable debt that doesn't even provide them with a utility value. I have full faith the college educational system will collapse by lack of pawns and their debt in the next 10 years, the bubble is not sustainable.
This is a good warning to future graduates. Society has been pointing out the foolishness of student loans for quite sometime. And don't even talk about the credit card debt. But, given the choice between the loans and getting a minimum wage job, the choice is usually the loan. It shouldn't be that way. One day, we may get back to the idea that a person could work their way through college. Borrowing money is not the answer.
But what is done, is done and we can't turn the clock backwards and start again.
This is a good warning to future graduates. Society has been pointing out the foolishness of student loans for quite sometime. And don't even talk about the credit card debt. But, given the choice between the loans and getting a minimum wage job, the choice is usually the loan. It shouldn't be that way. One day, we may get back to the idea that a person could work their way through college. Borrowing money is not the answer.
But what is done, is done and we can't turn the clock backwards and start again.
It's very difficult to "work your way through college" these days. In fact, it always was. My father did it, going to 'night school' and it took 12 years post high school. Actually, the last 1 1/2 yrs he had enough money saved that he went full time. This was during the depression. Many people don't have the "sticktoitiveness", or frankly, the good fortune to be able to do that. Dad was lucky he worked a straight daylight shift, so he could take night classes. Some jobs jerk you around, especially in retail these days, so you never know when you're going to be working, so you don't know when you can sign up for a class. Some bosses don't make it easy, either. Most "working one's way through" consists more of scholarships won, GI bill, employer paid tution, etc.
Nowadays, the University of Colorado costs ~$5000/yr in tuition (in state), another $1000/month in R & B (approx), and 'night school' offerings are very slim. The financial aid system for need-based aid is very much biased in favor of loans and jobs, not grants.
Last edited by Katarina Witt; 05-16-2009 at 02:03 PM..
Reason: add instate
College costs are overinflated, they are not worth it. People feel trapped in having to pursue it because their peers are racing to the bottom.
In California the costs are pretty reasonable. Where this poster lives there are numerous community colleges and Cal states that one can go to while still living at home. His debt is at least double what it needed to be.
One day, we may get back to the idea that a person could work their way through college. Borrowing money is not the answer.
Get back to the idea? Give me a break. Generations before this one did not "work their way through college". There were a number of generous programs that helped people pay for college (e.g., GI bill) But after the boomers benefited from affordable education, they destroyed it for the next generation. Generations before the boomers did not go to college in large numbers, it was primarily the well to do.
There are many states where its impossible to "work your way through college" even if you live with your parents. Student loans are often required. The problem is not the student loans, its that people are not using them intelligently. They will go to the expensive school "because its better", without thinking about whether they will even have a higher earning power by going to the better school vs the local state college. They will spend money on crap they don't need, etc.
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