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TurtleCreek80, and others who might want to respond, too - I was wondering if you would share what your opinions are regarding students who use their school loans for life expenses?
What I mean is... I know several people who graduated with a 4-year degree with $40K+ debt in the form of school loans, but I know for a fact that these people used school loan money for things like furniture, rent, groceries, etc.
When I asked them about this, they responded that school loans were for anything they needed while in school... so they felt it was OK to use their school loans for "life expenses".
One person even used school loan money to pay for baby stuff when she became pregnant while in college. Now this person is out of school with a useless degree (photography) complaining about the amount of debt "college" cost her. She works retail and is thinking about going back to college - using more school loans to pay her way.
These people all attended state/public colleges.
So - if you must do the school loan option... are you supposed to also use them to pay for things other than tuition and books and school-related expenses? Why does the government allow this?
The government "allows" this b/c it is nigh to impossible to work (much) and go to school full time, especially grad school, despite what some people will tell you. You have to live. A young undergrad might use the loans for tuition, and room and board in the dorms. An older student may use them to pay the rent, and buy some furniture, etc, for the apartment. My daughter took out her own loans for grad school, so I did not see the apps, but she told me there was an allowance for living expenses, travel, transportation, etc used when calculating the amount to be loaned.
One of her friends bought a car using her student loans as collateral. I don't think photography is a useless degree. Your friend could try to get a job at a newspaper, or something like that.
If you can pay for their college then do it. Our oldest went 6 years and the money train stopped. He went on to 2 music schools in NYC. One of them being Julliard. He has student loans for those two schools.
Our middle son quit school in 11th grade, spent several years travelling the US. Came home wanted to go to school - after first semester (whatever they call it now). After his frist - whatever it was - he was invited not to come back. He then went travelling around, finally came home, got a great job and the company paid 80% of his college. He got his degree after about 6 1/2 years, working and going to school at night.
Youngest - first year we made about 1200 too much for her to qualify for the Hope Scholarship. Next year they changed it. She went to school year round and graduated in three years.
An old boss of mine told me his MIL's take on the subject was that you owed your child/ren one college degree and one wedding. Owed is a strong word, but that's my motto and I'm sticking to it.
We have two grandchildren and have set up a 5/29 program for one and we're just waiting for the SS# to set up the other one.
Sometimes circumstances are that students can't afford to eat/live without loan money. In that case, I would have the following suggestions:
1. Live as cheaply as possible- multiple roomates, ramen noodles, no dinners out, no beer money, no travel. I get really irritated when friends complain about their high debt load but the felt "entitled" to live in a brand new apartment, buy tons of clothes, and fly to NYC to see their boyfriends using sturdy loan funds. One friend in particular - I always told her "you have to pay that back, you know?" and her response was always "no, I'm going to marry well and he'll pay them off"....let me tell you that girl is in her 30's and single....with $200k in loans for a fairly useless master's degree.
2. The student should ALWAYS try to make money during school, even if he must be creative. I was a notetaker for class and got paid $10-15 per lecture that I scribed. It wasn't a ton of money ($100-150/mo), but I had to go to class and typing the notes for the company helped me via rote learning. Can they babysit for professor's kids or church members? Most little kids go to bed by 7-8 and then you can study until parents come home and collect your $30-40 for the evening.
My mantra was, any little bit helps take out less loans. Basically, for every $1 you borrow, it will take $1.5-2 to pay it back. $75 text book will cost you $150- can you share with a friend somehow? $500 apartment will cost $1000- can you find a place for $400? No cable- use hulu or the network websites to watch favorite shows. Free wireless Internet is not hard to find. MAKE EVERY FINANCIAL DECISION COUNT!!!
Too many students see their loan check as "free money" and burn through it frivolously.
My loan money went toward tuition/room/board when I was living in the dorms, and tuition/rent when I was living in an apartment. I worked part time in a few different places at that point, plus was a street musician. I ate -very- well. My first day playing guitar in public, I was so excited that someone put money in my guitar case, that I closed the case after I made my first $10, walked across the park to the Ritz-Carlton, and ordered a cheeseburger and fries from the Ritz-Carlton dining room just to say that I could.
That was one thing that I never neglected - my meals.
Our intention is to help our kids as much as we can with college. There's no way to know how much that will be right now, ideally we'd like to pay for it all but that may not be realistic.
My husband and I both regret not going to college, it has been holding us back in our careers for a good few years now (we are early 30s). We will do whatever it takes to make sure our kids don't suffer the same fate in life. Neither of us had any encouragement or support at 18 and going to college simply wasn't an option for either of us then. We've both made attempts to study since but our circumstances have always made it impossible to see it through.
I pay/paid for my kids college education so they will pay for me in my old age!!!
That's a risk I wouldn't take. Just because you paid for your kids, doesn't mean they owe you anything.
And to the other countries thing, I do know that tax rates are like 50% of income and that would never fly in the US...Yes, American competition allows for innovation whereas a communist type government would not...this is what America is known for.
I guess it all depends on choices. I just wish I could give my kids a great education without spending a fortune. My parents tested into the university after which they decided which descipline to pursue...not only was the tuition free, but they gave you a stipend for living expenses.
I see that a common thread in all of the responses to the NYT article basically say that the girl should have picked a more useful major for the $100K price tag.
My parents were making $200K+ so my brother paid almost all of the tuition...they waived like $5K a year or something.
I just keep hearing parents aticipating putting their kids through college and what financial hardship that will be for them. I am taking the stance that if I can afford it, I will, if not, you're on your own. I'm not saying it in a mean way or anything, but I will educate them on the financials and let them make their own decisions. My parents said they wouldn't give me a dime...so a $30K school was not even an option.
The other side to the question, I guess at 18, and I remember, you have no clue what you want to do. I"m 29 and am just starting to get a clue. I think for people like this, community college or cheaper school is best. Save your money and go to grad school!
this is probably true, but you could also defer for a year or two before going to college if you truly have no idea what you want to do, why waste any dollars at all? i knew what i wanted, so i didn't face this choice, but i understand the dilemna.
Quote:
Originally Posted by zentropa
I think we need some clarification here. Do you mean a low-paying career or a low-paying entry level position? Because entry level positions do tend to turn into high paying careers for those who are well educated and have been taught how to play to their strengths.
What is so magical about a starting salary? It is a START. I think there is an epidemic of short-sightedness these days.
fair point. really i meant a low paying career. i'm thinking of people entering careers that have slower growth, so how would they manage a $700-$1,000 per month student loan payment as say, a teacher? it's doable, but very tough. and consider where it will get you...sure, columbia has an amazing program, so if you get in there, maybe it's worth the splurge, but some private school in PA vs one of the respected state schools in that field...is it worth the extra dollars? i'm not sure.
Name recognition is far more important for grad school than undergrad.
However, it is important in some industries. It's always a good idea to check the career services/ career fairs website at prospective colleges to see who recruits from there. If your dream is to work on Wall Street and no Wall Street banks recruit at school A, you should move on. If your dream is to work in fashion and graduates regularly get hired by Macy's, Neiman Marcus, The Gap, Target, etc for their buyer training programs, you have a "match." Or look on the company websites to see where they recruit.
it also depends on the region you work in. lots of NYC companies think highly of Baruch grads in business/accounting. but it's not very well known outside of the city.
i can tell you from experience, Deloitte pays attention to name and GPA heavily.
undergrad might not mean much if you're trying to get a job at a law firm, but undergrad might mean something to the grad school you're trying to get into to get to said law firms...so undergrad recognition can't be easily discounted. you have to choose the right path based on what your career is for sure though. i think we're saying basically the same thing though.
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