What REALLY cheezes me off, is I remember the "bad old days", when you had to apply to your BANK for a student loan. And they would look at your grades, your intended major, and the income potential you had BEFORE granting the loan.

But now, EVERYONE can get huge amounts of school loans provided by Uncle Sam with no questions asked, and the only people REALLY benefiting are in academia, where tuition and fees have grown FAR past inflation, but, curiously, track with Federal Loan and Grant limits.

I'm in agreement with Mike Rowe: we need a LOT fewer people going to college, and a lot more people in vocational ed, learning a skilled trade. And the really amusing part ?? Most trades pay better than most "college" jobs, at least for the non-professional programs. . .

With you 100%. It took me 5 years to get though school, patching together community college credits, academic scholarships, working part time during the school year, and full time when I ran out of money to get my degree. I graduated debt free, and my education was worth it because of that. What in the world are parents and kids thinking when they look at the "investment" of a college education? Who knows, but sure as shootin', the elite ruling class know what do with people in debt. Great post as always, Amy.

I keep mentioning to my sister about the 25 year old guys in ND and TX working in the oil fields and are making a $100K a year.

But she wants her 16 year old to go to college. And apparently thinks that it will be worth it.

Unless it is a mostly paid scholarship -- I'm trying to talk her out of it.

Totally agree; especially this part:

"The idea that I would incur massive debt through student loans was just too stupid to even fathom."

And that is part of the problem; too many people are incurring debt (as is the US government) without thinking that it really does have to be paid off.

This line in the article also stands out:

"Borrowers with debt loads above $57,500 would make payments for 25 years."

Pay off money that you spent in 4 years for the next 25 years. WTF?!

As a kid I received savings bonds, money, etc. from grandparents, aunts, and uncles for my birthday and Christmas. As a kid I hated that; but as a young adult going to college I couldn't thank them all enough. Because those savings bonds and part-time jobs while in high school and later college paid for college. I couldn't imagine how bad it would have been to have a massive loan hanging over my head when I graduated. (To this day I HATE the smell of fresh cut grass since that was what I did every summer, ALL summer, from about 12 years old until I went away to college. I even, though unemployed, pay someone else to cut my mother's grass since I cannot stand that smell!)

I am so grateful to all my relatives, who no doubt would have loved to see me happier with a new toy at Christmas or my birthday; but, instead gave me a savings bond knowing that it will be better for me.

I am also grateful that my college had an "employment center" where local companies could list part-time jobs; knowing that they will be hiring a student whose main priority was school but would benefit from an income. Each semester I worked at a different place; but, everyone one of my bosses and co-workers were some of the greatest people I have ever worked with. I wish that I could now go back and thank them all giving me a chance by hiring me and keeping me out of debt.

Sadly, I think Obama's attempt to "forgive" student loans will work. Because even if it doesn't go through, the Democrats will use it as another "see those evil Rethuglicans don't care about you, they want you to repay your student loans."

Quote marks on "forgive" because even though the individual student might not have to repay the loan as future taxpayers they will be paying their own loan as well as everyone else whose loan was "forgiven."

While I sympathize with the position that in some sense loan forgiveness sends the wrong message, I feel it is necessary to note the following facts:

Instate tuition for the University of Michigan is currently at around 33,000 dollars per year (out of state you would be looking at more than 60,000 dollars per year).

It is for this reason that when people over the age of 40 and 50 look at the situation and say things akin to "back when I was in school I took on a part time job and worked over the summers" it fails to recognize the reality that the cost of college has become completely decoupled from inflation.

That is was possible to work your way through college back in the 1960's and 70's is great... but current students simply cannot earn enough to do that... even when they do exactly as you suggest.

Parents also don't generally have the 120,000 dollars per child available to cover the costs on their own.

These kids are getting seriously gouged, yet if they decide to not go to college then their job prospects are pretty dismal.

If you do not like the proposed solution what suggestions do you have to improve the situation that allows students to earn their degrees at a reasonable cost while going to the same types of schools you went to (I realize that community college offers a significant cost savings, but people in their 50's didn't have to resort to that when they had excellent grade, so why should current college students?).

Harvard isn't the problem, it's not the most expensive school out there, and has great financial aid.

The problems are no-name schools that lack the rigor and thus the prestige of the famous schools, but charge the same prices. They don't have big enough endowments to grand financial aid to everyone.

One thing though... how nice that your parents could pay for a state school, but aren't you in your 40s? Because state school tuitions now are more like private schools when you were in college. And THAT is the problem, to me.

I like the system here where schools are paid for by the government, but you only get in if you're good enough, and if you can't hack it they kick you out. Only a small percentage of folks go to college. The rest get apprenticeships... and many end up making way more money than the college folks.

Graduates of elite schools often have great jobs and big incomes. This doesn't mean that the intellectual content of those schools is quite valuable. Schools select people who have traits like intelligence and determination. There is little reason to think that it is the education (above a useful minimum) that is making the difference.

Don't Envy the Ivy Schools
--> easyopinions.blogspot dot com/2008/12/why-college-is-waste-of-money.html#envy

10/10/10 - EasyOpinions -> Washington Post by Jay Mathews

Who Needs Harvard?
10/12/10 - Brookings.edu by Gregg Easterbrook
Research by economists Alan B. Krueger and Stacy Berg Dale.

Quip:
Admissions Officer: Congratulations on being admitted to Harvard.
Mike: I am honored to do my partying at one of the finest schools in the country.

=== ===
Mathews:  [edited]  The Ivy League and other top colleges add no discernable value to the lives of their graduates. They attract students with strengths such as persistence and humor that lead to success. Applicants with such qualities do just as well in life attending schools like Boise State.

The atmosphere at elite colleges is similar to what you find at most colleges. The college years are for trying out new stuff. Undergraduates devote little time to absorbing academic riches.
=== ===

Have to put another coat onto the ivory towers.

Now now, let's not paint all heavily-in-debt students with a broad stroke. I am in dental school and have $150,000 in debt. I am going into a field with excellent job prospects and a high paying salary. There is no way that I could have made enough money to pay for DS out of pocket. It's not stupid to take out these large loans if you're going into a career with a high likelihood of being able to pay it off.

Now now, let's not paint all heavily-in-debt students with a broad stroke. I am in dental school and have $150,000 in debt. I am going into a field with excellent job prospects and a high paying salary. There is no way that I could have made enough money to pay for DS out of pocket. It's not stupid to take out these large loans if you're going into a career with a high likelihood of being able to pay it off.

Posted by: Katie at March 9, 2014 3:33 PM

I honestly hope it works out for you. And you are both a good dentist and a good businesswoman,

I know some dentists who have done very well, and others who have not.

A lot of the dentists who have done well, went into the military, and got their student loans paid off for them.

With those loans, and with the price ofd dental equipment, you are going to be fighting quite a bit of overhead before you see any profits.

My dentist told me his business is down quite a bit due to the poor economy, and people having to pay so much for health insurance.

I too, have student loans. Not the gobs and gobs many people have, but enough to make me think twice. When my mom mentioned possibly investing some money for my kids in lieu of birthday presents, I was more than encouraging... I basically sent her 529 plan deposit slips. She sends them a token present and a slip saying she made a deposit for college.

I'm not even working right now, but I would still say it's worth it for me. Whether it would be for others is another story.

Of course, part of my debt is from graduate school, and that will, when and if I go back to the workforce, be a bigger bargaining chip than the undergrad degree (and it was a helluva lot cheaper too).

Yes, we can argue about the right solution but let's not lose sight of the fact that our society offers 18 year olds huge amounts of money with little oversight in pursuit of a goal that we have told them is absolutely necessary to succeed in this world and then saddles them with debt that effectively cannot be discharged short of demonstrating that you are a parapaligic who will never work again.

Debt forgiveness is a terrible idea that will just perpetuate the problem. It would be nice if we were serious for once about solving the underlying problem, though.

As soon as enough of the Baby Boom generation dies off, the Millennials will have the votes to push through student debt repudiation. It's going to happen.

In a way I can't blame them. Our labor market today is rigged for credentialism. We long ago took away any means by which an employer might actually ascertain the skills or work ethic of a prospective employee. The only thing left, at least when young adults are concerned, is to look at the educational credentials and try to make a guess from that. Thus the credential becomes far more important than actual knowledge or skills. Colleges know that and know that they can inflate tuition since they have a more or less captive market, while at the same time it isn't necessary to actully teach students anything. Because, who's going to know?

However, the repudiation is going to result in an enormous economic upheaval as billions of dollars just vanishes out of the economy. Government will be seeking some other way to make up the revenue, which means we can expect a lot more of the sort of financial agression and piracy that we've become accustomed to getting from government. That means further loss of freedoms, more surveillance, and more bureaucracy. And, BTW, less medical care under Obamacare or whatever socialized-medicine scheme replaces it.

As for what the value of elite schools is: It's hard to tell because much of the student population of those schools consists of students whose future is already assured, by dint of family name and politiical connections. For those students, college is mainly an exercise in networking (and partying). What they are taught has little bearing on their future prospects. These students won't go to Boise State because the people there are not their kind. It would be a major faux pas.

Nicole: I'm familiar with the system used by a lot of European nations to select students for higher education. And I've got to say, as bad as our system is right now, the idea of govenrment getting to decide who does and doesn't have access to education makes me very nervous.

Of course there will be loan forgiveness. Let's not forget that the vast bulk of students who are going to college and getting worthless degrees are .... FEMALE!

It is for this reason that when people over the age of 40 and 50 look at the situation and say things akin to "back when I was in school I took on a part time job and worked over the summers" it fails to recognize the reality that the cost of college has become completely decoupled from inflation.

Basically the same thing that helped drive the housing bubble, and ultimate crash, is being played out again in the tuition thing.

Miguelitosd Says:

"And why do you think the cost of tuition has skyrocketed at such rates? Here's a hint: the driving reason is the gov't involvement in pushing cheap loans to anyone with a pulse in the first place."

And which generation do you think voted those governmental policies into place?

Here's a hint: it wasn't the 17 year old's who ended up getting saddled with the enormous debt that their parents encouraged them to obtain and voted into being.

In other words... the very same age group who created this crazy system which takes financial advantage of the young are the ones complaining how the young should handle the debt on their own and to leave them out of the equation.

That sounds like a shady deal doesn't it?

Artemis: I don't think anyone really voted for it. It's one of those things that evolved out of government sprawl. The problem is, now it's considered an entitlement, which means there is a huge support base for it: the education industry, parents, minority rights groups, etc.

As I said before, the Millennials will eventually have the votes to get a law passed repudiating most or all of the debt. And as I said, I understand the reasons why and I have a certain amount of sympathy. But there will be an enormous amount of ecnonomic upheaval when it happens. But as a Gen-X'er who has paid high taxes for most of my adult life and who will be approaching retirement age when it happens, I can see that it will have a big negative impact on em. There's a lot of talk among my age cohort about the "Smith and Wesson retirement plan", and this is one of the reasons why.

Cousin Dave Says:

"But as a Gen-X'er who has paid high taxes for most of my adult life and who will be approaching retirement age when it happens, I can see that it will have a big negative impact on em."

It is actually this attitude that I find both common and disturbing.

Baby Boomers are worried about protecting things like medicare and social security as they spent us into enormous debt and failed to provide adequate funding for our national infrastructure. They got cheap high quality educations and could even provide for a family with just a high school education.

Gen-X'ers also got many of these benefits (although some got eroded). They had a relatively easy time obtaining jobs out of college that paid them reasonably well, and had resources to invest during the economic boom times of the 1990's. They had money to raise families and are now only starting to become concerned that retirement looks a little bleak.

Millennials on the other hand cannot reliably find work that can sustain a family with just a high school diploma. Hence most go to college and get saddled down with thousands and thousands of dollars worth of debt just to get a job that doesn't necessarily justify the educational investment (but the alternative is to flip burgers... so that isn't much of a choice). The economy they have started work in has been one of the worst in history which will affect them for the rest of their lives because your starting salary predicts your overall wealth later in life. Because they have so much debt, many are choosing to delay normal life milestones like marriage and children. They also are being taxed for a social security system that may not exist when/if they can retire.

This was all set into motion while these people were children and didn't have the right to vote... so they couldn't exactly have had a hand in how things developed. The people who were supposed to be minding their interests were instead securing their own ability to go on cruises when they were 60.

What is your solution?... That millennials should just suck it up and take it for the team?... Be the sacrificial generation so that the boomers and gen-x'ers can enjoy life until they die?

From my perspective, the only fair way to fix this problem is for everyone to suffer a bit in order to fix it... and yes, that may mean that everyone gets a bit screwed so as to ensure that these young people can have a viable future.

The alternative where boomers and gen-xers get to keep riding high as the millennials just suck it up strikes me as remarkably unfair considering it was the boomers and gen-xers who generated the situation the millennials now find themselves in.

People who don't see this as being their problem are people who I don't have sympathy for when/if the "economic upheaval" happens. Economic prosperity on the backs of an exploited younger generation is not very defensible.

I am open to considering just about any solution other than "it's their problem, they can deal with it on their own... now what about my retirement".