Some here are saying that younger adults are too naive to take out such loans. What other solution is there though? They can go to community college for a while and stay in state but chances are that they will still have to borrow some money.
Other options almost always exist: Military service, work for the college in exchange for partial tuition, attend part-time. Community college and staying in state will at least lessen the amount, if borrowing is deemed unavoidable.
I think all too often people -- especially young people -- are quick to say, "I want this. It costs $$$$$. Guess I'll have to borrow." And they don't even consider the other paths.
"Financial Investment" had nothing to do with it. My Mother had always dreamed of being a nurse, but my Grandfather refused to sign the papers to allow her to go to college in 1966.
So after her children were raised and out of high school, she followed her dream and worked her *** off to graduate Summa Cum Laude. I couldn't be more proud of her.
I understand what you're saying about doing what you've always wanted to do -- and I think nursing, along with teaching and preaching, is one of the few jobs that's something of a calling. My 18-year old is about to start nursing school, and I have known since she was 2-3 that she'd be doing something in the health field.
However, when you're talking about something as expensive as college, yes, the financial investment matters too. If you can afford to pay for it outright, wonderful, but if you have to borrow, you must weigh the expense against the future income and the years she might expect to work. Yes, the dream measures in too, but it has to be balanced against the cost.
I think the real lesson of the article is that older people need to weigh college decisions even more carefully than the young. I see it around me all the time - people in their 40s & 50s borrowing to start a second career after a layoff/downsizing, and never making enough to justify the debt they took to get there. We've all been trained in the "go to college and you'll make good money" mindset practically since birth, and it just doesn't hold true for everyone. Particularly for older workers finding a need to change fields, they need to remember that they'll never be as desirable a job applicant as a 23yo new grad with the same credential, and make their educational and borrowing decisions accordingly.
I know quite a few teachers who started teaching young and are now approaching their 30-year mark (I'm at 20 years myself). At 30 years of service, we can draw a full pension regardless of our age, so many of us are considering part-time jobs we can do after retirement (too young to draw Social Security and don't want to dip into savings too soon). It's interesting that NONE of us have any plans to do anything even remotely connected to teaching; I've said that I'm not burned out right now, but I can see it from where I'm standing. I know one guy who's starting small right now on a handy-man type job, another who works on cars, two women who are working together on a small-time catering business, any number who work special events at an event center near me. I know one woman who's already retired and works as an after-school nanny.
None of these people are pursuing higher education for another professional job. Of course, they have the pension and are looking for supplemental income -- not a whole new career. Regardless, I think it's a wise choice, and I'm looking around for my "right fit" job.
Unless you have personally delt with the nightmare that is Sallie Mae, you can't understand. I paid faithfully my $1100 a month to them, and they would never apply the payments correctly. They send a bill. I pay the amount due plus a little more to attempt to get a head. 13 days later I get a call saying my account is past due, meanwhile I have the cancelled check saying it isn't. Now they charge me a late fee and raise my interest rate. This happened EVERY SINGLE MONTH for 6 months. The calls finally stopped when that life insurance policy from my grandfather paid them off. And THAT is why I call this a ponzi scheme.
I did read the terms and conditions, based on how I read them I did not believe my interest would be 40K! But what does any 18 year old know about anything? How many 18 year olds TRULY listen to everything their parents say? I can't name many. At 18 you think you know everything.
I haven't dealt with that company, but it sounds like Fleet Mortgage. No, it wasn't a Ponzi scheme, but they were inept in every way. They figured our mortgage based upon us being in the wrong county. They failed to credit our account properly. They collected escrow but failed to pay our insurance bill.
One thing to add to your "what does an 18 year old really understand" thought: At 18, you know that 40K is more than 30K and less than 50K, but you lack the life experience to know how valuable 40K is. You don't yet grasp whether that's what you'll bring home in a year or five years. At 18 you don't really understand what kind of lifestyle you'd be able to afford on 20K vs. 40K. You don't yet understand whether paying back 40K means skipping a few meals out and driving a used car or whether it means postponing buying a house and having children. You can see the number, you can agree that you'll pay it back, but you can't yet grasp how it will affect a life you aren't yet living.
That's an attitude I just don't get.
My nephew is making pretty good choices about his schooling. He was telling me recently about his scholarships, grants, etc. (His family has very little money so he qualified for a Pell grant.) He'll do fine, but the thing that confused me was why he wasn't working this summer (or ever for that matter) to reduce that loan a bit. In my mind, if he makes $1, that's $1 less in loans.
Doesn't make sense to me either, but I see it over and over. When I was in school, everyone started scrambling around spring break time to find summer jobs -- summer camps held recruitment workshops on campus, everyone'd go home for a long weekend to put in applications. We NEEDED those jobs. Today I know sooo many college students who just say, "No biggie. I'm borrowing anyway."
AMEN Our community college here is $1500 a semester! So many of my kids' friends went to private $40,000 a year schools for marketing, psychology or sports management degrees! It's doubtful they will ever make enough income to pay back all those loans. I realize that not every community college has every major, but I know plenty of graduates who went to community colleges who have great careers and no DEBT! Parents of high school students need to do their homework.
I don't think it's so much a matter of doing their homework
as being willing to say, "Look, I know you want this expensive college, but we only have X amount of money. We need to make some wise choices."
Both of my kids were on Pell Grants (and DS was on a state supplemental grant as well). Both worked part time year round and it did not seem to affect their grants/aid packages.
I did too, but I was soooo low on the EFC that it just didn't matter. And even if you have a "borderline EFC", you're not likely to outright lose the Pell Grant -- you're more likely to have its amount slightly reduced. I think the reality is that a student who works all summer and earns a couple thousand dollars
might lose a couple hundred in Pell Grant money. That's still worthwhile, even if you overlook the lessons that come with working.
My husband is an engineer, and having been born without a silver spoon in his mouth, he worked all through high school and college. He says that a surprising number of engineers seem to make it all the way through college without having worked at a paying job -- ever. He says he sees a difference in them. They don't appreciate their good jobs in the same way he does (he calls his job the best job he's ever hated). He says they don't have any concept that everyone doesn't have vacation time, sick time, etc. He and I agree that everyone needs to work in a factory or waiting tables or some other manual-labor job so that they'll appreciate what they have later.
It is actually a zombie ...as it may never die
