The cost of college

[all caps]

Biggest scam going

 

[JudoThrowFiasco]

Go to a state school and focus on a major that is actually in demand.

Average cost for an in state school is under 10k per + incidentals. Overall that will run you less than 1 years salary if you choose your major correctly. It's a solid and quite frankly, needed investment in one's life.

Now there is merit in looking into higher end private schools because of networking and how the US takes elitism in academia -- but these kids who take on major debt for trend or huge party schools and getting an over saturated liberal arts degree is just asinine.

 

[mooseman17]

They work while going to school, like myself and millions of other people did.

 

[SmilinDesperado]

Financial aid.
State Grants.
Tons of scholarships out there.

There are plenty of ways.

The middle class often gets screwed here though.
Financial aid is determined by what your parents make. My parents made just enough where i didn't really get much of anything from the gov.
My 2 uni roommates got free rides though because their family was poor. Those fuckers were living the life. Bought PS3s and a nice tv, didn't have to work..they just went to class and smoked weed.
I had to work and still have debt.

So it really depends on a lot of factors. There's definitely segments of society that get fucked.

 

[kahiljabroni]

My point still stands. If he/she saves 10% at both, before and after tax it'll be repaid in a decade at most.

Problem is most don't find a job at 60k let alone 100k out of school.

45-50k is a more realistic average starting salary...so again, after taxes that's 700 per week take home.....2800 a month. The bill on a 100k loan is probably a grand a month which is more than 33 percent of said persons income.

 

[DaleBoca]

The middle class often gets screwed here though.
Financial aid is determined by what your parents make. My parents made just enough where i didn't really get much of anything from the gov.
My 2 uni roommates got free rides though because their family was poor. Those fuckers were living the life. Bought PS3s and a nice tv, didn't have to work..they just went to class and smoked weed.
I had to work and still have debt.

So it really depends on a lot of factors. There's definitely segments of society that get fucked.

If you go to a college after 24 then you'll be determined as an independent and they won't count your parents salary against you, only what you made. All you have to do is go to community college for two years, and then you can transfer to a university. Not only will you save money by getting financial aid for your last two years, you will also save money by going to a community college instead of doing your entire four year at a single institution. More and more people are going through this route.

 

[danny23]

Problem is most don't find a job at 60k let alone 100k out of school.

45-50k is a more realistic average starting salary...so again, after taxes that's 700 per week take home.....2800 a month. The bill on a 100k loan is probably a grand a month which is more than 33 percent of said persons income.

100k is a big exaggeration for Uni loans, 50k is top most of the time.
Well that's how it works then. Cut your luxuries and sacrifice your leisures to repay. That education didn't come for free.

It was an investment so you can become a productive member of society and make a return on it. You owe them because they were nice enough to pay for your education and give you the opportunity you might never have got.
The financial aspect should be an incentive to work.

As for your numbers, again even after tax you'd be making 32k annually at the lowest estimate. Pay 15% of that which's only 4.8k towards your loan and you can repay it in little over a decade. You'd save over 25k for everything else. This taking in account if you're a low earner and no fluctuations in future income rise, which usually happens progressively through your career.

On a side note, I probably can't relate. These thoughts don't come for me as I'm still a student with zero debts and everything's paid for.

 

[SmilinDesperado]

Did that figure include books?
Books were such a fucking scam. You could spend $300+ on books a semester, and try to sell them back to the bookstore in good condition just to get peanuts.

There's a lot of factors to consider when having this conversation.
The "I worked my way through school" crowd, what year did you do this? What state and school? What town?

Tuition fees are way the fuck more now than they were when my parents were in school. As an undergrad, tuition fees ROSE about 40% while i was a student. They raised fees, while CUTTING classes and services. So if you needed a class to graduate and they cut that class down to where they only offered it during 1 semester, you were fucked and could have to do a 5th year to get that class.

I don't know how the rest of the US is, but California was a shit show as far as costs goes. And then add in rent and a car....shiiiiieeeeeeeeettttt.
Im sure there are some states, areas, and schools that are doable..but there are others that are a real struggle.
Definitely not a one experience fits all situation

 

[Gandzooka]

https://www.topuniversities.com/student-info/studying-abroad/where-can-you-study-abroad-free

 

[SmilinDesperado]

If you go to a college after 24 then you'll be determined as an independent and they won't count your parents salary against you, only what you made. All you have to do is go to community college for two years, and then you can transfer to a university. Not only will you save money by getting financial aid for your last two years, you will also save money by going to a community college instead of doing your entire four year at a single institution. More and more people are going through this route.

Yeah, i did the 2 year at community college and transfer route.
Great way to save money.
But it's still ridiculous that people need to go that route. Education shouldn't be affordable only to the rich, especially since it often determines where your place in life will be

But graduate highschool at 18...go to CC for 2 years, and you're 20. Who is waiting 4 years to transfer to a university so that their parent's salary doesn't ding them?
It's a shit system.

 

[DaleBoca]

Yeah, i did the 2 year at community college and transfer route.
Great way to save money.
But it's still ridiculous that people need to go that route. Education shouldn't be affordable only to the rich, especially since it often determines where your place in life will be

But graduate highschool at 18...go to CC for 2 years, and you're 20. Who is waiting 4 years to transfer to a university so that their parent's salary doesn't ding them?
It's a shit system.

Well, you can work and go to school part-time after you graduate from HS. For example, my cousin went through a temp agency after HS. He got a nice little office job, which he was hired permanently, stayed at home, saved a little money, took 2-3 night and online courses per semester and by the time he met his transfer requirements he was already 24. He not only got work experience, he also saved money through various means.

But I agree, it is a crappy system but there are ways around it.

Kids aren't very patient though, they don't understand how much money they could save if they go to college just a few years later.

 

[Deleted member 220895]

Amazing literature. Better hotdogs.

 

[cmw43]

When I went to University in the UK 2005-2008 it was £1k a year tuition fees.

Then in 2012 they raised it to £9000 plus loans for living and accommodation average UK student debt is near £50k.

Unless you're doing something like law, medicine, It, engineering etc you might as well just get a job at 18 and work your way up.

 

[Pride23]

At 18 years old people lack awareness and knowledge. They lack the awareness to really know themselves, many will never actually obtain it. They overestimate their capabilities and think once they get their degree they will get a high paying job. It just does not work like that. The lack of knowledge is they do not understand personal finance having never lived on their own, they do not realize what taking out a loan of >$50,000 actually means to their pockets once it's time to pay.

 

[danny23]

FWIW your numbers are off. First, you keep neglecting interest. Even a Federally subsidized loan (which is capped at $3500/yr) has interest once the student graduates. Unsubsidized loans (the bulk of big college debt) has interest accruing from day one, which can add up to quite a bit. Even at a low interest rate (4.45% for 2017-18 Subsidized Loans) that adds up quickly.

Take your example above of $50k paid off over 10 years. It works out to be a monthly payment of $517 ($6204 per year - or almost 20% of your 32k salary) and the total interest paid over the 10 years is $12,039. If you only pay the 15% like in your example, it'll take 14 years not 10 to pay it off (and you'll end up paying $17,272 in interest).

And that's a subsidized loan, an UNsub loan would be even more.

Since Subsidized loans are capped at $3500/yr. a lot of the big college debt is unsubidized, which means for the 4 years you're in college interest is accruing. The interest accrued over 4 years on $50k is $9,683. So suddenly your $50k became $60k. Then there's the interest on that balance during the life of the loan while making payments. Making payments of $4.8k/yr. as in your example means it'll take 19 years to pay it off, and you'll have paid a total of $39k in interest!

The rule of thumb I follow is that you should NEVER had more college debt than the salary you reasonably can expect to make 3 years after graduating. And that's absolute worst case. Most students should ideally have less half that.

A job such as a Social Worker making $22k/yr should have zero debt since it's hard to just survive off $22k. However a Petroleum Engineer might have a salary of $110k/yr and so they shouldn't have more debt than that. Of course living off of $110k/yr in Texas is easier than being a Social Worker living in NYC.

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BTW, for the Class of 2017 the Average Student Loan Debt was $39,400 (up 6% from the previous year). And the Average monthly student loan payment was $351 (so they likely can't afford to pay more, and at that rate they're looking at >12 years to pay off the loan).

I'm aware of that, I excluded interest for sake of argument because that's determined by other factors that we can't accurately use here. I'm not too informed on US' procedures and rates used. Obviously it'll take longer and cost more then. But it's the same concept, just adjust to it.
And I'd kinda agree on your last point. I think low skilled degrees should be a lot cheaper than high skilled ones, yet they're similar in price which's absurd. Cost of education should be relative to your degree's value and earning potential. A social studies degree shouldn't cost anywhere an engineer's.

 

[SmilinDesperado]

Well, you can work and go to school part-time after you graduate from HS. For example, my cousin went through a temp agency after HS. He got a nice little office job, which he was hired permanently, stayed at home, saved a little money, took 2-3 night and online courses per semester and by the time he met his transfer requirements he was already 24. He not only got work experience, he also saved money through various means.

But I agree, it is a crappy system but there are ways around it.

Kids aren't very patient though, they don't understand how much money they could save if they go to college just a few years later.

Yeah, i get that.
There are ways to work the system, but no one should have to go that route for something as basic and essential a thing as education..especially when your parents, teachers, and the rest of society tell you you need a college education to succeed.
An educated society only makes that society better. It's in all our best interests to not be surrounded by morons, so it is baffling that we have let the costs get so out of control, and then act like college students are asking for free TVs or something

But in regards to patience, waiting 6 years after graduating high school to finally get into a university is just a horrible, broken system.
And while you're working a deadend, shit job, biding your time till your 24, the rich kids that can afford school now have a massive head start on you. Theyre filling up jobs, and theyre going to be your younger boss when you finally get into the work field.
Not to mention the 2 years you missed out on uni are 2 years of networking and experience you lost out on. And while you save money at a CC, you're not necessarily getting the same quality of education as you would have at a proper uni.

 

[Mike]

At 11.5k per year it's not that outlandish to pay a decent percentage of it with a low skill job.

ANNUAL cost of 46k. not TOTAL cost. Anyway people parrot the same "work your way through" stuff their parents told them, when it wasn't ludicrously expensive when our parents were our age. Inflation is insane in nearly all areas.

 

[Mike]

They just need a job making 100k...then subtract 35k in taxes and around 20k for living expenses, and they'll have enough left for tuition.

This is a prime example of government getting involved in a sector and making it worse...government guaranteed loans translates to a license to print money for universities.

If enough dumbass kids wake up and stop going to these expensive schools and instead go to CC followed by state school then prices will come down.

Ok and how many fields are realistically paying 100k out of the gate, for entry level inexperienced workers? Also lol at living on 20k a year. In what, a storage unit?

 

[danny23]

Huh? If you're not going to even attempt to utilize real life numbers, what exactly are you trying to do?

The interest rate for Federal Subsidized and UnSubidized loans is set by the Fed and readily available (4.45% last year, it's actually gone up to 5.05% as of July 1, 2018 for the 2018-19 school year).

And that's BEST CASE SCENARIO.

Federal Sub/UnSub loans are capped at $5500/yr and beyond that the rate can fluctuate widely but ALL are higher.
PLUS loans (about the best loans available after the Fedral Sub/UnSub loans are for graduate students and/or parents of undergrads) have an interest rate of 7.60%
[SOURCE: https://www.forbes.com/sites/zackfriedman/2018/05/22/student-loans-rates/#52334cb8319c]

Personal loans can easily be 8-12%.

And yes, even a slightly higher interest rate can have a HUGE impact on such a large dollar amount accrued over such a long time (much like a mortgage interest rate can drastically impact the payment amount - that's why trying to get an interest rate even 1/8th of 1% lower is desirable).


WTF? You're the one saying it's easy to pay off a $50k loan off a salary of $32k, yet you completely neglect to factor in interest like it doesn't matter? Let me guess, you don't have a mortgage nor any actual knowledge or experience with a substantial loan of any kind? And no basic knowledge of accounting, banking, statistics, etc.?

In your example the take home pay is $2,667 ($32k / 12 months) yet the payment on a 50k loan with accrued interest (taking it to $60k) and at a combined interest rate of say 8%, would be $728 per month if it's to be paid off in 10 years like you said.

So that person making $45-50k per year is making a loan payment of $728 per month and then has just $1939 per month left over to live off of. In the vast majority of the country that's poverty level.

So you can see why I, and others, have disagreed with your illogical assertions about loan affordability. You're right about one thing, you don't understand what you're posting about because:

Can you not read? Or did you just want to rant? Likely both.
My initial argument was based on what I said earlier. It's very clear but you're sadly lacking in basic reading analysis skills, so then you twisted it into something else. Stick to the initial topic or kindly don't debate.

 

[SmilinDesperado]

Also, to the people saying "just get an engineering degree or something that will make a lot of money"
If everyone actually went that route there would eventually be no more of those jobs.
And the world would be a boring ass place if everyone just was a scientist. We need a balance. The arts are important. They help shape our culture.

And where is USA ranked in math and science in the world? Last time i looked at the rankings, we were like 35..out of like 70 countries. So, who's fault is it that students go towards "worthless" liberal arts degrees, instead of more of the sciences and engineering?
Its pretty bizarre that people put this all on the students as if they had any say in what their education was.
I went to elementary and middle school in Japan, and high school in the US. The highschool math class i did in the US was doing stuff i had did in the 6th and 7th grade.

I don't know what the best solution is, but we need a pretty big reconfiguring of the system.
Should a class that requires labs, tools, cadavers, etc, cost the same amount as one that just requires a professor and a classroom?
Should a liberal arts student's tuition rise to help pay for a new lab or state of the art million dollar telescope thats got nothing to do with their major?