Student loans

I knew that, I was being silly back at you -- looks like I smiled instead of winked.

 

I'm with you there, Idaho.

 

I'm a big fan of working in college as well, but this blanket theory doesn't cover the cost of an education. A minimum-wage job doesn't begin to put a dent into college expenses anymore.

Let's say a kid goes to work as a junior in high school (16 is a standard age without child-labor releases). Making $5.15 an hour for 20 hours during the school year and 35 weeks in the summer (can't go 40 without the company having to cough up benefits, which they won't do for a high school kid), that kid will make $6,283 in pre-tax dollars per year. Let's round that off to $5,000 in taxes and deductions. In two years that is $10,000. Remember, this is a kid working significant hours and likely not involved in sports or extracurriculars.

The estimated cost of tuition, books, room, board and transportation at my local four-year State U. is $15,000 per year for a student living on campus and $11,000 for a student living with parents (a viable option for many in this area).

Right off the bat, the kid who has busted ass at a job for two years is going to be $1,000 in debt even if he/she lives with parents. And that's just the first year.

Using the numbers above, a student will earn $30,000 in six years (two HS, four college), and spend $44,000-$60,000 in four years.

College tuition at the public schools in my state has gone up 5-7 percent each school year for the last several years. That's quite a hike since the 1990s.

 

I agree, Cadet, that college is getting very expensive. And I know the advice 'get a job' doesn't eliminate the cost.

But not working while in college is, IMO, a big mistake. Even back in my day, the employers in the college-town valley offered tuition reimbursement for college employees. Chances are, you can find a job that has a similar benefit.

So, my blanket statement is this: Work while in college, reduce your expenses even if that means living at home, sharing an apartment with five other students or going to Cal-State Fullerton instead of UCLA, and don't be afraid to spend an extra year or two as an undergrad if that means you can graduate with half the student loans, or even no student loans.

 

I agree, it's the perception that all the debt racked up is frivolous debt.

My parents can't believe that I have $XX in debt. They've only ever had that level debt with a house. They always preached the difference between "good debt" (house, education) and "bad debt" (ex. running up a huge tab on a J. Crew credit card). But here's what I learned the hard way: in the real world it doesn't matter. Debt is debt.

My only source of debt was my grad school loans. No credit cards, no frivolous spending, nada. I thought I would be in good credit shape when I went to get my car (which I refer to as the plastic rollerskate, so you know I wasn't overspending my means). I was shocked when I was quoted a bad interest rate because of my debt. "But it's all school loans," I said. "It doesn't matter," they said. "You're still $XX in debt."

And I agree with the poster who said those who went to college out of high school are struggling while those who didn't are living the white-picket-fence dream. I've found that to be true, and it's frustrating. I know in the long run their earning power is stagnant while mine will increase, but damn, I'd love to own a home and a car that isn't a plastic roller skate.

 

I got my first job when I was 15 and I haven't stopped working since. From the day I started working, I was financially responsible for the purchase of every item I needed ranging from toiletries to my car.

Minimum wage at that time was $4.25. Since the law would only allow a minor during the school year to work 20 hours a week, that comes out to about $68 a week (after taxes).

Go ahead and shave off $10 in total to give whoever carts your tail back and forth to work every day for gas (since you yet to have but are working on saving for a car). Now you're down to $58 a week.
(I was lucky enough that my dad worked the third shift so after I turned 16 and got my license, he'd let me use his truck to go to work, so long as my shift ended in time for me to get home before it was time for him to leave. Putting gas in it was cheaper than adding an extra buck or two onto the cost of gas to get someone else to do it.)

Take away another (at least) $5 for toiletries. That's an average of $5 a week for the typical monthly stuff a teenage girl would need and that is still buying the cheap stuff. Now you have $53 a week.

Then there's the matter of clothes. You can't wear the same stuff forever when your body is still growing (unlike now where I honestly think I've had the jeans I'm wearing today for at least six or seven years). So figuring shopping only from the Wal-Mart clearance racks...take away another $10. That leaves you with $43 to proudly stash away in the bank.

That's an average of about $172 a month. It takes forever to save for a car at $172 a month. Plus, hell if you are a teenager and you are working almost ever day after school plus one day on the weekend, you deserve to buy something just for fun. So some months would be even less than that.

But DAMN did it feel freaking amazing when that savings account hit $2000! Time to finally get that first car! Then of course there's the reality that hits like a ton of bricks when you are trying to find something you can afford. Plus it's not like you can spend $2K on the car. You have to have the money for the taxes and tags, plus insurance, plus a couple of week's worth of gas, etc. Good grief after at least a year of working, you'd think it would pay off a little more than that! But I was still thrilled. My 1986 Chevy Cavalier was my pride and joy.
(OMG Pausing for a moment to bitch about inflation. I just realized that when I was only 16 years old I bought and paid cash for an 8-year old car. Right now I'm driving a 9-year old 4-Runner. Granted, I've kept it in great condition, but I just can't believe at 16 I had a newer vehicle than I do now.)

Anyway so you get the car, but now you're expenses have gone up. You have to pay the monthly insurance. I can't remember exactly what it was, but I'm going to assume liability for a 16-year old in 1994 was probably at least somewhere around $50 a month. That takes your savings possibilities down to $122 a month.

Now anyone in their right mind knows a teenager who has their license and their own car wants to have some fun too (just can't always tell Mama what you were doing). Going out with some friends on your night off isn't free (it is sometimes when you make your friends who don't have a car yet pay your way for letting them ride with you). But still plan on spending another $20 at least, knocking your savings down to around $100 a month.

So if I were to have only allowed myself $20 a month to have fun outside of work along with the expenses of what few financial responsibilities I had, I would have had a whopping $2400 in my account by mid summer after I graduated.

When I graduated high school, the cost of tuition for a "local" four-year averaged around $3,200, not including books. God forbid if I wanted to live on campus, that meant about $10,000 a year. Driving back and forth while living at home with the folks wasn't really financially feasible either, because the closest college was 45 miles away. (I grew up in the mega-boonies.)

Minimum wage was $4.25, but I was making $5.75. I was busting ass as a fry cook in an area on the cook line (fryers right next to the grill area) that usually stayed around 120-130 degrees. It wasn't easy work, but I still took pride in it.

I was (shamelessly) dating the kitchen manager (cradle robber) who made the schedule. I found out that one of the perks of dating him was he'd let me work as much as I wanted. The week after I graduated I started working 60 hours a week (same hours as him of course).

I moved out on my own (well, technically with him) two weeks after I graduated high school. Boy was my mother mad about that! But I was determined to remain the same stubborn person I'd always been who was going to do what I wanted, when I wanted, regardless of what anyone else thought.

We kept working those mad hours for about another month, then we packed up our stuff and moved to Atlanta. Wow what a culture shock after coming from the middle of nowhere in Kentucky!

The pay was better but the expenses were nearly double the cost. I kept thinking for a long time I'd get to where I could afford college, but that cost was going up even faster than the rent and utilities.

Eventually I gave in and decided if I was going to do it I would have to suck it up and get student loans. Would I have rather been able to pay cash for my education and be debt free? Hell yeah, but it just wasn't in the cards.

I just can't understand why some people think paying cash for college is as simple as getting a job while they go to college. I worked full time the entire time. I just happened to blow all of my money on rent, used car payment, insurance, gas, utilities and groceries.

 

Wow. I got out of school not owing anyone a dime.
With threads like this, I count my blessings.

 

Perhaps this will make you feel better.
I know a family where two kids went to college and two did not.
Both of the two that went to college have reached VP level in their companies and are making six-figure incomes.
Both of the two that did not are earning less than $50,000.
We're talking about 20-30 years post HS for the four of them.
See what you have to look forward to?

 

My biggest issue, and the reason I bitch about it so much on here, is I was under the misguided impression that a graduate degree meant you earned more. In reality, it just means you spend more.

 

Easier said than done, Ides. Costs have skyrocketed even since the Gay Nineties.

Like jfs said, it is impossible to waitress your way through school anymore. It's just too expensive. I don't care what your classload is, I don't care how much you work, I don't care how spartan your lifestyle ... the costs are too high now.

And that's even at a public in-state university (like the one I eventually went to). I had a job for three summers in high school, making $6, then $6.50, per hour. By the time I graduated, I had $4,000. That wasn't enough to pay for even a single full-time semester at my school, even if I threw all my savings into tuition costs.

Remember: Public, in-state and living at home while commuting to school. It wouldn't have even covered one semester. Not one. I went to a CC instead.

If you want to stay in school, and your parents make too much for you to qualify for most scholarships but not enough to actually pay the insane costs for your education, you have no choice but to take out a loan and pay for it yourself.

I agree, a part-time job is important, even essential. Every college student should have one.

But it won't make a dent in your debt. Not anymore.

 

Me too. I'm grateful my government put me through school.

 

Yep, easier said than done.

Still needs to be done. What's the solution? Pay professors next to nothing? Tax the hell out of everyone? Gripe on message boards?