Student loan debt question

[Rusty Shackleford]

I turn to the intelligencia of SJ to answer a question I have wondered, but not really bothered to research, for some time.

These people racking up tens or hundreds of thousands of dollars of student loan debt - where does that money go? I find it difficult to believe that it cost anywhere near that much for a college to educate a single student for four years or so. Professors I had in college, just 10 years ago, made only between probably $40-100k a year. I know there are other costs - maintanance, books, room & board - but it still seems excessive.

 

[Stitch]

Cheap credit and free money through Pell Grants has helped push costs up. Most building splurges on college campuses seem to go to new dorms and student unions these days in the name of student recruitment.

What I don't get is online education was supposed to reduce the costs of going to college, but for-profits such as the University of Phoenix and Grand Canyon charge a lot more for tuition than a decent state university.

 

[Walter_Sobchak]

Professors make a hell of a lot more than $100K a year. Here in Massachusetts, the vast majority of the 100 highest paid state employees all work for the University system.

http://www.bostonherald.com/projects/your_tax_dollars.bg?src=State2011

 

[J-School Blue]

Professors make a hell of a lot more than $100K a year. Here in Massachusetts, the vast majority of the 100 highest paid state employees all work for the University system.

This varies, quite substantially, state-by-state. And even if you get a proper median it's deceptive, since there's been an increase in the use of adjunct professors over the past years.

I don't view for-profit universities as much better than pyramid schemes, but that's an industry about which I'm extremely cynical. They aren't the culprit of higher costs, but they've done their part to get a lot of people in unsustainable debt traps with little to show for it.

 

[playthrough]

Cheap credit and free money through Pell Grants has helped push costs up. Most building splurges on college campuses seem to go to new dorms and student unions these days in the name of student recruitment.

What I don't get is online education was supposed to reduce the costs of going to college, but for-profits such as the University of Phoenix and Grand Canyon charge a lot more for tuition than a decent state university.

Increased recruitment costs are definitely in the mix. The dorm rooms at some schools are starting to look like Marriotts. Does anyone have to buy the little fridges anymore?

 

[JRoyal]

Where's it go? Hookers and coke. Gotta be.

 

[novelist_wannabe]

Just got back from orientation for my youngest, and in terms of why it is as expensive as it is, I was struck by the sheer numbers of the support staff. This is a small private college, and it's fairly pricy because of an impressive array of non-instructional services available to the students. I assume all colleges make these things available to their students, and the point in relation to tuition is that the faculty probably makes up well under half of the college staff.

In our state, which has a lottery-funded scholarship program, tuition has grown significantly since the program started. There were a number of factors. The goal of the program was to give more kids access to a college education. I haven't looked at the numbers, but my impression is that it has been successful in that regard. But more students means more professors, support staff and facilities are needed, and the colleges -- particularly the state schools -- have been very aggressive in the area of facility upgrades. The school I went to looks radically different from when I was there.

 

[Thomas Goldkamp]

Not to derail the topic, but some students just live well outside their means, which is a big part of the problem. I can't tell you how many friends I had get out of college with a ton of debt, a degree where a job certainly wasn't guaranteed and a "what do I do now?" situation.

I don't know the financial strain of going to some of the more elite, smaller schools, but I went to a big public school and basically paid my way through and didn't find the cost to be too much to handle.

Just seems like you have to have clear goals and know the end game before you get in. Don't do that, and you end up with a mound of debt and potentially no plan to pay it off.

That said, I can't imagine paying as much as some of these schools cost. I thought the cost of attending the University of Florida was fairly high, and it's considered one of the best value schools in the country. I was out of state, but basically paid in-state tuition and still found it pricey.

 

[Turtle Wexler]

Even if they don't live "outside their means," there are students who will take the max loans allowed each year and live off it. Not just school expenses but rent, food, alcohol, clothes, entertainment, electronics, a car and gas, spring break, etc. They'll use loan money in lieu of having a job.

 

[Stitch]

With dorms costing $700/month (not including a meal plan) at my local state university, a student job won't get you very far.

The most-expensive dorms are $1,000/month for a spot in the newest suites. With tuition, food, books, and modest expenses, that's at least $8,000 that a summer job probably won't cover. My figures are at a relatively inexpensive university. Those kids going to Penn State are getting soaked with bills.

Either hit the books to get a scholarship and/or rack up student loan debt.

 

[Thomas Goldkamp]

Even if they don't live "outside their means," there are students who will take the max loans allowed each year and live off it. Not just school expenses but rent, food, alcohol, clothes, entertainment, electronics, a car and gas, spring break, etc. They'll use loan money in lieu of having a job.

In my opinion, that's where people are getting into trouble. That just seems stupid to me.

 

[Piotr Rasputin]

Even if they don't live "outside their means," there are students who will take the max loans allowed each year and live off it. Not just school expenses but rent, food, alcohol, clothes, entertainment, electronics, a car and gas, spring break, etc. They'll use loan money in lieu of having a job.

In my opinion, that's where people are getting into trouble. That just seems stupid to me.

When was the last time you were a student?

 

[RickStain]

Even if they don't live "outside their means," there are students who will take the max loans allowed each year and live off it. Not just school expenses but rent, food, alcohol, clothes, entertainment, electronics, a car and gas, spring break, etc. They'll use loan money in lieu of having a job.

In my opinion, that's where people are getting into trouble. That just seems stupid to me.

It's not smart, but it's also not an easy temptation to turn down. Ever tried to do a full class load and a full-time job at the same time? It's brutal.

 

[Thomas Goldkamp]

Even if they don't live "outside their means," there are students who will take the max loans allowed each year and live off it. Not just school expenses but rent, food, alcohol, clothes, entertainment, electronics, a car and gas, spring break, etc. They'll use loan money in lieu of having a job.

In my opinion, that's where people are getting into trouble. That just seems stupid to me.

When was the last time you were a student?

I graduated last year. Worked a part-time job while in school, along with reporting internships. I took a $5K loan my senior year so I could enjoy it and have a little more fun (ski trip, trip home for Mardi Gras, etc.), but I paid back the full loan before it started accruing interest.

Even if they don't live "outside their means," there are students who will take the max loans allowed each year and live off it. Not just school expenses but rent, food, alcohol, clothes, entertainment, electronics, a car and gas, spring break, etc. They'll use loan money in lieu of having a job.

In my opinion, that's where people are getting into trouble. That just seems stupid to me.

It's not smart, but it's also not an easy temptation to turn down. Ever tried to do a full class load and a full-time job at the same time? It's brutal.

I have. I worked full-time during my last semester in college, but I admittedly had a light class load for the last semester (12 hours, only nine real hours). I did everything in my power to avoid taking out a loan while I was in school. I understand it's not possible for everyone to do. I had a good scholarship and still took out a loan in my senior year.

But that was after being sick and tired of living penniless for three years and eating Ramen noodles from mid-October to January and March to May. I got sick of being that poor and not being able to do anything fun in college because I was so cash-strapped, so I took out a small loan to enjoy my senior year a little more. But I knew I was going to pay that loan back as soon as I could without accruing interest.

I'm not saying don't take out loans. For a lot of people that's the only option. I just don't agree with taking out a loan in lieu of having a job. Even if you're only working 10-12 hours a week, it's something. Start paying it off now, why wait?

 

[Thomas Goldkamp]

As far as the university system, I agree the costs seem absurd. Don't even get me started on the cost of books, which is a minor part of problem. That whole scam is ridiculous.

 

[Stitch]

Just blame students like the Tea Party does for student loan problems.

 

[User 11148]

There are plenty of ways students can get good, solid educations without racking up tens of thousands in student loan debt. My oldest is a good, solid student -- nothing spectacular but she's a good student -- and she could get a more-than-adequate education at the local university for around $5K (out of pocket) a year. Will it have all the bells and whistles? No. But regardless of what she majors in, if she does what she's supposed to do will she notice any real difference in her ability to get a job? No. If she wants to do the grad school route, will she be at a disadvantage? Absolutely not. But does she listen to her dad? Oh hell no! :D

 

[Baron Scicluna]

I'd also think a big part of the rise in costs is due to marketing of "These are the best four years of your life! It's a rite of passage! If you don't live at college for four years, you're a loser!" mentality.

Students who might take the community college route to get their education instead pile on the loans so they can have the same experience as "everyone else". Peer pressure is very powerful.

I recently looked at my alma mater's website for costs, and a dorm room with a roommate would cost something like $800 a month. Just for a room that is being shared, plus whatever amenities in the dorm. Total ripoff.

 

[Turtle Wexler]

But as someone said, the amenities in the dorm are stacking up. In-dorm dining halls, workout centers, computer labs, mini-marts, tutoring, parking, on and on. All without leaving your building/complex. Local U. has nicer dorms than any apartment I've lived in. It's all part of the college arms race -- schools fear if they don't offer a Marriott-like living experience, they'll lose students to places that do.

And in no way was I implying that a student job could cover all expenses. But it could be a few thousand a year toward food, clothes, shampoo, etc., that wouldn't have to come in loans. Students are just opting not to do it, and parents are allowing it.

"I don't want my kid to be distracted from their studies by having to worry about a job" is the biggest crock. That kid is laughing all the way to the keg.

 

[imjustagirl]

I worked, three jobs at times, and went to school. I still took the maximum loan amount and was squeaking by. I had no scholarship money, no grants, no nothing. So $12K a year was coming out of me.