College Costs & Student Loans

[OKCTalker]

If this is being discussed elsewhere, forgive the duplicate post. I wanted everyone's take on what is being reported as a "crisis" in student loans. As with most things being reported these days, it's sometimes difficult to distinguish beween something that's a significant issue and something that's just the "story of the day." So...

The traditional four year degree has expanded to five and sometimes six years, increasing the initial budgeted cost. The selection of a private university over a state or community college will result in higher costs, as will the housing choice (living at home versus campus housing or an apartment). Finally, not all degrees will justify a job with adequate income to repay student loans (sociology, language, history, the arts, etc.).

So given that any enrolling student makes the choice that's right for himself, controls his performance (grades), and selects the time period to complete, wouldn't it be reasonable to expect that they live with the consequences? I mean, there's no way that a kid could repay the costs of a six-year liberal arts degree from an Ivy League school with campus housing and a meal plan, but the kid who graduates with a four-year professional degree from UCO while living at home - he'll knock out his debt in no time.

I don't understand why these young people are victims.

[BBatesokc]

I think part of the reason I can see some as victims is because they enter into these agreements at such a young age (18-19 years old). My 18 year old can't plan for 6 months from now, so expecting him to comprehend the debt he will have in 4-6 years is just not realistic. I think its the same reason many colleges don't allow credit card companies to solicit on their campuses.

That being said, a college degree can be had and doesn't have to cost a fortune.

[blangtang]

The main problem I see is that the debt can't really be discharged. Nothing wrong with financing an education, as long as jobs are easily found.

[Midtowner]

I picked up my undergrad debt free by living at home and having my tuition paid mostly by scholarships. That was fine. I then went to law school and racked up a six-figure debt, which is no big deal.. I'm financially disciplined and will have that paid most likely next year (4 years post-graduation).

I think as a prospective law student, I was better able to understand what I was getting myself into. I understood that unless I made X amount of money, I would have a very poor standard of living. Lawyers are able to do fairly well for themselves in many cases, and due to my situation, this wasn't really a concern.

As an undergraduate though, an 18-19 year old, they don't really understand to look at sticker price. No one out there really talks about it. They just tell you sign here, sign there, you get a degree, boom, success.

While undergrad degrees are important, you're not going to see a lot of difference between many private schools like OCU, which charges $840/credit hour and UCO, which charges $137.50/credit hour as far as your prospects are concerned. I'd say that caveat emptor should rule the day, but the whole applications process really take the spotlight off of the costs and focuses so much on the experience. Perhaps if schools were required to post on the front page of their websites the average total student loans their graduates carried vs. the average starting salaries of their graduates, we'd have a better idea of things.

There are currently several lawsuits against law schools due to the fact that they misrepresent their employment statistics. Whether you're working as a bona fide lawyer or in fast food, you are reported as "employed" on the school's statistics. Try making an intelligent decision with regard to cost with that sort of misleading information.

[betts]

I wonder if the government shouldn't put a limit on what can be borrowed. I hate to see people borrow money to get an undergraduate degree at an expensive college, when ultimately it will have little to no effect on their ability to get a job or even get into graduate school. If they planned to go to grad school, they'd have to pick a public institution for undergraduate school to stay under the cap. Or, they might have to live in less desirable surroundings, etc.

When you're 18, especially if you don't have parents who understand to guide you, the end of college seems like a long way off and the future seems limitless. So borrowing extreme amounts of money to go to a "really good school" isn't daunting. By limiting what can be borrowed, the government acts parentally for these young kids who really don't have the information or maturity to make smart financial decisions for themselves.

I've always said to my kids, "If you ultimately want an advanced degree, better a 4.0 from OU than a 2.0 from Harvard."

[OKCTalker]

I wonder if the government shouldn't put a limit on what can be borrowed. I hate to see people borrow money to get an undergraduate degree at an expensive college, when ultimately it will have little to no effect on their ability to get a job or even get into graduate school."

Betts - I'd rather see the government stay away from price controls, whether in education, agriculture or anything else. I can't think of a time when they've worked. Given a little "adult supervision" and encouragement by parents, a student can select a career path that suits their dreams and capabilities without breaking the bank. As with cars, houses or clothing, you can buy name brands and pay more (OCU at $840/credit hour) or Brand X for less (UCO at $137.50/credit hour - thanks for the figures Midtowner).

[Midtowner]

I wonder if the government shouldn't put a limit on what can be borrowed.

I'd like to see the government cap what it'll loan out right where things are now, then start reducing by 5% or so each year until we hit some reasonable max cost of 20K or so (that's arbitrary, I'm sure some smart economist could come up with some reasonable figure on what it takes for a not-for-profit college to operate on a per-student basis). If schools want to take risks beyond that, I'd like to see the schools be required to underwrite their own bankruptable student loans. If they want to sell those loans to third parties, whatever. Just make them put some skin in the game.

That way, if the school is charging for a degree which ultimately does not lead to a decent ROI for the student, they may very well be bankrupted on all the money they risked on that student's ultimate success. Let's make these schools with their ultra-high tuitions put some skin in the game. If you're Harvard or Yale, sure, $50K/year is probably justifiable. If you're Mid American Christian University, then your students who are unable to repay the $570/credit hour costs (which are ridiculous considering the academic reputation of MACU), you may darn well go under.

[SoonerBoy18]

What is the difference between making monthly payments on a 2012 Ford F-150 King Ranch for 36 months (which most people in Oklahoma is doing) and making student loan monthly payments 6 months AFTER you graduate for x amount of months/years??? If people successfully pay their student loans on time every month, that builds up credit, and with great credit you can buy anything. Student loans doesnt have to be fround upon.

[Spartan]

What is the difference between making monthly payments on a 2012 Ford F-150 King Ranch for 36 months (which most people in Oklahoma is doing) and making student loan monthly payments 6 months AFTER you graduate for x amount of months/years??? If people successfully pay their student loans on time every month, that builds up credit, and with great credit you can buy anything. Student loans doesnt have to be fround upon.

There is no way you will have palpable credit if you're $100,000 in debt before you've earned a dime. I would say even if your student debt is half of that, you will be uh.. significantly inconvenienced. An undergraduate degree is not a ticket to a high-paying job. It is a path to subsistence these days.

It will also make our country extremely uncompetitive. Not only is there a disincentive to pursuing advanced degrees, which erodes human capital in direct competition with human capital in other countries, but also it makes our students pursuing advanced disagrees individually uncompetitive with their peers in other countries who aren't in debt up to their eyeballs because they were born in societies where the government supports education.

That in addition to the obvious truism that education is perhaps the best thing you could support, no other endeavor, not even a war, will provide for the future like investing in education will.

[betts]

Betts - I'd rather see the government stay away from price controls, whether in education, agriculture or anything else. I can't think of a time when they've worked. Given a little "adult supervision" and encouragement by parents, a student can select a career path that suits their dreams and capabilities without breaking the bank. As with cars, houses or clothing, you can buy name brands and pay more (OCU at $840/credit hour) or Brand X for less (UCO at $137.50/credit hour - thanks for the figures Midtowner).

First of all, you're assuming adult supervision, which is too much of an assumption. Second, you're assuming the adults who are theoretically supervising understand the implications of long term debt for their children. We have quite a few adults in this country who didn't understand the implications of their own long-term debt, which is why this country is reeling financially. Were an undergraduate degree a ticket to a great paying job or were a graduate degree a guaranteed ticket to a great paying job, it might not matter if people make poor financial choices for themselves regarding loans. I'm in favor of a cap on student loans financed by the government. If banks want to take that kind of risk, then that's private enterprise, I suppose.

[SoonerDave]

Considering that these days the credit transfers between CC's like OCCC and the other state schools you can even shave more off that tuition cost.

My kids will be entering college here in two years, (son in two, daughter in four), and I'm going to strongly encourage them to see the value of taking basics at a close-to-home venue like OCCC, save a pile of money, and transfer the credits to a place like UCO (where my daughter has already expressed interest) or wherever. I wish to high heaven I'd done the same thing in retrospect when I was there age. I was pretty good at managing limited funds back then, but having the option to live at home cut my college expenses *drastically*. Yeah, I know all about the "campus experience," and to a degree I understand, but there comes a point at which desires have to square with reality...

[WilliamTell]

The problem isthat since the government has made it so easy for anyone to get student loan money schools (for profit and 'non for profit' ) schools have drastically compounded the price it cost to attend within a span of a few years. That has resulted in young adults with no income and no real way to earn income being saddled with 10's if not 100's of thousands of dollars in debt. You cant declare bankruptcy and that debt stays with you for the rest of your life. Community college is a bargain, but if you look at the cost of community college they have gone up drastically in the last few years as well. I'm not even 30 and i can remember a time when I could take a 3 hour course at OCCC for around a hundred dollars. Now a single 3 hour course cost right at 300 dollars per class. So the price has tripled. So to take a semester of classes at 12 hours its going to cost your around 1200 dollars for 1 semester worth of classes. Thats not including books (typically 500 dollars per semester if not more) or any of the other fees, room and board, etc that go along with college. So even a student with no income (living at home with parents, parents paying for their books, gas money, food, etc,etc) and going to a community college for 2 years and is going to be leaving Community College with almost 5000 dollars in student debt from just classes alone - with a 2 year associates degree that wont get you hired ANYWHERE.

Now consider that you can get extra money in student loans from the government to cover room and board, books, fees,expenses, and tuition. A student living on their own for two years of a student living by themselves could spend almost 12 k getting a associates degree.
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[Spartan]

Considering that these days the credit transfers between CC's like OCCC and the other state schools you can even shave more off that tuition cost.

My kids will be entering college here in two years, (son in two, daughter in four), and I'm going to strongly encourage them to see the value of taking basics at a close-to-home venue like OCCC, save a pile of money, and transfer the credits to a place like UCO (where my daughter has already expressed interest) or wherever. I wish to high heaven I'd done the same thing in retrospect when I was there age. I was pretty good at managing limited funds back then, but having the option to live at home cut my college expenses *drastically*. Yeah, I know all about the "campus experience," and to a degree I understand, but there comes a point at which desires have to square with reality...

Undergraduate students absolutely should take advantage of community colleges if their school will accept the credit. However, it is a travesty that OU and OSU accept credit from community colleges. That's a loophole that needs to be closed if there is any modicum of academic expectations and standards associated with our state's top universities.

[Easy180]

Wouldn't call them victims but it truly sucks that a large portion of our teenagers are faced with a is it worth it if I come out 30k-40k in debt...Not saying I know the answer but the current system sucks for sure

[SoonerDave]

Undergraduate students absolutely should take advantage of community colleges if their school will accept the credit. However, it is a travesty that OU and OSU accept credit from community colleges. That's a loophole that needs to be closed if there is any modicum of academic expectations and standards associated with our state's top universities.

Someone here can correct me if I'm wrong, but I believe OU/OSU etc are required, within certain guidelines/parameters, to accept CC credit for a fairly broad section of general education courses. I think its because they're all state-funded institutions, so if OCCC offers, say, a freshman economics class good for three hours, there's really no credible basis on which the "bigger" school should refuse to accept it. Not every course transfers, and there are some rules/exceptions (at least there were back in the day, not the least of which was that I found out I wasn't supposed to be enrolled full time at one school - OU - and part time at another - OCCC LOL, oh well.....

I took 6 hours of freshman econ at OCCC back in the day, and the classes weren't even half the size of the same courses at OU, and we had an excellent instructor, great classroom discussion, good source material, and I don't feel as though I was deprived of anything for it not having been taught by one of the "big" schools - and I can say that as someone who went through a full four-year program at OU's Engineering College and had plenty of "big school" classes.

[Richard at Remax]

It's also no coincidence that the past decade the easier and easier it got to get loans the higher and higher tuition costs became

[Just the facts]

hmm, spend $50,000 to $200,000 sending my kids to college and hope they can find a job, or spend that money starting a small business and guaranty them a job. The wife still says college for them, but I am leaning towards the small business. If they want to get an AA degree I would be fine with that though. My experience has been that most people don't need a college to actually do the job they were hired for.

[Dubya61]

hmm, spend $50,000 to $200,000 sending my kids to college and hope they can find a job, or spend that money starting a small business and guaranty them a job. The wife still says college for them, but I am leaning towards the small business. If they want to get an AA degree I would be fine with that though. My experience has been that most people don't need a college to actually do the job they were hired for.

I agree. Rarely is a degree required to DO the job they were hired for, but it's almost impossible to GET the job in the first place without the degree. It's just a easy discriminator for HR departments to use.

[Just the facts]

I agree. Rarely is a degree required to DO the job they were hired for, but it's almost impossible to GET the job in the first place without the degree. It's just a easy discriminator for HR departments to use.

Yep, that is why if I hire my own kids I can eliminate that barrier to job market entry. One of the problems is that we have produced about 3 consecutive generations of sheeple and now that the economic conditions have changed the sheeple don't know what to do because despite the claim that colleges teach 'critical thinking' they have educated people to be incapable of thinking at all.

[Swake2]

Yes, uneducated is always better than educated.

Talk about sheeple.

[Just the facts]

Yes, uneducated is always better than educated.

Talk about sheeple.

The best education doesn't always come in a classroom. The average employee's output increase more from 1 year's worth of job experience than it does from 4 years of college.

[Midtowner]

The best education doesn't always come in a classroom. The average employee's output increase more from 1 year's worth of job experience than it does from 4 years of college.

Source?

[BoulderSooner]

Source?

don't have a source and not sure i 100% agree .. i think it very much depends on the career field more than anything

[Midtowner]

don't have a source and not sure i 100% agree .. i think it very much depends on the career field more than anything

If it was a true statement, no employers would require college degrees for entry-level positions. Seeing as many employers do require a bachelor's in something, I doubt employers who are actually investing in these employees would agree with JTF's observation. Now, I'll bet that there's a big difference in productivity between a new worker and someone who has been there for at least a year, but what would you want to bet that the learning curve is a lot more vertical for someone with a college degree in the same position as someone without said degree?

[NoOkie]

If it was a true statement, no employers would require college degrees for entry-level positions. Seeing as many employers do require a bachelor's in something, I doubt employers who are actually investing in these employees would agree with JTF's observation. Now, I'll bet that there's a big difference in productivity between a new worker and someone who has been there for at least a year, but what would you want to bet that the learning curve is a lot more vertical for someone with a college degree in the same position as someone without said degree?

It also really depends on what the person went to school for. Some fields do have to be taught. Pick a hard science field, engineering, medicine, etc. Those all need multiple years of training before a person can be let loose onto the world of their field. College isn't a career factory, though. It's about education and a young adult growing as a person.

Of course, I never finished high school or college(I did take some) and ended up with a decent career. But there were definitely a lot of doors shut on me because of my choices to not participate in the education system and it made it a lot harder.