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What were these college students thinking when they took out these student loans?

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I have some pretty substantial student loans, and ended up dropping out after a couple years. Now I have a ton of money to pay off with nothing to show for it. I had no idea what I was doing at the time, and was just going to school because I saw it as the next step. Enrolled in a program that I hated, and eventually left because it wasn't working out.

It is incredibly easy to get a loan here through OSAP (Ontario Student Assistance Program), especially if your parents have low income. On one hand, it's great that it's easy for students who can't afford post secondary to get a chance, but it's far too easy to fall into the trap of taking the loan without truly understanding what you're getting into, especially at 17. All I had to do was fill out a couple forms online, mail in some signed papers, then go pick up my $11k+ loan once school started.
 
What's crazy to me is how quickly tuition has increased. My college was $2300/ semester my first year. 10 years later it has doubled. That means if I had a kid today, I could expect to pay $18-20k per semester, if the time to double stays the same. $160k for a state school degree.

Even at a linear growth rate, that's about $10k/semester.
 
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The wife and I will both have bachelor degrees once shes finished with school, and when its all said and done we will have about 10k in student debt to pay off. Not too bad since we went to a state school, did two years at a JC first and had grants to cover most of the tuition.

Like others have said, a lot of these students have no idea what it means to be in that much debt and that their degree in 'jazz theory' is a waste of time.
 
I never understood huge student loans no matter what the major. What's the point of going to school so you can get a job so you can pay for your school for practically the rest of your life? Seems counter productive. Best to plan it out so you come out of school debt free and when you get a job the money you make is actually profit, then move out when you have enough to afford to. People rush into things and don't realize how much money they're actually spending and that they have to pay it back.

I know people in their 30's who are still paying their student loans. 😵

That's not an option for many people.
 
I was living on my own at 18. Paying for all of my living expenses on my own from 10 days after high school. I took a year off working at a drugstore before going to college and getting a better job. The better job helped but even that didn't pay enough to pay for school directly. Add in living on my own (even with a roommate/girlfriend through most of it) it was definitely expensive. I didn't get scholarships or anything other than financial aid. After about 5 years I graduated (took 2 semesters off both due to work schedule changing mid semester) with my bachelors.

I'm sitting around $40k in student loan debt @ 6.7% interest, which can't be refinanced to lower now that they changed the rules to take the average interest rate of your loans instead of the current rates. Paying the same amount for 10 years means roughly $550/mo in student loans with about 12-14k in interest added on for a total of almost $55k. Paying at the reduced level that jumps every 2 years I'd start out paying ~$150/mo, then 2 years later it jumps to ~$325, and jumps a total of 3 more times and I'd end up paying over $20k in interest alone for a total of a little over $65k. Luckily I have a job I can pay the flat rate and be able to live about the same level as I was in college, even though the new job is paying about 60% more than the one I had in college.

A girl I know has her psychology degree from a good school and has like 90k in student loans but can't get a job really without a masters in that field (which could be poor decisions on her part I don't know). My pharmacist friends are $150k+ in debt, with one looking at $260k in student loans. Her repayment is for 20 years and her "graduated rate" (i.e. the one that jumps every so often) starts at $2500/mo. Now as a pharmacist she can pay it but she doesn't have much free income either and isn't living paycheck to paycheck, but also doesn't really have extra over her bills as spending money.

My point is simple. Student loans are a necessary evil. People make stupid choices and that's their own fault. However, there is an issue at hand here of colleges trying to squeeze out every penny of their students they can. My school tried to force people in my degree to get their 2 year associate degrees, of course playing it as a "it's great for employers to see and you'll get a better job! Promise!" kind of crap. Then these kids find out that now they are being charged 30%+ more than they were because now they are a graduate student. Even though from day one they were going for their 4 year degree. My program had outdated equipment, in a building that didn't have heat/AC every so often, and didn't have enough instructors to teach the courses so you were lucky if you got into the classes you needed. So where was that extra money for the exact same program going? I didn't get my associates first, and paid the cheaper rate the whole time as people in the exact same classes were paying 30%+ more than I was. Why? Add into that the job market that isn't the best right now (although there are jobs), and student loan rates that can't be refinanced due to changes. There is a problem here and it needs to be fixed. It's a problem of students not recognizing the facts (young, stupid, immature, inexperienced, no financial skills, gullible and believe they can make a career out of degrees that have no real world value, etc), and of the schools/lenders taking advantage of that and the government doesn't step in to change it.
 
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I never understood huge student loans no matter what the major. What's the point of going to school so you can get a job so you can pay for your school for practically the rest of your life? Seems counter productive. Best to plan it out so you come out of school debt free and when you get a job the money you make is actually profit, then move out when you have enough to afford to. People rush into things and don't realize how much money they're actually spending and that they have to pay it back.

I know people in their 30's who are still paying their student loans. 😵
You are in Canada. It's really a totally different world there. The tuition rates are much lower on the what the hell am I looking at scale than they are here. More Americans should consider Canadian schools. Even paying out of state tuition they can be markedly cheaper.

It's crazy that student debt cannot be discharged. If I go bankrupt over medical bills you cannot get anything back and I still get to wipe the debt, should be for loans, too. The fact that 18 year olds (80-90% of whom are absolutely retarded in every measure of the word) are being given tens of thousands in debt and no way out is a societal failing. It's one thing if it's for a real job, but these toilet paper degrees (sociology, for example), it shouldn't be possible to get a loan for them because they are patently worthless degrees.
A girl I know has her psychology degree from a good school and has like 90k in student loans but can't get a job really without a masters in that field
Another toilet paper degree. Even a masters guarantees her nothing, and even if she gets a job it'll pay peanuts in that field to start (and maybe forever). I hope she had fun at college because now she is proper-fucked and the only way out for her is if she convinces her parents to delay retirement several years to help pay her toilet paper degree off. Then she's a few years older with little to show for it besides a toilet paper degree and she can work some entry level office job making $12/hour. At that point, hopefully she didn't fall out of the ugly tree and can find a guy with some marketable skills who can bring home the bacon.
 
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If you think this is bad on the part of the students, it is, but it's being driven from both ends. The students see the easy money, but they are being told they HAVE TO go to college.

Check out MD SB740 that goes into effect 10/1/2013. It phases in over the next 4 years.

http://legiscan.com/MD/text/SB740

A short excerpt:

SB740 said:
(A) IT IS THE GOAL OF THE STATE THAT AT LEAST 55% OF MARYLAND’S ADULTS AGE 25 TO 64 WILL HOLD AT LEAST AN ASSOCIATE'S DEGREE BY THE
YEAR 2025.

(B) IT IS THE GOAL OF THE STATE THAT ALL DEGREE–SEEKING STUDENTS ENROLLED IN A PUBLIC COMMUNITY COLLEGE EARN AN ASSOCIATE’S
DEGREE BEFORE LEAVING THE COMMUNITY COLLEGE OR TRANSFERRING TO A PUBLIC SENIOR HIGHER EDUCATION INSTITUTION.


There are also a ton of requirements for increasing high school coursework for college prep for all students statewide, and increasing testing to ensure it's working, including a requirement for 4 years of math.

The math one, I can get behind, because over 65% of our incoming students fresh out of high school end up in remedial math, some as low as 8th grade level, like they never learned any at all while they were there.
 
Let the market sort it out. More government is not the solution.

People will eventually figure out that college is not worth the cost. Demand will drop, as will tuition.

People complaining about personal choices when the facts were right there in front of them garner no sympathy from me. It goes without saying that college is a HUGE financial decision. One should take a vested interest in learning the facts before making it. And if one doesn't, caveat emptor.
 
Let the market sort it out. More government is not the solution.

People will eventually figure out that college is not worth the cost. Demand will drop, as will tuition.
Didn't the financial crisis teach you that, in a large and interconnected market, other peoples' reckless decisions can and do screw over responsible outsiders as well?

Where's the waste going? Figure that out and maybe we can fix these tuition problems.

Administration. Layer upon layer of do-nothing administrators are paid for by the ever-expanding student pool. They certainly aren't going to hire any more FACULTY, are they?
 
This is where the money is going:

http://mobile.businessweek.com/articles/2012-11-21/the-troubling-dean-to-professor-ratio

The Troubling Dean-to-Professor Ratio
By John Hechinger
November 21, 2012 6:15 PM EST
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J. Paul Robinson, chairman of the Purdue University faculty senate, walks the halls of a 10-story tower, pointing out a row of offices for administrators. “I have no idea what these people do,” says the biomedical engineering professor. Purdue has a $313,000-a-year acting provost and six vice and associate vice provosts, including a $198,000-a-year chief diversity officer. Among its 16 deans and 11 vice presidents are a $253,000 marketing officer and a $433,000 business school chief. The average full professor at the public university in West Lafayette, Ind., makes $125,000.
The number of Purdue administrators has jumped 54 percent in the past decade—almost eight times the growth rate of tenured and tenure-track faculty. “We’re here to deliver a high-quality education at as low a price as possible,” says Robinson. “Why is it that we can’t find any money for more faculty, but there seems to be an almost unlimited budget for administrators?”
Purdue is among the U.S. colleges layering up at the top at a time when budgets are tight, students are amassing record debt, and tuition is skyrocketing. U.S. Department of Education data show that Purdue is typical: At universities nationwide, employment of administrators jumped 60 percent from 1993 to 2009, 10 times the growth rate for tenured faculty. “Administrative bloat is clearly contributing to the overall cost of higher education,” says Jay Greene, an education professor at the University of Arkansas. In a 2010 study, Greene found that from 1993 to 2007, spending on administration rose almost twice as fast as funding for research and teaching at 198 leading U.S. universities.
Some state schools are reexamining pay for top managers. “It’s much more incumbent on them to justify their costs,” says Benjamin Ginsberg, a Johns Hopkins University political science professor who wrote a 2011 book critical of pay for college bureaucrats. The University of Minnesota-Twin Cities eliminated one of its eight vice president positions this month after a faculty-led study found duplication among their responsibilities. The school is trying to cut annual administrative expenses by $1.6 million, says spokesman Chuck Tombarge. Trustees at the University of Connecticut are reviewing administrative salaries at the school’s main campus in Storrs, following a controversy over the compensation of the school’s former police chief, who received $256,000 annually—more than New York City’s police commissioner.
Indiana residents pay $23,000 a year to attend Purdue, and out-of-state residents pay $42,000—more than double what both paid a decade ago. Bureaucratic expansion hasn’t led to the higher tuition, says Acting President Timothy Sands. The problem is a lack of state funding, which accounts for 13 percent of Purdue’s budget and hasn’t kept pace with rising costs. Purdue has added administrators to oversee a growing number of research grants and beefed up its staff for fundraising and marketing to help attract full-paying students, Sands adds. “This is a $2.2 billion operation—you’ve got to have some people involved in administering it, managing it, running it, leading it,” he says. “We’re about as lean as we can afford to be.”
Robinson and the faculty senate have taken their complaint to Purdue’s trustees and to Indiana’s Republican governor, Mitch Daniels, a fiscal hawk who will become the school’s president when his term expires in January. He says he wants to take a look at administrative costs that he suspects are “marbled” throughout the university—beginning with his office. In anticipation of his arrival in January, and without his knowledge, the school renovated the president’s 4,000-square-foot suite. The cost was $355,000, enough to send 15 Indiana residents to Purdue for a year.


I'm disappointed in my alma mater. When went it was $18000 a year for out of state. Now it's $42000. If my son goes in another several years it will be even more.
 
Because applying an arbitrary limit on what one can borrow based on a particular major when the major could lead to dozens of different careers is stupid. But look at who I'm responding too.

What do you think are the most likely outcomes of electrical engineering majors vs women's studies majors?
 
You are in Canada. It's really a totally different world there. The tuition rates are much lower on the what the hell am I looking at scale than they are here. More Americans should consider Canadian schools. Even paying out of state tuition they can be markedly cheaper.

Oh did not realize it was that much higher in the states. That would make more sense then.

I paid about 2-3k per year for tuition and maybe another grand for books (which half we never ended up using...) , and I was able to make at least that working summers between school years. Of course it does help I stayed at home, and did not go to be a doctor or something super high end like that. So yeah guess there's lot of variables too.
 
There seems to be little discussion here about WHY the costs are exploding. Like healthcare, it seems there is little concern about the WHAT you are paying, as opposed to the HOW you are going to pay it. There needs to be a major change in the university system. They need to restore massive amounts of funding, and wring out massive costs from state universities. There is an unprecedented building boom in progress on college campuses, while tuition is skyrocketing and state funding is being slashed. That is fucked up.
 
The old timers really don't help with their outdated tuition rates. Thats the whole point, WAY more people are going than there ever should be. There is only so much need for lawyers doctors pharmacists underwaterbasketweaving study of poetry and even the core sciences like molecular biology are pretty much dead.
 
If you think this is bad on the part of the students, it is, but it's being driven from both ends. The students see the easy money, but they are being told they HAVE TO go to college.

Check out MD SB740 that goes into effect 10/1/2013. It phases in over the next 4 years.

http://legiscan.com/MD/text/SB740

A short excerpt:



There are also a ton of requirements for increasing high school coursework for college prep for all students statewide, and increasing testing to ensure it's working, including a requirement for 4 years of math.

The math one, I can get behind, because over 65% of our incoming students fresh out of high school end up in remedial math, some as low as 8th grade level, like they never learned any at all while they were there.
55% with an associates is a reasonable goal honestly. An associates is really easy. They didn't say 55% with Phd's although that is the direction things are headed. Why? People get lets say a bachelors and realize they can't do anything with it so they double down their student loans and get a Phd/Masters in the same field, just because more is better!
 
You have no idea how many people feel trapped because their degree is worthless so they double down on say, pharmacy school or medical school or lawyer school or English Phd. because at least they will get a job that uses the degree hypothetically, which is a bubble brewing that will unfurl in 4-5 years.

Putting it here so I can bump it later :awe:

The bubble should have popped around now, but everyone is VERY good at delaying the inevitable with graduate school. So now its just the graduate school bubble brewing.

I'm not surprised at Toxicology being a crap job. Knew someone who got a nursing degree, an old lady, back when it was all girls could really study, so that she could could work in research labs for $22/hr in the 1980's. That is down to riding minimum wage now. If you can even get the job, because it looks impressive Gen Y will basically live off their parents and work for free if they thought it looked impressive on their resume. Anyway they worked in histology, but now teach histology because ya know, there are no histology jobs so the best thing to do is teach entire 200 student lecture halls about histology. This will be funny 5 years from now :awe:

The sciences are like that, toxicology etc. are very underpaid. People would literally work in labs for free to pad their resume I think.
 
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What amazes me most is if you gave most of these people $50k-$150k, whatever their loan amounts are, in cash.. most could probably create a sustainable business. They aren't dumb, always, obviously driven trying to get an education. But try to start a business in the U.S. and you can't get any money.
 
Because applying an arbitrary limit on what one can borrow based on a particular major when the major could lead to dozens of different careers is stupid. But look at who I'm responding too.
Of course it's not. It's an undisputed fact that certain majors are associated with much higher incomes, regardless of whether you know a history major worth $10M.
What amazes me most is if you gave most of these people $50k-$150k, whatever their loan amounts are, in cash.. most could probably create a sustainable business. They aren't dumb, always, obviously driven trying to get an education. But try to start a business in the U.S. and you can't get any money.
I heartily disagree. A co-worker of mine just sent his son off to college for a degree in art therapy. I didn't even know what it was and had to google it. It consists of telling grown adults to draw pictures and figure out their feelings. And this is costing actual, real money. I met this kid and doubt he could run a lemonade stand.
 
A co-worker of mine just sent his son off to college for a degree in art therapy. I didn't even know what it was and had to google it. It consists of telling grown adults to draw pictures and figure out their feelings.

I sure hope I never get sent to art therapy. If I was told to draw pictures and figure out my feelings, I could only respond with a blank stare and say, "I have no idea how to do that."
 
Let the market sort it out. More government is not the solution.

People will eventually figure out that college is not worth the cost. Demand will drop, as will tuition.

People complaining about personal choices when the facts were right there in front of them garner no sympathy from me. It goes without saying that college is a HUGE financial decision. One should take a vested interest in learning the facts before making it. And if one doesn't, caveat emptor.

I agree, however, the way our government operates we'll see colleges begin to make massive cuts because of less people going and politicians will scream and holler about how we have to bail out the secondary education system because it's the backbone of a strong nation, it's for our children, national security, blah, blah, blah and then they'll create a program that funnels even more government money into colleges when they really should be getting out of the business of subsidizing colleges and all sorts of other businesses rather than artificially propping them up.
 
They weren't thinking, they were being taken advantage of. The problem is that the tuition cost just keeps on going up and at a very fast rate.
 
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