Make sure that you can afford this!

[Blackbird]

The School in this case is not an honest broker. they are like realtors and mortage lenders in 2005- "you can qualify for virtually any amount of a loan and you should". But they aren't going to be around when you discover that your choices to stay above water may include working multiple jobs, defering marriage, vacations, car and house purchases all because you are carrying a huge debt load from when you were 18-22 years old.

Great carton Bruno. Thanks.

And you make an important observation that student debt will have a long term on the overall economy. The housing market is already suffering as recent college grads can't avoid to buy a new home. http://www.businessweek.com/articles/2012-02-23/student-debt-is-stifling-home-sales Without sufficient numbers of first-time home buyers the entire residential housing market comes to a grinding halt.

 

[sprog]

It certainly makes in-state schools all that more attractive, doesn't it?

When I went to VMI in the '90s as an out-of-state student, the costs were about the same as the current costs for a Virginia cadet. Actually, I think it might have been lower than what VA guys currently pay. My folks could afford to pay it, and it wasn't a burden. Now, it's crazy.

I'd hate to limit my kids to just in-state schools. Without scholarships, however, if costs rise like they have been, that might be what I have to do. Since I don't have any yet, this is more than 20 years on the horizon. I don't know, maybe the zombies will have taken over by then and it'll be a moot point. Probably not, though.

Luckily, Maryland has some nice in-state programs. I'm particularly fond of St. Mary's College of Maryland. You can do a liberal arts major there that doesn't cost a fortune.

I'm not one to encourge an engineering major unless the kid has a real interest in it. It may be more marketable than a history major (at least with just the undergraduate degree); however, if the kid hates it, a crap EE GPA is not so useful. I majored in International Studies with an English minor. I've got a good job, but that is completely thanks to my JD. Bruno's point is valid; however, I think it is, like most things, situationally dependent.

I did use the GI Bill for law school. It didn't pay for everything; however, it did take a big chunk of it.

 

[Pima]

HMQ,

I chuckled at the NYT article. OSU has a 2.12 BN endowment. He is trying to cut money, but OBTW spends it like a drunken sailor at port using 550K in two yrs for travel expenses!

Sure he wants to cut, as long as his perks stay in place.

The other thing he mentions is increasing OOS and international enrollment. I do not know OH state mandates, but in states like VA, NC and MD, this is not an easy feat, it takes the state legislation to change the % of OOS and International. In the states I have mentioned by law the IS colleges vary from 25-30% max in this category. The reason is simple, the state allots a certain amount of their budget to IS public universities. The revenues come from taxpayers within the state. Voters tend to get upset when their college age child cannot get into their own state school, while non-taxpayer kids can at a higher rate.

The comical thing about him saying he is worried about the debt students are paying is his solution. OOS kids pay 35K compared to IS. So, if you are so worried about the debt these kids are saddled with, why is your solution to increase OOS admissions? Is he only concerned with OH student debt? How on earth does that solve the debt problem. It solves the universities budget problem, but not the student debt problem.

OBTW on their website, it states plan for an annual 5-10% increase. Rate of inflation is not that high, but some how their budget will increase between 23-43% over the 4 yrs your child will attend. If you read the article he states for FY 12 the cost was 25 K a yr, if you look at FY 11 it was @22K. 20% increase, which unfortunately is common. The student entering now can expect to pay about 135K by the time they are done for IS. OOS and they are looking at 160K+.

Yet, while they tell students to expect this increase, they sit on 2.12 BN dollars(31st largest in the nation) making a 19% return for FY2011. I call that double dipping! Charging 20% more to students, while making 20% off the stock market.

I also call it crocodile tears and working the media to garner sympathy, hoping that people are too stupid to look at the real facts.

 

[Christcorp]

I don't have too much sympathy for those who graduate college with debt. It doesn't have to be that way. Most of it is self imposed. They chose to have debt. I've been helping kid apply/attend college for more than 12 years. Of approximately 15 students who graduated, 1 had a big debt (Their choice), 2 had debt of LESS than $10,000. And the others; approximately 12; all graduated college 100% debt free.

I've heard every excuse in the world why an individual chose a particular school and how much they would pay for that school. I have no sympathy. And FWIW: The 12 or so who graduated debt free, wasn't all to State University. Many attended schools such as Michigan state, Tulane, UNLV, University of Texas (Austin) as OOS students. Were these all 100% free ride scholarships? No. It cost them money. It just didn't cost them $50,000 - $100,000 worth of debt.

Again; no sympathy. It's their choice. They could have easily gone to college without a lot of debt. When I say "They", I include their parents as being part of the choice. And as a final choice, there is absolutely nothing wrong going to a state University.

First rule: If you know that the career you are heading towards requires graduate school, then you go to the cheapest undergraduate school that has the major you want. When job time comes, they look at your highest level of education. if you're going to have debt, at least make it worth while for grad school.

Second rule: Don't attend college at all if you don't know what "You want to be when you grow up". Thinking that a "Good well rounded general education" and majoriing in a liberal or fine arts degree, especially if that isn't the area you want to have a career in, is a total waste of time AND MONEY. You should have started working, saving money, figuring out what you want to do, and preferably get a job with a company that has tuition assistance. Hell; even McDonalds, Target, and Mini-Mart offer tuition assistance to their employees. If you're willing to manage for them for a set number of years, they'll even pay 100%.

Third rule: It's understandable that you and your parents didn't prepare will enough when you were growing up to have a college fund that can cover everything. However; if when you graduate, if your debt is more than $20-$25,000; then you're an idiot. There are way too many ways to go to school without going into major debt. If you "Choose" to be $50,000 in debt; especially in a "General Well Rounded Liberal Arts" education, then you deserve every dime of that debt.

Sorry; but I have no sympathy. The government has caused the price of education to be so high. Society has BS'd our kids into believing that they need a college degree to be successful. Kid think when they leave high school, that they should have the same standard of living that they had growing up at mom/dad's house; (they don't want to wait 20-30 years like mom/dad did working to get there). And parents/students believe that a big debt from a high profile/name school is somehow worth it. Well, I know a kid here who graduated from Yale in 2009 in the top 20% of his class. The last 2 years he's been delivering pizza. Obviously, not reducing that student loan by much. Again; no sympathy.

 

[Pima]

Blackbird,

As a realtor I agree, the student loan debt is actually a factor in why the housing market cannot recover faster. This is due to several reasons, and my assumption is based on the student getting a job, which we all know is also a factor.

1. 100% loans are gone. To obtain even an 80/10/10 (10% deposit) the buyer needs to be over 750 FICO.
~~~ Hard to save 20K when you owe 50-60K in long terms loans (student and car).
2. To be over 750 you can't carry more than 30% long term debt compared to your net pay.
~~~ Hard to do when you have 2 big ticket items that will be there for at least 4 yrs.

In essence, this debt will be the reason they won't buy a home.

Now for the trickle down effect. Renters typically do not spend money on homes like an owner. They have no motivation to upgrade a kitchen, a bath, a yard/garden/deck, etc. 1 in every 6 dollars across the country is tied to housing. Look at how hard Lowe's and Home Depot have been hit because of the housing market. That in turn hits companies like Hunter (ceiling fans), Malibu (outdoor lighting), Anderson windows, Shaw carpets, Behr paints, DeWault tools, etc. etc. etc. Homeowners renting the property will not be spending money either on that property...they will pay for maintaining, but that is it!

The debt these kids are incurring will impact our everyday economy because they cannot afford to spend on discretionary items.

The other industry that employs 1 in 6 Americans (overlaps with housing) is the auto industry. Think about your car. It has paint, glass, carpet, electronics, etc. If these kids can't afford to buy a new car, the industry will take a hit. This was one of the reasons we had to bail out the automakers. The trickle down effect would have impacted other industries.

This is not an Oh Well, they got their selves in debt, my kid didn't issue. This is a We are all in trouble issue.

If the student loan world goes like the mtg world in 06, these schools have a harsh reality because banks will constrict just like they did in 06. If the loans don't come through, kids will not matriculate and the only big source of income they will have left is ESPN fees and the fact that they charge tens of thousands of kids 50-75 for an application fee.

 

[scoutpilot]

HMQ,

I chuckled at the NYT article. OSU has a 2.12 BN endowment. He is trying to cut money, but OBTW spends it like a drunken sailor at port using 550K in two yrs for travel expenses!

Sure he wants to cut, as long as his perks stay in place.

The other thing he mentions is increasing OOS and international enrollment. I do not know OH state mandates, but in states like VA, NC and MD, this is not an easy feat, it takes the state legislation to change the % of OOS and International. In the states I have mentioned by law the IS colleges vary from 25-30% max in this category. The reason is simple, the state allots a certain amount of their budget to IS public universities. The revenues come from taxpayers within the state. Voters tend to get upset when their college age child cannot get into their own state school, while non-taxpayer kids can at a higher rate.

The comical thing about him saying he is worried about the debt students are paying is his solution. OOS kids pay 35K compared to IS. So, if you are so worried about the debt these kids are saddled with, why is your solution to increase OOS admissions? Is he only concerned with OH student debt? How on earth does that solve the debt problem. It solves the universities budget problem, but not the student debt problem.

OBTW on their website, it states plan for an annual 5-10% increase. Rate of inflation is not that high, but some how their budget will increase between 23-43% over the 4 yrs your child will attend. If you read the article he states for FY 12 the cost was 25 K a yr, if you look at FY 11 it was @22K. 20% increase, which unfortunately is common. The student entering now can expect to pay about 135K by the time they are done for IS. OOS and they are looking at 160K+.

Yet, while they tell students to expect this increase, they sit on 2.12 BN dollars(31st largest in the nation) making a 19% return for FY2011. I call that double dipping! Charging 20% more to students, while making 20% off the stock market.

I also call it crocodile tears and working the media to garner sympathy, hoping that people are too stupid to look at the real facts.

Instead of dumping on the institution, why don't you bring up ALL the facts. Yes, they have the 31st largest endowment. They also have one of the largest student bodies at over 56,000 students. You wanna pick on a school for their endowment, pick on Harvard or Yale. They have 25 and 15 billion dollar endowments, respectively, and still charge hefty tuition and control the purse strings on need-based loans. Or Washington U., with a 4 billion dollar endowment.

And Dr. Gee's responsibility is to in-state students first. That's why it's The Ohio State Univ, not Everyone State Univ.

 

[Christcorp]

Pima; The only thing I disagree with, is that we "Didn't HAVE to" bail out the automakers. Matter of fact, we shouldn't have bailed them out. The demand for automobiles has not and would not have changed. The jobs, factories, cars, etc... would have been absorbed and life would have gone on. That is how business works. Some companies go under and some strive. The worst thing we did was bail out the automakers and banks. It would have actually been cheaper to let banks go under and pay back FDIC insured accounts and allow the mortgages those banks held to be forgiven free and clear. No business/industry is "Too Big to Fail". We, as a country, are actually in worse shape because of the bail outs. This is why the stock market is "ARTIFICIALLY" high. Last time it was 12,000+ points, unemployment was 4%; gold was $700; silver was $10...Stocks are over 12,000 and unemployment is over 8% (11% if you include those who stopped looking); gold is over $1500 and Silver is over $28. The bailouts were the worst thing that we could do to get the economy and country to recover.

 

[Pima]

Society has BS'd our kids into believing that they need a college degree to be successful. Kid think when they leave high school, that they should have the same standard of living that they had growing up at mom/dad's house; (they don't want to wait 20-30 years like mom/dad did working to get there). And parents/students believe that a big debt from a high profile/name school is somehow worth it. Well, I know a kid here who graduated from Yale in 2009 in the top 20% of his class. The last 2 years he's been delivering pizza. Obviously, not reducing that student loan by much. Again; no sympathy.

Mike,

I do agree with you that society has created this issue, but from a different perspective.

As I illustrated in an earlier post, my SIL and niece were/are wrapped up in the illusion that society thinks poorly if the child doesn't go away to a 4 yr college straight out of HS.

Our niece didn't have the stats/grades to get into the schools for her dream major, however, she did have colleges waiting in the wings to accept her at a high cost.

They preyed on them. Many schools do that now. They blast emails telling applicants "we want you" and will waive the application fee, just send the transcripts and "you are in".

Last fall, and even this spring my email container was filled with Dear DS2, fill this out and you are accepted. At first I have to admit we bit off on that, because it didn't cost a penny, and at least he would have options JIC. It ended when we sat down with DS, and he said I don't and won't go there even if my top choice declines me.

He was declined by his top choice. They had over 35K applicants for 4K slots. He has decided to use the VA program. Go to a CC get his AA, pull a 3.0 cgpa and transfer over to his 1st choice.

Emotionally that is hard to hear at first from a pride perspective. However, when we heard him out, we were amazed by how he was being logical and we were being emotional. Going this route, he will get into his dream school, and by carrying extra classes yr round he will actually enter ahead of the 4K peers that got the Congrats letter.

The cost of attendance will be lower, but because it is a CC, we will buy him a car(cheap). A car he will keep after graduation, thus now he will have not only no student loan debt, but no car debt and a degree from his dream college. We are very proud of him, because he has decided at 17 he will obtain his goal, he just will take a different path.

I state this because society does play on all of us, but I am not sure if the fault lies with the child believing they will live like their parents. I think IMPO, it lies with the parents raising the child. I think they care about how society views them and their child in this scenario.

 

[Christcorp]

Pima; your son isn't going to have the mega debt, so he's already shown that his expectations of having everything like mom/dad immediately isn't realistic. Good for him. You should be very proud of him. (Which i know you are).

The child's position is just part of the equation. Society has impressed upon us, like you said, that college is necessary or you can't succeed. They've also impressed that if the school isn't one of the top (Most expensive) schools in the country, then you're settling for 2nd best. All of this is a crock. (Your son is proving this).

Unfortunately, as you have correctly noted, many people will buy this crap. They will have their kid graduate with $50,000+ in debt. Many won't know what they want to be/do, so they'll waste all that money on a generic liberal arts type degree.

College can be a great tool for helping an individual become successful. If the individual is willing to think it out; like your son; and not succumb to the pressures, they can go to college; get a useful degree; and graduate without a large debt. Congrats on your son.

 

[Pima]

Scout,

The article was about OSU, sure I can bring up Harvard and Yale, however, these colleges are private, OSU is not. I can also bring up UCLA with their BN endowment and how they charge OOS 54K a yr. I can bring up UNCCH too if you want.

That is not the point. The point is Mr. Gee is stating he gets the student debt issue, and his answer is to increase OOS and International students. As you stated it is not Everyone State University, it is OHIO State University. If you get it, truly get it, than acknowledge increasing the OOS matriculation saves your school, but does not address the student loan crisis.

Wasn't the gist of the article the crisis of student debt? His solution saves his university, but it doesn't solve the problem of student loan debt. In the end, there will be kids paying OOS tuition to attend OSU in loans. Granted, they are the fools going in debt, but Mr. Gee's position of ignoring the price his OOS students will pay only highlights how they are out of touch.

Do you really think he believes 100% of these OOS kids won't take loans? Of course not, you are too smart to buy that crap. Instead, you know they will take loans and his message was a diversion. He placated Ohio taxpayers for a few moments by stating we will get more OOS students which will increase revenues, while we decrease costs. It may work for a yr., maybe 2, but that is it. VA in 08-09 tried this and state universities were mandated by law to reduce the OOS admittance due to the fury of IS rejections.

Endowments are an issue, and I will agree with you on that, but don't compare a private university's endowment to a public university. Harvard and Yale are private. OSU is public. Apples to apples. Mr. Gee is no longer at Brown where they can mess with admissions.

 

[scoutpilot]

HMQ,

I chuckled at the NYT article. OSU has a 2.12 BN endowment. He is trying to cut money, but OBTW spends it like a drunken sailor at port using 550K in two yrs for travel expenses!

Sure he wants to cut, as long as his perks stay in place.

The other thing he mentions is increasing OOS and international enrollment. I do not know OH state mandates, but in states like VA, NC and MD, this is not an easy feat, it takes the state legislation to change the % of OOS and International. In the states I have mentioned by law the IS colleges vary from 25-30% max in this category. The reason is simple, the state allots a certain amount of their budget to IS public universities. The revenues come from taxpayers within the state. Voters tend to get upset when their college age child cannot get into their own state school, while non-taxpayer kids can at a higher rate.

The comical thing about him saying he is worried about the debt students are paying is his solution. OOS kids pay 35K compared to IS. So, if you are so worried about the debt these kids are saddled with, why is your solution to increase OOS admissions? Is he only concerned with OH student debt? How on earth does that solve the debt problem. It solves the universities budget problem, but not the student debt problem.

OBTW on their website, it states plan for an annual 5-10% increase. Rate of inflation is not that high, but some how their budget will increase between 23-43% over the 4 yrs your child will attend. If you read the article he states for FY 12 the cost was 25 K a yr, if you look at FY 11 it was @22K. 20% increase, which unfortunately is common. The student entering now can expect to pay about 135K by the time they are done for IS. OOS and they are looking at 160K+.

Yet, while they tell students to expect this increase, they sit on 2.12 BN dollars(31st largest in the nation) making a 19% return for FY2011. I call that double dipping! Charging 20% more to students, while making 20% off the stock market.

I also call it crocodile tears and working the media to garner sympathy, hoping that people are too stupid to look at the real facts.

Instead of dumping on the institution, why don't you bring up ALL the facts. Yes, they have the 31st largest endowment. They also have one of the largest student bodies at over 56,000 students. You wanna pick on a school for their endowment, pick on Harvard or Yale. They have 25 and 15 billion dollar endowments, respectively, and still charge hefty tuition and control the purse strings on need-based loans. Or Washington U., with a 4 billion dollar endowment.

And Dr. Gee's responsibility is to in-state students first. That's why it's The Ohio State Univ, not Everyone State Univ.

 

[Pima]

Mike,

In our area, he actually is now becoming the norm. We live in an affluent area, and our schools typically rank nationally on USNWR, Newsweek, Fortune and Money regarding academic caliber. However, due to rising costs of college, many of the students are now applying IS as safeties compared to yrs ago.

DD applied to the same university 2 yrs ago, they had 30K applicants, and she was admitted to their Honors program. Notice it was a 15% application increase in 2 yrs. When the TWE came she was a great sibling, pulled up the stats, and informed her brother that she didn't have the scores to make Honors, would be lucky to get admitted this yr.

Look at our SA's, look at your DS at the AFA. The stats have exponentially increased over just the last 4 yrs. IS colleges are no different. Cost of education has had top tier candidates applying to schools that they never would have considered when their folks 401Ks/home equity were flush. Now they are throwing in the applications like Halloween candy. Colleges know historically X% will not matriculate, but at the same point, they have to be conscious of the numbers they do admit for the class.

The tide is turning and you see that with the IS matriculation pool. This also has a positive impact for the schools. Students that would have gone to higher tier OOS or private now are going IS. The IS schools are getting higher tier students, which in turn makes the school more competitive academically. More competitive academically turns into higher qualified profs. Higher quality turns into more recruiters for new grads. More recruiters equals more job placement. More job placement will result in more students. The wheel is round.

HYPPSM, and SA's will always have the pool, but for the tier 2 colleges this is a positive impact of the debt issue.

 

[hornetguy]

Pima; The only thing I disagree with, is that we "Didn't HAVE to" bail out the automakers. Matter of fact, we shouldn't have bailed them out. The demand for automobiles has not and would not have changed. The jobs, factories, cars, etc... would have been absorbed and life would have gone on. That is how business works. Some companies go under and some strive. The worst thing we did was bail out the automakers and banks. It would have actually been cheaper to let banks go under and pay back FDIC insured accounts and allow the mortgages those banks held to be forgiven free and clear. No business/industry is "Too Big to Fail". We, as a country, are actually in worse shape because of the bail outs. This is why the stock market is "ARTIFICIALLY" high. Last time it was 12,000+ points, unemployment was 4%; gold was $700; silver was $10...Stocks are over 12,000 and unemployment is over 8% (11% if you include those who stopped looking); gold is over $1500 and Silver is over $28. The bailouts were the worst thing that we could do to get the economy and country to recover.

My understanding is that the gov't is going to make a small profit from the banks. At least from the economists I know who have been reporting on the TARP and bail-out stuff.

Hard to dump much on Harvard/Yale. Check out the infographic here: http://www.nytimes.com/interactive/...tudent-debt-at-colleges-and-universities.html

You can find Harvard/Yale/Princeton in the bottom right. Highest annual tuition and fees, but some of the lowest debt loads, on average (~5-10K). Granted, that's the average and I don't know what the distribution or median is like. Maybe so many affluent are going that many have 0 debt and those with loans are drowning. Or maybe they give a lot of tuition assistance. I don't know. But they rank towards the bottom of public and private on average debt on graduation.

 

[Christcorp]

The thing is, many students don't know how to research; many guidance counselors are actually ignorant; and many parents are simply not in the "know". The truth is; it can actually be CHEAPER to go to school out of state than in state. Most colleges/universities get certain amount of money from private and federal sources. Much of this is tied to things like diversity. And believe it or not, universities consider everything as diversity.

Here in wyoming, which is pretty inexpensive; it's actually cheaper for a kid to go to college in Hawaii than to stay here at home and go to the university of wyoming. A kid from Vermont, could probably go to school cheaper applying to Arizona than staying in state. Why??? Diversity. Arizona doesn't have a lot of Vermont kids. It helps their standings to have students from all over.

The problem I see about 80% of the time: "Kids/Parents don't want to move away". If you're from Maryland/Jersey/Virginia/Deleware/etc... and are applying to a school in those areas; yes, it's difficult to get in, and it's really expensive. The majority of the local population of students is applying there. But if you apply to a school that doesn't get a lot of applicants from your area, not only do you have a better chance of being accepted, but also a better chance at getting a merit scholarship; department scholarship; financial aid; etc...

Here's one you'll love: A kid I was helping a couple years back found he had a great chance applying at an OOS college. Good school. They could only offer him a 50% scholarship, so it looked like he would have to have a small student loan. But admissions told him: "Instead of your major in business, if you change and become a communications major, and have a minor is stats or business"; the college of communications would give him a full scholarship. That's what he did. Major in communications, minor poly-sci. Happy as all hell. No debt at all when he graduated.

Point is; if an individual graduates with a large debt, it's because they didn't know any better. They believed the hype and they didn't research.

 

[Christcorp]

Hornet; "IF", and I use that term loosely; all entities that were given bailouts and loans were to pay them back, then yes, the government in theory would make a small profit. Worse case scenario, at least not take a loss.

Unfortunately, there are some already that can't and won't be able to pay back the bailout/loans. Some businesses/banks have actually gone under already. Some, are expected to take at least 10 years to pay back. We usually only hear about GM and some of the large financial institutions. They aren't the only ones who have been given money. People also forget about the "American Recovery and Reinvestment Act". A lot of that money went to states to help stimulate employment. It was also designed to assist education, health, energy, tax incentives, etc... That is almost a trillion dollars. Employment was a joke. We all know that government money use to employ anyone, is simply a redistribution of tax dollars. It doesn't create real jobs. The government doesn't produce a product or service that can be sold and make a profit from. There are some government jobs that are necessary; such as the military and department of transportation at the state/local level. Anyway; that's a lot more of the money being used that will not produce any savings and is not expected to ever be paid back.

 

[AF6872]

Bottom Line: It ain't easy to put three kids through College.

 

[M2inOR]

A comment on the in-state/out-of-state choices:

Here in Oregon, students are automatically accepted to the University of Oregon or Oregon State if they graduate from High School above a certain GPA. This has led to overcrowding and/or lack of dorm space for incoming students as most choose the "close-to-home" university.

There have been newspaper articles describing how the in-state tuition costs may actually exceed out-of-state opportunities, due to more available financial aid in the form of scholarships at those out-of-state schools.

Oregon is cash-strapped, and the school endowments are tiny, so financial aid offerings are usually loans. ROTC is on campus at both schools.

California is having a crisis as well, as many in-state taxpayers are quite mad that their sons and daughters are not being admitted to their state colleges and universities while out-of-state students are getting placed. The attraction being the higher tuition being paid.

I have to agree that many high school counselors are ill equipped to advise their students of the many opportunities available to them. There is quite an industry of personal college advisers whom parents/students hire to help navigate the college application process. The fees are high, but may be well worth it to avoid the 5-figure surprises that await future graduates.