Student Loans

[vraiblonde]

And sadly, that should be a H.S. class. Would be nice to blame it on parents today, but I know mine didn't teach me didly about actually doing such things back in the late 70s.

I learned from watching my mom pinch pennies in half. Nothing like growing up poor to teach you how to manage money.

 

[PeoplesElbow]

Interesting.

What did he think about that relationship, being a teacher, a professor coupled to the need to make sales, so to speak?

He just considered it part of his job, after all that is what engineers do. You have to have research money to publish and have grad student lackeys. He was the best teacher I have ever met fwiw.

 

[Gilligan]

It's ok. You can have mine. It's brand new. Only 1 payment made so far

Gee....that sounds like a great offer.

 

[getbent]

Gee....that sounds like a great offer.

Yeah it is. I mean, it's practically brand new!!

 

[SamSpade]

I learned from watching my mom pinch pennies in half. Nothing like growing up poor to teach you how to manage money.

I used to say no one could spend both sides of a dollar like my Dad. I learned a lot from him.
Budget. Plan ahead. Plan for the unexpected. Shop different stores. Try to only buy stuff on sale, and stock when it is.
Grow food. Buy in bulk if it's worth it. Buy used. Rent things you'll use once.
Go to yard sales, thrift stores, consignment stores.
My Dad liked auctions, something I usually have no stomach for.
Fix things. Can't? Learn.

Teach this to your kids. Let them learn the consequences of bad money handling.

Suffice it to say, I AM saving a plugged nickel for college - but it won't be anywhere near enough.
My income hasn't come even close to keeping up with the cost of college. By the time they're old enough, it will be more than
the cost of a mortgage payment - per month. It will reach a point where the cost of college may far exceed what they may reap financially.
And I have more than one child. I've reached the point where I realize that without significant scholarship money, they aren't going.

 

[Kyle]

"The owe their soul to the company store"

 

[Monello]

Then, lets make a deal; let those kids have a choice, a do-over. In exchange for writing off their debt and having a worthless degree, they get to go do Nat Guard or something of the kind.

I believe there are already programs that have some sort of loan forgiveness.

Public Service Loan Forgiveness ProgramOne overlooked program is the Public Service Loan Forgiveness Program. Under this program, members of the military who have been employed by the military or a qualifying public service job for the last 10 years may have their federal student loans FULLY discharged.
Public service qualifying occupations include:
** Emergency management
** Military service
** Public safety
** Law enforcement
** Public interest law services
** Early childhood education (including licensed or regulated childcare, Head Start, and state-funded pre-kindergarten)

 

[glhs837]

"The owe their soul to the company store"

Four of my Dads brothers and his father were coal miners for a time in Alabama.

 

[Larry Gude]

I used to say no one could spend both sides of a dollar like my Dad. I learned a lot from him.
Budget. Plan ahead. Plan for the unexpected. Shop different stores. Try to only buy stuff on sale, and stock when it is.
Grow food. Buy in bulk if it's worth it. Buy used. Rent things you'll use once.
Go to yard sales, thrift stores, consignment stores.
My Dad liked auctions, something I usually have no stomach for.
Fix things. Can't? Learn.

Teach this to your kids. Let them learn the consequences of bad money handling.

Suffice it to say, I AM saving a plugged nickel for college - but it won't be anywhere near enough.
My income hasn't come even close to keeping up with the cost of college. By the time they're old enough, it will be more than
the cost of a mortgage payment - per month. It will reach a point where the cost of college may far exceed what they may reap financially.
And I have more than one child. I've reached the point where I realize that without significant scholarship money, they aren't going.

This is the core of the argument. In your dads day, it was feasible to save, to be able to see where being that responsible, however slow and steady, was building tangible wealth. As you point out, for most people, while it's certainly not impossible, it's just simply changed so much as to be much more difficult. Useful stuff http://www.mybudget360.com/cost-of-living-2014-inflation-1950-vs-2014-data-housing-cars-college/

Since 1950, housing has gone from something like 2.2 times annual income to now over 4. A car was .45, now .61. And college went from .18 to .79

So, in 1950, a house and a car and college cost was under $10,000, total, and you'd make about a third of that. You could buy those things in three years. Of course, you had food and clothing and everything else but for the purpose of an apples to apples comparison, you COULD buy those 3 major items with 3 years of income.

Now, they cost about $260k and you'd make about a fifth, so 2 full years more to buy those same three major things. At some point, the car is wearing out as well as the home, so losing time on being able to buy them means you continue to fall behind. The education is over and done.

Then this says nothing about the increased expectations of consumer goods and vacations and so forth in terms of what you'd spend then vs. now.

Just for the basics, a young person starting out is facing a race that is 40% longer, at bare minimum, than their parents. If you figured on working from 25 to 65 then, 40 years, at bare minimum, you'd need to figure on 16 more now or 79 for the same life as 1950's man. At some point, and we're there now, futility and frustration replace optimism and hope and it's not because today's people can't face the challenge as well as our predecessors. It's because the challenge has become some 40% bigger. And our dads have FAR, FAR more expended on them that they did not scrimp and save for, health care and longer life, than their parents did then or they had any expectation of now that is not even in those numbers.

Health care has gone from just under 5% of GDP in 1950 to nearly 18% today. So, while a house doubled in relation to you income and a car went up by a third or so, health, like school, went up about four fold. It's like a tractor pull where the weight bears down on the traction wheels more and more as you go. You can't win. It's designed to stop you. This is the fatal flaw in our system so many don't begin to have a grasp on and with immigration, productivity gains, automation and outsourcing, the pressure on the income side is also enormous AND growing.

So, while we commonly think we pale in comparison to prior generations, our challenge is far greater and worsening. Rapidly.

It Trump wants to make America great again and 1950 is as good a model as anything else, to be the same, average income needs to, at the very least, be double, DOUBLE what it is right now. Or, we need to have houses that cost half and cars that are 1/3 less and school that costs a quarter and health care that costs a quarter of what it does now. Or some combination of the 2.

That's the challenge.

 

[itsbob]

Y'all are correct that a degree in the humanities (or in any field) is not necessary for most trades or services, but unfortunately it is often required now simply because so many already have one. As a prime example, most of the hospitals in the area are moving towards requiring their nursing staff to have a BA or higher. Doesn't matter that you only need an associates (and to pass the test) to be an RN in Maryland. And of course Maryland is moving to have Nurse Practitioners get a PHD. What the hell; Doctor Nurse (or is it Nurse Doctor).

But in my opinion you can't un-ring this bell. Damage is done, and an undergrad degree is the new high school diploma. So if we are going to continue to treat undergrad education as almost a mandatory 13-16th grade, then might as well offer it the same way we do k-12 (at a state school anyways). If you choose to go above and beyond and make it into an Ivy League, then you can pay for that yourself (just like private school costs more than public).

It will suck for it to come out of my taxes, but it also sucks to saddle young people with a basically non-optional debt.

Also, I am not opposed to tying in a mandatory couple of years of military (17th/18th grade if you will). Plus this would put the youngest military age in line with drinking/other privileges (21).

Our country (not just MD) is full of 2 year Registered Nurses.. ASNs.. Our reserve (Army Reserves) even commissions 2 year RNs..

But I agree about the need for loans but the people that work on college campuses, financial aid and counselors, need to be empowered to say no.

You should NOT be allowed to go 80 - 100 k in debt for a major that MIGHT get you 30k in debt.. But at the same time student (adults) need to take personal responsibilty for doing it.. Humanities major with 60k in debt, be prepared to work 2 or even three jobs for the next ten years or so.

Or suffer for four years take a HARD major.. graduate with the same 60k in debt but still be able to work one job, buy a new car and in a short period of time buy a house.

 

[itsbob]

Im still paying on mine from 2003, my parents gave me zero help, its a burden, especially if you make over 75k you cant claim a dollar on your income taxes, which is bogus.....

Im not in a public position to have the forgiveness... Sure wish I did..

Sounds like a worthy investment..

I'm still paying on my loans and do it happily every month as I imagine what my life would be without my degrees.

Money well spent EVERY month.

 

[PeoplesElbow]

Hard to compare modern houses and cars to ones from 1950. The average size of the house has doubled from 1950 and cars last a whole lot longer than they use to.

 

[Larry Gude]

Hard to compare modern houses and cars to ones from 1950. The average size of the house has doubled from 1950 and cars last a whole lot longer than they use to.

That's not relevant. Expenses are what they are. And cars do not last a lot longer. They reach the point some kid can't afford to keep them going. 30 years ago, you could always keep them going and do it in the back yard.

 

[glhs837]

That's not relevant. Expenses are what they are. And cars do not last a lot longer. They reach the point some kid can't afford to keep them going. 30 years ago, you could always keep them going and do it in the back yard.

Larry, they do last longer, and kids do keep them going in the backyard. How many old cars would last 200K without breaking into the engine back in the 70s-80s.? It's not uncommon these days, cars with over 150k that have lots of life in them. Here's DC used cars 150K to 250K, 2500 results. Hell, I bought a +200K BMW motor recently that ran and sounded fine.
i expect to run that for a year or two easy. Look up Haggard Garage, those young guys exemplify that young people keeping cars going in the backyard on the budget. Young fools breaking as much as what they fix when they started, but they learned as we all do.

https://washingtondc.craigslist.org/search/cta?min_auto_miles=150000&max_auto_miles=250000

Hell Baltimore 200K to 250K has almost 500 cars.

https://baltimore.craigslist.org/search/cta?min_auto_miles=200000&max_auto_miles=250000

 

[PeoplesElbow]

That's not relevant. Expenses are what they are. And cars do not last a lot longer. They reach the point some kid can't afford to keep them going. 30 years ago, you could always keep them going and do it in the back yard.

Why isn't it relevant? It is only an expense because it is desired.

I come from a town where there are plenty of $100k houses that are 1000-1200 sq ft and plenty of $500k houses that are 4000 sqft. The world is vastly 100 miles to the west of I-95.

The old cars rusted to nothing, sure some kid could afford to keep them going, but it was at the cost of time.

 

[itsbob]

Why has a degree become so expensive? And why can't it be brought down? And why do careers require them instead of the trade education to get that job done?

Because college professors all want to be millionaires..

 

[Larry Gude]

Why isn't it relevant? It is only an expense because it is desired.

I come from a town where there are plenty of $100k houses that are 1000-1200 sq ft and plenty of $500k houses that are 4000 sqft. The world is vastly 100 miles to the west of I-95.

The old cars rusted to nothing, sure some kid could afford to keep them going, but it was at the cost of time.

Ok, fine. Have it your way. Now adjust for income locally. And other expenses. Then, we can go through the exercise the opposite direction, to higher end areas and adjust for local home prices and local income and other expenses.
Then, we can add them all up and come out with the averages.

The point is that I'm interested in macro policy, polices that promote the general welfare.

 

[PeoplesElbow]

Ok, fine. Have it your way. Now adjust for income locally. And other expenses. Then, we can go through the exercise the opposite direction, to higher end areas and adjust for local home prices and local income and other expenses.
Then, we can add them all up and come out with the averages.

The point is that I'm interested in macro policy, polices that promote the general welfare.

What exactly did people spend their money on back then before there was cable, expensive cell/data plans, internet, computers, air conditioning etc? Where did the money go back then?

 

[catlingirl]

I'm in my 40s and just started going to college and I needed a loan because of financial situations that is no fault of my own. (laid off, medical) I plan on paying it back when I can after I get another job. If it wasn't for the loan I wouldn't have been able to better myself. And I was in the military.

 

[kom526]

Because college professors all want to be millionaires..

And football teams are full of NFL caliber talent, gotta fill that stadium.