Boston Gal's Open Wallet

I would imagine that situations like this are going to make state colleges and universities much more appealing.

 

"the family has tapped ... home equity loans, and borrowing against their 401(k) retirement plan. One year, Michael took out a student loan in his own name."

Oh no! God forbid the kid pays for his own schooling.

I took out loans and plenty of my friends took out private loans. My other problem with this is the amount of time they wasted. They got a letter back in April, so why didn't they come up with a "what if the loan doesn't come through" scenario?

 

I have always felt that going to college should allow the student an opportunity to explore options but, given the situation, is spending $160K + over 4 yrs to get a degree in Music and French a good decision, given the economic times? It seems like the family is working really hard to
support this young man's interests. I guess old age makes me a bit more practical.

 

But you have to think of it this way, its senior year. Better to spend the money to finish it up then let 3 years worth of tuition go to complete waste.

And the problem is not with the student taking out a loan. Private loans are scarce these days and when they aren't they have variable interest rates around 10%. This is not unheard of before, but in this market is marked up over extremely low base rates. When the market rebounds over the next year I do not want to see what type of interest rates they will be looking at.

 

The 'higher ed' industry is just as screwy as the medical and housing industries. It's so easy for a kid to blow 50-100k a year on a private school, signing off on a big packet of loans. It's too abstract at that age. At 17, you're not at your financial brightest (though you learn soon enough that the adults aren't that much brighter. ;) )

With a lot of the elite schools starting to offer free or reduced tuition for those in need, I think this crunch will be better for students, keeping their options more limited. I don't see why we complain of predatory credit card issuers on college campuses, and look the other way when the the Bursar comes through. It's the same thing.

 

11:37 - I used to have similar feelings, except having looked at the earning statistics, you see that it is almost impossible to have decent earning opportunities w/o a college degree, regardless of what sort of frivolity that degree is in. College is still worth it.

But there is an aspect of higher ed that is a rip off. Many schools whine that even w/ their high price tags, their endowments end up subsidizing the avg student for 50%+ of their costs, but that's because a lot of the "costs" include things like blinged-out gyms and fancy extra-curricular activities. Of course, these "extras" are attractive to families that can afford full-freight, which is also the most attractive clientele for higher education institutions.

 

maybe he should take a year off and earn money for school. It is not unheard of to do so and it would ease some of the family burden. It is kind of selfish to expect your parents to pay for your school ( I paid for my undergrad and graduate degrees), particularly when his mom cannot work.

 

Crap! $49,000 a year for a small, private college? Exactly why my kids will be going to an in state State U. I'm saving diligantly for their higher education, but I'm not saving enough for a private college.

 

One of my children is entering her senior year of high school in September and is in the process of identifying college's to apply to - we are hoping she goes to a state school, but getting into one is no longer a guarantee.

More children want to attend college than there are spaces. So if your child gets accepted to the high priced private school and wait listed at State U - guess what? You end up sending your child to the high priced private school.

 

Technical and trade schools would be a good idea. Electricians, plumbers, carpenters often make more money as business owners than a lot of the working world and they do it without starting off in debt from school

 

Unbelievable. They're tapping their equity and draining their retirement so their son can get a useless degree from a marginal school. Then they'll foreclose so we taxpayers can help pay for little Mikey's education, and later they'll be part of the AARP voting block insisting that people my age pay higher taxes because they don't have any retirement savings.

These people make me sick.

 

You would think with the internet and all of the resources it has to offer, you can easily find a student loan. This is what I did and had no troubles at all.