Cost of college does seem to be more about choices though than the media makes it out to be, Bankrate has this list of the 10 top most expensive and cheapest private and public colleges. Sarah Lawrence tops out at 30k+ a year (not including room and board I'm guessing) but even the most expensive public colleges range from 8-10k. That's probably in-state tuition, and probably not including room and board, and there's always the top 10 affordable public colleges in the range of 2.6-3.2k a year. Not too bad, and several of them are not bad.
Has college tuition and student loan debt gotten out of control? Or are too many people making poor choices and not attending local and affordable state colleges? Or is that not even an issue when expensive colleges and student loan companies are fleecing parents and students?
I had 41k when all was said and done. While I was a PhD student, I consolidated 25k at a 5% interest rate which made a HUGE difference, and 16K to 3%. I have been making extra payments to the 25k for the past 2 years.
ReplyDeleteIt killed me to know that I was paying $200+/month in INTEREST and barely knocking anything off the principal, so adding payments and paying more lowered my balance super fast. I am currently at 17k total balance (between the two loans), on target to get rid of one loan by the end of the year, and then be left with one loan for 12k (payments are $100/mo at 3%) for however long. I would rather pay into my retirement than pay extra on that loan. I LOATHE being in debt.
The options for interest-rate reduction have pretty much disappeared, and that was what saved me. I consolidated and locked in the low rates during my PhD, which meant that I had to start paying on them right then and there. I also do auto-debit for the payment which takes off another .25%.
When I was teaching, I would take 5 mins at the start of classes to answer questions about whatever (jobs, internships, courses to take, you name it)... one student asked about loans. So I showed them that my 41k in loans would be 65k+ in payments if I only did the minimums, and while the interest is tax deductible, it depends on your tax bracket how much of it you get back! I told them to work while they are in school, get paid employment over the summer to have for books, supplies, spending money. Don't rely on loans. That seems to be the big problem... "everyone is doing it." Everyone takes out loans. I worked part-time while I was in college, I worked at summer internships and mall jobs, and I had no support from family. I tell them to try to finish in 3 years if they aren't going to work a part-time job.
I can't tell you how freeing it is to walk into a car dealership and pay for a one-year old car in cash. I remember hearing that my grandmother did that once, and I swore to myself that I was going to do that too someday. And I did. I saved like a banshee for the past few years. I could have put the money into the student loans but I'm glad I milked my last car to the bitter end and didn't have to take out another frickin loan for something. I can't wait until I write that final check for the one loan at the end of the year.
jc
http://techcrunch.com/2011/04/10/peter-thiel-were-in-a-bubble-and-its-not-the-internet-its-higher-education/
ReplyDeleteThe inability to declare bankruptcy with student loans THANK YOU GEORGE PHUCKWIT is what will bring this current generation to its knees.
jc
Knowing I planned to go to graduate school, I deliberately found a school that would allow me to get research experience as an undergrad, without accumulating too much debt. I went out of state, but had a scholarship for difference between in and out of state tuition, as well as a couple small merit scholarships. It was ultimately cheaper than the similar school 30 minutes from my parents, and allowed me to be more independent.
ReplyDeleteI think many students don't really consider cost until fairly late in the college search (at least, amongst my high school peers, that was the case). The guidance counselors always tried to steer them towards applying to schools regardless of cost, seemingly forgetting that most federal "financial aid" is just another form of loan. Overall, it seemed like most students applying to college really weren't considering planning for more than the next 4-6 years, instead of planning for the long term.