The cost of a college education is becoming one of the pressing issues of our time. Today--with the cost of tuition as high as it is--students have to use a much smarter strategy for choosing a college. And students have to think about the debt they'll have to pay off after graduation: There are 38 million Americans with student loan debt. In 2010, Minnesota had the 4th highest average in the nation. The national average is around $25,000, a 5 percent increase from 2009.
How do you figure out what you can afford--now and later? Personal finance educator and consultant Ruth Hayden joins The Daily Circuit Friday to discuss how families can figure out what they can afford, and how to get the best education without accumulating loads of debt.
More people than I expected still would go to college, but would've done it differently.
Would you take the same path through college if you could do it again?
I would have taken time off at some point to make sure I was sure about my degree path. I have a 4 year degree with a double major and a masters degree in an area I do not have any interest in working in.
I just graduated with a Liberal Arts degree from Lawrence University in Appleton, WI and, while I made the choice to shoulder a large amout of debt in the future, I wouldn't have given it up for anything.
LU is an incredible institution where I was honored to work with the best of the best, stimulated and incredible professors and now, straight out of college, I am making 40k per year, in large part because of the value - not only of the school name - but of my learned ability to LEARN.
I took out student loas not only to pay for college and living, but also for going on vacations and living a life that I really shouldn' t have been living.
Going on 3 week European vacations, buying expensive clothes, going out all the time - Now I pay roughly $600 a month on student loans.
I wish there was more restrictions on where the money goes instead of just giving lump sum to students. Who don't necessarily know how to responsibly handle that money.
Go to college in Canada. Cost for non-resident about $2,500 a year.
Some food-for-thought undergrad tuition comparisons follow…
University Foreign Student Tuition
Cambridge University $20,000 [£13,000/yr]
London School of Economics $23,700 [£15,168]
Stirling –Scotland $15,900 [£10,200/yr]
U British Columbia $21,900
University of Iowa $12,500
UMN in-state $8,300
As a recent graduate from UMD, I found that the number that was calculated as my "family contribution" ended up becoming my debt. Nothing forces a family to pay.
I now greatly regret my choice to attend a private college.
8 years after graduating I still have more than $15,000 in school debt. Worse yet, after being laid off from my job and struggling to find another I learned that because my mother cosigned on my largest student loans, they can not be deferred even though I am not working. She is now retired, but stuck helping me make these payments.
It's not worth it. I tell everyone I know to choose a public college and/or get generals done PSEO in high school or at a community college.
My partner just graduated from the U of M, and his 3 years there were marked by nearly 10% tuition increases every year.
Personally I would like to see some commitment from schools to keep a freshman's tuition at the same level (perhaps with slight increases for inflation) for at least the first 4 years.
I went to college for the "Health & Wellness" industry. To become a personal trainer. 1) For my love of fitness and being healthy and 2) With America's problem with obesity today and growing issues with this.
My wife and I have a junior in high school.
We have a large sum of cash in a checking account that we have been saving up for remodeling, but in reality we will likely have the cash next January. We will do FAFSA next year in January. In FAFSA's view is cash in our checking account looked at differently than if the cash was in a 529?
A bit of hope for young people. I came out of Bemidji State with 12K in debt, I had saved a lot, and got grants for 1 year only.
Landed a job immediately and the debts are paid off. Go to school. Work hard. Get involved.
When my sister went to college she got grants because my mom was single.
Four years later when I went my mom was married and I needed to take out loans. She's married with a house and kids and I'm still paying my loans off at $400/month. I went to the U and lived at home.
I see the cost of college rising at a much quicker pace than the quality. Where is the value for students?
I was never under the impression that my parents would ever be able or willing to help pay for college.
Is it really that common for low and middle income students to EXPECT family help? Isn't parent paying a thing of the past?
I Will do FAFSA for the first time next year Jan 2013.
I wish colleges would quit calling the loan package "your total award." It sounds misleadingly like you are about to receive free money. We are still paying off $10,000 on the loans we were "awarded" for our child's one year of college.
I finished a Master of Nursing program at the U of M in December.
I was shell-shocked when I saw the $60,000 pricetag for 16 months of tuition and living expenses. I was kicking myself for option for the MN option instead of an associate's degree.
However, I passed my boards on Feb 1st and got a job yesterday. Not only am I able to start working in a hospital and bypass lower-paying entry-level nursing jobs, I was unemployed for less than a month. In today's economy, I see this as nothing less than a miracle. It was money well-spent!
If you're paying off a lot of student debt--what do you know now--that you wish you'd known then?
And parents, what are some of the household budget questions you're asking yourself as you contemplate college tuition?
I went to law school and graduated with approximately $150,000 in debt. We were led to believe that there would be jobs available for us at a rate that would allow us to pay that back.
I am fortunate enough to be employed, but not at a rate that will EVER allow me to pay this amount of money back.
My brain is worth a house now.
It was never really explained to me what the differences in my loans are. I am on the income based repayment plan now just trying to get by. I am facing an increase in my payment to $1800 per month starting January next year. That is over 75% of my take home income. I was almost not able to get a car loan last summer because of my student loan debt and my husband and I are having some issues getting approval for a mortgage because of my student loan debt.
I'm not sure what we will ultimately do. I do not regret my education. I had no other way to finance my education. And without that education I wouldn't have any job.
I agree with the Canada comment, Manitoba has reciprocity with MN.
As an ongoing adult learner with a masters, I think that technical certifications are more important than degrees at this point in my career. There are quite a few low-cost, self study opportunities for these.
I recently graduated from the U of M with approximately $45K in student loans.
Would I do it again--absolutely!!
It has been the best investment I have ever made; however, I majored in chemical engineering and have a good job where I can make my payments. Advice: make sure your investment will pay off. Go Gophers!!
25 years ago, my husband and I were able to pay for our college tuition at the U of M and St. Kate's with our savings, by working summer jobs and with work-study opportunities during the school year.
Even with near full-time summer jobs and careful savings, our children can't even begin to earn enough to pay their tuition bills. What has changed?
Watch out for placement exams - some for profit schools are forcing students to take remedial coursework that doesn't earn credit, but they still have to pay for.
I worry about the role of high schoool counselors. At least in the suburbs they encourage kids to apply wherever they r interested without looking at the cost becos of aid packages.
If u r a good but not superstar student or athlete or not needy, you r going to pay full or clode to full price. I think part of it is these high schoool's pride in where there students go and the number that go on to 4 yr college.
Going into debt for school scared me in high school so I chose to go to a public university. Scholarships, completing a year as a PSEO student and a little family help kept me out of debt and I'm grateful I don't have the burden of school debt.
I wouldn't have done things differently because I got a good education and had a great experience. I can't imagine trying to pay off school debt with my current income. I'm able to work for a non-profit and make less than I probably would make in the private sector because I don't have to worry about school debt.
I wonder how much the advertising costs from colleges that blare on the TV all day add to the costs of those colleges.
I went to Northern Michigan University 2007-2011 and tho MI has no reciprocity it is a less-expensive school and their Financial Aid dept did a great job helping you find ways to maximize Gov't loans & school scholarships.
I ended up with ~$42k in debt and worked thru school, but it was the best time of my life & I wouldn't give it up. But I think my brother is making a better choice staying at home & going to community college for 2-3 yrs first.
I was raised to go to the best school I could which I don't disagree with but for grad school I went to a highly ranked program that was out of state tuition for me.
I was too young to consider that I would incur $30,000 in debt to get a MSW and my starting salary would be about $30,000. Also in my field a graduate degree was required for advancement but the salaries do not go up that much.
In contrast my husband went to grad school for his MBA at the same time and tripled his salary coming out. I wish I had realized my financial situation before starting my program, whether it was my parents, the school, or my responsibility to consider this. For me it was not worth going to a program of high rank because in my field it is all about community and relationship building done through internships. All the connections I made in Michigan were useless when I moved to Minnesota.
My personal opinion is that American parents and students have been duped by higher ed into taking on excessive debt and buying into the whole idea that doing that is a good idea.
In my view everyone has been irresponsible…students, parents and smooth-talking universities alike. People completely overlook other options outside of the country.
Two of our three daughters went to college in the UK at prestigious universities. Undergrad and grad school. When you tally everything up, including transport, international student tuition, living expense etc it is…
• Faster—students graduate in 4 years
• Cheaper—Much less than US private school tuition and few universities are actually less than the U
• And, in my book better. World class education, international contacts and perspective. Prestigious credentials.
• Probably more fun, too
All of those advantages apply to Canada as well.
People who do borrow from the federal government to pay for college can use those funds at international universities. They aren’t limited to spending the money in the US. Also, just alike the US, students attending foreign universities can apply for grants to reduce their costs.
I am a 2010 graduate of Beloit College, I personally will be paying my student loans until I am 35. It was my dream college and I made the leap of faith for it. My loans are pretty high. But I don't regret it for a second.
I chose the best college for me and it is worth every cent.
I paid for all my college by work study and summer jobs. Or why not take 5 or 6 years to complete a four year degree. I have avoided like the plague loans. Is no one doing this any longer?
Loved college....didn't cost me a dime, just five years of post graduation military service.
I wonder if the conversation we need to be changing starts much earlier than age 17. Shouldn't high school graduates have some grasp of how money, debt an dinterest work? Whose responsibility is it to make sure these budding taxpayers have a clue?
The average college debt after 4-5 years is less than I paid for my last car. You need to keep the debt load it in perspective. Having said that, I also believe collage tuition is to high and needs to be addressed.
Given the level of debt the current generation is carrying, do you think the bankruptcy laws will have to change to allow student loans to be discharged?
It seems to me the cost of educating a population must be borne one way or another: either make college affordable on the front end or take the hit on massive defaults.
I am college educated, but I take offense at the notion that a university is the only place where one can "learn to think".
Most people go to universities these days to get a job, not to become a well-rounded thinker. Trade schools would be another option for students to consider.
I did the Post Secondary Options Program in high school and got two free years of college.
I would highly recommend that program. I was able to finish my degree at Hamline University in three years.
Because of scholarships, grants, and graduating early, I only had to take out one loan -- a federal loan. I only accumulated $13,000 in debt and have a great job that I love.
I wish I would have known that the scholarships I earned would be offset by the feds lowering my financial assistance by the same amount.
I also had an idealized view of my education being important no matter what the cost, and it wasn't until a few years after graduation that I developed a realistic view of what my monthly budget would be with student loans to pay off. They tell you how much your monthly payment will be in advance, but with no experience living independently, the information is difficult to put into context.
After working a few years in the field my degree was in, I ended up changing careers to make more money. I also think events in my life have been delayed in part due to my responsibility to repay these loans (I'm 31, unmarried, no children - I want marriage and children so I think these might be different if I didn't have the loan burden).
We tell our ninth-grader that her part of getting into college is to get straight A's, which she is fully capable of doing.
This is not expecting perfection (she can still be right only 90 percent of the time). But by having great grades, she can contribute to her own further education through scholarships (we hope--keep your fingers crossed).
My parents said they would pay for me to go to the U of M or an equivelantly priced school.
I chose to go to the U of M over a private school out of state so that I didn't have any student debt when I graduated.
I WISH that my high school or college had a financial responsibility class. Huge fail on the part of our education system! No wonder we had so many people fall into bad loans, we never taught anyone how to remain financially sound and always expect parents to pass that on to children.
I recently heard that the #1 reason for college drop-out is DEBT. Is that true? We need to educate the youth of this country to stop this alarming trend.
I slacked off a lot in college and attended three universities over a twelve year span. Eight actual years in school and finally graduated in 2004 with an engineering degree. Since things were cheaper when I started, I only have 50k in debt, but I also make a good salary. Just four years of college would cost twice what I paid, but wages have hardly increased. Wage stagnation is the double whammy in this. discussion.
I am tired of the agrument that relys on personal responability.
Will your guest give any light to the college debt bubble/crisis that is on the horizon. This one will blow the housing bubble out of the water! I have a 4 year degree from UWRF and I would never do it again!
1. Go to Junior College first and avoid paying a premium for the first 2 years.
One thousand dollars is a huge debt, if you can't afford to pay it.
Recommended by Ruth:
2. Try to pay your interest on loans while in school even if you're not paying principle. 3. Understand that it's critical to research your post education employment opportunities.
I told my niece to look into taking college courses while in high school and have the tuition paid by the school district, this has been available in Minnesota.
She did not. She just told me this past Christmas that she wishes that she had.
I read recently that Finland provides free college education, including to US citizens (or anyone, I would assume), and that there are numerous English-language courses.
As a parent, I wish this conversation was occurring to this extent 6-7 yrs ago.
I have 1 child who graduated 1 1/2 yrs ago & and is paying over $500/mo on college loans.
I have 1 still in college who won't graduate in 4 yrs as our first child did so will incur even more debt.
It keeps me up at night; we do and will help our kids pay their debt but they will still have the majority of the burden and it will definitely affect life choices they've made/will make after college. We know it's not advisable to have this affect our retirement income but there's no doubt it will.
My parents paid for my college costs and it simply makes me sick that we cannot even come close to doing that. Money talk has got to start in high school in a required class as you're currently discussing. And an in-person conference with student/parents and college financial aid counselors is a must as well to lay out the cost a student will pay after graduation.
As a recent graduate from a private school, I am heavily burdened by debt. I was lured by "scholarships" my freshman year, but it eroded to practically nothing in my junior and senior year--and my grades were good!
stop blaming the students...this is clearly the result of an education system that has become more for profit than educating kids.
In general I'm happy with the choices I made, but I wish I would have had insight into how my borrowing choices would burden me long term. I'll probably be paying off my debt until I die.
(Side note: My federal school loan was recently moved to another processor.)
Banks sell student loans over and over again, wells fargo sold all of theirs off last year to ACS, I didn't have a choice.
and... what is wrong with being responsible for the debt that you accrue from a college education? forever?
My daughter has 30 ACT, high gpa and wants an expensive school we can't afford.
She is taking a gap year to live in Brazil and all scholarships won't consider her since she won't be in school next year.
help! she can't apply next year due to her location. What can we do?
Driving us crazy that all of our prodding and suggesting that our son get an early start with scholarships seemed to fall on deaf ears.
Though he sent out several applications, I still can't understand why he won't bother with searching for scholarships when he knows the dollar amount we can provide and the dollar amount the schools cost. Seems like he should take a role and not have me do it for him.
how about studentaid.ed.gov and getreadyforcollege.org
We made a choice to live a less extravagent live style to be able to save to send our kids to college, debt free. Most people don't want to deprive themselves to do this, but it was important to us. We lived on one income to do so.
Lastly, if you just want to learn to learn, the best reason, MIT and other great schools are offering non-credit classes for FREE.
I understand the appeal of doing the first year or two at a community college at a lower price. In my experience, the 1st year at my 4-year college was invaluable because I lived on campus, grew as a person, and met my lifelong best friends.
That is truly worth everything to me!
Why has a college degree gotten so expensive?
I have 80,000 in college loan debt. I believe I was mislead by the for-profit school I choose to attend. They have now discontinued my major at the school and abandoned the CIDA accredidation they were pursuing. I would absolutly not do it again. I feel stupid and screwed.
There is no way to gauge the wisdom of one's investment in college unless you know what you will be able after college. Most colleges do not provide any information about the numbers of graduates in a particular major who get jobs, what those jobs are, and what starting salaries are.
I asked, and was told "the sky's the limit!" The reality is that there were six published job openings in my field in the entire country last year. The promise of "lots of jobs with this major" must have included taxi driver, bartender, and babysitting. And yes, the loans are coming due.
If people think they cannot pay back a $30,000 loan or even a $100,000 loan, how can they ever think that they could own a house?
I teach at a local for-profit college. While I believe the school has its heart in the right place (they claim their for-profit status enables them to make better, more nimble decisions that benefit their students), some of my colleagues and I feel uncomfortable with the thought that people are profiting off of the students' college loan struggles.
I am one of those wh is being supported by my child. Doesn't feel good. Just have a GREAT child.
I had worked many jobs while getting my undergrad degree, so my loan amount was not that much.
I also was able to work while getting my Masters, which allowed me to take free classes. I had done a lot of research to do this and I didn't jump into college directly after high school.
I am fortunate enough to have been able to pay tuition for my 5 children, 3 have graduated and 2 are still in college.
While they have received small academic scholarships, we have not had any loans. All of this talk of loan forgiveness is somewhat disturbing for someone who paid the full tuition. Gratefully, the kids will not have debt to repay, but this was a sacrifice.
Parents today need to re-access the financial climate of today. College 25 years ago was much less expensive and was more profitable for graduates than it is today.
Parents also need to do away with the notion that their children can pay fully for their own education.
Parents need to take more responsibilty to limit their students debt.
I have told my kids I will not co-sign on student loans and I explained why (my age, saving for retirement and my lifelong financial strategy to minimize debt)
I am able to help them some and with the $5500 they can get without my co-signing, there are high quality public schools that are affordable. My daughter chose to only look at schools she could afford, not look at every desirable school, fall in love with it and realize it is unobtainable. My son wanted to go to a very elite and very expensive school. When I compared that debt to the debt for our home, he was able to make a good decision.
I took all the Advanced Placement classes I could in high school and ended up going into my first year of college classified as a sophmore. I worked full time during college and only took loans to cover my tuition. It is the parent's responsibility to teach their children about financial responsibility not necessarily schools. It wasn't until law school that I racked up all the debt because I could only work 20 hrs per week (ABA rules) and the tuition cost was so much higher.
I'm glad i got my BA (in the 80's) and my MBA (in the 90's). However, if I did it over again, I would start at the "tech" level, get a trade skill of some kind that would allow me to get a job to help pay for other degrees.
Most people at 18-21 don't know what they want to do with their lives. Heck, I'm 50 and I still don't know what I want to do when I grow up. I took me many years to pay off my student loans.
Anyone have any idea what college will cost in 18 years?
I'm already saving for my 1 year olds college though I still have $20,000 of my own debt to pay off. I want to give him a little bit of assistance though since I had none.
The system is tied to politicians. We all vote with our money! Now they are getting a bridge in stillwater and I paid for this, one way or another! If I would have gone to the U of M our state would be stronger.
I will now make a decision to go to the U of M for graduate school, but hope that I will pay off my current loans and may not get to graduate school for 10 more years!
I'm paying about $102,000 in student loans and my minimum payment is $799.00/mo for 10 years. By the time I'm done paying I would have paid $200K+.
I make about $70K a year right now and I cannot afford to make the monthly payment plus my mortgage and care for my family. My home mortgage is $1500/mo and I have to pay other bills (auto insurance, utilities, etc).
I have a Masters Degree from the UST but have not been able to command a six figure salary no matter how hard I look.
I'm black. Perhaps, my race is working against me. Not sure though. LOL!!!.
But, I've been sending them $250 a month to the Direct Loan Servicing. However, I will never be able to finish paying this off unless I win the powerball or start a lucrative side business together with my meager salary. Lord help us. The SLs will kill us. Thanks.
2 issues here: if we make students scale back on which colleges they have to choose from, isn't that increasing the split between the rich vs. poor?
So only those with privilege can attend ivy league?
Also, it's beginning to sound like "what do you want to be when you grow up?" is slowing becoming a question of the past. Now we ask "what can you afford to become?"
My child did it all on her own.
I went to public universities for both undergraduate and graduate school and have over $125,000 of student loan debt.
I graduated undergrad in 2006 and made the decision to continue on immediately to grad school and graduated in 2009 with a masters of architecture. the choice to go straight to grad school was difficult, but i do not see how i could go back to school now, seeing how i'm incredibly fortunate to have a job now (though I didn't for 6 months after I graduated).
My choice of college twelve years ago was affected by how much money I had (about $15000) and the lack of help from my parents.
I choose a state school and managed to graduate without taking any loans. I also got lucky on a school that gave a fixed tuition rate for continued enrollment b/c within the 4 years tuition had almost doubled.
Anyone want to make comments about credit card debt! When I went to college banks could sollicate customers for High Interest credit cards on campus!
@Matt in New Brighton That's where I got my first credit card. Bad move on my part.
I transferred from an expensive private school to a cheaper State school. I wish I'd done it the other way; wasted money at the State school before I knew what I wanted, then used money in a focused way at the private school.
My saving grace was having a sister who had worked in her school's financial aid department. She told me that I was allowed to appeal my determined parental contribution amount. (They weren't able to contribute at all, but the school considered them to be giving $2,500 that year.)
Although they had a standard form for that appeal, my school's financial aid department never publicly advertised that appealing that estimate was possible. Once I filed that, I was eligible for pell grants, but I found it frustrating that if it weren't for my sister I wouldn't have even known that's possible. I wonder if others miss out on available aid due to incomplete information from their school's financial aid department
I work in the field of financial aid at a public institution. We would never, and never have, told students they must take all their loans or we will assume they want less the next year.
I don't understand the comments Ruth just made!
I come from an upper middle class family. I went to Scripps College (one of the Claremont Colleges in CA). Tuition, room & board was about $30,000/year. Privates have more money to give and Scripps does an excellent job w/need-based grants. I received a $100,000 education and left with only $12,000 in loans.
I knew how much I would have to pay each month. But that amount of money meant nothing to me as an 18-year-old just out of my parents' house.
How could I have known how much $600 a month would or wouldn't go back then? Or how it would have affected my finances 20 years hence?
what about the people who attend college and don't get the degree and yet accrue all the debt. that is my situation and I foresee paying for the rest of my life.
We have two small kids and we are paying so much for daycare that college is beginning to look affordable.
Honestly, between daycare, retirement and college there's nothing left over to enjoy.
I chose a college without considering the reputation of the school, the network I would develop and the likelihood that college would rise in rank throughout the years.
I would not pick an investment in these ways.
I did not think of my college as an investment.
I had a great time but in retrospect I should have chosen the school that would continue to support my development through active alumni groups, professional development resources and so forth.
I got a 1 year certificate that got me an entry level job, now the company I work for has a college reimbursement program up to 5700 dollars a year, now i can work and go part time for little to no debt.
The big issue here is expecting 17 year olds to know how the rest of their lives is going to play out and exactly what they want to major in.
Going to college is expensive and worth it, once you know what you're doing. If I could go back I would complete my generals at a community college, then finish my undergraduate degree at a university with a degree i know I can use.
I worked 3 jobs throughout college and I value my education immensely but the burden of $700/month is too much. I love what I do but there needs to be a way of educating teens and young adults about finances so we take this recession seriously and it doesn't happen again in another 25 years.
At 18 years old when I fell in love with my private undergraduate college, I didn't understand why my parents were so concerned about the price tag.
Even after college when I secured a great job and was able to make those payments, it didn't occur to me how onerous this debt is. It is only now that I'm in law school and will have substantially more debt on top of my undergraduate debt that I am becoming very concerned about my financial solvency post graduate school.
Luckily, my son picked a NDSU, which is very affordable (about $15k/year for everything).
We have saved some money, but are holding onto that for the year that we have two kids in college. It works out that we have to put aside about $600 a paycheck to keep up.
We paid off our cars and refininanced our mortgage at a lower rate for 30 years to improve cash flow. Also, now our older son is an Resident Assistant, which cuts the bill by about $4k per year and he gets paid $200 every two weeks. So far it's working.
My wife's student debt has been locked at 1.75% for 27.5 years via sallie mae in 2005.
She borrowed $40,000 at age 23 to get 1 year of MBA, then joined an employer Target who paid for the second year. What a great long term investment to have this education debt at ridiculously low rates!!
I have friends with parents who paid for everything. They have no idea how lucky they are. Perfect example of how the rich get richer.
You can not absolve the average student of the responsibility for their loans.
If they don't have the wherewithal to research what they are getting into they probably shouldn't have them in the first place.
I graduated a little over a year ago and before my loans came do, I knew what I would owe and what my options were and I budgeted accordingly.
My son graduated debt free from St. John's University through merit scholarships and the ROTC program.
His wife has student debt they cannot pay because of their frequent moves and 26% military spouse unemployment, the only jobs she can find pay near minimum wage and yet she has both a bachelors and masters degree.
There is federal loan forgivness programs if you work in public service for 10 years. You have to be on a certain loan repayment plan to qualify, but that program is available for those of us who have large loan amounts and are working for a non-profit or for the government.
@Keith That's awesome Keith. And your employer deserves a lot of credit for offering this program.
I think people overrate the importance of the school for a four year degree. One degree is pretty much as useful as another. Where this makes more of a difference is in graduate school.
I went to a small private school in St. Paul. It is one of the most expensive schools in MN, and yet because of its generous grants, the loans I took out (not my parents didn't pay a dime, would have been the same if I went the U of MN.
Fabulous education and opportunities, and just as importantly, amazing students- wouldn't have changed a thing! My two year grad school education at the U of MN cost the same as my 4 year degree and I have some regret about that.
How do high school students even make an informed choice about what career they are best suited for?
I wish there was more attention paid to this in high school because I ended up paying a lot of money for a graduate degree and found my personality was not suited for that field.
My parents paid for my tuition but I paid for my living expenses for college, then both for law school (1 yr at nite while working days).
My father was a contractor and when things were tight we (older brother & I) worked the jobs he could get and weren't paid, as we got an allowance, housing food etc.
Ruth, could you discuss the new loan consolidation plan President Obama recently enacted? What are the benefits of it? The drawbacks? And can one still apply for IBR while on it?
I am a high school Senior and my parents were very clear from the start that I would be on my own as far as paying for college.
Consequently, I worked hard to get good grades because I knew the only way I would be able to attend a good/expensive school would be to get tons of scholarships.
By telling me from the beginning that the cost of college would be on me, my parents gave me a concrete reason to work hard and get good grades, and take Advanced Placement and College classes during high school to bring the cost down as far as possible.
What do you make of the increasing need to graduate from the highest-ranked or most prestigious school, particularly in expensive professional degrees? For example, if you go to a cheap law school, you get what you pay for in terms of future earning capacity.
Wow- the brainwashing by the post-secondary education complex continues: enslave yourselves to un-dischargeable debt, but you'll have a great time partying and studying useless subjects. There is a way out, though: move to another country and default beyond the reach of the US court systems.
Why are private parties allowed to influence college classrooms? I have seen more corporate influence than ever before. College has become
a new platform for companies to influence government!
Enough with depressing talk about debt and jobs. You need to do a show about kittens!
My wife is currently getting her Masters degree in nursing. We also have a 7 year old, so we started saving for her education two years ago. My wife qualified for a William Ford Unsubsidizied Federal Loan for her 2 year program. We will be paying at least the interest on the loan as we go, so we do not suffer the compounding effect of interest on interest.
its all about employment to justify the debt. The job market is so depressed that borrowing anything at all is risky
If people cannot afford $500 to $700 per month, how can they afford to purchase a car? What kind of salaries are they making? What else are they spending their money for?
Why has no one mentioned military service?
I took out a mountain of loans to earn my degree from St. Thomas, joined the army and got them paid off! I wish I would have known that I could have joined the National Guard during my junior year of high school, recieved 100% tuition assistance for a part time job, and been done with my contract by the time I graduated from college.
Ruth, do students have a better chance of qualifying for FAFSA loans if the parents are divorced?
From Ruth: They can take one parents income, whichever is the lowest. So, yes.
With a junior in high school I feel lost in that I understand the system is broke, but my wife and kids don't. I likely will have a freshman at St. Olaf in 2014. How can I get this to change??!!??
Apart from the need to make good choices about financing one's education, isn't there a hidden issue that tuition at state colleges and universities has gone up partly because parts of the public and certain politicians have blocked keeping taxes that support the schools in step with increasing costs. Twenty-five years ago certain grad school credit hours at the U of M cost about $120.
Today they are two or three times that.
Today I couldn't even consider the grad study I did relatively easily back then. Which is better: paying slightly higher taxes now or having the economy of the future stunted because today's debt-burdened new college grads can afford a fraction of what their parents did?
From Ruth: Public schools are going up faster than private schools. Private: 4 1/2%. Public: 8%. Full inflation: 3.6%
Get your undergraduate degree by attending Junior College and transferring to a 4 year State school. You'll save tons of cash and then you can go to the graduate school of your dreams.
Ruth adds: And they have made the transferring of credits easier. The U really wants well-qualified juniors and seniors. It is a smooth process now.
Ruth, Any ideas for parents who will foot a lot of the bill for a good student at a good school but have concerns how student will do once in college.
Study about men and video games is disturbing.
Our son has good scholarships but don't know if he will be able to keep up good work given his video gaming. How should we handle things if academic performance wanes? Should be withdraw support? Any suggestions for dealing with intersection of academic performance and financial support?
Ruth: That's complicated. I believe in a minimum GPA. Set standards. There are so many parents in debt for loans for students who never finished college.
@Bill Good point, I wondered the same thing. What is so bad about saving, spending less, working through college, waiting to go, taking classes at night?
There are online options. Everyone I know in IT/software jobs, most freelancers and independent contractors, small firms, etc. are self taught. They don't do what their majors involved, they just took majors that involved sufficient math and science while being largely self-taught and then taking tests to demonstrate certification in different systems and languages.
Go to university, yes, however, plan on working! All the experience one receives working while also going to university cannot be overlooked.
It won't be easy, it'll be hard. But it will be excellent experience that will help you later. When I went to the U of M, I did stop after my first two years because the cost was going up and I still had no major decided. Once decided, I went back. No money wasted this way.
To Luke: Encourage your kid to get a degree in science or engineering, and continue to graduate school. This way, all graduate schooling he/she attends will be paid completely paid for by the university (true), and the education will pay off in the long run.
@Luke I have spent my life avoiding loans of any kind. Except for my house, I've paid for everything with cash, and I paid my house off in 5 years.
So, yes, I'm cheap. Were I going to college now, I would employ the same strategy. I would consider going to college part time, and taking much longer to get a degree so that I would have very little debt. I understand there is a US college that requires all their students to graduate without any debt. Perhaps more colleges will take this attitude if fewer people are going to college because they fear the debt.
I am at college at the same time working and i know that after my college i will be starting to pay my loans.
Is there anyway for us who is still in college to re-evaluate our future college bills to be lowered or the college that we are attending can be more worth for my future college loan bills?
Military service is a definite option, but often gets no attention for political reasons.
My daughter qualified for some loan forgiveness because she was willing to work in rural MN as a physical therapist in Cambridge.
The problem isn't so much the cost of the degree as much as it is that many students spend their first 1-2 years with no major and no realistic post-college plan at all.
What I would tell every high school senior I wanted to help is that they need to look online at Monster.com and Indeed.com etc to see what is currently desired in the workforce, and how little almost everything pays.
They will find that engineering, IT, nursing, business degrees are highly rewarded, while teaching, music, psychology, philosophy, language, degrees, unfortunately, are not. I did not do this research myself, but fortunately I switched to a profitable field half-way through college.
My parents paid for my tuition but I paid for my living expenses for college, then both for law school (1 yr at nite while working days).
My father was a contractor and when things were tight we (older brother & I) worked the jobs he could get and weren't paid, as we got an allowance, housing food etc. I slept in the room next to my parents office so I was pulled in to check on his work. By the time I got out of high school I knew not only how to do bids with planning for all materials, but also how double entry book keeping systems worked and the need to track materials and save for future loses.
Re: the large amount of college debt in MN. As the supervisor of the tech lab of the largest shelter in the five state area, I became aware of the incessant phone calls from private college to our homeless clients.
These calls promised as much as an $80,000 award to the client who saw this as a chance for a home, a car and a safety net.
When examined the private colleges calling had a high default rate, low graduation rate and high costs. Many of these clients were not prepared for the rigor of college and defraulted leaving the taxpayers to pay their debt. It was predatory and abusive recruitment.
Kids and parents need to understand that colleges are businesses just like any other.
Just like the housing industry, cheap loans made college accessible to everyone and everyone bit without giving notice to interest rates or long term debt. This is one reason that tuition has ballooned. Colleges charge what they think they can get away with and loans were easy to come by.
I agree with the caller that our public schools, starting at the latest in middle school, need to teach kids about financial literacy. Whether they go to college or not!
This should be required at the State level, and maybe even be required to graduate with a diploma. Financial math; filling out tax forms; what does a car really cost; what does a college financial package really mean; etc, etc.
Many of our MN private liberal arts colleges promote themselves as encouraging "global citizenship." Many majors are focused on service professions. As a Macalester graduate and retired social worker, I'm in favor of this, but I'm wondering how schools like Macalester balance high tuition with potentially low-paying professions. I would love to hear a future show with a panel of local college presidents addressing this. Do students have to be economics majors with an eye toward an MBA in order to pay for their education?
Between scholarships, fellowships, assistantships and other work I was always in the black and never had any loans from my BA to MA and PhD studies.
If people don't like the costs, they shouldn't pay them.
Students' willingness to take loans just made the colleges raise their prices, and they will continue to do this. As for the employers responding to the glut of educated workers in some fields by offering terribly low compensation, it's the same thing: refuse to take it.
This would make a much more worthy movement than the "99%" The educated 70-80% middle class needs to quit taking ripoffs from colleges, corporations and government. Working for free, volunteering, internships etc. ARE NOT SOLUTIONS to unemployment or poorly compensated employment. I'm fed up with hearing that. Professional labor needs to fight back for itself.
I did a BA, MA and PHD in the black by working getting financial aid, awards, fellowships, assistantships... My wife did the same thing.
If students take bad loan deals, colleges exploit this. If graduates take bad job deals, employers exploit this. You have to learn to say no!
A disciplined labor pool that is thrifty and choosy will build its own advantages and force colleges and employers to act in a less predatory fashion. If you make it easy for them to rip you off, they always will.
I graduated with 25 thousand in debt last June, and now work as a full-time volunteer for a $100 a month stipend.
The thing that's saving me is the income-based-repayment plan on my federal loans; this program only makes you pay a percentage of your 'disposable income' and since the government knows I don't make any money at all, I don't have to pay a thing until I get a job that pays.
If I continue working for non-profits or other public service jobs for the next 10 years, they'll cancel all of my debt!
I'm so grateful that the government recognizes my situation: because of my liberal arts education, I learned that what I WANT to do is service-oriented work that doesn't pay. Because of income-based-repayment, I'm able to keep giving back, even with a pretty hefty debt.
I received lots of student loan counseling throughout my several degrees, and each time signed all the documents and understood fully how much debt I was getting into.
I can only blame my own rose-colored outlook.
Regardless of the fact that I was a music major and knew intellectually how little I would likely be making, I still pictured myself living a rather comfortable lifestyle, which I would almost certainly NOT be living if I had not changed career paths.
I just don't know that 18-year-olds entering college (or even those in their mid-20s entering graduate school) who have never supported fully themselves and don't have real-world financial experience can truly understand what they're getting themselves into.
This problem is the result of the mania of "getting the government out of the education business."
When government provided some support for public education at the State and Federal level, the burden is shared across society, and the benefits are also shared across the society in greater economic productivity and social stability. When individuals are solely responsible for the cost of education, they are burdened with huge debt, and the only part of society that benefits are the institutions that lend the money.
I am 23 years old, went to a technical college and got two degrees. Then went straight to Metro state to get my 4 year degree.
I hold 20,000 in student debt and am in a position to pay it all off in 18 months. I would be doing this if it was not more important to me to save up an emergency fund.
The young people in the country who want to party in college and study what interests them without any regard for how marketable they are to employers deserve to reap from the poor planning they engaged in.
I worked through college in related fields in order to prove my dedication and earn the job I currently have. Its time to grow up and plan for yourself kids...
We have a daughter that is lucky enough to be in the 7% of kids offered a merit scholarship to a regular public college (full ride).
She would like to go to Notre Dame though.
We will be paying about 8 grand a year there. She's worked so hard all these years to get to thus point.
My question is, is the prestige of the college worth the cost?
Is there a push to get kids planning a career choice when they start college.
I think this would help up making decisions about what college our kids should be looking at...
I think made it pretty clear that the prestige of the school is NOT worth it. She can work hard and go the Notre Dame for grad school : )
@ mike: it's just you and me buddy.
I really don't know why no one but us has even mentioned the military. People who are struggling with finances for education should seriously look at the National Guard.
100% TUITION ASSISTANCE!
Finish college debt free with leadership skills and discipline. Why would you not want that for your kids?
@marie I want to add something to my previous content. The difference that your daughter will find in going to a "prestigious" college is not so much, I think, in the school, but in the students she encounters. Students in such schools on average will be higher achievers. But you can get a good education at any college if you want to.
@marie I went to college in California at all levels, from junior college, to state college, to university, going from a trade degree, to PhD.
The quality of teaching decreased going from junior college through the university system, until I got to the PhD program.
Perhaps it matters in some fields where you went to a four year college, but my experience is that it doesn't matter nearly as much as the schools would want us to believe.
@KerriMPR Pile on the debt! 2 of us paying $400/mo after extending terms. We got lucky & R both employed & grad'd in 4 yrs from cheap school
@kerrimpr cost of healthcare huge part of increase in tuition. college is a people-centered institution so high benefit costs
I've heard that at the Ivy League schools, you will meet 25 rich kids to one middle class kid. That's probably a reason for my son to avoid the Ivy League.
@ Dan - it is odd that military service is consistently excluded from these frequent MPR pieces. No, it's not for everybody, but it is a viable option that can even get you medical school.
I'm not sure all college aged students have all the information and help they need to be making such big financial decisions that could continue to affect them for 10 to 25 years.
Especially if they are the first in their family to go to college and are figuring out how to afford it on their own.