Monday, September 7, 2015

The Problem of Student Loans

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Source: acuns.org

Got some good answers to last week’s question about student debt.

My brother Kip delivered a thorough analysis, comparing the price of college to the price of practically everything else, and pointing out that what seems to be an excessive amount of debt when compared with forty years ago is not really out of line with the cost of everything else. For example: I spent my first two years of college at Northwestern University. The tuition my first year was $3,480, and I took out a student loan of $1,000. The tuition at NU is now $48,624, almost fourteen times what it was in 1974, so an equivalent loan amount would be about $14,000. Over four years, that’s $56,000. As for that fourteen times the cost over 41 years, it represents a rate of increase of six to seven percent per year. That’s roughly twice the rate of inflation, about what we’ve come to expect for college tuition.

Remember, this all started with the story of an enterprising young woman who attempted to auction off her BA in Theater to pay off the loans she was granted to get that degree. She was working as a personal assistant, doing the same thing and making as much, as she put it, as people who had dropped out midway through their freshman year. Kip pointed out that, while it’s in theater, at least she has a Bachelor’s degree. Other people who got their degrees in the liberal arts have managed to get jobs that pay well enough that they can stay current on their student loan debt and manage to live a pretty comfortable life. Maybe without the cable TV, new car, apartment in a preferred location, or other trappings that come with being young, single, and a college graduate, but not living in a box in the alley and Dumpster-diving for their meals, either.

I saw an article on the “Hello Giggles” site called “20 things I learned in my 20’s.” One of those twenty things was “Your major in college probably won’t matter in your future career”:

[I]f your college major has nothing to do with your job now, that doesn’t mean it was a waste. The fact that you went to (most) all of those classes, wrote the papers, and finished the degree is what’s important. You’d be shocked at how things you learned in a completely unrelated field will help you out later.

My degree is in Production and Operations Management. Except for a couple of miserable years “using my major” as a production supervisor, I’ve worked in IT. (Management Information Systems was a new field, and Loyola didn’t have a major in it yet; it was taught by the Production Management faculty, who also taught Statistics.) It helped having the management background when I was leading training classes in Inventory Management, because I understood the Economic Order Quantity and most of the theory behind why the software did what it did, so the degree wasn’t a waste. And I never had to do a time study or design sampling methods for quality control. (My favorite exercise from those classes was the one where I had to design a slaughterhouse for turkeys.) My brothers have all done well with their majors in English, History, and Criminal Justice, and their jobs have nothing to do with those fields.

What I’m saying is, the only impediment to good employment she has is herself. I’m sure she’s living in Los Angeles and working as a personal assistant because of the flexible schedule and proximity to auditions, but she owes $40,000, and has to repay it. Regardless of the election-year bloviation about “doing something to relieve college graduates of student loan debt,” the fact is, she willingly signed the promissory notes saying she would repay the money she borrowed, and now she has to live up to her commitment.

I wonder if someone actually sits the kids down before they take out the loans and tells them, “Look, you’re only borrowing the money. It’s not a gift from the government or a scholarship. It’s debt, and you’re going to have to pay it back, with interest unless you pay it all at once.” Maybe we need a law like there is for mortgages, telling students exactly what they can expect to pay and how much of it is interest.

Now that I think of it, that wouldn’t do much good, would it? Going to college is an emotional thing with high school seniors. They’ve been indoctrinated to believe told since they started school as kindergarteners that when they finish grade school, junior high, and high school, they’ll be going off to college. By everyone: parents, teachers, counselors, and especially their peers. Getting the kid into a good college is on some parents’ minds even when they’re picking out day care and preschool. Kids just can’t come out and say “I’m skipping college,” even if they would be better off choosing an alternate path.

I’ll break here to hear your reactions. Do you think that telling someone they have to live up to their financial obligations, onerous as they may appear, is cruel and unusual punishment? If you have a college degree, are you or have you ever had a job that matched the degree you received?




from The Sound of One Hand Typing

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