DMac wrote: ↑Fri Oct 21, 2022 9:23 pm
People should think a whole lot more about student loans than they do, IMO. The whole thing never made much sense to me and even less today as the value of that coveted sheepskin sure aint what it used to be.
Grampa will sell his car to his eighteen year old grandson. The car books for $30K but he'll sell it to gson for $10K. There's not a bank on the face of the earth that would give that unemployed eighteen year old a $10K loan for that car despite the fact that they would be tens of thousands of dollars ahead if they had to repossess it. They'll give him $50K for a student loan though despite the fact that it's a much higher risk loan. Makes absolutely no sense.
While I get that tons of people got themselves in a helluva a financial jam with these loans, I don't see how they can just be forgiven. Something just doesn't feel right about that. My d-in-law, who is 50something just paid her student loans off a couple of years back. No way those loans were worth it, the social worker is now making about $70K/yr.
https://www.forbes.com/sites/brandonbus ... 97d9e7372d
I only know of one kid personally that has graduated within the past 4 years that isn’t making 6 figures. My daughter graduated in 2021 and will eclipse that number. Works in tech consulting like thousands of others. Don’t encourage kids to go to college at your own risk…. Play the odds (not discounting a trade)
1. There’s no better investment return than college – not even close. Long-standing economic analyses have shown that people who earn a bachelor’s degree – on average - make considerably more money over their lifetime than those with a high school diploma. And according to researchers Michael Greenstone and Adam Looney, an investment in a college degree delivers an inflation-adjusted annual return of more than 15%, significantly larger than the historical return on stocks (7%) and bonds, gold and real estate (all below 3%). “If college were a stock, it would be the darling of Wall Street,” according to Dr. Enrico Moretti, author of “The New Geography of Jobs” and an economist at University of California – Berkeley.
2. More college graduates contribute to less income inequality, not more. In his book, Moretti makes a clear case that the decrease in the supply of college educated workers in the U.S. since 1980 has contributed more to income inequality than any other factor. In “The Race Between Education and Technology,” Harvard economists Larry Katz and Claudia Goldin show that if the increase in the number of college graduates since 1980 had kept pace with rates prior to 1980, wage inequality in America would have fallen in the past thirty years, not increased.
3. More Americans getting college degrees not only helps them, but helps raise the wages of unskilled workers too. Moretti found that for a college graduate an increase in the number of other college graduates in the same city corresponds to a salary increase – but not a particularly large one. For a high school graduate, the increase is four times larger. For a high school dropout the effect is five times larger.
4. These convincing returns on education are obscured by more recent data about high percentages of underemployed graduates and significant regional differences in college graduate earnings. It’s also confounded by long-lasting wage stagnation in the U.S. Recent reports suggest that as many as 40% of recent college graduates are unemployed or underemployed – the vast majority of which is accounted for in the underemployed category. Regional differences make the calculation of the return on a college degree rather complicated. "The average worker with a high school education in Boston makes 44% more than a college graduate in Flint. And a high school graduate in San Jose makes thousands of dollars more than college-educated workers in Merced,” according to Moretti. Further complicating the debate is the fact that current median pay for bachelor degree holders is below 1990 levels – so wage stagnation has hit college graduates along with the rest of the workforce.
5. Which brings us to the next point exacerbating the debate. The astronomically rising costs of college has colored the value debate. During the same time that median pay for college grads has stagnated (since 1990), college tuition and fees have gone up 391%. And to put that increase in comparison to other industries that have been critiqued for rising costs, higher education tuition has outpaced healthcare costs by two-fold over the past few decades. The cost of college is increasing almost eight times faster than wages, a trend that is absolutely not sustainable.
6. Along with the rising cost of higher education has come a large amount of college loan debt – about $1.5 trillion worth. This kind of number is hard to fathom, so let’s focus on it from an individual’s perspective. For many people, student loans are necessary to get their degree. It’s now becoming increasingly important for students to think carefully about the amount they borrow for loans relative to their expected earnings after graduation. This is not an easy calculation for many students, especially those right out of high school, who may be uncertain about their college major and future career choices. Still, there is guidance available. There is ample data available on earnings (by job type and region) to help understand what that picture might look like for various jobs. A more general rule of thumb: try not to take out loans in excess of $25,000 total. Graduates who took out more than $25,000 in loans report lower financial and physical wellbeing for as long as 25 years after graduation.
7. On top of all this, there have been recent declines in confidence and public support for higher education. Of all institutions measured by Gallup, higher education has fallen more in the past few years in confidence ratings than any of the institutions measured. This decline in confidence is driven in part by political polarization – with Republican’s views of higher education souring considerably since 2015. (Note: this trend began before Trump’s election and is tied to several concerns such as free speech being limited on campus.) But getting outside the political divide, the consistent bipartisan view that’s of most concern for the long-run is that college is not relevant to work. With only 13% of Americans strongly agreeing college graduates are well prepared for work and only 11% of C-level executives saying the same – there’s a lot of work to do on the part of college and corporate leaders alike.
8. By far the top college-going motivation of Americans is “to get a good job.” Our lack of efforts to draw a tighter connection between what students learn and what prepares them most for the world of work betrays the most important driver of consumers’ interest in higher education. If we fail here, we fail on the most important part of our mission. Getting value out of college - for the vast majority of Americans - means getting a good job, not just a degree.
Didn't have a home, neither did my brother. It was a great day when we paid that thing off.