A thoughtful article in the New York Times from late last month bears reading, especially by parents and college-bound children--hopefully they read it together and talk it over.
It attempts to describe the Rube-Goldberg student loan system, and how badly it seems to serve everyone. And as always, it eventually leaves the taxpayer on the hook, via Sallie Mae.
It's a long article, but just a couple of observations are in order.
To be eighteen and headed off to university is to, by definition, be an optimist. So many don't even make it over the threshold to the local state u, much less to anything prestigious. That acceptance letter is a pure shot of adrenalin, followed by a chaser of 'the world is your oyster, kid'. And, why not? It took a lot of effort to get that letter to arrive, and that piece of paper is a tangible sign of success.
To be eighteen and headed off to university is to, by definition, be naive. It is that naivete that makes a young person teachable, able to absorb new ideas from new people.
It's a strange age: They have reached legal majority, but by no means can they be considered mature adults. They live in never-never land, having to make adult decisions, but often not able to understand the consequences of the same. They still need some guidance, and someone to watch their backs, even if they don't think it necessary. (Can you surmise OS is the parent of an eighteen-year-old?)
One thing that a kid just turned eighteen cannot be expected to understand is bankruptcy law. There are some real subtleties inherent, and one of them is--You can't bankrupt out of student loan debt under the US federal bankruptcy code. No matter what befalls you in the future; fire, flood, health, illness, wealth or poverty, you are on the hook to repay it all. It's tough to get an eighteen-year-old to imagine life at thirty, saddled with 80k of debt. He can't imagine life at thirty, period. Twelve years ago, he was entering the first grade.
The Times article traces the travails of one student, overwhelmed by debt, how she got there, and how long it will take to climb out of it. As so often happens, the most relevant bit of the story is buried toward the end.
She recently received a raise and now makes $22 an hour working for a photographer. It’s the highest salary she’s earned since graduating with an interdisciplinary degree in religious and women’s studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren’t being deferred, which would not leave a lot left over.
100k in debt, for a B.A. 'interdisciplinary degree in religious and women’s studies.'
What!?!?!?!?!?!!!
Of course she's working at a job that a bright high-school graduate could do, because there is no job market for graduates in religious and women's studies, unless it's perhaps followed by a M.Div from a prestigious seminary or div school, like Duke or Yale.(And that's likely another load of debt.) Even at that, the jobs awaiting this person are not highly paid. Church staff people do important work, but their activities do not create economic return, do not create wealth that can flow back to them in the form of increased compensation. The glass ceiling is very low under every steeple.
This is not to add insult to injury on the young lady, but to offer her story as a cautionary tale. Mom and Dad, and Junior especially--think these things through, as unemotionally as possible. You are making huge decisions, choose as wisely as you can.
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