[ntkachov]

So I was one of these kids for the better part of college. The issue is that you dont care because you don't have options. You're already in college and stressing out about oweing $100k isn't productive. You look at your loans once you're done with school and need to pay them back.

[epalmer]

We are getting ready to send our youngest off to college next fall. The three of us (wife, myself, kid) talk about it, work the math and calculate repayment amounts and length in years together. It is the only way to do this. My daughter wants to understand the finances and we want her to. She also will have to agree in advance when it is time for the final selection of school and loans that the balance is doable. Much coaching along the way. I have an Engineering and Chemistry Degree and wife is an accountant.

The good news is she will be majoring in Mechanical Engineering with a concentration in CS and EE. Still we want student loan amounts to be reasonable.

Met a young person recently that got a sociology degree and had >$100K US in loans. She is making like $30,000. This is totally absurd.

[skewart]

I know a lot of people who are in a similar situation to the Sociology major you described (well, not quite that bad a ratio, but not far off). They all have opted for the income-based repayment plan and are basically resigned to the fact that they'll be paying several hundred dollars a month towards the loans for basically the rest of their lives. It feels kind of like an education tax that gets used really inefficiently. Actually, since most people I know in this situation are getting a little help from their parents it's effectively an inheritance tax.

[epalmer]

Parents are not as involved in the decisions as much as they should be and they have bought into the notion that private liberal art universities are much better than public. But that is not uniformly true and outcome data shows earning power is not that much greater for many liberal art majors from private schools. (full disclosure: I work for a private liberal arts university)

[jonesb6]

I'm a perfect example of the problem you just described, parents basically let me handle all applications, pick my school, my major, and I ended up choosing an out of state school that was vastly beyond my means (~45k/yr). Parents who payed tuition ran out of money (after mortgaging the house to get my older brother through, and covering ~2 years of my education where I secretly took fewer credits to lessen the burden on my family).

So I dropped out and am now working for a recently funded start-up, making a decent amount of money with promises of more if I can work at a level that can elevate the company itself. I intend to finish a different degree over the next ~3 years (CS -> Philosophy). Needless to say none of this would've been possible had I not spent thousands of hours learning software development in my free time, such that the degree I ultimately get, or if I even have one at all, is much less important.

However I don't blame my parents at all for my poor decisions. I think today's youth need to be taught financial responsibility.. some how. Maybe mandatory minimum-wage work during high school? I don't know. This is all so ridiculous you would think it could only happen in theory. Financial institutions finding a way to take hundreds of thousands of dollars from the adult population using their children as a proxy and the parents being grateful to do it..

[malnourish]

The problem with IBR plans is they are generally only for federal loans. In my experience, private loans offer no alternative payment plans up front.

[jonesb6]

Worst still a large number of companies are springing up offering refinancing on private loads that offer absurd terms and drag debtors further into the hole. These refi companies are to debtors what for-profit schools are to blue-collard workers.

[washadjeffmad]

Housing is killer. On-campus was over $600/mo, higher than median apartment rent, and they shared with 3 other students. There's no reason student housing should be half or more the expense of attendance over the same period.

[Someone1234]

It always shocked me that for the amount American students pay for on-campus housing that they don't even get their own room.

Here while rooms might be only slightly bigger than a jail cell (room for one single bed, a desk, small closet and a bathroom w/shower); they also cost less and students get their privacy. They still share a kitchen and other spaces.

It is like student housing in the US is still set up like it is really cheap but actually costs insane amounts of money.

[delazeur]

I paid somewhere between $1,200 and $1,400 per month to share 180 square feet with one other person, and I was lucky not to be sharing with two other people. I could never prove it, but I strongly suspect either the university or their contractors were making a handsome profit off of on-campus housing.

[gherkin0]

> Housing is killer. On-campus was over $600/mo, higher than median apartment rent, and they shared with 3 other students.

That's insane. The whole point of on-campus housing is to provide very cheap but spartan accommodations. If nearby apartments are cheaper, there's no point to it.

[nilkn]

This has long ceased to be true at many American universities. The dorms command a premium because they're on-campus (short walk to class and dining halls, many of which are right in the dorms) and they foster an integrated social environment that you can't fully appreciate when living off-campus typically.

Dorms are also becoming increasingly luxurious in some cases. In my old college suite, we had maids come by every morning to take out our trash and recycling and every weekend they'd thoroughly clean the entire bathroom, shower, sinks, and toilet. Just to be clear, these were private bathrooms in individual suites that they'd clean, not just the shared communal bathrooms.

[SilasX]

I think there are two phenomena here:

1) Opportunity cost: The land on campus, due to being near campus stuff, has appreciated a lot in value, so it doesn't make sense to use as dorms (instead of whatever else) unless you can charge out the nose for it.

2) Access to loans "for education" is easy to get, and this counts as part of the education package, so students figure to pay for not having to park or to walk as far.

[CaptSpify]

Honest question: Why would you pay that, instead of renting an apartment off-campus?

[washadjeffmad]

On-Campus Housing is advertised heavily by universities as contributing to greater participation and "improved likelihood of success in college and beyond".

One practical benefit is you can roll out of bed 20 minutes before class, skipping the morning commute and hour of looking for parking (oversold lots), then walk home after class. You live at school. I've never done this.

And everyone who lives around you is a student and maybe not a couple with a wailing newborn in the middle of a divorce arguing every night at 3am, a group of problem teens with working parents that hang out outside your door smoking and being obnoxious (both the kids and parents), or someone who locks their howling dogs in the bathroom for 10+ hours a day during their shifts.

If you couldn't spend your student loan on housing, you can bet rent would be lower.

[kamaal]

>>One practical benefit is you can roll out of bed 20 minutes before class, skipping the morning commute and...

I never understood this. If a person doesn't have the discipline to wake up early(unless he/she has been studying all night), further incentivizing their laziness is barely the solution to their problems.

And let's be frank, staying living at school doesn't translate to more time for studies. It generally means you waste more time with friends.

[malnourish]

It is absurd. Some people say you shouldn't pursue what interests you for that amount of money, but I think that's the wrong way of looking at things. Our world is more valuable for the sociologists and other non STEM people. We also really only have this one shot to pursue what we love.

[Someone1234]

That's fair.

But for the individual with a massive student loan and no way to repay it is a problem even if they better the world overall.

Part of the problem is that for some majors supply massively exceeds demand. Stem definitely isn't immune from this issue.

Unfortunately due to politics nobody (schools or government) is up-front about where jobs exist and shortages occur. A lot of the time when you hear about a "shortage" it is actually just whining that wages are too high.

[dragonwriter]

> Unfortunately due to politics nobody (schools or government) is up-front about where jobs exist and shortages occur. A lot of the time when you hear about a "shortage" it is actually just whining that wages are too high.

There's no absolute fixed quantity of any good or service (including labor in particular job roles) that is "correct"; "shortage" and "market clearing cost higher than I prefer" are actually equivalent concepts, not things that people misleading conflate.

[dagw]

The other problem is one of lag. It takes 4-6 years between choosing a school/degree and applying for your first job. There may very well be a genuine shortage in your chosen field when you start college, but that is no guarantee that there will still be one when you start applying for jobs.

[kamaal]

There is no ideal world where a hair cut would cost the same as heart surgery. Then we could talk about the person's passion to become a barber.

You wanting to do what you want has nothing to do with how much you might get paid for doing it.

[epalmer]

Yes bout not with an unblanced amount of debt. My oldest got a sociology degree and is working part timne and living at home. All with our good graces. She wants to be a librarian and has to pretty much get a MLS. She will incur some student debt along the way. But it won't be a huge amount. She will mostly pay for graduate school out of her salary.

She has zero undergraduate debt. But that is because I took a pay cut and went to work for the university she went to. Tuition was free. I'm very glad I made that decision. As mentioned about my youngest is getting an Engr degree so the free tuition does not count because where I work does not have a Engr program.

[ensignavenger]

If these are US federal loans, there is an option for various Income Driven Repayment plans, with forgiveness of the balance after so many years.

[jonesb6]

What if she decides to change her degree path? It may lower her ROI and skew all the cost projections made when choosing a school etc.

[epalmer]

That is a big risk. If she does she is likely to stay with STEM. Computer Science or Math + Statistics. That lowers the risks some. We have and will continue to have conversations about them risks.

[jonesb6]

You sound like a great parent who really cares about their daughter, so I feel like I should leave a final point. In my anecdotal experience as a recent CS undergrad, STEM, and particularly engineering, CS, and Mathematics, paths seem to generate the most stress on students because their environments tend to skew social norms (gender imbalances, workloads, social stereotypes).

I believe a full perspective of any degree should include its potential impact on a students social life, because lets face it it's a contributing factor to why students want to go to college and IMO we derive a lot of our happiness (especially at that age) by our social interactions.

That said with love and support like the kind you seem to be providing, she should be able to succeed at anything.

[epalmer]

Te college experience and social life aspect is one of her driving forces for deciding. So far she is getting in the schools she has applied for (1 left to hear from and one that is two step process and step 1 is done). We will be making college visits to 3 of the fourt schools again to get the feel.

She is driven by the desire to change society for the better and thinks she can do this via a mix of engineering and political policy influence. She has experience lobbying at the state and federal level already successfully. S this is what drives her.

All of this is complicated by cost factors and home much grant and loans are offered. The final weeks in April will be stressful as the financial aid award letters come in. Exciting but nervous times.

[jonlucc]

They also don't provide information in real terms. Sure, I owe a ton of money, but I have no idea what that means to me. How much per month for how many years? They're finally starting to give this information to students, but when I was in, it was all very opaque.

[jaynos]

Even once they are in repayment, many people don't understand loans. One of my friends posted on facebook his frustration with how his principal never seemed to be going down. I was able to explain to him how amortized loans work (pay the accrued interest and then any remainder goes towards principal) and he was much less frustrated after that (I think he even started paying extra to pay down the principal).

Edit: If you search online, there is a lot of info about subsidized vs unsubsidized, income based repayments vs standard repayment, etc, but not of the (small) sample of sites I looked at explained repayment in simple terms of what does my monthly payment go towards (principal vs interest).

[ashark]

> One of my friends posted on facebook his frustration with how his principal never seemed to be going down.

That's one of those really basic things that I'd bet well over half the adult population of the US couldn't explain, if asked. Like how marginal tax rates work.

[giardini]

David Letterman: "The lottery is the tax you pay for not paying attention in math class."

Once one has taken algebra (and paid attention) to the point of studying compound interest, one should be sufficiently forewarned about loans.

As for your remark about half the adult population: I truly fear you may be correct (it may even be greater - half the population has an IQ of only 100, after all. What IQ is required to understand compound interest? And then there's the training - making sure it is in place). If so, then perhaps stronger vetting systems for obtaining loans should be put in place.

All in all, good arguments for increasing the numeracy of the population at large and, barring that, putting mechanisms in place that prevent them from unwitting personal fiscal disasters. Unfortunately, to do so in the USA would be viewed as a form of fiscal, and therefore, political discrimination, so the disasters will continue!

Which leaves only increasing numeracy, Which is well-nigh impossible. Which leaves the task to our not-yet-here AI personal assistants to warn us not to make bad loans. Indeed the best argument for AI may be that we shall need AI to save us from ourselves, in ways both big and small.

[notlefthanded]

Why is increasing numeracy "well-nigh impossible"?

[kamaal]

>>You're already in college and stressing out about oweing $100k isn't productive.

This is one of the reason why as an Indian, I decided not to do my MS in the US. Though I could have. The reason is simple, you will rake up a huge loan back home in India.

Most of friends who came to US for their MS had only horror stories to tell. A loan amount too huge to pay off working a job in India, perennial stress of paying off that loan(often taken against a house/plot in India) and doing small part time jobs for food and sustenance in restaurants. Add to that a good college is beyond affordable, and a degree in By-The-Freeway college is next to useless(but still costs a lot in Indian money). After all that you will be stuck fighting a Visa system, with a multi year green card struggle.

And even after all this, while you are in your late 30's(or early 40's), you have to buy a home(and pay those loans for the remainder of your enjoyable life), worry about retirement, getting kids settled and save for health care expenses.

[maxxxxx]

I work with a lot of young guys who are stressing about their loans. You make a good point.

What are they supposed to do? These days you absolutely need a college degree to have a chance in the workplace so you have to take the loans if you like it or not. No options besides having a rich dad.

[brianlweiner]

They should go to their state's public university, where the tuition is much lower. US average is still under $10k. http://trends.collegeboard.org/college-pricing/figures-table...

If that number is still too high they should earn credits at a community college and transfer into the state university after their Sophomore year.

I get incredibly frustrated when you have people complaining after they chose to forgo their own state's perfectly decent university to go to another state's. You get practically the same education for 5x the price.

[secstate]

First off, it totally depends on the state. Small rural states, like in most things, get completely screwed on this metric, as Wisconsin and UMaine do not even begin to offer the same education, depending on your desired career path. That and the small states are also on the whole the more expensive schools, too.

I'm sure there are arguments to be made about just getting out of small states, but rarely are such simple-minded solutions useful for issues like this.

Personally, I think loans are a red herring. I think it's an arms-race between academic institutions and increasing tuition [0]. Adjusted for inflation, even the so-called affordable state schools have increased 14% over the past five years. Private schools actually went up less, when adjusted for inflation, but I'll let you RTFA.

The only glimmer of hope is that state schools have almost kept up with inflation for the past three years, and if the trend continues tuition might STABILZE for the next few years at roughly 25% more than it cost to earn a degree 30 years ago. Seriously, what the fuck?! How do you account for that?

[0] http://trends.collegeboard.org/college-pricing/figures-table...

[jazzyk]

True, but you excluded housing/food costs. On-campus housing is typically required for the first 2 years. Even off-campus, you have to sleep somewhere and eat.

So add another $10K to your number.

[ams6110]

You don't need rich parents. You need parents who plan ahead. My parents put two kids through college with savings and zero student loans or other financial aid, and they had quite modest incomes.

[sehutson]

I know that may not feel rich to you, but it definitely makes you the exception to the rule. Most students receive some amount of financial aid, especially in 2016 after decades of massive inflation in tuition costs.

[maxxxxx]

That's great but it's not really something the student has much influence on