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Old 11-15-2011, 12:51 PM   #101
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That fluffy degree is required to be considered for most real jobs nowadays.
It may be required, but it is no longer sufficient. Having a fluffy degree used to distinquish you as someone who was reasonably intelligent and self disciplined enough to get through a four year program. Employers would take you on and teach you what you needed to know.

Now the world is so awash in such people that the generic degree has lost much of its original value. Now employers actually want you to know something usefull too. That's where our recent college graduates are running in to trouble. The game has changed and nobody told them they should be seeking skills, not simply a degree.
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Old 11-15-2011, 12:53 PM   #102
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Of course, twenty years ago the states/feds were picking up a much larger share of college expenses. So most of the people who went to a state college in the past already got their "handout".

Now they spend time complaining about "kids these days".

Excellent point. It is easy to forget that much tuition was subsidized.
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Old 11-15-2011, 03:21 PM   #103
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I have a few suggestions that would help some--

1. Treat student loan debt the same as any other obligation in bankruptcy. It defies logic to make student loan debt the one obligation that cannot be discharged in bankruptcy. The potential for loss is the only thing that keeps lenders rational in their lending. Stop trying to shield them from the results of bad lending practices.

2. Stop reducing the government's share of college costs. In Minnesota 20 years ago, I paid only about a third of the total cost of college as tuition. A student today pays closer to two thirds. That is a big piece of the challenge for today's students. We can have low taxes, or we can have top quality public universities that are financially accessible by the majority of people. I don't think we can have both.

3. Start having a conversation about what our public universities should be doing, and who should be funding those activities. At the large public research universities, a lot of the increases in costs have very little to do with undergraduate education. We're funding an awful lot of basic R&D for businesses through our universities. It's reaching the point where our undergraduates are subsidizing that research, rather than the other way around.

4. We need a re-vitalization of post-secondary education outside of the standard 4-year college degree. There is no good reason to funnel everyone who wants to work in a white collar capacity through a liberal arts education. We need to get businesses to define the skillsets that they are looking for, and start creating educational institutions that teach those skillsets.

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so...what do you guys suggest? my point is exactly the same, college age kids can't make wise (or educated) personal financial decisions. so...what to do? cut the profs' salary? cut the profs' benefits? pay for college for everyone? limit borrowing? subsidize only the "profitable" degrees? privatize student loans. I guarantee any suggestion you can make, people will come unglued. until then, graduates continue to carry the burden.

it's hard for me to empathize with the "younger generations" b/c I was there 6.5 years ago. I do consider myself VERY fortunate, and am grateful to be where I am.
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Old 11-15-2011, 03:23 PM   #104
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Go here:

CPI Inflation Calculator

And enter your student loan total and the year you graduated, then see how much it would be in today's dollars.

For me, I had $6,600 in loans in 1975. That corresponds to $27,834 today.
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Old 11-15-2011, 03:49 PM   #105
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Go here:

CPI Inflation Calculator

And enter your student loan total and the year you graduated, then see how much it would be in today's dollars.

For me, I had $6,600 in loans in 1975. That corresponds to $27,834 today.
Thanks T-AL. Great tool!

DW had exactly $10,000 in loans when she graduated in 1969. She borrowed $2.5k/yr for 4 years. (She also worked 20+ hours per week in the cafeteria and had some academic and needs based schlorships.) That translates to $61,822.62 in 2011 dollars . We paid it off before buying our first home or starting a family.

It was a pretty austere beginning to married life. We lived in a one bedroom walk-up on the NW side of Chicago furnished completely with junk people gave us and we had one car. DW took the bus to her Chicago Public Schools teaching job and I got to take the car to my night shift factory job. Despite being a "factory job," with overtime I was making significantly more than DW was making teaching school so we lived on my income and used hers to pay off the loan.

Friends were surprised at our low tier life style considering we both had decent jobs, no kids, etc. But we wanted to get the loan paid off and that's what we did.

DW went on to a Masters + 45 additional graduate hours but her employers paid for that. We'd had enough of paying for school ourselves!
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Old 11-15-2011, 04:18 PM   #106
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Did DW go to a very expensive private school? My state school's tuition in 1968 was in the neighborhood of $400/year.

Working through school: 1968 vs. Now | On Campus

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Thanks T-AL. Great tool!

DW had exactly $10,000 in loans when she graduated in 1969. She borrowed $2.5k/yr for 4 years. (She also worked 20+ hours per week in the cafeteria and had some academic and needs based schlorships.) That translates to $61,822.62 in 2011 dollars . We paid it off before buying our first home or starting a family.

It was a pretty austere beginning to married life. We lived in a one bedroom walk-up on the NW side of Chicago furnished completely with junk people gave us and we had one car. DW took the bus to her Chicago Public Schools teaching job and I got to take the car to my night shift factory job. Despite being a "factory job," with overtime I was making significantly more than DW was making teaching school so we lived on my income and used hers to pay off the loan.

Friends were surprised at our low tier life style considering we both had decent jobs, no kids, etc. But we wanted to get the loan paid off and that's what we did.

DW went on to a Masters + 45 additional graduate hours but her employers paid for that. We'd had enough of paying for school ourselves!
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Old 11-15-2011, 04:22 PM   #107
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Do you mind me asking what school you went to?

I think $6,600 would be a pretty high amount of loans for 1975, unless you didn't work at all or went to an expensive private school.

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Originally Posted by TromboneAl View Post
Go here:

CPI Inflation Calculator

And enter your student loan total and the year you graduated, then see how much it would be in today's dollars.

For me, I had $6,600 in loans in 1975. That corresponds to $27,834 today.
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Old 11-15-2011, 04:41 PM   #108
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Quote:
Originally Posted by TromboneAl
Go here:

CPI Inflation Calculator

And enter your student loan total and the year you graduated, then see how much it would be in today's dollars.

For me, I had $6,600 in loans in 1975. That corresponds to $27,834 today.
Although, I do rail on some students willingness to take on too much debt without knowing the consequences, I believe the calculator isnt a true reading in relation to todays debt. Tuition costs the past several decades, I believe has outpaced CPI , kind of like health insurance has.
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Old 11-15-2011, 05:04 PM   #109
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Although, I do rail on some students willingness to take on too much debt without knowing the consequences, I believe the calculator isnt a true reading in relation to todays debt. Tuition costs the past several decades, I believe has outpaced CPI , kind of like health insurance has.
The calculator is doing its job. It's converting a dollar sum from 1974 to 2011 dollars using the CPI. It doesn't matter what the source of the debt is. It could be college costs, a new car, a house, whatever.

The comparison between the inflation rate of college tuition and the general inflation rate is another matter.
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Old 11-15-2011, 05:10 PM   #110
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$6k in loans was not out of line. I graduated with $8k, so I am right in between T-Al and Ms Y, mine included grad school, and IIRC around $6K was for undergrad. Interest was subsidized through graduation +3 months. A private school back then cost around $5K per year tuition + room & board + fees (or was that just tuition?). A debt of $6K means 30% was borrowed. Not out of range at all. I went to an out of state grad school (go horns) which was less expensive than my in state tuition (Illinois).

The advantage, although we didn't know it at the time, was that the following decade of high single and low double digit inflation made those loans easier to repay.

edit: a Time news item from 1975 says avg public school cost was $2679, avg private was $4391. http://www.time.com/time/magazine/ar...917782,00.html
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Old 11-15-2011, 05:16 PM   #111
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Originally Posted by youbet

The calculator is doing its job. It's converting a dollar sum from 1974 to 2011 dollars using the CPI. It doesn't matter what the source of the debt is. It could be college costs, a new car, a house, whatever.

The comparison between the inflation rate of college and the general inflation rate is another matter.
Your second sentence, I guess is what I was thinking about. My $10,000 of debt is equal to $20,000 in todays dollars according to the calculator. I guess I was thinking more in the terms of it would be a lot more debt in todays dollars if I borrowed the same percentage of money today to get through school , than I did back 25 years ago.
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Old 11-15-2011, 05:19 PM   #112
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Originally Posted by Hamlet
Do you mind me asking what school you went to?

I think $6,600 would be a pretty high amount of loans for 1975, unless you didn't work at all or went to an expensive private school.
It was Cornell, and I worked in the cafeteria.
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Old 11-15-2011, 05:22 PM   #113
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$6k in loans was not out of line. I graduated with $8k, so I am right in between T-Al and Ms Y, mine included grad school, and IIRC around $6K was for undergrad. Interest was subsidized through graduation +3 months. A private school back then cost around $5K per year tuition + room & board + fees (or was that just tuition?). A debt of $6K means 30% was borrowed. Not out of range at all. I went to an out of state grad school (go horns) which was less expensive than my in state tuition (Illinois).

The advantage, although we didn't know it at the time, was that the following decade of high single and low double digit inflation made those loans easier to repay.

edit: a Time news item from 1975 says avg public school cost was $2679, avg private was $4391. http://www.time.com/time/magazine/ar...917782,00.html
Thats an excellent point. I benefited greatly from the interest rate spikes that allowed me to overborrow, put the rest in CD's and draw double digit interest rates to help pay the cost of schooling. Where I went anyways, there was a lag between the high inflation rates, and the amount pushed through in tuition costs. Kind of the reverse that is happenning now.
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Old 11-15-2011, 05:24 PM   #114
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$6k in loans was not out of line. I graduated with $8k, so I am right in between T-Al and Ms Y
Ms Y's loans were so high because she entered school without a penny of personal savings and received no help whatsoever from her parents. Her wages from part time work in highschool went to her family (who very much needed that help) and her parents in no way could provide any school assistance. The loans and schlorships paid for school (tuition, room, board, books, fees, the whole catastrophe). Her part time work at college paid her personal expenses including travel to and from school, etc. She lived at home and worked summers but much of that went to help her parents and siblings.
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The advantage, although we didn't know it at the time, was that the following decade of high single and low double digit inflation made those loans easier to repay.
Very true. The 12% - 14% inflation was scary but if you owed a lot of money it did help out.
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Old 11-15-2011, 06:45 PM   #115
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Cornell is a pretty expensive public school. The current tuition is about $25k/year for New York residents. If you live in the dorms, the total is about $32.5k/year.

If a student today didn't get serious help from parents, I wouldn't be surprised to see them rack up $75k+ loans, even working 20hrs/week during the year and full-time in the summer.


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It was Cornell, and I worked in the cafeteria.
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Old 11-15-2011, 06:47 PM   #116
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Yes, but comparing private school costs from the past to current public school costs is not really apples to apples.


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$6k in loans was not out of line. I graduated with $8k, so I am right in between T-Al and Ms Y, mine included grad school, and IIRC around $6K was for undergrad. Interest was subsidized through graduation +3 months. A private school back then cost around $5K per year tuition + room & board + fees (or was that just tuition?). A debt of $6K means 30% was borrowed. Not out of range at all. I went to an out of state grad school (go horns) which was less expensive than my in state tuition (Illinois).

The advantage, although we didn't know it at the time, was that the following decade of high single and low double digit inflation made those loans easier to repay.

edit: a Time news item from 1975 says avg public school cost was $2679, avg private was $4391. Education: College Costs - TIME
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Old 11-15-2011, 06:55 PM   #117
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Cornell is a pretty expensive public school. The current tuition is about $25k/year for New York residents. If you live in the dorms, the total is about $32.5k/year.

If a student today didn't get serious help from parents, I wouldn't be surprised to see them rack up $75k+ loans, even working 20hrs/week during the year and full-time in the summer.
This tuition compares favorably to other good private universities.

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Yes, but comparing private school costs from the past to current public school costs is not really apples to apples.
Agree, which is why I wasn't comparing them. I was looking at average private and public costs back then to see if a $6k-$10K debt was unreasonable, and my conclusion is not so. It could be an average debt back then.
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Old 11-16-2011, 08:31 AM   #118
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Except that most public school costs were tiny back then. If you went to most public schools 40 years ago, there was no need to take on any debt at all. You could pay your tuition with part time jobs.

The examples people are giving are for private or very, very expensive public schools. They aren't representative of an average cost.

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This tuition compares favorably to other good private universities.

Agree, which is why I wasn't comparing them. I was looking at average private and public costs back then to see if a $6k-$10K debt was unreasonable, and my conclusion is not so. It could be an average debt back then.
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Old 11-16-2011, 09:02 AM   #119
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I have a few suggestions that would help some--

1. Treat student loan debt the same as any other obligation in bankruptcy. It defies logic to make student loan debt the one obligation that cannot be discharged in bankruptcy. The potential for loss is the only thing that keeps lenders rational in their lending. Stop trying to shield them from the results of bad lending practices.
In other words, hit the reset button whenever you like.

sure, a few people may truly need it, but does this make them more financially wise in the future? political views aside...
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Old 11-16-2011, 09:17 AM   #120
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Except that most public school costs were tiny back then. If you went to most public schools 40 years ago, there was no need to take on any debt at all. You could pay your tuition with part time jobs.

The examples people are giving are for private or very, very expensive public schools. They aren't representative of an average cost.
Tiny? Absolutely not. Did you read the link?
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the College Entrance Examination Board estimates that the average total costs at a four-year public college will be $2,679 this year, a 12% jump from 1974. The average at a private college: $4,391, a 9% increase.
Lets see. Average public school $2679. Didn't include spending money, books, transportation. Just $ to the University.

Not sure what T-Al or Mrs Y earned but I made $2.10 per hour in the kitchen and $2.50 per hour as a TA (20 hours x week). During the summer I made the princely sum of $3.50 per hour driving a fork lift and more when I got overtime, and one summer I actually made a ginormous $6 per hour working in a foundry.

Working 20 hours per week, 50 weeks, $2.50 per hour grosses $2.5K before tax. Not enough to pay the average public school bill. And if you wanted luxury items, like a new pair of jeans, some shoes, or a bit of food to supplement the meal plan, money was a showstopper. So still need to borrow or get someone to help to pay the other expenses.

Ms Y and T-Al's experience resonate closely with my own, both work and debt.
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