Student Debt and the class of 2010

[Disappointed]

My nephew just graduated from a medical school, his loan balance is $175,000. For the next three years he will be earning $36,000@. He is 35 years old. I am wondering what his future is like financially.

[obgyn65]

His financial future is likely to be fine in the long run.

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Originally Posted by Disappointed My nephew just graduated from a medical school, his loan balance is $175,000. For the next three years he will be earning $36,000@. He is 35 years old. I am wondering what his future is like financially.

[MichaelB]

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Originally Posted by engprodigy Honestly... I'm so tired of the level of whining and lack of responsibility of the current generation. I'm 29 so I feel like I have a pretty good perspective to be able to say way too many people under 25 are useless whiny future dead weights of society. If you pick a useless major and live off loans for 4 years while you "experience college life" well accept the consequences. $25k avg debt isn't anything if the median starting income is $53k... If idiots stop paying $50k for art degrees they won't cost $50k...

Its useless to whine about whiners. Art degrees are more valuable, and useful, than you realize.

[engprodigy]

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Originally Posted by MichaelB Its useless to whine about whiners. Art degrees are more valuable, and useful, than you realize.

Apparently not...

Every other day yahoo or cnn money is running a heart breaking story about some art/psychology/sociology/guitar major that can't find a job and can't pay back their loans and <insert violin music>....

[MichaelB]

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Originally Posted by engprodigy Apparently not... Every other day yahoo or cnn money is running a heart breaking story about some art/psychology/sociology/guitar major that can't find a job and can't pay back their loans and <insert violin music>....

Well, if Yahoo or CNN money says so, it must be right. I guess that is why you have such a good perspective.

[youbet]

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Originally Posted by Tractor guy Highly motivated, high initiative, smart people will find a way to get a degree.

While I certainly agree that in recuriting for many vocations, considerable effort can be saved by considering only candidates with the exact degree called for by the Staffing Dept guru's, I don't think Bill Gates or Steve Jobs would have agreed that only those people should be considered..........

But, in the ridgid confines of MegaCorp and gov't job descriptions, no doubt a non-degreed, or non-traditionally degreed, candidate will seldom be chosen.

[Independent]

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Originally Posted by Tractor guy I was an engineering manager at a megacorp before I retired last year. I hired several engineers over the years and also had many conversations with hiring managers for other positions. The consensus was that a college degree was a requirement to be considered for any entry level manager position. The general feeling was that the more highly qualified people (with high initative, work ethic, and ability to learn new skills) would find a way to get a degree. We all knew that there were qualified people without degrees. However, the feeling was that we would find more qualified people in a pool of degreed candidates than in the same number of people who didn't have degrees. A lot of this was self selection. Highly motivated, high initiative, smart people will find a way to get a degree. Lorne

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Originally Posted by FUEGO In addition, so many hiring departments are inundated with resumes such that even if a BS or BA isn't required, they may filter out non college grads when they start reviewing resumes to have a more manageable number to review.

Yep, there are two perspectives on this question.

The first is whether it makes sense from an individual perspective - given that college degrees are often taxpayer-subsidized, and many employers use college degrees as a simple filter, but offsetting that with the probability of starting college but not graduating, or finishing and getting the assistant restaurant manager job you could have had with four years of work experience at a much lower cost.

The second perspective is the taxpayers'. Does it make sense to dump tax dollars into education if the only practical use of that education is to allow one person to edge an equally talented person out of a job. Where's the net gain?

[Texas Proud]

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Originally Posted by clifp This hardly qualifies as news but it is in the Wall Street Journal. Generation Jobless: Students Pick Easier Majors Despite Less Pay This is always discouraging to see the number of CS major continues to fall each year, and bet if you eliminate foreign students, and children of immigrants it looks even worse. I know this sounds like get off my lawn, but I really have zero sympathy for students. Gee past midnight for several days, one of my upper division Computer Science class required us signing paper that this course would require at least 20 hours of homework a week and that the final project would might require 200 hours (fortunately it was only 100 hours). 12-13 hours of studying/week is just crazy, the kids are only in class for what 3 or 4 hours a day. I always thought that every hour of lecture should have 2 hours of homework associated with it and typically 3 for STEM course.

Maybe she was just not smart enough to be an engineer or CS programmer...

[Texas Proud]

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Originally Posted by FUEGO You really have to look at the present value of a lifetime of higher earning potential vs. the opportunity cost of foregoing full time work for ~4 years and paying for school (whether funded out of pocket or by loans). I have seen estimates that college equals $600k to a million in increased earning potential.

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Originally Posted by Independent I've seen similar estimates, and to me they don't do much good. We know that college grads make more than HS grads. We don't know how much of the difference comes from what they learned in college vs. the personal characteristics they had before they started (brains, ambition). Would those characteristics lead to good results without the expense of a degree? It's easy for me to say a kid who can get an engineering degree from MIT should go to college. But most kids in that position don't spend much time fretting about whether they should to go. I'm thinking about the average student that never enjoyed school that much and who can't get accepted at a selective school. Would that person do better financially someplace else? That's a much harder and more important question to me. AFAIK, nobody has done the research that looks at mediocre students, corrects for as many non-school factors as possible, then compares financial results as they take different paths. It's surprising to me that I can't find it. Maybe somebody here has seen that type of research.

Saw Fuego's quote and Independant's answer...

I wonder if they averaged in the income of Bill Gates, Steve Jobs, Zuckerberg (??) etc. etc... (maybe the Google guys?)

Not sure if all dropped out our not, but as these people have shown it is their abilities that made them billionairs and not a college degree...

But I also think the vast majority of people NEED to have a college degree if they want to get out of a blue collar job... but then again, some blue collar jobs pay quite well....

[Texas Proud]

Quote:

Originally Posted by Tractor guy I was an engineering manager at a megacorp before I retired last year. I hired several engineers over the years and also had many conversations with hiring managers for other positions. The consensus was that a college degree was a requirement to be considered for any entry level manager position. The general feeling was that the more highly qualified people (with high initative, work ethic, and ability to learn new skills) would find a way to get a degree. We all knew that there were qualified people without degrees. However, the feeling was that we would find more qualified people in a pool of degreed candidates than in the same number of people who didn't have degrees. A lot of this was self selection. Highly motivated, high initiative, smart people will find a way to get a degree. Lorne

I know someone had answered this before... but I forgot the answer...

But, I remember reading that in the military, to get to the upper levels such as General or Admiral you had to have an advanced degree... and they said as a % of people there were more PHDs than almost anywhere else...

[Texas Proud]

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Originally Posted by youbet While I certainly agree that in recuriting for many vocations, considerable effort can be saved by considering only candidates with the exact degree called for by the Staffing Dept guru's, I don't think Bill Gates or Steve Jobs would have agreed that only those people should be considered.......... But, in the ridgid confines of MegaCorp and gov't job descriptions, no doubt a non-degreed, or non-traditionally degreed, candidate will seldom be chosen.

OK.... I am going to have to start reading the WHOLE thread before posting

[Bestwifeever]

Here's the list to pass on to any young people pondering what to major in.

Majors and their unemployment rate:
1. Actuarial Science—0 percent
2. Astronomy and Astrophysics—0 percent
3. Educational Administration and Supervision—0 percent
4. Geological and Geophysical Engineering—0 percent
5. Pharmacology—0 percent
6. School Student Counseling—0 percent
7. Agricultural Economics—1.3 percent
8. Medical Technologies Technicians—1.4 percent
9.Atmospheric Sciences and Meteorology—1.6 percent
10. Environmental Engineering, Nursing, and Nuclear Industrial Radiology and Biological Technologies—2.2 percent

http://news.yahoo.com/blogs/lookout/...163049193.html

[youbet]

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Originally Posted by Bestwifeever Here's the list to pass on to any young people pondering what to major in. Majors and their unemployment rate: 1. Actuarial Science—0 percent 2. Astronomy and Astrophysics—0 percent 3. Educational Administration and Supervision—0 percent 4. Geological and Geophysical Engineering—0 percent 5. Pharmacology—0 percent 6. School Student Counseling—0 percent 7. Agricultural Economics—1.3 percent 8. Medical Technologies Technicians—1.4 percent 9.Atmospheric Sciences and Meteorology—1.6 percent 10. Environmental Engineering, Nursing, and Nuclear Industrial Radiology and Biological Technologies—2.2 percent The 10 college majors with the lowest unemployment rates | The Lookout - Yahoo! News

I read that article already and found it interesting. But I think you would have to be very, very careful in working from that list. Some of those "majors" aren't really undergrad majors. They're post grad degrees. Many would be pursued by folks already employed in the field. Look at #3 "Educational Administration and Supervision." Virtually all the students in that program would be working teachers looking to move into education management. What a surprise that the unemployment rate is low! Ditto for #6 "School Student Counseling." People in that program are typically employed teachers.

[Bestwifeever]

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Originally Posted by youbet I read that article already and found it interesting. But I think you would have to be very, very careful in working from that list. Some of those "majors" aren't really undergrad majors. They're post grad degrees. Many would be persued by folks already employed in the field. Look at #3 "Educational Administration and Supervision." Virtually all the students in that program would be working teachers looking to move into education management. What a surprise that the unemployment rate is low! Ditto for #6 "School Student Counseling." People in that program are typically employed teachers.

Good points--the writer must have been a liberal arts major (kidding!).

Also, items 1, 2, 4, 5, and 9, if not others, all require a strong math/science aptitude, I'd say, which not everyone has, not to mention a strong work ethic to get through the degree. And admissions standards are high for some of the programs which often results in a shortage of qualified grads.

[eridanus]

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Originally Posted by Texas Proud Maybe she was just not smart enough to be an engineer or CS programmer...

That, or she saw the writing on the wall and realized that working 60 hours/week just wasn't worth it, especially if she was going to be laid off a year later when an Indian or Chinese could be hired for 50% less.

But the article does quote her, "My ability level was just not there."

[Hamlet]

Unemployment for ALL college grads is pretty low at about 4.7%.

Unemployment for college grads under twenty-five is much higher at 9.3%

Note that that includes people who have any job, not neccessarily a job that you would associate with a college degree. There are lots of college grads currently working at Starbucks, Burger King, and telemarketing.

There are a ton of recent college grads that are scraping by in McJobs waiting for the economy to recover. $25k is crushing debt to someone making $10/hr.

The starting salaries listed are mostly theoretical after a serious recession.

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Originally Posted by youbet SOME salaries and the lack of jobs in SOME fields don't support paying off the debt. But remember, unemployment for people with four year degrees is fairly low right now. Most graduates are finding jobs.

[eridanus]

Maybe our young CMU student has more wisdom than we assume.

"That may partly be because the jobs don't pay enough to attract or retain top graduates. Science, technology, engineering and math majors who stay in a related profession had average annual earnings of $78,550 in 2009, but those who decided to go into managerial and professional positions made more than $102,000, according to an analysis of U.S. Census data by the Georgetown University Center on Education and the Workforce.


"If you're a high math student in America, from a purely economic point of view, it's crazy to go into STEM," says Anthony Carnevale, director of the Georgetown center."


[Emphasis added]

[youbet]

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Originally Posted by Hamlet Unemployment for ALL college grads is pretty low at about 4.7%. Unemployment for college grads under twenty-five is much higher at 9.3% .

I'd like to read more about that Hamlet. Where did you get those numbers? I was aware of the <5% number for college grads in general but not the 9.3% for college grads under 25. It still sounds like the percentage of recent grads in trouble over their loans should be in low single digits. It would be the portion of the 9.3% unemployed who have large loans.

Yes, I'm sure that a few percent of recent grads are stuggling to pay loans. Those would be the folks at the intersection of large loan avenue and no job street.

But my point is that we need to find a way to give students more information, some sort of reality check really, as to what they're getting involved with when they sign up to take large student loans. We don't need to pay the loans for them. Currently both lenders (public and private) and schools have it in their best interest to sell the student on taking loans.

Again, as posted above, DW and I have been there and done that. When we signed DW up for large loans for college, it was with the knowledge that jobs were currently very available in her field and that we were commited to paying off the load promptly before starting a family, buying a house, etc. I have a feeling that many of the folks with student loan problems haven't done that type of planning or made that commitment. We need to find a way to get the information regarding the dangers of student loan debt to prospective borrowers in the same we we now warn low income earners that they can't afford a McMansion despite what the mortgage company might tell them.

[ziggy29]

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Originally Posted by youbet But my point is that we need to find a way to give students more information, some sort of reality check really, as to what they're getting involved with when they sign up to take large student loans. We don't need to pay the loans for them. Currently both lenders (public and private) and schools have it in their best interest to sell the student on taking loans.

I think we'd first have to take on the myth that everyone needs to go to college regardless of their aptitudes, their career aspirations and regardless of how much you have to go into debt for it.

The "educational arms race" in an excessively competitive society is leaving a lot of hopes and dreams in "crash and burn" mode.

[Texas Proud]

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Originally Posted by Hamlet Unemployment for ALL college grads is pretty low at about 4.7%. Unemployment for college grads under twenty-five is much higher at 9.3% Note that that includes people who have any job, not neccessarily a job that you would associate with a college degree. There are lots of college grads currently working at Starbucks, Burger King, and telemarketing. There are a ton of recent college grads that are scraping by in McJobs waiting for the economy to recover. $25k is crushing debt to someone making $10/hr. The starting salaries listed are mostly theoretical after a serious recession.

Isn't there a maximum % of your salary you have to pay on your loan Might not be for private student loans, but I think it is for fed loans...