Escape from Student Debt Strategy?

[W2R]

So I was curious and looked at tuition locally. 20k/year for just tuition. Ugh!

I just looked up the in-state tuition at LSU, our flagship public university in Louisiana.

At LSU, if you live in Louisiana, have a 3.0 GPA, and got 1100 total on the SAT's, apparently you automatically get a full scholarship.

But let's assume that you are a Louisiana resident but have a worse GPA or worse SATs than that (I doubt many of us did). Anyway, in that case, instead of getting a full scholarship you pay $11,950 for an entire year. I assume they are ignoring summer school in which case the total would be $5,975 a semester.

Pulling up an inflation calculator, the equivalent (inflation adjusted amount) would have been $758/semester back in 1966 when I first started college. But then, I lived elsewhere and was working my way through school without any loans, so I stuck to lesser state universities and community colleges because they were cheaper. By doing that I got through while paying about half of that inflation adjusted amount. I would have gotten through undergrad at the present LSU tuition, adjusted for inflation, without loans, but I admit it could have taken me longer.

I never had to pay tuition past undergrad because no grad student who landed a teaching assistantship or research assistantship had to pay tuition. If I hadn't had the grades and GRE's to land an assistantship, I would have assumed that I wasn't grad school material and would have taken a different path in life. Since my area of interest was one of the STEM areas 100% of the grad students in my departmental section (17 out of 17) had assistantships. Getting an assistantship has got to be tougher for those not in STEM subjects, though.

Sorry for the rambling post! I guess the TL; DR is that one way to dodge high tuition costs is to be a Louisiana resident, get the full scholarship, and major in a STEM subject.

 

[JDARNELL]

This is a common view expressed by STEM majors here. Even people that usually make data and evidence based observations about investing and finance make anechedotal, condescending comments about university fields of study.

The amount of income earned over a lifetime depends on many factors. IMO, university field of study is not determinant.

But I bet there is a high correlation.

 

[Sunset]

OMG! These people have to be the biggest losers ever!
https://www.cnbc.com/2019/05/25/they-fled-the-country-to-escape-their-student-debt.html

......
Rack up a moderate debt, complain that you can't find a job and then run away and hide? Losers!

Just wanted to thank you for posting an interesting thread in a non politically correct manner.

It's nice to read a thread about ex-students gaming the system, only mistake the fellow made was he should have partied a few more years at College on loans, and racked up his credit cards with cash advances before fleeing to India. But of course a loser wouldn't be that smart.

 

[youbet]

Fair point, but I'd bet the house that there are many more underemployed European history or comparative literature or communications and history majors than underemployed accounting majors.

No doubt vocational and vocational-like programs yield more consistent results in terms of earning power than Liberal Arts programs. But many of us Liberal Arts majors manage to make it work out if that's where our heads are at.

 

[Sunset]

I watched all the videos, and the first fellow who owes a whooping $20K, has his face blurred out in the video.

That is pretty weird, as I'm sure there are school photos of his face, and Drivers license, etc... So I'm thinking he blurred his face as he is also wanted for some crime of a nature (sexual) where officials will pursue, unlike stealing some small amount of money.

 

[Sunset]

My son went to Vietnam to teach English and math. It had been a dream of his and he is enjoying it.

I had an acquaintance who did this in Thailand.
While the living which is cheap is fine due to the salary which is good in the host country, for my friend it could turn out to be a value trap.

My friend can save 10% of income for retirement:
1) My friend lives in Thailand out of $12,000/yr salary saves $1,200
2) My friend lives in USA, makes $40,000/yr and saves $4,000 (plus SS credits)

1) After 30 years, my friend in Thailand cannot afford to return to States.
2) After 30 years, my friend in USA, retires and can live in USA, or can travel to Thailand to visit or live.

 

[bigreader]

No doubt vocational and vocational-like programs yield more consistent results in terms of earning power than Liberal Arts programs. But many of us Liberal Arts majors manage to make it work out if that's where our heads are at.

Hey, don't sell us short, fellow B.A. holder. I just came across this paper. https://mellon.org/resources/news/articles/economic-benefits-and-costs-liberal-arts-education/ I haven't finished is yet, and the results sure have a lot of caveats but they do say:

"While engineering majors, other STEM majors, and business graduates have higher median earnings than humanities majors, humanities majors with a BA earn significantly more than those with only some college or only a high school diploma. Humanities BA degree holders were more likely to get an advanced degree than graduates in all fields combined, further increasing their earnings."

They also conclude that including the cost of the education, a BA in liberal arts makes financial sense.

I would have trouble counseling an 18 year old to study what they may or may not be good at, so that they can get a job that they may or may not be good at, and which may or may not still be there in 10 years. My life experience suggests that today's hot major is tomorrow's outsourcing candidate! I'm a big fan of the B.A. degree and have, with mixed success, lobbied my kids hard to go to a liberal arts college. My financial support is based on their work and my budget, not their major.


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[pb4uski]

.... I would have trouble counseling an 18 year old to study what they may or may not be good at, so that they can get a job that they may or may not be good at, and which may or may not still be there in 10 years. My life experience suggests that today's hot major is tomorrow's outsourcing candidate! I'm a big fan of the B.A. degree and have, with mixed success, lobbied my kids hard to go to a liberal arts college. My financial support is based on their work and my budget, not their major. ....

Well I certainly wouldn't advocate someone selecting a field of study based solely on its job/career prospects with no consideration of their liking or passion for the field... but on the other hand, I wouldn't advocate selecting a major solely based on "pursuing your passion" with no consideration of what one might do after earning that degree... which seems to happen all too often.

One stubborn niece was bound and determined to get a degree in theater... I'll give her credit... she perserved and got that theater sheepskin... and then went on to paint houses and selling shoes in a shoe store both of which she could have done with a HS diploma.

OTOH, nephew got a degree in music and now works in tech and is doing well. Another nephew got a degree in English, got a job at a megacorp where his father worked writing/editing manuals and installation instructions and then went back to school for a masters and is now a family therapist.

 

[Walt34]

One stubborn niece was bound and determined to get a degree in theater... I'll give her credit... she perserved and got that theater sheepskin... and then went on to paint houses and selling shoes in a shoe store both of which she could have done with a HS diploma.

Similar story here, a niece was determined to get her degree in dance and be a Rockette. Well, she got the degree but to my knowledge never even auditioned for the Rockettes. But she did get a job with Barnum & Bailey & Ringling Bros. circus for a couple of years.

She is now a part time process server in Las Vegas.

 

[MichaelB]

I think it’s pretty clear the subject of the OP link should have never gone to college in the first place. His problem is not student debt, it’s how he makes basic life choices. Helpless, and hopeless.

No doubt vocational and vocational-like programs yield more consistent results in terms of earning power than Liberal Arts programs. But many of us Liberal Arts majors manage to make it work out if that's where our heads are at.

Good point on vocational programs. My guess is a fair portion of college students would be better off doing vocational training. That is, better off in terms of job prep and also cost of training vs expected future income.

Still, when looking at the data, student debt is rising, but it isn’t the crisis one concludes when reading media reports. There is a crisis, and it is with student debt of older students who attended for profit universities and vocational programs. This is covered in the latest Fed survey on Well Being of US Households, here https://www.federalreserve.gov/consumerscommunities/shed.htm

I would urge everyone interested in this thread to read the sections on higher education and student debt. It’s just a couple of pages, easy reading .

Looking over the summary I noticed one particularly troublesome comment

Many forms of debt finance education. Student loans are by far the most common form, held by
93 percent of those with their own education debt outstanding. In addition, 31 percent have some other form of debt for their education, including 24 per- cent who have borrowed with credit cards, 7 percent with a home equity line of credit, and 12 percent with some other form (table 25).

Credit card and student debt do not belong in the same category, never in the same sentence, and sets off alarm bells in my mind.

 

[Teacher Terry]

Sunset, my son doesn’t intend to stay there forever. Just a adventure he wanted to have. Since he is single he should do what he wants.

 

[ncbill]

Income-based repayment or (a couple of borrowers in the article are still young enough)

https://www.thesimpledollar.com/loans/student/student-loan-forgiveness-joining-the-military/

 

[rayinpenn]

My tree guy was HS class mate of DS Cool Hand in high school. It became clear that he wasn’t academically gifted.. he did however have a very successful lawn business. He was fortunate to get a full ride to:
https://www.williamson.edu

A trade school run like a military school.. there is a shortage of tradesmen and he is doing quite well for himself. For me College was a path to a better life.. i paid off my student loans.
I know now that college isn’t the only way to go.

 

[Music Lover]

No doubt vocational and vocational-like programs yield more consistent results in terms of earning power than Liberal Arts programs. But many of us Liberal Arts majors manage to make it work out if that's where our heads are at.

Smart and driven people can make a lot of things work that are not optimal, but with better tools they will do even better.

 

[Sunset]

Sunset, my son doesn’t intend to stay there forever. Just a adventure he wanted to have. Since he is single he should do what he wants.

I'm sure it's an adventure, exciting and educational.

However, in case the years start rolling by, it could be something to mention to him in case he never thinks about it.

 

[Teacher Terry]

I will but he is exceptionally smart and it’s his life. I mention things once and stop which is why I have a great relationship with all my kids.

 

[brucethebroker]

Regarding majors, I had many friends who majored in English. My graduating class of ~1000 in a very well known university had roughly 400 English majors and 400 histories. This was the early 60s, and jobs were plentiful. Everybody got middle class jobs.
Ha

Yep. Even back in early 70's, we were advised to get English Majors or Minors if we wanted to teach at the MS/HS level. All grade levels needed mutiple Englsh/History teachers, but only one art, music, etc. teacher. (Smaller rural/suburb areas). Plenty of teaching jobs back then-before teaching became "underemployment" and many of us left the field.

I don't think the counselors realized that demographics were changing-teaching degrees continued to be cranked out in the 80's-90's, even as the birth rate declined in many areas.

 

[marko]

Just wanted to thank you for posting an interesting thread in a non politically correct manner.

Hard to be PC when reading an article about imbeciles. Jus' sayin'

 

[ivinsfan]

So, I guess they never anticipated a new car either? Or, even a good used one? $200 per month is not even a car payment. Plus, those loans have adjustments for income. If you’re unemployed, you can defer the payment and if you’re working at a lower paying job, you can get a payment based on your income. How anyone could conclude that running away to a third world country is a solution is beyond my ability to comprehend. When I was going to school and working, people said that was hard. When I was working and raising a family (with major help for DW), people said that was hard. When I got my CPA and then my MBA, people said that was hard. I always thought, you know what’s hard? Being homeless. That’s HARD. This situation, living in a third world situation, seems a lot harder than just putting your head down and getting to work and paying your debts. How pathetic.

Absolutely. in fact a blogger here has a ER blog and has made no secret here of the fact his substantial advanced degree loans are on permanent deferral and his biggest issue with that is when 10 years of low income pass his loans will be forgiven and he will need to pay taxes on the outstanding balance of the loan. He's worth over 2 million bucks...

Oddly enough it's almost the only thing he doesn't talk about on his blog. He has no problem talking about his families 6 week vacations abroad but not his student loan defaults. I asked him here about two years if he ever intended to address the default plans ( and yes it's just his 10 year plan to never pay them back) and he said he had an article in the pipeline..but so far nothing.

 

[jabbahop]

I see the way the wind is blowing re this thread, but really, isn't the current price of college in the US beyond belief? Regarding majors, I had many friends who majored in English. My graduating class of ~1000 in a very well known university had roughly 400 English majors and 400 histories. This was the early 60s, and jobs were plentiful. Everybody got middle class jobs. It is true that many of us can see reality, and today we would be very unlikely to borrow money for anything but a likely aid in the job market. But I think we should also realize that there is powerful hype around about how wonderful college degrees are. I think that we can be fairly sure that these profiled students didn't have many councilors advising them to become welders or nurses or linemen/women and to forget college.

Ha

Not commenting on the article per se but I agree on the costs are beyond belief. Apparently public university costs have increased 140% AFTER inflation in 1971-2016. Inflation adjusted Median income for men has decreased 5% but increased 71% for women during that time. Below is the source.

https://college-education.procon.org/view.resource.php?resourceID=005532

 

[Alan]

Thanks for the interesting discussion.