Thirty & Broke

[steinj]

Calgary Girl - we're lucky here in Canada. Tuition is wayyyy lower than in the US - like 50-75% lower. Jo Jo

 

[Gone4Good]

Contrary to the impression given by the BW article, it is still possible to go to a private university and emerge debt free. At 34 I'm only about 3 years older than most of the people mentioned in BW. Nevertheless, both me and my wife, graduated debt free from private universities. My wife did so with zero support from her family. I had some help from my parents paying for my undergraduate degree but paid 100% of grad school on my own without borrowing a dime.

Many of the people featured in the BW article seemed very financially irresponsible. After accumulating mountains of various debt, one person used ~ $25K to pay for a big wedding. Another person, seemingly on the verge of bankruptcy, bought a $3,200 computer and a $1,500 digital camera. Etc, etc.

In my view the article was far too sympathetic to these people. Clearly the cost of education has grown out of control, but people don't NEED to borrow $100K+ to get an education (yet).

 

[Calgary_Girl]

We did the same thing for our sons, put them through the University of Calgary.  Wanted them to get a better start than DW and I did having to pay off student loans.  But we claimed all the tuition tax deductions to our own account.

That's our plan too. While other kids were paying off student loans from the U of C, I got a jump start on retirement by starting an RRSP when I was 20. We hope to give our kids the same benefit.

JoJo Girl is definitely right in saying that we have it much easier in Canada in terms of lower tuition. Hubby asked me the other day if we would still pay tuition if our kids wanted to go to school in the States. I told him that the U of C is a perfectly good school. If they want to go the States, they have to cover the difference between the U of C tuition and tuition south of the border.

 

[wildcat]

Ha! You mean I will be the Bently driver for some dude pulling down phat G's. Maybe Yrs to go or Brewer will need a driver.

Still soliciting employment...no takers?

In my view the article was far too sympathetic to these people. Clearly the cost of education has grown out of control, but people don't NEED to borrow $100K+ to get an education (yet).

Agree. Like I said I borrowed most of it and paid for a little of it. I'm not asking anyone to shed a tear for me or even a boo-hoo. It's a fact of life for some of us and at least it is more productive than say borrowing 40-50k in CC debt for junk. S/L help dumb people like me go to school and in return I will hopefully "contribute" to society someday.

 

[Gone4Good]

Like I said I borrowed most of it and paid for a little of it.  I'm not asking anyone to shed a tear for me or even a boo-hoo.  It's a fact of life for some of us and at least it is more productive than say borrowing 40-50k in CC debt for junk.  S/L help dumb people like me go to school and in return I will hopefully "contribute" to society someday.     

Wildcat, I didn't mean to suggest that people shouldn't borrow to finance their education, within reason.  The BW article , however, centers around people who got themselves in to trouble, not because of high tuition costs, but mostly because they were financially irresponsible.  One wonders whether these people were destined for financial trouble regardless of how much their degree cost.  Consider the plight of poor William:

He used his unemployment checks to pay the rent on a studio apartment. He lived off his credit cards, relying on a small sum that his extended family gave him to cover the minimum balance each month. He returned to school and bought a $3,200 computer system, then a $1,500 digital camera.

I think BW wrongly focused on the cost of higher education in this piece.  A better thrust of the article might be how many young people were raised to think they could have anything they wanted, exactly when they wanted it, without any form of sacrifice.  And how that mindset is now coming home to roost. 

 

[Big D]

Ummm, try telling that to the welders at Delphi who are at risk of having their $30 / hr wage cut to $10 / hr. 

Delphi's demand: Take $9 an hour

My God that is tragic.  I haven't done any research, but how in the world are they getting away with this?  I am sure their prices didn't fall 65%.  Maybe there was a part of the plan that said if they keep all of the workers, that would be the new wage.  Unions can distort things to their favor.  A round of layoffs, unfortunate as they are, might be the plan for wage preservation.

 

[Gone4Good]

My God that is tragic.  I haven't done any research, but how in the world are they getting away with this?  I am sure their prices didn't fall 65%.  Maybe there was a part of the plan that said if they keep all of the workers, that would be the new wage.  Unions can distort things to their favor.  A round of layoffs, unfortunate as they are, might be the plan for wage preservation.

It is, no doubt, the opening salvo in concession negotiations with the UAW.  If a deal is reached, worker comp will likely be better than this.  But if a deal is not reached, Delphi's Chapter 11 bankruptcy could be turned into a Chapter 7 - which means "no work for you!". 

However, one analyst estimated that Delphi's average compensation cost per U.S. worker is a whopping $125,000 per year.  This estimate includes pension and health care costs as well as payments going to "laid off" workers.  Yup, that's right - Delphi pays about 4,000 former employees to do nothing.

Did you ever hear the one about the farmer who killed the goose that laid the golden egg? 

 

[tryan]

Yep, colleges are pricing themselves out of business. My brother in-law is a professor at a large state university. Teaching the same class for the a third year in a row; working less than 10 hours a week for 60k per year.

But try hiring a roofer ... they don't answer the phones; too much work out there.

 

[astromeria]

Another reason students amass more college debt these days is that back then, most parents could count on a pension, while nowadays parents have to save a lot for retirement. My parents paid for my brothers' and my college educations, including part of one brother's dental school, and didn't save a dime for retirement--but they had my mother's pension to look forward to. Whereas with my children (from a previous marriage), we split their college bills 3 ways--1/3 form each parent and 1/3 from the kid. My daughter ended up with $3k in debt, which was paid off quickly. My son ended up with $20k in debt due to his choice of school, low-paid summer jobs, and not working during the school year. (But he graduated at the right time--he consolidated his loans at 2%!) Neither of my kids accumulated any credit card debt in college (or since) that I am aware of.

OH--and my DH is a college instructor. He works 40 hrs a week on regular stuff plus another 20 or more on research, all for $60k/year. He loves it and takes both teaching and keeping up to date seriously. He spends a lot of time on improving the content of his classes and his teaching skills. He spends hours daily (weekends too) helping students write their programs. But maybe that's becasue it's computer science. Anyway, he teaches at a public college where tuition has gone up almost the identical percent as state funding has gone down each year. Plus, to attract students (and their parents!) they need to build new and refurbish old dorms, classrooms, labs,  the arts center, the business school, the library, the science center.

 

[slipp1229]

The primary reason for the incredible increase in the cost of higher education (public) is:

1) Educator salaries
2) Benefits (for #1 ... especially pensions and health care)
3) Administrative costs (everyone not teaching but collecting a salary at universities)
4) Politicians that are elected,manipulated and paid for by lobbying interests representing
    #1  and #3.

5)  We idiot taxpayers that are too lazy and/or stupid to let #1-4 exist. 

Final statement:  Both the U.S. Education & Healthcare Costs are HOPELESSLY BROKE.  It is truly
ugly and unfixable by the entities currently in place.  #5 will reach the breaking point
and then things will change..... that is sad and will be too late.  We are lazy.

Slipp

 

[Cut-Throat]

Educator salaries high? - When are you signing up to be a teacher?

We are lazy? - Maybe too lazy to actually bone up on the facts!

 

[REWahoo]

The primary reason for the incredible increase in the cost of higher education (public) is:
1) Educator salaries

According to the November 28 issue of Newsweek, "The average new teacher today makes just under $30,000 per year." (p. 100).

Looks like a problem all right, but not because it's too high...

 

[sgeeeee]

The primary reason for the incredible increase in the cost of higher education (public) is:

1) Educator salaries
. . .

I don't think you can find any data to back this up.  I know that when I left academia two decades ago, industrial salaries were much higher.  Based on conversations with my colleagues in academia today, that hasn't changed.

 

[Honkie]

Ummm, try telling that to the welders at Delphi who are at risk of having their $30 / hr wage cut to $10 / hr. 

Delphi's demand: Take $9 an hour

Try telling that to 2 million Indian/Bamgladeshi/Indonesian/Chinese welders and they will say "WOW, , a 300% pay increase! Where do I sign where do I sign!!!!"

Unpleasant for the Delphi workers, but a fact of life in the 21st Century..

 

[Spanky]

College tuition of public institutions is still affordable to me - about $6K per year for undergraduate. The problem is that kids choose not to attend a local public university and not to stay home. Some kids would rather live on campus or nearby campus even though their parents is only 5 miles away. It seems funny to me that their parents are in full support of living out the home (as a way to become independent or promote social interactions with other students) but yet complaining about the exorbitant cost of college. They may say that we want the "best" for our kids. I guess that a local well-known public university is not good enough.

I guess there are some exceptions:
A decent college is far away.
The local univeristy does not offer the major wanted.
The local university is of lower tiers in ranking

As for me, I have a daughter who will be attending college soon. She can attend the University of Minnesota (that has a decent ranking in engineering) for $6K, the University of Wisconsin at Madison (another highly ranked engineering school) for $10K or an expensive college such as MIT, Cal Tech, USC or Stanford for $40K+. It may be true that she might be able to receive grants and scholarship for attending the expensive schools. The odds are slim that the total cost will be comparable to that of either U of Minn or U of Wis.

 

[Mr._johngalt]

College tuition of public institutions is still affordable to me - about $6K per year for undergraduate. The problem is that kids choose not to attend a local public university and not to stay home. Some kids would rather live on campus or nearby campus even though their parents is only 5 miles away. It seems funny to me that their parents are in full support of living out the home (as a way to become independent or promote social interactions with other students) but yet complaining about the exorbitant cost of college. They may say that we want the "best" for our kids. I guess that a local well-known public university is not good enough.

I guess there are some exceptions:
A decent college is far away.
The local univeristy does not offer the major wanted.
The local university is of lower tiers in ranking

As for me, I have a daughter who will be attending college soon. She can attend the University of Minnesota (that has a decent ranking in engineering) for $6K, the University of Wisconsin at Madison (another highly ranked engineering school) for $10K or an expensive college such as MIT, Cal Tech, USC or Stanford for $40K+.  It may be true that she might be able to receive grants and scholarship for attending the expensive schools. The odds are slim that the total cost will be comparable to that of either U of Minn or U of Wis.

This brings back many memories. My oldest (son) was signed on at the U of W in Madison but never started. He ended up paying for
100% of his college (has a Bachelors from SIU). Oldest daughter was
told she could go wherever she wished but she had to get the cost down equal to an in-state public school. She did it
(scholarships mostly) and went to an out-of-state private college.
Youngest is a senior at the same school (very expensive).
I contributed what was ordered by the court (post-divorce)
and was very unhappy about it. It made no sense to me that
she went there (no scholarships). Still doesn't. She could have obtained the same education (or better) for a fraction of the cost.

JG

 

[Nords]

The primary reason for the incredible increase in the cost of higher education (public) is:

1) Educator salaries
2) Benefits (for #1 ... especially pensions and health care)
3) Administrative costs (everyone not teaching but collecting a salary at universities)
4) Politicians that are elected,manipulated and paid for by lobbying interests representing
    #1  and #3.

5)  We idiot taxpayers that are too lazy and/or stupid to let #1-4 exist. 

Final statement:  Both the U.S. Education & Healthcare Costs are HOPELESSLY BROKE.  It is truly ugly and unfixable by the entities currently in place.  #5 will reach the breaking point and then things will change..... that is sad and will be too late.  We are lazy. Slipp

Yelnad, what's your perspective on the college part of this debate?

University of Hawaii is in the middle of a five-year plan to DOUBLE the tuition. Seems pretty unreasonable when you read the hysterical rhetoric in the local papers. Then you learn that it's going from $4K/year to $8K.

A local paper here published a series of articles claiming that local kids do better at Mainland colleges. It's not that they're necessarily better than UH-- some are and others aren't-- as much as it forces the kids to get out of the house, live independently, and start making their own decisions. Learning a career and getting a degree are incidental byproducts of this process.

Getting away from a megalithic state-supported institution to a small private college was generally perceived to be a good idea, too. Better parking is just an unexpected bonus...

 

[slipp1229]

Ok, I obviously hit a nerve here... Cuthroat... never too lazy here

To see the 2004-05 Average Professor Salary public Universities

http://www2.acs.ncsu.edu/UPA/peers/current/ncsu_peers/profsal.htm

Keep in mind these are not even the "elite" schools. This is just a "middle of the road" example.

I will elaborate when cutthroat has had time to "bone up"

Slipp

 

[sgeeeee]

Ok, I obviously hit a nerve here... Cuthroat... never too lazy here

To see the 2004-05 Average Professor Salary  public Universities

http://www2.acs.ncsu.edu/UPA/peers/current/ncsu_peers/profsal.htm

Keep in mind these are not even the "elite" schools.  This is just a "middle of the road" example.

I will elaborate when cutthroat has had time to "bone up"

Slipp 

You seem to think that those numbers are high, but what would those people make in industry? In most cases you are talking about people with PhDs, significant published contributions in their field, and many years experience. In the case of universities with Law schools and Med schools, you have to compare the university salary with what they could make as leading people in those fields.

NC State has a fairly large electrical engineering school. I guarantee you that an accomplished, well-known, experienced electrical engineer with a PhD in industry can make far more than the $94.8K per year that is the published average. In fact, there's a good chance he or she could be making double that in industry.

 

[slipp1229]

Ok... here we go again..

http://swz.salary.com/salarywizard/layouthtmls/swzl_compresult_national_EN04100032.html

Once we go through this exercise a few more times I will elaborate on the reality
of professional incomes in the US and more importantly (back to subject) how they
compare to salaries of University Professors.  Ultimately.... how this affects the cost of higher education.  (Cut throat ... bone up)

Slipp 

 

[astromeria]

My husband teaches at a state college--the tuition goes up every year almost the exact percentage that state funding goes down. What a coincidence!

The person who posted average PROFESSOR salaries should know that his chart represents FULL PROFESSOR salaries. How do I know? I frequently check these charts! My husband is making the average pay ($58k) at his college for all teachers (from full professors down to staff instructors). He's a Staff Instructor with over 30 years of industry experience and earns what an Associate Professor with a couple years of experience makes. Associate Profs are usually in their mid-30s through 40s. Full Profs are usually in their 50s and 60s. After 10 years of teaching, my husband should get maybe $800/month in pension w/no COLA. woohoo We also pay more for medical insurance than anybody I know who works for a private company.

 

[slipp1229]

Hi astromeria,

Just curious...

Why would your husband leave the industry he was working in to teach the same industry course for $58K?  Did he retired (after 30 yrs) to do what was personally fullfilling?   Otherwise, I have to assume the industry he was in did not compensate better than being an associate prof. at $58K. 

Then again, maybe he was one of the many caught in the downsizing/bankruptcy/scandal corporate stories occuring in America today and had no choice. Am I close?

Slipp 

 

[sgeeeee]

Ok... here we go again..

http://swz.salary.com/salarywizard/layouthtmls/swzl_compresult_national_EN04100032.html

Once we go through this exercise a few more times I will elaborate on the reality
of professional incomes in the US and more importantly (back to subject) how they
compare to salaries of University Professors.  Ultimately.... how this affects the cost of higher education.  (Cut throat ... bone up)

Slipp 

You can't compare the salary of a typical BSEE mechanical engineer with that of an experienced, well-known, internationally respected PhD in the field.

Look. I have a PhD in electrical engineering and have worked in both academia and industry. I am still recruited regularly by both. You can't convince me that academics are better paid because it isn't true. Sorry. You are simply wrong about this.

 

[astromeria]

Why would your husband leave the industry he was working in to teach the same industry course for $58K?  Did he retired (after 30 yrs) to do what was personally fullfilling?   Otherwise, I have to assume the industry he was in did not compensate better than being an associate prof. at $58K. 

Then again, maybe he was one of the many caught in the downsizing/bankruptcy/scandal corporate stories occuring in America today and had no choice. Am I close?

Slipp 

His last startup was floundering and laid off all the sr people (dept heads)--the VP he reported to figured he could run Eng as well as DH did. Not. Most of the people DH hired left as soon as they could get other jobs. At his peak, DH made ~$150k, so we did face a BIG pay cut. But at age 52, we didn't think the odds of getting a job in Silicon Valley were very good in early 2002. While he still had sharp coding an design skills, he'd been in mgt for over 10 years and knew from his last job search that he couldn't get a job as an individual contributor. My company was doing poorly, too, and I figured it was just a matter of time for me to be laid off as well (but as it turned out, that didn't happen!). My father died the same week DH lost his job, and I wanted to be with my mom who had never lived alone before and was pretty freaked out. I continued to work for my SV company long distance, and DH got hired at the college, starting as an Adjunct Instructor for $11k and NO benefits. After 2 years of teaching undergrads, a grad school class, and intro classes for non-majors, he was offered a 5-yr contract on staff. So $58k seems liek good money now! Anyhow, since our expenses are lower by about the same amount as our income, we aren't feeling any pain. CA is awfully expensive compared to SC.

It might surprise you to know that college teachers get annual reviews similar to those in business. DH was rated on things like teaching success, field knowledge and application, and service to his field, department, school, and community. There's a bell curve of ratings just like in industry, and he was put in the top category, garnering a munificent 3.75% raise. Those in the bottom category get no raise at all, even if tenured (if not tenured, their contract wouldn't be renewed). I think the majority of people are in the satisfactory category and got a 1.5% raise. When I hear that teachers are overpaid, I get steamed! BTW, his dept treats him as an equal despite no PhD--he's got it where it counts, which seems to be all that's needed for respect. He's never had such pleasant colleagues with no axes to grind.

 

[Mr._johngalt]

His last startup was floundering and laid off all the sr people (dept heads)--the VP he reported to figured he could run Eng as well as DH did. Not. Most of the people DH hired left as soon as they could get other jobs. At his peak, DH made ~$150k, so we did face a BIG pay cut. But at age 52, we didn't think the odds of getting a job in Silicon Valley were very good in early 2002. While he still had sharp coding an design skills, he'd been in mgt for over 10 years and knew from his last job search that he couldn't get a job as an individual contributor. My company was doing poorly, too, and I figured it was just a matter of time for me to be laid off as well (but as it turned out, that didn't happen!). My father died the same week DH lost his job, and I wanted to be with my mom who had never lived alone before and was pretty freaked out. I continued to work for my SV company long distance, and DH got hired at the college, starting as an Adjunct Instructor for $11k and NO benefits. After 2 years of teaching undergrads, a grad school class, and intro classes for non-majors, he was offered a 5-yr contract on staff. So $58k seems liek good money now! Anyhow, since our expenses are lower by about the same amount as our income, we aren't feeling any pain. CA is awfully expensive compared to SC.

It might surprise you to know that college teachers get annual reviews similar to those in business. DH was rated on things like teaching success, field knowledge and application, and service to his field, department, school, and community. There's a bell curve of ratings just like in industry, and he was put in the top category, garnering a munificent 3.75% raise. Those in the bottom category get no raise at all, even if tenured (if not tenured, their contract wouldn't be renewed). I think the majority of people are in the satisfactory category and got a 1.5% raise. When I hear that teachers are overpaid, I get steamed! BTW, his dept treats him as an equal despite no PhD--he's got it where it counts, which seems to be all that's needed for respect. He's never had such pleasant colleagues with no axes to grind.

This reminded me of my brother. 58, no degree and currently unemployed
(again). Probably gone through 5 jobs in 5 years.
I think he has been
just taking whatever comes along in fear that nothing else will appear.
Anyway, I feel his pain. Now, I am told they have sold the McMansion and
are moving near his original home base where they will buy with cash
(no mortgage). That's not a bad idea. Of course, I would just hang it up
but he and I are quite different in our approach to life/finances.
He's a good guy though.

JG