Student Debt

 

 

"It is hard to make traction with a millstone around your neck..."

 

 

I have thought many times how I would obtain a college education if I was a college age youth. First off, I think it is criminal that so many kids are getting out of college knee deep in debt. Now, this is not a new phenomena - it has been going on for years. What is new is the size of the debt. Take a huge college debt, mix in a stubborn economy with stagnant growth, and you have a perception for a very tough start in life.

First off, know this - the costs in both public and private colleges are still out of control. How much so? In 2013, the cost for public schools have gone up almost 5% - over twice the inflation rate. According to CNN Money, the costs for a year of college in the school year 2012-2013 is daunting. A private college has tuition of almost $30,000 a year. A four year state school has tuition of almost $8,700 a year. A two year community college has tuition of almost $3,200 a year. These costs are tuition only, with no books, fees, dorms or meals included.

Part of the problem is schools cannot (and will not) control their costs. A bigger part of the problem is the student. If I did not want to graduate with a mountain of debt, I would do my first two years at a community college. I would get all my lower division classes done there. Think about it - the cost of a year at a community college is 1/10 as much as a private college.

In addition, we have been to many grad parties over the past few years. Only one student announced she was going live at home while going to school. Everyone else was going to live in a dorm or an apartment by campus. A student can save a boatload of money just by living with mom and dad for at least the first two years of college.

Things are not going to get better. According to Savingforcollege.com, the cost of college, no matter if private, public or community will more than triple in the next eighteen years! Who in the world will be able to afford that? We are about to make college affordable for only the privileged class.

It is possible to get a good education these days. However, you need a plan. Trust me, you don't want to start out with a mountain of debt. Even with the new "agreement" on Stafford Loans, should the economy improve, the rate on these loans could go as high as 8 1/4%. If you have outstanding loans of $50,000, 8 1/4% is a big, big number.

Live at home for a while after high school. Trust me, once you have to start paying rent and utilities, you will miss the days of free lodging. Get to know your local community college. They have come a long way since the early days of junior colleges. Major in something that will get you employed. Do your homework on your future. History is fun, but there are few jobs out there for a history major. Don't be afraid to work part time while going to school. It worked okay for my generation.

Most of all, good luck. My generation has screwed this up - it is up to your generation to make it right.