Scariest Graph Ever

[asta]

From a blog Post at MedicineSux:

 

“Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong. The for-profit education industry has proven equal to the task.” -Steve Eisman (renowned hedge fund manager who called the housing market collapse) [Public & Private School graphs in later post]

Edited December 15, 2010 by asta

[jld]

But these are just for-profit colleges, right, asta? It would interesting to see a similar graph, but with non-profit state and private college tuition and fees over the same period.

 

Still, thanks for posting this.

[asta]

But these are just for-profit colleges, right, asta? It would interesting to see a similar graph, but with non-profit state and private college tuition and fees over the same period.

 

Still, thanks for posting this.

 

I'm assuming you're right.

 

I seem to remember someone posting a story here at some point about how the increase in tuition at all colleges had mirrored the increase in federal aid available to students (eg: tuition goes up, you're allowed more loans to cover it, so they raise tuition, so you are allowed more loans, on and on). It is a never ending cycle that really has no basis in reality, regardless of public or private.

 

 

a

[creekland]

I heard from a girl yesterday who is heading to a for-profit school. She's taking on $125,000 in debt for a culinary degree. I asked her if she was sure she wanted the equivalent of a house mortgage in college loans and she assured me she did plus she couldn't wait to go. Then I asked what starting salaries for chefs were and she said, "pretty low, but it's what I want to do."

 

I didn't feel comfortable saying more. She was very excited. It's sad.

[jld]

I heard from a girl yesterday who is heading to a for-profit school. She's taking on $125,000 in debt for a culinary degree. I asked her if she was sure she wanted the equivalent of a house mortgage in college loans and she assured me she did plus she couldn't wait to go. Then I asked what starting salaries for chefs were and she said, "pretty low, but it's what I want to do."

 

I didn't feel comfortable saying more. She was very excited. It's sad.

 

And what's even sadder is that if you had tried to talk to her parents, they would probably say they're okay with the idea.

 

You know, sometimes I think most of America has lost touch with financial reality. It's as though people think there is a never-ending supply of money, and that somehow, by magic, I guess, "everything will take care of itself". I don't get it.

[jld]

I'm assuming you're right.

 

I seem to remember someone posting a story here at some point about how the increase in tuition at all colleges had mirrored the increase in federal aid available to students (eg: tuition goes up, you're allowed more loans to cover it, so they raise tuition, so you are allowed more loans, on and on). It is a never ending cycle that really has no basis in reality, regardless of public or private.

 

 

a

 

I clicked on the link you provided, and that's where I saw it was for-profit colleges. If you do find a graph for non-profit private and public colleges, I would love to see it. I bet the curve is similar, though perhaps not as high (although, who knows?).

[Brenda in MA]

You know, sometimes I think most of America has lost touch with financial reality. It's as though people think there is a never-ending supply of money, and that somehow, by magic, I guess, "everything will take care of itself". I don't get it.

 

Why would most Americans care about the implications of debt? They probably figure that if their debt gets so bad, they will just be bailed out like everyone else.

 

After all, our government keeps passing stimulus bills, tax cuts, extensions of jobless benefits, etc. with no concern towards the implications of the debt these things will create and no thought towards reining in the increasing spending that is further complicating the problem. If the gov't isn't responsible, why should individual citizens be?

[jld]

I'm wondering if it has always been this way, Brenda. Maybe America has never cared about debt? I don't know history well enough to know, but maybe someone here is knowledgeable about this?

[FaithManor]

Asta, quote: "You know, sometimes I think most of America has lost touch with financial reality."

 

This nation will not be climbing out of this recession/depression any time soon and a lot of it has to do with individual debt....the general population is in debt up to their eyeballs and that's not good when jobs and wages are contracting. The whole thing is quite self-perpetuating.

 

I've got one here that would love to go to chef school. But, he's a lot more likely to end up at the big Ag state school here in Michigan because they have a restaurant management/catering degree with an emphasis in the culinary arts and it will cost less than half of the price tag mentioned. No, he won't be able to get into 4 star restaurants starting out but then, nobody does even if they get into an elite chef school.

 

Faith

[asta]

Here are graphs for public and private schools.

 

It's kind of sad: you look at the bar graph and you think - "oh, 3% there, that isn't so bad." Then you look at the graph beneath it and realize that actually, the price, even adjusted for inflation, has actually tripled since 1981, and your head just spins.

 

 

a

Edited December 15, 2010 by asta

[Dana]

I'm assuming you're right.

 

I seem to remember someone posting a story here at some point about how the increase in tuition at all colleges had mirrored the increase in federal aid available to students (eg: tuition goes up, you're allowed more loans to cover it, so they raise tuition, so you are allowed more loans, on and on). It is a never ending cycle that really has no basis in reality, regardless of public or private.

 

 

a

 

In recent minutes from our faculty council (a cc), we were told that 11 years ago we got 48% of the college's funding from the state. Thanks to budget cuts, we now get only 9% from the state. Full-time faculty are now teaching 18 credit hours a semester. There's no way you can do a good job of giving student feedback with that many students.

[flyingiguana]

In recent minutes from our faculty council (a cc), we were told that 11 years ago we got 48% of the college's funding from the state. Thanks to budget cuts, we now get only 9% from the state. Full-time faculty are now teaching 18 credit hours a semester. There's no way you can do a good job of giving student feedback with that many students.

 

Tax cuts at the state level are perhaps more of a driver than more federal financial aid and loans. The state colleges have to raise their tuition because they are no longer being subsidized as well. The private colleges then see that they can raise their tuition and still be within the difference that people expect between private and public schools.

 

Also, the big inflation in home prices has probably also had a big effect. People borrowed on their homes to pay for college, so there was more money available to pay tuition, and they didn't shop as aggressively for a good deal.

 

But I'm curious about what the actual rates are --not the list price, but what students actually pay after financial aid. Have private colleges raised their prices somewhat but then made up for it with better financial deals to those students they really want?

[Jane in NC]

To add to the discussion:



This is from a NY Times column on college costs. You can find it here. (Although I am always confused as to whether one must be registered with the Times to read their content.)

[creekland]

 

I've got one here that would love to go to chef school. But, he's a lot more likely to end up at the big Ag state school here in Michigan because they have a restaurant management/catering degree with an emphasis in the culinary arts and it will cost less than half of the price tag mentioned. No, he won't be able to get into 4 star restaurants starting out but then, nobody does even if they get into an elite chef school.

 

Faith

 

That sounds far more reasonable for an aspiring chef to me. I'm not sure those graduating from the for-profit institute start out any higher or are any better educated. Perhaps I'm wrong though. I honestly don't know.

[asta]

In recent minutes from our faculty council (a cc), we were told that 11 years ago we got 48% of the college's funding from the state. Thanks to budget cuts, we now get only 9% from the state. Full-time faculty are now teaching 18 credit hours a semester. There's no way you can do a good job of giving student feedback with that many students.

 

I read an interesting bit:

 

Over the last two decades, colleges and universities doubled their full-time support staff while enrollment increased only 40 percent, according to a new analysis of government data by the Center for College Affordability and Productivity, a nonprofit research center.

 

During the same period, the staff of full-time instructors, or equivalent personnel, rose about 50 percent, while the number of managers increased slightly more than 50 percent.

 

The growth in support staff included some jobs that did not exist 20 years ago, like environmental sustainability officers and a broad array of information technology workers. The support staff category includes many different jobs, like residential-life staff, admissions and recruitment officers, fund-raisers, loan counselors, and all the back-office staff positions responsible for complying with the new regulations and reporting requirements colleges face.

 

Teachers and students are getting hosed (IMO) by the need to pay for the guy giving out towels at the new Gold's Gym multiplex that just has to be there to entice students. :blink:

 

 

a

[asta]

But I'm curious about what the actual rates are --not the list price, but what students actually pay after financial aid. Have private colleges raised their prices somewhat but then made up for it with better financial deals to those students they really want?

 

This?

 

The report found that even though over the 2005-2006 to 2010-2011 five-year period the average published tuition and fees increased by around 24 percent at public four-year colleges and by 17 percent at private non-profit four-year institutions, the average net price declined in each sector after adjusting for inflation. During this five-year period the average net price for tuition and fees at public universities decreased from $2,080 to $1,540 in inflation adjusted dollars. In that time the net price at private colleges decreased from $12,750 to $11,320. This decrease in net price is due to an increase in the amounts of grant aid from all sources and from federal tax benefits. In 2009-2010 the total grant aid per full-time undergraduate student increased by 22 percent, mainly because of significant increases in federal Pell Grants and Veteran’s Benefits. In 2010-2011 students at these public institutions received an estimated average grant aid of $6,100, while those at private institutions received $16,000.

 

IMO, this is a specious argument, because not everyone gets the aid.

Edited December 15, 2010 by asta

[NoPlaceLikeHome]

Here are graphs for public and private schools.

 

It's kind of sad: you look at the bar graph and you think - "oh, 3% there, that isn't so bad." Then you look at the graph beneath it and realize that actually, the price, even adjusted for inflation, has actually tripled since 1981, and your head just spins.

 

 

a

 

I think it is very sad as well since soon only the haves will be able to go to college IMHO. My dh was able to send himself to college in the early 1980s since college was significantly cheaper then. I went in the early 80s as well and a private college was also much, much cheaper. If our country values education, then something should be done IMHO. I don't think college is for everyone and also believe in strong trade schools. I just think students should be able to go without going into debt for the rest of their lives.

Edited December 15, 2010 by priscilla
spelling

[Dana]

Teachers and students are getting hosed (IMO) by the need to pay for the guy giving out towels at the new Gold's Gym multiplex that just has to be there to entice students. :blink:

 

 

I don't have numbers for our school, but as a cc, we really don't have much in the way of bells & whistles to entice students. There are a couple new buildings - one on the other side of town for training (I think mostly paid for by the industries that want us training students for them to employ) and a new building so we can offer traditional classes rather than just continuing ed near me.

 

I'm an adjunct, so I don't see a lot of the day-to-day goings on, but we aren't residential so we don't have those staff. We do have an IT staff - but we also now offer courses online. The testing center has grown as more students take internet courses and need to be proctored. I do know that hours for staff have been cut and schedules shifted with the budget as tight as it is. We've avoided layoffs, but at our school, faculty are doing more with less and enrollment is through the roof. I've never had classes as full as this past year.

[regentrude]

Same here. State funding - despite being promised- gets cut. I am not talking about single percent, we are looking at 15-25% cuts!

Buildings are in horrible shape. Classes have wait lists because there are no lecture halls to put them in - enrollment at our school has increased dramatically over the last few years, but classroom space remains the same.

Retired professors are not replaced because we have a hiring freeze.

The gym is paid for by student activity fees which have nothing to do with tuition.

It is a vicious cycle: if the citizens are not willing to pay more taxes, the money for higher education has to come directly out of the student's families pockets.

[galtgrl]

It is a vicious cycle: if the citizens are not willing to pay more taxes, the money for higher education has to come directly out of the student's families pockets.

 

:rant:

You know, I'm just so tired of this way of thinking.

My parents did not pay as much in taxes when I was going to college as people living in that area do now.

In spite of that, my tuition to a public 4 year college was reasonable enough that I COULD pay for the tuition myself, had I worked summers full time and during the school year at least part time.

Luckily I didn't have to - my folks were able to swing it, and their income was barely at "middle class" levels.

The money ALWAYS comes out of the families pockets, one way or the other.

The tuitions have gone up way out of proportion with income. I think that's the point.

Edited December 15, 2010 by galtgrl

[regentrude]

The tuitions have gone up way out of proportion with income. I think that's the point.

 

And one of the reasons for the tuition increase is that state funding of public universities has been at best flat and in many cases an effective reduction over the last ten years. In addition, any endowments the universities had are hit by the financial crisis and give smaller returns. So the university's income aside from tuition has drastically reduced while operation cost has increased- which must cause a tuition increase.

Trust me, public universities are constantly cutting cost.

But if the state pays only a portion of what was allocated, the money has to come from somewhere.

 

Alternatively you can say that public education is not something the taxpayer should fund. Fine. Many experts are of the opinion that money invested in higher education is well spent and will benefit society in the long run.

[Gwen in VA]

So what is driving the high costs of college?

 

Benefits for employees?

Building maintenance? And gorgeous new facilities?

Frills (like climbing walls)?

Shrinking course loads for professors?

Extras that uni's need to provide for unprepared students?

 

I'm off to eat dinner, but I'm sure we can come up with a dozen more possibilities.....

 

So what is driving the incredible increases in college costs?

[FloridaLisa]

So what is driving the high costs of college?

 

Benefits for employees?

Building maintenance? And gorgeous new facilities?

Frills (like climbing walls)?

Shrinking course loads for professors?

Extras that uni's need to provide for unprepared students?

 

I'm off to eat dinner, but I'm sure we can come up with a dozen more possibilities.....

 

So what is driving the incredible increases in college costs?

 

Other possibilities:

 

*Increased legal expenses/liability insurance

*Costs of building to handle the increased numbers of students (my law school is 3x the size it was 40 years ago. It was virtually the same for 20 years, but the last 20 have seen two HUGE additions.

*sports programs

 

Lisa

 

ETA: The more I think about it, the more I think building and renovations have driven up costs. The school I'm most familiar with (our state school and alma mater) has undergone ENORMOUS construction projects over the last 25 years.

[regentrude]

So what is driving the high costs of college?

Benefits for employees?

 

 

That is certainly be a contributing factor: because due to the financial crisis all investments tanked, yet the schools have to fulfill their pension obligations.

As a consequence, they have also increased employee contributions.

 

Building maintenance? And gorgeous new facilities?

 

Forgive me if I have a hysteric laughing fit about this one.

Our building's entryway is propped up with 4x4s so it does not fall down. I just was four weeks without heat in my office (indoor temps in the 50s) because they have only two maintenance people for the campus. If it rains it leaks. Steam leaks through the walls and stuff molds.

Expensive maintenance? give me a break.

 

Frills (like climbing walls)?

 

Not here. And often these come out of student activity fees.

 

Shrinking course loads for professors?

 

Nope. One of the classes I teach used to have 25 students and is now at 80. We have huge enrollment increases, but don't get a penny more from the state. We can't hire people - so if anything, teaching loads are increasing.

 

Extras that uni's need to provide for unprepared students?

 

 

not sure.

[Stacy in NJ]

I think it is very sad as well since soon only the haves will be able to go to college IMHO. My dh was able to send himself to college in the early 1980s since college was significantly cheaper then. I went in the early 80s as well and a private college was also much, much cheaper. If our country values education, then something should be done IMHO. I don't think college is for everyone and also believe in strong trade schools. I just think students should be able to go without going into debt for the rest of their lives.

 

Actually, there is a very economical way to earn a college degree with lower out of pocket expense. Many, many community colleges around the country offer a plethora of AA degrees for really reasonable tuition and fees. Most state four year schools honor those credits and degrees. Dual credits are also possible for some qualified high school students for nearly no tuition.

 

The private sleep-over colleges may not be possible for low income students without scholarships, grants, or loans, but the education is still available to those that want it.

[Mom0012]

Here are graphs for public and private schools.

 

It's kind of sad: you look at the bar graph and you think - "oh, 3% there, that isn't so bad." Then you look at the graph beneath it and realize that actually, the price, even adjusted for inflation, has actually tripled since 1981, and your head just spins.

 

 

a

 

Yes, the tuition at the state university I graduated from 16 years ago has increased from $1,200 per semester to over $8,000 per semester. Unbelievable!

 

We've invested in the prepaid tuition program for our kids and it's worked out beautifully for my sdd. She got the deal of the century. I do wonder if it will be as effective for our younger ones though now that I keep hearing of all the ridiculous "fees" that are being added on top of tuition at many universities. So, yes, we know what the tuition will be, but by the time my kids get to school, will the fees equal the tuition? I can only hope not.

 

Lisa

[Mom0012]

Actually, there is a very economical way to earn a college degree with lower out of pocket expense. Many, many community colleges around the country offer a plethora of AA degrees for really reasonable tuition and fees. Most state four year schools honor those credits and degrees. Dual credits are also possible for some qualified high school students for nearly no tuition.

 

The private sleep-over colleges may not be possible for low income students without scholarships, grants, or loans, but the education is still available to those that want it.

 

This is how we hope to get our kids through school in combination with what we've invested in a prepaid tuition plan. I am so afraid that the universities will stop honoring the agreements they have with the CC to accept credits or that the CCs will no longer be so easy to access by the time my kids are ready though because so many people are going this route.

 

Lisa

[Mom0012]

Other possibilities:

 

*Increased legal expenses/liability insurance

*Costs of building to handle the increased numbers of students (my law school is 3x the size it was 40 years ago. It was virtually the same for 20 years, but the last 20 have seen two HUGE additions.

*sports programs

 

Lisa

 

ETA: The more I think about it, the more I think building and renovations have driven up costs. The school I'm most familiar with (our state school and alma mater) has undergone ENORMOUS construction projects over the last 25 years.

 

Yes, this is the case with the state university I mentioned (where tuition has risen from $1200/semester to $8,000). The place is almost unrecognizable because of all the construction that has taken place.

 

Lisa

[Stacy in NJ]

From the Cate Institute:

 

It is matter of supply and demand. More and more Americans have sought a college education, which has pushed prices higher. Ordinarily, such upward pressure would be restrained by consumers’ willingness and ability to pay, but as government subsidies have helped absorb tuition increases, the public’s budget constraint has been lifted. Peter Wood, a professor at Boston University noted that federal subsidies “are seen by colleges and universities as money that is there for the taking . . . tuition is set high enough to capture those funds and whatever else we think can be extracted from parents.â€10

 

One can look at average cost data to see the inflationary effect of rising student aid. From 1987 to 2007, there was a strong upward trend in average per-student costs of private and public universities (tuition, fees, and room and board). However, if you subtract from those costs federal grants, loans, and tax benefits, there has been only a modest increase over two decades.

 

Consider four-year private colleges and universities. The average real cost (in 2006 dollars) per student rose from $18,122 in 1986 to $30,497 in 2006, a 68 percent increase. But students didn’t bear that large increase because of grants, loans, and tax benefits. After these benefits, the cost grew from $10,943 to $14,158, a much more modest 29 percent increase. A similar pattern holds for price increases and public institutions.

[Stacy in NJ]

Yes, but dental benefits are subsidized. More subsidies = more cost.

[galtgrl]

From the Cate Institute:

 

It is matter of supply and demand. More and more Americans have sought a college education, which has pushed prices higher. Ordinarily, such upward pressure would be restrained by consumers’ willingness and ability to pay, but as government subsidies have helped absorb tuition increases, the public’s budget constraint has been lifted. Peter Wood, a professor at Boston University noted that federal subsidies “are seen by colleges and universities as money that is there for the taking . . . tuition is set high enough to capture those funds and whatever else we think can be extracted from parents.”10

 

One can look at average cost data to see the inflationary effect of rising student aid. From 1987 to 2007, there was a strong upward trend in average per-student costs of private and public universities (tuition, fees, and room and board). However, if you subtract from those costs federal grants, loans, and tax benefits, there has been only a modest increase over two decades.

 

Consider four-year private colleges and universities. The average real cost (in 2006 dollars) per student rose from $18,122 in 1986 to $30,497 in 2006, a 68 percent increase. But students didn’t bear that large increase because of grants, loans, and tax benefits. After these benefits, the cost grew from $10,943 to $14,158, a much more modest 29 percent increase. A similar pattern holds for price increases and public institutions.

__________________

 

 

 

:iagree:

Great info.

Thank you!

Didn't the federal government also just increase its involvement in student loans? As in, they have basically taken it over?

Adding more distortion to the market....oh goody.

[asta]

I think "reason for increase in tuition" needs to not be defined as "less funding from the state".

 

I believe it is just as reasonable to believe "reason for increase in tuition" can be "we are able to get it from the students/federal government".

 

Not all universities had their budgets dramatically slashed prior to increasing their tuition at an alarming rate. Certainly, most universities began the "upward trend" of tuition prior to the most recent "market crash" that trashed endowments.

 

I have no statistics to back myself up, but I really believe colleges/universities make their choices. When I was attending uni, I lived in the "old" section of campus. Maintenance was slow in coming (eg: Regentrude's experience). Now, down on the other side of campus, where the sports teams were? There was money to spare! Ditto for the business college. Which was perfectly fine and functional (and a whopping 20 years old). So they tore it down and built a new, shiny one (same size). Amazing how many of the sports players were business majors...

 

And one final thing: it may be "student fees" that pay for things like new gyms etc., but students aren't allowed to opt out of those fees. So they might as well be tuition.

 

 

d

[creekland]

Actually, there is a very economical way to earn a college degree with lower out of pocket expense. Many, many community colleges around the country offer a plethora of AA degrees for really reasonable tuition and fees. Most state four year schools honor those credits and degrees. Dual credits are also possible for some qualified high school students for nearly no tuition.

 

The private sleep-over colleges may not be possible for low income students without scholarships, grants, or loans, but the education is still available to those that want it.

 

Just want to note that some private schools with merit and need-based aid can be less costly than cc with a better education. It cost us more per credit (almost more overall) to send my high school junior to cc for two classes than it did to send my oldest to a 4 year private college and my junior lived at home while my senior is a resident. Of course, that cost varies since our state does not give low cost tuition for dual enrolled students. We pay full fare.

 

Then too, what I'm finding out for this junior son (who wants to get into med school) is that MED SCHOOLS frown upon cc courses for pre-med classes (not others outside the discipline, but those needed for pre-med). Chances are, when he goes to a 4 year college he will RE-TAKE the science courses there to not poorly affect his med school apps down the road even though the state school would give credit for his cc courses (most of the other schools he is interested in will not give credit for the courses).

 

Then too, I've been reading the horror stories on here from those at state schools and how difficult it can be to get required courses. It's not stopping us from considering our state schools, but I'm keeping it in mind.

 

The cc route can be less expensive for some students who want a basic degree - esp from a state school, but for others who want something specific or who qualify for merit and/or need based aid, it might not be.

 

My advice to those with seniors is to carefully consider all options based on the student and any finances offered. My boys are allowed to apply pretty much anywhere, but they know the financial package will have a big say in where they actually go. We were VERY pleasantly surprised with my oldest.

[Rosie_0801]

And one final thing: it may be "student fees" that pay for things like new gyms etc., but students aren't allowed to opt out of those fees. So they might as well be tuition.

 

 

Over here, we are now allowed to opt out of those fees and we're enjoying the corresponding loss of services.

 

Rosie

[Janice H]

Now Hiring:

 

"The incumbent works to ensure that the campus fulfills or exceeds to the maximum extent possible, relevant policies, commitments, and regulations such as the Climate Action Compact, the American College and Universities Presidents Climate Commitment, Assembly Bill 32, and the University of California Policy on Sustainable Practices "Climate Protection Practices."

 

Many more where these came from at http://www.higheredjobs.com

 

How could this add value to student education?

[justamouse]

I heard from a girl yesterday who is heading to a for-profit school. She's taking on $125,000 in debt for a culinary degree. I asked her if she was sure she wanted the equivalent of a house mortgage in college loans and she assured me she did plus she couldn't wait to go. Then I asked what starting salaries for chefs were and she said, "pretty low, but it's what I want to do."

 

I didn't feel comfortable saying more. She was very excited. It's sad.

 

 

Oh, man, that's so sad. Most chefs I know worked themselves up and paid nothing for it. I know some big ones. And, the funny part is that all three started out in the same joint.

[swimmermom3]

So what is driving the high costs of college?

 

Benefits for employees?

Building maintenance? And gorgeous new facilities?

Frills (like climbing walls)?

Shrinking course loads for professors?

Extras that uni's need to provide for unprepared students?

 

I'm off to eat dinner, but I'm sure we can come up with a dozen more possibilities.....

 

So what is driving the incredible increases in college costs?

 

Gee, I don't know about VA, but here in Oregon we have absolute necessities like the Matthew Knight Arena. And if I remember right, U of O has an incredibly luxurious facility dedicated strictly for the tutoring of 520 student athletes. Yes, I know there are major private contributions, but we are still talking about plain old excess.

[creekland]

Oh, man, that's so sad. Most chefs I know worked themselves up and paid nothing for it. I know some big ones. And, the funny part is that all three started out in the same joint.

 

I really can't imagine how she's going to pay back her loans and still have a reasonable life. Our school lets these "for profits" in to give their song and dance and they are pretty slick at talking about the few success stories, but never talk about the finances other than to say, "you can get loans that don't need to be paid back until you're earning a salary." I wish they had to supply all data on all students - just things like how many graduate, what the average loan size is, how many find employment in their field within 6 months of graduation and the average starting salary of grads. None of that is supplied in the group setting.

 

In the 11th grade Economics class (required class) kids are forced to work out a budget based on the starting salary of an entry level job in their field. They are supposed to work in student loans, housing, clothing, and all the essentials, etc, but sometimes I wonder how many take it seriously? That teacher definitely tries to make them see reality and how far the paycheck might NOT stretch, yet students are still swayed by a nice "show."

[katilac]

Oh, man, that's so sad. Most chefs I know worked themselves up and paid nothing for it. I know some big ones. And, the funny part is that all three started out in the same joint.

 

Yes, I was just about to post something similar; this is one of the few industries that is still pretty wide open, no degree required. And I absolutely cringe when I see people who have never worked in a commercial kitchen starting a culinary program . . .

[Barry Goldwater]

I really can't imagine how she's going to pay back her loans and still have a reasonable life.

 

 

She's not going to have a reasonable life..and govt. student loans can almost never be discharged, even in a personal bankrupcy. It's not like consumer debt or even mortgage debt (in most states). They're hers forever...

 

It reminds me of when I heard that poultry farmers that work for Tyson, et.al were building $250,000 broiler barns to Tyson specifications (required to do business with them), and could only expect to earn $30-40K per year from raising and selling the birds. It makes absolutely no sense...

[creekland]

She's not going to have a reasonable life..and govt. student loans can almost never be discharged, even in a personal bankrupcy. It's not like consumer debt or even mortgage debt (in most states). They're hers forever...

 

It reminds me of when I heard that poultry farmers that work for Tyson, et.al were building $250,000 broiler barns to Tyson specifications (required to do business with them), and could only expect to earn $30-40K per year from raising and selling the birds. It makes absolutely no sense...

 

:iagree: But what more can I do? She's not my daughter (or relative of any sort). I just see her in school once in a while and happened to ask what her post high school plans were (which I ask of many seniors). I tried to discuss finances with her, but she has stars in her eyes and was so excited to have been accepted. Do these schools ever reject anyone???

 

I wish there were a way to show them other options in a way that would help them understand, but I can't think of one.

 

She's excited to be going to culinary school next year and can't even comprehend what the loans mean I think. It really reminds me of a student last year who was planning to take out $200,000 in loans to go to a prestigious music college and wondered why anyone would turn down the opportunity or even go to "any" college "beneath" their ability over a little thing like money. Yes, this was a real conversation (I posted about it back when it happened), and no, I didn't get any further with her talking about reasons it might not be a good idea.

 

I'm not anti-loan. I think loans of <60,000 (total for 4 years) are sometimes a good idea pending major/profession and college, but I can't fathom $100,000+ for culinary or music (or several other lower paying professions). To me, the payback has to be there in a reasonable amount of time. If the degree will gain me more $$ than I would have without it to where the loans can be paid back within 5 years, it's ok (so for $60,000 one would need an extra $12-15,000/year (allowing for interest) more than would have been earned without THAT degree). $200,000 would need an extra $40,000 + interest. I can't see that coming from a music degree, but maybe I'm wrong.

[Barry Goldwater]

:iagree: But what more can I do? She's not my daughter (or relative of any sort). I just see her in school once in a while and happened to ask what her post high school plans were (which I ask of many seniors). I tried to discuss finances with her, but she has stars in her eyes and was so excited to have been accepted. Do these schools ever reject anyone???

 

 

Unless you plan to open a 5 star restaurant and offer her a job for more than she's worth, there's probably nothing you can do...sorry, I wish I had a better answer, but some can only learn from experience...she may never get it.

 

I'm not anti-loan. I think loans of <60,000 (total for 4 years) are sometimes a good idea pending major/profession and college, but I can't fathom $100,000+ for culinary or music (or several other lower paying professions). To me, the payback has to be there in a reasonable amount of time. If the degree will gain me more $$ than I would have without it to where the loans can be paid back within 5 years, it's ok (so for $60,000 one would need an extra $12-15,000/year (allowing for interest) more than would have been earned without THAT degree). $200,000 would need an extra $40,000 + interest. I can't see that coming from a music degree, but maybe I'm wrong.

 

I'm not anti loan either. As Robert Kiyosaki says, "loans that make you money are good loans to take...loans that cost you money are bad loans to take." If there was a good return on this student loan in anticipated wages earned in the future, it would be smart to take it. But there is NO WAY she will ever see a decent return on that $200k, particularly when you calculate in interest, opportunity cost, etc. IMHO.

 

Not enough young people view eduction as an investment, particularly when they don't have the means to afford an education 'just for the sake of being educated.'