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NYT Article: $200k debt for Master's Degree in Communication Studies


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Please forgive me this rant.

 

http://www.nytimes.com/2011/12/29/business/young-women-go-back-to-school-instead-of-work.html

 

Boy this NYT article teed me up today. It is ostensibly about how women are "taking advantage of the economic downturn", and "upgrading their skills" with collegiate education, more so than men. Be that as it may, I saw something else entirely in the article.

 

They interviewed a woman with a BA in Communication Studies from a small pricey LAC (Wartburg College), who in a couple of years, could only find part-time employment as a barista at Starbucks. So, she decided to enroll in graduate school to get a master's degree in Communication Studies. She anticipates graduating with a total college debt of $200k, hoping to secure a job doing PR work for an non-profit.

 

What, exactly, is Communication Studies, and why is a four year undergraduate degree so useless that she can only find a part-time job at Starbucks with it? Did anyone mention her job prospects during her tenure at the LAC? I wonder how the rest of her graduating cohort faired, and if that information is relayed to incoming students?

 

Now, I, as a WTM devotee, understand the abstract value of education gratia education, but what these private colleges are doing is just shameful. In the article, the student explicitly states that her desire to go to graduate school is strictly for vocational reasons. I believe there were threads earlier asking about an education bubble, and this is just it: $200k in debt (plus who knows how much more savings spent), in order to secure a job that only requires decent writing skills, and some knowledge of business. These are skills that could be acquired with a two year internship after high school, should such things exist.

 

I don't really blame this student for her predicament, seems like the fundamental problem is that there aren't enough jobs out there for the college graduates who want them, or perhaps, that there isn't good communication between employers and potential employees about which jobs are available. The employers, needing to select a few candidates from the multitudes who apply, naturally only select those with advanced degrees. But the students, following all conventional wisdom, get stuck with an enormous debt burden and dubious job prospects. I'm not quite sure what she should have done. Going to a much cheaper instate school would be a more economical choice, if she could get in. Had she not gone to college at all, her job prospects wouldn't have been better.

 

I hope the NYT does a followup in a couple of years -- I'd really like to know how her story turns out, and I hope it does turn out well for her.

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Please forgive me this rant.

 

http://www.nytimes.com/2011/12/29/business/young-women-go-back-to-school-instead-of-work.html

 

Boy this NYT article teed me up today. It is ostensibly about how women are "taking advantage of the economic downturn", and "upgrading their skills" with collegiate education, more so than men. Be that as it may, I saw something else entirely in the article.

 

They interviewed a woman with a BA in Communication Studies from a small pricey LAC (Wartburg College), who in a couple of years, could only find part-time employment as a barista at Starbucks. So, she decided to enroll in graduate school to get a master's degree in Communication Studies. She anticipates graduating with a total college debt of $200k, hoping to secure a job doing PR work for an non-profit.

 

What, exactly, is Communication Studies, and why is a four year undergraduate degree so useless that she can only find a part-time job at Starbucks with it? Did anyone mention her job prospects during her tenure at the LAC? I wonder how the rest of her graduating cohort faired, and if that information is relayed to incoming students?

 

Now, I, as a WTM devotee, understand the abstract value of education gratia education, but what these private colleges are doing is just shameful. In the article, the student explicitly states that her desire to go to graduate school is strictly for vocational reasons. I believe there were threads earlier asking about an education bubble, and this is just it: $200k in debt (plus who knows how much more savings spent), in order to secure a job that only requires decent writing skills, and some knowledge of business. These are skills that could be acquired with a two year internship after high school, should such things exist.

 

I don't really blame this student for her predicament, seems like the fundamental problem is that there aren't enough jobs out there for the college graduates who want them, or perhaps, that there isn't good communication between employers and potential employees about which jobs are available. The employers, needing to select a few candidates from the multitudes who apply, naturally only select those with advanced degrees. But the students, following all conventional wisdom, get stuck with an enormous debt burden and dubious job prospects. I'm not quite sure what she should have done. Going to a much cheaper instate school would be a more economical choice, if she could get in. Had she not gone to college at all, her job prospects wouldn't have been better.

 

I hope the NYT does a followup in a couple of years -- I'd really like to know how her story turns out, and I hope it does turn out well for her.

My first degree was a similar degree which was, of course, completely useless as technology changed rapidly from the 80's onward. However, I only paid $10 per credit hour as a child of a disabled veteran and got out of college with no debt.

 

And that was in the high-flying 80's when the economy was great!

 

This person is nuts going into massive debt for a relatively useless undergrad degree and then multiplying that error with another low utility Graduate degree! 200K?

 

Oh my Lord.

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I do hold the student partly responsible for her debt - she did take it and should have done the math prior to taking the debt to understand the ramifications of that debt load and her potential for earning once graduated.

 

Wartburg is $39,000 a year with room & board, so without any scholarships or grants, someone is looking at $156,000 to get their bachelor's in four years - that's darn steep for a BA, where the average graduate today is starting with a salary (if they find a job) of about $32,000. The earnings to debt ratio simply makes the degree more expensive than it will ever be worth.

 

For her to continue on the same path, hoping to find a non-profit job? Really? How will she ever pay off $200,000 in a sector notorious for low pay - I know a number of people working at NP's and unless you're an officer, you're looking at less than $40,000 a year IF you're lucky to make more than $30,000....and few NP's require a Master's, most are happy if you have a BA and can read and write.

 

$200,000 at 5% on a 20-year repayment term is $1300 a month - how will she EVER pay that back? In attempting to pay it, she'll have to put off retirement savings, buying a house, saving for a rainy day, having kids, saving for college for them - she'll really be a slave to her debt, for what?

 

A friend of mine - her daughter went to school and got a degree in photography and has only $18,000 in debt and is struggling to make the payments each month and that's only $200 a month because she can't find a job within photography and is working as a babysitter right now. When I've chatted with her, she told me that she's lucky she didn't take more debt - it would have been easy to, the school's encourage the students to take loans to pay for their housing, food, equipment, etc. and she has friends with the same degree who are in debt for 4x as much because they kept taking out the max they could, even though they didn't need it!

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I'm sure her LAC-gained critical thinking skills will eventually be valued by the right employer and she'll be able to pay off her debt. I'd like to hear the rationale for not continuing to work part-time though...seems like she would gain more contacts if she kept a job. Perhaps she should move to working in a health care club or a bank...however I think she may do better getting on with the police force in a major city.

Can you even imagine the impact a $200,000 debt at the outset will have upon her life and choices?

 

She might pay it off by retirement age.

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Guest Charley

Did anyone mention her job prospects during her tenure at the LAC? I wonder how the rest of her graduating cohort faired, and if that information is relayed to incoming students?

 

 

Based on my own college experience, I doubt it. Colleges need students to make money, and if they tell students the truth ("It is unlikely you will get a job with this degree, and if you do, it will pay less than what you would make after four years in a job that requires no degree.") they would have too few students to keep their departments and jobs.

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Restraunts are filled with servers with degrees. It isn't just today's economy, there are many degrees that are virtually useless. To pretend otherwise is costly. I also think it is more common than I realized. This article could have been written about my dds best friend. She told us she was applying to the undergrad program because she cant afford to start paying her student loans yet. I wonder if she will ever be able.

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Tigger: $200,000 at 5% on a 20-year repayment term is $1300 a month - how will she EVER pay that back? In attempting to pay it, she'll have to put off retirement savings, buying a house, saving for a rainy day, having kids, saving for college for them - she'll really be a slave to her debt, for what?

 

 

I posted the same thing below you and then read this, but thank you for actually doing the math!

 

Yes, this is utterly overwhelming and totally unnecessary! She will be living in her parent's basement until her 60's!

 

A friend of mine - her daughter went to school and got a degree in photography and has only $18,000 in debt and is struggling to make the payments each month and that's only $200 a month because she can't find a job within photography and is working as a babysitter right now. When I've chatted with her, she told me that she's lucky she didn't take more debt - it would have been easy to, the school's encourage the students to take loans to pay for their housing, food, equipment, etc. and she has friends with the same degree who are in debt for 4x as much because they kept taking out the max they could, even though they didn't need it

 

 

This is the story of more than half of all recent college graduates right now.

 

My daughter went to a college class last summer and lived in the dorms for two weeks. Some recent grads were running much of the administrative part of the program. None of them had decent jobs that paid enough to get an apartment because they couldn't find any. They were living together in large groups (5+) and trying to eke out an existence on Starbucks and other types of part time jobs.

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Restraunts are filled with servers with degrees. It isn't just today's economy, there are many degrees that are virtually useless. To pretend otherwise is costly. I also think it is more common than I realized. This article could have been written about my dds best friend. She told us she was applying to the undergrad program because she cant afford to start paying her student loans yet. I wonder if she will ever be able.

My friend's husband - with a master's degree, by the way - has been out of work for 2.5 years. He has taken part time and handyman jobs here and there. He was assisting a guy in setting up an event planning company that will do only occasional events. They had over 1000 applications for jobs such as dishwashing and serving, and a large number of those people had multiple advanced degrees.

 

You have people with master's and doctorates applying to be dishwashers today. What in the WORLD is this woman thinking with her plan to have $200,000 debt???

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is that jobs that were once pretty dependable in terms of employment prospects are being hit really hard. My son graduated at about the same time as this girl (from college). He worked in a coffee shop for a year. He was pursuing a job that did finally work out for him, so he is settled into a career now, but not all of his friends have been so lucky - including the ones that made seemingly "safe" choices - like getting teaching degrees.

 

About 6 months into his coffee stint, he was starting to talk about "needing to make something happen" like this girl. I'm glad he didn't decide to go back to school. He didn't just love school anyway. But I understand these kids want to do SOMETHING they can be proud of, and school has been a way that they achieved something in the past. All of their lives, they had the idea that if they were hard working in school, they would build a record that would lead to good things.

 

Very sad for them.

 

I can't imagine having to play back a $200,000 education load, regardless of my potential future income. That would be so depressing.

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I don't really blame this student for her predicament, seems like the fundamental problem is that there aren't enough jobs out there for the college graduates who want them, or perhaps, that there isn't good communication between employers and potential employees about which jobs are available. The employers, needing to select a few candidates from the multitudes who apply, naturally only select those with advanced degrees. But the students, following all conventional wisdom, get stuck with an enormous debt burden and dubious job prospects. I'm not quite sure what she should have done. Going to a much cheaper instate school would be a more economical choice, if she could get in. Had she not gone to college at all, her job prospects wouldn't have been better.

 

I just can't work up much sympathy. Yes, it stinks she can't get a job even though she has an advanced degree. However, she's an adult who chose to spend a lot of money on a degree where there are few career prospects. Not much has changed in the past twenty years. There were jokes about McDonalds and [insert LAC degree here] when I was in high school.

 

While I was in college, I sat in classes with liberal arts majors who looked down on business and engineering degrees. If my kids want to pursue LA degrees, I'll support them so long as they're honest with themselves about career opportunities and salary expectations. The highest paid majors are those in STEM and business fields. Money isn't everything, but being able to pay the bills sure is nice.

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$200,000 at 5% on a 20-year repayment term is $1300 a month - how will she EVER pay that back? In attempting to pay it, she'll have to put off retirement savings, buying a house, saving for a rainy day, having kids, saving for college for them - she'll really be a slave to her debt, for what?

 

 

Oh, she won't be on a 20-year repayment plan, more like 30-year or 40-year. The most probable outcome will be that she will be on the income-based repayment plan and may not pay much until her salary goes up. I think there are even new rules being debated that you will pay on your student loans until your own kids go to college, and the balance might be forgiven as long as you start paying on their college. :tongue_smilie:It is a vicious cycle that will keep younger students paying for education for the rest of their lives.

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Well, a degree in communication studies could be marketed for a decent job ---and some marketing should be part of communications studies. During the economic downturn, our communications director was let go and the whole organization has suffered for it. Imo, we lost more $$ from mediocre and uncoordinated communication than her salary would have cost. The major is certainly not worthless, but it is one that is vulnerable during a recession.

 

As for the $200,000 indebtedness--that is the student's choice. She's a grown up who should be able to add, subtract, divide, and multiply. That and some common sense is all it takes to see it's not a good choice to accrue $200,000 in debt for a graduate degree when your goal is to work in the nonprofit sector.

 

I had something like $10,000 debt coming out of grad. school and went directly to work full time, but on a social worker's salary,that $10,000 was like an albatross until I got it paid off. I probably could have worked more hours and graduated a little later without the debt if I'd been more realistic.

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I'm 45 and I graduated 20 years ago with $85K in debt. Yes, it was depressing, but I did pay it off in about 7 years. True, my friends and family joked that I was Mother Teresa and only owned 2 saris, and I had to request forbearance on some of the loans for six months, but it was not the end of the world. That said, my course of study was law and MBA, so there were some fair prospects for making money. And my undergrad (at a state school) was only $10K of my debt.

 

I remember how I felt the day I realized how much I'd need to earn in order to service my student loans (interest went as high as 12%) and also pay living expenses. I don't think most young people really understand how to do such computations - at least, not before they are already committed to a tuition bill. I recommend that every young person take a mini-course in finance so they can make informed decisions.

 

I hate debt and don't have any now. However, I do think having some debt is somewhat of a motivator. Maybe I don't like the way my boss talks to me, and I'd rather roll into the office at 10am rather than 8am. But I kinda need that paycheck, so I figure out how to deal. I stay employed, learn to swim so I don't sink, and I'm that much more attractive to the next employer.

 

I wonder how student debt trends would look if the schools themselves were doing the lending. What's unfair about it is that the schools have no downside. They get their money up front, and don't have to pay it back when their "valuable" education doesn't deliver. I always get a chuckle when my alma mater tries to hit me up for donations. Hello? You put me in hock and jerked me around and never showed an ounce of concern for my future. Now you want MORE of my money? HA!

 

If this post appears to have multiple personalities, it's because I see both sides. I don't regret my semi-expensive education, but I do feel colleges are pandering and exploiting the unwary.

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Our daughter is entering college in the fall at a state school, double majoring in performing arts and ____________(psychology or literature). We're glad she's following her passions. The university has a good reputation for those majors, but not "elite" by any stretch of the imagination. However, she's aware that she is unlikely to ever make much money and doesn't fancy being in debt, so we are also happy that in-state tuition is relatively affordable ($6000 per year). I am puzzled by the amount of people I know who strongly encourage their kids to go to expensive private schools. I guess I just don't think that it will make that much of a difference for most people in the long run, except for the damage it does to the pocket book....

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Not directly on topic but relevant...

 

Earlier today I was chatting with my son and his friend whom he has known since elementary school. Both boys are only children. Both have fathers who work long hours in their respective professions. Both have families that value education.

 

Interestingly, both boys have goals of finishing undergrad without debt. But neither is headed into a profession that pays well. They know it. They both have watched their fathers health, sanity and general happiness suffer at times because of the demands of work. They want something else.

 

I say good for them.

 

My son's friend commented on friends in engineering and business programs not because they want to be there but because of familial pressure to make money. One wonders if they will finish these programs. Not everyone is meant to be a STEM or business major!

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As someone with a BS in Communications (oh, how true it is), the degree is most certainly marketable. Part of my degree required TV/Radio, marketing, writing and speech writing.

 

A bigger part of my degree required a lot of theory as well... the how's and why's of communications, how to target a message, etc. (which was necessary in all parts of the discipline).

 

I graduated in 1990, though. When I graduated, it was not unheard of to make $100k or more with a Master's degree in the field (PR departments of corporations, non-profits, policy makers, marketing firms). I made (at the height of my career, now on hold) $125,000 with my BS (chuckle), and commiserate experience. I also have a BS in Political Science...

 

My first job paid $19,000 in DC, my 2nd job started at $24,000 and I finished there making $30,000. by 1993 I was hired and started at $36,000... by 1997 I was making $48,000. I struck out on my own and was quite successful. My dh really wishes I would do it again... my college boyfriend (a USNA grad, and EE major) was quite ummm frustrated that I made as much money as I did. He thought it was a worthless degree... but people who can speak and write well, handle PR and marketing are almost always in demand.

 

I think she paid too much for her undergrad, though... and isn't really looking for jobs outside her area. The main jobs in communications are in big cities... you have to be willing to travel. Heck, even the major NP's are located in DC (or have offices in DC), because they *need* to be close to the policy makers. Positions in my field are always opening up. Heck, I still get phone calls from time to time from people who I used to work with to see if I'd like to pick up some freelance work.

 

IMO, $200,000 in debt is too much for any degree... not just communications. A degree in communications could have come from almost anywhere. With the right experience it can pay generously. Now, the Master's program should be done at a well respected university in the field like Penn State, Georgetown, or Wake Forest...

 

Just coming to the defense of my area of study :D

Edited by LisaK in VA
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I don't really blame this student for her predicament...But the students, following all conventional wisdom, get stuck with an enormous debt burden and dubious job prospects. I'm not quite sure what she should have done. Going to a much cheaper instate school would be a more economical choice, if she could get in. Had she not gone to college at all, her job prospects wouldn't have been better.

.

 

:confused:

Of course it is the student's responsibility to make an informed decision.

Nobody else can be blamed.

Anybody who goes into this ridiculous amount of debt should have spent more energy researching the job market and exploring her options.

PR for a non-profit may be a neat job, but even if she got one she would never recover her investment.

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I wonder how student debt trends would look if the schools themselves were doing the lending. What's unfair about it is that the schools have no downside. They get their money up front, and don't have to pay it back when their "valuable" education doesn't deliver.

 

I think this is a great idea, and a very good insight.

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As someone with a BS in Communications (oh, how true it is), the degree is most certainly marketable. Part of my degree required TV/Radio, marketing, writing and speech writing.

 

 

I graduated in 1990, though.

 

Just coming to the defense of my area of study :D

 

I think it is vastly more difficult to break into the field now though, unless you know insiders. My SIL has a Communcations degree (granted, it is a BA, not a Master's) and she has been trying to break into Marketing/PR for 6-7 years now. She even moved to L.A. to have more opportunities, but they just aren't there. She has gotten pretty close a couple of times (she worked for the legal dept. of MTV), but she is always beat out for PR by somebody's son or cousin. My SIL does have a full time job, but it is not in the field she wants and I know she is very discouraged by the whole experience.

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hmm, wants to do pr for a non-profit. sounds like she'll be paying off her debt really fast. (not.)

 

one thing I've done with my kids - made them think through *what* they will do with their degree. lots of interesting things out there to study that don't pay squat.

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I think it is vastly more difficult to break into the field now though, unless you know insiders. My SIL has a Communcations degree (granted, it is a BA, not a Master's) and she has been trying to break into Marketing/PR for 6-7 years now. She even moved to L.A. to have more opportunities, but they just aren't there. She has gotten pretty close a couple of times (she worked for the legal dept. of MTV), but she is always beat out for PR by somebody's son or cousin. My SIL does have a full time job, but it is not in the field she wants and I know she is very discouraged by the whole experience.

 

Honestly, that's not a new phenomenon - who you know is often much more important than what you know, has been for time immemorial.

 

The pp graduated in 1990 and for anyone who doesn't remember, that was the height of the 1988-1993 recession, which was very similar for jobs as we have in today's economy.

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I think it is vastly more difficult to break into the field now though, unless you know insiders. My SIL has a Communcations degree (granted, it is a BA, not a Master's) and she has been trying to break into Marketing/PR for 6-7 years now. She even moved to L.A. to have more opportunities, but they just aren't there. She has gotten pretty close a couple of times (she worked for the legal dept. of MTV), but she is always beat out for PR by somebody's son or cousin. My SIL does have a full time job, but it is not in the field she wants and I know she is very discouraged by the whole experience.

 

Did your SIL do any internships? They are quite competitive, but really help get those contacts and experience going. I know someone who has a firm in LA -- if she wants to work in direct marketing (which can lead to other things -- but it's EXPERIENCE), I can forward her resume' to someone. My cousin works for a large firm in NYC as well...

 

Sometimes you have to start with experience in the general field while you look for the job in the specific field. The skills translate. I went from political NP to candidates to charitable NP to B2C and B2B. I've done event planning and convention planning... you have to start somewhere to get anywhere in this field.

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Honestly, that's not a new phenomenon - who you know is often much more important than what you know, has been for time immemorial.

 

The pp graduated in 1990 and for anyone who doesn't remember, that was the height of the 1988-1993 recession, which was very similar for jobs as we have in today's economy.

 

That may be true, but I guess I felt that the PP made it seem like it was easy to break into the PR business, and my point was just that our family's experience has been very different even in a major metro area (and my SIL is not unconnected by any means, she just doesn't have the right connections in the entertainment industry).

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I think one big change today is that kids (they are kids still) aren't really scared of debt; when I was graduating high school and looking at how to pay for college, it was drilled into our heads - from parents to guidance counselors - to take as little debt as possible, we'd have to pay it back! Student loans were considered more "a fact of life" that many had to use, they were not viewed as "a way of life" that everyone had to have, the more the better!

 

I see many of my friends, the ones in the past who graduated with me and did everything in their power to avoid debt in college, not having any conversation with their kids about how to finance college without crushing debt - something's changed in the dynamic, we're no longer trying to avoid debt, but somehow it's now a way of life, its expected, its routine and its going to crush the next generation if we don't change the attitude about financing college....

 

This whole new idea, that you'll not really have to pay it back because you'll get sliding scale payments - seriously? Take on too much debt and just pay a small amount? What? How is that teaching responsibility? How is that even holding someone accountable for choices they make and obligations they agree to? Finance college up the wazoo and don't worry about it, you really won't have to pay it back? ....sigh....

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Did your SIL do any internships? They are quite competitive, but really help get those contacts and experience going. I know someone who has a firm in LA -- if she wants to work in direct marketing (which can lead to other things -- but it's EXPERIENCE), I can forward her resume' to someone. My cousin works for a large firm in NYC as well...

 

Sometimes you have to start with experience in the general field while you look for the job in the specific field. The skills translate. I went from political NP to candidates to charitable NP to B2C and B2B. I've done event planning and convention planning... you have to start somewhere to get anywhere in this field.

 

That is generous of you! She did do an internship while in undergrad, but it was not in L.A. I'll chat with her and ask her if she is interested in direct marketing (I know her goal has always been the PR side of things). She is working for a designer now, so she may be content to stay put, but I'll definitely ask!

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That may be true, but I guess I felt that the PP made it seem like it was easy to break into the PR business, and my point was just that our family's experience has been very different even in a major metro area (and my SIL is not unconnected by any means, she just doesn't have the right connections in the entertainment industry).

 

The pp though worked her way up through the ranks, she did "her time" in lower paying position before moving into a much more lucrative position, so it's not like she just landed the great paying job, she worked toward it IMO.

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The pp though worked her way up through the ranks, she did "her time" in lower paying position before moving into a much more lucrative position, so it's not like she just landed the great paying job, she worked toward it IMO.

 

Oh, I fully agree, I'm not knocking the PP at all. I'm just saying that there are also people like my SIL who have been paying their dues at lower paying positions for 6-7 years now and the better PR jobs are not just opening up (which may be due to the recession, or her desire not to leave L.A., or a number of other factors). I was just trying to point out that our experience has been that it may not work out for everyone in that degree even if they work hard and do everything "right".

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something's changed in the dynamic, we're no longer trying to avoid debt, but somehow it's now a way of life, its expected, its routine and its going to crush the next generation if we don't change the attitude about financing college....

 

I agree, and think that if the colleges don't get their act together, they will face a painful reckoning.

 

Why do kids do it today? I don't think they are more lazy or stupid, or whatever than previous generations. I think there's a tipping point, debt-wise, where if you are close to making it through college without any debt, you'll work hard, live frugally, etc., and squeak through without any loans. But, if you go to a college like in the article, which costs $40k annually, and everyone around you takes on significant debt, there's a loss of feeling for the money. Of the $200k in total debt she took on, most was for undergrad. I think it would be very easy to feel like "If I'm already $150k in hock from undergrad, what's another $50k, if it will get me the job I need to pay off my loans".

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That may be true, but I guess I felt that the PP made it seem like it was easy to break into the PR business, and my point was just that our family's experience has been very different even in a major metro area (and my SIL is not unconnected by any means, she just doesn't have the right connections in the entertainment industry).

 

Oh lord no... I graduated and thought I had a job. I was hired... but got there and the Congressman lost his primary. I worked out of his office (for free), and used it as a place to pound the pavement, while getting a PT job in the bowels of party headquarters dialing-for-dollars, and PT at McDonald's. My first job was an Administrative Assistant... and half the time I worked for the Development Office... from there I went to another AA position, but the person I worked for quit, and I took over her duties with the knowledge I had gained at my last position... parlayed this new experience into an agency position... and so forth.

 

I didn't end up where I had planned... but one could argue I wound up much better off because of it :D

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Why do kids do it today? I don't think they are more lazy or stupid, or whatever than previous generations. I think there's a tipping point, debt-wise, where if you are close to making it through college without any debt, you'll work hard, live frugally, etc., and squeak through without any loans. But, if you go to a college like in the article, which costs $40k annually, and everyone around you takes on significant debt, there's a loss of feeling for the money. Of the $200k in total debt she took on, most was for undergrad. I think it would be very easy to feel like "If I'm already $150k in hock from undergrad, what's another $50k, if it will get me the job I need to pay off my loans".

 

In many cases it is not the kids who are borrowing but the parents. Stafford loans are capped. After that, parents borrow using PLUS loans. Once upon a time they used their home equity as a cash machine.

 

Those $40K+ colleges do not necessarily cost $40K+. My son attends one. His merit scholarship reduces the net cost significantly.

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We have taught all our children how to perform a Net Present Value and a Return on Investment calculation...they will take on no debt to go to college, period.

 

These are very poor decisions that many kids are making today, and they are going to pay for those decisions for the rest of their lives, sadly. The debt they are taking on is debilitating.

Edited by Barry Goldwater
to make sense...
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Why do kids do it today? I don't think they are more lazy or stupid, or whatever than previous generations. I think there's a tipping point, debt-wise, where if you are close to making it through college without any debt, you'll work hard, live frugally, etc., and squeak through without any loans. But, if you go to a college like in the article, which costs $40k annually, and everyone around you takes on significant debt, there's a loss of feeling for the money. Of the $200k in total debt she took on, most was for undergrad. I think it would be very easy to feel like "If I'm already $150k in hock from undergrad, what's another $50k, if it will get me the job I need to pay off my loans".

 

I've met kids who have unreasonably high expectations (perhaps they had them going into undergrad, too... like maybe they "didn't worry" about $150k in undergrad debt, because hey, I'll have a diploma and I can get a job paying $34,000 first year out! It won't be bad) I have also known some who it took years to get a job, even though they were excellent workers, had excellent references, etc.

 

But, these types existed 20 years ago, too. I was friends with a girl who turned down jobs, because iho, they "didn't pay enough." Not as in, "enough" compared to what a 1st year out of undergrad paid for a job like that, or even for her degree, but what she thought she should be making (her degree was in Philosophy). She didn't even have student debt to worry about. She gave up looking for jobs, because nothing would start her at $27,000:tongue_smilie: And, she went back to school (more than once).

 

The difference is... instead of graduating with $60,000 in debt, these kids are graduating with $120,000!

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Tigger: I think one big change today is that kids (they are kids still) aren't really scared of debt; when I was graduating high school and looking at how to pay for college, it was drilled into our heads - from parents to guidance counselors - to take as little debt as possible, we'd have to pay it back!

 

I never had a guidance counselor say a word about debt. But I DID have Depression-era parents. NO DEBT was the only way to live. I later found out that things were so tough that they sometimes did have to have small debts. They had to borrow so I could play clarinet! I never knew that. Dad was a mailman and Mom was a housewife.

 

No debt is the only way to live, if at all possible. And any debt should be paid off as quickly as possible, because it is an obligation. It is sad if kids aren't learning this today.

 

Student loans were considered more "a fact of life" that many had to use, they were not viewed as "a way of life" that everyone had to have, the more the better!

 

 

No kidding.

 

I see many of my friends, the ones in the past who graduated with me and did everything in their power to avoid debt in college, not having any conversation with their kids about how to finance college without crushing debt - something's changed in the dynamic, we're no longer trying to avoid debt, but somehow it's now a way of life, its expected, its routine and its going to crush the next generation if we don't change the attitude about financing college....

 

That's hard to believe that parents aren't talking about this, especially in the middle of Great Depression II. I really don't get it.

 

I do know that everyone we know has a nicer larger house than us, and lots of them make half to a quarter of our income. That's really scary to me. We like to eat, and pay our bills, and be able to rent a movie now and then. I had a 6 day hospitalization last month -only one in 40 years, since my tonsils) and who knows what is going to come of that, financially. I don't get living above your means.

 

This whole new idea, that you'll not really have to pay it back because you'll get sliding scale payments - seriously? Take on too much debt and just pay a small amount? What? How is that teaching responsibility? How is that even holding someone accountable for choices they make and obligations they agree to?

 

Right. What the heck? I don't understand how we went from diligent families working toward mortgage burning parties to this loosey-goosey "Oh well, I'll pay it back if I can" kind of mentality.

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We have taught all our children how to perform a Net Present Value and a Return on Investment calculation...they will take on no debt to go to college, period.

 

These are very poor decisions that many kids are making today, and they are going to pay for those decisions for the rest of their lives, sadly. The debt they are taking on is debilitating.

 

Thank you! The NPV and ROI calculations should be learned and understood in high school. It's highly likely someone will purchase a car, horse, or something using debt which will require an understanding of interest rates and time value of money. This is priority number one for my kids before they go out on their own.

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Jane in NC: In many cases it is not the kids who are borrowing but the parents. Stafford loans are capped. After that, parents borrow using PLUS loans

 

I don't think this is a good option unless you are very well funded for retirement or maybe if you are really young parents. We are old parents. It would be extremely unwise to go into long term debt at this age. We want to be able to cover our expenses in old age and not have to burden our children with that. So they are going to have to make it happen however they can, hopefully with merit scholarships, as they are both very high achievers.

 

 

Those $40K+ colleges do not necessarily cost $40K+. My son attends one. His merit scholarship reduces the net cost significantly.

 

Sounds like the way to go! Good for your son. I have heard this but it would be nice if they just stopped playing games and charged reasonable fees.

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My brother has a gifted 18yo daughter who thought she was going to one of those expensive undergrad colleges. It was just so right for her. She was so smart, she obviously deserved it! Problem is, neither she nor her parents had bothered to set up any kind of college fund. She'd never had any kind of job. They applied for assistance and ended up where after the maximum available scholarships and student loans, they'd need a parent loan of $17K per year. Inconveniently, my brother had recently gone bankrupt. So my brother's solution was to request me to co-sign for the parent loans. (Talk about a sticky situation.)

 

Now, as much as I love my family and want to be of help, if neither the student nor the parents had put any thought into this education in the past 18 years, why would I trust them to come up with the ability to pay off the loans? Sorry. My niece was extremely upset to find that she had to lower her standard - to the same undergrad I attended :glare:. You know, the one that cost me $10K and apparently sufficed to get me into a "good" grad school and eventually solvent enough to co-sign for other people's parent loans :glare: . . . .

 

I just hope I don't make the same mistakes with my kids.

 

My mom encouraged us to take all the subsidized loans we could get. In those days, a college / grad degree made a bigger difference than the debt burden. They say that's not true any more; but I think it can be if it's approached intelligently. Personally, I have a much lower debt tolerance than my mom, but it can make sense if you have a logical plan.

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Did your SIL do any internships? They are quite competitive, but really help get those contacts and experience going. I know someone who has a firm in LA -- if she wants to work in direct marketing (which can lead to other things -- but it's EXPERIENCE), I can forward her resume' to someone. My cousin works for a large firm in NYC as well...

 

Sometimes you have to start with experience in the general field while you look for the job in the specific field. The skills translate. I went from political NP to candidates to charitable NP to B2C and B2B. I've done event planning and convention planning... you have to start somewhere to get anywhere in this field.

Lisa, thanks for the encouragement, even if it was aimed at someone else!

My ds will be graduating in May from a LAC with a bachelor's degree in communication studies. He will have about $13,000 of student debt, but I think he's realistic about what his lifestyle will need to be in order to pay that off. I have been worrying about the fact that his degree is maybe not very lucrative, but I can see his talent in the area of study. I appreciate hearing your perspective, and it's providing me with some sense of hope for his prospects.

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SKL: My brother has a gifted 18yo daughter who thought she was going to one of those expensive undergrad colleges. It was just so right for her. She was so smart, she obviously deserved it! Problem is, neither she nor her parents had bothered to set up any kind of college fund. She'd never had any kind of job. They applied for assistance and ended up where after the maximum available scholarships and student loans, they'd need a parent loan of $17K per year. Inconveniently, my brother had recently gone bankrupt. So my brother's solution was to request me to co-sign for the parent loans. (Talk about a sticky situation.)

 

 

WHAT???? Wow, I can't believe that.

 

Now, as much as I love my family and want to be of help, if neither the student nor the parents had put any thought into this education in the past 18 years, why would I trust them to come up with the ability to pay off the loans? Sorry. My niece was extremely upset to find that she had to lower her standard - to the same undergrad I attended :glare:. You know, the one that cost me $10K and apparently sufficed to get me into a "good" grad school and eventually solvent enough to co-sign for other people's parent loans :glare: . . . .

 

Lol. Right. How COULD she ever stoop to the level of the college YOU attended...:confused:

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Oh, and everyone here knows that federal student loans CANNOT be discharged, even if you declare bankruptcy, right? :glare:

 

Hence the education bubble. Loans are made with no concern or regard about a person's realistic ability to pay them back, so the lenders have virtually no risk in making the loan...the borrower is obligated to pay back...death is the only escape.

 

And all this 'easy money' is available, so there is little downward pressure on higher education costs...hence the 15-20%/year tuition hikes for the last 20-30 years. That's how one can easily find themselves in the absurd position of having $200K of debt while only expecting to be able to make $25-30K/year after graduation...if a job is even exists for him/her :tongue_smilie:

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Lisa, thanks for the encouragement, even if it was aimed at someone else!

My ds will be graduating in May from a LAC with a bachelor's degree in communication studies. He will have about $13,000 of student debt, but I think he's realistic about what his lifestyle will need to be in order to pay that off. I have been worrying about the fact that his degree is maybe not very lucrative, but I can see his talent in the area of study. I appreciate hearing your perspective, and it's providing me with some sense of hope for his prospects.

 

Feel free to have him PM me if he'd like to talk about options in the field -- and where he'd like to wind up. Hopefully someone from his college career office and/or his advisor is already doing that... but some advisors are worthless. Nothing like a 2 BR/2BA with 3 roomates... eating Ramen and Mac & Cheese... and getting the 2nd job to try to get ahead, now is there? But, with only $13k in debt, he sounds like he's heading in the right direction!

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:confused:

Of course it is the student's responsibility to make an informed decision.

Nobody else can be blamed.

 

 

I think that's a bit harsh. While the responsibility ultimately lies with her, I certainly sympathize with her position, and could see that I myself could have ended up in the same place, were I in her shoes. I don't know this student at all, but it seems very plausible that she did do research, and got bad advice, or advice that was ill-timed compared to the economy at graduation time. I've seen many families where the student is told to "grab the ring", and take out loans, and the same message is sent by the parents, guidance counselors, and certainly the college itself. I bet that the vast majority of her peers at this school graduated with substantial debt.

 

The debt wasn't even a major part of the NYT story -- it too was singing the praises of going back to school, and only mentioned the debt in passing, as if it was not unexpected.

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one thing I've done with my kids - made them think through *what* they will do with their degree. lots of interesting things out there to study that don't pay squat.

 

We've done that here, too. We highly value education, but recognise that not all education necessary for a job in today's economic climate can be found inside the walls of an university & everyone must weigh up the costs & the benefits of an university education.

 

Dd will finish her BSc-Biological Sciences in Nov 2012. She will come out with a student loan of ~$20k. This is less than many of her friends as dd chose to do her first 2 years at a polytech, instead of an uni. The polytech course also gave her a finished qualification (a diploma, like an associates degree) after 2 years as well as practical experience / certificates that makes her employable now. Her degree will be from a well respected university. Her total student debt should be less than 66% her anticipated year's salary, making it not impossible to pay off quickly if she makes it a priority.

 

Ds#1 has a student loan of $3500. He will begin an engineering apprenticeship in February 2012 that will take him 3-4 years to complete the study & 8000 hours necessary to become a qualified engineer. He will be paid during this time, so he will finish his education with experience & money in the bank. His qualification is highly employable both in NZ & overseas. His small student loan is from an introduction level engineering course he took this year at our local polytech, part of which was 2 days/week work experience in the engineering firm where he'll do his apprenticeship. This student loan is equivalant to less than 8 weeks of his net pay.

 

Why are students allowed / encouraged to get degrees if these degrees will put them in economic bonds for life? Financial literacy is surely lacking & priorities are way out of whack IMHO.

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Well, I'm late but as a professor in Communication Studies, I feel compelled to jump in :lol:.

 

Communication Studies is a wonderful field, albeit relatively new in the academic world. There are two primary tracks within communication studies: humanistic/rhetorical studies and social scientific/interpersonal and organizational studies.

 

The classical scholars here would likely be drawn to the humanistic side of communication studies that focuses on the great texts from the ancient world through political speeches and other artifacts of modern life that can be analyzed as having a communicative force on others. Critical discourse analysis and persuasion are often central to this line of inquiry. Students focusing in rhetoric often go to law school or are drawn into political communication.

 

I am a social scientist, so I can better speak to that side of the discipline. Communication social scientists focus on the process of meaning creation in interaction and how that meaning creates, sustains and destroys social interaction. We do it through studies of how people communicate in relationships, small groups, and organizations. Our work is interdisciplinary and intersects with psychology, sociology, linguistics, and even management. Our students often go into non-profit management, human resources, sales, account management for advertising and public relations, health promotions, and also onto medical school, law school, or an MBA.

 

Some of the top scholars in our field (if you want to google) are Judy Burgoon who has analyzed how communication expectancy violations have an effect on interactions, Charles Berger who studies how human being seek to reduce uncertainty in interactions, Brant Burleson, who studied effective emotional support, and Sandra Petronio who examines how secrets are created and maintained in families. Then there are scholars like Patrice Buzzanell who looks at how organizational discourse creates gender boundaries for women and minorities, and Cynthia Stohl who studies organization's memorable messages. (And, no, I'm not any of those I have mentioned!).

 

Okay, so I know they are not household names, and most of you won't care to google:D, but CS is an ever-growing field of study that is both rich in theory and research. It is often used as "joke" in television shows, but as a researcher, I left psychology to focus on questions of how we interact rather than how we think or process information. Our students often want a strong liberal arts and sciences degree, but with some application courses.

 

The job market is wonderful for our students, though not as strong as Business and Engineering, certainly better than English and History. $200,000.00 in debt for the degree, however, is ABSURD!!! She would need an M.D. to make back that kind of cash :lol:. As for those with doctoral degrees, CS is still in a major "growth spurt," at universities across the county (mainly state schools and small LACs), and we are one of the few doctoral fields that has a job for nearly every Ph.D!!!! We don't require post docs and years of driving taxis to land a tenure track line.

 

Okay, end rant -- and hopefully I won't be the thread killer:tongue_smilie:.

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While I can't see a massive amount of debt being worthwhile, I'm not anti-debt when it comes to a college education as I see it as an investment.

 

This article would be a good one to read to balance this discussion:

 

http://www.latimes.com/business/la-fi-college-worthwhile-20111229,0,1384514,print.story

 

Some excerpts:

 

With college costs soaring and new graduates struggling to land jobs, is higher education still worth the money?

 

Yes, according to an analysis by one recent college graduate who has studied the issue carefully.

 

...

 

The good news is that college pays off, Millar concludes, citing data from a variety of government and private sources.

 

The average take-home pay of college graduates is nearly twice that of their high school counterparts — $38,950 versus $21,500. Even factoring in student-loan payments, college graduates make more in their first year of work than those with only high school diplomas. And history shows that the college graduate can expect his or her income to increase 2.2% annually over a lifetime compared with 1.9% for someone with only a high school diploma.

 

The advantage of college shows most clearly in the vastly different unemployment rates of the two groups: 4.4% in November for those with college degrees compared with 9.6% for those with only high school diplomas (and an abysmal 13.8% for those who never finished high school).

 

The college graduates' earnings would exceed the high school graduates' by more than $1 million over 40 years. Financially speaking, college is worthwhile as long as the total four-year cost is less than $715,000 — which, at least at the moment, it is.

 

...

 

But Millar details the high price of higher ed.

 

...

 

Students shelled out an average of $73,500 in tuition payments over the last four years. And when considering that a young person could have earned a cumulative $84,500 straight out of high school over four years, the college graduate is $158,000 in the hole. Add in the interest on student loans, and the student's deficit can top $200,000.

 

...

 

She points out two factors to consider when deciding on college: the name brand of the school itself and the intended course of study.

 

Average starting salaries of new graduates generally are higher at big-name schools such as Caltech ($69,600) or Princeton ($56,900), Millar said. The average for a UCLA graduate is $49,200.

 

Perhaps more important is what a student majors in.

 

"A poetry major from UPenn may not fare as well as an electrical engineer from Penn State," Millar reasons.

 

My guys are going to college - happily - and I've no qualms about their taking on some debt. Of course, they're also academically suited for college, and at least the oldest two will have decent merit aid making the cost quite reasonable. My youngest is looking at a job that won't pay much, so we plan to assist him as much as we can so he won't have huge amounts of debt. I'm also trying to assist him with being prepared for the SAT/ACT to have merit aid options. It's important to me that he get into a niche he likes - not necessarily one that pays the highest. Middle son will have med school if his plans continue as they are right now. There will be costs, but to us, it's better than the alternatives.

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Well, I'm late but as a professor in Communication Studies, I feel compelled to jump in :lol:.

 

 

Thank you :D I recognized a few of the names you listed, but most of those I know are all on the rhetoric (ahem, debate) side. Hingstman, Snider, Zarefsky... much lesser-knowns.

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<snip> <Excerpt from the excerpt> :tongue_smilie:

The college graduates' earnings would exceed the high school graduates' by more than $1 million over 40 years. Financially speaking, college is worthwhile as long as the total four-year cost is less than $715,000 — which, at least at the moment, it is.

<bolded added by me>

...

<snip>

 

Perhaps more important is what a student majors in.

 

"A poetry major from UPenn may not fare as well as an electrical engineer from Penn State," Millar reasons.

 

I don't like that (regarding the bolded) this statement does not consider the ramifications of cash flow, relative to earning power throughout a career. Paying $1,300/mo to pay college loans may seem palatable when earning $95K/year, but is awfully tough to swallow at $35K/yr. Most college graduates don't get into the near six-digit earnings till deep into their career, i.e. 10-20 years in. Can they stay financially afloat during the early lean years with such a colossal debt over their heads? Also this earnings growth also depends on career/promotions choices, outside circumstances (eg attrition, obsolescence, outsourcing, recessions) marriage and family planning, and other factors, some of which are out of one's control...

 

I like that the article discusses costs versus relative benefits, AND that the selected major/vocation should be a factor in balancing the investment versus the debt taken on.

 

Caveat emptor, I always say...I think in principle I agree with Creekland's statement, perhaps disagree on the details...ackowledging a strong personal bias against personal debt.

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