Looking At New Student Loan Benefits – And Low-Cost Careers

For many people going to college, they’re scared to get involved with a major that won’t pay a lot. I know I was – after strongly considering stints as both an English major and a math major, I instead got into a major with significantly higher earning potential because I didn’t want to face huge student loans with an $18K job right after finishing my studies.

Interestingly, Congress addressed this very issue with the College Cost Reduction Act of 2007; here’s Anya Kamenetz’s review of that very bill (you may remember Anya as the author of Generation Debt, which I reviewed in detail a while back):

To my mind, the most significant student benefit in the bill is income-based repayment. Under these proposed new rules, graduates whose earnings don’t exceed 150 percent of the poverty line (about $15,000 for a single person) would be exempt from repaying student loans. All borrowers could opt to repay no more than 15 percent of their income above that amount, known as “discretionary income.”

So if you earn $25,000 a year, you’d be guaranteed to pay no more than $121 a month regardless of your total loan burden. After 20 years, all remaining balances would be forgiven (10 years for eligible public servants).

This bill helps out students who are considering careers in social work and other humanities fields, but it falls just short of really helping people in another career that really need the help: teachers. There are some teachers at the lower end of the pay scale that will benefit from this, but many teachers make just enough to be out of the higher end of this bill, unfortunately.

Let’s use an example of a teacher making $33,000 a year, a reasonable number in this area. If that person lives alone, their poverty line of income is $9,800 and thus 150% of that is $14,700. That means that the teacher will have $18,300 of their salary that is eligible for student loan debt repayment, of which 15% is required for student loans (a total of $2,745). That means that under this bill, a teacher making $33,000 a year and living alone has his or her monthly student debt repayment capped at $228.75.

This bill will likely help out some people in the first years of their career, and others will be helped over the entire length of their loan. Given the balance needed between helping out low-paying professionals and also making student loans worthwhile for lending institutions and for the government, I think the bill hit a very nice spot.

The real take-home message here is that students majoring in fields that won’t provide a large income post-college are saved from the double whammy of large student loan payments and low salary, which for many students was enough to keep them out of a major that they may have been passionate about. It certainly was for me, and I may have made a different choice had this law been in effect when I was a student.

If you enjoyed reading this, sign up for free updates!

Loading Disqus Comments ...
Loading Facebook Comments ...
  1. Kat says:

    Teachers are not that bad off. Of course they may start out making 33k a year, and might I add that is more than I made my first year in my profession of architecture, but they have benefits, 3 months off in the summer, less time required to stay longer in the “office”, retirement plans, every major holiday off AND breaks during the school year.
    If they are so broke due to loans they can teach summer school and/or get a second job.
    My mother was a teacher for a number of years, she is now a VP, my best friends are teachers as are their husbands. All of them are managing just fine. In fact, out of all of my friends the teachers are the only ones who can afford to purchase a home. One other perk of being a teacher, the government helps you buy a home.

  2. !wanda says:

    Math majors can make lots of money! Lots of software and especially financial institutions look at a math degree as a marker for good quantitative and abstract reasoning skills and are willing to train you on the rest. Good quant skills are pretty rare, after all. This advice may be more true after getting a masters in math than a BS in math, but at least at my undergraduate institution, math majors didn’t have to look hard for a good job.

  3. jake says:

    wow the numbers are so close to mine.

    I just graduated and got a job as a IT technician so I make about 33,000 a year. I also have about $18,000 in loans. I have about 6 months before I have to start paying.

    If i chose the income base student payment, what would be the minimum I can pay under the act?

    Also just want to make sure I am hearing it right, with my situation if i dont pay the loan off in 20 years does that mean it is all forgiven?

  4. Brad says:

    Bad location for a message Trent, but your email is bouncing. :)

    Brad

  5. Shannon says:

    I’m an administrative staff member at a university (state employee) making about $34K/year. I have almost $24K of student loan debt and pay about $200/month toward them. Am I considered an eligible ‘public servant’? For 10 or 20 year debt forgiveness?

  6. !wanda says:

    Under the new rules, couldn’t someone with rich parents choose unemployment and never pay the loans back?

  7. Pedantic says:

    Many people going to college are scared to get involved with a major that won’t pay a lot.

  8. SJean says:

    I do think that repayment could be based on income to make it affordable… but I don’t think anyone should just be exempt because they have a low paying career.

    I think that students SHOULD take into consideration their future earnings and expected debt load when considering what to study. It makes no sense to go to an expensive private college to become an elementary teacher (unless your parents will foot the bill–then do what you want!). It’s an irresponsible choice, and we should expect the government to bail us out!

  9. Cheryl says:

    A lot of people seem to be unaware that there is help for teachers if you teach for five years in a low-income school. All areas can be forgiven up to $5000.00 of Stafford loans, and some- science, math, and special ed I think, can be forgiven up to $17,500. Perkins loans are even better.Some can be completely cancelled. It’s a great deal and more schools qualify than you might think. The information is at: http://studentaid.ed.gov/PORTALSWebApp/students/english/teachercancel.jsp?tab=repaying

  10. Brad says:

    How about the alternative of not racking up student loans? It can be done….

    Brad

  11. SJean says:

    Also to Jake–I don’t know anything about this act, but my student loan company has a repayment plan based on a percentage of your income. And one where you pay less now, pay more later.

    Just be aware, if you are paying less, then you are going to pay more in interest. Unless this act changes something which forgives part of them…

  12. Rob says:

    Unless I missed something, wouldn’t it be encouraging students to be taking on the maximum amount of student debt possible knowing they would unlikely have to pay off the thing or pay very little of it? This is not to even mentioning how much of a cost this would be (to the gov’t). Knowing how loans work, the costs rack up pretty quickly when we’re talking about defaults (which is what this is). Honestly don’t think they would ever approve of something like this.

    I dunno, education just plain needs to be cheaper. There’s something wrong. I can’t for the life of me understand how any organization (using my former school as an example) who collects 40k a year from 30-40k students, millions from alumni contributions, millions from research grants, own all their property and still somehow be in a financial situation where they can justify raising tuition costs four years in a row. Yeah, $500 a semester if you buy your textbooks new too, forget about it.

    Parents don’t like to skimp when it comes to their children’s education, but am I the only one who feels like these people/schools are taking advantage of this fact?

  13. !wanda says:

    Rob- They are taking advantage of parents. However, the schools that have a sticker price of 40k a year claim that they don’t expect most people to pay it. They expect most students to get financial aid, either from the government or from the college itself, and thus to pay nowhere near full tuition. The colleges say that they raise tuition by more than inflation because the parents of the richest students can afford it, and they want to maximize the amounts they get from these people to subsidize the financial aid given to everyone else.

    This story is probably true for the top tier of colleges, like the Ivy League, which have substantial endowments. The problem is that soaring prices in the Ivy League mean that second-tier schools, which cannot afford to subsidize poor students, also feel like they can raise tuitions. If your kid can get in, you may end up paying less for her Harvard degree than for a degree from a middling private school with a lower sticker price.

    (By the way, almost none of the “millions from research grants” can be applied to undergraduate tuition, so that doesn’t count.)

  14. Jeremy says:

    Trent,

    This looks like an excellent program from an individual standpoint – after all it encourages people to chase their dreams rather than be crushed by an all-too large debt-burden.

    However, it creates a strange mix of incentives. In a sense, it’s just another way of taking a bit of pie from John to give to Joe while shrinking the whole thing.

    But I like it, and would support it.

  15. MVP says:

    Again, it’s the government bailing folks out who make decisions to take on debt and enter a low-paying career. Sorry, but I’m not buying this, and as a taxpayer, I think it’s unfair for us to subsidize someone else’s “passion” (yes, I know we already do this in a variety of ways, but still). We all know it when we enter a low-paying career. There are other options out there. I advocate that people take personal responsibility for the choices they make regarding major life decisions like where to go to college and what career to pursue. Of course, when you’re 17, the practicalities of student loans and future career options aren’t usually the first thing on your mind, so I’m not sure what the answer is…

  16. Kim says:

    So what about all the tons of people who get a degree then go to work outside of their major field (ie, in a job that does not require a degree) because they failed to get a good job? Would the rest of us be responsible for paying their failure? I just see this bill helping so many more people like that than social workers.

    I like the idea of lower payments for those with lower incomes, but not the government subsidizing someone’s bad decisions in the form of debt forgiveness.

  17. ben says:

    If the government wants to lower the cost of higher education they should build more universities, not fund the much higher than inflation tuition growth by lending cheap money to everyone.

    My favorite article on school tuition
    http://philip.greenspun.com/school/tuition-free-mit.html

  18. plonkee says:

    We have a system almost exactly like this in the UK, here if you earn less than £15K (~$30K) you pay nothing back for your student loan, otherwise you pay back 9% of your income above £15K. if you haven’t repaid it all by the time you are 55, it is forgiven.

    I imagine, that on balance, it is relatively revenue neutral as reducing the monthly payments means that the total amount paid is higher.

    In the UK, this arrangement only applies to government backed loans – like your federal loan program – and there’s a maximum amount you can borrow its £6315 this year (about $12,500), so it probably works out to be quite hard to not pay it off in the time.

    Of course there are loopholes, e.g. you could be unemployed and live with your parents forever, but they seem to involve cutting off your nose to spite your face.

  19. x-er says:

    Try this.

    Go to your next door neighbor’s house and ask them to give you money for your kid’s college education. What do you think their reaction will be?

    OK. Maybe that didn’t work. Go to the store and ask the low income mother of two who is buying her kids new clothes to give you some money for your college education. What do you think her reaction will be?

    When government pays for one group of people to do something where does that money come from? It comes from all the other people that are working. Why should someone who works hard, pays off their own bills be forced to pay for an education that the market place / society does not value?

    It is no different than going into someone’s house, stealing their television, pawning it and using the money to pay a student loan.

    I am sick and tired of everyone using the government to stick their hand in my pocket and take my hard work from me.

    Why aren’t you?

  20. plonkee says:

    @jake:
    It works out to be a minimum of $225 under the income contingent rules, regardless of how large your loans are. This means that it would take between 8 and 10 years to pay your loans off, assuming the interest rate is between 6% and 9% (I don’t know if that’s reasonable).

  21. Daniel says:

    Are these laws for new loans made, or will they be retroactively applied to people still paying loans?
    Will they apply to private loans as well?

  22. Chodeo says:

    Why don’t we just pay everyone in every line of work the same amount, Chariman Mao?

    The fact is, some careers, like engineering and computer science and medicine are in higher demand and therefore they pay more. This happens because these fields harder and/or less enjoyable. If you level the playing field on loan repayments, you decrease the incentives for someone trying to decide between spending endless nights in the lab with the physics majors when they could be partying at the campus bar with the sociology majors.

    If there’s a lack of good teachers and social workers in our country (is there? especially when measured against our lack of skilled engineers and doctors?) then just pay teachers and social workers more. Incentivizing students to study humanities with cheaper loan repayments is poor economic policy. What good would it do anyone to have an abundance of humantities majors if it came at the cost of having less scientists and mathematicians?

  23. Brocklesocks says:

    I would like to know if they apply to private loans as well. I was denied federal loans and now I’m stuck with massive debt and payments I can’t handle.

  24. Brad says:

    Unless I missed something, wouldn’t it be encouraging students to be taking on the maximum amount of student debt possible knowing they would unlikely have to pay off the thing or pay very little of it?

    The law of unintended consequences. One of the reasons “higher education” is so expensive today is the availability of so much “help” in paying for it.

    Things that are subsidized go up in price, other things often go down.

    While still subsidized, to a point, MIT is showing that some education can be “free” since they are distributing courseware over the web.

    http://ocw.mit.edu/index.html

    Without all the subsidies, we might have much better offerings. And this program is just another subsidy. Someone will have to pay for all that “forgiven money”. It won’t just come out of thin air. (Though if the Fed just makes it up, it might. )

    Brad

  25. Minimum Wage says:

    I got a liberal arts degree because I intended to go to law school and a degree – any degree – was required to go to law school. By the time I graduated, I could no longer afford to go to law school. I ended up with student loans and a minimum wage job. Did I “choose” to take a dead-end, menial, minimum wage job I hate?

  26. icup says:

    Well, one reason the government subsidizes education is because fewer people would enter lower paying careers if they didn’t. Another reason is to even the playing field, otherwise only the very rich and the very smart would be able to go to college. Allowing people from low earning families and of mediocre intelligence ultimately increases the skilled workforce, and is therefore ultimately good for our country and its people.

    As for the government subsidy, my feeling is this would probably come out almost even for 2 reasons:

    1. because there would be fewer defaults and bankruptcies,

    and 2. more interest paid because of the longer term (20 years instead of 10).

    Any balance forgiven after that 20 years would probably be substantially less than what would have been written off to defaults alone, let alone the greater amount of interest paid.

  27. m360 says:

    I heard something recently about a bill they were trying to pass in my state (not sure if it’s passed yet) that will let graduates deduct their student loan payment from their income taxes. This is to keep grads in the state, they are leaving like crazy to find better jobs. I also think it’s good to remain as “poor” as possible while being a college student, making one elligible for subsidized loans and grants (except for dependant students who’s parents make a lot).

    A student can opt to go with grants, which is free $ and can cover the basics of tuition, books, depending on where you go. I have been taking out loans and although it’s not too financially savvy, it is convienient. For someone who has a college trust fund, it might be a better idea to let that $ grow, take out the loans and then pay it off at the end. And at least the payments are deferred while the student is in college.

    I’m not sure how many people know about the Americorps program, it’s something I’m looking at as an option when I graduate. If you volunteer for a year, they will give you a stipend for living exspenses (and I hear you can live comfortably on it). They can even set someone up in their area if they have availavble openings in that persons area of expertise. At the end of 1 year, they will give you either $1,000 or pay $5,000toward student loans.

    A coulpe of years vollunteering and you could knock off a good deal of student loan debt while getting experience in your field. Payments are also deferred during one’s service with Americorps. It’s a sister agency of the PeaceCorps, so they might offer similar benefits except you must travel abroad. From what I hear, some of those conditions are not ideal, but it’s a great learning experience as well.

    I also think it’s wise to get general subjects like english, history, etc. out of the way at a community college or local, inexpensive university, and then transfer to a prestigious institution, like Harvard. It saves a lot of $$ and you can still graduate from a well known and respected institution. It doesn’t really matter where one takes their general education requirements anyway.

  28. !wanda says:

    There are social benefits to being at the same institution for all four years. If you want to, say, be a politician, it’s probably worth your while to go to Harvard for all four years for the networking possibilities. Also, being at a prestigious institution earlier means that you can find research and internship opportunities with your esteemed professors earlier. (It’s not impossible to find these if you’re not on campus, but professors will be much more likely to take you and certainly to give you references if you’re from the school.) You have to decide whether you’re going to take advantage of all the opportunities present at one of these expensive, prestigious institutions. If you need to be friends with rich and influential people, to fund your campaign or your startup, or if you need to be published in prestigious publications, then go for it. If you want to teach small children, then go cheap. The problem is that most teenagers aren’t thinking that concretely about their futures.

  29. Molly says:

    Not everyone can have the high paying jobs…someone still has to be on the bottom end of this ladder. I only wish it were that easy. I’m 40 and have yet to make a payment on my student loans; with a current salary of 24,000/year. Not exactly living the life of Riley, that’s for sure. No one goes to college hoping to make less money, but it’s certainly no guarantee of affluence.

  30. Minimum Wage says:

    Daniel -

    I called my congressman’s office, but the knowledgable person (on this issue) will not be in until the middle of next week.

    So I called my senator’s office, and they said that borrowers with existing loans will have the option of either staying in their current repayment plan or jumping to the new plan.

    As I read the bill, jumping to the new plan will allow me to reduce my current payment.

  31. MVP says:

    Minimum Wage, YES, you ARE responsible for choosing to take a “dead-end, menial, minimum wage job (you) hate”. Are you serious that your four-year degree didn’t give you the skills necessary to get a job that pays more than that? Take some responsibility for yourself and get out there and get a better job if you’re able to and really want it. Not my (or other taxpayers’) fault you didn’t choose to spend your time in undergrad pursuing a more appropriate path that would keep your options open in case law school didn’t pan out.

    And I completely agree with x-er. If teaching, social work and other lower-paid positions are so important to our society, why don’t we pay those who pursue those careers more money? Instead, the government approaches from the back door with subsidies and tax breaks. My husband, who’s a teacher, reminded me that he gets several tax deductions for everything he buys for work and all the extra classes he takes. Why not just PAY them more in the first place?! Perhaps if the government didn’t subsidize these professions so heavily, people wouldn’t pursue them, so we’d be forced to pay more fairly.

  32. Minimum Wage says:

    I graduated at the bottom of a recession in a depressed Rust Belt economy. The economy was so depressed that two-thirds of new graduates were leaving the state. I didn’t have the money to move anywhere so I stayed put and got a minimum wage job with my liberal arts degree, which was perfectly useful for going to law school but law school had become out of my financial reach.

    Today I’m a boomer with no career-related experience, and I can’t imagine a scenario where an employer hires me for a good job when fresh graduates half my age are readily available. (Who hires middle-aged people for entry-level jobs?)

    So I don’t think I have any employability left and I don’t know what I’m supposed to do about it.

  33. Limewater says:

    @Minimum Wage

    If you’re only making minimum wage, you’re doing the wrong thing, regardless of education level. You can do better than that working at a grocery store or as a janitor at the school where you got your liberal arts degree.

    And then there’s always manual labor. If you’re willing to work hard, you can do better.

    But yes, it was a bad idea for you to get a useless degree based upon the idea that you would be going to law school. Law school is a big “if” even for people of above average intelligence. If your goal is law school, it’s a good idea to get an undergrad in something where you can work if things don’t work out.

    And speaking of people with above average intelligence:

    @icup:

    Do you really not see the problem with this statement?

    “Another reason is to even the playing field, otherwise only … the very smart would be able to go to college.”

    If everyone can and should go, then why don’t we just make high school last four more years?

    And are all of you people forgetting about trade schools?

  34. MVP says:

    With that attitude, you’d better stick with what you’ve got. You’re lucky to have a job.

  35. icup says:

    “Do you really not see the problem with this statement?

    “Another reason is to even the playing field, otherwise only … the very smart would be able to go to college.”

    If everyone can and should go, then why don’t we just make high school last four more years?”

    I don’t see any problem with that statement at all, other than the fact that you cherry picked part of it to make it sound like I think everybody should get to go to college regardless of ability, want, or need. There’s a whole range of people other than geniuses and millionaires, and in fact most are neither, and it only benefits all of us to get most of them some skills and get them contributing to society in a meaningful way. Skilled workers are always better than unskilled, both for society AND the worker.

  36. Sharon says:

    People hire middle-age workers because they have experience with problem solving, they have seen a bit of history, they understand office politics, they understand a work ethic, they are less likely to come into work with a hangover on a Tuesday, they are young enough to re-invent themselves, but they are not still inventing themselves. They won’t come to work with purple hair on casual Fridays because they are going to a party that night.
    Yes, you will have some disadvantages going into an interview now. But there is no disadvantage like not showing up…
    Sharon

  37. Minimum Wage says:

    I also had a minor in comp sci, so I figurted I wasn’t getting a completely useless degree. What I didn’t expect was that the PC would dent demand for my mainframe skills.

  38. plonkee says:

    A more educated workforce is a good thing. The important thing about subsidy is that it allows people other than the rich to get higher education. And as I said before, this plan could easily be close to revenue neutral.

    Also, I think that there isn’t really a market for teachers in most areas as the main employers are the government and they have different constraints.

  39. Limewater says:

    icup wrote:

    “I don’t see any problem with that statement at all, other than the fact that you cherry picked part of it to make it sound like I think everybody should get to go to college regardless of ability, want, or need.”

    all I did to “cherry pick” the statement was edit out the part about the very rich. You then spoke of the benefits of people of “mediocre intelligence” attending college.

    This is the reason we have to teach remedial math in college. It used to be that students learned enough in high school to engage in most careers available. Now, they just go to college to take four more years to end up not knowing a whole lot more than they did at the end of high school.

    Nobody said that only geniuses should attend college. However, there is a reason that one has to take standardized tests as part of admission requirements. You don’t even have to be a genius to get a scholarship.

    In the US, college is being sold to people as an expectation and a necessity. That’s effectively convincing people to take on large debt to end up with a job that doesn’t pay that much better than the one they could get with a GED.

    @Minimum Wage:

    So you studied Computer Science but then chose to not develop your computer education at all outside of what you learned in your minor? That would be the death-knell for anyone’s computer science career.

  40. Sharon says:

    Min Wage:
    Could I make a suggestion? Why don’t you send a summary of your situation to Trent, perhaps he could post it. Then since we all like to suggestions, we could get a good look at your situation and see what we would do. Yes, at least a third of the ideas will be crap because there are issues we don’t have access to, but some should be helpful. Your story is so scattered over this blog that seeing your whole situation could be helpful…

  41. icup says:

    “Nobody said that only geniuses should attend college. However, there is a reason that one has to take standardized tests as part of admission requirements. You don’t even have to be a genius to get a scholarship.”

    I think you are missing my point. That’s the whole point of government subsidy of education. Without it, only those who could afford sky high tuition and those who are smart enough to get a full scholarship would be able to go to college. Hence the millionaries and geniuses. There is a whole range of people in between there who would go to college and do very well, but they just can’t afford it. Hence the government steps in and (rather lightly) subsidizes their education. You (and other people bitching about their tax money) are basically saying that if people need the government to help them pay for their education, then they shouldn’t be going in the first place.

    You are making the worst case assumption that anybody who goes to college on a grant is going to be a slacker because they are paying for it with YOUR tax money, and they know it. Therefore they are purposefully going to party all the time and screw around just to rub it in your tax-paying face. Maybe that’s not what you think you are saying, but that is what it sounds like. You are not giving people the benefit of the doubt.

  42. Mitch says:

    Sharon, I was thinking something along the lines of “what’s MW’s whole story?” as well, though I do think MW’s posts are useful to remind us that individuals who are not already mid- to upper-middle class exist.

    Icup says mediocre intelligence, which if you think about it denotes the same group as “average intelligence.” In an information- and technology-dense society, yes, we need their hands on deck. We need “normal” people to have advanced high-school skills–practical nurses, data entry personnel who can spell, bookkeeping. We need “somewhat above average” (e.g. 550-550-550 GRE) people to master college and graduate-level material such physical therapy, accounting, public relations. Maybe there’s a better way to structure all this, but that would be one tidal wave of a reform.

    I also believe in liberal arts education as a way to develop your mind to think in new paths. Unfortunately, this is a luxury few can afford unless they have the personality to do it autodidactically or the opportunity to combine it with the dominant vo-tech idea of American education.

  43. MVP says:

    I’m only saying people should make informed choices about the careers they go into. Don’t get 60K in loans to be a teacher and expect me to pay them back, for example. If you want to go into a low paid career, go to a lower-cost school. Hey, if you’re going to be a doc or lawyer and bring in big bucks after school, go anywhere for all I care. But even then, you can still get scholarships and get a high quality education at a lower cost school.

  44. Limewater says:

    “That’s the whole point of government subsidy of education. Without it, only those who could afford sky high tuition and those who are smart enough to get a full scholarship would be able to go to college. Hence the millionaries and geniuses.”

    No, this isn’t true at all. Education costs are high because of government subsidy and mismanagement, along with this idea that has been sold that everyone should go to college.

    And a lot of state schools aren’t that expensive. That subsidy already exists. There doesn’t need to be more subsidy added on top of it.

    “You (and other people bitching about their tax money) are basically saying that if people need the government to help them pay for their education, then they shouldn’t be going in the first place.”

    I have not mentioned taxes or tax money, except for mentioning subsidies in this very post. You must have me confused with someone else.

    I haven’t even called this whole student loan plan stupid yet. Someone above actually brought up a good point that this program could actually cost less in the long run as fewer loans are defaulted upon. I am reserving judgement.

    I just don’t think that everyone and their brother have to go to college.

    As Joseph Sobran said, “In one century we went from teaching Latin and Greek in high school to offering remedial English in college.”

    “You are making the worst case assumption that anybody who goes to college on a grant is going to be a slacker because they are paying for it with YOUR tax money, and they know it.”

    Actually, I’ve never said anything of the sort. All I said was that, for a lot of people, college is a waste of time. They go to college, get the “college experience,” and then get a degree while actually not ever learning much beyond what they should have learned in high school. I have made no statement anywhere about how these people are funding their education.

    I’m trying to say that too many people go to college or think they need to go to college, regardless of how they pay for it. I don’t blame them. The employment situation these days seems to greatly favor those who have completed a bachelor’s degree, regardless of the field. It’s just as big a problem that employers require a B.A. to hire a secretary.

    “Maybe that’s not what you think you are saying, but that is what it sounds like.”

    Only if you mix my posts in with about half-a-dozen others that have been posted here and then blend them all into one user.

  45. icup says:

    “No, this isn’t true at all. Education costs are high because of government subsidy and mismanagement, along with this idea that has been sold that everyone should go to college.”

    I fervently disagree here. Education costs are high because it is up to the free market to set the price, and the market sets the price high. Education is one area where the free market breaks down because there is not an immediate return on investment. That is why the government has to step in. Maybe society shouldn’t be like that, but that is the system we have to work in. as I’ve said, I would much prefer a system where everyone more or less has the opportunity to be educated over one that is strictly merit and legacy based.

    “I have not mentioned taxes or tax money, except for mentioning subsidies in this very post. You must have me confused with someone else.”

    You are correct, I was confused. Sorry for that.

    “I just don’t think that everyone and their brother have to go to college.”

    You know, I kind of agree with you there. But then, I worked hard and made it through college, and got a good paying job. I am incredibly grateful for the grants I got, not to mention the government subsidized stafford loans. I literally could not have done it without them, and that was like 7 years ago. I shudder to think of what kids are facing today in terms of school debt. I think its safe to say that I am not an exception. There are millions who benefit from subsidized education, and most of them, like me, will pay back every dime and then some.

  46. Mitch says:

    I don’t know Joseph Sobran, but does he realize that a hundred years ago only about 10 or 15 percent of teenagers attended high school? Right now that same group, the top 10 to 15 percent, often does study languages (ancient or modern). I haven’t seen a B.A. needed to do basic clerical work (usually they ask for experience and a HS diploma), but I have seen it for executive-assistant work, and who knows where to draw the line?

  47. nightingale says:

    I’ve seen a number of comments on here that say that only rich people or brilliant people could go to college without help.

    Well, let me break it to you guys, but even geniuses don’t get scholarships these days. I was valedictorian of a prestigious high school and got little more than three thousand dollars in grants, no money available from parents or government loans, so I got stuck with a $35k a year bill and only private loans as an option to pay with.

    Given the choice between living the life so many of my friends currently are and struggling through living off a retail job until I’m 70 years old, and going to college with the very slim chance that I’ll actually make at least $40k a year in a “real” job, I chose college because everyone always says a college education pays off.

    Well, I’m making less money right now than my retail friends, who already own their own condos, and I have almost $100k in loans at high interest rates. I cannot blame anyone for the fact that the job market is difficult (and not just in my major– except for my computer science friends, nobody in my graduating class has gotten a job that pays enough to cover monthly loan payments) but a little forgiveness would be helpful. Unlike credit card debt, student loans are not even forgiven if a person declares bankruptcy. I see a lot of comments on here that say “you made a sucky decision and that’s your fault, live with it,” and in some ways it’s true, and I have no choice, but I’m tired of people blaming me for the many misleading perceptions society puts out about working hard and getting a degree giving you guarantee of success.

    What the government really needs to do immediately, in my opinion, is cap the interest rates on private loans and reduce the rates of people already paying. Some of my friends pay as high as 20% interest because it was a choice between taking that loan or dropping out.

    After that, investigations need to be done into where all the money is going in these schools. Paying as much as we do in tuition, there should either be much higher quality education, a large number of substantial scholarships, or something. Most college students I know wonder just where all that money went, since it didn’t go into improving the school as far as we could tell.

  48. Limewater says:

    “Education costs are high because it is up to the free market to set the price, and the market sets the price high.”

    Education, like health care, is a terrible example of a free market. It’s not a free market at all. The government is a major player in the education and has been for a very long time. That is not a free market.

    @Mitch:

    “I don’t know Joseph Sobran, but does he realize that a hundred years ago only about 10 or 15 percent of teenagers attended high school? Right now that same group, the top 10 to 15 percent, often does study languages (ancient or modern).”

    I’m not so sure about your numbers for education. By 1907, most states in the Union required school attendance up to the age of at least 16. But that’s about all I know on the subject, so my knowledge in the area is pretty limited.

    However, Sobran’s point wasn’t that more kids should be taking ancient languages. His point was about the decline in educational standards.

    By attending a university, one is supposed to be engaging in higher education. It is completely backwards for a university to have to teach admitted “college” students subjects at a level below that which they were supposed to have achieved in high school.

    @ Nightingale

    You weren’t “stuck with a 35K a year bill” for college. You didn’t have to go to the most expensive school to which you were accepted.

    That said, I do think it’s pretty evil that a “you are expected to go to college” message is forced upon well-performing high-school students. Even more sinister is the “you should go to the best school that accepts you” message.

    But I’m sorry to hear about your situation. Seriously. You drank the Kool-Aid, but it was probably given to you by a lot of adults you really respected and who probably really thought they were looking out for your best interest.

  49. (Auntie!) Mitch says:

    I agree that remedial education should be largely handled locally (tutoring, community college, etc.) rather than punted up to the four-year school.

    Maybe it was 120 years ago; I’m pretty sure that after the Civil War it was in the single digits, and that high-school graduates around 100-150 years ago could be qualified to teach high school. I’m not a historian, I’m afraid.

    I just want to be sure we’re comparing apples to apples, at least insofar as you can still have apples after 100 years of knowledge and technology explosion. I think we have made losses and gains, and I’m not sure what you get upon totting them up.

  50. Mitch says:

    Another problem with the “expected to go to college” is that many of the scholarships etc. assume everyone is a traditional student (full-time, working at most part-time, entered directly from HS, is between the ages of 18 and 22, attends one school without transferring, graduates after four years, has a major all picked out despite knowing very little about what academic fields are available). Even if you are a traditional student, you need a knowledgeable advocate who will put some time into your situation. HS counselors often can’t do this.

  51. Mitch says:

    One stat I do recall is that 10% of those who received HS diplomas in 1998 had studied calculus. My dad is still convinced that I (and my classmates) were terribly advanced for having done a year of calc, but when I got to college I felt so far behind because I had to start in calc 3 and many of my college friends had placed farther up the tree.

  52. Amanda says:

    I don’t know if it’s just where I live. But almost _every_ ad on Craigslist looking for even an entry-level receptionist requires a BA. It’s absolutely ludicrous to think that you need to have gone to college in order to answer phones, but I suppose it’s a measure of the “expected” level of education (and I must mention that even in an Ivy League school I’ve met some real clunkers who would have been much better off at a vo-tech school) in America today.

  53. SwingCheese says:

    As far as teachers go, I’m sick to death of people maintaining that we have it easy, since we get out early (our days also begin early – we’re contracted for 8 hours a day, and are there before the students arrive and after they leave), and have 3 months off in the summer (2.5 actually, we go back before the students do, and often their breaks are our in-service meeting days, but that isn’t really the point). What people don’t see is that we spend a lot of time at home working. I often put in between 50-60 hours a week during the school year. Can I be compensated for money I spend for my classroom? Yes, for up to $200, but no more than that. Could I get a summer job? Of course. I also take classes during the summer, for which I’m reimbursed, but which are also required. I love, love, love my job. I wouldn’t trade it, and intend to stay in the profession until we have a kid. However, I didn’t know that I wanted to do it until I took a year off between undergrad and law school, and taught at a private school. I chose an MAT instead of a law degree, and I now have the student loans of law school, with the salary of a teacher. My student loan payments are over a fifth of my take-home pay every month. Again, this wouldn’t be bad situation if I were single, but I’m married, and my husband is a full-time student who, because of commuting, isn’t easily able to work while going to school. Did we make these choices? Yes, and being able to allow my husband the time to focus on his studies is very important to me. I’m pleased to be in the financial state where we have this option. Just don’t tell me how easy I have it as a teacher, and how my salary is appropriate. Our salary is not commeasurate with the nature of our profession, the amount of training which we are required to continually complete, and the amount of time we spend on our jobs each week. It is enough to get by, and a dual-teacher-income family can live just fine. But a single-teacher-income only family has to work to make the money stretch, and this, I feel, is the true reflection of the esteem in which society holds teachers, apart from the great accolades everyone heaps on us for putting up with a salary discrepancy that most acknowledge they would not put up with. I’m not a saint, I’m a professional teacher, and I’ll take an appropriate salary over complements any day.

    33K is the average salary around here. A starting teacher around here with a BA and no experience or graduate credit will earn around 25K. This is a well-paying district. And when my husband and I were looking into buying a house, I was certainly not offered any government help due to my profession.

    Oh, and while I’m aware of the option of teaching at an in-need school in exchange for forgiveness of up to 50k of my student loans, my certification isn’t in an area which many schools have, so it’s an option which I cannot exercise. Again, it comes down to your choices, what you love vs. your earning potential – getting certified in an area about which you feel passionate, or getting certified in an area which is more commonly taught, but in which you’re not particularly interested.

  54. Jennifer says:

    There are more comments on this post than I could possibly answer.

    I will say this. In New York teachers have to have a MINIMUM of a Master’s degree. If we want to change our teaching title (ie: become a library media specialist rather than a straight elementary teacher) we can expect to get an additional Master’s degree. I went to state college, nothing fancy, but I still have almost $90,000 in student loans. I wasn’t one of the geniuses, I was an average student. I took every scholarship I was offered, but most were not more than $500-$1,000 a year. Unlike many people I didn’t take assistance from my parents to pay for college. I figure it’s my education and I’ll pay for it. So now that $30,000 teaching job is paying $90,000 in debt plus regular living expenses.

    I’ll be the first to admit that the summers off is an incredible perk. I love the teaching schedule and there a lot of benefits.

    One thing noone has mentioned thus far is family. I’m working hard to pay off my student loans. My husband has his own loans, about half as much as I do, to pay off, so he works full time as well. We have two small children in daycare. Even in the rural area we live daycare still runs us almost $1,000 a month. That on top of a mortgage is A LOT!! However there is no option for me to be a stay at home mom during these early years because I have my loans to pay off.

    I’m not trying to feed you a sob story. We’re getting by. We’re not asking anyone else to pay for our loans, we’re both working full time in decent jobs. However the reality is that life happens. I did go to one of those ‘inexpensive’ colleges mentioned previously and I still racked up these bills.

  55. eR0CK says:

    Looking to the government for a handout because you chose a low-paying career?

    What’s next, making those in credit card debt out to be victims? Oh right, we’re already at that point.

    You’ll never see me begging for a handout, you chose your career, shut up and deal with it … my taxes shouldn’t be covering it!

  56. Mario says:

    “People need to take responsibility for low paying career choices.” I won’t argue with that, directly. I do want to point something out though.

    Making money for college so easily available (upfront) encourages people to make bad economic decisions and is the reason that so many jobs now require a college degree (as the supply of college graduates is greatly increased). Moreover, there is an incentive for school districts to push students into making career choices requiring college, as this makes their “college bound” statistics all the more impressive.

    But these poor economic choices fall squarely on those who make them, in a way that they don’t in other areas of the economy.

    If a person wants to undertake a business venture and needs to acquire a loan for it, a bank will take many things into consideration. Has this person a track record of being able to borrow and repay money; does he have any experience in this particular kind of business; what is the market like for this kind of business. If the bank does not like the answers to these questions, it will not make the loan.

    This isn’t out kindness; it’s because banks know that if the borrower’s plans go wrong, he can claim bankruptcy.

    Student loans, however, are completely different. A person could major in basket weaving and still be hounded for the rest of his life by creditors. Students are the only class of people not protected by bankruptcy. Your small businessman, corporate bogeyman, or idiot poker player are all protected from the bad choices they make.

    Why?

  57. mia says:

    so…if you take something easy in university, you should not have to pay back the money for the time you spend enjoying what was a relatively leisurely lifestyle? give me a break. just because you choose to take some bird course, study a few hours a day and spend the rest of the time socialising or sleeping in, does not mean the government (taxpayer) should foot the bill.

  58. I don’t think that there are ever any easy subjects at university, I think that it is all about media perception. I know trained physicists who tremble at the thought of doing a media related degree because they are useless at expessing themselves through words or presentation. We shouldn’t use our own prejudices to make a judegment on what is or isn’t a soft subject. That’s for a thougt provoking post trent, you make some interesting points

  59. Tasha says:

    I think several are missing the real issue here, that it isn’t fields are low paying, but that even those fields that are high paying, are often now sent overseas to low wage and even slave labor, so that corporations can make more profit and often escape worker’s rights and environmental safeguards, etc. As a nontraditional single mother student who wasn’t able to graduate due to Perkins [mess up on forbearance], I know too many people with good degrees working at Targets because there simply isn’t work in their field. I know too many adults who have filed bankruptcy and foreclosed due to job layoffs and downsizing. Degrees in high paying fields mean nothing in today’s economy…for those who were low income, especially women with children they are even worse off on average no matter What type of degree they have. While I don’t believe we should just write off student debt, we should do something about the ludicrous interest that is compounded and capitalized on. I find it amazing at those who assert that taxpayers foot the bill, which isn’t true, but what taxpayers Do foot the bill for, is for the corporate welfare, the government perks [Sallie Mae included], the military, the costs to police a society that is overburdened with crime contributed to low incomes/decaying cities, etc., and yes, the flow of illegal immigration that puts stress on much needed services often for those who are paying student loans [its a disgrace that paying student loans puts many women back onto welfare roles/food stamps just to feed kids]. Its amazing at how there is little rage over the increase of wealth on the backs of payees into student loans via ‘interest’ that not only are the original loans paid back but they are doubly and triply paid back…and yet, student fees go up, tuition costs are soaring, and walk into Any campus and just see the amount of brand new top of the line computer equipment and toys the administrations have…

    thats what taxpayers are paying for, yet no one balks at that. I’m sorry but someone needs to say it, college in this nation is a scam…so are student loans. Teachers get paid little because there is little value in education, the goal of education in this nation is not to produce thinkers, no, its to produce a nation of drones that will work for bare minimum and who will not dare question authority and will believe their benefactor, the government, has their best intents in mind.

    Meanwhile the Taxpayers, keep footing the bill [middle class workers and working poor especially] for the corporate welfare and perks and lobbyists who run our government. -

  60. Spikey says:

    Great Post, this stuff really is the next wave of the future.

  61. Kim says:

    I put myself through a small, reasonably priced private college – received a small grant and took out a total of $7500 in student loans and ended up working two jobs to cover the rest. I was creative with APs, CLEPS, night and summer classes to get through in four years. Once of my part-time jobs was in my field so I had experience when I graduated.

    I majored in engineering and about killed myself studying. I studied every night, every weekend, alone, in study groups. My liberals arts, education and business major friends went to bed at 10 pm (!) and spent a lot of time partying and socializing. Few of them worked during college other than the summer (and some just traveled during the summer.)

    My job has meant challenging work all day long (other than safety meetings!) and continuing education, I never go home after 8 hours – I usually work 50-60 hour weeks – I also (like the poor oppressed teachers) bring home work – I have to check in with the office during family vacations – I have moved several times to keep a job with the same company… but I get great insurance, vacation, other benefits, and a great salary.

    Some of my liberal arts friends have found good jobs (usually after going on to get another degree) but others complain about their student loan debt, their low-paying job, the lack of good benefits.

    RANT: But darn it, back in high school and college they laughed at the geeks who were studying like dogs to make the grade. They had a “fun” college experience and had time for frat parties and girlfriends. Those of us who sacrificed are now reaping the benefits. My dad helped me to choose a practical major and a college that I could afford. He couldn’t give me money, but he helped me to make wise choices to raise myself from lower middle class to upper middle class. I lived like a poor man until I could pay off my and my spouse’s student loans (another $15,000). We still live frugally and this allows us to have a large family, big home, newer cars, and the necessities.

    I’ve sent my kids to the local community college for their AAs and with tons of CLEPS and online classes they are getting bachelor degrees for next to nothing.

    My sister goofed around in high school and took the minimum classes required, in college she majored in art (follow your passion) – the snobbish art department talked her out of a practical degree in graphic arts – then she had to later go back to get her education degree. Found out teaching isn’t her thing – she doesn’t like kids. She got a master’s degree in religion because she couldn’t find a job. Now she works as a part-time secretary for minimum wage with no benefits, lives with my folks because they don’t charge for rent or food, and complains about the student loans she will never pay off in this lifetime. She has made choice after choice (many more I’ve not listed such as single motherhood) that has hurt her financial future. All she can do is complain “life isn’t fair” because the American dream told her she could pursue her passion and the money would just fall out of the sky. She ignored my dad’s advice at every juncture and did what she felt like. Now all of us working stiffs are supposed to subsidize her student loans and food stamps and WIC and stimulus checks etc. Give me a break!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>