The good news is she will be majoring in Mechanical Engineering with a concentration in CS and EE. Still we want student loan amounts to be reasonable.
Met a young person recently that got a sociology degree and had >$100K US in loans. She is making like $30,000. This is totally absurd.
So I dropped out and am now working for a recently funded start-up, making a decent amount of money with promises of more if I can work at a level that can elevate the company itself. I intend to finish a different degree over the next ~3 years (CS -> Philosophy). Needless to say none of this would've been possible had I not spent thousands of hours learning software development in my free time, such that the degree I ultimately get, or if I even have one at all, is much less important.
However I don't blame my parents at all for my poor decisions. I think today's youth need to be taught financial responsibility.. some how. Maybe mandatory minimum-wage work during high school? I don't know. This is all so ridiculous you would think it could only happen in theory. Financial institutions finding a way to take hundreds of thousands of dollars from the adult population using their children as a proxy and the parents being grateful to do it..
Here while rooms might be only slightly bigger than a jail cell (room for one single bed, a desk, small closet and a bathroom w/shower); they also cost less and students get their privacy. They still share a kitchen and other spaces.
It is like student housing in the US is still set up like it is really cheap but actually costs insane amounts of money.
That's insane. The whole point of on-campus housing is to provide very cheap but spartan accommodations. If nearby apartments are cheaper, there's no point to it.
Dorms are also becoming increasingly luxurious in some cases. In my old college suite, we had maids come by every morning to take out our trash and recycling and every weekend they'd thoroughly clean the entire bathroom, shower, sinks, and toilet. Just to be clear, these were private bathrooms in individual suites that they'd clean, not just the shared communal bathrooms.
1) Opportunity cost: The land on campus, due to being near campus stuff, has appreciated a lot in value, so it doesn't make sense to use as dorms (instead of whatever else) unless you can charge out the nose for it.
2) Access to loans "for education" is easy to get, and this counts as part of the education package, so students figure to pay for not having to park or to walk as far.
One practical benefit is you can roll out of bed 20 minutes before class, skipping the morning commute and hour of looking for parking (oversold lots), then walk home after class. You live at school. I've never done this.
And everyone who lives around you is a student and maybe not a couple with a wailing newborn in the middle of a divorce arguing every night at 3am, a group of problem teens with working parents that hang out outside your door smoking and being obnoxious (both the kids and parents), or someone who locks their howling dogs in the bathroom for 10+ hours a day during their shifts.
If you couldn't spend your student loan on housing, you can bet rent would be lower.
I never understood this. If a person doesn't have the discipline to wake up early(unless he/she has been studying all night), further incentivizing their laziness is barely the solution to their problems.
And let's be frank, staying living at school doesn't translate to more time for studies. It generally means you waste more time with friends.
But for the individual with a massive student loan and no way to repay it is a problem even if they better the world overall.
Part of the problem is that for some majors supply massively exceeds demand. Stem definitely isn't immune from this issue.
Unfortunately due to politics nobody (schools or government) is up-front about where jobs exist and shortages occur. A lot of the time when you hear about a "shortage" it is actually just whining that wages are too high.
There's no absolute fixed quantity of any good or service (including labor in particular job roles) that is "correct"; "shortage" and "market clearing cost higher than I prefer" are actually equivalent concepts, not things that people misleading conflate.
She has zero undergraduate debt. But that is because I took a pay cut and went to work for the university she went to. Tuition was free. I'm very glad I made that decision. As mentioned about my youngest is getting an Engr degree so the free tuition does not count because where I work does not have a Engr program.
You wanting to do what you want has nothing to do with how much you might get paid for doing it.
I believe a full perspective of any degree should include its potential impact on a students social life, because lets face it it's a contributing factor to why students want to go to college and IMO we derive a lot of our happiness (especially at that age) by our social interactions.
That said with love and support like the kind you seem to be providing, she should be able to succeed at anything.
She is driven by the desire to change society for the better and thinks she can do this via a mix of engineering and political policy influence. She has experience lobbying at the state and federal level already successfully. S this is what drives her.
All of this is complicated by cost factors and home much grant and loans are offered. The final weeks in April will be stressful as the financial aid award letters come in. Exciting but nervous times.
Edit: If you search online, there is a lot of info about subsidized vs unsubsidized, income based repayments vs standard repayment, etc, but not of the (small) sample of sites I looked at explained repayment in simple terms of what does my monthly payment go towards (principal vs interest).
That's one of those really basic things that I'd bet well over half the adult population of the US couldn't explain, if asked. Like how marginal tax rates work.
Once one has taken algebra (and paid attention) to the point of studying compound interest, one should be sufficiently forewarned about loans.
As for your remark about half the adult population: I truly fear you may be correct (it may even be greater - half the population has an IQ of only 100, after all. What IQ is required to understand compound interest? And then there's the training - making sure it is in place). If so, then perhaps stronger vetting systems for obtaining loans should be put in place.
All in all, good arguments for increasing the numeracy of the population at large and, barring that, putting mechanisms in place that prevent them from unwitting personal fiscal disasters. Unfortunately, to do so in the USA would be viewed as a form of fiscal, and therefore, political discrimination, so the disasters will continue!
Which leaves only increasing numeracy, Which is well-nigh impossible. Which leaves the task to our not-yet-here AI personal assistants to warn us not to make bad loans. Indeed the best argument for AI may be that we shall need AI to save us from ourselves, in ways both big and small.
This is one of the reason why as an Indian, I decided not to do my MS in the US. Though I could have. The reason is simple, you will rake up a huge loan back home in India.
Most of friends who came to US for their MS had only horror stories to tell. A loan amount too huge to pay off working a job in India, perennial stress of paying off that loan(often taken against a house/plot in India) and doing small part time jobs for food and sustenance in restaurants. Add to that a good college is beyond affordable, and a degree in By-The-Freeway college is next to useless(but still costs a lot in Indian money). After all that you will be stuck fighting a Visa system, with a multi year green card struggle.
And even after all this, while you are in your late 30's(or early 40's), you have to buy a home(and pay those loans for the remainder of your enjoyable life), worry about retirement, getting kids settled and save for health care expenses.
What are they supposed to do? These days you absolutely need a college degree to have a chance in the workplace so you have to take the loans if you like it or not. No options besides having a rich dad.
If that number is still too high they should earn credits at a community college and transfer into the state university after their Sophomore year.
I get incredibly frustrated when you have people complaining after they chose to forgo their own state's perfectly decent university to go to another state's. You get practically the same education for 5x the price.
So add another $10K to your number.
I'm sure there are arguments to be made about just getting out of small states, but rarely are such simple-minded solutions useful for issues like this.
Personally, I think loans are a red herring. I think it's an arms-race between academic institutions and increasing tuition [0]. Adjusted for inflation, even the so-called affordable state schools have increased 14% over the past five years. Private schools actually went up less, when adjusted for inflation, but I'll let you RTFA.
The only glimmer of hope is that state schools have almost kept up with inflation for the past three years, and if the trend continues tuition might STABILZE for the next few years at roughly 25% more than it cost to earn a degree 30 years ago. Seriously, what the fuck?! How do you account for that?
[0] http://trends.collegeboard.org/college-pricing/figures-table...