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From the first day of school children are taught two things, to obey authority and if you want to make something of yourself, go to college. A large number of people go to college because they believe that is what they have to do, they've had it drilled into their heads that if you want to be successful, you go to college. If you can go to college, whatever the cost, you go to college. No one is forced at gun point to go to college but they are pressured into it throughout their entire lives, most people truly believe that they need to go to college to be successful, to end up with a spouse, a house and children, they think college is the only path. You can quit smoking, you don't have to drive, you can leave the army after a few years, but what you can't do is reverse the decision to take on student loans, they're just not comparable.

"drilled into their heads "

To add to this people also will have children they can't afford. Sometimes by "accident" and sometimes planned with the same thinking that "everything will just work out".

You also hear about someone who didn't want to have the nth child but now boy are they glad they did (not factoring in the impact on the rest of the family or other kids) or taking money into the picture. Simply because the nth child is alive and you can't imagine (once they are born) that you could have considered not having them.

What they are not taught is personal finance. Schools just don't teach it, with rare exceptions. I guess they figure it's up to parents to teach that, but when 7 out of 10 US households live paycheck to paycheck, parents don't know much about personal finance, either.

The good news is there are some solutions out there, and they're slowly gaining traction in a grass-roots style. One example is schools teaching the "Foundations in Personal Finance" curriculum [1].

But to make a big difference quickly, it needs to be more than just some schools here and there, but a national mandate to teach these sorts of things.

But ... I'm not going to hold my breath. To that end, I help volunteer leading these sorts of classes. Small moves.

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http://www.daveramsey.com/school/foundations/

Unlike the things you listed above, college isn't perceived as a choice. It's perceived as an obligation. Because of this, a myopia has set in among most students: "I need to go to the best possible college or kill myself trying." The decision is no longer theirs, it is the product of tremendous stigmatization, social pressure, and the nonstop inundation of students essentially from birth with platitudes about the necessity not just of education, but of the prestige that comes with an expensive education. The notion of college as a commodity product that needs to be evaluated based on value is foreign to people. As a student currently in the process of applying to schools who tends to associate with academically hyper-qualified students, I can tell you that most of them are taken aback if not totally incredulous when I say that going to my state flagship would be ideal.

Society has not equipped people to evaluate colleges rationally. I don't think it necessarily the fault of the students.

I agree that college isn't perceived as a choice, but I do question why it's the fault of anyone but the student if they apply only to $50k/yr schools, ignoring whatever their state schools are. Is it the schools' fault for accepting students who can't afford it?

Is it the loan companies' fault for trying to provide loans for students who likely can't pay them back? If so, should loan companies be able to discriminate based on which major a student chooses? Or on their GPA? Or likelihood of landing a job that pays $X/yr?

Is it the government's fault for not stepping in to make sure that a student can't get a loan that they can never hope to repay?

Ultimately I think it falls on a student for making a bad choice. I agree that it sucks that a student can't discharge the loan (as someone mentioned above). I'm not really sure how to fix that: if it's dischargable, loans are going to be a lot harder to get, then the government needs to provide the loan. Then we get a mixture of the two scenarios I mentioned above.

But I guess as a person I am a big believer in personal responsibility. You make your choices, just like I've made mine.

Up until recently (at least I hope it's finally starting to change) students were told that money doesn't matter, just borrow as much as you need because college is always worth it.

After years of hearing this repeated to them, they do think they are making the responsible choice.

For a long time it was true that college was always worth the money.

Colleges were not places of opulence: they were spartan collections of smart hard-thinking people. If you were smart enough you could go there with them. You would pay a small amount of money, but everything was done very simply, so it was cheap.

Even for the people doing things like art history, it was still a good value, because there were so few people doing art history that many could find jobs doing that. And even if you couldn't get an art history job, hey, you still had a college degree: not many people had that, and you didn't get it to make money, you got it because you liked the pursuit of knowledge. That was a valuable signal.

As soon as people expected it to always be worth the money, that's when the seeds for disaster were sown. There was no reason for a college to not charge more and more and more, because the students kept on coming. They even saw a higher price tag as an indication of excellence.

Likewise, going to college is no longer an indication of a strong pursuit of knowledge, or even basic smarts.

It's a giant credential chase, and the people a credential chase hurts the most are the poor.

> but I do question why it's the fault of anyone but the student if they apply only to $50k/yr schools, ignoring whatever their state schools are.

State schools aren't at $50k/yr (for in-state; some are for out of state), but they're not dirt cheap either. 4-year universities averaged a 15% tuition bump in 2011[1]. Median base tuition in 2011 was over $11,000, which does not include the thousands in miscellaneous fees, books (which are all "customized" for each school or only available as a non-downloadable ebook), online course software licenses, and mandated laptops that must be purchased.

> Is it the loan companies' fault for trying to provide loans for students who likely can't pay them back?

Yes and no. It's actually the government's fault for enacting legislation that forbids discharging he loan in bankruptcy. That completely removed the bank's need to do any risk assessment and price/approve loans accordingly. This in turn removes the incentive for schools to remain cost competitive, because their constituents have virtually guaranteed access to limitless capital. I don't have time to dig for it now, but I saw a graph not too long ago that showed tuition prices and average loan debt over time, which showed a considerable increase when that legislation was enacted.

[1] http://collegecost.ed.gov/catc/Default.aspx#

I winced at this quote in the article:

"Nobody sits down and explains to you what it all mean."

That kind of attitude is a problem, and instead of focusing on fixing the system, which I'm not denying is unfair and flawed, we could be focusing on changing this kind of attitude; that you're absolved of responsibility because of ignorance. Teaching kids how to think critically about their future, and that they have control over their own lives is invaluable.

As one extremely indebted person I feel insulted by this.

Mostly, because here in Brazil at least, when you decide what college you will go, you are 17, and here you cannot drive at 17, or smoke, or join the army.

I went to the cheapest college I could find on my field, and I STILL did not had enough money to pay it, so I had to either drop out, or take loan.

Here in Brazil everyone taught us you NEED college (now that I do have a degree, that I noticed how this is utter bullshit, and I certainly won't tell that lie to my children), and my parents told me that if I refused to go to college, they would only allow me to stay at home if I got a job, any job, even a cashier job or something like that.

So, I took the loan.

Now, I DO wish I went with the cashier option. I would have more money now (despite getting 300 USD/mo in wages, that is the cashier wage here).

Even better would be if I had decided to get into construction (blue collar construction work here averages 2500 USD for entry level, while 2500 USD in programming is only for seniors and onward).

Of all people that went to high-school with me, the richest one is the only guy that went with blue collar route and not even tried college (he is a machine operator in a factory, and owns his own motorbike).

The reason why he was the only one that did that? Well, he was the only one that the parents let do that. All others (including me) got the threat of be kicked out of home if we attempted that.

Instead of arguing culpability vs gullibility, how about the government just not try and take advantage of people? How about the government actually work for people instead of trying to rip them off with terrible rates? I would like to live in an America where government actually understands the cheap long term investment that is an educated populace. And instead of offering them loans with terrible conditions offerred them loans with good conditions at good rates.

It's not about whether the students were stupid to sign onto loans with bad conditions. It's about why we don't have better loans for students and why school costs so goddamn much.

> "Whatever happened to personal responsibility?"

Nothing. But we've long since drawn a line between reasonable expectations of responsibility and being the victim of fraud, deception, etc.

One can certainly argue that college loans haven't crossed that line. But society as a whole has rather moved past arguing whether or not the line ought to exist and whether or not we're all better off for having drawn it.

In America we believe that if we spend twice as much on health care it will be twice as good, same goes for education. The reality is is that the quality stays the same and the price doubles.

> Should more be done to push people into in-state schools, where tuition is often orders of magnitude cheaper?

State schools have rapidly become diploma mills over the last 10 years where tuition has sky rocketed.

> No one forced them to go to college, especially not one that leaves them $40k in debt.

Spoken like someone that has taken a blind eye to the societal pressures we've continued to put on each other: "go to college, get the job."

There have been laws, prohibitions and taboos against usury since time immemorial, and for good reason. It's a dangerous thing. "Personal responsibility" is manifestation of this same societal impetus to restrain debt, in this case as an internal constraint.

But with something as dangerous as debt, redundant constraints--internal and external, customary and statutory--are preferable to a single line of defense. I don't want a stable society predicated on the ability of 18 year olds to accurately predict their future circumstances 30 years out.

>Whose fault is that? They didn't read what they're signing for? Isn't that their own damn fault? [...] No one forced them to go to college

Yes, but it was an offer they couldn't refuse. One of my favorite results from game theory is that sometimes more options lead to everyone being worse off. Let me explain.

Suppose in scenario A only the very wealthy or the very smart and dedicated (scholarships) have the option to go to college. Most of the workforce will not have a bachelor's. The employers will require such a degree only for those jobs where it's strictly needed, and make do with training programs etc.

In scenario B, everyone has the option to go to college on expensive loans. Some people take this option. It turns out before long that employers prefer to hire these people, even in fields completely different from their major, for reasons such as: 1) finishing college becomes a signal of reliability and competence instead of wealth 2) people who need to pay off college debt will quit less readily. Before long, the college graduates' obvious advantage in the labor market pushes everyone else to try and attend college, which further drives up costs and loans. This only accentuates factors 1) and 2) above, e.g. with strong pressure to attend college and possibility to do so, it means you're either lazy or not that bright if you don't.

And so we reach a situation in which only 27% of working college graduates have a job related their major [1], 35% work in a job that requires any college degree (which clearly indicates the degree is only used as a signal), and 38% are screwed up by paying their loans from jobs that only need high school or less.

[1] http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/20/o...

Yes, but it was an offer they couldn't refuse.

Not quite that simple - students have tons of choices. They could choose a school with a lower tuition. They could stay in-state so as to avoid the much more "out of state tuition". They could opt for a degree with a higher chance of getting a job. They could opt for a degree with a higher average salary. They could work full-time to pay off the loans while they go to school (as my wife did). They could live with their parents instead of paying rent/dorm.

That would be fine and dandy, except employers discriminate against lower-tuition schools and even those are getting more expensive each year.

This is absolutely true. Graduating from a top tier (most of the time that means private) school will give the person a tremendous amount of leverage in their job search, and greatly increase their chances of landing a high-paying job.

What that means is that telling the students to "just go to a lower-tuition school" simply perpetuates the current class system and undermines social mobility.

It's not just job search. One of the things I've discovered in the process of interviews + networking in the consulting and finance industries is that the graduates from the elite schools are their own tribe.

We all seek each other out when we're starting out and that provides an invaluable personal network to start off and grow with. I feel bad for the few people I see who aren't from the feeder private Ivy League tier schools because they have to start from nothing and even if they're successful they'll constantly face barriers.

I'll call shenanigans on that (at least in my experience). In this area (Boston), in my experience, there are 2 tiers of schools: elite and "the rest". Harvard, MIT, Stanford, etc. are all "elite" schools and move you to the top of the pile probably.

Beyond that, the school is in the "and the rest" category, and you have to dig a bit deeper: GPA, jobs, specific interests, etc.

"Undermining social mobility" because not every student can afford to go to a Stanford/MIT/Harvard $50k/yr school is.... a stretch. Sure, if every not-rich student was forced to go to University of Phoenix or a "school" of that ilk, maybe I'd buy it. State schools aren't really discriminated against that much (UMass has a great reputation (engineering/CS wise at least), U of Rhode Island, U of New Hampshire, as do the California state schools and I'm sure many, many others).

On one hand I agree with your sentiments but expecting an 18 year old to "take responsibility" and choose the right thing for themselves at that age is reasonable at first sight but doesn't take into account the reality of being a young adult.

How many young adults have the confidence, long term thinking and proper guidance to decide that they should go to a cheaper school?

At that age the percentage of people having that kind of maturity is very small (obviously in my opinion). Maybe you are in that small percentage. Now, like I said, you are absolutely right, ultimately it is their decision, but I wouldn't fully blame a fat person for eating that piece of chocolate cake when its been dangled in front of them all day.

If they can't take responsibility in this manner then they are not young adults; they are still children. Rather than infantilizing high school grads, there needs to be social pressure for them to rise to the challenge.

I agree with you. I like what Dave Ramsey is doing in this area. I just don't want to make a blanket statement that they made their choice so be it.

I would love to know how many of these students sit down with their career councilors at school. Even if they do, how many of these councilors actually give proper advice versus just saying "great idea, go to that school for your liberal arts degree, here's the student loans you need to fill out, don't worry about the $80,000 tuition, the loans will cover you."

I think that you are right that the real discussion should be how do we change the culture so that the right "social pressure" is there to allow someone to reject going overreaching with their school choice.

18 is where we as a nation have "decided" that a person is mature enough to make these kinds of decisions (except for alcohol, thank you very much Federal Aid Highway Act). At 18 you're your own person, for better or worse. I don't think coddling people any longer makes things better--eventually you need to grow up and be your own person and be responsible for yourself. At that point your parents have fulfilled their legal responsibilities to you, and you are responsible from there forward.

There are a lot of benefits that come along with being an adult, but you can't have it both ways: the benefits of being a child and no responsibilities but the ability to make decisions for yourself.

In this case, going for the Porsche experience is fine even if you can't afford it, so long as you are smart about it. Make sure you have a plan to pay it off after graduating, and make sure you have a contingency plan if you fail to graduate (you should find state schools with programs that you can fall back on before even starting at your "Porsche school").

The problem is people want the Porsche experience, and have a bizarre notion that they shouldn't have to do the planning and are entitled to just study whatever pleases them. Either of those two attitudes by themselves are more or less fine, but when you combine them then you get problems.

> No one forced them to go to college, especially not one that leaves them $40k in debt.

Have you looked at college tuition recently? In-state school will bring you $40k of debt. Private school is more like $160k. It's not a matter of students choosing expensive college over cheap college. They're all expensive.

Take a look at http://trends.collegeboard.org/college-pricing/figures-table...

For 2012-13 the average tuition for public in-state education is $8,655. Then add school fees and student housing & food and you can get to $10-15k per year.

Kids aren't out there shopping for luxury cars, they're buying whatever gets them on the road. And it can still bring crippling debt.

Why should the government decide what school is right for you?

On the flip side, perhaps the government should refuse to provide loans for programmes without accreditation from a professional organisation?

I absolutely don't think the government should decide that. I'd almost say though that the government should only provide loan assistance to state schools (not really willing to stand by that just yet, but it's worth a thought or two). But I'm just sort of questioning that if we're going to say that people aren't to be trusted on their own, that's usually when the government has to step in to set the rules.

Agree regarding personal responsibility. But it goes both ways: lenders should be held responsible when they make loans to borrowers who do not have a reasonable ability to repay a debt.

For all other classes of debt, the mechanism that enforces this responsibility is bankruptcy (or forfeiture of the property, in the case of a home or auto loan), but bankruptcy is not an option for student loan debt.

Eliminate the exemption from bankruptcy that student debt currently enjoys and you eliminate the student debt problem.

As a note, it was cheaper for me to leave Texas and move across the country to Oregon and pay non-resident tuition than it was to stay in Texas and pay resident tuition. Not every state has the same opportunities.

I'm not bemoaning my loans by any means. I consider them to be our generation's Indentured servitude contracts. I'm planning on paying them through the Income Contingent plan and working for a gov't or non-profit.

Here's some data, the report on defaults referenced here:

http://www.takepart.com/article/2013/07/08/student-loan-defa...

The institutions with the highest rates of default are for-profit colleges, about which nobody has nice things to say, and community colleges which most people will defend as a gateway to higher ed for those who had to work to support others or got lousy high school grades or whatever reason.

So... it's complicated.