Another reason to avoid student loan debt

**Greebo** · 03-23-2011, 10:04 AM

You may not even GET a job:
Educated, Unemployed and Frustrated

**bustedparts** · 03-23-2011, 11:01 AM

I watched the program Suze Orman did on PBS a couple of weeks ago and one guy in the audience stood up to ask a question about student loans. he went back to school thinking that with more education he would make more money. he already had about $25,000 in student loan debt from his previous degree. after he finished his second degree (which cost him $75,000) he said he thought his life would get better. sorry to say he was wrong. he did not find a job in the field for his degree and he now has $100,000 in student loans to pay. the worse thing was that he works a job that makes less than my husband, he said he makes about $22,000 a year. he was in tears by the time Suze was done with him.

**Nishu** · 03-23-2011, 11:28 AM

That's what you took away from that article? Wasn't there something in there about potential revolution and possibly a violent overthrow of the U.S. government?

I read it once but I can't get into it now. It's telling me to log in.

Btw, anyone else remember this poster? I wonder where people get the idea that a degree is going to pay for itself.

**Greebo** · 03-23-2011, 11:46 AM

Originally Posted by Nishu

That's what you took away from that article?

Yeah, it was the only part grounded in reality.

**a.nonymous** · 03-23-2011, 05:31 PM

For a research associate, Matthew did a poor job.

The "about one fourth" of under 25 being unemployed is also a number based on officially released numbers and, therefore, the real unemployed numbers are due to be much higher.
But the most important factor is how many of the overall population that is. In the middle-eastern countries, the age pyramid is still intact which is quite a far stretch from the age structure in the "western" countries.

Add to that the fact that the main underlying reason actually was the raising prices for basic necessities - and no, I'm not talking about cable TV as we westerners tend to believe being a basic necessity - such as staple foods having seen a roughly four-fold increase over the past decade alone, the attempt to draw parallels to the western world falls quite a tad short.

I also had to laugh at the "countless all-nighters writing papers". Yeah, right. We all know that the all-nighters stem from procrastinating the work instead of starting early. I have limited sympathy for bringing that argument into the field of play. And I am saying that as a chronic procrastinator myself.

What is true, though, is that as IF the governments to work to balance their budgets (good luck seeing that happen ever), the young generation will indeed bear the grunt of the burden. They (or we?) will have to spend a longer time in such a difficult system than the elder.

**scottp999** · 03-23-2011, 06:34 PM

Great post Greebo. People really need to re-evaluate the cost benefit and return on the investment in education. When I say investment, I would hope that most would consider the time they have to put in and the capital. It gets worse when you introduce leverage (loans) and all the special rules that benefit lenders in the student loan area.

I consider the start of this downturn when the private MBS market locked up in August 2007, since it was a very large part of the bond market, and overall MBS was even bigger than the US Treasury market.

College classes of 2008, 09, 10 and soon to be 11 are piling up trying to find jobs that just don't exist any more.

In addition, per some of the government statistics the number of non-farm jobs has not changed in almost 11 years. That's a horrible things when you consider the populations growth along with older people waiting to retire longer to make up for significant net worth losses due to the economic downturn.

**Nishu** · 03-23-2011, 08:15 PM

Originally Posted by a.nonymous

For a research associate, Matthew did a poor job.

The "about one fourth" of under 25 being unemployed is also a number based on officially released numbers and, therefore, the real unemployed numbers are due to be much higher.

Those figures are wrong. It's about 25% for teenagers 16 to 19, but for adults 20 to 25 it's much less. (And I doubt very much that these 16 to 19 year olds are walking around with unused degrees.) For adults with a bachelor's degree or higher, it's barely over 4%. For the least employed group, those with no high school education, it's 15%.

I'm not sure where this guy got his numbers.

http://www.bls.gov/news.release/pdf/empsit.pdf

I'd like to read it but it's asking me to log in again.

**Nishu** · 03-23-2011, 08:16 PM

According the BLS, adults with degrees are still faring better than the rest of us.

**scottp999** · 03-23-2011, 09:16 PM

Originally Posted by Nishu

According the BLS, adults with degrees are still faring better than the rest of us.

That's evident, but its (this thread) more about the amount of leverage you risk to put that degree in your pocket, and the amount of thought going into the major you select.

Lots of great experienced programmers out their with political science degrees or even high school diplomas, but try coming out of school now without a BS or MS in Computer Science and see that it is 1000 times less likely you will get the opportunity that so many got in the 1990's and early 2000's when the level of education is all that mattered and not the major.

Many things are less liquid than they were just a few years ago with housing being the most obvious, but the degree is less of a liquid asset as well in terms of how many people will accept it as pertaining to a specific job, and the over supply of degrees in relation to the number of jobs that will pay you for that education level.

Even more than before, finding a way to pay as you go, or use tuition reimbursement are very important options to consider vs. the buy now, pay much more later mentality that has been prevalent for quite some time.

**Nishu** · 03-23-2011, 09:31 PM

Originally Posted by scottp999

That's evident, but its (this thread) more about the amount of leverage you risk to put that degree in your pocket, and the amount of thought going into the major you select.

Lots of great experienced programmers out their with political science degrees or even high school diplomas, but try coming out of school now without a BS or MS in Computer Science and see that it is 1000 times less likely you will get the opportunity that so many got in the 1990's and early 2000's when the level of education is all that mattered and not the major.

Many things are less liquid than they were just a few years ago with housing being the most obvious, but the degree is less of a liquid asset as well in terms of how many people will accept it as pertaining to a specific job, and the over supply of degrees in relation to the number of jobs that will pay you for that education level.

Even more than before, finding a way to pay as you go, or use tuition reimbursement are very important options to consider vs. the buy now, pay much more later mentality that has been prevalent for quite some time.

This is true, except that I wasn't talking about this thread, I was talking about that guys statistics. And if you went solely by his statistics, it wouldn't be evident that college grads under the age of 25 would be better than the rest of us, because the 11% he's quoting would be a higher unemployment rate than people with some college and people with only a high school diploma. They would only be beating people with no high school diploma at all.

You're right about all that stuff and you probably would have written a better article. My point is that this guy just seems to have made up some of his numbers.

**Greebo** · 03-24-2011, 06:57 AM

Meh - 72% of all statistics are made up on the spot anyway.

**scottp999** · 03-24-2011, 07:46 AM

Originally Posted by Greebo

Meh - 72% of all statistics are made up on the spot anyway.

Yep - some have been long term deceptions as well, including GDP, Employment, and CPI. If you go take a peak down the rabbit hole to learn the details, you completely understand the ignorance is bliss idea.

**HeatSeeker** · 03-27-2011, 12:59 AM

Originally Posted by bustedparts

I watched the program Suze Orman did on PBS a couple of weeks ago and one guy in the audience stood up to ask a question about student loans. he went back to school thinking that with more education he would make more money. he already had about $25,000 in student loan debt from his previous degree. after he finished his second degree (which cost him $75,000) he said he thought his life would get better. sorry to say he was wrong. he did not find a job in the field for his degree and he now has $100,000 in student loans to pay. the worse thing was that he works a job that makes less than my husband, he said he makes about $22,000 a year. he was in tears by the time Suze was done with him.

I've never understood why Suze feels the need to kick people when they are already down. I like her, but she disturbs me a bit.

At any rate, I have a high amount of loans, and I'm not giving up hope yet, that my degree will work for me. It is impressive, even to my meager employers, but the recession was not the beginning and certainly won't be the end to the story of the economy.

**Greebo** · 03-27-2011, 07:07 AM

Well, sometimes people who are down need a good kick to make them get up again...

**MsMarieH** · 03-27-2011, 12:08 PM

I certainly understand not taking on $100K in student loans to find a $25k a year job in social work.

It would definitely be my first preference to pay as you go.

However, there is no question in my mind that some student loans are definitely worthwhile and greatly increase your earning potential. I do think it can be worthwhile, but I don't think it should be the first resort and I do think you have to look realistically at that ROI.