College Days

For those faithful readers who have stuck with me after two recent blogs about finances, please hang on.  Hopefully this will be the last on that topic for awhile.  I recently went to purchase a pair of shoes.  As I was trying them on the salesman began to unload about his daughter.  It seems that she chose to go to Marywood University to major in art.  According to the university website, the costs for four years there would be about $372,450!  Wow!  Hopefully she had some financial aid or scholarships.  But he had agreed to pay her way and was now working hard to try and pay off this debt.  The bad news is that as an art major, the only job she has been able to get so far is working as a cashier at Lowes.  She could have gone to Kutztown and earned an art degree for $69,760, a difference of $302,688 - and she still could have gotten a job at Lowes.  He told me that he now regrets not having said "no" to her when she made the choice.  The Brookings Center on Children and Families has recently said that 1 in 5 colleges had a negative return on investment. The lifetime earnings of an education or arts major working in the services sector are lower than that of a high school graduate.  Actually 14% of high school graduates earn at least as much as people with bachelor's degrees. Recently I heard Dave Ramsey, the Christian financial guru, say that the biggest mistake that parents make with their children is letting them as 18 year olds choose where they want to go to college, especially when the teen only has about $60 in the bank.  I personally think that the second biggest mistake is agreeing to pay for their education. I don't think parents owe them that.  Look at these recent college statistics from American Student Assistance. *Approximately 20 million Americans attend college. *Approximately 12 million borrow money for college. *Approximately 37 million former students owe money today. *Of those under 30 years of age, 14 million former students owe money. *An average student loan is $24,301. *About 25% borrow more than $28,000, 10% more than $54,000, 3% more than $100,000 and less than 1% (167,000) more than $200.000. *Of the current students paying back debt – 40% are under age 30 and 42% are older. Seventeen percent are older than 50. *30 percent of those who took out loans haven't finished school.  When it was time for me to go to consider college my parents couldn't afford to send and pay for me.  However, they agreed to pay my room and board for four years whether I commuted or went away to school.  I chose to go away but I had already been saving for college for several years by working numerous jobs.  In addition, I earned scholarships, worked on campus, and held summer jobs to pay my bills.  I did borrow about $1,000 but that was paid back within a few years.  When it came time for my three boys to attend, I made the same agreement with them.  They chose to commute but they were still responsible for tuition, books and other fees.  I think accepting the cost of my education made it more important and meaningful to me.  And in earning my way I learned some valuable life lessons.  Personally, I don't think parents owe a college education to their children, but I guess I am in a minority today.  Prospective college students should work for scholarships and hold jobs to earn what they need.  They should choose a college which they can afford.  They should choose a major which will be marketable.  Or maybe they could skip school for a year or attend a community college for a year or two.  There are many sensible and financially sound ways to get a degree. College is still a possibility and one can graduate without a lifetime of debt for the student or parents.  And it is possible to earn a degree that can get you a job.  Anything else is a very sad use of time and money.  Unless, of course, our government is your model for your finances.