Delaying retirement due to $265,000

Discussion in 'General Distance Learning Discussions' started by AsianStew, Oct 4, 2021.

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  1. AsianStew

    AsianStew Moderator Staff Member

    Ouch, this dad is in the hot spot or hot seat for this one... I feel for him but also feel it's partly their fault as the two kids could have gone to a community college first and then laddered up to the current university, or gone through alternative methods for the first two years, etc... but then again, this was in the mid 2000's, ACE options weren't as plentiful and the only option was AP/CLEP...

    Link: https://www.businessinsider.com/parents-student-deb-64-year-old-dad-parent-plus-loans-2021-9
     
  2. chrisjm18

    chrisjm18 Well-Known Member

    I find it hard to pity anyone with mortgage-sized student loans.
     
  3. Dustin

    Dustin Well-Known Member

    I'm very open with my kids about my finances. One of the things I tell them is that a) I have a [small] college fund for them and b) if finances get rough I will focus on my retirement savings before their college savings. I don't say that to be callous or cruel, but because there are no retirement loans. My kids can earn scholarships, get the Pell grant, and other forms of financial aid like loans but their mom and I can't do any of those things for retirement.
     
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  4. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    If you homeschool them, you can have them through one of the Big Three by the time their peers are going to college in the first place.
     
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  5. Dustin

    Dustin Well-Known Member

    Yes! Since joining DI and becoming more familiar with CLEP, Sophia, Study dot com, etc., we've also had that conversation. They can start earning credits so that they won't even need to deal with loans and that in the first place.
     
    SteveFoerster likes this.
  6. skirtlet

    skirtlet Member

    Multiple adults here, the parents and the kids with that $265K in debt, made their choice that unfortunately had consequences.

    My family put aside $0 for my education. I was adult and figured it out myself, though it's taken me longer.

    I can relate to middle class families who don't always qualify for financial aid, whether need or merit, and end up needing jobs, loans, or otherwise to make ends meet. In some ways, the middle class is 'punished' in terms of aid for college education since they're not "poor" enough to get much help at private colleges but not rich enough to pay. But, those are our options. We can still choose cheaper colleges, full-time jobs at universities with tuition benefits, etc. instead of going into huge debt for it.

    I think it's very rare these days for most families to be able to pay for all, or even much, of private colleges for their kids as much as they used to.
     
  7. skirtlet

    skirtlet Member

    Early 2000s had way fewer options for online indeed. Even finding info back then about things like Excelsior was much harder. Early 2000s was also a different economy with people having seen the dot com boom and easy money. It was easy to think that private school might've paid off then. Now, 265K seems like much more to me than it did back then.
     
  8. Neuhaus

    Neuhaus Well-Known Member

    I think people need to really reconsider how they decide who is worthy of their empathy.

    Lots of people make stupid choices. And just because you made a stupid choice once doesn't mean that person doesn't deserve empathy because they invited it on themselves. For all of the people who whine incessantly about the evils of for-profit schools and their crippling debt, the fact is that when I had student loan debt roughly 3/4 of it was attributable to my time at the University of Scranton with around $20k being due to finishing my degree at Colorado Tech. Of course, I was able to use my GI Bill for the latter but not the former, so that changes the math as well.

    The University of Scranton is an insanely expensive school for what it is. And yet, I went. It was most certainly not the wisest financial decision. Why did I do it?

    Because I attended high school near Scranton, I was aware of the place. The Wilkes-Barre/Scranton area has something like 14 degree granting institutions if you count the separate PSU campuses and the community and junior colleges. Scranton has a sterling reputation, regionally, as the best of all of them. Is this reputation deserved? Ehh, probably not. They had, at the time at least, the only AACSB accredited MBA in the area. Few of the other schools offered it at all and, when Wilkes University finally kicked off their MBA program full speed, I believe it was IACBE. It was also the only local option if you wanted to become a licensed mental health counselor, a guidance counselor or a few other specialized programs. Nearby Marywood University was (and possibly still is) your only local option for architecture, aviation administration and psychology (Psy.D.).

    Add to this guidance counselors telling you how you need not worry about how to pay for school. "Helpful" admissions people telling you that no one will be turned away due to inability to pay. I signed the forms I was told to sign so that I could enroll in classes. I never really questioned what I was signing because I was 18. These were quite literally the first legal contracts that had been placed in front of me. Even if I had read them thoroughly, the likelihood of my understanding them would have been exceptionally low.

    "But wait, Neuhaus!" I can hear you yelling at your screen "Isn't your mom a lawyer?" And, indeed, she is. At that time she was in practice for four years after many more years as a paralegal at the same firm. However, that also meant that my mother got to being a lawyer the hard way earning both her B.A. and J.D. part-time while working full time and raising kids. My mother wanted me to avoid her struggles. She wanted me to go and get my education and hit the ground running rather than "working my way up." Remember, when my mother was a paralegal it was a much lower paid job. She started there as a secretary before being trained along the way.

    My father was a police officer. And he only ever earned an associates degree in Police Science from whatever CUNY school offered that back in the day. Not only did he not know anything about higher education, he also didn't have to worry about his retirement. His retirement was assured through a police pension. The idea of "send my kid to college OR retire" was never a consideration for him. Moreover, when he did retire he ran up against numerous walls where even regular patrol jobs in some departments demanded a bachelors degree. He eventually became a prison counselor and that only once a state senator intervened on his behalf when the prison's HR department threatened to rescind his job offer because he lacked a bachelors degree (the hiring manager extended an offer and HR was throwing a fit after the fact).

    Both my mother and my father fully believed the words of admissions counselors who told them that the hefty price tag was worth it. That they would be negligent to let me go anywhere else. They believed the assurances that my earnings would justify ANY expense as long as I had the right school (i.e. them) behind me.

    And I got off lucky. I got off cheap. My classmates did not. Some of them do fine, of course. And some are working in call centers with six figure debt tied to them having paid ONLY for tuition (not room and board, not semesters abroad etc).

    Guys, these decisions aren't made in a vacuum. They are influenced by availability and by people who, we all thought, were unbiased professionals with our best interest at heart. The idea that an admissions counselor was more like a salesperson than an academic back then was a foreign concept. It is all the more reason, I think, why the pressure tactics of places like the University of Phoenix would shock people so thoroughly. The admissions folks at Scranton or Wilkes or Misericordia etc didn't need to pressure you. They simply walked you through the leafy quads and explained how you wouldn't be able to spend all of the gobs of money you were certain to earn after graduation. They were always the best. They were always highly sought after. Their alumni always did great things. They were HIGHLY selection (they weren't) but you might just have what it takes to make the cut (breathing? You're in).

    But we believed them. We believed them because our teachers and our guidance counselors told us to believe them. Our parents believed them because they told them that if they just signed on the dotted line that our lives would be easier than their lives were. That we would go farther than they did and do it much faster. It may not have been the smartest thing. But it was by no means unexplainably dumb. And it was a very easy thing to get yourself wrapped up in and something that may have taken years to fully realize how screwed you were.

    And, ask yourself, if you want the rest of us taking victory laps around you when you do something stupid. Be nice.
     
  9. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    Sage advice.
     
  10. BruceP

    BruceP Member

    I think this issue falls under the category of 'we all have different gifts'... for example... I couldn't 'carry a tune' if my life depended on it... but I do excel at managing my personal finances...

    I deliberately attended a state university for my undergrad studies because I saw the price tag of the private colleges as being totally unreasonable... My Vietnam Era GI Bill covered my tuition at SUNY without me having to go into debt... I was also a few years older than many of my peers in college and I had been on my own for a while... and I was the child of older Depression Era parents... thus my self-preservation instincts were perhaps a little sharper than that of my peers.

    I blame the system more than the student... the financial aid counselors push student loans as if they get a bonus for each one processed... I also think that parents should have also instilled a greater sense of financial survival in their children too (mine did... i.e. I've always been very careful with credit cards)... and that high schools and universities should be required to teach personal financial responsibility... perhaps there should be a required class PRIOR to getting a student loan or even committing to attend a private college...

    P.S. Compassion is a virtue.
     
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  11. Dustin

    Dustin Well-Known Member

    Interestingly, many states do now have mandatory personal finance courses (or units embedded in courses) in high school now, and there is a small amount of mandatory student loan counseling required before you get your federal loan to show you how much the monthly payment is. It updates before each disbursement.

    I don't think it's enough though, because you can sleep through it. It needs to be a deeper, longer conversation with family and friends rather than being a tick in the box.

    No easy answers for how to ensure everyone gets that exposure, though.
     
    BruceP likes this.
  12. Rich Douglas

    Rich Douglas Well-Known Member

    In the run-up to the 2008 housing bubble, banks--acting like admissions officials to home ownership--were telling people how much they "qualified" to borrow. As we know in retrospect, that didn't end well.

    In my not-too-humble-opinion, the big reason why raises higher education costs out-pace inflation is because (a) a huge imbalance of information (they know it; you don't), and (b) a lot of extra money chasing the product/supply. Again, like the 2008 bubble.

    But unlike the bubble, student loans are nearly impossible to discharge through bankruptcy, the balances don't get lowered if your education gets repossessed (as in, you don't graduate), and you're getting hammered by above-market interest rates you can't renegotiate (without going to the private sector and, thus, losing the protections you do have with federal student loans).

    The only thing missing is some washed-up boxer dropping by every once in a while to...ahem..."collect."
     
  13. Neuhaus

    Neuhaus Well-Known Member

    Just to add to this, there were two more elements that stack the deck against the average student (and often, their parents). The first would be misleading outcome data. I have made no secret of my criticism of King's College (Wilkes-Barre, PA not one of the many other similarly named schools). When I was in high school and making my rounds, I sat through a presentation at Kings where they showed us just how amazing their alumni were doing. They reported an average first year salary for graduates of their business school (at the time, undergraduate only. I don't recall if it was named by the point I went through) of $42,000/year.

    In an economically depressed area like that this was an astronomical sum. And that was a starting salary! Come to find out that they hired a disproportionate number of their graduates, particular of their business school, for one year term positions. Then you were on your own. Now, I cannot see into the hearts and minds of the administration. So I cannot definitively say that they were doing this specifically to boost their job numbers. However, that seemed to be a consequence, intended or otherwise, of this activity. Sure enough, once working in HR in the same town I found many people who fell for the pitch and were now unemployed or underemployed with a bachelors from a school that no one outside of the region heard of and often with six figure debt.

    Things like this, from my anecdotal observations, are not uncommon. This clever bookkeeping seems to range from "Well, technically true but..." to a few schools that got caught in outright lies.

    The other thing is how often admissions counselors would tell you that a state school was only slightly better than putting a prison sentence on your resume. It's a harder pitch in a state like Pennsylvania where the state schools have a very solid reputation. And where schools like PennState (not technically a state school but also not technically private. It walks some weird line in between) have a very strong draw. Yet, you still hear it. Little dink schools with no name would swear up and down that if your earnings with a degree from PennState were X then going to this elite institution would boost them even higher. Basically, small private schools try to position themselves as a local Ivy League.

    When you have parents who never navigated the college system as traditional students. And when you have parents who never, themselves, required student loans. And when said parents trust that the person in front of them is not a salesperson but a trusted academic with your child's best interest at heart....you sign the papers. They have such clever expressions to make it all sound so innocent. "We'll never turn away a student due to inability to pay" they say. "We can offer a full financial aid package that will include a combination of grants, scholarships, work study and loans." Then parents and students alike beam with pride believing this to be the "full ride" they often hear about.

    They lie to you. They massage your ego by making you think you are more sought after than you are. They make you believe that whatever they charge is just a cost of admission and you're going to make so much money it won't matter anyway. And they know that if you end up working at Starbucks or your parents end up unable to retire that you won't be able to do anything about it. You'll lack the political clout to ever change the system because the majority of people will say it was your own damn fault.

    It is, frankly, the mindset that keeps payday and title loans in business. Prey on the desperate and the ignorant and then criticize the victims for being both desperate and ignorant.
     
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  14. BruceP

    BruceP Member

    Had to laugh at this statement... The reality obviously depends on employment sector... and the geographic region that you're seeking employment in... for instance never once did I get the impression that my SUNY B.S. degree was substandard... of course it was no Harvard, etc. And of course I did not stay in my hometown long enough to compete with the local private college graduates... in the military one degree was usually just as good as another (unless you're up against an academy graduate).

    That being said I can definitely imagine the admissions counselors talking up their institutions and bad-mouthing the competition... kind of like the proverbial used car salesman.
     
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