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Here’s my rule for student loans: Parents and their students should limit total student loan debt to no more than one times the student’s expected average annual pay over their first ten working years.

Here’s how it works: if you expect that on average over the ten years following graduation, you’ll earn about $50,000 a year (for example starting out at $30k on year one and ending at $85k on year ten), then your student loans should not exceed $50,000 when you graduate…and less is better. Keeping college loan debt within this limit ensures a reasonably affordable payment and payoff within ten years. To stick to this rule students (and their parents) should consider lower cost college options, such as in-state schools and community college for their first two years. A college education is typically a good investment in a student’s human capital, but over investing can cause them to be hopelessly mired in debt, resulting in significant long-term financial damage. Keeping college loan debt within this limit ensures a reasonably affordable payment and payoff within ten years.

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brittanyforks:

“Students graduating in 2008, 2009 and 2010 are facing the worst job markets in a generation at least. And so you have people with more debt that we have ever seen before, who are having a harder time finding any job, let alone a job that pays them enough to somehow pay off all this debt.”

*Money* quote from Danny Schechter:

"The danger here is instead of capitalism, we end up with serfdom, because these students are indebted for life."
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austinkleon:

Higher Education?: How Colleges Are Wasting Our Money and Failing Our Kids
Looks like a good one: Book review: Higher Education? - WSJ.com:
A lot of criticism of academia hasn’t stuck in the past, Mr. Hacker and Ms. Dreifus imply, because people have almost unthinkingly believed in the economic power of the degree. Yes, you didn’t learn a lot, and the professors blew you off—the reasoning went—but if you got a diploma the job offers would follow. But that logic may no longer be so compelling. With the economy tightening and tales of graduates stuck in low-paying jobs with $50,000 in student loans, college doesn’t look like an automatic bargain….”We think a low cost should be a major determinant in any college decision,” the authors wisely conclude, for “a debt-free beginning is worth far more than a name-brand imprimatur.”
Get the education you need for as cheap as you can get it.
PS. The book authors also have a blog.

austinkleon:

Higher Education?: How Colleges Are Wasting Our Money and Failing Our Kids

Looks like a good one: Book review: Higher Education? - WSJ.com:

A lot of criticism of academia hasn’t stuck in the past, Mr. Hacker and Ms. Dreifus imply, because people have almost unthinkingly believed in the economic power of the degree. Yes, you didn’t learn a lot, and the professors blew you off—the reasoning went—but if you got a diploma the job offers would follow. But that logic may no longer be so compelling. With the economy tightening and tales of graduates stuck in low-paying jobs with $50,000 in student loans, college doesn’t look like an automatic bargain….”We think a low cost should be a major determinant in any college decision,” the authors wisely conclude, for “a debt-free beginning is worth far more than a name-brand imprimatur.”

Get the education you need for as cheap as you can get it.

PS. The book authors also have a blog.

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austinkleon:

The writer does mention that partially, this is because Americans are paying down credit card debt, but this is still pretty wild. Here’s something you don’t often see advertised:

student loan debt, in many ways, is different than credit-card debt. These loans typically can’t be discharged in bankruptcy. They have different repayment terms, some of which can catch some have heavy consequences for borrowers who miss payments and borrowers’ families.

Some other good (and frightening) WSJ articles on the topic:

When Student Loans Live On After Death

As the college season nears, throngs of parents and students still are applying for private student loans, long used by students as an alternative to federal loans. But they may be unaware that in cases where the student dies, the co-signers often are obliged to pay off the balance of the loan themselves—a requirement typically not found in federal loans.

The $555,000 Student-Loan Burden

Unlike other kinds of debt, student loans can be particularly hard to wriggle out of. Homeowners who can’t make their mortgage payments can hand over the keys to their house to their lender. Credit-card and even gambling debts can be discharged in bankruptcy. But ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.

Thanks to @jamesfflynn for passing on the article.

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Yes, another article about the higher education bubble, focusing on the tenure system:

Tenured and tenure-track professors earn most of the money and benefits, but they’re a minority at the top of a pyramid. Nearly two-thirds of all college teachers are non-tenure-track adjuncts…. It is foolish that graduate programs are pumping new Ph.D.’s into a world without decent jobs for them.

To borrow a line from the article, “Ready to grab that pitchfork yet?”

(via Matt Thomas’s must-read Sunday NYTimes Digest)

(via austinkleon)

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“College” by Animal Collective, from their album Sung Tongs

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Clips from The Simpsons ragging on grad students
Bart! Don’t make fun of grad students, they just made a terrible life choice.
—Marge Simpson

(via @mattthomas)