This student loan debt crisis thingy is starting to scare me

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Re: This student loan debt crisis thingy is starting to scar

Postby TheHammer24 on Wed Nov 20, 2013 3:54 pm

My Google ads can't figure out if I want my loans forgiven or if I want to consume more education in high-tech fields, right now.
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Re: This student loan debt crisis thingy is starting to scar

Postby DontToewsMeBro on Wed Nov 20, 2013 4:10 pm

mac5155 wrote:Which is why colleges should consider dropping those programs to be the good "educational" citizen.


:face:
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Re: This student loan debt crisis thingy is starting to scar

Postby newarenanow on Wed Nov 20, 2013 4:12 pm

pittsoccer33 wrote:The second part is the other shoe dropping - parents who blew through their retirement saving over the last 10 years paying for college. Now they don't have enough to retire. Them not retiring is preventing others from advancing into their roles. Which is keeping entry level jobs from opening.


While true for some, my parents never touched a penny of retirement and are now both retired in their early 60s. I hope to be setting up for the same thing.

But I do agree, this may happen to some others.

I've honestly been very fortunate and I hope to pass that down to my kids.
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Re: This student loan debt crisis thingy is starting to scar

Postby tifosi77 on Wed Nov 20, 2013 4:17 pm

TheHammer24 wrote:My Google ads can't figure out if I want my loans forgiven or if I want to consume more education in high-tech fields, right now.

Haha, I'm going between loan forgiveness and Blue pet food.
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Re: This student loan debt crisis thingy is starting to scar

Postby mac5155 on Wed Nov 20, 2013 4:23 pm

i got a bass pro shops one. Not complaining.
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Re: This student loan debt crisis thingy is starting to scar

Postby ulf on Thu Nov 21, 2013 12:25 am

TheHammer24 wrote:
shafnutz05 wrote:
Kraftster wrote:
TheHammer24 wrote:Let’s assume the average person makes $60,000 - $70,000 a year, which I think is a modest estimate.


Really? That seems wildly optimistic.

You're probably right. I live in Chicago, where the median income is higher. Plus, you begin developing tunnel vision and fail to realize your friend group and colleagues aren't necessarily representative.

Humble brag
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Re: This student loan debt crisis thingy is starting to scar

Postby IanMoran on Thu Nov 21, 2013 12:52 am

Males had a median income of $35,907 versus $30,536 for females


Chicago.... its wiki though
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Re: This student loan debt crisis thingy is starting to scar

Postby Letang Is The Truth on Thu Nov 21, 2013 9:38 am

difference between median and average
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Re: This student loan debt crisis thingy is starting to scar

Postby Troy Loney on Thu Nov 21, 2013 9:45 am

what we need is the median income for people who have $100K in student loan debt. That is likely $60K. I'm sure there are plenty of people taking out loans to go to expensive schools and not getting jobs, but they are not the norm.
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Re: This student loan debt crisis thingy is starting to scar

Postby count2infinity on Thu Nov 21, 2013 10:03 am

Troy Loney wrote:what we need is the median income for people who have $100K in student loan debt. That is likely $60K. I'm sure there are plenty of people taking out loans to go to expensive schools and not getting jobs, but they are not the norm.


Again, I wouldn't say $60K starting out is the median. That's very much on the high side. $100 in student loan debt is also on the high side, so take that for what it's worth. According to this: http://www.asa.org/policy/resources/stats/ for a bachelor's degree the average debt is around 30K. So you may be talking about advanced degrees with 100K, in which case, 60K starting salary may or may not be right, depending on the advanced degree.
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Re: This student loan debt crisis thingy is starting to scar

Postby TheHammer24 on Thu Nov 21, 2013 10:34 am

Troy is right. The 30k median is super low for a college grad. That includes a lot of people who did not go to college. Also, harking back to my original point, I wasn't looking for a starting salary. I wanted the average salary during your repayment period to determine how much money you could allocate to other things.

Second, I have believed for a whole the 30k average debt is very misleading. I think it includes those Jose parents paid nearly all of their college and those with substantial other financial aid. That is part of the average, but not part of the problem. What we need is the average of people who financed greater than x% of their education.
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Re: This student loan debt crisis thingy is starting to scar

Postby Troy Loney on Thu Nov 21, 2013 10:38 am

TheHammer24 wrote:Troy is right.


Agreed.
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Re: This student loan debt crisis thingy is starting to scar

Postby pfim on Thu Nov 21, 2013 10:43 am

http://money.cnn.com/2012/04/03/pf/coll ... ates-jobs/

Members of the Class of 2012 are being offered median starting salaries of $42,569 -- up 4.5% from last year, a new report from the National Association of Colleges and Employers shows.
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Re: This student loan debt crisis thingy is starting to scar

Postby CBear3 on Thu Nov 21, 2013 10:45 am

My wife had $60k in loans for her masters degree in social work. Out of school she got a job paying $32k, and 6 years later she'd made it to $34k before being let go this summer.
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Re: This student loan debt crisis thingy is starting to scar

Postby Troy Loney on Thu Nov 21, 2013 10:49 am

CBear3 wrote:My wife had $60k in loans for her masters degree in social work. Out of school she got a job paying $32k, and 6 years later she'd made it to $34k before being let go this summer.



Social work is one of those fields where the education costs don't allign with the future wage expectations.
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Re: This student loan debt crisis thingy is starting to scar

Postby TheHammer24 on Thu Nov 21, 2013 10:51 am

Social work and teaching are two very prominent examples of that.
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Re: This student loan debt crisis thingy is starting to scar

Postby TheHammer24 on Thu Nov 21, 2013 10:55 am

50-60k doesn't seem too far off:

According to the US Census Bureau persons with doctorates in the United States had an average income of roughly $81,400. The average for an advanced degree was $72,824 with men averaging $90,761 and women averaging $50,756 annually. Year-round full-time workers with a professional degree had an average income of $109,600 while those with a Master's degree had an average income of $62,300. Overall, "…[a]verage earnings ranged from $18,900 for high school dropouts to $25,900 for high school graduates, $45,400 for college graduates and $99,300 for workers with professional degrees (M.D., D.P.T., D.P.M., D.O., J.D., Pharm.D., D.D.S., or D.V.M.).[25]


One important caveat: averages are misleading. Take law, Krafster and I have talked about this in law school threads, but the salary distribution is extremely bimodal. One mode starts in the mid 100s, while another mode (which is larger so it is technically the mode) starts in the 50-60k range. The average is about 80,000. But that doesn't capture than a majority of students have salaries inconsistent with their debt load, while another portion have salaries that can comfortably pay them. Looking at the averages would create too simplistic of a picture that suggests everyone has the same trouble with a similar debt.
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Re: This student loan debt crisis thingy is starting to scar

Postby Kraftster on Thu Nov 21, 2013 11:03 am

Yeah, law is probably the best example of that. Obviously it varies by city too. The high end starting salaries in Pittsburgh are probably closer to $125 than mid six figures, though I guess I wouldn't really know.
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Re: This student loan debt crisis thingy is starting to scar

Postby CrazyJoeDavola on Thu Nov 21, 2013 11:56 am

This is one of my favorite topics to rant about. I really think student loan debt is going to have major economic implications for this generation.

I have read through the thread and the reasons pointed out are all good. Overall, I think the most blame goes to the parents. They are so brainwashed into thinking that their kid needs to go to the best school and pursue whatever degree they want. It's not the job of an 18 year old to do that long term cost / benefit calculation. The parents need to guide them. Until this happens, the colleges have zero motivation to keep costs down or direct students towards higher paying majors.

I think the next generation of students will receive MUCH better guidance from their parents who likely paid off large amounts of student debt, or have close friends that went through the process. Personally, when I have kids looking at schools, I know I will be ruthless questioning colleges on their specific room and board requirements, mandatory fees, transfer of AP and community college credits etc. Too many parents today live by the philosophy of "oh well, I can't afford this, but it's what they want. That's what student loans are for. They'll be fine." I don't know how many baby boomers have told me that "I paid my student debt and you didn't hear me complaining." I'm completely guessing here, but college used to cost like one quarter of what it currently does in real terms. They're just freakin' clueless that they are ruining their children's financial future (I hope you like that cheap nursing home mom and dad).

Anyway, this idea is based in the fact that my fiancee had parents with this exact attitude. She has $136,000 in debt (undergrad and grad combined). They didn't pay 1 penny for her attendance and let her go to a private liberal arts school because it had a nice campus. Her loan payments come out to something like $1600 per month for 10 years. Fortunately, she got a public sector job in a public school (through strong coaxing from me), and will qualify for forgiveness after 10 years if everything works out. Her current monthly payment is about $750 taking into account her Income Based Repayment for the federal loans and her Private Loans. Had she taken a non-public sector job or that program didn't exist (it actually didn't exist when she started school, so she is LUCKY that it has since been created), she would be facing life altering / crippling debt.

Both of her sisters have similar stories. Both are struggling, and one is defaulting. It is just insane that parents, that otherwise did a great job, would let this happen. I feel like this isn't an isolated incident. /End rant.
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Re: This student loan debt crisis thingy is starting to scar

Postby count2infinity on Thu Nov 21, 2013 12:25 pm

TheHammer24 wrote:Social work and teaching are two very prominent examples of that.


Yeah, one of the biggest issues with teaching is that if you want to do that job, you have absolutely no way to do it without a bachelors (and then you are also forced to eventually get a masters in some states). I think I could have taught things like middle school math and science right out of high school, but you cannot get a job without the degree. I'm sure there are many many fields that are like that, but this is one example that I see because I went through it. You don't need the degree to do the job, but you can't get the job without the degree.
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Re: This student loan debt crisis thingy is starting to scar

Postby PensFanInDC on Thu Nov 21, 2013 12:28 pm

This thread is amazing. I had no idea how high these payments were. I'm a knucklehead non-college grad with no student loan debt. Same with my wife. We've both been able to secure decent paying jobs without the benefit of education although our growth and pay are certainly victims to the lack of a degree.

Makes my mortgage payment seem not as bad.
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Re: This student loan debt crisis thingy is starting to scar

Postby Letang Is The Truth on Thu Nov 21, 2013 12:32 pm

so people that manage their school debt, mortgage payment, save for kids' college, etc what % of your gross pay do you allot to each?
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Re: This student loan debt crisis thingy is starting to scar

Postby pittsoccer33 on Thu Nov 21, 2013 12:35 pm

Letang Is The Truth wrote:so people that manage their school debt, mortgage payment, save for kids' college, etc what % of your gross pay do you allot to each?


and do you ever have money left to have fun?
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Re: This student loan debt crisis thingy is starting to scar

Postby Factorial on Thu Nov 21, 2013 12:49 pm

When loan forgiveness occurs, do the Feds still pay the banks? If so then the tax payers are subsidizing the colleges, banks, and employers much like the Feds are subsidizing employers by giving food stamps to employees making crap wages at WalMart, etc.
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Re: This student loan debt crisis thingy is starting to scar

Postby CrazyJoeDavola on Thu Nov 21, 2013 12:50 pm

pittsoccer33 wrote:
Letang Is The Truth wrote:so people that manage their school debt, mortgage payment, save for kids' college, etc what % of your gross pay do you allot to each?


and do you ever have money left to have fun?


Not really, fun is what ends up getting cut. At least for us. There's just no room in the budget if we want to actually have savings and build a future. I don't plan on having a real vacations for the 10 years that we are in repayment. It will be a no frills wedding. We go out to dinner maybe half a dozen times per year. When I go out for drinks I buy the cheapest thing on tap and limit myself to 1 or 2 etc.

Not to bore you with details, but we paid off some of her high interest private loans in advance. When you add in my loans (which aren't small, but are nothing compared to hers), we have paid about 25% of our gross income to student loans in the first three years of my career (she has been working for just 1 year). I realize that she is an extreme case, but this is going to start becoming more normal as debt number climb and starting salaries stagnate.

But it could be much worse. We actually have two good jobs. If we were underemployed, we wouldn't stand a chance.
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