Monday, April 11, 2011

Student Loans, the Next Bubble

In today's NY Times, Student Debt Mounts, Shifting Graduates' Options.


  1. Part of the problem is that many parents and students are being told, and believe, that they must go to a namebrand 4 year institution. Mediocre students opt for expensive 2nd and 3rd tier schools when they might be just as well served either a) doing two years at a community college and CLEPing out of as many general ed. requirements as possible and then finishing up at their local State U. or b) skipping college altogether in favor of learning a trade.

    Few parents want to put a "My son opted to be a plumber rather than rack up $100K in Student Loan Debt to attend Boston University" sticker on the window of their Volvo station wagon. You should see the jaws drop when I outline my "city college/CLEP test/State U." plan to other parents. They take it as gospel that their kids must have this 4 year idyllic college experience in order to be successful. And that the 4 year degree will guarantee "success." But a hard reality is beginning to come to light: Many, many graduates of expensive, name brand universities are ill-prepared to really turn a buck in the marketplace upon graduation. It was true 20 years ago when I went to college and it's even more the case now. When students and parents wake up to that reality it becomes very difficult to justify either the parents or the student taking on a crippling load of debt.

  2. From PsychMom:

    Well said Kim. I'll add that it was true when I graduated with a masters degree 25 years ago as well. It was the most shocking thing in my life to realize that I was unemployable because I had "only" a degree and no exeprience. I floundered for 8 months trying to keep busy job hunting and doing minimum wage jobs (I had a hard time getting those too, because "you'll just leave when you get a real job").

    My very pragmatic, bored easily child analyzed her future after a year in kindergarten.

    "Mom? How long does a university degree take?"
    Fours years usually, I said.
    "And how long is college?"
    It can be as short as two years, but can be longer, I said.
    "I think I'll go to college" my then 6 year old said.