WARNING: Student Load Forgiveness is Very Unlikely to Pay for Your Next Elk Tag

[longbow51]

Cheap labor and low regulatory schemes are kicking our asses. Our university output is the greatest in the world and about the only reason we are still in the game given the first point. Our school financing system sucks as does the proliferation of worthless majors, but the caliber of engineers, chemists, lawyers, doctors, mbas etc we mint are the envy of the world.

I should have been more clear. Yes, our universities do excel in STEM, hard business (finance, process management, etc.), and in medicine, at least until we dropped the requirement for high MCAT scores; we'll see what the future holds.

I was commenting on education in the US in general.


This data is before we locked our schools down.

U.S. students’ academic achievement still lags that of their peers in many other countries

U.S. students continue to rank near the middle, and behind many other advanced industrial nations, in international math, science and reading assessments.

www.pewresearch.org

 

[Deleted member 28227]

Not if every employer has a bias toward either having the degree (which is warranted because it tends to show some measure of aptitude or motivation) or a bias towards some schools over others. Sure, the business degree from South Dakota State is the largely the same as the business degree from Stanford, but if employers think there is a difference then it changes the NPV calc.

@wllm Endowments are used for a lot of things, like expanding and building new facilities. There is a problem where schools somehow feel the need to compete in the endowment arena, size and returns. If they plow endowment $ into keeping tuition low, the endowment won't last long. We also have to be honest and say that alumni can direct where donations go and those for many schools would rather see a state-of-the-art facility build for the athletics program than they would a science facility or library.

I could give a rip about my Alma Mater's buildings, they were crazy nice decades ago they don't need improvement. The $280k price tag on the other hand...

On the risk side of things, how do you rate PE oil and gas lol

 

[SAJ-99]

I could give a rip about my Alma Mater's buildings, they were crazy nice decades ago they don't need improvement. The $280k price tag on the other hand...

On the risk side of things, how do you rate PE oil and gas lol

I agree, but facilities attract "talent"- both at the professor level and student. I guess my point is we need to look at what we value as a society, because that dictates where we allocate resources. It should come as no surprise that typically the most highly paid public employee of almost every state is a state school football or basketball coach.

Highest-paid public employee by state 2023 In The USA

Highest-paid public employee by state 2023 In The USA. The highest-paid state employee in your state is probably a football or basketball coach and by a wide margin. A state employee is an individual who is employed by an agency in any branch of a state government.

kamerpower.com

I can't find any articles on CU hiring a physics professor or how many accounting students passed the CPA on first try, but easy to find this...

Colorado hires Deion Sanders as its new head football coach

Colorado took a moonshot that landed with a bang, hiring Deion Sanders as head football coach. Sanders spent the past three years at Jackson State.

www.usatoday.com

 

[Wind Gypsy]

I think the problem is this is unique, cheap schools, and what happens when people decide that these schools are the best option? Do schools in the Dakotas start having 1% acceptance rates?

Affordability is an outlier.

Compare your Alma Mater with CU. CU has a 2+B endowment, the Colorado State Land Board doesn’t allow public access to state lands ostensibly lease those lands to fund education, yet CU is incredibly expense in-state. It’s so expensive that we moved to Montana because out-of-state MSU tuition was 1/2 of in-state CU.

CU is more representative of where public universities are as a whole.

I find it extremely f-d that schools aren’t using their endowments to subsidize tuition and instead are investing millions in high risk PE Oil and Gas companies amongst other things.

What am I missing? $5760 - $8496 per semester at CU-boulder doesn't seem outrageous at all for in state tuition.

 

[Deleted member 28227]

A few thoughts.

This is not true for all the Ivy League graduates. Actually many of their graduates have shown up with some of the worst debt to income ratios in recent assessments - primarily in the liberal arts programs.

Definitely true for those in the top 3/4th in their professional programs - doctors, lawyers, engineers, mbas, etc. As for the bottom quartile - not everyone who did well in high school makes it in the real world.

Really only applies to the Ivy League and maybe 10 other Ivy-like brands (think UChicago or Standford). After that large state schools do as well as any.

The big lie is that paying $70,000 to go to the 45th best school is some how better than paying $15,000 to go to the 175th best school. A complete fiction made up by US News and college admissions offices. That data is just not there.

I rather liked my hyperbole thank you very much

Yes I totally agree, I think it also matters what your major and career goals are, as far as which school gives you the best options.

A BA in Econ from Midd or Williams has a much higher ROR than a BA->MBA does from University of Oklahoma. The former are direct feeders to investment banks and you can get a job right out of college that pays well. The later does basically nothing for you and you have to figure it out on your own.

Conversely if you want to do Emergency Medicine, BS at CU or MSU etc -> CU Med -> residency at CU is a much better track. A BS from Williams has zero value add on that track.

But again how many 18 year old's know this... or know what they want to do, and why are we giving them a 200k unsecured loan.

Kinda unrelated, but an example of how truly screwed up our loan system is... there is a vibrant reddit community of how to deal with your student loans.
A big issue are parent plus loans where parents are on the hook for their kids student loans.
These loans, unlike regular student loans can't be put on an IDR plan and therefore qualify for 20/25 year forgiveness. Basically the fed didn't want parents retiring, having their income drop, then just waiting the loans out.

So what a lot of parents are doing, is taking out an additional $1000 of student loans and enrolling in a community college course, then consolidating these direct student loans with their parent plus loans. Now they qualify for REPAYE and in retirement their monthly payment becomes like $85 a month instead of $1500. They die with the loans, but who cares at that point.

Point being the current system is totally jacked up.

 

[VikingsGuy]

I should have been more clear. Yes, our universities do excel in STEM, hard business (finance, process management, etc.), and in medicine, at least until we dropped the requirement for high MCAT scores; we'll see what the future holds.

I was commenting on education in the US in general.


This data is before we locked our schools down.

U.S. students’ academic achievement still lags that of their peers in many other countries

U.S. students continue to rank near the middle, and behind many other advanced industrial nations, in international math, science and reading assessments.

www.pewresearch.org

We have to remember, 17 yr olds in Singapore and Belgium who are bad at math haven't been in school since they were 14. They aren't taking the test. A lot of this data is skewed because we push kids to stay in school while most other nations force the bottom half out through staged testing as early as 8th grade.

 

[Wind Gypsy]

Or kept making payments that now went 100% to pay down the principal.

I'm with @rjthehunter on this one. Interest rates in savings accounts are approaching 4%. If one is determined to pay it off, why not just make payments to an online savings account in lieu of making payments on principal? If they end the freeze, make lump sum payment from savings account that otherwise would have been made monthly.

This is a basic math problem that we were taught to calculate the options with our Ti-83 calculator in 7th grade. I have a hard time even blaming lack of financial literacy teaching in public schools for people's inability to grasp these things. People can't be bothered to do basic math to help themselves and then expect others to bail them out for their shitty decisions.

 

[VikingsGuy]

I'm with @rjthehunter on this one. Interest rates in savings accounts are approaching 4%. If one is determined to pay it off, why not just make payments to an online savings account in lieu of making payments on principal? If they end the freeze, make lump sum payment from savings account that otherwise would have been made monthly.

This is a basic math problem that we were taught to calculate the options with our Ti-83 calculator in 7th grade. I have a hard time even blaming lack of financial literacy teaching in public schools for people's inability to grasp these things. People can't be bothered to do basic math to help themselves and then expect others to bail them out for their shitty decisions.

Wow - send me the name of that bank.

But yeah, I agree you should always compare the value of your $$ in different places. But remember, the principal you didn't pay off is carrying 6+% interest for the next 10 yrs after the forbearance period ends so it isn't just comparing to savings return (unless of course you take the savings and pay the principal on the last day of forbearance.).

 

[Deleted member 28227]

What am I missing? $5760 - $8496 per semester at CU-boulder doesn't seem outrageous at all for in state tuition.

Tuition doesn't really mean much, it's everything else that's baked in, but for reference MSU is $3863.

All in a year at CU is mid 30s to low 40s for a year for a resident while MSU is like $25,000 for a resident and $46,000 for a non-resident.

IMHO $120,000+ total cost of attendance for a state school degree is a lot... which is actually like $160,000 total repayment on the standard 10 year plan.

A resident student graduating CU in 2023 who chooses the standard plan will need to pay $1332 a month in student loans. So in pre-tax dollars that's like ~20k a year.

 

[Deleted member 28227]

Wow - send me the name of that bank.

UFB is 4.55%
Citizens is 4.00%
Citi 3.85%
Barclays 3.6%

 

[VikingsGuy]

Tuition doesn't really mean much, it's everything else that's baked in, but for reference MSU is $3863.

All in a year at CU is mid 30s to low 40s for a year for a resident while MSU is like $25,000 for a resident and $46,000 for a non-resident.

IMHO $120,000+ for a state school degree is a lot.

First quarter at NDSU, tuition and fees $264. Paid for it with summer job money. How times have changed. Now I will spend more on my kid's college than my father earned in his lifetime. That NDSU diploma has paid off with an amazing ROI.

 

[Wind Gypsy]

I mean in that scene the other guy is actually correct, in real life intelligence and aptitude mean little. Connections and the ability to navigate/ exploit your social network are as important as anything. Going to Harvard “vets” you for all future employers and gives you a social circle with access to money and power.

Even if you just party your way through school at an Ivy you are likely to far and away exceed the earnings of someone who worked their butt off at a state school… see every VP of Goldman. I think you can make a good argument that playing lacrosse is a better use of your time at a NESCAC or Ivy than being a biochem major, based on ROR for your time.

I agree with the general sentiment but I think its a little overstated. I've spent a couple years with Goldman Sachs as a customer recently and the VPs i interacted with didn't have Ivy league educations.. Have a work "friend" who's in his late 30s with just an undergrad from Boulder that's running a $3+ billion company and making well into 7 figure annually. These are not exceptions in my line of work which admittedly likely skews my perspective.

 

[DouglasR]

But again how many 18 year olds know this... or know what they want to do, and why are we giving them a 200k unsecured loan.
totally jacked up.

We need to change the culture of telling kids the only way to be Happy in life is to go to a 4 year college straight out of high school.
Go find yourself and figure out the value of a dollar first.

 

[Wind Gypsy]

Tuition doesn't really mean much, it's everything else that's baked in, but for reference MSU is $3863.

All in a year at CU is mid 30s to low 40s for a year for a resident while MSU is like $25,000 for a resident and $46,000 for a non-resident.

IMHO $120,000+ total cost of attendance for a state school degree is a lot.

How? You can't rent a room for 9-12 months for less than a grand/mo in Boulder? Are groceries that much more expensive?

 

[Dakotakid]

Can anyone name the highest paid State employee in Michigan?

 

[DouglasR]

If you walked into a bank at 18 and asked for 100k for a car, truck, house or other tangible asset that you can actually sell, you’d be laughed out of the place.
But they’ll give you that money to buy “ideas” lol
#thispointhasbeenmadeamilliontimes
#beatingadeadhorse
#addingnovaluetotheconversation

 

[TOGIE]

Can anyone name the highest paid State employee in Michigan?

i'd venture a guess that it is mr. harbaugh

 

[Deleted member 28227]

How? You can't rent a room for 9-12 months for less than a grand/mo in Boulder? Are groceries that much more expensive?

In boulder... you serious. They probably exist but I think current rates are like $1500-$2000.

 

[Deleted member 28227]

I agree with the general sentiment but I think its a little overstated. I've spent a couple years with Goldman Sachs as a customer recently and the VPs i interacted with didn't have Ivy league educations.. Have a work "friend" who's in his late 30s with just an undergrad from Boulder that's running a $3+ billion company and making well into 7 figure annually. These are not exceptions in my line of work which admittedly likely skews my perspective.

I'm being wildly hyperbolic and just highlighting nepotism.

 

[Deleted member 28227]

If you walked into a bank at 18 and asked for 100k for a car, truck, house or other tangible asset that you can actually sell, you’d be laughed out of the place.
But they’ll give you that money to buy “ideas” lol
#thispointhasbeenmadeamilliontimes
#beatingadeadhorse
#addingnovaluetotheconversation

I bet if I gave my daughter $200k to start an excavating business she'd probably make more during her lifetime than if she went to college.

Money while the center of this discussion, isn't necessarily the primary goal for folks when picking their careers.