http://www.nytimes.com/2012/09/22/your-money/the-hidden-inheritance-many-parents-already-provide.html
"Indeed, without any family assistance in their 20s and 30s, people like her have little margin for error. They’re the ones who believed the well-meaning grown-ups who told them as teenagers and 22-year-olds to go to the best college and graduate schools they could. They accepted the gospel that any education debt was good debt."
Bingo.
My folks are both college-educated and members of the Silent Generation, born in the 1930s. All 4 years of their college education cost less than $10k each, actually more around $5k for all 4 years each, and this included room and board. This was back in the early 1950s, and before there were college loans available from the gov't or private sources. But it was also the time when if you had any kind of college degree, it was your pass to an immediate decent job with good prospects so long as you weren't a total idiot.
As time went on, college loans became available, especially in the 1960s. So economics kicked in. Just like the wage-price spiral, the credit-price spiral took effect and the cost of college went up as the number of consumers demanding it went up while the number of colleges remained mostly the same.
This was at least tolerable as long as decent jobs were at the end of the road and loan repayments were tolerable. What also helped was that the economy did not demand that many specialized/technical workers; just having a degree told an employer you were "educable" and that was enough for most employers. But then in the 1980s things started to change. Even as tuitions continued to rise and credit for college loans continued to expand, the economy began to contract and began to demand more specific kinds of workers at the same time. This continued into the 1990s.
My folks and others from their generation (eg: guidance counsellors) not in direct contact with this broader trend had no basis for giving me or anyone in my generation direction regarding college majors that would be of general appeal to employers. Majoring in anything and finishing college was to them sufficient to guarantee a graduate a decent-paying job with a good future and reliable long-term employment.
They (and others of their generation) were as surprised as I was to find The Rules were now very different. After struggling for a couple years in various low-paying jobs (I had majored in History) that kept me living in houses with 6 other people and barely making payments on my loans, I realized I couldn't afford not to do something different. Discovering from my various temp jobs I had an aptitude with computers (remember HyperCard 1.0?), I decided to go to grad school for an I.S. degree. I avoided half the new debt I would have incurred by taking a graduate assistantship but I had to take loans out still to meet living expenses. But this was debt worth going into because it was a marketable degree; my BA in History was not. But I can say those classes did do something for me other than get me and my folks into 10s of 1,000s of dollars in debt (my alma mater at the time was $75k for all 4 years, room and board included; now, it's now $150k and I probably wouldn't be admitted today). I learned that people rarely learn from history and so do in fact make the same mistakes over and over, and that by and large the larger the group of people involved in deciding or doing anything the more likely they are to make a really bad decision or do something really dumb. Of course there are a few stark examples of this not happening and they are so rare as to be singular sources of great collective pride that lasts sometimes for generations. That's how rare they are. Example: America's decision to enter WWII on the Allied side. Did you know that within the US gov't there was debate about entering the war on the Axis side, proponents believing it might be easier to deal with Europe under a single gov't rather than under multiple gov'ts? The attack on Pearl Harbor, possibly anticipated or known to the president, settled the matter. But had Japan not actually attacked Pearl Harbor, 20th century history may indeed be different. And to this day, making this huge, collective and correct decision remains a huge source of pride for America, perhaps our proudest.
So these are good things to have learned. But were they worth $75k, years of debt and a delay of entry as a significant participant in the job market by 6 years? No. The lessons I learned going to history and other classes I could have easily learned on my own time. And while it's true at the time there was no World Wide Web and thus no such thing as Wikipedia, there is now. Want to study History, Philosophy, Political Science, etc.? Just go there. It's free.
So if I had advice for anyone going to college today, it's this: For God's sake, make sure the kind of debt you are getting into (and your parents getting into also, most likely) is commensurate with what you are very certain you can make when you get out of school. Unless you have ever been in $100k of debt before you cannot possibly know what it's like to face a monthly bill of $900 just for your student loans. Do the math. Graduate with an unmarketable degree in the current job market and maybe if you are very lucky you can land a job making $8-10/hr changing oil at Valvoline (like I had for awhile, but back then it was $7) or a temp job, or work at a coffee shop. Living in an apartment or house, for example as I did, with 6 other people, paying just $100-200/mo. for rent, what's left over? $8/hr x 40 x 4 = $1280/mo., before taxes. After taxes at 25% it's $960. Answer: There's nothing left over. In fact, you're under water. And you have not even bought food yet, have no car, and no health insurance. All this of course is assuming you have no other means of support, like parents.
But how long can it last even if folks are helping? What if one or both of them also fall on hard times , like a job loss or major health problem comes up? You have to do something to get out of your mess, and spiraling debt problem. (When I was a recent grad, credit cards were easily obtained. Today, not so. At least back then, I could use them to buy food until I could get to a better place financially, and indeed I had over $10k in credit card debt by the time I got to that better place, just from buying necessities. But today, credit cards are much harder for recent grads to get, so they often can't use them even to buy food.) One way is the path I took. But graduate school used to be much easier to get into. Now the demand borne of job-related desperateness for places in grad schools has gone through the roof, and tuition has also risen commensurately. Like my undergrad alma mater, it's doubtful I could have gotten into my grad school alma mater today as well.
So what else do Millenials have? Many just don't have options once they have taken their one pass at college and incurred the nightmare level of debt it now requires. It's an expensive and harsh lesson our society collectively is whacking our young adults with at a very vulnerable time of their lives. But it's less of a "lesson" and more of an outright bludgeoning. We're the proverbial species feeding on its own young, but not just them, their parents, too. Colleges and unis are very much aware of how thoroughly unmarketable most of their degrees are today but quietly go about selling them to people they know lack the experience and judgment to discern what is happening to them. No one can understand except a rare few what the reality of post-college life is with the kind of debt they have incurred until they have had some experience with having debts. And the typical college student has had no such experience, and the colleges both know it and count on it. The ethics (funny how you can take classes in ethics in college, too) are highly questionable at best and willfully predatory at worst.
College is expensive-- too expensive to go into it without being fully advised and forewarned. More importantly, it should be seen as an investment in something you can be very sure will pay off. Tell me, would you buy $100k worth of a stock, borrowing the money for it in fact, unless you were very sure it'd pay off? If not, why are people so blase about throwing themselves or their kid into college under such terms knowing they are pursuing an unmarketable degree? If you want to study History, Philosophy, Political Science, Sociology, great, just do it without paying $100k for the honor. As I said, you can do it yourself with Wikipedia and spend your money on something that won't have you going to sleep crying and waking up screaming.
