Student Loans-In Need of a Fix?
Yesterday we talked about many of the problems inherent with student loans in our society. Today I’d like to share some common sense ideas. Do note, I’m just a mom and I’m not a professional. Also: there are plenty of websites dedicated to finding financial aid for college, do your research before starting school.
These suggestions are just a few ideas for parents of the recent high school graduate who is now wondering what to do next. The examples are real life people whose names have been changed, particularly to save the foolish ones from embarrassment.
- Not interested in college? How about a technical program. Some are found through private programs but many are available for reasonable tuition at the community college (see next bullet). This week Lou Dobbs has a special on FNC discussing the job situation. There is a great need for skilled workers: machinists, mechanics, in the health care field, craftsmen and more. In recent years our children have been told that a four year degree is the only way to achieve quality employment. Our leaders seem to have forgotten that this country still needs to build, repair and care for both objects and people.
- Tom had no desire to attend college but he liked working with his hands. In his town was a trade school. Tuition was less than $4,000 per year. In less than two years Tom had a certificate in tool and die manufacturing. He has had steady employment since school, paid his school loans and now bought a house.
- Are students prepared to attend a university? Can they afford to attend a university? Community colleges in Arizona charge nearly 1/4 the tuition as the state universities. They offer freshman and sophomore courses for the student who desires to continue beyond an Associate’s Degree. If a student does not have college savings and is not eligible for scholarships or financial aid attending community college offers a great savings. Many students also choose community college for a specific degree or certificate which allows them to begin working as they continue their education.
- Allen is attending the state university but quickly saw the downside of student loans. He attended the community college EMT program held during the summer and was able to find a hospital job where he could work and attend school. After a second summer school program he now has a benefits eligible job at the hospital and they are paying his college tuition.
- Mary is paying for college herself. She works two part time jobs to pay for tuition while living at home. She attended community college and has now transferred to the state university. Through careful use of her money Mary has not needed student loans.
- Are parents adequately preparing students for life beyond high school and employment? Some graduates are looking for jobs that start mid-scale or beyond. Are we parents raising the expectations unrealistically? Perhaps, we have given our children so much they expect to continue a lifestyle that used to come with time and effort. Are parents encouraging their students to get some work experience? Employers want to hire a person with known ability to handle a job. Especially, in these challenging economic times, why should an employer hire a new grad when he can get someone with years of experience?
- I have no tales that can beat the example of this Wall Street Protester:
- There is a great deal of scholarship money available for minority students or those looking for a particular field. Where there is great need there are often more scholarships and aid available (e.g. TEACH for America pays part of loans in return for work at rural or low income schools). Are students being encouraged to apply for scholarships? Filling out forms and answering essays can be a tedious process but the results can be very helpful. Our government also offers the generous Pell Grants to those financially eligible. They’ll cover up to 12 semesters tuition. And don’t forget that the military will pay a great deal of college costs after an honorable discharge. They also offer scholarships (in return for future service) for specific degrees. With recent cuts to the DoD the military is able to be more discriminating in who it accepts. Still, for those interested, it may be worth the effort.
- Some parents choose to allow their student to do their own research and make all their own decisions. Personally, it seems a little parent intervention might help kids make better choices. Allowing a student to fail or miss a scholarship/financial aid opportunity may teach a point but does it help in the long run? You don’t have to be a helicopter mom, hovering all the time to remind your student of the down side to procrastination.
- Are parents sharing some of their world experience with their college bound students? Do the students understand how interest compounds? How much less will be owed overall by paying down the principle a little each month. Just because someone is eligible for a loan to cover more than the cost of school does that mean she should take it and then use it on a shopping spree? Do you really want to be paying for those clothes for the next 20 years? If all your costs are being paid by loans does it make sense to attend an out of state school? An Ivy League school? Is the degree at a specific school that much better than at a local school? (In Arizona annual tuition for residents is about $9,000; non-residents $22,000, while two area private schools charge between $16,000 and $22,000.)
- An acquaintance of my daughter accrued over $96,000 in loans by her third year in college because she chose to attend an out of state school. She wanted to be a physician but couldn’t afford further debt for graduate school loans. The end result for this student was that she changed majors and applied to the nursing program expecting another two years of school.
- And speaking of degrees, are students being encouraged to look at what kind of job their major will offer? Some businesses want to hire people with a college degree and are not picky which one. But… Where can one work with an Art History degree? Life Sciences? Philosophy? If there are jobs related to the degree are there many openings? Maybe every boy wants to be a paleontologist, but how many are there in the US?
- Libby qualifies financially for full coverage under the Pell Grant program. Right now she wants to be a musician and is taking two or three classes each semester related to singing and writing music. At the rate she is going she will run out of Pell funds before she gets an associate degree. Additionally, no one seems to have explained the low odds of finding a job as a musician.
- A number of my daughter’s friends wanted to be doctors. Their undergraduate degree is in Life Science. Eighty percent lost interest along the way. Some changed their major to one where they could find a job after graduation. Others got that degree in Life Science and now are discovering they are not qualified for any specific job. While some companies (e.g. UPS) merely want all their employees to have a college degree, more are looking for a specific skill set. Of the students who are now floundering, some are returning to school to become teachers while others are looking at health care field options.
- Lastly, when looking at loans it might be a good idea to consider what income bracket your future employment will be. Common sense should prevail, if starting salary will be less than $50K and it will cost $120,000 to attend private university, you may have a hard time paying back your loans. (Refer back to private vs state school costs.)
- One student I know attended a private school to become a teacher. After four years she owed $100,000 in student loans and found it very hard to start paying back when her job only paid $33,000 (starting teacher in AZ at the time). She is now teaching at a Title IX school (for the loan repayment benefits) and living at home trying to get ahead.
This column has generated a great deal of interest. I will post some of your well thought comments in a conclusion later this week. I promise Part 3 will be much shorter. . .