College Tuition & Student Loans

I wanted to publish part of my conversation with mom last night. My comments over e-mail do a good job explaining my position on the issue of rising tuition costs and the heavy loan burden on American students.

[Conversation has been edited somewhat for readability.]

Me:

Check out this article on NYU [her alma mater]: link

The comments are interesting… people seem divided about whether students are to blame for assuming so much debt or if it’s unethical to provide 18 year olds with >$100k loans that can’t be cleared even by bankruptcy.

All I can say for certain is that the ROI of higher education is decreasing rapidly. I feel really fortunate and grateful that you and dad paid for my college tuition and expenses, but if I had to pay for it myself I would have gone to U of I or applied to 15 schools and shopped around for scholarships.

 Her:

I will take a hard line on this and say to prospective students, don't go to schools this expensive, just say no! 

My girlfriend's daughter is at Iowa and just finished an internship in London. I believe good, hardworking people will always do well.

Me:

Re: don’t go to schools this expensive – I completely agree, but the one caveat is that there’s an implicit assumption, almost mythology if you will, in this society that a premium education is always a good investment. And I think parents and other authority figures sometimes reinforce this too… perfect example being my friend [name redacted] who decided to go to [law school redacted] (ranked 23^rd overall at the time) without a scholarship instead of the [law school redacted] with a 50% scholarship (ranked 25^th at the time) because of the idea that a marginal improvement in program ranking is worth an additional $80-100k in student loans. Frankly – it seemed like I was the only person at the time who told him that was a stupid idea, and I bet he would have made a different decision if his family or professors had said “hey man, this is a sub-optimal investment, you will regret this later.”

So my point is that everybody needs to become better educated on how the costs of higher ed at an institution-to-institution basis compare to the benefits of that particular degree – not just the students themselves, but the authority figures around them who may be operating on outdated assumptions about the investment value of higher ed and reinforce those assumptions onto today’s 17-year-olds.

Debt might be a reasonable decision if the student has an opportunity to get an elite degree for that investment, but the last thing you want to say in retrospect is what I heard [name redacted] tell me one time: “You know what the worst part of going $35k into debt for a college degree is? All I got for that money is a degree from [university name redacted, but let's just say that they're not known for their research]…” 

Her:

Ps we saw the band Journey at Ravinia tonight.

I guess you can say that rising high school seniors should "Stop Believing" the hype about college degrees having high value regardless of cost.

For some really aggressive thinking on this topic, check out these posts by James Altucher. And also check out what the POTUS had to say on the matter this morning:

"Higher education cannot be a luxury. It's an economic imperative." —President Obama #MakeCollegeAffordable
— Barack Obama (@BarackObama) August 22, 2013

President Obama: Colleges that keep tuition down and provide quality education will see their federal funding go up. #MakeCollegeAffordable
— Barack Obama (@BarackObama) August 22, 2013