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 Shelter Dog Lover
Posts: 10277
  
| I agree, college costs are too high but as a parent who also had 3 in college at one time, our kids had to go where we could afford. The short version of this article is their 3 chose to go to expensive private schools, they had no savings to pay for it and did not quailify for financial aid. They had $500K in student dedt. One daughter has 150K in student debt for a music therapy degree, has graduated and earns 34K. Dad lost his job but they took out a laon on thier house to pay for eldest daughters wedding. They are now complaining about their debt but not the decisions they made to get them there. To me it is no different then spending money you don't have on cars and clothes.
Student debt nearly destroyed this family's finances.
View photo Valerie (left) and Peter Shippen (right) were $500,000 in debt after financing their children's college education. (Photo: Valerie Shippen) Valerie Shippen thought she was being frugal when she agreed to pay for only one year of college tuition for each of her four children.The 49-year-old Ipswich, Mass., schoolteacher and her husband, Peter, an electrical engineer, both went to college and graduate school. They wanted to do whatever they could to give their children the same opportunities. They assumed they would get help from financial aid, but like many middle-class households, their bids for federal financial aid were denied. It didn’t matter that three of their four children were in college at the same time — on paper, they looked better off than most, though their reality was far different.“All three kids were in college all at the same time and we didn’t have cash saved up,” Shippen says. “We had to finance everything.”SInce each of their three kids decided to attend private universities, their financing options were limited. They could have taken out private loans, which would have meant higher interest rates and fewer flexible repayment options. But when they found out the schools participated in the federal direct loan program, they opted to take go with Parent PLUS loans instead. They borrowed just enough to see their kids through their undergraduate degrees, with the understanding that each would pay off 75% of their loan balance after graduating. (Parent PLUS loans allow parents to take out student loans under their name on behalf of dependent undergraduates).With all three kids attending private universities, their collective student debt bill quickly grew to more than $500,000. Two of their children have managed to pay off their debt since graduating, but the couple is still strapped with more than $150,000 worth of loans and will add more to their load when their youngest son graduates next year (though, thankfully, he went to a public school). When Peter lost his job briefly a few years ago, they came close to losing their home and refinanced their mortgage in December to help pay for their eldest daughter's wedding. “It has just killed us,” Shippen says. “We have no retirement savings. We’re on a 25-year repayment plan and still paying $1,700 a month. It’s like having another mortgage payment.”Although their loans are federal and they have the option to apply for an income-based repayment plan, the Shippens were told their combined income was too high to qualify. Their story is extreme but not altogether uncommon.As much as parents want to give their kids a leg up in college, the reality is that college costs have increased by nearly 30% over the last five years alone. This has happened in tandem with the Great Recession, which many families are still recovering from.And when their savings are tapped and there’s nowhere else to turn to put their kids through school, parents can be just as likely to use loans to make up the difference. Since the recession, student loans have become the fastest growing household debt in the U.S..Nearly 30% of the 38 million federal student loan borrowers in the U.S. today are between 40 and 59 years old. There’s no data that details exactly how many of these older borrowers are parents looking to help out their children, like the Shippens, but it’s safe to assume they aren’t all simply late college bloomers. It's easier to estimate the number of parents who are tied up in private loans, however. Nearly 90 percent of all private student loans require at least one relative to cosign.When parents and other relatives cosign a student loan, they are held equally accountable for making payments on time. If the student can’t make their payments on time, cosigners have to pick up the slack. And they get burned just as badly by defaulted loans, which can wreck their credit score and make it difficult to qualify for new loans — not to mention the hassle of dealing with incessant phone calls from lenders. For parents who take on Parent PLUS loans, like the Shippens, the loans are entirely in their name, which means they’re the only ones who will take the hit for late payments.“I think a lot of parents work under the misunderstanding that they can get a lot of aid from schools and that it will be free money,” says Mary Anne Busse, a consultant who works with 529 plan administrators. “The reality is that it is most often not free money and a lot of financial aid packages come in the form of loans.”On the hook long after graduationThe burden of college cost-sharing can extend far beyond a student’s graduation date, as well. Though the economy is recovering, unemployment is still in the double digits for 20- to 24-year-olds, and for recent graduates who have managed to find jobs, nearly half are considered to be underemployed. Cash-strapped and with tens of thousands of dollars in loans to contend with, home is often the first place graduates go for assistance.In a survey to be released Tuesday by Upromise by Sallie Mae, nearly 85% of parents say they expect to bankroll their children well after graduation, either by letting them move back home or helping them pay for a place of their own. Half of parents say they would help out their kids for up to five years, while one-third say they would cut them off after six months.So far, two of Shippen’s children have had to move back home at some point to help pay off their loans. Her youngest daughter, Channing, graduated with a degree in music therapy from a private university in 2013 and now works as a music therapist at a nonprofit helping the elderly. She earns about $34,000 a year and owes five times that much in student loans, the bulk of which is in her mother’s name.She plans on moving back in with her parents in September so she throw as much money as possible toward her debt.“At the time, [the financial aid office] made it seem like the loans were free money, like it was the solution and there was no conversation about what it would actually mean when I graduated," she says. "I don't think anyone explained it to my parents either. I feel ridiculous being 25 years old and not being able to support myself financially.”The wisest thing college hopefuls and their parents can do to keep from biting off more debt than they can chew is to adjust their expectations about college altogether, Busse says.For parents who dreamed of putting their kids through school that may mean learning to put more of the cost burden on their children’s shoulders. For students who dream of going to private universities for a degree that may not lead to a very lucrative career, it may mean opting for an in-state school or community college instead.“I think for a while we were in that mode where the expectation was for parents to pay for everything,” Busse says. “But we’re finding young college students today are paying a little bit more and putting a little bit more of their skin the game. Parents are asking their children to take some ownership.
Edited by rodeomom3 2014-05-23 4:43 PM
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 Accident Prone
Posts: 22277
Location: 100 miles from Nowhere, AR | People are stupid and then want to blame everyone but themselves for their stupid decisions. | |
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Shelter Dog Lover
Posts: 10277
| Three 4 Luck - 2014-05-23 4:06 PM People are stupid and then want to blame everyone but themselves for their stupid decisions.
Yes, not once in this article do they say they made wrong decisions or acknoweldge the decisions made that got them where they are. | |
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  Angel in a Sorrel Coat
Posts: 16030
Location: In a happy place | Sad to say this seems to be the norm more and more today. It sound like the parents were not raised to respect money with what it can and cannot buy. Maybe the children can learn from this. | |
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 Expert
Posts: 2097
Location: Deep South | sorrel horse ranch - 2014-05-23 4:15 PM Sad to say this seems to be the norm more and more today. It sound like the parents were not raised to respect money with what it can and cannot buy. Maybe the children can learn from this.
The children I've met from this generation are learning to be selfish, entitled, victimized brats. | |
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 The Vaccinator
Posts: 3810
Location: Slipping down the slope of old age. Boo hoo. | It amazes me how young adults sign up for college and take out such massive loans for degrees yet do not take time to research the type of job they can land with the degree, i.e. the types of jobs available, salaries, the likelihood of landing a job with the chosen degree, the future of jobs in that particular field, etc. It amazes me the parents do not discuss this with them. Or that someone doesn't discuss it with them. Or that they don't even think about it. Or maybe they do. And don't care if they can land a paying job or not. I don't know. | |
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Location: East of the Pecos | music therapy? no wonder | |
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The Resident Destroyer of Liberal Logic
Location: PNW | Bug Is Alive - 2014-05-23 5:51 PM
music therapy? no wonder
At least it isn't Art History - like my sister-in-law. Lol | |
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Elite Veteran
Posts: 1034
| Sigh... Why put yourself into hock to pay for a wedding? Really?! And PRIVATE college with no savings? This is beyond stupid. And it's true - THIS is exactly why this next generation expects everything handed to them. My generation is not making good decisions. | |
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 No Tune in a Bucket
Posts: 2935
Location: Texas | A woman that I worked with for years just told me that her daughter (an only child) that graduated from college last December is going back to school to get her masters. The mom retired last August and they do not have a lot of savings. He husband lost his job last year after 20 something years with the same company when the owner died. Her degree is in art and I am not sure what kind of job you get with that. I think she said that she wants to teach at the college level but what are the chances of someone fresh out of college getting a position like that or even how many advanced art positions there are. This girl was always smart but I don't understand what she is thinking. | |
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 A Lady with Fight
Posts: 2701
Location: NC | I can understand taking out loans for college. But letting your kids go anywhere they want AND seeking degrees that will land them mediocre jobs isn't the brightest idea. THEN refinancing their home to pay for a wedding? Tell her to go to the courthouse.
Too many girls want the wedding and not the marriage anyways. Geez. This is terrible.
Community college isn't crazy expensive and most have articulation agreements with the state school systems. Whole lot cheaper. But I don't think a public school has a music therapy degree. Ugh.
Edited by hlynn 2014-05-23 7:05 PM
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boon
Posts: 1
| I understand what everyone on here is saying but I will come from a students side. I did not ask nor could my mom pay for my college education. Our lives growing up were difficult and she couldn't save for our college. I graduated with a Bachelors degree in Ag Services and Development. Leaving college I now have around $50,000 in student loan debt. (I know that's small for some) When I graduated I couldn't find a job anywhere and definitely wasn't opposed to moving. I took a job working back where I worked while going through school. The pay was terrible but I couldn't find anything else. Making $20,000 a yr trying to pay for my home and my student loans which are like a house note themselves. I make it work. But responding to a few comments on here, some people are ridiculing someone's decision about their major. We are taught our whole lives to do what we enjoy and want to do for the rest of our lives. I thought Ag was suited for me. I knew jobs may be hard to find but IMO you have to do what you enjoy and sometimes student loans are the only option to get the education needed for certain jobs. I don't feel the parents should pay for everything and sometimes circumstances cause you to take out loans or do things you didn't plan. Now, I've found a better job and do well for myself but I don't think my generation is as bad as some say. The ones who are selfish and victimize themselves are the ones handed everything then asked to work etc... These parents knowingly gave up everything to better their children's future. I'm not saying I would do what they did or go about like that but let's not talk about them when they did what they felt they needed to do! | |
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Elite Veteran
Posts: 1034
| I will add: I feel better all the time about waiting a few years to start college. My parents did not pay one red cent on my tuition or living expenses. I chose a major that got me into the field I knew I wanted (Criminal Justice Admin). I now earn six figures and my student loan payment is around $200/ mo. Not bad for coming from nothing. Please people, don't go into hock to avoid teaching your kids hard work and responsibility.
ETA: I eloped to Maui and married the man of my dreams. No resentment over my parents not mortgaging their home for my princess day.
Edited by HorseMommyFiveO 2014-05-23 7:14 PM
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The Resident Destroyer of Liberal Logic
Location: PNW | acrodeo - 2014-05-23 7:05 PM
I understand what everyone on here is saying but I will come from a students side. I did not ask nor could my mom pay for my college education. Our lives growing up were difficult and she couldn't save for our college. I graduated with a Bachelors degree in Ag Services and Development. Leaving college I now have around $50,000 in student loan debt. (I know that's small for some) When I graduated I couldn't find a job anywhere and definitely wasn't opposed to moving. I took a job working back where I worked while going through school. The pay was terrible but I couldn't find anything else. Making $20,000 a yr trying to pay for my home and my student loans which are like a house note themselves. I make it work. But responding to a few comments on here, some people are ridiculing someone's decision about their major. We are taught our whole lives to do what we enjoy and want to do for the rest of our lives. I thought Ag was suited for me. I knew jobs may be hard to find but IMO you have to do what you enjoy and sometimes student loans are the only option to get the education needed for certain jobs. I don't feel the parents should pay for everything and sometimes circumstances cause you to take out loans or do things you didn't plan. Now, I've found a better job and do well for myself but I don't think my generation is as bad as some say. The ones who are selfish and victimize themselves are the ones handed everything then asked to work etc... These parents knowingly gave up everything to better their children's future. I'm not saying I would do what they did or go about like that but let's not talk about them when they did what they felt they needed to do!
ALSO from a students' perspective, as I just finished my BS in Elementary Education not too long ago:
Yes, it is GREAT to do something you love, but be realistic. My sister-in-law is majoring in art history and has NO plan for her life other than hopefully marry a doctor or a lawyer. Yes, she likes art - there are so many other USEFUL AND MARKETABLE degrees: advertising, media, graphic design, digital communications, etc. The reason she chose Art History? It's easy and she can easily pass the classes while still staying active in her sorority. Her own words. My in-laws are paying for her to go to school, ALL her "living" expenses, AND just bought her a new SUV. I could care less what they do with all their money, but it irritates me that they are enabling yet ANOTHER person of our generation to enter the real world with no responsibility.
The point of the article wasn't about all the "sacrifices" these folks made - they were IDIOTS. Their kids could have gone to state universities, the one could have gotten married at the courthouse, I mean come on.
I have no student debt because I had a full academic scholarship for my entire degree. Would I have let myself or anybody else rack up 150k in debt so I could be a teacher and make 40k a year? ABSOLUTELY NOT.
My aunt on the other hand, just graduated with her PhD in virus pathology, and 150k in student loans - BUT her starting salary is more than that, so good on her. Go and rack up loans if your degree is WORTH IT. Just about any bachelors now is worthless and to get a decent job you need a master. This comes from the "college educated" pool being flooded with people who are under the impression that you HAVE to go to college to be successful - which is a lie. There is plenty of success to be had in the "trades": welding, plumbing, electrician, carpenter, general contracting, logging, etc. My husband didn't go to college, started a logging company, and now grosses over 500k easily. College degrees aren't everything, and I absolutely stand by the opinion that some are useless. | |
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Shelter Dog Lover
Posts: 10277
| acrodeo - 2014-05-23 7:05 PM I understand what everyone on here is saying but I will come from a students side. I did not ask nor could my mom pay for my college education. Our lives growing up were difficult and she couldn't save for our college. I graduated with a Bachelors degree in Ag Services and Development. Leaving college I now have around $50,000 in student loan debt. (I know that's small for some) When I graduated I couldn't find a job anywhere and definitely wasn't opposed to moving. I took a job working back where I worked while going through school. The pay was terrible but I couldn't find anything else. Making $20,000 a yr trying to pay for my home and my student loans which are like a house note themselves. I make it work. But responding to a few comments on here, some people are ridiculing someone's decision about their major. We are taught our whole lives to do what we enjoy and want to do for the rest of our lives. I thought Ag was suited for me. I knew jobs may be hard to find but IMO you have to do what you enjoy and sometimes student loans are the only option to get the education needed for certain jobs. I don't feel the parents should pay for everything and sometimes circumstances cause you to take out loans or do things you didn't plan. Now, I've found a better job and do well for myself but I don't think my generation is as bad as some say. The ones who are selfish and victimize themselves are the ones handed everything then asked to work etc... These parents knowingly gave up everything to better their children's future. I'm not saying I would do what they did or go about like that but let's not talk about them when they did what they felt they needed to do! I agree, a career you enjoy is worth every penny. That said, the choice for these children to go to private rather than much less expensive schools where they could get the same degree for a career that does not pay well, not a good choice. Yes, the parents did what they wanted so why are they complaining now about the debt? This is not a hard luck story of struggle, it is a story about choices made and not liking the outcome- personal responsibility. If you don't like the debt, don't take out the loans, go to a cheaper school. Our kids went to junior college for 2 years to save on costs then transferred to a university.
Edited by rodeomom3 2014-05-23 7:34 PM
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 Toy Story Fanatic
Posts: 4148
Location: Oregon | My son and daughter both attended college. However, I could not afford private school as a single Mom of 2-who by the way are 14 months apart in age. We did come up with a plan though. They started in Community College. Took all required courses that would transfer to the University that they would finish at. My Daughter ended up with a career before going to the University. My son with his Civil Engineering degree did just as we planned, took every class he could at the Community College-talked with both colleges to make sure it was an acceptable credit for his end goal. Community College we paid for totally between my son, myself and his Dad. We helped when he had to transfer to the University but it is so expensive he had to take out student loans. I think his end debt after graduation was $25,000. He had to attend 1 1/2 yrs while working full time to also chip in.
I feel the above parents have raised a generation that doesn't know how to live withing their means-but then again it appears they are just as bad. Sacrifices can be made but still attain the attempted goal. There are many BUT there are many also that do not do as those parents and their kids have done.
Edited to add my son had a job before he ever graduated and still works there to this day. And he does make very good money. He is now 30.
Edited by squeek 2014-05-23 7:50 PM
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 Veteran
Posts: 188
Location: Under the Big Sky - Montana | I'm not part of the current generation, I graduated from college in 2000. Hard to believe it was that long ago. My parents couldn't afford college for any of us. I have a twin sister and a sister that is 3 years younger than we are so our college years were crammed pretty close together. I really wanted to go to one of the colleges that offered equestrian classes and had partial scholarships for some of them but the bottom line was I couldn't hardly afford community college then the state college I graduated from. I remember when my twin and I moved away to go to the state college we had almost no furniture or anything else and we'd put a few things on layaway at Kmart in a bigger town close by. It wasn't much, about $100.00. When our parents came to visit they actually stopped and paid for it and brought it up for us. That was a shock that they were able to pay for that.
Pursuing your dreams and pursuing a job to support those dreams are often two very different things. I was lucky. I had several scholarships, worked two jobs the entire time I was in college and graduated with high honors. I had $0 debt when I graduated. Today I am a home owner with very little other debt than my mortgage. I am doing most of what I wanted to do when I was younger. I don't own the newest or most of expensive of anything and I've gotten over the fact that I never will. No smartphone, car is 10 years old, just "upgraded" to an older horse trailer than what I had. The upgrade is over 15 years old. I have nice horses that are competitive and completely cared for and really wanting nothing. That is what is important.
In the case of the article, is it any wonder the children think it is ok to put themselves that deep in the financial hole when the parents are the ones who never taught them better? They were the role models. Not good ones, but models just the same. I see most of my friends and family raising their children with a work ethic and an understanding that money does not grow on trees so there is hope for future generations. Sometimes it is ok to tell your kids "no". I do it all the time. Mine all have four legs though  | |
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A Lady with Fight
Posts: 2701
Location: NC | I believe goals are more important than dreams. You have to be realistic with your career. You can have dreams on the side of course. But you'll need the funding to chase them........ | |
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 Nothing Comes Easy
Posts: 2353
Location: Texas | Delta Cowgirl - 2014-05-23 4:25 PM It amazes me how young adults sign up for college and take out such massive loans for degrees yet do not take time to research the type of job they can land with the degree, i.e. the types of jobs available, salaries, the likelihood of landing a job with the chosen degree, the future of jobs in that particular field, etc. It amazes me the parents do not discuss this with them. Or that someone doesn't discuss it with them. Or that they don't even think about it. Or maybe they do. And don't care if they can land a paying job or not. I don't know.
I went to a private university to avoid out of state tuition. I moved from CA to TX for school. I was offered scholarships to pay for half of my tuition which made it bare able and cost effective in the end. Community college in CA was not an option for me. You can't get into classes at the community college in my home town, it's too full. And financial aid isn't possible for what the government thinks of my family/home $.
During my time at this university, I studied nursing but along the way I took an intro to business class that had us research our degrees, prospect careers/jobs and salaries. We created a plan and knew what we were getting ourselves into. I think every freshman should do this.
I graduated last year. I did it all on my own, financial aid didnt help, nor did my parents. I have quite a bit of debt. My goal was to have less than my yearly salary in loans, seemed reasonable and I do make more than i owe thankfully. | |
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 Money Eating Baggage Owner
Posts: 9586
Location: Phoenix | I think they definitely had other options than the private schools!! Luckily I qualified for financial aid but did have to take out some loans. All in my name. I would go on but I don't want to be in debt up to my eyeballs. I see tuition prices and know I can't afford it. | |
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