Student Loan Dumbness

[Tango]

Ali and I put both of our girls through college, cash. Very proud of both as they both are employed in the field that they studied. Tom

[RICZ]

Road Hawk's post serves to point out that we all chose the wrong professions.

[Rob Rodriguez]

I don't believe going to college ensures your financial future.

I've been saving for my two kids to attend college (which will happen in about 5 yrs). I won't have everything they need saved but it will be a good portion. They need to have some skin in the game anyway. If they choose not to go to college well, We can use the money for something else.

Trying to "reason" through how much money to save, etc, etc and I came to form the opinion that college really isn't practical for most people is they have to bear the full financial burden. My thinking goes something like this.

Let's say the cost is $50K/yr to attend college. Some are more, some are less, some people receive grants, scholarships, some don't etc. After it all washes out I used $50K/yr. $50K x 4 years of college is $200K. Lets assume you have no help from your parents, grandparents, etc to cover the $50K so you need to do this on your own. Let's also say that working summers, nights, weekends while you were going to school you were able to pay for one year ($50K) out of pocket. You leave college in your mid 20's and you are $150K in debt. You find a job a couple months out of college and it pays $75K a year (that might be more than most typical out of college jobs but....?) So, you are mid 20's, on your own. You have a car payment, rent, utilities, food, your college loans and whatever else you have to pay for. I would say most people in a 10 yr span from say 25-35 yrs of age will get married, buy a house and have kids (not necessarily in that order). So, at 25 yrs old you are already in debt $150K. You marry someone who also has college loan debt, maybe $100K. You buy a home together because the mortgage is the same or cheaper than rent. After 3 years of marriage you have your first child and at age 35 you have child #2. In 10 years you added a 30 yr mortgage payment (lets say the house cost $250K), you probably have 2 car payments around $300 each (hopefully) and now you also have to pay for daycare (unless one parent decided not to work) and all the other kid related expenses. At 35, between mortgage and student payments you are trying to pay down $500K worth of debt. In that same 10 year span your income has only risen to $125K. You and your spouse decide that only one should work cause after you pay daycare the 2nd income is all but gone anyway. At the same time retirement is only 30 yrs away and everyone knows you have to put money away for retirement early because that's how it really builds size. You'd like to do this but there just isn't much left over after all the bills are paid (hopefully they are paid). You finally "catchup" and have your debt down to a manageable level about around age 50. That leaves you 15 yrs to save more for retirement oh but wait. Now you have 2 kids to put through college and the cost isn't $50K/yr anymore. Now it's $75K/yr for each kid.

My example above may not be entirely realistic for everyone but I do think its an average reasonable representation of the "growing up" experience. I'm not saying going to college is a bad thing and I'm not saying people who do so don't end up better off in the long run. I'm just saying if you take a minute and run some rough numbers you begin to wonder where the college debt tipping point is. At some point what you have to invest into debt isn't worth it because you will never get out from under it until the end of your life.

[RICZ]

Rob, are you taking advantage of a 529 plan?

[Rob Rodriguez]

Rob, are you taking advantage of a 529 plan?

Partially. I'm putting some money in the 529. I'm not putting it all in there cause there are limitations to to the plan that I don't like. Don't want all the eggs in one basket I'm also investing the other half in "safe" investments. I am trying to use my money to make money so to speak to the best of my ability. If my kids receive no money and have to pay on their own I'm just not sure its realistically possible without them being in a financial **** storm for a large portion of their life.

[2dogs]

It'll toss this onto the mix. My son has been out of college for quite sometime now but here, in short, is how it went. Luckily when he graduated high school he was the second highest academic achieving male student in the district. He worked part time all the way through college and we paid much of his housing and other necessities. He lived off campus the last three years and had a car. His scholarships paid the major portion of his actual college expense, tuition books and etc. What he told us after he graduated college was that all the years he was in high school making good grades, he was actually earning 10k a year, because that came out to be what his scholarships were really worth.

[JerryB]

Hi Rob,

Re: I'm not saying going to college is a bad thing and I'm not saying people who do so don't end up better off in the long run.

IMO you gave us one example. No two people are the same; each person has to decide for themselves what is best at that point in their life. And, it is never too late to get a college education; I started college at 24.

I am a strong believer in a college education ( as I suppose my comments here & in the past would support ). However, one can make a decent wage without a college degree. It is just going to be much harder as the future comes at us & those manual labor jobs disappear due to automation.

For me: I paid for both of my kid's education including my son's law school costs. I have also put $100k into each of my two grandkid's college funds.

I think that says it all for me.

Jerry Baumchen

PS) And, as I have posted before; I come from a VERY working class family.

[Rob Rodriguez]

Hi Rob,

Re: I'm not saying going to college is a bad thing and I'm not saying people who do so don't end up better off in the long run.

IMO you gave us one example. No two people are the same; each person has to decide for themselves what is best at that point in their life. And, it is never too late to get a college education; I started college at 24.

I am a strong believer in a college education ( as I suppose my comments here & in the past would support ). However, one can make a decent wage without a college degree. It is just going to be much harder as the future comes at us & those manual labor jobs disappear due to automation.

For me: I paid for both of my kid's education including my son's law school costs. I have also put $100k into each of my two grandkid's college funds.

I think that says it all for me.

Jerry Baumchen

PS) And, as I have posted before; I come from a VERY working class family.

Hey JerryB,

You are to be commended for sure for paying your sons and grand kids college bills (or a lot of them). Nice Job.

I'm not disagreeing with anything you've said and feel the same way. I come from a working class family myself. I'm just saying if your kids or grand kids had to pay the entire college bill out of pocket at what point is the cost so great they will be hard pressed to have it paid off before they retire (when you factor in all the other things that will happen in their lifetime).

[JerryB]

Hi Rob,

Re: I'm just saying if your kids or grand kids had to pay the entire college bill out of pocket at what point is the cost so great they will be hard pressed to have it paid off before they retire (when you factor in all the other things that will happen in their lifetime).

Good point. It really is a personal decision. My folks could not help me financially. I worked part-time & went to school part-time. I did get a small GI Bill assistance & one $50 scholarship due to good grades. By not borrowing the money, it took me 6 1/2 yrs to get a 4-yr degree but I had no debt when I finished.

It can be done without going into debt.

Jerry Baumchen

[Rogue Hawk]

My BS degree was that, BS. I had to go back to community college to get a usefull skill.

[kep-up]

Noone has mentioned trades. Comments have been made somewhat downplaying the use of "brawn". One can only hope those comments were not made from an elitist attitude.

I grew up on a family farm and had to do my share of the "brawn" work from the time I was able to walk. I learned the value of work. And of family. I then served an apprenticeship in the electrical trade, eventually earning my "Master Electrician" certification and running the electrical division of a multi-trade contractor for 20 years. Left that to earn certification as a construction codes inspector. After retirement at 70, started my own business as a PA fully certified construction code official, which I enjoy, taking work if and when I want and will continue to do so until it is no longer fun.

Would a college education have been good for me? Perhaps. But evaluating myself and my personality, doubtful. College is not for everyone. And those who think it is need to take a look at what they are paying to have someone work in their house. [U]Qualified tradesmen are becoming fewer and fewer. Those who opt for learning a trade are in general able to pretty much write their own pay grade.

All I am saying is that if your child doesn't desire a college education but applies himself in another direction, encourage him along the way.

[Rob Rodriguez]

Noone has mentioned trades. Comments have been made somewhat downplaying the use of "brawn". One can only hope those comments were not made from an elitist attitude.

I grew up on a family farm and had to do my share of the "brawn" work from the time I was able to walk. I learned the value of work. And of family. I then served an apprenticeship in the electrical trade, eventually earning my "Master Electrician" certification and running the electrical division of a multi-trade contractor for 20 years. Left that to earn certification as a construction codes inspector. After retirement at 70, started my own business as a PA fully certified construction code official, which I enjoy, taking work if and when I want and will continue to do so until it is no longer fun.

Would a college education have been good for me? Perhaps. But evaluating myself and my personality, doubtful. College is not for everyone. And those who think it is need to take a look at what they are paying to have someone work in their house. [U]Qualified tradesmen are becoming fewer and fewer. Those who opt for learning a trade are in general able to pretty much write their own pay grade.

All I am saying is that if your child doesn't desire a college education but applies himself in another direction, encourage him along the way.

I agree with this as well. Trades are a great way for people to earn good money without going to college or having the bill associated with it. Plumbers, Electricians, Pipe fitters, etc. All a way to do honest work and get paid well for it. My opinion is that these jobs will never disappear. I don't think robots will be doing them anytime soon and they can't be outsourced to another country.

[johnsimion]

I agree with this as well. Trades are a great way for people to earn good money without going to college or having the bill associated with it. Plumbers, Electricians, Pipe fitters, etc. All a way to do honest work and get paid well for it. My opinion is that these jobs will never disappear. I don't think robots will be doing them anytime soon and they can't be outsourced to another country.

I also agree -- except the trades are definitely being outsourced. Our own house in Las Vegas was built, I'd say primarily, by illegals who do plumbing, electrical, roofing, HVAC, etc. This information came from the contractor's QC representative himself. And it was a nationwide American corporation that built our house, BTW. Fortunately -- or regrettably -- these illegals did really great quality work, better than most of the American tradesmen who have done other work around here. That's sad. The QC rep said they hired illegals because they couldn't find well-trained Americans to do the work (and no doubt cheaper than hiring well-trained Americans). I tend to believe this is true because so many trade schools have closed since I graduated from high school a few decades ago. If we don't train the trades and we don't enforce the law against HIRING illegals, it's inevitable that our "patriotic" corporations will find a way to get the work done with illegals and the illegals will find a way to get here, wall or no wall.

[Rob Rodriguez]

I also agree -- except the trades are definitely being outsourced. Our own house in Las Vegas was built, I'd say primarily, by illegals who do plumbing, electrical, roofing, HVAC, etc. This information came from the contractor's QC representative himself. And it was a nationwide American corporation that built our house, BTW. Fortunately -- or regrettably -- these illegals did really great quality work, better than most of the American tradesmen who have done other work around here. That's sad. The QC rep said they hired illegals because they couldn't find well-trained Americans to do the work (and no doubt cheaper than hiring well-trained Americans). I tend to believe this is true because so many trade schools have closed since I graduated from high school a few decades ago. If we don't train the trades and we don't enforce the law against HIRING illegals, it's inevitable that our "patriotic" corporations will find a way to get the work done with illegals and the illegals will find a way to get here, wall or no wall.

I'm sure this happens all the time everywhere. By outsourcing I meant more that you couldn't send the plumbing or electrical work to another country to have it done (like manufacturing) and then re-import to the US (should have been more clear). But yes, hiring "illegals" to do the work is common I'm sure. We have the same issue with farm workers here. You can't pay a US citizen enough money (even if they are unemployed) to work on farms around here so farm owners hire non citizens. They are the only ones that will take the jobs. That's what entitlements have done for this country

[dondje]

I agree with this as well. Trades are a great way for people to earn good money without going to college or having the bill associated with it. Plumbers, Electricians, Pipe fitters, etc. All a way to do honest work and get paid well for it. My opinion is that these jobs will never disappear. I don't think robots will be doing them anytime soon and they can't be outsourced to another country.

The trades do have their draw backs. In many locations they are seasonal. Feast or famine can mean lots of overtime away from home or lots of layoff time when work slows - especially if you are young and low on the seniority list. Thus lots of time can be spent sitting around on unenjoyment. Often you have to travel to the various job locations, which can mean a long slow cross town trip each way or an out of towner than gets you home on the weekends or even less. Long commutes and out of town jobs can really eat into that good pay and family time. Many trades people have to provide at least some of their own tools which can include a more specialized vehicle to transport those tools than they otherwise would have purchased - pu-truck.

As for outsourcing and robots, trade jobs have been getting affected by these for many years and will continue to be even more. Take a took at all the prefab building/construction material and gadgets that are being sold at HD type stores. Lots of those were made and assembled in trade shops and on the job sites by trades people years ago. Trades are having a hard time replacing an aging workforce, but they are not growing per-capita and in fact the opposite is true.

Regards,

Don

[RICZ]

If an employer does not want to get involved with the hiring of illegals, then he is competing with the welfare/unemployment system and has to offer more than they do, and that's difficult.
Re trades; There are many offering not only free, but paid training and then a job. Auto tech and OTR truck driving come to mind and there are many more.

[Rogue Hawk]

I see that a lot, trades being done by illegals. I remember seeing a sign from some GM workers that said, "If you lay us all off, who will buy your cars?".

[dondje]

OTR truck driving come to mind and there are many more.

No future in OTR trucking. They are going to be the first replaced as they are right now test driving autonomous OTR on several long haul runs nation wide. Uber and other taxi drivers need to look out also. Lots of new cities signing up for autonomous test sites. Local delivery is also in trouble as driverless grocery and drone package delivery is being tested in multiple markets.

Regards,

Don

[JerryB]

Hi dondje,

Re: No future in OTR trucking.

Just this past week, Daimler here in Portland announced that their truck mfg plant, located here, is going to be producing only electric trucks.

The future is coming at us faster than we think.

It is the old Freightliner plant; where I worked in the test lab while in college for about 6 months. Great job & I learned a lot working in that lab.

Jerry Baumchen

[Bob Denman]

No future in OTR trucking. They are going to be the first replaced as they are right now test driving autonomous OTR on several long haul runs nation wide. Uber and other taxi drivers need to look out also. Lots of new cities signing up for autonomous test sites. Local delivery is also in trouble as driverless grocery and drone package delivery is being tested in multiple markets.

Regards,

Don

As long as they've got this Dude up front:

https://www.youtube.com/watch?v=eWgrvNHjKkY

[sandeejs]

I had no loans for my undergrad. Neither did my folks. This was mostly because I made sure my tuition was at the low "in-state" rate.

My kids all had some loans, and I helped with some of their tuition. They are so very sensible and responsible, paying on their loans and not living extravagantly. My eldest is an architect, and got some financial awards toward the last couple of years of his school. His partner recently became an RN, and makes more than he does, even with his masters. He enjoys this.

I ended up going back to school, to a community college, to become an RN. The work was tolerable, and I could support my family. When I went for my masters, it didn't get me a job, mostly because the State of Michigan was closing down the system that I worked in. It did get day-shift for most of my time. I guess it was worth it.

~Sandee~

[dondje]

As long as they've got this Dude up front:

https://www.youtube.com/watch?v=eWgrvNHjKkY

Gotta love it!

While the cars that Uber is using have a person inside to monitor the situation and enter destination information, I suspect that soon there won't be a driver's seat.

The vehicles that Kroger is using in Texas and Pennsylvania for home grocery delivery don't even have seats or a steering wheel/joy stick. They look like a squared off VW micro bus.

Regards,

Don