What's Really Behind the Student Debt Boom

We've been writing a lot about student loans and the value of education lately. As I wrote last week, one of my biggest peeves about this topic is that there's too much assumption and hyperbole, and too few facts. So when I found a Department of Education database of almost 4,000 U.S. colleges with tuition, average student loan balances, graduation rates, and default rates, I got excited. (What, spreadsheets don't excite you?)

Here are a few things I learned after digging through the data.

Student debt has risen precipitously over the last decade. We know that. We also know tuition prices have surged. Sure enough, rank the 4,000 colleges by tuition, and it's clear as day: Schools with the highest tuition produce students with the most debt:

That's obvious enough. But from there, it gets interesting.

You might think students with the most debt have the highest default rates. But it's the other way around. There's a negative correlation between schools that produce students with the most debt and those students' average default rates. In other words, those who borrow the most default the least:

Tuition is similar. There's no clear link between a school's tuition and how likely its students are to default on their student loans. Students from schools with the highest tuition actually default less than schools with the lowest tuition:

This is important, because the rise in student debt is dangerous to the extent that it leaves students with a burden they can't afford. But the best way to measure that burden -- default rates -- seems to have almost no correlation with the factor we most often point fingers at: Sky-high tuition.

How does any of this make sense?

There's another factor that has a screaming-in-your-face correlation with defaults: The percentage of a school's students that graduate within six years: 

So, the likely reason those with the most debt have the lowest default rates is because they're more likely to have completed their degree, and hence have better employment prospects. Those with a little bit of debt default the most because they're more likely to have dropped out before graduating.

This seems blindingly obvious, but it adds a point that often goes unnoticed: People finishing college with a lot of debt aren't the problem. People dropping out of college with a little bit of debt are where the horrific numbers are found.

But what causes dropouts? Not high tuition, surprisingly. Schools with the highest tuition have the highest graduation rates, and those with the lowest tuition have the lowest graduation rates. The top quintile of schools ranked by tuition graduate twice the percentage of students as those in the lowest quintile. Anecdotally, schools like Harvard, Yale, and Princeton charge some of the highest tuition, yet consistently graduate more than 96% of their students on time. Community colleges offer some of the lowest tuition but have some of the highest dropout rates.

Several in-depth studies have looked at what causes people to drop out of college, and most end up pointing at two factors: The quality of high school preparation, and your parents' income. 

If you grew up in a poverty-stricken town undergoing budget cuts with a low-quality high school system, you're less likely to finish college. "Basic academic concepts -- understanding a course syllabus, knowing how to use library and information resources, attending class regularly, doing homework -- can be elusive notions for students who had few such expectations in their prior learning experiences," writes Daniel de Vise of the Washington Post. If you grew up in a rich town with a competitive high school and attended SAT tutoring sessions after class, you begin college on a completely different path (on average).

And if you have poor parents -- particularly a poor father -- you're less likely to finish college. "By age 24, only 12 percent of students from low-income families will earn a bachelor's degree compared to 73 percent of their higher-income peers," writes a study by the Pell Institute. Coming from a low-income family reduces your odds of attending college at all, but "even low-income students who do enroll in college are less likely to persist through degree completion than their higher-income peers," it writes. "Academically, low-income students tend to be less prepared for college than their peers. They are less likely to have taken a rigorous high school curriculum, generally have lower college entrance examination scores, and are more likely to need remediation in college."

Think of it this way: There are two kinds of student loans. There are student loans, and there are former-students-who-now-have-degrees loans. Same debt, very different outcomes.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics. 

link


Read/Post Comments (37) | Recommend This Article (43)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 05, 2013, at 2:03 PM, Darwood11 wrote:

    Morgan, good points!

    Taking on student loans and related credit card debt is like buying your education on margin. If one drops out, he/she owes the debt without the benefits of that sheepskin to help one pay it off.

    On the bright side, and as reported in the WSJ today, "A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. "

    However, as also reported in the WSJ "Student borrowing costs became a politically charged issue during last year’s presidential campaign when, by law, the interest rate on certain new federal student loans was set to double to 6.8% from 3.4%."

    Wow! 6.8% for student loans at a time when a 30 year mortgage is 3.55% and a 48 month used care loan is 2.93%. Are the banks and our government planning on hosing the students?

  • Report this Comment On March 05, 2013, at 2:26 PM, katekiwi wrote:

    Here is the REAL lowdown on the student loan situation from someone who just today had an admin hearing with the State of Fl. I graduated in 1994. I took $16,000 loans for 4 year degree. I got out of school planning to transfer to a different FL university to get my master's degree. THEN, it turned out I couldn't go on. My kids had an abusive stepmother, and I had to take full custody of 2 pre teen before I graduated, they had been with their father while I was in college. I developed inflamatory bowel disease. I also had my first manic episode that landed me in a mental facility 2xs in a year. This whole time I managed to work, BUT I was only able to hold down modest jobs. I also had asthma, and Sjogren's disease. My minimum payment coming out of school was $298, I was making on my first real job $13,500. I got deferrments and hardships. All the while interest kept accruing even though I was still making some payments. I have finally exhausted all derment options, and hardship options. The State guaranty agency decided to refuse to allow me to make reduced payments so we went to an Admin Hearing. During this whole time interest kept accruing, and when the default happened my interest went to 8%. Everytime a payment arrangement would have to renew the minimum payment would go up esponentially due to the interest. The last time it came out of hardship, $16,000 has gone to $41,000 and my minimum payment is $398 a month, I make $1400 a month gross. I also no longer have medical insurance. Tell me how that is in any way fair. The student loan providers should have to stop accruing interest at some point, and make reasonable payment arrangements for people to be able to pay them. If you do not stop the interest, then the payments keep going up and you can never ever pay them. People seem to think it's only deadbeats that don't pay and that is the furthest thing from the truth. Instead of all or nothing, the student loan guarantors should at some point stop the interest, and set up realistic payment arrangements with the people that owe that haven't been able to pay. That would would stop a lot of this. The way the system is set up it's usuary and it makes borrowers indentured servants. Instead of forgiving peoples debts there could be guidelines put into place to help people pay back what they owe in a fair manner. Then there needs to be a tightening on the amount people borrow. ONLY people in medicine, law, engineering or finance should be the able to take out big loans. As it is....I inherited a condo that is underwater and I am most likely going to have to go to foreclosure because of my situation. The student loan guarantor is going to leave me with $900-$1100 a month to live on. Try paying your living expenses and medical bills on that.

  • Report this Comment On March 05, 2013, at 2:53 PM, ClimbinFool wrote:

    Morgan,

    Does the data discern between loans taken out by parents and loans taken out by students?

    It seems to me there's a higher likelihood of parents taking on the loan burden for students in the top quintile tuition schools than in the other quintiles, and that this would drastically improve the default rates.

  • Report this Comment On March 05, 2013, at 3:05 PM, billstanley1 wrote:

    Last year, student loan debt was $966 billion, an increase of 51% since 2008. Not including borrowers who are still in school or aren't yet required to make payments, 43% of 25-year-olds had student debt, up from about 33% in 2008. Nearly 47% percent of borrowers owe between $10,000 and $50,000, up from 38% in 2005. The percentage with debt of $100,000 or more was 3.7. The percentage of people under 30 who have student loans that were at least 90 days late on their payments was 35, up from 26% in 2008 and 21% in 2004. newsandopinions dot net

  • Report this Comment On March 05, 2013, at 3:20 PM, rapideyemovement wrote:

    I believe that the relationship between college tuition and graduation rates and ability to payback tuition is what is known as an 'epiphenomenon.' That there is a relationship, but that it is indirect.

    I believe that the schools with the higher tuitions attract students that go on for higher degrees (medical, dental, law, engineering, etc.). These students who graduate with higher degrees tend to make a better living and have a less difficult time paying off their loans.

    You mention the community colleges which can provide a solid education at a low price. And I suspect that you are correct that the people who are unable to complete their community college degree will have more difficulty paying their loan; however, I wonder if this is the sector that's primarily driving the student loan default rate.

    I think a bigger part of it is that people are attending college and following the philosophy of studying what interests them (or often just trying to graduate and get their degree) without a real concern as to whether or not it can pay -- following the often folk wisdon of 'Do what you love and the money will follow.' The problem, as we all know, is that while a person may have a tremendous amount of satisfaction from what they have studies, the money seldom is nowhere to be found.

    For example, a neighbor's son recently graduated the Berklee School of Music in Boston with a BA and $175,000 in debt; his plan is to become a music teacher and try to make it big in the music industry. While I am sure he is very talented, the average starting wage of a music teacher is in the mid to high 30K range. His ability to pay off a loan is going to be severely limited.

    What do you think?

  • Report this Comment On March 05, 2013, at 3:53 PM, Darwood11 wrote:

    @rapideyemovement

    Taking on $175,000 in debt for a "30K range" job means he should plan on a modest financial existence, as most of his income will go toward paying debt and rent. That's not all bad, unless "make it big in the music industry" means an expectation to strike it rich on "America's got talent" or whatever.

    My 2 cents? I would have found the lowest cost path to a $30K annual music job.

  • Report this Comment On March 05, 2013, at 3:59 PM, famiglia112 wrote:

    rapideyemovement makes a good point. Does your data have information on area of study, Morgan? Actually, better, you mentioned you got it from the Department of Education. If it's publicly available, any chance on a link?

    To provide another anecdote, I have a roommate who is 31 and did not complete his college education. He is doing fine for himself and has worked his way up in a non-profit. But it makes me cringe when he talks about going back to get a college degree. "What would you go for?" I ask. "Probably theater." "Why do you think that?" "Because a college degree opens so many doors to other opportunities."

    It's scary that people are out there today who still think this way.

  • Report this Comment On March 05, 2013, at 4:58 PM, kyleleeh wrote:

    college is not for everyone, but everyone gets told that it is for them. I think we should have more trade school programs for people to go into then just having everyone on the same academic path. Someone who would make a great mechanic does not need to take 60 units of general ed to become a productive worker.

    @katekiwi, I agree that interest should stop accruing to an extent...say pegged to CPI, otherwise the lender gets shafted by inflation. But I would also hardly call your case the "REAL lowdown" on student loans. It sounds as about as extreme a case of bad luck as you can get, and not at all the norm...best wishes and better luck in your future.

  • Report this Comment On March 05, 2013, at 9:00 PM, Smokeyblu wrote:

    I graduated after 7 yrs of college with a doctorate and 48,000 of grad school debt at 8% 20 yrs ago. I pd it off on time. I worked in undergrad, earned scholarship and worked 2 jobs when i graduated with my doctorate. College IS NOT for everyone! It is time for students, teachers & guidance councellors to wake up and see beyond just making "going to college" a goal. It is NOT a goal. It a means to an end. You earn it. Just like you earn the ability to buy a house, or used to. 20 yrs ago i could not get a home loan w/o 3 yrs of tax returns as a sole proprietor. Again, i had to earn it. Absolutely nothing wrong with that.

    As long as institutions loose sight of earning the right to be there we will fumble. A college education, a home, a car are not rights nor should they be. When you earn it you value it and know how to be responsible for those gifts.

    We have lost that sense of responsibility as a nation collectively by thinking ' everyone deserves xyz'. The only thing anyone deserves is the right to earn it. That does not begin w/ hs grad. You begin earning a college degree in jr high by the way, it all builds on your gpa from 9th grade, jr high is the last misstep allowed.

    I would bet most who graduated college & pd their loans knew that before 8th grade. Of the few extrodinary others, i am sure they worked triple hard to make up for lost time.

  • Report this Comment On March 05, 2013, at 10:22 PM, Quickwhit22 wrote:

    Great article Morgan, but I would like a link to the departments spreadsheets as well.

    Do they have numbers for students in the middle? I mean, its almost certain that your Yale, Harvard and Princeton grads will get jobs worth the price, but what about students who go take out loans for less than prestigious universities?

    Thanks

  • Report this Comment On March 06, 2013, at 11:03 AM, hbofbyu wrote:

    A side note:

    According to a Harvard Business School professor, “Fifteen years from now more than half of the universities will be in bankruptcy, including the state schools..., people who are very complacent are in deep trouble.”

    The edX courses are booming and no one is talking about it. If 100,000 people can take an MIT course for free where does that leave your community college?

    I can see it now: "I can't be layed off - I have tenure!"

  • Report this Comment On March 06, 2013, at 12:31 PM, danlast wrote:

    The real issue is village idiots who should never have received a high school diploma being admitted to schools with low standards. They can not meet even the minimal standards of these schools and drop out. They then default because they see no reason that should be held responsible for their bills. I would like to see relationship between the default rates and voting patterns.

  • Report this Comment On March 06, 2013, at 6:10 PM, budgie0 wrote:

    The one thing not discussed, the elephant in the room, if you will - is the preponderance of many (at least the 2 of which I have familiarity) state universities to employ woefully skilled "counselors" who advise so poorly, that ones' child ends up having to attend said university for an extra semester, or year. This is actually what is behind the "Five-year what once was a four year degree", and the resultant extra loan burden. No one in a position to investigate this little secret has bothered to focus attention upon this.... Do you think that this does not exist? You are sadly mistaken...

  • Report this Comment On March 06, 2013, at 8:28 PM, KayakerRW wrote:

    Morgan,

    Interesting article. As a teacher, I advise my students to think about college debt and their ability to repay, so this article provides some useful information.

    Did you look at how many of the non-degree students attended for-profit colleges? From what I've read, a lot of students who meet the criteria that lead to a higher default rate are students who attend for-profit colleges and rack up significant debt in a short time. Many fall for high-pressure sales tactics and sign up for programs even though they are not prepared (educationally or financially) for those programs.

  • Report this Comment On March 07, 2013, at 12:22 AM, CHill8008 wrote:

    Morgan,

    A great article and thank you.

    Another anecdote: I am 32 and pursuing a grad degree. I am older than most of my classmates, but I have no student loans... yet. For the first time next quarter I will be borrowing to finance my education. I have always worked full-time and have had a really well-paying job for the last 5 years, but that only allows me to attend part-time. One of the things that infuriates me is the structural impediment to full-time employed students. I think this one thing would cost little to fix and would open up education to so many, it's just scheduling. I think that is what gives for-profit schools a competitive advantage and is at least partially responsible for loan and tuition increases. Here in California, and I know at other universities, there is a tiered payment system so that anything less than half-time pays about 60% of the price of full-time, even though "full-time" may be over three times as many units of study, so there is a substantial potential discount per unit if one were able to attend at that level. These are just some frenetic thoughts as to some very simple fixes for what are likely some causes for inefficiencies. I think there needs to be more public discussion about the root causes for the increases in the cost of education. Thank you for this.

  • Report this Comment On March 07, 2013, at 7:29 AM, TMFMorgan wrote:

    Thanks for the comments all. You can email me at mhousel@fool.com and I'll send you the spreadsheet.

  • Report this Comment On March 07, 2013, at 7:06 PM, Tschida wrote:

    I greatly appreciated this article, especially since as of recently I am undergoing the beginning of a non-profit organization to assist in the crisis that is the trillion dollar student loan discussion.

    For the most part I agree with your findings, however here is where the fall flat. You're leaving out a key point, which is that high rate schools such as Yale with extreme tuition costs are usually attended by students of "means", that means mommie and daddie are paying the tuition and not the student themselves, where as in a community college the likelihood is that the student, most likely a low income student is paying their own way through school with the challenges of life obstacles beside them such as the also growing unemployment crisis, and so a difficulty begins between "reality" which those born into means don't often face during this period in their lives, but those without very much do, and that reality is balancing work and school.

    Now, many well to do college students also balance work and school so how does it differ? Mainly because they are born into opportunity, the majority able to get higher paying blue collar gigs if you will or actual career type work through their parents connection while they attend school, while others like myself serve tables making if I'm lucky 400/week, and struggle to feed myself, let alone worry about the calculating debt that I will not be able to pay off, and also that without my parents because patrons under 24 cannot take out loans without their parents co signing, that if for some reason (my parents credit score for instance) is low, I will not be able to get loans at all, hence keeping me from even attending college, even after the two years I have spent there. And thus, I am left to drop out of college, now with 30,000 dollars of debt and an education I consider sub-par to my abilities, since I entered the four year institution of George Mason University and in my first semester took senior level classes getting A's. But felt that in my second year there was no value because I had taken all the courses that challenged me and now was forced to take generals, which brought no purpose to my education other than redoing high school level math courses.

    So what is the answer for individuals like myself who grew up in a very low income situation, but have been working in my field for ten years and have advanced past the level of education offered at general institutions and would best succeed in a more prominent institution such as Yale or others like that, whose curriculum is more challenging? If only I was born with a silver spoon or the government cared about the innovators of our time that came from backgrounds of character and wanted to stimulate those creative minds and utilize their power for the future.

    -Tschida

  • Report this Comment On March 07, 2013, at 7:22 PM, Tschida wrote:

    One last comment after re-reading above posts. I agree that college "Isn't for everyone", however, you fail to realize that without said college degree it is near impossible, unless you work in IT to get a higher skilled-paying job. Therefore, the government has made it a demand that if you don't want to work several low income jobs that don't stimulate you intellectually in any way (though they offer great character building) in order to get higher calibre jobs you HAVE TO HAVE a college degree. So, until a solid resume of sweat and dedication is again accepted in place of a degree as it used to be, then this crisis is only going to escalade as the divide between the poor and rich grows and the middle classes, as it already greatly has, drops to the floor, where all of us blue collar babes have been our entire lives.

  • Report this Comment On March 07, 2013, at 9:27 PM, apositt wrote:

    I don't see the Eureka! excitement with this article. Default or not, a college education is exorbitant in this country and heaps too much debt on the college graduate. There are premier schools that can charge whatever they want and that's fine. But there must be inexpensive alternatives for students from low income families. Jamie Diman might not want to hire them but the ever-increasing need for a college degree to land a job with low to mediocre pay should be satisfied with affordable tuition. At the very least predatory lending practices should be halted and prosecuted vigorously. It's a disgrace no matter what chart you choose to look at.

  • Report this Comment On March 08, 2013, at 3:37 AM, erikinthered100 wrote:

    The student loan bubble parallels the mortgage bubble. Both were inflated by government interference in the market. There's also a parallel with the healthcare market in this respect. In all cases, prices are greatly inflated by government subsidies and other government induced distortions. In the case of student loans (and mortgages for that matter), government meddling in the market has resulted in non-credit worthy individuals loading up on debt. Government has induced many people who should never be in college to pursue a college degree and many people who have no business owning a home to buy one, often completely with borrowed money.

    The Obama administration, with its usual economic illiteracy and folly, continues to worsen these problems in the education, healthcare and housing markets. It will not end well.

  • Report this Comment On March 08, 2013, at 7:36 AM, TMFTomGardner wrote:

    I am genuinely disgusted by the lack of guidance for incoming college students as to the financial burdens they will bear for getting a four-year degree. For me, defaults are merely one thin slice of the problem. Debt-ridden lifestyles are a much bigger problem. I am Foolishly excited for the Internet disrupters that will be sinking the ships of overpriced, under-concerned, tenure-heavy, administrator-heavy universities that have been jacking up their prices far faster than the rate of inflation. Half of today's universities being bankrupted by low-cost, high-convenience, video-networked online education is not enough. What we have set college students up for over the last ten years is disgraceful, in my opinion. What will happen over the next ten years will be delightful. - Tom Gardner

  • Report this Comment On March 08, 2013, at 7:48 AM, dbtheonly wrote:

    Mr. Gardner,

    You miss the point that the courses are only a part of the college education.

    College is more. It's learning to do your own laundry when "Mom" isn't there to do it. It's learning how much alcohol you safely can consume. It's learning to clean up the vomit when someone fails #2. It's learning to budget. It's learning that Doritos & Budweiser are not basic food groups. It's growing up.

    On-line courses give you none of that.

  • Report this Comment On March 08, 2013, at 8:01 AM, whereaminow wrote:

    Tom,

    Bravo! Exactly. But the iron fist of accreditation (a government granted license that restricts supply and helps jack up those tuition prices) needs to come crumbling down as well.

    dbtheonly,

    If a kid needs to have his parents pay tens of thousands, or take on that kind of debt, to learn to do his own laundry, he has bigger problems.

    Morgan,

    What's really behind the inflated cost of colleges is government intervention.

    David in Liberty

  • Report this Comment On March 08, 2013, at 8:58 AM, Zinj wrote:

    Wow....lots of posts here and not one (yet) about hurt feelings or accusations (and counter-accusations) of bias or prejudice.

    Bravo, fools!

  • Report this Comment On March 08, 2013, at 11:02 AM, XXF wrote:

    I'd like to point out, since it has come up in the comments, that the interest rates charged for student loans are actually pretty reasonable when you consider that they are unsecured loans. As the article shows they are basically "secured" against the responsibility of the teenager who takes them out. If they graduate, particularly if they elected to learn meaningful skills, the loans default rarely (relative to those who do not graduate).

    A home loan, on the other hand, is secured against the value of an asset that is worth more than the value of the loan (when the loan is taken out). And therefore the at risk value in a default is minimized. The lower risk associated with this is why secured loans have lower rates than those paid by students.

    I've maintained for a while now that it would be interesting to see lenders take a more active role in the education process and ensuring that their lend-ees graduate, resulting in lenders being able to offer lower interest rates as they are taking measures to "secure" their loans. This could include school and career counselling, mandatory supervised study periods, and even different rates for different majors.

  • Report this Comment On March 08, 2013, at 11:15 AM, mhoff149 wrote:

    There are programs that can mitigate the cost of your student debt. Take the case of the person who has 175k in debt but will only make 30 k/year teaching music; that is an extraordinary amount of debt. However if they were to teach music as a public employee, they could qualify for student loan forgiveness.

    It is agreed that the cost for post secondary education is getting out of hand. While there are still some bargains available, rising tuition and a sluggish economy have certainly lessoned the ROI of a college degree.

  • Report this Comment On March 08, 2013, at 12:08 PM, drhanson64 wrote:

    While I find the correlations of this article interesting, I would also like to understand the default rate of college grads from S.T.E.M programs versus Liberal Arts programs, which appear (anecdotally) to be a target of less prepared students. I have discussed college plans with several high school students who think a degree in "any old topic" will open doors, or have been told that a degree will make them more "marketable". So this is along the line of "college is not for everyone", but shouldn't college counselers be required to discuss the job prospects/earning potential for chosen fields of study? Not that there isn't a need for Liberal Arts, but in my humble opinion I believe that we should be preparing the next generation to face the demands of the technology driven world we live in.

  • Report this Comment On March 08, 2013, at 1:02 PM, thesalesman87 wrote:

    I would like to know why college books cost so much, yet when you turn them in or I should say sell back to the book store they give you very little for them this needs to be looked at.As a parent that paid for three children to go to school why are we not looking into this cost something is wrong. With most of your college's sitting on millions of dollars from investments why can't they use that money to help lower the cost of going to school.

  • Report this Comment On March 08, 2013, at 1:05 PM, TMFMorgan wrote:

    thesalesman87,

    Columbia dean Glen Hubbard touched on part of the reason why in an interview:

    INTERVIEWER: Forgive me, but I'm going to be direct: How does your personal income compare, your private income as opposed to your university salary?

    GLENN HUBBARD: Vastly times more, because I write textbooks, so that's much more remunerative than being a professor.

  • Report this Comment On March 08, 2013, at 3:01 PM, scottpyron wrote:

    I kept waiting and kept waiting to read in the essay about the problem quietly mentioned by commenter KayakerRW--that of the for-profit educational institutions. If one is not familiar with the style, the type students and where the tuition goes (lower to instruction than might be wished), try reading the current Doonesbury cartoon arc, or watching one of the TV probes such as on Frontline.

    To see graphs explicitly contrasting debt with other factors between for profit, public and private universities would be most interesting!!

  • Report this Comment On March 08, 2013, at 5:08 PM, drborst wrote:

    Morgan,

    For some reason, you seem to have touched a nerve with me this week. Permit me a short rant. (sorry Zini)

    I'm a community college graduate and found your crack about community colleges somewhat annoying. In this context, what does it mean to be a community college dropout? Is it someone who hasn't recieved a technical certificate but learned real skills? Would I have counted as a dropout had I stuck to my plan and left a few credits shy of an associates degree (long story, but I accidentally graduated after a third year following an unfortunate event) for a four year college.

    Sure there are kids who rack up bills at expensive schools for which they are not prepared (I've noticed quite a few at for-profit schools lately, but don't have data to back that anecdotal evidence up), but I would never have complete any degree without the local community college.

    And Mr. Gardner, while I share some of your concern with the "disgrace" of college education costs, Internet education might help, but its can be at best only a partial solution. Community colleges could be another part, but they can't do more without some level of respect. (side note, a recent aricle in Time shows that whatever is wrong isn't isolated to education)

    I've been rather successful (so far), and none of it would have hapened without some luck, a little adversity, and my local community college.

  • Report this Comment On March 09, 2013, at 8:44 PM, HarryMoser wrote:

    Useful data but missed key points:

    1. Relation of default rate to degree field: I am confident the engineers did better than the social workers and philosophers

    2. Not enough emphasis on the well paid, secure technical careers such as tool and die maker and precision machinist, ideally achieved via an apprentice program.

  • Report this Comment On March 09, 2013, at 11:39 PM, linmarman wrote:

    Just a few facts from my life make me think that higher education is much less attainable than a generation ago. No stats to support this, just my experience:

    1. Full time tuition in my freshman year (1980) was $333. At a state college with 25,000 students. It has risen way out of proportion with inflation. I was able to pay it with min wage jobs.

    2. My best friend received a BEOG (basic educational opportunity grant) now called a Pell grant. Gov paid tuition support is not new and has not caused colleges costs to skyrocket by themselves. He came from a single parent household and now has a PhD and teaches.

    3. A neighbor with a college freshman (and 11 & 9 graders) told me that the college student could not find a student loan offer below 8%. In this era of 0.1% money market returns. No wonder banks are making money.

    I think a great American treasure is being taken away from the people of modest means by folks that have figured out how to extract profit.

  • Report this Comment On March 10, 2013, at 4:49 PM, BigFatBEAR wrote:

    There are rich-people-with-every-opportunity-and-resource-in-the-world loans, and there are poor people loans.

  • Report this Comment On March 10, 2013, at 7:35 PM, philkek wrote:

    The rich get richer and the poor get poorer. Better Business Bureau advises all fools - including students - to investigate BEFORE you invest.

    Sorry about your $100,000 debt from getting a higher education. School of hard knocks is open to all people 24/7. Good luck with paying back your high interest loans. Thanks to all for a good read.

  • Report this Comment On March 11, 2013, at 6:48 AM, MonroeOnABudget wrote:

    I've been reporting on the college access / student loan discussions for my southeast Michigan newspaper, The Monroe Evening News. A snippet from one of the articles I wrote last year, after speaking with a committee that is looking into the dropout issue is this: "60 percent of high school graduates (in Monroe County, Mich.) move on to post-secondary education of some sort. But many of them do not stay on track. At both the local and statewide level, only three fourths of students who start advanced studies will finish even one year of college credit. Therefore, they expect the discussions to include why the first-year students are getting discouraged or losing interest."

  • Report this Comment On March 11, 2013, at 7:01 AM, MonroeOnABudget wrote:

    In addition: a detailed study that you may find of interest on the dropout situation is the Complete College America project. http://www.completecollege.org/completion_shortfall/

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2294246, ~/Articles/ArticleHandler.aspx, 9/22/2014 8:35:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement