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[Glowcat]

The American system is a bit extreme. In Germany university is basically free. A few years ago most states tried to implement a 500 EUR per semester fee, but this has since been abolished by most, since it was considered anti-social. However the higher funding from tution does benefit american universities, at least the few big ones.

A problem is that the higher tuition might benefit the universities, but most of it is spent on sports rather than the areas we're supposed to value in a university. If the athletics and elitist prestige was removed from university's requirements we'd start to see saner costs and in my opinion a better society overall. I'd personally prefer all citizens be granted access that wouldn't cripple their futures in debt but in the USA that's a pipe dream.

[Sheb]

Still, a university is costly to run, especially if you want it to do research. A student may only pay 1000$ a year here, but the state will back that up with (IIRC) 10.000$ in grants, plus the money the university makes renting out flats to students. If we had to pay for it, we'd also end up with tens of thousands of dollars in debt.

But yeah, 40.000$ tuitions are ridiculous.

[10ebbor10]

Depends, our universities fund the majority of their independent research with corporate partnerships. Might not be so good for neutrality, but it keeps the costs down.

[nenjin]

Damnit I love the moderation around here!

[10ebbor10]

?

[Loud Whispers]

?

Har got banned for doing little but talk down to everyone.

[Graknorke]

Honestly, the more people have a university education the stupider someone looks for not having one. So I'll probably just move to Scotland once they don't secede from the UK; to get a free university education.

[alway]

I think if I were to offer advice to someone fresh out of high school considering taking on large amounts of student loan debt, it would be to not, and instead...get a generic 8-10$/hr job and stay living with your parents for a few years. Save all your money, then put a down payment on a house and rent it out to someone as a break-even-or-better proposition.

This is pretty much bullshit. Between insurance and other necessary stuff, let alone the creature comforts even a broke college student needs, you won't be saving anything on a minimum wage job, even living at your parents house. Or if you are, it's only because you're basically just drawing the saving directly from your parents' savings. Beyond that, your income isn't going to rise above that level afterwards.

You want to make money? Go into a technical or medical field; anything from nursing (really cheap training at community colleges) to programming to a more specialized field. If it's all about the money, read up very well on it first. BLS handbook to start with, then industry/trade magazines for a better feel of where it's going; if it can be automated, expect it to be by the time you graduate, and don't go into that. I won't guarantee you will enjoy whatever it is, but I can pretty much guarantee that if the money is your primary motivator, you will enjoy it a hell of a lot more than being a minimum wage-slave patty flipper for 40 years.

When it comes to universities, look for those with good student aid and more importantly, good career services. I went to RIT, where 3 paid internships are mandatory to graduate with my degree. Which means the university has a very strong financial motivation to help students find good jobs: if they don't, the dropout rate soars and their rankings plummet, as does the number of high-quality applicants.

I came out with $20k in debt, but the ability to make in the range of 50k-100k/year. I would be willing to bet that anyone could make at least $50k/year starting pay if they go into the right fields, even with a dirt cheap community college degree; so long as they're willing to relocate of course.

[Loud Whispers]

If you enter the medical field looking for money, chances are your fields will grow only up to a limit of your expectations.

[EnigmaticHat]

College in the US is damned if you do, damned if you don't.  There are a few fields that are smart to go into, like engineering or medicine, although some of those are difficult or take more time and thus more tuition payments.  If you can make it in those fields you're on the way to success.  For everyone else, this economy doesn't really have enough jobs for all the people graduating college.  If you get into debt going to college there's no guarantee you'll end up with a job afterwards, and now you have to make up ground.

If you DON'T go to college, you may also be fucked.  A lot of employers will automatically filter out all applicants who don't have college degrees, which means you may find yourself working crappy jobs with low pay and never getting an opportunity to find a better job.

[WealthyRadish]

Engineers seem to have a rough time finding employment, as the job market is pretty saturated. The main reason I'm double majoring in computer science and accounting is because I feel that they're useful skills for pretty much anything, and if necessary it could likely secure specific employment making financial software. Many other students seem to be getting degrees with extremely specific careers in mind, which I think is part of the problem. The degrees should be about expanding personal skill, not fulfilling job requirements, and if they pick underwater basket weaving then they're forever at the mercy of that job market.

[LordBucket]

This is pretty much bullshit.

Let's do the math. I didn't before my previous post, so let's see how wrong I am.

Spoiler: stuff (click to show/hide)

$10/hr * 40 hours/week * 50 weeks/yr - 15% = $17000/yr

Stay with your parents and live off of $300/month for food/gas/phone. That leaves you with $13,400. Save for two years, that's $26,800.

20% downpayment is typical for investment properties, allowing you to buy property with value of to $134,000.

Let's look for properties in Pensacola.

And...here we go:

Address: 5903 MITCHELL LN E
City: PENSACOLA
State: FL
Zip: 32526
Area: West Pensacola
County: ESCAMBIA
Price: $135,000
Listing #: 431459
Property Type: Single Family
Listing Type: Resale/New
Subdivision: NONE
Status: Active

Bedrooms: 3
Total Baths: 2
Full Baths: 1

Median rent for properties of that size in that area is $750/month

They're asking 135k, offer 130k, end up paying 136.5 after commission, downpayment of 26...here's a mortgage calculatar, we'll sasume 7% intereest, and monthly payments work out to $692/month.

So, you pay $692 and rent for $750 for a positive cashflow of $58/month. That's plenty. But, let's be realistic and assume a 10% downtime on rentals, so over a year you're paying $8304 and collecting only $8100, for a more realistic net of -$17/month. Still reasonable. You can eat $17/month in exchange for an average of $675/month being paid towards your loan.

Checking amortization, after two years your equity is $2189 plus your downpayment of 26k, so total equity after two years is $28189. I said 50k. So my estimate was off by quite a bit.

...but...

...also remember that since we assumed $300/month for living expenses, minus the additional average of $17/month losses on your rental, that leaves you with ~$1100/month leftover from your dayjob. So double your living expenses to $600/month and apply the remaining $800/month towards early payments on your loan, plug that into an extra payment calculator gets you roughly $19k, plus the $26k downpayment for a total of $45,000 in equity after two years.

So...final result of our hypothetical scenario, by the time your friends graduate with a four year degree and however much debt they accrue, you have four years of work experience, no debt and $45,000 equity in a three bedroom house.

Granted, these are all ballpark numbers. You'll probably want a property manager. You'll probably get a few raises during those four years. You'd probably shop around for a better deal, rather than buying literally the first property I clicked on like I did for the above. Property values might go up or down. Yes, there are lots of factors. But it's a viable option. I'm not sure "get a degree no matter what" is necessarily good advice.

I came out with $20k in debt, but the ability to make in the range of 50k-100k/year. I would be willing to bet that anyone could make at least $50k/year starting pay if they go into the right fields, even with a dirt cheap community college degree; so long as they're willing to relocate of course.

Ok, but even if you get that 50k/yr job on day one after you graduate, average student debt is $26,600 at time of graduation. Once the rates go to 6.8% as described in the OP, 50k minus 25% tax, then subtract the $306/mo you'll be paying for ten years to pay off your loan debt...that's only $36k/yr.

By the time you're done paying off your loans, the guy who didn't go to college owns his house free and clear and it's either generating ~$8400/yr passive income for him, or he's living in it rent free. Yes, you do end up passing him...but it's not so simple as him making 20k to you making 50k.

[alexandertnt]

snip

Its not for everyone though. If I had not been educated in computer programming and instead worked just any job (regardless of the pay), I think I would have gone insane...

In the end I would be happier on the side of the road, but learning, then I would be with a house and just any job.

[Lagslayer]

Posting to watch.

[alway]

So...final result of our hypothetical scenario, by the time your friends graduate with a four year degree and however much debt they accrue, you have four years of work experience, no debt and $45,000 equity in a three bedroom house.

Granted, these are all ballpark numbers. You'll probably want a property manager. You'll probably get a few raises during those four years. You'd probably shop around for a better deal, rather than buying literally the first property I clicked on like I did for the above. Property values might go up or down. Yes, there are lots of factors. But it's a viable option. I'm not sure "get a degree no matter what" is necessarily good advice.


Ok, but even if you get that 50k/yr job on day one after you graduate, average student debt is $26,600 at time of graduation. Once the rates go to 6.8% as described in the OP, 50k minus 25% tax, then subtract the $306/mo you'll be paying for ten years to pay off your loan debt...that's only $36k/yr.

By the time you're done paying off your loans, the guy who didn't go to college owns his house free and clear and it's either generating ~$8400/yr passive income for him, or he's living in it rent free. Yes, you do end up passing him...but it's not so simple as him making 20k to you making 50k.

Note I said community college. For those unable to afford university, community college is dirt cheap.
http://advocacy.collegeboard.org/sites/default/files/11b_3741_CC_Trends_Brief_WEB_110620.pdf
About $2700/y tuition at a community college + $1200 for books & such. Or approximately $4k-$5k per year. Other expenses are approximately equal to your plan. Additionally, many states now have PSEO programs you can test into. These allow highschool students to take community college courses for free, including both tuition and books, for both highschool and college credit. I personally graduated highschool with 80 semester-hours and a gen-ed 2 year degree. Had I wanted to, I could have finished a 4-year program in 2 years (I stayed for 3 to take more electives relevant to my major, and by the end had run out of interesting coursework to take). Now, if you stayed for a full 4 years at your CC, that's $20k over 4 years. Total. That's less than your plan's down payment.

Now let's look at nursing, one of the fastest growing non-tech careers. For an associate degree, which is the minimum for becoming a nurse, that's $10k or less. According to BLS, median wage is about $65k. So your typical, middle-of-the-road nurse gets $65k; that's a very livable income in most of the US. So, that's a stable source of employment at a sum cost of 2 years and $10k. From what I recall, entry salary for that sort of low-training nurse is fairly low; I think it was about $30k. Which means it has a comparable outcome to your plan in half the time and at half the cost while giving additional opportunity for career growth, and an in-demand job which will ensure stable employment.

Now, with the jobs you will get right out of highschool, you also note you will have 4 years of work experience. That work experience is all but useless. "I worked at McDonalds for 4 years," will not net you any higher pay or opportunities than leaving it off your resume entirely. You don't climb the corporate ladder at McDonalds, you make $8 an hour and you like it or you get replaced with the next schmuck without a viable plan for life.

There's also a large amount of things you are overlooking. Things like health insurance, the other rapidly rising cost. If you can't get that through an employer, you're gonna be screwed. Another thing McDonalds does: average worker hours are around 18/week. That's because they don't need to offer company healthcare to part-time employees; those under 20/week. And apparently even their actual insurance plans have something like 2k-10k/year limits. So if you get a single serious illness, every penny of your savings are gone. You're also not allowed to have children. Those cost way too much, and the delivery alone will blow your savings from the hospital bill. No dependents either; you don't have money for them. You've also probably got car payments and car insurance; if you're just bumming those off your parents, again, that's just taking money from your parents' account and dumping it into yours. In short, I severely doubt anyone's ability to live on the budget you've outlined. You simply can't live on $4000 a year; it's why minimum wage isn't considered a living wage. You simply can't live on that and get ahead in life.


All that aside, the big reason I recommend people go to college/university is this: Too many people aren't. There's this massive, and growing, labor pool at the bottom which consists of those with highschool diplomas, but nothing else. It used to be that there were the factory jobs and similar "blue collar" jobs. An increasing number of those are vanishing to automation. US factory productivity is on the rise. US factory employment is dropping like a rock. And that trend will continue in many of the unskilled labor jobs currently done by unskilled workers with a highschool diploma as advances in AI and robotics makes it increasingly easier to develop technologies to replace workers. As a result, finding employment as one of those workers will be harder, take longer, have lower pay/benefits, be easier to be fired, and in general become extremely easy to fall further and further into poverty. To put it bluntly, anyone who lacks high-value skills will be entirely screwed barring major social upheaval. The lucky ones will work until the day they die, while the unlucky ones will find themselves retired at the age of 25 due to a lack of jobs.