Sunday, November 26, 2017

Taking On Student Debt Is A Choice

In this post I wrote yesterday I said that going to a UC school is a choice that some people make, and my implication was that for some people it's a bad choice.  And no, I don't believe that everyone is entitled to a UC education and diploma.  People who are academically and financially capable of earning a diploma should get one, others should go elsewhere.  Yes, I know that our UC's cost a lot of money, but my taxes are helping foot the bill.  Wanting something really bad doesn't entitle you to have it.

Let me take you back to my senior year in high school.

There was no Common Application then, and there was no internet.  Every school had its own application form to be filled out on paper, and many had application fees. Unlike today, we didn't apply to 20 or 30 schools and have "reach" schools and "safety net" schools, we applied to schools we wanted to get into and had a reasonable chance of getting into.

I applied to 4 schools:  the Air Force Academy, UCLA, Purdue, and West Point.  I couldn't afford college, though.  I was living with my grandparents, estranged from my mother (not that she had any money anyway), and with a dad who worked very hard to support the rest of his family.  Everyone had always assumed I'd go to college but there was no thought given, ever, to how it would be financed.  While I qualified for Cal Grants and Pell Grants, I found no scholarships for a bright white kid (from the poor part of town) who just couldn't afford college.  While I had an uncle who had attended college, no one in my family had graduated college.  I had no guidance, no money, no real hope.  I did, however, have a sense of my own awesomeness.

I admit I was arrogant.  It was clear to me that things would work out for me because I needed them to.  I'd always succeeded in academic environments, how could this one, even though it involved finances, be any different?  I didn't fill out the paperwork when I was a National Merit Semifinalist--because I knew I'd get into the Air Force Academy, and someone else would need that National Merit scholarship money that I was sure to win.  Neither did I apply for ROTC scholarships; I was too good for ROTC, I was going to go to the Academy.  And if I didn't, I'd get a great education at Purdue or UCLA anyway.

The arrogance, the arrogance.  Oh, the things I'd say to my younger self if I could....

I wanted to go to UCLA or Purdue.  I really did.  I was accepted to both. But there was no money.  I didn't see how I could work and go to school and earn the grades I knew I was capable of.  I decided that the best plan for me would be to enlist in the army, earn GI Bill benefits, and go to college at some later date.  That was the economic choice I made.  Then, one day in 4th period class, finally, late in my senior year, a note came from the office.  "Call home.  Large envelope from West Point."  I didn't really want to go to West Point, but I didn't get a nomination to the Air Force Academy.  West Point was the only school I was accepted to that I could afford to attend--because, as a military academy, I didn't have to pay any tuition, and what costs there were, I was able to come up with the money.  So that's where I went.

It's clear, looking back, that I made a lot of mistakes.  Things turned out ok in the end, but it was a difficult time.  A very dark, difficult time in my life.  You'll notice, though, that the choices I made all had financial consequences, some good and some bad.  At no time, though, did I decide to take on debt that I didn't think I could reasonably handle.  At least I didn't screw that up.

Not everyone thinks that way, though.  As I wrote yesterday, there are students at our UC campuses who are living on food stamps.  They chose an expensive school, one they clearly can't afford, and thus chose penury.  Perhaps they think their sheepskin will allow them to make enough money to make it all worthwhile; some people can accept that sort of risk, I don't live that way.

Today I came across this story from the Boston Globe, lamenting how college debt is even worse for black students than for whites:
Recent research and data from the US Department of Education indicate that African-American students, like Reyes, are taking a greater financial risk than other groups in going to college, even as a degree has grown increasingly vital for workers hoping to survive in the modern economy. They typically start with a smaller economic cushion, are more likely to borrow, and, on average, earn less upon graduation. 
Reyes, the protagonist in the story, chose to go to a private college in downtown Boston.  She chose to take on debt.  Combine those, and to me you get a bad series of choices.
As a result, instead of bridging the racial equity gap by opening the prospect of well-paying jobs, getting a degree can actually widen the gulf in wealth between black and white adults.

African-American students who started college in 2003-04 typically owed 113 percent of their student loan 12 years later, according to the most recent data from the US Department of Education analyzed by the Center for American Progress.

By contrast, white borrowers had paid down their debt and owed only 65 percent of the original amount, and Hispanic borrowers had knocked down their debt to 83 percent of the initial loan.

College costs have exploded for everyone, and as a result, the amount of student loan debt Americans are carrying has approached $1.4 trillion. Black students, though, are more likely to take out federal loans to earn a degree, with nearly 80 percent going into debt to attend college, compared to 60 percent of students overall. Then they struggle to repay those loans, weighed down by increasing interest and default fees.

Limited family resources, a higher likelihood of dropping out of college, dampened earnings even with a degree, and a greater chance of attending predatory, for-profit institutions all contribute to the more burdensome experience of African-American student loan borrowers, experts say. 
Another person in the story made worse choices than Reyes:
Allison, a single mother of three who lives in the western Boston suburbs and asked that her last name not be used to protect her privacy, said that after spending most of her young adulthood working in fast-food restaurants and warehouses, she decided to go to college. She went to MassBay Community College and then to Lesley University to earn her degree. She finished in 2013 with about $10,000 in debt.

But even with her bachelor’s degree, Allison, 46, said she has had to work a full-time job and two part-time gigs on the weekends to earn the $65,000 she needs each year to pay her bills.

“I was spending more time out of home, away from my kids,” she said. “When I was home, I was tired. I was catnapping here and there.”

So she returned to school at Bridgewater State University to get her master’s degree in social work, in the hopes of finding a higher-paying position, with a leadership role. But there are fewer grants and scholarship options for graduate students, and by the time she finishes her program next May, she anticipates owing $70,000 in student loans.

“I am disappointed that there aren’t more options,” she said.
$65,000 in bills?  Holy crap.  Until this school year I didn't even make $65,000, much less have that much in annual expenses!  What is she doing to rack up $65,000 in bills each year?  And am I reading the story right that she's assuming an additional $70,000 in student loan debt to get a degree in social work, a field not known for high pay?  I don't think Allison is making good choices.

The article closes thusly:
“Having less debt opens you to so much more freedom when you get out of college,” she said.
One way of having less debt is not to assume so much in the first place.

When I've written on this topic in the past, the lefties will jump on my and say that I want to keep the poor and the black from getting college educations.  Let me just head that off at the pass right now--no, that's not my intent at all; and in fact, for you to believe that betrays, at an absolute minimum, a lack of reading comprehension, common sense, and understanding of personal responsibility.  I don't believe that people should have things just because they want them, and I do believe that people are entitled to no more than they can pay for.  Making bad decisions does not entitle someone to the exalted (on the left, anyway) status of victim, and wishing things were different doesn't mean that you're entitled to have them that way.

I think we in education do a disservice to kids.  We make it clear, both subtly and overtly, that going to college is the only "right" choice to make out of high school, and that anyone who doesn't go to college has essentially failed the first test of adulthood.  The Boston Globe story was clear that, on average, black families in this country have far fewer financial resources on which to draw than white families do; combine that with the unrealistic expectation that everyone should go to college, and it's no wonder that black students and families make riskier financial decisions in order to fund higher education.

How would I handle this situation, for everyone?  I'd get rid of two views:  first, the idea that everyone can and should attend college, and second, the entitlement mentality that says you should have whatever you want simply because you want it.  I'd have people focus on reasonable, achievable, affordable goals--subsidized community colleges do a great job of meeting general ed requirements at a relatively affordable price.

Then we could start looking at why higher education costs have risen so rapidly in recent years, see if a little sunlight will help.  But the first step is personal responsibility.  People need to make good choices.


Anna A said...

Even though this is slightly off topic, one thing that I noticed about Allison's story is her age. She is already vulnerable to age discrimination, and starting a new career. It is going to be very difficult.

Why didn't some counselor mention that to her?

Auntie Ann said...

Is Economics a required course anywhere anymore? My high school required it back in the 80's. Seems like introducing concepts such as ROI and compound interest would be seriously useful. College loans should also come with full explanation of what how much the payments will be every year and how long it will take to pay them off.

lgm said...

Personal responsibility works if there are options. When I was a teen, the way out of your parents' basement was vo-tech while in high school, or taking the work release option, or enlist (if one was qualified). Gals would learn to cut hair or gain secretarial skills, and that would give them enough to get an apt in a location near a college if they wanted to go on. Guys had more options. These days, the community has removed the vo-tech choices and given the work release type of jobs to senior citizens. Teens with no parental support other than a bedroom do lawn work and so forth until they can earn enough to get a vehicle that will allow them to land a job with bennies.

I personally took debt and went to college, since I didn't qualify to enlist or for an ROTC scholarship. The ROI was good enough to clear my debt in a year. Not a lot of majors in many states now that would let a Pell Grant plus loan student do that. I don't see the point in the community not making college affordable for a capable student -- the ROI for the community is much better than having that student become a min wage worker and take a decade bootstrapping himself.

Anonymous said...

I am sure you didn't screw up a lot of things in your life. Give yourself more grace.

socalmike said...

Darren, perhaps it's not the degree itself, but the major. If you're going to incur debt by going to Big Time College, maybe you should study something that will allow you make more money, to pay back the debt sooner. Like a STEM field - the highest paying majors are STEM fields, with engineering making up 7 of the top ten. Social work? At Big Time College? Mistake.

I tell my students all the time - with a few exceptions, if you want to make money, do something math related.

GoogleMaster said...

Substitute "attend college" with "own a house" in your post, and you've got every housing bubble blog I used to read ten years ago. :-)

Darren said...

Funny how that works, huh?

Ellen K said...

We saved for our kids via the now defunct Texas Tomorrow Fund. We had planned a 2+2 program-two years of community college and two of university. That would've been completely funded. But our kids chose to attend a four year university, taking on more debt. To be fair-both of them worked full time-my son at Jack in the Box graveyard shift (every mother's nightmare!) and later as a manager at ChikFilA. My daughter was an RA on campus for two years-free room and board-and she also was a manager for awhile at ChikFiLa. They worked hard, we helped when we could-but it wasn't a luxurious party lifestyle. They graduated-they got jobs-Both of them have paid off their student loans AND managed along with their spouses to buy decent houses. What this has done is to make them very frugal with money-to the point they are hesitant to have kids. They are also very bitter about friends of theirs who have gotten student loans and used them to fund honeymoons to Hawaii, buy cars and do countless other things. Trust me, a great many student loans are paying for anything but college.