Everyone deserves a...

...college education. Really? Are you sure?

It started in the '50s. A good stable job, maybe in a union, led parents to want more for their children. College degrees and professional jobs looked like great ideas. So for the next few decades demand for college and ways to afford it were steadily rising. One day some folks in the loan business got together with some politicians and made a law that excluded college loans from bankruptcy.

Imagine you're a junior in high school getting ready for your first crack at the college boards. (Do they still call them that?) Maybe you think you want to be an architect or teacher. It's time to look at colleges that work, not only your field of study but maybe 2 alternatives. Consider your budget as well. If you and your parents have $20,000 saved for college, you might spend that on your first semester once you add books, commuting or housing, fees, parking, etc. The average private college is now over $16,000 per semester. A state school will cut that to maybe $5,000 which helps a lot if you live near one.

Community colleges help a lot. The one near me is about $110/credit. My private college was a bit less than that over 30 years ago. Keep in mind the fees and books. I had a course that required a $45 book. Even at community colleges today a text book can be almost $100.

Right now total personal debt in the US is closing in on $17.5 trillion. Almost 8% of that is for student loans, about $1.3 trillion. We add about $10,000 to that every 3 seconds.

Some things to really consider, there are 2 ways out of student loan debt: (1)pay them off, (2)die. Death won't net you much for that college degree. Looking at paying off the debt works if you get a job that pays enough and have low expenses. Let's talk about the traps. Deferments are a massive landmine. A deferment does not stop interest from accruing. If you're thinking about putting off undergrad loans while working on a masters, check on what the payments will be after. If your parents co-sign your loans, and anything happens that you can't, they must.

Of course you can always just default. If you got a job and started paying only to be left out in the cold during an recession, just go bankrupt on your other debt. Having the loan sharks in the student loan business solvent enough to keep lending so colleges can continue to expand and give everyone that college education which will keep them in debt for years is great for our economy and for young people. The highest source of personal debts in the US are mortgages. Student loans are #2. Mortgage interest is tax deductible. Part of health care costs are tax deductible. Student loans or at least the interest... hell no.

My perspective: The average new grad will earn $45,000/year; that's about $645/week take home. That masters my net you an extra $80/week.

My daughter manages a store with about 10 employees. The store is part of a national chain. She has an associates from a community college. She's making about the same plus quarterly bonuses with a student loan balance of maybe $1,500. She's 27 now. Her grandmother wants her to go back to school. She hated school. Going back would mean either giving up the manager's job and working part time for about 4-5 years, losing 60-70% of her net pay and probably taking a big batch of loans.

IMHO state and community colleges should be free.