Friday, April 8, 2016

College Debt, Regret, and Readiness

One third of millennials say they would not have gone to college at all if they had known the debt burden they were going to be left with.

That's one of the big takeaways hit by Bloomberg today, reporting on a survey conducted by TNS "on behalf of" Citizens Bank (I love that "on behalf of," like TNS just felt like doing the bank a big ole favor).

The rest of the picture isn't any better. The average student debt for the group of 18 to 35 year olds is $41,286.40 (a spectacularly specific number). This matches up with numbers from other reports which also say that A) about two-thirds of millennials are carrying that kind of debt and B) it is messing up their lives.

TNS reports that millennials don't all have a firm grasp of exactly what's happening with their debt. 15% of those polled weren't sure exactly what their balance was, and over a third didn't know their interest rate. Almost half don't understand the intricacies of private vs. federal loans.

I can report that all of this is right in line with my personal store of anecdotal data. I gave my millennial children the gift of paying for their college educations, and by the time my first child was halfway through, I had eaten through all my savings and commenced with the loan out-taking. My second child has a degree that is entire a product of Parent Plus loans. I've been at this game for a while (and it will be a while before I'm done).

My loans have been pretty straightforward, relatively speaking, but these reports often forget that for many millennials, the rules on much of this changed along the way. While my son was in school, for instance, the rules shifted and we went from dealing with a well-trained by anonymous functionary of a financial institution to dealing with a shell-shocked employee of the school's financial aid office. At numerous points my loans were passed off to a new institution, which resulted in changes in amounts and loan numbers (at one point, I confess, I discovered that I had been double paying on one loan and was months behind on another).

But mostly, I look at the amounts I had to borrow, and I cannot begin to imagine how my children-- and other people like them-- could possibly have had a live at this point if they were paying these loans on their own. They struggled through most of their twenties in minimum wage jobs; one happened to be in love with and finally married to a young man with a well-paying gig, but the other periodically had to borrow from the Bank of Dad just to make ends meet. I remain painfully, acutely aware and angry at the many ways that corporations like banks and utilities and the various phone companies find ways to gouge money out of people are doing their best but can barely manage. What kind of conscience-deprived business plan involves the grown-up equivalent of knocking down the little kids and taking their lunch money?

Some folks offer their idea of a practical solution-- only go to college for degrees that will immediately result in lucrative jobs. This is bad for the humans getting the degrees, and bad for a society that depends on a full range of talents, skills, and jobs to make civilization possible, but pays very poorly for many of those jobs. And if you don't buy my larger philosophical objections, consider the practical one-- if every student at Bodacious University drops their old major and switches to the two that lead to well-paying insta-jobs, that job market will be flooded, and those jobs will no longer pay well.

I don't think I know any millennials who regret going to college, but what does it say for our grand and glorious dreams of national college attainment that so many debt-ridden college grads (and drop outs) are out there saying, "Don't go, kid. It's not worth it."

And why can we move heaven and earth and try to rewrite the entire K-12 education system in pursuit of academic college readiness for all, but we can't lift a finger to promote the goal of financial college readiness for all. Why have we focused so much fierce attention on making sure that Chris can pass college algebra, but so little attention on whether or not Chris can afford to pay for it.

I have no doubt that this is neither an easy problem to diagnose or to solve, but this survey drives home once again that we have an entire generation of Americans for whom college costs are the biggest problem in their lives. They can't afford to put money into the economy. They postpone buying homes and having children. They struggle with the stress and strain of living under the shadow of huge debt. How can the fact that some are required to take remedial college courses be a huge issue that must be screamed regularly from the rooftops, but the house of debt that has been dropped on them (amidst promises that college would be their passport to te middle class) merit barely a mention?

How can we pretend to talk about making students college and career ready and not talk about the crushing cost of college?


  1. I don't want my children to go off to universities (mine are in Middle School). Both are in GT programs and are constantly bombarded about the AP classes for HS. I have told both that they may take 1 AP class per year IF they wish. I am pushing for them to go to Community College before they decide if they want to attend a university for the following 2-3 years. There is so much time devoted to "Career and College Readiness" for STEM in (ELHI) that neither know what else is out there to pursue as a career/or job. I don't wish to spend a ton of money or burden my children with suffocating debt in an economy that doesn't offer a means to pay it off. We live in very dire times and I am sad when I look at the future for my children. I always thought that parents were supposed to look at their children with HOPE for the future?

  2. Back in the 1960's when I went to college you could actually work your way through school because the minimum wage had more buying power. In addition, the cost of going to school was much lower because state governments actually supported their public institutions.

  3. The $41,286 figure is the average student debt for students that have any debt. Many students have no debt. At my university (in state tuition is currently about $11,000 a year, out of state a little more than double that), the majority of students graduate with no student debt.

    1. Is your state full of rich people then?

    2. Not really. Median state income is in the lower half of the US States. The figures for student debt that are reported are always about the average debt for students with debt. What that does not tell you is what percentage of students have debt to begin with.

    3. Peter's stats say "about two-thirds of millennials are carrying that kind of debt." Ten years ago (or maybe less) I remember the average student loan debt was $20,000. Now it's over $40,000.

      My own three kids finished up at local universities about ten years ago. We had some money in Pell grants (which they seem to be giving out less of lately), my parents helped some with 529's and EE bonds, and my girls got some scholarship money, but they still ended up with some debt. And their friends all had quite a bit more.

      I'd like to see your statistics on how many students graduate without debt. I don't know any students that are graduating without debt. $11,000 x 4 = $44,000. I don't know anybody that can afford that. And that's if you live close enough to commute and don't have to pay board and room, which is almost as much as tuition.

    4. Rebecca,

      You might be interested in this:

      It looks like about 40% of undergraduate students graduate with no debt, 60% graduate with $10,000 or less debt.

      Total cost of attendance for in state students at my university is about $25,500 a year. Room and board is significantly lower if a student rents off campus as my youngest is doing.

    5. Your study is based on calculations from 2007-2008 when tuition and board cost around half what it does now, includes two-year community college degrees, and has conflicting numbers and numbers that don't add up.

  4. I put myself through school on California.
    In state tuition at the CSU system was $374.00 per semester plus the cost of books.
    That was in the late 1980s.
    I was a waitress.

  5. There's a scene in the 2006 movie Maxed Out that haunts me. A couple of people in debt are asked, "Have you ever considered suicide because of your finances?" They break down in tears and nod yes.

    From a more philosophical perspective, David Graeber's book Debt: The First 5,000 Years challenges the assumption that not paying your bills is a moral failing. The poor must pay everything back or be thrown in prison. The rich declare bankruptcy and access additional capital.

  6. My burning desire to print out this post and nail it to the door of my college president is strong. I am currently a college student who made the decision to attend a private college rather than an instate school and that decision burdens me today. My decision essentially came down to which school offered the best program for what I wanted to study, but that is irrelevant for this discussion. Frequently, I question whether I made the right decision or not; I could have attended an instate school basically for free and chosen to not accumulate this massive amount of debt by attending a private school.

    I agree with your stance on promoting college financial readiness within high school, but I think this discussion should include colleges themselves. My institution just raised tuition yet again and continually refuses to listen to student demands for a tuition freeze and administrative transparency. I think colleges should fully disclose the reality of their tuition and high schools should regurgitate these facts.

    Although I agree that high school students should fully understand the financial undertakings of college, students should not completely give up on either their dream school or dream career. Idealistically, if a student works hard enough they should be rewarded for their merits through scholarships helping them achieve collegiate dreams. Students should still pursue their passions but in a realistic frame of mind.

    Not to get political but I believe that making community college free would be an overall beneficiary societal measure, relieving financial burden a launching pad into providing post secondary schooling.