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Monday, May 16, 2011

Student Debt Encore Encore

I'm supposed to be relaxing; I turned in my grades last night. But this morning I listened to yet another installment of Student Debt Woes and Warnings. This time it was NPR.

I noticed that the students with the most debt attended private colleges. I can't help thinking that these schools, with their increases at double the rate of inflation for many years, are to some degree complicit in the problem. There are fewer articles on how student debt is GOOD DEBT. (Similarly, there are fewer articles on how MORTGAGE DEBT is GOOD DEBT). The idea was that GOOD DEBT was an investment in an appreciating asset, while bad debt was spending on a depreciating asset--like a television.

All I have to say at the moment: consider public education. Your debt will be smaller.

I have other things to say too, but will do so later. Oh yeah. Can't resist. Take the student debt quoted when you apply for your loan and MULTIPLY BY FOUR. And add on for the inevitable inflation factor.

Any words of wisdom on this topic?


Anonymous said...

Well endowed private colleges can be less expensive than public schools, especially in these days when states are making big cuts to public education. (I understand tuition at the UCs just skyrocketed this coming year, for example. My cousin is spending less to go to a state school out of state than she would at a UC next year.)

Freshmen-to-be should apply to a variety of schools. They should also try to make themselves attractive to schools so that they can merit a lot of financial aid. Study hard! Do one or two extra-curriculars well.

Don't go into 6 digit debt to go to a no name private school (or really, don't go into 6 digit debt for any 4 year bachelors degree). Big name private schools may have big price tags, but if they want you, they will make the bottom-line price tag more affordable.

Funny about Money said...

I sure do wish a school in AZ offered a physician's assistant program. Unfortunately, despite the University of Arizona's well established medical school, the only PA program available is provided by an expensive proprietary school, which my son is determined to attend.

Apparently UC Davis has a well respected program, but by the time he pays out of state tuition and the cost of living near the Bay Area, he'd end up paying more than if he stayed where he is and forked out the inflated proprietary school's tuition.

Frugal Scholar said...

@NM-True, but it's important to know the difference between need-based and merit aid.

@Funny--Could he establish residency in CA? It might be worth it for the tuition savings.