Chapter 11 Paying for College
“College, the most expensive four years of your life.”
Christine is a smart go-getter. Her parents came from Vietnam during the war. Her mother survived the war as a flower girl and when she arrived in the states she had no education and put Christine and two other daughters through high school in Baltimore. Christine was the oldest and the pride of the family having graduated at the top of the class and earned a spot at the prestigious University of Southern California. Christine moved to the other coast and trained to become a famous architect. She took a a year to study abroad in Italy to study how the masters built their masterpieces. She was a favorite of many of her professors and was offered jobs right out of college. She traveled the world and worked in South Korea for one of the top Architecture firms. She traveled alone through middle east on a fellowship to study middle eastern native architecture and design. She came back to jobs waiting for her in a depressed market and within a year brought her fiance from Tunisia to live with her. At the age of 27 she was earning good money at a good firm doing what she loves. She had many opportunities thanks to her studies and was living together with her fiance in a studio barely big enough for a bed, a desk and no kitchen. She has no car and sends most of her money that she makes to a bank. She has a wonderful life on one hand but her future is far from comfortable at the moment. At the age where she should be able to put money away for a wedding, for a house she is barely making ends meet because she has over $200,000 in loans which she did not realize she would have or how she would pay back. She told me that she does not regret her decision to go to an expensive school given the opportunities she now has but the debt obviously weighs her down considerably.
In 2011, colleges are financed through a form of predatory lending that is similar to the lending in the housing market, except it is worse. Unlike your college loan, with a house in foreclosure, you can walk away from your debt. The college loan creditors will pursue you across space and time: garnishing wages and collecting to the end. You can escape kids and spouses, but you cannot get away from college debt.
In 2011, colleges are financed through a form of predatory lending that is similar to the lending in the housing market, except it is worse. Unlike your college loan, with a house in foreclosure, you can walk away from your debt. The college loan creditors will pursue you across space and time: garnishing wages and collecting to the end. You can escape kids and spouses, but you cannot get away from college debt.
Unlike with a house or credit cards, the bank do not asks how much you make, how much the education will cost and do not look at your major and how much you will make before saddling you with debt. The bank does not look at how much you have, how well you studied, if the college is credible or even if you will ever make money to repay. Tuition is the same cost regardless of the cost of that education. It is the same no matter how much professors in your department earn or how much your labs cost or what your prospects for making money and paying back that loan with your chosen major. They also don’t seem to wonder that it may be predatory to ask 18 year old that has never paid bills before to take on the responsibility over hundred’s of thousands of dollars and make decisions without considering for a second if those kids know what they are doing. It is also a shame that many parents allow their kids to sign the contracts that saddle them with obligations for life without advising them better. In the end, for those without generous parents, the only way to choose less debt is to choose a less expensive school or to work and not have loans.
So now that you know that signing up for a loan is a big deal and that no one cares if you will be on a hook with a giant mortgage payment for the rest of your life, I will tell you how to make that decision of taking a loan or not through a couple stories.
Unlike Christine, I decided to go to a reputable but cheaper University. My parents were able to pay the tuition (which they still to this day remind me of), I worked for most of my living expenses even though my parents were still able to help me considerably. I graduated late but I had no debt. I was able to travel the world, buy a car, buy a house within a few years of my graduation. Having no debt and a job which paid well meant a fairly relaxed life style.
Another friend Arthur who went to the same school as Christine also traveled the world but being an orphan and disabled, was unable to find a job and so had to try and escape his impossible debt or as I call it, 21st century indentured servitude. Many people who put themselves into poor financial situation, are unable to recover mentally. They begin to rack up credit card debt, buy houses they cannot afford. The freedom and cheap money corrupts people and the financial institutions then charge exorbitant fees knowing fully well what will happen, relying on the fact that these poor and naïve kids will make uninformed decisions at a time when they are not ready and thus profit from the misfortune of others. If banks were charlatans fooling people out of nickles and pennies in the streets, they would be in jail, but stealing millions puts them in expensive board rooms.
If this book is still relevant, and our government failed you, then I suggest, look at your finances, how much can you afford, how much will you earn in the end, what will be your debt, do you want to owe someone money for the rest of your life?
Think about these decisions hard and make the hard choice of going to a cheaper school, or going to a community college or saving up some money before entering college. Whatever you do, remember that no one will save you or warn you except this book and that if you follow your desire without thought of how that desire will impact your life, you may come to regret your decision for the rest of your life.
So what are the other options besides debt and work?
Well, my best friend paid barely anything, he lived at home, went to community college, went to a less expensive public University and finally attended Law School on a scholarship.
In a sense, you should always try to go where your skills and abilities permit you to go. The choice to go to an expensive school is yours and you can spend a few days per scholarship application, work and study. The odds for those who are not mega rich are tough. Many do not graduate due to the stress of earning money and going to school and life. However with the goal of a better life in your sight, and the belief that many people before you managed to do this and so will you, will help you overcome, graduate in a good financial position with the freedom to pick and choose the next step in your life.
seven year degree 