Why Doubling Student Loan Interest Rates Is a Good Idea

graduateBack in the days before children, my husband and I squabbled occasionally on whether or not we should help our kids pay for college. I thought it tremendously important that we do so, him not so much. It’s one of those bridges we agreed to cross when we came to it.

Then we had a kid, looked at our schooling options, and decided to enroll her in private school, despite the economic toll it takes on our family. It’s a sacrifice we’re willing to make for our children, and they’re getting a better education than they would at the local public school.

Side note: The public school would spend more money on our kids than the private school they attend does. This is why I strongly support a voucher system, because choice and competition increases quality of education, not massive sums of money thrown at it.

Anyway. Because we’ve decided to enroll our kids in schools that will actually teach them, rather than give them participation trophies and spend money fighting social issues in the legislature, the importance of paying for their college educations has dwindled considerably for me. In fact, given the state of universities these days, the importance of even going to college at all is highly questionable.

College grads aren’t getting jobs, and at least 85% of them are moving back home with mom and dad. I love my parents a lot, but I would rather share an apartment with three other girls and work flipping burgers or cleaning houses than move back home with my parents after graduation, but to each their own.

Given the fact that college graduates aren’t exactly finding easy employment combined with the precarious student loan business bubble, I can’t really see encouraging kids to go into debt for education unless they want to go into a field that requires it, like medicine or law. Seriously … what’s the point?

There’s been a lot of talk in the news recently about the doubling of federal student loan rates, which completely ignores the real problem: The outlandish cost of higher education these days.

Sarah Lacy over at TechCrunch has an interesting write-up on an interview with PayPal co-founder Peter Thiel, who boldly states, “No one pays a quarter of a million dollars just to read Chaucer,” while talking about the outrageous price tag on a Harvard education.

Mr. Thiel is challenging the notion that college is necessary for anyone that wants to be successful by sponsoring the 20 Under 20 Thiel Fellowship, a program that has granted $100,000 to 20 people under 20 years old to drop out of school and spend two years starting their own business. So far, results have been quite impressive.

The fact of the matter is that not everyone needs to or even should attend college. It’s not the shoo-in to a job it once was, so young people should weigh the cost-benefit analysis very carefully before deciding whether or not to enroll in post-high school studies. 

Federal loan rates doubling might make that decision easier for many young people, and I salute those that say, “No thank you,” to a horrendously expensive education just because they think that’s what they need to do. I’d encourage any and all young people to use wisdom, discernment, and practicality when trying to figure out their calling in life

Then again, public schools aren’t really big on teaching wisdom, discernment, and practicality these days. They’re having a hard time just teaching kids to read and do basic math.

 

This post is part of a weekly conversation with our Moms Matter 2012 political bloggers. To see the original question and what the other writers have to say, read What Do You Think About the Student Loan Interest Rate?

 


Image via Schlusselbein2007/Flickr

economy, education, in the news, politics

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Glide... Glider7522

I usually loathe and detest everything you write, but I think you hit the nail on the head here...as much as it makes my skin crawl to admit it.

Flori... Floridamom96

Guest poster...Blah, blah, blah. Poor teachers. Blah, bah, blah. If you don't want to have to put up with parents then choose a line of work without children. Otherwise, do your job and quit your pathetic whining. Irishchick, my story can be anybody's story if they just stop waiting on everyone else to solve their problems for them. As long as someone says "college or welfare" I'll continue to point out what a lie that is. Then again, I can continue to tout my story all I'd like. Liberals need to stop telling everyone they disagree with to shut up. No wonder current college graduates can't get hired. They aren't qualified for anything other than being "well rounded". What idiot goes tens of thousands of dollars into debt to "become well rounded"? Nikolleen, good heavens, you're college educated? What a profound waste of your money. 

nonmember avatar IrishChick

Floridamom, I don't understand why you are being so aggressive. Why don't you go try get yourself a a college graduate level job. Then you'll understand what it's like at the moment- there are few jobs, those that are hiring only want well educated graduates, making it hard for people.Thankfully I have a degree that will give me a great chance to get hired. But not everyone will have the same security, that's just how the world works. Frankly i'm amazed at your narrow mindedness. Your story cannot be anybody's story. Not everybody gets the opportunity to build a successful company from the ground up. And i'm sure your husband, in his ''multi-million dollar company'' is primarily interested in hiring well-educated graduates. Since you feel nobody is offering any intelligent solution, here's one- the most available jobs at the moment are those for science, business, accounting and IT graduates. It's in the best interest of people wishing to get good jobs after college to study those subjects.

nonmember avatar IrishChick

And stop telling us that the ''college or welfare'' argument is a lie. For many it is the hard, unfortunate truth, and your belittling it doesn't make it any less true. You obviously lead a very cushy life. One where you don't have to worry where your next meal is coming from, or how you'll pay your bills. Some of us are working every hour under the sun, in our jobs that we worked hard in college to get, and don't have that security. And on top of that, many American students have crippling loans to pay off.

jalaz77 jalaz77

Flordiamom96, sounds as if you are bragging and don't have a right to since your husband is the one in the company, not you. You flapping your jaws make you sound loud and defensive. I wanted to prepare myself for the what if's in life, like what if something happens to my hubby, who will pick up the pieces? Me because I do have an education that opened up hundreds of doors and will continue to. I majored in nursing, smart choice but also expensive which is a damn shame. It should not take years to pay off student loans and this coming from a family of millionaires. Which doesn't mean mommy and daddy should foot the bill, that should be up to me. So Florida enjoy your husbands wealth, remind yourself of that every time you wake up, my husband gave me this not me.



My point in my original post is college should not be so expensive, kids need guidance on how to borrow a reasonable amount of money and what to major in also plays an important role in your future. I will support my kids in everything they do but if one wants to be an artist I will guide them by sitting down and saying fine but you need a job that will pay the bills so what will that be? This is a parents job!

Flori... Floridamom96

IrishChick, you have no idea what my life is like or where it's taken me. But since you seem so interested...my husband and I clawed our way up from the bottom. From exactly that place you say the lack of college education takes people. While we have never accepted welfare, we had some profoundly lean years. I come from a family where many of our early years (actually all my years at home) were very, very tight. For many years we were poor, but I didn't know that until I got older. My father (who also lacks a college degree) eventually (after I got married) started his own business which, through his hard work and my mom's support and sacrifice, has become remarkably successful. When I got married we had nothing. We spent years without. Without medical insurance, without a vehicle, without a phone because we couldn't even afford a basic land line, even times where we were unsure how we would afford to eat. But we didn't stay there. Many, many years later we have finally begun to see some of the fruits of our labors and I will not be ashamed of that. So, jalaz, I point out our story to highlight the fallacy that it can't be done without spending tens of thousands of dollars on a college degree. It can and we are proof. Not having a college degree is not a hopeless situation. Why on earth would you want someone to believe that their lot is bereft and desolate? Why wouldn't you want to say, "look, I know it isn't you would have chosen, but you can adjust and succeed."

Rhaps... RhapsodyG

When you separate the cost of something from the consumer, the consumer spends willy-nilly before they feel the pinch. Who hasn't heard the statistics about people who use plastic spend more money when they go shopping than people who use cash? Who hasn't heard the statistics that people who either pay for their own health care or have high-deductible plans for their health insurance are more mindful of procedures in a doctor's office? Remove the federal subsidies from student loans, allow kids to see what a real college education costs, and they will make wiser decisions about how to get what they want in education so they can be prepared for the future costs. (Ie. no more bachelor degrees in underwater basket-weaving, Lego architecture, and puppetry.)

nonmember avatar Zoloft

QUOTE>>>

Federal loan rates doubling might make that decision easier for many young people, and I salute those that say, “No thank you,” to a horrendously expensive education
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unless they want to go into a field that requires it, like medicine or law.
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