OK, I know – cheap marketing gimmick to get you to read it. Sorry I don’t have anything about Nicholas Cage here. However this may be more valuable information than the movie.
Inflation affects everything – the price of bread, milk, gasoline etc. But one thing that seems to have gone up even more drastically is the cost of college. When I graduated from the University of Illinois in 1986, I left with about $3000 in student loans, which was easily repaid in a few years.
Today, student loans can reach $19,000 or more for a graduating senior from a public college.
private schools that figure may be even higher.
Want to study law or medicine? For as long as I can remember (back to my finger painting days), those were the “good money” jobs. Both professions require years of post graduate education and loans can easily climb into the $100,000 range. Recently, I saw a young female med student on the news questioning President Obama about his healthcare proposal. Her concern was that at graduation, her total student debt would exceed $300,000 – yes that was not a typo. She wasn’t sure if her future income would be sufficient to pay it back.
Really?? I think some thought should have gone into this before taking the loans. Its hard to blame either the President or his healthcare bill for that. Out of curiousity, I checked to see what a monthly payment on this would be. To pay off $300,000 in 12 years at 5% interest would require a monthly payment of $2775.00. Now you could take longer or the interest rate may be different, but this gives you an idea. Certainly its out of my ballpark.
Dave Ramsey always encourages his listeners to look at the opportunity cost of buying something – whether its a car, a flat screen TV, or even college. http://www.daveramsey.com/etc/cms/go_to_college_5788.htmlc
What that means is – even if you have the money, what other opportunities might you be missing? What else could the money be used for? When it comes to college, can you really afford it if it means loading yourself down with debt? What is your re-payment plan going to be?
How likely is it to get a career in your chosen field of study that will allow you to re-pay the loan?
I’m not anti-college. I just want us to think and ask questions first before jumping in.
In the early days of the United States, colleges such as Harvard and Yale were primarily for the wealthy. As the country grew and times changed, state schools offered a wider range of programs and more people were able to attend college.
“No qualified student who wants to go to college should be barred by lack of money. That has long been a great American goal. I propose that we achieve it now.” Former President Richard M. Nixon said this in a special message to Congress in 1970. A lot has happened in the past 40 years. Are we back to a point where college is only for the wealthiest among us?
As a Financial Advisor, I will say that college does require financial planning and disciplined saving. Flipping burgers for the summer will only scratch the surface.
In my next part on this, we will look at some solutions which can help with college costs.