Posted on 07/09/2021 8:24:00 AM PDT by SeekAndFind
Authored by Mike Shedlock via MishTalk.com,
Financially Hobbled for Life
Unable to discharge debts in bankruptcy, students with useless degrees, especially master's degrees are Financially Hobbled for Life.
Recent film program graduates of Columbia University who took out federal student loans had a median debt of $181,000. Yet two years after earning their master’s degrees, half of the borrowers were making less than $30,000 a year.
The university is among the world’s most prestigious schools, and its $11.3 billion endowment ranks it the nation’s eighth wealthiest private school.
Lured by the aura of degrees from top-flight institutions, many master’s students at universities across the U.S. took on debt beyond what their pay would support, the Journal analysis of federal data on borrowers found. At Columbia, such students graduated from programs including history, social work and architecture.
Undergraduate students for years have faced ballooning loan balances. But now it is graduate students who are accruing the most onerous debt loads. Unlike undergraduate loans, the federal Grad Plus loan program has no fixed limit on how much grad students can borrow—money that can be used for tuition, fees and living expenses.
Panic Attack
“There’s always those 2 a.m. panic attacks where you’re thinking, ‘How the hell am I ever going to pay this off?’ ” said 29-year-old Zack Morrison, of New Jersey, who earned a Master of Fine Arts in film from Columbia in 2018 and praised the quality of the program. His graduate school loan balance now stands at nearly $300,000, including accrued interest. He has been earning between $30,000 and $50,000 a year from work as a Hollywood assistant and such side gigs as commercial video production and photography.
“We were told by the establishment our whole lives this was the way to jump social classes,” said Matt Black of an Ivy League education. Instead, he said he feels such goals as marriage, children and owning a home are out of reach.
Grant Bromley, 28, accumulated $115,000 in federal loans while getting his Master of Arts in film and media studies at Columbia. Mr. Bromley earns around $16 an hour and can’t afford to pay down his loan balance, which is $156,000, including undergraduate debt and interest. “It’s a number so large that it doesn’t necessarily feel real,” he said.
Highly selective universities have benefited from free-flowing federal loan money, and with demand for spots far exceeding supply, the schools have been able to raise tuition largely unchecked. The power of legacy branding lets prestigious universities say, in effect, that their degrees are worth whatever they charge.
Who's Offering Useless Master's Degrees?
The answer is the same as who's offering useless degrees in general: They all do.
Where the heck is someone with a master's degree in stagecraft, art, history, political science, photography, English, foreign language, culinary arts, etc., etc., etc., supposed to get a job that will pay the bills?
A few will get lucky, the rest will be financially hobbled for life.
Dear President Biden, You Need an Education, Starting With the Meaning of "Free"
I had no idea the above article was coming out today. Yet, I mentioned an aspect of it yesterday in Dear President Biden, You Need an Education, Starting With the Meaning of "Free"
George W. Bush signed the "Bankruptcy Reform Act of 2005" making student debt uncancellable in bankruptcy. Guess what happend?
Biden's solution of course is a "free" money student debt forgiveness program.
Student debt is not dischargeable in bankruptcy so the cost of programs soared along with the willingness of universities to promote useless degrees for the masses.
Administrators and teachers who make more when enrolments rise piled on. And of course the unions piled on encouragements in need of money to support ridiculous pensions.
With the money pouring in, the salaries of football coaches and administrators soared.
Don't forget mainstream media parroting the need for everyone to get a degree with no mention ever that most degrees are worthless.
Endowments
Columbia University compares its endowment program to that of other bigger schools. Donate, donate, donate is the mantral.
Don't Donate a Penny!
Endowment money is not for students, it's a slush fund for administrators, coaches, and their pension plans.
Solutions
Biden's Free Education Program
Instead of doing anything that makes any sense, Biden's proposes "free education" as does Elizabeth Warren and Progressives in general.
The problem is "free" someone is paying for the building, the teachers, the coaches, the staff, the administrators, and the pension plans.
Make it "free" and there is no limit on any of the above.
"Free" is the typical proposal, but "free" is never the solution in practice.
Mish
The problem with these loans is compound interest. The lloans could be more easily paid down but as it stands, people are indebted forever.
RE: It would be much cheaper to get a degree overseas. Many European colleges will let you finish in 3 years too.
I have a friend whose son studied for his medical degree at At All Saints University College of Medicine, Saint Vincent and the Grenadines ( Grenada ). All Saints University College of Medicine is recognized by the Educational Commission for Foreign Medical Graduates (ECFMG), Foundation for Advancement of International Medical Education and Research (FAIMER), and the World Health Organization (WHO).
The tuition was markedly cheaper than ANY Medical School in the USA.
He is now a doctor at the State University of New York Stony Brook Hospital.
RE: An MBA from a high profile business college can pay off in different ways.
Yep, See my Post #27 above
My daughter also has an International Business Degree and is looking at getting her Masters in Marketing and Analytics. She has no debt and estimates she can complete graduate degree for $51K of which she plans to pay half to minimize any debt. For her, the International Business degree was a BA with a semester overseas at a business school and a language requirement. She got lured into to working for a sports franchise. Not great money but a good learning experience. She learned the difference between a business degree and a Sports Administration or Sports Management degree. (Worthless degrees). She was used specifically to work with corporate clients since she did not sound like a immature frat boy when discussing sponsorship’s and purchasing boxes. COVID hit and they released all the sport degree holders and kept only her. Her VP tried to keep a golf buddy, but the CEO intervened and said he wanted her because she did not talk or work like a millennial. He trusted her to work at home unsupervised. Money and advancement in sports sucks so she is getting her Masters and moving on.
Biden was behind amending bankruptcy laws to exclude student loan debt (and to severely restrict dischargeability of credit card debt). If the student loans are dischargeable in bankruptcy, then lenders will be very hesitant to loan money to students pursuing degrees that will not allow them to repay. Think how many “woke” degree programs would be eliminated by that!
What's that saying about a broken clock is right at least twice a day? Biden's suggestion may actually turn universities back into educating people with useful skills.
See Figure 4 Percentage of Median Earnings Needed for Student Loan Repayment by Major in Sixth Year, by Major:
and the paper it is in:
https://www.hamiltonproject.org/papers/major_decisions_graduates_earnings_growth_debt_repayment
Bear in mind that the decision is more complicated than those graphs might suggest. Your economic future also significantly depends on your personality and where you live.
So my master’s degree where the hardest class involved ripping CDs isn’t useful? :-(
No sympathy from me. Years spent living on credit. How many of these perpetual students are simply avoiding working for a living? If they are not smart enough to accept the fact that their loans will have to be paid, like credit cards they cannot afford, then they do not belong in higher learning institutions. Complicit in all of this is the willingness and complicity of lending institutions and govt to facilitate this exploitation of the education system in America. Taxpayers pick up the unpaid tab for these loans and have every right to protest this unasked for burden.
Was listening to Dave Ramsey once. A married couple had jointly racked up $400,000 in college loans.
The “Underemployment Rate” [~11% to ~73%] is the often sad reality of the college graduate labor market:
https://www.newyorkfed.org/research/college-labor-market/college-labor-market_compare-majors.html
I majored in BusAd/concentration in accounting. Then got my master’s in BusAd. Not because I loved accounting, but because I knew it would open doors and impress potential hiring managers. And it did. I wound up in marketing but they were all impressed with my major. And I paid cash for my bachelor’s and got my masters for free through the company I worked for.
“Was listening to Dave Ramsey once. A married couple had jointly racked up $400,000 in college loans.”
Forgot to add -— degrees in English.
The New York Fed Table can be sorted by say clicking on Underemployment Rate.
really...? what was your salary for the past fecal year...?
I was always in arears . . .
Exactly:
It does really depends on WHAT you major in.
Students would be smart to at least investigate online degrees. Find an online school regionally accredited. Not Nationally accredited. Then go to website for the accreditation agency and see what other colleges and universities they accredit. You may be surprised. If online is through a major University you will still pay out the back side.
Stupid is, as stupid does!
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