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 viewed it as cheap money for my kids. I paid off the loans with money I didn’t payout while they were in school.
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.
“It is unwise to make education too cheap. If everything is provided freely, there is a tendency to put no value on anything. Education must always have a certain price on it; even as the very process of learning itself must always require individual effort and initiative.”
Address, Centennial Celebration Banquet of the National Education Association, Washington, DC, 4/4/57
https://www.eisenhowerlibrary.gov/eisenhowers/quotes
I guess they think it’s free money.
The predatory part is not the lender but the educational institution itself by over-selling the value of the future diploma/degree without an eye toward the ability to repay the loan. In addition, these loans are the financial lifeblood of the institutions that allow them to run up tuition rates, fees, room/board, etc. Without this cash infusion, the institutions would have to find ways to keep costs in line and stop gold-plating every aspect of their offerings. This is also why most baccalaureate programs have class hour requirements in excess of the typical load taken per semester to allow a 4-year graduation plan.
Here’s how they work: You borrow it, you have to pay it back.
Poor poor students. It is only fair the kid who did a four year apprenticeship as an electrician making 75k a year pays off the student who racked up 150k in loan debt “finding herself” in gender studies classes.
All I know is my late father, a dirt poor kid from the Bronx, went to Columbia and received an MBA from Wharton in the 1950s without incurring a penny of debt or receiving any need-based financial aid. Tuition at those esteemed institutions was approximately $500 per semester.
