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Started By
Message
What do you choose: 5% for 20 years of your future income or student loan repayment?
Posted on 8/19/21 at 12:00 pm
Posted on 8/19/21 at 12:00 pm
I was talking to a family member who is starting college whose tuition cost will be about $80,000 over four years.
Right now she says she wants student debt and will repay it when she makes millions.
I tried to explain to her that if there were a program that allowed people to sign off on garnishments of 5% for 20 years, then the break even with no interest is $1,600,000 in earnings…or she would need to make $80k annually for 20 years.
I can understand an 18-year-old Still having dreams of being the next Zuckerberg. But I was surprised that her mother agreed with her.
I Informed them that the average earnings of working college graduates both old and young is $66,000 a year.
So while the individual might be right in not wanting 5% garnished, Society in general should opt for the 5% garnishment.
If you only make $24,000 a year as a barista after your degree, you’re not saddled with paying student debt you can’t afford and is “progressively” proportional to your actual earnings.
How many of you went to college for some mid-level manager dead end middle class life, and see some military or cop retire at 40, and thought “Damn I should’ve done that”?
All these young kids think they’re going to be Uber successful and we know that 99% of them will not. Shouldnyoung kids be saddled with debt or should educational institution’s compensation be tied to actual earnings?
Right now she says she wants student debt and will repay it when she makes millions.
I tried to explain to her that if there were a program that allowed people to sign off on garnishments of 5% for 20 years, then the break even with no interest is $1,600,000 in earnings…or she would need to make $80k annually for 20 years.
I can understand an 18-year-old Still having dreams of being the next Zuckerberg. But I was surprised that her mother agreed with her.
I Informed them that the average earnings of working college graduates both old and young is $66,000 a year.
So while the individual might be right in not wanting 5% garnished, Society in general should opt for the 5% garnishment.
If you only make $24,000 a year as a barista after your degree, you’re not saddled with paying student debt you can’t afford and is “progressively” proportional to your actual earnings.
How many of you went to college for some mid-level manager dead end middle class life, and see some military or cop retire at 40, and thought “Damn I should’ve done that”?
All these young kids think they’re going to be Uber successful and we know that 99% of them will not. Shouldnyoung kids be saddled with debt or should educational institution’s compensation be tied to actual earnings?
This post was edited on 8/19/21 at 12:03 pm
13
Posted on 8/19/21 at 12:01 pm to Kujo
She should go to trade school
Posted on 8/19/21 at 12:02 pm to Kujo
What will she be studying?
Posted on 8/19/21 at 12:03 pm to Oilfieldbiology
Biology, she wants to be a doctor
Posted on 8/19/21 at 12:04 pm to Kujo
As a doctor, she’ll be fine. As a biologist, she’ll never pay them off
Posted on 8/19/21 at 12:06 pm to Kujo
quote:
I tried to explain to her that if there were a program that allowed people to sign off on garnishments of 5% for 20 years, then the break even with no interest is $1,600,000 in earnings…or she would need to make $80k annually for 20 years.
If you average 66k for 20 years you'd also have 66k garnished only leaving a 14k delta. I'd rather take my chances that I'm going to make more money over 20 years than 80k a year and pay it back. The "risk" of having to pay back the entire amount is less than the "risk" that the garnishment out paces the real amount of loans taken.
Posted on 8/19/21 at 12:14 pm to Mingo Was His NameO
80K is just the beginning of that debt if she does med school
Posted on 8/19/21 at 12:26 pm to Kujo
I don't like the idea of kids be straddled with debt, but the 2 biggest issues are students can receive large loans to everyone regardless of earning potential, and school costs are straddled with so much unnecessary bloat.
If schools would limit loan amounts based off of median earning potential by degree; you would see less people with useless degrees.
Also, if they did not have the federal government backings; they would not have such large administrative staffs w/ so many people making over 6 figures. Also, you would have as many teachers only having 2-3 classes a semester with grad assistants filling in and doing a lot of the busy work.
If schools would limit loan amounts based off of median earning potential by degree; you would see less people with useless degrees.
Also, if they did not have the federal government backings; they would not have such large administrative staffs w/ so many people making over 6 figures. Also, you would have as many teachers only having 2-3 classes a semester with grad assistants filling in and doing a lot of the busy work.
Posted on 8/19/21 at 12:30 pm to Kujo
quote:
Biology, she wants to be a doctor
Well, she will make millions (over 20 years) if she becomes a doctor. That changes things a lot. She’ll be in a lot more than $80k debt if she becomes a doctor, too.
This post was edited on 8/19/21 at 3:01 pm
Posted on 8/19/21 at 12:33 pm to go ta hell ole miss
quote:
she will make millions (over 20 years) if she becomes a doctor.
not likely at all, unless she invents/patents some breakthrough drug or artificial organ or something similar
quote:
She’ll be in a lot more than $80k debt if she becomes a doctor, too.
that's almost a given, and that figure is on the low side
Posted on 8/19/21 at 12:33 pm to Kujo
quote:That's high for a state school and low for a private. What kind of school is she attending?
$80,000 over four years.
Posted on 8/19/21 at 12:36 pm to Kujo
5% of my 2021 wages could have financed my entire education.
Posted on 8/19/21 at 12:38 pm to WildManGoose
It’s only $10,000/semester. Not THAT high for a state school.
Posted on 8/19/21 at 1:06 pm to Oilfieldbiology
quote:It's double the national average. Enough to question if she's going out-of-state or private + scholarships.
Not THAT high for a state school.
Posted on 8/19/21 at 1:12 pm to Oilfieldbiology
quote:
As a biologist, she’ll never pay them off
Exactly, is she’s a Dr making $3-400k per year upset she’s paying 15-20k/year for her education….boo boo, she’s still bringing in more than enough to buy Kleenex.
If she ends up not getting into medical school or life changes make her want to peruse a life as a biology teacher making 40k/year…she’s paying $166/month instead of $333/month
Posted on 8/19/21 at 1:13 pm to Kujo
Why is she paying $20k a year? She must be smart enough to get some scholarships?
Posted on 8/19/21 at 1:15 pm to WildManGoose
quote:
It's double the national average. Enough to question if she's going out-of-state or private + scholarships
Is it? When you tack on books and all of these school’s ambiguous “fees,” it’s about right.
For 30 hours a year, my tuition was around $17,000 - and that’s in-state, public school.
Posted on 8/19/21 at 1:15 pm to The Third Leg
quote:
5% of my 2021 wages could have financed my entire education.
I only had to pay for my last semester of grad school. I remember cutting a check for $2,500 and thinking I was being ripped off. All of the gracious lottery ticket buying people of color financed my education. Thanks y'all!
Posted on 8/19/21 at 1:16 pm to WildManGoose
I’m assuming she’s talking about not just tuition but also fees and boarding and other stuff.
Posted on 8/19/21 at 1:17 pm to Kujo
quote:
How many of you went to college for some mid-level manager dead end middle class life, and see some military or cop retire at 40, and thought “Damn I should’ve done that”?
I've never met anyone who retired at 40.
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