it's a little nuts - the easier it is to get'em, the more tuition rises, the more you need, the more the fed. scrambles to make available...

can't wait to jump back in!

On the one hand, something is seriously messed up with a society that thinks nothing of sending its youth out into the world with crushing debt before even earning their first dollar. On the other hand, it sounds like the guy who's the subject of this article made some bad choices and just wants to be let off the hook.

Whoa now ... higher education and student debt are, in large measure, a matter of personal choice.

I know many students who make very wise choices about where they go to school and exercise considerable spending restraint while in school ... quite a few hold part-time jobs during college ... the vast majority of these emerge from college with very little, if any, student debt -- and I'm not taking about trust fund babies.

I think 4arch was pointing to the larger issue of how this country views education...

I cant read the article, anybody want to post it?

.. as a tool of conformity, and like an industrial complex

Two words: Junior College.

i used to work for West a telemarketing company that gives out loans
and i used to feel so bad when people would call crying asking if they can lower the insanely high interest rate or give the money back, and everytime i had to say no, i still feel bad about it, people were in debt from 70,000 to 150,000, it was hard working there.


But i did learn that once these companies trap you with their meat hooks, your done.

o watch out for...

Astrive student loans
Think Financial Student loans

there were two or three more but i cant remember there names

That argument might fly if students were not still minors and/or dependents at the time they typically apply for and choose a college (and I do agree with it for graduate education). High schools aren't educating kids about personal finance and most parents of high school age kids didn't come of age at a time when five and six figure student loan tabs were the norm.

I do think a lot of parents have a role to play in insisting on "only the best" for their kid and the kids do get a little too easily wrapped up in that mentality as well, but there's also an irresponsibility to schools/loan companies cutting checks for tens of thousands a year to kids they know don't have a clue how hard it will be to pay that money back.

so ether - perhaps you can enlighten us about "how this country views education" and the broader relationship of students willingly taking on an unwise, and unsustainable, amount of student debt?

Philarct - "once these companies trap you with their meat hooks" -- whatever happened to the notion of "look before you leap"? nobody's forcing anybody to sign up for these loans.

I really don't mean to sound unsymphathetic, but most of these sob-stories sound like self-inflicted wounds to me.

..and, often, to kids who they know are in majors that will never lead to careers with high enough average salaries to realistically handle the debt load.

it is tough when kids don't have people in their lives that can guide them and look out for them... but on the other hand, its the best debt you'll ever have, and you'll earn at least 5K more a year just because you have the degree.

let's see.. no child left behind is a terrible piece of legislation. and how about schools having to eliminate programs like art, music and pe because they don't have the proper funding, all the while the government is spending hundreds of million of dollars a day on a "war" in the middle east.

"...because he had no way to avoid the obligation." Duh.

Too bad, so sad. Stop buying fancy jeans, new cars with all the options and going out for dinner every night. People need to grow up and get real.

Double Duh.

ether ... we're talking higher education here ... not K-12.

While I tend to agree with what I assume your position to be below the college level ...

a) nobody is forced to attend a college they cannot afford; and

b) as several above have noted already, much of what students are financing these days are "life style choices" - not necessary college expenses.

grow a pair and default en mas

Anyone else struck by the irony of the student loan ads above this discussion?

I think what 4arch refers to is that when I went to school pre-Reagan, I got federal student loans with a 4%-7% interest rate that I was able to pay off in ten years on my lousy intern's salary. Private lenders have jumped into the void left by the end of those programs, and they do not have the same interest in my becoming a productive citizen as the gov't used to.

when my father started uni he was working full-time because he had two kids. mum was working full time too (mum was 20, dad was about 22 at the time!). anyway, they had bought a house in the cheap part of town cuz thats what they could afford.

except the canadian govt thought his education was worth some investment, and they gave him a student loan and bursary that, because he never quit his job ( ! ) he didn't need.

so he bought a house in the suburbs with the money and rented it out. when he graduated the govt paid half his debt and he easily paid the rest cuz he then got a good govt job as a social worker. he worked like hell the rest of his life and when he died a few years back was running about 23 hospitals for the canadian govt (when he turned 40 he sold everything he owned to finance a degree in hospital admin - how is THAT for a role model?).

when it came time for me to go to uni loans were not so easy anymore, but i was married and independent so i got as much as they were ever going to give. it wasn't quite enough and private lenders never came up...so i quit school and worked for 3 years until i had enough to pay for the rest of undergrad archi-school. no regrets. no debt and no problems with the archi-school, which let me take the time off, thankfully.

for grad school i worked for 3 more years as architect in japan. insane overtime meant i earned enough to pay for grad school in cash.

for phd i got a scholarship, and now i am finishing school, in my late 30's, without debt, an architect, and an office to run....

the years of work to pay for school made the process slow, and i kind of regret that, but in general i think when the above posters talk about loans being a personal choice they are talking about the kind of choices i made and my father made before me.

no one thinks the choices are easy.

that how it looks from my standpoint anyway.

the whole "personal sacrifice" argument is bunk and a symptom that our society cares more about the me than the we. take a look at the rise of student loan debt over the last fifty (you don't have to look far; check out the graph in the article.) it has grown exponentially in the last 10-20 years. why? basically greed in the credit industry. this sort of debt was not an option for our parents. to put these financial decisions on eighteen year olds who up to that point in their lives have been completely divorced from personal economics and in many cases do not even know what their profession will be is garbage. our society is fundamentally broken right now. this is only another symptom.

It is all the failure of our education system, starting from elementary school.

The fact that I halfway through college with not one mention of finances or the economy is mind boggling. Easy to see why the wealthy remain wealthy, etc.

It is all education. Which brings us to architecture - ridiculous to need 2 degrees (for most of us) for a low-medium paying job.



Overall, I look at education as a continual spiral - the brightest in business will look for better paying jobs than teaching at a uni, and certainly a high school. Arch is the same way - limit the theory and keep it more in reality and you wipe out a ton of teaching jobs - they need to continually create hype to keep the cycle going.

jafidler is correct - it is all part of the nasty cycle of naive debt.

There's a lot of media reporting out there that points to the twin problems of slashed government spending on student aid programs and 17%-20% yearly rises in tuition (INCLUDING STATE SCHOOLS) creating a very real gap in funding for the majority of students, into which void have stepped highly predatory private loan companies who know they have a trapped audience and can therefore basically demand whatever they want.

The big problem with student loans comes NOT when you are APPLYING for school -- freshman year aid grants are typically the highest a student will get, making the colleges seem very affordable. However the problem really hits in the last 1-2 years of college, when tuition has risen above what it was when the student's freshman year financial aid package was awarded, and yet the student's grant money is not re-adjusted to meet the increased need. Almost every deep undergraduate debt I know of (and the majority of people my age that I meet have at least $20k debt, no matter what school they went to) comes from those last 2 years.

In my case, I can tell you that my financial aid package covered most of my first 4 years of schooling. But, wait a minute -- my degree required 5 years of schooling! And they won't extend my package! And I'm no longer able to be claimed a dependent of my parents'! Oh shit, time for a private loan.

The worst part about these upperclassmen loans is that at that point you will agree to whatever terms are handed to you because you literally have 2 weeks to make a decision, sign paperwork, and get money flowing to your school or you are not able to take classes. If you don't take classes that last year, you don't get a degree, and you have to start repaying the loans but you have no degree-required high-paying job with which to pay them.

There is definitely a lot of root problems combining here, and like much of the American debt problem, you can't point to just one factor. In many cases the students who take on the debt are told by their parents "I paid my student loans off 3 years into working... it wasn't a problem for me" --not realizing that the landscape of American education has changed dramatically since they were in college. Architecture school compounds the problem as it is a specialized program not offered in many places. When I was looking at schools I was lucky that there was one single BArch program in my state; however, because we were middle-class and it was a state school, I was offered so little aid there that the costs were comparable to the out-of-state private schools I had also applied to (and the costs of living in that state school area were higher). So at what point are you able to say "no"? It's a very difficult problem.

Added to this is the fact that many people are first-time college applicants from their families (only one other person in my extended family has gone to college). That's not a lot of experience to draw from when you're facing all these tough decisions.

personal responsibility, baby ... it's all about personal responsibility.

you can bitch and moan all you want about the education system and "the man" taking advantage of poor, innocent students. but, at the end of the day, it was the individual who made the decision to incur the debt and accept the money.

18 year olds want - more or less demand - certain rights and freedoms in our society - I'm all for that. But, along with those rights and freedoms come the responsibility to think about your own future, make wise choices and live up to your obligations. if you want to be independent and on your own and act like an adult, you can't blame your parents and you can't blame the education system ... you can't have it both ways.

claiming innocence and ignorance about debt is about the most ridiculous argument I've heard yet ... it's not like the information's not out there for anyone to read and learn from. I suspect these decisions are driven often by a "something for nothing" mentality. And, I suspect that's why distant posted this article in the first place ... as a warning, or maybe an object lesson, to the young and naive among us.

you borrow the money, they're gonna expect you to pay it back!

I wanted to point out in my first paragraph that these aid decreases and tuition increases have been since the 90s, so they are really very recent and hard to understand if you were lucky enough to go to college before then.




***
On another note: I hold 2 very unfortunate private students loans that I have been working very very hard to pay off since graduation (sometimes working 2 jobs when I can). I noticed recently that my principal payments were not being applied to the loan and called up the lending agency. The guy I spoke to looked up my information and said, and I quote, "Ohhhh... yeah... wow. You know honestly, these are some of the worst loans out there. I mean I shouldn't really say this but they shouldn't even be offered, they're pretty awful. Umm... you aren't allowed to pay your principal until you've made 5 years of consecutive interest-only payments... and you still have 2.5 years to go... Yeah these loans are really the worst out there." (The loans have a variable interest rate currently set at around 9%, comparable to a credit card.)

The thing that gets me about this?

These loans were promoted BY MY SCHOOL and offered in PARTNERSHIP with them. I got them to cover my last 2 years in school, due to the financial aid shortfall described above, when I literally could not continue my degree without coming up with thousands of dollars of instant cash. I went to my financial aid office AT MY SCHOOL and sat down with them and they said "we offer this loan here, in partnership with X student loan agency, and that's your best option. otherwise you can go out and get a bank loan." Being that I was in another state, away from my parents, my bank, etcetera, and this is what they recommended, I went with it. It did not occur to me what an onerous debt this would become. I had no experience with paying off comparable debt and neither did my parents. It was that or drop out of school when I'd already finished 3 years. And this was what my own university recommended, so...

So yeah. I'm not an idiot and I'm actually quite good with personal finance. And I still got trapped. There's a lot of blame for each of the actors in these situations, and it's not 100% the students' fault.

Ok file, you try looking for an affordable architecture education degree on a middle-class family income and get back to us. I look forward to hearing your results!

Here, I'll give you some stats to start with:

Let's pick the state of, say, California (most amount of state school options)

Now say you want to go with the fastest / cheapest possible route to practicing Architect: BArch or 4yr Arch undergrad with 2 year Arch Masters (not sure which would be cheaper)

Now say your model parents' combined family income is... let's say $90k.

Let us know what you find.

SarahH : go to bugmenot.com for passwords to let you in to read the article.

manta - I understand your touchiness on this subject. If I offended you, I apologize. But, I think you perhaps misunderstand my post.

I am not saying that debt may not be necessary, or even desirable in some cases. I have children in college and I know full well the economic challenges associated with higher education today. One of my children found it necessary to take out loans to finish his degree.

However, what I'm suggesting is that too many students fail to take the time to understand what's actually involved in the loans they're taking out and too many haven't thought through the implications of the amounts they're chosing to borrow. Too many also resist looking for alternatives to debt -- like a lower cost college or part-time work.

Based on observations from both my personal and professional life, in my estimation too many students take on way too much debt -- often to cover "life style" expenditures, or other expenses relatively unrelated to their education. That's their choice, but it's an expensive choice that later must be funded. And, there's a reality to the repayment ... as the article suggests, these are debts that cannot be escaped.

I don't disagree but even for students who've thought through those implications it can be hard to really wrap their heads around what their starting salary might be, how much of it will be taken in taxes, and how much what's left over will actually buy them. While there is a lot of information out there about all of that, much of it can be conflicting, inaccurate, and misleading. It's really hard to get more than a "ballpark" before you start actually earning a paycheck and paying bills - by which point it's too late to go back and fix your previous mistakes.

Student loan repayment should start with the first dispersement.
The reality of repayment needs to be there to help remind the student of what they are getting themselves into.

Signing away 80K is easy when you don't have to pay it back today.

how can someone understand a loan repayment who does not even know what career they will be entering. (the vast majority of college freshman do not know how they will be earning a living four years from entering school, let alone how much they can expect to earn.) based on this complete ignorance, how are they to make a decision about how much debt to take on?

anticipating your answer, file, "well, then, they should be going to a community college 'to figure things out.'" well, many of these students academically are far superior to the resources provided at a community college. someone with a brain to do more should not be wasting their time in community college. have you ever heard of a something called a liberal arts education? i know it's derided by head in the sand types, but it's really a wonderful way for those with a broader outlook to educate themselves about the world and form the personal and professional perspective to guide the individual through the rest of his or her life. your perspective, file, attaches so much weight to the finances of education that it completely erodes the larger ideals of education that in my view form the backbone of an enlightened society.

what can be done to finance this type of education? first, the schools have to understand what they have to offer and at what cost to the student. fundementally, how can schools finance themselves not to put such a burden on the student? can education be costs be restructured to be financed out of research dollars? can public/private partnerships be made to reduce costs and increase school revenue? second, government needs to make education of its people a priority. i know the tax cut junkies will wince at this, but honestly, i don't think those people give a rip about an educated society. they only care about their pocketbooks. third, if there are no other options but to take a student loan, students need to be well educated about their debt. as it stands, vast amounts of money are doled out without the shortest explanation of what that debt means. both students and schools need to take a greater responsibility for debt education.

and there are many of us who went to school without the benefit of a parent who also understood these challenges and made sure we were making wise decisions. if you don't have the support, background knowledge, or resources to help navigate the complexities of financing your education, you are going to end up making some stupid mistakes.

And yet no one dare challenge the masters in architecture or profesional degree inflation? If you want to cry about the costs - cry about the increased time required to be in school.

Take a long honest look at your own education and ask yourself could this have been done in 4years? Was it worth 6 years? Dont forget the oppurtunity cost of not starting your career at 22 or 23 but delaying it until 26 or 7. Then factor in the personal life development like issues like 30 something before your somewhat financialy stable.

i think possibly that the future will see fewer students going to uni in North america

which is sad and a waste of brain power. probably gonna be worse in usa than canada though.

i think i was very lucky my da got me a job working 20 hours a week when i turned 14. then told me to buy my own stuff from then on. when i left home at 17 i wasn't a complete moron with the money. on other hand i didn't have a weekend off for my entire high school years, which was not conducive to social life.

maybe amerika can take page from japanese notebook. here the better the school the cheaper the tuition. it is meritocracy here. if you can get into the #1 ranked school in japan by passing entrance exam you pay 1/3rd tuition of the less academically strong who go to private school elsewhere. parents here pray i think for smart children. but it means the govt only pays for motivated students, which is not bad if tax money to education bothered you...

fascinating example of the japanese educational system, jump. and regarding ep's comment on length of schooling, i've always been more a fan of a 5 year b-arch than a 4, +2. the simple reason is the 5 year program costs less. if you want to go on and pursue a masters then it is merely for personal growth or some other alternative motivation other than needing it purely for professional accreditation.

I do agree on the cost of the length of schooling -- it's one of the reasons I adamantly oppose the asinine desire to dissolve the BArch. (One of many reasons...)

My point, file, is that a lot of people don't realize that many of these loans do not come at the outset of education -- when one is more readily able to weigh costs and alternate options -- but during one's course of study, when one has already partially committed to the degree, already committed money, and is in the position of either dropping out and losing the money already sunk without the earning power of a degree or having to take out MORE money for a degree that is already straining at the budget. Not an enviable position but one that more and more students are finding themselves in, due to:

a) 17-20% jumps in tuition, while they are in school and
b) dramatic cuts in student aid grants.

This has been well-documented in the media so it's worth looking up. For a period of about the last 12 years or so, many students have been caught in the crosshairs here.

You can think through your repayment obligation all you want, but when you're 3 years in with 2 to go, can't easily transfer, and you suddenly find yourself without enough money to continue paying for classes, you take what you can get and at that point you don't have the luxury of alternate choices. You grin and bear it and say, dammit, this is going to be a bitch later, but it's either this or drop out.

Also, I agree with most who say that in a perfect world, yes, everyone should be 100% aware of how the debt is going to impact them later in life; but in reality, a 20yr old kid with little real world experience is simply not going to be able to comprehend the enormity of their debt -- ESPECIALLY when everyone else around them is financing uni in the same manner, with the same loans.

On the loan I got -- again, promoted specifically by my university to meet the shortfall created by its tuition raise -- apparently there must have been some fine print in the promissory note regarding the 5 years of interest-only payments; neither I nor my mother, who reviewed the papers with me, remember anything about this. We both remember that I would be supposedly allowed to pre-pay my principal ... without anyone making a point about how that was only after 5 years. I actually have solicited copies of this information from my lessor to comb through it because we are so convinced we had never heard of this clause. We both combed through everything as best we could but when you have literally 2 weeks to cough up dough before classes start it's a little hard to concentrate on these things.

This is what is called a predatory lending practice... in that the lessor knows that the lessee is able or in a position to completely comprehend the loan terms, and yet couches them or hides them anyway, without being clear about the terms. It happens, and you can get suckered by it, and there are regulations in place to prevent it for a reason.

jump, to some extent that is the system in America -- or at least was, until the overall general cost of tuition vastly outstripped the growth of aid packages. But in the general sense of a meritocracy, it is the case that many aid packages are predicated upon merit.

The other thing I would say is that the Japanese system requires a 100% equitable primary education system, across the board; and we will never reach that in America. You can say that "merit" is purely intrinsic to a students' hard work and talent but that only applies in the context of a 100% equal playing field. Here in America where many high schools still don't offer ANY advanced college prep (AP) courses, while a school across town in the rich kid area will offer 20-30 AP classes, it's difficult to justify giving the rich kid more money because he scores higher on a test that the poor kid's school just didn't prepare him for.

How does Japan deal with this issue?

i am not sure. ill let you know when my kids go to high school.

from what i understand though you have to pass an entrance exam to get into junior high and then high school. so if you aren't on the ball by the time you are 12 you are fucked. cuz the schools that are easy enough to get into are not going to prepare the students for the best universities and you will never get in.

in general kids here go to school on their parents money, not with loans. it seems to work somehow. parents start saving when the kids are born basically.

as far as socio-economic segregation, that doesn't really happen so much in japan. rich and poor more or less live side by side - so the schools are relatively standardised (and from what i can see are pretty high quality), with differences based not on where students live but instead on how bright they are. no one really just goes to the school nearest to them. they map out their education with their parents when still kids and travel round the city as required - but if they aren't motivated when young it can be pretty hard to change course later on. thats a lot of pressure for a teenager i think.

i am one that has gotten trapped into student loans, and honestly its my own fault. i am in my second year of grad school in a three year program at a private school in a very expensive city.

i took out so many loans in my first year that when i went to sign the papers for this year i am getting seriously stressed out. and i dont know what to do. do i drop out? and then all that money my first year is just a waste? i know i wont be able to afford my loans if i continue at this rate. any suggestions from those wiser?

the only thing i was thinking as a possibility: switching to real estate development

yup, like many, you'll be forced to evaluate which direction and the priorities your career offers.

RE Dev is a viable option. From those I know in arch and re dev, the jobs (as an arch) are no different and you get paid a ton more.

That's an interesting statement, trace. Can you explain more?

What makes me angriest in this article is what happens when people default and get hit with penalties: $23,000 in loans balloons to $63,000? $38K balloons to over $100K? I mean I understand penalties but if I can't pay back my loan today how in hell am i going to be able to pay back three times as much tomorrow?

It's like the companies are setting you up for failure. Yes, if I sign something I have to pay it back, no argument. But paralyzing people with tripled amounts is asinine.

I'm still paying off student loans myself, and I've been out of school for 13 years. I chose to consolidate and make smaller payments over a long, long time so I could afford to feed myself and not live with my parents for the first five years out of school. It's a long slow process, but I'm satisfied with that decision.

Also, antisthenes, I can't let this phrase of yours go by without a comment: grow a pair and default en mas So you're implying that a real man (with a pair) would not repay his agreed upon debts? That's not being a man, that's being a baby.

my blood is starting to boil so i wont say what i was going to say and instead eat some ice cream and simul watch the bears and obama

"It's like the companies are setting you up for failure. Yes, if I sign something I have to pay it back, no argument. But paralyzing people with tripled amounts is asinine."

It's how the collateralization of debt under Bush and McCain has made it in the banks interest to keep you in debt for the rest of your life. It's the 21st century version of the mining camp. While McCain is filling the airwaves with BS about how Barack Obama is a celebrity, his wife's $100 million dollar fortune is invested partially in equities that help make two societies, on rich with 10 houses and one in debt or the rest of their lives.

Today, the lenders at large banks and credit card companies make billions in fees. It's the said truth. It operates like a huge tax on the economy and there's a reckoning coming as these policies will bankrupt the country.

It's true the institutions that make student loans are an easy target - but they can't make these loans without the willful participation of students -- just like stupid flexible-rate mortgages can't be made without the participation of the homeowner.

I think the whole point - and whole value - of this thread is to reinforce the idea of "look before you leap" - if you don't fully understand the document you're aboit to sign, get some help from somebody who cares about your interests.

Buyer beware! You have to guard your own interests - that's part of becoming an adult.

Its sick how tuitions and fees have gone up.
Its the biggest bubble still unburst of the last few decades.
Dont graduate w a 6 figure debt from architecture school.
Its not worth it.

!!!! shit, ether, that's exactly what I'm talking about!

The approach by the attorney general’s office is similar to the one it used when investigating questionable ties between student loan companies and college financial aid offices beginning early in 2007.

...

For example, some Goal advertisements gave misleading information about the benefits of private student loans, which are not guaranteed by the federal government, over federal student loans. In most cases, federal loans carry better terms, with fixed rates, for example.

The whole "buyer, beware" argument is predicated upon the assumption that buyers are not being lied to. Unfortunately we've seen over and over again specifically in the loan industry that this is too often not the case.

There's an interesting article in today's New York Times that is germane to this thread: Counseling on Student Loans Now May Ease Pain Later

NOTE: you may have to register with the NYT site in order to read the article on-line.