Emily Bazelon wonders in Slate whether graduate school now costs more than it is worth even with all of the ways for consolidating college-loans:
More anxious are the twentysomethings with professional degrees that were supposed to help them find work but aren’t. Gordon, who is 29, has an undergraduate degree in computer engineering from Boston University, three years in IT, and an MBA and a master’s in information systems… But after a year and a half, he lost the job he got after graduation. He has $60,000 in student loans even though he had full scholarships for both undergrad and grad school (living expenses)…
“Suddenly, it seems to me that there is a real possibility that I, like tens of thousands of others, am holding onto a degree that is actually underwater. Look at student loans, the opportunity cost of taking two (business) or four (law) or eight (medicine) years off of your working life, add in a horde of other people with the same qualifications as you who are competing for a handful of available jobs and it’s easy to see just how much the job market in these professions looks like a bubble that is about to burst.”
I also heard from law school graduates with $200,000 in debt who wonder what they were thinking as firms downsize and implode. “It is a nightmare,” writes Benjamin, who got laid off a few weeks ago without a day’s notice. He has moved back in with his parents—until he leaves to go teach English in Korea…
Then there are the master’s degrees. I’ve wondered whether some master’s programs are a bit of a scam, moneywise, since students often have to pay for them. Tamara, who has a master’s in physician assistant studies, picked her degree when she saw it ranked high in a CNN poll of jobs for the future. She is working, but given her $200,000 debt, she says, “It is hard for me to say at this point whether I made the right decision to go to graduate school… I hope one day to look back on my decision to pursue graduate education with pride, but now the feeling that overwhelms me is regret.”
In the same boat: A guy with a master’s in international relations is working at a supermarket and just went on Medicaid…
As someone who has taken out a lot of student loans for his undergraduate studies in journalism and his M.B.A., I also have the same fears and feelings. Throughout my life, parents, teachers, professors, and the media constantly repeated the same mantra to everyone my age: “If you go to college and work hard, you will have a comfortable life.”
But there was something they did not realize. Everyone my age ended up receiving a bachelor’s degree, so they became useless (or, in other words, they resembled a high-school diploma). So we took out even more student loans to get a master’s degree to stand out from the crowd. Still, the graduate degrees are also becoming increasingly useless as more people get them.
So, in a nutshell: We are now consumed by debt after pursuing degrees that are barely helping at all. Many people my age see plumbers, mechanics, and other blue-collar laborers making $50 or $60 per hour without ever going to college and amassing tens of thousands (or more) of dollars of debt. Perhaps they were the truly smart ones.
These worries come as more and more college students today are charging the skyrocketing cost of tuition to credit cards:
Sallie Mae’s research suggests that more students are paying for educational expenses such as books and school supplies with credit cards. And they’re doing so more often: In 2008, students charged an average of $2,200 in educational expenses to cards, up 134% from four years earlier.
These findings are unscientific because they’re based on a poll — separate from Sallie Mae’s analysis of credit bureau data — of 292 private-loan applicants. Nevertheless, the results mirror those of other industry surveys.
“The message is clear,” says Edmund Mierzwinski, consumer program director for the U.S. Public Interest Research Group. “Students are carrying more debt on credit cards, and more students are paying for education on credit cards.”
Since more banks are offering fewer and fewer private student loans as a result of the credit crunch (and federal government assistance comes with limits), this not surprising. However, I have to wonder something: As a result of recent changes to bankruptcy laws (enacted, it is worth noting, when the Republicans controlled Congress and the White House), student loan debt is no longer dischargeable — but credit card debt can be erased. I would not be surprised if more than a few students are charging as much as they can to their credit cards while planning to declare bankruptcy after graduation.
Meanwhile, the Obama administration is planning to increase federal government aid directly given to students rather than subsidize student loans given by banks. I wish the White House the best of success.