There's an article today in the Wall Street Journal that to me, drives home a sad point for many in the college generation: You're going to be deep in debt. And without rising wages and a strong job market, debt is a stone that will drag many young people into years of taking whatever job will pay the debt servicing.
College costs have gone way up since I was in college ten years ago. I see these kids graduating with a B.A. degree in something with no particular demand (history, English, art, literature, etc., correct me if I'm wrong here) with $50,000, $100,000, $150,000 in debt and I just wonder, "WHAT are you thinking?"
I think part of the problem is the basic educational assumption of our time:
1. Middle class kids must go to college.
2. They should follow their dream (going to the best college they get into and majoring in their favorite subject, regardless of whether there is a market for it or not).
3. They can pay back the money later (without figuring out what it's going to cost them first because of course they are going to have a successful career).
This attitude, which is so pervasive that it's hard to even question it, may have been fine when college costs were reasonable and could be paid back in ten years, when incomes seemed to be rising, when peak oil was just a glimmer in Colin Campbell's eyes. But now I think it may be time to challenge this fundamental assumption.
It's not that I don't want kids to follow their dreams. Getting a job doing something you hate can be soul-sucking drudgery. On the other hand, being forced to take whatever job you can find because there is no demand for your skills and you owe $50,000 - 100,000 to a variety of government and private lenders, debts which can never be discharged, even in bankruptcy.... that's soul-sucking drudgery for twenty years. Drudgery that, with one late payment, can easily lead to a mountain of fees and rising interest rates and ultimately despair.
I just wish these kids had someone to educate them in basic financial literacy. Someone to tell them what one school vs. another is going to cost them. What kind of wages or salary they can expect when they get out. What their monthly payments are going to be when they graduate, and how that will relate to their salary. Maybe even (gasp!) the facts about peak oil. Just the basic facts. Then they can make an educated decision.
Surveys have shown for years that college graduates make more money. But what about junior college and public school vs. private school graduates? What's the difference in their salaries? What about the trade schools? What about the salary of a college graduate MINUS their debt payment - how does that compare? Some people may think junior college or trade schools or a public college are below them - but they should take another hard look at the financial consequences of their decisions.
Because the choices that kids make at 18, choices they make when they are still so young, hopeful, and naive, will still, in many cases, be following them at 28, 38 and even 48 years old. The choices they make at 18 can determine whether they can afford to buy a home, change jobs if they hate their first, go back to school, stay home with their kids. It may even determine whether their parents can retire at 62 or if they have to wait until 72.
So if you have a close relationship with a high school student, you may want to make sure they know basic financial information. Debt is no longer a matter that can be taken lightly, without serious discussion about the numbers, our assumptions, and the future. Debt incurred at 18 can affect the rest of the lives of the college generation, and they deserve to know the facts.