The Cost Of Student Debt

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This is the indicator from planet money. I'm Stacey Vanek Smith. Oh school days the books, the binders the new pens the crippling debt taken on almost without a thought student at is. In fact, one of the biggest economic issues for our country, and for a lot of people personally, this is according to Jill slash jer, certified financial planner CBS business analyst and author of the new book, the dumb, things smart people do with their money. There's one and a half trillion dollars of outstanding student loan debt right now that is like I can't even probably just ADP. Yeah. And so by the way, trillion here's a little thing to think about whenever you hear the number trillion just think twelve t twelve twelve zero after that one trillion trillion one and twelve zero that's a lot of money. That's a lot of money. A lot of frigging money today on the show student debt when you should take it on how much you should take on. And what to do if you have not saved enough to send your kid to the school? They. You want to attend? Support for this podcast and the following message. Come from Amazon web services, helping millions of builders from startups to enterprises governments transform their industries with secure AI, ready cloud services. Learn more at AWS how dot com slash podcast. Support. Also comes from NPR sponsor Lincoln jobs when it's time to hire for your small business. You want to find the right person for the job Lincoln jobs can help learn more at Lincoln dot com slash indicator. Terms and conditions apply. Student at is the thing that has come up even to extremes that people say like, you shouldn't go to college at all. Or if you go you should major in like one of three things or something in order to be able to make enough money to justify having spent four years in this way. I feel like student at is probably student at an home debt or probably the two questions that you must steal. Absolutely student loan debt is this. Very pernicious problem that I see I'm not going to sell the education crisis in the United States. But here's the problem that I see on the ground level. And that is parents are now recognizing the kids even though if they don't really need a college degree because a lot of the jobs are getting probably don't require a college degree in joint on my competent knowledge every day. And as do I with my international relations and English. So that's not the case in the employment landscape because employers do want a college degree, you can see jobs that used to be filled by high school graduates and other like, well, I don't care I might as well get someone with a college degree if I could I should. So now college degree is very important. And we know there's a ton of research that shows that people who have college degrees make more money over their careers than those who don't. So there's that number that kind of proves it. And so parents say I must make sure my kids are educated. In the end. It is true. The kids are really borrowing the lion share of the money. However, the fastest growing segment of student loan borrowers are people over the age of sixty. Okay. Now look at the face. Let me just do this this theater of the mind listeners. Stacey took a step back took a breath raised her eyebrows. And said Digital's VS may on that. Did she make that up? Well, I know you would it make something up. So I'm trying to think is this like a continuing education thing or people going to call an airy school. I have the answer. It is a little bit of that. Okay. But mostly that parents and grandparents are co-signing their loans for their kids because borrowing rules changed and you have to you can only get so much in your name as a young person. And then you have to have someone who cosigns or gets a plus low. Now, this makes a lot of sense. Yeah. Because what we're seeing is that parents are going into debt to put their kids through school. So we have sort of these weird dual problems one is that kids themselves requiring that debt, and we have a millennial generation that Nayef. You'll like I can't go find a better job because I like this one is fine. It's okay. And I can pay my student loans. And so we are seeing this generation that's very uncertain financially. They're stuck in jobs that are okay in some respects. But maybe they could they might have chosen different paths. If they weren't saddled with that debt, and the whole point I feel like often of going of getting an education is to feel like you are creating opportunity and freedom for yourself. And it's also people are thinking if I get the degree it'll equate to more money, and it may not be the case, you really have to be careful from the parents point of view, not only is it that your burden going into your sixties. But I hear from a lot of parents who say, well, I dipped into my 4._0._1._K to pay for my kids education. Right borrowed from my retirement account through my municipality to do this. I pulled back because it was helping my kid out with education suite, isn't it? And now, I'm so sad. Literally, get short of your actually have your hand on your idea. I because I I hear about these so often. So when my friend calls me up and says. My kid is going to XYZ college up in Vermont. And I said, wait a minute. That's a private school. How are you going to afford that? And she's like, but she really wants to go out of state, right? That's not the answer. The answer is your kidneys to get educated. You have only so much money to put towards that education. So the state school would have been fine, and you could have actually shouldered that burden. So if you go from that premise, then how do we solve this problem? Okay. We say we agree. Most people should go get a college degree. But most people shouldn't go into debt up to their eyeballs to attain the degree. What do we have to do as a family? We gotta talk. The talk is not the day after the college acceptances come in you then say to your kid. Oh, Stacey Honey. Sorry. You can't go Ryan afford. And you can't do that. I'm short of breath. That's a terrible thing to have to save your kids terrible. But you know, what is reasonable is that when? The kids in ninth grade to say, we totally love the idea you're going to go to college is his fantastic. And here's here's what we think we believe that we can support this as a contribution to college. That's it. Now, if you're really smart as a family, we are going to approach this and say, if you can get into a really awesome awesome. Awesome school. Hopefully that school has a big endowment and you'll get money. But if you can't just so, you know, here is what we can do to help you this is it does that feel like putting too much on a really young person. Yes, unfortunately, I'm sorry to say it's like saying, Honey, you gotta put a condom on when you have sex feels like a lot to say somebody, and you know, what I mean still recovering from that. Right. There. How are we talking about a conduct? What happened because we have to have harder conversations, and I point out in the book, and especially in this chapter a lot of the people that I talked to people who've them sells went to college, and whose parents could afford it, and they feel so bad about themselves that they cannot extend that same opportunity to their kids that weighs on them. Like crazy. We're kind of back to a period where the families taking care of everybody. Right. We're all in his scatter. If you screw up your own retirement. It's gonna fall on your kids. Anyway. Oh, that's interesting. And so would I think is the responsible way to discuss it is to really be clear. We hope we can help you out later. This is what we can afford. Now that I'm convinced that a college degree is worth it. If that means two years of community college and transferring to state school, that's fine. But if you're telling me that you're borrowing tens of thousands of dollars. And you're not going to get the privilege of saying I went to a pre MIR named school you may be shooting yourself in the foot. And so if you are a great Kotor, consumer computer scientist or you really you're going into a science field. And you think that that's going to give you a ninety thousand dollars a year starting salary, then sure you can get eight thousand dollars of student loan debt. But if you're an English equivalent to the first year of salaries, so go an art history. Major and I hope that could become DOE sent and I would making twenty eight thousand dollars a year best best case scenario than limit your borrowing. And if you are really considering a graduate degree, I cannot emphasize enough I've talked to a lot of people in graduate schools who say people are not being thoughtful about whether or not that degree is necessary. Just be careful. That's why it's nine care. Fata. It's not just always going to be a good now. Again, this is just be thoughtful. And look at where you stand. What am I going to gain? This episode of the indicator was produced by Constanza Gardo. Our editor is paddy Hirsch, our fact checker intern is willa Ruben and the indicator is a production of NPR. There's a subculture of people fascinated by prime members, you know, seven eleven thirteen seventeen. Nineteen wrongs go on. There is no fun. Biggest problem number and the hunt for the latest monster prime number can take years you end up with a twenty four million digit long numbers ideas and the power and beauty of math on the Ted radio hour from NPR.

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