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Episode #56

How Much is a College Education Really Worth?

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Friday, May 17, 2013

student loan debt burden (thisisbossi/flickr)

This week on Money Talking, regular contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine weigh in on whether college is still worth the investment in this age of exorbitant tuition and skyrocketing debt.

As college seniors graduate this month, they're starting their careers in a sluggish labor market where salaries have stagnated and even finding a job can be difficult.  

As a result, some students and parents might be asking whether that college degree was really worth the cost. As higher education has gotten more expensive, total student debt has risen to more than a trillion dollars — second only to mortgage debt. The amount has nearly tripled since 2004.

Hosted by:

Charlie Herman

Produced by:

Daniel P. Tucker

Contributors:

Rana Foroohar and Joe Nocera

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Comments [6]

Scott from colorado

I was in auto sales for 12 years, when it went down so did i. I decided to go back to school, I have two degrees, one in business and one in information management, almost 70K in loans, and it is like my education does not even register with employers. I have four good years in IT a degree in IT, certificates, I get calls from employers wanting my to go to work for poor money.

Jul. 18 2013 10:28 PM
RUCB_Alum from Central New Jersey

College tuition is a symptom, not the disease.

The disease is that GDP grows faster than the average income. GDP has outpaced income growth (roughly analogous to consumer price levels) by two points plus for the last 50 years. The effect is that incomes doubled every 16 or 17 years, while the national income doubles every eleven years. How in a democratic republic does the pie grow faster than the slices? Ask those who establish monetary and tax policy how this can be. Destruction of the S&L industry? Anti-unionism? Wage depression caused by illegal immigration?

College tuitions have grown at the rate of the GDP growth, not incomes and as a result are far more 'expensive' than they used to be. Take my alma mater, for example. When I enrolled at Rutgers University, tuition was $585 per semester, payable in half-payments of $292.50. The minimum wage was $2.20/hr. Therefore, tuition was only 600 hrs of minimum wage labor. It was possible to work vacations and summers and actually 'pay as you go'.(I live in central Jersey and some of the WWII vet RU alumni I have spoken to relay that the cost of RU for the entire FOUR YEARS was $1,200 when they came back from the war.)

Today, full-time tuition and fees at RU for an in-state student is $13,073 which amounts to 1,800 hour of minimum wage labor before taxes. It is nearly impossible to work your way through as a full-time student.

We are told that Americans can no longer expect to have a single career throughout their work-lives. The only sane way to face that is a sound general education which permits mid-life career change without extensive re-education and re-training. Otherwise, we are dooming ourselves to extended unemployment cycles and dependency but saddling our graduates with the equivalent of a mortgage upon graduation is just a path to more folks doing more things 'just for the money'. Do we really want that?

May. 18 2013 09:49 AM
kate from New York

Unlimited federal money to pay with no restrictions? No qualifications. No credit checks. Its small wonder why tuition costs keep going up. Why not charge more?

On a personal level I have loan debt from law school north of near 100k. I will be paying my loans back for the next 35-40 years and I'm 28. I will die with student loan debt. Not because of the principle amount, but because of the continued fees and interest rates north of 6-8%. Then, of course, there are processing fees, servicing fees, and origination fees.

Compound that with a bad economy you have a generation of people who will be in debt their entire lives.

May. 17 2013 12:16 PM

I am a teacher in NYC. I have over 100,000$ of debt from Grad school. I started at a community college, and went on to state school where I was an RA for room and board. I left undergrad with no debt. The MFA and teaching degrees over 2 years in Brooklyn landed me with massive debt. Guidance and loans counselors encouraged loans and acted as though it was no big deal. Half of the time they could not answer my questions about interest and repayment options.

Go to state schools or trade schools, even apprenticeships. It is better to take your education into your own hands and not to rely on an establishment.

May. 17 2013 11:05 AM
David from Fairfield CT

The the run away cost of college and the high interest rates that parents incur from borrowing from the federal govvernment must be addressed. My daughter just finished her 2nd year at the University of Vermont. Two years ago, out of state tuition was $39,000. For the 2013-2014 school year, it will be almost $48,000! How can any school justify a 25% rise in tuition in 2 years? Even with a well funded college saving plan, we have no choice but to borrow from the goverment. They charge a 7% rate for a ParentPlus Loan! SEVEN PERCENT!!! At the same time, my bank borrows from the government at a 0.75% rate!

May. 17 2013 07:58 AM
RJ from LI

Why do these discussion hardly ever, if at all, include students from other age groups? The problems of college students are the problems ALL students face, regardless of age.
I went back to school after I raised my son, got a two-year nursing degree, and now, in my early 60s, on my own and working but barely getting by, am struggling to obtain my Bachelor's in nursing.
I never had the option years ago of going to college, so I started much later than a lot of people. I still experience the same college-student difficulties as all students do. There are many others who started late; why are we invisible?

May. 17 2013 06:14 AM

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