Sunday, May 13, 2012

Didn't Get Their Money's Worth

What is so difficult to understand about the concept of a "loan"? Someone with money will offer you use of that money for a period of time after which you will repay the money along with some small percentage to compensate the loaner for the use of the resource. Borrow, use, pay back. Seems pretty simple, yet apparently the best and brightest of America is graduating from college without being clear on the concept.
Kelsey Griffith graduates on Sunday from Ohio Northern University. To start paying off her $120,000 in student debt, she is already working two restaurant jobs and will soon give up her apartment here to live with her parents. Her mother, who co-signed on the loans, is taking out a life insurance policy on her daughter.
“As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” said Griffith, a marketing major. “I knew a private school would cost a lot of money. But when I graduate, I'm going to owe like $900 a month. No one told me that.”
It seems that Ohio Northern University slipped up if they've got a marketing major graduating that didn't know that  loan of $120k would have a payment of about $900 a month.

College Dreams Turn Into Nightmares

If a college degree has value, then it seems reasonable that the provider of that product is going to have to charge for it. Quality teachers, infrastructure, equipment and even life experience is not going to come inexpensively. If the faculty, materials, and resources are sub-standard then they really won't be worth the effort. The student seeks the best preparation for the future. That means investment and inevitably obligation.
Wanda McGill has stopped opening her student loan bills.
She isn't sure how much debt she has accumulated, though she thinks it's about $100,000. But McGill, a 38-year-old single mother, knows for sure she cannot pay it.
McGill said she dropped out of DeVry University, a for-profit college with a branch in Columbus, two years ago after she ran out of money — even with the loans. She now makes $8.50 an hour working for an employment training center in Florida.
“I was promised the world and was given a garbage dump to clean up,” she wrote in an online complaint at “Like my life was not already screwed up with welfare and all.”
She is 38 years old and somehow she feels no obligation to the agency which gave her 100 large. She doesn't open the bills because apparently she thinks that if she hasn't seen them she is off the hook. She spent the money and must not have picked up very much in return because she only qualifies for what is apparently a marginally better than minimum wage job. Ironic that it is at an "employment training center"! Who is she capable of training and for what job?

The final quote says it all. Welfare apparently has screwed up her life. I wonder if individual responsibility would have been more effective?


Murphy's Law said...

Funny how it's never the science or engineering majors that are sitting around defaulting on their loans and still unemployed years after graduating. Life's tough, but it's tougher when you borrow for a degree in literature, art or ethnic studies without understanding that no one really pays people to do that stuff for a living other than a few colleges that offer such degree programs.

Anonymous said...

I got one in 1984 for 2500 and paid it all back @50/month. That was the max back then

The interesting thing is that adjusted for inflation thats a little over 5K in 2010 dollars.

Yet is appears now you need a loan of about 25K/year or more to get to college

I think the colleges have been adjusting tuition to suck up all these federal loans. This has been pointed out on talk radio and elsewhere.

PascalR said...

My Grandson went to Ohio Northern on a partial scholarship. Even after the scholarship it was thirty grand a year. Good school, But. He is now at a local junior college. Much more affordable and I’m not sure the education is that different.