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Old 02-22-2006, 11:03 AM   #1
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"Generation Debt": College Costs, Uncertain Job Market Threaten Young Futures

Part of an author interview from the NYC website Gothamist.
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25-year-old Pulitzer Prize nominee Anya Kamenetz is worried about her peers, and herself. In her new book Generation Debt, the Village Voice columnist outlines the key factors damning her age bracket: student loans with exorbitant interest rates, dead-end, low-paying and temporary jobs, lack of health insurance, Social Security instability, and media, culture and families who view her generation as lazy and apathetic.

GOTHAMIST: Can you summarize the premise of Generation Debt?

KAMENETZ: Over the last generation, there's been a sharp drop-off in the quality of opportunities offered to young people, caused by a huge divestment in K-16 education, and the devolution of the job market to this low-wage, service-sector deal on the non-BA side, and part-time, unpaid-intern, temporary, contract, and freelance work on the college-grad side. A college degree is now a crucial pass for entry into the middle class, and yet young people are no more likely to have one than our parents--only 28 percent get one. And for those who do graduate, two-thirds are borrowing student loans, graduating with between $17,600 and $23,000 in debt. Because they can't make ends meet, people under 35 are running up an average of $4000 in credit card debt. We've never sent out any generation into the world with that kind of mini-mortgage on their backs. And the irony is, this withdrawal of support for young people is occurring when the US desperately needs a super-sharp, highly skilled workforce to compete with what's happening in China and India, and to support the retirement of the Baby Boomers.

G: ...what surprised you the most as you delved into the topic?

K: I guess what surprised me the most is the gulf between the popular media images of young peoples' lives and what they are actually like. Middle-class, working-class kids are working their butts off to stay in school--20, 30 hours a week at a job, plus classes. They have to work so much that it takes them longer to graduate--an average of six years--which means they have to take out more loans, and on and on.

G: How do race and sex interact with these generational issues?

K: Poorly! Crudely, the younger generation is a lot more black and brown than older people are, and that seems to be having some impact on the willingness of older people to invest in them and make sure they get a fair chance. The gap in college attendance between Hispanics and whites was 5 percentage points in the 1970s; it's 11 points today. Bob Herbert ran a column last week pointing out that only a sixth of African-American kids and a twelfth of Hispanics are getting a college degree. Over half of those who do, graduate with unmanageable debt.

When it comes to women, the pay gap persists. And young women who want families are wondering who exactly is going to pay for them. Because of this delayed entry into the workforce, a lot of women in their late 20s are still just getting established in their careers and they can't exactly afford to downshift when they haven't even upshifted yet.

G: Do most young people only confront these issues once they've finished college and are first starting out in the work world? Is there anything they or their parents can do to pre-empt some of the financial burdens they'll face post-college?

K: I'd like to reiterate that "most young people" do not finish college. Only half have any college experience at all. It's true, people tend not to face reality until they are in the middle of it. People do have options to avoid financial burdens. It may be realistic to go to a community college for two years and then transfer to a state school. For almost everyone, I would say avoid getting a student credit card. Use a debit card instead. I never had a credit card until I was two years out of school, and then the only one I could get was a Capital One Visa with a $300 limit. Those were good training wheels for me

And it's a good idea for everyone–whether community college or graduate student—to approach your education as more than a period of exploration, as it's often presented to us. The fact is that it's a major investment and if it's a burden on you or your parents, you need to take responsibility to make sure it pays off. That doesn't necessarily mean you have to study accounting. But maximize your exposure to the working world—through internships, shadowing professionals, meeting people in fields you're curious about—and make sure you understand as much as possible about the path from point A, education, to point B, a job.
Kamenetz also lamented the absence of any sort of organized, national student movement to demand of not only colleges, but also state higher-ed budget-makers and student loan outfits like Sallie Mae, a fairer shot for young people at affording a college degree without accumulating ballooning debts their uncertain job prospects can't accommodate. I think this is a very interesting idea, but with our higher education system being as decentralized as it is, it doesn't seem very likely to happen.

The book itself is a bit shrill at times, but it does lay out the issues well, and some good sound financial advice in there too...at least, from what I could tell in 10 highly distacted minutes flash-skimming it at Borders the other night (with a howling 3 year old in my other arm and a sobbing 5 year old tugging at my pants... ).
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Old 02-22-2006, 01:30 PM   #2
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Well, at least someone took notice. Unfortunately, no one seems to be listening. Most of my professors and the people in my local community still function under the assumption that my parents are paying for my college ed. Funny, since my ed. is costing MORE THAN my dad's yearly salary! He couldn't pay for my education if he wanted to. Meanwhile, I'm engaged, with $50,000 in dept and my fiance carries another $30,000 or so. And everyone's telling us how money and finances are the top reasons for fighting and destroying young marriages. I really am scared.....
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Old 02-22-2006, 02:35 PM   #3
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I guess what surprised me the most is the gulf between the popular media images of young peoples' lives and what they are actually like. Middle-class, working-class kids are working their butts off to stay in school--20, 30 hours a week at a job, plus classes. They have to work so much that it takes them longer to graduate--an average of six years--which means they have to take out more loans, and on and on.
With a few specific exceptions, I believe that it is a terrible idea for college kids to work during the school year. Manning a cash register or being a salesperson at Best Buy doesn't pay well and doesn't do anything to enhance one's career prospects. Plus, there's the obvious point that logging all those hours will hurt one's grades or delay one's graduation. Exceptions include working in a lab, grading papers, and running one's own business. (I remember a while back at my school that a number of students made a nifty profit buying textbooks at lower prices overseas and selling them on campus.)

Although it is sad that it is difficult for motivated kids to fund their education, there are some things they can do if money is really tight. Graduating in 3 or 3-1/2 years and/or taking loans from a bank are much better ideas than working during the school year, imho.
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Old 02-22-2006, 03:04 PM   #4
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I disagree with the not working while you're in college. Unless you're a science major with labs, you're in class for 3 or 4 hours a day tops. The workload isn't the same for all classes, but there is still an abundance of free time even with all the studying. If a student wants to work a couple hours a day at Best Buy for the discount or for beer money, all the power to him.

The biggest thing college teaches you is how to manage your time because so much of it is spent outside the classroom. Some people can handle it and others can't. I think that alcohol is much more of a reason for people fucking up and not graduating on time than working too much is.

My sense of things could be skewed though because I attended a liberal arts school where an extremely high percentage of students graduated on time and had parents paying for most of the tuition.
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Old 02-22-2006, 03:27 PM   #5
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the best present my parents ever gave me was enabling me to graduate debt-free. this enabled me to do more volunteer-type stuff in the summer for very low pay.

i am forever thankful.
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Old 02-22-2006, 04:28 PM   #6
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Quote:
Originally posted by speedracer


With a few specific exceptions, I believe that it is a terrible idea for college kids to work during the school year.
Although it is sad that it is difficult for motivated kids to fund their education, there are some things they can do if money is really tight. Graduating in 3 or 3-1/2 years and/or taking loans from a bank are much better ideas than working during the school year, imho.
Well, I wish I could agree with you. I'm currently a full time student working FOUR part time jobs AND I have an internship. I take out the max in loans from the government and also have close to $20,000 in loans from Citibank and some other bank. I made over $10,000 this past year and NOT A CENT has gone towards this year's tuition. There are a gazillion other living expenses besides tuition. Books, rent, utilities, food, transportation, clothes, misc. school supplies, interest on loans (HUGE one there), health insurance...to name a few.

How do you suppose normal people live without being able to buy groceries or pay rent?

Also, I happen to be very grateful for the opporunities my present job (which I've held since my freshman year) is opening up for me. I wouldn't be eligible for half of the jobs I'm looking at without this experience (senior HelpDesk computer technician).

I don't mind working during school; I've never expected not to. I worked my way through high school and never assumed my parents would help with college. I just get bitter because it seems like the entire world still has those assumptions and it makes it very difficult and frustrating, to the point of depression sometimes, than normal people are getting the shaft.

Things are just too competitive these days. My school keeps raising tuition because they say we're the best liberal arts school in our class, which is true, but it's almost impossible to get good scholarships anymore. My mom went here too and she got a four year full ride academic scholarship with a 3.4 high school GPA, no honors, no extracurriculars. I came in with 4 years of varsity sport, including one year as team captain and two years as MVP, 4 years of math, 4 years of science, and 4 years of foreign language, and a 3.9 GPA from the best private school in the area and I got next to jack shit. Nothing balances out anymore. Everything's 10 times more competitive, the cost of living and the cost of tuition are rising exponentially, and the minimum wage is still below $6/hr. What the fuck.
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Old 02-22-2006, 04:51 PM   #7
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Originally posted by LivLuvAndBootlegMusic

Nothing balances out anymore. Everything's 10 times more competitive, the cost of living and the cost of tuition are rising exponentially, and the minimum wage is still below $6/hr. What the fuck.


i know this sounds really flip, but this strikes me as precisely the reason why people should vote Democrat.

you've beautifully given voice to where the real squeeze has been on people these past 20 years or so, while the tax cuts have gone to those making solid 6 figure salaries.

flame me for politicizing this all you want, but there is no reason on earth someone like LivLuv should be so crushed with debt and overburdened with having to somehow make it all work out.

this is precisely where the government should step in and help a sister out.

good luck. my BF was like you -- he had to pay for everything, and it's given him a crucial leg up on many of his contemporaries at the top-tier consulting frim he now works at: he has no sense of entitlement, and he lacks any sort of pretention, and these two qualities serve him enormously.
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Old 02-22-2006, 05:09 PM   #8
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Thanks, Irvine. You can politicize it all you want b/c quite frankly the experience has made me very bitter and beyond caring. The only hope is that my fiance might go back and get a teaching degree, which would stall some of the loan payments and maybe erase some (I think some you don't have to pay back if you're going into education). This past year has been hard because previously, I had something to look forward to - going to Africa, an oportunity that I simply would not have had anywhere else based on the costs and the professor who runs the program - but now that I've done that, there's really no purpose for me to continue schooling at this rate of expense, other than to simply finish.

It's scary to think that my education will have cost more than my family's home, a home that my parents will be paying off until they die, or sell it and take on a new mortgage.
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Old 02-22-2006, 05:23 PM   #9
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^ (well really , but you know what I mean)

You're not alone--75% of undergrads work now, an average of 26 hours a week. And like LivLuv, an awful lot of them are doing it because they have to just to get by--there's housing and basic living costs to be covered after all, and very few aid packages cover everything where tuition is concerned. Even Pell Grants, underused though they are, now typically cover only about 40% of tuition, as opposed to 77% back in 1980. Meanwhile, tuition rates have soared 45% over the last decade. The average college graduate today is $20,000 in debt by the time they finish (a 66% increase since 1997, during which time real per capita income has only increased 8%)--add grad school onto that, and you'll wind up owing more like $46,000. I am still paying off my grad school bills. And frankly, the more you defer, the deeper the hole you dig for yourself, because interest rates and fees and penalties can easily wind up leaving you ultimately paying double what you originally owed. And you can't count on securing a stable good-paying job to work your way out of that on a timely schedule.

It's a miserable situation. I worked full-time through college and most of grad school and I know firsthand what a strain it is, but what can you do. I did very well gradewise, and I agree with randhail that more students (especially undergrads) fall off-track due to drinking than working. Still, a lot of students do wind up leaving "for just a couple years" because their money's run out, and a lot of them never come back, and I suspect these folks are the worst off of all. Then there's all the new, "nontraditional" older students who are supporting children and aging parents and working full-time on top of all that--but that's a whole other story unto itself.
Quote:
Originally posted byLivLuvandBootlegMusic
Meanwhile, I'm engaged, with $50,000 in dept and my fiance carries another $30,000 or so. And everyone's telling us how money and finances are the top reasons for fighting and destroying young marriages. I really am scared.....


I strongly recommend that any young people getting married today, particularly ones who are already carrying a heavy debt burden, have a couple sessions with a marriage counselor or qualified pastor or the like beforehand to discuss (among other things) views and priorities concerning money, saving, loans, retirement goals, and where children fit into all this, in a structured way. Maybe even a meeting with a financial planner, too (*don't* think of these folks as a luxury; you don't need to see them often to benefit enormously from it, and again, they provide you with a structured framework for getting a handle on your financial situation, something most of us are realistically unlikely to achieve on our own). For sure, money has been one of the more frequent sources of strain in my own marriage--not just because we too both had significant grad school debt, but also because we come from very different financial backgrounds family-wise, and thus do not see eye-to-eye on what constitutes a Red Flag where money is concerned. It's tough. And the double whammy of soaring education costs and poorer "real" job prospects is only making things worse.
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Old 02-22-2006, 05:23 PM   #10
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Unless you come from upper-middle or better backgrounds with parents who are willing to cough up substantial dough, or are on a full-ride scholarship somewhere, you are going to be in debt. Part time jobs, no matter how you add up the hours and pay will simply not cover much more than your living or extracurricular expenses.

ETA: What LivLuv said about getting married with a huge debt load - I have a friend who just got married this past November, and she owed $42K at the time still, and her husband worked 2 jobs for 3 years and managed to reduce his debt load to "only" about $6K at the time. But she was saying that this debt would mean putting off having children for a minimum of 5 years, if not a lot longer, because in her experience, all the other young couples she knew who had huge debt loads ($50K+) and ended up having kids very early on had a terrible time of it, and were largely very unhappy and feeling overburdened.
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Old 02-22-2006, 05:24 PM   #11
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sorry you have to deal with that right now livluv.

and I can't say it's encouraging because I see myself in that same position in a few years. I keep my grades up, do honors, join clubs, pay half the fees for a somewhat expensive sport and will be paying all of them once I get a job...all in the hopes that, among other things, it'll help me get scholarship money. Because I know my parents can't or won't or shouldn't pay for my tuition and it keeps getting higher...

question: is it anyone's experience that having a degree in general is largely more important than where it's from? I ask because I'm starting to think it'd be a better idea to consider colleges within my state, so I can graduate w/out 30000 in debt (hope scholarship). In fact I think UGA is known for being affordable in-state and it's a good school actually...

the minimum wage is so off, they could double it and it wouldn't be enough in my opinion. people will say that you're not meant to live and support a family on that kind of job, but a lot of people don't have a choice it seems
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Old 02-22-2006, 05:30 PM   #12
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With a few specific exceptions, I believe that it is a terrible idea for college kids to work during the school year. Manning a cash register or being a salesperson at Best Buy doesn't pay well and doesn't do anything to enhance one's career prospects.
Not everyone has that luxury, unfortunately.

As LivLuv has already stated, it's very difficult to make it as a college student these days.

I have nowhere near the debt she has, but I do have student loan debt. I graduated college in 2002 and still haven't found a decent paying job. I'm currently working multiple part-time jobs with no health benefits while searching for a full-time job. As I can't afford to live on my own right now, I had to move back in with my mom. I also can just afford to make my monthly student loan payment--I owe a little less than $12,000 now to Sallie Mae, and that's after paying on the loan since February of 2003, when my grace period ended.

So it hasn't ended for me...but I still have hope for the future.

Anyway, while I attended college, I worked full-time hours at a part-time retail job (only place that would hire me, someone with no experience and no degree, which is ironic now because even with a degree I still can't find a job because I'm told that I don't have enough experience) with no health benefits and was a full-time student. I went to class more than three or four hours a day and while it was very difficult, I'm glad I experienced that because it made me realise the value of hard work.

Quote:
and the minimum wage is still below $6/hr. What the fuck.
How they expect people to live off this is beyond my understanding. I lived with roommates and in subsidized housing during college to make ends meet, but I don't have that option now. It makes no sense to pay people that little for a full day's work, especially when they're working retail type jobs.
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Old 02-22-2006, 05:36 PM   #13
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Fortunately, my parents paid for my education.
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Old 02-22-2006, 05:40 PM   #14
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I am glad that this issue is brought up. It is so true in Canada as well as the United States. You know, I could see all of this happening over the course of my thirty years. It is just very sad really.

But there are some saving graces in the crush of life....compromise and asking yourself what is really necessary. We think we need so much stuff but we really don't.

And in regards to college....if you are paying all that money...you better believe in it.
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Old 02-22-2006, 05:42 PM   #15
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Quote:
Originally posted by VertigoGal
question: is it anyone's experience that having a degree in general is largely more important than where it's from? I ask because I'm starting to think it'd be a better idea to consider colleges within my state, so I can graduate w/out 30000 in debt (hope scholarship). In fact I think UGA is known for being affordable in-state and it's a good school actually...
Yes yes yes. If/when you go to graduate school, they will look first at your GPA, GREs/LSATs/whatever, writing samples, and evidence of having a structured plan in mind for your grad studies. Not at where your degree is from. Anyhow, UGA has a fine reputation (plus Athens rocks). And a dirty secret of many of the Ivies is they same some of the country's worst reputations when it comes to helping their students position themselves for the job market. I went to a big state school too, and did not suffer from it at all.

A good piece of advice is: make a point from the start of not only touching base regularly with whoever your assigned advisors are, but also seeking out other professors whom you feel you can connect to as mentors and sounding boards for your plans for the future. We are not just here to instruct, and we keep open-office hours for a reason.
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