Gifted Issues Discussion homepage Forums General Discussion Waiting for Superman

Starting salaries for law students are pretty well researched.

It's a trimodal distribution:

20% - $160,000 per year
40% - $60,000 per year
40% - Starbucks Barista

I've just looked at an interesting graph of growth in student loans since 1999 --- which is an astounding 511%.

Here's a quote from the piece I read:

"Liz Dwyer notes that "the growth of student loan debt was twice as steep as the growth of mortgages and revolving home equity from 1999 to the peak of the housing bubble in 2008."

Yeesh. I remember that people were already complaining about them in the 90s. In the light of today's statistics, the debt burden then was mild.

I wonder what the ratio of loan to first year's salary is? And by degree?

You have written a few times about the increase in student loans, and other things being equal, young adults are better off without debt. However, the financial hit of college may be just as large for children of affluent parents who don't qualify for financial aid but graduate from college without any debt (because their parents pay). Some colleges cost as much as $55K/year, which is $220K for a B.A. My wife and I can and probably will pay these bills out of current earnings, but at what price point should parents say "here is the cash, you decide if college is worth it (or if the extra cost of a private college vs. the state university is worth it)"? I'm not going to give my children $55K no questions asked if they decide not to attend college, but what if they want to start a business instead of attending college? For my own kids should I play the role of Peter Thiel http://giftedissues.davidsongifted.org/BB/ubbthreads.php/topics/99424/1.html ? While my kids are in middle and high school, I can arrange for them to learn some practical academic subjects, including math and statistics, science, and computer programming using online and other resources, so that they have the skills of many college graduates.

I think a good state school with that money in a trust until age 30 then released so they could buy a business would be something to consider.

One of my college roomates had this happen to him. He could either go to Dartmouth or his parents would keep the $100,000 for him and give it to him later. His mother died and he never got the $100,000.

In my case, my mother died and my father sold her inherited family assets to give to his new wife instead of paying for my sisters to go to school. His new wife decided they needed to take out loans. I didn't get any money for law school and got to take out loans.

It's good to establish trusts to avoid such scenarios.

A separate point is that if parents are willing to spend a fixed amount on the higher education of a child, that child should be allowed to attend a cheaper undergrad school (or graduate in three years because of A.P. credits) and to spend the remainder on professional school.

Then there's the scholarship issue.

I argue with my wife about this. I make the point that if our child was intellectually/academically capable of obtaining a full scholarship, but failed to work hard enough to get it, why should I pay for it? I

got a full scholarship and didn't cost my parents anything...why can't they get full scholarships, too?

The obvious answer is that the most selective universities, including the Ivies, Stanford, and MIT, only offer "need-based" scholarships.

My brother-in-law got a significant scholarship to Duke, so Duke provides merit scholarships. It's fairly selective.

Then you're talking scholarship to Duke vs. Penn, for example.

Now that I think about it some more, he got into Harvard, so it was a question of 3/4 schoarship to Duke vs. no $$$ for Harvard.