The Wall Street Journal highlighted a study based on the debt, default ratio, and salary of the average student graduating from XYZ university. They drew numbers from about 4,000 colleges and universities. The majority of high school students entering college have no real concept of money. Most have never paid rent, paid car insurance, paid a phone bill, bought groceries on a weekly basis, etc. Some may have had a job, but no real responsibilities to direct the earnings of their minimum wage job towards. Why would they have those anyway? After all they are high school kids, some not even legally adults when they graduate (I was 17 for a time briefly as I started college). Therefore most students do not have any real concept of money. They leave high school and enter into a college or university more than willing to turn a blind eye to the $30,000 a year tuition. Paying back? Never considered. Ray Dotzler, university president, offered:
“Salaries can be pretty darn high or pretty low. We have graduates making six figures, which we think is really good. [However], a lot of them start in the twenties.”
How do students expect to pay off loans that exceed $100,000 when their salaries start off around $20,000 a year? More from the article:
Sara Moe, a junior majoring in political science and public policy, figured she would have to take on substantial debt at NYU. “But I was hoping for five digits, not six,” said Ms. Moe, who expects to rack up more than $100,000 in loans by the time she graduates. Said Ms. Moe: “It’s important to know what you are getting yourself into.”
How many have been told that 4-5 years spent in a university amassing $100,000 in debt with no job prospects isn’t wise? How many young people are told that there are alternatives?