The cost of higher education has been increasing at 3-4x inflation for decades.
It has finally nullified any socio-economic advantage it once held as evidenced by the large number of graduates unable to repay their student loans.
The solution --- stop steering your kids toward college. AI is working toward eliminating many of these "careers" in the near future anyway.
Instead, orient them toward entrepreneurism. A business as simple as landscaping or construction can be just as financially rewarding as being a corporate desk jockey ... and even more so in some cases.
The key element here is to learn the trade but then move up to hiring/managing others who do the actual work --- for a company owned by you.
I enjoyed reading this. The long form was engaging. I appreciate the author being up front about not trying to be prescriptive with his journey, more just descriptive.
Honestly, the sense of despair people have in getting jobs is so sad to me. I've interacted with other young adults who are in the same situation. This sense of "I played the game the way I thought I was supposed to and now this??". I do all I can to help them connect them with others, but it's still really disappointing.
I was glad he "made it" in the end, but I'm not convinced that "near mental breakdowns" are healthy and worth it. And then... survivorship bias. For every talented person like this that excels academically and has a flair for long for story telling, there's another 9 or 99, that don't, and are still stuck in the trenches, and they don't even have the time/resources to write their equally emotive but even more shitty story.
That's pretty good, congratulations.
I don't mean to suggest you did the wrong thing, but I want to share a perspective from one of my friends. She has a similar amount of debt, and is simply choosing to make minimum payments for the rest of her life, maybe even default at some point. She says that spending her money on herself while she is young enough to enjoy it is more important than living frugally for decades to end up old without any money anyway. But she has also considered marrying, then being a stay at home mom or working under the table jobs so that she can default without getting her wages garnished. I'm not burdened by debt, but I would definitely be thinking of something similar in a case like that. Also reminds me of the credit-maxing meme. While I generally like market incentives, I think student loans are becoming extremely high risk investments. I'm lucky enough to have a well paying job, but I'm still worried about what paying for my child's education will be like. Should I make them take on hundreds of thousands in loans, or should I delay my retirement for a decade? The future seems bleak if we don't get the cost of education under control.
What's truly disturbing is the student debt still held by people 50, 60, 70+ years old, as shown in the article's embedded chart: https://benjaminlabaschin.com/wp-content/uploads/2023/07/Scr...
That's an impressive accomplishment, although the comments here are rightly mostly about the absurdity of student debt.
I feel incredibly fortunate to have been able to graduate debt-free, through a combination of a) attending school in Canada, where tuition costs are less absurd than the US; b) some money my parents saved for their children's education; and c) participation in a co-op education model. Basically, alternating between one semester in school, one semester at a co-op job, and no summers off (though really, how many college students go home for the summer and take a job at Starbucks anyway?). I graduated having financed my education by myself after the first year, and with ~2 years of (relevant) work experience already under my belt. The connections from one of those jobs also ended up helping me get the job I have now.
Like I said, I feel very fortunate, and this approach won't necessarily fit all use cases. But I heartily recommend a co-op education model any chance I get. Even if it could help you avoid taking on $10k in student debt, that feels like a win.
Not the first, or second, or third person I've heard about being duped by a farming gig in Hawaii. People will buy fairly cheap, totally undeveloped forest tracts and lure unsuspecting people in who dream of "Hawaii". But, they usually don't dream of being deep in a forest, with no neighbors, an hour from the nearest part of the ocean, which you can't even swim in, nor even get to since you have no car and no access to public transit. All the while doing hard manual labor in a hot and humid environment for 16 hours/day while living in a tent or in literally just under a mosquito net hanging from a tree.
Should just be able to send the debt back to the institute if the product they sold you doesn't result in enough income to foot the bill within X years.
The current system doesn't encourage the institutes to do anything other than spiral costs, burn money and zero responsibility to provide a product focused on making sure that loan is ever paid back.
Say this as someone who managed to pay theirs off, just think "forgiveness" and other ideas are temporary solutions we'll end up having to repeat over and over. Let's just have a permanent solution with accountability for what they are providing for the cost.
Congrats!
It feels so good. I paid off about $60k of debt in 1.5 years after college while living at home. It was hard but worth it.
This is an abnormal amount of debt, I think this gets headlines and people riled up. 140k for 4 years of school is not normal. The average school debt is 40k. Maybe school is expensive, this is excessive and bad decision making. Maybe you could say that there is a subset that needs help avoiding this but most do. Public schools and community colleges are doable and affordable and with a little work you can get scholarships. I did 6 years of undergrad because I was a bad student and only ended up with around 40k in the end.
Paying off the debt is the tip of the iceberg. What lies beneath are the tools to wield your income in a focused way to accomplish really big things.
Congrats @EconoBen :)
The chart is weird/misleading: https://benjaminlabaschin.com/wp-content/uploads/2023/07/gar...
Drawing $17xx bar and slapping $1494,97 onto it... whereas other bars match the label with the height.
I just couldn't parse how $1,4xx - $1,4yy would end up $408,56. And then in the text there is a number not charted: $1902 to just add to confusion, but OK, that's not what you get on hand.
And then "$1106.42 per month, my public loans $387.02. Altogether, I would owe $1493.22" - the sum is actually .44
Author should fix something.
It strikes me reading this piece, how insanely high ROI it would have been for this guy to have hired a really good life coach. He learned so many lessons the hard way way after he was ready to learn them and someone who was capable of transporting those lessons back in time to the point where he was ready to hear them would have generated hundreds of thousands of dollars in excess value.
Unfortunately, there are so many "life coaches" that they drown out the people who could have actually been a good coach to this person.
TL;DR – he got a six figure data science job. You too can pay off your loans early with this one simple trick!
I really enjoy your writing. You seem to have a talent for it.
Is this fiction? There are no snakes in Hawaii, and I don't remember mosquitoes being much of an issue there either.
Wow which school is that? Is that typical for a 4-year degree nowadays?!
really appreciate all the thoughtful comments! Better than I could have imagined. Thanks all.
I paid off ~65K in student debt in one year (first year as a developer)... it's totally doable, especially in the USA.
An econ major who can pull off paying back $194k in loans that fast should be deep-selected for great things.
Learn to code, this is the way and only way to escape poverty it seems
A few years ago, I set myself the goal of paying off all my student loans before I'm 30. I turn 30 in two months. And as of this month, I paid them off. All $194k of them...
Obviously, this was a significant milestone for me. So, I took this opportunity to reflect on my journey so far. How I even came to owe that much money, how I overcame this obstacle, and what it all means to me.