Colleges Withholding Transcripts

The Nation just did an article on colleges withholding transcripts from graduates that are in default with their student loans. Re-read that last sentence. You take out loans to pay for your college education banking on the hope that a person with a college degree will have a better chance of getting a decent paying job and firmly settling into middle-class-hood. Then you graduate and you start looking for a job. The loan folks give you six months to find a job before they start requiring repayment.

The Problem

Imagine you’ve graduated, find a low-paying job, move back in with your parents, and start working. You can’t put gas in your car, give a few dollars to your parents for bills, and pay your student loan. You’re trudging along and then one day to see a job posting for the job of your dreams! You’re a perfect fit and it’ll pay you enough to repay your student loans and maybe move out to a small roommate situation. The company requires a copy of your transcripts so you call your alma mater only to find out that you can’t get a copy of them because you’re in default on your student loans. This could become a huge problem.

Documentaries such as Default: The Student Loan Documentary are showing the problems that students are facing repaying student loans.

Debt bomb?

Yahoo! explains the problem perfectly:

A year ago, the Institute for Higher Education Policy published a study tracking the dismayingly high delinquency and default rates of the class of 2005. But as the sum of outstanding student loans has climbed towards the $1 trillion mark, passing total credit card debt along the way, the fact that America’s students are essentially putting themselves into hock for an education has more than a few people panicking. As William Brewer, head of the National Association of Consumer Bankruptcy Attorneys, told the WaPo, “This could very well be the next debt bomb for the U.S. economy.”

Suggestions

I have no answers other than the traditionally held:

#1 Attend a community college to complete your lower division classes.

#2 Choose a college with good return on investment (ROI).

#3 Get as many grants and scholarships as you can.

#4 If you have to take out loans, only take what you need. You can deny portions of your loan package.

#5 Start paying the loan off while you’re in school. Interest is a beast.

What suggestions do you have for dealing with paying for college?

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.

College is Overemphasized

What's your ROI?

I’m sure I’m not the only person that remembers all the “a mind is a terrible thing to waste” commercials promoting college attendance in the 1980’s and 1990’s. Many a young person attended college and maybe even grad school in hope of graduating and starting a wonderful career that would provide for them financially. That’s a wonderful possibility, but we need to understand that it’s only one possible outcome. Some people graduate from college and can’t find a job or find a low paying job and struggle to pay back student loans.

I just read an article about America’s overemphasis on promoting college as the only pathway to success. There are certainly careers that require a college degree. There are also careers that require master’s degrees, doctoral degrees, and various types of training. I’m not for or against attending, and graduating, from college. I do want people to know that there are several paths to success. Don’t do things because you think you’re supposed to. Understand the return on investment (ROI) that you’re going to get from different career paths. Most high net worth individuals are business owners, corporate executives, and doctors/dentists. If you’re planning on one of those careers paths, you need to think long and hard about what skills you need to achieve your career goals and what the best way might be to get/grow those skills.

(Time + cost (fees, books, loans, etc.))/ expected yearly income = return on investment.

Would you spend $40,000 to earn $32,000 a year? That’s just what some of us were trained to believe we should do. Whatever you choose, make sure that it’s a choice that you’re making. Don’t choose not to attend an educational program (community college, trade school, university, etc.) or choose to attend one based on the influence of people that may have something to gain from selling you an educational experience. Figure out what you want and choose the path that you believe will help you get there.

PEACE

CA CC & Kaplan

In case you haven’t heard, the California Community College District has entered into a Memorandum of Understanding with Kaplan University whereby students at CCs can take classes at Kaplan for a discount. Sounds good until you read the small print:

#1 Kaplan’s courses cost almost 10 times more than courses at California’s Community Colleges.

#2 Students would have to make sure that the Kaplan class would be acceptable for credit at the community college.

# 3 Even if the Kaplan course is accepted at the Community College there is no guarantee that the school that they transfer to will accept the Kaplan course.

Thanksfully, none of the Community Colleges in Kaplan have signed up to take advantage of the “help” offered from Kaplan, but Kaplan has helped themselves to the reputation of the California Community College system. Kaplan’s plan might be to “encourage” Community College students to transfer to Kaplan to complete their undergraduate degree. Kaplan’s reputation in high education circles is so-so, at best.

Be aware of what’s going on in higher education as costs are going up and what you get for your money seems to be less and less.