College Costs: the Game-Changer

College campus tours.  Early action and early decision admissions.  Net price calculators.  Online-applications.  Annual costs exceeding annual salaries for many American families.  Graduates with mortgages, minus the home.

I haven’t even dipped my toe in the cesspool of the college admissions process for my children, but already I anticipate drowning in it.  In two years time, I suspect that managing my twin daughters’ college application process will drive me to the brink of insanity.

But talking to friends who are currently knee-deep in deferments, financial aid applications, scholarship and grants is interesting to me.  From a distance, it’s all very fascinating.  There’s a rhythm associated with the college application process that’s oddly compelling, akin to understanding the tax code in hopes of maximizing your return.  There’s terminology to learn, rules to understand, and advantages to be gained, as if there’s a hidden code that can be cracked to set you on the road to success.

In fact, I love to talk about the current college process, as long as it’s with people whose kids aren’t mine.  When I consider my own children, the process begins to sound stressful, overwhelming and ridiculous.

In the fall of 1985, when I applied to a grand total of one university, none of the current complexities were on anyone’s radar.  Not only had I never toured the University of Wisconsin, but my entire experience at UW was a football game during which I focused on the cheerleaders and a two-week camp that confined me to a sliver of the campus.  Neither my parents nor I ever entertained the idea of touring universities.  No one even suggested it.  My parents didn’t nag me about what I wanted to be in life or where I wanted to study.  And costs weren’t much of a concern.  Even working for the minimum wage of $3.35 an hour, I could easily save enough money during the summer to pay for at least a semester of tuition at UW.

My oh my, how times have changed.  And costs.  College costs are a game-changer.  No longer can people afford to have little Johnny attend a school he’s never visited to earn a degree he’s never heard of before.  Now kids have to grow up and grow up fast.  Don’t know what you want to be when you grow up?  Start looking.  Study the projections, or you might just wind up in the field with the highest unemployment of recent college graduates (do you know what it is?  Read on.).

The idea of attending a university to learn how to learn, to study the classics, to understand the world around you – that’s a hard sell when the prospect of graduating with over a hundred thousand dollars in debt looms over you like a death eater at Azkaban.

Several years ago I had a drink with a guy who said that when his children go to college, they’re going to have to show him the job statistics that support their preferred major.  I found this idea absurd.  “What if your child wants to become an archeologist?” I said.  “Show me the numbers,” he countered.  “If you can’t get a job in that field, then you have to change majors.”

I walked away thinking this was one narrow-minded guy.   And yet...

In the last decade, how many fathers watched their sons and daughters do what they wanted to do in college only to become one of the ever growing number of unemployed architects?  Yes, that’s right.  A major in architecture, according to a study quoted in TIME Magazine, has the highest unemployment of recent college graduates.

So now my drinking companion seems like a genius, years ahead of his time.

Of course, predicting the job market is messy at best, and you never know if your kid could be one of the few to obtain a foothold in the profession of his or her choice.  And while I’m certainly not advocating pushing children to major in something they have no interest in, I am advocating sharing with your children the realities that to them are no more tangible than their mortality.

Consider asking your son or daughter the following question: “How much debt do you suppose you can graduate with and still manage okay?”  It’s a good question.  Let’s say your child says something like $50k, not an unreasonable amount.  Okay. 

But your child has no concept of what $50k is.  None.  Do you?  What is fifty thousand dollars? 

Fifty thousand dollars is a $580 dollar per month payment for the next ten years at 7 percent.  And you still don’t have a building to live in, a car to drive, a place to park, food to eat, electricity, water, cable, internet, heat or anything else.  Furthermore, student loan debt is the one debt that can’t be discharged through bankruptcy.  And one day you’ll find someone to marry, and in all likelihood, he or she will also have loans of $580 a month, maybe more.  What if you marry a doctor, or worse – a doctor of philosophy who’s racked up $120,000 in debt ($1400 per month) and who’s selling extended warranties at Best Buy?

Sounds crazy, but read October 17, 2011’s issue of TIME Magazine, and you’ll learn that these numbers are not at all far-fetched.  There are graduates right now who, like the country they live in, are never going to be out of debt.  Ever.

Things look pretty bleak, and they're not necessarily going to get better, but there a few things parents and students can do to make life a little less painful.  I’ll discuss this next week.