Future Workers and Debt

Future Workers and Debt

October 1st, 2007 | Posted in Art & Society, Business & Economy

Today, the front page of the Seattle Post-Intelligencer read, “U.S. college students buried under debt.”

Are today’s young people just buying iPods and designer flip-flops instead of saving their cash for school? Are they too busy drinking five-dollar microbrews to get part-time jobs to pay for tuition? Let’s look at the numbers . . .

When I started my Bachelor’s degree at the University of Washington on October 1, 2001, exactly six years ago, my quarterly tuition was $1,197 per quarter for state residents like me and $4,289 for non-residents. When I graduated in June 2005, my final quarter’s tuition was $1,762 – a 47% increase in just four years. (My non-resident classmates paid $5,972, a hefty 28% increase.)

This fall quarter, residents pay $2,129 and non-residents pay $7,377, nearly double what I paid just six years ago. Keep in mind that most students enroll in three quarters per year, September through June, making the yearly tuition rates $6,387 and $22,131, respectively. That’s just tuition – room, board, books, and fees are extra.

As if that’s not enough of a burden, a few days ago I read about the rising cost of rental housing in the Seattle P-I. When I moved out on my own six years ago, the average Seattle apartment cost just over $800. These days, the average is $1,001, a 25% increase.

Think today’s young people are lazy? Try succeeding in full-time college classes (a 30- to 40-hour per week endeavour including study time) while working for an extra $22,131 for tuition. Say you worked full-time at an $11 per hour entry-level job, which is well above minimum wage, on top of going to the U.W. as a non-resident. After paying tuition, at the end of the month, you’d have about 62 bucks leftover to pay for books, school fees, taxes, rent, groceries, maybe even a little medical insurance – and of course, an iPod. (Hey, at least the U.W. provides cheap bus passes.)

When I worked as a college counselor, I met many young students who were attempting to do just that. Working 20 to 40 hours per week on top of school is no easy task. Grades slip, and students struggle to enjoy college. Students rush from class to work and back to class, exhausted and too tired to study or have fun at the end of the day. Lots of students live at home with their parents, missing out on that first taste of independence that college should offer. Unfortunately, many young adults must rely on cars to commute to their jobs – adding another huge expense, with auto loan payments, fuel costs, repairs, and insurance, which is typically more expensive for young adults than for older people.

The moral of the story? Even with all this struggle and a bit of grant money, most students still need to take on debt to make ends meet.

So it’s official. Debt levels for the (those born since 1982) are totally out of control. Before many Millennials even reach the age of 25, they’ve racked up enough debt to equal all their income for the next five or ten years, and it will take nearly a lifetime to pay off. So much for going to college to get ahead.

P.S. The Federal deficit is close to $9 trillion, or $30,000 per person – of course, that’s a bill that will be forwarded to Millennials.

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6 Comments

  1. Zyoggjhr   |   May 8, 2009

    5tg6pT comment5 ,

  2. Bob   |   Nov 24, 2007

    It’s amazing to me how much it costs just to exist. Real wages haven’t increased since the sixties. And to BB above, no big wars lately? REally? This is news to me!

  3. Wedding Cars   |   Oct 29, 2007

    My feeling, shared by an increasing number as they become used to the idea, is that the mathematics of a culture whereby you empower yourself through work simply no longer add up. You have too many people alive all at once now, no big wars lately, no big diseases, what is there for all these people to do?

    BB

  4. Ryan   |   Oct 22, 2007

    Yep, the thing that really gets isn’t the tuition (and all the hidden fees that go with it), but simply the cost of living.

    I was a lucky one, I went to a state school, and had enough scholarships to keep my head above water for the first 3 years, last year though, I had to take out a loan, and still work in order to pay basic living expenses:

    Tuition – Still on Scholarship (thank goodness for that)
    Rent – $545/month (just for me)
    Utilities – $80-$100/month
    Food – roughly $100/month
    Gas – $90/month (fortunately I can take a bus most of the time)

    So really, when you think about it, I’m spending ~$800 a month just to keep a roof over my head, and food on my plate – that’s ~$10,000 a year. I make $8/hour as an intern (doing jobs that professionals get 40k a year for). This doesn’t even include a cell-phone bill, car insurance, or health insurance (which thankfully are covered by my parents). I can’t even imagine NOT having scholarships, or parents who are willing to help you out.

    Oh, and this is just undergrad school. So when I get out, I can look forward to getting paid $30,000-$35,000 a year, and then watch as 1/3 of paycheck gets taken out to pay for some old codgers scooter (Totally Free! They just bill Medicare!).

    At least I only have 6k in loans, but still that’s gonna take a few years to pay off. Once again, I’m just glad I had scholarships and good parents.

  5. Kanna Hudson   |   Oct 19, 2007

    Thank you for the comment, Chris. Of course, then you can add several thousand dollars of disposable credit to that budget – that’s how Millennials buy vacuum cleaners, a decent suit for a job interview, oil changes, all those little “luxuries” in life. Add a mere $15 minimum monthly payment, and you’ve got a pretty direct road to financial ruin.

    The other day, my friend told me, “Hey, I’ll be in at least $40,000 of debt after grad school… what’s another $5,000?”

    Oddly enough, he has a point. Thanks again for the comment.

  6. Brenda Cooper   |   Oct 4, 2007

    Nice post Kanna. A side thought – the millennials are basically the children of my generation, although my son is a little older than a millenial at almost 28. My parents saved for my college, and they paid full-ride tuition for me and all three of my brothers. I paid for my son, but not by saving for it — I got lucky or something and made enough money to pay as we went (but he didn’t go to an Ivy League school – I couldn’t have managed that). I also couldn’t have managed to pay for more than one college kid.
    A lot of my friends haven’t saved enough for their children’s college – they hope for scholarships or miracles while the cost of higher education has gotten ever-higher. I wonder if our general acceptance of debt has partly caused this problem? My generation is more used to being in debt than my parent’s generation was. It’s pretty scary to imagine that’s what we’re teaching our kids – learn now, pay later.