Tuesday, June 26, 2012

Debt and Catholic college

Recently, I found this opinion on one of my Yahoo groups and it made me sit down and just wonder what planet the author was coming from:






But, I don't agree with the theory that just because college costs have risensignificantly we should dismiss the idea of going to college altogether. Thereare ways to pay for it. Yes, it usually involves incurring some debt but debt isa tool to help us achieve what we otherwise wouldn't be able to achieve.
Successful businessmen know that they need to use debt to build theirbusinesses.

So even if a kid bypasses college and decides to be an entrepreneur,chances are pretty good that he/she will need to use debt at some point.
I think its very sad when a talented kid is dissuaded from college because ofthe cost.

A good friend of my daughter was planning on going to Benedictine withher this fall (and had a good academic scholarship), but because she was toldthat debt is bad, she and her family have decided she should live at home and goto the community college instead. (I don't care how good the courses are at aCC--and in this case they're not that great, they in no way compare to a goodCatholic college.) .


I guess I could agree with her if we were talking a couple of hundreds of dollars of debt that could easily be paid off a couple of years after college - but we're not.  Kids are coming away with tens of thousands of dollars of debt - and that's enough to change their lifestyles and decisions for decades to come.

Maybe the course at the local community colleges aren't as great as the ones at a "good Catholic college" but college math, is college math is college math.  The difference may be $100 or $200/ credit but they all look just the same when printed out on a fancy transcript sheet!

I'm wondering how many Catholic college graduates are coming out of college and then being forced to postpone marriage and children because they have to service these big debts!  A friend of mine has a child who has a debt near $100,000.  When I asked my friend about it she said it was worth it because the child was "following a dream."  Was the dream to be in debt for 20 years?

I also think this author was misleading in her business analogy.  Yes businesses do take out loans and take on debt to grow their businesses - and usually the banks will look to see if they are a good loan risk and then loan accordingly - but that's not the case with college students who can get a tremendous amount of loan money without any visible means of being able to pay any of it back. A good businessman also doesn't take a loan without a long hard look a the risk/benefit ratio and a careful cost analysis.  

If college graduates can generate more income during their lifetimes, does it really matter where they went to college?  Or is it more important that they get the degree, and come out as close to debt free as possible so that they can move on with the next part of their lives?  I would argue for the latter.




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