Response to Kenny's Gen Y article

[justginger]

Here's the other side of the coin.
Sorry for those offended by poor language.
What do you think, is this person's viewpoint legitimate?

http://aweinstein.kinja.com/****-you-im-gen-y-and-i-dont-feel-special-or-entitl-1333588443

 

[amc80]

I was born in 1980 so I'm also on the tail end of the Gen Xers.

This quote got me right off the bat: "You have no idea about student debt, underemployment, life-long renting. “Stop feeling special” is some sh**** advice."

I think this sentence proves the original article's point. There is no reason to have student debt. I have some (about $20k for undergrad and grad school, combined). Could I have less or none? Sure. I chose to take loans rather than live on ramen for 5 years. Personal choice, and happy with that choice. If you don't want student debt, work your way through college, go to a junior college for your prereqs, go to a state school, etc.

Don't want to be a renter for life? Move somewhere less expensive. Yeah, living in SF or NYC is fun and glamorous, but it isn't necessary. Less expensive housing doesn't necessarily mean wages are equally low. I've lived in three of the highest cost housing markets in the county (Santa Barbara, Bay Area, San Diego). Santa Barbara had horrible wages because it is a fairly (geographically) closed community with a major university = huge educated labor supply. As an example, I worked for a consulting firm in grad school as an economist and made $17 an hour. No way can you buy a house on that. San Diego also has fairly low wages for how expensive the housing is. I moved out of state and took a job making more than I did in SD, but real estate is probably half what it was down there. My current city isn't glamorous by any means, but just about everyone I know here has bought a house by age 30.

 

[SB621]

I was born in 1980 so I'm also on the tail end of the Gen Xers.

This quote got me right off the bat: "You have no idea about student debt, underemployment, life-long renting. “Stop feeling special” is some sh**** advice."

I think this sentence proves the original article's point. There is no reason to have student debt. I have some (about $20k for undergrad and grad school, combined). Could I have less or none? Sure. I chose to take loans rather than live on ramen for 5 years. Personal choice, and happy with that choice. If you don't want student debt, work your way through college, go to a junior college for your prereqs, go to a state school, etc.
Don't want to be a renter for life? Move somewhere less expensive. Yeah, living in SF or NYC is fun and glamorous, but it isn't necessary. Less expensive housing doesn't necessarily mean wages are equally low. I've lived in three of the highest cost housing markets in the county (Santa Barbara, Bay Area, San Diego). Santa Barbara had horrible wages because it is a fairly (geographically) closed community with a major university = huge educated labor supply. As an example, I worked for a consulting firm in grad school as an economist and made $17 an hour. No way can you buy a house on that. San Diego also has fairly low wages for how expensive the housing is. I moved out of state and took a job making more than I did in SD, but real estate is probably half what it was down there. My current city isn't glamorous by any means, but just about everyone I know here has bought a house by age 30.

I'm only going to address the part highlighted. Not everyone has the luxury of going to an in-expensive college. I was well into the 6 figures for only 3 years of college (I worked my butt off taking full course loads and summer school to graduate early because of the debt). However, I have an amazing degree so I paid off all my student debt in less then 5 years, but I also lived off of nothing. My point is you can't always control your debt. I was lucky that I found employment right away. In my graduation year over 70% of my fellow graduates didn't for 18 months plus.

Just Ginger I took no issue with the article Kenny posted or this one. I agree the competition in the job market today is hard. You have people more highly educated, making less, with at least 100 other people behind them who can take their job. Job security, or staying with 1 company to retirement is practically unheard of. I'm only 9 years into my professional career but I have already worked for 2 major companies and if I can better benefits I will jump to #3. In my 9 short years I have watched my company(ies) and others in the industry no longer offer a pension, no longer match 401ks, and then of course completely stop offering them up. So I agree with the author that the workplace, or having a job, doesn't always = a safety net.

 

[amc80]

I'm only going to address the part highlighted. Not everyone has the luxury of going to an in-expensive college.

Why? Not trying to start an argument, I'm just genuinely curious. At least in the US, don't all states have either public schools or reciprocity with another state? Or can't someone go to a junior college for a couple of years to get the lower division stuff out of the way?

My step-niece just graduated high school. She lives in Anchorage and got a full scholarship to two of the public AK schools. She is choosing to pay (get loans for) to go to a public school in Southern California, where she will be paying high rent and out of state tuition. She is majoring in chemistry so there is a lot of potential to get a decent paying job. BUT, she plans on being a high school chemistry teacher. Nothing wrong with that, but everyone knows teachers don't make much, and she will have a huge amount of debt to deal with. Her parents' opinion is that she "deserves" the opportunity to get out of Alaska for a few years. Nothing wrong with wanting to live out of state, but there are costs associated with that choice.

 

[Sky56]

amc80, what you say about expensive areas is very true in my life. I lived in New York City and in an expensive coastal town in California when I was in my twenties. I just knew that I would never get anywhere if I stayed. I am not a very go-getter, forceful personality and I saw my future as renting in very tiny, expensive apartments and forever struggling.

I moved to a nice but unglamorous town in another state and I was amazed - for much less rent I was paying for a tiny converted garage in California, I was able to rent a sizeable 3 bedroom, 2 bath house in a nice neighborhood.

Later on, I met my husband who had moved from another state also...and we ended up being homeowners, then built a small business, and both of us ended up being successful, but most importantly happy...and loving living in a beautiful and relatively safe place.

If I stayed in those expensive places, I don't think I would have had that good future. I also had trouble meeting nice, non-arrogant and non-spoiled men when I lived in those cities, too. The people in my new location were generally nicer and more my style.

 

[momhappy]

I'm only going to address the part highlighted. Not everyone has the luxury of going to an in-expensive college.

Why? Not trying to start an argument, I'm just genuinely curious. At least in the US, don't all states have either public schools or reciprocity with another state? Or can't someone go to a junior college for a couple of years to get the lower division stuff out of the way?

My step-niece just graduated high school. She lives in Anchorage and got a full scholarship to two of the public AK schools. She is choosing to pay (get loans for) to go to a public school in Southern California, where she will be paying high rent and out of state tuition. She is majoring in chemistry so there is a lot of potential to get a decent paying job. BUT, she plans on being a high school chemistry teacher. Nothing wrong with that, but everyone knows teachers don't make much, and she will have a huge amount of debt to deal with. Her parents' opinion is that she "deserves" the opportunity to get out of Alaska for a few years. Nothing wrong with wanting to live out of state, but there are costs associated with that choice.

I agree. It's about choices and some choices are more expensive than others.

 

[missy]

I'm only going to address the part highlighted. Not everyone has the luxury of going to an in-expensive college.

Why? Not trying to start an argument, I'm just genuinely curious. At least in the US, don't all states have either public schools or reciprocity with another state? Or can't someone go to a junior college for a couple of years to get the lower division stuff out of the way?

My step-niece just graduated high school. She lives in Anchorage and got a full scholarship to two of the public AK schools. She is choosing to pay (get loans for) to go to a public school in Southern California, where she will be paying high rent and out of state tuition. She is majoring in chemistry so there is a lot of potential to get a decent paying job. BUT, she plans on being a high school chemistry teacher. Nothing wrong with that, but everyone knows teachers don't make much, and she will have a huge amount of debt to deal with. Her parents' opinion is that she "deserves" the opportunity to get out of Alaska for a few years. Nothing wrong with wanting to live out of state, but there are costs associated with that choice.

I agree. It's about choices and some choices are more expensive than others.

I agree as well. It really is about choices. No one is entitled to have an expensive college education (but they are entitled to have a good one IMO). No one is entitled to live in a big expensive city in a beautiful house. I mean it would be nice ofc but no one is entitled to these things. What they are entitled to (again IMO) is the opportunity to study hard, work hard and work their way up to whatever their hopes and dreams are.

The article Kenny posted is full of generalizations that don't apply to most of the PSers. You can find people like this of any generation ofc but it did make some good points IMO. And I think this sense of entitlement starts with the parents and what they teach their children to believe and then it spreads like a wildfire.

 

[SB621]

I think if you are a random student who has a "normal" degree AMC your point is taken. However if you have a specific major, for example my major was offered in 4 colleges in the US. I had very limited choice about where I could go for it. Yes I could have chosen a different major but personally I would rather have the debt then do something I have zero interest in. You will also find with specific majors credits can't be transfered so I didn't have the option of going to a less expensive school to transfer credits over. Unfortunately basket weaving or piano wouldn't have even passed as electives in my school as they did for other classmates who went to state schools. Major schools with general majors have options. The more specific you get the less options you have.

Point being is I took on a $hit ton of debt and paid it off in 5 years. I have several friends who took out 20-30k in loans to go to their states schools and are still paying it off 10 years later. Cheaper does not always = better or expensive = better. I liked how the article summed it up that ppl have to work their butt off regardless. I agree with Missy that my generation has been put on a pedestal more so at home by our families more so then other generations. But we are still working our butts off to make it in a world that doesn't have the opportunies that were ever present for the WWII and Baby boomer gens.

EDIT to AMC- no worries I like this discussion!

 

[texaskj]

Here's the other side of the coin.
Sorry for those offended by poor language.
What do you think, is this person's viewpoint legitimate?

http://aweinstein.kinja.com/****-you-im-gen-y-and-i-dont-feel-special-or-entitl-1333588443

Oh man, would I love to smack this guy upside the head. After 28 years in the business he's in, I can tell him that's the problem.
Get the hell out. Find another line of work. You're beating your head against a brick wall.
Journalism schools keep cranking out people who will work for much less than you and they're a huge part of the problem. They can't train anyone for the future because they don't have a clue what the future holds for the business. We were always told we'd never get rich in this profession, but we'd always have work. Riiight. We've had so many rounds of layoffs I've lost track.
I'll get off my soapbox now.
It's like Missy said. It's this incredible sense of entitlement a huge chunk of this generation has.
I loved the article and the web site.

P.S. ginger, a lot of journalists cuss like sailors in prison. We used to have an on-going feud between departments at my paper over it. We have one computer system that I've always said would make Mother Theresa cuss.

 

[amc80]

I think if you are a random student who has a "normal" degree AMC your point is taken. However if you have a specific major, for example my major was offered in 4 colleges in the US. I had very limited choice about where I could go for it. Yes I could have chosen a different major but personally I would rather have the debt then do something I have zero interest in. You will also find with specific majors credits can't be transfered so I didn't have the option of going to a less expensive school to transfer credits over. Unfortunately basket weaving or piano wouldn't have even passed as electives in my school as they did for other classmates who went to state schools. Major schools with general majors have options. The more specific you get the less options you have.

Point being is I took on a $hit ton of debt and paid it off in 5 years. I have several friends who took out 20-30k in loans to go to their states schools and are still paying it off 10 years later. Cheaper does not always = better or expensive = better. I liked how the article summed it up that ppl have to work their butt off regardless. I agree with Missy that my generation has been put on a pedestal more so at home by our families more so then other generations. But we are still working our butts off to make it in a world that doesn't have the opportunies that were ever present for the WWII and Baby boomer gens.

EDIT to AMC- no worries I like this discussion!

Good

Okay, that makes sense in your situation. Specific major = specific school. I get that. But what % of people in high student loan debt art there for that reason?

 

[makhro82]

I think there are way too many generalizations in both articles.

AMC I don't agree with you.

When I went to college I initially enrolled in an "inexpensive" state school, well inexpensive at the time was $10K per semester. During my freshman year both of my parents became permanently disabled. So I left my "inexpensive" state school and went to community college. Well that was around $75 per credit and the wage I was making was $7.25 per hour and I worked FT in a low cost of living state but I needed housing, health insurance, etc. I literally was living on bare minimums YET I still have student loans.

I eventually moved to CA and settled outside of SF where I was able to buy a house on my $17 salary that I was earning while still in school in combination with DH's $17 salary while he was going to school. We moved to CA because school was cheaper, yes the cost of living was higher but once we got our in-state residency school was significantly cheaper for state schools. Tuition at the time was $4k per year but the trade off was EVERYTHING else was more expensive.

I don't feel entitled to anything but I believe that everyone should have access to a quality education without having to go into debt for it. When my parents became ill I lost my health insurance and the ability to attend the school that would have given me the best connections and resources for my chosen major. Something that would've been cured in an office visit had I had insurance ending up costing me $5k in the ER. So at 18 I was already $5k in debt in just for medical expenses not to mention trying to pay for this education that I "needed".

 

[msop04]

I think if you are a random student who has a "normal" degree AMC your point is taken. However if you have a specific major, for example my major was offered in 4 colleges in the US. I had very limited choice about where I could go for it. Yes I could have chosen a different major but personally I would rather have the debt then do something I have zero interest in. You will also find with specific majors credits can't be transfered so I didn't have the option of going to a less expensive school to transfer credits over. Unfortunately basket weaving or piano wouldn't have even passed as electives in my school as they did for other classmates who went to state schools. Major schools with general majors have options. The more specific you get the less options you have.

Cheaper does not always = better or expensive = better. I liked how the article summed it up that ppl have to work their butt off regardless. I agree with Missy that my generation has been put on a pedestal more so at home by our families more so then other generations. But we are still working our butts off to make it in a world that doesn't have the opportunies that were ever present for the WWII and Baby boomer gens.

Okay, that makes sense in your situation. Specific major = specific school. I get that. But what % of people in high student loan debt art there for that reason?

amc80,

Are you referring to people who misuse student loans? Like those students who take out the max, knowing that they might have difficulty paying it back due to the going salaries of their chosen career after graduating? Or maybe those who take out a lot extra to buy a car or whatever??

I will have to disagree with you about having the option to choose a less expensive school. It totally depends on the course of study you are in. Unlike SB, my choice of career (pharmacy) is/was not exclusive to a very few schools. However, since it's a grad program, it's expensive. Did I choose the cheapest pharmacy school in the country? No, but I certainly didn't attend the most expensive program either. I was fortunate to have scholarships and lots of accumulated "birthday bonds" to pay for undergrad. However, pharmacy school was a totally different ballgame. I was 100% responsible for paying for it, which meant federal student loans. I incurred approximately $132K in student debt upon graduation after 4 years, with about 80% of that spent on tuition only and the rest on living expenses. I went to an out of state school, but it wouldn't have mattered, since most graduate programs charge the same amount, regardless of where you reside.

Was it my choice? Yes. Could I have picked another course of study? Certainly. But I chose a career path that would make me totally self-sufficient in the long run and that would allow me to live the lifestyle I desired, while being fully capable of paying my student loans. The debt I incurred was an investment in my future -- and I'm happy to say that I'm glad I have it, because I would have never been able to simply work a side job and expect to put a dent in pharmacy school. I don't think that one should choose his/her educational goals solely based on the expense of obtaining them. However, I do think common sense should come into play when taking out student loans. If you will have the potential to make $35K annually, it's probably not the best idea to borrow $100K or expect to attend a super expensive school. Point being, if you question your ability to pay back loans starting after graduation, then you are taking out too much, regardless of where/how it's being spent. If this is the case, something's gotta give, and you should probably rethink either your course of study or college.

This is a bit of a side note, buuuuuutttt (uh-oh... soap box coming right up!! )... I think it's complete crap when someone says that they "couldn't" go into any field of study because they "couldn't afford to pay for it" -- this is a complete excuse. Almost NO ONE can afford to pay outright for college! Out of a class of 120 students, we had one student who was not taking out any loans (she was fortunate that her parents were paying). We are very lucky to live in a country that affords all of us the opportunity to take out federal student loans. And the decision to do nothing or to sell oneself short educationally based solely on the fear of student debt is bogus. That's a choice laced in excuses.

 

[rainwood]

I find it ironic that the author rejects the navel-gazing part of the accusation, but the article itself is really all about him, not his generation.

I do think it's harder to find work now than it was in the boom times. I also think it's harder now than in the previous down cycles that we boomers endured, but it's a matter of degree. Also, some of his facts are wrong. When my husband and I bought our condo in 1980, the mortgate rate was 14%. That's right, one-four. So housing wasn't cheaper. It was actually quite expensive, but we managed because we bought smaller places. Nobody had a walk-in closet or a master suite. In fact, I'd never seen a walk-in closet because no one I knew had one. We didn't need them because we didn't have the shoe, handbag, clothing obsession that sprang up somewhere along the way. It was a different time, but I don't think it was cheaper in real terms.

No one I knew in my boomer generation could afford to have a single-income household. Day care has always been expensive, relatively speaking, and the 70's and 80's and 90's were full of working mothers, the same as now. Maybe the author is going back to the WWII generation for the single-income thing, but houses were even smaller then. And everyone had one car so I'm not sure it was do-able for any reason other than people made thriftier choices with the money they had.

The one thing I do heartily agree on is that everyone in the U.S. should be entitled to affordable health care. The system we have in this country is both insane and seriously broken. I think most people have a choice about how much and how expensive they go for a college education, and that if someone picks a major or a school where they have to rack up serious debt, that is their choice and there's nothing wrong with it so long as they accept the responsibility that goes along with the benefit, as a number of the previous PS commenters have done. I don't think people have choices about whether they get sick or need treatment or would benefit from routine medical care and wellness visits. If I could change anything in this country, it would be the health care system. It's shameful.

 

[justginger]

I find it ironic that the author rejects the navel-gazing part of the accusation, but the article itself is really all about him, not his generation.

I do think it's harder to find work now than it was in the boom times. I also think it's harder now than in the previous down cycles that we boomers endured, but it's a matter of degree. Also, some of his facts are wrong. When my husband and I bought our condo in 1980, the mortgate rate was 14%. That's right, one-four. So housing wasn't cheaper. It was actually quite expensive, but we managed because we bought smaller places. Nobody had a walk-in closet or a master suite. In fact, I'd never seen a walk-in closet because no one I knew had one. We didn't need them because we didn't have the shoe, handbag, clothing obsession that sprang up somewhere along the way. It was a different time, but I don't think it was cheaper in real terms.

No one I knew in my boomer generation could afford to have a single-income household. Day care has always been expensive, relatively speaking, and the 70's and 80's and 90's were full of working mothers, the same as now. Maybe the author is going back to the WWII generation for the single-income thing, but houses were even smaller then. And everyone had one car so I'm not sure it was do-able for any reason other than people made thriftier choices with the money they had.

The one thing I do heartily agree on is that everyone in the U.S. should be entitled to affordable health care. The system we have in this country is both insane and seriously broken. I think most people have a choice about how much and how expensive they go for a college education, and that if someone picks a major or a school where they have to rack up serious debt, that is their choice and there's nothing wrong with it so long as they accept the responsibility that goes along with the benefit, as a number of the previous PS commenters have done. I don't think people have choices about whether they get sick or need treatment or would benefit from routine medical care and wellness visits. If I could change anything in this country, it would be the health care system. It's shameful.

I've been told that the interest rate in Australia during the 80s was close to 20%. Even at that high of a rate, a lower percent of one's fortnightly income went to paying the mortgage though, as housing was farrrrrrr cheaper (in terms of average house price: average income). I know that based on what I've been told by older Australian women, most of whom stayed home with their children, living on one income even 15 years ago was very much possible, perhaps even 'comfortable.' Now with the average house at $480,000 (and average rent hanging around $500/week), there's no way that would be possible - certainly not comfortable! Simple stats demonstrate that the cost of living in Australia is astronomical in comparison to what it was even in the 90s; it can't be debated. Thanks to that fact alone, kids are either a) moving out and incurring HUGE cost of living debts, or b) living at home with their parents until they're 30. Or older.

I don't think things are so dire in most place in the States though. Your average small town USA, like where I grew up, has a good supply of affordable housing, and cost of living may be higher than it used to be, but I don't think it's as severe as I see in Perth. Perhaps the big cities of the States are seeing the same thing though? Kids living at home for ages because they will simply sink in the current economy? I mean...you know it's bad when a coworker tells you their two-month electricity bill was over $600...(thankfully we converted to solar a few years ago). How in the world can fresh grads keep up with that sort of pricing?!

 

[rainwood]

Just Ginger, I can't speak for Australia. I can only talk about the U.S. Here the cost of housing has gone up, but that is due at least in part to the fact that houses keep getting bigger and bigger. It would be interesting to see the cost of U.S. housing per square foot over the decades on an inflation-adjusted basis. Many houses built in the 30's and 40's had 1100-1200 sq. feet and one bathroom. The average American home size has kept creeping up steadily over the decades. Very few new builds in the U.S. would even think of building a new single-family house with just one bathroom or two bedrooms. Or a one car garage. Maybe urban condos, but not single-family homes.

So the cost of housing has gone up and it would make sense that a larger percentage of income would be spent on housing if one was purchasing a larger percentage of house. And back in 1980, during the days of the 14% mortgage rate, the mortgage market required 10% down and the financed part couldn't exceed 2 1/2 times your annual income. So you couldn't spend a bigger percentage because you wouldn't be able to get a loan for it. That ratio got tossed out during the 2000's housing boom so I'm not surprised that people spent a greater percentage of their income on housing because they now could. Zero down and all that nonsense. And that's part of what got people into trouble. It turns out the old ratio made sense, and banks have now gone back to it.

So to say housing has gotten more expensive is true, but whether it's truly more expensive on an inflation and square footage adjusted basis or whether housing is more expensive because our tastes in housing have gotten more expensive is the real question. It would take a lot more detailed statistical analysis than I've seen. Anecdotally, I think that much of it is that our tastes have gotten more expensive. Bigger houses, replacing anything that seems "dated" even though it still works, then furnishing the whole place. It costs a lot of money to go bigger.

 

[nkarma]

This is directed to no one in particular, but something that I always find interesting about human nature is the whole process of thinking "If I can do it, anyone can" without even considering what circumstances in life got you there. If you come from a family of abuse, poverty, etc like 100 million people in the US do, then yeah you can't get there as easily. It's not a given that everyone has two stable educated parents, food everyday, physical safety, is a member of the majority population (white male) etc...

In regards to the college tuition discussion, in my state tuition has doubled every four years for the past 10 years, so it isn't even fair to compare my struggle to someone who was in school even two years later. My sister graduated college 3 years after me and the student loan interest rate soared during that time from 1.65% that I pay to her 5.X%.

 

[dragonfly411]

I'm only going to address the part highlighted. Not everyone has the luxury of going to an in-expensive college.

Why? Not trying to start an argument, I'm just genuinely curious. At least in the US, don't all states have either public schools or reciprocity with another state? Or can't someone go to a junior college for a couple of years to get the lower division stuff out of the way?

My step-niece just graduated high school. She lives in Anchorage and got a full scholarship to two of the public AK schools. She is choosing to pay (get loans for) to go to a public school in Southern California, where she will be paying high rent and out of state tuition. She is majoring in chemistry so there is a lot of potential to get a decent paying job. BUT, she plans on being a high school chemistry teacher. Nothing wrong with that, but everyone knows teachers don't make much, and she will have a huge amount of debt to deal with. Her parents' opinion is that she "deserves" the opportunity to get out of Alaska for a few years. Nothing wrong with wanting to live out of state, but there are costs associated with that choice.

AMC - I wish it were this simple. Some of us can't even readily afford the junior colleges anymore. My situation is somewhat unique, but also not. I cannot readily get loan loans because my credit is not the best. I dropped several classes as a youngster b/c I really didn't have a clue what I wanted or what I was doing. In return, the school system is punishing me by not giving me financial aid. Yes that is my fault, but at the same time, it's been nearly a decade and I have maintained an A-B grade average in the classes I HAVE taken since my return. But at 300-400 dollars a pop without books, I can only afford one, maybe two at a time, making me a lifelong part time student. I also have to work to pay to stay alive, and I am no luxury shopper. My clothes generally are bought on clearance, or at thrift stores. I eat whatever I can budget in for us to have under 100 a week. We have a home, with bills to pay for, and that is in the country. It would be stupid of us to pay rent when it is as much as a mortgage, so we aren't going to go back to renting just b/c of school. So I love the idealism of your thoughts, but they just aren't reality for those of us who are fighting to keep afloat and trying to make a better future for ourselves all at once. Sorry.

 

[justginger]

Just Ginger, I can't speak for Australia. I can only talk about the U.S. Here the cost of housing has gone up, but that is due at least in part to the fact that houses keep getting bigger and bigger. It would be interesting to see the cost of U.S. housing per square foot over the decades on an inflation-adjusted basis. Many houses built in the 30's and 40's had 1100-1200 sq. feet and one bathroom. The average American home size has kept creeping up steadily over the decades. Very few new builds in the U.S. would even think of building a new single-family house with just one bathroom or two bedrooms. Or a one car garage. Maybe urban condos, but not single-family homes.

So the cost of housing has gone up and it would make sense that a larger percentage of income would be spent on housing if one was purchasing a larger percentage of house. And back in 1980, during the days of the 14% mortgage rate, the mortgage market required 10% down and the financed part couldn't exceed 2 1/2 times your annual income. So you couldn't spend a bigger percentage because you wouldn't be able to get a loan for it. That ratio got tossed out during the 2000's housing boom so I'm not surprised that people spent a greater percentage of their income on housing because they now could. Zero down and all that nonsense. And that's part of what got people into trouble. It turns out the old ratio made sense, and banks have now gone back to it.

So to say housing has gotten more expensive is true, but whether it's truly more expensive on an inflation and square footage adjusted basis or whether housing is more expensive because our tastes in housing have gotten more expensive is the real question. It would take a lot more detailed statistical analysis than I've seen. Anecdotally, I think that much of it is that our tastes have gotten more expensive. Bigger houses, replacing anything that seems "dated" even though it still works, then furnishing the whole place. It costs a lot of money to go bigger.

You're definitely right about bigger houses! When DH and I were thinking about building, we started researching the process, builders, designs, etc. Our house now is something like 140 square meters, which is roughly 1500 square feet. The display homes are all about 320 square meters. Quite literally double our current home, plus an extra 30%! When you look at the pre-made blueprints, the smallest they even price is 240 square meters! People MUST have 4 bedrooms with walk-in closets (his AND hers), MUST have two full baths, plus another toilet, MUST have a double shower (some I've seen with two bathtubs!), MUST have a walk-in pantry, MUST have a 2.5 car garage, MUST have a theatre room, games room, formal lounge, and normal lounge, etc, etc, etc. I definitely hear you when it comes to the sprawling houses and ridiculous new home standards.

 

[JewelFreak]

Pretty angry guy. As Texasj says, he picked a field with tons of competition for fewer jobs & none very well paying, one in which many free-lancers contribute for next to nothing. He says he knew that. Then is mad because what he knew turns out to be true. My reaction: <shrug>. Put on your big boy pants & make some decisions and/or attitude adjustments. "Son he's helping to raise?" Does not sound like that son is the product of a marriage -- again, a choice he & the mother made. Fine, live with it, whatever your (ex-)relationship.

Life in the past always seems easier. Because we don't know how it really was. Housing was not cheaper relatively. When I was a kid in the 60s my father made about $35,000, fairly easily supporting a family of 4 kids, stay-at-home mom. We were far from rich, but comfortable. Social security withholding was 3%. Sales tax a percent or 2. Medical costs were less, but medicine could offer FAR less; any cancer a death sentence; my father died at 53 about 6 yrs before the 1st bypass surgery, which would have saved his life.

Now, STUFF voraciously eats income. We had 2 small TVs. One car that my mother used on Thursdays. One stereo. No computers, video games, fancy cameras, cable or satellite, notebooks, iPads, microwaves, cell phones & their accompanying bills. No designer clothes & shoes -- I doubt $200 - $300 - $400 athletic shoes existed. If we kids wanted our own car, we got a job after school & saved for an old beater, which we were proud to drive; few others had wheels.

Job security had a price. If the company transferred you, you moved, or looked for other employment. 3 jobs in a career meant you were a "job-hopper." You were promoted in time, when you knew the business & matured, not rocketing to the top because you were such a hot young genius who could easily leave the consequences of decisions behind for greener pastures.

I personally don't think the gov't owes us a good education or medical care. If they stayed out of the way, the smart people in this country would find much more affordable ways to make both available. Prosperity is NOT in our DNA; it's a product of the environment we create that rewards ingenuity & hard work. Yeah, hard work is demanding. When has it been anything else?

--- Laurie

 

[msop04]

This is directed to no one in particular, but something that I always find interesting about human nature is the whole process of thinking "If I can do it, anyone can" without even considering what circumstances in life got you there. If you come from a family of abuse, poverty, etc like 100 million people in the US do, then yeah you can't get there as easily. It's not a given that everyone has two stable educated parents, food everyday, physical safety, is a member of the majority population (white male) etc...

In regards to the college tuition discussion, in my state tuition has doubled every four years for the past 10 years, so it isn't even fair to compare my struggle to someone who was in school even two years later. My sister graduated college 3 years after me and the student loan interest rate soared during that time from 1.65% that I pay to her 5.X%.

Hi nkarma

I agree that each person's circumstances are different, and that it's not easy for everyone. And the whole, "if I can do it, everyone can" isn't true in a lot of things. Some don't (and never will) have the skill it takes to be a master artisan or professional cellist, some just don't have the mental capacity to be a mathematician or or surgeon... And in a perfect world, everyone would have two loving, educated, supportive married parents and come from a stable home environment with very few problems -- but obviously those people are few and far between. Having said that, it still doesn't change the fact that everyone has the opportunity for student financial aid (and I'm really speaking about the typical 18 year old fresh out of high school, not like the poster above who went back to school later in life...). It may not be super easy, but it's there for the taking... well... borrowing.

I feel you on the interest rate issue!! Although I was lucky enough to have consolidated and "locked-in" in 2003 when interest rates for student loans were at an all-time low, a good friend and colleague who graduated just 2 years after consolidated at more than twice that interest rate! It's pretty sad when my friend owed a couple thousand less than I did (so basically the same), but her loan payment is upwards of $1300/month!! That's about three times what mine are. Those who just so happened to graduate when rates were low were very lucky... others, not as lucky. I really think that the government needs to come up with some type of program to stablilize those rates for school loans.

I also feel that the amount of aid should be based on the earning potential of the program...

True story: A good friend of mine took out almost $100K in her four years in college (with her total "school debt" being about $22K). She's an elementary teacher making about $33K a year. She spent the extra money on a brand new car (which she absolutely didn't need), fun nights out with the girls, clothes, vacations, and anything else she wanted. She and her husband are literally living from paycheck to paycheck because of her bad choices, and she continually defaults on her student loans because sometimes the money just isn't there to pay them. This could have been prevented if the maximum loan amount was capped based on earning potential. Something should really be done.

 

[msop04]

Pretty angry guy. As Texasj says, he picked a field with tons of competition for fewer jobs & none very well paying, one in which many free-lancers contribute for next to nothing. He says he knew that. Then is mad because what he knew turns out to be true. My reaction: <shrug>. Put on your big boy pants & make some decisions and/or attitude adjustments. "Son he's helping to raise?" Does not sound like that son is the product of a marriage -- again, a choice he & the mother made. Fine, live with it, whatever your (ex-)relationship.

Life in the past always seems easier. Because we don't know how it really was.

Now, STUFF voraciously eats income. We had 2 small TVs. One car that my mother used on Thursdays. One stereo. No computers, video games, fancy cameras, cable or satellite, notebooks, iPads, microwaves, cell phones & their accompanying bills. No designer clothes & shoes -- I doubt $200 - $300 - $400 athletic shoes existed. If we kids wanted our own car, we got a job after school & saved for an old beater, which we were proud to drive; few others had wheels.

Job security had a price. If the company transferred you, you moved, or looked for other employment. 3 jobs in a career meant you were a "job-hopper." You were promoted in time, when you knew the business & matured, not rocketing to the top because you were such a hot young genius who could easily leave the consequences of decisions behind for greener pastures.

I personally don't think the gov't owes us a good education or medical care. If they stayed out of the way, the smart people in this country would find much more affordable ways to make both available. Prosperity is NOT in our DNA; it's a product of the environment we create that rewards ingenuity & hard work. Yeah, hard work is demanding. When has it been anything else?
--- Laurie

Laurie, you are soooooo right!!! Our attitudes have changed... we seem to be less thankful and more people feel a sense of entitlement than ever before. Until we can change our mindset, we will most likely be more and more unsatisfied/unhappy. Thank you for posting!

 

[ksinger]

Just Ginger, I can't speak for Australia. I can only talk about the U.S. Here the cost of housing has gone up, but that is due at least in part to the fact that houses keep getting bigger and bigger. It would be interesting to see the cost of U.S. housing per square foot over the decades on an inflation-adjusted basis. Many houses built in the 30's and 40's had 1100-1200 sq. feet and one bathroom. The average American home size has kept creeping up steadily over the decades. Very few new builds in the U.S. would even think of building a new single-family house with just one bathroom or two bedrooms. Or a one car garage. Maybe urban condos, but not single-family homes.

So the cost of housing has gone up and it would make sense that a larger percentage of income would be spent on housing if one was purchasing a larger percentage of house. And back in 1980, during the days of the 14% mortgage rate, the mortgage market required 10% down and the financed part couldn't exceed 2 1/2 times your annual income. So you couldn't spend a bigger percentage because you wouldn't be able to get a loan for it. That ratio got tossed out during the 2000's housing boom so I'm not surprised that people spent a greater percentage of their income on housing because they now could. Zero down and all that nonsense. And that's part of what got people into trouble. It turns out the old ratio made sense, and banks have now gone back to it.

So to say housing has gotten more expensive is true, but whether it's truly more expensive on an inflation and square footage adjusted basis or whether housing is more expensive because our tastes in housing have gotten more expensive is the real question. It would take a lot more detailed statistical analysis than I've seen. Anecdotally, I think that much of it is that our tastes have gotten more expensive. Bigger houses, replacing anything that seems "dated" even though it still works, then furnishing the whole place. It costs a lot of money to go bigger.

Ha. This.

Boomer here. I'm a bit younger from the sound of it, but my experiences are similar still. Yes on the high interest rates. I remember them well, even if I wasn't buying a house at that time. And when I finally did buy my own home, in 1998 before the financial world started feeding the populace poison in the form of insane loans with no requirements, I was approved for a loan up to a whopping 78,000. I nearly choked. I thought they were nuts for approving that for me - and that was done using the old formula, the one we've gone back to. I ended up buying one of those 1100 square foot homes with one bath and a one car garage, for a lot less than 78,000. It's a bit tight now that I'm married and we have the same vices, books and cooking, but we are less than 8000 away from payoff, due primarily to the fact that I didn't initially overbuy, and also that we did not "upgrade" when we married 5 years ago. And just to drive home how non-entitled I felt, and what a revelation it was, it never occurred to me that *I* could own my own home until about 3 months before I bought. Prior to that realization, it never even registered on my radar. But then I was raised by a single mother who - in spite of decades working for a bank - could not get a credit card for the longest time, because she wasn't married. Credit of any kind was not something I was exposed to growing up. How's that for a generational and SE difference?

 

[JewelFreak]

Laurie, you are soooooo right!!! Our attitudes have changed... we seem to be less thankful and more people feel a sense of entitlement than ever before. Until we can change our mindset, we will most likely be more and more unsatisfied/unhappy. Thank you for posting!

Thank you, msop. I didn't expect anybody would bother to read it all, but it sure felt good to write!

She and her husband are literally living from paycheck to paycheck because of her bad choices, and she continually defaults on her student loans because sometimes the money just isn't there to pay them. This could have been prevented if the maximum loan amount was capped based on earning potential. Something should really be done.

I have to disagree with you here. You cannot legislate against stupidity. Some of us will always have to learn the hard way -- "saving" people from the results of their mistakes is one reason we're in this mess: no lessons there.

--- Laurie

 

[ksinger]

Laurie, you are soooooo right!!! Our attitudes have changed... we seem to be less thankful and more people feel a sense of entitlement than ever before. Until we can change our mindset, we will most likely be more and more unsatisfied/unhappy. Thank you for posting!

Thank you, msop. I didn't expect anybody would bother to read it all, but it sure felt good to write!

She and her husband are literally living from paycheck to paycheck because of her bad choices, and she continually defaults on her student loans because sometimes the money just isn't there to pay them. This could have been prevented if the maximum loan amount was capped based on earning potential. Something should really be done.

I have to disagree with you here. You cannot legislate against stupidity. Some of us will always have to learn the hard way -- "saving" people from the results of their mistakes is one reason we're in this mess: no lessons there.

--- Laurie

We legislate against stupidity all the time. We don't let children make contracts, we don't let strangers take out life insurance policies on other strangers, and we have income criteria for the amount of mortgage one can get, what's so morally wrong with having something similar for student loans? This isn't about teaching lessons, it should be about the overall financial health of us all. It protects not only the stupid person to some degree, but the bank, and ultimately (since we've repeatedly been shown that bank solvency trumps all, even when they are culpable in causing the problem) the taxpayers, from having to foot the bill. I think it's not a bad idea.

 

[amc80]

amc80,

Are you referring to people who misuse student loans? Like those students who take out the max, knowing that they might have difficulty paying it back due to the going salaries of their chosen career after graduating? Or maybe those who take out a lot extra to buy a car or whatever??

I will have to disagree with you about having the option to choose a less expensive school. It totally depends on the course of study you are in.

I'm referring to people who say "hey, I know I could go to this less expensive school, but I'll just get loans and worry about it later." I've been there- when you are 18 "later" seems SO far away. And since your first job out of undergrad will easily pay $80k+ it won't be a problem, right?

Your situation is a bit different. Pharmacist make good livings. Enough to pay back loans. I'm talking about those who have other options available (readily available) and choose the more expensive option. College used to be where you go to get an education so you could get a good job. Now, it's an "experience." It's going abroad, taking 5-6 years to graduate, and being young and carefree. Was I the perfect college student? No. I definitely spent more money than I needed to. I was never a poor college student. I worked 32+ hours a week for the majority of my time there, so I could have done it without any loans. But I wanted to have fun and eat out and not be strapped for money all the time. But I still graduated with a double major in four years.

I know everyone has their own story. I know there are reasons why people make the choices they do. My main point is the author of that article needs to stop blaming everyone else for his situation.

 

[msop04]

amc80,

Are you referring to people who misuse student loans? Like those students who take out the max, knowing that they might have difficulty paying it back due to the going salaries of their chosen career after graduating? Or maybe those who take out a lot extra to buy a car or whatever??

I will have to disagree with you about having the option to choose a less expensive school. It totally depends on the course of study you are in.

I'm referring to people who say "hey, I know I could go to this less expensive school, but I'll just get loans and worry about it later." I've been there- when you are 18 "later" seems SO far away. And since your first job out of undergrad will easily pay $80k+ it won't be a problem, right?

Your situation is a bit different. Pharmacist make good livings. Enough to pay back loans. I'm talking about those who have other options available (readily available) and choose the more expensive option. College used to be where you go to get an education so you could get a good job. Now, it's an "experience." It's going abroad, taking 5-6 years to graduate, and being young and carefree. Was I the perfect college student? No. I definitely spent more money than I needed to. I was never a poor college student. I worked 32+ hours a week for the majority of my time there, so I could have done it without any loans. But I wanted to have fun and eat out and not be strapped for money all the time. But I still graduated with a double major in four years.

Ok, I gotcha -- that's what I thought you were talking about... and I agree with you. This is why I think that the max amount of student loans available should be regulated more and based the student's declared major/average earning potential. This way, our taxpayers won't be funding unnecessary things, such as free trips to Europe -- errr, I mean studying abroad -- for those who will not have the means to pay it back after the "fun" is over. In my opinion, this is a serious disservice -- it gives young adults the impression that they can just borrow, borrow, borrow for now and not have to be responsible for their financial situation later. As was mentioned above, it really is us, the taxpayers, who eventually pay the price.

My main point is the author of that article needs to stop blaming everyone else for his situation.

Amen, sister! Again, the mind set of entitlement and being "special."

 

[msop04]

Laurie, you are soooooo right!!! Our attitudes have changed... we seem to be less thankful and more people feel a sense of entitlement than ever before. Until we can change our mindset, we will most likely be more and more unsatisfied/unhappy. Thank you for posting!

Thank you, msop. I didn't expect anybody would bother to read it all, but it sure felt good to write!

She and her husband are literally living from paycheck to paycheck because of her bad choices, and she continually defaults on her student loans because sometimes the money just isn't there to pay them. This could have been prevented if the maximum loan amount was capped based on earning potential. Something should really be done.

I have to disagree with you here. You cannot legislate against stupidity. Some of us will always have to learn the hard way -- "saving" people from the results of their mistakes is one reason we're in this mess: no lessons there.

--- Laurie

We legislate against stupidity all the time. We don't let children make contracts, we don't let strangers take out life insurance policies on other strangers, and we have income criteria for the amount of mortgage one can get, what's so morally wrong with having something similar for student loans? This isn't about teaching lessons, it should be about the overall financial health of us all. It protects not only the stupid person to some degree, but the bank, and ultimately (since we've repeatedly been shown that bank solvency trumps all, even when they are culpable in causing the problem) the taxpayers, from having to foot the bill. I think it's not a bad idea.

I also think you can legislate against stupidity -- or at least make an effort to avoid it. This is exactly the same reason our country is having to pull itself out of the "housing situation." Our government decided that "everyone should be able to own a home" (which is definitely not true) and required banks to give home loans to anyone and everyone, regardless of the fact that most would not be able to make the payments. This led to the housing market nose-diving, repossessions, and foreclosures... Because our government wanted everyone to feel entitled, the home loan situation has done a total 180 -- it's is very hard to get a loan without having a huge down payment. This whole thing could have been avoided had our government not forced the banks to loan against their better judgment (which had worked pretty well before everyone "should be able to own a home").

 

[smitcompton]

Hi,

I think some of you are missing an important point. Its something that America is proud of. It an 'increase in the standard of living that has occurred in the 2oth century. Nothing to sneeze at in my book. In general the populace felt 2cars, 2 bathrooms, good central heat, all the comforts of home were a good thing. I'm with Alan Greenspan and want to call the yrs around 2000 as the "age of exuberance".

Credit cards, the availability of loans (easy credit) is one of the problems. All those handbags, clothes, designer stuff you all have could probably pay for your education,. I like having 2 bathrooms, but truthfully I grew up with 2 bathrooms(1950's)--house4 built in 30's/ The question now is can this be sustainable. His questions on GDP growth are interesting. Why not limit population growth so there are enough jobs for all who are here. Refuse to allow all these student loans. People who want something usually find a way.

I don't blame our writer for being mad. He works hard, he seems like a decent human being. He certainly doesn't want to be called a snowflake(Ilove the term) and entitled. The media and gov't spokesmen all use the word entitlement over and over again. The world has changed and they must also change, but they were taught , the same as you and me, that their prospects were good. Now they do realize that life is tougher out there than they had been led to believe. I would be mad too.


Annette

 

[JewelFreak]

This whole thing could have been avoided had our government not forced the banks to loan against their better judgment (which had worked pretty well before everyone "should be able to own a home").

Right. So, because you can get the money even though a little arithmetic tells you you'll not be able to repay it, you take it anyway -- and that's the government's fault? In my book, it's just dumb.

I negotiated the mortgage for our last house. One loan officer tried hard to sell me a balloon mortgage. Blah blah about the low payments for 10 years. "And then?" I asked. "Well, they get really big. Who cares what happens in ten years? You can move before then." A lot of people fell for that because they wanted to. Not because the gov't made them. Yes, that policy -- which is now reinstated btw -- is horrible. Ultimately, though, we are responsible for our own futures & 'No" is a useful word to be able to pronounce.

--- Laurie

 

[aviastar]

amc80,

Are you referring to people who misuse student loans? Like those students who take out the max, knowing that they might have difficulty paying it back due to the going salaries of their chosen career after graduating? Or maybe those who take out a lot extra to buy a car or whatever??

I will have to disagree with you about having the option to choose a less expensive school. It totally depends on the course of study you are in.

I'm referring to people who say "hey, I know I could go to this less expensive school, but I'll just get loans and worry about it later." I've been there- when you are 18 "later" seems SO far away. And since your first job out of undergrad will easily pay $80k+ it won't be a problem, right?

Your situation is a bit different. Pharmacist make good livings. Enough to pay back loans. I'm talking about those who have other options available (readily available) and choose the more expensive option. College used to be where you go to get an education so you could get a good job. Now, it's an "experience." It's going abroad, taking 5-6 years to graduate, and being young and carefree. Was I the perfect college student? No. I definitely spent more money than I needed to. I was never a poor college student. I worked 32+ hours a week for the majority of my time there, so I could have done it without any loans. But I wanted to have fun and eat out and not be strapped for money all the time. But I still graduated with a double major in four years.

Ok, I gotcha -- that's what I thought you were talking about... and I agree with you. This is why I think that the max amount of student loans available should be regulated more and based the student's declared major/average earning potential. This way, our taxpayers won't be funding unnecessary things, such as free trips to Europe -- errr, I mean studying abroad -- for those who will not have the means to pay it back after the "fun" is over. In my opinion, this is a serious disservice -- it gives young adults the impression that they can just borrow, borrow, borrow for now and not have to be responsible for their financial situation later. As was mentioned above, it really is us, the taxpayers, who eventually pay the price.

My main point is the author of that article needs to stop blaming everyone else for his situation.

Amen, sister! Again, the mind set of entitlement and being "special."

Majors change, people change, the market changes and earning potential, I've found, has much more to do with the person's drive than their actual major.

Why not simply pay the tuition? There are plenty of scholarships out there that you have to enroll, and then forward a copy of your tuition bill to the committee. They then make a payment towards your tuition and the rest is on you. So you're actual tuition is 10k a semester; you enroll, forward that to your loan officer and it gets paid. But what about books and living expenses? Well, how about a line item addendum for additional funds? No free trips to Europe, but no artificial boxes of future potential earning power either.