Continuing the seasonal back-to-school theme, two blogs recently addressed essentially the same question, namely are elite colleges worth the elite price?
Last week, Silicon Valley Blogger at The Digerati Life gave us a long and methodical discussion, complete with charts, Should You Invest In An Ivy League College Education? The post tees up the major issues, but stops short of presenting a definitive answer to its own question.
In contrast, Zac Bissonnette’s post at The Consumerist, 5 Reasons Why Every Single College Ranking Is a Pile of Crap, makes it clear where he stands. “A student’s success or failure in college and in life will ultimately be determined by who they are, not which college they attend.”
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The article is ominously entitled When Student Loans Live On After Death. And it begins, dramatically, thusly:
In July 2006, 25-year-old Christopher Bryski died.
His private student loans didn’t. Mr. Bryski’s family in Marlton, N.J., continues to make monthly payments on his loans—the result of a potentially costly loophole in the rules governing student lending.
And what, you may ask, is the nature of this hitherto obscure loophole that The Wall Street Journal heroically exposed this weekend? Turns out, if a loan has a cosigner, and the borrower dies, that cosigner is considered liable for the debt. This was a surprise to both Mr. Bryski’s father, who cosigned his student loans, and Mary Pilon, who wrote the article.
Are you freakin’ kidding me?
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I had not noticed this before, but apparently August is college textbook season. I guess that makes sense. School will start up in a month and college students are widely known for not leaving things to the last minute. Both SmartMoney and The New York Times’ Bucks blog came out with items on how to save on textbooks in the last 48 hours.
My first reaction to the focus on textbook costs is that it is misplaced. College is an expensive endeavor, and the price of textbooks does not help any, but let’s get real. It’s like worrying about the low gas mileage on a Ferrari. Double what you spend on books or eliminate it entirely and you’ll still graduate with essentially the same heap of debt.
Alas, this is yet another triumph of psychology over math. Textbooks, unlike tuition, are usually not financed, so the expenditure is more noticeable. Money not spent of books can be spent on Pizza. Further, my unscientific guess is that texts are more likely to be paid for out of the pocket of students, rather than by mom and dad.
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It is time to make another visit to the bounty of information that our nations’ intrepid polling companies gather for our enjoyment. I usually start these visits with a short proviso about how survey data about what people say to strangers who call them on the phone can’t hold 
a candle to data about what people actually do. Often I point out that survey respondents tend to be neither candid nor thoughtful in their responses.
Today I am going to skip all that. I will just give examples.
The Rich are Optimistic?
On July 12 Gallup found that Upper-Income Americans See Living Standards Improving. Depending on your outlook, that might have given you a sense of second order optimism, after all, those rich folks must know more than the rest of us, or perhaps bitterness of the-rich-just-get-richer sort.
In either case the feeling was likely short-lived because four days later The New York Times carried the front page headline Wealthy Reduce Buying in a Blow to the Recovery. The Times story was largely a compilation of anecdotes and quotes from assorted “analysts” who like to see their names in print. But the gist was that rich folks are pessimistic enough about the future to cut back on spending.
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Free Money Finance has a post this morning which is a riff on a quote from Dave Ramsey to the effect that the average college student graduates with 
$15,000 in debt, which is also about how much the average student spends by living off campus and not eating in the cafeteria.
The $15K figure is, at the very least, out of date. The quote was from Ramsey’s book, published in 2003, and he cites as his source a conversation he had “a couple of years ago.”
But it has a bigger flaw than that. This is one of those numbers where average should not be confused with typical. Strange but true, many college students graduate with no debt. Others graduate with many multiples of the average.
So I have a lot of trouble with the premise that there exists a big population of college students who would have graduated without any debt, had they not modestly improved their lifestyle by living off-campus. But for the sake of argument, let’s accept the premise at face value. Assume that a college student has borrowed $15K solely to live a little more comfortably, that is, for pizza, beer, and the like. Is that a bad thing?
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Continuing the seasonal back-to-school theme, two blogs recently addressed essentially the same question, namely are elite colleges worth the elite price?
College, PF Blogs | Frank Curmudgeon | 
August 24, 2010 11:59 am | 
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