# College Debt



## snickerd3 (Sep 17, 2008)

I just made my last payment on my school loans!!!! Other than the mortgage I am now debt free arty-smiley-048:


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## FLBuff PE (Sep 17, 2008)

Congrats!


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## StructuralPoke (Sep 17, 2008)

I was fortunate enough that my parents were able and willing to put me through


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## SSmith (Sep 17, 2008)

snickerd3 said:


> I just made my last payment on my school loans!!!! Other than the mortgage I am now debt free arty-smiley-048:


$23k. I'm planning on milking the tax deduction for as long as I can claim it. Even then, it doesn't usually make much financial sense to pay them off quickly if the rate is low. Mine are locked in tight at 4.5%. CDs were (before this week anyways) selling at 5.3%. So even if I weren't able to claim the tax deduction, I would still keep them around and buy CDs with the difference (in this case). Same argument would apply with the mortgage.


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## Katiebug (Sep 17, 2008)

I borrowed approx. $21K and haven't regretted a penny of it. My parents had to file for bankruptcy when I was a teen and I knew that my only options were to go to a state school (and get scholarships) or one of the service academies. They did what they could to help...I never left after a weekend visit without my mom slipping a $20 into my purse or my dad taking me to the supermarket and the packy and then paying the bill.

I got a full ride on tuition for 4 years, a "women in engineering" scholarship that covered my books every year, and room and board was paid for via federal student loans. My summer internships went for living expenses, gas, etc.

I consolidated my loans at the absurdly low interest rate of 2.125%. No way in hell am I paying those off early - I'm better off putting extra spare cash into retirement savings!


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## cement (Sep 17, 2008)

I paid my own way with loans, grants, work, etc.

We are fortunate to be able to pay for our kids, unless my daughter keeps looks at top dollar liberal arts schools :smileyballs:


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## DVINNY (Sep 17, 2008)

I answered zero, worked thru school, but the fact is, I worked for about 60% of it, and my parents paid about 40%.

They paid for my car insurance, and second semester tuition and rent each year. Every year I paid for my first semester tuition and rent, but I also earned my own money for bills each month, books, food, gym dues, gas, etc. etc.


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## SSmith (Sep 17, 2008)

Katiebug said:


> I consolidated my loans at the absurdly low interest rate of 2.125%.


Wow. Thats an incredible rate!


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## benbo (Sep 17, 2008)

SSmith said:


> $23k. I'm planning on milking the tax deduction for as long as I can claim it. Even then, it doesn't usually make much financial sense to pay them off quickly if the rate is low. Mine are locked in tight at 4.5%. CDs were (before this week anyways) selling at 5.3%. So even if I weren't able to claim the tax deduction, I would still keep them around and buy CDs with the difference (in this case). Same argument would apply with the mortgage.


Where are you finding CDs at 5.3% ? What length CD? Is that some sort of special deal for the military?


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## SSmith (Sep 17, 2008)

benbo said:


> Where are you finding CDs at 5.3% ? What length CD? Is that some sort of special deal for the military?


When I was looking at them about 2 weeks ago for 5 year CDs, I found that rate at PENFED. But now, the rates have dropped to 4.6% APY.


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## benbo (Sep 17, 2008)

SSmith said:


> When I was looking at them about 2 weeks ago for 5 year CDs, I found that rate at PENFED. But now, the rates have dropped to 4.6% APY.


Even that's pretty high out here in the civilian world. And 5 years is a little long for my taste - I'm just waiting for the market to settle. At my CU 6 month to one year rates ar a little under 4.


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## chaosiscash (Sep 18, 2008)

I got partial scholarships and worked for the rest. Fortunately, at the time, Clemson was reasonably priced for an in-state student. I did have to get one loan, however. Two weeks b/f my last semester started Clemson announced a tuition hike of $1000. Now it doesn't seem like that big of a deal, but at the time on the budget I was on it was huge. Luckily Dad came through with a loan, which I paid off by the end of the semester.


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## Katiebug (Sep 18, 2008)

SSmith said:


> Wow. Thats an incredible rate!


No kidding! I consolidated right after graduation. I got an even lower rate for allowing automatic debit of the payment and after I'd paid on time for a few years the rate dropped a quarter point to where it is now. The auto debit is a win-win; they know they'll get their payment and it ensures a perfect credit report for me.

One of the guys who I work with graduated only a year and a half after me, and he didn't consolidate - he pays around 7% on his loans but was paying 8% last year.

The downside is that I really have zero motivation to pay those loans off sooner.


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## roadwreck (Sep 18, 2008)

Katiebug said:


> The downside is that I really have zero motivation to pay those loans off sooner.


To me this is a key reason to just go get rid of them. When you start carrying debt around like that and justifying it b/c it is such a low rate you end up getting comfortable with carrying debt all the time, and that's just not for me. I too had a ridiculously low rate on my school loans when I graduated. I don't remember exactly what it was now, but it was somewhere in the low 2's. I paid them off within a year (CD's were also in the low 2's back then). I'd rather have that debt 'off the books' then try and play the interest rate game.

It may not be the plan that makes the most sense mathematically, but it sure feels good being debt free (well, except for the house, but I'm working on that).


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## kevo_55 (Sep 18, 2008)

When I graduated I was at about $26k. I took out as big goverment loans as I could and then my parents paid the rest. I think I'm due to be done with my school loans in 2011. I did the consolidate and auto deduction thing myself. I think I'm at about a 3% or 3.25% for an intrest rate.


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## chaosiscash (Sep 18, 2008)

roadwreck said:


> To me this is a key reason to just go get rid of them. When you start carrying debt around like that and justifying it b/c it is such a low rate you end up getting comfortable with carrying debt all the time, and that's just not for me. I too had a ridiculously low rate on my school loans when I graduated. I don't remember exactly what it was now, but it was somewhere in the low 2's. I paid them off within a year (CD's were also in the low 2's back then). I'd rather have that debt 'off the books' then try and play the interest rate game.
> It may not be the plan that makes the most sense mathematically, but it sure feels good being debt free (well, except for the house, but I'm working on that).


I detect a drinker of the Dave Ramsey Kool-aid. (Not that there's anything wrong with that.)


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## Capt Worley PE (Sep 18, 2008)

I was lucky, partial scholarship and parents paid the rest of tuition. I paid for books and incidentals. I went to a local state college so I could live at home and heep expenses low.

Kinda helped my parents out, too because they got used to spending the tuition money. When I completed college, they put what they were spending on tuition into a 401(k). Same deal with my sister's tuition spending.


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## RIP - VTEnviro (Sep 18, 2008)

I got a half tuition scholarship and lived at home, so I was able to go to a private school rather than one of the state schools.

My folks were up front with me. They said its your education and you are going to pay for some of it. They took the minimum federal stafford loan each year. Ended up owing $19k. It's down to about $5k now. Once my car is paid off in the spring the extra money is going toward that.

I worked my way through grad school and got half tuition reimbursement through work. Didn't owe anything on my masters.


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## roadwreck (Sep 18, 2008)

chaosiscash said:


> I detect a drinker of the Dave Ramsey Kool-aid. (Not that there's anything wrong with that.)


actually, I was a follower of most of what he preaches before I ever heard of him. But I like what he has to say and think more people should give it a try.


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## Chucktown PE (Sep 18, 2008)

I had some scholarships and my parents paid for the rest. I think it ended up being around $3000 a year for a state school. Clemson paid me $18,000 a year for a research assistantship while I was working on my master’s degree, which, at the time felt like a ton of money. My parents always said (I guess they read this somewhere) that one of the greatest gifts you can give your children is to have them graduate from college with no debt. My parents had saved about $35000 for my college fund and since I only used $12k to $15k they gave me what was left over for a down payment on a house. I didn’t use it on the house, instead I have it in an investment account and my plan is to do the same for my children one day with that money. If my calculations are correct it should cover the bill.


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## Supe (Sep 18, 2008)

Some scholarships and parents paid the rest. Even though I transferred schools and took 5 years because I lost some credits in there, I think they were still happy since two years tuition at the second school was cheaper than one years tuition at the first!


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## C-Dog (Sep 18, 2008)

I was somewhat lucky. Parents paid the first 3 years in comination with a scholarship in my 3rd year that basically bought my books, then when my father passed away, my 4th and 5th years were a combination of loans, mama C-Dog, small scholarship, and financial aid. At the end I had somewhere around $12k in loans.


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## wilheldp_PE (Sep 18, 2008)

The deal with my parents was that we (my sister and I) got a college education and our first car, then we were on our own. It has worked out well for them (they made an engineer and a lawyer), so now they don't have to support us for the rest of our lives, and we can afford to put them in a good home with lots of good drugs (per dad's request).


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## RIP - VTEnviro (Sep 18, 2008)

^ That's an interesting way to look at it too. I'm kind of experiencing that now to an extent as far as 'giving back' to my folks.

My parents were making good money while I was in college and helped me as much as they felt they could/should. They wanted me to pay for some of it (about 1 year's worth) in part to teach me some responsibility financially and to have a more vested interest in doing well, since it was in part my money.

I'm lucky with the timing of the way things worked. A year after I graduated my Dad lost his good paying job. He was very specialized and never found anything that came remotely close to what he was making at his old job.

Then a couple months back he got real sick and found out he's got late stage cancer. His prognosis is neither dire nor rosy, but odds are he will be on disability from here on in. My wife and I are in a position where we can help a little bit and it's in no small part because of what they invested in my education.


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## ktulu (Sep 18, 2008)

I think I started with close to 13K. I ahve it down to just over 4K. I was doubling up payments while single, so it was dropping fast.

But with Mackenzie, I have been diverting some money towards taking care of her, but I will soon be paying off other things to be able to start paying the loans again.

I also went through the Co-Op program, so that put some extra money in my pocket.


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## benbo (Sep 18, 2008)

THe first two years I went to UCSD (in 1974) my parents paid for most of it, and I got a $2K loan. At the third year I decided I didn't want to show my parents my grades anymore, and as a result they decided they wouldn't pay anymore. I was already working as an Engineering student at Hughes Aircraft, so they paid for part of it and I took another $4K loan. Well, as you might have guessed by my reluctance to show my parents my grades, I dropped out after the third year (with actually less than a year to go) :smileyballs:

When I finally went back I changed my major from Physics to EE so basically had to do a full two years more, which I paid myself. All my schools were pretty cheap luckily.

It actually took me about 10 years to pay back that minimal loan. I was not very responsible in my reckless youth.


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## snickerd3 (Sep 18, 2008)

I tended to follow the same train of thought as Roadwreck. Although now I have to find a different answer for the When are you having kids question.

My husbands parents paid for everything for him. For me, it was either I borrow $ or my parents borrow $ and I wasn't going to let them take on debt so I could go to school. I had a couple scholarships (one time deals) the first year and used up my life savings. From then on out it was loans and I got a job to pay for the little things like eating out and entertainment.


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## TouchDown (Sep 18, 2008)

I ended up having about $25k in loans, I owned $17k and my parents owned another $8k. When my Dad passed away, the wiped away their debt (not sure if it always happens that way?).

I paid back the $17k in the first year out of college. I lived in a one bedroom apt (crackerbox), and was pretty good with my money. Also saved up for a $5k engagement ring that I paid for in cash.

** edit - forgot, my grandma passed away that year also, and I got $5k from her, that I put on the school loan, so I only really saved/repaid $12k that year.

I waited to buy a new car until all that was taken care of.


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## TXengrChickPE (Sep 18, 2008)

I got screwed over pretty bad by my folks... but my in-laws were awesome!

My parents make pretty good money, and always have... but they always complained about money... and I honestly thought we were poor. They always said stuff like "We're not going to be reduced to eating dog food just to put you kids through school!" and I believed it.

So, my parents forged my signature on loan applications during my first 2 years of college... meanwhile, I was working 40hrs/week to pay for everything. Halfway through my sophomore year, I decided that I would take out some loans for the following year. I was struggling with trying to work full-time and go to school full-time... and Junior year was known for being tough. That's when I found out that "I" had already borrowed over 10 grand! At that point, I thought that there was nothing I could do about it... as it turned out, I could have had them arrested and pressed charges... but I didn't know that at the time. Also, I was still trying to maintain a relationship with them, so I probably wouldn't have pressed charges anyway.

I took out more loans, but kept working in an effort to keep my total debt to a minimum. At the same time, they were claiming me as a dependent on their taxes... and I was filing my own tax returns... We all eventually got audited, and they had to pay a bunch of back-taxes. Luckily, I had all of my pay-stubs from my college jobs... and the university had records of all the payments I had made to them... so it very quickly became obvious to the auditor that I was NOT being supported by them.

By my 4th year of school, I was not doing well financially at all. I was still working full-time but I kept having classes that required a LOT of expensive materials and supplies... Then I got really sick (Salmonella poisoning from the pet store I was working at) and couldn't work for almost 2 weeks. My final tuition payment was due, and I was nowhere near able to pay it. My hubby (then boyfriend) talked to his mom and she lent me $1500, interest free, no payments for 5 years.

My 5th (and final!) year was when I got pregnant and had my daughter. By then, hubby (then fiance) was a grad student AND working full-time. We still had to take loans out for my tuition...

By the time we both finished, we had a combined debt of almost $60,000, about half of which was mine (and 10 grand of that was what my parents stole from me). We consolidated as soon as we got married and are a couple of years away from paying them off. We proudly drink the Dave Ramsey kool-aid... we WILL be debt free as soon as humanly possible.

My goal is to be able to pay for my kids tuition and room and board... but they will be expected to have part-time jobs (or their own savings) to pay for "extras". I never want my kids to have to wonder if they'll be able to work enough over-time to be able to make their tuition payment.


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## Slugger926 (Sep 18, 2008)

TXengrChickPE said:


> My goal is to be able to pay for my kids tuition and room and board... but they will be expected to have part-time jobs (or their own savings) to pay for "extras". I never want my kids to have to wonder if they'll be able to work enough over-time to be able to make their tuition payment.


As long as we (siblings) were in school, my parents wouldn't let us work except for varsity sports. During the summers, they had 2 or 3 jobs lined out for us for spending money for the year. The only debt I had to pick up was for my final (7th) year thanks to baseball delaying graduation. I was only out $10K.

My wife went to ORU, and was out more than $80K.

We hope our kids won't have to pay for school if our college savings plan works.


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## Capt Worley PE (Sep 19, 2008)

TX, that was quite a tale there.

Jeez, summer jobs. I used to work as a lifeguard and bush-hogged fields during summer breaks. I thought I was in high cotton.


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## chaosiscash (Sep 19, 2008)

Tx, that story sounds pretty similar to my wife's. Except her parents chose to run up credit cards in her name. When she graduated she had about 60k in debt. Thats now down to under 10k, and thats all student loans at a low, locked rate. And her credit rating, while not outstanding, is much higher than it was 5 years ago. I'm not sure how people can do something like that to their kids and then look themselves in the mirror.

I'm glad that things are working out for you now. Sounds like you've got some cool in-laws.


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## MA_PE (Sep 19, 2008)

wow. I can't beieve that parents would actually screw over thier kids like that.

We're hoping to cover my kids education. My father died young but my mother (with social security from my dad) covered my and my brother's tuition. I'd hope to do at least the same, but given today's economy and my wife's historical casual attittude with money, I don't think the kids will get through undergrad without some loans. It is what it is.

I keep pressing them to make wise fiscal decisions about schools and careers and potential payback. I find it troubling that someone will spend $40k a year ($160k for the BA) at a good school with the aspirations of being a social worker.


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## RIP - VTEnviro (Sep 19, 2008)

^ Ding, ding, ding! We have a winner.

I've got a friend who got her undergrad at Dartmouth then a masters at some school in Boston and is now a social worker at a not for profit complaining how she makes $30k a year.


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## Supe (Sep 19, 2008)

Some of these parents are definitely crooked.

My girlfriend's mother worked in daycare at the college, so her daughters went for free. She was then filing the FAFSA for the both of them, and getting paid for them to go to school. She also has a younger brother, so the mother lives with the boyfriend but refuses to marry him because of the alimony payments, so she sits there buying jewelry off the TV all day why the father busts his ass to take care of a wife and four kids.


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## FusionWhite (Sep 19, 2008)

I was at 25k when school was all said and done. Ive paid it down under 20k so far. I worked about 30 hours a week while in school and the Stafford Loan money paid for books and tuition and if I was strapped for cash I took out a little extra to pay off some bills.


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## Guest (Sep 19, 2008)

Wow tx ... that is absolutely horrible!

I have a lot of money wrapped up in student loans but at a fixed interest rate of 2.25%, I am not sweating it. 

JR


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## Katiebug (Sep 19, 2008)

roadwreck said:


> To me this is a key reason to just go get rid of them. When you start carrying debt around like that and justifying it b/c it is such a low rate you end up getting comfortable with carrying debt all the time, and that's just not for me. I too had a ridiculously low rate on my school loans when I graduated. I don't remember exactly what it was now, but it was somewhere in the low 2's. I paid them off within a year (CD's were also in the low 2's back then). I'd rather have that debt 'off the books' then try and play the interest rate game.
> It may not be the plan that makes the most sense mathematically, but it sure feels good being debt free (well, except for the house, but I'm working on that).


A fellow Dave Ramsey follower. 

I know I _should_ want to get rid of the student loans, but they don't hurt in the wallet like a credit card would. Mr. Bug and I paid off around $12K in credit card debt, two car loans, and cashflowed tuition (for him) and it took us a year - a year that wasn't a lot of fun. We decided to take a break from debt elimination now that we're down to the mortgage and my student loan.

I'm sure I'll get back at it eventually, but it's super-hard to justify in my own head why I should put us into another few years of deprivation (no vacations, no fun weekend trips, no eating out) just to get rid of it.


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## roadwreck (Sep 19, 2008)

Katiebug said:


> I'm sure I'll get back at it eventually, but it's super-hard to justify in my own head why I should put us into another few years of deprivation (no vacations, no fun weekend trips, no eating out) just to get rid of it.


because once your done you never have to worry about that debt hanging over you and you can take vacations and eat out all you want


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## maryannette (Sep 19, 2008)

TX, congratulations on doing whatever it took to stay and get your degree. My situation (a long time ago) was not nearly as bad, but I used it as an excuse to quit. My parents (with 8 children) did everything they could to add to the grants and financial aid I got. Financial situation was very difficult. I bailed out after 3 years, with the plan to work for a year, then finish. Never happened. I know how easy it is to give up. You are tough for sticking it out. And you have a great family-in-law!

My older daughter is finishing one (1) class that she needs for her degree. She was supposed to graduate in May, but had a schedule problem for the class because she changed majors. We've always told her that we would do everything possible to give her 4 years of college. (Okay, 4 1/2 if that's what it takes.) The younger one will start college next fall. Same deal for her.


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## Guest (Sep 19, 2008)

Katiebug said:


> I'm sure I'll get back at it eventually, but it's super-hard to justify in my own head why I should put us into another few years of deprivation (no vacations, no fun weekend trips, no eating out) just to get rid of it.


That's exactly how I look at it as well.

There is a principle of economics known as the Satisficing Theory that states that business (and people for that matter) make decisions based on adequately addressing their needs rather than optimally addressing their needs.

In this case, I would say satisficing IS the way to go because the intrinsic value of those vacations and creature comforts is not HURTING you .. only leading to a sub-optimal paydown of your debt. IMHO, that isn't a bad thing. 

:2cents:

JR


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## TXengrChickPE (Sep 19, 2008)

mary said:


> TX, congratulations on doing whatever it took to stay and get your degree. My situation (a long time ago) was not nearly as bad, but I used it as an excuse to quit. My parents (with 8 children) did everything they could to add to the grants and financial aid I got. Financial situation was very difficult. I bailed out after 3 years, with the plan to work for a year, then finish. Never happened. I know how easy it is to give up. You are tough for sticking it out. And you have a great family-in-law!
> My older daughter is finishing one (1) class that she needs for her degree. She was supposed to graduate in May, but had a schedule problem for the class because she changed majors. We've always told her that we would do everything possible to give her 4 years of college. (Okay, 4 1/2 if that's what it takes.) The younger one will start college next fall. Same deal for her.


I know my family-in-law is pretty great... especially when compared to my parents! I was on the verge of dropping out before they gave me that loan. My parents basically said that it was my fault for not planning well (and refused to help me out)... the in-laws said that everybody has a rough spot here and there. What's kind of funny is that when the loan finally came due, we easily wrote the check for $1500. By that point, it didn't seem like that much money. But, at the time, it was HUGE.


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## SSmith (Sep 19, 2008)

roadwreck said:


> because once your done you never have to worry about that debt hanging over you and you can take vacations and eat out all you want


So would you prefer to have $0 debt with $0 in the bank, or $20,000 in debt with $20,000 in the bank? For me the answer it is easy, Im just curious what the Ramseyites would pick.


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## SSmith (Sep 19, 2008)

SapperPE said:


> I'd rather have $1000.00 in the bank and $1000.00 of debt, with a plan to pay off the debt as soon as possible. Then my next goal would be to have $20,000.00 in the bank with $0.00 in debt. That's Ramsey for you.


That wasn't an option. Its my game, I make up the rules.


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## Enginnneeer (Sep 20, 2008)

TXengrChickPE said:


> I got screwed over pretty bad by my folks... but my in-laws were awesome!
> My parents make pretty good money, and always have... but they always complained about money... and I honestly thought we were poor. They always said stuff like "We're not going to be reduced to eating dog food just to put you kids through school!" and I believed it.


You have awesome in laws Tx. No interest loan from them was definitely a gift and lowered the stressful situation at the time. I am sure they help with their grandkids when needed. and when I was younger my parents had me believing we were poorer than we were. They covered college which was a great gift.



SapperPE said:


> I'd rather have $1000.00 in the bank and $1000.00 of debt, with a plan to pay off the debt as soon as possible. Then my next goal would be to have $20,000.00 in the bank with $0.00 in debt. That's Ramsey for you.


Its good advice except I havent really heard of Ramsey (and no I dont think I live in a cave). I know his stuff now.

I think it would be great to give the kids their education. I like the 529s since its tax free. Put a few in $1k in a year along with the 401k/roth plans. Once you start doing it you really dont miss the money (unless youre at a stop light in front of that cool new BMW or Acura you wanted instead settling for the new honda or toyota, sux. except they are in debt not you).


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## roadwreck (Sep 20, 2008)

SSmith said:


> So would you prefer to have $0 debt with $0 in the bank, or $20,000 in debt with $20,000 in the bank? For me the answer it is easy, Im just curious what the Ramseyites would pick.


Well, Ramsey says you're supposed to have an emergency fund of $1000 while you're paying of your debt, so no you should never have $0 in the bank.

so I guess the answer to that question would be $1000 in the bank with $1000 in debt.

I'd actually never heard of Ramsey until recently, and I was already out of debt when I did hear about him. So I personally never followed his plan. But I like his advice and think more people should make it a goal of theirs to be out of debt.


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## SSmith (Sep 20, 2008)

Alright let me rework this so I can get people to answer. Which situation would the Ramseyites choose?

Situation 1:

Day 1: $1,000 in bank with $0 debt.

Day 2: $1,000 car repair on sole transportation vehicle for family with no option but to repair.

Day 3: $0 in bank with $0 in debt.

Situation 2:

Day 1: $21,000 in bank with $20,000 debt.

Day 2: $1,000 car repair on sole transportation vehicle for family with no option but to repair.

Day 3: $20,000 in bank with $20,000 in debt.


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## TXengrChickPE (Sep 20, 2008)

I think situation #1 is still the better option. Also, as soon as Ramseyites get to $0 debt, they are supposed to start their 2-3 month emergency fund... so there would really only be a very short period of time that a Ramseyite would be at the $1000/$0 situation.

Also, we are Ramseyites... but we have 2 credit cards that have large "available" credits, so if anything came up that went beyond the $1000 emergency fund, we could do it. Granted, we'd be going backwards... but we won't be canceling those lines of credit until we have the 3mo fund set up...


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## roadwreck (Sep 20, 2008)

SSmith,

The math says you should play the interest rate game, but I promise you there is more to finances then math. You would not believe how things start to turn in your favor once you get to the point where you decide debt is not for you. I'm 28, I have zero debt beyond my house. I fully fund my retirement *and* I pay 150% on my mortgage. I have money in the bank (car repairs don't scare me -- in fact if need be I could go but a new one tomorrow) and it feels great. I had never heard of Dave Ramsey before I started on this path, but I fully endorse what he preaches. There is nothing better then being financially secure, you live smarter, you feel happier, and the stress of keeping up with payments is gone.

It's a lot of work, but I really think it's worth it.


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## SSmith (Sep 20, 2008)

How is having $20,000 in the bank and $20,000 in debt not financially secure? BTW I fully fund my retirement + ROTH and have 6 month savings for emergency. So just curious how having debt + money in the bank is less secure than someone who has no debt and no (or little) money in the bank.



roadwreck said:


> SSmith,
> The math says you should play the interest rate game, but I promise you there is more to finances then math. You would not believe how things start to turn in your favor once you get to the point where you decide debt is not for you. I'm 28, I have zero debt beyond my house. I fully fund my retirement *and* I pay 150% on my mortgage. I have money in the bank (car repairs don't scare me -- in fact if need be I could go but a new one tomorrow) and it feels great. I had never heard of Dave Ramsey before I started on this path, but I fully endorse what he preaches.


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## roadwreck (Sep 20, 2008)

SSmith said:


> How is having $20,000 in the bank and $20,000 in debt not financially secure? BTW I fully fund my retirement + ROTH and have 6 month savings for emergency. So just curious how having debt + money in the bank is less secure than someone who has no debt and no (or little) money in the bank.



I'm not saying it's not, but having $20,000 in the bank and no debt, plus a fully funded retirement and 6 months of savings for emergencies is better.


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## benbo (Sep 21, 2008)

SSmith said:


> Alright let me rework this so I can get people to answer. Which situation would the Ramseyites choose?
> Situation 1:
> 
> Day 1: $1,000 in bank with $0 debt.
> ...


Everyone is different, and some of it depends on your personality, your job security, etc. Some people just cannot stand to have any debt at all. My sister is like that, she is a total miser and is fairly comfortable financially. But she is such a miser that when my mom left us a rather substantial amount of money, she refused to hire a tax person and wanted to "copy" our tax returns. Of course that's just her.

I have zero debt, and I'd like to stay here. I am not very disciplined, and could very easily build up a substantial debt. I wouldn't want to take the risk of getting in much debt because I could always probably find a way not to pay it down and end up losing money.

That said, I think the logical choice depends on how much interest you are paying and how much interest you are receiving. If I had 20K in some sort of investment earning me 8%, and I had 20K that I could consistently keep at a guaranteed 2% interest level, it would just not be logical to use the 20K savings to pay the 20K debt. Assuming I was disciplined enough and paid enough attention to everything. But I'm not. Right now, with all the credit card offers I keep getting, I could probably get 30-50K right now for 6 months at a 0% interest rate, and I could probably find a 6 month CD somewhere that would give me around 4%. But no way would I do it. I don't trust myself to pay it back on time.

A lot of people become millionaires through careful saving and no debt, through the power of compound interest. But not many people become billionaires without taking on some risk and that includes debt.


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## SSmith (Sep 21, 2008)

I guess I cant really relate to debt controlling people. Ive always viewed it as a tool. It got me through school. It got me 2 houses now. I meticulously track where every penny in our budget goes. Maximize the use of our credit cards to get another 2% reduction. Pay card off monthly. And have good amount of money in the bank. But I also have debt that I am choosing not to pay off that I could. Its never kept me up at night and its never driven any of our life's decisions.

I suppose my perception of risk is different than those who have chimed in.


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## Guest (Sep 21, 2008)

SSmith said:


> I guess I cant really relate to debt controlling people. Ive always viewed it as a tool. It got me through school. It got me 2 houses now. I meticulously track where every penny in our budget goes. Maximize the use of our credit cards to get another 2% reduction. Pay card off monthly. And have good amount of money in the bank. But I also have debt that I am choosing not to pay off that I could. Its never kept me up at night and its never driven any of our life's decisions.


Agreed. I look at it as a tool to manage my expenses because I have had some nasty things get hurled at me including (as of recent) and rather ugly divorce. I am going to end up taking some major bites out of the shit sandwich but I will have mechanisms to control my financial hemorrage. I would only add that there are others who find themselves in similar circumstances that may not choose to pay down their debt for similar reasons ...



SSmith said:


> I suppose my perception of risk is different than those who have chimed in.


Engineers, in general are risk adverse, so it is not surprising that perceptions or views of risk would be different. 

However, I have to wonder, why in the fuck are you thinking about risk/reward at 2 AM ??!!! :laugh:

JR


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## TXengrChickPE (Sep 21, 2008)

We learned the hard way that we are not good at meticulously tracking every penny... we would get credit cards with the intention of paying it off every month... then "something" would come up and we wouldn't pay it off that month... which made it harder to pay it off the following month...


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## Katiebug (Sep 21, 2008)

SSmith said:


> So would you prefer to have $0 debt with $0 in the bank, or $20,000 in debt with $20,000 in the bank? For me the answer it is easy, Im just curious what the Ramseyites would pick.


Ramsey says you'd have $1000 in the bank and throw the other $19,000 at the debt, so you'd have $1000 in the bank and $1000 in debt if you started off with $20K in debt and $20K in cash to play with.

Ramsey's plan is pretty simple - get $1000 in the bank for an emergency, throw all extra money at non-mortgage debts, when those are eliminated, throw all extra money towards building a 3-6 month emergency fund, save 15% of gross income for retirement, save for kids' education, pay off the mortgage (in that order). It's very sensible, in my opinion, which is why we followed it to an extent.

We were very intense with the process and got rid of a LOT of consumer debt - credit cards, two car loans, furniture financing, medical debt. It was a lean 2 years, though. Honestly, it wasn't much fun (nor is it meant to be). We decided that moving forward it's more important for us to also save for some fun things, and to build a little more "fun" into our budget. We'd rather take a $1200 vacation every year than put $1200 towards my student loan or the mortgage.

It is awesome to only have a mortgage and my student loan as debt. It felt great to get rid of all of that other debt, but we can't go on in that mode for another year (which is how long it'd take to get rid of the student loan). Emotionally, we need to start putting some money aside for much-needed renovations and home improvements, and putting money aside for when we have a baby. And we need to start spending money on us. Ramsey's motto is to "Live like no one else, so later you can live like no one else" - i.e. sacrifice now to win later. That's true, but living the next decade or two in a spartan lifestyle is not my idea of a good time either.

We're focused more on balance these days...to each their own, though!


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## Capt Worley PE (Sep 22, 2008)

I guess I'm going to have to Google Dave Ramsey....


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## FINK_RB_PE (Sep 22, 2008)

The main factor with the Ramsey plan in cash flow. Usually the people that call in are in a dire situation, but to the average person, the less you have to make to survive, the better you will be able to fund retirement, emergency fund, etc. so that when a problem arises you do not have to put everything on hold, you just pay for it. I started to follow the Ramsey method about 18 months ago and the only debt left is my house and my wife's student loans and I can not explain how good it feels not to have to write those checks every month, the peace of mind by far out weighs the small difference in interest.


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## SSmith (Sep 22, 2008)

I have several big problems with Ramsey. I used to listen each day while I was working on my MBA. I had to stop listening after I realized just how empty his show is. I'm glad that some people find value in his products. I was just really surprised there were so many here. It seems like most of the stuff he covers would have been covered at length in some Engineering Economics class (if not Finance) that is a part of most curriculum.

Here's my beef:

1. His path isn't the most efficient way to pay off debt. He recommends sorting your debt from least amount to most. You pay all the minimums, and then throw what you have extra at the smallest amount. According to his plan, if I have a 0% BT on a credit card for $1000 and $1001 at 100% for my bookie, I should put everything towards paying off the 0% and then focus on the 100% interest debt. Anyone see the problem here (besides gambling)?

2. He _trains_ people his method for finance, but doesn't _educate_ people about finance at all. First of all, anyone that calls his show is already admitting a lack of mastery of personal finances. But instead of educating that people that need most to know about financial concepts and how to apply them, all he does it repeat his rules over and over all the while pushing his books.

3. He says he has a heart of a teacher. Thats just marketing because truthfully he has a heart of a salesman. Just count the number of times he plugs FPU, his website, or his books/tapes in a segment. Its sickening. If he was really interested in teaching, he would make an earnest attempt to educate people instead of preconditioning them into buying his products to solve their financial issues.

4. Its absolutely disgusting how he panders to the religious community by relating financial responsibility with religious obligations. Finance is an mathematical matter, not a superstitious one. Any attempt to combine the 2 is at best misrepresenting the content to generate sales through the local 10% admission clubs.

The proverbial horse is dead.

And it has been kicked.


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## Dleg (Sep 22, 2008)

I am fortunate that my parents paid for most of my education (at a State school), along with a childless uncle of mine, but I also worked full time through every break, and part time through two years of high school to help pay for it, though my contributions were pretty minimal (minimum wage back then was $3.25?).

My kids, on the other hand, are most certainly going to need loans to make it to college. It's a different world today, I'm afraid.


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## Casey (Sep 22, 2008)

Capt Worley PE said:


> I guess I'm going to have to Google Dave Ramsey....


I hear he makes some good kool-aid.


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## Enginnneeer (Sep 22, 2008)

Dleg said:


> (minimum wage back then was $3.25?).


$3.25! This reminds me of hearing about the sliderule from a coworker.


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## ramicoce (Sep 23, 2008)

We've never had much, if any debt (now it's just the house, and we're knocking that out), but we still consider ourselves Ramseyites except on the credit card issue. We have one card that we have available for emergencies (like my $1400 car repair last December) and online purchases (solely because I can't build up the trust to use my check card). The point of getting rid of the card is to make it less likely that you'll spend money (it's a lot easier to pull out the card than part with cash), but if you don't use it and/or it's not easily available, I figured it's not an issue.

Ramsey's point of paying off your debts goes beyond just the numbers; it's a state-of-mind, a mental thing, a way of life. If you stop accepting debt as part of your financial plan, you'll have greater control over your finances. You'll stop paying interest to someone else, which is always great, but you'll also instinctively avoid impulse purchasing and buying things you don't really need and/or can't readily afford. Plus, without the required monthly payment out, every penny coming in goes to savings, building that uncommitted pile much quicker and making early retirement more and more likely.


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## ramicoce (Sep 23, 2008)

Capt Worley PE said:


> I guess I'm going to have to Google Dave Ramsey....


You can podcast the first hour of his daily show for free. Just look it up in iTunes/Zune or check out his website (daveramsey.com)


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## Road Guy (Sep 23, 2008)

I was lucky, the GI Bill paid for most of mine and I worked part time to pay for the rest, didnt get a cent from mom and dad for either the Bachelors or Masters Degree's.

Although when I did come home from college I noticed my parents had spent a lot of money on the house so I guess they put the money to good use.

I had sort of a falling out with my folks when I turned down some partial football scholarships to some small schools and when they started the "I'm not paying for you to go to school and party" I played the FU card and joined the Army to pay for college..

I didnt see the point at playing division II football, getting the same beatdowns in practice to play in front of 200 people, maybe I was wrong........


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## ramicoce (Sep 23, 2008)

SSmith said:


> 1. His path isn't the most efficient way to pay off debt....2. He _trains_ people his method for finance, but doesn't _educate_ people about finance at all...
> 
> 3. He says he has a heart of a teacher...
> 
> 4. Its absolutely disgusting how he panders..


1. I think he's working with psychology here, which is probably far outside the realm of any of us engineers. You are correct, it would make more sense mathematically to go after the largest interest rate (i.e. the bookie). However, there's a tremendous sense of accomplishment as each debt gets paid off. When you're trying to change someone's life, you have to find a way to motivate them. When someone starts this large task, that first completed account encourages them that they can do this. As you move up, you need less and less reinforcement because you've already had so much success and encouragement. As you close on that final greatest debt, you build the excitement and drive to tear through it. Man, it gets me excited just thinking about it! (and, again, we're out of debt).

2. Yeah, but that's not really the point. Try teaching my wife about finance. She'll tune you out after about 30 seconds. She's a heck of a saver, but has no interest in learning nitty-gritty financial details. You're right, many of the callers are hurting on financial knowledge, but I imagine a lot of that is because they're similar to my wife in that finance doesn't particularly interest her.

3. Yes, he sells books/CDs/FPU, but there is a cost for producing and distributing all of that. He's also encouraged people to share their books with others; that's not going to earn him a sale. I've noted the same though, but you know what, he's found a way to both help people and make a living. Good for him. If his product is successful in improving lives, I'm good with it. I don't expect him to sacrifice himself and give everything away for free. The truth is though, you can learn all the principals taught in his books and FPU simply by listening to his radio program for a week, and that doesn't cost a dime.

4. True, and this probably comes from his previously being a preacher. I kind of like it though... as a society, we're moving away from relying on the family, church, and neighbors to assist in a time of need and relying more on the government. I'm willing to bet that we've also shifted our donations away from the church too compared to our grandparents. If more people tithed more regularly, the churches would be in a better position to reclaim some of that calling, and reduce the demand on the government (and our taxes, in an ideal world--- i know it's a dream though, especially in Tallahassee).


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## ramicoce (Sep 23, 2008)

Road Guy said:


> I was lucky, the GI Bill paid for most of mine and I worked part time to pay for the rest, didnt get a cent from mom and dad for either the Bachelors or Masters Degree's.


Yeah, I was lucky too. I picked up a bunch of small scholarships through undergrad, combined that with a co-op, a 2 year ROTC scholarship, GI Bill, and reserve income as an enlisted guy (when it used to be one weekend a month), and ended up making money going to school. Grad school was on a fellowship, so that was pretty lucky too. Now we're planning for our son (who'll join us any day now), but we won't cover 100% of it. I think I had a greater a appreciation for school because I had full responsibility for finding funding for it (I had to keep grades up to keep the scholarships, etc.) just as I took better care of my car because I paid for it myself.


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## Capt Worley PE (Sep 23, 2008)

I saw his site...lotta stuff for sale.


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## ramicoce (Sep 23, 2008)

Capt Worley PE said:


> I saw his site...lotta stuff for sale.


There is, and it's definitely a business, but the books are probably also in your library. Plus, someone correct me here if need be... if you listen to his radio show (or free podcast) for a week, you'll probably learn everything in the books.


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## mudpuppy (Sep 23, 2008)

From what I've read here, it sounds like Ramsey has a dogmatic approach to personal finance, which IMO is often a good way for people to get lead astray. "Oh, I have $1000 in the bank for emergencies like Dave Ramsey said, so I'll be ok!" Or, "Oh, I'm saving 15% of my income for retirement like Dave Ramsey said so I'll be ok!". While these strategies may work just fine for some people, they may not make sense for others.

As unappealing as it may sound to some people, they need to get educated about finance and sit down and cruch the numbers for their own personal situations--and then tailor their financial plan to fit their own lives. To rely one person's one-size-fits-all plan is just asking for trouble.

And if they really can't or won't sit down and do it themselves, there are independent financial advisors out there that can do it for them for a fee (but be careful about relying on a bank or brokerage employee for financial advice--they often have tremendous conflicts of interest).


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## chaosiscash (Sep 24, 2008)

mudpuppy said:


> As unappealing as it may sound to some people, they need to get educated about finance and sit down and cruch the numbers for their own personal situations--and then tailor their financial plan to fit their own lives. To rely one person's one-size-fits-all plan is just asking for trouble.


Well put.


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## maryannette (Sep 24, 2008)

Back to the original topic, college student loans. Is it okay to borrow money to get a college education?


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## Supe (Sep 24, 2008)

mary said:


> Back to the original topic, college student loans. Is it okay to borrow money to get a college education?



There aren't many investments out there one can make that have the guaranteed results of a college education. I'd rather take out a loan for education than just about anything else.


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## Chucktown PE (Sep 24, 2008)

That's another area where Dave Ramsey would disagree with you. I don't follow DR's plan but I am in good shape financially, I use credit occasionally, but have no consumer debt, and a good bit of money in investments/retirement accounts.

I would take out a loan for college if I had to. Fortunately I didn't have to but I agree with Supe. A colllege education at a state school, with a degree in some profession (parks, recreation, and tourism management doesn't count) will pay for itself in very little time.


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## Desert Engineer (Sep 24, 2008)

On the topic of your education as an investment, occasionally at work I joke while wearing a hard hat that I need to protect my brain since I still owe money on it, and that I can’t damage my investment.


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## chaosiscash (Sep 24, 2008)

Chucktown PE said:


> (parks, recreation, and tourism management doesn't count)


What's wrong with a PRTM (Party Right Through May) degree? :th_rockon:


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## Guest (Sep 24, 2008)

chaosiscash said:


> Well put.


+1



Supe said:


> There aren't many investments out there one can make that have the guaranteed results of a college education. I'd rather take out a loan for education than just about anything else.


I completely agree ... I would still be forming concrete on a construction crew if I had NOT taken out those loans for college.  Moreover, I think my quality of life would be severely DIMINISHED - so there is more than just the palpable financial well-being but also the intangible improvements in your life that a college education offers.

:2cents:

JR


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## ramicoce (Sep 24, 2008)

mary said:


> Back to the original topic, college student loans. Is it okay to borrow money to get a college education?


I think it's ok if a.) the degree is required for the career you want to pursue, b.) the career is well-paying enough that you won't carry student loan debt forever, c.) you still minimize costs, i.e. public school with in-state tuition, and d.) you have absolutely no other way of paying for it, including working through college. Someone already mentioned it, but it is sad when people go massively into debt in order to get an education that supports a meager paying job. As long as someone's thought through it, honestly minimized costs, developed a plan before getting the loan, and sticks to that plan, I don't think anyone can fault you (not that it's really any of their business). Of course, this requires that you have some clue about why you're going to college in the first place and not simply going because it's grade 13 (I'm from Northern Virginia, everyone went to college - clue or no clue).


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## snickerd3 (Sep 24, 2008)

Don't forget about the MRS. degree. My sister went to a rather pricey private college and a LOT of her female classmates openly admitted they were after the MRS degree.


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## benbo (Sep 24, 2008)

ramicoce said:


> c.) you still minimize costs, i.e. public school with in-state tuition


I would agree with everything you say here, except this to a certain extent. Although state schools provide an excellent education, there is still some advantage to going to an Ivy League school if you can get in. Not necessarily from the education but from the connections. I just notice that every time I read something from some famous writer, or see some head of this or that corporation, many times they graduated from the Ivy League, or Stanford, or something like that. And in Engineering of course there are the other really good schools - U of I, Caltech, MIT, even (dare I say it) GT. Of course, you have to plan it all out carefully, and weigh everything. And get all the free scholarships you can. I could see going 70 K in debt to get a Computer degree from Stanford, but I couldn't see going 200K in debt to get a Modern Dance degree from Princeton.


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## snickerd3 (Sep 24, 2008)

benbo said:


> but I couldn't see going 200K in debt to get a Modern Dance degree from Princeton.


ONLY if you are the next Martha Graham would that work out in your favor


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## chaosiscash (Sep 24, 2008)

benbo said:


> even (dare I say it) GT.


Well, it is a top 3 engineering school (or so I've heard).


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## roadwreck (Sep 24, 2008)

chaosiscash said:


> Well, it is a top 3 engineering school (or so I've heard).


I've heard that too, and I agree completely!!!!


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## RIP - VTEnviro (Sep 24, 2008)

snickerd3 said:


> Don't forget about the MRS. degree. My sister went to a rather pricey private college and a LOT of her female classmates openly admitted they were after the MRS degree.


My wife went to a school like that for undergrad. This private liberal arts school with affiliations with the Presbyterian church. Not extremely pricey but a lot more than a public school. She basically went because she got a half scholarship, they had a good science school, and it was 10 minutes from home.

She said a lot of the girls there were MRS students. They'd get married as sophomores or juniors so they could have sex with the guy they were dating. Apparently she sees folks from time to time when she visits her parents. Most of them are pouring coffee or checking groceries and miserable in their marriage but too pious to get divorced.


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## ramicoce (Sep 24, 2008)

benbo said:


> Although state schools provide an excellent education, there is still some advantage to going to an Ivy League school if you can get in.


Sure, I'll go with you there, depending on the field you're going in to. Ask my coworker in the tiny cubicle downstairs if he thinks his Princeton degree got him any sort of leg up as a design engineer in this office.


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## maryannette (Sep 24, 2008)

VTEnviro said:


> She said a lot of the girls there were MRS students. They'd get married as sophomores or juniors so they could have sex with the guy they were dating.


:dunno:


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## RIP - VTEnviro (Sep 24, 2008)

I donno, I prefer a little less permanent solution to get a girl to loosen up her...morals. Like a bottle of tequila.


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## chaosiscash (Sep 24, 2008)

VTEnviro said:


> My wife went to a school like that for undergrad. This private liberal arts school with affiliations with the Presbyterian church. Not extremely pricey but a lot more than a public school.


VT, I know you are up in Boston, but did your wife happen to go to Presbyterian College in South Carolina? They have a lot of students there from the Northeast. I ask b/c thats where my wife went on her first trip through college. She was, in her words, the "token poor girl at a rich kids school."


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## Capt Worley PE (Sep 24, 2008)

mary said:


> :dunno:


I didn't get it either.


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## benbo (Sep 24, 2008)

ramicoce said:


> Sure, I'll go with you there, depending on the field you're going in to. Ask my coworker in the tiny cubicle downstairs if he thinks his Princeton degree got him any sort of leg up as a design engineer in this office.


I'm not sure if you're agreeing or being sarcastic.

Everybody can pull up one anecdotal example. You seriously aren't claiming that proves anything? Because I have a bunch of Ivy Leaguers working at my place, except they generally leave after a few years for jobs that make at least$200K. But I wouldn't count that as proof of anything either.

I would be willing to bet that if you looked statistically at the salaries of people graduating from Ivy League schools (especially if you include Law and Business schools) they would be ahead of the normal college grad by a good deal.

Engineering school - I don't know. If you are going to be a technical engineering type and not a manager it probably doesn't matter financially.


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## RIP - VTEnviro (Sep 24, 2008)

chaosiscash said:


> VT, I know you are up in Boston, but did your wife happen to go to Presbyterian College in South Carolina?


She went to a school in Washington. The state, not the DC.


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## roadwreck (Sep 24, 2008)

VTEnviro said:


> I donno, I prefer a little less permanent solution to get a girl to loosen up her...morals. Like a bottle of tequila.


So if you ever have a daughter are you going to start a campaign to outlaw tequila?


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## MA_PE (Sep 24, 2008)

benbo said:


> I'm not sure if you're agreeing or being sarcastic.Everybody can pull up one anecdotal example. You seriously aren't claiming that proves anything? Because I have a bunch of Ivy Leaguers working at my place, except they generally leave after a few years for jobs that make at least$200K. But I wouldn't count that as proof of anything either.
> 
> I would be willing to bet that if you looked statistically at the salaries of people graduating from Ivy League schools (especially if you include Law and Business schools) they would be ahead of the normal college grad by a good deal.
> 
> Engineering school - I don't know. If you are going to be a technical engineering type and not a manager it probably doesn't matter financially.


Coming from the northeast (where we have a gazillion colleges/universities (good, bad, and ugly) it's both my observation and opinion that a highly rated school (ivy league if you will) is definitelty a leg up.

Further, if you can get in but don't have sufficient funds I believe that there's a heck of a lot of scholarship money available to you. The hard part is getting in, because I believe that there are a lot of mediocre students with enough funds available to attend that get turned down because the school does't want to lose face/credibitlity. They don't immediately giove seats to the people with cash. It also helps thier reputation by taking a really good student and funding them through.

I guess my point is that if you are of the caliber to get into an ivy league school, money isn't necessarily the biggest obstacle and loans likely aren't the biggest concern. You need to get accepted first.

Having a degree from a prestigious university is always a resume booster.


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## chaosiscash (Sep 25, 2008)

VTEnviro said:


> She went to a school in Washington. The state, not the DC.


Good deal. Just curious.


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## squishles10 (Sep 25, 2008)

Capt Worley PE said:


> I guess I'm going to have to Google Dave Ramsey....


I'm with you on that one...


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## ramicoce (Sep 26, 2008)

benbo said:


> I'm not sure if you're agreeing or being sarcastic.Everybody can pull up one anecdotal example. You seriously aren't claiming that proves anything? Because I have a bunch of Ivy Leaguers working at my place, except they generally leave after a few years for jobs that make at least$200K. But I wouldn't count that as proof of anything either.
> 
> I would be willing to bet that if you looked statistically at the salaries of people graduating from Ivy League schools (especially if you include Law and Business schools) they would be ahead of the normal college grad by a good deal.
> 
> Engineering school - I don't know. If you are going to be a technical engineering type and not a manager it probably doesn't matter financially.


Both, actually. I'm not an Ivy League grad, but I imagine that having an Ivy League education in fields like law or business is a bigger leg up than having that same Ivy League name with a field like engineering, where it still may be a boost, but not as much. I mention my coworker because even he questions the benefit of having gone to Princeton (and we like to give him grief that he can't even read his diploma - it's in Latin). Now, if I forward him your note about Ivy Leaguers at your place leaving for 200K jobs, I think it'll give him ideas, especially if they're engineering types.


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## benbo (Sep 26, 2008)

ramicoce said:


> Both, actually. I'm not an Ivy League grad, but I imagine that having an Ivy League education in fields like law or business is a bigger leg up than having that same Ivy League name with a field like engineering, where it still may be a boost, but not as much. I mention my coworker because even he questions the benefit of having gone to Princeton (and we like to give him grief that he can't even read his diploma - it's in Latin). Now, if I forward him your note about Ivy Leaguers at your place leaving for 200K jobs, I think it'll give him ideas, especially if they're engineering types.


You can be successful from any state school, or flop from an Ivy. And it all depends on what your idea of success is.

The people I am talking about are from various educational backgrounds, but most of them are in some sort of managment or high level analyst type position. I work in a govt. agency where these types of people move back and forth from private to public sector - work in private sector for a while making big bucks, move back to public sector for a while for "public service". The people who do this type of thing are invariably (but not always) graduates of some sort of Ivy League school.

I can't disagree entirely with your other statements. I'm sure it matters more in some fields than others. However, I am not an Ivy grad either, but common sense tells me people would not be busting their hump to get in if there was no benefit. It makes no sense.


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## frazil (Sep 26, 2008)

Over the years I have taken courses at 6 different colleges/universities at all levels - from Ivy League to community college. In my experience there is a definite difference in the education received. Ivy League courses are more rigorous and theoretical-based. At the state university level the coursework is more applied. Both can produce excellent engineers and not-so-good engineers.

I read this article just recently: Ivy League's Big Edge: starting pay

I think graduates from top schools have an edge that isn't solely due to the name of the school or networking, but I'm not sure how the differences in education would make them better engineers. I think the theoretical and applied are both important. Maybe it's because people going to those schools have to be fairly intelligent to begin with, and an intelligent engineer from any school could do just as well.

anyway, just my :2cents:


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## Katiebug (Sep 28, 2008)

benbo said:


> You can be successful from any state school, or flop from an Ivy. And it all depends on what your idea of success is.
> The people I am talking about are from various educational backgrounds, but most of them are in some sort of managment or high level analyst type position. I work in a govt. agency where these types of people move back and forth from private to public sector - work in private sector for a while making big bucks, move back to public sector for a while for "public service". The people who do this type of thing are invariably (but not always) graduates of some sort of Ivy League school.
> 
> I can't disagree entirely with your other statements. I'm sure it matters more in some fields than others. However, I am not an Ivy grad either, but common sense tells me people would not be busting their hump to get in if there was no benefit. It makes no sense.


I suspect the Ivy League designation matters less in engineering than in finance, law, medicine, etc. To my knowledge the only two Ivies which have really good engineering programs are Cornell and Columbia, maybe Princeton as well. I don't have many colleagues in engineering who went to an Ivy League school. We have a lot of state university grads (like me), and a good number from private schools like RPI, WPI, Rose-Hulman, etc.

I looked at Columbia's undergrad ME curriculum and was surprised to see that it only requires 1 semester of chemistry (and one semester of lab). I had to take two semesters each of chem and chem lab. There is NO required materials science/engineering course for ME majors at Columbia - at my state school MEs were required to take two semesters of materials, plus a materials lab. Otherwise the ME core curriculum seems to be OK.

I am starting a master's at Columbia via distance ed and was required to take an undergrad course in materials science &amp; engineering before starting graduate classes (despite having minored in materials as an undergrad) - the claim made was that as someone who went to a state university and didn't major in MSAE, I would need a "refresher" course. Perhaps unsurprisingly, I am bored out of my mind! The pace is quite slow and is very focused on theory with little practical application of said theory. It's all well and good to be able to derive equations, but if you can't apply them, what's the point? I'm seriously considering switching back to RPI or UConn for this master's degree because thus far I'm _not_ impressed by Columbia.

Heck, I have a high school friend who went to MIT and majored in mechanical engineering. He graduated with more than $100K in student loan debt. I went to UConn and majored in ME, and graduated with $21K in student loan debt. He was shocked to discover that our salaries are basically equivalent (within $1000 of each other) - plus I work for a company that has an unparalleled employee education program. while he's footing the bill for his master's degree. MIT is an awesome school, don't get me wrong - but personally I'm glad I went to a state school and didn't incur all that debt for essentially the same salary!


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## benbo (Sep 28, 2008)

I will have to agree, on review, that it doesn't seem to matter as much for Engineering school. However, I will point out that among the top rated schools more than half are expensive private schools, though not necessarily Ivy (Stanford, MIT, Caltech, USC, etc.) But it appears that a lot of public schools or less expensive private schools rank up there as well (U of I, Georgia Tech, Berkeley, a few other UCs, etc.). So for our particular career it doesn't seem to matter as much. To anticipate the response, I know people will say rankings don't matter, I know Joe Blow who graduated from blah blah Ivy and he's an idiot and makes $3.00 an hour. Rankings are not the be all and end all but assuming they include peer assessment I think they are more objective.

However, in most every other careers I still contend you have a leg up if you graduate from an Ivy.

Maybe I have a bone to pick on this one because I have a co-worker who graduated from a state school who always used to call our boss an idiot. My boss is a Harvard educated economist and I would point out that in general, if you get in on merit which he did, you can't be a complete idiot and graduate from Harvard. My co-worker would go on to explain why San Jose State (a fine school by the way) was equivalent to Harvard. Sorry, I don't buy it. And I also have my own beefs with my boss, but I don't think he's an idiot.


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## Supe (Oct 14, 2008)

Well, by this time next year I'll be on my way to approximately another $40k in the hole. If I meet the requirements, it looks like I'll be going for my masters in Welding Engineering via Ohio State's online curriculum (assuming I get in, just have to take the GRE's first). Being that it's the only masters available anywhere in Welding Engineering as well as the only ABET accredited program, I figure it will give me a leg up in the near future as far as promotions and client interaction goes. When most of our management retires at the same time, a fair amount of our credibility will go down with it, so may as well do what I can to stay afloat while that ship sinks!


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## MGX (Dec 11, 2008)

I'm looking at 10K total. However my income should double in two years so perhaps I can cash flow the expenses of college and pay it off in a couple years.


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## GulfCoastCivil (May 8, 2009)

I had a partial scholarship the first year, which I lost. Then I had a full scholarship the second year which I lost. My parents paid for the rest. My whole life they bought me savings bonds every month and used those for college.

The first scholarship was a deans one through the college. The second was through a state program that originally I was not eligible for because I graduated a year before it started. But then they decided to grandfather in people who graduated my year and that's how I got one for the second year after blowing the one for the first year.


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## Santiagj (Jul 10, 2009)

After my undergrad in Civil Eng I was a little shy of 20k in the hole from student loans. My M. Eng was paid 100% by my employer. Which is awesome! and the only way I would have completed it. Tuition costs for graduate students are insane! I went to University of Md, College Park twice. I thought it was a good deal since its less costly due to being a state university and it ranks pretty high as a public school in engineering. I think it consistently ranks in the Top 25 public schools and top 100 in all schools.

I think you have to take tuition/debts into account when applying for a school. I think a lot of students don't care about tuition. If you come out with 100k+ debt and you salary is 30-40k a year then I believe you had made a poor decision. A friend of mine, who is not an engineer, went to Brown for her undergrad. She majored in international studies. When she graduated she had a rediculous amount of debt and was not even able to find a job. Why go to Brown for that? Anyways, she wound up marrying a lawyer so I guess it worked out.


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## Capt Worley PE (Jul 10, 2009)

Santiagj said:


> She majored in international studies. When she graduated she had a rediculous amount of debt and was not even able to find a job. Why go to Brown for that? Anyways, she wound up marrying a lawyer so I guess it worked out.


Looks like you answered your own question, there.


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## wilheldp_PE (Jul 10, 2009)

One of my HS buddies failed out of Georgetown College (in KY, not Georgetown University) twice. The funny thing is that his sister and half brother both graduated from there with useless degrees, and do similar jobs to him. He's a waiter at a local restaurant, his sister is a hostess, and his half brother is a bank teller.


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## snickerd3 (Jul 10, 2009)

Santiagj said:


> I think you have to take tuition/debts into account when applying for a school. I think a lot of students don't care about tuition. If you come out with 100k+ debt and you salary is 30-40k a year then I believe you had made a poor decision. A friend of mine, who is not an engineer, went to Brown for her undergrad. She majored in international studies. When she graduated she had a rediculous amount of debt and was not even able to find a job. Why go to Brown for that? Anyways, she wound up marrying a lawyer so I guess it worked out.


My SIL is like that. She went to a local expensive private college, wanted to be a music teacher (she doesn't even know how to play the piano, but that's another story all together). racked up lots of debt, ended up being promoted to photo counter at Osco, before getting a job at the local kindercare. She never even looked for teaching jobs. about 2yrs out of school she quit working at the daycare facility to stay and home with the baby and my BIL is stuck paying her college loans.


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## RIP - VTEnviro (Jul 10, 2009)

I had a friend who started college the year after me. He was a slacker but had some potential if he got it together. He did well his first term. Made it through the second semester but had to drop a class.

Then it went downhill from there. Begining of his second year, he somehow hit something with his car that caused the oil pan to leak. He drove it until everything siezed up. So he had no ride. Then he got invovled with a girl who was a complete drug addict and they would have all weekend coke binges. So he dropped out of school and lost a year.

Then he enrolled in the local community college, took a few classes but never finished. He always claimed he was one class shy of graduating and would enroll in 4 year college as soon as he finished.

Last I heard he was sorting boxes at Fed Ex.


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## wilheldp_PE (Jul 10, 2009)

VTEnviro said:


> I had a friend who started college the year after me. He was a slacker but had some potential if he got it together. He did well his first term. Made it through the second semester but had to drop a class.
> Then it went downhill from there. Begining of his second year, he somehow hit something with his car that caused the oil pan to leak. He drove it until everything siezed up. So he had no ride. Then he got invovled with a girl who was a complete drug addict and they would have all weekend coke binges. So he dropped out of school and lost a year.
> 
> Then he enrolled in the local community college, took a few classes but never finished. He always claimed he was one class shy of graduating and would enroll in 4 year college as soon as he finished.
> ...


I think your avatar sums up his career path rather nicely.


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## dastuff (Jul 10, 2009)

I've got about 37k in loans, but for the last year i've been saving for a home, and not trying to pay them off (and honestly right now the extra 25k in my pocket is more important than an extra 300$/mo). Anyways after these loans i'd figure i'd help my parents out with some things.

With regards to saving for retirement I just automate it, sit back, and let the money grow... After 2 yrs of contributing to my 401k i'm at about 14k (which is fine since the market decided to tank). I hope to have 75k or so in the 401 before i hit 30. We'll see if that's realistic or if i'm living in a fantasy world.


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## Ble_PE (Jul 10, 2009)

I finished school with about $25k in loans. This includes 3 years of undergrad and 1 year of grad school. I started college on a football scholarship and went 2 years for free, but then decided I wanted to major in engineering. The problem was the school I was going to didn't have an engineering program, so bye-bye free ride. Transferred after 3 years and finished my undergrad in 2 more years and my MSCE 1 year later. I'm not in a hurry to pay them back right now because they are consolidated with a 2.5% interest rate.


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## CivE Bricky (Jul 11, 2009)

I'll add to the which college debate - I have a unique perspective

I won't name colleges here, but you can message me if you'd like to know more specifics

I didn't get my act together for too long and did the bulk of my growing up in places where I paid dearly for the privilege. I do what I can to let others learn from experience and avoid a similar path:

directly from high school to:

top five engineering school - by far the most stimulating and challenging environment I've ever been in. It changes you in such a way that you can often identify others who have had the experience in mere minutes of conversation. The academics were exceedingly challenging and although I probably could have cut it with adequate grades re: pure academic potential I didn't then have the other required skills to give me the success package. I hadn't yet learned to learn on my own, appropriately prioritize a volume/difficulty of work that was impossible to complete, how to ask for and get help (was familiar with giving it) and how to balance work and fun. The other students, administration and faculty created a truly unique atmosphere that brought out and developed certain aptitudes and points of view... intense curiosity for who else has something interesting going on (within and outside those walls), and willingness to share, respect for the individual, entrepreneurial bent, a crush you until you rebel and excel mode....Grading was on a curve and I've never seen curves so high. Anything that had ever been taught was assumed to be fully grasped and available to you without review. There was never ever review of any concept. My very first class there started with a review of homework - the prof was truly astonished we hadn't ALL picked up the syllabus and completed the pre-course assignment in our eagerness to learn (some students had). (My not in Kansas moment....) In direct contrast to reputation, students had broad broad interests...there was never a glazed look with mention of ANY major. Constant surprises at discovering pockets of expertise in strange places can be expected (ie. detailed discussion of who and what's on Broadway with a newly arrived Detroit native etc.) A sense of fun and cleverness were celebrated. Professors saw students as collaborators from day 1 and they deserved to be. You were taught the skills required to switch careers successfully without re-education. Graduates from that school seek out other grads because a particular valued mindset is a given - that begins with careful selection of those offered entrance. Instead of limping through, I moved on (after becoming of that place in most ways).....

next was a visiting semester a former women's college (one of seven sisters) - I was stunned at the difference in atmosphere. The curiosity was turned inward in direct contrast to my previous college. There was little culture of reaching out and noticing what was special elsewhere. No doubt it was a good education, but money and status mattered more here - you didn't stand only on your work. There seemed to more little cliques and hidden (to me) rules and expectations. At the same time, there was a homey contrast - profs were always addressed as "Mr. Ms. Mrs..." and usually taught small classes and were very approachable and available to students (not just during office hours).

next was community college - high school deluxe (while working full-time). Very very clear expectations and requirements. "The test will cover page 37, but not the example problem on page 38" Many students were not especially interested in learning. Still--this is where I got a handle on study habits and learning on my own...and rising to the near top helped my battered self-esteem. As far as the critical problem-solving skills and basic concepts, I probably didn't learn less than other places, but the creative thinking and peer challenge was harder to find -- you had to seek it out, instead of getting slapped with it at every turn. I got a two-year degree, cleaning up my past into a known quantity so I could transfer.

next was transfer to a top ten engineering school - much bigger than all the others, authentic school spirit which threw me at first (They're singing the REAL words to the school song....holy carp!) I didn't find the same broad interests combined in one person very often (like I routinely did at the first college) but I could explore those interests to the same depth by interacting with several people. The academics were still quite challenging, but a test result that would have been a mid-C at school #1 would be a high B here. Profs did quick review now and then -especially when bringing up not-seen-for-a-while concepts. (you didn't need to be perfect)... It turned out to be the right fit and I graduated from this one.

I gotta say - the best choice depends on the kid, the major, the career goals and the finances available. I wouldn't give back any of the education I got. My time at #1 hasn't (yet?) translated into big bucks or high visibility in my field, but I'm a different engineer, wife, mother, friend than I'd be without it. (I love that my husband is a grad so a little bit of that place is always with me.) I just reconnected with a friends from that time via LinkedIn and they're same as ever, but better....that's a tremendous professional and emotional resource to have access to....not to mention, it's way fun! That spark of intellect never dims....And some of the friends from there that I've kept in touch with all along have significant roles in shaping life in our country - by knowing them and being part of their "pit crew" I've had an indirect part in that.

Right now, I don't want to start or run a company, but I have plenty of working years left and a growing interest...

I do believe in the concept from Outliers (Malcolm Gladwell) that you don't need the best education to excel - just a good enough one....if you have the rest of the package. Still putting yourself into an environment where certain things are repeatedly thrown at you leaves you no escape -- they shape and form you. A self-driven person with the right skills can create a similar outcome, but it needs to be self-directed and sustained....which can be tough for some people.

How will I advise my two kids (now 13 &amp; 9)? Honestly no idea yet -- so far they're following in parents' footsteps with very broad interests and talents, including some we didn't give them. I have no idea if I'll get actors, engineers, lawyers or social workers.....and if it's the right fit, any of those is fine with me. My goal is to try to assist them in focusing their interests on a job that they can love enough that it won't feel like a job. And if I can help them get to that place more quickly, cost-effectively and efficiently than I did, better yet!


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## CivE Bricky (Jul 11, 2009)

Separate post on debt

My parents had four kids and the deal for all was you pay half, we pay half.

I worked a lot and didn't get financial aid - not so much because my parents had a huge income, but because they had lots of assets and lived fairly modestly compared to how they could have. My mother used to rant, "If we'd bought the boats, furs, and jewels, you'd have financial aid, but I just can't live my life like that." (Friends assumed I had more aid than typical because of my lifestyle and jobs....no stream of cash from parents.....but I didn't qualify for a penny.)

My education extended over 18 years start to finish and ultimately I had debt in official gov't loans equal to about 3 semesters tuition when I started, and loans from Mom/Dad of about a half semester tuition when I ended. My MIL gifted each my husband and me (separately) with part of an inheritance she got. I used the $ for my last semester tuition. About 10 classes were paid for by work because I took them one at a time while working full-time.

I owed about $11K when I finished in '98 - after my long long history in school (read previous post for that)


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