I was accepted to Graham Junior College in Boston, and to Emerson also in Boston. We visited both, I fell in love with Emerson. We were a solid middle-class family who emphasized education, so my parents were willing to co-sign a loan so that we could afford the higher fee. This was a guaranteed state loan available had at the time, with a super low interest rate.
Three months after I started Emerson, Graham closed its doors forever. If I had chosen Graham, I would not have been refunded, AND I would've had to pay the loan back for the entire year. And it'd be too late to matriculate into Emerson, and the first three months of school at Graham would have been for zero credit. And I'd be stuck in Boston with a lease (because Graham didn't have dormitories) and no reason to be there.
I was the lucky one who chose the right school. There are tens of thousands of students who were unlucky and chose the wrong school. They ended up with no education, no refund, and a loan to pay back.
I did pay back my loan, but had to defer twice. So my 10-year loan took me 12 years to pay off. I'm okay with that, I never had trouble finding work, just two years out of the 12 I found myself dipping into savings to pay bills, and didn't want to end up with nothing. That reprieve of $87.02/month every month for two years was just enough to keep me from falling into a financial crisis.
Note that number - $87.02/month. That's equal to $217.31 by today's standards, accounting for inflation.
Do you know anyone graduated from college recently whose student loan bill is only $217.31/month? I don't. I have friends and former co-workers who are looking at $400-1000/month loan bills. The cost of education has risen disproportionately to the income potential of the degree.
Why do you think there are so many Aspen Dentals? A dentist hanging out his sign on his own office door will be spending 100% of his revenue to pay off debt. He will have no income at all for years. But if he joins a group, he can share expenses, and actually get a real paycheck.
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