Friday, April 22, 2011

Weekend Reading: Debt Free U

Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships or Mooching off my Parents. by Zac Bisonette. Portfolio Trade, August 2010.

So, I read this one about ten years too late, but assuming I can ever pay off my loans and have kids (or I ever decide I want kids), I'll have some solid knowledge to pass along! This book is an interesting read, if somewhat unbelievable at times. He cites a lot of studies, and presents what may be for some, an attainable goal of graduating from college with no debt. If nothing else, even if what he says wouldn't be possible for many people, at least it gets people thinking.

In my case, as a person with a huge amount of student loan debt, it made me feel a little angry that I wasn't more sensible back when I was borrowing heavily, but I don't think in my case I could have or really would have (just knowing myself and the experiences I wouldn't give up to save a few dollars) done much differently, and I'm not a big fan of regret, so I'll just keep making loan payments without (much) complaint.

Here's some of the things he said that I don't think are possible/likely for many college students:
  • Do the first two years of college at Community College and live with your parents
  • Work an average of 30/hours per week with the intent of putting that money toward tuition
Both very good ideas, but not something that can work for everyone. For example, I grew up in a town of 1500 people, so we had no community college, in fact, K-12 was in the same building. I managed to take one very inexpensive college psychology class while in high school by driving 30 minutes to the nearby air force base, but they certainly didn't offer enough classes for me to have finished two years worth of credits, unless I took five years to do it.
I had to move to a bigger city to attend college, which meant the added expense of housing. I picked an inexpensive state school and worked throughout college and grad school, but made nowhere near enough to pay tuition. He says he's not living on ramen, but I'm a bit skeptical.
Best Takeaways:
  • You don't need to go to an Ivy League school to get an excellent education. I am thoroughly state-school educated, and I can go toe-to-toe with my Ivy League buddies any day. The name on your degree doesn't matter as long as you're smart and capable. My bf went to Dartmouth and insists that the networking opportunities you get from attending an Ivy League school make the exhorbitant tuition worth it, but in my field, it would have been a waste. Plus, I don't like or want to work with snobs, which many Ivy Leagers are.
  • Parents should not take out a home equity line of credit, extra mortgage, whatever to help their kids pay for college. If they can't make the payments later, for whatever reason, their home can be taken away. As Bisonnette pointed out over and over, you can't reposess a college education. If you secure the borrowed money with something tangible, it can be taken away from you. Likewise, parents should not take money out of their retirement accounts to pay tuition. It seems nice, but then how are they supposed to feed themselves once they've retired? They will most likely rely on the kids that they helped through college, so it's really no help at all.
  • Pick a major that you enjoy and will do well at, but also find something with flexibility. There's no point working toward a single goal for four years and then finding out that you either don't want the one job you've been preparing for, or that the industry has changed.
  • We don't yet know the impact that students graduating heavily in debt will do for the future economy. Unfortunately, people in my age bracket are pioneers in this, but 15% of borrowers already default on their loans, and that number is only going to increase. If you can reduce the amount you borrow, you should.
Overall, it's a good read. The author gets a bit strident at times--he has a thesis and he is defending it to the death, so I would caution any reader to take his advice with a grain of salt. For example: He thinks that everyone should go to a large state school. His rationale is that there are more professors and more students, therefore, more opportunities. I personally would not have been happy at a large school, and it would have been a waste of my money to go to one. I have another friend who went to Texas A&M, who said that she had a nearly impossible task of getting grad school recommendations because her school was so large and her advisor had 100 other students. The author claims that there are ways to make a large school seem small, and that's valid, but my small undergrad school was just right for me.

He also says that campus tours are a waste of time and that students get too hung up on the notion of "fit." While I agree that finding an institution that fits seems to be more important than getting a quality education for some, it is still somewhat important. Likewise he poo poohed study abroad saying that it's a waste of money and often sets students behind so they can't graduate in four years. That may be true, but my study abroad experience was invaluable, and I wouldn't trade it for anything.

Bottom line: This is a book that will give you instructions on how to graduate college with little-to-no debt, and also little-to-no fun. If saving money and getting out into the working world is your ultimate goal--then go forth with these instructions and achieve. If savoring your college years and enjoying yourself are more important to you, make sure you start saving a lot in high school.

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