After a three-year COVID pause, student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October,” according to the Department Of Education. “We will notify borrowers well before payments restart.”
Given the pandemic was officially declared over on May 11, 2023, it makes sense that student loan debt should start to be paid back. But of course, not everyone agrees.
Some people believe that a 3-year pause in paying back student loans is not good enough. Instead, they feel entitled to have their debt forgiven. This type of entitlement mentality is a huge crutch that may prevent them from becoming financially independent.
Let's look at an example of entitlement mentality in action from a Twitter user.
Surprised To Have To Pay Back Student Loans
Below is a tweet by a woman who lives in New York City. I've greyed out the name to focus on the message. Let's call her Patty and how having entitlement mentality can destroy her wealth-building potential.
Paying $1,298.83 a month in student loans is a lot! But on the bright side, at least her rent is affordable for New York.
Patty's comment about “how do you expect Americans to pay this” is strange since she is the one who took out the loans. Of course she is the one who should pay back the lender. Who else?
If I borrow money from a bank to buy a house, I'm not going to act shocked that I have to pay the money back after a pause. I would feel fortunate I was able to get a mortgage in the first place to live in a new house. And when I finally pay off my mortgage, I will feel proud to have fulfilled my obligation.
The same logic goes for taking out student loans. Students should feel grateful an institution lent them money to go to college. Otherwise, they wouldn't be able to go to college! According to a Lumina Foundation report, roughly 54% of Americans have college degrees as of 2021.
Education is an incredibly valuable asset as you will see from the data below.
A College Degree Is A Valuable Asset
A college degree is valuable because the average lifetime income for a college graduate is far higher than the average lifetime income for a high school-only graduate.
According to 2022 data from the Federal Reserve Bank of New York, the median annual wage for a full-time worker aged 22 to 27 with a high school diploma is $30,000. For a full-time worker with a bachelor's degree, it's $52,000. That's a $22,000 a year, or 73% difference!
According to The Association Of Public & Land-Grant Universities, the lifetime earnings for a person with a Bachelor's degree is $2,268,000 versus only $1,304,000 for a person with a high school diploma. Therefore, we can estimate the value of a college education is worth millions.
In fact, I wrote a follow up post on how to calculate the value of a college degree. Check it out and boost your net worth if you went to college!
Expensive Private University Tuition
Given Patty's student loan monthly payment is $1,298.83, she must have taken out between $100,000 – $200,000 in student loans.
Although $100,000 – $200,000 is a lot to borrow for a college education, so long as Patty finishes college, the return on her college investment should be greater with enough time.
Given this logic, I naturally looked up where she went to school and what she studied. The school(s) must be pretty fancy to rack up so much student debt!
Ah hah! Patty got a B.S. from Champlain College, a private college I have not heard of. She then got a Master of Fine Arts in Writing from Columbia University, an Ivy League university.
Champlain College's tuition this year is $45,100, which is actually $10,000 – $15,000 a year cheaper than other private colleges. However, getting a Writing MFA from Columbia costs $76,177 for tuition and fees alone this year.
Given her student loan monthly payment amount, we can assume she did not get a lot of grants or scholarships.
Going to private college is one thing. But to then take on debt to study writing is a suboptimal financial move. The median income earned by Ivy League graduates already isn't much higher than non-Ivy League graduates.
Your Profession Matters More If You Take On Student Debt
After fourteen years of writing online and publishing a couple of books, I know that being a professional writer is hard. The pay is low and the rejection rate is high.
If I had no other sources of income, it would be extremely difficult to provide for a family of four here in San Francisco.
It would have been better if Patty had gone to a cheaper state school, got a higher-paying day job, and wrote on the side. But what's done is done. We can only learn from this example to help future college goers make better decisions.
Low Return On Investment
As a parent who went to a public university, this type of situation Patty faces is a worry for my children.
What if my kids go to private grade school for 13 years and then get shut out from a top 50 university? What if they then insist on taking on student debt to attend an expensive private university, only to end up being underpaid or underemployed? This seems to happen all the time.
As a Financial Samurai, I can't help but focus on the Return On Investment (ROI) of most financial expenditures. Paying for college and spending all that time getting degrees are two of the biggest investments one can make.
Unless your family is already rich or you receive scholarships, it's more prudent to go to a cheaper college without taking on debt.
The Fear Of Parental Failure
Parenting is tough because you don't fully know how good of a parent you are until after your kids go off on their own.
Entitlement mentality may have a way of sneaking up on children who grow up in secure homes. However, if my children cannot understand the importance of honoring their debt obligations, I feel like I will have failed as a FIRE parent.
Most people do not have such privileges to attend two private universities and pursue a career in writing in one of America's most expensive cities. To not be appreciative of such luxuries and then to expect someone else to pay for them is wrong.
Having this entitled attitude will have meant that all the guidance we gave our children growing up didn't stick. It means that all the trips we took to give them perspective didn't matter. And all the money we spent on their education just kept them sheltered.
But it's hard to find shelter in the real world. Everybody is out there fighting to get ahead!
Feeling Entitled To Free Money Will Hurt Your Wealth
I understand that everybody loves to get something for free. Even I sometimes have a difficult time saying no to a rubber chicken lunch until I calculate the value of my time.
But when it comes to borrowing money, whether from a friend or an institution, not paying a lender back is dishonorable. Our entire banking system would collapse if everybody felt this way because interest rates would surge even higher. Only the rich and connected would be able to get loans.
Instead, we must honor the contract. Another party decided to take a risk on us. We read and understood the terms of the loan. If we received a three-year reprieve, then we should be thankful. And when it's time to pay back our debt, we should do so in earnest.
Once you adopt an entitlement mentality, it might rob you of a brighter and wealthier future. If you keep expecting everything to be given, you will eventually be disappointed because not everybody will agree with your entitlement. No wonder why there are fewer self-made millionaires than in reality.
Examples Of How Entitlement Could Lead To Suboptimal Outcomes
- Not studying as hard in high school because you expect to get into a college based on your identity and legacy status. But the year you apply the admissions office decides to focus more on merit.
- Not practicing your interview skills because your mom used to be a Senior VP at the company. But the year you apply the hiring policy moves away from nepotism.
- Not building a strong network of supporters at work because you think your work is excellent enough to land you a big promotion. But you get passed over because nobody wants to promote a cold, uncollaborative colleague.
- Not saving enough for retirement because you expect Social Security to pay for all your retirement expenses. But in your 60s the government pushes back the full-retirement age by five years.
- Not building passive investment income streams because you expect your job to always be there. But a recession hits and your boss decides to save his secret crush and let you go.
- Not marketing your product because you expect everybody to support you work once it's launched. But your product flops because the world is an incredibly noisy place where even the best works go unnoticed without a lot of promotion.
Nothing Is Given, Everything Is Earned
“Nothing is given, everything is earned” is a better mentality to have. If you adopt this mentality then you will approach life from a position of strength.
When entitlement mentality takes hold, you might end up doing curious things such as complaining about having to pay back your student loan debt while posting on Twitter how you turned down five job offers, wrote a bestselling book, and built a dedicated library in your NYC apartment! Yes, this is the same entitled Patty from above.
Entitlement mentality reduces self-awareness. Or maybe people who lack enough self-awareness have a greater sense of entitlement. It may be the same reason why no matter how rich some people get, they will always believe they are part of the middle class.
Without feeling entitled, if nobody gives you a leg up, no problem. You never expected any help in the first place. Instead of always waiting for something to happen to you, you take action to get what you want.
In the off chance something fortuitous happens, such as getting a 3-year reprieve from paying back your student loans, you will incredibly grateful. And the more grateful you are, the happier and richer you'll feel.
The fact is, the Supreme Court ruled against Biden's plan to wipe out $400 billion of student loan debt. Hence, there's no choice for student debt holders but to pay back their loans. In the long-run, paying back what we owe is a good thing.
Related: A Summer Job Landscaping A Rental Property With My Kids
Financial Samurai Podcast Episode About Entitlement
Here's an episode I recorded on curing entitlement mentality so you can be happier, richer, and more fulfilled.
Reader Questions And Suggestions
How do we reduce entitlement mentality? Is entitlement mentality the reason why future generations tend to squander the hard work and good fortune of previous generations? What goes on in privileged people's heads why they expect more things for free?
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Wow. This is a great post.
What blows my mind are the commenters here who made a decision to take on debt, but yet, do not feel an obligation to pay it back. People who do that are pathetic, lazy, and yes, entitled.
I would bet they also voted for Joe Biden, have multiple social media accounts, and most struggle to think for themselves. Yes I said that. Sorry. Not sorry.
Wake up and be accountable.
If you voted for Biden, who got elected by making a campaign promise about erasing your debt, which, by the way, he knew he could not deliver on it everytime he said it, then you got played. Are you better off? No. None of us are.
So quit your crying and make a smarter choice next time.
I have a cousin who was complaining about not getting his college loan debt erased.
I told him- “Nobody cares. Work harder.”
I bet these commenters are also on Facebook, Twitter (or whatever it is called these days), Instagram, and Tik Tok. You are on these because you have a craving for attention and you may need therapy to get that addressed.
And yes, Mark Zuckerburg is a genius. He realized that people have this craving, and he came up with a way for all these people to get that demand satisfied.
But are you really satisfied? No- you are not. That’s why you keep posting, and posting some more (and not working your job) on all those platforms. Be brutally honest and answer this question- Why do I feel the need to do this? The answer is you have a need for attention and doing so makes you “feel better”. You are a “Look at me! Please look at my post and give me a like so I get the attention I so desperately crave!
If you were truly satisfied, and content, you would see that you do not need social media. Your use of it is only making the creators of it wealthier.
Wait a minute. Maybe I will start my own social media platform. Nah.
Again- Not sorry. The truth can hurt. That’s how truth and consequences work. You cannot avoid them. Truth always, always eventually rises to the surface, and consequences are always experienced. None of us can avoid these two things.
There will always be entitled people at every level in a culture.
But if enough of us made the decision to be the best version of ourselves ( to give it my all every day in every situation, and be accountable for my decisions, my words, my actions, etc. ) then the world will be a better place.
Have a great day!
I have trouble relating to people complaining about having to pay back their student loans. I was born into a working class family. Never even knew that college was an option. Worked full-time in a hard physically demanding job for a few years before I went to technical college part-time while working. Found out I was pretty smart. Got a full time job from that 2 year degree. Then decided to go to university. Took me 10 years to get a BS while working full-time. I was scared to death about even taking out a loan so paid as I went. I don’t understand people taking out loans for degrees that won’t give you a good living. It’s not very practical. I think that a total student loan dollar amount should be equal to one year of the average income expected from that degree. I think counselors do students harm by not guiding them into a useful degree if they have to borrow to go to school.
Good lord. Does Entitled Patty actually have Persian or Belgian rugs in her home library?
Greetings, Sam!
As someone who is your proposed theoretical ideal in practice, I find myself really disagreeing with you here.
I had already paid off my student loans after 11 years of income-based repayment plans with a Math/Physics major degree from a State School. Then the pandemic hit, stalling student loans. C’est le vie.
My husband has student loans from his more recent CIS/SW Engineering degree from the same state school that did benefit from the delayed payment – we used the opportunity presented to completely pay off other higher-interest debts, and are planning on how best to pay the loans off A.S.A.P., to give ourselves every advantage of life without interest.
While it is inconvenient to us to have to start paying back loans, I propose it would have been beneficial to the entire economy to absolve the proposed 10K of student loan per user for all existing loan holders. Ours (my husband’s) would have been completely paid off, as I’m pretty sure MOST people with student loans would have experienced. Not sure what Patty was expecting, but even 10K would have clearly made a dent. In return, I would have had to pay what, an extra $50.00 a year in taxes for the next 10 years to pay that off? Even if it were $5000 a year, that’s worth it to me – in two of those years I would have paid the debt off anyway, There’s also the added benefits of helping others pay off theirs, & the government requiring society to reinvest in education? Heck yes, sign me up.
Others have brought up the differences in education spending from the government for the different generations (decreased over time), a stark difference in the cost of schooling (significant increase in costs, partially as a result of reduced gov’t spending), and starker still the stagnation of wages over the same time period. All of this while education has become a very profitable industry and has hardly invested any of those profits into worthwhile coursework (looking at you, CISO courses).
However, what about the value of education as an investment in our society? I understand the ROI for an individual should be assessed, and agree with that point for all except this setup, but why can’t we consider the ROI for our society and restore some of the taxes on corporations to repay what they profit off of requiring as entry-level qualifications? I understand we should pay our loans back when and if we can, but why can’t we advocate for others to get relief when it would benefit everyone?
Why are we allowed to conscript our youth with debt as a society in exchange for the best option for their future, with minimal oversight? Then we write them off entirely for having ‘chosen poorly’, so we feel justified in a refusal to pay our duties to our country? If any one of these youths came to you, telling you their most practiced, best available skill set & talents were in writing or art, & that was their best shot at a good investment, what would you have told them to do? Forego those dreams, desires, and drives to be miserable for 10+ years, yet again to be at the bottom of a corporate barrel because of their lack of natural talents in the business driven fields? What would you tell me, who tried to apply their science degree in their work and got Bupkiss in return, because of economic busts & other restricted choices along the way?
That I am somehow ungrateful? That I am somehow ‘entitled’ to think that repayment to debtors for their unpaid, unfairly compensated & stolen labor by absolving a debt, a made-up number, a lie, is justified? I have already repaid such an unjust system. As distasteful as Patty’s seeming opulence may seem to most, I’d rather let her off the proposed 10K than allow a person who had made better choices of their Poop Pie offerings with less income to suffer from such a burden on their lives.
This article’s treating of debt & desire for debt absolution as though it is a personal moral failing, instead of as a sign of system failure that debt is required for most participants, is vile to me, and it comes off as extremely privileged (lucky) and entitled (tax-free) as an article. Your opinions are usually better than… This… so I hope you come around soon. Thanks for all of the actionable advice you normally give & for taking the time to read through an alternate perspective on this issue, if you do.
Thanks for your thoughts.
If you are poor, unemployed, or unemployed, I get it. If you are privileged, like Patty with her dedicated library and private university Ivy League degree, I don’t get it.
The question is: If you don’t pay back your student loans, who is? If the majority start thinking they don’t have to pay back their debt, the entire lending system collapses and there would be a massive downturn, hurting everyone.
You ask to a college graduate to be practical or follow their passions? If they have no money and you have debt, then the answer is to be practical and work on your dreams during off hours.
Depending on the government or others, to help out financially will be filled with disappointment. Therefore, I think it’s best to focus on what you can do on your own.
I disagree with your assessment for the student loans, you are not taking into consideration the many of money hungry universities, colleges and private schools that charged outrages pricing, putting students into massive debt, for the rest of their lives and most of the them may not have had any success in their chosen field, as an advanced society the real problem is regulating the student loan industry, and now they need to clean up their mess to give students hope that they can still succeed in this country even if they made a bad decision, or cannot afford to pay back their student loans on their current wages.
Maybe there needs to be a process to put student loans into two categories, those that truly need the help, and those that are just looking for free money.
Happy and Safe 4th of July!
I taught CS courses at a South Carolina community college for 25 years. Most of the students were first in their family to go to college. Many of them were also going free because their Pell grants paid for their classes and books plus a little bit extra. At 17 or 18 years of age they were expected to make a very important long term financial decision on whether or not to get a student loan in addition to Pell.
I would assume that 100% of the readers here would say, “no!”. Unfortunately, that’s not the decision that would be made by the young student. When they log into their financial aid they would see a “loan” button and when they pushed it, $4,000.00 would be deposited in their account. It would be just that easy each term. After two years of college (most took three years) they would owe, at least $16,000 in student loan money.
The money they received was not used for ski trips or spring break in Mexico. They used that money for their living expenses and to help out their families. The money was used to live. Most worked while going to school full time.
Graduation means they need to start paying back the loan. With income based payments, the payment went to only part of the interest on the loan so each month the loan balance increased even though they made a payment.
They are now trapped in a debt they can not escape. They could continue their education and pile on more debt or just continue and hope that some day they can make enough money to get rid of the debt.
Debt relief was not to help rich students although some might get relief. It is to take the boot off the neck of poor students who made poor decisions as 18 year olds who didn’t know better. Imagine playing on a debt for 10 years and owing twice as much as you borrowed.
This scenario is played out by thousands of students over the years times 16 community colleges in South Carolina and then times that number by 50 states. The problem isn’t the moral hazard of debt relief but a broken education systems that hooks young people to a lifetime of debt.
Sam,
It is interesting to me the number of college students that believe they are owed a college degree and should not have to pay for it.
I graduated in 1979 with an engineering degree after working for four years to save up money to go to college and worked as a machinist, mechanic, and any other jobs that I could make money at and learn something that would help me later when I did get to college.
After four years of scholarships, grants and over $10K in loans, I got my bachelor’s degree and was the highest paid engineering graduate in the class of 1979.
Now after 40 plus years as an engineer, I have retired and have a comfortable amount to take me through retirement with my wife.
I paid back ALL of my student loans, because I knew that without them, I would not have gotten that degree and others deserved that same chance.
But then, I got a degree that was worth something once I graduated and that people would pay me well for my skills and knowledge.
Many of the whining individuals who do not wish to pay back their loans, got worthless degrees in women’s studies, social enlightenment or Under Water Basket Weaving.
So, to them, they cannot find a job, let alone anyone who wants to hire them because their attitude is that they should be making the same money as the Finance, Technology or Engineers graduates.
This is the reason we are continuing to see the downward spiral into the haves and the have nots.
I blame Mommy, Daddy, and a lack of high school guidance consulars for their complete lack of knowledge on what jobs and careers pay once you have a degree and what it costs to get that degree.
If you are taking out $50K in loans, and the job/career only pays a senior level person $22K per year…RETHINK THE COURSES, DEGREE, and loans you are taking out to get that college degree.
That’s what I did when I thought about getting a degree in theatre technology, that at best would have paid me $25K a year verses over $125K plus stock.
Great column and love reading it every time you send one out.
Thanks and my best to you and your family.
my perspective:
I paid my own way working the Bar scene $1.82/hr & slaughtering lambs/calves on our property the odd weekends & holidays. Got $10/side for lamb & $2.95/lb for the 600-900lb beef. Lambs were 25-50cents a head at auction, calves $50-$120 a head depending on size & health.
I could afford to restore a $600 MGTF 1500, but gas was 30-45cents/gallon, insurance $15/month. Lived at the university residential college for about $25/week with 3 meals/day & $15/week during summer vacations, with the 3 meals/day, so I kept my room.
Then we got conscripted … stayed in the ‘reserves’ & finished university, but gained a LOT of discipline.
Once employed I buried myself in debt buying rental real estate & achieved enough passive income to survive & retire before 45. Never looked back, yet most of my ‘Ivy League’ colleagues worked until 65+, with many picking up side jobs to supplement their retirement.
Our kids all graduated without the proverbial millstone of student loans, because of scholarships, rental property income & many summer jobs. All earn 6 figure incomes.
In 2019 our 26yr old daughter qualified & bought a 5 bedroom/3 bath home in Scottsdale & her passive income alone pays the mortgage.
It can be done, without the false privilege of an Ivy League education that leaves one financially devastated !!!
IMO, the entire college loan process is practically predatory lending. When you buy a car or house, where on that statement is a statement that “WE” will help you, or the bottom line figure comes to ZERO? I was shocked to see this on our daughter’s college financial aid acceptance letter. There is no “we” and it’s not “zero”! That, and emotions play into why people borrow in the first place. After all those high level math classes, no one actually sits down and does a proforma back of the napkin calculation of payback, nor discuss worst case scenarios (no job, underpaid job, death of student, etc…and what it means to cosign the loans!)
I don’t feel grateful for the loans I was lent. I wish they would not have let me the money so I wouldn’t have wasted all that time going in the college and racked up all that debt for something that did me absolutely no good.
I am disappointed with a society (parents, teachers, guidance counselors, aunts/uncle’s, parents’ coworkers, church parishioners, etc.) who told me: don’t worry about the cost, just go to the best school you can and get good grades, because the degree will pay for itself and then some.
I graduated cum laude and the only honor it has bestowed on me is a massive amount of debt and a sense of futility. Absolutely no career, let alone one that justified my time, debt, and lack of sleep. I’d gladly return my degree for a cancellation of my debt.
You keep trashing elite colleges simply because you couldn’t make it to one.
True. Although in this case, William & Mary has a 36% acceptance rate versus 63% for Champlain College. Go Griffins!
The issue is that there are people who would rather go to an Ivy League school and get a degree in something that doesn’t pay while taking out student loans for all/most of it. If a trust fund baby wants to do this they can do so. If a person has to take out student loans then they aren’t a trust fund baby. Anyone who gets a degree in social work, teaching, writing, the arts, etc. from an Ivy League better have an ironclad backup plan.
Then you have the pragmatists who go to a state school, major in something that has demand and pay their way through college so there is no need to take out student loans. Or a high school student who starts early, has the skillset to make double minimum wage prior to graduating high school and can work part time during college to avoid loans. This same high school student chooses a major in a field with tons of demand and stands a high chance in having a small amount of student loans forgiven. The remainder of college was paid for by scholarships because the student had perfect grades throughout school and many extracurriculars.
Without fail, 100% of the people I know who did well as photographers either had mommy and daddy finance their studio or had a spouse who paid the bills. Ditto for all those other majors that don’t pay ditally squat. Same goes for professions that pay very poorly yet somehow still convince employees their best bet is an expensive master’s degree from a school such as Berkeley, social workers…I’m looking at you.
And, for millennials forward all this information is easily accessible and online. When I went to school it required going to a library where the latest book on labor statistics was from the 70’s (in 199X). The nearest decent sized city library was over two hours away and I didn’t have a way to get to it, the ability to check a book out or drive over two hours to return a book.
I find it very interesting that the ones crying foul about student loans are millennials. They may have lots of excuses but what they don’t have as an excuse is a lack of information/access to information. Former generations had just as much in student loan debt as they do but you don’t see them crying and whining about paying it back.
110% agreed with your statement , well said .
You’re got to be kidding me. I’m not a millennial and I never had student loan debt, but the cost difference for college from one generation to the next is incredible. Why exactly do you think Millennials would be complaining the most? Perhaps they’ve had the most college debt to bear while their income level and the income level of their parents have not kept up at the same pace.
I think the point is to be more careful in the financial analysis of taking on major debt loan debt, especially if you want to study something that doesn’t pay well.
Being able to go to Columbia and study writing, or go to a private university few have ever heard of is a luxury that only the wealthy or those with major scholarships can pursue.
Sam
Patty should’ve just read your book, or Kiyosaki or David Bach or… and saved all that tuition money. Or picked a degree with better ROI.
I’m disappointed that you included the incorrect and useless “bend the stats to say what I want them to say” about college and high school earnings. That old adage remains an old favorite for anyone that wants to sell higher education and justify the stupid costs of it. It is no longer true, and hasn’t been for awhile, and needs to be left to Buzzfeed and Yahoo, not writers such as yourself. Other Yahoo and Buzzfeed article favorites that we no longer validate and repeat are “buying a home is the best investment you can make” or “paying rent is like throwing money away” as we now know better and refuse to accept and validate these false statements.
I’m sure that Mark Zuckerberg and Bill Gates 200 billion net worth without a college degree is not in that database, nor is the net worth of the 27 billionaires in America with only a HS diploma.
Chipotle managers make $72k a year without a need for higher education.
We need to stop telling young people that you NEED to go to college at a time where they don’t know what they want to be when they grow up. They listen, go to college and spend 75k, figure out they don’t like what they’re pursuing and go for something else and spend another 75k all so they can enjoy the 150k in debt and 52k starting salary which is 20k less than the chipotle manager who is potentially making 80k now.
I fail to find the logic in all this college degree vs HS diploma and correlated earnings talk.
Give me a broken laptop, a bad internet connection and a link to YouTube and I’ll write circles around Entittled Patti all day after 4 years AND have 76k in VTSAX growing until retirement.
Thanks for letting me get this off my chest and thanks for a library of great articles, you’re awesome and I look forward to new Financial Samurai articles each week.
I’m not sure what you mean about your beginning paragraph. It is unclear as it seems inconsistent. If you could elaborate, I would appreciate it.
I’d love to check out the business you run right now. Please share.
Un-ironically, Patty proposes to privatize the gains and socialize the costs.
Exactly!
Estimates show that free college/university education would cost America less than 1% of the federal budget. The $8 trillion dollars spent on post 9/11 Middle Eastern wars could have paid for more than a century of free college education (if invested and adjusted for future inflation). The less than 1% cost for fully subsidized higher education could be deviated from the military budget, with no existential harm and negligible effect.
Nice data. We are going towards free education with community college. But it’s a slow process.
Yes, the politicians spend taxpayer money stupidly – therefore politicians should spend more money stupdily on my favoriate project. :(
As always great blog Sam – thanks for all the challenging content!
I think something is off with those calculations. 1% of the US Federal budget is around $60 billion. Annual college spending is over $600 billion a year, or 10x that (20 million students * >$30k/kid/yr). In order to do it with 1% of the federal budget, we’d need to reduce the cost by 90%. Government subsidizing it further is not going to do that.
I agree on the $8t for the middle east nation building campaign was a huge waste – the war itself was actually very cheap lasting just a couple days, but 1% of the budget will not cover high ed for everyone. Perhaps it would cover community college for everyone, though.
Oh gosh, Entitled Patty probably has a big enough apartment for her library. I’m amazed at people like her who would spend so much time and money to study writing. I don’t understand all the schooling as it doesn’t make sense unless she wanted to become a teacher or get a PhD in writing to become professor. Entitled Patty is a good example of entitlement. She should be thankful that she had a three year break.
I took out loans for my MBA program and paid it off the first year of my full-time job. At the time I was kind of lost in life but still wanted to pursue the piece of paper. I felt like I disappointed my Chinese parents by dropping out of law school after 1L. So I worked for a year and then went for the mba.
I didn’t expect my parents to pay for it so I took out loans and paid it off myself. I still can’t tell whether the mba was worth it or not but I will assume that it was! :)
I’m sure it was worth it!
Sam,
College debt is a complicated situation and this nation needs to come to a solution as to why college got so expensive in the first place. College like housing is now unaffordable for most working people in America. That was not the way it used to be, especially not for the Baby Boom generation. My parents went to college and it was paid for by the government, my Dad had to pay a little bit for on campus housing. He tried to lie to me and tell me that he had to pay tuition, but I caught him in the lie.
The Boomers benefited from a system that taxed corporations and the rich to pay for benefits for middle and lower class workers. That support system is almost completely gone. My state only funds about 30% of the cost of college now and the students themselves have to cover the rest of the bills with loans or jobs. When my parents were growing up my state covered 90% of the cost of college and grants for low income students could cover the leftover 10% for most people.
State colleges are still a bargain for the most part and students should definitely go there, but there are corporations in the US that advertise and market to students and sell them lies and that must stop. There have dozens of online college that promise high paying jobs in exchange for high tuition and then after graduation deliver none of that. That should not happen in our country.
I agree with you that loans taken out to attend colleges should be paid back, and I did just that, too bad I can’t afford a house in the city where I live. There appears to be little benefit in my college degree and I am typical for many people my age. Of course if I had a wealthy spouse to help with the bills maybe my life would be different, but sadly not all of us can get married for one reason or another.
Anyway great post on a complex issue that needs a real and permanent fix. The current sucks for young students and needs to improve.
Hi Will – Hang in there. And yes, finding an income-earning spouse makes affording life much easier. Expenses are shared, and saving is easier.
I hope there is increased awareness for college-bound students regarding focusing on a Return On Investment and what to study.
Colleges do not guarantee employment for its graduates, so the true risk reward is not aligned.
The rich pay more taxes today than they did before, both in real $, % of GDP and % of total pie. While nominal rates are lower, deductions are wayyyyy lower. Governments subsidizing items (housing, healthcare, and higher education) just makes their costs massively higher. Want the cost to come down? Get government out of it all together.
And 50%+ going to college is insane – historically that was 20%. Most – if not all- of the bottom 1/3 of college attendees would be better off learning a trade. And being able to take on $100K in debt for worthless degrees need to end. Personally, I’d make the college have skin in the game if the debt is defaulted on.
Two things:
1a) is that really her fancy ass library, and;
1b) if so, she has at least a 2bd apt for that rent in nyc seems like an awesome deal!
2) cumulative inflation since 2019 has been 20%. Any debt that any of us has had got nominally be haircut’d by at least that, more if one didnt have to make payments the last 3yrs (most student loans) as well.
I always believe in helping each other get a leg up especially when a shit luck happens or being birthed with a tough hand, but one still has to pull their other leg over!
1) Yes!
2) Good point!
Student loan was not available to me in NZ when I first moved here, so I had to take a loan on high interest to pay my first year university fees. I worked at least 60hrs/week on minimum pay while studying full time to pay for my living costs and paid off the debt. I worked fulltime the next 2 years while studying part time to allow me to cover all my fees and costs including the 4th year of my study when I returned to fulltime study. I resented my fellow students who had student loans during those years as they had more time to study or enjoy themselves than I did. But my perspective changed when after graduation my pay doubled instantly and as I had no student loan, I was able to save all the excess money for a deposit on a house a year later. Most of my fellow students had to wait 10+ years to be able to do that. I now look back at that time with gratitude as that set me up for a better financial future and early retirement.
Well done! The time to put in the extra work is when you are young and full of energy. The energy sadly fades as we get older.
I think a sense of entitlement speaks to a lack of moral character present in more people today. Our family believes that you work for what you want — you should not expect a free ride. If someone provides help, we should accept it with gratitude without expectation. A loan is made with a promise to repay, otherwise it would be a gift. The real problem is college is too expensive and they need to address that and better educate students of the long term financial impact of student loans. Living within your means takes strength and discipline which are traits that will serve us well in life. It is from this position of strength where we are able to help others.
“But a recession hits and your boss decides to save his secret crush and let you go.” Oddly specific.
Wow, “entitled Patty” has some issues. I feel very bad for anyone who ends up marrying her!
The jobs I’m about to mention may be more appealing to men than to women, but there are a lot of good-paying jobs out there that don’t require a college degree, such as welder, plumber, carpenter, roofer, or electrician. And these jobs have the added benefit that they’re not likely to be taken over by AI or outsourced to India. Maybe Patty should have become a welder, and done writing as a side gig. (You don’t need a college degree to be a writer. You need some education, but you can learn a lot for free on the internet.)
Sam, I have to know: is the picture of the library from the same “Entitled Patty” as who is complaining about repaying student loans?
Yes. I will make it clearer in the post.
Entitlement and a poor me spirit combined are the worst for achieving goals. No one owes us a thing. I do not assume anyone is going to help me besides my husband and myself working together and helping each other. I think being thrifty in the spirit our grandparents’ generation had to have to survive is helpful as an example to consider. Not going into debt for day to day items (I do not mean a mortgage), cooking often at home, a lifestyle of frugality, affordable hobbies and entertainment, thrift store shopping, not getting “disposable” decor or personal items but things you want long term…..
I think in our culture we can be somewhat spoiled as far as confusing wants and needs and our expectations.
Corporations and individuals can all walk away from debt through foreclosure and bankruptcy laws. And we all watched the federal government spend billions of tax payer dollars to bail out the banks in 2008.
Student loan debt sticks for a lifetime.
That being said, I lived with my parents during college (thank you mom and dad) attended a public institution, took out a few student loans for my graduate degree and than paid them off as quickly as possible.
So I completely agree that a sense of entitlement can drag you down and that you shouldn’t wait for the federal government to pay your debts. Unless you’re a bank.
We already have Democratic Socialist AOC, and she went to one of the most expensive universities in the world: Boston University.
I wonder if rich people who go to the most expensive private universities develop some type of Savior mentality. They don’t realize they live in this extremely privileged bubble, and can’t help but want to anoint themselves as saviors
Julie,
Why bring AOC into this? She was working in a bar when she ran for congress and beat an incumbent who had long ago forgot about the people in the district and took them for granted. The entire Baby Boom generation grew up with a Social democracy. The rest of the world modeled their systems after ours. Baby Boomers had everything promised to them by the government as a matter of policy. Cheap housing with loans guaranteed by the government, cheap manufactured goods guaranteed by the government, cheap cars, cheap gas, low taxes on the middle class.
Where those things today? They went away because we gave massive tax cuts to the rich, and allowed them to squeeze the middle class, so they did and they continue to do it and no one cares. Except maybe AOC because she knows how things used to be and so do the Boomers. Too bad they don’t care about their own children and grandchildren enough to give them what they had.
Funny that you think someone like AOC would solve these problems lol. I know this will give you a stroke but things were pretty cheap during Trumps presidency. In my area houses under 400k and gas never above 3$. You probably think I’m some hard right MAGA but I’m not. Even though I do lean conservative. Just think it’s hilarious that you think she would fix this.
Of course AOC won’t fix things, she doesn’t control monetary policy or interest rates, the spike in prices happened because the rates were kept at zero bound too long and money was essentially free for too long. Inflation was in check for a decade before. Gas was at $1.50 a gallon when Obama was president and $4.00 a gallon in 2007 when George Bush was. Trump had the worst economy since Herbert Hoover. The economy destroyed 20 million jobs in March 2020, worst jobs performance ever. Trump is a fascist and a horrible person.
You mean Covid killed the economy in March 2020
More like the foolish response to COVID killed the economy.
This example shouldn’t surprise anyone. For the last 20 years all we’ve heard is you can’t do this or that without the governments help. It takes a village. You didn’t build that business on your own. Your lot in life is because someone else at some time in history has wronged you or your ancestors. Your not paying your fair share. Constant class, gender and race warfare. We demonize our successes and celebrate victim hood. Patty should run for congress. She’d fit in perfectly.
Bill,
I love your response. It’s fun to read these comments and you are EXACTLY correct. While I’m old (48) and don’t really care anymore because I took, and paid back my own student loan, it’s now become entertaining to me, to watch the millennial generation continually cry about all the injustices they perceive.
I’m a self made multimillionaire. I grew up in a single family household, took loans to earn my college degree, paid it back, and went to work at age 23. By 35, I bought my first rental house and by 50, I’ll have 4 income producing properties owned free and clear. All the while, the business I created, borrowed money to finance then paid back MYSELF, now generates 450k annually. I provide great employment for 2 employees, and plan to ramp up my traveling throughout my 50s and beyond. No excuses or entitlement feelings here.
When Hillary Clinton made her speech about the village she never expressed or implied that the village would be paid for courtesy of the taxpayers. What she said is that it takes a village (doctors, educators, etc.) to raise a child. Note that everyone she mentioned are paid professionals. Since that time her words have been distorted and used to attempt to shame countless people into unpaid labor for sake of babysitting/doctoring/helping their kids because they don’t want to pay someone to babysit/doctor/help their own kids.
There is lots of media circulating around with people who think the following should be a “right” for everyone: daycare, preschool, college, healthcare, food and housing. I’ve started to see retirement added to the list but it isn’t prevalent in the media yet. I’ve yet to see anyone call out how absurd all this really is. A “right” means that you can demand a stranger give you these things or forcibly take them without any lawful retaliation. What this means is that a complete stranger can approach anyone and demand to be given money on the spot for any of these things and that person would have to comply. This person can claim in a court of law that it is their right to have these things and they demanded the cost of this service as their right. This person could also take the other person to court if they didn’t give them what they demanded with the justification that they purposely infringed on their rights.
My question is, who is going to pay for all of these things for everyone? There is a vested reason this is never mentioned. And not only that, but if I’m guaranteed all these things one way or another what incentive is there for me to work for any of these things? If I intend to supplement my own retirement then what incentive would there be to do this if the money I earn is taken away because a crack head demands it is their “right” to have housing and healthcare provided and this requires a 100% diversion of my retirement funds to achieve?
If the rich (which is a group the politicians are very careful to never define) are taxed to the hilt, that may pay for some of these benefits for a short period of time. What happens when the billionaires are taxed into being millionaires? So, tax the millionaires – but that will mean less funds can be collected. Providing all these freebies for everyone as a “right” isn’t feasible because there aren’t enough millionaires to do so. So, now we tax the middle class. In order to tax the middle class (another group the politicians are very careful to never define), they have to be working. So, we’ll define middle class as anyone working or receiving enough social security to be taxed. So, now all the freebies are means-tested and we’re back at square one.
Does anyone consider the fact that perhaps the politicians/writers pushing all these freebies as rights may have another agenda? I have to question if these politicians/writers understand the definition of “rights” Similar to those religions which promise their followers paradise and everything they want once they die? If you can get people to buy into it, why not? After all, no one has ever returned to talk crap about how they didn’t get their promised paradise, have they? Imagine being able to placate people by loosely offering what they want at some unforeseen point in the future.
IOW, I highly suspect these articles about giving everyone all these rights are all about placating the masses. I guess the carrot is better than the stick! You can bet that if these politicians/writers were approached by someone in the general public demanding $100K for their annual housing, daycare, health care, and college costs to be paid to them on the spot in full that they would be the first ones to change the laws.
I think it’s easy to feel entitled when a situation/benefit starts to feel like the norm.
For instance, take all the work from home folks that felt they were entitled to continue WFH as the pandemic eased. If the employer accepted their work product while they were WFH, why would they need to go back into the office now?
Another example, there was a time when you were charged for calls by the minute so it made sense for employers to provide an allowance to employees for personal cellphone plans for the occasional business call. Now that most cellphone plans have unlimited minutes, do you think those employees would recognize that receiving an occasional call isn’t costing them any extra money so they shouldn’t be entitled to a cellphone allowance?
Here’s a personal example. My organization provides for 6 weeks of time off per year. When I first started working, our department head frowned upon taking any time off so I might have only taken off one week a year. However, after my husband died, I realized how short life can be and started taking more time off. It also helped that this timing coincided with a new boss who valued work/life balance. At this point, I’ve consistently used up all 6 weeks of vacation every year and would be unwilling to cut back even with any new boss I may have. I’ve gotten used to the benefit and value from taking the time off, including annual trips that my friends and family know they can rely on me attending.
Maybe Patty has gotten to thinking that the government was able to do without the money for so long so why do they need it now? Totally agree that loan contracts should always be honored but just trying to understand why some people may feel entitled.
Parenting is tough because you don’t fully know how good of a parent you are until after your kids go off on their own.
Unfortunately, this is the only thing I can not agree with. Otherwise you’re spot on. If you have young children how would you know this? People are individuals who are unique and no matter how hard you try you may never get them to follow certain paths. They walk their own. Good luck with that though.
To clarify, you think parenting is easy, and you can tell early on whether they will be good adults?
If so, can you share how are you know this, how many kids you have, and what is the childcare arrangement like? Thanks.
To clarify, I copied and pasted your paragraph. Parenting is tough. My response is to “you don’t fully know how good of a parent you are until after your kids go off on their own.” I am your age but I have 3 adult children. You can’t tell early on if they will be good adults. Defining that -even writing it sounds silly. Your influence on them will last a lifetime, when they go off on their own path they will have many influences. You will always measure yourself as a good or bad parent but remember that they will have many lessons to learn as time passes and they will walk their own path. It would be hard to blame yourself as a parent for every bad decision they make as an adult. Be 5 steps ahead to move the branch out of the way, or let them trip and fall on their face. What did entitled patty’s parents do? Who knows? Lessons of life for your children become more complex as they get older. I disagree because it doesn’t stop and you will never not be a parent.
Got it. By any chance, did one of your kids get in trouble as adults?
The whole argument of entitlement vs non-entitlement is a nice little trap that can keep people arguing and feeling righteous one way or another. What the article doesn’t mention, similar to health care, is the expense of a college education here in the USA over against other countries. I’ve worked with Australians and Germans, for example, who just shake their heads incredulously at the insane costs of education, even public. They pay almost zero, they do pay fees, but it’s minimal compared to the burden US student face.
The most self-righteous and irrelevant people are those who have no skin in the game, don’t have expensive education or high childcare costs, and judge others. In other words, that’s you.
If Australia didn’t have natural resources, you guys would have a much lower per capita GDP. Because think about it. What have Australians created or exported to the world? I don’t know anybody who can come up with anything innovative that Australians have created.
Are you being facetious? I don’t see what this has to do with Australia’s GDP, but I’m sure you can find innovations from that country.
https://www.australiangeographic.com.au/topics/history-culture/2010/06/australian-inventions-that-changed-the-world/
Last year there was a survey of people holding educational debt, and around 70%-75% said that if debt relief ended they would still make their loan payments. Also, almost all of the people with very high educational debt, also have graduate degrees or professional degrees. They took on this debt as adults. Maybe they should sue the schools if they felt deceived. Would love to watch that show.
Thanks for the list. Now compare the 20 to the thousands of inventions from America.
Australian two cents on the cost of education debate and entitlement is useless since you guys have an affordable college education system.
Who cares? They have a substantially better life than Americans.
Proper health care
Proper public transit
Guns aren’t the leading cause of death for children
I could easily go on…its clear you dont even have a leg in this game.
The flip side of this is that it’s much harder to get into university in Europe, because it’s cheap/free.
U.S. universities pretty much takes anyone who has money and community colleges only required proof-of-life.
I would like to see data comparing drop-out rates in both places.
Related post: Best Life Hack For Americans: Taking Advantage of Canada
Ya not only is this false, but you can actually get your degree faster in the UK.
I think social media has really fueled the entitlement mentality. It makes me want to barf just thinking about how so many people can’t wait to brag about this and that, “look at me”, “I deserve this bc they have it” etc etc.
Personal finance needs to be taught in school. Honoring one’s debts should be engrained in every student’s core values. And this whole debt forgiveness movement is going to spiral out of control bc it sends bad messages
I can’t agree with this article enough. I’m shocked that anyone would knowingly take on debt and then expect others to pay for it.
A passion is not a job unless it pays all the bills. Anything less is just a hobby.
The USA is the only first world countries that even has to think about this problem.
The US education system is very poor by comparison.
Totally agree. You can always do hobbies when you’re not working as long as your primary job pays well enough so you don’t have to pick up a second or third job.
I fear that attending private school all your life warp’s your sense of reality. Maybe the parents, teachers, administrators are always there providing, addressing, comforting etc. So when this private school kids enter the real world, where it’s full on dog-eat-dog competition, they go into shock.
The private school kids still expect the world to take care of them. But the world doesn’t give a sh*t about them.
I would be interested to know if the lifetime earnings chart is only calculating 9-5 jobs or if it includes side hustle, investment, rental income etc.