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Student College Loans – Evil or Not? Part 5/5

Harvard University was the first to set up student loans in 1840 but these loans didn’t become mainstream until the 1960s? Source: Free from Broke.com

Did you know that in 1986, President Reagan eliminated student loan interest as a tax deduction. For 10 years, student loans were not deductible until President Clinton once again allowed the interest to be deductible in 1997 (Forbes).  However, Clinton only allowed the student loan interest to be deductible for the first five years the loan was in repayment; in 2001, the law was changed to allow the interest to be deductible for the life of the loan.

Then in 2007, President G. W. Bush, reduced the student-loan interest rate from 6.8% to 3.4%.

A few more facts to put the student, college-loan debate in perspective and what the media isn’t telling us:

The US has the 2nd highest number of higher education students in the world—4.75% of the total population. The U.S. Department of Education shows 4,861 colleges and universities with 18,248,128 students in 2007.

However, the median cumulative debt among graduating Bachelor’s degree recipients at 4-year undergraduate schools was $19,999 in 2007-08 and 65.6% of 4-year grads with BA degrees took out student loans, which means 34.4% did not.

Of the 9 million that borrowed, one-tenth (900 thousand) borrowed $44,668 or more, which means 90% (more than eight million students) borrowed less.

Graduate and professional students borrowed more, with the additional cumulative debt of a graduate degree typically ranging from $30,000 to $120,000.

How many borrowed the most?

More than 80% of students that are majoring in graduate degrees in medicine borrowed an average of $127,272, while 61.6% of those that graduated with only a BA degree borrowed an average of $23,494. Source: FinAid.org

If you recall, my $7,000 student loan in 1973 had the same buying power as $36,178.96 in 2012, and I paid it off in a decade by eventually working two jobs for three years.

That brings me back to the media. Why has the media been creepy-crawling all over how horrible college student debt is today when the facts say, “On average, most college graduates earn back enough to pay off their student expenses within a decade or so. Two studies by Baum found that graduates with a bachelor’s and no further schooling—or as the earnings literature calls it a bit too on point, a “terminal bachelor’s”—are on average able to repay their college tuition and loans, living expenses, and lost income from skipping four years of work by the time they turn 33. Private-college graduates spend more on their degrees, Baum says, but as they also have slightly higher earning power than their public-college counterparts, they still on the average earn back their college costs before age 40.”. Source: Village Voice

How about those medical students graduating as doctors with all that debt? Do you think they will earn enough to pay off his or her student loans?

Although the following site is moaning and groaning along with the national media, take a look at how much an MD earns after she starts practicing medicine: “The mean annual salary of a MD specialist is $175,011 in the US, and $272,000 for surgeons.” Source: MD Salaries.com

I’m really feeling sorry for these poor, suffering MDs. Maybe we should all chip in and help them pay off those student loans so they will have more money to spend on bigger houses and fancier cars.

In addition, I found this revealing: less than half a percent (0.05%) of those who graduate from college have student loans above $200,000—that means 99.5% do not. This may sound callous, but I do not feel sorry for these people. I paid off my student loans and so can they.

In conclusion, there is one more comparison that must be made. In 1980, the average credit-card debt in America was $670 per household, but today that number is up to $7,800 (per household)—an increase of  more than 1,160 percent. If we factor in inflation, that $670 would be $1,875.90 today—not almost $8,000.

In 1980, credit card debt was less than 4% of household annual median income. That number is16% today. In fact, in 1980 through 1994, the US saving rate averaged 8%, but in 1976, the personal saving rate was 12%.

However, in October 2011, that saving rate was at 3.6%.

Where do you think America’s so called debt-ridden college students learned to borrow to get what they want? If the nation lets young Americans (or their parents and/or grandparents) off the hook for that student-loan debt, these people will never learn.

Return to Student College Loans – Evil or Not? Part 4 or start with Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga.

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What is the Matter with Parents these Days? – Part 3/4

Yes, my wife and me felt it was more important that our daughter be happier as an adult than during her childhood, which is why we left the TV off, no video games, no social networking (at least until her second year in high school), limited the number of school dances she attended, no mobile phone for personal use and focused on her reading books, doing homework, learning ballet, piano, how to change a flat tire, install a toilet, change a lock, install drywall, tile a floor, etc.

And last but not least, we never bought or drank any brand of soda. There was water and then there was water (sometimes there was fruit juice such as apple or orange juice).

Needless to say, many of our daughter’s peers in middle and high school felt sorry for her, because she wasn’t having as much fun as they were. However, our daughter graduated from high school with a 4.65 GPA and was accepted to Stanford University (the only student from her high school that year) where she is starting her third year majoring in biology with goals to pursue a medical degree.

Contrary to popular opinion, she’s happy and loves to dance and play the piano and enjoys reading books. She has a boyfriend at Stanford she loves too and the two share many similar interests. She might want to be happy every waking moment and have loads of fun but she learned as a child that there is a difference between work, happiness, entertainment, bring bored and depression.

To achieve a better chance at adult happiness, her mother and me had to say no to many things leading to boring hours doing homework and studying in addition to reading books to fill the empty hours.

After all, according to the law in California (it varies by state ranging from age 14 to 18), one is a child until his or her eighteenth birthday. Then the child becomes an adult with a life expectancy of at least 84.9 years (on average) if he or she has a college education and earns an above average income. You see, education and income has a significant impact on health and a higher life expectancy and the average college graduate earns much more than a high-school dropout or high-school graduate.

Science Daily reported, “New findings from Harvard Medical School and Harvard University demonstrate that individuals with more than 12 years of education have significantly longer life expectancy than those who never went beyond high school. … Overall in the groups studied, as of 2000, better educated at age 25 could expect to live to age 82; for less educated, 75.”

In addition, The Economic Policy Institute discovered “While life expectancy has grown across the United States between 1980 and 2000, the degree to which people live longer has become increasingly connected to their socio-economic status.” The average life expectancy of the least well-off in 2000 was 74.7 years while it was 79.2 years for those that were most well off—meaning they had more money and usually a better education.

However, if left up to most children in the average family that does not live in poverty, happiness means not exercising, eating lots of sugary foods swallowed with gallons of sugary sodas, watching TV, listening to music, social networking, playing video games, hanging out with friends after school and on weekends, sending daily text messages by the dozens—and according to surveys and studies that is what the average child in America is doing ten hours a day.

Where are the parents?

Then there is this thing about parents blindly encouraging kids to follow their dreams without a realistic backup plan.

Continued on July 26, 2012 in What is the Matter with Parents these Days? – Part 4 or return to Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga.

To follow this Blog via E-mail see upper right-hand column and click on “Sign me up!”

 

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The Un-Civil War Between Old-World Values and New Age Parenting – Part 2/2

Larry Summers cites in his debate with Amy Chua that Bill Gates and Mark Zuckerberg dropped out of Harvard emphasizing what those “two” achieved without a university education.

While Gates was building Microsoft and Zuckerberg Facebook, do you believe these two billionaires spent ten hours a day doing what the average American child (raised by SAPs such as Summers) does to enjoy the first quarter of his or her life?

Summers doesn’t mention that Warren Buffet, one of the richest men on the planet, attended the Wharton Business school at the University of Pennsylvania for two years then transferred to the University of Nebraska-Lincoln. Working part time, he managed to graduate in only three years.

Summers doesn’t mention that it is common that the top one percent of executives with annual incomes of $500,000 or more often have Ivy league educations from universities such as Stanford, Harvard, Yale or Princeton.


“Asian countries value education more than other countries.”

Summers doesn’t mention that the top 15% of the upper-middle class are highly educated and often have graduate degrees while earning a high 5-figure annual income commonly above $100,000.

To be specific, the median personal income for a high school drop out in the US with less than a 9th grade education is $17,422, and with some college that medium income jumps to $31,054, while a person with a professional university degree earns an annual medium income of $82,473. Source: Wiki Academic Models (this source was citing US Census data).

It’s okay if Summers and his fellow SAPs let their children and teens have fun the first eighteen years of life, but don’t forget, the average life span in the US is 78.3 years.

What are those children going to do for enjoyment while working to earn a living the next 60.3 years as an adult?

Most children raised by Tiger Moms such as Amy Chua shouldn’t have to worry. Those children (as adults) will probably be in the top 15% of income earners and enjoy life much more than those earning less than $18 thousand annually.

Learn more from Costco Connections “Is College Worth It?” or return to The War Between Old-World Values and New-Age Parenting – Part 1

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

This revised and edited post first appeared on iLook China January 31, 2011 as Amy Chua Debates Former White House “Court Jester” Larry Summers

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Posted by on April 25, 2011 in Education, family values, politics

 

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Parenting 101 — the Amy Chua Controversy

I’m sure that Amy Chua had no idea she was about to light a Baby Boomer fuse that would explode when she wrote her essay published in The Wall Street Journal about Why Chinese Mothers are Superior.

In 2000, Paul Begala, a political strategist for President Bill Clinton, wrote in Esquire, “The Baby Boomers are the most self-centered, self-seeking, self-interested, self-absorbed, self-indulgent, self aggrandizing generation in American history.”

Begala was right.

Starting in the 1960s, the Boomers also gave birth to the narcissistic, self-esteem generation.

When Amy Chua’s memoir, Battle Hymn of the Tiger Mother went on sale, my wife and I went to the local Barnes and Noble and bought a copy. It took us more than a week to read the book. My wife went first.

However, the morning that Chua’s memoir went on sale, dozens of one-star reviews appeared on Amazon.com condemning the book before anyone had time to read it.

Later, Amazon.com deleted many of these critical reviews that were bitter, caustic, personal attacks on Chua’s parenting methods and had nothing to say of the memoir. It was obvious that most if not all of those early one-star reviews were based on the essay in The Wall Street Journal.

Nancy (not her real name), who works for Barnes and Noble (where we bought a copy of the memoir), told us of an experience she had substitute teaching in a girls P.E. Class. She said there were about 150 girls. Half were Asian and half were Caucasian. When Nancy told them to sit and read or do what they wanted, the Asians took out books and studied. The Caucasians started to text, do makeup and gossip.

Studies show that the “average” American Boomer parent talks to his or her children less than five minutes a day and more than 80% never attend a parent-teacher conference. Boomer parents are so self-absorbed with other interests that TV, the Internet, video games and other teens become substitute parents to their children.

However, when most Chinese mothers (or Asian American) come together, their conversations focus on their children and education, which explains why studies show Asian-American students have the lowest incidence of STDs, teen pregnancy, illegal drug and alcohol use and the highest GPAs, graduation rates from high school and highest ratio of college attendance.

What do you think the “average” Caucasian Boomer mothers talk about when they get together?

A close friend of mine, who isn’t Chinese, read Amy Chua’s essay and many of the comments attacking Chua for her tough stance as a mother. He said it is obvious that Chinese mothers love their children and American mothers don’t because love means sacrifice.

Discover Recognizing Good Parenting

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Lloyd Lofthouse is a former U.S. Marine and Vietnam Veteran,
who taught in the public schools for thirty years (1975 – 2005).

His third book is Crazy is Normal, a classroom exposé, a memoir. “Lofthouse presents us with grungy classrooms, kids who don’t want to be in school, and the consequences of growing up in a hardscrabble world. While some parents support his efforts, many sabotage them—and isolated administrators make the work of Lofthouse and his peers even more difficult.” – Bruce Reeves

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Lofthouse’s first novel was the award winning historical fiction My Splendid Concubine [3rd edition]. His second novel was the award winning thriller Running with the Enemy. His short story A Night at the “Well of Purity” was named a finalist of the 2007 Chicago Literary Awards. His wife is Anchee Min, the international, best-selling, award winning author of Red Azalea, a New York Times Notable Book of the Year (1992).

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