An early message to the Class of 2013

Dear Class of 2013:

Next spring, much ink will be spilled with advice for you: to work hard, but not too hard; to laugh but also to cry; to love; and, perhaps most practically, to wear sunscreen.

I am not jumping the gun in writing to you now. If anything, I worry I’m too late.

In fact, if you are in the collegiate Class of 2013, I am too late. This message is for high school seniors. And that message is: Don’t wind up like Katie Brotherton.

Brotherton is a young woman from Cincinnati who last month wrote in her local newspaper that she’s overly indebted and rather hopeless, because she made bad decisions about her education.

OK, she didn’t write that last part. In her telling, she met “societal expectations” by earning bachelor’s and master’s degrees. But now she owes nearly $190,000, lives in her parents’ basement and “want[s] answers.”

She has a point, sort of. When she was in your place seven years ago, there might not have been anyone warning her against attending such expensive colleges or borrowing to pay for them.

Americans long have been told furthering their education is the path to prosperity, that the surest path involves attending the very best college they can get into, and, more or less, that the best college is the one that costs the most.

The first part is still true: You owe it to yourself to continue your education past high school. It’s the next two parts of the story that are coming into question.

Thirty years ago, it was different. Even 16 years ago, when I was a senior, and attending Harvard cost about $30,000 a year less than it does now, it was different. Since then, tuition has increased so sharply as to make the housing bubble and health-care inflation look like flat lines.

Is it still better to graduate from college than not? Yes: Housing prices peaked in 2006 and then plummeted, but people still pay for shelter.

But it does mean, if we could go back to 2005 and advise potential homebuyers, we would caution them about which house to buy, how much to spend on it, and not to believe home prices can only go up.

You, the Class of 2013, are like homebuyers circa 2005.

Yes, many of you should go to college. But you should also think deeply about which college and which major, including job prospects in that field. Others should consider technical school more strongly than they might have before now. In choosing a route, think very hard about the debt you stand to incur.

Washington politicians have made a big deal out of whether the federal student loan interest rate should return to 6.8 percent or remain 3.4 percent. On a $100,000 loan, that’s the difference between paying $1,151 a month or $984 a month … every month … for the next 10 years.

But halving the interest rate doesn’t make nearly as much difference as halving the principal: A $50,000 loan at 6.8 percent would bring a payment of $575 a month for 10 years.

You know what $576 a month (the difference between $1,151 and $575) would pay for? The better part of an apartment’s rent in Atlanta. Or a pretty nice new car. Over the course of 10 years, you could save up the down payment on a $350,000 house.

This is not a call to lower your educational ambitions. You still can, and should, try to make the most of your God-given talents. Nor is it a call to view everything in terms of money, only a reminder that money is the way you’ll have to pay back whatever you do borrow. Just ask Katie Brotherton.

– By Kyle Wingfield

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