Vincent Safuto’s Weblog

Notes and observations

Sign now … and regret it later

Culinary students hoping to be the next Emeril Lagasse or Rachael Ray have discovered that while whipping up a soufflé in front of a TV camera – and getting paid big bucks for it — may be a snap for the big kitchen stars, the ordinary chef at the steam table may be drowning in debt while stirring the gravy.

A New York Times story some time back told the sad tale of some people who had signed themselves deeply into debt to attend culinary school, then found that not everyone gets a cooking show, a cookbook deal or even a good-paying job in the industry. True, there are plenty of cooking jobs out there, but the pay won’t set the world on fire, or make a big dent in those student loans.

More recently, I read a story in the Tampa Tribune about university students who showed up at a job fair, but found most of the jobs were minimum wage and no benefits, in the fast-food industry, or commission sales jobs. Several students said they had tens of thousands or hundreds of thousands of dollars in debt to pay off, and those jobs wouldn’t cut it.

With all the stories about student loans, it’s more important than ever that young people think before they sign up for a loan for college.

I consider myself very fortunate because when I went into career change mode in my mid- to late-20s, I had a job at the post office that paid me enough to support myself in a decent middle-class manner and leave enough left over for a public college education.

True, it took me more than six years to land a four-year degree (and I also did some graduate work), but when I left college for the last time in my mid-30s I owed nothing to no one and was able to take entry-level jobs in journalism that paid me just enough to live on and offered great work experiences.

I can still remember attending the community college and university orientations and having to sit through the presentations for financial aid, which were more like “50 Ways to Go Over Your Head into Debt” than anything else. In addition to the regular loans, there were emergency loans for those times at the end of the month when you were out of money. Few students asked about the interest rates, the terms of payment or the consequences of defaulting.

Colorful brochures showing happy young people working in highly-paid and fulfilling jobs told of the wonderful things that could happen if you borrowed money for your education. But none mentioned that the smiles of the loan personnel could turn to snarls if you couldn’t make those payments, or the consequences for the future.

Even worse, credit cards were marketed intensely all over campus. It saddened me to see students filling out applications for the plastic just to get a sun visor or drink carrier. One ad for a card, on the bulletin board in nearly every classroom, featured your typical male college student, circa 1990, declaiming, “I was like, ‘Just because I’m a college student doesn’t mean I can’t have a life.’ ”

Lesson: Credit cards mean having a life. Makes you wonder.

There were stories back then of credit card companies figuring Mom and Dad would cover their son’s or daughter’s debts, and that was the logic for issuing the cards. One student’s fondness for Mexican food plus a place that delivered and accepted plastic added up to a lot of trouble, a story reported.

Oddly enough, the two colleges I attended, while they permitted the companies to pitch the cards relentlessly, did not have the facilities to accept credit cards for either tuition or the on-campus bookstore. It was better for me to pay my tuition by check, but going on campus to buy books and having to carry a wad of cash was a dangerous endeavor. Right after I left school, though, I heard that they started accepting plastic for tuition and books.

I have often wondered just whatever happened to working your way through college, and attending part-time or stopping for a semester or two if you lack the time or resources to go full-time. We’re fixated on the four-year college experience as if it were engraved in stone somewhere, when more flexibility can stretch out the cost and lessen the stress as well. In these days of longer life spans, taking two or three more years to get a degree cannot be such a disadvantage. At no job interview I ever went on did the interviewer ever see my unusual college experience as something negative; indeed, working one’s way through college – even if it was slower than the norm — shows discipline, commitment and focus.

The culinary school experience mentioned in the Times reminded me of the boom, several years ago, in technical training schools for computers and networking. I was interested in learning some new skills, so I set out to obtain certifications but was working full-time and had other commitments. I discovered that there were self-paced courses you could take at home, and I even bought a second-hand computer to use for practice and training.

The biggest expense was the cost of taking the tests, and a local test administration facility’s personnel were disappointed to hear that I did not want to take out a loan (at 18 percent interest) to take their course, but just take their certification tests. They let me take the tests, and going self-paced I passed them all.

Others went deeply into debt on the promise of lucrative jobs and signing bonuses, but when the tech job market crashed they were left in a deep, deep financial hole. I felt sorry for many of them, and hope they’ve regained their confidence and good credit. As it turned out, I did not use those technical skills but I did learn a lot about setting up my own personal home network, so it wasn’t a total loss.

With all that’s going on in education lending today, people need to take a step back and think of the consequences before signing all those papers and borrowing all that money. Credit is not a bad thing if it is misused. Maybe I’m biased because I’ve bought six cars on credit (and paid them all off early or on time) and four houses (sequentially) through mortgages, as well as using credit cards (sometimes too much, but always paid off on time) responsibly.

But you have to be careful when borrowing money for anything, as today there is little flexibility among lenders and they have a lot of power to affect your life for decades to come if you don’t pay them back on time. They may not break your legs like on “The Sopranos,” but they can do a number on your finances and your future.

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October 11, 2008 - Posted by | Education, Living in the modern age | , , , , , , , ,

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