Young People Are Screwed: Here's How To Survive

It is interesting how many people are misinformed about this. The government hasn't and can't do anything to "prop up" house prices. It only sets the prime interest rate, which affects the ability of people to borrow money (specifically does it affect ARM mortgages), essentially the ability of people to "afford" housing, or the rate at which they'll be able to convert the debt behind their mortgage into equity.

Here is an interesting fact: My house whenever I can afford it, will _not_ be the most expensive thing I will have to buy in my life. My retirement savings are.

Again, not true. As you get older, as you're converting larger and larger portions of that debt behind your mortgage into equity, it should be close to being paid off by the time you reach retirement (the theoretical pie in the sky for our generation). So the amount of "retirement savings" one needs depends on what kind of housing situation one is in at the beginning of retirement. The sub-prime lending crisis occurred because people who HAD worked their whole lives, had accumulated their retirement savings in their houses or whatnot were literally swindled out of that savings by real estate people selling them "refinance" lemon loans and banking on the commissions.

It was such a pervasive piece of propaganda nonsense that entire groups of my peers, with their wallet terrified parent's blessing, made long reaching life long decisions not to pursue an upper education but try and land in the best possible vocational job.

I personally was so terrorized by it that I flaked out and never even took the SATs, convinced that my mediocre high school GPA had damned me to a life of cleaning drainage gutters, resurfacing outdoor wooden structures or at best tech support in a call center that, defeated, I didn't even try.

It wasn't until several years after graduating High School, fed up with dead-end bullshit jobs that I signed up to the local community college almost on a dare. I met with a very old, nearing retirement, placement councilor who completely turned my world upside down.

He carefully and patiently explained to me that the myth the education system propagated, the one that I, my classmates and our parents had been fed, was a complete a total line of nonsense. I sat there, in raw disbelief as I found out that I could finish my first two years of my undergrad there, then transfer every single one of my credits and start as a junior at the local state university. And I could do it at some ridiculous price that I, even making next to nothing, could easily afford.

I thought he was a liar, a schemer who was trying to put me onto something. Everything he said sounded like such a polar opposite of the system described to me during my teenage years that I went to another campus for the school and spoke to a completely different councilor who only confirmed everything, and also told me that the degree program I was interested in was so close to another program that if I took 2 more courses I could get both degrees almost for the price of one.

It's like spending a fortune on off-sale, high fashion brand shirts only to find out that if you wait a season you can pick up most of the same stuff at discount clothiers like Ross for $10 a shirt.

It took me a long time, as I was working and had significant living expenses to handle, but I finished my B.S. in 5 and a half years and my M.S. in 3 and a half -- debt free, paid for either on my own or by spending 20 minutes filling out grant applications at the student aid office.

It was madness. And it was the truth.

edit

a previous set of back of the envelope numbers

http://news.ycombinator.com/item?id=3753975

That's not entirely correct. The tuitions at many private schools these days lists at ~$200k for a 4-year undergrad and does not include expenses.

For example

https://undergraduate.admissions.gwu.edu/costs-attendance

Lists just tution at $45,735 while R&B is $10,530. So, assuming the rates don't change, tuition for an undergrad is $182,940 and other expenses run another $58,600 for a grand total of $241,540. So yeah, it's at around your upper bound, but just the difference between your lower and upper boundary was literally the entirety of my undergrad + grad degrees.

What that graph really shows is how deep the Great Recession was-- it should be compared to the Great Depression rather than the garden-variety recessions we've had since then.