The High Price of a Free College Education in Sweden

[THE Bigzoman]

So the high price of free college has nothing to do with college?

What exactly is the point of this thread?

Paying for the costs of living while attending college is college-related, yes.

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You are working on the basis that these cities that have colleges are somehow completely isolated communities (hint: they're not). A loaf of bread in a grocery store costs the same in a city of 1,000,000 with a college, as it does in a city of 5,000 with no college. Same goes for all consumables and clothes, books etc. etc..

in terms of real prices maybe. you'd probably se different nominal prices.

[Micke]

<- from Sweden

Can't really compare to other countries but I would say the nr 1 issue for students in Sweden is reasonably priced housing. There's a major lack of apartments available which drives up the price. The rent can easily be $600+ which is around half of your CSN loan.

[Vash The Stampede]

How did Sweden get Bernie Sanders? I is confused.

[Witchblade77]

Assuming 20% down payment, the going rate for 30-yr fix is between 3.4 – 3.5%, and 15-yr fix is 2.6 – 2.7%. On a 300,000 loan, one would pay app. 178,000 and 60,000 over the life of the loan for 30- and 15-year fix, respectively. It is not hard to find balanced fund that averages 5.9 to 6.1% annual return over the last 10 years. My CA Tax Free Bond return 3.46% as of 05/13, with 6.3% average last year, and 5.11% the last ten years. If Mutual Funds are not your cup of tea, you can leverage the cash buy rental properties. Although, at the moment, it is probably not the best time. At least not for a casual investor.

Another benefit is the tax deduction. The basic strategy for most middle class couple in 2016 (both working) is to get their taxable income down to 75,300 where your tax rate went down from 25% to 15%. So you want your house payment to be big enough so that after maxing your 401k (45,000 for married couple over 50), IRA and HSA, your taxable income is less than 75,300. Don't forget property tax is also deductible. Done right, a married couple making 150k can end up paying less than 12k in federal income tax.

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Read above. You are not doing it right.

if by "not doing it right" you mean our house cost us less then half of your hypothetical, because we neither wanted nor needed an expensive house with high payments that would stress our budget if anything went wrong income wise? sure.

moreover - 1. rental properties are a crapshoot and unless you are rich and can buy expensive once that you would rent to other rich people (and/or own enough of them to just hire managers to deal with everything)? are so not worth the headache.

and investments? can, again be a crapshoot unless you are rich enough to do it less then casually. at best - you break even.

last but not least - shit happens. we all know that people lose jobs all the time, especially in a current climate. I don't know about you, but foreclosure is not on my list of things i want to ever deal with.

mind you, we did get a mortgage, becasue it was that or keep renting and I'm tired of giving my money away with nothing to show for it, while being told what I can or cannot do with my living quarters all the while always having a risk of not having lease renewed (and definitely getting rent hikes every time the lease is up for renewal). however.. if I could buy our house with cash? I'd do that in a heartbeat. fuck being in debt. its a like a Damocles sword hanging over your head.

my parents.. they are doing it "right" according to your description. except... that doing it right means my dad cannot afford to retire yet, becasue their "high enough" payment means they need BOTH mom and dad's income to keep up with payments and not struggle otherwise.

its also the reason why, once I figured out what a bullshit going to private school really is, I not only transferred to state college (our state, so in state tuition), but also convinced my sister to go to one as well instead of a private school she was originally considering. I still have some left over loans from those ill advise private school semesters, but at least my sis is college debt free.

that said, I have no sympathy for swedish students that take out debts, even as their tuition is actualy free or low cost. they don't need to do it, they chose to, just like students in USA chose to go to private schools away from home, as if they are somehow significantly better to justify this much debt. they aren't.

[Summer]

I think one thing here is that in Nordic countries young adults generally don't live at home or accept money from their parents, which seems to be the norm in many countries. We have people from UK and other European countries in my guild who still live at their parent's well into their twenties which always feels really strange to me but seems to be the norm there. Of course you're not going to need to take a loan if your parents are paying for food, internet, electricity, or even buying clothes and study materials :P

Personally I graduated from uni without any debt by working through summers and living on a 10 € / day budget (plus rent) for the 4 years it took for me to graduate. This was thanks to cheap student housing though, which may not be available to everyone.

[Feel The Power]

This has to be one of the more pointless threads I've read in a while. The high price of going to college in Sweden has nothing to do with college itself, but more with the price of beer and rent and food. Ooook then, point made I guess?

[Deleted]

I'm a swedish student. I pay 5k/month for housing, I pay around 600/month for food and drinks, I probably spend 2k/year on clothes (dunno what that is in $$$). Last time I got anything from my parents where last christmas when my father gifted me a marsipan pig, dipped 100% in chocolate (people who are supported by their parents are looked down upon). When I graduate I will have a debt of around 375k (assuming I don't work a single hour during a period of 5 years).


What is the point of this thread?

[Crispin]

Not sure anyone ever said that living in scandinavia was "free", obviously one can choose to take a part time job instead of taking the state loan on top of the granted money.

I guess the main problem is that you think that Scandinavia are Socialist countries, but they're not.

[chazus]

I don't know about other countries, but saying that 50% of US students exit college without debt, and those that do only have 20k, and have jobs that earn 35k/yr is total and utter bullshit.

Also, looking further.. The source of that information is "HECS debt files from EPI Australasia." It's an epidemiology group in Australia. So their source is probably bullshit too.

[McFuu]

Still assuming the Swedish system is equivalent to Norways, the interest rate is 1,8 %. Interest and downpayments do not start to accrue until you've left uni, and started making more than $ 40 000. You have a reduced rate of interest as long as you make less than 50 000 $ (roughly and a bit simplified). There are also a number of situations that will mean your loan does not accrue interest or need payments such as having a baby, illness, jail time, etc. You can also have parts of your debts, or the whole thing nulled out from disability, work in remote areas, death, or lasting economic problems (that last one is pretty difficult to get through though). Or complete your degree in reasonable time, that knocks a big chunk off your debts.

You debt and the interest on it is also tax deductible.

As far as I understand, US student debts are not even dischargable in bankruptcy.

Very similar to student loans in the US, although we don't knock chunks off of it as you say. You don't accrue interest until after you've completed school, from what I remember there are other ways around paying interest, at least short term. I had 2 federal loans I paid off within 2 years of finishing school, didn't pay interest on them. Granted I didn't finish the whole programs and stopped approx at the 2 year mark.

There are also companies and programs that will pay off student loans, or help with them in some way. Military used to pay off student loan debt, as did other social service style occupations. Some are still around.

Our interest rates are higher though, I just looked. 4.85%+

And in the Nordics, you can go out of state and pay nothing, or stay at home and pay nothing. I am sorry but I don't see how "Its less bad if you stay local" means its better.

Many people can stay local, pay very little for their education and get the exact same education, they choose not to. I don't feel bad for people who drop $100k on an education when they could have just went to whatever school near them and paid a 1/3 of that. It's very rare that 1 school offers a program that's better than another local school, and its in the students best interest to go out of their way to a school.

You can live at home in the Nordics too, and pay nothing. Or do half the courseload and work while studying. I think what you are basically saying is that an American who does everything possible to save money is about as well off as a Swede who makes no special arrangements to save money and goes to Uni where he likes.

Everything I've heard from Americans about current student debts indicates that they are far worse off.

It's easier for people outside the US, yes. But easy doesn't always coincide with better. I don't the data exists yet for long term effects of all this paying for school non-sense. Out of all my friends who went to school, got out and started working, they are no longer saddled with debt. They paid off their loans by their late 20s, early 30s. I understand that their experiences and my experiences with student loans might be the exception to some, but to us we aren't.
In the EU, you get saddled with student loan debt your entire lives, you will always be paying in the form of taxes (idk exactly where they take the taxes for social programs). That is the negative to that system, you are always paying for school. Mean while, 5-10 years after completing school people are debt free from school. They prioritized a useful degree and paying down debt. I went a different route, went to school 2x for 2 years apiece, got out, paid off my debts while working (10k and 25k), and moved on with my life. Joined the military and now that I'm out, I work as an Engineer. I kind of consider the military as my student loan debt, because it got me to this position professionally. Still, I was out in my late 20s.

Like I said, I'm not going to say one system is better than the other in the long term, I don't think that kind of data even exists. In America, student loan debt is a very short term problem. I see the EU system as a permanent debt to be paid your entire life.

[Deleted]

I am surprised Sweden don't provide some kind of student support money.

In Finland you get a 5 years support as long as you have earned enough of study credit irc. The support covers 70-80% of the rent within a certain amount and about the same amount for food.

[Deleted]

My debt was slightly above 3000, but normal earning person here in Slovakia would have a problem getting rid of it fast enough.
So you compare Sweden with high income to some other countries, like, God I don't know, Bulgaria with around 300 eur/month average net salary?

[Rasulis]

You misread my post. At no time did I suggest that your house payment should be half of your income. Your biggest deduction, by far, should be your retirement/health fund contributions. My wife and I have no major expenses anymore, so we usually put in around 30 - 35% into our respective 401(k)s, IRA and HSA. This should be everyone’s biggest tax deduction. The interest rate on your house should be a distance second. I would say around 10 - 15% if your loan is less than 10 years old.

As for investments, Balanced (keyword “Balanced”) and Interest Free Bond Mutual Funds are pretty save vehicle for long-term investment. There will be time when the value of your mutual fund decline, but in the long run you are making well over 3.5% per year. One of my fund lost 1.2% of its value this year. However, I don’t get a heart attack. Because in the last 10 years (I have had it for 12 years), it has been averaging 9.52% per year. Also, keep in mind, that loses are tax deductible, and as long as your taxable income is less than 75,300, your long-term capital gain tax is zero. Even if you go over 75,300, your capital gain is only taxed at 15% rate.

I don’t know your father’s age. I do believe that the retirement age in the U.S. is way too low. My senior partner is 70 and has no plan of retiring. My father is a radiologist, and will be 80 this year, and he still does consulting at several hospitals 4 days a week. My grandmother was a teacher. After she retired from teaching, she opened her own kindergarten. She did that until my father talked her into closing the school. He regretted that immensely. You can actually watch her mental faculties declined rapidly after that. I have a feeling that is why my father never fully retire.

[AlphaOut]

I don’t know your father’s age. I do believe that the retirement age in the U.S. is way too low. My senior partner is 70 and has no plan of retiring. My father is a radiologist, and will be 80 this year, and he still does consulting at several hospitals 4 days a week. My grandmother was a teacher. After she retired from teaching, she opened her own kindergarten. She did that until my father talked her into closing the school. He regretted that immensely. You can actually watch her mental faculties declined rapidly after that. I have a feeling that is why my father never fully retire.

What makes you believe the retirement age in the US is too low? It really is a personal financial choice of when or if one retires. Unless you're referring to social security and economic impact. I'm on track to retire at 45 very comfortably, so how is that too early? Just curious where that's coming from.

[Deleted]

I am surprised Sweden don't provide some kind of student support money.

Sweden do have studiemedel "student aid" that you get if you study, 2 816 kr as allowance/subsidy free from the goverment, and have
opportunity to borrow 7 088 kr from the goverment per month at 0,6% interest, and you do not start repaying the loan until you have an income.

[Gully Man]

Sweden do have studiemedel "student aid" that you get if you study, 2 816 kr as allowance/subsidy free from the goverment, and have
opportunity to borrow 7 088 kr from the goverment per month at 0,6% interest, and you do not start repaying the loan until you have an income.

Bostadsbidrag is also available to students if they qualify for it.

[Rasulis]

What makes you believe the retirement age in the US is too low? It really is a personal financial choice of when or if one retires. Unless you're referring to social security and economic impact. I'm on track to retire at 45 very comfortably, so how is that too early? Just curious where that's coming from.

It is a personal choice obviously. I just go by the example of the people around me. Between Army pension and his investments, my father could have retired a long time ago. He chooses not to. One of my former professor sold his firm and retired to his farm in Montana. Within 4 years he was back to doing consulting because he was bored out of his mind. One of my uncle is a geologist from Holland. He owned the license to a geophysics program for detecting the presence of oil deposits. At 72 he still travels all over the world doing consulting and refining his program. A geotechnical engineer in our firm retired from the County as head of the material testing lab a decade back with 90% pay and full health coverage. He is now working for us. He also teaches material science at the local community college. He takes an inordinate amount of vacation time during sky season, but that's part of the deal.

[AlphaOut]

It is a personal choice obviously. I just go by the example of the people around me. Between Army pension and his investments, my father could have retired a long time ago. He chooses not to. One of my former professor sold his firm and retired to his farm in Montana. Within 4 years he was back to doing consulting because he was bored out of his mind. One of my uncle is a geologist from Holland. He owned the license to a geophysics program for detecting the presence of oil deposits. At 72 he still travels all over the world doing consulting and refining his program. A geotechnical engineer in our firm retired from the County as head of the material testing lab a decade back with 90% pay and full health coverage. He is now working for us. He also teaches material science at the local community college. He takes an inordinate amount of vacation time during sky season, but that's part of the deal.

Okay thanks brotha, just wanted to see if we were on the same page or you were citing something in reference to the economy.

[Rasulis]

Okay thanks brotha, just wanted to see if we were on the same page or you were citing something in reference to the economy.

You may retire from your current profession at 45. However, 9 out of 10 you will end up finding something else to do. I know of two engineers that retired early. One ended up going to law school and became a patent lawyer, and the other biomed and is now designing medical devices.

[unfilteredJW]

How long did it take you to come up with all this bullshit?

He keeps a bag of it by his chair, since it's the only thing he produces.