Good question. Seems like one of the last components that would need replacing. Does happen.

BTW, those bikes are probably the easiest bikes in the world to work on. You can probably find "how-to" video clips online to help you over any rough spots. Think "weekend project". Make sure you get tires that will fit those Schwinn rims (personally, however, I have only had experience with Continentals from the '60s and early to mid '70s). If you order online, ask the customer service rep if they will fit, or have them direct you to somebody who can let you know. Some online retailers allow you to e-mail them such questions, and will e-mail you back the answers. For a project like this, try Niagara Cycle Works for parts @ http://www.niagaracycle.com/ . They have a wide selection, probably some of the lowest prices on earth, and should be able to answer any basic questions regarding parts selection that you might have. IMHO, when the bike shop told you it would cost $400 to get it back in shape they were indirectly telling you to buy a new bike. $400 can still get you a decent new bike. Without seeing the bike, or pictures (we like pictures here), I would still say you could replace brake pads, cables, bar tape, tubes and tires, and a few other things (including grease and oil) for about $50 if you catch some good deals online. Because of S&H expenses, try to place everything you can in the same order.