The Depth of the Student Loan Debt

[Kobi]

There is an article in the NYT today about the student loan debt topping 1 trillion dollars. Goes on to say 94% of students seeking a bachelors degree are taking out loans. The average debt is $23,000. The people actually repaying the loans is down to 38%.

But, what struck me most was the story of a 23 year old woman who had $120,000 in student loan debt for her bachelors degree in marketing. She owed $900 a month in payments. She was working 2 waitressing jobs, making $225 a week. Her mother, who cosigned the loans and is on the hook for them, took out a life insurance policy on her daughter...just in case.

The story highlights how many students and their parents are feeling misled by college financial aid people who they feel either downplay the actual payback costs, give odd and difficult to understand information about the actual payback, and/or over estimate the job opportunities/salaries which might be available to a student after graduation to justify the expense/debt.

We have all been led to believe a college education is beneficial for our future earnings. This was pretty much the reality in a rapidly growing economy and when jobs were not being outsourced for cheaper international labor. Kind of a different reality today.

Been a long time since my college days. Was a different reality, different economy, different cost of living, much cheaper educational costs, many more opportunities, and advanced degrees upped your income significantly mitigating the costs of any loans.

So, I am wondering what others experiences have been with student loans. Did you feel misled? Were you shocked by the pay back amount when you received it? Were the costs offset by wage increases? Anything else that sticks out in your mind about your loans?

[ruffryder]

I was not misled. I know education comes with a price. . sadly. I think it should be free Or at least if someone is gonna commit and take the time to better educate themselves for the economy and their future they should be able to find a job in the degree of their choosing so that they are able to repay the loans. give and take type of ordeal. again, i'm saddened with how billions of people owe on loans and cannot find the career they were dreaming of.

On a personal note, mine have been offset due to my wages. I do not have the job I would like my degree to reflect and I'm obviously not making enough to pay my loans back yet. I am grateful they have been offset or pushed back however what will it cost me later? ya know.. and that's the least of my worries regarding this. I wanted a degree for a career. Is it the economy's fault or my fault? A bit of both I suppose...

Now, I wonder do I go back to school, but in what .. What is the economy in need of?

[princessbelle]

Great thread Kobi!!!!

I finally just about have mine paid off. Through breakups and a divorce i have put my loan on hold a few times over the years. I worked going to college and paid a lot of my tuition as i went, thankfully. I owed roughly 12,000 at the beginning and now only owe about 1,500. So, happy days ahead when i can quit having to pay them $150 every month.

They do make it easy to get loans it seems. I really didn't give it a second thought when getting one. It was like "here is your money". If it had been more than 12,000 as i know many are, i would be sick right now.

It is good to get the loans if you need them, but running them up and up and up, i can see how it could get out of hand. Not sure what the cut off should be, but IMO at some point in the borrowing money time line, it would be nice if maybe these companies at least offered some counseling. Just so peeps know what they are getting into. IMO they make it too easy.

[aishah]

the cutoff for federal loans is around $140,000, but if the cost of tuition keeps rising like this, the're going to have to up it.

(edited cause it used to be $120k but apparently they've upped it to $140k. this is only for grad and prof degrees...for undergrad it's $31k for dependents and $57k for independent students.)

http://studentaid.ed.gov/PORTALSWebA...udentloans.jsp

[*Anya*]

I paid off my student loans for my RN and bachelor's degree though it was a sacrifice at the time.

My oldest daughter is paying off her Master's degree and her husband, his PhD. They have been paying on their respective student loans the whole 10-years that they have been married and there is no end in sight.

They both teach at the university level and are raising 4-children.

Neither of them begrudge the repayment but the interest on the loans is ridiculous and does greatly impact their ability to save for their own children's future education.

I have no answers for the problem of student loan debt but feel it is a critical problem for all of us.

[JustJo]

I managed to get my BA back in 1984 without taking out any loans....PELL grants were a bit more generous, there was all the "work study" help we could manage to fit in, and I worked a full time job on the side. It meant that my studies and my GPA suffered...but at least I didn't graduate with debt.

I went back after a 20 year absence and got an MS and an MBA. I was still working full time, but also covering a mortgage, supporting my son, etc. I went to a very reasonably priced university and ended up after 4 years with about $45K in debt.

My salary increased by about 2/3 within 2 weeks of graduation.

I pay $325 a month, for 25 years...because I couldn't afford the original $500 a month and had to refinance them. The interest is partially, but not completely, tax deductible. If I pay them back on schedule I'll pay a total of $97,500 for the original $45,000 I borrowed.

It's worth it for me, but it is a burden. I do not have the freedom to take a lower paying job because it's something I love....because I have this debt to pay. I can't choose to not work for awhile....because I have this debt to pay.

I'll be paying for my son's college education at the same time I'm paying back for my own, and also trying to save for retirement. My last student loan payment is due the month after my 70th birthday. Guess who will not be taking an early retirement....despite having worked steadily since I was 15.

I do hear of people with more than $100K in debt for a BA...and honestly have to question what in the heck they were thinking, or who was selling them a bill of goods at the college they attended. Some degrees are worth the debt, and some simply aren't.

[stargazingboi]

An interesting thread indeed. I can't say I was mislead at all. I knew what I was getting into and the sacrifices that would follow. I was lucky in many ways, the Pell grant covered a good portion of my undergrad, but still I walked away with about 20,000 in debt.

Right after completing my undergrad I decided to continue my education. As many people know, once you obtain your BA the funding is limited. I researched scholarships, and other ways to obtain financing. I stumbled on a trainieship through the school I was attending and applied. They would give me money and I would give my service after graduating. This meant that for every year they gave me money, I owed them two years of working in the public or nonprofit arena. If I were to choose to go private the monies would become a loan and repayment would then be expected.

I was given over $30,000 towards my Master's degree. I then only had to take out another $25,000 in student loans to complete my education. Totaling about $45,000 in debt at graduation, which equaled over $550 a month in student loan payments.

I was lucky enough to obtain a position before walking across the stage. I decided that I would rather sacrifice now than later and kept the 10 year agreement. I did not rush to consolidate nor did I rush to extend the life of the loan...but I am also very aware of how lucky I was to snag a job in my field, in a nonprofit sector, that paid me enough to be able to do this.

This past year I was given notice of a program that would allow me to consolidate my loans, reduce my payments, and lower my interest rate. I had them base it on my income...which dropped my payments down about $150 a month for the first 12 months. After the first 12 months it will drop again by another $75. While keeping my 10 year agreement. With the drop of the interest rate I will also save about $15,000 over the life of the loan.

I feel for my fellow classmates as I know many of them walked away with over $120,000 in debt and upon graduating they had to consolidate and extend their loan times to 20-30 years. So, I am thankful each day I do not face that burden.

So, do I think my education was worth it? Yes, yes I do. I wouldn't change a thing about it, as I am happy in the work that I do..I wake up each morning looking forward to the day ahead.

[Julien]

I do hear of people with more than $100K in debt for a BA...and honestly have to question what in the heck they were thinking, or who was selling them a bill of goods at the college they attended. Some degrees are worth the debt, and some simply aren't.[/QUOTE]

I totally agree with this, in this economy it isn't worth it to go into the humanities or the arts, for example, because getting a career in these fields is much more difficult to achieve. I can see the universities get their funding for these areas cut back because of the lack of demand or need. Other fields such as business and the sciences are more stable than these fields of study. It is not enough to love your area of study and making it your life's work. You must work in this economy to make a life and that excludes some areas of study which is a pity because I believe when we lose the Humanities and Art we lose our humanity.

[1QuirkyKiwi]

My Grandparents cashed in their life savings to pay for me to study at the RSN. I refused, yet, they insisted my need was greater because it was for my future and they had lived their lives. I will always be eternally grateful to them for their generosity. When I got a part-time job as a Medical Artist whilst studying, I paid for them to visit me in London, see some West End shows and stay with family in Italy. It was the least I could do.

I’m about to embark on a Master’s degree and I’m funding this venture myself and not getting any help from grants, sponsors or loans because I’m not guaranteed to get accepted for any. Financially, things will be tight, and I’ve budgeted for daily and weekly living for myself and my furbabies. I’ve tried to take into consideration any unforeseen expenses.

I’ve been offered a chance at doing something I’d love to do which will earn me a little extra money; it won’t be a lot, yet, the experience and learning another Artist skill will out weigh this for me. It will mean deferring my Masters for a year. The money will come in useful, though…

[aishah]

i wasn't misled, but i made a huge mistake taking out loans for my first year of graduate school out-of-state and then realizing the program wasn't for me. i only had about $25k in loans for undergrad (which was high, considering, but i needed it to help out with medical bills - i also worked full time or more and went to school full time and i was really sick). if i'd really known all of my options and hadn't been fed the idea that i had to go to college no matter what, and if i'd realized the recession was coming (i graduated right at the beginning of the recession), i probably would have saved money a few years and then gone to college. but with my physical situation i was also scared if i didn't get it done right then i would never have gotten a b.a.

i had to take out about $45k for the year i spent at uva, and it was a complete disaster - their financial aid system is terrible, they don't disburse on time, my job situation was a mess, the whole thing was just a disaster. i ended up having to borrow extra because my loans weren't disbursed on time and i had no way to pay for health insurance. the attitude of the financial aid counselors were "why can't you just find a family member to borrow the tuition/rent/food money from until it's disbursed?" my parents are dead and i'm estranged from most of my family and we're all poor. most students at uva have well-off families.

i wasn't shocked - i knew what i was getting into, i just made a horrible mistake because i was not aware of how awful uva's financial aid system was. if i hadn't had to leave school in large part because of it, things would probably be a lot different now. if i'd known what i was getting into with uva, i probably wouldn't have gone. but as far as the loans themselves, i did my research and i knew what i was getting into.

the one big shocker is the amount of interest, though - the principal amount of my loans is around $68k (it's almost entirely federal stafford loans, a mix of subsidized and unsubsidized, with one small plus loan). assuming i manage to pay all of it back, i'll probably end up paying at least that amount or more in interest. it would be one thing to say that yes, i might be able to pay that much back in 10 or 15 years, IF it were just the principal amount. i think the same goes for a lot of borrowers - when we talk about loan forgiveness, it's not because we're trying to get out of our responsibilities. but the interest even on federal loans is ridiculous.

if it weren't for income-based repayment, i'd probably be homeless because of my loans right now. thankfully due to ibr i only have to pay based on my income (this year my payments are $0, next year they'll probably be a few hundred dollars or more). ibr is a godsend. but at the same time, by next year, i'll probably already owe $5-$10k extra in interest.

i would like to go back for an msw because i know that it'd pay for itself (and the financial aid situation would probably be a lot better, and it'd be a great career decision). but i won't do it until i'm able to save up money to cover the tuition, and until i'm able to start making payments on my current loans.

[Kätzchen]

Originally Posted by Kobi

There is an article in the NYT today about the student loan debt topping 1 trillion dollars. Goes on to say 94% of students seeking a bachelors degree are taking out loans. The average debt is $23,000. The people actually repaying the loans is down to 38%.

But, what struck me most was the story of a 23 year old woman who had $120,000 in student loan debt for her bachelors degree in marketing. She owed $900 a month in payments. She was working 2 waitressing jobs, making $225 a week. Her mother, who cosigned the loans and is on the hook for them, took out a life insurance policy on her daughter...just in case.

The story highlights how many students and their parents are feeling misled by college financial aid people who they feel either downplay the actual payback costs, give odd and difficult to understand information about the actual payback, and/or over estimate the job opportunities/salaries which might be available to a student after graduation to justify the expense/debt.

We have all been led to believe a college education is beneficial for our future earnings. This was pretty much the reality in a rapidly growing economy and when jobs were not being outsourced for cheaper international labor. Kind of a different reality today.

Been a long time since my college days. Was a different reality, different economy, different cost of living, much cheaper educational costs, many more opportunities, and advanced degrees upped your income significantly mitigating the costs of any loans.

So, I am wondering what others experiences have been with student loans. Did you feel misled? Were you shocked by the pay back amount when you received it? Were the costs offset by wage increases? Anything else that sticks out in your mind about your loans?

Yes, I feel misled. I went back to school during the national crisis of the early oughts (2000’s), at a time when people were losing their life long jobs in sectors no one thought would sink during this crisis. There was also the housing crisis too, which tanked millions of home owners and left them with “landslide” of debt.

I thought back then that I could create a better life for myself by earning a bachelor’s and a master’s, as school fin-aid counselors led me to believe I’d find a way to create a better life for myself.

It didn’t turn out that way, at all. Instead I have a life time of horrific debt which got worse under the first reign of terror by T——p and his Education Secretary who assessed horrible interest fines on my school loan debt and my continued inability to make monthly payments which exceed my earnings, all-together.

Now, I should be able to “retire” from my work life, but I can’t at 65.5 years of age. And now, millions of us like me face more harrowing years of the same perpetrator who cooked his own books for years and is a felon who got was voted into power by people who have no clue what this next president will do to our country.

It’s truly sad, what has happened to us all who believed in the idea that upper education would allow us to create a better life for ourselves.

You are missed Kobi. Thanks for your forum thread and I’m sorry I didn’t find it until today.

[Kätzchen]

Well, I’ve taken steps to leave my apartment, should the fiasco ‘king’ upend the lives of us who earned higher education degrees but could never find suitable work to make gigantic loan payments on a monthly basis.

Come what may, these terrible people ruining our lives will just have to get over their ring-kissing hypocrisy.

I’m not gonna let you win. So there.