The Depth of the Student Loan Debt

[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.

[WickedFemme]

[SIZE="3"]argh!!!!!!!
I paid way too much for my B.A. because I went to a private university with a 'name', which was stupid. I then went on to pursue a Master's degree and paid way too much for that as well considering I work in nonprofit and you know what that means. I don't know if I will ever be able to pay my student loans off[, however, I am taking advantage of the Student Loan Forgiveness Act, which means that if you are in a service oriented industry like a nonprofit worker and pay for ten years on an income contingent plan, they will forgive the balance of the debt. I didn't know about this until I got this really nice man on the phone that works at William D. Ford. My payments are almost as much as my rent and that sucks./SIZE]

[Just_G]

I just graduated in March with my associates in drafting and design at ITT Tech. I owe about $35,000. I applied for every scholarship and/or grant that I qualified for and wrote, god only knows, how many essays about why I deserved to win that scholarship/grant. Doing that is a crock of shit...I didn't get one. Not one. I applied for at least 150 over the last two years.

I did get a pell grant the first year, but it didn't really put a dent in what I owe, but I am thankful at least that much was paid for....for free.

I got offered a job in my field the week before I graduated. I am now working for one of the biggest architectural/engineering firms in the country. I love what I do, but until I get promoted and start making above the minimum of what they pay engineering techs, it will not be easy to pay the loans back. Luckily, my mom is paying the first year of my loans back until I can get my feet set doing what I do.

I think it is really bad that they let a lot of people that don't have anything sign up for such a large future debt, knowing damn well that there aren't jobs in the field they are learning or that are so saturated with applicants, that it is impossible to make enough money to pay back your loans. They really sweeten up the whole "get your education so you can make more money" thing.

Right now, with this new job, I am working 10 more hours a week, and only make $49 more a week than I did before I got this degree. I accrued the $35,000 debt, basically to earn $49 more a week.

Granted, I have a really bright future and all, once I get some experience....but it is going to be a couple of years before I get any type of raise that will allow me to afford not only my school loans, but also a car payment and my mortgage. It's going to be a struggle for a while longer, but I think in the long run it might be worth it.

[Kobi]

I was one of those lucky people who didnt need to finance my undergrad degree. Educational costs back then were nowhere what they are are now. I did have to let go of my dream of going to a particular private college and attend a state university instead. Am thankful I did cuz it saved me a lot of unnecessary debt.

Did finance half of my graduate degree. I financed thru a local bank rather than the school financial aid office. The terms were very clear and the expected pay back was upfront and reasonable.

I worked for a non-profit organization which bumped up my salary considerably with an advanced degree. Plus, I was able to get numerous side jobs. The increase in income was more than enough to carry to monthly payments. Remember we are talking like 30 years ago. Different world back then.

Once I paid off the loan, I continued paying the monthly payments to my own bank account - figured if I managed to survive without this money for 10 years, I could continue to pay it to myself. Thanks Dad for teaching me to always pay myself first.

This story was really bugging me cuz the student loan industry is starting to feel and look a lot like the subprime mortgage industry. People are incurring a great deal of debt without realizing the payback costs and practices.

Most of the loans are administered thru Sallie Mae of the Freddie Mac and Fannie Mae family of shysters.

There was and continues to be a big thing about deceptive business practices with Sallie and her associates, particularly in forcing defaults on loans. 60 minutes did a show on this a while back and I did find an article in the Washington Post about it. There is a huge benefit to Sallie Mae if people default because with late fees and penalties, the amount owed can double almost overnight.

People are paying incredible amounts of money monthly but are only covering the cost of interest, late fees and penalties. They are not paying anything off the principle. Thus they will never pay off that debt.

And, there was something about Sallie Mae being paid not only to process the loans, hold them, and collect on them, there was a built in additional profit whether people repaid them or not i.e. a built in bail out with a guaranteed profit margin.

This irks me.

Here is the link to the article: http://www.washingtonpost.com/wp-dyn...042602627.html