March 30th, 2009
11:45 AM ET

Student Loan Nightmare: Help Wanted

Program Note: Tune in tonight to hear Randi Kaye talk to Samantha Hillstrom on AC360° at 10 p.m. ET.

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/03/27/art.sam.jpg caption="CNN Production Assistant, Samantha Hillstrom, at her graduation in May 2007."]
Samantha Hillstrom
CNN Production Assistant

I’m about to talk about two little words that make most people cringe. The mere mention of these words usually incites the same reaction in everyone: a) fear b) denial c) a throbbing headache and d) the desire to run away screaming and crying and begging to go to a “happy place.” Yes, I am talking about STUDENT LOANS. If you don’t have one, you know someone who does and you sympathize with them. In the midst of the credit crisis, home foreclosures and bailout turmoil, the amount of debt that graduates are facing is overwhelming.

I am 23-years-old, two years out of college and I am sitting on $115,000 of student debt. And based on my lender's loan terms, I only have roughly 12 years to pay it off. How much does that make my monthly payment, you ask? A whopping $1,200 a month. And let’s just say my lifelong dream career in television doesn’t lend itself to that. The only option my bank is giving me is to go on “graduated repayment plan.” That means that for four years I will only be paying off the interest every month. How much is that? Well, $115,000 with interest rates between 4-8%... that’s about $600 a month and that doesn’t even touch the principal amount. People don’t pay off houses in 12 years and I am expected to pay off this student loan in an entry level position?

Some might say, “Sam, you shouldn’t have gone to a private school in New York City if you wouldn’t be able to pay it off.” Well, I made a lot of mistakes when signing up for my loans, but I was uneducated on the process and on the repayment and now I’m stuck. I share the same anxiety as the families struggling to pay their mortgages. How was I ever to expect the financial crisis that was going to happen and where can I get some help?

And why do I have such a short amount of time to pay off my loans? Because of the current financial crisis. Due to the economic downturn, my lender isn’t consolidating loans. If I were able to consolidate, my repayment time would extend to 30 years…just like a home mortgage. Now that wouldn't necessarily solve the problem, in that I would still owe more than $500 a month with the principal and interest, but it would buy me a bit more time and stretches out the money.

Here is my question: why aren’t student loans receiving the same attention, same care and forgiveness as every other loan in America? I have to say that I am lucky to have a job right now and was especially lucky to get a job right out of college. Can you imagine what kind of pressure and stress the 2009 graduates are feeling in this time of uncertainty? Veterans of the workforce can’t find work right now. What about the recent college grads with no work experience and tens of thousands of dollars of unforgivable debt underneath them?

There is a grain of hope that will come when the Income-Based Repayment Plan, part of the College Cost Reduction and Access Act of 2007, will take effect on July 1. The program will cap off borrower’s monthly payments at 10% of their gross income for 25 years with the rest of the debt being forgiven. However, that only applies to federal loans (which is only one of my four loans).

According to the Federal Education Department, in 2009, the amount of outstanding federal student loans is $544 billion, up $42 billion from last year. Where is our bailout? Where are our options? The default rate on student loans this year is already at 6.9%. That’s a 13% increase from last year.

Recently, Rev. Jesse Jackson started a campaign called “Reduce the Rate” urging the Obama administration to reduce the interest rates of student loans to 1%....the same amount of interest the banks are getting.

Jackson’s plan proposes the following…

  • Reduce the interest rate on all student loans to 1%.
  • If banks can borrow at 1% or less, then so should our students.
  • Extend the grace period before loan repayment begins from 6 months to 18 months for students who graduate.
  • In these tough economic times, it takes a college graduate an average of 6 months to 1 year to find a job. The rules should reflect this reality.
  • End the penalties assessed to schools for student loan defaults.
  • Schools should not be held accountable for students who don’t pay back their loans.
  • Increase Pell Grants to cover the average yearly cost of a public
  • 4 year institution instead of the amounts in the current stimulus package–$5,350 starting July 1 and $5,550 in 2010-2011

Source: Reducetherate.org

I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?

Filed under: Economy • Education • Samantha Hillstrom
soundoff (701 Responses)
  1. RN, BSN

    I totally agree with the help for the loans. Most of the people who don't understand OR feel it was "your" fault, did not go to a university and are indirectly "hating" on those who chose the road of education by any means necessary. Pray for the student loan bail out and it will come to pass.

    April 1, 2009 at 1:21 pm |
  2. Lindsay

    I also chose a private college and have been repaying private lender loans for 12 years now. What bothers me more than anything is that student loans are the only loan that cannot be refinanced – including mortgage, personal, and credit card debt. You can consolidate only one time in the life of the loan. If you do this before rates fall, you will be locked in at that rate for the rest of the loan. When I consolidated in 2000, I got a rate of 8.25% which was good at the time. For paying on time for 60 months (that's 5 YEARS if you're good at math), I got a reduction to 7.75%. The lenders say that it's to raise capital to give out more student loans for the future – except that Citibank (who bought my loan from someone else) stopped giving out student loans last year. So my 7.75% is keeping that 'venerable' institution afloat.

    I don't ask to be forgiven for my loans – because I did choose the college, the loan and the job I have, and honestly that school was the best investment I ever made. I just wish that student loans were treated like all other debt and would allow me to make decisions for my future economic health based upon my credit rating and repayment schedule. This is not a 'bailout', this is rational economic policy. I've been writing my Congressman for years to ask for this consideration, to no avail. It's time to change this policy.

    April 1, 2009 at 1:21 pm |
  3. Wendy

    I just commented to my husband yesterday, "I need to go to Obama's webpage and post my concerns about the student loan crisis." I am currently pursuing my doctorate, and I'm more concerned than ever about how I'm going to pay for my student loans. The interest rates are rediculous and now that my husband is out of work I'm actually in panic mode. How can we work so hard our whole lives and then worry about how to pay for working so hard and giving back to society as teachers, lawyers, doctors etc. The state of affairs must change!

    April 1, 2009 at 1:21 pm |
  4. Tracey

    Thank you for putting everything out there for people to see. My husband is in law school and we're staring at some huge loans when he graduates. I know we chose this path, and we want to be able to pay off all of our loans on our own... but it would be a tremendous relief to know that interest rates might be reduced rather than lengthened. We aren't looking for a bailout, we're looking for a change in the system. Loans help students afford school that is otherwise impossible to attend; hopefully the loans won't cause our graduates to need welfare assistance after the effort!

    April 1, 2009 at 1:21 pm |
  5. CBatUofI

    To all of the people berating Samantha for choosing to go to a private school, you must think getting a state university education is free. I am 23 years old, preparing to graduate in May, spent my first two years of college working and getting an associate's degree from a COMMUNITY COLLEGE, and my student loan debt–principal only–is over $60,000. Student loans are student loans, regardless of whether funding a private or public education. The cost of an education is far, FAR higher than it ought to be, and the absurdity of graduates bearing the monumental weight of student debt only discourages higher education.

    April 1, 2009 at 1:21 pm |
  6. CR

    Banks, car companies, insurance companies...why not student loans? What would it take for the government to pay off all outstanding student loans?

    April 1, 2009 at 1:21 pm |
  7. Shanna

    I totally agree with you. I went to a state college to finish my degree and am now in debt for $40,000. I work full time and pay over $300 a month in loan repayments. When applying for student loans, I also tried for pell grants. I was told each time that I made too much money ($25,000 per year). The job I have is not in my field (accounting) and don't see me achieving a job in my field anytime soon. Now I am contemplating getting a master's to see if that would improve my outlook for a job. If I do, then that would add another $25,000 to my loans. Someone needs to give us help in repaying these loans. We did not take these loans to receive public assistance. We took them to better ourselves.

    April 1, 2009 at 1:21 pm |
  8. Cameron

    I'm 40 years old with $122,000 in student loans – $900 a month, of which less than half goes to principal. Samantha, bless you for bringing this up. Your thoughts reflect mine exactly. I have always been told by the financial "experts" that student loan payments would never be forgiven because those who have the learning and skills that their expensive educations bought usually pay their bills on time, i.e., with no burning platform – a low default rate – why help them out? Your statistics on rising default rates prove the experts wrong. Kudos for bringing this to the attention of the world. It has long been the elephant in the room. We don't want a "bailout", we just want the room to pay off our debts responsibly and under the same terms as others in similar predicaments (mortgage owners, bankers, etc.) What's wrong about that?

    April 1, 2009 at 1:20 pm |
  9. Lindsey

    For many people, attending a state university doesn't always make college extremely affordable. I grew up in a rural area, so living at home and attending a state university wasn't possible. I received a scholarship to a private university right out of high school, but even with the $15,000 per term, the remaining balance of the tuition scared me away. I attended a community college for two years before moving away to the nearest state university. I worked as a barista throughout my time at the university, but the rent and living expenses of living in a metro region overwhelmed me. I graduated with $20,000 in student loans. My plan was to attend medical school, but at no less than $50,000 per term, I'm afraid my dream will never be realized. I found a job in the science field that I love, but with just a bachelor's degree, the pay is incredibly low.

    April 1, 2009 at 1:20 pm |
  10. Jim

    The recent student loan programs have been a travesty. Like the sub-prime mortgage programs, the recent student loans have been too easy to obtain, the fine print too obscure, the loan counselling through school administrators incomplete and inaccurate, and the laws written in favor of the private lenders and commercial paper purchasers over the the long-term interests and successes of student borrowers. In short, caveat emptor, the programs have been misleading.

    Numerous journal articles in recent years have focused on the number of suicides related to former students' inability to handle their student loan debts.

    Having had a successful first experience with the National Defense Student Loan Program, I was ignorantly over-secure about utilizing student loans when I made a mid-life career change decision requiring the pursuit of a doctorate. Now at 62 years of age, I am saddled with a debt that I will never in this lifetime finish repaying.

    I agree with the author, that the federal student loan programs need to be carefully re-examined and re-structured in favor of student borrowers. This action would be consistent with the Obama administration's focus on promoting both education and ethical financial practices for healing the economic crises.

    April 1, 2009 at 1:20 pm |
  11. Brandon Pettit

    I completely agree with you, Sam. There is a quotation I'm about to butcher: "Education is the transmission of civilization." (we can all see why I used this specific quote)

    More so, I shall respond to a response you received, Sam:

    I started my college career at a community school, and still had to take out loans. Then I went to a state school, and still had to take out loans. And now I'm in a graduate program and everyone knows, that yes, I am still taking out loans. So for those of you who question my ability to take our loans, I apologize for wanting to better my position in life. And I apologize for not coming from affluence. And I apologize that our society is consumed with itself and what it is made of, people and money. And I apologize for the government informing me, at this point, to treat my student loans like play money, like monopoly money, because in essence, isn't that how they've been treating money, like Monopoly money?

    And now, for Obama, sorry Sam, but your response I feel has materialized a platform: Obama, you won because of the youth. You won because of the educated. Do not fail us. We will fail you. It is time to forget your celebrity. It is time to look at what drives a civilization. Think back to your roots, Obama, and get that sweet smell of power, fame, and money out of your mouth. It is time do something to help the people, like you said you would. It is time to become a hero. I still have 'faith' in you, Obama, but you must know it is dwindling as the rising belief that I have been swindled, yet again, by another politician, and I am beginning to lose all faith in this country, once again, and this time I know it will last forever.

    And I know I am not alone.

    April 1, 2009 at 1:20 pm |
  12. patrick

    Samantha, Why would you waste a pricey education on a journalism degree? Do know how many journalism students are on the market looking for jobs...that don't pay very well? I'm sure you are finding that out. If your going to college make it count with a degree that will get you a job that pays. You could've went through law school with that amount of money...maybe less...and at least been able to afford your loan.

    April 1, 2009 at 1:20 pm |
  13. Andrew

    I don’t get it! I got my BA and MBA without any student loans and without any debt (and without any help from my parents). How? I went to school full time and I worked full time. I found an employer that offered tuition re-imbursement. So my out of pocket expenses were usually limited to books (and some of those were paid for as well). I didn’t go to college to party; I went to get an education. I worked hard and it paid off. Sure I didn’t have much of a social life, but that wasn’t my priority. When you took out these loans, you knew you would have to pay them back. I do have to say, I believe a big part of this problem is that basic finance classes are not required in high school (but they should be!).

    April 1, 2009 at 1:20 pm |
  14. Keith Leavitt

    Generally, the federal student loan system in this country is effective, and we need to make informed decisions about borrowing. I think many people over-estimate the "value" of a private or ivy-league school for an undergraduate education, versus the quality of state institutions in this country. In nearly any research-based field, state schools outperform private schools, and pass on a quality undergraduate education at a fantastic bargain. For example, tuition at the University of Washington is 6,800 per year; this is also the only University in the world to pass the $1 billion mark in research grants (due to the research caliber of the faculty).

    I can related to (and empathize with) your frustrations. I attended a small (and inexpensive) state college as an undergraduate, working as I went (though still needing to borrow). My first Master's degree came from a state University (more loans!), and I defended my thesis on 9/11/2001–the job market was tough to say the least. I am now finishing my PhD at a top State University (and though I have a tuition waiver and stipend, have borrowed due to living expenses in this city).
    All total, I'm sitting on an amount larger than yours (but in a field that generates a 6 figure income, with a job already in hand for when I graduate).

    But I also know that my education was an investment, and the government has already helped (via subsidized stafford loans for some part of the graduate program). Additionally, the rate on federal student loans (which everyone qualifies for) is low, and offers flexible payments. I undertook that level of debt knowing I needed to enter a field that would compensate me at a level where I could afford to pay them back.

    At 23, you can expect that the first couple of years might be difficult, and the job you take needs to pay you in experience (not in cashflow). Within 5 years, your earnings (even after that hefty payment) will be significantly greater than you'd earn had you not gone to school.

    April 1, 2009 at 1:19 pm |
  15. stan

    I borrowed $1800 on a student loan and let it go into default. Then I paid 500 down and 300 a month for a year. They say I still owe $8000! This is robbery pure and simple. I will never pay another penny on the loan.

    April 1, 2009 at 1:19 pm |
  16. Margie

    Thank you! I retooled in 1992, I started out with 14,000 from the private college in nursing. However, I never finished my last semester of my senior year due brain surgery, and my husband leaving me. I have been laid off twice 1997 and 2007 paycut, and 2008 laid off.
    The student loans are now up to 38,000 for this single parent. They want at least 350.00 to 400.00 per month. Yet, if anyone needs a bail out then it is us (people with students loans who got screw from some of the banks making money off us with high interest fees).
    I talked to many people with student loans who sent their paper work in to Dept of ED and found out that their paper work never reached forbearance dept. Dept of ED threw a lot of loans into default, but when people filled out FASA they showed it was received. But student loan people said otherwise. I think they should revamp everyone who has an outstanding student loan and start from the beginning. Forgive all student loans from 1995 and back, should determine payments based on income for each individual student, and you should be able to give pell grants to graduate as well as 2nd degrees students.

    April 1, 2009 at 1:19 pm |
  17. jarred

    i agree, im well over 150,000 and im about to graduate in may, and ive been looking for a job for about 3 months with no luck. people have been saying you shouldn't go to a university you can't afford. first of all, it shouldn't cost this much to attend a university, private or public. second, when i started in a private university, i had every intention of getting a well paying job after i graduated, but as everyone has seen, things change. i'm looking at a $1500 dollar a month payment after i graduate, i hope the Rev.'s campaign works.

    April 1, 2009 at 1:19 pm |
  18. Savannah

    I am just now seeing this article today, and completely agree 100%! I am still in college right now, and the whole system is a joke. I have attended extremely inexpensive schools ($175/credit is pretty cheap if you ask me), and the problem with these inexpensive schools is that they are over-crowded. The classes that I need to take towards my degree are constantly filled and if I am just minutes late on registering, I have to wait another semester before I can take the class – or attempt to register. And usually when this happens, to remain as an active student in the university and not lose my status for registration, I have to take other classes – which tend to be ones that I don't need, and only adding to the debt even further. Colleges should't have to be so expensive, they shouldn't have to be so overcrowded (maybe change the entrance requirements to keep the idiots out), and we shouldn't have to be taking classes that are meaningless to our career. If I am a Chemistry major, why do I need to take Arts and Music classes? I don't care about those, and it only affects my GPA because I don't care, and my student loan debt.

    Thank you so much for the article, and I hope that Obama brings about some changes that this country deserves to see.

    April 1, 2009 at 1:19 pm |
  19. revknits

    There are no free lunches, and private schools in fact help to prey on students like you. Where were your parents when you signed these loans? Didn't they tell you that this was putting on handcuffs for at least the first 10 years out of school?

    I do think we need to eliminate private bankers from the federally-funded student loans. There is no reason to give money out through an intermediary.

    April 1, 2009 at 1:19 pm |
  20. melinda

    As a recent graduate I can understand that it seems unfair for her and many other people but we all make discussions. Some people chose not to do good in high school to even get in to college or get pregnant when there just 16. These choices may mean they are living a life of struggle. But ALL choices we make have consequence. It not the government job to fix them for you it's your job. It seems that everyone want to put the responsibility for the problems on everyone else but themselves. We seem to be living in a world of entailment instead of responsibility.

    April 1, 2009 at 1:19 pm |
  21. Russell

    Student loan debt is one of the untalked about burdens on our society. I went to my local community college for two years to avoid debt and then transferred to my State University. I will still have close to $15,000.00 in student loans when I graduate. This is not a large amount compared to some but it is more than what I would like to start out my career with. The interest rate students are charged is ridiculousy high. There is a lot of talk about how affordable a college education is. BUNK! However, try to get anywhere in this world without it. Our government is spending trillions to bail out corporations but not doing a thing to help struggling students and families. It's not necessarily the government's place to save everyone but why save the big corporations and let students, which are the future of this country, drown in debt?

    April 1, 2009 at 1:19 pm |
  22. Felicia

    Sam, I feel your pain. I graduated from a private Catholic college in May '08 and I currently owe around $117,000. While I was fortunate enough to find a job 3 days after graduating, my salary does not come close to paying off my loans. For the first 2 months after my loans started I had to pay around $1100 a month. However Sallie Mae let me consolidate my loans for 25 years and now I only pay $635 a month. That is still a large amount of money, but it makes my life less stressful every 15th of the month. I agree that the government should give us a break when it comes to paying our loans, and even give us a break for taking the initiative for going to college. Instead we have a government that would rather bail out people who decided to move into homes they knew they couldn't afford and will bail them out for not paying on their mortgage. Or to companies who aren't doing anything but their CEO's need their bonuses. Maybe we should stop paying our student loans so we can get bailed out? However our wonderful Democratic government won't work that way. Great article, thank you for opening people's eyes to other economic situations involving the youth today.

    April 1, 2009 at 1:18 pm |
  23. Andrew

    I believe that our generation of college students are as much victims from shady lenders as are mortgage borrowers and the like. Lenders, schools, and other businesses have reached a highly evolved level of understanding consumer psychology. They have learned how to get ordinary people to believe that they are entitled to everything an affluent person is entitlled. The consumer, necessarily, is the sucker. I do not believe that in anytime of our human history have people created and have been bombarded with so much intense propoganda to need things. For instance: Follow your dreams and go to the college of your choice at any expense. The future will take care of itself. Take care of itself...HA! Like I said, everyone, including collge students are victims to our bad lending and consumer paradigm. There is a learning curve to all of this by both the producers and the consumers. Unfortunately, this education comes at an insanely heavy price.

    April 1, 2009 at 1:18 pm |
  24. Rick

    Thank you for the article. I agree! Rebuild America. Stop sending jobs, money.. ect. overseas to rebuild other countries. Send the money where we need it most...Home. Rebuild America’s infrastructure, educational institutions, health care, roads, power plants, parks, law enforcement.. etc. Make living in America affordable again.

    April 1, 2009 at 1:18 pm |
  25. Gale

    We have entailed a significant debt and my son some debt in paying for his education at a high quality, middle tier private school. He is looking forward to more debt as he makes his way through graduate school.
    My daughter,not yet of college age, may be looking forward to far fewer education options as we cannot afford a second layer of loan payments. That, manifestly, reflects the unfairness of the system - the rich, the lucky, and those who sign away their life income can attend name or quality schools. The rest, regardless of talent, are told to 'settle for what you can afford.'
    To think, this nation and its leaders once claimed to be committed to providing Equal Opportunity for all.

    April 1, 2009 at 1:18 pm |
  26. Monica

    Those of you bashing the writer obviously haven't gone to college or pursued an advanced degree. In my field, a Master's degree is necessary to make a good living and advance over time. From two years of graduate school alone I owe $50k in student loans.

    I had to take out that much in order to pay living expenses – I shared an apartment with 2 roommates and took the bus because I had no car. I couldn't work because the school workload was so demanding, and as a TA I had extra duties like paper-grading that had to be done.

    The solution isn't to tell people not to go to school. The solution is to come up with reasonable lending options and give schools incentive to lower their tuition prices.

    April 1, 2009 at 1:18 pm |
  27. David B.

    The people that say you're spent beyond your means "don't get it". They don't understand business, and they don't understand what is happening in the world. You might have been able to make it with a lot of hard work in the previous paradigm. Now, however, you may not be able to make it. That will affect businesses that you would buy from and businesses that would hire you. The previous financial paradigm was called "supply side economics", and it has shown itself to be a very flawed world view. The Bush administration drove supply side economics to its logical conclusion at top speed. Now, Obama has a chance to change things, but he isn't even trying. We need a new school of economics based on demand side thinking. We need to dismantle the current financial system, not throw money at it. Many countries have been feeding our broken system long past it's expiration date, even while their own economies burned.

    April 1, 2009 at 1:17 pm |
  28. Susan

    Student loans are way too easy to get. Unqualified candidates get loans all the time for court reporting school, cosmetology school, etc. Stupid idiots, they should have joined a union – any union! With a high school diploma, you could have been making $40K right out of the gate at 18. Should have worked for the post office – they make a ton of money, have great bennies and retirement/health plans. Better yet, go into politics – you can get paid for life for a short term.

    April 1, 2009 at 1:17 pm |
  29. Joanna

    For those who make the state school argument: my sister attended a state university and had to take out extensive loans, despite having a great academic record in high school and earning a few scholarships to help defray her costs. At the end of her bachelor's program – which she completed in less than four years while holding down 25 hours a week in jobs – she owed more than twice as much as I did when I finished my own bachelor's five years earlier, and I had attended an expensive private college. The difference in our circumstances came about largely because my parents had had to use up what college funds savings were available on my education first because of the arcane rules governing the "expected family contribution". It is NOT fair that my parents couldn't hold back one-third of this money for my brother and for my sister to share equitably, and it has lead to some heartache among us as adult siblings.

    April 1, 2009 at 1:17 pm |
  30. Reggie

    I agree with u samatha for all of u self righteous people who say you dont feel sorry for people with high student loans let me lay this on you. This country makes a living off of capatialism and in order for capitalism to work you must have someone to capitalize off of. I am from the East side of Kansas City which is an area that has been plagued by gang violence and drugs since the 60's I was lucky to be able to earn a partial scholarship playing baseball but the school I went to was private NOBODY in my circle was able to educate me on the hardships that lay ahead I thought I was being smart by going to community college first to knock off 2 years of school however but all my credits didnt transfer like they were supposed to and I still ended up at the four year private school 4 years but hine sight is 20/20 and at 27 I know a lot more than I did at 20 and I would have never signed up for those loans if I knew it would land me in the poor house. We can bail out banks who dont need the money but use the money to buy out smaller banks to pad there pockets but you tell people go to school get an education and be somebody but what people dont know is that a college degree is like any other commodity once everyone has a "college education" the demand for it goes down the fact that you can get a degree online and just about anywhere means that its not as valuable. Take a Bentley for example a bently car starts at 200,000 thousand dollars and because of the price only the rich and wealthy can afford it however if ford starts to sale bentley on their car lots it drops the value cause now the common man and woman can obtain it in my neighborhood there are not many options out of the ghetto you either Rap, play ball, or if you or lucky you move away go to college and find a job in some other city. If you cant do any of those things you sale dope and the narcotics industry employs more inner city males any other industry in america and In order to realisticly pay 110 thousand dollars worth of student loans 60 percent of which is intrest I would have to Sale dope or hit the lotto so keep this in mind before you write some one off for there student loan debt as stupid or a poor money manager when people get backed in to a corner they either fight or flight I am from an area where we fight and if things get bad enough where my wages are being garneshed or I am being evicted from my home Im going to do what ever has to be done to survive and since you people are doing so well I may be waiting for you in a dark alley, or back on the corner dealing dope

    April 1, 2009 at 1:17 pm |
  31. Brad

    You know, I'm sick and tired of hearing people say "live within your means" and "take responsibility for your choices" because you know what? that's crap, pure and simple. If you believe that, then you don't have one clue about how the world works today for college students, even if you think you do, you don't. The days of working a summer job to pay for a college education are long over my friends. A decent paying full-time job doesn't even do it, let alone two.

    College loans and related college costs are out of control.

    In order to get an ENTRY-LEVEL professional position, you need a $100k in debt? What is wrong with this picture? And entry-level pay is what? Well mine out of college was $26,000/year... could barely afford my bills with no un-necessary spending let alone pay off debt. All I had to my name was my degree, compact car, and small apartment.

    Which will give you a better chance in life? A community college or a well-known and well respected college degree?

    There is no choice anymore for college students. It's either get in debt or go nowhere. Anyone who believes otherwise lives in a different world.

    April 1, 2009 at 1:17 pm |
  32. Glen

    You made the choices, which you admit, why should others pay your bills? Another issue exists. Just like easy financing drove housing prices to unrealistic levels, easy financing for student loans have allowed colleges to increase tuition to un-realistic levels. Our universities need to get control of their expenses. They have lost sight of the mission to provide education. It is an outrage that these tax payer subsidized entities spend our money the way do.

    Write your congressmen and ask them to address the core issue

    April 1, 2009 at 1:17 pm |
  33. Reid

    So it's the governments fault for all of this? Bull... Why isn't it the fault of the person who took out the loan? Or the school that charged them so much? No, instead everyone blames it on the government. Apparently they are expected to do everything for everyone and there is no individual repsonsibility. What happened to America?

    April 1, 2009 at 1:17 pm |
  34. Kim

    Everyone who has responded to this article should write the President, their Congressional representative and Senator. Also your state legislative representatives!! And keep writting them!!

    April 1, 2009 at 1:17 pm |
  35. Manoj

    Samantha, although it was your choice to attend a private university, I do understand why. Your industry is highly competitive and your private education probably helped out tremendously by helping you land your job.

    However, you must bite the bullet and pay back the loan as you agreed to when you signed the papers. It's only fair. We as consumers need to accept responsibility for our fiscal decisions.

    Since your lender refuses to consolidate, can you find time for a part-time job? Can you get a roommate, or two, or four?

    Almost everyone is in a financial bind right now and I wish you, and everyone else reading this, blessings and prosperity in 2009 and beyond.

    April 1, 2009 at 1:17 pm |
  36. Tom from Vienna

    Four people I know have student loans, and I have advised them to be very careful in watching the amounts they borrow. This is to ensure that the loans can be repaid within their expected wages after graduation.

    I've also noticed that the lenders are willing to give students more money than they require for tuition and expenses. And the colleges will return unused portions directly to a students personal bank account. So, I have to wonder how many students partied during Spring Break with student loan excess money?

    I recommend that we pass a law that no student receives a student loan prior to successful completion of a Financial Responsibility 101 course.

    April 1, 2009 at 1:17 pm |
  37. Jay

    Normally I don't have much sympathy for those who foolishly get into debt by living beyond their means. However, most students start signing student loans immediately upon graduating from high school with very little life experience on whch to base their decisions. That average salary listed next to their major isn't a sure thing. Throughout high school students are told to work hard in order to get into the best school possible. Students are frequently advised not to worry so much about the loans – a good school and good job will take care of all. Unfortunately nothing is guaranteed upon graduating except the loans.

    April 1, 2009 at 1:16 pm |
  38. Julie

    I am a 2005 college grad and between us, my husband and I owe over 80k in student loans. That easily adds up to a mortgage payment and like you, we can't afford to buy a house or start a family for years until that debt is paid, no matter how good the incentives are. We both are employed at good, stable jobs, but yes chose a private school. Yes, we should have had our eyes open. I would not make the same decision today. But what 18 year old really UNDERSTANDS the commitment they are signing up for? I had never paid a bill at that age, and no one taught me about finances. I was just expected to go to college.

    April 1, 2009 at 1:16 pm |
  39. Mandy

    Great article. I went to a state school for undergrad and managed to graduate debt-free. But then I decided to go to grad school at the same state school (My career requires a Masters). My program didn't have funding to support student work, and I couldn't hold a full-time job with the course schedule. So I did a work study program and then took on a part time job to help with the costs. Didn't help. I am in debt but luckily able to afford my payouts due to the great job my Masters helped me secure.

    I understand I made the decision to take out loans and I take responsibility for the repayment. I chose to go to a state graduate school because it was cheaper and I knew in the long run I could afford it. But it is hard for me to budget wisely and make my payments on time when I have to see banks and private industries on TV everyday looking for handouts, getting them, and then making excuses for their lack of foresight and asking for more money. I am taking responsibility for my actions and my future...shouldn't they have to also?

    April 1, 2009 at 1:16 pm |
  40. Len Farias

    I agree with the first comment listed by Stacie. I worked my tail off to put myself through college and paid off the little debt I had from undergraduate school in my first year in graduate school. I did not have a car in college, I didn't party because I had to work on weekends and evenings, and I didn't have a girl friend either because I couldn't afford one! Most of all, my parents taught me at a very young age the art of personal responsibility and consequences for my actions. We never had a family car until after I graduated from high school. No extravagances, no fancy car, no private home just rented. I can be proud today because I did achieve the American dream through hard work, diligence and personal constraint!

    April 1, 2009 at 1:16 pm |
  41. Kim

    Hate to say it, but glad to know I am not the only one who is in this bind. I am lucky enough to have a job but I am about to go into default because I can't even make a payment at this point. Need my car to get to work in order to keep my job, need food on the table and that is minimal at this point. $30,000 in loans quickly became $80,000 and the minimum payment doesn't cut in to any of it. Daughter had cancer, been through a lot over the years and each time I think things are going to be ok – something else happens – life I guess, but I along with many others need help with our student loans – and I didn't go to a private college. They want $1200 a month – I already have a second job – take the taxes out and guess what? You just wasted your time because now you are in a higher tax bracket to boot!

    April 1, 2009 at 1:16 pm |
  42. Jeff

    I couldn't agree more! My wife and I both returned to college as adult students to better our lives and that of our son. Of course, the current economic circumstances (as well as a medical issue) have limited our earning capacity and the monthly payments are placing severe strain on our finances to say the least. I believe it to be more than appropriate for the federal government to examine the student loan situation and provide some much-deserved relief for the many folks out there who are similarly over-burdened by unreasonable interest rates and payments. Quite frankly, we should get our piece of the action as well. Bravo to Samantha for giving our plight some of the national exposure it deserves. Maybe we could start an Internet petition?

    April 1, 2009 at 1:16 pm |
  43. Jana

    So Sam chose a private school- SO WHAT? What about the rest of us who went to a state school?? It's not just a problem with the private schools. It's a problem within the whole educational system. I finally paid off my student loans 2 years ago - 8 years after I graduated college. I would now like to attend graduate school and get my Master's, but I have no idea how I will be able to afford to do so. And the grad school is a State program as well.

    It's not just a "you went to a fancy private school" problem - it's a problem across the board.

    April 1, 2009 at 1:16 pm |
  44. Major

    Tuition prices, like most everything else, work on supply and demand. If it were easier for you to obtain cheaper loans to attend a private university, then demand for admittance would increase and therefor so would tuition prices.

    If the government further subsidizes poor educational and career choices, then we are moving even closer to a complete socialist government.

    If you received lower interest rates on your loans now, how would that be fair to the students who actually calculated what their repayment would be and made the smart decision to go to an in-state public university?

    April 1, 2009 at 1:16 pm |
  45. Liz

    I can relate. I went back to school at 40 to earn my Bachelor's. In reference to those who say you can go to school and not have student loans. Where do you live? That is factor. If you are fortunate enough to live where the costs of living is low and school is not expensive, bully for you.

    Unfortunately that wasn't an option for me. Also, not an option, going through a traditional school program. I still had to work full time and still had expenses I had to pay in order just to live so loans were my only option. According to the goverment, I made too much for grants.

    One way students find themselves in a bind is that loans are piecemealed to you in small allotments that it is easy to loose track of exactly how much you are borrowing. Most schools don't give you an exact dollar amount for the total cost of your program. Another thing is that they don't tell you that private loans can't be consolidated with the regular federal loans. Had I known that, I may have decided to do something more creative with financing my education. I assumed all the loans were federal loans, it never occured to me to ask. Also, you are always assured by the financial aid department when you ask questions or begin to have second thoughts that you will be able to consolidate and that your payments will be low and that the lenders will work with you.

    While I am able to pay my loans and I was able to consolidate my private loans into one payment, it was still a shock to realize how expensive an education is. I can't imagine how young people are going to be able to get an education when the costs is far outstripping the ability to pay for it without loans.

    For all you holier than thous that claim to be able to go school with no debt, good for you but keep your judgemental comments to yourself. Those of us who are in this situation have judged ourselves much more harshly then you ever can about our situation. Besides that, no one is perfect and I am sure there are areas in your life that are less than ideal and you would not want to have anyone see. Those who live in glass houses....................

    I think to improve the student loan situation there must be a more transparent process. In other words, you should be given up front a hard number of what you will need to borrow and should have a plan drawn up of how much would be financed by the federal loans and how much will need to be financed by private loans as well as how many loans you may have to use and the amounts of each one. This should all be up front at the very beginning. Also, the grant program needs to be improved, you have to be practically living on the street with zero income to qualify.

    My heart goes out to you Samantha but be grateful that you are young and still have a chance to pay the loans off. There are others who are older who are not in that position.

    April 1, 2009 at 1:16 pm |
  46. Kristin F.

    First of all, my husband and I feel your pain, as we both attended a private college and then entered into poorly paying fields (English literature and Jazz performance, respectively)–and now we are stuck with student loan payments that exceed $1,000/month between the two of us. And, for the most part, those of us who do have student loans want to pay them back. The problem is that those of us who are trying to pay back on student loans are struggling–especially when the payment amount every month is approaching half of our monthly income and that payment is barely scratching the actual principle of the loan. There should be options to consolidate, lowered interest rates, and extended grace periods and repayment periods. Furthermore, laws should be passed that cap the payment amount to something like 10% of one's income, as opposed to the 30-40% many of us are paying now, to allow us to both pay back our debts and still afford basic necessities like rent, car insurance, and food bills.

    April 1, 2009 at 1:15 pm |
  47. James

    I'm actually in the same position. I went to a private university in northern New Jersey (won't say the name but it's the largest supposedly Catholic university in New Jersey) and didn't pay attention to the student loan information – I just kept taking out student loans to cover year-to-year costs. I took out eighty thousand dollars initially but because I had to put everything into forbearance to handle credit card debt I'd accumulated, the interest piled up and now I owe about one hundred and twenty thousand dollars, to Sallie Mae alone. I've got another ten thousand or so in government loans.

    I've got a mid-level position at a company in Manhattan and I'm only now able to start to make monthly payments. Supposedly they're going up, and when they do, my wife will have to go back to work and we'll have to either put our two boys in day care or enlist a generous family member to watch them (hopefully the latter).

    While I empathize, I cannot agree that bailing people like you and me out would be a good idea. I'm upset with the companies for a lack of disclosure and for exorbitant repayment plans, but ultimately this whole mess is my own fault for not reviewing the information in advance. It's a bad idea for government to bail anyone out, from the auto companies and banks to the student loan holders, because it removes the onus of responsibility from the individual. When this is all said and done, and by my calculations that's going to be more than a decade or so from now, I'll be able to say that I paid it off on my own and my credit report will reflect that.

    It sucks, it really sucks. That much I can confirm from personal experience, but having the government pay for it is just like using one credit card to pay off another one. Sure the debt on the first card is gone, but it's now on another one and eventually it has to be paid.

    Our kids will wind up being the ones stuck with these bills if the government intervenes in the student loan debacle.

    April 1, 2009 at 1:15 pm |
  48. RJ

    I'm really enjoying all those who "went to a State University" and "made it on their own" and all the preaching on this commentary. Recently graduating from a top 25 public school, I too have nearly $100K in debt. Is it our fault that we chose a major (and I'm an Economics and Psychology major) and it's a difficult job market? Is it wrong that the prospectus 9 years ago was that this country was just going to keep cranking out jobs and starting salaries for educated people were 60K+? My aspirations in life are to be educated and to make the best possible decisions for myself in the long term. The economy today is to blame, not students who put their faith in the government the last 8 years. Only now to be criticized because they made a "poor" decision to go to an outstanding school. Those of you who say it was our own "poor decision" should enjoy making $500K less in your lifetime than your collegiate counterparts.

    April 1, 2009 at 1:14 pm |
  49. bell

    Yea this is an issue, I borrowed ~25K to complete my 4 yr degree in Finance at a private school after 2yrs at community college. Had to work while in school and have been able to get decent jobs, but now I owe like 28K becasue of the interest that accumilates during forebearance. The real issue is the the cost of education is to much. Back in 1998, I wanted to pursue an MBA at yet another private school but I did the math and if I borrowed another 65K, would I have been able to get a job that would have covered the payments on ~100K of SL? Maybe, maybe not? I chose not to make that investment but in hind site my earning potental has been somewhat limted. And now, that same MBA costs +100K! Now, would I be able to find a job to cover 130K in SL; in Banking/Finance in this economy? Not Likely! Cost of higher education is too high!

    April 1, 2009 at 1:14 pm |
  50. liz

    It is not just people who went to expensive private schools who carry crushing college debt. Both my husband and I went to state schools. Society tells you the way to financial success is to go to college, which has become more astronomically expensive with each year. But I have always been underemployed for my educational level (because I went to state schools? who knows), as has my husband, even though we were very successful as students and had high gpa's and great recommendations.

    April 1, 2009 at 1:14 pm |
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