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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. Darrel

    It's a mixed question, should college or any advanced training be the right of a citizen, possibly but this country is incapable of keeping things just to it's citizens. I don't feel like paying taxes to train the competition from other countries or illegal immigrants. I have two Masters, paid my way thru college by working and the GI Bill, which i earned.
    If you want Ivy league schools so you can have the ivy league price, it's your right, but it;s your cost. After all when you move up to the 6 figue and larger salaries you will recoup your investment

    April 1, 2009 at 1:37 pm |
  2. Bevatx

    Samantha,

    Have you tried seeing if another leander will refinance the loan for you? You may get a more favorable interest rate and a better repayment plan. The bank that issued the loan is not the only bank that does student loans.

    Good Luck,

    April 1, 2009 at 1:36 pm |
  3. Ryan

    The Student Loan crisis in many ways parallels the Housing/Mortgage crisis, and as such does deserve similar treatment. However, I do not favor the bailout of many bad mortgages, or likewise bad, or soon-to-be bad student loans. Personal accountability is key to both situations. Unless predatory lending practices are involved, I believe people must be held to their loan obligations.

    Our society has become much too commercial, and thus, overextended. What happened to living within one's means? Budgeting? Spending has become the norm, at the individual, corporate, and government level. With regards to student loans, take a look at the parking lots at any college. Also, look at the electronics being toted about by students (laptops, cell phones, iPods, etc). Yes, cell phones, laptops, etc. may be seen as necessary tools for students, but how many are getting the budget concious models?

    April 1, 2009 at 1:36 pm |
  4. Mike

    I worked full time while in school, and still had to finance my education through federal and private loans. I will be taking the entire 30 years to pay these back. I agree that there needs to be more regulation as well as education on the amount of money people borrow and have to pay back. I remembe rmy friends dad talking to us about how we should be able to save up enough $ for the school year by working in the summer. If I made that much coin why would I be going to college?!?

    April 1, 2009 at 1:36 pm |
  5. piyush

    Certain things need CHANGE in USA. Healthcare and Education are two of the biggest ones. I won't be surprised if this message got filtered out because I dare to suggest "there is something very wrong" with the System here. "Sicko" is a great example that portrays just this – for those who don't know what I am talking about – go see this documentary! No, I got no money for promoting this one!!

    My fiancee has a similar dilemma like Samantha. Although her amount is a little above half of Sam's, the basic story is the same. What's worse is this – and I am not kidding you!!

    I did my entire Engineering degree back in India before I came here and the overall cost was less than a GRAND! No, it's not an April fool's joke; I wish it was!! Ask any other Engineer (or Doctor for that matter) from India, how much it cost him/her to become one. Depending on whether it was a "free" seat or a "paid" seat, the answer would range from less than a GRAND USD to 10K USD. One might ask "Why do the same things cost so much more (about 20 to 50 fold) here?" The answer is "Because of the system that basically wants to keep the MONEY with the RICH" – or basically something on those lines – but you get the picture.

    Hoepfully, some president (either Obama or anyone in the future) sees the flaw in this! A young generation in the country in "serious debt"! No wonder people are more interested in becoming sport stars or music stars; anything but higher education – coz frankly, who wants that kind of debt to deal with? If the youth defines the future of the country then having them in this "serious debt" is a serious SIN.

    April 1, 2009 at 1:34 pm |
  6. Chris

    The first comment in this thread ticks me off...WHY?

    Yes she CHOSE to go to that school for that degree and take those loans...

    HOWEVER, if you CHOOSE to run up hundreds of thousands of dollars on credit cards with stupid purchases and shopping spress our government will GLADLY forgive every cent of it and you can be right back out there running up more debt. a few months later...

    WE ARE TRYING TO BETTER EDUCATE OURSELVES TO GET AHEAD...WE ARE BEING PUNISHED FOR THAT.

    I took out $4000 in loans in 4 years, paid a bunch of it back...they say I didn't, have bogus judgements against me for money I don't even owe and I don't have a court in this land that I can take it too...WHY? Because it is 'federal' so they have to abide by NO LAW...

    Fix these problems or encourage your kids NOT to go to college...

    Chris

    April 1, 2009 at 1:34 pm |
  7. j kochman

    yes and no samantha,
    you were lucky and I am sure to have been accepted to a private school but yet you could have made the choice to go to a different school if you did not know if you could afford this one. My student loan payments are 350 a month and I worked all throughout college and 2 jobs after college for 3 years. So I feel your pain.
    What they need to do is 1% interest for all loans extend the payment time,and also cap the costs of school along with teacher's salaries,also there should be no limit on how much interest you can deduct from your taxes and no income deduction limit, and then that will help us all.

    April 1, 2009 at 1:33 pm |
  8. RantNRave

    Well, let me take on the naysayers here. I have a college loan at roughly $27,000 for a masters degree from mid-level college in California. I paid for 3 associate degrees and a bachelors degree out of my pocket and it took me years to finish as a result. A masters degree is almost a necessity to stay viable in the work force at my age. Unfortunately, the money had to come out of my pocket in some fashion so a student loan was a necessity.

    Here is my question to those of you critical of those of us using the student loan program –

    Do we not pay taxes, regardless of how we pay for college? I do not recall ever being given a tax break because of student status – quite the opposite in fact. I have paid enough taxes in 37 years of employment to pay for every degree I want and/or need. Yet I cannot touch a dollar of my taxes for that purpose beyond a student loan I HAVE TO PAY BACK – with interest.

    It is long beyond the point where I feel inclined to respect the naysayers viewpoint. You are not paying for our struggles: quite the contrary, many of us paid for the privilege of an education many years ago, but cannot enjoy the benefits of our hard work. We have to take loans instead, or find some other means of acquiring degrees. Colleges, on the other hand, certainly do not lower the cost of an education. In a state where the average college professor earns $94,000 per year including benefits, guess where my tax dollars go? You got it, right into administrative costs for an education. Colleges and government are perfectly content to let the average person struggle to make ends meet; perfectly happy to let us struggle to pay monumental debt to acquire an education.

    The day I stop paying taxes feel free to verbally abusing me for being a "dead beat." Until then, get a clue – I pay for my education every day I work. I simply do not enjoy the benefit of what I paid for; then again, no one in this country does and that is the problem.

    April 1, 2009 at 1:33 pm |
  9. KD, MD

    I couldn't agree more, Samantha! I have chosen to become a family doctor working in a rural area for people who sometimes can't afford to pay... I am $300,000+ in debt thanks to outrageous tuition for medical school and no one is helping me out. No wonder we have a crisis where medical students don't want to go into primary care and most primary care doctors want to get out of the field. Longer deferment periods and lower rates could make it easier...

    April 1, 2009 at 1:33 pm |
  10. Jon Carr

    I agree that one must deal with the consequences of their decisions, but when a student loan is charging 50 to 100% more than a home loan, there needs to be a change. If we do not educate our youth, we will never get out of the crisis. If we don’t make the repayment reasonable, we put them in a worse spot than before college. I have three degrees (BS, MS, JD) and about $186,000 in student loans ranging from 4-8.5%. I don’t ask the government to erase my loans, just to give me a rate reduction so that I can actually put food on the table for my family. By the way, the 8.5% is the supposed new great grad-plus loan that was going to be a great new way for people to afford graduate school.

    April 1, 2009 at 1:33 pm |
  11. Dave

    I agree with the article. I think that it should be an "eye-opener" for those people, like myself, who have children in high school, who are an "A" student, yet wish to go to Cornell to become an attorney, like my son wishes.

    I have been told that I will need to obtain loans, etc for my children. Fortunately for myself, I told my children long ago, the only way they were going to go to college, was with their brains. Thankfully, they both listened, and are now in the top 10% of their respective classes. As long as I am alive, I will strive for them to keep doing the great work they are doing. This will hopefully eliminate this kind of stress that we adults are seeing in this dysfunctional economic state we are in.

    April 1, 2009 at 1:33 pm |
  12. Ashlee

    For all those people that think it is our fault for taking out student loans in order to better ourselves in a struggling society I say you are completely wrong! The fact is that a college degree has become a necessity in today's struggling job market and the one way for some people to obtain that is to take out loans. College should be free or at least less expensive than it is! Unfortunately, it is not so loans are the only option for many students! Going to college is not a choice anymore; it is a necessity to create a better life for yourself. So it is unfair for people to blame Samantha or anyone else who digs themselves in debt in an attempt to better themselves and gain a competitive edge in today's sinking job market. I say to those that believe she brought this on herself, think about the future you want for your child and then tell me you aren’t going to put yourself in the situation to improve their chances!

    April 1, 2009 at 1:32 pm |
  13. DS

    Cause she choose private school, that shouldn't give the right to allow those financial robers, rip off nor prey on someone who wants to study in this country. We all know why this country is in the middle of a economic mess, and it is the same reason. Why if they receive money from the system at 1% they should charge you way to high in order to get the bonuses they get?

    April 1, 2009 at 1:32 pm |
  14. David - Tulsa

    Interesting article for which I have some understanding, maybe some sympathy but no empathy. I did not go to a private college, or even a public one. I have worked since I was 16 and have been at least modestly successful.
    Now married with college age children, I did not want them to start our with a six figure debt after college. So my wife and I pay for our children to go to a private university. Yes. interesting that we pay for our house, our cars, our standard of living, and still saved and planned to make sure we educated our children.
    If you think it is hard now, unfair and time consuming, tedious, and NO fun, I would say. welcome to reality.

    April 1, 2009 at 1:32 pm |
  15. Gretchen

    I hear you on this. I'm going to graduate in approximately 2 months from a private school in California. I don't think many people understand some of the situations with public vs. private schools. Here's mine: as an incoming freshman I was given a scholarship that covered 1/2 of my tuition for 4 years. I was also given a grant that covered a large portion of the remaining tuition. This grant was not guaranteed for 4 years but my school implied that it would be there because I was in financial need. Well, that grant was not there for the last 3 years. My tuition has also increased $5000 over those 4 years.

    My point is that when you are young and beginning life as a college student you are naive to some of these things. I could never have known how much tuition would increase and I was fooled into believing that I would have an additional grant every year.

    So before people make judgments on those who choose an education at a private school, they should consider various situations in which private school was much more appealing.

    Also, try to get a good job after going to a community college, as a previous person had commented. Sorry but it won't happen. There is too much competition for those people to obtain well paying jobs.

    April 1, 2009 at 1:32 pm |
  16. Justin

    was lucky enough to consolidate my federally subsidized student loans back in 2004 and locked in an interest rate of 2.75% for 25 years. After making my first 36 payments consecutively Wells Fargo Bank reduced my interest rate to 1.75% with automatic withdrawal. I currently pay around $338 per month on my student loans. I am fortunate, however, even $338 per month hurts right now.

    I believe that the government could have helped the student and the auto industry had they somehow developed a program that would allow people with student loan debt to buy a vehicle from one of the big three US auto companies and have that amount forgiven from their student loans and payments deferred on the student loan until the car was paid in full. Just a selfish idea I guess, but it sure would have been nice.

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

    In response to Stacie's comment:

    Samantha, and millions of college graduates like her, chose to invest in her future. She did not make frivolous purchases and try to keep up with the Jones in material consumption. And if you read her article, she is not asking for loan forgiveness and/or for the government to bail her out but is instead asking for more reasonable repayment options. Her decision to finance her college education was not fueled by reckless corporate greed, as was the case of the companies that have been bailed out... namely AIG who not only caused an uproar with its foolish decision to pay millions in bonuses to the people who contributed to the problem but also, if I remember correctly, spent hundreds of thousands of dollars on a luxury spa retreat just days after it received the first bail-out.

    Recent college graduates land meager paying jobs that barely cover their cost-of-living expenses. Add to that a minimum of $500 in student loan payments... they're barely scraping by! So they have to use credit cards to pay for living expenses because their salaries are going toward paying off student loans and basic necessities... it's a vicious cycle which is exactly why our country is in the economic shape that it's in...

    And the experts wonder why people are drowning in debt?

    April 1, 2009 at 1:31 pm |
  18. Erin

    AGREED! I went to 8 years of college to become a veterinarian, and because my parents were financially unable to assist me, I ended up with $203,000 in student loan debt upon graduation. Approximately 40% of my monthly paycheck goes to student loan payments, and this is AFTER negotiating a loan consolidation and extended (15 year) repayment plan.

    Unfortunately, students are not properly educated in the financial aid and debt process. My vet school actually lied to me about the availability of scholarships and grants and told me I could expect only $100,000 in debt by the end of school – roughly half of what I actually owe.

    If my student loan burden or monthly payments were reduced, I'd be out stimulating the economy right now by buying a car and a house. Instead, I'm driving a 13 year old hatchback and will be renting for the next several years.

    If only people who can afford a higher education pursued one, that would leave us with an enormous shortage of doctors, engineers, scientists, teachers, etc. Telling people that they shouldn't receive an education they can't immediately afford would just cripple our society.

    April 1, 2009 at 1:31 pm |
  19. Stacey

    Samantha, I totally feel your pain. I'm in the same predicament. I graduated 3 years ago and am sitting on about $80,000 in student loan debt. I went to a school out of state because my parents moved to Florida, so I had to pay out of state tuition for a year and a half. I cant get my loans consolidated, either. My payments will be about $500/month. I hate when people say "Well you shouldnt have taken out so many loans" or "You shouldnt have chosen such an expensive school" but you know what? People make mistakes, and for the most part, it is because we are uneducated at the time (literally) and take too much money out in loans or go to a really good school that costs too much. Everyone makes mistakes and I know that I will teach my kids about the financial reprecussions of going to an expensive school or taking too much money out, because I wasnt taught that!

    April 1, 2009 at 1:31 pm |
  20. cara

    I too agree that student loans (i.e. the cost of school is out of control). I have been out of school for over 6 years and continue monthly to pay my 2 loans and the rest of my monthly bills. Something should be down to help with current student loans as well as the cost of college. I did attend a community college to save money where I could yet I am still in full debt. My career path (non-profit) at this time does not lend itself to paying student loans plus the cost of daily life ($4 to park, $250 a month to take public transport, mortgage, food, bills). Yes, I too chose my college and career path, but I feel that new students do not know how to properly choose student loans & are mislead as to what their college degree is really worth in the workforce. My college loans can't be consolidated because one is a private loan – wasn't aware of this at the time nor would I have known what it meant. We seem to bail out big business, but let the individuals fight it out on their own!

    April 1, 2009 at 1:30 pm |
  21. Mauro

    To all of the naysayers, get a clue!

    I took on about $120,000 worth of student loans JUST TO GO TO LAW SCHOOL!!! It wasn't a bad decision as attorneys generally make enough money where the repayment wouldn't be too hard. Boy was I wrong. When you can't find a job, your education is worthless as far as your ability to pay the loan back is concerned! I keep hearing "live with the decision you made" or "you should've gone to a public shool" etc. Well, the problem is, the decision was a good one before the economy was ruined!!! So in hindsight, yeah, maybe the decision was not the right one, but who could've known it then? And oh yeah, you can't work while in law school per most schools' policies.

    Get off of your high horses, sheesh!!!

    My wife has $150,000 worth of loans from a PUBLIC MEDICAL SCHOOL where you are absolutely forbidden from working for various reasons. And now she's in residency working 86 hours per week and is expected to pay over half of her salary to student loans? Yeah right! Maybe she should just get a second job, huh?

    When the loan companies come knocking, tell them what I do: You'll get your money when I get it!

    April 1, 2009 at 1:30 pm |
  22. ange

    Samantha,

    I can feel your pain...try going to medical school and then live through residency. The only thing that made the 6 figure debt worth it in the end was the promise/expectation of a good income at some point in my late thirties (the extreme of deferred gratification). If I did not have that, I would not have taken on the debt load.

    You went in with eyes wide open as to what your salary expecation would more or less be, so it was your choice. Education costs money and it it was free, do you think anyone would want to teach?? Some professions may lend themselves to subsidized education, but I don't think TV production is one of them.

    April 1, 2009 at 1:29 pm |
  23. Marisol

    The student loan situation is horrible. I just had to put mine on forbearance and my husband owes 100,000. The banks get bailouts, however we the people don't get help. The government should help us out. The people that take student loans do so because they want to have a career and a shot at the american dream. Right now the dream has turned into a nightmare.

    April 1, 2009 at 1:28 pm |
  24. Chris

    Student loans for an undergraduate degree are simply not worth it. Every student should do whatever it takes to obtain an undergraduate degree without debt, which may mean not going to that dream school, and hold off incurring debt for graduate school, which at least results in a higher income. My wife and I just paid off our law school loans after slaving under their weight for 12 years. Loans to obtain a J.D., MBA or MD make sense because your earning power is much higher once you begin your career.

    If I had to blame anyone, it would be three entities. First is the ivory tower institutions that continue to hike tuition rates and encourage students to take out loans with no counseling or foresight as to the consequences. An English major looking to teach kindergarten should not incur the same debt as an Engineering major or an Accounting major destined for one of the big firms. But so many students do just that with the message that they are investing in their future being pounded into their heads by the institutions profiting from their excess, no matter that some are planning a future that they can't afford.

    Second, I also blame the government for instituting loan programs that encourage students to take out loans without regard to their ability to pay them back or earning power when they graduate. We are fostering a whole generation that will not be able to pay for their own children's college because they are still paying for their own.

    Finally, for those that have the loans unfortunately you have made bad decisions and you share some of the blame. Like a lot of America you over reached your means and this article feeds into an attitude that somehow fairness should allow you to avoid what you voluntarily undertook. Expensive private universities are not for everyone.

    It used to be that state schools were the option but now even those are pricing themselves up because they have a student body taking loans out left and right. Reform needs to come at the University level, Government and Individual level.

    It is a shameful situation created by an unwillingness in our society to accept incremental improvement and success rather than instantaneous success. The system must be changed and it needs to start by making students loans much more difficult to obtain, not easier.

    April 1, 2009 at 1:27 pm |
  25. VA Teacher

    Amen Samantha! I am struggling under student loan debt. I was paying on time, but my husband lost his job and now my loans are in forebearance, with the interest just kicking up the amount higher and higher. It's stressful, frustrating and yes, I chose to take the loans out, but it enabled me to become a better teacher for the at-risk youth that I teach.

    April 1, 2009 at 1:27 pm |
  26. James

    Guess I might be a poster child for predatory student lending practices... I got accepted to medical school with high hopes, and now after graduation there aren't enough residency positions to go around. For two years I couldn't find work, and ended up taking a job using my undergraduate degree. The medical school and 'preferred' lenders charged 5 years of loans for 4 years of education, and this is my current debt load... all in default:

    federal student loans: $100,000
    private student loans: $250,000

    With an income of $44k from a job that didn't even require that degree... its an overwhelming burden.... I don't know what to do.

    April 1, 2009 at 1:27 pm |
  27. JTC

    The biggest problem with student loans is the private student loans, which can account for the majority of a student's debt. These loans are necessitated by the limited amount avaible for federal student loans. Unfortunately, tuition inflation (a subject not often discussed) has driven a tremendous need for private financing. This private financing has not been policed in the same manner as traditional federal loans and is not required to offer the same options as the federal loans. The net result is that many who borrow are confronted with different and complicated loan terms and an entirely different set of criteria for triggering various benefits that private lenders offer in the context of financial hardship. For instance, if you needed a forebearance from Sallie Mae on your private loans, you have to pay a fee per loan. By contrast, with Citibank, you can get a forebearance for free, but must meet various income restrictions.

    The solution to the issue seems to require the following:
    (1) a uniform set of guidelines governing interest rates and terms for private student loans;
    (2) an increase in the amount students can borrow as federal loans;
    (3) a change in the tax code permitting student borrowers to write off all (if not most) of their student loan interest for a period of time after graduation irrespective of income level.
    (4) state involvement to provide low cost/no-cost loans to their residents who go on to higher education (I believe Maine has a system to that effect).

    April 1, 2009 at 1:27 pm |
  28. Jesse

    To all of the people who have commented that Samantha made poor choices (and expensive ones) – have you ever thought that a big reason so many student payments are so hefty for many is because they are private loans? The issue is about IRRESPONSIBILITY IN LENDING just as much as students choosing schools they cannot afford. I didn't know the difference between federal loans and private loans when I started college – and I didn't depend on my parents to know that either – neither of them are college graduates.

    April 1, 2009 at 1:27 pm |
  29. Kevin H

    While I sympathize with Samantha, I can't point to anyone else as to who is to blame. Did she do any research into likely salaries before choosing her school and her degree program? Did she do some math when the "truth in lending" statement was presented to her for her signature before getting the loan?

    Samantha says she was uneducated about this subject when she first started going to college. A long term solution may be to offer a free (but required) web-based 2 hour tutorial to educate people applying for student loans about the issues they need to be aware of regarding their loan. Perhaps they should even have to hand in a signed and completed "quiz" about the terms of their student loan along with the loan application itself.

    April 1, 2009 at 1:27 pm |
  30. Cheryl

    I'm there with you. I'm struggling to pay on my student loan which is still about $45,000. Now they tell me that I make enough money to support 3 children on my own, pay my loan, and pay my oldest sons college tuition on top of that. He is building up his own studen loan but he only gets enough to pay about half of his tuition and I have to come up with the rest. It's ridiculous!

    April 1, 2009 at 1:26 pm |
  31. Anne

    I'm in much the same boat here. I graduated from a private college in '03, and while I have put a pretty sizable dent in my loans, I've still got a pretty long road ahead of me. I had to switch career paths in order to land a job out of college that would even offer me a livable salary.
    For all of those commenters here that are going 'it's your fault for not going to a public school. They're cheaper!", that isn't always true. I would have paid nearly $20,000 more to go to a public school. Private schools offered me a better package all around, and it was the cheaper choice for me.

    A college degree is being treated like a high school one now. I've had to land three jobs since I've graduated, none of which was willing to offer me more than $30k starting pay, despite my double-degree and experience. I see college degrees and multi-year experience being listed as required for jobs that refuse to pay more than $25k. And I've been constantly told I'm 'over-qualified' when I try to pick up a second hourly job just to meet ends. College wasn't a 'risky' venture, it was described as the 'you have to have this' in order to get ahead. Yet I know too many college-educated people who are too far behind because of their loans and the reality of the job-market.

    April 1, 2009 at 1:26 pm |
  32. ab

    Thank you Samantha!! What people also don't realize is that in order to obtain $100,000 in student loans, all you really need to do is sign the paper. There is no requirement for understanding the amount of monthly payback, amount of income needed to cover that, none of the hoops that one has to jump through to get a mortgage in that same amount are required. IIt is very similar to subprime mortgages, you are lead to believe you can pay it. When you are a struggling graduate student wondering where your next meal will come from, its very seducing to get another easy application for another loan, all you need to do is sign. While I'm not saying that people aren't responsible for their own debt, there is some liability to be placed on the loaning institutions and for this we should be given some relief. We deserve it much more than major corporations do!!!

    April 1, 2009 at 1:25 pm |
  33. Julie

    I have no sympathy for you. You chose your school, your loans, and your career. And now you want someone else to take responsibility for your actions? How is that fair to those of us who made better decisions, and would have to pick up the tab for your poor decisions?

    I trained to be a teacher. I went to a public University, and worked a full time job at night to pay my way through school. The only student loan debt I had was for the year when I was doing my internship and could no longer juggle my full time job with my studies. I graduated with a mere $10K in student loans.

    Five years later, when I decided to change careers, I took out another student loan, this time for $5k. Both of those loans were paid off early, because they were managable.

    As a former teacher, I firmly believe in the value of a good education. But I do not believe that necessarily means that you should get the most expensive education you can find. I'm sorry that you didn't learn that lesson before you got yourself into massive debt that you feel you can't pay back.

    April 1, 2009 at 1:25 pm |
  34. W Smith

    There's a relatively simple solution to this problem, don't go to a private college, period. In most cases, you'll actually get the same, if not better, education at a public university. The biggest factor in college success is the student him/herself, and not the institution. Let a lot of these private college and universities wither and die, and save your money by going public.

    April 1, 2009 at 1:25 pm |
  35. Kelly Long

    Thank God someone brought this up. Student loans are crippling.
    I have just come to the conclusion I will probably die before they're paid off. Obviously, if I get a big pay day, I will pay them but... seriously, since I graduated, the choice has been rent or loans. Well, what do you think will win?

    I just wish we had the luxury the banks do of being able to file for bankruptcy. I don't get it.

    And, yes, I probably shouldn't have taken out these loans. But, at the time, I had no choice. And, frankly, at 18 years of age... I didn't know what I was doing.

    So, when I graduated my loans were $20,000.
    Now they are $60,000.

    Well, I suppose that's one good reason to look forward to death.

    April 1, 2009 at 1:24 pm |
  36. Sarah

    The entire situation is unfortunate, and I can see it from both sides. We are a land of opportunity and freedoms; we are lucky enough to go to college and we have an array of public and private schools to choose from. We are lead to believe that everything will be taken care of once we graduate. WRONG. As stated in previous posts, there needs to be education on what it truly means to sign up for that loan and what the consequences are going to be when you leave. But, I agree with the some of you that, the choice of career and school was still yours, and now you have to live with it.

    I have $25K in loans to pay back, but I thank god that I chose a field that I knew I would have a steady job, good pay and future opportunities. I went to a public school for my bachelors and masters and I have never had a problem. All I have learned now is that I will be teaching my future kids on how to save, that they work while in school and that public universities are an excellent choice.

    April 1, 2009 at 1:24 pm |
  37. Ron

    My student loan is a 40k black cloud over my head. It's simply overwhelming. Grads could definitely use a little help with this. Thank you for bringing some light to this overlooked issue.

    April 1, 2009 at 1:24 pm |
  38. Steve

    Yes, I agree with you completely. The entire country benefits from an educated workforce. We continue to fall behind other nations in preparing our children for the workforce. This investment will pay off in the long run. I agree that people need to be realistic when choosing schools and assess the costs, but we are not asking for free money. Just let kids borrow at rates that are realistic instead of letting our greedy financial system benefit from them.

    April 1, 2009 at 1:23 pm |
  39. Bob

    Education is a great investment. In the America I grew up in, everyone benefited by providing opportunities for inexpensive education to those who wanted it. Today's America is in a tight, ruinous, downward spiral. Many people are happy to watch taxpayers subsidize wealthy professional athletes, failed banks, and ruinous military adventures in foreign lands, but cannot imagine subsidizing education. These people are often poorly educated, scientifically and technically illiteate, but buy into anti-government republican rhetoric, bot appreciating the fact that our government hugely subsidizes all types of activities that they falsely imagine to be "private enterprise." I would be more than happy to pay higher taxes to subsidize education for those who seek it. I detest paying taxing to subsidize immoarl military adventures, professional athletes, and failing banks and corporations. Education returns enormous social benefit. Many of the things subsidized by our government return none, and further enrich a small number of wealthy individuals.

    April 1, 2009 at 1:23 pm |
  40. Terry

    The cost of college is a national outrage. We baby-boomers coasted through college on grants and scholarships. I paid my tuition, fees, rent, food, and gas by working the night shift at 7-11. Now a job at 7-11 would pay rent and utilities on a cheap apartment shared with three other guys.

    For one thing, all of our state universities are trying to become prestigious research institutions – for no practical reason other than to tenure the professor. They need to be teaching institutions.

    Secondly, our states are cheating our kids in state supported public and higher educational institutions by sloughing too much of the cost onto the students and their parents.

    Those who love to give the tongue-clucking lectures about financial responsibility are usually those who had it easiest. Similarly, it was a bunch of draft-deferred goof-offs like Bush and Cheney who are willing to send young people to war – and then extend their terms to add to the insult – with long lectures about patriotic dudy.

    April 1, 2009 at 1:23 pm |
  41. YoYo

    Single mom of soon-to-be college freshman. We have not signed any loan papers as of yet. Please tell me what to look for before we sign any. We are short about 9,000 for the freshman year, but we have not heard from private scholarships yet. We are still filling out forms. The college told me they would contact me later about signing for secured and non-secured loans to cover the balance due.

    April 1, 2009 at 1:23 pm |
  42. Michael

    For those that are chastising her decision to go to a private school. Would you want to go to a physician that graduated from your local medical school or would you want to go to someone with a higher pedigree. Its a shame that in order to be granted access to more opportunities during college and graduate studies one has to pay out upwards of hundreds of thousands of dollars just to pay for tuition and unless you are gifted from birth with parents who have a deep pocket then only the wealthy children of this nation would be able to afford that opportunity. Private loans are made available for people to be able to attend the same programs without being turned away due to the inability to generate funds within the family.

    April 1, 2009 at 1:23 pm |
  43. Grog in Ohio

    Well said. I promised my kids I would pay off their student loans if they finished college. 3 of 4 did. And now it's payback time. And it's killing me. Sallie Mae's interest alone is over $2500 per year. We probably should have used VISA instead!

    April 1, 2009 at 1:23 pm |
  44. mary

    I completly agree, my sister and I both have student loans over 100,000 for undergraduate and graduate school. Just as we were starting to get going in our field this all happened and no more jobs! Higher education in this country should be free (along with health care) or at least affordable. Student loans take advantage of young people who don't always grasp the full meaning of that amount of debt if the government can give huge bailouts to companies and expect us to pay for it then why can't they forgive all student loans- maybe the reduction in financial stress on regular people will actually do something to help the economy.

    April 1, 2009 at 1:22 pm |
  45. T.J.

    Thank you for this article, Samantha. It is a dilemma and one that our nation appears to not want to face head on. I disagree with those who commented that you'd have saved money by choosing a public institution.

    The fact is that education in this country comes at a great financial cost, regardless of the institution's status as public or private. This is another socioeconomic controlling factor when separating rich and poor – those who can afford it, get richer; the poor get poorer. The new twist is that we're making those who are willing to take the risk poorer.

    As a nation we should take an interest in our future, in our future leaders and we should encourage and assist each other in gaining an education – in whatever field it may be. I am a non-traditional seminary student who will graduate in 3 years with $100,000 in student loan debt, a family to support and an estimated $38,000 salary...and $1,000+ per month in student loan repayment. As a valuable member of society, I would think that the government would be as willing to invest in people as much as as it is investing in banking bonuses and jets.

    Keep pushing, Samantha!

    April 1, 2009 at 1:22 pm |
  46. Kevon

    I have two degrees a JD and an MBA and my student loan debt is almost $140k. I consolidated my loans back in 2001 and I am on a 30 year graduated payment schedule. My payments go up every few years and they are soon going to reach the point where I can't afford to pay them . . . there are currently almost $1000 a month . . . so yes I am whining but my real point is that I am locked into an interest rate that I can't get out of . . . because when you consolidate you can never refinance again. It was my great luck to want to buy a house during the housing boom and when interest rates for student loans where at 8% so I was hit twice . . . I fail to understand why the government only allows one consolidation/refinance of my loans . . . if I could refinance to 4% my payments would be cut in half . . . at least create a program that allows refinancing of consolidated loans.

    April 1, 2009 at 1:22 pm |
  47. Jackie

    Samantha, I am in the same boat as you. As an 18-year-old entering college I had no idea what the student loan process entailed, and was not purposefully trying to get myself into a massive amount of debt. Due to changing economic circumstances in my family early in my college career, I have had to take out most of my education in loans, some with 13-14% interest rates. I thought I could afford my college, and ended up not being able to. I will owe around $200,000 when I graduate. If I could go back in time and attend a cheaper college I would, but this is my current situation.

    The government seems to have ignored this issue entirely which doesn't seem to make much sense. We're supposed to just be starting our lives, and we have to start it with unbelievable amounts of debt. If we started at 0, we would put our money we make from our jobs back into the economy.

    Anyways, I feel for you girl.

    April 1, 2009 at 1:22 pm |
  48. Mike

    This entire economic mess has to do with corporations and people borrowing more than they can afford. I too have $80,000 in student loan debt, but I stopped and thought about it before I took it on. I made sure to get terms favorable to me and I made sure I would be able to afford it on the salary I would make once I finished. I'm sick and tired of hearing people whining about how the government should bail them out. Try a little personal responsibility.

    April 1, 2009 at 1:22 pm |
  49. Emmarie

    As an student about to graduate from law school and facing the 2009 job market, I completely agree! I agree that personal responsability is key to our country's success yet seems to be nonexistent. I didn't go out and buy a home that I could not afford, I do not use credit cards, but I have taken out student loans in order to obtain an education that I can *hopefully* use to help those that can't represent and help themselves. It is easy to understand why law students turn away from their initial desire to help and go after the high paying careers- those criticized by the general public. My question for this forum- What do you suggest people do if they graduate from law school and want to work in a field that is important yet, like education, is not fairly compensated.

    April 1, 2009 at 1:22 pm |
  50. Ashley

    I agree with you Samantha. I attended a two year community collegeand then went to a University to finish my BS to become a teacher. I am now sitting with 30+ in loans, and this in not as bad as it could have been. My loans payed for school and that was it. My living expenses were taken care of by the GI Bill. The only thing that is saving me right now is that with my teaching job I am required to get my Master's Degree with defers my loans for a while. Unfortunately, the cost of the Masters Degree will be added to the other loans when I am finished. I really see no end in sight. My only advice is to read the Contract and if it statesthat the loans can be deferred if you go back to school, then by all means continue your education. In the end it may help your career and if you continue school until you grow old and pass away then you won't have to worry about the bill.

    April 1, 2009 at 1:22 pm |
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