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. Mark

    Yes, you deal with the consequences.

    This nonsense has to stop somewhere. Using government to plunder others in order to pay for your own issues is not right.

    April 1, 2009 at 2:03 pm |
  2. Ev - Fort Worth

    My daughter graduated two years ago and owes $70,000. She attended Community Colleges, and worked part time to help finance her education. Now she works in San Francisco and can only afford a room in a house she shares with three friends. Car payment, insurance, bills and her student loan payment eat up all of her salary with nothing left over for savings. If you go to http://www.whitehouse.gov/ there is a contact option. We all should send an email there and provide a link to Samantha's article and our comments, and do the same to our reps in Congress too. These students are as deserving as some of the places the stimulus money is going to. It might help bring some attention.

    April 1, 2009 at 2:03 pm |
  3. Shane

    Stacie... that is the most ridiculous statement I have seen in a long time. Yes... often students choose the school, loans, career, etc and have to deal with the end result once graduated. But to put it in the terms you did is silly. When did you go to college... or did you even do so?

    Besides receiving a full ride, what schools are affordable enough to avoid student loans? How can you live with in your means when it comes to college level education rising 6% (one local state university actually raised their tuition by 12% last year) or more every single year. Even in-state tuitions have risen to a level that many families and potential students can not directly pay for. Scolarships are a joke unless you meet some sort of ethnic/gender requirement. The only other option is to not go to college and try to make something of yourself with out that level of education. No easy task.

    Many families and students, especially graduating now, counted on being able to consolidate their loans and pay them off over a extended period of time. It is not uncommon to see these loans spread over 30 years. No one could have predicted the current financial crisis and to say.. "tough luck; next time live within your means" to our future leaders is asking for trouble.

    Using me as an example, if I was to go where my parents could afford, I would have only an associates degree from a local community college. Instead, I have a B.S. in computer engineering plus a MBA where I graduated top of my class. Because of these credentials, I am able to get/keep a job in the current economic climate.

    The suggestions she makes are right on and I applaud this article for hopefully educating some folks of another financial problem that has received little to no attention.

    April 1, 2009 at 2:02 pm |
  4. Casey

    Sorry Stacy, but you sound a little jaded. I am a recent graduate who went to both a community college first and then to a state school. I still had to pay for all of my tuition on my own. I did not receive any hand-me-outs from family members or rich ancestors. I also worked my butt off in high school and received three scholarships, but none of those scholarships even came close to paying for my education!

    I took out school loans to pay for an eduaction in education. I am an elementary school teacher with loans accumulating 78,000! I am fortunate to have a job as of now, but many college grads are going to be hunting for months before they land a decent or any job! What are they to do with a diploma and a butt load o debt??

    College tuition has increased by 120% over the last 25 years! Scholarships have nearly vanished, and federal loans only account for a small percentage of what college actually costs. Many colleges have been urged to push students towards private bank loans to pay for college. My college was one of those whose priorities were in the pockets of the banks.

    For you to claim that you went to a community college and paid for it all on your own, that is wonderful, but universities which hold degrees for individuals such as myself are nearly impossible to pay for without a substantial amount of money saved up (nearly 15-25,000 a year!). This means that working at McD's at an hourly wage of 7.15 an hour would only take the average soon to be college student over two years to pay for one year of education, and that is if there were no taxes taken out and there were no other expenses to be paid for!

    It's not possible for a student to pay his or her own way at a university, and it's not fair for someone like you to take a position based on limited information and a flase sense of accomplishment. I had no other choice if I were to finish college. I am now stuck with enormous loans that I must pay off within 25 years at a salary of around 40,000 a year.

    Doesn't make sense to be a teacher when it costs so much for the education, unless of course you had a little bit of empathy, and understanding for those who be the leaders of a now broken government. Think about what side you're on, before you voice yourself. People are placed in the positions they are placed in through greed, but also through ignorance and not knowing any better. We have woken up!

    April 1, 2009 at 2:02 pm |
  5. Steph

    I know I will be in the same boat once I graduate as I chose to attend a private university that I love. However,my debt will not be nearly as much (only around$50,000).
    The thing that is irritating me is that all of these people are saying "Go to state universities". Well guys, I live in Ohio, and if I would have gone to a "fine public institution" then I would have ended up in more than $75,000 to $100,000 worth of debt regardless of which public school I chose. Please make sure you do your research and realize just how much these public institutions cost- some are more EXPENSIVE than private schools.
    I think that all students should be able to consolidate their loans when they graduate. Students should be given the benefit of the doubt and Rep. Jackson's plan should be put into action. It would help so many students who studied hard only to be slapped in the face with HUGE loan repayments.

    April 1, 2009 at 2:01 pm |
  6. Kyle

    Isnt this an issue with the cost of education? Why are we paying so much to attend college in the first place. If costs were not so out of control then we would not have to take out massive amounts of loans in order to fund our education. I mean how can a university really justify charging $50,000 plus a year for tuition, room and board?

    April 1, 2009 at 2:01 pm |
  7. Catherine Boyd

    I have two boys and one will start college this year. I can not believe the cost. I think parents of college age students and college graduated students should start to contact their state representative and let them know the burdens that the loans are having on families. I think that loans ranging from 6%-8% are outrageous. What happen to 2% and 4% loans. I also feel that no matter what the parent's income is low or high the student should responsible and take on Federal Loans at a low fixed interest rate for ten years. There would not be so many defaults if the interest rate was fixed and low. It is a very confusing process for students and parents many do not understand what they are getting into until it is to late. There should be two lender and one fixed interest rate. So I am calling on all students and parent to contact their state representive and let's educate our children.

    April 1, 2009 at 2:01 pm |
  8. JRose

    This is a great idea. It will stimulate the economy and it's debt that will be repaid... usually at a higher rate than any other type of debt. If the US is going to commit to being a leader in education then we have to stop taking advantage of the people who will take us there, ie higher level students.

    April 1, 2009 at 1:55 pm |
  9. Jen

    People keep talking about state schools as if they are practically free.

    I went to a SUNY school for 3 years to "save" money instead of a proper art college. Not only did I get a second-rate education, but my student loan debt is considerably large. I was not offered any financial aide based on the fact that the parent who claimed me on their taxes (whom I've never lived with) made too much money in combination with their spouse.
    I didn't graduate because I was unhappy with my education and I fear going back to a school that I really want to attend due to the additional debt I will incur.
    I was lucky though and interned for a law firm during summer breaks and was offered a position in their records department. I am now running my own department for another firm at 23.

    I just have no money.
    I knew what I was getting into, but where is the limit for state schools?

    April 1, 2009 at 1:55 pm |
  10. Eva

    Thank you for taking the time to call some attention to this problem. I am a rising third year medical student at U.Va. Med and worry about my loans constantly. Although U.Va. Med is a state school, my tuition is still almost $30100 a year. That doesn't include rent, food, car, etc. OR the things the school requires us to buy (multiple textbooks, a pager & a phone plan to go with it, a PDA – their recommendation is an iPhone – and gas money to our away clerkships during our clinical years. I haven't even touched on the debt I have from my undergrad years (also at U.Va.). Add all of this up and you get close to, possibly over, $200,000. With interest.

    Did I choose this path in life? Of course I did. Did I choose to become a doctor so I could be rich? No, but I did (and still do) hope that I could at least make a living on my own.

    April 1, 2009 at 1:54 pm |
  11. Zim Zim

    I have over $150,000 in student loans and I am struggling to make the payments (over $1,400 per/mo.) I do not think I deserve or am entitled to a bail-out.

    I do, however, take issue with not being able to deduct one penny of the $10,000+ I paid in interest alone last year on the loans (penalty for earning just over $75K which is nothing on the coast in California).

    I also take issue with making loans non-dischargeable in bankruptcy, whereas someone who runs up an unlimited amount in credit card debt – yes there are people who made $500,000 in purchases of junk who just get to walk away. Okay, SL are dischargeable, but only when someone essentially becomes a quadroplegic, but it should not be so difficult.

    Interest rates and terms of the loan structure should be more flexible. I would think that as a society we would want to encourage and make education a priority.

    More carrots and less sticks with student loans, but no bail-out.

    April 1, 2009 at 1:54 pm |
  12. Paige

    There are many of you posting on this blog that have absolutely no sympathy for us who are swamped with student loans. Samantha, I feel your pain. However, she raised a good point (and one which I understand), about not being educated regarding the student loan system. When someone is 17 years old, they cannot comprehend what it's going to take to pay back this tremendous debt. We are young, idealistic dreamers who really did think that we'd graduate from college and have a great job with a great salary. Please don't fault us for making those decisions. Now that we're adults, we see how naive we were and we're paying the ultimate price. My 6-figure student loan debt has cost me countless hours of sleep and makes me feel sick to my stomach every time I think of what I owe. I can deal with the federal debt, but the private student loan industry is absolutely hideous.

    April 1, 2009 at 1:53 pm |
  13. Steve


    I want to say that you are in a tough situation, and for that you have my sympathies.

    A question I have is…if you could trade your current profession and living location, for a more mundane profession, located in small town USA, for not having any loans…would you do it?

    That is what many of us have chosen to do. We are not working for CNN, and we certainly did not spend our college years in Manhattan. We went to schools in crappy small towns, and now have Office Space jobs. Yes, we sacrificed experiences, for financial security. For that sacrifice, we are now reaping financial benefits. I would love to be a lifeguard on a beach for a few years, but I know that although the location and experience would be rewarding, the sacrifice of financial gain is just too great to justify that decision.

    You can’t change the fact that you now have loans…but going forward, what tradeoffs are you willing to make to be more financially secure? Your job? Your city which you live? Do not wait for the government, for that lifeline may never come. You have to take steps on your own.

    April 1, 2009 at 1:53 pm |
  14. Sarah

    Student loans are a nightmare. I have been paying my student loans for ten years now, and my loan total is now $10,000 more than when I started ten years ago. There's no way to get ahead, especially if you are sole support of a family.

    April 1, 2009 at 1:52 pm |
  15. John in Charlotte, NC

    It looks liked the green-eyed monster has peaked his ugly head among those with student loans.

    Many years ago I transferred from an elite, expensive private university to a inexpensive, run-of-the-mill public one when I could no longer afford it. I wasn't going to pay a high tuition for myself then and I'm sure not going to pay your high tuition now!

    You are adults and made your own contracts which you have a serious moral obligation to honor.

    April 1, 2009 at 1:51 pm |
  16. Peter J Kelly

    Well...I frankly saw this coming...so my son is going to SUNY Genoseo,(now very hard to get into!!). I couldn't see the $30000.00 difference PER YEAR between this excellent school and all the Private Schools my son looked at. We can afford State, (just!)...we cannot afford Private without deep sixing our retirement or incurring debt. Unless you went Ivy League or intend studying Medicine or maybe Law, no-one cares where you went 5 years out of college anyway. It's unfortunate that we live in a country where like Healthcare, Education is really a business for sale to the highest bidders. $100K of debt for a BA Degree is insanity and I refuse to burden my kids in this way.

    April 1, 2009 at 1:50 pm |
  17. quidam

    I agree that we all need to take some responability of spending within our means, but the government needs to realize that i spent roughly 120,000 on an education i am "supposed" to be paying 1200 a month for, i usually can pay about 800, but now i am making twice as much money as i would have been without a degree, and guess what they are getting double the income taxes out of me. at $5000 more a year in taxes to the government (a conservative estimate) i will have paid them back for my education within 24 years. when will the government realize it is an investment within there own system of income to pay for people to educate themselves. the government really needs to restructure the student loan system, they have loan officers telling students to do what best for the loan company and not the student, then we have less time to start making payments then it takes to get a job, and then when it goes into default its our fault and we are made to pay even more outragious rates.

    they are bailing out people who are irresponsable and spend past thier means while those of us trying to make something of our lives are hung out to dry, and cant get a home of our own, if we students could get a house the rediculous amounts of money we spend on rent could go toward equity on a house, but instead we continue to pay someone else's mortgage while they are bailed out.

    April 1, 2009 at 1:50 pm |
  18. Roman

    $113000 in student loans??? Does everybody have to go to one of the most expensive schools??? Last time I checked, there are plenty of the state schools where you could get a four year degree for under $50000 total!!! People need to be responsible for the choices they made.

    April 1, 2009 at 1:49 pm |
  19. Allen

    I feel shafted too, Sam - and more so than you do.

    When I chose what to study, I methodically investigated what my interests and aspirations were and compared them to what work in various fields would pay. Then I looked at what school options were available to me. Growing up in a poorer home, I knew every cent of my school would have to be paid by me. That's how I ended up in a state school and a degree in engineering, instead of a private school with a degree in my first love, Aquatic Biology – both were real options to me. I too finished school with "tens of thousands of dollars of student loans - and I had to pay every cent back, too. That sucks!

    Now, it's ten years later and I'm gainfully employed making about $150k/yr. So, why do I feel more shafted about this than you do?

    Because if you don't pay your loans back after all the poor education/career/borrowing choices you've made, then I'LL have to pay them for you - through my taxes, the tuition I will have to pay for my children when they go to college, and interest rates on loans in general. Where did I go wrong??--Imagine what I could have now if I had just sat back and begged for forgiveness of my loans and a freebie from the government!

    From where do you think the ultimate wellspring for the "bailout" money you want would come, Sam? It comes from productive taxpayers and people who actually pay their loans OFF! That means people like me!

    Oh, yeah I feel shafted – cause I'm probably gonna have to pay your loans off, too...

    April 1, 2009 at 1:49 pm |
  20. Rene, IL

    I would have to disagree with Stacie. While she did CHOSE to go to a private school, people CHOSE to buy homes that they knew they couldn't afford instead of staying within their means. These people are being bailed out so why wouldn't there be help for those that have student loan debt?
    As someone who chose to get a higher education in order to better myself and increase my earning potential I am finding it hard to make ends meat and pay off over $1200 a month in student loans. I completely understand the frustration felt by many who are finding it hard to make their payments, while the government is throwing money at homeowners to help them make their payments. I can't afford to buy a house because of my loans, therefore I don't receive any of the benefits these homeowners are receiving and out of $9000 paid in interest last year I only get a deduction of $2000. I don't see how this is fair and it is definetely an issue that needs to be addressed.

    April 1, 2009 at 1:49 pm |
  21. Sam

    While Samantha chose to go to a private college, her articles address a much bigger issue. Has anyone asked the universities a question: Why does your tuition go up by so much every year when our salaries go up by a fraction in the same period?

    For our leaders the question is: How do you suppose our youngsters going to compete in a global economy without proper education and so many can't afford it (even community college for that matter)? WHat are your plans to fix that?

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

    I understand why some people are preaching personal responsibility. However, do you remember what you were like at 18 years old? Young, stupid, full of big ideas and no idea what it takes to achieve them? That should sound familiar.

    Most students dont' have a clue what they are getting into when it comes to student loans and it isn't really explained to them or to their parents. Yes, it's true that ultimately we are own responsible for the loans but in this economy it is really difficult to take responsibility.
    I personally have grown tired of spending $1000 a month on my loans when I only take home about $1800.

    In my opinion, those suffering from student loan debt are much more worthy of a bail out than homeowners who took on too large of a mortgage. Students at least took on the debt in an attempt to better their lives with a college degree.

    I know I made my bed but if I can't afford rent it makes it pretty hard to lie in it.

    April 1, 2009 at 1:48 pm |
  23. Doug

    You ought to check-out the book "The Student Loan Scam" by Alan Collenge. I've never read it. But I judge covers, and it appears to be a good read.

    As for your situation, yes, you made a mistake. We all make mistakes. I've made enormous misakes. No one is immune. But life must move forward. This is why I believe in bankruptcy protection for student loans. However, according to the aforementioned book, bankruptcy doesn't exist for student loans.

    April 1, 2009 at 1:47 pm |
  24. MJ

    My hat is of to you for getting the education that you felt you needed. My daughter is going to college to become a teacher. This profession if very important for our youth to become an important part of our society but does not pay well. I hope that something will be done to decrease the debt obligation to receive an education. I feel the cost of an education is worth the cost in the long run.

    April 1, 2009 at 1:47 pm |
  25. Tim

    If you choose to invest in yourself you have to know what that investment is going to pay back. Don't take out a loan for a law degree and come out with a communications degree. Its common sense. If you can't figure the math out on the investment and pay back maybe you need to go back to math class.

    April 1, 2009 at 1:47 pm |
  26. Tracy

    Student loans are a blessing and a curse.

    The tuition. On the one hand, the wealthy elite who can afford to pay cash for Harvard tuition are not affected by this. And, rightfully so, are offended by the thought of subsidizing others's student loans.

    Fine. Agreed. But what I'm worried is the discriminatory effect here. Let's say everyone can only go to a college they can afford; there are no other options. Yay for you. None of you have student loans. Well, let's consider the percentage of people who will now elect NOT to go to university. This is a terrible precedent because our country NEEDS educated leaders from diverse backgrounds and cultures. Additionally, a caste-system of homogeneous group-thinkers will be churned out by our schools because everyone will be forced into an category based NOT UPON THEIR INTELLIGENCE AND LEADERSHIP POTENTIAL rather they will be sorted into schools based on their current financial ability.

    Believe me, as someone who worked while in school (both law and undergrad), I still have plenty of loans. I am just not whining about them. I am grateful for the opportunity to have attended my dream school and I will pay for that privilege for the next 25 years of my life.

    But I am also a capitalist just like the banks and the auto manufacturers. We all smell blood, AND I WANT MY PIECE OF THE MEAT.

    April 1, 2009 at 1:47 pm |
  27. Kayla

    To the people who do not feel sorry for us:

    After having my baby, I decided I would do whatever it took to give him a better life. So, I decided to go to school.

    I am a full-time mom, I have a full-time job, and I am a full-time student. Why should the goverment not give me some relief?

    I chose a community college for my basics to save money. And, now I am chosing to go to a highly prestigious private school, because I want the best.

    It does not matter whether it is a public or private school in which we attend. We are helping ourselves, our famalies, and ultimately our country.

    I'm not saying I want my debt to go away. I just want a payment plan that is easier. I will pay for my education until the day I die, if I have to. That's how much I believe in what I am doing. I just wish everyone felt the same.

    April 1, 2009 at 1:46 pm |
  28. Karen

    I disagree with everyone who says Samantha should pay back their loans with money from her earnings. You can run up $200,000 worth of casino debts and have that debt forgiven in bankruptcy, but you can not bankrupt your student loans. You can buy a home, pull out all the equity you want with a 125% loan if you can find it, use the money to pay off the loan, and then walk away from the home. You can get a bunch of credit cards, take out all the cash you can get under the cash advance, pay off your student loans, and then walk away from the credit cards.

    Our system is broken. We encourage people to gamble, smoke, drink and spend excessively but screw our young people who are most likely from disadvantaged circumstances (rich people are not hurt by the student loan industry, but they definitely profit from it). We should be helping these young people make America great, but instead we are enslaving them with student debt at high rates.

    Find a way to beat the system before it beats you, Samantha. Good luck.

    April 1, 2009 at 1:46 pm |
  29. chip

    Sorry Girl ... no sympathy here ... I paid mine, you can pay yours ...

    April 1, 2009 at 1:46 pm |
  30. Mel

    Great article! I'm in exactly the same situation, and I'm about to attend law school which will only add to my headache. I agree that it would be great if the government reduced the interest rate on educational loans to help its struggling citizens.

    I also think that some people are missing the point. While I fully understand that I made the decision to attend a private university and go to law school, that doesn't change the fact that the interest rates on educational loans is too high. There are multiple reasons sometimes for not attending state colleges (i.e. many times a person's state college may not provide the same quality of education as a private university, or a state college may not provide the same depth in a particular field as a private institution). Regardless of the reason, the article is not a battle between public education -v- private education; it simply seeks to improve the help offered by the government to ALL students. Let's not make artificial battle lines to divide ourselves, but rather let's try to unite behind the common goal of improving the ability for all Americans to achieve higher education.

    I don't expect anyone else (other than parents who are generously, currently helping me) to pay back my loans. Obviously, I have to pay them back; I have no choice. However, it would be great if the government could lessen some of the burden by lowering interest rates, extending grace periods, and perhaps providing more money in their federal loans for EVERYONE. I think that is the point of this article.

    April 1, 2009 at 1:45 pm |
  31. Dr. Jen

    To those of you who say this woman made a bad choice and you don't feel sorry for her, you are clearly insensitive and out of touch. Graduates from state universities still graduate with a huge student loan burden and although her debt would be less had she made that choice her monthly payments would still be a significant portion of her entry-level income, particularly in an urban area where most of the best paying jobs in the communications industry will be found.

    Moreover, if everyone followed your logic we would have no teachers, no social workers, and no pastors because by your logic no one should ever attend specialized schools that might put them in a career that wouldn't allow them to repay their debts. By your logic, everyone should major in business or finance at a public school so that they can get a good paying job in the financial sector, even if they would hate their job. (But oh wait! If we all did that, most of us would be out of a job right now anyway.) People make choices about their future that will help them live a satisfying and fulfilling life, which isn't always about how much money they will make in their career.

    I incurred all of my student loan debt while I pursued my masters and PhD so that I could become a professor at a four-year public university. Should I not have pursued that dream because paying my student loans on an assistant professor's salary would be tight? I am gainfully employed, I make my student loan payments every month, but things are tight. Is it wrong to ask the government why the banks get a bailout when the rest of America is left struggling? Personally I think it's a reasonable question that deserves an answer.

    April 1, 2009 at 1:45 pm |
  32. Ian

    Stacie- you claim people living beyond their means has gotten us into this mess, which may have a degree of truth in certain sectors. but how dare you extend that argument to the young people of this nation striving to succeed and better themselves at the highest educational institution they can achieve? I call that being hyper competitive in the most American sense, and working to better this nation. Particularly when our nations schools can easily be filled by Asian, European or other candidates whom are striving to get the best education that they can get. As they should. I am particular familiar with Chinese programs for their students to attend the best western facilities based on their academic achievements; How do they afford it with an average yearly wage of 6,000$? The Chinese government foots this bill as it attempts to continue near 10% annual growth and recognizes the need to educate its bright minds for the benefit they will offer society. The global economy is competitive and though the current laws guiding educational loans are in need of serious rethought (and I agree with Rev. Jacksons plans). We need to consider investing as much as possible into the education and future of this nation. Get the best education you can whether you rob beg or steal it, as it will not be given for free. There is a reason why quality educations cost money.

    April 1, 2009 at 1:45 pm |
  33. John Doe

    I disagree with any person who says its your fault for getting the loans.

    Education should be a free thing for the US citizens, just like it is for the thousands of foreigners who seem to overcrowd our colleges come in and get an education then disappear.

    The government should not be making money off of anyone who is trying to better their education. In fact people should be paid to get an education, therefore bettering the society as a whole. And no interest loans should be available for all for education.

    Build more education facilities not prisons.
    educate don't encarcirate

    It seems we are here to serve the government not the other way around like it should be.

    And Sally Mae, just another government scam entitiy.
    Just like Freddie Mac, Fannie Mae, and 90 percent of the other gov programs. See who is running these entities and how much they make per year....

    April 1, 2009 at 1:45 pm |
  34. Christine

    To all of the people who feel this girl got what she deserved, listen up. Think about what we are taught as we prepare for higher education. We are taught to find a job field we like, and try to get into schools with good programs in the field (that usually cost more than your public institutions). Who wouldn't want that? Who wouldn't want to get the best education possible in the job field of their choice?

    Students and parents are not properly educated about the student loan process, and this leads to situations like Samantha's. In part, this is because we as a society send students very mixed messages. We tell them they need to go to the best, most expensive schools to get good jobs in their chosen fields, but then tell them it's their problem when they graduate waist-deep in debt and struggle to pay it off as they work their way up from the bottom. It's sickening and it has to stop.

    It's already a struggle to convince students they need a college degree. Don't make it worse by telling them they are irresponsible for picking a quality institution that happens to be expensive. They're not irresponsible. They're trying to build the American dream – an endeavor we're all entitled to try and hopefully accomplish.

    I've long felt that our government should make public institutions of higher education FREE TO ALL WHO ARE ACCEPTED and pay the most talented professors well for their expertise and services at public institutions to take away the often negative stigma associated with them. Public institutions do offer quality education at a lower price in many cases but they need more funds to be attractive to all who want to learn. Let private institutions do what they want – if more flock to the economical choices they'll get the hint. Making a good education affordable and available to all is a crucial component to helping our economy thrive.

    April 1, 2009 at 1:45 pm |
  35. Shanny

    Like most of you I have been paying off loans for a while now and have been both working and attending school here and there when it's within my means – but thatnever seems to be the case – I agree that Obama needs to look into the student loan crisis and maybe he can start by LOWERING THE COST OF GETTING A COLLEGE EDUCATION!!!

    Really, I mean does the price of an education need to be hundreds of thousands of dollars? I am not a minority, or an immigrant and both myself and my family have worked hard in this country for a long time and we get no breaks. Why aren't there any breaks for "Joe the Plumber" when it comes to receiving a college education?

    April 1, 2009 at 1:44 pm |
  36. Phoenix

    It's amazing that we can't all be like both you, Bill and Stacie, in the fact that you are taking the stance of not wanting to have take on the burden of people who wanted to better themselves and their families by going to school, taking on student loan debt and then also having an affordable mortage that they can afford also. I understand that you would not want to take on this additional tax burden, but you have to be smart enough to wake up and smell the coffee and realize that it's the American people as a whole that are suffering from corporate irresponsibility and we ALL have to take on their failures as added expenses, so why not provide a little relief to all those with student loan debt instead of providing hundreds of billions of dollars to failing corporations like the auto industry?? If the Government would also wake up and provide a plan for all student loan debt, like say forgiving 50% of all outstanding student loan debt across the board right now, this would allow the American people to use the additional income that they now have to invest back into the economy and therefore stimulate this current climate out of the recession that we are deeply buried in right now. Yes, this would be a large amount of money (probably $290 billion), but this is money that is being offered to banking, auto and other industries now anyway, so just divert some of these funds to the people that need it the most...the American People!

    April 1, 2009 at 1:44 pm |
  37. Barbara

    Last year my husband and I paid $28,000 in federal income taxes. I would much rather my tax dollars go toward helping people like Samantha than corporate CEOs or car manufacturers.

    April 1, 2009 at 1:44 pm |
  38. Linda

    Sam, I too am sorry for the responses of people like Bill and Staci.
    I worked a full time job AT THE UNIVERSITY I was getting my MBA.
    I STILL had to take out student loans to finish the degree. And I did not go to a private university or even a big fancy one! I owe $75,000 in federal loans-now in deferment because I cannot pay the $1500 at this time. I can't even pay $500. I send in about $100 a month. I got lucky and was able to combine all my loans to the US Fed. Student Loan Department. They are great about working out payment plans to fit within your budget. Too many others will not.
    So tell me Bill and Staci–how is that my fault? How is it my fault that student loan interest and repayment requirements are higher than paying off a car loan or a house? SO WHAT if a person choses a private or public. It depends on the degree you are trying to achieve.
    Do either of you, and others with your lack of knowledge, GET IT that over 90% of people trying to attend a college or university CANNOT DO IT any longer by working full time or paying out of pocket???
    That these loans are NOW required to complete any 2-4 year basic education–public or private–it does not matter.
    I will be dead before I can get it paid off. And NO, bankrupcty should never be an option with these loans. I took them out, I need to pay it back or at least the principal back to keep the system working. Reduce payments and interest–yes–you had better believe it. It should have been done a long time ago.
    And school grants and other grants, while nice and help a lot, are taxed. And you can use some of the interest you pay on your loans on your tax return.
    And now most states are raising the tutition anywhere from 7 to 10% and limiting the number of students able to attend public universities.
    Pretty quick, loans are going to be a moot point–no one will be in school.

    April 1, 2009 at 1:43 pm |
  39. Rich

    What Ms. Hillstrom's experience proves first and foremost is that debt does NOT create wealth. It actually steals wealth from most students, especially those that wish to go into some kind of public service (teaching, non-profits, etc.).

    Ms. Hillstrom's existing salary, if she were debt free, could make her a millionaire long before retirement, if she could live on a budget and invest that $1200 a month she's currently throwing away on debt.

    Debt is the enemy, but people have been convinced that they can't live without it. As others have pointed out, college degrees are attainable without debt, and well worth the effort, for those who choose the hard road.

    April 1, 2009 at 1:43 pm |
  40. Justin

    First, I want to address the people that are pointing out that this girl went to a private school. That really has no bearing on her situation. I went to a state school and I have loans AND! I worked 30-40 hours a week in college. My GPA suffered and I didn't graduate for 5 years. The job oppurtunities that were available to me at the time 0! So I decided to take on additional debt by getting a masters. I now have a job that pays 42k$ a year.
    2nd. I owe close to 70k$ a year and can't make the minimum payments. I didn't ask for the situation. I was my only choice. I could have stayed in retail as a manager after I graduated. I could have stayed in the small town and never advanced my life. OR I could have taken the oppurtunity to advance myself. Which I did. Sadly I moved from Texas to NYC to keep a job I am again in danger of loosing. I make after taxes and cost of living increases the same as I made in Texas. I agree wholeheartly that if we would bail out the people the industries would follow. No says lets buy this overpriced crap and never pay. They think lets use this overpriced item and hope for a brighter tomorrow...and from where I sit in my dark cubicle its not getting any brighter.

    April 1, 2009 at 1:43 pm |
  41. Mac

    I'm in the same boat. I went to a private University in New York as well. I owe $125,000. Yea it stinks, and I have to make a $1,200 monthly payment as well, but for now, I have a job and can make my payments on time. I chose this and I have no problem paying back every cent through my hard work. Hopefully as years go on, I can go to another job that pays even better which will allow me to pay more than my minimum monthly payment. Good luck to us all....

    April 1, 2009 at 1:43 pm |
  42. Steven

    You can't argue that a person took more out than what they could afford. When you get an undergraduate student loan, you don't have anything to begin with! Mortgages and auto loans review your credit and income history, yet student loans say- "here you go." They don't tell you that you better major in something that pays well. But if they did that, we'd truly have no teachers, social workers, or public servants.

    April 1, 2009 at 1:42 pm |
  43. Jessica

    Thank you for this great article. I am in the same boat as you and was wondering when someone would shed light on this every growing problem. While yes it's our choice to go to school and take out loans but at the same rate we have no choice anymore. In order to get the great job you have to have a degree. I owe well over 150,000 with Sallie Mae and they are not willing to help us in anyway. I have tried other institutions and all I get is sorry you don't make enough so we can't help you.

    Please Obama we urge you to help us!

    April 1, 2009 at 1:42 pm |
  44. James

    I think it's funny all the people who're like, "You took a loan you knew you couldn't afford, deal with it" How is that something you could possibly know, especially in the case of a student loan? The whole idea is that you are attempting to better yourself so you can advance in your chosen career, or actualize some idea. There's no way to absolutely quantify what the salary/monetary improvement will be (and anyone who does so is trying to sell you something), what the job market will be like when you graduate, what will be the trends in your industry, etc...The whole concept is that you will be making more money. You can say goodbye to the medical field if you expect people not to put themselves ridiculously in debt in order to finance their education. I hope you weren't born in a hospital, helped by irresponsible doctors and nurses who put themselves in debt in order to work in a profession making peoples lives better. Oh, and by the way, if you're not interested in helping your neighbor you can go live in a cave, because that's how a society works, we help each other.

    April 1, 2009 at 1:42 pm |
  45. Danni

    Way to go Samantha!!!!!!!! Unfortunately, it seems as if no one is really willing to sit down with kids who are bound for college and actually explain the "ins and outs" of student loans. In my case, I graduated from high school when I was 16 and was in college 3 weeks after I turned 17. No college really wanted me (I even had the dean of one university call me himself b/c he wanted to explain that the university felt I was too young to be there, but so as not to get sued I could take some home courses through them)...the only colleges that accepted me were the expensive ones. I am the first person in my family to graduate at a super early age, and the first one to go to college. My father tried to figure out ways to pay for my education by ourselves, but the exorbitant costs made it impossible and so we had to do like a lot of other people and take out loans. No one really told us what we were getting into and at 17 I really didn't know what I was getting into. I know there are gonna be some folks saying well you took the money, you have to pay it back...duh, but at such a young age, a kid could very well be signing their life away, like I did mine. I started out paying my student loan bill, but then got laid off, the loan went into default which I had been trying to make a plan with the loan company to get back on track, but not at $500 a month which is non-negotiable. I have tried to tell them that I don't have the means to support my family and try to pay the loan back too, but they don't care. I told them I'm out of work and in my area we have a dangerously high unemployment rate (southern Ohio), but all they said is so what. I have been called every name in the book by the loan collectors (one even called me a lazy pig), but they don't realize I want to pay my loan off, I can't wait till it gets paid off but the reality is, either feed my daughter or pay the loan......It seems as if no one is trying to help the people that really want to pay back their loans or at the very least educate the people who are thinking about getting the loans in the first place. I regret taking out these loans (around $45000 right now), and sometimes I wish that I had never gone to college at all because of the financial strain it has put on my family (dad's PLUS loan for me is still at 20,000). It's a shame that all these big corporations like AIG are getting all this money and still making bad decisions but people like us get nothing but heartache. Where is our stimulus funds? The government needs to think of ordinary people who are struggling, not corporate execs who seem to keep getting greedier by the day.

    April 1, 2009 at 1:40 pm |
  46. Barry Morrison

    People who belittle those of us who went to private schools, need to get a clue. That, in and of itself, isn't the issue here. Some of us didn't have the choice of going to a public university. Whatever one may think, public universities aren't all that easy or convenient to get into. I was able to get into a private university for undergrad, the one I really wanted, but it worked better than the public university in the area, b/c I worked while going. Furthermore, I couldn't have gone to the public university's law school, and thus had to choose another private school for my legal education. Not everyone lives in a state where there is a huge choice of schools, private or public. I had to leave Washington state, and goto California, in order to goto law school...

    At the very least, we that have the loans just need more time to pay them off. Sure, we would love the loans forgiven, but those of us who don't live in Fantasyland know that isn't going to happen. Thus, rather than these rather restrictive rules on repayment, just make it easier for us to pay them off, while still being able to live and provide for our families. Not everyone is 23 years old, and just fresh out of school. Plenty of us are much older, going on a second (or third or fourth...) career, and that choice wasn't necessarily one we wanted, but b/c of circumstances, was necessary.

    Noone should be penalized for trying to better their situation.

    April 1, 2009 at 1:40 pm |
  47. Kira Gardner- Marshall

    I am in the same situation!!!!!!!
    I received my undergrad degree in 2001 and completed about half of my graduate coursework. I am $77,000 in debt. I was making payments on my loans for several years after consolidating them. Last year I got a call from the company that handled my consolidation, apparently I did not report a raise in my salary. This was a violation of my consolidation agreement that I signed 4 years prior. I was bumped out of my consolidation agreement because of it. Now my total payment per month is close to $750. I have recently become unemployed and I have no economic hardship deferments left. I guess I'm just getting myself prepared for the fact that when I find a job, my wages will be garnished.
    I do regret choosing such expensive school. But everyone from my parents to financial aid department employees said "Don't worry about the debt, you'll be able to pay it off in no time." That is just not the case and I feel stupid for believing it.
    I need some of that bailout money for my student loans. I am obviously not the only one. We should all band together and form an organization and work towards getting Obama's attention on this issue.

    April 1, 2009 at 1:40 pm |
  48. Andrew


    Consider yourself lucky! Try being a doctor with 8 years of college and $275,000 in student loan debt. $1200/mo is bad, but try $2100 a month!! You may think that a doctor's salary reflects the increased debt, but not for doctors who are just starting out. We're not as efficient, and aren't capable of earning the kind of living that older doctor's can. I'm living paycheck-to-paycheck and racking up more debt, because 35% of my income goes to my student loans. FML.


    April 1, 2009 at 1:40 pm |
  49. Steven

    That's an interesting article about student loans. I think I have a plan on providing relief to students like Samantha and myself... Since the TARP money was deemed urgent enough to prevent the most eminent market catastrophe by letting banks fail (exaggerated emphasis added), I believe students with high student debt should do the same thing... Just think about it, call up your student loan creditor, one who hopefully received bail-out money like me, say, " I would like to note that (insert name) Bank has been given money and a low interest rate on that 'loan' from the government and by extension me the taxpayer. Additionally, the interest rate you gave me is substantially higher than the interest rate the government, again me the taxypayer, gave you so let's re-negotiate on the basis that you have this cash influx which I am paying for so it seems like I'm paying you twice... You are options are (1) lower my interest rates equal or less than the one the government, me again, gave you or (2) I will “fail” by defaulting on my student loan and create a market catastrophe on par with the Great Depression!"

    Their reply might be "well, we'll destroy your credit" to which one should reply "Apparently, no one has credit these days so why would I need it?!?!"

    April 1, 2009 at 1:39 pm |
  50. Ed Thompson


    Great article. I was disappointed that you did not address the problem. Kids are coming out of High School completely unprepared to manage money. You said so yourself, you were uneducated on the process. Keep up the good work, but next time write an article on improving the education of High Schools kids. As a starting point, here is our solution to the problem.

    In the spring of my daughters Junior year in HS, I sat her down and explained that all assets in the family belonged to her, her sister, her mother, and me. This pool of assets was needed by all family members, and they must be managed. I showed her my salary and all of our assets such as home value, savings, IRAs, 401ks, cars, whatever. Her initial reaction was that we were wealthy.

    Then her mom discussed the costs of running the household. She summarized expenses such as the mortgage, food, insurance, taxes etc. The pendulum swung, and she suddenly thought we were poor. I explained to her that we were not poor, nor wealthy, but a typical middle class family.

    I then explained how a loan is broken down into 2 parts – interest and principle. If she borrowed, both must be paid back. I expained to her that her future salary was an unknown. I then presented to her an estimate of what we could pay per year. If she stayed within this budget, her education was paid. If she exceeded this budget, she would have to take out loans.

    Her response was fantastic. She focused on schools that were academic safety's, good fits, and reaches. However, she applied these same principles from a cost perspective. If she was accepted into a reach school that cost $50K, she know she would come out of school in debt.

    My daughter applied to 2 state schools, and 6 private schools. She was accepted into both state schools, and 4 of the 6 private schools, Of these, both state schools and 2 of private schools were in our price range. She will start college in the fall.

    April 1, 2009 at 1:38 pm |
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