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. Bill B

    Let's see if I correctly understand your "predicament." You overextended yourself by pursuing a four year degree at a private college in New York City when you could have gotten the same degree at a public institution for about one-third the cost. Whose fault is it that you made that decision? No one twisted your arm. And a pox on that "I didn't understand" nonsense. If you truly didn't understand what you were doing, why were you doing it?

    This article is simply a different version of the sob stories that have been reported regarding home buyers who got in over their heads. At what point does personal responsibility get into the picture? It sure didn't in this case!

    April 2, 2009 at 11:23 am |
  2. Harry Santiago-Perez, Philadelphia

    Anyone criticizing Samantha, shame on you. So you are saying the only ones that can study in this country are rich kids??????? Shame on all of you criticizing Samantha. She had a dream and she wanted to pursue, what’s wrong with that? Wrong is the system that charges your $$$$$ to achieve your dream. All those criticizing her are the same ones that cry every time hear God Bless America and proudly talk about the American Dream but on the other hand criticize those who want to achieve their goals. Again, the problem is the system. If we do not provide affordable access to all students then we will become a nation of elitists where only the rich will have access to education and the good jobs and our society will divide more and more between the rich and the poor. Is that the American Dream? Anyone criticizing Samantha, you should move to Latin America where the rich get richer and the poor get poorer.

    April 2, 2009 at 10:46 am |
  3. Kathia Rodriguez

    Oh! and I forgot to say to the people who are blaming us for taking student loans we can't afford: NEXT TIME YOU GO TO SEE YOU DOCTOR, OR NEED A LAWYER OR AN ACCOUNTANT REMEMBER THEY HAD TO TAKE LOANS TOO. NOT EVERYBODY IS RICH. WE ALL HAVE THE RIGHT TO GET EDUCATED IN WHAT WE WISH!!!!!!!!


    April 2, 2009 at 10:23 am |
  4. Nick

    Sorry – but you brought this on yourself. You have no one to blame but yourself. And you shouldn't be looking to other people to bail you out of the mess you created.

    Your sense of entitlement is galling. You should be ashamed of yourself.

    April 2, 2009 at 10:08 am |
  5. Steve

    School Loans are not predatory lending. I would love to see what you all would say if you could not get a loan for your 200,000 educations. I guess you would not be very happy.

    April 2, 2009 at 9:51 am |
  6. Kurt Elder

    I have dreams, who doesn't? Of course they are varying in form, function and intensity ... but one stands out. I want to start my own business. However, my student loans are keeping me away from contributing toward a start up capital fund (The venture market is weak, or other ownership structures aren't appealing at this time). However, what I would like to see is swap of capital investment. For example, I have 70,000K in loan debt. For every dollar I invested into a business (types of purchases would need to be regulated, along with a transfer limit) a dollar is removed from my student loans. ... 1) Investment is made into business development, 2) SL debt is reduced and 3) a trade cap limits the amount of exposure to the government position.

    It’s just a thought.

    April 2, 2009 at 9:47 am |
  7. R

    I'm sure you needed a 6 figure education to work for CNN. How else could they bring us such hard-hitting stories as

    "Valerie Bertinelli hanging on to fat clothes"


    "Nutritious snacks on the go"

    These were both on the front page of CNN.com today.

    The keyword is chose. You chose this path. Now deal with it. You don't need an expensive degree, especially an undergraduate one, to succeed in your field. I went to a state school for undergrad and work at do research at the top medical school in this country.

    April 2, 2009 at 9:39 am |
  8. Brenda

    The amount of insensitivity and apathy in some of these comments scare me.

    I was raised to understand that a four-year university degree was expected of me...as well as graduate school immediately after. And that I should do whatever was necessary to achieve that. I'm now sitting on about $120k in loans.

    It must feel so nice to be so financially secure, and to brag about it on the internet. But that won't help to solve anything. Apathy is what got this country into the mess it's in to begin with. If all you have to contribute to the discussion is, "Well, I didn't have any problems... and you're just being pathetic and whiny"... take it elsewhere. I want to hear comments that are supportive and helpful.

    April 2, 2009 at 8:43 am |
  9. Damian Palmares

    We have been lied to once again....what I have accomplished without a degree, the average person wont accomplish and therefore I absolutely feel that a college education is necessary to achieve your ultimate goals and dreams in life. However, you have to really think how much it is worth to you, right now it's critical, to say I went to Wharton vs UNC for example or USC vs SDSU...it's common sense and it absolutely depends upon what major you are interested in and where you think you will be able to land a job once you graduate. It obviously depends how good you are and smart you are and what you will do with your degree. Right now, it's very tough....it's tough for everyone, no matter how much success you've had in the past because we are experiencing a financial crisis like none we have experienced since the Great Depression.

    All I have to say is don't stop reaching for your dreams, a college degree is something to be proud of but don't feel entitled just because you have one because I will pull up next to you in my Vette at the stoplight and I wont feel sorry for you while you are driving your Hyundai feeling so damn proud you graduated from Duke. There's always someone out there who will achieve more than you ever will and will make twice as much money as you ever will...just remember that.

    April 1, 2009 at 6:48 pm |
  10. Fred. CT

    Well we all seem pretty divided on Samatha and her demands for a free lunch, but I think we can all agree the system is broken in one way or another.

    This is what I would do:

    A new Gov't run student loan program and some new tax laws

    1) All families or individuals can receive up to $15k in tax deductions per year and per child for college tuition expenses if the child GRADUATES (exceptions will be made for death of student/ medical situations/ disabilities incurred/bad family situations). So after graduation you can start deducting education expenses up to $15k per child with a $30k cap in any year. Thats up to a $60k deduction per child.

    I would say it could be capped for family who are paying at $30k per year (twins) but you can deduct up to $60k of costs per child over time so you will get the tax benefit eventually but you can't have families paying no taxes in some years.

    There will be no income cap on this deduction – all american families can benefit, rich and middle class. There is no better investment than higher education for future tax revenues for the gov't even if it means losing some tax revenue today.

    So in Sam's case if her family didn't take on the loans or take the tax deduction Sam could deduct $15k a year from her income and pay taxes on the lower amount and maybe pay the loans down quicker or get a better apartment etc. This would give her some cushion.

    Why $15K – seemed like a fair number – can't deduct the full amount but we all should get some benefit for completing higher education. You want to go private school well that is great but you have to shoulder most of the cost – state schools are already tax payer subsidized so you win 2x if you go there.

    2) Interest on student loans will also be tax deductible after still subject to deduction caps above.

    3) Student loans will begin amortizing 1 year from the date of graduation. (so basically a 31 year loan).

    I never understood why they don't match revenues with expenses on these loans. People hit their peak earning years 10-15 years+ after graduation why would they have to pay the loans back over 10 years. Stupid

    4) No interest will be charged on the loans until the graduation date or drop out date. You need to complete undergraduate school in 5 years (some exceptions noted above)

    5) You can have a 1x, 2 year principal grace period where the principal amount will be added to the end of the loan – this is for people who may want to go back to school, have some hardships etc. You will need to pay interest on the loans but principal is deferred. You need to submit a written reason for the deferral.

    6) INterest rate will be the 30 year T-Bill rate capped at 6% – this should be affordable and priced fairly.

    April 1, 2009 at 5:14 pm |
  11. Fujishige

    This is the problem with bailouts... people use them to justify why they should be bailed out too.

    A lot of people are saying that Samantha needed to take these loans on to get into a good school, and this helped her get a job, so she shouldn't have to worry about paying them back. So what about the student who, in a similar situation, got accepted to the more prestigious, more expensive school, but chose instead to go to the state school because they knew they could afford it. Where's their bailout? Instead, they should pay off their debts on their own, and then have to pay more out for people who didn't make the financially sound decision? Plus, apparently, they'll have a harder time getting a job anyway.

    I agree with most if not all of the people here in that the cost of higher education and the policies around it need to be changed. However, changing the rules after the fact just creates more inequality, and the people that suffer are the ones who made the better decisions with the rules that they were given at the time.

    I do hope things work out for the best for Samantha.

    April 1, 2009 at 4:33 pm |
  12. michael

    I agree with Stacie... School is affordable if you make smart choices. There are tons of scholarships out there and other avenues to take. Private or public the information is the same. You may not get as good of instruction at a public school but that just means you work harder. I worked my way through undergrad (5 years instead of 4 because of it) but graduated debt free. I cut corners as much as i could even to the point of using university library texts rather then buying them myself. Copy costs were much cheaper then dropping $75 a book. Then I went on to grad school (3 years instead of 2) but I did take a 25,000 gov. loan that time. I graduated in 2000 and now only owe 3,000 with a monthly payment of $190 while I now make 50k a year. Cry all you want to but where there is a will there is a way.

    PS i will have it paid off this year.

    April 1, 2009 at 4:05 pm |
  13. Melinda

    How can a country grow economically when such a huge portion of the population has this kind of debt? These people can't buy car or a house. It's in our own best interest, as a country, to reduce and reform this debt that was shoved on young people who thought they were making the right choice – to go to college.

    April 1, 2009 at 4:02 pm |
  14. Becky

    Just a few thoughts for those posters who graduated 20+ years ago and are commenting on decisions made by recent graduates and current students: A) tuition has skyrocketed (the college I received my BA from in 2004 has tuition rates that are nearly double what I paid just five years ago), B) a bachelor's degree is the equivalent of what a high school diploma was back when you were in school (we current students are expected to go to college, not just encouraged to do so as you were), C) private lenders are predatory (you didn't have a privatized Sallie Mae to deal with pre-1997: http://www.salliemae.com/about/).

    Other points to consider before passing judgment on students who take out loans that then plague them for decades (which, since this seems to be the case with a majority of students, points to problems in our higher education system and its costs and financing options): A) parental income affects the amount of federal aid students receive regardless of whether parents are actually contributing anything to their students' educations (and it's not an easy process to be declared independent for financial aid purposes prior to turning 23), which forces many students to consider unsubsidized and private loans regardless of whether they are at an in-state public school, private school, or (as is the case for some students) a community college, B) not every school has the program a student needs (sometimes students have to look out of state or to private schools to get a degree in the field of their choice, so it's overgeneralizing to say students can always choose a cheaper option or forgo a private education), C) many of the parents who recently had or now have students in college are still dealing with their own student loans, making it difficult for them to help put their children through college and forcing more current students to need to look toward loans (vicious cycle?), and D) we now live in a world where our students compete globally for jobs, and many students elsewhere in the world receive free or nearly free higher educations, thus entering the workforce able to earn less and still make ends meet since they are not saddled with the same debt as our students–this doesn't make our graduates very competitive on global scale when other elsewhere can do the same job for less.

    This is a complex issue, and overgeneralizing, assuming, or failing to realize that things have changed in the last couple of decades does not help clarify what's wrong with our higher education system nor how it could maybe be improved.

    April 1, 2009 at 3:57 pm |
  15. Sandra

    There was an editorial in the Times, where a career coach said that given the costs and time, becoming a plumber was a better career decision than becoming a doctor. Yeah, that's what this country needs. We can become a nation of plumbers and then go to our doctor who immigrated from a country where they don't have to sell their future children to work their a** off to help people. Some of the commentators that suggest the writer doesn't deserve any help, also likely expects her to pay into their social security retirement fund, which will be gone when she is ready to retire, perhaps while still paying her student loan debt.

    April 1, 2009 at 3:43 pm |
  16. Thomas

    What angers me is that student loan payments are made with post taxed dollars. My $1600/mo payment actually comes from making about $2000+/mo.

    If I had won a scholarship I wouldn't pay tax on that. My B average through college means that I have to pay 20-30% more for college plus interest.

    Bahh Hum Bug


    April 1, 2009 at 3:38 pm |
  17. Jerry

    I attended a small public university in Maryland, racking up a grand total of 8k in student loan debt during the mid-1990's. By -choice- I took my lowly $175/mo payment and paid it off over 7 years. I could have paid it off MUCH more quickly.

    Sam – you got yourself into this mess. You do not, and did not, have a 'right' to go to college right out of high school. Frankly, I think most 18 years olds should NOT be going straight into school, but instead take 2 years to work, volunteer and otherwise grow up a bit before going after the additional education.

    I am dealing with a 140k+ loss on the short sale of my home in Maryland after a job-related relocation that occurred almost 18 months ago. Would I like a bit of assistance? Sure. But I'm not sitting here on CNN.com whining about the decisions that I've made and their affect on my credit. They are a consequence of my actions, and I have to deal with them, just as your high loan balances are a direct consequence of your decisions and actions.

    Having a job in the current economy already has you up a step. Prioritize your expenditures – if all you can afford is rent, electricity and food, then that's what you're paying for. As mentioned by other posts – find a second job. Being an adult means eschewing Thursday through Saturday night partying if necessary for you to make ends meet. 20 hours a week at 8 bucks an hour can make a big difference in how much you feel you're making overall, and it might make the darkness of debt a bit brighter.

    April 1, 2009 at 3:35 pm |
  18. Steve

    Excessive borrowing has become a huge problem in this country.

    When taking out a loan, figure out what hte monthly payments will be and make sure you can pay it off in 5 or 6 years. If it seems too much, don't borrow it and find another way.

    It's simple. $100K non-mortgage loans are insanity.

    If people couldn't borrow so much, the demand for college would go down and tuititions would go down. Right now, ANYONE can borrow whatever the college says is the price and they are getting whatever they ask.

    April 1, 2009 at 3:21 pm |
  19. Angelie

    I've had many, many conversations with two friends who've done teaching at the highschool level, and this very closely relates to the question of when college is a good investment. My parents are not rich, and they told all nine of their kids that we would either earn the money or earn the scholarship if we wanted a degree (I placed to get scholarships, and now I am finishing my MA). In my opinion for right now, highschoolers should test out to figure out whether or not college is worth the investment- although it is not the fault of the writer here or anyone else that the cost of living (and education) has dramatically increased, making it almost impossible to pay off loans.

    April 1, 2009 at 3:12 pm |
  20. Gloria

    One more comment...to those who say, " I paid my way in college....don't expect me to bail you out when you need help...."Take a GOOD HARD LOOK at the reasons why our country is going through this crisis. Americans will come out in droves when there is man-made or natural disaster to help their neighbors, but when it comes to helping their fellow American better themselves...it's "well you don't deserve...if no one is helping me why should I help you...not with MY taxes, etc, etc, etc". When the selfishness and greed ends, maybe our country will get back on track. My mother raised me to help those in need, regardless of their need, regardless of what I do or don't have, and there were times I actually did go without to help a friend/neighbor/stranger in need.
    Everyone makes good and bad choices in their lives. But it is the noble person that offers their hand when a bad choice is evident.

    Teach our children better than this-

    April 1, 2009 at 3:05 pm |
  21. Jake

    Great article–now if only someone actually cared enough to do something about it. Too bad this is America, and only corporate criminals are afforded any help. I mean...what?

    Excuse me if I sound a little jaded. I've spent the last 21 years following all the "rules," working my a** off doing exactly as I was told in order to be successful, and so far all it's given me is a monumental pile of debt and the fleeting promise of a decent job. The jokes on me I guess. (haha?)

    So I digress: "Dear Baby Jesus......you're the only hope I've got. Please make my student loans vanish into thin air so I can finally get some sleep again. Ok thanks!"

    uhh...now what?

    April 1, 2009 at 3:04 pm |
  22. Big Stein

    ". I’m sorry, but if you were foolish enough to sign up for student loans with poor Ts&Cs, you should pay the consequences"

    blah blah blah. The lenders have responsibilities too. How is it ethical to lend $30,000 to a 17 year old who probably doesn't even have his or her own checking account.

    No creditor in their right mind would do this if the loans were not guaranteed/dischargeable in bankruptcy. The lender knows they are paying for a lifetime wage-slave/indentured servant. It's risk-free big $$$$.

    April 1, 2009 at 3:04 pm |
  23. Chelsea W

    This story is all too familiar. I am sitting on about 52K of loan debt after two degrees from a state university. Unfortunately, I went about borrowing for college in the completely wrong way, not looking at the big picture of repayment, but at the "It is nice that I that won't have worry about my tuition at all while I am in school " stand point. I am in higher education, which doesn't entail high pay at the moment without a PhD, and my reluctance to pursue this degree in order to avoid higher debt may inhibit advancement in my field of choice. My advice to any college student...save as much as you can, suck it up and take a job while in school, and avoid taking out loans if at all possible. Thanks for the story. Comforting to know that there are people out there in the same annoying boat!

    April 1, 2009 at 2:59 pm |
  24. Gloria

    I still owe for a student loan from 1987 when I was young and dumb. Now I am back in school, a home owner, a single mother, underpaid and over worked. But the only way I can get ahead is to get an education, which means take out a student loan. I graduated with my BA in Psychology and it amounts to nothing more than a HS diploma in the eyes of certain employers. I am working on my MBA. I will owe by the time I finish approximately $80k. Is it my choice to go to school, yes, but it isn't my choice to have to take menial jobs afterwards. So it is skewed the whole idea of getting an education in order to get a better job. If they are out there you have to have X amount of experience in a particular field. Yes the current administration needs to take a look at the student loan situation as well.

    April 1, 2009 at 2:55 pm |
  25. Young but wise

    I SO don't feel sorry for these people. They made choices, just like I did. I really wanted to attend college out of state but I looked at the tuition rate and saw that it was out of reach. So I lived at home and went to a local college my first year. Oh boo hoo, you wanted to go to an expensive private school. Wah wah. I graduated college in 3 years to save money. Do you really think it matters where your degree is from? Choose a profession that you can make a decent living from, save up, then work your way into what you really want to do or find a way to do it as a hobby. Do you really think everyone starts out from college with their dream job at their dream pay? No! That's what's called paying your dues! I have no sympathy. Higher education is not a right.

    April 1, 2009 at 2:53 pm |
  26. Jaemie

    For those who are saying that this only applies to people living beyond their means by going to a private university, this is not necessarily the case. I attend a public university (and a very good one, in fact), receive financial aid, and yet I STILL have to take out student loans. So for me, going to college period was living beyond my means. Does this mean that I should have just been content with my high school diploma?

    April 1, 2009 at 2:52 pm |
  27. Amanda

    Even if you attend a school within your financial means (or with limited student loans) there is never a guarantee that you will get a job that will help you pay off your debt. The reason people borrow for school is because they run on the assumption that the degree will be worth something someday–at least enough to pay the loans back and give them something to subsist on. The problem is, that doesn't always happen. Especially with the current economic state, the degree isn't always worth the paper it was printed on.

    April 1, 2009 at 2:52 pm |
  28. Mark

    Does anyone see the parallel between the student loan fiasco and the huge debt we as a nation are running up? Ask any one of these people who has a huge debt if it is making them prosperous or if it is dragging them down.

    The higher learning system is horribly broken and the huge fees charged by these institutions are being turned around and spent to build new facilities, like luxurious dining facilities and other lavish perks that have nothing to do with getting a good education. These folks on here who have $100K in debt helped finance a great deal of wasteful spending and it is a travesty. And all the while, the schools are pushing the propaganda that higher education is necessary to be successful so they can perpetuate the fleecing of our brightest young minds. Heaven forbid that a school take in less revenue this year than last and so it goes like the banking industry which raised fees every year to show improved numbers and look what happened to them. Can you say education bubble? It does no good to earn 20% more than your non-degreed peers if your student loan debt costs 40% of your income. Does having a degree mean you are worth 20% more than your non-degreed peers? Not in my experience, in fact about 80% of my dealings with college educated folks shows that they are far below their non-degreed peers, but the social indoctrination of the higher education system says they are worth more so they get more.

    April 1, 2009 at 2:50 pm |
  29. Mike M.

    Lets reverse the equation.

    If you got the loans and then became a brain surgeon. Would there be a column or blog about "I make too much money I want to give it back" Havent seen one of those one here.

    So it went the other way and now its help me. I got a doctorate and cant pay for it.


    April 1, 2009 at 2:50 pm |
  30. Jeff

    Although I would enjoy getting a bailout for my student loans ~$40,000, I don't think it should be done. The bottom line is that I borrowed this money, understood the terms of repayment, and it is my responsibility to pay it back.

    Lending institutions already have plans and options set up for people who are having trouble paying there school loans. There is no reason for the banks to drop their rates to nearly nothing because you feel you are entitled to go to a school, rack up over 100K in dept in a career field with low entry level salary. Lets not forget these banks issue these loans to make a profit, not for charity.

    Going to college is a previlege, not a right. If you could not afford the school, you either should have looked for outside scholarships/funding, got a job, lived at home, or maybe just looked at a different school that you could afford. It is not the banks responsibility or the government's to bail you or me out.

    April 1, 2009 at 2:21 pm |
  31. Marie

    Thank you, Samantha! I could sing you a tale of a civil servant who wanted to serve her country, got the best legal education possible (college advisors tell law students applicants to attend the best school they get accepted to in order to ensure the most job prospects), stuck to her convictions (even when her own law school was promoting big firms over public service) and chose a smaller salary to toil well over 40 hours a week in hopes of improving the government she believes in, and can barely pay her loans and her rent – but I'll refrain. Most of America already knows what it's like to work hard, fight for the things they believe in, and come up short in the end. I chose the school and the lower salary, and don't mind leaving leanly to do work I believe in, but shouldn't there be some help for those of us using a first rate education to try and reform our government? Seems Uncle Sam only wants weathly, well-educated people working for him – not kids from lower-middle class families who had to finance their own educations. Perhaps if I had gone to work for GM President Obama would notice me...

    April 1, 2009 at 2:18 pm |
  32. Pete

    I agree Samantha. I went to a public university and worked full time for three of my college years and still left with debt. To make matters worse, I went to a private law school and I now have about $175k in debt.

    Some of you will say that students should work during college to pay their debts. Unfortunately, it is nearly impossible (and sometimes prohibited, at least for the first year) to work while in law school. Public university law schools are cheaper, but they are very competitive and only accept a fraction of those who apply.

    Moreover, most law school graduates have no problem finding jobs when the economy is fine (like it was when I first started school). By the time I graduated, the economy collapsed and the job market all but dried up.

    I know that going to school was my choice, and I have no qualms about paying off my debt. However, there is something wrong with our country when you need to take out the equivalent of a mortgage to further your education. Predatory lending doesn’t only exist in the mortgage industry, and more oversight is needed for student loans.

    If we can provide some kind of relief for our best and brightest, it will spur innovation and economic growth. This won’t require relinquishing student loan debt—just by reducing the interest rate on these loans would make a huge difference.

    There's not a night I go to bed worrying about the amount of debt I have, and it's something I'm going to have to live with for the next 30 years. Heaven forbid if I lose my job or develop medical problems, as bankruptcy will no longer provide relief for student loans.

    April 1, 2009 at 2:17 pm |
  33. doug

    Listen, the student loan industry is a giant con game. The banks know it, the government knows it, and so should we. If I borrowed money from my friend Jimmy lets say 10,000 and i agree to pay him back , should i have to pay interest, NO thats called a Loan shark. The mafia does this. Basically, all interest rate bank loans are legalized mafia loan sharking but because its a legal form of it WE as a people accept it as ok. Lets not forget all the corrupt fees we are charged for these loans. I borrow 7,000 I should be given 7000 right ,WRONG try 6750,but I still 7000 plus interest, at the same time the semester starts in Jan. 20 well financial aid for the school needs the money on the 5th of Jan. Well the bank will charge you interest on the loan before classes even start. Lets say 150-200 dollars in interest and you have NOT even sat down in a single class. Times that 200 by how many student are getting financial aid and you are talking big bucks.... also we need to change these loan to 0-1 % interest and 50 to 65 years out ....it's a messed up system. What we really need is a UNION type group to fight for us. If the banks and the government doesn't want to play ball, WE as a group will NOT pay and see how much they change their tune then ....POWER to the People

    April 1, 2009 at 2:16 pm |
  34. Joice

    You know, I agree that we make our choices and have to live with it. I took a similar gamble on my career, and am hoping that it'll pay off. I decided to follow my heart wholeheartedly, and see where that takes me. Thankfully, I'm the kind of person that can live off $15,000/year and still manage to save a lot of it.

    While I don't necessarily thing the government should bail people out with student loans, or any kind of loans for that matter, I think it's in the interest of the country AND the global economy, that we support a system that ALLOWS people to pay back what they can afford instead of running from their loans. Punishing people by sending them to the poorhouse benefits neither banks nor society. People make mistakes, even people that didn't make mistakes still ended up with the shortest end of the stick, all I'm saying is that the government should help people help themselves.

    April 1, 2009 at 2:16 pm |
  35. Lori

    These unsympathetic comments are irritating me. I've worked two jobs since I was 16, including during the 4 years of my undergraduate, attended a state university with no financial support from parents or otherwise, and still have $60,000 of undergrad debt now a decade after I graduated. I went back for my masters degree (using tuition remission from my employer), not because I really wanted the degree, but as a way to avoid repaying my existing loans - which were costing me $600/month I didn't have. Consolidated.

    Perhaps the people who said something to the effect of: "worked my way through. No loans, just elbow grease" either went to school in the 1960s or are omitting the support of their parents.

    This system needs to change. Retroactively too. 🙂

    April 1, 2009 at 2:15 pm |
  36. Heidi

    Samantha, you are absolutely right. The US system of education is totally broken. If it is not the student that ends up with enormous depts, then it is the parents which basically have to take on a second home mortgage to pay for their childrens college education. We will be in our 80s by the time our Parent PLUS loans are paid of, unless we take them to the graves with us. It is shameful!!!!

    April 1, 2009 at 2:14 pm |
  37. Debbie

    Reading these comments has been very interesting. I managed to get a Bachelor of Science and a Master of Science without borrowing a dime. State universities can provide a good quality education, you get out of your education what you put into it.

    My parents paid my tuition for my first two years, however, they had three other children who want to go to college. I got a job at the university I attended, went to school part-time and got tuition assistance (basically free tuition). Yes, it took longer to earn my degrees, but, I owed no money when I graduated.

    How can you get money? There are scholarships that go unused every year because no one applies for them. There are employers who will reimburse tuition.

    April 1, 2009 at 2:14 pm |
  38. Mathew

    My daughter is currently in college. She was 3rd in her class in high school (4.9 GPA) and was offered a nice scholarship at every school she applied–but none were full-ride scholarships (she'd not an athlete 🙂 So, though she WANTED to go to an expensive private school, she had the good sense to avoid them, and is getting a wonderful education at a state university. She's funding that through a partial scholarship, nearly $10K support from me each year,working parttime, and taking a small student loan.

    I am all for changing the way we fund college education in this country. However, no one forced you to take those loans and go to an expensive school–when you took that money, you agreed to pay it back. YOU are responsible, not me or the US taxpayer.

    April 1, 2009 at 2:13 pm |
  39. Angie

    I don't think we can expect the government to bail us out on this one. My husband and I also pay 1200 a month in student loans, but we got the benefit of the education – why should men and women (taxpayers) who did not feel they could afford college pay for our expenses?

    Why should someone like my mom, who had a partial scholarship offer to a prestigous, but expensive school (even after the partial scholarship), but swallowed her pride and did her first two years at a community college (where she could live at home) help pay for YOUR 4 year private school education – she's a smart lady, went on to a four year college and has a successful career, but I'm sure it would have been more fun for her to not have lived at home at first.

    Yes, something needs to be done about the rising costs of education and yes, it seems unfair that everyone else is getting bailed out – but it has to stop somewhere doesn't it? Is the answer always – give me my piece of the pie – or should it be – How are taxpayers going to pay for this and SHOULD they have to? Sometimes the answer is yes, but I don't think it is on this one.

    April 1, 2009 at 2:11 pm |
  40. Travis, Fargo, ND

    Well my original post didn't get posted for some reason.
    I have $83,000 in student loans and my wife has $24k in studentloans. Under the incomebased repayment the article talks about. 10% of our combined income would have to go to each set of student loans separately. so 10% to mine, and an additional 10% to my wife's. Needless to say that's a lot. It's also based on gross income.. So even more than what our take home is.

    We have a very modest house and one reliable vehicle. I have a masters and my wife's loans are for an Associate Degree. I structured mine to pay a graduated plan (interest only for 8 years, A LOT of interest and principal for 8 years, and then the last 8 years are normalized again...)

    For now, just paying interest for my loans is somewhat affordable. Like a new car payment. Once we add on my wife's payments, even though she owes less it could bring both of our payments to just under our house payment.

    She may not be able to finance for 25 years because she may not owe enough.. Not to mention I found out from my leander that student loans are completely forgiven if one dies– Federal loans, which all of mine are..

    So, if I spend all this hard work and time sacraficing to pay my student loans and in 10 or 15 years or 20 years I have a sudden heart attack.. The loans are gone, and I'll have worked to pay them for nothing.

    Granted death kinda makes everything useless on this planet, it just seems imbalanced.

    April 1, 2009 at 2:10 pm |
  41. Natasha

    I have been paying for my student loan 12 yrs. I will finally have it paid off this August (woo hoo!). I chose to live in my parent's basement and go to a local college in lieu of taking out hundred of thousands of dollars for student loans and going to a more prestigious school that I could not afford. I lived within my means. Maybe more people should follow my lead?

    April 1, 2009 at 2:08 pm |
  42. Jenny

    I am in the same position. I am just finishing up an EdD and I owe 100K. I am scared to death. When I took out the money I didn't realize how much it would be a month once I was enrolled less than half time because I was writing. I realize now that I may never own a home and I may have to change fields because I am not making the kind of money I thought I would. Its a real shame.

    April 1, 2009 at 2:08 pm |
  43. Becky

    I do feel sorry for you and hope you can get lower interest rates worked out.

    I don't know that a bail-out is called for. I agree with the many people who say you have to learn to be wise in decisions–even at 17 or 18. Parents need to step up, learn to manage their own finances, and teach their kids to do the same.

    I know my husband, for one, completely paid for his own undergraduate and graduate education through a lot of sacrifice and hard work. He spent his summers working 60-hours a week at 2-3 jobs and always worked 20 hours/week during the school year. He chose an inexpensive but good school for both of his educations; we couldn't justify a more expensive school for his graduate degree and are glad we didn't pursue it. We also took a few years off before graduate school and made many sacrifices to save every dime for school (no cable, cell phone, internet, eating out, etc.). Every dollar counts.

    Educate your children to be wise! If a private school education sounds like more debt than you want, ask yourself if life will really be that awful if you "settle" for a "lesser" education. We can be happy in life with many different choices.

    April 1, 2009 at 2:08 pm |
  44. Kit

    From the threads here, apparently being educated is a commodity not unlike buying a car or a house. And apparently, unlike a house, an education is considered 'bad debt' and has 'fault' associated with it.

    Wow. When did that happen?

    April 1, 2009 at 2:05 pm |
  45. jonesy

    I work for a student loan agency and I couldn't agree more.

    April 1, 2009 at 2:05 pm |
  46. Libra

    What I find funny the most, are the people posting here who mock the woman for "her fault" for wanting a better education and a better life. These are the same people who are blaming the others for taking out student loans for graduate school and telling them, it's your fault for being in debt, suck it up, so what, I'm not helping you.

    Yet, those people who are in debt because of graduate school are most likely the researchers that YOU are demanding find cures for cancer, find out why you are having migraines, find out how to stop the illnesses that plague our society and advance the means to stop toxic pollution from invading our environment, as well as developing better means to feed our nation.

    Yes, this is all done by graduate students, who take out loans, because they cant' work a 40 hour job and get a Ph.D., I've been there, I know. Please, next time you "blame" the student for being "lazy and irresponsible" for taking our $100,000 in loans, remember that when you're in your doctor's office demanding a diagnosis for you or your child. A grad student probably figured it out for you while they were being poorly paid and in debt.

    We don't take out the loans because we want to, we do it out of need, out of the basic need to buy groceries, and pay rent. That is the reality of grad school. That is where the student loans really go. To live.

    April 1, 2009 at 2:05 pm |
  47. Chris

    To a high school or college student who's probably never made more than $10 an hour if they're lucky, $30,000 or even $100,000 is basically meaningless. I know when I signed for my student loans I had no clue how they would impact my life - or that the interest rates could increase on my private loans to the point where I would barely be able to pay them! I didn't know enough to even think to ask about it. I just knew that my dad had lost his job and this was what it would cost to finish my degree, so I signed.

    If I had known BEFORE college what an average starting salary was for an entry level position somewhere I wanted to live, what that meant for my take-home pay, and how much of that the student loans would eat up, it may have changed my opinions about state schools. Or one of those "lesser" private schools that offered me a full ride.

    High school students and their parents should have financial counseling before they choose a college. Not "here are the loans you can take out" type of counseling, but real-life scenarios of what a loan will do to you and your options over the course of the next 20 years.

    April 1, 2009 at 2:04 pm |
  48. LH

    I agree that the higher education system preys on 18 year old college students. My parents could not afford to save a college fund for me and I made a decision to go to a private school that was the least amount "out of pocket" for me and my parents. Private school offered more financial aid choices than the nearby state school, but we couldn't afford the state school bill. No one – and I mean no one – sat me down to explain what my repayment options would be after college and how much of my anticipated monthly income that would consume. I agree with a PP that education costs have skyrocketed due to the "free" money to pay for college in the form of student loans. I guarantee a typical 18 year old does not have the life skills to understand how much money they need to live on post-college nor how to budget their income to pay all of their bills. I was lucky to get a high-paying accounting position right out of college and have moved up the ladder from there; but I think those that go into lesser paying careers (i.e. teaching) would have severly struggled with the amount of debt I had when I graduated. In fact, my husband took an entirely different career path because teaching would not cover his student loan debt and other bills.

    My husband and I came out of college owing a combined $118k (including my masters degree – required for my career as a CPA but no financial aid to help) and have been paying on them for 10 years and still owe almost $80k at $1500/month. We always make our payments, but being unable to refinance them to a lower rate, are still paying 8% interest on some. We should be able to refinance our loans to current market rates if we've made ontime and complete payments. When we get one loan paid off, we use that money to pay on the next one and so on. It just doesn't seem like they will ever be paid off.

    I also think the tax deduction for student loan interest SUCKS! Before we were married, my husband and I were each able to deduct $2,500 of our student loan interest. After we were married, we lost the deduction altogether because our combined income was too high. Thanks Bush for "eliminating" the marriage penalty tax – they just moved it to another line on the 1040.

    If we are unable to refinance these loans to prevailing market rates, then we should be offered other assistance to help pay down these loans – either with bankruptcy forgiveness or tax deductions for more student loan interest.

    Thanks Samantha for bringing attention to this problem that is sure to cause more economic hardships than many people realize. Those that criticize her for her "poor choices" at trying to further herself should look back to decisions they made when they were 18. At least she's educated and a contributing member of society.

    April 1, 2009 at 2:04 pm |
  49. Student Debtor

    So, the jist here is that the author made her bed so now she has to lie in it, correct? Normally, I would agree with that assertion except that the reality is that for some professions, the school you attend has a direct impact on the job you can get. If you want to be a chief resident at Johns Hopkins, don't you think the steering committee is going to trash all resumes that are not from the Ivy League or Little Ivys? With that said, the assumption that Samantha has to live with her choices is correct, however, by making private college tuition and public for that matter so expensive, it makes it that much more difficult for those of us not from wealthy families to go to college and graduate. If higher education tuition rates keep increasing at this same pace, the gulf between the wealthy, the middle class, and the poor is only going to get wider and wider, and if you have ever studied history, that is how revolutions start.

    April 1, 2009 at 2:03 pm |
  50. Kim

    First of all, anyone with a student loan they're unable to pay, has my sympathy. My oldest son is trying to pay his student loans and as a co-signer, when he can't make the payment, my husband and I have must or have a derogatory mark on our credit report.

    I also agree that college is way too expensive.

    Having said that, we need to stop looking to the government to 'bail us out.'

    When you take out a home loan, a loan off (supposedly) sits down with you and discusses the terms of your loan and your payment schedule and helps figure out if you can afford the loan. High School graduates aren't exactly looking at whether or not they can repay the loan.... but they should. Perhaps school guidance counselors should sit down with them to help determine what they really afford, based on what their chosen field may pay.

    I wish all my kids could get a free education, but if FREE would mean that everyone's taxes would go up, then it's simply not fair.

    We should all learn strategies for personal responsibility. I desperately want an addition on my house, but I know I can't afford it. Going ahead with plans for the addition anyway, would be irresponsible.

    April 1, 2009 at 2:03 pm |
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