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March 30th, 2009
11:45 AM ET

Student Loan Nightmare: Help Wanted

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

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

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

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

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

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

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

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

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

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

Jackson’s plan proposes the following…

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

Source: Reducetherate.org

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


Filed under: Economy • Education • Samantha Hillstrom
soundoff (701 Responses)
  1. Paul

    The real problem is the cost of college. By any measure, it is out of line compared to when I went in the late 70's. You can budget carefully, go to a community college, transfer to state college, it doesn't matter. A state college in Washington State will cost you about $18,000 a year (not including books & incidentals). My oldest daughter goes to a private college and pays less. It is a racket and a monopoly, just like health care. What are you going to do...not go? They have you by the short hairs.

    April 1, 2009 at 11:59 am |
  2. Lee

    "I understand the choice to choose a more prestigious school if a person chooses to become a doctor or lawyer but unless that person has unlimited wealth available to them, the choice to take on six figure loans is all on them."

    So I guess the message is that we should let the rich people with doctor and lawyer parents be the only ones able to handle becoming doctors and lawyers? Don't bother achieving unless you think you'll get lucky. Just get by. Because your future and education should be a gamble.

    This whole push isn't to remove all student loan debt on the entire population, it's to reduce the interest on it so that graduates can pay back their money at a level equal to that of the formerly rich banks that have way more money than the average college graduate (who just happens to make up a good amount of the middle class). That way we are STILL paying interest on our educations but not at some inflated and unfair level. We are supposed to provide incentives to be educated aren't we?

    April 1, 2009 at 11:59 am |
  3. Jan

    Samantha,

    I feel for you I'll be graduating from Law school this May with extremely high Undergraduate and Law school debt- it surpasses your debt by about 185K I went to an excellent private undergraduate college and sometimes I do regret it was so expensive but I feel the education I got there was better then anywhere else for my major. I think part of the problem is 18 year college students aren't educated in finances and most parents aren't either – When I signed on the dotted line I was sure I'd be able to pay off my debt, and then I accrued more debt by going to law school- I'll be lucky to get a starting salary of $50,000.00 in this economy and I definitely wont be able to afford rent or food...I think my student loan payments are going to be roughly $2000.00/month There needs to be more done for this situation, education shouldn't be a privilege- it should be a right, if you're smart enough, have the SAT scores and grades to get into a good school then finances shouldn't get in your way – It's unfortunate that our country has become so greedy as to charge people extraordinary sums for something like education. I also think the student loan companies like Sallie Mae and Nelnet should be fined for their predatory lending practices, as I said someone at 18 has no idea the responsibility they are taking on, there needs to be forgiveness for these loans – that would free up more money and help stimulate the economy rather then this stagnate mess we're in now.

    April 1, 2009 at 11:59 am |
  4. Bev

    College is unafforable – period. Even state schools are out of reach for many kids, unless their parents are willing to mortgage the home to pay for college. My hat is off to students who are willing to assume the cost of their college education. I know – I have two in college – at a state school, and we are sharing the tuition burden with them. If individuals are willing to invest in themselves, stay out of trouble (you lose financial aid for a drug infraction), and work hard to become productive citizens, why is the government punishing them with high interest rates? Doesn't that ultimately hurt the rest of the economy? The doors of education should be open to all – that's what makes a democracy. No one should be penalized for working hard to better themselves, and in the process better this country.

    April 1, 2009 at 11:59 am |
  5. Al

    With the cost of attending college rising 325%+ since 1980, I feel schools are exploiting the students and families. You hear everyone complain when taxes increase 15% in 4 years, costing you a few hundred dollars, so you imagine what it's like to have tuition nearly double during you 4 years at college, costing you several thousand dollars.

    I, like most students, am more than willing to repay my loans, but the banks are not willing to work with the students. Offer a structuring program for students similar to the one the home owners received. Allow them to renegotiate the contact and make the repayment of the loans reasonable. I've worked in the student loan industry. A $40,000 loan at a 14% variable interest rate is not reasonable! How do you expect students to have good credit at 20 years old? How do you expect anyone to repay that loan (not to mention all of their other loans) making only $30,000-$40,000 after graduation?

    Fortunately I can afford my money payment at the moment, but there are millions of students who cannot. That is a problem as big as the housing crisis.

    April 1, 2009 at 11:59 am |
  6. Shell

    I can completely relate to this article. I attended small, private university close to my home. It was the best experience of my life-I was a foreign exchange student and lived in France. I never would have had this opportunity otherwise. I came from a poor household with a single mother. I remember signing all the loan papers every year and just thinking "I'll worry about it later." Well, I graduated in 95 and the loans payments began. I did the graduated schedule for 4 years because I couldn't find a job in the depressed area of FL that I live in. I drove a crap car and didn't have anything to my name. Over the years I got better jobs and paying the loans was my top priority. I ended up paying over $30K back in 9 years. I feel so bad for these kids today. College tuitions are out of control and the jobs just are not there.

    April 1, 2009 at 11:58 am |
  7. nb

    as i'm sure you are all aware, every situation is different. for those who preach about "working through school" and "living at home" to curb the costly investment, you should know that these are not the simple answers for everyone. i couldn't live at home, since there was no school within driving distance, and my home life didn't beg extension. second, i went to a state school (as cheap as any other) and worked through my entire collegiate experience. however, there was still no way i could afford living costs, tuition, books, food and other necessities. i never traveled, never lived out of my means, yet i couldn't have come close to paying for my education alone. no grants or scholarships came my way, so it was loans or bust. my point being, don't slap the righteous "i did it, so should you" brush around my friends. it ain't like that for everyone. some have no other choice.

    April 1, 2009 at 11:58 am |
  8. Bryan

    Like Samantha, I owe over $100,000 in student loans as a result of going to a private medical school. I currently owe more in student loans than I do on my mortgage. But I knew going into medical school what my debt was going to be and I have prepared properly to pay for it. I guess its not fair to pick on people who chose to go into careers that pay less, but you need to decide early on whether your education is worth what your paying. If you are collecting $125,000 in debt for an education, that education better get you a job that can help you pay off your debt. If not, then your education was a bad investment.

    April 1, 2009 at 11:58 am |
  9. BV

    You actually can consolidate your federal loans with Direct Loans if your lender does not offer consolidation programs. http://loanconsolidation.ed.gov/

    As a Financial Aid Counselor, I like Jackson's proposal but do not like the idea of schools NOT being held accountable. That would be a big mistake. Schools must be held accountable for educating their students on loans and repayment – and a high default rate is an indicator that schools are not doing a very good job of this. As you said yourself, you were uneducated about loans while in school and if you had been counseled by someone in your school, you may have made different decisions. Borrowing is not a one-sided responsibility – schools, lenders and borrowers all have a role to play with respect to social responsiblity.

    I believe that we will see a bigger crisis in the student loan industry and it will shake things up in a big way. I'm surprised that it is not a bigger topic in economic discussions but regardless, we can expect that it will have a large impact in the very near future.

    April 1, 2009 at 11:58 am |
  10. Mike, NYC

    Hi,

    I'm sorry at first I did sympathize with you, I graduated college from a private school and currently have $149,000 in student loan debt, my payments are $1502 a month and because of it I'm always broke but when it comes down to it, I chose to stay at private school and fully accept the consequences. I will have paid them off when I'm 39 years old, Im currently 24 years old. It was your choice to stay at an expensive school and while you cannot be responsible for the economic downturn and the salaries your field pays you, you should have known a job in TV is not going to pay you $40,000 or $50,000 a year like a finance career would coming out of college. Because of that you should have chosen a state school or community college into a private school for 2 years. I agree with you, I had no idea what I was signing when I was 17 years old and applying for loans. I also have a 15 year repayment window. While I do agree it would be nice if they lowered the rate to 1% as my interest payments are about $600 – $700 a month, I don't expect it. This is america, the little guy always gets screwed. The reason I have these loans is because the government said my family made to much money to qualify for federal loans except my families a middle class family from the north east where living expenses are much higher than elsewhere. Oh well like they say s*** happens, you just gotta deal with it.

    I don't mean for this to sound mean as I feel for your situation as I'm in the exact same one, I just accepted the fact I chose this for myself and in reality I'd pay double for the memories I got from that school.

    -Mike – NYC

    April 1, 2009 at 11:55 am |
  11. Jose

    Way to Sam. This topic is not nearly discussed as much as it should. I graduated 8 years ago and I am sitting on about 85K of student loans. Many people may criticize the choice of going to a more expensive school, but I was much like you as many (18 year old students are) and very uneducated about the student loan process. Hindsight is 20/20. The is a little hope though with the College Cost Reduction and Access Act of 2007. There is more information at http://www.finaid.org/loans/publicservice.phtml Its not just capping payments but possible loan forgiveness after a given period of time and service in various areas of public service. Not for everyone but it could help.

    April 1, 2009 at 11:55 am |
  12. Linda Chiles

    Thank you for this article. I am 56 and went back to school a few years ago to get my masters and am ABD on my doctorate. (not a private school) Student loans were the only option available to me for an advanced degree and at the time I was making enough of a salary that repaying the loans was not a concern. I needed the degrees for career advancement.

    Needless to say in the downturn the corporation closed my department. I have not yet been successful with a job search and am now in a catch 22 situation.

    In a nation that values and promotes education I have to agree that if we are willing to bail out corporations we need to bail out our citizens as well. I am not opposed to national service or similar program for forgiveness of a portion of my loans nor am I opposed to accepting responsibility for the debt. I need an opportunity to use my skills to do just that.

    April 1, 2009 at 11:55 am |
  13. jim correia

    To all the people who say "you live beyond your means":

    Actually, we are not living beyond our means. We are getting educated to have a better salary in the future than at present. The average private school tuition is 30K per year. Most students pay less than that due to scholarship and parents carry some of that burden. So its still a deal. But consider most employers require a college degree for even basic employment in a career.

    I have 30K in loans, 10K from interest accumulated while I got my M.S. and PhD. I am in the same boat as Sam, though. Having my degrees will benefit me in the long term. But in the short term, with starting salary's so low, and health care rapidly increasing, its hard to justify an advanced degree, let alone a degree.
    Would rather we not get a good high quality education? Answer yes, and you are asking us to be a burden on you in 30-40 years when we are unemployable, seeking welfare and food stamps because we chose not to be educated.

    Turn it around: what about the people who wisely say we cant afford an education? They wont ever get a high paying, good benefits job. their offspring will also suffer the same fate. They will be who our tax dollars support in the future.

    The question is: How do we educate people and not saddle them in so much debt as to make education unaffordable?

    April 1, 2009 at 11:55 am |
  14. Stephen S

    I have to completely disagree here. I went to an in state school and was lucky enough to have my parents pay for college. I still WORKED through college and paid for books, food, and rent. I had a small loan the first year and paid that back quickly.

    My wife lived at home and went to an instate school, and worked 40 hours a week while becoming a TEACHER (very underpaid, under appreciated profession) yet still managed to save enough to pay for our honeymoon and a down payment of 10% on a modest affordable house.

    People make choices and have to live with them. I am so tired of this entitlement mentality in this country that we DESERVE things. People, this is AMERICA, where we EARNED our freedom, where we EARN the american dream, no one handed it to us. Too many people have too much stuff (new cars when they have paid for ones, leasing cars so they can be IN, bigger homes then they can afford).

    While I agree the costs of an education are enormous, everyone here is kidding themselves if they think democrats or republicans will actually do anything about it. Just look at our dismal school systems. This isn't a priority now and never has been and they just give lip service for votes.

    Work hard, work SMART, and make better decisions america!

    April 1, 2009 at 11:55 am |
  15. Megan

    I know exactly how you feel. I come from a middle class family, so I didn't qualify for any financial aid even though my parents didn't make enough to pay for my college tuition. I took out loans as an undergraduate and graduate student because that was the only way I could pay for school. Even though I worked during school to pay my rent and living expenses, I still needed loans to pay for my classes and books (which are costing more and more these days thanks to the evil, money hungry publishers). I'm now obtaining my secondary teaching license (because there aren't any jobs available in journalism, the subject I got my bachelor's and master's degrees in). I consistently get threats in the mail from my lender even though I'm enrolled as a full-time student and they are required to defer my loan while I'm in school. And while they're threatening me, I'm racking up that pesky interest which I've barely made a dent in thus far.

    My biggest fear is that I'll never be able to buy a house because I will be too busy paying off my student loans. I've worked hard up until this point, but it basically feels like everything I've worked for will go down the drain once I begin teaching and have to give up a good chunk of my salary to what it cost me to get educated.

    My friends in the U.K. pay a modest tuition at their universities, and they never have to buy books. They also have a great deal of time to pay back their loans and aren't required to do so until they've obtained a job with a decent income. Why isn't the U.S. more like this?

    For all of the people on here criticizing us students who aren't settling for a cheapy community college or saving up money for years to go to school, I ask you to look around and see what these conditions are doing to your country. Less and less people will be motivated to get educated with financial conditions like these, and we will soon slip far behind all of the other major countries in terms of intellect and industry. Some of us need to borrow money just to get a decent education, and there is certainly nothing wrong with that.

    April 1, 2009 at 11:55 am |
  16. Jeff

    THANK YOU! I am 50 yrs old, started college late, and STILL have student loan problems. We all borrowed thinking that wages would rise and we would all be successful and make enough to pay back these loans without big problems. WRONG! I am so strapepd myself I cannot help my own kids through college and now THEY are beginning their lives with debt.

    My un-educated friends are doing much better than I am, and I have a hard time encourageing young people to take on college knowing what they will face after graduation: huge debt and a low paying job–and that's assuming they can find one!

    Why would anyone accept the President's challenge to get more education when all it will do is come 'round to bite you in the butt later!?

    April 1, 2009 at 11:55 am |
  17. Cry me a river

    Why should your economic choices be someone else's burden? The argument that the country is throwing away money to help other bad loans and should accordingly throw some away to solve your personal problem is weak.

    As a nation we must learn to live within our means. This applies to the full range of economic choices. If the individual is protected from his or her bad decisions, when will the individual learn to make good decisions?

    If you want to attend an expensive school, then you must either enter with the means to pay the tuition or acquire the means to pay the loans after graduation. Why should the government further underwrite the cost of college education when it gets such a poor return on its dollar? Research the percentage of Pell Grant recipients that actually graduate.

    I earned a Ph.D. at state universities and used work plus graduate research stipends to pay my tuition. It is a novel idea, but maybe others should try it.

    April 1, 2009 at 11:54 am |
  18. Clayton

    I had a federal and private loan. The bank wouldn't do a consollidation for me either becaue I didn't have the minimum amout. I did a federal consollidation loan and it went through in about 6 weeks. Check it out. For me it saved about $50 but mine are only $30,000. Best of luck

    April 1, 2009 at 11:52 am |
  19. VAudiss

    I have over 64000 in student loans but most of it was because my parents "made to much" for me to qualify for Pell Grants or even Subsidized loans. BUt the problem was they were still paying off my older sister's loans from when she dropped out after they cosigned on her college loans. Yeah my dad makes a decent salary but he has a morgage, car payments, and other loans to pay so how was he going to help me. I teach school so I'm not in a crappy paying field but its not enough for me to cover all my expences esp if I want to pay principle on my loans. And I when to a public college and it cost as much as a private college I looked at. When AL cut funds to all the colleges my tuition went up. That wasn't my fault but I have to pay for it over the next few decades. I want a house but cant get one becasue I can't save because I have to pay loans. But if I could save I could buy a house and have LOWER morgage payments than rent. I can't move in w/ fmaily because I can't get a job where they are to save money. It's a nasty cycle and a lot of us are in it. I don't expect to get bailed out but it would be nice for a little help.

    April 1, 2009 at 11:52 am |
  20. Megan

    Way to go Samantha! I hear ya! I have a job, but I also have $45K in school loans. All of them are Federal, so it's good (for me) to hear about the new program that's about to start. I'm going to have to check into that! The $450/mo is killing me, on top of Mortgage, Car payment, Insurance, etc.
    President Obama is so into getting everyone educated. Sure they have a plan to help all of us that have already taken that first step.
    Keep up the good work! Good luck to you!

    🙂

    April 1, 2009 at 11:52 am |
  21. Jon

    Great work Samantha. The Student Loan situation has been a mess for 20 yrs. Like the president mentioned. 30 years ago, students received 30% of their funding via loans and 70% via grants. It has now flipped with 70% coming from loans and just 30% via grants. But don't feel bad. I served in the USMC during a period where the old GI Bill expired prior to a new one. I received NOTHING from my honorable service in the Corps. Until this country makes education truly affordable, we likely will nver compete with nations such as India, China, and many Eastern block countries where the educational costs are near free.

    April 1, 2009 at 11:52 am |
  22. Peter

    I am truly sorry that you are in this situation. However, having said that...I'm getting a bit tired of hearing how those who made bad decisions (either through being uneducated or naive) are expecting to be bailed out. I bought a house that I could afford on one income (knowing full well that my wife wanted to stay home once we had kids), I purchased a car that did not eat into my monthly income, I went to a college that I could afford, read the student loan provisions, and faithfully paid off the debt. If anything, these constant bailouts and debt forgiveness schemes are simply rewarding those who were either to quick or too uninformed to make the right decision. Home ownership is not a right, credit cards are not a right, and college is not a right. I know that you and those in your situation will likely disagree with me on this and that is your right. However, please don't expect me to stand idly by and watch my tax dollars go to you for making a bad decision....

    April 1, 2009 at 11:51 am |
  23. Joe

    Y'all should stop giving people grief about taking out large student loands. I could have drank, drugged, gambled, and bought a fancy car and got into debt, but instead I took out a student loan and lived on Ramen noodles for 4 years. Thanks to my education, I have a decent job and when my loan is paid off in 10 years I can upgrade to regular spaghetti. My situation would be much better if I was able to make what my education is worth in this economy but if I didn't have such a large loan my future would look much brighter.

    I really hope Jesse Jackson's plan works out. I'd like to be able to support a family on my income, but I'm not going to be able to think about having kids until my financial situation is better. Of course, I can go and be irresponsible and hope someone else pays for them...

    April 1, 2009 at 11:51 am |
  24. Matt

    I shook the devil's hand twice, my wife and I have just short of $100,000 in student debt for our undergrad and graduate degrees. It’s a long miserable burden for sure, but it beats menial work and the wages that go with it. I’ve been enriched personally by college in ways that are hard to describe and it was worth what I paid. That being said, I’m also self-serving and would support any candidate who offered me debt forgiveness. I don’t deserve debt forgiveness, but “deserve” is a quaint notion that has no place in wealth management. If I had my loans forgiven, I’d move to a better neighborhood, trade in my Echo and make some retail purchases. So if you need to rationalize it as an economic stimulus, go right ahead.

    April 1, 2009 at 11:51 am |
  25. Marcie

    The amount of venom being spewed by people on this subject is disgusting. How can you possibly compare an 18 year old who is just starting college to adults buying homes they couldnt afford? How many high school kids really understand what signing on the dotted line of their student loans means for them? Not many, I guarantee you.

    As for the public vs private school debate, why should someone who has the academic chops to cut it in a Ivy League school take several steps down and go to a public university that anyone can attend? Sounds like you think only those with wealthy families should reap the benefits of academic hard work in high school and those who werent born with silver spoons should just stay 'in their societal place'. Shouldnt those students have the chance to better themselves?

    I owe about 40k in student loans and, while I make enough to afford the payments of my consolidated federal loans, the private ones are on hardship forbearance because I dont make nearly enough to pay them. I would have to stop paying my mortgage in order to make those payments, and even then, it would barely be enough.

    If the government can bailout failing companies who KNEW the consequences of their actions, then they can certainly take steps to assist those who are the future of this country, those who would stimulate the economy if only they werent charged ridiculous interest rates on their student loans and not given any options by private lenders. The private lenders are no different from the credit card companies in terms of being predatory to college students.

    April 1, 2009 at 11:51 am |
  26. Mike

    Everyone wants a bailout. We've become a society where nobody takes responisibility for their actions and decisions. The worst and first excuse everyone uses is "I didn't know what I was doing at the time."

    Everyone has dreams of leaving school and immediatly rising to the top of their field, with no experience. Starting out at the bottom sucks, but it doesn't last for ever. Looking down the road that burden will ease up, and it won't seem so daunting. At least you took the smoothest route, by pursuing and getting the education.

    Where is the bailout for the person who couldn't afford the college education, with loans or not? Who'll never see the riches that lie in your future, because you did? Are you going to wake-up one day and give your money to them, because "They didn't know what they were doing" at the time? I doubt it.

    April 1, 2009 at 11:51 am |
  27. Elio

    Finally, someone has identified a huge problem in the way our system works. We always hear about predatory lenders and their tactics, but we never consider the fact that the education system essentially does the same thing.
    Why are schools charging $50,000 for a Masters in Public Health, for example. Most public health jobs don't pay more than $40,000 a year. Why are the costs for undergraduate educations escalating to similar levels? A lot of jobs now require graduate level degrees. If colleges -even the public ones – are going to continue charging tens of thousands of dollars for an education, then their tax statuses should change.
    These schools and loan programs are taking advantage of young people who have probably never been exposed to credit and personal debt at the age of 17 or 18 when they graduate high school. Education has become big business now and colleges and lenders are selling people on a debt-filled future. That's predatory in my book.

    April 1, 2009 at 11:48 am |
  28. Ryan

    I am in the same boat. However, I'm at about $130,000. I have researched extensively for more information to help me but there is not much out there. I got no help from the gov. Just because my parents live in a wealthy zip code and make a certain amount does not mean they are going to help me or can afford to help me pay for school. Currently I make $15/hr and get paid for an avg. of 40 hrs a week. My student loans take up more than 1/2 of my take home. It is absurd.

    April 1, 2009 at 11:48 am |
  29. Shannon

    I think it's pretty sad that student loan debt is pretty much the only sector that doesn't get any help. People can buy homes/cars they know they can't afford, file for bankruptcy and be done. Not so much for the folks who owe student loans. Auto and Banking industries can wreck the country and get bail outs. Why not student loans?

    April 1, 2009 at 11:48 am |
  30. Harry

    We can bailout millionaire bankers and insurance CEO’s, let these fat cats keep their 12 million dollar bonus; but let a working class collage student ask for the same interest rates on their loans and the conservative rabble wants them sent to prison!

    Two weeks ago a contract with a Wall Street broker was a holy bond that could not be broken; but an auto workers contract – NO PROBLEM – tear ‘um up – they don’t deserve a living wage!

    Double standard for the middle class vs. the idle rich!

    April 1, 2009 at 11:48 am |
  31. NW

    Agreed- the rest of the world is apparently passing us in the education of their population but we insist in putting up barriers and making it as onerous as possible to obtain a quality education. Instead we are having to give visas to "knowledge" and tech workers because we are not educating enough of them. Does anyone else see the anamoly here?

    April 1, 2009 at 11:48 am |
  32. Marie

    I'm amazed at how many people can compare taking out student loans with buying a house you can't afford. from the day you start going to school, your are told that your goal is to get to college. you're told from parents, teachers, and peers that higher education is the best path toward a good, stable, career. because of this environment, tuition has skyrocketed. i graduated from a public state school, and the level of debt is still high! education is supposedly something that everyone in our country has an opportunity for, yet we saddle our graduates with thousands of dollars in debt to start their adult lives. i don't think you can compare this to people buying outside their means , when education in general has become so unaffordable and class restrictive.

    April 1, 2009 at 11:48 am |
  33. coops, OH

    At least you are getting the work out about making bad decisions... but why should we feel sorry for you? You should have thought about that before you chose your school and profession. I have a whopping 3k$ in student loans. I went to a public university in a small inexpensive city, worked through school, and studied in a field where I knew I could make money. Of course a public university in the midwest wasn't my first choice, neither was engineering, but life isn't fair.

    April 1, 2009 at 11:48 am |
  34. Mary

    I am frustrated with people commenting about a "bail out" for Sam. The same wagging finger towards Wall Street should be made applicable for Sam's own management of her personal finances. My sympathy for you basically ended at "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 think it's time Americans started paying attention to the price tag. Before you get a private school education for for hundreds of thousands of dollars, how about taking a basic class at a community college on basic finances! You'll thank yourself later!

    April 1, 2009 at 11:48 am |
  35. RL

    I too have a large sum of student loans from attending law school. I went to a state school but still have a large amount of loans. I am finally making a wage-after graduating almost 9 years ago-where my student loans are affordable. However, I struggled for many years to make my payments at low wages (many attorney's make much less than people realize) even with the loans consolidated for 30 years. I am not asking anyone to forgive my loans but I am a strong believer in incentives. I have paid on time for fours years so I got a 1% reduction on my 8% interest rate. There should be more incentives. Also, my husbands student loans are at a much lower rate-just due to the luck of when we each graduated and consolidated. That needs to change so we can re-consoliate anytime rates go down-like homeowners!

    April 1, 2009 at 11:47 am |
  36. j vauan

    Sorry, I have no sympathy. I went to a private college while working a part-time job and a work-study job. My student loan was manageable. I lived below my means in order to save for the 20% downpayment and closing costs on my home. We as a country need to stop wanting instant gratification and learn once again the meaning of hard work and responsibility.

    April 1, 2009 at 11:47 am |
  37. longstreet

    I agree.

    April 1, 2009 at 11:47 am |
  38. Bart, Houston

    I too have student loans as does my wife. You can choose to pay them off over a longer period if you have to. Plus you choose how much to borrow. College shouldn't be free otherwise we'd all have PHDs in basketball.

    You could have chosen a public school. You also could have chosen to go part time while working to cut down on the debt.

    April 1, 2009 at 11:47 am |
  39. PBR, Indiana

    Even when you do make enough money to pay back your student loans the loan companies make it terribly complicated just to pay on the principal. They make convoluted rules and processes, making you jump through hoops just to pay down the principal. Normally I am not interested in government oversite but these predatory companies make a fortune off us and nothing is ever written about it. Thank you for taking the time to make light of this important issue

    April 1, 2009 at 11:47 am |
  40. Barbara, Upstate NY

    I'm currently helping my daughter pay off one of her student loans – one that I co-signed for. I wish I could afford to help more. The college financial rep who arranged the loans advised my daughter that there would be nothing to pay until she graduated. What wasn't mentioned is that interest was being accumulated all during her four years of school. Even now that she's graduated, the interest continues to accumulate each month on the unpaid balance. This is true of all her loans. What a racket. She now works for a non-profit, doing work that most of us would never choose to do, and is definitely underpaid. She did not go to a private school, but the state schools in NY can easily run $15,000/year for tuitition, room and board and fees.

    April 1, 2009 at 11:46 am |
  41. EB

    What we need are debtors' prisons. For Bankers and people who take out loans they can't afford. Why should bad behavior be rewarded with cheap loans. If I commit a crime, I can't use the excuse that I didn't know what I was getting into. So why should people with student loans be rewarded for making bad decisions. If people stopped paying too much with student loans market forces would decrease the cost of schooling.

    April 1, 2009 at 11:46 am |
  42. Don Stone

    Student loans are no longer dischargeable in any chapter of bankruptcy unless you can prove that repaying the loan creates an undue hardship on you or your family. Prior law allowed their discharge once they had been in pay status for 7 years. The law changed in the fall of 1998.

    Proving hardship usually requires showing that you can't provide a minimum standard of living for yourself and your dependents if you have to repay the loan. Some courts will discharge part of the loan on a showing that repaying it all would be a hardship.

    Student loans are sometimes unenforceable due to school closures, fraud, etc. Chapter 13 can provide a way to cure defaults on student loans, or to pay them off over the course of the plan.

    April 1, 2009 at 11:46 am |
  43. Jen

    Well everyone keeps saying you chose to borrow that money, so it's your fault. The reality is that people can buy a home or a car at lower rates. How fair is that? The government is making a profit on student loans, it just does not seem right. I have been paying on my loans for quite some time now. I have paid over $12,000.00 in interest and still owe more than what I borrowed. The interest rates need to be lowered, period. The high interest rates are making it so that even if you graduate and get a decent job, you will be saddled with a huge debt, that you will probably carry to your grave. I really hope that the current administration takes a look at this, and realizes just what is going on, and takes action to change it.

    April 1, 2009 at 11:46 am |
  44. Brett

    Student loans have been a low risk deal. Get into debt, but get a better job and pay them off. No one, let alone young students could have foreseen the greater risk that this path would become.

    And unlike the banks and the mortgage defaulters, students are not responsible for the collapse of the economy but are now stuck with a cruddy job market.

    I do not favor bailing out students, but we should provide them with favorable SHORT TERM repayment options before we have thousands of unemployed students defaulting on their loans.

    April 1, 2009 at 11:45 am |
  45. Donnie

    I joined the Army after high school because I didn't want my parents to pay. I got the College fund and the GI Bill. For $1200, I rec'd over $24k while going to school. I also joined the co-op program while in school. I still had about $30k in loans to pay and they were quite a handfull...but I didn't get the new car and new house right after graduation. I paid off the loans and the other things came after.

    April 1, 2009 at 11:45 am |
  46. Taylor Elliott

    As a current college student, attending a small private school, this sort of news freaks me out! While I'm not going to be in anywhere near as deep as most of the people posting here (somewhere around $16000-$20000, depending on scholarships and what my mother can afford to help me out with) but I'm already cringing at the prospect of having to pay off those loans. I'm already taking two jobs this summer, just in an attempt to keep it down.

    That said, I do not regret my school choice. I'm getting an infinitely better opportunity here than I feel I would have gotten elsewhere.

    All I can say to any high school students reading this is to plan WAY ahead, apply early to all of your schools, and apply for every scholarship you can find.

    April 1, 2009 at 11:45 am |
  47. Dan, Arlington VA

    Not much sympathy here, folks. I earned scholarships, got into an Ivy League school, and chose to go to a state school instead, because I didn't want the debt. Because I wanted to live on campus, I decided to work as a Resident Assistant to earn my room and board. I left school with only a small loan that was paid off within two years. People need to be realistic about their ability to pay things back. If you want to be a teach or work for a non-profit, PLEASE take the community college path. Young people in America have a sense of entitlement like no other. I don't disagree that the system is broken and that colleges and universities shouldn't cost so much, but you had the free will to choose how much debt to take on. And as for offering solutions...better financial education in middle and high school. People need to understand debt, credit, banking, investing, and retirement before they are deep in the depths of any of the above.

    April 1, 2009 at 11:44 am |
  48. Peter

    Sorry Samantha – I don't feel your pain – too busy with my own.

    While I like the suggestions you've given, as others have said, you made an informed choice. It's your obligation, you accepted it up front, now it's time to accept your responsibility.

    It seems so easy lately that so many are saying "poor me – made a bad decision – someone bail me out". Some of us who've made a bad financial decision have also decided to live with the decision rather than stick our neighbors with our problem. By neighbors, I'm talking about the fact it they and their children (tax payers) who you're asking to help you out.

    April 1, 2009 at 11:44 am |
  49. Rob

    I started college at 25 after being out in the real world for a while. I took a job I disliked, but my employer (a finacial firm) paid for most of my undergrad and masters degrees. Y'all should stop whining – there is risk in everything you do – no one owes you anything in this world – get in touch with real life.

    April 1, 2009 at 11:44 am |
  50. Rob

    I have no sympathy for those who accumulate excessive student debt. My daughter and I didn't agree on college choices. I put my foot down and told her she could go where I could afford to pay. I told her she didn't have to recognize it at 17 but the day would come when she would understand and in the meantime she'd have to trust me. She went to a state university and graduated without debt.

    My position on student aide is the same as a car, house or credit cards. Live within your means and barrow no more than you must. You'll sleep better.

    April 1, 2009 at 11:43 am |
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