.
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. Megan_H

    I am in the same sort of situation. I attened a private college where I completed my my BA and MA in 4 years. My parents made too much money for me to receive a significant amount of financial aid, so my only option was to turn to student loans. Now, I am sitting on over $100,000 in debt and no way to pay for it. My first payment was due in Janurary and it almost wiped out my bank account. The government should help with Student Loans the way they are trying to help with Mortgage Foreclosures...but I believe that any solution is a long time off.

    April 1, 2009 at 12:15 pm |
  2. David

    Seems like you paid waaaay too much money for the education for what you are doing now. If you had paid that much to be a lawyer or a doctor, then your starting salary would have been higher and you could have paid the debt off quicker. You would have been better off going to a state school and saving yourself the misery and bondage of so much debt. I think that Americans are screwed up in their notions of finance, especially young people. If they only knew how hard it is, even without debt, to hold a job, have a family and save for the future, they might think twice about going to a school for prestige on student loans.

    April 1, 2009 at 12:15 pm |
  3. Tom Paine

    What happened to a little common sense? I would have LOVED to have gone to an expensive private school, but came from a modest middle class family. Instead I went to State College, had a part time job and modest student loans that were paid off within five years. I feel no pitty for her or anyone like her.

    April 1, 2009 at 12:15 pm |
  4. Joseph Ford

    I agree with you Samantha something needs to be done but I'm not sure if what Rev Jesse Jackson is stating is the answer. There needs to be changes in interest rates, amt of years to pay back loans and the start date for paying back on a loan. Maybe for individuals that attend in-state colleges and actually graduate with a degree only have to pay back a certain %. This could be a stimulus.

    April 1, 2009 at 12:15 pm |
  5. Jan in Atlanta

    This article left me feeling very hopeless. My three children-one out of college, one currently in college, and one starting next fall-made their college decisions based on (1) the costs of the colleges they were interested in, (2) the amount of need-based and merit-based aid available to them, and (3) what they could expect to earn after graduation. If the writer had done that, she wouldn't have made the choices that she made. Having made unwise choices, she now seems to think that I and my children, who made wise choices, should pay for her education. That kind of thinking will destroy this country.

    April 1, 2009 at 12:15 pm |
  6. Linda

    I think some of the people leaving comments are not really informed about what goes on with the student loans. Wonder how you would feel if in 1973 and 1974 for two years of college you borrowed 3000.00 for college (also attending a hometown school) here we are 30 something years latter having paid back almost 15000.00 and being told that I still owe another 17000.00, and that is with paying every month regular as clockwork. My debt just keeps going up. Or how about the Vietnam Vet who went and interrupted his education to fight for his country, coming back wounded with no legs on disability and the lenders took his disability checks. There is an organization trying to get justice for student loan borrowers, Studentloanjustice.org – check it out it gives quite a bit of information.

    April 1, 2009 at 12:14 pm |
  7. Les Vaughn

    The key problem to the student loan problem is - THEY CHANGED THE RULES in the middle the game - Not biting off more than you can chew or accept is not the problem or being responsible.

    What was expected and agreed to at the beginning of a 4 year or 8 year college stint is not what was waiting for those students when they graduated.... So, consolidations, low loan interest rates, etc are just not available any more, so sorry.

    So SORRY STACIE that you have an all-electric home but electricity in your town just tripled in cost - guess you should have anticipated that happening and used solar power 10 years ago....

    April 1, 2009 at 12:14 pm |
  8. Angie

    Bravo, for this! We need to get some attention on this matter. Non-Federal, Private Loans do not have the same benefits as Federal Loans. They cannot be consolidated, offer little or no forbearance or deferment options, and cannot be discharged in the event of disability or even DEATH like Federal Loans cans, making your family and children responsible in years to come. Why is it that these lenders like Sallie Mae and AES were able to just hand out Private Loans like candy? They are credit based loans and how did they determine that someone getting a liberal arts graduate degree like myself could ever pay off $200,000 in loans after graduation? This is bigger than the mortgage crisis, as these lenders were just qualifying anyone for these so-called educational loans because they slipped some shady language into the 2005 Bankruptcy Reform Bill making it appear that these Private Loans are the SAME as Fedeal Loans, and non-dischargable in bankruptcy. For myself, a single mom of 2 kids, unemployed and on the verge of bankruptcy, my private student loan lenders refuse to work with me. I cannot get a forbearance and cannot afford the $1900/mo payments on these loans anymore. What am I to do? I can let the bank forclose on my home if I can't make the payment anymore, and get a so-called "clean start" through bankruptcy, but because of my outrageous private student loans, I cannot. I am stuck for the rest of my life. Within the last 3 years the capalized interest on my Sallie Mae loans was $26,000 (Original loan amt was $54,000 and I now owe over $80,000 to Sallie Mae). My loan amount has doubled in 4 years and there is no way I will ever be able to pay off my loans in my lifetime. Right now I am inelligible for Chapter 13 because my unsecured debt due to my student loans is over $336,000 and I cannot file for ch 7 because I do not pass the means test. What are people like me to do? I realize I made some huge mistakes and should have taken out federal loans instead of private loans, but my school geared me towards these private loans before I even maxed out my federal loan option. The schools and lenders should be held accountable for this fraudulent practice.

    April 1, 2009 at 12:13 pm |
  9. Karen Raschke

    I am 62 years old and if not for my parents passing away 10 years ago and leaving me a small amount that I used to pay off my student loans I would still be paying them off. Now I have a parent's PLUS loan to try and help my son with his education (he also has student loans). I will be paying the PLUS off with my Social Security; not sure how that's going to work out for me.

    April 1, 2009 at 12:13 pm |
  10. marcus

    There is something wrong about student loan as much as our nation's healthcare plan. I think these two areas need to be managed by Government, whose role is to serve the all general public. Education and Healthcare are for everyone, and yet how could this be managed well, when some of private lenders and managed care's goal is to generate profit for very few. This is a complete contradiction.

    April 1, 2009 at 12:12 pm |
  11. Dana

    I know exactly how you feel, don't listen to these people who are saying you should have chosen a cheaper college. You only live once and I think it's great that you chose a college where you knew you would get the best education... and even better, its great that you chose a career that you are happy with.
    I made the same decisions.. went to a great college and chose a career with a low salary. I just graduated last year and I am swimming in student loans, but luckily I still have my job as a designer and I can live at home until I make a dent in my debt.

    I have no regrets about anything... i got a great education and I know i wont be amongst the many people who say they hate their job. I might not make a lot of money but I love what I'm doing.
    Good luck, I hope something is done about this soon!

    April 1, 2009 at 12:12 pm |
  12. Greg Simeroth

    What happened to being acoountable for our own actions. Simple high school math could have informed you that you would be in this situation. If college costs $ 200,000 and the only job available after graduating means you will earn $30,000. Then guess what...you won't be able to afford it. No one else put you in this situation, no one else should get you out. Pay your debt.

    April 1, 2009 at 12:12 pm |
  13. Derek

    I think lenders need to sit down and talk with every person thinking about getting student loans, even if it is more like a lecture and not one-on-one.

    I don't think there was much explanation when I signed up for student loans about what I can expect to pay after, available options, etc. If there was, I probably would have considered (if not, gone to) a state school.

    April 1, 2009 at 12:12 pm |
  14. Becky

    For those who say "She chose to go to private school, it's her own fault!," I respectfully disagree. I acknowledge that the cost of the education was something she knew ahead of time, but the financial aid staff at most schools sell you a pipe dream about how much money is available through scholarships and grants. I've attended both public and private colleges and have federal and private loans to pay back my time at both schools. I've also worked a near full-time job through both degrees, although at times it was nearly impossible to perform well in a full course load of engineering classes and work in a job with enough flexibilty and pay to make the sacrifice worth it. Either way, working was not enough to live and pay for school so I was forced to take out loans. State schools, especially in the Northeast, are not as cheap as you think they are. I've actually moved to TX to attend a state school, because their out-of-state tuition is cheaper than if I went to the state college down the road from my parents' house. This is not a problem of people choosing to go to expensive private schools irregardless of the cost. People who attended state schools are in just as much trouble.

    Also, something to be considered is the cost of advanced degrees and doctorates. These people, myself included, are putting the cost of their education as a smaller priority compared to the knowledge they'd gain through education. Before the same people start up again about how these academics are whiners who didn't think through their responsibilities, take a minute and think about something. Who is the doctor that treats you in the ER or the specialists' office? Who is the vet who takes care of your dog when it gets hit by a car or the cow whose ribs you are planning on grilling tonight? Who is the one who designed the blood pressure medications or the car safety system that keeps you alive every day? People with advanced degrees, whose lives will be crippled by debt in order to work and advance the knowledge that keeps us going.

    Face it, this is a problem that is off the politician's radar because it is an individual sacrifice that burdens millions of families. It is not a corporation or bank, so it is not worth their time.

    April 1, 2009 at 12:12 pm |
  15. yvonne

    I disagree with Stacey. We should have the right to choose where we want to attend school and not feel the wrath of overwhelming debt. In a country where kids are told they can be anything they want to be, we forget to mention the high cost that comes along with it.
    I, myself, attended a community college then a state college. I racked up 45,000 in student loans while getting my bachelors degree and I am currently unemployed. My dream of attending law school was put on hold when I realized I would end up with over 150,000 in student loans. I figured I could work off my first loan before I added to my final loan. Only, I couldn’t get work ANYWHERE. I put out over 200 resumes in 4 months, I walked into every business that was hiring, and then I realized my goal of getting a job as a receptionist in a law firm was shot down. After the realization everybody wanted experience (something I sacrificed while attending school) I chose to work at Big Lots, for 9.75 an hour. How would I pay my living expenses, let alone my student loans with 9.75 an hour? Did I mention I was a single parent?
    So Stacey, even if Samantha had taken your advice and gone to Public College at what point does it make a difference? Paying back 45,000 for me is like paying back 100,000 for her. We need to take a deeper look into this issue. There seems to be no simple solution, however, if our government is willing to spend money on the housing, automotive, and financial market, (markets that HIRE and PAY BONUS’S to executives who maintain and gain-or lose profits for their company.) then why cant the students get their cut? Funny, seems like every other democratic country is able to offer such finances to their citizens. Much like healthcare, we need to look to other countries to find out how they are able to offer such luxuries to their people. Its time to realize America is not the best at everything, put our pride to the side, and ask Europe for some serious advice.

    April 1, 2009 at 12:12 pm |
  16. Smdmgs

    Thank You! I defaulted on my loan 2-3 years out of school. When I was told by the Ford Foundation helped me consolidate and told me I had grounds for a lawsuit because my original lender was not forthright with me regarding payment options. I was 25, working two jobs and overwhelmed. I didn't pursue the lawsuit.
    I filed the papers for the ICR two days too late. The Government fined me $7,000 for defaulting.

    April 1, 2009 at 12:11 pm |
  17. John

    I don't know if I can sympathize with you. I do have almost half the amount of student loans that you have. Although my payments are not $1,200 a month, I still have a significant payment. Those automatic payments coming out of my paycheck every month could go somewhere else; my savings account or IRA for instance. However, I made the choice to get a higher education. It's the price you have to pay these days to have a better resume and more doors open to you. But I don't expect the government to do anything about it. Maybe I do have one reason to have sympathy for you and that I feel it is unfair that you cannot consolidate your student loans. It would dramatically decrease your monthly payment.

    April 1, 2009 at 12:11 pm |
  18. Jeannette

    BRAVO! This is a crisis that needs addressing. Everyone's circumstances are different yet the end result is the same. As a single mother of four children I decided to return to school for my BA and did some graduate school and have almost 40K in debt. My monthly payment is set at $290 a month with only $90 going to the principal! IT'S OUTRAGEOUS!!! I can't afford to pay more monthly because two of my children are now in college. My decision to return to school was economically motivated. So now I have a college degree and instead of making $7/hr I'm now making $42K a year. It's a drop in the bucket compared to the salary of all those being bailed out with OUR TAX DOLLARS!!! We need relief. I feel that we should be held accountable for our debt but the interest rate should be lowered to anywhere between 1-3% and not a point over!

    April 1, 2009 at 12:11 pm |
  19. Jamarcus

    This is a very important topic, which is needing attention. Thank you very much.

    April 1, 2009 at 12:11 pm |
  20. jp

    the real thing people should be mad about is the cost of college these days. There is no reason college should be going up about 10%-20% more than cost of living per year. The main state college here is Mizzou and it is almost $20,000 A YEAR in state. That means that a kid has about $80,000 or more in debt going to a state university. Something needs to change!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    April 1, 2009 at 12:11 pm |
  21. Nancy, San Diego

    I paid off my entire student loan and it was at 9%. Even at age 19 I knew I couldn't afford to go to a private school and take out over $100,000 in loans.

    Several times I had to ask for deferments when I was unemployed and they were granted, but other than that I bit the bullet and paid it back instead of buying expensive clothes, meals or vacations.

    I now have a child who will be going to college next year and because we are middle class she won't get a huge amount of grants or needs based scholarships. This will limit her choices as to where she goes to school. If she chooses to take out massive student loans for undergraduate studies, we will counsel her about what that means for her future.

    Good luck to you, welcome to the real world.

    April 1, 2009 at 12:10 pm |
  22. Jessica

    I'm a single mom to a one year old and a graduate student. I have $60,000 in student loans. The only way I could've gone to college was to take these loans. I didn't like the idea of being in debt, but I thought I'd get a job after graduation and everything would work out. I graduate this December and I am scared to death that I won't be able to find a job to support my daughter after graduation. I don't support bailouts, but something needs to be done to keep education within reach. A lower interest rate on federal loans is a good start.

    April 1, 2009 at 12:10 pm |
  23. blavigne4

    Stacie

    Do you think most 18 year old prospective students are really in a position where they understand the consequences of taking on that much debt and the variable interest rates/compound interest that applies? Not everyone is fortunate to have a mother father so well versed in Finances to protect their children

    April 1, 2009 at 12:10 pm |
  24. MikQuick

    Wow Stacie – you must have skipped the C section in the dictionary when you went to the community college you saved up for – that's where the word "compassion" is listed and went straight on to the D section which is where "disdain" is listed and read it twice. Let me take a guess – you're white, military/religeous upbringing...maybe catholic? Oh yeah, lets not forget – you're also republican right? If we can spend billions keeping rich, fat, white, drunk, republican, bankers and brokers afloat becasue they have similar friends in powerful positions or political connections while we spend, who knows how much, to fight a war against a country that did not attack us – I think we should consider what we are saddling our future generations with as far as student loans...along with the deficit GW left for them.

    April 1, 2009 at 12:10 pm |
  25. tatabox

    Interest rates aren't the problem. I consolidated my loans when interest rates were very low, and I still have almost $100,000 left to pay almost 5 years after graduating. The problem is tuition. When I was in undergrad, the university started a campaign to raise over a trillion dollars for the endowment fund. They did it, and yet tuition continues to go up every year, costing over $30,000 a year today. That's before room and board, books, etc. So much emphasis is placed on going to a top tier school, and they're essentially gouging their students because they know people are desperate to go there. It's even worse when you go to graduate school, as there are less scholarship and grant opportunities available. Something needs to be done to curb tuition rates and increase non-loan financing for graduate students.

    April 1, 2009 at 12:10 pm |
  26. Ryan

    Yes; it does. You made the choice to go to a private school and enter a low paying career field. You still have the choice to change careers or pick up new skills, or continue in your current career and remain in debt the rest of your life. Unfortunately, the choices you make when you are 18-25 DO count; and what you do at this age sticks with you the rest of your life (ask anyone who had a kid at that age.) You don't get a do-over, and it's not too late for you to make some changes in your life that will help the situation. Might this mean working a job outside of your dream career field? Yeah, but that's the case for a lot of people. I'd love to be able to do a lot of things, but IT work pays the bills.

    I myself had the option of going to some very expensive private schools in the northeast, but chose a good state school (University of Texas) over some well regarded private or out of state schools (Carnegie Mellon and UC Berkeley.) I don't regret the decision in the least and I ended up paying $8,000 a year in tuition versus $30,000.

    Now I won't argue with you that the cost of education is somewhat inflated, but you have a degree from a good school and that alone is enough to get you a high paying job somewhere. You may not get to be in television but life is about making sacrifices that may not always be apparent to us.

    April 1, 2009 at 12:07 pm |
  27. Jaime

    Sam – I feel your pain!

    But what really bugs me is that no one is looking at the colleges and universities that get away with these outrageous tuition costs! I mean, how it is possible that these private colleges can charge $40,000 or more a year and continue to raise costs, and no one even thinks twice. And state schools are not exactly chump change either! Call me crazy, but what if there was a cap on how much schools can increase tuition each year? (or is there?)

    I just have my bachelors degree, and recently someone asked me if I was thinking about going back for my Masters, and as much as I would like to, I just will not allow myself to be in more debt than I already am. People say it's an investment, but an investment in what? Lifelong debt? My field doesn't pay six figures (even with a Masters).

    April 1, 2009 at 12:06 pm |
  28. lane

    School loans are a huge problem. One problem I had with mine was that the loan kept getting sold to other places and every time the loan was sold, the interest owed became part of the principle! Half the time I didn't even know WHO had my loan! And I believe there was only maybe 4 companies that kept selling my loan back and forth among themselves! Quite a racket these lenders have going, I tell you.

    April 1, 2009 at 12:06 pm |
  29. Sue

    Sam,
    Perhaps you could do better on the speaking circuit, traveling the country, speaking to current college students about the aftermath of living beyond their means and attending schools beyond their means. Many are just like you, going to school and never realizing that the time must come when you pay the piper. There is no free lunch, or free education.

    April 1, 2009 at 12:06 pm |
  30. David Dellert

    With current plan to pay for all of bailouts is to tax the rich then we better be creating a whole lot more rich. The current funding of education is insuring that we are dumbing down America everyone is working at a fast food place. It is totally unfair to leave young people with a huge national debt with out the tools to pay it off.
    We could start by allowing for full tax credit for the cost of higher education. This way we can create the needed high tax bracket people.

    April 1, 2009 at 12:06 pm |
  31. Lydia Negron

    I can understand the Hillstrom's dilemma but I can also understand the opposite view. If she chose the private school and knew how much it costs, why didn't she plan for a worse-case scenario?

    It's tough out there. There is no doubt about it.

    What I do agree with is the student loans should be affordable and financial institutions should be required to work with the client especially in this financial quagmire.

    We come back to the affordability issue. Education is not a privilege but should be a right regardless of income level. What this shows is that unless you are independently wealthy or have sufficient means, it's extremely difficult if not impossible to go to a private school if you have less than stellar grades. (not implying that Hillstrom has anything but)

    I'm just hoping our leaders know what they are doing and have themselves planned for the worse-case scenario.

    April 1, 2009 at 12:06 pm |
  32. Lindsey

    I'm sorry, but, two wrongs don't make a right. Bailing out companies who made bad choices isn't made right by bailing out students who decided to get an education they couldn't afford.

    I'm sure there are plenty of people who majored in what she majored in at colleges that didn't cost so much who now have jobs. Granted they probably don't have places at CNN...but I'm betting if they started out at a less prestigious job and worked their butts off they could eventually get a position at CNN and be debt free too. This sounds like a case of "I deserve to go to this really pricey school because I deserve a position at a high profile company". When in reality no one "deserves" anything right away.

    If you have the money for it then great, go to your expensive school and get that high profile job...more power to ya. But if you don't have the money you have to accept that you might have to work a little harder to get your dream. You might have to live with your parents a few years and save up money for school, you might have to work more hours during the school year to help pay for costs or you might just have to go to a less expensive school and work your way to your dream job.

    April 1, 2009 at 12:06 pm |
  33. Kevin

    Thank you Samantha! Well said, and needed to be said!

    April 1, 2009 at 12:06 pm |
  34. Lisa B

    I completely agree with the author. My family was/is firmly middle class, my one parent is a bank teller, the other a teacher. Yet, I qualified for almost no financial aid. Despite going to one of the cheapest Universities in the state I still left college saddled with 18,000 in debt. This is after I managed to take only the minimum loans offered to me.
    My family and I carefully saved for my education and most of it was thankfully paid for, but that 18,000 left over is still a huge amount to me as a new teacher. My state is inundated with new teachers, leading to me having to fight for a job at a low paying district. I worked 30 hours a week while I was in college to help pay for my schooling but still, there were bills that required taking out loans.
    The author should not be reprimanded for choosing to go to a private school. Teaching in a high school now, I am able to see how little information students are given on what they are getting themselves into financially. After having dealt with lenders for 7 years now, I can still barely understand the rules and regulations that go along with student loans. How can we possibly expect kids fresh out of high school to understand what they are getting into?

    April 1, 2009 at 12:06 pm |
  35. scott

    To me the real problem is the variable interest private loans. I did not want a freebee from the federal government. But anyone who wants to loan money to go to college should be able to lend it from the government at fixed interest rate, or an interest rate tied to inflation. My parents made less than 70,000 dollars combined, yet accorrding the the goverment they were supposed to pay for the vast majority of my college education. Thats a disgrace, a family making 70,000 should qualify for 100% of the cost of education in loans from the federal government. Instead I was paying 8 to 9 percent interest on the private loans I had to take out. Sallie Mae should not even exist! Nobody should be making a profit off of college education in this country as it is that education that leads to prosperity.

    I think the real problem is the weathly in this country still think it should be like the 1800's where only the weathly were able to go to college!

    April 1, 2009 at 12:06 pm |
  36. Grant

    I totally sympathize. I just graduated in December with $50,000 in debt and zero real job prospects. I have a $450 a month payment I just had to put into forebearance. This was at a state run school with a tuition discount because my father works for them. Completely ridiculous that education costs have ballooned so much, especially when the poor and middle class wages have stagnated since Regan was in office in 1980. Check out how much it costs to go to school in European countries that take care of their citizens before corporations.

    The reality is that going to a community college is simply a waste of money and greatly limits your available degree options. Employers are well aware of the difference in quality between community college and university students. Who do you think will make the better salary? The Purdue grad with the engineering degree or the Ivy Tech grad with an .... oh, wait, you can't get an engineering degree at most community colleges.

    April 1, 2009 at 12:06 pm |
  37. Sylvia Ramos

    Three Pieces of Advice
    (Help the Now) Advice 1 – Allow school loans back into the bankruptcy for folks who need to file. If not there is an unfair advantage banks have. They can take all their debts into bankruptcy and we cannot.

    (Help the future) Advice 2 – Give Freshmen REAL advice. I know it was tough for me to understand how much i would really ow. They just tell you to sign and you need to go to school so you sign. Ignorance is not an excuse but we need to educate 18 year-olds on the ramifications of the loans.

    (In the meantime) Advice 3 – Suck it up and get another job. There is nothing else to do. I have an MBA and 2 jobs. For now you have to rely on yourself and if you do make the sacrifice of paying the loans down first and fast then you will benefit in the future. Yes i have $30K in school loans but $200 a month and have refinanced a couple of times. My loans will not be paid off until I am almost ready for retirement but because of that I have NOT moved forward with a Doctorate education.

    April 1, 2009 at 12:04 pm |
  38. Derek

    In the same boat and facing the same situation here. Regardless of how myself and any others ended up like this the reality is we are in the same reality as the rest of the nation and the economy as a whole. I think there needs to be a stimulus for those seeking education and some one needs to figure out how to get this done! I can't afford a house so I won't qualify for the stimulus there but I can't get a bailout either because I only have education loans???? Does not make sense!!!

    April 1, 2009 at 12:04 pm |
  39. LindyJules

    I have been out of school for 6 years now and have made a little progress toward paying of my student loans, but since there's a forum here, I've got something to say:
    I think it's ridiculous that there is a required EXIT interview, to explain your financial responsibility before you graduate, but no preloan interview to explain what you're getting yourself into... Someone up there made a comment about how you knew what your school cost, what your loans would be, likely starting salaries, etc. This is not always true. I expected to be making $10K – $15K more when I got out of school, but the reality was much different than I had been led to believe. Also, the schools print materials in such a way that you hardly look at each amount printed – they focus on the bottom line – how much will you owe "out of pocket?" That amount was affordable to me and my family. The loans were just a line-item, at the time. When I saw the total at that exit interview, I was truly shocked. Was it my fault for not being informed... yes, it probably was, but it really feels like my school wanted me to be kept in the dark... At 18 years old, I wasn't looking for "the catch." I learned that by signing up for all those freebies from the credit card companies that advertised on the quad...

    April 1, 2009 at 12:04 pm |
  40. Anne

    My husband and I had over $200,000 for our graduate degrees. It's costing us over $1,500 a month to pay for it. And we don't begrudge it one bit. WHY? Because my husband will always have a job because of his education. Yes it's expensive. Yes I wish we didn't have to pay it. But, WE took the loans out and WE will repay them. It's no one's responsibility but ours.

    I don't buy the whole "I didn't understand the cost of the bebt" argument. We were required to go to numerous classes on the cost of education to get our loans for both of our degrees. We knew the costs associated for our education. Gratefully, after careful consideration we decided that the education my husband received would be worth the investment made.

    We joke about our loans being the equivalent of paying for a small house in the Mid West that we will never live in. So be it. I wouldn't trade our debt for the world.

    April 1, 2009 at 12:04 pm |
  41. PETE

    I was never looking for a handout to pay my student loan. I get my wages garnished over $350.00 a month for a $30.000 student loan that has about $10,000.00 in collection fees. I fell behind after our interest rate went up on our home and almost lost it to forclosure. But my wife and I saved out home but cutting back. But when that was said and done my student loan went into default.

    I tried to work with them but it was never enough and now they take $350.00 a month, there is our recession. Instead of paying for new home improvment projects or buying a new car I am paying for a student loan that never had to go to collections in the first place. I am responsible and know I need to pay it back.

    You can have kids without a father and the goverment will pay for your food and housing. You can be the father of your girlfriends children and walk away because this system will pay for your kids to get medical and food to eat. But if you try to do better for yourself and family and make a mistake you have to pay the bill and are told your stupid for making those choices.

    You can ride a motorcycle without insurance and when you get in an accident the system pays for your medical and disability for the rest or you life. So don't say that system should'nt help with the education of every hard working American who pays there taxes.

    I say Yes! to Bailout of all student loans!

    April 1, 2009 at 12:03 pm |
  42. Colby

    Anyone who acts as if, in the past fifteen, twenty years, there hasn't been a societal mandate to go to college, that every teenager is told if they even want a job–this to 16, 17 year-old kids–then they have to go to college, that there isn't a million-ton weight on kids to get into schools, no matter what the cost, all with the promise that life will be livable after you get out, is a stinking liar.

    Of course it was her choice. And she's owning up to it, she's not ducking her payments. What she's advocating is a sane, fair, rational student loan situation. I'm so sick of all these Social Darwinist types acting like an 18-year-old kid has the experience in life to understand what $100K in debt means. I think it's awesome if you have the resources–money, family, community, etc.–to get out school without debt, but for most American's that's not the case, and now these loans are killing people.

    More than anything we need to make public higher education free. It'll boost our economy and our nation in the long run, and make us again the most competitive nation on the planet. The cost can easily be offset with mandatory volunteer programs and "work study" that extends beyond the college mail room. But in the mean time, thank you Rep. Jackson for doing the right thing for American student loan holders.

    April 1, 2009 at 12:01 pm |
  43. Nicole

    I would just like to point something out to the people who are saying that it is your own fault for being in debt. When most people choose their college, they are 17 years old. I do not know very many 17 year olds with financial smarts, or the ability to see the future of the nation's economy. I graduated from a private college. However I spent my first two years at a state college. I already knew what I wanted to major in, and I chose the state college first knowing that to live on campus it was more economical than a private school. However in my field I chose, it became clear that you were not getting hired unless you had a dual certification. Unfortunately none of the state schools offered the second certification. So after 2 years I transferred to a private school but lived at home. After a Bachelors and a Masters degree I am roughly $50,000 in debt. Luckily I have a job right now that I can pay these loans back. At least for now. However I am trying to consolidate the loans from both degrees and nobody will, so I am stuck paying more than I could be right now.

    My choice to attend a private school was so that I could become dually certified, which is the only reason I have my job right now. If I had stayed at the public school I can almost guarantee I wouldn't have a job, as none of the people I know who stayed do. So what would you have suggested I do? Change my major and go into a career I wasn't passionate about? Or make myself unemployable because I lacked certifications. People want to do what makes them happy in life, and those educations aren't always offered at state schools.

    April 1, 2009 at 12:01 pm |
  44. Ken

    Why did you choose such an expensive college to go to? I do not feel sorry for you because you cannot repay your student loan. You borrowed the money and ignorance of the loan is no excuse. If student loans did not exist I bet the tuition at your fancy college would not have been so high. We have a lot of people with four year degrees that seem to be underemployed once they get out of school. Your student loan payment is as much or more than a house payment Unless you can make a six figure income I would say you are going to have to grin and bear your student loan consequences.

    April 1, 2009 at 12:01 pm |
  45. Ed Garfield

    There are numerous problems with the student loan program. First of all the process for "hardship" cases does not work. In all the years of the law being in place not one individual has received an approval for a hardship forbeyance. The main reason for that is that the Judges are paid for by the same Department of Education. The DoE would lose out if they did so. Again not one individual has ever been given leniency regarding student loans and that includes dying student loan holders. Student loans cannot be disposed in bankruptcy court although all other sorts of loans, private and government, can. The law was put in place because of the myth that students were going bankrupt on student loans at an alarming rate. The fact is the rate of student loan's disposed of bakruptcy was three times as lower than the national average for all bankruptcies in general in the seventies. The lesson, of course, is that don't ever take any money from the Federal government. Unlike a loan shark, they can actually get you fired, take your house and every penny you earn for the rest of your life. The answer is to reduce the influence of banks in this process. Some degrees are obviously not going to be able to paid off with the degrees people get. There should be no interest rate charged at all for student loans, they should be able to make a small amount for administrative billing and fees but most of their money should come from building a good relationship with strong and financially capable individuals down the road. "Guaranteed" does not mean that the bank is "Guaranteed" a return but rather the student should be "Guaranteed" able to afford to go to college. But Washington lobbyists have perverted the whole system. Repayment should based on a percentage of yearly income for a period of time, let's say ten years.

    April 1, 2009 at 12:01 pm |
  46. Alan

    Education in the US, is encouraged, but at what cost? College is almost expected for all high school students, but the tuition is extremely high at some universities. Loans when provided, are usually at high interest rates, and are expected to be paid off soon after the student graduates.
    What really annoys me, is the US is more interested in college for illegal aliens, then our own citizens. There is a representative out in either Illinois, or Indiana, that put a bill up for vote, to give illegal aliens free college education. Are you kidding me! Luckily, he was voted down.
    Our great governor of New Jersey is proposing that the illegal aliens be allowed to go to college, and drive a car. Why is the governor so interested in illegal aliens, when our children are struggling to pay for college?
    This country has a weird fixation for helping anyone that is not a citizen, or outside the country.

    April 1, 2009 at 12:01 pm |
  47. Jess, Riverside CA

    I totally understand your situation as I have been through same thing, I go to private college too and first two years i spend in private college it was not even accreditted meaning other colleges won't even consider me continuing from there I had to start from scratch in state school or community college, in that case I ended up going to another private university which took my credits and i got stuck with more student loans.

    April 1, 2009 at 12:01 pm |
  48. Dana

    I am in the same position as Samantha. I chose to go to a private Christian university, went back for my Masters degree, and now I'm a teacher. I have a very large amount of student loan debt hanging over my head, and it's hard to make ends meet each month in my chosen career. I understand the frustrations of those who chose to go to a public school and worked hard to be debt-free. I am fully prepared to pay off my debt like a big girl, no matter how long it takes. However, your stories don't help those of us who have already made our decisions and are stuck with them. I, like Samantha, was uneducated about the financial burden that came with a college education. I took out loans as needed because even with scholarships and a part-time job, I couldn't come close to paying my way alone. I do not in any way regret my choice of college or my very rewarding yet low-paying career, but I do wish I had been given some better advice regarding my finances when I was first getting started. I don't expect the government to bail me out of my student debt, but I am interested to see how they will make some positive changes in the way student loans are handled in our country. Good luck to everyone! As depressing at it is to be in debt, it's nice to know that I am not alone!

    April 1, 2009 at 12:01 pm |
  49. Victoria

    I agree, student loans should be dischargeable in Bankruptcy Court. This law is from the Bush administration and the Republicans – they are responsible for doing that. It used to be that you could discharge them and this needs to be reinstated and soon.

    In the Scandinavian countries, college is paid for. A student can choose the career of their dreams and not have to worry about re-paying thousands and thousands of dollars after graduation, all while starting a career, possibly a family and trying to live a good life. America does not treat its citizens well at all.

    April 1, 2009 at 12:01 pm |
  50. Vanessa

    President Obama had many students working on his campaign. My son was one of them. Believe me, Obama is very aware of the student loan crisis, and is committed to improving it. Remember, Congress passes the bills so we have to get Republicans and Democrats to be on board.

    Also, for those who blame the students for getting into debt, this issue is not their fault. When I went to college, I got federal loans at low interest, and the tuition at the private college I went to was 1/15 of what it is twenty-five years later. Most students have to get private loans, which are much less fair and forgiving...that is, IF they can even qualify.

    This crisis is upon us because private lenders took over the student loan business, and charged much higher interest. Also, there were deals struck with universities and lenders which allowed "incentives" for having loans approved for students.

    The real question becomes, why is it so incredibly expensive to go to college?

    April 1, 2009 at 12:01 pm |
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