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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. Ben

    @Stacie and others –

    Personal responsibility is the salient component of this argument, but it is mitigated somewhat by that fact that loan advising was often given out with dollops of reassurance that refinancing was a given, which it was. That is no longer the case, and the issue must be addressed.

    America cannot continue to eat its young.

    April 1, 2009 at 12:29 pm |
  2. Victoria

    Some reviewers are right– we, students, choose the loans. HOWEVER– as I am about to enter graduate school, I just found out that the FEDERAL student loan rate is over 6%. Excuse me??? Federal? Honestly, in order to support education and professional development, I seriously think we should cap student loans, and the feds should be perfectly happy with a 2 or 3% interest rate. think about it– 2 or 3% on about $24,000/year of a 3 year grad program, paid over 12-30 years... not bad. The govt still wins. Please, please, please– seriously look at student loan rates. Without loans, many of us couldn't even think about an education. I had scholarships from good grades, but the FAFSA determined my parents should pay 20% of their earnings toward my schooling– that's bull. So, loans it is. hopefully, educational loans will drop their interest rates. An interest rate is an interest rate– it's a win-win for everyone.

    April 1, 2009 at 12:28 pm |
  3. Anna Mulla

    My daughter and son-in-law are paying combined student loans of about $350 a month, they both went to state schools, paid part of their education from jobs, and the other part moms and dads. They were fiscally responsible but they still have a "car-loan" type payment each month. Even if you do it right, you can still get stuck, and the lengthy drawn out repayment schedule means this financial albatross will be around their necks for a while. They are fortunate right now, they both have jobs, a home, etc. I simply dont understand how young adults are carrying these large financial burdens, they are being penalized for wating the American dream.

    April 1, 2009 at 12:28 pm |
  4. Candice

    I also have $100,000 in student loans. I am a high school science teacher and even the pay I get qualifies me to defer payment under economic hardship. I appreciate that I have a job but my job requires me to go back to school but I have to pay for it. I'm okay with this, but I can't afford to pay up front, so loans it is. I have no problem with paying off my loans, but a little help would be awesome! Honestly, I figure I'll be in my 60's when it's paid off, so if the government is throwing some bail out money to the banks, how about some for the student loans so I can afford to buy material objects that keep our country afloat.

    April 1, 2009 at 12:28 pm |
  5. Anne

    When I went to school in the late 60's and 70's, it was affordable. As a single parent of three boys, and with zero help from the Air Force pilot ex-husband, I was so worried about what I would do to put my sons thought college to have a better life in the future. Well, we took out a lot of loans and I worked three jobs and they worked while going to college. It still was tough! Two of my sons ended up joining the military and one of them just came back from combat in Iraq after two tours. He is lucky to now have the GI Bill to help him finish school. My oldest son, has over $150,000 in loans and is working very hard to pay it off. It's the time period that is a killer. YES, change the time period to pay it back like a 30 year fixed mortgage! OR something other than making these young people feel like they will never get out of the money pit...... Here is our future struggling to survive in this crazy economy! AND NOW they expect our future generations to pay off these trillions of dollars worth of DEBT? UMMMMM is any one in Washington D.C. listening??????? How do a car corporations and AIG trump our kids?

    April 1, 2009 at 12:27 pm |
  6. Betty

    I owe over $50,000 in student loans, and the monthly cost is huge. I am over 60 years old and I can't retire because the money for my student loan payments will come out of my social security benefits. Education is very important, and it helped me get a better job, but not one that pays for the cost of getting the education.

    We do need some help for those of us who have tried to make a better life for ourselves, but the cost of doing so is tremendous, and the interest rates are horrible.

    April 1, 2009 at 12:27 pm |
  7. Southerner

    The bottom line is: Don't borrow money you cannot repay. I passed over several colleges and went to an in-state public university, because it was significantly cheaper. Borrowing $100k for an undergraduate degree is a bad idea, however you look at it. I have no idea how you thought you would be able to pay off the loans when you took them.

    April 1, 2009 at 12:27 pm |
  8. A Mom

    Not only are students struggling to pay loans, so are parents. I have a bright, gifted 4.0 son in professional school (pharmacy) and not only are his loans, huge, so are mine. I just know Sallie Mae will be sitting at the foot of at my nursing home bed to collect college loan payments. The government is bailing out the big boys who walked away with more dollars than many parents might earn in a lifetime, yet the same parents have no choices but to borrow monies for their talented children to go to school. If we do not invest in our best and our brightest, there is no tomorrow for our nation. Why are we not offering more to successful college students? Will these folks save, buy houses, and such if they cannot even make student loan payments? No! We are bailing out homeowners who made bad choices in many cases, yet our young people are making all the right choices to train and grow, yet they have to borrow. Mr. Obama and Congress, are you listening? Put dollars where growth can and will occur, not down a sink holes, already proven to be bottomless.

    April 1, 2009 at 12:27 pm |
  9. Trenton

    I didnt go to a fancy college to start, I did go to community college and I paid for it out of my pocket. But in order to get my bachelor degree I had to transfer to a university. I tried working my way through school but it just got too hard. Not to mention getting married and having my first child while going to school, work was just not going to happen. Now 4 years after graduation I still owe almost as much as i borrowed, i work 2 jobs and still cant make any headway. I havent over-extended myself in anyway, but with my school loans and my wife's on top of house and car payments, leaves little left behind. My wife and I both graduated into the medical field to help people, and we both love our jobs, but work is not always guaranteed in the health field depending on the season. So I can completely see how and why people can not pay back their loans. My family and I can definately share the pain with anyone who graduated college tried to start your life and only gets stopped by the ever falling economy.

    April 1, 2009 at 12:27 pm |
  10. Nomadman

    So, what is the next step on this? What is our action plan?

    Who do we need to write a letter or an email to? Can someone provide some information other than Reducetherate.org?

    I agree that we need to take a stand on this. Why stop with this article?

    April 1, 2009 at 12:27 pm |
  11. Brandon

    If you want to go to an expensive school, then you need to have a career prospect that will grant you the ability to pay off your loans in a responsible manner. We should be encouraging smart students like Samantha to enter fields that are not only lucrative, but also directly add to our country's sovereignty. Our country has far too many investment bankers and liberal artists and not nearly enough scientists and engineers. There are many excellent programs at public universities in these fields that will grant starting salaries from 55-80 K with only a 4-year Bachelor's degree.

    April 1, 2009 at 12:27 pm |
  12. Jessica warren

    I find it appalling how many of these comments on this board come off as unsympathetic to Samantha's ) situation which mirrors thousands of others in our country. To focus on 'irresponsibility' of taking out the loans to get an education and to blame her and others for wanting an education illuminates the fact that 1.) education in our country is simply too expensive, making it accessible only to wealthy families, 2.) the US has accepted a view that its people should forego an education because of the high financial burden...well, take a look around the globe and you will see the US being surpassed by other countries who take their education seriously as it is a fundamental ingredient to our competitiveness in this global economy. Our government owes it to us to ensure that education is affordable. Our government owes people like Samantha and myself (sitting on about $100,000 in debt and working in mental health which barely pays $40,000/yr for the first few years in the field) to assist not just with paying off some of the loans, but forgiving a portion of them in the first place because our government should have never allowed education to cost what it does. I am 35 and will likely never even own a house. And this is MY fault? Because I wanted a MA degree and my family couldn't afford to send me to school? Hmm.

    April 1, 2009 at 12:24 pm |
  13. Kelly

    Hi Samantha,
    I can definitely sympathize with you. At one point, my student loan payments were one and a half times the price of my rent. Believe me, lab technicians in universities do not rake in the big bucks, so I was working an additional part time job for awhile to keep making my payments.

    I have to say that I think it is unfair for people to think the expensive private universities should only be saved for those wanting to become doctors, lawyers, etc. I actually wound up going to an out-of-state private university because they were willing and able to cover a larger percentage of the tuition than the state schools I applied to. If I'd gone to one of those state schools, my loans would be even worse. It really just depends on how much a school has to dedicate toward financial aid, not necessarily on whether they are 'public' or 'private.'

    I think the real problems are 1) higher education in general is just too expensive and 2) college-bound students, particularly first generation college students like myself, are just not made fully aware of the risks of taking out loans, especially private loans which tend to be less forgiving. If I'd known then what I know now about private loans, I would have worked twice as hard to get private scholarships.

    Samantha, I say keep your head up. Make cut backs wherever you can, and try to keep informed about changes your financial institution makes that may allow you to renegotiate your payments.

    April 1, 2009 at 12:24 pm |
  14. Aaron in Oregon

    This nightmare is all to true for me as well. I took on $45,000 in federal loans from undergrad, which I consolidated luckily before the downturn. Then I decided to invest in my future and go on to graduate school, cause hey a Master's is worth more in the real world right? Yeah, don't bet on it. Now I'm $83,000 in debt, and the newer loans I can't consolidate and have to put into forbearance. I've been looking for a job since December, but have only gotten 1 stinking interview that didn't pan out. Here's the reality for recent grads in this job market:
    a) We are too underqualified for the serious jobs that we earned our degree's in.
    b) The applicant pool out there for these jobs are so full that companies hiring for entry level jobs can get guys with 20+ years experience for entry-level pay, and WE don't even get the time of day!
    c) Think we can just go out and get basic low-wage, low-skilled jobs....Yeah right. If they find out how over-qualified you are, which they most often will (unless you lie about your education), they just toss your application aside like all the rest.

    In the end, recent college grads like me who can't find a job only have one thing to look forward to, and end to all this chaos, and all the jobs coming back. But I'm not a dreamer, I know even under the best of circumstances that's won't be for at least a year, maybe several.

    April 1, 2009 at 12:24 pm |
  15. Kyle

    I'm 50k deep in student loan debt, 1/2 from my first year at school, 1/2 from the next 3 years due to scholarships and grants. I chose a public school and worked hard for good grades in a major that gets jobs after graduation. It’s because of the choices that I made that my debt will be paid off in 3 years after graduation. This is an issue of personal responsibility. Samantha, I hate to say it but your choices put you where you are and you should be the one left to deal with it, not the government or tax payers.

    April 1, 2009 at 12:24 pm |
  16. Lizanne S.

    Why is it that only student loans are not subject to bankruptcy? I returned to school in my 40s while raising five kids and being without job skills. Now I have a degree (with honors...see how many bills THAT pays), $48,000 in student debt and can not find a job. The irony is that I have applied for 11 jobs at the very college that issued my degree and am not qualified, evidently, for even an entry level position. I look around and see many other women who returned to school in good faith, trying to become "productive" members of society only to find that many degrees are worthless in the very best of job markets (which this is not) but the debt will follow you forever. Is it sad that the advertised 'way out of poverty' (a degree), can trap you in poverty through student loans?

    April 1, 2009 at 12:24 pm |
  17. Bo Zho

    For those who tell Sam "don't go to a college you cannot afford out of pocket", realize that if everyone followed that advice, we would be (even more of) a nation of haves and have-nots, where kids with wealthy parents enjoy first class educations, careers, and privledges, kids with middle class parents attend state schools and live lives much like their parents' lives, and kids with poor parents cannot attend college at all, and have few options. Not only is this obviously contrary to American ideals about opportunity, it is contrary to our national self interest. If Americans cannot afford to choose an educational and career path based on their abilities, and our national need,s we will waste talent and have an unbalenced workforce.

    And on another note, it is foolish to criticize the choice that students such as Sam made as "immature" or "irresponsible", since the choice of what college to attend is typically made by 17 year old kids who have never lived alone or balanced a checkbook or had any experiences that would prepare them for the magnitude of the decision that they are required to make. It is apparent that there are serious deficiencies with the structure of higher education in the U.S., but putting all the blame on teenagers who have naively bought in to the mantra that they've been fed their whole lives – "Get a good education – Get a good job – Live a good life", is missing the point.

    April 1, 2009 at 12:23 pm |
  18. Chris

    I am in your same situation and wrote a letter about it myself. In the 13 years since law school I went from a $70,000 loan to a $170,000 loan. This was due to some unforeseen circumstances that let the interest pile up. It's a shame that banks and car companies get bailouts for their misdeeds but people like us can't get bailed out..and we are the ones that would put the new found freedom to use by spending and helping the economy.

    April 1, 2009 at 12:23 pm |
  19. Paul

    this is so frustrating...
    I am one of those that went to state school and worked my way through. No loans, just elbow grease.
    One of the most important lessons here, live within your means.
    If you're out of money, take a semester off and work 2 jobs... save your money.
    unless your in a very specific, guaranteed salary job, (lately only the super skilled tech field), a loan these days isn't a great idea.

    with interest and whatnot, you wind up paying double what you borrowed.

    April 1, 2009 at 12:23 pm |
  20. Matt

    The only people here that are saying they feel no sympathy, are those who do not have a lot debt and do not know how it feels. I owe 50,000, and I did start in a community college and did 2 years at a private school. If the government can keep pumping money into the auto industry and AIG, why cant they give money to students who are the future? I chose to go to a private school because I could not get into the finance program at our state school with a 3.6 gpa, tell me how much that makes sense. In my opinion if we care about the wealth and future of our nation college should be free, we have paid enough tax dollars for the war in Iraq alone. I guess you could say i am disappointed American.

    April 1, 2009 at 12:23 pm |
  21. Christopher

    Sorry dear but students MUST weigh the cost of an education and future earnings when it comes to choosing a school and major.
    There are no free lunches in life unless you work on Wall Street.

    April 1, 2009 at 12:23 pm |
  22. Michael

    OK -i have student loans also – $1000/mth (for 25 yrs) and am lucky to have a good job. However....

    I read and understood what i was getting myself in for when i took out the loans – WE ALL MAKE CHOICES, and MUST ABIDE BY THE CONSEQUENCES. Deal with it. Many Americans have this sense of no consequences and refuse to take the blame for their own actions. If you didnt understand all the ramifications of the loans, DONT sign them. There are plenty of 3rd party sources for information.

    While i admit some interest relief would be nice (and private loans are the worst), a bailout isnt the answer. Come on people – we (and our kids, grandkids and great grandkids) are going to be paying for the current bailout.

    April 1, 2009 at 12:23 pm |
  23. Gary

    I agree wholeheartedly with Samantha–by the time I finish my master's degree next year I will be about $70K in debt, and those are tuition fees from public universities. I am getting a degree in library sciences which means that as a librarian I'll be making about $40K a year at an entry level position, if I'm lucky. Yeah, I chose this career path and yeah, I took on the debt–but I'm getting the message from some of you posters that because I made these choices to better myself I should justifiably be financially punished for it. I can understand why some student loan defaulters have chosen to go on the lam overseas!

    April 1, 2009 at 12:23 pm |
  24. Avni

    The simple answer is "yes." If you chose to go to an expensive school with the expectation of a lower starting salary based on the field you entered, you should reap what you sowed. However it's really not that simple. I too went to a 4-year private university, and then went straight to a state law school. The costs for my private university after receiving financial aid (NOT including loans, but grants/scholarships) was actually lower than the out-of-pocket costs for the state school to which I had been accepted. The state law school I attended was also one of the best "bargain" schools in the country, but doesn't necessarily have the brand name as other schools. I entered law school fully aware that the inflated salaries for first-year associates were reserved for a small percentage of new attorneys. Upon graduating I found that employers won't even look at resumes coming out of certain institutions. Should I have instead splurged on the private law school and racked up more debt so that these employers would at least consider me?

    My tab even with my diligence in getting the best educational "deal" without compromising my goals – about $60,000 in principal. If we want students to be more cost selective, perhaps we need to start eliminating the stigma employers attach to "lower tiered" schools which ends up forcing many students to pay for the brand instead of the education.

    April 1, 2009 at 12:21 pm |
  25. James

    "Maybe somebody could offer some advice on getting out of this situation. This will help others before they get in the same situation.
    Good Luck Sam!!"

    1. Find a job that pays more. Sorry. That's the only option.

    2. As for people looking at expensive schools, sit down and take an honest look at your salary after college and what you'll have to pay back in student loans. If you want to be a teacher at $35K per year, it's probably not realistic to carry $130K in debt from a private school.

    3. Universities are going to HAVE to get their costs under control. Everyone else is tightening their belts. Colleges and universities are no different.

    4. For people looking at student loans, never EVER take out a private loan. Regardless of the consequence, do not ever do this. If it means going to a community college instead of the school you want to, that's fine. Private loans will own you until the day you die and they can charge whatever rate they want.

    April 1, 2009 at 12:21 pm |
  26. Derek

    I was responsible – I went to a public university, I got a degree that just a few years ago would have more than been lucrative enough to comfortably cover my student loan payments and my wife's. I have about $85k in student loans, probably aroudn $8k on my car loan still [have to have it to get to work]. Wife has around $40k in student loans.

    My degree is Computer Science.
    Her Degree is sociology, and she has 2 classes left to get Political Science.
    Reason my loans are almost twice hers: increase in cost of education, i took a two year break in the middle of my schooling. That is how much in two years the yearly cost of attendance skyrocketed.

    Nobody that has hired my wife has paid enough to justify her getting that degree – not a one: and several of them required you to have a college degree, but then didn't pay enough to justify you having one. She graduated December of '06

    When I went into my degree someone with my open source and community programming experience could have gotten a $60k a year job in Iowa without problem... I graduated December of '08. I started looking for a job around April of 08... you read that right.. April of 08.
    I didn't get a job until VERY recently, and with my wife's student loan payments and her job underpaying combined and despite me working for a lab at university we racked up some credit cards trying to cover the essentials. I finally got a job... it only pays $45k.... which if I was alone with no other debt than my student loans and my car I would be ALMOST fine... but with my wife's debt on top and having no other choice but having run up my credit cards while I was jobless... im not the greatest place right now.

    A little bailout for the little guys like the the wife and I would be nice... heck just forgive my government loans and let us worry about our private loans and we'd be great. Eliminating our government loans would wipe out $60k in debt.

    April 1, 2009 at 12:21 pm |
  27. Katie

    I really hate how many people assume that only those that go to private big named schools are forced to take out student loans. I spent my first two years at a community college, and am currently working towards my BA of psych at a public university. Despite the many scholarships I get for good grades and whatnot, I STILL have to take out student loans just to make it work. This isn't even mentioning that I want to go to grad school, and God knows how much that will cost me. While it is necessary that students get the proper education about their student loans, this isn't being done. Also having the psych background I do, many people don't realize that the prefrontal cortex doesn't finish developing until the mid-twenties. This means that teenagers, (just graduating from high school) aren't as adept to making such logical decision making as we are in our mid-twenties. This isn't trying to scapegoat here, but think about the age you are typically when starting school, trying to identify who you are and what you want to do with your life....it's no wonder why so many students change majors multiple times! But I agree with a lot of posters out there...it's pretty disheartening when the government will bail out major banks and companies that 'effed up big time, yet we can't even get some sort of workable program for students. I'm not saying students CAN'T be at fault...but often we have no other option than to take out loans, even at the bare minimum. Sadly, some of us can't work full time and keep up with our studies as some would have you believe.

    April 1, 2009 at 12:21 pm |
  28. Dave

    Funny how everybody says you will make "X" more dollars in your life if you have a college degree verses a high school degree. What they don't tell you is the cost that it takes to get that college degree. Sometimes the only people making more money are the college professors.

    April 1, 2009 at 12:21 pm |
  29. Greg

    I completely sympathize with this article. I realize people enjoy saying "you CHOSE your student loans, therefore you CHOSE the consequences," but before you make such a simple statement, you should look at the context for most of the students who "chose" these loans. When I took on my student loans, I was 18 and 21 years old, respectively, for both my undergraduate and graduate loans. I was given little to no financial advice, and everyone around you simply states, "education is a plus, it's an investment," etc. etc. etc. – I do agree, it is an investment, but at 21, it's easy to overlook the true financial complications of even "good debt," as student loans are generally referred to as. Additionally, I did go to a State School for my undergraduate work, and I COMPLETELY agree, that I should have gone to another state school for Law, but (a) State-sponsored law schools are few and far between, and again – where was my guidance? Now, I'm not saying my student loans should be flat-out forgiven – but I am saying the interest rates, especially for private student loans, are ridiculous. This is education, over the past year and a half I have paid over 10,000 back, and have not even touched the principal amount of my loans – how is that equitable?

    Everyone should be accountable for their choices, but education is supposed to be something we promote. Before anything, I would promote better financial advisement for those about to enter into undergraduate and graduate eduction – if I had had some more advice prior to my graduate work, I would likely be in a much better position. As for the interest rates, even private educational loans should be capped -there's no reason for students to pay 3 times their loans back – this is not a credit card bill for clothes or personal devices, this is education! On top of this, it does increase the gap between the wealthy and, middle class, essentially, b/c those who can afford to pay for their education outright, actually end up paying LESS – so b/c my parents couldn't afford to drop several thousand dollars in one go, I should pay 3 times what another pays for the same eduation? It's counter-intuitive, at least as far as education is concerned.

    April 1, 2009 at 12:21 pm |
  30. Jeff, NJ

    I was fortunate that my parents paid 100% of my education. I proceeded to save no money and live irresponsibly for the next 10 years. I now have a family of my own to support and I wish I could go back and live carefully and save.

    In contrast, my 20-year-old babysitter works at Old Navy 20 hours a week ; they pay 75% of her Community College tuition. She also works 12 hours for us. She will have real work experience and no debt when she graduates. True, no fancy college name, but if I'm listening to her story in an interview, I'm extremely impressed.

    For many people its too late, but we have to caution against young people taking on so much debt when there are other paths.

    April 1, 2009 at 12:21 pm |
  31. Ken Centreville, VA

    It's a national disgrace what young people have to pay, and borrow, to get a reasonably useful education today. For decades, our governement has been spending billions of dollars a month, on interest payments. Money from taxpayers, some of which could have been directed to better things, if the US Government hadn't gone on a nearly uninterrupted stream of reckless spending since before 1980.

    We can blow a Trillion dollars on the Iraq War, then berate students for complaining about how much they have to borrow to go to college. What's wrong with this picture . . . ?

    April 1, 2009 at 12:21 pm |
  32. Tom, Wisconsin

    I'm sorry that you didn't get better advice before taking out those loans Sam. I'm sure you're not alone, either.

    I had student loans, too. My parents couldn't afford to pay my way through college. So I took out some loans and joined a cooperative education program at college (public, but out of state). Co-oping added 2 years to my schooling but it paid the bills. Also, I chose a field (engineering) where I could reasonably expect to pay off my loans. And yes, I DID do that calculation beforehand – researched starting salaries in my field and compared these to my loan amounts. So, unlike you apparently, I DID my homework. Choosing a college and vocation requires a practical and informed decision, not simply an answer to a "follow your dreams" question.

    You made some bad decisions, but I fail to see why I should be expected to now bail you out. I have two kids of my own to try to put through college. I will certainly try my best to give them the guidance that you seem not to have received.

    April 1, 2009 at 12:20 pm |
  33. Barbara, Texas

    You summed it up yourself: "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?" . Well, yes, if that's what you choose to do. You made a commitment when you signed the papers and promised to pay back the money, and it's entirely your choice to work in a field with low salaries. Get a better job, take on a second job, get a couple of roommates. The only reason student loans were available to you was because generations of students who came before you paid off our debts. Now it's your turn.

    April 1, 2009 at 12:20 pm |
  34. LE, Baltimore

    State schools are not necessarily less expensive. I went to Johns Hopkins because they offered me more scholarship money than the University of Maryland. I worked 30 hours a week and lived at home while I was in school and I still graduated with $40k in debt.

    April 1, 2009 at 12:18 pm |
  35. JL

    For what it is worth to post on these things – I have one point that is seemingly missed here. The problem isn't the federal student loans. My wife and I combined have over $150K in federal loans. They are on 30 years plans and the payments are manageable. We always knew that this was going to be the case and the dept of education loan service is fairly easy to deal with if you have a problem. The real issue is the private loan servicing companies like Sallie Mae. We have one $45K loan with Sallie Mae and they are impossible to deal with. The interest rates are awful and explode upward seemingly at random. We call and we call – they can't do anything about it, nothing, sorry. In the end we are just paying the interest on the loan to keep them from destroying our credit. The principal amount of our loan has not changed significantly in 5 years because we can't afford to pay anything more after the insane interest and our other more reasonable loan payments. I guess I always thought (rather stupidly apparently) that we could get something normal like a reasonable fixed rate of interest on a 30 year term for this loan. That is the real problem and something needs to be done to force the private student loan industry to deal with borrowers in much the same way as the federal system. As it is we are trapped.

    April 1, 2009 at 12:18 pm |
  36. Jack

    Slightly different perspective: Student loans, however scary, are an investment that will pay off over the course of a career.

    When I finished college I had no student loans. I went to graduate school and ended up 30 k in debt. My degrees were in the arts, in fields that have very uncertain employment prospects. For several years I regretted going to grad school as I looked at the pile of debt that I had accrued. Now, seven years later, I have a great job that I could never have gotten without going to grad school, and the loans are paid off. The loans were a great investment in my future that have already paid off several times over. I didn't expect it to happen this fast, but over the course of a career I imagine that the education and degrees that student loans buy do actually pay off.

    April 1, 2009 at 12:18 pm |
  37. LO

    I agree 100% that the system that failed so many students needs to be addressed. They play on people and no one realizes it. People have taken out student loans because they were led to believe it was the choice for them, the right choice, a safe choice, and it isn't. One of the greatest things that can be done for our nation is to wipe out all student loan debt and credit issues for people. Those who take it seriously will prosper, those who take advantage, you had your chance to shine..use it or lose it.

    April 1, 2009 at 12:18 pm |
  38. Angie

    Anything that could b e done won't necessarily help the worst of the student loans, private student loans. At 9% (if you are lucky) you are paying 90% interest every month. And by the time you graduate the can accumulate as much as 15-20k in interest charges.

    My fiance and I started two years ago with ~240k in student loands (120k private) and are on road to repayment within 8 years of graduating if we are lucky. What does that mean? Payments of $4,200 a month.

    April 1, 2009 at 12:18 pm |
  39. Mike K

    While I sympathize. I had student loans too. It was a bear to pay and eventually I did. No gave me a break. As been said it is a choice.

    April 1, 2009 at 12:18 pm |
  40. C Baker

    Well I see all of your points on student loans. I myself am in the Army and when I chooes to go back to school I have my GI Bill. My wife on the other hand isnt able to use my GI Bill as of yet (soon to change for Spouses and children) I will retire in about 3 months after 22 years of service. My wife quit her low paying job about 6 1/2 years ago and went back to school. We got some student loans to make this happen. I did this because in this day and age in the military you never know when you might be deployed and not come back. I have been deployed 5 times since 9/11. I wanted her to get an education in case I didnt come back, her and our children would be ok. Well with that being said she will graduate (doctorate) this summer and we did some research and found that she could join the Air Force and they would pay off 40K of her student loans and provide her with a job in her career field as an officer and she could serve her country to repay her debt for the sudent loans. I say this because there are some different ways to get rid of your student loans you just have to think outside of the box. 30 days paid vacation, unlimited sick days, full medical/dental, and a py check every two weeks and, in 20 years you retire and you dont have to pay in for it. Just some food for thought.

    April 1, 2009 at 12:18 pm |
  41. Rick

    Wow. I have a Ph.D., paid for everything myself, and have less than half the loans than the writer.

    How did I do it, you ask? It was (not) easy:

    1) I went to state schools
    2) I worked 30 hours + per week
    3) I joined the Army reserve, which helped a lot with undergrad tuition & a little loan repayment

    I can't have much sympathy for the writer, who made bad choices across the board and still manages to get an international audience for her whining.

    April 1, 2009 at 12:17 pm |
  42. Justin

    I remember when I signed up for student aid to go to a popular public technical college in Atlanta. The loan advisor said "sign here saying that you received counseling, you seem like a smart guy, so you don't need it." I was 18 years old coming out of suburbia, and unfortunately my parents hadn't really taught me anything about debt. Predatory lending is a problem in our nation, however, so long as there is demand, someone will supply. We need to educate about debt in public high school and many problems will be solved. Had I beed better educated, I would have made different decisions out of high school.

    April 1, 2009 at 12:17 pm |
  43. Jake, Rochester NY

    Prime Rate is around 3.25%; Federal Discount Rate is 0.25%. Yet Federal Education Loans start at 6% for Subsidized Loans, 6.8% for Unsubsidized Loans and 8.5% for Parent Plus Loans and presently cannot be consolidated.

    This is outrageous – it’s obscene and does not reflect economic reality!

    If the government wants to insure education of it’s populous, then lower the interest rate charged for US Dept. of Ed. education loans. These high interest rates were pushed through the Bush administration in 2006 jumping 3% to 4% at once. There is no reason why the government couldn’t consolidate existing loans and provide new loans at much lower rates as a means of helping students and parents navigate the education process.

    As for private versus state schools, the reality is, there aren’t enough state (funded) schools available to solely meet the educational needs going forward. Private schools aren’t a luxury; they are needed just as much as state (funded) schools.

    I urge you to direct your comments to both your representative and senators.

    April 1, 2009 at 12:17 pm |
  44. mark

    Student loans will not be improved because there is no lobbyist.
    I have a student loan that is fixed at 8%. Even when interest rates were/are only 4% they would not let me refinance. If it had been a house or a care or a business loan I would have been able to refinance.

    There is no advocate so expect no fairness in the system. Student loans are the silent victim of the screwed up student loan system.

    I am paying but see it is unfair that I cannot refinance because banks do not want to give up their 50% guaranteed margin built on my back.

    April 1, 2009 at 12:17 pm |
  45. Cheri

    My daughters worked both during high school and college and saved, saved, saved. They kept their grades high and applied for every college scholarship they could find. On spring breaks they did NOT join their friends who took expensive vacations. They were satisfied with used books, used clothes, and used cars.

    I am proud of how responsible they proved to be....which leads me to ask:

    Why is it always that the people who make responsible choices are expected to bail out those who make irresponsible choices?

    April 1, 2009 at 12:17 pm |
  46. Erin

    While I agree that the current interest rates (8%) are prohibitively high, (up from around 3% less than 10 years ago) why did you borrow most of your tuition/expenses from private lenders? Having just finished graduate school, I've been given the opportunity to defer my federal loans for 6 months...even with a job this is a blessing. Or did the cost of school well exceed the possible amount you could borrow from the feds? 12 years to repay all that sounds crazy! Too bad we don't have the option to roll private loans into federally-consolidated ones.

    In any case, I would support any legislation that decreases interest rates!

    April 1, 2009 at 12:17 pm |
  47. Bob

    I went to a fancy school for one semester because they gave me a ton of financial aid grants They cut back my financial aid dramatically due to budget issues and offered me loans. I chose to leave and go to a state school (SUNY Buffalo) in New York because I didn't want to have an unmanageable debt upon graduation based on my likely earning power. This seems to me to be a common sense thing to do and am shocked that anyone would not do this. I also took a year off and worked full time to save money in order to rely less on loans.

    I found the education to be better than in the private school and the cost a modest fraction of the private school. I worked all the way through school keeping my stress level high and debt low. I then lived at home for a year and paid off all my loans within a year. I am grateful to NY State for the great bargain and great education that was provided to me.

    I am baffled why there is no anger at the colleges! Why don't you ask for a refund from them rather than the taxpayer. The college profited from your profligate spending not the government. The colleges also apparently misled many people about their earning potential after receiving their diploma. The colleges need to be challenged about this behavior.

    I lived within my means and feel that the situation these others are in is very unfortunate. But it is not the burden of the responsible to subsidize the irresponsible.

    April 1, 2009 at 12:17 pm |
  48. felicia Fiore

    Hi, I agree 100%... I can't stand when people say... "oh well you should've known what you were getting your self into, you shouldn't have went to a private university"... I chose to go to Hofstra University on Long Island for my engineering degree (graduated 07), when I got my initial financial aid package (17 years old), i was a little confused. Yes I got just under 15k a year in scholarships, but I didn't really understand the difference between private loans, federal loans, and which was grant money. All I saw was the total financial aid package, which looked really good at the time. Point being, when i graduated I owed about $60,000 (mostly in private loans) !!!, it felt unbearable. Can you imagine if I didn't have scholarships. I think the student loans system rapes these young kids and preys on the fact that they have not a clue what they are getting themselves into... and colleges need to stop being so greedy especially since they sit on millions of dollars in endowments! There needs to be stricter regulations on this industry and on how much a student is allowed to borrow. The goverment is also in need in reform, as they are the one who decide your EFC (estimated family contribution), and they expect you to be practically homeless to get any grants from the government. Oh and i also didn't know that my private loans were accruing interest in college... so when I graduated I already had $10,000 in interest.! great huh

    April 1, 2009 at 12:15 pm |
  49. Christopher Smith

    I would have to say that everyone's choice is different when it comes to their field of study. I am a junior in college and I plan on obtaining a M.A. as well as a J.D. and a M.L.A. After all of this college I plan on joining the military and part of their sign on bonus includes up to paying off 65k in student loans. Futher plans includes me working for the federal government after military service.

    I would say that first and foremost, a person should really know if what they want to do in this life is something that they love to do, and not because everyone else is doing it. Secondly, get great ACT, SAT, GRE scores. Whatever happened to the emphasis on brain smarts.
    My parents pushed education when I was growing up.

    There are so many scholarships for those who have the academic merit in America. It is not over for college students, but students REALLY need to plan what they want to do, and how best to do it.

    April 1, 2009 at 12:15 pm |
  50. B Segard

    How about this one? I graduated with a masters in Social Work in '88 from a private school and had $20,00 debt. (I was 59 and so proud of accomplishments!) couldn't pay the debts on my low salary so I did forbearances, consolidated at the then rate of %9!! and periodically made payments as I could. over the years the debt is now $50,000 due to "capitalization" Katrina forced me to leave the small private practice Ihad in '05 and now I am 67 struggling to re-build a practice. no end in sight. Sallie mae won't lower the interest because once its consolidated you can't change the rate, according to them! sure, I made some mistakes originally in the loan process- (don't we all?)and I should have known that social workers can't pay off huge loans, I had high hopes and encouragements,but now I have a humongous loan at %9 I can't pay . What can we all do?

    April 1, 2009 at 12:15 pm |
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