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. Arthur

    When I graduated high school in 1993, I decided I didn't want to go to a state-supported school for four years and come out $35,000-$50,000 in debt, so I joined the Navy instead. When I bought my first home in 2005, I put money down and bought within my means (fixed APR @ 6.5%). What have my responsible decisions bought me? I've got a home with ever-decreasing value, taxes that won't quit going up, and now EVEN MORE irresponsible people like you are asking for me to bail you out. I am tired of paying for other people's impatience and lack of responsible decision making. You screwed up YOU PAY FOR IT!!!

    April 1, 2009 at 12:45 pm |
  2. LeyaRuth

    I think Samantha is very brave to finally bring this matter up to the public. We college grads have been under the burden of overwhelming student loans for years now. The leaders of our country have no problem bailing out banks, that then turn around and give millions to execs who made them fail in the first place, and the auto industry, which has had its head stuck in the sand for years, instead of bailing the future of our nation, our students.

    Although I don't think we should be "bailed out" like everyone else, because the money we borrowed was put to a good use and should be paid back eventually, I am very mad that they will bail out people who made bad decisions when buying a home. Instead, they should be relieving some of the debt of the millions of students out there struggling just to make their payments. Again I don't think wiping away the debt is a good idea, it just encourages people to leach off the system, but the government could assist with getting loans consolidated to lower payments.

    I also had issues getting my loans consolidated. In the current situation, Sallie Mae would not consolidate, so I turned to the Education Department. Luckily (after about 9 months of waiting) they came through and consolidated for me. Now I am only paying what I can afford.

    I think it is absolutely disgraceful of these lending organizations to expect recently graduated students to be able to pay $1200 a month, within 6 months of graduation, especially in a time when there are very few jobs to go around, and even if they can get a job, they get pitiful salaries.

    It's about time we student loan paying citizens stand together and call on our government to help those of us who are educated, who are the majority of the future workforce and tax-base, for help. It's about time they help those of us who made the right decisions, who do most of the work, and who are just trying to do the right thing in making our payments, instead of bailing out greedy auto industries and banks who make the wrong decisions and expect us and future generations pay for it.

    April 1, 2009 at 12:45 pm |
  3. Justin

    Much like many, not all, of the mortgage loans people were biting off more than they could chew because they were either uneducated or desperate. You made an agreement, and you didn't fully understand the consequences. Even in a good economy you would have had trouble paying those loans so I don't think all of the blame can be placed there. I know many of people who have worked their way through college and it may have taken them 8 years, but they are better people for it and are much more financially responsible. Kids need to realize that loans are not handouts.

    April 1, 2009 at 12:45 pm |
  4. AndrewM

    These huge debt numbers, to me, show the consistency of a problem that America is having. "I'm entitled to this. I deserve this. I shouldn't have to pay for it though." You made your choice to take huge loans out to go to an expensive school, even though attending a local community college for a couple of years would have cut your debt load significantly and you'd have been able to land the exact same job.

    It's about people living outside their means, and not planning for the future. Now, unfortunately, living outside your means has caught up with you. Sounds like your parents didn't teach you properly about this thing called LIFE. Save for the future. Spend what you can afford. To spend $100k+ to get a job that pays <$40k a year is ridiculous. Talk about a poor investment.

    My parents saved for 18 years to put me through college. I remember mom putting $20 a week in to my savings account book. That's all it took. I did not have a car until I turned 21 and was working on my own and could make the payments myself. That's called proper financial planning and fiscal responsibility, people. Teach your kids what it's about. My kids will go to a school I can afford, and yes, I am paying in to their college fund RIGHT NOW.

    April 1, 2009 at 12:45 pm |
  5. John in NoGro

    There are a fair amount of comments that those of us who are wallowing in student loan debt are responsible and should not be helped. They're right, for the most part.

    Realize that we took these debts out at 18 or 19 years old, often under the guidance of our parents. Indeed, you cannot get these loans unless you have a parent signature. In my situation, my mother never informed me of the end result of borrowing so much: over $130,000 in debt, at 8-13% interest rates (on private loans – which are most of my debt), and over $1200 per month over the next 25 years. These companies, much like the mortgage lenders, have made a fortune on the backs of people who made misinformed, immature, and irresponsible decisions.

    The reason for these decisions, as many in my age group (25-30 years old) will attest, is because we were told all through the '90s that the only way to get anywhere was to go to college – and the more expensive and prestigious the college, the better. So we did, many of us either not ready for college or unaware of the costs of such an adventure. Society led us to spend hundreds of thousands of dollars on educations that some of us probably don't need or use. The ultimate irony is that we were led to believe that an expensive college education would get us fabulously paying jobs, but instead, we still have to travel up the traditional job ladders, meaning we make barely enough to make ends meet.

    Why is helping to reduce or eliminate this debt important? Because of it's effect on the economy as a whole. The age group most likely to spend money on new homes, cars, etc... is limited in their ability to participate in the economy. I don't think we're all arguing to have our loans eliminated. What we are arguing is that we be given a fair interest rate and repayment terms, and for those in the future, affordable tuition at universities.

    April 1, 2009 at 12:44 pm |
  6. kevin

    I am 40 yrs old and have about $25K worth of student loans. For the first 13 years after college I worked in a very low paying job that only allowed me to pay a fraction of my loan per month ($120). My $120 was used to pay for service fees, and none reached the principal. Some magical way the debt grew to $50K. This is after I have paid $120 a month for 13 years. I have stopped paying because I know this is unjust. I know have a better job, but I am not going to pay back twice what I borrowed, plus give up all the service fees I have paid for 13 years($21K). I don't regret for one second that I went to a state school the best way I could. I can live with my choices. I just wish that private companies had to live with their choices. They get bailed out.

    April 1, 2009 at 12:44 pm |
  7. Stoney


    I work for a federal student loan guarantor in the Northeast. We guarantee the bank that you will pay your federal FELP student loan. If you don't, you defualt on your loan we pay it off for you. One of the services we offer is to cousel borrowers and parents on how to manage the financing and repayment of student loans. I think that there should be more up front conseling of potential borrowers. There should be more information available regarding expected payments and repayment options and compare that information to expected entry-level salaries. We need mandatory pre-loan counseling. If you had been given more information up front, you might have made different decisions.

    April 1, 2009 at 12:44 pm |
  8. Gary

    I feel for your dilemma Samantha but it is what it is. Nobody forced you to get these loans or to major in a low-paying profession. The fact is that many universities are not worth what they charge.

    We have an expression here in NC: If you want an education, go to one of the fancy private colleges; if you want a job, go to a state college.

    In many senses, you should feel very fortunate that you were able to get these loans and forego saving up the money beforehand. In the past, getting student loans was only possible for a very fortunate few individuals. The only loan I qualified for was a 18.5% signature loan that did not defer payments until after completing college.

    For those of you leaving comments tieing this with the gov't bailout, remember that the bailout funds are loans – not gifts.

    Are you suggesting we pay back student loans with more loans? Isn't this what got us into this mess?

    April 1, 2009 at 12:44 pm |
  9. Dylan

    This is the problem with going to college now a days. Colleges have gotten so expensive and grads are leaving with unimaginable amounts of debt that can never be paid off. Then when grads hit the job market they have to start out with entry level jobs that don't pay enough to live on or to pay back students loans. I believe it's getting to a point where college is not worth going unless your from a very wealthy family or you have a full paid scholarship.

    April 1, 2009 at 12:44 pm |
  10. Steve

    Instead of forgiving stundent loans, Amercia needs more emphasis on loan education. I'm sorry, but if you were foolish enough to sign up for student loans with poor Ts&Cs, you should pay the consequences. We are stupid when we are young, but that doesn't mean America should pay.

    April 1, 2009 at 12:44 pm |
  11. Jeff

    This article really speaks to me. I made a lot of the same choices you did, and have about $80,000 in loans to pay back, which are currently in default. The collection companies want me to pay $1,200/month to "rehabilitate" them, but that's really not something I can afford right now. So they sit and grow bigger with each passing day. I can't claim bankruptcy on them, so they just continue to grow.

    It's a hole I dug, and I accept that, but what I get pissed about is the whole "Go to the best college you can no matter what it takes" mentality that was drilled into us from as far back as I can remember. "Don't worry, when you get out of college, you'll have such a good job that you'll be able to pay them back no problem."

    There wasn't really much education on loans and what taking one out *really* means. All my financial aid department did was give me a form to fill out, which took 15 minutes, and bing bang boom, I had a $15,000 loan. How the heck do they give an 18 year old kid with very little credit history a loan like that? It's insane.

    Only a year after I graduated did I realize what I had actually done to myself. And looking back (10 years now), I really don't see why I needed to pay that much. Community -> State is a much more sane way to go.

    Certainly my kids (if I can ever afford to have any) will be going this path, and I'm going to do my best to make sure they don't make the same mistakes.

    April 1, 2009 at 12:44 pm |
  12. nh

    Maybe I am cold, but I have no sympathy for this article. You signed the documents for every $ of principle. As your schooling progressed, a thoughtful person who was receiving an 'education' would have considered whether your choices were going to work before continuing to sign for more loans. Clearly, there is a big difference between knowledge and wisdom.

    Contrary to the mob-rule mentality of the crowd, the answer is not more government, but less. Higher education tends to be extremely unresponsive to the value provided for the $ they seek. Take away 'guaranteed' loans, and the institutions have to prove their value up front (for instance – by lowering the price to something more in line with the expected income potential). This is otherwise known as return-on-investment, an old fashioned principle that will serve you well for anything you buy.

    April 1, 2009 at 12:44 pm |
  13. Teacher from San Francisco

    My wife and I currently make a salary in the mid $50s, but we cannot afford a condominium or townhouse because we pay about $700 a month on student loan payments. Yes, we had a choice to go to local community colleges, and perhaps we should not have become teachers, but it is still very difficult. We are very responsible with our money; we do our best to keep credit card balances low and have put money into a money market fund. However, due to student loans we have to continue to defer our dream of home ownership.

    April 1, 2009 at 12:44 pm |
  14. Ryan

    What is outrageous is not the loans. Nobody forces you to get a loan. That is your own fault. The problem is with the colleges. They get all kinds of grants and cash from the government, donations, tuition, etc, and while claiming that they don't have enough money, they do $50,000+ renovations to their campuses, put in marbled bathrooms, install crystal chandeliers and put up huge portraits to their spendthrift administrators. All the while, they translate those pork projects’ costs to the students’ bills. Every year tuition rises, and every year the students go further in the hole. The government should be regulating colleges to make tuitions more reasonable.

    April 1, 2009 at 12:43 pm |
  15. TinyTim

    Wouldn't making loans cheaper have the opposite effect desired by the writer? Cheaper, larger loans means more people in school and leads only to higher tuition requiring even larger loans. The way we get better cheaper university education is by eliminating loans entirely, focusing instead on merit based scholarships. Universities would soon be cutting their tuition greatly and all would benefit.

    April 1, 2009 at 12:43 pm |
  16. Mike

    Samantha never said she did not want to pay back the money she borrowed, all she wants is a reasonable interest rate so there is some end in site. These greedy lenders should not be getting rich off students.

    April 1, 2009 at 12:43 pm |
  17. Kathryn

    This article is a very well written example of how the "age of entitlement" knows no economic or educational boundries. People of all kinds have chosen to live beyond their means. It's not just those who are uneducated. I went to a private college. I knew I would be able to afford the student loans. At one point, my financial situtation changed and I realized I might no longer be able to afford the college I was attending... SO I LOOKED INTO TRANSFERRING! While in college, you get quarterly statements about the loans that you are racking up and the amount of interest that is snowballing. If you chose to ignore those statements and have no plan for paying the loans back, then I certainly should not be required to bail you out. Sorry. But I have no sympathy for you because this is something you have been aware of for FOUR years. You could have prevented this but you chose not to, in hopes that someday something or someone would come to your rescue.

    April 1, 2009 at 12:43 pm |
  18. Gail

    I am of two minds. I agree that students should be offered the same interest rates as banks. Surely that is a better investment in our future.

    But I also believe that college has become a business and the cost of education absurd. I went to CUNY when it was free and received an excellent education. A private college or even a state university was not even an option. My mother, a widow and child of the depression ,would never consider taking out loans. when a free education wsa available to her children. How wise she was.

    The reality is, not everyone can go to a private, expensive college. If it means going into debt, then the student must be prepared for the consequences. Just like when one buys a home that is really beyond their means.

    As noted, college is a business. Perhaps if students went "on strike" and refused to apply, market forces might "reset" the cost.

    April 1, 2009 at 12:43 pm |
  19. Michelle

    Great article, but is the Gov't? I took out a small student loan while attending a community college (only 1,500.00). I was working at the time and paid for my education out of pocket, my husband & I made too much for me to receive a Pell or other assistance. I couldn't finish my degree because of a serious & lengthy illness which left me unable to work for 5 years. That tiny student loan went into forebearance many times until I used all of my forebearance requests (with interest & penalties being added the entire time). The loan then went to collections & into default, despite my documentation that I was ill & couldn't work. They didn't care!

    I now owe almost $15,000.00 and do not qualify for lower payment options because I used all of my forebearance requests and the loan was turned over to collections (defaulted on) during my illness. To make matters worse, once I was well enough to go back to work I was locked out of most jobs because of the default status. At one point I did get a job and held it for 3 months, my employer (a state agency) let me go because they couldn't knowingly employ a person who was in default on a student loan.

    I am currently employed but the Education Dept has refused my attempts to setup a payment plan that I can afford. They even told me not to send any money because they will not accept it if it's not the full amount. Paying less than the full amount immediately ended their offer of a payment plan and escalated collections through garnishment. The Education Dept has recently begun garnishment proceedings (15% of my net pay) because I couldn't pay the full amount each month. By the way the 15% garnishment is less than the monthly payment they assessed and is the amount that I had tried to get them to accept.

    The Education Dept turned a deaf ear to my situation & pleas years ago. My only hope of ending the interest & penalties was if I had died. Talk about greed, the only reason I owe 10x more than my original loan is because of interest & penalties that the Education Dept refused to stop levying or later rescind. They even went a step further to make sure that any chance of restoring my credit is ruined by garnishing my wages for an amount that I had been sending but they refused to accept. The Education Dept isn't only greedy, they are idiots!

    April 1, 2009 at 12:42 pm |
  20. D

    For those of you telling the author that she should have gone to a state school: What about those of us who did go to a states school and are still in a similar situation? Do we get your sympathy? Or are you going to tell us that we shouldn't have gone to school at all?

    April 1, 2009 at 12:42 pm |
  21. Sky

    I agree 100% with you Samantha. You were not partying it up in Vegas with top rock star band, or riding around in private jets. You were not embezzling billions of dollars from stock holders. You were trying to get the education that the world says is required to get anything above a minimum wage job, and when you got out, you found out you were lucky if you could find a job that offered a starting pay above minimum wage even with your degree.

    I know more and more families who are unable to live because of student loan debt.

    At the time these families and students take out these loans they are assured that the payments will be small, they will be spread out over years, they will work with you to pay them back. Then the companies say, "Oh, no, we mishandled our money, so you have to pay it all back in amounts that are equal to or above your net pay. Sorry."

    I suspect the largest part of the national economic crisis is caused by student loans. People can't spend the money because they don't have it.

    Right now a bachelor's degree is to today's young adults, what a high school diploma was to the baby boomers. If you want the jobs, today, that used to go to people with a bachelor's degree, you have to go after the Master's or Doctorate. If education is mandatory to the work force, it needs to be free to the public.

    I work in a University. Many of our PH.D.'s are only earning 40K a year. The education they received cost them more than their lifetime earning potentials.

    I also notice that they aren't exactly "upfront" in forms about what a college education really costs. Reports show that last year a public four-year degree was $6,585. Where? Jamaica? The 6,585 is TUITION. College require much more than tuition of students.

    Where I work, the tuition for the average student is $4,310.0, but the MANDATORY FEES are another $2,437.

    Add on the room and board. (Many universities require freshmen to live on campus). That's another $7,310. (Per year).

    And there are "extra" fees per semester for laboratory fees, course fees, property deposions. Those average around $170 a year. And you may need books for those classes. Books that can cost $200 – $400 per class, and a little gem they call "Institutional Designated Tuition Fees which basically mean certain programs get to charge more money for certain classes, per class hour. Up to around $94 a credit hour for those classes, and tacked onto regular tuition. Then you have to add on the fees

    And that is if you live in the state and are an undergraduate student. .

    That $4,310 tuition jumps to $12,740 if you are out of state.

    April 1, 2009 at 12:42 pm |
  22. Realistic

    Okay, all of you well-educated people. Did you take time to do the math before signing up for all of that student loan debt. Get real. Surely you investigate a car purchase or home purchase and how you will make the payments before signing on the dotted line. Then you should do likewise with a student loan or any other loan. I went to a state college, received a 4 year grant that was canceled after 2 years because I began working full-time while in school which meant I had to pay my last two years from my meager earnings and maintain my own apartment. I graduated debt free from undergrad. I am currently in seminary and now have student loans that supplement my scholarships and I continue to work a full-time job to pay for my living expenses and additional school expenses. I will have about $10,000 in student loans when I finish this 4-year graduate program and do not foresee any problems repaying this debt. There is no way that I would agree to an overwhelming loan then try to weasel out of paying the money back because I used the money to not only cover tuition, but my living expenses as well. I agree that the interest rate should be reduced to reflect market trends, but you spent the money, now pay it back and stop whining about milk that you drank.

    April 1, 2009 at 12:42 pm |
  23. Stephen

    Wow, there are a lot of uneducated people who read CNN. You're chastizing someone for trying to better their position in life by taking out student loans? That's completely different from the credit card and buy a car and house and everything-else-under-the-sun crowd that is getting special treatment. According to you people, we would have been better off sitting around racking up debt rather than educating ourselves to create a better life. Is this what the US is all about now? Don't work to contribute, stop contributing and beg for your handout. Student loan reforms should take precedent over defaulted mortgages; afterall, we're the people who are going to get the rest of you beggars through the crisis, you're just going to be asking for another handout when we pay off your house, in addition to our student loans.

    April 1, 2009 at 12:42 pm |
  24. Ray in Philly

    I have more then Samantha does that mean I win. I have a whopping $220,000 in school loan debt. I will admit I was foolish as well. I thought I would actually be able to get a decent job and pay the loans off. My plan was to go get my PhD and teach because I heard professors in my field were making six figures because there is a shortage, but life happened and I couldn't continue on and now I'm floating up to my eye balls with a nightmare scenario of paying $2,000 a month for all my loans. I don't know how I'm supposed to do that. What sucks is the new bankruptcy law states that private student loans (the big ones I have) can't be included in bankruptcy so even though I have nearly $80,000 in credit card debt and medical bills that are near $20,000 I can only wipeout the credit and my medical debt, but still have the giant amount to pay back. I'm so lucky I own my home cause I am basically paying a mortgage for my education.

    I agree though it isn't fair that everyone else is getting forgiven for taking on debt, but us students are screwed. This debt has also screwed up my marriage. I have been so depressed because of the debt that my wife is on the verge of leaving because she can't take my negativity all the time. So I want to know why can't we get some relief. I know people will say you took it on, but the banks were all ready to give me the loans. Does anyone remember the TV ads and the ads in the student loan office? They were pushing people to take the money. So should I take 100% of the blame? I think we all screwed up. I do know this if they don't give a little I may just say screw it I will live off cash the rest of my life and not pay anything. I'm getting to the point of not caring anymore because I try and try to pay these off, but I have to feed my kids and my family first. Anyway, thanks for shedding some light to this topic.

    April 1, 2009 at 12:42 pm |
  25. Junior

    Well I dont where your local colleges are, but my state colleges are very expensive here. I am working fulltime and going to school fulltime. I still have to take out loans to cover my cost, I just hope that by working it will not be as much as if I had not. The reality is that we should not being paying that kind of interest for any school loan. If you choose to go to a private school that is tution you need to understand you will have to pay back. But what were we, as a country, were thinking when we started charging 8-10% on these loans? In a age where education is a must, lets look at this mess. I am not talking bailout, but give all kids a chance for college..

    April 1, 2009 at 12:42 pm |
  26. Megan

    Well said, Samantha!

    To everyone who blames graduates for their student loan debt keep in mind that there are many students who received scholarships or financial aid, who worked their way through school, who attended cheap state schools yet still have student loan debt. I did all of that. I played by the rules. I worked while I attended school, but I still left with $25,000 in student loan debt. I had to give up my dream job as a reporter because I couldn't afford to pay my loans and survive on an entry level reporter salary.

    Samantha, stick with your dream job. While there were some better choices you could have made in terms of cost it does not change the facts: 1)The cost of going to college has increased dramatically to ridiculous levels 2) Scholarships and financial aid have not kept up with the rising cost of attending college 3)The student loan industry is predatory.

    If the US is going to improve we need to educate our citizens. We need to make college affordable so we have an educated workforce that can compete in the global economy.

    April 1, 2009 at 12:42 pm |
  27. Sandra

    For those of you with such righteous attitudes, what kind of society do you want anyway? Obviously the one where only the wealthy get good educations. Do you realize that student tuitions increased 10 fold in the past two decades? I have been a graduate student for the past 5 years. The tuition during this time has increased 40%. I didn't sign up for that, I signed up to become a researcher and treat child trauma and help foster care children and for that I will never own a home or be financially secure. I'll be a doctor that is as poor as the family I came from.

    April 1, 2009 at 12:42 pm |
  28. Missy

    Sam I completely agree. I went to public school finished in 3.5 years and left with 40K in debt. When my father died the governmet was nice enough to forgive his portion of the loan and leaving me with 20K. Then I had a bright idea that if I got my Masters I could make more money. After 2 years and 30k (private school), I owe a total of 50k at $425 a month for the next 20 years. Unfortunantly having a masters didnt bring more money. Now I have to get a second job to pay back the loans.

    I dont blame anyone but myself for not being informed. But if we are going to bail out others for their bad choices why not those who seek higher education. The least the government could do is lower the interest rate for everyone to 1 or 2% and give people the option to refinance private loans with their federal loans at a fixed lower interest rate.

    April 1, 2009 at 12:41 pm |
  29. Jarrod

    I find it irritating that most of the people who are speaking out negatively on this already have a job and can make their payments. I came from a low income family and there were no jobs in my area that I was qualified for, I went to technical college for 2 years, got my degree, and all the businesses had left because of the bad economy.

    So now I'm left with a 500 a month payment, a degree that's pretty much useless in my entire state, no car, no means of relocating, and no job. I've been looking for a job for the past 8 months since I graduated,and for 4 years before that. Everything from fast food and janitorial, to higher paying jobs and the answer is always the same, its either A: we are not hiring, or B: your overqualified to work here. So what are people like me suppose to do that try to play fair and obey the rules?? I never tried to abuse the system or take advantage of anyone, I just wanted to make a better future for myself.

    So what about people like me? Are all you people who are saying "you shouldn't have gotten into it because you couldn't pay" going to say that since I was low income I shouldn't have even tried?? Don't I have a right to pursue an education and better my future as well? As far as a bailout goes I really don't want the government to take care of my student loans, I'm a man and I'll repay those through hard work, I just want them to tell the student loan companies to back off until I can find employment.

    That's not to much to ask considering how much money we've been giving these companies who have CEO's that make millions a year and continually accept bonuses and kickbacks.

    April 1, 2009 at 12:41 pm |
  30. James

    I am in a similar position to Samantha. If I could do things over, would I have chose a more affordable education? Perhaps. But, I had a very good education. I was fortunate to be taught by top notch professors. This has changed my life forever, as has my debt. The current state of the economy is horrendous. The job market is in turmoil. Yet, I should be ashamed because I made the decision to incur this debt? Forgive me, for trying to better myself and making an investment into my future. I had to borrow against my future earnings in order to attain a college degree. But, to be charged a ridiculous amounts of interest while actively pursuing employment leaves me baffled. Private Loan corporations should emphasize and give us a break on interest charges. Besides, at the time, they thought I was a worthy investment by allowing me to borrow their money, right?

    April 1, 2009 at 12:41 pm |
  31. Tracy Nicole Irwin

    This article is so strikingly similar to my own experience. I went to a private art college in San Francisco. I sympathize with Samantha wholeheartedly. I can relate in every way.

    April 1, 2009 at 12:41 pm |
  32. Charles

    I agree with those that are asking why higher education is so expensive in the first place. As a Health Education Assistance Loan (HEAL) borrower who took out loans that were market ineterest rates (at the time about 14%) and no interest deferrment while in school, I can sympathize. Only 4 years into practice, managed care had reduced my reimbursements by 60% and after years of struggling I ended up in bankruptcy and a career change. Apparently the government feels that even when you can't pay anyone else you still need to payoff your HEAL loans (other loans were discharged) as they are not dischargeable in bankruptcy (technically they are but the Secratary of Education has to waived their right to the money). So I'm still paying for a career I can no longer enjoy.

    April 1, 2009 at 12:41 pm |
  33. Tony

    Sorry, but you should not have signed anything that you didn't understand. When you buy your first home, perhaps you will read and understand every word, then you can avoid unsuspecting surprises.

    April 1, 2009 at 12:41 pm |
  34. Arthur

    In reply to stacie who said,

    "You CHOSE the loans, the college, the career, so indirectly you chose the consequences. Others chose community college, or worked first and saved enough, or obtained different loans....
    What has happened to personal responsibility?"

    I believe you missed the part about being uneducated, which is primarily why people go to college. The period in time when a person decides to go to college is a time when that person is still struggling with many, many decisions and problems, from self-identity to making decisions about life-paths to take... Student loans are a last resort at fulfilling the pursuit of happiness for alot of kids at this stage. I took out loans to go to Film School and I made the grade, however I could not return when financial disaster struck my dad's job, no job, no co-signer. Now I have debt.

    It has been said time and time again that certain leadership has wanted to preserve the status-quo. That means whatever financial tier you were born into is what they want you stuck in. Guess what, it takes money to make money and it's extremely difficult getting out of this "personal responsibility" madness you speak of. The responsibility has exploded out of the boundaries of its semantic meaning. What a ignorant mask of words to cover up the truth about America's greed and failed financial system.

    April 1, 2009 at 12:40 pm |
  35. Danielle, NY

    I graduated from law school in 2007. I currently owe $180,000+! People say to me, "but you're an attorney...you make alot of money." Um, actually, I don't. I have five different student loan companies who don't realize that all of their monthly payments combined total more than I make. I told them point blank that it was impossible for me to make all of those payments. Oh and by the way, I have no deferrment time left either. It will be interesting to see what happens, but I do have to live somehow.

    I think its sad that people are basically penalized for educating themselves. The industries in this country are lagging behind more able and better educated countries because we do not value education enough to make provisions and laws which would allow access to everyone to higher education. As it stands, for the next generation, education will only be for the wealthy because the average person and family simply cannot afford it. I have no idea what I am going to do............

    April 1, 2009 at 12:40 pm |
  36. Tory

    Great post, Samantha!

    In the exact same situation as you – graduated from a private university in DC May 2007 and owed $114K total. I'm down to $100K now, but that still means putting well over $1000/month towards three separate loans each month. I think there is something terribly wrong with a system that leaves students with overwhelmingly large federal loans to repay, considering many students must also take out *private* loans with variable interest rates, just to make ends meet. How are we ever supposed to help our children get through school if we're drowning in our own student loans?

    April 1, 2009 at 12:40 pm |
  37. Karen E., Maryland

    It is unfortunate that some people posting comments don't understand the tremendous hardship studen loan interest has on young people today. The vast majority of students enter college with no understanding of what they are signing when taking out student loans, what interests rates mean nor the realities of starting salaries. If you are a first generation college student, your parents don't have the answers either. We are told our whole lives to go to college, get a job, and everything will be alright. However, nobody educates us about the repayment process. I agree with Rev. Jesse Jackson 100%. If banks can pay 1% interest, why can't we?

    I am fortunate enough to be in a position to potentially be student loan debt free in 10 years thanks to the Income Based Repayment plan because I work in the non-profit world. However, most of my friends are not in my financial position and will not fair as well.

    April 1, 2009 at 12:40 pm |
  38. Antuan

    Nice article, some very strong things to think about. The number of grads and high school students in currently in debt now is a problem. However, everyone keeps talking about the banks, and foreclosures while schools are closing because they say the attendance is too low.

    Who wants to go to school so that they can come out in worse debt than their parents and no job because now they have to measure a degree against experience, and if i was the employer i, myself would chose exprience over the degree. I ran into that wall so many times, being over qualified and then too educated for the pay scale. I graduated in 08' and just landed a job this year so I'm lucky and thankful, but for those that aren't so lucky, what are they to do? The challenges and obstacles are plentiful against them and instead of being rewarded they are punished in a sense with this cloud of debt over their heads.

    Stimulate the economy by investing more in the students and new graduates... Lets begin with student loan forgiveness. We are the ones that will take this country to the next level with more innovative, stimulating and fresh ideas for growth.

    April 1, 2009 at 12:40 pm |
  39. Dale

    What is the matter with all of you people - you made a decision to borrow money and now you're crying because you can't pay it back??? Just like the thousands of people who borrowed on homes they couldn't afford that got us in this mess in the first place.

    I, along with thousands of other students, worked and payed our loans back. Just because you didn't land the six-figure career you were hoping for don't try and pass your bad decision making off on the rest of us. (Come to think of it, maybe your lack of decision making skills are the reason you did not get the six figures you were dreaming of).

    Buck up and face your responsibilities. It's nobody's fault but yours...

    April 1, 2009 at 12:40 pm |
  40. Jeremy

    This may sound unbelievable but I have massive student loan debt and I graduated in 1982. That's right, 1982. In the height of the recession (back then) and in the heart of the midwestern rust belt. I struggled for years with low-paying jobs, even did a stint in the army, and watched my loans go into default, and was hounded by threatening collection agencies (and still am). I've been the victim of various frauds over the years by companies offering to put me on a payment plan, only to have none of that money applied to my loan balance. So look out for these scams.

    I agree that this should be a better-known problem than it is. All the attention is going to mortgage failures. It's true that mortgage lenders often lied, but so did colleges when they told us how much more money we'd make by being college graduates. It's this crushing, endless debt, constant fear of collectors, difficulty getting credit of any kind, home ownership being virtually impossible, all because of student loans, that makes it impossible to become a full "adult" in a sociological sense. Then the dirty financial bastards get huge bailouts for doing nothing but gambling with other peoples' money. This is really a crime against humanity.

    And of course our parents' generation doesn't comprehend this. In their day a college degree-in any subject whatsoever-was a guaranteed ticket to a good life. They still can't comprehend that bus drivers make more than college graduates even with graduate degrees.

    April 1, 2009 at 12:40 pm |
  41. Brant, NJ

    I have a dual perspective on this:
    1. I did attend a public school for a BS and PhD, and worked and TA'd. Twelve years out, and I'm still almost $50k in debt for student loans. The choice of private school does come with a higher pricetag, but graduating from anywhere debt-free is very rare. Anyone who thinks that they can work full time and attend graduate school is in for a very painful wakeup call. Unless someone can figure out how to function without ever needing to sleep, there just aren't enough hours in the day.

    2. I am an educator. I teach at a community college, so I deal constantly with students who chose not to go away to college for a variety of reasons. The nationwide graduation rate for part-time students is abysmal, since paying the bills often (especially now) becomes more important than finishing the degree. As a result, the bigger picture of a coherent education suffers. If you take 5, 6, or 7 years to finish a degree, you've lost out on the connections between the courses and topics.

    The loans allow full-time students to focus on their education in a way that a part-time student cannot. For that reason alone, the student loan system is crucial to the future of our students and our country as a whole, since the large majority of jobs now require some college education.

    April 1, 2009 at 12:40 pm |
  42. Eric

    I am a professor at a four-year state-supported university, and I am responding to Rev. Jackson's proposal rather than Samantha's personal situation. I am bothered by the immense amount of money wasted on students who flunk out (many of whom don't belong in college in the first place). Therefore, I would like to see loan (and grant) amounts begin at a modest level for freshmen and increase as the student progresses. Default rates increase when students flunk out after a semester or two and still don't have the skills needed for jobs that would allow them to pay off the loans.

    April 1, 2009 at 12:40 pm |
  43. Zack

    I am about to graduate from college myself. I have no debt, nor does my wife. She received a full ride scholarship so that was great for her. I couldn't get any so I decided to watch my costs as I went. I do, however, understand the pressure that some family members and school guidance councilors put on students to go to expensive out-of-state or private colleges. I hope students become better educated about the benefits of community college or local state universities. May be Yale and Princeton have great name recognition but guidance councilors should let students know about other options as well. I attended community college to save money and then transferred to a religious university which charges about the same tuition as a state university. My total school costs total around $18,000, which I have paid as I went. It isn't so shameful to show fiscal responsibility and young high school students need to be told that by their schools and parents.

    April 1, 2009 at 12:39 pm |
  44. Bill in PA

    I coaxed all three of my children to go to community college for the first two years. After all English 101 is English 101 whether you pay 500.00 a credit or 36.00. Now that they have all graduated with BS degrees and their student loan payments are less than 200 a month they thank me. It seems there is a lack of common sense displayed by so many of our so called future leaders.

    April 1, 2009 at 12:30 pm |
  45. TexAnnie **

    I'm a parent of two kids who graduated with some serious student loans. One went to a private university–the other went to a state university but went into a field with less income potential. Our advice to them and to every other student out there– DON'T BORROW MORE THAN YOU FEEL YOU WILL BE ABLE TO COMFORTABLY RE-PAY. How tough is that to understand??
    They both worked at part time jobs during college and they both searched HIGH & LOW for every available dollar of scholarship money while in school. (Some of them were only $100, but every dollar counted.) You have to be responsible for your own actions. My kids are still paying off their loans many years after graduation, but they're doing it without whining that somebody needs to forgive them.

    If you make the debt, be prepared to pay it back. That's part of becoming a responsible adult.

    April 1, 2009 at 12:29 pm |
  46. Jason Larsen

    Thank you, Samantha, for bringing this very important issue to attention.

    April 1, 2009 at 12:29 pm |
  47. Robert

    I am in the same boat. Just finished a Master's degree since I couldn't land a job paying more than $9.00/hr with my Bachelor's after over a year of relentless trying, and am now off to a fully funded Ph.D. program knowing that 90,000 in Master's loans (when interest is factored in) awaits me post graduation.

    The whole "you chose to go a big university rather than save and go to a community college" argument is clearly from someone that hasn't lived in this generation. We have had the concept – "you MUST go to college in order to succeed" crammed down our collective throats for the last 20 years and now there are no jobs awaiting us when we graduate. The value of a degree is declining because of this mindset, coupled with the reality that nobody is willing to retire due to an ailing economy.

    Business owners getting bailouts because they FAILED is a slap in the face to America's youth who get no bailout because we SUCCEEDED in attaining a degree and did what we were “supposed” to do.

    April 1, 2009 at 12:29 pm |
  48. lucy

    Don't feel bad. When I retire in 65, I will still be paying off my student loan. Now, do you feel better?

    April 1, 2009 at 12:29 pm |
  49. Candice

    I am about 11 years out of college still paying on my student loans. I have a son who has graduated and that I co-signed for on his loans. He is struggling to find work that is full time in the field he has finally decided to go into. We have been trying to work with the loan company on forebearances or whatever to get us by till he works full time. I had expected myself to be in a much different place financially by now and to maybe have helped by taking on at least one of his loans-but that has not happened either. The student loan company is not being helpful and when I recently went to buy a decent car so I could continue to work I found out that they had hit my credit rating by 200 points because of his loan difficulties- even after I thought we had worked something out.

    I am not saying I want the loans to be forgiven- we asked for them, we need to pay them back- but there should be a more reasonable way to work out repayment in this economy. We aren't denying the loans in any way-but the loan company should not have done what they did to me, and will find people will work harder towards repayment if they are treated fairly in difficult times.

    April 1, 2009 at 12:29 pm |
  50. Mark

    Can we at least remove the income cap on student loan interest tax deductions? As of now, you can take out a home equity loan (assuming you still have equity in your home), pay off your credit card bills, etc., and deduct the interest regardless of your income. However, you can't deduct any interest on your student loans if you make over a certain amount. I don't understand the purpose of the cap. Tax deductions are intended to encourage people to act a certain way, do we not want to encourage education as much as home ownership?

    April 1, 2009 at 12:29 pm |
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