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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. Kristine

    I couldn't agree more. I have been out of school since 96 and still owe a little less than 20k on my loans. Unfortunately, I consolidated my loans about 1 year after I graduated and consolidated at almost 8%. In the past few years new loans were being given out at a rate of 2.9%. Do you think I could refinance my loans? No. Once you consolidate, you are screwed. You can refinance homes and other loans but not your student loans which is so unfair.

    April 1, 2009 at 12:53 pm |
  2. R Green

    The students today are paying for the sins of those who attended college in the 1960's and 70's. How many students racked up huge student loans and tnen defaulted or had them discharged through bankruptcy. Student loans are one of a very few financial obligation which can not be discharged through bankruptcy because of past abuse. I understand the author's feeling of entitlement and her need to have someone else pay for the benefits she has received. My daughter will be financing he education the same way I did–with the G.I. Bill.

    April 1, 2009 at 12:52 pm |
  3. Megan in VA

    I am torn in my response. As an employed person, with a bachelors degree, I sympathize in the repayment of loans. I walked out of college with about 20k in student loan debt, subsidized and unsubsized federal loans. My payments are small(about $300 a month) and I have off about 8k in 3 years. With that said, I am currently in graduate schoo, working full time, and have an employer which is covering about 90% of my masters degree.

    The student loan system is screwed up. There is no denying that. However, you made a choice to go to private school and work in an industry with low starting salaries. Whether you were educated about those choices is another matter. My parents told me early on they would help where they could and that I would taking out loans to cover the remainder of my college bill. I chose a state school for both undergrad and graduate school, so I would not be in your situation.

    Since finishing undergrad, I have gotten married, bought a condo(with my husband), we paid off his student loans and his car loan. It is possible to do, its called not borrowing what you can pay back, and not expecting the government to help you out.

    April 1, 2009 at 12:52 pm |
  4. rlsrd

    Kimberly;

    What???? I've been reading most of these posts and not very many are spouting jealousy over her getting into a top college. Their just saying you made a decision now your stuck. This good college bad college stuff is rediculous. The only difference between colleges are the business contacts and job networking at certain schools. State schools tend to be lacking in this aspect.

    Colleges charge what the market will bear. If the government gives more aid then the colleges raise the tuition. If enough people turn them down then they will have to lower costs. Simple economics. The problem is the feds don't deal in economics they deal with lobbyists. Yes, the colleges have lobbyists.

    Now did Samantha get her job because she went to said school. maybe, maybe not. She is in her field, what else got her her job. Her articulation, her presence/demeanor, her looks, yes even though that's not PC. Will her education propel her to make as much as money as Katie Couric. But wait Katie is an alumus of Univ. Of Maryland. Bill Crosby Univ. of Mass.

    To everyone: If your the type of person to succeed you will. The school doesn't make you. You make the school. Do not overpay.

    April 1, 2009 at 12:52 pm |
  5. Jan

    Imagine being at the other end of the spectrum, Samatha. I am 59 and lost my teaching position. I have faithfully paid my student loan for 22 years and now have no income. I'm also three years short of social security. I had planned to work until I was 65 (or older if I was still healthy). I live in a rural community and there are no hourly jobs available. So, for those who say we shouldn't have taken out a loan if we couldn't pay for it, I had every intention of it and have been caught in this recession with no recourse. Thank you for speaking for all of us!

    April 1, 2009 at 12:52 pm |
  6. kat

    I KNEW in high school that my parents couldn't afford my college tuition, so I purposely chose a school (not my first choice) that offered me a scholarship. What I DIDN't know was that my dad would suffer several strokes, rendering him completely disabled, and that my family would plunge into financial disaster as a result.

    So I now have student loans. Alot of them too. I pay them faithfully every month, but I would be willing to do volunteer work on the side or something for some gov't forgiveness. Now, I'm facing a probable lay-off, and I'm thinking of switching careers, but am loathe too because I don't want more loans!

    I don't think it's fair to criticize people who do the so-called "right" thing and ask for a little assistance when those who had no problem screwing the system are getting handouts. I appreciated this article and agree with it.

    April 1, 2009 at 12:52 pm |
  7. Dave

    The reason this issue will not be addressed is that the people holding the loans are trying to do better for themselves, getting an education and trying to establish a career. They want to be self sufficient. Help is for those who expect the rest of us to take care of them.

    April 1, 2009 at 12:52 pm |
  8. Jason

    I think where government intervention needs to come in on student loans is looking at where loans are being given. Some professions obviously don't provide the same opportunities as others, and the opportunity to extinguish the loan debt just is not as great. In a way just as banks allowed people to borrow way beyond their means to buy homes, the government and other student loan bodies have allowed students to borrow far beyond their means as well.

    Also the way tax credits work with student loans is completely laughable. The government allows you a tax credit of $2,300 (I believe this goes up soon) on interest you pay on your loan yearly. The amount of people who pay FAR more than this yearly is very high. Why is there not a tax credit for a percentage of what you pay in interest or have the credit be graduated based on your tax bracketing?

    Lastly with the change in bankruptcy laws it makes no sense that the interest on student loans is as high as it is. Essentially student loans are now as secure of a loan as there is. Lowering the rate to match that of the banking industry might be a bit extreme. However if this administration wants to be serious about future education it has to address the issue of the continually rising costs of college education, with loan interest being a part of that cost.

    April 1, 2009 at 12:52 pm |
  9. Irene

    This is such an important issue. New graduates should be the first recipients of stimulus money. They are the ones who, were it not for huge student loans, would be out starting families, buying homes, contributing to the economy. But as it is, they are inundated in loans because that was the only way many could go to college, and now they can't even THINK about buying a home, or even a car. Help them!!!!n That will help all of us.

    April 1, 2009 at 12:52 pm |
  10. Jay in NYC

    I'm on the fence on this one. I really am hurting because of my $40k in student loans. At my current salary I am able to pay my bills on time (although there is not much left over) however I work in finance and my company has just announced that my department is going to a 4 day work week instead of doing more layoffs. This 20%+ paycut means I have to leave my job and move back to the small town I come from and wait out this economic disaster...

    I don't believe in bailing anyone out but if we're going to be doing it why wouldn't we bailout those who sought a better education when we are bailing out those who bought houses they coudln't afford? An education isn't a luxury, its an investment in your future and the future of our country.

    What they should do is change the rules for putting your loans in forbearance so those who are underemployed are eligible as well.

    April 1, 2009 at 12:51 pm |
  11. MarcR

    I worked my way through a local community college and university and took 7 years to get a 4 year degree. I went on to get 2 Master degrees, one using loans and the other on scholarship. I chose fields that I thought had a high potential for employment, the sciences and engineering, rather than what I thought would be the most fun. School was always an end to a means, employment, not a time to find myself or pursue pie-in-the-sky careers. I have never not been able to find employment and I paid my school loans off.

    Do I feel sorry for anyone who is burdened with loans because they chose an expensive school or a discipline with little potential for employment - Hell no! Life is full of difficult choices and we must take responsibility for the choices we make.

    April 1, 2009 at 12:51 pm |
  12. Patrick

    I borrowed 24K on a BS degree. I now owe almost 180K because of interest and penalties. At almost 50, its seems that unless I win the lottery there is no way that I will ever be able to pay these loans before I die.

    April 1, 2009 at 12:51 pm |
  13. Anon

    While I have no objections to the changes proposed by Rev. Jackson, they're not going to fix the writer's basic problem: going to an expensive school with plans for a low-paying career means difficulty paying off loans. This is why I worked all during college and grad school, including fulltime in the summers, and never took out the maximum in loans for which I was eligible. I also did well enough in high school to earn scholarships and admission to a top school with generous financial aid, and I chose my grad school based on my plans to go into a nonlucrative field. While it has been a struggle, it has been one I chose and planned for, and my grad school loans will be paid off at the end of their original, ten-year plan next year. Samantha made her choices, and that commenter who is planning to go to grad school just because the economy is bad will be making his or hers. Why should taxpayers as a whole pay for their lack of planning?

    April 1, 2009 at 12:51 pm |
  14. Joe

    There are families that have the means to afford a good future for their children and then there are families where their children must struggle for a good future and struggle hard.

    The American dream can only be accomplished if you work hard... unless you're born to a wealthy family.

    April 1, 2009 at 12:51 pm |
  15. Steve

    I feel for your situation and the situations of others who have posted on here regarding their debt burdens. That being said, for individuals who seemingly attended prestigious schools, it seems like you lacked some basic fundamental understanding of what you were signing for. Sometimes the educated are the most stupid. I also went to one of the best (and most expensive) private schools in the country, however I strongly considered the financial aspects of my financial aid package when making my decision. I also chose to work 25 hours/week during college to defray some of the cost. Finally, I also chose a field where I could pay back my loans.

    Now, I had considered going into education, but realized that the salaries in that field would not support the repayment of my loans. I have sympathy but no understanding of individuals who obtain six figures of debt for the pursuit of careers that pay less than $50,000. Poor decision making, and now unfortunately you pay the price.

    April 1, 2009 at 12:51 pm |
  16. BooHoo

    This story is the same as the mortgage mess!

    overpriced education in a wrong job market = buying an overprice house in Phoenix in 2005

    April 1, 2009 at 12:50 pm |
  17. JMScott

    I couldn’t agree with Samantha more when she says that we need to better educate today’s high school students. Take on loans, but you have to understand the consequences. I went to school for an education and to grow and become the person I want to be – I did that and I would do it again. I would be smarter though. More scholarship applications, work at the school, try to become a resident assistant (aka free, room, and board). In this market and economy, students declaring majors need to be aware of the adversity that they will face when they graduate. Do your research and find jobs in fields that are and will be in demand. I have a degree and job in healthcare and know that the market is here to stay.

    All that aside loans are a tough pill to swallow. Do I get jealous when I see friends with no debt who are buying first homes? Yes. Do I get down when friends takes weeks off to travel Europe? Yes. Do I know that I could do those things as well if I didn’t have student loan debt? Yes. It is then that I realize though that I was lucky enough to go to college. Because of college someday I will have my turn – it may not be tomorrow, but someday and for that I am grateful.

    I have come to terms with my debt because without having gone to college the opportunities I would have in life absolutely would be limited. I don’t think you can put a price tag on that. For that reason, I have tried to view my loans as an “investment” rather than debt.
    Here’s to hoping that my “investment” will be paid off by the time my kids go to college!

    April 1, 2009 at 12:50 pm |
  18. Dan

    Hey here's an idea, lets bail out everyone and start anew. Let's not make any consequences for making bad choices. My wife and I had a combined $160,000 in student loans in November 2005. I don't work and she is obviously in her third year of work. We now owe less than $68,000. We don't go out, we bought affordable cars and I cook and watch the kids. It can be done. I made a choice to take out loans for a college education and I have to pay for what I got. Stop crying and suck it up. Same with home buyers who bought homes they couldn't afford. I am tired of people wanting to get a free handout. My parents didn't have money and my wife's didn't either. So we did it the hard way and the right way.

    April 1, 2009 at 12:50 pm |
  19. George Vargas

    We as a nation and as people need to live within our means. When looking back 15 years or so, I too had the choice of going to an expensive private school and taking up massive amount of debt. I chose the less risky option of going to a less reputable school. I graduated with a modest debt. I paid them off. I did not go on a spending spree until I paid off my student loans. That meant having to wait for another three or four years to get my first new car, not going to two or three expensive vacations every year etc. Yes I did have a boring life. But I am not losing any sleep over unpaid student loans or a heffy mortgage. A good number of people that I know did the opposite. They had their good times. They enjoyed their new BMWs. They had their fancy vacations in Europe and elsewhere. Now they all want tax payer help to bail them out of their past misdeeds or stupidity.

    April 1, 2009 at 12:50 pm |
  20. William

    Hey Samantha.... Im going through the EXACT same thing....I owe about $103,000 in debt for going to a private art college in NYC. Luckily i have a job, but the pay is only enough for me to keep my head above water). Just saying the personal responsibility argument is oversimplifying... There are so many factors that plays into this. I was an 18 year old kid (23 now) when i was excited about going to college, and I wanted to go to the best school that I though was good for me which is why I chose the school that i did. But the conditions I am from.... A single mother household.... i'm very poor and didnt even realize it until now...and we didnt have cash to pay the tuition...and scholarships are really scarce..but we had good credit. Another thing is that college is getting exponentially more expensive and it is impossible for household income of the average family to keep up with the rising costs.... which in effect.....in order for the average family to get their kid(s) to go to school...they will have to take out loans...which i think i giant trap now that i look back on it....because essentially you will be paying and consolidating for 20 years....all for a 4-8 year education. So i expect to see the number of student loan defaults rise greatly, just like credit cards and this will be the next problem with the private lenders.....the crisis is far from over...the system is flawed and needs to re-vamped...because if you dont have a college education nowadays.... you're locked out of alot of things...except the military.

    April 1, 2009 at 12:50 pm |
  21. Sverre

    Thanks for the great editorial.
    Congratulations to the minority of college graduates who have never taken out a loan for their education. You can now afford to help stimulate our economy.
    But the student loan crisis is not the result of millions of high school graduates exercising greed and disregard when choosing a university to attend. At 17 and 18, the American Dream, currently on life support, is sold to us by our parents and the media. 'Go to college, have a better life.' The reality is that higher education is necessary just to get by in a global economy. A high school education is a necessity, but so now is post-secondary education. Unfortunately, it's really expensive. We're all hard workers, savers and spenders. Many of us live in small apartments, drive economy cars and work 60 hour weeks pursuing the original 1950's-style American Dream.
    Were our parents working this hard with so much debt when they were our age? This dialogue needs expanding. It's time our nation and our politicians recognize that the Dream has changed and that it now comes with a hefty price tag.

    April 1, 2009 at 12:50 pm |
  22. Marc

    Sam, although I empathise with your dilema, I too was saddled with almost six figure in loans after college and law school. Paying them off in 13 years was a proud moment. You made your bed....students should not be absolved of their repsonsibilities becasue they either did not read the "fine print", were too young to know any better, or simply cannot afford to repay. If that is the case, I want my $100,000 back; I am certain that my wife would put it to good use.

    April 1, 2009 at 12:50 pm |
  23. jean

    This is just the tip of the iceberg of issues facing our generations. I graduated from college ten years ago, in an economy that was already on the decline. By the my hard earned bachelor's degree wasn't worth the paper it was printed on. Most employers were already requiring a Master's Degree.

    So on your own, trying to find a place to live that you can afford while working minimum wage or little better with no insurance just to have a job and pressing to pay student loans, rent, utilities and the like. Ten years later I am still paying off the debt.

    The cost of living has skyrocketed, interest rates are astronomical, and of course the unpleaseantness of being diagnosed with a chronic illness (automimmune disease).

    The truth of the matter is that:

    1. The government is predominantly over 50 men who come from prominent "upper class" families in the first place. They don't have a clue what struggling is about.

    2. The top 1 or so percent of our population who insists on paying more than I pay for a month's rent for a bag or a pair of shoes that keep driving prices higher. I mean they can always delcare bankruptcy or get alone on their celebrity or family name alone and still get to kepp the Jimmy Choos.

    3. The overall view that one should be awarded for stepping on the backs of others and using the consumer to make profit. Ever try to figure out what all the extra fees are on a utility bill or better yet ask someone from the company to explain it to you? Or how about paying a fee for EVERYTHING. $1 for air; you want to apply to live here; Application Fee, Hold Fee, Move-in Fee, Deposit Fee, Rent. You want to workout here? Registration Fee, Card Fee, Monthly Access Fee, Locker Rental Fee.

    These things have created our current economic situation

    April 1, 2009 at 12:50 pm |
  24. Tim

    Many young college students do find the time to get informed on the loans they are signing for and "do the math" before they graduate with debt that they then claim is too much. Many do one or two years of community college in order to make it more affordable. Its an unfortunate situation that I'm living. I have four children all hitting college within the next 5 years and the cost is daunting and rapidly increasing. My first two both have student loans, have applied for scholarships and work 20 hours a week...and they are making it work. Before they applied for college, we looked at the careerfields they were interested, the type of salary they might expect and what type of loan payment they could afford when they graduate. It's not that hard, and it helped bound the choices.

    Too many young students sign the loan paperwork with no understanding of what it means. That's not the fault of the system.

    April 1, 2009 at 12:49 pm |
  25. Nick

    Once solution to this would be to join the Armed Forces. The new G.I. Bill covers almost all expenses and it is based on the highest tuition in your state.

    Unfortunetly you puut yourself in this situation. There are many other options than to attend a private college. This being said, I would tell you to find a straw and suck it up.

    April 1, 2009 at 12:49 pm |
  26. Dave

    I'm in a similar financial boat to many of the people commenting here(~$75k in private school loan debt), but this 'reduce the rate' suggestion is clearly more stopgap than solution. The only reason I'm in this position is because lenders were actually quite generous with me – it's my college that set the cost of attendence so high. Higher education cost has grown faster than inflation, GDP, household incomes, and even healthcare over the last 25 years, with little opposition and essentially no pressure to control costs. Meanwhile the larger endowments have grown to the billions and tens of billions, all tax-free.

    Protective loan terms would be nice for me but might just reduce the amount that lenders are willing to finance in the future – bad for current students. Protecting *schools* from defaults gives them even less incentive to rationalize their pricing.

    As some said, it is the case that choosing to borrow for private school tuition is choosing deprivation in the early part of our careers. But don't fool yourself into equating mortgage, auto, and credit card excess with student borrowing – the whole principle of student loans is that, at the point at which they are taken, they are unaffordable. You borrow against future income in order to qualify for that future income. It's risky, but it's not excess.

    April 1, 2009 at 12:49 pm |
  27. Jennifer Kirley

    Some facts:

    1) U.S. post secondary education is the most costly anywhere.
    2) We do a poor job of making sure our kids have personal finance training.
    3) The workplace desires ready-to-work college educated people.
    4) Salaries are adequate for cost of living and paying back the loans only for limited professions – not teaching unless you get on one of those loan forgiveness programs.
    5) You're more likely to get a prestigious job if you have a private school diploma – Ivy league grads usually earn better money.
    6) U.S. workers are competing against workers (like India) whose college is heavily subsidized. As a result, wage pressures make it harder, not easier, to pay the loans.
    7) Almost every single policy maker and legislator is not recognizing #1-#6.
    8) Starting off in community college can help – IF the classes will adequately prepare you for the higher level schooling when you switch over.

    Some fallacies:

    1) People who get expensive schooling are irresponsible or foolish: who can tell what they will be able to afford to pay 4 years+ after they enroll?
    2) State universities are just as good as private schools. Just ask the recruiters.
    3) One should work one's way through school. This could be true if one goes to a state university, draws out the program, has no other responsibilities etc. But for the most part this model is outdated.
    4) Everyone should know what they need to know about loans, to make a good decision. (The credit market is a shark tank)
    5) Schools have your best interests at heart. (One does need to know enough to tell truth from hype)

    Good luck to you. This is not going to change quickly.

    April 1, 2009 at 12:49 pm |
  28. inat mivea

    good article. I do not believe in bailouts – neither for companies or individuals. HOWEVER – I strongly believe that if individuals are being bailed out of mortgages they CHOSE to sign then students who cannot afford their loans should be bailed out as well. Better yet, just forgive those loans for college GRADUATES. They'll use the money saved each month responsibly – maybe even use it to buy a house. It is a win/win.

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

    I see a lot of comments on here regarding public institutions, however attending a public institution as an out-of-stater will cost you almost as much as going to a private school. I was in this boat a few years ago, and with a grant from the private school, it actually cost me a few thousand LESS a year to attend the private university vs the public out of state school (the in-state system lacked a good program in my area of study), and I still ended up with about $90,000 in student loans. Student loans, in this day and age, are basically unavoidable. Sure, you can come out with a high amount or a low amount, but I only have 1 friend who made it through without loans.

    April 1, 2009 at 12:49 pm |
  30. Tony

    At first, I was going to say "no" to any loan bailout, you made the choice to take the loans and go to a private college so you must accept the consequences, however, you did do the smart thing and continue your education. My remedy would be to forgive the loans only to the amount it would of cost to go to an in state college as this would have been the prudent decision, it amazes me that the smartest kids make the dumbest decision to go to an over priced over hyped private college and end up with HUGE LOANS when the "average" kids go to a in state school and get there degree at small fraction of the cost.

    April 1, 2009 at 12:49 pm |
  31. Chris

    The student loans aren't the problem, the cost of college tuition is. Maybe if all of this student loan money wasn't available colleges would have to start charging tuition that is actually affordable. Instead, colleges charge whatever they please knowing that students are willing to go into massive amounts of debt to pay the cost of attendance.

    April 1, 2009 at 12:49 pm |
  32. Kyle

    This debt is crippling. I'm sorry Stacie but many fields don't have the earning potential to pay off the loans you need to take out in order to get a job in the field or cannot be completed at the community college level.

    The other problem is that some fields require more paying of dues than others. Social work, journalism and my own field (higher education) are just a few. As a college professor I can tell you that there are many fields of study that won't allow students to "work their way through". The arts, hard sciences and many academic research degrees work this way. Business majors, general studies and skill training courses tend to lend themselves towards work/study but not always. I have many students who are regularly torn between coming to work and coming to class.

    The other thing that is sacraficed when students work too much is "the college experience". Taking courses outside your major, attending seminars, participating in student groups and activities. These experiences are the first casualties of your proposed solution. I

    April 1, 2009 at 12:49 pm |
  33. Scoop

    I used to provide career counseling at my organization and my first question to those seeking counsel was: What is the ROI? Meaning, if you pay $50K+ for a degree to get a $15 an hour job, you ought to decide if that makes financial sense. Another note about student loans, you don't have to take every penny that's being offered – I love it when folks take the extra (unsubsidized) funds to "live" on and then think that money shouldn't have strings. It's exhausting to hear people doing exactly what they want and then complaining when everything isn't utopia when all is said and done. No one is entitled to anything. I completed my Master's degree and have NO student loans because I made responsible decisions – state university and took classes as I could pay for them – 1 at a time, so apparently I'm in the minority of those who understand economics – buy only what you can afford. THAT my friends is the only solution to getting out of the mess we are in...

    April 1, 2009 at 12:48 pm |
  34. Charles L. Shaw

    I just can not help but to mention that if it costs that much, then why go? The costs of college will not come down if we as consumers keep paying the over priced cost. I have placed three of six of my children into college two graduated, one with debt with a ME and one who made it through by working full time and school took longer but no debt. My thrid child is in her Junior year and is getting slammed, we are paying about 800.00 a month to do our best to get through to that degree, but she will have debt as well. At what point does the debt not make the benifit real, I say we are past this point.

    April 1, 2009 at 12:48 pm |
  35. Upstate NY

    Bailing out graduates with student loans would be a better investment than bailing out Wall St or AIG turned out to be. You know how young people love to spend any kind of disposable income, and that kind of spending is good for the economy. However, that doesn't mean that anyone should be allowed to run up a huge bill in student loan debt, and then expect to be bailed out. Bad decisions or not, we have to face the consequences of our choices.

    Sorry, Sam. I hear where you're coming from, and can empathize a little, but your choice was your own. Whether you knew what you were choosing or not, yes, you chose a hard life of debt. If starting salaries in your field were known to be low, and you knew the yearly tuition and dorm costs, then you probably should have found a cheaper college to attend.

    It would be nice to see the government waive at least a portion of Direct Federal Student loans. It would certainly alleviate a lot of financial pressure on indebted persons, and provide immediate results back into the economy. Like I said earlier; more disposable income often means more spending by consumers. Houses, cars, TVs, vacations, etc--all factors in the big scheme of things.

    April 1, 2009 at 12:48 pm |
  36. CAPPipe

    Yes, student loans were a choice but there is one thing everyone is forgetting.

    The money the government is giving out is coming from our taxes.

    I want my money to go to my student loans. I should get the choice.

    April 1, 2009 at 12:48 pm |
  37. Patti

    I am a mother paying off her daughters 2nd student loan. She is a teacher and in order for her to advance she needed a masters. As you know teachers do not make a whole lot of money. Has anyone out there heard of a program for teachers that if you have already paid 10 years on a student loan the payments after that are forgiven?

    April 1, 2009 at 12:48 pm |
  38. Travis

    I do agree that something needs to be done, but I don't agree with bailing people out. When the rich people get bailed out, everyone cries and says bailouts are wrong. When middle class people are offered money, then everything is right in the world. That's a double standard and we would all be well to try to keep our focus on the situation, not what would help one class of people.

    The main problem with student loans is that the people who have all the money aren't paying theirs. Make all the doctors, lawyers, etc. start paying their loans and have their interest rates cap at a certain %, then any % over that would go to lowering the interest rates of smaller loans.

    April 1, 2009 at 12:48 pm |
  39. Robert

    The problem that I see is that some students think they have to go to a private school to get educated. This is not true. If the student wants to have the prestige and bragging rights as to which university they graduated from then they deserve the consequences. Sounds like now they don't want to pay for their higher learning anymore. it was good and O.k. while they were at the university but when they hit the real world........POW............they ask " can someone bail me out". It is no different than all the other bailouts. Put your higher learning to work and get going with your career. people are not going to hand it to you just because of the university you went to.

    April 1, 2009 at 12:48 pm |
  40. Allison

    Sam,
    I graduated from graduate school with debt similar to you. I, however, was able to consolidate my loans, and, while my monthly payments are high, they are doable. I discovered that some business students at Harvard started a loan consolidation business (www.graduateleverage.com) in which they group student loans and sell the loans which enables students to receive lower interest rates than Access Group or other student loan providers. I would check them out.

    April 1, 2009 at 12:47 pm |
  41. Nichole

    Thanks for posting this, Samantha.

    It's extremely unfair to those who weren't fortunate enough to get their college expenses covered by their parents. We're forced to take out student loans, accrue a ton of debt and then have to pay interest on that debt. I have no problem paying back debt, obviously, but the additional interest makes it unbearable. How are we able to build a strong foundation for ourselves when the majority of our paychecks are going back into student loan debt to avoid paying interest (or even just to make the minimum payment)? It sure is tough.

    April 1, 2009 at 12:47 pm |
  42. Selah Brown

    To those of you who have no sympathy because you did it all the right way. Aren't you special. No one in this position is asking for a bail out. I, too, have large student loan debt that eats up a large chunk of my monthly income and will go with me beyond this life time.
    What we are asking for is a company willing to work with us and not feed off our desire to get a higher education. Sallie Mae does nothing to help people honestly having a hard time paying their debts...in fact, they often place people in a ripe position for Default. I think giving us the same interste rate th banks has is a totally fair optin and will nt only allow us to pay our loans out and no be forced into default or poverty, but will allow us to use the extra money to stimulate the economy buying giving us some money to buy homes, clothes, etc.

    I will reserach Jessie Jackson's plan and see what I can do to help put pressure on Congress to deal with this issue.

    April 1, 2009 at 12:47 pm |
  43. Jen Class of 83

    I have two boys in college – one is at a private university and one is at a state university. I went to the University of Illinois and graduated in 1983. My tuition, room and board for an in-state student was $2500/year. I was able to work my way through school and graduated with a student loan totaling $3,000. Those days are gone! My husband and I started saving for our boys' college education the day they were born. Unfortunately, we did not foresee the rise in college costs to over $22,000 per year for in-state tuition and close to $50,000 a year when all is said and done for a private education. We raised our sons on the motto "work hard and you can go to any school in the country". Sadly, that was not the case because the middle class gets screwed when it comes to financial aid from the Federal government. The private university my oldest son attends has given him more aid, grants and federal subsidized loans than the total cost a year in a state university because of their large endowment. Yes, they look at need but they also look at the student as a whole – how much can and will they contribute to society when they graduate? The amount of loans my boys will have when they graduate is mind boggling. My husband and I will help them pay the loans, but the word "retirement" has been taken out of our vocabulary. Personally, I can't think of a better investment for our family to make. Too bad the federal government doesn't agree. Something's gotta give or only the elite will be able to attend college – at any level, at any cost.

    April 1, 2009 at 12:46 pm |
  44. John

    So true...

    I graduated and got a great job out of college in tech. This was right before the 2001 recession that affected tech people greatly, but not other people.

    At that time, I could no longer afford my loan as I lost my home, my job and everything else.

    My life has never been the same. I am unable to get a car loan, unable to qualify for a mortgage, unable to get a cell phone plan (that isn't prepaid) and unable to even rent an apartment! Can you imagine??

    All this because some lenders fooled me (as an 18 year old kid from the country) into thinking that my job out of college would more than pay for my student loans with ease!

    I made the mistake of going to college and getting student loans to pay for it when I had no other payment option. I also worked 30 hours a week through college and 40+ hours a week during the summer and during spring and winter break to pay as much as I could for school. The rest was student loans.

    My gripe? I was taken advantage of by a school system that assured me my future earnings would easily pay off these student loans. Ultimately, after that 2001 recession, my life was over. No longer able to buy cars, rent apartments, buy houses, get cell phones, etc... many people have fled this country. Sounds like a better idea all the time.

    There is no way out of these student loans we were tricked into taking. I don't even know how much I owe anymore. The numbers just kept piling up with penalties and interest and such.

    What am I doing about it? NOTHING.

    If everyone stops paying their student loans, at least it might sent a message to the FOR PROFIT companies that administer and make big $$ off of them.

    Me? I'm probably leaving the country. What's left here anyway?

    April 1, 2009 at 12:46 pm |
  45. libby

    agreed! Just finished graduate school with private loans of $100,000 (adjustable rate). I feel like I will never be able to buy a home, I already have a mortgage payment! Any bills to forgive debt only apply to federal loans...

    April 1, 2009 at 12:46 pm |
  46. Johnism

    Just like Health Care, Education should be a right. Health Care and Education prices are ridiculous!!! Class warfare is here and its real people. Banks and Colleges have "raped" my generation. They won't even have paid off there student loans by the time their kids have to start paying back theirs. By the time my children are ready to head to college they won't have a chance to afford it. In 20 years instead of paying back $120,000 in student loans it will be closer to $400,000 for a 4 year degree. The only way you will be able to get a degree is to have rich parents. Only the rich kids will get good educations and the jobs of their choice since there wiil be no competition. The balance between the have and the have nots will continue to favwiden. It amazes me that the rich keep taking at the expense of everyone else. Where is Robin Hood when you need one? If we continue to allow genereations of kids to be saddled with debt they will never repay, parents will be telling their children not to goto college to have a better quality of life.

    April 1, 2009 at 12:46 pm |
  47. MarkD

    College is overpriced for most majors. Most majors never repay the time and money invested.

    Companies were sued for using aptitude tests, so they started insisting on college degrees for jobs that really didn't require one. This allowed schools to charge ridiculous amounts of money for a degree. We paid it, so we (and our kids, I'm a big payee here) could get jobs.

    Well, if they became engineers or doctors they did OK, but social sciences and liberal arts majors spent way too much money for degrees that honestly don't pay much.

    Philosophically, I'm against all the bailouts. If we must bail anyone out, I'd rather it be the young. They get a raw deal tax-wise already.

    Caveat emptor, kids. That's "buyer beware" in case you learned no Latin with that expensive education.

    April 1, 2009 at 12:46 pm |
  48. Joshua A Palyo

    I feel your pain on the loans, and I think that it's ridiculous what people have to go through to get an education in this country. There should be a much, much better system in place. That being said...

    There's always ways to make it work. You could have joined the military and gotten a lot of money for school for example. That's exactly what I did. In essence I had to sacrifice 9 years of my life to help with school. That's what I had to do, and that's what I did. Please, don't complain about your decisions about school. There were options that you could have pursued that would have significantly reduced your debt. You're an adult, act like one.

    April 1, 2009 at 12:46 pm |
  49. Sheri

    YES! i wrote to the president, and my state representatives about this very issue! this needs to be addressed!

    to those of you who say "you chose the loans" – yes, i did. but i did NOT choose to divorce my husband (it was our combined incomes that would have made loan repayment possible) or to lose my good-paying job!

    we need help! i have $80,000+ worth of principal and interest and i will NEVER be able to afford to pay this. right now i am lucky i can manage my rent and normal living expenses!

    April 1, 2009 at 12:46 pm |
  50. Maya

    Yes, the author may have chosen to go to a private school for undergraduate education, but many are in this boat for choosing even higher education. I went to UC Berkeley because my parents refused to pay for private school for undergrad. Well, my education did not end there. I just finished a masters program at a private school and I owe a fortune. The problem is that the program I needed was only available at one public school in the state at the time I applied. Was I supposed to wait and hope that more programs would come along in the near future. I think not. I was not married at the time and had no children and it was the best time to finish graduate school. Post graduate education in the state of California for UC schools cost at least 15,000 a year just for tuition. Private schools are about the same. People seeking advanced education that are middle class get the shaft no matter what. You don't qualify for financial aide and by the time undergrad is paid for, nothing is left for higher education. We want qualified nurse leaders, doctors, and scientists, and even political leaders, but we will not help them obtain the education that they need. This is wrong, backwards, and one the reasons why the US is losing the education and technology wars.

    April 1, 2009 at 12:45 pm |
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