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. L Kerk

    Nice article. I've lived through the range of emotions when it comes to student loans. I'm 39 and still have about $42,000 worth of student loans to pay back. I'm finally making a decent salary, trying to save for retirement, and trying to retire these loans.

    By taking out loans for my education, I bet on my own success (and won). My present perspective is one of resentment from having to pay ever increasing taxes to at least in part subsidize those who didn't have the vision, courage or work ethic to make their own way.

    April 1, 2009 at 12:58 pm |
  2. mike

    I am in the same situation as many other recent college grads. After graduating in 2007, I was lucky enough to be able to secure a job right out of school. Despite this, I still struggle to be able to pay my bills on a month to month basis, because my college loan payments are eating up so much of my salary. I cannot imagine how tough it is for those people who are unable to find steady employment. I've recently toyed with the idea of getting a second job at night just to have some sort of additional income.

    You are right, I did make the choice to go to a private school, where the tuition was more expensive. However, had it not been for my eduicational background and opportunities provided to me by my school, I certainly would not be in the position I am today. I'm in no way saying the government should bail people out and pay for their loans, as they chose to take these loans on. I am however, in agreement, that something must be done in order to make it more realistic for young college graduates to repay their loans.

    April 1, 2009 at 12:58 pm |
  3. Brian in Ohio

    Thank you for bringing this topic to light. I am going to end up with $50,000 in loans when I am done with graduate school in June.

    For those who say the military helps – it does, to an extent. I've been in for 17 years and there are caps to the GI Bill and loan repayment. Every little bit helps, but don't fool yourself into thinking the military will pay all of your loans off and pay for school. It's usually one or the other, not both. To the gentleman who brought up OCS for our author, don't do that. Officers make less bonus money than enlisted. You would have to go through basic training, mind you, but with a college degree you enlist as an E-4 rather than a Private. Enlisted Soldiers not only get more loan replayment, they also get a signing bonus (based on the job they choose) and if you go into the National Guard you can receive state benefits as well.

    I used four years of GI Bill and am currently using the Student Loan Repayment Program. That pays 15% or $3,000 a year on one loan (not all, just one), and only a loan that existed prior to me signing up for the program. Of that $50,000 I will owe, only $6,000 existed before grad school. That's going to leave me $44,000 that isn't eligible for military loan repayment.

    I'm better off than most but don't fool yourself into thinking the military is a way out. It helps, but won't solve it all.

    April 1, 2009 at 12:58 pm |
  4. John

    I pay that in school taxes for my district every month. NOW I have to pay your bills also ? What about me and MY NEEDS.

    Maybe you should have taken some math courses first before you bought into the stupid profession you selected.

    Don't you understand that $115,000 is a lot of money ?

    You have just been taught a valuable lesson early in life. You better start listening to the more conservative aspects of living and accountability. Something lost on all liberals.

    April 1, 2009 at 12:58 pm |
  5. Ivan in New York

    You'll get no sympathy from me. I didn't have loans to pay off, as I went to a more affordable state school and my parents paid for my college.

    But I also didn't live in New York. So when I tried to break into the same industry I found that most students from my college were extremely lucky to land jobs at AM radio stations in the middle of nowhere or third tier TV stations.

    Your post-college job is at CNN! Many people struggle for years. I had to work at stupid jobs out of college to save money to move to New York.

    This is the paying dues part. You just chose a shortcut with your loans and are paying for it now.

    April 1, 2009 at 12:58 pm |
  6. Casey

    I graduated in December 2008 with a degree in Engineering Physics and a 3.4 GPA. I have 23K in student loans (I chose to go to an inexpensive, in-state school) but had no clue when I started college that the economy was going to come to this. My parents do not have a lot of income and are unable to take care of this debt.

    I am unable to get a job and have sent out more than 150-200 applications since December for entry level engineering positions. So what am I supposed to do? Am I at fault for taking out student loans assuming jobs would be available? Should I have just joined the military and fought in Iraq, hoping that I would make it back alive to go to college?

    April 1, 2009 at 12:57 pm |
  7. Jill

    For all who say that people like Samantha should have to suffer their consequences, because they chose community college or worked thru school...I saw it is clear what a university, like Samantha's, does for individuals...it educates them.

    Mortgages cannot necessarily be compared to student loans. Yes, I believe we are in a mortgage crisis, but those in that position bought out of perhaps greed, or selfishness...too much for what they could afford. Those students, whom took out loans, did it to further themselves financially, socially, and to gain a better education.

    If I cannot afford a car, I can ride a bike or walk. If I cannot afford a house, I can rent for cheap or live with someone else. An education is something to be valued, and is highly necessary in all aspects of life. If I cannot afford to go to college at that time, then the options are limited. Could I work until I can afford college? Absolutely, but under the circumstances, that could take years and years. At that point, I would never enroll in a university. Although some will argue that a community college and trade school are just as good, and although I would not necessarily disagree, I will say that the things a university provides are more substantial!

    I think the government absolutely needs to aide students with a better loan process, and repayment. As a proud graduate, and as a person paying back her loans month to month, I undestand the situation facing these students, and workforce members.

    It is time to bailout those people who will be most benefial to our futures – college graduates.

    April 1, 2009 at 12:57 pm |
  8. Jamie

    I'm getting tired of all these people saying go to a state school/public universities. THEY ARE STILL EXPENSIVE, I went to one, in fact it was cheaper for me to to a state school in another state then to a state school in Indiana (my home state). So I chose to go out of state to save money and I'm still in student debt. I'm not asking other taxpayers to pay off my loan, but I think that the government should at least tax fresh college graduates with at a lower rate than everyone else, for at least 5 years. Reward us for the education you insist we get, but at not the expense of those who chose not to.

    April 1, 2009 at 12:57 pm |
  9. anthony

    Due to a loss of business in 2000 I defauleted on my student loans and have tried very diligently to work with the current holder of my loans to get caught up. They have been extremely difficult to work with, sometimes calling my home and even threatening me. They refuse to accept what I can afford to pay to help me get out of default and insist I pay over $800 per month for nine months in order to get the loans back into a non-default status. With rent, utilities, food and transpostation I have very little left over but have offered all of it to them. They continue to refuse and have virtually ruinined my credit.

    I say President Obama should insist that penalties and interest be forgiven and that the loans be reorganzied so people like myself can get caught up. There's an idea that would really help many, many Americans.

    April 1, 2009 at 12:57 pm |
  10. Mark

    There are severa dimensions to this. First of al, id be somewhat nervous going into a field with low prospects knowing I wouldnt find anything in my field that would even pay my basics let alone $100K in student debt. Students really need to start doing "real math" ergo, a balance sheet – one for now and a pro forma 10 years from now to ask "can I really make it work". If you cant alternatives should be considered.

    BUT sure seems some others want to bash the students – sorry but we DO need new engineers and doctors and so on. We also ought to be asking why does it cost that much in the first place, why do other countries – with higher education rates – get free university education when were stuck with a $100,000 bill?

    Anyway, what is the alternative, working at Walmart till you too can become Assistant Manager of the linen section – Ummmm No.

    April 1, 2009 at 12:57 pm |
  11. Courtney

    In response to many peoples' arguments, I understand that some people have the choice between private/public schools. Some programs, however, are only available to everybody via private schools.

    Social workers, counselors, and many others in social service sectors are subject to private school tuition rates, and usually require masters level degrees. Most people in these positions make very little throughout their careers compared to other popular professions. Do we really need to be penalizing our social service people with loans of 50,000; 75,000; 100,000+ ??

    Yes, they may have had the choice to not go into this profession, and to have chosen something available at a community college or state school. But really, what would our communities look like without these people?? Not everybody affected by private school tuition is in a rut because of an MBA..

    April 1, 2009 at 12:57 pm |
  12. Brandie

    Really Stacie? Work first and save up money to go to college? Do you know how much it costs a semster to even go to a state college. How do you expect someone who doesn't have an education yet to save up the 40,000 a year they need to attend college on $12 an hour. Do you really think this is possible. It's not about living beyond your means, its about being overcharged for an education. It's impossible to attend college without loans if you aren't already well off. Sounds like you need a reality check.

    April 1, 2009 at 12:57 pm |
  13. Federico

    Ah student loans. I would agree with the grippers that people should not get educations they can't afford if there were any, ANY living wage jobs that did not require a college degree. However, since the state of reality is such that a college degree is absolutely required to be able to just apply for any job that pays enough for one to move out of their parents' basement; anyone with student debt was, well, forced into that situation.

    April 1, 2009 at 12:57 pm |
  14. Sandra

    For those of you on your high horses because you went to public schools & worked, consider that everyone isn't as lucky as you. I was raising a daughter by myself with no public assistance and I could not work while I was in college trying to make a better life for the two of us or I would never have seen my daughter. I was trying to be responsible by raising my own daughter to be a good person rather than leaving her with some person I did not know all day. I took out loans at a public university. And guess what...I couldn't get a job in my field – English. And before you start criticizing my choice for English you should know that college counselors told me that was a wonderful choice to get a job. I believed them. I had no relatives who had ever gone to college, so I did not have any guidance other than that of counselors. I was a young girl. I was trying to do the right thing. Unfortunately, I could not get a job so I went back to school for computers with the same result – suddenly no one needed computer techs and I could not get a job. Tried another time, for Ultrasound – suddenly no jobs. For each of these, I needed loans. I was trying to get a good job so I would not have to be a burden to anyone. In the end I owe more than I can pay. I have gone to school for 3 different things and have been unable to get a job in any of the fields. And if you think it's irresponsible to go to school and take out loans, then provide a solution to those of us who cannot get a job and had no guidance, financial or educational. We were trying to do our best and the college/loan system just dragged us right in. We do deserve a bailout just as much as some person living beyond their means. We were just trying to live normal lives, not special ones. Unfortunately, circumstances did not allow that. If you think that we should not be helped, then get ready to start paying a hell of a lot more when we all refuse to pay the loans back because there is no point if we will never be able to pay them off. Applying everyones circumstances to yours creates a fallacy because you are applying a general to a specific circumstance. Not everyone was able to get a job in college without experience, and not everyone was able to do it because they had other circumstances that prevented it. If you don't want to lower student loan interest (which does not entail YOU paying anything), then you will also suffer the consequences of the poor economy because none of us can buy anything. All our extra money goes to loans. You're selfish and I hope you learn what it's like to think you are doing the right thing and then to be penalized for the rest of your life.

    April 1, 2009 at 12:57 pm |
  15. Bill

    Worry, stress and fear ? Welcome to life as an adult. Why would you take on so much debt for a career that doesn't pay? A community college would have provided the same education at a much more affordable rate. I suspect the debt you now carry is the cost of attending a prestigious university. This is the situation you created.

    April 1, 2009 at 12:56 pm |
  16. Will

    Great article! I was 18 years old with no credit (not bad, or good, no credit) and I was forced to take private student loans with interest rates of 16%...

    16 PERCENT!!!! That is total robbery.

    April 1, 2009 at 12:56 pm |
  17. Stephanie

    Amazing, folks. We are all looking to our government for a handout.

    Samantha, I feel sorry for you, but the situation is of your making. You went through $115,000 in four years of college? My math says that was nearly $30,000 a year. Did you not work to contribute to your education? Did you not ask your family for help? Had you not put anything aside for school beforehand? What did you do during the summers? Why did you pick such an expensive school? Why did yo not stretch out your education so you could pay for it as you went? Why is it MY problem now?

    Why is it government's responsibility to clean this up? They already "helped" by making loan guarantees available to students. Maybe that was the mistake. (Or maybe SOME students used loans more carefully, went to cheaper schools, worked part time, and stretched out their educations to reduce their dependency on the government.)

    As to the inequity of help for corporations but no (more) help for those with student loans, the argument is flat. The problem isn't that the government isn't doing enough with student loan forgiveness. The problem is that government has no business bailing out corporations or banks.

    We have become a "gimme" nation. What a shame. This ISN'T what government is for!

    April 1, 2009 at 12:56 pm |
  18. Colleen

    My loans were a mess. I ended up having to leave the 4 year school I had signed on for because of a paperwork jam that left me aid-less when I was to be starting my sophomore year. Also, it left me in a 3,000 dollar balance lurch that I had to pull 2 jobs to pay off before I could even consider trying to go back. After getting an AA degree from a local CC, I had a huge mess of financial debt (around 25K) and with lenders selling their loans all over the place, I lost track of who I owed what to. The loans ended up in default, even after trying to rehabilitate them. Basically, I ended up letting the government attach my tax returns for 5 years. The debt's paid off now.

    I'd do what my husband did when he found himself in this mess. Pay what you can, consistently, every month. Use your tax returns to make payments each year. As long as you are making an attempt to pay, they can't do anything to you.

    Oh, and I agree that the government needs to stop putting the screws to students!

    April 1, 2009 at 12:56 pm |
  19. Zach Chick

    First of all, I would like to say that it is very inspiring to hear stories such as this, and many of the comments posted. However, not many know of the grief and pain involved with having over 100K in loans, so most who commented of having around the average of 20-30K cannot begin to understand the financial woes of paying for a piece of paper in the amount that would purchase a house. With that being said, I am in the same boat, and have over 100K in loans; and as much as I'd like to sit here and complain and tell you I regret it all, I do not. The real issue here is education. Not only education as in secondary education, but education for the youth that will attend these institutions. To an 18 year old, a college education seems like a ticket to a very stable life making a very stable wage. Unfortunately, this is not the case; with unemployment at an unbelievable high, and the competitive nature of any position that requires a college degree, financial stability is hard fought. Students should be able to understand these responsibilities and be continually educated and informed into what they are getting theirselves into when they sign for these loans. In my case, my parents, along with myself, were even misdirected and miseducated in the amount that would be owed per month and in the terms of the loans in general. Yes, these are choices that one makes and should and must take responsibility for, but when a click of a button and a signature is all that is required for a $20,000 loan, isn't there a problem there. To purchase a house of any worth is a very substantial and tedious process. Where is that within the student loan industry? My main suggestion to all, to the industry, which means little in this forum, is to at least assign an individual to anyone with, say, over 50K in loans. I would think that there is an astonishing profit being produced from the undertaking of these loans, so to think that simple and low cost steps such as education and personal attention would not be that much to ask for.

    That is solely one example, but there is an infinate amount of ideas I could put to a comment regarding student loans. Although, I will end with, this is certainly a very good direction: that someone with as much prestige and note as Anderson Cooper publish stories like Samantha's. It is very appreciated to those of us living these struggles, and hopefully, to those that are in the cusp of choosing such responsibilities as student loans require. Thank You and Regards to your work.

    Education is the main tool against this capitalistic society that has gotten so out of control most only survive, if that.

    April 1, 2009 at 12:56 pm |
  20. Andrew C

    I have about $80k in student loans. $59K in Federal subsidized loans at an interest rate of $2.65% and $23K in private loan from Sallie Mae at a rate of 9%. The federal loan is ammortized over 20 years and the private loan over 10-years.

    In total I pay around $600 a month in Student loan payments. Becouse of my income none of the interest expense is tax deductable.

    Here are the problems as I see it.

    1) The cost of education in this country is way to high. There is no reason a private institution should cost $30k per year to attend. Look at the dorms and dining halls at many colleges...they are way to nice.

    2) Student Counselors perpetuate a myth that it will be easy to pay off loans in the future and with your big salary. The truth is tha many people will never make enough to justify $100 – $125K in student loans. To top it off...Student aid counselers tell you that the interests is tax deductable...which is not at all true.

    3) They need to allow for default on these loans. That way the lending standards would increase and the flow of easy money to every Private U would stop. A bank would then say...ok you going to be a doctor...I will loan you $100k...but if you are going to be an photographer then no...I am not going to loan you money that you will have no reasonable chance at payong off.

    4) There is an education asset bubble caused by baby boomers thought process that every single stupid kid needs to attend college and the easy access to student loans. Cut these off and the price of education will go down.

    April 1, 2009 at 12:56 pm |
  21. Peter

    Boo Hoo. This is called capitalism. Loan companies aren't there for your benefit they are trying to make a profit, besides all you have to do is write a few more sob stories and you can become another CNN celebrity that makes way more money than the service they supply (such as sob-story cult articles like this one) is worth, and you'll pay of your loans in no time.

    Everyone thinks that the "American Dream" should be given to them, and when it isn't they decide that it is "only for the rich" and other nonsense. The "American Dream" is that someone can WORK HARD and better themselves and their social standing, not that a poor or middle class person can magically transcend to the top of the food chain, it doesn't work like that, it takes hard work and sound decision making, such as not biting off more than you can chew.

    April 1, 2009 at 12:56 pm |
  22. Christine

    Nice article! I am hoping it brings light to this awful situation. I attended a state college, worked 2-3 jobs during college, and still had to take out loans. At 44, I am still making monthly payments that will probably continue thru retirement...thats if I am ever able to retire. I have been thru hell with the student loans. I graduated during the last recession and there were no jobs in my field. I continued to waitress and bartend to make ends meet. A terrible car accident left me unable to work, but the student loan payment and their ever escalating interest and fees just kept adding up!!! I still pay 9 Percent interest with no end in sight. I had to declare personal bankruptcy several years ago to end the 20 percent wage garnishment that was enacted by the Education department. I owed so much money for the basics...my phone and electric were nearly shut off every month..i was behind on my rent..the doctor and dentist bills were piling up...I had no choice. I was not able to get rid of the student loan debt, but they were finally willing to work with me. They got me into a program where I was able to rehabilitate my loans. Why wouldn't they do that before the bankruptcy???
    Now my oldest child is getting ready to enter college...oh, you are not eligible for government aid, but we are thrilled to offer you a loan to cover your cost of attendance...30K X 4 = 120K. I told him not to do it!!!

    April 1, 2009 at 12:56 pm |
  23. km

    I sympathize with you but there were alternatives available. Such as going to a community college for the first 2 years and then transfering to
    the college of your choice for graduation. With the money saved by going to a local school for the first 2 years and lower tuition you could have saved some.. but it still would not solve the problem.. Maybe if community college was free people would be able to save enough money to attend years 3 & 4, then graduate from the 4 year college of their choice. Good luck and try to control your stress the best you can.. be sure to still take some time out to enjoy yourself everyday.

    April 1, 2009 at 12:56 pm |
  24. Chris

    Many of the people on here talking about not attending the best schools or "settling" for public or local colleges, I've noticed, graduated a decade or more ago (one person said 15 years ago). Back then, a college degree was only beginning to become vital for career prospects; today, it's an absolute necessity for most professions, and schools become name brands. The better the school you go to, in most cases, the better chances you have at getting a job (and especially when jobs get harder to find in bad economic times). So to blame someone for choosing the best school they can get into ignores many realities. Additionally, most average citizens could not have foreseen the economic crisis coming, so to invest in education via loans didn't seem such a bad idea when job prospects looked great.

    Sam's best point here, though, is that student loans have ridiculous demands placed on them as far as payback, many of them far more strict than most of our ordinary loans. This is another case of misplaced priorities in our country, with few people having the long-term foresight to understand the investment of education. Sadly, if it's not going to make money right now, most people aren't interested in it, even policy makers. It's sad to make loans that fund education so impossible to pay back for so many people, and if it doesn't change, we'll just get dumber as a country.

    April 1, 2009 at 12:56 pm |
  25. Mom A.

    As a parent of a student in college and a student graduating High School I'm terrified. How do I co-sign a loan for my daughter to go to an anyway college when the term of the loan will be ending when I'm 75. All the SUNY colleges received more applications this year then they know what to do with. My daughter has a 3.5 grade average and couldn't get into the SUNY schools of her choice. We want to make the right decision for her future, but can we afford too? No! And that doesn't even mention her poor bothers loans.

    April 1, 2009 at 12:55 pm |
  26. Keesha

    I couldn't agree with you more! With today's ecomony, we also have to worry about if we can't make a payment toward our student loans, if we DO have a job, are they going to garnish my wages? I have had my tax refund taken from me, my wages taken from me, and I don't even use the degree I graduated with because of the downward spiral this country is headed in. Where is our bailout?

    April 1, 2009 at 12:55 pm |
  27. Lynn, NYC

    I was in grad school when a divorce, job layoff due to downsizing, and a brain tumor hit, causing me to drop out of school for a while and live off meager savings I had. Student loan, already consolidated with Sallie Mae, was deferred and then went into forbearance for a while. This racked up unbelievable capitalized interest and penalties. Sallie Mae was unforgivable and wasn't always forthcoming. The interest, 8.75%, was not allowed to be revised because part of the consolidation agreement is that you cannot renegotiate interest. I couldn't even declare the loan as part of bankruptcy if I wanted to.

    Here's the thing: I'm past 60 and while I'm back at work and have been paying on the loan for 10 years, I will never be able to retire for they will attach my Social Security benefits, which I need.

    So don't shrug your shoulders and say that all people who borrow are deadbeats. My story is just one of many that includes circumstances beyond my control and dealing with a corrupt system.

    In the end, my $24000 loan will have cost me over $88000.

    April 1, 2009 at 12:55 pm |
  28. Dana

    I might be able to sympathize with her, if she'd gone to a community college or regular four-year institution instead of a private one. She should have thought of the "low-income entry-level position" versus the cost of private college tuition before she took out the loan. I too have a student loan to repay, I just graduated this past December. I received pell for half of it, and am responsible for the other half. I was aware that I would have to pay back my part, which is partly why I chose the school I did – it was affordable. I didn't decide it was private institution or nothing.

    April 1, 2009 at 12:55 pm |
  29. Robert

    I agree with Stacie, the first commenter. I worked myself to the bone, holding two part time jobs during my undergraduate career. I chose not to go to a private school because of the costs, but attended a top public university. I graduated with just over $10,000 in debt, a number that easily could have been 5 times as much if I didn't work for scholarships and make payments during college. I'm not saying the anyone's situation isn't hard as well, but how is it fair that anyone can make choices that have bad consequences and expect someone else to bail them out? If that were the case, should I have attended a top 5 private university, studied what I wanted, and expected someone else to pay for it?

    Another thing is there are resources out there available to people. Financial aide officers are fully capable of explaining loans and implications. Parents are a good source of advice (not bailout). Friends/family that have gone through the same situations,and of course, the endless amount of information available online count as well. The point is people can educate themselves if they want to. People making uneducated decisions shouldn't be the responsibility of the government, or the taxes I pay.

    That being said, I think the idea of making student loans could do with a restructuring. Lowering the interest rates and reworking the conditions of the loan term is a seriously needed endeavor.

    April 1, 2009 at 12:55 pm |
  30. Sara

    Wow. People are really rubbing your nose in it for going to a good school. Unfortunately, the current employment situation is as follows: it's very difficult to obtain a stable, well-paying job outside of the trades unless one goes to college. Yes, one can choose a community college, however, there are intangible and tangible benefits in going to private schools as well. Think about networking prospects, ability to get a better job, and an educational background that resonates across regional lines. Education is a good investment. It's not similar to someone who bought a house knowing that they couldn't afford it. It is, to some extent, a gamble on how much you will be paid when you come out of school. Better schools mean more money.

    Also, I think it should be remembered that kids are making this decision at 18 years old. From what I remember, teenagers are not the most fiscally savvy people– in fact most have never had bills before. I think the point of this article is compelling. Why aren't we investing more in our nation's future– which depends on education? Instead we are penalizing those that attempt to attain their dreams- private school or not.

    April 1, 2009 at 12:55 pm |
  31. Jennifer

    My husband, friends and I agree. Among us are teachers engineers and doctors. We all significantly contribute to society and pay our bills and taxes and do what we are expected to do. Where is our bailout? I guarantee if all the money we pay in loans was forgiven, that money would be put back into the economy.

    April 1, 2009 at 12:55 pm |
  32. Jim C

    To everyone with the attitude of "you chose the best schools, live with it", etc. Just where does it say anything that only the wealthy shall be entitled to the best educations, and the rest of the struggling masses have the community colleges? Seems to me that in America, everyone is "created equal" and entitled to "life, liberty, and the pursuit of happiness". An American oligarchy is not what the founding fathers had in mind.

    April 1, 2009 at 12:55 pm |
  33. andrew

    In response to Stacie's comment I am not questioning your intelligence or dismissing that your comment has some value, but going to college should be about merit and not about "financial responsibility." If someone is intelligent enough to be accepted to a top academic institution, they should not have to accept a lesser academic institution for financial reasons. If the most intelligent people in our society sell themselves short in terms of intellectual challenge and career ambitions, this country is going to deteriorate.
    The issue of student loans is therefore an entirely different animal than the issue of Americans buying 4,000 square foot homes when they only need 1,000 square feet of living space.
    If you Stacie, or someone else, passed up going to a top notch academic institution for community college based on economic reasons, then on the one hand kudos to you for your fiscal responsibility but on the other hand shame on our society for forcing that decision.

    April 1, 2009 at 12:55 pm |
  34. AM, New Jersey

    Sam: thank you for putting this out there and sharing your story. I felt like I had to comment on this because I too am in the same exact boat. And those who think we CHOSE this path for ourselves let me clarify that there is not enough education available to students who dream to pursue their degree. We should be given a fair chance at higher education just as those who have the finances available to them. I am a first generation college graduate and if there were programs available to teach me how to manage my finances then I would have absolutely CHOSE a different road to avoid swimming in debt. I have to think about the amount that’s stacked on my shoulders before I can even dream of getting my Masters. Graduates such as you and I, are the only ones who can educate through our experience to my younger brother and others who will be starting college this fall. A legitimate financial aid program needs to be developed. Hang in there SAM!

    April 1, 2009 at 12:55 pm |
  35. Steve

    Since student loans cannot be discharged in bankruptcy, the interest rate should be at the most 3.0%. I agree with Samantha that somethings needs to be done. I have written my senators and congressman, but they only gave minor lip service to this problem.

    April 1, 2009 at 12:55 pm |
  36. Rudy

    College is an investment in yourself. You would you buy an equity of property investment with a loan knowing the return on investment is going to be very low if any return at all.

    The author states "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". Sorry no sympathy here, the author freely admits she choose this career path knowing the salaries would be low.

    I attended private college with student loans to match. However I choose a field of study with strong starting salaries and paid off the equivalent of two years of college in only 5 years. Additionally my company paid for my part time graduate school education.

    As I review education choices with my children a main concern is the starting salary level versus the cost of education. Low starting salaries may require a local community college or technical school. Larger starting salaries support education at more expensive institutions.

    Stories like this one, actually help get the point across to my children. Thank you.

    April 1, 2009 at 12:55 pm |
  37. Rachel

    It's not really fair to criticize Samantha and others like her for "choosing" to go to an expensive private school. I'm slated to graduate in June with my master's degree. I went to a cheaper commuter college for my first three years and then to a state university for the rest of my education and I have still amassed $68k in student loan debt (by comparison, our home is valued at $102,000). My husband, who went to ITT Technical Institute, accumulated $24k in student loan debt in earning his two-year associate's degree.

    Despite the fact that I graduated cum laude with high honors, was financially independent and earning less than $10 an hour and came from a working poor family of six who could not contribute to my education, I received only one $500 Pell grant in the entire seven years it took to earn my undergraduate degree. I received a standard scholarship covering 70 percent of my tuition for graduate school, but lost it when the demands of attending school and working full-time required me to drop to a part-time course load. Meanwhile, some of my fellow graduate students tutor football players at our university who are certifiably illiterate yet enjoy an all-expenses paid scholarship. Am I bitter? Absolutely.

    I've worked full-time throughout my college career so I was fortunate in that I landed a great position as a journalist before I even earned my bachelor's degree. It was difficult enough when I was in the position of job-searching four and six years ago. I can't imagine what it's like for new graduates now. I'm also fortunate in that my husband paid off his loans last year, so we can apply those funds now to mine. Still, considering that I turn 30 this year, we will most likely be paying on those student loans for the better part of our lives.

    I think its important to point out that when my husband purchased our home (before we met), he had to sign off on dozens of documents that took the better part of an hour to complete. Yet accepting financial aid takes only a mouse click even though the loans can accumulate to the point where funding an education is as steep as purchasing a home. No wonder students and even their parents don't fully understand financial aid, how it works and what to expect come repayment time.

    April 1, 2009 at 12:54 pm |
  38. Carmen

    Graduated in late 2000 with $60,000 debt. Consolidated loans with government. Have been paying interest on loans for 8 years and now owe over $61,000. Will never be able to retire. Govt. will have lien against any social security benefits, I think. The rub comes in that because of hiring freezes, I'm being asked to train someone who has no education other than high school to do some of my job.

    April 1, 2009 at 12:54 pm |
  39. Meg

    I hear where you are coming from with on student loans, honestly. I have one myself, but it was only 15k, and that was after the federal student aid I received. I chose an instate public school as it was cheaper.

    The big question with school cost is "Was it worth the name and the place you went to?" I started out as a public school teacher with 15k debt, a person who sat next to me during the same teaching orientation for the same public school system had 80k in debt as she went to an out of state school. We were both starting the same career, same pay check, yet I was better off financially because of the school I chose. I have since left teaching because I got burnt out, and was able to have my loans differed as I was in grad school. A friend of mine gloated that she got a really good rate on her student loan repayment when she consolidated them. Then it turned out I had made the better decision to not consolidate as she could not get her loans deferred when she went back to grade school, but I could. When going through grad school I didn't have to pay for my loans, but she did each month.

    No my parents didn’t help me get through school, I paid for it 100%. I was just lucky enough to have parents who taught me the real value of a dollar and how to spend wisely.

    Is the money you will be spending on the student loan worth what you are going to get after you graduate? If not, chose another school or another career.

    April 1, 2009 at 12:54 pm |
  40. Doris

    I waited to go to college a few years after graduating high school. I was 27 years old and had the dream of becoming a fashion designer. I was married at the time and had a young son. I started art school and then came the separation of my marriage. I had to work full time and take care of my son. I made it through 1 year of college with a $4000.00 loan. Now you are probably saying that is a small amount compared to others. Well in 1994, I filed a chapter 13 and made payments on the student loans of over $1000.00. I converted to a chapter 7 in 1996. Student loans could not be discharged unless due to undue hardship. Well, I struggled over the years with payments and kept the loans in forbearance. Well today the $4000.00 loan has become $14189.00.

    April 1, 2009 at 12:54 pm |
  41. Ed

    This story illustrates what a sham a college education in this country has become. The cost of education is ridiculous. When I was growing up my teachers and parents said go to college so you can have a good job someday and make money. That was what was preached at me all through my high school years. The colleges sucker you in by telling you of all the money you will be making with one of their degrees, so you reason it is OK to borrow student loan money now, I'll be making so much in the future that it won't be a big deal to pay off. (Look into the statistics on graduates and how much they make and ask the school how they get those figures. The average for my degree was extremely skewed by one person who reported making $78,000 right out of school. The rest of us, lucky to make more than $30,000. These numbers are all self reported and there is no verification.) For many when you graduate you are lucky to find a job, especially in this economy. Then you land that entry level job, and are just happy to be employed in your field. The pay level for some entry level jobs is pathetic, just barely over jobs that don't require an education at all. Try paying off student loans when you barely make enough money to cover the basics. The truth is for many people these days, they are better off without a college degree and massive amounts of debt.

    April 1, 2009 at 12:54 pm |
  42. Steele

    Ah, I see that the most valuable lesson for real life must not have been taught or did not sink in – that lesson of taking responsibility for your own decisions. I do feel sorry that you are struggling under financial burdens, but as others have pointed out, they are totally due to your own choices.
    I also had some student loans after school, but I chose to take responsibility for my own choices and "dream" within realistic limits. I chose to drive used cars rather than going into high debt, and chose to purchase a home that was aproximately a third of what the realtor told me we could afford, (that was back when mortgage rates were 18%) Because I have chosen to take personal responsibility for my decisions, I am both mortgage free and credit card debt free now 30 years after graduation. (I still drive used cars.)
    Why does the world always OWE us everything when it is us that makes the bad decisions?

    April 1, 2009 at 12:54 pm |
  43. Matt

    What this speaks to is a deeper issue that has developed over the last 40 years in this country. And that is the commodification of education. A rash of "colleges" and technical schools have sprouted up the last few years offering quick and easy bachelor's degrees and skills training. People flock to these schools because they've been told that the only way to get ahead in America is to have a college education or some valuable skill like computers or nursing. I'm not saying that those aren't growth areas in the economy but what ends up happening to a lot of people is they go into debt with little to nothing to show for their ROI. Even most of our more legitimate education institutions are little more than factories running students through the motions so they can take their money in return for a piece of paper. The quality of instructors and curriculum in these factories is appalling, and we are paying the price for our constantly lowering standards and blind worship of the dollar.

    Ultimately the goal of most of these so called institutions of learning is to take your money and put you into the cycle of debt so that you have no choice but to become another whore to the system. Hyperbole? No, it's not. And God forbid people actually attend higher learning to, gasp, learn. But that was destroyed when the powers started selling a degree by itself as a means to financial success. Make no mistake about it, it's all about the money in this country. Greed is good. Isn't that our mantra now? If a college education is a way into a better life than most people will run to mortgage their future away for a fantasy.

    April 1, 2009 at 12:54 pm |
  44. Shahid Ashraf

    I think students should be advised on loan terms and conditions with full disclosures like how much it is going to cost them a month or total time period to pay off the loan. During my master program, I worked 50 hrs a week while attending school in the afternoon. Got schoalrship in final 2nd year and paid off my loan in 3 years. I never took a loan and glad that I didnt. Never ask my parents either for loan.
    You have the freedom to make choices and pay for the consequences. You got to do a simple cost benefit analysis. Paying off loan for the rest of your life is like being a slave for creditor for the rest of your life.

    April 1, 2009 at 12:54 pm |
  45. Amy

    Samantha –

    Thank you so much for finally really voicing an issue that affects millions of Americans. What some of your readers don't seem to understand is that this type of debt can't be refinanced once loans have been consolidated, even if interest rates are decreased! I pay over 8% interest on my school loans, because of when I graduated (interest rates were high). Some other people are paying 2%. The system is not set up to take reality into account. I also work a public service job. While I make a good living, I don't make a fortune and I can't seem to decrease the principal on my loans. When did we become a country in which only the wealthy are able to afford college? It's a shame that the cost of college and the woefully inadequate loan system is causing such trauma to people across the country. I think I can speak for most people in my situation by saying we weren't greedy and over-grasping when we went to school and took out loans. We simply wanted a better life for ourselves. It's terrible to be penalized for dreaming big and working hard to get somewhere. And by the way - it's not just students who attend Ivy League Schools who end up with a mountain of debt. State schools aren't cheap, either!

    April 1, 2009 at 12:54 pm |
  46. jeremy

    great points by the author,

    i am married with two daughters. my wife stays at home to care for the children, because day care is so outlandish in price. my wife has over $50K in student loans that we cannot to afford to pay off. we are trying to pay mine off as i type.

    many people are in this situation, have one parent stay home to ensure a quality of life for the children or both parents work and fork over an entire salary for day care. even if both of us work we can't afford to pay off both student loans due to child care expenses.

    this system is broken. it is almost impossible for the middle class to survive in today's America.

    April 1, 2009 at 12:53 pm |
  47. Troy

    I just did the math, so I would have a better perspective. I'm a parent about to send my son off to university. He is interested in the school I attended which is an out of state university for him (as it was for me).

    If I look at what I paid my senior year for tuition & apply a handy inflation adjuster I found online, annual tuition at that school should be approximately $10k for an out of state student.

    Actual annual tuition? $20k.

    The fundamental problem is that we have lost control of the cost of education. And that we are encouraging our students to take on debt to obtain an equivalent level of education that we got without educating them on the implications of that debt.

    Our country needs an educated workforce. If we don't recognize that, we will quickly descend into a third rate economy. And we are strongly discouraging our students from getting that education that they need to compete in a sophisticated economy.

    April 1, 2009 at 12:53 pm |
  48. Denice Hamilton

    Your article really hit home for me. After years of working dead end jobs I decided to go back to school and complete my BA. I could not get into UW-Milwaukee because my math scores were too low on the entrance exam, so I was forced to pursue other options. After choosing a private university, I completed my BA with a 4.0 (and yes, there were many math classes), and I went on for my MBA. I graduated, again from a private university, in Dec. of 2008 with a 3.83 GPA. Now I'm 52 years old and looking at $90,000 of debt. The job market is terrible. I will die long before I pay off my student loans, and having that reality hanging over my head is disheartening to say the least.

    I'm contemplating just paying them what I can afford each month and let them take my tax returns until I die.

    It's nice to know that others share my predicament and are sympathetic.

    April 1, 2009 at 12:53 pm |
  49. Pam

    Unfortunately many of our nation's young are being told they can do anything. Reach for the stars and all that. When choosing what to do after high school, their dream and their finances often to not match. We must teach them fiscal responsibility before they leave the nest so they do not enslave themselves to the government loan programs!

    Young people, find a school you can afford, or a dream you can pay for. Do not ask taxpayers to fund your education. We are working hard for our money and will use it as we see fit. I hope you do the same.

    April 1, 2009 at 12:53 pm |
  50. LYNN

    You go girl!!! My husband & I are well over our heads in school debt. None of our parents or older siblings went to college. Yes, we did choose to go to a private school, but we had no idea what we were getting ourselves into. No one explained on how these loans would effect us and put us in so much debt right away. Had we known things might have been different. We are both not currently serving in our fields due to the high school loan payments and interest. Its very frustrating and it seems like no one wants to listen.

    April 1, 2009 at 12:53 pm |
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