[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/04/02/art.vert.hillstrom.jpg caption="Samantha Hillstrom graduated from college in May 2007." width=292 height=320]
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Last week, I wrote a blog about an issue facing many college graduates: debt from student loans. Since the post went up, the outpouring of response – more than 2,000 comments posted on this blog - has been staggering. It’s quite clear this is a discussion we need to be having in America today. Whether you support me or completely disagree with what I’m saying and the choices I’ve made, I think one thing we can agree on is that America’s student loan system is severely flawed.
Let me make something very clear. In no way am I looking for a bailout. I completely accept the amount of student debt I gave myself by attending a private college in New York City. It was my choice and one that I made understanding I would be leaving with debt to pay off. I do not expect to be bailed out, but what I do expect is to have the same conditions on my loan agreements and repayment plan as homeowners in America.
Right now, you can purchase a house at a fixed rate of 5% with a 30-year repayment. Yet, I have student loans that have variable interest rates and only 12 years to pay them off. That’s not right. How is it that the failing auto industry gets a bailout and I can’t even consolidate my loans to get a lower monthly payment? How is it that the banks get a bailout and student loans holders can’t even get forgiveness when they go into a low paying job or when they serve their communities? We didn’t all strive to be doctors, lawyers or investment bankers earning high wages.
As a result of the government bailouts, I’ve noticed a general sentiment in our country where everyone lacks sympathy for those who made poor decisions and then expect a handout when it fails. I get that and I share the same distaste. However, I regret the notion that attending the college of my choice and choosing my dream career was a poor decision.
The conversation we need to be having is complex. It starts with addressing the cost of college and how kids have to pay for it. We need to start educating our high school students on how to finance an education and what exactly it means to take out a student loan. I have said before that I was uneducated about loan terms and I wasn’t exactly certain about all of the fine print. Now, in my repayment, I am still confused. It’s not as easy as you think.
The way student loans are processed and subsequently repaid is part of the predatory lending crisis, quite similar to what many homeowners experienced. Students did what they thought was the right thing by taking out student loans through a bank backed by the government, but now they’re leaving college with variable interest rates and unfair repayment options.
I didn't leave college with $115,000 of student debt, but out-of-control variable interest rates and the inability to consolidate has now left me with more than $20,000 worth of interest - yes, interest - on the loans.
In 2006, the federal government cut aid to students including Stafford Loans, Pell Grants and work study options, leaving many people with no other option than to take out a student loan. My loan provider is actually a bank that received federal bailout money. As a consequence of that, I think it is within reason to ask that it renegotiate my loan terms.
Many people said I should have attended a state school and then I wouldn’t have been in this mess. Last time I checked state schools weren’t drastically cheaper and I didn’t come from a financial situation where I could have afforded any school without a loan. The tuition of my state school would have been at least $20,000 per year. How is that any different? This isn’t a private versus public school debate.
My mom was a single parent who did everything she could to make sure I had options to pursue my dreams. I worked my entire way through college. Between work study, part-time jobs both during the school year and summer, babysitting I did on the weekends and non-paying internships; I was hardly sipping lattes on Madison Avenue watching my debt accrue. Last month, I moved outside of Manhattan to save an extra $300 a month to put toward my loans. I have never been on Spring Break. I dye my own hair, paint my own nails and bring my lunch to work. I still babysit and use that money to buy groceries and pay my electric bills. I’m from Chicago and now only go home to see friends and family at the holidays. $250 for a flight home or partial payment of my student loan? I almost always choose the latter. This is my life. This is my choice and I’m not complaining. However, we are taught to follow our dreams and I didn’t push my way through high school to attend a community college because that was the only thing I could afford.
We need to stand up as a country and demand that student loan interest rates are lowered and college is more affordable. We should be free to go to any school we want and get a degree in our dream field. Let’s fix this problem and give students the freedom to attend the college of their choice and graduate with the ability to pay off their student loans in a responsible manner. We are talking about education, not cars, homes or lines of credit to go shopping. The fact that students are expected to pay sky-rocketing interest rates on loans for education is exactly where the problem lies. We are in a financial crisis right now and the student loan repayment process isn’t reflecting that.
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