I completely get the impossibility of paying off 200K for an expensive non marketable degree and not being able to find a job, but I'm not fully understanding the issue with paying off a moderate loan when hired after graduation.
Comparing it to my loan, I graduated with $9,500 in debt and was hired at $10.50/hr. That creeped up of course but I initially made less than 25K/year. Compared to 104K now, that was very little income.
I was the sole earner, paid my rent, had a new but modest car, paid for my two kids (didn't even have maternity benefits on the first (the health insurance industry has never been a bed of roses), had a couple of horses and still paid off my loans in 10 years.
What I don't get is the primary reason why that doesn't work the same for anyone that graduates with student debt that is roughly half of their annual income these days.
I'm sure interest plays a part, but what else?
Do people just resent having to pay them back? They're cramping the new lifestyle norm?
Specializes in Medical Oncology, Alzheimer/dementia.
I did the LPN and RN program at the same technical school (years apart), paid cash, had some tuition reimbursement and small scholarships, and I left that school both times owing nothing. I wasn't until I did the RN-BSN program that I had to take out student loans. I work with some nurses that complain about their loan debt, stating they are paying $900 monthly (and that's not a payment doubled up). I believe it is lack of research, and not looking at how incurred debt will impact them further down the line. I don't know anything about the sense of entitlement people talk about, because I've never had it in my life. Been working since I was 16, and have worked for everything I have. Nothing was ever given to me, and I prefer it that way.
I see a lot of people complaining about their debt who simply haven't managed the money they have very well. They have lived far above their means. As a previous poster said, they expect to live the lifestyle of a 40-year-old while they are in their 20's. When I was in my 20's, I was living in a dump -- with roommates to help pay the bills. I continued living "like a graduate student" while I was in my 30's so that I could pay for graduate school. I didn't "have money" to buy a home, decent furniture (not "hand-me-downs" from family or thrift shop finds) until I was in my 40's.
Today, I see people wanting bailed out of their loans driving new cars, taking their kids to DisneyWorld, buying homes with granite counter tops and stainless steel appliances, with community pools, joining gyms, etc. And they want me to help them pay off their loans! Jeez!
I totally support the government cracking down on predatory lending and scam schools duping naive people into their sham programs. Those former students should get justice -- and the perpetrators punished. But people who weren't lied to who don't want to sacrifice to pay back their legitimate loans are a totally different story.
I think people take out loans at a time in their life when they are financially naive. If you had asked me at the age of 18 what the differences between a 30K, 60K and 90K a year lifestyle, I would not have had a clue. Loans can be just another big number without context to a young person who has never had to work to support themselves.
Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
Case in point...many students repeatedly inquire about the nursing program at the school I shall not name, located in southern CA. A BSN degree can be had for tuition and fees that amount to $132,000. NCLEX pass rates are substandard.
The school appeals to people who struggle to get admitted elsewhere because the admission requirements are lax.
A student loan debt of $132,000 financed at 6.8 percent over 10 years results in a repayment of more than $1,500 per month, yet desperate people are still interested. In spite of having info about the potential financial trap of student loan debt combined with California's horrid new grad job market, these people still take the plunge.
Some people are their own worst enemies. Instead of getting mad at schools that take advantage, they'll shout down those who sound the warning alarms.
I agree with the sentiments that we shouldn't go into nursing school and sign up for loans blindly. Too many people think that nurses make "big money", there is a nursing shortage, or believe they are going to receive loan forgiveness or sign on bonuses. That's not the reality. My hourly rate when I started as a new graduate RN four years ago was just over $20/hr. I just finished my RN-BSN and still have some loans, but will continue to live way below my means and sacrifice in order to pay off my loans within a year or so.
My rent is currently 76% of my income. At any stage of my working life, I find this to be downright depressing. This is rent, not a mortgage, I am receiving little of value when you look at my living conditions. The only cheaper places to live are in the midst of the drugs and prostitution district. I want to move to a smoke free, adults only environment. To do that, the lowest rent exceeds my income by more than $100 a month. If this fact of life floors someone who has been around as long as I have, I can see the effect it can have on a young person just starting out.
The average person that graduated BSN school with me has somewhere around 30-40k in loan debt. When I crunch the numbers assuming 36 hours a week x 52 weeks, I make 50,076 before taxes WITH my night diff included. My poor classmates who were unfortunate enough to land day shift make $42,588 before taxes at the same salary I do. People are taking out almost 100% of their income in loans here. That's pretty different. I feel for my classmates who had to take out loans. I was fortunate enough to have family help me, and I also worked my way through school.
Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis.
I agree with the problem with instant gratification. I lived in a tiny dumpy apartment and drove a used car in my 20s. I had no car til I was 24; instead using public trans or relying on friends (paying gas money) to get around. I realized it would take time to live the lifestyle I wanted.
I am debt free regarding school. I am going back now, when I have an employer who will kick in a large amount (not all) to help me advance my education. My goal now as an older person whose kids are nearly grown, is not to acquire new debt but plan for retirement.
See it's never been "easy". I have had to pay my own bills, pay what I owe and plan for the future. But I live in a really nice home, drive a late model car and lack for nothing. It took me a long time to get here, however and it did not happen in my 20s and 30s. Even in my late 30s I was still living in a 1200 sq ft military housing home and driving an older SUV to cart the kids around. Raising kids costs money. A LOT. More than I ever imagined.
If you mortgage out your future, and accumulate impossible debt, your life is going to be hard til you die. I have taught my kids this. My daughter is an excellent saver and budgeter. My son, well, let's say a penny earned is a penny spent and his life will be difficult til he learns the lessons we tried to teach him. He is very typical of the young 20-somethings of his generation, I will say.
One more thing (thanks Gloria Steinham):
When she said 'YOU CAN HAVE IT ALL" , well she did not really expound. I think we CAN "have it all" but NOT ALL AT ONCE.
Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis.
I would also recommend young folks looking to finance college through loans get solid advice from a financial planner first. There are numerous predatory loan companies/banks and universities that charge ridiculous tuitions and fees for school. Not all colleges are equal and I would recommend most start at a community college the first two years, and transfer later to a 4 year uni, saving a TON of money.
Unless Mom and Dad are paying your way, well you will HAVE To plan on paying YOUR OWN DEBT. Don't think someone is gonna bail you out. Cause it's highly unlikely and it's unfair to the rest of us who pay for such bail-outs.
Use your resources, your brains and get good advice before going to school and accumulating debt.
I wish I would have thought more about student debt when I went into school, but I just didn't think about it at the time. I decided to go to a 4 year university at 18 because everyone I was going to high school with were doing the same. The last thing I though about was the money I would owe back. I also never even thought about how being in a wealthier neighborhood, most of my classmates had parents paying part or all of their tuition (which I am not that lucky). I now regret my college choice due to the money I put in but I'm not going to dwell on it and have a pity party thrown for me. I work hard and I'm living as frugally as I can so I can have these loans paid off in 5yrs rather than 10yrs. Yes it's a large financial burden but all you can do is buck up and pay back what you owe. You live and you learn.
Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
I decided to go to a 4 year university at 18 because everyone I was going to high school with were doing the same.
It's amazing how our experiences can ultimately shape our decisions. I graduated from high school in a working-class area where less than 10 percent of high school seniors went to four year universities. Most high school graduates in my area entered the the entry level workforce, enlisted in the military, or enrolled at a local community college where they'd drop out after a year or two. Some girls married immediately after graduation and became housewives at age 18 or 19.
I wanted to attend university after high school, and had even been accepted to three regional California state universities, but my parents discouraged it and refused to provide information for the FAFSA. So there I was, entering the low-paid entry level workforce even though I had the capacity to do more with my life.
However, things eventually worked out. I returned to school at a time in my life when I had the maturity and money to turn my dreams into a reality.
proud nurse, BSN, RN
556 Posts
I did the LPN and RN program at the same technical school (years apart), paid cash, had some tuition reimbursement and small scholarships, and I left that school both times owing nothing. I wasn't until I did the RN-BSN program that I had to take out student loans. I work with some nurses that complain about their loan debt, stating they are paying $900 monthly (and that's not a payment doubled up). I believe it is lack of research, and not looking at how incurred debt will impact them further down the line. I don't know anything about the sense of entitlement people talk about, because I've never had it in my life. Been working since I was 16, and have worked for everything I have. Nothing was ever given to me, and I prefer it that way.