About paying off student loans

[Libby1987]

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?

Can someone explain this to me? Am I being dense?

[Libby1987]

I assume you graduated in 1987. College has gotten a lot more expensive since then. I got a BA at a public urban college in 2004, and tuition at that school literally doubled in 10 years. The community college where I got my ADN cost $240 per credit by the time I graduated in 2008, just before the economic collapse.

Yes, in 1987.

But I also only made $10.50/hr. We hire new nurses (first year of graduation) at $42/hr (same regions). Theoretically I could have gotten the same degree from the same school for not much more than 40K. Our new hires are making 87K+.

But to reclarify, I'm not referring to grads who cannot find work, that would be pretty impossible not to mention devastating. I know things were better back then when there was a better ROI with a near guarantee of a job upon graduation.

ETA re cost per credit, California CC's aren't remotely that costly. My daughter is going to school in San Diego and her 13 units were under $500. And her 1/3rd of rent in her apt is $430.

[Libby1987]

Here's something that throws me. In California, if you can get in and get a job, so theoretically speaking I suppose, you can graduate with a BSN for less than 50K if you're smart, frugal and pay some as you go. And you can reasonably be hired at 70K+ (nor cal anyway).

But in other states you can pay that much or more for a degree that will only get you $25/hr in the same state you paid/borrowed that money.

Why would anyone borrow a high 5 figures for a $25/hr job?

Or rather, what an awful predictament to be in.

[applewhitern, BSN, RN]

One thing I have noticed is that "today's student" takes out too much money in loans, and then uses the extra money to live on. I work with new nurses who bought a new car, have a new house with lots of expensive furniture, and all the latest technological gadgets, but owe a ton of student loan debt. Plus they are resentful that they have to pay this money back. I agree that tuition is ridiculous these days, but it has never been cheap, and most all of us struggled financially as students. I went to nursing school in the 80's at a private college, but "did without" in order to pay tuition, gas, fees, etc. I lived as cheaply as possible, but I still had to pay for childcare, etc., just so I could go to school. My first RN job paid $12 per hour. I would never have dreamed of taking out student loans to support my lifestyle. Even today I drive an old car, do not have the latest gadgets, but my home is paid for, my 100 acres is paid for, and I owe nothing. I am resentful that people want the government to bail them out of their student loan debt, while I do without a lot of things just so that I don't have any debt!

[Jules A, MSN]

It boggles my mind the lack of consumer protections we have where student loans are concerned! No bankruptcy options, statues of limits, ability to garnish social security and disability, take away a person's license to practice, etc! There are many jobs that require a license not just nursing, even a beautician needs a license. I highly doubt all these dangers are ever told to anyone signing up for student loans at that time. They only find out later, when they are in default and it is too late! If you default they tack on a 25% fee and all the capitalized interest essentially doubling or even possibly tripling the original debt. When you are in forbearance, the interest is being capitalized and the debt is growing. It disgusts me and I'm just glad I'm not going to school now when tuition is growing far beyond inflation and is out of control, yet wages are stagnant. I think bankruptcy options should be restored as well as the ability to refinance when rates go down.

It took me 23 years to pay off my loans and I never defaulted and always made my payments on time. There were times I regretted going to college due to the high loan payments and felt I would have been better off staying as a secretary. Then find out some new grads got tuition forgiveness from the hospital, while current employees didn't and others qualified for govt forgiveness, while I worked at the same hospital but didn't qualify for that either. Granted the hospital no longer gives tuition forgiveness, but it is frustrating to pay a student loan for decades and I'm sure there are many who will be in the same boat!

It is my understanding that disability does qualify for student loan forgiveness and thats enough for me. While I agree that there should be appropriate education regarding any loan a person is taking out I am no fan of adding more bankruptcy options to our society who imo has largely taken advantage of this option.

Like your frustration over not getting any loan forgiveness I'm frustrated that I have purchased modest homes that I could actually afford and have actually had to pay for them. Again I think our society has plenty of options to get out of paying for things for those who claim they didn't understand what they were getting into when they moved their excessive credit card purchased belongings into the McMansion that there is no way they could ever afford.

[Jules A, MSN]

Eventually, the student loan crisis will come to a head. It's happening in the legal field. Very high student loan burdens combined with a lack of jobs has led to an enrollment crisis. Law school applications are declining rapidly, and some law schools are in danger of closing.

And if law schools are pumping out the ridiculous number of lawyers that nursing schools are now without the need it seems as if some of them closing isn't a bad thing, right?

[steffyh]

First, I must say I'm the first in my family to go to college so I didn't have any advice about the difference b/w public and private colleges. Second, my guiance counselor was a complete dunce so didn't get any help there AND even if she weren't such a dummie, she wouldn't have been much of a help b/c the cost of college at the time she went to school was FAR less expensive than it is today.

I went to a private school that was $40,000/yr and got nothing for financial aid despite my parents' poverty (a combined family income of $75,000/yr before taxes w/ 4 children so do the math). So I took out loans from Sallie Mae.

No one told me, nor did I read in the terms, how much I would have to pay and over what period of time. I also lived on campus b/c I was an out of state student so tac on another $10,000 for living expenses. My school had a coop program which meant that it took you 5 years to get a BSN- do the math at $50,000/yr and I walk out w/ over $200,000 in debt.

Fortunately I had HRSA help for 3 years, but guess what, Auntie Sallie applied the payments to interest first so after 3 years of $3500/mo payments, I still have $193,000 to go.

Since I was so far in the hole, I figured what's another $30,000 to get a MSN and become a FNP? So I did that and doubled my pay right out of school. I now work 2 jobs (one FT and 1 per diem that is 1 day/wk) and have tripled my income. I can afford the $1400/mo loan payments which is still a lot of money, but I did what I had to do given what little info I was given/or lack of, at the time.

If I had to do it all over again, I would've gone to a state school and live at home. That's hind-sight. All I can do now is advise other prospective college students to think about the field they're entering, the school they're going to, how it will be financed, and how they will be able to pay it off.

Since I left undergrad, the cost of attending that school has shot up to $50,000/yr and that doesn't even include living expenses which are well over $10,000/yr. The issue isn't the students taking out loans they may not be able to pay, it's that the cost of college has shot up in a very small amount of time- has anyone stopped to ask whether the quality of that education has shot up at the same rate? Why is it so expensive? Why there are cuts to funding student loan programs? Why is the government making money off the student loan payments (Dept of Ed) when other companies don't pay taxes (ie GE and the NFL), etc.

I think if people want to get a college education, they shouldn't be punished after w/ payments they can't afford. There is a huge wave of former students sticking it to the government and these loan companies by not paying their debts b/c they can't afford them and further, no one wants to help them do so. The current figures for student loan debt in this country is now in the TRILLIONS of dollars and that is ridiculous. We need to stop victimizing the people who have that debt, and start looking at the colleges, the policy makers, and these loan companies for solutions or the problem will continue to get worse. Simply telling people that 'you should've done the math' isn't a solution to the greater problem- it hasn't yet and if you continue to do the same thing over and over and get the same results, you're insane!

[KeepItRealRN, BSN, RN]

I have to call BS on some of what I am reading here. When I graduated I had when adjusted for inflation about 28K (in today's dollars) in student loans. I did not use my loan money to buy a car, pay rent, go on Spring Break, buy beer etc. I used my loan money to pay tution and pay books. That is all. When I graduated my payments were about 20% of my take home salary. I could have continued to pay this for 10 years but decided to get that monkey off my back and work OT a second job and do what I had to do to get it paid off and did so in less than 5 years. I did not buy a new car after graduation, I did not buy a house, or live in an expensive apartment, take expensive trips. I worked my rear off and paid off my debt.

It is foolish go to an expensive Nursing school if you have to borrow more than 50K to do it. The cost/benefit balance is simply not there. In the long run an expensive school will not benefit you any more than a public university.

If you borrow money use ONLY for school expenses. No Spring Break, no cars, party's, beer etc. If you need these things get a job. When I was in school there were tons of work/study opportunites available.

Don't use your student loan money for living expenses. I worked when I was in school to pay for food, rent, and beer.

If you have a sizable loan to pay out of school and can't find a job in your area. Instead of whining about the debt you can't pay working at McDonalds, then MOVE. There IS a nurisning shortage out there in some areas. Where I live they are hiring new grads by the dozens at a very good wage with very good working conditions. Despite that I hear hundreds of excuses from the gainfully unemployed why they simply couldn't move here for an incredibly great opportunity. Those of you who can't get a job as a new grad in your neighborhood may have to move to another state where there is a demand. That is life. Nobody owes you anything because you went to school and took out loans. Don't give me the ol' "They lied to me" line. You signed on the dotted line and should have done your homework.

That is all, now discuss....

[KeepItRealRN, BSN, RN]

Since I left undergrad, the cost of attending that school has shot up to $50,000/yr and that doesn't even include living expenses which are well over $10,000/yr. The issue isn't the students taking out loans they may not be able to pay, it's that the cost of college has shot up in a very small amount of time- has anyone stopped to ask whether the quality of that education has shot up at the same rate? Why is it so expensive? Why there are cuts to funding student loan programs? Why is the government making money off the student loan payments (Dept of Ed) when other companies don't pay taxes (ie GE and the NFL), etc.

The reason they are able to charge that much for tuition is because there are enough people to fill the seats who are willing to pay it. It will continue to go up until it reaches a price point that produces empty seats. Then and only then will the price stabilize.

BTW you should have been able to do simple math before you started and realized that 50K x 5 years would be equal to a mortgage payment.

[Libby1987]

First, I must say I'm the first in my family to go to college so I didn't have any advice about the difference b/w public and private colleges. Second, my guiance counselor was a complete dunce so didn't get any help there AND even if she weren't such a dummie, she wouldn't have been much of a help b/c the cost of college at the time she went to school was FAR less expensive than it is today.

I went to a private school that was $40,000/yr and got nothing for financial aid despite my parents' poverty (a combined family income of $75,000/yr before taxes w/ 4 children so do the math). So I took out loans from Sallie Mae.

No one told me, nor did I read in the terms, how much I would have to pay and over what period of time. I also lived on campus b/c I was an out of state student so tac on another $10,000 for living expenses. My school had a coop program which meant that it took you 5 years to get a BSN- do the math at $50,000/yr and I walk out w/ over $200,000 in debt.

Fortunately I had HRSA help for 3 years, but guess what, Auntie Sallie applied the payments to interest first so after 3 years of $3500/mo payments, I still have $193,000 to go.

Since I was so far in the hole, I figured what's another $30,000 to get a MSN and become a FNP? So I did that and doubled my pay right out of school. I now work 2 jobs (one FT and 1 per diem that is 1 day/wk) and have tripled my income. I can afford the $1400/mo loan payments which is still a lot of money, but I did what I had to do given what little info I was given/or lack of, at the time.

If I had to do it all over again, I would've gone to a state school and live at home. That's hind-sight. All I can do now is advise other prospective college students to think about the field they're entering, the school they're going to, how it will be financed, and how they will be able to pay it off.

Since I left undergrad, the cost of attending that school has shot up to $50,000/yr and that doesn't even include living expenses which are well over $10,000/yr. The issue isn't the students taking out loans they may not be able to pay, it's that the cost of college has shot up in a very small amount of time- has anyone stopped to ask whether the quality of that education has shot up at the same rate? Why is it so expensive? Why there are cuts to funding student loan programs? Why is the government making money off the student loan payments (Dept of Ed) when other companies don't pay taxes (ie GE and the NFL), etc.

I think if people want to get a college education, they shouldn't be punished after w/ payments they can't afford. There is a huge wave of former students sticking it to the government and these loan companies by not paying their debts b/c they can't afford them and further, no one wants to help them do so. The current figures for student loan debt in this country is now in the TRILLIONS of dollars and that is ridiculous. We need to stop victimizing the people who have that debt, and start looking at the colleges, the policy makers, and these loan companies for solutions or the problem will continue to get worse. Simply telling people that 'you should've done the math' isn't a solution to the greater problem- it hasn't yet and if you continue to do the same thing over and over and get the same results, you're insane!

I was 18 once and I knew the difference between a BMW and Toyota Corolla as well as the difference between an out of state private college and the state school I went to. Neither of my parents went to college, my mother was never able to even finish HS after raised by a single mother in the Depression and they knew the difference. I truly don't understand how someone who had the intelligence to accomplish as much as you have did not. If I'm really honest, I don't find it believable that your decisions were based solely on a lack of knowledge of what 40K/yr would look like in the end, (..so do the math?) especially when you had the option of living at home and going to a state school, like I did. Was it really a lack of knowledge that caused you to decline that option?

How many years ago was 75K/yr poverty?

[Not_A_Hat_Person, RN]

And where would that be? North Dakota, where housing in "shortage" areas is more expensive than San Francisco? I suppose that could work if you don't mind living in your car.

[ixchel]

I think personal finance should be taught to all high school students before they can even sign up for student loans and an additional personal finance course in college wouldn't be bad either! I don't think we can blame excess student loan debt just on students, there have been enough exposes of shady for profit colleges recruiting people into worthless degrees and lots of debt and even mainstream colleges who were bribed to steer students to a particular lender. I've read all the crap Sallie Mae has done and excess fees, yet in spite of this knowledge the govt still keeps them as a a main loan servicer. There are other problem loan services, but Sallie Mae comes to mind because they conveniently bought out my loans without my permission, this from Citibank who had taken my loans from GLHEC.

It boggles my mind the lack of consumer protections we have where student loans are concerned! No bankruptcy options, statues of limits, ability to garnish social security and disability, take away a person's license to practice, etc! There are many jobs that require a license not just nursing, even a beautician needs a license. I highly doubt all these dangers are ever told to anyone signing up for student loans at that time. They only find out later, when they are in default and it is too late! If you default they tack on a 25% fee and all the capitalized interest essentially doubling or even possibly tripling the original debt. When you are in forbearance, the interest is being capitalized and the debt is growing. It disgusts me and I'm just glad I'm not going to school now when tuition is growing far beyond inflation and is out of control, yet wages are stagnant. I think bankruptcy options should be restored as well as the ability to refinance when rates go down.

It took me 23 years to pay off my loans and I never defaulted and always made my payments on time. There were times I regretted going to college due to the high loan payments and felt I would have been better off staying as a secretary. Then find out some new grads got tuition forgiveness from the hospital, while current employees didn't and others qualified for govt forgiveness, while I worked at the same hospital but didn't qualify for that either. Granted the hospital no longer gives tuition forgiveness, but it is frustrating to pay a student loan for decades and I'm sure there are many who will be in the same boat!

You actually have to sit through online learning about financial aid/loans, during which time everything is spelled out clearly. Payment options, penalties, etc. you aren't given your loan until you sign saying you understand it all.

[KeepItRealRN, BSN, RN]

And where would that be? North Dakota, where housing in "shortage" areas is more expensive than San Francisco? I suppose that could work if you don't mind living in your car.

No. Housing is pentiful and cheap relative to the rest of the country. Lots of housing for less than 200k. The main excuse I hear is "I can't live there. It's too cold". I know a lot of people who came here for a few years, dealt with the cold and were able to return to their homeland with something to offer and much better job prospects because of it.