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?
Most graduates I have talked to that are piled in debt without a job are those who were too lazy to look for outside scholarships or internship opportunities. Most private universities (usually the non profit ones) are generous with financial aid as long as you apply FAFSA and have decent grades. Of course you can't rely on only those. My cousin went to a private university for an accounting degree and she was always too lazy to apply to scholarships as she felt like she wasn't going to get any and ended up coming out with over 50k in debt.
To future students! Always look for opportunities to gain money. Look for scholarships or internship opportunities that pay and will look good on your resume. The people I've met who came out with very little loans were those who applied to many scholarships and worked hard to get grants.
I also only took out the minimum amount for my student loans totaling $15,000. I worked full time while going to nursing school with 4 children, divorced twin 6 month old boys, 2 year old girl and a 5 year old boy. After I graduated I moved out of my parent's home which I had to live during my divorce. Mind you I was 35. I had to defer my loans and then consolidate them because even though it was a small amount they sold off my loans to 5 different guarantors and when I consolidated I gave them every loan but they didn't put all the loans in the consolidation. While making payments they put me into default. I know many people this has happened to. The government is running the show for student loans now and the collection agencies they hired sell off to other collection agencies which work for them and they had fees each time this has happened. So I have paid $22000 on my loans and they still have me in default and continue selling them off and adding more fees. So believe it or not it is a known scam. They do not want paid off. My attorney and the US Dept of Education ombudsman is very well aware of this. Many are suffering while the collection agencies are salivating wanting these loans illegally put into default. They can add pretty much whatever fee they want and off set your tax refund. I finally almost have it cleared up. Thank GOD! It has been a nightmare.
This is a common complaint of lenders pushing people into default, denying them deferment or forbearance even when in school and then they profit because the govt pays them off, then they turn around and own the collection agencies and proceed to get double payment thru wage garnishment. The student lenders can't lose! It is a win-win for them a lose-lose for the students caught in the trap! Then try to get your name cleared when you have no viable options such as bankruptcy to force their hand to work with you. Hopefully the recent creation of the Consumer Protection Financial Bureau that Elizabeth Warren helped create will effect some well needed change. Time will tell.
I know a lot of people who accumulated 10s of 1000s of dollars revolving charges on STUFF (not essentials) and then simply said, "can't pay for it, gonna declare bankruptcy" and poof it was gone. Then a few years later, amazingly, were able to do it all again, more credit cards and even mortgages. More default. And on and on it goes. We all pay for these habits.
Yeah, this just makes me crazy! I've struggled at times to pay my debt, had some late payments and unfortunately some other mistakes that made my credit score take a hit. Yet I fought back from it, paid my bills off and my credit score while improving is still not great. Then there is my sister and her husband that went the route of claiming bankruptcy to get away from the consequences of their poor financial decisions and just 5 years later they bought a house and racked up more debt furnishing the house and buying a new car. Me? I wouldn't even qualify for a decent mortgage if I wanted one, and my car loan [used car] has a higher interest rate loan than my sisters despite the bankruptcy on her record. It seems she was rewarded for not paying her bills the first time around while I am punished for actually getting my debt paid down to a manageable load. Doesn't seem fair to me.
First- $75,000 is not a lot of money to raise 4 children and feed the 2 adults raising them. If you can do it, good for you, but my parents didn't have the money and they didn't have anything fancy, just a normal 3 bedroom house and 2 used beaters for cars. My dad is a janitor and my mom works in the call center of a credit card company so combined they don't make a lot.
Second- I too knew the difference b/w a BMW and a Toyota Corrolla, but didn't know the difference b/w in-state and out-of state quality of education so picked the private school. I also wasn't accepted into an in-state school so again, that makes things a little difficult for your argument's sake. Not to mention that again, there wasn't anyone to counsel me about these choices (but I'm happy to know you're an expert and I hope you're doing your job to inform prospective students about these things!).
Third- You clearly came from an era when the cost of college wasn't as high as it has become as evidenced by your statement about your mother being raised by a depression-era mother... what was the cost of a year of school, $2000 for you? You could likely work a summer and pay for that as my FIL did when he went to Boston College and it was $2000/year. He too was raised by a depression-era mother.
Forth- I think your response is based clearly on a lack of awareness of the current college debt crisis and again, telling people that "you don't think..." or whatever your opinion is, isn't helping the situation. My husband is a professor at a private college and in the 6 yrs he's been there, he's seen the tuition for his students go from $38,000 to $50,000+! And they don't even offer a graduate program! It's not that the quality has improved, it's for a number of other reasons that I'm sure you're not interested in since you seem to be unaware of what's going on today.
Get with the program and congrats if you can afford to pay for your kids to go to college. Mine weren't able to so I worked my tail off to get to where I am and to have what I have. I'm fortunate enough to have the ability to pay my debt. And instead of making me the villian, why not be at least grateful that I'm able to pay mine back?
Society is VICTIMIZING those who signed loan papers without reading the fine print? "Someone" should help bail out those who went to an expensive private school for an education instead of the state school they could actually afford? That "someone" might be me -- who went to the state school I could actually afford, read the fine print before signing the papers and paid off my student loans as agreed. Sorry you're in a fix, but I don't think *I* should have to bail you out.
You'll be happy to know you're not bailing me out b/c I can afford my payments. Good luck getting that fine print BTW. I did read mine, but as soon as I signed the dotted line, I got a "Change in loan terms." It's common practice, you should check into it.
Specializes in CCU, SICU, CVSICU, Precepting & Teaching.
First- $75,000 is not a lot of money to raise 4 children and feed the 2 adults raising them. If you can do it, good for you, but my parents didn't have the money and they didn't have anything fancy, just a normal 3 bedroom house and 2 used beaters for cars. My dad is a janitor and my mom works in the call center of a credit card company so combined they don't make a lot.
Second- I too knew the difference b/w a BMW and a Toyota Corrolla, but didn't know the difference b/w in-state and out-of state quality of education so picked the private school. I also wasn't accepted into an in-state school so again, that makes things a little difficult for your argument's sake. Not to mention that again, there wasn't anyone to counsel me about these choices (but I'm happy to know you're an expert and I hope you're doing your job to inform prospective students about these things!).
Third- You clearly came from an era when the cost of college wasn't as high as it has become as evidenced by your statement about your mother being raised by a depression-era mother... what was the cost of a year of school, $2000 for you? You could likely work a summer and pay for that as my FIL did when he went to Boston College and it was $2000/year. He too was raised by a depression-era mother.
Forth- I think your response is based clearly on a lack of awareness of the current college debt crisis and again, telling people that "you don't think..." or whatever your opinion is, isn't helping the situation. My husband is a professor at a private college and in the 6 yrs he's been there, he's seen the tuition for his students go from $38,000 to $50,000+! And they don't even offer a graduate program! It's not that the quality has improved, it's for a number of other reasons that I'm sure you're not interested in since you seem to be unaware of what's going on today.
Get with the program and congrats if you can afford to pay for your kids to go to college. Mine weren't able to so I worked my tail off to get to where I am and to have what I have. I'm fortunate enough to have the ability to pay my debt. And instead of making me the villian, why not be at least grateful that I'm able to pay mine back?
Your post was perhaps harsher than you intended it to be -- at least I hope that's the case!
Yes, college was cheaper back in the dinosauer days when I went to college. I made sure I knew up front how much it would cost and how much my loans would be. No one had to be around to counsel me about those choices . . . I did the research myself. Plus I was self supporting from the day after my high school graduation -- I had to work three jobs to pay my living expenses while the loans paid for school expenses. It was difficult -- at times it was very difficult. Sometimes I only ate because I worked in restaurants and a friend's family took pity and invited me to dinner -- often.
College was cheaper then. Minimum wage was lower then. I got $1.64/hour. I couldn't "work for a summer" to pay for school. I had to work constantly to keep it all going.
However much the college YOU chose cost, and whatever the total of the loans YOU signed for, YOU chose to take on the debt. And that means YOU are responsible for paying it back. Not the taxpayers, many of whom have already sacrificed to pay for our own education.
I've been following this thread for a while and I have a question for the people who find the idea of a government student loan forgiveness program so morally and ethically objectionable.
Many of you seem to have no problem with people using grants or scholarships to fund education. Many of these are sponsored by government programs.
So, how is taking taxpayers' money in the form of a government grant or scholarship (which is never paid back in any way) more ethical than using a government sponsored loan forgiveness program (which rarely forgives all the amount and almost always requires a number of years of service in a generally undesirable area)?
With the scholarship or grant, the taxpayer has no promise that the person using it ever actually uses the degree for the betterment of society, if they even graduate at all. With the loan forgiveness programs, the person using it must usually pay back some of the money in addition to working in an underserved area for a period of years, which seems to be a better ROI for the taxpayer.
There seems to be some level of cognitive dissonance at work here.
I've been following this thread for a while and I have a question for the people who find the idea of a government student loan forgiveness program so morally and ethically objectionable.
Many of you seem to have no problem with people using grants or scholarships to fund education. Many of these are sponsored by government programs.
So, how is taking taxpayers' money in the form of a government grant or scholarship (which is never paid back in any way) more ethical than using a government sponsored loan forgiveness program (which rarely forgives all the amount and almost always requires a number of years of service in a generally undesirable area)?
With the scholarship or grant, the taxpayer has no promise that the person using it ever actually uses the degree for the betterment of society, if they even graduate at all. With the loan forgiveness programs, the person using it must usually pay back some of the money in addition to working in an underserved area for a period of years, which seems to be a better ROI for the taxpayer.
There seems to be some level of cognitive dissonance at work here.
My opinion? Like I said up thread, I don't have any issue with working them off.
My orignal question was regarding the resentful attitude towards them that I've witnessed.
Current generation seems to be more materialistic and self pampering. Also the current generation has not lived through true economic struggle. Credit cards were not easy to obtain before mid 1990s. Expensive cell phones, cable, internet, movies were not monthly expenses back then either. Monthly budget planning is very different from your generation compared to the younger ones.
ElleWoods
44 Posts
Most graduates I have talked to that are piled in debt without a job are those who were too lazy to look for outside scholarships or internship opportunities. Most private universities (usually the non profit ones) are generous with financial aid as long as you apply FAFSA and have decent grades. Of course you can't rely on only those. My cousin went to a private university for an accounting degree and she was always too lazy to apply to scholarships as she felt like she wasn't going to get any and ended up coming out with over 50k in debt.
To future students! Always look for opportunities to gain money. Look for scholarships or internship opportunities that pay and will look good on your resume. The people I've met who came out with very little loans were those who applied to many scholarships and worked hard to get grants.