Untenable Student Loan Loads(nytimes.com)
nytimes.com
Untenable Student Loan Loads
http://www.nytimes.com/2011/04/12/education/12college.html?_r=1&ref=education
4 comments
I figured the costs before I went to college, but coming from a wealthier family (we were never poor, my dad made sure we lived within our means, but a family of 6 as a single parent meant we were by no means rich) I couldn't get any Federal loans, having a green card also added an extra step on top of it in that by getting a student loan you have to sign up for the Selective Service System which my country can consider another countries army thereby possibly having me lose my citizenship.
I took out three student loans (3 years, 3 semesters each year) to cover all of my costs, tuition, housing, books, living expenses, and when I graduated I had 120k in student loans. This is for a software engineering degree.
I have so far paid off about 40k (mostly through money I got from my grandparents for graduating), leaving me still to pay 80k. That is a lot of money, finding a job wasn't easy either, the job I am working at now is certainly not paying a whole lot (it's below the 50k mentioned in the article as what people are earning with a bachelor degree, but I am at a startup and I love the atmosphere ...), so I am going to be spending a lot of time paying off all of my student loans.
So maybe I had the deck stacked against my favour, maybe if I had done better in high school I could have gotten more scholarships and the like (many of which BTW, as I found out, do not apply to foreign nationals/green card holders). I chose a degree in which I will eventually be making a lot of money, but for now I definitely feel like that debt is looming over me, it is holding me back from doing what I want to do (get a newer car, my beater is really on its last legs), find a place to live on my own rather than with 4 room mates.
It hasn't given me the freedom yet to purchase new tools and equipment for my woodworking hobby. I can't afford to go on a vacation to just take some time off, because I need the money I am making to pay off my loans. I am currently paying just over $700 per month for my student loans, that's a lot of money, especially compared to what I have left over after paying bills (water, electricity, gas, Internet) and rent.
So yes, I know what I got into, I knew it was going to be hard, what I wasn't expecting was that it was so hard to find a job mainly because the IT sector was hit so hard with the recession thereby causing a flood of engineers to the market, and a fresh out of school kid getting a lesser chance to find a position.
I should have done what my brothers and sister did, and that is go back to Europe and get a free education courtesy of the governemnt.
I took out three student loans (3 years, 3 semesters each year) to cover all of my costs, tuition, housing, books, living expenses, and when I graduated I had 120k in student loans. This is for a software engineering degree.
I have so far paid off about 40k (mostly through money I got from my grandparents for graduating), leaving me still to pay 80k. That is a lot of money, finding a job wasn't easy either, the job I am working at now is certainly not paying a whole lot (it's below the 50k mentioned in the article as what people are earning with a bachelor degree, but I am at a startup and I love the atmosphere ...), so I am going to be spending a lot of time paying off all of my student loans.
So maybe I had the deck stacked against my favour, maybe if I had done better in high school I could have gotten more scholarships and the like (many of which BTW, as I found out, do not apply to foreign nationals/green card holders). I chose a degree in which I will eventually be making a lot of money, but for now I definitely feel like that debt is looming over me, it is holding me back from doing what I want to do (get a newer car, my beater is really on its last legs), find a place to live on my own rather than with 4 room mates.
It hasn't given me the freedom yet to purchase new tools and equipment for my woodworking hobby. I can't afford to go on a vacation to just take some time off, because I need the money I am making to pay off my loans. I am currently paying just over $700 per month for my student loans, that's a lot of money, especially compared to what I have left over after paying bills (water, electricity, gas, Internet) and rent.
So yes, I know what I got into, I knew it was going to be hard, what I wasn't expecting was that it was so hard to find a job mainly because the IT sector was hit so hard with the recession thereby causing a flood of engineers to the market, and a fresh out of school kid getting a lesser chance to find a position.
I should have done what my brothers and sister did, and that is go back to Europe and get a free education courtesy of the governemnt.
The big question I have about this article, which unfortunately goes uncommented upon by the author has to do with the accompanying graph. Yes, students loan debt is constantly rising, but so was credit card debt until recently. The graph shows a huge decline in credit card debt. I wonder if this has to do with the economic downturn leading to bankruptcies which can clear out credit card debt?
Articles like these always make me glad I attend a very affordable school and will graduate with zero debt.
A lot of people don't seem to be making that same choice. According to the article, we're already talking about debt forgiveness. There won't be a correction in the system until consumers choose the affordable options. You don't need to spend $50k/year to get a great education.
Yeah, a lot of the buzz I read comes from people freaking out about the cost of the Ivy League.
Cost of state schools is just a tad bit less.
Cost of state schools is just a tad bit less.
Ritholtz graphed recent consumer credit activity, and student loans looked to be all of the recent credit uptick.
http://www.ritholtz.com/blog/2011/04/fade-the-consumer-credi...
http://www.ritholtz.com/blog/2011/04/fade-the-consumer-credi...
Then, figure the benefits, and don't take the Humanities degree unless you are independently wealthy or are okay being under your debt load for years and years.
It's a lousy system, but don't bias your strategy towards being a barista for years.