Any hope for ever paying off huge student loan debts?

[Rau]

I am not from a well off family. I went to a state school, earned scholarships, worked two on campus jobs during semesters, worked a full time waitress job in the summers, took cheaper junior college classes for things like government/English in summer school and transferred the credits.

I graduated with no debt.

I don’t know anything about the availability of scholarships in the US, but I have to assume they can only assist a relatively small number?

My family had no money either, but I was fortunate to do university (not in the US) in the days when it was nearly free for the student (who met the academic performance threshold for their choice of course and university). I did a very “full-on” course (and full-time). I doubt I could have made it through working jobs during semester. The study demands were significant.

Those days are gone now where I live, and students need to pay a chunk of course costs, but can access preferential loan funds. This system is fair and balances the spread of costs among those who benefit.

 

[Kal2012]

I am not from a well off family. I went to a state school, earned scholarships, worked two on campus jobs during semesters, worked a full time waitress job in the summers, took cheaper junior college classes for things like government/English in summer school and transferred the credits.

I graduated with no debt.

Everyone makes their choices about where they want to go to school and why.

The thing is that kids really have no idea how having a lot of debt will impact their future choices. Everyone assumes that they will have a high paying job after college (not everyone does) and that they won’t have to worry about making rent.

The sad truth is that Americans don’t have as much social mobility as we used to. My husband and I used college to advance out of our “class” however, we also had to take on a lot of debt to do that. (Even with the scholarships and jobs, etc…I still ended up with a lot of student loan debt)

We are living a middle class lifestyle now, but we still have a lot of debt to pay off. However, if we hadn’t taken on that debt, my husband wouldn’t have been able to advance in his field to make the salary that he makes now. The piece of paper has helped him advance. His tech certifications prove that he has the knowledge base to get his foot in the door for an interview. Alternatively, for most of the jobs I had before being a SAHM, I really didn’t need a college degree.

Also, there’s a huge disconnect between what people need to live off of and what companies are willing to pay.

I’m not trying to say that all corporations are evil, but the thing is that most professionals aren’t seeing any kind of cost of living increase while everyday prices are going up. Also, real wages haven’t risen since the 1970’s. It used to be a lot of low skilled workers could find jobs at the autos or the meat packing plants, but a lot of those jobs are just gone and aren’t coming back. Or they are still around, but people are making less and the benefits aren’t as great.

There is hope for paying off your debt, but honestly, most of mine got paid off by money earned by my spouse, not by me.

I have one friend who’s saving grace is that her parents paid for her schooling and her additional schooling when she needed to change careers.

Honestly, I’d find another district to teach in or leave teaching for something that would bring in the cash. In my area, teachers w/MA’s make a lot more than 25K/year. In our old district, entry level teachers w/o a MA make 35K/year. However, teaching jobs around here are hard to get because we graduate a lot more aspiring teachers than there are positions for them. I know a few people who decided to give up on being a teacher at both the el-high level and the college level because they just couldn’t get a position in the State and had specific reasons for wanting to stay in-State.

Good luck to you, OP.

 

[Rau]

Not at all. If you wanted to, you could go. It’s just that most people didn’t see the need.

My great-grandparents were not wealthy and were very blue collar (I believe they both at most an 8th grade education), but sent all four of their children to college (2 finished, one became a veterinarian and had a fancy Pasadena practice in the 1940s). My grandpa was one who did not finish (grandpa is not super academic), but he and my grandma (another college drop-out) sent all three of their kids to a private Protestant college in the late 1960s and all three got graduate degrees (two MAs and pharmacy school). Grandpa worked in a mill and farmed and grandma was a grocery store cashier. I believe my dad said he was able to cover about $1,000 of the $1,500 tuition with his summer work, so it wasn’t all on the parents. (I note that in both the case of my great-grandparents and my grandparents, it wasn’t just dad working, but both parents–I’m sure that made a difference in a day when few women worked.)

A summer job will not pay a year (or 2/3 of a year) of veterinary tuition in this century! I can’t speak to why that might have almost been possible in the 1940s, but I am fairly sure it will not be possible again. Education is much more accessible when the costs are not borne solely by the recipient.

 

[Rau]

…I’m not trying to say that all corporations are evil, but the thing is that most professionals aren’t seeing any kind of cost of living increase while everyday prices are going up. Also, real wages haven’t risen since the 1970’s. It used to be a lot of low skilled workers could find jobs at the autos or the meat packing plants, but a lot of those jobs are just gone and aren’t coming back. Or they are still around, but people are making less and the benefits aren’t as great.

There is hope for paying off your debt, but honestly, most of mine got paid off by money earned by my spouse, not by me.

The woeful trend of real wages is something especially acute in the US. You would think it would be one of the great social issues in your country, and is related to the extraordinarily skewed distribution of incomes and wealth, whereby the top few % consistently accumulate a larger and larger % of the national wealth. I am amazed it is not more prominent in political discourse in the US.

 

[Zzyzx_Road]

A summer job will not pay a year (or 2/3 of a year) of veterinary tuition in this century! I can’t speak to why that might have almost been possible in the 1940s, but I am fairly sure it will not be possible again. Education is much more accessible when the costs are not borne solely by the recipient.

There is a way to go back to those days. But it will require the administration of great financial pain to the colleges. Unfortunately the colleges are too well connected politically so it won’t happen as long as the powers that be remain where they are. So yes the colleges are part of the 1% nailing the rest of us.

The woeful trend of real wages is something especially acute in the US. You would think it would be one of the great social issues in your country, and is related to the extraordinarily skewed distribution of incomes and wealth, whereby the top few % consistently accumulate a larger and larger % of the national wealth. I am amazed it is not more prominent in political discourse in the US.

Student loans as currently structured play a huge part in that, in allowing the 1% and the government to financialize the typical student’s income stream for their benefit. Cut that spigot off and you will see hundreds of colleges forced to close and thousands more forced to drastically reduce their tuition and other charges.

The college administrators make interesting noises to the parents and the students about the costs, but they’re also busy lobbying the government to keep the system firmly in place. Follow that money …

I think the only hope at the moment is in the trades and in online education. When more and more students start becoming aware of how bad debt is, you will see increasing demand for alternatives. I’ve been watching the online education space closely for some time now. Look up MOOC (Massive Online Open Courses). I think this has the most potential for cracking down on college expenses as there will come a time when they have to compete for students with MOOC providers who have much lower overheads. There are huge fights on the accreditation front, for instance, as the colleges attempt to protect their monopoly on the credentials required to enter the work force.

 

[signit]

A summer job will not pay a year (or 2/3 of a year) of veterinary tuition in this century! I can’t speak to why that might have almost been possible in the 1940s, but I am fairly sure it will not be possible again. Education is much more accessible when the costs are not borne solely by the recipient.

Right. When you hear the old-timers say “I worked my way through college!”, it was a different world.

My uncle, who grew up poor in a big family with no father, was able to attend a streetcar college in the next town (probably in the 1940s). Between the GI Bill and his job at the grocery store, he could do that. Today that would be almost impossible.

 

[EnglishTeacher]

I am not from a well off family. I went to a state school, earned scholarships, worked two on campus jobs during semesters, worked a full time waitress job in the summers, took cheaper junior college classes for things like government/English in summer school and transferred the credits.

I graduated with no debt.

For what it’s worth, I did pay for my undergrad degree myself, between scholarships and working before entering college and during college and summers. I ended up having to take out a small loan near the end, but paid it off within a year or two after graduating. Where I went wrong was returning to grad school and taking out big loans to pay for that.

Everyone makes their choices about where they want to go to school and why.

**The thing is that kids really have no idea how having a lot of debt will impact their future choices. ** Everyone assumes that they will have a high paying job after college (not everyone does) and that they won’t have to worry about making rent.

This is the key right here. Maybe I should have, but I truly did not understand what debt would do to my life. I think that many students in their late teens/early twenties are the same way, particularly if they have never lived on their own and managed their own finances before. Student loan companies take advantage of that naiveté, which really is almost unconscionable. Yes, it was still my choice, and I take responsibility for it and am doing what I can to pay off the debt (or at least prevent it from mushrooming any further); but it is a choice that I would never have made if I had fully understood what it could do to my future.

Good luck to you, OP.

Thank you.

 

[EnglishTeacher]

That’s not necessarily true. There was a time when it was possible for someone to get through a private school with some combination of scholarships, grants, parental funds, part time jobs and loans, then graduate with a student loan that was about the size of a moderately expensive car. I should know, I was one of those students.

For those without parental assistance, they could go to the public schools in many states and it was still possible to get out with modest loans at most. Work part time while going to school, it was possible for the part time employment to provide a considerable portion of the expenses.

Not anymore. The loans are guaranteed by the government so the private entities love to make them because they’re going to get paid no matter what. The colleges love the additional money coming in, how do you think all those college administrators get so well paid, how do you think so many new (and expensive) facilities got built. Understand something here: that additional money is coming from the student loans and not going back into student instruction. I haven’t stepped on my college campus in many years, but I’m told I wouldn’t recognize a substantial portion of it anymore. So when they call me for donations, I tell them to stuff it, I donate to far more deserving entities.

As the amount of credit made available for college expenses rose so college costs rose to meet the newly available credit. No other way this was going to turn out. Whether the creditor is a private entity or the government, they love being a creditor because with the change in bankruptcy law making it almost impossible to discharge the loan, they got the student on lockdown and can strip his assets at their leisure. In other words, the OP’s paycheck isn’t his, he’s making the money for the entity holding his loan. Pretty much for his useful working life. What’s right about that? The students might get a 25 year forgiveness? Well the government is not done with him! There’s still the IRS to pay for that loan forgiveness considered income! Nothing like a parting shot that really smarts in the wallet.

In short, it’s truly evil what has been done to students like the OP.

Further, many students are steered to college who shouldn’t be, who would be better off attending vocational training or apprenticing themselves to trades instead. But there’s no money in that for colleges, banks or the government, so they do their darndest to steer as many students as possible into the college route where these kids can get their pockets cleaned out. As part of that, these kinds of trades don’t get the good press that colleges do. Read Mike Rowe sometime…

The answer is not in more loans, not in more government subsidies. Those courses of action are simply aimed at keeping the money gravy train flowing to the colleges, helping them continue to raise their prices, nothing more. The answer is in the following actions: (1), get the government completely out of the student loan business; (2), encourage students more suited to vocational training and apprenticeship to pursue them; and (3), student loans should not be guaranteed anymore, they should be dischargeable in bankruptcy. That would force lenders to actually evaluate students for their ability to pay the loans back. That would force lenders to charge higher interest for the risk. Which in turn would result in a considerable reduction in the money made available to colleges. Which is horror to college administrators and boards as they would be … shock! gasp! … forced to cut budgets, salaries, positions and tuition just to survive.

Very, very interesting; and an excellent analysis of the whole issue.

 

[1ke]

For what it’s worth, I did pay for my undergrad degree myself, between scholarships and working before entering college and during college and summers.

I wasn’t criticizing you.

I was illustrating the difference between “then” (no easy-money federal loans which have driven up the cost of education) versus “now” (tuition, room, board, out of control).

The dorm I lived in was a 10x10 room with 2 of us in the room, a shared bathroom, and 2 suitemates in a 10x10 on the other side who also shared our bathroom. the other dorm I lived in as a shared room 12x12 with bathrooms and showers down the hall that the entire floor of girls shared. That’s it. Rooms, bathrooms, and a shared study lounge on the first floor. Coin laundry in a nearby building. That’s it. No TV. No fancy amenities.

Now, those same dorms have been converted into single rooms, apartment suites (which would be the two rooms that 4 of us shared now with 1 person living in them as separate living and bedroom quarters plus the bathroom), and with all sorts of silly “included” amenities-- BBQ pit areas, cable TV, free laundry, community kitchens, and all sort of other things that have driven the price of room and board through the roof.

That is because schools can now suck in all that student loan money to pay for the frivolity. If parents today were personally paying for that junk, they would say NO WAY. Return to the 4 in a suite, no frills dorms.

 

[signit]

This is the key right here. Maybe I should have, but I truly did not understand what debt would do to my life. I think that many students in their late teens/early twenties are the same way, particularly if they have never lived on their own and managed their own finances before. Student loan companies take advantage of that naiveté, which really is almost unconscionable. Yes, it was still my choice, and I take responsibility for it and am doing what I can to pay off the debt (or at least prevent it from mushrooming any further); but it is a choice that I would never have made if I had fully understood what it could do to my future.

And also, the institutions themselves paint a rosy picture of the job prospects.

They’ll have the picture of a recent grad in their brochure and the story about that person got all these job offers. Of course you think you’re going to have a similar experience. They’ve also been known to use misleading statistics about job placement and salaries.
I know I believed the hype twice, once for an undergrad degree and once for my master’s.

I was illustrating the difference between “then” (no easy-money federal loans which have driven up the cost of education) versus “now” (tuition, room, board, out of control).

The dorm I lived in was a 10x10 room with 2 of us in the room, a shared bathroom, and 2 suitemates in a 10x10 on the other side who also shared our bathroom. the other dorm I lived in as a shared room 12x12 with bathrooms and showers down the hall that the entire floor of girls shared. That’s it. Rooms, bathrooms, and a shared study lounge on the first floor. Coin laundry in a nearby building. That’s it. No TV. No fancy amenities.

Now, those same dorms have been converted into single rooms, apartment suites (which would be the two rooms that 4 of us shared now with 1 person living in them as separate living and bedroom quarters plus the bathroom), and with all sorts of silly “included” amenities-- BBQ pit areas, cable TV, free laundry, community kitchens, and all sort of other things that have driven the price of room and board through the roof.

That is because schools can now suck in all that student loan money to pay for the frivolity. If parents today were personally paying for that junk, they would say NO WAY. Return to the 4 in a suite, no frills dorms.

Also, my pet theory on the cost of college is that the institutions know they can get it. Not just because of student loan money but because there’s a certain group of people who can pay it. Maybe college is expensive for “middle-income” families but there are plenty of families who can pay for it without any problem; my cousin went to one of these “elite” institutions with people from “the other side of the world” (as she said) including royalty and the wealthy from foreign countries.

Further, many students are steered to college who shouldn’t be, who would be better off attending vocational training or apprenticing themselves to trades instead. But there’s no money in that for colleges, banks or the government, so they do their darndest to steer as many students as possible into the college route where these kids can get their pockets cleaned out. As part of that, these kinds of trades don’t get the good press that colleges do. Read Mike Rowe sometime…

Don’t get me started on that.

Not just colleges, banks, and the government.

But also Mommy, Daddy, the guidance counselor, and, worst of all, the peer crowd.

Funny, when I check the help wanted section in the local newspaper, I see jobs in the skilled trades and almost never anything for recent college grads.

 

[alexandratm]

Are your loans consolidated or separate? You can use Dave Ramsey’s snowball method, if they are not. Make your monthly payment, and then whatever extra you can put toward your loans, even if it’s only a small amount, pay on the principle for your lowest loan. It takes some effort, but you can eventually get momentum going.

I know how you feel, as I’m facing six figures myself from law school, and a meagre salary for long hours. But you can do it - everyone has given you great ideas.

 

[EnglishTeacher]

I wasn’t criticizing you.

I was illustrating the difference between “then” (no easy-money federal loans which have driven up the cost of education) versus “now” (tuition, room, board, out of control).

Oh, I know. I guess I just felt compelled to throw it out there.

The dorm I lived in was a 10x10 room with 2 of us in the room, a shared bathroom, and 2 suitemates in a 10x10 on the other side who also shared our bathroom. the other dorm I lived in as a shared room 12x12 with bathrooms and showers down the hall that the entire floor of girls shared. That’s it. Rooms, bathrooms, and a shared study lounge on the first floor. Coin laundry in a nearby building. That’s it. No TV. No fancy amenities.

Now, those same dorms have been converted into single rooms, apartment suites (which would be the two rooms that 4 of us shared now with 1 person living in them as separate living and bedroom quarters plus the bathroom), and with all sorts of silly “included” amenities-- BBQ pit areas, cable TV, free laundry, community kitchens, and all sort of other things that have driven the price of room and board through the roof.

That is because schools can now suck in all that student loan money to pay for the frivolity. If parents today were personally paying for that junk, they would say NO WAY. Return to the 4 in a suite, no frills dorms.

Times have definitely changed at many colleges, that’s for sure.

 

[EnglishTeacher]

Are your loans consolidated or separate? You can use Dave Ramsey’s snowball method, if they are not. Make your monthly payment, and then whatever extra you can put toward your loans, even if it’s only a small amount, pay on the principle for your lowest loan. It takes some effort, but you can eventually get momentum going.

I know how you feel, as I’m facing six figures myself from law school, and a meagre salary for long hours. But you can do it - everyone has given you great ideas.

The federal loans are consolidated, but I also have a sizable private loan that was not eligible for consolidation. I will have to look up Dave Ramsey and see what is meant by the snowball method.

 

[4stjoseph]

I owe a very large amount in student loans, due to graduate school. (If I could do it all over I would never have gone back to school if it meant going into debt like this, but that’s another story–I was young and didn’t fully understand what huge debts do to your life.) Today, I was looking at my payment history, and it says that over the last year, I have paid about $450.00 in principal and about $2,500.00 in interest. That just makes we want to cry. There really is no hope for ever paying it off for the rest of my life, that I can see, unless my circumstances change in some dramatic, unforeseen way.

My job doesn’t pay much, and I will soon be starting a second job that will bring in some extra income, but it’s all I can do to just keep my had above water financially, much less make enough to pay more than the minimum on my loans. (I don’t teach at this time, despite my user name, by the way.)

I don’t suppose anyone has any advice or knows of any programs or jobs where they will pay some of your student loans? If I had the proper skills, I would go west and work on the oil rigs.

I recommend checking out Dave Ramsey’s program The Seven Baby Steps to financial freedom, as well as reading his book Total Money Makover. My wife and I are following the program and it is awesome! Good luck!

 

[alexandratm]

The federal loans are consolidated, but I also have a sizable private loan that was not eligible for consolidation. I will have to look up Dave Ramsey and see what is meant by the snowball method.

Yes, definitely check it out! Basically, the concept is knocking out your debts smallest to largest (there are some caveats, depending on the type of debt/interest rate), and you see results faster and thus start “snowballing” towards debt elimination.

 

[Cricket2]

I still maintain one of the fastest ways to lower the tuition rates is for folks in college/university now, and those planning on it this next year, to stay home for a year. Who knows one year off might save you 100’s of thousands of dollars.

There is no excuse for the rise in tuition. Education has been turned into nothing more than a game of profit like everything else. When you consider that the average wage in this country is 40K/year (and that includes those with a higher education) one has to wonder if it really is worth it.

Reality ck: Only 2% of earners make 500K or more/year. The rest of us, with or without degrees will be stuck with the 40K. So when you do decide about school make sure it is something you are willing to do for less than compensatory wages.

 

[signit]

There is no excuse for the rise in tuition. Education has been turned into nothing more than a game of profit like everything else. When you consider that the average wage in this country is 40K/year (and that includes those with a higher education) one has to wonder if it really is worth it.

Interesting. On the one hand, I wonder if education is really worth it.

On the other hand, I wonder if in this day and age, there’s any alternative to getting an education. There aren’t the jobs available, as there were 50 or 60 years ago, where you could achieve the American dream without it.

 

[Burt_Macklin]

Reality ck: Only 2% of earners make 500K or more/year. The rest of us, with or without degrees will be stuck with the 40K. So when you do decide about school make sure it is something you are willing to do for less than compensatory wages.

Well there is still a load of salaries between 500k and 40k. It’s not as if you’re either first or you’re last. I know it wouldn’t get me up into the top 2% of wage earners but I would be happy with the solidly middle class income of 250k. (provided of course that the income is pegged to inflation)

But yes, of course, you have to realistic about what you expect to earn from your major and take into account the ease with which you can expect to find a job. You would never want to go 100k in debt getting a degree in social work, but a degree in petroleum engineering - with a mid career median salary of 160k - would probably be worth it. For most people the best way to break into the top 20% of wage earners will still be some sort of college education.