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Nimzovik
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Methinks what was then is not now…
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Katie966
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A lot of parents are just trying to do the best thing for their kids. Many of them did not go to college themselves, and know that it will be difficult for their kids to find a career they can make a living from without going to college. I (and my parents) were led to believe that I’d be able to find a job right after graduation, because I had a degree, and everything would be fine. They didn’t know enough about student loans OR college to be able to advise me against taking out so much, especially when counselors and college representatives made it so easy and sound like the wise thing to do.Now, I’ll grant you, my mother isn’t perfect and she definately has some room to improve in the parental advice catagory. However, she did at least have the sense to tell me to never borrow money from anyone. Some parents are downright negligent in their advice about college loans. “Oh, just take out a loan, Junior. Don’t work a job during college! That’s too much stress. Besides, college is about finding yourself!” You know what is stress? Trying to make a rent payment for this month as well as a rent payment from four years ago on the salary of a first year teacher!Way to go on the awsome advice, mother and dad!
And, besides, I have a lot of debt still but I’m doing just fine. You learn to budget and do what you have to do- and I would not have a degree today if my parents had “the sense to tell me never to borrow money from anyone”. That’s ridiculous. Will you never take out a mortgage, never take out a car loan? I don’t know anyone who can fork over enough money for a house or a car all at once. Same with education. You have to be smart about it, and understand what you are getting into, but going into “good debt” doesn’t have to be a bad thing.
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Schieffelin
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TheRealJuliane
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Makes me rather glad that I didn’t go to college at age 18, but started when I was already an adult making my own way in the world. It took me 10 years to finally earn my Bachelors degree, because I started with one class at a time, at night, at a community college, while working full time. And there were several breaks where I stopped and just worked. But I finished with ZERO debt because I paid my bills as I went. I did get one grant and a slight tuition break from one university, but other than that, it was full tuition paid by ME.
It would be difficult to do this now, though. Costs have skyrocketed even since I graduated in 1993.
It would be difficult to do this now, though. Costs have skyrocketed even since I graduated in 1993.
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Castello
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Yes, it is possible to save money for a house or a car and to always pay cash. It is hard work and sacrifice, seems no one wants to do that these days.
Mortgage interest is insane. The bank gets you to pay for that house many times over before you have a clear title. A mortgage that is more than 15 years is simply not a smart thing.
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Allegra
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It is actually quite common for people to purchase cars all at once. They save up the money before they purchase the car. What they do is they take an amout of money out of their income each month until they have enough to buy the car. It’s alot like a car loan payment except without the interest rate. A home loan is a different story entirely because unless a person has some sort of deal where they can live somewhere for free, they are going to be paying someone for lodgings. If they pay rent, the money disappears, however, if they make a mortgage payment, they are investing into something of their own that can later be liquified if need be. How exactlly do you liquify a degree if you can no longer afford the payments. Student loans are only “good debt” if there is any reasonable expectation that a person with the degree the student is seeking will be afford the payments. I’m not talking about the concern of not getting a job right away. Student loans can be deferred if the student is unemployed. (Unless the crazy parents put the loan in their own name and then it can only be deferred if they become unemployed.) What is lunacy is when people take out the value of a small house in order to seek a degree in education, music, art, fashion design, etc.
In some cases, it will be required to take out a loan to cover some of tuition. (That’s tuition, not dorm fees, food, books, fraternity fees, living expenses, car payments, gas, etc. ) If one knows that they can’t afford tuition, they should make choices prior to enrolling that will keep the amount of their loan as low as possible. For example, they could attend community college prior to enrolling in university. They could choose a less expensive college. If they’re still young enough their parents will allow them to live at home, they can choose a local school so they don’t have other expenses to worry about. People who make informed decisions end up with a student loan payment of $150 per month. Perhaps, they can even afford to make double payments and take care of it in just a few years. This is an example of the “smart loans” people are always talking about. Unfortunately, this is not what many young people have chosen to do and now they are no longer young people and they’re in big trouble. Prior to going to college, my peers and I got to see a presentation by the guidance counselor about avoiding unscrupulous individuals who would try to sell us bad credit cards. She should have shown us a video about herself.
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Allegra
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Not paying for a car in cash is even more hard work and sacrifice because you have to pay interest in addition to the cost of the car and you also get to pay fees if you have an emergency and can’t make a payment on time. There’s no such penalty if you save the money ahead of time. I think most people get a three year loan for a car. It doesn’t take an amazing amount of forsight to know you will need or want a new car in three years.Yes, it is possible to save money for a house or a car and to always pay cash. It is hard work and sacrifice, seems no one wants to do that these days.
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Allegra
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thomasf
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You can always ask for a forebearance until you are better able to pay the loans. There are supposed to be new programs for those in financial difficulties right now.
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Castello
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Someone making over 30K per year, living at home, that is something to be thankful for in this economy!
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jmcrae
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I agree - and $270.00 in spending money, as well. I don’t see anything to complain about, myself.
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Allegra
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I didn’t understand him to say that he had $270 in spending money. I thought he said he has that amount left after living expenses and that was all he had to give the loan company. Perhaps I misunderstood.
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jmcrae
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He said he makes $33,000.00 a year, and after paying his loan payment, his rent, and his household expenses, he only has $240.00 left for spending money each month.
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dixieagle
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Zundrah
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$60 a week then? :hypno: How would he cope if not living with his parents?
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Castello
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My guess is he has some very large car payment or something that is taking his money.
33K someone should be bringing home over 2K per month. That is a very good living. I beg God every day for a job that pays that.
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TheRealJuliane
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If that is the case, it’s time to sell the car! Get a cash car, and start working another job to get paying on those loans! NO MORE DEBT! He must trim his other expenses and pay back what he owes.
The most I ever made when I was working full time was about $13,000, and I lived by myself and paid all my bills. I ate well, but had little entertainment. I read a lot, don’t watch a ton of TV, had a cat for companionship. I had a car some of the time, but not always. I did live in a city with a good bus system, and I lived close enough to downtown that I could walk to work if I wished to. I haven’t lived with my dad since I was 19.
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Allegra
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Figuring taxes and possibly health insurance, it could be as little as $1600 per month. He already said what was taking up his income. (Student loans repayment) If someone takes out $100K, and his length of loan is 15 years, that comes to $556 per month and that doesn’t even include interest. Assuming he is driving an insured car, using a phone, and paying his parents some rent, that figures about right to me, even without any car payment whatsoever.
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ebonykawai
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LOL, I posted that, too, but no one seemed to notice.
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kelvinf
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I read the original post with a bit of tears in my eyes. I see education as a fundamental right of man and have never understood why it is still so unaffordable in many countries. Why on earth do parents and/or teenagers have to take extravagant loans to pay for tuition fees…? How do some other nations succeed in providing classic tuition-free education for all?
I thought I knew the American system until 2008, during the crisis, that I really understood how the system functions–on credit. Some have contradicted the poster who made the comment about a house, a car and education being credit-based. For education, it’s really just unfortunate that the system is like that. But for a car and other things, I have never undestood why people want to have things they can’t afford. And when people portray cars as being unaffordable, I guess they are referring to brand new large cars, unless all new cars in America are by their very nature expensive, so much so that, one needs to borrow money to buy one.
But I remember a thread where someone was asking about second hand cars…So I still don’t get it why people go in for things they can’t afford only to live a huge part of their lives paying debts. Seems like there is always this assumption of getting a secure job but I wonder whether there is anything like a secure job nowadays.
I thought I knew the American system until 2008, during the crisis, that I really understood how the system functions–on credit. Some have contradicted the poster who made the comment about a house, a car and education being credit-based. For education, it’s really just unfortunate that the system is like that. But for a car and other things, I have never undestood why people want to have things they can’t afford. And when people portray cars as being unaffordable, I guess they are referring to brand new large cars, unless all new cars in America are by their very nature expensive, so much so that, one needs to borrow money to buy one.
But I remember a thread where someone was asking about second hand cars…So I still don’t get it why people go in for things they can’t afford only to live a huge part of their lives paying debts. Seems like there is always this assumption of getting a secure job but I wonder whether there is anything like a secure job nowadays.
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