There is no student loan 'crisis'
State cutbacks to higher education are forcing some people to take out more student loans.
March 30th, 2012
10:11 AM ET

There is no student loan 'crisis'

by Tami Luhby @CNNMoney

NEW YORK (CNNMoney) - Total student loan debt has topped $1 trillion ... but there's no need to panic.

Most borrowers have a reasonable amount of debt, and the total balance is not likely to cause major damage to the economy like the mortgage crisis did, experts say.

"I don't think it's a bubble," said Mark Kantrowitz, publisher of Finaid.org, a financial aid website. "Most students who graduate college are able to repay their loans."

This is not to say that there aren't problems with student loans, which now exceed the amount of credit card debt and auto loans. Students are taking on more debt, on average, and more than a quarter of borrowers are behind on their payments. And a hefty debt load could delay recent graduates' purchase of a home or starting a business.

But all the talk of a crisis or bubble in the student loan industry is exaggerated, experts say.

There's no doubt that student loan balances are rising fast, bucking the trend of other consumer debt, which fell during the Great Recession. In 2007, the total level of student loan debt was about $600 billion.

But more people are going to college these days, said Sandy Baum, senior fellow at the George Washington University School of Education. This is prompted in part by the economic downturn: When people lose their jobs or the economy turns shaky, a lot of folks return to school to learn new skills or bolster their resumes.

Read the full story from CNNMoney
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  3. Publication 970 Supporter

    I have over $60,000 in student loans which I have carried over 10 years now. I agree that with making the minimum payments these loans seem to never go down. I have lobbied Congress to increase the tax deductions on student loan interest. Raising the cap on payments or even raising the cap on how much money you have to make in order to gain the benefits from student loan interest deductions would be beneficial. Also, in addition to the federal government, states should offer student loan interest deductions. It would make those of us who are paying student loans (for the rest of our lives it seems) off, feel much better knowing at least we are getting a good solid tax benefit for it. It would be nice to be able to put a sizeable income tax return back into the principal of our student loans.

    April 3, 2012 at 9:45 am |
  4. student

    I just went back to school after getting my GED. I'm in my first year at a two-year school with the intent to transfer to a good four year school in the Philadelphia area. My grant funding was cut because of issues with my father (I'm under 24 and could not file as independent my first year) so I'm currently at school on a $5,000 unsubsidized loan. I really hate that the situation went that way, but it's only part of the big picture. I'm working (sometimes two jobs) to cover most of my living expenses and I'm really trying to keep my grades up so I can actually have opportunities for funding when it's time to transfer to another school. After last year and the nominal amount of loans I'll have to take in the coming year, I really don't want to go borrowing crazy. I realized going back to school that some debt was going to happen. Part of what's left once my tuition and books are taken care of goes to an account that will be switched to an interest-bearing savings account once I've massed enough money to make that switch.

    I do not understand how so many people are maxing out the loans they're offered and then whining about how expensive things get. Nobody says that you need to sign for ludicrous amounts of money, you can turn down part of the loan!

    April 3, 2012 at 8:24 am |
  5. TJ

    I went and received two B.S. degrees in 4.5 years in manufacturing. My wife got her B.S. in social work in 3.5 yrs. We both worked 20 hrs a week during during college, and 40 hrs during the summer to help with the costs of living. Our loans were never used to pay the rent, buy books, clothes, beer, etc. We ended up with just $52K between the two of us. 4.5 years later we have already payed off over 20% of that. We are set to have all of our student loan debt payed off in another 6 years (11 total years to pay). We were paying twice the payment every month untill we bought a house and had a kid. We both have jobs directly related to our degrees that we earned. I see so many students that think they have to go to college, and end up with a liberal studies, business, history, or some other type of gerneral degree because they have no idea what they want to do in life. Of course your not going to find a job when there are 250 people with the same qualifications as you applying. When I applyed for my job, there had only been 2-3 people who looked into but didnt have the qualifications. If you go to college, look into a specialized feild of study, and do some reserach into what salaries for that position are. My wife as a social worker knew from the start she was never going to see high wages, but she loves what she ldoes and doesnt b**tch about the salaries.

    April 3, 2012 at 7:38 am |
  6. jtkuhn

    Why is it these articles are always about the loans? How about the colleges paying sport coaches, especially football, and other staff crazy amounts of money then raising tuition to pay for it? College tuition costs have increased at a ridiculous pace over the last 20 years, but of course blame the banks who give you the ability to pay what the college asks. If the college asked for a lot less, you could get a loan for a lot less and not be in as bad of a situation when you graduate.

    April 3, 2012 at 4:15 am |
  7. Jeff

    I graduated from college two years ago with a computer science degree and about $30k in loans. I managed to get a job immediately upon graduating, have already managed to pre-pay about two thirds of them, and plan on finishing off the rest of them this year. While my inclination would just be to say "if some idiot racks up $100k in debt for an art history degree and then winds up screwed, it's not my problem because at least I was astute enough to know the importance of getting a marketable degree," I don't know that it's quite this simple... Had I been left to my own devices I probably would have wound up majoring in history or political science... and then wound up screwed. The reason I didn't was because my parents sat me down right before college, taught me exactly how student loans work (paper pencil calculator and all), and then convinced me that since I had always loved math I should probably study engineering and not liberal arts... and it was the best advice I'd ever received– I love computer science and am doing very well. The whole thing seems to boil down to the question of "does the average 18 year old have the maturity to realize the consequences of six-figure student debt?" If the answer is no, then the solutions will have to be either:
    1) Some form of debt forgiveness program for the naive kids that wind up getting screwed (and this is obviously pretty unacceptable considering that the average taxpayer already has enough problems to deal with– trying to get them to start covering kids' delinquent student loans probably isn't gonna fly).
    2) Make sure that all kids (including the ones with idiot parents) receive proper counseling on the consequences of student debt BEFORE entering college, ie high school guidance counselors that actually know what they're doing, or some kind of mandatory financial planning course before being allowed to sign on the dotted line.

    April 3, 2012 at 1:10 am |
    • mugzee

      Guess your the lucky one! I got scammed by a so called "College" and left me with no education and a s**t load of debt that took 23 years to pay off! As far as i'm concerned these student loans should be BANNED!!!

      April 3, 2012 at 2:52 am |
  8. WCJ

    Hmm. So for there to be a problem it can't just cause misery for a significant portion of the population, it has to have the potential to cause problems for the few rich people that normally skate through life unscathed. Gotcha. Guess I should have known that though, considering our treatment of poverty, crime, and all the other social problems in America.

    April 3, 2012 at 12:04 am |
  9. Tim

    You should all have just been smarter ... I was in school (undergraduate and graduate) for over 10 years and got out with only $20,000 in student loans. How? My entire undergraduate education was free (full tuition) and when you go to graduate school you should receive a stipend that is enough to live on. Here is a hint (especially for those of you complaining about expensive graduate school costs): if you have to pay that much to go to a college perhaps you are too stupid to be there in the first place. And no one should ever be paying for graduate school. That should be covered by a stipend or you should not be pursuing a post-graduate degree (doctor's and perhaps lawyers excepted of course)/

    April 2, 2012 at 7:21 pm |
    • PTWarlock

      Tim, if there were a stipend or any possible payment for my ability to attend grad school, don't you think I would have taken it?

      The fact remains that for most non-science/engineering graduate programs simply don't offer any sort of stipend, assistantship, or compensatory program. The program that I attended–an accelerated Master of Arts in Teaching program, with accompanying teacher licensure–had no possible outlet for compensation. It simply wasn't available. My college's response to aid requests was simply "just take out a student loan."

      As I've said, I worked at least part-time and nearly full-time during the entirety of my graduate school, in addition to attending classes and doing student teaching. Does my economic situation make me undeserving of higher education? Moreso, should I be denied access to reasonable aid, simply because my choice in academic discipline does not allow for an assistantship?

      Further, this debt will hang over me until I'm nearly 50 years old–figuratively speaking, I've taken out a mortgage on my mind, despite having done everything "right". All told, I'll be paying over $80,000–after interest and fees–for a college education that began with a "full tuition scholarship".

      How much more should I, or anyone else, be expected to pay?

      April 2, 2012 at 9:09 pm |
      • Engineer by school and trade

        It is simple supply and demand at work. You chose a discipline that is not that difficult to pursue, has low barriers for entry and significant supply currently. Why would anyone pay or provide incentives for another to take that route? I am an engineer with over twenty years experience currently teaching at a university. When we advertise for a position, we often find only a handful of fully-qualified applicants for tenure-track positions. My brothers and sisters in the English and Literature world recently had almost 200 fully qualified applicants for 4 temporary positions. You do the economic math....

        April 3, 2012 at 12:07 am |
      • Stephen

        You shouldn't have paid that much money to come out and get a $40,000 a year teaching job. You have to compare the value of the degree and career field to the cost. It isn't my responsibility to pay for your poor choices. I had $20,000 in undergraduate student loan debt and I paid it off in 3 years.

        April 3, 2012 at 12:10 am |
    • Thisisaname

      I'm dubious about your story, mostly because people with graduate degrees generally are able to write at least at a 12th grade level. But even if you weren't a bald faced liar, you would still be wrong about the situation these days because undergrad "free rides" simply don't exist anymore unless you are an extremely gifted athlete; and no one, and I mean absolutely no one, gets a free ride for a terminal master's. So, on the off chance that I'm wrong and you haven't created a fictional story about your own education out of thin air to impress a bunch of strangers on the Internet, you must have graduated in the 90s and are therefore completely and utterly unqualified to comment on education today.

      April 3, 2012 at 3:27 am |
      • Tim

        Sorry I didn't take the time to craft completely grammatically correct sentences for this prestigious forum. Graduated 2.5 years ago with a degree in Structural Engineering. Finished undergrad with a full academic scholarship in 2002. Had a stipend to pursue a Master's degree after that. Decided to go ahead and get the PhD. Alternately funded by school-based stipends and NDSEG Fellowship. I agree with the sentiment of a few folks in these messages ... don't take out huge student loans if you are pursuing a low market-value degree. Engineers will always be in demand. Most liberal arts majors will produce graduates that are a dime a dozen. You would need to be outstanding to reap significant rewards from those degrees ... and likely most of you are not.

        April 3, 2012 at 5:31 pm |
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  11. Payne Thomas

    I want to know why the feds loan banks money at 1 percent or lower but students are charged significantly higher amounts.
    Add to it that a bank can declare bankruptcy and walk away from the debt; student loans follow the student to their grave.
    The system is screwing the students and rewarding the banks

    April 2, 2012 at 6:46 pm |
  12. Nathen

    Folks, the issue here isnt why the loans were taken or what the money was used for. The real issue here is what happens AFTER a student graduates. I have been a "customer" of Sallie Mae for awhile and I can tell from personal experaince that the devil is in the details. There is a fee for EVERYTHING and they are not small. My loans, even with regular monthly payments, are growing not shrinking. Granted, if I could afford $800.00 a month to pay on them Im sure they will go down but on a single income that is simply out of reach. Period. Sallie Mae loves to tell everyone who will listen how hard they work to offer all these different programs to students that are need of help. The reality however is something totally different. Most of the time me, nor anyone I know, doesnt qualify for the programs they say help millions of people and the ones I do qualify for acutally increase my monthly payment amount. So here I am, 34 with no hope of EVER buying a house or having credit due to these insane loans. I fear I am not alone, my entire generation is in the same boat.

    April 2, 2012 at 6:31 pm |
  13. PTWarlock

    What I find most disturbing from arguments like these is the tendency to blame the students themselves, as critics claim "it was your choice to go to college–you should have to pay for it!. If you didn't want to pay for it, you should have done better and gotten grants or scholarships!"

    For good or for ill, the cultural expectation right now in the US is that if you want a good job, you 'must' go to college. In living up to that expectation, thousands of students–many of whom aren't really college material–head into four year programs, simply because that's what's expected of them. Colleges do little to allay this problem, as theyre constantly working to increase enrollment. Then, when they emerge into an unwelcoming job market, they're saddled with unreasonable amounts of debt with no way to pay it off.

    I graduated high school in 2001 with a 3.85 GPA. I was heavily involved in my high school–marching band, all class play, and more. I was editor in chief of our newspaper for 2 years, and qualified at both the state and national levels of student congress in the National Forensics League. I was lucky enough to receive a full tuition scholarship to a private university, during which time I worked 20 hours a week at a work study job, in addition to 12+ hour days during the summer at a local amusement park.

    I STILL emerged from undergraduate with over $17,000 in loans, which cannot be consolidated or reduced in any fashion. This total skyrocketed to $45,000 when I pursued an accellerated Master's degree program, for which scholarship and grant money was not offered. During my Master's program, I spent my weekends delivering pizza for Domino's and even worked for 4 months at a convenience store on the night shift, making donuts.

    Are these people really, honestly, trying to say that someone like me didn't work hard enough? That there's not something wrong or broken with this system? I am living evidence to the contrary, friends.

    April 2, 2012 at 4:54 pm |
    • Sith Empire

      College isn't a free ride. It provides an opportunity for those with enough drive to better themselves and make an investment in themselves to possibly better their future.

      You did it right. You walked away with a four year degree (hopefully in a decent paying career) for $17000. That has the potential to be an excellent investment. Due to the law of diminishing returns, the master's degree has the potential to be a great investment as well, but not nearly as much as the bachelor's degree.

      The main problem arises with those with questionable work ethics, who instead of working their way through college end up taking out loan after loan with little regard as to how they will pay it back. Or those who choose low paying careers.

      April 2, 2012 at 5:29 pm |
    • Chris

      You did everything right. Congratulations. There is absolutely nothing wrong with paying a lot for college with your own money. It becomes an issue when Joe Taxpayer is "required" to foot the bill. I agree that the interest rate on student loans is too high, and it will relieve some pressure on many people to restructure the loan. However, I have read of several protests organized by those interested in student loan "forgiveness." This, I hope, never occurs, as it would not only be unfair to those who were responsible and decided not to go to college due to monetary concerns, it would sink the country. Scary stuff these grasshoppers. As it stands, it is still better to be an ant, but I wonder for how much longer.........

      April 2, 2012 at 5:29 pm |
    • c s

      Yeah you are right.

      April 2, 2012 at 6:00 pm |
    • rrock

      I graduated with an engineering degree 40 years ago. Tuition was 750 per year which is close to what it costs in current dollars. It took me 8 years because I worked along the way and went part time. I did not have TV, dishwasher, computer, cell phone, dvd/cd player, car, etc. I could not afford meat or canned food or restaurants but I did graduate with little debt. I wonder why people borrow so much with so little thought given to how they will pay it off.

      April 2, 2012 at 8:05 pm |
  14. Awww- Pobracito

    Awww, Pobracito

    I wasn't especially gifted in the academics dept so I went to a Jr college and transferred to a 4 year state college. I'm not in debt.

    If you were talented in academics, you could have received a scholarship. But since you didn't, you're like me, only you chose to go to a very expensive school.

    So now you want our help that it was your decision to spend 100k on schooling...... how about no. You make your bed, you lie in it now.

    I already footed the bill for those people who got ARM lones and huuuuuuuuuge big nice houses while I could only afford a modest 1br condo on a fixed loan. Sure I could have got more, by exploiting the american dream, and maybe I too could be living it up in a nice fancy place – on your dime.

    But I have a little thing called integrity. I work my job, pay my dues, pay my taxes. I don't freeload.

    Some of you teenyboppers in college out there might want to try it some time instead of crying you got a great education. Now put your education to work, if you can. If you can't, there's always mcdonalds. But don't be a freeloader.

    April 2, 2012 at 4:19 pm |
    • Dan S

      Great post. You went to community college and now have graduated with no debt! Congratulations for living within your means. College courses wasn't the only learning going on, you get an A+ in Life.

      April 2, 2012 at 4:55 pm |
    • zexxa

      I went to a state school on student loans. I am sitting on $45000 in student loan debt. I can't find a job. Not even at McDonalds. I keep pushing my loans back every 6 months. I have no other debt other than student loan debt. It's not that people with student loan debts want handouts, we just want jobs. Real jobs. Real jobs that we can live on and start paying back our loans. If it weren't for the benevolence of family, I would be on the street by now. My husband makes enough for us to pay our bills(power, water, and insurance). We never go out. We don't pay rent. If we had to pay rent, we would be in trouble. I did the math. In order for a job to be enough to pay for my student loans, it would have to be more than minimum wage and I would have to work full time. I can't even find a full-time job right now, much less one that is more than minimum wage.
      So to you, I say kudos for not having debt, but don't be snarky to those of us that do.

      April 2, 2012 at 5:30 pm |
      • Chris

        Try Subway, or Long John Silvers, or.... (insert anything).

        April 2, 2012 at 5:35 pm |
      • Mike James

        What was your major?

        April 2, 2012 at 9:31 pm |
  15. MRM

    It is amazing how almost every post is taken over by political partisans who can never see the truth; they only see their party's talking points. I am a college professor and we do not have unions in Texas. In fact, many states are "right to work" states where unions or associations do not have collective bargaining. What is true is that the most growth in higher education has been at the administrative level. At the faculty level, most hiring has been of adjuncts, not full-time professors. Now students are paying more, while faculty are being paid less; they are not getting what they pay for. I guess that is what we get for following the business model.

    When I started college in 1986, my tuition was $50 a semester (at a California Community College). Now tuition at a Community College is over $1000 per semester. Only education and health care have experienced these rates of inflation. I did not borrow as an undergraduate, but racked up over $100,000 in student loans in graduate school. Yes, I have a job that pays well enough to pay back my student loans, but it will take some time ($700 per month over 30 years).

    When we allow young adults to begin their careers already saddled with this kind of debt, it is not only bad for them, but for the economy as a whole. How will they be able to afford a mortgage when their student loan debt is equivalent to one? How will they be able to save enough for retirement? How will they be able to save enough for their children's college expenses? Obviously, some people do not care until it affects them personally.

    April 2, 2012 at 3:39 pm |
    • Mayflower

      Funny how you blame the business modle for that bloated bureaucracy. Looks an awful like the government model to me. At least business has the sense to cut added layers of bureaucracy when they can't afford it. I don't ever see that happening in any government office. In fact, my city is in a budget crisis and has stopped filling potholes and offering some services because they can't afford it and don't want to lay off workers, yet when I walk into the city offices I see a bunch of people standing around chatting. If they are unnecessary, let them go.

      April 2, 2012 at 4:13 pm |
  16. Tim

    Over the course of college and graduate school I accrued 110,000 in student loan debt; most of my loans were unsubsidized and I went through school during the last fake "boom" so I was paying over 10% interest to Sallie Mae. I am almost totally out of debt, but the cost (personal and monetary) was enormous. I had to move back in at home at 28, could not take lower-paying jobs that I would have really enjoyed, and couldn't even afford to do things like spend $5 for lunch at work in order to cut costs, and I was one of the lucky ones who found a high-paying job (after only 3 years of searching and barely making ends meet), and was able to live off of less than 5% of my earnings.
    Frankly, I feel cheated. I bought into the notion (and was told repeatedly) that a college degree was the key to success and opportunity; instead, it's wrecked most of my adult life. I will NEVER feel comfortable making any large purchases, ever, because I am now terrified of being preyed upon by lenders. I was sold a bill of goods. It doesn't matter where you go to college. I would have been better off learning a trade instead and never getting into this mess. I was fleeced by a corrupt, profiteering system that makes a business out of selling people myths and then fleecing them.

    April 2, 2012 at 2:57 pm |
    • Chris

      Tim,

      Accruing 110K student debt was your downfall, especially since you did not want to work after graduation. Unless you are studying to be a Medical Doctor or a Lawyer, you can find much cheaper ways to finance your degree. I recently received my PHD in Electrical Engineering and now I have a job making over 6 figures. I have 8K in undergraduate student loans to pay and I was paid to go to graduate school. Quit blaming others for mistakes that were obviously yours, see a psychologist or look in the mirror. Fail to Plan and Plan to Fail.

      I have to agree with you a slight bit though, kids these days dont' have experience as 16-18 year olds to make the correct initial decisions regarding education. Money for 80% of them has no real substance and most have no real direction until further along in the degree (after much money has been spent). It is up to their parents to advise them on the correct and fiscally responsible path to degree ownership. It is obvious the high school counselors and college entrance counselors are not doing their job (or they are doing it too well). Students at the end of high school planning on going to college shoud be forced to develop an economic plan to make college "work" for them. If the schools don't, then the parents damn well should.

      Thanks.

      April 2, 2012 at 3:50 pm |
    • Sith Empire

      Sounds like you bought into a whole lot of nonsense. I worked 30+ hours a week, nights and weekends at a local hotel while attending college. I graduated with a degree in engineering and had less than $6000 in loans to pay off. I could have gotten off even cheaper if I would have decided to attend the first two years at the local community college. To walk away with that type of debt means you make a whole lot of poor choices.

      April 2, 2012 at 5:36 pm |
  17. Stephen

    I have about 22 K in student loans consolidated them and am paying 173 a month....(my first year)....last year alongI payed 2076 toward my loan but 1103 was in intrest. I say somethings not quite right about this and the rates at 6.75 percent are too high. I dont know what Id do If I owed 50 or more in student loans.....I have too pay this off sooner than later sigh😦

    April 2, 2012 at 2:55 pm |
    • Stephen

      Sorry about the mis-spellings I didnt check what I wrote before I sent it

      April 2, 2012 at 2:57 pm |
  18. Kirk

    I just received my doctorate and am employed. I consider myself extremely fortunate. My brand-new 30 year mortgage is at 3.75% interest and my car at 3.8% interest. My fixed student loan is at 6.8% (minus .2% for automatic withdrawal payments). That's a hefty rate considering the prime rate is exceedingly low right now. I have not found any way to reduce the interest rate more in line to this foundering economy. There is no refinance option on these loans. Nearly all my student loan debt was generated by having to pay for medications from the University Pharmacy since the graduate health insurance coverage was so weak. Health insurance reform was the best thing that could have happened to me and had it been a bit sooner, I would have MUCH less indebtedness.

    April 2, 2012 at 1:15 pm |
    • Dan S

      Kirk,
      I hope you understand exactly what you said here. If it wasn't for medical expenses, you would have much lower debt. Who do you think pays that debt? Exactly, the TAXPAYER. But now that you are in the work force, it is you that is paying for others medical expenses because they may or may not have good enough insurance. The fact that you feel that this health care law is great because it would impact you less, tells me all I need to know. The question you should ask is "How can a drug company only require someone in Africa or Mexico to pay .20 cents for a pill that I have to pay 2 dollars for?" There is your answer to Health Care.

      April 2, 2012 at 5:04 pm |
    • Sith Empire

      Buying a house or car at least gives the financial authority the ability to recoup some of their losses through foreclosure or repossesion. School loans have zero collateral. Go try to see what type of rates you would be paying in the real world for a loan with no collateral. You're paying bargain rates.

      April 2, 2012 at 5:42 pm |
  19. Kimber

    This issue, like most issues, is multifaceted, and to talk about it, or try to solve it, as if the issue is one group's problem (government, students, banks, or universities) exclusively is just simplistic and wrong. Some of the problems lie with the banks: Sallie Mae compounds interest *daily* on student loans, which can increase the cost of the loan by several thousands of dollars over the lifetime of loan. Government needs to offer more alternatives to paying off student loans for students who have already graduated – programs like Americorps that are typically not set up for people who are already working full time, post-college. Universities need to focus on funding measures that don't rely so heavily on government funding but can help defer or prevent tuition increases, and students need to educate themselves financially as well as academically. Oh – and people like Norm – you need to research and analyze – not just assume and preach. Your statements are inflammatory and largely untrue.

    April 2, 2012 at 1:12 pm |
  20. me

    consolidation doesn't always work. and sallie mae is no longer allowing people to refinance or consolidate private loans that they gave out. and when you have that much in student loans, that are private student loans, it's not that easy to consolidate or refinance. i need a bailout like the banks got.

    April 2, 2012 at 12:49 pm |
  21. Allinyourface

    Funny thing, Allen Greenspan said something similar about the housing bubble. Deja vu?

    April 2, 2012 at 12:38 pm |
  22. Dana

    I'm currently a graduate student. They amount to pay for classes is absurd. I have a car payment, rent, plus other typical expenses. I don't even want to know the amount of money I have taken out for my student loans. Without them I wouldn't be able to live on my own (sometimes living with your parent's isn't an option) I was working a full time job at a retail store, and while I was making enough to "live" off of I still didn't have enough to pay for the actual classes and even though they claimed they would work with me amd my school, last Easter it was mandatory that I worked 6 days a week, but it was also my finals week and asked if I could work the same amount of hrs but in 5 days and I was forced to choose... retail or grad school, not a hard choice, so I had to go back to part time and eventually a new job that paid more. Scholarships for my field are hard to come by (trust me I've looked). I could work 3 jobs to save up money to pay up for grad school, but that will take how many years? and then I want to get my PhD so add that amount of money to the list. It may suck to pay back my student loans, but what are my options? Not mention starting this summer they are taking away graduate students unsub (or sub I can't remember) loan. It's one blow after another. I would like to better my future, but the government is making it harder and harder

    April 2, 2012 at 12:31 pm |
    • Chris

      Well, just like the song goes, "You don't always get what you want..." I want a new car, but I can't afford it. School is the same thing, Sorry.

      April 2, 2012 at 1:44 pm |
      • Jessie

        Wanting to get a new car and wanting to get an education are not the same thing.

        April 2, 2012 at 3:19 pm |
      • Chris

        You're right, a car maintains its value for longer and can get you to and from work.

        April 2, 2012 at 4:44 pm |
    • Sith Empire

      Wait. What? The government is making it harder and harder for you to go to school? Go to work in the real world. Save your money. Pay for school. In that order. Quit complaining that somebody isn't holding your hand as much as you would like. Your an adult now.

      April 2, 2012 at 5:46 pm |
  23. mtbikernate

    I think a big part of the problem is that many universities don't put a lot of effort into financially advising students who are taking out these loans. I went to an expensive private liberal arts college for my BA and I'm almost finished with my MS. I'll be done with about $25,000 total loan debt, and one of those loans will be paid off within a year. That's not so bad, IMO, but with employment prospects as tough as they are, it will be difficult to find a job in my industry.

    My wife spent all her time at state schools, and finished with her veterinary degree. The "advice" given to her all through school was, "don't worry about the loan debt you are incurring" and when she finished she had more than $100,000 worth. 7 years out, we are stable with everything, and are managing to put away money into savings, even. But starting off on her own, she really could have used better advice than "don't worry about the debt you're incurring".

    I agree that there's not currently a major problem with student loan debt. Problems are still isolated. But I do believe that if things aren't brought under control, it will become a problem. Probably first for those folks who have massive debt – lawyers, doctors, etc. Then for folks with more moderate debt, but lower income potential – scientists (namely university professors), teachers, artists. Maybe folks with highly marketable degrees like engineering and business won't ever have a problem.

    April 2, 2012 at 12:21 pm |
  24. Steve

    Consolidate your loans and pay it off slowly. Yeah, you're paying for interest mainly but at least you won't be cash poor. It can be done, I assure you. I have been paying off student loans for the last decade and made a nice dent in them. Over that time, I have gained work experience and doubled my salary from where I was when I first started out. I have managed to buy a car, purchase a home and put money in savings every month. With careful planning and not living outside of your means, it's not that difficult.

    April 2, 2012 at 11:58 am |
    • Steve

      ....just to add on to this, I lived at home for 4 months before finding my first job and have been on my own ever since so it's not like I was living off of my parents either.

      April 2, 2012 at 12:00 pm |
  25. Brandon

    How is $65,000 a reasonable amount to pay back??? on average it cost me about $12-17,000 a year to go to college. I have been to three universities; Michigan State University, Eastern Michigan University, and The University of Wisconsin-Green Bay. This May I will finally graduate with a Bachelor's degree in Natural Science. My major was Biology. How am I expected to pay that money back in a reasonable amount of time given entry level jobs in the field? Are you kidding me? The price of post secondary education is absurd. Not to mention all of the Universities I attended were public universities. Just a piece of my mind, feel free to weigh in.

    April 2, 2012 at 11:48 am |
    • Norm

      And who precisely forced you to major in Bio? You knew what you were getting into when you signed up for it: Med/Dental/Vet school, Grad school, or McDonald's. How is that anyone's problem but your own?

      April 2, 2012 at 11:58 am |
    • Carl Woolf

      This begs the question, why did you borrow so much money? You could have gone to a junior college for a year or two and chosen from less expensive Universities. Unless you are getting a law degree or some other specialized degree, it is pretty well proven that the degree is worth more than the University it came from.

      April 2, 2012 at 12:08 pm |
    • Chris

      I fail to see how your mistakes are my responsibility to pay for. You take risks and you live with them, sorry.

      April 2, 2012 at 1:47 pm |
    • Ellen

      Brandon – Would you detail out the $65,000 of debt, what amount per year over how many years? Did you work part-time during the year, full-time during the summers and breaks? The local public university here runs about $11,000 per year for tuition and fees, so for a bachelor's degree, we're talking about $44,000 even if a person could borrow the full amount of tuition, which usually is not possible (loan limits). Where did you live during the school year, dorm or apartment? Did you own a car? Subsidized or unsubsidized loans, SLS or PLUS loans by your parents? Did you have any financial help from relatives? You're right, $65,000 is a lot of debt for a 4-year degree from a public university.

      I borrowed $23,000 in undergrad and graduate programs. My husband borrowed about $10,000 for undergrad, and $39,000 for grad school (unsubsidized loans due to income, interest accrued throughout) school and beyond) – Capitalized interest (accrued interest added to loan balance) put that to $42,000 before we started repayment. One layoff in the first year of employment after grad school put us almost a year behind on the student loans, so even with a deferral for U.S. Dept of Ed loans, the interest racked up at 6.8% was about $2865 per year. Subsidized loans during the same time period accrued zero interest during the school years and first six months after, and have been 3.8% since (I think). Scheduled payment per month is over $600, we are doing an extended plan of $300, which will take about forever. Mortgage is on a 15-year (rapid payoff plan due to good wages prior to layoff), and so far cannot be refinanced, so although we will be paid off in 10 years, it is a huge amount to pay each month, plus the loans.

      I love how the student loan amounts always seem to be no problem – to those who don't have them. If your parents aren't rich, or you weren't poor enough to qualify for grants and subsidized loans, it is a lot of money to owe. If you pay off within 10 years, that's a 10-year wait to use that money for something else. Doctor pal calls her medical school loans her beach house, because they are as big as a mortgage on a second property would be.

      Students with good grades and strong potential for college should have more help in paying for post-high school education. If the government (land of our tax dolllars) would provide subsidized higher education for qualified students (and by that I mean those whose grades are good enough, who show academic potential), these students could finish their educations without the debt burden hanging over them. Poor students get that, rich students get that and more, why do we not support the development of future tax-payers, as a nation? We will eventually pay off these loans, but not before we have to put our own kid through college at the same time, at whatever tuition has leaped to by then..

      April 2, 2012 at 4:10 pm |
    • dhondi

      That sounds like your problem....not everyone else's.

      April 2, 2012 at 4:25 pm |
  26. Kunst

    Well, I'm sure glad there isn't a crisis in the student loan industry. Just a crisis for students. One more way to suck the financial blood out of the 99%.

    April 2, 2012 at 11:32 am |
    • Norm

      And the (mythical) 99% have no one to blame but themselves. Just like with the housing market, the unwashed masses forced the gov't to force banks to write loans for practically anyone who could spell their name. That flooded the market with demand and new dollars that the universities were all too happy to soak up. Prices went up accordingly as faculty and staff (both unionized; go figure) fattened their bottom lines. And now we have a bunch of English and Communications majors whining that they can't find jobs.

      April 2, 2012 at 12:04 pm |
      • Busted

        stop using drugs dog... the banking/morgage environment that led to the collapse was the result of heavy lobbying by banks. At some point you will have to stop making stuff up... believe in something that is real, not mystical, stop using the drugs.

        April 2, 2012 at 4:34 pm |
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