Student loan debt passed credit card debt in 2010, will top $1 TRILLION in 2011

Yeah, I have no debt (unless you count the credit card I use and pay in full every month) except for my student loans. Any extra money I get goes towards them. This is why I'm so jealous of these kids that are lucky enough to have parents to put them through school and put them in nice apartments or houses. I had to work part time while I was going to school full time and eventually had to start working full time and attending part time. The last few years I paid totally out of pocket, but those first years added up fast. In the end, it took 11 years, but I finally did it (July 2010). The sad thing is, now I'm paying back the loans @ more than $400/month (although I usually pay closer to $700). I made a spreadsheet to keep track of the loans....after I got my tax refund I put about $2000 toward the loans. Guess how much that saved me?

Spoiler

A whopping $.18 per day in interest!!!

As I type this, I'm paying $6.22 every day in interest alone. Once tax season is over I'm highly considering a 2nd job.

I guess after reading this, it explains 2 things....why I'm so frugal and why I'm selling my Rockets items!

Pugs

 

I’m glad I listened to my parents and went to a smaller school on a full scholarship instead of a big school on a partial one. They probably are too.... Tuition at SHSU was so much lower than UT or Tech that, even after the 4-year scholarship ran out (too busy partying to graduate in 4 years....), I was able to cashflow the rest with jobs/gigs/teaching etc. Not to mention the cost of living in Huntsville vs. Austin. Ouch.

Took me forever to get out of there, but at least when I did, it was free and clear with no debt. I know people who financed 100% of their education and they’re not even in the same fields as their degrees were in. I can’t imagine having to pay off a 6-digit loan for a degree I’m not even using.

 

I agree with you, and I am on the side of people who say quality education needs to be affordable again.

However, to give hope to those mired in debt, I doubled down on education and student loans on the gamble that I would have a financially healthy career. My bet paid off, and I got a well-paying job. In addition, I went overseas after some years and started up a business in a Third World country. The combined cash flow of domestic and international income easily affords me a comfortable lifestyle while allowing me to pay off all my debt by next year.

My anecdotal experience won't work for everyone, but massive student loan debt is not the end of the world if you play your cars right. I chose to not marry, buy a house or expensive cars, and other large expenses until I had my finances in order.

Lastly, financial literacy needs to be mandatory in high schools and college.

 

I somewhat disagree with this. I'm happy that it worked out for you, and that you're debt-free, but going to a higher-ranked undergrad really helps your career in spite of the cost.

My first two jobs out of college were working for banks in NYC because they specially recruited at my school. When comparing starting salaries along with bonuses, I was an income bracket higher than a majority of people who went to schools like UH or HCC.

For grad school, one of my friends applied to the same one as I did and she had a better standardized test score and GPA than me, yet I graduated from a better college. I got in, she didn't. During her admissions process, she commented how there was an elitist vibe - particularly during the interview.

On my side of the office, very few like me went to a public grad school; the majority have degrees from Ivy League schools. It hurts, but it's the reality of working in America.

 

I owed Rice 14k, now owe them about 3k after graduating in May, 2010.

 

Agree, but I don't think the issue here is students levering up to finance an Ivy League education. Those are likely paid back given their post-grad job prospects.

The main issue is too many students are financing 100% of the cost of their $90k liberal arts degree from small, no-name schools. Then they graduate and default on their loans within 5 years. Also according to the article, students who finance their degrees from "for profit" schools are very likely default as well.

 

isn't that a good thing?

less cc debt means people are spending within their means

more school debt means people are educating themselves

 

I didn't see anywhere in the article where it said credit card debt is going down just that student loan debt has outpaced it. If credit card debt is going down definitely a good thing but the facts on default rates among student borrowers is high is not a good thing.

 

I'm in a 46K hole debt!!!

 

This can all be traced back to the silly liberal mantra that "EVERYONE NEEDS ACCESS TO HIGHER EDUCATION!" No, everyone doesn't. In fact, most people are stupid and have no business setting foot anywhere near a college. The tuition explosion is in no way related to the cost of running a university, and has everything to do with loose student lending standards. This is one instance where the free market could really work some magic. Loans need to be priced and handed out based on risk, which is closely related to the quality of educational institution and major of study. I am not necessarily against government subsidies to keep rates affordable, but government guarantees allow the lender to ignore risk entirely. Take away the guarantees and we won't see $100k loans to 1300 SAT morons to study "communications." Or the loans will be made at very high rates to compensate for default risk. The only conceivable purpose I can see for guaranteed loans is low-income high-performing students who it is in the national interest to educate.

 

Depends on your field. Coked-up investment banker? Yes. High school music teacher? Not so much.

Eh, doesn't affect me one way or the other. I'm pretty happy, actually. We just moved into a new house last month. Twice as big as our old one. Twin boys on the way. My wife is a teacher and I'm not even using my degree in my current position.

 

I think that "out of control tuition costs" are linked to student loans and that one of the unintended consequences of the student loan program is "out of control tuition costs." I could be wrong, but my thinking is that student loans make people think that higher education is cheaper than it is, which increases the demand for higher education, which allows schools to raise the cost. If student loans were not available, then lower demand may lower the actual cost.

I recognize that student loans have done a lot of good, I just think there may be a better way to help poorer individuals obtain higher education that does not distort the cost.

 

I know undergraduate student loans are capped at $46,000 for an undergraduate degree. Does anybody know if they have been lower before or did it go up to this amount recently. Of course, $46,000 is for Stafford Loans, this does not include private loans, Perkins Loans, etc.

 

Everyone is in on this scam. There are many small private colleges who lower the standards of admission and lower the standards of education. I was bit with one of these schools. After a month talking to a few people, I found out this school had changed its name a couple times due to getting in trouble with the government. One of my professors, who was new to the school, vented to me that she was being pressured to dumb down the class to ensure everyone passed. In few words, she told me that its was best I go elsewhere.
There are schools like this all over the place who's only goal is to collect the tuition, student quality of education be dammed. What frustrates me is that the government should prevent these types of schools from dealing in financial aide.

 

This is exactly why you don't go to a private, for-profit school or any school that isn't established with a good reputation. If nothing else, go to community college, get your grades up, and transfer to a university.

 

The real problem here is the rate at which tuition/fees have been increasing since the 80s. Also that most university presidents are now former fund-raisers and not former scholars.

 

This is true. Our president retired last year. He stated it was because it was time but over the past few years he has taken a lot of heat because our new online degrees programs. They are done in conjunction with a company named Higher Ed Holdings/Academic Partnerships which the former president was also a president and chairman of one of its subsidies. We've also hired two chancellors at salaries, bonuses, etc. of over $1 million combined per year and one of them is also on the board with this company. These chancellors were also brought in specifically to boost alumni contributions and non-resident and international student populations, who typically pay the highest tuition rates of all students.


Thanks lol

 

Excellent advice. A student can go to one of our 2 year colleges, say ASU-Newport and get all of the core classes out of the way for 60% less than what it would cost them at our flagship university and nearly all of the classes will transfer equally.

 

Another good point. My institution was about to lower our admission standards to allow people who wouldn't get in elsewhere in and they would require them to take an insane amount of remedial work, which you do NOT receive credit for yet they cost the same as regular courses. They were also about to allow student to retake any course they wanted, as you cannot retake courses you receive a C or better in. That changed when the US News and World Report listed ASU as one of the best regional colleges in the South. Now they (administration) think we're the Harvard of Arkansas.

 

I think it really depend on what you go to school for, what skills you pick up, and how much does those skill differentiate you from the pack. If you can make $60K out of college, $40K of debt is not an issue.

http://money.cnn.com/2011/04/08/pf/college/best_paying_college_majors/?section=money_latest